Employee Benefit Plans

Pension and other postretirement benefit plans

The Company has noncontributory defined benefit pension plans and other postretirement benefit plans for certain eligible employees. The Company uses a measurement date of December 31 for all of its pension and postretirement benefit plans.

Defined pension plan benefits to all nonunion and certain union employees hired after December 31, 2005, were discontinued. Employees that would have been eligible for defined pension plan benefits are eligible to receive additional defined contribution plan benefits. Effective January 1, 2010, all benefit and service accruals for nonunion and certain union plans were frozen. Effective June 30, 2011, all benefit and service accruals for an additional union plan were frozen. These employees will be eligible to receive additional defined contribution plan benefits.

Effective January 1, 2010, eligibility to receive retiree medical benefits was modified at certain of the Company's businesses. Employees who attain age 55 with 10 years of continuous service by December 31, 2010, will be provided the current retiree medical insurance benefits or can elect the new benefit, if desired, regardless of when they retire. All other current employees must meet the new eligibility criteria of age 60 and 10 years of continuous service at the time they retire. These employees will be eligible for a specified company funded Retiree Reimbursement Account. Employees hired after December 31, 2009, will not be eligible for retiree medical benefits.

Changes in benefit obligation and plan assets for the years ended December 31, 2011 and 2010, and amounts recognized in the Consolidated Balance Sheets at December 31, 2011 and 2010, were as follows:



	Pension Benefits						Other Postretirement Benefits
	2011			2010			2011			2010
	(In thousands)
Change in benefit obligation:
Benefit obligation at beginning of year	$	388,589		$	352,915		$	91,286		$	88,151
Service cost	2,252			2,889			1,443			1,357
Interest cost	19,500			19,761			4,700			4,817
Plan participants' contributions	—			—			2,644			2,500
Amendments	—			353			—			121
Actuarial loss	62,722			34,687			17,940			3,228
Curtailment gain	(13,939		)	—			—			—
Benefits paid	(23,506		)	(22,016		)	(7,324		)	(8,888		)
Benefit obligation at end of year	435,618			388,589			110,689			91,286
Change in net plan assets:
Fair value of plan assets at beginning of year	277,598			255,327			70,610			66,984
Actual gain (loss) on plan assets	(4,718		)	37,853			(872		)	7,278
Employer contribution	28,626			6,434			3,027			2,736
Plan participants' contributions	—			—			2,644			2,500
Benefits paid	(23,506		)	(22,016		)	(7,324		)	(8,888		)
Fair value of net plan assets at end of year	278,000			277,598			68,085			70,610
Funded status - under	$	(157,618	)	$	(110,991	)	$	(42,604	)	$	(20,676	)
Amounts recognized in the Consolidated Balance Sheets at December 31:
Other accrued liabilities (current)	$	—		$	—		$	(550	)	$	(525	)
Other liabilities (noncurrent)	(157,618		)	(110,991		)	(42,054		)	(20,151		)
Net amount recognized	$	(157,618	)	$	(110,991	)	$	(42,604	)	$	(20,676	)
Amounts recognized in accumulated other comprehensive (income) loss consist of:
Actuarial loss	$	189,494		$	117,840		$	43,861		$	20,751
Prior service cost (credit)	(632		)	631			(8,615		)	(11,292		)
Transition obligation	—			—			2,128			4,253
Total	$	188,862		$	118,471		$	37,374		$	13,712

Employer contributions and benefits paid in the preceding table include only those amounts contributed directly to, or paid directly from, plan assets. Accumulated other comprehensive (income) loss in the above table includes amounts related to regulated operations, which are recorded as regulatory assets (liabilities) and are expected to be reflected in rates charged to customers over time.

Unrecognized pension actuarial losses in excess of 10 percent of the greater of the projected benefit obligation or the market-related value of assets are amortized on a straight-line basis over the expected average remaining service lives of active participants for non-frozen plans and over the average life expectancy of plan participants for frozen plans. The market-related value of assets is determined using a five-year average of assets. Unrecognized postretirement net transition obligation is amortized over a 20-year period ending 2012.

The accumulated benefit obligation for the defined benefit pension plans reflected previously was $435.6 million and $374.5 million at December 31, 2011 and 2010, respectively.

The projected benefit obligation, accumulated benefit obligation and fair value of plan assets for the pension plans with accumulated benefit obligations in excess of plan assets at December 31 were as follows:



	2011		2010
	(In thousands)
Projected benefit obligation	$	435,618	$	388,589
Accumulated benefit obligation	$	435,618	$	374,538
Fair value of plan assets	$	278,000	$	277,598

Components of net periodic benefit cost for the Company's pension and other postretirement benefit plans for the years ended December 31 were as follows:



	Pension Benefits									Other Postretirement Benefits
	2011			2010			2009			2011			2010			2009
	(In thousands)
Components of net periodic benefit cost:
Service cost	$	2,252		$	2,889		$	8,127		$	1,443		$	1,357		$	2,206
Interest cost	19,500			19,761			21,919			4,700			4,817			5,465
Expected return on assets	(22,809		)	(23,643		)	(25,062		)	(5,051		)	(5,512		)	(5,471		)
Amortization of prior service cost (credit)	45			152			605			(2,677		)	(3,303		)	(2,756		)
Recognized net actuarial loss	4,656			2,622			2,096			753			845			970
Curtailment loss	1,218			—			1,650			—			—			—
Amortization of net transition obligation	—			—			—			2,125			2,125			2,125
Net periodic benefit cost, including amount capitalized	4,862			1,781			9,335			1,293			329			2,539
Less amount capitalized	1,196			791			1,127			(50		)	(92		)	330
Net periodic benefit cost	3,666			990			8,208			1,343			421			2,209
Other changes in plan assets and benefit obligations recognized in accumulated other comprehensive (income) loss:
Net (gain) loss	76,310			20,477			(29,000		)	23,863			1,462			(2,314		)
Prior service cost (credit)	—			353			—			—			121			(9,321		)
Amortization of actuarial loss	(4,656		)	(2,622		)	(2,096		)	(753		)	(845		)	(970		)
Amortization of prior service (cost) credit	(1,263		)	(152		)	(2,255		)	2,677			3,303			2,756
Amortization of net transition obligation	—			—			—			(2,125		)	(2,125		)	(2,125		)
Total recognized in accumulated other comprehensive (income) loss	70,391			18,056			(33,351		)	23,662			1,916			(11,974		)
Total recognized in net periodic benefit cost and accumulated other comprehensive (income) loss	$	74,057		$	19,046		$	(25,143	)	$	25,005		$	2,337		$	(9,765	)

The estimated net loss and prior service credit for the defined benefit pension plans that will be amortized from accumulated other comprehensive loss into net periodic benefit cost in 2012 are $7.6 million and $85,000, respectively. The estimated net loss, prior service credit and transition obligation for the other postretirement benefit plans that will be amortized from accumulated other comprehensive loss into net periodic benefit cost in 2012 are $1.9 million, $1.1 million and $2.1 million, respectively.

Weighted average assumptions used to determine benefit obligations at December 31 were as follows:



	Pension Benefits				Other Postretirement Benefits
	2011		2010		2011		2010
Discount rate	4.16	%	5.26	%	4.13	%	5.21	%
Expected return on plan assets	7.75	%	7.75	%	6.75	%	6.75	%
Rate of compensation increase	N/A		4.00	%	4.00	%	4.00	%

Weighted average assumptions used to determine net periodic benefit cost for the years ended December 31 were as follows:



	Pension Benefits					Other Postretirement Benefits
	2011			2010		2011		2010
Discount rate	5.26	%		5.75	%	5.21	%	5.75	%
Expected return on plan assets	7.75	%		8.25	%	6.75	%	7.25	%
Rate of compensation increase	4.00	% / N/A	*	4.00	%	4.00	%	4.00	%

* Effective June 30, 2011, all benefit and service accruals for a union plan were frozen. Compensation increases had previously been frozen for all other plans.

The expected rate of return on pension plan assets is based on the targeted asset allocation range of 60 percent to 70 percent equity securities and 30 percent to 40 percent fixed-income securities and the expected rate of return from these asset categories. The expected rate of return on other postretirement plan assets is based on the targeted asset allocation range of 65 percent to 75 percent equity securities and 25 percent to 35 percent fixed-income securities and the expected rate of return from these asset categories. The expected return on plan assets for other postretirement benefits reflects insurance-related investment costs.

Health care rate assumptions for the Company's other postretirement benefit plans as of December 31 were as follows:



				2011					2010
Health care trend rate assumed for next year	6.0	%	-	8.0	%	6.0	%	-	8.5	%
Health care cost trend rate - ultimate	5.0	%	-	6.0	%	5.0	%	-	6.0	%
Year in which ultimate trend rate achieved	1999		-	2017		1999		-	2017

The Company's other postretirement benefit plans include health care and life insurance benefits for certain employees. The plans underlying these benefits may require contributions by the employee depending on such employee's age and years of service at retirement or the date of retirement. The accounting for the health care plans anticipates future cost-sharing changes that are consistent with the Company's expressed intent to generally increase retiree contributions each year by the excess of the expected health care cost trend rate over 6 percent.

Assumed health care cost trend rates may have a significant effect on the amounts reported for the health care plans. A one percentage point change in the assumed health care cost trend rates would have had the following effects at December 31, 2011:



	1 Percentage Point Increase		1 Percentage Point Decrease
	(In thousands)
Effect on total of service and interest cost components	$	171	$	(822	)
Effect on postretirement benefit obligation	$	3,175	$	(10,946	)

The Company's pension assets are managed by 12 outside investment managers. The Company's other postretirement assets are managed by one outside investment manager. The Company's investment policy with respect to pension and other postretirement assets is to make investments solely in the interest of the participants and beneficiaries of the plans and for the exclusive purpose of providing benefits accrued and defraying the reasonable expenses of administration. The Company strives to maintain investment diversification to assist in minimizing the risk of large losses. The Company's policy guidelines allow for investment of funds in cash equivalents, fixed-income securities and equity securities. The guidelines prohibit investment in commodities and futures contracts, equity private placement, employer securities, leveraged or derivative securities, options, direct real estate investments, precious metals, venture capital and limited partnerships. The guidelines also prohibit short selling and margin transactions. The Company's practice is to periodically review and rebalance asset categories based on its targeted asset allocation percentage policy.

The fair value of the Company's pension net plan assets by class is as follows:



	Fair Value Measurements at December 31, 2011, Using
	Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)		Balance at December 31, 2011
	(In thousands)
Assets:
Cash equivalents	$	2,256	$	17,534	$	—	$	19,790
Equity securities:
U.S. companies	99,315		—		—		99,315
International companies	35,353		—		—		35,353
Collective and mutual funds (a)	43,214		15,541		—		58,755
Corporate bonds	—		23,579		289		23,868
Mortgage-backed securities	—		22,987		—		22,987
Municipal bonds	—		9,290		—		9,290
U.S. Treasury securities	—		8,642		—		8,642
Total assets measured at fair value	$	180,138	$	97,573	$	289	$	278,000

(a) Collective and mutual funds invest approximately 26 percent in common stock of mid-cap U.S. companies, 26 percent in common stock of large-cap U.S. companies, 13 percent in U.S. Treasuries, 6 percent in corporate bonds and 29 percent in other investments.



	Fair Value Measurements at December 31, 2010, Using
	Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)		Balance at December 31, 2010
	(In thousands)
Assets:
Cash equivalents	$	4,663	$	8,699	$	—	$	13,362
Equity securities:
U.S. companies	102,944		—		—		102,944
International companies	40,017		—		—		40,017
Collective and mutual funds (a)	45,410		17,701		—		63,111
Collateral held on loaned securities (b)	—		23,148		694		23,842
Corporate bonds	—		23,014		—		23,014
Mortgage-backed securities	—		19,478		—		19,478
U.S. Treasury securities	—		9,239		—		9,239
Municipal bonds	—		8,285		—		8,285
Total assets measured at fair value	193,034		109,564		694		303,292
Liabilities:
Obligation for collateral received	25,694		—		—		25,694
Net assets measured at fair value	$	167,340	$	109,564	$	694	$	277,598

(a) Collective and mutual funds invest approximately 28 percent in common stock of mid-cap U.S. companies, 24 percent in common stock of large-cap U.S. companies, 13 percent in U.S. Treasuries, 11 percent in mortgage-backed securities, 10 percent in corporate bonds, 8 percent in foreign fixed-income investments and 6 percent in common stock of small-cap U.S. companies.

(b) This class includes collateral held at December 31, 2010, as a result of participation in a securities lending program. Cash collateral is invested by the trustee primarily in repurchase agreements, mutual funds and commercial paper.

The following table sets forth a summary of changes in the fair value of the pension plan's Level 3 assets for the year ended December 31, 2011:



	Fair Value Measurements Using Significant Unobservable Inputs (Level 3)
	Corporate Bonds			Collateral Held on Loaned Securities			Total
	(In thousands)
Balance at beginning of year	$	—		$	694		$	694
Total realized/unrealized losses	(2		)	(259		)	(261		)
Purchases, issuances and settlements (net)	291			(435		)	(144		)
Balance at end of year	$	289		$	—		$	289

The following table sets forth a summary of changes in the fair value of the pension plan's Level 3 assets for the year ended December 31, 2010:



	Fair Value Measurements Using Significant Unobservable Inputs (Level 3)
		Collateral Held on Loaned Securities
		(In thousands)
Balance at beginning of year		$	937
Total realized/unrealized losses		189
Purchases, issuances and settlements (net)		(432		)
Balance at end of year		$	694

The fair value of the Company's other postretirement benefit plan assets by asset class is as follows:



	Fair Value Measurements at December 31, 2011, Using
	Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)		Balance at December 31, 2011
	(In thousands)
Assets:
Cash equivalents	$	59	$	1,836	$	—	$	1,895
Equity securities:
U.S. companies	2,098		—		—		2,098
International companies	262		—		—		262
Insurance investment contract*	—		63,830		—		63,830
Total assets measured at fair value	$	2,419	$	65,666	$	—	$	68,085

* The insurance investment contract invests approximately 49 percent in common stock of large-cap U.S. companies, 15 percent in U.S. Treasuries, 12 percent in mortgage-backed securities, 11 percent in corporate bonds, and 13 percent in other investments.



	Fair Value Measurements at December 31, 2010, Using
	Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)		Balance at December 31, 2010
	(In thousands)
Assets:
Cash equivalents	$	53	$	1,274	$	—	$	1,327
Equity securities:
U.S. companies	2,791		—		—		2,791
International companies	353		—		—		353
Insurance investment contract*	—		66,139		—		66,139
Total assets measured at fair value	$	3,197	$	67,413	$	—	$	70,610

* The insurance investment contract invests approximately 53 percent in common stock of large-cap U.S. companies, 21 percent in corporate bonds, 12 percent in mortgage-backed securities and 14 percent in other investments.

The Company expects to contribute approximately $20.2 million to its defined benefit pension plans and approximately $4.0 million to its postretirement benefit plans in 2012.

The following benefit payments, which reflect future service, as appropriate, and expected Medicare Part D subsidies are as follows:



Years	Pension Benefits		Other Postretirement Benefits		Expected Medicare Part D Subsidy
	(In thousands)
2012	$	22,426	$	6,892	$	618
2013	22,811		7,062		656
2014	23,082		7,188		694
2015	23,508		7,298		730
2016	23,893		7,371		766
2017 - 2021	127,895		37,682		4,322

Nonqualified benefit plans

In addition to the qualified plan defined pension benefits reflected in the table at the beginning of this note, the Company also has unfunded, nonqualified benefit plans for executive officers and certain key management employees that generally provide for defined benefit payments at age 65 following the employee's retirement or to their beneficiaries upon death for a 15-year period. The Company had investments of $76.9 million and $77.5 million at December 31, 2011 and 2010, respectively, consisting of equity securities of $38.4 million and $39.5 million, respectively, life insurance carried on plan participants (payable upon the employee's death) of $31.8 million and $30.7 million, respectively, and other investments of $6.7 million and $7.3 million, respectively. The Company anticipates using these investments to satisfy obligations under these plans. The Company's net periodic benefit cost for these plans was $8.1 million, $7.8 million and $8.8 million in 2011, 2010 and 2009, respectively. The total projected benefit obligation for these plans was $113.8 million and $99.4 million at December 31, 2011 and 2010, respectively. The accumulated benefit obligation for these plans was $105.7 million and $93.2 million at December 31, 2011 and 2010, respectively. A weighted average discount rate of 4 percent and 5.11 percent at December 31, 2011 and 2010, respectively, and a rate of compensation increase of 4 percent at December 31, 2011 and 2010, were used to determine benefit obligations. A discount rate of 5.11 percent and 5.75 percent at December 31, 2011 and 2010, respectively, and a rate of compensation increase of 4 percent at December 31, 2011 and 2010, were used to determine net periodic benefit cost.

The amount of benefit payments for the unfunded, nonqualified benefit plans are expected to aggregate $5.2 million in 2012; $5.9 million in 2013; $5.8 million in 2014; $6.9 million in 2015; $6.8 million in 2016 and $38.3 million for the years 2017 through 2021.

Defined contribution plans

The Company sponsors various defined contribution plans for eligible employees. Costs incurred by the Company under these plans were $27.1 million in 2011, $24.4 million in 2010 and $20.5 million in 2009.

Multiemployer plans

The Company contributes to a number of multiemployer defined benefit pension plans under the terms of collective-bargaining agreements that cover its union-represented employees. The risks of participating in these multiemployer plans are different from single-employer plans in the following aspects:


•	Assets contributed to the multiemployer plan by one employer may be used to provide benefits to employees of other participating employers


•	If a participating employer stops contributing to the plan, the unfunded obligations of the plan may be borne by the remaining participating employers


•	If the Company chooses to stop participating in some of its multiemployer plans, the Company may be required to pay those plans an amount based on the underfunded status of the plan, referred to as a withdrawal liability

The Company's participation in these plans for the annual period ended December 31, 2011, is outlined in the following table. Unless otherwise noted, the most recent Pension Protection Act zone status available in 2011 and 2010 is for the plan's year-end at December 31, 2010, and December 31, 2009, respectively. The zone status is based on information that the Company received from the plan and is certified by the plan's actuary. Among other factors, plans in the red zone are generally less than 65 percent funded, plans in the yellow zone are between 65 percent and 80 percent funded, and plans in the green zone are at least 80 percent funded. From 2009 to 2010 and 2010 to 2011, contributions by the Company to multiemployer defined benefit pension plans decreased as a result of a reduction in covered employees corresponding to a decline in overall business.



	EIN/Pension Plan Number	Pension Protection Act Zone Status		FIP/RP Status Pending/Implemented	Contributions						Surcharge Imposed	Expiration Date of Collective Bargaining Agreement
Pension Fund	EIN/Pension Plan Number	2011	2010	FIP/RP Status Pending/Implemented	2011		2010		2009		Surcharge Imposed	Expiration Date of Collective Bargaining Agreement
					(In thousands)
Edison Pension Plan	93-6061681-001	Green	Green	No	$	2,700	$	1,933	$	1,627	No	12/31/2012
IBEW Local 38 Pension Plan	34-6574238-001	Yellow as of 4/30/2011	Yellow as of 4/30/2010	Implemented	1,469		1,277		594		No	*
IBEW Local No. 82 Pension Plan	31-6127268-001	Red as of 6/30/2011	Red as of 6/30/2010	Implemented	1,331		1,569		1,197		No	*
IBEW Local 648 Pension Plan	31-6134845-001	Red as of 2/28/2011	Red as of 2/28/2010	Implemented	722		781		641		No	8/31/2012
Laborers Pension Trust Fund for Northern California	94-6277608-001	Yellow as of 5/31/2011	Yellow as of 5/31/2010	Implemented	628		413		325		No	6/30/2012*
Local Union 212 IBEW Pension Trust Fund	31-6127280-001	Yellow as of 4/30/2011	Yellow as of 4/30/2010	Implemented	776		679		469		No	*
National Electrical Benefit Fund	53-0181657-001	Green	Green	No	4,841		4,826		5,462		No	5/31/2014*
OE Pension Trust Fund	94-6090764-001	Yellow	Yellow	Implemented	1,367		1,035		1,061		No	3/31/2016*
Other funds					15,324		17,763		21,103
Total contributions					$	29,158	$	30,276	$	32,479

* Plan includes collective bargaining agreements which have expired. The agreements contain provisions that automatically renew the existing contracts in lieu of a new negotiated collective bargaining agreement.

The Company was listed in the plans' Forms 5500 as providing more than 5 percent of the total contributions for the following plans and plan years:



Pension Fund	Year Contributions to Plan Exceeded More Than 5 Percent of Total Contributions (as of December 31 of the Plan's Year-End)
Defined Benefit Pension Plan of AGC-IUOE Local 701 Pension Trust Fund	2010 and 2009
Edison Pension Plan	2010 and 2009
Eighth District Electrical Pension Fund	2010 and 2009
IBEW Local 38 Pension Plan	2010 and 2009
IBEW Local No. 82 Pension Plan	2010 and 2009
IBEW Local Union No. 357 Pension Plan A	2010 and 2009
IBEW Local 648 Pension Plan	2010 and 2009
Idaho Plumbers and Pipefitters Pension Plan	2010 and 2009
Laborers AGC Pension Trust of Montana	2009
Local Union No. 124 IBEW Pension Trust Fund	2010 and 2009
Local Union 212 IBEW Pension Trust Fund	2010 and 2009
Minnesota Teamsters Constr Division Pension Fund	2010 and 2009
Operating Engineers Local 800 and Wyoming Contractors Association, Inc. Pension Plan for Wyoming	2010 and 2009
Plumbers & Pipefitters Local 162 Pension Fund	2010 and 2009
Southwest Marine Pension Trust	2009

The Company also contributes to a number of multiemployer other postretirement plans under the terms of collective-bargaining agreements that cover its union-represented employees. These plans provide benefits such as health insurance, disability insurance and life insurance to retired union employees. Many of the multiemployer other postretirement plans are combined with active multiemployer health and welfare plans. The Company's total contributions to its multiemployer other postretirement plans, which also includes contributions to active multiemployer health and welfare plans, were $24.0 million, $24.7 million and $28.9 million for the years ended December 31, 2011, 2010 and 2009, respectively.

Amounts contributed in 2011, 2010 and 2009 to defined contribution multiemployer plans were $15.3 million, $15.4 million and $16.4 million, respectively.