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Employee Benefit Plans
 6 Months Ended
Jun. 30, 2014
Defined Benefit Plan Disclosure [Line Items]  
Employee Benefit Plans
EMPLOYEE BENEFIT PLANS

Effective April 30, 2014, Energen Corporation separated one of its defined benefit non-contributory pension plans into an Energen and an Alagasco plan reflecting the separation of assets and obligations in accordance with ERISA provisions. Energen and Alagasco remeasured these plans using current assumptions.

The components of net periodic benefit cost for Energen’s defined benefit non-contributory pension plan and certain nonqualified supplemental pension plans were as follows:



Three months ended
June 30,
Six months ended
June 30,
(in thousands)
2014
2013
2014
2013
Components of net periodic benefit cost:
 
 
 
 
Service cost
$
1,621

$
1,327

$
3,256

$
2,654

Interest cost
1,404

1,088

2,817

2,176

Expected long-term return on assets
(1,449
)
(1,323
)
(2,909
)
(2,645
)
Actuarial loss
1,407

1,823

2,819

3,657

Prior service cost amortization
57

62

114

123

Settlement charge
115

—

3,673

144

Net periodic expense
$
3,155

$
2,977

$
9,770

$
6,109



Included in discontinued operations for the three months and six months ended June 30, 2014 was $2.6 million and $5.3 million, respectively, of net periodic benefit cost for Alagasco’s two defined benefit non-contributory pension plans and allocated costs from the Energen nonqualified supplemental pension plans. Included in discontinued operations for the three months and six months ended June 30, 2013 was $3.5 million and $7.0 million, respectively, of net periodic benefit cost for Alagasco’s two defined benefit non-contributory pension plans and allocated costs from the Energen nonqualified supplemental pension plans.

Energen anticipates required contributions of approximately $1.6 million during 2014 to the qualified pension plans. Energen expects sufficient funding credits, as established under Internal Revenue Code Section 430(f), exist to meet the required funding. Additionally, it is not anticipated that the funded status of the qualified pension plans will fall below statutory thresholds requiring accelerated funding or constraints on benefit levels or plan administration. Energen made a discretionary contribution of $1.6 million to the qualified pension plans in January 2014. During 2014, Energen may make discretionary contributions to the qualified pension plans depending on the amount and timing of employee retirements and market conditions. For the three months and six months ended June 30, 2014, Energen made benefit payments aggregating $33,000 and $0.9 million, respectively, to retirees from the non-qualified supplemental retirement plans and expects to make additional benefit payments of approximately $5.2 million through the remainder of 2014. In the second quarter of 2014, Energen incurred settlement charges of $0.7 million for the payment of lump sums from the qualified defined benefit pension plans, of which $0.4 million was expensed and $0.3 million was recognized as a pension asset in regulatory assets at Alagasco. In the first quarter of 2014, Energen incurred settlement charges of $6.9 million for the payment of lump sums from the qualified defined benefit pension plans of which $3.7 million is included in discontinued operations. Also in the first quarter of 2014, Energen incurred a settlement charge of $0.4 million for the payment of lump sums from the non-qualified supplemental retirement plans. In the first quarter of 2013, Energen incurred a settlement charge of $0.5 million for the payment of lump sums from the non-qualified supplemental retirement plans, of which $0.1 million was expensed and $0.4 million was recognized as a pension asset in regulatory assets at Alagasco.


Also effective April 30, 2014, Energen Corporation separated its postretirement health care and life insurance benefit plans into separate plans established for Energen and Alagasco employees in accordance with ERISA provisions. Energen and Alagasco remeasured these plans using current assumptions.

The components of net periodic postretirement benefit expense for Energen’s postretirement benefit plans were as follows:



Three months ended
June 30,
Six months ended
June 30,
(in thousands)
2014
2013
2014
2013
Components of net periodic benefit cost:
 
 
 
 
Service cost
$
59

$
112

$
119

$
223

Interest cost
224

176

450

351

Expected long-term return on assets
(383
)
(214
)
(770
)
(426
)
Actuarial loss
(209
)
—

(421
)
—

Transition amortization
15

63

30

126

Net periodic (income) expense
$
(294
)
$
137

$
(592
)
$
274



Included in discontinued operations for the three months and six months ended June 30, 2014 was $0.8 million and $1.6 million, respectively, of net periodic postretirement benefit income for Alagasco’s postretirement benefit plans. Included in discontinued operations for the three months and six months ended June 30, 2013 was $0.2 million and $0.5 million, respectively, of net periodic postretirement benefit expense for Alagasco’s postretirement benefit plans. There are no required contributions to the postretirement benefit plans during 2014.
Alabama Gas Corporation
  
Defined Benefit Plan Disclosure [Line Items]  
Employee Benefit Plans
EMPLOYEE BENEFIT PLANS

Effective April 30, 2014, Energen Corporation separated one of its defined benefit non-contributory pension plans into an Energen and an Alagasco plan reflecting the separation of assets and obligations in accordance with ERISA provisions. Energen and Alagasco remeasured these plans using current assumptions.

The components of net periodic benefit cost for Alagasco’s two defined benefit non-contributory pension plans and allocated costs from the Energen nonqualified supplemental pension plans were as follows:



Three months ended
June 30,
Six months ended
June 30,
(in thousands)
2014
2013
2014
2013
Components of net periodic benefit cost:
 
 
 
 
Service cost
$
1,696

$
2,176

$
3,393

$
4,352

Interest cost
1,439

1,612

2,878

3,225

Expected long-term return on assets
(1,679
)
(2,315
)
(3,359
)
(4,632
)
Actuarial loss
1,110

1,937

2,220

3,878

Prior service cost amortization
71

72

143

144

Net periodic expense
$
2,637

$
3,482

$
5,275

$
6,967



Alagasco anticipates required contributions of approximately $2.9 million during 2014 to the qualified pension plans. Alagasco expects sufficient funding credits, as established under Internal Revenue Code Section 430(f), exist to meet the required funding. Additionally, it is not anticipated that the funded status of the qualified pension plans will fall below statutory thresholds requiring accelerated funding or constraints on benefit levels or plan administration. Alagasco made a discretionary contribution of $1.4 million to the qualified pension plans in January 2014. During 2014, Alagasco may make discretionary contributions to the qualified pension plans depending on the amount and timing of employee retirements and market conditions. In the first quarter of 2014, Alagasco incurred a settlement charge of $10.2 million for the payment of lump sums from the qualified defined benefit pension plans which was recognized as a pension asset in regulatory assets at Alagasco.

Also effective April 30, 2014, Energen Corporation separated its postretirement health care and life insurance benefit plans into separate plans established for Energen and Alagasco employees in accordance with ERISA provisions. Energen and Alagasco remeasured these plans using current assumptions.





The components of net periodic postretirement benefit (income) expense for Alagasco’s postretirement benefit plans were as follows:



Three months ended
June 30,
Six months ended
June 30,
(in thousands)
2014
2013
2014
2013
Components of net periodic benefit cost:
 
 
 
 
Service cost
$
132

$
314

$
265

$
629

Interest cost
614

664

1,227

1,328

Expected long-term return on assets
(1,172
)
(994
)
(2,343
)
(1,989
)
Actuarial loss
(388
)
—

(777
)
—

Transition amortization
17

251

34

502

Net periodic (income) expense
$
(797
)
$
235

$
(1,594
)
$
470



There are no required contributions to the postretirement benefit plans during 2014.