XML 27 R46.htm IDEA: XBRL DOCUMENT v2.4.0.6
Pension and Other Postretirement Benefit Plans (Tables)
12 Months Ended
Dec. 31, 2011
Dec. 31, 2010
Defined Benefit Plan Disclosure [Line Items]    
Estimated Future Benefit Payments [Table Text Block]
Estimated Future Benefit Payments
 
 
Postretirement
 
Pension
Health and Life
Millions
 
 
2012

$29.2


$8.3

2013

$30.0


$9.2

2014

$31.2


$10.2

2015

$32.3


$11.2

2016

$33.4


$11.9

Years 2017 – 2021

$181.4


$66.6

 
Pension and Postretirement Health and Life Costs Recorded in Other Long-Term Assets and Accumulated Other Comprehensive Income Expected to be Recognized over the Next Fiscal Year [Table Text Block]
The pension and postretirement health and life costs recorded in regulatory long-term assets and accumulated other comprehensive income expected to be recognized as a component of net pension and postretirement benefit costs for the year ending December 31, 2012, are as follows:

 
Pension
Postretirement
Health and Life
Millions
 
 
Net Loss

$17.5


$7.5

Prior Service Costs

$0.3


($1.7
)
Transition Obligations


$0.1

Total Pension and Postretirement Health and Life Costs

$17.8


$5.9

 
Weighted-Average Assumptions Used to Determine Benefit Obligation and Net Periodic Benefit Costs [Table Text Block]
Weighted-Average Assumptions Used to Determine Benefit Obligation
Year Ended December 31
2011
2010
Discount Rate
 
 
Pension
4.54
%
5.36
%
Postretirement Health and Life
4.56
%
5.40
%
Rate of Compensation Increase
4.3 - 4.6%

4.3 - 4.6%

Health Care Trend Rates
 
 

Trend Rate
10
%
10
%
Ultimate Trend Rate
5
%
5
%
Year Ultimate Trend Rate Effective
2018

2018


Weighted-Average Assumptions Used to Determine Net Periodic Benefit Costs
Year Ended December 31
2011
2010
2009
Discount Rate
5.36 - 5.40%

5.81
%
6.12
%
Expected Long-Term Return on Plan Assets (a)
 
 
 
Pension
8.5
%
8.5
%
8.5
%
Postretirement Health and Life
6.8 - 8.5%

6.8 - 8.5%

6.8 - 8.5%

Rate of Compensation Increase
4.3 - 4.6%

4.3 - 4.6%

4.3 - 4.6%

(a)    The expected long-term rate of return used to determine net periodic benefit expenses for 2012 has been reduced to 8.25 percent.
 
Sensitivity of a One-Percentage-Point Change in Health Care Trend Rates [Table Text Block]
Sensitivity of a One-Percentage-Point Change in Health Care Trend Rates
 
One Percent
One Percent
 
Increase
Decrease
Millions
 
 
Effect on Total of Postretirement Health and Life Service and Interest Cost

$2.0

$(1.6)
Effect on Postretirement Health and Life Obligation

$25.1

$(20.7)
 
Actual Plan Asset Allocations [Table Text Block]
Actual Plan Asset Allocations
 
Pension
Postretirement
Health and Life (a)
 
2011
2010
2011
2010
Equity Securities
52
%
52
%
51
%
58
%
Debt Securities
27
%
29
%
39
%
33
%
Real Estate
5
%
5
%


Private Equity
16
%
14
%
10
%
9
%
 
100
%
100
%
100
%
100
%
(a)
Includes VEBAs and irrevocable grantor trusts.

 
Plan Asset Target Allocations [Table Text Block]
Plan Asset Target Allocations
 
 
Postretirement
 
Pension
Health and Life (a)
Equity Securities
52
%
48
%
Debt Securities
30
%
34
%
Real Estate
9
%
9
%
Private Equity
9
%
9
%
 
100
%
100
%
(a)
Includes VEBAs and irrevocable grantor trusts.
 
Recurring Fair Value Measures [Table Text Block]
 
At Fair Value as of December 31, 2011
Recurring Fair Value Measures
Level 1
 
Level 2
 
Level 3
 
Total
Millions
 
 
 
 
 
 
 
Assets:
 
 
 
 
 
 
 
Equity Securities

$17.6

 

 

 

$17.6

Available-for-sale Securities – Corporate Debt Securities

 

$8.2

 

 
8.2

Money Market Funds
11.4

 

 

 
11.4

Total Fair Value of Assets

$29.0

 

$8.2

 

 

$37.2

 
 
 
 
 
 
 
 
Liabilities:
 
 
 
 
 
 
 
Deferred Compensation

 

$12.8

 

 

$12.8

Derivatives - Interest Rate Swap

 
0.4

 

 
0.4

Total Fair Value of Liabilities

 

$13.2

 

 

$13.2

Total Net Fair Value of Assets (Liabilities)

$29.0

 
$(5.0)
 

 

$24.0

 
At Fair Value as of December 31, 2010
Recurring Fair Value Measures
Level 1
 
Level 2
 
Level 3
 
Total
Millions
 
 
 
 
 
 
 
Assets:
 
 
 
 
 
 
 
Equity Securities

$19.4

 

 

 

$19.4

Available-for-sale Securities
 
 
 
 
 
 
 
Corporate Debt Securities

 

$7.5

 

 
7.5

Debt Securities Issued by States of the United States (ARS)

 

 

$6.7

 
6.7

Total Available-for-sale Securities

 
7.5

 
6.7

 
14.2

Money Market Funds
0.8

 

 

 
0.8

Total Fair Value of Assets

$20.2

 

$7.5

 

$6.7

 

$34.4

 
 
 
 
 
 
 
 
Liabilities:
 
 
 
 
 
 
 
Deferred Compensation

 

$13.3

 

 

$13.3

Total Fair Value of Liabilities

 

$13.3

 

 

$13.3

 
 
 
 
 
 
 
 
Total Net Fair Value of Assets (Liabilities)

$20.2

 
$(5.8)
 

$6.7

 

$21.1

Activity in Level 3 [Table Text Block]
Recurring Fair Value Measures
Activity in Level 3
Debt Securities
Issued by States
of the United
States (ARS)
Millions
 
Balance as of December 31, 2010

$6.7

Settled During the Period

Redeemed During the Period (a)
(6.7
)
Balance as of December 31, 2011

(a)
The ARS were redeemed at carrying value on January 5, 2011.

Recurring Fair Value Measures
Activity in Level 3
Derivatives
 
Debt Securities
Issued by States
of the United
States (ARS)
Millions
 
 
 
Balance as of December 31, 2009

$0.7

 

$6.7

Settled During the Period (a)
(0.7
)
 

Redeemed During the Period

 

Balance as of December 31, 2010

 

$6.7

(a)
During the second quarter of 2010, the $0.7 million of financial transmission rights derivatives were settled.
Pension [Member]
   
Defined Benefit Plan Disclosure [Line Items]    
Obligation and Funded Status [Table Text Block]
Pension Obligation and Funded Status
Year Ended December 31
2011
2010
Millions
 
 
Accumulated Benefit Obligation

$550.6


$485.6

Change in Benefit Obligation
 

 

Obligation, Beginning of Year

$525.6


$465.2

Service Cost
7.6

6.2

Interest Cost
27.4

26.2

Actuarial Loss
54.6

47.1

Benefits Paid
(28.6
)
(27.2
)
Participant Contributions
10.9

8.1

Obligation, End of Year

$597.5


$525.6

Change in Plan Assets
 

 

Fair Value, Beginning of Year

$382.0


$327.6

Actual Return on Plan Assets
33.1

45.6

Employer Contribution
45.8

36.0

Benefits Paid
(28.5
)
(27.2
)
Fair Value, End of Year

$432.4


$382.0

Funded Status, End of Year
$(165.1)
$(143.6)
 
 
 
Net Pension Amounts Recognized in Consolidated Balance Sheet Consist of:
 

 

Current Liabilities
$(1.1)
$(0.8)
Non-Current Liabilities
$(164.0)
$(142.8)
 
Unrecognized Pension and Other Postretirement Costs [Table Text Block]
The pension costs that are reported as a component within our consolidated balance sheet, reflected in long-term regulatory assets and accumulated other comprehensive income, consist of the following:

Unrecognized Pension Costs
Year Ended December 31
2011
2010
Millions
 
 
Net Loss

$269.0


$225.1

Prior Service Cost
1.1

1.4

Total Unrecognized Pension Costs

$270.1


$226.5

 
Components of Net Periodic Expense [Table Text Block]
Components of Net Periodic Pension Expense
Year Ended December 31
2011
2010
2009
Millions
 
 
 
Service Cost

$7.6


$6.2


$5.7

Interest Cost
27.4

26.2

26.2

Expected Return on Plan Assets
(34.6
)
(33.7
)
(33.8
)
Amortization of Loss
12.1

6.6

3.4

Amortization of Prior Service Costs
0.3

0.5

0.6

Net Pension Expense

$12.8


$5.8


$2.1

 
Other Changes in Plan Assets and Benefit Obligations Recognized in Other Comprehensive Income and Regulatory Assets [Table Text Block]
Other Changes in Pension Plan Assets and Benefit Obligations Recognized in
Other Comprehensive Income and Regulatory Assets
Year Ended December 31
2011
2010
Millions
 
 
Net Loss

$56.1


$35.2

Amortization of Prior Service Cost
(0.3
)
(0.5
)
Amortization of Gain
(12.2
)
(6.6
)
Total Recognized in Other Comprehensive Income and Regulatory Assets

$43.6


$28.1

 
Information for Pension Plans with an Accumulated Benefit Obligation in Excess of Plan Assets [Table Text Block]
Information for Pension Plans with an Accumulated Benefit Obligation in Excess of Plan Assets
Year Ended December 31
2011
2010
Millions
 
 
Projected Benefit Obligation

$597.5


$525.6

Accumulated Benefit Obligation

$550.6


$485.6

Fair Value of Plan Assets

$432.4


$382.0

 
Recurring Fair Value Measures [Table Text Block]
 
At Fair Value as of December 31, 2011
Recurring Fair Value Measures
Level 1
Level 2
Level 3
Total
Millions
 
 
 
 
Assets:
 
 
 
 
Equity Securities:
 
 
 
 
     U.S. Large-cap (a)

$32.1


$37.3



$69.4

     U.S. Mid-cap Growth (a)
13.5

15.8


29.3

     U.S. Small-cap (a)
13.1

15.2


28.3

International

75.1


75.1

ALLETE
21.3



21.3

Debt Securities:
 

 

 

 

Mutual Funds
72.8



72.8

Fixed Income

45.5


45.5

Other Types of Investments:
 

 

 

 

Private Equity Funds



$69.0

69.0

Real Estate


21.7

21.7

Total Fair Value of Assets

$152.8


$188.9


$90.7


$432.4

(a)
The underlying investments classified under U.S. Equity Securities consist of Money Market Funds and U.S. Government Bonds (Level 1), and Funds (Level 2), which are combined with futures, which settle daily, in a portable alpha program to achieve the returns of the U.S. Equity Securities Large-cap, Mid-cap Growth, and Small-cap funds. Our exposure with respect to these investments includes both the futures and the underlying investments. 
 
At Fair Value as of December 31, 2010
Recurring Fair Value Measures
Level 1
Level 2
Level 3
Total
Millions
 
 
 
 
Assets:
 
 
 
 
Equity Securities:
 
 
 
 
     U.S. Large-cap (a)

$30.4


$29.9


$3.5


$63.8

     U.S. Mid-cap Growth (a)
14.0

13.7

1.6

29.3

     U.S. Small-cap (a)
13.7

13.5

1.6

28.8

International

77.1


77.1

Debt Securities:
 

 

 

 

Mutual Funds
46.5



46.5

Fixed Income

65.7


65.7

Other Types of Investments:
 

 

 

 

Private Equity Funds


50.7

50.7

Real Estate


20.1

20.1

Total Fair Value of Assets

$104.6


$199.9


$77.5


$382.0

(a)
The underlying investments classified under U.S. Equity Securities consist of Money Market Funds and U.S. Government Bonds (Level 1), Funds (Level 2), and Auction Rate Securities (Level 3), which are combined with futures, which settle daily, in a portable alpha program to achieve the returns of the U.S. Equity Securities Large-cap, Mid-cap Growth, and Small-cap funds. Our exposure with respect to these investments includes both the futures and the underlying investments. 

Activity in Level 3 [Table Text Block]
 Recurring Fair Value Measures
Equity Securities
 
 
Activity in Level 3
(Auction Rate Securities)
Private Equity Funds
Real Estate
Millions
 
 
 
Balance as of December 31, 2010

$6.7


$50.7


$20.1

Actual Return on Plan Assets

30.9

3.5

Purchases, sales, and settlements, net
(6.7
)
(12.6
)
(1.9
)
Balance as of December 31, 2011


$69.0


$21.7

Recurring Fair Value Measures
Equity Securities
 
 
Activity in Level 3
(Auction Rate Securities)
Private Equity Funds
Real Estate
Millions
 
 
 
Balance as of December 31, 2009

$9.1


$44.7


$17.3

Actual Return on Plan Assets

(4.1
)
(6.1
)
Purchases, sales, and settlements, net
(2.4
)
10.1

8.9

Balance as of December 31, 2010

$6.7


$50.7


$20.1

Postretirement Health and Life [Member]
   
Defined Benefit Plan Disclosure [Line Items]    
Obligation and Funded Status [Table Text Block]
Postretirement Health and Life Obligation and Funded Status
Year Ended December 31
2011
2010
Millions
 
 
Change in Benefit Obligation
 
 
Obligation, Beginning of Year

$204.1


$192.1

Service Cost
3.8

4.8

Interest Cost
10.8

10.9

Actuarial Loss (Gain)
(2.9
)
17.6

Participant Contributions
2.5

2.1

Plan Amendments

(14.2
)
Benefits Paid
(7.7
)
(9.2
)
Obligation, End of Year

$210.6


$204.1

Change in Plan Assets
 
 
Fair Value, Beginning of Year

$114.7


$96.4

Actual Return on Plan Assets

12.0

Employer Contribution
11.4

13.4

Participant Contributions
2.5

2.0

Benefits Paid
(7.6
)
(9.1
)
Fair Value, End of Year

$121.0


$114.7

Funded Status, End of Year
$(89.6)
$(89.4)
 
 
 
Net Postretirement Health and Life Amounts Recognized in Consolidated Balance Sheet Consist of:
 
 
Current Liabilities
$(0.9)
$(0.8)
Non-Current Liabilities
$(88.7)
$(88.6)
 
Unrecognized Pension and Other Postretirement Costs [Table Text Block]
The postretirement health and life costs that are reported as a component within our consolidated balance sheet, reflected in regulatory long-term assets and accumulated other comprehensive income, consist of the following:

Unrecognized Postretirement Health and Life Costs
Year Ended December 31
2011
2010
Millions
 
 
Net Loss

$78.5


$80.1

Prior Service Cost
(9.5
)
(11.2
)
Transition Obligation
0.1

0.2

Total Unrecognized Postretirement Health and Life Costs

$69.1


$69.1

 
Components of Net Periodic Expense [Table Text Block]
Components of Net Periodic Postretirement Health and Life Expense
Year Ended December 31
2011
2010
2009
Millions
 
 
 
Service Cost

$3.8


$4.8


$4.1

Interest Cost
10.8

10.9

10.0

Expected Return on Plan Assets
(9.7
)
(9.5
)
(8.3
)
Amortization of Prior Service Cost
(1.7
)
(0.1
)

Amortization of Loss
8.5

4.8

2.5

Amortization of Transition Obligation
0.1

2.5

2.5

Net Postretirement Health and Life Expense

$11.8


$13.4


$10.8

 
Other Changes in Plan Assets and Benefit Obligations Recognized in Other Comprehensive Income and Regulatory Assets [Table Text Block]
Other Changes in Postretirement Benefit Plan Assets and Benefit Obligations
Recognized in Other Comprehensive Income and Regulatory Assets
Year Ended December 31
2011
2010
Millions
 
 
Net Loss

$6.9


$15.3

Prior Service Cost (Credit) Arising During the Period

(14.2
)
Amortization of Prior Service Cost
1.7

0.1

Amortization of Transition Obligation
(0.1
)
(2.5
)
Amortization of Loss
(8.5
)
(4.8
)
Total Recognized in Other Comprehensive Income and Regulatory Assets

$(6.1)
 
Recurring Fair Value Measures [Table Text Block]
 
At Fair Value as of December 31, 2011
Recurring Fair Value Measures
Level 1
Level 2
Level 3
Total
Millions
 
 
 
 
Assets:
 
 
 
 
Equity Securities:
 
 
 
 
U.S. Large-cap

$15.9




$15.9

U.S. Mid-cap Growth
11.5



11.5

U.S. Small-cap
11.2



11.2

International
25.1



25.1

Debt Securities:
 

 

 

 

Mutual Funds
24.1



24.1

Fixed Income
0.3


$18.9


19.2

Other Types of Investments:
 

 

 

 

Private Equity Funds



$14.0

14.0

Total Fair Value of Assets

$88.1


$18.9


$14.0


$121.0

 
At Fair Value as of December 31, 2010
Recurring Fair Value Measures
Level 1
Level 2
Level 3
Total
Millions
 
 
 
 
Assets:
 
 
 
 
Equity Securities:
 
 
 
 
U.S. Large-cap

$15.7




$15.7

U.S. Mid-cap Growth
11.4



11.4

U.S. Small-cap
11.5



11.5

International
26.8



26.8

Debt Securities:
 

 

 

 

Mutual Funds
9.0



9.0

Fixed Income


$27.9


27.9

Other Types of Investments:
 

 

 

 

Private Equity Funds



$12.4

12.4

Total Fair Value of Assets

$74.4


$27.9


$12.4


$114.7

Activity in Level 3 [Table Text Block]
Recurring Fair Value Measures
 
Activity in Level 3
Private Equity Funds
Millions
 
Balance as of December 31, 2010

$12.4

Actual Return on Plan Assets
1.1

Purchases, sales, and settlements, net
0.5

Balance as of December 31, 2011

$14.0

Recurring Fair Value Measures
 
Activity in Level 3
Private Equity Funds
Millions
 
Balance as of December 31, 2009

$9.4

Actual Return on Plan Assets
1.4

Purchases, sales, and settlements, net
1.6

Balance as of December 31, 2010

$12.4