Retirement Plan And Other Post-Retirement Benefits

12 Months Ended

Sep. 30, 2019

Retirement Benefits [Abstract]

Retirement Plan And Other Post-Retirement Benefits

Retirement Plan and Other Post-Retirement Benefits

The Company has a tax-qualified, noncontributory, defined-benefit retirement plan (Retirement Plan). The Retirement Plan covers certain non-collectively bargained employees hired before July 1, 2003 and certain collectively bargained employees hired before November 1, 2003. Certain non-collectively bargained employees hired after June 30, 2003 and certain collectively bargained employees hired after October 31, 2003 are eligible for a Retirement Savings Account benefit provided under the Company’s defined contribution Tax-Deferred Savings Plans. Costs associated with the Retirement Savings Account were $3.9 million, $3.5 million and $2.9 million for the years ended September 30, 2019, 2018 and 2017, respectively. Costs associated with the Company’s contributions to the Tax-Deferred Savings Plans, exclusive of the costs associated with the Retirement Savings Account, were $6.4 million, $6.2 million, and $5.9 million for the years ended September 30, 2019, 2018 and 2017, respectively.

The Company provides health care and life insurance benefits (other post-retirement benefits) for a majority of its retired employees. The other post-retirement benefits cover certain non-collectively bargained employees hired before January 1, 2003 and certain collectively bargained employees hired before October 31, 2003.

The Company’s policy is to fund the Retirement Plan with at least an amount necessary to satisfy the minimum funding requirements of applicable laws and regulations and not more than the maximum amount deductible for federal income tax purposes. The Company has established VEBA trusts for its other post-retirement benefits. Contributions to the VEBA trusts are tax deductible, subject to limitations contained in the Internal Revenue Code and regulations and are made to fund employees’ other post-retirement benefits, as well as benefits as they are paid to current retirees. In addition, the Company has established 401(h) accounts for its other post-retirement benefits. They are separate accounts within the Retirement Plan trust used to pay retiree medical benefits for the associated participants in the Retirement Plan. Although these accounts are in the Retirement Plan trust, for funding status purposes as shown below, the 401(h) accounts are included in Fair Value of Assets under Other Post-Retirement Benefits. Contributions are tax-deductible when made, subject to limitations contained in the Internal Revenue Code and regulations.

The expected return on Retirement Plan assets, a component of net periodic benefit cost shown in the tables below, is applied to the market-related value of plan assets. The market-related value of plan assets is the market value as of the measurement date adjusted for variances between actual returns and expected returns (from previous years) that have not been reflected in net periodic benefit costs. The expected return on other post-retirement benefit assets (i.e. the VEBA trusts and 401(h) accounts), which is a component of net periodic benefit cost shown in the tables below, is applied to the fair value of assets as of the measurement date.

Reconciliations of the Benefit Obligations, Plan Assets and Funded Status, as well as the components of Net Periodic Benefit Cost and the Weighted Average Assumptions of the Retirement Plan and other post-retirement benefits are shown in the tables below. The date used to measure the Benefit Obligations, Plan Assets and Funded Status is September 30 for fiscal years 2019, 2018 and 2017.

	Retirement Plan									Other Post-Retirement Benefits
	Year Ended September 30									Year Ended September 30
	2019			2018			2017			2019			2018			2017
	(Thousands)
Change in Benefit Obligation
Benefit Obligation at Beginning of Period	$	985,690		$	1,054,826		$	1,097,421		$	435,986		$	462,619		$	526,138
Service Cost	8,482			9,921			11,969			1,519			1,830			2,449
Interest Cost	38,378			33,006			38,383			17,145			14,801			19,007
Plan Participants’ Contributions	—			—			—			2,930			2,894			2,717
Retiree Drug Subsidy Receipts	—			—			—			1,855			1,545			1,553
Actuarial (Gain) Loss	127,748			(50,218		)	(32,466		)	34,401			(21,039		)	(62,215		)
Benefits Paid	(62,673		)	(61,845		)	(60,481		)	(25,673		)	(26,664		)	(27,030		)
Benefit Obligation at End of Period	$	1,097,625		$	985,690		$	1,054,826		$	468,163		$	435,986		$	462,619
Change in Plan Assets
Fair Value of Assets at Beginning of Period	$	924,506		$	910,719		$	869,775		$	513,800		$	514,017		$	494,320
Actual Return on Plan Assets	77,401			42,652			84,279			30,006			20,657			40,157
Employer Contributions	29,215			32,980			17,146			3,064			2,896			3,853
Plan Participants’ Contributions	—			—			—			2,930			2,894			2,717
Benefits Paid	(62,673		)	(61,845		)	(60,481		)	(25,673		)	(26,664		)	(27,030		)
Fair Value of Assets at End of Period	$	968,449		$	924,506		$	910,719		$	524,127		$	513,800		$	514,017
Net Amount Recognized at End of Period (Funded Status)	$	(129,176	)	$	(61,184	)	$	(144,107	)	$	55,964		$	77,814		$	51,398
Amounts Recognized in the Balance Sheets Consist of:
Non-Current Liabilities	$	(129,176	)	$	(61,184	)	$	(144,107	)	$	(4,553	)	$	(4,919	)	$	(4,972	)
Non-Current Assets	—			—			—			60,517			82,733			56,370
Net Amount Recognized at End of Period	$	(129,176	)	$	(61,184	)	$	(144,107	)	$	55,964		$	77,814		$	51,398
Accumulated Benefit Obligation	$	1,053,914		$	946,763		$	1,010,179		N/A			N/A			N/A
Weighted Average Assumptions Used to Determine Benefit Obligation at September 30
Discount Rate	3.15		%	4.30		%	3.77		%	3.17		%	4.31		%	3.81		%
Rate of Compensation Increase	4.70		%	4.70		%	4.70		%	4.70		%	4.70		%	4.70		%

	Retirement Plan									Other Post-Retirement Benefits
	Year Ended September 30									Year Ended September 30
	2019			2018			2017			2019			2018			2017
	(Thousands)
Components of Net Periodic Benefit Cost
Service Cost	$	8,482		$	9,921		$	11,969		$	1,519		$	1,830		$	2,449
Interest Cost	38,378			33,006			38,383			17,145			14,801			19,007
Expected Return on Plan Assets	(62,368		)	(61,715		)	(59,718		)	(30,157		)	(31,482		)	(31,458		)
Amortization of Prior Service Cost (Credit)	826			938			1,058			(429		)	(429		)	(429		)
Recognition of Actuarial Loss(1)	32,096			37,205			42,687			5,962			10,558			18,415
Net Amortization and Deferral for Regulatory Purposes	2,493			9,027			469			16,481			15,028			6,108
Net Periodic Benefit Cost	$	19,907		$	28,382		$	34,848		$	10,521		$	10,306		$	14,092
Weighted Average Assumptions Used to Determine Net Periodic Benefit Cost at September 30
Effective Discount Rate for Benefit Obligations	4.30		%	3.77		%	3.60		%	4.31		%	3.81		%	3.70		%
Effective Rate for Interest on Benefit Obligations	4.03		%	3.23		%	3.60		%	4.05		%	3.29		%	3.70		%
Effective Discount Rate for Service Cost	4.40		%	4.00		%	3.60		%	4.43		%	4.10		%	3.70		%
Effective Rate for Interest on Service Cost	4.29		%	3.73		%	3.60		%	4.39		%	3.98		%	3.70		%
Expected Return on Plan Assets	6.75		%	7.00		%	7.00		%	6.00		%	6.25		%	6.50		%
Rate of Compensation Increase	4.70		%	4.70		%	4.70		%	4.70		%	4.70		%	4.70		%

(1) Distribution Corporation’s New York jurisdiction calculates the amortization of the actuarial loss on a vintage year basis over 10 years, as mandated by the NYPSC. All the other subsidiaries of the Company utilize the corridor approach.

The Net Periodic Benefit Cost in the table above includes the effects of regulation. The Company recovers pension and other post-retirement benefit costs in its Utility and Pipeline and Storage segments in accordance with the applicable regulatory commission authorizations. Certain of those commission authorizations established tracking mechanisms which allow the Company to record the difference between the amount of pension and other post-retirement benefit costs recoverable in rates and the amounts of such costs as determined under the existing authoritative guidance as either a regulatory asset or liability, as appropriate. Any activity under the tracking mechanisms (including the amortization of pension and other post-retirement regulatory assets and liabilities) is reflected in the Net Amortization and Deferral for Regulatory Purposes line item above.

In addition to the Retirement Plan discussed above, the Company also has Non-Qualified benefit plans that cover a group of management employees designated by the Chief Executive Officer of the Company. These plans provide for defined benefit payments upon retirement of the management employee, or to the spouse upon death of the management employee. The net periodic benefit costs associated with these plans were $7.6 million, $6.8 million and $7.6 million in 2019, 2018 and 2017, respectively. The accumulated benefit obligations for the plans were $79.8 million, $70.6 million and $72.5 million at September 30, 2019, 2018 and 2017, respectively. The

projected benefit obligations for the plans were $99.5 million, $86.1 million and $88.9 million at September 30, 2019, 2018 and 2017, respectively. At September 30, 2019, $13.2 million of the projected benefit obligation is recorded in Other Accruals and Current Liabilities and the remaining $86.3 million is recorded in Other Deferred Credits on the Consolidated Balance Sheets. At September 30, 2018, $11.5 million of the projected benefit obligation was recorded in Other Accruals and Current Liabilities and the remaining $74.6 million was recorded in Other Deferred Credits on the Consolidated Balance Sheets. At September 30, 2017, $14.1 million of the projected benefit obligation was recorded in Other Accruals and Current Liabilities and the remaining $74.8 million was recorded in Other Deferred Credits on the Consolidated Balance Sheets. The weighted average discount rates for these plans were 2.77%, 4.02% and 3.22% as of September 30, 2019, 2018 and 2017, respectively and the weighted average rates of compensation increase for these plans were 8.00%, 7.75% and 7.75% as of September 30, 2019, 2018 and 2017, respectively.

The cumulative amounts recognized in accumulated other comprehensive income (loss), regulatory assets, and regulatory liabilities through fiscal 2019, the changes in such amounts during 2019, as well as the amounts expected to be recognized in net periodic benefit cost in fiscal 2020 are presented in the table below:

	Retirement Plan			Other Post-Retirement Benefits			Non-Qualified Benefit Plans
	(Thousands)
Amounts Recognized in Accumulated Other Comprehensive Income (Loss), Regulatory Assets and Regulatory Liabilities(1)
Net Actuarial Loss	$	(216,146	)	$	(27,398	)	$	(33,477	)
Prior Service (Cost) Credit	(4,370		)	2,829			—
Net Amount Recognized	$	(220,516	)	$	(24,569	)	$	(33,477	)
Changes to Accumulated Other Comprehensive Income (Loss), Regulatory Assets and Regulatory Liabilities Recognized During Fiscal 2019(1)
Increase in Actuarial Loss, excluding amortization(2)	$	(112,715	)	$	(34,553	)	$	(14,217	)
Change due to Amortization of Actuarial Loss	32,096			5,962			3,558
Prior Service (Cost) Credit	826			(429		)	—
Net Change	$	(79,793	)	$	(29,020	)	$	(10,659	)
Amounts Expected to be Recognized in Net Periodic Benefit Cost in the Next Fiscal Year(1)
Net Actuarial Loss	$	(39,384	)	$	(535	)	$	(5,341	)
Prior Service (Cost) Credit	(729		)	429			—
Net Amount Expected to be Recognized	$	(40,113	)	$	(106	)	$	(5,341	)

(1) Amounts presented are shown before recognizing deferred taxes.

(2) Amounts presented include the impact of actuarial gains/losses related to return on assets, as well as the Actuarial (Gain) Loss amounts presented in the Change in Benefit Obligation.

In order to adjust the funded status of its pension (tax-qualified and non-qualified) and other post-retirement benefit plans at September 30, 2019, the Company recorded an $82.7 million increase to Other Regulatory Assets in the Company’s Utility and Pipeline and Storage segments and a $36.8 million (pre-tax) decrease to Accumulated Other Comprehensive Income.

The effect of the discount rate change for the Retirement Plan in 2019 was to increase the projected benefit obligation of the Retirement Plan by $128.4 million. The mortality improvement projection scale was updated,

which decreased the projected benefit obligation of the Retirement Plan in 2019 by $5.3 million. Other actuarial experience increased the projected benefit obligation for the Retirement Plan in 2019 by $4.7 million. The effect of the discount rate change for the Retirement Plan in 2018 was to decrease the projected benefit obligation of the Retirement Plan by $58.1 million. The effect of the discount rate change for the Retirement Plan in 2017 was to decrease the projected benefit obligation of the Retirement Plan by $20.5 million.

The Company made cash contributions totaling $29.2 million to the Retirement Plan during the year ended September 30, 2019. The Company expects that the annual contribution to the Retirement Plan in 2020 will be in the range of $25.0 million to $30.0 million.

The following Retirement Plan benefit payments, which reflect expected future service, are expected to be paid by the Retirement Plan during the next five years and the five years thereafter: $66.3 million in 2020; $66.8 million in 2021; $67.1 million in 2022; $67.1 million in 2023; $67.1 million in 2024; and $328.7 million in the five years thereafter.

The effect of the discount rate change in 2019 was to increase the other post-retirement benefit obligation by $57.2 million. The mortality improvement projection scale was updated, which decreased the other post-retirement benefit obligation in 2019 by $3.9 million. Other actuarial experience decreased the other post-retirement benefit obligation in 2019 by $18.9 million, the majority of which was attributable to a revision in assumed per-capita claims cost, premiums, retiree contributions and retiree drug subsidy assumptions based on actual experience.

The effect of the discount rate change in 2018 was to decrease the other post-retirement benefit obligation by $25.8 million. The mortality improvement projection scale was updated, which decreased the other post-retirement benefit obligation in 2018 by $2.4 million. Other actuarial experience increased the other post-retirement benefit obligation in 2018 by $7.3 million, the majority of which was attributable to a revision in assumed per-capita claims cost, premiums, retiree contributions and retiree drug subsidy assumptions based on actual experience.

The effect of the discount rate change in 2017 was to decrease the other post-retirement benefit obligation by $6.2 million. The mortality improvement projection scale was updated, which decreased the other post-retirement benefit obligation in 2017 by $5.7 million. Other actuarial experience decreased the other post-retirement benefit obligation in 2017 by $50.3 million primarily attributable to a revision in assumed per-capita claims cost, premiums, retiree contributions and drug subsidy assumptions based on actual experience.

The Medicare Prescription Drug, Improvement, and Modernization Act of 2003 provides for a prescription drug benefit under Medicare (Medicare Part D), as well as a federal subsidy to sponsors of retiree health care benefit plans that provide a benefit that is at least actuarially equivalent to Medicare Part D.

The estimated gross other post-retirement benefit payments and gross amount of Medicare Part D prescription drug subsidy receipts are as follows (dollars in thousands):

	Benefit Payments		Subsidy Receipts
2020	$	27,998	$	(1,901	)
2021	$	28,711	$	(2,025	)
2022	$	29,142	$	(2,147	)
2023	$	29,478	$	(2,264	)
2024	$	29,631	$	(2,372	)
2025 through 2029	$	147,138	$	(12,960	)

Assumed health care cost trend rates as of September 30 were:

	2019			2018			2017
Rate of Medical Cost Increase for Pre Age 65 Participants	5.50	%	(1)	5.59	%	(1)	5.67	%	(1)
Rate of Medical Cost Increase for Post Age 65 Participants	4.75	%	(1)	4.75	%	(1)	4.75	%	(1)
Annual Rate of Increase in the Per Capita Cost of Covered Prescription Drug Benefits	7.35	%	(1)	7.89	%	(1)	8.45	%	(1)
Annual Rate of Increase in the Per Capita Medicare Part B Reimbursement	4.75	%	(1)	4.75	%	(1)	4.75	%	(1)
Annual Rate of Increase in the Per Capita Medicare Part D Subsidy	6.84	%	(1)	7.18	%	(1)	7.33	%	(1)

(1) It was assumed that this rate would gradually decline to 4.5% by 2039.

The health care cost trend rate assumptions used to calculate the per capita cost of covered medical care benefits have a significant effect on the amounts reported. If the health care cost trend rates were increased by 1% in each year, the other post-retirement benefit obligation as of October 1, 2019 would increase by $60.8 million. This 1% change would also have increased the aggregate of the service and interest cost components of net periodic post-retirement benefit cost for 2019 by $2.7 million. If the health care cost trend rates were decreased by 1% in each year, the other post-retirement benefit obligation as of October 1, 2019 would decrease by $49.1 million. This 1% change would also have decreased the aggregate of the service and interest cost components of net periodic post-retirement benefit cost for 2019 by $2.1 million.

The Company made cash contributions totaling $2.8 million to its VEBA trusts during the year ended September 30, 2019. In addition, the Company made direct payments of $0.3 million to retirees not covered by the VEBA trusts and 401(h) accounts during the year ended September 30, 2019. The Company expects that the annual contribution to its VEBA trusts in 2020 will be in the range of $2.5 million to $3.0 million.

Investment Valuation

The Retirement Plan assets and other post-retirement benefit assets are valued under the current fair value framework. See Note G — Fair Value Measurements for further discussion regarding the definition and levels of fair value hierarchy established by the authoritative guidance.

The inputs or methodologies used for valuing securities are not necessarily an indication of the risk associated with investing in those securities. Below is a listing of the major categories of plan assets held as of September 30, 2019 and 2018, as well as the associated level within the fair value hierarchy in which the fair value measurements in their entirety fall, based on the lowest level input that is significant to the fair value measurement in its entirety (dollars in thousands):

	At September 30, 2019
	Total Fair Value			Level 1			Level 2			Level 3			Measured at NAV(7)
Retirement Plan Investments
Domestic Equities(1)	$	175,812		$	114,324		$	—		$	—		$	61,488
International Equities(2)	81,631			—			—			—			81,631
Global Equities(3)	70,095			—			—			—			70,095
Domestic Fixed Income(4)	493,839			1,784			439,255			—			52,800
International Fixed Income(5)	17,744			—			17,744			—			—
Global Fixed Income(6)	75,329			—			—			—			75,329
Real Estate	107,764			—			—			3,154			104,610
Cash Held in Collective Trust Funds	18,310			—			—			—			18,310
Total Retirement Plan Investments	1,040,524			116,108			456,999			3,154			464,263
401(h) Investments	(73,688		)	(8,205		)	(32,295		)	(223		)	(32,965		)
Total Retirement Plan Investments (excluding 401(h) Investments)	$	966,836		$	107,903		$	424,704		$	2,931		$	431,298
Miscellaneous Accruals, Interest Receivables, and Non-Interest Cash	1,613
Total Retirement Plan Assets	$	968,449

	At September 30, 2018
	Total Fair Value			Level 1			Level 2			Level 3			Measured at NAV(7)
Retirement Plan Investments
Domestic Equities(1)	$	223,300		$	139,885		$	—		$	—		$	83,415
International Equities(2)	100,832			—			—			—			100,832
Global Equities(3)	85,942			—			—			—			85,942
Domestic Fixed Income(4)	434,392			1,640			382,348			—			50,404
International Fixed Income(5)	416			416			—			—			—
Global Fixed Income(6)	72,382			—			—			—			72,382
Real Estate	53,878			—			—			3,194			50,684
Cash Held in Collective Trust Funds	26,191			—			—			—			26,191
Total Retirement Plan Investments	997,333			141,941			382,348			3,194			469,850
401(h) Investments	(67,817		)	(9,695		)	(26,114		)	(218		)	(31,790		)
Total Retirement Plan Investments (excluding 401(h) Investments)	$	929,516		$	132,246		$	356,234		$	2,976		$	438,060
Miscellaneous Accruals, Interest Receivables, and Non-Interest Cash	(5,010		)
Total Retirement Plan Assets	$	924,506

(1) Domestic Equities include mostly collective trust funds, common stock, and exchange traded funds.

(2) International Equities are comprised of collective trust funds.

(3) Global Equities are comprised of collective trust funds.

(4) Domestic Fixed Income securities include mostly collective trust funds, corporate/government bonds and mortgages, and exchange traded funds.

(5) International Fixed Income securities are comprised mostly of corporate/government bonds.

(6) Global Fixed Income securities are comprised of a collective trust fund.

(7) Reflects the authoritative guidance related to investments measured at net asset value (NAV).

	At September 30, 2019
	Total Fair Value			Level 1		Level 2		Level 3		Measured at NAV(1)
Other Post-Retirement Benefit Assets held in VEBA Trusts
Collective Trust Funds — Global Equities	$	167,966		$	—	$	—	$	—	$	167,966
Exchange Traded Funds — Fixed Income	275,296			275,296		—		—		—
Cash Held in Collective Trust Funds	8,229			—		—		—		8,229
Total VEBA Trust Investments	451,491			275,296		—		—		176,195
401(h) Investments	73,688			8,205		32,295		223		32,965
Total Investments (including 401(h) Investments)	$	525,179		$	283,501	$	32,295	$	223	$	209,160
Miscellaneous Accruals (Including Current and Deferred Taxes, Claims Incurred But Not Reported, Administrative)	(1,052		)
Total Other Post-Retirement Benefit Assets	$	524,127

	At September 30, 2018
	Total Fair Value			Level 1		Level 2		Level 3		Measured at NAV(1)
Other Post-Retirement Benefit Assets held in VEBA Trusts
Collective Trust Funds — Domestic Equities	$	125,295		$	—	$	—	$	—	$	125,295
Collective Trust Funds — International Equities	47,245			—		—		—		47,245
Exchange Traded Funds — Fixed Income	265,667			265,667		—		—		—
Cash Held in Collective Trust Funds	7,894			—		—		—		7,894
Total VEBA Trust Investments	446,101			265,667		—		—		180,434
401(h) Investments	67,817			9,695		26,114		218		31,790
Total Investments (including 401(h) Investments)	$	513,918		$	275,362	$	26,114	$	218	$	212,224
Miscellaneous Accruals (Including Current and Deferred Taxes, Claims Incurred But Not Reported, Administrative)	(118		)
Total Other Post-Retirement Benefit Assets	$	513,800

(1) Reflects the authoritative guidance related to investments measured at net asset value (NAV).

The fair values disclosed in the above tables may not be indicative of net realizable value or reflective of future fair values. Furthermore, although the Company believes its valuation methods are appropriate and consistent with other market participants, the use of different methodologies or assumptions to determine the fair value of certain financial instruments could result in a different fair value measurement at the reporting date.

The following tables provide a reconciliation of the beginning and ending balances of the Retirement Plan and other post-retirement benefit assets measured at fair value on a recurring basis where the determination of fair value includes significant unobservable inputs (Level 3). For the years ended September 30, 2019 and

September 30, 2018, there were no transfers from Level 1 to Level 2. In addition, as shown in the following tables, there were no transfers in or out of Level 3.

	Retirement Plan Level 3 Assets (Thousands)
	Real Estate			Excluding 401(h) Investments			Total
Balance at September 30, 2017	$	3,391		$	(225	)	$	3,166
Unrealized Gains/(Losses)	188			(19		)	169
Sales	(385		)	26			(359		)
Balance at September 30, 2018	3,194			(218		)	2,976
Unrealized Gains/(Losses)	(37		)	(5		)	(42		)
Sales	(3		)	—			(3		)
Balance at September 30, 2019	$	3,154		$	(223	)	$	2,931

	Other Post-Retirement Benefit Level 3 Assets (Thousands)
	401(h) Investments
Balance at September 30, 2017	$	225
Unrealized Gains/(Losses)	19
Sales	(26		)
Balance at September 30, 2018	218
Unrealized Gains/(Losses)	5
Sales	—
Balance at September 30, 2019	$	223

The Company’s assumption regarding the expected long-term rate of return on plan assets is 6.40% (Retirement Plan) and 5.70% (other post-retirement benefits), effective for fiscal 2020. The return assumption reflects the anticipated long-term rate of return on the plan’s current and future assets. The Company utilizes projected capital market conditions and the plan’s target asset class and investment manager allocations to set the assumption regarding the expected return on plan assets.

The long-term investment objective of the Retirement Plan trust, the VEBA trusts and the 401(h) accounts is to achieve the target total return in accordance with the Company’s risk tolerance. Assets are diversified utilizing a mix of equities, fixed income and other securities (including real estate). The target allocation for the Retirement Plan and the VEBA trusts (including 401(h) accounts) is 30-50% equity securities, 50-70% fixed income securities (including return-seeking investments) and 0-15% other (including return-seeking investments). Risk tolerance is established through consideration of plan liabilities, plan funded status and corporate financial condition. The assets of the Retirement Plan trusts, VEBA trusts and the 401(h) accounts have no significant concentrations of risk in any one country (other than the United States), industry or entity.

Investment managers are retained to manage separate pools of assets. Comparative market and peer group performance of individual managers and the total fund are monitored on a regular basis, and reviewed by the Company’s Retirement Committee on at least a quarterly basis.

The Company determines the service and interest cost components of net periodic benefit cost using the spot rate approach, which uses individual spot rates along the yield curve that correspond to the timing of each benefit payment in order to determine the discount rate. The individual spot rates along the yield curve are determined by an above mean methodology in that the coupon interest rates that are in the lower 50th percentile are excluded based on the assumption that the Company would not utilize more expensive (i.e. lower yield) instruments to settle its liabilities.