Sprint - Nextel 2005 Annual Report Download - page 149

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SPRINT NEXTEL CORPORATION
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
At the time of the merger with Nextel, we did not extend plan participation to former Nextel employees.
Additionally, as of December 31, 2005, the pension plan was amended to freeze benefit accruals for plan
participants not designated to work for Embarq. This amendment was treated as a curtailment under SFAS
No. 88, Employers’ Accounting for Settlements and Curtailments of Defined Benefit Pension Plans and for
Termination Benefits. We recognized a $4 million curtailment loss. This amendment also resulted in a $233
million reduction in the projected benefit obligation, which is offset against existing unrecognized losses.
We use a December 31 measurement date for our pension plan.
The following table shows the changes in the projected benefit obligation:
Year Ended December 31,
2005 2004
(in millions)
Benefit obligation at beginning of year ........................................ $ 4,466 $ 4,038
Service cost ............................................................. 134 133
Interest cost ............................................................. 264 250
Amendments ............................................................ 8 12
Curtailment ............................................................. (233) —
Actuarial loss ............................................................ 252 223
Benefits paid ............................................................ (208) (190)
Benefit obligation at end of year ............................................. $ 4,683 $ 4,466
The plan’s accumulated benefit obligation was $4.6 billion as of December 31, 2005 and $4.1 billion as of
December 31, 2004.
The following table shows the changes in plan assets:
Year Ended December 31,
2005 2004
(in millions)
Beginning balance ........................................................ $ 3,678 $ 3,176
Employer contributions .................................................... 300 300
Investment return ......................................................... 363 392
Benefits paid ............................................................ (208) (190)
Ending balance .......................................................... $ 4,133 $ 3,678
The funded status and amounts recognized on the accompanying consolidated balance sheets for the plan were as
follows:
As of December 31,
2005 2004
(in millions)
Projected benefit obligation in excess of plan assets ............................. $ (550) $ (788)
Unrecognized net losses ................................................... 1,424 1,551
Unrecognized prior service cost ............................................. 80 92
Unamortized transition asset ................................................ (1) (2)
Net amount recognized .................................................... $ 953 $ 853
F-54