Sprint - Nextel 2005 Annual Report Download - page 150

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SPRINT NEXTEL CORPORATION
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
Amounts recognized on the accompanying consolidated balance sheets consist of:
As of December 31,
2005 2004
(in millions)
Pension benefit obligations ................................................. $ (435) $ (451)
Intangible asset .......................................................... 80 92
Accumulated other comprehensive loss ....................................... 1,308 1,212
Net amount recognized .................................................... $ 953 $ 853
In accordance with SFAS No. 87, Employers’ Accounting for Pensions, as of December 31, 2005 and 2004 we
recorded an additional minimum pension liability representing the excess of the unfunded accumulated benefit
obligation over plan assets and accrued pension costs. Recognition of the additional pension liability also resulted
in an intangible asset equal to the unrecognized prior service costs and a charge to equity through other
comprehensive income (loss).
The following table sets forth these amounts:
Year Ended December 31,
2005 2004 2003
(in millions)
Additional minimum liability ....................................... $ 1,388 $ 1,304 $ 1,289
Intangible asset .................................................. 80 92 95
Accumulated other comprehensive loss ............................... $ 1,308 $ 1,212 $ 1,194
The tax effect for the charge to accumulated other comprehensive income (loss) was $38 million for 2005,
$10 million for 2004, and $12 million for 2003.
This resulted in a net charge to accumulated other comprehensive income (loss) of $58 million for 2005, $8
million for 2004, and $25 million for 2003.
We also maintain a nonqualified defined benefit plan to provide supplemental retirement benefits for certain
executives in addition to the benefits provided under the qualified pension plan.
For 2005, an additional minimum pension liability of $2 million was recognized for the nonqualified defined
benefit plan with a charge to accumulated other comprehensive income (loss) of $1 million, net of taxes.
For 2004, an additional minimum pension liability of $20 million was recognized for the nonqualified defined
benefit plan with a charge to accumulated other comprehensive income (loss) of $13 million, net of taxes.
The net pension expense consisted of the following:
Year Ended December 31,
2005 2004 2003
(in millions)
Service cost - benefits earned during the year ............................. $ 134 $ 133 $ 119
Interest on projected benefit obligation .................................. 264 250 234
Expected return on plan assets ......................................... (328) (303) (290)
Amortization of unrecognized transition asset ............................. — (2) (3)
Recognition of prior service cost ....................................... 16 16 15
Recognition of actuarial losses ......................................... 110 89 33
Curtailment loss – partial freeze of benefit accruals ........................ 4 — —
Net pension expense ................................................. $ 200 $ 183 $ 108
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