Question-and-Answer Session
Operator
(Operator instructions) We will take our first question today from Paul Ridzon, KeyBanc Capital Markets.
Paul Ridzon – KeyBanc Capital Markets
Good afternoon.
Darrel Anderson
Hi, Paul.
Paul Ridzon – KeyBanc Capital Markets
Where are you on a trailing 12 ROE on a regulatory basis?
Darrel Anderson
Paul, I don’t have that right here in front of me. As you know, you can calculate, obviously, the nine months, we’re a little bit over 7% and if you annualize that number, which I probably wouldn’t annualize that number that puts you north of 9%. So it’s somewhere in the, I think, 7% to 9%, but I don’t have it right here in front of me.
Paul Ridzon – KeyBanc Capital Markets
And could you discuss the status of your pension and your outlook for 2009?
Darrel Anderson
Sure. Paul, one of the things, as everyone is probably fairly familiar with, is that the changes with respect to and pension plans and funding have been pretty erratic with respect to the market. And I want to first start out with our pension accounting summary is, first of all, we currently don’t expense our pension expenses as it sits today, because we’re not funding our plan. We have a regulatory order that allows us to, first of all, defer to those pension expenses.
Secondly, as we went, just prior to the financial crisis, we went in with where our ABO, Accumulated Benefit Obligation, we were actually in an over-funded position at that time. Obviously, since then, we’ve seen a decline in our market price of our pension assets. And if you get a chance to take a look at our 10-Q – we have disclosed in our 10-Q, based on various assumptions what additional funding might be required under the Pension Protection Act. And currently we estimate to reach 100% funding over seven years. That number would be approximately $40 million in 2010, $20 million in each of 2011, 2012, and 2013. And as you know, that would be based on a whole series of assumptions based on assets to where you are right now. So it is a range, and we continue to monitor that. We have a very good asset allocation model with respect to our pension assets. And so if and when we would be required to put cash in, it would be a time that we would then go to look for recovery of those pension contributions.
- To read the full transcript on Seeking Alpha, click here »
