AT&T Wireless 2015 Annual Report Download - page 77

AT&T INC. | 75
The estimated prior service credit for our supplemental
retirement plan benefits that will be amortized from
accumulated OCI into net periodic benefit cost over
the next fiscal year is $1.
Deferred compensation expense was $122 in 2015, $121 in
2014 and $122 in 2013. Our deferred compensation liability,
included in “Other noncurrent liabilities,” was $1,221 at
December 31, 2015, and $1,156 at December 31, 2014.
Contributory Savings Plans
We maintain contributory savings plans that cover
substantially all employees. Under the savings plans, we
match in cash or company stock a stated percentage of
eligible employee contributions, subject to a specified ceiling.
There are no debt-financed shares held by the Employee
Stock Ownership Plans, allocated or unallocated.
Our match of employee contributions to the savings plans
is fulfilled with purchases of our stock on the open market
or company cash. Benefit cost is based on the cost of
shares or units allocated to participating employees’
accounts and was $653, $654 and $654 for the years
ended December 31, 2015, 2014 and 2013.
NOTE 13. SHARE-BASED PAYMENTS
Under our various plans, senior and other management
employees and nonemployee directors have received
nonvested stock and stock units. In conjunction with the
acquisition of DIRECTV, restricted stock units issued under
DIRECTV plans were converted to AT&T shares. The shares
will vest over a period of one to four years in accordance
with the terms of those plans. We do not intend to issue
any additional grants under the DIRECTV plans. Any future
grants will be made under the AT&T plans.
We grant performance stock units, which are nonvested
stock units, based upon our stock price at the date of
grant and award them in the form of AT&T common stock
and cash at the end of a three-year period, subject to
the achievement of certain performance goals. We treat
the cash portion of these awards as a liability. We grant
forfeitable restricted stock and stock units, which are valued
at the market price of our common stock at the date of
grant and vest typically over a two- to ten-year period.
We also grant other nonvested stock units and award them
in cash at the end of a three-year period, subject to the
achievement of certain market based conditions. As of
December 31, 2015, we were authorized to issue up to
approximately 109 million shares of common stock (in
addition to shares that may be issued upon exercise of
outstanding options or upon vesting of performance stock
units or other nonvested stock units) to officers, employees
and directors pursuant to these various plans.
Supplemental Retirement Plans
We also provide certain senior- and middle-management
employees with nonqualified, unfunded supplemental
retirement and savings plans. While these plans are
unfunded, we have assets in a designated nonbankruptcy
remote trust that are independently managed and used to
provide for these benefits. These plans include supplemental
pension benefits as well as compensation-deferral plans,
some of which include a corresponding match by us based
on a percentage of the compensation deferral.
We use the same significant assumptions for the composite
rate of compensation increase in determining our
projected benefit obligation and the net pension and
postemployment benefit cost. Our discount rates of 4.4%
at December 31, 2015 and 4.1% at December 31, 2014
were calculated using the same methodologies used in
calculating the discount rate for our qualified pension and
postretirement benefit plans. The following tables provide
the plans’ benefit obligations and fair value of assets at
December 31 and the components of the supplemental
retirement pension benefit cost. The net amounts are
recorded as “Other noncurrent liabilities” on our
consolidated balance sheets.
The following table provides information for our
supplemental retirement plans with accumulated benefit
obligations in excess of plan assets at December 31:
2015 2014
Projected benefit obligation $(2,444) $(2,458)
Accumulated benefit obligation (2,372) (2,410)
Fair value of plan assets — —
The following tables present the components of net periodic
benefit cost and other changes in plan assets and benefit
obligations recognized in OCI:
Net Periodic Benefit Cost 2015 2014 2013
Service cost – benefits earned
during the period $ 9 $ 7 $ 9
Interest cost on projected
benefit obligation 77 109 101
Amortization of prior
service cost (credit) 1 (1) —
Actuarial (gain) loss (36) 243 (106)
Net supplemental retirement
pension cost $ 51 $358 $ 4
Other Changes Recognized in
Other Comprehensive Income 2015 2014 2013
Prior service (cost) credit $(1) $(11) $(1)
Amortization of prior
service cost (credit) 1 (1) —
Total recognized in other
comprehensive (income)
loss (net of tax) $— $(12) $(1)