Cincinnati Bell 2007 Annual Report Download - page 159

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The pension plans’ assets consist of the following:
Target
Allocation
2008
Percentage of Plan
Assets at
December 31,
2007 2006
Plan assets:
Fixed income securities ................................... 20-38% 30.2% 30.0%
Equity securities * ....................................... 55-65% 59.0% 59.9%
Real estate ............................................. 8-12% 10.8% 10.1%
Total .................................................. 100.0% 100.0%
* At December 31, 2007, no pension plan assets were invested in Company common stock.
At December 31, 2006, pension plan assets included $6.4 million in Company common stock.
The postretirement and other plans’ assets consist of the following:
Health Care Group Life Insurance
Target
Allocation
2008
Percentage of Plan
Assets at
December 31, Target
Allocation
2008
Percentage of Plan
Assets at
December 31,
2007 2006 2007 2006
Plan assets:
Fixed income securities .................... 35-45% 39.9% 36.3% 35 - 45% 39.5% 41.0%
Equity securities .......................... 55-65% 60.1% 63.7% 55 - 65% 60.5% 59.0%
Total ................................... 100.0% 100.0% 100.0% 100.0%
Company contributions to its qualified pension plans were $24.1 million in 2007. No contributions were
required in 2006 or 2005. Company contributions to its non-qualified pension plan were $2.4 million, $2.5
million and $2.6 million for 2007, 2006 and 2005, respectively.
The Company expects to make cash payments of approximately $11 million related to its postretirement
health plans in 2008. Due to the early pension contribution of $20.0 million made in December 2007, the
Company does not expect to make any contributions to its qualified pension plan in 2008. Contributions to non-
qualified pension plans in 2008 are expected to be approximately $2 million.
The Pension Protection Act of 2006 (“the Act”) was enacted on August 17, 2006. Most of its provisions will
become effective in 2008. The Act significantly changes the funding requirements for single-employer defined
benefit pension plans. The funding requirements will now largely be based on a plan’s calculated funded status,
with faster amortization of any shortfalls or surpluses. The Act directs the U.S. Treasury Department to develop a
new yield curve to discount pension obligations for determining the funded status of a plan when calculating the
funding requirements. Based on current assumptions, the Company believes it will pay an estimated $45 million
to fund its qualified pension plans during the period 2009 to 2017.
Additional Minimum Liability
An additional minimum pension liability adjustment was required in 2006 as the accumulated benefit
obligation exceeded the fair value of pension plan assets for each of those plans as of the measurement date. The
additional minimum pension liability recorded (before the effect of income taxes) was $6.9 million. Upon the
adoption of SFAS No. 158, the Company is no longer required to record an additional minimum pension liability
as the unfunded status was recorded at December 31, 2006.
79
Form 10-K