Windstream 2013 Annual Report Download - page 201

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
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F-65
8. Employee Benefit Plans and Postretirement Benefits, Continued:
A summary of plan assets, projected benefit obligation and funded status of the plans (including executive retirement
agreements) were as follows at December 31:
Pension Benefits Postretirement Benefits
(Millions) 2013 2012 2013 2012
Fair value of plan assets at beginning of year $ 999.0 $ 948.9 $ 0.2 $ 0.2
Actual return on plan assets 10.8 120.7 0.1 —
Employer contributions 28.5 0.7 1.9 3.7
Participant contributions — — 1.5 1.8
Benefits paid (a) (78.6)(71.3)(3.4)(5.5)
Fair value of plan assets at end of year $ 959.7 $ 999.0 $ 0.3 $ 0.2
Projected benefit obligation at beginning of year $ 1,400.1 $ 1,282.9 $ 42.4 $ 45.9
Interest cost on projected benefit obligations 52.5 58.0 1.4 1.8
Service costs 10.5 10.0 — 0.1
Participant contributions — — 1.5 1.8
Plan amendments (b) (c) — — (0.8)(1.4)
Actuarial (gain) loss (173.9) 120.5 (9.7)(0.3)
Benefits paid (a) (78.6)(71.3)(3.4)(5.5)
Projected benefit obligation at end of year $ 1,210.6 $ 1,400.1 $ 31.4 $ 42.4
Plan assets less than projected benefit obligation recognized
in the consolidated balance sheet:
Current liabilities $(83.8) $ (20.7) $ (2.6) $ (3.1)
Noncurrent liabilities (167.1)(380.4)(28.5)(39.1)
Funded status recognized in the consolidated balance sheets $(250.9) $ (401.1) $ (31.1) $ (42.2)
Amounts recognized in accumulated other comprehensive
income:
Net actuarial loss $ — $ — $ (2.6) $ (14.1)
Prior service credits 0.6 0.7 44.9 84.9
Net amount recognized in accumulated other comprehensive
income $ 0.6 $ 0.7 $ 42.3 $ 70.8
(a) During 2013 and 2012, pension benefits paid from Windstream's assets totaled $0.8 million and $0.7 million,
respectively. All postretirement benefits in both years were paid from Windstream's assets.
(b) During 2013, we made changes to our postretirement medical plan, eliminating medical and prescription drug
subsidies for certain active and retired participants effective January 1, 2014, August 1, 2013 or October 1, 2013. In
remeasuring the postretirement obligations to reflect these changes, updated assumptions as of March 28, 2013, June
1, 2013 and September 30, 2013 were used. Key assumptions updated included the discount rate, which was 3.75
percent, 4.01 percent and 4.46 percent for the three remeasurement dates, respectively. The discount rates were
selected based on a hypothetical yield curve incorporating high-quality corporate bonds with various maturities
adjusted to reflect the timing of our expected benefit payments.
(c) During 2012, we also made changes to our postretirement medical plan, eliminating medical and prescription drug
subsidies for certain active and retired participants effective January 1, 2014. In remeasuring the postretirement
obligations to reflect this amendment, updated assumptions as of June 29, 2012 were used. During the remeasurement,
we updated key assumptions, including the discount rate, which decreased from 3.97 percent to 3.80 percent. The
discount rate was selected based on a hypothetical yield curve incorporating high-quality corporate bonds with various
maturities adjusted to reflect the timing of our expected benefit payments.