Sprint - Nextel 2015 Annual Report Download - page 99

Table of Contents
Index to Consolidated Financial Statements
SPRINT CORPORATION
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
future material impairment of goodwill or other indefinite-lived intangible assets. See Note8.IntangibleAssetsfor additional information on indefinite-lived
intangible asset impairments.
Benefit Plans
We provide a defined benefit pension plan and other postretirement benefits to certain employees, and we sponsor a defined contribution plan for all
employees.
In June 2014, the Company’s Board of Directors approved a plan amendment to the Sprint Retirement Pension Plan (the Plan) to offer certain
terminated participants, who had not begun to receive Plan benefits, the opportunity to voluntarily elect to receive their benefits as an immediate lump sum
distribution. Upon expiration of the election period and completion of cash payments on November 28, 2014, the lump sum distribution, totaling approximately
$560 million , created a settlement event that resulted in a $59 million charge, which is reflected in "Other, net" in the consolidated statements of operations, and a
reduction in the projected benefit obligation of approximately $300 million , impacted by the settlement as well as a change in the mortality tables and a change in
the discount rate used to estimate the projected benefit obligation.
As of March 31, 2016 and 2015 , the fair value of our pension plan assets and certain other postretirement benefit plan assets in aggregate was $1.3
billion in both periods and the fair value of our projected benefit obligations in aggregate was $2.2 billion in both periods. As a result, the plans were underfunded
by approximately $900 million as of both March 31, 2016 and 2015 and were recorded as a net liability in our consolidated balance sheets. Estimated contributions
totaling approximately $50 million are expected to be paid during the fiscal year 2016 .
The offset to the pension liability is recorded in equity as a component of "Accumulated other comprehensive loss," net of tax, including $29 million ,
$393 million , $147 million , and $93 million for the Successor years ended March 31, 2016 and 2015 , the three-month transition period ended March 31, 2014 ,
and year ended December 31, 2013 , respectively, which is amortized to "Selling, general and administrative" in Sprint's consolidated statements of operations. The
change in the net liability of the Plan in the Successor year ended March 31, 2016 was affected by a change in the discount rate used to estimate the projected
benefit obligation, increasing from 4.2% for the Successor year ended March 31, 2015 to 4.3% for the Successor year ended March 31, 2016 , combined with a $9
million prior service credit resulting from an amendment to one of the other postretirement benefit plans during 2015. The change in the net liability of the Plan in
the Successor year ended March 31, 2015 was affected by the impact of the settlement event on the projected benefit obligation combined with a change in the
discount rate used to estimate the projected benefit obligation, decreasing from 4.9% for the Successor three-month transition period ended March 31, 2014 to
4.2% for the Successor year ended March 31, 2015 . The change in the net liability of the Plan in the Successor three-month transition period ended March 31,
2014 and year ended December 31, 2013 was affected primarily by a change in the discount rate used to estimate the projected benefit obligation, decreasing from
5.3% to 4.9% for the Successor three-month transition period ended March 31, 2014 . We intend to make future cash contributions to the Plan in an amount
necessary to meet minimum funding requirements according to applicable benefit plan regulations.
As of December 31, 2005, the Plan was amended to freeze benefit plan accruals for participants. The objective for the investment portfolio of the
pension plan is to achieve a long-term nominal rate of return, net of fees, which exceeds the plan's long-term expected rate of return on investments for funding
purposes which was 7.75% at March 31, 2016 and 2015 . To meet this objective, our investment strategy for the year ended March 31, 2016 was governed by an
asset allocation policy, whereby a targeted allocation percentage is assigned to each asset class as follows: 38% to U.S. equities; 16% to international equities; 28%
to fixed income investments; 9% to real estate investments; and 9% to other investments including hedge funds. Actual allocations are allowed to deviate from
target allocation percentages within a range for each asset class as defined in the investment policy.
Investments of the Plan are measured at fair value on a recurring basis which is determined using quoted market prices or estimated fair values. As of
March 31, 2016 , 31% of the investment portfolio was valued at quoted prices in active markets for identical assets; 49% was valued using quoted prices for similar
assets in active or inactive markets, or other observable inputs; and 20% was valued using unobservable inputs that are supported by little or no market activity.
Under our defined contribution plan, participants may contribute a portion of their eligible pay to the plan through payroll withholdings. For the
Successor years ended March 31, 2016 and 2015 , the three-month transition period ended March 31, 2014 , and the year ended December 31, 2013 , the Company
matched 100% of the participants' pre-tax and Roth
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