Windstream 2007 Annual Report Download - page 145

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
8. Employee Benefit Plans and Postretirement Benefits:
Windstream maintains a non-contributory qualified defined benefit pension plan, which covers substantially all
employees. Prior to establishing the pension plan pursuant to the spin off in 2006, the Company’s employees
participated in a substantially equivalent plan maintained by Alltel. Future benefit accruals for all eligible
nonbargaining employees covered by the pension plan ceased as of December 31, 2005 (December 31, 2010 for
employees who had attained age 40 with two years of service as of December 31, 2005). The Company also
maintains supplemental executive retirement plans that provide unfunded, non-qualified supplemental retirement
benefits to a select group of management employees. Additionally, the Company provides postretirement
healthcare and life insurance benefits for eligible employees. Employees share in, and the Company funds, the
costs of these plans as benefits are paid.
Employees of the publishing business began participating in the pension plan on January 1, 2005. As a result of
the split off of the publishing business future benefit accruals for publishing employees who had attained the age
of 40 with two years of service as of December 31, 2005 ceased on November 30, 2007. However, Windstream
will continue to credit service for the publishing employees towards the five-year vesting period (ending no later
than December 31, 2010) under the pension plan as long as they continue to be employed by the acquiring
business.
In conjunction with the acquisition of CTC on August 31, 2007, the Company assumed certain obligations related
to a non-contributory qualified pension plan and postretirement benefit plan formerly sponsored by CTC. The
CTC plans were merged into the Windstream pension and postretirement employee benefit plans effective
December 31, 2007 and October 1, 2007, respectively. The CTC pension plan was fully funded, and as a result
Windstream recognized additional net pension assets of $7.6 million, as of December 31, 2007, which are
included in other assets in the accompanying consolidated balance sheet. In conjunction with the CTC
postretirement benefit plan, Windstream recognized additional postretirement benefit obligations totaling
$6.5 million as of December 31, 2007, which are included in other liabilities in the accompanying consolidated
balance sheet.
The Company adopted the provisions of SFAS No. 158 as of December 31, 2006. SFAS No. 158 required the
Company to recognize on the consolidated balance sheet the funded status of the Company’s pension and other
postretirement plans by recognizing the actuarial gains and losses and prior service costs as a component of
accumulated other comprehensive income (loss). The effects of applying SFAS No. 158 within Windstream’s
consolidated balanced sheet as of December 31, 2006 are summarized in Note 2.
In conjunction with establishing the plan and prior to adopting SFAS No. 158, the Company received from Alltel
net prepaid pension assets totaling $191.6 million. The Company also assumed certain obligations totaling
$33.5 million from a non-contributory qualified pension plan formerly sponsored by Valor. In total, approximately
$850.0 million in assets were transferred into a master trust, which the Company created specifically to hold the
assets of its employee pension plan. The Valor plan was merged into the Windstream plan effective December 31,
2006. After merging with the Valor plan and adopting the provisions of SFAS No. 158, Windstream recognized
prepaid pension assets totaling $47.1 million as of December 31, 2006, which were included in other assets in the
accompanying consolidated balance sheet.
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