Windstream 2007 Annual Report Download - page 146

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
8. Employee Benefit Plans and Postretirement Benefits, Continued:
Expenses recorded by the Company related to the pension plan amounted to $9.2 million in 2006 for the period
ended July 17th prior to the spin off, and $15.1 million for the year ended December 31, 2005. These expenses are
included in cost of services and selling, general, administrative and other expenses in the consolidated statements
of income. The following table reflects the components of pension expense for the period following the spin off in
2006 and 2007 (including provision for executive retirement agreements) and postretirement expense for the years
ended December 31:
Pension Benefits Postretirement Benefits
(Millions) 2007 2006 (a) 2007 2006 2005
Benefits earned during the year $ 16.3 $ 8.2 $ 0.4 $ 0.2 $ -
Interest cost on benefit obligation 53.7 26.9 15.1 7.3 9.6
Amortization of transition obligation - - 0.8 0.4 -
Recognition of net actuarial loss 24.1 14.3 6.1 3.3 5.3
Amortization of prior service cost (0.2) - 1.9 0.9 1.8
(Gain) loss from plan curtailments - (1.7) 0.1 0.4 -
Expected return on plan assets (79.0) (36.6) - - -
Total net periodic benefit expense $ 14.9 $ 11.1 $ 24.4 $ 12.5 $ 16.7
(a) Amounts reflect pension expense for the period following the inception of the Windstream pension plan
pursuant to the spin off from Alltel.
As a component of determining its annual pension cost, Windstream amortizes unrecognized gains or losses that
exceed 17.5 percent of the greater of the projected benefit obligation or market-related value of plan assets on a
straight-line basis over five years. Unrecognized actuarial gains and losses below the 17.5 percent corridor are
amortized over the average remaining service life of active employees, which is approximately 11 years and
13 years for the pension and postretirement benefit plans, respectively. The Company uses a December 31
measurement date for its employee benefit plans.
F-60