Windstream 2010 Annual Report Download - page 158

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
8. Employee Benefit Plans and Postretirement Benefits, Continued:
The following table reflects the components of pension expense for the years ended December 31, 2010, 2009 and
2008, including provision for executive retirement agreements, and postretirement benefits expense for the years
ended December 31:
Pension Benefits Postretirement Benefits
(Millions) 2010 2009 2008 2010 2009 2008
Benefits earned during the year $ 15.7 $ 13.6 $ 13.2 $ 0.2 $ 0.1 $ 0.3
Interest cost on benefit obligation 60.6 57.8 56.2 5.2 8.4 12.7
Amortization of transition obligation - - - - - 0.5
Amortization of net actuarial loss 45.8 71.1 6.1 0.6 - 1.1
Amortization of prior service (credit)
cost (0.1) (0.1) (0.1) (8.3) (3.2) 0.2
Expected return on plan assets (60.1) (50.6) (76.3) - - -
Net periodic benefit expense (income) $ 61.9 $ 91.8 $ (0.9) $ (2.3) $ 5.3 $ 14.8
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 was approximately 10 years for its
pension plan during 2010.
As a component of determining its annual postretirement benefits cost, the Company amortizes unrecognized
actuarial gains and losses exceeding the 10.0 percent corridor over the lesser of 10 years or the average remaining
service life of active employees, which was approximately 10 years for its postretirement benefit plan during
2010. Windstream does not amortize unrecognized actuarial gains and losses below the 10.0 percent corridor.
Actuarial assumptions used to calculate pension and postretirement benefits expense were as follows for the years
ended December 31:
Pension Benefits Postretirement Benefits
(Millions) 2010 2009 2008 2010 2009 2008
Discount rate 5.89% 6.18% 6.36% 5.79% 6.11% 6.38%
Expected return on plan assets 8.00% 8.00% 8.00% 8.00% - -
Rate of compensation increase 3.44% 3.44% 3.00% - - -
F-58