Windstream 2010 Annual Report Download - page 163

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
8. Employee Benefit Plans and Postretirement Benefits, Continued:
For the year ended December 31, 2010, a one percent increase in the assumed healthcare cost trend rate would
increase the postretirement benefit cost by approximately $0.2 million, while a one percent decrease in the rate
would reduce the postretirement benefit cost by approximately $0.2 million. As of December 31, 2010, a one
percent increase in the assumed healthcare cost trend rate would increase the postretirement benefit obligation by
approximately $4.2 million, while a one percent decrease in the rate would reduce the postretirement benefit
obligation by approximately $3.5 million.
Estimated future employer contributions, benefit payments, including executive retirement agreements, as follows
as of December 31, 2010:
(Millions)
Pension
Benefits
Postretirement
Benefits
Expected employer contributions in 2011 $ 61.0 $ 8.0
Expected benefit payments:
2011 $ 68.3 $ 8.0
2012 72.0 7.9
2013 73.3 7.7
2014 75.8 7.5
2015 77.8 7.2
2016 – 2020 413.6 32.0
The expected employer contribution for pension benefits consists of $1.0 million necessary to fund the expected
benefit payments related to the unfunded supplemental retirement pension plans and approximately $60.0 million
in contributions to avoid certain benefit restrictions. The contribution will be in the form of Windstream common
stock, which will allow the Company to preserve cash and manage overall net debt leverage. Future contributions
to the plan will depend on various factors including future investment performance, the finalization of funding
requirements, changes in future discount rates and changes in the demographics of the population participating in
the Company’s pension plan. Expected benefit payments include amounts to be paid from the plans or directly
from the Company’s assets, and exclude amounts that will be funded by participant contributions to the plans.
Effective January 1, 2011, changes to the Windstream Retiree Medical Plan will allow retirees to elect their
prescription plan through the UnitedHealthCare Medicare Connector. This change will result in savings for the
Company. However, due to the changes, Windstream will no longer be eligible for the Medicare Part D subsidy.
The Company expects to receive $0.7 million in Medicare prescription drug subsidies relating to the 2009 and
2010 plan years during 2011.
The Company also sponsors an employee savings plan under section 401(k) of the Internal Revenue Code, which
covers substantially all salaried employees and certain bargaining unit employees. Employees may elect to
contribute to the plans a portion of their eligible pretax compensation up to certain limits as specified by the plans
and by the Internal Revenue Service. Effective January 2009, the Company decreased its matching contribution to
employee savings accounts from a maximum of 6 percent to a maximum of 4 percent of employee pretax
contributions for employees contributing at least 5 percent. The Company’s matching contribution is funded
annually. During 2008, the Company made matching contributions of 6 percent of employee pretax contributions.
The Company recorded $10.9 million, $8.9 million and $13.2 million in 2010, 2009 and 2008, respectively,
related to the employee savings plan, which was included in cost of services and selling, general, administrative
and other expenses in the consolidated statements of income.
9. Share-Based Compensation Plans:
Under the Amended and Restated 2006 Equity Incentive Plan (the “Incentive Plan”), the Company may issue a
maximum of 20.0 million equity stock awards in the form of restricted stock, restricted stock units, stock
appreciation rights or stock options. Restricted stock, restricted stock units and stock appreciation rights were
limited to 18.5 million of the total awards issuable under the Incentive Plan. As of December 31, 2010, the
Incentive Plan had remaining capacity of 11.4 million awards, of which 9.9 million were issuable in the form of
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