Windstream 2013 Annual Report Download - page 200

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
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F-64
8. Employee Benefit Plans and Postretirement Benefits:
We maintain a non-contributory qualified defined benefit pension plan. Future benefit accruals for all eligible nonbargaining
employees covered by the pension plan have ceased. We also maintain supplemental executive retirement plans that provide
unfunded, non-qualified supplemental retirement benefits to a select group of management employees. Additionally, we
provide postretirement healthcare and life insurance benefits for eligible employees. Employees share in, and we fund, the costs
of these plans as benefits are paid.
The components of pension benefit (income) expense (including provision for executive retirement agreements) and
postretirement benefits income were as follows for the years ended December 31:
Pension Benefits Postretirement Benefits
(Millions) 2013 2012 2011 2013 2012 2011
Benefits earned during the year $ 10.5 $ 10.0 $ 9.3 $ — $ 0.1 $ 0.2
Interest cost on benefit obligation 52.5 58.0 60.7 1.4 1.8 3.4
Net actuarial (gain) loss (110.4) 72.5 167.9 — — —
Amortization of net actuarial loss — — — 1.7 2.3 1.0
Amortization of prior service credit (0.1) (0.1)(0.1)(8.6)(11.8)(10.7)
Plan curtailments ———(32.2)(9.6)(14.7)
Expected return on plan assets (67.8) (73.0)(71.0) — — —
Net periodic benefit (income) expense $ (115.3) $ 67.4 $ 166.8 $ (37.7) $ (17.2) $ (20.8)
During 2013, we made changes to our postretirement medical plan, eliminating medical and prescription drug subsidies for
certain active and retired participants effective August 1, 2013, October 1, 2013 or January 1, 2014. As a result, we remeasured
the plan and recognized curtailment gains totaling $32.2 million, of which $24.1 million was recognized in cost of services
expenses and $8.1 million was recognized in selling, general and administrative expenses, with offsetting effects recorded as
reductions in accumulated other comprehensive income of $31.8 million and other liabilities of $0.4 million.
During 2012, we also made changes to our postretirement medical plan, eliminating medical and prescription drug subsidies for
certain active and retired participants effective January 1, 2014. As a result, we remeasured the plan and recognized a
curtailment gain of $9.6 million, of which $7.4 million was recognized in cost of services expenses and $2.2 million was
recognized in selling, general, and administrative expenses, with an offsetting reduction in accumulated other comprehensive
income.
During 2011, we communicated the elimination of retiree basic life insurance benefits for certain participants of our plans
effective January 1, 2012. As a result of this change, we remeasured the plan and recorded a curtailment gain of $14.7 million,
of which $11.2 million was recorded in cost of services and $3.5 million in selling, general and administrative expenses.
We recognize actuarial gains and losses for pension benefits as a component of net periodic benefit expense (income) in the
year in which the gains and losses occur. In determining our annual postretirement benefits cost, we amortize unrecognized
actuarial gains and losses exceeding 10.0 percent of the projected benefit obligation over the lesser of 10 years or the average
remaining service life of active employees. We do not amortize unrecognized actuarial gains and losses below the 10.0 percent
corridor.