Employee Benefit Plans

9 Months Ended

Sep. 30, 2013

Compensation and Retirement Disclosure [Abstract]

Employee Benefit Plans

Employee Benefit Plans

The Company sponsors noncontributory qualified pension plans and post-retirement healthcare plans, which provide certain cash payments and medical and dental benefits to covered retired employees and their beneficiaries and covered dependents. These plans were assumed as part of the acquisition of the Northern New England operations from Verizon. The qualified pension plan and the post-retirement healthcare plan covering non-represented employees are frozen. Therefore, no new benefits are being earned by participants and no new participants are becoming eligible for benefits in these plans. Participants in the qualified pension plan and the post-retirement healthcare plan covering represented employees continue to accrue benefits in accordance with the respective plan documents and contractual requirements in the collective bargaining agreements. Eligibility to participate in the plans is based on an employee's age and years of service. The Company makes contributions to the qualified pension plans to meet minimum Employee Retirement Income Security Act of 1974, as amended ("ERISA"), funding requirements and has the ability to elect to make additional discretionary contributions. Payments of benefits under the post-retirement healthcare plans are funded by the Company as the benefits are paid.

Absent a settlement or curtailment, the Company remeasures the net liabilities of its qualified pension and other post-retirement healthcare plans annually.

Net Periodic Benefit Cost. Net periodic benefit cost is generally recognized as a component of selling, general and administrative expense on the consolidated statements of operations; however, the Company capitalizes a portion of net periodic benefit cost in conjunction with its use of internal labor resources utilized on capital projects. Components of the net periodic benefit cost related to the Company's qualified pension plans and post-retirement healthcare plans for the three and nine months ended September 30, 2013 and 2012 are presented below (in thousands):

	Three Months Ended September 30, 2013					Three Months Ended September 30, 2012
	Qualified Pension			Post- retirement Healthcare		Qualified Pension			Post- retirement Healthcare
Service cost	$	4,633		$	5,874	$	3,649		$	5,923
Interest cost	3,774			5,785		3,695			5,774
Expected return on plan assets	(3,082		)	—		(3,356		)	(8		)
Amortization of actuarial loss	1,635			1,464		575			1,398
Plan settlement	52			—		89			—
Net periodic benefit cost	$	7,012		$	13,123	$	4,652		$	13,087

	Nine Months Ended September 30, 2013					Nine Months Ended September 30, 2012
	Qualified Pension			Post- retirement Healthcare		Qualified Pension			Post- retirement Healthcare
Service cost	$	13,910		$	20,838	$	11,841		$	19,491
Interest cost	11,175			18,770		10,994			18,139
Expected return on plan assets	(9,384		)	—		(9,887		)	(25		)
Amortization of actuarial loss	3,981			5,934		1,617			4,762
Plan settlement	1,065			—		445			—
Net periodic benefit cost	$	20,747		$	45,542	$	15,010		$	42,367

Contributions and Benefit Payments. On July 6, 2012, the Moving Ahead for Progress in the 21^st Century Act was signed into law. This act contained a pension funding stabilization provision, which allows pension plan sponsors to use higher interest rate assumptions when determining funded status and funding obligations. As a result, the Company's 2013 minimum required qualified pension plan contribution is significantly lower than it would have been in the absence of this stabilization provision. On September 25, 2012, the Company elected to defer use of the higher segment rates under the act until the first plan year beginning on or after January 1, 2013 solely for determination of the adjusted funding target attainment percentage ("AFTAP") used to determine benefit restrictions under Internal Revenue Code Section 436.

The Company expects to contribute approximately $22.0 million to its qualified pension plans in 2013, which includes the minimum required contribution amount required by the Pension Protection Act of 2006 in addition to discretionary contributions. During the nine months ended September 30, 2013, contributions of $13.2 million were made to the qualified pension plans. The Company expects to fund approximately $5.1 million in benefit payments to its post-retirement healthcare plans during fiscal year 2013, of which $2.6 million was funded during the nine months ended September 30, 2013. Accordingly, during the remainder of fiscal year 2013, the Company expects to contribute approximately $8.8 million to its qualified pension plans and fund approximately $2.5 million in benefit payments to its post-retirement healthcare plans.

Return on Plan Assets. For the three months ended September 30, 2013 and 2012 and the nine months ended September 30, 2013 and 2012, the actual return on the pension plan assets were gains of approximately 4.1%, 4.1%, 7.0% and 7.7%, respectively. Net periodic benefit cost for 2013 assumes a weighted average annualized expected return on plan assets of approximately 7.6%. Should the Company's actual return on plan assets be lower than the expected return assumption, the net periodic benefit cost may increase in future periods and the Company may be required to contribute additional funds to its qualified pension plans.