Employee Benefit Plans

The Company sponsors noncontributory qualified defined benefit pension plans ("qualified pension plans") and post-retirement healthcare plans which provide certain cash payments and medical and dental benefits to eligible 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 which cover 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. The post-retirement healthcare plans are unfunded and the Company funds the benefits that are paid.

Annually and as necessary, the Company remeasures the net liabilities of its qualified pension and other post-retirement healthcare benefits in accordance with the Compensation—Retirement Benefits Topic of the ASC.

Net Periodic Benefit Cost. Net periodic benefit cost is generally recognized as a component of selling, general and administrative expense on the condensed 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 months ended March 31, 2014 and 2013 are as follows (in thousands):



	Three Months Ended March 31, 2014					Three Months Ended March 31, 2013
	Qualified Pension			Post- retirement Healthcare		Qualified Pension			Post- retirement Healthcare
Service cost	$	4,075		$	6,344	$	4,638		$	7,482
Interest cost	3,963			7,311		3,697			6,493
Expected return on plan assets	(3,406		)	—		(3,170		)	—
Amortization of actuarial loss	539			924		1,156			2,235
Net periodic benefit cost	$	5,171		$	14,579	$	6,321		$	16,210

Contributions and Benefit Payments. The Company expects aggregate cash pension contributions and cash post-retirement healthcare payments to be approximately $35.0 million in 2014. During the three months ended March 31, 2014, contributions of $7.5 million were made to the qualified pension plans and benefit payments on post-retirement healthcare plans were $1.1 million.

Return on Plan Assets. For the three months ended March 31, 2014 and 2013, the actual return on the pension plan assets were gains of approximately 6.8% and 3.8%, respectively. Net periodic benefit cost for 2014 assumes a weighted average annualized expected return on plan assets of approximately 7.8%.