Pension and Postretirement Plans

The Company sponsors three noncontributory defined benefit plans and a postretirement health and life insurance plan. For the three and six months ended June 30, 2017, approximately 14% and 13% of the costs, respectively, were capitalized as a component of property, plant and equipment related to construction of our copper and fiber networks. In accordance with ASU 2017-07, retrospectively adopted effective January 1, 2018, only the service cost component of net benefit cost is eligible for capitalization on a prospective basis, which was immaterial for the three and six months ended June 30, 2018.

For the three and six months ended June 30, 2018 and 2017, pension and postretirement benefit costs (benefits) were as follows:



	Three Months Ended June 30, 2018
	2018			2017			2018			2017
(dollars in millions)	Pension Benefits						Postretirement and Other Benefits
Service cost	$	—		$	—		$	—		$	—
Other components of pension and postretirement benefit plans expense:
Interest cost on projected benefit obligation	4.1			4.9			0.8			0.8
Expected return on plan assets	(6.2		)	(6.5		)	—			—
Amortization of:
Prior service benefit	—			—			(0.8		)	(1.1		)
Actuarial loss	4.2			4.4			1.1			1.2
Total amortization	4.2			4.4			0.3			0.1
Pension / postretirement costs	$	2.1		$	2.8		$	1.1		$	0.9



	Six Months Ended June 30, 2018
	2018			2017			2018			2017
(dollars in millions)	Pension Benefits						Postretirement and Other Benefits
Service cost	$	—		$	—		$	0.1		$	0.1
Other components of pension and postretirement benefit plans expense:
Interest cost on projected benefit obligation	8.3			9.7			1.6			1.6
Expected return on plan assets	(12.4		)	(13.0		)	—			—
Amortization of:
Prior service benefit	—			—			(1.6		)	(2.2		)
Actuarial loss	8.5			8.8			2.1			2.3
Total amortization	8.5			8.8			0.5			0.1
Pension / postretirement costs	$	4.4		$	5.5		$	2.2		$	1.8

Amortizations of prior service benefit and actuarial loss represent reclassifications from accumulated other comprehensive income.

Based on current assumptions, contributions to qualified and non-qualified pension plans in 2018 are expected to be approximately $4 million and $3 million, respectively. Management expects to make cash payments of approximately $9 million related to its postretirement health plans in 2018.

For the six months ended June 30, 2018, contributions to the pension plans were $2.8 million and contributions to the postretirement plan were $3.5 million.