Verizon Communications Inc., New York, made a discretionary contribution to its pension plans of $1 billion in the first quarter, company spokesman Robert A. Varettoni said in an email.
The company said it made the contribution to improve the funded status of the plans. With the additional contribution, Verizon said it does not expect to have any mandatory contributions to the plans until 2026. In its most recent 10-K filing, Verizon had not disclosed any expected contributions to the plans this year.
In its fourth-quarter earnings release in January, Verizon had stated that tax reform legislation would have a positive impact on cash flow of between $3.5 billion and $4 billion, and that would be used to strengthen the company's balance sheet. The contribution is part of that effort, Mr. Varettoni said.
In 2017, Verizon contributed a total of $4.1 billion to the plans, $600 million of which was required. In the first quarter of that year, Verizon made a discretionary contribution of $3.4 billion, which was debt funded, with part of the use of proceeds also used in the acquisition of Yahoo.
As of Dec. 31, Verizon's plan assets totaled $19.175 billion, while projected benefit obligations totaled $21.531 billion, for a funding ratio of 89.1%, up from 69.5% the year before, according to the 10-K filing. The discount rate as of that date was 3.7%, down from 4.3% the year before.