Cincinnati Bell 2006 Annual Report Download - page 190

Funded Status
Reconciliation of the beginning and ending balances of the plans’ funded status follows:
Pension Benefits
Postretirement and
Other Benefits
(dollars in millions) 2006 2005 2006 2005
Change in benefit obligation:
Benefit obligation at January 1, ............................... $500.1 $ 504.5 $ 356.7 $ 416.4
Service cost ............................................. 8.8 8.0 3.5 4.3
Interest cost ............................................. 27.7 27.2 19.9 20.5
Amendments ............................................ — 3.1 — (70.8)
Actuarial loss ............................................ 17.6 7.7 4.3 10.9
Benefits paid ............................................ (52.3) (50.4) (28.2) (26.0)
Retiree drug subsidy received ............................... — — 0.8 —
Other .................................................. — — 2.0 1.4
Benefit obligation at December 31, ............................ $501.9 $ 500.1 $ 359.0 $ 356.7
Change in plan assets:
Fair value of plan assets at January 1, ........................... $440.4 $ 458.7 $ 58.4 $ 77.7
Actual return on plan assets ................................ 53.1 29.5 4.6 2.5
Employer contribution .................................... 2.5 2.6 10.8 4.2
Retiree drug subsidy received ............................... — — 0.8 —
Benefits paid ............................................ (52.3) (50.4) (28.2) (26.0)
Fair value of plan assets at December 31, ........................ $443.7 $ 440.4 $ 46.4 $ 58.4
Reconciliation to Balance Sheet:
Unfunded status ............................................ $(58.2) $ (59.7) $(312.6) $(298.3)
Unrecognized transition obligation ............................. — 29.5
Unrecognized prior service cost ............................... 25.5 80.8
Unrecognized net loss ....................................... 79.3 79.7
Adjustment for minimum pension liability ....................... (103.8) —
Accrued benefit cost ........................................ $ (58.7) $(108.3)
In October 2006, the FASB issued Statement of Financial Accounting Standards No. 158, “Employer’s
Accounting for Defined Benefit Pension and Other Postretirement Plans—an amendment of FASB Statements
No. 87, 88, 106, and 132(R)” (“SFAS 158”). SFAS 158 requires the Company to recognize the overfunded or
underfunded status for the Company’s benefit plans, with changes in the funded status recognized as a separate
component to shareowners’ equity. SFAS 158 also requires the Company to measure the funded status of the
benefit plans as of the year-end balance sheet date no later than 2008. The Company’s measurement date for all
of its employee benefit plans was the year-end balance sheet date. Effective December 31, 2006, the Company
adopted SFAS 158 and its incremental effect on individual line items in the Consolidated Balance Sheet as of
December 31, 2006 was as follows:
(dollars in millions)
Before
Application of
SFAS 158
Additional
Minimum
Pension
Liabilities
SFAS 158
Adjustments
After
Application of
SFAS 158
Accrued pension and
postretirement benefits ....... $ (199.5) $ 6.9 $(178.2) $ (370.8)
Deferred income tax benefit,
net ....................... 622.8 (1.4) 73.3 694.7
Pension intangible assets ....... 25.5 (3.3) (22.2) —
Total liabilities ............... (2,634.1) 6.9 (178.2) (2,805.4)
Accumulated other
comprehensive loss .......... (49.6) 2.2 (127.1) (174.5)
Total shareowners’ deficit ...... (666.7) 2.2 (127.1) (791.6)
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