Frontier Communications 2005 Annual Report Download - page 87

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F-38
CITIZENS COMMUNICATIONS COMPANY AND SUBSIDIARIES
Notes to Consolidated Financial Statements
Postretirement Benefits Other Than Pensions
The following table sets forth the plan’s benefit obligations, fair values of plan assets and the postretirement
benefit liability recognized on our balance sheets at December 31, 2005 and 2004 and net periodic postretirement
benefit costs for the years ended December 31, 2005, 2004 and 2003:
In 2005, we approved changes to certain retiree medical plans. The plan changes (reflected as amendments in
the table below) and the related impact are included in the accumulated postretirement benefit obligation (APBO) as
of December 31, 2005. The plan changes resulted in a reduction in the APBO of $59,798,000 which will be amortized
as a reduction of retiree medical expense over the average remaining service life.
($ in thousands) 2005 2004
Change in benefit obligation
Benefit obligation at beginning of year . . . . . . . . . . . $ 217,380 $ 223,337
Service cost . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,046 1,128
Interest cost . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12,055 12,698
Plan participants’ contributions . . . . . . . . . . . . . . . . . 3,461 4,118
Actuarial (gain) loss . . . . . . . . . . . . . . . . . . . . . . . . . . 3,770 (1,706)
Amendments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (59,798) (3,045)
Benefits paid . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (16,992) (19,150)
Benefit obligation at end of year . . . . . . . . . . . . . . . . $ 160,922 $ 217,380
Change in plan assets
Fair value of plan assets at beginning of year . . . . . . $ 15,126 $ 27,493
Actual return on plan assets . . . . . . . . . . . . . . . . . . . . 397 987
Benefits paid . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (13,530) (15,032)
Employer contribution . . . . . . . . . . . . . . . . . . . . . . . . 9,431 1,678
Fair value of plan assets at end of year . . . . . . . . . . . . $ 11,424 $ 15,126
Accrued benefit cost
Funded status . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ (149,498) $ (202,254)
Unrecognized prior service cost . . . . . . . . . . . . . . . . . (61,161) (2,617)
Unrecognized loss . . . . . . . . . . . . . . . . . . . . . . . . . . . 42,325 44,319
Accrued benefit cost . . . . . . . . . . . . . . . . . . . . . . . . . . $ (168,334) $ (160,552)
($ in thousands) 2005 2004 2003
Components of net periodic postretirement
benefit cost
Service cost . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 1,046 $ 1,128 $ 1,387
Interest cost on projected benefit obligation . . . . . . . 12,055 12,698 13,606
Return on plan assets . . . . . . . . . . . . . . . . . . . . . . . . . (1,248) (2,268) (2,133)
Amortization of prior service cost and transition
obligation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (1,255) (204) 26
Amortization of unrecognized (gain)/loss . . . . . . . . . 6,615 5,238 3,985
Net periodic postretirement benefit cost . . . . . . . . . . $ 17,213 $ 16,592 $ 16,871