Frontier Communications 2007 Annual Report Download - page 88

CITIZENS COMMUNICATIONS COMPANY AND SUBSIDIARIES
Notes to Consolidated Financial Statements
(22) QUARTERLY FINANCIAL DATA (UNAUDITED):
($ in thousands, except per share amounts) First quarter Second quarter Third quarter Fourth quarter Year ended December 31,
2007
Revenue .................................. $556,147 $578,826 $575,814 $577,228 $2,288,015
Operating income ........................... 193,302 171,298 165,925 174,891 705,416
Net income ................................ 67,667 40,559 47,415 59,013 214,654
Net income available for common shareholders per
basic share ............................... $ 0.21 $ 0.12 $ 0.14 $ 0.18 $ 0.65
Net income available for common shareholders per
diluted share ............................. $ 0.21 $ 0.12 $ 0.14 $ 0.18 $ 0.65
2006
Revenue .................................. $506,861 $506,912 $507,198 $504,396 $2,025,367
Operating income ........................... 157,338 169,458 160,721 156,973 644,490
Net income ................................ 50,483 101,702 128,459 63,911 344,555
Net income available for common shareholders per
basic share ............................... $ 0.15 $ 0.32 $ 0.40 $ 0.20 $ 1.07
Net income available for common shareholders per
diluted share ............................. $ 0.15 $ 0.31 $ 0.40 $ 0.20 $ 1.06
The quarterly net income per common share amounts are rounded to the nearest cent. Annual net income per
common share may vary depending on the effect of such rounding. Our quarterly results include the results of
operations of Commonwealth from the date of its acquisition on March 8, 2007 and of GVN from the date of its
acquisition on October 31, 2007. During the second quarter of 2006, we recorded a gain in investment income of
$61.4 million resulting from the dissolution and liquidation of the Rural Telephone Bank. In the third quarter of
2006 we sold ELI (see Note 8). See Notes 13 and 14 for a description of other miscellaneous transactions
impacting our quarterly results.
(23) RETIREMENT PLANS:
We sponsor a noncontributory defined benefit pension plan covering a significant number of our former and
current employees and other postretirement benefit plans that provide medical, dental, life insurance and other
benefits for covered retired employees and their beneficiaries and covered dependents. The benefits are based on
years of service and final average pay or career average pay. Contributions are made in amounts sufficient to
meet ERISA funding requirements while considering tax deductibility. Plan assets are invested in a diversified
portfolio of equity and fixed-income securities and alternative investments.
The accounting results for pension and postretirement benefit costs and obligations are dependent upon
various actuarial assumptions applied in the determination of such amounts. These actuarial assumptions include
the following: discount rates, expected long-term rate of return on plan assets, future compensation increases,
employee turnover, healthcare cost trend rates, expected retirement age, optional form of benefit and mortality.
We review these assumptions for changes annually with our independent actuaries. We consider our discount rate
and expected long-term rate of return on plan assets to be our most critical assumptions.
The discount rate is used to value, on a present value basis, our pension and postretirement benefit
obligations as of the balance sheet date. The same rate is also used in the interest cost component of the pension
and postretirement benefit cost determination for the following year. The measurement date used in the selection
of our discount rate is the balance sheet date. Our discount rate assumption is determined annually with
assistance from our actuaries based on the pattern of expected future benefit payments and the prevailing rates
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