Frontier Communications 2007 Annual Report Download - page 91

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CITIZENS COMMUNICATIONS COMPANY AND SUBSIDIARIES
Notes to Consolidated Financial Statements
Effective December 30, 2007, the CTE Employees’ Pension Plan was frozen for all non-union
Commonwealth employees. No additional benefit accruals for service rendered subsequent to December 30, 2007
will occur for those participants. As a result of this plan change and in accordance with SFAS No. 88,
“Employers’ Accounting for Settlements and Curtailments of Defined Benefit Pension Plans and for Termination
Benefits,” a gain on pension curtailment of $14.4 million was recorded in 2007 and included in other operating
expenses in the consolidated statement of operations. Also, effective December 31, 2007, the CTE Employees’
Pension Plan was merged into the Citizens Pension Plan.
The plan’s weighted average asset allocations at December 31, 2007 and 2006 by asset category are as
follows:
2007 2006
Asset category:
Equity securities ................................. 51% 53%
Debt securities .................................. 38% 34%
Alternative investments ........................... 9% 12%
Cash and other .................................. 2% 1%
Total ...................................... 100% 100%
The plan’s expected benefit payments over the next 10 years are as follows:
($ in thousands)
Year Amount
2008 ................................................ $ 58,423
2009 ................................................ 61,277
2010 ................................................ 62,645
2011 ................................................ 64,540
2012 ................................................ 68,968
2013 - 2017 ........................................... 347,027
Total ................................................ $662,880
We expect that no contribution will be made by us to the pension plan in 2008.
The accumulated benefit obligation for the plan was $805.0 million and $762.1 million at December 31,
2007 and 2006, respectively.
Assumptions used in the computation of annual pension costs and valuation of the year-end obligations were
as follows:
2007 2006 2005
Discount rate—used at year end to value obligation ............ 6.50% 6.00% 5.625%
Discount rate—used to compute annual cost .................. 6.00% 5.625% 6.00%
Expected long-term rate of return on plan assets ............... 8.25% 8.25% 8.25%
Rate of increase in compensation levels ..................... 3.50% 4.00% 4.00%
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