Frontier Communications 2008 Annual Report Download - page 87

(22) Quarterly Financial Data (Unaudited):
($ in thousands, except per share amounts)
First Quarter Second Quarter Third Quarter Fourth Quarter Total Year
2008
Revenue . . . . . . . . . . . . . . . . . . . . . . $569,205 $562,550 $557,871 $547,392 $2,237,018
Operating income . . . . . . . . . . . . . 164,312 161,969 164,241 151,934 642,456
Net income . . . . . . . . . . . . . . . . . . . 45,589 55,778 46,995 34,298 182,660
Net income available for
common shareholders per
basic share . . . . . . . . . . . . . . . . . $ 0.14 $ 0.17 $ 0.15 $ 0.11 $ 0.58
Net income available for
common shareholders per
diluted share. . . . . . . . . . . . . . . . $ 0.14 $ 0.17 $ 0.15 $ 0.11 $ 0.57
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
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. See Notes 13 and 14 for a description of 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 other 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 other 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 available on long-term, high quality corporate bonds that approximate the benefit obligation. In making
this determination we consider, among other things, the yields on the Citigroup Pension Discount Curve, the
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FRONTIER COMMUNICATIONS CORPORATION AND SUBSIDIARIES
Notes to Consolidated Financial Statements