Frontier Communications 2008 Annual Report Download - page 89

Pension Benefits
The following tables set forth the plan’s projected benefit obligations and fair values of plan assets as of
December 31, 2008 and 2007 and net periodic benefit cost for the years ended December 31, 2008, 2007 and
2006:
($ in thousands) 2008 2007
Change in projected benefit obligation
Projected benefit obligation at beginning of year . . ....................... $ 820,404 $780,719
Commonwealth plan as of acquisition date ............................... — 107,047
Service cost ............................................................ 6,005 9,175
Interest cost ............................................................ 52,851 50,948
Actuarial loss/(gain) . ................................................... 20,230 (26,524)
Benefits paid ........................................................... (69,465) (87,049)
Curtailment ............................................................ — (14,379)
Special termination benefits . . . .......................................... 1,662 467
Projected benefit obligation at end of year ............................... $ 831,687 $820,404
Change in plan assets
Fair value of plan assets at beginning of year ............................ $ 822,165 $770,182
Commonwealth plan as of acquisition date ............................... — 92,175
Actual return on plan assets. . . .......................................... (162,924) 46,857
Benefits paid ........................................................... (69,465) (87,049)
Fair value of plan assets at end of year. . ................................ $ 589,776 $822,165
(Accrued)/Prepaid benefit cost
Funded status .......................................................... $(241,911) $ 1,761
Amounts recognized in the consolidated balance sheet
Other assets/(other long-term liabilities) . . ................................ $(241,911) $ 1,761
Accumulated other comprehensive income ............................... $ 376,086 $134,276
($ in thousands)
Expected
2009 2008 2007 2006
Components of net periodic benefit cost
Service cost. . . ...................................... $ 6,005 $ 9,175 $ 6,811
Interest cost on projected benefit obligation........... 52,851 50,948 45,215
Expected return on plan assets . . . .................... (65,256) (67,467) (60,759)
Amortization of prior service cost/(credit) . ........... (255) (255) (255) (255)
Amortization of unrecognized loss ................... 26,824 6,855 7,313 11,871
Net periodic benefit cost/(income).................... 200 (286) 2,883
Plan curtailment gain . . . ............................. — (14,379) —
Special termination charge ........................... 1,662 467 1,809
Total periodic benefit cost/(income) .................. $ 1,862 $(14,198) $ 4,692
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 Frontier Pension Plan.
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FRONTIER COMMUNICATIONS CORPORATION AND SUBSIDIARIES
Notes to Consolidated Financial Statements