Frontier Communications 2009 Annual Report Download - page 94

Pension Benefits
The following tables set forth the pension plan’s projected benefit obligations and fair values of plan assets
as of December 31, 2009 and 2008 and the components of net periodic benefit cost for the years ended
December 31, 2009, 2008 and 2007:
($ in thousands) 2009 2008
Change in projected benefit obligation
Projected benefit obligation at beginning of year ........................ $ 831,687 $ 820,404
Service cost ........................................................... 6,098 6,005
Interest cost ........................................................... 52,127 52,851
Actuarial loss/(gain).................................................... 69,861 20,230
Benefits paid . . . ....................................................... (71,373) (69,465)
Plan change ........................................................... 609 —
Special termination benefits ............................................ 1,567 1,662
Projected benefit obligation at end of year . . . ........................... $ 890,576 $ 831,687
Change in plan assets
Fair value of plan assets at beginning of year ........................... $ 589,776 $ 822,165
Actual return on plan assets ............................................ 90,222 (162,924)
Benefits paid . . . ....................................................... (71,373) (69,465)
Fair value of plan assets at end of year ................................. $ 608,625 $ 589,776
Funded status. . . ....................................................... $(281,951) $(241,911)
Amounts recognized in the consolidated balance sheet
Other long-term liabilities . ............................................. $(281,951) $(241,911)
Accumulated other comprehensive income............................... $ 374,157 $ 376,086
($ in thousands)
Expected
2010 2009 2008 2007
Components of net periodic benefit cost
Service cost. . . ...................................... $ 6,098 $ 6,005 $ 9,175
Interest cost on projected benefit obligation........... 52,127 52,851 50,948
Expected return on plan assets . . . .................... (44,712) (65,256) (67,467)
Amortization of prior service cost/(credit) . ........... (199) (255) (255) (255)
Amortization of unrecognized loss ................... 26,984 27,144 6,855 7,313
Net periodic benefit cost/(income).................... 40,402 200 (286)
Plan curtailment gain . . . ............................. — — (14,379)
Special termination charge ........................... 1,567 1,662 467
Total periodic benefit cost/(income) .................. $ 41,969 $ 1,862 $(14,198)
We capitalized $7.5 million, $0.0 million and $0.1 million of pension expense into the cost of our capital
expenditures during the years ended December 31, 2009, 2008 and 2007, respectively, as the costs that relate to
our engineering and plant construction activities.
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 ASC Topic 715
(formerly 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