Frontier Communications 2010 Annual Report Download - page 91

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assets are valued at fair value as of the measurement date. The measurement date used to determine pension
and other postretirement benefit measures for the pension plan and the postretirement benefit plan is
December 31.
Pension Benefits
The following tables set forth the pension plan’s projected benefit obligations and fair values of plan assets
as of December 31, 2010 and 2009 and the components of net periodic benefit cost for the years ended
December 31, 2010, 2009 and 2008:
($ in thousands) 2010 2009
Change in projected benefit obligation (PBO)
PBO at beginning of year for Frontier Legacy Plan. . . . . . . . . . . . . . . . . . . . . $ 890,576 $ 831,687
PBO for plans of Acquired Business at contracted discount rate . . . . . . . . . 581,256 —
Actuarial adjustment to PBO for plans of Acquired Business(1) .......... 64,098 —
Service cost .......................................................... 21,169 6,098
Interest cost .......................................................... 67,735 52,127
Actuarial loss/(gain)................................................... 87,024 69,861
Benefits paid ......................................................... (67,270) (71,373)
Plan change .......................................................... — 609
Special termination benefits ........................................... 69 1,567
PBO at end of year................................................... $1,644,657 $ 890,576
Change in plan assets
Fair value of plan assets at beginning of year . . . . . . . . . . . . . . . . . . . . . . . . . . $ 608,625 $ 589,776
Fair value of plan assets for Acquired Business as of acquisition date . . . 581,256 —
Actual return on plan assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 154,554 90,222
Employer contributions................................................ 13,109 —
Benefits paid ......................................................... (67,270) (71,373)
Fair value of plan assets at end of year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $1,290,274 $ 608,625
Funded status......................................................... $ (354,383) $(281,951)
Amounts recognized in the consolidated balance sheet
Pension and other postretirement benefits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ (354,383) $(281,951)
Accumulated other comprehensive loss . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 349,264 $ 374,157
(1) Represents the difference between the contracted discount rate agreed upon in the Merger Agreement and
the discount rate used by Frontier to value the liability on July 1, 2010 for financial reporting purposes.
In connection with the completion of the Merger on July 1, 2010, certain employees were transferred from
various Verizon pension plans into 12 pension plans that were then merged with the Frontier Communications
Pension Plan (the Plan) effective August 31, 2010. Assets of $581.3 million, including approximately $142.5
million that represents a receivable of the Plan as of December 31, 2010, were transferred into the Plan during
the second half of 2010, with the receivable to be settled by the transfer of assets by the end of the third quarter
of 2011.
F-32
FRONTIER COMMUNICATIONS CORPORATION AND SUBSIDIARIES
Notes to Consolidated Financial Statements