Frontier Communications 2012 Annual Report Download - page 94

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, 2012 and 2011 and the components of total periodic pension benefit cost for the years
ended December 31, 2012, 2011 and 2010:
($ in thousands) 2012 2011
Change in projected benefit obligation (PBO)
PBO at beginning of year . . . ......................................... $1,799,313 $1,644,657
Service cost ......................................................... 43,688 38,879
Interest cost ......................................................... 78,027 84,228
Actuarial loss ........................................................ 196,304 160,390
Benefits paid ........................................................ (172,601) (128,841)
PBO at end of year .................................................. $1,944,731 $1,799,313
Change in plan assets
Fair value of plan assets at beginning of year . . ....................... $1,257,990 $1,290,274
Actual return on plan assets . ......................................... 139,679 19,883
Employer contributions, net of transfers ............................... 28,598 76,674
Benefits paid ........................................................ (172,601) (128,841)
Fair value of plan assets at end of year ............................... $1,253,666 $1,257,990
Funded status ........................................................ $ (691,065) $ (541,323)
Amounts recognized in the consolidated balance sheet
Current liabilities . . .................................................. $ (60,386) $ —
Pension and other postretirement benefits.............................. $ (630,679) $ (541,323)
Accumulated other comprehensive loss ................................ $ 697,874 $ 575,163
($ in thousands)
Expected in
2013 2012 2011 2010
Components of total periodic pension benefit cost
Service cost . ...................................... $ 43,688 $ 38,879 $ 21,169
Interest cost on projected benefit obligation ......... 78,027 84,228 67,735
Expected return on plan assets . . ................... (95,777) (100,558) (69,831)
Amortization of prior service cost/(credit) . .......... $ 8 (199) (199) (199)
Amortization of unrecognized loss .................. 40,287 29,890 15,364 27,393
Net periodic pension benefit cost ................... 55,629 37,714 46,267
Special termination charge ......................... — — 69
Total periodic pension benefit cost.................. $ 55,629 $ 37,714 $ 46,336
We capitalized $15.8 million, $10.2 million and $8.3 million of pension and OPEB expense into the cost
of our capital expenditures during the years ended December 31, 2012, 2011 and 2010, respectively, as the
costs relate to our engineering and plant construction activities.
Based on current assumptions and plan asset values, we estimate that our 2013 pension and OPEB
expenses will be approximately $100 million to $110 million before amounts capitalized into the cost of capital
expenditures.
The plan’s weighted average asset allocations at December 31, 2012 and 2011 by asset category are as
follows:
F-33
FRONTIER COMMUNICATIONS CORPORATION AND SUBSIDIARIES
Notes to Consolidated Financial Statements