Frontier Communications 2012 Annual Report Download - page 96

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Postretirement Benefits Other Than Pensions—“OPEB”
The following tables set forth the OPEB plan’s benefit obligations, fair values of plan assets and the
postretirement benefit liability recognized on our consolidated balance sheets at December 31, 2012 and 2011
and the components of net periodic postretirement benefit costs for the years ended December 31, 2012, 2011
and 2010.
($ in thousands) 2012 2011
Change in benefit obligation
Benefit obligation at beginning of year.................................. $ 391,596 $ 353,131
Service cost ........................................................... 10,812 8,958
Interest cost ........................................................... 17,842 17,722
Plan participants’ contributions ......................................... 4,059 4,389
Actuarial loss. . . ....................................................... 30,958 22,564
Benefits paid . . . ....................................................... (15,974) (15,168)
Plan change ........................................................... (743) —
Benefit obligation at end of year . . . .................................... $ 438,550 $ 391,596
Change in plan assets
Fair value of plan assets at beginning of year ........................... $ 5,101 $ 6,240
Actual return on plan assets ............................................ 466 219
Plan participants’ contributions ......................................... 4,059 4,389
Employer contribution.................................................. 11,403 9,421
Benefits paid . . . ....................................................... (15,974) (15,168)
Fair value of plan assets at end of year ................................. $ 5,055 $ 5,101
Funded status. . . ....................................................... $(433,495) $(386,495)
Amounts recognized in the consolidated balance sheet
Current liabilities ...................................................... $ (9,116) $ (9,117)
Pension and other postretirement benefits ............................... $(424,379) $(377,378)
Accumulated other comprehensive loss.................................. $ 74,264 $ 41,811
($ in thousands)
Expected
2013 2012 2011 2010
Components of net periodic postretirement benefit cost
Service cost. . . ................................................ $ 10,812 $ 8,958 $ 7,956
Interest cost on projected benefit obligation..................... 17,842 17,722 17,883
Expected return on plan assets . . . .............................. (172) (324) (436)
Amortization of prior service cost/(credit) . ..................... $(6,101) (10,068) (10,198) (8,157)
Amortization of unrecognized loss ............................. 8,911 7,537 4,424 4,917
Net periodic postretirement benefit cost . . . ..................... $ 25,951 $ 20,582 $22,163
Assumptions used in the computation of annual OPEB costs and valuation of the year-end OPEB
obligations were as follows:
2012 2011 2010
Discount rate—used at year end to value obligation .... 4.00%-4.20% 4.50%-4.75% 5.25%
Discount rate—used to compute annual cost ............ 4.50%-4.75% 5.25% 5.75%
Expected long-term rate of return on plan assets. . ...... 4.00%-3.00% 6.00%-3.00% 6.00%
F-35
FRONTIER COMMUNICATIONS CORPORATION AND SUBSIDIARIES
Notes to Consolidated Financial Statements