Frontier Communications 2014 Annual Report Download - page 98

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The plan’s expected benefit payments over the next 10 years are as follows:
($ in thousands)
Amount
2015 $ 129,826
2016 135,899
2017 138,216
2018 141,248
2019 144,486
2020-2024 750,181
Total $1,439,856
We made total cash contributions to our pension plan during 2014 of $83 million. Our 2014 total
contributions reflect the impact of the extension of funding relief included in the Highway and
Transportation Funding Act of 2014.
During 2013, the Company contributed four real estate properties to its qualified defined benefit
pension plan. The pension plan obtained independent appraisals of the properties and, based on these
appraisals, the pension plan recorded the contributions at their fair value of $23 million. The Company
has entered into leases for the contributed properties with initial terms of 15 years at a combined
aggregate annual rent of approximately $2 million. The properties are managed on behalf of the
pension plan by an independent fiduciary, and the terms of the leases were negotiated with the
fiduciary on an arm’s-length basis.
We made total contributions to our pension plan during 2013 of $62 million, consisting of cash
payments of $39 million and the contribution of real property with a fair value of $23 million, as
described above.
We made total net cash contributions to our pension plan for 2012 of $29 million. These pension
contributions reflect the positive impact of funding rate changes contained in the Highway Investment
Act of 2012 and guidance from the IRS on August 16, 2012 related to valuation rates, and on
September 11, 2012 related to lump sum methodologies.
The accumulated benefit obligation for the plan was $2,094 million and $1,560 million at
December 31, 2014 and 2013, respectively.
Assumptions used in the computation of annual pension costs and valuation of the year-end
obligations were as follows:
2014 2013 2012
Discount rate—used at year end to value obligation . . . . . . . . . . . . . . . . 4.10% 4.90% 4.00%
Discount rate—used to compute annual cost . . . . . . . . . . . . . . . . . . . . . . . 4.90% 4.00% 4.50%
Expected long-term rate of return on plan assets . . . . . . . . . . . . . . . . . . . 7.75% 8.00% 7.75%
Rate of increase in compensation levels . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.50% 2.50% 2.50%
F-37
FRONTIER COMMUNICATIONS CORPORATION AND SUBSIDIARIES
Notes to Consolidated Financial Statements