FairPoint Communications 2009 Annual Report Download - page 153

Table of Contents
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Prior to the Merger, Verizon and its domestic subsidiaries, including the operations of the Verizon Companies, filed a consolidated federal income
tax return and combined state income tax returns in the states of Maine, New Hampshire and Vermont. The operations of the Verizon Companies,
including the Verizon Northern New England business, for periods prior to the Merger were included in a Tax Sharing Agreement with Verizon and
were allocated tax payments based on the respective tax liability as if they were filing on a separate company basis. Current and deferred tax expense
was determined by applying the provisions of the Income Taxes Topic of the ASC to each company as if it were a separate taxpayer.
The Verizon Northern New England business used the deferral method of accounting for investment tax credits earned prior to the repeal of
investment tax credits by the Tax Reform Act of 1986. The Verizon Northern New England business also deferred certain transitional credits earned
after the repeal and amortized these credits over the estimated service lives of the related assets as a reduction to the provision for income taxes.
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Changes in the components of accumulated other comprehensive income were as follows (in thousands):
Defined benefit pension and post-retirement plan activity during 2008 included $49.5 million (net of $32.8 million taxes) in connection with the
Merger, which is reflected as a reduction to Accumulated Other Comprehensive Loss. This amount represents the allocation of previously existing plan
assets, obligations and prior service costs to the surviving benefit plans upon Merger. Other Comprehensive Loss for the years ended December 31,
2009 and 2008 also includes amortization of defined benefit pension and post-retirement plan related prior service costs and actuarial gains and losses
included in Accumulated Other Comprehensive Loss.
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    
Accumulated other comprehensive loss, net of taxes:
Defined benefit pension and post-retirement plans $ (124,924) $ (134,504)
Total other accumulated comprehensive loss $ (124,924) $ (134,504)