Retirement Plans

6 Months Ended

Jun. 30, 2012

Retirement Plans [Abstract]

Retirement Plans

(16) Retirement Plans:

The following tables provide the components of net periodic benefit cost:

	Pension Benefits						Pension Benefits
	For the three months ended						For the six months ended
	June 30,						June 30,
	2012			2011			2012			2011
($ in thousands)
Components of net periodic pension benefit cost
Service cost	$	10,492		$	9,615		$	20,984		$	19,230
Interest cost on projected benefit obligation		19,658			21,172			39,316			42,344
Expected return on plan assets		(24,089	)		(25,589	)		(48,178	)		(51,178	)
Amortization of prior service cost /(credit)		(50	)		(50	)		(100	)		(100	)
Amortization of unrecognized loss		7,787			4,435			15,574			8,870
Net periodic pension benefit cost	$	13,798		$	9,583		$	27,596		$	19,166

		Postretirement Benefits						Postretirement Benefits
		Other Than Pensions (OPEB)						Other Than Pensions (OPEB)
		For the three months ended						For the six months ended
		June 30,						June 30,
		2012			2011			2012			2011
($ in thousands)
Components of net periodic postretirement benefit cost
Service cost	$	2,555		$	4,228		$	5,110		$	8,456
Interest cost on projected benefit obligation		4,460			6,328			8,920			12,656
Expected return on plan assets		(55	)		(82	)		(110	)		(164	)
Amortization of prior service cost/(credit)		(2,503	)		(2,550	)		(5,006	)		(5,100	)
Amortization of unrecognized loss		1,911			1,499			3,822			2,998
Net periodic postretirement benefit cost	$	6,368		$	9,423		$	12,736		$	18,846

During the first six months of 2012 and 2011, we capitalized $8.0 million and $6.8 million, respectively, of pension and OPEB expense into the cost of our capital expenditures, as the costs relate to our engineering and plant construction activities.  Based on current assumptions and plan asset values, we estimate that our 2012 pension and OPEB expenses will be between $75 million and $85 million before amounts capitalized into the cost of capital expenditures (they were $58.3 million in 2011 before amounts capitalized into the cost of capital expenditures).   We expect to make net contributions to our pension plan of approximately $30 million to $40 million in 2012, which reflects the positive impact of funding rate changes contained in the Highway Investment Act of 2012.

In connection with the completion of the Transaction 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 $438.8 million were transferred into the Plan during the second half of 2010 and assets of $106.9 million were transferred into the Plan in August 2011.  Additionally, $25.5 million of assets were transferred into the Plan during the first half of 2012.  

The Plan's assets have increased from $1,258.0 million at December 31, 2011 to $1,271.6 million at June 30, 2012, an increase of $13.6 million, or 1%.  This increase is a result of positive investment returns, cash contributions, and additional asset transfers from Verizon for a combined total of $95.9 million, less benefit payments of $82.3 million during the first six months of 2012.