Retirement Plans

6 Months Ended

Jun. 30, 2022

Retirement Plans [Abstract]

Retirement Plans

(15) Retirement Plans:

Frontier recognizes actuarial gains (losses) for our pension and postretirement plans in the period they occur. The components of net periodic benefit cost other than the service cost component for our plans as well as any actuarial gains or losses are included in “Investment and other income (loss)” on the consolidated statement of income.

The following tables provide the components of total pension benefit cost:

	Successor		Successor		Predecessor
	Pension Benefits
	For the three months ended June 30,		For the two months ended June 30,		For the one month ended April 30,
($ in millions)	2022		2021		2021
Components of total pension benefit cost
Service cost	$	20	$	13	$	8
Interest cost on projected benefit obligation		25		18		8
Expected return on plan assets		(50)		(31)		(16)
Amortization of unrecognized loss		-		-		6
Total pension (benefit) cost	$	(5)	$	-	$	6
	Successor		Successor		Predecessor
	Pension Benefits
	For the six months ended June 30,		For the two months ended June 30,		For the four months ended April 30,
($ in millions)	2022		2021		2021
Components of total pension benefit cost
Service cost	$	41	$	13	$	32
Interest cost on projected benefit obligation		49		18		31
Expected return on plan assets		(99)		(31)		(61)
Amortization of unrecognized loss		-		-		24
Total pension (benefit) cost	$	(9)	$	-	$	26

The components of net periodic benefit cost other than the service cost component are included in “Investment and other income” on the consolidated statement of income.

The value of our pension plan assets decreased $545 million from $2,655 million at December 31, 2021 to $2,110 million at June 30, 2022. This decrease primarily resulted from changes in the market value of investments of $506 million including plan expenses, and benefit payments to participants of $113 million, partially offset by contributions of $74 million.

‎

The following tables provide the components of total postretirement benefit cost:

	Successor		Successor		Predecessor
	Postretirement
	For the three months ended June 30,		For the two months ended June 30,		For the one month ended April 30,
($ in millions)	2022		2021		2021
Components of net periodic postretirement benefit cost
Service cost	$	3	$	3	$	2
Interest cost on projected benefit obligation		8		5		2
Amortization of prior service (benefit)		(3)		(1)		(3)
Remeasurement (gain) loss		(96)		13		-
Amortization of unrecognized loss		-		-		2
Net periodic postretirement (benefit) cost	$	(88)	$	20	$	3
	Successor		Successor		Predecessor
	Postretirement
	For the six months ended June 30,		For the two months ended June 30,		For the four months ended April 30,
($ in millions)	2022		2021		2021
Components of net periodic postretirement benefit cost
Service cost	$	7	$	3	$	7
Interest cost on projected benefit obligation		14		5		9
Amortization of prior service (benefit)		(6)		(1)		(10)
Remeasurement (gain) loss		(150)		13		-
Amortization of unrecognized loss		-		-		5
Net periodic postretirement (benefit) cost	$	(135)	$	20	$	11

In the first half of 2022, Frontier amended the medical coverage for certain postretirement benefit plans, which necessitated a remeasurement of its other postretirement benefit (OPEB) obligations. This remeasurement resulted in the recognition of a net actuarial gain of $150 million, which was driven primarily from a higher assumed discount rate relative to December 31, 2021. Upon emergence from bankruptcy, Frontier revised its accounting policy to recognize actuarial gains and losses in the period in which they occur. As such, this gain was recorded in “Investment and other income, net” on our consolidated statements of income.

During the six months ended June 30, 2022, we capitalized $11 million of pension and OPEB expense into the cost of our capital expenditures, as the costs relate to our engineering and plant construction activities. During the one month and four months of April 30, 2021, we capitalized $1 million and $7 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. During the two months ended June 30, 2021, we capitalized $4 million of pension and OPEB expense.