Frontier Communications 2005 Annual Report Download - page 24

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22
CITIZENS COMMUNICATIONS COMPANY AND SUBSIDIARIES
ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
FORWARD-LOOKING STATEMENTS
This annual report on Form 10-K contains forward-looking statements that are subject to risks and uncertainties
that could cause actual results to differ materially from those expressed or implied in the statements. Statements that
are not historical facts are forward-looking statements made pursuant to the Safe Harbor Provisions of the Litigation
Reform Act of 1995. Words such as “believes,” “anticipates,” “expects” and similar expressions are intended to
identify forward-looking statements. Forward-looking statements (including oral representations) are only predictions
or statements of current plans, which we review continuously. Forward-looking statements may differ from actual
future results due to, but not limited to, and our future results may be materially affected by, any of the following
possibilities:
• Changes in the number of our revenue generating units, which consists of access lines plus high-speed
internet subscribers;
• The effects of competition from wireless, other wireline carriers (through voice over internet protocol
(VOIP) or otherwise), high speed cable modems and cable telephony;
• The effects of general and local economic and employment conditions on our revenues;
• Our ability to effectively manage our operations, costs, capital spending, regulatory compliance and
service quality;
• Our ability to successfully introduce new product offerings including our ability to offer bundled service
packages on terms that are both profitable to us and attractive to our customers;
• Our ability to sell enhanced and data services in order to offset ongoing declines in revenue from local
services, access services and subsidies;
• Our ability to comply with Section 404 of the Sarbanes-Oxley Act of 2002, which requires management
to assess its internal control systems and disclose whether the internal control systems are effective, and
the identification of any material weaknesses in our internal control over financial reporting;
• Changes in accounting policies or practices adopted voluntarily or as required by generally accepted
accounting principles or regulators;
• The effects of changes in regulation in the communications industry as a result of federal and state
legislation and regulation, including potential changes in access charges and subsidy payments, and
regulatory network upgrade and reliability requirements;
• Our ability to comply with federal and state regulation (including state rate of return limitations on our
earnings) and our ability to successfully renegotiate state regulatory plans as they expire or come up for
renewal from time to time;
• Our ability to manage our operating expenses, capital expenditures, pay dividends and reduce or refinance
our debt;
• Adverse changes in the ratings given to our debt securities by nationally accredited ratings organizations,
which could limit or restrict the availability, and/or increase the cost of financing;
• The effects of greater than anticipated competition requiring new pricing, marketing strategies or new
product offerings and the risk that we will not respond on a timely or profitable basis;
• The effects of bankruptcies in the telecommunications industry which could result in more price
competition and potential bad debts;
• The effects of technological changes and competition on our capital expenditures and product and service
offerings, including the lack of assurance that our ongoing network improvements will be sufficient to
meet or exceed the capabilities and quality of competing networks;