Frontier Communications 2008 Annual Report Download - page 33

New Accounting Pronouncements
The following new accounting standards were adopted by the Company in 2008 without any material
financial statement impact. All of these standards are more fully described in Note 2 to the consolidated
financial statements.
•Accounting for Endorsement Split-Dollar Life Insurance Arrangements (EITF No. 06-4)
•Fair Value Measurements (SFAS No. 157)
•The Fair Value Option for Financial Assets and Financial Liabilities–Including an Amendment of FASB
Statement No. 115 (SFAS No. 159)
•Accounting for Collateral Assignment Split-Dollar Life Insurance Arrangements (EITF No. 06-10)
•Accounting for the Income Tax Benefits of Dividends on Share-Based Payment Awards (EITF No. 06-11)
•The Hierarchy of Generally Accepted Accounting Principles (SFAS No. 162)
The following new accounting standards that will be adopted by the Company in 2009 are currently being
evaluated by the Company, but we do not expect their adoption to have a material impact on our financial
position, results of operations or cash flows.
•Fair Value Measurements (SFAS No. 157), as amended
•Business Combinations (SFAS No. 141R)
•Noncontrolling Interests in Consolidated Financial Statements (SFAS No. 160)
•Determining Whether Instruments Granted in Share-Based Payment Transactions are Participating
Securities (FSP EITF 03-6-1)
•Employers’ Disclosures about Postretirement Benefit Plan Assets (FSP SFAS 132 (R)-1)
(b) Results of Operations
Our historical results include the results of operations of CTE from the date of its acquisition on March 8,
2007 and of GVN from the date of its acquisition on October 31, 2007. Accordingly, results of operations for
2008, 2007 and 2006 are not directly comparable as 2008 results reflect the inclusion of a full year of
operations of CTE and GVN, whereas 2007 results reflect the inclusion of approximately ten months of
operations of CTE and of two months of operations of GVN and 2006 results do not reflect the results of
operations of CTE or GVN.
REVENUE
Revenue is generated primarily through the provision of local, network access, long distance and data and
internet services. Such revenues are generated through either a monthly recurring fee or a fee based on usage at
a tariffed rate and revenue recognition is not dependent upon significant judgments by management, with the
exception of a determination of a provision for uncollectible amounts.
Consolidated revenue for 2008 decreased $51.0 million, or 2%, to $2,237.0 million as compared to 2007.
Excluding additional revenue attributable to the CTE and GVN acquisitions for a full year in 2008 and for a
partial period in 2007, our revenue decreased $107.3 million during 2008, or 5%, as compared to 2007. During
the first quarter of 2007, we had a significant favorable settlement of a carrier dispute that resulted in a
favorable one-time impact to our revenue of $38.7 million. Excluding the additional revenue due to the one-
time favorable settlement in the first quarter of 2007 and the additional revenue attributable to the CTE and
GVN acquisitions in 2008 and 2007, our revenue for the year ended December 31, 2008 declined $68.6 million,
or 3%, as compared to the prior year. This decline is a result of lower local services revenue, subsidy revenue
and switched access revenue, partially offset by a $37.3 million, or 8%, increase in data and internet services
revenue, each as described in more detail below.
Consolidated revenue for 2007 increased $262.6 million, or 13%, to $2,288.0 million as compared to 2006.
Excluding the additional revenue attributable to the CTE and GVN acquisitions in 2007, and the one-time
favorable settlement as referenced above in 2007, our revenue for 2007 was $1,982.7 million, a decrease of
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FRONTIER COMMUNICATIONS CORPORATION AND SUBSIDIARIES