Frontier Communications 2008 Annual Report Download - page 4

PART I
Item 1. Business
Frontier Communications Corporation (Frontier) (formerly known as Citizens Communications Company
through July 30, 2008) and its subsidiaries are referred to as the “Company,” “we,” “us” or “our” throughout
this report. Frontier was incorporated in the State of Delaware in 1935 as Citizens Utilities Company.
We are a communications company providing services to rural areas and small and medium-sized towns
and cities. Revenue was $2.2 billion in 2008. Among the highlights for 2008:
•Cash Generation
We continued to generate significant free cash flow through further growth of broadband and value
added services, productivity improvements and a disciplined capital expenditure program that
emphasizes return on investment.
•Stockholder Value
During 2008, we repurchased $200.0 million of our common stock and we continued to pay an annual
dividend of $1.00 per common share.
•Growth
During 2008, we added approximately 57,100 new High-Speed Internet customers (net) and 116,000
customers began buying a bundle or package of our services. At December 31, 2008, we had
approximately 579,900 high-speed data customers and 749,800 customers buying a bundle or package of
services. We also offer a television product in partnership with DISH Network (DISH), and at the end of
2008 we had approximately 119,900 DISH customers.
Our mission is to be the leader in providing communications services to residential and business customers
in our markets. We are committed to delivering innovative and reliable products and solutions with an
emphasis on convenience, service and customer satisfaction. We offer a variety of voice, data and internet, and
television services that are available as bundled or packaged solutions and for some products, a la carte. We
believe that superior customer service and innovative product positioning will continue to differentiate us from
our competitors in the markets in which we compete.
Telecommunications Services
As of December 31, 2008, we operated as an incumbent local exchange carrier (ILEC) in 24 states.
The telecommunications industry is undergoing significant changes and difficulties and our financial
results reflect the impact of this challenging environment. As discussed in more detail in Management’s
Discussion and Analysis of Financial Condition and Results of Operations (MD&A), we operate in an
increasingly challenging environment and, accordingly, our revenues have decreased slightly in 2008.
Our business is primarily with residential customers and, to a lesser extent, business customers. Our
services include:
•access services;
•local services;
•long distance services;
•data and internet services;
•directory services;
•television services; and
•wireless services.
Frontier is typically the leading incumbent carrier in the markets we serve and provides the "last mile" of
telecommunications services to residential and business customers in these markets.
Access services. Switched access services allow other carriers to use our facilities to originate and
terminate their long distance voice and data traffic. These services are generally offered on a month-to-month
3
FRONTIER COMMUNICATIONS CORPORATION AND SUBSIDIARIES