Frontier Communications 2008 Annual Report Download - page 66

03-6-1 is effective, on a retrospective basis, for financial statements issued for fiscal years beginning after
December 15, 2008, and interim periods within those years. The Company has concluded that our outstanding
non-vested restricted stock is a participating security in accordance with FSP EITF 03-6-1 and that we will be
required to adjust our previously reported basic and diluted income per common share. The Company expects
that our adoption of FSP EITF 03-6-1 in the first quarter of 2009 will increase our weighted average shares
outstanding and will reduce our basic and diluted income per common share from that previously reported.
Employers’ Disclosures about Postretirement Benefit Plan Assets
In December 2008, the FASB issued FSP SFAS 132 (R)-1, “Employers’ Disclosures about Postretirement
Benefit Plan Assets.” FSP SFAS 132 (R)-1 amends SFAS No. 132, “Employers’ Disclosures about Pensions
and Other Postretirement Benefits,” to provide guidance on an employers’ disclosures about plan assets of a
defined benefit pension or other postretirement plan. FSP SFAS 132 (R)-1 requires additional disclosures about
investment policies and strategies, categories of plan assets, fair value measurements of plan assets and
significant concentrations of risk. The disclosures about plan assets required by FSP SFAS 132 (R)-1 are
effective for fiscal years ending after December 15, 2009. We do not expect the adoption of FSP SFAS 132
(R)-1 to have a material impact on our financial position, results of operations or cash flows. We will adopt the
disclosure requirements of FSP SFAS 132 (R)-1 in the annual report for our fiscal year ending December 31,
2009.
(3) Acquisition of Commonwealth Telephone and Global Valley Networks:
On March 8, 2007, we acquired Commonwealth Telephone Enterprises, Inc. (“Commonwealth” or “CTE”)
in a cash-and-stock taxable transaction, for a total consideration of approximately $1.1 billion. We paid $804.1
million in cash ($663.7 million net, after cash acquired) and issued common stock with a value of $249.8
million.
On October 31, 2007, we acquired Global Valley Networks, Inc. and GVN Services (together GVN)
through the purchase from Country Road Communications, LLC of 100% of the outstanding common stock of
Evans Telephone Holdings, Inc., the parent Company of GVN. The purchase price of $62.0 million was paid
with cash on hand.
We have accounted for the acquisitions of Commonwealth and GVN as purchases under U.S. GAAP.
Under the purchase method of accounting, the assets and liabilities of Commonwealth and GVN are recorded as
of their respective acquisition dates, at their respective fair values, and consolidated with those of Frontier. The
reported consolidated financial condition of Frontier as of December 31, 2008, reflects the final allocation of
these fair values for Commonwealth and GVN.
The following schedule provides a summary of the final purchase price paid by Frontier in the acquisitions
of Commonwealth and GVN:
($ in thousands) Commonwealth GVN
Cash paid ................................................... $ 804,085 $62,001
Value of Frontier common stock issued....................... 249,804 —
Accrued closing costs........................................ 469 —
Total Purchase Price ......................................... $1,054,358 $62,001
F-15
FRONTIER COMMUNICATIONS CORPORATION AND SUBSIDIARIES
Notes to Consolidated Financial Statements