Frontier Communications 2009 Annual Report Download - page 41

Future Commitments
A summary of our future contractual obligations and commercial commitments as of December 31, 2009
is as follows:
Contractual Obligations:
($ in thousands) Total 2010 2011-2012 2013-2014 Thereafter
Payment due by period
Long-term debt obligations, excluding
interest................................ $4,884,151 $ 7,236 $ 460,322 $1,310,372 $3,106,221
Interest on long-term debt ................ 4,593,546 362,308 703,055 592,803 2,935,380
Operating lease obligations ............... 64,288 24,417 20,034 12,903 6,934
Purchase obligations ..................... 30,269 11,026 10,828 8,250 165
Liability for uncertain tax positions ....... 56,860 3,454 45,538 7,587 281
Total ............................... $9,629,114 $408,441 $1,239,777 $1,931,915 $6,048,981
At December 31, 2009, we have outstanding performance letters of credit totaling $27.7 million.
Divestitures
On August 24, 1999, our Board of Directors approved a plan to divest our public utilities services
businesses, which included gas, electric and water and wastewater businesses. We have sold all of these
properties. In 2006, we disposed of ELI, our former CLEC business. All of the agreements relating to the sales
provide that we will indemnify the buyer against certain liabilities (typically liabilities relating to events that
occurred prior to sale), including environmental liabilities, for claims made by specified dates and that exceed
threshold amounts specified in each agreement (see Note 21).
Critical Accounting Policies and Estimates
We review all significant estimates affecting our consolidated financial statements on a recurring basis and
record the effect of any necessary adjustment prior to their publication. Uncertainties with respect to such
estimates and assumptions are inherent in the preparation of financial statements; accordingly, it is possible that
actual results could differ from those estimates and changes to estimates could occur in the near term. The
preparation of our financial statements in conformity with U.S. GAAP requires management to make estimates
and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements,
the disclosure of contingent assets and liabilities, and the reported amounts of revenue and expenses during the
reporting period. Estimates and judgments are used when accounting for allowance for doubtful accounts,
impairment of long-lived assets, intangible assets, depreciation and amortization, pension and other
postretirement benefits, income taxes, contingencies and purchase price allocations, among others.
Management has discussed the development and selection of these critical accounting estimates with the
Audit Committee of our Board of Directors and our Audit Committee has reviewed our disclosures relating to
such estimates.
Allowance for Doubtful Accounts
We maintain an allowance for estimated bad debts based on our estimate of collectability of our accounts
receivable through a review of aging categories and specific customer accounts. In 2009 and 2008, we had no
“critical estimates” related to telecommunications bankruptcies.
Asset Impairment
In 2009 and 2008, we had no “critical estimates” related to asset impairments.
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FRONTIER COMMUNICATIONS CORPORATION AND SUBSIDIARIES