Frontier Communications 2009 Annual Report Download - page 78

(4) Property, Plant and Equipment:
The components of property, plant and equipment at December 31, 2009 and 2008 are as follows:
($ in thousands)
Estimated
Useful Lives 2009 2008
Land . . . .................................................... N/A $ 22,416 $ 22,631
Buildings and leasehold improvements ....................... 41 years 348,002 344,839
General support . . ........................................... 5 to 17 years 517,958 508,825
Central office/electronic circuit equipment .................... 5 to 11 years 3,042,665 2,959,440
Cable and wire . . ........................................... 15 to 60 years 3,730,998 3,623,193
Other. . . .................................................... 20 to 30 years 24,368 24,703
Construction work in progress ............................... 116,655 97,429
7,803,062 7,581,060
Less: Accumulated depreciation.............................. (4,669,541) (4,341,087)
Property, plant and equipment, net . . . ........................ $ 3,133,521 $ 3,239,973
Depreciation expense is principally based on the composite group method. Depreciation expense was
$362.2 million, $379.5 million and $374.4 million for the years ended December 31, 2009, 2008 and 2007,
respectively. Effective with the completion of an independent study of the estimated useful lives of our plant
assets we adopted new lives beginning October 1, 2009.
(5) Accounts Receivable:
The components of accounts receivable, net at December 31, 2009 and 2008 are as follows:
($ in thousands) 2009 2008
End user. . . .................................................... $205,384 $244,395
Other .......................................................... 15,532 17,977
Less: Allowance for doubtful accounts . . ........................ (30,171) (40,125)
Accounts receivable, net . .................................. $190,745 $222,247
An analysis of the activity in the allowance for doubtful accounts for the years ended December 31, 2009,
2008 and 2007 is as follows:
Allowance for doubtful accounts
Balance at
beginning of
Period
Balance of
acquired
properties
Charged to
bad debt
expense*
Charged to other
accounts—
Revenue Deductions
Balance at
end of
Period
Additions
2007. . . ...................... $108,537 $1,499 $31,131 $(77,898) $30,521 $32,748
2008. . . ...................... $ 32,748 $1,150 $31,700 $ 2,352 $27,825 $40,125
2009. . . ...................... $ 40,125 $ — $33,682 $ (6,181) $37,455 $30,171
*Such amounts are included in bad debt expense and for financial reporting purposes are classified as contra-
revenue.
We maintain an allowance for estimated bad debts based on our estimate of our ability to collect our
accounts receivable. Bad debt expense is recorded as a reduction to revenue.
Our allowance for doubtful accounts (and “end user” receivables) declined in 2007, primarily as a result of
the resolution of a principal carrier dispute. On March 12, 2007, we entered into a settlement agreement with a
carrier pursuant to which we were paid $37.5 million, resulting in a favorable impact on our revenue in the first
quarter of 2007 of $38.7 million.
F-16
FRONTIER COMMUNICATIONS CORPORATION AND SUBSIDIARIES
Notes to Consolidated Financial Statements