Frontier Communications 2010 Annual Report Download - page 101

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members and/or reselling the power to other utility providers or the northeast power grid. There is an active
market for the sale of power. We could potentially lose money if we were unable to sell the power at cost. We
caution that we cannot predict with any degree of certainty any potential outcome.
At December 31, 2010, we have outstanding performance letters of credit as follows:
($ in thousands)
Public Service Commission
of West Virginia. . . . . . . . . $190,000
CNA...................... 38,159
State of New York . . . . . . . . . 1,042
Other...................... 705
Total.................. $229,906
CNA serves as our agent with respect to general liability claims (auto, workers compensation and other
insured perils of the Company). As our agent, they administer all claims and make payments for claims on our
behalf. We reimburse CNA for such services upon presentation of their invoice. To serve as our agent and
make payments on our behalf, CNA requires that we establish a letter of credit in their favor. CNA could
potentially draw against this letter of credit if we failed to reimburse CNA in accordance with the terms of our
agreement. The value of the letter of credit is reviewed annually and adjusted based on claims history.
None of the above letters of credit restrict our cash balances.
F-42
FRONTIER COMMUNICATIONS CORPORATION AND SUBSIDIARIES
Notes to Consolidated Financial Statements