Frontier Communications 2010 Annual Report Download - page 5

amount of Senior Notes due 2020 and $500.0 million aggregate principal amount of Senior Notes due
2022.
On September 8, 2010, we entered into a $190.0 million unsecured letter of credit facility.
•Dividend Policy
During the first half of 2010, we continued to pay cash dividends at an annual rate of $1.00 per common
share. Effective July 1, 2010, our Board of Directors set the annual cash dividend rate at $0.75 per
share. Dividends are subject to applicable law and within the discretion of our Board of Directors.
•Product Growth
During 2010, we added approximately 1,061,200 new High-Speed Internet (HSI) subscribers, including
1,045,000 as a result of the Transaction. At December 31, 2010, we had approximately 1,697,200 HSI
customers. Throughout our properties, we offer a video product through DISH Network (DISH) and
DirecTV and, in addition, we offer fiber optic video services in three states. We added approximately
358,500 video subscribers during 2010, including 345,900 as a result of the Transaction. At December
31, 2010, we had approximately 531,400 video customers.
•Customer Revenue
During 2010, our customer revenue from both residential and business customers for our Frontier legacy
operations was $1,721.7 million, and our average monthly customer revenue per access line improved
by $2.86, or 4%, to $69.89.
•Access Lines
During 2010, our rate of access line loss for our Frontier legacy operations improved from the prior
year, and the rate of access line loss for the acquired Territories improved sequentially from the third
quarter to the fourth quarter of 2010. We believe this is primarily attributable to customer recognition of
the value of our products, services and bundled options, fewer residential moves out of territory, fewer
moves by businesses to competitors and our ability to compete with cable telephony in a maturing
market place.
Communications Services
As of December 31, 2010, we operated as an incumbent local exchange carrier (ILEC) in 27 states.
Our business is with both residential and business customers. Our services include:
•local and long distance voice services;
•data and internet services;
•access services;
•directory services; and
•video services.
Frontier is the incumbent local exchange carrier in almost all of the markets we serve and provides the
“last mile” of telecommunications services to residential and business customers in these markets.
Competitive Strengths
We believe that we are distinguished by the following competitive strengths:
Enhanced scale and scope. Our increased scale and scope following the Transaction allows us to leverage
our common support functions and systems (such as corporate administrative functions, information technology
and network systems) for both operating expense and capital expenditure synergies. See “Management’s
Discussion and Analysis of Financial Condition and Results of Operations—Expected cost savings resulting
from the Merger.”
Broader footprint and greater revenue opportunities. Although prior to the Merger, we operated in 11 of
the 14 states in which the Acquired Business operated, the ILEC footprints of our Frontier legacy business and
the Acquired Business do not overlap. In addition, the customers of the Acquired Business generally have a
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FRONTIER COMMUNICATIONS CORPORATION AND SUBSIDIARIES