Frontier Communications 2010 Annual Report Download - page 73

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financial information is not indicative of, nor does it purport to project, the future financial position or
operating results of Frontier. The unaudited pro forma financial information excludes acquisition and
integration costs and does not give effect to any estimated and potential cost savings or other operating
efficiencies that could result from the Merger.
UNAUDITED PRO FORMA CONDENSED COMBINED
STATEMENTS OF OPERATIONS INFORMATION
($ in millions, except per share amounts) 2010 2009
For the year ended
December 31,
Revenue .......................................................... $5,652 $6,071
Operating income.................................................. $1,192 $1,373
Net income attributable to common shareholders of Frontier . . . . . . . . . $ 324 $ 433
Basic and diluted net income per common share attributable to
common shareholders of Frontier . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 0.33 $ 0.44
(4) Property, Plant and Equipment:
The components of property, plant and equipment at December 31, 2010 and 2009 are as follows:
($ in thousands)
Estimated
Useful Lives 2010 2009
Land....................................................... N/A $ 133,366 $ 22,416
Buildings and leasehold improvements . . . . . . . . . . . . . . . . . . . . . . . 41 years 1,131,787 348,002
General support . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5 to 17 years 604,524 517,958
Central office/electronic circuit equipment . . . . . . . . . . . . . . . . . . . 5 to 11 years 4,319,795 3,042,665
Cable and wire . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15 to 60 years 6,227,851 3,730,998
Other ...................................................... 20 to 30 years 29,184 24,368
Construction work in progress . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 348,773 116,655
Property, plant and equipment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12,795,280 7,803,062
Less: Accumulated depreciation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (5,204,666) (4,669,541)
Property, plant and equipment, net. . . . . . . . . . . . . . . . . . . . . . . . . . . $ 7,590,614 $ 3,133,521
Depreciation expense is principally based on the composite group method. Depreciation expense was
$599.7 million, $362.2 million and $379.5 million for the years ended December 31, 2010, 2009 and 2008,
respectively. Effective upon the completion of an independent study of the estimated remaining useful lives of
our Frontier legacy plant assets, we adopted new lives for certain plant assets as of October 1, 2010. In
addition, we commissioned an independent study to determine the estimated remaining useful lives for our
recently Acquired Business. These new lives were adopted effective July 1, 2010.
(5) Accounts Receivable:
The components of accounts receivable, net at December 31, 2010 and 2009 are as follows:
($ in thousands) 2010 2009
End user....................................................... $627,573 $205,384
Other.......................................................... 14,306 15,532
Less: Allowance for doubtful accounts . . . . . . . . . . . . . . . . . . . . . . . . . . (73,571) (30,171)
Accounts receivable, net. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $568,308 $190,745
F-14
FRONTIER COMMUNICATIONS CORPORATION AND SUBSIDIARIES
Notes to Consolidated Financial Statements