Frontier Communications 2011 Annual Report Download - page 40

FRONTIER COMMUNICATIONS CORPORATION AND SUBSIDIARIES
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and will depend upon many factors, including our financial condition, results of operations, growth prospects, funding
requirements, applicable law, restrictions in agreements governing our indebtedness and other factors our Board of Directors
deem relevant.
Off-Balance Sheet Arrangements
We do not maintain any off-balance sheet arrangements, transactions, obligations or other relationships with unconsolidated
entities.
Future Commitments
A summary of our future contractual obligations and commercial commitments as of December 31, 2011 is as follows:
Contractual Obligations:
($ in thousands)
Total 2012 2013-2014 2015-2016 Thereafter
Long-term debt obligations,
excluding interest 8,349,521$ 94,016$ 1,296,784$ 1,203,515$ 5,755,206$
Interest on long-term debt 6,555,981 651,393 1,217,474 1,031,349 3,655,765
Operating lease obligations 128,502 66,000 34,017 11,051 17,434
Financing lease obligations 85,682 4,957 10,226 10,681 59,818
Purchase obligations 53,692 27,488 25,342 862 -
Liability for uncertain tax positions 37,491 17,797 11,494 8,200 -
Total 15,210,869$ 861,651$ 2,595,337$ 2,265,658$ 9,488,223$
Payment due by period
At December 31, 2011, we had outstanding performance letters of credit totaling $145.2 million.
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, impairment of 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 our ability to collect accounts receivable through
a review of aging categories and specific customer accounts. In 2011 and 2010, we had no “critical estimates” related to
bankruptcies of telecommunications companies or any other customers.
Asset Impairment
We review long-lived assets to be held and used, including customer lists, and long-lived assets to be disposed of for
impairment whenever events or changes in circumstances indicate that the carrying amount of such assets may not be
recoverable. Recoverability of assets to be held and used is measured by comparing the carrying amount of the asset to the
future undiscounted net cash flows expected to be generated by the asset. Recoverability of assets held for sale is measured by
comparing the carrying amount of the assets to their estimated fair market value. If any assets are considered to be impaired,
the impairment is measured by the amount by which the carrying amount of the assets exceeds the estimated fair value. Also,