Frontier Communications 2011 Annual Report Download - page 7

FRONTIER COMMUNICATIONS CORPORATION AND SUBSIDIARIES
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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 profile similar in characteristics such as
age, income and property ownership to our legacy customers. We therefore have a broader operating footprint that
provides greater revenue opportunities through the expansion of our existing operating strategies into the acquired
Territories, through greater broadband penetration and through new product and services offerings in the acquired
Territories.
Strong financial profile. For the year ended December 31, 2011, we generated revenue of approximately $5.2 billion and
net cash from operating activities of approximately $1.6 billion. We have a well-balanced debt maturity schedule and we
have available liquidity of over $1 billion, comprised of cash and available credit on our $750 million Revolving Credit
Facility. On February 16, 2012, the Board of Directors set the annual cash dividend at $0.40 per share. This represents a
$0.35 per share reduction from the most recent dividend of $0.75 per share. The reduction in dividend will result in an
annual cash savings of approximately $348 million. We believe this change will strengthen our balance sheet by allowing
us to reduce our debt, improve our operational and financial flexibility and strengthen the overall financial profile of the
Company.
Experienced management team with proven track record of successful business integration. We are managed by a senior
management team with a proven track record of successful business integration. This is demonstrated by the team’s
integration of former GTE Corporation, Global Crossing, Commonwealth and GVN properties, the integration of the West
Virginia operations of the Acquired Business prior to the closing of the Transaction, the integration of four additional states
of the Acquired Business on October 1, 2011 and the integration of 13 Acquired Business states onto the Company’s legacy
financial, human resources and engineering systems on October 1, 2011, along with the team’s consolidation of five billing
systems covering 2.1 million access lines into a single system for Frontier legacy operations over the past eight years.
Company Strategies
The key elements of our strategy are as follows:
Enhance customer loyalty through local engagement. We will continue our strategy of engaging the markets at the local
level to ensure that we have a customer-driven sales and service focus that differentiates us from our competitors. Our local
markets are operated by local managers responsible for the customer experience, as well as the financial results, in those
markets. We invest in infrastructure improvements and enhancements each year, recognizing that the economic livelihood
of the communities we serve will affect opportunities to grow the business. We therefore have a vested interest in the
economic development of the communities we serve. We are also continuing our community involvement practices to
create a competitive advantage through long-term customer loyalty. We remain committed to providing best-in-class
service throughout our markets and, by doing so, we expect to maximize retention of current customers and gain new
customers.
Increase revenue per customer. We continue to apply the sales and marketing practices that we have historically
employed throughout our markets, including the sale of voice, data and video services as bundled packages and the use of
promotions and incentives to drive market share. We believe these marketing strategies yield increased revenue per
customer, strengthened customer relationships and improved customer retention. We tailor our services to the needs of our
residential and business customers in the markets we serve and continually evaluate the introduction of new and
complimentary products and services. We are increasing broadband availability to the customer base in the acquired
Territories and, through innovative packages and promotions, plan to improve subscription rates for broadband services.
We continue to provide direct broadcast satellite services from DirecTV and DISH, fiber optic video services in certain
states and over-the-top internet video on our www.TumTiki.com website that launched in November 2011. As we strive to
provide consumers with a diverse range of communications services, we continuously evaluate the viability of other
communications product alliances. In addition, we have implemented, and will continue to implement, several growth
initiatives, including launching new products and services with a focus on areas that are growing or demonstrate
meaningful demand, such as wireless HSI, satellite video products, Internet advertising and “Frontier Secure” computer
security and technical support. We will continue to focus on growing those products and services and to offer new ones,
should we determine that they would be attractive to our customers.