Frontier Communications 2012 Annual Report Download - page 77

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The components of other intangibles at December 31, 2012 and 2011 are as follows:
($ in thousands) 2012 2011
Other Intangibles:
Customer base . . ......................................... $ 2,427,648 $2,697,413
Software licenses ........................................ 105,019 105,019
Trade name and license . . ................................ 124,419 135,285
Other intangibles ...................................... 2,657,086 2,937,717
Less: Accumulated amortization . . . ....................... (1,114,347) (973,212)
Total other intangibles, net............................. $ 1,542,739 $1,964,505
Amortization expense was $422.2 million, $521.7 million and $294.1 million for the years ended
December 31, 2012, 2011 and 2010, respectively. Amortization expense for 2012, 2011 and 2010 of $410.8
million, $465.4 million and $237.8 million, respectively, primarily represents the amortization of intangible
assets (primarily customer base) that were acquired in the Transaction based on a fair value of $2.5 billion and
a useful life of nine years for the residential customer base and 12 years for the business customer base,
amortized on an accelerated method. Amortization expense for 2012, 2011 and 2010 included $11.4 million,
$56.3 million and $56.3 million, respectively, for amortization associated with certain Frontier legacy
properties, which were fully amortized in 2012. Amortization expense, based on our current estimate of useful
lives, is estimated to be approximately $330 million in 2013, $285 million in 2014, $240 million in 2015, $195
million in 2016, and $150 million in 2017.
(7) Long-Term Debt:
The activity in our long-term debt from December 31, 2011 to December 31, 2012 is summarized as
follows:
($ in thousands)
December 31,
2011
Payments
and
Retirements
New
Borrowings
December 31,
2012
Interest
Rate at
December 31,
2012*
Year Ended
December 31, 2012
Senior Unsecured Debt . . . ............... $8,325,774 $(756,078) $1,350,000 $8,919,696 7.86%
Industrial Development Revenue Bonds . . 13,550 — — 13,550 6.33%
Rural Utilities Service Loan Contracts.... 10,197 (875) — 9,322 6.15%
TOTAL LONG-TERM DEBT.......... $8,349,521 $(756,953) $1,350,000 $8,942,568 7.85%
Less: Debt Discount..................... (31,113) (71)
Less: Current Portion.................... (94,016) (560,550)
$8,224,392 $8,381,947
*Interest rate includes amortization of debt issuance costs and debt premiums or discounts. The interest rates at
December 31, 2012 represent a weighted average of multiple issuances.
F-16
FRONTIER COMMUNICATIONS CORPORATION AND SUBSIDIARIES
Notes to Consolidated Financial Statements