Frontier Communications 2013 Annual Report Download - page 17

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We may not realize the cost synergies that are anticipated from the AT&T Transaction.
The success of the AT&T Transaction will depend, in part, on our ability to realize anticipated cost
synergies. The Company’s success in realizing these cost synergies, and the timing of this realization, depends
on the successful integration of our business and operations with the acquired business and operations. Even if
the Company is able to integrate the Frontier and acquired businesses and operations successfully, this
integration may not result in the realization of the full benefits of the cost synergies that Frontier currently
expects within the anticipated time frame or at all.
If the assets included in the business to be purchased from AT&T are insufficient to operate the
acquired business, it could adversely affect the Company’s business, financial condition and results of
operations.
Pursuant to the stock purchase agreement executed in connection with the AT&T Transaction, AT&T will
contribute to the acquired business certain assets and liabilities of its local exchange business and related
landline activities in Connecticut, including video, broadband internet and switched long distance services
provided to designated customers located in Connecticut. However, the contributed assets may not be sufficient
to operate all aspects of the acquired business and the Company may have to use assets or resources from our
existing business or acquire additional assets in order to operate the acquired business, which could cost the
Company more than we anticipate.
Pursuant to the stock purchase agreement, we have certain rights to cause AT&T to transfer to us any
assets required to be included in the acquired business that were not contributed as required. If AT&T is unable
or unwilling to transfer those assets to the Company, or if AT&T and Frontier disagree about whether those
assets were required to be contributed to the acquired business under the stock purchase agreement, the
Company might not be able to obtain those assets or similar assets from others without significant additional
costs or at all, which could adversely affect the Company’s business, financial condition and results of
operations.
The Company’s business, financial condition and results of operations may be adversely affected
following consummation of the AT&T Transaction if the Company is not able to obtain requisite consents or
enter into certain agreements.
The products and services of the acquired business are currently provided by AT&T to certain customers
pursuant to master agreements, together with other AT&T products or services. Pursuant to the stock purchase
agreement, we and AT&T have jointly agreed to use our reasonable best efforts for six months following the
consummation of the AT&T Transaction to obtain any consents required to separate from such master
agreements and assign to Frontier the portion thereof related to the acquired business. To the extent that the
parties are not able to obtain any such required consent, such contracts will not be assigned to us and we may
not be able to establish a direct relationship with such customers.
Frontier must also enter into agreements and obtain consents related to, among other things, video
transport and content, in order to provide video services to customers in Connecticut following consummation
of the AT&T Transaction. In the event Frontier is not able to enter into such agreements or obtain such
consents, AT&T has agreed to arrange for such services to be provided to Frontier until October 1, 2014. If we
are not able to enter into the video transport and content agreements and obtain the related consents by
October 1, 2014, we may not be able to provide such services to customers in Connecticut following
consummation of the AT&T Transaction, which could have an adverse impact on our business, financial
condition and results of operations.
Regulatory agencies may delay approval of the AT&T Transaction, fail to approve it, or approve it in a
manner that may diminish the anticipated benefits of the AT&T Transaction.
Completion of the AT&T Transaction is conditioned upon the receipt of certain government consents,
approvals, orders and authorizations. While we intend to pursue vigorously all required governmental approvals
and do not know of any reason why we would not be able to obtain the necessary approvals in a timely manner,
the requirement to receive these approvals before completion of the AT&T Transaction could delay its
completion. A lengthy delay in the completion of the AT&T Transaction could diminish the anticipated
benefits and/or result in additional transaction and financing costs, loss of revenues or other effects associated
16
FRONTIER COMMUNICATIONS CORPORATION AND SUBSIDIARIES