Frontier Communications 2013 Annual Report Download - page 32

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•The effects of changes in accounting policies or practices adopted voluntarily or as required by
generally accepted accounting principles or regulations;
•Our ability to effectively manage our operations, operating expenses and capital expenditures, and to
repay, reduce or refinance our debt;
•The effects of changes in both general and local economic conditions on the markets that we serve,
which can affect demand for our products and services, customer purchasing decisions, collectability of
revenues and required levels of capital expenditures related to new construction of residences and
businesses;
•The effects of technological changes and competition on our capital expenditures, products and service
offerings, including the lack of assurance that our network improvements in speed and capacity will be
sufficient to meet or exceed the capabilities and quality of competing networks;
•The effects of increased medical expenses (including as a result of the impact of the Patient Protection
and Affordable Care Act) and pension and postemployment expenses, such as retiree medical and
severance costs, and related funding requirements;
•The effects of changes in income tax rates, tax laws, regulations or rulings, or federal or state tax
assessments;
•Our ability to successfully renegotiate union contracts;
•Changes in pension plan assumptions and/or the value of our pension plan assets which could require us
to make increased contributions to the pension plan in 2014 and beyond;
•The effects of economic downturns, including customer bankruptcies and home foreclosures, which
could result in difficulty in collection of revenues and loss of customers;
•Adverse changes in the credit markets or in the ratings given to our debt securities by nationally
accredited ratings organizations, which could limit or restrict the availability, or increase the cost, of
financing to us;
•Our cash flow from operations, amount of capital expenditures, debt service requirements, cash paid for
income taxes and liquidity may affect our payment of dividends on our common shares;
•The effects of state regulatory cash management practices that could limit our ability to transfer cash
among our subsidiaries or dividend funds up to the parent company; and
•The effects of severe weather events such as hurricanes, tornadoes, ice storms or other natural or man-
made disasters.
Any of the foregoing events, or other events, could cause financial information to vary from
management’s forward-looking statements included in this report. You should consider these important
factors, as well as the risks set forth under Item 1A. “Risk Factors,” in evaluating any statement in this report
on Form 10-K or otherwise made by us or on our behalf. The following information is unaudited and should be
read in conjunction with the consolidated financial statements and related notes included in this report. We
have no obligation to update or revise these forward-looking statements and do not undertake to do so.
Investors should also be aware that while we do, at various times, communicate with securities analysts, it
is against our policy to disclose to them selectively any material non-public information or other confidential
information. Accordingly, investors should not assume that we agree with any statement or report issued by an
analyst irrespective of the content of the statement or report. To the extent that reports issued by securities
analysts contain any projections, forecasts or opinions, such reports are not our responsibility.
(a) Liquidity and Capital Resources
As of December 31, 2013, we had cash and cash equivalents aggregating $880.0 million, excluding total
restricted cash, primarily representing funds escrowed for future broadband expansion and service quality
initiatives, of $13.4 million. Our primary source of funds continued to be cash generated from operations. For
the year ended December 31, 2013, we used cash flow from operations, cash on hand and debt proceeds to
31
FRONTIER COMMUNICATIONS CORPORATION AND SUBSIDIARIES