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constitutes effective internal control. We plan to adopt the 2013 Framework in 2014 and do not expect that it
will have a significant impact on the Company.
(3) The Transactions:
The 2010 Transaction
On July 1, 2010, the Company acquired the defined assets and liabilities of the local exchange business
and related landline activities of Verizon Communications Inc. (Verizon) in 14 states (the Acquired Territories),
including Internet access and long distance services and broadband video provided to designated customers in
the Acquired Territories (the 2010 Acquired Business). Frontier was considered the acquirer of the 2010
Acquired Business for accounting purposes.
The Company accounted for its acquisition of the 2010 Acquired Business (the 2010 Transaction) using
the guidance included in ASC Topic 805. We incurred $81.7 million and $143.1 million of integration related
costs in connection with the 2010 Transaction during the years ended December 31, 2012 and 2011,
respectively. Such costs are required to be expensed as incurred and are reflected in “Acquisition and
integration costs” in our consolidated statements of operations. All integration activities for the 2010
Transaction were completed as of the end of 2012.
The AT&T Transaction
On December 17, 2013, the Company announced that it entered into an agreement to acquire the wireline
properties of AT&T Inc. (AT&T) in Connecticut (the AT&T Transaction) for a purchase price of $2.0 billion in
cash, with adjustments for working capital. Upon completion of the AT&T Transaction, Frontier will operate
AT&T’s wireline business and fiber optic network that provides services to residential, commercial and
wholesale customers in Connecticut. The Company will also acquire AT&T’s U-versevideo and satellite TV
customers in Connecticut. We incurred $9.7 million of acquisition related costs in connection with the AT&T
Transaction during the fourth quarter of 2013.
(4) Accounts Receivable:
The components of accounts receivable, net at December 31, 2013 and 2012 are as follows:
($ in thousands) 2013 2012
Retail and Wholesale ........................................... $498,717 $581,152
Other .......................................................... 51,855 45,819
Less: Allowance for doubtful accounts . . ........................ (71,362) (93,267)
Accounts receivable, net . .................................. $479,210 $533,704
An analysis of the activity in the allowance for doubtful accounts for the years ended December 31, 2013,
2012 and 2011 is as follows:
($ in thousands)
Balance at
beginning of
Period
Charged to
Other Revenue
Charged (Credited) to
Switched and
Nonswitched Revenue
and Other Accounts
Write-offs and
Recoveries
Balance at end
of Period
2011 ...................... $ 73,571 $93,721 $16,403 $ (76,647) $107,048
2012 ...................... 107,048 74,332 14,396 (102,509) 93,267
2013 ...................... 93,267 68,965 (3,203) (87,667) 71,362
We maintain an allowance for doubtful accounts based on our estimate of our ability to collect accounts
receivable. The provision for uncollectible amounts was $65.8 million, $88.7 million and $110.1 million for the
years ended December 31, 2013, 2012 and 2011, respectively.
F-13
FRONTIER COMMUNICATIONS CORPORATION AND SUBSIDIARIES
Notes to Consolidated Financial Statements