Frontier Communications 2014 Annual Report Download - page 20

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connection with the financing without achieving the expected benefits of the Verizon Transaction. The
trading price of our securities could be adversely affected if the Verizon Transaction is not
consummated as currently contemplated, or at all.
Our effort to combine our business and the business to be acquired from Verizon may not
be successful.
The Company is devoting a significant amount of time and attention to the process of integrating
the operations of our business and the business to be acquired from Verizon, which may decrease the
time that management will have to serve existing customers, attract new customers and develop new
services or strategies. The size and complexity of the acquired business and the process of using our
existing common support functions and systems to manage the acquired business after the acquisition,
if not managed and completed successfully by management, may result in interruptions of the business
activities of the Company that could have an adverse effect on the Company’s business, financial
condition and results of operations.
We may not realize the cost synergies that are anticipated from the Verizon Transaction.
The success of the Verizon 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 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 Verizon are insufficient to
operate the acquired business, it could adversely affect the Company’s business, financial
condition and results of operations.
Pursuant to the securities purchase agreement executed in connection with the Verizon
Transaction, Verizon will contribute to the acquired business certain assets and liabilities of its local
exchange business and related landline activities in California, Florida and Texas, including video,
broadband internet and switched long distance services provided to designated customers located in
those states. 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.
The Company’s business, financial condition and results of operations may be adversely
affected following consummation of the Verizon 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 Verizon to certain
customers pursuant to master agreements, together with other Verizon products or services. Pursuant
to the securities purchase agreement, we and Verizon have jointly agreed to use our reasonable best
efforts for six months following the consummation of the Verizon 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.
Regulatory agencies may delay approval of the Verizon Transaction, fail to approve it, or
approve it in a manner that may diminish the anticipated benefits of the Verizon Transaction.
Completion of the Verizon 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 Verizon Transaction could delay its completion. A lengthy delay in the completion of the Verizon
Transaction could diminish the anticipated benefits and/or result in additional transaction and financing
19
FRONTIER COMMUNICATIONS CORPORATION AND SUBSIDIARIES