Frontier Communications 2014 Annual Report Download - page 24

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renewal of existing agreements may impose significant new costs on us, which could adversely affect
our financial condition and results of operations in the future.
If we are unable to hire or retain key personnel, we may be unable to operate our business
successfully.
Our success will depend in part upon the continued services of our management. We cannot
guarantee that our key personnel will not leave or compete with us. The loss, incapacity or
unavailability for any reason of key members of our management team could have a material impact
on our business. In addition, our financial results and our ability to compete will suffer if we are unable
to attract, integrate or retain other qualified personnel in the future.
We may complete a future significant strategic transaction that may not achieve intended
results or could increase the number of our outstanding shares or amount of outstanding debt.
We continuously evaluate and may in the future enter into additional strategic transactions, such
as the Verizon Transaction. Any such transaction could happen at any time, could be material to our
business and could take any number of forms, including, for example, an acquisition, merger or a sale
of all or substantially all of our assets.
Evaluating potential transactions and integrating completed ones may divert the attention of our
management from ordinary operating matters. The success of these potential transactions will depend,
in part, on our ability to realize the anticipated growth opportunities and cost synergies through the
successful integration of the businesses we acquire with our existing business. Even if we are
successful in integrating acquired businesses, we cannot assure you that these integrations will result
in the realization of the full benefit of any anticipated growth opportunities or cost synergies or that
these benefits will be realized within the expected time frames. In addition, acquired businesses may
have unanticipated liabilities or contingencies.
If we complete an acquisition, investment or other strategic transaction, we may require additional
financing that could result in an increase in the number of our outstanding shares of stock or the
aggregate amount and/or cost of our debt, which may result in an adverse impact to our ratings. The
number of shares of our stock or the aggregate principal amount of our debt that we may issue may be
significant, such as for the Verizon Transaction. Moreover, the terms of any debt financing may be
expensive or adversely impact our results of operations.
Risks Related to Liquidity, Financial Resources and Capitalization
Volatility in asset values related to Frontier’s pension plan and/or changes in pension plan
assumptions may require us to make additional unanticipated contributions to fund pension
plan liabilities.
The Company made cash contributions of $83 million to its pension plan in 2014, and expects to
make contributions of approximately $100 million in 2015. Volatility in our asset values, liability
calculations, or returns may require us to make additional contributions in future years.
Substantial debt and debt service obligations may adversely affect us.
We have a significant amount of indebtedness, which amounted to $9.8 billion at December 31,
2014. We have access to a $750 million revolving credit facility and may also take on additional long-
term debt and working capital lines of credit to meet future financing needs, subject to certain
restrictions under the terms of our existing indebtedness.
The potential significant negative consequences on our financial condition and results of
operations that could result from our substantial debt include:
•limitations on our ability to obtain additional debt or equity financing on favorable terms or at all;
•instances in which we are unable to meet the covenants contained in our debt agreements or to
generate cash sufficient to make required debt payments, which circumstances have the
potential of accelerating the maturity of some or all of our outstanding indebtedness;
23
FRONTIER COMMUNICATIONS CORPORATION AND SUBSIDIARIES