STAMFORD, Conn.--(BUSINESS WIRE)--
Frontier Communications Corporation (NYSE: FTR) reported today that its
pending acquisition of Verizon Communications' (NYSE: VZ) local wireline
operations in Arizona has been unanimously approved by the Arizona
Corporation Commission (ACC).
Arizona is the fifth state to approve the transaction. The Public
Utilities Commission of Ohio unanimously approved the transaction on
February 11, 2010; the Public Utilities Commission of Nevada and the
Public Service Commission of South Carolina unanimously approved the
transaction on October 28, 2009; and the California Public Utilities
Commission unanimously approved the transaction on October 29, 2009.
"With this approval, upon completion of the transaction Frontier will
offer our new customers in Arizona expanded broadband availability and
enhanced products and services," said Dan McCarthy, Executive Vice
President and Chief Operating Officer of Frontier. "Frontier has been an
important communications provider in the state for many years and has a
strong commitment to customers and the communities we serve."
He added, "The new Frontier will have a strong balance sheet, lower
leverage, operating flexibility and greater cash flow generation, all of
which should enable Frontier to achieve an investment grade credit
rating over time."
On May 13, 2009, Frontier announced plans to acquire Verizon's local
wireline operations serving residential and small-business customers in
predominantly rural areas and small- to medium-sized towns and cities in
14 states.
Verizon has received a favorable ruling from the IRS regarding the tax
consequences of its spin-off and merger with Frontier. The receipt of
this ruling was one of the conditions to closing the transaction.
Regulators in four other states and the Federal Communications
Commission also must approve the transaction or related transfers.
At the federal level, in the fall of 2009 the Federal Trade Commission
and the U.S. Department of Justice granted the parties' request for
early termination of the waiting period required under the
Hart-Scott-Rodino Antitrust Improvements Act of 1976.
Frontier has received all 41 local franchise approvals from authorities
in Washington state and Oregon that are required to transfer control of
local cable TV franchises from Verizon to Frontier, subject to meeting
certain conditions of such approvals.
On October 27, 2009, Frontier's shareholders approved the transaction
with Verizon.
The transaction is expected to close during the second quarter of 2010.
Forward-Looking Language
This presentation contains forward-looking statements that are made
pursuant to the safe harbor provisions of The Private Securities
Litigation Reform Act of 1995. These statements are made on the basis of
management's views and assumptions regarding future events and business
performance. Words such as "believe," "anticipate," "expect" and similar
expressions are intended to identify forward-looking statements.
Forward-looking statements (including oral representations) involve
risks and uncertainties that may cause actual results to differ
materially from any future results, performance or achievements
expressed or implied by such statements. These risks and uncertainties
are based on a number of factors, including but not limited to: Our
ability to complete the acquisition of access lines from Verizon; the
failure to obtain, delays in obtaining or adverse conditions contained
in any required regulatory approvals for the Verizon transaction; for
two years after the merger, we may be limited in the amount of capital
stock that we can issue to make acquisitions or to raise additional
capital; our indemnity obligation to Verizon may discourage, delay or
prevent a third party from acquiring control of us during the two year
period following the merger in a transaction that our stockholders might
consider favorable; the ability to successfully integrate the Verizon
operations into Frontier's existing operations; the effects of increased
expenses due to activities related to the Verizon transaction; the
ability to migrate Verizon'sWest Virginia operations from Verizon owned
and operated systems and processes to Frontier owned and operated
systems and processes successfully; the risk that the growth
opportunities and cost synergies from the Verizon transaction may not be
fully realized or may take longer to realize than expected; the
sufficiency of the assets to be acquired from Verizon to enable us to
operate the acquired business; disruption from the Verizon transaction
making it more difficult to maintain relationships with customers,
employees or suppliers; the effects of greater than anticipated
competition requiring new pricing, marketing strategies or new product
or service offerings and the risk that we will not respond on a timely
or profitable basis; reductions in the number of our access lines that
cannot be offset by increases in High Speed Internet subscribers and
sale of other products; our ability to sell enhanced and data services
in order to offset ongoing declines in revenue from local services,
switched access services and subsidies; the effects of ongoing changes
in the regulation of the communications industry as a result of federal
and state legislation and regulation; the effects of competition from
cable, wireless and other wireline carriers (through voice over internet
protocol (VOIP) or otherwise); our ability to adjust successfully to
changes in the communications industry and to implement strategies for
improving growth; 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; reductions in switched access revenues
as a result of regulation, competition and/or technology substitutions;
the effects of changes in both general and local economic conditions on
the markets we serve, which can impact demand for our products and
services, customer purchasing decisions, collectability of revenue and
required levels of capital expenditures related to new construction of
residences and businesses; our ability to effectively manage service
quality; our ability to successfully introduce new product offerings,
including our ability to offer bundled service packages on terms that
are both profitable to us and attractive to our customers; changes in
accounting policies or practices adopted voluntarily or as required by
generally accepted accounting principles or regulators; our ability to
effectively manage our operations, operating expenses and capital
expenditures, and to repay, reduce or refinance our debt; the effects of
bankruptcies and home foreclosures, which could result in difficulty in
collection of revenues and loss of customers; the effects of
technological changes and competition on our capital expenditures and
product and service offerings, including the lack of assurance that our
ongoing network improvements will be sufficient to meet or exceed the
capabilities and quality of competing networks; the effects of increased
medical, retiree and pension expenses and related funding requirements;
changes in income tax rates, tax laws, regulations or rulings, and/or
federal or state tax assessments; the effects of state regulatory cash
management policies on our ability to transfer cash among our
subsidiaries and to the parent company; our ability to successfully
renegotiate union contracts expiring in 2010 and beyond; declines in the
value of our pension plan assets, which could require us to make
contributions to the pension plan in 2011 and beyond; our ability to pay
dividends in respect of our common shares, which may be affected by our
cash flow from operations, amount of capital expenditures, debt service
requirements, cash paid for income taxes and our liquidity; the effects
of any unfavorable outcome with respect to any of our current or future
legal, governmental or regulatory proceedings, audits or disputes; the
possible impact of adverse changes in political or other external
factors over which we have no control; and the effects of hurricanes,
ice storms or other natural disasters. These and other uncertainties
related to our business are described in greater detail in our filings
with the Securities and Exchange Commission, including our reports on
Forms 10-K and 10-Q, and the foregoing information should be read in
conjunction with these filings. We undertake no obligation to publicly
update or revise any forward-looking statements or to make any other
forward-looking statement, whether as a result of new information,
future events or otherwise unless required to do so by securities laws.
Additional Information and Where to Find It
This filing is not a substitute for the definitive prospectus/proxy
statement included in the Registration Statement on Form S-4 that
Frontier filed, and the SEC has declared effective, in connection with
the proposed transactions described in the definitive prospectus/proxy
statement. INVESTORS ARE URGED TO READ THE DEFINITIVE PROSPECTUS/PROXY
STATEMENT BECAUSE IT CONTAINS IMPORTANT INFORMATION, INCLUDING DETAILED
RISK FACTORS. The definitive prospectus/proxy statement and other
documents filed or to be filed by Frontier with the SEC are or will be
available free of charge at the SEC's website, www.sec.gov,
or by directing a request when such a filing is made to Frontier, 3 High
Ridge Park, Stamford, CT 06905-1390, Attention: Investor Relations.
This communication shall not constitute an offer to sell or the
solicitation of an offer to buy securities, nor shall there be any sale
of securities in any jurisdiction in which such offer, solicitation or
sale would be unlawful prior to registration or qualification under the
securities laws of such jurisdiction.
Frontier's stockholders approved the proposed transactions on October
27, 2009, and no other vote of the stockholders of Frontier or Verizon
is required in connection with the proposed transactions.
Source: Frontier Communications Corporation
Contact: Frontier Communications Corporation
Steve Crosby
SVP, Government and Regulatory Affairs
916-206-8198
steven.crosby@frontiercorp.com