Filed by Frontier
Communications Corporation
Pursuant to Rule
425 under the Securities Act of 1933
Under the
Securities Exchange Act of 1934
Subject Company:
Frontier Communications Corporation
Registration
Statement No. 333-160789
The following is a
transcript of Maggie Wilderotter’s appearance on the television show Taking
Stock, first aired on November 3, 2009.
Pimm Fox: Whether
it's telephone, Internet or television customers in small and rural locations
across 24 states, they rely on Frontier Communications in order to provide for
their needs. Now, Frontier struck an $8.5 billion deal in May to triple its
access lines. That was a purchase deal from Verizon and it hopes for
an even bigger role in broadband thanks to federal stimulus programs,
perhaps. Maggie Wilderotter is the CEO at Frontier and just as a note
exceeded Wall Street’s estimates for third quarter earnings that came out
today. Maggie, congratulations, that is very good news.
Maggie Wilderotter: Thank you
so much.
Pimm Fox: So what is this
whole idea of access lines, explain to people sort of the notion of access lines
and they are declining in popularity so you've got to work hard to kind of
replace those access lines.
Maggie
Wilderotter: Well we look at the business as a communication
services business of which phone lines into the home for local service is just
one of the services that we provide. And what we really want to focus
on though is the wallet share, or the revenue per household. That's
the most important thing. Access lines is one component of that, but
in addition to local service there is long distance services that we offer,
there’s broadband services, so high-speed Internet access and we have a
partnership with the Dish Network for video as well. So we'll sell
bundles of products and services to our customers, both residential customers
and business customers. Some of the access line declines that have
taken place over the last several years are by design. For example, we have
upgraded many customers that were on dial-up broadband to high speed Internet
broadband. And when you do that you remove the phone line from the
equation because they have direct access to the broadband line. In
addition to that, as businesses look to upgrade their capabilities for both
voice and data, we'll put larger pipes into businesses and we'll remove access
lines out of the equation. So some of the changeover of access lines
we do ourselves. We also know there
is a phenomenon for people that want to just use cell phones in certain
situations and we also have competitive services in our markets as well. But we
fight every single day to keep every customer on service, to deliver a great
customer experience and over the last five years we've continued to grow revenue
per household and revenue per business.
Pimm Fox: Now one of the ways
you’re growing revenue is you made that acquisition, you bought a whole bunch of
access lines. It sounds small, I know, but $8.5 billion is not a small deal,
from Verizon, can you give us an update on that deal?
Maggie Wilderotter: Yes, we're
in the process of going through regulatory approval to get the deal closed.
We’re very pleased that our shareholders overwhelmingly approved the transaction
just last week and we also got, three states approved the transaction. We had
Nevada, South Carolina, and California. We have six more states to approve the
transaction and we're working on those processes today and then we’re still
waiting for FCC approval, that we think will take place in the next several
months as well. But once we get the approvals we see huge growth opportunities
in these Verizon markets. These are predominantly rural locations, they don’t
have a lot of broadband in these markets today. In our Frontier footprint we
have 92% reach, so 92% of all the households and businesses can get access to
broadband from us.
Pimm Fox: And in that case in
the rural networks, not having a lot of competition would be good for Frontier
Communications.
Maggie Wilderotter:
Absolutely
Interviewer: I want to thank
you very much, Maggie Wilderotter, coming in and sharing your thoughts about the
telecommunications industry. Thanks for taking stock.
Forward-Looking
Language
This communication
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; the failure to receive the IRS ruling approving the tax-free status
of the Verizon transaction; the failure of our stockholders to approve the
Verizon transaction; the ability to successfully integrate the Verizon
operations into our existing operations; the effects of increased expenses due
to activities related to the Verizon transaction; the ability to migrate
Verizon’s West 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 and High-Speed Internet subscribers; 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, to pay dividends and to repay, reduce or
refinance our debt; the effects of bankruptcies and home foreclosures, which
could result in increased bad debts; 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 2009 and thereafter; further declines in the value
of our pension plan assets, which could require us to make contributions to the
pension plan beginning no earlier than 2010; 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 (which will increase in 2009) 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 severe weather.
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 statement or to make any other forward-looking
statements, 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.