<PAGE>
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported) September 27, 1995
FRONTIER CORPORATION
(Exact name of registrant as specified in its charter)
New York 1-4166 16-0613330
(State or other (Commission (IRS Employer
jurisdiction of File Number) Identification No.)
incorporation)
180 South Clinton Avenue, Rochester, New York 14646
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (716) 777-1000
Item 5 Other Events
- ------ ------------
Frontier Corporation announced the adoption of competitive
accounting rules for its local communications companies, and the
discontinuance of prior accounting principle Statement of
Financial Accounting Standards 71 (SFAS 71) effective September 30,
1995. Frontier also announced that it currently expects to take an
acquisition-related, post-tax charge totaling $75-85 million in the
third quarter of 1995 associated with the integration of a number
of companies over the last year.
As permitted by General Instruction F to Form 8-K, the
Registrant incorporates by reference the information contained in
the press release which is filed as an Exhibit to this Report on
Form 8-K.
<PAGE>
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of
1934, the registrant has duly caused this report to be signed on
its behalf of the undersigned hereunto duly authorized.
Frontier Corporation
(Registrant)
Dated: October 4, 1995 By: /s/ Barbara J. LaVerdi
-------------------------
Barbara J. LaVerdi
Assistant Secretary
<PAGE>
<PAGE>
EXHIBIT INDEX
Exhibit Number Description
- -------------- ---------------
99 Press Release dated Filed herewith
September 27, 1995
regarding discontinuance
of SFAS 71; previews
one-time acquisition
charge
<PAGE> 1
DATE: September 27, 1995 after 9:00 a.m.
CONTACT: Linda J. Crociata (media) 716-777-7693
Philip H. Yawman (investors) 716-777-6179
Richard A. Smith (controller) 716-777-8650
SUMMARY: FRONTIER CORPORATION DISCONTINUES SFAS 71;
PREVIEWS ONE-TIME ACQUISITION CHARGE
Rochester, New York -- September 27, 1995 -- Frontier Corporation
(NYSE:FRO) today announced the adoption of competitive accounting
rules for its local communications companies, and the
discontinuance of prior accounting principle Statement of Financial
Accounting Standards 71 (SFAS 71) effective September 30, 1995.
Similar to actions previously taken by six of the Regional Bell
Holding Companies, Frontier has discontinued use of SFAS 71 because
of changes in regulation and increasingly rapid advancements in
telecommunications technology. Adoption of these competitive
accounting methods will result in a post-tax charge of $112 million
to third quarter 1995 earnings.
Going forward, Frontier will apply Generally Accepted
Accounting Principles (GAAP) that reflect market-based depreciation
lives shorter than those presently maintained for financial
reporting purposes. The shorter lives are based on an independent
analysis of Frontier's technology asset base and its prospective
economic life. For example, digital switching equipment currently
being depreciated over 20 years under SFAS 71 will now be included
in an asset class that is depreciated over an average 13.5 years
with a remaining life of less than 6 years. The company does not
expect the one-time charge to have any effect on current credit
ratings, nor does it expect the discontinuance of SFAS 71 to have
an impact on near term earnings or dividend policy. The Attachment
to this release provides additional detail regarding net plant
amounts, asset lives, and financial impact of the change.
The company also announced today that it currently expects to
take an acquisition-related, post-tax charge totaling $75 - $85
million in the third quarter of 1995 associated with the
<PAGE>
<PAGE> 2
integration of a number of companies over the last year. On August
16, 1995, Frontier completed its acquisition of ALC Communications
Corporation, a Michigan-based long distance company, that
established Frontier as the nation's fifth largest long distance
company. This and other recent long distance acquisitions have
dramatically increased Frontier's revenue base, and have positioned
the company for future growth as an integrated communications
solutions provider. As expected, the integration of the acquired
companies with existing Frontier businesses has resulted in
instances of redundant facilities and staffing, transaction costs,
and debt retirement expense.
"The elimination of SFAS 71 accounting, and the related
one-time charge, bring our accounting practices in line with the
realities of our business environment," said Marvin C. Moses,
executive vice president and chief financial officer of Frontier.
"The acquisition-related charges, and the business decisions which
they reflect, are a fundamental part of our goal of meeting or
exceeding our estimated synergy targets."
Frontier Corporation, a holding company formed on January 1,
1995, is a provider of integrated communications solutions to more
than 2 million customers through its long distance, local
communications, wireless and terminal equipment operations.
If you have a fax machine, you can now receive a copy of any
Frontier Corporation press release dating back to July of 1994,
free of charge, 24 hours a day. Call 1-800-758-5804, extension
762302 and the automated system will provide you with instructions.
You can now access Frontier Corporation on the World Wide Web
Frontier Corporation World Wide Web address:
http://www.frontiercorp.com
<PAGE>
<PAGE>3
Attachment to Press Release 9/27/95
FRONTIER CORPORATION - FAS 71 Adjustment
Telephone Group Plant Asset Balances ($M)
Projected at September 30, 1995
Pre-Change Post Change
Network Plant Accum. Net Reserve Revised
Asset Category In Service Reserve Plant Adjust. Net Plant
===================================================================
Digital Switching $375.6 ($160.7) $214.9 ($36.9) $178.0
Analog Switching 0.4 1.0 1.4 (1.4) 0.0
Circuit Equipment 148.6 (86.9) 61.7 (9.3) 52.4
Cable:
Aerial Metallic 237.6 (111.9) 125.7 (50.5) 75.2
Underground Metallic 100.2 (42.3) 57.9 (42.5) 15.4
Buried Metallic 276.3 (118.3) 158.0 (44.5) 113.5
Fiber Optic 30.4 (6.5) 23.9 (0.5) 23.4
All Other Accounts 385.2 (224.3) 160.9 0.0 160.9
==============================================
Total Telephone Grp $1,554.3 ($749.9) $804.4 ($185.6) $618.8
==============================================
NETWORK ASSET LIVES (Years) - FAS 71 Adjustment
Pre-Change Composite of Post Change
Regulator-Approved Estimated Economic
Asset Category Asset Lives Asset Lives
===================================================================
Digital Switching 20.0 13.5
Analog Switching 12.0 8.0
Circuit Equipment 12.0 8.0
Cable:
Aerial Metallic 27.0 19.0
Underground Metallic 35.0 12.0
Buried Metallic 24.0 18.0
Fiber Optic 35.0 25.0
<PAGE>
<PAGE>
FINANCIAL STATEMENT IMPACTS - FAS 71 Adjustment
(Dollars in millions)
INCOME STATEMENT IMPACTS - 3RD QUARTER 1995
Pre-Tax After-Tax
Extraordinary Item:
Reduction in Recorded Value of
Long Lived Telephone Plant ($185.6) ($115.4)
Elimination of Regulatory
Assets & Liabilities $5.1 $3.2
========== ==========
Total Extraordinary Item ($180.5) ($112.2)
========== ==========
