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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) November 19, 1996
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
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The Registrant announced that it will take a $65 million
charge in the fourth quarter of 1996.
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.
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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)
/s/Barbara J. LaVerdi
Dated: November 19, 1996 By: -------------------------
Barbara J. LaVerdi
Assistant Secretary
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EXHIBIT INDEX
Exhibit Number Description
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99 Press Release dated Filed herewith
November 19, 1996
regarding charge in the
fourth quarter
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Frontier Corporation
FRONTIER PRESS RELEASE 180 South Clinton Avenue
Rochester, New York 14646
DATE: November 19, 1996
CONTACTS: John K. Purcell (media) 716-777-7944
Phillip H. Yawman (investors) 716-777-6179
SUMMARY: Frontier to Take $65 Million Charge in the Fourth Quarter
Rochester, N.Y. -- November 19, 1996 -- Frontier Corporation
(NYSE:FRO) announced today a series of financial adjustments it
will make in the fourth quarter. These include charges to
standardize pension benefit plans across the entire company;
charges associated with ConferTech, the company's conference
calling business unit; and the resolution of prior period billing
disputes on international traffic with other carriers.
The total impact of these largely one-time charges is
expected to be $65 million before taxes, or $.24 per share. The
charges include:
- $28 million, or $.10 per share, representing a one-time
charge for the curtailment of certain company pension plans.
- $21 million, or $.08 per share, related to a non-recurring
charge at the company's ConferTech subsidiary.
- $16 million, or $.06 per share, to reflect the resolution
of prior period billing disputes with connecting carriers.
"The curtailment charges we are announcing today involving
our overall pension plans are consistent with our goal to
competitively reposition Frontier," said Chief Financial Officer
Louis L. Massaro. "We announced in 1995 that we would convert all
of our benefit plans to reflect those of a competitive industry.
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Going forward, the company intends to offer only 401(K) type
plans with the company contribution tied to our success in the
marketplace and our earnings performance."
Massaro said the ConferTech charges reflect unrecoverable
costs and reserves for the development of proprietary software
and services provided by ConferTech. "That business continues to
be a strong one for us," added Massaro, who noted that this
charge is not expected to impact future results at ConferTech.
During the third quarter of this year, revenues at ConferTech
increased by over 30 percent and today ConferTech is one of the
leading audio and video conferencing service providers in the
country.
According to Massaro, the resolution of the carrier billing
disputes involves traffic with other carriers that Frontier uses
to complete international calls. This is the only one of these
charges that is expected to have a continuing impact on the firm.
"We are disappointed with the final resolution of the
billing disputes. The continuing effect of these higher
international costs is expected to adversely impact earnings per
share from operations in the range of $.04 per share in the
fourth quarter of this year," he said. "At this point, we expect
a similar impact in 1997. Absent other mitigating factors, this
issue could result in earnings per share next year that are as
much as 7 to 9 percent below current analysts' expectations."
"Even after adjusting for the continuing impact of today's
announcement in both 1996 and 1997, we are still targeting double-
digit earnings growth from operations in both years," he
concluded. In a separate release today, Frontier announced that
it has increased its dividend for the 37th consecutive year,
citing the company's expectation for future growth.
Frontier Corporation (NYSE:FRO) is the parent company whose
long distance, local telephone and wireless communications
subsidiaries provide a range of integrated services to customers.
Frontier is a Fortune 500 company with annualized revenues of
more than $2.5 billion. With more than 8,500 employees and 150
sales locations nationwide, Frontier is the fifth largest long
distance company in the United States.
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The statements made in this press release, other than
historical financial results, may be forward-looking in nature.
Actual results may differ materially from those projected in
forward-looking statements. We believe our primary risk factors
include, but are not limited to: changes in the overall economy;
technology; the number and size of competitors in our markets;
law and regulatory policy; and the mix of products and services
offered in our target markets. Additional information concerning
these and other potential important factors can be found within
our SEC filings. You should evaluate any statements in light of
these important factors.
You can now receive a faxed copy of any Frontier Corporation
press release dating back to November 1995, free of charge, 24
hours a day. Call 1-800-758-5804, extension 762302. An automated
system will provide you with instructions.
Visit Frontier Corporation's home page on the World Wide Web:
http://www.frontiercorp.com
