<PAGE>
<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 11-K
ANNUAL REPORT
Pursuant to Section 15(d) of
The Securities Exchange Act of 1934
For the years ended December 31, 1996 and 1995
Commission File Number 1-4166
FRONTIER CORPORATION
BARGAINING UNIT EMPLOYEES'
RETIREMENT SAVINGS PLAN
(Full name of plan)
FRONTIER CORPORATION
(Name of issuer of securities
held pursuant to the plan)
180 South Clinton Avenue
Rochester, New York 14646-0700
(Address of principal executive offices)
REQUIRED INFORMATION
In accordance with the applicable provisions of Article 6A
of Regulation S-X, the following financial statements are filed
as part of this Report.
Report of Independent Accountants
Statements of Net Assets Available for Benefits with
Fund Information at December 31, 1996 and 1995
Statement of Changes in Net Assets Available for Benefits
with Fund Information for the year ended December 31, 1996
Notes to Financial Statements
Schedule of Assets Held for Investment
Schedule of Reportable Transactions
The following exhibit is filed as part of this Report.
Consent of Independent Accountants
<PAGE>
<PAGE> 2
FRONTIER CORPORATION
BARGAINING UNIT
EMPLOYEES' RETIREMENT SAVINGS PLAN
Financial Statements
For the years ended
December 31, 1996 and 1995
<PAGE>
<PAGE> 3
FRONTIER CORPORATION
BARGAINING UNIT EMPLOYEES' RETIREMENT SAVINGS PLAN
Index to Financial Statements Page 1
- -----------------------------------------------------------------------
Report of Independent Accountants Page 2
Statements of Net Assets Available for Benefits with
Fund Information at December 31, 1996 and 1995 Pages 3-4
Statement of Changes in Net Assets Available for
Benefits with Fund Information for the year ended
December 31, 1996 Page 5
Notes to Financial Statements Pages 6-9
Line 27a - Schedule of Assets Held for
Investment Purposes Schedule I
Line 27d - Schedule of Reportable Transactions Schedule II
<PAGE>
<PAGE> 4
Report of Independent Accountants Page 2
April 25, 1997
To the Participants and Administrator of
the Frontier Corporation Bargaining Unit
Employees' Retirement Savings Plan
In our opinion, the accompanying statements of net assets available for
benefits and the related statement of changes in net assets available for
benefits present fairly, in all material respects, the net assets available
for benefits of the Frontier Corporation Bargaining Unit Employees'
Retirement Savings Plan at December 31, 1996 and 1995, and the changes in
its net assets available for benefits for the year ended December 31, 1996,
in conformity with generally accepted accounting principles. These
financial statements are the responsibility of the Plan's management; our
responsibility is to express an opinion on these financial statements based
on our audits. We conducted our audits of these financial statements in
accordance with generally accepted auditing standards which require that we
plan and perform the audit to obtain reasonable assurance about whether the
financial statements are free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and disclosures
in the financial statements, assessing the accounting principles used and
significant estimates made by management, and evaluating the overall
financial statement presentation. We believe that our audits provide a
reasonable basis for the opinion expressed above.
Our audits were made for the purpose of forming an opinion on the basic
financial statements taken as a whole. The additional information included
in Schedules I and II is presented for purposes of additional analysis and
is not a required part of the basic financial statements but is additional
information required by the Employee Retirement Income Security Act of 1974
("ERISA"). Such information has been subjected to the auditing procedures
applied in the audit of the basic financial statements and, in our opinion,
is fairly stated in all material respects in relation to the basic
financial statements taken as a whole.
PRICE WATERHOUSE LLP
<PAGE>
<PAGE> 5
<TABLE>
FRONTIER CORPORATION
BARGAINING UNIT EMPLOYEES' RETIREMENT SAVINGS PLAN
Statement of Net Assets Available for Benefits with Fund Information Page 3
===================================================================================
December 31, 1996
--------------------------------------------------
Fund A Fund B Fund C Fund D Fund E
<S> <C> <C> <C> <C> <C>
Assets
- -------------------------
Investments, at fair value:
Registered investment companies -
Putnam Income Fund $1,487,484
Putnam Global Growth Fund $1,849,000
Putnam Voyager Fund $4,207,486
Putnam S & P 500 Index Fund $2,176,036
Frontier Corporation Common Stock
Participant loans
Investments, at contract value:
Stable Value Fund $6,617,654
---------------------------------------------------
Total investments 1,487,484 1,849,000 4,207,486 6,617,654 2,176,036
---------------------------------------------------
Receivables:
Participants' contributions
Employer's contributions
Total receivables
Total assets 1,487,484 1,849,000 4,207,486 6,617,654 2,176,036
---------------------------------------------------
Net assets available
for benefits $1,487,484 $1,849,000 $4,207,486 $6,617,654 $2,176,036
===================================================
The accompanying notes are an integral part of these financial statements.
</TABLE>
<PAGE>
<PAGE> 6
<TABLE>
FRONTIER CORPORATION
BARGAINING UNIT EMPLOYEES' RETIREMENT SAVINGS PLAN
Statement of Net Assets Available for Benefits with Fund Information Page 3
===================================================================================
December 31, 1996
--------------------------------------------------
Participant
Fund F Loans Other Total
<S> <C> <C> <C> <C>
Assets
- -------------------------
Investments, at fair value:
Registered investment companies -
Putnam Income Fund $1,487,484
Putnam Global Growth Fund $1,849,000
Putnam Voyager Fund $4,207,486
Putnam S & P 500 Index Fund $2,176,036
Frontier Corporation Common Stock $9,192,876 $9,192,876
Participant loans $1,105,515 $1,105,515
Investments, at contract value:
Stable Value Fund $6,617,654
---------------------------------------------------
Total investments 9,192,876 1,105,515 26,636,051
---------------------------------------------------
Receivables:
Participants' contributions $230,565 230,565
Employer's contributions 91,705 91,705
--------- --------
Total receivables 322,270 322,270
--------- --------
Total assets 9,192,876 1,105,515 322,270 26,958,321
-----------------------------------------------------
Net assets available
for benefits $9,192,876 $1,105,515 $322,270 $26,958,321
=====================================================
The accompanying notes are an integral part of these financial statements.
</TABLE>
<PAGE>
<PAGE> 7
<TABLE>
FRONTIER CORPORATION
BARGAINING UNIT EMPLOYEES' RETIREMENT SAVINGS PLAN
Statement of Net Assets Available for Benefits with Fund Information Page 4
===================================================================================
December 31, 1995
--------------------------------------------------
Fund A Fund B Fund C Fund D Fund E
<S> <C> <C> <C> <C> <C>
Assets
- -------------------------
Investments, at fair value:
Cash $ 43,290
Registered investment companies -
Putnam Income Fund $1,446,235
Putnam Global Growth Fund $1,334,720
Putnam Voyager Fund $2,952,475
Putnam S & P 500 Index Fund $1,464,385
Frontier Corporation Common Stock
Participant loans
Investments, at contract value:
Principal Mutual Life Insurance Company 739,829
New York Life Insurance Company 912,479
Prudential Insurance Company of America 977,024
John Hancock Mutual Life Insurance Company 1,322,754
Metropolitan Life Insurance Company 614,992
CNA Life Insurance Company 275,043
Peoples Security Life Insurance Company 714,110
Allstate Life Insurance Company 373,724
---------------------------------------------------
Total investments 1,446,235 1,334,720 2,952,475 5,973,245 1,464,385
---------------------------------------------------
Receivables:
Participants' contributions
Employer's contributions
Total receivables
Total assets 1,446,235 1,334,720 2,952,475 5,973,245 1,464,385
---------------------------------------------------
Net assets available
for benefits $1,446,235 $1,334,720 $2,952,475 $5,973,245 $1,464,385
===================================================
The accompanying notes are an integral part of these financial statements.
</TABLE>
<PAGE>
<PAGE> 8
<TABLE>
FRONTIER CORPORATION
BARGAINING UNIT EMPLOYEES' RETIREMENT SAVINGS PLAN
Statement of Net Assets Available for Benefits with Fund Information Page 4
===================================================================================
December 31, 1995
--------------------------------------------------
Participant
Fund F Loans Other Total
<S> <C> <C> <C> <C>
Assets
- -------------------------
Investments, at fair value:
Cash $ 43,290
Registered investment companies -
Putnam Income Fund 1,446,235
Putnam Global Growth Fund 1,334,720
Putnam Voyager Fund 2,952,475
Putnam S & P 500 Index Fund 1,464,385
Frontier Corporation Common Stock $9,513,445 9,513,445
Participant loans 731,877 731,877
Investments, at contract value:
Principal Mutual Life Insurance Company 739,829
New York Life Insurance Company 912,479
Prudential Insurance Company of America 977,024
John Hancock Mutual Life Insurance Company 1,322,754
Metropolitan Life Insurance Company 614,992
CNA Life Insurance Company 275,043
Peoples Security Life Insurance Company 714,110
Allstate Life Insurance Company 373,724
---------------------------------------------------
Total investments 9,513,445 731,877 23,416,382
---------------------------------------------------
Receivables:
Participants' contributions $318,222 318,222
Employer's contributions 116,247 116,247
--------- --------
Total receivables 434,469 434,469
--------- --------
Total assets 9,513,445 731,877 434,469 23,850,851
---------------------------------------------------
Net assets available
for benefits $9,513,445 $ 731,877 $434,469 $23,850,851
===================================================
The accompanying notes are an integral part of these financial statements.
</TABLE>
<PAGE>
<PAGE> 9
<TABLE>
FRONTIER CORPORATION
BARGAINING UNIT EMPLOYEES' RETIREMENT SAVINGS PLAN Page 5
Statement of Changes in Net Assets Available for Benefits with Fund Information
=================================================================================
Year ended December 31, 1996
------------------------------------------------
Fund A Fund B Fund C Fund D Fund E
<S> <C> <C> <C> <C> <C>
Additions
Additions to net assets attributed to:
Investment income -
Interest and dividends $100,331 $128,937 $263,809 $392,171
Realized gains 3,134 22,794 99,918 $ 50,354
Net (depreciation) appreciation
in fair value of investments (49,131) 86,639 37,443 319,205
Participant loan interest income
Contributions -
Participants' contributions 253,389 357,271 715,635 1,025,094 344,883
Employer's contributions 13,196 15,015 25,336 43,222 15,336
-------------------------------------------------
Total additions (deductions) 320,919 610,656 1,142,141 1,460,487 729,778
-------------------------------------------------
Deductions
Deductions from net assets attributed to:
Benefits paid to participants 103,050 79,750 139,327 449,594 69,051
Other expense 510 490 1,118 3,070 606
---------------------------------------------------
Total deductions 103,560 80,240 140,445 452,664 69,657
---------------------------------------------------
Net increase (decrease) prior
to interfund transfers 217,359 530,416 1,001,696 1,007,823 660,121
Interfund transfers (176,110) (16,136) 253,315 (363,414) 51,530
---------------------------------------------------
Net increase (decrease) 41,249 514,280 1,255,011 644,409 711,651
Net assets available for benefits:
Beginning of year 1,446,235 1,334,720 2,952,475 5,973,245 1,464,385
---------------------------------------------------
End of year $1,487,484$1,849,000$4,207,486$6,617,654$2,176,036
===================================================
The accompanying notes are an integral part of these financial statements.
</TABLE>
<PAGE>
<PAGE> 10
<TABLE>
FRONTIER CORPORATION
BARGAINING UNIT EMPLOYEES' RETIREMENT SAVINGS PLAN Page 5
Statement of Changes in Net Assets Available for Benefits with Fund Information
=================================================================================
Year ended December 31, 1996
------------------------------------------------
Participant
Fund F Loans Other Total
<S> <C> <C> <C> <C>
Additions
Additions to net assets attributed to:
Investment income -
Interest and dividends $312,634 $1,197,882
Realized gains 191,862 368,062
Net (depreciation) appreciation
in fair value of investments (3,035,742) (2,641,586)
Participant loan interest income $48,788 48,788
Contributions -
Participants' contributions 1,174,068 8,676 230,565 4,109,581
Employer's contributions 1,213,425 91,705 1,417,235
-------------------------------------------------
Total additions (deductions) (143,753) 57,464 322,270 4,499,962
-------------------------------------------------
Deductions
Deductions from net assets attributed to:
Benefits paid to participants 495,342 50,288 1,386,402
Other expense 296 6,090
---------------------------------------------------
Total deductions 495,638 50,288 1,392,492
---------------------------------------------------
Net increase (decrease) prior
to interfund transfers (639,391) 7,176 322,270 3,107,470
Interfund transfers 318,822 366,462 (434,469) -0-
---------------------------------------------------
Net increase (decrease) (320,569) 373,638 (112,199) 3,107,470
Net assets available for benefits:
Beginning of year 9,513,445 731,877 434,469 23,850,851
---------------------------------------------------
End of year 9,192,876 1,105,515 322,270 26,958,321
===================================================
The accompanying notes are an integral part of these financial statements.
</TABLE>
<PAGE>
<PAGE> 11
FRONTIER CORPORATION
BARGAINING UNIT EMPLOYEES' RETIREMENT SAVINGS PLAN
Notes to Financial Statements
December 31, 1996
- ----------------------------------------------------------------------
NOTE 1 - DESCRIPTION OF THE PLAN
- --------------------------------
The Frontier Corporation Bargaining Unit Employees' Retirement Savings Plan
(the "Plan") is a defined contribution plan established by the Board of
Directors of Frontier Corporation (the "Company") effective March 1, 1994.
The Plan is subject to the applicable provisions of the Employee Retirement
Income Security Act of 1974 ("ERISA"). The Plan provides participants the
option of having their basic and supplemental contributions to the Plan made
on a salary reduction basis and on a deferred tax basis.
During the Plan year end December 31, 1995, the Inland Telephone Co.
Bargaining Unit Employee Profit Sharing Plan and the CC&S Systems Inc.
Bargaining Unit 401(k) Plan merged into the Frontier Corporation Bargaining
Unit Employees' Retirement Savings Plan. Net assets of $1,185,139 were
transferred from these plans during Plan year end December 31, 1995.
The principal provisions of the Plan are described below and are provided for
general information purposes only. Participants should refer to the Plan
document for a more complete description of the Plan's provisions.
Participation
- -------------
All bargaining unit employees covered by a collective bargaining agreement,
except for temporary, summer and leased employees, are eligible to
participate in the Plan upon employment date.
Administration
- --------------
The Plan is administered by the Company's Employee Benefit Committee whose
members are appointed by the Company's Board of Directors.
The Trustee of the Plan is Putnam Fiduciary Trust Company.
Funding policy
- --------------
Upon enrollment in the Plan, a participant may direct contributions into any
of six investment options.
<PAGE>
<PAGE> 12
Fund A - Putnam Income Fund - Funds are primarily invested in
Corporate bonds and U.S. government and agency obligations.
Fund B - Putnam Global Growth Fund - Funds are primarily invested
in foreign and domestic common stocks.
Fund C - Putnam Voyager Fund - Funds are invested in emerging growth
companies and opportunity stocks.
Fund D - Stable Value Fund - Funds are invested in an insurance
company pooled separate account.
Fund E - Putnam S & P 500 Index Fund - Funds are primarily invested
in stocks that comprise the S & P 500 Index.
Fund F - Frontier Corporation Common Stock Fund - Funds are invested
in common stock of Frontier Corporation.
The shares of stock in Fund F are qualified employer securities as defined by
ERISA. Each individual's investment in these funds is recorded in his or her
account on a per share basis. All other funds are tracked on a dollar value
basis with each fund's activity allocated to participants on a pro rata
basis. Therefore, the Plan does not record activity on a unit value basis.
The Plan provides that each participant may voluntarily make contributions
through a salary reduction agreement for whatever whole percentage a
participant chooses, up to a maximum of 16%, subject to maximum contributions
imposed by the Internal Revenue Code under Section 401(k).
Individual accounts which record the participants' contributions, the earnings
on all contributions and the amount of the participant's interest in each fund
are maintained for each participant. The participants' contributions during a
month are allocated directly to their individual account when contributions
are received by the Trustee. Participants have the option to invest their
contributions in any of the funds and may change their allocation between
funds at any time.
Employer matching and non-matching contributions are made in accordance with
each participating employer's bargaining unit agreement.
<PAGE>
<PAGE> 13
Vesting
- -------
Participants are immediately 100% vested in their voluntary contributions and
actual earnings thereon. Vesting in the remainder of their accounts is based
on years of continuous service. Participants should refer to their respective
bargaining agreements for vesting requirements of employer contributions.
Forfeited nonvested accounts are used to reduce future employer contributions.
Payment of benefits
- -------------------
Upon termination of service and attaining normal retirement age (65), a
participant may elect to receive either a lump-sum amount equal to the value
of his or her vested account balance, or a participant may elect to receive
installments over a period not to exceed 20 years.
If upon termination of service, a participant does not attain normal
retirement age, he or she may elect to receive a lump-sum amount, a direct
rollover to a qualified plan under Section 401 of the Internal Revenue Code,
or a direct rollover to a qualified Individual Retirement Account equal to the
value of his or her vested account balance.
Individual participant loans
- ----------------------------
Participant loans cannot exceed the lesser of 50% of the vested amounts in the
participant's account or $50,000. A participant may only have two loans
outstanding, and they are treated as directed investments by the borrower with
respect to his or her account. Interest is charged on outstanding borrowings
at the prime rate which was 8.25% at December 31, 1996. Interest paid on the
loan is credited to the borrower's account and the participant does not share
in the income of the Plan's assets with respect to the amounts outstanding.
Loans have a term of no more than five years except that a loan may be granted
for a period not to exceed 25 years if the proceeds are used to purchase the
participant's principal residence. During the Plan year ended December 31,
1996, $713,056 in loans were disbursed and principal repayments of $337,917
were made.
Plan termination
- ----------------
Although it has not expressed any intent to do so, the Company reserves the
right under the Plan to discontinue its contributions and/or to terminate the
Plan at any time. Upon termination, all amounts funded shall become
nonforfeitable and shall be provided for and paid from the Plan's trust in
accordance with the order of priority set forth in
<PAGE>
<PAGE> 14
Section 4044 of ERISA. In the event of Plan termination, participants become
100% vested in their accounts.
The Plan is not a defined benefit plan and, accordingly, Plan benefits are
not guaranteed by the Pension Benefit Guaranty Corporation.
The Plan's holdings of Frontier Corporation common stock and four Putnam
Investment, Inc. registered investment company funds are party-in-interest
investments.
NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
- ---------------------------------------------------
The financial statements have been prepared on the accrual basis of
accounting.
Use of estimates
- ----------------
The preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions
that affect the reported amounts of assets and liabilities at year end and
the reported investment income and expenses during the Plan year.
Contributions and benefits paid
- -------------------------------
Contributions are recorded by the Plan when withheld from employees and
accrued by the Company. Benefits to participants are recorded by the Plan
when a request for disbursement is received from the employee.
The Plan's distributions are paid in cash. Purchases and sales of
securities are recorded on the trade date.
Administrative expenses
- -----------------------
Significant expenses associated with the Plan are paid by the Company.
Valuation of investment assets
- ------------------------------
The Plan's interest in registered investment companies and employer
securities is stated at fair value, measured by the quoted
market price. Adjustments for unrealized appreciation
or depreciation of such values are included in the
operating results of the Plan. Funds invested in the Stable Value Fund are
stated at contract value, measured as cost plus earned interest income.
Contract value approximates fair market value at December 31, 1996 and 1995.
<PAGE>
<PAGE> 15
NOTE 3 - PARTICIPANT ACCOUNTS
- -----------------------------
As of December 31, 1996 and 1995, the Plan held 406,317 and 317,115 shares of
Frontier Corporation common stock at a fair market value of $9,192,876 and
$9,513,445, respectively. Of these shares, 46,250 were contributed by the
Company during the Plan year ended December 31, 1996, as the Company's
matching contribution. During the Plan year ended December 31, 1996, 2,278
shares of Frontier Corporation common stock were distributed to participants.
NOTE 4 - FEDERAL INCOME TAX STATUS
- ----------------------------------
The Plan Administrator has received a favorable determination letter from the
Internal Revenue Service covering the Plan as amended through February 2,
1995 stating that the Plan, as designed, is a qualified plan
in accordance with Section 401(a) of the Internal Revenue Code,
and its corresponding trust is exempt from taxation under
Section 501(a) of the Code. The Plan Administrator
believes the Plan is being operated as designed and, therefore,
maintains its tax-qualified status.
<PAGE>
<PAGE> 16
<TABLE>
FRONTIER CORPORATION
BARGAINING UNIT EMPLOYEES' RETIREMENT SAVINGS PLAN
Line 27a - Schedule of Assets Held for Investment Purposes Schedule I
- -----------------------------------------------------------------------------------
Current
Number value at
of December 31,
Description/Issuer shares Cost 1996
- ------------------------------------------------------------------------------------
<S> <C> <C> <C>
Interests in Registered Investment Companies:
* Putnam Income Fund 212,194 $1,453,044 $1,487,484
* Putnam Global Growth Fund 170,887 1,708,786 1,849,000
* Putnam Voyager Fund 261,010 3,640,179 4,207,486
* Putnam S & P 500 Index Fund 127,927 1,553,429 2,176,036
---------- ----------
Total interests in registered
investment companies 8,355,438 9,720,006
---------- ----------
Common Stock:
* Frontier Corporation 406,317 9,928,100 9,192,876
---------- ----------
Participant Loans:
Participant loan accounts (average rate 8.5%) 1,105,515 1,105,515
---------- ----------
Insurance Company Pooled Separate Account:
Stable Value Fund 6,617,654 6,617,654
----------- -----------
Total investments $26,006,707 $26,636,051
=========== ===========
* Denotes party-in-interest
</TABLE>
<PAGE>
<PAGE> 17
<TABLE>
FRONTIER CORPORATION
BARGAINING UNIT EMPLOYEES' RETIREMENT SAVINGS PLAN
Line 27d - Schedule of Reportable Transactions Schedule II
- ------------------------------------------------------------------------------------
Number
Identity of Description of Purchase Selling
party involved of asset transactions price price
- ------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Series of Transactions:
Putnam Voyager Fund Registered Investments 182 $1,723,170 N/A
Stable Value Fund Insurance Company Pooled
Separate Account 241 1,929,920 N/A
Stable Value Fund Insurance Company Pooled
Separate Account 274 N/A $1,320,393
Frontier Corporation Common Stock 206 3,891,228 N/A
Frontier Corporation Common Stock 185 N/A 1,367,916
</TABLE>
<PAGE>
<PAGE> 18
<TABLE>
FRONTIER CORPORATION
BARGAINING UNIT EMPLOYEES' RETIREMENT SAVINGS PLAN
Line 27d - Schedule of Reportable Transactions Schedule II
- ------------------------------------------------------------------------------------
Expense Current value
incurred of asset on
Identity of Lease with Cost of transaction Net
party involved rental transaction asset date gain
- ------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Series of Transactions:
Putnam Voyager Fund N/A N/A $1,723,170 $1,723,170
Stable Value Fund N/A N/A 1,929,920 1,929,920
Stable Value Fund N/A N/A 1,320,393 1,320,393
Frontier Corporation N/A N/A 3,891,228 3,891,228
Frontier Corporation N/A N/A 1,176,054 1,367,916 $191,862
</TABLE>
<PAGE>
<PAGE> 19
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the trustees (or other persons who administer the employee benefit
plan) have duly caused this annual report to be signed on its behalf
by the undersigned duly authorized.
FRONTIER CORPORATION BARGAINING
UNIT EMPLOYEES' RETIREMENT
SAVINGS PLAN
Date: June 26, 1997 /s/Richard A. Smith
------------------------------
Richard A. Smith
Controller
EXHIBIT 23
CONSENT OF INDEPENDENT ACCOUNTANTS
We hereby consent to the incorporation by reference in the
Prospectus constituting part of the Registration Statement on
Form S-8 (File No. 33-52025) of Frontier Corporation of our
report dated April 25, 1997 appearing on page 2 of this Form 11-
K.
/s/Price Waterhouse
- ---------------------------
PRICE WATERHOUSE LLP
Rochester, New York
June 25, 1997
