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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) March 27, 1997
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 expects first quarter
earnings per share from normalized operations to be in the range
of $.22 to $.25 per share and announces non-recurring events which
will impact reported results by $.32 per share.
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)
Dated: March 27, 1997 By:/s/ Barbara J. LaVerdi
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Barbara J. LaVerdi
Assistant Secretary
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EXHIBIT INDEX
Exhibit Number Description
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99 Press Release dated Filed herewith
March 27, 1997 regarding
expected 1Q97 EPS from
normalized operations and
announced non-recurring
events which will impact
reported results.
TO: PRNewswire
FROM: FRONTIER CORPORATION
DATE: March 27, 1997
FOR: IMMEDIATE
TO: US1, NO HIGH TECH TRADES, FIRST CALL
NOTE: PLEASE ADD THIS AND ALL FRONTIER CORPORATION AND/OR
ROCHESTER TELEPHONE RELEASES TO COMPANY NEWS ON CALL.
PLEASE CALL 716-777-7954 WITH CLEAR TIME FOR EACH RELEASE.
THANK
DATE: March 27, 1997
CONTACT: Louis L. Massaro, Chief Financial Officer, 716-777-7940
Philip H. Yawman, 716-777-6179 (investors)
Randal A. Simonetti, 716-777-5886 (media)
SUMMARY: FRONTIER CORPORATION EXPECTS FIRST QUARTER EPS FROM NORMALIZED
OPERATIONS IN THE RANGE OF $.22 - $.25 PER SHARE; ANNOUNCES
NON-RECURRING EVENTS WHICH WILL IMPACT REPORTED RESULTS BY
$.32 PER SHARE
Rochester, N.Y. -- March 27, 1997 -- Frontier Corporation (NYSE:FRO)
announced today that slower than anticipated revenue growth and higher
bad debt in its long distance operations will impact operating
performance in the first quarter. Revenue in Frontier's core long
distance business is expected to be in the range of $400 million.
Frontier anticipates that earnings per share from normalized operations
for the quarter will be in the range of $.22 - $.25 per share. The
company also announced two non-recurring financial adjustments unrelated
to each other that it will make in the first quarter. The combined
effect of these two non-recurring items will reduce reported earnings
per share by $.32. Frontier expects to report actual first quarter
results on Wednesday, April 23.
Frontier is experiencing slower than anticipated revenue growth
from recent initiatives which include aggressively targeting larger
business accounts and more actively pursuing opportunities in the
prepaid calling card market. First quarter reported net revenue in
Frontier's long distance business is expected to be in the range of $400
million, roughly flat as compared to the fourth quarter of last year.
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Reported net revenue will include the impact of over $5 million of
incremental bad debt associated with two of the company's customers.
Separately, the company will record a non-recurring charge of $96.6
million, or $.38 per share, principally related to the write-off of
certain network costs no longer necessary to support long distance
traffic volumes in certain areas. Partially offsetting this charge will
be a gain on sale of $18.7 million, or $.06 per share associated with
the completed sale of Frontier's 69.5 percent equity interest in the
South Alabama Cellular Communications Partnership to Alltel. The
partnership provides cellular service to customers in Alabama RSA#4 and
Alabama RSA#6 and serves a combined population of over 258,000. The
combined effect of these two events will reduce reported earnings per
share by $.32 in the first quarter.
As previously announced, the migration of the 1+ traffic from
Frontier's largest wholesale customer accelerated during the fourth
quarter of 1996 and has continued into the first quarter of this year.
Recognizing the change in traffic volumes, an inventory of the company's
existing long distance network was performed and facilities no longer
necessary to support Frontier's revenue and traffic volumes were
identified. As a result, Frontier will record a non-recurring charge of
$96.6 million, or $.38 per share, principally for the elimination of
certain redundant network facilities and other related costs. The
elimination of redundant facilities in Frontier's existing leased
network will not impede revenue growth, rather it will facilitate a
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seamless migration of the majority of Frontier's traffic onto its own
state-of-the-art fiber optic network.
Through an alliance with Qwest Communications Corporation, Frontier
is constructing its own SONET based fiber-optic network. Frontier
expects to begin activating segments of this new network later this
year. When completed in 12 to 18 months, the network will create
competitive advantages in the form of network performance levels and
reliability when compared with other existing networks and will continue
to significantly reduce the company's network cost structure. "We've
begun to execute a plan that we believe will provide Frontier with the
most robust and cost-efficient network in the industry by the end of
1998. The elimination of unnecessary leasing costs and redundant
facilities in our existing network is an important first step in this
process," stated Massaro.
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 that 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.
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Frontier Corporation (NYSE:FRO) is the parent company whose long
distance, local telephone and wireless operations provide a range of
integrated communications services to customers. Frontier is a Fortune
500 company with annualized revenues approaching $2.6 billion. With
sales locations nationwide and nearly 8,000 employees, Frontier is the
fifth-largest long distance company in the United States.
You can receive a faxed copy of any Frontier Corporation press
release dating back to March 1996, 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
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