Document_and_Entity_Informatio
Document and Entity Information | 3 Months Ended | |
Mar. 31, 2015 | 1-May-15 | |
Document and Entity Information [Abstract] | ||
Entity Registrant Name | FRONTIER COMMUNICATIONS CORP | |
Entity Central Index Key | 20520 | |
Current Fiscal Year End Date | -19 | |
Entity Filer Category | Large Accelerated Filer | |
Entity Common Stock, Shares Outstanding | 1,003,308,000 | |
Document Fiscal Year Focus | 2015 | |
Document Fiscal Period Focus | Q1 | |
Document Type | 10-Q | |
Amendment Flag | FALSE | |
Document Period End Date | 31-Mar-15 |
Consolidated_Balance_Sheets
Consolidated Balance Sheets (USD $) | Mar. 31, 2015 | Dec. 31, 2014 |
In Millions, unless otherwise specified | ||
Current assets: | ||
Cash and cash equivalents | $509 | $682 |
Accounts receivable, less allowances of $59 and $72, respectively | 526 | 614 |
Prepaid expenses | 62 | 61 |
Income taxes and other current assets | 311 | 129 |
Total current assets | 1,408 | 1,486 |
Property, plant and equipment, net | 8,478 | 8,566 |
Goodwill | 7,213 | 7,205 |
Other intangibles, net | 1,408 | 1,500 |
Other assets | 214 | 217 |
Total assets | 18,721 | 18,974 |
Current liabilities: | ||
Long-term debt due within one year | 193 | 298 |
Accounts payable | 260 | 379 |
Advanced billings | 176 | 179 |
Accrued other taxes | 71 | 80 |
Accrued interest | 208 | 214 |
Pension and other postretirement benefits | 86 | 124 |
Other current liabilities | 446 | 238 |
Total current liabilities | 1,440 | 1,512 |
Deferred income taxes | 2,930 | 2,939 |
Pension and other postretirement benefits | 1,173 | 1,141 |
Other liabilities | 207 | 238 |
Long-term debt | 9,464 | 9,486 |
Equity: | ||
Common stock, $0.25 par value (1,750,000 authorized shares, 1,027,986 issued and 1,002,872 and 1,002,469 outstanding, respectively, at March 31, 2015 and December 31, 2014) | 257 | 257 |
Additional paid-in capital | 3,877 | 3,990 |
Retained earnings | 58 | 109 |
Accumulated other comprehensive loss, net of tax | -401 | -404 |
Treasury stock | -284 | -294 |
Total equity | 3,507 | 3,658 |
Total liabilities and equity | $18,721 | $18,974 |
Consolidated_Balance_Sheets_Pa
Consolidated Balance Sheets (Parenthetical) (USD $) | Mar. 31, 2015 | Dec. 31, 2014 |
In Millions, except Share data in Thousands, unless otherwise specified | ||
Consolidated Balance Sheets [Abstract] | ||
Allowances for accounts receivable, current | $59 | $72 |
Common stock, par value (in dollars per share) | $0.25 | $0.25 |
Common stock, shares authorized (in shares) | 1,750,000 | 1,750,000 |
Common stock, shares outstanding (in shares) | 1,002,872 | 1,002,469 |
Common stock, shares issued (in shares) | 1,027,986 | 1,027,986 |
Consolidated_Statements_Of_Ope
Consolidated Statements Of Operations (USD $) | 3 Months Ended | |
In Millions, except Per Share data, unless otherwise specified | Mar. 31, 2015 | Mar. 31, 2014 |
Consolidated Statements Of Operations [Abstract] | ||
Revenue | $1,371 | $1,154 |
Operating expenses: | ||
Network access expenses | 155 | 107 |
Network related expenses | 325 | 263 |
Selling, general and administrative expenses | 330 | 266 |
Depreciation and amortization | 341 | 281 |
Acquisition and integration costs | 57 | 11 |
Total operating expenses | 1,208 | 928 |
Operating income | 163 | 226 |
Investment and other income, net | 1 | 1 |
Interest expense | 245 | 171 |
Income (loss) before income taxes | -81 | 56 |
Income tax expense (benefit) | -30 | 17 |
Net income (loss) | ($51) | $39 |
Basic and diluted net income (loss) per common share (in dollars per share) | ($0.05) | $0.04 |
Consolidated_Statements_Of_Com
Consolidated Statements Of Comprehensive Income (Loss) (USD $) | 3 Months Ended | |
In Millions, unless otherwise specified | Mar. 31, 2015 | Mar. 31, 2014 |
Consolidated Statements Of Comprehensive Income (Loss) [Abstract] | ||
Net income (loss) | ($51) | $39 |
Other comprehensive income, net of tax (see Note 12) | 3 | 3 |
Comprehensive income (loss) | ($48) | $42 |
Consolidated_Statements_Of_Equ
Consolidated Statements Of Equity (USD $) | Common Stock [Member] | Additional Paid-in Capital [Member] | Retained Earnings [Member] | Accumulated Other Comprehensive Loss [Member] | Treasury Stock [Member] | Total |
In Millions, except Share data in Thousands | ||||||
Balance at Dec. 31, 2014 | $257 | $3,990 | $109 | ($404) | ($294) | $3,658 |
Balance (in shares) at Dec. 31, 2014 | 1,027,986 | 25,517 | 1,002,469 | |||
Stock plans | -8 | 10 | 2 | |||
Stock plans (in shares) | 403 | |||||
Dividends on common stock | -105 | -105 | ||||
Net income | -51 | -51 | ||||
Other comprehensive income, net of tax | 3 | 3 | ||||
Balance at Mar. 31, 2015 | $257 | $3,877 | $58 | ($401) | ($284) | $3,507 |
Balance (in shares) at Mar. 31, 2015 | 1,027,986 | 25,114 | 1,002,872 |
Consolidated_Statements_Of_Cas
Consolidated Statements Of Cash Flows (USD $) | 3 Months Ended | |
In Millions, unless otherwise specified | Mar. 31, 2015 | Mar. 31, 2014 |
Cash flows provided by (used in) operating activities: | ||
Net income (loss) | ($51) | $39 |
Adjustments to reconcile net income to net cash provided by operating activities: | ||
Depreciation and amortization | 341 | 281 |
Pension/OPEB costs | 2 | 3 |
Stock based compensation expense | 7 | 6 |
Other non-cash adjustments | 50 | 10 |
Deferred income taxes | -33 | -22 |
Change in accounts receivable | 87 | 16 |
Change in accounts payable and other liabilities | -138 | -71 |
Change in prepaid expenses, income taxes and other current assets | -16 | 51 |
Net cash provided by operating activities | 249 | 313 |
Cash flows provided from (used by) investing activities: | ||
Capital expenditures - Business operations | -170 | -135 |
Capital expenditures - Integration activities | -10 | -10 |
Network expansion funded by Connect America Fund | -9 | -6 |
Grant funds received for network expansion from Connect America Fund | 4 | |
Other | 13 | |
Net cash used by investing activities | -189 | -134 |
Cash flows provided from (used by) financing activities: | ||
Long-term debt borrowings | 3 | 11 |
Long-term debt payments | -129 | -14 |
Dividends paid | -105 | -100 |
Other | -2 | -2 |
Net cash used by financing activities | -233 | -105 |
(Decrease)/Increase in cash and cash equivalents | -173 | 74 |
Cash and cash equivalents at January 1, | 682 | 880 |
Cash and cash equivalents at March 31, | 509 | 954 |
Cash paid (received) during the period for: | ||
Interest | 189 | 146 |
Income taxes (refunds), net | $17 | ($5) |
Summary_Of_Significant_Account
Summary Of Significant Accounting Policies | 3 Months Ended |
Mar. 31, 2015 | |
Summary Of Significant Accounting Policies [Abstract] | |
Summary of Significant Accounting Policies | (1) Summary of Significant Accounting Policies: |
(a) Basis of Presentation and Use of Estimates: | |
Frontier Communications Corporation and its subsidiaries are referred to as “we,” “us,” “our,” “Frontier,” or the “Company” in this report. Our interim unaudited consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (U.S. GAAP) and should be read in conjunction with the consolidated financial statements and notes included in our Annual Report on Form 10-K for the year ended December 31, 2014. Certain reclassifications of amounts previously reported have been made to conform to the current presentation. All significant intercompany balances and transactions have been eliminated in consolidation. These interim unaudited consolidated financial statements include all adjustments (consisting of normal recurring accruals) considered necessary, in the opinion of Frontier’s management, to present fairly the results for the interim periods shown. Revenues, net income (loss) and cash flows for any interim periods are not necessarily indicative of results that may be expected for the full year. For our interim financial statements as of and for the period ended March 31, 2015, we evaluated subsequent events and transactions for potential recognition or disclosure through the date that we filed this quarterly report on Form 10-Q with the Securities and Exchange Commission (SEC). | |
Effective October 24, 2014, Frontier’s scope of operations and balance sheet capitalization changed materially as a result of the completion of the Connecticut Acquisition, as described in Note 3 - Acquisitions. Historical financial data presented for Frontier is not indicative of the future financial position or operating results for Frontier, and includes the results of the Connecticut operations, as defined in Note 3 – Acquisitions, from the date of acquisition on October 24, 2014. | |
The preparation of our interim financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect (i) the reported amounts of assets and liabilities at the date of the financial statements, (ii) the disclosure of contingent assets and liabilities, and (iii) the reported amounts of revenue and expenses during the reporting period. Actual results may differ from those estimates. Estimates and judgments are used when accounting for the allowance for doubtful accounts, asset impairments, indefinite-lived intangibles, depreciation and amortization, income taxes, business combinations, and pension and other postretirement benefits, among others. Certain information and footnote disclosures have been excluded and/or condensed pursuant to SEC rules and regulations. | |
We operate in one reportable segment. Frontier provides both regulated and unregulated voice, data and video services to residential, business and wholesale customers and is typically the incumbent voice services provider in its service areas. We have utilized the aggregation criteria to combine our five operating segments because all of our properties share similar economic characteristics, in that they provide the same products and services to similar customers using comparable technologies in all of the states in which we operate. The regulatory structure is generally similar. Differences in the regulatory regime of a particular state do not significantly impact the economic characteristics or operating results of a particular property. | |
(b) Revenue Recognition: | |
Revenue is recognized when services are provided or when products are delivered to customers. Revenue that is billed in advance includes: monthly recurring network access services (including data services), special access services and monthly recurring voice, video and related charges. The unearned portion of these fees is initially deferred as a component of “Advanced billings” on our consolidated balance sheet and recognized as revenue over the period that the services are provided. Revenue that is billed in arrears includes: non-recurring network access services (including data services), switched access services, non-recurring voice and video services. The earned but unbilled portion of these fees is recognized as revenue in our consolidated statements of operations and accrued in “Accounts receivable” in the period that the services are provided. Excise taxes are recognized as a liability when billed. Installation fees and their related direct and incremental costs are initially deferred and recognized as revenue and expense over the average term of a customer relationship. We recognize as current period expense the portion of installation costs that exceeds installation fee revenue. | |
The Company collects various taxes from its customers and subsequently remits these taxes to governmental authorities. Substantially all of these taxes are recorded through the consolidated balance sheet and presented on a net basis in our consolidated statements of operations. We also collect Universal Service Fund (USF) surcharges from customers (primarily federal USF) that we have recorded on a gross basis in our consolidated statements of operations and included within “Revenue” and “Network related expenses” of $37 million and $30 million for the three months ended March 31, 2015 and 2014, respectively. | |
(c) Goodwill and Other Intangibles: | |
Goodwill represents the excess of purchase price over the fair value of identifiable tangible and intangible net assets acquired. We undertake studies to determine the fair values of assets and liabilities acquired and allocate purchase prices to assets and liabilities, including property, plant and equipment, goodwill and other identifiable intangibles. We examine the carrying value of our goodwill and trade name annually as of December 31, or more frequently, as circumstances warrant, to determine whether there are any impairment losses. We test for goodwill impairment at the “operating segment” level, as that term is defined in U.S. GAAP. | |
The Company amortizes finite-lived intangible assets over their estimated useful lives on the accelerated method of sum of the years digits. We review such intangible assets at least annually as of December 31 to assess whether any potential impairment exists and whether factors exist that would necessitate a change in useful life and a different amortization period. | |
Recent_Accounting_Literature
Recent Accounting Literature | 3 Months Ended |
Mar. 31, 2015 | |
Recent Accounting Literature [Abstract] | |
Recent Accounting Literature | |
(2) Recent Accounting Literature: | |
Debt Issuance Costs | |
In April, 2015, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) No. 2015-03, “Interest – Imputation of Interest (Subtopic 835-30): Simplifying the Presentation of Debt Issuance Costs.” This standard requires that debt issuance costs related to a recognized debt liability be presented in the balance sheet as a direct deduction from the carrying amount of that debt liability, consistent with debt discounts. This new standard is effective for annual and interim reporting periods beginning after December 15, 2015. Early adoption is permitted and companies must apply the requirements retrospectively. At this time, the Company has not elected the early adoption method for this standard. This new standard is not expected to have a material impact on the Company’s consolidated financial statements, as the debt issuance costs included in “Other assets” were $98 million at March 31, 2015. | |
Revenue Recognition | |
In May 2014, the FASB issued ASU No. 2014-09, “Revenue from Contracts with Customers.” This standard requires companies to recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the company expects to be entitled in exchange for those goods or services. This new standard is effective for annual and interim reporting periods beginning after December 15, 2016. Early adoption is not permitted. Companies are permitted to either apply the requirements retrospectively to all prior periods presented, or apply the requirements in the year of adoption, through a cumulative adjustment. In April 2015, the FASB voted in favor of proposing a one year delay of the effective date and to permit companies to voluntarily adopt the new standard as of the original effective date. The Company is currently evaluating the impact of adopting the new standard, but has not yet selected a transition method or determined the impact of adoption on its consolidated financial statements. | |
Acquisitions
Acquisitions | 3 Months Ended | ||||
Mar. 31, 2015 | |||||
Acquisitions [Abstract] | |||||
Acquisitions | (3) Acquisitions: | ||||
The Connecticut Acquisition | |||||
On October 24, 2014, pursuant to the stock purchase agreement dated December 16, 2013, as amended, the Company acquired the wireline properties of AT&T Inc. (AT&T) in Connecticut (the Connecticut Acquisition) for a purchase price of $2,018 million in cash. Following the Connecticut Acquisition, Frontier now owns and operates the wireline business and fiber optic network servicing residential, commercial and wholesale customers in Connecticut. The Company also acquired the AT&T U-verse® video and DISH® satellite TV customers in Connecticut. | |||||
In connection with the Connecticut Acquisition, the Company incurred $21 million of operating expenses, consisting of $1 million and $20 million of acquisition and integration costs, respectively, and $10 million in capital expenditures during the three months ended March 31, 2015. The Company incurred $11 million of operating expenses, consisting of $2 million and $9 million of acquisition and integration costs, respectively, and $10 million in capital expenditures related to the Connecticut Acquisition during the three months ended March 31, 2014. | |||||
Our consolidated statement of operations for the three months ended March 31, 2015 includes $264 million of revenue and $15 million of operating income related to the results of the Connecticut operations. | |||||
The preliminary allocation of the purchase price presented below represents the effect of recording the preliminary estimates of the fair value of assets acquired, liabilities assumed and related deferred income taxes as of the date of the Connecticut Acquisition, based on the total transaction consideration of $2,018 million. These preliminary estimates will be revised in future periods for information that is currently not available to us, primarily related to the tax basis of assets acquired, certain accruals and contingencies, pension assets and liabilities, as well as other assumed postretirement benefit obligations. The revisions may affect the presentation of our consolidated financial results. Any changes to the initial estimates of the fair value of the assets and liabilities will be recorded as adjustments to those assets and liabilities and residual amounts will be allocated to goodwill. | |||||
The most significant items subject to change include: legal and tax accruals; accounts receivable; property, plant and equipment; customer list intangibles; deferred income tax assets and liabilities, pending AT&T providing us with tax values for the assets and liabilities of the Connecticut operations; and pension and other postretirement liabilities, pending completion of actuarial studies. | |||||
($ in millions) | |||||
Current assets | $ | 73 | |||
Property, plant & equipment | 1,450 | ||||
Goodwill | 875 | ||||
Other intangibles - customer list | 590 | ||||
Current liabilities | -103 | ||||
Deferred income taxes | -648 | ||||
Other liabilities | -219 | ||||
Total net assets acquired | $ | 2,018 | |||
The stock purchase agreement provides for a post-closing adjustment for pension liabilities transferred and pension assets. Frontier and AT&T have not finalized the results of these calculations. Such calculations will be completed in accordance with the terms of the stock purchase agreement. | |||||
The following unaudited pro forma financial information presents the combined results of operations of Frontier and the Connecticut operations as if the Connecticut Acquisition had occurred as of January 1, 2014. The pro forma information is not necessarily indicative of what the financial position or results of operations actually would have been had the Connecticut Acquisition been completed as of January 1, 2014. In addition, the unaudited pro forma financial information is not indicative of, nor does it purport to project, the future financial position or operating results of Frontier. The unaudited pro forma financial information excludes acquisition and integration costs and does not give effect to any estimated and potential cost savings or other operating efficiencies that may result from the Connecticut Acquisition. | |||||
($ in millions, except per share amounts) | (Unaudited) | ||||
For the three months ended | |||||
31-Mar-14 | |||||
Revenue | $ | 1,463 | |||
Operating income | $ | 245 | |||
Net income | $ | 36 | |||
Basic and diluted net income per | |||||
common share | $ | 0.04 | |||
The Verizon Transaction | |||||
On February 5, 2015, we entered into an agreement with Verizon Communications Inc. (Verizon) to acquire Verizon’s wireline operations that provide services to residential, commercial and wholesale customers in California, Florida and Texas for a purchase price of $10.54 billion in cash and assumed debt (the Verizon Transaction), with adjustments for working capital. Upon completion of the pending Verizon Transaction, Frontier will operate Verizon properties which included 3.7 million voice connections, 2.2 million broadband connections, and 1.2 million FiOS® video connections as of December 31, 2014. Subject to regulatory approval, the transaction is expected to close in the first half of 2016. | |||||
The Company incurred $36 million of operating expenses, consisting of $33 million and $3 million of acquisition and integration costs, respectively, related to the pending Verizon Transaction during the three months ended March 31, 2015. | |||||
Frontier has received a commitment for bridge financing from J.P. Morgan, Bank of America Merrill Lynch and Citibank for the Verizon Transaction. See Note 8 for further discussion related to financing the pending Verizon Transaction. | |||||
Accounts_Receivable
Accounts Receivable | 3 Months Ended | ||||||
Mar. 31, 2015 | |||||||
Accounts Receivable [Abstract] | |||||||
Accounts Receivable | (4) Accounts Receivable: | ||||||
The components of accounts receivable, net are as follows: | |||||||
($ in millions) | 31-Mar-15 | 31-Dec-14 | |||||
Retail and Wholesale | $ | 539 | $ | 630 | |||
Other | 46 | 56 | |||||
Less: Allowance for doubtful accounts | -59 | -72 | |||||
Accounts receivable, net | $ | 526 | $ | 614 | |||
We maintain an allowance for doubtful accounts based on our estimate of our ability to collect accounts receivable. Bad debt expense, which is recorded as a reduction to revenue, was $13 million for each of the three months ended March 31, 2015 and 2014, respectively. Our allowance for doubtful accounts declined in the first quarter of 2015, primarily as a result of the resolution of a principal carrier dispute. | |||||||
Property_Plant_And_Equipment
Property, Plant And Equipment | 3 Months Ended | ||||||
Mar. 31, 2015 | |||||||
Property, Plant And Equipment [Abstract] | |||||||
Property, Plant And Equipment | (5) Property, Plant and Equipment: | ||||||
Property, plant and equipment, net is as follows: | |||||||
($ in millions) | 31-Mar-15 | 31-Dec-14 | |||||
Property, plant and equipment | $ | 17,095 | $ | 16,946 | |||
Less: Accumulated depreciation | -8,617 | -8,380 | |||||
Property, plant and equipment, net | $ | 8,478 | $ | 8,566 | |||
Depreciation expense is principally based on the composite group method. Depreciation expense was $249 million and $206 million for the three months ended March 31, 2015 and 2014, respectively. We adopted new estimated remaining useful lives for certain plant assets as of October 1, 2014, as a result of our annual independent study of the estimated remaining useful lives of our plant assets, with an insignificant impact to depreciation expense. In addition, we commissioned an independent study to determine the estimated useful lives for assets acquired during the Connecticut Acquisition. These new lives were adopted effective October 24, 2014. | |||||||
Goodwill_And_Other_Intangibles
Goodwill And Other Intangibles | 3 Months Ended | ||||||||||||||||||
Mar. 31, 2015 | |||||||||||||||||||
Goodwill And Other Intangibles [Abstract] | |||||||||||||||||||
Goodwill And Other Intangibles | (6) Goodwill and Other Intangibles: | ||||||||||||||||||
The activity in our goodwill from December 31, 2014 to March 31, 2015 is as follows: | |||||||||||||||||||
($ in millions) | |||||||||||||||||||
Balance at January 1, 2015 | $ | 7,205 | |||||||||||||||||
Connecticut Acquisition (Note 3) | 8 | ||||||||||||||||||
Balance at March 31, 2015 | $ | 7,213 | |||||||||||||||||
The components of other intangibles are as follows: | |||||||||||||||||||
($ in millions) | 31-Mar-15 | 31-Dec-14 | |||||||||||||||||
Gross Carrying | Accumulated | Net Carrying | Gross Carrying | Accumulated | Net Carrying | ||||||||||||||
Amount | Amortization | Amount | Amount | Amortization | Amount | ||||||||||||||
Other Intangibles: | |||||||||||||||||||
Customer list | $ | 3,018 | $ | -1,732 | $ | 1,286 | $ | 3,018 | $ | -1,640 | $ | 1,378 | |||||||
Trade name | 122 | - | 122 | 122 | - | 122 | |||||||||||||
Total other intangibles | $ | 3,140 | $ | -1,732 | $ | 1,408 | $ | 3,140 | $ | -1,640 | $ | 1,500 | |||||||
Amortization expense was $92 million and $75 million for the three months ended March 31, 2015 and 2014, respectively. Amortization expense represents the amortization of our customer list acquired as a result of the Connecticut Acquisition and the acquisition of certain Verizon properties in 2010 (the 2010 Acquisition) based on a useful life of 9 to 12 years on an accelerated method. | |||||||||||||||||||
Fair_Value_Of_Financial_Instru
Fair Value Of Financial Instruments | 3 Months Ended | ||||||||||||
Mar. 31, 2015 | |||||||||||||
Fair Value Of Financial Instruments [Abstract] | |||||||||||||
Fair Value Of Financial Instruments | (7) Fair Value of Financial Instruments: | ||||||||||||
The following table summarizes the carrying amounts and estimated fair values for long-term debt at March 31, 2015 and December 31, 2014. For the other financial instruments including cash, accounts receivable, long-term debt due within one year, accounts payable and other current liabilities, the carrying amounts approximate fair value due to the relatively short maturities of those instruments. | |||||||||||||
The fair value of our long-term debt is estimated based upon quoted market prices at the reporting date for those financial instruments. | |||||||||||||
($ in millions) | 31-Mar-15 | 31-Dec-14 | |||||||||||
Carrying Amount | Fair Value | Carrying Amount | Fair Value | ||||||||||
Long-term debt | $ | 9,464 | $ | 9,995 | $ | 9,486 | $ | 10,034 | |||||
LongTerm_Debt
Long-Term Debt | 3 Months Ended | ||||||||||||||
Mar. 31, 2015 | |||||||||||||||
Long-Term Debt [Abstract] | |||||||||||||||
Long-Term Debt | |||||||||||||||
(8) Long-Term Debt: | |||||||||||||||
The activity in our long-term debt from December 31, 2014 to March 31, 2015 is summarized as follows: | |||||||||||||||
Three months ended | |||||||||||||||
31-Mar-15 | Interest | ||||||||||||||
Rate at | |||||||||||||||
December 31, | Payments | New | March 31, | March 31, | |||||||||||
($ in millions) | 2014 | and Retirements | Borrowings | 2015 | 2015 * | ||||||||||
Senior Unsecured Debt | $ | 9,750 | $ | -128 | $ | - | $ | 9,622 | 7.68% | ||||||
Other Secured Debt | 23 | -1 | 3 | 25 | 3.38% | ||||||||||
Rural Utilities Service Loan Contracts | 8 | - | - | 8 | 6.15% | ||||||||||
Total Long-Term Debt | $ | 9,781 | $ | -129 | $ | 3 | $ | 9,655 | 7.66% | ||||||
Less: Debt (Discount)/Premium | 3 | 2 | |||||||||||||
Less: Current Portion | -298 | -193 | |||||||||||||
$ | 9,486 | $ | 9,464 | ||||||||||||
* Interest rate includes amortization of debt issuance costs and debt premiums or discounts. The interest rates at March 31, 2015 represent a weighted average of multiple issuances. | |||||||||||||||
Additional information regarding our Senior Unsecured Debt is as follows: | |||||||||||||||
($ in millions) | 31-Mar-15 | 31-Dec-14 | |||||||||||||
Principal | Interest | Principal | Interest | ||||||||||||
Outstanding | Rate | Outstanding | Rate | ||||||||||||
Senior Notes and Debentures Due: | |||||||||||||||
3/15/15 | - | - | 105 | 6.63% | |||||||||||
4/15/15 | 97 | 7.88% | 97 | 7.88% | |||||||||||
10/14/2016 * | 388 | 3.555% (Variable) | 402 | 3.045% (Variable) | |||||||||||
4/15/17 | 607 | 8.25% | 607 | 8.25% | |||||||||||
10/1/18 | 583 | 8.13% | 583 | 8.13% | |||||||||||
3/15/19 | 434 | 7.12% | 434 | 7.12% | |||||||||||
10/24/2019 ** | 341 | 3.555% (Variable) | 350 | 3.545% (Variable) | |||||||||||
4/15/20 | 1,022 | 8.50% | 1,022 | 8.50% | |||||||||||
7/1/21 | 500 | 9.25% | 500 | 9.25% | |||||||||||
9/15/21 | 775 | 6.25% | 775 | 6.25% | |||||||||||
4/15/22 | 500 | 8.75% | 500 | 8.75% | |||||||||||
1/15/23 | 850 | 7.12% | 850 | 7.12% | |||||||||||
4/15/24 | 750 | 7.63% | 750 | 7.63% | |||||||||||
1/15/25 | 775 | 6.88% | 775 | 6.88% | |||||||||||
11/1/25 | 138 | 7.00% | 138 | 7.00% | |||||||||||
8/15/26 | 2 | 6.80% | 2 | 6.80% | |||||||||||
1/15/27 | 346 | 7.88% | 346 | 7.88% | |||||||||||
8/15/31 | 945 | 9.00% | 945 | 9.00% | |||||||||||
10/1/34 | 1 | 7.68% | 1 | 7.68% | |||||||||||
7/1/35 | 125 | 7.45% | 125 | 7.45% | |||||||||||
10/1/46 | 193 | 7.05% | 193 | 7.05% | |||||||||||
9,372 | 9,500 | ||||||||||||||
Subsidiary Debentures Due: | |||||||||||||||
2/15/2028 | 200 | 6.73% | 200 | 6.73% | |||||||||||
10/15/2029 | 50 | 8.40% | 50 | 8.40% | |||||||||||
Total | $ | 9,622 | 7.49% *** | $ | 9,750 | 7.45% *** | |||||||||
* Represents borrowings under the 2011 CoBank Credit Agreement, as defined below. | |||||||||||||||
** Represents borrowings under the 2014 CoBank Credit Agreement, as defined below. | |||||||||||||||
*** Interest rate represents a weighted average of the stated interest rates of multiple issuances. | |||||||||||||||
During the first three months of 2015, we entered into secured financings totaling $3 million with four year terms and no stated interest rate for certain equipment purchases. | |||||||||||||||
On February 5, 2015, we signed a commitment letter for a bridge loan facility (the Verizon Bridge Facility) and recognized related interest expense of $58 million, which is also included in “Other non-cash adjustments” in the consolidated statements of cash flows, during the three months ended March 31, 2015. The deferred costs and accrued liabilities related to the Verizon Bridge Facility of $143 million and $201 million are included in “Income taxes and other current assets” and “Other current liabilities,” respectively, in the consolidated balance sheets as of March 31, 2015. The Verizon Bridge Facility was entered into by the Company, the lenders party thereto (the Lenders) and JPMorgan Chase Bank, N.A., as administrative agent, pursuant to which the Lenders have agreed to provide us an unsecured bridge loan facility for up to $10.9 billion for the purposes of funding (i) substantially all of the purchase price for the Verizon Transaction and (ii) the fees and expenses incurred in connection with the transactions contemplated by the securities purchase agreement for the Verizon Transaction. Pursuant to the Verizon Bridge Facility, if and to the extent we do not, or are unable to, issue debt and equity securities yielding up to $10.9 billion in gross cash proceeds on or prior to the closing of the Verizon Transaction, we may draw down up to $10.9 billion, less the amount of the debt and equity securities, if any, issued by us on or prior to the closing of the Verizon Transaction, in aggregate principal amount of loans under the Verizon Bridge Facility. | |||||||||||||||
The Company has a credit agreement with CoBank, ACB, as administrative agent, lead arranger and a lender, and the other lenders party thereto, for a $350 million senior unsecured delayed draw term loan facility (the 2014 CoBank Credit Agreement). The facility was drawn upon closing of the Connecticut Acquisition with proceeds used to partially finance the acquisition. The maturity date is October 24, 2019. Repayment of the outstanding principal balance will be made in quarterly installments of $9 million, which commenced on March 31, 2015, with the remaining outstanding principal balance to be repaid on the maturity date. Borrowings under the 2014 CoBank Credit Agreement bear interest based on the margins over the Base Rate (as defined in the 2014 CoBank Credit Agreement) or LIBOR, at the election of the Company. Interest rate margins under the facility (ranging from 0.875% to 2.875% for Base Rate borrowings and 1.875% to 3.875% for LIBOR borrowings) are subject to adjustments based on the Total Leverage Ratio of the Company, as such term is defined in the 2014 CoBank Credit Agreement. The interest rate on this facility at March 31, 2015 was LIBOR plus 3.375%. | |||||||||||||||
The Company has a credit agreement with CoBank, ACB, as administrative agent, lead arranger and a lender, and the other lenders party thereto, for a $575 million senior unsecured term loan facility with a final maturity of October 14, 2016 (the 2011 CoBank Credit Agreement). The entire facility was drawn upon execution of the 2011 CoBank Credit Agreement in October 2011. Repayment of the outstanding principal balance is made in quarterly installments of $14 million, which commenced on March 31, 2012, with the remaining outstanding principal balance to be repaid on the final maturity date. Borrowings under the 2011 CoBank Credit Agreement bear interest based on the margins over the Base Rate (as defined in the 2011 CoBank Credit Agreement) or LIBOR, at the election of the Company. Interest rate margins under the facility (ranging from 0.875% to 2.875% for Base Rate borrowings and 1.875% to 3.875% for LIBOR borrowings) are subject to adjustments based on the Total Leverage Ratio of the Company, as such term is defined in the 2011 CoBank Credit Agreement. The interest rate on this facility at March 31, 2015 was LIBOR plus 3.375%. | |||||||||||||||
The Company has a revolving credit agreement with JPMorgan Chase Bank, N.A., as administrative agent, the lenders party thereto and the other parties named therein (the Revolving Credit Agreement), for a $750 million revolving credit facility (the Revolving Credit Facility) with a scheduled termination date of May 31, 2018. As of March 31, 2015, the Revolving Credit Facility was fully available and no borrowings had been made thereunder. Associated commitment fees under the Revolving Credit Facility will vary from time to time depending on the Company’s debt rating (as defined in the Revolving Credit Agreement) and were 0.450% per annum as of March 31, 2015. During the term of the Revolving Credit Facility, the Company may borrow, repay and reborrow funds, and may obtain letters of credit, subject to customary borrowing conditions. Loans under the Revolving Credit Facility will bear interest based on the alternate base rate or the adjusted LIBO Rate (each as determined in the Revolving Credit Agreement), at the Company’s election, plus a margin based on the Company’s debt rating (ranging from 0.50% to 1.50% for alternate base rate borrowings and 1.50% to 2.50% for adjusted LIBO Rate borrowings). The interest rate on this facility at March 31, 2015 would have been the alternate base rate plus 1.50% or the adjusted LIBO Rate plus 2.50%, respectively. Letters of credit issued under the Revolving Credit Facility will also be subject to fees that vary depending on the Company’s debt rating. The Revolving Credit Facility is available for general corporate purposes but may not be used to fund dividend payments. | |||||||||||||||
As of March 31, 2015, we were in compliance with all of our debt and credit facility financial covenants. | |||||||||||||||
Our future principal payments are as follows as of March 31, 2015: | |||||||||||||||
Principal | |||||||||||||||
($ in millions) | Payments | ||||||||||||||
2015 (remaining nine months) | $ | 169 | |||||||||||||
2016 | $ | 384 | |||||||||||||
2017 | $ | 646 | |||||||||||||
2018 | $ | 620 | |||||||||||||
2019 | $ | 645 | |||||||||||||
2020 | $ | 1,022 | |||||||||||||
Thereafter | $ | 6,169 | |||||||||||||
Income_Taxes
Income Taxes | 3 Months Ended | ||||||
Mar. 31, 2015 | |||||||
Income Taxes [Abstract] | |||||||
Income Taxes | (9) Income Taxes: | ||||||
The following is a reconciliation of income taxes computed at the federal statutory rate to income taxes computed at the effective rate: | |||||||
For the three months ended | |||||||
March 31, | |||||||
2015 | 2014 | ||||||
Consolidated tax provision at federal statutory rate | 35.0 | % | 35.0 | % | |||
State income tax provisions, net of federal income | |||||||
tax benefit | 2.5 | 0.3 | |||||
Changes in certain deferred tax balances | - | -5.1 | |||||
All other, net | -0.4 | 0.2 | |||||
Effective tax rate | 37.1 | % | 30.4 | % | |||
Income taxes for the three months ended March 31, 2014 include the impact of a $3 million benefit arising from state tax law changes. | |||||||
Net_Income_Loss_Per_Common_Sha
Net Income (Loss) Per Common Share | 3 Months Ended | |||||
Mar. 31, 2015 | ||||||
Net Income (Loss) Per Common Share [Abstract] | ||||||
Net Income (Loss) Per Common Share | (10) Net Income (Loss) Per Common Share: | |||||
The reconciliation of the net income (loss) per common share calculation is as follows: | ||||||
For the three months ended | ||||||
($ in millions and shares in thousands, except per share amounts) | March 31, | |||||
2015 | 2014 | |||||
Net income (loss) used for basic and diluted earnings | ||||||
per common share: | ||||||
Net income (loss) | $ | -51 | $ | 39 | ||
Less: Dividends paid on unvested restricted stock awards | -1 | -1 | ||||
Total basic and diluted net income (loss) | $ | -52 | $ | 38 | ||
Basic earnings per common share: | ||||||
Total weighted average shares and unvested restricted stock | ||||||
awards outstanding - basic | 1,002,173 | 1,000,960 | ||||
Less: Weighted average unvested restricted stock awards | -7,457 | -6,934 | ||||
Total weighted average shares outstanding - basic | 994,716 | 994,026 | ||||
Basic net income (loss) per common share | $ | -0.05 | $ | 0.04 | ||
Diluted earnings per common share: | ||||||
Total weighted average shares outstanding - basic | 994,716 | 994,026 | ||||
Effect of dilutive shares | - | 1,502 | ||||
Total weighted average shares outstanding - diluted | 994,716 | 995,528 | ||||
Diluted net income (loss) per common share | $ | -0.05 | $ | 0.04 | ||
Stock Options | ||||||
For each of the three months ended March 31, 2015 and 2014, options to purchase 83,000 shares, issuable under employee compensation plans were excluded from the computation of diluted earnings per share (EPS) for those periods because the exercise prices were greater than the average market price of our common stock and, therefore, the effect would be antidilutive. In calculating diluted EPS, we apply the treasury stock method and include future unearned compensation as part of the assumed proceeds. | ||||||
Stock Units | ||||||
At March 31, 2015 and 2014, we had 1,166,000 and 1,314,000 stock units, respectively, issued under our Non-Employee Directors’ Deferred Fee Equity Plan (Deferred Fee Plan) and the Non-Employee Directors’ Equity Incentive Plan (Directors’ Equity Plan). These securities have not been included in the diluted income per share of common stock calculation because their inclusion would have an antidilutive effect. Compensation costs associated with the issuance of stock units were $1 million and $2 million for the three months ended March 31, 2015 and 2014, respectively. | ||||||
In calculating diluted net loss per common share for the three months ended March 31, 2015, the effect of common stock equivalents is excluded from the computation as the effect would be antidilutive. | ||||||
Stock_Plans
Stock Plans | 3 Months Ended | ||||||||
Mar. 31, 2015 | |||||||||
Stock Plans [Abstract] | |||||||||
Stock Plans | (11) Stock Plans: | ||||||||
At March 31, 2015, we had six stock-based compensation plans under which grants were made and awards remained outstanding. No further awards may be granted under four of the plans: the 1996 Equity Incentive Plan (the 1996 EIP), the Amended and Restated 2000 Equity Incentive Plan (the 2000 EIP), the 2009 Equity Incentive Plan (the 2009 EIP) and the Deferred Fee Plan. At March 31, 2015, there were 22,541,000 shares authorized for grant and 12,580,000 shares available for grant under the 2013 Equity Incentive Plan (the 2013 EIP and together with the 1996 EIP, the 2000 EIP and the 2009 EIP, the EIPs) and the Directors’ Equity Plan. Our general policy is to issue shares from treasury upon the grant of restricted shares and the exercise of options. | |||||||||
Performance Shares | |||||||||
On February 25, 2015, the Compensation Committee granted approximately 665,000 performance shares under the Frontier Long Term Incentive Plan (the LTIP) and set the operating cash flow performance goal for 2015, which applies to the first year in the 2015-2017 measurement period, the second year of the 2014-2016 measurement period and the third year of the 2013-2015 measurement period. | |||||||||
The following summary presents information regarding LTIP target performance shares as of March 31, 2015 and changes during the three months then ended with regard to LTIP shares awarded under the 2009 EIP and the 2013 EIP: | |||||||||
Number of | |||||||||
Shares | |||||||||
(in thousands) | |||||||||
Balance at January 1, 2015 | 2,682 | ||||||||
LTIP target performance shares granted | 738 | ||||||||
LTIP target performance shares earned | -743 | ||||||||
LTIP target performance shares forfeited | -116 | ||||||||
Balance at March 31, 2015 | 2,561 | ||||||||
For purposes of determining compensation expense, the fair value of each performance share is measured at the end of each reporting period and, therefore, will fluctuate based on the price of Frontier common stock as well as performance relative to the targets. For the three months ended March 31, 2015 and 2014, the Company recognized an expense of $2 million and $1 million, respectively, for the LTIP. | |||||||||
Restricted Stock | |||||||||
The following summary presents information regarding unvested restricted stock as of March 31, 2015 and changes during the three months then ended with regard to restricted stock under the 2009 EIP and the 2013 EIP: | |||||||||
Weighted | |||||||||
Average | |||||||||
Number of | Grant Date | Aggregate | |||||||
Shares | Fair Value | Fair Value | |||||||
(in thousands) | (per share) | (in millions) | |||||||
Balance at January 1, 2015 | 7,807 | $ | 4.75 | $ | 52 | ||||
Restricted stock granted | 2,763 | $ | 7.98 | $ | 19 | ||||
Restricted stock vested | -3,163 | $ | 4.9 | $ | 22 | ||||
Restricted stock forfeited | -199 | $ | 4.49 | ||||||
Balance at March 31, 2015 | 7,208 | $ | 5.92 | $ | 51 | ||||
For purposes of determining compensation expense, the fair value of each restricted stock grant is estimated based on the average of the high and low market price of a share of our common stock on the date of grant. Total remaining unrecognized compensation cost associated with unvested restricted stock awards at March 31, 2015 was $40 million and the weighted average period over which this cost is expected to be recognized is approximately 2.5 years. | |||||||||
Shares granted during the first three months of 2014 totaled 3,741,000. The total fair value of shares of restricted stock granted and vested at March 31, 2014 was approximately $21 million and $13 million, respectively. The total fair value of unvested restricted stock at March 31, 2014 was $44 million. The weighted average grant date fair value of restricted shares granted during the three months ended March 31, 2014 was $4.71 per share. | |||||||||
We have granted restricted stock awards to employees in the form of our common stock. None of the restricted stock awards may be sold, assigned, pledged or otherwise transferred, voluntarily or involuntarily, by the employees until the restrictions lapse, subject to limited exceptions. The restrictions are time-based. Compensation expense, recognized in “Selling, general and administrative expenses”, of $4 million and $3 million for the three months ended March 31, 2015 and 2014, respectively, has been recorded in connection with these grants. | |||||||||
Comprehensive_Income_Loss
Comprehensive Income (Loss) | 3 Months Ended | ||||||||||||
Mar. 31, 2015 | |||||||||||||
Comprehensive Income (Loss) [Abstract] | |||||||||||||
Comprehensive Income (Loss) | (12) Comprehensive Income (Loss): | ||||||||||||
Comprehensive income consists of net income (loss) and other gains and losses affecting shareholders’ investment and pension/postretirement benefit (OPEB) liabilities that, under U.S. GAAP, are excluded from net income (loss). | |||||||||||||
The components of accumulated other comprehensive loss, net of tax at March 31, 2015 and 2014, and changes for the three months then ended, are as follows: | |||||||||||||
($ in millions) | Pension Costs | OPEB Costs | Deferred taxes on pension and OPEB costs | Total | |||||||||
Balance at January 1, 2015 | $ | -532 | $ | -119 | $ | 247 | $ | -404 | |||||
Other comprehensive loss before reclassifications | - | - | -2 | -2 | |||||||||
Amounts reclassified from accumulated other comprehensive loss | 7 | 2 | -4 | 5 | |||||||||
Net current-period other comprehensive income (loss) | 7 | 2 | -6 | 3 | |||||||||
Balance at March 31, 2015 | $ | -525 | $ | -117 | $ | 241 | $ | -401 | |||||
Pension Costs | OPEB Costs | Deferred taxes on pension and OPEB costs | Total | ||||||||||
Balance at January 1, 2014 | $ | -411 | $ | -5 | $ | 156 | $ | -260 | |||||
Amounts reclassified from accumulated other comprehensive loss | 5 | - | -2 | 3 | |||||||||
Net current-period other comprehensive income (loss) | 5 | - | -2 | 3 | |||||||||
Balance at March 31, 2014 | $ | -406 | $ | -5 | $ | 154 | $ | -257 | |||||
The significant items reclassified from each component of accumulated other comprehensive loss for the three months ended March 31, 2015 and 2014 are as follows: | |||||||||||||
($ in millions) | Amount Reclassified from | ||||||||||||
Accumulated Other Comprehensive Loss (a) | |||||||||||||
Details about Accumulated Other Comprehensive | For the three months ended March 31, | Affected Line Item in the Statement Where | |||||||||||
Loss Components | 2015 | 2014 | Net Income (Loss) is Presented | ||||||||||
Amortization of Pension Cost Items (b) | |||||||||||||
Actuarial gains (losses) | $ | -7 | $ | -5 | Income (loss) before income taxes | ||||||||
Tax impact | 3 | 2 | Income tax (expense) benefit | ||||||||||
$ | -4 | $ | -3 | Net income (loss) | |||||||||
Amortization of OPEB Cost Items (b) | |||||||||||||
Prior-service costs | $ | 1 | $ | 1 | |||||||||
Actuarial gains (losses) | -3 | -1 | |||||||||||
-2 | - | Income (loss) before income taxes | |||||||||||
Tax impact | 1 | - | Income tax (expense) benefit | ||||||||||
$ | -1 | $ | - | Net income (loss) | |||||||||
(a) Amounts in parentheses indicate losses. | |||||||||||||
(b) These accumulated other comprehensive loss components are included in the computation of net periodic pension and OPEB costs (see Note 13 - Retirement Plans for additional details). | |||||||||||||
Retirement_Plans
Retirement Plans | 3 Months Ended | |||||||
Mar. 31, 2015 | ||||||||
Retirement Plans [Abstract] | ||||||||
Retirement Plans | (13) Retirement Plans: | |||||||
The following tables provide the components of net periodic benefit cost: | ||||||||
Pension Benefits | ||||||||
For the three months ended | ||||||||
March 31, | ||||||||
2015 | 2014 | |||||||
($ in millions) | ||||||||
Components of net periodic pension benefit cost | ||||||||
Service cost | $ | 13 | $ | 10 | ||||
Interest cost on projected benefit obligation | 22 | 20 | ||||||
Expected return on plan assets | -32 | -24 | ||||||
Amortization of unrecognized loss | 7 | 5 | ||||||
Net periodic pension benefit cost | $ | 10 | $ | 11 | ||||
Postretirement Benefits | ||||||||
Other Than Pensions (OPEB) | ||||||||
For the three months ended | ||||||||
March 31, | ||||||||
2015 | 2014 | |||||||
($ in millions) | ||||||||
Components of net periodic postretirement benefit cost | ||||||||
Service cost | $ | 5 | $ | 3 | ||||
Interest cost on projected benefit obligation | 7 | 5 | ||||||
Expected return on plan assets | - | -1 | ||||||
Amortization of prior service cost/(credit) | -1 | -1 | ||||||
Amortization of unrecognized loss | 3 | 1 | ||||||
Net periodic postretirement benefit cost | $ | 14 | $ | 7 | ||||
During the first three months of 2015 and 2014, we capitalized $5 million and $4 million, respectively, of pension and OPEB expense into the cost of our capital expenditures, as the costs relate to our engineering and plant construction activities. Based on current assumptions and plan asset values, we estimate that our 2015 pension and OPEB expenses will be approximately $85 million to $105 million before amounts capitalized into the cost of capital expenditures and the impact of pension settlement costs, if any, as compared to $74 million in 2014. We made total cash contributions to our pension plan during the three months ended March 31, 2015 of $17 million. An additional cash contribution of $23 million was made on April 15, 2015. We expect to make contributions of cash and/or other assets to our pension plan of approximately $100 million in 2015. | ||||||||
The Company’s pension plan assets increased from $1,673 million at December 31, 2014 to $1,718 million at March 31, 2015, an increase of $45 million, or 3%. This increase is a result of positive investment returns of $55 million and cash contributions of $17 million, offset by benefit payments of $27 million during the first three months of 2015. | ||||||||
Commitments_And_Contingencies
Commitments And Contingencies | 3 Months Ended |
Mar. 31, 2015 | |
Commitments And Contingencies [Abstract] | |
Commitments And Contingencies | (14) Commitments and Contingencies: |
We anticipate total capital expenditures for our current business operations of approximately $650 million to $700 million for 2015, excluding the expenditure of funds previously received from the Connect America Fund program and our integration activities. Although from time to time we make short-term purchasing commitments to vendors with respect to these capital expenditures, we generally do not enter into firm, written contracts for such activities. | |
In connection with the pending Verizon Transaction, the Company expects to incur additional operating expenses and capital expenditures in 2015 related to integration activities. | |
The Federal Communications Commission (FCC) and certain state regulatory commissions, in connection with granting their approvals of the 2010 Acquisition, specified certain capital expenditure and operating requirements for the territories acquired in the 2010 Acquisition for specified periods of time post-closing. These requirements focus primarily on certain capital investment commitments to expand broadband availability to at least 85% of the households throughout the territories acquired in the 2010 Acquisition with minimum download speeds of 3 megabits per second (Mbps) by the end of 2013. We are required to provide download speeds of 4 Mbps to at least 75%, 80% and 85% of the households throughout the territories acquired in the 2010 Acquisition by the end of 2013, 2014 and 2015, respectively. As of December 31, 2012, we had already met our FCC requirement to provide 4 Mbps coverage to 75% and 80% of the households in the territories acquired in the 2010 Acquisition by the end of 2013 and 2014, respectively. As of December 31, 2013, we had already met our FCC requirement to provide 3 Mbps coverage to 85% of the households in the territories acquired in the 2010 Acquisition by the end of 2013. As of March 31, 2015, we expanded broadband availability in excess of 4 Mbps to 84.8% of the households throughout the territories acquired in the 2010 Acquisition. | |
In our normal course of business, we have obligations under certain non-cancelable arrangements for services. During 2012, we entered into a “take or pay” arrangement for the purchase of future long distance and carrier services. Our remaining commitment under the arrangement is $141 million for the year ending December 31, 2015. As of March 31, 2015, we expect to utilize the services included within the arrangement and no liability for the “take or pay” provision has been recorded. | |
We are party to various legal proceedings (including individual, class and putative class actions) arising in the normal course of our business covering a wide range of matters and types of claims including, but not limited to, general contracts, billing disputes, rights of access, taxes and surcharges, consumer protection, trademark and patent infringement, employment, regulatory, tort, claims of competitors and disputes with other carriers. | |
We accrue an expense for pending litigation when we determine that an unfavorable outcome is probable and the amount of the loss can be reasonably estimated. Legal defense costs are expensed as incurred. None of our existing accruals for pending matters, after considering insurance coverage, is material. We monitor our pending litigation for the purpose of adjusting our accruals and revising our disclosures accordingly, when required. Litigation is, however, subject to uncertainty, and the outcome of any particular matter is not predictable. We will vigorously defend our interests in pending litigation, and as of this date, we believe that the ultimate resolution of all such matters, after considering insurance coverage or other indemnities to which we are entitled, will not have a material adverse effect on our consolidated financial position, results of operations, or our cash flows. | |
We sold all of our utility businesses as of April 1, 2004. However, we have retained a potential payment obligation associated with our previous electric utility activities in the State of Vermont. The Vermont Joint Owners (VJO), a consortium of 14 Vermont utilities, including us, entered into a purchase power agreement with Hydro-Quebec in 1987. The agreement contains “step-up” provisions that state if any VJO member defaults on its purchase obligation under the contract to purchase power from Hydro-Quebec, then the other VJO participants will assume responsibility for the defaulting party’s share on a pro-rata basis. Our pro-rata share of the purchase power obligation is 10%. If any member of the VJO defaults on its obligations under the Hydro-Quebec agreement, then the remaining members of the VJO, including us, may be required to pay for a substantially larger share of the VJO’s total purchase power obligation for the remainder of the agreement (which runs through 2015). U.S. GAAP rules require that we disclose “the maximum potential amount of future payments (undiscounted) the guarantor could be required to make under the guarantee.” U.S. GAAP rules also state that we must make such disclosure “…even if the likelihood of the guarantor’s having to make any payments under the guarantee is remote…” As noted above, our obligation only arises as a result of default by another VJO member, such as upon bankruptcy. Therefore, to satisfy the “maximum potential amount” disclosure requirement we must assume that all other members of the VJO simultaneously default, an unlikely scenario given that all VJO members are regulated utility providers with regulated cost recovery. Despite the remote chance that such an event could occur, or that the State of Vermont could or would allow such an event, assuming that all the other members of the VJO defaulted on May 1, 2015 and remained in default for the duration of the contract (another 8 months), we estimate that our undiscounted purchase obligation through 2015 would be approximately $96 million. In such a scenario, the Company would then own the power and could seek to recover its costs. We would do this by seeking to recover our costs from the defaulting members and/or reselling the power to other utility providers or the northeast power grid. There is an active market for the sale of power. We could potentially lose money if we were unable to sell the power at cost. We caution that we cannot predict with any degree of certainty any potential outcome. | |
Summary_Of_Significant_Account1
Summary Of Significant Accounting Policies (Policies) | 3 Months Ended |
Mar. 31, 2015 | |
Summary Of Significant Accounting Policies [Abstract] | |
Basis of Presentation and Use of Estimates | (a) Basis of Presentation and Use of Estimates: |
Frontier Communications Corporation and its subsidiaries are referred to as “we,” “us,” “our,” “Frontier,” or the “Company” in this report. Our interim unaudited consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (U.S. GAAP) and should be read in conjunction with the consolidated financial statements and notes included in our Annual Report on Form 10-K for the year ended December 31, 2014. Certain reclassifications of amounts previously reported have been made to conform to the current presentation. All significant intercompany balances and transactions have been eliminated in consolidation. These interim unaudited consolidated financial statements include all adjustments (consisting of normal recurring accruals) considered necessary, in the opinion of Frontier’s management, to present fairly the results for the interim periods shown. Revenues, net income (loss) and cash flows for any interim periods are not necessarily indicative of results that may be expected for the full year. For our interim financial statements as of and for the period ended March 31, 2015, we evaluated subsequent events and transactions for potential recognition or disclosure through the date that we filed this quarterly report on Form 10-Q with the Securities and Exchange Commission (SEC). | |
Effective October 24, 2014, Frontier’s scope of operations and balance sheet capitalization changed materially as a result of the completion of the Connecticut Acquisition, as described in Note 3 - Acquisitions. Historical financial data presented for Frontier is not indicative of the future financial position or operating results for Frontier, and includes the results of the Connecticut operations, as defined in Note 3 – Acquisitions, from the date of acquisition on October 24, 2014. | |
The preparation of our interim financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect (i) the reported amounts of assets and liabilities at the date of the financial statements, (ii) the disclosure of contingent assets and liabilities, and (iii) the reported amounts of revenue and expenses during the reporting period. Actual results may differ from those estimates. Estimates and judgments are used when accounting for the allowance for doubtful accounts, asset impairments, indefinite-lived intangibles, depreciation and amortization, income taxes, business combinations, and pension and other postretirement benefits, among others. Certain information and footnote disclosures have been excluded and/or condensed pursuant to SEC rules and regulations. | |
We operate in one reportable segment. Frontier provides both regulated and unregulated voice, data and video services to residential, business and wholesale customers and is typically the incumbent voice services provider in its service areas. We have utilized the aggregation criteria to combine our five operating segments because all of our properties share similar economic characteristics, in that they provide the same products and services to similar customers using comparable technologies in all of the states in which we operate. The regulatory structure is generally similar. Differences in the regulatory regime of a particular state do not significantly impact the economic characteristics or operating results of a particular property. | |
Revenue Recognition | (b) Revenue Recognition: |
Revenue is recognized when services are provided or when products are delivered to customers. Revenue that is billed in advance includes: monthly recurring network access services (including data services), special access services and monthly recurring voice, video and related charges. The unearned portion of these fees is initially deferred as a component of “Advanced billings” on our consolidated balance sheet and recognized as revenue over the period that the services are provided. Revenue that is billed in arrears includes: non-recurring network access services (including data services), switched access services, non-recurring voice and video services. The earned but unbilled portion of these fees is recognized as revenue in our consolidated statements of operations and accrued in “Accounts receivable” in the period that the services are provided. Excise taxes are recognized as a liability when billed. Installation fees and their related direct and incremental costs are initially deferred and recognized as revenue and expense over the average term of a customer relationship. We recognize as current period expense the portion of installation costs that exceeds installation fee revenue. | |
The Company collects various taxes from its customers and subsequently remits these taxes to governmental authorities. Substantially all of these taxes are recorded through the consolidated balance sheet and presented on a net basis in our consolidated statements of operations. We also collect Universal Service Fund (USF) surcharges from customers (primarily federal USF) that we have recorded on a gross basis in our consolidated statements of operations and included within “Revenue” and “Network related expenses” of $37 million and $30 million for the three months ended March 31, 2015 and 2014, respectively. | |
Goodwill and Other Intangibles | (c) Goodwill and Other Intangibles: |
Goodwill represents the excess of purchase price over the fair value of identifiable tangible and intangible net assets acquired. We undertake studies to determine the fair values of assets and liabilities acquired and allocate purchase prices to assets and liabilities, including property, plant and equipment, goodwill and other identifiable intangibles. We examine the carrying value of our goodwill and trade name annually as of December 31, or more frequently, as circumstances warrant, to determine whether there are any impairment losses. We test for goodwill impairment at the “operating segment” level, as that term is defined in U.S. GAAP. | |
The Company amortizes finite-lived intangible assets over their estimated useful lives on the accelerated method of sum of the years digits. We review such intangible assets at least annually as of December 31 to assess whether any potential impairment exists and whether factors exist that would necessitate a change in useful life and a different amortization period. | |
Acquisitions_Tables
Acquisitions (Tables) | 3 Months Ended | ||||
Mar. 31, 2015 | |||||
Acquisitions [Abstract] | |||||
Allocation of the purchase price for the Connecticut Acquisition | |||||
($ in millions) | |||||
Current assets | $ | 73 | |||
Property, plant & equipment | 1,450 | ||||
Goodwill | 875 | ||||
Other intangibles - customer list | 590 | ||||
Current liabilities | -103 | ||||
Deferred income taxes | -648 | ||||
Other liabilities | -219 | ||||
Total net assets acquired | $ | 2,018 | |||
Unaudited Pro Forma Condensed Combined Statements of Income Information | |||||
($ in millions, except per share amounts) | (Unaudited) | ||||
For the three months ended | |||||
31-Mar-14 | |||||
Revenue | $ | 1,463 | |||
Operating income | $ | 245 | |||
Net income | $ | 36 | |||
Basic and diluted net income per | |||||
common share | $ | 0.04 | |||
Accounts_Receivable_Tables
Accounts Receivable (Tables) | 3 Months Ended | ||||||
Mar. 31, 2015 | |||||||
Accounts Receivable [Abstract] | |||||||
Accounts Receivable | |||||||
($ in millions) | 31-Mar-15 | 31-Dec-14 | |||||
Retail and Wholesale | $ | 539 | $ | 630 | |||
Other | 46 | 56 | |||||
Less: Allowance for doubtful accounts | -59 | -72 | |||||
Accounts receivable, net | $ | 526 | $ | 614 | |||
Property_Plant_And_Equipment_T
Property, Plant And Equipment (Tables) | 3 Months Ended | ||||||
Mar. 31, 2015 | |||||||
Property, Plant And Equipment [Abstract] | |||||||
Property, Plant And Equipment, Net | |||||||
($ in millions) | 31-Mar-15 | 31-Dec-14 | |||||
Property, plant and equipment | $ | 17,095 | $ | 16,946 | |||
Less: Accumulated depreciation | -8,617 | -8,380 | |||||
Property, plant and equipment, net | $ | 8,478 | $ | 8,566 | |||
Goodwill_And_Other_Intangibles1
Goodwill And Other Intangibles (Tables) | 3 Months Ended | ||||||||||||||||||
Mar. 31, 2015 | |||||||||||||||||||
Goodwill And Other Intangibles [Abstract] | |||||||||||||||||||
Activity Of Goodwill | |||||||||||||||||||
($ in millions) | |||||||||||||||||||
Balance at January 1, 2015 | $ | 7,205 | |||||||||||||||||
Connecticut Acquisition (Note 3) | 8 | ||||||||||||||||||
Balance at March 31, 2015 | $ | 7,213 | |||||||||||||||||
Components Of Other Intangibles | |||||||||||||||||||
($ in millions) | 31-Mar-15 | 31-Dec-14 | |||||||||||||||||
Gross Carrying | Accumulated | Net Carrying | Gross Carrying | Accumulated | Net Carrying | ||||||||||||||
Amount | Amortization | Amount | Amount | Amortization | Amount | ||||||||||||||
Other Intangibles: | |||||||||||||||||||
Customer list | $ | 3,018 | $ | -1,732 | $ | 1,286 | $ | 3,018 | $ | -1,640 | $ | 1,378 | |||||||
Trade name | 122 | - | 122 | 122 | - | 122 | |||||||||||||
Total other intangibles | $ | 3,140 | $ | -1,732 | $ | 1,408 | $ | 3,140 | $ | -1,640 | $ | 1,500 | |||||||
Fair_Value_Of_Financial_Instru1
Fair Value Of Financial Instruments (Tables) | 3 Months Ended | ||||||||||||
Mar. 31, 2015 | |||||||||||||
Fair Value Of Financial Instruments [Abstract] | |||||||||||||
Fair Value Of Long-Term Debt | |||||||||||||
($ in millions) | 31-Mar-15 | 31-Dec-14 | |||||||||||
Carrying Amount | Fair Value | Carrying Amount | Fair Value | ||||||||||
Long-term debt | $ | 9,464 | $ | 9,995 | $ | 9,486 | $ | 10,034 | |||||
LongTerm_Debt_Tables
Long-Term Debt (Tables) | 3 Months Ended | ||||||||||||||
Mar. 31, 2015 | |||||||||||||||
Long-Term Debt [Abstract] | |||||||||||||||
Long-Term Debt | |||||||||||||||
Three months ended | |||||||||||||||
31-Mar-15 | Interest | ||||||||||||||
Rate at | |||||||||||||||
December 31, | Payments | New | March 31, | March 31, | |||||||||||
($ in millions) | 2014 | and Retirements | Borrowings | 2015 | 2015 * | ||||||||||
Senior Unsecured Debt | $ | 9,750 | $ | -128 | $ | - | $ | 9,622 | 7.68% | ||||||
Other Secured Debt | 23 | -1 | 3 | 25 | 3.38% | ||||||||||
Rural Utilities Service Loan Contracts | 8 | - | - | 8 | 6.15% | ||||||||||
Total Long-Term Debt | $ | 9,781 | $ | -129 | $ | 3 | $ | 9,655 | 7.66% | ||||||
Less: Debt (Discount)/Premium | 3 | 2 | |||||||||||||
Less: Current Portion | -298 | -193 | |||||||||||||
$ | 9,486 | $ | 9,464 | ||||||||||||
* Interest rate includes amortization of debt issuance costs and debt premiums or discounts. The interest rates at March 31, 2015 represent a weighted average of multiple issuances | |||||||||||||||
Senior Unsecured Debt | |||||||||||||||
($ in millions) | 31-Mar-15 | 31-Dec-14 | |||||||||||||
Principal | Interest | Principal | Interest | ||||||||||||
Outstanding | Rate | Outstanding | Rate | ||||||||||||
Senior Notes and Debentures Due: | |||||||||||||||
3/15/15 | - | - | 105 | 6.63% | |||||||||||
4/15/15 | 97 | 7.88% | 97 | 7.88% | |||||||||||
10/14/2016 * | 388 | 3.555% (Variable) | 402 | 3.045% (Variable) | |||||||||||
4/15/17 | 607 | 8.25% | 607 | 8.25% | |||||||||||
10/1/18 | 583 | 8.13% | 583 | 8.13% | |||||||||||
3/15/19 | 434 | 7.12% | 434 | 7.12% | |||||||||||
10/24/2019 ** | 341 | 3.555% (Variable) | 350 | 3.545% (Variable) | |||||||||||
4/15/20 | 1,022 | 8.50% | 1,022 | 8.50% | |||||||||||
7/1/21 | 500 | 9.25% | 500 | 9.25% | |||||||||||
9/15/21 | 775 | 6.25% | 775 | 6.25% | |||||||||||
4/15/22 | 500 | 8.75% | 500 | 8.75% | |||||||||||
1/15/23 | 850 | 7.12% | 850 | 7.12% | |||||||||||
4/15/24 | 750 | 7.63% | 750 | 7.63% | |||||||||||
1/15/25 | 775 | 6.88% | 775 | 6.88% | |||||||||||
11/1/25 | 138 | 7.00% | 138 | 7.00% | |||||||||||
8/15/26 | 2 | 6.80% | 2 | 6.80% | |||||||||||
1/15/27 | 346 | 7.88% | 346 | 7.88% | |||||||||||
8/15/31 | 945 | 9.00% | 945 | 9.00% | |||||||||||
10/1/34 | 1 | 7.68% | 1 | 7.68% | |||||||||||
7/1/35 | 125 | 7.45% | 125 | 7.45% | |||||||||||
10/1/46 | 193 | 7.05% | 193 | 7.05% | |||||||||||
9,372 | 9,500 | ||||||||||||||
Subsidiary Debentures Due: | |||||||||||||||
2/15/2028 | 200 | 6.73% | 200 | 6.73% | |||||||||||
10/15/2029 | 50 | 8.40% | 50 | 8.40% | |||||||||||
Total | $ | 9,622 | 7.49% *** | $ | 9,750 | 7.45% *** | |||||||||
* Represents borrowings under the 2011 CoBank Credit Agreement, as defined below. | |||||||||||||||
** Represents borrowings under the 2014 CoBank Credit Agreement, as defined below. | |||||||||||||||
*** Interest rate represents a weighted average of the stated interest rates of multiple issuances. | |||||||||||||||
Debt Maturities by Year | |||||||||||||||
Principal | |||||||||||||||
($ in millions) | Payments | ||||||||||||||
2015 (remaining nine months) | $ | 169 | |||||||||||||
2016 | $ | 384 | |||||||||||||
2017 | $ | 646 | |||||||||||||
2018 | $ | 620 | |||||||||||||
2019 | $ | 645 | |||||||||||||
2020 | $ | 1,022 | |||||||||||||
Thereafter | $ | 6,169 | |||||||||||||
Income_Taxes_Tables
Income Taxes (Tables) | 3 Months Ended | ||||||
Mar. 31, 2015 | |||||||
Income Taxes [Abstract] | |||||||
Reconciliation Of Provision For Income Taxes | |||||||
For the three months ended | |||||||
March 31, | |||||||
2015 | 2014 | ||||||
Consolidated tax provision at federal statutory rate | 35.0 | % | 35.0 | % | |||
State income tax provisions, net of federal income | |||||||
tax benefit | 2.5 | 0.3 | |||||
Changes in certain deferred tax balances | - | -5.1 | |||||
All other, net | -0.4 | 0.2 | |||||
Effective tax rate | 37.1 | % | 30.4 | % | |||
Net_Income_Loss_Per_Common_Sha1
Net Income (Loss) Per Common Share (Tables) | 3 Months Ended | |||||
Mar. 31, 2015 | ||||||
Net Income (Loss) Per Common Share [Abstract] | ||||||
Calculation Of Net Income (Loss) Per Common Share | ||||||
For the three months ended | ||||||
($ in millions and shares in thousands, except per share amounts) | March 31, | |||||
2015 | 2014 | |||||
Net income (loss) used for basic and diluted earnings | ||||||
per common share: | ||||||
Net income (loss) | $ | -51 | $ | 39 | ||
Less: Dividends paid on unvested restricted stock awards | -1 | -1 | ||||
Total basic and diluted net income (loss) | $ | -52 | $ | 38 | ||
Basic earnings per common share: | ||||||
Total weighted average shares and unvested restricted stock | ||||||
awards outstanding - basic | 1,002,173 | 1,000,960 | ||||
Less: Weighted average unvested restricted stock awards | -7,457 | -6,934 | ||||
Total weighted average shares outstanding - basic | 994,716 | 994,026 | ||||
Basic net income (loss) per common share | $ | -0.05 | $ | 0.04 | ||
Diluted earnings per common share: | ||||||
Total weighted average shares outstanding - basic | 994,716 | 994,026 | ||||
Effect of dilutive shares | - | 1,502 | ||||
Total weighted average shares outstanding - diluted | 994,716 | 995,528 | ||||
Diluted net income (loss) per common share | $ | -0.05 | $ | 0.04 | ||
Stock_Plans_Tables
Stock Plans (Tables) | 3 Months Ended | ||||||||
Mar. 31, 2015 | |||||||||
Stock Plans [Abstract] | |||||||||
LTIP Target Performance Shares | |||||||||
Number of | |||||||||
Shares | |||||||||
(in thousands) | |||||||||
Balance at January 1, 2015 | 2,682 | ||||||||
LTIP target performance shares granted | 738 | ||||||||
LTIP target performance shares earned | -743 | ||||||||
LTIP target performance shares forfeited | -116 | ||||||||
Balance at March 31, 2015 | 2,561 | ||||||||
Restricted Shares Outstanding | |||||||||
Weighted | |||||||||
Average | |||||||||
Number of | Grant Date | Aggregate | |||||||
Shares | Fair Value | Fair Value | |||||||
(in thousands) | (per share) | (in millions) | |||||||
Balance at January 1, 2015 | 7,807 | $ | 4.75 | $ | 52 | ||||
Restricted stock granted | 2,763 | $ | 7.98 | $ | 19 | ||||
Restricted stock vested | -3,163 | $ | 4.9 | $ | 22 | ||||
Restricted stock forfeited | -199 | $ | 4.49 | ||||||
Balance at March 31, 2015 | 7,208 | $ | 5.92 | $ | 51 | ||||
Comprehensive_Income_Loss_Tabl
Comprehensive Income (Loss) (Tables) | 3 Months Ended | ||||||||||||
Mar. 31, 2015 | |||||||||||||
Comprehensive Income (Loss) [Abstract] | |||||||||||||
Accumulated Other Comprehensive Loss, Net of Tax | |||||||||||||
($ in millions) | Pension Costs | OPEB Costs | Deferred taxes on pension and OPEB costs | Total | |||||||||
Balance at January 1, 2015 | $ | -532 | $ | -119 | $ | 247 | $ | -404 | |||||
Other comprehensive loss before reclassifications | - | - | -2 | -2 | |||||||||
Amounts reclassified from accumulated other comprehensive loss | 7 | 2 | -4 | 5 | |||||||||
Net current-period other comprehensive income (loss) | 7 | 2 | -6 | 3 | |||||||||
Balance at March 31, 2015 | $ | -525 | $ | -117 | $ | 241 | $ | -401 | |||||
Pension Costs | OPEB Costs | Deferred taxes on pension and OPEB costs | Total | ||||||||||
Balance at January 1, 2014 | $ | -411 | $ | -5 | $ | 156 | $ | -260 | |||||
Amounts reclassified from accumulated other comprehensive loss | 5 | - | -2 | 3 | |||||||||
Net current-period other comprehensive income (loss) | 5 | - | -2 | 3 | |||||||||
Balance at March 31, 2014 | $ | -406 | $ | -5 | $ | 154 | $ | -257 | |||||
Reclassification Out of Accumulated Other Comprehensive Income | |||||||||||||
($ in millions) | Amount Reclassified from | ||||||||||||
Accumulated Other Comprehensive Loss (a) | |||||||||||||
Details about Accumulated Other Comprehensive | For the three months ended March 31, | Affected Line Item in the Statement Where | |||||||||||
Loss Components | 2015 | 2014 | Net Income (Loss) is Presented | ||||||||||
Amortization of Pension Cost Items (b) | |||||||||||||
Actuarial gains (losses) | $ | -7 | $ | -5 | Income (loss) before income taxes | ||||||||
Tax impact | 3 | 2 | Income tax (expense) benefit | ||||||||||
$ | -4 | $ | -3 | Net income (loss) | |||||||||
Amortization of OPEB Cost Items (b) | |||||||||||||
Prior-service costs | $ | 1 | $ | 1 | |||||||||
Actuarial gains (losses) | -3 | -1 | |||||||||||
-2 | - | Income (loss) before income taxes | |||||||||||
Tax impact | 1 | - | Income tax (expense) benefit | ||||||||||
$ | -1 | $ | - | Net income (loss) | |||||||||
(a) Amounts in parentheses indicate losses. | |||||||||||||
(b) These accumulated other comprehensive loss components are included in the computation of net periodic pension and OPEB costs (see Note 13 - Retirement Plans for additional details) | |||||||||||||
Retirement_Plans_Tables
Retirement Plans (Tables) | 3 Months Ended | |||||||
Mar. 31, 2015 | ||||||||
Retirement Plans [Abstract] | ||||||||
Net Periodic Benefit Cost | ||||||||
Pension Benefits | ||||||||
For the three months ended | ||||||||
March 31, | ||||||||
2015 | 2014 | |||||||
($ in millions) | ||||||||
Components of net periodic pension benefit cost | ||||||||
Service cost | $ | 13 | $ | 10 | ||||
Interest cost on projected benefit obligation | 22 | 20 | ||||||
Expected return on plan assets | -32 | -24 | ||||||
Amortization of unrecognized loss | 7 | 5 | ||||||
Net periodic pension benefit cost | $ | 10 | $ | 11 | ||||
Postretirement Benefits | ||||||||
Other Than Pensions (OPEB) | ||||||||
For the three months ended | ||||||||
March 31, | ||||||||
2015 | 2014 | |||||||
($ in millions) | ||||||||
Components of net periodic postretirement benefit cost | ||||||||
Service cost | $ | 5 | $ | 3 | ||||
Interest cost on projected benefit obligation | 7 | 5 | ||||||
Expected return on plan assets | - | -1 | ||||||
Amortization of prior service cost/(credit) | -1 | -1 | ||||||
Amortization of unrecognized loss | 3 | 1 | ||||||
Net periodic postretirement benefit cost | $ | 14 | $ | 7 | ||||
Summary_Of_Significant_Account2
Summary Of Significant Accounting Policies (Details) (USD $) | 3 Months Ended | |
In Millions, unless otherwise specified | Mar. 31, 2015 | Mar. 31, 2014 |
segment | ||
Summary Of Significant Accounting Policies [Abstract] | ||
Number of reportable segments | 1 | |
Number of operating segments | 5 | |
Customer surcharges | $37 | $30 |
Recent_Accounting_Literature_D
Recent Accounting Literature (Details) (USD $) | Mar. 31, 2015 |
In Millions, unless otherwise specified | |
Recent Accounting Literature [Abstract] | |
Deferred financing costs | $98 |
Acquisitions_Narrative_Details
Acquisitions (Narrative) (Details) (USD $) | 3 Months Ended | |
In Millions, unless otherwise specified | Mar. 31, 2015 | Mar. 31, 2014 |
Business Acquisition [Line Items] | ||
Acquisition purchase price | $2,018 | |
Acquisition and integration costs | 57 | 11 |
Capital expenditures - Integration activities | -10 | -10 |
Revenue | 1,371 | 1,154 |
Operating income | 163 | 226 |
Connecticut Operations [Member] | ||
Business Acquisition [Line Items] | ||
Acquisition and integration costs | 21 | |
Acquisition costs | 1 | 2 |
Integration costs | 20 | 9 |
Revenue | 264 | |
Operating income | 15 | |
Verizon Transaction [Member] | ||
Business Acquisition [Line Items] | ||
Acquisition purchase price | 10,540 | |
Acquisition and integration costs | 36 | |
Acquisition costs | 33 | |
Integration costs | $3 | |
Number of voice connections acquired | 3,700,000 | |
Number of broadband connections acquired | 2,200,000 | |
Number of video connections acquired | 1,200,000 |
Acquisitions_Purchase_Price_Al
Acquisitions (Purchase Price Allocation) (Details) (USD $) | Mar. 31, 2015 | Dec. 31, 2014 |
In Millions, unless otherwise specified | ||
Business Acquisition [Line Items] | ||
Goodwill | $7,213 | $7,205 |
Connecticut Operations [Member] | ||
Business Acquisition [Line Items] | ||
Current assets | 73 | |
Property, plant and equipment | 1,450 | |
Goodwill | 875 | |
Other intangibles - customer list | 590 | |
Current liabilities | -103 | |
Deferred income taxes | -648 | |
Other liabilities | -219 | |
Total net assets acquired | $2,018 |
Acquisitions_Unaudited_Pro_For
Acquisitions (Unaudited Pro Forma Information) (Details) (USD $) | 3 Months Ended |
In Millions, except Per Share data, unless otherwise specified | Mar. 31, 2014 |
Acquisitions [Abstract] | |
Revenue | $1,463 |
Operating income | 245 |
Net income | $36 |
Basic and diluted net income per common share | $0.04 |
Accounts_Receivable_Narrative_
Accounts Receivable (Narrative) (Details) (USD $) | 3 Months Ended | |
In Millions, unless otherwise specified | Mar. 31, 2015 | Mar. 31, 2014 |
Accounts Receivable [Abstract] | ||
Bad debt expense | $13 | $13 |
Accounts_Receivable_Accounts_R
Accounts Receivable (Accounts Receivable) (Details) (USD $) | Mar. 31, 2015 | Dec. 31, 2014 |
In Millions, unless otherwise specified | ||
Accounts Receivable [Abstract] | ||
Retail and Wholesale | $539 | $630 |
Other | 46 | 56 |
Less: Allowance for doubtful accounts | -59 | -72 |
Accounts receivable, net | $526 | $614 |
Property_Plant_And_Equipment_N
Property, Plant And Equipment (Narrative) (Details) (USD $) | 3 Months Ended | |
In Millions, unless otherwise specified | Mar. 31, 2015 | Mar. 31, 2014 |
Property, Plant And Equipment [Abstract] | ||
Depreciation expense | $249 | $206 |
Property_Plant_And_Equipment_P
Property, Plant And Equipment (Property, Plant And Equipment, Net) (Details) (USD $) | Mar. 31, 2015 | Dec. 31, 2014 |
In Millions, unless otherwise specified | ||
Property, Plant And Equipment [Abstract] | ||
Property, plant and equipment | $17,095 | $16,946 |
Less: Accumulated depreciation | -8,617 | -8,380 |
Property, plant and equipment, net | $8,478 | $8,566 |
Goodwill_And_Other_Intangibles2
Goodwill And Other Intangibles (Narrative) (Details) (USD $) | 3 Months Ended | |
In Millions, unless otherwise specified | Mar. 31, 2015 | Mar. 31, 2014 |
Finite-Lived Intangible Assets [Line Items] | ||
Amortization expense | $92 | $75 |
Customer Base [Member] | Residential Customer List [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Estimated useful life | 9 years | |
Customer Base [Member] | Business Customer List [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Estimated useful life | 12 years |
Goodwill_And_Other_Intangibles3
Goodwill And Other Intangibles (Components Of Goodwill By Reporting Units) (Details) (USD $) | 3 Months Ended | |
In Millions, unless otherwise specified | Mar. 31, 2015 | Dec. 31, 2014 |
Goodwill And Other Intangibles [Abstract] | ||
Goodwill | $7,213 | $7,205 |
Connecticut Acquisition (Note 3) | $8 |
Goodwill_And_Other_Intangibles4
Goodwill And Other Intangibles (Components Of Other Intangibles) (Details) (USD $) | Mar. 31, 2015 | Dec. 31, 2014 |
In Millions, unless otherwise specified | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | $3,140 | $3,140 |
Accumulated Amortization | -1,732 | -1,640 |
Net Carrying Amount | 1,408 | 1,500 |
Customer Base [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | 3,018 | 3,018 |
Accumulated Amortization | -1,732 | -1,640 |
Net Carrying Amount | 1,286 | 1,378 |
Trade Name And License [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | 122 | 122 |
Net Carrying Amount | $122 | $122 |
Fair_Value_Of_Financial_Instru2
Fair Value Of Financial Instruments (Long Term Debt) (Details) (USD $) | Mar. 31, 2015 | Dec. 31, 2014 |
In Thousands, unless otherwise specified | ||
Carrying Amount [Member] | ||
Long-term debt [Abstract] | ||
Long-term debt | $9,464 | $9,486 |
Fair Value [Member] | ||
Long-term debt [Abstract] | ||
Long-term debt | $9,995 | $10,034 |
LongTerm_Debt_Narrative_Detail
Long-Term Debt (Narrative) (Details) (USD $) | 3 Months Ended | |
In Millions, unless otherwise specified | Mar. 31, 2015 | Dec. 31, 2014 |
Debt Instrument [Line Items] | ||
Remaining outstanding principal | $9,655 | $9,781 |
Bridge loan facility | 10,900 | |
Commitments fees related to bridge loan facility | 58 | |
Deferred financing costs | 143 | |
Accrued financing liabilities | 201 | |
Secured Equipment Financing [Member] | ||
Debt Instrument [Line Items] | ||
Interest Rate | 0.00% | |
Secured equipment financing | 3 | |
Secured equipment financing term | 4 years | |
Senior Unsecured Debt [Member] | ||
Debt Instrument [Line Items] | ||
Remaining outstanding principal | 9,622 | 9,750 |
CoBank Term Loan 2011 [Member] | ||
Debt Instrument [Line Items] | ||
Debt instrument, face amount | 575 | |
Debt instrument, maturity date | 14-Oct-16 | |
Repayment of the outstanding principal balance, quarterly installments amount | 14 | |
Initial pricing for LIBOR based borrowings (in hundredths) | 3.38% | |
CoBank Term Loan 2014 [Member] | ||
Debt Instrument [Line Items] | ||
Debt instrument, face amount | 350 | |
Debt instrument, maturity date | 24-Oct-19 | |
Repayment of the outstanding principal balance, quarterly installments amount | 9 | |
Initial pricing for LIBOR based borrowings (in hundredths) | 3.38% | |
Revolving Credit Facility [Member] | ||
Debt Instrument [Line Items] | ||
Line of credit facility maximum borrowing capacity | 750 | |
Debt instrument, maturity date | 31-May-18 | |
Line of credit facility, current borrowings | $0 | |
Interest Rate (in thousandths) | 0.45% | |
Minimum [Member] | CoBank Term Loan 2011 [Member] | Base Rate [Member] | ||
Debt Instrument [Line Items] | ||
Interest Rate Margin | 0.88% | |
Minimum [Member] | CoBank Term Loan 2011 [Member] | London Interbank Offered Rate (LIBOR) [Member] | ||
Debt Instrument [Line Items] | ||
Interest Rate Margin | 1.88% | |
Minimum [Member] | CoBank Term Loan 2014 [Member] | Base Rate [Member] | ||
Debt Instrument [Line Items] | ||
Interest Rate Margin | 0.88% | |
Minimum [Member] | CoBank Term Loan 2014 [Member] | London Interbank Offered Rate (LIBOR) [Member] | ||
Debt Instrument [Line Items] | ||
Interest Rate Margin | 1.88% | |
Minimum [Member] | Revolving Credit Facility [Member] | ||
Debt Instrument [Line Items] | ||
Initial pricing for LIBOR based borrowings (in hundredths) | 1.50% | |
Minimum [Member] | Revolving Credit Facility [Member] | Base Rate [Member] | ||
Debt Instrument [Line Items] | ||
Interest Rate Margin | 0.50% | |
Minimum [Member] | Revolving Credit Facility [Member] | London Interbank Offered Rate (LIBOR) [Member] | ||
Debt Instrument [Line Items] | ||
Interest Rate Margin | 1.50% | |
Maximum [Member] | CoBank Term Loan 2011 [Member] | Base Rate [Member] | ||
Debt Instrument [Line Items] | ||
Interest Rate Margin | 2.88% | |
Maximum [Member] | CoBank Term Loan 2011 [Member] | London Interbank Offered Rate (LIBOR) [Member] | ||
Debt Instrument [Line Items] | ||
Interest Rate Margin | 3.88% | |
Maximum [Member] | CoBank Term Loan 2014 [Member] | Base Rate [Member] | ||
Debt Instrument [Line Items] | ||
Interest Rate Margin | 2.88% | |
Maximum [Member] | CoBank Term Loan 2014 [Member] | London Interbank Offered Rate (LIBOR) [Member] | ||
Debt Instrument [Line Items] | ||
Interest Rate Margin | 3.88% | |
Maximum [Member] | Revolving Credit Facility [Member] | ||
Debt Instrument [Line Items] | ||
Initial pricing for LIBOR based borrowings (in hundredths) | 2.50% | |
Maximum [Member] | Revolving Credit Facility [Member] | Base Rate [Member] | ||
Debt Instrument [Line Items] | ||
Interest Rate Margin | 1.50% | |
Maximum [Member] | Revolving Credit Facility [Member] | London Interbank Offered Rate (LIBOR) [Member] | ||
Debt Instrument [Line Items] | ||
Interest Rate Margin | 2.50% |
LongTerm_Debt_LongTerm_Debt_De
Long-Term Debt (Long-Term Debt) (Details) (USD $) | 3 Months Ended | ||
In Millions, unless otherwise specified | Mar. 31, 2015 | Dec. 31, 2014 | |
Debt Instrument [Line Items] | |||
Long-term debt, beginning balance | $9,781 | ||
Payments and Retirements | -129 | ||
New Borrowings | 3 | ||
Long-term debt, ending balance | 9,655 | ||
Less: Debt (Discount)/Premium | 2 | 3 | |
Less: Current Portion | -193 | -298 | |
Principal Outstanding | 9,464 | 9,486 | |
Weighted average interest rate | 7.66% | [1] | |
Senior Unsecured Debt [Member] | |||
Debt Instrument [Line Items] | |||
Long-term debt, beginning balance | 9,750 | ||
Payments and Retirements | -128 | ||
Long-term debt, ending balance | 9,622 | ||
Weighted average interest rate | 7.68% | [1] | |
Other Secured Debt [Member] | |||
Debt Instrument [Line Items] | |||
Long-term debt, beginning balance | 23 | ||
Payments and Retirements | -1 | ||
New Borrowings | 3 | ||
Long-term debt, ending balance | 25 | ||
Weighted average interest rate | 3.38% | [1] | |
Rural Utilities Service Loan Contracts [Member] | |||
Debt Instrument [Line Items] | |||
Long-term debt, beginning balance | 8 | ||
Long-term debt, ending balance | $8 | $8 | |
Weighted average interest rate | 6.15% | [1] | |
[1] | Interest rate includes amortization of debt issuance costs and debt premiums or discounts. The interest rates at March 31, 2015 represent a weighted average of multiple issuances. |
LongTerm_Debt_Senior_Unsecured
Long-Term Debt (Senior Unsecured Debt) (Details) (USD $) | 3 Months Ended | |||
In Millions, unless otherwise specified | Mar. 31, 2015 | Dec. 31, 2014 | ||
Debt Instrument [Line Items] | ||||
Principal Outstanding | $9,655 | $9,781 | ||
Senior Unsecured Debt [Member] | ||||
Debt Instrument [Line Items] | ||||
Principal Outstanding | 9,622 | 9,750 | ||
Weighted average interest rate | 7.49% | [1] | 7.45% | [1] |
Senior Notes and Debentures [Member] | Senior Unsecured Debt [Member] | ||||
Debt Instrument [Line Items] | ||||
Principal Outstanding | 9,372 | 9,500 | ||
Senior Notes and Debentures [Member] | Senior Unsecured Debt [Member] | Senior Note Due 3/15/2015 [Member] | ||||
Debt Instrument [Line Items] | ||||
Principal Outstanding | 105 | |||
Interest Rate | 6.63% | |||
Debt instrument, maturity date | 15-Mar-15 | |||
Senior Notes and Debentures [Member] | Senior Unsecured Debt [Member] | Senior Note Due 4/15/2015 [Member] | ||||
Debt Instrument [Line Items] | ||||
Principal Outstanding | 97 | 97 | ||
Interest Rate | 7.88% | 7.88% | ||
Debt instrument, maturity date | 15-Apr-15 | |||
Senior Notes and Debentures [Member] | Senior Unsecured Debt [Member] | Senior Note Due 10/14/2016 [Member] | ||||
Debt Instrument [Line Items] | ||||
Principal Outstanding | 388 | [2] | 402 | [2] |
Interest Rate | 3.56% | [2] | 3.05% | [2] |
Debt instrument, maturity date | 14-Oct-16 | [2] | ||
Senior Notes and Debentures [Member] | Senior Unsecured Debt [Member] | Senior Note Due 4/15/2017 [Member] | ||||
Debt Instrument [Line Items] | ||||
Principal Outstanding | 607 | 607 | ||
Interest Rate | 8.25% | 8.25% | ||
Debt instrument, maturity date | 15-Apr-17 | |||
Senior Notes and Debentures [Member] | Senior Unsecured Debt [Member] | Senior Note Due 10/1/2018 [Member] | ||||
Debt Instrument [Line Items] | ||||
Principal Outstanding | 583 | 583 | ||
Interest Rate | 8.13% | 8.13% | ||
Debt instrument, maturity date | 1-Oct-18 | |||
Senior Notes and Debentures [Member] | Senior Unsecured Debt [Member] | Senior Note Due 3/15/2019 [Member] | ||||
Debt Instrument [Line Items] | ||||
Principal Outstanding | 434 | 434 | ||
Interest Rate | 7.13% | 7.13% | ||
Debt instrument, maturity date | 15-Mar-19 | |||
Senior Notes and Debentures [Member] | Senior Unsecured Debt [Member] | Senior Note Due 10/24/2019 [Member] | ||||
Debt Instrument [Line Items] | ||||
Principal Outstanding | 341 | [3] | 350 | [3] |
Interest Rate | 3.56% | [3] | 3.55% | [3] |
Debt instrument, maturity date | 24-Oct-19 | [3] | ||
Senior Notes and Debentures [Member] | Senior Unsecured Debt [Member] | Senior Note Due 4/15/2020 [Member] | ||||
Debt Instrument [Line Items] | ||||
Principal Outstanding | 1,022 | 1,022 | ||
Interest Rate | 8.50% | 8.50% | ||
Debt instrument, maturity date | 15-Apr-20 | |||
Senior Notes and Debentures [Member] | Senior Unsecured Debt [Member] | Senior Note Due 7/1/2021 [Member] | ||||
Debt Instrument [Line Items] | ||||
Principal Outstanding | 500 | 500 | ||
Interest Rate | 9.25% | 9.25% | ||
Debt instrument, maturity date | 1-Jul-21 | |||
Senior Notes and Debentures [Member] | Senior Unsecured Debt [Member] | Senior Note Due 9/15/2021 [Member] | ||||
Debt Instrument [Line Items] | ||||
Principal Outstanding | 775 | 775 | ||
Interest Rate | 6.25% | 6.25% | ||
Debt instrument, maturity date | 15-Sep-21 | |||
Senior Notes and Debentures [Member] | Senior Unsecured Debt [Member] | Senior Note Due 4/15/2022 [Member] | ||||
Debt Instrument [Line Items] | ||||
Principal Outstanding | 500 | 500 | ||
Interest Rate | 8.75% | 8.75% | ||
Debt instrument, maturity date | 15-Apr-22 | |||
Senior Notes and Debentures [Member] | Senior Unsecured Debt [Member] | Senior Note Due 1/15/2023 [Member] | ||||
Debt Instrument [Line Items] | ||||
Principal Outstanding | 850 | 850 | ||
Interest Rate | 7.13% | 7.13% | ||
Debt instrument, maturity date | 15-Jan-23 | |||
Senior Notes and Debentures [Member] | Senior Unsecured Debt [Member] | Senior Note Due 4/15/2024 [Member] | ||||
Debt Instrument [Line Items] | ||||
Principal Outstanding | 750 | 750 | ||
Interest Rate | 7.63% | 7.63% | ||
Debt instrument, maturity date | 15-Apr-24 | |||
Senior Notes and Debentures [Member] | Senior Unsecured Debt [Member] | Senior Note Due 1/15/2025 [Member] | ||||
Debt Instrument [Line Items] | ||||
Principal Outstanding | 775 | 775 | ||
Interest Rate | 6.88% | 6.88% | ||
Debt instrument, maturity date | 15-Jan-25 | |||
Senior Notes and Debentures [Member] | Senior Unsecured Debt [Member] | Debenture Due 11/1/2025 [Member] | ||||
Debt Instrument [Line Items] | ||||
Principal Outstanding | 138 | 138 | ||
Interest Rate | 7.00% | 7.00% | ||
Debt instrument, maturity date | 1-Nov-25 | |||
Senior Notes and Debentures [Member] | Senior Unsecured Debt [Member] | Debenture Due 8/15/2026 [Member] | ||||
Debt Instrument [Line Items] | ||||
Principal Outstanding | 2 | 2 | ||
Interest Rate | 6.80% | 6.80% | ||
Debt instrument, maturity date | 15-Aug-26 | |||
Senior Notes and Debentures [Member] | Senior Unsecured Debt [Member] | Senior Note Due 1/15/2027 [Member] | ||||
Debt Instrument [Line Items] | ||||
Principal Outstanding | 346 | 346 | ||
Interest Rate | 7.88% | 7.88% | ||
Debt instrument, maturity date | 15-Jan-27 | |||
Senior Notes and Debentures [Member] | Senior Unsecured Debt [Member] | Senior Note Due 8/15/2031 [Member] | ||||
Debt Instrument [Line Items] | ||||
Principal Outstanding | 945 | 945 | ||
Interest Rate | 9.00% | 9.00% | ||
Debt instrument, maturity date | 15-Aug-31 | |||
Senior Notes and Debentures [Member] | Senior Unsecured Debt [Member] | Debenture Due 10/1/2034 [Member] | ||||
Debt Instrument [Line Items] | ||||
Principal Outstanding | 1 | 1 | ||
Interest Rate | 7.68% | 7.68% | ||
Debt instrument, maturity date | 1-Oct-34 | |||
Senior Notes and Debentures [Member] | Senior Unsecured Debt [Member] | Debenture Due 7/1/2035 [Member] | ||||
Debt Instrument [Line Items] | ||||
Principal Outstanding | 125 | 125 | ||
Interest Rate | 7.45% | 7.45% | ||
Debt instrument, maturity date | 1-Jul-35 | |||
Senior Notes and Debentures [Member] | Senior Unsecured Debt [Member] | Debenture Due 10/1/2046 [Member] | ||||
Debt Instrument [Line Items] | ||||
Principal Outstanding | 193 | 193 | ||
Interest Rate | 7.05% | 7.05% | ||
Debt instrument, maturity date | 1-Oct-46 | |||
Subsidiary Senior Notes And Debentures [Member] | Senior Unsecured Debt [Member] | Subsidiary Senior Note Due 2/15/2028 [Member] | ||||
Debt Instrument [Line Items] | ||||
Principal Outstanding | 200 | 200 | ||
Interest Rate | 6.73% | 6.73% | ||
Debt instrument, maturity date | 15-Feb-28 | |||
Subsidiary Senior Notes And Debentures [Member] | Senior Unsecured Debt [Member] | Subsidiary Senior Note Due 10/15/2029 [Member] | ||||
Debt Instrument [Line Items] | ||||
Principal Outstanding | $50 | $50 | ||
Interest Rate | 8.40% | 8.40% | ||
Debt instrument, maturity date | 15-Oct-29 | |||
[1] | Interest rate represents a weighted average of the stated interest rates of multiple issuances. | |||
[2] | Represents borrowings under the 2011 CoBank Credit Agreement, as defined below. | |||
[3] | Represents borrowings under the 2014 CoBank Credit Agreement, as defined below. |
LongTerm_Debt_Debt_Maturities_
Long-Term Debt (Debt Maturities By Year) (Details) (USD $) | Mar. 31, 2015 |
In Thousands, unless otherwise specified | |
Long-Term Debt [Abstract] | |
Principal Payments 2015 (remaining nine months) | $169 |
Principal Payments 2016 | 384 |
Principal Payments 2017 | 646 |
Principal Payments 2018 | 620 |
Principal Payments 2019 | 645 |
Principal Payments 2020 | 1,022 |
Principal Payments Thereafter | $6,169 |
Income_Taxes_Narrative_Details
Income Taxes (Narrative) (Details) (USD $) | 3 Months Ended |
In Millions, unless otherwise specified | Mar. 31, 2014 |
Income Taxes [Abstract] | |
Benefit resulting from state law changes | $3 |
Income_Taxes_Reconciliation_Of
Income Taxes (Reconciliation Of Provision For Income Taxes) (Details) | 3 Months Ended | |
Mar. 31, 2015 | Mar. 31, 2014 | |
Income Taxes [Abstract] | ||
Consolidated tax provision at federal statutory rate (in hundredths) | 35.00% | 35.00% |
State income tax provisions, net of federal income tax benefit (in hundredths) | 2.50% | 0.30% |
Changes in certain deferred tax balances (in hundredths) | -5.10% | |
All other, net (in hundredths) | -0.40% | 0.20% |
Effective tax rate (in hundredths) | 37.10% | 30.40% |
Net_Income_Loss_Per_Common_Sha2
Net Income (Loss) Per Common Share (Narrative) (Details) (USD $) | 3 Months Ended | |
In Millions, except Share data, unless otherwise specified | Mar. 31, 2015 | Mar. 31, 2014 |
Stock Options [Member] | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Shares excluded from the computation of diluted earnings per share (in shares) | 83,000 | 83,000 |
Non-Employee Directors' Deferred Fee Plan and Equity Plan [Member] | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Shares excluded from the computation of diluted earnings per share (in shares) | 1,166,000 | 1,314,000 |
Expense recognized during the period | 1 | 2 |
Net_Income_Loss_Per_Common_Sha3
Net Income (Loss) Per Common Share (Calculation Of Net Income (Loss) Per Common Share) (Details) (USD $) | 3 Months Ended | |
In Millions, except Share data in Thousands, unless otherwise specified | Mar. 31, 2015 | Mar. 31, 2014 |
Net Income (Loss) Per Common Share [Abstract] | ||
Net income (loss) | ($51) | $39 |
Less: Dividends paid on unvested restricted stock awards | -1 | -1 |
Total basic and diluted net income (loss) | ($52) | $38 |
Total weighted average shares and unvested restricted stock awards outstanding - basic (in shares) | 1,002,173 | 1,000,960 |
Less: Weighted average unvested restricted stock awards (in shares) | -7,457 | -6,934 |
Total weighted average shares outstanding - basic (in shares) | 994,716 | 994,026 |
Basic net income (loss) per common share | ($0.05) | $0.04 |
Effect of dilutive shares (in shares) | 1,502 | |
Total weighted average shares outstanding - diluted (in shares) | 994,716 | 995,528 |
Diluted net income (loss) per common share | ($0.05) | $0.04 |
Stock_Plans_Narrative_Details
Stock Plans (Narrative) (Details) (USD $) | 3 Months Ended | |
In Millions, except Share data, unless otherwise specified | Mar. 31, 2015 | Mar. 31, 2014 |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Number of stock-based compensation plan under which grants were made | 6 | |
Number of stock-based compensation plan under which grants were not made | 4 | |
Shares authorized for grant under the plans (in shares) | 22,541,000 | |
Shares available for grant under the plan (in shares) | 12,580,000 | |
Performance Shares [Member] | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Expense recognized during the period | $2 | $1 |
Restricted Stock [Member] | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Expense recognized during the period | 4 | 3 |
Restricted Stock | ||
Remaining unrecognized compensation cost associated with unvested restricted stock awards | $40 | |
Weighted average period over which unvested restricted stock awards unrecognized compensation cost is expected to be recognized (in years) | 2 years 6 months |
Stock_Plans_LTIP_Target_Perfor
Stock Plans (LTIP Target Performance Shares) (Details) (Performance Shares [Member]) | 1 Months Ended | 3 Months Ended |
Feb. 25, 2015 | Mar. 31, 2015 | |
Performance Shares [Member] | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Balance at beginning of period (in shares) | 2,682,000 | |
Shares granted (in shares) | 665,000 | 738,000 |
Shares earned (in shares) | -743,000 | |
Shares forfeited (in shares) | -116,000 | |
Balance at end of period (in shares) | 2,561,000 |
Stock_Plans_Restricted_Shares_
Stock Plans (Restricted Shares Outstanding) (Details) (Restricted Stock [Member], USD $) | 3 Months Ended | |
In Millions, except Share data, unless otherwise specified | Mar. 31, 2015 | Mar. 31, 2014 |
Restricted Stock [Member] | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Balance at beginning of period (in shares) | 7,807,000 | |
Shares granted (in shares) | 2,763,000 | 3,741,000 |
Shares earned (in shares) | -3,163,000 | |
Shares forfeited (in shares) | -199,000 | |
Balance at end of period (in shares) | 7,208,000 | |
Balance at beginning of period (in dollars per shares) | $4.75 | |
Restricted stock granted (in dollars per shares) | $7.98 | |
Restricted stock vested (in dollars per shares) | $4.90 | |
Restricted stock forfeited (in dollars per shares) | $4.49 | |
Balance at end of period (in dollars per shares) | $5.92 | $4.71 |
Balance at beginning of period | $52 | |
Restricted stock granted | 19 | 21 |
Restricted stock vested | 22 | 13 |
Balance at end of period | $51 | $44 |
Comprehensive_Income_Loss_Accu
Comprehensive Income (Loss) (Accumulated Other Comprehensive Loss, Net of Tax) (Details) (USD $) | 3 Months Ended | ||
In Thousands, unless otherwise specified | Mar. 31, 2015 | Mar. 31, 2014 | Dec. 31, 2013 |
Pension Benefits [Member] | |||
Accumulated Other Comprehensive Income (Loss) [Line Items] | |||
Balance, beginning | ($532) | ($411) | |
Amounts reclassified from accumulated other comprehensive loss | 7 | 5 | |
Net current-period other comprehensive income (loss) | 7 | 5 | |
Balance, ending | -525 | -406 | |
Postretirement Costs [Member] | |||
Accumulated Other Comprehensive Income (Loss) [Line Items] | |||
Balance, beginning | -119 | -5 | |
Amounts reclassified from accumulated other comprehensive loss | 2 | ||
Net current-period other comprehensive income (loss) | 2 | ||
Balance, ending | -117 | -5 | -5 |
Deferred Taxes On Pension And OPEB Costs [Member] | |||
Accumulated Other Comprehensive Income (Loss) [Line Items] | |||
Balance, beginning | 247 | 156 | |
Other comprehensive income before reclassifications | -2 | ||
Amounts reclassified from accumulated other comprehensive loss | -4 | -2 | |
Net current-period other comprehensive income (loss) | -6 | -2 | |
Balance, ending | 241 | 154 | |
All Other [Member] | |||
Accumulated Other Comprehensive Income (Loss) [Line Items] | |||
Balance, beginning | -404 | -260 | |
Other comprehensive income before reclassifications | -2 | ||
Amounts reclassified from accumulated other comprehensive loss | 5 | 3 | |
Net current-period other comprehensive income (loss) | 3 | 3 | |
Balance, ending | ($401) | ($257) |
Comprehensive_Income_Loss_Recl
Comprehensive Income (Loss) (Reclassification Out of AOCI) (Details) (USD $) | 3 Months Ended | |||
In Millions, unless otherwise specified | Mar. 31, 2015 | Mar. 31, 2014 | ||
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items] | ||||
Income before income taxes | ($81) | $56 | ||
Tax impact | 30 | -17 | ||
Net income (loss) | -51 | 39 | ||
Reclassification out of Accumulated Other Comprehensive Income [Member] | Pension Benefits [Member] | Amortization Of Defined Benefit Cost Items [Member] | ||||
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items] | ||||
Actuarial gains/(losses) | -7 | [1],[2] | -5 | [1],[2] |
Tax impact | 3 | [1],[2] | 2 | [1],[2] |
Net income (loss) | -4 | [1],[2] | -3 | [1],[2] |
Reclassification out of Accumulated Other Comprehensive Income [Member] | Postretirement Costs [Member] | Amortization Of Defined Benefit Cost Items [Member] | ||||
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items] | ||||
Prior-service costs | 1 | [1],[2] | 1 | [1],[2] |
Actuarial gains/(losses) | -3 | [1] | -1 | [1] |
Income before income taxes | -2 | [1],[2] | ||
Tax impact | 1 | [1],[2] | ||
Net income (loss) | ($1) | [1],[2] | ||
[1] | Amounts in parentheses indicate losses. | |||
[2] | These accumulated other comprehensive loss components are included in the computation of net periodic pension and OPEB costs (see Note 13 - Retirement Plans for additional details). |
Retirement_Plans_Narrative_Det
Retirement Plans (Narrative) (Details) (USD $) | 3 Months Ended | 12 Months Ended | |
In Millions, unless otherwise specified | Mar. 31, 2015 | Mar. 31, 2014 | Dec. 31, 2014 |
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | |||
Capitalization of pension and OPEB expense related to engineering and plant construction | $5 | $4 | |
Pension/OPEB costs | 2 | 3 | 74 |
Additional contributions to pension plan | 23 | ||
Plan assets | 1,718 | 1,673 | |
Defined Benefit Plan, Fair Value of Plan Assets, Period Increase (Decrease) | 45 | ||
Percentage of increase in pension plan | 3.00% | ||
Defined benefit plan, cash contributions by employer | 17 | ||
Benefit payments | 27 | ||
Positive investment returns | 55 | ||
Defined Benefit Plan, Estimated Future Employer Contributions in Current Fiscal Year | 100 | ||
Minimum [Member] | |||
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | |||
Estimated Pension And OPEB Expense | 85 | ||
Maximum [Member] | |||
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | |||
Estimated Pension And OPEB Expense | $105 |
Retirement_Plans_Net_Periodic_
Retirement Plans (Net Periodic Benefit Cost) (Details) (USD $) | 3 Months Ended | |
In Millions, unless otherwise specified | Mar. 31, 2015 | Mar. 31, 2014 |
Pension Benefits [Member] | ||
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | ||
Service cost | $13 | $10 |
Interest cost on projected benefit obligation | 22 | 20 |
Expected return on plan assets | -32 | -24 |
Amortization of unrecognized loss | 7 | 5 |
Net periodic benefit cost | 10 | 11 |
Postretirement Benefits Other Than Pensions (OPEB) [Member] | ||
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | ||
Service cost | 5 | 3 |
Interest cost on projected benefit obligation | 7 | 5 |
Expected return on plan assets | -1 | |
Amortization of prior service cost/(credit) | -1 | -1 |
Amortization of unrecognized loss | 3 | 1 |
Net periodic benefit cost | $14 | $7 |
Commitments_And_Contingencies_
Commitments And Contingencies (Narrative) (Details) (USD $) | 3 Months Ended |
In Millions, unless otherwise specified | Mar. 31, 2015 |
entity | |
Regulatory Commitments [Abstract] | |
Percentage of households to have broadband availability and speeds of 3 Mbps by year 2013 (in hundredths) | 85.00% |
Targeted minimum megabits per second in markets acquired by year 2013 (in Mbps) | 3 |
Targeted minimum megabits per second in markets acquired by year 2015 (in Mbps) | 4 |
Percentage of households to have broadband availability and speeds of 4 Mbps by year 2013 | 75.00% |
Percentage of households to have broadband availability and speeds of 4 Mbps by year 2014 | 80.00% |
Percentage of households to have broadband availability and speeds of 4 Mbps by year 2015 | 85.00% |
Percentage of households throughout acquired Territories with broadband availability in excess of 4 Mbps (in hundredths) | 84.80% |
Unconditional Purchase Obligation [Abstract] | |
Commitment under the arrangement in 2015 | $141 |
Vermont Joint Owners Consortium [Abstract] | |
Number of utilities forming the Vermont Joint Owners consortium | 14 |
Purchase power obligation (in hundredths) | 10.00% |
Number of years assumed if members of the consortium remained in default for the duration of the contract | 8 months |
Undiscounted purchase obligation if members of the consortium remained in default for the duration of the contract | 96 |
Minimum [Member] | |
Estimated Future Capital Expenditures For Business Operations | 650 |
Maximum [Member] | |
Estimated Future Capital Expenditures For Business Operations | $700 |