Annual Report of Employee Stock Plans (11-k)

Date : 06/18/2019 @ 9:03PM
Source : Edgar (US Regulatory)
Stock : Frontier Communications Corp. (FTR)
Quote : 1.55  -0.12 (-7.19%) @ 12:00AM

Annual Report of Employee Stock Plans (11-k)



United States Securities and Exchange Commission



Washington, D.C. 20549





Form 11-K



(Mark One)



     Annual Report Pursuant to Section 15(d) of the Securities Exchange Act of 1934



For the fiscal year ended December 31, 201 8



o r



     Transition Report Pursuant to Section 15(d) of the Securities Exchange Act of 1934





For the transition period from _____ to _____





Commission file number 001-11 001





Frontier Communications   401(k) Savings Plan



(Full title of the Plan)





Frontier Communications Corporation

401 Merritt 7

                 Norwalk , CT  06 851                 





(Name of issuer of the securities held

pursuant to the Plan and the address

of its principal executive offices)

 


 







FRONTIER COMMUNICATIONS   401( k ) SAVINGS PLAN



Financial Statements and Supplemental Schedule



December 31, 201 8   and 201 7



(With Report of Independent Registered Public Accounting Firm)

 


 





FRONTIER COMMUNICATIONS   401( k ) SAVINGS PLAN







Table of Contents





 



Page



 

Report of Independent Registered Public Accounting Firm

1



 

Financial Statements:

 



 

Statements of Net Assets Available for Benefits as of December 31, 201 8 and 201 7

2



 

Statement of Changes in Net Assets Available for Benefits for the Year Ended

 

December 31, 201 8

3



 

Notes to Financial Statements

4    1 1



 

Supplemental Schedules: *

 



 

Schedule H, Line 4(i) – Schedule of Assets (Held at End of Year) as of December 31, 201 8

1 2



 

Signature

1 3



 

Consent of Independent Registered Public Accounting Firm

1 4



 



 



 



 



 



 



 



*   Schedules required by Section 2520.103-10 of the United States Department of Labor’s Rules and Regulations for Reporting and Disclosure under the Employee Retirement Income Security Act of 1974 have been omitted because they are not applicable.

 


 

 



Report of Independent Registered Public Accounting Firm



To the Participants and Plan Administrator

of the Frontier Communications 401(k) Savings Plan



Opinion on the Financial Statements

We have audited the accompanying statements of net assets available for benefits of the Frontier Communications 401(k) Savings Plan (the Plan) as of December 31, 201 8 and 201 7 , the related statement of changes in net assets available for benefits for the year ended December 31, 201 8 , and the related notes to the financial statements (collectively, the financial statements). In our opinion, the financial statements present fairly, in all material respects, the net assets available for benefits of the Plan as of December 31, 201 8 and 201 7 , and the changes in net assets available for benefits for the year ended December 31, 201 8 , in conformity with accounting principles generally accepted in the United States of America.



Basis for Opinion

These financial statements are the responsibility of the Plan’s management. Our responsibility is to express an opinion on the Plan’s financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Plan in accordance with U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.



We conducted our audits in accordance with the standards of the PCAOB.  Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion.



Report on Supplemental Information

The supplemental information in the accompanying schedule of assets (held at end of year) as of December 31, 201 8 , has been subjected to audit procedures performed in conjunction with the audit of the Plan’s financial statements. The supplemental information is presented for the purpose of additional analysis and is not a required part of the financial statements but includes supplemental information required by the Department of Labor’s Rules and Regulations for Reporting and Disclosure under the Employee Retirement Income Security Act of 1974.  The supplemental information is the responsibility of the Plan's management. Our audit procedures included determining whether the supplemental information reconciles to the financial statements or the underlying accounting and other records, as applicable, and performing procedures to test the completeness and accuracy of the information presented in the supplemental information. In forming our opinion on the supplemental information in the accompanying schedule, we evaluated whether the supplemental information, including its form and content, is presented in conformity with the Department of Labor’s Rules and Regulations for Reporting and Disclosure under the Employee Retirement Income Security Act of 1974. In our opinion, the supplemental information in the accompanying schedule is fairly stated in all material respects in relation to the financial statements as a whole.





/s/ Insero & Co. CPAs, LLP

Certified Public Accountants



We have served as the Plan’s auditor since the year ended December 31, 2004.



Insero & Co . CPAs, LLP

Certified Public Accountants

Rochester, New York

June 18 ,   201 9

 

1

 


 

FRONTIER COMMUNICATIONS 401(k) SAVINGS PLAN

Statements of Net Assets Available for Benefits

December 31, 2018 and 2017





 

 

 

 

 

 



 

2018

 

2017

ASSETS

 

 

 

 

 

 

Interest in Frontier Communications 401(k) Plans

 

 

 

 

 

 

Master Trust, at fair value

 

$

2,343,402,023 

 

$

2,691,552,335 



 

 

 

 

 

 

Receivables:

 

 

 

 

 

 

Notes receivable from participants

 

 

108,465,765 

 

 

110,418,184 

Employer contributions

 

 

466,852 

 

 

232,765 

Total receivables

 

 

108,932,617 

 

 

110,650,949 



 

 

 

 

 

 

LIABILITIES

 

 

 

 

 

 

Contributions Payable

 

 

 -

 

 

472,385 

Net assets available for benefits

 

$

2,452,334,640 

 

$

2,801,730,899 



 

 

 

 

 

 





See accompanying notes to financial statements.

 

2

 


 

FRONTIER COMMUNICATIONS 401(k) SAVINGS PLAN

Statement of Changes in Net Assets Available for Benefits

December 31, 2018









 

 

 



 

 

 



 

2018

Additions to net assets attributed to:

 

 

 



 

 

 

Interest on notes receivable from participants

 

$

5,188,908 



 

 

 

Contributions:

 

 

 

Participants

 

 

111,634,829 

Employer

 

 

40,945,606 

Rollovers

 

 

4,956,986 

Total contributions

 

 

157,537,421 



 

 

 

Total additions

 

 

162,726,329 



 

 

 

Deductions from net assets attributed to:

 

 

 



 

 

 

Investment loss from Plan's interest in Frontier

 

 

 

Communications 401(k) Plans Master Trust

 

 

(165,750,759)



 

 

 

Benefits paid to participants

 

 

(344,763,320)

Administrative and other expenses

 

 

(1,608,509)

Total deductions

 

 

(512,122,588)



 

 

 

Net decrease in net assets available for benefits

 

 

(349,396,259)



 

 

 

Net assets available for benefits:

 

 

 

Beginning of year

 

 

2,801,730,899 

End of year

 

$

2,452,334,640 



 

 

 



See accompanying notes to financial statements.

 

3

 


 

FRONTIER COMMUNICATIONS 401(k) SAVINGS PLAN

Notes to the Financial Statements

December 31, 2018 and 2017





  (1)          Description of the Plan



General

The following brief description of the Frontier Communications   401(k) Savings Plan (the “Plan”)   provides general and limited information. Participants should refer to the Plan document for a more comprehensive description of the Plan’s provisions. Copies of the Plan document are available from the Plan sponsor.



(a )    Background

The Plan is a defined contribution plan sponsored and managed by Frontier Communications Corporation ( “Frontier” or the “Company” or the “Plan Administrator” ). Under the terms of the Plan, employees are eligible to participate in the P lan immediately followin g the employee’s completion of 30 days of service (the “entry date”) , provided that the employee is employed by a participating employer in an eligible class of employees. Leased employees, individuals not on the employer’s payroll, per diem and casual workers, temporary employees, and scholarship students are ineligible to participate. The Plan is subject to the provisions of the Employee Retirement Income Security Act of 1974 (“ERISA”).



O n January 25, 2017, members of Communications Workers of America, (“CWA” or “Union”) St. Marys local 2001 and Bluefield local 2276 in West Virginia were transferred out of the Plan.



 ( b)   C ontributions

Eligible employees may contribute, in 1 % increments, up to 75 % of their annual eligible compensation in elective pre-tax deferrals through payroll deductions, subject to certain maximum contribution restrictions. The maximum contribution allowed for deferral for U.S . federal income tax purposes in 201 8   was $ 18,500



In addition, e ligible Company union employees covered by collective bargaining agreements may also elect to make after-tax contributions , in 1 % increments of their annual eligible compensation , through payroll deductions up to 50 % of the participant’s eligible compensation reduced by the percentage of eligible compensation deferred through elective p re -tax deferrals.



The Plan allow s for the election of Roth 401(k) contributions and regular after-tax contribu tions for non-union employees. No matching contributions are made with respect to regular after-tax contributions ,   e xcept for c ertain union employee Plan participants whom are eligible to receive matching contribution s with respect to their Roth 401(k) and after tax contribution.



All employees eligible to make contributions under the Plan and who have attained or will attain age 50 before the close of the Plan year shall be eligible to make catch-up contributions in accordance with, and subject to the limitations of, Section 414(v) of the Internal Revenue Code (“ IRC ”). The maximum allowable catch-up contribution for 201 8   was $ 6,000 . No matching contributions are made with respect to a p articipant’s catch-up contributions.



Frontier match e s 50% of each non-bargaining participant’s contribution up to   6 % of each participant’s eligible compensation. Frontier contributions for participants covered by collective bargaining agreements are determined based on the terms of those agreements.   Frontier contributions for non-union and union participants are allocated to Plan investments following the same method of allocation as that for participant-directed investments.



For certain union employees covered by collective bargaining agreements, Frontier may contribute Employer Fixed Contributions, Employer Matching Contributions ,   Discretionary Contributions and

4

 


 

FRONTIER COMMUNICATIONS 401(k) SAVINGS PLAN

Notes to the Financial Statements

December 31, 2018 and 2017

Special Transition-Y ear Contributions  ( each as defined by the Plan). Participants should refer to their respective bargaining agreements for all employer contribution requirements.



At December 31, 2017, the Plan has recorded a liability of $472,385, for amounts refundable by the Plan to participants for contributions made in excess of amounts allowed under the IRC. The Plan has not recorded a liability for excess contributions as of December 31, 2018.



(c)    Participant Accounts

Each participant’s account is credited with the participant’s contribution s and an allocation of (a)  Frontier ’s contribution and (b)  investment earnings or losses , and charged with withdrawals and an allocation of administrative expenses .   Allocations are based on each partic ipant’s investment election(s) . The benefit to which a participant is entitled is the amount that can be provided from the participant’s vested account.



(d)    V esting

Participants are vested immediately in their individual contributions plus the allocated earnings thereon. Participants become 100% vested in Frontier contributions and the related earnings on Frontier contributions upon disability, death or attainment of normal retirement age while an employee .  Except as otherwise noted, for any other termination of employment, the vesting schedule   for Frontier contributions and related earnings is as follows:





 

 

 

 

 

 



 

 

 

 

 

 



 

 

Vesting

 



Years of Service

 

Percentage

 



    

 

 

 

 

 



Less than 2 years

 

%

 

 



2 years but less than 3 years

 

40 

%

 

 



3 years but less than 4 years

 

60 

%

 

 



4 years but less than 5 years

 

80 

%

 

 



5 years or more

 

100 

%

 

 



 

 

 

 

 

 



Employees that were previously part of the Frontier Communications Corporate Services Inc. Savings and Security Plan for West Region Hourly Employees that was merged into the Plan as of December 31, 201 1 are fully vested after three years of service .   Certain e mployees that were previously part of the former AT&T 401(k) Plan s that w ere merged into the Plan as of November 7 , 201 4 are fully vested after three years of service. Certain employees that were previously part of the former Verizon 401(k) Plans that were merged into the Plan during 2016 are fully vested after 3 years of service. Certain other employees, Frontier   union employees and certain other employees covered by collective bargaining agreements are immediately 100% vested in all contributions and allocated earnings thereon. 



 ( e)   N otes Receivable from Participants

Participants in the Plan may request to borrow up to the lesser of 50% of their vested account balance or $50,000. The interest rate paid by the participant is equal to the prime interest rate in effect at the beginning of the month in which the loan is processed plus 1%, and remains fixed at that rate for the term of the loan. The maximum loan repayment period is five years, or currently up to fifteen years for the purchase of a primary residence. Loan repayments are after tax, and are credited to each p articipant’s account as the payments are made. A participant may repay a loan in full at any time by remitting his/her payment directly to Fidelity Management Trust Company (the “Trustee”), the trustee of the Plan. Any distribution following a participant’s termination of employment is reduced by any loan balance outstanding at the time of such distribution .  



5

 


 

FRONTIER COMMUNICATIONS 401(k) SAVINGS PLAN

Notes to the Financial Statements

December 31, 2018 and 2017

(f)     Payment of Benefits

P articipants may keep any portion of their account in the Plan beyond the attainment of age 70 ½.  Inactive participants , after age 70 ½ , must take the required minimum distribution of their balances on or before April 1st of the calendar year after they retire.



Upon termination of employment or permanent disability, a participant is entitled to receive a lump - sum distribution in cash , or stock for any balance invested in the Frontier Communications Corporation Common Stock Fund , for the vested portion of his/her account .   Participants may a lso elect to receive between 2 and 20 annual installments or monthly installments over a period equal to the life expectancy of the participant. If the value of the terminating participant's vested account balance does not exceed $ 5 ,000, the participant’s balance will be distributed automatically at that time.



In-service withdrawals from a participant’s vested account balance are also permitted under limited circumstances such as attaining age 59  ½   or financial hardship.



(g)    Forfeitures

Forfeitures of nonvested Frontier contributions are applied first to the payment of Plan administrative expenses, to the extent not previously paid by Frontier , with any excess being applied to reduce future contributions of Frontier .   Forfeited nonvested Frontier contributions   of approximately $ 1,860, 000 were used to partially fund Frontier contributions for the year ended December 31, 201 8 .   As of December   31, 201 8 , forfeited nonvested Frontier contributions that remain ed to be used by Frontier totaled approximately $ 1,061,0 00 .  

 

(h)    Administrative Expenses

The administrative expense s of the Plan are paid by the P lan or by Frontier .   The majority of Plan administrative expenses paid by p articipants relate to investment management fees which are deducted from participant account balances.  



(i )     Dividends

Dividends attributable to the participant’s interest in the Frontier Communications Corporation Common Stock Fund a re reinvested in the Frontier Communications Corporation Common Stock Fund, unless the participant elect s , in a manner approved by the Retirement Plan Committee of the Frontier Board of Directors, to receive dividends entirely in cash. All cash dividends are received by the Trustee and distributed to participants in cash no later than 90 days after the close of the Plan year.   In 2018 , Frontier’s Board of Directors suspended the quarterly cash dividend on the Company’s common stock and no dividends were paid in 2018.



( j )     I nvestments

T he Plan’s investments are in a   Master Trust, which provides for the investment of assets of the Plan and another Fro ntier sponsored retirement plan . Each participating retirement plan has an undivided interest in the Master Trust. The assets of the Master Trust are held by the Trustee , who is responsible for the control and disbursement of the funds and portfolios of the Plan. Investment fees are charged against the earnings of the funds and portfolios.



Interest, dividends and net dep reciation in the fair value of investments are allocated to the Plan on a daily basis based upon the Plan’s participation in the various investment funds and portfolios that comprise the Master Trust as a percentage of the total participation in such funds and portfolios.



E ffective April 30, 2018, the Verizon and AT&T Stock Funds (the “Stock Funds”) were removed as investment options in the Plan.   Participants that were invested in the Stock Funds had to decide whether to exchange all or a portion of their balance in the fund to another investment option or

6

 


 

FRONTIER COMMUNICATIONS 401(k) SAVINGS PLAN

Notes to the Financial Statements

December 31, 2018 and 2017

withdraw their available stock fund balance prior to April 30, 2018. If participants did not make an election to exchange their available Stock Funds these funds were liquidated, and the cash proceeds were invested in the Fidelity Freedom Funds based on current age of participant assuming a retirement of age 65.



A participant is restricted from investing more than 15% of a participant’s balance or current contributions in the Frontier Communications Corporation Common S tock Fu nd .



( k )    Registered Investment Company Fees

Investments in r egistered investment companies   (mutual f unds) are subject to sales charges and annual fees for marketing and distribution costs of the funds. These fees are deducted prior to the allocation of the investment earnings activity and thus not separately identifiable as an expense of the Plan.



(2)          Summary of Significant Accounting Policies



(a)    Basis of Accounting

The financial statements of the Plan are prepared under the accrual method of accounting.  



(b)    Use of Estimates

The preparation of the Plan’s financial statements in conformity with accounting principles generally accepted in the United States of America (“U.S. GAAP”) requires management to make estimates and assumptions that affect the reported amount of assets, liabilities, and changes therein, and disclosures of contingent assets and liabilities .   Actual results may differ from these estimates.



(c)    I nvestments

The Master Trust ’s   investments are stated at fair value.   Shares of registered investment companies and money market funds are valued at quoted market prices, which represent the net asset value of shares held by the Master Trust .   The Plan’s interest in collective trusts are valued at Net Asset Value ( NAV ) based on information reported by the investment advisor using the audited financial statements of the collective trust at year-end. The NAV is used as a practical expedient to estimate fair value. Common stock is valued at its quoted market price as of the end of the Plan year.   I n addition, the Plan offers a brokerage option, BrokerageL ink , whereby participants invest in publicly traded registered investment companies not offered directly by the Plan.



P urchases and sales of securities are recorded on a trade-date basis.   Interest income is recorded on the accrual basis. Dividends are recorded on the ex- dividend date. The net de preciation in fair value of investments in the Master Trust consists of the net realized gains and losses on the disposal of investments during 201 8   and the net unrealized de preciation of the market value for the investments remaining in the Master Trust as of December   31, 201 8 .



( d )    Payment of Benefits

Benefits to participants are recorded when paid.



( e )    Notes Receivable from Participants

Notes receivable from p articipants are stated at their unpaid principal balance plus any accrued but unpaid interest.  Delinquent notes receivable are reclassified as distributions based upon the terms of the Plan document.



(f)     Revenue Credit Account

The Plan has a revenue credit account which is a suspense account funded with excess revenue generated by the Plan through October 1, 2018 .   These funds may be used to pay plan expenses or

7

 


 

FRONTIER COMMUNICATIONS 401(k) SAVINGS PLAN

Notes to the Financial Statements

December 31, 2018 and 2017

allocated to each participant who has an account balance at the time of allocation.   After October 1, 2018, any revenue credits generated by certain funds are passed back to the participants in those funds.



( g )    Recent Accounting Pronouncements

In February 2017, the Financial Accounting Standards Board ( FASB ) issued Accounting Standards Update ( ASU ) No. 2017-06, Plan Accounting: Defined Benefit Pension Plans ( Topic 960 ) Defined Contribution Pension Plans ( Topic 962 ) Health and Welfare Benefit Plans ( Topic 965 ), Employee Benefit Plan Master Trust Reporting. ”   The amendments in this u pdate clarify presentation requirements for a plan’s interest in a master trust and require more detailed disclosures of the plan’s interest in the master trust. The amendments in this update are effective for fiscal years beginning after December 15, 2018. Early adoption is permit t ed and requires retrospective presentation for all periods in which financial statements are presented. The Plan has elected not to adopt for the current plan year, and is reviewing the impact that adoption would have on its financial statements.



In August 2018, the FASB issued ASU No. 2018-13, “Fair Value Measurement (Topic 820): Disclosure Framework – Changes to the Disclosure Requirements for Fair Value Measurement.” The amendments in this new guidance remove, modify, and add certain disclosure requirements related to fair value measurements covered in Topic 820. The new standard is effective for fiscal years beginning after December 15, 2019. Early adoption is permitted with certain requirements applied prospectively, and all other requirements applied retrospectively to all periods presented. The Plan has elected not to adopt for the current plan year and is reviewing the impact the adoption would have on its disclosures.



(3 )          Investment in Master Trust



The Plan’s specific interest in the Master Trust is credited or charged for contributions, transfers and benefit payments relating to its participants. Realized gains and losses and changes in net unrealized de preciation on investments, income from investments and expenses are allocated to the Plan based on the Plan’s specific interest in the net assets of the Master Trust.  At December 31, 201 8 and 201 7 , the Plan’s interest in the net assets of the Master Trust was approximately 94 % and 95%, respectively



8

 


 

FRONTIER COMMUNICATIONS 401(k) SAVINGS PLAN

Notes to the Financial Statements

December 31, 2018 and 2017

The following table presents the fair values of investments for the Master Trust as of December 31, 201 8 and 201 7 :







 

 

 

 

 

 

 

 



 

 

2018

 

2017

 



 

 

 

 

 

 

 

 



Frontier Communications

 

 

 

 

 

 

 



Corporation Common Stock

 

$

1,581,567 

 

$

3,525,506 

 



Verizon Communications Inc.

 

 

 

 

 

 

 



Common Stock

 

 

 -

 

 

261,564,299 

 



AT&T Inc. Common Stock

 

 

 -

 

 

92,161,942 

 



BrokerageLink Common Stock

 

 

338,507 

 

 

351,090 

 



Registered Investment Companies

 

 

2,219,250,276 

 

 

2,218,964,259 

 



Collective Trusts

 

 

235,326,125 

 

 

249,044,085 

 



Money Market Funds

 

 

23,950,875 

 

 

15,663,567 

 



Investments, at fair value

 

 

2,480,447,350 

 

 

2,841,274,748 

 



 

 

 

 

 

 

 

 



Receivables

 

 

63 

 

 

527,509 

 



 

 

 

 

 

 

 

 



 

 

$

2,480,447,413 

 

$

2,841,802,257 

 



 

 

 

 

 

 

 

 



Investment income (loss)   of the Master Trust for the year ended December 31, 201 8 is as follows:





 

 

 

 

 



Net depreciation in fair value of investments

 

$

(338,810,388)

 



Interest and dividends

 

 

163,019,400 

 



 

 

 

 

 



 

 

$

(175,790,988)

 



 

 

 

 

 



Fair value is defined under U.S. GAAP as the exit price associated with the sale of an asset or transfer of a liability in an orderly transaction between market participants at the measurement date. Valuation techniques used to measure fair value under U.S. GAAP must maximize the use of observable inputs and minimize the use of unobservable inputs. In addition, U.S. GAAP establishes a three-tier fair value hierarchy, which prioritizes the input s used in measuring fair value.





The input levels in the hierarchy of fair value measurements ar e   as follows:





 

Input Level

Description of Input

Level 1

Observable inputs such as quoted prices in active markets for identical assets.

Level 2

Inputs other than quoted prices in active markets that are either directly or indirectly observable.

Level 3

Unobservable inputs in which little or no market data exists.

The methods described above may produce a fair value calculation that may not be indicative of net realizable value or reflective of future fair values.  Furthermore, while the Plan believes its valuation methods are appropriate and consistent with other market participants, the use of different methodologies or assumptions to determine the fair value of certain financial instruments could result in a different fair value measurement at the reporting date.



9

 


 

FRONTIER COMMUNICATIONS 401(k) SAVINGS PLAN

Notes to the Financial Statements

December 31, 2018 and 2017

The following tables represent the Master Trust’s fair value hierarchy for its financial assets measured at fair value on a recurring basis as of December 31, 201 8 and 201 7 :  





 

 

 

 

 

 

 

 

 

 

 

 



 

Master Trust Fair Value Measurements at December 31, 2018



 

Total

 

Level 1

 

Level 2

 

Level 3

Frontier Communications Corporation

 

 

 

 

 

 

 

 

 

 

 

 

Common Stock

 

$

1,581,567 

 

$

1,581,567 

 

$

 -

 

$

 -

BrokerageLink Common Stock

 

 

338,507 

 

 

338,507 

 

 

 -

 

 

 -

Registered Investment Companies

 

 

2,219,250,276 

 

 

2,219,250,276 

 

 

 -

 

 

 -

Collective Trusts (a)

 

 

235,326,125 

 

 

 -

 

 

 -

 

 

 -

Money Market Funds

 

 

23,950,875 

 

 

23,950,875 

 

 

 -

 

 

 -

Total investments at fair value

 

$

2,480,447,350 

 

$

2,245,121,225 

 

$

 -

 

$

 -



 

 

 

 

 

 

 

 

 

 

 

 







 

 

 

 

 

 

 

 

 

 

 

 



 

Master Trust Fair Value Measurements at December 31, 2017



 

Total

 

Level 1

 

Level 2

 

Level 3

Frontier Communications Corporation

 

 

 

 

 

 

 

 

 

 

 

 

Common Stock

 

$

3,525,506 

 

$

3,525,506 

 

$

 -

 

$

 -

Verizon Communications Inc.

 

 

 

 

 

 

 

 

 

 

 

 

Common Stock

 

 

261,564,299 

 

 

261,564,299 

 

 

 -

 

 

 -

AT&T Inc. Common Stock

 

 

92,161,942 

 

 

92,161,942 

 

 

 -

 

 

 -

BrokerageLink Common Stock

 

 

351,090 

 

 

351,090 

 

 

 -

 

 

 -

Registered Investment Companies

 

 

2,218,964,259 

 

 

2,218,964,259 

 

 

 -

 

 

 -

Collective Trusts (a)

 

 

249,044,085 

 

 

 -

 

 

 -

 

 

 -

Money Market Funds

 

 

15,663,567 

 

 

15,663,567 

 

 

 -

 

 

 -

Total investments at fair value

 

$

2,841,274,748 

 

$

2,592,230,663 

 

$

 -

 

$

 -



 

 

 

 

 

 

 

 

 

 

 

 



(a)   In accordance with Subtopic 820-10, certain investments that are measured at fair value using the net asset value per share (or its equivalent) practical expedient have not been classified in the fair value hierarchy. The fair value amounts presented in this table are intended to permit reconciliation of the fair value hierarchy to the amounts presented in the Master Trust .



( 4 )          Party -in Interest Transactions



Certain investments in the Master Trust   are in shares of registered investment companies and a   collective   trust that are managed by an entity related to Fidelity Management Trust Company .   Fidelity Management Trust Company   acts as the trustee as defined by the Plan and , therefore , transactions involving these asset s   qualify as party-in-interest transactions. Notes receivable from participants also qualify as party-in-interest transactions.



The Master Trust held Frontier Communications Corporation Common Stock amounting to $ 1,581,567 and $3,525,506 as of December 31, 201 8 and 201 7 , respectively.



( 5 )          Plan Termination



Although it has not expressed any intention to do so, Frontier has the right under the Plan to discontinue its contributions at any time and to terminate the Plan subject to the provisions of ERISA, Collective Bargaining Agreements and the National Labor Relations Act . In the event of plan termination, participants will become 100% vested in their accounts.



10

 


 

FRONTIER COMMUNICATIONS 401(k) SAVINGS PLAN

Notes to the Financial Statements

December 31, 2018 and 2017

( 6 )          Tax Status



The Plan received a favorable   determination letter   from the Internal Revenue Service dated   November 17, 2017 , indicating that it meets the requirements of Section 401(a) and 501(a) of the IRC and has qualified status as an employee retirement plan .



Although the Plan has been amended, the Plan Administrator and the Plan’s tax counsel believe that the Plan is currently designed and being operated in compliance with the applicable requirements of the IRC.  Therefore, no provision for income taxes has been included in the Plan’s financial statements.



U.S. GAAP require s plan management to evaluate tax positions taken by the Plan and recognize a tax liability (or asset) if the P lan has taken an uncertain position that more likely than not would not be sustained upon examination by a government authority.  The P lan A dministrator has analyzed the tax positions taken by the Plan, and has concluded that as of December 31, 201 8 , there are no uncertain positions taken or expected to be taken that would require recognition of a liability (or asset) or disclosure in the financial statements.



( 7 )          Risks and Uncertainties



The Plan offers a number of investment options including Frontier ’s common stock and a variety of pooled investment funds, some of which are registered investment companies. The investment funds principally include U.S. equities, international equities, and fixed income securities. Investment securities, in general, are exposed to various risks, such as interest rate, credit, and overall market volatility risk. Due to the level of risk associated with these investments, it is at least reasonably possible that changes in their values will occur in the near term and that such changes could materially affect participants’ account balances and the amounts reported in the Statements of Net Assets Available for Benefits.



The Master Trust’s exposure to a concentration of issuer risk is limited by the diversification of investments across all participant-directed fund elections except for the Frontier Communication s Corporation Common Stock Fund,   w hich is invested in the security of a single issuer. Additionally, the investments within certain participant-directed fund elections may be further diversified in to varied financial instruments .



 





11

 


 

FRONTIER COMMUNICATIONS 401(k) SAVINGS PLAN

 

EIN #06-0619596 Plan #005

Schedule H, Line 4(i) – Schedule of Assets (Held at End of Year)

December 31, 201 8

 











 

 

 

 

 

 

 

 



 

 

 

 

 

 

 

 

(a)

 

(b)

 

(c) and (d)

 

 

(e)

 



 

 

 

 

 

 

 

 

    

 

Identity of Issuer

 

Description of Investment

 

 

Current Value

 



 

 

 

 

 

 

 

 

*

 

Participant loans

 

Maturing in 1 to 19 years, with interest

 

 

 

 



 

 

 

rates ranging from 3.25% to 9.50%

 

$

108,465,765 

 



 

 

 

 

 

 

 

 



*Party-in-interest as defined by ERISA







 

12

 


 

FRONTIER COMMUNICATIONS 401(k) SAVINGS PLAN

 

 



Signature





Pursuant to the requirements of the Securities Exchange Act of 1934, the Plan Administrator ha s duly caused this annual report to be signed on its behalf by the undersigned , hereunto duly authorized.







Frontier Communications   401(k) Savings Plan





By :        /s/   Donald Daniels

               Donald Daniels



Senior   Vice President and Chief Accounting   O fficer

(On behalf of Frontier Communications   Corporation as Plan Administrator)





June 1 8 ,   201 9

 

13

 


 

 

 

Consent of Independent Registered Public Accounting Firm







We consent to the incorporation by reference in Registration Statements (Nos. 333-91054 and 333-203625) on Form S-8 of Frontier Communications Corporation of our report dated June 1 8 , 201 9 , relating to our audit of the financial statements and supplemental schedule of the Frontier Communications 401(k) Savings Plan, which appears in this Annual Report on Form 11-K of Frontier Communications 401(k) Savings Plan for the year ended December 31, 201 8 .  





    /s/ Insero & Co. CPAs, LLP

    Certified Public Accountants



                                                                                                            

Rochester, New York

June 1 8 ,   201 9





14


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