(7)	Long-Term Debt:

The activity in our long-term debt from December 31, 2011 to December 31, 2012 is summarized as follows:

				Year Ended
				December 31, 2012								Interest
				Payments								Rate at
	December 31,			and			New		December 31,			December 31,
($ in thousands)	2011			Retirements			Borrowings		2012				2012*

Senior Unsecured Debt	$	8,325,774		$	(756,078	)	$	1,350,000	$	8,919,696			7.86	%
Industrial Development
Revenue Bonds		13,550			-			-		13,550			6.33	%

Rural Utilities Service
Loan Contracts		10,197			(875	)		-		9,322			6.15	%


Total Long-Term Debt	$	8,349,521		$	(756,953	)	$	1,350,000	$	8,942,568			7.85	%

Less: Debt Discount		(31,113	)							(71	)
Less: Current Portion		(94,016	)							(560,550	)

	$	8,224,392							$	8,381,947

*	Interest rate includes amortization of debt issuance costs and debt premiums or discounts. The interest rates at December 31, 2012 represent a weighted average of multiple issuances.

Additional information regarding our Senior Unsecured Debt at December 31, 2012 and 2011 is as follows:

	2012					2011
		Principal	Interest				Principal			Interest
($ in thousands)		Outstanding	Rate				Outstanding			Rate

Senior Notes and Debentures Due:
1/15/2013	$	502,658	6.250%	$			580,724			6.250%
5/1/2014		200,000	8.250%				600,000			8.250%
3/15/2015		300,000	6.625%				300,000			6.625%
4/15/2015		374,803	7.875%				500,000			7.875%
10/14/2016*		517,500	3.095% (Variable)				575,000			3.175% (Variable)
4/15/2017		1,040,685	8.250%				1,100,000			8.250%
10/1/2018		600,000	8.125%				600,000			8.125%
3/15/2019		434,000	7.125%				434,000			7.125%
4/15/2020		1,100,000	8.500%				1,100,000			8.500%
7/1/2021		500,000	9.250%				-			-
4/15/2022		500,000	8.750%				500,000			8.750%
1/15/2023		850,000	7.125%				-			-
11/1/2025		138,000	7.000%				138,000			7.000%
8/15/2026		1,739	6.800%				1,739			6.800%
1/15/2027		345,858	7.875%				345,858			7.875%
8/15/2031		945,325	9.000%				945,325	9.000%
10/1/2034		628	7.680%				628	7.680%
7/1/2035		125,000	7.450%				125,000	7.450%
10/1/2046		193,500	7.050%				193,500	7.050%
		8,669,696					8,039,774

Subsidiary Senior Notes and Debentures Due:
12/1/2012		-	-				36,000	8.050%
2/15/2028		200,000	6.730%				200,000	6.730%
10/15/2029		50,000	8.400%				50,000		8.400%

Total	$	8,919,696	7.86%		$		8,325,774		7.93%

*Represents borrowings under the Credit Agreement with CoBank.

On May 17, 2012, the Company completed a registered offering of $500 million aggregate principal amount of 9.250% senior unsecured notes due 2021, issued at a price of 100% of their principal amount. We received net proceeds of $489.6 million from the offering after deducting underwriting fees and offering expenses. The Company also commenced a tender offer to purchase the maximum aggregate principal amount of its 8.250% Senior Notes due 2014 (the 2014 Notes) and its 7.875% Senior Notes due 2015 (the April 2015 Notes and together with the 2014 Notes, the Notes) that it could purchase for up to $500 million in cash (the Debt Tender Offer). The 2014 Notes had an effective interest cost of 10.855%, reflecting the fact that such notes were issued at a discount in April 2009.

Pursuant to the Debt Tender Offer, the Company accepted for purchase $400 million aggregate principal amount of 2014 Notes, tendered for total consideration of $446.0 million, and $49.5 million aggregate principal amount of April 2015 Notes, tendered for total consideration of $54.0 million. Frontier used proceeds from the sale of its May 2012 offering of $500 million of 9.250% Senior Notes due 2021, plus cash on hand, to purchase the Notes.

In connection with the Debt Tender Offer and repurchase of the Notes, the Company recognized a loss of $69.0 million for the premium paid on the early extinguishment of debt during 2012. We also recognized losses of $2.1 million during 2012 for $78.1 million in total open market repurchases of our 6.25% Senior Notes due 2013.

On August 15, 2012, the Company completed a registered offering of $600 million aggregate principal amount of 7.125% senior unsecured notes due 2023 (the 2023 Notes), issued at a price of 100% of their principal amount. We received net proceeds of $588.1 million from the offering after deducting underwriting fees and offering expenses. The Company intends to use the net proceeds from the sale of the notes to repurchase or retire existing indebtedness or for general corporate purposes.

On October 1, 2012, the Company completed a registered debt offering of $250 million aggregate principal amount of the 2023 Notes, issued at a price of 104.250% of their principal amount, equating to an effective yield of 6.551%. We received net proceeds of $255.9 million from the offering after deducting underwriting fees and offering expenses. The notes are an additional issuance of, are fully fungible with and form a single series voting together as one class with the $600 million aggregate principal amount of the 2023 Notes issued by the Company on August 15, 2012. The Company intends to use the net proceeds from the sale of the notes to repurchase or retire existing indebtedness or for general corporate purposes.

On October 1, 2012, the Company accepted for purchase $75.7 million and $59.3 million aggregate principal amount of the April 2015 Notes and its 8.250% Senior Notes due 2017 (the 2017 Notes), respectively, in open market repurchases for total consideration of $154.7 million. The repurchases resulted in a loss on the early retirement of debt of $19.3 million.

The Company has a credit agreement (the 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 entire facility was drawn upon execution of the Credit Agreement in October 2011. Repayment of the outstanding principal balance is made in quarterly installments in the amount of $14,375,000, which commenced on March 31, 2012, with the remaining outstanding principal balance to be repaid on the final maturity date. Borrowings under the Credit Agreement bear interest based on the margins over the Base Rate (as defined in the 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 Credit Agreement. The current pricing on this facility is LIBOR plus 2.875%. The maximum permitted leverage ratio is 4.5 times. Proceeds were used to repay in full the remaining outstanding principal on three debt facilities (Frontier's $200 million Rural Telephone Financing Cooperative term loan maturing October 24, 2011, its $143 million CoBank term loan maturing December 31, 2012, and its $130 million CoBank term loan maturing December 31, 2013) and the remaining proceeds were used for general corporate purposes.

The Credit Agreement contains customary representations and warranties, affirmative and negative covenants, including a restriction on the Company's ability to declare dividends if an event of default has occurred or will result therefrom, a financial covenant that requires compliance with a leverage ratio, and customary events of default. Upon proper notice, the Company may, in whole or in part, repay the facility without premium or penalty, but subject to breakage fees on LIBOR loans, if applicable. Amounts pre-paid may not be re-borrowed.

We have a $750.0 million revolving credit facility. As of December 31, 2012, we had not made any borrowings under this facility. The terms of the credit facility are set forth in the credit agreement (the Revolving Credit Agreement), dated as of March 23, 2010, among the Company, the Lenders party thereto, and JPMorgan Chase Bank, N.A., as Administrative Agent. Associated facility fees under the credit facility will vary from time to time depending on the Company's credit rating (as defined in the Revolving Credit Agreement) and were 0.625% per annum as of December 31, 2012. The credit facility is scheduled to terminate on January 1, 2014. During the term of the credit facility, the Company may borrow, repay and reborrow funds, and may obtain letters of credit, subject to customary borrowing conditions. Loans under the credit facility will bear interest based on the alternate base rate or the adjusted LIBOR rate (each as determined in the Revolving Credit Agreement), at the Company's election, plus a margin specified in the Revolving Credit Agreement based on the Company's credit rating. Letters of credit issued under the credit facility will also be subject to fees that vary depending on the Company's credit rating. The credit facility is available for general corporate purposes but may not be used to fund dividend payments.

We also have a $40.0 million unsecured letter of credit facility, as amended. The terms of the letter of credit facility are set forth in a Credit Agreement, dated as of September 8, 2010, among the Company, the Lenders party thereto, and Deutsche Bank AG, New York Branch (the Bank), as Administrative Agent and Issuing Bank (the Letter of Credit Agreement). An initial letter of credit for $190.0 million was issued to the West Virginia Public Service Commission to guarantee certain of our capital investment commitments in West Virginia in connection with the Transaction. The initial commitments under the Letter of Credit Agreement expired on September 20, 2011, with the Bank exercising its option to extend $100.0 million of the commitments to September 20, 2012. On September 11, 2012, the Company entered into an amendment to the Letter of Credit Agreement to extend $40 million of the commitments to September 20, 2013. Two letters of credit, one for $20 million expiring March 20, 2013 and the other for $20 million expiring September 20, 2013, were issued on September 13, 2012. The Company is required to pay an annual facility fee on the available commitment, regardless of usage. The covenants binding on the Company under the terms of the amended Letter of Credit Agreement are substantially similar to those in the Company's other credit facilities, including limitations on liens, substantial asset sales and mergers, subject to customary exceptions and thresholds.

On April 12, 2010, in anticipation of the Transaction, the entity then holding the assets of the Acquired Business completed a private offering for $3.2 billion aggregate principal amount of Senior Notes (the Senior Notes). The gross proceeds of the offering, plus $125.5 million (the Transaction Escrow) contributed by Frontier, were deposited into an escrow account. Immediately prior to the Transaction, the proceeds of the notes offering (less the initial purchasers' discount) were released from the escrow account and used to make a special cash payment to Verizon, as contemplated by the Transaction, with amounts in excess of the special cash payment and the initial purchasers' discount received by the Company ($53.0 million). In addition, the $125.5 million Transaction Escrow was returned to the Company.

Upon completion of the Transaction on July 1, 2010, we entered into a supplemental indenture with The Bank of New York Mellon, as Trustee, pursuant to which we assumed the obligations under the Senior Notes. The Senior Notes were recorded at their fair value on the date of acquisition, which was $3.2 billion.

As of December 31, 2012, we were in compliance with all of our debt and credit facility financial covenants.

Our principal payments for the next five years are as follows as of December 31, 2012:

	Principal
($ in thousands)	Payments

2013	$	560,550
2014	$	257,916
2015	$	732,746
2016	$	345,466
2017	$	1,041,186

Other Obligations

On September 8, 2011, the Company contributed four administrative properties to its qualified defined benefit pension plan. None of the buildings were under state regulation that required individual PUC approval. The pension plan obtained independent appraisals of the properties and, based on these appraisals, the pension plan recorded the contributions at their fair value of $58.1 million. The Company has entered into leases for the contributed properties for 15 years at a combined aggregate annual rent of $5.8 million. The properties are managed on behalf of the pension plan by an independent fiduciary, and the terms of the leases were negotiated with the fiduciary on an arm's-length basis.

The contribution and leaseback of the properties was treated as a financing transaction and, accordingly, the Company continues to depreciate the carrying value of the properties in its financial statements and no gain or loss was recognized. An initial obligation of $58.1 million was recorded in our consolidated balance sheet within "Other liabilities" for $57.5 million and within "Other current liabilities" for $0.6 million and is reduced as lease payments are made to the pension plan.

During 2012, the Company entered into a sale and leaseback arrangement for a facility in Everett, Washington and entered into a capital lease for the use of fiber in the state of Minnesota. These agreements have lease terms of 12 and 23 years, respectively. These capital lease obligations as of December 31, 2012 are included in our consolidated balance sheet within "Other liabilities" and "Other current liabilities."

Future minimum payments for finance lease obligations and capital lease obligations as of December 31, 2012 are as follows:

($ in thousands)	Finance Lease Obligations		Capital Lease Obligations

Year ending December 31:
2013	$	5,339	$	3,055
2014		5,170		3,107
2015		5,276		3,161
2016		5,407		3,216
2017		5,550		3,273
Thereafter		54,274		22,387
Total future payments	$	81,016		38,199
Less: Amounts representing interest				(11,603	)
Present value of minimum lease payments			$	26,596