Interest expense for the third quarter of 2012 was $172.2 million as compared to $165.8 million in the third quarter of 2011, a $6.4 million increase, primarily due to higher average debt levels and lower capitalized interest in 2012. In August 2012, the Company completed a registered offering of $600.0 million aggregate principal amount of 7.125% senior unsecured notes due 2023. We received net proceeds of approximately $588.1 million from the offering which we will use to repurchase or retire existing indebtedness or for general corporate purposes.
Income tax expense for the third quarter of 2012 was $35.7 million as compared to a $6.9 million tax benefit in the third quarter of 2011, a $42.6 million increase, principally due to higher pretax income and the reduced impact for the reversal of uncertain tax positions of $6.2 million.
Net income attributable to common shareholders of Frontier was $67.0 million, or $0.07 per share, in the third quarter of 2012, as compared to $20.4 million, or $0.02 per share, in the third quarter of 2011. The third quarter of 2012 includes severance costs of $6.8 million, integration costs of $4.5 million and losses on the early extinguishment of debt of $0.2 million, offset by the reversal of uncertain tax positions of $7.8 million (combined net impact of $0.2 million after tax). Excluding the impact of the aforementioned items, non-GAAP adjusted net income attributable to common shareholders of Frontier for the third quarter of 2012 would be $66.8 million, or $0.07 per share.
Capital expenditures for Frontier business operations were $195.0 million for the third quarter of 2012 and $571.1 million for the first nine months of 2012. Capital expenditures related to integration activities were $10.8 million for the third quarter of 2012 and $38.8 million for the first nine months of 2012.Operating cash flow, as adjusted and defined by the Company in the attached Schedule B, was $581.3 million for the third quarter of 2012 resulting in an operating cash flow margin of 46.4 percent. Operating cash flow, as reported, of $573.6 million for the third quarter of 2012 has been adjusted to exclude $6.8 million of severance costs and $4.5 million of integration costs, partially offset by $3.6 million of non-cash pension and other postretirement benefit costs. Free cash flow, as defined by the Company in the attached Schedule A, was $215.3 million for the third quarter of 2012 and $753.3 million for the first nine months of 2012. The Company’s dividend represents a payout of 40 percent of free cash flow for the first nine months of 2012. Working Capital At September 30, 2012, we had a working capital surplus of $608.2 million, which includes the classification of certain debt maturing in the first quarter of 2013 of $502.7 million as a current liability. We believe our operating cash flows, existing cash balances and existing revolving credit facility will be adequate to meet our working capital and other cash requirements.
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