- Delivered accelerating revenue growth and continued strong
EBITDA growth
- Added record fiber broadband customers while growing ARPU
- Set new industry standard with Net Promoter Score six times
higher than closest cable competitor
- Raised the low end of Adjusted EBITDA guidance following strong
first half performance
Frontier Communications Parent, Inc. (NASDAQ: FYBR) (“Frontier”)
reported second-quarter 2024 results today.
“We continued to see strong demand for our high-speed, reliable
fiber internet which drove record fiber broadband net additions in
the second quarter. As a result, we delivered our second successive
quarter of year-over-year revenue growth and our fourth consecutive
quarter of Adjusted EBITDA growth,” said Nick Jeffery, President
and Chief Executive Officer of Frontier. “Growth in both customers
and ARPU this quarter resulted in a 21% year-over-year increase in
fiber broadband revenue and expanding Adjusted EBITDA margins.”
Jeffery continued, “These results demonstrate how momentum in
our fast-growing fiber business is building and driving sustainable
financial performance. At the same time, we have earned an NPS
score that is now six times higher than our closest cable
competitor, showing clearly why customers are choosing Frontier
over cable. Heading into the second half of the year, our team
remains focused on continuing to provide value to our customers and
accelerating growth in 2024 and beyond.”
Second-Quarter 2024 Highlights
- Added a record 388,000 fiber passings to reach 7.2 million
total locations passed with fiber
- Added a record 92,000 fiber broadband customers, resulting in
fiber broadband customer growth of 18.6% year-over-year
- Revenue of $1.48 billion increased 2.1% year-over-year as
growth in fiber-based products was partly offset by declines in
copper-based products
- Operating income of $91 million and net loss of $123
million
- Adjusted EBITDA of $560 million increased 5.1% year-over-year
driven by revenue growth and cost savings1
- Cash capital expenditures of $626 million plus $52 million of
vendor financing payments, for total cash capital investment of
$678 million2
- Generated net cash from operations of $374 million
Second-Quarter 2024 Consumer Results
- Consumer revenue of $789 million increased 1.8% year-over-year
as growth in fiber was partly offset by declines in copper
- Consumer fiber revenue of $523 million increased 13.2%
year-over-year as growth in broadband was partly offset by declines
in video and voice
- Consumer fiber broadband revenue of $393 million increased
22.8% year-over-year driven by growth in both fiber broadband
customers and ARPU
- Consumer fiber broadband customer net additions of 90,000
resulted in consumer fiber broadband customer growth of 19.2%
year-over-year
- Consumer fiber broadband customer churn of 1.40% compared to
1.41% in the second quarter of 2023
- Consumer fiber broadband ARPU of $65.32 increased 3.5%
year-over-year
Second-Quarter 2024 Business and Wholesale Results
- Business and Wholesale revenue of $677 million increased 3.7%
year-over-year as growth in fiber was partly offset by declines in
copper
- Business and Wholesale fiber revenue of $317 million increased
11.6% year-over-year driven by growth in data and internet
services
- Business and Wholesale fiber broadband customer net additions
of 2,000 resulted in Business and Wholesale fiber broadband
customer growth of 9.8% year-over-year
- Business and Wholesale fiber broadband customer churn of 1.31%
compared to 1.29% in the second quarter of 20233
- Business and Wholesale fiber broadband ARPU of $97.83 decreased
2.5% year-over-year3
Capital Structure
As of June 30, 2024, Frontier had total liquidity of $2.3
billion, including a cash and short-term investments balance of
approximately $1.2 billion, $0.6 billion of available borrowing
capacity on its revolving credit facility, and $0.5 billion of
available borrowing capacity on its variable funding notes
facility, subject to customary drawing conditions. Frontier’s net
leverage ratio on June 30, 2024, was approximately 4.6x4. Frontier
has no long-term debt maturities prior to 2027.
2024 Outlook5
Frontier today updated EBITDA, net cash interest expense, and
cash taxes guidance, while reaffirming all other operational and
financial expectations for 2024.
Changes to Guidance
- Adjusted EBITDA of $2.22 - $2.25 billion, an increase to the
low end of the range from prior guidance of $2.20 - $2.25
billion1
- Net cash interest payments of approximately $760 million, an
increase from prior guidance of $750 million, reflecting the fiber
securitization offering and term loan refinancing completed in July
2024
- Cash taxes of approximately $10 million, a decrease from prior
guidance of approximately $20 million
Unchanged from Prior Guidance
- Fiber passing additions of 1.3 million
- Cash capital investment of $3.00 - $3.20 billion2
- Pension and OPEB expense of approximately $40 million (net of
capitalization)
- Cash pension and OPEB contributions of approximately $125
million
Conference Call Information
As previously announced, Frontier will host a conference call to
discuss second-quarter 2024 results today, August 2, 2024,
beginning at 8:30 a.m. Eastern Time.
The conference call webcast and presentation materials are
accessible through Frontier’s Investor Relations website and will
remain archived at this location.
_______________________________
1 Adjusted EBITDA is a non-GAAP measure of
performance. See “Non-GAAP Measures” for a description of this
measure and its calculation. See Schedule A for a reconciliation of
Adjusted EBITDA to net loss.
2 Cash capital investment includes capital
expenditures and vendor financing payments for capital spend.
3 Business and Wholesale churn and ARPU
methodologies include wholesale, exclude circuits or
fiber-to-the-tower churn.
4 Net leverage ratio is a non-GAAP
measure. See “Non-GAAP Measures” and the condensed consolidated
balance sheet data contained herein for a description and
calculation of net leverage ratio.
5 The operational and financial guidance
expectations for 2024 comprise forward-looking statements related
to future events. See “Forward-Looking Statements” below. Projected
GAAP financial measures and reconciliations of projected non-GAAP
financial measures are not provided herein because such GAAP
financial measures are not available on a forward-looking basis and
such reconciliations could not be derived without unreasonable
effort.
About Frontier
Frontier (NASDAQ: FYBR) is the largest pure-play fiber provider
in the U.S. Driven by our purpose, Building Gigabit America®, we
deliver blazing-fast broadband connectivity that unlocks the
potential of millions of consumers and businesses. For more
information, visit www.frontier.com.
Non-GAAP Financial Measures
Frontier uses certain non-GAAP financial measures in evaluating
its performance, including EBITDA, EBITDA margin, Adjusted EBITDA,
Adjusted EBITDA margin, operating free cash flow, adjusted
operating expenses, and net leverage ratio, each of which is
described below. Management uses these non-GAAP financial measures
internally to (i) assist in analyzing Frontier's underlying
financial performance from period to period, (ii) analyze and
evaluate strategic and operational decisions, (iii) establish
criteria for compensation decisions, and (iv) assist in the
understanding of Frontier's ability to generate cash flow and, as a
result, to plan for future capital and operational decisions.
Management believes that the presentation of these non-GAAP
financial measures provides useful information to investors
regarding Frontier’s financial condition and results of operations
because these measures, when used in conjunction with related GAAP
financial measures, (i) provide a more comprehensive view of
Frontier’s core operations and ability to generate cash flow, (ii)
provide investors with the financial analytical framework upon
which management bases financial, operational, compensation, and
planning decisions, and (iii) present measurements that investors
and rating agencies have indicated to management are useful to them
in assessing Frontier and its results of operations.
A reconciliation of these measures to the most comparable
financial measures calculated and presented in accordance with GAAP
is included in the accompanying tables. These non-GAAP financial
measures are not measures of financial performance or liquidity
under GAAP, nor are they alternatives to GAAP measures, and they
may not be comparable to similarly titled measures of other
companies.
EBITDA is defined as net income (loss) less income tax expense
(benefit), interest expense, investment and other income (loss),
pension settlement costs, reorganization items, and depreciation
and amortization. EBITDA margin is calculated by dividing EBITDA by
total revenue.
Adjusted EBITDA is defined as EBITDA, as described above,
adjusted to exclude certain pension/OPEB expenses, restructuring
costs and other charges, stock-based compensation, and certain
other non-recurring items. Adjusted EBITDA margin is calculated by
dividing Adjusted EBITDA by total revenue.
Management uses EBITDA, EBITDA margin, Adjusted EBITDA and
Adjusted EBITDA margin to assist it in comparing performance from
period to period and as measures of operational performance.
Management believes that these non-GAAP measures provide useful
information for investors in evaluating Frontier’s operational
performance from period to period because they exclude depreciation
and amortization expenses related to investments made in prior
periods and are determined without regard to capital structure or
investment activities. By excluding capital expenditures, debt
repayments and dividends, among other factors, these non-GAAP
financial measures have certain shortcomings. Management
compensates for these shortcomings by utilizing these non-GAAP
financial measures in conjunction with the comparable GAAP
financial measures.
Management defines operating free cash flow as net cash provided
from operating activities less capital expenditures, less payments
on vendor financing related to capital expenditures. Management
uses operating free cash flow to assist it in comparing liquidity
from period to period and to obtain a more comprehensive view of
Frontier’s core operations and ability to generate cash flow.
Management believes that this non-GAAP measure is useful to
investors in evaluating cash available to service debt and pay
dividends. This non-GAAP financial measure has certain
shortcomings; it does not represent the residual cash flow
available for discretionary expenditures, as items such as debt
repayments are not deducted in determining such measure. Management
compensates for these shortcomings by utilizing this non-GAAP
financial measure in conjunction with the comparable GAAP financial
measure.
Adjusted operating expenses is defined as operating expenses
adjusted to exclude depreciation and amortization, restructuring
and other charges, certain pension/OPEB expenses, stock-based
compensation, and certain other non-recurring items. Investors have
indicated that this non-GAAP measure is useful in evaluating
Frontier’s performance.
Net leverage ratio is calculated as net debt (total debt less
cash and cash equivalents and short-term investments) divided by
Adjusted EBITDA for the most recent four quarters. Investors have
indicated that this non-GAAP measure is useful in evaluating
Frontier’s debt levels.
The information in this press release should be read in
conjunction with the financial statements and footnotes contained
in Frontier’s documents filed with the U.S. Securities and Exchange
Commission (the “SEC”).
Forward-Looking Statements
This release contains "forward-looking statements" related to
future events, including our 2024 outlook and guidance.
Forward-looking statements address our expectations or beliefs
concerning future events, including, without limitation, future
operating and financial performance, our ability to implement our
growth strategy our ability to comply with the covenants in the
agreements governing our indebtedness, our capital expenditures,
and other matters. These statements are made on the basis of
management’s views and assumptions, as of the time the statements
are made, regarding future events and performance and contain words
such as “expect,” “anticipate,” “intend,” “plan,” “believe,”
“seek,” “see,” “may,” “will,” “would,” or “target.” Forward-looking
statements by their nature address matters that are, to different
degrees, uncertain. A wide range of factors could materially affect
future developments and performance, including but not limited to:
our significant indebtedness, our ability to incur substantially
more debt in the future, and covenants in the agreements governing
our current indebtedness that may reduce our operating and
financial flexibility; declines in Adjusted EBITDA and revenue
relative to historical levels that we are unable to offset;
economic uncertainty, volatility in financial markets, and rising
interest rates could limit our ability to access capital or
increase the cost of capital needed to fund business operations,
including our fiber expansion plans; our ability to successfully
implement strategic initiatives, including our fiber buildout and
other initiatives to enhance revenue and realize productivity
improvements; our ability to secure necessary construction
resources, materials and permits for our fiber buildout initiative
in a timely and cost-effective manner; inflationary pressures on
costs, including tight labor markets, increased fuel and
electricity costs and potential disruptions in our supply chain,
which could adversely impact our financial condition or results of
operations and hinder our fiber expansion plans; our ability to
effectively manage our operations, operating expenses, capital
expenditures, debt service requirements and cash paid for income
taxes and liquidity; the impact of potential information technology
or data security breaches or other cyber-attacks or other
disruptions; the impact of laws and regulations relating to the
handling of privacy and data protection; competition from cable,
wireless carriers, satellite providers, wireline carriers, fiber
“overbuilders” and over the top companies, and the risk that we
will not respond on a timely or profitable basis; our ability to
successfully adjust to changes in the communications industry,
including the effects of technological changes and competition on
our capital expenditures, products and service offerings; our
ability to retain or attract new customers and to maintain
relationships with existing customers, including wholesale
customers; our reliance on a limited number of key supplies and
vendors; declines in revenue from our voice services, switched and
nonswitched access and video and data services that we cannot
stabilize or offset with increases in revenue from other products
and services; our ability to secure, continue to use or renew
intellectual property and other licenses used in our business; our
ability to hire or retain key personnel; our ability to dispose of
certain assets or asset groups or to make acquisition of certain
assets on terms that are attractive to us, or at all; the effects
of changes in the availability of federal and state universal
service funding or other subsidies to us and our competitors and
our ability to obtain future subsidies; our ability to comply with
the applicable CAF II and RDOF requirements and the risk of
penalties or obligations to return certain CAF II and RDOF funds;
our ability to defend against litigation or government
investigations and potentially unfavorable results from current
pending and future litigation or investigations; our ability to
comply with applicable federal and state consumer protection
requirements; the effects of governmental legislation and
regulation on our business, including costs, disruptions, possible
limitations on operating flexibility and changes to the competitive
landscape resulting from such legislation or regulation; the impact
of regulatory, investigative and legal proceedings and legal
compliance risks; our ability to effectively manage service quality
in the states in which we operate and meet mandated service quality
metrics or regulatory requirements; the effects of changes in
income tax rates, tax laws, regulations or rulings, or federal or
state tax assessments, including the risk that such changes may
benefit our competitors more than us, as well as potential future
decreases in the value of our deferred tax assets; the effects of
changes in accounting policies or practices; our ability to
successfully renegotiate union contracts; the effects of increased
medical expenses and pension and postemployment expenses; changes
in pension plan assumptions, interest rates, discount rates,
regulatory rules and/or the value of our pension plan assets; the
impact of adverse changes in economic, political and market
conditions in the areas that we serve, the U.S. and globally,
including but not limited to, disruption in our supply chain,
inflation in pricing for key materials or labor, or other adverse
changes resulting from epidemics, pandemics and outbreaks of
contagious diseases, natural disasters, economic or political
instability, terrorist attacks and wars, including the ongoing war
in Ukraine and the Israel-Hamas war, or other adverse widespread
developments; potential adverse impacts of climate change and
increasingly stringent environmental laws, rules and regulations,
and customer expectations and other environmental liabilities;
market overhang due to substantial common stock holdings by our
former creditors; certain provisions of Delaware law and our
certificate of incorporation that may prevent efforts by our
stockholders to change the direction or management of our company;
and certain other factors set forth in our other filings with the
SEC. This list of factors that may affect future performance and
the accuracy of forward-looking statements is illustrative and is
not intended to be exhaustive. You should consider these important
factors, as well as the risks and other factors contained in
Frontier’s filings with the SEC, including our most recent reports
on Form 10-K and Form 10-Q. These risks and uncertainties may cause
actual future results to be materially different than those
expressed in such forward-looking statements. We do not intend, nor
do we undertake any duty, to update any forward-looking
statements.
Frontier Communications
Parent, Inc.
Unaudited Financial
Data
For the
For the
For the
three months ended
three months ended
three months ended
June 30,
March 31,
June 30,
($ in millions and
shares in thousands, except per share amounts)
2024
2024
2023
Statements of Operations Data
Revenue
$
1,480
$
1,462
$
1,449
Operating expenses:
Cost of service
516
522
528
Selling, general, and administrative
expenses
449
428
428
Depreciation and amortization
398
388
354
Restructuring costs and other charges
26
34
24
Total operating expenses
1,389
1,372
1,334
Operating income
91
90
115
Investment and other income (loss),
net
(24
)
112
32
Interest expense
(199
)
(199
)
(149
)
Income (Loss) before income taxes
(132
)
3
(2
)
Income tax expense (benefit)
(9
)
2
-
Net income (loss)
$
(123
)
$
1
$
(2
)
Weighted average shares outstanding -
basic
248,754
246,301
245,474
Weighted average shares outstanding -
diluted
248,754
247,040
245,474
Basic net earnings (loss) per common
share
$
(0.49
)
$
0.00
$
(0.01
)
Diluted net earnings (loss) per common
share
$
(0.49
)
$
0.00
$
(0.01
)
Other Financial Data:
Capital expenditures
$
626
$
666
$
1,057
Frontier Communications
Parent, Inc.
Unaudited Financial
Data
For the
For the
six months ended
six months ended
June 30,
June 30,
($ in millions and
shares in thousands, except per share amounts)
2024
2023
Statements of Income Data
Revenue
$
2,942
$
2,889
Operating expenses:
Cost of service
1,038
1,070
Selling, general, and administrative
expenses
877
845
Depreciation and amortization
786
684
Restructuring costs and other charges
60
32
Total operating expenses
2,761
2,631
Operating income
181
258
Investment and other income, net
88
34
Interest expense
(398
)
(290
)
Income (Loss) before income taxes
(129
)
2
Income tax expense
(7
)
1
Net income (loss)
$
(122
)
$
1
Weighted average shares outstanding -
basic
247,382
245,285
Weighted average shares outstanding -
diluted
247,382
246,517
Basic net earnings (loss) per common
share
$
(0.49
)
$
0.00
Diluted net earnings (loss) per common
share
$
(0.49
)
$
0.00
Other Financial Data:
Capital expenditures
$
1,292
$
2,211
Frontier Communications
Parent, Inc.
Unaudited Financial
Data
For the quarter ended
June 30,
March 31,
June 30,
($ in
millions)
2024
2024
2023
Selected Statement of Income
Data
Revenue:
Data and Internet services
$
983
$
947
$
880
Voice services
312
321
347
Video services
88
94
112
Other
83
84
89
Revenue from contracts with customers
1,466
1,446
1,428
Subsidy and other revenue
14
16
21
Total revenue
$
1,480
$
1,462
$
1,449
Other Financial Data
Revenue:
Consumer
$
789
$
787
$
775
Business and wholesale
677
659
653
Revenue from contracts with customers
$
1,466
$
1,446
$
1,428
Fiber
$
840
$
805
$
746
Copper
626
641
682
Revenue from contracts with customers
$
1,466
$
1,446
$
1,428
For the six months
ended
For the six months
ended
June 30,
June 30,
($ in millions)
2024
2023
Selected Statement of Income
Data
Revenue:
Data and Internet services
$
1,930
$
1,742
Voice services
633
703
Video services
182
229
Other
167
172
Revenue from contracts with customers
2,912
2,846
Subsidy and other revenue
30
43
Total revenue
$
2,942
$
2,889
Other Financial Data
Revenue:
Consumer
$
1,576
$
1,536
Business and wholesale
1,336
1,310
Revenue from contracts with customers
$
2,912
$
2,846
Fiber
$
1,645
$
1,475
Copper
1,267
1,371
Revenue from contracts with customers
$
2,912
$
2,846
Frontier Communications
Parent, Inc.
Unaudited Operating
Data
As of and for the three months
ended
For the six months
ended
June 30, 2024
March 31, 2024
June 30, 2023
June 30, 2024
June 30, 2023
Broadband customer metrics (1)
Broadband customers (in thousands)
3,010
2,974
2,898
3,010
2,898
Net customer additions
36
31
4
67
30
Consumer customer metrics
Customers (in thousands)
3,154
3,140
3,127
3,154
3,127
Net customer additions
14
11
(13
)
25
(6
)
Average monthly consumer revenue per
customer
$
83.57
$
83.65
$
82.48
$
83.69
$
81.70
Customer monthly churn
1.65
%
1.47
%
1.53
%
1.56
%
1.48
%
Employees
12,960
13,227
14,099
12,960
14,099
(1) Amounts presented include related
metrics for our wholesale customers.
Frontier Communications
Parent, Inc.
Condensed Consolidated Balance
Sheet Data
(Unaudited)
($ in
millions)
June 30, 2024
December 31, 2023
ASSETS
Current assets:
Cash and cash equivalents
$
1,197
$
1,125
Short-term investments
-
1,075
Accounts receivable, net
434
446
Other current assets
124
135
Total current assets
1,755
2,781
Property, plant and equipment, net
14,703
13,933
Other assets
3,736
3,979
Total assets
$
20,194
$
20,693
LIABILITIES AND
EQUITY
Current liabilities:
Long-term debt due within one year
$
15
$
15
Accounts payable and other current
liabilities
2,004
2,260
Total current liabilities
2,019
2,275
Deferred income taxes and other
liabilities
1,804
1,893
Long-term debt
11,234
11,246
Equity
5,137
5,279
Total liabilities and equity
$
20,194
$
20,693
As of
June 30, 2024
Leverage
Ratio
Numerator:
Long-term debt due within one year
$
15
Long-term debt
11,234
Total debt
$
11,249
Less: Cash and cash equivalents
(1,197
)
Net debt
$
10,052
Denominator:
Adjusted EBITDA - last 4 quarters
$
2,182
Net Leverage Ratio
4.6x
Frontier Communications
Parent, Inc.
Unaudited Consolidated Cash
Flow Data
For the three months
ended
June 30, 2024
June 30, 2023
($ in
millions)
Cash flows provided from (used by)
operating activities:
Net loss
$
(123
)
$
(2
)
Adjustments to reconcile net loss to net
cash provided from (used by) operating activities:
Depreciation and amortization
398
354
Pension/OPEB special termination benefit
enhancements
3
-
Stock-based compensation
11
27
Amortization of premium
(5
)
(8
)
Bad debt expense
11
9
Other adjustments
3
1
Deferred income taxes
(10
)
-
Change in accounts receivable
1
(11
)
Change in long-term pension and other
postretirement liabilities
28
(44
)
Change in accounts payable and other
liabilities
49
(42
)
Change in prepaid expenses, income taxes,
and other assets
8
(8
)
Net cash provided from operating
activities
374
276
Cash flows provided from (used by)
investing activities:
Capital expenditures
(626
)
(1,057
)
Purchases of short-term investments
(1)
-
(350
)
Sale of short-term investments (1)
225
675
Proceeds from sale of asset
4
-
Other
4
4
Net cash used by investing
activities
(393
)
(728
)
Cash flows provided from (used by)
financing activities:
Long-term debt payments
(3
)
(4
)
Payments of vendor financing
(52
)
-
Finance lease obligation payments
(8
)
(7
)
Taxes paid on behalf of employees for
shares withheld
(6
)
(4
)
Other
(3
)
(3
)
Net cash used by financing
activities
(72
)
(18
)
Decrease in cash, cash equivalents, and
restricted cash
(91
)
(470
)
Cash, cash equivalents, and restricted
cash at the beginning of the period
1,337
1,132
Cash, cash equivalents, and restricted
cash at the end of the period
$
1,246
$
662
Supplemental cash flow
information:
Cash paid during the period
for:
Interest
$
263
$
231
Income tax payments (refunds), net
$
4
$
(4
)
(1) Amounts represent cash movement
to/from short-term investments. Given the long-term nature of the
fiber build, we have invested cash in short-term investments to
improve interest income while preserving funding flexibility.
Frontier Communications
Parent, Inc.
Unaudited Consolidated Cash
Flow Data
For the six months
ended
June 30, 2024
June 30, 2023
($ in
millions)
Cash flows provided from (used by)
operating activities:
Net income (loss)
$
(122
)
$
1
Adjustments to reconcile net loss to net
cash provided from (used by) operating activities:
Depreciation and amortization
786
684
Pension/OPEB special termination benefit
enhancements
10
-
Stock-based compensation
37
51
Amortization of premium
(10
)
(15
)
Bad debt expense
20
16
Other adjustments
7
2
Deferred income taxes
(10
)
-
Change in accounts receivable
(8
)
(9
)
Change in long-term pension and other
postretirement liabilities
(118
)
(51
)
Change in accounts payable and other
liabilities
76
(12
)
Change in prepaid expenses, income taxes,
and other assets
41
(2
)
Net cash provided from operating
activities
709
665
Cash flows provided from (used by)
investing activities:
Capital expenditures
(1,292
)
(2,211
)
Purchases of short-term investments
(1)
-
(575
)
Sale of short-term investments (1)
1,075
1,750
Proceeds on sale of assets
4
4
Other
6
-
Net cash used by investing
activities
(207
)
(1,032
)
Cash flows provided from (used by)
financing activities:
Long-term debt payments
(7
)
(8
)
Proceeds from long-term debt
borrowings
-
750
Payments of vendor financing
(415
)
-
Financing costs paid
-
(13
)
Finance lease obligation payments
(15
)
(12
)
Taxes paid on behalf of employees for
shares withheld
(49
)
(7
)
Other
(9
)
(3
)
Net cash provided from (used by)
financing activities
(495
)
707
Increase in cash, cash equivalents, and
restricted cash
7
340
Cash, cash equivalents, and restricted
cash at the beginning of the period
1,239
322
Cash, cash equivalents, and restricted
cash at the end of the period
$
1,246
$
662
Supplemental cash flow
information:
Cash paid during the period
for:
Interest
$
412
$
314
Income tax (refund) payments, net
$
(9
)
$
1
(1) Amounts represent cash movement
to/from short-term investments. Given the long-term nature of the
fiber build, we have invested cash in short-term investments to
improve interest income while preserving funding flexibility.
SCHEDULE A
Frontier Communications
Parent, Inc.
Unaudited Financial
Data
Reconciliation of Non-GAAP
Financial Measures
For the three months
ended
For the six months
ended
June 30,
March 31,
June 30,
June 30,
June 30,
($ in
millions)
2024
2024
2023
2024
2023
Net income (loss)
$
(123
)
$
1
$
(2
)
$
(122
)
$
1
Add back (subtract):
Income tax expense (benefit)
(9
)
2
-
(7
)
1
Interest expense
199
199
149
398
290
Investment and other (income) loss,
net
24
(112
)
(32
)
(88
)
(34
)
Operating income
91
90
115
181
258
Depreciation and amortization
398
388
354
786
684
EBITDA
$
489
$
478
$
469
$
967
$
942
Add back:
Pension/OPEB expense
$
9
$
9
$
11
$
18
$
22
Restructuring costs and other charges
26
34
24
60
32
Stock-based compensation
11
26
27
37
51
Storm-related costs
-
-
2
-
5
Legal settlement
25
-
-
25
-
Adjusted EBITDA
$
560
$
547
$
533
$
1,107
$
1,052
EBITDA margin
33.0
%
32.7
%
32.4
%
32.9
%
32.6
%
Adjusted EBITDA margin
37.8
%
37.4
%
36.8
%
37.6
%
36.4
%
Free Cash
Flow
Net cash provided from operating
activities
$
374
$
335
$
276
$
709
$
665
Capital expenditures
(626
)
(666
)
(1,057
)
(1,292
)
(2,211
)
Payment of vendor financing- capital
expenditures
(52
)
(363
)
-
(415
)
-
Operating free cash flow
$
(304
)
$
(694
)
$
(781
)
$
(998
)
$
(1,546
)
SCHEDULE B
Frontier Communications
Parent, Inc.
Unaudited Consolidated
Financial Data
Reconciliation of Non-GAAP
Financial Measures
For the three months
ended
For the six months
ended
June 30,
March 31,
June 30,
June 30,
June 30,
($ in
millions)
2024
2024
2023
2024
2023
Adjusted Operating
Expenses
Total operating expenses
$
1,389
$
1,372
$
1,334
$
2,761
$
2,631
Subtract:
Depreciation and amortization
398
388
354
786
684
Pension/OPEB expense
9
9
11
18
22
Restructuring costs and other charges
26
34
24
60
32
Stock-based compensation
11
26
27
37
51
Storm-related costs
-
-
2
-
5
Legal settlement
25
-
-
25
-
Adjusted operating expenses
$
920
$
915
$
916
$
1,835
$
1,837
SCHEDULE C
Frontier Communications
Parent, Inc.
Selected Financial and
Operating Data (1)
(Unaudited)
As of or for the quarter
ended
For the six months
ended
June 30, 2024
March 31, 2024
June 30, 2023
June 30, 2024
June 30, 2023
Broadband Revenue
($ in millions)
Total Company
Fiber
$
432
$
414
$
356
$
846
$
690
Copper
151
155
173
306
346
Total
$
583
$
569
$
529
$
1,152
$
1,036
Estimated Fiber
Passings (in millions)
Base Fiber Passings
3.2
3.2
3.2
Total Fiber Passings
7.2
6.8
5.8
Estimated
Broadband Fiber % Penetration
Base Fiber Penetration
45.3
%
44.9
%
43.4
%
Total Fiber Penetration
30.4
%
30.7
%
31.6
%
Broadband
Customers, end of period (in thousands)
Consumer
Fiber
2,053
1,963
1,722
Copper
721
771
928
Total
2,774
2,734
2,650
Business + Wholesale (2)
Fiber
134
132
122
Copper
102
108
126
Total
236
240
248
Broadband Net
Adds (in thousands)
Consumer
Fiber
90
85
63
Copper
(50
)
(51
)
(59
)
Total
40
34
4
Business + Wholesale (2)
Fiber
2
3
4
Copper
(6
)
(6
)
(4
)
Total
(4
)
(3
)
-
Broadband
Churn
Consumer
Fiber
1.40
%
1.24
%
1.41
%
1.32
%
1.30
%
Copper
2.02
%
1.93
%
1.84
%
1.98
%
1.78
%
Total
1.57
%
1.45
%
1.57
%
1.51
%
1.48
%
Business + Wholesale (2)
Fiber
1.31
%
1.32
%
1.29
%
1.32
%
1.36
%
Copper
1.99
%
2.01
%
1.69
%
2.00
%
1.78
%
Total
1.61
%
1.64
%
1.50
%
1.63
%
1.58
%
Broadband
ARPU
Consumer
Fiber
$
65.32
$
65.18
$
63.12
$
65.39
$
62.31
Copper
58.26
56.16
51.90
57.20
50.39
Total
$
63.41
$
62.53
$
59.06
$
63.06
$
57.84
Business + Wholesale (2)
Fiber
$
97.83
$
98.40
$
100.30
$
98.09
$
101.19
Copper
63.83
60.81
61.26
62.38
60.90
Total
$
85.57
$
81.07
$
80.20
$
81.98
$
80.01
(1) Certain operational metrics, including
passings, penetration, Base Fiber penetration, ARPU and churn are
defined in the accompanying Trending Schedule available at
Frontier's website https://investor.frontier.com.
(2) Business + Wholesale customers include
our small, medium business, larger enterprise (SME) customers and
wholesale subscribers.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20240802674786/en/
Investor Contact
Spencer Kurn SVP, Investor Relations +1 401-225-0475
spencer.kurn@ftr.com
Media Contact
Chrissy Murray VP, Corporate Communications +1 504-952-4225
chrissy.murray@ftr.com
Frontier Communications ... (NASDAQ:FYBR)
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