|
|
|
(Commission File Number)
|
(IRS Employer Identification No.)
|
|
|
|
|
(Address of principal executive offices)
|
(Zip Code)
|
Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
|
Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
|
Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
|
Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
|
Item 2.02 |
Results of Operations and Financial Condition
|
Item 9.01 |
Financial Statements and Exhibits
|
(d) |
Exhibits
|
Exhibit
Number
|
Description
|
|
Press Release
|
||
Presentation Regarding First Quarter 2021 Financial Results
|
||
104
|
Cover Page Interactive Data File (embedded within the Inline XBRL document)
|
FRONTIER COMMUNICATIONS CORPORATION
|
||
Date: April 30, 2021
|
By:
|
/s/ Mark D. Nielsen
|
Mark D. Nielsen
|
||
Executive Vice President, Chief Legal Officer and Chief Transaction Officer
|
• |
Net income of $60 million
|
• |
Revenue of $1.68 billion, down 6.3% year-over-year, and Adjusted EBITDA of $670 million, down 2.3% year-over-year1, in line with expectations
|
• |
Expects to extend fiber network to 495,000 locations in 2021, with approximately 100,000 locations completed in the first quarter
|
• |
Expects to emerge today from Chapter 11 restructuring, reducing debt by approximately $11 billion and annual interest expense by approximately $1 billion
|
• |
Liquidity of over $1.3 billion at emergence, creating flexibility to reinvest in fiber network expansion
|
• |
Incoming Executive Chairman John Stratton, President and CEO Nick Jeffery, and CFO Sheldon Bruha to host presentation regarding first quarter results and path forward today at 10:00 AM ET
|
• |
Investor Day announced for August 2021
|
• |
Consumer revenue was $844 million, down $50 million, or 5.6%, against prior year as fiber broadband growth was offset by video and voice subscriber losses.
|
• |
Consumer customer churn was 1.45%, a strong improvement from 1.84% in the prior year.
|
• |
Video revenue was impacted by subscriber losses, as video subscribers (excluding DISH) decreased by 141,000, or approximately 24% as the video bundle was deemphasized.
|
• |
Fiber broadband ARPU increased $4 year-over-year from a higher speed mix, as well as price increases on new and existing accounts.
|
• |
Commercial revenue was $749 million, a $61 million decline, or approximately 7.5%, against prior year, driven by voice declines in our retail portion.
|
• |
The wholesale portion of Commercial also declined reflecting proactive strategic repositioning with key business partners to reset pricing in exchange for higher win shares in the future and higher overall expected cash flow stability.
|
• |
Issuing $750 million of takeback second lien debt to existing noteholders concurrent with today’s expected emergence as contemplated by the Plan of Reorganization, with a coupon of 5.875%;
|
• |
Repricing the $1.25 billion Term Loan facility and reducing the interest rate by 125bps, resulting in approximately $16 million in annual interest savings;
|
• |
Raising an incremental $225 million of First Lien Term Loan expected to close concurrent with emergence; and
|
• |
At emergence, the company is expected to have total liquidity3 of approximately $1.3B and an expected net debt to Adjusted EBITDA ratio of approximately of 2.2x.
|
• |
Concurrent with emergence, Frontier will issue approximately 244 million shares of new common stock to its senior unsecured noteholders. Together with the 6% of shares reserved under the Management
Incentive Plan (MIP), there will be approximately 260 million shares outstanding.
|
• |
Frontier expects the new common stock to begin trading on the NASDAQ on May 4, 2021 under the ticker FYBR.
|
• |
The pre-emergence common stock (trading under OTC: FTRCQ) will be extinguished and will not receive any new equity or other considerations, as provided in the Plan of Reorganization.
|
• |
Adjusted EBITDA of $2.4-$2.5 billion4
|
o |
Decrease from $2.8 billion in 2020 (adjusted for the sale of the Northwest operations), driven by strategic repositioning within Wholesale, secular declines of voice and copper broadband, and higher fiber
broadband customer acquisition costs, partially offset by growth in fiber broadband revenue
|
• |
Cash taxes of approximately $50 million
|
• |
Cash interest payments of approximately $365 million
|
• |
Cash pension and OPEB of approximately $120 million (net of capitalization)
|
• |
Cash capital expenditures of approximately $1.5 billion
|
o |
Increase versus $1.2 billion in 2020 (not adjusted for Disposal of Northwest Operations) primarily driven by fiber expansion efforts accelerating during the year
|
• |
Fiber build to 495,000 locations in 2021
|
o |
Incremental cash cost to build estimated at approximately $550 per location
|
o |
Level of the 2021 fiber build continues to be evaluated by new executive management
|
INVESTOR CONTACT:
|
MEDIA CONTACT:
|
Jacob Noyes
|
Javier Mendoz
|
Manager,
|
Vice President,
|
Treasury & Investor Relations
|
Corporate Communications & External Affairs
|
(203) 614-5074
|
(562) 305-2345
|
ir@ftr.com
|
javier.mendoza@ftr.com
|
For the quarter ended
|
||||||||||||
($ in millions and shares in thousands, except per share amounts)
|
March 31, 2021
|
December 31, 2020
|
March 31, 2020
|
|||||||||
Statement of Operations Data
|
||||||||||||
Revenue
|
$
|
1,676
|
$
|
1,695
|
$
|
1,933
|
||||||
Operating expenses:
|
||||||||||||
Network access expenses
|
198
|
208
|
286
|
|||||||||
Network related expenses
|
422
|
421
|
444
|
|||||||||
Selling, general and administrative expenses
|
408
|
393
|
444
|
|||||||||
Depreciation and amortization
|
387
|
394
|
415
|
|||||||||
Loss on disposal of Northwest Operations
|
-
|
2
|
24
|
|||||||||
Restructuring costs and other charges
|
2
|
-
|
48
|
|||||||||
Total operating expenses
|
1,417
|
1,418
|
1,661
|
|||||||||
Operating income
|
259
|
277
|
272
|
|||||||||
|
||||||||||||
Investment and other income (loss), net
|
2
|
(14
|
)
|
5
|
||||||||
Pension settlement costs
|
-
|
-
|
(103
|
)
|
||||||||
Loss on early extinguishment of debt
|
-
|
(72
|
)
|
-
|
||||||||
Reorganization items, net
|
(25
|
)
|
(136
|
)
|
-
|
|||||||
Interest expense (contractual interest for the three months ended was $338 million)
|
(89
|
)
|
(98
|
)
|
(383
|
)
|
||||||
Income (loss) before income taxes
|
147
|
(43
|
)
|
(209
|
)
|
|||||||
Income tax expense (benefit)
|
87
|
7
|
(23
|
)
|
||||||||
Net income (loss)
|
60
|
(50
|
)
|
(186
|
)
|
|||||||
Weighted average shares outstanding - basic
|
104,556
|
104,489
|
104,363
|
|||||||||
Weighted average shares outstanding - diluted
|
104,896
|
104,489
|
104,363
|
|||||||||
Basic and diluted net earnings (loss) per common share
|
$
|
0.57
|
$
|
(0.48
|
)
|
$
|
(1.78
|
)
|
||||
Other Financial Data:
|
||||||||||||
Capital expenditures
|
$
|
384
|
$
|
356
|
$
|
286
|
For the quarter ended
|
||||||||||||
($ in millions)
|
March 31, 2021
|
December 31, 2020
|
March 31, 2020
|
|||||||||
Selected Statement of Operations Data
|
||||||||||||
Revenue:
|
||||||||||||
Data and Internet services
|
$
|
842
|
$
|
834
|
$
|
855
|
||||||
Voice services
|
487
|
490
|
529
|
|||||||||
Video services
|
169
|
181
|
212
|
|||||||||
Other
|
95
|
101
|
108
|
|||||||||
Revenue from contracts with customers
|
1,593
|
1,606
|
1,704
|
|||||||||
Subsidy and other revenue
|
83
|
89
|
84
|
|||||||||
Total revenue
|
$
|
1,676
|
$
|
1,695
|
$
|
1,788
|
||||||
Other Financial Data
|
||||||||||||
Revenue:
|
||||||||||||
Consumer
|
$
|
844
|
$
|
857
|
$
|
894
|
||||||
Commercial
|
749
|
749
|
810
|
|||||||||
Revenue from contracts with customers
|
1,593
|
1,606
|
1,704
|
|||||||||
Subsidy and other revenue
|
83
|
89
|
84
|
|||||||||
Total revenue
|
$
|
1,676
|
$
|
1,695
|
$
|
1,788
|
For the quarter ended
|
||||||||||||
March 31, 2021
|
December 31, 2020
|
March 31, 2020
|
||||||||||
Consumer customer metrics
|
||||||||||||
Customers (in thousands)
|
3,234
|
3,264
|
3,373
|
|||||||||
Net customer additions (losses)
|
(30
|
)
|
(42
|
)
|
(39
|
)
|
||||||
Average monthly consumer revenue per customer
|
$
|
86.60
|
$
|
87.00
|
$
|
87.88
|
||||||
Customer monthly churn
|
1.45
|
%
|
1.67
|
%
|
1.84
|
%
|
||||||
Broadband subscriber metrics
|
||||||||||||
Broadband subscribers (in thousands)
|
3,052
|
3,069
|
3,183
|
|||||||||
Net subscriber additions (losses)
|
(17
|
)
|
(49
|
)
|
(28
|
)
|
||||||
Video (excl. DISH) subscriber metrics
|
||||||||||||
Video subscribers (in thousands)
|
453
|
485
|
594
|
|||||||||
Net subscriber additions (losses)
|
(32
|
)
|
(33
|
)
|
(37
|
)
|
||||||
DISH subscriber metrics
|
||||||||||||
DISH subscribers (in thousands)
|
129
|
134
|
149
|
|||||||||
Net subscriber additions (losses)
|
(5
|
)
|
(5
|
)
|
(7
|
)
|
||||||
Employees
|
16,201
|
16,200
|
16,487
|
(Unaudited)
|
||||||||
($ in millions)
|
March 31, 2021
|
December 31, 2020
|
||||||
ASSETS
|
||||||||
Current assets:
|
||||||||
Cash and cash equivalents (1)
|
$
|
2,107
|
$
|
1,829
|
||||
Accounts receivable, net
|
519
|
553
|
||||||
Other current assets
|
221
|
272
|
||||||
Total current assets
|
2,847
|
2,654
|
||||||
Property, plant and equipment, net
|
12,987
|
12,931
|
||||||
Other assets
|
1,126
|
1,210
|
||||||
Total assets
|
$
|
16,960
|
$
|
16,795
|
||||
LIABILITIES AND EQUITY (DEFICIT)
|
||||||||
Current liabilities:
|
||||||||
Long-term debt due within one year
|
$
|
5,782
|
$
|
5,781
|
||||
Accounts payable and other current liabilities
|
1,369
|
1,359
|
||||||
Total current liabilities
|
7,151
|
7,140
|
||||||
Deferred income taxes and other liabilities
|
3,069
|
2,990
|
||||||
Liabilities subject to compromise
|
11,570
|
11,565
|
||||||
Equity (deficit)
|
(4,830
|
)
|
(4,900
|
)
|
||||
Total liabilities and equity (deficit)
|
$
|
16,960
|
$
|
16,795
|
For the three months ended
|
||||||||
($ in millions)
|
March 31, 2021
|
March 31, 2020
|
||||||
Cash flows provided from (used by) operating activities:
|
||||||||
Net income (loss)
|
$
|
60
|
$
|
(186
|
)
|
|||
Adjustments to reconcile net loss to net cash provided from (used by) operating activities:
|
||||||||
Depreciation and amortization
|
387
|
415
|
||||||
Pension settlement costs
|
-
|
103
|
||||||
Stock-based compensation
|
(1
|
)
|
1
|
|||||
Amortization of deferred financing costs
|
-
|
8
|
||||||
Other adjustments
|
1
|
1
|
||||||
Deferred income taxes
|
84
|
(30
|
)
|
|||||
Loss on disposal of Northwest Operations
|
-
|
24
|
||||||
Change in accounts receivable
|
34
|
29
|
||||||
Change in accounts payable and other liabilities
|
48
|
110
|
||||||
Change in prepaid expenses, income taxes, and other assets
|
52
|
2
|
||||||
Net cash provided from operating activities
|
665
|
477
|
||||||
Cash flows provided from (used by) investing activities:
|
||||||||
Capital expenditures
|
(384
|
)
|
(286
|
)
|
||||
Proceeds on sale of assets
|
2
|
2
|
||||||
Other
|
2
|
2
|
||||||
Net cash used by investing activities
|
(380
|
)
|
(282
|
)
|
||||
Cash flows used by financing activities:
|
||||||||
Long-term debt payments
|
-
|
(5
|
)
|
|||||
Finance lease obligation payments
|
(5
|
)
|
(8
|
)
|
||||
Other
|
(2
|
)
|
-
|
|||||
Net cash used by financing activities
|
(7
|
)
|
(13
|
)
|
||||
Increase in cash, cash equivalents, and restricted cash
|
278
|
182
|
||||||
Cash, cash equivalents, and restricted cash at January 1,
|
1,887
|
809
|
||||||
Cash, cash equivalents, and restricted cash at March 31,
|
$
|
2,165
|
$
|
991
|
||||
Supplemental cash flow information:
|
||||||||
Cash paid during the period for:
|
||||||||
Interest
|
$
|
40
|
$
|
163
|
||||
Income tax payments, net
|
$
|
-
|
$
|
1
|
||||
Reorganization items, net
|
$
|
56
|
$
|
-
|
For the quarter ended
|
||||||||||||
($ in millions)
|
March 31, 2021
|
December 31, 2020
|
March 31, 2020
|
|||||||||
Net income (loss)
|
$
|
60
|
$
|
(50
|
)
|
$
|
(283
|
)
|
||||
Add back (subtract):
|
||||||||||||
Income tax expense (benefit)
|
87
|
7
|
(23
|
)
|
||||||||
Interest expense
|
89
|
98
|
383
|
|||||||||
Investment and other (income) loss, net
|
(2
|
)
|
14
|
(5
|
)
|
|||||||
Pension settlement costs
|
-
|
-
|
103
|
|||||||||
Loss on extinguishment of debt
|
-
|
72
|
-
|
|||||||||
Reorganization items, net
|
25
|
136
|
-
|
|||||||||
Operating income
|
259
|
277
|
175
|
|||||||||
Depreciation and amortization
|
387
|
394
|
415
|
|||||||||
EBITDA
|
$
|
646
|
$
|
671
|
$
|
590
|
||||||
Add back:
|
||||||||||||
Pension/OPEB expense
|
23
|
20
|
23
|
|||||||||
Restructuring costs and other charges
|
2
|
-
|
48
|
|||||||||
Stock-based compensation
|
(1
|
)
|
-
|
1
|
||||||||
Loss on disposal of Northwest Operations
|
-
|
2
|
24
|
|||||||||
Adjusted EBITDA
|
$
|
670
|
$
|
693
|
$
|
686
|
||||||
EBITDA margin
|
38.5
|
%
|
39.6
|
%
|
33.0
|
%
|
||||||
Adjusted EBITDA margin
|
40.0
|
%
|
40.9
|
%
|
38.4
|
%
|
For the quarter ended
|
||||||||||||||||||||||||
March 31, 2021
|
December 31, 2020
|
March 31, 2020
|
||||||||||||||||||||||
($ in millions,
except per share amounts)
|
Net Income
(Loss)
|
Basic
Earnings
(Loss) Per
Share
|
Net Income
(Loss)
|
Basic
Earnings
(Loss) Per
Share
|
Net Income
(Loss)
|
Basic
Earnings
(Loss) Per
Share
|
||||||||||||||||||
Net income (loss) attributable to Frontier common shareholders
|
$
|
60
|
$
|
0.57
|
$
|
(50
|
)
|
$
|
(0.48
|
)
|
$
|
(186
|
)
|
$
|
(1.78
|
)
|
||||||||
Restructuring costs and other charges
|
2
|
-
|
48
|
|||||||||||||||||||||
Pension settlement costs
|
-
|
-
|
103
|
|||||||||||||||||||||
Reorganization items, net
|
25
|
136
|
-
|
|||||||||||||||||||||
Loss on extinguishment of debt
|
-
|
72
|
-
|
|||||||||||||||||||||
Loss on disposal of Northwest Operations
|
-
|
2
|
24
|
|||||||||||||||||||||
Certain other tax items (1)
|
41
|
51
|
13
|
|||||||||||||||||||||
Income tax effect on above items:
|
||||||||||||||||||||||||
Restructuring costs and other charges
|
(1
|
)
|
-
|
(10
|
)
|
|||||||||||||||||||
Pension settlement costs
|
-
|
-
|
(25
|
)
|
||||||||||||||||||||
Reorganization items, net
|
(7
|
)
|
(2
|
)
|
-
|
|||||||||||||||||||
Loss on extinguishment of debt
|
-
|
(31
|
)
|
-
|
||||||||||||||||||||
Loss on disposal of business
|
-
|
(8
|
)
|
-
|
||||||||||||||||||||
$
|
60
|
$
|
0.57
|
$
|
220
|
$
|
2.11
|
$
|
153
|
$
|
1.47
|
|||||||||||||
Adjusted net income (loss) attributable to
Frontier common shareholders(2)
|
$
|
120
|
$
|
1.15
|
$
|
170
|
$
|
1.63
|
$
|
(33
|
)
|
$
|
(0.32
|
)
|
For the quarter ended
|
||||||||||||
($ in millions)
|
March 31, 2021
|
December 31, 2020
|
March 31, 2020
|
|||||||||
Adjusted Operating Expenses
|
||||||||||||
Total operating expenses
|
$
|
1,417
|
$
|
1,418
|
$
|
1,613
|
||||||
Subtract:
|
||||||||||||
Depreciation and amortization
|
387
|
394
|
415
|
|||||||||
Loss on disposal of Northwest Operations
|
-
|
2
|
24
|
|||||||||
Pension/OPEB expense
|
23
|
20
|
23
|
|||||||||
Restructuring costs and other charges
|
2
|
-
|
48
|
|||||||||
Stock-based compensation
|
(1
|
)
|
-
|
1
|
||||||||
Adjusted operating expenses
|
$
|
1,006
|
$
|
1,002
|
$
|
1,102
|
For the quarter ended
|
||||||||||||||||||||
March 31, 2021
|
December 31, 2020
|
March 31, 2020
|
||||||||||||||||||
Consolidated
|
Consolidated
|
Consolidated
|
Northwest
|
Remaining
|
||||||||||||||||
($ in millions)
|
Frontier
|
Frontier
|
Frontier
|
Ops (1)
|
Properties
|
|||||||||||||||
Data and Internet services
|
$
|
842
|
$
|
834
|
$
|
932
|
$
|
77
|
$
|
855
|
||||||||||
Voice services
|
487
|
490
|
572
|
43
|
529
|
|||||||||||||||
Video services
|
169
|
181
|
222
|
10
|
212
|
|||||||||||||||
Other
|
95
|
101
|
117
|
9
|
108
|
|||||||||||||||
Revenue from contracts with customers
|
1,593
|
1,606
|
1,843
|
139
|
1,704
|
|||||||||||||||
Subsidy revenue
|
83
|
89
|
90
|
6
|
84
|
|||||||||||||||
Revenue
|
1,676
|
1,695
|
1,933
|
145
|
1,788
|
|||||||||||||||
Operating expenses (2):
|
||||||||||||||||||||
Network access expenses
|
198
|
208
|
286
|
10
|
276
|
|||||||||||||||
Network related expenses
|
422
|
421
|
444
|
19
|
425
|
|||||||||||||||
Selling, general and administrative expenses
|
408
|
393
|
444
|
19
|
425
|
|||||||||||||||
Depreciation and amortization
|
387
|
394
|
415
|
-
|
415
|
|||||||||||||||
Loss on disposal of Northwest Operations
|
-
|
2
|
24
|
-
|
24
|
|||||||||||||||
Restructuring costs and other charges
|
2
|
-
|
48
|
-
|
48
|
|||||||||||||||
Total operating expenses
|
1,417
|
1,418
|
1,661
|
48
|
1,613
|
|||||||||||||||
Operating income
|
259
|
277
|
272
|
97
|
175
|
|||||||||||||||
Consumer
|
$
|
844
|
$
|
857
|
$
|
971
|
$
|
77
|
$
|
894
|
||||||||||
Commercial
|
749
|
749
|
872
|
62
|
810
|
|||||||||||||||
Revenue from contracts with customers
|
1,593
|
1,606
|
1,843
|
139
|
1,704
|
|||||||||||||||
Subsidy revenue
|
83
|
89
|
90
|
6
|
84
|
|||||||||||||||
Total revenue
|
$
|
1,676
|
$
|
1,695
|
$
|
1,933
|
$
|
145
|
$
|
1,788
|
For the quarter ended
|
||||||||||||||||||||
March 31, 2021
|
December 31, 2020
|
March 31, 2020
|
||||||||||||||||||
Consolidated
|
Consolidated
|
Consolidated
|
Northwest
|
Remaining
|
||||||||||||||||
Frontier
|
Frontier
|
Frontier
|
Ops
|
Properties
|
||||||||||||||||
Customers (in thousands)
|
3,553
|
3,571
|
4,063
|
N/A
|
N/A
|
|||||||||||||||
Consumer customer metrics
|
||||||||||||||||||||
Customers (in thousands)
|
3,234
|
3,264
|
3,703
|
330
|
3,373
|
|||||||||||||||
Net customer additions (losses)
|
(30
|
)
|
(42
|
)
|
(44
|
)
|
(5
|
)
|
(39
|
)
|
||||||||||
Average monthly consumer revenue per customer
|
$
|
86.60
|
$
|
87.00
|
$
|
86.93
|
$
|
77.22
|
$
|
87.88
|
||||||||||
Customer monthly churn
|
1.45
|
%
|
1.67
|
%
|
1.81
|
%
|
1.52
|
%
|
1.84
|
%
|
||||||||||
Commercial customer metrics
|
||||||||||||||||||||
Customers (in thousands)
|
319
|
307
|
360
|
N/A
|
N/A
|
|||||||||||||||
Broadband subscriber metrics
|
||||||||||||||||||||
Broadband subscribers (in thousands)
|
3,052
|
3,069
|
3,480
|
297
|
3,183
|
|||||||||||||||
Net subscriber additions (losses)
|
(17
|
)
|
(49
|
)
|
(33
|
)
|
(5
|
)
|
(28
|
)
|
||||||||||
Video (excl. DISH) subscriber metrics
|
||||||||||||||||||||
Video subscribers (in thousands)
|
453
|
485
|
621
|
27
|
594
|
|||||||||||||||
Net subscriber additions (losses)
|
(32
|
)
|
(33
|
)
|
(39
|
)
|
(2
|
)
|
(37
|
)
|
||||||||||
DISH subscriber metrics
|
||||||||||||||||||||
DISH subscribers (in thousands)
|
129
|
134
|
165
|
16
|
149
|
|||||||||||||||
Net subscriber additions (losses)
|
(5
|
)
|
(5
|
)
|
(8
|
)
|
(1
|
)
|
(7
|
)
|
||||||||||
Employees
|
16,201
|
16,200
|
17,437
|
950
|
16,487
|
For the quarter ended
|
||||||||||||||||||||
March 31, 2021
|
December 31, 2020
|
March 31, 2020
|
||||||||||||||||||
Consolidated
|
Consolidated
|
Consolidated
|
Northwest
|
Remaining
|
||||||||||||||||
($ in millions)
|
Frontier
|
Frontier
|
Frontier
|
Ops (1)
|
Properties
|
|||||||||||||||
Net income (loss)
|
$
|
60
|
$
|
(50
|
)
|
$
|
(186
|
)
|
$
|
97
|
$
|
(283
|
)
|
|||||||
Add back (subtract):
|
||||||||||||||||||||
Income tax benefit
|
87
|
7
|
(23
|
)
|
-
|
(23
|
)
|
|||||||||||||
Interest expense
|
89
|
98
|
383
|
-
|
383
|
|||||||||||||||
Investment and other loss (income), net
|
(2
|
)
|
14
|
(5
|
)
|
-
|
(5
|
)
|
||||||||||||
Pension settlement costs
|
-
|
-
|
103
|
-
|
103
|
|||||||||||||||
Loss on extinguishment of debt
|
-
|
72
|
-
|
-
|
-
|
|||||||||||||||
Reorganization items, net
|
25
|
136
|
-
|
-
|
-
|
|||||||||||||||
Operating income
|
259
|
277
|
272
|
97
|
175
|
|||||||||||||||
Depreciation and amortization
|
387
|
394
|
415
|
-
|
415
|
|||||||||||||||
EBITDA
|
646
|
671
|
687
|
97
|
590
|
|||||||||||||||
Add back:
|
||||||||||||||||||||
Pension/OPEB expense
|
23
|
20
|
23
|
-
|
23
|
|||||||||||||||
Restructuring costs and other charges
|
2
|
-
|
48
|
-
|
48
|
|||||||||||||||
Stock-based compensation
|
(1
|
)
|
-
|
1
|
-
|
1
|
||||||||||||||
Loss on disposal of Northwest Operations
|
-
|
2
|
24
|
-
|
24
|
|||||||||||||||
Adjusted EBITDA
|
$
|
670
|
$
|
693
|
$
|
783
|
$
|
97
|
$
|
686
|
||||||||||
EBITDA margin
|
38.5
|
%
|
39.6
|
%
|
35.6
|
%
|
66.9
|
%
|
33.0
|
%
|
||||||||||
Adjusted EBITDA margin
|
40.0
|
%
|
40.9
|
%
|
40.5
|
%
|
66.9
|
%
|
38.4
|
%
|
||||||||||
Free Cash Flow
|
||||||||||||||||||||
Net cash provided from operating activities
|
$
|
665
|
$
|
497
|
$
|
477
|
N/A
|
N/A
|
||||||||||||
Capital expenditures
|
(384
|
)
|
(356
|
)
|
(286
|
)
|
N/A
|
N/A
|
||||||||||||
Operating free cash flow
|
$
|
281
|
$
|
141
|
$
|
191
|
N/A
|
N/A
|
For the quarter ended
|
||||||||||||||||||||
March 31, 2021
|
December 31, 2020
|
March 31, 2020
|
||||||||||||||||||
Consolidated
|
Consolidated
|
Consolidated
|
Northwest
|
Remaining
|
||||||||||||||||
($ in millions)
|
Frontier
|
Frontier
|
Frontier
|
Ops (1)
|
Properties
|
|||||||||||||||
Adjusted Operating Expenses
|
||||||||||||||||||||
Total operating expenses (2)
|
$
|
1,417
|
$
|
1,418
|
$
|
1,661
|
$
|
48
|
$
|
1,613
|
||||||||||
Subtract:
|
||||||||||||||||||||
Depreciation and amortization
|
387
|
394
|
415
|
-
|
415
|
|||||||||||||||
Loss on disposal of Northwest Operations
|
-
|
2
|
24
|
-
|
24
|
|||||||||||||||
Pension/OPEB expense
|
23
|
20
|
23
|
-
|
23
|
|||||||||||||||
Restructuring costs and other charges
|
2
|
-
|
48
|
-
|
48
|
|||||||||||||||
Stock-based compensation
|
(1
|
)
|
-
|
1
|
-
|
1
|
||||||||||||||
Adjusted operating expenses
|
$
|
1,006
|
$
|
1,002
|
$
|
1,150
|
$
|
48
|
$
|
1,102
|
|
|
As of or for the Quarter Ended
|
|||||||||||||||||||||||||||||||||||
|
|
03/31/19
|
06/30/19
|
09/30/19
|
12/30/19
|
03/31/20
|
06/30/20
|
09/30/20
|
12/31/20
|
03/31/21
|
|||||||||||||||||||||||||||
Estimated Fiber Passings (in millions)
|
|||||||||||||||||||||||||||||||||||||
Base Fiber Passings
|
N/A
|
N/A
|
N/A
|
N/A
|
3.2
|
3.2
|
3.2
|
3.2
|
3.2
|
||||||||||||||||||||||||||||
Total Fiber Passings
|
N/A
|
N/A
|
N/A
|
N/A
|
3.2
|
3.2
|
3.2
|
3.3
|
3.4
|
||||||||||||||||||||||||||||
|
|
||||||||||||||||||||||||||||||||||||
Estimated Broadband Fiber % Penetration
|
|||||||||||||||||||||||||||||||||||||
Base Fiber Penetration
|
N/A
|
N/A
|
N/A
|
N/A
|
40.9
|
%
|
41.1
|
%
|
41.2
|
%
|
41.4
|
%
|
41.5
|
%
|
|||||||||||||||||||||||
Total Fiber Penetration
|
N/A
|
N/A
|
N/A
|
N/A
|
41.0
|
%
|
41.1
|
%
|
41.2
|
%
|
40.7
|
%
|
39.9
|
%
|
|||||||||||||||||||||||
|
|
||||||||||||||||||||||||||||||||||||
Broadband Customers, end of period (in thousands)
|
|||||||||||||||||||||||||||||||||||||
Consumer
|
Fiber
|
1,195
|
1,186
|
1,186
|
1,190
|
1,200
|
1,207
|
1,214
|
1,223
|
1,234
|
|||||||||||||||||||||||||||
Copper
|
1,565
|
1,523
|
1,474
|
1,441
|
1,418
|
1,401
|
1,380
|
1,348
|
1,326
|
||||||||||||||||||||||||||||
Total
|
2,760
|
2,709
|
2,660
|
2,631
|
2,618
|
2,608
|
2,594
|
2,571
|
2,560
|
||||||||||||||||||||||||||||
|
|
||||||||||||||||||||||||||||||||||||
Business (1)
|
Fiber
|
117
|
117
|
117
|
118
|
118
|
116
|
117
|
117
|
120
|
|||||||||||||||||||||||||||
Copper
|
198
|
192
|
185
|
179
|
171
|
166
|
160
|
154
|
149
|
||||||||||||||||||||||||||||
Total
|
315
|
309
|
302
|
297
|
289
|
282
|
277
|
271
|
269
|
||||||||||||||||||||||||||||
|
|
||||||||||||||||||||||||||||||||||||
Broadband Net Adds (in thousands)
|
|||||||||||||||||||||||||||||||||||||
Consumer
|
Fiber
|
(7
|
)
|
(9
|
)
|
-
|
4
|
10
|
7
|
7
|
9
|
11
|
|||||||||||||||||||||||||
Copper
|
(19
|
)
|
(42
|
)
|
(49
|
)
|
(33
|
)
|
(23
|
)
|
(17
|
)
|
(21
|
)
|
(31
|
)
|
(22
|
)
|
|||||||||||||||||||
Total
|
(26
|
)
|
(51
|
)
|
(49
|
)
|
(29
|
)
|
(13
|
)
|
(10
|
)
|
(14
|
)
|
(22
|
)
|
(11
|
)
|
|||||||||||||||||||
|
|
||||||||||||||||||||||||||||||||||||
Business (1)
|
Fiber
|
-
|
-
|
-
|
1
|
-
|
(2
|
)
|
1
|
-
|
3
|
||||||||||||||||||||||||||
Copper
|
(7
|
)
|
(6
|
)
|
(7
|
)
|
(6
|
)
|
(8
|
)
|
(5
|
)
|
(6
|
)
|
(6
|
)
|
(5
|
)
|
|||||||||||||||||||
Total
|
(7
|
)
|
(6
|
)
|
(7
|
)
|
(5
|
)
|
(8
|
)
|
(7
|
)
|
(5
|
)
|
(6
|
)
|
(2
|
)
|
|||||||||||||||||||
|
|
||||||||||||||||||||||||||||||||||||
Broadband Churn
|
|||||||||||||||||||||||||||||||||||||
Consumer
|
Fiber
|
2.75
|
%
|
2.81
|
%
|
2.69
|
%
|
2.24
|
%
|
1.97
|
%
|
1.54
|
%
|
1.81
|
%
|
1.56
|
%
|
1.40
|
%
|
||||||||||||||||||
Copper
|
2.38
|
%
|
2.64
|
%
|
2.91
|
%
|
2.53
|
%
|
2.36
|
%
|
2.03
|
%
|
2.11
|
%
|
1.96
|
%
|
1.63
|
%
|
|||||||||||||||||||
Total
|
2.54
|
%
|
2.71
|
%
|
2.81
|
%
|
2.40
|
%
|
2.18
|
%
|
1.81
|
%
|
1.97
|
%
|
1.77
|
%
|
1.52
|
%
|
|||||||||||||||||||
|
|
||||||||||||||||||||||||||||||||||||
Business (1)
|
Fiber
|
2.14
|
%
|
1.96
|
%
|
2.00
|
%
|
1.80
|
%
|
1.88
|
%
|
1.74
|
%
|
1.67
|
%
|
1.49
|
%
|
1.44
|
%
|
||||||||||||||||||
Copper
|
2.23
|
%
|
2.18
|
%
|
2.26
|
%
|
2.16
|
%
|
2.14
|
%
|
1.88
|
%
|
2.01
|
%
|
1.76
|
%
|
1.70
|
%
|
|||||||||||||||||||
Total
|
2.20
|
%
|
2.09
|
%
|
2.16
|
%
|
2.02
|
%
|
2.03
|
%
|
1.82
|
%
|
1.87
|
%
|
1.65
|
%
|
1.59
|
%
|
|||||||||||||||||||
|
|
||||||||||||||||||||||||||||||||||||
Broadband ARPU
|
|||||||||||||||||||||||||||||||||||||
Consumer
|
Fiber
|
$
|
55.1
|
$
|
53.5
|
$
|
52.9
|
$
|
52.7
|
$
|
52.5
|
$
|
52.4
|
$
|
52.8
|
$
|
54.5
|
$
|
56.0
|
||||||||||||||||||
Copper
|
38.1
|
38.5
|
38.9
|
38.8
|
38.7
|
39.1
|
39.1
|
39.3
|
40.1
|
||||||||||||||||||||||||||||
Total
|
$
|
45.4
|
$
|
45.0
|
$
|
45.1
|
$
|
45.0
|
$
|
44.9
|
$
|
45.2
|
$
|
45.5
|
$
|
46.5
|
$
|
47.7
|
|||||||||||||||||||
|
|
||||||||||||||||||||||||||||||||||||
Business (1)
|
Fiber
|
$
|
84.8
|
$
|
87.6
|
$
|
87.8
|
$
|
87.1
|
$
|
87.1
|
$
|
86.1
|
$
|
86.2 |
$
|
87.1 |
$
|
86.6
|
||||||||||||||||||
Copper
|
61.9
|
64.2
|
63.8
|
64.4
|
65.2
|
64.0
|
64.2 | 65.2 |
64.9
|
||||||||||||||||||||||||||||
Total
|
$
|
70.4
|
$
|
73.0
|
$
|
73.1
|
$
|
73.3
|
$
|
74.0
|
$
|
73.0
|
$
|
73.6 |
$
|
74.6
|
$
|
74.4
|
As of or for the Quarter Ended
|
||||||||||||||||||||||||||||||||||||
03/31/19
|
06/30/19
|
09/30/19
|
12/30/19
|
03/31/20
|
06/30/20
|
09/30/20
|
12/31/20
|
03/31/21
|
||||||||||||||||||||||||||||
($ in millions)
|
||||||||||||||||||||||||||||||||||||
Revenue by Product Type:
|
||||||||||||||||||||||||||||||||||||
Data
|
$
|
888
|
$
|
885
|
$
|
851
|
$
|
822
|
$
|
855
|
$
|
849
|
$
|
838
|
$
|
834
|
$
|
842
|
||||||||||||||||||
Voice
|
604
|
582
|
574
|
555
|
529
|
509
|
500
|
490
|
487
|
|||||||||||||||||||||||||||
Video
|
256
|
248
|
233
|
222
|
212
|
197
|
186
|
181
|
169
|
|||||||||||||||||||||||||||
Other
|
113
|
111
|
106
|
108
|
108
|
105
|
103
|
101
|
95
|
|||||||||||||||||||||||||||
Revenue from customers
|
$
|
1,861
|
$
|
1,826
|
$
|
1,764
|
$
|
1,707
|
$
|
1,704
|
$
|
1,660
|
$
|
1,627
|
$
|
1,606
|
$
|
1,593
|
||||||||||||||||||
Subsidy and other revenue
|
85
|
89
|
85
|
85
|
84
|
94
|
99
|
89
|
83
|
|||||||||||||||||||||||||||
Total revenue - Remaining Properties
|
$
|
1,946
|
$
|
1,915
|
$
|
1,849
|
$
|
1,792
|
$
|
1,788
|
$
|
1,754
|
$
|
1,726
|
$
|
1,695
|
$
|
1,676
|
||||||||||||||||||
Total revenue - Northwest Operations
|
155
|
152
|
148
|
150
|
145
|
47
|
-
|
-
|
-
|
|||||||||||||||||||||||||||
Total revenue - Consolidated Frontier
|
$
|
2,101
|
$
|
2,067
|
$
|
1,997
|
$
|
1,942
|
$
|
1,933
|
$
|
1,801
|
$
|
1,726
|
$
|
1,695
|
$
|
1,676
|
||||||||||||||||||
Revenue by Customer Type:
|
||||||||||||||||||||||||||||||||||||
Consumer
|
$
|
996
|
$
|
969
|
$
|
943
|
$
|
923
|
$
|
894
|
$
|
874
|
$
|
859
|
$
|
857
|
$
|
844
|
||||||||||||||||||
Commercial
|
865
|
857
|
821
|
784
|
810
|
786
|
768
|
749
|
749
|
|||||||||||||||||||||||||||
Revenue from customers
|
$
|
1,861
|
$
|
1,826
|
$
|
1,764
|
$
|
1,707
|
$
|
1,704
|
$
|
1,660
|
$
|
1,627
|
$
|
1,606
|
$
|
1,593
|
||||||||||||||||||
Subsidy and other revenue
|
85
|
89
|
85
|
85
|
84
|
94
|
99
|
89
|
83
|
|||||||||||||||||||||||||||
Total revenue - Remaining Properties
|
$
|
1,946
|
$
|
1,915
|
$
|
1,849
|
$
|
1,792
|
$
|
1,788
|
$
|
1,754
|
$
|
1,726
|
$
|
1,695
|
$
|
1,676
|
||||||||||||||||||
Total revenue - Northwest Operations
|
155
|
152
|
148
|
150
|
145
|
47
|
-
|
-
|
-
|
|||||||||||||||||||||||||||
Total revenue - Consolidated Frontier
|
$
|
2,101
|
$
|
2,067
|
$
|
1,997
|
$
|
1,942
|
$
|
1,933
|
$
|
1,801
|
$
|
1,726
|
$
|
1,695
|
$
|
1,676
|
||||||||||||||||||
Remaining Properties’ Financial Data
|
||||||||||||||||||||||||||||||||||||
Net income (loss)
|
$
|
(153
|
)
|
$
|
(5,392
|
)
|
$
|
(444
|
)
|
$
|
(263
|
)
|
$
|
(283
|
)
|
$
|
(210
|
)
|
$
|
15
|
$
|
(50
|
)
|
$
|
60
|
|||||||||||
Add back (subtract):
|
||||||||||||||||||||||||||||||||||||
Income tax expense (benefit)
|
18
|
(534
|
)
|
(21
|
)
|
(74
|
)
|
(23
|
)
|
(57
|
)
|
(11
|
)
|
7
|
87
|
|||||||||||||||||||||
Interest expense
|
379
|
383
|
382
|
391
|
383
|
160
|
121
|
98
|
89
|
|||||||||||||||||||||||||||
Investment and other (income) loss, net
|
9
|
9
|
10
|
9
|
(5
|
)
|
20
|
14
|
14
|
(2
|
)
|
|||||||||||||||||||||||||
Pension settlement costs
|
-
|
-
|
-
|
57
|
103
|
56
|
-
|
-
|
-
|
|||||||||||||||||||||||||||
Loss on extinguishment of debt
|
20
|
-
|
-
|
-
|
-
|
-
|
-
|
72
|
-
|
|||||||||||||||||||||||||||
Reorganization items, net
|
-
|
-
|
-
|
-
|
-
|
142
|
131
|
136
|
25
|
|||||||||||||||||||||||||||
Operating income (loss)
|
273
|
(5,534
|
)
|
(73
|
)
|
120
|
175
|
111
|
270
|
277
|
259
|
|||||||||||||||||||||||||
Depreciation and amortization
|
449
|
429
|
422
|
420
|
415
|
397
|
392
|
394
|
387
|
|||||||||||||||||||||||||||
EBITDA
|
$
|
722
|
$
|
(5,105
|
)
|
$
|
349
|
$
|
540
|
$
|
590
|
$
|
508
|
$
|
662
|
$
|
671
|
$
|
646
|
|||||||||||||||||
Add back:
|
||||||||||||||||||||||||||||||||||||
Pension/OPEB expense
|
20
|
19
|
20
|
19
|
23
|
23
|
24
|
20
|
23
|
|||||||||||||||||||||||||||
Restructuring costs and other charges
|
27
|
30
|
27
|
82
|
48
|
36
|
3
|
-
|
2
|
|||||||||||||||||||||||||||
Stock-based compensation
|
3
|
4
|
3
|
5
|
1
|
1
|
1
|
-
|
(1
|
)
|
||||||||||||||||||||||||||
Storm-related insurance proceeds
|
(1
|
)
|
-
|
-
|
(5
|
)
|
-
|
(1
|
)
|
-
|
-
|
-
|
||||||||||||||||||||||||
Goodwill impairment
|
-
|
5,449
|
276
|
-
|
-
|
-
|
-
|
-
|
-
|
|||||||||||||||||||||||||||
Loss on disposal of Northwest Operations
|
-
|
384
|
30
|
32
|
24
|
136
|
-
|
2
|
-
|
|||||||||||||||||||||||||||
Adjusted EBITDA
|
$
|
771
|
$
|
781
|
$
|
705
|
$
|
673
|
$
|
686
|
$
|
703
|
$
|
690
|
$
|
693
|
$
|
670
|
||||||||||||||||||
EBITDA margin
|
37.1
|
%
|
-266.6
|
%
|
18.9
|
%
|
30.1
|
%
|
33.0
|
%
|
29.0
|
%
|
38.4
|
%
|
39.6
|
%
|
38.5
|
%
|
||||||||||||||||||
Adjusted EBITDA margin
|
39.6
|
%
|
40.8
|
%
|
38.1
|
%
|
37.6
|
%
|
38.4
|
%
|
40.1
|
%
|
40.0
|
%
|
40.9
|
%
|
40.0
|
%
|
.
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