- Total third quarter revenue of $1,997 million
- Net loss of $345 million, including a goodwill impairment of
$276 million and a loss of $30 million on anticipated sale of
operations in four Northwest states
- Third quarter Adjusted EBITDA1 of $804 million
- Net broadband unit losses of 71,000
- Liquidity of $683 million as of September 30, 2019
Frontier Communications Corporation (NASDAQ:FTR) today reported
financial results for the third quarter ended September 30,
2019.
“Third quarter results reflect our ongoing commitment to
investing in our assets that have the strongest potential for
future growth, while actively managing the parts of the business
that are experiencing secular decline,” said Dan McCarthy,
President and CEO. “Third quarter Adjusted EBITDA of $804 million
reflects a sequential decline in revenue, an increase in accounts
receivable reserves, and increased adjusted operating expenses1. In
Consumer we achieved sequential improvement in broadband trends in
fiber markets, with competitive headwinds continuing to impact
copper broadband markets. The decline in Commercial revenues was
driven primarily by wholesale revenue. While we continue to take
action to improve our financial position, we also remain focused on
the operational aspects of our business and serving the needs of
our residential and business customers.”
Consolidated Results
Consolidated revenue for the third quarter of 2019 was $1,997
million, as compared with $2,067 million in the second quarter.
Within third quarter consolidated revenue, Consumer revenue was
$1,024 million, Commercial revenue was $882 million, and subsidy
revenue was $91 million.
Net loss for the third quarter of 2019 was $345 million,
representing a net loss per common share of $3.31. Net loss
included a $276 million goodwill impairment before and after tax
resulting in the net goodwill balance being zero at the end of the
third quarter. There was also an additional $30 million loss on the
anticipated sale of operations and assets in Washington, Oregon,
Idaho, and Montana.
Third quarter Adjusted EBITDA was $804 million, representing an
Adjusted EBITDA margin2 of 40.3%. This compares with Adjusted
EBITDA of $882 million in the second quarter of 2019. The
sequential decline in Adjusted EBITDA was primarily driven by the
$70 million sequential decline in revenue, which included a $17
million sequential increase in accounts receivable reserves, and an
increase in adjusted operating expenses of $8 million.
Net cash provided from operating activities for the third
quarter of 2019 was $246 million and operating free cash flow3 was
($72) million. Third quarter interest payments totaling $496
million are considerably larger than second quarter payments of
$187 million. For the four-quarter period ended September 30, 2019,
net cash provided from operating activities4 was $1,706 million and
operating free cash flow was $563 million.
Consumer Business Highlights
- Revenue of $1,024 million, with the sequential decline driven
by customer losses.
- Customer churn of 2.24%, an increase from the second quarter of
2019.
- Consumer fiber broadband net losses were 1,000 and consumer
copper broadband net losses were 52,000. Broadband revenue
continued to grow as a percentage of Consumer revenue and remains
more than 40% of the total. The rate of video services revenue
decline increased in the third quarter because of sequential
declines in subscribers and advertising revenue. The rate of
decline of voice services revenue improved sequentially because of
an increase in the USF rate.
- Average Revenue Per Customer (ARPC) of $88.45, a decrease
reflecting, in part, ongoing video customer declines.
Commercial Business Highlights
- Revenue of $882 million, with the largest portion of the
decline in wholesale.
- Total commercial customers of 381,000 compared with 390,000 at
the end of the second quarter of 2019.
- Commercial wholesale revenue declined approximately 7%
sequentially, driven by a $17 million increase in accounts
receivables reserves for wholesale billing disputes and declines in
legacy data products and Ethernet. Wireless backhaul declined
approximately 2% and continues to represent less than 3% of total
company revenue. Wholesale represented approximately half of
Commercial revenue in the third quarter.
- Commercial SME revenue declined approximately 1% sequentially.
There was a sequential improvement in the decline rate of voice
services revenue because of a higher USF billing rate. Voice
revenue continued to account for more than half of SME revenue in
the third quarter.
Capital Structure
As previously announced, the Finance Committee of the Board of
Directors is evaluating Frontier’s capital structure. This includes
considering, evaluating and negotiating capital markets and/or
financing transactions and/or strategic alternatives. Frontier
remains committed to reducing debt and improving its leverage
profile.
Developments include the following:
- As of September 30, 2019, Frontier’s leverage ratio5 was
4.81:1.
- As of September 30, 2019, the company had total liquidity6 of
$683 million.
- In the second quarter we entered into a definitive agreement to
sell operations and all associated assets in Washington, Oregon,
Idaho, and Montana for $1,352 million in cash at closing subject to
certain closing adjustments.
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 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, gains/losses on extinguishment of debt,
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 expense, goodwill
impairment charges, 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.
Adjusted net income (loss) attributable to Frontier common
shareholders is defined as net income (loss) attributable to
Frontier common shareholders and excludes, restructuring costs and
other charges, pension settlement costs, goodwill impairment
charges, certain income tax items and the income tax effect of
these items, and certain other non-recurring items. Adjusting for
these items allows investors to better understand and analyze
Frontier’s financial performance over the periods presented.
Management defines operating free cash flow, a non-GAAP
measure, as net cash provided from operating activities less
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 and preferred stock dividends 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, goodwill impairment charges, certain
pension/OPEB expenses, stock-based compensation expense, and
certain other non-recurring items. Investors have indicated that
this non-GAAP measure is useful in evaluating Frontier’s
performance.
Leverage ratio is calculated as net debt (total debt less cash
and cash equivalents) 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.
Conference Call and Webcast
Frontier will host a conference call today at 4:30 P.M. Eastern
time. Management will present prepared remarks. There will not be a
question and answer session. In connection with the conference call
and as a convenience to investors, Frontier furnished today, under
cover of a Current Report on Form 8-K, additional materials
regarding results. The conference call will be webcast and may be
accessed in the Webcasts & Presentations section of Frontier's
Investor Relations website at www.frontier.com/ir.
A telephonic replay of the conference call will be available in
the Webcasts & Presentations section of Frontier's Investor
Relations website at www.frontier.com/ir.
About Frontier Communications
Frontier Communications Corporation (NASDAQ: FTR) is a leader in
providing communications services to urban, suburban, and rural
communities in 29 states. Frontier offers a variety of services to
residential customers over its fiber-optic and copper networks,
including video, high-speed internet, advanced voice, and Frontier
Secure® digital protection solutions. Frontier Business offers
communications solutions to small, medium, and enterprise
businesses. More information about Frontier is available at
www.frontier.com.
Forward-Looking Statements
This earnings release contains "forward-looking statements,"
related to future events. Forward-looking statements address
Frontier’s expected future business, financial performance, and
financial condition, 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.
For Frontier, particular uncertainties that could cause actual
results to be materially different than those expressed in such
forward-looking statements include: declines in revenue from
Frontier’s voice services, switched and non-switched access and
video and data services that it cannot stabilize or offset with
increases in revenue from other products and services; Frontier’s
ability to successfully implement strategic initiatives, including
opportunities to enhance revenue and realize productivity
improvements; Frontier’s ability to repay or refinance its debt
through, among other things, accessing the capital markets, notes
repurchases and/or redemptions, tender offers and exchange offers;
adverse changes in the ratings given to Frontier’s debt securities
by nationally accredited ratings organizations; covenants in
Frontier’s indentures and credit agreements that may limit
Frontier’s operational and financial flexibility as well as its
ability to access the capital markets in the future; adverse
changes in the credit markets, which could impact the availability
and cost of financing; competition from cable, wireless and
wireline carriers, satellite, and OTT companies, and the risk that
Frontier will not respond on a timely or profitable basis;
Frontier’s ability to successfully adjust to changes in the
communications industry, including the effects of technological
changes and competition on its capital expenditures, products and
service offerings; risks related to disruptions in Frontier’s
networks, infrastructure and information technology that may result
in customer loss and/or incurrence of additional expenses; the
impact of potential information technology or data security
breaches or other cyber attacks or other disruptions; Frontier’s
ability to retain or attract new customers and to maintain
relationships with customers, employees or suppliers; Frontier’s
ability to secure, continue to use or renew intellectual property
and other licenses used in our business; Frontier’s ability to hire
or retain key personnel; Frontier’s ability to realize anticipated
benefits from recent acquisitions; Frontier’s ability to dispose of
certain assets or asset groups on terms that are attractive to it,
or at all; Frontier’s ability to effectively manage its operations,
operating expenses, capital expenditures, debt service requirements
and cash paid for income taxes and liquidity; Frontier’s ability to
defend against litigation and potentially unfavorable results from
current pending and future litigation; the effects of state
regulatory requirements that could limit Frontier’s ability to
transfer cash among its subsidiaries or dividend funds up to the
parent company; the effects of governmental legislation and
regulation on Frontier’s business; the impact of regulatory,
investigative and legal proceedings and legal compliance risks;
government infrastructure projects that impact capital
expenditures; continued reductions in switched access revenue as a
result of regulation, competition or technology substitutions; the
effects of changes in the availability of federal and state
universal service funding or other subsidies to Frontier and its
competitors; Frontier’s ability to meet its remaining CAF II
funding obligations and the risk of penalties or obligations to
return certain CAF II funds; Frontier’s ability to obtain future
subsidies, including participation in the proposed RDOF program;
Frontier’s ability to effectively manage service quality and meet
mandated service quality metrics; the effects of changes in
accounting policies or practices; the impact of potential future
impairment charges with respect intangible assets or additional
losses on assets held for sale; 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
Frontier’s competitors more than it, as well as potential future
decreases in the value of Frontier’s deferred tax assets; the
effects of increased medical expenses and pension and
postemployment expenses; Frontier’s ability to successfully
renegotiate union contracts; changes in pension plan assumptions,
interest rates, discount rates, regulatory rules and/or the value
of Frontier’s pension plan assets, which could require Frontier to
make increased contributions to its pension plans; the effects of
changes in both general and local economic conditions in the
markets that Frontier serves; the effects of severe weather events
or other natural or man-made disasters, which may increase
operating and capital expenses or adversely impact customer
revenue; and the risks and other factors contained in Frontier’s
filings with the U.S. Securities and Exchange Commission, including
its most recent report on Form 10-K and its Form 10-Q for the
quarter ended June 30, 2019. These risks and uncertainties may
cause actual future results to be materially different than those
expressed in such forward-looking statements. Frontier has no
obligation to update or revise these forward-looking statements and
does not undertake to do so.
______________________________
1 Adjusted EBITDA and adjusted operating expenses are non-GAAP
measure. See “Non-GAAP Measures” for a description of this measure
and its calculation. See Schedule A on page 12 for a reconciliation
to net income/(loss).
2 Adjusted EBITDA margin is a non-GAAP measure of performance,
calculated as Adjusted EBITDA, divided by total revenue. See
“Non-GAAP Measures” on page 4 for a description of this measure and
its calculation. See Schedule A on page 12 for a reconciliation of
EBITDA to net loss.
3 Operating free cash flow is a non-GAAP measure of liquidity
derived from net cash provided from operating activities. See
“Non-GAAP Measures” on page 4 for a description of this measure and
its calculation and Schedule A on page 12 for a reconciliation to
net cash provided from operating activities.
4 Operating free cash flow for the trailing-four-quarter period
ended September 30, 2019 consists of net cash provided from
operating activities less capital expenditures of $1,143 million
over the same period. Operating free cash flow is a non-GAAP
measure. See note 3 above.
5 Leverage ratio is calculated as net debt (total debt less cash
and cash equivalents) divided by Adjusted EBITDA for the most
recent four quarters. See Schedule C on page 14 for its
calculation.
6 Total liquidity as of September 30, 2019 consists of cash and
cash equivalents of $683 million, including $749 million borrowings
under the revolver.
Frontier Communications Corporation Unaudited
Consolidated Financial Data For the quarter ended For
the nine months ended ($ in millions and shares in thousands,
except per share amounts) September 30, 2019 June 30, 2019
September 30, 2018 September 30, 2019 September 30, 2018
Statement of Operations Data Revenue
$
1,997
$
2,067
$
2,126
$
6,165
$
6,487
Operating expenses: Network access expenses
307
318
353
963
1,094
Network related expenses
464
445
476
1,365
1,437
Selling, general and administrative expenses
445
445
445
1,346
1,374
Depreciation and amortization
422
454
471
1,360
1,462
Goodwill impairment
276
5,449
400
5,725
400
Loss on disposal of Northwest Operations
30
384
-
414
-
Restructuring costs and other charges
27
31
14
86
20
Total operating expenses
1,971
7,526
2,159
11,259
5,787
Operating income (loss)
26
(5,459
)
(33
)
(5,094
)
700
-
Investment and other income (loss), net
(10
)
(9
)
3
(28
)
16
Pension settlement costs
-
-
9
-
34
Gain (Loss) on early extinguishment of debt
-
-
(2
)
(20
)
31
Interest expense
382
383
389
1,144
1,148
Loss before income taxes
(366
)
(5,851
)
(430
)
(6,286
)
(435
)
Income tax benefit
(21
)
(534
)
(4
)
(537
)
(11
)
Net loss
(345
)
(5,317
)
(426
)
(5,749
)
(424
)
Less: Dividends on preferred stock
-
-
-
-
107
Net loss attributable to Frontier common shareholders
$
(345
)
$
(5,317
)
$
(426
)
$
(5,749
)
$
(531
)
Weighted average shares outstanding - basic and diluted
104,135
104,118
103,665
104,031
87,138
Basic and diluted net loss per common share
$
(3.31
)
$
(51.07
)
$
(4.11
)
$
(55.26
)
$
(6.09
)
Other Financial Data: Capital expenditures
$
318
$
275
$
329
$
898
$
947
Dividends declared - Preferred stock
$
-
$
-
$
-
$
-
$
107
Frontier Communications Corporation Unaudited
Consolidated Financial Data For the quarter ended For
the nine months ended September 30, 2019 June 30, 2019 September
30, 2018 September 30, 2019 September 30, 2018 (
$ in millions)
Selected Statement of
Operations Data Revenue: Data and Internet services
$
928
$
963
$
961
$
2,858
$
2,919
Voice services
621
629
669
1,900
2,053
Video services
244
260
260
772
810
Other
113
120
141
357
416
Customer revenue
1,906
1,972
2,031
5,887
6,198
Subsidy revenue
91
95
95
278
289
Total revenue
$
1,997
$
2,067
$
2,126
$
6,165
$
6,487
Other Financial Data Revenue: Consumer
$
1,024
$
1,050
$
1,069
$
3,151
$
3,292
Commercial
882
922
962
2,736
2,906
Customer revenue
1,906
1,972
2,031
5,887
6,198
Subsidy revenue
91
95
95
278
289
Total revenue
$
1,997
$
2,067
$
2,126
$
6,165
$
6,487
Frontier Communications Corporation Unaudited
Consolidated Financial and Operating Data For the
quarter ended For the nine months ended September 30, 2019 June 30,
2019 September 30, 2018 September 30, 2019 September 30, 2018
Customers (in thousands)
4,193
4,292
4,574
4,193
4,574
Consumer customer metrics Customers (in thousands)
3,812
3,902
4,152
3,812
4,152
Net customer additions (losses)
(90
)
(93
)
(86
)
(248
)
(245
)
Average monthly consumer revenue per customer
$
88.45
$
88.68
$
84.92
$
88.79
$
85.54
Customer monthly churn
2.24
%
2.14
%
2.03
%
2.12
%
2.03
%
Commercial customer metrics Customers (in thousands)
381
390
422
381
422
Broadband subscriber metrics (in thousands) Broadband
subscribers
3,555
3,626
3,802
3,555
3,802
Net subscriber additions (losses)
(71
)
(71
)
(61
)
(180
)
(136
)
Video (excl. DISH) subscriber metrics (in thousands)
Video subscribers
698
738
873
698
873
Net subscriber additions (losses)
(40
)
(46
)
(29
)
(140
)
(88
)
Video - DISH subscriber metrics (in thousands) DISH
subscribers
181
190
211
181
211
Net subscriber additions (losses)
(9
)
(8
)
(8
)
(24
)
(24
)
Employees
19,132
19,872
21,375
19,132
21,375
Frontier Communications Corporation Condensed
Consolidated Balance Sheet Data (Unaudited)
(
$ in millions) September 30, 2019
December 31, 2018
ASSETS
Current assets: Cash and cash equivalents
$
683
$
354
Accounts receivable, net
654
723
Assets held for sale
1,402
-
Other current assets
270
253
Total current assets
3,009
1,330
Property, plant and equipment, net
12,973
14,187
Other assets
1,579
8,142
Total assets
$
17,561
$
23,659
LIABILITIES AND EQUITY
Current liabilities: Long-term debt due within one year
$
994
$
814
Liabilities held for sale
134
-
Accounts payable and other current liabilities
1,612
1,747
Total current liabilities
2,740
2,561
Deferred income taxes and other liabilities
2,619
3,140
Long-term debt
16,305
16,358
Equity (deficit)
(4,103
)
1,600
Total liabilities and equity (deficit)
$
17,561
$
23,659
Frontier Communications Corporation Unaudited
Consolidated Cash Flow Data For the nine months ended
(
$ in millions) September 30, 2019
September 30, 2018
Cash flows provided from (used by)
operating activities: Net loss
$
(5,749
)
$
(424
)
Adjustments to reconcile net loss to net cash provided from (used
by) operating activities: Depreciation and amortization
1,360
1,462
(Gain) Loss on extinguishment of debt
20
(31
)
Pension settlement costs
-
34
Stock-based compensation expense
10
14
Amortization of deferred financing costs
23
26
Other adjustments
2
(24
)
Deferred income taxes
(541
)
(12
)
Goodwill impairment
5,725
400
Loss on disposal of Northwest Operations
414
-
Change in accounts receivable
17
43
Change in accounts payable and other liabilities
(153
)
(239
)
Change in prepaid expenses, income taxes, and other assets
(25
)
(40
)
Net cash provided from operating activities
1,103
1,209
Cash flows provided from (used by) investing
activities: Capital expenditures
(898
)
(947
)
Proceeds on sale of assets
76
11
Other
2
4
Net cash used by investing activities
(820
)
(932
)
Cash flows provided from (used by) financing
activities: Long-term debt payments
(2,003
)
(1,997
)
Proceeds from long-term debt borrowings
1,650
1,840
Proceeds from revolving debt
949
-
Repayment of revolving debt
(475
)
-
Financing costs paid
(44
)
(43
)
Dividends paid on preferred stock
-
(107
)
Premium paid to retire debt
-
(17
)
Finance lease obligation payments
(26
)
(30
)
Other
(5
)
(11
)
Net cash provided from (used by) financing activities
46
(365
)
Decrease in cash, cash equivalents, and restricted cash
329
(88
)
Cash, cash equivalents, and restricted cash at January 1,
404
376
Cash, cash equivalents, and restricted cash at September 30,
$
733
$
288
Supplemental cash flow information: Cash paid
during the period for: Interest
$
1,208
$
1,266
Income tax payments, net
$
5
$
5
SCHEDULE A Frontier Communications Corporation
Reconciliation of Non-GAAP Financial Measures For the
quarter ended For the nine months ended (
$ in
millions) September 30, 2019 June 30, 2019 September 30,
2018 September 30, 2019 September 30, 2018
EBITDA Net loss
$
(345
)
$
(5,317
)
$
(426
)
$
(5,749
)
$
(424
)
Add back (subtract): Income tax benefit
(21
)
(534
)
(4
)
(537
)
(11
)
Interest expense
382
383
389
1,144
1,148
Investment and other (income) loss, net
10
9
(3
)
28
(16
)
Pension settlement costs
-
-
9
-
34
(Gain) Loss on extinguishment of debt
-
-
2
20
(31
)
Operating income (loss)
26
(5,459
)
(33
)
(5,094
)
700
Depreciation and amortization
422
454
471
1,360
1,462
EBITDA
$
448
$
(5,005
)
$
438
$
(3,734
)
$
2,162
Add back: Pension/OPEB expense
20
19
21
59
66
Restructuring costs and other charges
27
31
14
86
20
Stock-based compensation expense
3
4
5
10
14
Storm-related insurance proceeds
-
-
-
(1
)
-
Work stoppage costs
-
-
-
-
8
Goodwill impairment
276
5,449
400
5,725
400
Loss on disposal of Northwest Operations
30
384
-
414
-
Adjusted EBITDA
$
804
$
882
$
878
$
2,559
$
2,670
EBITDA margin
22.4
%
-242.1
%
20.6
%
-60.6
%
33.3
%
Adjusted EBITDA margin
40.3
%
42.7
%
41.3
%
41.5
%
41.2
%
Free Cash Flow Net cash
provided from operating activities
$
246
$
575
$
286
$
1,103
$
1,209
Capital expenditures
(318
)
(275
)
(329
)
(898
)
(947
)
Operating free cash flow
$
(72
)
$
300
$
(43
)
$
205
$
262
SCHEDULE B Frontier Communications Corporation
Reconciliation of Non-GAAP Financial Measures For the
quarter ended For the nine months ended September 30, 2019 June 30,
2019 September 30, 2018 September 30, 2019 September 30, 2018
(
$ in millions, except per share
amounts) Net Income (Loss) BasicEarnings(Loss) Per Share Net
Income (Loss) BasicEarnings(Loss) PerShare Net Income(Loss)
BasicEarnings(Loss) Per Share Net Income(Loss) BasicEarnings(Loss)
Per Share Net Income(Loss) BasicEarnings(Loss) Per Share Net
loss attributable to Frontier common shareholders
$
(345)
$
(3.31)
$
(5,317)
$
(51.07)
$
(426)
$
(4.11)
$
(5,749)
$
(55.26)
$
(531)
$
(6.09)
Restructuring costs and other charges
27
31
14
86
20
Pension settlement costs
-
-
9
-
34
(Gain) Loss on extinguishment of debt
-
-
2
20
(31)
Goodwill impairment
276
5,449
400
5,725
400
Loss on disposal of Northwest Operations
30
384
-
414
-
Storm-related insurance proceeds
-
-
-
(1)
-
Work stoppage costs
-
-
-
-
8
Certain other tax items (1)
2
87
46
119
38
Income tax effect on above items: Restructuring costs and other
charges
(6)
(8)
(3)
(19)
(4)
Pension settlement costs
-
-
(2)
-
(8)
(Gain) Loss on extinguishment of debt
-
-
(1)
(4)
8
Goodwill impairment
-
(524)
(46)
(524)
(46)
Work stoppage costs
-
-
-
-
(2)
$
329
$
3.16
$
5,419
$
52.05
$
419
$
4.04
$
5,816
$
55.91
$
417
$
4.79
Adjusted net income (loss) attributable to Frontier common
shareholders(2)
$
(16)
$
(0.15)
$
102
$
0.98
$
(7)
$
(0.07)
$
67
$
0.64
$
(114)
$
1.31
(1) Includes impact arising from federal research and
development credits, changes in certain deferred tax balances,
state tax law changes, state filing method change, and the net
impact of uncertain tax positions. (2) Adjusted net income (loss)
attributable to Frontier common shareholders may not sum due to
rounding.
SCHEDULE C
Frontier Communications Corporation Reconciliation of
Non-GAAP Financial Measures For the quarter ended For
the nine months ended (
$ in millions)
September 30, 2019 June 30, 2019 September 30, 2018 September 30,
2019 September 30, 2018
Adjusted
Operating Expenses Total operating expenses
$
1,971
$
7,526
$
2,159
$
11,259
$
5,787
Subtract: Depreciation and amortization
422
454
471
1,360
1,462
Goodwill impairment
276
5,449
400
5,725
400
Loss on disposal of Northwest Operations
30
384
-
414
-
Pension/OPEB expense
20
19
21
59
66
Restructuring costs and other charges
27
31
14
86
20
Stock-based compensation expense
3
4
5
10
14
Storm-related insurance proceeds
-
-
-
(1)
-
Work stoppage costs
-
-
-
-
8
Adjusted operating expenses
$
1,193
$
1,185
$
1,248
$
3,606
$
3,817
As of September 30, 2019
Leverage Ratio Numerator Long-term debt
$
16,305
Long-term debt due within one year
994
Cash and cash equivalents
(683)
$
16,616
Denominator Adjusted EBITDA - last 4 quarters
$
3,454
Leverage Ratio
4.81x
View source
version on businesswire.com: https://www.businesswire.com/news/home/20191105006164/en/
INVESTORS: Luke Szymczak Vice
President (203) 614-5044 luke.szymczak@ftr.com
MEDIA: Javier Mendoza Vice
President (562) 305-2345 javier.mendoza@ftr.com or Brigid Smith
Assistant Vice President (203) 614-5042 brigid.smith@ftr.com
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