- Reported year-over-year consumer revenue growth for the first
time as a new public company, powered by accelerating fiber revenue
growth
- Delivered fastest year-over-year EBITDA growth in more than six
years
Frontier Communications Parent, Inc. (NASDAQ: FYBR) (“Frontier”)
reported third-quarter 2023 results today.
“We delivered another strong quarter of operational results,
with our first consumer revenue increase as a new public company,
and an acceleration in our EBITDA growth,” said Nick Jeffery,
President and Chief Executive Officer of Frontier. “This quarter’s
strong results continue to show how every day, with every new fiber
customer, we become a more valuable business.”
“Our strong progress over the last two years gives me even more
confidence that our strategy will create long-term, material value
for our shareholders. We are Building Gigabit America to meet the
connectivity needs of our customers and I am very excited about the
tremendous opportunity ahead.”
Third-Quarter 2023 Highlights1
- Passed 332,000 new fiber locations
- Added 79,000 fiber broadband customers, resulting in fiber
broadband customer growth of 19% year-over-year
- Revenue of $1.44 billion, net income of $11 million and
Adjusted EBITDA of $526 million
- Capital expenditures of $671 million, including $143 million of
non-subsidy-related build capital expenditures and $25 million of
subsidy-related build capital expenditures
- Net cash from operations of $383 million driven by strong
operating performance and increased focus on working capital
management
- Achieved annualized run-rate cost savings of $484 million
- Completed $2.1 billion of fiber securitization transactions in
August 2023
- Announced corporate headquarters relocation to Dallas,
Texas
Third-Quarter 2023 Consolidated Financial Results2
- Revenue of $1.44 billion decreased 0.6% year-over-year as
growth in fiber-based products was offset by declines in
copper-based products
- Operating income of $114 million and net income of $11
million
- Adjusted EBITDA of $526 million increased 3.5% year-over-year,
as revenue declines were offset by lower content expenses and
cost-savings
- Adjusted EBITDA margin of 36.6% increased from 35.2% in the
third quarter of 2022
- Capital expenditures of $671 million decreased from $772
million in the third quarter of 2022, primarily due to lower
pre-work capital spent to pass new fiber locations
Third-Quarter 2023 Consumer Results
- Consumer revenue of $787 million increased 0.3% year-over-year
as strong growth in fiber broadband was substantially offset by
declines in copper products
- Consumer fiber revenue of $479 million increased 13.0%
year-over-year as growth in broadband, voice, and other offset
declines in video
- Consumer fiber broadband revenue of $340 million increased
22.3% year-over-year driven by growth in fiber broadband customers
and ARPU
- Consumer fiber broadband customer net additions of 75,000
resulted in consumer fiber broadband customer growth of 19.6%
year-over-year
- Consumer fiber broadband customer churn of 1.47% decreased from
1.60% in the third quarter of 2022
- Consumer fiber broadband ARPU of $64.49 increased 2.4%
year-over-year, due to increased customer in-take ARPU and annual
price increases
Third-Quarter 2023 Business and Wholesale Results
- Business and wholesale revenue of $634 million decreased 1.1%
year-over-year as growth in fiber was offset by declines in
copper
- Business and wholesale fiber revenue of $281 million increased
5.2% year-over-year as growth in data and voice was partly offset
by declines in other
- Business fiber broadband customer net additions of 4,000
resulted in business fiber broadband customer growth of 12.5%
year-over-year
- Business fiber broadband customer churn of 1.26% decreased from
1.36% in the third quarter of 2022
- Business fiber broadband ARPU of $101.36 decreased 5.5%
year-over-year
Capital Structure3
At September 30, 2023, Frontier had total liquidity of $3.4
billion, including a cash and short-term investments balance of
approximately $2.2 billion, $0.7 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 September 30, 2023 was approximately 4.3x.
Frontier has no long-term debt maturities prior to 2027.
2023 Outlook4
Frontier today updated interest expense guidance, while
reaffirming all other operational and financial expectations for
2023.
Frontier’s guidance for the full year 2023 is:
Unchanged from Prior
Guidance
- Adjusted EBITDA of $2.11 - $2.16 billion
- New fiber passings of 1.3 million
- Cash capital expenditures of $3.00 - $3.20 billion
- Cash taxes of approximately $20 million
- Pension and OPEB expense of approximately $50 million (net of
capitalization)
- Cash pension and OPEB contributions of approximately $125
million
Changes to
Guidance
- Net cash interest payments of approximately $700 million, an
increase from prior guidance of $655 million, reflecting the $1.6
billion of debt raised in August 2023
Conference Call Information
As previously announced, Frontier will host a conference call
with the financial community to discuss third-quarter 2023 results
today, November 1, 2023, 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.
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. 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 2023 outlook and guidance.
Forward-looking statements address our expectations or beliefs
concerning future events, including, without limitation, our
outlook with respect to future operating and financial performance,
expected results from our implementation of strategic and cost
savings initiatives, planned financings, capital expenditures,
taxes, pension and OPEB obligations, and our ability to comply with
the covenants in the agreements governing our indebtedness 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 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 tightening labor markets and increased fuel and
electricity costs, and potential disruptions in our supply chain
resulting from the global microchip shortage or otherwise, 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; competition from cable, wireless and wireline
carriers, satellite, 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, including the COVID-19 pandemic, natural
disasters, economic or political instability, terrorist attacks and
wars, including the ongoing war in Ukraine, 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
September 30,
June 30,
September 30,
($ in millions and
shares in thousands, except per share amounts)
2023
2023
2022
Statements of Income Data
Revenue
$
1,436
$
1,449
$
1,444
Operating expenses:
Cost of service
545
528
544
Selling, general, and administrative
expenses
405
428
431
Depreciation and amortization
356
354
296
Restructuring costs and other charges
16
24
4
Total operating expenses
1,322
1,334
1,275
Operating income
114
115
169
Investment and other income, net
67
32
211
Pension settlement costs
-
-
(50
)
Interest expense
(170
)
(149
)
(135
)
Income (loss) before income taxes
11
(2
)
195
Income tax expense
-
-
75
Net income (loss)
$
11
$
(2
)
$
120
Weighted average shares outstanding -
basic
245,761
245,474
244,984
Weighted average shares outstanding -
diluted
247,447
245,474
245,212
Basic net (loss) earnings per common
share
$
0.05
$
(0.01
)
$
0.49
Diluted net (loss) earnings per common
share
$
0.05
$
(0.01
)
$
0.49
Other Financial Data:
Capital expenditures
$
671
$
1,057
$
772
Frontier Communications
Parent, Inc.
Unaudited Financial
Data
For the
For the
nine months ended
nine months ended
September 30,
September 30,
($ in millions and
shares in thousands, except per share amounts)
2023
2022
Statements of Income Data
Revenue
$
4,325
$
4,350
Operating expenses:
Cost of service
1,615
1,643
Selling, general, and administrative
expenses
1,250
1,293
Depreciation and amortization
1,040
870
Restructuring costs and other charges
48
88
Total operating expenses
3,953
3,894
Operating income
372
456
Investment and other income, net
101
410
Pension settlement costs
-
(50
)
Interest expense
(460
)
(356
)
Income before income taxes
13
460
Income tax expense
1
174
Net income
$
12
$
286
Weighted average shares outstanding -
basic
245,431
244,711
Weighted average shares outstanding -
diluted
247,336
245,080
Basic net earnings per common
share
$
0.05
$
1.17
Diluted net earnings per common
share
$
0.05
$
1.17
Other Financial Data:
Capital expenditures
$
2,882
$
1,860
Frontier Communications
Parent, Inc.
Unaudited Financial
Data
For the quarter ended
September 30,
June 30,
September 30,
($ in millions)
2023
2023
2022
Selected Statement of Income
Data
Revenue:
Data and Internet services
$
895
$
880
$
848
Voice services
341
347
369
Video services
104
112
127
Other
81
89
82
Revenue from contracts with customers
1,421
1,428
1,426
Subsidy and other revenue
15
21
18
Total revenue
$
1,436
$
1,449
$
1,444
Other Financial Data
Revenue:
Consumer
$
787
$
775
$
785
Business and wholesale
634
653
641
Revenue from contracts with customers
$
1,421
$
1,428
$
1,426
Fiber
$
760
$
746
$
691
Copper
661
682
735
Revenue from contracts with customers
$
1,421
$
1,428
$
1,426
For the nine months
ended
For the nine months
ended
September 30,
September 30,
($ in millions)
2023
2022
Selected Statement of Income
Data
Revenue:
Data and Internet services
$
2,637
$
2,531
Voice services
1,044
1,136
Video services
333
398
Other
253
245
Revenue from contracts with customers
4,267
4,310
Subsidy and other revenue
58
40
Total revenue
$
4,325
$
4,350
Other Financial Data
Revenue:
Consumer
$
2,323
$
2,352
Business and wholesale
1,944
1,958
Revenue from contracts with customers
$
4,267
$
4,310
Fiber
$
2,235
$
2,048
Copper
2,032
2,262
Revenue from contracts with customers
$
4,267
$
4,310
Frontier Communications
Parent, Inc.
Unaudited Operating
Data
As of and for the three months
ended
For the nine months
ended
September 30, 2023
June 30, 2023
September 30, 2022
September 30, 2023
September 30, 2022
Consumer customer metrics
Customers (in thousands)
3,118
3,127
3,142
3,118
3,142
Net customer additions (losses)
(9
)
(13
)
(17
)
(15
)
(23
)
Average monthly consumer
revenue per customer
$
83.99
$
82.48
$
83.05
$
82.49
$
82.68
Customer monthly churn
1.70
%
1.53
%
1.76
%
1.55
%
1.55
%
Broadband customer metrics (1)
Broadband customers (in thousands)
2,881
2,865
2,831
2,881
2,831
Net customer additions
16
2
4
42
32
Employees
13,756
14,099
14,746
13,756
14,746
(1) Amounts presented exclude related
metrics for our wholesale customers.
Frontier Communications
Parent, Inc.
Condensed Consolidated Balance
Sheet Data
(Unaudited)
($ in
millions)
September 30, 2023
December 31, 2022
ASSETS
Current assets:
Cash and cash equivalents
$
948
$
322
Short-term investments
1,275
1,750
Accounts receivable, net
449
438
Other current assets
126
87
Total current assets
2,798
2,597
Property, plant and equipment, net
13,621
11,850
Other assets
4,090
4,177
Total assets
$
20,509
$
18,624
LIABILITIES AND
EQUITY
Current liabilities:
Long-term debt due within one year
$
15
$
15
Accounts payable and other current
liabilities
2,036
2,280
Total current liabilities
2,051
2,295
Deferred income taxes and other
liabilities
1,960
2,085
Long-term debt
11,258
9,110
Equity
5,240
5,134
Total liabilities and equity
$
20,509
$
18,624
As of
September 30, 2023
Leverage
Ratio
Numerator:
Long-term debt due within one year
$
15
Long-term debt
11,258
Total debt
$
11,273
Less: Cash and cash equivalents
(948
)
Short-term investments
(1,275
)
Net debt
$
9,050
Denominator:
Adjusted EBITDA - last 4 quarters
$
2,106
Net Leverage Ratio
4.3x
Frontier Communications
Parent, Inc.
Unaudited Consolidated Cash
Flow Data
For the three
For the three
months ended
months ended
September 30, 2023
September 30, 2022
($ in
millions)
Cash flows provided from (used by)
operating activities:
Net income
$
11
$
120
Adjustments to reconcile net loss to net
cash provided from
(used by) operating activities:
Depreciation and amortization
356
296
Pension settlement costs
-
50
Stock-based compensation
30
19
Amortization of premium
(6
)
(7
)
Bad debt expense
8
5
Other adjustments
7
-
Deferred income taxes
(1
)
74
Change in accounts receivable
(26
)
(8
)
Change in long-term pension and other
postretirement liabilities
(98
)
(285
)
Change in accounts payable and other
liabilities
113
17
Change in prepaid expenses, income taxes,
and other assets
(11
)
3
Net cash provided from operating
activities
383
284
Cash flows provided from (used by)
investing activities:
Capital expenditures
(671
)
(772
)
Purchases of short-term investments
(1)
(1,275
)
(625
)
Sale of short-term investments (1)
575
600
Purchases of long-term investments
(63
)
-
Proceeds from sale of asset
14
3
Other
1
1
Net cash used by investing
activities
(1,419
)
(793
)
Cash flows provided from (used by)
financing activities:
Long-term debt payments
(56
)
(4
)
Proceeds from long-term debt
borrowings
1,528
-
Premium paid to retire debt
(10
)
-
Proceeds from financing lease
transactions
21
-
Financing costs paid
(43
)
-
Finance lease obligation payments
(6
)
(5
)
Taxes paid on behalf of employees for
shares withheld
(2
)
-
Proceeds from sale and lease-back
transactions
-
70
Other
(4
)
-
Net cash provided from (used by)
financing activities
1,428
61
Increase (Decrease) in cash, cash
equivalents, and restricted cash
392
(448
)
Cash, cash equivalents, and restricted
cash at the beginning of the period
662
708
Cash, cash equivalents, and restricted
cash at the end of the period
$
1,054
$
260
Supplemental cash flow
information:
Cash paid during the period
for:
Interest
$
135
$
88
Income tax payments, net
$
-
$
(2
)
(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 nine months
ended
For the nine months
ended
September 30, 2023
September 30, 2022
($ in
millions)
Cash flows provided from (used by)
operating activities:
Net income
$
12
$
286
Adjustments to reconcile net loss to net
cash provided from
(used by) operating activities:
Depreciation and amortization
1,040
870
Pension settlement costs
-
50
Stock-based compensation
81
54
Amortization of (premium) discount
(21
)
(21
)
Lease impairment
-
44
Bad debt expense
24
19
Other adjustments
9
1
Deferred income taxes
(1
)
167
Change in accounts receivable
(35
)
16
Change in long-term pension and other
postretirement liabilities
(149
)
(527
)
Change in accounts payable and other
liabilities
101
94
Change in prepaid expenses, income taxes,
and other assets
(13
)
(12
)
Net cash provided from operating
activities
1,048
1,041
Cash flows provided from (used by)
investing activities:
Capital expenditures
(2,882
)
(1,860
)
Purchases of short-term investments
(1)
(1,850
)
(3,225
)
Sale of short-term investments (1)
2,325
900
Purchases of long-term investments
(63
)
-
Proceeds on sale of assets
18
4
Other
1
3
Net cash used by investing
activities
(2,451
)
(4,178
)
Cash flows provided from (used by)
financing activities:
Long-term debt payments
(64
)
(11
)
Proceeds from long-term debt
borrowings
2,278
1,200
Premium paid to retire debt
(10
)
-
Proceeds from financing lease
transactions
(56
)
-
Financing costs paid
21
(17
)
Finance lease obligation payments
(18
)
(15
)
Proceeds from sale and lease-back
transactions
-
70
Taxes paid on behalf of employees for
shares withheld
(9
)
(7
)
Other
(7
)
(1
)
Net cash provided from financing
activities
2,135
1,219
Increase (Decrease) in cash, cash
equivalents, and restricted cash
732
(1,918
)
Cash, cash equivalents, and restricted
cash at the beginning of the period
322
2,178
Cash, cash equivalents, and restricted
cash at the end of the period
$
1,054
$
260
Supplemental cash flow
information:
Cash paid during the period
for:
Interest
$
449
$
286
Income tax payments, net
$
1
$
7
(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 nine months
ended
September 30,
June 30,
September 30,
September 30,
September 30,
($ in
millions)
2023
2023
2022
2023
2022
Net income (loss)
$
11
$
(2
)
$
120
$
12
$
286
Add back (subtract):
Income tax expense
-
-
75
1
174
Interest expense
170
149
135
460
356
Investment and other income, net
(67
)
(32
)
(211
)
(101
)
(410
)
Pension settlement costs
-
-
50
-
50
Operating income
114
115
169
372
456
Depreciation and amortization
356
354
296
1,040
870
EBITDA
$
470
$
469
$
465
$
1,412
$
1,326
Add back:
Pension/OPEB expense
$
9
$
11
$
13
$
31
$
50
Restructuring costs and other charges
(1)
16
24
4
48
88
Rebranding costs
-
-
7
-
26
Stock-based compensation
30
27
19
81
54
Storm-related costs
1
2
-
6
-
Legal settlements
-
-
-
-
8
Adjusted EBITDA
$
526
$
533
$
508
$
1,578
$
1,552
EBITDA margin
32.7
%
32.4
%
32.2
%
32.6
%
30.5
%
Adjusted EBITDA margin
36.6
%
36.8
%
35.2
%
36.5
%
35.7
%
Free Cash
Flow
Net cash provided from
operating activities
$
383
$
276
$
284
$
1,048
$
1,041
Capital expenditures
(671
)
(1,057
)
(772
)
(2,882
)
(1,860
)
Operating free cash flow
$
(288
)
$
(781
)
$
(488
)
$
(1,834
)
$
(819
)
(1) Includes $44 million of lease
impairment charges for the nine months ended September 30,
2022.
SCHEDULE B
Frontier Communications
Parent, Inc.
Unaudited Consolidated
Financial Data
Reconciliation of Non-GAAP
Financial Measures
For the three months
ended
For the nine months
ended
September 30,
June 30,
September 30,
September 30,
September 30,
($ in
millions)
2023
2023
2022
2023
2022
Adjusted Operating
Expenses
Total operating expenses
$
1,322
$
1,334
$
1,275
$
3,953
$
3,894
Subtract:
Depreciation and amortization
356
354
296
1,040
870
Pension/OPEB expense
9
11
13
31
50
Restructuring costs and other charges
(1)
16
24
4
48
88
Rebranding costs
-
-
7
-
26
Stock-based compensation
30
27
19
81
54
Storm-related costs
1
2
-
6
-
Legal settlements
-
-
-
-
8
Adjusted operating expenses
$
910
$
916
$
936
$
2,747
$
2,798
(1) Includes $44 million of lease
impairment charges for the nine months ended September 30,
2022.
SCHEDULE C
Frontier Communications
Parent, Inc.
Selected Financial and
Operating Data
(Unaudited)
As of or for the quarter
ended
For the nine months
ended
September 30, 2023
June 30, 2023
September 30, 2022
September 30, 2023
September 30, 2022
Broadband Revenue
($ in millions)
Total Company
Fiber
$
377
$
356
$
312
$
1,067
$
900
Copper
169
173
195
515
587
Total
$
546
$
529
$
507
$
1,582
$
1,487
Estimated Fiber
Passings (in millions)
Base Fiber Passings
3.2
3.2
3.2
Total Fiber Passings
6.2
5.8
4.8
Estimated
Broadband Fiber % Penetration
Base Fiber Penetration
43.9
%
43.4
%
42.9
%
Total Fiber Penetration
31.2
%
31.6
%
33.6
%
Broadband
Customers, end of period (in thousands)
Consumer
Fiber
1,797
1,722
1,502
Copper
870
928
1,105
Total
2,667
2,650
2,607
Business (1)
Fiber
117
113
104
Copper
97
102
120
Total
214
215
224
Broadband Net
Adds (in thousands)
Consumer
Fiber
75
63
64
Copper
(58
)
(59
)
(58
)
Total
17
4
6
Business (1)
Fiber
4
3
2
Copper
(5
)
(5
)
(4
)
Total
(1
)
(2
)
(2
)
Broadband
Churn
Consumer
Fiber
1.47
%
1.41
%
1.60
%
1.36
%
1.41
%
Copper
2.18
%
1.84
%
2.02
%
1.91
%
1.76
%
Total
1.72
%
1.57
%
1.79
%
1.56
%
1.57
%
Business (1)
Fiber
1.26
%
1.31
%
1.36
%
1.34
%
1.29
%
Copper
1.84
%
1.83
%
1.82
%
1.89
%
1.68
%
Total
1.53
%
1.56
%
1.61
%
1.61
%
1.51
%
Broadband
ARPU
Consumer
Fiber
$
64.49
$
63.12
$
62.97
$
63.10
$
62.84
Copper
54.62
51.90
49.65
51.81
47.93
Total
$
61.15
$
59.06
$
57.17
$
58.99
$
56.04
Business (1)
Fiber
$
101.36
$
102.89
$
107.28
$
102.84
$
106.84
Copper
66.87
68.20
65.26
67.38
64.41
Total
$
85.33
$
85.57
$
84.49
$
85.61
$
83.16
Reconciliation:
Broadband ARPU
Consumer Fiber Broadband ARPU
$
64.49
$
63.12
$
62.97
$
63.10
$
62.84
Gift card impact
0.16
1.34
1.66
1.06
1.38
Adjusted Consumer Fiber Broadband
ARPU
$
64.65
$
64.46
$
64.63
$
64.16
$
64.22
(1) Business customers include our small,
medium business and larger enterprise (SME) customers. Wholesale
customers are excluded.
_____________________________ 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 income. 2 Adjusted EBITDA
and Adjusted EBITDA margin are non-GAAP measures of performance.
See “Non-GAAP Measures” for a description of these measures and
their calculation. See Schedule A for a reconciliation of Adjusted
EBITDA to net income. 3 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. 4 The operational and financial guidance
expectations for 2023 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.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20231101662028/en/
Investors Spencer Kurn SVP, Investor Relations +1
401-225-0475 spencer.kurn@ftr.com
Media Chrissy Murray VP, Corporate Communications +1
504-952-4225 chrissy.murray@ftr.com
Frontier Communications ... (NASDAQ:FYBR)
Historical Stock Chart
From May 2024 to Jun 2024
Frontier Communications ... (NASDAQ:FYBR)
Historical Stock Chart
From Jun 2023 to Jun 2024