Frontier Reports Third-Quarter 2024 Results
Third-Quarter 2024 Highlights
- Added 381,000 fiber passings to reach 7.6 million total locations passed with fiber
- Added 108,000 fiber broadband customers, resulting in fiber broadband customer growth of 19.3% year-over-year
-
Consumer fiber broadband ARPU of
$65.40 , up 1.4% year-over-year -
Revenue of
$1.49 billion increased 3.7% year-over-year as growth in fiber-based products was partly offset by declines in copper-based products -
Operating income of
$86 million and net loss of$82 million -
Adjusted EBITDA of
$549 million increased 4.4% year-over-year driven by revenue growth and lower costs of service that were partly offset by higher customer acquisition costs1 -
Total cash capital expenditures of
$699 million -
Generated net cash from operations of
$618 million
Third-Quarter 2024 Consumer Results
-
Consumer revenue of
$789 million increased 0.3% year-over-year as growth in fiber was partly offset by declines in copper -
Consumer fiber revenue of
$537 million increased 12.1% year-over-year as growth in broadband was partly offset by declines in video and voice -
Consumer fiber broadband revenue of
$414 million increased 21.8% year-over-year driven by growth in both fiber broadband customers and ARPU - Consumer fiber broadband customer net additions of 104,000 resulted in consumer fiber broadband customer growth of 20.0% year-over-year
- Consumer fiber broadband customer churn of 1.49% compared to 1.47% in the third quarter of 2023
Third-Quarter 2024 Business and Wholesale Results
-
Business and Wholesale revenue of
$682 million increased 7.6% year-over-year as growth in fiber was partly offset by declines in copper -
Business and Wholesale fiber revenue of
$330 million increased 17.4% year-over-year driven by growth in data and internet services - Business and Wholesale fiber broadband customer net additions of 4,000 resulted in Business and Wholesale fiber broadband customer growth of 9.5% year-over-year
- Business and Wholesale fiber broadband customer churn of 1.50% compared to 1.24% in the third quarter of 20232
-
Business and Wholesale fiber broadband ARPU of
$98.71 increased 0.2% year-over-year2
Capital Structure
As of
Pending Acquisition by Verizon
As previously announced, on
The transaction is expected to close by the first quarter of 2026, subject to receipt of requisite approval from Frontier’s stockholders and certain required regulatory approvals, and the satisfaction or waiver of the other conditions to the transaction described in the merger agreement.
Due to the pending transaction, Frontier will not host a conference call to review the third quarter or provide a financial outlook.
1 Adjusted EBITDA is a non-GAAP measure of performance. See “Non-GAAP Measures” for a description of this measure and its calculation. See Schedule A for a reconciliation of Adjusted EBITDA to net loss.
2 Business and Wholesale churn and ARPU methodologies exclude circuits or fiber-to-the-tower churn.
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.
About Frontier
Non-GAAP Financial Measures
Frontier uses certain non-GAAP financial measures in evaluating its performance, including EBITDA, EBITDA margin, Adjusted EBITDA, Adjusted EBITDA margin, operating free cash flow, adjusted operating expenses, and net leverage ratio, each of which is described below. Management uses these non-GAAP financial measures internally to (i) assist in analyzing Frontier's underlying financial performance from period to period, (ii) analyze and evaluate strategic and operational decisions, (iii) establish criteria for compensation decisions, and (iv) assist in the understanding of Frontier's ability to generate cash flow and, as a result, to plan for future capital and operational decisions. Management believes that the presentation of these non-GAAP financial measures provides useful information to investors regarding Frontier’s financial condition and results of operations because these measures, when used in conjunction with related GAAP financial measures, (i) provide a more comprehensive view of Frontier’s core operations and ability to generate cash flow, (ii) provide investors with the financial analytical framework upon which management bases financial, operational, compensation, and planning decisions, and (iii) present measurements that investors and rating agencies have indicated to management are useful to them in assessing Frontier and its results of operations.
A reconciliation of these measures to the most comparable financial measures calculated and presented in accordance with GAAP is included in the accompanying tables. These non-GAAP financial measures are not measures of financial performance or liquidity under GAAP, nor are they alternatives to GAAP measures, and they may not be comparable to similarly titled measures of other companies.
EBITDA is defined as net income (loss) less income tax expense (benefit), interest expense, investment and other income (loss), pension settlement costs, reorganization items, and depreciation and amortization. EBITDA margin is calculated by dividing EBITDA by total revenue.
Adjusted EBITDA is defined as EBITDA, as described above, adjusted to exclude certain pension/OPEB expenses, restructuring costs and other charges, stock-based compensation, and certain other non-recurring items. Adjusted EBITDA margin is calculated by dividing Adjusted EBITDA by total revenue.
Management uses EBITDA, EBITDA margin, Adjusted EBITDA and Adjusted EBITDA margin to assist it in comparing performance from period to period and as measures of operational performance. Management believes that these non-GAAP measures provide useful information for investors in evaluating Frontier’s operational performance from period to period because they exclude depreciation and amortization expenses related to investments made in prior periods and are determined without regard to capital structure or investment activities. By excluding capital expenditures, debt repayments and dividends, among other factors, these non-GAAP financial measures have certain shortcomings. Management compensates for these shortcomings by utilizing these non-GAAP financial measures in conjunction with the comparable GAAP financial measures.
Management defines operating free cash flow as net cash provided from operating activities less capital expenditures, less payments on vendor financing related to capital expenditures. Management uses operating free cash flow to assist it in comparing liquidity from period to period and to obtain a more comprehensive view of Frontier’s core operations and ability to generate cash flow. Management believes that this non-GAAP measure is useful to investors in evaluating cash available to service debt and pay dividends. This non-GAAP financial measure has certain shortcomings; it does not represent the residual cash flow available for discretionary expenditures, as items such as debt repayments are not deducted in determining such measure. Management compensates for these shortcomings by utilizing this non-GAAP financial measure in conjunction with the comparable GAAP financial measure.
Adjusted operating expenses is defined as operating expenses adjusted to exclude depreciation and amortization, restructuring and other charges, certain pension/OPEB expenses, stock-based compensation, and certain other non-recurring items. Investors have indicated that this non-GAAP measure is useful in evaluating Frontier’s performance.
Net leverage ratio is calculated as net debt (total debt less cash and cash equivalents and short-term investments) divided by Adjusted EBITDA for the most recent four quarters. Investors have indicated that this non-GAAP measure is useful in evaluating Frontier’s debt levels.
The information in this press release should be read in conjunction with the financial statements and footnotes contained in Frontier’s documents filed with the
Forward-Looking Statements
This release contains "forward-looking statements" related to future events. Forward-looking statements address our expectations or beliefs concerning future events, including, without limitation, future operating and financial performance, our ability to implement our growth strategy our ability to comply with the covenants in the agreements governing our indebtedness, our capital expenditures, and other matters. These statements are made on the basis of management’s views and assumptions, as of the time the statements are made, regarding future events and performance and contain words such as “expect,” “anticipate,” “intend,” “plan,” “believe,” “seek,” “see,” “may,” “will,” “would,” or “target.” Forward-looking statements by their nature address matters that are, to different degrees, uncertain. A wide range of factors could materially affect future developments and performance, including but not limited to: our significant indebtedness, our ability to incur substantially more debt in the future, and covenants in the agreements governing our current indebtedness that may reduce our operating and financial flexibility; declines in Adjusted EBITDA and revenue relative to historical levels that we are unable to offset; economic uncertainty, volatility in financial markets, and rising interest rates could limit our ability to access capital or increase the cost of capital needed to fund business operations, including our fiber expansion plans; our ability to successfully implement strategic initiatives, including our fiber buildout and other initiatives to enhance revenue and realize productivity improvements; our ability to secure necessary construction resources, materials and permits for our fiber buildout initiative in a timely and cost-effective manner; inflationary pressures on costs, including tight labor markets, increased fuel and electricity costs and potential disruptions in our supply chain, which could adversely impact our financial condition or results of operations and hinder our fiber expansion plans; our ability to effectively manage our operations, operating expenses, capital expenditures, debt service requirements and cash paid for income taxes and liquidity; the impact of potential information technology or data security breaches or other cyber-attacks or other disruptions; the impact of laws and regulations relating to the handling of privacy and data protection; competition from cable, wireless carriers, satellite providers, wireline carriers, fiber “overbuilders” and over the top companies, and the risk that we will not respond on a timely or profitable basis; our ability to successfully adjust to changes in the communications industry, including the effects of technological changes and competition on our capital expenditures, products and service offerings; our ability to retain or attract new customers and to maintain relationships with existing customers, including wholesale customers; our reliance on a limited number of key supplies and vendors; declines in revenue from our voice services, switched and nonswitched access and video and data services that we cannot stabilize or offset with increases in revenue from other products and services; our ability to secure, continue to use or renew intellectual property and other licenses used in our business; our ability to hire or retain key personnel; our ability to dispose of certain assets or asset groups or to make acquisition of certain assets on terms that are attractive to us, or at all; the effects of changes in the availability of federal and state universal service funding or other subsidies to us and our competitors and our ability to obtain future subsidies; our ability to comply with the applicable
Participants in the Solicitation
Frontier and Frontier’s directors, executive officers and other members of management and employees, under
Important Additional Information and Where to Find It
This communication may be deemed to be solicitation material in respect of the proposed acquisition of Frontier by Verizon. In connection with the proposed transaction, on
No Offer or Solicitation
This communication is not intended to and shall not constitute an offer to buy or sell or the solicitation of an offer to buy or sell any securities, or a solicitation of any vote or approval, nor shall there be any offer, solicitation or sale of securities in any jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such jurisdiction. No offer of securities shall be made in
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Unaudited Financial Data |
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For the |
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For the |
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For the |
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three months ended |
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three months ended |
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three months ended |
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($ in millions and shares in thousands, except per share amounts) |
|
2024 |
|
2024 |
|
|
2023 |
|||
|
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|
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|
|||||
Statements of Operations Data |
|
|
|
|
|
|
|
|
|
|
Revenue |
|
$ |
1,489 |
|
$ |
1,480 |
|
|
$ |
1,436 |
|
|
|
|
|
|
|
|
|
|
|
Operating expenses: |
|
|
|
|
|
|
|
|
|
|
Cost of service |
|
|
538 |
|
|
516 |
|
|
|
545 |
Selling, general, and administrative expenses |
|
|
427 |
|
|
449 |
|
|
|
405 |
Depreciation and amortization |
|
|
410 |
|
|
398 |
|
|
|
356 |
Restructuring costs and other charges |
|
|
28 |
|
|
26 |
|
|
|
16 |
Total operating expenses |
|
|
1,403 |
|
|
1,389 |
|
|
|
1,322 |
|
|
|
|
|
|
|
|
|
|
|
Operating income |
|
|
86 |
|
|
91 |
|
|
|
114 |
|
|
|
|
|
|
|
|
|
|
|
Investment and other income (loss), net |
|
|
29 |
|
|
(24) |
|
|
|
67 |
Interest expense |
|
|
(203) |
|
|
(199) |
|
|
|
(170) |
|
|
|
|
|
|
|
|
|
|
|
Income (loss) before income taxes |
|
|
(88) |
|
|
(132) |
|
|
|
11 |
Income tax benefit |
|
|
(6) |
|
|
(9) |
|
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|
- |
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|
|
|
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|
|
|
|
|
Net income (loss) |
|
$ |
(82) |
|
$ |
(123) |
|
|
$ |
11 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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|
|
|
Weighted average shares outstanding - basic |
|
|
248,986 |
|
|
248,754 |
|
|
|
245,761 |
Weighted average shares outstanding - diluted |
|
|
248,986 |
|
|
248,754 |
|
|
|
247,447 |
|
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|
|
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Basic net earnings (loss) per common share |
|
$ |
(0.33) |
|
$ |
(0.49) |
|
|
$ |
0.05 |
Diluted net earnings (loss) per common share |
|
$ |
(0.33) |
|
$ |
(0.49) |
|
|
$ |
0.05 |
|
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Other Financial Data: |
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Capital expenditures |
|
$ |
699 |
|
$ |
626 |
|
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$ |
671 |
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|||||||
Unaudited Financial Data |
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For the |
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For the |
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nine months ended |
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nine months ended |
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($ in millions and shares in thousands, except per share amounts) |
2024 |
|
2023 |
||||
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Statements of Income Data |
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Revenue |
|
$ |
4,431 |
|
$ |
4,325 |
|
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|
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|
|
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Operating expenses: |
|
|
|
|
|
|
|
Cost of service |
|
|
1,576 |
|
|
1,615 |
|
Selling, general, and administrative expenses |
|
|
1,304 |
|
|
1,250 |
|
Depreciation and amortization |
|
|
1,196 |
|
|
1,040 |
|
Restructuring costs and other charges |
|
|
88 |
|
|
48 |
|
Total operating expenses |
|
|
4,164 |
|
|
3,953 |
|
|
|
|
|
|
|
|
|
Operating income |
|
|
267 |
|
|
372 |
|
|
|
|
|
|
|
|
|
Investment and other income, net |
|
|
117 |
|
|
101 |
|
Interest expense |
|
|
(601) |
|
|
(460) |
|
|
|
|
|
|
|
|
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Income (loss) before income taxes |
|
|
(217) |
|
|
13 |
|
Income tax expense (benefit) |
|
|
(13) |
|
|
1 |
|
Net income (loss) |
|
$ |
(204) |
|
$ |
12 |
|
|
|
|
|
|
|
|
|
Weighted average shares outstanding - basic |
|
|
247,866 |
|
|
245,431 |
|
Weighted average shares outstanding - diluted |
|
|
247,866 |
|
|
247,336 |
|
|
|
|
|
|
|
|
|
Basic net earnings (loss) per common share |
|
$ |
(0.82) |
|
$ |
0.05 |
|
Diluted net earnings (loss) per common share |
|
$ |
(0.82) |
|
$ |
0.05 |
|
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Other Financial Data: |
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|
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Capital expenditures |
|
$ |
1,991 |
|
$ |
2,882 |
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Unaudited Financial Data |
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For the quarter ended |
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($ in millions) |
|
2024 |
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2024 |
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2023 |
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||||
Selected Statement of Income Data |
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Revenue: |
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Data and Internet services |
|
$ |
1,004 |
|
|
$ |
983 |
|
|
|
$ |
895 |
|
Voice services |
|
|
301 |
|
|
|
312 |
|
|
|
|
341 |
|
Video services |
|
|
83 |
|
|
|
88 |
|
|
|
|
104 |
|
Other |
|
|
83 |
|
|
|
83 |
|
|
|
|
81 |
|
Revenue from contracts with customers |
|
|
1,471 |
|
|
|
1,466 |
|
|
|
|
1,421 |
|
Subsidy and other revenue |
|
|
18 |
|
|
|
14 |
|
|
|
|
15 |
|
Total revenue |
|
$ |
1,489 |
|
|
$ |
1,480 |
|
|
|
$ |
1,436 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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Other Financial Data |
|
|
|
|
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|
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|
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Revenue: |
|
|
|
|
|
|
|
|
|
|
|
|
|
Consumer |
|
$ |
789 |
|
|
$ |
789 |
|
|
|
$ |
787 |
|
Business and wholesale |
|
|
682 |
|
|
|
677 |
|
|
|
|
634 |
|
Revenue from contracts with customers |
|
$ |
1,471 |
|
|
$ |
1,466 |
|
|
|
$ |
1,421 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Fiber |
|
$ |
867 |
|
|
$ |
840 |
|
|
|
$ |
760 |
|
Copper |
|
|
604 |
|
|
|
626 |
|
|
|
|
661 |
|
Revenue from contracts with customers |
|
$ |
1,471 |
|
|
$ |
1,466 |
|
|
|
$ |
1,421 |
|
|
|
|
|
|
|
|
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|
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For the nine months ended |
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For the nine months ended |
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||||
($ in millions) |
|
2024 |
|
|
2023 |
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||||
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|
|
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|
|
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Selected Statement of Income Data |
|
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|
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Revenue: |
|
|
|
|
|
|
|
|
|
|
|
|
|
Data and Internet services |
|
$ |
2,934 |
|
|
$ |
2,637 |
|
|
|
|
|
|
Voice services |
|
|
934 |
|
|
|
1,044 |
|
|
|
|
|
|
Video services |
|
|
265 |
|
|
|
333 |
|
|
|
|
|
|
Other |
|
|
250 |
|
|
|
253 |
|
|
|
|
|
|
Revenue from contracts with customers |
|
|
4,383 |
|
|
|
4,267 |
|
|
|
|
|
|
Subsidy and other revenue |
|
|
48 |
|
|
|
58 |
|
|
|
|
|
|
Total revenue |
|
$ |
4,431 |
|
|
$ |
4,325 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other Financial Data |
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenue: |
|
|
|
|
|
|
|
|
|
|
|
|
|
Consumer |
|
$ |
2,365 |
|
|
$ |
2,323 |
|
|
|
|
|
|
Business and wholesale |
|
|
2,018 |
|
|
|
1,944 |
|
|
|
|
|
|
Revenue from contracts with customers |
|
$ |
4,383 |
|
|
$ |
4,267 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Fiber |
|
$ |
2,512 |
|
|
$ |
2,235 |
|
|
|
|
|
|
Copper |
|
|
1,871 |
|
|
|
2,032 |
|
|
|
|
|
|
Revenue from contracts with customers |
|
$ |
4,383 |
|
|
$ |
4,267 |
|
|
|
|
|
|
|
|
|
|
|
|
|
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|
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|||||
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|||||||||||||||
Unaudited Operating Data |
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|||||
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As of and for the three months ended |
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For the nine months ended |
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Broadband customer metrics (1) |
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|
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|
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|||||
Broadband customers (in thousands) |
|
|
3,057 |
|
|
3,010 |
|
|
2,913 |
|
|
3,057 |
|
|
2,913 |
Net customer additions |
|
|
47 |
|
|
36 |
|
|
15 |
|
|
114 |
|
|
45 |
|
|
|
|
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|
|
|
|
|
|
|||||
Consumer customer metrics |
|
|
|
|
|
|
|
|
|
|
|||||
Customers (in thousands) |
|
|
3,176 |
|
|
3,154 |
|
|
3,118 |
|
|
3,176 |
|
|
3,118 |
Net customer additions (losses) |
|
|
22 |
|
|
14 |
|
|
(9) |
|
|
47 |
|
|
(15) |
Average monthly consumer |
|
|
|
|
|
|
|
|
|
|
|||||
revenue per customer |
|
$ |
83.12 |
|
$ |
83.57 |
|
$ |
83.99 |
|
$ |
83.51 |
|
$ |
82.49 |
Customer monthly churn |
|
|
1.80% |
|
|
1.65% |
|
|
1.70% |
|
|
1.64% |
|
|
1.55% |
|
|
|
|
|
|
|
|
|
|
|
|||||
Employees |
|
|
12,950 |
|
|
12,960 |
|
|
13,756 |
|
|
12,950 |
|
|
13,756 |
|
|
|
|
|
|
|
|
|
|
|
|||||
|
|
|
|
|
|
|
|
|
|
|
|||||
(1) Amounts presented include related metrics for our wholesale customers. |
|||||||||||||||
|
|
|
|
|
|
|
|
|
|
||||||||
Condensed Consolidated Balance Sheet Data |
||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(Unaudited) |
|
|
|
|
||
($ in millions) |
|
|
|
|
|
|
||
|
|
|
|
|
|
|
|
|
ASSETS |
|
|
|
|
|
|
|
|
Current assets: |
|
|
|
|
|
|
|
|
Cash and cash equivalents |
|
$ |
1,320 |
|
|
|
$ |
1,125 |
Short-term investments |
|
|
- |
|
|
|
|
1,075 |
Accounts receivable, net |
|
|
419 |
|
|
|
|
446 |
Other current assets |
|
|
147 |
|
|
|
|
135 |
Total current assets |
|
|
1,886 |
|
|
|
|
2,781 |
|
|
|
|
|
|
|
|
|
Property, plant and equipment, net |
|
|
15,226 |
|
|
|
|
13,933 |
Other assets |
|
|
3,747 |
|
|
|
|
3,979 |
Total assets |
|
$ |
20,859 |
|
|
|
$ |
20,693 |
|
|
|
|
|
|
|
|
|
LIABILITIES AND EQUITY |
|
|
|
|
|
|
|
|
Current liabilities: |
|
|
|
|
|
|
|
|
Long-term debt due within one year |
|
$ |
10 |
|
|
|
$ |
15 |
Accounts payable and other current liabilities |
|
|
2,443 |
|
|
|
|
2,260 |
Total current liabilities |
|
|
2,453 |
|
|
|
|
2,275 |
|
|
|
|
|
|
|
|
|
Deferred income taxes and other liabilities |
|
|
1,784 |
|
|
|
|
1,893 |
Long-term debt |
|
|
11,556 |
|
|
|
|
11,246 |
Equity |
|
|
5,066 |
|
|
|
|
5,279 |
Total liabilities and equity |
|
$ |
20,859 |
|
|
|
$ |
20,693 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
As of |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Leverage Ratio |
|
|
|
|
|
|
|
|
Numerator: |
|
|
|
|
|
|
|
|
Long-term debt due within one year |
|
$ |
10 |
|
|
|
|
|
Long-term debt |
|
|
11,556 |
|
|
|
|
|
Total debt |
|
$ |
11,566 |
|
|
|
|
|
Less: Cash and cash equivalents |
|
|
(1,320) |
|
|
|
|
|
Net debt |
|
$ |
10,246 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Denominator: |
|
|
|
|
|
|
|
|
Adjusted EBITDA - last 4 quarters |
|
$ |
2,205 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net Leverage Ratio |
|
|
4.6x |
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Unaudited Consolidated Cash Flow Data |
||||||
|
|
|
||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||
|
|
For the three months ended |
||||
|
|
|
|
|
||
($ in millions) |
|
|
|
|
||
|
|
|
|
|
|
|
Cash flows provided from (used by) operating activities: |
|
|
|
|
|
|
Net income (loss) |
|
$ |
(82) |
|
$ |
11 |
Adjustments to reconcile net loss to net cash provided from |
|
|
|
|
|
|
(used by) operating activities: |
|
|
|
|
|
|
Depreciation and amortization |
|
|
410 |
|
|
356 |
Pension/OPEB special termination benefit enhancements |
|
|
1 |
|
|
- |
Stock-based compensation |
|
|
17 |
|
|
30 |
Amortization of premium |
|
|
(5) |
|
|
(6) |
Bad debt expense |
|
|
10 |
|
|
8 |
Other adjustments |
|
|
3 |
|
|
7 |
Deferred income taxes |
|
|
(8) |
|
|
(1) |
Change in accounts receivable |
|
|
5 |
|
|
(26) |
Change in long-term pension and other postretirement liabilities |
|
|
(38) |
|
|
(98) |
Change in accounts payable and other liabilities |
|
|
316 |
|
|
113 |
Change in prepaid expenses, income taxes, and other assets |
|
|
(11) |
|
|
(11) |
Net cash provided from operating activities |
|
|
618 |
|
|
383 |
|
|
|
|
|
|
|
Cash flows provided from (used by) investing activities: |
|
|
|
|
|
|
Capital expenditures |
|
|
(699) |
|
|
(671) |
Purchases of short-term investments (1) |
|
|
- |
|
|
(1,275) |
Sale of short-term investments (1) |
|
|
- |
|
|
575 |
Purchases of long-term investments |
|
|
- |
|
|
(63) |
Proceeds from sale of asset |
|
|
8 |
|
|
14 |
Other |
|
|
- |
|
|
1 |
Net cash used by investing activities |
|
|
(691) |
|
|
(1,419) |
|
|
|
|
|
|
|
Cash flows provided from (used by) financing activities: |
|
|
|
|
|
|
Long-term debt payments |
|
|
(403) |
|
|
(56) |
Proceeds from long-term debt borrowings |
|
|
750 |
|
|
1,528 |
Premium paid to retire debt |
|
|
- |
|
|
(10) |
Financing costs paid |
|
|
(29) |
|
|
(43) |
Finance lease obligation payments |
|
|
(8) |
|
|
(6) |
Proceeds from sale and lease-back transactions |
|
|
- |
|
|
21 |
Taxes paid on behalf of employees for shares withheld |
|
|
- |
|
|
(2) |
Other |
|
|
(3) |
|
|
(4) |
Net cash provided from financing activities |
|
|
307 |
|
|
1,428 |
|
|
|
|
|
|
|
Increase in cash, cash equivalents, and restricted cash |
|
|
234 |
|
|
392 |
Cash, cash equivalents, and restricted cash at the beginning of the period |
|
|
1,246 |
|
|
662 |
|
|
|
|
|
|
|
Cash, cash equivalents, and restricted cash at the end of the period |
|
$ |
1,480 |
|
$ |
1,054 |
|
|
|
|
|
|
|
Supplemental cash flow information: |
|
|
|
|
|
|
Cash paid during the period for: |
|
|
|
|
|
|
Interest |
|
$ |
153 |
|
$ |
135 |
Income tax payments (refunds), net |
|
$ |
1 |
|
$ |
- |
|
|
|
|
|
|
|
|
|
|
|
|
|
- |
(1) Amounts represent cash movement to/from short-term investments. Given the long-term nature of the fiber build, we have invested cash in short-term investments to improve interest income while preserving funding flexibility. |
||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Unaudited Consolidated Cash Flow Data |
||||||
|
|
|
||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||
|
|
For the nine months ended |
||||
|
|
|
|
|
||
($ in millions) |
|
|
|
|
||
|
|
|
|
|
|
|
Cash flows provided from (used by) operating activities: |
|
|
|
|
|
|
Net income (loss) |
|
$ |
(204) |
|
$ |
12 |
Adjustments to reconcile net loss to net cash provided from |
|
|
|
|
|
|
(used by) operating activities: |
|
|
|
|
|
|
Depreciation and amortization |
|
|
1,196 |
|
|
1,040 |
Pension/OPEB special termination benefit enhancements |
|
|
11 |
|
|
- |
Stock-based compensation |
|
|
54 |
|
|
81 |
Amortization of premium |
|
|
(15) |
|
|
(21) |
Bad debt expense |
|
|
30 |
|
|
24 |
Other adjustments |
|
|
10 |
|
|
9 |
Deferred income taxes |
|
|
(18) |
|
|
(1) |
Change in accounts receivable |
|
|
(3) |
|
|
(35) |
Change in long-term pension and other postretirement liabilities |
|
|
(156) |
|
|
(149) |
Change in accounts payable and other liabilities |
|
|
392 |
|
|
101 |
Change in prepaid expenses, income taxes, and other assets |
|
|
30 |
|
|
(13) |
Net cash provided from operating activities |
|
|
1,327 |
|
|
1,048 |
|
|
|
|
|
|
|
Cash flows provided from (used by) investing activities: |
|
|
|
|
|
|
Capital expenditures |
|
|
(1,991) |
|
|
(2,882) |
Purchases of short-term investments (1) |
|
|
- |
|
|
(1,850) |
Sale of short-term investments (1) |
|
|
1,075 |
|
|
2,325 |
Purchases of long-term investments |
|
|
- |
|
|
(63) |
Proceeds on sale of assets |
|
|
12 |
|
|
18 |
Other |
|
|
6 |
|
|
1 |
Net cash used by investing activities |
|
|
(898) |
|
|
(2,451) |
|
|
|
|
|
|
|
Cash flows provided from (used by) financing activities: |
|
|
|
|
|
|
Long-term debt payments |
|
|
(410) |
|
|
(64) |
Proceeds from long-term debt borrowings |
|
|
750 |
|
|
2,278 |
Payments of vendor financing |
|
|
(415) |
|
|
- |
Premium paid to retire debt |
|
|
- |
|
|
(10) |
Proceeds from financing lease transactions |
|
|
- |
|
|
(56) |
Financing costs paid |
|
|
(29) |
|
|
21 |
Finance lease obligation payments |
|
|
(23) |
|
|
(18) |
Taxes paid on behalf of employees for shares withheld |
|
|
(49) |
|
|
(9) |
Other |
|
|
(12) |
|
|
(7) |
Net cash provided from (used by) financing activities |
|
|
(188) |
|
|
2,135 |
|
|
|
|
|
|
|
Increase in cash, cash equivalents, and restricted cash |
|
|
241 |
|
|
732 |
Cash, cash equivalents, and restricted cash at the beginning of the period |
|
|
1,239 |
|
|
322 |
|
|
|
|
|
|
|
Cash, cash equivalents, and restricted cash at the end of the period |
|
$ |
1,480 |
|
$ |
1,054 |
|
|
|
|
|
|
|
Supplemental cash flow information: |
|
|
|
|
|
|
Cash paid during the period for: |
|
|
|
|
|
|
Interest |
|
$ |
565 |
|
$ |
449 |
Income tax (refund) payments, net |
|
$ |
(8) |
|
$ |
1 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) Amounts represent cash movement to/from short-term investments. Given the long-term nature of the fiber build, we have invested cash in short-term investments to improve interest income while preserving funding flexibility. |
||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
SCHEDULE A |
||||||||||||||||
|
||||||||||||||||
Unaudited Financial Data |
||||||||||||||||
Reconciliation of Non-GAAP Financial Measures |
||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For the three months ended |
|
For the nine months ended |
|||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||
($ in millions) |
|
|
2024 |
|
2024 |
|
2023 |
|
2024 |
|
2023 |
|||||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income (loss) |
|
|
$ |
(82) |
|
$ |
(123) |
|
$ |
11 |
|
$ |
(204) |
|
$ |
12 |
Add back (subtract): |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income tax expense (benefit) |
|
|
|
(6) |
|
|
(9) |
|
|
- |
|
|
(13) |
|
|
1 |
Interest expense |
|
|
|
203 |
|
|
199 |
|
|
170 |
|
|
601 |
|
|
460 |
Investment and other (income) loss, net |
|
|
|
(29) |
|
|
24 |
|
|
(67) |
|
|
(117) |
|
|
(101) |
Operating income |
|
|
|
86 |
|
|
91 |
|
|
114 |
|
|
267 |
|
|
372 |
Depreciation and amortization |
|
|
|
410 |
|
|
398 |
|
|
356 |
|
|
1,196 |
|
|
1,040 |
EBITDA |
|
|
$ |
496 |
|
$ |
489 |
|
$ |
470 |
|
$ |
1,463 |
|
$ |
1,412 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Add back: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Pension/OPEB expense |
|
|
$ |
8 |
|
$ |
9 |
|
$ |
9 |
|
$ |
26 |
|
$ |
31 |
Restructuring costs and other charges |
|
|
|
28 |
|
|
26 |
|
|
16 |
|
|
88 |
|
|
48 |
Stock-based compensation |
|
|
|
17 |
|
|
11 |
|
|
30 |
|
|
54 |
|
|
81 |
Storm-related costs |
|
|
|
- |
|
|
- |
|
|
1 |
|
|
- |
|
|
6 |
Legal settlement |
|
|
|
- |
|
|
25 |
|
|
- |
|
|
25 |
|
|
- |
Adjusted EBITDA |
|
|
$ |
549 |
|
$ |
560 |
|
$ |
526 |
|
$ |
1,656 |
|
$ |
1,578 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
EBITDA margin |
|
|
|
33.3% |
|
|
33.0% |
|
|
32.7% |
|
|
33.0% |
|
|
32.6% |
Adjusted EBITDA margin |
|
|
|
36.9% |
|
|
37.8% |
|
|
36.6% |
|
|
37.4% |
|
|
36.5% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Free Cash Flow |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net cash provided from |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
operating activities |
|
|
$ |
618 |
|
$ |
374 |
|
$ |
383 |
|
$ |
1,327 |
|
$ |
1,048 |
Capital expenditures |
|
|
|
(699) |
|
|
(626) |
|
|
(671) |
|
|
(1,991) |
|
|
(2,882) |
Payment of vendor financing- capital |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
expenditures |
|
|
|
- |
|
|
(52) |
|
|
- |
|
|
(415) |
|
|
- |
Operating free cash flow |
|
|
$ |
(81) |
|
$ |
(304) |
|
$ |
(288) |
|
$ |
(1,079) |
|
$ |
(1,834) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
SCHEDULE B |
|||||||||||||||
|
|||||||||||||||
Unaudited Consolidated Financial Data |
|||||||||||||||
Reconciliation of Non-GAAP Financial Measures |
|||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For the three months ended |
|
For the nine months ended |
|||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||
($ in millions) |
|
2024 |
|
2024 |
|
2023 |
|
2024 |
|
2023 |
|||||
Adjusted Operating Expenses |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total operating expenses |
|
$ |
1,403 |
|
$ |
1,389 |
|
$ |
1,322 |
|
$ |
4,164 |
|
$ |
3,953 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Subtract: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Depreciation and amortization |
|
|
410 |
|
|
398 |
|
|
356 |
|
|
1,196 |
|
|
1,040 |
Pension/OPEB expense |
|
|
8 |
|
|
9 |
|
|
9 |
|
|
26 |
|
|
31 |
Restructuring costs and other charges |
|
|
28 |
|
|
26 |
|
|
16 |
|
|
88 |
|
|
48 |
Stock-based compensation |
|
|
17 |
|
|
11 |
|
|
30 |
|
|
54 |
|
|
81 |
Storm-related costs |
|
|
- |
|
|
- |
|
|
1 |
|
|
- |
|
|
6 |
Legal settlement |
|
|
- |
|
|
25 |
|
|
- |
|
|
25 |
|
|
- |
Adjusted operating expenses |
|
$ |
940 |
|
$ |
920 |
|
$ |
910 |
|
$ |
2,775 |
|
$ |
2,747 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
SCHEDULE C |
||||||||||||||||||||
|
||||||||||||||||||||
Selected Financial and Operating Data (1) |
||||||||||||||||||||
(Unaudited) |
||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
As of or for the quarter ended |
|
|
For the nine months ended |
||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Broadband Revenue ($ in millions) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||
|
|
Fiber |
|
|
$ |
454 |
|
$ |
432 |
|
|
$ |
377 |
|
|
$ |
1,300 |
|
$ |
1,067 |
|
|
Copper |
|
|
|
141 |
|
|
151 |
|
|
|
169 |
|
|
|
447 |
|
|
515 |
|
|
Total |
|
|
$ |
595 |
|
$ |
583 |
|
|
$ |
546 |
|
|
$ |
1,747 |
|
$ |
1,582 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Estimated Fiber Passings (in millions) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||
|
Base Fiber Passings |
|
|
|
|
3.2 |
|
|
3.2 |
|
|
|
3.2 |
|
|
|
|
|
|
|
|
Total Fiber Passings |
|
|
|
|
7.6 |
|
|
7.2 |
|
|
|
6.2 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Estimated Broadband Fiber % Penetration |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||
|
Base Fiber Penetration |
|
|
|
|
45.7% |
|
|
45.3% |
|
|
|
43.9% |
|
|
|
|
|
|
|
|
Total Fiber Penetration |
|
|
|
|
30.2% |
|
|
30.4% |
|
|
|
31.2% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Broadband Customers, end of period (in thousands) |
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
|
Consumer |
Fiber |
|
|
|
2,157 |
|
|
2,053 |
|
|
|
1,797 |
|
|
|
|
|
|
|
|
|
Copper |
|
|
|
666 |
|
|
721 |
|
|
|
870 |
|
|
|
|
|
|
|
|
|
Total |
|
|
|
2,823 |
|
|
2,774 |
|
|
|
2,667 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Business + Wholesale (2) |
Fiber |
|
|
|
138 |
|
|
134 |
|
|
|
126 |
|
|
|
|
|
|
|
|
|
Copper |
|
|
|
96 |
|
|
102 |
|
|
|
120 |
|
|
|
|
|
|
|
|
|
Total |
|
|
|
234 |
|
|
236 |
|
|
|
246 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Broadband Net Adds (in thousands) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||
|
Consumer |
Fiber |
|
|
|
104 |
|
|
90 |
|
|
|
75 |
|
|
|
|
|
|
|
|
|
Copper |
|
|
|
(55) |
|
|
(50) |
|
|
|
(58) |
|
|
|
|
|
|
|
|
|
Total |
|
|
|
49 |
|
|
40 |
|
|
|
17 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Business + Wholesale (2) |
Fiber |
|
|
|
4 |
|
|
2 |
|
|
|
4 |
|
|
|
|
|
|
|
|
|
Copper |
|
|
|
(6) |
|
|
(6) |
|
|
|
(6) |
|
|
|
|
|
|
|
|
|
Total |
|
|
|
(2) |
|
|
(4) |
|
|
|
(2) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Broadband Churn |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||
|
Consumer |
Fiber |
|
|
|
1.49% |
|
|
1.40% |
|
|
|
1.47% |
|
|
|
1.38% |
|
|
1.36% |
|
|
Copper |
|
|
|
2.37% |
|
|
2.02% |
|
|
|
2.18% |
|
|
|
2.11% |
|
|
1.91% |
|
|
Total |
|
|
|
1.71% |
|
|
1.57% |
|
|
|
1.72% |
|
|
|
1.58% |
|
|
1.56% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Business + Wholesale (2) |
Fiber |
|
|
|
1.50% |
|
|
1.31% |
|
|
|
1.24% |
|
|
|
1.38% |
|
|
1.32% |
|
|
Copper |
|
|
|
2.05% |
|
|
1.99% |
|
|
|
1.68% |
|
|
|
2.01% |
|
|
1.75% |
|
|
Total |
|
|
|
1.73% |
|
|
1.61% |
|
|
|
1.46% |
|
|
|
1.66% |
|
|
1.54% |
Broadband ARPU |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||
|
Consumer |
Fiber |
|
|
$ |
65.40 |
|
$ |
65.32 |
|
|
$ |
64.49 |
|
|
$ |
65.41 |
|
$ |
63.10 |
|
|
Copper |
|
|
|
59.16 |
|
|
58.26 |
|
|
|
54.62 |
|
|
|
57.86 |
|
|
51.81 |
|
|
Total |
|
|
$ |
63.85 |
|
$ |
63.41 |
|
|
$ |
61.15 |
|
|
$ |
63.33 |
|
$ |
58.99 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Business + Wholesale (2) |
Fiber |
|
|
$ |
98.71 |
|
$ |
97.83 |
|
|
$ |
98.54 |
|
|
$ |
98.36 |
|
$ |
100.23 |
|
|
Copper |
|
|
|
64.98 |
|
|
63.83 |
|
|
|
59.87 |
|
|
|
63.26 |
|
|
60.56 |
|
|
Total |
|
|
$ |
84.52 |
|
$ |
85.57 |
|
|
$ |
79.35 |
|
|
$ |
82.86 |
|
$ |
79.76 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) Certain operational metrics, including passings, penetration, Base Fiber penetration, ARPU and churn are defined in the accompanying Trending Schedule available at Frontier's website https://investor.frontier.com. |
||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(2) Business + Wholesale customers include our small, medium business, larger enterprise (SME) customers and wholesale subscribers. |
View source version on businesswire.com: https://www.businesswire.com/news/home/20241105965514/en/
Investor Contact
SVP, Investor Relations
+1 401-225-0475
Media Contact
VP, Corporate Communications
+1 504-952-4225
Source: