EX-99.1 2 ef20033094_ex99-1.htm EXHIBIT 99.1

Exhibit 99.1


Frontier Reports Second-Quarter 2024 Results


Delivered accelerating revenue growth and continued strong EBITDA growth

Added record fiber broadband customers while growing ARPU

Set new industry standard with Net Promoter Score six times higher than closest cable competitor

Raised the low end of Adjusted EBITDA guidance following strong first half performance

DALLAS, Texas, August 2, 2024 -- Frontier Communications Parent, Inc. (NASDAQ: FYBR) (“Frontier”) reported second-quarter 2024 results today.

“We continued to see strong demand for our high-speed, reliable fiber internet which drove record fiber broadband net additions in the second quarter. As a result, we delivered our second successive quarter of year-over-year revenue growth and our fourth consecutive quarter of Adjusted EBITDA growth,” said Nick Jeffery, President and Chief Executive Officer of Frontier. “Growth in both customers and ARPU this quarter resulted in a 21% year-over-year increase in fiber broadband revenue and expanding Adjusted EBITDA margins.”

Jeffery continued, “These results demonstrate how momentum in our fast-growing fiber business is building and driving sustainable financial performance. At the same time, we have earned an NPS score that is now six times higher than our closest cable competitor, showing clearly why customers are choosing Frontier over cable. Heading into the second half of the year, our team remains focused on continuing to provide value to our customers and accelerating growth in 2024 and beyond.”

Second-Quarter 2024 Highlights


Added a record 388,000 fiber passings to reach 7.2 million total locations passed with fiber

Added a record 92,000 fiber broadband customers, resulting in fiber broadband customer growth of 18.6% year-over-year

Revenue of $1.48 billion increased 2.1% year-over-year as growth in fiber-based products was partly offset by declines in copper-based products

Operating income of $91 million and net loss of $123 million

Adjusted EBITDA of $560 million increased 5.1% year-over-year driven by revenue growth and cost savings1

Cash capital expenditures of $626 million plus $52 million of vendor financing payments, for total cash capital investment of $678 million2

Generated net cash from operations of $374 million
 

1 Adjusted EBITDA is a non-GAAP measure of performance. See “Non-GAAP Measures” for a description of this measure and its calculation. See Schedule A for a reconciliation of Adjusted EBITDA to net loss.
2 Cash capital investment includes capital expenditures and vendor financing payments for capital spend.


Second-Quarter 2024 Consumer Results


Consumer revenue of $789 million increased 1.8% year-over-year as growth in fiber was partly offset by declines in copper

Consumer fiber revenue of $523 million increased 13.2% year-over-year as growth in broadband was partly offset by declines in video and voice

Consumer fiber broadband revenue of $393 million increased 22.8% year-over-year driven by growth in both fiber broadband customers and ARPU

Consumer fiber broadband customer net additions of 90,000 resulted in consumer fiber broadband customer growth of 19.2% year-over-year

Consumer fiber broadband customer churn of 1.40% compared to 1.41% in the second quarter of 2023

Consumer fiber broadband ARPU of $65.32 increased 3.5% year-over-year

Second-Quarter 2024 Business and Wholesale Results


Business and Wholesale revenue of $677 million increased 3.7% year-over-year as growth in fiber was partly offset by declines in copper

Business and Wholesale fiber revenue of $317 million increased 11.6% year-over-year driven by growth in data and internet services

Business and Wholesale fiber broadband customer net additions of 2,000 resulted in Business and Wholesale fiber broadband customer growth of 9.8% year-over-year

Business and Wholesale fiber broadband customer churn of 1.31% compared to 1.29% in the second quarter of 20233

Business and Wholesale fiber broadband ARPU of $97.83 decreased 2.5% year-over-year3

Capital Structure

As of June 30, 2024, Frontier had total liquidity of $2.3 billion, including a cash and short-term investments balance of approximately $1.2 billion, $0.6 billion of available borrowing capacity on its revolving credit facility, and $0.5 billion of available borrowing capacity on its variable funding notes facility, subject to customary drawing conditions. Frontier’s net leverage ratio on June 30, 2024, was approximately 4.6x4. Frontier has no long-term debt maturities prior to 2027.


3 Business and Wholesale churn and ARPU methodologies include wholesale, exclude circuits or fiber-to-the-tower churn.
4 Net leverage ratio is a non-GAAP measure. See “Non-GAAP Measures” and the condensed consolidated balance sheet data contained herein for a description and calculation of net leverage ratio.


2024 Outlook5

Frontier today updated EBITDA, net cash interest expense, and cash taxes guidance, while reaffirming all other operational and financial expectations for 2024.

Changes to Guidance


Adjusted EBITDA of $2.22 - $2.25 billion, an increase to the low end of the range from prior guidance of $2.20 - $2.25 billion1

Net cash interest payments of approximately $760 million, an increase from prior guidance of $750 million, reflecting the fiber securitization offering and term loan refinancing completed in July 2024

Cash taxes of approximately $10 million, a decrease from prior guidance of approximately $20 million

Unchanged from Prior Guidance


Fiber passing additions of 1.3 million

Cash capital investment of $3.00 - $3.20 billion2

Pension and OPEB expense of approximately $40 million (net of capitalization)

Cash pension and OPEB contributions of approximately $125 million

Conference Call Information

As previously announced, Frontier will host a conference call to discuss second-quarter 2024 results today, August 2, 2024, beginning at 8:30 a.m. Eastern Time.

The conference call webcast and presentation materials are accessible through Frontier’s Investor Relations website and will remain archived at this location.

Investor Contact
Media Contact
   
Spencer Kurn
Chrissy Murray
SVP, Investor Relations
VP, Corporate Communications
+1 401-225-0475
+1 504-952-4225
spencer.kurn@ftr.com
chrissy.murray@ftr.com


5 The operational and financial guidance expectations for 2024 comprise forward-looking statements related to future events.  See “Forward-Looking Statements” below.  Projected GAAP financial measures and reconciliations of projected non-GAAP financial measures are not provided herein because such GAAP financial measures are not available on a forward-looking basis and such reconciliations could not be derived without unreasonable effort.


About Frontier

Frontier (NASDAQ: FYBR) is the largest pure-play fiber provider in the U.S. Driven by our purpose, Building Gigabit America®, we deliver blazing-fast broadband connectivity that unlocks the potential of millions of consumers and businesses.  For more information, visit www.frontier.com.

Non-GAAP Financial Measures

Frontier uses certain non-GAAP financial measures in evaluating its performance, including EBITDA, EBITDA margin, Adjusted EBITDA, Adjusted EBITDA margin, operating free cash flow, adjusted operating expenses, and net leverage ratio, each of which is described below. Management uses these non-GAAP financial measures internally to (i) assist in analyzing Frontier's underlying financial performance from period to period, (ii) analyze and evaluate strategic and operational decisions, (iii) establish criteria for compensation decisions, and (iv) assist in the understanding of Frontier's ability to generate cash flow and, as a result, to plan for future capital and operational decisions. Management believes that the presentation of these non-GAAP financial measures provides useful information to investors regarding Frontier’s financial condition and results of operations because these measures, when used in conjunction with related GAAP financial measures, (i) provide a more comprehensive view of Frontier’s core operations and ability to generate cash flow, (ii) provide investors with the financial analytical framework upon which management bases financial, operational, compensation, and planning decisions, and (iii) present measurements that investors and rating agencies have indicated to management are useful to them in assessing Frontier and its results of operations.

A reconciliation of these measures to the most comparable financial measures calculated and presented in accordance with GAAP is included in the accompanying tables. These non-GAAP financial measures are not measures of financial performance or liquidity under GAAP, nor are they alternatives to GAAP measures, and they may not be comparable to similarly titled measures of other companies.

EBITDA is defined as net income (loss) less income tax expense (benefit), interest expense, investment and other income (loss), pension settlement costs, reorganization items, and depreciation and amortization. EBITDA margin is calculated by dividing EBITDA by total revenue.

Adjusted EBITDA is defined as EBITDA, as described above, adjusted to exclude certain pension/OPEB expenses, restructuring costs and other charges, stock-based compensation, and certain other non-recurring items. Adjusted EBITDA margin is calculated by dividing Adjusted EBITDA by total revenue.


Management uses EBITDA, EBITDA margin, Adjusted EBITDA and Adjusted EBITDA margin to assist it in comparing performance from period to period and as measures of operational performance. Management believes that these non-GAAP measures provide useful information for investors in evaluating Frontier’s operational performance from period to period because they exclude depreciation and amortization expenses related to investments made in prior periods and are determined without regard to capital structure or investment activities. By excluding capital expenditures, debt repayments and dividends, among other factors, these non-GAAP financial measures have certain shortcomings. Management compensates for these shortcomings by utilizing these non-GAAP financial measures in conjunction with the comparable GAAP financial measures.

Management defines operating free cash flow as net cash provided from operating activities less capital expenditures, less payments on vendor financing related to capital expenditures. Management uses operating free cash flow to assist it in comparing liquidity from period to period and to obtain a more comprehensive view of Frontier’s core operations and ability to generate cash flow. Management believes that this non-GAAP measure is useful to investors in evaluating cash available to service debt and pay dividends. This non-GAAP financial measure has certain shortcomings; it does not represent the residual cash flow available for discretionary expenditures, as items such as debt repayments are not deducted in determining such measure. Management compensates for these shortcomings by utilizing this non-GAAP financial measure in conjunction with the comparable GAAP financial measure.

Adjusted operating expenses is defined as operating expenses adjusted to exclude depreciation and amortization, restructuring and other charges, certain pension/OPEB expenses, stock-based compensation, and certain other non-recurring items. Investors have indicated that this non-GAAP measure is useful in evaluating Frontier’s performance.

Net leverage ratio is calculated as net debt (total debt less cash and cash equivalents and short-term investments) divided by Adjusted EBITDA for the most recent four quarters. Investors have indicated that this non-GAAP measure is useful in evaluating Frontier’s debt levels.

The information in this press release should be read in conjunction with the financial statements and footnotes contained in Frontier’s documents filed with the U.S. Securities and Exchange Commission (the “SEC”).


Forward-Looking Statements

This release contains "forward-looking statements" related to future events, including our 2024 outlook and guidance. Forward-looking statements address our expectations or beliefs concerning future events, including, without limitation, future operating and financial performance, our ability to implement our growth strategy our ability to comply with the covenants in the agreements governing our indebtedness, our capital expenditures, and other matters. These statements are made on the basis of management’s views and assumptions, as of the time the statements are made, regarding future events and performance and contain words such as “expect,” “anticipate,” “intend,” “plan,” “believe,” “seek,” “see,” “may,” “will,” “would,” or “target.” Forward-looking statements by their nature address matters that are, to different degrees, uncertain. A wide range of factors could materially affect future developments and performance, including but not limited to: our significant indebtedness, our ability to incur substantially more debt in the future, and covenants in the agreements governing our current indebtedness that may reduce our operating and financial flexibility; declines in Adjusted EBITDA and revenue relative to historical levels that we are unable to offset; economic uncertainty, volatility in financial markets, and rising interest rates could limit our ability to access capital or increase the cost of capital needed to fund business operations, including our fiber expansion plans; our ability to successfully implement strategic initiatives, including our fiber buildout and other initiatives to enhance revenue and realize productivity improvements; our ability to secure necessary construction resources, materials and permits for our fiber buildout initiative in a timely and cost-effective manner; inflationary pressures on costs, including tight labor markets, increased fuel and electricity costs and potential disruptions in our supply chain, which could adversely impact our financial condition or results of operations and hinder our fiber expansion plans; our ability to effectively manage our operations, operating expenses, capital expenditures, debt service requirements and cash paid for income taxes and liquidity; the impact of potential information technology or data security breaches or other cyber-attacks or other disruptions; the impact of laws and regulations relating to the handling of privacy and data protection; competition from cable, wireless carriers, satellite providers, wireline carriers, fiber “overbuilders” and over the top companies, and the risk that we will not respond on a timely or profitable basis; our ability to successfully adjust to changes in the communications industry, including the effects of technological changes and competition on our capital expenditures, products and service offerings; our ability to retain or attract new customers and to maintain relationships with existing customers, including wholesale customers; our reliance on a limited number of key supplies and vendors; declines in revenue from our voice services, switched and nonswitched access and video and data services that we cannot stabilize or offset with increases in revenue from other products and services; our ability to secure, continue to use or renew intellectual property and other licenses used in our business; our ability to hire or retain key personnel; our ability to dispose of certain assets or asset groups or to make acquisition of certain assets on terms that are attractive to us, or at all; the effects of changes in the availability of federal and state universal service funding or other subsidies to us and our competitors and our ability to obtain future subsidies; our ability to comply with the applicable CAF II and RDOF requirements and the risk of penalties or obligations to return certain CAF II and RDOF funds; our ability to defend against litigation or government investigations and potentially unfavorable results from current pending and future litigation or investigations; our ability to comply with applicable federal and state consumer protection requirements; the effects of governmental legislation and regulation on our business, including costs, disruptions, possible limitations on operating flexibility and changes to the competitive landscape resulting from such legislation or regulation; the impact of regulatory, investigative and legal proceedings and legal compliance risks; our ability to effectively manage service quality in the states in which we operate and meet mandated service quality metrics or regulatory requirements; the effects of changes in income tax rates, tax laws, regulations or rulings, or federal or state tax assessments, including the risk that such changes may benefit our competitors more than us, as well as potential future decreases in the value of our deferred tax assets; the effects of changes in accounting policies or practices; our ability to successfully renegotiate union contracts; the effects of increased medical expenses and pension and postemployment expenses; changes in pension plan assumptions, interest rates, discount rates, regulatory rules and/or the value of our pension plan assets; the impact of adverse changes in economic, political and market conditions in the areas that we serve, the U.S. and globally, including but not limited to, disruption in our supply chain, inflation in pricing for key materials or labor, or other adverse changes resulting from epidemics, pandemics and outbreaks of contagious diseases, natural disasters, economic or political instability, terrorist attacks and wars, including the ongoing war in Ukraine and the Israel-Hamas war, or other adverse widespread developments; potential adverse impacts of climate change and increasingly stringent environmental laws, rules and regulations, and customer expectations and other environmental liabilities; market overhang due to substantial common stock holdings by our former creditors; certain provisions of Delaware law and our certificate of incorporation that may prevent efforts by our stockholders to change the direction or management of our company; and certain other factors set forth in our other filings with the SEC. This list of factors that may affect future performance and the accuracy of forward-looking statements is illustrative and is not intended to be exhaustive.  You should consider these important factors, as well as the risks and other factors contained in Frontier’s filings with the SEC, including our most recent reports on Form 10-K and Form 10-Q.  These risks and uncertainties may cause actual future results to be materially different than those expressed in such forward-looking statements.  We do not intend, nor do we undertake any duty, to update any forward-looking statements.


Frontier Communications Parent, Inc.
Unaudited Financial Data

   
For the
   
For the
   
For the
 
   
three months ended
   
three months ended
   
three months ended
 
   
June 30,
   
March 31,
   
June 30,
 
($ in millions and shares in thousands, except per share amounts)
 
2024
   
2024
   
2023
 
                   
Statements of Operations Data
                 
Revenue
 
$
1,480
   
$
1,462
   
$
1,449
 
                         
Operating expenses:
                       
Cost of service
   
516
     
522
     
528
 
Selling, general, and administrative expenses
   
449
     
428
     
428
 
Depreciation and amortization
   
398
     
388
     
354
 
Restructuring costs and other charges
   
26
     
34
     
24
 
Total operating expenses
   
1,389
     
1,372
     
1,334
 
                         
Operating income
   
91
     
90
     
115
 
                         
Investment and other income (loss), net
   
(24
)
   
112
     
32
 
Interest expense
   
(199
)
   
(199
)
   
(149
)
                         
Income (loss) before income taxes
   
(132
)
   
3
     
(2
)
Income tax expense (benefit)
   
(9
)
   
2
     
-
 
                         
Net income (loss)
 
$
(123
)
 
$
1
   
$
(2
)
                         
                         
Weighted average shares outstanding - basic
   
248,754
     
246,301
     
245,474
 
Weighted average shares outstanding - diluted
   
248,754
     
247,040
     
245,474
 
                         
                         
Basic net earnings (loss) per common share
 
$
(0.49
)
 
$
0.00
   
$
(0.01
)
Diluted net earnings (loss) per common share
 
$
(0.49
)
 
$
0.00
   
$
(0.01
)
                         
Other Financial Data:
                       
Capital expenditures
 
$
626
   
$
666
   
$
1,057
 


Frontier Communications Parent, Inc.
Unaudited Financial Data

   
For the
   
For the
 
   
six months ended
   
six months ended
 
   
June 30,
   
June 30,
 
($ in millions and shares in thousands, except per share amounts)
 
2024
   
2023
 
             
Statements of Income Data
           
Revenue
 
$
2,942
   
$
2,889
 
                 
Operating expenses:
               
Cost of service
   
1,038
     
1,070
 
Selling, general, and administrative expenses
   
877
     
845
 
Depreciation and amortization
   
786
     
684
 
Restructuring costs and other charges
   
60
     
32
 
Total operating expenses
   
2,761
     
2,631
 
                 
Operating income
   
181
     
258
 
                 
Investment and other income, net
   
88
     
34
 
Interest expense
   
(398
)
   
(290
)
                 
Income (loss) before income taxes
   
(129
)
   
2
 
Income tax expense
   
(7
)
   
1
 
Net income (loss)
 
$
(122
)
 
$
1
 
                 
Weighted average shares outstanding - basic
   
247,382
     
245,285
 
Weighted average shares outstanding - diluted
   
247,382
     
246,517
 
                 
Basic net earnings (loss) per common share
 
$
(0.49
)
 
$
0.00
 
Diluted net earnings (loss) per common share
 
$
(0.49
)
 
$
0.00
 
                 
Other Financial Data:
               
Capital expenditures
 
$
1,292
   
$
2,211
 


Frontier Communications Parent, Inc.
Unaudited Financial Data

   
For the quarter ended
 
   
June 30,
   
March 31,
   
June 30,
 
($ in millions)
 
2024
   
2024
   
2023
 
                   
Selected Statement of Income Data
                 
Revenue:
                 
Data and Internet services
 
$
983
   
$
947
   
$
880
 
Voice services
   
312
     
321
     
347
 
Video services
   
88
     
94
     
112
 
Other
   
83
     
84
     
89
 
Revenue from contracts with customers
   
1,466
     
1,446
     
1,428
 
Subsidy and other revenue
   
14
     
16
     
21
 
Total revenue
 
$
1,480
   
$
1,462
   
$
1,449
 
                         
Other Financial Data
                       
Revenue:
                       
Consumer
 
$
789
   
$
787
   
$
775
 
Business and wholesale
   
677
     
659
     
653
 
Revenue from contracts with customers
 
$
1,466
   
$
1,446
   
$
1,428
 
                         
Fiber
 
$
840
   
$
805
   
$
746
 
Copper
   
626
     
641
     
682
 
Revenue from contracts with customers
 
$
1,466
   
$
1,446
   
$
1,428
 

   
For the six months ended
   
For the six months ended
 
   
June 30,
   
June 30,
 
($ in millions)
 
2024
   
2023
 
             
Selected Statement of Income Data
           
Revenue:
           
Data and Internet services
 
$
1,930
   
$
1,742
 
Voice services
   
633
     
703
 
Video services
   
182
     
229
 
Other
   
167
     
172
 
Revenue from contracts with customers
   
2,912
     
2,846
 
Subsidy and other revenue
   
30
     
43
 
Total revenue
 
$
2,942
   
$
2,889
 
                 
Other Financial Data
               
Revenue:
               
Consumer
 
$
1,576
   
$
1,536
 
Business and wholesale
   
1,336
     
1,310
 
Revenue from contracts with customers
 
$
2,912
   
$
2,846
 
                 
Fiber
 
$
1,645
   
$
1,475
 
Copper
   
1,267
     
1,371
 
Revenue from contracts with customers
 
$
2,912
   
$
2,846
 


Frontier Communications Parent, Inc.
Unaudited Operating Data

   
As of and for the three months ended
   
For the six months ended
 
   
June 30, 2024
   
March 31, 2024
   
June 30, 2023
   
June 30, 2024
   
June 30, 2023
 
                               
Broadband customer metrics (1)
                             
Broadband customers (in thousands)
   
3,010
     
2,974
     
2,898
     
3,010
     
2,898
 
Net customer additions
   
36
     
31
     
4
     
67
     
30
 
                                         
Consumer customer metrics
                                       
Customers (in thousands)
   
3,154
     
3,140
     
3,127
     
3,154
     
3,127
 
Net customer additions
   
14
     
11
     
(13
)
   
25
     
(6
)
Average monthly consumer revenue per customer
 
$
83.57
   
$
83.65
   
$
82.48
   
$
83.69
   
$
81.70
 
Customer monthly churn
   
1.65
%
   
1.47
%
   
1.53
%
   
1.56
%
   
1.48
%
                                         
Employees
   
12,960
     
13,227
     
14,099
     
12,960
     
14,099
 

(1)Amounts presented include related metrics for our wholesale customers.


Frontier Communications Parent, Inc.
Condensed Consolidated Balance Sheet Data

($ in millions)
 
(Unaudited)
June 30, 2024
   
December 31, 2023
 
             
ASSETS
           
Current assets:
           
Cash and cash equivalents
 
$
1,197
   
$
1,125
 
Short-term investments
   
-
     
1,075
 
Accounts receivable, net
   
434
     
446
 
Other current assets
   
124
     
135
 
Total current assets
   
1,755
     
2,781
 
                 
Property, plant and equipment, net
   
14,703
     
13,933
 
Other assets
   
3,736
     
3,979
 
Total assets
 
$
20,194
   
$
20,693
 
                 
LIABILITIES AND EQUITY
               
Current liabilities:
               
Long-term debt due within one year
 
$
15
   
$
15
 
Accounts payable and other current liabilities
   
2,004
     
2,260
 
Total current liabilities
   
2,019
     
2,275
 
                 
Deferred income taxes and other liabilities
   
1,804
     
1,893
 
Long-term debt
   
11,234
     
11,246
 
Equity
   
5,137
     
5,279
 
Total liabilities and equity
 
$
20,194
   
$
20,693
 

   
As of
 
   
June 30, 2024
 
Leverage Ratio
     
Numerator:
     
Long-term debt due within one year
 
$
15
 
Long-term debt
   
11,234
 
Total debt
 
$
11,249
 
Less: Cash and cash equivalents
   
(1,197
)
Net debt
 
$
10,052
 
         
Denominator:
       
Adjusted EBITDA - last 4 quarters
 
$
2,182
 
         
Net Leverage Ratio
   
4.6
x


Frontier Communications Parent, Inc.
Unaudited Consolidated Cash Flow Data

   
For the three months ended
 
   
June 30, 2024
   
June 30, 2023
 
($ in millions)
           
             
Cash flows provided from (used by) operating activities:
           
Net loss
 
$
(123
)
 
$
(2
)
Adjustments to reconcile net loss to net cash provided from (used by) operating activities:
               
Depreciation and amortization
   
398
     
354
 
Pension/OPEB special termination benefit enhancements
   
3
     
-
 
Stock-based compensation
   
11
     
27
 
Amortization of premium
   
(5
)
   
(8
)
Bad debt expense
   
11
     
9
 
Other adjustments
   
3
     
1
 
Deferred income taxes
   
(10
)
   
-
 
Change in accounts receivable
   
1
     
(11
)
Change in long-term pension and other postretirement liabilities
   
28
     
(44
)
Change in accounts payable and other liabilities
   
49
     
(42
)
Change in prepaid expenses, income taxes, and other assets
   
8
     
(8
)
Net cash provided from operating activities
   
374
     
276
 
                 
Cash flows provided from (used by) investing activities:
               
Capital expenditures
   
(626
)
   
(1,057
)
Purchases of short-term investments (1)
   
-
     
(350
)
Sale of short-term  investments (1)
   
225
     
675
 
Proceeds from sale of asset
   
4
     
-
 
Other
   
4
     
4
 
Net cash used by investing activities
   
(393
)
   
(728
)
                 
Cash flows provided from (used by) financing activities:
               
Long-term debt payments
   
(3
)
   
(4
)
Payments of vendor financing
   
(52
)
   
-
 
Finance lease obligation payments
   
(8
)
   
(7
)
Taxes paid on behalf of employees for shares withheld
   
(6
)
   
(4
)
Other
   
(3
)
   
(3
)
Net cash used by financing activities
   
(72
)
   
(18
)
                 
Decrease in cash, cash equivalents, and restricted cash
   
(91
)
   
(470
)
Cash, cash equivalents, and restricted cash at the beginning of the period
   
1,337
     
1,132
 
                 
Cash, cash equivalents, and restricted cash at the end of the period
 
$
1,246
   
$
662
 
                 
Supplemental cash flow information:
               
Cash paid during the period for:
               
Interest
 
$
263
   
$
231
 
Income tax payments (refunds), net
 
$
4
   
$
(4
)

(1)  Amounts represent cash movement to/from short-term investments. Given the long-term nature of the fiber build, we have invested cash in short-term investments to improve interest income while preserving funding flexibility.


Frontier Communications Parent, Inc.
Unaudited Consolidated Cash Flow Data

   
For the six months ended
 
   
June 30, 2024
   
June 30, 2023
 
($ in millions)
           
             
Cash flows provided from (used by) operating activities:
           
Net income (loss)
 
$
(122
)
 
$
1
 
Adjustments to reconcile net loss to net cash provided from (used by) operating activities:
               
Depreciation and amortization
   
786
     
684
 
Pension/OPEB special termination benefit enhancements
   
10
     
-
 
Stock-based compensation
   
37
     
51
 
Amortization of premium
   
(10
)
   
(15
)
Bad debt expense
   
20
     
16
 
Other adjustments
   
7
     
2
 
Deferred income taxes
   
(10
)
   
-
 
Change in accounts receivable
   
(8
)
   
(9
)
Change in long-term pension and other postretirement liabilities
   
(118
)
   
(51
)
Change in accounts payable and other liabilities
   
76
     
(12
)
Change in prepaid expenses, income taxes, and other assets
   
41
     
(2
)
Net cash provided from operating activities
   
709
     
665
 
                 
Cash flows provided from (used by) investing activities:
               
Capital expenditures
   
(1,292
)
   
(2,211
)
Purchases of short-term investments (1)
   
-
     
(575
)
Sale of short-term investments (1)
   
1,075
     
1,750
 
Proceeds on sale of assets
   
4
     
4
 
Other
   
6
     
-
 
Net cash used by investing activities
   
(207
)
   
(1,032
)
                 
Cash flows provided from (used by) financing activities:
               
Long-term debt payments
   
(7
)
   
(8
)
Proceeds from long-term debt borrowings
   
-
     
750
 
Payments of vendor financing
   
(415
)
   
-
 
Financing costs paid
   
-
     
(13
)
Finance lease obligation payments
   
(15
)
   
(12
)
Taxes paid on behalf of employees for shares withheld
   
(49
)
   
(7
)
Other
   
(9
)
   
(3
)
Net cash provided from (used by) financing activities
   
(495
)
   
707
 
                 
Increase in cash, cash equivalents, and restricted cash
   
7
     
340
 
Cash, cash equivalents, and restricted cash at the beginning of the period
   
1,239
     
322
 
                 
Cash, cash equivalents, and restricted cash at the end of the period
 
$
1,246
   
$
662
 
                 
Supplemental cash flow information:
               
Cash paid during the period for:
               
Interest
 
$
412
   
$
314
 
Income tax (refund) payments, net
 
$
(9
)
 
$
1
 

(1) Amounts represent cash movement to/from short-term investments. Given the long-term nature of the fiber build, we have invested cash in short-term investments to improve interest income while preserving funding flexibility.


SCHEDULE A

Frontier Communications Parent, Inc.
Unaudited Financial Data
Reconciliation of Non-GAAP Financial Measures

   
For the three months ended
   
For the six months ended
 
   
June 30,
   
March 31,
   
June 30,
   
June 30,
   
June 30,
 
($ in millions)
 
2024
   
2024
   
2023
   
2024
   
2023
 
                               
Net income (loss)
 
$
(123
)
 
$
1
   
$
(2
)
 
$
(122
)
 
$
1
 
Add back (subtract):
                                       
Income tax expense (benefit)
   
(9
)
   
2
     
-
     
(7
)
   
1
 
Interest expense
   
199
     
199
     
149
     
398
     
290
 
Investment and other (income) loss, net
   
24
     
(112
)
   
(32
)
   
(88
)
   
(34
)
Operating income
   
91
     
90
     
115
     
181
     
258
 
Depreciation and amortization
   
398
     
388
     
354
     
786
     
684
 
EBITDA
 
$
489
   
$
478
   
$
469
   
$
967
   
$
942
 
                                         
Add back:
                                       
Pension/OPEB expense
 
$
9
   
$
9
   
$
11
   
$
18
   
$
22
 
Restructuring costs and other charges
   
26
     
34
     
24
     
60
     
32
 
Stock-based compensation
   
11
     
26
     
27
     
37
     
51
 
Storm-related costs
   
-
     
-
     
2
     
-
     
5
 
Legal settlement
   
25
     
-
     
-
     
25
     
-
 
Adjusted EBITDA
 
$
560
   
$
547
   
$
533
   
$
1,107
   
$
1,052
 
                                         
EBITDA margin
   
33.0
%
   
32.7
%
   
32.4
%
   
32.9
%
   
32.6
%
Adjusted EBITDA margin
   
37.8
%
   
37.4
%
   
36.8
%
   
37.6
%
   
36.4
%
                                         
Free Cash Flow
                                       
Net cash provided from operating activities
 
$
374
   
$
335
   
$
276
   
$
709
   
$
665
   
Capital expenditures
   
(626
)
   
(666
)
   
(1,057
)
   
(1,292
)
   
(2,211
)
Payment of vendor financing- capital expenditures
   
(52
)
   
(363
)
   
-
     
(415
)
   
-
 
Operating free cash flow
 
$
(304
)
 
$
(694
)
 
$
(781
)
 
$
(998
)
 
$
(1,546
)


SCHEDULE B

Frontier Communications Parent, Inc.
Unaudited Consolidated Financial Data
Reconciliation of Non-GAAP Financial Measures

   
For the three months ended
   
For the six months ended
 
   
June 30,
   
March 31,
   
June 30,
   
June 30,
   
June 30,
 
($ in millions)
 
2024
   
2024
   
2023
   
2024
   
2023
 
Adjusted Operating Expenses
                             
                               
Total operating expenses
 
$
1,389
   
$
1,372
   
$
1,334
   
$
2,761
   
$
2,631
 
                                         
Subtract:
                                       
Depreciation and amortization
   
398
     
388
     
354
     
786
     
684
 
Pension/OPEB expense
   
9
     
9
     
11
     
18
     
22
 
Restructuring costs and other charges
   
26
     
34
     
24
     
60
     
32
 
Stock-based compensation
   
11
     
26
     
27
     
37
     
51
 
Storm-related costs
   
-
     
-
     
2
     
-
     
5
 
Legal settlement
   
25
     
-
     
-
     
25
     
-
 
Adjusted operating expenses
 
$
920
   
$
915
   
$
916
   
$
1,835
   
$
1,837
 


SCHEDULE C

Frontier Communications Parent, Inc.
Selected Financial and Operating Data (1)
(Unaudited)

      
As of or for the quarter ended
   
For the six months ended
 
     
June 30, 2024
   
March 31, 2024
   
June 30, 2023
   
June 30, 2024
   
June 30, 2023
 
                                 
Broadband Revenue ($ in millions)
                             
Total Company
Fiber
 
$
432
   
$
414
   
$
356
   
$
846
   
$
690
 

Copper
   
151
     
155
     
173
     
306
     
346
 

Total  
$
583
   
$
569
   
$
529
   
$
1,152
   
$
1,036
 
                                           
Estimated Fiber Passings (in millions)
                                       
Base Fiber Passings
     
3.2
     
3.2
     
3.2
                 
Total Fiber Passings
     
7.2
     
6.8
     
5.8
                 
                                           
Estimated Broadband Fiber % Penetration
                                       
Base Fiber Penetration
     
45.3
%
   
44.9
%
   
43.4
%
               
Total Fiber Penetration
     
30.4
%
   
30.7
%
   
31.6
%
               
                                           
Broadband Customers, end of period (in thousands)
                                       
Consumer
Fiber
   
2,053
     
1,963
     
1,722
                 

Copper
   
721
     
771
     
928
                 

Total
   
2,774
     
2,734
     
2,650
                 
                                           
Business + Wholesale (2)
Fiber
   
134
     
132
     
122
                 

Copper
   
102
     
108
     
126
                 

Total
   
236
     
240
     
248
                 
                                           
Broadband Net Adds (in thousands)
                                       
Consumer
Fiber
   
90
     
85
     
63
                 

Copper
   
(50
)
   
(51
)
   
(59
)
               

Total
   
40
     
34
     
4
                 
                                           
Business + Wholesale (2)
Fiber
   
2
     
3
     
4
                 

Copper
   
(6
)
   
(6
)
   
(4
)
               

Total
   
(4
)
   
(3
)
   
-
                 
                                           
Broadband Churn
                                       
Consumer
Fiber
   
1.40
%
   
1.24
%
   
1.41
%
   
1.32
%
   
1.30
%

Copper
   
2.02
%
   
1.93
%
   
1.84
%
   
1.98
%
   
1.78
%

Total
   
1.57
%
   
1.45
%
   
1.57
%
   
1.51
%
   
1.48
%
                                           
Business + Wholesale (2)
Fiber
   
1.31
%
   
1.32
%
   
1.29
%
   
1.32
%
   
1.36
%

Copper
   
1.99
%
   
2.01
%
   
1.69
%
   
2.00
%
   
1.78
%

Total
   
1.61
%
   
1.64
%
   
1.50
%
   
1.63
%
   
1.58
%
Broadband ARPU
                                       
Consumer
Fiber
 
$
65.32
   
$
65.18
   
$
63.12
   
$
65.39
   
$
62.31
 

Copper
   
58.26
     
56.16
     
51.90
     
57.20
     
50.39
 

Total
 
$
63.41
   
$
62.53
   
$
59.06
   
$
63.06
   
$
57.84
 
                                           
Business + Wholesale (2)
Fiber
 
$
97.83
   
$
98.40
   
$
100.30
   
$
98.09
   
$
101.19
 

Copper
   
63.83
     
60.81
     
61.26
     
62.38
     
60.90
 

Total
 
$
85.57
   
$
81.07
   
$
80.20
   
$
81.98
   
$
80.01
 
 
(1) Certain operational metrics, including passings, penetration, Base Fiber penetration, ARPU and churn are defined in the accompanying Trending Schedule available at Frontier's website https://investor.frontier.com.

(2) Business + Wholesale customers include our small, medium business, larger enterprise (SME) customers and wholesale subscribers.