earnings3qtrslides.htm

Investor Update

Third Quarter 2011

November 3, 2011

Safe Harbor Statement

Forward-Looking Language

This document contains forward-looking statements that are subject to risks and uncertainties that could cause actual results to differ materially from those expressed or implied in
the financial statements. Statements that are not historical facts are forward-looking statements made pursuant to the safe harbor provisions of the Private Securities Litigation
Reform Act of 1995. Words such as “believe,” “anticipate,” “expect” and similar expressions are intended to identify forward-looking statements. Forward-looking statements
(including oral representations) are only predictions or statements of current plans, which we review continuously. Forward-looking statements may differ from actual future results
due to, but not limited to, and our future results may be materially affected by, potential risks or uncertainties. You should understand that it is not possible to predict or identify all
potential risks or uncertainties. We note the following as a partial list: our ability to successfully integrate the operations and systems of the acquired business into Frontier’s
existing operations and systems; the risk that the growth opportunities and cost synergies from the transaction may not be fully realized or may take longer to realize than
expected; our indemnity obligation to Verizon for taxes which may be imposed upon them as a result of changes in ownership of our stock may discourage, delay or prevent a third
party from acquiring control of us during the two-year period ending July 2012 in a transaction that stockholders might consider favorable; the effects of increased expenses
incurred due to activities related to the integration of the acquired business; following the latest systems conversions, the remaining nine states of the Acquired Business continue
to operate on systems acquired in the Transaction, which could experience unplanned interruptions that may impact our operations; our ability to maintain relationships with
customers, employees or suppliers; the effects of greater than anticipated competition requiring new pricing, marketing strategies or new product or service offerings and the risk
that we will not respond on a timely or profitable basis; reductions in the number of our access lines that cannot be offset by increases in High-Speed Internet (HSI) subscribers
and sales of other products and services; the effects of ongoing changes in the regulation of the communications industry as a result of federal and state legislation and regulation,
or changes in the enforcement or interpretation of such legislation and regulation; the effects of any unfavorable outcome with respect to any current or future legal, governmental
or regulatory proceedings, audits or disputes; the effects of changes in the availability of federal and state universal funding to us and our competitors; the effects of competition
from cable, wireless and other wireline carriers; our ability to adjust successfully to changes in the communications industry and to implement strategies for growth; continued
reductions in switched access revenues as a result of regulation, competition or technology substitutions; our ability to effectively manage service quality in our territories and meet
mandated service quality metrics; our ability to successfully introduce new product offerings, including our ability to offer bundled service packages on terms that are both profitable
to us and attractive to customers; changes in accounting policies or practices adopted voluntarily or as required by generally accepted accounting principles or regulations; our
ability to effectively manage our operations, operating expenses and capital expenditures, and to repay, reduce or refinance our debt; the effects of changes in both general and
local economic conditions on the markets that we serve, which can affect demand for our products and services, customer purchasing decisions, collectability of revenues and
required levels of capital expenditures related to new construction of residences and businesses; the effects of technological changes and competition on our capital expenditures
and product and service offerings, including the lack of assurance that our network improvements will be sufficient to meet or exceed the capabilities and quality of competing
networks; the effects of increased medical, retiree and pension expenses and related funding requirements; changes in income tax rates, tax laws, regulations or rulings, or federal
or state tax assessments; the effects of state regulatory cash management practices that could limit our ability to transfer cash among our subsidiaries or dividend funds up to the
parent company; our ability to successfully renegotiate union contracts expiring in 2011 and thereafter; changes in pension plan assumptions and/or the value of our pension plan
assets, which would require us to make increased contributions to the pension plan in 2012 and beyond; the effects of customer bankruptcies and home foreclosures, which could
result in difficulty in collection of revenues and loss of customers; adverse changes in the credit markets or in the ratings given to our debt securities by nationally accredited
ratings organizations, which could limit or restrict the availability, or increase the cost, of financing; limitations on the amount of capital stock that we can issue to make acquisitions
or to raise additional capital until July 2012; our ability to pay dividends on our common shares, which may be affected by our cash flow from operations, amount of capital
expenditures, debt service requirements, cash paid for income taxes and liquidity; and the effects of severe weather events such as hurricanes, tornados, ice storms or other
natural or man-made disasters. These and other uncertainties related to our business are described in greater detail in our filings with the Securities and Exchange Commission,
including our reports on Forms 10-K and 10-Q, and the foregoing information should be read in conjunction with these filings. We undertake no obligation to publicly update or
revise any forward-looking statements or to make any other forward-looking statement, whether as a result of new information, future events or otherwise unless required to do so
by securities laws.

Non-GAAP Financial Measures

The Company uses certain non-GAAP financial measures in evaluating its performance. These include free cash flow, EBITDA or “operating cash flow”, which
we define as operating income plus depreciation and amortization (“EBITDA”), and Adjusted EBITDA; a reconciliation of the differences between EBITDA and
free cash flow and the most comparable financial measures calculated and presented in accordance with GAAP is included in the appendix. The non-GAAP
financial measures are by definition not measures of financial performance under generally accepted accounting principles and are not alternatives to operating
income or net income reflected in the statement of operations or to cash flow as reflected in the statement of cash flows and are not necessarily indicative of
cash available to fund all cash flow needs. The non-GAAP financial measures used by the Company may not be comparable to similarly titled measures of
other companies.

The Company believes that the presentation of non-GAAP financial measures provides useful information to investors regarding the Company’s financial
condition and results of operations because these measures, when used in conjunction with related GAAP financial measures, (i) together provide a more
comprehensive view of the Company’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) presents measurements that investors and rating agencies
have indicated to management are useful to them in assessing the Company and its results of operations. In addition, the Company believes that free cash
flow and EBITDA, as the Company defines them, can assist in comparing performance from period to period, without taking into account factors affecting cash
flow reflected in the statement of cash flows, including changes in working capital and the timing of purchases and payments.

The Company has shown adjustments to its financial presentations to exclude certain costs because investors have indicated to management that such
adjustments are useful to them in assessing the Company and its results of operations. These adjustments are detailed in the Appendix for the reconciliation
of free cash flow and operating cash flow.

Management uses these non-GAAP financial measures to (i) assist in analyzing the Company’s underlying financial performance from period to period, (ii)
evaluate the financial performance of its business units, (iii) analyze and evaluate strategic and operational decisions, (iv) establish criteria for compensation
decisions, and (v) assist management in understanding the Company’s ability to generate cash flow and, as a result, to plan for future capital and operational
decisions. Management uses these non-GAAP financial measures in conjunction with related GAAP financial measures. These non-GAAP financial measures
have certain shortcomings. In particular, free cash flow does not represent the residual cash flow available for discretionary expenditures, since items such as
debt repayments and dividends are not deducted in determining such measure. EBITDA has similar shortcomings as interest, income taxes, capital
expenditures, debt repayments and dividends are not deducted in determining this measure. Management compensates for the shortcomings of these
measures by utilizing them in conjunction with their comparable GAAP financial measures. The information in this document should be read in conjunction with
the financial statements and footnotes contained in our documents filed with the U.S. Securities and Exchange Commission.

Third Quarter 2011 Summary

● Successfully completed 4-state conversion of operating
systems and 13-state conversion of financial systems

Successfully completed 4-state conversion of operating
systems and 13-state conversion of financial systems

● Broadband availability increased by 126,000 new homes;
352,000 YTD and 592,000 in total

Broadband availability increased by 126,000 new homes;
352,000 YTD and 592,000 in total

● Grew DSL broadband subscribers by 16,900, a 38%
sequential increase without material promotions

Grew DSL broadband subscribers by 16,900, a 38%
sequential increase without material promotions

● Generated incremental synergies of $18M including
savings from backbone migration; run rate now $496M

Generated incremental synergies of $18M including
savings from backbone migration; run rate now $496M

● Adjusted EBITDA margin 47%, or 48% excluding storm-
related costs

Adjusted EBITDA margin 47%, or 48% excluding storm-
related costs

Quarterly Snapshot

Business Update

● Metro Ethernet expanded to 55 markets in 10 states, and
expect 70% availability by 1Q12

Metro Ethernet expanded to 55 markets in 10 states, and
expect 70% availability by 1Q12

● Improved year/year loss rate vs. 2Q11. Anticipate stronger
Q4 revenues from our solid pipeline

Improved year/year loss rate vs. 2Q11. Anticipate stronger
Q4 revenues from our solid pipeline

● Local engagement and enterprise focus driving strong
average monthly recurring revenue of $606

Local engagement and enterprise focus driving strong
average monthly recurring revenue of $606

● Broadband congestion largely relieved through additional
capacity

Broadband congestion largely relieved through additional
capacity

● 1,325 local engagement events in 3Q11

1,325 local engagement events in 3Q11

● Launched new Second Connect broadband product; 25%
of net additions are new customers of Frontier

Launched new Second Connect broadband product; 25%
of net additions are new customers of Frontier

● Home security trials with ADT and Protection1

Home security trials with ADT and Protection1

● Agency agreement with AT&T Mobility for voice/data
bundled with Frontier services; trial launches 1H 2012

Agency agreement with AT&T Mobility for voice/data
bundled with Frontier services; trial launches 1H 2012

Commercial

Residential

Key Metrics

● DSL net adds in
Acquired properties
+46% sequentially

DSL net adds in
Acquired properties
+46% sequentially

● DSL growth less
reliant on Satellite
bundles

DSL growth less
reliant on Satellite
bundles

● Total access line loss
rate improving;
Acquired properties
improved to -9.8%

Total access line loss
rate improving;
Acquired properties
improved to -9.8%

● Upside from bringing
Acquired churn to
Legacy levels

Upside from bringing
Acquired churn to
Legacy levels

Notes: (1) WiFi customers included as a separate category. (2) Comparisons to amounts prior to 7/1/10 pro
forma for the Acquired Properties. Subscriber units in 000s

Revenues

● Regulatory
revenues 11.5% of
3Q11 total

Regulatory
revenues 11.5% of
3Q11 total

● ICC 5.8% of total
revenue, USF
3.8% excluding
surcharges

ICC 5.8% of total
revenue, USF
3.8% excluding
surcharges

Notes: $ Millions; Numbers may not sum due to rounding. (1) as a percentage of Customer Revenue.

● Business
represents 51% of
total customer
revenues

Business
represents 51% of
total customer
revenues

● 4Q11 Business
pipeline is solid

4Q11 Business
pipeline is solid

● Focused on
increasing the
contribution of
Business and
broadband
revenues

Focused on
increasing the
contribution of
Business and
broadband
revenues

Residential & Business

● Residential ARPU
stable from additional
products and
broadband expansion

Residential ARPU
stable from additional
products and
broadband expansion

● Business ARPU
reflects additional
products and larger
customers

Business ARPU
reflects additional
products and larger
customers

● Residential revenue
loss was stable
sequentially;
Business reflects out-
of-period dispute
resolutions

Residential revenue
loss was stable
sequentially;
Business reflects out-
of-period dispute
resolutions

Notes: 1) Sequential quarterly change.

Cash Operating Expenses

Notes: $ Millions; Please see Non-GAAP reconciliations in Appendix. Numbers may not sum due to rounding.

● Through 3Q11, we
have eliminated 23%
of the 2Q10 Acquired
company cost
structure through
synergies

Through 3Q11, we
have eliminated 23%
of the 2Q10 Acquired
company cost
structure through
synergies

● Continued extensive
focus and discipline
on synergy list and
other areas of cost
control

Continued extensive
focus and discipline
on synergy list and
other areas of cost
control

$7 Million
Reduction

Operating Expenses

● $18M incremental
synergies from
reduced backbone
expense, contractor
reductions and other
savings

$18M incremental
synergies from
reduced backbone
expense, contractor
reductions and other
savings

● 3Q11 included $12M
of storm and seasonal
costs

3Q11 included $12M
of storm and seasonal
costs

Notes: $ Millions. Numbers may not sum due to rounding.

Capital Expenditures

● Expanded network to
reach 126,000
additional homes in
3Q11

Expanded network to
reach 126,000
additional homes in
3Q11

● Broadband expansion
and magnitude of
capex on schedule
and budget

Broadband expansion
and magnitude of
capex on schedule
and budget

● Expect capex to fall to
approximately 11% of
revenues at
completion of
broadband expansion

Expect capex to fall to
approximately 11% of
revenues at
completion of
broadband expansion

Notes: $ Millions. Business Operations capital expenditures exclude Integration. Numbers may
not sum due to rounding.

Cash Flow

● Adjusted EBITDA
3Q11 margin
contracted 74 bps to
47.2% on
storm/seasonal costs

Adjusted EBITDA
3Q11 margin
contracted 74 bps to
47.2% on
storm/seasonal costs

● FCF dividend
coverage should be
positively impacted
by further synergies,
revenue traction, and
completion of
broadband expansion
in 2013

FCF dividend
coverage should be
positively impacted
by further synergies,
revenue traction, and
completion of
broadband expansion
in 2013

Notes: $ Millions; See Appendix for calculation of Free Cash Flow (FCF).

Credit & Liquidity

● On 10/14/11, raised
$575 million of
attractively-priced
unsecured debt

On 10/14/11, raised
$575 million of
attractively-priced
unsecured debt

● The 10/14/11
refinancing eliminated
significant debt
maturities until 2013

The 10/14/11
refinancing eliminated
significant debt
maturities until 2013

● Fixed rate debt is 97%
of total, no swaps

Fixed rate debt is 97%
of total, no swaps

● Over $1B of liquidity

Over $1B of liquidity

Notes: $ Millions. (1) Excludes $62.8M of escrow cash.

Guidance

Notes: $ Millions. See Appendix for calculation of Free Cash Flow. (1) Cash Taxes reflect a refund in 3Q11.

● Expect all integration
activities to be
substantially
completed in the first
half of 2012

Expect all integration
activities to be
substantially
completed in the first
half of 2012

Appendix

Reconciliation of Non-GAAP Financial Measures

Notes: Please refer to our Pro Forma Combined Historical and Operating data, filed as an 8-K, for explanatory notes which are an integral part of
the pro forma combined historical financial data. The unaudited pro forma financial information makes certain assumptions for illustrative
purposes and is subject to change

Reconciliation of Non-GAAP Financial Measures

Frontier Communications Corp.

(NYSE: FTR)

Investor Relations

Frontier Communications Corp.

3 High Ridge Park

Stamford, CT 06905

203.614.4606

IR@FTR.com