• |
Built fiber to a record 185,000 locations in the third quarter, bringing total fiber passings to 3.8 million by the end of the third quarter
|
• |
Added a record 29,000 new fiber broadband customers during the quarter
|
• |
Delivered third-quarter revenue of $1.58 billion, net income of $126 million, and Adjusted EBITDA of $587 million
|
• |
Raised $1 billion of debt in October, contributing to liquidity of approximately $2.7 billion
|
• |
Continued to enhance leadership team with addition of Melissa Pint, Chief Digital Information Officer, and Charlon McIntosh, Chief Customer Operations Officer
|
• |
Consumer revenue was $800 million, a 4.2% decline from the third quarter of 2020, as strong fiber broadband revenue growth was offset by legacy video and voice declines
|
• |
Consumer fiber revenue was $409 million, a 0.7% increase over the third quarter of 2020 as strong consumer broadband revenue growth offset declines in voice, video, and wholesale
|
• |
Consumer fiber broadband revenue was $243 million, a 14.6% increase over the third quarter of 2020
|
• |
Consumer fiber customer net adds were 29,000, an increase of over 6,000, or 5.1%, from the third quarter of 2020.
|
• |
Consumer fiber broadband customer churn was 1.56%, a decline from 1.80% in the third quarter of 2020.
|
• |
Consumer fiber broadband ARPU was $63.35, a 10.0% increase over the third quarter of 2020, as customers continued to upgrade to faster speeds
|
• |
Business and wholesale revenue was $693 million, a 6.5% decline from the third quarter of 2020, primarily due to proactive strategic repositioning with key business partners to reset pricing in exchange
for higher win shares in the future and higher overall expected cash flow stability.
|
• |
Business and wholesale fiber broadband revenue was $275 million, a 1.4% decline from the third quarter of 2020.
|
• |
Business fiber broadband customer churn was 1.26%, a decline from 1.62% in the third quarter of 2020.
|
• |
Business fiber broadband ARPU was $104.76, a 3.9% increase over the third quarter of 2020.
|
• |
Adjusted EBITDA of $2.40 - $2.50 billion
|
• |
Cash capital expenditures of approximately $1.8 billion
|
• |
Fiber build to at least 600,000 new locations in 2021
|
• |
Cash taxes of approximately $50 million
|
• |
Cash interest payments of approximately $365 million
|
• |
Cash pension and OPEB of approximately $70 million (net of capitalization)
|
For the
three months ended
|
For the
two months ended
|
For the
one month ended
|
For the
three months ended
|
|||||||||||||||||
September 30,
2021
|
June 30,
2021
|
April 30,
2021
|
June 30,
2021
|
September 30,
2020
|
||||||||||||||||
($ in millions and shares in thousands, except per share amounts)
|
(Successor)
|
(Successor)
|
(Predecessor)
|
(Non-GAAP
Combined)
|
(Predecessor)
|
|||||||||||||||
Statement of Operations Data
|
||||||||||||||||||||
Revenue
|
$
|
1,576
|
$
|
1,061
|
$
|
555
|
$
|
1,616
|
$
|
1,726
|
||||||||||
Operating expenses:
|
||||||||||||||||||||
Network access expenses
|
177
|
127
|
66
|
193
|
226
|
|||||||||||||||
Network related expenses
|
413
|
269
|
144
|
413
|
431
|
|||||||||||||||
Selling, general and administrative expenses
|
421
|
269
|
129
|
398
|
404
|
|||||||||||||||
Depreciation and amortization
|
273
|
179
|
119
|
298
|
392
|
|||||||||||||||
Restructuring costs and other charges
|
8
|
11
|
5
|
16
|
3
|
|||||||||||||||
Total operating expenses
|
1,292
|
855
|
463
|
1,318
|
1,456
|
|||||||||||||||
Operating income
|
284
|
206
|
92
|
298
|
270
|
|||||||||||||||
Investment and other loss, net
|
(37
|
)
|
(2
|
)
|
(1
|
)
|
(3
|
)
|
(14
|
)
|
||||||||||
Reorganization items, net
|
-
|
-
|
4,196
|
4,196
|
(131
|
)
|
||||||||||||||
Interest expense
|
(90
|
)
|
(62
|
)
|
(29
|
)
|
(91
|
)
|
(121
|
)
|
||||||||||
Income before income taxes
|
157
|
142
|
4,258
|
4,400
|
4
|
|||||||||||||||
Income tax expense (benefit)
|
31
|
43
|
(223
|
)
|
(180
|
)
|
(11
|
)
|
||||||||||||
Net income
|
$
|
126
|
$
|
99
|
$
|
4,481
|
$
|
4,580
|
$
|
15
|
||||||||||
Weighted average shares outstanding - basic
|
244,403
|
244,401
|
104,662
|
NM
|
104,526
|
|||||||||||||||
Weighted average shares outstanding - diluted
|
245,667
|
244,401
|
105,002
|
NM
|
104,866
|
|||||||||||||||
Basic and diluted net earnings per common share
|
$
|
0.52
|
$
|
0.41
|
$
|
42.81
|
|
NM |
$
|
0.14
|
||||||||||
Diluted net earnings per common share
|
$
|
0.51
|
$
|
0.41
|
$
|
42.68
|
|
NM |
$
|
0.14
|
||||||||||
Other Financial Data:
|
||||||||||||||||||||
Capital expenditures
|
$
|
377
|
$
|
269
|
$
|
116
|
$
|
385
|
$
|
314
|
For the five months ended
|
For the four months ended
|
For the nine months ended
|
||||||||||||||
September 30,
|
April 30,
|
September 30,
|
September 30,
|
|||||||||||||
2021
|
2021
|
2021
|
2020
|
|||||||||||||
($ in millions and shares in thousands, except per share amounts)
|
(Successor)
|
(Predecessor)
|
(Non-GAAP
Combined)
|
(Predecessor)
|
||||||||||||
Statement of Operations Data
|
||||||||||||||||
Revenue
|
$
|
2,637
|
$
|
2,231
|
$
|
4,868
|
$
|
5,460
|
||||||||
Operating expenses:
|
||||||||||||||||
Network access expenses
|
304
|
264
|
568
|
767
|
||||||||||||
Network related expenses
|
682
|
566
|
1,248
|
1,305
|
||||||||||||
Selling, general and administrative expenses
|
690
|
537
|
1,227
|
1,255
|
||||||||||||
Depreciation and amortization
|
452
|
506
|
958
|
1,204
|
||||||||||||
Loss on disposal of Northwest Operations
|
-
|
-
|
-
|
160
|
||||||||||||
Restructuring costs and other charges
|
19
|
7
|
26
|
87
|
||||||||||||
Total operating expenses
|
2,147
|
1,880
|
4,027
|
4,778
|
||||||||||||
Operating income
|
490
|
351
|
841
|
682
|
||||||||||||
Investment and other income (loss), net
|
(39
|
)
|
1
|
(38
|
)
|
(29
|
)
|
|||||||||
Pension settlement costs
|
-
|
-
|
-
|
(159
|
)
|
|||||||||||
Reorganization items, net
|
-
|
4,171
|
4,171
|
(273
|
)
|
|||||||||||
Interest expense
|
(152
|
)
|
(118
|
)
|
(270
|
)
|
(664
|
)
|
||||||||
Income (loss) before income taxes
|
299
|
4,405
|
4,704
|
(443
|
)
|
|||||||||||
Income tax expense (benefit)
|
74
|
(136
|
)
|
(62
|
)
|
(91
|
)
|
|||||||||
Net income (loss)
|
225
|
4,541
|
4,766
|
(352
|
)
|
|||||||||||
Weighted average shares outstanding - basic
|
244,402
|
104,584
|
NM
|
104,460
|
||||||||||||
Weighted average shares outstanding - diluted
|
245,600
|
104,924
|
NM
|
104,460
|
||||||||||||
Basic net earnings (loss)
|
||||||||||||||||
per common share
|
$
|
0.92
|
$
|
43.42
|
NM
|
$
|
(3.37
|
)
|
||||||||
Diluted net earnings (loss) per common share
|
$
|
0.92
|
$
|
43.28
|
NM
|
$
|
(3.37
|
)
|
||||||||
Other Financial Data:
|
||||||||||||||||
Capital expenditures
|
$
|
646
|
$
|
500
|
$
|
1,146
|
$
|
825
|
For the three
months ended
|
For the two
months ended
|
For the one
month ended
|
For the three
month ended
|
For the three
month ended
|
||||||||||||||||
September 30,
2021
|
June 30,
2021
|
April 30,
2021
|
June 30,
2021
|
September 30,
2020
|
||||||||||||||||
($ in millions)
|
(Successor)
|
(Successor)
|
(Predecessor)
|
(Non-GAAP Combined)
|
(Predecessor)
|
|||||||||||||||
Selected Statement of Operations Data
|
||||||||||||||||||||
Revenue:
|
||||||||||||||||||||
Data and Internet services
|
$
|
834
|
$
|
556
|
$
|
283
|
$
|
839
|
$
|
838
|
||||||||||
Voice services
|
411
|
283
|
160
|
443
|
500
|
|||||||||||||||
Video services
|
149
|
105
|
54
|
159
|
186
|
|||||||||||||||
Other
|
99
|
62
|
30
|
92
|
103
|
|||||||||||||||
Revenue from contracts with customers
|
1,493
|
1,006
|
527
|
1,533
|
1,627
|
|||||||||||||||
Subsidy and other revenue
|
83
|
55
|
28
|
83
|
99
|
|||||||||||||||
Total revenue
|
$
|
1,576
|
$
|
1,061
|
$
|
555
|
$
|
1,616
|
$
|
1,726
|
||||||||||
Other Financial Data
|
||||||||||||||||||||
Revenue:
|
||||||||||||||||||||
Consumer (1)
|
$
|
800
|
$
|
543
|
$
|
283
|
$
|
826
|
$
|
865
|
||||||||||
Business and Wholesale (1)
|
693
|
463
|
244
|
707
|
762
|
|||||||||||||||
Revenue from contracts with customers
|
1,493
|
1,006
|
527
|
1,533
|
1,627
|
|||||||||||||||
Subsidy and other revenue
|
83
|
55
|
28
|
83
|
99
|
|||||||||||||||
Total revenue
|
$
|
1,576
|
$
|
1,061
|
$
|
555
|
$
|
1,616
|
$
|
1,726
|
For the five
months ended
|
For the four
months ended
|
For the nine months ended
|
||||||||||||||
September 30,
2021
|
April 30,
2021
|
September 30,
2021
|
September 30,
2020
|
|||||||||||||
($ in millions)
|
(Successor)
|
(Predecessor)
|
(Non-GAAP
Combined)
|
(Predecessor)
|
||||||||||||
|
||||||||||||||||
Selected Statement of Operations Data
|
||||||||||||||||
Revenue:
|
||||||||||||||||
Data and Internet services
|
$
|
1,390
|
$
|
1,125
|
$
|
2,515
|
$
|
2,542
|
||||||||
Voice services
|
694
|
647
|
1,341
|
1,538
|
||||||||||||
Video services
|
254
|
223
|
477
|
595
|
||||||||||||
Other
|
161
|
125
|
286
|
316
|
||||||||||||
Revenue from contracts with customers
|
2,499
|
2,120
|
4,619
|
4,991
|
||||||||||||
Subsidy and other revenue
|
138
|
111
|
249
|
277
|
||||||||||||
Total revenue
|
$
|
2,637
|
$
|
2,231
|
$
|
4,868
|
$
|
5,268
|
||||||||
Other Financial Data
|
||||||||||||||||
Revenue:
|
||||||||||||||||
Consumer (1)
|
$
|
1,343
|
$
|
1,133
|
$
|
2,476
|
$
|
2,644
|
||||||||
Business and Wholesale (1)
|
1,156
|
987
|
2,143
|
2,347
|
||||||||||||
Revenue from contracts with customers
|
2,499
|
2,120
|
4,619
|
4,991
|
||||||||||||
Subsidy and other revenue
|
138
|
111
|
249
|
277
|
||||||||||||
Total revenue
|
$
|
2,637
|
$
|
2,231
|
$
|
4,868
|
$
|
5,268
|
As of and for the three months ended
|
For the nine months ended
|
|||||||||||||||||||
September 30, 2021
|
June 30, 2021
|
September 30, 2020
|
September 30, 2021
|
September 30, 2020
|
||||||||||||||||
Consumer customer metrics (1)
|
||||||||||||||||||||
Customers (in thousands)
|
3,173
|
3,196
|
3,306
|
3,173
|
3,306
|
|||||||||||||||
Net customer additions (losses)
|
(23
|
)
|
(38
|
)
|
(36
|
)
|
(92
|
)
|
(107
|
)
|
||||||||||
|
||||||||||||||||||||
Average monthly consumer revenue per customer
|
$
|
83.77
|
$
|
85.65
|
$
|
86.75
|
$
|
85.49
|
$
|
87.50
|
||||||||||
Customer monthly churn
|
1.64
|
%
|
1.54
|
%
|
1.81
|
%
|
1.54
|
%
|
1.76
|
%
|
||||||||||
Broadband customer metrics (1) (2)
|
||||||||||||||||||||
Broadband customers (in thousands)
|
2,789
|
2,798
|
2,861
|
2,789
|
2,861
|
|||||||||||||||
Net customer additions (losses)
|
(9
|
)
|
(22
|
)
|
(20
|
)
|
(44
|
)
|
(58
|
)
|
||||||||||
Employees
|
15,803
|
16,005
|
16,302
|
15,803
|
16,302
|
(Unaudited)
Successor
|
Predecessor
|
|||||||
($ in millions)
|
September 30, 2021
|
December 31, 2020
|
||||||
ASSETS
|
||||||||
Current assets:
|
||||||||
Cash and cash equivalents
|
$
|
1,211
|
$
|
1,829
|
||||
Accounts receivable, net
|
452
|
553
|
||||||
Other current assets
|
124
|
272
|
||||||
Total current assets
|
1,787
|
2,654
|
||||||
Property, plant and equipment, net
|
8,918
|
12,931
|
||||||
Other assets
|
4,683
|
1,210
|
||||||
Total assets
|
$
|
15,388
|
$
|
16,795
|
||||
LIABILITIES AND EQUITY (DEFICIT)
|
||||||||
Current liabilities:
|
||||||||
Long-term debt due within one year
|
$
|
15
|
$
|
5,781
|
||||
Accounts payable and other current liabilities
|
1,465
|
1,359
|
||||||
Total current liabilities
|
1,480
|
7,140
|
||||||
Deferred income taxes and other liabilities
|
2,527
|
2,990
|
||||||
Liabilities subject to compromise
|
-
|
11,565
|
||||||
Long-term debt
|
6,996
|
-
|
||||||
Equity (deficit)
|
4,385
|
(4,900
|
)
|
|||||
Total liabilities and equity (deficit)
|
$
|
15,388
|
$
|
16,795
|
As of
September 30, 2021
|
||||
Leverage Ratio
|
||||
Numerator:
|
||||
Long-term debt due within one year
|
$
|
15
|
||
Long-term debt
|
6,996
|
|||
Total debt
|
$
|
7,011
|
||
Less: Cash and cash equivalents
|
(1,211
|
)
|
||
Net debt
|
$
|
5,800
|
||
Denominator:
|
||||
Adjusted EBITDA - last 4 quarters
|
$
|
2,583
|
||
Net Leverage Ratio
|
2.2
|
x
|
For the three months ended
|
For the three months ended
|
|||||||
September 30, 2021
|
September 30, 2020
|
|||||||
($ in millions)
|
(Successor)
|
(Predecessor)
|
||||||
Cash flows provided from (used by) operating activities:
|
||||||||
Net income
|
$
|
126
|
$
|
15
|
||||
Adjustments to reconcile net loss to net cash provided from (used by) operating activities:
|
||||||||
Depreciation and amortization
|
273
|
392
|
||||||
Pension settlement costs
|
-
|
318
|
||||||
Stock-based compensation
|
8
|
1
|
||||||
Amortization of deferred financing costs
|
-
|
2
|
||||||
Other adjustments
|
(6
|
)
|
1
|
|||||
Deferred income taxes
|
31
|
(8
|
)
|
|||||
Loss on disposal of Northwest Operations
|
-
|
1
|
||||||
Change in accounts receivable
|
53
|
40
|
||||||
Change in accounts payable and other liabilities
|
98
|
(264
|
)
|
|||||
Change in prepaid expenses, income taxes, and other assets
|
20
|
44
|
||||||
Net cash provided from operating activities
|
603
|
542
|
||||||
Cash flows provided from (used by) investing activities:
|
||||||||
Capital expenditures
|
(377
|
)
|
(314
|
)
|
||||
Proceeds on sale of assets
|
-
|
2
|
||||||
Other
|
1
|
(1
|
)
|
|||||
Net cash used by investing activities
|
(376
|
)
|
(313
|
)
|
||||
Cash flows used by financing activities:
|
||||||||
Long-term debt payments
|
(4
|
)
|
-
|
|||||
Repayment of revolving debt
|
-
|
(749
|
)
|
|||||
Financing costs paid
|
-
|
(5
|
)
|
|||||
Finance lease obligation payments
|
(5
|
)
|
-
|
|||||
Other
|
(1
|
)
|
-
|
|||||
Net cash used by financing activities
|
(10
|
)
|
(754
|
)
|
||||
Increase (decrease) in cash, cash equivalents, and restricted cash
|
217
|
(525
|
)
|
|||||
Cash, cash equivalents, and restricted cash at the beginning of the period
|
1,044
|
2,350
|
||||||
Cash, cash equivalents, and restricted cash at the end of the period
|
$
|
1,261
|
$
|
1,825
|
||||
Supplemental cash flow information:
|
||||||||
Cash paid during the period for:
|
||||||||
Interest
|
$
|
37
|
$
|
1
|
||||
Income tax payments, net
|
$
|
3
|
$
|
-
|
||||
Reorganization items, net
|
$
|
-
|
$
|
34
|
For the five months ended
|
For the four months ended
|
For the nine months ended
|
||||||||||||||
September 30, 2021
|
April 30, 2021
|
September 30, 2021
|
September 30, 2020
|
|||||||||||||
($ in millions)
|
(Successor)
|
(Predecessor)
|
(Non-GAAP Combined)
|
(Predecessor)
|
||||||||||||
Cash flows provided from (used by) operating activities:
|
||||||||||||||||
Net income (loss)
|
$
|
225
|
$
|
4,541
|
$
|
4,766
|
$
|
(352
|
)
|
|||||||
Adjustments to reconcile net loss to net cash provided from (used by) operating activities:
|
||||||||||||||||
Depreciation and amortization
|
452
|
506
|
958
|
1,204
|
||||||||||||
Pension settlement costs
|
-
|
-
|
-
|
159
|
||||||||||||
Stock-based compensation
|
8
|
(1
|
)
|
7
|
3
|
|||||||||||
Amortization of deferred financing costs
|
-
|
-
|
-
|
13
|
||||||||||||
Non-cash reorganization items, net
|
-
|
(5,467
|
)
|
(5,467
|
)
|
85
|
||||||||||
Other adjustments
|
(11
|
)
|
1
|
(10
|
)
|
3
|
||||||||||
Deferred income taxes
|
68
|
(148
|
)
|
(80
|
)
|
(100
|
)
|
|||||||||
Loss on disposal of Northwest Operations
|
-
|
-
|
-
|
160
|
||||||||||||
Change in accounts receivable
|
65
|
36
|
101
|
63
|
||||||||||||
Change in accounts payable and other liabilities
|
149
|
(168
|
)
|
(19
|
)
|
334
|
||||||||||
Change in prepaid expenses, income taxes, and other assets
|
27
|
46
|
73
|
(80
|
)
|
|||||||||||
Net cash provided from (used by) operating activities
|
983
|
(654
|
)
|
329
|
1,492
|
|||||||||||
Cash flows provided from (used by) investing activities:
|
||||||||||||||||
Capital expenditures
|
(646
|
)
|
(500
|
)
|
(1,146
|
)
|
(825
|
)
|
||||||||
Proceeds from sale of Northwest Operations
|
-
|
-
|
-
|
1,131
|
||||||||||||
Proceeds on sale of assets
|
-
|
9
|
9
|
7
|
||||||||||||
Other
|
1
|
1
|
2
|
2
|
||||||||||||
Net cash provided from (used by) investing activities
|
(645
|
)
|
(490
|
)
|
(1,135
|
)
|
315
|
|||||||||
Cash flows used by financing activities:
|
||||||||||||||||
Long-term debt payments
|
(8
|
)
|
(1
|
)
|
(9
|
)
|
(5
|
)
|
||||||||
Proceeds from long-term debt borrowings
|
-
|
225
|
225
|
-
|
||||||||||||
Repayment of revolving debt
|
-
|
-
|
-
|
(749
|
)
|
|||||||||||
Financing costs paid
|
-
|
(4
|
)
|
(4
|
)
|
(19
|
)
|
|||||||||
Finance lease obligation payments
|
(9
|
)
|
(7
|
)
|
(16
|
)
|
(18
|
)
|
||||||||
Other
|
-
|
(16
|
)
|
(16
|
)
|
-
|
||||||||||
Net cash provided from (used by) financing activities
|
(17
|
)
|
197
|
180
|
(791
|
)
|
||||||||||
Increase (decrease) in cash, cash equivalents, and restricted cash
|
321
|
(947
|
)
|
(626
|
)
|
1,016
|
||||||||||
Cash, cash equivalents, and restricted cash at the beginning of the period
|
940
|
1,887
|
1,887
|
809
|
||||||||||||
Cash, cash equivalents, and restricted cash at the end of the period
|
$
|
1,261
|
$
|
940
|
$
|
1,261
|
$
|
1,825
|
||||||||
Supplemental cash flow information:
|
||||||||||||||||
Cash paid during the period for:
|
||||||||||||||||
Interest
|
$
|
121
|
$
|
84
|
$
|
205
|
$
|
548
|
||||||||
Income tax payments, net
|
$
|
27
|
$
|
9
|
$
|
36
|
$
|
6
|
||||||||
Reorganization items, net
|
$
|
-
|
$
|
1,397
|
$
|
1,397
|
$
|
134
|
For the three months ended
|
For the nine months ended
|
|||||||||||||||||||
($ in millions)
|
September 30,
2021
|
June 30,
2021
|
September 30,
2020
|
September 30,
2021
|
September 30,
2020
|
|||||||||||||||
(Successor)
|
(Non-GAAP
Combined)
|
(Predecessor)
|
(Non-GAAP
Combined)
|
(Predecessor)
|
||||||||||||||||
Net income (loss)
|
$
|
126
|
$
|
4,580
|
$
|
15
|
$
|
4,766
|
$
|
(478
|
)
|
|||||||||
Add back (subtract):
|
||||||||||||||||||||
Income tax expense (benefit)
|
31
|
(180
|
)
|
(11
|
)
|
(62
|
)
|
(91
|
)
|
|||||||||||
Interest expense
|
90
|
91
|
121
|
270
|
664
|
|||||||||||||||
Investment and other loss, net
|
37
|
3
|
14
|
38
|
29
|
|||||||||||||||
Pension settlement costs
|
-
|
-
|
-
|
-
|
159
|
|||||||||||||||
Reorganization items, net
|
-
|
(4,196
|
)
|
131
|
(4,171
|
)
|
273
|
|||||||||||||
Operating income
|
284
|
298
|
270
|
841
|
556
|
|||||||||||||||
Depreciation and amortization
|
273
|
298
|
392
|
958
|
1,204
|
|||||||||||||||
EBITDA
|
$
|
557
|
$
|
596
|
$
|
662
|
$
|
1,799
|
$
|
1,760
|
||||||||||
Add back:
|
||||||||||||||||||||
Pension/OPEB expense
|
$
|
18
|
$
|
21
|
$
|
24
|
$
|
62
|
$
|
70
|
||||||||||
Restructuring costs and other charges
|
8
|
16
|
3
|
26
|
87
|
|||||||||||||||
Stock-based compensation
|
8
|
-
|
1
|
7
|
3
|
|||||||||||||||
Storm-related insurance proceeds
|
(4
|
)
|
-
|
-
|
(4
|
)
|
(1
|
)
|
||||||||||||
Loss on disposal of Northwest Operations
|
-
|
-
|
-
|
-
|
160
|
|||||||||||||||
Adjusted EBITDA
|
$
|
587
|
$
|
633
|
$
|
690
|
$
|
1,890
|
$
|
2,079
|
||||||||||
EBITDA margin
|
35.3
|
%
|
36.9
|
%
|
38.4
|
%
|
37.0
|
%
|
33.4
|
%
|
||||||||||
Adjusted EBITDA margin
|
37.2
|
%
|
39.2
|
%
|
40.0
|
%
|
38.8
|
%
|
39.5
|
%
|
For the three months ended
|
For the nine months ended
|
|||||||||||||||||||
September 30,
2021
|
June 30,
2021
|
September 30,
2020
|
September 30,
2021
|
September 30,
2020
|
||||||||||||||||
($ in millions)
|
(Successor)
|
(Non-GAAP
Combined)
|
(Predecessor)
|
(Non-GAAP
Combined)
|
(Predecessor)
|
|||||||||||||||
Adjusted Operating Expenses
|
||||||||||||||||||||
Total operating expenses
|
$
|
1,292
|
$
|
1,318
|
$
|
1,456
|
$
|
4,027
|
$
|
4,712
|
||||||||||
Subtract:
|
||||||||||||||||||||
Depreciation and amortization
|
273
|
298
|
392
|
958
|
1,204
|
|||||||||||||||
Loss on disposal of Northwest Operations
|
-
|
-
|
-
|
-
|
160
|
|||||||||||||||
Pension/OPEB expense
|
18
|
21
|
24
|
62
|
70
|
|||||||||||||||
Restructuring costs and other charges
|
8
|
16
|
3
|
26
|
87
|
|||||||||||||||
Stock-based compensation
|
8
|
-
|
1
|
7
|
3
|
|||||||||||||||
Storm-related insurance proceeds
|
(4
|
)
|
-
|
-
|
(4
|
)
|
(1
|
)
|
||||||||||||
Adjusted operating expenses
|
$
|
989
|
$
|
983
|
$
|
1,036
|
$
|
2,978
|
$
|
3,189
|
For the three months ended
|
||||||||||||||||||||
September 30, 2021
|
June 30, 2021
|
September 30, 2020
|
||||||||||||||||||
(Successor)
|
(Non-GAAP
Combined)
|
(Predecessor)
|
||||||||||||||||||
|
|
|
|
|
||||||||||||||||
($ in millions)
|
Consolidated
Frontier
|
Consolidated
Frontier
|
Consolidated
Frontier
|
Northwest
Ops |
Remaining
Properties
|
|||||||||||||||
Data and Internet services
|
$
|
834
|
$
|
839
|
$
|
838
|
$
|
-
|
$
|
838
|
||||||||||
Voice services
|
411
|
443
|
500
|
-
|
500
|
|||||||||||||||
Video services
|
149
|
159
|
186
|
-
|
186
|
|||||||||||||||
Other
|
99
|
92
|
103
|
-
|
103
|
|||||||||||||||
Revenue from contracts with customers
|
1,493
|
1,533
|
1,627
|
-
|
1,627
|
|||||||||||||||
Subsidy revenue
|
83
|
83
|
99
|
-
|
99
|
|||||||||||||||
Revenue
|
1,576
|
1,616
|
1,726
|
-
|
1,726
|
|||||||||||||||
Operating expenses (2):
|
||||||||||||||||||||
Network access expenses
|
177
|
193
|
226
|
-
|
226
|
|||||||||||||||
Network related expenses
|
413
|
413
|
431
|
-
|
431
|
|||||||||||||||
Selling, general and administrative expenses
|
421
|
398
|
404
|
-
|
404
|
|||||||||||||||
Depreciation and amortization
|
273
|
298
|
392
|
-
|
392
|
|||||||||||||||
Restructuring costs and other charges
|
8
|
16
|
3
|
-
|
3
|
|||||||||||||||
Total operating expenses
|
1,292
|
1,318
|
1,456
|
-
|
1,456
|
|||||||||||||||
Operating income
|
284
|
298
|
270
|
-
|
270
|
|||||||||||||||
Consumer (3)
|
$
|
800
|
$
|
826
|
$
|
865
|
$
|
-
|
$
|
865
|
||||||||||
Business and wholesale (3)
|
693
|
707
|
762
|
-
|
762
|
|||||||||||||||
Revenue from contracts with customers
|
1,493
|
1,533
|
1,627
|
-
|
1,627
|
|||||||||||||||
Subsidy revenue
|
83
|
83
|
99
|
-
|
99
|
|||||||||||||||
Total revenue
|
$
|
1,576
|
$
|
1,616
|
$
|
1,726
|
$
|
-
|
$
|
1,726
|
For the nine months ended
|
||||||||||||||||
September 30, 2021
|
September 30, 2020
|
|||||||||||||||
(Non-GAAP
Combined)
|
(Predecessor)
|
|||||||||||||||
($ in millions)
|
Consolidated
Frontier
|
Consolidated
Frontier
|
Northwest
Ops (1)
|
Remaining
Properties
|
||||||||||||
Data and Internet services
|
$
|
2,515
|
$
|
2,644
|
$
|
102
|
$
|
2,542
|
||||||||
Voice services
|
1,341
|
1,595
|
57
|
1,538
|
||||||||||||
Video services
|
477
|
608
|
13
|
595
|
||||||||||||
Other
|
286
|
328
|
12
|
316
|
||||||||||||
Revenue from contracts with customers
|
4,619
|
5,175
|
184
|
4,991
|
||||||||||||
Subsidy revenue
|
249
|
285
|
8
|
277
|
||||||||||||
Revenue
|
4,868
|
5,460
|
192
|
5,268
|
||||||||||||
Operating expenses (2):
|
||||||||||||||||
Network access expenses
|
568
|
767
|
14
|
753
|
||||||||||||
Network related expenses
|
1,248
|
1,305
|
26
|
1,279
|
||||||||||||
Selling, general and administrative expenses
|
1,227
|
1,255
|
26
|
1,229
|
||||||||||||
Depreciation and amortization
|
958
|
1,204
|
-
|
1,204
|
||||||||||||
Loss on disposal of Northwest Operations
|
-
|
160
|
-
|
160
|
||||||||||||
Restructuring costs and other charges
|
26
|
87
|
-
|
87
|
||||||||||||
Total operating expenses
|
4,027
|
4,778
|
66
|
4,712
|
||||||||||||
Operating income
|
841
|
682
|
126
|
556
|
||||||||||||
Consumer (3)
|
$
|
2,476
|
$
|
2,746
|
$
|
102
|
$
|
2,644
|
||||||||
Business and wholesale (3)
|
2,143
|
2,429
|
82
|
2,347
|
||||||||||||
Revenue from contracts with customers
|
4,619
|
5,175
|
184
|
4,991
|
||||||||||||
Subsidy revenue
|
249
|
285
|
8
|
277
|
||||||||||||
Total revenue
|
$
|
4,868
|
$
|
5,460
|
$
|
192
|
$
|
5,268
|
As of and for the three months ended
|
||||||||||||||||||||
September 30, 2021
|
June 30, 2021
|
September 30, 2020
|
||||||||||||||||||
Consolidated
Frontier
|
Consolidated
Frontier
|
Consolidated
Frontier
|
Northwest
Ops
|
Remaining
Properties
|
||||||||||||||||
Consumer customer metrics (1)
|
||||||||||||||||||||
Customers (in thousands)
|
3,173
|
3,196
|
3,306
|
-
|
3,306
|
|||||||||||||||
Net customer additions (losses)
|
(23
|
)
|
(38
|
)
|
(36
|
)
|
-
|
(36
|
)
|
|||||||||||
Average monthly consumer revenue per customer
|
$
|
83.77
|
$
|
85.65
|
$
|
86.75
|
N/A
|
$
|
86.75
|
|||||||||||
Customer monthly churn
|
1.64
|
%
|
1.54
|
%
|
1.81
|
%
|
N/A
|
1.81
|
%
|
|||||||||||
Broadband customer metrics (1)
|
||||||||||||||||||||
Broadband customers (in thousands)
|
2,789
|
2,798
|
2,861
|
N/A
|
2,861
|
|||||||||||||||
Net customer additions (losses)
|
(9
|
)
|
(22
|
)
|
(20
|
)
|
N/A
|
(20
|
)
|
|||||||||||
Employees
|
15,803
|
16,005
|
16,302
|
-
|
16,302
|
For the nine months ended
|
||||||||||||||||
September 30, 2021
|
September 30, 2020
|
|||||||||||||||
Consolidated
Frontier
|
Consolidated
Frontier
|
Northwest
Ops
|
Remaining
Properties
|
|||||||||||||
Consumer customer metrics (1)
|
||||||||||||||||
Customers (in thousands)
|
3,173
|
3,306
|
-
|
3,306
|
||||||||||||
Net customer additions (losses)
|
(92
|
)
|
(442
|
)
|
(335
|
)
|
(107
|
)
|
||||||||
Average monthly consumer revenue per customer
|
$
|
85.49
|
$
|
87.06
|
$
|
76.74
|
$
|
87.50
|
||||||||
Customer monthly churn
|
1.54
|
%
|
1.75
|
%
|
1.51
|
%
|
1.76
|
%
|
||||||||
Broadband customer metrics (1)
|
||||||||||||||||
Broadband customer (in thousands)
|
2,789
|
2,861
|
N/A
|
2,861
|
||||||||||||
Net customer additions (losses)
|
(44
|
)
|
(58
|
)
|
N/A
|
(58
|
)
|
For the three months ended
|
||||||||||||||||||||
September 30, 2021
|
June 30, 2021
|
September 30, 2020
|
||||||||||||||||||
(Successor)
|
(Non-GAAP Combined)
|
(Predecessor)
|
||||||||||||||||||
($ in millions)
|
Consolidated
Frontier
|
Consolidated
Frontier
|
Consolidated
Frontier
|
Northwest
Ops
|
Remaining
Properties
|
|||||||||||||||
Net income (loss)
|
$
|
126
|
$
|
4,580
|
$
|
15
|
$
|
-
|
$
|
15
|
||||||||||
Add back (subtract):
|
||||||||||||||||||||
Income tax expense (benefit)
|
31
|
(180
|
)
|
(11
|
)
|
-
|
(11
|
)
|
||||||||||||
Interest expense
|
90
|
91
|
121
|
-
|
121
|
|||||||||||||||
Investment and other loss, net
|
37
|
3
|
14
|
-
|
14
|
|||||||||||||||
Pension settlement costs
|
-
|
-
|
-
|
-
|
-
|
|||||||||||||||
Reorganization items, net
|
-
|
(4,196
|
)
|
131
|
-
|
131
|
||||||||||||||
Operating income
|
284
|
298
|
270
|
-
|
270
|
|||||||||||||||
Depreciation and amortization
|
273
|
298
|
392
|
-
|
392
|
|||||||||||||||
EBITDA
|
557
|
596
|
662
|
-
|
662
|
|||||||||||||||
Add back:
|
||||||||||||||||||||
Pension/OPEB expense
|
18
|
21
|
24
|
-
|
24
|
|||||||||||||||
Restructuring costs and other charges
|
8
|
16
|
3
|
-
|
3
|
|||||||||||||||
Stock-based compensation expense
|
8
|
-
|
1
|
-
|
1
|
|||||||||||||||
Storm-related insurance proceeds
|
(4
|
)
|
-
|
-
|
-
|
-
|
||||||||||||||
Adjusted EBITDA
|
$
|
587
|
$
|
633
|
$
|
690
|
$
|
-
|
$
|
690
|
||||||||||
EBITDA margin
|
35.3
|
%
|
36.9
|
%
|
38.4
|
%
|
N/A
|
%
|
38.4
|
%
|
||||||||||
Adjusted EBITDA margin
|
37.2
|
%
|
39.2
|
%
|
40.0
|
%
|
N/A
|
|
40.0
|
%
|
||||||||||
Free Cash Flow
|
||||||||||||||||||||
Net cash provided from (used by) operating activities
|
$
|
603
|
$
|
(939
|
)
|
$
|
542
|
N/A
|
N/A
|
|||||||||||
Capital expenditures
|
(377
|
)
|
(385
|
)
|
(314
|
)
|
N/A
|
N/A
|
||||||||||||
Operating free cash flow
|
$
|
226
|
$
|
(1,324
|
)
|
$
|
228
|
N/A
|
N/A
|
For the nine months ended
|
||||||||||||||||
September 30, 2021
|
September 30, 2020
|
|||||||||||||||
(Non-GAAP Combined)
|
(Predecessor)
|
|||||||||||||||
($ in millions)
|
Consolidated
Frontier
|
Consolidated
Frontier
|
Northwest
Ops (1)
|
Remaining
Properties
|
||||||||||||
Net income (loss)
|
$
|
4,766
|
$
|
(352
|
)
|
$
|
126
|
$
|
(478
|
)
|
||||||
Add back (subtract):
|
||||||||||||||||
Income tax benefit
|
(62
|
)
|
(91
|
)
|
-
|
(91
|
)
|
|||||||||
Interest expense
|
270
|
664
|
-
|
664
|
||||||||||||
Investment and other loss, net
|
38
|
29
|
-
|
29
|
||||||||||||
Pension settlement costs
|
-
|
159
|
-
|
159
|
||||||||||||
Reorganization items, net
|
(4,171
|
)
|
273
|
-
|
273
|
|||||||||||
Operating income
|
841
|
682
|
126
|
556
|
||||||||||||
Depreciation and amortization
|
958
|
1,204
|
-
|
1,204
|
||||||||||||
EBITDA
|
1,799
|
1,886
|
126
|
1,760
|
||||||||||||
Add back:
|
||||||||||||||||
Pension/OPEB expense
|
62
|
70
|
-
|
70
|
||||||||||||
Restructuring costs and other charges
|
26
|
87
|
-
|
87
|
||||||||||||
Stock-based compensation
|
7
|
3
|
-
|
3
|
||||||||||||
Storm-related insurance proceeds
|
(4
|
)
|
(1
|
)
|
-
|
(1
|
)
|
|||||||||
Loss on disposal of Northwest Operations
|
-
|
160
|
-
|
160
|
||||||||||||
Adjusted EBITDA
|
$
|
1,890
|
$
|
2,205
|
$
|
126
|
$
|
2,079
|
||||||||
EBITDA margin
|
37.0
|
%
|
34.5
|
%
|
65.6
|
%
|
33.4
|
%
|
||||||||
Adjusted EBITDA margin
|
38.8
|
%
|
40.4
|
%
|
65.6
|
%
|
39.5
|
%
|
||||||||
|
||||||||||||||||
Free Cash Flow
|
||||||||||||||||
Net cash provided from (used by) operating activities
|
$
|
329
|
$
|
1,492
|
N/A
|
N/A
|
||||||||||
Capital expenditures
|
(1,146
|
)
|
(825
|
)
|
N/A
|
N/A
|
||||||||||
Operating free cash flow
|
$
|
(817
|
)
|
$
|
667
|
N/A
|
N/A
|
For the three months ended
|
||||||||||||||||||||
September 30,
2021
|
June 30,
2021
|
September 30,
2020
|
||||||||||||||||||
(Successor)
|
(Non-GAAP Combined)
|
(Predecessor)
|
||||||||||||||||||
($ in millions)
|
Consolidated
Frontier
|
Consolidated
Frontier
|
Consolidated
Frontier
|
Northwest
Ops
|
Remaining
Properties
|
|||||||||||||||
Adjusted Operating Expenses
|
||||||||||||||||||||
Total operating expenses (2)
|
$
|
1,292
|
$
|
1,318
|
$
|
1,456
|
$
|
-
|
$
|
1,456
|
||||||||||
Subtract:
|
||||||||||||||||||||
Depreciation and amortization
|
273
|
298
|
392
|
-
|
392
|
|||||||||||||||
Pension/OPEB expense
|
18
|
21
|
24
|
-
|
24
|
|||||||||||||||
Restructuring costs and other charges
|
8
|
16
|
3
|
-
|
3
|
|||||||||||||||
Stock-based compensation
|
8
|
-
|
1
|
-
|
1
|
|||||||||||||||
Storm-related insurance proceeds
|
(4
|
)
|
-
|
-
|
-
|
-
|
||||||||||||||
Adjusted operating expenses
|
$
|
989
|
$
|
983
|
$
|
1,036
|
$
|
-
|
$
|
1,036
|
For the nine months ended
|
||||||||||||||||
September 30,
2021
|
September 30,
2020
|
|||||||||||||||
(Non-GAAP Combined)
|
(Predecessor)
|
|||||||||||||||
($ in millions)
|
Consolidated
Frontier
|
Consolidated
Frontier
|
Northwest
Ops (1)
|
Remaining
Properties
|
||||||||||||
Adjusted Operating Expenses
|
||||||||||||||||
Total operating expenses (2)
|
$
|
4,027
|
$
|
4,778
|
$
|
66
|
$
|
4,712
|
||||||||
Subtract:
|
||||||||||||||||
Depreciation and amortization
|
958
|
1,204
|
-
|
1,204
|
||||||||||||
Loss on disposal of Northwest Operations
|
-
|
160
|
-
|
160
|
||||||||||||
Pension/OPEB expense
|
62
|
70
|
-
|
70
|
||||||||||||
Restructuring costs and other charges
|
26
|
87
|
-
|
87
|
||||||||||||
Stock-based compensation expense
|
7
|
3
|
-
|
3
|
||||||||||||
Storm-related insurance proceeds
|
(4
|
)
|
(1
|
)
|
-
|
(1
|
)
|
|||||||||
Adjusted operating expenses
|
$
|
2,978
|
$
|
3,255
|
$
|
66
|
$
|
3,189
|
As of or for the Quarter Ended
|
|||||||||||||
September 30, 2021
|
June 30, 2021
|
September 30, 2020
|
|||||||||||
Broadband Revenue ($ in millions)
|
|||||||||||||
Total Company
|
Fiber
|
$
|
274
|
$
|
268
|
$
|
240
|
||||||
|
Copper |
204
|
207
|
211
|
|||||||||
|
Total |
$
|
478
|
$
|
475
|
$
|
451
|
||||||
Estimated Fiber
Passings (in millions) (2)
|
|||||||||||||
Base Fiber Passings
|
3.2
|
3.2
|
3.2
|
||||||||||
Total Fiber Passings
|
3.8
|
3.6
|
3.3
|
||||||||||
Estimated Broadband
Fiber % Penetration (2)
|
|||||||||||||
Base Fiber Penetration
|
41.5
|
%
|
41.2
|
%
|
41.0
|
%
|
|||||||
Total Fiber Penetration
|
37.0
|
%
|
38.1
|
%
|
40.8
|
%
|
|||||||
Broadband Customers,
end of period (in thousands) (2)
|
|||||||||||||
Consumer
|
Fiber
|
1,292
|
1,263
|
1,229
|
|||||||||
Copper |
1,264
|
1,297
|
1,381
|
||||||||||
Total |
2,556
|
2,560
|
2,610
|
||||||||||
Business (1)
|
Fiber
|
95
|
95
|
94
|
|||||||||
Copper |
138
|
143
|
157
|
||||||||||
Total |
233
|
238
|
251
|
||||||||||
Broadband Net Adds
(in thousands) (2)
|
|||||||||||||
Consumer
|
Fiber
|
29
|
12
|
6
|
|||||||||
Copper |
(33
|
)
|
(30
|
)
|
(20
|
)
|
|||||||
Total |
(4
|
)
|
(18
|
)
|
(14
|
)
|
|||||||
Business (1)
|
Fiber
|
-
|
-
|
1
|
|||||||||
Copper |
(4
|
)
|
(4
|
)
|
(7
|
)
|
|||||||
Total |
(4
|
)
|
(4
|
)
|
(6
|
)
|
|||||||
Broadband Churn (2)
|
|||||||||||||
Consumer
|
Fiber
|
1.56
|
%
|
1.53
|
%
|
1.80
|
%
|
||||||
Copper |
1.89
|
%
|
1.67
|
%
|
2.11
|
%
|
|||||||
Total |
1.73
|
%
|
1.60
|
%
|
1.97
|
%
|
|||||||
Business (1)
|
Fiber
|
1.26
|
%
|
1.22
|
%
|
1.62
|
%
|
||||||
Copper |
1.62
|
%
|
1.69
|
%
|
2.03
|
%
|
|||||||
Total |
1.48
|
%
|
1.50
|
%
|
1.88
|
%
|
|||||||
Broadband ARPU (2) (3)
|
|||||||||||||
Consumer
|
Fiber
|
$
|
63.35
|
$
|
63.10
|
$
|
57.58
|
||||||
Copper |
45.44
|
44.80
|
42.16
|
||||||||||
Total |
$
|
54.38
|
$
|
53.75
|
$
|
49.38
|
|||||||
Business (1)
|
Fiber
|
$
|
104.76
|
$
|
104.66
|
$
|
100.85
|
||||||
Copper |
64.03
|
64.20
|
64.92
|
||||||||||
Total |
$
|
80.47
|
$
|
80.20
|
$
|
78.11
|
For the nine months ended
|
|||||||||
September 30, 2021
|
September 30, 2020
|
||||||||
Broadband Revenue
|
|||||||||
Total Company
|
Fiber
|
$
|
798
|
N/A
|
|||||
Copper |
618
|
N/A
|
|||||||
Total |
$
|
1,416
|
N/A
|
||||||
Broadband Churn (2)
|
|||||||||
Consumer
|
Fiber
|
1.50
|
%
|
1.75
|
%
|
||||
Copper |
1.73
|
%
|
2.17
|
%
|
|||||
|
Total |
1.62
|
%
|
1.98
|
%
|
||||
Business (1)
|
Fiber
|
1.27
|
%
|
1.95
|
%
|
||||
|
Copper |
1.68
|
%
|
2.03
|
%
|
||||
|
Total |
1.52
|
%
|
2.00
|
%
|
||||
Broadband ARPU
(2) (3)
|
|||||||||
Consumer
|
Fiber
|
$
|
62.38
|
$
|
57.14
|
||||
|
Copper |
44.47
|
41.74
|
||||||
|
Total |
$
|
53.25
|
$
|
48.87
|
||||
Business (1)
|
Fiber
|
$
|
103.55
|
$
|
100.61
|
||||
|
Copper |
64.65
|
65.01
|
||||||
|
Total |
$
|
80.05
|
$
|
77.83
|