Frontier Reports First-Quarter 2024 Results
Frontier Communications Parent, Inc. (NASDAQ: FYBR) reported first-quarter 2024 results, showing year-over-year revenue growth for the first time since 2015 and accelerated Adjusted EBITDA growth. The company achieved a 24% increase in fiber broadband revenue, adding 322,000 fiber passings and 88,000 fiber broadband customers. Operating income was $90 million with net income of $1 million. Adjusted EBITDA reached $547 million, a 5.4% increase year-over-year. The company generated $335 million in net cash from operations and had total cash capital investment of $1.0 billion. Consumer revenue increased 3.4% year-over-year to $787 million, with fiber revenue up by 12.7% to $505 million. Business and Wholesale revenue was stable at $659 million, with fiber revenue up by 6.8% to $300 million. Frontier reaffirmed its operational and financial expectations for 2024, including Adjusted EBITDA of $2.20 - $2.25 billion and cash capital investment of $3.00 - $3.20 billion.
Year-over-year revenue growth for the first time since 2015
Accelerated Adjusted EBITDA growth of 5%
24% increase in fiber broadband revenue
Added 322,000 fiber passings and 88,000 fiber broadband customers
Operating income of $90 million with net income of $1 million
Adjusted EBITDA of $547 million, a 5.4% increase year-over-year
Generated $335 million in net cash from operations
Total cash capital investment of $1.0 billion
Consumer revenue increased 3.4% year-over-year to $787 million
Consumer fiber revenue up by 12.7% to $505 million
Business and Wholesale fiber revenue up by 6.8% to $300 million
Reaffirmed operational and financial expectations for 2024
Declines in copper-based products offset growth in fiber-based products
Consumer fiber broadband ARPU decreased by 3.5% year-over-year
Business and Wholesale fiber broadband ARPU decreased by 3.5% year-over-year
Insights
- Delivered year-over-year revenue growth for the first quarter since 2015
-
Accelerated Adjusted EBITDA growth to
5% year-over-year -
Accelerated fiber broadband revenue growth of
24% year-over-year driven by strong customer and ARPU growth
“We had a strong start to the year and achieved another major inflection point. We grew revenue year-over-year for the first time since 2015 and delivered our third consecutive quarter of Adjusted EBITDA growth,” said Nick Jeffery, President and Chief Executive Officer of Frontier. “We also grew our customer base and increased ARPU in the quarter, resulting in a
Jeffery continued, “Our first-quarter results perfectly illustrate how our fast-growing fiber business is systematically improving our financial performance. Thanks to our team’s relentless execution, we’re in a strong position to keep adding value to our customers and deliver accelerated growth in 2024.”
First-Quarter 2024 Highlights
- Added 322,000 fiber passings to reach 6.8 million total locations passed with fiber
-
Added 88,000 fiber broadband customers, resulting in fiber broadband customer growth of
18% year-over-year -
Revenue of
$1.46 billion 1.5% year-over-year as growth in fiber-based products was partly offset by declines in copper-based products -
Operating income of
$90 million $1 million -
Adjusted EBITDA of
$547 million 5.4% year-over-year driven by revenue growth and cost savings1 -
Cash capital expenditures of
$666 million $363 million $1.0 billion -
Generated net cash from operations of
$335 million
First-Quarter 2024 Consumer Results
-
Consumer revenue of
$787 million 3.4% year-over-year as growth in fiber was partly offset by declines in copper -
Consumer fiber revenue of
$505 million 12.7% year-over-year as growth in broadband was partly offset by declines in video and voice -
Consumer fiber broadband revenue of
$375 million 25.8% year-over-year driven by growth in both fiber broadband customers and ARPU -
Consumer fiber broadband customer net additions of 85,000 resulted in consumer fiber broadband customer growth of
18.3% year-over-year -
Consumer fiber broadband customer churn of
1.24% compared to1.20% in the first quarter of 2023 -
Consumer fiber broadband ARPU of
$65.18 6.1% year-over-year
First-Quarter 2024 Business and Wholesale Results
-
Business and Wholesale revenue of
$659 million -
Business and Wholesale fiber revenue of
$300 million 6.8% year-over-year as growth in data was partly offset by declines in voice -
Business and Wholesale fiber broadband customer net additions of 3,000 resulted in Business and Wholesale fiber broadband customer growth of
11.9% year-over-year -
Business and Wholesale fiber broadband customer churn of
1.32% compared to1.43% in the first quarter of 20233 -
Business and Wholesale fiber broadband ARPU of
$98.40 3.5% year-over-year4
Capital Structure
As of March 31, 2024, Frontier had total liquidity of
2024 Outlook6
Frontier today reaffirmed all operational and financial expectations for 2024.
Frontier’s guidance for the full-year 2024 is:
-
Adjusted EBITDA of
$2.20 $2.25 billion - Fiber passing additions of 1.3 million
-
Cash capital investment of
$3.00 $3.20 billion -
Cash taxes of approximately
$20 million -
Net cash interest payments of approximately
$750 million -
Pension and OPEB expense of approximately
$40 million -
Cash pension and OPEB contributions of approximately
$125 million
Conference Call Information
As previously announced, Frontier will host a conference call to discuss first-quarter 2024 results today, May 3, 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.
About Frontier
Frontier (NASDAQ: FYBR) is the largest pure-play fiber provider in the
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, 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, the containment of the impact on our operations of the recently disclosed cybersecurity incident, 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, including the recently disclosed unauthorized access by a third party to portions of our information technology environment; 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
Frontier Communications Parent, Inc. |
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Unaudited Financial Data |
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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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March 31, |
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March 31, |
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($ in millions and shares in thousands, except per share amounts) |
|
2024 |
|
2023 |
||
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||||
Statements of Operations Data |
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|
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Revenue |
|
$ |
1,462 |
|
$ |
1,440 |
|
|
|
|
|
|
|
Operating expenses: |
|
|
|
|
|
|
Cost of service |
|
|
522 |
|
|
542 |
Selling, general, and administrative expenses |
|
|
428 |
|
|
417 |
Depreciation and amortization |
|
|
388 |
|
|
330 |
Restructuring costs and other charges |
|
|
34 |
|
|
8 |
Total operating expenses |
|
|
1,372 |
|
|
1,297 |
|
|
|
|
|
|
|
Operating income |
|
|
90 |
|
|
143 |
|
|
|
|
|
|
|
Investment and other income, net |
|
|
112 |
|
|
2 |
Interest expense |
|
|
(199) |
|
|
(141) |
|
|
|
|
|
|
|
Income before income taxes |
|
|
3 |
|
|
4 |
Income tax expense |
|
|
2 |
|
|
1 |
|
|
|
|
|
|
|
Net income |
|
$ |
1 |
|
$ |
3 |
|
|
|
|
|
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|
|
|
|
|
|
|
Weighted average shares outstanding - basic |
|
|
246,301 |
|
|
245,081 |
Weighted average shares outstanding - diluted |
|
|
247,040 |
|
|
246,425 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic net earnings per common share |
|
$ |
0.00 |
|
$ |
0.01 |
Diluted net earnings per common share |
|
$ |
0.00 |
|
$ |
0.01 |
|
|
|
|
|
|
|
Other Financial Data: |
|
|
|
|
|
|
Capital expenditures |
|
$ |
666 |
|
$ |
1,154 |
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Frontier Communications Parent, Inc. |
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Unaudited Financial Data |
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For the three months ended |
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March 31, |
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December 31, |
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March 31, |
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($ in millions) |
|
2024 |
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|
2023 |
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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 |
|
$ |
947 |
|
|
$ |
897 |
|
|
|
$ |
862 |
Voice services |
|
|
321 |
|
|
|
329 |
|
|
|
|
356 |
Video services |
|
|
94 |
|
|
|
97 |
|
|
|
|
117 |
Other |
|
|
84 |
|
|
|
86 |
|
|
|
|
83 |
Revenue from contracts with customers |
|
|
1,446 |
|
|
|
1,409 |
|
|
|
|
1,418 |
Subsidy and other revenue |
|
|
16 |
|
|
|
17 |
|
|
|
|
22 |
Total revenue |
|
$ |
1,462 |
|
|
$ |
1,426 |
|
|
|
$ |
1,440 |
|
|
|
|
|
|
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|
|
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Other Financial Data |
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Revenue: |
|
|
|
|
|
|
|
|
|
|
|
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Consumer |
|
$ |
787 |
|
|
$ |
774 |
|
|
|
$ |
761 |
Business and wholesale |
|
|
659 |
|
|
|
635 |
|
|
|
|
657 |
Revenue from contracts with customers |
|
$ |
1,446 |
|
|
$ |
1,409 |
|
|
|
$ |
1,418 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Fiber |
|
$ |
805 |
|
|
$ |
762 |
|
|
|
$ |
729 |
Copper |
|
|
641 |
|
|
|
647 |
|
|
|
|
689 |
Revenue from contracts with customers |
|
$ |
1,446 |
|
|
$ |
1,409 |
|
|
|
$ |
1,418 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Frontier Communications Parent, Inc. |
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Unaudited Operating Data |
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As of and for the three months ended |
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March 31, 2024 |
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December 31, 2023 |
|
March 31, 2023 |
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Broadband customer metrics (1) |
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Broadband customers (in thousands) |
|
|
2,974 |
|
|
|
2,943 |
|
|
|
2,894 |
|
|
Net customer additions |
|
|
31 |
|
|
|
30 |
|
|
|
26 |
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Consumer customer metrics |
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Customers (in thousands) |
|
|
3,140 |
|
|
|
3,129 |
|
|
|
3,140 |
|
|
Net customer additions |
|
|
11 |
|
|
|
11 |
|
|
|
7 |
|
|
Average monthly consumer |
|
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revenue per customer |
|
$ |
83.65 |
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|
$ |
82.54 |
|
|
$ |
80.87 |
|
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Customer monthly churn |
|
|
1.47 |
% |
|
|
1.43 |
% |
|
|
1.43 |
% |
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Employees |
|
|
13,227 |
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|
|
13,297 |
|
|
|
14,523 |
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(1) Amounts presented include related metrics for our wholesale customers.
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Frontier Communications Parent, Inc. |
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Condensed Consolidated Balance Sheet Data |
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(Unaudited) |
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($ in millions) |
|
March 31, 2024 |
|
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|
December 31, 2023 |
||
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ASSETS |
|
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|
|
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|
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Current assets: |
|
|
|
|
|
|
|
|
Cash and cash equivalents |
|
$ |
1,296 |
|
|
|
$ |
1,125 |
Short-term investments |
|
|
225 |
|
|
|
|
1,075 |
Accounts receivable, net |
|
|
447 |
|
|
|
|
446 |
Other current assets |
|
|
113 |
|
|
|
|
135 |
Total current assets |
|
|
2,081 |
|
|
|
|
2,781 |
|
|
|
|
|
|
|
|
|
Property, plant and equipment, net |
|
|
14,296 |
|
|
|
|
13,933 |
Other assets |
|
|
3,820 |
|
|
|
|
3,979 |
Total assets |
|
$ |
20,197 |
|
|
|
$ |
20,693 |
|
|
|
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LIABILITIES AND EQUITY |
|
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Current liabilities: |
|
|
|
|
|
|
|
|
Long-term debt due within one year |
|
$ |
15 |
|
|
|
$ |
15 |
Accounts payable and other current liabilities |
|
|
1,925 |
|
|
|
|
2,260 |
Total current liabilities |
|
|
1,940 |
|
|
|
|
2,275 |
|
|
|
|
|
|
|
|
|
Deferred income taxes and other liabilities |
|
|
1,758 |
|
|
|
|
1,893 |
Long-term debt |
|
|
11,240 |
|
|
|
|
11,246 |
Equity |
|
|
5,259 |
|
|
|
|
5,279 |
Total liabilities and equity |
|
$ |
20,197 |
|
|
|
$ |
20,693 |
|
|
|
|
|
|
|
|
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As of |
|
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|
|
March 31, 2024 |
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Leverage Ratio |
|
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|
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Numerator: |
|
|
|
|
|
|
|
|
Long-term debt due within one year |
|
$ |
15 |
|
|
|
|
|
Long-term debt |
|
|
11,240 |
|
|
|
|
|
Total debt |
|
$ |
11,255 |
|
|
|
|
|
Less: Cash and cash equivalents |
|
|
(1,296) |
|
|
|
|
|
Short-term investments |
|
|
(225) |
|
|
|
|
|
Net debt |
|
$ |
9,734 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Denominator: |
|
|
|
|
|
|
|
|
Adjusted EBITDA - last 4 quarters |
|
$ |
2,155 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net Leverage Ratio |
|
|
4.5x |
|
|
|
|
|
|
|
|
|
|
|
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|
Frontier Communications Parent, Inc. |
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Unaudited Consolidated Cash Flow Data |
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|||
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For the three months ended |
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|
March 31, 2024 |
|
March 31, 2023 |
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($ in millions) |
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|
|
|
Cash flows provided from (used by) operating activities: |
|
|
|
|
|
|
|
Net income |
|
$ |
1 |
|
$ |
3 |
|
Adjustments to reconcile net loss to net cash provided from |
|
|
|
|
|
|
|
(used by) operating activities: |
|
|
|
|
|
|
|
Depreciation and amortization |
|
|
388 |
|
|
330 |
|
Pension/OPEB special termination benefit enhancements |
|
|
7 |
|
|
- |
|
Stock-based compensation |
|
|
26 |
|
|
24 |
|
Amortization of premium |
|
|
(5) |
|
|
(7) |
|
Bad debt expense |
|
|
9 |
|
|
7 |
|
Other adjustments |
|
|
4 |
|
|
1 |
|
Deferred income taxes |
|
|
- |
|
|
- |
|
Change in accounts receivable |
|
|
(9) |
|
|
2 |
|
Change in long-term pension and other postretirement liabilities |
|
|
(146) |
|
|
(7) |
|
Change in accounts payable and other liabilities |
|
|
27 |
|
|
30 |
|
Change in prepaid expenses, income taxes, and other assets |
|
|
33 |
|
|
6 |
|
Net cash provided from operating activities |
|
|
335 |
|
|
389 |
|
|
|
|
|
|
|
|
|
Cash flows provided from (used by) investing activities: |
|
|
|
|
|
|
|
Capital expenditures |
|
|
(666) |
|
|
(1,154) |
|
Purchases of short-term investments (1) |
|
|
- |
|
|
(225) |
|
Sale of short-term investments (1) |
|
|
850 |
|
|
1,075 |
|
Other |
|
|
2 |
|
|
- |
|
Net cash provided from (used by) investing activities |
|
|
186 |
|
|
(304) |
|
|
|
|
|
|
|
|
|
Cash flows provided from (used by) financing activities: |
|
|
|
|
|
|
|
Long-term debt payments |
|
|
(4) |
|
|
(4) |
|
Proceeds from long-term debt borrowings |
|
|
- |
|
|
750 |
|
Payments of vendor financing |
|
|
(363) |
|
|
- |
|
Financing costs paid |
|
|
- |
|
|
(13) |
|
Finance lease obligation payments |
|
|
(7) |
|
|
(5) |
|
Taxes paid on behalf of employees for shares withheld |
|
|
(43) |
|
|
(3) |
|
Other |
|
|
(6) |
|
|
- |
|
Net cash provided from (used by) financing activities |
|
|
(423) |
|
|
725 |
|
|
|
|
|
|
|
|
|
Increase (Decrease) in cash, cash equivalents, and restricted cash |
|
|
98 |
|
|
810 |
|
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 |
|
$ |
1,337 |
|
$ |
1,132 |
|
|
|
|
|
|
|
|
|
Supplemental cash flow information: |
|
|
|
|
|
|
|
Cash paid during the period for: |
|
|
|
|
|
|
|
Interest |
|
$ |
149 |
|
$ |
83 |
|
Income tax payments, net |
|
$ |
13 |
|
$ |
5 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(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 |
|||||||
|
|
|
March 31, |
|
December 31, |
|
March 31, |
|||
($ in millions) |
|
|
2024 |
|
2023 |
|
2023 |
|||
|
|
|
|
|
|
|
|
|
||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income |
|
|
$ |
1 |
|
$ |
17 |
|
$ |
3 |
Add back (subtract): |
|
|
|
|
|
|
|
|
|
|
Income tax expense |
|
|
|
2 |
|
|
87 |
|
|
1 |
Interest expense |
|
|
|
199 |
|
|
193 |
|
|
141 |
Investment and other income, net |
|
|
|
(112) |
|
|
(177) |
|
|
(2) |
Operating income |
|
|
|
90 |
|
|
120 |
|
|
143 |
Depreciation and amortization |
|
|
|
388 |
|
|
375 |
|
|
330 |
EBITDA |
|
|
$ |
478 |
|
$ |
495 |
|
$ |
473 |
|
|
|
|
|
|
|
|
|
|
|
Add back: |
|
|
|
|
|
|
|
|
|
|
Pension/OPEB expense |
|
|
$ |
9 |
|
$ |
10 |
|
$ |
11 |
Restructuring costs and other charges |
|
|
|
34 |
|
|
25 |
|
|
8 |
Stock-based compensation |
|
|
|
26 |
|
|
27 |
|
|
24 |
Storm-related costs |
|
|
|
- |
|
|
- |
|
|
3 |
Legal recoveries |
|
|
|
- |
|
|
(8) |
|
|
- |
Adjusted EBITDA |
|
|
$ |
547 |
|
$ |
549 |
|
$ |
519 |
|
|
|
|
|
|
|
|
|
|
|
EBITDA margin |
|
|
|
|
|
|
|
|
|
|
Adjusted EBITDA margin |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Free Cash Flow |
|
|
|
|
|
|
|
|
|
|
Net cash provided from |
|
|
|
|
|
|
|
|
|
|
operating activities |
|
|
$ |
335 |
|
$ |
296 |
|
$ |
389 |
Capital expenditures |
|
|
|
(717) |
|
|
(329) |
|
|
(1,154) |
Payment of vendor financing- capital |
|
|
|
|
|
|
|
|
|
|
expenditures |
|
|
|
(312) |
|
|
(4) |
|
|
- |
Operating free cash flow |
|
|
$ |
(694) |
|
$ |
(37) |
|
$ |
(765) |
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
|
|
|
|
|
|
|
|
|
|
SCHEDULE B |
|||||||||
Frontier Communications Parent, Inc. |
|||||||||
Unaudited Consolidated Financial Data |
|||||||||
Reconciliation of Non-GAAP Financial Measures |
|||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For the three months ended |
|||||||
|
|
March 31, |
|
December 31, |
|
March 31, |
|||
($ in millions) |
|
2024 |
|
2023 |
|
2023 |
|||
Adjusted Operating Expenses |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total operating expenses |
|
$ |
1,372 |
|
$ |
1,306 |
|
$ |
1,297 |
|
|
|
|
|
|
|
|
|
|
Subtract: |
|
|
|
|
|
|
|
|
|
Depreciation and amortization |
|
|
388 |
|
|
375 |
|
|
330 |
Pension/OPEB expense |
|
|
9 |
|
|
10 |
|
|
11 |
Restructuring costs and other charges |
|
|
34 |
|
|
25 |
|
|
8 |
Stock-based compensation |
|
|
26 |
|
|
27 |
|
|
24 |
Storm-related costs |
|
|
- |
|
|
- |
|
|
3 |
Legal recoveries |
|
|
- |
|
|
(8) |
|
|
- |
Adjusted operating expenses |
|
$ |
915 |
|
$ |
877 |
|
$ |
921 |
|
|
|
|
|
|
|
|
|
|
|
|||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
SCHEDULE C |
|||||||||||||
Frontier Communications Parent, Inc. |
|||||||||||||
Selected Financial and Operating Data (1) |
|||||||||||||
(Unaudited) |
|||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
As of or for the three months ended |
||||||||
|
|
|
|
|
March 31, 2024 |
|
December 31, 2023 |
|
|
March 31, 2023 |
|||
|
|
|
|
|
|
|
|
|
|
|
|||
Broadband Revenue ($ in millions) |
|
|
|
|
|
|
|
|
|
|
|
||
|
Total Company |
Fiber |
|
|
$ |
414 |
|
$ |
391 |
|
|
$ |
334 |
|
|
Copper |
|
|
|
155 |
|
|
159 |
|
|
|
173 |
|
|
Total |
|
|
$ |
569 |
|
$ |
550 |
|
|
$ |
507 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Estimated Fiber Passings (in millions) |
|
|
|
|
|
|
|
|
|
|
|
||
|
Base Fiber Passings |
|
|
|
|
3.2 |
|
|
3.2 |
|
|
|
3.2 |
|
Total Fiber Passings |
|
|
|
|
6.8 |
|
|
6.5 |
|
|
|
5.5 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Estimated Broadband Fiber % Penetration |
|
|
|
|
|
|
|
|
|
|
|
||
|
Base Fiber Penetration |
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Fiber Penetration |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Broadband Customers, end of period (in thousands) |
|
|
|
|
|
||||||||
|
Consumer |
Fiber |
|
|
|
1,963 |
|
|
1,878 |
|
|
|
1,659 |
|
|
Copper |
|
|
|
771 |
|
|
822 |
|
|
|
987 |
|
|
Total |
|
|
|
2,734 |
|
|
2,700 |
|
|
|
2,646 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Business + Wholesale (2) |
Fiber |
|
|
|
132 |
|
|
129 |
|
|
|
118 |
|
|
Copper |
|
|
|
108 |
|
|
114 |
|
|
|
130 |
|
|
Total |
|
|
|
240 |
|
|
243 |
|
|
|
248 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Broadband Net Adds (in thousands) |
|
|
|
|
|
|
|
|
|
|
|
||
|
Consumer |
Fiber |
|
|
|
85 |
|
|
81 |
|
|
|
84 |
|
|
Copper |
|
|
|
(51) |
|
|
(48) |
|
|
|
(56) |
|
|
Total |
|
|
|
34 |
|
|
33 |
|
|
|
28 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Business + Wholesale (2) |
Fiber |
|
|
|
3 |
|
|
3 |
|
|
|
4 |
|
|
Copper |
|
|
|
(6) |
|
|
(6) |
|
|
|
(6) |
|
|
Total |
|
|
|
(3) |
|
|
(3) |
|
|
|
(2) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Broadband Churn |
|
|
|
|
|
|
|
|
|
|
|
||
|
Consumer |
Fiber |
|
|
|
|
|
|
|
|
|
|
|
|
|
Copper |
|
|
|
|
|
|
|
|
|
|
|
|
|
Total |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Business + Wholesale (2) |
Fiber |
|
|
|
|
|
|
|
|
|
|
|
|
|
Copper |
|
|
|
|
|
|
|
|
|
|
|
|
|
Total |
|
|
|
|
|
|
|
|
|
|
|
Broadband ARPU |
|
|
|
|
|
|
|
|
|
|
|
||
|
Consumer |
Fiber |
|
|
$ |
65.18 |
|
$ |
64.16 |
|
|
$ |
61.44 |
|
|
Copper |
|
|
|
56.16 |
|
|
54.22 |
|
|
|
48.88 |
|
|
Total |
|
|
$ |
62.53 |
|
$ |
61.02 |
|
|
$ |
56.59 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Business + Wholesale (2) |
Fiber |
|
|
$ |
98.40 |
|
$ |
98.86 |
|
|
$ |
101.92 |
|
|
Copper |
|
|
|
60.81 |
|
|
59.87 |
|
|
|
60.59 |
|
|
Total |
|
|
$ |
81.07 |
|
$ |
80.17 |
|
|
$ |
79.79 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Reconciliation: Broadband ARPU |
|
|
|
|
|
|
|
|
|
|
|
||
|
Consumer Fiber Broadband ARPU |
|
|
$ |
65.18 |
|
$ |
64.16 |
|
|
$ |
61.44 |
|
|
Gift card impact |
|
|
|
0.17 |
|
|
0.17 |
|
|
|
1.68 |
|
|
Adjusted Consumer Fiber Broadband ARPU |
|
|
$ |
65.35 |
|
$ |
64.33 |
|
|
$ |
63.12 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(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. |
|||||||||||||
_______________________________
1 Adjusted EBITDA is a non-GAAP measure of performance. See “Non-GAAP Measures” for a description of this measure and its calculation. See Schedule A for a reconciliation of Adjusted EBITDA to net income.
2 Cash capital investment includes capital expenditures and vendor financing payments for capital spend.
3 Business and Wholesale churn methodology includes wholesale, excluding circuits or fiber-to-the-tower churn.
4 Business and Wholesale ARPU methodology includes wholesale, excluding circuits or fiber-to-the-tower ARPU.
5 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.
6 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.
View source version on businesswire.com: https://www.businesswire.com/news/home/20240503848207/en/
Investors
Spencer Kurn
SVP, Investor Relations
+1 401-225-0475
spencer.kurn@ftr.com
Media
Chrissy Murray
VP, Corporate Communications
+1 504-952-4225
chrissy.murray@ftr.com
Source: Frontier Communications Parent, Inc.
FAQ
<p>What was Frontier Communications Parent, Inc.'s stock symbol mentioned in the press release?</p>
Frontier Communications Parent, Inc.'s stock symbol mentioned in the press release was FYBR (NASDAQ: FYBR).
<p>What was the year-over-year revenue growth figure highlighted in the first-quarter 2024 results?</p>
The year-over-year revenue growth figure highlighted in the first-quarter 2024 results was 1.5%.
<p>How much did Adjusted EBITDA grow year-over-year in the first quarter of 2024?</p>
Adjusted EBITDA grew 5.4% year-over-year in the first quarter of 2024.
<p>What was the net leverage ratio of Frontier as of March 31, 2024?</p>
Frontier's net leverage ratio as of March 31, 2024, was approximately 4.5x.
<p>What are Frontier's operational and financial expectations for 2024?</p>
Frontier reaffirmed all operational and financial expectations for 2024, including Adjusted EBITDA of $2.20 - $2.25 billion and cash capital investment of $3.00 - $3.20 billion.
