Frontier Communications Parent, Inc. - FORM 8-K - EX-99.1 - EXHIBIT 99.1

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8-K - 8-K - Frontier Communications Parent, Inc.	brhc10014093_8k.htm

Exhibit 99.1

Frontier Communications Corporation (Frontier) filed its Form 10-Q for the quarter ended June 30, 2020 with the SEC on August 7, 2020. The schedules contained in this Exhibit 99.1 include supplemental information regarding Frontier’s financial results.

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 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, gains/losses on extinguishment of debt, 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 expense, goodwill impairment charges, 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, 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.

Adjusted net income (loss) attributable to Frontier common shareholders is defined as net income (loss) attributable to Frontier common shareholders and excludes restructuring costs and other charges, pension settlement costs, reorganization items, goodwill impairment charges, certain income tax items and the income tax effect of these items, and certain other non-recurring items. Adjusting for these items allows investors to better understand and analyze Frontier’s financial performance over the periods presented.

Management defines operating free cash flow, a non-GAAP measure, as net cash provided from operating activities less 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. 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, goodwill impairment charges, certain pension/OPEB expenses, stock-based compensation expense, and certain other non-recurring items. Investors have indicated that this non-GAAP measure is useful in evaluating Frontier’s performance.

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.

About Frontier Communications

Frontier Communications Corporation (OTC:FTRCQ) is a leader in providing communications services to urban, suburban, and rural communities in 25 states. Frontier offers a variety of services to residential customers over its fiber-optic and copper networks, including video, high-speed internet, advanced voice, and Frontier Secure^® digital protection solutions. Frontier Business offers communications solutions to small, medium, and enterprise businesses. More information about Frontier is available at www.frontier.com.

Frontier Communications Corporation

(Debtor-In-Possession)

Unaudited Consolidated Financial Data

	For the quarter ended									For the six months ended
($ in millions and shares in thousands, except per share amounts)	June 30, 2020			March 31, 2020			June 30, 2019			June 30, 2020			June 30, 2019

Statement of Operations Data
Revenue	$	1,801		$	1,933		$	2,067		$	3,734		$	4,168

Operating expenses:
Network access expenses		255			286			318			541			656
Network related expenses		430			444			445			874			901
Selling, general and administrative expenses		407			444			445			851			901
Depreciation and amortization		397			415			454			812			938
Goodwill impairment		-			-			5,449			-			5,449
Loss on disposal of Northwest Operations		136			24			384			160			384
Restructuring costs and other charges		36			48			31			84			59
Total operating expenses		1,661			1,661			7,526			3,322			9,288

Operating income (loss)		140			272			(5,459	)		412			(5,120	)

Investment and other income (loss), net		(20	)		5			(9	)		(15	)		(18	)
Pension settlement costs		56			103			-			159			-
Loss on early extinguishment of debt		-			-			-			-			(20	)
Reorganization items, net		(142	)		-			-			(142	)		-
Interest expense (contractual interest for the three months ended was $678 million)		160			383			383			543			762

Loss before income taxes		(238	)		(209	)		(5,851	)		(447	)		(5,920	)
Income tax benefit		(57	)		(23	)		(534	)		(80	)		(516	)

Net loss		(181	)		(186	)		(5,317	)		(367	)		(5,404	)

Weighted average shares outstanding - basic and diluted		104,525			104,363			104,118			104,437			103,987

Basic and diluted net loss per common share	$	(1.73	)	$	(1.78	)	$	(51.07	)	$	(3.51	)	$	(51.97	)

Other Financial Data:
Capital expenditures	$	225		$	286		$	275		$	511		$	580

Frontier Communications Corporation

(Debtor-In-Possession)

Unaudited Financial Data for Remaining Properties (Excluding Northwest Operations)

Note: The following table presents disaggregation of revenue for the operations located in the remaining 25 states (“Remaining Properties”) after excluding the Northwest Operations (“Northwest Ops”) through the date of sale from the Consolidated Company’s results. See Schedule D for a reconciliation to the Total Company Results.

	For the quarter ended						For the six months ended
	June 30, 2020		March 31, 2020		June 30, 2019		June 30, 2020		June 30, 2019
($ in millions)

Selected Statement of Operations Data
Revenue:
Data and Internet services	$	849	$	855	$	885	$	1,704	$	1,773
Voice services		509		529		582		1,038		1,186
Video services		197		212		248		409		504
Other		105		108		111		213		224
Customer revenue		1,660		1,704		1,826		3,364		3,687
Subsidy revenue		94		84		89		178		174
Total revenue	$	1,754	$	1,788	$	1,915	$	3,542	$	3,861

Other Financial Data
Revenue:
Consumer	$	874	$	894	$	969	$	1,768	$	1,965
Commercial		786		810		857		1,596		1,722
Customer revenue		1,660		1,704		1,826		3,364		3,687
Subsidy revenue		94		84		89		178		174
Total revenue	$	1,754	$	1,788	$	1,915	$	3,542	$	3,861

Frontier Communications Corporation

(Debtor-In-Possession)

Unaudited Operating Data for Remaining Properties (Excluding Northwest Operations)

Note: The following table presents operating metrics for the operations located in the remaining 25 states (“Remaining Properties”) after excluding the Northwest Operations (“Northwest Ops”) through the date of sale from the Consolidated Company’s results. See Schedule E for a reconciliation to the Total Company Results.

	As of or for the three months ended												As of or for the six months ended
	June 30, 2020			March 31, 2020			December 31, 2019			June 30, 2019			June 30, 2020			June 30, 2019

Consumer customer metrics
Customers (in thousands)		3,341			3,373			3,412			3,554			3,341			3,554
Net customer additions (losses)		(32	)		(39	)		(58	)		(87	)		(71	)		(148	)
Average monthly consumer revenue per customer	$	86.68		$	87.88		$	89.45		$	89.82		$	87.33		$	90.16
Customer monthly churn		1.63	%		1.84	%		1.95	%		2.18	%		1.74	%		2.10	%

Broadband subscriber metrics
Broadband subscribers (in thousands)		3,142			3,183			3,211			3,315			3,142			3,315
Net subscriber additions (losses)		(41	)		(28	)		(38	)		(67	)		(69	)		(103	)

Video (excl. DISH) subscriber metrics
Video subscribers (in thousands)		560			594			631			705			560			705
Net subscriber additions (losses)		(34	)		(37	)		(36	)		(44	)		(71	)		(95	)

DISH subscriber metrics
DISH subscribers (in thousands)		144			149			156			172			144			172
Net subscriber additions (losses)		(5	)		(7	)		(7	)		(7	)		(12	)		(14	)

Employees		16,420			16,487			17,367			18,922			16,420			18,922

Frontier Communications Corporation

(Debtor-In-Possession)

Condensed Consolidated Balance Sheet Data

($ in millions)	(unaudited) June 30, 2020			December 31, 2019

ASSETS
Current assets:
Cash and cash equivalents	$	2,290		$	760
Accounts receivable, net		602			629
Assets held for sale		-			1,401
Other current assets		327			247
Total current assets		3,219			3,037

Property, plant and equipment, net		12,845			12,963
Other assets		1,403			1,488
Total assets	$	17,467		$	17,488

LIABILITIES AND EQUITY (DEFICIT)
Current liabilities:
Long-term debt due within one year	$	6,446		$	994
Liabilities held for sale		-			123
Accounts payable and other current liabilities		1,366			1,687
Total current liabilities		7,812			2,804

Deferred income taxes and other liabilities		3,155			2,770
Liabilities subject to compromise		11,597			-
Long-term debt		-			16,308
Equity (deficit)		(5,097	)		(4,394	)
Total liabilities and equity (deficit)	$	17,467		$	17,488

Frontier Communications Corporation

(Debtor-In-Possession)

Unaudited Consolidated Cash Flow Data

	For the six months ended
($ in millions)	June 30, 2020			June 30, 2019

Cash flows provided from (used by) operating activities:
Net loss	$	(367	)	$	(5,404	)
Adjustments to reconcile net loss to net cash provided from (used by) operating activities:
Depreciation and amortization		812			938
Loss on extinguishment of debt		-			20
Pension settlement costs		159			-
Stock-based compensation expense		2			7
Amortization of deferred financing costs		11			15
Non-cash reorganization items, net		85			-
Other adjustments		2			1
Deferred income taxes		(92	)		(519	)
Goodwill impairment		-			5,449
Loss on disposal of Northwest Operations		160			384
Change in accounts receivable		23			(1	)
Change in accounts payable and other liabilities		278			(14	)
Change in prepaid expenses, income taxes, and other assets		(123	)		(19	)
Net cash provided from operating activities		950			857

Cash flows provided from (used by) investing activities:
Capital expenditures		(511	)		(580	)
Proceeds from sale of Northwest Operations		1,131			-
Proceeds on sale of assets		5			74
Other		3			1
Net cash provided from (used by) investing activities		628			(505	)

Cash flows provided from (used by) financing activities:
Long-term debt payments		(5	)		(1,999	)
Proceeds from long-term debt borrowings		-			1,650
Proceeds from revolving debt		-			450
Repayment of revolving debt		-			(475	)
Financing costs paid		(19	)		(44	)
Finance lease obligation payments		(13	)		(17	)
Other		-			(4	)
Net cash used by financing activities		(37	)		(439	)

Increase (Decrease) in cash, cash equivalents, and restricted cash		1,541			(87	)
Cash, cash equivalents, and restricted cash at January 1,		809			404

Cash, cash equivalents, and restricted cash at June 30,	$	2,350		$	317

Supplemental cash flow information:
Cash paid during the period for:
Interest	$	427		$	712
Income tax payments, net	$	1		$	5
Reorganization items, net	$	34		$	-

SCHEDULE A

Frontier Communications Corporation

(Debtor-In-Possession)

Unaudited Financial Data for Remaining Properties (Excluding Northwest Operations)

Reconciliation of Non-GAAP Financial Measures

Note: The following table presents Non-GAAP Measures for the operations located in the remaining 25 states (“Remaining Properties”) after excluding the Northwest Operations (“Northwest Ops”) through the date of sale from the Consolidated Company’s results. See Schedule F for a reconciliation to the Total Company Results.

	For the quarter ended									For the six months ended
($ in millions)	June 30, 2020			March 31, 2020			June 30, 2019			June 30, 2020			June 30, 2019

Net loss	$	(210	)	$	(283	)	$	(5,392	)	$	(493	)	$	(5,545	)
Add back (subtract):
Income tax benefit		(57	)		(23	)		(534	)		(80	)		(516	)
Interest expense		160			383			383			543			762
Investment and other (income) loss, net		20			(5	)		9			15			18
Pension settlement costs		56			103			-			159			-
Loss on extinguishment of debt		-			-			-			-			20
Reorganization items, net		142			-			-			142			-
Operating income		111			175			(5,534	)		286			(5,261	)

Depreciation and amortization		397			415			429			812			878
EBITDA	$	508		$	590		$	(5,105	)	$	1,098		$	(4,383	)

Add back:
Pension/OPEB expense		23			23			19			46			39
Restructuring costs and other charges		36			48			30			84			57
Stock-based compensation expense		1			1			4			2			7
Storm-related insurance proceeds		(1	)		-			-			(1	)		(1	)
Goodwill impairment		-			-			5,449			-			5,449
Loss on disposal of Northwest Operations		136			24			384			160			384
Adjusted EBITDA	$	703		$	686		$	781		$	1,389		$	1,552

EBITDA margin		29.0	%		33.0	%		-266.6	%		31.0	%		-113.5	%
Adjusted EBITDA margin		40.1	%		38.4	%		40.8	%		39.2	%		40.2	%

SCHEDULE B

Frontier Communications Corporation

(Debtor-In-Possession)

Reconciliation of Non-GAAP Financial Measures for Total Consolidated Operations

	For the quarter ended																		For the six months ended
	June 30, 2020						March 31, 2020						June 30, 2019						June 30, 2020						June 30, 2019
($ in millions, except per share amounts)	Net Income (Loss)			Basic Earnings (Loss) Per Share			Net Income (Loss)			Basic Earnings (Loss) Per Share			Net Income (Loss)			Basic Earnings (Loss) Per Share			Net Income (Loss)			Basic Earnings (Loss) Per Share			Net Income (Loss)			Basic Earnings (Loss) Per Share

Net loss attributable to
Frontier common shareholders	$	(181	)	$	(1.73	)	$	(186	)	$	(1.78	)	$	(5,317	)	$	(51.07	)	$	(367	)	$	(3.51	)	$	(5,404	)	$	(51.97	)

Restructuring costs and other charges		36						48						31						84						59
Pension settlement costs		56						103						-						159						-
Reorganization items, net		142						-						-						142						-
(Gain) Loss on extinguishment of debt		-						-						-						-						20
Goodwill impairment		-						-						5,449						-						5,449
Loss on disposal of Northwest Operations		136						24						384						160						384
Storm-related insurance proceeds		(1	)					-						-						(1	)					(1	)
Certain other tax items ⁽¹⁾		(33	)					13						87						(20	)					117
Income tax effect on above items:
Restructuring costs and other charges		(12	)					(10	)					(8	)					(22	)					(13	)
Pension settlement costs		(12	)					(25	)					-						(37	)					-
Reorganization items, net		(22	)					-						-						(22	)					-
Loss on extinguishment of debt		-						-						-						-						(4	)
Goodwill impairment		-						-						(524	)					-						(524	)
Loss on disposal of business		(36	)					-						-						(36	)					-
Storm-related insurance proceeds		-						-						-						-						-
	$	254		$	2.43		$	153		$	1.47		$	5,419		$	52.05		$	407		$	3.90		$	5,487		$	52.77
Adjusted net income (loss) attributable to Frontier common shareholders⁽²⁾	$	73		$	0.70		$	(33	)	$	(0.32	)	$	102		$	0.98		$	40		$	0.38		$	83		$	0.80

⁽¹⁾

Includes impact arising from federal research and development credits, changes in certain deferred tax balances, federal and state tax law changes, state filing method change, and the net impact of uncertain tax positions.

⁽²⁾

Adjusted net income (loss) attributable to Frontier common shareholders may not sum due to rounding.

SCHEDULE C

Frontier Communications Corporation

(Debtor-In-Possession)

Reconciliation of Non-GAAP Financial Measures for Remaining Properties (Excluding Northwest Operations)

Note: The following table presents Non-GAAP Measures for the operations located in the remaining 25 states (“Remaining Properties”) after excluding the Northwest Operations (“Northwest Ops”) through the date of sale from the Consolidated Company’s results. See Schedule G for a reconciliation to the Total Company Results.

	For the quarter ended							For the six months ended
($ in millions)	June 30, 2020			March 31, 2020		June 30, 2019		June 30, 2020			June 30, 2019

Adjusted Operating Expenses

Total operating expenses	$	1,643		$	1,613	$	7,449	$	3,256		$	9,122

Subtract:
Depreciation and amortization		397			415		429		812			878
Goodwill impairment		-			-		5,449		-			5,449
Loss on disposal of Northwest Operations		136			24		384		160			384
Pension/OPEB expense		23			23		19		46			39
Restructuring costs and other charges		36			48		30		84			57
Stock-based compensation expense		1			1		4		2			7
Storm-related insurance proceeds		(1	)		-		-		(1	)		(1	)
Adjusted operating expenses	$	1,051		$	1,102	$	1,134	$	2,153		$	2,309

SCHEDULE D

Frontier Communications Corporation

(Debtor-In-Possession)

Reconciliation of Financial Results for Remaining Properties (Excluding Northwest Operations)

	For the three months ended
	June 30, 2020						March 31, 2020						June 30, 2019
($ in millions)	Consolidated Frontier		Northwest Ops ⁽¹⁾		Remaining Properties		Consolidated Frontier		Northwest Ops ⁽²⁾		Remaining Properties		Consolidated Frontier			Northwest Ops ⁽²⁾		Remaining Properties

Data and Internet services	$	874	$	25	$	849	$	932	$	77	$	855	$	963		$	78	$	885
Voice services		523		14		509		572		43		529		629			47		582
Video services		200		3		197		222		10		212		260			12		248
Other		108		3		105		117		9		108		120			9		111
Revenue from contracts with customers		1,705		45		1,660		1,843		139		1,704		1,972			146		1,826
Subsidy revenue		96		2		94		90		6		84		95			6		89
Revenue		1,801		47		1,754		1,933		145		1,788		2,067			152		1,915

Operating expenses ⁽³⁾:
Network access expenses		255		4		251		286		10		276		318			13		305
Network related expenses		430		7		423		444		19		425		445			20		425
Selling, general and administrative expenses		407		7		400		444		19		425		445			18		427
Depreciation and amortization		397		-		397		415		-		415		454			25		429
Goodwill impairment		-		-		-		-		-		-		5,449			-		5,449
Loss on disposal of Northwest Operations		136		-		136		24		-		24		384			-		384
Restructuring costs and other charges		36		-		36		48		-		48		31			1		30
Total operating expenses		1,661		18		1,643		1,661		48		1,613		7,526			77		7,449

Operating income (loss)		140		29		111		272		97		175		(5,459	)		75		(5,534	)

Consumer	$	899	$	25	$	874	$	971	$	77	$	894	$	1,050		$	81	$	969
Commercial		806		20		786		872		62		810		922			65		857
Revenue from contracts with customers		1,705		45		1,660		1,843		139		1,704		1,972			146		1,826
Subsidy revenue		96		2		94		90		6		84		95			6		89
Total revenue	$	1,801	$	47	$	1,754	$	1,933	$	145	$	1,788	$	2,067		$	152	$	1,915

	For the six months ended June 30,
	2020						2019
($ in millions)	Consolidated Frontier		Northwest Ops ⁽¹⁾		Remaining Properties		Consolidated Frontier			Northwest Ops ⁽²⁾		Remaining Properties

Data and Internet services	$	1,806	$	102	$	1,704	$	1,930		$	157	$	1,773
Voice services		1,095		57		1,038		1,279			93		1,186
Video services		422		13		409		528			24		504
Other		225		12		213		244			20		224
Revenue from contracts with customers		3,548		184		3,364		3,981			294		3,687
Subsidy revenue		186		8		178		187			13		174
Revenue		3,734		192		3,542		4,168			307		3,861

Operating expenses ⁽³⁾:
Network access expenses		541		14		527		656			28		628
Network related expenses		874		26		848		901			39		862
Selling, general and administrative expenses		851		26		825		901			37		864
Depreciation and amortization		812		-		812		938			60		878
Goodwill impairment		-		-		-		5,449			-		5,449
Loss on disposal of Northwest Operations		160		-		160		384			-		384
Restructuring costs and other charges		84		-		84		59			2		57
Total operating expenses		3,322		66		3,256		9,288			166		9,122

Operating income (loss)		412		126		286		(5,120	)		141		(5,261	)

Consumer	$	1,870	$	102	$	1,768	$	2,127		$	162	$	1,965
Commercial		1,678		82		1,596		1,854			132		1,722
Revenue from contracts with customers		3,548		184		3,364		3,981			294		3,687
Subsidy revenue		186		8		178		187			13		174
Total revenue	$	3,734	$	192	$	3,542	$	4,168		$	307	$	3,861

(1) Amounts represent the financial results of our Northwest Operations for the one and four month periods ended April 30, 2020.

(2) Amounts represent the financial results of our Northwest Operations for the three and six months ended June 30, 2019.

(3) Operating expenses for Northwest Ops do not include allocated expenses which are included in operating expenses for our Remaining Properties.

SCHEDULE E

Frontier Communications Corporation

(Debtor-In-Possession)

Unaudited Operating Data for Remaining Properties (Excluding Northwest Operations)

	As of or for the three months ended
	June 30, 2020									March 31, 2020									December 31, 2019									June 30, 2019
	Consolidated Frontier			Northwest Ops			Remaining Properties			Consolidated Frontier			Northwest Ops			Remaining Properties			Consolidated Frontier			Northwest Ops			Remaining Properties			Consolidated Frontier			Northwest Ops			Remaining Properties
Customers (in thousands)		3,664			N/A			N/A			4,063			N/A			N/A			4,118			N/A			N/A			4,292			N/A			N/A

Consumer customer metrics
Customers (in thousands)		3,341			-			3,341			3,703			330			3,373			3,747			335			3,412			3,902			348			3,554
Net customer additions (losses)		(362	)		(330	)		(32	)		(44	)		(5	)		(39	)		(64	)		(6	)		(58	)		(93	)		(6	)		(87	)

Average monthly consumer revenue per customer	$	85.01		$	76.74		$	86.68		$	86.93		$	77.22		$	87.88		$	88.40		$	77.74		$	89.45		$	88.68		$	77.02		$	89.82
Customer monthly churn		1.63	%		1.51	%		1.63	%		1.81	%		1.52	%		1.84	%		1.93	%		1.66	%		1.95	%		2.14	%		1.77	%		2.18	%

Commercial customer metrics
Customers (in thousands)		323			N/A			N/A			360			N/A			N/A			371			N/A			N/A			390			N/A			N/A

Broadband subscriber metrics
Broadband subscribers (in thousands)		3,142			-			3,142			3,480			297			3,183			3,513			302			3,211			3,626			311			3,315
Net subscriber additions (losses)		(338	)		(297	)		(41	)		(33	)		(5	)		(28	)		(42	)		(4	)		(38	)		(71	)		(4	)		(67	)

Video (excl. DISH) subscriber metrics
Video subscribers - in thousands)		560			-			560			621			27			594			660			29			631			738			33			705
Net subscriber additions (losses)		(61	)		(27	)		(34	)		(39	)		(2	)		(37	)		(38	)		(2	)		(36	)		(46	)		(2	)		(44	)

DISH subscriber metrics
DISH subscribers (in thousands)		144			-			144			165			16			149			173			17			156			190			18			172
Net subscriber additions (losses)		(21	)		(16	)		(5	)		(8	)		(1	)		(7	)		(8	)		(1	)		(7	)		(8	)		(1	)		(7	)

Employees		16,420			-			16,420			17,437			950			16,487			18,317			950			17,367			19,872			950			18,922

	As of or for the six months ended
	June 30, 2020									June 30, 2019
	Consolidated Frontier			Northwest Ops			Remaining Properties			Consolidated Frontier			Northwest Ops			Remaining Properties
Customers (in thousands)		3,664			N/A			N/A			4,292			N/A			N/A

Consumer customer metrics
Customers (in thousands)		3,341			-			3,341			3,902			348			3,554
Net customer additions (losses)		(406	)		(335	)		(71	)		(158	)		(10	)		(148	)
Average monthly consumer revenue per customer	$	86.70		$	76.74		$	87.33		$	88.94		$	76.44		$	90.16
Customer monthly churn		1.72	%		1.51	%		1.74	%		2.07	%		1.67	%		2.10	%

Commercial customer metrics
Customers (in thousands)		323			N/A			N/A			390			N/A			N/A

Broadband subscriber metrics
Broadband subscribers (in thousands)		3,142			-			3,142			3,626			311			3,315
Net subscriber additions (losses)		(371	)		(302	)		(69	)		(110	)		(7	)		(103	)

Video (excl. DISH) subscriber metrics
Video subscribers - in thousands)		560			-			560			738			33			705
Net subscriber additions (losses)		(100	)		(29	)		(71	)		(99	)		(4	)		(95	)

DISH subscriber metrics
DISH subscribers (in thousands)		144			-			144			190			18			172
Net subscriber additions (losses)		(29	)		(17	)		(12	)		(16	)		(2	)		(14	)

Employees		16,420			-			16,420			19,872			950			18,922

SCHEDULE F

Frontier Communications Corporation

(Debtor-In-Possession)

Reconciliation of Non-GAAP Financial Measures for Remaining Properties (Excluding Northwest Operations)

	For the three months ended
	June 30, 2020								March 31, 2020								June 30, 2019
($ in millions)	Consolidated Frontier			Northwest Ops ⁽¹⁾		Remaining Properties			Consolidated Frontier			Northwest Ops ⁽²⁾		Remaining Properties			Consolidated Frontier			Northwest Ops ⁽²⁾		Remaining Properties


Net income (loss)	$	(181	)	$	29	$	(210	)	$	(186	)	$	97	$	(283	)	$	(5,317	)	$	75	$	(5,392	)
Add back (subtract):
Income tax benefit		(57	)		-		(57	)		(23	)		-		(23	)		(534	)		-		(534	)
Interest expense		160			-		160			383			-		383			383			-		383
Investment and other (loss) loss, net		20			-		20			(5	)		-		(5	)		9			-		9
Pension settlement costs		56			-		56			103			-		103			-			-		-
Loss on extinguishment of debt		-			-		-			-			-		-			-			-		-
Reorganization items, net		142			-		142			-			-		-			-			-		-
Operating (loss)		140			29		111			272			97		175			(5,459	)		75		(5,534	)

Depreciation and amortization		397			-		397			415			-		415			454			25		429
EBITDA		537			29		508			687			97		590			(5,005	)		100		(5,105	)

Add back:
Pension/OPEB expense		23			-		23			23			-		23			19			-		19
Restructuring costs and other charges		36			-		36			48			-		48			31			1		30
Stock-based compensation expense		1			-		1			1			-		1			4			-		4
Storm-related insurance proceeds		(1	)		-		(1	)		-			-		-			-			-		-
Goodwill impairment		-			-		-			-			-		-			5,449			-		5,449
Loss on disposal of Northwest Operations		136			-		136			24			-		24			384			-		384
Adjusted EBITDA	$	732		$	29	$	703		$	783		$	97	$	686		$	882		$	101	$	781

Free Cash Flow

Net cash provided from operating activities	$	473			N/A		N/A		$	477			N/A		N/A		$	575			N/A		N/A
Capital expenditures		(225	)		N/A		N/A			(286	)		N/A		N/A			(275	)		N/A		N/A
Operating free cash flow	$	248			N/A		N/A		$	191			N/A		N/A		$	300			N/A		N/A

	For the six months ended
	June 30, 2020								June 30, 2019
($ in millions)	Consolidated Frontier			Northwest Ops ⁽¹⁾		Remaining Properties			Consolidated Frontier			Northwest Ops ⁽²⁾		Remaining Properties

Net income (loss)	$	(367	)	$	126	$	(493	)	$	(5,404	)	$	141	$	(5,545	)
Add back (subtract):
Income tax benefit		(80	)		-		(80	)		(516	)		-		(516	)
Interest expense		543			-		543			762			-		762
Investment and other (income) loss, net		15			-		15			18			-		18
Pension settlement costs		159			-		159			-			-		-
Loss on extinguishment of debt		-			-		-			20			-		20
Reorganization items, net		142			-		142			-			-		-
Operating (loss)		412			126		286			(5,120	)		141		(5,261	)

Depreciation and amortization		812			-		812			938			60		878
EBITDA		1,224			126		1,098			(4,182	)		201		(4,383	)

Add back:
Pension/OPEB expense		46			-		46			39			-		39
Restructuring costs and other charges		84			-		84			59			2		57
Stock-based compensation expense		2			-		2			7			-		7
Storm-related insurance proceeds		(1	)		-		(1	)		(1	)		-		(1	)
Goodwill impairment		-			-		-			5,449			-		5,449
Loss on disposal of Northwest Operations		160			-		160			384			-		384
Adjusted EBITDA	$	1,515		$	126	$	1,389		$	1,755		$	203	$	1,552

Free Cash Flow

Net cash provided from operating activities	$	950			N/A		N/A		$	857			N/A		N/A
Capital expenditures		(511	)		N/A		N/A			(580	)		N/A		N/A
Operating free cash flow	$	439			N/A		N/A		$	277			N/A		N/A

(1) Amounts represent the financial results of our Northwest Operations for the one month period ended April 30, 2020. Net loss does not include impact of income taxes and interest expense

(2) Amounts represent the financial results of our Northwest Operations for the three month periods ended March 31, 2020, and June 30, 2019. Net loss does not include the impact of income taxes and interest expense

SCHEDULE G

Frontier Communications Corporation

(Debtor-In-Possession)

Reconciliation of Non-GAAP Financial Measures for Remaining Properties (Excluding Northwest Operations)

	For the three months ended
	June 30, 2020								March 31, 2020						June 30, 2019
($ in millions)	Consolidated Frontier			Northwest Ops ⁽¹⁾		Remaining Properties			Consolidated Frontier		Northwest Ops ⁽²⁾		Remaining Properties		Consolidated Frontier		Northwest Ops ⁽²⁾		Remaining Properties

Adjusted Operating Expenses

Total operating expenses	$	1,661		$	18	$	1,643		$	1,661	$	48	$	1,613	$	7,526	$	77	$	7,449

Subtract:
Depreciation and amortization		397			-		397			415		-		415		454		25		429
Goodwill impairment		-			-		-			-		-		-		5,449		-		5,449
Loss on disposal of Northwest Operations		136			-		136			24		-		24		384		-		384
Pension/OPEB expense		23			-		23			23		-		23		19		-		19
Restructuring costs and other charges		36			-		36			48		-		48		31		1		30
Stock-based compensation expense		1			-		1			1		-		1		4		-		4
Storm-related insurance proceeds		(1	)		-		(1	)		-		-		-		-		-		-
Adjusted operating expenses	$	1,069		$	18	$	1,051		$	1,150	$	48	$	1,102	$	1,185	$	51	$	1,134

	For the six months ended
	June 30, 2020								June 30, 2019
($ in millions)	Consolidated Frontier			Northwest Ops ⁽¹⁾		Remaining Properties			Consolidated Frontier			Northwest Ops ⁽²⁾		Remaining Properties

Adjusted Operating Expenses

Total operating expenses ⁽³⁾	$	3,322		$	66	$	3,256		$	9,288		$	166	$	9,122

Subtract:
Depreciation and amortization		812			-		812			938			60		878
Goodwill impairment		-			-		-			5,449			-		5,449
Loss on disposal of Northwest Operations		160			-		160			384			-		384
Pension/OPEB expense		46			-		46			39			-		39
Restructuring costs and other charges		84			-		84			59			2		57
Stock-based compensation expense		2			-		2			7			-		7
Storm-related insurance proceeds		(1	)		-		(1	)		(1	)		-		(1	)
Adjusted operating expenses	$	2,219		$	66	$	2,153		$	2,413		$	104	$	2,309

(1) Amounts represent the financial results of our Northwest Operations for the one month period ended April 30, 2020.

(2) Amounts represent the financial results of our Northwest Operations for the three month periods ended March 31, 2020, and June 30, 2019.

(3) Operating expenses for Northwest Ops do not include allocated expenses which are included in operating expenses for our Remaining Properties.

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