10-Q 1 fybr-20220331x10q.htm 10-Q fybr-20220331x10q
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UNITED STATES SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q

x QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended March 31, 2022

or

¨ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from _________to__________

Commission file number: 001-11001

Icon

Description automatically generated

FRONTIER COMMUNICATIONS PARENT, INC.

(Exact name of registrant as specified in its charter)

Delaware

86-2359749

(State or other jurisdiction of

(I.R.S. Employer Identification No.)

incorporation or organization)

401 Merritt 7

Norwalk, Connecticut

06851

(Address of principal executive offices)

(Zip Code)

Registrant's telephone number, including area code: (203) 614-5600

Securities registered pursuant to Section 12(b) of the Act:

Title of each class

Trading Symbol

Name of each exchange on which registered

Common Stock, par value $0.01 per share

FYBR

The NASDAQ Stock Market LLC

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

Yes x No ¨

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).

Yes x No ¨

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See definition of “accelerated filer,” “large accelerated filer”, “smaller reporting company”, and “emerging growth company” in Rule 12b-2 of the Exchange Act. (Check one):

Large accelerated filer x Accelerated filer ¨ Non-accelerated filer ¨

Smaller reporting company ¨ Emerging growth company ¨

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act ¨

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

Yes ¨ No x

The number of shares outstanding of the registrant’s Common Stock as of May 2, 2022 was 244,963,000.


FRONTIER COMMUNICATIONS PARENT, INC. AND SUBSIDIARIES

Table of Contents

Page

Part I. Financial Information (Unaudited)

Item 1. Financial Statements

Consolidated Balance Sheets as of March 31, 2022 (Successor), and December 31, 2021 (Predecessor)

2

Consolidated Statements of Income for the three months ended March 31, 2022 (Successor), and the three months ended March 31, 2021 (Predecessor)

3

Consolidated Statements of Comprehensive Income for the three months ended March 31, 2022 (Successor), and the three months ended March 31, 2021 (Predecessor)

4

Consolidated Statements of Equity for the three months ended March 31, 2022 (Successor), the three months ended March 31, 2021 (Predecessor)

5

Consolidated Statements of Cash Flows for the three months ended March 31, 2022 (Successor), the three months ended March 31, 2021 (Predecessor)

6

Notes to Consolidated Financial Statements

7

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

36

Item 3. Quantitative and Qualitative Disclosures about Market Risk

52

Item 4. Controls and Procedures

53

Part II. Other Information

Item 1. Legal Proceedings

54

Item 1A. Risk Factors

54

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

54

Item 6. Exhibits

55

Signature

56


PART I. FINANCIAL INFORMATION

Item 1.Financial Statements

FRONTIER COMMUNICATIONS PARENT, INC. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

($ in millions and shares in thousands, except for per-share amounts)

(Unaudited)

March 31, 2022

December 31, 2021

ASSETS

Current assets:

Cash and cash equivalents

$

1,300 

$

2,127 

Short-term investments

900 

-

Accounts receivable, less allowances of $65 and $57, respectively

397 

458 

Prepaid expenses

60 

73 

Income taxes and other current assets

31 

30 

Total current assets

2,688 

2,688 

Property, plant and equipment, net

9,575 

9,199 

Other intangibles, net

4,147 

4,227 

Other assets

345 

367 

Total assets

$

16,755 

$

16,481 

LIABILITIES AND EQUITY

Current liabilities:

Long-term debt due within one year

$

15 

$

15 

Accounts payable

694 

535 

Advanced billings

202 

197 

Accrued other taxes

178 

183 

Accrued interest

153 

76 

Pension and other postretirement benefits

46 

46 

Other current liabilities

425 

399 

Total current liabilities

1,713 

1,451 

Deferred income taxes

412 

387 

Pension and other postretirement benefits

1,580 

1,672 

Other liabilities

415 

403 

Long-term debt

7,957 

7,968 

Total liabilities

12,077 

11,881 

Equity:

Common stock, $0.01 par value (1,750,000 authorized shares, 244,476 and

244,416 shares issued and outstanding at March 31, 2022 and

December 31, 2021, respectively)

2 

2 

Additional paid-in capital

4,139 

4,124 

Retained earnings

479 

414 

Accumulated other comprehensive income, net of tax

58 

60 

Total equity

4,678 

4,600 

Total liabilities and equity

$

16,755 

$

16,481 

The accompanying Notes are an integral part of these unaudited Consolidated Financial Statements.


2


PART I. FINANCIAL INFORMATION (Continued)

FRONTIER COMMUNICATIONS PARENT, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF INCOME

($ in millions and shares in thousands, except for per-share amounts)

(Unaudited)

Successor

Predecessor

For the three months

For the three months

ended March 31,

ended March 31,

2022

2021

Revenue

$

1,447 

$

1,676 

Operating expenses:

Cost of service

553 

620 

Selling, general and administrative expenses

435 

408 

Depreciation and amortization

284 

387 

Restructuring costs and other charges

54 

2 

Total operating expenses

1,326 

1,417 

Operating income

121 

259 

Investment and other income, net

77 

2 

Reorganization items, net

-

(25)

Interest expense (See Note 8)

(103)

(89)

Income before income taxes

95 

147 

Income tax expense

30 

87 

Net income

$

65 

$

60 

Basic net earnings per share

attributable to Frontier common shareholders

$

0.27 

$

0.57 

Diluted net earnings per share

attributable to Frontier common shareholders

$

0.26 

$

0.57 

Total weighted average shares outstanding - basic

244,433 

104,556 

Total weighted average shares outstanding - diluted

245,251 

104,896 

The accompanying Notes are an integral part of these unaudited Consolidated Financial Statements.


3


PART I. FINANCIAL INFORMATION (Continued)

FRONTIER COMMUNICATIONS PARENT, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

($ in millions)

(Unaudited)

Successor

Predecessor

For the three months

For the three months

ended March 31,

ended March 31,

2022

2021

Net income

$

65 

$

60 

Other comprehensive income (loss), net of tax

(2)

11 

Comprehensive income

$

63 

$

71 

The accompanying Notes are an integral part of these unaudited Consolidated Financial Statements.


4


PART I. FINANCIAL INFORMATION (Continued)

FRONTIER COMMUNICATIONS PARENT, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF EQUITY (DEFICIT)

($ in millions and shares in thousands)

(Unaudited)

For the three months ended March 31, 2022 (Successor)

Accumulated

Additional

Other

Common Stock

Paid-In

Retained

Comprehensive

Total

Shares

Amount

Capital

Earnings

Income

Equity

Balance at January 1, 2022

244,416

$

2

$

4,124

$

414

$

60

$

4,600

Stock plans

60

-

15

-

-

15

Net income

-

-

-

65

-

65

Other comprehensive

income (loss), net of tax

-

-

-

-

(2)

(2)

Balance at March 31, 2022

244,476

$

2

$

4,139

$

479

$

58

$

4,678

For the three months ended March 31, 2021 (Predecessor)

Accumulated

Additional

Other

Treasury

Total

Common Stock

Paid-In

Accumulated

Comprehensive

Common Stock

Equity

Shares

Amount

Capital

Deficit

Income (Loss)

Shares

Amount

(Deficit)

Balance at January 1, 2021

106,025

$

27

$

4,817

$

(8,975)

$

(755)

(1,232)

$

(14)

$

(4,900)

Stock plans

-

-

-