Frontier Communications Parent, Inc. [FYBR] Filings

10-Q 1 fybr-20220331x10q.htm 10-Q fybr-20220331x10q

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

¨ 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

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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.

‎

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.

‎

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.

‎

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	-		-		-

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