10-Q 1 fybr-20230930x10q.htm 10-Q fybr-20230930x10q
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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 September 30, 2023

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

Picture 2

FRONTIER COMMUNICATIONS PARENT, INC.

(Exact name of registrant as specified in its charter)

Delaware

86-2359794

(State or other jurisdiction of

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

incorporation or organization)

1919 McKinney Avenue

Dallas, Texas

75201

(Address of principal executive offices)

(Zip Code)

Registrant's telephone number, including area code: (972) 445-0042

401 Merritt 7, Norwalk, Connecticut 06851

(Former name, former address and former fiscal year, if changed from last report)

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 if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes __ No _X_

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or 15(d) of the Act. Yes __ No _X_

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 and posted on its corporate Website, if any, every Interactive Data File required to be submitted and posted 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 and post 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 “large accelerated filer”, “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 has filed a report on and attestation to its management’s assessment of the effectiveness of its internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or issued its audit report. x

If securities are registered pursuant to Section 12(b) of the Act, indicate by check mark whether the financial statements of the registrant included in the filing reflect the correction of an error to previously issued financial statements. o

Indicate by check mark whether any of those error corrections are restatements that required a recovery analysis of incentive-based compensation received by any of the registrant’s executive officers during the relevant recovery period pursuant to §240.10D-1(b). o

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 October 30, 2023 was 245,789,000.


FRONTIER COMMUNICATIONS PARENT, INC. AND SUBSIDIARIES

Table of Contents

Page

Part I. Financial Information (Unaudited)

Item 1. Financial Statements

Consolidated Balance Sheets as of September 30, 2023, and December 31, 2022

1

Consolidated Statements of Income for the three and nine months ended September 30, 2023, and 2022

2

Consolidated Statements of Comprehensive Income for the three and nine months ended September 30, 2023, and 2022

3

Consolidated Statements of Equity for the three and nine months ended September 30, 2023, and 2022

4

Consolidated Statements of Cash Flows for the nine months ended September 30, 2023, and 2022

5

Notes to Consolidated Financial Statements

6

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

34

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 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)

September 30, 2023

December 31, 2022

ASSETS

Current assets:

Cash and cash equivalents

$

948

$

322

Short-term investments

1,275

1,750

Accounts receivable, less allowances of $33 and $47, respectively

449

438

Prepaid expenses

79

57

Income taxes and other current assets

47

30

Total current assets

2,798

2,597

Property, plant and equipment, net

13,621

11,850

Other intangibles, net

3,665

3,906

Other assets

425

271

Total assets

$

20,509

$

18,624

LIABILITIES AND EQUITY

Current liabilities:

Long-term debt due within one year

$

15

$

15

Accounts payable

885

1,410

Advanced billings

202

194

Accrued other taxes

131

137

Accrued interest

183

104

Pension and other postretirement benefits

39

39

Other current liabilities

596

396

Total current liabilities

2,051

2,295

Deferred income taxes

565

558

Pension and other postretirement benefits

866

1,044

Other liabilities

529

483

Long-term debt

11,258

9,110

Total liabilities

15,269

13,490

Equity:

Common stock, $0.01 par value (1,750,000 authorized shares, 245,782

and 245,021 shares issued and outstanding at September 30, 2023 and

December 31, 2022, respectively)

2

2

Additional paid-in capital

4,271

4,198

Retained earnings

867

855

Accumulated other comprehensive income, net of tax

100

79

Total equity

5,240

5,134

Total liabilities and equity

$

20,509

$

18,624

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


1


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)

For the three months ended

For the nine months ended

September 30,

September 30,

2023

2022

2023

2022

Revenue

$

1,436

$

1,444 

$

4,325

$

4,350 

Operating expenses:

Cost of service

545

544 

1,615

1,643 

Selling, general, and administrative expenses

405

431 

1,250

1,293 

Depreciation and amortization

356

296 

1,040

870 

Restructuring costs and other charges

16

4 

48

88 

Total operating expenses

1,322

1,275 

3,953

3,894 

Operating income

114

169 

372

456 

Investment and other income, net (See Note 10)

67

211 

101

410 

Pension settlement costs

-

(50)

-

(50)

Interest expense

(170)

(135)

(460)

(356)

Income before income taxes

11

195 

13

460 

Income tax expense

-

75 

1

174 

Net income

$

11

$

120 

$

12

$

286 

Basic net earnings per share

attributable to Frontier common shareholders

$

0.05

$

0.49 

$

0.05

$

1.17 

Diluted net earnings per share

attributable to Frontier common shareholders

$

0.05

$

0.49 

$

0.05

$

1.17 

Total weighted average shares outstanding - basic

245,761

244,984 

245,431

244,711 

Total weighted average shares outstanding - diluted

247,447

245,212 

247,336

245,080 

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 COMPREHENSIVE INCOME

($ in millions)

(Unaudited)

For the three months ended

For the nine months ended

September 30,

September 30,

2023

2022

2023

2022

Net income

$

11

$

120

$

12

$

286

Other comprehensive income (loss), net of tax

8

(2)

21

-

Comprehensive income

$

19

$

118

$

33

$

286

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 EQUITY

($ in millions and shares in thousands)

(Unaudited)

For the nine months ended September 30, 2023

Accumulated

Additional

Other

Common Stock

Paid-In

Retained

Comprehensive

Total

Shares

Amount

Capital

Earnings

Income

Equity

Balance at January 1, 2023

245,021

$

2

$

4,198

$

855

$

79

$

5,134

Stock plans, net

211

-

22

-

-

22

Net income

-

-

-

3

-

3

Other comprehensive