Group 1: Spectrum Auction Insights - The FCC is expected to initiate the AWS-3 spectrum auction in the first half of 2026, aiming to raise $85 billion through the Middle Band Spectrum as part of the "Big and Beautiful Act" [2] - Major telecom players T-Mobile and Verizon are likely to participate in the upcoming auction, with SpaceX's Starlink also showing interest in expanding its mobile network business [2] - EchoStar plans to re-auction its AWS-3 DE spectrum in the same timeframe, with a stipulation to cover any shortfall if the auction price is below $3.3 billion [2] Group 2: Mergers and Acquisitions - Verizon's acquisition of Frontier is progressing well, with approvals in most states and California being the last hurdle, expected to be fully approved by the end of 2025 [3] Group 3: Broadcasting Ownership Regulations - The FCC may lift the 39% ownership cap for broadcast companies by the end of 2025, potentially allowing groups to own more than two TV stations in a single market and facilitating mergers between two TV networks [4]

Core Insights - The telecommunications industry is experiencing intense competition as companies strive to provide faster internet speeds, with fiber technology being a key focus [1][2] - Verizon's recent $20 billion acquisition of Frontier Communications has received Federal Communications Commission approval, positioning both companies to strengthen their market presence against AT&T [2][3] Industry Trends - Fiber adoption in the U.S. is increasing, with Frontier reporting a record number of new subscribers in Q2, while Verizon has over 7 million fiber subscribers [4][6] - Fiber broadband penetration in the U.S. is around 35%, significantly lower than global averages of 60% to 98%, attributed to a long-standing reliance on cable technology [6] Technological Advancements - Fiber technology is described as "tomorrow's technology," offering superior data transmission speeds compared to traditional cable, which is limited by copper wiring [6][7] - Fiber infrastructure is considered essential for the future of artificial intelligence, requiring significant compute power, energy, and connectivity [9][10] Government Support - Texas has received $3.3 billion in federal funds to enhance high-speed internet access in rural and underserved areas, supporting the expansion of fiber networks [11][12] - The federal government endorses fiber development as a strategic initiative, aligning with the industry's growth objectives [12] Company Strategy - Frontier is rebranding itself to reflect a modern tech-oriented image, moving away from traditional telecom aesthetics to attract consumers [12][13] - The company emphasizes user-friendly solutions that address real consumer needs, such as reliable connectivity for remote work and everyday activities [8][10]

Core Insights - Frontier Communications reported $1.54 billion in revenue for Q2 2025, a 4% year-over-year increase, with an EPS of -$0.49, unchanged from the previous year [1] - The revenue exceeded the Zacks Consensus Estimate of $1.52 billion by 1.33%, while the EPS fell short of the consensus estimate of -$0.31 by 58.06% [1] Financial Performance Metrics - Broadband customers reached 3.23 million, slightly above the average estimate of 3.21 million [4] - Total Fiber Penetration was reported at 30.9%, exceeding the estimated 30.7% [4] - Revenue from contracts with customers was $1.52 billion, a 3.8% increase year-over-year, surpassing the average estimate of $1.51 billion [4] - Revenue from Fiber-Consumer services was $609 million, reflecting a 16.4% year-over-year increase, compared to the average estimate of $608.26 million [4] - Revenue from Video services was $68 million, a decline of 22.7% year-over-year, below the average estimate of $69.18 million [4] - Revenue from Fiber-Business and Wholesale was $330 million, a 4.1% year-over-year increase, exceeding the average estimate of $326.19 million [4] Stock Performance - Shares of Frontier Communications have returned +0.6% over the past month, compared to the Zacks S&P 500 composite's +3.6% change [3] - The stock currently holds a Zacks Rank 3 (Hold), indicating potential performance in line with the broader market in the near term [3]

PART I. FINANCIAL INFORMATION (Unaudited) [Item 1. Financial Statements](index=3&type=section&id=Item%201.%20Financial%20Statements) This section presents the unaudited consolidated financial statements of Frontier Communications Parent, Inc. and its subsidiaries, including the balance sheets, statements of operations, comprehensive loss, equity, and cash flows, along with detailed notes explaining significant accounting policies, recent transactions, and financial instrument details [Consolidated Balance Sheets](index=3&type=section&id=Consolidated%20Balance%20Sheets) | ASSETS ($ in millions) | June 30, 2025 | December 31, 2024 | | :--------------------- | :------------ | :---------------- | | Cash and cash equivalents | $412 | $750 | | Total current assets | $1,025 | $1,260 | | Property, plant and equipment, net | $16,785 | $15,678 | | Total assets | $21,265 | $20,614 | | LIABILITIES AND EQUITY ($ in millions) | June 30, 2025 | December 31, 2024 | | :--------------------- | :------------ | :---------------- | | Total current liabilities | $2,870 | $2,289 | | Long-term debt | $11,860 | $11,551 | | Total liabilities | $16,504 | $15,673 | | Total equity | $4,761 | $4,941 | | Total liabilities and equity | $21,265 | $20,614 | [Consolidated Statements of Operations](index=4&type=section&id=Consolidated%20Statements%20of%20Operations) | ($ in millions) | For the three months ended June 30, 2025 | For the three months ended June 30, 2024 | For the six months ended June 30, 2025 | For the six months ended June 30, 2024 | | :---------------------- | :--------------------------------------- | :--------------------------------------- | :------------------------------------- | :------------------------------------- | | Revenue | $1,539 | $1,480 | $3,050 | $2,942 | | Total operating expenses | $1,495 | $1,389 | $2,930 | $2,761 | | Operating income | $44 | $91 | $120 | $181 | | Net loss | $(123) | $(123) | $(187) | $(122) | | Basic net loss per share | $(0.49) | $(0.49) | $(0.75) | $(0.49) | [Consolidated Statements of Comprehensive Loss](index=5&type=section&id=Consolidated%20Statements%20of%20Comprehensive%20Loss) | ($ in millions) | For the three months ended June 30, 2025 | For the three months ended June 30, 2024 | For the six months ended June 30, 2025 | For the six months ended June 30, 2024 | | :-------------- | :--------------------------------------- | :--------------------------------------- | :------------------------------------- | :------------------------------------- | | Net loss | $(123) | $(123) | $(187) | $(122) | | Other comprehensive loss, net of tax | $(4) | $(4) | $(9) | $(9) |\ | Comprehensive loss | $(127) | $(127) | $(196) | $(131) | [Consolidated Statements of Equity](index=6&type=section&id=Consolidated%20Statements%20of%20Equity) | ($ in millions) | Balance at January 1, 2025 | Stock plans, net | Net loss | Other comprehensive loss, net of tax | Balance at June 30, 2025 | | :-------------- | :------------------------- | :--------------- | :------- | :----------------------------------- | :----------------------- | | Common Stock (Shares) | 249,695 | 604 | - | - | 250,299 | | Common Stock (Amount) | $3 | - | - | - | $3 | | Additional Paid-In Capital | $4,299 | $16 | - | - | $4,315 | | Retained Earnings | $562 | - | $(187) | - | $375 | | Accumulated Other Comprehensive Income | $77 | - | - | $(9) | $68 | | Total Equity | $4,941 | $16 | $(187) | $(9) | $4,761 | [Consolidated Statements of Cash Flows](index=7&type=section&id=Consolidated%20Statements%20of%20Cash%20Flows) | ($ in millions) | For the six months ended June 30, 2025 | For the six months ended June 30, 2024 | | :------------------------------------------ | :------------------------------------- | :------------------------------------- | | Net cash provided from operating activities | $996 | $709 | | Net cash used by investing activities | $(1,597) | $(207) | | Net cash provided from (used by) financing activities | $254 | $(495) | | Increase (Decrease) in cash, cash equivalents, and restricted cash | $(347) | $7 | | Cash, cash equivalents, and restricted cash at June 30, | $564 | $1,246 | [Notes to Consolidated Financial Statements](index=8&type=section&id=Notes%20to%20Consolidated%20Financial%20Statements) [(1) Summary of Significant Accounting Policies](index=8&type=section&id=(1)%20Summary%20of%20Significant%20Accounting%20Policies) This section outlines the company's foundational accounting principles, including its business description as a communications service provider, basis of financial statement presentation, use of estimates, going concern assessment, and policies for cash equivalents, investments, revenue recognition, property, plant and equipment, intangible assets, impairment, lease accounting, income taxes, and stock plans - Frontier Communications Parent, Inc. is a communications services provider in **25 states**, with approximately **3.2 million** broadband subscribers and **12,800** employees as of June 30, 2025[22](index=22&type=chunk) - The company operates in one reportable segment, providing regulated and unregulated voice, data, and video services to consumer, business, and wholesale customers[24](index=24&type=chunk) - Management believes the company has the ability to meet its obligations for at least one year from the Form 10-Q issuance date, preparing financial statements on a going concern basis[27](index=27&type=chunk) - Revenue for data, internet, voice, video, and access services is recognized as services are provided, with advance billings deferred and unbilled portions accrued[32](index=32&type=chunk) - The company accepted **$37 million** in annual support through **2032** under the RDOF Phase I program to build broadband networks in rural communities, with deployment milestones starting December 31, 2025[41](index=41&type=chunk) [(2) Merger Agreement](index=12&type=section&id=(2)%20Merger%20Agreement) Frontier entered into a Merger Agreement with Verizon Communications Inc. on September 4, 2024, for Verizon to acquire Frontier at $38.50 per share in cash. The merger, unanimously approved by Frontier's Board, is subject to regulatory approvals and is expected to close by Q1 2026. Certain outstanding stock awards will convert to cash or Verizon RSUs - Frontier entered into a Merger Agreement with Verizon Communications Inc. on September 4, 2024, for Verizon to acquire Frontier[51](index=51&type=chunk) - Each common stock share will be converted into the right to receive **$38.50** in cash[52](index=52&type=chunk) - The merger is expected to close by the first quarter of 2026, following approvals from stockholders (obtained Nov 13, 2024), HSR (expired Feb 14, 2025), and FCC (approved May 16, 2025)[54](index=54&type=chunk) - Upon termination under specified circumstances, Frontier may pay Verizon a **$320 million** fee, or Verizon may pay Frontier a **$590 million** fee for regulatory approval failures[56](index=56&type=chunk) [(3) Recent Accounting Pronouncements](index=13&type=section&id=(3)%20Recent%20Accounting%20Pronouncements) Frontier is evaluating the impact of two new accounting standards: ASU 2024-03, requiring detailed expense disaggregation disclosures effective after December 15, 2026, and ASU 2023-09, improving income tax disclosures effective after December 15, 2024 - ASU No. 2024-03 requires detailed expense disaggregation disclosures, effective for annual periods beginning after December 15, 2026[58](index=58&type=chunk) - ASU No. 2023-09 mandates improved income tax disclosures, effective for annual periods beginning after December 15, 2024[60](index=60&type=chunk) [(4) Revenue Recognition](index=14&type=section&id=(4)%20Revenue%20Recognition) Frontier categorizes its revenue into Data and Internet, Voice, Video, Other, and Subsidy. Data and Internet services showed significant growth, while Voice and Video services declined. Consumer and Business/Wholesale segments both contributed to overall revenue growth Revenue by Category (Three Months Ended June 30) | ($ in millions) | 2025 | 2024 | | :-------------- | :---- | :---- | | Data and Internet services | $1,085 | $983 | | Voice services | $282 | $312 | | Video services | $68 | $88 | | Other | $87 | $83 | | Subsidy and other revenue | $17 | $14 | | Total revenue | $1,539 | $1,480 | Revenue by Customer Segment (Three Months Ended June 30) | ($ in millions) | 2025 | 2024 | | :-------------- | :---- | :---- | | Consumer | $825 | $789 | | Business and wholesale | $697 | $677 | | Subsidy and other revenue | $17 | $14 | | Total revenue | $1,539 | $1,480 | - Estimated future revenue from unsatisfied performance obligations totals **$1,147 million**, with **$643 million** expected in the remaining six months of 2025[66](index=66&type=chunk) [(5) Accounts Receivable](index=16&type=section&id=(5)%20Accounts%20Receivable) Accounts receivable, net, increased to $430 million as of June 30, 2025, from $379 million at December 31, 2024. The allowance for doubtful accounts increased slightly to $67 million. The provision for bad debts for the six months ended June 30, 2025, was $21 million | ($ in millions) | June 30, 2025 | December 31, 2024 | | :-------------- | :------------ | :---------------- | | Retail and Wholesale | $446 | $388 | | Other | $51 | $57 | | Less: Allowance for doubtful accounts | $(67) | $(66) | | Accounts receivable, net | $430 | $379 | - The provision for bad debts was **$21 million** for the six months ended June 30, 2025, a slight increase from **$20 million** in the prior year[68](index=68&type=chunk) [(6) Property, Plant and Equipment](index=17&type=section&id=(6)%20Property,%20Plant%20and%20Equipment) Net property, plant and equipment increased to $16,785 million as of June 30, 2025, from $15,678 million at December 31, 2024. Capital expenditures for the six months ended June 30, 2025, were $1,602 million, with $31 million in capitalized interest | ($ in millions) | June 30, 2025 | December 31, 2024 | | :-------------- | :------------ | :---------------- | | Property, plant and equipment | $21,151 | $19,318 | | Less: Accumulated depreciation | $(4,366) | $(3,640) | | Property, plant and equipment, net | $16,785 | $15,678 | - Capital expenditures for the six months ended June 30, 2025, were **$1,602 million**, an increase from **$1,292 million** in the prior year[72](index=72&type=chunk)[264](index=264&type=chunk) - Depreciation expense for the six months ended June 30, 2025, was **$741 million**, up from **$625 million** in the prior year[73](index=73&type=chunk) [(7) Intangibles](index=17&type=section&id=(7)%20Intangibles) Total other intangibles, net, decreased to $3,104 million as of June 30, 2025, from $3,264 million at December 31, 2024, primarily due to amortization. No impairment was identified for intangibles or property, plant and equipment | ($ in millions) | June 30, 2025 Net Carrying Amount | December 31, 2024 Net Carrying Amount | | :-------------- | :-------------------------------- | :------------------------------------ | | Customer Relationships - Business | $497 | $533 | | Customer Relationships - Wholesale | $2,582 | $2,691 | | Trademarks & Tradenames | $25 | $40 | | Total other intangibles | $3,104 | $3,264 | - Amortization expense for the six months ended June 30, 2025, was **$161 million**, consistent with the prior year[75](index=75&type=chunk) [(8) Fair Value of Financial Instruments](index=18&type=section&id=(8)%20Fair%20Value%20of%20Financial%20Instruments) The fair value of Frontier's total long-term debt was estimated at $12,123 million as of June 30, 2025, compared to a carrying amount of $11,896 million. Carrying amounts for other financial instruments approximate fair value due to short maturities | ($ in millions) | June 30, 2025 Carrying Amount | June 30, 2025 Fair Value | December 31, 2024 Carrying Amount | December 31, 2024 Fair Value | | :-------------- | :---------------------------- | :----------------------- | :-------------------------------- | :--------------------------- | | Total debt | $11,896 | $12,123 | $11,569 | $11,749 | [(9) Long-Term Debt](index=18&type=section&id=(9)%20Long-Term%20Debt) Frontier's total principal outstanding long-term debt increased to $11,896 million as of June 30, 2025, from $11,569 million at January 1, 2025, primarily due to new borrowings by subsidiaries. The company has various secured and unsecured debt instruments, including term loans, first and second lien notes, and fiber network revenue term notes Long-Term Debt Activity (Six Months Ended June 30, 2025) | ($ in millions) | January 1, 2025 | Principal Payments and Retirements | New Borrowings | June 30, 2025 | | :-------------- | :-------------- | :--------------------------------- | :------------- | :------------ | | Secured debt issued by Frontier | $8,436 | $(3) | - | $8,433 |\ | Secured debt issued by subsidiaries | $2,383 | - | $330 | $2,713 |\ | Unsecured debt issued by subsidiaries | $750 | - | - | $750 |\ | Principal outstanding | $11,569 | $(3) | $330 | $11,896 | - The weighted average interest rate on principal outstanding debt was **6.801%** at June 30, 2025, down from **6.996%** at December 31, 2024[80](index=80&type=chunk) - Frontier Holdings amended its Revolving Facility and Term Loan Facility in 2025, lowering interest margins and revising prepayment requirements[89](index=89&type=chunk)[91](index=91&type=chunk) - A new **$1.5 billion** Delayed Draw Term Loan (DDTL) Facility was established on December 31, 2024, for Frontier Tampa Bay FL Fiber 1 LLC, secured by fiber network assets[96](index=96&type=chunk) - On July 1, 2024, Frontier Issuer LLC completed the issuance of **$750 million** in secured fiber network revenue term notes with a weighted average yield of approximately **7.4%**[98](index=98&type=chunk) [(10) Restructuring and Other Charges](index=23&type=section&id=(10)%20Restructuring%20and%20Other%20Charges) Restructuring and other charges for the six months ended June 30, 2025, totaled $52 million, a decrease from $60 million in the prior year. These costs primarily include severance, employee costs from workforce reductions, and consulting/legal fees related to the Verizon merger - Restructuring charges and other costs for the six months ended June 30, 2025, were **$52 million**, down from **$60 million** in the prior year[105](index=105&type=chunk)[106](index=106&type=chunk) - Current period charges included **$31 million** for severance and employee costs and **$21 million** for consulting and legal costs related to the Verizon merger[105](index=105&type=chunk) [(11) Investment and Other Income, Net](index=24&type=section&id=(11)%20Investment%20and%20Other%20Income,%20Net) Investment and other income, net, increased by $38 million to $14 million for the three months ended June 30, 2025, primarily due to a non-recurring pension remeasurement loss in the prior year. However, for the six-month period, it decreased by $25 million to $63 million, mainly due to reduced post-retirement remeasurement gain and lower interest/dividend income | ($ in millions) | For the three months ended June 30, 2025 | For the three months ended June 30, 2024 | For the six months ended June 30, 2025 | For the six months ended June 30, 2024 | | :-------------- | :--------------------------------------- | :--------------------------------------- | :------------------------------------- | :------------------------------------- | | Interest and dividend income | $7 | $20 | $16 | $38 | | Pension benefit | $6 | $9 | $12 | $21 | | OPEB costs | $(1) | $(1) | $(2) | $(2) | | OPEB remeasurement gain (loss) | - | $18 | $(8) | $27 | | Pension remeasurement gain (loss) | - | $(72) | $44 | $2 | | All other, net | $2 | $2 | $1 | $2 | | Total investment and other income (loss), net | $14 | $(24) | $63 | $88 | - The three-month increase was primarily due to a **$72 million** pension remeasurement loss in Q2 2024, partially offset by a **$13 million** reduction in interest and dividend income[109](index=109&type=chunk) - The six-month decrease was mainly due to a **$35 million** reduction in post-retirement remeasurement gain and a **$22 million** reduction in interest and dividend income, partially offset by a **$42 million** increase in pension remeasurement gain[110](index=110&type=chunk) [(12) Stock Plans](index=24&type=section&id=(12)%20Stock%20Plans) Frontier operates under the 2024 Management Incentive Plan, with 8,336,901 shares available for awards as of June 30, 2025. The plan issues time-based Restricted Stock Units (RSUs) and performance-based Stock Units (PSUs), with compensation expense recognized over their vesting periods. The 2022 PSU awards paid out at 133.7% of target - As of June 30, 2025, there were **8,336,901** shares available to grant under the 2024 Management Incentive Plan[112](index=112&type=chunk) Restricted Stock Units Activity (Six Months Ended June 30, 2025) | (in thousands) | Number of Shares | Weighted Average Grant Date Fair Value (per share) | | :------------- | :--------------- | :----------------------------------------------- | | Balance at January 1, 2025 | 2,058 | $24.45 | | Granted | 859 | $35.88 | | Vested | (720) | $24.99 | | Forfeited | (56) | $25.19 | | Balance at June 30, 2025 | 2,141 | $28.84 | - Total unrecognized compensation cost for unvested restricted stock awards was **$49 million**, expected to be recognized over approximately **2 years**[113](index=113&type=chunk) - PSU awards for 2025 are based on Adjusted Fiber EBITDA and Fiber Revenue (**50%** each), while 2024 PSUs also include Relative Total Shareholder Return (TSR). The 2022 PSU awards paid out at **133.7%** of target[116](index=116&type=chunk)[117](index=117&type=chunk)[119](index=119&type=chunk) [(13) Income Taxes](index=27&type=section&id=(13)%20Income%20Taxes) Frontier recorded an income tax benefit of $16 million for the three months and $27 million for the six months ended June 30, 2025, on pre-tax losses. The effective tax rates were 11.6% and 12.8% respectively. A valuation allowance of $374 million ($295 million net of federal benefit) was recorded as of June 30, 2025, due to pre-tax book losses Effective Tax Rate Reconciliation | | For the three months ended June 30, 2025 | For the three months ended June 30, 2024 | For the six months ended June 30, 2025 | For the six months ended June 30, 2024 | | :------------------------------------------ | :--------------------------------------- | :--------------------------------------- | :------------------------------------- | :------------------------------------- | | Consolidated tax provision at federal statutory rate | 21.0 % | 21.0 % | 21.0 % | 21.0 % | | State income tax provisions, net of federal income tax benefit | (7.6) % | (9.9) % | (7.0) % | (10.5) % | | Effective tax rate | 11.6% | 6.7 % | 12.8 % | 5.3 % | - A valuation allowance of **$374 million** (**$295 million** net of federal benefit) was recorded as of June 30, 2025, due to recent pre-tax book losses[130](index=130&type=chunk) - The company will evaluate the effects of the newly enacted One Big Beautiful Bill Act (OBBB) in the third quarter, which makes many 2017 TCJA provisions permanent[131](index=131&type=chunk) [(14) Net (Loss) Earnings Per Share](index=28&type=section&id=(14)%20Net%20(Loss)%20Earnings%20Per%20Share) Frontier reported a basic and diluted net loss per share of $(0.49) for the three months ended June 30, 2025 and 2024. For the six months ended June 30, 2025, the net loss per share was $(0.75), compared to $(0.49) in the prior year. Certain RSUs and PSUs were excluded from diluted EPS calculation as their effect would be antidilutive | ($ in millions and shares in thousands, except per share amounts) | For the three months ended June 30, 2025 | For the three months ended June 30, 2024 | For the six months ended June 30, 2025 | For the six months ended June 30, 2024 | | :---------------------------------------------------------------- | :--------------------------------------- | :--------------------------------------- | :------------------------------------- | :------------------------------------- | | Total basic net loss attributable to Frontier common shareholders | $(123) | $(123) | $(187) | $(122) | | Basic net loss per share attributable to Frontier common shareholders | $(0.49) | $(0.49) | $(0.75) | $(0.49) | - Approximately **1,043,000** RSUs and **898,000** PSUs for the three months ended June 30, 2025, were excluded from diluted EPS calculation due to their antidilutive effect[133](index=133&type=chunk) [(15) Comprehensive Income](index=29&type=section&id=(15)%20Comprehensive%20Income) Comprehensive income includes net income and other gains/losses affecting equity and pension/OPEB liabilities. Accumulated other comprehensive income, net of tax, decreased to $68 million at June 30, 2025, from $77 million at January 1, 2025, primarily due to reclassifications of OPEB costs to net loss Accumulated Other Comprehensive Income (OPEB Costs) | ($ in millions) | Balance at January 1, 2025 | Amounts reclassified from accumulated other comprehensive loss to net loss | Balance at June 30, 2025 | | :-------------- | :------------------------- | :----------------------------------------------------------------------- | :----------------------- | | OPEB Costs | $77 | $(9) | $68 | Reclassified Amounts from Accumulated Other Comprehensive Income to Net Loss | ($ in millions) | For the three months ended June 30, 2025 | For the six months ended June 30, 2025 | Affected Line Item in the Statement Where Net Income (Loss) is Presented | | :-------------- | :--------------------------------------- | :------------------------------------- | :--------------------------------------------------------------------- | | Prior-service credits (costs) | $6 | $12 | Income (loss) before income taxes | | Tax impact | $(2) | $(3) | Income tax benefit | | Net income | $4 | $9 | Net income | [(16) Retirement Plans](index=30&type=section&id=(16)%20Retirement%20Plans) Frontier's pension plan assets increased by $99 million to $2,427 million at June 30, 2025. The company recognized a $44 million pension remeasurement gain for the six months ended June 30, 2025, related to a voluntary separation plan. Total pension benefit cost for the six months ended June 30, 2025, was a benefit of $34 million, compared to a cost of $10 million in the prior year Pension Benefits Cost Components (Six Months Ended June 30) | ($ in millions) | 2025 | 2024 | | :-------------- | :---- | :---- | | Service cost | $22 | $23 | | Interest cost | $64 | $63 | | Expected return on plan assets | $(76) | $(84) | | Pension remeasurement gain | $(44) | $(2) | | Net periodic pension (benefit) costs | $(34) | - | | Pension special termination benefit enhancements | - | $10 | | Total pension (benefit) cost | $(34) | $10 | - Pension plan assets increased by **$99 million** to **$2,427 million** at June 30, 2025, driven by market value changes and contributions, offset by benefit payments[141](index=141&type=chunk) - A remeasurement gain of **$44 million** was recognized for the six months ended June 30, 2025, due to special termination benefit enhancements[142](index=142&type=chunk) Postretirement Benefit Cost Components (Six Months Ended June 30) | ($ in millions) | 2025 | 2024 | | :-------------- | :---- | :---- | | Service cost | $2 | $3 | | Interest cost | $14 | $15 | | Amortization of prior service credit gain | $(12) | $(13) | | OPEB remeasurement (gain) loss | $8 | $(27) | | Total periodic postretirement (benefit) cost | $12 | $(22) | [(17) Commitments and Contingencies](index=31&type=section&id=(17)%20Commitments%20and%20Contingencies) Frontier is involved in various legal proceedings and governmental investigations, including lawsuits related to the Verizon merger, which the company believes are without merit. The company accrued an incremental $66 million for legal disputes and settlements in Q2 2025. Frontier is actively pursuing broadband stimulus funds (BEAD, RDOF) but faces uncertainties regarding program requirements and potential penalties for non-compliance - Frontier accrued an incremental **$66 million** for legal disputes and settlements in Q2 2025, primarily for intellectual property and pole attachment matters[149](index=149&type=chunk) - Lawsuits and demand letters have been filed by stockholders regarding the Verizon merger, alleging disclosure deficiencies, which the company believes have no merit[150](index=150&type=chunk)[151](index=151&type=chunk) - The company is actively pursuing awards under the IIJA's BEAD program, with NTIA allocating approximately **$25.5 billion** to states in Frontier's footprint[153](index=153&type=chunk)[298](index=298&type=chunk) - NTIA's BEAD Restructuring Policy Notice on June 6, 2025, modified program requirements, rescinding preliminary awards and prohibiting additional points for **100%** fiber projects, which could impact Frontier's participation[154](index=154&type=chunk)[299](index=299&type=chunk) - Frontier was awarded approximately **$371 million** over **ten years** under the RDOF Phase I program to build broadband to **127,000** locations, with buildout required by December 31, 2028[160](index=160&type=chunk)[297](index=297&type=chunk) [(18) Segment Information](index=34&type=section&id=(18)%20Segment%20Information) Frontier operates as a single operating segment, with its CEO assessing performance and allocating resources on a consolidated basis. Expenses are categorized into revenue generating, operating, support departments, depreciation and amortization, investment and other income (loss), interest expense, and income taxes for enhanced transparency - The company operates in a single operating segment, with the CEO as the chief operating decision maker[167](index=167&type=chunk) Consolidated Financial Results by Expense Category (Three Months Ended June 30) | ($ in millions) | 2025 | 2024 | | :-------------- | :---- | :---- | | Revenue | $1,539 | $1,480 | | Revenue generating departments | $289 | $267 | | Operating departments | $528 | $525 | | Support departments | $221 | $199 | | Depreciation and amortization | $457 | $398 | | Investment and other income (loss) | $14 | $(24) | | Interest expense | $(197) | $(199) | | Income tax benefit | $(16) | $(9) | | Net loss | $(123) | $(123) | [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=38&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) This section provides management's perspective on Frontier's financial performance, strategic priorities, and future outlook. It highlights the company's focus on fiber network expansion, customer growth, and operational efficiency, while also discussing the impact of the pending Verizon merger, financial results, liquidity, capital resources, and regulatory developments [Business Overview](index=38&type=section&id=Business%20Overview) - Frontier is a leading communications and technology provider, focused on expanding its fiber-optic network to meet increasing data demand, aiming to pass **10 million** total locations with fiber[181](index=181&type=chunk)[182](index=182&type=chunk)[183](index=183&type=chunk) - As of June 30, 2025, the company passed approximately **8.5 million** total locations with fiber and added **334,000** fiber passings in Q2 2025[183](index=183&type=chunk)[187](index=187&type=chunk) - Key objectives achieved in Q2 2025 include **126,000** fiber broadband customer net additions and over **$600 million** in cumulative run-rate cost savings from operational efficiency initiatives[187](index=187&type=chunk) - The pending merger with Verizon, announced September 4, 2024, for **$38.50** per share, is expected to close by Q1 2026[184](index=184&type=chunk) [Financial Overview – Operating Income](index=39&type=section&id=Financial%20Overview%20%E2%80%93%20Operating%20Income) | ($ in millions) | For the three months ended June 30, 2025 | For the three months ended June 30, 2024 | For the six months ended June 30, 2025 | For the six months ended June 30, 2024 | | :-------------- | :--------------------------------------- | :--------------------------------------- | :------------------------------------- | :------------------------------------- | | Operating income | $44 | $91 | $120 | $181 | - Operating income decreased by **$47 million** (three months) and **$61 million** (six months) primarily due to increased depreciation expense from fiber network investments[190](index=190&type=chunk)[191](index=191&type=chunk) - Overall revenue grew by **$59 million** (three months) and **$108 million** (six months), driven by fiber data and internet services, offsetting declines in voice and video[191](index=191&type=chunk) [(a) Results of Operations](index=39&type=section&id=(a)%20Results%20of%20Operations) [Customer Trends](index=40&type=section&id=Customer%20Trends) Broadband Customer Metrics (As of or for the three months ended June 30) | (Customer and Employee Metrics in thousands) | June 30, 2025 | June 30, 2024 | | :----------------------------------------- | :------------ | :------------ | | **Fiber Broadband** | | | | Consumer customers | 2,472 | 2,053 | | Business and wholesale customers | 153 | 134 | | Consumer net customer additions | 120 | 90 | | Consumer customer churn | 1.29% | 1.40% | | Consumer customer ARPU | $68.54 | $65.32 | | **Copper Broadband** | | | | Consumer customers | 526 | 721 | | Business and wholesale customers | 76 | 102 | | Consumer net customer losses | (45) | (50) | | Consumer customer churn | 2.26% | 2.02% | | Consumer customer ARPU | $65.11 | $58.26 | | **Consumer Customer Metrics** | | | | Customers | 3,283 | 3,154 | | Net customer additions | 51 | 14 | | ARPC | $84.43 | $83.57 | | Customer Churn | 1.61% | 1.65% | | **Other Metrics** | | | | Employees | 12,765 | 12,960 | - Consumer fiber broadband net customer additions increased to **120,000** (Q2 2025) from **90,000** (Q2 2024), with churn improving to **1.29%** from **1.40%**[201](index=201&type=chunk)[203](index=203&type=chunk) - Consumer copper broadband net customer losses decreased to **45,000** (Q2 2025) from **50,000** (Q2 2024), but churn increased to **2.26%** from **2.02%** due to inflationary price increases[204](index=204&type=chunk)[206](index=206&type=chunk) - Overall consumer customers increased by **4%** YoY, driven by fiber broadband growth, with average monthly revenue per customer (ARPC) increasing by **1%** to **$84.43**[207](index=207&type=chunk)[208](index=208&type=chunk)[211](index=211&type=chunk) [REVENUE](index=43&type=section&id=REVENUE) Revenue by Technology (Three Months Ended June 30) | ($ in millions) | 2025 | 2024 | $ Increase (Decrease) | % Increase (Decrease) | | :-------------- | :---- | :---- | :-------------------- | :-------------------- | | Fiber | $939 | $840 | $99 | 12 % | | Copper | $583 | $626 | $(43) | (7)% | | Revenue from contracts with customers | $1,522 | $1,466 | $56 | 4 % | | Subsidy revenue | $17 | $14 | $3 | 21 % | | Total revenue | $1,539 | $1,480 | $59 | 4 % | - Fiber revenue increased by **12%** (three months) and **13%** (six months) due to fiber network expansion and sales focus, while copper revenue declined by **7%** (three months) and **8%** (six months)[213](index=213&type=chunk)[214](index=214&type=chunk) Revenue by Customer Segment (Three Months Ended June 30) | ($ in millions) | 2025 | 2024 | $ Increase (Decrease) | % Increase (Decrease) | | :-------------- | :---- | :---- | :-------------------- | :-------------------- | | Consumer | $825 | $789 | $36 | 5 % | | Business and Wholesale | $697 | $677 | $20 | 3 % | | Revenue from contracts with customers | $1,522 | $1,466 | $56 | 4 % | | Subsidy and other revenue | $17 | $14 | $3 | 21 % | | Total revenue | $1,539 | $1,480 | $59 | 4 % | - Consumer revenues increased by **5%** (three months) and **4%** (six months), driven by fiber data growth and price increases, offsetting declines in voice, video, and copper broadband[219](index=219&type=chunk) - Business and wholesale revenues increased by **3%** for both periods, primarily from data and internet services, with a shift towards higher broadband speeds[221](index=221&type=chunk) Revenue by Product and Service Type (Three Months Ended June 30) | ($ in millions) | 2025 | 2024 | $ Increase (Decrease) | % Increase (Decrease) | | :-------------- | :---- | :---- | :-------------------- | :-------------------- | | Data and Internet services | $1,085 | $983 | $102 | 10% | | Voice services | $282 | $312 | $(30) | (10)% | | Video services | $68 | $88 | $(20) | (23)% | | Other | $87 | $83 | $4 | 5% | | Subsidy and other revenue | $17 | $14 | $3 | 21% | | Total revenue | $1,539 | $1,480 | $59 | 4% | - Data and Internet services revenue increased by **10%** (three months) and **11%** (six months), driven by fiber broadband and network access growth[226](index=226&type=chunk) - Voice services revenue declined by **10%** for both periods due to customer losses and fewer bundles, partially offset by higher ARPU[228](index=228&type=chunk) - Video services revenue declined by **23%** (three months) and **22%** (six months) due to traditional video customer losses, despite price increases[229](index=229&type=chunk) [OPERATING EXPENSES](index=47&type=section&id=OPERATING%20EXPENSES) Operating Expenses (Three Months Ended June 30) | ($ in millions) | 2025 | 2024 | $ Increase (Decrease) | % Increase (Decrease) | | :-------------- | :---- | :---- | :-------------------- | :-------------------- | | Cost of Service | $532 | $516 | $16 | 3 % | | Selling, general, and administrative expenses | $490 | $449 | $41 | 9 % | | Depreciation and amortization | $457 | $398 | $59 | 15 % | | Restructuring costs and other charges | $16 | $26 | $(10) | (38)% | | Total operating expenses | $1,495 | $1,389 | $106 | 8 % | - Cost of service increased by **$16 million** (three months) and **$15 million** (six months) due to outside service rate increases and storm-related costs, partially offset by lower video content costs[238](index=238&type=chunk) - Selling, general, and administrative (SG&A) expenses increased by **$41 million** (three months) and **$46 million** (six months), primarily due to higher third-party commissions and legal dispute settlements[241](index=241&type=chunk) - Depreciation and amortization expenses increased by **$59 million** (three months) and **$116 million** (six months) due to higher property, plant and equipment in service[242](index=242&type=chunk) - Restructuring costs and other charges decreased by **$10 million** (three months) and **$8 million** (six months) due to lower severance, employee costs, and consulting/legal fees[244](index=244&type=chunk) [OTHER NON-OPERATING INCOME AND EXPENSE](index=49&type=section&id=OTHER%20NON-OPERATING%20INCOME%20AND%20EXPENSE) Other Non-Operating Income and Expense (Three Months Ended June 30) | ($ in millions) | 2025 | 2024 | $ Increase (Decrease) | % Increase (Decrease) | | :-------------- | :---- | :---- | :-------------------- | :-------------------- | | Investment and other income, net | $14 | $(24) | $38 | (158)% | | Interest expense | $(197) | $(199) | $2 | (1)% | | Income tax benefit | $(16) | $(9) | $(7) | 78% | - Investment and other income, net, increased by **$38 million** for the three months ended June 30, 2025, primarily due to a **$72 million** pension remeasurement loss in the prior year, partially offset by reduced interest and dividend income[248](index=248&type=chunk) - Interest expense increased slightly by **$2 million** (three months) and **$1 million** (six months) due to a higher debt balance[250](index=250&type=chunk) - Income tax benefit increased to **$16 million** (three months) and **$27 million** (six months) in 2025, compared to **$9 million** and **$7 million** in 2024, respectively[251](index=251&type=chunk) [(b) Liquidity and Capital Resources](index=50&type=section&id=(b)%20Liquidity%20and%20Capital%20Resources) - As of June 30, 2025, Frontier had approximately **$2,340 million** in liquidity, comprising **$412 million** cash, **$1,170 million** available DDTL facility, and **$758 million** available revolving credit facility[254](index=254&type=chunk) - Working capital deficit increased to **$1,845 million** at June 30, 2025, from **$1,029 million** at December 31, 2024, mainly due to decreased cash and increased current liabilities[258](index=258&type=chunk) - Net cash provided from operating activities increased by **$287 million** to **$996 million** for the six months ended June 30, 2025[260](index=260&type=chunk) - Net cash used by investing activities increased significantly to **$1,597 million** for the six months ended June 30, 2025, primarily due to higher capital expenditures and the non-recurrence of short-term investment sales[263](index=263&type=chunk) - Net cash provided from financing activities increased by **$749 million** to **$254 million** for the six months ended June 30, 2025, driven by net proceeds from long-term debt borrowings and decreased vendor financing payments[267](index=267&type=chunk) - The company was in compliance with all debt covenants as of June 30, 2025[290](index=290&type=chunk) - Frontier does not maintain any material off-balance sheet arrangements[292](index=292&type=chunk) [Item 3. Quantitative and Qualitative Disclosures about Market Risk](index=56&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20about%20Market%20Risk) Frontier's primary market risks are interest rate and equity price exposures, mainly related to its pension plan assets and floating rate debt. The company has minimal exposure to interest rate changes, with 89% of total debt at fixed rates. A 100 basis point increase in SOFR would result in approximately $13 million of additional annual interest expense - As of June 30, 2025, **89%** of Frontier's total debt had fixed interest rates, limiting exposure to interest rate changes[313](index=313&type=chunk) - A **100 basis point** increase in SOFR would result in approximately **$13 million** of additional annual interest expense[314](index=314&type=chunk) - The fair value of debt was approximately **$12.1 billion** at June 30, 2025, with a weighted average borrowing rate of **6.801%** and an average maturity of approximately **4 years**[315](index=315&type=chunk) - The pension plan assets increased by **$99 million** to **$2,427 million** at June 30, 2025, primarily due to market value changes[319](index=319&type=chunk) [Item 4. Controls and Procedures](index=58&type=section&id=Item%204.%20Controls%20and%20Procedures) Frontier's management, including the CEO and CFO, concluded that the company's disclosure controls and procedures were effective as of June 30, 2025. There have been no material changes to internal control over financial reporting during the first six months of 2025 - Disclosure controls and procedures were effective as of June 30, 2025[321](index=321&type=chunk) - No material changes to internal control over financial reporting occurred during the first six months of 2025[322](index=322&type=chunk) PART II. OTHER INFORMATION [Item 1. Legal Proceedings](index=59&type=section&id=Item%201.%20Legal%20Proceedings) Frontier is involved in various legal proceedings in the normal course of business, including class actions and governmental investigations. The company believes the ultimate resolution of these matters will not have a material adverse effect on its financial position, results of operations, or cash flows, after considering insurance and indemnities - Frontier is party to various legal proceedings, including individual actions, class actions, and governmental investigations[324](index=324&type=chunk) - Management believes the ultimate resolution of these matters will not have a material adverse effect on the company's financial position, results of operations, or cash flows[324](index=324&type=chunk) [Item 1A. Risk Factors](index=59&type=section&id=Item%201A.%20Risk%20Factors) There have been no material changes to the Risk Factors previously disclosed in the Annual Report on Form 10-K for the year ended December 31, 2024 - No material changes to the Risk Factors described in the Annual Report on Form 10-K for the year ended December 31, 2024[325](index=325&type=chunk) [Item 5. Other Information](index=59&type=section&id=Item%205.%20Other%20Information) During the three months ended June 30, 2025, no director or officer of the Company adopted or terminated a Rule 10b5-1 trading arrangement or non-Rule 10b5-1 trading arrangement - No director or officer adopted or terminated a Rule 10b5-1 or non-Rule 10b5-1 trading arrangement during the three months ended June 30, 2025[326](index=326&type=chunk) [Item 6. Exhibits](index=60&type=section&id=Item%206.%20Exhibits) This section lists the exhibits filed with the Quarterly Report on Form 10-Q, including certifications from the Principal Executive Officer and Principal Financial Officer, as well as the iXBRL formatted financial statements and cover page - Exhibits include certifications of the Principal Executive Officer and Principal Financial Officer (31.1, 31.2, 32), and iXBRL formatted financial statements (101) and cover page (104)[327](index=327&type=chunk) SIGNATURE

[Executive Summary & Highlights](index=1&type=section&id=Executive%20Summary%20%26%20Highlights) Frontier achieved record fiber sales and ARPU growth in Q2 2025, marking its highest quarterly revenue and Adjusted EBITDA since emerging from bankruptcy [Q2 2025 Performance Overview](index=1&type=section&id=Q2%202025%20Performance%20Overview) Frontier achieved a "breakthrough quarter" in Q2 2025 with record fiber sales, ARPU growth, and its highest quarterly revenue and Adjusted EBITDA since emerging from bankruptcy, driven by strong fiber customer growth - Q2 was a breakthrough quarter for Gigabyte America builders, achieving **record fiber sales**, ARPU growth, and the highest quarterly revenue and EBITDA since emerging from bankruptcy four years ago[2](index=2&type=chunk) - The strategy is based on the belief that the business strengthens with each new fiber customer, achieving **outperforming market share** relative to coverage this quarter, simply put, fiber won[3](index=3&type=chunk) [Key Financial & Operational Highlights](index=1&type=section&id=Key%20Financial%20%26%20Operational%20Highlights) In Q2 2025, Frontier added 126,000 fiber broadband customers, saw ARPU grow by 5%, and Adjusted EBITDA increase by 8%, with total revenue reaching $1.54 billion, up 4.0% year-over-year, despite a net loss of $123 million Q2 2025 Key Financial and Operational Highlights | Metric | Q2 2025 Value | YoY Change | | :-------------------------------- | :------------ | :--------- | | Fiber Broadband Customers Added (thousands) | 126 | +20.0% | | Consumer Fiber Broadband ARPU ($) | 68.54 | +4.9% | | Total Fiber Passings (millions) | 8.5 | N/A | | Revenue ($ billion) | 1.54 | +4.0% | | Operating Income ($ million) | 44 | N/A | | Net Loss ($ million) | 123 | N/A | | Adjusted EBITDA ($ million) | 607 | +8.4% | | Cash Capital Expenditures ($ million) | 845 | N/A | | Net Cash from Operations ($ million) | 477 | N/A | [Segment Performance](index=2&type=section&id=Segment%20Performance) Frontier's Q2 2025 performance saw consumer revenue grow by 4.6% driven by fiber broadband, while business and wholesale revenue increased by 3.0% with fiber growth [Consumer Segment Results](index=2&type=section&id=Consumer%20Segment%20Results) Consumer segment revenue grew 4.6% year-over-year to $825 million, with fiber broadband revenue up 26.2% to $496 million, adding 120,000 new fiber broadband customers, and improving churn to 1.29% Q2 2025 Consumer Segment Key Metrics | Metric | Q2 2025 Value | YoY Change | | :-------------------------------- | :------------ | :--------- | | Consumer Revenue ($ million) | 825 | +4.6% | | Consumer Fiber Revenue ($ million) | 609 | +16.4% | | Consumer Fiber Broadband Revenue ($ million) | 496 | +26.2% | | Consumer Fiber Broadband Net Adds (thousands) | 120 | N/A | | Consumer Fiber Broadband Customer Growth | N/A | +20.4% | | Consumer Fiber Broadband Churn | 1.29% | -0.11 pp | [Business and Wholesale Segment Results](index=2&type=section&id=Business%20and%20Wholesale%20Segment%20Results) Business and wholesale revenue increased 3.0% year-over-year to $697 million, with fiber revenue growing 4.1% to $330 million, adding 6,000 fiber broadband customers, and ARPU rising 0.9% to $98.72 Q2 2025 Business and Wholesale Segment Key Metrics | Metric | Q2 2025 Value | YoY Change | | :-------------------------------- | :------------ | :--------- | | Business and Wholesale Revenue ($ million) | 697 | +3.0% | | Business and Wholesale Fiber Revenue ($ million) | 330 | +4.1% | | Business and Wholesale Fiber Broadband Net Adds (thousands) | 6 | N/A | | Business and Wholesale Fiber Broadband Customer Growth | N/A | +14.2% | | Business and Wholesale Fiber Broadband ARPU ($) | 98.72 | +0.9% | | Business and Wholesale Fiber Broadband Churn | 1.37% | +0.06 pp | [Corporate Information](index=2&type=section&id=Corporate%20Information) Frontier's corporate information covers its capital structure, pending acquisition by Verizon, company overview, non-GAAP financial measures, and forward-looking statements [Capital Structure & Liquidity](index=2&type=section&id=Capital%20Structure%20%26%20Liquidity) As of June 30, 2025, Frontier's total liquidity was approximately $2.3 billion, comprising $400 million in cash, $1.2 billion in delayed draw term loan capacity, and $700 million in revolving credit facility capacity, with a net leverage ratio of 4.9x and no long-term debt maturing before 2027 Capital Structure and Liquidity as of June 30, 2025 | Metric | Value (as of June 30, 2025) | | :-------------------------------- | :-------------------------- | | Total Liquidity ($ billion) | ~2.3 | | Cash Balance ($ billion) | 0.4 | | Delayed Draw Term Loan Capacity ($ billion) | 1.2 | | Revolving Credit Facility Capacity ($ billion) | 0.7 | | Net Leverage Ratio | 4.9x | - Frontier has **no long-term debt maturities before 2027**[8](index=8&type=chunk) [Pending Acquisition by Verizon](index=2&type=section&id=Pending%20Acquisition%20by%20Verizon) Frontier and Verizon signed a definitive agreement on September 4, 2024, for Verizon to acquire Frontier, with the transaction expected to close in Q1 2026, pending regulatory approvals, and consequently, Frontier will not host a conference call or provide financial outlook - On September 4, 2024, Verizon Communications Inc. ("Verizon") entered into a definitive agreement to **acquire Frontier**[9](index=9&type=chunk) - The transaction is expected to close in **Q1 2026**, subject to necessary regulatory approvals[10](index=10&type=chunk) - Due to the pending transaction, Frontier will **not host a conference call or provide a financial outlook**[9](index=9&type=chunk) [About Frontier](index=3&type=section&id=About%20Frontier) Frontier Communications Parent, Inc. (NASDAQ: FYBR) is the largest pure-play fiber provider in the U.S., dedicated to delivering ultra-fast broadband connectivity to millions of consumers and businesses through its "Building Gigabit America®" mission - Frontier (NASDAQ: FYBR) is the **largest pure-play fiber provider in the U.S.**[13](index=13&type=chunk) - The company's mission is "Building Gigabit America®," providing **ultra-fast broadband connectivity** to unlock the potential of millions of consumers and businesses[13](index=13&type=chunk) [Non-GAAP Financial Measures](index=3&type=section&id=Non-GAAP%20Financial%20Measures) Frontier utilizes non-GAAP financial measures such as EBITDA, Adjusted EBITDA, operating free cash flow, adjusted operating expenses, and net leverage ratio to assess performance, analyze decisions, determine compensation, and evaluate cash flow generation, aiming to provide investors a more comprehensive view of core operations and financial condition when used with GAAP metrics - Frontier uses non-GAAP financial measures including **EBITDA, EBITDA margin, Adjusted EBITDA, Adjusted EBITDA margin, operating free cash flow, adjusted operating expenses, and net leverage ratio** to evaluate performance[14](index=14&type=chunk) - Management internally uses these non-GAAP financial measures to **analyze company performance, evaluate strategic and operational decisions, determine compensation, and understand cash flow generation**[14](index=14&type=chunk) - These non-GAAP financial measures are **not GAAP measures of financial performance or liquidity**, are not substitutes for GAAP metrics, and may not be comparable to similarly titled measures used by other companies[15](index=15&type=chunk) [Forward-Looking Statements](index=5&type=section&id=Forward-Looking%20Statements) This report contains forward-looking statements regarding future events, including the proposed merger with Verizon, future operational and financial performance, and capital expenditures, which are subject to uncertainties and risks such as merger completion, significant debt, economic fluctuations, market competition, and regulatory changes that could materially impact future developments - This press release contains "forward-looking statements" related to future events, including the 2025 outlook, expectations or beliefs about future events such as the **proposed merger with Verizon, future operational and financial performance, growth strategy implementation, and capital expenditures**[24](index=24&type=chunk) - A wide range of factors could materially impact future developments and performance, including risks that the **merger may not be completed timely or at all**, or that conditions for completion may not be satisfied or waived, including failure to obtain necessary regulatory approvals[24](index=24&type=chunk) - Other factors include **significant debt, economic uncertainty, financial market volatility, ability to implement strategic initiatives, and competition** from various providers including cable, wireless, satellite, and fiber overbuilders[24](index=24&type=chunk) [Unaudited Financial Data](index=6&type=section&id=Unaudited%20Financial%20Data) This section presents Frontier's unaudited financial data, including statements of operations, selected revenue data, operating data, balance sheet data, cash flow data, and non-GAAP reconciliations [Statements of Operations](index=6&type=section&id=Statements%20of%20Operations) This section provides Frontier's unaudited quarterly and six-month statements of operations, detailing revenue, expenses, operating income, and net loss [Quarterly Statements of Operations](index=6&type=section&id=Quarterly%20Statements%20of%20Operations) In Q2 2025, Frontier reported total revenue of $1.539 billion, operating income of $44 million, a net loss of $123 million, and basic net loss per common share of $0.49, showing revenue growth from Q2 2024 but a deterioration in operating income and net loss compared to Q1 2025 Quarterly Statements of Operations (in millions, except per share amounts) | Metric | Q2 2025 ($M) | Q1 2025 ($M) | Q2 2024 ($M) | | :-------------------------------- | :----------- | :----------- | :----------- | | Revenue | 1,539 | 1,511 | 1,480 | | Cost of service | 532 | 521 | 516 | | Selling, general, and administrative expenses | 490 | 433 | 449 | | Depreciation and amortization | 457 | 445 | 398 | | Restructuring costs and other charges | 16 | 36 | 26 | | Total operating expenses | 1,495 | 1,435 | 1,389 | | Operating income | 44 | 76 | 91 | | Net loss | (123) | (64) | (123) | | Basic net loss per common share | (0.49) | (0.26) | (0.49) | | Capital expenditures | 845 | 757 | 626 | [Six Months Statements of Operations](index=7&type=section&id=Six%20Months%20Statements%20of%20Operations) For the six months ended June 30, 2025, total revenue was $3.050 billion, an increase from $2.942 billion in the prior year period, but operating income decreased from $181 million to $120 million, and net loss expanded from $122 million to $187 million, resulting in a basic net loss per common share of $0.75 Six Months Statements of Operations (in millions, except per share amounts) | Metric | H1 2025 ($M) | H1 2024 ($M) | | :-------------------------------- | :----------- | :----------- | | Revenue | 3,050 | 2,942 | | Cost of service | 1,053 | 1,038 | | Selling, general, and administrative expenses | 923 | 877 | | Depreciation and amortization | 902 | 786 | | Restructuring costs and other charges | 52 | 60 | | Total operating expenses | 2,930 | 2,761 | | Operating income | 120 | 181 | | Net loss | (187) | (122) | | Basic net loss per common share | (0.75) | (0.49) | | Capital expenditures | 1,602 | 1,292 | [Selected Revenue Data](index=8&type=section&id=Selected%20Revenue%20Data) This section provides Frontier's selected revenue data, categorized by service, segment, and technology for both quarterly and six-month periods [Quarterly Revenue by Service, Segment, and Technology](index=8&type=section&id=Quarterly%20Revenue%20by%20Service,%20Segment,%20and%20Technology) Total revenue for Q2 2025 was $1.539 billion, with data and internet services revenue increasing to $1.085 billion (from $983 million in Q2 2024) while voice and video services continued to decline; consumer revenue was $825 million and business and wholesale revenue was $697 million, with fiber revenue significantly growing to $939 million (from $840 million in Q2 2024), offsetting copper revenue decline Quarterly Revenue by Service, Segment, and Technology (in millions) | Revenue Category | Q2 2025 ($M) | Q1 2025 ($M) | Q2 2024 ($M) | | :-------------------------------- | :----------- | :----------- | :----------- | | **By Service:** | | | | | Data and Internet services | 1,085 | 1,049 | 983 | | Voice services | 282 | 290 | 312 | | Video services | 68 | 74 | 88 | | Other | 87 | 82 | 83 | | **By Segment:** | | | | | Consumer | 825 | 813 | 789 | | Business and wholesale | 697 | 682 | 677 | | **By Technology:** | | | | | Fiber | 939 | 913 | 840 | | Copper | 583 | 582 | 626 | | Total Revenue | 1,539 | 1,511 | 1,480 | [Six Months Revenue by Service, Segment, and Technology](index=8&type=section&id=Six%20Months%20Revenue%20by%20Service,%20Segment,%20and%20Technology) Total revenue for H1 2025 was $3.050 billion, with data and internet services revenue increasing to $2.134 billion (from $1.930 billion in H1 2024) while voice and video services revenue declined; consumer revenue was $1.638 billion and business and wholesale revenue was $1.379 billion, with fiber revenue growing to $1.852 billion (from $1.645 billion in H1 2024), partially offsetting copper revenue decline Six Months Revenue by Service, Segment, and Technology (in millions) | Revenue Category | H1 2025 ($M) | H1 2024 ($M) | | :-------------------------------- | :----------- | :----------- | | **By Service:** | | | | Data and Internet services | 2,134 | 1,930 | | Voice services | 572 | 633 | | Video services | 142 | 182 | | Other | 169 | 167 | | **By Segment:** | | | | Consumer | 1,638 | 1,576 | | Business and wholesale | 1,379 | 1,336 | | **By Technology:** | | | | Fiber | 1,852 | 1,645 | | Copper | 1,165 | 1,267 | | Total Revenue | 3,050 | 2,942 | [Unaudited Operating Data](index=9&type=section&id=Unaudited%20Operating%20Data) As of June 30, 2025, total broadband customers reached 3.227 million, with 74,000 net customer additions in Q2 2025; consumer customers totaled 3.283 million, with average monthly revenue per customer of $84.43 and a churn rate of 1.61%, and total employees were 12,765 Unaudited Operating Data | Metric | As of June 30, 2025 | Q2 2025 | Q1 2025 | Q2 2024 | | :-------------------------------- | :------------------ | :------ | :------ | :------ | | Broadband customers (thousands) | 3,227 | N/A | N/A | 3,010 | | Net customer additions (thousands) | N/A | 74 | 59 | 36 | | Consumer customers (thousands) | 3,283 | N/A | N/A | 3,154 | | Average monthly consumer revenue per customer ($) | 84.43 | N/A | 84.40 | 83.57 | | Customer monthly churn | 1.61% | N/A | 1.51% | 1.65% | | Employees | 12,765 | N/A | 12,738 | 12,960 | [Condensed Consolidated Balance Sheet Data](index=10&type=section&id=Condensed%20Consolidated%20Balance%20Sheet%20Data) As of June 30, 2025, total assets were $21.265 billion, up from $20.614 billion at year-end 2024; cash and cash equivalents decreased from $750 million to $412 million; total liabilities increased to $16.514 billion, including $11.860 billion in long-term debt; equity was $4.761 billion, and the net leverage ratio was 4.9x Condensed Consolidated Balance Sheet Data (in millions) | Metric | June 30, 2025 ($M) | December 31, 2024 ($M) | | :-------------------------------- | :------------------- | :--------------------- | | Cash and cash equivalents | 412 | 750 | | Total current assets | 1,025 | 1,260 | | Property, plant and equipment, net | 16,785 | 15,678 | | Total assets | 21,265 | 20,614 | | Total current liabilities | 2,870 | 2,289 | | Long-term debt | 11,860 | 11,551 | | Equity | 4,761 | 4,941 | | Total liabilities and equity | 21,265 | 20,614 | | Net debt | 11,458 | N/A | | Adjusted EBITDA - last 4 quarters | 2,334 | N/A | | Net Leverage Ratio | 4.9x | N/A | [Unaudited Consolidated Cash Flow Data](index=11&type=section&id=Unaudited%20Consolidated%20Cash%20Flow%20Data) This section presents Frontier's unaudited consolidated cash flow data for both quarterly and six-month periods, detailing operating, investing, and financing activities [Quarterly Cash Flow Data](index=11&type=section&id=Quarterly%20Cash%20Flow%20Data) In Q2 2025, net cash provided from operating activities was $477 million, up from $374 million in Q2 2024; net cash used by investing activities significantly increased to $841 million (from $393 million in Q2 2024), primarily due to capital expenditures rising to $845 million; net cash provided from financing activities was $209 million, reversing a net use of $72 million in Q2 2024, mainly due to long-term debt borrowings Quarterly Cash Flow Data (in millions) | Metric | Q2 2025 ($M) | Q2 2024 ($M) | | :-------------------------------- | :----------- | :----------- | | Net cash provided from operating activities | 477 | 374 | | Capital expenditures | (845) | (626) | | Net cash used by investing activities | (841) | (393) | | Net cash provided from (used by) financing activities | 209 | (72) | | Decrease in cash, cash equivalents, and restricted cash | (155) | (91) | | Cash, cash equivalents, and restricted cash at end of period | 564 | 1,246 | [Six Months Cash Flow Data](index=12&type=section&id=Six%20Months%20Cash%20Flow%20Data) In H1 2025, net cash provided from operating activities was $996 million, up from $709 million in H1 2024; net cash used by investing activities significantly increased to $1.597 billion (from $207 million in H1 2024), primarily due to capital expenditures rising to $1.602 billion; net cash provided from financing activities was $254 million, a significant improvement from a net use of $495 million in H1 2024, mainly due to debt borrowings Six Months Cash Flow Data (in millions) | Metric | H1 2025 ($M) | H1 2024 ($M) | | :-------------------------------- | :----------- | :----------- | | Net cash provided from operating activities | 996 | 709 | | Capital expenditures | (1,602) | (1,292) | | Net cash used by investing activities | (1,597) | (207) | | Net cash provided from (used by) financing activities | 254 | (495) | | Decrease in cash, cash equivalents, and restricted cash | (347) | 7 | | Cash, cash equivalents, and restricted cash at end of period | 564 | 1,246 | [Reconciliation of Non-GAAP Financial Measures](index=13&type=section&id=Reconciliation%20of%20Non-GAAP%20Financial%20Measures) This section provides reconciliations for Frontier's non-GAAP financial measures, including EBITDA, Adjusted EBITDA, operating free cash flow, and adjusted operating expenses [EBITDA, Adjusted EBITDA, and Operating Free Cash Flow Reconciliation](index=13&type=section&id=EBITDA,%20Adjusted%20EBITDA,%20and%20Operating%20Free%20Cash%20Flow%20Reconciliation) In Q2 2025, EBITDA was $501 million and Adjusted EBITDA was $607 million, showing growth from Q2 2024, while operating free cash flow was negative $368 million, reflecting significant capital expenditures; for H1 2025, Adjusted EBITDA was $1.190 billion and operating free cash flow was negative $622 million EBITDA, Adjusted EBITDA, and Operating Free Cash Flow Reconciliation (in millions) | Metric | Q2 2025 ($M) | Q1 2025 ($M) | Q2 2024 ($M) | H1 2025 ($M) | H1 2024 ($M) | | :-------------------------------- | :----------- | :----------- | :----------- | :----------- | :----------- | | Net loss | (123) | (64) | (123) | (187) | (122) | | EBITDA | 501 | 521 | 489 | 1,022 | 967 | | Adjusted EBITDA | 607 | 583 | 560 | 1,190 | 1,107 | | EBITDA margin | 32.6% | 34.5% | 33.0% | 33.5% | 32.9% | | Adjusted EBITDA margin | 39.4% | 38.6% | 37.8% | 39.0% | 37.6% | | Net cash provided from operating activities | 477 | 519 | 374 | 996 | 709 | | Capital expenditures | (845) | (757) | (626) | (1,602) | (1,292) | | Operating free cash flow | (368) | (254) | (304) | (622) | (998) | [Adjusted Operating Expenses Reconciliation](index=14&type=section&id=Adjusted%20Operating%20Expenses%20Reconciliation) Total operating expenses for Q2 2025 were $1.495 billion, and after adjustments for depreciation and amortization, pension/OPEB expense, restructuring and other charges, stock-based compensation, storm-related costs, and legal settlements, adjusted operating expenses were $932 million; for H1 2025, adjusted operating expenses were $1.860 billion Adjusted Operating Expenses Reconciliation (in millions) | Metric | Q2 2025 ($M) | Q1 2025 ($M) | Q2 2024 ($M) | H1 2025 ($M) | H1 2024 ($M) | | :-------------------------------- | :----------- | :----------- | :----------- | :----------- | :----------- | | Total operating expenses | 1,495 | 1,435 | 1,389 | 2,930 | 2,761 | | Depreciation and amortization | (457) | (445) | (398) | (902) | (786) | | Pension/OPEB expense | (8) | (8) | (9) | (16) | (18) | | Restructuring costs and other charges | (16) | (36) | (26) | (52) | (60) | | Stock-based compensation | (13) | (15) | (11) | (28) | (37) | | Storm-related costs | (3) | (3) | - | (6) | - | | Legal settlements | (66) | - | (25) | (66) | (25) | | Adjusted operating expenses | 932 | 928 | 920 | 1,860 | 1,835 | [Selected Financial and Operating Data](index=15&type=section&id=Selected%20Financial%20and%20Operating%20Data) In Q2 2025, total company fiber broadband revenue reached $541 million, a significant increase from $432 million in Q2 2024; total fiber passings grew to 8.5 million, with total fiber penetration at 30.9%; consumer fiber customers increased to 2.472 million, with 120,000 net adds in Q2 2025 and consumer fiber ARPU at $68.54; business + wholesale fiber customers were 153,000, with 6,000 net adds and ARPU at $98.72 Selected Financial and Operating Data | Metric | Q2 2025 | Q1 2025 | Q2 2024 | H1 2025 | H1 2024 | | :-------------------------------- | :------ | :------ | :------ | :------ | :------ | | **Broadband Revenue ($M):** | | | | | | | Total Company Fiber | 541 | 514 | 432 | 1,055 | 846 | | Total Company Copper | 125 | 129 | 151 | 254 | 306 | | **Estimated Fiber Passings (millions):** | | | | | | | Total Fiber Passings | 8.5 | 8.1 | 7.2 | N/A | N/A | | **Estimated Broadband Fiber % Penetration:** | | | | | | | Total Fiber Penetration | 30.9% | 30.7% | 30.4% | N/A | N/A | | **Broadband Customers, end of period (thousands):** | | | | | | | Consumer Fiber | 2,472 | 2,352 | 2,053 | N/A | N/A | | Business + Wholesale Fiber | 153 | 147 | 134 | N/A | N/A | | **Broadband Net Adds (thousands):** | | | | | | | Consumer Fiber | 120 | 103 | 90 | N/A | N/A | | Business + Wholesale Fiber | 6 | 4 | 2 | N/A | N/A | | **Broadband Churn:** | | | | | | | Consumer Fiber | 1.29% | 1.20% | 1.40% | 1.25% | 1.32% | | Business + Wholesale Fiber | 1.37% | 1.53% | 1.31% | 1.45% | 1.32% | | **Broadband ARPU ($):** | | | | | | | Consumer Fiber | 68.54 | 68.21 | 65.32 | 68.40 | 65.39 | | Business + Wholesale Fiber | 98.72 | 99.98 | 97.83 | 99.43 | 98.09 |

FRONTIER Second QUARTER 2025 RESULTS © Frontier Communications. July 29, 2025 Safe Harbor Statement or any other performance measures derived in accordance with U.S. GAAP as measures of operating performance or cash flows as measures of liquidity. Non-GAAP financial measures have important limitations as analytical tools, and you should not consider them in isolation or as substitutes for results as reported under U.S. GAAP. This presentation includes a reconciliation of certain non-GAAP financial measures ...

Financial Performance - Frontier's fiber revenue reached $913 million, showing a year-over-year increase of 13.4%[13] - Total revenue increased by 3.4% year-over-year, reaching $1.51 billion[13] - Adjusted EBITDA increased by 6.6% year-over-year, reaching $583 million[13] - The Adjusted EBITDA margin was 38.6%[30] Fiber Expansion and Customer Growth - Frontier reached 8.1 million total fiber passings after passing 321,000 fiber locations in Q1 2025[13] - Frontier added 107,000 fiber broadband customers, resulting in a 19.3% year-over-year growth in fiber broadband customers[13] - Consumer fiber broadband ARPU grew by 4.7% year-over-year[12] Strategy and Outlook - Frontier's fiber-first strategy continues to deliver accelerating financial growth[9, 24] - The company is on track to achieve its goal of 10 million fiber passings[16] - Consumer fiber broadband revenue growth accelerated to 25.6% year-over-year[12]

Core Viewpoint - Verizon Communications is terminating its diversity, equity, and inclusion (DEI) programs amid scrutiny from the Trump administration as it seeks federal approval for its $20 billion acquisition of Frontier Communications [1][6]. Group 1: Changes to DEI Programs - Verizon is removing its "Diversity and Inclusion" website and eliminating references to DEI in employee training programs [3]. - The company plans to end workforce diversity goals and will drop a management compensation component aimed at increasing the representation of women and minorities in its U.S. workforce [4]. - Verizon's Chief Legal Officer stated that some DEI policies could be linked to discrimination, and the changes will take effect immediately [6]. Group 2: Acquisition Details - Verizon's acquisition of Frontier Communications is valued at $20 billion, including debt, and aims to increase its scale by adding 2.2 million fiber subscribers, expanding its reach to 25 million premises across 31 states and Washington, D.C. [7]. - The acquisition is described as a "strategic fit" that will enhance Verizon's competitiveness in the U.S. market [7]. - Frontier's CEO noted that the deal provides a substantial cash premium to its shareholders and creates new opportunities for employees while expanding access to reliable connectivity for more Americans [9].

Core Insights - Frontier Communications reported revenue of $1.51 billion for the quarter ended March 2025, reflecting a year-over-year increase of 3.4% and matching the Zacks Consensus Estimate, with an EPS of -$0.26 compared to $0.00 in the previous year [1] - The company achieved an EPS surprise of +21.21%, exceeding the consensus estimate of -$0.33 [1] Financial Performance - Revenue from contracts with customers was $1.50 billion, surpassing the average estimate of $1.49 billion, marking a 3.4% increase year-over-year [4] - Revenue from Fiber-Consumer services reached $589 million, exceeding the estimate of $581.81 million, with a year-over-year growth of 16.6% [4] - Revenue from Fiber-Business and Wholesale was $324 million, above the estimate of $321.75 million, representing an 8% increase year-over-year [4] Customer Metrics - Broadband customers totaled 3.15 million, slightly above the estimated 3.14 million [4] - Total Fiber Penetration stood at 30.7%, marginally higher than the estimated 30.6% [4] - Fiber-Consumer broadband customers numbered 2.35 million, exceeding the estimate of 2.34 million [4] Stock Performance - Shares of Frontier Communications have returned +1.1% over the past month, contrasting with the Zacks S&P 500 composite's -0.8% change [3] - The stock currently holds a Zacks Rank 4 (Sell), indicating potential underperformance relative to the broader market in the near term [3]

Financial Performance - Frontier Communications reported a quarterly loss of $0.26 per share, better than the Zacks Consensus Estimate of a loss of $0.33, compared to break-even earnings per share a year ago, representing an earnings surprise of 21.21% [1] - The company posted revenues of $1.51 billion for the quarter ended March 2025, surpassing the Zacks Consensus Estimate by 0.34%, and showing an increase from $1.46 billion year-over-year [2] Stock Performance - Frontier Communications shares have increased approximately 4.5% since the beginning of the year, contrasting with the S&P 500's decline of 6% [3] Earnings Outlook - The current consensus EPS estimate for the upcoming quarter is -$0.34 on revenues of $1.52 billion, and for the current fiscal year, it is -$1.34 on revenues of $6.06 billion [7] - The estimate revisions trend for Frontier Communications is currently unfavorable, resulting in a Zacks Rank 4 (Sell) for the stock, indicating expected underperformance in the near future [6] Industry Context - The Communication - Network Software industry, to which Frontier Communications belongs, is currently ranked in the bottom 13% of over 250 Zacks industries, suggesting potential challenges ahead [8]