- Completed acquisition of California,
Texas and Florida markets on April 1st
- Maintained an attractive, sustainable
dividend payout ratio, as adjusted, of 56%
- 2016 full year guidance for adjusted
free cash flow, capital expenditures and cash taxes
Frontier Communications Corporation (NASDAQ:FTR) today reported
that it achieved solid first quarter results while preparing for
the industry’s largest and most complex flashcut conversion in its
new California, Texas and Florida markets. The flashcut conversion
was executed on April 1, and the Company will begin to realize
financial results from its newly combined business in the coming
quarters.
“We see enormous opportunity in these new markets with millions
of new customers,” said Dan McCarthy, Frontier President and Chief
Executive Officer. “In addition to increased scale, these areas are
each very attractive with significant growth potential. After a
month of operating these properties, we are very pleased with the
progress we have made and we want to thank customers for their
patience during the transition period. The entire Frontier team
remains focused on cultivating growth by retaining and attracting
new customers. We will continue to drive Frontier’s performance to
maintain free cash flow that provides an attractive and sustainable
dividend payout ratio.”
Frontier reported first quarter 2016 revenue of $1,355 million,
operating income of $58 million and net loss of $186 million, or
$0.16 per share. Excluding acquisition related interest expense of
$188 million and acquisition and integration costs of $138 million
(combined after-tax impact of $200 million, or $0.17 per share),
non-GAAP adjusted net income was $14 million, or $0.01 per share,
for the first quarter of 2016 (See attached Schedule B).
Total revenue for the first quarter of 2016 was $1,355
million. This represents a sequential decline of $58 million, or
4%, from the $1,413 million reported in the fourth quarter of 2015,
primarily resulting from a one-time sequential decline of $40
million in the recognition of regulatory revenue that was in line
with previously disclosed expectations and a decline in voice
services revenue. Frontier recognized Connect America Fund Phase II
(CAF II) revenue for the first time in the second half of 2015,
resulting in the majority of the full year CAF II revenue being
recognized in the third and fourth quarters of 2015.
Customer revenue for the first quarter of 2016 of $1,189
million decreased by $18 million, or 1%, from $1,207 million in the
fourth quarter of 2015, primarily due to a decline in voice
services revenue. Total residential revenue was $583 million
for the first quarter of 2016, compared to $594 million in the
fourth quarter of 2015. Total business revenue was $606
million for the first quarter of 2016, compared to $613 million in
the fourth quarter of 2015.
At March 31, 2016, Frontier had 3,088,300 residential
customers. The first quarter of 2016 resulted in a net
reduction of 1.1% of our residential customers, compared to a net
reduction of 0.7% in the fourth quarter of 2015. The average
monthly residential revenue per customer was $62.64 in the first
quarter of 2016, a decrease of $0.50, or 0.8%, compared to the
fourth quarter of 2015, due to the decline in voice services
revenue.
At March 31, 2016, Frontier had 284,400 business
customers. The first quarter of 2016 resulted in a net
reduction of 1.7% of our business customers, similar to the fourth
quarter of 2015. The average monthly business revenue per customer
was $704.10, an increase of 0.6% over the fourth quarter of 2015,
as the business customer decline continued to be driven by a
decrease in the number of small business customers.
At March 31, 2016, Frontier had 2,486,700 broadband
customers. We added 24,600 net broadband customers during the
first quarter of 2016 compared to 28,500 net additions in the
fourth quarter of 2015.
At March 31, 2016, Frontier had 543,400 video customers.
The first quarter of 2016 resulted in a net reduction of 10,300
video customers, including a reduction of 6,700 satellite video
customers, compared to the fourth quarter net reduction of 5,800
video customers, including a reduction of 5,400 satellite video
customers.
Network access expenses for the first quarter of 2016
were $160 million, compared to $165 million in the fourth quarter
of 2015. Network related expenses for the first quarter of
2016 were $326 million, compared to $318 million in the fourth
quarter of 2015. Selling, general and administrative (SG&A)
expenses for the first quarter of 2016 were $357 million,
compared to $343 million in the fourth quarter of 2015.
Our cash operating expenses of $827 million during the first
quarter of 2016 increased from $813 million in the fourth quarter
of 2015 as a result of the anticipated seasonal sequential increase
in payroll tax payments and higher compensation costs, primarily
related to increased employee headcount due to the additional
services provided by Frontier Secure® (see attached Schedule
C).
Depreciation and amortization for the first quarter of
2016 was $316 million, compared to $319 million in the fourth
quarter of 2015.
Acquisition and integration costs for the first quarter
of 2016 were $138 million related to the Verizon transaction
compared to $86 million in the fourth quarter of 2015.
Operating income for the first quarter of 2016 was $58
million and operating income margin was 4.3% compared to operating
income of $182 million and operating income margin of 12.9% in the
fourth quarter of 2015.
Interest expense for the first quarter of 2016 was $373
million compared to $362 million in the fourth quarter of 2015.
Interest expense increased by $11 million in the first quarter,
primarily due to fees for the Verizon transaction bridge loan
facilities.
Income tax expense/benefit for the first quarter of 2016
was a tax benefit of $118 million compared to a tax benefit of $73
million in the fourth quarter of 2015. Frontier’s effective tax
rate for the first quarter of 2016 was 38.7%.
Net income/loss was a net loss of $186 million, or $0.16
per share, in the first quarter of 2016, compared to a net loss of
$103 million, or $0.09 per share, in the fourth quarter of 2015.
The first quarter of 2016 included acquisition related interest
expense of $188 million and acquisition and integration costs of
$138 million (combined after-tax impact of $200 million, or $0.17
per share). Excluding the impact of these items, the non-GAAP
adjusted net income for the first quarter of 2016 was $14 million,
or $0.01 per share, as compared to $56 million, or $0.05 per share,
in the fourth quarter of 2015.
Capital expenditures for ongoing operations were $207
million for the first quarter of 2016 compared to $185 million for
the fourth quarter of 2015. In addition, acquisition related
capital expenditures were $52 million in the first quarter of 2016,
similar to the fourth quarter of 2015.
Operating cash flow was $374 million for the first
quarter of 2016 resulting in an operating cash flow margin of
27.6%, compared to operating cash flow of $501 million and an
operating cash flow margin of 35.4% for the fourth quarter of 2015.
Operating cash flow for the first quarter of 2016, as adjusted, was
$528 million, or 38.9%, after excluding $138 million of acquisition
and integration costs and $16 million of non-cash pension and other
postretirement benefit costs, as compared to $600 million in the
fourth quarter of 2015 (See attached Schedule A).
Adjusted free cash flow was $187 million for the first
quarter of 2016 compared to $243 million in the fourth quarter of
2015 (See attached Schedule A). Excluding the additional dividends
paid on the common and preferred stock issued in the June 2015
equity offerings and interest costs on our September 2015 private
notes offering, our dividend represented a 56% payout of adjusted
free cash flow for the first quarter of 2016 compared to 43% for
the fourth quarter of 2015.
Pension Contributions
Cash contributions to the pension plan were $4 million for the
first quarter of 2016. We anticipate making contributions to our
pension plan of approximately $15 million to $25 million for the
full year of 2016, including the impact of the Verizon
Transaction.
2016 Full Year Guidance
For the full year of 2016 including the impact of the
California, Texas, and Florida acquisition, Frontier’s expectation
for adjusted free cash flow (as calculated per Schedule A) is in
the range of $800 million to $925 million and for capital
expenditures for Frontier’s combined operations is in the range
of $1,250 million to $1,400 million. Frontier expects 2016 cash
taxes to be in the range of $5 million to $15 million.
Non-GAAP Measures
Frontier uses certain non-GAAP financial measures in evaluating
its performance. These include non-GAAP adjusted net income, free
cash flow, adjusted free cash flow, operating cash flow, adjusted
operating cash flow and cash operating expenses. A reconciliation
of the differences between these non-GAAP financial measures and
the most comparable financial measures calculated and presented in
accordance with GAAP is included in the tables that follow. The
non-GAAP financial measures are by definition not measures of
financial performance under GAAP, and are not alternatives to
operating income or net income (loss) as reflected in the statement
of operations or to cash flow as reflected in the statement of cash
flows, and are not necessarily indicative of cash available to fund
all cash flow needs. The non-GAAP financial measures used by
Frontier may not be comparable to similarly titled measures of
other companies.
We believe that the presentation of these non-GAAP financial
measures provides useful information to investors regarding our
financial condition and results of operations because these
measures, when used in conjunction with related GAAP financial
measures, (i) together provide a more comprehensive view of our
core operations and ability to generate cash flow, (ii) provide
investors with the financial analytical framework upon which
management bases financial, operational, compensation and planning
decisions and (iii) presents measurements that investors and rating
agencies have indicated to management are useful to them in
assessing Frontier and its results of operations. In addition, we
believe that non-GAAP adjusted net income, free cash flow, adjusted
free cash flow, operating cash flow, adjusted operating cash flow
and cash operating expenses, as we define them, can assist in
comparing performance from period to period, without taking into
account factors affecting operating income or net income (loss) as
reflected in the statement of operations, or cash flow as reflected
in the statement of cash flows, including changes in working
capital and the timing of purchases and payments. We also believe
that using the adjusted dividend payout ratio is a better metric
than the unadjusted dividend payout ratio until the completion of
the Verizon Transaction. The adjusted dividend payout ratio
excludes the impact of the interest expense and dividends on the
incremental capital that Frontier raised to finance the Verizon
Transaction. Frontier has shown adjustments to its financial
presentations to exclude certain tax items, acquisition and
integration costs, acquisition related interest expense, severance
costs and non-cash pension and other postretirement benefit costs,
as disclosed in the attached Schedules A, B and C, because
investors have indicated to management that such adjustments are
useful to them in assessing Frontier and its results of
operations.
Management uses these non-GAAP financial measures to (i) assist
in analyzing Frontier’s underlying financial performance from
period to period, (ii) evaluate the financial performance of its
business units, (iii) analyze and evaluate strategic and
operational decisions, (iv) establish criteria for compensation
decisions, and (v) assist management in understanding Frontier’s
ability to generate cash flow and, as a result, to plan for future
capital and operational decisions.
These non-GAAP financial measures have certain shortcomings. In
particular, free cash flow does not represent the residual cash
flow available for discretionary expenditures, since items such as
debt repayments and dividends are not deducted in determining such
measure. Operating cash flow has similar shortcomings, as interest,
income taxes, capital expenditures, debt repayments and dividends
are not deducted in determining this measure. Management
compensates for the shortcomings of these measures by utilizing
them in conjunction with their comparable GAAP financial measures.
The information in this press release should be read in conjunction
with the financial statements and footnotes contained in our
documents filed with the U.S. Securities and Exchange
Commission.
Conference Call and Webcast
We will host a conference call today at 8:30 A.M. Eastern time.
In connection with the conference call and as a convenience to
investors, Frontier furnished today, on a Current Report on Form
8-K, additional materials regarding first quarter 2016 results. The
conference call will be webcast and may be accessed at http://investor.frontier.com/events.cfm.
A telephonic replay of the conference call will be available
beginning at noon Eastern time, Tuesday, May 3, 2016 through
Sunday, May 8, 2016 at noon Eastern time via dial-in at
888-203-1112 for U.S. and Canadian callers or, outside the United
States and Canada, at 719-457-0820. Use the passcode 8836469 to
access the replay. A webcast replay of the call will be available
at www.frontier.com/ir.
About Frontier Communications
Frontier Communications Corporation is a leader in providing
communications services to urban, suburban, and rural communities
in 29 states. Frontier offers a variety of services to residential
customers over its fiber-optic and copper networks, including
video, high-speed internet, advanced voice, and Frontier Secure®
digital protection solutions. Frontier Business Edge™ offers
communications solutions to small, medium, and enterprise
businesses. Frontier’s approximately 29,800 employees are based
entirely in the United States. More information about Frontier is
available at www.frontier.com.
Forward-Looking Statements
This document contains "forward-looking statements," related to
future, not past, events. Forward-looking statements address our
expected future business and financial performance and financial
condition, and contain words such as "expect," "anticipate,"
"intend," "plan," "believe," "seek," "see," "will," "would," or
"target." Forward-looking statements by their nature address
matters that are, to different degrees, uncertain. For us,
particular uncertainties that could cause our actual results to be
materially different than those expressed in our forward-looking
statements include: risks related to the acquisition of properties
from Verizon, including our ability to successfully integrate
operations, our ability to realize anticipated cost savings, the
sufficiency of the assets acquired from Verizon, our ability to
migrate Verizon’s operations from Verizon owned and operated
systems and processes to our owned and operated systems and
processes successfully, our ability to enter into or obtain, or
delays in entering into or obtaining, agreements and consents
necessary to operate the acquired business as planned, on terms
acceptable to us, and increased expenses incurred due to activities
related to the transaction; our ability to meet our debt and debt
service obligations; competition from cable, wireless and wireline
carriers and satellite companies and the risk that we will not
respond on a timely or profitable basis; our ability to
successfully adjust to changes in the communications industry,
including the effects of technological changes and competition on
our capital expenditures, products and service offerings;
reductions in revenue from our voice customers that we cannot
offset with increases in revenue from broadband and video
subscribers and sales of other products and services; our ability
to maintain relationships with customers, employees or suppliers;
the impact of regulation and regulatory, investigative and legal
proceedings and legal compliance risks; continued reductions in
switched access revenues as a result of regulation, competition or
technology substitutions; the effects of changes in the
availability of federal and state universal service funding or
other subsidies to us and our competitors; our ability to
effectively manage service quality in our territories and meet
mandated service quality metrics; our ability to successfully
introduce new product offerings; the effects of changes in
accounting policies or practices, including potential future
impairment charges with respect to our intangible assets; our
ability to effectively manage our operations, operating expenses,
capital expenditures, debt service requirements and cash paid for
income taxes and liquidity, which may affect payment of dividends
on our common and preferred shares; the effects of changes in both
general and local economic conditions on the markets that we serve;
the effects of increased medical expenses and pension and
postemployment expenses; the effects of changes in income tax
rates, tax laws, regulations or rulings, or federal or state tax
assessments; our ability to successfully renegotiate union
contracts; changes in pension plan assumptions, interest rates,
regulatory rules and/or the value of our pension plan assets, which
could require us to make increased contributions to the pension
plan in 2016 and beyond; adverse changes in the credit markets or
in the ratings given to our debt securities by nationally
accredited ratings organizations, which could limit or restrict the
ability, or increase the cost, of financing to us; the effects of
state regulatory cash management practices that could limit our
ability to transfer cash among our subsidiaries or dividend funds
up to the parent company; the effects of severe weather events or
other natural or man-made disasters, which may increase our
operating expenses or adversely impact customer revenue; the impact
of potential information technology or data security breaches or
other disruptions; and the other factors that are described in our
filings with the U.S. Securities and Exchange Commission, including
our reports on Forms 10-K and 10-Q. These risks and uncertainties
may cause our actual future results to be materially different than
those expressed in our forward-looking statements. We do not
undertake to update or revise these forward-looking statements.
Frontier Communications
Corporation
Consolidated Financial Data
For the
quarter ended
($ in millions and
shares in thousands, except per share amounts)
March 31, December 31, March 31, 2016 2015 2015
Statement
of Operations Data Revenue $ 1,355 $ 1,413 $ 1,371
Operating expenses: Network access expenses 160 165 155 Network
related expenses (1) 326 318 325 Selling, general and
administrative expenses (1) 357 343 330 Depreciation and
amortization 316 319 341 Acquisition and integration costs (2)
138 86 57 Total operating expenses
1,297 1,231 1,208 Operating income 58 182 163
Investment and other income, net 11 4 1 Interest expense
373 362 245 Loss before income taxes
(304) (176) (81) Income tax benefit (118) (73)
(30)
Net loss (2) (186) (103) (51)
Less: Dividends on preferred stock 54 53 -
Net loss attributable
to Frontier common
shareholders $ (240) $ (156) $ (51) Weighted average
shares outstanding - basic 1,164,041 1,161,148 994,716
Basic net loss per common share (3) $ (0.21) $ (0.14)
$ (0.05)
Non-GAAP adjusted basic net income per
common share (3)(4) $ 0.01 $ 0.05 $ 0.02
Other
Financial Data Capital expenditures - Business operations $ 207
$ 185 $ 170 Capital expenditures - Integration activities 52 52 10
Operating cash flow, as adjusted (4) 528 600 564 Adjusted free cash
flow (4) 187 243 197 Free cash flow (4) (45) 12 197 Dividends paid
- Common Stock 123 123 105 Dividends paid - Preferred Stock 54 53 -
Dividend payout ratio, as adjusted (5) 56% 43% 54%
(1) Includes severance costs of $1 million for the
quarter ended March 31, 2015. (2) Reflects acquisition and
integration costs of $138 million ($85 million or $0.07 per share
after tax), $86 million ($47 million or $0.04 per share after tax),
and $57 million ($35 million or $0.04 per share after tax) for the
quarters ended March 31, 2016, December 31, 2015, and March 31,
2015, respectively. (3) Calculation based on weighted average
shares outstanding-basic. (4) Reconciliations to the most
comparable GAAP measures are presented in Schedules A and B at the
end of these tables. (5) Represents dividends paid on shares
outstanding prior to the June 2015 equity offerings divided by
adjusted free cash flow, as determined in Schedule A.
Note: As of March 31, 2016, there were 1,172,658 shares of common
stock and 19,250 shares of mandatory convertible preferred stock
(Series A) outstanding.
Frontier Communications
Corporation
Consolidated Financial Data
For
the quarter ended March 31, 2016 December 31, 2015 March 31, 2015
($ in
millions)
Selected Statement of Operations Data Revenue:
Voice services $ 467 $ 482 $ 525 Data and internet services 587 589
575 Other 135 136 133 Customer revenue 1,189
1,207 1,233 Switched access and subsidy 166 206
138 Total revenue $ 1,355 $ 1,413 $ 1,371
Other
Financial Data Revenue: Residential $ 583 $ 594 $ 617
Business 606 613 616 Customer revenue 1,189
1,207 1,233 Switched access and subsidy 166 206
138 Total revenue $ 1,355 $ 1,413 $ 1,371
Frontier Communications
Corporation
Consolidated Financial and Operating
Data
For the
quarter ended March 31, December 31, March 31, 2016 2015 2015
Customers (in thousands) 3,372 3,413 3,494 (1)
Residential customer metrics: Customers (in thousands) 3,088
3,124 3,193 (1) Average monthly residential revenue per customer $
62.64 $ 63.14 $ 64.13 Customer monthly churn 1.83% 1.76% 1.78%
Business customer metrics: Customers (in thousands)
284 289 301 (1) Average monthly business revenue per customer $
704.10 $ 700.03 $ 678.15
Employees 20,416 19,160
17,815
Broadband subscribers (in thousands) 2,487 2,462
2,377 (2)
Video subscribers (in thousands) 543 554 574 (2)
Switched access minutes of use (in millions) 3,540 3,761
3,948 (1) 468,200 residential
customers, 48,800 business customers and 517,000 total customers
were acquired at the time of the October 2014 Connecticut
acquisition. (2) 384,800 broadband subscribers and 191,600 video
subscribers were acquired at the time of the October 2014
Connecticut acquisition.
Frontier Communications
Corporation
Condensed Consolidated Balance Sheet
Data
($ in
millions)
March 31, 2016 December 31, 2015
ASSETS
Current assets: Cash and cash equivalents $ 500 $ 936 Accounts
receivable, net 544 571 Restricted cash 8,352 8,444 Other current
assets 180 180 Total current assets 9,576 10,131
Property, plant and equipment, net 8,495 8,493 Other assets
- principally goodwill 8,383 8,460 Total assets $
26,454 $ 27,084
LIABILITIES AND
EQUITY
Current liabilities: Long-term debt due within one year $ 370 $ 384
Accounts payable and other current liabilities 1,364
1,509 Total current liabilities 1,734 1,893 Deferred income
taxes and other liabilities 3,970 4,069 Long-term debt 15,496
15,508 Equity 5,254 5,614 Total liabilities and
equity $ 26,454 $ 27,084
Frontier Communications
Corporation
Consolidated Cash Flow Data
($ in
millions)
For the quarter ended March 31, 2016 2015
Cash flows
provided from (used by) operating activities: Net loss $ (186)
$ (51) Adjustments to reconcile net loss to net cash provided from
(used by) operating activities: Depreciation and amortization 316
341 Pension/OPEB costs 16 2 Stock based compensation expense 8 7
Amortization of deferred financing costs 21 61 Other non-cash
adjustments - (11) Deferred income taxes (119) (33) Change in
accounts receivable 26 87 Change in accounts payable and other
liabilities (144) (138) Change in other current assets -
(16)
Net cash provided from (used by) operating
activities (62) 249
Cash flows provided from (used
by) investing activities: Capital expenditures - Business
operations (207) (170) Capital expenditures - Integration
activities (52) (10) Network expansion funded by Connect America
Fund - Phase I - (9) Cash transferred from escrow 92
-
Net cash used by investing activities (167) (189)
Cash flows provided from (used by) financing activities:
Proceeds from long-term debt borrowings - 3 Financing costs paid
(6) - Long-term debt payments (24) (129) Dividends paid on common
stock (123) (105) Dividends paid on preferred stock (54) - Other
- (2)
Net cash used by financing activities
(207) (233) Decrease in cash and cash equivalents (436)
(173) Cash and cash equivalents at January 1, 936 682
Cash and cash equivalents at March 31, $ 500 $ 509
Supplemental cash flow information: Cash paid
(received) during the period for: Interest $ 524 $ 189 Income
taxes (refunds), net $ (32) $ 17
Schedule A
Frontier Communications
Corporation
Reconciliation of Non-GAAP Financial
Measures
For the
quarter ended
($ in
millions)
March 31, December 31, March 31, 2016 2015 2015
Operating Income to
Adjusted Operating Cash Flow
to Free Cash
Flow
Revenue $ 1,355 $ 1,413
$ 1,371 Less: Total operating expenses 1,297
1,231 1,208
Operating income 58
182 163 Depreciation and amortization
316 319 341
Operating cash flow 374
501 504 Add back: Acquisition and integration
costs 138 86 57 Pension/OPEB costs (1) 16 13 2 Severance costs
- - 1
Adjusted operating cash flow
528 600 564 Add back: Interest and
dividend income 11 4 1 Stock based compensation 8 8 7
Subtract: Cash paid (refunded) for income taxes (32) 1 17 Capital
expenditures - Business operations(2) 207 185 170 Interest expense
(3) 185 183 188
Adjusted free cash flow
$ 187 $ 243 $ 197
Dividends on preferred stock (54) (53) - Incremental interest on
new debt (178) (178) -
Free cash flow
$ (45) $ 12 $ 197
Operating income margin (Operating income divided by
revenue) As Reported 4.3% 12.9% 11.9% As Adjusted (4) 15.6%
19.9% 16.2%
Operating cash flow margin (Operating cash
flow divided by revenue) As Reported 27.6% 35.4% 36.7%
As Adjusted 38.9% 42.5% 41.1% (1)
Reflects pension and other postretirement benefit (OPEB) expense,
net of capitalized amounts, of $21 million, $18 million and $19
million for the quarters ended March 31, 2016, December 31, 2015,
and March 31, 2015, respectively, less cash pension contributions
and certain OPEB costs/payments of $5 million, $5 million and $17
million for the quarters ended March 31, 2016, December 31, 2015,
and March 31, 2015, respectively. (2) Excludes capital expenditures
for integration activities. (3) Excludes interest expense of $10
million and $58 million for the quarters ended March 31, 2016 and
2015, respectively, related to commitment fees on bridge loan
facilities. Also excludes $178 million in each of the quarters
ended March 31, 2016 and December 31, 2015 of interest expense
related to the September 2015 private debt offering in connection
with financing the Verizon transaction. (4) Excludes acquisition
and integration costs, pension/OPEB costs and severance costs.
Schedule B
Frontier Communications
Corporation
Reconciliation of Non-GAAP Financial
Measures
($ in millions,
except per share amounts)
For the quarter ended March 31, 2016 December 31, 2015 March 31,
2015
Net income
(loss)
Net Income (Loss) Basic Earnings (Loss) Per Share Net Income (Loss)
Basic Earnings (Loss) Per Share Net Income(Loss) Basic Earnings
(Loss) Per Share GAAP, as reported Net loss $ (186) $ (0.16)
$ (103) $ (0.09) $ (51) $ (0.05) Dividends on preferred stock
(54) (0.05) (53) (0.05) -
- Net loss attributable to Frontier common shareholders (240)
(0.21) (156) (0.14) (51) (0.05) Acquisition and integration costs
85 0.07 47 0.04 35 0.04 Severance costs - - - - 1 - Acquisition
related interest expense (1) 115 0.10 105 0.09 36 0.04 Certain tax
items (2) - - 7 0.01 - - Dividends on preferred stock 54
0.05 53 0.05 - -
Non-GAAP, as
adjusted (3) $ 14 $ 0.01 $ 56 $ 0.05 $ 21 $ 0.02
(1)
Represents interest expense related to commitment fees on bridge
loan facilities in connection with the Verizon transaction. Also
includes interest expense related to the September 2015 private
debt offering in connection with financing the Verizon transaction.
(2)
Includes impact arising from federal research and development
credits, the domestic production activities deduction, changes in
certain deferred tax balances and the net impact of uncertain tax
positions.
(3)
Non-GAAP, as adjusted may not sum due to rounding.
Schedule C
Frontier Communications
Corporation
Reconciliation of Non-GAAP Financial
Measures
For the
quarter ended
($ in
millions)
March 31, December 31, March 31, 2016 2015 2015
Operating Expenses
to Cash Operating Expenses
Total operating expenses $ 1,297
$ 1,231 $ 1,208 Subtract:
Depreciation and amortization 316 319 341 Acquisition and
integration costs 138 86 57 Pension/OPEB costs 16 13 2 Severance
costs - - 1
Cash operating expenses
$ 827 $ 813 $ 807
View source
version on businesswire.com: http://www.businesswire.com/news/home/20160503006049/en/
For Frontier Communications:Investors:Luke Szymczak,
203-614-5044Vice President, Investor Relationsluke.szymczak@FTR.comorMedia:Brigid Smith,
203-614-5042AVP, Corporate Communicationsbrigid.smith@FTR.com
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