Frontier Communications Parent, Inc. (NASDAQ: FYBR) (“Frontier” or the “Company”) reported fourth-quarter and full-year 2021 results today, delivering record operational results as it becomes a fiber-first company.

“2021 was a year of remarkable transformation reflected in our strong fourth-quarter and full-year results”, said Nick Jeffery, President and Chief Executive Officer of Frontier. “The team rallied around our purpose of Building Gigabit America™ in March and spent the next nine months breaking our own records for building and selling fiber. As we added new fiber customers, we also made service improvements that earned us a positive fiber Net Promoter Score for the first time in the company’s history. In the fourth quarter, we gained momentum and hit an inflection point, reaching positive total broadband net adds for the first time in more than five years.

“The future is fiber, and we are well on our way to becoming a fiber-first company. Yesterday, we became the only major broadband provider to launch 2 Gig fiber service network-wide, extending our leadership position as customers demand faster speeds.”

Full-year 2021 Highlights:

• Built fiber to approximately 638,000 locations, bringing total fiber passings to 4.0 million by the end of the 2021
• Added a record 99,000 fiber broadband customer net additions, 75% of which came in the second half of the year, resulting in fiber broadband customer growth of 7.4% from 2020
• Revenue of $6.41 billion, net income of $4.96 billion, and Adjusted EBITDA of $2.48 billion
• Capital expenditures of $1.70 billion, including $0.46 billion of non-subsidy-related build capital expenditures
• Began executing on plans to reach at least 10 million locations with fiber by 2025
• Recruited a new board of directors and management team with deep experience in telecom and turnarounds

Fourth-quarter 2021 Highlights:

• Built fiber to a record 192,000 locations
• Added a record 45,000 fiber broadband customer net additions, reaching an inflection point in positive total broadband customer net additions for the first time in more than five years
• Revenue of $1.54 billion, net income of $189 million, and Adjusted EBITDA of $585 million
• Capital expenditures of $559 million, including $161 million of non-subsidy-related build capital expenditures
• Delivered record-low churn across both fiber and copper broadband customers
• Achieved positive fiber Net Promoter Scores for the first time in company history
• Raised $1 billion of debt to fund fiber build plans

Fourth-quarter 2021 Consolidated Financial Results

Frontier reported consolidated revenue for the fourth quarter ended December 31, 2021 of $1.54 billion, a 6.3% decline from consolidated revenue reported in the fourth quarter of 2020, as growth in consumer fiber broadband was offset by declines in video, voice, wholesale, and other. Other revenue was particularly impacted by the sale of our CPE business in the fourth quarter, which resulted in lower revenue but had minimal impact on EBITDA.

Fourth quarter 2021 operating income was $272 million and net income was $189 million.

Adjusted EBITDA was $585 million and Adjusted EBITDA margin was 37.9%, compared to Adjusted EBITDA of $676 million and Adjusted EBITDA Margin of 41.0% in the fourth quarter of 2020.² The year-over-year decline in Adjusted EBITDA and Adjusted EBITDA Margin was driven by revenue declines, partially offset by lower video content expense, lower cost of service from lower call and repair volumes, and cost savings initiatives.

Capital expenditures were $559 million, an increase from $356 million in the fourth quarter of 2020, as fiber expansion initiatives accelerated.

Fourth-quarter 2021 Consumer Results

• Consumer revenue of $782 million, a decline of 5.9% from the fourth quarter of 2020, as strong growth in fiber broadband was offset by declines in legacy video, voice, and other
• Consumer fiber revenue of $405 million, a decline of 1.6% from the fourth quarter of 2020 as growth in consumer broadband revenue was offset by declines in voice, video, and other
• Consumer fiber broadband revenue of $245 million, an increase of 10.9% over the fourth quarter of 2020, driven by strong growth in fiber broadband customers and average revenue per customer (ARPU)
• Consumer fiber broadband customer net additions of 44,000, the 10th consecutive quarter of positive consumer fiber net additions and an almost five-fold increase from 9,000 net additions in the fourth quarter of 2020, resulting in fiber broadband customer growth of 7.9% from the fourth quarter of 2020
• Consumer fiber broadband customer churn of 1.32%, an improvement from 1.56% in the fourth quarter of 2020
• Consumer fiber broadband ARPU of $62.21, an increase of 4.2% over the fourth quarter of 2020, as customers continue to upgrade to faster speeds

Fourth-quarter 2021 Business and Wholesale Results

• Business and wholesale revenue of $677 million, a decline of 6.0% from the fourth quarter of 2020, primarily due to proactive strategic repositioning with key business partners to reset pricing in exchange for higher win shares in the future, and higher overall expected cash flow stability
• Business and wholesale fiber revenue of $270 million, a decline of 1.1% from the fourth quarter of 2020
• Business fiber broadband customer churn of 1.23%, an improvement from 1.43% in the fourth quarter of 2020
• Business fiber broadband ARPU of $106.87, an increase of 5.2% from the fourth quarter of 2020

Capital Structure

In the fourth quarter of 2021, Frontier successfully raised $1.0 billion of 6.000% second lien secured debt. As of the end of 2021, Frontier had total liquidity of approximately $2.6 billion, including a cash balance of approximately $2.1 billion and $0.5 billion of available borrowing capacity on its revolving credit facility. Frontier’s net leverage ratio for the four quarters ended December 31, 2021, was approximately 2.4x.³ Frontier has no long-term debt maturities prior to 2027.

2022 Outlook

Frontier’s guidance for the full year 2022 is:

• Adjusted EBITDA of $2.00 – $2.15 billion
• Fiber build to at least 1 million new locations
• Cash capital expenditures of $2.40 – $2.50 billion
• Cash taxes of approximately $20 million
• Cash interest payments of approximately $430 million
• Cash Pension and OPEB expense of approximately $75 million (net of capitalization)
• Cash pension and OPEB contributions, including a catch-up from contribution waivers during bankruptcy, of approximately $135 million (net of capitalization)

Conference Call Information

As previously announced, Frontier will host a conference call with the financial community to discuss fourth-quarter and full-year 2021 results today, February 23, 2022, beginning at 8:30 a.m. Eastern Time.

The conference call webcast and presentation materials are accessible through Frontier’s Investor Relations website and will remain archived at this location.

About Frontier Communications

Frontier is a leading communications provider offering gigabit speeds to empower and connect millions of consumers and businesses across 25 states. It is building critical digital infrastructure across the country with its fiber-optic network and cloud-based solutions, enabling connections today and future proofing for tomorrow. Rallied around a single purpose, Building Gigabit America™, the Company is focused on supporting a digital society, closing the digital divide, and working toward a more sustainable environment. Frontier is preparing today for a better tomorrow. Visit www.frontier.com.