FRONTIER COMMUNICATIONS PARENT, INC. FORM 10-K FOR THE FISCAL YEAR ENDED DECEMBER 31, 2024

Press release·02/21/2025 10:42:22

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Frontier Communications Parent, Inc. filed its annual report for the fiscal year ended December 31, 2024. The company reported total revenue of $[insert revenue figure], a decrease of [insert percentage] compared to the prior year. Net loss attributable to common shareholders was $[insert loss figure], compared to a net loss of $[insert prior year loss figure] in the prior year. The company’s total assets decreased to $[insert asset figure] and total liabilities increased to $[insert liability figure]. Frontier Communications Parent, Inc. also reported a significant decline in its cash and cash equivalents, which decreased to $[insert cash figure]. The company’s financial performance was impacted by various factors, including the ongoing decline in its legacy wireline business and the costs associated with its restructuring efforts. Despite these challenges, Frontier Communications Parent, Inc. remains focused on executing its strategic plan to transform its business and improve its financial performance.

Financial Performance Overview

Frontier Communications Parent, Inc. is a leading communications and technology provider, offering broadband services to approximately 3.1 million customers across 25 states. The company is focused on expanding its fiber-optic network to meet the growing demand for high-speed internet and cloud-based solutions.

In 2024, Frontier reported operating income of $353 million, a decrease of $139 million compared to the previous year. This decline was primarily due to decreases in revenue from voice and video services, as well as increases in selling, general and administrative expenses and depreciation and amortization. However, the company saw an increase in data and internet services revenue, as well as decreases in cost of service.

Revenue and Profit Trends

Frontier’s revenue grew by 3% year-over-year, reaching $5.937 billion in 2024. This growth was driven by a 14% increase in fiber revenue, which offset an 8% decline in copper revenue. The company’s consumer revenue increased by 2%, while business and wholesale revenue grew by 5%.

The increase in consumer revenue was primarily due to growth in fiber broadband customers and higher average revenue per customer (ARPC). Fiber broadband customer net additions were 371,000, a 22% increase compared to the prior year. The average monthly consumer fiber broadband revenue per customer (ARPU) also increased by 3% to $65.54.

In contrast, Frontier’s copper broadband customer base declined, with a net loss of 210,000 customers. The average monthly consumer copper broadband ARPU increased by 12% to $58.96, but the higher churn rate of 2.22% offset some of the revenue gains.

Overall, the company’s consumer customer base grew by 2% as of December 31, 2024, driven by the increase in fiber broadband customers, which partially offset the decline in copper broadband, voice, and video customers.

Strengths and Weaknesses

One of Frontier’s key strengths is its focus on expanding and improving its fiber-optic network. The company added approximately 1.3 million fiber passings in 2024, bringing the total to 7.8 million locations passed with fiber. This investment in fiber infrastructure has contributed to healthy customer retention, with an average monthly consumer fiber broadband churn rate of 1.36%.

Another strength is Frontier’s efforts to improve operational efficiency. The company achieved its annualized gross run rate cost savings target of $500 million at the end of 2023, double its initial goal. As of December 31, 2024, the company had realized $597 million in gross annualized cost savings since 2021.

However, Frontier’s reliance on voice and video services, which are declining revenue streams, is a weakness. The company experienced a 10% decline in voice services revenue and a 20% decline in video services revenue in 2024. As the business mix shifts more towards fiber, Frontier will need to continue to manage the transition and find ways to offset the revenue losses from these legacy services.

Another potential weakness is the company’s high debt load. As of December 31, 2024, Frontier had $11.569 billion in long-term debt obligations, with $3.748 billion in interest payments due over the next several years. While the company has taken steps to improve its liquidity and cost of capital, such as issuing $750 million in low-cost fiber securitization notes and adding a $1.5 billion delayed draw term loan facility, the high debt burden could limit the company’s financial flexibility and ability to invest in future growth.

Outlook and Future Prospects

Frontier’s future prospects are closely tied to its ability to continue expanding and improving its fiber-optic network. The company’s strategy focuses on four key priorities: fiber deployment, fiber penetration, operational efficiency, and improving the customer experience.

The company’s fiber build plans include significant expenditures, which could be adversely impacted by supply chain delays, inflation, tight labor markets, and other risks. However, Frontier is closely monitoring these factors and evaluating their potential impact on the business.

One significant development for Frontier is the pending merger with Verizon. On September 4, 2024, the companies announced that Verizon will acquire Frontier for $38.50 per share in cash, representing a premium of 43.7% to Frontier’s 90-day volume-weighted average share price. The merger is subject to regulatory approvals and other customary conditions and is expected to close by the first quarter of 2026.

If the merger is completed, Frontier’s customers and shareholders may benefit from Verizon’s scale, resources, and expertise in the telecommunications industry. However, the integration process could also present challenges and risks that may impact the company’s operations and financial performance in the short term.

Overall, Frontier’s focus on fiber deployment, operational efficiency, and improving the customer experience positions the company for potential long-term growth, particularly if the Verizon merger is successful. However, the company will need to continue to navigate the challenges of the evolving telecommunications landscape, including the decline of legacy services and the need to manage its significant debt burden.