FRONTIER COMMUNICATIONS ~~CORPORATION~~PARENT, INC. AND SUBSIDIARIES

Table of Contents

~~Index~~


	Page ~~No.~~
Part I. Financial Information (Unaudited)

Item 1. Financial Statements

Consolidated Balance Sheets as of September 30, ~~2017~~2022, and December 31, ~~2016~~2021	21

Consolidated Statements of ~~Operations~~Income for the three months ended September 30, 2022 (Successor), and the three months ended September 30, 2021 (Successor)	2

Consolidated Statements of Income for the nine months ended September 30, ~~2017~~2022 (Successor), the five months ended September 30, 2021 (Successor), and ~~2016~~the four months ended April 30, 2021 (Predecessor)	3

Consolidated Statements of Comprehensive ~~Loss~~Income for the three ~~and~~months ended September 30, 2022 (Successor), the three months ended September 30, 2021 (Successor), the nine months ended September 30, ~~2017~~2022 (Successor), the five months ended September 30, 2021 (Successor), and ~~2016~~the four months ended April 30, 2021 (Predecessor)	4

Consolidated ~~Statement~~Statements of Equity for the nine months ended September 30, ~~2017~~2022 (Successor); and for	5

Consolidated Statements of Cash Flows for the nine months ended September 30, ~~2017~~2022 (Successor), the five months ended September 30, 2021 (Successor), and ~~2016~~the four months ended April 30, 2021 (Predecessor)	6

Notes to Consolidated Financial Statements	7

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations	3038

Item 3. Quantitative and Qualitative Disclosures about Market Risk	5058

Item 4. Controls and Procedures	5160

Part II. Other Information

Item 1. Legal Proceedings	5261

Item 1A. Risk Factors	5261

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds	5361

Item ~~4. Mine Safety Disclosure~~6. Exhibits	5362

~~Item 6. Exhibits~~Signature	5463

~~Signature~~	55

PART I. FINANCIAL INFORMATION

Item 1.Financial Statements

FRONTIER COMMUNICATIONS CORPORATIONPARENT, INC. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS
SHEETS

($ in millions and shares in thousands, except for per-share amounts)

(Unaudited)

September 30, 2017

December 31, 2016
ASSETS

Current assets:

Cash and cash equivalents

$
286

$
522
Accounts receivable, less allowances of $69 and $131, respectively

780

938
Prepaid expenses

98

88
Income taxes and other current assets

98

108
Total current assets

1,262

1,656

Property, plant and equipment, net

14,375

14,902
Goodwill

9,102

9,674
Other intangibles, net

2,223

2,662
Other assets

114

119
Total assets

$
27,076

$
29,013

LIABILITIES AND EQUITY

Current liabilities:

Long-term debt due within one year

$
166

$
363
Accounts payable

509

698
Advanced billings

277

301
Accrued content costs

130

164
Accrued other taxes

177

134
Accrued interest

205

437
Pension and other postretirement benefits

23

23
Other current liabilities

306

324
Total current liabilities

1,793

2,444

Deferred income taxes

2,253

2,516
Pension and other postretirement benefits

1,647

1,602
Other liabilities

369

372
Long-term debt

17,604

17,560

Equity:

Preferred stock, $0.01 par value (50,000 authorized shares,

11.125%, Series A, 19,250 shares issued and outstanding)

-

-
Common stock, $0.25 par value (175,000 authorized shares,

79,532 issued and 78,462 and 78,170 outstanding,

at September 30, 2017 and December 31, 2016, respectively)

20

20
Additional paid-in capital

5,124

5,561
Accumulated deficit

(1,234)

(460)
Accumulated other comprehensive loss, net of tax

(349)

(387)
Treasury common stock

(151)

(215)
Total equity

3,410

4,519
Total liabilities and equity

$
27,076

$
29,013


	(Unaudited)
	September 30, 2022		December 31, 2021
ASSETS
Current assets:
Cash and cash equivalents	$	230	$	2,127
Short-term investments		2,325		-
Accounts receivable, less allowances of $47 and $57, respectively		422		458
Prepaid expenses		80		73
Income taxes and other current assets		21		30
Total current assets		3,078		2,688

Property, plant and equipment, net		10,847		9,199
Other intangibles, net		3,986		4,227
Other assets		362		367
Total assets	$	18,273	$	16,481

LIABILITIES AND EQUITY
Current liabilities:
Long-term debt due within one year	$	15	$	15
Accounts payable		995		535
Advanced billings		195		197
Accrued other taxes		179		183
Accrued interest		178		76
Pension and other postretirement benefits		46		46
Other current liabilities		369		399
Total current liabilities		1,977		1,451

Deferred income taxes		554		387
Pension and other postretirement benefits		1,193		1,672
Other liabilities		496		403
Long-term debt		9,120		7,968
Total liabilities		13,340		11,881

Equity:
Common stock, $0.01 par value (1,750,000 authorized shares, 244,999
and 244,416 shares issued and outstanding at September 30, 2022 and
December 31, 2021, respectively)		2		2
Additional paid-in capital		4,171		4,124
Retained earnings		700		414
Accumulated other comprehensive income, net of tax		60		60
Total equity		4,933		4,600
Total liabilities and equity	$	18,273	$	16,481

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

‎

PART I. FINANCIAL INFORMATION (Continued)

FRONTIER COMMUNICATIONS CORPORATIONPARENT, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF ~~OPERATIONS~~INCOME

~~FOR THE THREE~~ ($ in millions and shares in thousands, except for per-share amounts)

(Unaudited)


	For the three months		For the three months
	ended September 30,		ended September 30,
	2022		2021

Revenue	$	1,444	$	1,576

Operating expenses:
Cost of service		544		590
Selling, general, and administrative expenses		431		421
Depreciation and amortization		296		273
Restructuring costs and other charges		4		8
Total operating expenses		1,275		1,292


Operating income		169		284

Investment and other income (loss), net (See Note 10)		211		(37)
Pension settlement costs		(50)		-
Interest expense		(135)		(90)

Income before income taxes		195		157
Income tax expense		75		31

Net income	$	120	$	126

Basic net earnings per share
attributable to Frontier common shareholders	$	0.49	$	0.52

Diluted net earnings per share
attributable to Frontier common shareholders	$	0.49	$	0.51

Total weighted average shares outstanding - basic		244,984		244,403

Total weighted average shares outstanding - diluted		245,212		245,667

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

‎

PART I. FINANCIAL INFORMATION (Continued)

FRONTIER COMMUNICATIONS PARENT, INC. AND NINE MONTHS ENDED SEPTEMBER 30, 2017 AND 2016SUBSIDIARIES

CONSOLIDATED STATEMENTS OF INCOME

($ in millions and shares in thousands, except for per-share amounts)

(Unaudited)

For the three months ended

For the nine months ended

September 30,

September 30,

2017

2016

2017

2016

Revenue

$
2,251

$
2,524

$
6,911

$
6,487

Operating expenses:

Network access expenses

390

440

1,209

1,053
Network related expenses

497

527

1,468

1,399
Selling, general and administrative expenses

486

582

1,561

1,535
Depreciation and amortization

539

578

1,670

1,469
Goodwill impairment

-

-

670

-
Acquisition and integration costs

1

122

15

387
Pension settlement costs

15

-

77

-
Restructuring costs and other charges

14

11

55

11
Total operating expenses

1,942

2,260

6,725

5,854

Operating income

309

264

186

633

Investment and other income, net

2

3

5

14
Loss (gain) on extinguishment of debt and debt exchanges

(1)

7

89

7
Interest expense

381

386

1,157

1,145

Loss before income taxes

(69)

(126)

(1,055)

(505)
Income tax benefit

(31)

(46)

(280)

(212)

Net loss

(38)

(80)

(775)

(293)
Less: Dividends on preferred stock

54

54

161

161
Net loss attributable to

Frontier common shareholders

$
(92)

$
(134)

$
(936)

$
(454)

Basic net loss per share

attributable to Frontier common shareholders

$
(1.19)

$
(1.73)

$
(12.06)

$
(5.87)

Diluted net loss per share

attributable to Frontier common shareholders

$
(1.19)

$
(1.73)

$
(12.07)

$
(5.87)

Total weighted average shares outstanding - basic

77,797

77,612

77,714

77,608

Total weighted average shares outstanding - diluted

77,797

77,612

77,875

77,608


	Successor				Predecessor
	For the nine months		For the five months		For the four months
	ended September 30,		ended September 30,		ended April 30,
	2022		2021		2021

Revenue	$	4,350	$	2,637	$	2,231

Operating expenses:
Cost of service		1,643		986		830
Selling, general, and administrative expenses		1,293		690		537
Depreciation and amortization		870		452		506
Restructuring costs and other charges		88		19		7
Total operating expenses		3,894		2,147		1,880


Operating income		456		490		351

Investment and other income (loss), net (See Note 10)		410		(39)		1
Pension settlement costs		(50)		-		-
Reorganization items, net		-		-		4,171
Interest expense (See Note 8)		(356)		(152)		(118)

Income before income taxes		460		299		4,405
Income tax expense (benefit)		174		74		(136)

Net income	$	286	$	225	$	4,541

Basic net earnings per share
attributable to Frontier common shareholders	$	1.17	$	0.92	$	43.42

Diluted net earnings per share
attributable to Frontier common shareholders	$	1.17	$	0.92	$	43.28

Total weighted average shares outstanding - basic		244,711		244,402		104,584

Total weighted average shares outstanding - diluted		245,080		245,600		104,924

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

‎

PART I. FINANCIAL INFORMATION (Continued)

FRONTIER COMMUNICATIONS PARENT, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF COMPREHENSIVE ~~LOSS~~INCOME

~~FOR THE THREE AND NINE MONTHS ENDED SEPTEMBER 30, 2017 AND 2016~~

($ ($ in millions)

(Unaudited)

For the three months ended

For the nine months ended

September 30,

September 30,

2017

2016

2017

2016

Net loss

$
(38)

$
(80)

$
(775)

$
(293)

Pension settlement costs, net of tax

12

-

48

-
Other comprehensive income (loss), net of tax

(32)

(61)

(10)

(50)
Net current-period other comprehensive income (loss)

(20)

(61)

38

(50)

Comprehensive loss

$
(58)

$
(141)

$
(737)

$
(343)


	For the three months		For the three months
	ended September 30,		ended September 30,
	2022		2021

Net income	$	120	$	126
Other comprehensive (loss) income, net of tax		(2)		3

Comprehensive income	$	118	$	129


	Successor				Predecessor
	For the nine months		For the five months		For the four months
	ended September 30,		ended September 30,		ended April 30,
	2022		2021		2021

Net income	$	286	$	225	$	4,541
Other comprehensive income, net of tax		-		44		359

Comprehensive income	$	286	$	269	$	4,900

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

‎

PART I. FINANCIAL INFORMATION (Continued)

FRONTIER COMMUNICATIONS CORPORATIONCOMMUNICATIONS PARENT, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTSTATEMENTS OF EQUITY
(DEFICIT)

~~FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2017~~

($ ($ in millions and shares in thousands)

(Unaudited)

For the nine months ended September 30, 2017

Accumulated

Additional

Other

Treasury

Preferred Stock

Common Stock

Paid-In

Accumulated

Comprehensive

Common Stock

Total

Shares

Amount

Shares

Amount

Capital

Deficit

Loss

Shares

Amount

Equity

Balance January 1, 2017 (See Note 1)

19,250

$
-

79,532

$
20

$
5,561

$
(460)

$
(387)

(1,362)

$
(215)

$
4,519
Cumulative-effect adjustment from adoption of ASU 2016-09

-

-

-

-

-

1

-

-

-

1
Stock plans

-

-

-

-

(57)

-

-

292

64

7
Dividends on common stock

-

-

-

-

(219)

-

-

-

-

(219)
Dividends on preferred stock

-

-

-

-

(161)

-

-

-

-

(161)
Net loss

-

-

-

-

-

(775)

-

-

-

(775)
Pension settlement costs, net of tax

-

-

-

-

-

-

48

-

-

48
Other comprehensive income, net of tax

-

-

-

-

-

-

(10)

-

-

(10)
Balance September 30, 2017

19,250

$
-

79,532

$
20

$
5,124

$
(1,234)

$
(349)

(1,070)

$
(151)

$
3,410



	For the nine months ended September 30, 2022 (Successor)
								Accumulated
				Additional				Other
	Common Stock			Paid-In		Retained		Comprehensive		Total
	Shares	Amount		Capital		Earnings		Income		Equity
Balance at January 1, 2022	244,416	$	2	$	4,124	$	414	$	60	$	4,600
Stock plans	60		-		15		-		-		15
Net income	-		-		-		65		-		65
Other comprehensive
loss, net of tax	-		-		-		-		(2)		(2)
Balance at March 31, 2022	244,476	$	2	$	4,139	$	479	$	58	$	4,678
Stock plans	493		-		13		-		-		13
Net income	-		-		-		101		-		101
Other comprehensive
income, net of tax	-		-		-		-		4		4
Balance at June 30, 2022	244,969	$	2	$	4,152	$	580	$	62	$	4,796
Stock plans	30		-		19		-		-		19
Net income	-		-		-		120		-		120
Other comprehensive
income, net of tax	-		-		-		-		(2)		(2)
Balance at September 30, 2022	244,999	$	2	$	4,171	$	700	$	60	$	4,933


	For the nine months ended September 30, 2021
								Accumulated
				Additional				Other		Treasury			Total
	Common Stock			Paid-In		Accumulated		Comprehensive		Common Stock			Equity
	Shares	Amount		Capital		Deficit		Income (Loss)		Shares	Amount		(Deficit)
Balance at January 1, 2021	106,025	$	27	$	4,817	$	(8,975)	$	(755)	(1,232)	$	(14)	$	(4,900)
Stock plans	-		-		-		-		-	(122)		(1)		(1)
Net income	-		-		-		60		-	-		-		60
Other comprehensive
income, net of tax	-		-		-		-		11	-		-		11
Balance at March 31, 2021 (Predecessor)	106,025	$	27	$	4,817	$	(8,915)	$	(744)	(1,354)	$	(15)	$	(4,830)

Stock plans	-		-		1		-		-	-		-		1
Net income	-		-		-		4,481		-	-		-		4,481
Other comprehensive
income, net of tax	-		-		-		-		348	-		-		348
Cancellation of Predecessor equity	(106,025)		(27)		(4,818)		4,434		396	1,354		15		-
Issuance of Successor common stock	244,401		2		4,106		-		-	-		-		4,108
Balance at April 30, 2021 (Predecessor)	244,401	$	2	$	4,106	$	-	$	-	-	$	-	$	4,108


Balance at April 30, 2021 (Successor)	244,401	$	2	$	4,106	$	-	$	-	-	$	-	$	4,108
Stock plans	-		-		-		-		-	-		-		-
Net income	-		-		-		99		-	-		-		99
Other comprehensive
income, net of tax	-		-		-		-		41	-		-		41
Balance at June 30, 2021 (Successor)	244,401	$	2	$	4,106	$	99	$	41	-	$	-	$	4,248
Stock plans	6		-		8		-		-	-		-		8
Net income	-		-		-		126		-	-		-		126
Other comprehensive
income, net of tax	-		-		-		-		3	-		-		3
Balance at September 30, 2021	244,407	$	2	$	4,114	$	225	$	44	-	$	-	$	4,385

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

PART I. FINANCIAL INFORMATION (Continued)

FRONTIER COMMUNICATIONS CORPORATIONCOMMUNICATIONS PARENT, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

~~FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2017 AND 2016~~

($ in millions)

~~(Unaudited)~~


	Successor				Predecessor
	For the nine months ended September 30,		For the five months ended September 30,		For the four months ended April 30,
	2022		2021		2021

Cash flows provided from (used by) operating activities:
Net Income	$	286	$	225	$	4,541
Adjustments to reconcile net income to net cash provided from (used by) operating activities:
Depreciation and amortization		870		452		506
Pension settlement costs		50		-		-
Stock-based compensation expense		54		8		(1)
Non-cash reorganization items, net		-		-		(5,467)
Lease Impairment		44		-		-
Bad debt expense		19		16		-
Other adjustments		(20)		(11)		1
Deferred income taxes		167		68		(148)
Change in accounts receivable		16		49		36
Change in pension and other post retirement liabilities		(527)		60		(12)
Change in accounts payable and other liabilities		94		89		(156)
Change in prepaid expenses, income taxes, and other assets		(12)		27		46
Net cash provided from (used by) operating activities		1,041		983		(654)

Cash flows provided from (used by) investing activities:
Capital expenditures		(1,860)		(646)		(500)
Proceeds on sale of assets		4		-		9
Purchase of short-term investments		(3,225)		-		-
Sale of short-term investments		900		-		-
Other		3		1		1
Net cash used by investing activities		(4,178)		(645)		(490)

Cash flows provided from (used by) financing activities:
Long-term debt principal payments		(11)		(8)		(1)
Proceeds from long-term debt borrowings		1,200		-		225
Financing costs paid		(17)		-		(4)
Finance lease obligation payments		(15)		(9)		(7)
Proceeds from financing lease transactions		70		-		-
Taxes paid on behalf of employees for shares withheld		(7)		-		-
Other		(1)		-		(16)
Net cash provided from (used by) financing activities		1,219		(17)		197

Increase (decrease) in cash, cash equivalents, and restricted cash		(1,918)		321		(947)
Cash, cash equivalents, and restricted cash at January 1,		2,178		940		1,887
Cash, cash equivalents, and restricted cash at September 30,	$	260	$	1,261	$	940

Supplemental cash flow information:
Cash paid during the period for:
Interest	$	286	$	121	$	84
Income tax payments, net	$	7	$	27	$	9
Reorganization items, net	$	-	$	-	$	1,397

2017

2016

Cash flows provided from (used by) operating activities:

Net loss

$
(775)

$
(293)
Adjustments to reconcile net loss to net cash provided from (used by)

operating activities:

Depreciation and amortization

1,670

1,469
Loss on extinguishment of debt and debt exchanges

89

7
Pension settlement costs

77

-
Pension/OPEB costs

22

59
Stock-based compensation expense

10

21
Amortization of deferred financing costs

26

38
Other adjustments

(11)

-
Deferred income taxes

(286)

(163)
Goodwill impairment

670

-
Change in accounts receivable

161

(56)
Change in accounts payable and other liabilities

(471)

(108)
Change in prepaid expenses, income taxes and other current assets

3

(12)
Net cash provided from operating activities

1,185

962

Cash flows provided from (used by) investing activities:

Capital expenditures - Business operations

(846)

(960)
Capital expenditures - Integration activities

(19)

(99)
Cash paid for the CTF Acquisition

-

(9,886)
Proceeds on sale of assets

109

-
Other

6

-
Net cash used by investing activities

(750)

(10,945)

Cash flows provided from (used by) financing activities:

Proceeds from long-term debt borrowings

1,500

1,625
Long - term debt payments

(1,662)

(113)
Financing costs paid

(15)

(38)
Premium paid to retire debt

(80)

-
Dividends paid on common stock

(219)

(370)
Dividends paid on preferred stock

(161)

(161)
Capital lease obligation payments

(30)

(8)
Taxes paid on behalf of employees for shares withheld

(5)

(10)
Other

1

9
Net cash provided from (used by) financing activities

(671)

934

Decrease in cash, cash equivalents, and restricted cash

(236)

(9,049)
Cash, cash equivalents, and restricted cash at January 1,

522

9,380

Cash, cash equivalents, and restricted cash at September 30,

$
286

$
331

Supplemental cash flow information:

Cash paid (received) during the period for:

Interest

$
1,373

$
1,277
Income tax refunds, net

$
(4)

$
(35)

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

PART I. FINANCIAL INFORMATION (Continued)

FRONTIER COMMUNICATIONS CORPORATIONPARENT, INC. AND SUBSIDIARIES

(Unaudited)

~~NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)~~

(1) Summary of Significant ~~Accounting~~Accounting Policies:

~~(a)~~

a) Basis of Presentation and Use of Estimates:

Frontier Communications ~~Corporation~~Parent, Inc. and its subsidiaries are referred to as “we,” “us,” “our,” “Frontier,” or the “Company” in this report. Our interim unaudited consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (GAAP) and should be read in conjunction with the consolidated financial statements and notes included in our Annual Report on Form 10-K for the year ended December 31, ~~2016.~~ ~~Certain reclassifications of amounts previously reported have been made to conform to the current presentation, as described in Note 2 – Recent Accounting Literature.~~ 2021. All significant intercompany balances and transactions have been eliminated in consolidation. These interim unaudited consolidated financial statements include all adjustments (consisting of normal recurring accruals) considered necessary, in the opinion of Frontier’s management, to present fairly the results for the interim periods shown. Revenues, net ~~loss~~income, and cash flows for any interim periods are not necessarily indicative of results that may be expected for the full year.

We operate in one reportable segment. Frontier provides both regulated and unregulated voice, data and video services to consumer, business, and wholesale customers and is typically the incumbent voice services provider in its service areas.

In 2021, we recategorized our previous operating expenses categories (“Network access expenses” and “Network related expense”) into one expense line: “Cost of service”. All historical periods presented have been updated to conform to the new categorization. In addition, certain reclassifications of prior period balances have been made to conform to the current period presentation. For our interim financial statements as of and for the period ended September 30, ~~2017,~~2022, we evaluated subsequent events and transactions for potential recognition or disclosure through the date that we filed this Form 10-Q with the Securities and Exchange Commission ~~(SEC)~~(“SEC”).

Effective April 1, 2016, Frontier’s scope of operations and balance sheet changed materially as a result of the completion of the CTF Acquisition, as described in Note 3 – Acquisitions. Historical financial data presented for Frontier is not indicative of the future financial position or operating results for Frontier, and includes the results of the CTF Operations, as defined in Note 3 – Acquisitions, from the date of acquisition on April 1, 2016.

The preparation of our interim financial statements in conformity with GAAP requires management to make estimates and assumptions that affect (i) the reported amounts of assets and liabilities at the date of the financial statements, (ii) the disclosure of contingent assets and liabilities, and (iii) the reported amounts of revenue and expenses during the reporting period. Actual results may differ from those estimates. Estimates and judgments are used when accounting for the application of fresh start accounting, allowance for ~~doubtful accounts,~~credit losses, asset impairments, indefinite-lived intangibles, depreciation and amortization, income taxes, ~~business combinations,~~ and pension and other postretirement benefits, among others.

~~We operate~~Chapter 11 Bankruptcy Emergence

As described in ~~one reportable segment. Frontier provides both regulated~~Note 3 Emergence from the Chapter 11 Cases, and ~~unregulated voice, data~~Note 4 Fresh Start Accounting, to our consolidated financial statements included in our annual report on Form 10-K for the year ended December 31, 2021, the Company emerged from bankruptcy on April 30, 2021 (the “Effective Date”). Accordingly, the consolidated financial information has been prepared in conformity with Accounting Standards Codification Subtopic 852-10 (ASC 852), Reorganizations, for the Successor as a new entity with assets, liabilities, and ~~video services to consumer, commercial and wholesale customers and is typically the incumbent voice services provider in its service areas.~~a capital structure having carrying amounts not comparable with prior periods.

On July 10, 2017, we effected a one for fifteen reverse stock split of our common stock. The reverse stock split reduced the number of common shares issued (which includes outstanding shares and treasury shares) from approximately 1,193,000,000 shares to 80,000,000 shares, and reduced shares outstanding from 1,178,000,000 shares to 79,000,000 shares. In addition, and at the same time, the total number of shares of common stock that Frontier is authorized to issue changed from 1,750,000,000 shares to 175,000,000 shares. There was no change
‎

PART I. FINANCIAL INFORMATION (Continued)

FRONTIER COMMUNICATIONS PARENT, INC. AND SUBSIDIARIES

(Unaudited)

Reorganization items incurred in the ~~par value~~first four months of 2021 as a result of the ~~common stock,~~Chapter 11 Cases included a gain on settlement of liabilities subject to compromise of $5,274 million, fresh start valuation adjustment charges of $1,038 million, debtor-in-possession financing costs of $15 million and ~~no fractional shares~~$50 million in professional fees and other bankruptcy related costs presented separately in the accompanying consolidated statements of income.

The Company incurred significant costs associated with the reorganization, primarily legal and professional fees. Subsequent to April 14, 2020 (the “Petition Date”), these costs were ~~issued. All share~~expensed as incurred and ~~per share amounts~~significantly affected our consolidated results of operations. From the Petition Date to the Effective Date, these costs were included in “Reorganization items, net” on our consolidated statement of income. For the periods prior to the Petition Date and following the Effective Date, these costs have been included in “Restructuring costs and other charges” on our consolidated statement of income. Refer to Note 9.

Fresh Start Accounting

Upon emergence from bankruptcy, we adopted fresh start accounting in accordance with Accounting Standards Codification (ASC) Topic 852 – Reorganizations (ASC 852) and became a new entity for financial reporting purposes. As a result, the consolidated financial statements for periods after the Effective Date are not comparable with the consolidated financial statements on or before that date as indicated by the “black line” division in the financial statements and ~~footnotes have been retroactively adjusted for all periods presented~~footnote tables, which emphasizes the lack of comparability between amounts presented. References to ~~give effect~~“Successor” relate to our financial position and results of operations after the Effective Date. References to “Predecessor” refer to the ~~reverse~~ ~~stock~~ ~~split.~~ financial position and results of operations of Frontier Communications Corporation and its subsidiaries on or before the Effective Date (“Old Frontier”).

b)Changes in Accounting Policies:

The accounting policy differences between Predecessor and Successor include:

Universal Service Fund and Other Surcharges - Frontier collects various taxes, Universal Service Fund (“USF”) surcharges (“primarily federal USF”), and certain other surcharges, from its customers and subsequently remits them to governmental authorities. The Predecessor recorded USF and other taxes on a gross basis on the consolidated statement of income, included within “Revenue” and “Cost of service expense”. After emergence, the Successor records these USF and other taxes on a net basis.

Provision for Bad Debt - The Predecessor reported the provision for bad debt as a reduction of revenue. After emergence, the Successor reports bad debt expense as an operating expense included in “Selling, general, and administrative expenses”.

Contract Acquisition Costs - During the Predecessor period, certain commissions to obtain new customers were deferred and amortized over four years, which represented the estimated customer contract period. As a result of fresh start accounting, that assumption was reevaluated and the period of benefit for our ~~reverse stock split~~retail customers was determined to be less than one year. As such, these costs are now expensed as incurred.

Actuarial Losses on Defined Benefit Plans - Historically, actuarial gains (losses) were recognized as they occurred and included in “Accumulated other comprehensive income (loss)” and were subject to amortization over the ~~conversion rates~~estimated average remaining service period of ~~our Series A Preferred Stock~~participants. As part of fresh start accounting, Frontier has made an accounting policy election to recognize these gains and losses immediately in the period they occur as “Investment and other income (loss)” on the consolidated statement of income.

PART I. FINANCIAL INFORMATION (Continued)

FRONTIER COMMUNICATIONS PARENT, INC. AND SUBSIDIARIES

(Unaudited)

Government Grants Revenue - Certain governmental grants that were ~~proportionately adjusted.~~historically presented on a net basis as part of capital expenditures, are now presented on a gross basis and included in ”Revenue” on the consolidated statement of income.

~~(b)~~ Administrative Expenses -Historically, the Predecessor capitalized certain administrative expenses, that following emergence, are expensed during the period incurred and included in “Selling, general, and administrative expense” on the consolidated statement of income.

c) Revenue Recognition:

Revenue for data & Internet services, voice services, video services, and switched and non-switched access services is recognized whenas services are provided or when products are delivered to customers. RevenueServices that isare billed in advance includesinclude monthly recurring network access services (including data services), special access services, and monthly recurring voice, video, and related charges. Revenue is recognized by measuring progress toward the complete satisfaction of Frontier’s performance obligations. The unearned portion of these fees is initially deferred as a component of “Advanced billings” on our consolidated balance sheet and recognized as revenue over the period that the services are provided. RevenueServices that isare billed in arrears includesinclude non-recurring network access services (including data services), switched access services, and non-recurring voice and video services. The earned but unbilled portion of these fees is recognized as
7
PART I. FINANCIAL INFORMATION (Continued)
FRONTIER COMMUNICATIONS CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)
revenue in our consolidated statements of operationsincome and accrued in “Accounts receivable” on our consolidated balance sheet in the period that the services are provided. Excise taxes are recognized as a liability when billed. Installation fees

Satisfaction of Performance Obligations

Frontier satisfies its obligations to customers by transferring goods and services in exchange for consideration received from the customer. The timing of Frontier’s satisfaction of the performance obligation may differ from the timing of the customer’s payment.

Bundled Service and Allocation of Discounts

When customers purchase more than one service, revenue for each service is determined by allocating the total transaction price based upon the relative stand-alone selling price of such service. We frequently offer service discounts as an incentive to customers, which reduce the total transaction price. Any incentives which are considered cash equivalents (e.g. gift cards) that are granted will similarly result in a reduction of the total transaction price. Cash equivalent incentives are accounted for on a portfolio basis and are recognized in the month they are awarded to customers.

Customer Incentives

In the process of acquiring and/or retaining customers, we may issue a variety of incentives aside from service discounts or cash equivalent incentives. Those incentives that have stand-alone value (e.g., gift cards not considered cash equivalents or free goods/services) are considered separate performance obligations. While these incentives are free to the customer, a portion of the consideration received from the customer is ascribed to them based upon their ~~related direct and incremental costs~~relative stand-alone selling price. These types of incentives are ~~initially deferred and recognized as~~accounted for on a portfolio basis with both revenue and expense recognized in the month they are awarded to the customer. The earned revenue associated with these incentives is reflected in “Other” revenue while the associated costs are reflected in “Cost of services”.

Upfront Fees

All non-refundable upfront fees assessed to our customers provide them with a material right to renew; therefore, they are deferred by creating a contract liability and amortized into “Data and Internet service” for fees charged to our wholesale customers and “Other revenue” for fees charged to all other customers, using a portfolio approach over the average ~~term of~~customer life.

PART I. FINANCIAL INFORMATION (Continued)

FRONTIER COMMUNICATIONS PARENT, INC. AND SUBSIDIARIES

(Unaudited)

Customer Acquisition Costs

Sales commission expenses are recognized as incurred. According to ASC 606, incremental costs in obtaining a contract with a customer ~~relationship. We recognize~~are deferred and recorded as ~~current~~a contract asset if the period ~~expense~~of benefit is expected to be greater than one year. For our retail customers, this period of benefit has been determined to be less than one year. As such, the ~~portion of installation~~Company applies the practical expedient that allows such costs ~~that exceeds installation fee revenue.~~to be expensed as incurred.

Taxes, Surcharges and Subsidies

Frontier collects various taxes, Universal Service Fund (“USF”) surcharges (primarily federal USF), and certain other surcharges, from its customers and subsequently remits these taxes to governmental authorities. ~~Substantially all of these taxes are recorded through~~During the ~~consolidated balance sheet~~predecessor period, USF and ~~presented on a net basis in our consolidated statements of operations. We also collect Universal Service Fund (USF)~~other surcharges from customers (primarily federal USF) that we have recorded on a gross basis in our consolidated statements of operations and included within “Revenue” and “Network related expenses” of $52 million and $60 million, and $160 million and $161amounted to $83 million for the ~~three and nine~~four months ended ~~September~~April 30, ~~2017 and 2016, respectively.~~2021.

In June 2015, weFrontier accepted the ~~FCC’s~~FCC offer of support to price cap carriers under the Connect America Fund ~~(CAF)~~(“CAF”) Phase II ~~offer of support,~~program, which is a successor to and augments the USF frozen high cost support that we had been receiving pursuant to a 2011 FCC order. Upon completion of the CTF Acquisition, Frontier assumed the CAF Phase II support and related obligations that Verizon had previously accepted with regard to California and Texas. CAF Phase II funding is a programwas intended to ~~subsidize the~~provide long-term support for broadband build commitments in high cost ~~of establishing and delivering communications services to certain~~ unserved or underserved areas. We ~~are recognizing these~~recognized FCC’s CAF Phase II subsidies into revenue on a ~~straight line~~straight-line basis over the seven-year funding term which ~~is consistent with how~~ended on December 31, 2021. We have accrued an amount for any potential shortfall in the ~~costs related to these subsidies are being and are expected~~household build commitment that we deem to be ~~incurred. CAF~~probable and reasonably estimated, and we do not expect that any potential penalties, if ultimately incurred, will be material.

In May 2022, Frontier accepted the FCC offer under the Rural Digital Opportunity Fund (“RDOF”) Phase ~~II is a multi-year~~I program, which ~~requires us~~provides funding over a ten-year period to ~~deploy~~support the construction of broadband networks in rural communities across the country. Frontier accepted $37 million in annual support through 2032 in return for our commitment to make broadband available to households within the RDOF eligible areas. We will recognize the FCC’s RDOF Phase I subsidies into revenue on a ~~specified number of households in each of~~straight-line basis over the ~~states where~~ten-year funding ~~was accepted. Failure~~term which will end March 31, 2032. We are required to ~~meet our~~complete the RDOF deployment ~~obligations at~~by December 31, 2028. Thereafter, the ~~end of~~FCC will review carriers’ RDOF program completion data, and if the ~~program in 2020 would result in a~~FCC determines that the Company did not satisfy applicable FCC RDOF requirements, Frontier could be required to return of a portion of the funds previously received and may be subject to certain other requirements and obligations. We will accrue an amount for any potential shortfall in the household build commitment that we deem to be probable and reasonably estimated.

d)Cash Equivalents:

We consider all highly liquid investments with an original maturity of three months or less to be cash equivalents. We had restricted cash of $30 million included in “Other assets” on our consolidated balance sheet as of September 30, 2022, and restricted cash of $17 million included in “Other current assets” and $34 million included in “Other assets” as of December 31, 2021.

e) Short-Term Investments:

Given the long-term nature of our fiber build, we have invested cash into short-term investments to improve interest income while preserving funding ~~received. We regularly evaluate our ability~~flexibility.

As of September 30, 2022, short-term investments of $2,325 million are comprised of term deposits earning interest in excess of traditional bank deposit rates, maturing between October 26, 2022, and March 14, 2023, and placed with banks with A-1/P-1 or equivalent credit quality. These short-term investments are in scope of ASC 320, Investments - Debt Securities. The short-term investments’ original maturity is greater than 90 days but less than one year, and they are classified as held to ~~meet our broadband deployment obligations~~maturity, recorded as current assets, and ~~adjust revenue accordingly.~~are accounted for at amortized cost.

~~We categorize our products, services and other revenues among the following five categories:~~

~~Data and Internet services~~ include broadband services for consumer and commercial customers. We provide data transmission services to high volume commercial customers and other carriers with dedicated high capacity circuits (“nonswitched access”) including services to wireless providers (“wireless backhaul”);

~~Voice services~~ include traditional local and long distance wireline services, Voice over Internet Protocol (VoIP) services, as well as a number of unified messaging services offered to our consumer and commercial customers. Voice services also include the long distance voice origination and termination services that we provide to our commercial customers and other carriers;

~~Video services~~ ~~include services provided directly to consumer customers through the FiOS~~® ~~and Vantage video brands, and through DISH~~® ~~satellite TV services;~~

~~Other~~ ~~includes sales of customer premise equipment to our commercial customers and directory services, less our provision for bad debts; and~~

~~Switched Access and Subsidy~~ revenues include revenues derived from allowing other carriers to use our network to originate and/or terminate their local and long distance voice traffic (“switched access”). These services are primarily billed on a minutes-of-use basis applying tariffed rates filed with the FCC or state agencies. We also receive cost subsidies from state and federal authorities, including the Connect America Fund Phase II.

PART I. FINANCIAL INFORMATION (Continued)

FRONTIER COMMUNICATIONS CORPORATIONPARENT, INC. AND SUBSIDIARIES

(Unaudited)

~~NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)~~

f)Definite and Indefinite Lived Intangible Assets:

~~The following table provides a summary of revenues from external customers by the categories of Frontier’s products~~Intangible assets are initially recorded at estimated fair value. Old Frontier historically amortized its acquired customer lists and ~~services:~~

For the three months ended

For the nine months ended

September 30,

September 30,

($ in millions)

2017

2016

2017

2016

Data and Internet services

$
956

$
1,045

$
2,923

$
2,680

Voice services

702

809

2,177

2,112

Video services

318

392

994

879

Other

84

73

231

218

Customer revenue

2,060

2,319

6,325

5,889

Switched access and subsidy

191

205

586

598

Total revenue

$
2,251

$
2,524

$
6,911

$
6,487

~~(c)Goodwill and Other Intangibles~~:

Goodwill represents the excess of purchase price over the fair value of identifiable tangible and intangible net assets acquired in a business combination. We have undertaken studies to determine the fair values of assets and liabilities acquired as well as to allocate the purchase price to assets and liabilities, including property, plant and equipment, goodwill andcertain other identifiable intangibles. We examine the carrying value of our goodwill and trade name annually as of December 31, or more frequently as circumstances warrant, to determine whether there are any impairment losses. We test for goodwill impairment at the “operating segment” level, as that term is defined in GAAP.

We determined that we have one operating segment based on a number of factors that our management uses to evaluate and run our business operations, including similarities of customers, products and technology. We tested goodwill for impairment as of September 30, 2017 as a result of the continued decline in share price of our common stock since June 30, 2017, the date of our last goodwill impairment test. Refer to Note 6 for a discussion of our goodwill impairment testing and results as of September 30, 2017. As stated in Note 2, we early adopted ASU No. 2017-04, “Simplifying the Test for Goodwill Impairment” during the second quarter of 2017 in conjunction with our goodwill impairment assessment.

~~Frontier amortizes~~ finite-lived intangible assets over their estimated useful lives on ~~the~~an accelerated ~~method~~basis. Upon emergence from bankruptcy, customer relationship intangibles were established for business and wholesale customers. These intangibles are amortized on a straight-line basis over their assigned useful lives of ~~sum of the years digits.~~between 11 and 16 years. Additionally, trademark and tradename assets established upon emergence are amortized on a straight-line basis over 5 years. We review such intangible assets ~~at least~~ annually, asor more often if indicators of ~~December 31~~impairment arise, to ~~assess~~determine whether ~~any potential~~there is evidence that indicates an impairment ~~exists and whether factors~~condition may exist that would necessitate a change in useful life and a different amortization period.

g)Lease Accounting:

We determine if an arrangement contains a lease at inception. Right-of-use (ROU) assets represent our right to use an underlying asset for the lease term and lease liabilities represent our obligation to make lease payments arising from the lease. Operating and Finance lease ROU assets and liabilities are recognized at commencement date based on the present value of lease payments over the lease term. As most of our leases do not provide an implicit rate, we use our incremental borrowing rate based on the information available at commencement date in determining the present value of lease payments. The operating and finance lease ROU asset also includes any lease payments made and excludes lease incentives. Our lease terms used in accounting for leases may reflect options to extend or terminate the lease when it is reasonably certain that we will exercise that option. Lease expense for operating leases is recognized on a straight-line basis over the lease term. ROU assets for operating leases are recorded to “Other Assets”, and the related liabilities recorded to “Other current liabilities”, and “Other liabilities” on our consolidated balance sheets. Assets subject to finance leases are included in “Property, Plant & Equipment”, with corresponding liabilities recorded to “Other current liabilities”, and “Other liabilities” on our consolidated balance sheets.

We assess potential impairments to our leases annually, or as indicators exist, if indicators of impairment arise to determine whether there is evidence that indicate an impairment condition may exist. We continue to review our real estate portfolio and, during the first quarter of 2022, determined to either terminate or market for sublease certain facilities leases, which triggered an impairment of $44 million for our finance and operating lease assets recorded as restructuring charges and other costs. See Note 9 for further details.

(2) Recent Accounting ~~Literature~~:Literature:

Recent Accounting Pronouncements Not Yet Adopted

~~Revenue Recognition~~Reference Rate Reform

In ~~May 2014,~~March 2020, the FASB issued ASU 2020-04, "Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial ~~Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) No. 2014-09, “Revenue from Contracts with Customers.”~~Reporting". This standard ~~along with its~~provides optional expedients, and allows for certain exceptions to existing GAAP, for contract modifications triggered by the expected market transition of certain benchmark interest rates to alternative reference rates. The standard applies to contracts and other arrangements that reference the London Interbank Offering Rate (LIBOR) or any other rates ending after December 31, 2022. The adoption of this standard does not result in a material impact to our financial position or results of operations.

Government Assistance

In November 2021, the FASB issued ASU 2021-10, which requires business entities to disclose information about certain government assistance they receive. Such disclosure requirements include the nature of the transactions and the related ~~amendments, requires companies~~accounting policy used, the line items on the balance sheet and income statement that are affected and the amounts applicable to recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which they expect to be entitled in exchange for those goods or services. This new standard will be adopted by Frontier for annualeach financial statement line item and ~~interim reporting periods beginning with the first quarter of 2018.~~ significant terms and

The FASB allows two adoption methods under ASC 606. Companies are permitted to either apply the requirements retrospectively to all prior periods presented, or apply the requirements in the year of adoption, through a cumulative adjustment. We currently plan to adopt the standard in the first quarter of 2018, using the

PART I. FINANCIAL INFORMATION (Continued)

FRONTIER COMMUNICATIONS CORPORATIONPARENT, INC. AND SUBSIDIARIES

(Unaudited)

~~NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)~~

“modified retrospective method.” Under that method, we will apply the rules to all contracts existing as of January 1, 2018, recognizing, in beginning retained earnings, a cumulative-effect adjustment to include the establishment of contract asset and contract liability accounts with a corresponding adjustment to retained earnings. We will also provide additional disclosures comparing revenue recognized under ASC 606 to revenue as reported prior to the adoptionconditions of the ~~standard.~~

Upon initial evaluation, we believe the key changes in the standard that impact our revenue recognition relate to the allocation of contract revenues among various services and equipment, and the timing of when those revenues are recognized. Additionally, the new standardtransactions. ASU 2021-10 will impact the timing of recognizing costs to obtain contracts. This includes a change in our existing policy related to the way we account for customer incentives, upfront non-recurring charges, commission payments, customer disputes and the allocation of discounts.

~~We are in the process of identifying and implementing changes to our systems, processes, policies and internal controls to meet the standard’s reporting and disclosure requirements.~~

~~Leases~~

~~In February 2016, the FASB issued ASU No. 2016 – 02, “Leases (Topic 842).”~~ ~~This standard establishes the principles to report transparent and economically neutral information about the assets and liabilities that arise from leases. Upon implementation, lessees will need to recognize almost all leases on their balance sheet as a right-of-use asset and a lease liability. It will~~ be critical to identify leases embedded in a contract to avoid misstating the lessee’s balance sheet. For income statement purposes, the FASB retained a dual model, requiring leases to be classified as either operating or finance. Classification will be based on criteria that are largely similar to those applied in current lease accounting, but without explicit bright lines. Lessor accounting is similar to the current model, but updated to align with certain changes to the lessee model and the new revenue recognition standard. Existing sale-leaseback guidance, including guidance for real estate, is replaced with a new model applicable to both lessees and lessors. ~~The new guidance is effective for fiscal years beginning after December 15, 2018, including interim periods within those fiscal years using modified retrospective application. Early~~ ~~application is permitted~~. ~~Frontier is in the initial stages of evaluating the potential impact this new standard may have on the consolidated financial statements.~~

~~Compensation – Retirement Benefits~~

In March 2017, the FASB issued ASU No. 2017-07, “Improving the Presentation of Net Periodic Pension Cost and Net Periodic Postretirement Benefit Cost”. This standard was established to improve the presentation of net periodic pension cost and net periodic postretirement benefit cost by requiring that an employer disaggregate the service cost component of periodic benefit cost from the other components of net benefit cost. The amendments in the update also provide explicit guidance on how to present the service cost component and other components of net benefit cost in the income statement and allow only the service cost components of net benefit cost to be eligible for capitalization. The new guidance is effective for annual periods beginning after December 15, ~~2017, including interim periods within those annual periods and requires~~2021 (year ending December 31, 2022 for the ~~presentation~~Company). The Company is currently evaluating the impact the adoption of the income statement to be applied retrospectively. As a result of the standard, pension settlement costs and certain benefit costs which are currently included in operating expense, would be reported as other non-operating expense and will no longer be capitalized. ThisASU 2021-10 will have on its disclosures.

(3) Revenue Recognition:

We categorize our products, services and other revenues into the following categories:

Data and Internet services include broadband services for consumer and business customers. We provide data transmission services to high volume business customers and other carriers with dedicated high capacity circuits (“nonswitched access”) including services to wireless providers (wireless backhaul);

Voice services include traditional local and long-distance wireline services, Voice over Internet Protocol (VoIP) services, as well as a ~~material impact~~number of unified messaging services offered to our consumer and business customers. Voice services also include the long-distance voice origination and termination services that we provide to our business customers and other carriers;

Video services include revenues generated from services provided directly to consumer customers as linear terrestrial television services, through DISH® satellite TV service, and through partnerships with over-the-top (OTT) video providers. Video services also includes pay per view revenues, video on ~~previously reported operating income~~demand, equipment rentals, and ~~may have~~video advertising. The Company has made the strategic decision to limit sales of new traditional TV services, focusing on our broadband products and OTT video options;

Other customer revenue includes switched access revenue, rents collected for colocation services, and revenue from other services and fees. Switched access revenue includes revenues derived from allowing other carriers to use our network to originate and/or terminate their local and long-distance voice traffic. These services are primarily billed on a ~~material impact to operating income in future periods, however,~~minutes-of-use basis applying tariffed rates filed with the ~~impact to pre-tax income is not expected to be material.~~FCC or state agencies; and

Subsidy and other regulatory revenue include revenues generated from cost subsidies from state and federal authorities, including CAF II and RDOF.

‎

1013

PART I. FINANCIAL INFORMATION (Continued)

FRONTIER COMMUNICATIONS CORPORATIONPARENT, INC. AND SUBSIDIARIES

(Unaudited)

~~NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)~~

The following tables provide a summary of revenues, by category:


	Successor
	For the three months ended September 30,		For the three months ended September 30,
($ in millions)	2022		2021

Data and Internet services	$	848	$	834
Voice services		369		411
Video services		127		149
Other		82		99
Revenue from contracts with customers ⁽¹⁾		1,426		1,493
Subsidy and other revenue ⁽²⁾		18		83
Total revenue	$	1,444	$	1,576

	Successor
	For the three months ended September 30,		For the three months ended September 30,
($ in millions)	2022		2021

Consumer	$	785	$	800
Business and wholesale		641		693
Revenue from contracts with customers ⁽¹⁾		1,426		1,493
Subsidy and other revenue ⁽²⁾		18		83
Total revenue	$	1,444	$	1,576

~~Recently Adopted Accounting Pronouncements~~


	Successor				Predecessor
	For the nine months ended September 30,		For the five months ended September 30,		For the four months ended April 30,
($ in millions)	2022		2021		2021

Data and Internet services	$	2,531	$	1,390	$	1,125
Voice services		1,136		694		647
Video services		398		254		223
Other		245		161		125
Revenue from contracts with customers ⁽¹⁾		4,310		2,499		2,120
Subsidy and other revenue ⁽²⁾		40		138		111
Total revenue	$	4,350	$	2,637	$	2,231

	Successor				Predecessor
	For the nine months ended September 30,		For the five months ended September 30,		For the four months ended April 30,
($ in millions)	2022		2021		2021

Consumer	$	2,352	$	1,343	$	1,133
Business and wholesale		1,958		1,156		987
Revenue from contracts with customers ⁽¹⁾		4,310		2,499		2,120
Subsidy and other revenue ⁽²⁾		40		138		111
Total revenue	$	4,350	$	2,637	$	2,231

~~Share-Based Payments - Scope~~

⁽¹⁾Includes lease revenue of ~~Modification Accounting~~

In May 2017, the FASB issued ASU No. 2017-09, Scope of Modification Accounting which amends the scope of modification accounting for share-based payment arrangements. This standard provides guidance on the types of changes to the terms or conditions of share-based payment awards to which an entity would be required to apply modification accounting under ASC 718. Specifically, an entity would not apply modification accounting if the fair value, vesting conditions,$15 million and classification of the awards are the same immediately before and after the modification. The new guidance is effective for annual periods beginning after December 15, 2017, including interim periods within those annual periods and early adoption is permitted including in any interim period. Frontier has adopted this standard during the second quarter 2017, with no impact to our share-based payment awards.

~~Intangibles – Goodwill~~

In January 2017, the FASB issued ASU No. 2017-04, “Simplifying the Test for Goodwill Impairment.” This standard was established to simplify how an entity is required to test goodwill for impairment by eliminating Step 2from the goodwill impairment test. Step 2 measures a goodwill impairment loss by comparing the implied fair value of a reporting unit’s goodwill with the carrying amount of that goodwill. Under the amendments in this Update, an entity should perform its annual, or interim, goodwill impairment test by comparing the fair value of a reporting unit with its carrying amount. An entity should recognize an impairment charge$16 million for the amount by which the carrying amount exceeds the reporting unit’s fair value; however, the loss recognized should not exceed the total amount of goodwill allocated to that reporting unit. Additionally, an entity should consider income tax effects from any tax deductible goodwill on the carrying amount of the reporting unit when measuring the goodwill impairment loss, if applicable. The FASB also eliminated the requirementsthree months ended September 30, 2022 and 2021, respectively; and $48 million for any reporting unit with a zero or negative carrying amount to perform a qualitative assessment and, if it fails that qualitative test, to perform Step 2 of the goodwill impairment test. Therefore, the same impairment assessment applies to all reporting units. An entity is required to disclose the amount of goodwill allocated to each reporting unit with a zero or negative carrying amount of net assets. An entity still has the option to perform the qualitative assessment for a reporting unit to determine if the quantitative impairment test is necessary. Frontier early adopted this standard during the second quarter of 2017 in conjunction with our goodwill impairment assessment. See Note 1 and Note 6 for further discussion.

~~Compensation – Stock Compensation~~

In March 2016, the FASB issued ASU No. 2016-09, “Improvements to Employee Share-Based Payment Accounting,” to amend ASC Topic 718, “Compensation – Stock Compensation.” The ASU is part of the FASB’s ongoing simplification initiative, which is designed to reduce cost and complexity while maintaining or improving the usefulness of the information provided to the users of financial statements. The simplifications address a variety of areas for public entities, including the following: 1) accounting for income taxes, 2) classification of excess tax benefits on the statement of cash flows, 3) forfeitures, 4) minimum statutory tax withholding requirements, 5) classifications of employee taxes paid on the statement of cash flows when an employer withholds shares for tax withholding purposes, and 6) classification of awards with repurchase features. This guidance was effective for Frontier as of the third quarter of 2017. During the nine months ended September 30, ~~2017, Frontier recognized $2~~2022. Lease revenue was $26 million ~~of income tax expense~~for the five months ended September 30, 2021, and ~~recorded a cumulative effect adjustment to beginning accumulated deficit of $1~~$26 million ~~to recognize all unrecognized deferred tax benefits recorded as of January 1, 2017. For~~for the four months ended April 30, 2021.

⁽²⁾Subsidy and other revenue for the three and nine months ended September 30, ~~2016, Frontier reclassified $10 million~~2022, does not include revenue from CAF II as the program ended in 2021. We began to receive funding for RDOF in the second quarter of taxes paid on behalf of employees related to shares withheld from “Cash flows provided from (used by) operations” to “Cash flows used by financing activities” in accordance with the new standard. 2022.

PART I. FINANCIAL INFORMATION (Continued)

FRONTIER COMMUNICATIONS CORPORATIONPARENT, INC. AND SUBSIDIARIES

(Unaudited)

~~NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)~~

~~(3)~~ ~~Acquisitions~~:

The ~~CTF Acquisition~~

~~On April 1, 2016, Frontier acquired the wireline operations of Verizon Communications, Inc. in California, Texas and Florida (the CTF Operations) for~~following is a ~~purchase price of $10,540 million in cash and assumed debt (the CTF Acquisition), pursuant to the February 5, 2015 Securities Purchase Agreement, as~~ ~~amended.~~ ~~The final allocation~~summary of the ~~purchase price presented below represents~~changes in the ~~effect~~contract assets and contract liabilities:


	Contract Assets				Contract Liabilities
($ in millions)	Current		Noncurrent		Current		Noncurrent

Balance at December 31, 2021 (Successor)	$	-	$	-	$	27	$	11
Revenue recognized included
in opening contract balance		-		-		(21)		(8)
Credits granted, excluding amounts
recognized as revenue		-		-		17		17
Reclassified between current
and noncurrent		-		-		4		(4)
Balance at September 30, 2022 (Successor)	$	-	$	-	$	27	$	16


	Contract Assets				Contract Liabilities
($ in millions)	Current		Noncurrent		Current		Noncurrent

Balance at December 31, 2020 (Predecessor)	$	6	$	9	$	58	$	20
Revenue recognized included
in opening contract balance		(4)		-		(23)		(3)
Cash received, excluding amounts
recognized as revenue		-		-		22		2
Balance at April 30, 2021 (Predecessor)	$	2	$	9	$	57	$	19
Fresh start accounting adjustments		(2)		(9)		(42)		(18)
Balance at April 30, 2021 (Predecessor)	$	-	$	-	$	15	$	1


Balance at April 30, 2021 (Successor)	$	-	$	-	$	15	$	1
Revenue recognized included
in opening contract balance		-		-		(13)		(1)
Cash received, excluding amounts
recognized as revenue		-		-		17		9
Reclassified between current
and noncurrent		-		-		1		(1)
Balance at September 30, 2021 (Successor)	$	-	$	-	$	20	$	8

The unsatisfied obligations for retail customers consist of ~~recording~~amounts in advance billings, which are expected to be earned within the ~~fair value of assets acquired and liabilities assumed as of the date of the CTF Acquisition,~~following monthly billing cycle. Unsatisfied obligations for wholesale customers are based on a point-in-time calculation and determined by the ~~total transaction cash consideration~~number of ~~$9,871 million.~~circuits provided and the contractual price. These wholesale customer obligations change from period to period based on new circuits added as well as circuits that are terminated.



~~($ in millions)~~

~~Current assets~~	$	~~353~~
~~Property, plant & equipment~~		~~6,096~~
~~Goodwill~~		~~2,606~~
~~Other intangibles - primarily customer list~~		~~2,262~~
~~Current liabilities~~		~~(579)~~
~~Long-term debt~~		~~(544)~~
~~Other liabilities~~		~~(323)~~
~~Total net assets acquired~~	$	~~9,871~~

The fair value estimates related to the allocation of the purchase price to Other intangibles were revised and updated during the first quarter of 2017 from the previous estimates as of December 31, 2016. The allocation that was reported as of December 31, 2016 for Other intangibles increased $100 million, from $2,162 million to $2,262 million. These measurement period adjustments resulted in $20 million of amortization expense during the first quarter of 2017 that would have been recorded in 2016 if the adjustments had been recognized as of the acquisition date. Other adjustments to the allocation of the purchase price for the CTF Acquisition during the first quarter of 2017 resulted in a $140 million decrease in Property, plant & equipment, a $61 million increase in Current liabilities, and a $98 million increase in Goodwill.
‎

The total consideration exceeded the net estimated fair value of the assets acquired and liabilities assumed by $2,606 million, which we recognized as goodwill. This goodwill is attributable to strategic benefits, including enhanced financial and operational scale, market diversification and leveraged combined networks that we expect to realize. This amount of goodwill associated with the CTF Acquisition will be deductible for income tax purposes.

PART I. FINANCIAL INFORMATION (Continued)

FRONTIER COMMUNICATIONS CORPORATIONPARENT, INC. AND SUBSIDIARIES

(Unaudited)

~~NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)~~

The following unaudited pro forma financial information presents the combined results of operations of Frontier and the CTF Operations as if the CTF Acquisition had occurred as of January 1, 2016. The pro forma information is not necessarily indicative of what the financial position or results of operations actually would have been had the CTF Acquisition been completed as of January 1, 2016. In addition, the unaudited pro forma financial information is not indicative of, nor does it purporttable includes estimated revenue expected to ~~project,~~be recognized in the future ~~financial position or operating results of Frontier. The unaudited pro forma financial information excludes acquisition and integration costs and does not give effect~~related to ~~any estimated and potential cost savings or other operating efficiencies that may result from the CTF Acquisition~~.




	~~(Unaudited)~~
	~~For the nine months ended~~
~~($ in millions, except per share amounts)~~	~~September 30, 2016~~

~~Revenue~~		$	~~7,846~~

~~Operating income~~		$	~~1,129~~

~~Net loss attributable to Frontier common shareholders~~		$	~~(164)~~

~~Basic and diluted net loss per share attributable~~
~~to Frontier common shareholders~~		$	~~(2.10)~~

~~Acquisition and Integration Costs~~

~~Acquisition costs include financial advisory, accounting, regulatory, legal and other related costs. Integration costs include expenses~~performance obligations that are ~~incremental and directly related to~~unsatisfied at the ~~acquisition, which were incurred to integrate~~end of the ~~network and information technology platforms. Integration costs also include costs to achieve synergies and operational efficiencies directly associated with the acquisition.~~ reporting period:

~~Frontier incurred operating expenses related to the CTF Acquisition as follows~~:


($ in millions)	Revenue from contracts with customers
2022 (remaining three months)	$	320
2023		410
2024		273
2025		137
2026		80
Thereafter		87
Total	$	1,307

For the three months ended September 30,

For the nine months ended September 30,
($ in millions)

2017

2016

2017

2016

Acquisition costs

$
-

$
-

$
-

$
23
Integration costs

1

122

15

364
Total acquisition and

integration costs

$
1

$
122

$
15

$
387

~~We also invested $19 million and $99 million in capital expenditures related to the CTF Acquisition during the nine months ended September 30, 2017 and 2016, respectively.~~

~~PART I. FINANCIAL INFORMATION (Continued)~~

~~FRONTIER COMMUNICATIONS CORPORATION AND SUBSIDIARIES~~

~~NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)~~

~~(4)~~(4) Accounts Receivable:

The components of accounts receivable, net are as follows:

($ in millions)

September 30, 2017

December 31, 2016

Retail and wholesale

$
768

$
979
Other

81

90
Less: Allowance for doubtful accounts

(69)

(131)
Accounts receivable, net

$
780

$
938



($ in millions)	September 30, 2022		December 31, 2021
Retail and wholesale	$	403	$	441
Other		66		74
Less: Allowance for doubtful accounts		(47)		(57)
Accounts receivable, net	$	422	$	458

We maintain an allowance for ~~doubtful accounts~~credit losses based on ~~our estimate of our~~the estimated ability to collect accounts receivable. ~~During 2017, we resolved settlements with carriers resulting in a reduction to our reserves of approximately $35 million. Bad debt~~The allowance for credit losses is increased by recording an expense ~~which is recorded as a reduction~~for the provision for bad debts for retail customers, and through decreases to revenue at the time of billing for wholesale customers. The allowance is decreased when customer accounts are written off, or when customers are given credits.

The provision for bad debts was $5 million and $10 million for the three months ended September 30, 2022 and 2021, respectively; and $19 million for the nine months ended September 30, 2022. The provision for bad debts was $16 million for the five months ended September 30, 2021, and $14 million for the four months ended April 30, 2021.

In accordance with ASC 326, Frontier performs its calculation to estimate expected credit losses, utilizing rates that are consistent with the Company’s write offs (net of recoveries) because such events affect the entity’s loss given default experience.

Activity in the allowance for credit losses for the nine months ended September 30, 2022 was as ~~follows~~:follows:


($ in millions)
Balance at December 31, 2021	$	57
Provision for bad debt		19
Amounts charged to revenue		26
Write offs charged against the allowance		(55)
Balance at September 30, 2022	$	47

For the three months ended September 30,

For the nine months ended September 30,
($ in millions)

2017

2016

2017

2016

Bad debt expense

$
26

$
56

$
83

$
104

‎

PART I. FINANCIAL INFORMATION (Continued)

FRONTIER COMMUNICATIONS PARENT, INC. AND SUBSIDIARIES

(Unaudited)

(5) Property, Plant and Equipment:

Property, plant and equipment, net is as follows:

($ in millions)

September 30, 2017

December 31, 2016

Property, plant and equipment

$
26,124

$
25,541
Less: Accumulated depreciation

(11,749)

(10,639)
Property, plant and equipment, net

$
14,375

$
14,902



($ in millions)	September 30, 2022		December 31, 2021
Property, plant and equipment	$	11,948	$	9,707
Less: Accumulated depreciation		(1,101)		(508)
Property, plant and equipment, net	$	10,847	$	9,199

Depreciation expense is principally based on the composite group method. Depreciation expense was as follows:

For the three months ended September 30,

For the nine months ended September 30,
($ in millions)

2017

2016

2017

2016

Depreciation expense

$
376

$
323

$
1,131

$
1,009


	For the three months ended September 30,		For the three months ended September 30,
($ in millions)	2022		2021

Depreciation expense	$	215	$	191

	Successor				Predecessor
	For the nine months ended September 30,		For the five months ended September 30,		For the four months ended April 30,
($ in millions)	2022		2021		2021

Depreciation expense	$	629	$	318	$	407

~~We adopted new estimated remaining useful lives for certain plant assets as of October 1, 2016, as~~As a result of ~~an annual independent study of~~applying fresh start accounting on the ~~estimated remaining useful lives of our plant~~Effective Date, Frontier’s fixed assets ~~with an insignificant impact~~were reduced from $13.0 billion to ~~depreciation expense.~~

In 2017, we sold certain properties, generating $102 million in net proceeds, of which $97 million relates to property subject to leasebacks. For these properties, we have deferred $66 million in related gains that will be amortized over the related lease terms of two years.$8.5 billion. For the nine months ended September 30, ~~2017, amortization~~2022, the decrease in depreciation expense was principally a result of ~~these deferred gains totaled $14~~the reduced asset base following this fresh start fair value adjustment. In July 2022, we sold a property that was subject to leaseback, generating approximately $70 million ~~which are included~~ in ~~“Selling, general and administrative expenses” on our consolidated income statement. We have remaining deferred gain balances of $52 million, which are included in “Other liabilities”.~~ proceeds.

~~PART I. FINANCIAL INFORMATION (Continued)~~

~~FRONTIER COMMUNICATIONS CORPORATION AND SUBSIDIARIES~~

~~NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)~~

~~(6)~~ ~~Goodwill and Other Intangibles~~:

~~The activity in goodwill from January 1, 2017 to~~During the nine months ended September 30, ~~2017 was as follows~~:



~~($ in millions)~~

~~Balance at January 1, 2017~~	$	~~9,674~~
~~CTF Acquisition adjustments~~		98
~~Impairment~~		~~(670)~~
~~Balance at September 30, 2017~~	$	~~9,102~~

~~We are required to perform impairment tests related to~~2022, our ~~goodwill annually, which we perform as of December 31, or sooner if an indicator of impairment occurs. Due to the continued decline in our stock price~~capital expenditures were $1,860 million. In addition, we had ~~triggering events in each~~$431 million of ~~the three quarters in 2017.~~

We use a market multiples approach to determine fair value. Marketplace company comparisons and analyst reports within the telecommunications industry have historically supported a range of fair values of multiples between 5.0x and 7.9x annualized EBITDA (defined as operating income, net of acquisition and integration costs, pension/OPEB expense, pension settlement costs, stock-based compensation expense, goodwill impairment, storm-related costs, and restructuring costs and other charges, as well as depreciation and amortization). We estimated the enterprise fair value using a multiple of 5.8x EBITDA.

~~Our second quarter quantitative assessment indicated~~capital expenditures that the carrying value of the enterprise exceeded its fair value and, therefore, an impairment existed, principally due to the decline in our profitability during the second quarter of 2017. We elected to early adopt the simplified goodwill method under ASU 2017-04, and recorded our goodwill impairment based on the amount that the enterprise carrying value exceeded the fair value, which resulted in a goodwill impairment of $670 million.

~~Our first and third quarter quantitative assessments indicated that the fair value of the enterprise exceeded its carrying value and, therefore, no indication of impairment existed in either period.~~

The market multiples approach that we use incorporates significant estimates and assumptions related to the forecasted results for the remainder of the year including revenues, expenses, and the achievement of other cost synergies. Our assessment includes many qualitative factors that require significant judgment. Alternative interpretations of these factors could have resulted in different conclusions regarding the need for, or size of, an impairment. Continued declines in our profitability or cash flows or in the sustained, historically low trading prices of our common stock may result in further impairment.

~~We also considered whether the carrying values of finite-lived intangible assets and property plant and equipment may~~were received but not ~~be recoverable or whether the carrying value of certain indefinite-lived intangible assets were impaired, noting no additional impairment was present~~paid as of September 30, ~~2017.~~2022.

~~PART I. FINANCIAL INFORMATION (Continued)~~(6) Other Intangibles:

~~FRONTIER COMMUNICATIONS CORPORATION AND SUBSIDIARIES~~

~~NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)~~

The components of other intangibles ~~are~~as of September 30, 2022 and December 31, 2021 was as follows:



	September 30, 2022						December 31, 2021
	Gross Carrying		Accumulated		Net Carrying		Gross Carrying		Accumulated		Net Carrying
($ in millions)	Amount		Amortization		Amount		Amount		Amortization		Amount

Intangibles:
Customer Relationships - Business	$	800	$	(103)	$	697	$	800	$	(48)	$	752
Customer Relationships - Wholesale		3,491		(309)		3,182		3,491		(146)		3,345
Trademarks & Tradenames		150		(43)		107		150		(20)		130
Total other intangibles	$	4,441	$	(455)	$	3,986	$	4,441	$	(214)	$	4,227

September 30, 2017

December 31, 2016

Gross Carrying

Accumulated

Net Carrying

Gross Carrying

Accumulated

Net Carrying
($ in millions)

Amount

Amortization

Amount

Amount

Amortization

Amount

Other Intangibles:

Customer base

$
5,188

$
(3,137)

$
2,051

$
5,088

$
(2,604)

$
2,484
Trade name

122

-

122

122

-

122
Royalty agreement

72

(22)

50

72

(16)

56
Total other intangibles

$
5,382

$
(3,159)

$
2,223

$
5,282

$
(2,620)

$
2,662

PART I. FINANCIAL INFORMATION (Continued)

FRONTIER COMMUNICATIONS PARENT, INC. AND SUBSIDIARIES

(Unaudited)

Amortization expense was as follows:


	For the three months ended September 30,		For the three months ended September 30,
($ in millions)	2022		2021

Amortization expense	$	81	$	82


	Successor				Predecessor
	For the nine months ended September 30,		For the five months ended September 30,		For the four months ended April 30,
($ in millions)	2022		2021		2021

Amortization expense	$	241	$	134	$	99

Following the Effective Date, we amortize our intangible assets on a straight-line basis, over the assigned useful lives of 16 years for our wholesale customer relationships, 11 years for our business customer relationships, and 5 years for our trademarks and tradenames.

For the three months ended September 30,

For the nine months ended September 30,
($ in millions)

2017

2016

2017

2016

Amortization expense

$
163

$
255

$
539

$
460

~~Amortization~~For the Predecessor, amortization expense was primarily ~~represents the amortization of~~for our customer base acquired as a result of ~~the CTF Acquisition, the acquisition of AT&T wireline properties~~our acquisitions in ~~Connecticut in~~2010, 2014, and ~~the acquisition of certain Verizon properties in 2010~~2016 with each based on a useful life of 8 to 12 years and amortized on an accelerated method. Our trade name was an indefinite-lived intangible asset that was not subject to amortization.

(7) Fair Value of Financial Instruments:

The following table summarizes the carrying amounts and estimated fair values for total long-term debt at September 30, ~~2017~~2022 and December 31, ~~2016.~~2021. For the other financial instruments including cash, short-term investments, accounts receivable, ~~long-term debt due within one year,~~restricted cash, accounts payable and other current liabilities, the carrying amounts approximate fair value due to the relatively short maturities of those instruments.

The fair value of our total long-term debt is estimated based upon quoted market prices at the reporting date for those financial instruments.



	September 30, 2022				December 31, 2021

($ in millions)		Carrying Amount		Fair Value		Carrying Amount		Fair Value

Total debt	$	8,966	$	8,015	$	7,777	$	7,996

September 30, 2017

December 31, 2016

($ in millions)

Carrying Amount

Fair Value

Carrying Amount

Fair Value

Long-term debt

$
17,604

$
15,515

$
17,560

$
17,539

(

~~(8)~~

PART I. FINANCIAL INFORMATION (Continued)

FRONTIER COMMUNICATIONS CORPORATIONPARENT, INC. AND SUBSIDIARIES

(Unaudited)

~~NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)~~

(8) Long-Term Debt:

Chapter 11 Restructuring

The filing of the Chapter 11 Cases constituted an event of default that accelerated substantially all then-outstanding obligations under Old Frontier’s debt agreements and notes as follows:

the amended and restated credit agreement, dated as of February 27, 2017 (as amended, the JPM Credit Agreement),

the 8.000% first lien secured notes due April 1, 2027 (the Original First Lien Notes),

the 8.500% second lien secured notes due April 1, 2026 (the Original Second Lien Notes), and

the unsecured notes and debentures and the secured and unsecured debentures of the Company’s subsidiaries.

As of the Effective Date, amounts that were outstanding under the JPM Credit Agreement, the Original First Lien Notes, and the Original Second Lien Notes were repaid in full.

On the Effective Date, pursuant to the terms of the Plan, all of the obligations under Old Frontier’s unsecured senior note indentures were cancelled, and in connection with emergence, Frontier issued 244,401,000 shares of common stock that were transferred to holders of the allowed senior notes claims (as defined under the Plan).

Interest expense for the one and four months ended April 30, 2021 recorded on our Predecessor statements of income was lower than contractual interest of $112 million and $450 million, respectively, because we ceased accruing interest on the Petition Date in accordance with the terms of the Plan and ASC Topic 852.

The activity in our long-term debt ~~from January 1, 2017 through September 30, 2017~~ is summarized as follows:



			For the nine months ended September 30, 2022
			Principal
	January 1,		Payments		New		September 30,
($ in millions)	2022		and Retirements		Borrowings		2022

Secured debt issued by Frontier	$	6,927	$	(11)	$	1,200	$	8,116
Secured debt issued by subsidiaries		100		-		-		100
Unsecured debt issued by subsidiaries		750		-		-		750
Principal outstanding	$	7,777	$	(11)	$	1,200	$	8,966

Less: Debt Issuance Costs		(13)						(29)
Less: Current Portion		(15)						(15)
Plus: Unamortized fair value adjustments ⁽¹⁾		219						198
Total Long-term debt	$	7,968					$	9,120

Nine months ended September 30, 2017









($ in millions)

January 1, 2017

Payments and Retirements

New Borrowings

September 30, 2017

Interest Rate at
September 30, 2017*











Senior and Subsidiary Unsecured Debt

$
15,900

$
(1,544)

$
-

$
14,356

9.22%
Senior Secured Debt

2,151

(114)

1,500

3,537

4.90%
Secured Subsidiary Debt

100

-

-

100

8.50%
Other Secured Debt

19


(3)

-


16

5.25%
Rural Utilities Service Loan Contracts

8

(1)

-

7

6.15%
Total Long-Term Debt

$
18,178

$
(1,662)

$
1,500

$
18,016

8.36%











  Less: Debt Issuance Costs

(209)




(190)

  Less: Debt Premium/(Discount)

(46)

(56)

  Less: Current Portion

(363)




(166)

$
17,560



$
17,604

* Interest rate includes amortization(1)Upon emergence, we adjusted the carrying value of our debt to fair value. The adjustment consisted of the elimination of the existing unamortized debt issuance costs and ~~debt premiums or discounts.~~unamortized discounts and recording a balance of $236 million as a fair value adjustment. The fair value accounting adjustment is being amortized into interest ~~rates at September 30, 2017 represent a weighted average of multiple issuances.~~expense using the effective interest method.

‎

PART I. FINANCIAL INFORMATION (Continued)

FRONTIER COMMUNICATIONS CORPORATIONPARENT, INC. AND SUBSIDIARIES

(Unaudited)

~~NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)~~

Additional information regarding our ~~senior~~secured and unsecured total long-term debt ~~senior secured debt~~as of September 30, 2022 and ~~subsidiary debt~~December 31, 2021 is as follows:

September 30, 2017

December 31, 2016

Principal

Interest

Principal

Interest
($ in millions)

Outstanding

Rate

Outstanding

Rate

Senior Unsecured Debt Due:

4/15/2017

$
-

8.250%

$
210

8.250%
10/1/2018

578

8.125%

583

8.125%
3/15/2019

428

7.125%

434

7.125%
4/15/2020

619

8.500%

1,169

8.500%
9/15/2020

303

8.875%

1,066

8.875%
7/1/2021

490

9.250%

500

9.250%
9/15/2021

775

6.250%

775

6.250%
4/15/2022

500

8.750%

500

8.750%
9/15/2022

2,188

10.500%

2,188

10.500%
1/15/2023

850

7.125%

850

7.125%
4/15/2024

750

7.625%

750

7.625%
1/15/2025

775

6.875%

775

6.875%
9/15/2025

3,600

11.000%

3,600

11.000%
11/1/2025

138

7.000%

138

7.000%
8/15/2026

2

6.800%

2

6.800%
1/15/2027

346

7.875%

346

7.875%
8/15/2031

945

9.000%

945

9.000%
10/1/2034

1

7.680%

1

7.680%
7/1/2035

125

7.450%

125

7.450%
10/1/2046

193

7.050%

193

7.050%

13,606

15,150

Senior Secured Debt Due:

10/24/2019 (1)

254

5.115% (Variable)

280

4.145% (Variable)
3/31/2021 (2)

1,503

3.990% (Variable)

1,564

3.270% (Variable)
10/12/2021 (3)

284

5.115% (Variable)

307

4.145% (Variable)
6/15/2024 (4)

1,496

4.990% (Variable)

-

3,537

2,151

Subsidiary Debt Due:

05/15/2027

200

6.750%

200

6.750%
02/01/2028

300

6.860%

300

6.860%
2/15/2028

200

6.730%

200

6.730%
10/15/2029

50

8.400%

50

8.400%
11/15/2031

100

8.500%

100

8.500%

850

850

Total

$
17,993

8.1% (5)

$
18,151

8.3% (5)


	September 30, 2022			December 31, 2021
	Principal		Interest	Principal		Interest
($ in millions)	Outstanding		Rate	Outstanding		Rate

Secured debt issued by Frontier
Term loan due 10/8/2027	$	1,453	6.063% (Variable)	$	1,464	4.500% (Variable)
First lien notes due 10/15/2027		1,150	5.875%		1,150	5.875%
First lien notes due 5/1/2028		1,550	5.000%		1,550	5.000%
First lien notes due 5/15/2030		1,200	8.750%		-	n/a
Second lien notes due 5/1/2029		1,000	6.750%		1,000	6.750%
Second lien notes due 11/1/2029		750	5.875%		750	5.875%
Second lien notes due 1/15/2030		1,000	6.000%		1,000	6.000%
IDRB due 5/1/2030		13	6.200%		13	6.200%
Total secured debt issued by Frontier		8,116			6,927

Secured debt issued by subsidiaries
Debentures due 11/15/2031		100	8.500%		100	8.500%
Total secured debt issued by subsidiaries		100			100

Unsecured debt issued by subsidiaries
Debentures due 5/15/2027		200	6.750%		200	6.750%
Debentures due 2/1/2028		300	6.860%		300	6.860%
Debentures due 2/15/2028		200	6.730%		200	6.730%
Debentures due 10/15/2029		50	8.400%		50	8.400%
Total unsecured debt issued by subsidiaries		750			750

Principal outstanding	$	8,966	6.366% ⁽¹⁾	$	7,777	5.702% ⁽¹⁾

(1) ~~Represents borrowings under the 2014 CoBank Credit Agreement, as defined below.~~

~~(2)~~ ~~Represents borrowings under the JPM Credit Agreement Term Loan A, as defined below.~~

~~(3)~~ ~~Represents borrowings under the 2016 CoBank Credit Agreement, as defined below.~~

~~(4)~~ ~~Represents borrowings under the JPM Credit Agreement Term Loan B, as defined below.~~

~~(5)~~Interest rate represents a weighted average of the stated interest rates of multiple issuances.

Credit Facilities and Term Loans

Summaries of our various credit and debt agreements, including our credit agreements and the indentures for our senior secured first lien notes and senior secured second lien notes, are contained in our Annual Report on Form 10-K. The summaries below and in our Form 10-K do not purport to be complete and are qualified in their entirety by reference to the respective agreements filed as an Exhibit to our Annual Report on Form 10-K.

First Lien Notes due 2030

On May 12, 2022, our consolidated subsidiary Frontier Communications Holdings, LLC (“Frontier Holdings”) issued $1.2 billion aggregate principal amount of 8.750% First Lien Secured Notes due 2030 (the “First Lien Notes due 2030”) in an offering pursuant to exemptions from the registration requirements of the Securities Act. We intend to use the net proceeds of this offering to fund capital investments and operating costs arising from our fiber build and expansion of our fiber customer base, and for general corporate purposes.

The First Lien Notes due 2030 are secured by a first-priority lien, subject to permitted liens, by all the assets that secure the issuer’s obligations under its senior secured credit facilities and existing senior secured notes. The First Lien Notes due 2030 were issued pursuant to an indenture, dated as of May 12, 2022, by and among

1820

PART I. FINANCIAL INFORMATION (Continued)

FRONTIER COMMUNICATIONS CORPORATIONPARENT, INC. AND SUBSIDIARIES

(Unaudited)

~~NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)~~

~~In September 2017,~~ Frontier ~~used proceeds from Term Loan B (see definition~~Holdings, the guarantors party thereto, the grantor party thereto, Wilmington Trust, National Association, as trustee and note discussion below) to retire $24 million of 8.500% Notes due 2020, $10 million of 9.250% Notes due 2021, $6 million of 7.125% Notes due 2019, and $5 million of 8.125% Notes due 2018. Frontier recorded a gain of $1 million driven primarily by discounts on the retirement of the notes. On April 17, 2017, Frontier used cash available on hand to retire $210 million of 8.25% Senior Notes that matured on such date.

In June 2017, Frontier used cash proceeds from Term Loan B (see definition and note discussion below) to retire $763 million of 8.875% Notes due 2020 and $527 million of 8.500% Notes due 2020. Frontier recorded a loss on early extinguishment of debt of $90 million driven by premiums paid to retire the notes and unamortized original issuance costs.

~~On February 27, 2017, Frontier entered into a first amended and restated credit agreement with~~ JPMorgan Chase Bank, N.A., as ~~administrative agent, and~~collateral agent.

Revolving Facility

On May 12, 2022, Frontier Holdings entered into an amendment (“Amendment No. 2”) to its Revolving Facility. Amendment No. 2, among other things, increased the ~~lenders party thereto, pursuant~~Revolving Facility by an additional $275 million, to ~~which Frontier combined its~~a total of $900 million in aggregate principal amount of revolving credit ~~agreement, dated as of June 2, 2014,~~commitments, and ~~its term loan credit agreement, dated as of August 12, 2015. Under~~provided that the ~~JPM Credit Agreement, as further~~Revolving Facility be amended ~~on June 15, 2017 by Increase Joinder No.1 (as so amended, the JPM Credit Agreement), Frontier has~~to reflect Secured Overnight Financing Rate “SOFR” based interest rates (including a ~~$1,625~~customary spread adjustment).

The $900 million senior secured term loan A facility (the Term Loan A) maturing on March 31, 2021, an $850 million undrawn secured revolving credit facility maturing on February 27, 2022 (the Revolver), and $1,500 million senior secured term loan B facility (the Term Loan B) maturing on June 15, 2024. The maturities of the Term Loan A, the Revolver, and the Term Loan B, in each case if still outstanding,Revolving Facility will be ~~accelerated in~~available on a revolving basis until April 30, 2025.

At Frontier’s election, the following circumstances: (i) if, 91 days before the maturity date of any series of Senior Notes maturing in 2020, 2023 and 2024, more than $500 million in principal amount remains outstanding on such series; or (ii) if, 91 days before the maturity date of the first series of Senior Notes maturing in 2021 or 2022, more than $500 million in principal amount remains outstanding, in the aggregate, on the two series of Senior Notes maturing in such year. The determination of interest rates for ~~each of~~ the ~~facilities under the JPM Credit Agreement~~Revolving Facility is based on margins over the ~~Base Rate (as defined in the JPM Credit Agreement)~~alternate base rate or over LIBOR, at the election of Frontier. Interest rate margins on the Term Loan A and Revolver (ranging from 0.75% to 1.75% for Base Rate borrowings and 1.75% to 2.75% for LIBOR borrowings) are subject to adjustment based on Frontier’s Total Leverage Ratio (as defined in the JPM Credit Agreement).SOFR. The interest rate onmargin with respect to any SOFR loan under the ~~Term Loan A as of September 30, 2017 was LIBOR plus 2.75%. Interest~~Exit Revolving Facility is 3.50% or 2.50% with respect to any alternate base rate ~~margins on~~loans, with a 0% SOFR floor.

Subject to customary exceptions and thresholds, the ~~Term Loan B (2.75% for Base Rate borrowings and 3.75% for LIBOR borrowings) are not subject to adjustment. The~~ security package under the ~~JPM Credit Agreement~~Revolving Facility includes pledges of the equity interests in certain ~~Frontier~~of our subsidiaries, and guaranties by certain Frontier subsidiaries. As of September 30, 2017, the revolving credit facility was fully available and no borrowings had been made thereunder. The revolving credit facility is available for general corporate purposes but may not be used to fund dividend payments.

~~Frontier has two senior secured credit agreements with CoBank, ACB,~~which as administrative agent, lead arranger and a lender, and the other lenders party thereto: the first, for a $350 million senior term loan facility drawn in 2014 (the 2014 CoBank Credit Agreement), matures on October 24, 2019, and the second, for a $315 million senior term loan facility drawn in October 2016 (the 2016 CoBank Credit Agreement), matures on October 12, 2021. We refer to the 2014 CoBank Credit Agreement and the 2016 CoBank Credit Agreement collectively as the CoBank Credit Agreements.

~~Repayment~~ of the ~~outstanding principal balance under each~~issue date is limited to certain specified pledged entities and substantially all personal property of Frontier Video, which same assets also secure the ~~CoBank Credit Agreements~~First Lien Notes. The Revolving Facility is ~~being made in quarterly installments ($9~~guaranteed by the same subsidiaries that guarantee the First Lien Notes. After giving effect to $133 million ~~with respect to the 2014 CoBank Credit Agreement, and $8 million, with respect to the 2016 CoBank Credit Agreement), in each case with the remaining~~of revolver letters of credit outstanding principal balance to be repaid on the applicable maturity date. Borrowings under each of the CoBank Credit Agreements bear interest based on the margins over the Base Rate (as defined in the applicable CoBank Credit Agreement) or over LIBOR, at the election of Frontier.

On March 29, 2017, Frontier amended the 2014 and 2016 CoBank Credit Agreements. The amendments provide that interest rate margins under each of these facilities will range from 0.875% to 3.875% for Base Rate borrowings and 1.875% to 4.875% for LIBOR borrowings, subject to adjustment based on our Total Leverage Ratio, as defined in each credit agreement. The interest rate on each of the facilities as of September 30, ~~2017 was LIBOR plus 3.875%.~~2022, the Company has $767 million of available borrowing capacity under the Revolving Facility.

(9) Restructuring Costs and Other Charges:

Restructuring and other charges consists of severance and employee costs related to workforce reductions. It also includes professional fees related to our Chapter 11 Cases that were incurred after the Effective Date as well as professional fees related to our restructuring and transformation that were incurred prior to the Petition Date.

During the nine month period ended September 30, 2022, we incurred $88 million in restructuring charges and other costs consisting of $44 million of lease impairment costs from the strategic exit of certain facilities, $35 million of severance and employee costs resulting from workforce reductions, and $9 million of costs related to other restructuring activities. Of the $35 million in severance and employee costs, approximately $26 million related to the second quarter of 2022, as a result of larger workforce reductions in that period.

As part of Frontier’s cost reduction strategy, certain real estate leases will not be retained, or will be marketed for sublease. We evaluated the related right-of-use assets and other lease related assets for impairment under ASC 360. In ~~addition,~~connection with this analysis, we reassessed our leased real estate asset groups and estimated the ~~amendments provide for increases in the maximum Leverage Ratio and expansion~~fair value of the ~~security package identical~~office space to ~~those contained~~be subleased under current market conditions. Where the carrying values of individual asset groups exceeded their fair values, an impairment charge was recognized for the difference.

During the four months ended April 30, 2021, we incurred $7 million of severance and employee costs resulting from workforce reductions. During the five months ended September 30, 2021, we incurred $19 million in ~~the JPM Credit Agreement.~~expenses consisting of $6 million of severance and employee costs resulting from workforce reductions and $13 million of professional fees related to our balance sheet restructuring.

PART I. FINANCIAL INFORMATION (Continued)

FRONTIER COMMUNICATIONS CORPORATIONPARENT, INC. AND SUBSIDIARIES

(Unaudited)

~~NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)~~

~~As of September 30, 2017, we were in compliance with all of our indenture and credit facility covenants.~~

~~Our scheduled principal payments are as follows as of September 30, 2017:~~

Principal
($ in millions)

Payments

2017 (remaining three months)

$
42
2018

$
743
2019

$
828
2020

$
1,132
2021

$
2,558
2022

$
2,703
Thereafter

$
10,010

~~(9)~~ ~~Restructuring Costs and Other Charges~~

~~As of September 30, 2017, restructuring related liabilities of $12 million pertaining to employee separation charges were included in “Other current liabilities” in our consolidated balance sheet.~~

Restructuring costs and other charges, primarily consisting of severance and other employee-related costs of $46 million in connection with workforce reductions, are included in “Restructuring costs and other charges” in our consolidated statement of operations for the nine months ended September 30, 2017. During the second quarter of 2017, Frontier sold its Frontier Secure Strategic Partnerships business at a loss of $9 million, which is also included in restructuring costs and other charges for the nine months ended September 30, 2017.

The following is a summary of the changes in the liabilities established for restructuring ~~programs at September 30, 2017:~~and other related programs:



($ in millions)

Balance at January 1, 2022	$	7
Severance expense		35
Other costs		9
Cash payments during the period		(45)
Balance at September 30, 2022	$	6



~~($ in millions)~~

~~Balance, January 1, 2017~~	$	47
~~Severance costs~~		46
~~Cash payments during the period~~		~~(81)~~
~~Balance, September 30, 2017~~	$	12

‎

PART I. FINANCIAL INFORMATION (Continued)

FRONTIER COMMUNICATIONS CORPORATIONPARENT, INC. AND SUBSIDIARIES

(Unaudited)

~~NOTES TO CONSOLIDATED~~

(10) Investment and Other Income:

The following is a summary of the components of Investment and Other Income:


	For the three months ended September 30,		For the three months ended September 30,
($ in millions)	2022		2021

Interest and dividend income	$	16	$	1
Pension benefit		24		23
OPEB costs		(5)		(59)
OPEB remeasurement gain		84		-
Pension remeasurement gain		91		-
All other, net		1		(2)
Total investment and other income (loss), net	$	211	$	(37)


	Successor				Predecessor
	For the nine months ended September 30,		For the five months ended September 30,		For the four months ended April 30,
($ in millions)	2022		2021		2021

Interest and dividend income	$	24	$	1	$	-
Pension benefit		74		36		6
OPEB costs		(13)		(76)		(4)
OPEB remeasurement gain		234		-		-
Pension remeasurement gain		91		-		-
All other, net		-		-		(1)
Total investment and other income (loss), net	$	410	$	(39)	$	1

In the first nine months of 2022, Frontier amended the medical coverage for certain postretirement benefit plans, which resulted in remeasurement gains of $234 million, primarily due to discount rate changes. As a result of pension settlement charges incurred during the period, Frontier remeasured its pension plan obligations, resulting in a remeasurement gain of $91 million for the nine months ended September 30, 2022. Refer to Note 15 for further details.

Pension and OPEB benefit (costs) consist of interest income (loss), expected return on plan assets, amortization of prior service costs (credit) and recognition of actuarial gain (loss).

‎

PART I. FINANCIAL ~~STATEMENTS~~ INFORMATION (Continued)

FRONTIER COMMUNICATIONS PARENT, INC. AND SUBSIDIARIES

(Unaudited)

(11) Stock Plans:

~~(10)~~

Upon emergence, the Frontier Communications Parent, Inc. 2021 Management Incentive Plan (the “2021 Incentive Plan”) was approved and adopted by the Board. The 2021 Incentive Plan permits stock-based awards to be made to employees, directors, or consultants of the Company or its affiliates, as determined by the Compensation and Human Capital Committee of the Board. Under the 2021 Incentive Plan, 15,600,000 shares of common stock have been reserved for issuance. Equity awards have been issued in the form of time-based restricted stock units (RSUs) and performance-based stock units (PSUs). As of September 30, 2022, unvested awards relating to approximately 2,090,000 shares were outstanding under our long-term incentive plan. Further, upon emergence, all outstanding stock-based compensation plans of Old Frontier were terminated.

Restricted Stock Units

The following summary presents information regarding unvested RSUs under the 2021 Incentive Plan:


2021 Incentive Plan
		Weighted
		Average
	Number of	Grant Date		Aggregate
	Shares	Fair Value		Fair Value
	(in thousands)	(per share)		(in millions)
Balance at January 1, 2022	2,483	$	28.67	$	72
Restricted stock granted	1,078	$	25.86	$	25
Restricted stock vested	(862)	$	25.73	$	(20)
Restricted stock forfeited	(140)	$	25.86
Balance at September 30, 2022	2,559	$	25.83	$	60

For purposes of determining compensation expense, the fair value of each RSU grant is based on the closing price of our common stock on the date of grant. The non-vested RSUs granted in 2021 and 2022 generally vest, and are expensed, on a ratable basis over three years from the grant date of the award. Total remaining unrecognized compensation cost associated with unvested RSU awards that is deferred at September 30, 2022 was $56 million and the weighted average vesting period over which this cost is expected to be recognized is approximately 2 years.

None of the RSU awards may be sold, assigned, pledged, or otherwise transferred, voluntarily or involuntarily, by the employees until the applicable time-based restrictions lapse, subject to limited exceptions. RSUs, when vested, will be paid out in the form of common stock. Compensation expense, including compensation related to non-employee directors, recognized in “Selling, general, and administrative expenses”, of $27 million for the nine month-period ended September 30, 2022, has been recorded in connection with RSUs.

Performance Stock Units

Under the 2021 Incentive Plan, a target number of PSUs are awarded to certain participants with respect to a three-year performance period (a “Measurement Period”). The performance metrics under the 2021 and 2022 PSU grants consist of targets for (1) Adjusted Fiber EBITDA, (2) Fiber Locations Constructed and (3) Expansion Fiber Penetration. In addition, there is an overall relative total shareholder return (“TSR”) modifier, which is based on Frontier’s total return to stockholders over the Measurement Period relative to the S&P 400 Mid Cap Index. Each performance metric is weighted 33.3%, and targets for each metric are set for each of the three years during the Measurement Period. Achievement of the metrics will be measured separately, and the number of awards earned will be determined based on actual performance relative to the targets of each performance metric, plus the effect of the TSR modifier. Achievement is measured on a cumulative basis for each performance metric individually at the end of the three-year Measurement Period. The payout of the 2021 PSUs can range

PART I. FINANCIAL INFORMATION (Continued)

FRONTIER COMMUNICATIONS PARENT, INC. AND SUBSIDIARIES

(Unaudited)

from 0% to a maximum award payout of 300% of the target units. The payout of the 2022 PSUs can range from 0% to a maximum award payout of 200% of the target units.

The number of PSU awards earned at the end of the Measurement Period may be more or less than the number of target PSUs granted as a result of performance. An executive must maintain a satisfactory performance rating during the Measurement Period and generally must be employed by Frontier upon determination in order for the award to vest. The Compensation and Human Capital Committee will determine the number of shares earned for the Measurement Period in the first quarter of the year following the end of the Measurement Period. PSUs, to the extent earned, will be paid out in the form of common stock shortly following this determination.

Under ASC 718, Stock Based Compensation Expense, a grant date and the fair value of a performance award are determined once the targets are finalized. All targets for the 2021 awards have been set and the fair value of the grants will be amortized over the appropriate period. For the 2022 PSU awards, the targets related to two of the three performance metrics have not been established. As a result, we are recognizing expense with respect to 1/3 of the aggregate outstanding 2022 PSU awards over the appropriate period.

The following summary presents information regarding performance shares as of September 30, 2022 and changes during the nine months then ended with regard to performance shares awarded under the 2021 Incentive Plan:


2021 Incentive Plan
			Weighted
			Average
	Number of		Grant Date	Aggregate
	Shares		Fair Value	Fair Value
	(in thousands)		(per share)	(in millions)
Balance at January 1, 2022	3,144	$	25.62	$	92
Target performance shares awarded, net	388	$	25.66	$	9
Target performance shares forfeited	(47)	$	25.62
Balance at September 30, 2022	3,485	$	25.62	$	82

For purposes of determining compensation expense, the fair value of each performance share grant is estimated based on the closing price of a share of our common stock on the date of the grant, adjusted to reflect the fair value of the relative TSR modifier. For the nine months ended September 30, 2022, we recognized net compensation expense, reflected in “Selling, general, and administrative expenses,” of $27 million related PSU awards.

‎

PART I. FINANCIAL INFORMATION (Continued)

FRONTIER COMMUNICATIONS PARENT, INC. AND SUBSIDIARIES

(Unaudited)

(12) Income Taxes:

The following is a reconciliation of the provision for income taxes computed at the federal statutory rate to income taxes computed at the effective rate:

For the three months ended

For the nine months ended

September 30,

September 30,

2017

2016

2017

2016

Consolidated tax provision at federal statutory rate

35.0
%

35.0
%

35.0
%

35.0
%
State income tax provisions, net of federal income

tax benefit

2.8

4.2

1.7

4.3

Tax reserve adjustment

(1.0)

6.3

(0.2)

0.7

Domestic production activities deduction

-

(9.5)

-

(2.4)

Changes in certain deferred tax balances

7.1

(0.8)

0.2

3.1

Goodwill impairment

-

-

(10.2)

-

Shared-based payments

0.1

-

(0.2)

-

Federal research and development tax credit

1.5

1.5

0.3

1.2

All other, net

0.1

-

(0.1)

0.1

Effective tax rate

45.6
%

36.7
%

26.5
%

42.0
%


	Successor						Predecessor
	For the three months ended September 30,		For the nine months ended September 30,		For the five months ended September 30,		For the four months ended April 30,
	2022		2022		2021		2021

Consolidated tax provision at federal statutory rate	21.0	%	21.0	%	21.0	%	21.0	%
State income tax expense, net of federal
income tax benefit	14.7		13.1		2.8		0.5
Changes in certain deferred tax balances	2.1		1.5		-		-
Restructuring cost	-		-		-		0.3
Fresh start and reorganization adjustments	-		-		-		(24.9)
Sec.162(m) - nondeductible Executive Compensation	1.5		2.5		-		-
All other, net	(0.8)		(0.3)		0.9		-
Effective tax rate	38.5	%	37.8	%	24.7	%	(3.1)	%

~~Income taxes for the nine months ended September 30, 2017 includes the federal~~Frontier considered positive and negative evidence in regard to evaluating certain state deferred tax ~~impact of $107 million related to the goodwill impairment recorded~~assets during the ~~second~~third quarter of ~~2017.~~

~~Income taxes for~~2022, including the ~~nine months ended September 30, 2017 includes~~development of recent years of pre-tax book losses. On the ~~impact~~basis of $2this evaluation, a valuation allowance of $77 million ($61 million net of ~~income tax expense resulting from the adoption of ASU No. 2016-09, “Improvements to Employee Share-Based Payment Accounting.”~~

~~Amounts pertaining to income tax related accounts of $48 million and $55 million are included in “Income taxes and other current assets” in the consolidated balance sheets~~federal benefit) was recorded as of September 30, ~~2017 and December 31, 2016, respectively.~~2022.

~~During the first nine months of 2017, we received net state income tax refunds of $4 million. In October 2017, we received federal tax refunds of $48 million.~~

~~PART I. FINANCIAL INFORMATION (Continued)~~

~~FRONTIER COMMUNICATIONS CORPORATION AND SUBSIDIARIES~~

~~NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)~~

~~(11)~~ ~~Net Loss Per Share~~:

All share and per share amounts in the tables below have been retroactively adjusted for all periods presented to give effect to the reverse stock split. See Note 1 – Summary of Significant Accounting Policies for additional details.

The ~~reconciliation of the net loss per share calculation is as follows~~:

For the three months ended

For the nine months ended

September 30,

September 30,

($ in millions and shares in thousands, except per share amounts)
2017

2016

2017

2016

Net loss used for basic and diluted loss

per share:

Net loss attributable to Frontier common shareholders
$
(92)

$
(134)

$
(936)

$
(454)
Less:  Dividends paid on unvested restricted stock awards

-

(1)

(2)

(3)
Total basic net loss

attributable to Frontier common shareholders
$
(92)

$
(135)

$
(938)

$
(457)
Effect of loss related to dilutive stock units

-

-

(2)

-
Total diluted net loss

attributable to Frontier common shareholders
$
(92)

$
(135)

$
(940)

$
(457)

Basic loss per share:

Total weighted average shares and unvested restricted stock

awards outstanding - basic

78,488

78,205

78,399

78,134
Less:  Weighted average unvested restricted stock awards

(691)

(593)

(685)

(526)
Total weighted average shares outstanding - basic

77,797

77,612

77,714

77,608

Basic net loss per share

attributable to Frontier common shareholders
$
(1.19)

$
(1.73)

$
(12.06)

$
(5.87)


Diluted loss per share:

Total weighted average shares outstanding - basic

77,797

77,612

77,714

77,608
Effect of dilutive stock units

-

-

161

-
Total weighted average shares outstanding - diluted

77,797

77,612

77,875

77,608

Diluted net loss per share

attributable to Frontier common shareholders
$
(1.19)

$
(1.73)

$
(12.07)

$
(5.87)

~~In calculating diluted net loss per common share~~effective rate for the three and nine months ended September 30, ~~2016,~~2022, increased as a result of increases to the ~~effect of all common stock equivalents is excluded~~state rate due to valuation allowances in certain states, arising from ~~the computation as the effect would be antidilutive.~~non-deductible interest expense primarily related to our $1.2 billion first lien note issuance.

~~Stock Options~~

~~For~~The effective rate changes between the three and nine months ended September 30, ~~2017~~2022, as compared to 2021 are primarily due to, as described more fully in Note 1, the Company emergence from bankruptcy on April 30, 2021, and ~~2016, previously granted options~~consummation of a taxable disposition of substantially all of the assets and/or subsidiary stock of the Company and utilized substantially all of the Company’s Net Operating Losses (“NOLs”).

The Inflation Reduction Act was signed into law on August 16, 2022. The law contains numerous changes to ~~purchase 2,664 shares, issuable under employee compensation plans were~~tax laws effective January 1, 2023. The Company is currently evaluating the effects, if any, of these changes.

‎

PART I. FINANCIAL INFORMATION (Continued)

FRONTIER COMMUNICATIONS PARENT, INC. AND SUBSIDIARIES

(Unaudited)

(13) Net Earnings Per Share:

The reconciliation of the net earnings per share calculation is as follows:


($ in millions and shares in thousands, except per share amounts)	For the three months ended September 30,		For the three months ended September 30,
	2022		2021
Net income used for basic and diluted earnings
per share:
Total basic net income
attributable to Frontier common shareholders	$	120	$	126
Effect of loss related to dilutive stock units		-		-
Total diluted net income
attributable to Frontier common shareholders	$	120	$	126

Basic earnings per share:
Total weighted average shares and unvested restricted stock
awards outstanding - basic		244,984		244,403
Less: Weighted average unvested restricted stock awards		-		-
Total weighted average shares outstanding - basic		244,984		244,403

Basic net earnings per share
attributable to Frontier common shareholders	$	0.49	$	0.52

Diluted earnings per share:
Total weighted average shares outstanding - basic		244,984		244,403
Effect of dilutive restricted stock awards		228		1,264
Total weighted average shares outstanding - diluted		245,212		245,667

Diluted net earnings per share
attributable to Frontier common shareholders	$	0.49	$	0.51

‎

PART I. FINANCIAL INFORMATION (Continued)

FRONTIER COMMUNICATIONS PARENT, INC. AND SUBSIDIARIES

(Unaudited)


	Successor				Predecessor
($ in millions and shares in thousands, except per share amounts)	For the nine months ended September 30,		For the five months ended September 30,		For the four months ended April 30,
	2022		2021		2021
Net income used for basic and diluted earnings
per share:
Total basic net income
attributable to Frontier common shareholders	$	286	$	225	$	4,541
Effect of loss related to dilutive stock units		-		-		-
Total diluted net income
attributable to Frontier common shareholders	$	286	$	225	$	4,541

Basic earnings per share:
Total weighted average shares and unvested restricted stock
awards outstanding - basic		244,711		244,402		104,799
Less: Weighted average unvested restricted stock awards		-		-		(215)
Total weighted average shares outstanding - basic		244,711		244,402		104,584

Basic net earnings per share
attributable to Frontier common shareholders	$	1.17	$	0.92	$	43.42

Diluted earnings per share:
Total weighted average shares outstanding - basic		244,711		244,402		104,584
Effect of dilutive stock units		-		-		340
Effect of dilutive restricted stock awards		369		1,198		-
Total weighted average shares outstanding - diluted		245,080		245,600		104,924

Diluted net earnings per share
attributable to Frontier common shareholders	$	1.17	$	0.92	$	43.28

In calculating diluted net income per common share for the nine months ended September 30, 2022, the effect of all outstanding PSUs is excluded from the computation as their respective performance metrics have not been satisfied as of ~~diluted earnings (loss) per share (EPS) for those periods because the exercise prices were greater than the average market price of our common stock and, therefore, the effect would be antidilutive.~~September 30, 2022.

~~PART I. FINANCIAL INFORMATION (Continued)~~

~~FRONTIER COMMUNICATIONS CORPORATION AND SUBSIDIARIES~~

~~NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)~~

Stock Units

At September 30, ~~2017 and 2016, we had 161,020 and 116,223~~2021, the dilutive common stock equivalents consisted of stock units ~~respectively,~~ issued under the Non-Employee Directors’ Deferred Fee Equity Plan (Deferred Fee Plan), the Non-Employee Directors’ Equity Incentive Plan (Directors’ Equity Plan), the 2013 Equity Incentive Plan and the 2017 Equity Incentive Plan. These securities have not been included in the diluted EPS calculation for the three months ended September 30, 2017 and 2016 and the nine months ended September 30, 2016 because their inclusion would have an antidilutive effect. Compensation costs associated with the issuance of stock units were ($4) million for the nine months ended September 30, 2017. There were no compensation costs associated with the issuance of stock units for the nine months ended September 30, 2016.

~~Mandatory Convertible Preferred Stock~~
‎

The impact of the common share equivalents associated with approximately 19,250,000 shares of Series A Preferred stock were not included in the diluted EPS calculation as of September 30, 2017 and 2016, as their impact was antidilutive.

~~(12)~~ ~~Stock Plans~~:

At September 30, 2017, we had seven stock-based compensation plans under which grants were made and awards remained outstanding. No further awards may be granted under six of the plans: the 1996 Equity Incentive Plan (the 1996 EIP), the Amended and Restated 2000 Equity Incentive Plan (the 2000 EIP), the 2009 Equity Incentive Plan (the 2009 EIP), the 2013 Equity Incentive Plan (the 2013 EIP), the Deferred Fee Plan and the Directors’ Equity Plan. At September 30, 2017, there were approximately 5,667,000 shares authorized for grant and approximately 4,381,000 shares available for grant under the 2017 Equity Incentive Plan (the 2017 EIP and together with the 1996 EIP, the 2000 EIP, the 2009 EIP and the 2013 EIPS, the EIPs). Our general policy is to issue treasury shares upon the grant of restricted shares and the exercise of options.

~~Performance Shares~~

~~On February 16, 2017, the Compensation Committee of our Board~~of Directors granted approximately 157,400 performance shares under the Frontier Long Term Incentive Plan (the LTIP) and set the operating cash flow performance goal for 2017, which applies to the first year in the 2017-2019 measurement period, the second year of the 2016-2018 measurement period and the third year of the 2015-2017 measurement period.

The following summary presents information regarding LTIP target performance shares as of September 30, 2017 and changes during the nine months then ended with regard to LTIP shares awarded under the 2013 EIP and the 2017 EIP:



		~~Number of~~
		~~Shares~~
		~~(in thousands)~~
~~Balance at January 1, 2017~~		~~190~~
~~LTIP target performance shares granted, net~~		~~211~~
~~LTIP target performance shares earned~~		~~(41)~~
~~LTIP target performance shares forfeited~~		~~(51)~~
~~Balance at September 30, 2017~~		~~309~~

For purposes of determining compensation expense, the fair value of each performance share is measured at the end of each reporting period and, therefore, will fluctuate based on the price of Frontier common stock as well as performance relative to the targets. For the nine months ended September 30, 2017 and 2016, we recognized net compensation expense, reflected in “Selling, general and administrative expenses,” of $0 and $4 million, respectively, for the LTIP.

PART I. FINANCIAL INFORMATION (Continued)

FRONTIER COMMUNICATIONS CORPORATIONPARENT, INC. AND SUBSIDIARIES

(Unaudited)

~~NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)~~

~~Restricted Stock~~

The following summary presents information regarding unvested restricted stock as of September 30, 2017 and changes during the nine months then ended with regard to restricted stock granted under the 2013 EIP and the 2017 EIP:

Weighted

Average

Number of

Grant Date

Aggregate

Shares

Fair Value

Fair Value

(in thousands)

(per share)

(in millions)
Balance at January 1, 2017

549

$
78.00

$
28
Restricted stock granted

454

$
47.77

$
5
Restricted stock vested

(220)

$
79.78

$
(3)
Restricted stock forfeited

(119)

$
61.21

Balance at September 30, 2017

664

$
59.64

$
8

For purposes of determining compensation expense, the fair value of each restricted stock grant is estimated based on the average of the high and low market price of a share of our common stock on the date of grant, for shares granted prior to May 10, 2017. Beginning on May 10, 2017, the fair value of each restricted stock grant is estimated based on the closing price of a share of our common stock on the date of the grant. Total remaining unrecognizedcompensation cost associated with unvested restricted stock awards that is deferred at September 30, 2017 was $26 million, and the weighted average vesting period over which this cost is expected to be recognized is approximately 1.5 years.

Shares of restricted stock granted during the first nine months of 2016 totaled 375,133. The total fair value of shares of restricted stock granted and vested at September 30, 2016 was approximately $23 million and $15 million, respectively. The total fair value of unvested restricted stock at September 30, 2016 was $37 million. The weighted average grant date fair value of restricted shares granted during the nine months ended September 30, 2016 was $78.60 per share.

We have granted restricted stock awards to employees in the form of our common stock. None of the restricted stock awards may be sold, assigned, pledged or otherwise transferred, voluntarily or involuntarily, by the employees until the restrictions lapse, subject to limited exceptions. The restrictions are time-based. Compensation expense, recognized in “Selling, general and administrative expenses,” of $14 million for each of the nine month periods ended September 30, 2017 and 2016, has been recorded in connection with these grants.

~~PART I. FINANCIAL INFORMATION (Continued)~~

~~FRONTIER COMMUNICATIONS CORPORATION AND SUBSIDIARIES~~

~~NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)~~

~~(13)~~ (14) Comprehensive Income (Loss):

Comprehensive income (loss) consists of net income (loss) and other gains and losses affecting ~~shareholders’ investment~~equity (deficit) and pension/postretirement benefit (OPEB) liabilities that, under GAAP, are excluded from net loss.

The components of accumulated other comprehensive ~~loss,~~income (loss), net of tax, ~~at September 30, 2017 and 2016,~~ and changes ~~for the nine months then ended,~~ are as follows:

($ in millions)

Pension Costs

OPEB Costs

Deferred Taxes on Pension and OPEB Costs

Total

Balance at January 1, 2017

$
(647)

$
29

$
231

$
(387)
Other comprehensive income (loss)
before reclassifications

(34)

1

12

(21)
Amounts reclassified from accumulated other comprehensive loss to net loss

23

(7)

(5)

11
Recognition of net actuarial loss for pension settlement costs in net loss

77

-

(29)

48
Net current-period other comprehensive income (loss)

66

(6)

(22)

38
Balance at September 30, 2017

$
(581)

$
23

$
209

$
(349)


	Pension		OPEB
($ in millions)	Costs		Costs		Total
Balance at January 1, 2022 (Successor) ⁽¹⁾	$	-	$	60	$	60
Other comprehensive income
before reclassifications		-		8		8
Amounts reclassified from accumulated other
comprehensive income to net income		-		(8)		(8)
Net current-period other comprehensive
income		-		-		-
Balance at September 30, 2022 (Successor) ⁽¹⁾	$	-	$	60	$	60


	Pension		OPEB
($ in millions)	Costs		Costs		Total
Balance at January 1, 2021 (Predecessor) ⁽¹⁾	$	(699)	$	(56)	$	(755)
Other comprehensive income
before reclassifications		270		74		344
Amounts reclassified from accumulated other
comprehensive loss to net income		19		(4)		15
Net current-period other comprehensive
income		289		70		359
Cancellation of Predecessor equity		410		(14)		396

Balance at April 30, 2021 (Predecessor) ⁽¹⁾	$	-	$	-	$	-


Balance at April 30, 2021 (Successor) ⁽¹⁾	$	-	$	-	$	-
Other comprehensive income
before reclassifications		-		46		46
Amounts reclassified from accumulated other
comprehensive income to net income		-		(2)		(2)
Net current-period other comprehensive
income		-		44		44
Balance at September 30, 2021 (Successor) ⁽¹⁾	$	-	$	44	$	44

($ in millions)

Pension Costs

OPEB Costs

Deferred Taxes on Pension and OPEB Costs

Total

Balance at January 1, 2016

$
(584)

$
20

$
211

$
(353)
Other comprehensive income (loss)
before reclassifications

(105)

-

40

(65)
Amounts reclassified from accumulated other comprehensive loss

30

(6)

(9)

15
Net current-period other comprehensive income (loss)

(75)

(6)

31

(50)
Balance at September 30, 2016

$
(659)

$
14

$
242

$
(403)

~~As a result~~

⁽¹⁾Pension and OPEB amounts are net of ~~the pension settlement accounting discussed in Note 14, the Frontier Communications Pension Plan (the Pension Plan)~~tax of $15 million as of January 1, 2022 and $234 million as of January 1, 2021. The tax impact was ~~remeasured~~$16 million and $12 million as of September 30, ~~2017. This remeasurement resulted in a decrease in the discount rate from 4.10% at March 31, 2017 to 3.8% at June 30, 2017~~2022 and September 30, 2017, in addition to census data changes resulting in the recording of a loss on remeasurement to Other comprehensive income (loss) during each of the quarters. For the nine months ended September 30, 2017, Frontier recorded a net loss on remeasurement of $32 million, to Other comprehensive income (loss). Additionally, Frontier recorded pension settlement charges totaling $77 million ($48 million net of tax) to Other comprehensive income (loss). Refer to Note 14 for details about the settlement accounting.2021, respectively.

‎

2529

PART I. FINANCIAL INFORMATION (Continued)

FRONTIER COMMUNICATIONS CORPORATIONPARENT, INC. AND SUBSIDIARIES

(Unaudited)

~~NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)~~

The significant items reclassified from ~~each component~~components of accumulated other comprehensive loss ~~for the three and nine months ended September 30, 2017 and 2016~~ are as follows:

Amount Reclassified from

($ in millions)

Accumulated Other Comprehensive Loss (a)

Details about Accumulated Other
Comprehensive Loss Components

For the three months ended September 30,

For the nine months ended September 30,

Affected Line Item in the Statement Where Net Income (Loss) is Presented

2017

2016

2017

2016

Amortization of Pension Cost Items (b)

Actuarial gains (losses)

$
(6)

$
(9)

$
(23)

$
(30)

Pension settlement costs

(15)

-

(77)

-

(21)

(9)

(100)

(30)

Income (loss) before income taxes
Tax impact

8

3

37

11

Income tax (expense) benefit

$
(13)

$
(6)

$
(63)

$
(19)

Net income (loss)

Amortization of OPEB Cost Items (b)

Prior-service costs

$
2

$
2

$
7

$
7

Actuarial gains (losses)

1

-

-

(1)

3

2

7

6

Income (loss) before income taxes
Tax impact

(2)

-

(3)

(2)

Income tax (expense) benefit

$
1

$
2

$
4

$
4

Net income (loss)

Amount Reclassified from

Accumulated Other

Comprehensive Loss ⁽¹⁾

($ in millions)

Affected Line Item in

For the three months

the Statement Where

Details about Accumulated Other

ended September 30,

Net Income (Loss)

Comprehensive Loss Components

2022

2021

is Presented

Amortization of OPEB Cost Items

Prior-service costs

Income (Loss) before income taxes

Tax impact

(1)

Income tax benefit

Net income (loss)

~~(a) Amounts in parentheses indicate losses.~~


	Successor				Predecessor
	Amount Reclassified from
	Accumulated Other
	Comprehensive Loss ⁽¹⁾
($ in millions)							Affected Line Item in
	For the nine months		For the five months		For the four months		the Statement Where
Details about Accumulated Other	ended September 30,		ended September 30,		ended April 30,		Net Income (Loss)
Comprehensive Loss Components	2022		2021		2021		is Presented
Amortization of Pension Cost Items Actuarial losses	$	-	$	-	$	(24)	Income (Loss) before income taxes
Tax impact		-		-		5	Income tax benefit
	$	-	$	-	$	(19)	Net income (loss)

Amortization of OPEB Cost Items
Prior-service costs	$	10	$	3	$	10
Actuarial losses		-		-		(5)
		10		3		5	Income (Loss) before income taxes
Tax impact		(2)		(1)		(1)	Income tax benefit
	$	8	$	2	$	4	Net income (loss)

~~(b)~~⁽¹⁾ These accumulated other comprehensive loss components are included in the computation of net periodic pension and OPEB costs ~~(see~~(See Note 1415 - Retirement Plans for additional details).

‎

2630

PART I. FINANCIAL INFORMATION (Continued)

FRONTIER COMMUNICATIONS CORPORATIONPARENT, INC. AND SUBSIDIARIES

(Unaudited)

~~NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)~~

~~(14)~~ (15) Retirement Plans:

Frontier recognizes actuarial gains (losses) for our pension and postretirement plans in the period they occur. The components of net periodic benefit cost other than the service cost component for our plans as well as any actuarial gains or losses are included in “Investment and other income (loss)” on the consolidated statement of income.

The following tables provide the components of total pension benefit cost:


									Pension Benefits
									For the three months ended September 30,		For the three months ended September 30,
($ in millions)									2022		2021

Components of total pension benefit cost
Service cost									$	14	$	20
Interest cost on projected benefit obligation										22		26
Expected return on plan assets										(46)		(49)
Amortization of unrecognized loss										-		-
Net periodic pension (benefit)										(10)		(3)
Pension settlement costs										50		-
Pension remeasurement gain										(91)		-
Total pension (benefit)									$	(51)	$	(3)

	Pension Benefits
	For the three months ended				For the nine months ended				Successor				Predecessor
	September 30,				September 30,				Pension Benefits
									For the nine months ended September 30,		For the five months ended September 30,		For the four months ended April 30,
($ in millions)	2017		2016		2017		2016		2022		2021		2021

Components of total pension benefit cost
Service cost	$	26	$	16	$	76	$	63	$	55	$	33	$	32
Interest cost on projected benefit obligation		27		24		94		89		71		44		31
Expected return on plan assets		(43)		(30)		(139)		(122)		(145)		(80)		(61)
Amortization of unrecognized loss		6		9		23		30		-		-		24
Net periodic pension benefit cost	$	16	$	19	$	54	$	60
Net periodic pension (benefit) cost									$	(19)	$	(3)	$	26
Pension settlement costs		15		-		77		-		50		-		-
Total pension benefit cost	$	31	$	19	$	131	$	60
Pension remeasurement gain										(91)		-		-
Total pension (benefit) cost									$	(60)	$	(3)	$	26

Postretirement Benefits

For the three months ended

For the nine months ended

September 30,

September 30,

($ in millions)

2017

2016

2017

2016

Components of net periodic postretirement benefit cost

Service cost

$
5

$
6

$
16

$
14
Interest cost on projected benefit obligation

11

10

30

27
Amortization of prior service cost/(credit)

(2)

(2)

(7)

(7)
Amortization of unrecognized (gain) loss

(1)

-

-

1
Net periodic postretirement benefit cost

$
13

$
14

$
39

$
35

~~During~~

The components of net periodic benefit cost other than the ~~first nine months~~service cost component are included in “Investment and other income” on the consolidated statement of ~~2017 and 2016, we capitalized $20 million and $18 million, respectively, of pension and OPEB expense into the cost~~income.

The value of our ~~capital expenditures, as~~pension plan assets decreased $696 million from $2,655 million at December 31, 2021 to $1,959 million at September 30, 2022. This decrease primarily resulted from changes in the ~~costs relate~~market value of investments of $635 million including plan expenses, and benefit payments to ~~our engineering and plant construction activities.~~participants of $233 million, partially offset by contributions of $172 million.

The ~~Pension Plan~~pension plan contains provisions that provide certain employees with the option of receiving a lump sum payment upon retirement. Frontier’s accounting policy is to record these payments as a settlement only if, in the aggregate, they exceed the sum of the annual service and interest costs for the Pension Plan’s net periodic

PART I. FINANCIAL INFORMATION (Continued)

FRONTIER COMMUNICATIONS PARENT, INC. AND SUBSIDIARIES

(Unaudited)

pension benefit cost. During the ~~three and~~ nine months ended September 30, ~~2017,~~2022, lump sum pension settlement payments to terminated or retired individuals amounted to ~~$87 million and $449~~$177 million, which exceeded the settlement threshold of ~~$224~~$169 million, and as a result, Frontier recognized non-cash settlement charges totaling ~~$77~~$50 million during the nine months ended September 30, 2022.

As a result of pension settlement charges incurred during the period, Frontier remeasured its pension plan obligations resulting in a remeasurement gain of $91 million for the nine months ended September 30, 2022. Upon emergence from bankruptcy, Frontier revised its accounting policy to recognize actuarial gains and losses in the period in which they occur. As such, this gain was recorded in “Investment and other income, net” on our consolidated statements of income.

In the first nine months of ~~2017. The non-cash charge accelerated~~2022, Frontier amended the medical coverage for certain postretirement benefit plans, which necessitated a remeasurement of its OPEB obligations. This remeasurement resulted in the recognition of a ~~portion~~net actuarial gain of $234 million, which was driven primarily from a higher assumed discount rate relative to the ~~previously unrecognized~~previous measurement date. Upon emergence from bankruptcy, Frontier revised its accounting policy to recognize actuarial gains and losses in the ~~Pension Plan. These non-cash charges increased~~period in which they occur. As such, this gain was recorded in “Investment and other income, net” on our ~~recorded net loss and accumulated deficit, with an offset to accumulated other comprehensive loss in shareholders’ equity. An additional pension settlement charge will be required in~~consolidated statements of income.

The following tables provide the ~~fourth quarter~~components of ~~2017,~~total postretirement benefit cost:


	Postretirement
	For the three months ended September 30,		For the three months ended September 30,
($ in millions)	2022		2021

Components of net periodic postretirement benefit cost
Service cost	$	3	$	4
Interest cost on projected benefit obligation		9		7
Amortization of prior service benefit		(4)		(2)
OPEB remeasurement (gain) loss		(84)		54
Total periodic postretirement (benefit) cost	$	(76)	$	63


	Successor				Predecessor
	Postretirement
	For the nine months ended September 30,		For the five months ended September 30,		For the four months ended April 30,
($ in millions)	2022		2021		2021

Components of net periodic postretirement benefit cost
Service cost	$	10	$	7	$	7
Interest cost on projected benefit obligation		23		12		9
Amortization of prior service benefit		(10)		(3)		(10)
OPEB remeasurement (gain) loss		(234)		67		-
Amortization of unrecognized loss		-		-		5
Net periodic postretirement (benefit) cost	$	(211)	$	83	$	11

During the ~~amount of which will be dependent on the lump sum benefit payments made during the fourth quarter. As a result of the recognition of the settlement charges in the first~~ nine months ~~of 2017, the net pension plan liability was remeasured as of~~ended September 30, ~~2017, June~~2022, we capitalized $15 million of pension and OPEB expense into the cost of our capital expenditures, as the costs relate to our engineering and plant construction activities. During the four months of April 30, ~~2017~~2021, we capitalized $7 million of pension and ~~March 31, 2017 to be $717 million, $711 million and $665million, respectively, as compared to~~OPEB expense into the $699 million measured and recorded at December 31, 2016. The remeasured funded status of the Pension Plan was approximately 80%, as of September 30, 2017, similar to December 31, 2016. Frontier did not record any adjustment to the pension plan liability, beyond the settlement charge, as a result of this remeasurement.cost

PART I. FINANCIAL INFORMATION (Continued)

FRONTIER COMMUNICATIONS CORPORATIONPARENT, INC. AND SUBSIDIARIES

(Unaudited)

~~NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)~~

~~Our Pension Plan assets decreased from $2,766 million at December 31, 2016~~of our capital expenditures, as the costs relate to ~~$2,604 million at~~our engineering and plant construction activities. During the three and five months ended September 30, ~~2017, a decrease~~2021, we capitalized $6 million and $10 million of ~~$162 million, or 6%. This decrease was a result of benefit payments of $492 million, partially offset by positive investment returns of $270 million, net of investment management~~pension and ~~administrative fees, and contributions in excess of the Differential (as defined below) of $60 million, during the first nine months of 2017.~~ OPEB expense, respectively.

As part of the CTF Acquisition, Verizon was required to make a cash payment to Frontier for the difference in assets initially transferred by Verizon into the Pension Plan and the related obligation (the Differential). In the third quarter of 2017, we received the $131 million Differential payment from Verizon, and have remitted an equivalent amount to the Pension Plan as of September 30, 2017. As the Differential was reflected as a receivable of the Pension Plan at December 31, 2016, the cash funding had no impact to plan assets.

~~(15)~~ (16) Commitments and Contingencies:

Although from time to time we make short-term purchasing commitments to vendors with respect to capital expenditures, we generally do not enter into firm, written contracts for such activities. In connection with the accelerated fiber build, we have prioritized diversifying our vendor base and finalizing agreements with vendors for relevant labor and materials. Some of these agreements have initial two-year terms with an option to extend for two years through 2025.

In ~~June~~ 2015, Frontier accepted the ~~Federal Communications Commission’s (FCC) offer of support to price cap carriers under the Connect America Fund (CAF)~~FCC’s CAF Phase II ~~program,~~offer, which ~~is intended to provide long-term support for broadband~~ ~~in high cost unserved or underserved areas. This program provides $332~~provided $313 million in annual support ~~including $49 million in annual support related to the properties acquired in the CTF Acquisition,~~ through ~~2020~~2021, to make available 10 Mbps downstream/1 Mbps upstream broadband service to ~~approximately 774,000~~ households across ~~certain~~some of the 2925 states where we ~~now~~ operate. The deployment deadline was December 31, 2021, and final review and audit of households is not complete. To the extent it is determined we dodid not enable the required number of households with 10 Mbps downstream/1 Mbps upstream broadband service ~~by the end of the~~or we were unable to satisfy other CAF Phase II ~~term, we would~~requirements, Frontier will be required to return a portion of the funds previously ~~received.~~

On April 20, 2017, the FCC issued an Order that will significantly alter how Commercial Data Services are regulated once the rules go into effect. Specifically, the Order adopted a test to determine, on a county-by-county basis, whether price cap ILECs’, like Frontier’s, DS1received and DS3 services will continue to be regulated. The test is likely to result in deregulation in a substantial number of our markets. Once implemented, the deregulation will allow Frontier to offer its DS1 and DS3 services in a manner that better responds to the competitive marketplace and allows for commercial negotiation. The areas that remain regulated may be subject to ~~price fluctuations depending upon~~certain other requirements and obligations. We have accrued an amount for any potential shortfall in the ~~price cap formula~~household build commitment that ~~year. Multiple parties have appealed~~we deem to be probable and ~~requested~~reasonably estimated, and we do not expect that any potential penalties, if ultimately incurred, will be material.

On January 30, 2020, the FCC adopted an order establishing RDOF, a ~~stay~~competitive reverse auction to provide support to serve high cost areas. Under the FCCs RDOF Phase I auction, Frontier was awarded approximately $371 million over ten years to build gigabit-capable broadband over a fiber-to-the-premises network to approximately 127,000 locations in eight states (California, Connecticut, Florida, Illinois, New York, Pennsylvania, Texas, and West Virginia). Frontier began receiving RDOF funding in the second quarter of 2022 and we will be required to complete the buildout to the awarded locations by December 31, 2028, with interim target milestones over this ~~Order.~~period.

On July 27, 2022, the Connecticut Public Utility Regulatory Authority (“PURA”) issued a Notice of Violation and Assessment of Civil Penalty Order to Cease and Desist (“NOV”) related to the underground excavation and placement of fiber facilities by Frontier ~~cannot predict~~and its contractors in Connecticut. The NOV alleged that Frontier and its contractors failed to comply with certain state excavation regulations which created public safety and compliance issues. The NOV prescribed a fine and ordered Frontier to discontinue certain underground fiber deployment work until the ~~extent~~Company submitted a compliance plan to ~~which these regulatory changes will result~~ensure compliance with the applicable regulations. Frontier submitted a compliance and inspection plan consistent with the NOV and paid the fine. On August 26, 2022, PURA approved Frontier’s compliance and inspection plan, and the Company is proceeding with underground fiber deployment in ~~changes to revenues at this time.~~ Connecticut.

WeIn addition, we are party to various legal proceedings (including individual actions, class and putative class ~~actions)~~actions, and governmental investigations) arising in the normal course of our business covering a wide range of matters and types of claims including, but not limited to, general ~~contracts,~~contract disputes, billing disputes, rights of access, taxes and surcharges, consumer protection, advertising, sales and the provision of services, intellectual property, including, trademark, copyright, and patent infringement, employment, ~~shareholder,~~ regulatory, tort, claims of competitors and disputes with other carriers. Litigation is subject to uncertainty and the outcome of individual matters is not predictable. However, we believe that the ultimate resolution of all such matters, after considering insurance coverage or other indemnities to which we are entitled, will not have a material adverse effect on our financial position, results of operations, or cash flows.

PART I. FINANCIAL INFORMATION (Continued)

FRONTIER COMMUNICATIONS PARENT, INC. AND SUBSIDIARIES

(Unaudited)

In October 2013, the California Attorney General’s Office notified certain Verizon companies, including one of the subsidiaries that we acquired in the CTF Acquisition, of potential violations of California state hazardous waste statutes primarily arising from the disposal of electronic components, batteries and aerosol cans at certain California facilities. We are cooperating with this investigation. We have accrued an amount for potential penalties that we deem to be probable and reasonably estimated, and we do not expect that any potential penalties, if ultimately incurred, will be material.

We accrue an expense for pending litigation when we determine that an unfavorable outcome is probable, and the amount of the loss can be reasonably estimated. Legal defense costs are expensed as incurred. None of our existing accruals for pending matters, after considering insurance coverage, is material. We monitor our pending litigation for the purpose of adjusting our accruals and revising our disclosures accordingly, when required. Litigation is, however, subject to uncertainty, and the outcome of any particular matter is not predictable. We will vigorously defend our interests in pending litigation, and as of this date, we believe that the ultimate resolution of all such matters, after considering insurance coverage or other indemnities to which we are entitled, will not have a material adverse effect on our consolidated financial position, results of operations, or our cash ~~flows~~.flows.

~~In October 2013,~~We conduct certain of our operations in leased premises and also lease certain equipment and other assets pursuant to operating leases. The lease arrangements have terms ranging from 1 to 99 years and several contain rent escalation clauses providing for increases in monthly rent at specific intervals. When rent escalation clauses exist, we record annual rental expense based on the ~~California Attorney General’s Office notified certain Verizon companies, including one of~~total expected rent payments on a straight-line basis over the ~~subsidiaries~~lease term. Certain leases also have renewal options. Renewal options that ~~we acquired~~are reasonably assured are included in determining the CTF Acquisition, of potential violations of California state hazardous waste statutes primarily arising from the disposal of electronic components, batteries and aerosol cans at certain California facilities. lease term.

We are ~~cooperating~~party to contracts with ~~this investigation. We have accrued an amount~~several unrelated long-distance carriers. The contracts provide fees based on traffic they carry for ~~potential penalties~~ us subject to minimum monthly fees.

‎

2834

PART I. FINANCIAL INFORMATION (Continued)

FRONTIER COMMUNICATIONS CORPORATIONPARENT, INC. AND SUBSIDIARIES

(Unaudited)

~~NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)~~

~~that we deem to be probable and reasonably estimated, and we do not expect that any potential penalties, if ultimately incurred, will be material in comparison to the established accrual.~~

~~PART I. FINANCIAL INFORMATION (Continued)~~

~~FRONTIER COMMUNICATIONS CORPORATION AND SUBSIDIARIES~~

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

Forward-Looking Statements

This Quarterly Report on Form 10-Q contains ~~"forward-looking statements,~~"forward-looking statements" related to future ~~not past,~~ events. Forward-looking statements address our ~~expected~~expectations or beliefs concerning future ~~business~~events, including, without limitation, our future operating and financial performance, our ability to comply with the covenants in the agreements governing our indebtedness and ~~financial condition,~~other matters. These statements are made on the basis of management’s views and assumptions, as of the time the statements are made, regarding future events and performance and contain words such as ~~"expect," "anticipate," "intend," "plan," "believe," "seek," "see," "will," "would,"~~“expect,” “anticipate,” “intend,” “plan,” “believe,” “seek,” “see,” “may,” “will,” “would,” or ~~"target."~~“target.” Forward-looking statements by their nature address matters that are, to different degrees, uncertain. ~~For us, particular uncertainties~~We do not intend, nor do we undertake any duty, to update any forward-looking statements.

A wide range of factors could materially affect future developments and performance, including but not limited to:

our significant indebtedness, our ability to incur substantially more debt in the future, and covenants in the agreements governing our indebtedness that ~~could cause~~may reduce our ~~actual results~~operating and financial flexibility;

declines in Adjusted EBITDA relative to ~~be materially different than those expressed~~historical levels that we are unable to offset;

our ability to successfully implement strategic initiatives, including our fiber buildout and other initiatives to enhance revenue and realize productivity improvements;

our ability to secure necessary construction resources, materials and permits for our fiber buildout initiative in a timely and cost-effective manner;

potential disruptions in our ~~forward-looking statements include:~~supply chain and the effects of inflation resulting from the COVID-19 pandemic, the global microchip shortage, or otherwise, which could adversely impact our business and hinder our fiber expansion plans;

~~competition from cable, wireless and wireline carriers, satellite, and OTT 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;

risks related to the operation of properties acquired from Verizon, including our ability to retain or obtain customers in those markets, our ability to realize anticipated cost savings, and our ability to meet commitments made in connection with the acquisition;

~~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;~~

~~our ability to attract/retain key talent;~~

~~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;~~

our ability to effectively manage our operations, operating expenses, capital expenditures, debt service requirement and cash paid for income taxes and liquidity;

competition from cable, wireless and wireline carriers, satellite, fiber “overbuilders” and over the top 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;

risks related to disruption in our networks, infrastructure and information technology that result in customer loss and/or incurrence of additional expenses;

the impact of potential information technology or data security breaches or other cyber-attacks or other disruptions;

our ability to retain or attract new customers and to maintain relationships with customers, including wholesale customers;

our reliance on a limited number of key supplies and vendors;

declines in revenue from our voice services, switched and nonswitched access and video and data services that we cannot stabilize or offset with increases in revenue from other products and services;

3035

PART I. FINANCIAL INFORMATION (Continued)

FRONTIER COMMUNICATIONS CORPORATIONPARENT, INC. AND SUBSIDIARIES

(Unaudited)

our ability to secure, continue to use or renew intellectual property and other licenses used in our business;

our ability to hire or retain key personnel;

our ability to dispose of certain assets or asset groups or to make acquisition of certain assets on terms that are attractive to us, or at all;

the effects of changes in the availability of federal and state universal service funding or other subsidies to us and our competitors and our ability to obtain future subsidies;

our ability to meet our CAF II and RDOF obligations and the risk of penalties or obligations to return certain CAF II and RDOF funds;

our ability to defend against litigation and potentially unfavorable results from current pending and future litigation;

our ability to comply with applicable federal and state consumer protection requirements;

the effects of governmental legislation and regulation on our business, including costs, disruptions, possible limitations on operating flexibility and changes to the competitive landscape resulting from such legislation or regulation;

the impact of regulatory, investigative and legal proceedings and legal compliance risks;

our ability to effectively manage service quality in the states in which we operate and meet mandated service quality metrics;

the effects of changes in income tax rates, tax laws, regulations or rulings, or federal or state tax assessments, including the risk that such changes may benefit our competitors more than us, as well as potential future decreases in the value of our deferred tax assets;

the effects of changes in accounting policies or practices;

our ability to successfully renegotiate union contracts;

the effects of increased medical expenses and pension and postemployment expenses;

changes in pension plan assumptions, interest rates, discount rates, regulatory rules and/or the value of our pension plan assets;

the likelihood that our historical financial information may no longer be indicative of our future performance;

the impact of adverse changes in economic, political and market conditions in the areas that we serve, the U.S. and globally, including but not limited to, disruption in our supply chain, inflation in pricing for key materials or labor, increased fuel and electricity costs, the cost of borrowing, or other adverse changes resulting from epidemics, pandemics and outbreaks of contagious diseases, including the COVID-19 pandemic, natural disasters, economic or political instability or other adverse public health developments;

potential adverse impacts of the COVID-19 pandemic on our business and operations, including potential disruptions to the work of our employees arising from health and safety measures such as social distancing, working remotely and recent applicable federal, state and local mandates and prohibitions, our ability to

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 2017 and beyond;

~~adverse changes in the credit markets;~~

~~adverse changes in the ratings given to our debt securities by nationally accredited ratings organizations;~~

~~the availability and cost of financing in the credit markets;~~

~~covenants in our indentures and credit agreements that may limit our operational and financial flexibility;~~

~~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 risks and other factors contained in our other filings with the U.S. Securities and Exchange Commission, including our reports on Form 10-K.~~

PART I. FINANCIAL INFORMATION (Continued)

FRONTIER COMMUNICATIONS PARENT, INC. AND SUBSIDIARIES

(Unaudited)

effectively manage increased demand on our network, our ability to maintain relationships with our current or prospective customers and vendors and the ability of our vendors to perform under current or proposed arrangements with us;

potential adverse impacts of climate change and increasingly stringent environmental laws, rules and regulations, and customer expectations;

market overhang from the substantial common stock holdings by our former creditors;

certain provisions of Delaware law and our certificate of incorporation that may prevent efforts by our stockholders to change the direction or management of our company; and

certain other factors set forth in our other filings with the SEC.

Any of the foregoing events, or other events, could cause our results to vary from management’s forward-looking statements included in this report. You should consider these important factors, as well as the risks contained in our most recent Form 10-K and other filings with the SEC, in evaluating any statement in this report or otherwise made by us or on our behalf. ~~The following information is unaudited and should be read in conjunction with the consolidated financial statements and related notes included in this report.~~ We have no obligation to update or revise these forward-looking statements and do not undertake to do so.

Investors should also be aware that while we do, at various times, communicate with securities analysts, it is against our policy to disclose to them selectively any material non-public information or other confidential information. Accordingly, investors should not assume that we agree with any statement or report issued by an analyst, irrespective of the content of the statement or report. To the extent that reports issued by securities analysts contain any projections, forecasts or opinions, such reports are not our responsibility.

‎

PART I. FINANCIAL INFORMATION (Continued)

FRONTIER COMMUNICATIONS CORPORATIONPARENT, INC. AND SUBSIDIARIES

(Unaudited)

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

~~On April 1, 2016,~~Frontier Communications Parent, Inc. is a provider of communications services in the United States, with approximately 2.8 million broadband customers and 14,746 employees, operating in 25 states as of September 30, 2022. We offer a broad portfolio of communications services for consumer and business customers. These services include data and Internet services, video services, voice services, access services, and advanced hardware and network solutions.

Business Overview

Frontier’s purpose is to Build Gigabit America^TM by expanding and transforming our fiber network in order to meet the rapidly increasing demand for data from both our consumer and business customers. We believe that a fiber network has competitive advantages to be able to meet this growing demand, including faster download speeds, faster upload speeds, and lower latency levels than alternative broadband services.

In August 2021, we ~~completed~~announced our ~~acquisition~~plan to accelerate our fiber build to reach 10 million total fiber passings by December 31, 2025. We are prioritizing our fiber build activities to locations which we believe will provide the highest investment returns. Over time, we expect our business mix will shift significantly, with a larger percentage of ~~Verizon’s wireline properties~~revenue coming from fiber as we implement our expansion plan.

Our strategy focuses on four levers of value creation: fiber deployment, fiber broadband penetration, improving the customer experience, and operational efficiency. We accomplished the following objectives in ~~California, Texas,~~the third quarter of 2022:

We built fiber to approximately 351,000 locations, resulting in approximately 4.8 million total locations passed with fiber as of September 30, 2022.

We added 66,000 fiber broadband customer net additions, resulting in fiber broadband customer growth of 15.8% versus the third quarter of 2021.

oIn our Base Fiber Network of 3.2 million locations, we achieved broadband penetration of 42.9%, an increase of 140bps from the third quarter of 2021 and ~~Florida (the CTF Acquisition,~~approaching our terminal penetration target of 45%.

oIn our Expansion Fiber markets, our target penetration is 15% - 20% after 12 months, 25% - 30% penetration after 24 months, and a terminal penetration of 45%. We have met or exceeded our targets for fiber locations constructed in 2020 and 2021:

Fiber locations constructed in 2020 reached broadband penetration of 22% and 42% after 12 and 24 months, respectively.

Fiber locations constructed in 2021 reached penetration of 17% after 12 months, which is within our target range of 15% - 20%.

Fiber broadband customer net additions continued to outpace copper broadband customer net losses, resulting in 4,000 total broadband customer net additions.

We realized $244 million of gross annualized cost savings as of September 30, 2022, achieving our 2023 target more than one year ahead of plan, and raised our target of gross annualized cost savings to $400 million by the end of 2024.

During the third quarter of 2022, markets remained volatile and the economic outlook remains uncertain. We continue to closely monitor market factors including potential disruptions in our supply chain, tightening labor markets, actual or perceived inflation, increased fuel and electricity costs, the cost of borrowing, and evolution of the ~~CTF Operations).Frontier’s scope of operations~~ongoing COVID-19 pandemic. We continuously evaluate the impact these and ~~balance sheet changed materially as a result of the completion of the CTF Acquisition. Historical~~other factors may have on our business, including demand for our products and services, our ability to execute on our strategic priorities and our financial condition

PART I. FINANCIAL INFORMATION (Continued)

FRONTIER COMMUNICATIONS PARENT, INC. AND SUBSIDIARIES

(Unaudited)

and ~~operating data presented for Frontier includes the~~ results of operations. Through September 30, 2022 the ~~CTF Operations that were acquired in~~overall operational and financial impacts to our business have not been material.

Financial Overview

We reported operating income of $169 million and $284 million for the ~~CTF Acquisition from the date~~three months ended September 30, 2022 and 2021, respectively, a decrease of ~~acquisition on April 1, 2016~~$115 million.

We reported operating income of $456 million and ~~is not indicative~~Non-GAAP operating income of ~~future operating results. The financial discussion below includes a comparative analysis of our results of operations on a historical basis as of and~~$841 million for the nine months ended September 30, ~~2017~~2022 and ~~2016.~~

~~On July 10, 2017, we effected~~2021, respectively, a ~~one~~decrease of $385 million. After adjusting for ~~fifteen reverse stock split~~the impact of fresh start accounting, our common stock. The reverse stock split reduced the number of common shares issued (which includes outstanding shares and treasury shares) from approximately 1,193,000,000 shares to 80,000,000 shares, and reduced shares outstanding from 1,178,000,000 shares to 79,000,000 shares. In addition, and at the same time, the total number of shares of common stock that Frontier is authorized to issue changed from 1,750,000,000 shares to 175,000,000 shares. There was no change in the par value of the common stock, and no fractional shares were issued. All share and per share amounts in the financial discussion belowNon-GAAP operating income would have ~~been retroactively adjusted for all periods presented to give effect~~decreased by $365 million, as compared to the ~~reverse stock split. As~~prior year period.

Our operating results decreased primarily due to decreases in subsidy and other revenue, voice and video services and lease impairment charges, partially offset by a reduction in cost of services and depreciation and amortization expense as a result of the lower asset bases established upon our ~~reverse stock split the conversion rates~~implementation of ~~our Series A Preferred Stock were proportionately adjusted.~~

~~Our financial results for the first nine months of 2017 include the CTF Operations for the first quarter of 2017. With the acquisition occurring April 1, 2016, there are no comparative results for~~fresh start accounting and lower video content costs as compared to the corresponding ~~period~~periods in ~~2016. The table below reflects the results~~2021.

Presentation of ~~operations for the CTF~~Results of Operations ~~for the first quarter of 2017. In the narrative that follows for the nine month period, unless otherwise noted we will only discuss the remaining variance.~~



	~~For the three months ended~~
(~~$ in millions~~)	~~March 31, 2017~~

~~Data and Internet services~~	$	~~422~~
~~Voice services~~		~~327~~
~~Video services~~		~~281~~
~~Other~~		5
~~Customer revenue~~		~~1,035~~
~~Switched access and subsidy~~		52
~~Total revenue~~	$	~~1,087~~

~~Network access expenses~~	$	~~261~~
~~Network related expenses~~		~~197~~
~~Selling, general and administrative expenses~~		~~226~~
~~Depreciation and amortization~~		~~280~~
~~Acquisition and integration costs~~		-
~~Pension settlement costs~~		22
~~Restructuring costs and other charges~~		1
~~Total operating expenses~~	$	~~987~~

~~PART I. FINANCIAL INFORMATION (Continued)~~

~~FRONTIER COMMUNICATIONS CORPORATION AND SUBSIDIARIES~~

The sections below include tables that present customer counts, average monthly consumer revenue per customer ~~(ARPC)~~(“ARPC”) and consumer customer churn. We define churn ~~which we define~~ as ~~the average of~~ the number of consumer customer deactivations during the month divided by the number of consumer customers at the beginning of the ~~month.~~

month and utilize the average of each monthly churn in the period. Management believes that consumer customer counts and average monthly revenue per customer are important factors in evaluating our consumer customer trends. Among the key services we provide to consumer customers are voice service, data service and video service. We continue to explore the potential to provide additional services to our customer base, with the objective of meeting ~~all of~~ our customers’ communications needs.

The following section should be read in conjunction with the unaudited interim consolidated financial statements and related notes appearing elsewhere in this Quarterly Report on Form 10-Q and Item 7. “Management’s Discussion and Analysis of Financial Condition and Results of Operations” included in our Annual Report on Form 10-K for the year ended December 31, ~~2016.~~2021. The following charts present key customer metrics, disaggregation of revenue, and the results of operations of the consolidated company.

(a)Results of Operations

Unless otherwise indicated, the discussion of the customer metrics and components of operating income for the table that follows relates only to the Non-GAAP financial results for the nine months ended September 30, 2022, as compared to the financial results for the nine months ended September 30, 2021.

‎

3339

PART I. FINANCIAL INFORMATION (Continued)

FRONTIER COMMUNICATIONS CORPORATIONPARENT, INC. AND SUBSIDIARIES

(Unaudited)

~~(a)~~

~~Results of Operations~~

~~CUSTOMER RELATED METRICS~~

As of or for the three months ended

September 30, 2017

December 31, 2016

% Increase (Decrease)

September 30, 2016

% Increase (Decrease)

Customers (in thousands)

4,949

5,393

(8)
%

5,551
(1)
(11)
%

Consumer customer metrics

Customers (in thousands)

4,486

4,891

(8)
%

5,035
(1)
(11)
%

Net customer additions/(losses)

(99)

(144)

(31)
%

(155)

(36)
%

Average monthly consumer

revenue per customer

$
80.91

$
80.33

1
%

$
82.34

(2)
%

Customer monthly churn

2.08%

2.08%

-
%

2.08%

-
%

Commercial customer metrics

Customers (in thousands)

463

502

(8)
%

516
(1)
(10)
%

Broadband subscriber metrics

(in thousands)

Broadband subscribers

4,000

4,271

(6)
%

4,362
(2)
(8)
%

Net subscriber additions/(losses)

(63)

(91)

(31)
%

(99)

(36)
%

Video (excl. DISH) subscriber metrics

(in thousands)

Video subscribers (in thousands)

981

1,145

(14)
%

1,222
(2)
(20)
%

Net subscriber additions/(losses)

(26)

(77)

(66)
%

(82)

(68)
%

DISH subscriber metrics

(in thousands)

DISH subscribers (in thousands)

244

274

(11)
%

281
(2)
(13)
%

Net subscriber additions/(losses)

(10)

(7)

43
%

(11)

(9)
%

Employees

23,181
(3)

28,332

(18)
%

30,358

(24)
%

As of or for the nine months ended

September 30, 2017

September 30, 2016

% Increase

Consumer customer metrics

Average monthly consumer

revenue per customer

$
80.73

$
76.11

6
%

Customer monthly churn

2.23%

1.94%

15
%

⁽¹⁾

~~2,283,000 consumer customers, 250,000 commercial customers and 2,533,000 total customers were acquired at the time of the April 2016 CTF Acquisition.~~

⁽²⁾

~~2,052,000 broadband subscribers and 1,165,000 video subscribers were acquired at the time of the April 2016 CTF Acquisition.~~

⁽³⁾

~~At December 31, 2016, we had approximately 1,900 employees in our Frontier Secure Strategic Partnerships business, which was sold in May 2017.~~

Customer Trends ~~and Revenue Performance~~


	As of or for the three months ended September 30,
(Customer and Employee Metrics in thousands)	2022		2021		% Change
Customers
Consumer		3,142		3,173	(1)	%

Consumer Customer Metrics
Net customer additions (losses)		(17)		(23)	(26)	%
ARPC	$	83.05	$	83.77	(1)	%
Customer Churn		1.76%		1.64%	7	%

Broadband Customer Metrics ⁽¹⁾
Fiber Broadband
Consumer customers		1,502		1,292	16	%
Business customers		104		95	9	%
Consumer net customer additions		64		29	121	%
Consumer customer churn		1.60%		1.56%	3	%
Consumer customer ARPU	$	62.97	$	63.35	(1)	%
Copper Broadband
Consumer customers		1,105		1,264	(13)	%
Business customers		120		138	(13)	%
Consumer net customer additions (losses)		(58)		(33)	76	%
Consumer customer churn		2.02%		1.89%	7	%
Consumer customer ARPU	$	49.65	$	45.44	9	%

Other Metrics
Employees		14,746		15,803	(7)	%


		For the nine months ended September 30,
	(Customer and Employee Metrics in thousands)	2022		2021		% Change
	Consumer Customer Metrics
	Net customer additions (losses)		(23)		(92)	(75)	%
	ARPC	$	82.68	$	85.49	(3)	%
	Customer Churn		1.55%		1.54%	1	%

	Broadband Customer Metrics ⁽¹⁾
	Fiber Broadband
	Consumer net customer additions		166		54	207	%
	Consumer customer churn		1.41%		1.50%	(6)	%
	Consumer customer ARPU	$	62.84	$	62.38	1	%
	Copper Broadband
	Consumer net customer additions (losses)		(129)		(85)	52	%
	Consumer customer churn		1.76%		1.73%	2	%
	Consumer customer ARPU	$	47.93	$	44.47	8	%

⁽¹⁾	Amounts presented exclude related metrics for our wholesale customers.

‎

PART I. FINANCIAL INFORMATION (Continued)

FRONTIER COMMUNICATIONS PARENT, INC. AND SUBSIDIARIES

(Unaudited)

Customers

We ~~provide service and product options~~experienced a decrease in ~~our consumer and commercial offerings in each~~customers of ~~our markets. As of September 30, 2017, 68% of our consumer broadband customers were subscribed to at least one other service offering.~~

~~We had~~ approximately ~~4,486,000 and 5,035,000 total consumer customers~~1% as of September 30, ~~2017 and 2016, respectively. Our~~2022, as compared to the prior year period.

The average monthly consumer revenue per customer ~~churn was 2.08%~~(“consumer ARPC”) decreased $0.72, or 1%, to $83.05 for the three months ended September 30, 2017 (1.92% for Frontier legacy and 2.33% for CTF Operations) compared to 2.08% (1.89% for Frontier legacy and 2.34% for CTF Operations) for the third quarter of 2016 and 2.24% (1.95% for Frontier legacy and 2.69% for CTF Operations) for the second quarter of 2017, respectively. The consolidated average monthly consumer revenue per customer

~~PART I. FINANCIAL INFORMATION (Continued)~~

~~FRONTIER COMMUNICATIONS CORPORATION AND SUBSIDIARIES~~

~~(consumer ARPC) decreased by $1.43 or 2% to $80.91 during the third quarter of 2017~~2022, compared to the prior year ~~period. The overall decrease in consumer ARPC is a result of lower voice services revenue~~period; and ~~lower video revenue from our CTF Operations, partially offset by higher Frontier Secure revenue.~~

~~Our consumer customer churn was 2.23%~~decreased $2.81, or 3%, to $82.68 for the nine months ended September 30, ~~2017 (1.94% for Frontier legacy and 2.68% for CTF Operations)~~2022, compared to ~~1.94% (1.81%~~the prior year period.

The decrease for the quarter ended September 30, 2022, was primarily a result of decreased video services and consumer voice services, slightly offset by increased fiber data as well as price adjustments and promotional roll-offs on our voice, data and video services. The moderate decline in ARPC is expected to continue as our customer mix becomes more weighted towards broadband service. We have de-emphasized the sale of low margin video products, which have been a material part of the overall ARPC. In our expansion markets, we expect fiber broadband penetration of 15% and 20% within 12 months and 25% - 30% after 24 months.

Fiber Broadband Customers

We have initiated an investment strategy focused on expanding and improving our fiber network. In conjunction with this strategy, we are also working to improve our product positioning in both existing and new fiber markets.

Although still in the early stages of this fiber investment strategy, results are promising. The quarter ended September 30, 2022 represents the thirteenth consecutive quarter of positive consumer fiber net adds. For the quarter ended September 30, 2022, Frontier ~~legacy~~added 64,000 consumer fiber broadband customers compared to 29,000 for the three months ended September 30, 2021. Customers who migrated from our copper base constituted a minor portion of these consumer fiber broadband customer net additions in the nine months ended September 30, 2022.

For the three and ~~2.27%~~nine months ended September 30, 2022, Frontier added 2,000 and 8,000 business fiber broadband customers compared to zero net additions for ~~CTF Operations)~~both the three and nine months ended September 30, 2021.

Our focus on expanding and improving our fiber network is contributing to healthy customer retention. Our average monthly consumer fiber broadband churn was 1.60% for the three months ended September 30, 2022, compared to 1.56% for the prior year period. Improvements in customer churn due to increased focus at key customer touchpoints such as installation, first bill, end of promotion periods, and improved retention activities associated with inflation-related pricing actions, were offset by increases in involuntary related churn.

The average monthly consumer fiber broadband revenue per customer (“Consumer ARPU”) decreased $0.38 to $62.97 for the three months ended September 30, 2022, compared to the prior year period, as the positive impacts of price increases and customers adopting faster speed tiers were offset by the negative impacts of gift cards and auto-pay discounts. During the three months ended September 30, 2022 we had a greater degree of gift card issuances than we did in the prior year quarter. Gift cards had a negative impact to consumer fiber broadband ARPU of $1.66 for the three months ended September 30, 2022, as compared to $0.24 for the three months ended September 30, 2021.

Consumer ARPU increased $0.46 to $62.84 for the nine months ended September 30, ~~2016. The consolidated average monthly consumer revenue per customer (consumer ARPC) increased by $4.62 or 6% to $80.73 during the first nine months of 2017~~2022, compared to the prior year ~~period. The overall increase in consumer ARPC is a result of higher revenue~~period, primarily due to ~~having~~price increases and shifting mix towards higher speed tiers, a shift which has accelerated since the launch of our 2 gigabit offering on February 22, 2022. Gift cards had a negative impact to ARPU of $1.38 for the nine months ~~of CTF Operations in 2017 and only six months in 2016, partially offset by lower voice services revenue.~~

~~We had approximately 463,000 and 516,000 total commercial customers as of~~ended September 30, ~~2017 and 2016, respectively. We lost approximately 10,000 commercial customers during~~2022, as compared to $0.08 for the nine months ended September 30, 2021.

PART I. FINANCIAL INFORMATION (Continued)

FRONTIER COMMUNICATIONS PARENT, INC. AND SUBSIDIARIES

(Unaudited)

Copper Broadband Customers

For the three months ended September 30, ~~2017~~2022, Frontier lost 58,000 consumer copper broadband customers compared to a loss of ~~12,000 customers~~33,000 for the three months ended September 30, ~~2016 and~~2021.

Consumer copper broadband customer losses were 129,000 for the nine months ended September 30, 2022, compared to a loss of ~~11,000~~85,000 for the ~~three~~nine months ended June 30, 2017. Frontier expects the declines in voice services revenue and wireless backhaul revenues from commercial customers to continue for the remainder of 2017. Our Ethernet product revenues from our SME (small business, medium business and larger enterprise customers) and carrier customers have grown by 9% for the Frontier legacy operations during the third quarter of 2017, compared to the prior year period, and declined by 3% (including CTF Operations) compared to the second quarter of 2017.

~~We had approximately 4,000,000 and 4,362,000 broadband subscribers as of~~ September 30, ~~2017 and 2016, respectively. During~~2021.

For the three months ended September 30, ~~2017, we~~2022, Frontier lost ~~approximately 63,000 net~~4,000 business copper broadband ~~subscribers~~customers compared to a loss of ~~99,000 and~~4,000 in the three months ended September 30, 2021. Business copper broadband customers losses were 13,000 in the nine months ended September 30, 2022, compared to a loss of ~~99,000~~14,000 in the nine months ended September 30, 2021.

Our average monthly consumer copper broadband churn was 2.02% for the three months ended September 30, ~~2016 and June 30, 2017, respectively.~~

~~We offer video services under the Vantage brand~~2022, compared to ~~certain of our customers~~1.89% in ~~portions of Connecticut, North Carolina, South Carolina and Minnesota, and under the FiOS~~® brand in portions of California, Texas, and Florida (and on a limited basis in Indiana, Oregon and Washington). We also offer satellite TV video service to our customers under an agency relationship with DISH® ~~in all of our markets. For~~ the three months ended September 30, ~~2017, we lost approximately 36,000 net video subscribers across all markets. At~~2021. Consumer copper broadband churn was 1.76% for the nine months ended September 30, ~~2017, we had 981,000 linear video subscribers that are served with FiOS or Vantage video service. In addition~~2022, compared to 1.73% in the nine months ended September 30, 2021. The increase in consumer copper broadband churn was driven by the impact of copper to fiber migration activities in newly built fiber areas, the rationalization of our ~~linear video subscribers, we have approximately 244,000 DISH satellite video customers.~~copper acquisition strategy, and adverse weather.

‎

3542

PART I. FINANCIAL INFORMATION (Continued)

FRONTIER COMMUNICATIONS CORPORATIONPARENT, INC. AND SUBSIDIARIES

(Unaudited)

~~REVENUE~~

Financial Results

For the three months ended September 30,

$ Increase

% Increase
($ in millions)

2017

2016

(Decrease)

(Decrease)

Data and Internet services (1)

$
956

$
1,045

$
(89)

(9)
%
Voice services

702

809

(107)

(13)
%
Video services

318

392

(74)

(19)
%
Other

84

73

11

15
%
Customer revenue (1)

2,060

2,319

(259)

(11)
%
Switched access and

subsidy

191

205

(14)

(7)
%
Total revenue (1)

$
2,251

$
2,524

$
(273)

(11)
%

For the three months ended September 30,

$ Increase

% Increase

2017

2016

(Decrease)

(Decrease)

Consumer

$
1,102

$
1,272

$
(170)

(13)
%
Commercial

958

1,047

(89)
��

(9)
%
Customer revenue (1)

2,060

2,319

(259)

(11)
%
Switched access and

subsidy

191

205

(14)

(7)
%
Total revenue (1)

$
2,251

$
2,524

$
(273)

(11)
%

For the nine months ended September 30,

$ Increase

% Increase
($ in millions)

2017

2016

(Decrease)

(Decrease)

Data and Internet services (1)

$
2,923

$
2,680

$
243

9
%
Voice services

2,177

2,112

65

3
%
Video services

994

879

115

13
%
Other

231

218

13

6
%
Customer revenue (1)

6,325

5,889

436

7
%
Switched access and

subsidy

586

598

(12)

(2)
%
Total revenue (1)

$
6,911

$
6,487

$
424

7
%

For the nine months ended September 30,

$ Increase

% Increase

2017

2016

(Decrease)

(Decrease)

Consumer

$
3,390

$
3,187

$
203

6
%
Commercial

2,935

2,702

233

9
%
Customer revenue (1)

6,325

5,889

436

7
%
Switched access and

subsidy

586

598

(12)

(2)
%
Total revenue (1)

$
6,911

$
6,487

$
424

7
%


	For the three months ended September 30,		For the three months ended September 30,
	2022		2021		% Change
Data and Internet services	$	848	$	834	2	%
Voice services		369		411	(10)	%
Video services		127		149	(15)	%
Other		82		99	(17)	%
Revenue from contracts with customers		1,426		1,493	(4)	%
Subsidy and other revenue		18		83	(78)	%
Revenue		1,444		1,576	(8)	%

Operating expenses:
Cost of Service		544		590	(8)	%
Selling, general, and administrative expenses		431		421	2	%
Depreciation and amortization		296		273	8	%
Restructuring costs and other charges		4		8	(50)	%
Total operating expenses	$	1,275	$	1,292	(1)	%

Operating income		169		284	(40)	%

Consumer		785		800	(2)	%
Business and wholesale		641		693	(8)	%
Revenue from contracts with customers	$	1,426	$	1,493	(4)	%

Fiber revenue		691		684	1	%
Copper revenue		735		809	(9)	%
Revenue from contracts with customers	$	1,426	$	1,493	(4)	%

‎

PART I. FINANCIAL INFORMATION (Continued)

FRONTIER COMMUNICATIONS PARENT, INC. AND SUBSIDIARIES

(Unaudited)


	Successor				Predecessor		Non-GAAP Combined
	For the nine months ended September 30,		For the five months ended September 30,		For the four months ended April 30,		For the nine months ended September 30,
	2022		2021		2021		2021		% Change
Data and Internet services	$	2,531	$	1,390	$	1,125	$	2,515	1	%
Voice services		1,136		694		647		1,341	(15)	%
Video services		398		254		223		477	(17)	%
Other		245		161		125		286	(14)	%
Revenue from contracts with customers		4,310		2,499		2,120		4,619	(7)	%
Subsidy and other revenue		40		138		111		249	(84)	%
Revenue		4,350		2,637		2,231		4,868	(11)	%

Operating expenses:
Cost of Service		1,643		986		830		1,816	(10)	%
Selling, general, and administrative expenses		1,293		690		537		1,227	5	%
Depreciation and amortization		870		452		506		958	(9)	%
Restructuring costs and other charges		88		19		7		26	238	%
Total operating expenses	$	3,894	$	2,147	$	1,880	$	4,027	(3)	%

Operating income		456		490		351		841	(46)	%

Consumer		2,352		1,343		1,133		2,476	(5)	%
Business and wholesale		1,958		1,156		987		2,143	(9)	%
Revenue from contracts with customers	$	4,310	$	2,499	$	2,120	$	4,619	(7)	%

Fiber revenue		2,048		1,139		903		2,042	0	%
Copper revenue		2,262		1,360		1,140		2,500	(10)	%
Non-network specific revenue		-		-		77		77	(100)	%
Revenue from contracts with customers	$	4,310	$	2,499	$	2,120	$	4,619	(7)	%

‎

PART I. FINANCIAL INFORMATION (Continued)

FRONTIER COMMUNICATIONS PARENT, INC. AND SUBSIDIARIES

(Unaudited)

REVENUE

The table below presents our revenue by technology for the periods indicated:


	Successor
	For the three months		For the three months
	ended September 30,		ended September 30,		$ Increase		% Increase
($ in millions)	2022		2021		(Decrease)		(Decrease)
Fiber	$	691	$	684	$	7	1	%
Copper		735		809		(74)	(9)	%
Revenue from contracts with customers ⁽¹⁾		1,426		1,493		(67)	(4)	%
Subsidy revenue		18		83		(65)	(78)	%
Total revenue	$	1,444	$	1,576	$	(132)	(8)	%


	Successor		Non-GAAP Combined
	For the nine months		For the nine months
	ended September 30,		ended September 30,		$ Increase		% Increase
($ in millions)	2022		2021		(Decrease)		(Decrease)
Fiber	$	2,048	$	2,042	$	6	0	%
Copper		2,262		2,500		(238)	(10)	%
Other ⁽²⁾		-		77		(77)	(100)	%
Revenue from contracts with customers ⁽¹⁾		4,310		4,619		(309)	(7)	%
Subsidy revenue		40		249		(209)	(84)	%
Total revenue	$	4,350	$	4,868	$	(518)	(11)	%

⁽¹⁾Includes lease revenue ~~from Frontier Secure Strategic Partnerships business, which was sold in May~~ of ~~2017, of $22~~$15 million and $16 million for the three months ended September 30, ~~2016~~2022 and ~~$40~~2021, respectively. Lease revenue was $48 million and ~~$62~~$47 million for the nine months ended September 30, ~~2017~~2022 and ~~2016,~~2021, respectively.

⁽²⁾Includes USF fees that, in conjunction with the application of fresh start accounting, are now recorded net.

Our revenue streams are primarily generated by recurring data, voice, and video services delivered over either our copper or fiber network. Revenues are considered copper or fiber based on the “last-mile” technology used to connect the customer location. With our investment strategy to expand and improve our fiber network and the corresponding fiber focus of our sales and marketing efforts, we are experiencing growth in fiber broadband revenue and a decline in copper revenue. We expect this trend to continue due to strong fiber demand and the migration of customers from copper to fiber once the fiber network is available.

PART I. FINANCIAL INFORMATION (Continued)

FRONTIER COMMUNICATIONS CORPORATIONPARENT, INC. AND SUBSIDIARIES

(Unaudited)

Revenue for our consumer and business and wholesale customers was as follows:


	Successor
	For the three months ended September 30,		For the three months ended September 30,		$ Increase		% Increase
($ in millions)	2022		2021		(Decrease)		(Decrease)
Consumer	$	785	$	800	$	(15)	(2)	%
Business and wholesale		641		693		(52)	(8)	%
Revenue from contracts with customers ⁽¹⁾		1,426		1,493		(67)	(4)	%
Subsidy and other revenue		18		83		(65)	(78)	%
Total revenue	$	1,444	$	1,576	$	(132)	(8)	%

	Successor		Non-GAAP Combined
	For the nine months ended September 30,		For the nine months ended September 30,		$ Increase		% Increase
($ in millions)	2022		2021		(Decrease)		(Decrease)
Consumer	$	2,352	$	2,476	$	(124)	(5)	%
Business and wholesale		1,958		2,143		(185)	(9)	%
Revenue from contracts with customers ⁽¹⁾		4,310		4,619		(309)	(7)	%
Subsidy and other revenue		40		249		(209)	(84)	%
Total revenue	$	4,350	$	4,868	$	(518)	(11)	%

⁽¹⁾Includes lease revenue of $15 million and $16 million for the three months ended September 30, 2022 and 2021, respectively. Lease revenue was $48 million and $47 million for the nine months ended September 30, 2022 and 2021, respectively.

We conduct business with a range of consumer, business and wholesale customers and we generate both recurring and non-recurring revenues. Recurring revenues are primarily ~~through either a monthly~~billed at fixed recurring ~~fee or a fee~~rates, with some services billed based on ~~usage, and revenue~~usage. Revenue recognition is not dependent upon significant judgments by management, with the exception of a determination of the provision for ~~uncollectible amounts.~~expected credit losses.

~~Consolidated total revenue for~~
‎

PART I. FINANCIAL INFORMATION (Continued)

FRONTIER COMMUNICATIONS PARENT, INC. AND SUBSIDIARIES

(Unaudited)

Consumer

Consumer customer losses were driven by reductions in our copper broadband and stand-alone voice customers, partially offset by net additions of fiber broadband customers. Customer preferences as well as our fiber investment initiative are resulting in a migration of our customer base to fiber.

We lost 17,000 and 23,000 consumer customers in the three months ended September 30, 2022 and 2021.

We lost 23,000 and 92,000 consumer customers in the nine months ended September 30, ~~2017 increased $424 million~~2022 and 2021.

Our loss in 2022 includes net gains of consumer broadband customers of 6,000 and 37,000 for the three and nine months ended September 30, 2022.

Our improvement in consumer broadband customers is a direct result of our fiber initiatives.

For the three and nine months ended September 30, 2022, compared to ~~$6,911 million~~the three and nine months ended September 30, 2021:

We experienced 2% decline in consumer revenues for the three months ended September 30, 2022, driven by a 1% decrease in ARPC, as compared to the ~~prior year period. Excluding additional revenue from the CTF Operations for the first quarter of 2017, our revenue for the first nine~~three months of 2017 decreased $663 million, or 10%, as compared to the prior year period. This decline in 2017 is primarily the result of decreases in voice services revenues, lower switched and nonswitched access revenue, video, and data services revenue, each as described in more detail below.

~~Customer revenue for~~ended September 30, 2021. For the nine months ended September 30, ~~2017 increased $436 million to $6,325 million~~2022, consumer revenues declined 5% driven by a 3% decrease in ARPC and 1% decline in the number of customers as compared to the prior year period. Excluding additional revenue from the CTF Operations for the first quarter of 2017, our customer revenue for the first nine months of 2017 decreased $599 million, or 10%, as compared to the prior year period.

Consolidated consumer customer revenue for the nine months ended September 30, 2017 increased $203 million, or 6%, as compared to the prior year period. Excluding additional consumer customer revenue from the CTF Operations for the first quarter of 2017, revenues for the first nine months of 2017 decreased $411 million, or 13%, compared to the prior yearsame period ~~primarily~~in 2021. This decline was driven predominantly as a result of decreases in voice, video and ~~data services revenue. Similar~~copper broadband, offset by increases in fiber broadband. The Company’s fiber initiative will result in our revenue mix continuing to ~~other wireline providers, we have~~move to fiber broadband.

We experienced ~~declines~~14% and 13% improvement in consumer fiber broadband revenues for the ~~number of traditional voice customers~~three and ~~switched access minutes of use as~~nine months ended September 30, 2022, respectively. This improvement is a result of ~~competition~~our fiber initiative which resulted in net adds of 210,000 customers during the twelve month period, and our continued focus on product positioning in both new and existing markets which resulted in ARPU decline of $0.38 and improvement of $0.46 for the ~~availability~~three and nine months ended September 30, 2022 compared to the three and nine months ended September 30, 2021. ARPU for both periods of ~~substitutes, a trend~~2022 were impacted by credits issued to incentivize customers to auto-pay bills and by the issuance of gift cards as part of our acquisition offers.

We experienced approximately 3% and 3% decline in consumer copper broadband revenues for the three and nine months ended September 30, 2022. As our copper footprint is transitioned to fiber, we expect fewer copper sales opportunities, and will proactively migrate existing broadband customers from copper to ~~continue.~~fiber, both of which will reduce our copper net adds.

~~Consolidated commercial customer~~Business

For the three and nine months ended September 30, 2022, we experienced an 8% and 9% decline in our business and wholesale revenues, respectively. Business revenues declined primarily due to the secular pressures in copper voice revenue as well as the loss of equipment revenue associated with the sale of our equipment subsidiary. Wholesale revenues declined primarily due to secular pressures in copper voice revenue, legacy circuit revenue, and lower rates for our network access services charged to our wholesale customers for the nine months ended September 30, ~~2017 increased $233~~2022.

PART I. FINANCIAL INFORMATION (Continued)

FRONTIER COMMUNICATIONS PARENT, INC. AND SUBSIDIARIES

(Unaudited)

Revenue by product and service type was as follows:


	For the three months ended September 30,		For the three months ended September 30,		$ Increase		% Increase
($ in millions)	2022		2021		(Decrease)		(Decrease)
Data and Internet services	$	848	$	834	$	14	2	%
Voice services		369		411		(42)	(10)	%
Video services		127		149		(22)	(15)	%
Other		82		99		(17)	(17)	%
Revenue from contracts with customers ⁽¹⁾		1,426		1,493		(67)	(4)	%
Subsidy and other revenue		18		83		(65)	(78)	%
Total revenue	$	1,444	$	1,576	$	(132)	(8)	%

	Successor		Non-GAAP Combined
	For the nine months ended September 30,		For the nine months ended September 30,		$ Increase		% Increase
($ in millions)	2022		2021		(Decrease)		(Decrease)
Data and Internet services	$	2,531	$	2,515	$	16	1	%
Voice services		1,136		1,341		(205)	(15)	%
Video services		398		477		(79)	(17)	%
Other		245		286		(41)	(14)	%
Revenue from contracts with customers ⁽¹⁾		4,310		4,619		(309)	(7)	%
Subsidy and other revenue		40		249		(209)	(84)	%
Total revenue	$	4,350	$	4,868	$	(518)	(11)	%

⁽¹⁾Includes lease revenue of $15 million ~~or 9%, as compared to the prior year period. Excluding additional commercial customer revenue from the CTF Operations~~and $16 million for the first quarter of 2017, revenues for 2017 declined $188 million, or 7%, as compared to the prior year period, principally as a result of decreases in our voice services revenue and nonswitched revenue including wireless backhaul revenue.

~~Consolidated switched access and subsidy revenue of $586 million represented 8% of our revenues for the nine~~three months ended September 30, ~~2017. Switched access~~2022 and 2021, respectively. Lease revenue was ~~$129~~$48 million ~~for both the first nine months of 2017~~ and 2016, or 2% of our revenues for each period. The Report and Order released by the FCC on November 18, 2011 (the 2011 Order) provided for the gradual elimination of terminating traffic charges by 2017 with a related decline in operating expenses. Switched access revenue declined sequentially in the third quarter of 2017, reflecting the rate reductions mandated by the 2011 Order, and we anticipate that we have experienced nearly all of the rate decline related to the 2011 Order. We have been able to recover a significant portion of these lost revenues through end user rates and other replacement support mechanisms, a trend we expect will continue throughout 2017. We expect declining revenue trends due to reduced volume in switched access revenue to continue in the fourth quarter of 2017 in our legacy operations. Subsidy revenue, including CAF Phase II subsidies, was $457$47 million for the nine months ended September 30, ~~2017, or 7% of our revenues, which decreased from $468 million, or 7% of our revenues, in the prior year period.~~ 2022 and 2021, respectively.

We categorize our products, services, and other revenues into the following five categories:

Data and Internet Services

~~Data and internet services include broadband services for consumer and commercial customers.~~ We provide data ~~transmission~~and Internet services to ~~high volume commercial customers~~our consumer, business and ~~other carriers with dedicated high capacity circuits (“nonswitched access”) including services to wireless providers (“wireless backhaul”).~~

wholesale customers. Data and Internet services consist of fiber broadband services, copper broadband services and network access revenues.

Our fiber expansion strategy is expected to positively impact data and Internet services. This network expansion will provide faster, symmetrical broadband speeds and provide customer and revenue growth opportunities for ~~the three months ended September 30, 2017 decreased $89 million as compared with 2016. Data~~fiber broadband and certain network access products like ethernet. This initiative will also create an opportunity for us to provide more fiber-based services ~~revenue for the three months ended September 30, 2017 decreased $65 million, or 11%,~~ to ~~$548 million, primarily due to an 8% decrease in the total number of broadband subscribers since September 30, 2016, and a decline in revenue of approximately $22 million due to the sale of~~ our ~~Frontier Secure Strategic Partnerships business. Nonswitched access revenues for the three months ended September 30, 2017~~customers.

‎

3748

PART I. FINANCIAL INFORMATION (Continued)

FRONTIER COMMUNICATIONS CORPORATIONPARENT, INC. AND SUBSIDIARIES

(Unaudited)

~~decreased $25 million, or~~


($ in millions)	For the three months ended		For the nine months ended
Data and Internet services revenue, September 30, 2021	$	834	$	2,515
Change in fiber broadband revenue		38		101
Change in copper broadband revenue		(9)		(31)
Change in other data and Internet services		(15)		(52)
Impact of fresh start accounting		-		(2)
Data and Internet services revenue, September 30, 2022	$	848	$	2,531

Upon emergence from bankruptcy, the accumulated balances in deferred installation fee revenue were eliminated as part of fresh start accounting, which has resulted in a decline in revenue recognition.

The revenue growth was primarily driven by a 6%, and 5% improvement in our broadband revenue offset by declines in other data revenue for the three and nine months ended September 30, 2022, respectively, as compared to ~~$408 million, primarily due~~the corresponding periods in 2021. The increases in broadband revenue were driven by growth in fiber, offset somewhat by continued declines in copper. The other data revenues declines were the result of an ongoing migration of our carrier customers from legacy technology circuits to lower ~~monthly recurring revenues for wireless backhaul and other carrier services.~~

~~Consolidated~~priced ethernet circuits. The period over period decrease in data and Internet services revenue continued to improve for the three and nine months ended September 30, 2017 increased $243 million as compared with 2016. Consolidated data services revenue for the nine months ended September 30, 2017 increased $128 million, or 8%, to $1,696 million as compared with 2016. Excluding additional data service revenue from the CTF Operations for the first quarter of 2017, revenue for the first nine months decreased $111 million, or 7%, driven by a reduction in revenue of $22 million2022, as a result of the ~~sale of the Frontier Secure Strategic Partnerships business in May of 2017 and a decrease in the total number of broadband subscribers.~~ Company’s initiatives.

Consolidated nonswitched access revenues for the nine months ended September 30, 2017 increased $115 million or 10% to $1,277 million as compared with 2016. Excluding additional nonswitched access revenue from the CTF Operations for the first quarter of 2017, revenue decreased $67 million, or 6%, due to lower monthly recurring revenue for wireless backhaul and other carrier services. We expect wireless data usage to continue to increase, which may drive the need for additional wireless backhaul capacity. Despite the need for additional capacity, in the near term, we anticipate that our overall wireless backhaul revenues (which comprise approximately 2.9% of consolidated total revenues) will continue to decline in 2017, as our carrier customers migrate to Ethernet solutions at lower price points or migrate to our competitors.

Voice Services

~~Voice~~The Company provides voice services ~~include~~consisting of traditional local and ~~long distance wireline services, data-based Voice~~long-distance service and voice over Internet ~~Protocol~~protocol (VoIP) ~~services,~~service provided over our fiber and copper broadband products. It also includes enhanced features such as ~~well as~~call waiting, caller identification and voice messaging ~~services offered~~services.


($ in millions)	For the three months ended		For the nine months ended
Voice services revenue, September 30, 2021	$	411	$	1,341
Change in other voice services revenue		(42)		(129)
Impact of fresh start accounting		-		(76)
Voice services revenue, September 30, 2022	$	369	$	1,136

Upon implementation of fresh start accounting policies, Frontier is recording both revenue and expense related to ~~our consumer and commercial customers. Voice services also include the long distance voice origination and termination services that we provide~~Universal Service Fund (“USF”) surcharges on a net basis, as opposed to ~~our commercial customers and other carriers.~~

~~Voice services revenue for the three months ended September 30, 2017 decreased $107 million, or 13%,~~recording each on a gross basis prior to ~~$702 million as compared with 2016,~~emergence. These declines were primarily due to ~~the continued loss of voice~~net losses in business and consumer customers ~~and decreases~~ in ~~long distance revenue among those~~addition to fewer customers ~~that do not have a bundled long distance plan.~~

~~Voice services revenue for the nine months ended September 30, 2017 increased $65 million, or 3%, to $2,177 million as compared with 2016. Excluding additional~~bundling voice services ~~revenue from the CTF Operations for the first quarter of 2017, revenues decreased $262 million, or 12%, due to the continued loss of voice customers and decreases in long distance revenue.~~ with broadband.

Video Services

Video servicesinclude revenues generated from traditional television (TV) services provided directly to consumer customers ~~through the FiOS video and Vantage video brands, and through DISH~~as well as satellite TV ~~services.~~

services provided through Dish. Video services ~~revenue for~~also includes pay-per-view revenues, video on demand, equipment rentals, and video advertising. The Company has made the ~~three months ended September 30, 2017 decreased $74 million, or 19%,~~strategic decision to ~~$318 million as compared with 2016 due to a decrease in the total number of video subscribers.~~

Video services revenue for the nine months ended September 30, 2017 increased $115 million, or 13%, to $994 million compared with 2016. Excluding additional video services revenue from the CTF Operations for the first quarter of 2017, revenues decreased $166 million, or 19%, due to a decrease in the total number of video subscribers.

~~Other~~

~~Other customer revenue includes~~limit sales of ~~customer premise equipment~~new traditional TV services, focusing on our broadband products and OTT video options. We are partnering with OTT video providers and expect this to grow as OTT options are offered with our ~~commercial customers and directory services, less our provision for bad debts.~~broadband products.

‎

Other revenue for the three months ended September 30, 2017 increased $11 million, or 15%, as compared with 2016 primarily due to a decrease in uncollectibles, partially offset by a decrease in customer premise equipment sales during the third quarter of 2017. Other revenue for the nine months ended September 30, 2017 increased $13 million, or 6%. Excluding additional other revenue from the CTF Operations for the first quarter of 2017, revenues increased $8 million due to a decrease in uncollectibles, partially offset by a decrease in maintenance contracts.

PART I. FINANCIAL INFORMATION (Continued)

FRONTIER COMMUNICATIONS CORPORATIONPARENT, INC. AND SUBSIDIARIES

(Unaudited)

~~Switched Access~~


($ in millions)	For the three months ended		For the nine months ended
Video services revenue, September 30, 2021	$	149	$	477
Change in video services revenue		(22)		(71)
Impact of fresh start accounting		-		(8)
Video services revenue, September 30, 2022	$	127	$	398

Under our fresh start accounting policies, Frontier is recording both revenue and ~~Subsidy~~expense related to certain surcharges and taxes on a net basis, as opposed to recording each on a gross basis prior to emergence. These declines were primarily driven by linear video customer losses, partially offset by price increases.

Other

Other customer revenue includes directory listing services and switched access revenue. Switched access ~~and subsidy revenues include revenues~~revenue includes revenue derived from allowing other carriers to use our network to originate and/or terminate their local and ~~long distance~~long-distance voice ~~traffic (“switched access”).~~traffic. These services are primarily billed on a minutes-of-use basis applying tariffed rates filed with the FCC or state agencies. ~~We also receive cost subsidies from state and federal authorities, including~~


($ in millions)	For the three months ended		For the nine months ended
Other revenue, September 30, 2021	$	99	$	286
Change in other services revenue		(17)		(49)
Impact of fresh start accounting		-		8
Other revenue, September 30, 2022	$	82	$	245

Under our fresh start accounting policies, we have classified the ~~Connect America Fund.~~

~~Switched access and subsidy~~provision for bad debt as expense, rather than a reduction of revenue ~~for the three months ended September 30, 2017 decreased~~as it was recorded prior to emergence, resulting in increases to other customer revenues of $14 million, or 7%, as compared with 2016. Switched access revenue decreased $4 million for the three months ended September 30, 2017, primarily due to the impact of the decline in minutes of use related to access line losses and the displacement of minutes of use by wireless and other communications services, combined with the lower rates required by the FCC’s 2011 Order on intercarrier compensation reform. Subsidy revenues decreased $10 million for the three months ended September 30, 2017, primarily due to one-time true-up payments and phasedown support recognized in the second quarter of 2016 in connection with the CAF Phase II program.

~~Switched access and subsidy revenue for the nine months ended September 30, 2017 decreased $12 million, or 2%, as compared with 2016. Switched access revenue decreased $1~~ million for the nine months ended September 30, ~~2017, primarily due to~~2022. Additionally, the ~~impact~~accumulated balances in deferred installation fee revenue were eliminated as part of ~~the~~fresh start accounting, which has resulted in a $6 million decline in minutes of use related to access line losses and the displacement of minutes of use by wireless and other communications service, combined with the lower rates required by the FCC’s 2011 Order on intercarrier compensation refund. Excluding additional switched access revenue ~~from the CTF Operations for the first quarter of 2017, revenue decreased $15 million, or 11%. Subsidy revenues~~recognized for the nine months ended September 30, ~~2017 decreased $11 million. Excluding additional subsidy revenue from~~2022, as compared to the ~~CTF Operations~~prior year periods. After adjusting for the ~~first quarter~~impacts of ~~2017,~~these policy changes, other customer services revenue declined $49 million for the nine months ended September 30, 2022. These decreases were primarily driven by reductions in CPE sales, late payment fees, early termination fees and reconnect fees.

Subsidy and other revenue

Subsidy and other revenue decreased ~~$46~~for the three and nine months ended September 30, 2022, compared to the prior year period, primarily due to the completion of the CAF II program in 2021.


($ in millions)	For the three months ended		For the nine months ended
Subsidy and other revenue, September 30, 2021	$	83	$	249
Change in CAF II subsidies		(74)		(231)
Change in RDOF, subsidy, and other services revenue		9		17
Impact of fresh start accounting		-		5
Subsidy and other revenue, September 30, 2022	$	18	$	40

As a result of a fresh start accounting policy change, certain governmental grants that were historically presented on a net basis as part of capital expenditures, are presented on a gross basis and included in subsidy, resulting in increases to subsidy and other revenue of $5 million ~~or 10%. We expect that switched access revenue will continue to decline in~~for the ~~fourth quarter~~nine months ended September 30, 2022.

‎

PART I. FINANCIAL INFORMATION (Continued)

FRONTIER COMMUNICATIONS PARENT, INC. AND SUBSIDIARIES

(Unaudited)

OPERATING EXPENSES


	For the three months		For the three months
($ in millions)	ended September 30,		ended September 30,		($)		%
	2022		2021		Variance		Variance
Operating expenses:
Cost of Service	$	544	$	590	$	(46)	(8)	%
Selling, general, and administrative expenses		431		421		10	2	%
Depreciation and amortization		296		273		23	8	%
Restructuring costs and other charges		4		8		(4)	(50)	%
Total operating expenses	$	1,275	$	1,292	$	(17)	(1)	%


	Successor		Non-GAAP Combined
	For the nine months		For the nine months
($ in millions)	ended September 30,		ended September 30,		($)		%
	2022		2021		Variance		Variance
Operating expenses:
Cost of Service	$	1,643	$	1,816	$	(173)	(10)	%
Selling, general, and administrative expenses		1,293		1,227		66	5	%
Depreciation and amortization		870		958		(88)	(9)	%
Restructuring costs and other charges		88		26		62	238	%
Total operating expenses	$	3,894	$	4,027	$	(133)	(3)	%

Cost of ~~2017~~.service

~~OPERATING EXPENSES~~

~~NETWORK ACCESS EXPENSES~~

For the three months ended September 30,

$ Increase

% Increase

($ in millions)

2017

2016

(Decrease)

(Decrease)

Network access expenses

$
390

$
440

$
(50)

(11)
%

For the nine months ended September 30,

$ Increase

% Increase

($ in millions)

2017

2016

(Decrease)

(Decrease)

Network access expenses

$
1,209

$
1,053

$
156

15
%

~~Network access~~Cost of service expenses include access charges and other third-party costs directly attributable to connecting customer locations to our network, ~~and~~ video content costs and certain promotional costs. Such access charges and other third-party costs exclude network related expenses, depreciation and amortization, and employee related expenses.

~~Network access expenses~~As a result of the fresh start accounting policy change to account for USF fees and certain other surcharges and taxes on a net basis instead of on a gross basis in both revenue and expense, cost of service decreased by $84 million for the ~~three~~nine months ended September 30, ~~2017 decreased $50~~2022. After adjusting for this fresh start change, cost of service declined $89 million ~~or 11%, primarily due to~~for the nine months ended September 30, 2022. For the three and nine months ended September 30, 2022, the decrease in cost of service expense was driven by lower video content costs as a result of ~~a decline~~declines in video customers, ~~partially~~non-renewal of certain content agreements and decreased CPE costs. These decreases more than offset by higher ~~promotional costs.~~fuel and energy prices, and outside service rate increases resulting from increased inflation.

~~Network access~~Selling, general, and administrative expenses for the nine months ended September 30, 2017 increased $156 million, or 15%. Excluding additional expenses from the CTF Operations for the first quarter of 2017, network access expenses for the nine months ended September 30, 2017 decreased $105 million, or 10%, primarily due to lower video content and long distance costs as a result of a decline in customers.

~~PART I. FINANCIAL INFORMATION (Continued)~~

~~FRONTIER COMMUNICATIONS CORPORATION AND SUBSIDIARIES~~

~~NETWORK RELATED EXPENSES~~

For the three months ended September 30,

$ Increase

% Increase

($ in millions)

2017

2016

(Decrease)

(Decrease)

Network related expenses

$
497

$
527

$
(30)

(6)
%

For the nine months ended September 30,

$ Increase

% Increase

($ in millions)

2017

2016

(Decrease)

(Decrease)

Network related expenses

$
1,468

$
1,399

$
69

5
%

Network related expenses include expenses associated with the delivery of services to customers and the operation and maintenance of our network, such as facility rent, utilities, maintenance and other costs, as well as salaries, wages and related benefits associated with personnel who are responsible for the delivery of services, and the operation and maintenance of our network.

Network related expenses for the three months ended September 30, 2017 decreased $30 million, or 6%, as compared with 2016, primarily due to a decrease in compensation costs related to lower employee headcount and certain benefits, including incentive compensation, pension and OPEB expense (as discussed below). There was also a reduction in rental costs for vehicles previously under operating leases that were modified during late 2016, resulting in the classification as capital leases, which were partially offset by an increase in outside services, primarily related to storm-related costs.

Network related expenses for the nine months ended September 30, 2017 increased $69 million, or 5%, as compared with 2016. Excluding additional expenses from the CTF Operations for the first quarter of 2017, network related expenses for the nine months ended September 30, 2017 decreased $128 million, or 9%, primarily due to a decrease in compensation costs related to lower employee headcount and a reduction in rental costs for vehicles.

~~SELLING, GENERAL AND ADMINISTRATIVE EXPENSES~~

For the three months ended September 30,

$ Increase

% Increase
($ in millions)

2017

2016

(Decrease)

(Decrease)

Selling, general and

administrative expenses

$
486

$
582

$
(96)

(16)
%

For the nine months ended September 30,

$ Increase

% Increase
($ in millions)

2017

2016

(Decrease)

(Decrease)

Selling, general and

administrative expenses

$
1,561

$
1,535

$
26

2
%

Selling, general, and administrative expenses (SG&A expenses) include the salaries, wages and related benefits and the related costs of corporate and sales personnel, travel, insurance, non-network related rent, advertising, and other administrative expenses.

As a result of the fresh start accounting policy change to classify the provision for bad debt as an expense rather than a reduction to revenue, SG&A expenses ~~for the three months ended September 30, 2017 decreased $96~~were $14 million or 16%, due to lower costs for compensation, primarily related to decreased employee headcount, lower incentive compensation costs, certain benefits, including pension and OPEB expense (as discussed below), reduced marketing costs, and lower information technology and other outside services costs. There were approximately $23 million of additional SG&A

~~PART I. FINANCIAL INFORMATION (Continued)~~

~~FRONTIER COMMUNICATIONS CORPORATION AND SUBSIDIARIES~~

~~expense during the third quarter of 2016 related to the Frontier Secure Strategic Partnerships business, which was sold in May of 2017.~~

~~SG&A expenses~~higher for the nine months ended September 30, ~~2017 increased $26~~2022. Additionally, as a result of fresh start accounting policy changes, we have expensed $17 million ~~or 2%, as compared with 2016. Excluding additional expenses from~~of certain administrative items that were previously capitalized by the ~~CTF Operations~~predecessor for nine months ended September 30, 2022. After adjusting for the ~~first quarter of 2017,~~fresh start impacts, SG&A expenses increased by $35 million for the nine months ended September 30, ~~2017~~2022.This increase was primarily a result of transformational investments that are non-recurring such as rebranding costs, higher professional services and recruiting fees, partially offset by a non-recurring $11 million sales tax refund in 2022.

PART I. FINANCIAL INFORMATION (Continued)

FRONTIER COMMUNICATIONS PARENT, INC. AND SUBSIDIARIES

(Unaudited)

Pension and Other Postretirement Employee Benefit (OPEB) costs

Frontier allocates certain pension/OPEB expense to Cost of service and SG&A expenses. Total pension and OPEB service costs were as follows:


($ in millions)	For the three months ended September 30, 2022		For the three months ended September 30, 2021
Total pension/OPEB expenses	$	17	$	24
Less: costs capitalized into capital expenditures		(4)		(6)
Net pension/OPEB costs	$	13	$	18


	Successor		Non-GAAP Combined
($ in millions)	For the nine months ended September 30, 2022		For the nine months ended September 30, 2021
Total pension/OPEB expenses	$	65	$	79
Less: costs capitalized into capital expenditures		(15)		(17)
Net pension/OPEB costs	$	50	$	62

Depreciation and amortization

As a result of fresh start accounting, both Frontier’s fixed assets and intangible assets were adjusted to fair value as of the Effective Date. These changes decreased ~~$200 million, or 13%, primarily~~the carrying value of its fixed assets and increased the carrying value of its intangible assets. For the three and nine months ended September 30, 2022, the decreased depreciation and amortization expense was driven by lower depreciation expense as a result of reduced fixed asset bases following the fresh start adjustment noted above.

Restructuring costs and other charges

Restructuring costs and other charges consist of consulting and advisory fees related to our balance sheet restructuring prior to filing our Chapter 11 Cases and subsequent to the Effective Date, workforce reductions, transformation initiatives, lease impairment costs, and other restructuring expenses.

For the three months ended September 30, 2022, restructuring costs and other charges decreased due to lower ~~compensation~~ severance and employee costs resulting from workforce reductions of $3 million, and lower costs related to other ~~employee related costs and reduced costs for outside services and marketing. There were approximately $28 million~~restructuring activities of ~~additional SG&A expense during~~$1 million.

For the nine months ended September 30, ~~2016~~2022, restructuring costs and other charges increased due to $44 million of lease impairment costs from the strategic exit of certain facilities, $35 million of severance and employee costs resulting from workforce reductions, and $9 million of costs related to other restructuring activities. Of the $35 million in severance and employee costs, approximately $26 million related to the ~~Frontier Secure Strategic Partnerships business, which was sold~~second quarter of 2022, as a result of larger workforce reductions in ~~May of 2017.~~ that period.

~~Pension~~

‎

PART I. FINANCIAL INFORMATION (Continued)

FRONTIER COMMUNICATIONS PARENT, INC. AND SUBSIDIARIES

(Unaudited)

OTHER NON-OPERATING INCOME AND EXPENSE


	For the three months ended September 30,		For the three months ended September 30,		$		%
($ in millions)	2022		2021		Variance		Variance

Investment and other income (loss), net	$	211	$	(37)	$	248		NM
Pension settlement costs	$	(50)	$	-	$	(50)		100	%
Interest expense	$	(135)	$	(90)	$	(45)		50	%
Income tax expense	$	75	$	31	$	44		142	%

	Successor				Predecessor		Non-GAAP Combined
	For the nine months ended September 30,		For the five months ended September 30,		For the four months ended April 30,		For the nine months ended September 30,			$		%
($ in millions)	2022		2021		2021		2021			Variance		Variance

Investment and other income (loss), net	$	410	$	(39)	$	1	$	(38)		$	448	NM
Pension settlement costs	$	(50)	$	-	$	-	$	-		$	(50)	100	%
Reorganization items, net	$	-	$	-	$	4,171	$	4,171		$	(4,171)	(100)	%
Interest expense	$	(356)	$	(152)	$	(118)	$	(270)		$	(86)	32	%
Income tax expense (benefit)	$	174	$	74	$	(136)	$	(62)		$	236	(381)	%

NM - Not meaningful

Investment and ~~OPEB costs~~other income (loss), net

~~Frontier allocates pension/OPEB expense to network related expenses~~Investment and ~~SG&A expenses. Total consolidated pension~~other income, net increased by $248 million and ~~OPEB costs, excluding pension settlement costs,~~$448 million for the three and nine months ended September 30, ~~2017~~2022, respectively. These increases were driven by remeasurement gains for our other postretirement benefit obligation of $84 million for the three months ended September 30, 2022 and ~~2016 were as follows:~~

For the three months ended September 30,

For the nine months ended September 30,
($ in millions)

2017

2016

2017

2016

Total pension/OPEB

expense

$
29

$
33

$
93

$
95
Less: costs capitalized into

capital expenditures

(6)

(5)

(20)

(18)
Net pension/OPEB costs

$
23

$
28

$
73

$
77

~~DEPRECIATION AND AMORTIZATION EXPENSE~~

The fair value estimates related to the allocation of the purchase price of the CTF Operations to Other intangibles were revised and finalized during the first quarter of 2017 from the previous estimates as of December 31, 2016. The allocation that was reported as of December 31, 2016$234 million for ~~Other intangibles increased $100 million, from $2,162 million to $2,262 million. These adjustments resulted in higher amortization expense during~~ the nine months ended September 30, ~~2017 ($20~~2022. Additionally, we recorded a remeasurement gain related to our pension plan of $91 million during the three months ended September 30, 2022.

We had additional increases as a result of ~~which is attributable to 2016).~~

For the three months ended September 30,

$ Increase

% Increase

($ in millions)

2017

2016

(Decrease)

(Decrease)

Depreciation expense

$
376

$
323

$
53

16
%

Amortization expense

163

255

(92)

(36)
%

$
539

$
578

$
(39)

(7)
%

For the nine months ended September 30,

$ Increase

% Increase

($ in millions)

2017

2016

(Decrease)

(Decrease)

Depreciation expense

$
1,131

$
1,009

$
122

12
%

Amortization expense

539

460

79

17
%

$
1,670

$
1,469

$
201

14
%

~~Depreciation~~favorable changes in our non-operating pension and ~~amortization expense~~other postretirement costs of $55 million and $99 million for the three and nine months ended September 30, ~~2017 decreased $39 million, or 7%, and increased $201 million, or 14%, respectively. Depreciation expense for~~2022, respectively, as compared to the three months ended September 30, 2017 increased $53 million, or 16%. The increase was primarily driven by the changes in the remaining lives of certain plant assets. Excluding additional expense from the CTF Operations for the first quarter of 2017, depreciation expense decreased $17 million, or 2%, forprior year periods.

Pension settlement

During the nine months ended September 30, ~~2017 as compared to the prior year period due to lower net asset bases as compared to 2016.~~

~~PART I. FINANCIAL INFORMATION (Continued)~~

~~FRONTIER COMMUNICATIONS CORPORATION AND SUBSIDIARIES~~

Amortization expense for the three months ended September 30, 2017 decreased $92 million, or 36% as compared with 2016. The decrease was primarily driven by the accelerated method of amortization related to customer bases acquired in 2010 and 2014, offset by an increase in the value of the acquired CTF customer base as a result of final purchase accounting adjustments in 2017. Excluding additional expense from the CTF Operations for the first quarter of 2017, amortization expense decreased $62 million, or 13%, for the nine months ended September 30, 2017 as compared to the prior year period due to an increase in the value of the acquired CTF customer base subsequent to the second quarter of 2016, offset by the accelerated method of amortization related to customer bases acquired in 2010 and 2014.

~~GOODWILL IMPAIRMENT~~

As a result of the continued decline in the share price of our common stock in each of the three quarters in 2017, we tested goodwill for impairment. The results of our quantitative goodwill impairment test resulted in a $670 million goodwill impairment in the second quarter of 2017, principally due to the decline in our profitability during the period (See Note 6). Results from our first and third quarter quantitative assessments did not result in additional goodwill impairment charges. Further declines in our profitability or share price could result in additional impairment in the future.

~~ACQUISITION AND INTEGRATION COSTS~~

For the three months ended September 30,

$ Increase

% Increase
($ in millions)

2017

2016

(Decrease)

(Decrease)

Acquisition and integration costs

$
1

$
122

$
(121)

(99)
%

For the nine months ended September 30,

$ Increase

% Increase
($ in millions)

2017

2016

(Decrease)

(Decrease)

Acquisition and integration costs

$
15

$
387

$
(372)

(96)
%

Acquisition costs include financial advisory, accounting, regulatory, legal and other related costs. Integration costs include expenses that are incremental and directly related to the acquisition, which were incurred to integrate the network and information technology platforms. Integration costs also include costs to achieve synergies and operational efficiencies directly associated with the acquisition.

~~We invested $19 million and $99 million in capital expenditures related to the CTF Acquisition during the nine months ended September 30, 2017 and 2016, respectively.~~

~~PENSION SETTLEMENT COSTS~~

For the three months ended September 30,

$ Increase

% Increase

($ in millions)

2017

2016

(Decrease)

(Decrease)

Pension Settlement Costs

$
15

$
-

$
15

100
%

��

For the nine months ended September 30,

$ Increase

% Increase

($ in millions)

2017

2016

(Decrease)

(Decrease)

Pension Settlement Costs

$
77

$
-

$
77

100
%

The Pension Plan contains provisions that provide certain employees with the option of receiving a lump sum payment upon retirement. Frontier’s accounting policy is to record these payments as a settlement only if, in the aggregate, they exceed the sum of the annual service and interest costs for the Pension Plan’s net periodic pension benefit cost. During the three and nine months ended September 30, 2017,2022, lump sum pension settlement payments

~~PART I. FINANCIAL INFORMATION (Continued)~~

~~FRONTIER COMMUNICATIONS CORPORATION AND SUBSIDIARIES~~

to terminated or retired individuals amounted to ~~$87 million and $449~~$177 million, which exceeded the settlement threshold of ~~$224~~$169 million, and as a result, Frontier recognized non-cash settlement charges totaling ~~$77~~$50 million during 2017. The non-cash charge accelerated the recognition of a portion of the previously unrecognized actuarial losses in the Pension Plan. Additional pension settlement charges will be required in the fourth quarter of 2017, the amount of which will be dependent on the lump sum benefit payments made during the fourth quarter.

~~RESTRUCTURING COSTS AND OTHER CHARGES~~

For the three months ended September 30,

$ Increase

% Increase

($ in millions)

2017

2016

(Decrease)

(Decrease)

Restructuring costs and

other charges

$
14

$
11

$
3

27
%

For the nine months ended September 30,

$ Increase

% Increase

($ in millions)

2017

2016

(Decrease)

(Decrease)

Restructuring costs and

other charges

$
55

$
11

$
44

NM

~~NM – Not meaningful~~

Restructuring costs and other charges consist of expenses related to changes in the composition of our business, including workforce reductions, the sale of business lines or divisions, and corresponding changes to our retirement plans.

Restructuring costs and other charges increased in the third quarter of 2017 compared to the third quarter of 2016 primarily due to a reduction in the workforce of approximately 300 employees in the third quarter of 2017.

~~Restructuring costs and other charges increased~~ for the nine months ended September 30, ~~2017 compared~~2022.

Reorganization items, net

We incurred costs associated with the reorganization, primarily the write-off of certain debt issuance costs and net discounts, financing costs, and legal and professional fees and fresh start accounting adjustments. These include expenses incurred subsequent to the ~~nine months ended September 30, 2016 primarily due to a reduction in the workforce of approximately 850 employees and the loss on the sale of the Frontier Secure Strategic Partnerships business.~~

~~PART I. FINANCIAL INFORMATION (Continued)~~

~~FRONTIER COMMUNICATIONS CORPORATION AND SUBSIDIARIES~~

~~OTHER NON-OPERATING INCOME AND EXPENSE~~

For the three months ended September 30,

$ Increase

% Increase
($ in millions)

2017

2016

(Decrease)

(Decrease)

Investment and other income (loss), net

$
2

$
3

$
(1)

(33)
%
Loss (gain) on extinguishment of debt

and debt exchanges

$
(1)

$
7

$
(8)

(114)
%
Interest expense

$
381

$
386

$
(5)

(1)
%
Income tax benefit

$
(31)

$
(46)

$
15

33
%

For the nine months ended September 30,

$ Increase

% Increase
($ in millions)

2017

2016

(Decrease)

(Decrease)

Investment and other income, net

$
5

$
14

$
(9)

(64)
%
Loss (gain) on extinguishment of debt

and debt exchanges

$
89

$
7

$
82

NM

Interest expense

$
1,157

$
1,145

$
12

1
%
Income tax benefit

$
(280)

$
(212)

$
(68)

(32)
%

NM - Not meaningful

~~Investment and other income, net~~

Investment and other income, net for the nine months ended September 30, 2016 included interest income of $12 million, primarily due to interest earned on restricted cash. The decrease of $9 million was driven by less restricted cash on hand in 2017.

~~Loss on Extinguishment of Debt and Debt Exchanges~~

Petition Date. During the nine months ended September 30, ~~2017,~~2021, Frontier ~~recorded a loss on early extinguishment~~recognized $4,171 million in reorganization items associated with the restructuring of ~~debt of $89~~our balance sheet.

Interest expense

For the three and nine months ended September 30, 2022, interest expense increased $45 million and $86

PART I. FINANCIAL INFORMATION (Continued)

FRONTIER COMMUNICATIONS PARENT, INC. AND SUBSIDIARIES

(Unaudited)

million, as compared to the same periods in 2021. The increase in interest expense was primarily driven by a ~~loss~~higher debt balance, as well as higher interest rates.

Income tax expense

During the three months ended September 30, 2022, we recorded income tax expense of ~~$90~~$75 million ~~resulting from debt buy backs during~~on pre-tax income of $195 million. During the ~~second quarter, and slightly offset by a gain~~three months ended September 30, 2021, we recorded income tax expense of $1$31 million ~~resulting from buy backs in the third quarter.~~on pretax income of $157 million.

During the nine months ended September 30, ~~2016, Frontier~~2022 we recorded ~~a loss~~income tax expense of $7$174 million ~~resulting from~~on pre-tax income of $460 million. During the ~~exchange~~five months ended September 30, 2021, we recorded income tax expense of ~~senior notes during~~$74 million on pre-tax income of $299 million.During the ~~third quarter~~four months ended April 30, 2021, we recorded an income tax benefit of ~~2016.~~$136 million on pre-tax income of $4,405 million.

~~Interest expense~~

~~Interest expense~~Our effective tax rates for the three and nine months ended September 30, ~~2017~~2022 were 38.5% and 37.8%, respectively. The effective rate increased ~~$5 million, or 1%, and $12 million, or 1%,~~ as ~~compared~~a result of increases to the ~~three and nine~~state rate due to valuation allowances in certain states, arising from non-deductible interest expense primarily related to our $1.2 billion first lien note issuance. Our effective tax rates for the five months ended September 30, ~~2016. We incurred additional interest of $19 million in 2017 on~~2021 and the ~~$1,625 million term loan facility related to the CTF Acquisition. Our composite average borrowing rate as of September~~four months ended April 30, ~~2017~~2021 were 24.7% and ~~2016 was 8.36% and 8.55%~~(3.1%), respectively.

‎

~~Income tax benefit~~

Income tax benefit for the three and nine months ended September 30, 2017 decreased $15 million and increased $68 million, as compared to the three and nine months ended September 30, 2016. The effective tax rate on our pretax loss for the nine months ended September 30, 2017 was 26.5% as compared with 42.0% for the nine months ended September 30, 2016. The increase in income tax benefit was primarily due to the impact of the goodwill impairment incurred during the second quarter of 2017.

PART I. FINANCIAL INFORMATION (Continued)

FRONTIER COMMUNICATIONS CORPORATIONPARENT, INC. AND SUBSIDIARIES

(Unaudited)

~~Net loss attributable to Frontier common shareholders~~

Net loss attributable to Frontier common shareholders for the third quarter of 2017 was $92 million, or ($1.19) per share, as compared to a net loss of $134 million, or ($1.73) per share, in the third quarter of 2016, and net loss for the first nine months of 2017 of $936 million, or ($12.06) per share, as compared to a net loss of $454 million, or ($5.87) per share for the first nine months of 2016. For the first nine months of 2017, the increase in net loss was primarily driven by the $532 million (after-tax) goodwill impairment charge incurred during the second quarter of 2017.

~~Diluted net loss attributable to Frontier common shareholders~~

Diluted net loss attributable to Frontier common shareholders for the third quarter of 2017 was $92 million, or ($1.19) per share, as compared to a net loss of $135 million, or ($1.73) per share, in the third quarter of 2016, and net loss for the first nine months of 2017 of $940 million, or ($12.07) per share, as compared to a net loss of $457 million, or ($5.87) per share for the first nine months of 2016. For the first nine months of 2017, the increase in net loss was primarily driven by the $532 million (after-tax) goodwill impairment charge incurred during the second quarter of 2017.

(b) Liquidity and Capital Resources

~~Analysis of Cash Flows~~

As of September 30, ~~2017,~~2022, we had liquidity of approximately $3,322 million, comprised of cash and cash equivalents of $230 million, $2,325 million of short-term investments consisting of term deposits earning interest in excess of traditional bank deposit rates, and placed with banks with A-1/P-1 or equivalent credit quality, and our available capacity on our undrawn revolving credit facility of $767 million.

Analysis of Cash Flows

As of September 30, 2022, we had unrestricted cash and cash equivalents aggregating ~~$286~~$230 million. ~~Our primary source of funds during the nine months ended September 30, 2017 was cash on hand, cash generated from operations, and cash received from issuance of our Term Loan B.~~ For the nine months ended September 30, ~~2017,~~2022, we used cash flow from operations, cash on hand, and cash from prior year borrowings principally to ~~principally~~ fund ~~all of~~ our cash investing and financing activities, which were primarily short-term investments and capital ~~expenditures, dividends~~expenditures.

On May 12, 2022, our consolidated subsidiary Frontier Communications Holdings, LLC (“Frontier Holdings”), issued $1.2 billion aggregate principal amount of 8.750% first lien secured notes due 2030 in an offering pursuant to exemptions from the registration requirements of the Securities Act. We intend to use the net proceeds of this offering to fund capital investments and ~~debt repayments.~~operating costs arising from our fiber build and expansion of its fiber customer base, and for other general corporate purposes.

AtAs of September 30, ~~2017,~~2022, we had a working capital ~~deficit~~surplus of ~~$531~~$1,101 million ~~including $166 million of long-term debt due within one year, as~~ compared to a ~~working capital deficit of $788~~$1,237 million surplus at December 31, ~~2016.~~ 2021. The ~~decrease~~primary driver for the change in the working capital ~~deficit is primarily due to a decrease~~surplus at September 30, 2022 was an increase in ~~current liabilities of $651 million, partially offset by a reduction in~~short-term investments, accounts ~~receivable of $158 million.~~ payable and accrued interest.

Cash Flows ~~provided by~~from Operating Activities

Cash flows provided byfrom operating activities increased ~~$223~~$712 million to ~~$1,185~~$1,041 million for the nine months ended September 30, ~~2017~~2022 as compared ~~with~~to the ~~prior year period.~~nine months ended September 30, 2021. The overall increase in operating cash flows was primarily the result of ~~the addition of our CTF Operations, partially offset by unfavorable~~ changes in working ~~capital, along with higher interest expense.~~capital.

We ~~received $4 million and $35~~paid $7 million in net cash ~~tax refunds~~taxes during the nine months ended September 30, ~~2017~~2022 and ~~2016, respectively.~~

~~In connection with the CTF Acquisition, Frontier recognized acquisition and integration costs of $15~~$36 million in Non-GAAP combined net cash taxes during the ~~first~~Non-GAAP combined nine months ~~of 2017~~ended September 30, 2021.

Cash Flows from Investing Activities

Cash flows used in investing activities were $4,178 million for the nine months ended September 30, 2022, compared to ~~$387~~Non-GAAP combined cash flows used in investing activities of $1,135 million ~~during~~for the ~~first nine months~~corresponding period in 2021. Given the long-term nature of ~~2016. Interest expense of $581 million was incurred during the first nine months of 2017 related to the September 2015 debt offering and the term loan credit agreement, dated~~our fiber build, as of ~~August 12, 2015, with JPMorgan Chase Bank, N.A., as administrative agent, and the lenders party thereto, compared~~September 30, 2022, we have invested $2,325 million cash in short-term investments to ~~$559 million in~~improve interest expense during the first nine months of 2016. Additionally, Frontier incurred $10 million of interest expense related to the Verizon Bridge Facility (as defined below) during the first nine months of 2016.income, while preserving funding flexibility.

~~Cash Flows used by Investing Activities~~

Capital Expenditures

For the nine months ended September 30, ~~2017~~2022 and ~~2016,~~2021, our capital expenditures were ~~$865~~$1,860 million and ~~$1,059~~$1,146 million, ~~respectively, including $19 million and $99 million, respectively,~~respectively. Approximately 57% of ~~integration related~~our capital expenditures ~~associated with the CTF Acquisition. Capital expenditures related to CAF Phase II are included~~ in our reported amounts for capital expenditures. We anticipate capital expenditures for business operations to be approximately $1.15 billion to $1.2 billion in 2017, as compared to $1.26 billion in 2016.

~~PART I. FINANCIAL INFORMATION (Continued)~~

~~FRONTIER COMMUNICATIONS CORPORATION AND SUBSIDIARIES~~

~~Cash Flows used by and provided from Financing Activities~~

~~Debt Reduction~~

~~During~~ the first nine months of ~~2017, Frontier used~~2022 related to fiber network projects. The increase in capital expenditures was driven by increased spending for fiber upgrades to our existing copper network, a trend that we expect to continue as we execute our strategy of investing in our fiber network. In addition to the capital expenditures noted above, we had a balance of $431 million in “Accounts payable” on our consolidated balance sheet related to capital expenditures that had not been paid as of September 30, 2022.

Cash Flows from Financing Activities

Cash flows provided from financing activities increased $1,039 million to $1,219 million for the nine months ended September 30, 2022 as compared to the Non-GAAP combined corresponding period in 2021. The increase in financing activities was primarily driven by $1,200 million proceeds from long-term debt borrowings partially offset

PART I. FINANCIAL INFORMATION (Continued)

FRONTIER COMMUNICATIONS PARENT, INC. AND SUBSIDIARIES

(Unaudited)

by financing costs, lease obligations payments, long-term debt principal payments and other costs.

Capital Resources

Our primary anticipated uses of liquidity are to fund the costs of operations, working capital and capital expenditures and to fund interest payments on our long-term debt. Our primary sources of liquidity are cash flows from operations, cash on hand ~~for the scheduled retirement of $328~~and borrowing capacity under our $900 million Revolving Facility (as reduced by $133 million of ~~debt, including $210~~revolver Letters of Credit.)

On May 12, 2022, Frontier Holdings entered into an amendment to its Revolving Facility which, among other things, increased the Revolving Facility by an additional $275 million, to a total of ~~unsecured 8.25% senior notes at maturity, and contractual payments of principal for debt of $118 million. Additionally, Frontier used cash proceeds from the Term Loan B to retire $1,335~~$900 million of unsecured senior notes prior to maturity, consisting of $763 million of 8.875% Notes due 2020, $551 million of 8.500% Notes due 2020, $10 million of 9.250% Notes due 2021, $6 million of 7.125% Notes due 2019, and $5 million of 8.125% Notes due 2018. During the first nine months of 2017, Frontier recorded a loss on early extinguishment of debt of $89 million driven primarily by premiums paid to retire certain notes and unamortized original issuance costs, slightly offset by discounts received on the retirement of certain notes.

~~During the first nine months of 2016, Frontier used cash on hand to retire an~~in aggregate principal amount of ~~$280~~revolving credit commitments, and provided that the Revolving Facility be amended to reflect Secured Overnight Financing Rate “SOFR” based interest rates (including a customary spread adjustment). We anticipate that Frontier Holdings will transition to SOFR based borrowing under its Term Loan Facility, in accordance with the terms thereof, upon the final phase out of LIBOR at the end of June 2023. We do not expect this transition to materially impact the amount of interest payments under the Term Loan Facility.

Our Amended and Restated Credit Agreement, including our $1,453 million Term Loan Facility and $900 million Revolving Facility, and the indentures governing our outstanding secured First Lien Notes and Second Lien Notes are described in detail in Note 8 to the financial statements contained in Part I of this report.

During the nine months ended September 30, 2022, we paid $286 million of cash interest. Our long-term debt ~~$189 million of which was senior unsecured debt and $91 million of which was secured debt.~~

~~Subject~~is described in detail in Note 8 to ~~limitations~~the financial statements contained in Part I of this report.

We have assessed our ~~indentures~~current and ~~credit facilities, we may from time to time make repurchases~~expected funding requirements and our current and expected sources of liquidity, and have determined, based on our debt in the open market, through tender offers, by exercising rights to call or in privately negotiated transactions. We may also refinance existing debt or exchange existing debt for newly issued debt obligations.

~~Capital Resources~~

~~We believe~~forecasted financial results and financial condition as of September 30, 2022, that our operating cash flows and existing cash balances, ~~existing revolving credit facility and access to the capital markets, as necessary,~~ will be adequate to finance our working capital requirements, fund capital expenditures, make required debt interest and principal payments, pay taxes ~~pay dividends to our stockholders,~~ and ~~support our short-term and long-term operating strategies for the next twelve months.~~make other payments. A number of factors, including but not limited to, losses of customers, pricing pressure from increased competition, lower subsidy and switched access revenues, and the impact of economic conditions may negatively affect our cash generated from operations. As

Net Operating Losses

In connection with Frontier’s emergence from bankruptcy, we consummated a taxable disposition of ~~September 30, 2017, we had $42 million of debt maturing during the last three months of 2017; $743 million and $828 million of debt will mature in 2018 and 2019, respectively.~~

~~Term Loan and Revolving Credit Facilities~~

On February 27, 2017, Frontier entered into a first amended and restated credit agreement with JPMorgan Chase Bank, N.A., as administrative agent, and the lenders party thereto, pursuant to which Frontier combined its revolving credit agreement, dated as of June 2, 2014, and its term loan credit agreement, dated as of August 12, 2015. Under the JPM Credit Agreement, as further amended on June 15, 2017 by Increase Joinder No.1 (as so amended, the JPM Credit Agreement), Frontier has a $1,625 million senior secured term loan A facility (the Term Loan A) maturing on March 31, 2021, an $850 million undrawn secured revolving credit facility maturing on February 27, 2022 (the Revolver), and $1,500 million senior secured term loan B facility (the Term Loan B) maturing on June 15, 2024. The maturitiessubstantially all of the Term Loan A, the Revolver, and the Term Loan B, in each case if still outstanding, will be accelerated in the following circumstances: (i) if, 91 days before the maturity date of any series of Senior Notes maturing in 2020, 2023 and 2024, more than $500 million in principal amount remains outstanding on such series; assets and/or ~~(ii) if, 91 days before the maturity date~~subsidiary stock of the first series of Senior Notes maturing in 2021 or 2022, more than $500 million in principal amount remains outstanding, in the aggregate, on the two series of Senior Notes maturing in such year. The determination of interest rates for eachCompany. Certain of the ~~facilities under~~NOLs were utilized in offsetting gains from the ~~JPM Credit Agreement is based~~disposition, certain of the NOLS were extinguished as part of attribute reduction and certain subsidiary NOLS were carried over. Under Section 338(h)(10) of the Code, Predecessor and Successor made elections to step-up tax basis of certain subsidiary assets. Such Section 338(h)(10) elections will generate depreciation and amortization expense going forward, which may result in net operating losses on margins over the Base Rate (as defined in the JPM Credit Agreement) or over LIBOR, at the election of Frontier. Interest rate margins on the Term Loan A and Revolver (ranging from 0.75% to 1.75% for Base Rate borrowings and 1.75% to 2.75% for LIBOR borrowings) area go forward basis. Such net operating losses would be carried forward indefinitely but would be subject to ~~adjustment based~~an 80% limitation on Frontier’s Total Leverage Ratio (as defined in the JPM Credit Agreement). Interest rate margins on the Term Loan B (2.75% for Base Rate borrowings and 3.75% for LIBOR borrowings) are not subject to adjustment. The security package under the JPM Credit Agreement includes pledges of the equity interests in certain Frontier subsidiaries and guaranties by certain Frontier subsidiaries. As of September 30, 2017, the revolving credit facility was fully available and no borrowings had been made thereunder. The revolving credit facility is available for general corporate purposes but may not be used to fund dividend payments.U.S. taxable income.

Frontier has two senior secured credit agreements with CoBank, ACB, as administrative agent, lead arranger and a lender, and the other lenders party thereto: the first, for a $350 million senior term loan facility drawn in 2014 (the 2014 CoBank Credit Agreement), matures on October 24, 2019, and the second, for a $315 million senior term loan

~~PART I. FINANCIAL INFORMATION (Continued)~~

~~FRONTIER COMMUNICATIONS CORPORATION AND SUBSIDIARIES~~

facility drawn in October 2016 (the 2016 CoBank Credit Agreement), matures on October 12, 2021. We refer to the 2014 CoBank Credit Agreement and the 2016 CoBank Credit Agreement collectively as the CoBank Credit Agreements.

Repayment of the outstanding principal balance under each of the CoBank Credit Agreements is being made in quarterly installments ($9 million, with respect to the 2014 CoBank Credit Agreement, and $8 million, with respect to the 2016 CoBank Credit Agreement), in each case with the remaining outstanding principal balance to be repaid on the applicable maturity date. Borrowings under each of the CoBank Credit Agreements bear interest based on the margins over the Base Rate (as defined in the applicable CoBank Credit Agreement) or over LIBOR, at the election of Frontier.

On March 29, 2017, Frontier amended the 2014 and 2016 CoBank Credit Agreements. The amendments provide that interest rate margins under each of these facilities will range from 0.875% to 3.875% for Base Rate borrowings and 1.875% to 4.875% for LIBOR borrowings, subject to adjustment based on our Total Leverage Ratio, as defined in each credit agreement. The interest rate on each of the facilities as of September 30, 2017 was LIBOR plus 3.875%. In addition, the amendments provide for increases in the maximum Leverage Ratio and expansion of the security package identical to those contained in the February 2017 amendment and restatement of the August 2015 JPM credit agreement.

~~Letters of Credit Facility~~

Frontier has a Continuing Agreement for Standby Letters of Credit with Deutsche Bank AG New York Branch and Bank of Tokyo – Mitsubishi UFJ, LTD. (the LC Agreements). As of September 30, 2017, $129 million of undrawn Standby Letters of Credit had been issued under the LC Agreements. Borrowings under the LC Agreement are secured by a pledge of the stock of certain Frontier subsidiaries and guaranties by certain Frontier subsidiaries.

~~Covenants~~

The terms and conditions contained in one or more of our indentures, the CoBank Credit Agreements and the JPM Credit Agreement include covenants that, among other things, place restrictions on the following: the incurrence of liens on our and our subsidiaries’ assets securing indebtedness; the incurrence of indebtedness by us and our subsidiaries; the payment of dividends and other restricted payments; selling or transferring assets; the maximum levels of our leverage and secured leverage ratios; and the entry into mergers or other changes in corporate control. All of the above restrictions are subject to important, detailed qualifications and exceptions that are included in the JPM Credit Agreement, filed as an exhibit to our Quarterly Report on Form 10-Q for the quarterly period ended June 30, 2017 and in the CoBank Credit Agreements and our indentures, filed as exhibits to our Annual Report on Form 10-K for the fiscal year ended December 31, 2016. In addition, under the Certificate of Designations of our 11.125% Mandatory Convertible Preferred Stock, Series A, we would be restricted from paying dividends on our common stock if we failed to declare and pay dividends on our Series A Preferred Stock.

~~As of September 30, 2017, we were in compliance with all of our indenture and credit facility covenants.~~

~~Dividends~~

We intend to continue to pay regular quarterly dividends on our common and preferred stock. Our ability to fund a regular quarterly dividend will be impacted by our ability to generate cash from operations. Holders of the Series A Preferred Stock are entitled to receive cumulative dividends at an annual rate of 11.125% of the initial liquidation preference of $100 per share, or $11.125 per year per share. Series A Preferred Stock dividends of $161 million were paid during the nine month periods ended September 30, 2017 and 2016.

On July 26, 2017, we announced that our Board of Directors declared a regular quarterly cash dividend of $0.60 per share of common stock, payable on September 29, 2017 to holders of record at the close of business on September 15, 2017. The Board of Directors also declared a regular quarterly cash dividend on Frontier’s 11.125% Series A Preferred Stock of $2.78125 per share, payable on September 29, 2017 to holders of record at the close of business on September 15, 2017.

On October 31, 2017, we announced that our Board of Directors declared a regular quarterly cash dividend of $0.60 per share of common stock, payable on December 29, 2017 to holders of record at the close of business on December 15, 2017. The Board of Directors also declared a regular quarterly cash dividend on Frontier’s 11.125%

~~PART I. FINANCIAL INFORMATION (Continued)~~

~~FRONTIER COMMUNICATIONS CORPORATION AND SUBSIDIARIES~~

~~Mandatory Convertible Preferred Stock, Series A, of $2.78125 per share, payable on December 29, 2017 to holders of record at the close of business on December 15, 2017.~~

The declaration and payment of future dividends on our common stock is at the discretion of our Board of Directors, and will depend upon many factors, including our financial condition, results of operations, growth prospects, funding requirements, payment of cumulative dividends on Series A Preferred Stock, applicable law, restrictions in agreements governing our indebtedness and other factors our Board of Directors deems relevant.

Off-Balance Sheet Arrangements

We do not maintain any off-balance sheet arrangements, transactions, obligations or other relationships with unconsolidated entities that would be expected to have a material current or future effect upon our financial statements.

Contractual Obligations

Other than as disclosed elsewhere in this report with respect to the filing of the Chapter 11 Cases, the acceleration of substantially all of our debt, and the application of fresh start accounting, there have been no material changes outside the ordinary course of business to the information provided with respect to our contractual obligations,

PART I. FINANCIAL INFORMATION (Continued)

FRONTIER COMMUNICATIONS PARENT, INC. AND SUBSIDIARIES

(Unaudited)

including indebtedness and purchase and lease obligations, as disclosed in our Annual Report on Form 10-K for the year ended December 31, 2021.

Future Commitments

~~On April 29, 2015,~~See “Regulatory Developments” immediately below for information regarding Frontier’s known and potential future commitments related to our participation in the ~~FCC released its right of first refusal offer of support to price cap carriers under the~~FCC’s CAF Phase II program ~~which is intended to provide long-term support for broadband in high cost unserved or underserved areas.~~and RDOF Phase I auction.

Regulatory Developments

Connect America Fund (“CAF”)/ Rural Digital Opportunity Fund (“RDOF”): In ~~June~~ 2015, Frontier accepted the FCC’s CAF Phase II offer, which ~~provides for $332~~provided $313 million in annual support through ~~2020, including $49 million in annual support related to the properties acquired in the CTF Acquisition,~~2021, to make available 10 Mbps downstream/1 Mbps upstream broadband service to ~~approximately 774,000~~ households across some of the 2925 states where we operate.

The deployment deadline was December 31, 2021, and final review and audit of households is not complete. To the extent it is determined we dodid not enable the required number of households with 10 Mbps downstream/1 Mbps upstream broadband service ~~by the end of the~~or we were unable to satisfy other CAF Phase II ~~term, we would~~requirements, Frontier will be required to return a portion of the funds previously ~~received.~~received and may be subject to certain other requirements and obligations. We have accrued an amount for any potential shortfall in the household build commitment that we deem to be probable and reasonably estimated, and we do not expect that any potential penalties, if ultimately incurred, will be material.

On January 30, 2020, the FCC adopted an order establishing RDOF, a competitive reverse auction to provide support to serve high cost areas. Under the FCC’s RDOF Phase I auction, Frontier was awarded approximately $371 million over ten years to build gigabit-capable broadband over a fiber-to-the-premises network to approximately 127,000 locations in eight states (California, Connecticut, Florida, Illinois, New York, Pennsylvania, Texas, and West Virginia). Frontier began receiving funding under RDOF in the second quarter of 2022 and will be required to complete the buildout to these locations by December 31, 2028, with interim target milestones over this period.

As part of its RDOF order, the FCC indicated it would hold a follow-on auction for the unawarded funding following the Phase I auction. However, it remains uncertain whether any such follow-on auction will occur given the recent passage of significant federal funding for broadband infrastructure funding.

COVID-19 Initiatives: The Federal government has undertaken several measures to address the ongoing impacts of the COVID-19 pandemic and to facilitate enhanced access to high speed broadband, including through several new funding programs. As these large amounts of federal funding flow through the broadband ecosystem, we will evaluate and pursue funding opportunities that make sense for our business. Because of the severity, magnitude and duration of the COVID-19 pandemic and its economic consequences are uncertain and rapidly changing, the impact of the crisis and the governmental responses to the crisis on our business in 2022 and beyond remains uncertain and difficult to predict.

Current and Potential Internet Regulatory Obligations: On October 1, 2019, the D.C. Circuit Court largely upheld the FCC decision in its 2018 Restoring Internet Freedom Order to reclassify broadband as an “information service.” However, the Court invalidated the FCC’s preemption of a state’s ability to pass their own network neutrality rules and remanded back to the FCC other parts of the 2018 Order. California’s network neutrality provisions have gone into effect. It is unclear whether pending or future appeals will have any impact on the regulatory structure, and it is unclear what impact future federal and/or state legislative or regulatory actions will have on net neutrality issues.

Privacy: Privacy-related legislation has been considered in a number of states. Legislative and regulatory action could result in increased costs of compliance, claims against broadband Internet access service providers and others, and increased uncertainty in the value and availability of data. On June 28, 2018, the state of California enacted comprehensive privacy legislation that, effective as of January 1, 2020, gives California consumers the right to know what personal information is being collected about them, and whether and to whom it is sold or disclosed, and to access and request deletion of this information. Subject to certain exceptions, it also gives consumers the right to opt-out of the sale of personal information. The law applies the same rules to all companies that collect

PART I. FINANCIAL INFORMATION (Continued)

FRONTIER COMMUNICATIONS PARENT, INC. AND SUBSIDIARIES

(Unaudited)

consumer information. On May 10, 2022, the state of Connecticut enacted privacy legislation that became effective on July 1, 2022. Frontier's privacy protections are consistent with this new legislation.

Video Programming: Federal, state, and local governments extensively regulate the video services industry. Our linear video services are subject to, among other things: subscriber privacy regulations; requirements that we carry a local broadcast station or obtain consent to carry a local or distant broadcast station; rules for franchise renewals and transfers; the manner in which program packages are marketed to subscribers; and program access requirements.

We provide video programming in some of our markets including California, Connecticut, Florida, Indiana, and Texas pursuant to franchises, permits and similar authorizations issued by state and local franchising authorities. Most franchises are subject to termination proceedings in the event of a material breach or expire in the ordinary course. In addition, most franchises require payment of a franchise fee as a requirement to the granting of authority.

Many franchises establish comprehensive facilities and service requirements, as well as specific customer service standards and monetary penalties for non-compliance. In many cases, franchises are terminable if the franchisee fails to comply with material provisions set forth in the franchise agreement governing system operations. We believe that we are in compliance and meeting all material standards and requirements. Franchises are generally granted for fixed terms and must be periodically renewed. Local franchising authorities may resist granting a renewal if either past performance or the prospective operating proposal is considered inadequate.

Our agreement with Verizon for use of the FiOS brand and trademark in markets acquired from them expired on March 31, 2021 and was not renewed or extended. Frontier rebranded our related data and video services as Frontier FiberOptic Internet and Frontier TV, respectively.

Environmental Regulation:The subsidiaries we operate are subject to federal, state, and local laws, and regulations governing the use, storage, disposal of, and exposure to hazardous materials, the release of pollutants into the environment and the remediation of contamination. As an owner and former owner of property, we are subject to environmental laws that could impose liability for the entire cost of cleanup at contaminated sites, including sites formerly owned by us, regardless of fault or the lawfulness of the activity that resulted in contamination. We believe that our operations are in substantial compliance with applicable environmental laws and regulations.

Critical Accounting Policies and Estimates

The preparation of our financial statements requires management to make estimates and assumptions. There are inherent uncertainties with respect to such estimates and assumptions; accordingly, it is possible that actual results could differ from those estimates and changes to estimates could occur in the near term.

These critical accounting estimates have been reviewed with the Audit Committee of our Board of Directors.

~~Other than the updated indefinite-lived intangibles discussion below, there~~There have been no material changes to our critical accounting policies and estimates from the information provided in Item 7. ~~“Management~~“Management’s Discussion and Analysis of Financial Condition and Results of Operations” included in our Annual Report on Form 10-K for the year ended December 31, ~~2016.~~2021.

~~Indefinite-lived Intangibles~~

Our indefinite-lived intangibles consist of goodwill and trade name, which were generated as a result of business combinations. We test for impairment of these assets annually as of December 31 or more frequently, whenever events occur or facts and circumstances change that make it more likely than not that the fair value of a reporting unit has been reduced below its carrying amount. Events that might indicate impairment include, but are not limited to, strategic decisions made in response to economic and competitive conditions, the impact of the economic environment on our customer base, material negative changes in relationships with significant customers, and/or a significant decline in our stock price for a sustained period.

~~We early adopted ASU~~ 2017-04 “Intangibles – Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment” (“ASU 2017-04”) during the second quarter of 2017. In accordance with ASU 2017-04, our annual goodwill impairment test (and interim test if determined to be necessary) will consist of comparing the fair value of our reporting unit to its carrying value. To the extent that the carrying value exceeds fair value, an impairment will be recognized.

For the purpose of our goodwill impairment test, we first assess qualitative factors to determine if it is more likely than not that fair value of the reporting unit is less than the carrying amount. If it is less, an additional quantitative evaluation must be performed. Our quantitative assessment consists of using a market multiples approach to determine fair value. Marketplace company comparisons and analyst reports within the telecommunications industry have historically supported a range of fair values of multiples between 5.0x and 7.9x annualized EBITDA (defined as operating income,

~~PART I. FINANCIAL INFORMATION (Continued)~~

~~FRONTIER COMMUNICATIONS CORPORATION AND SUBSIDIARIES~~

net of acquisition and integration costs, pension/ OPEB expense, pension settlement costs, stock-based compensation expense, goodwill impairment, storm-related costs, and restructuring costs and other charges, as well as depreciation and amortization).

During 2017, our common stock has declined and traded at historically low prices. As a result, we tested goodwill for impairment in each of the three quarters in 2017. The second quarter quantitative assessment, as described above, resulted in a conclusion that the estimated enterprise fair value was lower than its carrying value, principally due to the decline in our profitability during the period. Accordingly, we recorded a goodwill impairment of $670 million in the second quarter of 2017. The first and third quarter quantitative assessments, did not result in goodwill impairment charges. In estimating the enterprise fair value we used 5.8x as the multiple in each of the three quarters in 2017.

The market multiples approach that we use incorporates significant estimates and assumptions related to the forecasted results for the remainder of the year, including revenues, expenses, and the achievement of other cost synergies. Our assessment includes many qualitative factors that require significant judgment. Alternative interpretations of these factors could have resulted in different conclusions regarding the need for, or size of, an impairment. Continued declines in our profitability or cash flows or in sustained low trading prices of our common stock may result in further impairment.

The enterprise fair value is sensitive to the amount of EBITDA generated by Frontier and the EBITDA multiple used in the calculation. Significant changes in the assumptions or estimates used in our impairment analyses, such as a reduction in profitability and/or cash flows, could result in a non-cash goodwill and indefinite-lived intangible asset impairment charge and materially affect our operating results. The market multiples approach is sensitive to changes in the estimated annual EBITDA, with each $100 million change equating to approximately $580 million of estimated enterprise value. Similarly, a 1% change in the multiple used would affect the estimated enterprise value by approximately $200 million. Sustained low trading prices for our common stock could also affect the reconciliation of our market capitalization and indicate further impairment.

We also considered whether the carrying values of finite-lived intangible assets and property plant and equipment may not be recoverable or whether the carrying value of certain finite-lived intangible assets were impaired, noting no additional impairment was present as of September 30, 2017.

Recent Accounting Pronouncements

See Note 2 of the Notes to Consolidated Financial Statements included in Part I of this report for additional information related to recent accounting literature.

~~Regulatory Developments~~

On April 29, 2015, the FCC released offers of support to price cap carriers under the CAF Phase II program. The intent of these offers is to provide long-term support for carriers for establishing and providing broadband service with at least 10 Mbps downstream/1 Mbps upstream speeds in high-cost unserved or underserved areas. Frontier accepted the CAF Phase II offer in 29 states, including our CTF properties, which provides for $332 million in annual support through 2020 and a commitment to make broadband available to approximately 774,000 households. CAF Phase II support is a successor to the approximately $156 million in annual USF frozen high-cost support that Frontier had been receiving prior to the CTF acquisition, and the $42 million in annual transitional USF frozen high-cost support that Verizon had been receiving in California and Texas. In addition to the annual support levels, these amounts also include frozen support phasedown amounts in states where the annual CAF II funding is less than the prior annual frozen high-cost support funding. The frozen support phasedown support was $35 million in 2015 and $27 million in 2016, and is expected to be $17 million in 2017 and $6 million in 2018.

In February 2017, the FCC adopted an Order further explaining its competitive bidding process to continue to distribute CAF Phase II funding in those high-cost areas where price cap carriers declined the FCC’s offer of support. This auction could present a new support and deployment opportunity.

On August 4, 2017, the FCC adopted a Public Notice initiating the pre-auction process for the Connect America Fund Phase II auction. The Phase II auction will award up to $198 million annually for 10 years to service providers that commit to offer voice and broadband services to fixed locations in unserved high-cost areas; the auction will also account for other service elements such as the minimum data speed provided and data usage allowances. The

~~PART I. FINANCIAL INFORMATION (Continued)~~

~~FRONTIER COMMUNICATIONS CORPORATION AND SUBSIDIARIES~~

auction is likely to begin in 2018 though the exact timeframe is unknown. Frontier has not yet determined whether it will participate in any competitive bid process at this time, and because Frontier accepted virtually all of its available CAF II support up front, we expect the funding available within our footprint to be limited.

On April 20, 2017, the FCC issued an Order that will significantly alter how Commercial Data Services are regulated once the rules go into effect. Specifically, the Order adopted a test to determine, on a county-by-county basis, whether price cap ILECs, like Frontier’s DS1 and DS3 services, will continue to be regulated. The test is likely to result in deregulation in a substantial number of our markets. Once implemented, the deregulation will allow Frontier to offer its DS1 and DS3 services in a manner that better responds to the competitive marketplace and allows for commercial negotiation. The areas that remain regulated may be subject to price fluctuations depending upon the price cap formula that year. Multiple parties have appealed and requested a stay of this Order. Frontier cannot predict the extent to which these regulatory changes will affect revenues at this time.

Item 3. Quantitative and ~~Qualitative~~Qualitative Disclosures about Market Risk

We are exposed to market risk in the normal course of our business operations due to ongoing investing and funding activities, including those associated with our pension plan assets. Market risk refers to the potential change in fair value of a financial instrument as a result of fluctuations in interest rates and equity prices. We do not hold or issue derivative instruments, derivative commodity instruments or other financial instruments for trading purposes. As a

PART I. FINANCIAL INFORMATION (Continued)

FRONTIER COMMUNICATIONS PARENT, INC. AND SUBSIDIARIES

(Unaudited)

result, we do not undertake any specific actions to cover our exposure to market risks, and we are not party to any market risk management agreements other than in the normal course of business. Our primary market risk exposures from interest rate risk and equity price risk are as follows:

Interest Rate Exposure

Our exposure to market risk for changes in interest rates relates primarily to the interest-bearing portion of our pension investment portfolio and the related actuarial liability for pension obligations, as well as our floating rate indebtedness. As of September 30, ~~2017, 80%~~2022, 84% of our total debt had fixed interest rates. We had no interest rate swap agreements in effect at September 30, ~~2017.~~2022. We believe that our currently outstanding obligation exposure to interest rate changes is minimal.

Our objectives in managing our interest rate risk are to limit the impact of interest rate changes on earnings and cash flows and to lower our overall borrowing costs. To achieve these objectives, only ~~$3,537 million of~~ our ~~outstanding borrowings~~$1.45 billion term loan facility has a floating interest rate at September 30, ~~2017 have floating~~2022. The annual impact of a 100 basis point change in LIBOR would result in approximately $15 million of additional interest ~~rates. Our undrawn $850 million revolving credit facility has interest rates~~expense, provided that ~~float with~~ the ~~LIBO Rate, as defined. Consequently, we have limited material future earnings or cash flow exposures from changes in interest rates on our debt.~~LIBOR rate exceeds the LIBOR floor. An adverse change in interest rates would increase the amount that we pay on our variable rate obligations and could result in fluctuations in the fair value of our fixed rate obligations. Interest income from cash invested in term deposits offsets the impact of higher interest expense from floating rate debt. Based upon our overall interest rate exposure, a near-term change in interest rates would not materially affect our consolidated financial position, results of operations or cash flows.

The discount rate assumption for our pension benefit obligation is determined at least annually, or when required, with assistance from our actuaries. The discount rate is based on the pattern of expected future benefit payments and the prevailing rates available on long-term, high quality corporate bonds with durations approximate to that of our benefit obligation. As of December 31, 2021, the discount rate was 2.90%. As of September 30, 2022, the discount rate is 5.60% which was updated in connection with the September 30, 2022 remeasurement.

The discount rate assumption for our OPEB obligation is determined in a similar manner to the pension plan. As of December 31, 2021, the discount rate was 3.00%. The discount rate was updated in connection with the remeasurements in February, May, July and September of 2022. As of September 30, 2022, the discount rate is 5.60% which was updated in connection with the September 30, 2022 remeasurement.

At September 30, ~~2017,~~2022, the fair value of our ~~long-term~~ debt was estimated to be approximately ~~$15.5~~$8.02 billion, based on quoted market prices, our overall weighted average borrowing rate was ~~8.36%~~6.366% and our overall weighted average maturity was approximately ~~six~~seven years. AsRefer to Note 8 for discussion of ~~September 30, 2017, there has been no significant change in~~ the ~~weighted average maturity applicable to~~impact of the Chapter 11 Cases on our ~~obligations since December 31, 2016.~~debt obligations.

Equity Price Exposure

Our exposure to market risks for changes in equity security prices as of September 30, ~~2017~~2022 is primarily limited to our pension plan assets. We have no other security investments of any significant amount.

~~Our Pension Plan~~The value of our pension plan assets decreased $696 million from ~~$2,766~~$2,655 million at December 31, ~~2016~~2021 to ~~$2,604~~$1,959 million at September 30, ~~2017, a decrease of $162 million, or 6%.~~2022. This decrease ~~was a result~~primarily resulted from changes in the market value of investments of $635 million including plan expenses, and benefit payments to participants of ~~$492~~$233 million, partially offset by ~~positive investment returns~~contributions of ~~$270 million, net of investment management and administrative fees, and contributions~~$172 million. While there is a significant reduction in ~~excess~~the assets of the ~~Differential (as defined below) of $60 million, during the first nine months of 2017.~~

~~As part of the CTF Acquisition, Verizon was required to make a cash payment to Frontier for the difference in assets initially transferred by Verizon into the Pension Plan and~~pension plan, the related ~~obligation (the Differential). In~~liability is also expected to decrease due to increases in the ~~third quarter of 2017, we received the $131 million Differential payment from Verizon, and have remitted an equivalent amount to the~~related discount rate.

5059

PART I. FINANCIAL INFORMATION (Continued)

FRONTIER COMMUNICATIONS CORPORATIONPARENT, INC. AND SUBSIDIARIES

(Unaudited)

~~Pension Plan~~

While there is a significant reduction in the assets of the pension plan, discount rates have risen by 270 basis points from 2.90% as of December 31, 2021, to 5.60% as of September 30, ~~2017. As~~2022. If these discount rates remain in effect through the ~~Differential was reflected as a receivable~~end of 2022, the ~~Pension Plan~~projected benefit obligation at December 31, ~~2016,~~2022 would be lower by $930 million compared to the ~~cash~~projected benefit obligation at December 31, 2021. On the funding ~~had no impact to~~side, a sustained pension asset loss could result in a reduced funding percentage and an increased minimum required contribution for the 2023 plan ~~assets.~~year.

Item 4. Controls and Procedures

(a)Evaluation of disclosure controls and ~~Procedures~~procedures

~~(a)~~

~~Evaluation of disclosure controls and procedures~~

We carried out an evaluation, under the supervision and with the participation of our management, including our principal executive officer and principal financial officer, regarding the effectiveness of our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended). Based upon this evaluation, our principal executive officer and principal financial officer concluded, as of the end of the period covered by this report, September 30, ~~2017,~~2022, that our disclosure controls and procedures were ~~effective.~~ effective in recording, processing, summarizing and reporting on a timely basis, information required to be disclosed by the Company in the reports that it files or submits under the Exchange Act and were effective in ensuring that information required to be disclosed by the Company in the reports that it files or submits under the Exchange Act is accumulated and communicated to the Company’s management, including the principal executive officer and principal financial officer, as appropriate to allow timely decisions regarding required disclosure.

~~(b)~~

(b)Changes in ~~internal control over financial reporting~~

~~We reviewed our~~ internal control over financial reporting ~~at September 30, 2017.~~

There have been no changes in our internal control over financial reporting (as such term is defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) identified in an evaluation thereof that occurred during the ~~third fiscal quarter~~first nine months of ~~2017~~2022 that materially affected, or are reasonably likely to materially affect, our internal control over financial ~~reporting~~.reporting.

PART II. OTHER INFORMATION

~~FRONTIER COMMUNICATIONS CORPORATION AND SUBSIDIARIES~~

Item 1. Legal Proceedings

~~See Note 15~~On July 27, 2022, the Connecticut Public Utility Regulatory Authority (“PURA”) issued a Notice of Violation and Assessment of Civil Penalty Order to Cease and Desist (“NOV”) related to the ~~Notes~~underground excavation and placement of fiber facilities by Frontier and its contractors in Connecticut. The NOV alleged that Frontier and its contractors failed to ~~Consolidated Financial Statements included~~comply with certain state excavation regulations which created public safety and compliance issues. The NOV prescribed a fine and ordered Frontier to discontinue certain underground fiber deployment work until the Company submitted a compliance plan to ensure compliance with the applicable regulations. Frontier submitted a compliance and inspection plan consistent with the NOV and paid the fine. On August 26, 2022, PURA approved Frontier’s compliance and inspection plan, and the Company is proceeding with underground fiber deployment in Part I, Item 1 of this report. There have been no material changes to our legal proceedings from the information provided in Item 3. “Legal Proceedings” included in our Annual Report on Form 10-K for the year ended December 31, 2016. Connecticut.

WeIn addition, we are party to various other legal proceedings (including individual, class and putative class ~~actions)~~actions as well as federal and state governmental investigations) arising in the normal course of our business covering a wide range of matters and types of claims including, but not limited to, general contracts, billing disputes, rights of access, taxes and surcharges, consumer protection, trademark, copyright and patent infringement, employment, regulatory, tort, claims of competitors and disputes with other carriers. ~~Litigation is~~Such matters are subject to uncertainty and the outcome of individual matters is not predictable. However, we believe that the ultimate resolution of ~~all such~~these matters, after considering insurance coverage or other indemnities to which we are entitled, will not have a material adverse effect on our financial position, results of operations, or cash flows.

Item 1A. Risk ~~Factors~~Factors

There have been no material changes to the Risk Factors described in Part 1, Item ~~1A.~~1A “Risk Factors” in our Annual Report on Form 10-K for the ~~fiscal~~ year ended December 31, ~~2016.~~ 2021.

~~PART II. OTHER INFORMATION (Continued)~~

~~FRONTIER COMMUNICATIONS CORPORATION AND SUBSIDIARIES~~

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

There were no unregistered sales of equity securities during the quarter ended September 30, ~~2017.~~2022.

‎

~~ISSUER PURCHASES OF EQUITY SECURITIES~~

Period

Total Number of Shares Purchased

Average Price Paid per Share

July 1, 2017 to July 31, 2017

Employee Transactions (1)

625

$
15.83

August 1, 2017 to August 31, 2017

Employee Transactions (1)

222

$
14.68

September 1, 2017 to September 30, 2017

Employee Transactions (1)

68

$
13.54

Totals July 1, 2017 to September 30, 2017

Employee Transactions (1)

915

$
15.38

~~(1)~~ Includes shares withheld (under the terms of grants under employee stock compensation plans) to offset minimum tax withholding obligations that occur upon the vesting of restricted shares and the LTIP performance shares earned during the period. Frontier’s stock compensation plans provide that the value of shares withheld shall be based on the average of the high and low price of our common stock on the date the relevant transaction occurs, for shares vested prior to May 2017. Beginning in May 2017, the value of the shares withheld shall be based on the closing price of our common stock on the date the relevant transaction occurs.

~~Item 4.~~ ~~Mine Safety Disclosure~~

~~Not applicable~~.

PART II. OTHER INFORMATION ~~(Continued)~~

~~FRONTIER COMMUNICATIONS CORPORATION AND SUBSIDIARIES~~

Item 6. ~~Exhibits~~Exhibits


(a)	Exhibits:
	Exhibit Number				Description
	~~31.1~~	31.1				Certification of Principal Executive Officer pursuant to Rule 13a-14(a) under the Securities Exchange Act of 1934.
	~~31.2~~	31.2				Certification of Principal Financial Officer pursuant to Rule 13a-14(a) under the Securities Exchange Act of 1934.
	32	32				Certifications of Chief Executive Officer and Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
	~~101.INS~~ 101		~~XBRL Instance Document.~~		The following materials from Frontier’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2022, formatted in iXBRL (inline eXtensible Business Reporting Language): (i) the Consolidated Balance Sheets; (ii) the Consolidated Statements of Income; (iii) the Consolidated Statements of Comprehensive Loss; (iv) the Consolidated Statements of Equity (Deficit); (v) the Consolidated Statements of Cash Flows; and (vi) Notes to Consolidated Financial Statements.
	~~101.SCH~~104		~~XBRL Taxonomy Extension Schema Document.~~
	~~101.PRE~~		~~XBRL Taxonomy Presentation Linkbase Document.~~
	~~101.CAL~~Cover Page from Frontier’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2022, formatted in iXBRL and contained in Exhibit 101.			~~XBRL Taxonomy Calculation Linkbase Document.~~
	~~101.LAB~~	~~XBRL Taxonomy Label Linkbase Document.~~
	~~101.DEF~~	~~XBRL Taxonomy Extension Definition Linkbase Document.~~

~~SIGNATURE~~

SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.


	FRONTIER COMMUNICATIONS ~~CORPORATION~~PARENT, INC.
	~~(Registrant)~~


	By: /s/ ~~Donald Daniels~~William McGloin
	~~Donald Daniels~~William McGloin
	~~Senior Vice President~~Chief Accounting Officer and Controller
	(Principal Accounting Officer)

Date: November 2, ~~2017~~2022


Delaware		~~06-0619596~~86-2359749
(State or other jurisdiction of		(I.R.S. Employer Identification No.)
incorporation or organization)

401 Merritt 7
Norwalk, Connecticut		06851
(Address of principal executive offices)		(Zip Code)



	(Unaudited)
	September 30, 2017		December 31, 2016
ASSETS
Current assets:
Cash and cash equivalents	$	286	$	522
Accounts receivable, less allowances of $69 and $131, respectively		780		938
Prepaid expenses		98		88
Income taxes and other current assets		98		108
Total current assets		1,262		1,656

Property, plant and equipment, net		14,375		14,902
Goodwill		9,102		9,674
Other intangibles, net		2,223		2,662
Other assets		114		119
Total assets	$	27,076	$	29,013

LIABILITIES AND EQUITY
Current liabilities:
Long-term debt due within one year	$	166	$	363
Accounts payable		509		698
Advanced billings		277		301
Accrued content costs		130		164
Accrued other taxes		177		134
Accrued interest		205		437
Pension and other postretirement benefits		23		23
Other current liabilities		306		324
Total current liabilities		1,793		2,444

Deferred income taxes		2,253		2,516
Pension and other postretirement benefits		1,647		1,602
Other liabilities		369		372
Long-term debt		17,604		17,560

Equity:
Preferred stock, $0.01 par value (50,000 authorized shares,
11.125%, Series A, 19,250 shares issued and outstanding)		-		-
Common stock, $0.25 par value (175,000 authorized shares,
79,532 issued and 78,462 and 78,170 outstanding,
at September 30, 2017 and December 31, 2016, respectively)		20		20
Additional paid-in capital		5,124		5,561
Accumulated deficit		(1,234)		(460)
Accumulated other comprehensive loss, net of tax		(349)		(387)
Treasury common stock		(151)		(215)
Total equity		3,410		4,519
Total liabilities and equity	$	27,076	$	29,013




			Nine months ended September 30, 2017

($ in millions)	January 1, 2017		Payments and Retirements		New Borrowings		September 30, 2017		Interest Rate at September 30, 2017*

Senior and Subsidiary Unsecured Debt	$	15,900	$	(1,544)	$	-	$	14,356	9.22%
Senior Secured Debt		2,151		(114)		1,500		3,537	4.90%
Secured Subsidiary Debt		100		-		-		100	8.50%
Other Secured Debt		19		(3)		-		16	5.25%
Rural Utilities Service Loan Contracts		8		(1)		-		7	6.15%
Total Long-Term Debt	$	18,178	$	(1,662)	$	1,500	$	18,016	8.36%

Less: Debt Issuance Costs		(209)						(190)
Less: Debt Premium/(Discount)		(46)						(56)
Less: Current Portion		(363)						(166)
	$	17,560					$	17,604



($ in millions)	Pension Costs		OPEB Costs		Deferred Taxes on Pension and OPEB Costs		Total

Balance at January 1, 2017	$	(647)	$	29	$	231	$	(387)
Other comprehensive income (loss) before reclassifications		(34)		1		12		(21)
Amounts reclassified from accumulated other comprehensive loss to net loss		23		(7)		(5)		11
Recognition of net actuarial loss for pension settlement costs in net loss		77		-		(29)		48
Net current-period other comprehensive income (loss)		66		(6)		(22)		38
Balance at September 30, 2017	$	(581)	$	23	$	209	$	(349)



	Amount Reclassified from
($ in millions)	Accumulated Other Comprehensive Loss (a)


Details about Accumulated Other Comprehensive Loss Components	For the three months ended September 30,				For the nine months ended September 30,				Affected Line Item in the Statement Where Net Income (Loss) is Presented
	2017		2016		2017		2016
Amortization of Pension Cost Items (b)
Actuarial gains (losses)	$	(6)	$	(9)	$	(23)	$	(30)
Pension settlement costs		(15)		-		(77)		-
		(21)		(9)		(100)		(30)	Income (loss) before income taxes
Tax impact		8		3		37		11	Income tax (expense) benefit
	$	(13)	$	(6)	$	(63)	$	(19)	Net income (loss)

Amortization of OPEB Cost Items (b)
Prior-service costs	$	2	$	2	$	7	$	7
Actuarial gains (losses)		1		-		-		(1)
		3		2		7		6	Income (loss) before income taxes
Tax impact		(2)		-		(3)		(2)	Income tax (expense) benefit
	$	1	$	2	$	4	$	4	Net income (loss)



	Postretirement Benefits
	For the three months ended				For the nine months ended
	September 30,				September 30,

($ in millions)	2017		2016		2017		2016

Components of net periodic postretirement benefit cost
Service cost	$	5	$	6	$	16	$	14
Interest cost on projected benefit obligation		11		10		30		27
Amortization of prior service cost/(credit)		(2)		(2)		(7)		(7)
Amortization of unrecognized (gain) loss		(1)		-		-		1
Net periodic postretirement benefit cost	$	13	$	14	$	39	$	35


	As of or for the three months ended
	September 30, 2017			December 31, 2016		% Increase (Decrease)		September 30, 2016			% Increase (Decrease)

Customers (in thousands)		4,949			5,393	(8)	%		5,551	(1)	(11)	%

Consumer customer metrics
Customers (in thousands)		4,486			4,891	(8)	%		5,035	(1)	(11)	%
Net customer additions/(losses)		(99)			(144)	(31)	%		(155)		(36)	%
Average monthly consumer
revenue per customer	$	80.91		$	80.33	1	%	$	82.34		(2)	%
Customer monthly churn		2.08%			2.08%	-	%		2.08%		-	%

Commercial customer metrics
Customers (in thousands)		463			502	(8)	%		516	(1)	(10)	%

Broadband subscriber metrics
(in thousands)
Broadband subscribers		4,000			4,271	(6)	%		4,362	(2)	(8)	%
Net subscriber additions/(losses)		(63)			(91)	(31)	%		(99)		(36)	%

Video (excl. DISH) subscriber metrics
(in thousands)
Video subscribers (in thousands)		981			1,145	(14)	%		1,222	(2)	(20)	%
Net subscriber additions/(losses)		(26)			(77)	(66)	%		(82)		(68)	%

DISH subscriber metrics
(in thousands)
DISH subscribers (in thousands)		244			274	(11)	%		281	(2)	(13)	%
Net subscriber additions/(losses)		(10)			(7)	43	%		(11)		(9)	%

Employees		23,181	(3)		28,332	(18)	%		30,358		(24)	%

	As of or for the nine months ended
	September 30, 2017			September 30, 2016		% Increase

Consumer customer metrics
Average monthly consumer
revenue per customer	$	80.73		$	76.11	6	%
Customer monthly churn		2.23%			1.94%	15	%



Period	Total Number of Shares Purchased	Average Price Paid per Share

July 1, 2017 to July 31, 2017
Employee Transactions (1)	625	$	15.83

August 1, 2017 to August 31, 2017
Employee Transactions (1)	222	$	14.68

September 1, 2017 to September 30, 2017
Employee Transactions (1)	68	$	13.54


Totals July 1, 2017 to September 30, 2017
Employee Transactions (1)	915	$	15.38

FRONTIER COMMUNICATIONS CORPORATIONPARENT, INC. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETSSHEETS

FRONTIER COMMUNICATIONS CORPORATIONPARENT, INC. AND SUBSIDIARIES

FRONTIER COMMUNICATIONS PARENT, INC. AND NINE MONTHS ENDED SEPTEMBER 30, 2017 AND 2016SUBSIDIARIES

FRONTIER COMMUNICATIONS PARENT, INC. AND SUBSIDIARIES

FRONTIER COMMUNICATIONS CORPORATIONCOMMUNICATIONS PARENT, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTSTATEMENTS OF EQUITY (DEFICIT)

FRONTIER COMMUNICATIONS CORPORATIONCOMMUNICATIONS PARENT, INC. AND SUBSIDIARIES

FRONTIER COMMUNICATIONS CORPORATIONPARENT, INC. AND SUBSIDIARIES

FRONTIER COMMUNICATIONS PARENT, INC. AND SUBSIDIARIES

FRONTIER COMMUNICATIONS PARENT, INC. AND SUBSIDIARIES

FRONTIER COMMUNICATIONS PARENT, INC. AND SUBSIDIARIES

FRONTIER COMMUNICATIONS CORPORATIONPARENT, INC. AND SUBSIDIARIES

FRONTIER COMMUNICATIONS CORPORATIONPARENT, INC. AND SUBSIDIARIES

FRONTIER COMMUNICATIONS CORPORATIONPARENT, INC. AND SUBSIDIARIES

FRONTIER COMMUNICATIONS CORPORATIONPARENT, INC. AND SUBSIDIARIES

FRONTIER COMMUNICATIONS CORPORATIONPARENT, INC. AND SUBSIDIARIES

FRONTIER COMMUNICATIONS PARENT, INC. AND SUBSIDIARIES

FRONTIER COMMUNICATIONS PARENT, INC. AND SUBSIDIARIES

FRONTIER COMMUNICATIONS CORPORATIONPARENT, INC. AND SUBSIDIARIES

FRONTIER COMMUNICATIONS CORPORATIONPARENT, INC. AND SUBSIDIARIES

FRONTIER COMMUNICATIONS CORPORATIONPARENT, INC. AND SUBSIDIARIES

FRONTIER COMMUNICATIONS CORPORATIONPARENT, INC. AND SUBSIDIARIES

FRONTIER COMMUNICATIONS CORPORATIONPARENT, INC. AND SUBSIDIARIES

FRONTIER COMMUNICATIONS PARENT, INC. AND SUBSIDIARIES

FRONTIER COMMUNICATIONS PARENT, INC. AND SUBSIDIARIES

FRONTIER COMMUNICATIONS PARENT, INC. AND SUBSIDIARIES

FRONTIER COMMUNICATIONS PARENT, INC. AND SUBSIDIARIES

FRONTIER COMMUNICATIONS PARENT, INC. AND SUBSIDIARIES

FRONTIER COMMUNICATIONS CORPORATIONPARENT, INC. AND SUBSIDIARIES

FRONTIER COMMUNICATIONS CORPORATIONPARENT, INC. AND SUBSIDIARIES

FRONTIER COMMUNICATIONS CORPORATIONPARENT, INC. AND SUBSIDIARIES

FRONTIER COMMUNICATIONS PARENT, INC. AND SUBSIDIARIES

FRONTIER COMMUNICATIONS CORPORATIONPARENT, INC. AND SUBSIDIARIES

FRONTIER COMMUNICATIONS PARENT, INC. AND SUBSIDIARIES

FRONTIER COMMUNICATIONS CORPORATIONPARENT, INC. AND SUBSIDIARIES

FRONTIER COMMUNICATIONS CORPORATIONPARENT, INC. AND SUBSIDIARIES

FRONTIER COMMUNICATIONS PARENT, INC. AND SUBSIDIARIES

FRONTIER COMMUNICATIONS CORPORATIONPARENT, INC. AND SUBSIDIARIES

FRONTIER COMMUNICATIONS PARENT, INC. AND SUBSIDIARIES

FRONTIER COMMUNICATIONS CORPORATIONPARENT, INC. AND SUBSIDIARIES

FRONTIER COMMUNICATIONS PARENT, INC. AND SUBSIDIARIES

FRONTIER COMMUNICATIONS PARENT, INC. AND SUBSIDIARIES

FRONTIER COMMUNICATIONS CORPORATIONPARENT, INC. AND SUBSIDIARIES

FRONTIER COMMUNICATIONS PARENT, INC. AND SUBSIDIARIES

FRONTIER COMMUNICATIONS PARENT, INC. AND SUBSIDIARIES

FRONTIER COMMUNICATIONS CORPORATIONPARENT, INC. AND SUBSIDIARIES

FRONTIER COMMUNICATIONS PARENT, INC. AND SUBSIDIARIES

FRONTIER COMMUNICATIONS PARENT, INC. AND SUBSIDIARIES

FRONTIER COMMUNICATIONS CORPORATIONPARENT, INC. AND SUBSIDIARIES

FRONTIER COMMUNICATIONS CORPORATIONPARENT, INC. AND SUBSIDIARIES

FRONTIER COMMUNICATIONS PARENT, INC. AND SUBSIDIARIES

FRONTIER COMMUNICATIONS PARENT, INC. AND SUBSIDIARIES

FRONTIER COMMUNICATIONS PARENT, INC. AND SUBSIDIARIES

FRONTIER COMMUNICATIONS PARENT, INC. AND SUBSIDIARIES

FRONTIER COMMUNICATIONS CORPORATIONPARENT, INC. AND SUBSIDIARIES

FRONTIER COMMUNICATIONS PARENT, INC. AND SUBSIDIARIES

Off-Balance Sheet Arrangements

We do not maintain any off-balance sheet arrangements, transactions, obligations or other relationships with unconsolidated entities that would be expected to have a material current or future effect upon our financial statements.

FRONTIER COMMUNICATIONS PARENT, INC. AND SUBSIDIARIES

FRONTIER COMMUNICATIONS PARENT, INC. AND SUBSIDIARIES

FRONTIER COMMUNICATIONS PARENT, INC. AND SUBSIDIARIES

Interest Rate Exposure

Equity Price Exposure

FRONTIER COMMUNICATIONS CORPORATIONPARENT, INC. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS
SHEETS

CONSOLIDATED STATEMENTSTATEMENTS OF EQUITY
(DEFICIT)