Exhibit 99.2
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1 August 5, 2022 FRONTIER second QUARTER 2022 RESULTS
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2 Safe Harbor Statement Forward-Looking Statements This release contains "forward-looking statements" related to future events, including the updated 2022 financial and operational outlook. Forward-looking statements address our expectations or beliefs concerning future events, including, without limitation, our outlook with respect to future operating and financial performance, expected results from our implementation of strategic and cost savings initiatives, and our ability to comply with the covenants in the agreements governing our indebtedness and 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,” “may,” “will,” “would,” or “target.” Forward-looking statements by their nature address matters that are, to different degrees, uncertain. 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 current indebtedness that may reduce our operating and financial flexibility; declines in Adjusted EBITDA relative to 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 and service 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 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; 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 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 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; our reliance on a limited number of key supplies and vendors; declines in revenue from our voice services, switched and non-switched access and video and data services that we cannot stabilize or offset with increases in revenue from other products and services; 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, including participation in the proposed RDOF program; our ability to comply with the applicable CAF II and RDOF requirements 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; 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 and our implementation of fresh start accounting; 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, 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 effectively manage increased demand on our network, our ability to maintain relationships with our current or prospective customers and vendors as well as their abilities to perform under current or proposed arrangements with us; risks associated with our emergence from the Chapter 11 Cases, including, but not limited to, the continuing effects of the Chapter 11 Cases on us and our relationships with our suppliers, customers, service providers or employees and changes in the composition of our board of directors and senior management; volatility in the trading price of our common stock, which has a limited trading history; substantial market overhang from the substantial common stock holdings by our former creditors issued in the Chapter 11 reorganization; 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. This list of factors that may affect future performance and the accuracy of forward-looking statements is illustrative and is not intended to be exhaustive. You should consider these important factors, as well as the risks and other factors contained in Frontier’s filings with the U.S. Securities and Exchange Commission, including our most recent reports on Form 10-K and Form 10-Q. These risks and uncertainties may cause actual future results to be materially different than those expressed in such forward-looking statements. We do not intend, nor do we undertake any duty, to update any forward-looking statements. Non-GAAP Financial Measures Certain financial measures included herein, including Adjusted EBITDA, Adjusted EBITDA Margin, Adjusted Operating Expenses and Operating Free Cash Flow, are not made in accordance with U.S. GAAP, and use of such terms varies from others in the same industry. Non-GAAP financial measures should not be considered as alternatives to net income (loss), net income margin or any other performance measures derived in accordance with U.S. GAAP as measures of operating performance or cash flows as measures of liquidity. Non-GAAP financial measures have important limitations as analytical tools, and you should not consider them in isolation or as substitutes for results as reported under U.S. GAAP. This presentation includes a reconciliation of certain non-GAAP financial measures to the most directly comparable financial measures calculated in accordance with U.S. GAAP. Projected GAAP financial measures and reconciliations of projected non-GAAP financial measures are not provided herein because such GAAP financial measures are not available on a forward-looking basis and such reconciliations could not be derived without unreasonable effort. This presentation uses the term “Implied Enterprise Value”, “Implied EV” and other similar terms, which is calculated using a trend line implied by our peers and certain assumed levels of broadband penetration. This term does not necessarily represent our actual enterprise value.
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3 JOHN STRATTON Executive Chairman of the Board
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4 Frontier today: Company overview 1. All metrics reflect Last Twelve Months’ as of 06/30/22, and have been normalized to reflect the impact of fresh start accounting. EBITDA and Adjusted EBITDA are non-GAAP measures. See Appendix slides for reconciliations to the closest GAAP measure. See Frontier’s supplemental trending schedules, available at www.frontier.com/ir, for information regarding certain GAAP and non-GAAP measures, including the impact of fresh start accounting. 2. Including consumer and business broadband subscribers 15.3M Total Passings 4.4M Fiber Passings 2.8M Broadband Customers2 1.5M Fiber Broadband Customers2 $6.0B Revenue1 $2.7B Fiber Revenue1 $2.2B Adjusted EBITDA1 $1.1B Fiber Adjusted EBITDA1 Frontier Footprint Key Operational & Financial Metrics
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5 Fiber is best positioned to meet long-term demand for data Symmetrical upload and download speeds, faster than cable and other emerging wireless technologies, while also delivering the lowest latency Clear path to 10 Gbps service, at lower capital intensity and lowest cost of delivery given passive infrastructure Frontier fiber customers already consume 0.9TB of data per month on average, multiples of what cable and emerging wireless alternatives support today Fiber is the preferred infrastructure for government broadband stimulus given future-proof characteristics The best product The highest usage Best economics as usage scales America’s future- proof infrastructure
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6 Financial profile of Wave 3 has become more attractive as we improve our build and government subsidies become available Wave 1: Fiber at the end of 2021 Wave 3: Subsidy-dependent Will accelerate where appropriate Wave 2: Fiber build plan Announced in August 2021 15M Initial analysis suggests 1-2M+ additional locations attractive without requiring subsidies ~3-4M locations dependent on ~$42B in federal infrastructure funding Fiber build returns are improving as execution scales Recent debt raise enables time and optionality to curate assets
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7 We affirmed our commitment to ESG in inaugural report Building energy-efficient fiber networks Reducing energy use and establishing Frontier Green initiatives Greening our fleet Reducing our greenhousegas emissions Environment Building a great place to work Engaging our team members Focusing on worker safety Valuing diversity, equity and inclusion Social Governance Diverse Board representation with oversight of material ESG issues Comprehensive compliance and ethics programs Robust Code of Conduct and practices, including data privacy and security
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8 Building Gigabit AmericaTM Fiber Deployment Fiber Penetration Operational Efficiency Accelerate our fiber build Customer Experience Win customers in our fiber footprint Simplify and digitize operations Deliver an exceptional end-to-end customer journey 1 2 3 4 We are making rapid progress on our four levers of value creation
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9 nick Jeffery President & Chief Executive Officer
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10 Our operating momentum remained strong in 2Q22 Built a record 281,000 new fiber locations and raised 2022 build target to 1.1-1.2M locations Raised $1.2 billion of debt to secure funding for fiber build through mid-2024 Achieved sequential EBITDA growth, demonstrating the earnings power of our business and helping drive an increase to 2022 EBITDA guidance 54,000 fiber broadband customer net adds, ~4x higher than the same period a year ago Achieved record SMB net adds driven by critical improvements in business segment
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We have a clear path of transformation, and have achieved catalysts ahead of plan Key Inflection Points Achieved Catalyst Year-over-year revenue and EBITDA growth 2023 Fiber EBITDA > copper EBITDA Consumer fiber broadband customer base > consumer copper broadband customer base Scale fiber broadband net add production 3Q21 Total broadband net adds turn positive 4Q21 Further accelerate the fiber build Sequential EBITDA growth 2Q22 Sustainable EBITDA inflection 4Q22 Scale the fiber build 2Q21
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12 Fiber deployment: We further accelerated the scale of our build and raised our build target for 2022… 1. Consumer and business locations with less than 5 units per location included in expansion passings. Quarterly Fiber Expansion Passings1Thousand passings Projected Fiber Passings1Million passings Wave 2: 10M+ fiber passings by end of 2025 Wave 1: ~4M fiber passings at end of 2021 1Q21 1Q20 2Q21 3Q20 2Q20 4Q21 4Q20 3Q21 1Q22 2Q22 2022 2020 2021 2025 2023 2024 1.1 - 1.2M expected in 2022
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13 …and our strong foundation gives us confidence in accelerating the build even further in 2023 Expanded the fiber build into six additional states this year and plan to build in at least twelve states by the end of the year Improved permitting process to reduce time to permit Continue managing through inflation and labor challenges while realizing cost efficiencies as build scales Diversified supply chain with additional contracts for labor and equipment
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14 Consumer fiber penetration: Broadband customer growth continues to accelerate Consumer Fiber Broadband Net Adds‘000 customers …driving fiber broadband customer growth of 14% in the past 12 months Consumer fiber broadband net adds increased ~4X the previous Q2… 4Q20 3Q21 1Q20 4Q21 2Q20 1Q22 3Q20 1Q21 2Q21 2Q22 +14% 4Q20 4Q21 1Q20 2Q21 3Q20 2Q20 1Q21 3Q21 1Q22 2Q22 ~4X growth Consumer Fiber Broadband Customers‘000 customers
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15 Fiber penetration: Base fiber penetration improved to 42.6%; expansion fiber penetration is exceeding targets Base Fiber Penetration% of passings Expansion Fiber Penetration % of passings Expansion fiber penetration exceeding targets Base fiber penetration improved 140bps year-over-year to 42.6% 2021 Build Cohort 2020 Build Cohort 41.5% 41.2% 2Q21 42.6% 4Q21 42.4% 40.8% 1Q21 2Q20 3Q21 1Q22 41.2% 2Q22 4Q20 40.7% 41.3% 41.9% 41.0% 1Q20 3Q20 +140bps 12-month 24-month 12-month Target Range
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16 Structural price increases and rising Gig+ speed adoption support long-term ARPU growth Consumer Fiber Gig+ Mix % Consumer Fiber Broadband ARPU$ per month 4Q21 3Q21 1Q20 2Q21 2Q20 3Q20 4Q20 1Q21 1Q22 2Q22 +2% 2% sequential increase in Consumer Fiber broadband ARPU, driven by annual price increases and improved speed mix Gig+ mix of consumer fiber activations has climbed for new activations, with significant opportunity still in base Embedded Base Activations1 1. Activations include customers who are new to Frontier as well as migrations from copper < 1Gig Gig+ 45-50% 50-55% 10-15% 85-90%
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17 Customer experience: Key success indicators remain strong… 2Q21 2Q22 Fiber -10 pts 2Q21 2Q22 Copper +6 pts Early Success Indicators Consumer Broadband Churn, % Fiber NPS up sequentially from March 2022, and continued to increase ~30 points year-over-year 90-day fiber churn down ~50 pts since 2Q21 Call center volumes down ~10% since 2Q21 Fiber brand NPS increased 14 points from March 2022 and now ranks highest among our major competitors
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18 …as we systematically drive improvements every single week Digital First Customer Experience AI / Digital Workforce Modernized Agent Management Deployed In process Interactive Virtual Assistant Digital self-service functionality Self-help videos Scaled self-install capabilities Where’s My Tech Enhanced mobile app AI-supported dispatch logic Call center simplification Telematics for improved dispatch routing AI-enabled Chatbot Enhanced agent tools AI-guided workflows Innovation centers Mobile tech portal Natural language processing for improved diagnostics
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Business Fiber Broadband Customers‘000 customers 19 Small business is steadily improving Strengthened product with 2G offering and RingCentral partnership Increased market awareness through demand generation and lead identification campaigns Expanded channels in outbound telemarketing and D2D Account management team focused on cross/up-sell Analytically driven retention efforts focused on high risk of churn customers Key SMB Improvements 3Q21 4Q21 1Q20 2Q20 3Q20 1Q21 4Q20 2Q21 1Q22 2Q22 +7%
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20 Scott Beasley Chief Financial Officer
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21 Financial highlights Q2 2022 $1.46B Revenue, as sequentially higher Consumer revenue offset lower Business and Wholesale revenue $101M Net Income $535M of Adjusted EBITDA, higher sequentially driven by higher Fiber and Subsidy and Other adjusted EBITDA $292M of Adjusted EBITDA from Fiber Products, up sequentially due to a combination of revenue growth and cost savings $229M of Net Cash from Operations, driven by healthy operating performance and continued focus on liquidity and working capital management
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Revenue from Fiber1, $M 1. Excluding subsidy and other revenue. See the supplemental trending schedules, available at www.frontier.com/ir, for information regarding certain GAAP and non-GAAP financial measures, including the impact of fresh start accounting. Revenue Commentary Consumer Fiber broadband revenue grew ~13% year-over-year, leading to overall Consumer Fiber revenue growth Video and voice Fiber revenue declined year-over-year but were roughly flat sequentially Business and Wholesale Fiber revenue declined ~1% year-over-year but was roughly flat sequentially Revenue from Copper products declined 9% year-over-year, driven by declines across consumer, business and wholesale Consumer Copper revenue declined 8% year-over-year, but was roughly flat sequentially as broadband growth offset voice and other declines Q2 2021 685 Q1 2022 Q2 2022 679 672 Business and Wholesale Consumer 770 834 Q2 2021 Q1 2022 Q2 2022 757 Revenue from Copper1, $M Strong fiber broadband revenue growth offset voice and video declines
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EBITDA growth from Fiber products accelerated, driving a sequential increase in consolidated EBITDA Adjusted EBITDA from Fiber products grew 6% year-over-year driven by strong consumer broadband growth and margin improvements Adjusted EBITDA from Fiber products represents 56% of total EBITDA, up from 51% in Q2 2021 Adjusted EBITDA from Copper products was in-line with our expectations, and we continue to expect year-over-year declines to moderate in 2H22 Adjusted EBITDA1, $M Adjusted EBITDA Commentary 504 Q2 2022 Q2 2021 Q1 2022 544 Fiber Copper 519 1. Excluding subsidy and other revenue. EBITDA and Adjusted EBITDA are non-GAAP financial measures. See the supplemental trending schedules, available at www.frontier.com/ir, and the Appendix hereto for information regarding Adjusted EBITDA from Fiber and Copper products.
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24 We have $3.7B of liquidity to fund the fiber build, with no significant debt maturities before 2027 Liquidity $M, as of June 30, 2022 2025 2028 2022 2023 2029 2024 2030 2026 2027 2031 Maturity Profile1 $M, as of June 30, 2022 2.8x2 2Q22 Leverage Ratio 6.2% Weighted Average Cost of Debt 7.2 Years Weighted Average Life of Debt 1. Excludes amortization payments of ~$15 million per year on Term Loan. 2. Leverage ratio is a non-GAAP measure. See supplemental trending schedules available at www.frontier.com/ir. Wave 2 Build Cash & Short-term Investments Available Revolver Capacity 3,745 84% Share of Debt at Fixed Interest Rates
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Our business continues to generate healthy cash from operations, aided by our aggressive cost reduction program Business simplification Strong cash flow generation Prudent balance sheet management Rigorous capital allocation “Fit for the Future” cost program has realized ~$200 million of gross annualized cost savings, and remains on track to exceed $250 million savings goal by 2023 We generated $757M of net cash from operating activities in the first six months of the year Net leverage of 2.8x1 today, with target of “mid-threes” Liquidity of $3.7 billion to fund fiber build through mid-2024 Fiber build will be primary focus of capital allocation; dynamic model to target highest IRR opportunities for revenue growth and cost reduction 1. Leverage ratio is a non-GAAP measure. See supplemental trending schedules available at www.frontier.com/ir.
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Products that are critical for connecting to the digital society Cost structure to endure inflationary environment Balance sheet insulated from rising interest rates We are well positioned to withstand economic environment and have not seen an impact on consumer payment behavior 84% of debt is at fixed interest rates1 No significant maturities until 2027 100 basis point increase in interest rates results in incremental annual cash interest expense of ~$15M Inflationary fuel, energy, and labor costs represent small portion of cost structure Multi-year agreements in place with key material and labor partners Fit for the Future cost reduction program ahead of plan, will help offset inflationary pressures Provide a wide range of products and services with un-matched value Bringing more value to customers is at the core of everything we do Customer health metrics continue to trend favorably 1. As of 6/30/2022
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27 Raising the midpoint of 2022 Adjusted EBITDA guidance Note: Projected GAAP financial measures and reconciliations of projected non-GAAP financial measures are not provided herein because such GAAP financial measures are not available on a forward-looking basis and such reconciliations could not be derived without unreasonable effort. Adjusted EBITDA is a non-GAAP Financial measure. Capital Expenditures $2.40-2.50B $2.50-2.60B Fiber Build Locations 1.0M 1.1-1.2M Adjusted EBITDA $2.00-2.15B $2.05-2.15B Prior 2022 Outlook Current 2022 Outlook
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28 Frontier investment thesis Strong & growing demand Superior product Favorable market structure Clear strategy & purpose Ample liquidity & access to capital Strong & experienced leadership team
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29 Q & A
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30 appendix
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EBITDA margin 38.5% 36.9% 35.3% 35.9% 28.0% Adjusted EBITDA margin 40.0% 39.2% 37.2% 37.9% 35.2% (Millions) Q1 2021 Q2 2021 Q3 2021 Q4 2021 Q1 2022 Net Income $60 $4,580 $126 $189 $65 Add back (Subtract) Income Tax Expense (Benefit) 87 (180) 31 12 30 Interest Expense 89 91 90 105 103 Investment and Other (Income) Loss, Net (2) 3 37 (34) (77) Reorganization Items, Net 25 (4,196) - - - Operating Income 259 298 284 272 121 Depreciation and Amortization 387 298 273 282 284 EBITDA $646 $596 $557 $554 $405 Add back: Pension / OPEB Expense $23 $21 $18 $19 $19 Restructuring Costs and Other Charges 2 16 8 2 54 Rebranding Costs - - - - 8 Stock-based Compensation Expense (1) - 8 10 15 Legal Settlement - - - - 8 Storm Related Insurance Proceeds - - (4) - - Adjusted EBITDA $670 $633 $587 $585 $509 Non-GAAP Financial Measures Q2 2022 $101 69 118 (122) - 166 290 $456 $18 30 11 20 - - $535 31.3% 36.7%
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