FRONTIER COMMUNICATIONS PARENT, INC. : Change of administrators or senior administration, different occasions, monetary statements and supporting paperwork (kind 8-Ok)

Merchandise 5.02 Departure of administrators or sure officers; Election of administrators; Appointment of sure officers; Compensatory provisions of sure managers

Departure of some officers

Steve gable, govt vice-president and Digital chef and data officer, resigned his submit on Could 12, 2021. Ken arndt, Government Vice President and Director of Consumer Operations, resigned his submit on Could 20, 2021. The 2 Mr. Gable and Mr. Arndt left the Firm after a quick interval of transition.

Merchandise 8.01Other Occasions

Contemporary Begin Accounting

As a part of our exit from chapter on April 30, 2021 (the “Efficient Date”) and in accordance with Accounting Requirements Certification (ASC) Subject 852, Frontier Communications Guardian, Inc. (“Frontier” or the “Firm”) has adopted contemporary begin accounting. Contemporary begin accounting entails a complete valuation course of by which the honest worth of all property and liabilities is decided on the efficient date. Beneath contemporary begin accounting, firms are allowed to undertake new accounting insurance policies that extra appropriately mirror enterprise circumstances and business requirements, so long as the brand new insurance policies chosen are acceptable beneath usually accepted accounting rules. (GAAP). Because of the software of contemporary begin accounting, the consolidated monetary statements of the Firm after April 30, 2021 (Successor) won’t be similar to the consolidated monetary statements of the Firm previous to that date (Successor).

To assist readers of our monetary statements perceive a very powerful impacts of contemporary begin accounting, we describe the primary modifications beneath, together with our estimate of the affect on our revenues, adjusted EBITDA, and present bills. capital. Whereas there are different variations from modifications in our accounting insurance policies as a result of accounting for contemporary begin, these detailed beneath are essentially the most important to our monetary statements.

New Begin Changes:

a)Common service fund Charges (USF): Traditionally, we’ve reported USF charges collected from prospects as income and USF charges remitted to authorities as bills. At emergence, we made an accounting coverage option to deal with quantities on the premise of internet revenue. Since modifications in regulatory tariffs associated to USF are past our management and should fluctuate from interval to interval, we consider that the web presentation is extra helpful. This coverage change has no affect on adjusted EBITDA.

b) Provision for dangerous money owed: Traditionally, we’ve acknowledged the supply for dangerous money owed as a discount of gross sales. At emergence, we made an accounting coverage option to classify the allowance for dangerous debt as an expense, in keeping with our business friends. This coverage change has no affect on adjusted EBITDA.

c) Authorities grants: Sure authorities grants that have been traditionally offered on a internet foundation as a part of capital expenditures at the moment are offered on a gross foundation and included in revenue within the revenue assertion.

d) Capital administration prices: Traditionally, we’ve capitalized sure administration prices which are not directly related to capital actions. In emergence, we are going to now not capitalize these prices, which is able to result in elevated working bills.

e) Deferred set up prices: Whereas there is no such thing as a change in Frontier’s accounting coverage to defer and amortize set up prices imposed on its prospects, there can be a lower in acknowledged income because the The steadiness of the deferred and unrecognized set up revenue account has been eradicated as a part of the adoption of contemporary begin accounting.

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The next desk reveals the annualized affect on revenues, adjusted EBITDA and capital expenditures ensuing from the popularity of the contemporary begin. Now we have additionally included the affect on our Adjusted EBITDA forecast for 2021.

                                                                         2021 Adjusted
                                       2020 Annualized Affect                  EBITDA
                                                                         (5/1/21 - 12/31/21)
                                              Adjusted      Capital
($ in thousands and thousands)                 Income      EBITDA(1)   Expenditures

USF Charges (a)                   $    (220)    $        -  $           -   $                 -
Unhealthy Debt Provision (b)                 51             -              -                     -
Authorities Grants (c)                  30            30             30                    20
Capital Administrative                  -          (58)           (58)                  (40)
Bills (d)
Deferred Set up Charges           (47)          (47)              -                  (30)
Whole Affect                   $    (186)$     (75)$        (28)   $              (50)

(1) Adjusted EBITDA is a non-GAAP efficiency measure. See “Non-GAAP Measures” beneath for an outline of this measure and its calculation.

Depreciation and amortization

Tangible and intangible mounted property have been reassessed once they emerged. Consequently, the Successor firm expects a depreciation of about $ 200 million and a depreciation of about $ 80 million quarterly for the remainder of the 12 months.

Non-GAAP monetary measures

Frontier makes use of sure non-GAAP monetary measures to evaluate its efficiency, together with EBITDA and Adjusted EBITDA, that are described beneath. Administration makes use of these non-GAAP monetary measures internally to (i) assist analyze the underlying monetary efficiency of Frontier from interval to interval, (ii) analyze and consider strategic and operational choices, (iii ) set up standards for compensation choices, and (iv) help in understanding Frontier’s capability to generate money stream and, due to this fact, to plan future funding and operational choices. Administration believes that the presentation of those non-GAAP monetary measures gives helpful info to buyers concerning the monetary situation and outcomes of operations of Frontier as a result of these measures, when used together with GAAP monetary measures (i) present a extra complete view of Frontier’s core enterprise and talent to generate money stream, (ii) present buyers with the monetary evaluation framework on which administration bases monetary, operational, compensation and compensation choices. planning and (iii) current actions that buyers and ranking businesses have indicated to administration are helpful to them in evaluating Frontier and its working outcomes.

EBITDA is outlined as internet revenue (internet loss) much less tax expense (revenue), curiosity expense, investments and different revenue (loss), pension settlement prices, reorganization gadgets, good points / losses on debt extinction and depreciation and amortization.

Adjusted EBITDA is outlined as EBITDA, as described above, adjusted to exclude sure pension / OPEB fees, restructuring and different fees, stock-based compensation fees, impairment fees goodwill and sure different non-recurring gadgets.

Administration makes use of EBITDA and Adjusted EBITDA to assist it examine efficiency from interval to interval and as measures of operational efficiency. Administration believes that these non-GAAP measures present helpful info for buyers to evaluate Frontier’s operational efficiency from interval to interval, as they exclude amortization fees associated to investments made in prior intervals and are decided with out making an allowance for the capital construction or funding actions. Excluding capital expenditures, debt repayments, amongst different components, these non-GAAP monetary measures have sure shortcomings. Administration compensates for these deficiencies through the use of these non-GAAP monetary measures together with comparable GAAP monetary measures.

Parts of reorganization

As a part of our exit from chapter and adoption of contemporary begin accounting, we anticipate to report internet good points associated to reorganization gadgets of roughly
$ 4.15 billion, which embrace, amongst others, the next operations:

• all beforehand excellent widespread shares have been canceled, extinguished and paid up;

• all obligations related to the Senior Unsecured Notes have been absolutely discharged; and

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• the problem of 244,401,000 strange shares, par worth $ 0.01 per share.

Ahead-looking statements

This Type 8-Ok accommodates statements about future occasions and expectations that represent forward-looking statements, together with statements concerning the firm’s expectations for future monetary efficiency. Ahead-looking statements are based mostly on the Firm’s beliefs, assumptions and expectations relating to business traits, future monetary and operational efficiency and progress plans, making an allowance for info at the moment accessible to the Firm. These statements usually are not statements of historic reality. Ahead-looking statements contain dangers and uncertainties which will trigger our precise outcomes to vary materially from expectations of future outcomes that we categorical or indicate in forward-looking statements, and you shouldn’t place undue reliance on such statements. Components that might contribute to those variations embrace, however usually are not restricted to, the components described within the “Danger Components” part within the Firm’s annual report on Type 10-Ok for the 12 months ended. December 31, 2020, as a result of these threat components could be up to date. Phrases comparable to “anticipates”, “believes”, “continues”, “,,” quick time period, “long run”, “projections,” assumptions “,” tasks “,” instructions “,” forecasts “,” outlook ” “,” goal “,” traits “,” ought to “,” may “,” would “,” will “and related expressions are supposed to establish such forward-looking assertion. We qualify any forward-looking assertion solely by these cautionary components.

We assume no obligation to replace or revise any forward-looking statements for any purpose, or to replace the the explanation why precise outcomes may differ materially from these anticipated in such forward-looking statements, even when new info turns into accessible sooner or later. Comparisons of the outcomes of the present interval and any earlier interval usually are not supposed to specific future traits or indications of future efficiency, until they’re expressed as such, and needs to be thought of solely as indications. historic knowledge.

Merchandise 9.01 Monetary statements and supporting paperwork

(d) Exhibitions

Quantity   Description
104      Cowl Web page Interactive Information File (embedded inside the Inline XBRL


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