-- 16,300 net high-speed internet additions
-- Data and internet services revenue up 10% year over year
-- Continued strong operating income and cash flow margins
-- First half operating cash flow margin of 54%
-- First half dividend payout ratio of 60%
-- 2008 free cash flow estimate unchanged
STAMFORD, Conn.--(BUSINESS WIRE)--Aug. 5, 2008--Frontier
Communications (NYSE:FTR) (formerly Citizens Communications, NYSE:CZN)
today reported second quarter 2008 revenue of $562.6 million,
operating income of $162.0 million, and net income of $55.8 million.
"Frontier Communications had another quarter of solid financial
and operating results," said Maggie Wilderotter, Chairman and CEO.
"Despite a challenging economic environment, our employees did a
terrific job of relentlessly focusing on our customers to deliver a
strong second quarter performance. Our effective expense management
enabled us to achieve an operating cash flow margin of 54.5% for the
quarter and a dividend payout ratio of only 60% through the first six
months. Finally, we continued to provide returns to our shareholders
through dividends and stock repurchases in the first half of the year
by applying over 100% of our free cash flow to these activities."
Revenue for the second quarter of 2008 was $562.6 million, as
compared to $578.8 million in the second quarter of 2007, a 3 percent
decrease. Revenue declined as a result of lower local services
revenue, subsidy revenue and switched access revenue, partially offset
by a 10 percent increase in data and internet services revenue.
Despite the decline in access lines, our customer revenue, which is
all revenue except switched access and subsidy, has remained
relatively flat overall. The monthly customer revenue per access line
has increased approximately $3.50 over the prior year's second quarter
while the monthly total revenue per access line has increased $2.78
over the same period. These statistics reflect the Company's success
in selling additional products and services to our customer base.
Other operating expenses and network access expenses for the
second quarter of 2008 were $256.3 million, as compared to $267.1
million in the second quarter of 2007. The decrease of $10.8 million
in 2008 as compared to the second quarter of 2007 is primarily the
result of reduced expenses attributable to the integration of the back
office, customer service and administrative support functions of the
Commonwealth and Global Valley operations acquired in 2007.
Operating income for the second quarter of 2008 was $162.0 million
and operating income margin was 28.8 percent, as compared to operating
income of $171.3 million and operating income margin of 29.6 percent
in the second quarter of 2007. The second quarter 2008 decrease of
$9.3 million is primarily the result of the reduction in revenue.
The increase in investment and other income (loss), net reflects
the premium paid in the second quarter of 2007 of $16.3 million to
redeem the Company's 7.625% Senior Notes due 2008.
Income tax expense for the second quarter of 2008 was favorably
impacted by the reversal of $7.5 million in income tax reserves.
The Company lost approximately 45,400 access lines, of which 6,100
were second lines, during the second quarter of 2008 and had more than
2,341,700 access lines at June 30, 2008.
The Company added approximately 16,300 net high-speed internet
customers during the second quarter of 2008 and had more than 559,300
high-speed internet customers at June 30, 2008. The Company added
approximately 6,200 video customers during the second quarter of 2008
and had more than 107,500 video customers at June 30, 2008.
Capital expenditures were $75.7 million for the second quarter of
2008 and $123.7 million for the first six months of 2008.
Free cash flow was $96.6 million for the second quarter of 2008
and $269.4 million for the first six months of 2008. The second
quarter of 2008 includes increased seasonal payments for income taxes
and capital expenditures. The Company's dividend represents a payout
of 60 percent of free cash flow for the first six months of 2008.
During the second quarter of 2008, the Company repurchased
8,067,000 shares of its common stock for $87.8 million. Through the
first half of 2008, the Company repurchased 10,383,000 shares of its
common stock for $112.7 million, representing 56 percent of the $200
million share repurchase program.
The Company's free cash flow estimate for 2008 remains unchanged
at approximately $470.0 million to $495.0 million after calculating
the impact that the "Economic Stimulus Act of 2008" will have on its
cash paid for income taxes.
The Company uses certain non-GAAP financial measures in evaluating
its performance. These include free cash flow and operating cash flow.
A reconciliation of the differences between free cash flow and
operating cash flow and the most comparable financial measures
calculated and presented in accordance with GAAP is included in the
tables that follow. The non-GAAP financial measures are by definition
not measures of financial performance under GAAP and are not
alternatives to operating income or net income reflected in the
statement of operations or to cash flow as reflected in the statement
of cash flows and are not necessarily indicative of cash available to
fund all cash flow needs. The non-GAAP financial measures used by the
Company may not be comparable to similarly titled measures of other
companies.
The Company believes that the presentation of non-GAAP financial
measures provides useful information to investors regarding the
Company's financial condition and results of operations because these
measures, when used in conjunction with related GAAP financial
measures, (i) together provide a more comprehensive view of the
Company's core operations and ability to generate cash flow, (ii)
provide investors with the financial analytical framework upon which
management bases financial, operational, compensation and planning
decisions and (iii) presents measurements that investors and rating
agencies have indicated to management are useful to them in assessing
the Company and its results of operations. Management uses these
non-GAAP financial measures to plan and measure the performance of its
core operations, and its divisions measure performance and report to
management based upon these measures. In addition, the Company
believes that free cash flow and operating cash flow, as the Company
defines them, can assist in comparing performance from period to
period, without taking into account factors affecting cash flow
reflected in the statement of cash flows, including changes in working
capital and the timing of purchases and payments. The Company has
shown adjustments to its financial presentations to exclude $38.7
million in access revenue for the favorable impact of the one-time
carrier dispute settlement in the first half of 2007, $3.4 million and
$1.8 million of severance and early retirement costs in the first half
of 2008 and 2007, respectively, and $0.5 million and $1.6 million of
severance and early retirement costs in the second quarter of 2008 and
2007, respectively, because the Company believes that the magnitude of
such revenues in the first half of 2007 is unusual, and such costs in
the first half of 2008 materially exceeds the comparable costs in the
first half of 2007.
Management uses these non-GAAP financial measures to (i) assist in
analyzing the Company's underlying financial performance from period
to period, (ii) evaluate the financial performance of its business
units, (iii) analyze and evaluate strategic and operational decisions,
(iv) establish criteria for compensation decisions, and (v) assist
management in understanding the Company's ability to generate cash
flow and, as a result, to plan for future capital and operational
decisions. Management uses these non-GAAP financial measures in
conjunction with related GAAP financial measures. The Company believes
that the non-GAAP financial measures are meaningful and useful for the
reasons outlined above.
While the Company utilizes these non-GAAP financial measures in
managing and analyzing its business and financial condition and
believes they are useful to management and to investors for the
reasons described above, these non-GAAP financial measures have
certain shortcomings. In particular, free cash flow does not represent
the residual cash flow available for discretionary expenditures, since
items such as debt repayments and dividends are not deducted in
determining such measure. Operating cash flow has similar shortcomings
as interest, income taxes, capital expenditures, debt repayments and
dividends are not deducted in determining this measure. Management
compensates for the shortcomings of these measures by utilizing them
in conjunction with their comparable GAAP financial measures. The
information in this press release should be read in conjunction with
the financial statements and footnotes contained in our documents
filed with the U.S. Securities and Exchange Commission.
About Frontier Communications
Frontier Communications Corporation (NYSE:FTR) offers telephone,
television and internet services in 24 states with approximately 5,700
employees. More information is available at www.frontieronline.com.
This press release contains forward-looking statements that are
made pursuant to the safe harbor provisions of The Private Securities
Litigation Reform Act of 1995. These statements are made on the basis
of management's views and assumptions regarding future events and
business performance. Words such as "believe," "anticipate," "expect"
and similar expressions are intended to identify forward-looking
statements. Forward-looking statements (including oral
representations) involve risks and uncertainties that may cause actual
results to differ materially from any future results, performance or
achievements expressed or implied by such statements. These risks and
uncertainties are based on a number of factors, including but not
limited to: reductions in the number of our access lines and
high-speed internet subscribers; the effects of competition from
cable, wireless and other wireline carriers (through voice over
internet protocol (VOIP) or otherwise); the effects of greater than
anticipated competition requiring new pricing, marketing strategies or
new product offerings and the risk that we will not respond on a
timely or profitable basis; the effects of general and local economic,
business, industry and employment conditions on our revenues; our
ability to effectively manage service quality; our ability to
successfully introduce new product offerings, including our ability to
offer bundled service packages on terms that are both profitable to us
and attractive to our customers; our ability to sell enhanced and data
services in order to offset ongoing declines in revenue from local
services, switched access services and subsidies; changes in
accounting policies or practices adopted voluntarily or as required by
generally accepted accounting principles or regulators; the effects of
ongoing changes in the regulation of the communications industry as a
result of federal and state legislation and regulation, including
potential changes in state rate of return limitations on our earnings,
access charges and subsidy payments, and regulatory network upgrade
and reliability requirements; our ability to effectively manage our
operations, operating expenses and capital expenditures, to pay
dividends and to reduce or refinance our debt; adverse changes in the
credit markets and/or in the ratings given to our debt securities by
nationally accredited ratings organizations, which could limit or
restrict the availability and/or increase the cost of financing; the
effects of bankruptcies in the telecommunications industry, which
could result in potential bad debts; the effects of technological
changes and competition on our capital expenditures and product and
service offerings, including the lack of assurance that our ongoing
network improvements will be sufficient to meet or exceed the
capabilities and quality of competing networks; the effects of
increased medical, retiree and pension expenses and related funding
requirements; changes in income tax rates, tax laws, regulations or
rulings, and/or federal or state tax assessments; the effects of state
regulatory cash management policies on our ability to transfer cash
among our subsidiaries and to the parent company; our ability to
successfully renegotiate union contracts expiring in 2008 and
thereafter; our ability to pay a $1.00 per common share dividend
annually, which may be affected by our cash flow from operations,
amount of capital expenditures, debt service requirements, cash paid
for income taxes (which will increase in the future) and our
liquidity; the effects of significantly increased cash taxes in 2008
and future years; and the effects of any unfavorable outcome with
respect to any of our current or future legal, governmental or
regulatory proceedings, audits or disputes. These and other
uncertainties related to our business are described in greater detail
in our filings with the Securities and Exchange Commission, including
our reports on Forms 10-K and 10-Q, and the foregoing information
should be read in conjunction with these filings. We do not intend to
update or revise these forward-looking statements to reflect the
occurrence of future events or circumstances.
Frontier Communications Corporation
Consolidated Financial Data (1)
For the quarter ended
June 30,
----------------------
(Amounts in thousands, except per share %
amounts) 2008 2007 Change
----------------------------
Income Statement Data
Revenue $ 562,550 $578,826 -3%
------------ ---------
Network access expenses 53,998 53,678 1%
Other operating expenses 202,333 213,388 -5%
Depreciation and amortization 144,250 140,462 3%
------------ ---------
Total operating expenses 400,581 407,528 -2%
------------ ---------
Operating income 161,969 171,298 -5%
Investment and other income (loss),
net (3) 6,393 (6,517) 198%
Interest expense 90,710 98,649 -8%
------------ ---------
Income before income taxes 77,652 66,132 17%
Income tax expense 21,874 25,573 -14%
------------ ---------
Net income attributable to common
shareholders $ 55,778 $ 40,559 38%
============ =========
Weighted average shares outstanding 320,838 340,469 -6%
Basic net income per share attributable
to common shareholders (4) $ 0.17 $ 0.12 42%
Other Financial Data
Capital expenditures $ 75,737 $ 66,658 14%
Operating cash flow (5) 306,699 313,354 -2%
Free cash flow (5) 96,615 116,295 -17%
Dividends paid 80,221 85,379 -6%
Dividend payout ratio (6) 83% 73% 14%
For the six months
ended
June 30,
-----------------------
(Amounts in thousands, except per %
share amounts) 2008 2007 Change
--------------------------------
Income Statement Data
Revenue $1,131,755 $1,134,973 (2) 0%
----------- -----------
Network access expenses 114,547 105,075 9%
Other operating expenses 405,597 402,655 1%
Depreciation and amortization 285,330 262,643 9%
----------- -----------
Total operating expenses 805,474 770,373 5%
----------- -----------
Operating income 326,281 364,600 -11%
Investment and other income (loss),
net (3) 5,158 3,500 47%
Interest expense 181,570 192,613 -6%
----------- -----------
Income before income taxes 149,869 175,487 -15%
Income tax expense 48,502 67,261 -28%
----------- -----------
Net income attributable to common
shareholders $ 101,367 $ 108,226 -6%
=========== ===========
Weighted average shares outstanding 323,340 332,331 -3%
Basic net income per share
attributable to common shareholders
(4) $ 0.31 $ 0.33 (2) -6%
Other Financial Data
Capital expenditures $ 123,723 $ 111,769 11%
Operating cash flow (5) 614,982 590,319 4%
Free cash flow (5) 269,425 303,850 -11%
Dividends paid 162,324 170,841 -5%
Dividend payout ratio (6) 60% 56% 7%
(1) On March 8, 2007, we acquired Commonwealth Telephone Enterprises,
Inc. (CTE) for approximately $1.1 billion, and on October 31, 2007,
we acquired Global Valley Networks, Inc. and GVN Services (together
GVN) for $62.0 million, and have included the historical results of
CTE and GVN from the dates of acquisition.
(2) Includes the $38.7 million favorable impact of a carrier dispute
settlement, representing $.07 per share.
(3) Includes premium on debt repurchases of $17.1 million for the
quarter ended June 30, 2007, and $6.3 million and $18.2 million for
the six months ended June 30, 2008 and 2007, respectively, and $4.0
million for bridge loan fee for the six months ended June 30, 2007.
(4) Calculated based on weighted average shares outstanding.
(5) A reconciliation to the most comparable GAAP measure is presented
at the end of these tables.
(6) Represents dividends paid divided by free cash flow.
Frontier Communications Corporation
Consolidated Financial and Operating Data (1)
For the quarter ended
June 30,
---------------------
(Amounts in thousands, except %
operating data) 2008 2007 Change
-------------------------------
Select Income Statement Data
Revenue
Local services $ 214,703 $ 226,363(2) -5%
Data and internet services 151,655 138,243(2) 10%
Access services 101,003 113,429 -11%
Long distance services 46,912 47,053 0%
Directory services 29,070 28,664 1%
Other 19,207 25,074 -23%
---------- ----------
Total revenue 562,550 578,826 -3%
---------- ----------
Expenses
Network access expenses 53,998 53,678(2) 1%
Other operating expenses (4) 202,333 213,388(2) -5%
Depreciation and amortization 144,250 140,462 3%
---------- ----------
Total operating expenses 400,581 407,528 -2%
---------- ----------
Operating Income $ 161,969 $ 171,298 -5%
========== ==========
Other Financial and Operating Data
Revenue:
Residential $ 239,633 $ 248,550 -4%
Business 221,914 216,847 2%
---------- ----------
Total customer revenue 461,547 465,397 -1%
Regulatory (Access services) 101,003 113,429 -11%
---------- ----------
Total revenue $ 562,550 $ 578,826 -3%
---------- ----------
Access lines:
Residential 1,516,402 1,654,854 -8%
Business 825,345 848,864 -3%
---------- ----------
Total access lines 2,341,747 2,503,718 -6%
---------- ----------
Other data:
Employees 5,734 6,224 -8%
High-speed internet (HSI)
subscribers 559,345 479,317 17%
Video subscribers 107,596 81,092 33%
Switched access minutes of use (in
millions) 2,538 2,748 -8%
Average monthly total revenue per
access line $ 79.31 $ 76.53 4%
Average monthly customer revenue
per access line $ 65.07 $ 61.53 6%
For the six months
ended
June 30,
---------------------
(Amounts in thousands, except %
operating data) 2008 2007 Change
--------------------------------
Select Income Statement Data
Revenue
Local services $ 431,861 $ 430,807(2) 0%
Data and internet services 297,637 256,267(2) 16%
Access services 208,821 252,453(3) -17%
Long distance services 93,365 87,481 7%
Directory services 57,698 57,334 1%
Other 42,373 50,631 -16%
---------- ----------
Total revenue 1,131,755 1,134,973 0%
---------- ----------
Expenses
Network access expenses 114,547 105,075(2) 9%
Other operating expenses (4) 405,597 402,655(2) 1%
Depreciation and amortization 285,330 262,643 9%
---------- ----------
Total operating expenses 805,474 770,373 5%
---------- ----------
Operating Income $ 326,281 $ 364,600 -11%
========== ==========
Other Financial and Operating Data
Revenue:
Residential $ 480,995 $ 470,328 2%
Business 441,939 412,192 7%
---------- ----------
Total customer revenue 922,934 882,520 5%
Regulatory (Access services) 208,821 252,453 -17%
---------- ----------
Total revenue $1,131,755 $1,134,973 0%
---------- ----------
Access lines:
Residential 1,516,402 1,654,854 -8%
Business 825,345 848,864 -3%
---------- ----------
Total access lines 2,341,747 2,503,718 -6%
---------- ----------
Other data:
Employees 5,734 6,224 -8%
High-speed internet (HSI)
subscribers 559,345 479,317 17%
Video subscribers 107,596 81,092 33%
Switched access minutes of use (in
millions) 5,141 5,276 -3%
Average monthly total revenue per
access line $ 79.04 $ 78.75(5) 0%
Average monthly customer revenue
per access line $ 64.46 $ 64.04(6) 1%
(1) On March 8, 2007, we acquired Commonwealth Telephone Enterprises,
Inc. (CTE) for approximately $1.1 billion, and on October 31, 2007,
we acquired Global Valley Networks, Inc. and GVN Services (together
GVN) for $62.0 million, and have included the historical results of
CTE and GVN from the dates of acquisition.
(2) Reflects a reclassification of $6.3 million and $7.9 million of
revenue related to our CTE acquisition from local services to data
and internet services for the quarter and six months ended June 30,
2007, respectively. Also, expenses reflect a reclassification of $1.8
million and $2.4 million of expenses related to our CTE acquisition
from other operating expenses to network access expenses for the
quarter and six months ended June 30, 2007, respectively.
(3) Includes the $38.7 million favorable impact of a carrier dispute
settlement.
(4) Includes severance and early retirement costs of $0.5 million and
$1.6 million for the quarter ended June 30, 2008 and 2007,
respectively, and $3.4 million and $1.8 million for the six months
ended June 30, 2008 and 2007, respectively.
(5) For the six months ended June 30, 2007, the calculation excludes
CTE and GVN data and excludes the $38.7 million favorable one-time
impact from the first quarter 2007 settlement of a switched access
dispute. The amount is $81.82 with the $38.7 million favorable one-
time impact from the settlement.
(6) For the six months ended June 30, 2007, the calculation excludes
CTE and GVN data.
Frontier Communications Corporation
Condensed Consolidated Balance Sheet Data (1)
(Amounts in thousands)
June 30, December
2008 31, 2007
---------- ----------
ASSETS
-------------------------------------------------
Current assets:
Cash and cash equivalents $ 178,874 $ 226,466
Accounts receivable and other current assets 269,853 297,688
---------- ----------
Total current assets 448,727 524,154
Property, plant and equipment, net 3,265,260 3,335,244
Other long-term assets 3,299,242 3,396,671
---------- ----------
Total assets $7,013,229 $7,256,069
========== ==========
LIABILITIES AND SHAREHOLDERS' EQUITY
-------------------------------------------------
Current liabilities:
Long-term debt due within one year $ 3,828 $ 2,448
Accounts payable and other current liabilities 368,704 443,443
---------- ----------
Total current liabilities 372,532 445,891
Deferred income taxes and other liabilities 1,063,836 1,075,382
Long-term debt 4,746,612 4,736,897
Shareholders' equity 830,249 997,899
---------- ----------
Total liabilities and shareholders' equity $7,013,229 $7,256,069
========== ==========
(1) On March 8, 2007, we acquired Commonwealth Telephone Enterprises,
Inc. (CTE) for approximately $1.1 billion, and on October 31, 2007,
we acquired Global Valley Networks, Inc. and GVN Services (together
GVN) for $62.0 million, and have included the historical results of
CTE and GVN from the dates of acquisition.
Frontier Communications Corporation
Consolidated Cash Flow Data (1)
(Amounts in thousands)
For the six months
ended June 30,
----------------------
2008 2007
---------- -----------
Cash flows provided by (used in) operating
activities:
Net income $ 101,367 $ 108,226
Adjustments to reconcile income to net cash
provided by operating activities:
Depreciation and amortization expense 285,330 262,643
Stock based compensation expense 6,164 5,445
Loss on extinguishment of debt 6,290 20,186
Other non-cash adjustments (7,303) 4,760
Deferred income taxes (including FIN 48) (8,996) 28,576
Change in accounts receivable 8,039 4,232
Change in accounts payable and other
liabilities (58,597) (71,248)
Change in other current assets 6,561 6,736
---------- -----------
Net cash provided by operating activities 338,855 369,556
Cash flows provided from (used by) investing
activities:
Capital expenditures (123,723) (111,769)
Cash paid for Commonwealth acquisition (net of
cash acquired) - (657,610)
Other assets (purchased) distributions
received, net (1,277) 3,851
---------- -----------
Net cash used by investing activities (125,000) (765,528)
Cash flows provided from (used by) financing
activities:
Long-term debt borrowings 135,000 950,000
Long-term debt payments (130,281) (914,516)
Settlement of interest rate swaps 15,521 -
Financing costs paid (857) (15,753)
Premium paid to retire debt (6,290) (16,160)
Issuance of common stock 955 11,472
Dividends paid (162,324) (170,841)
Common stock repurchased (112,659) (70,730)
Repayment of customer advances for
construction (512) (506)
---------- -----------
Net cash used by financing activities (261,447) (227,034)
Decrease in cash and cash equivalents (47,592) (623,006)
Cash and cash equivalents at January 1, 226,466 1,041,106
---------- -----------
Cash and cash equivalents at June 30, $ 178,874 $ 418,100
========== ===========
Cash paid during the period for:
Interest $ 184,552 $ 176,558
Income taxes $ 49,585 $ 47,426
(1) On March 8, 2007, we acquired Commonwealth Telephone Enterprises,
Inc. (CTE) for approximately $1.1 billion, and on October 31, 2007,
we acquired Global Valley Networks, Inc. and GVN Services (together
GVN) for $62.0 million, and have included the historical results of
CTE and GVN from the dates of acquisition.
Schedule A
Reconciliation of Non-GAAP Financial Measures (1)
For the quarter For the six months
ended June 30, ended June 30,
------------------- -------------------
(Amounts in thousands) 2008 2007 2008 2007
--------- --------- --------- ---------
Net Income to Free Cash
Flow;
Net Cash Provided by
Operating Activities
----------------------------
Net income $ 55,778 $ 40,559 $101,367 $108,226
Add back:
Depreciation and
amortization 144,250 140,462 285,330 262,643
Income tax expense 21,874 25,573 48,502 67,261
Stock based compensation 3,145 2,038 6,164 5,445
Subtract:
Cash paid for income
taxes 47,726 40,640 49,585 47,426
Other income (loss), net
(2) 4,969 (14,961) (1,370) (19,470)
Capital expenditures 75,737 66,658 123,723 111,769
--------- --------- --------- ---------
Free cash flow 96,615 116,295 269,425 303,850 (3)
Add back:
Deferred income taxes (8,714) 4,962 (8,996) 28,576
Non-cash (gains)/losses,
net (2,745) 19,976 5,151 30,391
Other income (loss), net
(2) 4,969 (14,961) (1,370) (19,470)
Cash paid for income
taxes 47,726 40,640 49,585 47,426
Capital expenditures 75,737 66,658 123,723 111,769
Subtract:
Changes in current
assets and liabilities (8,775) 11,690 43,997 60,280
Income tax expense 21,874 25,573 48,502 67,261
Stock based compensation 3,145 2,038 6,164 5,445
--------- --------- --------- ---------
Net cash provided by
operating activities $197,344 $194,269 $338,855 $369,556
========= ========= ========= =========
(1) On March 8, 2007, we acquired Commonwealth Telephone
Enterprises, Inc. (CTE) for approximately $1.1 billion, and on
October 31, 2007, we acquired Global Valley Networks, Inc. and GVN
Services (together GVN) for $62.0 million, and have included the
historical results of CTE and GVN from the dates of acquisition.
(2) Includes premium on debt repurchases of $17.1 million for the
quarter ended June 30, 2007, and $6.3 million and $18.2 million
for the six months ended June 30, 2008 and 2007, respectively, and
$4.0 million for bridge loan fee for the six months ended June 30,
2007.
(3) Includes the $38.7 million favorable impact of a carrier
dispute settlement.
Schedule B
Reconciliation of Non-GAAP Financial Measures (1)
For the quarter ended June 30, 2008
----------------------------------------
(Amounts in thousands)
Severance
and Early
Operating Cash Flow and As Retirement As
Operating Cash Flow Margin Reported Costs Adjusted
---------------------------- ------------ ------------ ------------
Operating Income $ 161,969 $ (480) $ 162,449
Add back:
Depreciation and
amortization 144,250 - 144,250
------------ ------------ ------------
Operating cash flow $ 306,219 $ (480) $ 306,699
============ ============ ============
Revenue $ 562,550 $ 562,550
============ ============
Operating income margin
(Operating income divided by
revenue) 28.8% 28.9%
============ ============
Operating cash flow margin
(Operating cash flow divided
by revenue) 54.4% 54.5%
============ ============
For the six months ended
June 30, 2008
----------------------------------------
Severance
and Early
Operating Cash Flow and As Retirement As
Operating Cash Flow Margin Reported Costs Adjusted
---------------------------- ------------ ------------ ------------
Operating Income $ 326,281 $ (3,371) $ 329,652
Add back:
Depreciation and
amortization 285,330 - 285,330
------------ ------------ ------------
Operating cash flow $ 611,611 $ (3,371) $ 614,982
============ ============ ============
Revenue $1,131,755 $1,131,755
============ ============
Operating income margin
(Operating income divided by
revenue) 28.8% 29.1%
============ ============
Operating cash flow margin
(Operating cash flow divided
by revenue) 54.0% 54.3%
============ ============
For the quarter ended June 30,
2007
----------------------------------
(Amounts in thousands)
Severance
Operating Cash Flow and and Early
Operating Cash Flow As Retirement As
Margin Reported Costs Adjusted
----------------------- ----------- ---------- -----------
Operating Income $ 171,298 $(1,594) $172,892
Add back:
Depreciation and
amortization 140,462 - 140,462
----------- ---------- -----------
Operating cash flow $ 311,760 $(1,594) $313,354
=========== ========== ===========
Revenue $ 578,826 $578,826
=========== ===========
Operating income margin
(Operating income
divided by revenue) 29.6% 29.9%
=========== ===========
Operating cash flow
margin
(Operating cash flow
divided by revenue) 53.9% 54.1%
=========== ===========
For the six months ended
June 30, 2007
----------------------------------------------
Severance
Operating Cash Flow and Carrier and Early
Operating Cash Flow As Dispute Retirement As
Margin Reported Settlement Costs Adjusted
----------------------- ----------- ---------- ----------- -----------
Operating Income $ 364,600 $38,700 $ (1,776) $ 327,676
Add back:
Depreciation and
amortization 262,643 - - 262,643
----------- ---------- ----------- -----------
Operating cash flow $ 627,243 $38,700 $ (1,776) $ 590,319
=========== ========== =========== ===========
Revenue $1,134,973 $38,700 $1,096,273
=========== ========== ===========
Operating income margin
(Operating income
divided by revenue) 32.1% 29.9%
=========== ===========
Operating cash flow
margin
(Operating cash flow
divided by revenue) 55.3% 53.8%
=========== ===========
(1) On March 8, 2007, we acquired Commonwealth Telephone Enterprises,
Inc. (CTE) for approximately $1.1 billion, and on October 31, 2007,
we acquired Global Valley Networks, Inc. and GVN Services (together
GVN) for $62.0 million, and have included the historical results of
CTE and GVN from the dates of acquisition.
CONTACT: Frontier Communications
David Whitehouse, 203-614-5708
Senior Vice President & Treasurer
david.whitehouse@frontiercorp.com
SOURCE: Frontier Communications
