Frontier Communications Parent, Inc.

Hello all and welcome to the Frontier Communications fourth quarter 2022 earnings call. My name is Harry and I'll be your operator today. To ask a question during Q&A, please press star 1 on your telephone keypad. And I would now like to hand over to Spencer Kern to begin. Spencer, please go ahead when you're ready.

Good morning and welcome to Frontier Communications fourth quarter 2022 earnings call. This is Spencer Kern, Frontier's Head of Investor Relations. Joining me on the call today are John Stratton, our Chairman, Nick Jeffrey, our President and CEO and Scott Beasley, our CFO. Today's presentation can be followed within the webcast available at the events and presentation section of our investor relations website. Before we start, please turn to slide two. Here you will see our safe harbor disclaimer. This is a reminder that this conference call may include forward-looking statements that involve risks and uncertainties that may cause actual results to differ materially from those expressed today. During the call, we may also refer to certain non-GAAP financial measures which are defined and reconciled in our earnings presentation, press release, and trending schedule. And with that, I'll turn the call over to John.

Thanks Spencer, and good morning everyone. As you saw in our press release, the team delivered another strong quarter of operational results. Frontier's transformation into a growing digital infrastructure company is fast becoming our reality. If you turn to slide four, you'll see an updated company overview through the fourth quarter. Let me run you through a few highlights. We ended 2022 with 5.2 million fiber passings, crossing the halfway mark to our target of 10 million passings. We've also continued to expand our customer reach. We now serve 2.8 million broadband customers. In 2022, we generated $5.8 billion of revenue and $2.1 billion of adjusted EBITDA. This represents a 36% adjusted EBITDA margin. Our acute focus on our fiber investments and the team's consistent execution have delivered strong results. In 2022, fiber products alone generated $2.8 billion in revenue and $1.2 billion of EBITDA. That's a 42% EBITDA margin. As of the fourth quarter, fiber represents the majority of our customers, revenue, and EBITDA. And importantly, our fiber growth engine is beginning to drive growth for the overall company. The end of the year is always a good time to step back and review what we've accomplished. It was nearly two years ago when Nick joined the company as CEO and we announced our new Fiber First strategy. 2022 was our first full year of transformation with a new leadership team in place. You'll see a familiar chart when you turn to slide five. This is our simple strategy, which is anchored by four key levers of value creation. Build fiber, sell fiber, improve the customer experience and our operational efficiency. In 2022, we met and exceeded our goals in each of these areas, delivering more high-speed fiber broadband to more people across the country, faster than expected and within our budget. And it's all powered by our purpose, building Gigabit America, a purpose around which our entire workforce has now rallied. Our primary focus is our fiber build. Many of you will remember our investor day in 2021, when we committed to building fiber to cover 10 million locations, and we remain on track to do just that. In fact, with 5.2 million fiber locations today, we're more than halfway to our goal. This is a terrific use of capital. We continue to expect our fiber build to deliver very attractive IRRs in the mid to high teens, with a direct cost to pass of $900 to $1,000 per location. Our committed build stands to create substantial shareholder value and remains our most critical point of focus. And beyond that, we're exploring a significant opportunity to create even more value. As we highlighted in Q2 of 2022, beyond our initial 10 million committed build, we've identified another 1 to 2 million copper locations which we can organically upgrade to fiber with very attractive returns. There remains another 3 to 4 million locations that also could be attractive to upgrade with the aid of government subsidies. And while building fiber in our own footprint comes with meaningful cost and marketing advantages, we won't necessarily be confined to the strict limits of our current geography. Our fiber build capability is the envy of our industry. We've developed one of the best teams for building fiber anywhere in the world, and our purpose is clear, where it can be economically built, and profitably penetrated, we want to bring fiber broadband to as many Americans as possible. And with fiber penetration in America significantly lower than that of other developed nations, we see a meaningful opportunity to expand our ambition. Let's turn to slide seven, where you'll see our critical to-dos down the left column. And these are the goals we set for ourselves to deliver on our strategy. And to the right, you see all that we've accomplished. And let me run through them. We built a world-class management team and board. We expanded our fiber footprint by 60%. We increased our fiber broadband customers by 25%. We surpassed our initial cost savings goal and streamlined our operations. And we've improved our brand and reputation. You can see this in our record high fiber MPS scores and our improvement in churn. We did everything we said we would do and faster than expected. Over the last two years, we've built a strong foundation. And while this work is never done, we can confidently say that we've reached the end of the beginning. Our business is now ready to enter its next phase, our growth phase. And with that, I'll turn the call over to Nick to further describe this next stage in our evolution and to review our performance in the fourth quarter. Nick?