EX-99.2 3 brhc10023816_ex99-2.htm EXHIBIT 99.2
Exhibit 99.2

     Frontier (FYBR)Investor Presentation  April 30, 2021 
 
 Safe Harbor statement  This presentation contains "forward-looking statements," related to future events. Forward-looking statements address Frontier’s expected future business, financial performance, and financial condition, 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. Uncertainties that could cause our actual results to be materially different than those expressed in our forward-looking statements include, but are not limited to: our ability to realize the anticipated benefits of the financial restructuring of our existing debt, existing equity interests and certain other obligations pursuant to the Fifth Amended Joint Plan of Reorganization of Frontier Communications Corporation and Its Debtor Affiliates Pursuant to Chapter 11 of the Bankruptcy Code; our ability to comply with the restrictions imposed by covenants in our financing; 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; our ability to successfully implement strategic initiatives, including opportunities to enhance revenue and realize productivity improvements; 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, 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, employees or suppliers; our ability to secure, continue to use or renew intellectual property and other licenses used in our business; changes to our board of directors and management team upon emergence from bankruptcy or in anticipation of emergence, and our ability to hire or retain key personnel; our ability to dispose of certain assets or asset groups 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 meet our CAF II obligations and the risk of penalties or obligations to return certain CAF II 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 state regulatory requirements that could limit our ability to transfer cash among our subsidiaries or dividend funds up to the parent company; 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; government infrastructure projects (such as highway construction) that impact our capital expenditures; continued reductions in switched access revenues as a result of regulation, competition or technology substitutions; 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, including potential future impairment charges with respect to our intangible assets or additional losses on assets held for sale; the effects of increased medical expenses and pension and postemployment expenses; our ability to successfully renegotiate union contracts; changes in pension plan assumptions, interest rates, discount 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 2020 and beyond; adverse changes in economic, political and market conditions in the areas that we serve, the U.S. and globally, including but not limited to, changes resulting from epidemics, pandemics and outbreaks of contagious diseases, including the COVID-19 pandemic, 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 and working remotely, 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, and stress on our supply chain; the trading price and volatility of our common stock; and the risks and other factors contained in Frontier’s filings with the U.S. Securities and Exchange Commission, including our most recent report on Form 10-K. These risks and uncertainties may cause actual future results to be materially different than those expressed in such forward-looking statements. Frontier has no obligation to update or revise these forward-looking statements and does not undertake to do so.Non-GAAP Financial MeasuresCertain 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. Note Regarding Classifications of ResultsUnless otherwise indicated, the information presented herein, including operational, non-GAAP measures, and commentary pertain to the Remaining Properties only. “Remaining Properties,” as defined in Frontier’s 10-K for the year ended December 31, 2020, comprises the 25 states Frontier currently operates in and excludes Washington, Oregon, Idaho, and Montana due to the divestiture of operations and assets in these states effective May 1, 2020. “Consolidated” refers to the entire business, which may include financial data from Washington, Oregon, Idaho, and Montana for the periods through May 1, 2020. References to “Northwest Ops” refer to the metrics of the four Northwest states.  Forward looking language 
 
   John StrattonExecutive Chairman of the Board  3    Today’s presenters…    Nick JefferyChief ExecutiveOfficer    Sheldon BruhaChief FinancialOfficer 
 
     The path forward  John StrattonExecutive Chairman of the Board 
 
           5    Today we emerge from our financial restructuring  Restructuring process begins    Closed sale of Northwest Operations for net cash proceeds of $1.1B  Filed Chapter 11  Refinanced $5B of debt  Emerge from Chapter 11 NASDAQ listing, trading under FYBR expected to begin on May 4    July  April  May  2019  2020  2021  Oct - Nov  April              Received final regulatory approvals  Today 
 
 We have a strong foundation in place for the next stage    Low leverageStrong cash from operationsSignificant liquidity  Strong FinancialCondition    Data-first focusBuilding initial 3.4 million new fiber passingsIntegrated network, purpose built to serve:ResidentialBusiness (SMB & Enterprise)Wholesale  Fiber-basedStrategy    Simplifying product offeringStreamlining processesSystem improvementsDigital tools for servicing accounts  Improving Operations    New Board of DirectorsNew CEOCertain key senior leadership positions  Enhanced Talent 
 
 Opportunity has attracted new leadership talent  Veronica BloodworthChief Network Officer23 years of leadership experience at AT&T, most recently as SVP of Construction and EngineeringExtensive experience with the planning, design, construction and capital maintenance of a nationwide wireline networkOversaw the deployment of fiber to over 14 million customersCreated a single fiber plan across the consumer, mobility and business segments  Nick JefferyChief Executive OfficerFormer CEO of Vodafone UKLed turnaround of Vodafone’s home marketReturned company to revenue and double-digit EBITDA growth Grew market share and beat all competition for seven straight quartersHighest ever customer Net Promoter Score and employee engagement scoresLed digital and brand transformation30 years of telecom leadership experience  
 
   Our new board brings extensive experience across key disciplines  Marketing & Sales  Operations  Talent  Technology  Telcom Industry  Finance  Legal & Regulatory  Pamela CoeFormer Deputy General Counsel and Corporate Secretary of Liberty Media Corporation  Lisa ChangChief People OfficerCoca-Cola Company  Stephen PuseyFormer Global Chief Technology Officer of Vodafone Group PLC  Nick Jeffery, CEOFormer CEO of Vodafone UK   Pratabkumar “Prat” VemanaChief Digital OfficerKaiser Foundation Health Plans and Hospitals (Kaiser Permanente)   Maryann TurckeFormer Chief Operating Officer of National Football League  Kevin BeebeCo-FounderAstra Capital ManagementFormer Group President of Operations of ALLTEL Corp.  John Stratton,ChairmanFormer EVP, President of Verizon Global Operations 
 
     Frontier is positioned to become the largest pure play fiber provider in the US  Existing Fiber Infrastructure Asset  Fiber Expansion Opportunity  The Expansion Fiber Network  The Base Fiber Network  3.0 million consumer passings3.2 million total passings1  Brownfield opportunity to expand fiber0.2 million total passings1 built to date  Total passings includes both consumer and commercial locations 
 
 The current network as of 1Q 2021  Total Network Passings1  The Base Fiber Network3.2M passings, defined as locations built prior to 202097% GPON enabled (symmetrical gigabit capable)  The Expansion Fiber Network0.2M passings as of 1Q 2021, defined as locations built in 2020 and afterTarget ~600k cumulative locations built by year end 2021  Total passings includes both consumer and commercial locations, excludes copper voice-only locations 
 
 2020 Revenue and Adjusted EBITDA  Preliminary, granular cost allocation work in progress  Note: Both Revenue and Adjusted EBITDA are for the Remaining Properties, excluding the Northwest OperationsAdjusted EBITDA is a non-GAAP Financial measure. See Appendix for a reconciliation to the closest GAAP measure  1 
 
 The Base Fiber Network today, before expansion  Key Value Levers: Penetration GainsARPU AccretionCost Efficiency  ~50%Penetrationtarget      Note: Passings and customers include both consumer and commercial locations 
 
 The Base Fiber Network: valuation  Fiber  Copper  EV per Passing  % Penetration  41.5% Penetration Today: $11B implied EV  Note: : Metrics calculated using publicly available data for Altice USA, Cable One, Charter, Cincinnati Bell Fioptics, Comcast (excluding NBCUniversal and Sky), Consolidated, Otelco, and WOW. Passings and penetration data as of Q4 2020. Enterprise value data as of Mar-2021. Frontier Fiber at 41.5% broadband penetration implies ~$3,500 EV per passing. Frontier Copper at 12.5% broadband penetration implies ~$300 EV per passing.  
 
 Valuation framework: current and future potential  Base Fiber Network41.5% penetration3.2M passings at $3,500 EV per  +  =  $15BCurrent EV, implied  ExpansionConvert Copper to Fiber  Penetration50% target  $11BEVimplied  Expansion Fiber Network0.2M passings built through 1Q21Initial Expansion target: 3.4M passings  TBD  +  Copper Network12.5% penetration11.8M passings at $300 EV per  $4BEVimplied  $14BEVimplied  ARPU GainsCost Efficiency  Full size and scope of the expansion opportunity is currently under review  Future EV Potential  +  = 
 
 24-30% Program IRR  14-20% Program IRR      Fiber  Copper  Total Passings, M  Already Being Built0.2M completed through 1Q21  (3.0 consumer)  (6.1 consumer)  (12.1 consumer)  0.2M copper locations already converted to fiber through 1Q21    The Expansion Fiber Network: converting copper to fiber at attractive IRRs  Note: Passing are for broadband capable consumer and commercial locations, excluding copper voice only passings. IRRs are calculated based on a 10 year projection of operating cash flow (Adj. EBITDA – Capex) including a terminal value in the 11th year, assuming average terminal penetration of ~40%. IRR includes the negative cash flow impact from cannibalizing copper as it is converted into fiber. 
 
 Strategic review underway   New management team and Board reviewing strategic options for speed and scope of Expansion Network build Enhanced investor reporting package (guidance parameters, key performance indicators) under development Fresh Start Accounting and granular ‘activity-based’ cost allocation ongoing      Early August 2021Second Quarter Results Release & CallLater in AugustInvestor Day  Upcoming events 
 
     Current state and opportunities ahead  Nick JefferyChief Executive Officer 
 
                                                                                                                                     Frontier at a glance   LTM Revenue as of Q1 ‘21  LTM Adj. EBITDA as of Q1 ‘21  Q1 ‘21 Adj. EBITDA Margin  Fiber route miles  Businesses within 250 feet of Frontier fiber  Towers within 1 mile of Frontier fiber  40%  ~180k  400k  22k  $6.9B  $2.8B  Key operations and financial metrics    Frontier footprint  Note: All metrics shown are adjusted for the sale of Northwest Operations. Adjusted EBITDA and Adjusted EBITDA margins are non-GAAP measures. See Appendix slides for reconciliations to the closest GAAP measure. 
 
   Insatiable growth in demand for data  + Demand for over-the-top video  + Next-generation uses and applications  Proliferation of connected devices   = Explosive growth in data consumptionEstimated US Internet Protocol Traffic in Petabytes / month  Source: 2019 Cisco Annual Internet Report, Deloitte, Kagan, Nielsen, US Telecom, Mordor Intelligence 
 
 Fiber is the best product to meet this demand  Symmetrical download/upload speed, faster than cable and other emerging wireless technologies.  50 year replacement timeline.  Faster download speed  Faster upload speed  Lower latency levels  34%    17.6x    42%    Clear path to 10 Gig service, at lower capital intensity.                                                                                                                                                    10 Gig        Source: FCC  Fiber is superior to cable today  Fiber will maintain superiority in the future 
 
 Fiber to the home expected to be the most important digital infrastructure for US over next decade  US fiber broadband market is primed for strong growth  US opportunity larger than even most attractive international opportunities  Source: Cartesian, FTTH Council, Euromonitor, Omdia 
 
   The market recognizes the opportunity and fiber overbuilder valuations reflect it    Transaction EBITDA multiples~20x  Announcement Date  Acquirer / Investor  Target  Apr-2021      Oct-2020      Sep-2020      Jun-2020      Sep-2019      Jun-2019      Source: Company announcements, analyst reports 
 
 Frontier is already a fiber company with a highly attractive competitive landscape  Broadband Passings  Broadband Customers  BroadbandRevenue 1  Copper  FiberBase+Expansion  Number of broadband competitors within Frontier’s consumer footprint (%)  Fiber  Copper      2+ competitors  1 competitor    No competition  Fiber: 88% with 1 or no competitors  Copper: 87% with 1 or no competitors        Note: Fiber includes both the Base and the Expansion networks. All metrics shown are TTM through 1Q21 and adjusted for the sale of Northwest OperationsBroadband revenue across consumer and commercial customers 
 
   24    Frontier has unique advantages in deploying fiber  Overlash aerial copper lines ~$30 benefit per locationOwned long haul transport~$10 benefit per locationUtilize existing fiber; only replace existing distribution legacy copper~$30 benefit per locationExisting conduit capacity~$40 benefit per location                                                            Faster build pace and a ~20% cost advantage  
 
   Initial efforts bearing fruit…  7 consecutive quarters of positive consumer fiber net adds  Building fiber to new locations at an accelerating pace   Declining consumer fiber churn reflects improving customer experience  Covid  000s 
 
   …with substantial opportunity to unlock further value  Secular decline in voice and copper continuesSlow erosion through improved service deliveryRamp up copper to fiber conversionFiber subscriber base stabilizedDrive increased demand, accelerate penetration gainsContinue conversion to broadband centric propositionARPU improvement via product mixOpportunity to substantially improve cost baseKey investments in long term growthEnterprise and WholesaleConsumer gross add acceleration  
 
 Outlook for 2021    2020A  2021E  Adjusted EBITDA  $2.77B1  $2.40 - 2.50B  Capital Expenditures  $1.2B  ~$1.5B  2021 Fiber Builds – Current Plan      Locations    495,000  Cost per Location    ~$550  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. See Appendix for a reconciliation to the closest GAAP measure. 
 
     Our priorities     Accelerating fiber build Strong customer propositions Operational excellence  Building Gigabit America  More to be shared during our August Investor Day 
 
     Q1 2021 results and near-term outlook  Sheldon BruhaChief Financial Officer 
 
 First quarter 2021 highlights   Seventh consecutive quarter of positive consumer fiber net adds  Consumer customer churn of 1.45%, outperforming recent quarters as operational improvements expand Financial results in-line with expectations    Total revenue  $1,676M    $60M  Net income    $670M  Adjusted EBITDA    $1,475M  Debt raised & refinanced in April  Key highlights         
 
 Key financial trends – remaining properties  Data and Internet Services revenue showing benefits from improving fiber broadband performanceAdj. Operating expenses declined $96M vs prior year, reflecting continued cost disciplines and reduced video content costs   ($ in Millions)  Q1 2020  Q2 2020  Q3 2020  Q4 2020  Q1 2021  Data & Internet Services  $855  $849  $838  $834  $842  Voice Services  $529  $509  $500  $490  $487  Video Services  $212  $197  $186  $181  $169  Other  $108  $105  $103  $101  $95  Total Customer Revenue  $1,704  $1,660  $1,627  $1,606  $1,593  Consumer  $894  $874  $859  $857  $844  Commercial  $810  $786  $768  $749  $749  Total Customer Revenue  $1,704  $1,660  $1,627  $1,606  $1,593  Subsidy & Other Revenue1  $84  $94  $99  $89  $83  Total Revenue  $1,788  $1,754  $1,726  $1,695  $1,676  Adjusted Oper. Expenses2  $1,102  $1,051  $1,036  $1,002  $1,006  Adjusted EBITDA2   $686  $703  $690  $693  $670              Adjusted EBITDA Margin  38.4%  40.1%  40.0%  40.9%  40.0%  Includes $10M, $15M, and $5M of revenue from transition services performed for purchaser of Northwest Operations in Q2 20 through Q4 20. More detail can be found in our 2020 10-K.Adjusted Operating Expenses and Adjusted EBITDA are non-GAAP measures. See Financial Appendix for a reconciliation of Net Income (Loss) to Adjusted EBITDA and a reconciliation of Operating Expenses to Adjusted Operating Expenses. 
 
 
   Capital spending update  CapEx Spend$384M in Q1 2021     ~100k fiber locations built in Q1 – well in excess of all builds completed in 2020 Ramping activities to deliver 495k new fiber locations in 2021  Accelerating our build capabilities 
 
 No funded debt maturities until 2027, providing clear runway during implementation of our fiber builds.  Capital structure update  Maturity schedule at emergence1      $625M RCF  6.750% 2L notes    1L term loan    5.875% 2L takeback debt      5.000% 1L notes  Subsidiary debt    5.875% 1L notes    Other  $625  $2,825  $2,056  $1,800  Repriced term loan in April, attaining 125bp interest rate improvement  Includes $750M 2L takeback debt and $225M newly issued 1L term loan, both of which are issued and closed at emergence. 
 
     34    Financial flexibility to execute our strategy  Significant liquidity including:$625M revolving credit facility $535M available, reduced by Letters of Credit~$800M post-emergence cash balance, including $225M from new term loan~2.2x net leverage at emergence, lowest among peer group                                                                                        ~$1.3B liquidity at emergence 
 
     Conclusions  John StrattonExecutive Chairman of the Board 
 
     36    Strong assets + attractive opportunity set + financial flexibility…  Critical telecommunications infrastructure with fiber-rich assetsStrong industry fundamentals and tailwinds Opportunities to invest in fiber and growthCommitment to improve customer experienceRestructured balance sheet provides flexibility                                                                                    … create the path forward 
 
 Questions? 
 
     Investor supplement   
 
   Key value drivers  3.2M passings, 41.5% penetrated The Base Fiber Network is an established infrastructure asset, generating free cash flow todayComparable to cable, both on operational and valuation metricsPositive momentum in penetration, churn and ARPUUpside potential:Drive penetration towards 50%Further improve ARPU and churnDeploy best practices to lower costs and strengthen margin  The Expansion Fiber Network  Already executing on the initial expansion opportunitiesInitial 3.4M passings to be built at 24-30% program IRR~200k locations built from Jan 2020 through 1Q 2021~500k total locations to be built in 2021Up to 6.7M incremental passings currently being evaluatedThe existing network footprint creates a substantial competitive advantage relative to competitors:12M copper passings to potentially convert to fiberScale and existing infrastructure lowers build cost by ~20% when compared to other overbuildersAbility to build more quickly, reaching target project passings in less time  The Base Fiber Network 
 
 Upside to current valuation  Copper  Base Fiber  The Base Fiber Network has upside from further penetration gains, driving near-term growth and value creation  Additional upside potential from ARPU gains and cost efficiencies 
 
 Operating metrics   (Millions)  Q1 2020  Q22020  Q32020  Q4 2020  Q1 2021              Total Fiber Passings  3.2  3.2  3.2  3.3  3.4              Base Fiber Network            Consumer Base Fiber Passings  3.0  3.0  3.0  3.0  3.0  Total Base Fiber Passings  3.2  3.2  3.2  3.2  3.2  Base % Fiber Penetration  40.9%  41.1%  41.2%  41.4%  41.5%  Note: Estimate passings. Total includes both consumer and commercial locations  
 
 Operating metrics, continued  Customer data in thousands  Q1 2020  Q2 2020  Q3 2020  Q4 2020  Q1 2021  Consumer KPIs            Customer accounts   3,373    3,341    3,305    3,264    3,234   Net adds   (39)   (32)   (36)   (42)   (30)  BB net adds   (13)   (10)   (14)   (22)   (11)  Churn  1.84%  1.63%  1.81%  1.67%  1.45%  ARPC   $ 87.9    $ 86.7    $ 86.2    $ 87.0    $ 86.6               Fiber Broadband (BB) KPIs            Consumer Customers  1,200  1,207  1,214  1,223  1,234  Business Customers   118   116  117  117  120  Consumer:            BB Net adds   10    7    7    9    11   BB Churn  1.97%  1.54%  1.81%  1.56%  1.40%  BB ARPU   $ 52.5    $ 52.4    $ 52.8    $ 54.5    $ 56.0               Copper Broadband (BB) KPIs            Consumer Customers   1,418    1,401    1,380    1,348    1,326   Business Customers   171  166  160  154  149  Consumer:            BB Net adds   (23)   (17)   (21)   (31)   (22)  BB Churn  2.36%  2.03%  2.11%  1.96%  1.63%  BB ARPU   $ 38.7    $ 39.1    $ 39.1    $ 39.3    $ 40.1  
 
     Financial Appendix   
 
 2021 guidance    2020A  2021E  Adjusted EBITDA  $2.77B1  $2.40 - 2.50B  Cash taxes  $8M  ~$50M  Cash interest expense  $612M  ~$365M  Cash pension and OPEB, net of capitalization  $116M  ~$120M  Capital expenditures  $1.2B  ~$1.5B  2021 Fiber Expansion Builds  -  495,000  Cost per Location  -  ~$550  Note: Excludes impacts from Fresh Start Accounting. Cash Pension impacted by deferrals from contemplated 2020 plan year pension funding waiver from PBGC/IRS. 2021 includes pension funding relief provided from the American Rescue Plan Act of 2021 (ARPA). 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. See Appendix for a reconciliation to the closest GAAP measure. 
 
 Non-GAAP Financial Measures - Consolidated   ($ in Millions)  Q1 2020  Q22020  Q32020  Q4 2020  Q1 2021  Net Income (Loss)  (186)  (181)  15  (50)  60  Add back (Subtract):             Income Tax Expense (Benefit)  (23)  (57)  (11)  7  87   Interest Expense  383  160  121  98  89   Investment and Other (Income) Loss, Net  (5)  20  14  14  (2)   Pension Settlement Costs  103  56  -  -  -   Loss on Extinguishment of Debt  -  -  -  72  -   Reorganization Items, Net  -  142  131  136  25  Operating Income (Loss)  272  140  270  277  259  Depreciation and Amortization  415  397  392  394  387  EBITDA  $687  $537  $662  $671  $646  Add back:             Pension/OPEB Expense  23  23  24  20  23   Restructuring Costs and Other Charges  48  36  3  -  2   Stock-based Compensation Expense  1  1  1  -  (1)   Storm Related Insurance Proceeds  -  (1)  -  -  -   Loss on disposal of Northwest Operations  24  136  -  2  -  Adjusted EBITDA  $783  $732  $690  $693  $670              EBITDA Margin  35.6%  29.8%  38.4%  39.6%  38.5%  Adjusted EBITDA Margin  40.5%  40.6%  40.0%  40.9%  40.0% 
 
 Non-GAAP Financial Measures – Remaining Properties   ($ in Millions)  Q1 2020  Q22020  Q32020  Q4 2020  Q12021  Net Income (Loss)  (283)  (210)  15  (50)  60  Add back (Subtract):             Income Tax Expense (Benefit)  (23)  (57)  (11)  7  87   Interest Expense  383  160  121  98  89   Investment and Other (Income) Loss, Net  (5)  20  14  14  (2)   Pension Settlement Costs  103  56  -  -  -   Loss on Extinguishment of Debt  -  -  -  72  -   Reorganization Items, Net  -  142  131  136  25  Operating Income (Loss)  175  111  270  277  259  Depreciation and Amortization  415  397  392  394  387  EBITDA  $590  $508  $662  $671  $646  Add back:             Pension/OPEB Expense  23  23  24  20  23   Restructuring Costs and Other Charges  48  36  3  -  2   Stock-based Compensation Expense  1  1  1  -  (1)   Storm Related Insurance Proceeds  -  (1)  -  -  -   Loss on disposal of Northwest Operations  24  136  -  2  -  Adjusted EBITDA  $686  $703  $690  $693  $670              EBITDA Margin  33.0%  29.0%  38.4%  39.6%  38.5%  Adjusted EBITDA Margin  38.4%  40.1%  40.0%  40.9%  40.0% 
 
 Non-GAAP Financial Metrics - Consolidated   ($ in Millions)  Q1 2020  Q2 2020  Q3 2020  Q42020  Q1 2021  Total Operating Expenses  $1,661  $1,661  $1,456  $1,418  $1,417  Subtract:             Depreciation and Amortization  415  397  392  394  387   Loss on disposal of Northwest Operations  24  136  -  2  -   Pension/OPEB Expense  23  23  24  20  23   Restructuring Costs and Other Charges  48  36  3  -  2   Stock-based Compensation Expense  1  1  1  -  (1)   Storm Related Insurance Proceeds  -  (1)  -  -  -  Adjusted Operating Expenses  $1,150  $1,069  $1,036  $1,002  $1,006 
 
 Non-GAAP Financial Metrics – Remaining Properties   ($ in Millions)  Q1 2020  Q2 2020  Q3 2020  Q42020  Q1 2021  Total Operating Expenses  $1,613  $1,643  $1,456  $1,418  $1,417  Subtract:             Depreciation and Amortization  415  397  392  394  387   Loss on disposal of Northwest Operations  24  136  -  2  -   Pension/OPEB Expense  23  23  24  20  23   Restructuring Costs and Other Charges  48  36  3  -  2   Stock-based Compensation Expense  1  1  1  -  (1)   Storm Related Insurance Proceeds  -  (1)  -  -  -  Adjusted Operating Expenses  $1,102  $1,051  $1,036  $1,002  $1,006 
 
 Free Cash Flow    Quarterly Results           ($ in Millions)  Q12020  Q22020  Q32020  Q42020  Q12021  Net Cash from Operating Activities  $477  $473  $542  $497  $665   Capital Expenditures   (286)  (225)  (314)  (356)  (384)  Operating Free Cash Flow  $191  $248  $228  $141  $281    Trailing Four Quarters           ($ in Millions)  Q1 2020  Q2 2020  Q3 2020  Q42020  Q12021  Net Cash from Operating Activities  $1,703  $1,601  $1,897  $1,989  $2,177   Capital Expenditures   (1,207)  (1,157)  (1,153)  (1,181)  (1,279)  Operating Free Cash Flow  $496  $444  $744  $808  $898