Press release

Frontier Communications Announces Sale of Operations in Washington, Oregon, Idaho, and Montana

Sponsored by Businesswire

Frontier Communications Corporation (NASDAQ: FTR) today announced it has
entered into a definitive agreement to sell its operations and all
associated assets in Washington, Oregon, Idaho, and Montana to
WaveDivision Capital, LLC (WDC) in partnership with Searchlight Capital
Partners, LLC (Searchlight) for $1.352 billion in cash subject to
certain closing adjustments.

Frontier’s operations in these states serve more than 350,000
residential and commercial customers as of March 31, 2019 and account
for $619 million of revenue, $46 million of net income and $272 million
of Adjusted EBITDA1 for the twelve months ending March 31,
2019. The transaction is subject to regulatory approvals and other
customary closing conditions, with closing anticipated to occur within
one year.

“The sale of these properties reduces Frontier’s debt and strengthens
liquidity,” said Dan McCarthy, Frontier President and Chief Executive
Officer. “We are pleased to have a buyer with extensive experience
building and operating advanced fiber-based communications assets in
these regions. We will be working very closely with the new owners to
ensure a smooth, successful transition for our customers and the
communities we serve.”

WDC, headed by broadband entrepreneur Steve Weed, is based in Kirkland,
Washington, and brings extensive technical, organizational, and
management experience in building and operating residential and business
next-generation fiber networks.

“We are excited to be partnering with Searchlight on this opportunity to
acquire Frontier’s operations in the Northwest,” said Steve Weed, CEO of
WDC, and Founder and former CEO of Wave Broadband. “We have a proven
track record of customer satisfaction by providing fast, reliable
internet connectivity combined with great service and support. Having
grown up in the Northwest, I’m excited to be able to continue to serve
my community through this new venture.”

“Searchlight is pleased to have reached this agreement with Frontier,”
said Eric Zinterhofer, Founding Partner of Searchlight. “We are excited
to partner with Steve and his team, who have an outstanding track record
of building best-in-class fiber networks, and who will enable us to
accelerate the deployment of superior next generation products for our
residential and business customers.”

Additional Transaction Details

Frontier will continue to operate the business and serve customers with
existing products and services until the transaction closes. WDC and
Searchlight have formed a new company to operate the business and honor
existing customer commitments and contracts after the transaction closes.

Under the terms of the transaction, Frontier will receive $1.352 billion
in cash at closing subject to certain adjustments, including working
capital as compared to an agreed target, and certain pension and retiree
medical liabilities. Frontier has also agreed to provide certain
transition services to the new ownership group following the closing.

The transaction is subject to regulatory approvals by the Federal
Communications Commission, the U.S. Department of Justice, the Committee
on Foreign Investment in the United States (CFIUS), applicable state
regulatory agencies, and certain local video franchise authorities.

Frontier was advised by Evercore and Cravath, Swaine & Moore LLP. WDC
and Searchlight were advised by Bank of America, Credit Suisse, and
Deutsche Bank and Paul, Weiss, Rifkind, Wharton & Garrison LLP.

Additional Details of Frontier Operations

Across the four states, Frontier’s network passes 1.7 million
residential and business locations, of which approximately 500,000 are
fiber-to-the-premises capable. As of March 31, 2019, Frontier served
approximately 150,000 fiber broadband, 150,000 copper broadband and
35,000 video connections in these states.

About Frontier Communications

Frontier Communications Corporation (NASDAQ:FTR) is a leader in
providing communications services to urban, suburban, and rural
communities in 29 states. Frontier offers a variety of services to
residential customers over its fiber-optic and copper networks,
including video, high-speed internet, advanced voice, and Frontier Secure®
digital protection solutions. Frontier Business™ offers communications
solutions to small, medium, and enterprise businesses. More information
about Frontier is available at

About WaveDivision Capital

Founded in 2003 by broadband entrepreneur Steve Weed, WaveDivision
Capital (“WDC”), headquartered in Kirkland, WA, is a private investment
firm focused on the broadband industry. Steve was founder and CEO of
Wave Broadband, and the managing directors of WDC, Harold Zeitz and
Wayne Schattenkerk, were formerly the President and CFO, respectively,
of Wave Broadband, which grew to one of the largest broadband companies
on the West coast, until its multi-billion dollar sale in 2018. WDC’s
goal is to bring better internet connections to more homes and
businesses throughout North America. WDC’s current investments include
Hargray Communications, Xplornet Communications, MetroNet, and
RCN/Wave/Grande. You can learn more about WDC at

About Searchlight Capital Partners

Searchlight is a global private investment firm with offices in New
York, London and Toronto. Searchlight seeks to invest in business where
their long-term capital and strategic support accelerate value creation
for all stakeholders. For more information, please visit

Non-GAAP Financial Measures

Frontier uses certain non-GAAP financial measures in evaluating its
performance, including EBITDA and Adjusted EBITDA, each of which is
described below. Management uses these non-GAAP financial measures
internally to (i) assist in analyzing Frontier’s underlying financial
performance from period to period, (ii) analyze and evaluate strategic
and operational decisions, (iii) establish criteria for compensation
decisions, and (iv) assist in the understanding of Frontier’s ability to
generate cash flow and, as a result, to plan for future capital and
operational decisions. Management believes that the presentation of
these non-GAAP financial measures provides useful information to
investors regarding Frontier’s financial condition and results of
operations because these measures, when used in conjunction with related
GAAP financial measures (i) provide a more comprehensive view of
Frontier’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) present measurements that investors and rating
agencies have indicated to management are useful to them in assessing
Frontier and its results of operations.

A reconciliation of these measures to the most comparable financial
measures calculated and presented in accordance with GAAP is included in
the accompanying tables. These non-GAAP financial measures are not
measures of financial performance or liquidity under GAAP, nor are they
alternatives to GAAP measures and they may not be comparable to
similarly titled measures of other companies.

EBITDA is defined as net income (loss) less income tax expense
(benefit), interest expense, investment and other income, and
depreciation and amortization. EBITDA margin is calculated by dividing
EBITDA by total revenue.

Adjusted EBITDA is defined as EBITDA, as described above, adjusted to
exclude certain pension/OPEB expenses, restructuring costs and other
charges, stock-based compensation expense, goodwill impairment charges,
and certain other non-recurring items. Adjusted EBITDA margin is
calculated by dividing adjusted EBITDA by total revenue.

Management uses EBITDA and adjusted EBITDA to assist it in comparing
performance from period to period and as measures of operational
performance. Management believes that these non-GAAP measures provide
useful information for investors in evaluating Frontier’s operational
performance from period to period because they exclude depreciation and
amortization expenses related to investments made in prior periods and
are determined without regard to capital structure or investment
activities. By excluding capital expenditures, debt repayments and
dividends, among other factors, these non-GAAP financial measures have
certain shortcomings. Management compensates for these shortcomings by
utilizing these non-GAAP financial measures in conjunction with the
comparable GAAP financial measures.

Forward-Looking Statements

This press release contains forward-looking statements pursuant to the
safe harbor provisions of the Private Securities Litigation Reform Act
of 1995. All statements other than statements of historical facts may be
forward-looking statements. When used in this press release, the words
“believe”, “expect”, “could”, “may”, “would”, “will”, “trend” and
similar words are intended to identify forward-looking statements.
Examples of forward-looking statements include, but are not limited to,
statements that relate to Frontier’s future prospects, developments and
business strategies, as well as Frontier’s sale of operations and
associated assets to WDC. We caution you to not place undue reliance on
these forward-looking statements, as they speak only as of the date they
are made. Except for the company’s ongoing obligations under the U.S.
federal securities laws, the company does not intend to update or
otherwise revise the forward-looking information to reflect actual
results of operations, changes in financial condition, changes in
estimates, expectations or assumptions, changes in general economic or
industry conditions or other circumstances arising and/or existing since
the preparation of this press release or to reflect the occurrence of
any unanticipated events.

Many factors and uncertainties relating to the proposed transaction, our
operations and our business environment, all of which are difficult to
predict and many of which are outside of our control, influence whether
any forward-looking statements can or will be achieved. Any one of these
factors could cause our actual results or the impact of the acquisition
to differ materially from those expressed or implied in writing in any
forward-looking statements made by Frontier or on its behalf. Such
factors related to the completion and impact of the proposed transaction
include, but are not limited to, statements related to the amount of
cash Frontier will receive at closing, the ability of the parties to
obtain regulatory approvals and meet other closing conditions, and
Frontier’s strategy to reduce debt and operate its ongoing business.

For additional information on other factors related to Frontier’s
business that could cause our actual results to differ materially from
expected results, please see our filings with the Securities and
Exchange Commission, including the company’s Annual Report on Form 10-K
for the year ended December 31, 2018 and any subsequent reports on Forms
10-Q and 8-K.

1 See “Non-GAAP Measures” for a description of this measure
and its calculation. See Appendix A for a reconciliation to net



Frontier Communications Corporation

Washington, Oregon, Montana and Idaho

Reconciliation of Non-GAAP Financial Measures
Trailing 12 months
For the quarter ended For the year ended As of

($ in millions)

March 31, 2019 March 31, 2018 December 31, 2018 March 31, 2019


Net income $ 23 $ 22 $ 45 46
Add back
Income tax expense 7 7 14 14
Interest expense       1 1
Operating income 30 29 60 61
Depreciation and amortization   36   41   150 145
EBITDA $ 66 $ 70 $ 210 206
Add back:
Pension/OPEB expense 2 2 7 7
Restructuring costs and other charges 1 1 1 1
Goodwill impairment       58 58
Adjusted EBITDA $ 69 $ 73 $ 276 272