Okay, well, good morning, everyone. Thanks for joining us at our inaugural MoffettNathanson TMT conference. I'm Nick Del Deo with MoffettNathanson, and I'm thrilled to be joined by Scott Beasley, the CFO of Frontier Communications. Thanks, Nick, for having us. Yeah, thanks for coming. And, just so you know, if you scan the QR code on the screen, you're able to submit a question. And if we have time, I can try to work some in, towards the end. So with that, let's get started. Great. All right. Listen, Scott, you know, obviously we have a lot to discuss. I thought we'd, you know, start by, you know, hitting with a topic that garnered probably the most attention from your earnings call a couple weeks ago, which is that of CapEx. You bumped up your 2023 CapEx guidance by $200 million-$400 million. You said half of that was a function of higher expected labor costs, as well as, sorry, higher unit costs for the fiber deployment plus inventory build. I guess, you know, the question I got from a lot of investors is, you know, what changed in the two and a half months from when you presented your initial 2023 guidance, versus Q1, you know, that would cause your forecast to be off by, call it, 10% or so? Yeah, so let me start by describing how we engineer and build, and then I'll get into the specific cost per location one, so we've said for two years what we're doing is pursuing an integrated build, and that means that we pre-engineer and pre-pass across a large geographic area, what we call super clusters, where we're looking for maximum build efficiency but also maximum sales and marketing efficiency, so when we go into an area, we're gonna put in the passings for single-family units, multi-family units, small and medium-sized businesses, wholesale customers like fiber- to- the-t ower, and we wanna build as much of that as possible to maintain, you know, single crew there and maintain maximum efficiency, so we're gonna build for cost, but we're also gonna build for the best return in a certain area. In some cases, this requires parts of the network to be pre-engineered for passings that won't be open for sale in that particular period. Examples of that would be new SFU subdivisions where we're doing a lot of the central office work for eventually thousands of locations that are gonna be put in, MDU, MTU. Those are other good examples of that. That's the reason that in a specific quarter, you can't just take the total CapEx, divide by the number of passings, and say that's gonna be the cost per location. Mm-hmm. We would love for it to be that even throughout, and it's a very predictable CapEx per quarter. But in reality, that's just not how you build. You end up having some quarters that are high, some quarters that are low, because of that integrated build model. And, you know, that's the context of the build. And so I just wanted to clarify that for everybody. Now, in terms of the cost per passing, let me give you three kinda simple data points. In the first two years of the build, we built nearly two million passings at $830 per location. Mm-hmm. A very good, strong start to the build. This year, we expect to be at $1,000-$1,100 per passing. For the balance of the build, we aim to be in that same $1,000-$1,100 per passing range, which would bring the total program, so everything we built since we began the program, in at around $1,000 per passing. That's the cost per passing. The cost per passing's important, but I will say that it's not the most important value driver of building fiber. Mm-hmm. The most important ones are ARPU and penetration, and so we've had some examples where our build cost has been higher. For example, we're building an area west of DFW in Texas where our build costs have been higher because of rock, but our penetration's 60% + in less than two years. Oh, wow. We've actually had to go back and add equipment there because our sales have far exceeded any penetration targets we've had. That's a really strong IRR. Even though the build costs were higher, the penetration's better than expected. ARPU's moving in the right direction. So again, even though build costs are higher than we had initially expected because of the improving trajectory of ARPU, because penetration's at strong rates, the overall build, we're still very confident in the mid- to high-teens IRR. Okay. Okay. Let's, you know, I wanna dig into CapEx further. I wanna talk about EBITDA later in the discussion. But I thought it would be helpful to kinda set those up by asking a big picture question that seems to be in a lot of folks' minds, which is, how should we think about the trajectory of CapEx and EBITDA, you know, over the course of 2023 and exiting 2023? You know, can you help us tie that to your guide? Yeah. Let me start with CapEx, and I'll go to EBITDA. Sure. CapEx, we expect to be heavily front-end loaded this year. Q1 was about $1.1 billion. We expect Q2 to be in a similar range. Then it should dramatically fall in Q3 and Q4. Mm-hmm. Now, just some context behind that. We had a surge of build activity in Q4 of last year that was largely paid for with cash CapEx in Q1 of this year. We're also building inventory in the front half of this year. We've said the inventory's very front-end loaded as we've opportunistically taken advantage of some deals with suppliers to bring in costs below what we had expected to buy inventory at. And then finally, as the build cadence levels out through the rest of the year, we'll consume some of that inventory we've built. We'll consume some of the pre-work that I described in the first question, which then would lead to much lower second half CapEx than the first half. And assuming that we would build at a similar pace next year, roughly the 1.3 million build pace, we'd be in the high $2 billion range of CapEx. 2024 would be lower than 2023's. Okay. $3.0-$3.2 billion, so that's kinda the general trajectory of CapEx. Heavily front-end loaded in the first half of the year and declining dramatically in the second half of the year. On EBITDA, we expect Q2 to be in the $520 million-$530 million range. I said that on the earnings call a few weeks ago. That would be up sequentially, roughly flat year -over -year, and once you control for some one-time costs from last year's Q2. And then in the second half of the year, we expect EBITDA to grow sequentially in every quarter as our ARPU continues to inflect positively and our cost savings initiatives gather momentum, so those two things, ARPU and cost savings, give us a lot of confidence in the trajectory in the second half of the year. That sets us up well for mid-single-digit growth in the second half of this year versus last year. Mm-hmm. I'll emphasize that if we're able to achieve that, this would result in full-year EBITDA growth in 2023 and then mid-single-digit growth rate in the second half of the year. That's for a company that hasn't grown organically in 10+ years. I think that will be quite an achievement when we, in fact, execute it in the second half. Yeah. That's great to hear. And it seems to set you up well going into 2024. Okay. So let's dig into the CapEx side of the equation some more. You know, to date, I think you guys have benefited from signing deals for labor and materials, you know, sooner than some of your peers, kinda locking in more attractive rates before fiber became more popular and we had inflation issues and whatnot. To what degree are those agreements still helping to restrain your costs? Yeah. So I think we had the benefit of an early start. We started our build late 2020, early 2021. We signed a lot of these multi-year agreements in early to mid-2021 that, in some cases, gave us visibility of costs throughout the entire build. In some cases, gave us, call it, two years of visibility with then renewals coming up in late 2023. And those gave us a lot of protection from inflation. They, they didn't make us immune to the impact of inflation. Mm-hmm. But they gave us a lot of protection. So now, we're continuing on some of those contracts that just go through the end of the build. We're renewing some of them at what are higher rates now, still within the cost envelope that I described in the first question. Mm-hmm. Then we're also, as we've expanded our build into 15 states, which I know you'll get to in a future question, as we've expanded our build, we've had to secure labor in those new states that we hadn't necessarily anticipated building in. Now, that's a good thing 'cause we found more and more states that we can profitably convert copper to fiber. But those labor rates have come at higher costs. Okay, so we'll touch on labor again in a minute. You talked on, you know, new states as being one of the drivers too. Yeah. As we think about new states and how that ties to, you know, some of your CapEx commentary, is that a function of, you know, essentially startup costs in those states, like needing to buy tools and trucks and stuff like that? Or is it a function of being subscale as you start? Kinda how should we think about that? Yeah. So I would bucket startup costs into three parts. Before you build out an entire area, with new OFS, of all the OFS that you'll eventually open up there, you have to do engineering for pretty much the whole universe of build there, which is a startup cost. You have to do, call it central office and feeder job work where you're putting in the network electronics that can eventually serve hundreds of thousands of locations, even though in a particular quarter, you may only open 10,000 there. Mm-hmm. And then you're gonna have to set up your distribution. Sometimes it's internal, sometimes it's external, but, you know, distribution and supply chain to build out there for multiple years. So the combination of those things leads you to front-end load your costs, as I described early on in the integrated build. But then once you're through that hump of CapEx, you start consuming it. So your costs per passing eventually normalizes to that roughly $1,000 for the program. Okay. Now, is the current geographic scope of the work you're undertaking consistent with what you need to achieve the 10 million initial target you've talked about? Or are you gonna have to move into additional states to get there? I think we're through the bulk of our geographic expansion. So we're building in 15 of our 25 states now. Mm-hmm. As context, when we initially laid out the build plan, in mid-2021, most of the build was focused on the four legacy states, so California, Texas, Florida, and Connecticut. As we dug deeper into our footprint, in the rest of 2021 and 2022, we not only found additional passings that we had passed there but found additional passings in new states that were outside of the original build plan. That's not because we ran out of places in the original build plan. It's 'cause more and more locations were attractive the deeper and deeper we dug into our 15 million total passings. We made the decision in late 2021, 2022 to expand to at least 15 states. I think that's roughly where we'll stay. We may add a state or two here or there. We may add a state if we're very active in securing government subsidies outside of those 15. Mm-hmm. We're gonna be very active pursuing within those 15. We'll also be active in those remaining 10 states. So if we get some government subsidies, we may expand beyond 15. But I don't expect a material change to that from here. Okay. Good. And that's, again, all consistent with CapEx kinda being lower in 2024 than 2023 'cause you won't have these startup costs again. Correct. Correct. We will be through the bulk of the startup costs for all of those 15 states, and we'll start kinda consuming that, that pre-work that we've done. Okay. Great. Great. You know, maybe let's turn to labor. You know, can you talk a bit about the steps that you're taking to try to mitigate labor cost increases? You know, for example, are there opportunities to train your workforce to do more stuff in-house? Can you use connectorized components or other things like that? Sure. I think you hit on three key parts of trying to mitigate as much of the inflationary pressure as we can. So there's training, there's the internal-external mix, and then there's the material efficiency. Mm-hmm. And we're active in all three. I think you hit those right. On training, we've ramped up our internal training largely because and this has to do not only with building fiber but also installing fiber. 'Cause if we take a step back, three years ago, Frontier had never really built fiber, which meant they hadn't installed new fiber customers outside of just their base legacy, you know, three markets into LA. Mm-hmm. Dallas and Tampa. Now we're building in 15 states. We've had to retrain our workforce to install fiber in 15 states. So those technicians who used to repair copper are now installing fiber. I think we're up the learning curve significantly there, and we're going to get more efficient as we go on. So training's a big part of our overall plan. The second point you make is internal and external labor mix. And that's something that we look at carefully, not only on the build side but also the installation side. Mm-hmm. In some states, we're much more heavily externally sourced, labor-wise for the build. In some states, we're more heavily internal. So that's a mix that we evaluate based on a number of different dynamics. And then the third one you mentioned is getting more efficient in our use of components. So the goal is always to take labor out of the field and put it in more efficient venues, whether you can do pre-kitting of supplies in warehouses or you can take labor out and splicing out of the field and do pre-connected fiber. Those are all options that we explore and we use in different parts of the network. So that in itself, along with pursuing lower-cost construction techniques that I've talked about, like doing underground plowing when you can do it instead of boring through rock. Mm-hmm. Those are an important part of mitigating the kinda inflationary pressures that we have seen on, on both labor and materials. Okay. Yeah. Since we're on the topic, I thought I'd leave in one question from the audience. You know, what are you assuming for wage inflation from here? Yeah. We haven't given specific wage inflation goals. A lot of it is determined by the internal and external mix. Mm-hmm. So internally, we have a pretty clear line of sight on what our wages are based on our union agreements. And those are, call it, you know, in traditionally in the kinda 3%-4% range. Those are ranges that we've given our employees when inflation was much lower than that. And it's been consistent kinda for a long period of time. Externally, there's a bit more variability there. But I'd say kinda the 3%-4% range is typically what we see there. Okay. So, you know, so we've talked about some of the factors driving the cost per passing. What are you seeing in terms of installation costs? Yeah. Installation costs, we've said our long-term goal is to get to a cost to connect of roughly $600 per customer. Okay. We're above that now, for a few reasons. Number one, we're still becoming more efficient in our installation capacity. I mentioned before that, because of our technician workforce largely being retrained from a copper repair workforce to a fiber installation workforce, we're still getting up to learning curve, particularly in new geographies. And then secondly, we have run into some need to, in order to compress intervals and make sure that our customers are getting serviced within a certain period of time, we've had to rely on some external contractor help, which has come at higher prices than we've expected. So that's the labor cost dimension that I think mitigates over time as we become more efficient and kinda synchronize those three parts of the build that we talked about: building, selling, and installation. Mm-hmm. The second big value driver there in cost to connect is self-install, self-install. We're far behind a lot of peers in terms of our ability, both in our network and in our IT systems to be able to do self-install. But we're getting up the curve there. So as we get closer and closer to peer benchmarks of self-install, we should come back down to that $600 per passing range. Okay. Okay. Great. Now, as it relates to inventory, I don't wanna put words in your mouth, but it sounds like based on the CapEx commentary you shared, it seems like you're probably through the worst of building up your inventory, and we shouldn't expect a big bump from here. Yeah. I think that's right. I think the high watermark of inventory will be Q1 or Q2 of this year, so the first half of 2023, and then we'll begin consuming that in the second half of this year, and then throughout 2024. So I would expect to be able to manage inventory at lower overall levels into the second half and then into next year. I wouldn't expect another big ramp-up in inventory after this initial ramp that we've seen, call it, in Q4 of last year and the first half of this year. Okay. So that should kind of, these levels should hold you through the remainder of the build program? That's right. Yeah. We don't anticipate having to build more inventory than we have right now. Okay. Okay. Now, you indicated on your call that you expect your cost per passing for the entire Wave 2 project to be around $1,000 a home. You talked about blending in lower cost locations, MDUs, and the mix of aerial builds is helping to get you there. I guess, you know, as it relates to the aerial comment, does that imply that you are doing more buried work this year than you plan to do in the coming years, or is there some other interpretation? I'd say, you know, I talked about the three chunks of work. The roughly $830 per passing in the first 2 million passings this year, we'd expect to be $1,000-$1,100. And then if we're able to achieve that $1,000-$1,100 for the balance of the build, we bring in the total program where we said, which is roughly $1,000. There's not a huge change in what we would, you know, the cost per passing this year versus the future parts of the build. I'd also say that every supercluster we build in has a mix of aerial and buried. Mm-hmm. Just the topography of the build. Very rarely do you go into a supercluster and build all aerial or all buried. So I think it'll continue to be a mix, both this year and in the coming years. Okay. So maybe, you know, a question I had later, but I'll pull it up now because you brought it up. I think there's a concern among some investors that you're targeting kind of aerial-only builds today. And as time goes on, you're gonna be left with a less and less attractive, you know, group of homes to pass: more buried, more rural, etc. And so your costs are naturally gonna increase over time. You're saying that's not how it works? No. No. I think that's the, that's why I spent the time upfront to talk about the super cluster approach. Yeah. Because you wouldn't just build your best IRR and then your next best IRR 'cause you'd have your construction crews hopping over the country in ways that are very inefficient for the total build program, so as we've prioritized superclusters that we're building in, those superclusters involve some high-cost locations, some low-cost locations, some high IRR, some lower IRR, but you wanna build it out all at once so you can blitz it with sales and marketing, blitz it with installation capacity. I'd also say that, you know, again, the build cost isn't the most important determinative IRR. Mm-hmm. It's what's the competitive landscape? What are your ARPU assumptions? What are your likely penetration rates? And so those have more of an input into when we're gonna build something than just pure cost to pass. I'd say the one area we have definitely prioritized in the build is building fast to markets where we think there's an overbuilder threat because market structure is a very important determinant of the economics of the build. And so if we get wind that somebody is gonna try to build and be a third player in the market, we're gonna try to beat them to the market. I think we've been successful in that. Mm-hmm. We've seen very little overbuilding activity in our footprint in the last two and a half years. I think that had a lot to do with us getting out of the gate so fast, building territories that were the most attractive for overbuilders to potentially build. And therefore, any overbuilders who've had a lot of trouble of their own, but any overbuilders have probably gone after other territories that are non-Frontier territories. And therefore, by going fast, we've been able to preserve market structure in those areas. Okay. Great. One more on build costs. Again, you mentioned MDUs as an opportunity to keep your cost per location in check. It does that suggest that you're not passing MDUs, you know, proportionate with their contribution to your whole base today, or something else going on there? Yeah. I'd compare MDUs to our SMB, our small to medium-sized business, where we were probably 12 months ago. So MDUs and SMB were never a focus of Frontier as a whole. Frontier was very focused on just single-family residential. And as we pursued the integrated build plan, we've gone and done the work to be able to eventually open up small to medium-sized businesses, MDUs, once we had a critical mass. So now that we're two and a half years into the build and have more of a critical mass, we will be pursuing those in much, much more focus. They're attractive assets. You put money in the ground to pass them. And so, we're gonna be much more focused on earning a return on those assets. Okay. Okay. Great. Now, you've, when you originally set your target of 1.3 million homes on your Q4 call, you know, you noted that that was gated, you know, in part by labor, materials, etc., but also in part by your installation and sales capacity. And, you know, you emphasized the, you know, the desire to blitz an area after you build out fiber to make sure you get penetration up quickly. How are you doing in terms of, you know, ensuring the installation and marketing legs of the stool are, you know, kinda commensurate with the build pace? Yeah. Yeah. It's a good question, so one of the, you, you're right. The three legs of the stool we've talked about are building within the cost envelope, selling efficiently, and then installing efficiently, both from a cost perspective and an install interval, so you wanna be able to install that customer within a certain amount of time. And I think we've made progress on all three. We talked on a few earnings calls ago that 2021 and 2022 were really the ramp-up phases. We were building all three of those from scratch, and we tried a lot of different methods. We learned what worked. We learned what didn't, and now we're fine-tuning the model. So, particularly in sales and installation, we've resequenced how we go to market, whether it's door-to-door, digital, telesales, and other types of our sales channel mix to become efficient but also effective in selling early on. And we've made progress there. And then, on the installation capacity I talked about before, I think that's slower to improve 'cause we have to get more productive and, as I mentioned, get up the curve in a lot of new geographies where our workforce hasn't installed fiber in great numbers before. We've relied on some external contractors to handle overflow volume. But as we're able to bring in our own internal people to do that, I think we'll make progress there, which will then improve customer service and allow us to install at even tighter intervals than we have today. Okay. Okay. Great. Let's, let's turn to penetration. You know, the cohort data you presented to reporters, you know, really interesting and really helpful. It looks like you've been penetrating your new cohorts consistent with plan. The 2022 cohort seems to be doing a bit better than the 2021 cohort, at least at the 12-month mark so far. Is that just noise, or is there something more tangible that you're doing that, that you think is driving that? Yeah. That was a key highlight of the whole first quarter report, that we had a record quarter of penetration at 12 months. So, 2022 was the biggest cohort we'd ever built thus far that's aged at 12 months. And it was at the very top end of our guidance range, so 20% after 12 months. And I don't think that's just noise. I mean, we can see what's coming through the pipeline for future quarterly cohorts. Mm-hmm. We're very confident we can stay, you know, at the top end of that 15%-20% guidance range that we set two years ago. Great. A few points I'd make on penetration. Number one, now that we have two and a half years of data, we've been able to plot all the different cohorts and different geographies on a XY axis of months coming across the bottom and penetration coming on the Y axis. They're actually relatively tight. Eventually, we'll share some of those externally, once we get past the kind of more competitive period and feel comfortable sharing those. But they're actually pretty tight, which gives us a lot of confidence that penetration is relatively predictable. Of course, there's always variations, but it's relatively predictable. When you come into a market with new fiber after month one, you're gonna have X. Month two, you're gonna have Y. And there's some variations, but it's pretty predictable, which means when we go build fiber, we can have a lot of confidence that here's gonna be the penetration curve. Let's set up our sales installation capacity for that. Let's set up our workforce for that. And that gives us a lot of confidence that we will earn the kind of returns that we expect because penetration is falling within a relatively tight bandwidth. The second part, I'd say is we are getting better and better at penetrating in our expansion markets. Mm-hmm. So as I mentioned before, the first two years, we've tried a lot of different things with sales channel mix, with offer, with proposition, with how we sell. And I think we've refined that in a way that we improved 2022 very significantly versus 2021 and expect to stay kinda in that top end of the range we've given. Oh, that's great. That's great. Yeah. As we think about the locations that you built to in 2021 and 2022, are there any variances in terms of, you know, demographics or competitive overlaps or pre-upgrade penetration rates or anything like that that should affect penetration, you know, that's different in 2023 and beyond? Or do you think they're pretty, pretty similar? I think for 2022, it's pretty similar. I mean, one of the outliers we've always had is the first half of 2021. Mm-hmm. We've talked about that a lot. I don't wanna belabor it, but that was before the current management team got here, before we had restructured our offer. It was really more of a call it network-driven build where we just build where we felt like we could scale up. Yeah. Instead of this integrated build that we pursued starting from the second half of 2021 onward, so that cohort has always been a laggard on penetration. It's within the range. It fell at 25% after 24 months. I think it'll kinda hover around there and eventually begin improving towards the terminal penetration, but that's really the only outlier we've had. Everything else has been part of this integrated build and has been pretty tight in its penetration, and I wouldn't expect a big deviation from that in future years. Okay. Now, it was in January that you made some, you know, meaningful changes to your broadband offers, you know, in general, you know, kinda reducing some promotions, changing the add-ons and whatnot. You know, how would you describe your level of confidence that those changes, which are helping to boost ARPU, won't negatively impact your penetration rates? Yeah. I think the evolution that we're going through, Nick has described before. We've always had a premium product. I mean, fiber is far superior to cable or any alternatives, but because of the damaged reputation, because of our damaged customer service, we started out with a premium product but at a discounted price, and we had to kinda get back into the market, earn customer loyalty again, rebuild our sales channels that had really lost faith in our ability to sell, and that's what we did in 2021 and 2022. We were rebuilding the sales engines and rebuilding our reputation. In the beginning of 2023 is when we made the pivot to a premium product at a competitive price. Mm-hmm. We did a number of pricing actions at the beginning of 2023, late January, where we made our new acquisition pricing competitive with the alternatives. We reduced our promotional activity significantly. We added a wide array of value-added services, but also began charging for those. Formerly, they'd almost all been included, and customers didn't even know that they were getting them. Mm-hmm. And then we, I think I mentioned, we reduced our promotional activity related to gift cards. We, you know, related to all those that were done in late January, we still had a record Q1, 87,000 net adds, which was more than, I think, the entire cable industry combined. And so even with those changes, we didn't see a slowdown in the pace of our ability to add new customers. Eventually, the third phase of this is a premium product at a premium price. Mm-hmm. And we think as we continue rebuilding our reputation, we'll be able to get at least industry-level ARPU, overall, and then industry-level growth rates of ARPU, which, you know, tend to be at least in the 3%-4% range. We were below that last year. Mm-hmm. Because of the foundation lane that I described. We expect to be at least at a 3%-4% growth rate this year, exiting 2023 versus where we exited 2022. Mm-hmm. I think that's the expectation, going forward in future years. Okay. Now, you had also articulated a nice, you know, a nice improvement in the intake ARPU. To what degree was that increase a function of, you know, call it the actual price of the broadband product or the tiers customers are selecting versus, you know, some of the add-on options? Yeah. It was both. It was both. We've had an improved percentage of our customers choosing a gig or above. So we said more than half of our customers are choosing the one, two, or five gig. And that's really aligned with. It's, it's in line with the expectations when we launched our five gig. Every time we've launched a new speed at the top end, we've, we've had people move up the pricing ladder. Mm-hmm. So we now offer five gig, two gig, one gig, and 500 meg. And it's continually skewing higher and higher. So that's been a nice uplift to intake ARPU. The second thing is we've not only added the suite of value-added services and started charging for them, but we've begun selling them with much more conviction because that's never been something that Frontier did. Our attach rates were up more than two times in Q1 versus where they were before based on this new strategy. So ARPU has gotten a nice uplift from value-added services in addition to the new acquisition pricing. What drives a customer to take two gigs or five gigs? So, you know, there's always gonna be a segment of the population that's a super user. And Frontier happens to be phenomenally popular with gaming. We win all sorts of gaming awards. And there's people I run into who know I work at Frontier and said, "Oh, I just signed up for your five gigs. I'm a big gamer. And I always need the fastest upload and download speed." So there's certain customer segments that always want the fastest 'cause they use it every day in their usage. There's certain other customer segments who, you know, know that they want to grow into that. And because their data usage is increasing exponentially, because they have significantly more devices connected to the internet, I think our average user has 24-25 devices per household now. And, you know, they may not need all five gigs now or two gigs now, but they know that they're gonna grow into it. And at the competitive prices we have, you know, they're gonna sign up for it now and eventually grow into it. Okay. Now, you've had some pretty nice DSL ARPU and or copper broadband ARPU increases as well, you know, probably mid to high single digits. What's behind that, and how sustainable is it? Yeah. I think as we look at our, we wanna continue to serve our copper customers. Our costs have gone up with inflation, whether it's energy costs or cost to repair. And so we've had to pass a portion of that inflationary pressure to customers. And for the most part, they understand it, and that inflation's up across the whole economy. Okay. You know, as we think about your copper base, what portion of those customers are in locations where there's a viable wireline competitor like cable, you know, versus, you know, places where you may be the only real provider? Of our copper footprint? Yes. Yeah. I'd say most of our copper footprint, there's another provider. Okay. You know, our copper penetration rate's in the 10%-12% range. And so most of those places have a cable provider. Therefore, when we get there with fiber, we like our chances to get at least 45% penetration. One of the notes you didn't ask about, is it a good time to share it? Most when we build fiber in an area where we formerly had copper, almost the vast majority of our gross ads are coming from customers who are new to Frontier. Mm-hmm. They're not our copper conversions. You know, you can get back into that because our copper penetration's only 10-ish%. Even if you got every single one of those customers, you know, that's a quarter of your 45% terminal penetration. That's kinda the pace of penetration that we're seeing. We get some nice copper to fiber movers, but the vast majority of it is people that are unhappy with their cable provider. When we get there with fiber, they're choosing the superior product. Okay. Now, let's turn to EBITDA. You know, I thought John Stratton presented some interesting stats on your Q4 call. Where basically he said if we look at the EBITDA contribution from our, I think it was our 2020 to 2022 builds, it was only like $10 million. It was, you know, a remarkably low number, you know, suppressed because of SAC and the relatively low penetration rate you're starting with. But he described how over time, as those mature, the EBITDA contribution, you know, really inflates at a pretty dramatic rate. So it sounds like, you know, as your build pace starts to level out and your SAC starts to level out, that we should expect to see some really nice increases from latent, we'll call it latent EBITDA in the business. Yep. Is that a fair characterization? It's, it's exactly fair, and that's one of the reasons we put that slide in the earnings deck and John talked through it because I do think one of the misunderstandings about the business is we've built these, call it, 2 million passings in the last two years, 2021 and 2022. And we earned basically no EBITDA from that 2 million passings last year because of the timing of the build, but also in your first year or two of the build, so much of your EBITDA is consumed by the subscriber acquisition costs. Mm-hmm. But once you're past that big hump of the build and the initial penetration, and given that the penetration is relatively predictable in the way that I described within a tight band, you can almost model out exactly when those passings start to release EBITDA. So we've said, you know, it's at least several hundred million dollars, just in the next year or two. And then eventually, when it gets to terminally penetrated, it's, I think it's between six and seven hundred million dollars, using some relatively conservative assumptions. So, we're very confident that the fiber we put in the ground will continue, will accelerate, the release of EBITDA in a very linear way. Then, you know, your cost efficiency initiatives have also really helped the bottom line. I mean, it's impressive the degree to which you've outperformed your targets and kinda pulled forward the deadlines for hitting them. How much gas is left in the tank there? I think there's a lot of gas left in the tank. One of the fun things about a cost reduction program, if you can call it cost reduction program, it's fun, but one of the fun things are that you get better and better at it, and they generate momentum throughout the business. Mm-hmm. So early on, a lot of kinda there was a lot of skepticism internally and externally around, "Well, this is a company that's been bankrupt. They've probably been stripped to the bone. There's no cost improvement opportunities." But because we finally had the balance sheet to be able to invest in things like automation and digitization and self-service, we've unlocked huge parts of our cost structure to be able to radically downsize the cost by simplifying the business. And I've given a lot of examples on front-end productivity of dispatch where we used to just send people out with non-productive dispatches. We're much tighter on our operations now. We're only gonna roll a truck if it's absolutely needed. We're gonna do remote diagnostics and troubleshooting without rolling the truck whenever possible. Mm-hmm. Call centers are another example where we've invested in self-service. We've invested in chat capabilities, chatbot that's driven by AI. We talk about call volumes being down 30% in the last two years, even though our total number of customers have grown. So that's another area we've. I think we're in the early innings of our simplification program. And we've made a lot of progress in the back office. I've talked about. We're using AI in a lot of parts of our back office now, something as simple as payment processing where we can process payments more quickly, more efficiently, using AI than we formerly had people manually trying to connect checks to accounts. And so I think, you know, number one, appreciate the compliment that we initially went out with $250 million of cost savings by the end of 2024. We're now at $500 million by the end of 2023. So we've more than doubled it from our initial Investor Day presentation two years ago. We're a year ahead of plan there. And I think there's additional gas left in the tank for future years. One of the things that's not anywhere in the cost savings program yet, but I think eventually is a big cost driver to getting to the mid-40s% EBITDA margin over time is copper decommissioning. Yep. I'd say we're in the early stages there. It hadn't been a big focus of our capital efforts 'cause we're so focused on building and selling fiber. Eventually, as we build fiber to an area, as we're able to decommission incrementally and then in big step changes, that'll be a big value unlock to get to the mid-40s EBITDA margin that we think is at least a minimum for our eventual steady state. What sort of timeframe is involved when you think about, you know, initially deploying fiber to market versus being able to decommission copper? I mean, is that an eight-year process, a 10-year process? Yeah. I'd call it a three-to-five-year process. A lot of it. That quick. A lot of it depends on your organizational capability and capacity to undertake multiple projects at the same time. It also depends on some regulatory timing that's a bit outside of your control. But once we get to an area, and are able to focus on migrating the customers to fiber and giving them alternative products to the copper that we're gonna decommission, I'd call it a three to five-year timeframe. Okay. That, that's much faster than some of your peers talk about. Good to hear. The consumer business probably gets 95% of the attention. Commercial's 45% of your revenue. So let's talk about that for a bit. I think your growth rate there, you know, it's improved quite a bit, much more than I would've expected. I think fiber to tower has been a key driver of that. So maybe can you update us on where things stand in terms of number of towers, you know, what you've got on the horizon? Any details on that? Yeah. So, business and wholesale has been a bright spot. We always knew it would lag the consumer business a bit because of the amount of capital and the amount of focus we had on the consumer business as our first growth engine. But what we said on the last call was the SMB business has really become our second growth engine. So significant year-over-year customer growth, significant revenue growth in terms of fiber. And, it's really come to life in a way that will power business and wholesale combined. To put that in context, the last two quarters, we've actually grown fiber revenue in business and wholesale about 6% each in the last two quarters. Copper still declined in excess of that, but we've limited the decline in the total business and wholesale to about 1% in the last two quarters. That's a big change from a business that kinda macro-wise has shrunk much more than that. And even in our own business, as recently as a year or two ago, was shrinking at kinda mid to high single digits. So we're on the right trajectory there. And I think we're on a good path to stabilizing overall business and wholesale by the end of this year. And then, you know, stability or growth in future years. So, you mentioned fiber- to- the- tower. Let me answer that directly. We've now signed agreements with all four major wireless carriers. Mm-hmm. We're in different stages of build for each of those. We think that's a real big growth opportunity 'cause if you just think the amount of fiber that we're putting into ground in our integrated build plan, we are going to at least double, if not triple, the amount of towers that we pass just by virtue of this integrated build plan. So when we're the most economic choice for our carrier customers and we have fiber very close to them, and now we have renegotiated contracts that gives us a real fair chance of winning on our footprint, we're very optimistic that that's a big growth engine for us as well. Okay. What sort of CapEx have you been putting behind, you know, business and wholesale to help drive this growth? Yeah. We haven't disclosed the specific business and wholesale CapEx growth, but they're very high return and success-based CapEx investments. And so we won't build it unless it is kinda in the same mid- to high-teens IRR that our consumer build CapEx dollars are returning. Mm-hmm. Almost all of our business and wholesale investments are at the top end of that. Okay. Okay. And importantly, they're contracted for long periods of time. I mean, that's one difference in that if business and wholesale tends to have call it five to seven-year contracts, particularly wholesale at the long end of that. And so that's investment we love making upfront to not only get that seven-year term, but then you have a real good chance of renewal at the end of that term. So a lot of times these are 15 year-20-year contracts. SMB has been a real focus for you too. When should we start to see, you know, SMB fiber broadband adds exceed your copper losses? We've been right there for the last few quarters. I think we've grown marginally in SMB. You know, I think that will continue because similar to consumer, it took a few quarters of consumer for our fiber growth engine to offset the copper declines. Now I think we've grown our total broadband net adds in four, six quarters in a row. It's been more than a year. I think we're right at that precipice now in business. Mm-hmm. And once we hit it, should continue to grow fiber in excess of copper deactivations. Okay. You know, I wanna make sure that we hit on the balance sheet, which is, again, another topic that I get a lot of questions on. Your leverage ratio quarter end was about 3.7. I think you've talked about mid-threes target, but you're willing to go above that during some of the build phase. You've also said you're unwilling to issue equity at anything like current levels. So I just wanna confirm, current stock price, current circumstances, equity issuances, or equity-linked instruments are off the table from a financing perspective? Yeah. I think as long as we believe our equity's undervalued, it's not part of the discussion. Okay. Do you think you can deploy fiber to your targeted homes over the coming years without your leverage ratio getting to an uncomfortable level? We do. Yeah. We've said, I think you hit it right. We've said mid-threes is the appropriate leverage target for the long term. We'd be comfortable going above that for a period of time during the build, once our EBITDA was growing again. And this quarter was the first quarter, and I think more than five years that our EBITDA grew year- over- year. We expect the full year to grow over last year. And so when you're in a growing EBITDA business and can take on some additional leverage, that relieves some pressure. So, we'll continue to manage the balance sheet in a conservative way. We'd be comfortable going above that long-term target for a period of time once we finish building. The business generates a lot of cash, and we would deleverage appropriately. Okay. Are you willing to share what you view as a sort of maximum prudent leverage ratio or when you think you might peak? You know, I think that will depend on the pace of our build. It will depend on the pace of our EBITDA growth. So we haven't set a hard max, even though we've said, "Hey, we'd like to. We'll get back to the mid-threes, over time when we finish the build. Okay. A lot of discussion in the market about securitizations or asset-backed financing. Is that something that you think might be appropriate for, for Frontier? And how do you think about the puts and takes there? Yeah. I think we've been very encouraged by fiber to the home as an emerging digital infrastructure asset class. There've been now, I think, five or six ABS-backed transactions in the space. Some of them pure fiber to the home. Some of them, more kinda contracted, MDU type, arrangements. But I think in general, as investors get more comfortable with fiber to the home as a asset-backed asset class, that's good for people like Frontier who have a lot of attractive fiber assets, and so we view that in an encouraging way. Okay. Yeah. I remember in the past you've talked about the potential to sell off some non-core assets. I think you've sold off your CPE business at some point, maybe some real estate. Anything left that we should be aware of? Yeah. We still have a lot of real estate that we're actively looking to market. We have sold a good chunk. We haven't disclosed a specific dollar amount, but we've sold a significant amount of real estate as part of our business simplification, as part of our return to work. We've returned employees to many, many fewer offices than we entered the pandemic in 2020. We've looked to monetize parts of central office space, and one of the great things about fiber is it takes up a lot less real estate in central offices than copper did. When you go into a CO, you may have three or four floors of copper racks. Mm-hmm. The equivalent fiber rack would just be maybe 15 feet in the corner of one floor. So we've done some creative things with our central offices to not only exit them and maybe lease back just a tiny portion of them, but also monetize it for other customers who are looking to get closer to their end customers. Mm-hmm. We announced last year a, I think, innovative deal with AT&T to use our central offices as edge co-location facilities, and we're in the early stages of that, so we'll continue to look for creative ways to either sell our real estate or monetize it, given it's a very unique asset that's close to customers, and a really good asset for hyperscalers or other carriers. Okay. You know, in the minute and a little bit of time we have left, I wanna hit on wireless, you know. You know, your primary competitors, the cable companies, are pushing wireless as a key priority. You've been clear that it's not something you think is important for Frontier today. I guess when you look at the customers you're taking in from cable, I assume you survey some of them, do you notice a difference in terms of who's coming in as to whether they took cable wireless or didn't? Or is it fairly even? I think it's fairly even. You know, in relation to your question of would you do an MVNO, and that's something you all have talked about before, as we look at our customer base and our customer growth trajectory, we continue to look for: are there two proof points that would make us want to negotiate an MVNO? One, does it demonstrably reduce churn? And the answer so far for us is no, in that we've had kinda record-level low churn even without a wireless option. Or two, would it help accelerate our gross add trajectory, if you had it? And the answer to that again is not yet, in that we just had a record quarter and have had, you know, four, six record quarters in a row without an MVNO. If either of those things change, we said before we could pivot quickly either through one of the industry consortiums or, more likely just because of our scale and our three million-plus customers, we could negotiate an MVNO directly with one of the carriers. But we haven't seen the proof points that would all want us, that would make us want to allocate some capital there when the returns of building fiber are so positive. And number two, have the management distraction away from the core strategy of building fiber and selling fiber. Okay. You know, we got just under a minute left, so maybe I'll ask you a closing question. Good. You know, it's been, you know, just about two years that you've been at Frontier. You know, as you reflect on your time at the company, you know, where do you think you guys have outperformed the most versus what you thought you could achieve, and what's been most challenging? And with respect to the challenges, you know, maybe talk about your level of confidence in addressing them. Yeah. I think we've outperformed in almost every dimension. If I think back to our 2021 Investor Day, we scaled our build very fast, very well right out of the gates in a way that I think preserved market structure in a lot of the markets we were in. I think we rebuilt trust with customers very quickly with our new customer service initiatives. Our NPS is up more than 30 points in the last year. Frontier went from one of the more hated brands to kind of on par with our peers, which is a big accomplishment, just in two years. And then our sales engine has spun up quite nicely. Again, record net adds in the last five or six quarters, record penetration this most recent quarter. So I'm really happy with all four dimensions of the strategy, and not to mention the cost simplification that we talked about that's ahead of plan. In terms of the challenges, I think I bucket most of them in the macroeconomy. So dealing with inflation, trying to offset the impacts of inflation on our build, in a way that was, you know, we were well-protected but not immune. But again, I talked through all the different elements of now I think we have a diversity of build. We've front-end loaded inventory in a way that protects our cost per location. We've done the pre-work required to, that we'll consume over the next few years. And then we've gotten even more creative from an engineering perspective to be able to take cost out of the system and maintain that roughly $1,000 per location in the program. I think we're well on track to achieve, you know, everything that we set out to achieve and look forward to a good year. That's great. Scott, thanks so much for being here. Yeah. Thanks, Nick. Bye. Bye.