Great. Good morning. My name is Frank Louthan. I'm a senior wireline analyst here at Raymond James, and we're kicking off the telecom portion with Frontier. Great to have Scott Beasley, CFO of Frontier. And now I've been doing this a long time. First had Frontier back 22 years ago, a company called Citizens Communications. We had at the conference back then. Glad to have you guys back here. Scott, maybe just kind of start out. When we look at the world of broadband providers, you know, you kind of stand out at consistently growing subscribers. Talk to us about what you're doing that's different than maybe the cable companies and some of the other, some of your other peers. Sure. Thanks for having us, Frank, and this is my first time at the conference, and because there are some new faces in the room, let me take a step back and just give a refresher of who Frontier is, 'cause we've- Yeah ... changed a lot in the 22 years that you've been covering us. So right now, Frontier is the largest pure-play fiber provider in the country, and three years ago, we emerged as a new public company with a brand-new board, brand-new management team, and a new strategy. A simple four-part strategy to build fiber, sell fiber, improve the customer experience, and reduce our cost structure. And in the past three years, we've made a lot of progress on each of those four dimensions. On the building fiber, we're the second-largest builder in the country. We've now passed 6.5 million fiber locations. That has us as the third-largest fiber player in the country behind AT&T and Verizon. On selling fiber, we've expanded our fiber customer base by more than 50% in the past three years. We reached the important milestone of 2 million fiber broadband customers, and we expect that to grow rapidly as we continue building fiber. On customer experience, we have invested a lot of money and a lot of time in improving the customer experience. We now have the highest NPS, Net Promoter Score, of all of the fiber players, which is the result of hard work of a lot of 13,000 of our employees that are maniacally focused on customer experience. And then on cost savings, we have doubled our initial cost savings target. We said we'd save $250 million. We actually doubled that and just passed $500 million of total cost savings since 2021. So a lot of progress operationally, and importantly, in 2023, that success translated into financial growth. We grew EBITDA for the first time in more than 10 years. And we accelerated that throughout the year. So in the fourth quarter, we grew EBITDA at a 4% rate. We've guided towards EBITDA acceleration in 2024 with 5% growth at the midpoint. And so all the investments we've made in fiber and customer experience and in cost savings are starting to pay off and translate into EBITDA growth. So yeah, we do feel like we've separated ourselves from the pack of fiber builders, and we think there's more success to come. Great. All right. Great overview. So yes, you know, again, fiber, kind of the underlying theme here and what you're doing, and particularly growing the subscribers, which is what we hear from investors and what they—the real key thing they look at. So you mentioned a lot of the things that you've done that have been different. I think the customer care is a huge change in how you've approached the business and what it was. But walk us through the different piece parts that have you growing subscribers and why you're confident that continues to happen versus, you know, maybe what some of your peers are doing and where they are. Yeah. We've been unique 'cause we've grown subscribers, at the same time, we've also grown ARPU. And so those are the two most important drivers of value in a fiber build, are ARPU and penetration, and we've been able to do both. That's why 2023 was such an important year for us because it was the first year we were able to do both. So let me walk you through customer growth on a few dimensions. We have our base fiber footprint, which was the original 3.2 million passings, and we've been able to continually grow our penetration in that base fiber footprint. Three years ago, we were in the low 40s, and we said we eventually thought we could grow to at least 45% penetration. We're now in the mid 40s, 44.5% last quarter. So that long-term goal of at least 45% is well within sight. Then on expansion markets, expansion is where we've built fiber in the last three or four years. In expansion, we've said we expect to be 12, at 12 months, expect to be 15%-20% penetrated, then at 24 months, 25%-30% penetrated, and we've met that expectation in each of our cohorts. So we've built in 2020, 2021, 2022, and 2023. We now have more than 3 million homes that we've passed, and we have the data from those homes of, and penetration, and we've been able to penetrate those exactly in line with, with our targets. You ask why. So why have we been able to successfully hit those penetration targets? I'd bucket that in a few things. First, we have a superior product. Fiber is far superior to cable, far superior to fixed wireless, far superior to our own legacy DSL product, and so as we build fiber, we expect to gain a significant amount of market share just based on the superiority of the product. Second, we have a competitive price. We have very transparent pricing to customers. We don't play games where we bring them in at ultra-low rates and then jack it up in the second or third year. We bring customers in at a competitive price and then put in place annual price increases that are understandable to customers. And then third, we've been able to supplement a superior product and a competitive price with an increasing set of value-added services. We offer whole-home Wi-Fi, YouTube TV, and other over-the-top options, technical support, security. We're in the early stages of rolling out other sets of value-added services, and so the broader we can help customers solve their technology challenges at home, and the stickier the customer relationship will be. So all of those together have resulted in really solid penetration gains. All right, great. And so you, you mentioned ARPU, you made a lot of progress in the last 12 months. We still look out, though, you're still kind of below what we would consider below market. Walk us through what are some of the things that are changing with ARPU, and, and how do you think you can, you can drive that metric for the next 12 months? Sure. So we had a lot of success in ARPU in 2023. We grew ARPU at 5%, exiting the year versus where we entered the year, so Q4 versus Q4, and it really comes down to three main buckets. The first are annual-based price increases, where we're in a broadly inflationary market, and customers understand the need for providers to pass through price increases every year to cover increasing costs. The second is speed mix upgrades. So we have a far superior product. We now offer 5 gig symmetrical in all of our locations. We eventually will offer even higher than 5 gig service. Our core network is 10-25 gig capable. And so we have a lot of customers on lower speeds that eventually will need those higher speeds, and we'll migrate them up to higher speeds. And our new customers are increasingly taking higher speeds. We have about 60% of our customers taking 1 gig or above, so that's the second big pillar of ARPU growth. And the third is value-added services that I touched on in the last question. So the three of those combined give us a lot of confidence that we'll be able to grow ARPU at least 3%-4% a year. And we also have headroom versus competitors. We're 5%-10% cheaper than competitors if you just look on an ARPU comparison basis, and so we have room to catch up to competition and then grow at that 3%-4% a year rate after that. So if I look at some of the competitors, they're also raising their pricing about 3%, at least at the low end. How long does it take to catch that up, do you think? Well, we expect at least 3%-4% a year growth this year, so I think we'll catch a portion of that ARPU headroom this year, and then over time, we expect to be at least 3%-4%. Okay, great. So, penetration, 'cause you mentioned this, there's a lot of investors look at the upfront cost for a network, but the two bigger drivers are the penetration and the ARPU. So on the penetration side, where do you think that can top out? Again, you've had a lot of success. You know, for folks who don't know, your base business was an old Fios market, so some people are familiar with. You know, historically, going back to that, you had very high penetration. Where do you think you can ultimately get that base penetration in those other markets up to? We're very confident in at least 45% penetration across our whole footprint, and we're giving confidence through a number of different data points. First, you mentioned the old Fios network. These territories were more than 50% penetrated at the time of the acquisition almost 10 years ago. Through different operational challenges, they dropped down into the low 40s, but we've been able to win back a portion of those customers with a portion still to go. So like I said, we're at almost 45% now and expect to continue growing our base footprint. An additional data point in there is we have certain base markets that are above 45% already. We disclosed more data about Dallas-Fort Worth last summer when we did the securitization there, and Dallas-Fort Worth is 46%-47% penetrated. Dallas is a strong market. Tampa is also a strong market. LA is a strong market. In all, we're improving our base penetration in each of those three legacy markets. I'd say the second part is within expansion markets, we're hitting the cadence that we need to hit to get to that 45%. Like I said, 15%-20% after one year, 25%-30% after two years, while also growing ARPU. The combination of the base penetration performance plus expansion penetration performance gives us confidence we'll be at least 45% penetrated in the full network with time. Okay, great. So, you know, a lot of things changed in the last 12 months. You mentioned the ABS funding. Let's, let's talk through how that worked, and then let's talk a little about a couple other changes. So tell us, walk us through the ABS securitization you did and, and how you see that as a funding vehicle going forward. Sure. Last August, we raised $2.1 billion of debt from securitizing roughly 600,000 passings in our Dallas market. That's only 11% of our total fiber footprint, and that deal went extremely well. It was a landmark deal. It's a first of a kind for a public fiber player in the U.S., and it was really exciting to us for three reasons. First, it provided a clear path to fully fund our fiber build. It was only a small portion of our mature fiber assets, and we raised $2.1 billion. So the implication is that with the rest of the mature fiber footprint, that provides a clear path to fully fund any needs that we still have. Secondly, it attracted a new pool of investment-grade long-term investors. ABS investors, once they dug into fiber to the home and our specific mature fiber assets, got very comfortable with the stability and the resilience of cash flows generated by mature fiber. And then third, it highlighted the value of our fiber network. We were able to raise debt at roughly $3,400 per passing, which is well below what public markets are valuing, mature fiber right now, and so it did highlight the value that mature fiber has because of its stable and resilient cash flows. We think there's additional ABS that we could issue. We've said in the long term, we wanna move towards a balanced debt structure with ABS and traditional corporate debt. We're underweight ABS now, and so we think there's more appetite for ABS, while maintaining an appropriate leverage target at the parent company. Okay, great. So also last year had some activists, you know, nosing around. You added some board members, did some other, talked about some other things to unlock value. Talk to us about how that, you know, came about and where you are with that right now. Yeah. So we, we talked about this a few weeks ago on our fourth quarter call, and there's really nothing new to report. But what we've said is this is a natural time in our evolution as a company to look to the next phase of our growth. Three years ago, the board conducted a review before implementing our fiber strategy. We eventually came out with a strategy of building to 10 million locations. Now that we have a clear line of sight to build to that 10 million fiber build goal, it's the right time for us to look ahead to see what's next. And that's why we made public that we've been executing a review of all opportunities to unlock shareholder value. That includes optimizing our operational and financing strategy, strategic partnerships, joint ventures, divestitures, mergers, and business combinations, and we'll continue to look at all those options to see where we can create shareholder value. All right, great. So we always get the question about fixed wireless, and how that, you know, and potentially impacts all these businesses. Why don't we talk about that and how that's impacted your ability to gain subscribers? When I look at this industry, and I see how competitive, you know, broadband plays out pretty consistently over the last 20-something years. Fixed wireless is slightly different than most of that experience, so talk to us about that. And then with that, why don't we bifurcate a little bit? You mentioned some of the NFL cities that you're in versus the more rural areas, and what's the difference you see in fixed wireless in those markets? Sure. We have really not seen an impact of Fixed Wireless where we have fiber, and I think that speaks to the superiority of fiber versus Fixed Wireless technology. In those markets that we talked about, I'll use Dallas as an example. When we published additional stats on our Dallas-Fort Worth market as part of the securitization, Fixed Wireless is available in almost all of that market already. These are dense metropolitan areas in DFW. Fixed Wireless is available, and during the last few years, while Fixed Wireless was becoming more readily available, we were actually growing our penetration for fiber. So I think it shows that customer demand, where fiber's available, is going to increasingly move to fiber. The speeds are better, the reliability is better, lower latency, and it's just a very different product. Now, we do think Fixed Wireless will nibble at the edges of our copper footprint. We've said, you know, Fixed Wireless has advantages versus a legacy DSL product, but Fixed Wireless is not available in all copper networks. In large part, if your copper network is in more rural areas, that's probably where Fixed Wireless coverage is most challenged. A lot of times they don't even have wireless coverage for cell phones, much less data-hungry fixed broadband connections. So, it's something we monitor closely. It has a certain niche in the market, but it's not something that we see competing directly with fiber and taking share from us. Great. I drove through an area that didn't have AM radio coverage a couple weeks ago. It's, you know, still those places exist, so - That's right. I tell the story often. I go fishing at a place in East Texas, and it's a Frontier territory, and I don't even get cell phone coverage where I'm fishing, and so there clearly would not be Fixed Wireless coverage there. And it's one of those areas that likely will get built out only with subsidy. It's in a rural area, but it's not something that Fixed Wireless reaches today. Yeah. So talk to us about JV partners, going forward. You know, you've got several tranches of builds as you build now fiber. You know, talk to us about how we should—how you're thinking about those, those last few, few tranches. We've seen some other examples of that, folks looking to, to get some capital from different sources. How does that fit in longer term or, or does it? Yeah, we've said that our initial goal is 10 million passings. We're at 6.5 million today. We're building roughly 3,500 passings per day, so every day we're creeping closer to our 10 million goal. But we have said our aspiration is to go beyond 10 million, and to go beyond 10 million, we might look to partner with people who would provide capital, whether that's for additional edge outs or builds outside of our territory, whether that's BEAD funding, whether that's incremental copper conversions beyond the 10 million. So that is part of the strategic review that the board is undertaking now to see if there's a way to create shareholder value by partnering with somebody to go beyond 10 million. Yeah. Okay. All right, great. So maybe walk us through the enterprise and the wholesale opportunity, and I think that's something, you know, you're obviously in some large markets, a lot of opportunities. I know the old management team at Frontier every year was like: "Well, this is the year we're gonna go out for that business." And then the next year, "Well, this is the year we're gonna do it." So talk to us about how you see that opportunity and the penetration you can get there and to enhance the capital you're putting in the network. Sure. I'd start by saying in business and wholesale, we are significantly outperforming the industry. So the industry does have some known headwinds, but last year our business and wholesale revenue was down about 1.5% versus industry headwinds in the mid- to high-single-digit declines. So our team is performing better than the industry... and a portion of that is because our fiber business is growing. Our fiber business actually grew 4% in 2023, and we expect that to continue to grow and offset a portion of the legacy declines. We've said we expect overall business and wholesale stability, and we've defined rough stability by ±2% growth, year-over-year. The reasons that we've outperformed the industry are a few. Let me walk through them. First, we're still a small part of the market, and therefore we're able to compete and gain share even if the market has some structural headwinds. Second, we're not as exposed to large enterprise customers, and that's where a lot of the industry headwinds are. We very intentionally shifted the strategy to focus on small to medium businesses and then the smallest portion of enterprise. Most people wouldn't even call it enterprise in their companies, but our enterprise business is large, like regional healthcare systems, governments, where we have a really high portion of on-net coverage. And then third, new management team has brought in a completely new energy, new performance systems, new incentives, and we're seeing the benefits of that new energy, and we have for the last two years. All of those factors combined give us confidence that we'll be in that rough stability in business and wholesale going forward. Are there incremental investments in sales? Are there, you know, wholesale opportunities with, you know, fiber to the tower, or we hear a lot about, you know, AI-driven wholesale fiber opportunities? Where are you seeing? How should we think about those for you? You're right. Those are two big areas for us. We have invested significantly in our sales force. The sales force had traditionally been underinvested in. We've beefed up our sales teams, brought in some great industry leaders in sales, both in enterprise and wholesale, and we're starting to see the benefits of that. And then secondly, you mentioned fiber to the tower opportunities. We are very actively involved with the major wireless carriers in helping build fiber to the tower, upgrading our network to be able to get faster and faster speeds to their towers. And so we're very pleasantly pleased with the volume of tower quoting activity and expect that to be a nice tailwind for us. Okay, great. So talk to us about the balance sheet. I mean, that's something we get questions about. As you laid out this plan for, you know, at an analyst day, and you've kind of pretty much hit it, but part of it is, you know, increasing leverage, you know, free cash flow, you know, losses going down as you're going through this. The pig's going through the snake here. So looking forward, how do we think about, you know, where the balance sheet's headed? You touched on the ABS. How should we think about target leverage over time and the path to seeing that improve naturally as the business kind of hit as you hit the business plan? Sure. First of all, we have a really strong liquidity position today. So we had $3.2 billion of liquidity at the end of last quarter. That gets us well into 2025 in terms of any liquidity needs, and then we don't have any maturities until 2027. So balance sheet is in good position today. On leverage target, our long-term target remains in the mid-threes. We have said that over a period of time during the build, we'll be above the mid-threes, but then two important factors happen. Number one, we're finally growing EBITDA again. We grew EBITDA in 2023. We expect to grow faster in 2024. We think that will accelerate going forward. So that EBITDA growth gives you a lot of coverage on leverage. And then secondly, CapEx has peaked. In 2023, we said that was peak CapEx year. I know we'll talk about CapEx in a second, but, 2023 was peak CapEx year. 2024, total CapEx will be lower, overall, in a range of $3.0 billion-$3.2 billion. But then importantly, the nature of our CapEx will shift. Fiber build CapEx is actually coming down even more, and then our success-based customer connection CapEx is increasing as a portion of our total CapEx. That's good CapEx because that's, associated with a customer order and a, and a revenue stream from the customer, and the fact that our customer connection CapEx is going up next year at a fixed cost per gross add, obviously implies that our gross adds are going higher next year. So, we're happy to spend that CapEx while overall CapEx is still coming down. Yeah. Okay, so talk. Yeah, let's go into that a little further. So you got a little ahead of yourself on some CapEx last year. You know, talk to us about how, you know, again, so how that plays out, and is there any concern about getting equipment, you know, suppliers? You were early on in the industry and locking up a lot of suppliers. I think you caught some of the larger guys by surprise by locking a lot of that up, and then they found it wasn't available. Walk us through, you know, how, where the CapEx is pacing and any concerns about reaching your goals. A few points. 2023 was our peak CapEx year. We're very confident that 2024 will come down, really for two reasons. I talked through the mix is shifting, where the fiber build CapEx is coming down, but then connection CapEx is going higher because we're driving more customer gross adds. But then also, we're in a different phase of the build now. We're in a much more of a steady state. For the last three years, we've been in a ramp-up phase. A ramp-up phase can be lumpy because you're building pre-work and central offices and middle mile before you build out to the full locations in an area. You're building up inventory. You rightly note that 2021 through early 2023 was a very difficult inventory position, where it was hard to get your hands on inventory. That shifted in 2023, and we're much more comfortable with our inventory position now, and we actually expect to work down our inventory in 2024 and use what we built up in the last 24 months. I'd say a similar trend is happening in labor, in that we're well-positioned in labor. We've got good long-term relationships with both large vendors and then smaller regional vendors. We have contract visibility for the next several years in terms of labor rates, so that gives us confidence again that 2023 was the peak CapEx year, and we'll spend less in our fiber build in 2024, while passing the same 1.3 million locations. Okay. Let's take a second. Yeah, go ahead. Just talk about having a government funding, the A-CAM, good stuff. Sure. We are an active participant in BEAD. As you all know, BEAD is making its way through the process, and so for a bill that was passed in late 2021, originally, we'd expected to see some money in 2023-2024. I think that's probably late 2024, early 2025, where you see the first programs get allocated by the states. It falls in a few different buckets. You have a few states or a handful of states that are very ready to go. They already had broadband offices up and running. They've got their requirements, and they're off and running. I think those states may allocate money by the end of this year, maybe early next year. I think some states that didn't have broadband offices already set up, those are more 2025, late 2025, early 2026 programs. We've said we're gonna be an active participant. We've said it could be as many as 3-4 million locations in our footprint could be built out with subsidy. Obviously, we wouldn't win those all. We wanna be a disciplined capital allocator in going after subsidies, but where it makes sense, we think it's an important program to connect homes to the digital economy. And then I'd say the other note I'd make on BEAD is we're very well-positioned geographically in terms of the states that we serve. The two largest states in terms of BEAD allocation were Texas and Florida. Those are two of our top three states. And so we do think that, as those programs roll through, particularly in Texas, California, Florida, we'll be an active participant there. Any other questions? All right, let me, let's go back and talk about, so you, the passings, you said you're gonna be... You're, that's kinda peaking. You're building about the same amount of homes this year as last year. What's the difference in the CapEx there as you pass those homes? What's sort of some of the puts and takes? It seems to be you're spending less, you're passing the same homes. Walk us through that. That's right. So the there's a dynamic in a build where you've got to spend money for passings before you open them all up. And so, for example, you're doing network electronic upgrades in central offices, and it could be for a central office that's eventually gonna support 50,000 customers, but you're only able to open 10,000 at a time as you build out further and further from the central office. So we call that notion pre-work, that you're spending money, you're deploying capital, but you're not utilizing all of it, and you don't really utilize all of it till you've built to that last house in the wire center. So that's one reason we've invested in pre-work, and now we're getting the benefits of that. The second dynamic is inventory. Inventory is more straightforward. We were in a big ramp phase where we ramped up inventory as we were trying to get our hands on any inventory that was available in 2021, 2022, and early 2023. So that's includes some network electronics, includes CPE, includes fiber, and as we've successfully de-risked the plan by building inventory, now we can really focus on using that inventory, and we don't need to buy at the same rate to replenish it, and so your total CapEx comes down because you're using inventory. So those are two of the big dynamics that are behind spending less money, total money in 2024, while passing the same number of locations. Okay, and maybe last thing, you know, you—one of the things last year was getting the installation machine caught up. I remember being in Tampa when FiOS was being rolled out, and it was not unusual to have two or three people at a house for two full days to get an installation done in a house built 100 years ago. What are— Yes. How have you gotten past some of those challenges, and how should we think about that? So we have some near-term programs and then some medium-term that will pay dividends in the future. So the first, we have become a lot more productive in our technician installation process. We've done a lot of great work on our network team in terms of reducing non-productive dispatches. So only dispatch a truck if you absolutely need to do it, and that gives you more time on the value-added activities of installing customers. We've redesigned our installation process to be more efficient, so you don't have two people for two days. I don't think it was that bad two years ago, but we- Sure. Yeah, that was growing pains and- Growing pains. Bad memories on my front. That was 20 years ago. Yes. But we are getting more efficient. The real unlock for installation will be self-install capabilities, and I touched on this a little on our call about 10 days ago. In our base fiber footprint, we're rapidly expanding the ability to do self-install. If you look at peers, peers may do as many as 2/3 of their installations without having to send a technician because they've already got all of the equipment necessary at the house. We're starting to scale those capabilities internally. That will accelerate as we pass new expansion markets. We include an ONT on the house that should be future-proof and good for the next 20 years of required speeds. So the second customer we get in that house, we don't need to send a technician. That's a significant reduction in our cost per gross add, but that only comes in over time as more and more of your network is covered with future-proof O&Ts. Great. All right. Thank you very much. We've got a breakout session after this, if anybody wants to join. Appreciate it. Thanks, Scott. Thank you, Frank.