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September 4, 2014

Frontier: AT&T’s CT wireline business netted $237.6M in profits

The Connecticut wireline business Frontier Communications hopes to purchase from AT&T by year’s end has been profitable for the past three years and earned $237.6 million in net income last year, Frontier revealed.

Frontier is trying to purchase the business — which offers local telephone, long distance, data and video services across the state —for $2 billion.

The 2013 profit was a major jump from 2012 and 2011, when the business earned $16.6 million and $18.8 million, respectively. The increase came as AT&T cut Connecticut expenses by more than 25 percent, or $348 million, according to the financial filing, which Frontier revealed to its investors.

AT&T’s Connecticut wireline business saw revenue tick up from $1.38 billion to $1.39 billion last year, thanks to an increase in data revenue.

The business had $1.32 billion worth of property, buildings and equipment as of Dec. 31, 2013.

Frontier said its independent auditors audited the historical financials of the AT&T business, which includes the operations of subsidiaries Southern New England Telephone Co., SNET America and Direct Broadband Satellite.

Frontier warned that the historical results of AT&T’s Connecticut business contain some assumptions and may not indicate how the business will perform on its own under Frontier ownership.

The company also revealed AT&T Connecticut’s unaudited financials for the first two quarters of 2014, which show a revenue decline of 2.5 percent, to $679.8 million, compared to the first half of 2013. Net income also fell from $80.1 million to $54.5 million over that period, according to Frontier.

The financial disclosures came shortly after Frontier announced it plans to sell $1.55 billion in debt to help fund the AT&T transaction.

Read more

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