Press release

Consolidated Communications Reports Record Fiber Adds and Third Quarter 2022 Results

0
Sponsored by Businesswire

Consolidated Communications Holdings, Inc. (Nasdaq: CNSL) (the “Company” or “Consolidated”), a top 10 fiber provider in the U.S., today reported results for the third quarter 2022.

“We achieved another record quarter with 12,100 fiber subscriber additions and are on track to complete at least 400,000 fiber location upgrades this year and reach 1 million total fiber locations,” said Bob Udell, chief executive officer at Consolidated Communications. “We remain committed to our five-year plan to bring FttP to 70% of our addressable market. Fiber is our future and Fidium is bringing meaningful benefits to consumers and communities as we deliver an industry-leading customer experience.”

“In September, we closed on the sale of our wireless investments for $490 million in gross proceeds to fund our fiber expansion,” added Udell. “We are executing on our growth plan and managing the build timeline and schedule well while working to secure new federal, state and local broadband partnership opportunities.”

Third Quarter 2022 Highlights and Results (compared to third quarter 2021)

  • Revenue totaled $296.6 million, generating Adjusted EBITDA of $97.2 million.
  • Consumer fiber revenue grew approximately 40%, driven by more than 3x consumer fiber net adds and increased ARPU.
  • Commercial data services revenue was $56.8 million, down 1.3%.
  • Carrier data-transport revenue was $33.9 million, up 1.0%.
  • Subsidy revenue was $7.2 million, a decline of $10.1 million, primarily reflecting CAF II step down and transition to the Rural Digital Opportunity Fund (RDOF).
  • Total committed capital expenditures were $139.9 million driven by 116,000 fiber upgrades.

Operating expenses increased $7.5 million primarily due to marketing expenses related to the expansion of the Company’s consumer fiber product and increased utility and fuel costs coupled with the non-recurrence of certain property tax rebates received in the third quarter of 2021.

Net interest expense was $32.1 million, a decrease of $11.1 million compared to a year ago, primarily as a result of non-cash interest of $10.9 million on the Searchlight note, which was converted to perpetual preferred stock in conjunction with the second stage closing of its investment in December 2021. Notwithstanding the heightened interest rate environment, the Company is well positioned with 77% of its total debt at a fixed rate. At Sept. 30, 2022, the weighted average cost of debt was 6.20%.

Cash distributions from the Company’s wireless partnerships totaled $5.5 million, compared to $11.1 million a year ago, primarily due to Verizon’s accelerated capital investments in the second quarter which impacted the Company’s third quarter distributions.

Loss from continuing operations was ($7.3 million) compared to ($13.1 million) in the prior year. Net loss per share from continuing operations was ($0.15) compared to ($0.14) in the prior year. Adjusted diluted net income (loss) per share excludes certain items as outlined in the table provided in this release. Adjusted diluted net income (loss) per share from continuing operations was ($0.13) compared to $0.09 a year ago.

Adjusted EBITDA was $97.2 million, compared to $127.4 million in the prior year.

Asset and Investment Sales

On Sept. 13, 2022, the Company completed the sale of its limited partnership interests in five wireless partnerships to Cellco Partnership, d/b/a Verizon Wireless, for aggregate gross proceeds of $490 million. The proceeds from the sale will be invested in the business and used to support the Company’s Fiber to the Premises (FttP) broadband growth plan. The sale is being treated as discontinued operations within the financial statements for all comparable periods. Upon closing the transaction, the Company recognized a pre-tax gain on the sale of $389.9 million.

On Mar. 3, 2022, Consolidated announced an agreement to sell substantially all of its Kansas City assets. The Company currently expects net cash proceeds of approximately $90 million for the sale, subject to certain purchase price adjustments, closing conditions and customary regulatory approvals. The transaction is expected to close by year-end 2022. Additionally, in the quarter the Company recognized an impairment loss of $5.2 million due to changes in net assets held for sale.

The Company continues to actively review its portfolio for further monetization opportunities in support of its growth plan. During the quarter Consolidated closed and recognized a pre-tax gain and proceeds from the sale of certain non-strategic communication towers and related equipment totaling $19.2 million.

Capital Structure

As of Sept. 30, 2022, total liquidity was approximately $686 million, including cash and short-term investments of approximately $462 million and $224 million of available borrowing capacity on the revolving credit facility. The net leverage ratio for the trailing 12 months ended Sept. 30, 2022, was 3.82x. The Company has no maturities until 2027.

2022 Outlook

Consolidated Communications reaffirmed its guidance for the full-year 2022.

  • Adjusted EBITDA is expected to be in a range of $400 million to $410 million.
  • Capital expenditures are expected to be in a range of $565 million to $585 million.
  • Cash interest expense is expected to be in a range of $125 million to $129 million.
  • Cash income taxes are expected to be in a range of $12 million to $17 million.

Conference Call Information

Consolidated’s third quarter earnings conference call will be webcast on Nov. 1 at 8:30 am ET. The webcast and materials will be available on Consolidated’s Investor Relations website at http://ir.consolidated.com. The live conference call dial-in number for analysts and investors is 888-440-5977, conference ID 8956400.

About Consolidated Communications

Consolidated Communications Holdings, Inc. (NASDAQ: CNSL) is dedicated to moving people, businesses and communities forward by delivering the most reliable fiber communications solutions. Consumers, businesses and wireless and wireline carriers depend on Consolidated for a wide range of high-speed internet, data, phone, security, cloud and wholesale carrier solutions. With a network spanning more than 57,500 fiber route miles, Consolidated is a top 10 U.S. fiber provider, turning technology into solutions that are backed by exceptional customer support. Learn more at consolidated.com.

Use of Non-GAAP Financial Measures

This press release, as well as the conference call, includes disclosures regarding “EBITDA,” “adjusted EBITDA,” “total net debt to last 12 month adjusted EBITDA ratio” or “Net debt leverage ratio,” and “adjusted diluted net income (loss) per share,” all of which are non-GAAP financial measures and described in this section as not being in compliance with Regulation S-X. Accordingly, they should not be construed as alternatives to net cash from operating or investing activities, cash and cash equivalents, cash flows from operations, net income or net income per share as defined by GAAP and are not, on their own, necessarily indicative of cash available to fund cash needs as determined in accordance with GAAP. In addition, not all companies use identical calculations, and the non-GAAP financial measures may not be comparable to other similarly titled measures of other companies. A reconciliation of the differences between these non-GAAP financial measures and the most directly comparable financial measures presented in accordance with GAAP is included in the tables that follow.

Adjusted EBITDA is comprised of EBITDA, adjusted for certain items as permitted or required by the lenders under our credit agreement in place at the end of each quarter in the periods presented. The tables that follow include an explanation of how adjusted EBITDA is calculated for each of the periods presented with the reconciliation to net income. EBITDA is defined as net earnings before interest expense, income taxes, depreciation and amortization on a historical basis.

We present adjusted EBITDA for several reasons. Management believes adjusted EBITDA is useful as a means to evaluate our ability to fund our estimated uses of cash (including interest on our debt). In addition, we have presented adjusted EBITDA to investors in the past because it is frequently used by investors, securities analysts and other interested parties in the evaluation of companies in our industry, and management believes presenting it here provides a measure of consistency in our financial reporting. Adjusted EBITDA, referred to as Available Cash in our credit agreement, is also a component of the restrictive covenants and financial ratios contained in our credit agreement that requires us to maintain compliance with these covenants and limit certain activities, such as our ability to incur debt. The definitions in these covenants and ratios are based on adjusted EBITDA after giving effect to specified charges. In addition, adjusted EBITDA provides our board of directors with meaningful information, with other data, assumptions and considerations, to measure our ability to service and repay debt. We present the related “total net debt to last 12 month adjusted EBITDA ratio” or “Net debt leverage ratio” principally to help investors understand how we measure leverage and facilitate comparisons by investors, security analysts and others. This ratio differs in certain respects from the similar ratio used in our credit agreement against comparable measures of certain other companies in our industry. These measures differ in certain respects from the ratios used in our senior notes indenture.

These non-GAAP financial measures have certain shortcomings. In particular, adjusted EBITDA does not represent the residual cash flows available for discretionary expenditures, since items such as debt repayment and interest payments are not deducted from such measure. In addition, the ratio of total net debt to last 12-month adjusted EBITDA is subject to the risk that we may not be able to use the cash on the balance sheet to reduce our debt on a dollar-for-dollar basis. Management believes this ratio is useful as a means to evaluate our ability to incur additional indebtedness in the future.

We present the non-GAAP measure “adjusted diluted net income (loss) per share” because our net income (loss) and net income (loss) per share are regularly affected by items that occur at irregular intervals or are non-cash items. We believe that disclosing these measures assists investors, securities analysts and other interested parties in evaluating both our company over time and the relative performance of the companies in our industry.

Forward-Looking Statements

Certain statements in this communication are forward-looking statements and are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. These forward-looking statements reflect, among other things, our current expectations, plans, strategies, and anticipated financial results. There are a number of risks, uncertainties, and conditions that may cause our actual results to differ materially from those expressed or implied by these forward-looking statements. These risks and uncertainties include a number of factors related to our business, including the uncertainties relating to the impact of the novel coronavirus (COVID-19) pandemic on the Company’s business, results of operations, cash flows, stock price and employees; the possibility that any of the anticipated benefits of the strategic investment from Searchlight Capital Partners, L.P. or our refinancing of outstanding debt, including our senior secured credit facilities, or of the sales of the limited partnership interests will not be realized;; the anticipated use of proceeds of the strategic investment or the sales of the limited partnership interests; the outcome of any legal proceedings that may be instituted against the Company or its directors; economic and financial market conditions generally and economic conditions in our service areas; various risks to the price and volatility of our common stock; changes in the valuation of pension plan assets; the substantial amount of debt and our ability to repay or refinance it or incur additional debt in the future; our need for a significant amount of cash to service and repay the debt restrictions contained in our debt agreements that limit the discretion of management in operating the business; regulatory changes, including changes to subsidies, rapid development and introduction of new technologies and intense competition in the telecommunications industry; risks associated with our possible pursuit of or failure to consummate acquisitions or dispositions; system failures; cyber-attacks, information or security breaches or technology failure of ours or of a third party; losses of large customers or government contracts; risks associated with the rights-of-way for the network; disruptions in the relationship with third party vendors; losses of key management personnel and the inability to attract and retain highly qualified management and personnel in the future; changes in the extensive governmental legislation and regulations governing telecommunications providers and the provision of telecommunications services; new or changing tax laws or regulations; telecommunications carriers disputing and/or avoiding their obligations to pay network access charges for use of our network; high costs of regulatory compliance; the competitive impact of legislation and regulatory changes in the telecommunications industry; liability and compliance costs regarding environmental regulations; risks associated with discontinuing paying dividends on our common stock; and the potential for the rights of our series A preferred stock to negatively impact our cash flow. A detailed discussion of these and other risks and uncertainties that could cause actual results and events to differ materially from such forward-looking statements are discussed in more detail in our filings with the Securities and Exchange Commission (“SEC”), including our reports on Form 10-K and Form 10-Q. Many of these circumstances are beyond our ability to control or predict. Moreover, forward-looking statements necessarily involve assumptions on our part. These forward-looking statements generally are identified by the words “believe,” “expect,” “anticipate,” “estimate,” “project,” “intend,” “plan,” “should,” “may,” “will,” “would,” “will be,” “will continue” or similar expressions. Such forward-looking statements involve known and unknown risks, uncertainties and other factors that may cause actual results, performance or achievements of the Company and its subsidiaries to be different from those expressed or implied in the forward-looking statements. All forward-looking statements attributable to us or persons acting on our behalf are expressly qualified in their entirety by the cautionary statements that appear throughout this communication. Furthermore, forward-looking statements speak only as of the date they are made. Except as required under the federal securities laws or the rules and regulations of the SEC, we disclaim any intention or obligation to update or revise publicly any forward-looking statements. You should not place undue reliance on forward-looking statements.

Tag: [Consolidated-Communications-Earnings]

Consolidated Communications Holdings, Inc.
Condensed Consolidated Balance Sheets
(Dollars in thousands, except share and per share amounts)
(Unaudited)
 
September 30, December 31,

2022

2021

ASSETS
Current assets:
Cash and cash equivalents $

462,049

 

$

99,635

 

Short-term investments

 

110,801

 

Accounts receivable, net

115,985

 

133,362

 

Income tax receivable

 

1,134

 

Prepaid expenses and other current assets

63,730

 

56,831

 

Assets held for sale

92,822

 

26,052

 

Total current assets

734,586

 

427,815

 

 
Property, plant and equipment, net

2,175,557

 

2,019,444

 

Investments

10,283

 

10,799

 

Goodwill

929,570

 

1,013,243

 

Customer relationships, net

50,801

 

73,939

 

Other intangible assets

10,557

 

10,557

 

Assets of discontinued operations

 

98,779

 

Other assets

57,626

 

58,116

 

Total assets $

3,968,980

 

$

3,712,692

 

 
LIABILITIES, MEZZANINE EQUITY AND SHAREHOLDERS’ EQUITY
Current liabilities:
Accounts payable $

30,445

 

$

40,953

 

Advance billings and customer deposits

48,466

 

53,028

 

Accrued compensation

65,722

 

68,272

 

Accrued interest

35,139

 

17,819

 

Accrued expense

108,867

 

97,417

 

Current portion of long-term debt and finance lease obligations

10,278

 

7,959

 

Liabilities held for sale

4,611

 

97

 

Total current liabilities

303,528

 

285,545

 

 
Long-term debt and finance lease obligations

2,125,994

 

2,118,853

 

Deferred income taxes

268,962

 

194,458

 

Pension and other post-retirement obligations

190,814

 

214,671

 

Other long-term liabilities

46,901

 

62,789

 

Total liabilities

2,936,199

 

2,876,316

 

 
Series A Preferred Stock, par value $0.01 per share; 10,000,000 shares authorized, 456,343 and 434,266 shares outstanding as of September 30, 2022 and December 31, 2021, respectively; liquidation preference of $466,695 and $436,943 as of September 30, 2022 and December 31, 2021, respectively

318,328

 

288,576

 

 
Shareholders’ equity:
Common stock, par value $0.01 per share; 150,000,000 shares authorized, 115,395,668 and 113,647,364 shares outstanding as of September 30, 2022 and December 31, 2021, respectively

1,154

 

1,137

 

Additional paid-in capital

729,186

 

740,746

 

Retained earnings (accumulated deficit)

23,272

 

(141,599

)

Accumulated other comprehensive loss, net

(46,639

)

(59,571

)

Noncontrolling interest

7,480

 

7,087

 

Total shareholders’ equity

714,453

 

547,800

 

Total liabilities, mezzanine equity and shareholders’ equity $

3,968,980

 

$

3,712,692

 

Consolidated Communications Holdings, Inc.
Condensed Consolidated Statements of Operations
(Dollars in thousands, except per share amounts)
(Unaudited)
 
 
Three Months Ended Nine Months Ended
September 30, September 30,

2022

2021

2022

2021

 
Net revenues $

296,619

 

$

318,584

 

$

895,287

 

$

963,753

 

Operating expenses:
Cost of services and products

141,226

 

142,507

 

413,009

 

431,797

 

Selling, general and administrative expenses

72,837

 

64,100

 

221,632

 

199,948

 

Loss on impairment of assets held for sale

5,208

 

5,704

 

131,698

 

5,704

 

Gain on disposal of assets

(19,163

)

 

(19,163

)

 

Depreciation and amortization

75,659

 

73,765

 

220,552

 

225,455

 

Income (loss) from operations

20,852

 

32,508

 

(72,441

)

100,849

 

Other income (expense):
Interest expense, net of interest income

(32,071

)

(43,176

)

(91,742

)

(137,022

)

Loss on extinguishment of debt

 

 

 

(17,101

)

Change in fair value of contingent payment rights

 

(2,205

)

 

(99,619

)

Other income, net

2,984

 

2,325

 

9,425

 

4,491

 

Loss from continuing operations before income taxes

(8,235

)

(10,548

)

(154,758

)

(148,402

)

Income tax expense (benefit)

(978

)

2,552

 

(17,814

)

(1,860

)

Loss from continuing operations

(7,257

)

(13,100

)

(136,944

)

(146,542

)

 
Discontinued operations:
Income from discontinued operations

4,744

 

11,020

 

22,628

 

31,815

 

Gain on sale of discontinued operations

389,905

 

 

389,905

 

 

Income tax expense

94,715

 

2,401

 

99,973

 

6,926

 

Income from discontinued operations

299,934

 

8,619

 

312,560

 

24,889

 

 
Net income (loss)

292,677

 

(4,481

)

175,616

 

(121,653

)

Less: dividends on Series A preferred stock

10,352

 

 

29,752

 

 

Less: net income attributable to noncontrolling interest

75

 

240

 

393

 

523

 

 
Net income (loss) attributable to common shareholders $

282,250

 

$

(4,721

)

$

145,471

 

$

(122,176

)

 
Net income (loss) per common share – basic and diluted
Loss from continuing operations $

(0.15

)

$

(0.14

)

$

(1.45

)

$

(1.77

)

Income from discontinued operations

2.60

 

0.09

 

2.72

 

0.30

 

Net income (loss) per basic and diluted common shares attributable to common shareholders $

2.45

 

$

(0.05

)

$

1.27

 

$

(1.47

)

Consolidated Communications Holdings, Inc.
Condensed Consolidated Statements of Cash Flows
(Dollars in thousands)
(Unaudited)
 
 
Three Months Ended Nine Months Ended
September 30, September 30,

2022

2021

2022

2021

OPERATING ACTIVITIES
Net income (loss) $

292,677

 

$

(4,481

)

$

175,616

 

$

(121,653

)

Adjustments to reconcile net income (loss) to net cash provided by operating activities:
Depreciation and amortization

75,659

 

73,765

 

220,552

 

225,455

 

Deferred income taxes

81,775

 

4,949

 

69,949

 

4,975

 

Cash distributions from wireless partnerships in excess of earnings

3,957

 

107

 

5,618

 

1,345

 

Pension and post-retirement contributions in excess of expense

(4,830

)

(11,755

)

(23,991

)

(29,968

)

Non-cash, stock-based compensation

2,939

 

3,217

 

7,971

 

7,160

 

Amortization of deferred financing costs and discounts

1,849

 

4,472

 

5,475

 

13,121

 

Non-cash interest expense on convertible security interest

 

8,230

 

 

24,334

 

Loss on extinguishment of debt

 

 

 

17,101

 

Loss on change in fair value of contingent payment rights

 

2,205

 

 

99,619

 

Loss on impairment of assets held for sale

5,208

 

5,704

 

131,698

 

5,704

 

Gain on sale of partnership interests

(389,905

)

 

(389,905

)

 

Gain on disposal of assets

(19,163

)

 

(19,163

)

 

Other adjustments, net

(162

)

(99

)

(558

)

3,632

 

Changes in operating assets and liabilities, net

26,622

 

23,834

 

34,869

 

45,154

 

Net cash provided by operating activities

76,626

 

110,148

 

218,131

 

295,979

 

INVESTING ACTIVITIES
Purchase of property, plant and equipment, net

(164,045

)

(144,292

)

(496,959

)

(339,488

)

Purchase of investments

 

(64,996

)

(39,959

)

(154,963

)

Proceeds from sale of assets

19,463

 

37

 

21,257

 

126

 

Proceeds from business dispositions

 

 

26,042

 

 

Proceeds from sale and maturity of investments

25,006

 

 

151,560

 

1,198

 

Proceeds from sale of partnership interests

489,567

 

 

489,567

 

 

Net cash provided by (used in) investing activities

369,991

 

(209,251

)

151,508

 

(493,127

)

FINANCING ACTIVITIES
Proceeds from bond offering

 

 

 

400,000

 

Proceeds from issuance of long-term debt

 

 

 

150,000

 

Payment of finance lease obligations

(2,587

)

(1,529

)

(7,111

)

(4,465

)

Payment on long-term debt

 

 

 

(397,000

)

Payment of financing costs

 

 

 

(8,266

)

Share repurchases for minimum tax withholding

 

 

(114

)

 

Net cash provided by (used in) financing activities

(2,587

)

(1,529

)

(7,225

)

140,269

 

Net change in cash and cash equivalents

444,030

 

(100,632

)

362,414

 

(56,879

)

Cash and cash equivalents at beginning of period

18,019

 

199,314

 

99,635

 

155,561

 

Cash and cash equivalents at end of period $

462,049

 

$

98,682

 

$

462,049

 

$

98,682

 

Consolidated Communications Holdings, Inc.
Consolidated Revenue by Category
(Dollars in thousands)
(Unaudited)
 
 
Three Months Ended Nine Months Ended
September 30, September 30,

2022

2021

2022

2021

Consumer:
Broadband (Data and VoIP) $

69,641

$

68,604

$

203,144

$

202,340

Voice services

36,444

40,587

110,539

121,180

Video services

13,552

16,163

42,277

49,743

119,637

125,354

355,960

373,263

Commercial:
Data services (includes VoIP)

56,796

57,545

171,804

171,487

Voice services

35,484

38,446

107,598

117,264

Other

9,933

10,205

32,780

28,624

102,213

106,196

312,182

317,375

Carrier:
Data and transport services

33,878

33,556

103,626

100,775

Voice services

3,517

4,173

11,087

13,095

Other

605

375

1,350

1,161

38,000

38,104

116,063

115,031

 
Subsidies

7,187

17,264

20,304

52,068

Network access

27,277

29,923

78,336

92,641

Other products and services

2,305

1,743

12,442

13,375

Total operating revenue $

296,619

$

318,584

$

895,287

$

963,753

Consolidated Communications Holdings, Inc.
Consolidated Revenue Trend by Category
(Dollars in thousands)
(Unaudited)
 
 
Three Months Ended
Q3 2022 Q2 2022 Q1 2022 Q4 2021 Q3 2021
Consumer:
Broadband (Data and VoIP) $

69,641

$

67,592

$

65,911

$

66,983

$

68,604

Voice services

36,444

36,643

37,452

39,518

40,587

Video services

13,552

14,359

14,366

15,371

16,163

119,637

118,594

117,729

121,872

125,354

Commercial:
Data services (includes VoIP)

56,796

57,113

57,895

57,444

57,545

Voice services

35,484

35,775

36,339

37,303

38,446

Other

9,933

11,287

11,560

11,408

10,205

102,213

104,175

105,794

106,155

106,196

Carrier:
Data and transport services

33,878

36,263

33,485

32,659

33,556

Voice services

3,517

3,718

3,852

4,088

4,173

Other

605

354

391

431

375

38,000

40,335

37,728

37,178

38,104

 
Subsidies

7,187

6,534

6,583

17,671

17,264

Network access

27,277

24,846

26,213

27,846

29,923

Other products and services

2,305

3,906

6,231

7,758

1,743

Total operating revenue $

296,619

$

298,390

$

300,278

$

318,480

$

318,584

Consolidated Communications Holdings, Inc.
Schedule of Adjusted EBITDA Calculation
(Dollars in thousands)
(Unaudited)
 
Three Months Ended Nine Months Ended
September 30, September 30,

2022

2021

2022

2021

Loss from continuing operations $

(7,257

)

$

(13,100

)

$

(136,944

)

$

(146,542

)

Add (subtract):
Income tax expense (benefit)

(978

)

2,552

 

(17,814

)

(1,860

)

Interest expense, net

32,071

 

43,176

 

91,742

 

137,022

 

Depreciation and amortization

75,659

 

73,765

 

220,552

 

225,455

 

EBITDA

99,495

 

106,393

 

157,536

 

214,075

 

 
Adjustments to EBITDA (1):
Other, net (2)

6,186

 

919

 

17,754

 

11,155

 

Pension/OPEB benefit

(2,950

)

(2,207

)

(8,897

)

(7,290

)

Gain on disposal of assets

(19,163

)

 

(19,163

)

 

Loss on extinguishment of debt

 

 

 

17,101

 

Loss on impairment

5,208

 

5,704

 

131,698

 

5,704

 

Change in fair value of contingent payment right

 

2,205

 

 

99,619

 

Non-cash compensation (3)

2,939

 

3,217

 

7,971

 

7,160

 

Adjusted EBITDA from continuing operations

91,715

 

116,231

 

286,899

 

347,524

 

Investment distributions from discontinued operations

5,478

 

11,127

 

25,023

 

33,160

 

Adjusted EBITDA $

97,193

 

$

127,358

 

$

311,922

 

$

380,684

 

 
Notes:
(1) These adjustments reflect those required or permitted by the lenders under our credit agreement.
(2) Other, net includes income attributable to noncontrolling interests, acquisition and non-recurring related costs, and certain miscellaneous items.
(3) Represents compensation expenses in connection with our Restricted Share Plan, which because of the non-cash nature of the expenses are excluded from adjusted EBITDA.
Consolidated Communications Holdings, Inc.
Reconciliation of Net Loss to Adjusted EBITDA Guidance
(Dollars in millions)
(Unaudited)
Year Ended
December 31, 2022
Range
Low High
Net loss $

(151

)

$

(138

)

Add:
Income tax benefit

(15

)

(14

)

Interest expense, net

125

 

122

 

Depreciation and amortization

293

 

290

 

EBITDA

252

 

260

 

Adjustments to EBITDA (1):
Other, net (2)

23

 

25

 

Loss on impairment

126

 

126

 

Pension/OPEB benefit

(11

)

(11

)

Non-cash compensation (3)

10

 

10

 

Adjusted EBITDA $

400

 

$

410

 

Notes:
(1) These adjustments reflect those required or permitted by the lenders under our credit agreement.
(2) Other, net includes income attributable to noncontrolling interests, cash distributions less equity earnings from our investments, dividend income, acquisition and non-recurring related costs and certain miscellaneous items.
(3) Represents compensation expenses in connection with our Restricted Share Plan, which because of the non-cash nature of the expenses are excluded from adjusted EBITDA.
Consolidated Communications Holdings, Inc.
Total Net Debt to LTM Adjusted EBITDA Ratio
(Dollars in thousands)
(Unaudited)
 
September 30,

2022

Summary of Outstanding Debt:
Term loans, net of discount $9,108 $

990,767

 

6.50% Senior secured notes due 2028

750,000

 

5.00% Senior secured notes due 2028

400,000

 

Finance leases

28,975

 

Total debt as of September 30, 2022

2,169,742

 

Less deferred debt issuance costs

(33,470

)

Less cash on hand

(462,049

)

Total net debt as of September 30, 2022 $

1,674,223

 

 
Adjusted EBITDA for the 12 months ended September 30, 2022 $

438,100

 

 
Total Net Debt to last 12 months Adjusted EBITDA

3.82

x

Consolidated Communications Holdings, Inc.
Adjusted Net Income and Net Income Per Share
(Dollars in thousands, except per share amounts)
(Unaudited)
 
Three Months Ended Nine Months Ended
September 30, September 30,

2022

2021

2022

2021

Loss from continuing operations $

(7,257

)

$

(13,100

)

$

(136,944

)

$

(146,542

)

Less: dividends on Series A preferred stock

10,352

 

 

29,752

 

 

Less: net income attributable to noncontrolling interest

75

 

240

 

393

 

523

 

Loss attributable to common shareholders from continuing operations

(17,684

)

(13,340

)

(167,089

)

(147,065

)

 
Adjustments to loss attributable to common shareholders:
Dividends on Series A preferred stock

10,352

 

 

29,752

 

 

Integration and severance related costs, net of tax

 

674

 

1,604

 

2,353

 

Loss on impairment of assets held for sale

5,208

 

5,704

 

131,698

 

5,704

 

Gain on disposition of tower assets, net of tax

(14,167

)

 

(14,167

)

 

Loss on disposition of wireless spectrum licenses, net of tax

 

 

 

2,641

 

Loss on disposition of fixed wireless, net of tax

 

 

 

3,085

 

Loss on extinguishment of debt, net of tax

 

 

 

12,639

 

Change in fair value of contingent payment rights

 

2,205

 

 

99,619

 

Non-cash interest expense for Searchlight note including amortization of discount and fees

 

10,944

 

 

32,006

 

Non-cash interest expense for swaps, net of tax

(328

)

(261

)

(932

)

(682

)

Tax impact of non-deductible goodwill

821

 

 

(11,118

)

 

Change in deferred tax rate

(644

)

 

(644

)

 

Non-cash stock compensation, net of tax

2,173

 

2,378

 

5,893

 

5,292

 

Adjusted net income (loss) from continuing operations $

(14,269

)

$

8,304

 

$

(25,003

)

$

15,591

 

Weighted average number of common shares outstanding

111,697

 

92,791

 

111,695

 

83,003

 

 
Adjusted diluted net income (loss) per common share:
Adjusted net income (loss) from continuing operations $

(0.13

)

$

0.09

 

$

(0.22

)

$

0.19

 

Adjusted income from discontinued operations excluding gain on sale of partnership interests, net of tax

0.04

 

0.09

 

0.15

 

0.30

 

$

(0.09

)

$

0.18

 

$

(0.07

)

$

0.49

 

 
Notes:
Calculations above assume a 26.07% effective tax rate for the quarter and nine months ended September 30, 2022 and 26.10% effective tax rate for the quarter and nine months ended September 30, 2021.
Consolidated Communications Holdings, Inc.
Key Operating Metrics
(Unaudited)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

September 30, June 30, March 31, December 31, September 30,

2022

2022

2022

2021

2021

Passings
Fiber Gig+ capable passings
Northern New England

531,035

 

451,414

 

341,010

 

291,921

 

217,660

 

All other markets

416,939

 

380,365

 

348,396

 

313,789

 

276,500

 

Total Fiber Gig+ capable (1)

947,974

 

831,779

 

689,406

 

605,710

 

494,160

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

DSL/Copper passings (2)
Northern New England

1,205,165

 

1,284,786

 

1,395,190

 

1,444,279

 

1,518,540

 

All other markets

602,216

 

635,428

 

663,835

 

702,098

 

737,016

 

Total DSL/Copper (2)

1,807,381

 

1,920,214

 

2,059,025

 

2,146,377

 

2,255,556

 

Total Passings

2,755,355

 

2,751,993

 

2,748,431

 

2,752,087

 

2,749,716

 

% Fiber Gig+ Coverage/Total Passings

34

%

30

%

25

%

22

%

18

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Consumer Broadband Connections
Fiber Gig+ capable
Northern New England

38,778

 

31,050

 

24,882

 

20,032

 

17,288

 

All other markets

76,820

 

72,405

 

68,930

 

66,090

 

64,251

 

Total Fiber Gig+ capable connections

115,598

 

103,455

 

93,812

 

86,122

 

81,539

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

DSL/Copper (2)
Northern New England

121,230

 

126,475

 

131,763

 

136,140

 

140,893

 

All other markets

145,084

 

151,283

 

154,575

 

162,302

 

168,229

 

Total DSL/Copper connections (2)

266,314

 

277,758

 

286,338

 

298,442

 

309,122

 

Total Consumer Broadband Connections

381,912

 

381,213

 

380,150

 

384,564

 

390,661

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Consumer Broadband Net Adds
Northern New England

2,483

 

880

 

473

 

(2,009

)

(803

)

All other markets (2)

(1,784

)

183

 

(1,327

)

(4,088

)

(2,016

)

Total Consumer Broadband Net Adds

699

 

1,063

 

(854

)

(6,097

)

(2,819

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Consumer Broadband Penetration %
Fiber Gig+ capable
Northern New England

7

%

7

%

7

%

7

%

8

%

All other markets

18

%

19

%

20

%

21

%

23

%

Total Fiber Gig+ capable

12

%

12

%

14

%

14

%

17

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

DSL/Copper (2)
Northern New England

10

%

10

%

9

%

9

%

9

%

All other markets

24

%

24

%

23

%

23

%

23

%

Total DSL/Copper (2)

15

%

14

%

14

%

14

%

14

%

Total Consumer Broadband Penetration %

14

%

14

%

14

%

14

%

14

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Consumer Broadband Revenue by Service Type ($ in thousands)
Fiber Broadband Revenue $

21,558

 

$

19,218

 

$

17,241

 

$

16,152

 

$

15,423

 

Copper and Other Broadband Revenue

48,083

 

48,374

 

48,670

 

50,831

 

53,181

 

Total Consumer Broadband Revenue by Service Type $

69,641

 

$

67,592

 

$

65,911

 

$

66,983

 

$

68,604

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Consumer Average Revenue Per Unit (ARPU)
Fiber Broadband ARPU $

65.61

 

$

64.95

 

$

63.88

 

$

64.22

 

$

64.64

 

Copper Broadband ARPU $

53.87

 

$

52.36

 

$

50.78

 

$

50.65

 

$

51.32

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Consumer Voice Connections

294,441

 

306,458

 

316,634

 

328,849

 

341,135

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Video Connections

51,339

 

55,225

 

58,812

 

63,447

 

66,971

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Fiber route network miles (long-haul, metro and FttP)

57,498

 

56,093

 

54,239

 

52,402

 

50,405

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

On-net buildings

15,715

 

15,618

 

15,446

 

14,891

 

14,625

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Notes:
(1) In Q1 2021, the Company launched a multi-year fiber build plan to upgrade 1.6 million passings by 2025 or 70% of our service area to fiber Gig+ capable services by 2025. As of September 30, 2022, 342,200 of the target 400,000 passings for 2022 were upgraded to FttP and total fiber passings were ~948,000 or 34% of the Company’s service area.
(2) The sale of the non-core Ohio operations resulted in a reduction of approximately 5,658 DSL/Copper passings and 3,560 DSL/Copper broadband connections in the first quarter of 2022. Prior period amounts have not been adjusted to reflect the sale.
As of March 31, 2022, the net assets of our Kansas City operations are classified as held for sale. The Kansas City operations, which are included in All other markets above, include approximately 137,000 passings and approximately 10% consumer broadband penetration. Amounts above have not been adjusted to reflect the pending sale.