Uniti Group Inc. ("Uniti" or the “Company”) (Nasdaq:UNIT) today
announced its results for the third quarter of 2017.
“We continue to see growing demand for
communication infrastructure products and services, and expect this
trend to grow for several years given the multi-year investment
cycle required for network densification. We are confident in our
ability to further diversify our company and execute on our
strategy,” commented Kenny Gunderman, President and Chief Executive
Officer.
Mr. Gunderman continued, “Uniti Fiber’s business
performed well in the third quarter. Our integration efforts
are ahead of schedule and Uniti Fiber’s management team is
executing effectively on their goals. During the quarter, the
Uniti Fiber team successfully managed through multiple hurricanes
in the Southeast, maintaining high customer service levels with
minimal disruptions. While the financial effect on the third
quarter was minimal, the storms will impact some future
construction projects and service activation schedules.”
QUARTERLY RESULTS
Revenues for the third quarter of 2017 were
$245.2 million. Net income and Adjusted EBITDA was $4.8
million and $194.9 million, respectively, for the same
period. Net income attributable to common shares was $2.9
million for the period, and included a $3.9 million net gain for
changes in the fair value of contingent consideration, and a $8.0
million income tax benefit primarily related to the release of
valuation allowances. Adjusted Funds From Operations (“AFFO”)
attributable to common shares was $110.7 million, or $0.63 per
diluted common share. The Company’s quarterly results include the
impact of the acquisitions of Hunt and Southern Light from their
July 3, 2017 acquisition date to September 30, 2017.
Uniti Fiber contributed $66.4 million of
revenues and $28.3 million of Adjusted EBITDA for the third quarter
of 2017. Uniti Fiber’s net success based capital expenditures
during the quarter were $51.3 million. Maintenance capital
expenditures were $1.5 million.
INVESTMENT TRANSACTIONS
The Company closed the acquisitions of Southern
Light and Hunt on July 3, 2017 for aggregate initial
consideration of approximately $768 million of cash and
the issuance of 4.2 million operating partnership units.
LIQUIDITY AND FINANCING TRANSACTIONS
At quarter-end, the Company had approximately
$49.9 million of unrestricted cash and cash equivalents, and $590
million of undrawn borrowing availability under its revolving
credit agreement. The Company’s leverage ratio at quarter end
was 5.8x based on Net Debt to Annualized Adjusted EBITDA.
As previously reported, on October 31, 2017, the
Company’s Board of Directors declared a quarterly cash dividend of
$0.60 per common share, payable on January 12, 2018 to stockholders
of record on December 29, 2017.
FULL YEAR 2017 OUTLOOK
Our current outlook excludes the impact of any
future acquisitions, capital market transactions, and transaction
costs. Furthermore, our outlook is subject to adjustment
based on the finalization of purchase price allocations related to
acquisitions and other factors. Actual results could differ
materially from these forward-looking statements.
The Company’s consolidated outlook for 2017 is
as follows (in millions):
|
Full Year 2017 |
Revenue |
$ |
913 |
|
to |
$ |
918 |
|
Adjusted EBITDA (1) |
|
748 |
|
to |
|
753 |
|
Interest expense (2) |
|
306 |
|
to |
|
306 |
|
|
|
|
|
|
|
Attributable to common shareholders: |
|
|
|
|
|
Net
loss |
|
(37) |
|
to |
|
(30) |
|
FFO
(1) |
|
336 |
|
to |
|
341 |
|
AFFO
(1) |
|
422 |
|
to |
|
426 |
|
Weighted-average common shares outstanding - diluted |
|
169 |
|
to |
|
169 |
|
________________________ |
|
|
|
|
|
(1) See
“Non-GAAP Financial Measures” below. |
|
|
|
|
|
(2)
Includes amortization of deferred financing costs and debt
discounts. |
|
|
|
|
|
|
|
|
|
|
|
The Company’s 2017 guidance has been updated
principally to reflect delays in dark fiber construction and
service order activations in the Southeast resulting from the
recent hurricanes, and delays in small cell deployments from
municipal moratoria. At the midpoint of its outlook, the
Company expects full year 2017 net loss attributable to common
shares to be approximately $0.24 per diluted share and AFFO per
diluted common share to be $2.51. The following table
provides a reconciliation of the Company’s outlook for AFFO before
the impact of pre-funding transactions.
|
Full Year 2017Midpoint
Outlook |
Current
2017 outlook – AFFO |
$ |
2.51 |
Pre-funding capital market transactions (1) |
|
0.07 |
Current
2017 outlook – AFFO before pre-funding transactions |
$ |
2.58 |
________________________ |
|
|
|
|
|
(1)
Represents the dilutive impact to AFFO per diluted common
share from the effective date of the aforementioned pre-funding
capital market transactions to the July 3, 2017 closing date of the
Hunt and Southern Light acquisitions. |
|
|
|
|
|
|
CONFERENCE CALL
Uniti will hold a conference call today to
discuss this earnings release at 4:15 PM Eastern Time (3:15 PM
Central Time). The dial-in number for the conference call is
(844) 513-7153 (or (508) 637-5603 for international callers) and
the conference ID 92383574. The conference call will be
webcast live and can be accessed on the Company’s website at
www.uniti.com. A replay of the webcast will be available
following the call on the Company’s website, beginning today at
approximately 8:00 PM Eastern Time and will remain available for 14
days.
ABOUT UNITI
Uniti, an internally managed real estate
investment trust, is engaged in the acquisition and construction of
mission critical communications infrastructure, and is a leading
provider of wireless infrastructure solutions for the
communications industry. As of September 30, 2017, Uniti owns
4.8 million fiber strand miles, 652 wireless towers, and other
communications real estate throughout the United States and Latin
America. Additional information about Uniti can be found on its
website at www.uniti.com.
FORWARD-LOOKING STATEMENTS
Certain statements in this press release and today’s conference
call may constitute forward-looking statements within the meaning
of the Private Securities Litigation Reform Act of 1995, as amended
from time to time. Those forward-looking statements include all
statements that are not historical statements of fact, including,
without limitation, those regarding our business strategies, growth
prospects, industry trends, sales opportunities, operating and
financial performance, and our 2017 financial results.
Words such as "anticipate(s)," "expect(s)," "intend(s),"
“estimate(s),” “foresee(s),” "plan(s)," "believe(s)," "may,"
"will," "would," "could," "should," "seek(s)" and similar
expressions, or the negative of these terms, are intended to
identify such forward-looking statements. These statements are
based on management's current expectations and beliefs and are
subject to a number of risks and uncertainties that could lead to
actual results differing materially from those projected,
forecasted or expected. Although we believe that the assumptions
underlying the forward-looking statements are reasonable, we can
give no assurance that our expectations will be attained. Factors
which could materially alter our expectations include, but are not
limited to, the ability and willingness of our customers to meet
and/or perform their obligations under any contractual arrangements
entered into with us; the ability and willingness of our customers
to renew their leases with us upon their expiration, and the
ability to reposition our properties on the same or better terms in
the event of nonrenewal or in the event we replace an existing
tenant; the adverse impact of litigation affecting us or our
customers; our ability to renew, extend or obtain contracts with
significant customers (including customers of the businesses we
acquire); the availability of and our ability to identify suitable
acquisition opportunities and our ability to acquire and lease the
respective properties on favorable terms; the risk that we fail to
fully realize the potential benefits of acquisitions or have
difficulty integrating acquired companies; our ability to generate
sufficient cash flows to service our outstanding indebtedness; our
ability to access debt and equity capital markets; the impact on
our business or the business of our customers as a result of credit
rating downgrades and fluctuating interest rates; our ability to
retain our key management personnel; our ability to qualify or
maintain our status as a real estate investment trust (“REIT”);
changes in the U.S. tax law and other state, federal or local laws,
whether or not specific to REITs; covenants in our debt agreements
that may limit our operational flexibility; other risks inherent in
the communications industry and in the ownership of communications
distribution systems, including potential liability relating to
environmental matters and illiquidity of real estate investments;
and additional factors described in our reports filed with the
SEC.
Uniti expressly disclaims any obligation to release publicly any
updates or revisions to any of the forward-looking statements set
forth in this press release and today’s conference call to reflect
any change in its expectations or any change in events, conditions
or circumstances on which any statement is based.
NON-GAAP PRESENTATION
This release and today’s conference call contain
certain supplemental measures of performance that are not required
by, or presented in accordance with, accounting principles
generally accepted in the United States (“GAAP”). Such
measures should not be considered as alternatives to GAAP.
Further information with respect to and reconciliations of such
measures to the nearest GAAP measure can be found herein.
|
Uniti Group Inc. |
Consolidated Balance Sheets |
(In thousands, except per share
data) |
|
|
|
September 30,2017 |
|
December 31,2016 |
Assets: |
|
|
|
|
Property, plant and
equipment, net |
|
$ |
3,037,469 |
|
|
$ |
2,670,037 |
|
Cash and cash
equivalents |
|
|
49,923 |
|
|
|
171,754 |
|
Accounts receivable,
net |
|
|
32,715 |
|
|
|
15,281 |
|
Goodwill |
|
|
672,368 |
|
|
|
262,334 |
|
Intangible assets,
net |
|
|
438,019 |
|
|
|
160,584 |
|
Straight-line revenue
receivable |
|
|
42,050 |
|
|
|
29,088 |
|
Other assets |
|
|
19,666 |
|
|
|
9,674 |
|
Total Assets |
|
$ |
4,292,210 |
|
|
$ |
3,318,752 |
|
|
|
|
|
|
|
|
Liabilities,
Convertible Preferred Stock and Shareholders’ Deficit |
|
|
|
|
|
|
Liabilities: |
|
|
|
|
|
|
Accounts payable,
accrued expenses and other liabilities |
|
$ |
80,725 |
|
|
$ |
40,977 |
|
Accrued interest
payable |
|
|
70,205 |
|
|
|
27,812 |
|
Deferred revenue |
|
|
466,321 |
|
|
|
261,404 |
|
Derivative
liability |
|
|
10,442 |
|
|
|
6,102 |
|
Dividends payable |
|
|
109,188 |
|
|
|
94,607 |
|
Deferred income
taxes |
|
|
85,145 |
|
|
|
28,394 |
|
Capital lease
obligations |
|
|
56,976 |
|
|
|
54,535 |
|
Contingent
consideration |
|
|
104,117 |
|
|
|
98,600 |
|
Notes and other debt,
net |
|
|
4,361,963 |
|
|
|
4,028,214 |
|
Total Liabilities |
|
|
5,345,082 |
|
|
|
4,640,645 |
|
|
|
|
|
|
|
|
Commitments and
contingencies |
|
|
|
|
|
|
|
|
|
|
|
|
|
Convertible
preferred stock, Series A, $0.0001 par value, 88 shares
authorized, issued and outstanding, $87,500 liquidation value |
|
|
82,785 |
|
|
|
80,552 |
|
|
|
|
|
|
|
|
Shareholder’s
Deficit: |
|
|
|
|
|
|
Preferred stock, $
0.0001 par value, 50,000 shares authorized, no shares issued and
outstanding |
|
|
- |
|
|
|
- |
|
Common stock, $ 0.0001
par value, 500,000 shares authorized, issued and outstanding:
174,821 shares at September 30, 2017 and 155,139 at December 31,
2016 |
|
|
17 |
|
|
|
15 |
|
Additional paid-in
capital |
|
|
642,981 |
|
|
|
141,092 |
|
Accumulated other
comprehensive loss |
|
|
(5,678 |
) |
|
|
(6,369 |
) |
Distributions in excess
of accumulated earnings |
|
|
(1,876,599 |
) |
|
|
(1,537,183 |
) |
Total Uniti
shareholders’ deficit |
|
|
(1,239,279 |
) |
|
|
(1,402,445 |
) |
Noncontrolling
interests – operating partnership units |
|
|
103,622 |
|
|
|
- |
|
Total
shareholders’ deficit |
|
|
(1,135,657 |
) |
|
|
(1,402,445 |
) |
Total
Liabilities, Convertible Preferred Stock and Shareholders’
Deficit |
|
$ |
4,292,210 |
|
|
$ |
3,318,752 |
|
|
|
Uniti Group Inc. |
Consolidated Statements of
Operations |
(In thousands, except per share
data) |
|
|
Three Months Ended September 30, |
|
Nine Months Ended September 30, |
|
2017 |
|
2016 |
|
2017 |
|
2016 |
Revenues: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Leasing |
$ |
171,673 |
|
|
$ |
169,366 |
|
|
$ |
512,893 |
|
|
$ |
506,945 |
|
Fiber
Infrastructure |
|
66,363 |
|
|
|
25,219 |
|
|
|
136,158 |
|
|
|
38,995 |
|
Towers |
|
2,796 |
|
|
|
159 |
|
|
|
6,679 |
|
|
|
271 |
|
Consumer CLEC |
|
4,378 |
|
|
|
5,496 |
|
|
|
13,966 |
|
|
|
17,277 |
|
Total
revenues |
|
245,210 |
|
|
|
200,240 |
|
|
|
669,696 |
|
|
|
563,488 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Costs and
expenses: |
|
|
|
|
|
|
|
|
|
|
|
Interest expense |
|
78,784 |
|
|
|
70,522 |
|
|
|
227,235 |
|
|
|
204,607 |
|
Depreciation and
amortization |
|
113,444 |
|
|
|
96,723 |
|
|
|
317,404 |
|
|
|
275,448 |
|
General and
administrative expense |
|
22,068 |
|
|
|
10,191 |
|
|
|
49,549 |
|
|
|
23,619 |
|
Operating expense
(exclusive of depreciation and amortization) |
|
30,172 |
|
|
|
15,704 |
|
|
|
74,258 |
|
|
|
30,322 |
|
Transaction related
costs |
|
8,512 |
|
|
|
9,315 |
|
|
|
32,213 |
|
|
|
24,435 |
|
Other (income)
expense |
|
(3,933 |
) |
|
|
- |
|
|
|
9,638 |
|
|
|
- |
|
Total
costs and expenses |
|
249,047 |
|
|
|
202,455 |
|
|
|
710,297 |
|
|
|
558,431 |
|
|
|
|
|
|
|
|
|
|
|
|
|
(Loss) income before
income taxes |
|
(3,837 |
) |
|
|
(2,215 |
) |
|
|
(40,601 |
) |
|
|
5,057 |
|
Income
tax (benefit) expense |
|
(8,672 |
) |
|
|
128 |
|
|
|
(8,976 |
) |
|
|
899 |
|
Net income
(loss) |
|
4,835 |
|
|
|
(2,343 |
) |
|
|
(31,625 |
) |
|
|
4,158 |
|
Net income attributable
to noncontrolling interests |
|
107 |
|
|
|
- |
|
|
|
107 |
|
|
|
- |
|
Net income
(loss) attributable to shareholders |
|
4,728 |
|
|
|
(2,343 |
) |
|
|
(31,732 |
) |
|
|
4,158 |
|
Participating
securities’ share in earnings |
|
(388 |
) |
|
|
(407 |
) |
|
|
(1,156 |
) |
|
|
(1,164 |
) |
Dividends declared on
convertible preferred stock |
|
(656 |
) |
|
|
(649 |
) |
|
|
(1,968 |
) |
|
|
(1,087 |
) |
Amortization of
discount on convertible preferred stock |
|
(745 |
) |
|
|
(745 |
) |
|
|
(2,235 |
) |
|
|
(1,241 |
) |
Net income
(loss) attributable to common shareholders |
$ |
2,939 |
|
|
$ |
(4,144 |
) |
|
$ |
(37,091 |
) |
|
$ |
666 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income (loss)
attributable to common shareholders – Basic |
$ |
2,939 |
|
|
$ |
(4,144 |
) |
|
$ |
(37,091 |
) |
|
$ |
666 |
|
Mark-to-market gains on
share settled contingent consideration arrangements |
|
(6,964 |
) |
|
|
- |
|
|
|
(6,964 |
) |
|
|
- |
|
Net (loss) income
attributable to common shareholders - Diluted |
$ |
(4,025 |
) |
|
$ |
(4,144 |
) |
|
$ |
(44,055 |
) |
|
$ |
666 |
|
Weighted
average number of common shares outstanding: |
|
|
|
|
|
|
|
|
|
|
|
Basic |
|
174,818 |
|
|
|
153,878 |
|
|
|
166,624 |
|
|
|
151,578 |
|
Diluted |
|
175,399 |
|
|
|
153,878 |
|
|
|
166,816 |
|
|
|
151,716 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings (loss)
per common share: |
|
|
|
|
|
|
|
|
|
|
|
Basic |
$ |
0.02 |
|
|
$ |
(0.03 |
) |
|
$ |
(0.22 |
) |
|
$ |
0.00 |
|
Diluted |
$ |
(0.02 |
) |
|
$ |
(0.03 |
) |
|
$ |
(0.26 |
) |
|
$ |
0.00 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Dividends
declared per common share |
$ |
0.60 |
|
|
$ |
0.60 |
|
|
$ |
1.80 |
|
|
$ |
1.80 |
|
|
|
Uniti Group Inc. |
Consolidated Statements of Cash
Flows |
(In thousands) |
|
|
Nine Months Ended September 30, |
|
2017 |
|
2016 |
Cash flow from
operating activities: |
|
|
|
Net
(loss) income |
$ |
(31,625 |
) |
|
$ |
4,158 |
|
Adjustments to reconcile net (loss) income to net cash provided
by operating activities: |
|
|
|
|
|
Depreciation and amortization |
|
317,404 |
|
|
|
275,448 |
|
Amortization of deferred financing costs |
|
7,964 |
|
|
|
5,640 |
|
Amortization of debt discount |
|
9,127 |
|
|
|
5,964 |
|
Deferred
income taxes |
|
(12,281 |
) |
|
|
836 |
|
Straight-line revenues |
|
(10,857 |
) |
|
|
(13,174 |
) |
Stock
based compensation |
|
5,621 |
|
|
|
3,478 |
|
Change in
fair value of contingent consideration |
|
9,091 |
|
|
|
- |
|
Other |
|
810 |
|
|
|
22 |
|
Changes
in assets and liabilities, net of acquisitions: |
|
|
|
|
|
Accounts
receivable |
|
532 |
|
|
|
(4,435 |
) |
Other
assets |
|
(4,307 |
) |
|
|
(4,951 |
) |
Accounts
payable, accrued expenses and other liabilities |
|
46,275 |
|
|
|
27,565 |
|
Net cash
provided by operating activities |
|
337,754 |
|
|
|
300,551 |
|
|
|
|
|
|
|
Cash flows from
investing activities: |
|
|
|
|
|
Acquisition of businesses, net of cash acquired |
|
(763,665 |
) |
|
|
(489,538 |
) |
Acquisition of ground lease investments |
|
(13,869 |
) |
|
|
(8,549 |
) |
NMS asset
acquisitions |
|
(68,557 |
) |
|
|
- |
|
Capital
expenditures - other |
|
(111,101 |
) |
|
|
(10,655 |
) |
Net
cash used in investing activities |
|
(957,192 |
) |
|
|
(508,742 |
) |
|
|
|
|
|
|
Cash flows from
financing activities: |
|
|
|
|
|
Principal
payment on debt |
|
(15,810 |
) |
|
|
(16,744 |
) |
Dividends
paid |
|
(294,272 |
) |
|
|
(273,692 |
) |
Payments
of contingent consideration |
|
(19,999 |
) |
|
|
- |
|
Proceeds
from issuance of Notes |
|
201,000 |
|
|
|
148,875 |
|
Borrowings under revolving credit facility |
|
360,000 |
|
|
|
521,000 |
|
Payments
under revolving credit facility |
|
(200,000 |
) |
|
|
(321,000 |
) |
Capital
lease payments |
|
(2,348 |
) |
|
|
(945 |
) |
Deferred
financing costs |
|
(28,533 |
) |
|
|
(2,946 |
) |
Common
stock issuance, net of costs |
|
498,924 |
|
|
|
54,211 |
|
Net share
settlement |
|
(1,752 |
) |
|
|
(2,123 |
) |
Net cash
provided by financing activities |
|
497,210 |
|
|
|
106,636 |
|
|
|
|
|
|
|
Effect of exchange rate
changes on cash and cash equivalents |
|
397 |
|
|
|
(181 |
) |
Net decrease in
cash and cash equivalents |
|
(121,831 |
) |
|
|
(101,736 |
) |
Cash and cash
equivalents at beginning of period |
|
171,754 |
|
|
|
142,498 |
|
Cash and cash
equivalents at end of period |
$ |
49,923 |
|
|
$ |
40,762 |
|
|
|
|
|
|
|
Non-cash
investing and financing activities: |
|
|
|
|
|
Property
and equipment acquired but not yet paid |
$ |
3,602 |
|
|
$ |
4,403 |
|
Tenant
capital improvements |
|
166,298 |
|
|
|
112,200 |
|
Acquisition of businesses through non-cash consideration |
|
122,395 |
|
|
|
259,996 |
|
|
|
|
|
|
|
|
Uniti Group Inc. |
Reconciliation of Net Income to FFO and
AFFO |
(In thousands, except per share
data) |
|
|
|
Three Months Ended September 30, |
|
Nine Months Ended September 30, |
|
|
2017 |
|
2016 |
|
2017 |
|
2016 |
Net income
(loss) attributable to common shareholders |
|
$ |
2,939 |
|
|
$ |
(4,144 |
) |
|
$ |
(37,091 |
) |
|
$ |
666 |
|
Real estate
depreciation and amortization |
|
|
95,519 |
|
|
|
88,846 |
|
|
|
278,714 |
|
|
|
261,678 |
|
Participating
securities’ share in earnings |
|
|
388 |
|
|
|
407 |
|
|
|
1,156 |
|
|
|
1,164 |
|
Participating
securities’ share in FFO |
|
|
(388 |
) |
|
|
(394 |
) |
|
|
(1,156 |
) |
|
|
(1,164 |
) |
Adjustments for
noncontrolling interests |
|
|
(2,222 |
) |
|
|
- |
|
|
|
(2,222 |
) |
|
|
- |
|
FFO
attributable to common shareholders |
|
|
96,236 |
|
|
|
84,715 |
|
|
|
239,401 |
|
|
|
262,344 |
|
Transaction related
costs |
|
|
8,512 |
|
|
|
9,315 |
|
|
|
32,213 |
|
|
|
24,435 |
|
Change in fair value of
contingent consideration |
|
|
(3,933 |
) |
|
|
- |
|
|
|
9,091 |
|
|
|
- |
|
Amortization of
deferred financing costs |
|
|
2,889 |
|
|
|
1,959 |
|
|
|
7,964 |
|
|
|
5,640 |
|
Amortization of debt
discount |
|
|
3,221 |
|
|
|
2,038 |
|
|
|
9,127 |
|
|
|
5,964 |
|
Stock based
compensation |
|
|
1,968 |
|
|
|
1,331 |
|
|
|
5,621 |
|
|
|
3,478 |
|
Non-real estate
depreciation and amortization |
|
|
17,925 |
|
|
|
7,877 |
|
|
|
38,690 |
|
|
|
13,770 |
|
Straight-line
revenues |
|
|
(3,609 |
) |
|
|
(4,547 |
) |
|
|
(10,857 |
) |
|
|
(13,174 |
) |
Maintenance capital
expenditures |
|
|
(1,476 |
) |
|
|
(1,415 |
) |
|
|
(3,454 |
) |
|
|
(2,095 |
) |
Amortization of
discount on convertible preferred stock |
|
|
745 |
|
|
|
745 |
|
|
|
2,235 |
|
|
|
1,241 |
|
Adjustment to deferred
tax valuation allowance |
|
|
(7,992 |
) |
|
|
- |
|
|
|
(7,992 |
) |
|
|
- |
|
Other non-cash
(revenue) expense, net |
|
|
(3,509 |
) |
|
|
(2,333 |
) |
|
|
(9,304 |
) |
|
|
(4,842 |
) |
Adjustments for
noncontrolling interests |
|
|
(310 |
) |
|
|
- |
|
|
|
(310 |
) |
|
|
- |
|
Adjusted FFO
attributable to common shareholders |
|
$ |
110,667 |
|
|
$ |
99,685 |
|
|
$ |
312,425 |
|
|
$ |
296,761 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Per diluted
common share: |
|
|
|
|
|
|
|
|
|
|
|
|
EPS |
|
$ |
(0.02 |
) |
|
$ |
(0.03 |
) |
|
$ |
(0.26 |
) |
|
$ |
0.00 |
|
FFO |
|
$ |
0.55 |
|
|
$ |
0.55 |
|
|
$ |
1.44 |
|
|
$ |
1.73 |
|
AFFO |
|
$ |
0.63 |
|
|
$ |
0.65 |
|
|
$ |
1.87 |
|
|
$ |
1.96 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average common
shares used to calculate basic (loss) earnings per common
share |
|
|
174,818 |
|
|
|
153,878 |
|
|
|
166,624 |
|
|
|
151,578 |
|
Effect of dilutive
non-participating securities |
|
|
581 |
|
|
|
149 |
|
|
|
192 |
|
|
|
138 |
|
Weighted average common
shares used to calculate diluted FFO and AFFO per common share |
|
|
175,399 |
|
|
|
154,027 |
|
|
|
166,816 |
|
|
|
151,716 |
|
|
|
Uniti Group Inc. |
Reconciliation of EBITDA and Adjusted
EBITDA |
(In thousands) |
|
|
|
Three Months Ended September 30, |
|
Nine Months Ended September 30, |
|
|
2017 |
|
2016 |
|
2017 |
|
2016 |
Net income
(loss) |
|
$ |
4,835 |
|
|
$ |
(2,343 |
) |
|
$ |
(31,625 |
) |
|
$ |
4,158 |
|
Depreciation and
amortization |
|
|
113,444 |
|
|
|
96,723 |
|
|
|
317,404 |
|
|
|
275,448 |
|
Interest expense |
|
|
78,784 |
|
|
|
70,522 |
|
|
|
227,235 |
|
|
|
204,607 |
|
Income tax (benefit)
expense |
|
|
(8,672 |
) |
|
|
128 |
|
|
|
(8,976 |
) |
|
|
899 |
|
EBITDA |
|
|
188,391 |
|
|
|
165,030 |
|
|
|
504,038 |
|
|
|
485,112 |
|
Stock based
compensation |
|
|
1,968 |
|
|
|
1,331 |
|
|
|
5,621 |
|
|
|
3,478 |
|
Transaction related
costs |
|
|
8,512 |
|
|
|
9,315 |
|
|
|
32,213 |
|
|
|
24,435 |
|
Other (income)
expense |
|
|
(3,933 |
) |
|
|
- |
|
|
|
9,638 |
|
|
|
- |
|
Adjusted EBITDA |
|
$ |
194,938 |
|
|
$ |
175,676 |
|
|
$ |
551,510 |
|
|
$ |
513,025 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted
EBITDA: |
|
|
|
|
|
|
|
|
|
|
|
Leasing |
|
$ |
171,215 |
|
|
$ |
169,075 |
|
|
$ |
511,803 |
|
|
$ |
505,912 |
|
Fiber
Infrastructure |
|
|
28,348 |
|
|
|
9,273 |
|
|
|
52,533 |
|
|
|
14,773 |
|
Towers |
|
|
(98 |
) |
|
|
(258 |
) |
|
|
(1,075 |
) |
|
|
(857 |
) |
Consumer
CLEC |
|
|
1,025 |
|
|
|
1,213 |
|
|
|
3,514 |
|
|
|
3,875 |
|
Corporate |
|
|
(5,552 |
) |
|
|
(3,627 |
) |
|
|
(15,265 |
) |
|
|
(10,678 |
) |
|
|
$ |
194,938 |
|
|
$ |
175,676 |
|
|
$ |
551,510 |
|
|
$ |
513,025 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Annualized
Adjusted EBITDA (1) |
|
$ |
779,752 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
As of September
30, 2017: |
|
|
|
|
|
|
|
|
|
|
|
Total Debt (2) |
|
$ |
4,569,133 |
|
|
|
|
|
|
|
|
|
Cash and cash
equivalents |
|
|
49,923 |
|
|
|
|
|
|
|
|
|
Net Debt |
|
$ |
4,519,210 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Debt/Annualized
Adjusted EBITDA |
|
|
5.9x |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
Debt/Annualized Adjusted EBITDA |
|
|
5.8x |
|
|
|
|
|
|
|
|
|
________________________ |
(1)
Calculated as Adjusted EBITDA for the most recently reported
three-month period, multiplied by four. Annualized Adjusted
EBITDA has not been prepared on a pro forma basis in accordance
with Article 11 of Regulation S-X. |
(2)
Includes $57.0 million of capital leases, but excludes $150.2
million of unamortized discounts and deferred financing costs. |
|
|
Uniti Group Inc. |
Projected Future Results (1) |
(In millions) |
|
|
Year EndedDecember 31, 2017 |
Net loss
attributable to common shareholders |
($37) to ($30) |
Noncontrolling interest
share in earnings |
- |
Participating
securities’ share in earnings |
2 |
Dividends declared on
convertible preferred stock |
3 |
Amortization of
discount on convertible preferred stock |
3 |
Net Loss
(2) |
($29) to ($22) |
Interest expense |
306 |
Depreciation and
amortization |
428 |
Income tax benefit |
(9) |
EBITDA
(2) |
$697 to $703 |
Stock based
compensation |
8 |
Transaction related
cost |
32 |
Other expense |
10 |
Adjusted EBITDA
(2) |
$748 to $753 |
________________________ |
(1)
These ranges represent management’s best estimates based on
the underlying assumptions as of the date of this press
release. Final purchase price allocations, future
acquisitions, capital market transactions, changes in market
conditions, and other factors are excluded from our
projections. There can be no assurance that our actual
results will not differ materially from the estimates set forth
above. |
(2)
The components of projected future results may not add due to
rounding. |
|
|
Uniti Group Inc. |
Projected Future Results (1) |
(Per Diluted Share) |
|
|
Year EndedDecember 31, 2017 |
Net loss
attributable to common shareholders (2) |
($0.26) to ($0.22) |
Mark-to-market gain on
share settled contingent consideration arrangements |
0.04 |
Real estate
depreciation and amortization |
2.22 |
Participating
securities share in earnings |
0.01 |
Participating
securities share in FFO |
(0.01) |
Adjustments for
noncontrolling interests |
(0.03) |
FFO
attributable to common shareholders (3) |
$1.98
to $2.02 |
Transaction related
costs |
0.19 |
Amortization of
deferred financing costs and debt discount |
0.14 |
Stock based
compensation |
0.05 |
Non-real estate
depreciation and amortization |
0.31 |
Change in fair value of
contingent consideration |
0.05 |
Straight-line
revenues |
(0.09) |
Maintenance capital
expenditures |
(0.03) |
Amortization of
discount on convertible preferred stock |
0.02 |
Adjustment to deferred
tax valuation allowance |
(0.05) |
Other non-cash revenue,
net |
(0.08) |
Adjustments for
noncontrolling interests |
(0.00) |
AFFO
attributable to common shareholders (3) |
$2.49 to $2.52 |
________________________ |
|
(1)
These ranges represent management’s best estimates based on
the underlying assumptions as of the date of this press release.
Final purchase price allocations, future acquisitions, capital
market transactions, changes in market conditions, and other
factors are excluded from our projections. There can be no
assurance that our actual results will not differ materially from
the estimates set forth above. |
(2)
Calculated in accordance with generally accepted accounting
principles, and excludes the impact of $7.0 million of
mark-to-market gains on share settled contingent consideration
arrangements. |
(3)
The components of projected future results may not add to FFO
and AFFO attributable to common shareholders due to rounding. |
|
|
Components of Interest Expense
(1) |
(In millions) |
|
|
|
Year EndedDecember 31,
2017 |
Interest expense on
debt obligations |
|
$283 |
Amortization of
deferred financing cost and debt discounts |
|
23 |
Interest
expense (2) |
|
$306 |
________________________ |
(1)
These ranges represent management’s best estimates based on the
underlying assumptions as of the date of this press release. Final
purchase price allocations, future acquisitions, capital market
transactions, changes in market conditions, and other factors are
excluded from our projections. There can be no assurance that our
actual results will not differ materially from the estimates set
forth above. |
(2) The components of interest expense may not add to the
total due to rounding. |
|
NON-GAAP FINANCIAL MEASURES
We refer to EBITDA, Adjusted EBITDA, Funds From Operations
(“FFO”) as defined by the National Association of Real Estate
Investment Trusts (“NAREIT”) and Adjusted Funds From Operations
(“AFFO”) in our analysis of our results of operations, which are
not required by, or presented in accordance with, accounting
principles generally accepted in the United States (“GAAP”). While
we believe that net income, as defined by GAAP, is the most
appropriate earnings measure, we also believe that EBITDA, Adjusted
EBITDA, FFO and AFFO are important non-GAAP supplemental measures
of operating performance for a REIT.
We define “EBITDA” as net income, as defined by GAAP, before
interest expense, provision for income taxes and depreciation and
amortization. We define “Adjusted EBITDA” as EBITDA before
stock-based compensation expense and the impact, which may be
recurring in nature, of transaction and integration related costs,
collectively “Transaction Related Costs”, the write off of
unamortized deferred financing costs, costs incurred as a result of
the early repayment of debt, changes in the fair value of
contingent consideration and financial instruments, and other
similar items. We believe EBITDA and Adjusted EBITDA are important
supplemental measures to net income because they provide additional
information to evaluate our operating performance on an unleveraged
basis. In addition, Adjusted EBITDA is calculated similar to
defined terms in our material debt agreements used to determine
compliance with specific financial covenants. Since EBITDA
and Adjusted EBITDA are not measures calculated in accordance with
GAAP, they should not be considered as alternatives to net income
determined in accordance with GAAP.
Because the historical cost accounting convention used for real
estate assets requires the recognition of depreciation expense
except on land, such accounting presentation implies that the value
of real estate assets diminishes predictably over time. However,
since real estate values have historically risen or fallen with
market and other conditions, presentations of operating results for
a REIT that use historical cost accounting for depreciation could
be less informative. Thus, NAREIT created FFO as a supplemental
measure of operating performance for REITs that excludes historical
cost depreciation and amortization, among other items, from net
income, as defined by GAAP. FFO is defined by NAREIT as net income
attributable to common shareholders computed in accordance with
GAAP, excluding gains or losses from real estate dispositions, plus
real estate depreciation and amortization and impairment charges.
We compute FFO in accordance with NAREIT’s definition.
The Company defines AFFO, as FFO excluding (i) transaction and
integration costs; (ii) certain non-cash revenues and expenses such
as stock-based compensation expense, amortization of debt and
equity discounts, amortization of deferred financing costs,
depreciation and amortization of non-real estate assets, straight
line revenues, and the amortization of other non-cash revenues to
the extent that cash has not been received, such as revenue
associated with the amortization of tenant capital improvements;
(iii) the impact, which may be recurring in nature, of the
write-off of unamortized deferred financing fees, additional costs
incurred as a result of early repayment of debt, changes in the
fair value of contingent consideration and financial instruments
and similar items less maintenance capital expenditures. We believe
that the use of FFO and AFFO, and their respective per share
amounts, combined with the required GAAP presentations, improves
the understanding of operating results of REITs among investors and
analysts, and makes comparisons of operating results among such
companies more meaningful. We consider FFO and AFFO to be useful
measures for reviewing comparative operating performance. In
particular, we believe AFFO, by excluding certain revenue and
expense items, can help investors compare our operating performance
between periods and to other REITs on a consistent basis without
having to account for differences caused by unanticipated items and
events, such as transaction and integration related costs. The
Company uses FFO and AFFO, and their respective per share amounts,
only as performance measures, and FFO and AFFO do not purport to be
indicative of cash available to fund our future cash requirements.
While FFO and AFFO are relevant and widely used measures of
operating performance of REITs, they do not represent cash flows
from operations or net income as defined by GAAP and should not be
considered an alternative to those measures in evaluating our
liquidity or operating performance.
Further, our computations of EBITDA, Adjusted EBITDA, FFO and
AFFO may not be comparable to that reported by other REITs or
companies that do not define FFO in accordance with the current
NAREIT definition or that interpret the current NAREIT definition
or define EBITDA, Adjusted EBITDA and AFFO differently than we
do.
INVESTOR AND MEDIA CONTACTS:
Mark A. Wallace, 501-850-0866Executive Vice President, Chief
Financial Officer & Treasurermark.wallace@uniti.com
Jim Volk, 501-850-0872Vice President, Finance & Investor
Relationsjim.volk@uniti.com
Uniti (NASDAQ:UNIT)
Historical Stock Chart
From Mar 2024 to Apr 2024
Uniti (NASDAQ:UNIT)
Historical Stock Chart
From Apr 2023 to Apr 2024