Uniti Group Inc. (“Uniti” or the “Company”) (Nasdaq: UNIT)
today announced its preliminary results for the fourth quarter and
full year 2020.
“Our fiber and leasing businesses performed
exceptionally well last year and are well positioned going into
2021. Strong bookings and install activity at Uniti Fiber reflect
the robust demand we continue to see for our wireless offerings,
driven by network densification efforts and the broader rollout of
5G services within our markets. We continue to see increased demand
for our non-wireless service offerings and make significant
progress in leasing-up our major anchor wireless builds. With a
national network of 123,000 route miles of valuable fiber, we are
in the unique position to drive additional lease up for years to
come,” commented Kenny Gunderman, President and Chief Executive
Officer.
Mr. Gunderman continued, “We expect to see solid
growth across all of our businesses this year, driven by high
margin, recurring lease-up across our Uniti Leasing and Uniti Fiber
networks. Through the recent refinancing of our revolving credit
facility and senior unsecured notes refinancing, we have
substantially improved Uniti’s financial profile, while providing
greater flexibility in our ability to pursue other strategic
initiatives.”
PRELIMINARY QUARTERLY
RESULTS
Consolidated revenues for the fourth quarter of
2020 are expected to be $275.3 million. Net loss and Adjusted
EBITDA are expected to be $47.7 million and $215.7 million,
respectively, for the same period. Adjusted Funds From
Operations (“AFFO”) attributable to common shareholders is expected
to be $106.4 million, or $0.42 per diluted common share.
Uniti Fiber is expected to contribute $81.4
million of revenues and $30.8 million of Adjusted EBITDA for the
fourth quarter of 2020, achieving estimated Adjusted EBITDA margins
of approximately 38%. Uniti Fiber’s net success-based capital
expenditures during the quarter were $41.2 million, and maintenance
capital expenditures were $2.2 million.
Uniti Leasing is expected to contribute revenues
of $193.9 million and Adjusted EBITDA of $191.5 million for the
fourth quarter. During the quarter, Uniti Leasing deployed $56.3
million towards growth capital investment initiatives.
PRELIMINARY FULL YEAR
RESULTS
Consolidated revenues for the year ended
December 31, 2020 are expected to be $1.1 billion. Net loss and
Adjusted EBITDA are estimated to be $718.8 million and $818.8
million, respectively, for the same period. Net loss attributable
to common shares is expected to be $707.4 million for the year, and
includes a $71.0 million goodwill impairment charge in the fourth
quarter related to our Uniti Fiber segment and $63.9 million of
transaction related and other costs. Adjusted Funds From Operations
(“AFFO”) attributable to common shareholders is estimated at $389.5
million, or $1.72 per diluted common share.
Uniti Fiber is expected to contribute $314.4
million of revenues and $112.3 million of Adjusted EBITDA for the
year ended December 31, 2020, achieving estimated Adjusted EBITDA
margins of approximately 36%. Uniti Fiber’s net success-based
capital expenditures during the year were $146.8 million, and
maintenance capital expenditures were $7.1 million.
Uniti Leasing is expected to have revenues of
$745.9 million and Adjusted EBITDA of $737.3 million for the year
ended December 31, 2020, while deploying $95.9 million towards
growth capital investment initiatives.
The preliminary quarterly and full year
information above reflects the Company’s preliminary estimates and
is based on the information available as of the date hereof. The
Company is working to complete its financial results, and its
independent auditors are working to complete their audit work. The
Company expects to file its Form 10-K no later than March 8, 2021.
Actual results may differ from these estimates.
FINANCING TRANSACTIONS
On December 10, 2020, Uniti entered into an
amendment to our credit agreement that upsized commitments from new
and existing lenders under our senior revolving credit facility to
$500 million. Upon receipt of routine regulatory approvals,
the new and extended commitments will bear interest at a rate of
LIBOR plus 400 basis points based on our current secured leverage
ratio, and the maturity date will be extended to December 10, 2024.
Certain limitations that were included in our previous amendments
to our credit agreement have been modified or removed, such as
restrictions relating to debt incurrence, restricted payments, and
permitted investments. Certain non-extending lender commitments of
$60.5 million will mature on April 24, 2022 and will continue to
bear interest at rates previously in effect. Prior to the
expiration of these commitments, the aggregate size of the senior
revolving credit facility will be $560.5 million from all
lenders.
On February 2, 2021, the Company closed on the
issuance of $1.11 billion of Senior Unsecured Notes due February
2029 (“2029 Notes”). The 2029 Notes bear interest at 6.50% and were
issued at par. The proceeds from the offering, together with cash
on hand, were used to purchase, through a tender offer,
approximately $1.05 billion or 95% of our outstanding 8.25% Senior
Unsecured Notes due 2023 (“2023 Notes”). On February 16, 2021, the
Company issued a notice to redeem all remaining outstanding 2023
Notes at par, plus any accrued and unpaid interest, on April 15,
2021.
LIQUIDITY
At year-end, the Company had approximately
$527.5 million of unrestricted cash and cash equivalents, and
undrawn borrowing availability under its revolving credit
agreement. The Company’s leverage ratio at year-end is estimated to
be 5.72x based on Net Debt to Annualized Adjusted EBITDA.
On February 25, 2021, the Company’s Board of
Directors declared a quarterly cash dividend of $0.15 per common
share, payable on April 16, 2021 to stockholders of record on April
1, 2021.
FULL YEAR 2021 OUTLOOK
Our 2021 outlook includes the impact of the
previously announced strategic OpCo-PropCo transaction with
Everstream Solutions, LLC, including the partial sale of our
Northeast operations and certain dark fiber IRU contracts acquired
as part of the Windstream settlement, that is expected to close in
early second quarter of this year (the “Everstream Transaction”),
and the estimated impact of our 6.5% unsecured notes offering and
related tender offer and redemption. Our outlook excludes future
acquisitions, capital market transactions, and future transaction
related and other costs not mentioned herein. Actual results could
differ materially from these forward-looking statements.
The Company’s consolidated outlook for 2021 is as follows (in
millions):
|
Full Year 2021 |
|
Revenue |
$ |
1,083 |
to |
$ |
1,094 |
|
Net income attributable to common shareholders (1) |
|
119 |
to |
|
131 |
|
Adjusted EBITDA (2) |
|
846 |
to |
|
858 |
|
Interest expense, net (3) |
|
439 |
to |
|
439 |
|
|
|
|
|
|
|
|
Attributable to common shareholders: |
|
|
|
|
|
|
FFO (2) |
|
331 |
to |
|
343 |
|
AFFO (2) |
|
408 |
to |
|
420 |
|
|
|
|
|
|
|
|
Weighted-average common shares outstanding – diluted |
|
263 |
to |
|
263 |
|
________________________ |
|
|
|
|
|
|
(1) Includes $25 million of estimated gain
relating to the Everstream Transaction.(2) See
“Non-GAAP Financial Measures” below.(3) See
“Components of Interest Expense” below. |
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 is 7875254. The conference call will be webcast live
and can be accessed on the Company’s website at www.uniti.com. A
replay of the call will be available on the Company’s website or by
telephone beginning today at approximately 8:00 PM Eastern Time. To
access the telephone replay, which will be available for 14 days,
please dial (855) 859-2056 and enter the conference ID number
7875254.
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 December 31, 2020, Uniti owns over
123,000 fiber route miles, approximately 6.9 million fiber strand
miles, and other communications real estate throughout the United
States. 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, our 2021
financial outlook, our business strategies, growth prospects,
industry trends, sales opportunities, and operating and financial
performance.
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 future prospects of Windstream, our largest
customer; changes in the accounting treatment of our settlement
with Windstream; the ability and willingness of our customers to
meet and/or perform their obligations under any contractual
arrangements entered into with us, including master lease
arrangements; the ability of our customers to comply with laws,
rules and regulations in the operation of the assets we lease to
them; 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 and fund our
capital funding commitments; our ability to access debt and equity
capital markets (including to fund required payments pursuant to
our settlement with Windstream); adverse impacts of changes to our
business, economic trends or key assumptions regarding our
estimates of fair value, including potential impacts of recent
developments surrounding Windstream that could result in an
impairment charge in the future, which could have a significant
impact to our reported earnings; 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; our expectations regarding the effect of
the COVID-19 pandemic on our results of operations and financial
condition; 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.
Preliminary – Unaudited
Uniti Group
Inc.Consolidated Balance
Sheets(In thousands, except per share
data)
|
|
December 31, 2020 |
|
December 31, 2019 |
Assets: |
|
|
|
|
Property, plant and equipment, net |
|
$ |
3,273,353 |
|
|
$ |
3,409,945 |
|
Cash and cash equivalents |
|
|
77,534 |
|
|
|
142,813 |
|
Accounts receivable, net |
|
|
62,952 |
|
|
|
77,623 |
|
Goodwill |
|
|
601,878 |
|
|
|
690,672 |
|
Intangible assets, net |
|
|
390,725 |
|
|
|
531,979 |
|
Straight-line revenue
receivable |
|
|
13,107 |
|
|
|
2,408 |
|
Other assets, net |
|
|
152,883 |
|
|
|
161,560 |
|
Investment in unconsolidated
entities |
|
|
66,043 |
|
|
|
- |
|
Assets held for sale |
|
|
93,343 |
|
|
|
- |
|
Total Assets |
|
$ |
4,731,818 |
|
|
$ |
5,017,000 |
|
|
|
|
|
|
|
|
Liabilities and
Shareholders’ Deficit |
|
|
|
|
|
|
Liabilities: |
|
|
|
|
|
|
Accounts payable, accrued
expenses and other liabilities, net |
|
$ |
146,144 |
|
|
$ |
227,121 |
|
Settlement payable |
|
|
418,840 |
|
|
|
- |
|
Intangible liabilities, net |
|
|
187,886 |
|
|
|
- |
|
Accrued interest payable |
|
|
95,338 |
|
|
|
28,800 |
|
Deferred revenue |
|
|
995,123 |
|
|
|
1,070,671 |
|
Derivative liability, net |
|
|
22,897 |
|
|
|
23,679 |
|
Dividends payable |
|
|
36,725 |
|
|
|
43,282 |
|
Deferred income taxes |
|
|
10,540 |
|
|
|
24,431 |
|
Finance lease obligations |
|
|
15,468 |
|
|
|
52,994 |
|
Contingent consideration |
|
|
2,957 |
|
|
|
11,507 |
|
Notes and other debt, net |
|
|
4,816,524 |
|
|
|
5,017,679 |
|
Liabilities held for sale |
|
|
55,752 |
|
|
|
- |
|
Total Liabilities |
|
|
6,804,194 |
|
|
|
6,500,164 |
|
|
|
|
|
|
|
|
Commitments and
contingencies |
|
|
|
|
|
|
|
|
|
|
|
|
|
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: 231,262 shares at December 31, 2020 and 192,142
shares at December 31, 2019 |
|
|
23 |
|
|
|
19 |
|
Additional paid-in capital |
|
|
1,209,141 |
|
|
|
951,295 |
|
Accumulated other comprehensive
loss |
|
|
(20,367 |
) |
|
|
(23,442 |
) |
Distributions in excess of
accumulated earnings |
|
|
(3,330,455 |
) |
|
|
(2,494,740 |
) |
Total Uniti shareholders’
deficit |
|
|
(2,141,658 |
) |
|
|
(1,566,868 |
) |
Noncontrolling interests –
operating partnership units and non-voting convertible preferred
stock |
|
|
69,282 |
|
|
|
83,704 |
|
Total shareholders’ deficit |
|
|
(2,072,376 |
) |
|
|
(1,483,164 |
) |
Total Liabilities and
Shareholders’ Deficit |
|
$ |
4,731,818 |
|
|
$ |
5,017,000 |
|
Preliminary – Unaudited
Uniti Group
Inc.Consolidated Statements of
Operations(In thousands, except per share
data)
|
Three Months Ended December 31, |
|
|
Year Ended December 31, |
|
|
2020 |
|
|
|
2019 |
|
|
|
2020 |
|
|
|
2019 |
|
Revenues: |
|
|
|
|
|
|
|
|
|
|
|
Leasing |
$ |
193,873 |
|
|
$ |
183,867 |
|
|
$ |
745,915 |
|
|
$ |
716,640 |
|
Fiber Infrastructure |
|
81,421 |
|
|
|
79,466 |
|
|
|
314,363 |
|
|
|
315,605 |
|
Towers |
|
- |
|
|
|
3,194 |
|
|
|
6,112 |
|
|
|
14,693 |
|
Consumer CLEC |
|
- |
|
|
|
2,010 |
|
|
|
651 |
|
|
|
10,673 |
|
Total revenues |
|
275,294 |
|
|
|
268,537 |
|
|
|
1,067,041 |
|
|
|
1,057,611 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Costs and
expenses: |
|
|
|
|
|
|
|
|
|
|
|
Interest expense, net |
|
108,701 |
|
|
|
103,270 |
|
|
|
497,128 |
|
|
|
390,112 |
|
Depreciation and
amortization |
|
78,433 |
|
|
|
98,183 |
|
|
|
329,403 |
|
|
|
405,754 |
|
General and administrative
expense |
|
23,289 |
|
|
|
26,979 |
|
|
|
104,975 |
|
|
|
102,900 |
|
Operating expense (exclusive of
depreciation and amortization) |
|
41,029 |
|
|
|
41,495 |
|
|
|
159,337 |
|
|
|
160,024 |
|
Settlement expense |
|
- |
|
|
|
- |
|
|
|
650,000 |
|
|
|
- |
|
Goodwill impairment |
|
71,000 |
|
|
|
- |
|
|
|
71,000 |
|
|
|
- |
|
Transaction related and other
costs |
|
8,531 |
|
|
|
14,825 |
|
|
|
63,875 |
|
|
|
43,708 |
|
Gain on sale of real estate |
|
459 |
|
|
|
- |
|
|
|
(86,267 |
) |
|
|
(28,995 |
) |
Other (income) expense |
|
(483 |
) |
|
|
628 |
|
|
|
11,703 |
|
|
|
(31,463 |
) |
Total costs and expenses |
|
330,959 |
|
|
|
285,380 |
|
|
|
1,801,154 |
|
|
|
1,042,040 |
|
|
|
|
|
|
|
|
|
|
|
|
|
(Loss) income before income taxes
and equity in earnings from unconsolidated entities |
|
(55,665 |
) |
|
|
(16,843 |
) |
|
|
(734,113 |
) |
|
|
15,571 |
|
Income tax (benefit) expense |
|
(7,553 |
) |
|
|
(5,489 |
) |
|
|
(15,203 |
) |
|
|
4,663 |
|
Equity in earnings from
unconsolidated entities |
|
440 |
|
|
|
- |
|
|
|
98 |
|
|
|
- |
|
Net (loss)
income |
|
(47,672 |
) |
|
|
(11,354 |
) |
|
|
(718,812 |
) |
|
|
10,908 |
|
Net (loss) income attributable to
noncontrolling interests |
|
(703 |
) |
|
|
(197 |
) |
|
|
(12,511 |
) |
|
|
326 |
|
Net (loss) income
attributable to shareholders |
|
(46,969 |
) |
|
|
(11,157 |
) |
|
|
(706,301 |
) |
|
|
10,582 |
|
Participating securities’ share
in earnings |
|
(225 |
) |
|
|
(248 |
) |
|
|
(1,078 |
) |
|
|
(549 |
) |
Dividends declared on convertible
preferred stock |
|
(3 |
) |
|
|
- |
|
|
|
(9 |
) |
|
|
(656 |
) |
Amortization of discount on
convertible preferred stock |
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
(993 |
) |
Net (loss) income
attributable to common shareholders |
$ |
(47,197 |
) |
|
$ |
(11,405 |
) |
|
$ |
(707,388 |
) |
|
$ |
8,384 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Net (loss) income attributable
to common shareholders – Basic |
$ |
(47,197 |
) |
|
$ |
(11,405 |
) |
|
$ |
(707,388 |
) |
|
$ |
8,384 |
|
Impact of non-participating
securities |
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
Net (loss) income attributable to
common shareholders – Diluted |
$ |
(47,197 |
) |
|
$ |
(11,405 |
) |
|
$ |
(707,388 |
) |
|
$ |
8,384 |
|
Weighted average number
of common shares outstanding: |
|
|
|
|
|
|
|
|
|
|
|
Basic |
|
231,262 |
|
|
|
192,140 |
|
|
|
203,600 |
|
|
|
187,358 |
|
Diluted |
|
231,262 |
|
|
|
192,140 |
|
|
|
203,600 |
|
|
|
187,358 |
|
|
|
|
|
|
|
|
|
|
|
|
|
(Loss) earnings per
common share: |
|
|
|
|
|
|
|
|
|
|
|
Basic |
$ |
(0.20 |
) |
|
$ |
(0.06 |
) |
|
$ |
(3.47 |
) |
|
$ |
0.04 |
|
Diluted |
$ |
(0.20 |
) |
|
$ |
(0.06 |
) |
|
$ |
(3.47 |
) |
|
$ |
0.04 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Preliminary – Unaudited
Uniti Group
Inc.Consolidated Statements of Cash
Flows(In thousands)
|
|
Year Ended December 31, |
|
|
2020 |
|
|
2019 |
|
Cash flow from
operating activities: |
|
|
|
|
Net (loss) income |
|
$ |
(718,812 |
) |
|
$ |
10,908 |
|
Adjustments to reconcile net income to net cash provided
byoperating activities: |
|
|
|
|
|
|
Depreciation and amortization |
|
|
329,403 |
|
|
|
405,754 |
|
Amortization of deferred financing costs and debt discount |
|
|
36,955 |
|
|
|
42,779 |
|
Write off of deferred financing costs and debt discount |
|
|
73,952 |
|
|
|
- |
|
Interest rate swap termination |
|
|
10,155 |
|
|
|
- |
|
Deferred income taxes |
|
|
(13,891 |
) |
|
|
(11,428 |
) |
Equity in earnings from unconsolidated entities |
|
|
(98 |
) |
|
|
- |
|
Distributions of cumulative earnings from unconsolidated
entities |
|
|
1,960 |
|
|
|
- |
|
Cash paid for interest rate swap settlements |
|
|
(7,818 |
) |
|
|
- |
|
Straight-line revenues |
|
|
(6,872 |
) |
|
|
(208 |
) |
Stock-based compensation |
|
|
13,721 |
|
|
|
10,808 |
|
Goodwill impairment |
|
|
71,000 |
|
|
|
- |
|
Change in fair value of contingent consideration |
|
|
7,163 |
|
|
|
(28,463 |
) |
Gain on sale of real estate |
|
|
(86,267 |
) |
|
|
(28,995 |
) |
Loss on sale of Uniti Fiber Midwest operations |
|
|
- |
|
|
|
2,242 |
|
Loss on asset disposals |
|
|
1,796 |
|
|
|
6,891 |
|
Other |
|
|
(297 |
) |
|
|
(435 |
) |
Changes in assets and liabilities, net of acquisitions: |
|
|
|
|
|
|
Accounts receivable |
|
|
12,634 |
|
|
|
25,592 |
|
Other assets |
|
|
(24,141 |
) |
|
|
10,297 |
|
Accounts payable, accrued expenses and other liabilities |
|
|
37,850 |
|
|
|
(3,260 |
) |
Deferred revenue from prepaid rent – Bluebird/Uniti Fiber Midwest
networks |
|
|
- |
|
|
|
174,500 |
|
Settlement payable |
|
|
418,840 |
|
|
|
- |
|
Net cash provided by operating activities |
|
|
157,233 |
|
|
|
616,982 |
|
|
|
|
|
|
|
|
Cash flows from investing activities: |
|
|
|
|
|
|
Acquisition of businesses, net of cash acquired |
|
|
- |
|
|
|
(10,312 |
) |
Bluebird asset acquisition |
|
|
- |
|
|
|
(320,818 |
) |
Proceeds from sale of Uniti Fiber Midwest operations |
|
|
- |
|
|
|
6,400 |
|
Proceeds from sale of real estate, net of cash |
|
|
391,885 |
|
|
|
130,429 |
|
Windstream asset acquisition |
|
|
(73,407 |
) |
|
|
- |
|
Capital expenditures – other |
|
|
(317,084 |
) |
|
|
(350,480 |
) |
Net cash provided by (used in) investing activities |
|
|
1,394 |
|
|
|
(544,781 |
) |
|
|
|
|
|
|
|
Cash flows from financing activities: |
|
|
|
|
|
|
Repayment of senior secured term loan B |
|
|
(2,044,728 |
) |
|
|
- |
|
Principal payment on debt |
|
|
- |
|
|
|
(21,080 |
) |
Dividends paid |
|
|
(135,676 |
) |
|
|
(138,731 |
) |
Payments of contingent consideration |
|
|
(15,713 |
) |
|
|
(32,253 |
) |
Distributions paid to noncontrolling interest |
|
|
(2,322 |
) |
|
|
(3,046 |
) |
Borrowings under revolving credit facility |
|
|
170,000 |
|
|
|
139,000 |
|
Payments under revolving credit facility |
|
|
(635,019 |
) |
|
|
(203,981 |
) |
Finance lease payments |
|
|
(3,702 |
) |
|
|
(4,257 |
) |
Payments for financing costs |
|
|
(50,875 |
) |
|
|
(49,497 |
) |
Common stock issuance, net of costs |
|
|
244,550 |
|
|
|
21,641 |
|
Proceeds from issuance of notes |
|
|
2,250,000 |
|
|
|
345,000 |
|
Proceeds from sale of warrants |
|
|
- |
|
|
|
50,819 |
|
Payment for bond hedge option |
|
|
- |
|
|
|
(70,035 |
) |
Employee stock purchase program |
|
|
676 |
|
|
|
883 |
|
Net share settlement |
|
|
(1,097 |
) |
|
|
(1,834 |
) |
Net cash (used in) provided by financing activities |
|
|
(223,906 |
) |
|
|
32,629 |
|
Effect of exchange rate changes on cash and cash equivalents |
|
|
- |
|
|
|
(43 |
) |
Net (decrease) increase in cash and cash
equivalents |
|
|
(65,279 |
) |
|
|
104,787 |
|
Cash and cash equivalents at beginning of period |
|
|
142,813 |
|
|
|
38,026 |
|
Cash and cash equivalents at end of period |
|
$ |
77,534 |
|
|
$ |
142,813 |
|
|
|
|
|
|
|
|
Preliminary – Unaudited
Uniti Group
Inc.Reconciliation of Net Income to FFO and
AFFO (In thousands, except per share
data)
|
|
Three Months Ended December 31, |
|
Year Ended December 31, |
|
|
2020 |
|
|
|
2019 |
|
|
2020 |
|
|
2019 |
|
Net (loss) income attributable to common
shareholders |
|
$ |
(47,197 |
) |
|
$ |
(11,405 |
) |
|
$ |
(707,388 |
) |
|
$ |
8,384 |
|
Real estate depreciation and
amortization |
|
|
61,336 |
|
|
|
76,281 |
|
|
|
246,713 |
|
|
|
323,527 |
|
Gain on sale of real estate
assets, net of tax |
|
|
459 |
|
|
|
- |
|
|
|
(85,860 |
) |
|
|
(24,420 |
) |
Participating securities’ share
in earnings |
|
|
225 |
|
|
|
248 |
|
|
|
1,078 |
|
|
|
549 |
|
Participating securities’ share
in FFO |
|
|
(225 |
) |
|
|
(371 |
) |
|
|
(1,162 |
) |
|
|
(1,246 |
) |
Adjustments for unconsolidated
entities |
|
|
682 |
|
|
|
- |
|
|
|
1,048 |
|
|
|
- |
|
Adjustments for noncontrolling
interests |
|
|
(922 |
) |
|
|
(1,351 |
) |
|
|
(2,622 |
) |
|
|
(5,857 |
) |
FFO attributable to
common shareholders |
|
|
14,358 |
|
|
|
63,402 |
|
|
|
(548,193 |
) |
|
|
300,937 |
|
Transaction related and other
costs |
|
|
8,531 |
|
|
|
14,825 |
|
|
|
63,875 |
|
|
|
43,708 |
|
Change in fair value of
contingent consideration |
|
|
(923 |
) |
|
|
67 |
|
|
|
7,163 |
|
|
|
(28,463 |
) |
Amortization of deferred
financing costs and debt |
|
|
9,252 |
|
|
|
12,734 |
|
|
|
36,955 |
|
|
|
42,779 |
|
Write off of deferred financing
costs and debt discount |
|
|
- |
|
|
|
- |
|
|
|
73,952 |
|
|
|
- |
|
Stock-based compensation |
|
|
3,275 |
|
|
|
2,878 |
|
|
|
13,721 |
|
|
|
10,808 |
|
Non-real estate depreciation and
amortization |
|
|
17,097 |
|
|
|
21,902 |
|
|
|
82,690 |
|
|
|
82,227 |
|
Settlement expense |
|
|
- |
|
|
|
- |
|
|
|
650,000 |
|
|
|
- |
|
Goodwill impairment |
|
|
71,000 |
|
|
|
- |
|
|
|
71,000 |
|
|
|
- |
|
Straight-line revenues |
|
|
(5,836 |
) |
|
|
1,242 |
|
|
|
(6,872 |
) |
|
|
(208 |
) |
Maintenance capital
expenditures |
|
|
(2,171 |
) |
|
|
(1,727 |
) |
|
|
(7,149 |
) |
|
|
(7,992 |
) |
Amortization of discount on
convertible preferred stock |
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
993 |
|
Cash taxes on tax basis
cancellation of debt |
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
4,590 |
|
Other, net |
|
|
(7,103 |
) |
|
|
(12,973 |
) |
|
|
(32,374 |
) |
|
|
(34,799 |
) |
Adjustments for unconsolidated
entities |
|
|
317 |
|
|
|
- |
|
|
|
1,238 |
|
|
|
- |
|
Adjustments for noncontrolling
interests |
|
|
(1,382 |
) |
|
|
(679 |
) |
|
|
(16,496 |
) |
|
|
(2,122 |
) |
Adjusted FFO attributable
to common shareholders |
|
$ |
106,415 |
|
|
$ |
101,671 |
|
|
$ |
389,510 |
|
|
$ |
412,458 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Reconciliation of Diluted
FFO and AFFO: |
|
|
|
|
|
|
|
|
|
|
|
|
FFO Attributable to common
shareholders – Basic |
|
$ |
14,358 |
|
|
$ |
63,402 |
|
|
$ |
(548,193 |
) |
|
$ |
300,937 |
|
Impact of if-converted dilutive
securities |
|
|
- |
|
|
|
5,257 |
|
|
|
- |
|
|
|
10,613 |
|
FFO Attributable to common
shareholders – Diluted |
|
$ |
14,358 |
|
|
$ |
68,659 |
|
|
$ |
(548,193 |
) |
|
$ |
311,550 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
AFFO Attributable to common
shareholders – Basic |
|
$ |
106,415 |
|
|
$ |
101,671 |
|
|
$ |
389,510 |
|
|
$ |
412,458 |
|
Impact of if-converted dilutive
securities |
|
|
3,450 |
|
|
|
3,450 |
|
|
|
13,800 |
|
|
|
7,015 |
|
AFFO Attributable to common
shareholders – Diluted |
|
$ |
109,865 |
|
|
$ |
105,121 |
|
|
$ |
403,310 |
|
|
$ |
419,473 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average common shares
used to calculate basic earnings (loss) per common share (1) |
|
|
231,262 |
|
|
|
192,140 |
|
|
|
203,600 |
|
|
|
187,358 |
|
Impact of dilutive
non-participating securities |
|
|
611 |
|
|
|
- |
|
|
|
427 |
|
|
|
- |
|
Impact of if-converted dilutive
securities |
|
|
29,777 |
|
|
|
27,758 |
|
|
|
29,777 |
|
|
|
14,222 |
|
Weighted average common shares
used to calculate diluted FFO and AFFO per common share (1) |
|
|
261,650 |
|
|
|
219,898 |
|
|
|
233,804 |
|
|
|
201,580 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Per diluted common
share: |
|
|
|
|
|
|
|
|
|
|
|
|
EPS |
|
$ |
(0.20 |
) |
|
$ |
(0.06 |
) |
|
$ |
(3.47 |
) |
|
$ |
0.04 |
|
FFO |
|
$ |
0.06 |
|
|
$ |
0.31 |
|
|
$ |
(2.69 |
) |
|
$ |
1.55 |
|
AFFO |
|
$ |
0.42 |
|
|
$ |
0.48 |
|
|
$ |
1.72 |
|
|
$ |
2.08 |
|
|
|
|
|
|
|
(1) |
For periods in which FFO or AFFO attributable to common
shareholders is a loss, the weighted average common shares used to
calculate diluted FFO or AFFO per common share is equal to the
weighted average common shares used to calculate basic earnings
(loss) per share. |
Preliminary – Unaudited
Uniti Group
Inc.Reconciliation of EBITDA and Adjusted
EBITDA(In thousands)
|
|
Three Months Ended December
31, |
|
Year EndedDecember 31, |
|
|
|
2020 |
|
|
|
2019 |
|
|
|
2020 |
|
|
|
2019 |
|
Net (loss)
income |
|
$ |
(47,672 |
) |
|
$ |
(11,354 |
) |
|
$ |
(718,812 |
) |
|
$ |
10,908 |
|
Depreciation and
amortization |
|
|
78,433 |
|
|
|
98,183 |
|
|
|
329,403 |
|
|
|
405,754 |
|
Interest expense, net |
|
|
108,701 |
|
|
|
103,270 |
|
|
|
497,128 |
|
|
|
390,112 |
|
Income tax (benefit) expense |
|
|
(7,553 |
) |
|
|
(5,489 |
) |
|
|
(15,203 |
) |
|
|
4,663 |
|
EBITDA |
|
|
131,909 |
|
|
|
184,610 |
|
|
|
92,516 |
|
|
|
811,437 |
|
Stock-based compensation |
|
|
3,275 |
|
|
|
2,878 |
|
|
|
13,721 |
|
|
|
10,808 |
|
Transaction related and other
costs |
|
|
8,531 |
|
|
|
14,825 |
|
|
|
63,875 |
|
|
|
43,708 |
|
Settlement expense |
|
|
- |
|
|
|
- |
|
|
|
650,000 |
|
|
|
- |
|
Goodwill impairment |
|
|
71,000 |
|
|
|
- |
|
|
|
71,000 |
|
|
|
- |
|
Gain on sale of real estate |
|
|
459 |
|
|
|
- |
|
|
|
(86,267 |
) |
|
|
(28,995 |
) |
Adjustments for unconsolidated
entities |
|
|
1,000 |
|
|
|
- |
|
|
|
2,287 |
|
|
|
- |
|
Other (income) expense |
|
|
(483 |
) |
|
|
629 |
|
|
|
11,703 |
|
|
|
(24,219 |
) |
Adjusted EBITDA |
|
$ |
215,691 |
|
|
$ |
202,942 |
|
|
$ |
818,835 |
|
|
$ |
812,739 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted
EBITDA: |
|
|
|
|
|
|
|
|
|
|
|
|
Leasing |
|
$ |
191,545 |
|
|
$ |
182,392 |
|
|
$ |
737,337 |
|
|
$ |
711,119 |
|
Fiber Infrastructure |
|
|
30,836 |
|
|
|
29,182 |
|
|
|
112,289 |
|
|
|
126,754 |
|
Towers |
|
|
- |
|
|
|
(461 |
) |
|
|
77 |
|
|
|
(595 |
) |
Consumer CLEC |
|
|
(84 |
) |
|
|
279 |
|
|
|
(545 |
) |
|
|
1,955 |
|
Corporate |
|
|
(6,606 |
) |
|
|
(8,450 |
) |
|
|
(30,323 |
) |
|
|
(26,494 |
) |
|
|
$ |
215,691 |
|
|
$ |
202,942 |
|
|
$ |
818,835 |
|
|
$ |
812,739 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Annualized Adjusted
EBITDA (1) |
|
$ |
862,764 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
As of December 31,
2020: |
|
|
|
|
|
|
|
|
|
|
|
|
Total Debt (2) |
|
$ |
5,013,724 |
|
|
|
|
|
|
|
|
|
|
Cash and cash equivalents |
|
|
77,534 |
|
|
|
|
|
|
|
|
|
|
Net Debt |
|
$ |
4,936,190 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net Debt/Annualized
Adjusted EBITDA |
|
|
5.72x |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(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 $15.5 million of finance leases and $33.3 million of
finance leases classified within liabilities held for sale, but
excludes $148.6 million of unamortized discounts and deferred
financing costs. |
Uniti Group
Inc.Projected Future Results
(1)(In millions)
|
|
Year Ended December 31, 2021 |
Net income
attributable to common shareholders – Basic |
|
$ 119 to $ 131 |
Noncontrolling interest share
in earnings |
|
2 |
Participating securities’
share in earnings |
|
1 |
Net income
(2) |
|
122 to 134 |
Interest expense, net (3) |
|
439 |
Depreciation and
amortization |
|
299 |
Income tax benefit |
|
(8) |
EBITDA (2) |
|
853 to 865 |
Stock-based compensation |
|
15 |
Gain on sale of operations
(4) |
|
(25) |
Transaction related and other
costs (5) |
|
- |
Adjustment for unconsolidated
entities |
|
3 |
Adjusted EBITDA
(2) |
|
$ 846 to $ 858 |
|
|
|
(1) |
These ranges represent management’s best estimates based on the
underlying assumptions as of the date of this press release.
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. |
(3) |
See “Components of Interest Expense” below. |
(4) |
Represents estimated pre-tax gain on the sale of a portion of our
Northeast operations and certain dark fiber IRU contracts acquired
as a part of the Windstream settlement. |
(5) |
Future transaction related and other costs are not included in our
current outlook. |
Uniti Group
Inc.Projected Future Results
(1)(Per Diluted Share)
|
|
Year Ended December 31, 2021 |
Net income
attributable to common shareholders – Basic |
|
$ 0.51 to $ 0.57 |
Real estate depreciation and
amortization |
|
0.92 |
Participating securities share in
earnings |
|
- |
Participating securities share in
FFO |
|
- |
Adjustments for noncontrolling
interests |
|
(0.01) |
Adjustments for unconsolidated
entities |
|
0.01 |
FFO attributable to
common shareholders – Basic (2) |
|
$ 1.43 to $ 1.48 |
Impact of if-converted
securities |
|
(0.13) |
FFO attributable to
common shareholders – Diluted (2) |
|
$ 1.31 to $ 1.35 |
|
|
|
FFO attributable to
common shareholders – Basic (2) |
|
$ 1.43 to $ 1.48 |
Transaction related and other
costs (3) |
|
- |
Amortization of deferred
financing costs and debt discount (4) |
|
0.18 |
Early tender premium (5) |
|
0.08 |
Accretion of settlement payable
(6) |
|
0.07 |
Stock-based compensation |
|
0.06 |
Gain on sale of operations, net
of tax (7) |
|
(0.11) |
Non-real estate depreciation and
amortization |
|
0.38 |
Straight-line revenues |
|
(0.13) |
Maintenance capital
expenditures |
|
(0.03) |
Other, net |
|
(0.17) |
Adjustments for noncontrolling
interests |
|
(0.01) |
AFFO attributable to
common shareholders – Basic (3) |
|
$ 1.76 to $ 1.81 |
Impact of if-converted
securities |
|
(0.16) |
AFFO attributable to common shareholders – Diluted
(3) |
$ 1.61 to $ 1.65 |
|
|
|
(1) |
These ranges represent management’s best estimates based on the
underlying assumptions as of the date of this press release.
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 to FFO and
AFFO attributable to common shareholders due to rounding. |
(3) |
Future transaction related and other costs are not included in our
current outlook. |
(4) |
Includes the write-off of approximately $20 million of deferred
finance costs related to the tender of our 8.25% Senior Notes due
2023 on February 2, 2021. |
(5) |
Represents the early tender premium paid on the tender of our 8.25%
Senior Notes due 2023 on February 2, 2021. |
(6) |
Represents the accretion of the Windstream settlement payable to
its stated value. At the effective date of the settlement, we
recorded the payable on the balance sheet at its initial fair
value, which will be accreted based on an effective interest rate
of 4.7% and reduced by the scheduled quarterly payments. |
(7) |
Represents estimated after-tax gain on the sale of a portion of our
Northeast operations and certain dark fiber IRU contracts acquired
as a part of the Windstream settlement. |
Components of Interest Expense
(1)(In millions)
|
|
Year Ended December 31, 2021 |
Interest expense on debt
obligations |
|
$ 353 |
Capitalized interest |
|
(2) |
Accretion of Windstream
settlement payable |
|
17 |
Amortization of deferred
financing cost and debt discounts (2) |
|
41 |
Early tender premium (3) |
|
19 |
Swap termination (4) |
|
11 |
Interest expense,
net (4) |
|
$ 439 |
|
|
|
(1) |
These ranges represent management’s best estimates based on the
underlying assumptions as of the date of this press release.
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) |
Includes the write-off of approximately $20 million of deferred
financing costs related to the tender of our 8.25% Senior Notes due
2023 on February 2, 2021. |
(3) |
Represents the early tender premium paid on the tender of our 8.25%
Senior Notes due 2023 on February 2, 2021. |
(4) |
Represents recognition of deferred interest expense attributable to
the discontinuance of hedge accounting on interest rate swaps. |
(5) |
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,
costs associated with Windstream’s bankruptcy, costs associated
with litigation claims made against us, and costs associated with
the implementation of our new enterprise resource planning system,
collectively “Transaction Related and Other Costs”, costs related
to the settlement with Windstream, goodwill impairment charges,
amortization of non-cash rights-of-use, the write off of
unamortized deferred financing costs, costs incurred as a result of
the early repayment of debt, including early tender premiums and
costs associated with the termination of related hedging
activities, gains or losses on dispositions, changes in the fair
value of contingent consideration and financial instruments, and
other similar or infrequent items. Adjusted EBITDA includes
adjustments to reflect the Company’s share of Adjusted EBITDA from
unconsolidated entities. 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,
and includes adjustments to reflect the Company’s share of FFO from
unconsolidated entities. We compute FFO in accordance with NAREIT’s
definition.
The Company defines AFFO, as FFO excluding (i) Transaction
Related and Other Costs; (ii) costs related to the litigation
settlement with Windstream, and accretion on our settlement
obligation as these items are not reflective of ongoing operating
performance; (iii) goodwill impairment charges; (iv) 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, amortization of non-cash rights-of-use, straight
line revenues, non-cash income taxes, 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; and (v) 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, including
costs associated with the termination of related hedging
activities, taxes associated with tax basis cancellation of debt,
gains or losses on dispositions, changes in the fair value of
contingent consideration and financial instruments and similar or
infrequent items less maintenance capital expenditures. AFFO
includes adjustments to reflect the Company’s share of AFFO from
unconsolidated entities. 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
Bill DiTullio, 501-850-0872Vice President, Finance and Investor
Relationsbill.ditullio@uniti.com
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