Uniti Group Inc. (“Uniti” or the “Company”) (Nasdaq: UNIT) today
announced its results for the first quarter 2021.
“Uniti continues to see robust demand across all
of its business segments, translating into the strong results we
reported this quarter. This demand is being driven by further
network densification efforts by our wireless customers in support
of broader rollout of enhanced communication infrastructure
technologies within our markets, including 5G services. We also
continue to make significant progress on our lease-up efforts at
both Uniti Leasing and Uniti Fiber by leveraging our national
network of 125,000 route miles of valuable fiber,” commented Kenny
Gunderman, President and Chief Executive Officer.
Mr. Gunderman continued, “Through our recent
refinancing transactions, Uniti’s financial profile has improved
substantially, providing the Company with increased flexibility to
pursue our strategic initiatives. We continue to 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.”
QUARTERLY RESULTS
Consolidated revenues for the first quarter of
2021 were $272.6 million. Net loss and Adjusted EBITDA were $4.5
million and $214.2 million, respectively, for the same
period. Net loss attributable to common shares was $4.7
million for the period and included $4.1 million of transaction
related and other costs. Adjusted Funds From Operations (“AFFO”)
attributable to common shareholders was $103.1 million, or $0.41
per diluted common share, an increase of 7% when compared to the
first quarter of 2020.
Uniti Fiber contributed $77.7 million of
revenues and $29.7 million of Adjusted EBITDA for the first quarter
of 2021, achieving Adjusted EBITDA margins of approximately 38.3%,
up from 35.6% Adjusted EBITDA margins in the first quarter of 2020,
primarily due to the wind down of our lower margin construction
related business. Uniti Fiber’s net success-based capital
expenditures during the quarter were $34.0 million, and maintenance
capital expenditures were $2.0 million.
Uniti Leasing contributed revenues of $194.9
million and Adjusted EBITDA of $191.5 million for the first
quarter, representing growth of 6% and 5%, respectively, when
compared to the first quarter of 2020. During the quarter, Uniti
Leasing deployed $42.7 million towards growth capital investment
initiatives.
FINANCING TRANSACTIONS
On April 15, 2021, Uniti redeemed all remaining
outstanding 8.25% Senior Unsecured Notes due 2023 (“2023
Notes”).
Uniti received the remaining required regulatory
approvals relating to the previously announced amendment to its
credit agreement on April 17, 2021. As a result, the new and
extended commitments under the Company’s revolving credit facility
that mature in December 2024 now bear interest at a rate of LIBOR
plus 400 basis points based on our current secured leverage
ratio.
On April 20, 2021, the Company closed on the
issuance of $570 million of Senior Secured Notes due April 2028
(“2028 Notes”). The 2028 Notes bear interest at 4.75% and were
issued at par. The proceeds from the offering were used to redeem
in full the outstanding 6.00% Senior Secured Notes due 2023 on May
6, 2021.
LIQUIDITY
At quarter-end, the Company had approximately
$522.5 million of unrestricted cash and cash equivalents, and
undrawn borrowing availability under its revolving credit
agreement. The Company’s leverage ratio at quarter-end was 5.83x
based on Net Debt to Annualized Adjusted EBITDA.
On May 4, 2021, the Company’s Board of Directors
declared a quarterly cash dividend of $0.15 per common share,
payable on July 2, 2021 to stockholders of record on June 18,
2021.
The redemption of the 2023 Notes and 2028 Notes
is expected to generate approximately $25 million of annualized
cash interest savings.
UPDATED FULL YEAR 2021 OUTLOOK
The Company is updating its 2021 outlook for the
impact of our 4.75% senior secured notes offering and related
redemption, the impact of transaction related and other costs
incurred to date, and estimates of depreciation and amortization.
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) |
|
129 |
to |
|
141 |
|
Adjusted EBITDA (2) |
|
846 |
to |
|
858 |
|
Interest expense, net (3) |
|
446 |
to |
|
446 |
|
|
|
|
|
|
|
|
Attributable to common shareholders: |
|
|
|
|
|
|
FFO (2) |
|
337 |
to |
|
349 |
|
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 (800)
708-4540 (or (847) 619-6397 for international callers) and the
conference ID is 50149687. 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
50149687.
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 March 31, 2021, Uniti owns over
125,000 fiber route miles, approximately 7.0 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; 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.
Uniti Group
Inc.Consolidated Balance
Sheets(In thousands, except per share
data)
|
|
March 31, 2021 |
|
December 31, 2020 |
Assets: |
|
|
|
|
Property, plant and equipment, net |
|
$ |
3,329,239 |
|
|
$ |
3,273,353 |
|
Cash and cash equivalents |
|
|
122,466 |
|
|
|
77,534 |
|
Accounts receivable, net |
|
|
51,485 |
|
|
|
62,952 |
|
Goodwill |
|
|
601,878 |
|
|
|
601,878 |
|
Intangible assets, net |
|
|
387,013 |
|
|
|
390,725 |
|
Straight-line revenue
receivable |
|
|
19,557 |
|
|
|
13,107 |
|
Other assets, net |
|
|
108,208 |
|
|
|
152,883 |
|
Investment in unconsolidated
entities |
|
|
65,481 |
|
|
|
66,043 |
|
Deferred income tax assets |
|
|
8,682 |
|
|
|
- |
|
Assets held for sale |
|
|
87,750 |
|
|
|
93,343 |
|
Total Assets |
|
$ |
4,781,759 |
|
|
$ |
4,731,818 |
|
|
|
|
|
|
|
|
Liabilities and
Shareholders’ Deficit |
|
|
|
|
|
|
Liabilities: |
|
|
|
|
|
|
Accounts payable, accrued
expenses and other liabilities, net |
|
$ |
145,568 |
|
|
$ |
146,144 |
|
Settlement payable |
|
|
398,887 |
|
|
|
418,840 |
|
Intangible liabilities, net |
|
|
185,807 |
|
|
|
187,886 |
|
Accrued interest payable |
|
|
68,845 |
|
|
|
95,338 |
|
Deferred revenue |
|
|
1,021,627 |
|
|
|
995,123 |
|
Derivative liability, net |
|
|
19,908 |
|
|
|
22,897 |
|
Dividends payable |
|
|
36,894 |
|
|
|
36,725 |
|
Deferred income tax
liabilities |
|
|
- |
|
|
|
10,540 |
|
Finance lease obligations |
|
|
14,856 |
|
|
|
15,468 |
|
Contingent consideration |
|
|
- |
|
|
|
2,957 |
|
Notes and other debt, net |
|
|
4,988,890 |
|
|
|
4,816,524 |
|
Liabilities held for sale |
|
|
54,167 |
|
|
|
55,752 |
|
Total Liabilities |
|
|
6,935,449 |
|
|
|
6,804,194 |
|
|
|
|
|
|
|
|
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: 231,694 shares at March 31, 2021 and 231,262
shares at December 31, 2020 |
|
|
23 |
|
|
|
23 |
|
Additional paid-in capital |
|
|
1,150,550 |
|
|
|
1,209,141 |
|
Accumulated other comprehensive
loss |
|
|
(17,580 |
) |
|
|
(20,367 |
) |
Distributions in excess of
accumulated earnings |
|
|
(3,355,423 |
) |
|
|
(3,330,455 |
) |
Total Uniti shareholders’
deficit |
|
|
(2,222,430 |
) |
|
|
(2,141,658 |
) |
Noncontrolling interests –
operating partnership units and non-voting convertible preferred
stock |
|
|
68,740 |
|
|
|
69,282 |
|
Total shareholders’ deficit |
|
|
(2,153,690 |
) |
|
|
(2,072,376 |
) |
Total Liabilities and
Shareholders’ Deficit |
|
$ |
4,781,759 |
|
|
$ |
4,731,818 |
|
Uniti Group
Inc.Consolidated Statements of
Operations(In thousands, except per share
data)
|
|
|
Three Months Ended March 31, |
|
|
|
2021 |
|
|
|
2020 |
|
Revenues: |
|
|
|
|
|
|
Leasing |
|
$ |
194,936 |
|
|
$ |
184,352 |
|
Fiber Infrastructure |
|
|
77,650 |
|
|
|
77,407 |
|
Towers |
|
|
- |
|
|
|
3,720 |
|
Consumer CLEC |
|
|
- |
|
|
|
683 |
|
Total revenues |
|
|
272,586 |
|
|
|
266,162 |
|
|
|
|
|
|
|
|
Costs and
expenses: |
|
|
|
|
|
|
Interest expense, net |
|
|
140,581 |
|
|
|
178,393 |
|
Depreciation and
amortization |
|
|
70,964 |
|
|
|
86,121 |
|
General and administrative
expense |
|
|
25,823 |
|
|
|
27,133 |
|
Operating expense (exclusive of
depreciation and amortization) |
|
|
38,084 |
|
|
|
40,310 |
|
Transaction related and other
costs |
|
|
4,137 |
|
|
|
15,972 |
|
Other expense, net |
|
|
454 |
|
|
|
3,075 |
|
Total costs and expenses |
|
|
280,043 |
|
|
|
351,004 |
|
|
|
|
|
|
|
|
Loss before income taxes and
equity in earnings from unconsolidated entities |
|
|
(7,457 |
) |
|
|
(84,842 |
) |
Income tax benefit |
|
|
2,557 |
|
|
|
4,576 |
|
Equity in earnings from
unconsolidated entities |
|
|
398 |
|
|
|
- |
|
Net loss |
|
|
(4,502 |
) |
|
|
(80,266 |
) |
Net loss attributable to
noncontrolling interests |
|
|
(64 |
) |
|
|
(1,413 |
) |
Net loss attributable to
shareholders |
|
|
(4,438 |
) |
|
|
(78,853 |
) |
Participating securities’ share
in earnings |
|
|
(248 |
) |
|
|
(200 |
) |
Dividends declared on convertible
preferred stock |
|
|
(3 |
) |
|
|
(3 |
) |
Net loss attributable to
common shareholders |
|
$ |
(4,689 |
) |
|
$ |
(79,056 |
) |
|
|
|
|
|
|
|
Net loss attributable to
common shareholders – Basic |
|
$ |
(4,689 |
) |
|
$ |
(79,056 |
) |
Impact of non-participating
securities |
|
|
- |
|
|
|
- |
|
Net loss attributable to common
shareholders – Diluted |
|
$ |
(4,689 |
) |
|
$ |
(79,056 |
) |
Weighted average number
of common shares outstanding: |
|
|
|
|
|
|
Basic |
|
|
231,469 |
|
|
|
192,236 |
|
Diluted |
|
|
231,469 |
|
|
|
192,236 |
|
|
|
|
|
|
|
|
Loss per common
share: |
|
|
|
|
|
|
Basic |
|
$ |
(0.02 |
) |
|
$ |
(0.41 |
) |
Diluted |
|
$ |
(0.02 |
) |
|
$ |
(0.41 |
) |
|
|
|
|
|
|
|
Uniti Group
Inc.Consolidated Statements of Cash
Flows(In thousands)
|
|
Three Months Ended March 31, |
|
|
2021 |
|
|
2020 |
|
Cash flow from
operating activities: |
|
|
|
|
Net loss |
|
$ |
(4,502 |
) |
|
$ |
(80,266 |
) |
Adjustments to reconcile net loss to net cash provided by operating
activities: |
|
|
|
|
|
|
Depreciation and amortization |
|
|
70,964 |
|
|
|
86,121 |
|
Amortization of deferred financing costs and debt discount |
|
|
4,959 |
|
|
|
9,708 |
|
Loss on extinguishment of debt |
|
|
37,965 |
|
|
|
73,952 |
|
Interest rate swap termination |
|
|
2,829 |
|
|
|
1,666 |
|
Deferred income taxes |
|
|
(3,428 |
) |
|
|
(4,919 |
) |
Equity in earnings of unconsolidated entities |
|
|
(398 |
) |
|
|
- |
|
Distributions of cumulative earnings from unconsolidated
entities |
|
|
960 |
|
|
|
- |
|
Cash paid for interest rate swap settlement |
|
|
(2,989 |
) |
|
|
(269 |
) |
Straight-line revenues |
|
|
(6,906 |
) |
|
|
109 |
|
Stock-based compensation |
|
|
3,335 |
|
|
|
2,995 |
|
Change in fair value of contingent consideration |
|
|
21 |
|
|
|
1,495 |
|
Loss on asset disposals |
|
|
134 |
|
|
|
1,923 |
|
Accretion of settlement obligation |
|
|
4,553 |
|
|
|
- |
|
Other |
|
|
181 |
|
|
|
(97 |
) |
Changes in assets and liabilities, net of acquisitions: |
|
|
|
|
|
|
Accounts receivable |
|
|
11,466 |
|
|
|
3,246 |
|
Other assets |
|
|
47,630 |
|
|
|
(8,083 |
) |
Accounts payable, accrued expenses and other liabilities |
|
|
(40,110 |
) |
|
|
44,691 |
|
Net cash provided by operating activities |
|
|
126,664 |
|
|
|
132,272 |
|
|
|
|
|
|
|
|
Cash flows from investing activities: |
|
|
|
|
|
|
Capital expenditures |
|
|
(84,377 |
) |
|
|
(75,093 |
) |
Net cash used in investing activities |
|
|
(84,377 |
) |
|
|
(75,093 |
) |
|
|
|
|
|
|
|
Cash flows from financing activities: |
|
|
|
|
|
|
Repayment of debt |
|
|
(1,051,181 |
) |
|
|
(2,044,728 |
) |
Dividends paid |
|
|
(34,961 |
) |
|
|
(42,519 |
) |
Payment of settlement obligation |
|
|
(24,505 |
) |
|
|
- |
|
Payments of contingent consideration |
|
|
(2,979 |
) |
|
|
(7,086 |
) |
Distributions paid to noncontrolling interest |
|
|
(520 |
) |
|
|
(762 |
) |
Borrowings under revolving credit facility |
|
|
105,000 |
|
|
|
- |
|
Payments under revolving credit facility |
|
|
(55,000 |
) |
|
|
(196,700 |
) |
Finance lease payments |
|
|
(710 |
) |
|
|
(1,026 |
) |
Payments for financing costs |
|
|
(22,931 |
) |
|
|
(47,775 |
) |
Payment of tender premium |
|
|
(17,550 |
) |
|
|
- |
|
Proceeds from issuance of notes |
|
|
1,110,000 |
|
|
|
2,250,000 |
|
Employee stock purchase program |
|
|
288 |
|
|
|
306 |
|
Payments related to tax withholding for share-based
compensation |
|
|
(2,306 |
) |
|
|
(373 |
) |
Net cash provided by (used in) financing activities |
|
|
2,645 |
|
|
|
(90,663 |
) |
Net increase (decrease) in cash and cash
equivalents |
|
|
44,932 |
|
|
|
(33,484 |
) |
Cash and cash equivalents at beginning of period |
|
|
77,534 |
|
|
|
142,813 |
|
Cash and cash equivalents at end of period |
|
|
122,466 |
|
|
$ |
109,329 |
|
|
|
|
|
|
|
|
Uniti Group
Inc.Reconciliation of Net Income to FFO and
AFFO (In thousands, except per share
data)
|
|
|
Three Months Ended March 31, |
|
|
|
2021 |
|
|
2020 |
|
Net loss attributable to common shareholders |
|
|
$ |
(4,689 |
) |
|
$ |
(79,056 |
) |
Real estate depreciation and
amortization |
|
|
|
53,377 |
|
|
|
63,952 |
|
Participating securities’ share
in earnings |
|
|
|
248 |
|
|
|
200 |
|
Participating securities’ share
in FFO |
|
|
|
(344 |
) |
|
|
(200 |
) |
Adjustments for unconsolidated
entities |
|
|
|
616 |
|
|
|
- |
|
Adjustments for noncontrolling
interests |
|
|
|
(796 |
) |
|
|
(1,132 |
) |
FFO attributable to
common shareholders |
|
|
|
48,412 |
|
|
|
(16,236 |
) |
Transaction related and other
costs |
|
|
|
4,137 |
|
|
|
15,972 |
|
Change in fair value of
contingent consideration |
|
|
|
21 |
|
|
|
1,495 |
|
Amortization of deferred
financing costs and debt |
|
|
|
4,959 |
|
|
|
9,708 |
|
Write off of deferred financing
costs and debt discount |
|
|
|
20,415 |
|
|
|
73,952 |
|
Payment of tender premium |
|
|
|
17,550 |
|
|
|
- |
|
Stock-based compensation |
|
|
|
3,335 |
|
|
|
2,995 |
|
Non-real estate depreciation and
amortization |
|
|
|
17,587 |
|
|
|
22,169 |
|
Straight-line revenues |
|
|
|
(6,906 |
) |
|
|
109 |
|
Maintenance capital
expenditures |
|
|
|
(1,976 |
) |
|
|
(1,108 |
) |
Other, net |
|
|
|
(3,970 |
) |
|
|
(10,454 |
) |
Adjustments for unconsolidated
entities |
|
|
|
356 |
|
|
|
- |
|
Adjustments for noncontrolling
interests |
|
|
|
(818 |
) |
|
|
(2,022 |
) |
Adjusted FFO attributable
to common shareholders |
|
|
$ |
103,102 |
|
|
$ |
96,580 |
|
|
|
|
|
|
|
|
|
Reconciliation of Diluted
FFO and AFFO: |
|
|
|
|
|
|
|
FFO Attributable to common
shareholders – Basic |
|
|
$ |
48,412 |
|
|
$ |
(16,236 |
) |
Impact of if-converted dilutive
securities |
|
|
|
2,974 |
|
|
|
- |
|
FFO Attributable to common
shareholders – Diluted |
|
|
$ |
51,386 |
|
|
$ |
(16,236 |
) |
|
|
|
|
|
|
|
|
AFFO Attributable to common
shareholders – Basic |
|
|
$ |
103,102 |
|
|
$ |
96,580 |
|
Impact of if-converted dilutive
securities |
|
|
|
3,450 |
|
|
|
3,450 |
|
AFFO Attributable to common
shareholders – Diluted |
|
|
$ |
106,552 |
|
|
$ |
100,030 |
|
|
|
|
|
|
|
|
|
Weighted average common shares
used to calculate basic earnings (loss) per common share (1) |
|
|
|
231,469 |
|
|
|
192,236 |
|
Impact of dilutive
non-participating securities |
|
|
|
541 |
|
|
|
- |
|
Impact of if-converted dilutive
securities |
|
|
|
30,052 |
|
|
|
28,868 |
|
Weighted average common shares
used to calculate diluted FFO and AFFO per common share (1) |
|
|
|
262,062 |
|
|
|
221,104 |
|
|
|
|
|
|
|
|
|
Per diluted common
share: |
|
|
|
|
|
|
|
EPS |
|
|
$ |
(0.02 |
) |
|
$ |
(0.41 |
) |
FFO |
|
|
$ |
0.20 |
|
|
$ |
(0.08 |
) |
AFFO |
|
|
$ |
0.41 |
|
|
$ |
0.45 |
|
|
|
|
|
|
|
|
|
________________________
(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.
Uniti Group
Inc.Reconciliation of EBITDA and Adjusted
EBITDA(In thousands)
|
|
Three Months Ended March 31, |
|
|
2021 |
|
2020 |
Net loss |
|
$ |
(4,502 |
) |
|
$ |
(80,266 |
) |
Depreciation and
amortization |
|
|
70,964 |
|
|
|
86,121 |
|
Interest expense, net |
|
|
140,581 |
|
|
|
178,393 |
|
Income tax benefit |
|
|
(2,557 |
) |
|
|
(4,576 |
) |
EBITDA |
|
|
204,486 |
|
|
|
179,672 |
|
Stock-based compensation |
|
|
3,335 |
|
|
|
2,995 |
|
Transaction related and other
costs |
|
|
4,137 |
|
|
|
15,972 |
|
Adjustments for unconsolidated
entities |
|
|
972 |
|
|
|
- |
|
Other (income) expense |
|
|
1,318 |
|
|
|
3,075 |
|
Adjusted EBITDA |
|
$ |
214,248 |
|
|
$ |
201,714 |
|
|
|
|
|
|
|
|
Adjusted
EBITDA: |
|
|
|
|
|
|
Leasing |
|
$ |
191,497 |
|
|
$ |
181,879 |
|
Fiber Infrastructure |
|
|
29,721 |
|
|
|
27,541 |
|
Towers |
|
|
- |
|
|
|
(8 |
) |
Consumer CLEC |
|
|
- |
|
|
|
17 |
|
Corporate |
|
|
(6,970 |
) |
|
|
(7,715 |
) |
|
|
$ |
214,248 |
|
|
$ |
201,714 |
|
|
|
|
|
|
|
|
Annualized Adjusted
EBITDA (1) |
|
$ |
856,992 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
As of March 31,
2021: |
|
|
|
|
|
|
Total Debt (2) |
|
$ |
5,121,465 |
|
|
|
|
Cash and cash equivalents |
|
|
122,466 |
|
|
|
|
Net Debt |
|
$ |
4,998,999 |
|
|
|
|
|
|
|
|
|
|
|
Net Debt/Annualized
Adjusted EBITDA |
|
|
5.83x |
|
|
|
|
________________________
(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 $14.9 million
of finance leases and $32.8 million of finance leases classified
within liabilities held for sale, but excludes $84.9 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 |
|
$ 129 to $ 141 |
Noncontrolling interest share
in earnings |
|
2 |
Participating securities’
share in earnings |
|
1 |
Net income
(2) |
|
132 to 144 |
Interest expense, net (3) |
|
446 |
Depreciation and
amortization |
|
278 |
Income tax benefit |
|
(8) |
EBITDA (2) |
|
849 to 861 |
Stock-based compensation |
|
15 |
Gain on sale of operations
(4) |
|
(25) |
Transaction related and other
costs (5) |
|
4 |
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 |
|
$ 0.56 to $ 0.61 |
Real estate depreciation and
amortization |
|
0.90 |
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) |
|
$ 1.45 to $ 1.51 |
Impact of if-converted
securities |
|
(0.13) |
FFO attributable to
common shareholders – Diluted (2) |
|
$ 1.33 to $ 1.37 |
|
|
|
FFO attributable to
common shareholders – Basic (2) |
|
$ 1.45 to $ 1.51 |
Transaction related and other
costs (3) |
|
0.02 |
Amortization of deferred
financing costs and debt discount (4) |
|
0.18 |
Premium on early retirement of
debt (5) |
|
0.11 |
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 |
|
0.30 |
Straight-line revenues |
|
(0.13) |
Maintenance capital
expenditures |
|
(0.03) |
Other, net |
|
(0.17) |
Adjustments for noncontrolling
interests |
|
- |
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 $26 million of deferred financing costs related to
the retirement of our 8.25% Senior Notes due 2023, and of our 6.00%
Senior Notes due 2023.(5) Represents the premium paid on the
retirement of our 8.25% Senior Notes due 2023, and our 6.00% Senior
Notes due 2023.(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 |
|
$351 |
Capitalized interest |
|
(2) |
Accretion of Windstream
settlement payable |
|
17 |
Amortization of deferred
financing cost and debt discounts (2) |
|
43 |
Premium on early retirement of
debt (3) |
|
26 |
Swap termination (4) |
|
11 |
Interest expense,
net (5) |
|
$446 |
________________________
(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 $26 million
of deferred financing costs related to the retirement of our 8.25%
Senior Notes due 2023 and of our 6.00% Senior Notes due
2023.(3) Represents the premium paid on the retirement of our
8.25% Senior Notes due 2023, and our 6.00% Senior Notes due
2023.(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
early tender premiums and 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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