Uniti Group Inc. (“Uniti” or the “Company”) (Nasdaq: UNIT) today
announced its results for the second quarter 2021.
“Uniti delivered another strong quarter of
results including consolidated bookings during the quarter of
approximately $1.0 million in monthly recurring revenue,
representing an increase of over 80% from consolidated bookings in
the first quarter of 2021, and industry leading monthly churn of
0.2%. Demand for our fiber infrastructure remains very strong and
is fueled by the continued virtualization of our society,”
commented Kenny Gunderman, President and Chief Executive
Officer.
Mr. Gunderman continued, “Given the tailwinds we
are seeing for more investment needed by our customers to enable 5G
networks, fiber to the home, and greater cloud-based connectivity,
we expect these strong demand trends will continue for the
foreseeable future.”
QUARTERLY RESULTS
Consolidated revenues for the second quarter of
2021 were $268.2 million. Net income and Adjusted EBITDA were $49.6
million and $215.7 million, respectively, for the same
period. Net income attributable to common shares was
$48.6 million for the period and included a $28.1 million gain on
the sale of Uniti Fiber’s Northeast operations and certain dark
fiber contracts relating to the Everstream transaction, and $0.4
million of transaction related and other costs. Adjusted Funds From
Operations (“AFFO”) attributable to common shareholders was $103.2
million, or $0.41 per diluted common share, an increase of 10% when
compared to the second quarter of 2020.
Uniti Fiber contributed $72.1 million of
revenues and $29.4 million of Adjusted EBITDA for the second
quarter of 2021, achieving Adjusted EBITDA margins of approximately
40.8%, up from 36.1% Adjusted EBITDA margins in the second quarter
of 2020. Uniti Fiber’s net success-based capital expenditures
during the quarter were $37.4 million.
Uniti Leasing contributed revenues of $196.1
million and Adjusted EBITDA of $192.1 million for the second
quarter, representing growth of 6% and 5%, respectively, when
compared to the second quarter of 2020. During the quarter, Uniti
Leasing deployed capital expenditures of $50.0 million primarily
related to the construction of over 1,500 new route miles of
valuable fiber infrastructure.
INVESTMENT TRANSACTION
On June 1, 2021, Uniti announced it had
completed its previously mentioned strategic transaction with
Everstream Solutions LLC (“Everstream”). As part of the transaction
that was initially announced on November 9, 2020, Uniti entered
into two 20 year IRU agreements with Everstream on Uniti-owned
fiber. In addition, Uniti sold to Everstream a portion of Uniti
Fiber’s Northeast operations and certain dark fiber IRU customer
contracts acquired as part of the Windstream settlement.
Total cash consideration to Uniti, including
upfront IRU payments, was approximately $135 million. In addition
to the upfront proceeds, Uniti will receive fees of approximately
$3 million annually from Everstream over the initial 20 year term
of the IRU lease agreements, subject to an annual escalator of
2%.
LIQUIDITY
At quarter-end, the Company had approximately
$574 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 5.65x based on Net Debt
to Annualized Adjusted EBITDA.
On August 3, 2021, the Company’s Board of
Directors declared a quarterly cash dividend of $0.15 per common
share, payable on October 1, 2021, to stockholders of record on
September 17, 2021.
UPDATED FULL YEAR 2021 OUTLOOK
The Company is updating its 2021 outlook
primarily for the impact of the gain on sale of operations and
income tax expense related to the Everstream transaction, the
impact of transaction-related and other costs incurred to date, and
revised estimates of interest expense. Our outlook excludes future
acquisitions, capital market transactions, and future
transaction-related and other costs not mentioned herein.
The Company’s consolidated outlook for 2021 is as follows (in
millions):
|
Full Year 2021 |
|
Midpoint Growth Rate Compared to Prior
Year(1) |
Revenue |
$ |
1,083 |
to |
$ |
1,094 |
|
2% |
|
Net income attributable to common shareholders (2) |
|
123 |
to |
|
135 |
|
|
Adjusted EBITDA (3) |
|
846 |
to |
|
858 |
|
4% |
|
Interest expense, net (4) |
|
441 |
to |
|
441 |
|
|
|
|
|
|
|
|
|
|
Attributable to common shareholders: |
|
|
|
|
|
|
|
FFO (3) |
|
331 |
to |
|
343 |
|
|
AFFO (3) |
|
408 |
to |
|
420 |
|
6% |
|
|
|
|
|
|
|
|
|
Weighted-average common shares outstanding – diluted |
|
263 |
to |
|
263 |
|
|
________________________ |
|
|
|
|
|
|
|
1. Represents growth rate at the midpoint of 2021 full
year outlook compared to 2020 full year actuals. 2.
Includes $28 million of gain relating to the Everstream
Transaction.3. See “Non-GAAP Financial Measures”
below.4. 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 6138328. 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
6138328.
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 fiber and other wireless solutions for the
communications industry. As of June 30, 2021, Uniti owns
approximately 123,000 fiber route miles, 7.1 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, expectations regarding strong demand trends, 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; 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; 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)
|
|
June 30, 2021 |
|
December 31, 2020 |
Assets: |
|
|
|
|
Property, plant and equipment, net |
|
$ |
3,400,755 |
|
|
$ |
3,273,353 |
|
Cash and cash equivalents |
|
|
108,536 |
|
|
|
77,534 |
|
Accounts receivable, net |
|
|
42,986 |
|
|
|
62,952 |
|
Goodwill |
|
|
601,878 |
|
|
|
601,878 |
|
Intangible assets, net |
|
|
379,524 |
|
|
|
390,725 |
|
Straight-line revenue
receivable |
|
|
26,278 |
|
|
|
13,107 |
|
Other assets, net |
|
|
115,730 |
|
|
|
152,883 |
|
Investment in unconsolidated
entities |
|
|
65,038 |
|
|
|
66,043 |
|
Deferred income tax assets,
net |
|
|
4,649 |
|
|
|
- |
|
Assets held for sale |
|
|
- |
|
|
|
93,343 |
|
Total Assets |
|
$ |
4,745,374 |
|
|
$ |
4,731,818 |
|
|
|
|
|
|
|
|
Liabilities and
Shareholders’ Deficit |
|
|
|
|
|
|
Liabilities: |
|
|
|
|
|
|
Accounts payable, accrued
expenses and other liabilities, net |
|
$ |
136,577 |
|
|
$ |
146,144 |
|
Settlement payable |
|
|
378,718 |
|
|
|
418,840 |
|
Intangible liabilities, net |
|
|
183,133 |
|
|
|
187,886 |
|
Accrued interest payable |
|
|
105,922 |
|
|
|
95,338 |
|
Deferred revenue |
|
|
1,122,445 |
|
|
|
995,123 |
|
Derivative liability, net |
|
|
16,786 |
|
|
|
22,897 |
|
Dividends payable |
|
|
36,326 |
|
|
|
36,725 |
|
Deferred income tax liabilities,
net |
|
|
- |
|
|
|
10,540 |
|
Finance lease obligations |
|
|
14,497 |
|
|
|
15,468 |
|
Contingent consideration |
|
|
- |
|
|
|
2,957 |
|
Notes and other debt, net |
|
|
4,884,410 |
|
|
|
4,816,524 |
|
Liabilities held for sale |
|
|
- |
|
|
|
55,752 |
|
Total Liabilities |
|
|
6,878,814 |
|
|
|
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: 231,805 shares at June 30, 2021 and 231,262 shares
at December 31, 2020 |
|
|
23 |
|
|
|
23 |
|
Additional paid-in capital |
|
|
1,153,707 |
|
|
|
1,209,141 |
|
Accumulated other comprehensive
loss |
|
|
(14,792) |
|
|
|
(20,367) |
|
Distributions in excess of
accumulated earnings |
|
|
(3,341,371) |
|
|
|
(3,330,455) |
|
Total Uniti shareholders’
deficit |
|
|
(2,202,433) |
|
|
|
(2,141,658) |
|
Noncontrolling interests –
operating partnership units and non-voting convertible preferred
stock |
|
|
68,993 |
|
|
|
69,282 |
|
Total shareholders’ deficit |
|
|
(2,133,440) |
|
|
|
(2,072,376) |
|
Total Liabilities and
Shareholders’ Deficit |
|
$ |
4,745,374 |
|
|
$ |
4,731,818 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Uniti Group
Inc.Consolidated Statements of
Operations(In thousands, except per share
data)
|
Three Months Ended June 30, |
|
|
Six Months Ended June 30, |
|
|
2021 |
|
|
|
2020 |
|
|
|
2021 |
|
|
|
2020 |
|
Revenues: |
|
|
|
|
|
|
|
|
|
|
|
Leasing |
$ |
196,057 |
|
|
$ |
185,320 |
|
|
$ |
390,993 |
|
|
$ |
369,672 |
|
Fiber Infrastructure |
|
72,123 |
|
|
|
79,140 |
|
|
|
149,773 |
|
|
|
156,547 |
|
Towers |
|
- |
|
|
|
2,392 |
|
|
|
- |
|
|
|
6,112 |
|
Consumer CLEC |
|
- |
|
|
|
(32) |
|
|
|
- |
|
|
|
651 |
|
Total revenues |
|
268,180 |
|
|
|
266,820 |
|
|
|
540,766 |
|
|
|
532,982 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Costs and
expenses: |
|
|
|
|
|
|
|
|
|
|
|
Interest expense, net |
|
106,388 |
|
|
|
107,243 |
|
|
|
246,969 |
|
|
|
285,636 |
|
Depreciation and
amortization |
|
69,671 |
|
|
|
84,969 |
|
|
|
140,635 |
|
|
|
171,090 |
|
General and administrative
expense |
|
24,900 |
|
|
|
27,894 |
|
|
|
50,723 |
|
|
|
55,027 |
|
Operating expense (exclusive of
depreciation and amortization) |
|
33,185 |
|
|
|
40,167 |
|
|
|
71,269 |
|
|
|
80,477 |
|
Settlement expense |
|
- |
|
|
|
650,000 |
|
|
|
- |
|
|
|
650,000 |
|
Transaction related and other
costs |
|
424 |
|
|
|
18,556 |
|
|
|
4,561 |
|
|
|
34,528 |
|
Gain on sale of real estate |
|
(442) |
|
|
|
(63,818) |
|
|
|
(442) |
|
|
|
(63,818) |
|
Gain on sale of operations |
|
(28,143) |
|
|
|
- |
|
|
|
(28,143) |
|
|
|
- |
|
Other (income) expense |
|
8,021 |
|
|
|
6,013 |
|
|
|
8,475 |
|
|
|
9,088 |
|
Total costs and expenses |
|
214,004 |
|
|
|
871,024 |
|
|
|
494,047 |
|
|
|
1,222,028 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Income (loss) before income taxes
and equity in earnings from unconsolidated entities |
|
54,176 |
|
|
|
(604,204) |
|
|
|
46,719 |
|
|
|
(689,046) |
|
Income tax expense (benefit) |
|
5,084 |
|
|
|
(5,875) |
|
|
|
2,527 |
|
|
|
(10,451) |
|
Equity in (earnings) from
unconsolidated entities |
|
(547) |
|
|
|
- |
|
|
|
(945) |
|
|
|
- |
|
Net income
(loss) |
|
49,639 |
|
|
|
(598,329) |
|
|
|
45,137 |
|
|
|
(678,595) |
|
Net income (loss) attributable to
noncontrolling interests |
|
732 |
|
|
|
(10,585) |
|
|
|
668 |
|
|
|
(11,998) |
|
Net income (loss)
attributable to shareholders |
|
48,907 |
|
|
|
(587,744) |
|
|
|
44,469 |
|
|
|
(666,597) |
|
Participating securities’ share
in earnings |
|
(333) |
|
|
|
(424) |
|
|
|
(581) |
|
|
|
(624) |
|
Dividends declared on convertible
preferred stock |
|
(2) |
|
|
|
(1) |
|
|
|
(5) |
|
|
|
(4) |
|
Net income (loss)
attributable to common shareholders |
$ |
48,572 |
|
|
$ |
(588,169) |
|
|
$ |
43,883 |
|
|
$ |
(667,225) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income (loss) attributable
to common shareholders – Basic |
$ |
48,572 |
|
|
$ |
(588,169) |
|
|
$ |
43,883 |
|
|
$ |
(667,225) |
|
Impact of if-converted
securities |
|
2,974 |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
Net income (loss) attributable to
common shareholders – Diluted |
$ |
51,546 |
|
|
$ |
(588,169) |
|
|
$ |
43,883 |
|
|
$ |
(667,225) |
|
Weighted average number
of common shares outstanding: |
|
|
|
|
|
|
|
|
|
|
|
Basic |
|
231,801 |
|
|
|
192,479 |
|
|
|
231,636 |
|
|
|
192,358 |
|
Diluted |
|
262,268 |
|
|
|
192,479 |
|
|
|
231,862 |
|
|
|
192,358 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings (loss) per
common share: |
|
|
|
|
|
|
|
|
|
|
|
Basic |
$ |
0.21 |
|
|
$ |
(3.06) |
|
|
$ |
0.19 |
|
|
$ |
(3.47) |
|
Diluted |
$ |
0.20 |
|
|
$ |
(3.06) |
|
|
$ |
0.19 |
|
|
$ |
(3.47) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Uniti Group
Inc.Consolidated Statements of Cash
Flows(In thousands)
|
|
Six Months Ended June 30, |
|
|
2021 |
|
|
2020 |
|
Cash flow from
operating activities: |
|
|
|
|
Net income (loss) |
|
$ |
45,137 |
|
|
$ |
(678,595) |
|
Adjustments to reconcile net loss to net cash provided by operating
activities: |
|
|
|
|
|
|
Depreciation and amortization |
|
|
140,635 |
|
|
|
171,090 |
|
Amortization of deferred financing costs and debt discount |
|
|
9,371 |
|
|
|
18,666 |
|
Loss on extinguishment of debt |
|
|
43,369 |
|
|
|
73,952 |
|
Interest rate swap termination |
|
|
5,658 |
|
|
|
4,496 |
|
Deferred income taxes |
|
|
605 |
|
|
|
(11,209) |
|
Equity in earnings of unconsolidated entities |
|
|
(945) |
|
|
|
- |
|
Distributions of cumulative earnings from unconsolidated
entities |
|
|
1,950 |
|
|
|
- |
|
Cash paid for interest rate swap settlement |
|
|
(6,110) |
|
|
|
(2,251) |
|
Straight-line revenues |
|
|
(14,215) |
|
|
|
711 |
|
Stock-based compensation |
|
|
6,797 |
|
|
|
7,105 |
|
Change in fair value of contingent consideration |
|
|
21 |
|
|
|
6,140 |
|
Gain on sale of real estate |
|
|
(442) |
|
|
|
(63,818) |
|
Gain on sale of operations |
|
|
(28,143) |
|
|
|
- |
|
(Gain) loss on asset disposals |
|
|
(218) |
|
|
|
672 |
|
Accretion of settlement obligation |
|
|
8,889 |
|
|
|
- |
|
Other |
|
|
143 |
|
|
|
(195) |
|
Changes in assets and liabilities, net of acquisitions: |
|
|
|
|
|
|
Accounts receivable |
|
|
19,965 |
|
|
|
6,263 |
|
Other assets |
|
|
39,019 |
|
|
|
(8,285) |
|
Accounts payable, accrued expenses and other liabilities |
|
|
46,991 |
|
|
|
51,539 |
|
Settlement payable |
|
|
- |
|
|
|
650,000 |
|
Net cash provided by operating activities |
|
|
318,477 |
|
|
|
226,281 |
|
|
|
|
|
|
|
|
Cash flows from investing activities: |
|
|
|
|
|
|
Other capital expenditures |
|
|
(177,934) |
|
|
|
(134,035) |
|
Proceeds from sale of real estate, net of cash |
|
|
1,034 |
|
|
|
225,149 |
|
Proceeds from sale of operations |
|
|
62,113 |
|
|
|
- |
|
Proceeds from sale of other equipment |
|
|
399 |
|
|
|
- |
|
Net cash (used in) provided by investing activities |
|
|
(114,388) |
|
|
|
91,114 |
|
|
|
|
|
|
|
|
Cash flows from financing activities: |
|
|
|
|
|
|
Repayment of debt |
|
|
(1,660,000) |
|
|
|
(2,044,728) |
|
Proceeds from issuance of notes |
|
|
1,680,000 |
|
|
|
2,250,000 |
|
Dividends paid |
|
|
(70,386) |
|
|
|
(71,645) |
|
Payment of settlement obligation |
|
|
(49,011) |
|
|
|
- |
|
Payments of contingent consideration |
|
|
(2,979) |
|
|
|
(7,086) |
|
Distributions paid to noncontrolling interests |
|
|
(1,039) |
|
|
|
(1,282) |
|
Borrowings under revolving credit facility |
|
|
205,000 |
|
|
|
10,000 |
|
Payments under revolving credit facility |
|
|
(220,000) |
|
|
|
(456,700) |
|
Finance lease payments |
|
|
(1,393) |
|
|
|
(1,979) |
|
Payments for financing costs |
|
|
(25,156) |
|
|
|
(47,775) |
|
Costs related to the early repayment of debt |
|
|
(25,800) |
|
|
|
- |
|
Employee stock purchase program |
|
|
319 |
|
|
|
306 |
|
Payments related to tax withholding for stock-based
compensation |
|
|
(2,642) |
|
|
|
(1,050) |
|
Net cash used in financing activities |
|
|
(173,087) |
|
|
|
(371,939) |
|
Net increase (decrease) in cash and cash
equivalents |
|
|
31,002 |
|
|
|
(54,544) |
|
Cash and cash equivalents at beginning of period |
|
|
77,534 |
|
|
|
142,813 |
|
Cash and cash equivalents at end of period |
|
|
108,536 |
|
|
$ |
88,269 |
|
|
|
|
|
|
|
|
Uniti Group
Inc.Reconciliation of Net Income to FFO and
AFFO (In thousands, except per share
data)
|
|
Three Months Ended June 30, |
|
Six Months Ended June 30, |
|
|
2021 |
|
|
|
2020 |
|
|
2021 |
|
|
2020 |
|
Net income (loss) attributable to common
shareholders |
|
$ |
48,572 |
|
|
$ |
(588,169) |
|
|
$ |
43,883 |
|
|
$ |
(667,225) |
|
Real estate depreciation and
amortization |
|
|
52,178 |
|
|
|
62,107 |
|
|
|
105,555 |
|
|
|
126,059 |
|
Gain on sale of real estate
assets, net of tax |
|
|
(442) |
|
|
|
(63,818) |
|
|
|
(442) |
|
|
|
(63,818) |
|
Participating securities’ share
in earnings |
|
|
333 |
|
|
|
424 |
|
|
|
581 |
|
|
|
624 |
|
Participating securities’ share
in FFO |
|
|
(681) |
|
|
|
(406) |
|
|
|
(1,025) |
|
|
|
(606) |
|
Adjustments for unconsolidated
entities |
|
|
614 |
|
|
|
- |
|
|
|
1,230 |
|
|
|
- |
|
Adjustments for noncontrolling
interests |
|
|
(771) |
|
|
|
30 |
|
|
|
(1,567) |
|
|
|
(1,102) |
|
FFO attributable to
common shareholders |
|
|
99,803 |
|
|
|
(589,832) |
|
|
|
148,215 |
|
|
|
(606,068) |
|
Transaction related and other
costs |
|
|
424 |
|
|
|
18,556 |
|
|
|
4,561 |
|
|
|
34,528 |
|
Change in fair value of
contingent consideration |
|
|
- |
|
|
|
4,645 |
|
|
|
21 |
|
|
|
6,140 |
|
Amortization of deferred
financing costs and debt |
|
|
4,412 |
|
|
|
8,958 |
|
|
|
9,371 |
|
|
|
18,666 |
|
Write off of deferred financing
costs and debt discount |
|
|
2,413 |
|
|
|
- |
|
|
|
22,828 |
|
|
|
73,952 |
|
Stock-based compensation |
|
|
3,462 |
|
|
|
4,110 |
|
|
|
6,797 |
|
|
|
7,105 |
|
Gain on sale of operations |
|
|
(28,143) |
|
|
|
- |
|
|
|
(28,143) |
|
|
|
- |
|
Non-real estate depreciation and
amortization |
|
|
17,493 |
|
|
|
22,862 |
|
|
|
35,080 |
|
|
|
45,031 |
|
Settlement expense |
|
|
- |
|
|
|
650,000 |
|
|
|
- |
|
|
|
650,000 |
|
Costs related to the early
repayment of debt |
|
|
10,935 |
|
|
|
- |
|
|
|
28,485 |
|
|
|
- |
|
Straight-line revenues |
|
|
(7,309) |
|
|
|
602 |
|
|
|
(14,215) |
|
|
|
711 |
|
Maintenance capital
expenditures |
|
|
(2,408) |
|
|
|
(2,253) |
|
|
|
(4,384) |
|
|
|
(3,361) |
|
Other, net |
|
|
1,961 |
|
|
|
(11,356) |
|
|
|
(2,009) |
|
|
|
(21,810) |
|
Adjustments for unconsolidated
entities |
|
|
258 |
|
|
|
- |
|
|
|
614 |
|
|
|
- |
|
Adjustments for noncontrolling
interests |
|
|
(52) |
|
|
|
(12,317) |
|
|
|
(870) |
|
|
|
(14,339) |
|
Adjusted FFO attributable
to common shareholders |
|
$ |
103,249 |
|
|
$ |
93,975 |
|
|
$ |
206,351 |
|
|
$ |
190,555 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Reconciliation of Diluted
FFO and AFFO: |
|
|
|
|
|
|
|
|
|
|
|
|
FFO Attributable to common
shareholders – Basic |
|
$ |
99,803 |
|
|
$ |
(589,832) |
|
|
$ |
148,215 |
|
|
$ |
(606,068) |
|
Impact of if-converted dilutive
securities |
|
|
2,979 |
|
|
|
- |
|
|
|
5,953 |
|
|
|
- |
|
FFO Attributable to common
shareholders – Diluted |
|
$ |
102,782 |
|
|
$ |
(589,832) |
|
|
$ |
154,168 |
|
|
$ |
(606,068) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
AFFO Attributable to common
shareholders – Basic |
|
$ |
103,249 |
|
|
$ |
93,975 |
|
|
$ |
206,351 |
|
|
$ |
190,555 |
|
Impact of if-converted dilutive
securities |
|
|
3,450 |
|
|
|
3,450 |
|
|
|
6,900 |
|
|
|
6,900 |
|
AFFO Attributable to common
shareholders – Diluted |
|
$ |
106,699 |
|
|
$ |
97,425 |
|
|
$ |
213,251 |
|
|
$ |
197,455 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average common shares
used to calculate basic earnings (loss) per common share (1) |
|
|
231,801 |
|
|
|
192,479 |
|
|
|
231,636 |
|
|
|
192,358 |
|
Impact of dilutive
non-participating securities |
|
|
135 |
|
|
|
- |
|
|
|
226 |
|
|
|
- |
|
Impact of if-converted dilutive
securities |
|
|
30,332 |
|
|
|
29,198 |
|
|
|
30,332 |
|
|
|
29,198 |
|
Weighted average common shares
used to calculate diluted FFO and AFFO per common share (1) |
|
|
262,268 |
|
|
|
221,677 |
|
|
|
262,194 |
|
|
|
221,556 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Per diluted common
share: |
|
|
|
|
|
|
|
|
|
|
|
|
EPS |
|
$ |
0.20 |
|
|
$ |
(3.06) |
|
|
$ |
0.19 |
|
|
$ |
(3.47) |
|
FFO |
|
$ |
0.39 |
|
|
$ |
(3.06) |
|
|
$ |
0.59 |
|
|
$ |
(3.15) |
|
AFFO |
|
$ |
0.41 |
|
|
$ |
0.44 |
|
|
$ |
0.81 |
|
|
$ |
0.89 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
________________________
- 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 June 30, |
|
Six Months Ended June 30, |
|
|
|
2021 |
|
|
|
2020 |
|
|
|
2021 |
|
|
|
2020 |
|
Net income
(loss) |
|
$ |
49,639 |
|
|
$ |
(598,329) |
|
|
$ |
45,137 |
|
|
$ |
(678,595) |
|
Depreciation and
amortization |
|
|
69,671 |
|
|
|
84,969 |
|
|
|
140,635 |
|
|
|
171,090 |
|
Interest expense, net |
|
|
106,388 |
|
|
|
107,243 |
|
|
|
246,969 |
|
|
|
285,636 |
|
Income tax expense (benefit) |
|
|
5,084 |
|
|
|
(5,875) |
|
|
|
2,527 |
|
|
|
(10,451) |
|
EBITDA |
|
|
230,782 |
|
|
|
(411,992) |
|
|
|
435,268 |
|
|
|
(232,320) |
|
Stock-based compensation |
|
|
3,462 |
|
|
|
4,110 |
|
|
|
6,797 |
|
|
|
7,105 |
|
Transaction related and other
costs |
|
|
424 |
|
|
|
18,556 |
|
|
|
4,561 |
|
|
|
34,528 |
|
Settlement expense |
|
|
- |
|
|
|
650,000 |
|
|
|
- |
|
|
|
650,000 |
|
Gain on sale of real estate |
|
|
(442) |
|
|
|
(63,818) |
|
|
|
(442) |
|
|
|
(63,818) |
|
Gain on sale of operations |
|
|
(28,143) |
|
|
|
- |
|
|
|
(28,143) |
|
|
|
- |
|
Adjustments for unconsolidated
entities |
|
|
872 |
|
|
|
- |
|
|
|
1,844 |
|
|
|
- |
|
Other (income) expense |
|
|
8,779 |
|
|
|
6,013 |
|
|
|
10,097 |
|
|
|
9,088 |
|
Adjusted EBITDA |
|
$ |
215,734 |
|
|
$ |
202,869 |
|
|
$ |
429,982 |
|
|
$ |
404,583 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted
EBITDA: |
|
|
|
|
|
|
|
|
|
|
|
|
Leasing |
|
$ |
192,137 |
|
|
$ |
182,810 |
|
|
$ |
383,634 |
|
|
$ |
364,689 |
|
Fiber Infrastructure |
|
|
29,439 |
|
|
|
28,493 |
|
|
|
59,160 |
|
|
|
56,034 |
|
Towers |
|
|
- |
|
|
|
85 |
|
|
|
- |
|
|
|
77 |
|
Consumer CLEC |
|
|
- |
|
|
|
(292) |
|
|
|
- |
|
|
|
(275) |
|
Corporate |
|
|
(5,842) |
|
|
|
(8,227) |
|
|
|
(12,812) |
|
|
|
(15,942) |
|
|
|
$ |
215,734 |
|
|
$ |
202,869 |
|
|
$ |
429,982 |
|
|
$ |
404,583 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Annualized Adjusted
EBITDA (1) |
|
$ |
862,936 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
As of June 30,
2021: |
|
|
|
|
|
|
|
|
|
|
|
|
Total Debt (2) |
|
$ |
4,984,497 |
|
|
|
|
|
|
|
|
|
|
Cash and cash equivalents |
|
|
108,536 |
|
|
|
|
|
|
|
|
|
|
Net Debt |
|
$ |
4,875,961 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net Debt/Annualized
Adjusted EBITDA |
|
|
5.65x |
|
|
|
|
|
|
|
|
|
________________________
- 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.
- Includes $14.5 million of finance leases, but excludes $85.6
million of unamortized discounts and deferred financing costs.
Uniti Group
Inc.Projected Future Results
(1)(In millions)
|
|
Year EndedDecember 31, 2021 |
Net income
attributable to common shareholders – Basic |
|
$ 123 to $ 135 |
Noncontrolling interest share in earnings |
|
2 |
|
Participating securities’
share in earnings |
|
1 |
|
Net income
(2) |
|
126 to 138 |
Interest expense, net (3) |
|
441 |
|
Depreciation and
amortization |
|
278 |
|
Income tax benefit |
|
(2) |
|
EBITDA (2) |
|
843 to 855 |
Stock-based compensation |
|
15 |
|
Gain on sale of operations
(4) |
|
(28) |
|
Transaction related and other
costs (5) |
|
13 |
|
Adjustment for unconsolidated
entities |
|
3 |
|
Adjusted EBITDA
(2) |
|
$ 846 to $ 858 |
|
|
|
________________________
- 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.
- The components of projected future results may not add due to
rounding.
- See “Components of Interest Expense” below.
- Represents 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.
- Future transaction related and other costs are not included in
our current outlook.
Uniti Group
Inc.Projected Future Results
(1)(Per Diluted Share)
|
|
Year EndedDecember 31, 2021 |
Net income
attributable to common shareholders – Basic |
|
$ 0.53 to $ 0.58 |
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) |
|
$ 1.43 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) |
|
0.02 |
|
Amortization of deferred
financing costs and debt discount (4) |
|
0.18 |
|
Costs related to the early
repayment of debt (5) |
|
0.12 |
|
Accretion of settlement payable
(6) |
|
0.07 |
|
Stock-based compensation |
|
0.06 |
|
Gain on sale of operations
(7) |
|
(0.12) |
|
Non-real estate depreciation and
amortization |
|
0.30 |
|
Straight-line revenues |
|
(0.13) |
|
Maintenance capital
expenditures |
|
(0.03) |
|
Other, net |
|
(0.14) |
|
Adjustments for noncontrolling
interests |
|
- |
|
AFFO attributable to
common shareholders – Basic (2) |
|
$ 1.76 to $ 1.81 |
Impact of if-converted
securities |
|
(0.16) |
|
AFFO attributable to common shareholders – Diluted
(2) |
$ 1.61 to $ 1.65 |
|
|
|
________________________
- 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.
- The components of projected future results may not add to FFO
and AFFO attributable to common shareholders due to rounding.
- Future transaction related and other costs are not included in
our current outlook.
- Includes the write-off of approximately $23 million of deferred
financing costs related to the early repayment of our 8.25% Senior
Notes due 2023, and of our 6.00% Senior Notes due 2023.
- Represents the premium paid on and related costs associated
with the early repayment of our 8.25% Senior Notes due 2023, and
our 6.00% Senior Notes due 2023.
- 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.
- Represents 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 EndedDecember 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 |
|
Premium on early repayment of
debt (3) |
|
|
21 |
|
Swap termination (4) |
|
|
11 |
|
Interest expense,
net (5) |
|
$ |
441 |
|
|
|
|
|
|
________________________
- 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.
- Includes the write-off of approximately $23 million of deferred
financing costs related to the early repayment of our 8.25% Senior
Notes due 2023 and of our 6.00% Senior Notes due 2023.
- Represents the premium paid on the early repayment of our 8.25%
Senior Notes due 2023, and our 6.00% Senior Notes due 2023.
- Represents recognition of deferred interest expense
attributable to the discontinuance of hedge accounting on interest
rate swaps.
- 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:
Bill DiTullio, 501-850-0872Vice President, Finance and Investor
Relationsbill.ditullio@uniti.com
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