Uniti Group Inc. (“Uniti” or the “Company”) (Nasdaq: UNIT) today
announced its results for the fourth quarter and full year 2021.
“Our national network of 128,000 route miles of
fiber is one of the largest and most robust in the country. We
added nearly 6,000 route miles of valuable fiber in 2021 and capped
off a terrific year of performance by adding $3.5 million of new
consolidated bookings, a 40% increase over 2020,” commented Kenny
Gunderman, President and Chief Executive Officer.
Mr. Gunderman continued, “Trends in the
communications infrastructure space have never been better, and
Uniti remains uniquely positioned to benefit from the continued
proliferation of broadband growth, fiber-to-the-home, small cells
and national transport.”
QUARTERLY RESULTS
Consolidated revenues for the fourth quarter of
2021 were $293.0 million. Net income and Adjusted EBITDA were $35.9
million and $231.1 million, respectively, for the same
period. Net income attributable to common shares was
$35.6 million for the period. Adjusted Funds From Operations
(“AFFO”) attributable to common shareholders was $114.0 million, or
$0.44 per diluted common share, an increase of 7% when compared to
the fourth quarter of 2020.
Uniti Fiber contributed $82.0 million of
revenues and $31.7 million of Adjusted EBITDA for the fourth
quarter of 2021, achieving Adjusted EBITDA margins of approximately
39%. Uniti Fiber’s net success-based capital expenditures during
the quarter were $33.8 million.
Uniti Leasing contributed revenues of $211.0
million and Adjusted EBITDA of $206.1 million for the fourth
quarter, representing growth of 9% and 8%, respectively, when
compared to the fourth quarter of 2020. Revenue and Adjusted EBITDA
in the fourth quarter both include a one-time non-cash adjustment
to straight-line revenue of $8 million. During the
quarter, Uniti Leasing deployed capital expenditures of $70.9
million primarily related to the construction of approximately
1,900 new route miles of valuable fiber infrastructure.
FULL YEAR RESULTS
Consolidated revenues for the year ended
December 31, 2021 were $1.1 billion. Net income and Adjusted EBITDA
were $124.7 million and $878.3 million, respectively, for the same
period. Net income attributable to common shares was $122.6 million
for the period. Adjusted Funds From Operations (“AFFO”)
attributable to common shareholders was $430.3 million, or $1.68
per diluted common share.
Uniti Fiber contributed $299.0 million of
revenues and $118.5 million of Adjusted EBITDA for the full year of
2021, achieving Adjusted EBITDA margins of approximately 40%, up
from 36% Adjusted EBITDA margins for the full year of 2020. Uniti
Fiber’s net success-based capital expenditures for the full year of
2021 were $136.1 million.
Uniti Leasing contributed revenues of $801.5
million and Adjusted EBITDA of $784.1 million for the full year of
2021, representing growth of 7% and 6%, respectively, when compared
to the full year of 2020. For the full year of 2021, Uniti Leasing
deployed capital expenditures of $225.7 million primarily related
to the construction of approximately 5,500 new route miles of
valuable fiber infrastructure.
LIQUIDITY
At year-end, the Company had approximately
$419.4 million of unrestricted cash and cash equivalents, and
undrawn borrowing availability under its revolving credit
agreement. The Company’s leverage ratio at year-end was 5.55x based
on net debt to fourth quarter 2021 annualized Adjusted EBITDA.
On February 24, 2022, the Company’s Board of
Directors declared a quarterly cash dividend of $0.15 per common
share, payable on April 15, 2022, to stockholders of record on
April 1, 2022.
FULL YEAR 2022 OUTLOOK
Our 2022 outlook excludes future acquisitions,
capital market transactions, and future transaction-related and
other costs not mentioned herein.
The Company’s consolidated outlook for 2022 is as follows (in
millions):
|
Full Year 2022 |
|
|
Revenue |
$ |
1,118 |
to |
$ |
1,136 |
|
|
Net income attributable to common shareholders |
|
185 |
to |
|
203 |
|
|
Adjusted EBITDA (1) |
|
881 |
to |
|
899 |
|
|
Interest expense, net (2) |
|
388 |
to |
|
388 |
|
|
|
|
|
|
|
|
|
|
Attributable to common shareholders: |
|
|
|
|
|
|
|
FFO (1) |
|
398 |
to |
|
416 |
|
|
AFFO (1) |
|
439 |
to |
|
457 |
|
|
|
|
|
|
|
|
|
|
Weighted-average common shares outstanding – diluted |
|
265 |
to |
|
265 |
|
|
________________________ |
|
|
|
|
|
|
|
(1) See “Non-GAAP Financial Measures”
below.(2) See “Components of Interest Expense”
below. |
CONFERENCE CALL
Uniti will hold a conference call today to
discuss this earnings release at 8:30 AM Eastern Time (7:30 AM
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 3189561. 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 12:00 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
3189561.
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 December 31, 2021, Uniti owns
approximately 128,000 fiber route miles, 7.6 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 2022
financial outlook, expectations regarding strong demand trends, our
business strategies, growth prospects, industry trends, sales
opportunities, potential transformative corporate transactions,
renewal rent, 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)
|
|
December 31, 2021 |
|
December 31, 2020 |
Assets: |
|
|
|
|
Property, plant and equipment, net |
|
$ |
3,508,939 |
|
|
$ |
3,273,353 |
|
Cash and cash equivalents |
|
|
58,903 |
|
|
|
77,534 |
|
Accounts receivable, net |
|
|
38,455 |
|
|
|
62,952 |
|
Goodwill |
|
|
601,878 |
|
|
|
601,878 |
|
Intangible assets, net |
|
|
364,630 |
|
|
|
390,725 |
|
Straight-line revenue
receivable |
|
|
41,323 |
|
|
|
13,107 |
|
Other assets, net |
|
|
119,171 |
|
|
|
152,883 |
|
Investment in unconsolidated
entities |
|
|
64,223 |
|
|
|
66,043 |
|
Deferred income tax assets,
net |
|
|
11,721 |
|
|
|
- |
|
Assets held for sale |
|
|
- |
|
|
|
93,343 |
|
Total Assets |
|
$ |
4,809,243 |
|
|
$ |
4,731,818 |
|
|
|
|
|
|
|
|
Liabilities and
Shareholders’ Deficit |
|
|
|
|
|
|
Liabilities: |
|
|
|
|
|
|
Accounts payable, accrued
expenses and other liabilities, net |
|
$ |
144,223 |
|
|
$ |
146,144 |
|
Settlement payable |
|
|
239,384 |
|
|
|
418,840 |
|
Intangible liabilities, net |
|
|
177,786 |
|
|
|
187,886 |
|
Accrued interest payable |
|
|
109,826 |
|
|
|
95,338 |
|
Deferred revenue |
|
|
1,134,236 |
|
|
|
995,123 |
|
Derivative liability, net |
|
|
10,413 |
|
|
|
22,897 |
|
Dividends payable |
|
|
1,264 |
|
|
|
36,725 |
|
Deferred income tax liabilities,
net |
|
|
- |
|
|
|
10,540 |
|
Finance lease obligations |
|
|
15,348 |
|
|
|
15,468 |
|
Contingent consideration |
|
|
- |
|
|
|
2,957 |
|
Notes and other debt, net |
|
|
5,090,537 |
|
|
|
4,816,524 |
|
Liabilities held for sale |
|
|
- |
|
|
|
55,752 |
|
Total Liabilities |
|
|
6,923,017 |
|
|
|
6,804,194 |
|
|
|
|
|
|
|
|
Commitments and
contingencies |
|
|
|
|
|
|
|
|
|
|
|
|
|
Shareholders
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: 234,779 shares at December 31, 2021 and 231,262
shares at December 31, 2020 |
|
|
23 |
|
|
|
23 |
|
Additional paid-in capital |
|
|
1,214,830 |
|
|
|
1,209,141 |
|
Accumulated other comprehensive
loss |
|
|
(9,164 |
) |
|
|
(20,367 |
) |
Distributions in excess of
accumulated earnings |
|
|
(3,333,481 |
) |
|
|
(3,330,455 |
) |
Total Uniti shareholders’
deficit |
|
|
(2,127,792 |
) |
|
|
(2,141,658 |
) |
Noncontrolling interests –
operating partnership units and non-voting convertible preferred
stock |
|
|
14,018 |
|
|
|
69,282 |
|
Total shareholders’ deficit |
|
|
(2,113,774 |
) |
|
|
(2,072,376 |
) |
Total Liabilities and
Shareholders’ Deficit |
|
$ |
4,809,243 |
|
|
$ |
4,731,818 |
|
Uniti Group
Inc.Consolidated Statements of
Operations(In thousands, except per share
data)
|
Three Months Ended December 31, |
|
|
Year Ended December 31, |
|
|
2021 |
|
|
|
2020 |
|
|
|
2021 |
|
|
|
2020 |
|
Revenues: |
|
|
|
|
|
|
|
|
|
|
|
Leasing |
$ |
211,019 |
|
|
$ |
193,873 |
|
|
$ |
801,497 |
|
|
$ |
745,915 |
|
Fiber Infrastructure |
|
81,990 |
|
|
|
81,421 |
|
|
|
299,025 |
|
|
|
314,363 |
|
Towers |
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
6,112 |
|
Consumer CLEC |
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
651 |
|
Total revenues |
|
293,009 |
|
|
|
275,294 |
|
|
|
1,100,522 |
|
|
|
1,067,041 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Costs and
expenses: |
|
|
|
|
|
|
|
|
|
|
|
Interest expense, net |
|
104,534 |
|
|
|
108,701 |
|
|
|
446,296 |
|
|
|
497,128 |
|
Depreciation and
amortization |
|
79,777 |
|
|
|
78,433 |
|
|
|
290,942 |
|
|
|
329,403 |
|
General and administrative
expense |
|
25,376 |
|
|
|
23,289 |
|
|
|
101,176 |
|
|
|
104,975 |
|
Operating expense (exclusive of
depreciation and amortization) |
|
41,433 |
|
|
|
41,029 |
|
|
|
146,869 |
|
|
|
159,337 |
|
Settlement expense |
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
650,000 |
|
Goodwill impairment |
|
- |
|
|
|
71,000 |
|
|
|
- |
|
|
|
71,000 |
|
Transaction related and other
costs |
|
1,920 |
|
|
|
8,531 |
|
|
|
7,544 |
|
|
|
63,875 |
|
Loss (gain) on sale of real
estate |
|
- |
|
|
|
459 |
|
|
|
(442 |
) |
|
|
(86,267 |
) |
Gain on sale of operations |
|
- |
|
|
|
- |
|
|
|
(28,143 |
) |
|
|
- |
|
Other expense (income), net |
|
9,795 |
|
|
|
(483 |
) |
|
|
18,553 |
|
|
|
11,703 |
|
Total costs and expenses |
|
262,835 |
|
|
|
330,959 |
|
|
|
982,795 |
|
|
|
1,801,154 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Income (loss) before income taxes
and equity in earnings from unconsolidated entities |
|
30,174 |
|
|
|
(55,665 |
) |
|
|
117,727 |
|
|
|
(734,113 |
) |
Income tax benefit |
|
(5,199 |
) |
|
|
(7,553 |
) |
|
|
(4,916 |
) |
|
|
(15,203 |
) |
Equity in earnings from
unconsolidated entities |
|
(553 |
) |
|
|
(440 |
) |
|
|
(2,102 |
) |
|
|
(98 |
) |
Net income
(loss) |
|
35,926 |
|
|
|
(47,672 |
) |
|
|
124,745 |
|
|
|
(718,812 |
) |
Net income (loss) attributable to
noncontrolling interests |
|
101 |
|
|
|
(703 |
) |
|
|
1,085 |
|
|
|
(12,511 |
) |
Net income (loss)
attributable to shareholders |
|
35,825 |
|
|
|
(46,969 |
) |
|
|
123,660 |
|
|
|
(706,301 |
) |
Participating securities’ share
in earnings |
|
(213 |
) |
|
|
(225 |
) |
|
|
(1,077 |
) |
|
|
(1,078 |
) |
Dividends declared on convertible
preferred stock |
|
(2 |
) |
|
|
(3 |
) |
|
|
(10 |
) |
|
|
(9 |
) |
Net income (loss)
attributable to common shareholders |
$ |
35,610 |
|
|
$ |
(47,197 |
) |
|
$ |
122,573 |
|
|
$ |
(707,388 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
Net income (loss) attributable
to common shareholders – Basic |
$ |
35,610 |
|
|
$ |
(47,197 |
) |
|
$ |
122,573 |
|
|
$ |
(707,388 |
) |
Income allocated to participating
securities |
|
2,989 |
|
|
|
- |
|
|
|
11,926 |
|
|
|
- |
|
Net income (loss) attributable to
common shareholders – Diluted |
$ |
38,599 |
|
|
$ |
(47,197 |
) |
|
$ |
134,499 |
|
|
$ |
(707,388 |
) |
Weighted average number
of common shares outstanding: |
|
|
|
|
|
|
|
|
|
|
|
Basic |
|
234,719 |
|
|
|
231,262 |
|
|
|
232,888 |
|
|
|
203,600 |
|
Diluted |
|
266,077 |
|
|
|
231,262 |
|
|
|
264,077 |
|
|
|
203,600 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings (loss) per
common share: |
|
|
|
|
|
|
|
|
|
|
|
Basic |
$ |
0.15 |
|
|
$ |
(0.20 |
) |
|
$ |
0.53 |
|
|
$ |
(3.47 |
) |
Diluted |
$ |
0.15 |
|
|
$ |
(0.20 |
) |
|
$ |
0.51 |
|
|
$ |
(3.47 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
Uniti Group
Inc.Consolidated Statements of Cash
Flows(In thousands)
|
|
Year Ended December 31, |
|
|
2021 |
|
|
2020 |
|
Cash flow from
operating activities: |
|
|
|
|
Net income (loss) |
|
$ |
124,745 |
|
|
$ |
(718,812 |
) |
Adjustments to reconcile net loss to net cash provided by operating
activities: |
|
|
|
|
|
|
Depreciation and amortization |
|
|
290,942 |
|
|
|
329,403 |
|
Amortization of deferred financing costs and debt discount |
|
|
18,122 |
|
|
|
36,955 |
|
Loss on extinguishment of debt |
|
|
49,280 |
|
|
|
73,952 |
|
Interest rate swap termination |
|
|
11,317 |
|
|
|
10,155 |
|
Deferred income taxes |
|
|
(6,467 |
) |
|
|
(13,891 |
) |
Equity in earnings of unconsolidated entities |
|
|
(2,102 |
) |
|
|
(98 |
) |
Distributions of cumulative earnings from unconsolidated
entities |
|
|
3,922 |
|
|
|
1,960 |
|
Cash paid for interest rate swap settlement |
|
|
(12,483 |
) |
|
|
(7,818 |
) |
Straight-line revenues |
|
|
(41,239 |
) |
|
|
(6,872 |
) |
Stock-based compensation |
|
|
13,847 |
|
|
|
13,721 |
|
Change in fair value of contingent consideration |
|
|
21 |
|
|
|
7,163 |
|
Goodwill impairment |
|
|
- |
|
|
|
71,000 |
|
Gain on prepayment of settlement payable |
|
|
(5,432 |
) |
|
|
- |
|
Gain on sale of real estate |
|
|
(442 |
) |
|
|
(86,267 |
) |
Gain on sale of operations |
|
|
(28,143 |
) |
|
|
- |
|
(Gain) loss on asset disposals |
|
|
(213 |
) |
|
|
1,796 |
|
Accretion of settlement payable |
|
|
16,901 |
|
|
|
- |
|
Other |
|
|
124 |
|
|
|
(297 |
) |
Changes in assets and liabilities, net of acquisitions: |
|
|
|
|
|
|
Accounts receivable |
|
|
24,497 |
|
|
|
12,634 |
|
Other assets |
|
|
14,161 |
|
|
|
(24,141 |
) |
Accounts payable, accrued expenses and other liabilities |
|
|
27,799 |
|
|
|
37,850 |
|
Settlement payable |
|
|
- |
|
|
|
418,840 |
|
Net cash provided by operating activities |
|
|
499,157 |
|
|
|
157,233 |
|
|
|
|
|
|
|
|
Cash flows from investing activities: |
|
|
|
|
|
|
Other capital expenditures |
|
|
(385,855 |
) |
|
|
(317,084 |
) |
Proceeds from sale of real estate, net of cash |
|
|
1,034 |
|
|
|
391,885 |
|
Proceeds from sale of operations |
|
|
62,113 |
|
|
|
- |
|
Proceeds from sale of other equipment |
|
|
1,487 |
|
|
|
- |
|
Asset acquisitions |
|
|
- |
|
|
|
(73,407 |
) |
Net cash (used in) provided by investing activities |
|
|
(321,221 |
) |
|
|
1,394 |
|
|
|
|
|
|
|
|
Cash flows from financing activities: |
|
|
|
|
|
|
Repayment of debt |
|
|
(2,260,000 |
) |
|
|
(2,044,728 |
) |
Proceeds from issuance of notes |
|
|
2,380,000 |
|
|
|
2,250,000 |
|
Dividends paid |
|
|
(141,371 |
) |
|
|
(135,676 |
) |
Payments of settlement payable |
|
|
(190,924 |
) |
|
|
- |
|
Payments of contingent consideration |
|
|
(2,979 |
) |
|
|
(15,713 |
) |
Distributions paid to noncontrolling interests |
|
|
(1,700 |
) |
|
|
(2,322 |
) |
Borrowings under revolving credit facility |
|
|
310,000 |
|
|
|
170,000 |
|
Payments under revolving credit facility |
|
|
(220,000 |
) |
|
|
(635,019 |
) |
Finance lease payments |
|
|
(2,019 |
) |
|
|
(3,702 |
) |
Payments for financing costs |
|
|
(27,660 |
) |
|
|
(50,875 |
) |
Costs related to the early repayment of debt |
|
|
(36,486 |
) |
|
|
- |
|
Settlement Common Stock issuance |
|
|
- |
|
|
|
244,550 |
|
Employee stock purchase program |
|
|
672 |
|
|
|
676 |
|
Payments related to tax withholding for stock-based
compensation |
|
|
(4,100 |
) |
|
|
(1,097 |
) |
Net cash used in financing activities |
|
|
(196,567 |
) |
|
|
(223,906 |
) |
Net (decrease) increase in cash and cash
equivalents |
|
|
(18,631 |
) |
|
|
(65,279 |
) |
Cash and cash equivalents at beginning of period |
|
|
77,534 |
|
|
|
142,813 |
|
Cash and cash equivalents at end of period |
|
$ |
58,903 |
|
|
$ |
77,534 |
|
|
|
|
|
|
|
|
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, |
|
|
2021 |
|
|
|
2020 |
|
|
2021 |
|
|
2020 |
|
Net income (loss) attributable to common
shareholders |
|
$ |
35,610 |
|
|
$ |
(47,197 |
) |
|
$ |
122,573 |
|
|
$ |
(707,388 |
) |
Real estate depreciation and
amortization |
|
|
52,297 |
|
|
|
61,336 |
|
|
|
211,472 |
|
|
|
246,713 |
|
Loss (gain) on sale of real
estate assets, net of tax |
|
|
- |
|
|
|
459 |
|
|
|
(442 |
) |
|
|
(85,860 |
) |
Participating securities share in
earnings |
|
|
213 |
|
|
|
225 |
|
|
|
1,077 |
|
|
|
1,078 |
|
Participating securities share in
FFO |
|
|
(528 |
) |
|
|
(225 |
) |
|
|
(2,188 |
) |
|
|
(1,162 |
) |
Real estate depreciation and
amortization from unconsolidated entities |
|
|
589 |
|
|
|
682 |
|
|
|
2,465 |
|
|
|
1,048 |
|
Adjustments for noncontrolling
interests |
|
|
(175 |
) |
|
|
(922 |
) |
|
|
(2,154 |
) |
|
|
(2,622 |
) |
FFO attributable to
common shareholders |
|
|
88,006 |
|
|
|
14,358 |
|
|
|
332,803 |
|
|
|
(548,193 |
) |
Transaction related and other
costs |
|
|
1,920 |
|
|
|
8,531 |
|
|
|
7,544 |
|
|
|
63,875 |
|
Change in fair value of
contingent consideration |
|
|
- |
|
|
|
(923 |
) |
|
|
21 |
|
|
|
7,163 |
|
Amortization of deferred
financing costs and debt discount |
|
|
4,399 |
|
|
|
9,252 |
|
|
|
18,122 |
|
|
|
36,955 |
|
Costs related to the early
repayment of debt |
|
|
20,929 |
|
|
|
- |
|
|
|
49,414 |
|
|
|
- |
|
Write off of deferred financing
costs and debt discount |
|
|
1,759 |
|
|
|
- |
|
|
|
24,587 |
|
|
|
73,952 |
|
Stock based compensation |
|
|
2,884 |
|
|
|
3,275 |
|
|
|
13,847 |
|
|
|
13,721 |
|
Gain on sale of operations |
|
|
- |
|
|
|
- |
|
|
|
(28,143 |
) |
|
|
- |
|
Non-real estate depreciation and
amortization |
|
|
27,480 |
|
|
|
17,097 |
|
|
|
79,470 |
|
|
|
82,690 |
|
Settlement expense |
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
650,000 |
|
Goodwill impairment |
|
|
- |
|
|
|
71,000 |
|
|
|
- |
|
|
|
71,000 |
|
Straight-line revenues |
|
|
(18,784 |
) |
|
|
(5,836 |
) |
|
|
(41,239 |
) |
|
|
(6,872 |
) |
Maintenance capital
expenditures |
|
|
(2,020 |
) |
|
|
(2,171 |
) |
|
|
(8,342 |
) |
|
|
(7,149 |
) |
Other, net |
|
|
(12,736 |
) |
|
|
(7,103 |
) |
|
|
(17,694 |
) |
|
|
(32,374 |
) |
Adjustments for equity in
earnings from unconsolidated entities |
|
|
293 |
|
|
|
317 |
|
|
|
1,026 |
|
|
|
1,238 |
|
Adjustments for noncontrolling
interests |
|
|
(100 |
) |
|
|
(1,382 |
) |
|
|
(1,090 |
) |
|
|
(16,496 |
) |
Adjusted FFO attributable
to common shareholders |
|
$ |
114,030 |
|
|
$ |
106,415 |
|
|
$ |
430,326 |
|
|
$ |
389,510 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Reconciliation of Diluted
FFO and AFFO: |
|
|
|
|
|
|
|
|
|
|
|
|
FFO Attributable to common
shareholders – Basic |
|
$ |
88,006 |
|
|
$ |
14,358 |
|
|
$ |
332,803 |
|
|
$ |
(548,193 |
) |
Impact of if-converted dilutive
securities |
|
|
2,989 |
|
|
|
- |
|
|
|
11,926 |
|
|
|
- |
|
FFO Attributable to common
shareholders – Diluted |
|
$ |
90,995 |
|
|
$ |
14358 |
|
|
$ |
344,729 |
|
|
$ |
(548,193 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
AFFO Attributable to common
shareholders – Basic |
|
$ |
114,030 |
|
|
$ |
106,415 |
|
|
$ |
430,326 |
|
|
$ |
389,510 |
|
Impact of if-converted dilutive
securities |
|
|
3,450 |
|
|
|
3,450 |
|
|
|
13,800 |
|
|
|
13,800 |
|
AFFO Attributable to common
shareholders – Diluted |
|
$ |
117,480 |
|
|
$ |
109,865 |
|
|
$ |
444,126 |
|
|
$ |
403,310 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average common shares
used to calculate basic earnings (loss) per common share (1) |
|
|
234,719 |
|
|
|
231,262 |
|
|
|
232,888 |
|
|
|
203,600 |
|
Impact of dilutive
non-participating securities |
|
|
549 |
|
|
|
611 |
|
|
|
380 |
|
|
|
427 |
|
Impact of if-converted dilutive
securities |
|
|
30,809 |
|
|
|
29,777 |
|
|
|
30,809 |
|
|
|
29,777 |
|
Weighted average common shares
used to calculate diluted FFO and AFFO per common share (1) |
|
|
266,077 |
|
|
|
261,650 |
|
|
|
264,077 |
|
|
|
233,804 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Per diluted common
share: |
|
|
|
|
|
|
|
|
|
|
|
|
EPS |
|
$ |
0.15 |
|
|
$ |
(0.20 |
) |
|
$ |
0.51 |
|
|
$ |
(3.47 |
) |
FFO |
|
$ |
0.34 |
|
|
$ |
0.06 |
|
|
$ |
1.31 |
|
|
$ |
(2.69 |
) |
AFFO |
|
$ |
0.44 |
|
|
$ |
0.42 |
|
|
$ |
1.68 |
|
|
$ |
1.72 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
________________________
- 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 December
31, |
|
Year Ended December 31, |
|
|
|
2021 |
|
|
|
2020 |
|
|
|
2021 |
|
|
|
2020 |
|
Net income
(loss) |
|
$ |
35.926 |
|
|
$ |
(47,672 |
) |
|
$ |
124,745 |
|
|
$ |
(718,812 |
) |
Depreciation and
amortization |
|
|
79,777 |
|
|
|
78,433 |
|
|
|
290,942 |
|
|
|
329,403 |
|
Interest expense, net |
|
|
104,534 |
|
|
|
108,701 |
|
|
|
446,296 |
|
|
|
497,128 |
|
Income tax benefit |
|
|
(5,199 |
) |
|
|
(7,553 |
) |
|
|
(4,916 |
) |
|
|
(15,203 |
) |
EBITDA |
|
|
215,038 |
|
|
|
131,909 |
|
|
|
857,067 |
|
|
|
92,516 |
|
Stock-based compensation |
|
|
2,884 |
|
|
|
3,275 |
|
|
|
13,847 |
|
|
|
13,721 |
|
Transaction related and other
costs |
|
|
1,920 |
|
|
|
8,531 |
|
|
|
7,544 |
|
|
|
63,875 |
|
Settlement expense |
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
650,000 |
|
Goodwill impairment |
|
|
- |
|
|
|
71,000 |
|
|
|
- |
|
|
|
71,000 |
|
Gain on sale of operations |
|
|
- |
|
|
|
- |
|
|
|
(28,143 |
) |
|
|
- |
|
Loss (gain) on sale of real
estate |
|
|
- |
|
|
|
459 |
|
|
|
(442 |
) |
|
|
(86,267 |
) |
Other, net |
|
|
10,348 |
|
|
|
(483 |
) |
|
|
24,917 |
|
|
|
11,703 |
|
Adjustments for equity in
earnings from unconsolidated entities |
|
|
882 |
|
|
|
1,000 |
|
|
|
3,491 |
|
|
|
2,287 |
|
Adjusted EBITDA |
|
$ |
231,072 |
|
|
$ |
215,691 |
|
|
$ |
878,281 |
|
|
$ |
818,835 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted
EBITDA: |
|
|
|
|
|
|
|
|
|
|
|
|
Leasing |
|
$ |
206,124 |
|
|
$ |
191,545 |
|
|
$ |
784,061 |
|
|
$ |
737,337 |
|
Fiber Infrastructure |
|
|
31,736 |
|
|
|
30,836 |
|
|
|
118,452 |
|
|
|
112,289 |
|
Towers |
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
77 |
|
Consumer CLEC |
|
|
- |
|
|
|
(84 |
) |
|
|
- |
|
|
|
(545 |
) |
Corporate |
|
|
(6,788 |
) |
|
|
(6,606 |
) |
|
|
(24,232 |
) |
|
|
(30,323 |
) |
|
|
$ |
231,072 |
|
|
$ |
215,691 |
|
|
$ |
878,281 |
|
|
$ |
818,835 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Annualized Adjusted
EBITDA (1) |
|
$ |
924,288 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
As of December 31,
2021: |
|
|
|
|
|
|
|
|
|
|
|
|
Total Debt (2) |
|
$ |
5,190,348 |
|
|
|
|
|
|
|
|
|
|
Cash and cash equivalents |
|
|
58,903 |
|
|
|
|
|
|
|
|
|
|
Net Debt |
|
$ |
5,131,445 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net Debt/Annualized
Adjusted EBITDA |
|
|
5.55x |
|
|
|
|
|
|
|
|
|
|
________________________
- 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 $15.3 million of finance leases, but excludes $84.5
million of unamortized discounts and deferred financing costs.
Uniti Group
Inc.Projected Future Results
(1)(In millions)
|
Year EndedDecember 31, 2022 |
Net income
attributable to common shareholders – Basic |
$ 185 to $ 203 |
Noncontrolling interest share in earnings |
1 |
Participating securities’
share in earnings |
3 |
Net income
(2) |
188 to 206 |
Interest expense, net (3) |
388 |
Depreciation and
amortization |
295 |
Income tax benefit |
(5) |
EBITDA (2) |
866 to 884 |
Stock-based compensation |
12 |
Transaction related and other
costs (4) |
- |
Adjustment for unconsolidated
entities |
3 |
Adjusted EBITDA
(2) |
$ 881 to $ 899 |
________________________
- 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.
- 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, 2022 |
Net income
attributable to common shareholders – Basic |
$ 0.79 to $ 0.87 |
Real estate depreciation and amortization |
0.91 |
Participating securities share in
earnings |
- |
Participating securities share in
FFO |
- |
Adjustments for noncontrolling
interests |
- |
Adjustments for unconsolidated
entities |
0.01 |
FFO attributable to
common shareholders – Basic (2) |
$ 1.71 to $ 1.79 |
Impact of if-converted
securities |
(0.16) |
FFO attributable to
common shareholders – Diluted (2) |
$ 1.55 to $ 1.62 |
|
|
FFO attributable to
common shareholders – Basic (2) |
$ 1.71 to $ 1.79 |
Transaction related and other
costs (3) |
- |
Amortization of deferred
financing costs and debt discount |
0.08 |
Accretion of settlement payable
(4) |
0.05 |
Stock-based compensation |
0.05 |
Non-real estate depreciation and
amortization |
0.36 |
Straight-line revenues |
(0.16) |
Maintenance capital
expenditures |
(0.03) |
Other, net |
(0.17) |
Adjustments for noncontrolling
interests |
- |
AFFO attributable to
common shareholders – Basic (2) |
$ 1.89 to $ 1.97 |
Impact of if-converted
securities |
(0.18) |
AFFO attributable to common shareholders – Diluted
(2) |
$ 1.71 to $ 1.78 |
|
|
________________________
- 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.
- 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.
Components of Interest Expense
(1)(In
millions)
|
Year EndedDecember 31, 2022 |
Interest expense on debt obligations |
$349 |
Capitalized interest |
- |
Accretion of Windstream
settlement payable |
12 |
Amortization of deferred
financing cost and debt discounts |
18 |
Swap termination (2) |
9 |
Interest expense,
net (3) |
$388 |
________________________
- 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.
- 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 enterprise resource
planning system, (collectively, “Transaction Related and Other
Costs”), costs related to the settlement with Windstream, goodwill
impairment charges, executive severance costs, amortization of
non-cash rights-of-use assets, the write off of unamortized
deferred financing costs, costs incurred as a result of the early
repayment of debt, including early tender and redemption 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 (although we may not have had
such charges in the periods presented). 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 uses 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, accretion on our settlement
obligation, and gains on the prepayment of 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 assets,
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 the early
repayment of debt, including early tender and redemption premiums
and costs associated with the termination of related hedging
activities, executive severance costs, 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:
Paul Bullington, 251-662-1512Senior Vice President, Chief
Financial Officer & Treasurerpaul.bullington@uniti.com
Bill DiTullio, 501-850-0872Vice President, Finance and Investor
Relationsbill.ditullio@uniti.com
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