Uniti Group Inc. (“Uniti” or the “Company”) (Nasdaq: UNIT) today
announced its results for the first quarter 2022.
“The demand for our mission critical
communications infrastructure remains very strong as evidenced by
the fourth consecutive quarter of elevated new consolidated
bookings, a 58% increase over the first quarter of 2021. We also
continue to demonstrate the shared infrastructure benefits of fiber
with robust Adjusted EBITDA and AFFO growth,” commented Kenny
Gunderman, President and Chief Executive Officer.
Mr. Gunderman continued, “We continue to grow
and densify our national network of 129,000 route miles of fiber,
making it one of the largest in the country.”
QUARTERLY RESULTS
Consolidated revenues for the first quarter of
2022 were $278.0 million. Net income and Adjusted EBITDA were $52.9
million and $224.8 million, respectively, for the same period. Net
income attributable to common shares was $52.4 million for the
period. Adjusted Funds From Operations (“AFFO”) attributable to
common shareholders was $112.3 million, or $0.43 per diluted common
share, an increase of 9.0% when compared to the first quarter of
2021.
Uniti Fiber contributed $73.4 million of
revenues and $31.5 million of Adjusted EBITDA for the first quarter
of 2022, achieving Adjusted EBITDA margins of approximately 43%.
Uniti Fiber’s net success-based capital expenditures during the
quarter were $36.8 million.
Uniti Leasing contributed revenues of $204.6
million and Adjusted EBITDA of $199.0 million for the first
quarter, representing growth of 5.0% and 3.8%, respectively, when
compared to the first quarter of 2021. During the quarter, Uniti
Leasing deployed capital expenditures of $52.7 million primarily
related to the construction of approximately 1,500 new route miles
of valuable fiber infrastructure.
FINANCING TRANSACTIONS
On April 24, 2022, certain lender commitments
under our senior revolving credit facility matured. These
commitments totaled $60.5 million and were not extended as part of
our amended credit agreement dated December 10, 2020. The aggregate
size of our current senior revolving credit facility is $500
million and will mature on December 10, 2024.
LIQUIDITY
At quarter-end, the Company had approximately
$386.6 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 5.74x
based on net debt to first quarter 2022 annualized Adjusted
EBITDA.
On May 3, 2022, the Company’s Board of Directors
declared a quarterly cash dividend of $0.15 per common share,
payable on July 1, 2022, to stockholders of record on June 17,
2022.
UPDATED FULL YEAR 2022 OUTLOOK
The Company is updating its 2022 outlook for
business unit level revisions, the impact of transaction related
and other costs incurred to date, and changes in the estimates of
interest expense, depreciation & amortization and
weighted-average diluted common shares outstanding. 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 |
$ |
1,119 |
to |
$ |
1,137 |
|
Net income attributable to common shareholders |
|
186 |
to |
|
204 |
|
Adjusted EBITDA (1) |
|
884 |
to |
|
902 |
|
Interest expense, net (2) |
|
390 |
to |
|
390 |
|
|
|
|
|
|
|
|
Attributable to common shareholders: |
|
|
|
|
|
|
FFO (1) |
|
399 |
to |
|
417 |
|
AFFO (1) |
|
441 |
to |
|
459 |
|
|
|
|
|
|
|
|
Weighted-average common shares outstanding – diluted |
|
267 |
to |
|
267 |
|
|
|
|
|
|
|
|
_______________(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 8091365. 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
8091365.
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 March 31, 2022, Uniti owns
approximately 129,000 fiber route miles, 7.7 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)
|
|
March 31, 2022 |
|
December 31,2021 |
Assets: |
|
|
|
|
Property, plant and equipment, net |
|
$ |
3,546,501 |
|
|
$ |
3,508,939 |
|
Cash and cash equivalents |
|
|
51,129 |
|
|
|
58,903 |
|
Accounts receivable, net |
|
|
41,269 |
|
|
|
38,455 |
|
Goodwill |
|
|
601,878 |
|
|
|
601,878 |
|
Intangible assets, net |
|
|
357,183 |
|
|
|
364,630 |
|
Straight-line revenue
receivable |
|
|
48,865 |
|
|
|
41,323 |
|
Operating lease right-of-use
assets, net |
|
|
81,810 |
|
|
|
80,271 |
|
Other assets |
|
|
81,556 |
|
|
|
38,900 |
|
Investment in unconsolidated
entities |
|
|
64,333 |
|
|
|
64,223 |
|
Deferred income tax assets,
net |
|
|
15,385 |
|
|
|
11,721 |
|
Total Assets |
|
$ |
4,889,909 |
|
|
$ |
4,809,243 |
|
|
|
|
|
|
|
|
Liabilities and
Shareholders’ Deficit |
|
|
|
|
|
|
Liabilities: |
|
|
|
|
|
|
Accounts payable, accrued
expenses and other liabilities, net |
|
$ |
122,157 |
|
|
$ |
86,868 |
|
Settlement payable |
|
|
242,261 |
|
|
|
239,384 |
|
Intangible liabilities,
net |
|
|
175,112 |
|
|
|
177,786 |
|
Accrued interest payable |
|
|
68,298 |
|
|
|
109,826 |
|
Deferred revenue |
|
|
1,134,585 |
|
|
|
1,134,236 |
|
Derivative liability, net |
|
|
7,269 |
|
|
|
10,413 |
|
Dividends payable |
|
|
37,145 |
|
|
|
1,264 |
|
Operating lease
liabilities |
|
|
59,679 |
|
|
|
57,355 |
|
Finance lease obligations |
|
|
15,144 |
|
|
|
15,348 |
|
Notes and other debt, net |
|
|
5,120,281 |
|
|
|
5,090,537 |
|
Total Liabilities |
|
|
6,981,931 |
|
|
|
6,923,017 |
|
|
|
|
|
|
|
|
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: 235,298 shares at March 31, 2022 and
234,779 shares at December 31, 2021 |
|
|
23 |
|
|
|
23 |
|
Additional paid-in
capital |
|
|
1,220,039 |
|
|
|
1,214,830 |
|
Accumulated other
comprehensive loss |
|
|
(6,341 |
) |
|
|
(9,164 |
) |
Distributions in excess of accumulated earnings |
|
|
(3,316,781 |
) |
|
|
(3,333,481 |
) |
Total Uniti shareholders’
deficit |
|
|
(2,103,060 |
) |
|
|
(2,127,792 |
) |
Noncontrolling interests –
operating partnership units and non-voting convertible preferred
stock |
|
|
11,038 |
|
|
|
14,018 |
|
Total shareholders’
deficit |
|
|
(2,092,022 |
) |
|
|
(2,113,774 |
) |
Total Liabilities and
Shareholders’ Deficit |
|
$ |
4,889,909 |
|
|
$ |
4,809,243 |
|
|
|
|
|
|
|
|
|
|
Uniti Group
Inc.Consolidated Statements of
Operations(In thousands, except per share
data)
|
Three Months Ended March 31, |
|
|
2022 |
|
|
|
2021 |
|
Revenues: |
|
|
|
|
|
Leasing |
$ |
204,641 |
|
|
$ |
194,936 |
|
Fiber
Infrastructure |
|
73,393 |
|
|
|
77,650 |
|
Total revenues |
|
278,034 |
|
|
|
272,586 |
|
|
|
|
|
|
|
Costs and expenses: |
|
|
|
|
|
Interest
expense, net |
|
96,172 |
|
|
|
140,581 |
|
Depreciation and amortization |
|
71,457 |
|
|
|
70,964 |
|
General
and administrative expense |
|
23,870 |
|
|
|
25,823 |
|
Operating expense (exclusive of depreciation and amortization) |
|
34,976 |
|
|
|
38,084 |
|
Transaction related and other costs |
|
1,714 |
|
|
|
4,137 |
|
Other
(income) expense, net |
|
(398 |
) |
|
|
454 |
|
Total costs and expenses |
|
227,791 |
|
|
|
280,043 |
|
|
|
|
|
|
|
Income
(loss) before income taxes and equity in earnings from
unconsolidated entities |
|
50,243 |
|
|
|
(7,457 |
) |
Income
tax benefit |
|
(2,071 |
) |
|
|
(2,557 |
) |
Equity
in earnings from unconsolidated entities |
|
(544 |
) |
|
|
(398 |
) |
Net income (loss) |
|
52,858 |
|
|
|
(4,502 |
) |
Net
income (loss) attributable to noncontrolling interests |
|
128 |
|
|
|
(64 |
) |
Net income (loss) attributable to
shareholders |
|
52,730 |
|
|
|
(4,438 |
) |
Participating securities’ share in earnings |
|
(331 |
) |
|
|
(248 |
) |
Dividends declared on convertible preferred stock |
|
(5 |
) |
|
|
(3 |
) |
Net income (loss) attributable to common
shareholders |
$ |
52,394 |
|
|
$ |
(4,689 |
) |
|
|
|
|
|
|
Net income (loss) attributable
to common shareholders – Basic |
$ |
52,394 |
|
|
$ |
(4,689 |
) |
Impact
of if-converted securities |
|
2,994 |
|
|
|
- |
|
Net
income (loss) attributable to common shareholders – Diluted |
$ |
55,388 |
|
|
$ |
(4,689 |
) |
|
|
|
|
|
|
Weighted average number of common shares
outstanding: |
|
|
|
|
|
Basic |
|
235,046 |
|
|
|
231,469 |
|
Diluted |
|
267,304 |
|
|
|
231,469 |
|
|
|
|
|
|
|
Earnings (loss) per common share: |
|
|
|
|
|
Basic |
$ |
0.22 |
|
|
$ |
(0.02 |
) |
Diluted |
$ |
0.21 |
|
|
$ |
(0.02 |
) |
|
|
|
|
|
|
Uniti Group
Inc.Consolidated Statements of Cash
Flows(In thousands)
|
|
Three Months Ended March 31, |
|
|
2022 |
|
2021 |
Cash flow from
operating activities: |
|
|
|
|
Net income (loss) |
|
$ |
52,858 |
|
|
$ |
(4,502 |
) |
Adjustments to reconcile net loss to net cash provided
by operating activities: |
|
|
|
|
|
|
Depreciation and amortization |
|
|
71,457 |
|
|
|
70,964 |
|
Amortization of deferred financing costs and debt discount |
|
|
4,514 |
|
|
|
4,959 |
|
Loss on extinguishment of debt |
|
|
- |
|
|
|
37,965 |
|
Interest rate swap termination |
|
|
2,830 |
|
|
|
2,829 |
|
Deferred income taxes |
|
|
(3,664 |
) |
|
|
(3,428 |
) |
Equity in earnings of unconsolidated entities |
|
|
(544 |
) |
|
|
(398 |
) |
Distributions of cumulative earnings from unconsolidated
entities |
|
|
980 |
|
|
|
960 |
|
Cash paid for interest rate swap settlement |
|
|
(3,144 |
) |
|
|
(2,989 |
) |
Straight-line revenues and amortization of below-market lease
intangibles |
|
|
(11,022 |
) |
|
|
(6,906 |
) |
Stock-based compensation |
|
|
3,312 |
|
|
|
3,335 |
|
Change in fair value of contingent consideration |
|
|
- |
|
|
|
21 |
|
Loss on asset disposals |
|
|
663 |
|
|
|
134 |
|
Accretion of settlement payable |
|
|
2,876 |
|
|
|
4,553 |
|
Other |
|
|
(318 |
) |
|
|
181 |
|
Changes in assets and liabilities, net of acquisitions: |
|
|
|
|
|
|
Accounts receivable |
|
|
(2,814 |
) |
|
|
11,466 |
|
Other assets |
|
|
157 |
|
|
|
47,630 |
|
Accounts payable, accrued expenses and other liabilities |
|
|
(54,920 |
) |
|
|
(40,110 |
) |
Net cash provided by operating activities |
|
|
63,221 |
|
|
|
126,664 |
|
|
|
|
|
|
|
|
Cash flows from investing activities: |
|
|
|
|
|
|
Other capital expenditures |
|
|
(94,728 |
) |
|
|
(84,377 |
) |
Proceeds from sale of other equipment |
|
|
379 |
|
|
|
- |
|
Net cash used in investing activities |
|
|
(94,349 |
) |
|
|
(84,377 |
) |
|
|
|
|
|
|
|
Cash flows from financing activities: |
|
|
|
|
|
|
Repayment of debt |
|
|
- |
|
|
|
(1,051,181 |
) |
Proceeds from issuance of notes |
|
|
- |
|
|
|
1,110,000 |
|
Dividends paid |
|
|
(105 |
) |
|
|
(34,961 |
) |
Payments of settlement payable |
|
|
- |
|
|
|
(24,505 |
) |
Payments of contingent consideration |
|
|
- |
|
|
|
(2,979 |
) |
Distributions paid to noncontrolling interests |
|
|
- |
|
|
|
(520 |
) |
Borrowings under revolving credit facility |
|
|
85,000 |
|
|
|
105,000 |
|
Payments under revolving credit facility |
|
|
(60,000 |
) |
|
|
(55,000 |
) |
Finance lease payments |
|
|
(280 |
) |
|
|
(710 |
) |
Payments for financing costs |
|
|
- |
|
|
|
(22,931 |
) |
Payment of tender premium |
|
|
- |
|
|
|
(17,550 |
) |
Employee stock purchase program |
|
|
264 |
|
|
|
288 |
|
Payments related to tax withholding for stock-based
compensation |
|
|
(1,525 |
) |
|
|
(2,306 |
) |
Net cash provided by financing activities |
|
|
23,354 |
|
|
|
2,645 |
|
Net (decrease) increase in cash and cash
equivalents |
|
|
(7,774 |
) |
|
|
44,932 |
|
Cash and cash equivalents at beginning of period |
|
|
58,903 |
|
|
|
77,534 |
|
Cash and cash equivalents at end of period |
|
$ |
51,129 |
|
|
$ |
122,466 |
|
|
|
|
|
|
|
|
Uniti Group
Inc.Reconciliation of Net Income to FFO and
AFFO (In thousands, except per share
data)
|
|
Three Months Ended March 31, |
|
|
2022 |
|
|
2021 |
Net income (loss) attributable to common
shareholders |
|
$ |
52,394 |
|
|
$ |
(4,689 |
) |
Real
estate depreciation and amortization |
|
|
51,893 |
|
|
|
53,377 |
|
Participating securities share in earnings |
|
|
331 |
|
|
|
248 |
|
Participating securities share in FFO |
|
|
(658 |
) |
|
|
(344 |
) |
Real
estate depreciation and amortization from unconsolidated
entities |
|
|
690 |
|
|
|
616 |
|
Adjustments for noncontrolling interests |
|
|
(129 |
) |
|
|
(796 |
) |
FFO attributable to common shareholders |
|
|
104,521 |
|
|
|
48,412 |
|
Transaction related and other costs |
|
|
1,714 |
|
|
|
4,137 |
|
Change
in fair value of contingent consideration |
|
|
- |
|
|
|
21 |
|
Amortization of deferred financing costs and debt discount |
|
|
4,514 |
|
|
|
4,959 |
|
Costs
related to the early repayment of debt |
|
|
- |
|
|
|
17,550 |
|
Write
off of deferred financing costs and debt discount |
|
|
- |
|
|
|
20,415 |
|
Stock
based compensation |
|
|
3,312 |
|
|
|
3,335 |
|
Non-real
estate depreciation and amortization |
|
|
19,564 |
|
|
|
17,587 |
|
Straight-line revenues and amortization of below-market lease
intangibles |
|
|
(11,022 |
) |
|
|
(6,906 |
) |
Maintenance capital expenditures |
|
|
(2,366 |
) |
|
|
(1,976 |
) |
Other,
net |
|
|
(8,170 |
) |
|
|
(3,970 |
) |
Adjustments for equity in earnings from unconsolidated
entities |
|
|
296 |
|
|
|
356 |
|
Adjustments for noncontrolling interests |
|
|
(21 |
) |
|
|
(818 |
) |
Adjusted FFO attributable to common
shareholders |
|
$ |
112,342 |
|
|
$ |
103,102 |
|
|
|
|
|
|
|
|
Reconciliation of Diluted FFO and AFFO: |
|
|
|
|
|
|
FFO Attributable to common shareholders – Basic |
|
$ |
104,521 |
|
|
$ |
48,412 |
|
Impact
of if-converted dilutive securities |
|
|
2,994 |
|
|
|
2,974 |
|
FFO
Attributable to common shareholders – Diluted |
|
$ |
107,515 |
|
|
$ |
51,386 |
|
|
|
|
|
|
|
|
AFFO
Attributable to common shareholders – Basic |
|
$ |
112,342 |
|
|
$ |
103,102 |
|
Impact
of if-converted dilutive securities |
|
|
3,450 |
|
|
|
3,450 |
|
AFFO
Attributable to common shareholders – Diluted |
|
$ |
115,792 |
|
|
$ |
106,552 |
|
|
|
|
|
|
|
|
Weighted
average common shares used to calculate basic earnings (loss) per
common share (1) |
|
|
235,046 |
|
|
|
231,469 |
|
Impact
of dilutive non-participating securities |
|
|
1,226 |
|
|
|
541 |
|
Impact
of if-converted dilutive securities |
|
|
31,032 |
|
|
|
30,052 |
|
Weighted
average common shares used to calculate diluted FFO and AFFO per
common share (1) |
|
|
267,304 |
|
|
|
262,062 |
|
|
|
|
|
|
|
|
Per diluted common share: |
|
|
|
|
|
|
EPS |
|
$ |
0.21 |
|
|
$ |
(0.02 |
) |
FFO |
|
$ |
0.40 |
|
|
$ |
0.20 |
|
AFFO |
|
$ |
0.43 |
|
|
$ |
0.41 |
|
|
|
|
|
|
|
|
_______________(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, |
|
|
|
2022 |
|
|
|
2021 |
|
Net income (loss) |
|
$ |
52,858 |
|
|
$ |
(4,502 |
) |
Depreciation and amortization |
|
|
71,457 |
|
|
|
70,964 |
|
Interest
expense, net |
|
|
96,172 |
|
|
|
140,581 |
|
Income
tax benefit |
|
|
(2,071 |
) |
|
|
(2,557 |
) |
EBITDA |
|
|
218,416 |
|
|
|
204,486 |
|
Stock-based compensation |
|
|
3,312 |
|
|
|
3,335 |
|
Transaction related and other costs |
|
|
1,714 |
|
|
|
4,137 |
|
Other,
net |
|
|
361 |
|
|
|
1,318 |
|
Adjustments for equity in earnings from unconsolidated
entities |
|
|
986 |
|
|
|
972 |
|
Adjusted EBITDA |
|
$ |
224,789 |
|
|
$ |
214,248 |
|
|
|
|
|
|
|
|
Adjusted EBITDA: |
|
|
|
|
|
|
Leasing |
|
$ |
198,973 |
|
|
$ |
191,497 |
|
Fiber Infrastructure |
|
|
31,459 |
|
|
|
29,721 |
|
Corporate |
|
|
(5,643 |
) |
|
|
(6,970 |
) |
|
|
$ |
224,789 |
|
|
$ |
214,248 |
|
|
|
|
|
|
|
|
Annualized Adjusted EBITDA (1) |
|
$ |
899,156 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
As of March 31, 2022: |
|
|
|
|
|
|
Total
Debt (2) |
|
$ |
5,215,144 |
|
|
|
|
Cash and
cash equivalents |
|
|
51,129 |
|
|
|
|
Net Debt |
|
$ |
5,164,015 |
|
|
|
|
|
|
|
|
|
|
|
Net Debt/Annualized Adjusted EBITDA |
|
|
5.74x |
|
|
|
|
|
|
|
|
|
|
|
_______________(1) Calculated as Adjusted EBITDA for the most
recently reported three-month period, multiplied by four.
Annualized Adjusted EBITDA has not been prepared on a pro forma
basis in accordance with Article 11 of Regulation S-X.(2) Includes
$15.1 million of finance leases, but excludes $79.7 million of
unamortized discounts and deferred financing costs.
Uniti Group
Inc.Projected Future Results
(1)(In
millions)
|
|
Year Ended December 31, 2022 |
Net income
attributable to common shareholders – Basic |
|
$ 186 to $ 204 |
Noncontrolling interest share
in earnings |
|
1 |
Participating securities’
share in earnings |
|
1 |
Net income
(2) |
|
188 to 206 |
Interest expense, net (3) |
|
390 |
Depreciation and
amortization |
|
292 |
Income tax benefit |
|
(3) |
EBITDA (2) |
|
867 to 885 |
Stock-based compensation |
|
12 |
Transaction related and other
costs (4) |
|
2 |
Adjustment for unconsolidated
entities |
|
3 |
Adjusted EBITDA
(2) |
|
$ 884 to $ 902 |
|
|
|
_______________(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) 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, 2022 |
Net income
attributable to common shareholders – Basic |
|
$ 0.79 to $ 0.87 |
Real estate depreciation and
amortization |
|
0.89 |
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) |
|
$ 1.69 to $ 1.77 |
Impact of if-converted
securities |
|
(0.16) |
FFO attributable to
common shareholders – Diluted (2) |
|
$ 1.53 to $ 1.60 |
|
|
|
FFO attributable to
common shareholders – Basic (2) |
|
$ 1.69 to $ 1.77 |
Transaction related and other
costs (3) |
|
0.01 |
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 |
|
0.35 |
Straight-line revenues |
|
(0.17) |
Maintenance capital
expenditures |
|
(0.03) |
Other, net |
|
(0.16) |
Adjustments for noncontrolling
interests |
|
- |
AFFO attributable to
common shareholders – Basic (2) |
|
$ 1.87 to $ 1.95 |
Impact of if-converted
securities |
|
(0.17) |
AFFO attributable to common shareholders – Diluted
(2) |
$ 1.70 to $ 1.77 |
|
|
|
_______________(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) 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 |
|
$ |
351 |
|
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) |
|
$ |
390 |
|
|
|
|
|
|
_______________(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) Represents recognition of
deferred interest expense attributable to the discontinuance of
hedge accounting on interest rate swaps.(3) 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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