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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d)
of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported):
August 15, 2023
Uniti Group Inc.
(Exact name of registrant as specified
in its charter)
Maryland |
|
001-36708 |
|
46-5230630 |
(State or other jurisdiction
of incorporation) |
|
(Commission
File Number) |
|
(IRS Employer
Identification No.) |
2101 Riverfront Drive, Suite A
Little Rock, Arkansas |
|
72202 |
(Address of principal executive offices) |
|
(Zip Code) |
Registrant’s telephone number,
including area code: (501) 850-0820
Not Applicable
(Former name or former address, if changed
since last report.)
Check the appropriate box below if the
Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
¨ |
Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
¨ |
Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
¨ |
Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
¨ |
Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
Securities registered pursuant to Section
12(b) of the Act:
Title of each class |
Trading Symbol(s) |
Name of each exchange on which registered |
Common Stock |
UNIT |
The NASDAQ Global Select Market |
Indicate by check mark whether the registrant
is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the
Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
Emerging growth company ¨
If an emerging growth company,
indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised
financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ¨
Item 7.01 Regulation
FD Disclosure.
Uniti Group Inc. (the “Company”)
is furnishing this Current Report on Form 8-K to provide certain financial information of Windstream Holdings II, LLC, successor in interest
to Windstream Holdings, Inc., and its consolidated subsidiaries (collectively, “Windstream”) regarding the period ended June
30, 2023. The financial information was provided to the Company by Windstream; the Company did not assist in the preparation or review
of this financial information and makes no representation as to its accuracy.
The information contained
in this Item 7.01, including the exhibit attached hereto, is being “furnished” and shall not be deemed “filed”
for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to
the liabilities of Section 18 of the Exchange Act. The information in this Item 7.01 shall not be incorporated by reference into any registration
statement or other document pursuant to the Securities Act of 1933, as amended, or into any filing or other document pursuant to the Exchange
Act, except as otherwise expressly stated in any such filing.
Item
9.01 Financial Statements and Exhibits.
(d) Exhibits
SIGNATURES
Pursuant to the requirements
of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto
duly authorized.
| By: | /s/
Daniel L. Heard |
| Name: | Daniel L. Heard |
| Title: | Executive Vice President – General Counsel and Secretary |
Date: August 15, 2023
Exhibit 99.1
Windstream Holdings II, LLC ("Windstream",
"we", "us", "our", or "the Company") has presented in this Investor Supplement unaudited adjusted
results, which excludes depreciation and amortization, straight-line expense under the master leases with Uniti Group, Inc. ("Uniti"),
equity-based compensation expense, and certain other costs. We have also presented certain measures of our operating performance, on
an adjusted basis, that reflects the impact of the cash payment due under the master leases with Uniti. In addition, we have presented
on a pro forma adjusted basis Adjusted EBITDA as if Uniti's fourth quarter 2021 prepayment of all quarterly amounts due in 2022 were
made as scheduled.
During the first quarter of 2023, we completed
a number of activities to maximize our strategic optionality by further separating our business units, which included legal entity changes,
financial reporting modifications and alignment of our network infrastructure to our business unit operations. To better reflect the
individual business unit financial performance, we established various intercompany billing agreements related to network sharing arrangements
between our business units and created a new OfficeSuite business unit. These intercompany transactions have no impact on our consolidated
results of operations as the intercompany revenues and expenses are eliminated in consolidation. To further align our business unit operations,
we made additional changes to our previous segment structure, which included (1) shifting revenues and expenses related to certain time-division-multiplexing
(“TDM”) voice and data services from Wholesale to Enterprise, (2) shifting revenues and expenses related to certain fiber-to-the-tower
services from Wholesale to Kinetic and (3) reassigning certain costs and expenses. During the second quarter of 2023, we finalized the
intercompany billing arrangements between the Kinetic and Wholesale business units and also adjusted certain expense assignments. Prior
period segment information previously reported in the March 31, 2023 investor supplement has been revised to reflect these changes. A
reconciliation of previously reported to revised segment information is included within this Investor Supplement.
As a result of the 2023 changes discussed above,
our business operations are organized into four segments: Kinetic, Enterprise, Wholesale and OfficeSuite. The Kinetic business unit primarily
serves customers in markets in which we are the incumbent local exchange carrier (“ILEC”) and provides services over network
facilities operated by us. The Enterprise and Wholesale business units primarily serve customers in markets in which we are a competitive
local exchange carrier (“CLEC”) and provide services over network facilities primarily leased from other carriers. The OfficeSuite
business unit charges Kinetic, Enterprise and certain external reseller customers licensing fees for the usage of the OfficeSuite UC
© product.
We use Adjusted EBITDA, Adjusted EBITDAR, Adjusted
Free Cash Flow and Adjusted Capital Expenditures as key measures of the operational performance of our business. Our management, including
the chief operating decision-maker, consistently uses these measures for internal reporting and the evaluation of business objectives,
opportunities and performance, and the determination of management compensation. Management believes that Adjusted Free Cash Flow provides
investors with useful information about the ability of our core operations to generate cash flow. Because capital spending is necessary
to maintain our operational capabilities, we believe that capital expenditures represents a recurring and necessary use of cash. As such,
we believe investors should consider our capital spending and payments due under our master leases with Uniti when evaluating the amount
of cash provided by our operating activities.
WINDSTREAM HOLDINGS II, LLC
UNAUDITED ADJUSTED RESULTS OF OPERATIONS (NON-GAAP)
QUARTERLY SUPPLEMENTAL INFORMATION
for the quarterly periods in the years 2023 and 2022
(In millions)
| |
2023 | | |
2022 | |
| |
Total | | |
2nd
Qtr. | | |
1st Qtr. | | |
Total | | |
4th Qtr. | | |
3rd
Qtr. | | |
2nd Qtr. | | |
1st Qtr. | |
ADJUSTED
RESULTS OF OPERATIONS: | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| |
Revenues
and sales: | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| |
Service
revenues | |
$ | 1,999.4 | | |
$ | 980.0 | | |
$ | 1,019.4 | | |
$ | 4,183.8 | | |
$ | 1,042.9 | | |
$ | 1,047.3 | | |
$ | 1,034.1 | | |
$ | 1,059.5 | |
Product
and fiber sales | |
| 18.8 | | |
| 10.9 | | |
| 7.9 | | |
| 45.1 | | |
| 10.3 | | |
| 12.6 | | |
| 10.8 | | |
| 11.4 | |
Total
revenues and sales | |
| 2,018.2 | | |
| 990.9 | | |
| 1,027.3 | | |
| 4,228.9 | | |
| 1,053.2 | | |
| 1,059.9 | | |
| 1,044.9 | | |
| 1,070.9 | |
| |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | |
Costs
and expenses: | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | |
Cost
of services | |
| 927.9 | | |
| 457.0 | | |
| 470.9 | | |
| 2,017.3 | | |
| 476.2 | | |
| 516.6 | | |
| 498.1 | | |
| 526.4 | |
Cost
of sales | |
| 25.2 | | |
| 13.1 | | |
| 12.1 | | |
| 55.0 | | |
| 11.8 | | |
| 15.4 | | |
| 13.5 | | |
| 14.3 | |
Selling,
general and administrative | |
| 325.6 | | |
| 161.1 | | |
| 164.5 | | |
| 672.3 | | |
| 165.3 | | |
| 169.4 | | |
| 169.4 | | |
| 168.2 | |
Costs
and expenses | |
| 1,278.7 | | |
| 631.2 | | |
| 647.5 | | |
| 2,744.6 | | |
| 653.3 | | |
| 701.4 | | |
| 681.0 | | |
| 708.9 | |
| |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | |
Adjusted
EBITDAR (A) | |
| 739.5 | | |
| 359.7 | | |
| 379.8 | | |
| 1,484.3 | | |
| 399.9 | | |
| 358.5 | | |
| 363.9 | | |
| 362.0 | |
Cash
payment under master leases with Uniti | |
| (335.5 | ) | |
| (168.0 | ) | |
| (167.5 | ) | |
| (668.9 | ) | |
| (167.5 | ) | |
| (167.5 | ) | |
| (167.2 | ) | |
| (166.7 | ) |
Cash
received from Uniti per settlement agreement (B) | |
| 49.0 | | |
| 24.5 | | |
| 24.5 | | |
| - | | |
| - | | |
| - | | |
| - | | |
| - | |
Adjusted
EBITDA (C) | |
$ | 453.0 | | |
$ | 216.2 | | |
$ | 236.8 | | |
$ | 815.4 | | |
$ | 232.4 | | |
$ | 191.0 | | |
$ | 196.7 | | |
$ | 195.3 | |
| |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | |
Pro
forma Adjusted EBITDA (D) | |
$ | 453.0 | | |
$ | 216.2 | | |
$ | 236.8 | | |
$ | 908.3 | | |
$ | 255.6 | | |
$ | 214.2 | | |
$ | 219.9 | | |
$ | 218.6 | |
| |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | |
Margins
(E): | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | |
Adjusted
EBITDAR margin | |
| 36.6 | % | |
| 36.3 | % | |
| 37.0 | % | |
| 35.1 | % | |
| 38.0 | % | |
| 33.8 | % | |
| 34.8 | % | |
| 33.8 | % |
Adjusted
EBITDA margin | |
| 22.4 | % | |
| 21.8 | % | |
| 23.1 | % | |
| 19.3 | % | |
| 22.1 | % | |
| 18.0 | % | |
| 18.8 | % | |
| 18.2 | % |
Pro
forma Adjusted EBITDA margin | |
| 22.4 | % | |
| 21.8 | % | |
| 23.1 | % | |
| 21.5 | % | |
| 24.3 | % | |
| 20.2 | % | |
| 21.0 | % | |
| 20.4 | % |
| |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | |
Adjusted
Capital Expenditures | |
$ | 549.0 | | |
$ | 245.9 | | |
$ | 303.1 | | |
$ | 1,067.2 | | |
$ | 274.0 | | |
$ | 296.4 | | |
$ | 286.6 | | |
$ | 210.2 | |
Adjusted
Free Cash Flow (F) | |
$ | (65.7 | ) | |
$ | 16.5 | | |
$ | (82.2 | ) | |
$ | (212.9 | ) | |
$ | 13.6 | | |
$ | (116.6 | ) | |
$ | (72.2 | ) | |
$ | (37.7 | ) |
| |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | |
| |
| As
of | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | |
| |
| 6/30/2023 | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | |
Debt Leverage
Ratio: | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | |
Long-term
debt, including current maturities (G) | |
$ | 2,365.3 | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | |
Add:
Capital lease obligations | |
| 31.2 | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | |
Less:
Cash and cash equivalents | |
| (29.3 | ) | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | |
Net
debt | (1) |
$ | 2,367.2 | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | |
| |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | |
| |
| Twelve | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | |
| |
| Months
Ended | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | |
| |
| 6/30/2023 | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | |
Pro
forma Adjusted EBITDA | (2) |
$ | 922.8 | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | |
Net
leverage ratio (H) - computed as (1)/(2) | |
| 2.56 | x | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | |
| |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | |
Available
liquidity as of June 30, 2023: | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | |
Cash
and cash equivalents | |
$ | 29.3 | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | |
Available
capacity under credit facility (I) | |
| 395.7 | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | |
Available
liquidity | |
$ | 425.0 | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | |
(A) | Adjusted EBITDAR is earnings before interest
expense, income taxes and depreciation and amortization and is calculated as operating income
(loss) excluding depreciation and amortization, straight-line expense under the master leases
with Uniti, equity-based compensation expense, and certain other costs. |
(B) | In the fourth quarter of 2021, Uniti
prepaid all of the quarterly amounts payable to Windstream in 2022. |
(C) | Adjusted EBITDA is Adjusted EBITDAR after
the cash payment due under the master leases with Uniti excluding additional rent paid for
growth capital expenditures funded by Uniti and increased for cash received from Uniti per
the settlement agreement. |
(D) | Pro forma Adjusted EBITDA is Adjusted
EBITDA as if Uniti's fourth quarter 2021 prepayment of all quarterly amounts due in 2022
were made as scheduled. |
(E) | Margins are calculated by dividing the
respective profitability measures by total revenues and sales. |
(F) | Adjusted Free Cash
Flow is Adjusted EBITDA less adjusted capital expenditures, additional rent paid for growth
capital expenditures funded by Uniti and cash paid for interest on long-term debt obligations
plus funding received from Uniti for growth capital expenditures and adjusted for cash (paid)
refunded for income taxes, net. |
(G) | Long-term debt, including current maturities
excluding unamortized debt discount. |
(H) | The net leverage ratio is computed by
dividing net debt by Pro forma Adjusted EBITDA. |
(I) | Available capacity under credit facility
excludes outstanding letters of credit of $104.3 million of which $78.4 million was issued
to Universal Service Administrative Company as a condition for Windstream receiving Rural
Digital Opportunity Fund ("RDOF") funding. |
See page
7 for computations of Adjusted EBITDAR, Adjusted EBITDA, Pro Forma Adjusted EBITDA, Adjusted Free Cash Flow and Adjusted Capital Expenditures.
WINDSTREAM HOLDINGS II, LLC
QUARTERLY SUPPLEMENTAL INFORMATION - REVENUE SUPPLEMENT
for the quarterly periods in the years 2023 and 2022
(In millions)
| |
2023 | | |
2022 | |
| |
Total | | |
2nd Qtr. | | |
1st Qtr. | | |
Total | | |
4th
Qtr. | | |
3rd
Qtr. | | |
2nd Qtr. | | |
1st Qtr. | |
Service revenues: | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| |
Kinetic: | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| |
High-speed
Internet bundles | |
$ | 603.5 | | |
$ | 303.9 | | |
$ | 299.6 | | |
$ | 1,160.2 | | |
$ | 290.0 | | |
$ | 291.4 | | |
$ | 289.0 | | |
$ | 289.8 | |
Voice
and other | |
| 36.0 | | |
| 17.6 | | |
| 18.4 | | |
| 76.6 | | |
| 18.0 | | |
| 18.9 | | |
| 18.5 | | |
| 21.2 | |
Consumer | |
| 639.5 | | |
| 321.5 | | |
| 318.0 | | |
| 1,236.8 | | |
| 308.0 | | |
| 310.3 | | |
| 307.5 | | |
| 311.0 | |
Small business | |
| 144.9 | | |
| 72.0 | | |
| 72.9 | | |
| 299.1 | | |
| 73.9 | | |
| 75.1 | | |
| 74.4 | | |
| 75.7 | |
Large business | |
| 56.5 | | |
| 26.6 | | |
| 29.9 | | |
| 122.9 | | |
| 30.1 | | |
| 30.9 | | |
| 30.1 | | |
| 31.8 | |
Wholesale | |
| 154.6 | | |
| 78.1 | | |
| 76.5 | | |
| 291.0 | | |
| 75.1 | | |
| 73.6 | | |
| 74.1 | | |
| 68.2 | |
Switched
access | |
| 6.7 | | |
| 3.4 | | |
| 3.3 | | |
| 18.3 | | |
| 3.9 | | |
| 4.3 | | |
| 4.8 | | |
| 5.3 | |
RDOF funding | |
| 26.1 | | |
| 13.0 | | |
| 13.1 | | |
| 51.8 | | |
| 13.0 | | |
| 13.1 | | |
| 13.3 | | |
| 12.4 | |
State USF | |
| 32.0 | | |
| 16.0 | | |
| 16.0 | | |
| 100.2 | | |
| 70.5 | | |
| 13.4 | | |
| 7.7 | | |
| 8.6 | |
End user
surcharges | |
| 34.4 | | |
| 15.9 | | |
| 18.5 | | |
| 69.2 | | |
| 18.1 | | |
| 19.3 | | |
| 15.3 | | |
| 16.5 | |
Intersegment
revenues (A) | |
| 7.4 | | |
| 3.6 | | |
| 3.8 | | |
| 17.1 | | |
| 4.2 | | |
| 4.2 | | |
| 4.3 | | |
| 4.4 | |
Kinetic | |
| 1,102.1 | | |
| 550.1 | | |
| 552.0 | | |
| 2,206.4 | | |
| 596.8 | | |
| 544.2 | | |
| 531.5 | | |
| 533.9 | |
| |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | |
Enterprise: | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | |
Strategic
(B) | |
| 237.4 | | |
| 120.5 | | |
| 116.9 | | |
| 429.4 | | |
| 111.2 | | |
| 109.4 | | |
| 105.4 | | |
| 103.4 | |
Advanced
IP (C) | |
| 255.5 | | |
| 124.1 | | |
| 131.4 | | |
| 548.6 | | |
| 130.0 | | |
| 137.4 | | |
| 136.2 | | |
| 145.0 | |
Total | |
| 492.9 | | |
| 244.6 | | |
| 248.3 | | |
| 978.0 | | |
| 241.2 | | |
| 246.8 | | |
| 241.6 | | |
| 248.4 | |
TDM/Other
(D) | |
| 211.3 | | |
| 92.0 | | |
| 119.3 | | |
| 648.0 | | |
| 119.2 | | |
| 163.1 | | |
| 173.7 | | |
| 192.0 | |
End user
surcharges | |
| 31.0 | | |
| 14.3 | | |
| 16.7 | | |
| 73.8 | | |
| 14.9 | | |
| 19.0 | | |
| 18.0 | | |
| 21.9 | |
Intersegment
revenues (E) | |
| 0.3 | | |
| 0.2 | | |
| 0.1 | | |
| 0.7 | | |
| 0.1 | | |
| 0.2 | | |
| 0.2 | | |
| 0.2 | |
Enterprise | |
| 735.5 | | |
| 351.1 | | |
| 384.4 | | |
| 1,700.5 | | |
| 375.4 | | |
| 429.1 | | |
| 433.5 | | |
| 462.5 | |
| |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | |
Wholesale: | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | |
Fiber and
colocation services | |
| 168.8 | | |
| 82.3 | | |
| 86.5 | | |
| 293.6 | | |
| 74.7 | | |
| 78.1 | | |
| 73.4 | | |
| 67.4 | |
Intersegment
revenues (F) | |
| 48.0 | | |
| 23.6 | | |
| 24.4 | | |
| 99.3 | | |
| 24.9 | | |
| 24.8 | | |
| 24.7 | | |
| 24.9 | |
Wholesale | |
| 216.8 | | |
| 105.9 | | |
| 110.9 | | |
| 392.9 | | |
| 99.6 | | |
| 102.9 | | |
| 98.1 | | |
| 92.3 | |
| |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | |
OfficeSuite: | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | |
License
fees | |
| 0.7 | | |
| 0.3 | | |
| 0.4 | | |
| 1.1 | | |
| 0.3 | | |
| 0.3 | | |
| 0.2 | | |
| 0.3 | |
Intersegment
revenues (G) | |
| 10.5 | | |
| 5.4 | | |
| 5.1 | | |
| 19.0 | | |
| 5.0 | | |
| 4.8 | | |
| 4.7 | | |
| 4.5 | |
OfficeSuite | |
| 11.2 | | |
| 5.7 | | |
| 5.5 | | |
| 20.1 | | |
| 5.3 | | |
| 5.1 | | |
| 4.9 | | |
| 4.8 | |
Total
service revenues | |
| 2,065.6 | | |
| 1,012.8 | | |
| 1,052.8 | | |
| 4,319.9 | | |
| 1,077.1 | | |
| 1,081.3 | | |
| 1,068.0 | | |
| 1,093.5 | |
| |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | |
Product and
fiber sales: | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | |
Kinetic
product sales | |
| 16.1 | | |
| 8.6 | | |
| 7.5 | | |
| 39.1 | | |
| 8.2 | | |
| 12.0 | | |
| 8.6 | | |
| 10.3 | |
Enterprise
product sales | |
| 0.7 | | |
| 0.3 | | |
| 0.4 | | |
| 4.3 | | |
| 0.4 | | |
| 0.6 | | |
| 2.2 | | |
| 1.1 | |
Wholesale
fiber sales | |
| 2.0 | | |
| 2.0 | | |
| - | | |
| 1.7 | | |
| 1.7 | | |
| - | | |
| - | | |
| - | |
Total
product and fiber sales | |
| 18.8 | | |
| 10.9 | | |
| 7.9 | | |
| 45.1 | | |
| 10.3 | | |
| 12.6 | | |
| 10.8 | | |
| 11.4 | |
Total
segment revenues and sales | |
$ | 2,084.4 | | |
$ | 1,023.7 | | |
$ | 1,060.7 | | |
$ | 4,365.0 | | |
$ | 1,087.4 | | |
$ | 1,093.9 | | |
$ | 1,078.8 | | |
$ | 1,104.9 | |
(A) | Consists of charges to Enterprise for network transport services and
last mile access to Enterprise locations within the Kinetic footprint. |
(B) | Strategic revenues consist of recurring Secure Access Service Edge ("SASE"),
Unified Communications as a Service ("UCaaS"), OfficeSuite UC©, and associated network access products
and services. SASE includes both Software Defined Wide Area Network (“SD-WAN”) and Security Service Edge (“SSE”). |
(C) | Advanced IP revenues consist of recurring dynamic Internet protocol, dedicated Internet access,
multi-protocol label switching services, integrated voice and data, long distance and managed services. |
(D) | TDM revenues consist of time-division multiplexing ("TDM") voice and data services.
Other revenues include usage-based long-distance revenues and resale revenues as well as all non-recurring revenues. |
(E) | Consists of charges to Kinetic for the resale of TDM voice and data services provisioned
by Enterprise switching equipment. |
(F) | Consists of charges to Kinetic and Enterprise for transport services including network and
customer specific usage. |
(G) | OfficeSuite UC© charges Kinetic and Enterprise licensing fees for the usage
of the OfficeSuite UC© product. |
WINDSTREAM
HOLDINGS II, LLC
QUARTERLY
SUPPLEMENTAL INFORMATION - BUSINESS SEGMENTS
for
the quarterly periods in the years 2023 and 2022
(In
millions)
| |
2023 | | |
2022 | |
| |
Total | | |
2nd Qtr. | | |
1st Qtr. | | |
Total | | |
4th
Qtr. | | |
3rd Qtr. | | |
2nd
Qtr. | | |
1st Qtr. | |
Kinetic | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| |
Revenues and sales: | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| |
Service
revenues | |
$ | 1,102.1 | | |
$ | 550.1 | | |
$ | 552.0 | | |
$ | 2,206.4 | | |
$ | 596.8 | | |
$ | 544.2 | | |
$ | 531.5 | | |
$ | 533.9 | |
Product
sales | |
| 16.1 | | |
| 8.6 | | |
| 7.5 | | |
| 39.1 | | |
| 8.2 | | |
| 12.0 | | |
| 8.6 | | |
| 10.3 | |
Total
revenues and sales | |
| 1,118.2 | | |
| 558.7 | | |
| 559.5 | | |
| 2,245.5 | | |
| 605.0 | | |
| 556.2 | | |
| 540.1 | | |
| 544.2 | |
Costs and expenses | |
| 538.8 | | |
| 270.4 | | |
| 268.4 | | |
| 1,102.0 | | |
| 268.2 | | |
| 291.0 | | |
| 269.3 | | |
| 273.5 | |
Intersegment costs and expenses (A) | |
| 30.9 | | |
| 15.4 | | |
| 15.5 | | |
| 61.4 | | |
| 15.5 | | |
| 15.4 | | |
| 15.2 | | |
| 15.3 | |
Total
costs and expenses | |
| 569.7 | | |
| 285.8 | | |
| 283.9 | | |
| 1,163.4 | | |
| 283.7 | | |
| 306.4 | | |
| 284.5 | | |
| 288.8 | |
Kinetic contribution margin | |
$ | 548.5 | | |
$ | 272.9 | | |
$ | 275.6 | | |
$ | 1,082.1 | | |
$ | 321.3 | | |
$ | 249.8 | | |
$ | 255.6 | | |
$ | 255.4 | |
Kinetic contribution margin % | |
| 49.1 | % | |
| 48.8 | % | |
| 49.3 | % | |
| 48.2 | % | |
| 53.1 | % | |
| 44.9 | % | |
| 47.3 | % | |
| 46.9 | % |
| |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | |
Enterprise | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | |
Revenues and sales: | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | |
Service revenues | |
$ | 735.5 | | |
$ | 351.1 | | |
$ | 384.4 | | |
$ | 1,700.5 | | |
$ | 375.4 | | |
$ | 429.1 | | |
$ | 433.5 | | |
$ | 462.5 | |
Product
sales | |
| 0.7 | | |
| 0.3 | | |
| 0.4 | | |
| 4.3 | | |
| 0.4 | | |
| 0.6 | | |
| 2.2 | | |
| 1.1 | |
Total
revenues and sales | |
| 736.2 | | |
| 351.4 | | |
| 384.8 | | |
| 1,704.8 | | |
| 375.8 | | |
| 429.7 | | |
| 435.7 | | |
| 463.6 | |
Costs and expenses | |
| 545.1 | | |
| 262.4 | | |
| 282.7 | | |
| 1,249.2 | | |
| 286.8 | | |
| 312.6 | | |
| 313.0 | | |
| 336.8 | |
Intersegment costs and expenses (A) | |
| 64.3 | | |
| 31.9 | | |
| 32.4 | | |
| 131.9 | | |
| 33.0 | | |
| 32.9 | | |
| 33.0 | | |
| 33.0 | |
Total
costs and expenses | |
| 609.4 | | |
| 294.3 | | |
| 315.1 | | |
| 1,381.1 | | |
| 319.8 | | |
| 345.5 | | |
| 346.0 | | |
| 369.8 | |
Enterprise contribution margin | |
$ | 126.8 | | |
$ | 57.1 | | |
$ | 69.7 | | |
$ | 323.7 | | |
$ | 56.0 | | |
$ | 84.2 | | |
$ | 89.7 | | |
$ | 93.8 | |
Enterprise contribution margin % | |
| 17.2 | % | |
| 16.2 | % | |
| 18.1 | % | |
| 19.0 | % | |
| 14.9 | % | |
| 19.6 | % | |
| 20.6 | % | |
| 20.2 | % |
| |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | |
Wholesale | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | |
Revenues and sales: | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | |
Service revenues | |
$ | 216.8 | | |
$ | 105.9 | | |
$ | 110.9 | | |
$ | 392.9 | | |
$ | 99.6 | | |
$ | 102.9 | | |
$ | 98.1 | | |
$ | 92.3 | |
Fiber
sales | |
| 2.0 | | |
| 2.0 | | |
| - | | |
| 1.7 | | |
| 1.7 | | |
| - | | |
| - | | |
| - | |
Total
revenues and sales | |
| 218.8 | | |
| 107.9 | | |
| 110.9 | | |
| 394.6 | | |
| 101.3 | | |
| 102.9 | | |
| 98.1 | | |
| 92.3 | |
Costs and expenses | |
| 152.4 | | |
| 77.3 | | |
| 75.1 | | |
| 298.2 | | |
| 73.9 | | |
| 75.4 | | |
| 73.5 | | |
| 75.4 | |
Intersegment costs and expenses (A) | |
| (29.5 | ) | |
| (14.7 | ) | |
| (14.8 | ) | |
| (58.4 | ) | |
| (14.6 | ) | |
| (14.6 | ) | |
| (14.6 | ) | |
| (14.6 | ) |
Total
costs and expenses | |
| 122.9 | | |
| 62.6 | | |
| 60.3 | | |
| 239.8 | | |
| 59.3 | | |
| 60.8 | | |
| 58.9 | | |
| 60.8 | |
Wholesale contribution margin | |
$ | 95.9 | | |
$ | 45.3 | | |
$ | 50.6 | | |
$ | 154.8 | | |
$ | 42.0 | | |
$ | 42.1 | | |
$ | 39.2 | | |
$ | 31.5 | |
Wholesale contribution margin % | |
| 43.8 | % | |
| 42.0 | % | |
| 45.6 | % | |
| 39.2 | % | |
| 41.5 | % | |
| 40.9 | % | |
| 40.0 | % | |
| 34.1 | % |
| |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | |
OfficeSuite | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | |
Revenues and sales: | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | |
Service
revenues | |
$ | 11.2 | | |
$ | 5.7 | | |
$ | 5.5 | | |
$ | 20.1 | | |
$ | 5.3 | | |
$ | 5.1 | | |
$ | 4.9 | | |
$ | 4.8 | |
Total
revenues and sales | |
| 11.2 | | |
| 5.7 | | |
| 5.5 | | |
| 20.1 | | |
| 5.3 | | |
| 5.1 | | |
| 4.9 | | |
| 4.8 | |
Costs and expenses | |
| 1.8 | | |
| 0.9 | | |
| 0.9 | | |
| 4.4 | | |
| 1.1 | | |
| 1.1 | | |
| 1.0 | | |
| 1.2 | |
Intersegment costs and expenses (A) | |
| 0.5 | | |
| 0.2 | | |
| 0.3 | | |
| 1.2 | | |
| 0.3 | | |
| 0.3 | | |
| 0.3 | | |
| 0.3 | |
Total
costs and expenses | |
| 2.3 | | |
| 1.1 | | |
| 1.2 | | |
| 5.6 | | |
| 1.4 | | |
| 1.4 | | |
| 1.3 | | |
| 1.5 | |
OfficeSuite contribution margin | |
$ | 8.9 | | |
$ | 4.6 | | |
$ | 4.3 | | |
$ | 14.5 | | |
$ | 3.9 | | |
$ | 3.7 | | |
$ | 3.6 | | |
$ | 3.3 | |
OfficeSuite contribution margin % | |
| 79.5 | % | |
| 80.7 | % | |
| 77.7 | % | |
| 72.1 | % | |
| 72.6 | % | |
| 73.5 | % | |
| 73.5 | % | |
| 68.8 | % |
(A) | Intercompany costs and expenses include the effects
of the intercompany billing agreements. In addition, charges for usage of network and colocation facilities
owned or operated by Wholesale are reported as contra-expense on Wholesale with corresponding increases
in the other business segments’ costs and expenses. |
WINDSTREAM
HOLDINGS II, LLC
QUARTERLY
SUPPLEMENTAL INFORMATION - BUSINESS SEGMENTS
for
the quarterly periods in the years 2023 and 2022
(In
millions)
| |
2023 | | |
2022 | |
| |
Total | | |
2nd Qtr. | | |
1st Qtr. | | |
Total | | |
4th
Qtr. | | |
3rd Qtr. | | |
2nd
Qtr. | | |
1st Qtr. | |
Total segment
revenues and expenses | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| |
Revenues and sales: | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| |
Service
revenues | |
$ | 2,065.6 | | |
$ | 1,012.8 | | |
$ | 1,052.8 | | |
$ | 4,319.9 | | |
$ | 1,077.1 | | |
$ | 1,081.3 | | |
$ | 1,068.0 | | |
$ | 1,093.5 | |
Product
and fiber sales | |
| 18.8 | | |
| 10.9 | | |
| 7.9 | | |
| 45.1 | | |
| 10.3 | | |
| 12.6 | | |
| 10.8 | | |
| 11.4 | |
Total segment
revenues and sales | |
| 2,084.4 | | |
| 1,023.7 | | |
| 1,060.7 | | |
| 4,365.0 | | |
| 1,087.4 | | |
| 1,093.9 | | |
| 1,078.8 | | |
| 1,104.9 | |
Total segment costs and expenses | |
| 1,304.3 | | |
| 643.8 | | |
| 660.5 | | |
| 2,789.9 | | |
| 664.2 | | |
| 714.1 | | |
| 690.7 | | |
| 720.9 | |
Segment contribution margin | |
| 780.1 | | |
| 379.9 | | |
| 400.2 | | |
| 1,575.1 | | |
| 423.2 | | |
| 379.8 | | |
| 388.1 | | |
| 384.0 | |
Segment contribution margin % | |
| 37.4 | % | |
| 37.1 | % | |
| 37.7 | % | |
| 36.1 | % | |
| 38.9 | % | |
| 34.7 | % | |
| 36.0 | % | |
| 34.8 | % |
| |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | |
Intersegment eliminations | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | |
Service revenues | |
$ | (66.2 | ) | |
$ | (32.8 | ) | |
$ | (33.4 | ) | |
$ | (136.1 | ) | |
$ | (34.2 | ) | |
$ | (34.0 | ) | |
$ | (33.9 | ) | |
$ | (34.0 | ) |
Cost
and expenses | |
| (66.2 | ) | |
| (32.8 | ) | |
| (33.4 | ) | |
| (136.1 | ) | |
| (34.2 | ) | |
| (34.0 | ) | |
| (33.9 | ) | |
| (34.0 | ) |
Contribution
margin | |
$ | - | | |
$ | - | | |
$ | - | | |
$ | - | | |
$ | - | | |
$ | - | | |
$ | - | | |
$ | - | |
| |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | |
Consolidated revenues and
sales | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | |
Service revenues | |
$ | 1,999.4 | | |
$ | 980.0 | | |
$ | 1,019.4 | | |
$ | 4,183.8 | | |
$ | 1,042.9 | | |
$ | 1,047.3 | | |
$ | 1,034.1 | | |
$ | 1,059.5 | |
Product
and fiber sales | |
| 18.8 | | |
| 10.9 | | |
| 7.9 | | |
| 45.1 | | |
| 10.3 | | |
| 12.6 | | |
| 10.8 | | |
| 11.4 | |
Consolidated
revenues and sales | |
$ | 2,018.2 | | |
$ | 990.9 | | |
$ | 1,027.3 | | |
$ | 4,228.9 | | |
$ | 1,053.2 | | |
$ | 1,059.9 | | |
$ | 1,044.9 | | |
$ | 1,070.9 | |
| |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | |
Consolidated costs and expenses | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | |
Segment costs
and expenses | |
$ | 1,238.1 | | |
$ | 611.0 | | |
$ | 627.1 | | |
$ | 2,653.8 | | |
$ | 630.0 | | |
$ | 680.1 | | |
$ | 656.8 | | |
$ | 686.9 | |
Shared
expenses (B) | |
| 40.6 | | |
| 20.2 | | |
| 20.4 | | |
| 90.8 | | |
| 23.3 | | |
| 21.3 | | |
| 24.2 | | |
| 22.0 | |
Consolidated
costs and expenses | |
$ | 1,278.7 | | |
$ | 631.2 | | |
$ | 647.5 | | |
$ | 2,744.6 | | |
$ | 653.3 | | |
$ | 701.4 | | |
$ | 681.0 | | |
$ | 708.9 | |
| |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | |
Consolidated | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | |
Adjusted EBITDAR | |
$ | 739.5 | | |
$ | 359.7 | | |
$ | 379.8 | | |
$ | 1,484.3 | | |
$ | 399.9 | | |
$ | 358.5 | | |
$ | 363.9 | | |
$ | 362.0 | |
Adjusted EBITDAR
margin | |
| 36.6 | % | |
| 36.3 | % | |
| 37.0 | % | |
| 35.1 | % | |
| 38.0 | % | |
| 33.8 | % | |
| 34.8 | % | |
| 33.8 | % |
| (B) | Shared expenses
are not allocated to the segments and primarily consist of accounting and finance, information
technology, legal, and corporate program management activities that are centrally managed
and are not monitored by management at a segment level. |
WINDSTREAM HOLDINGS II, LLC
QUARTERLY SUPPLEMENTAL INFORMATION - OPERATING STATISTICS
for the quarterly periods in the years 2023 and 2022
(Units in thousands, Dollars in millions, except per unit amounts)
| |
2023 | | |
2022 | |
| |
Total | | |
2nd Qtr. | | |
1st Qtr. | | |
Total | | |
4th
Qtr. | | |
3rd Qtr. | | |
2nd
Qtr. | | |
1st Qtr. | |
Kinetic
Operating Metrics: | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | |
Next
Gen high-speed Internet customers | |
| 340.3 | | |
| 340.3 | | |
| 315.9 | | |
| 287.2 | | |
| 287.2 | | |
| 263.6 | | |
| 230.7 | | |
| 194.5 | |
Net
customer additions | |
| 53.1 | | |
| 24.4 | | |
| 28.7 | | |
| 124.0 | | |
| 23.6 | | |
| 32.9 | | |
| 36.2 | | |
| 31.3 | |
| |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | |
DSL high-speed
Internet customers | |
| 814.7 | | |
| 814.7 | | |
| 846.8 | | |
| 878.5 | | |
| 878.5 | | |
| 909.9 | | |
| 946.4 | | |
| 980.1 | |
Net
customer losses | |
| (63.8 | ) | |
| (32.1 | ) | |
| (31.7 | ) | |
| (121.7 | ) | |
| (31.4 | ) | |
| (36.5 | ) | |
| (33.7 | ) | |
| (20.1 | ) |
| |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | |
Total high-speed
Internet customers | |
| 1,155.0 | | |
| 1,155.0 | | |
| 1,162.7 | | |
| 1,165.7 | | |
| 1,165.7 | | |
| 1,173.5 | | |
| 1,177.1 | | |
| 1,174.6 | |
Net
customer (losses) additions | |
| (10.7 | ) | |
| (7.7 | ) | |
| (3.0 | ) | |
| 2.3 | | |
| (7.8 | ) | |
| (3.6 | ) | |
| 2.5 | | |
| 11.2 | |
| |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | |
Average revenue per high-speed
Internet customer per month | |
$ | 86.68 | | |
$ | 87.41 | | |
$ | 85.78 | | |
$ | 82.57 | | |
$ | 82.65 | | |
$ | 82.65 | | |
$ | 81.93 | | |
$ | 82.63 | |
| |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | |
Next Gen premises
passed - Consumer | |
| 1,336 | | |
| 1,336 | | |
| 1,294 | | |
| 1,237 | | |
| 1,237 | | |
| 1,174 | | |
| 1,111 | | |
| 1,012 | |
Next Gen premises
passed - Business | |
| 174 | | |
| 174 | | |
| 173 | | |
| 170 | | |
| 170 | | |
| 170 | | |
| 169 | | |
| 162 | |
| |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | |
Service Revenues Used in
Average Revenue Per Month | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | |
Computations
Above (per page 3): | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | |
High-speed
Internet bundle revenues | |
$ | 603.5 | | |
$ | 303.9 | | |
$ | 299.6 | | |
$ | 1,160.2 | | |
$ | 290.0 | | |
$ | 291.4 | | |
$ | 289.0 | | |
$ | 289.8 | |
| |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | |
Enterprise: | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | |
Strategic
sales as a percentage of total Enterprise sales (A) | |
| 68.8 | % | |
| 69.5 | % | |
| 68.0 | % | |
| 65.7 | % | |
| 64.1 | % | |
| 67.9 | % | |
| 66.1 | % | |
| 64.4 | % |
| |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | |
Total Capital Expenditures: | |
$ | 554.1 | | |
$ | 248.9 | | |
$ | 305.2 | | |
$ | 1,080.8 | | |
$ | 275.8 | | |
$ | 299.5 | | |
$ | 290.6 | | |
$ | 214.9 | |
Incremental
construction equipment capital expenditures (B) | |
| (1.4 | ) | |
| (0.6 | ) | |
| (0.8 | ) | |
| (13.6 | ) | |
| (1.8 | ) | |
| (3.1 | ) | |
| (4.0 | ) | |
| (4.7 | ) |
Reimbursement
for cost to remove equipment (C) | |
| (3.7 | ) | |
| (2.4 | ) | |
| (1.3 | ) | |
| - | | |
| - | | |
| - | | |
| - | | |
| - | |
Adjusted
Capital Expenditures | |
$ | 549.0 | | |
$ | 245.9 | | |
$ | 303.1 | | |
$ | 1,067.2 | | |
$ | 274.0 | | |
$ | 296.4 | | |
$ | 286.6 | | |
$ | 210.2 | |
| |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | |
Adjusted Capital Expenditures
by Segment: | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | |
Kinetic | |
$ | 361.3 | | |
$ | 159.1 | | |
$ | 202.2 | | |
$ | 719.8 | | |
$ | 175.3 | | |
$ | 200.9 | | |
$ | 201.8 | | |
$ | 141.8 | |
Enterprise | |
| 83.5 | | |
| 36.5 | | |
| 47.0 | | |
| 159.7 | | |
| 38.3 | | |
| 43.8 | | |
| 41.0 | | |
| 36.6 | |
Wholesale | |
| 98.9 | | |
| 47.9 | | |
| 51.0 | | |
| 174.3 | | |
| 56.6 | | |
| 48.4 | | |
| 40.1 | | |
| 29.2 | |
OfficeSuite | |
| 5.3 | | |
| 2.4 | | |
| 2.9 | | |
| 13.4 | | |
| 3.8 | | |
| 3.3 | | |
| 3.7 | | |
| 2.6 | |
Adjusted
Capital Expenditures | |
$ | 549.0 | | |
$ | 245.9 | | |
$ | 303.1 | | |
$ | 1,067.2 | | |
$ | 274.0 | | |
$ | 296.4 | | |
$ | 286.6 | | |
$ | 210.2 | |
(A) | Enterprise strategic sales consist of SASE, UCaaS, OfficeSuite UC©
and associated network access products and services. |
(B) | Consists of non-recurring capital expenditures for construction equipment to support the
Company's internal engineering and fiber construction organization. |
(C) | Reimbursement from the Federal Communications Commission ("FCC")
for the cost to remove from our network certain equipment purchased from a Chinese manufacturer that we were required to
remove by FCC order. Windstream completed the removal of this equipment in the first quarter of 2023 and we expect to receive
total reimbursements of approximately $10 million from the FCC in 2023. |
WINDSTREAM HOLDINGS II, LLC
QUARTERLY SUPPLEMENTAL INFORMATION - NON-GAAP RECONCILIATIONS
for the quarterly periods in the years 2023 and 2022
(In millions)
| |
2023 | | |
2022 | |
| |
Total | | |
2nd Qtr. | | |
1st Qtr. | | |
Total | | |
4th
Qtr. | | |
3rd Qtr. | | |
2nd
Qtr. | | |
1st Qtr. | |
ADJUSTED FREE CASH FLOW: | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| |
Operating
(loss) income | |
$ | (10.2 | ) | |
$ | (12.1 | ) | |
$ | 1.9 | | |
$ | (72.4 | ) | |
$ | 20.8 | | |
$ | (46.0 | ) | |
$ | (38.7 | ) | |
$ | (8.5 | ) |
Depreciation
and amortization | |
| 395.2 | | |
| 199.5 | | |
| 195.7 | | |
| 801.4 | | |
| 189.8 | | |
| 211.0 | | |
| 202.7 | | |
| 197.9 | |
EBITDA | |
| 385.0 | | |
| 187.4 | | |
| 197.6 | | |
| 729.0 | | |
| 210.6 | | |
| 165.0 | | |
| 164.0 | | |
| 189.4 | |
Adjustments: | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | |
Straight-line
expense under master leases with Uniti | |
| 335.9 | | |
| 168.7 | | |
| 167.2 | | |
| 657.4 | | |
| 166.0 | | |
| 164.7 | | |
| 163.7 | | |
| 163.0 | |
Cash payment
under master leases with Uniti | |
| (335.5 | ) | |
| (168.0 | ) | |
| (167.5 | ) | |
| (668.9 | ) | |
| (167.5 | ) | |
| (167.5 | ) | |
| (167.2 | ) | |
| (166.7 | ) |
Cash received
from Uniti per settlement agreement | |
| 49.0 | | |
| 24.5 | | |
| 24.5 | | |
| - | | |
| - | | |
| - | | |
| - | | |
| - | |
Net (gain)
loss on asset retirements and dispositions | |
| (5.6 | ) | |
| (5.2 | ) | |
| (0.4 | ) | |
| 51.1 | | |
| 6.4 | | |
| 17.1 | | |
| 25.4 | | |
| 2.2 | |
Other costs
(A) | |
| 21.0 | | |
| 7.2 | | |
| 13.8 | | |
| 38.8 | | |
| 14.1 | | |
| 9.6 | | |
| 9.3 | | |
| 5.8 | |
Equity-based
compensation | |
| 3.2 | | |
| 1.6 | | |
| 1.6 | | |
| 8.0 | | |
| 2.8 | | |
| 2.1 | | |
| 1.5 | | |
| 1.6 | |
Adjusted EBITDA | |
| 453.0 | | |
| 216.2 | | |
| 236.8 | | |
| 815.4 | | |
| 232.4 | | |
| 191.0 | | |
| 196.7 | | |
| 195.3 | |
Adjusted Capital
Expenditures | |
| (549.0 | ) | |
| (245.9 | ) | |
| (303.1 | ) | |
| (1,067.2 | ) | |
| (274.0 | ) | |
| (296.4 | ) | |
| (286.6 | ) | |
| (210.2 | ) |
Additional
rent paid for growth capital expenditures funded by Uniti | |
| (13.7 | ) | |
| (7.3 | ) | |
| (6.4 | ) | |
| (13.9 | ) | |
| (5.2 | ) | |
| (3.9 | ) | |
| (2.9 | ) | |
| (1.9 | ) |
Cash paid
for interest on long-term debt obligations | |
| (105.0 | ) | |
| (28.2 | ) | |
| (76.8 | ) | |
| (173.4 | ) | |
| (17.8 | ) | |
| (71.5 | ) | |
| (15.2 | ) | |
| (68.9 | ) |
Uniti funding
of growth capital expenditures | |
| 158.7 | | |
| 91.2 | | |
| 67.5 | | |
| 237.9 | | |
| 79.8 | | |
| 66.5 | | |
| 43.4 | | |
| 48.2 | |
Cash
(paid) refunded for income taxes, net | |
| (9.7 | ) | |
| (9.5 | ) | |
| (0.2 | ) | |
| (11.7 | ) | |
| (1.6 | ) | |
| (2.3 | ) | |
| (7.6 | ) | |
| (0.2 | ) |
Adjusted
Free Cash Flow | |
$ | (65.7 | ) | |
$ | 16.5 | | |
$ | (82.2 | ) | |
$ | (212.9 | ) | |
$ | 13.6 | | |
$ | (116.6 | ) | |
$ | (72.2 | ) | |
$ | (37.7 | ) |
| |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | |
COMPUTATION OF ADJUSTED EBITDA: | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | |
Operating (loss)
income | |
$ | (10.2 | ) | |
$ | (12.1 | ) | |
$ | 1.9 | | |
$ | (72.4 | ) | |
$ | 20.8 | | |
$ | (46.0 | ) | |
$ | (38.7 | ) | |
$ | (8.5 | ) |
Depreciation
and amortization expense | |
| 395.2 | | |
| 199.5 | | |
| 195.7 | | |
| 801.4 | | |
| 189.8 | | |
| 211.0 | | |
| 202.7 | | |
| 197.9 | |
Straight-line
expense under master leases with Uniti | |
| 335.9 | | |
| 168.7 | | |
| 167.2 | | |
| 657.4 | | |
| 166.0 | | |
| 164.7 | | |
| 163.7 | | |
| 163.0 | |
Net (gain)
loss on asset retirements and dispositions | |
| (5.6 | ) | |
| (5.2 | ) | |
| (0.4 | ) | |
| 51.1 | | |
| 6.4 | | |
| 17.1 | | |
| 25.4 | | |
| 2.2 | |
Other costs
(A) | |
| 21.0 | | |
| 7.2 | | |
| 13.8 | | |
| 38.8 | | |
| 14.1 | | |
| 9.6 | | |
| 9.3 | | |
| 5.8 | |
Equity-based
compensation | |
| 3.2 | | |
| 1.6 | | |
| 1.6 | | |
| 8.0 | | |
| 2.8 | | |
| 2.1 | | |
| 1.5 | | |
| 1.6 | |
Adjusted EBITDAR | |
| 739.5 | | |
| 359.7 | | |
| 379.8 | | |
| 1,484.3 | | |
| 399.9 | | |
| 358.5 | | |
| 363.9 | | |
| 362.0 | |
Cash payment
under master leases with Uniti | |
| (335.5 | ) | |
| (168.0 | ) | |
| (167.5 | ) | |
| (668.9 | ) | |
| (167.5 | ) | |
| (167.5 | ) | |
| (167.2 | ) | |
| (166.7 | ) |
Cash
received from Uniti per settlement agreement | |
| 49.0 | | |
| 24.5 | | |
| 24.5 | | |
| - | | |
| - | | |
| - | | |
| - | | |
| - | |
Adjusted
EBITDA | |
$ | 453.0 | | |
$ | 216.2 | | |
$ | 236.8 | | |
$ | 815.4 | | |
$ | 232.4 | | |
$ | 191.0 | | |
$ | 196.7 | | |
$ | 195.3 | |
| |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | |
COMPUTATION OF PRO FORMA ADJUSTED
EBITDA: | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | |
Adjusted EBITDA
(per above) | |
$ | 453.0 | | |
$ | 216.2 | | |
$ | 236.8 | | |
$ | 815.4 | | |
$ | 232.4 | | |
$ | 191.0 | | |
$ | 196.7 | | |
$ | 195.3 | |
Prepayment
from Uniti received in fourth quarter of 2021 | |
| - | | |
| - | | |
| - | | |
| 92.9 | | |
| 23.2 | | |
| 23.2 | | |
| 23.2 | | |
| 23.3 | |
Pro
forma Adjusted EBITDA (B) | |
$ | 453.0 | | |
$ | 216.2 | | |
$ | 236.8 | | |
$ | 908.3 | | |
$ | 255.6 | | |
$ | 214.2 | | |
$ | 219.9 | | |
$ | 218.6 | |
(A) Other
costs for the periods presented consist of the following: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
2023 | | |
2022 | |
| |
Total | | |
2nd Qtr. | | |
1st Qtr. | | |
Total | | |
4th
Qtr. | | |
3rd Qtr. | | |
2nd
Qtr. | | |
1st Qtr. | |
Cost
initiatives (1) | |
$ | 7.3 | | |
$ | 3.4 | | |
$ | 3.9 | | |
$ | 10.6 | | |
$ | 4.5 | | |
$ | 3.8 | | |
$ | 2.2 | | |
$ | 0.1 | |
Severance and benefit costs | |
| 13.7 | | |
| 3.8 | | |
| 9.9 | | |
| 17.6 | | |
| 9.6 | | |
| 3.2 | | |
| 2.9 | | |
| 1.9 | |
Start-up costs (2) | |
| - | | |
| - | | |
| - | | |
| 10.6 | | |
| - | | |
| 2.6 | | |
| 4.2 | | |
| 3.8 | |
Other costs | |
$ | 21.0 | | |
$ | 7.2 | | |
$ | 13.8 | | |
$ | 38.8 | | |
$ | 14.1 | | |
$ | 9.6 | | |
$ | 9.3 | | |
$ | 5.8 | |
(1) | Cost initiatives include lease termination
costs, professional and consulting fees, and other miscellaneous expenses incurred in completing
certain cost optimization projects. |
(2) | Start-up costs primarily consisted of
incremental wages, recruitment and training costs incurred in expanding the Company’s
workforce to support its internal engineering and fiber construction organization. |
(B) | Pro forma Adjusted EBITDA is Adjusted
EBITDA as if Uniti's fourth quarter 2021 prepayment of all quarterly amounts due in 2022
were made as scheduled. |
WINDSTREAM
HOLDINGS II, LLC
RECONCILIATION
OF PREVIOUSLY REPORTED TO REVISED SEGMENT INFORMATION
for
the quarter ended March 31, 2023 and the year ended December 31, 2022
(In
millions)
| |
Quarter Ended March 31, 2023 | |
| |
| | |
| | |
| | |
| | |
| | |
Total | |
| |
Kinetic | | |
Enterprise | | |
Wholesale | | |
OfficeSuite | | |
Eliminations | | |
Consolidated | |
Revenues and sales: | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | |
Total revenues and sales, as previously reported | |
$ | 563.2 | | |
$ | 384.8 | | |
$ | 112.3 | | |
$ | 5.5 | | |
$ | (38.5 | ) | |
$ | 1,027.3 | |
Intersegment activity revisions (A) | |
| (3.7 | ) | |
| - | | |
| (1.4 | ) | |
| - | | |
| 5.1 | | |
| - | |
Total revenues and sales, as revised | |
$ | 559.5 | | |
$ | 384.8 | | |
$ | 110.9 | | |
$ | 5.5 | | |
$ | (33.4 | ) | |
$ | 1,027.3 | |
| |
| | |
| | |
| | |
| | |
Shared | | |
Total | |
| |
Kinetic | | |
Enterprise | | |
Wholesale | | |
OfficeSuite | | |
Expenses | | |
Consolidated | |
Contribution margin: | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | |
Contribution margin, as previously reported | |
$ | 278.7 | | |
$ | 69.7 | | |
$ | 48.3 | | |
$ | 4.3 | | |
$ | (21.2 | ) | |
$ | 379.8 | |
Intersegment activity revisions (A) | |
| (2.3 | ) | |
| - | | |
| 2.3 | | |
| - | | |
| - | | |
| - | |
Expense realignments (B) | |
| (0.8 | ) | |
| - | | |
| - | | |
| - | | |
| 0.8 | | |
| - | |
Contribution margin, as revised | |
$ | 275.6 | | |
$ | 69.7 | | |
$ | 50.6 | | |
$ | 4.3 | | |
$ | (20.4 | ) | |
$ | 379.8 | |
| |
Year Ended December 31, 2022 | |
| |
| | |
| | |
| | |
| | |
| | |
Total | |
| |
Kinetic | | |
Enterprise | | |
Wholesale | | |
OfficeSuite | | |
Eliminations | | |
Consolidated | |
Revenues and sales: | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | |
Total revenues and sales, as previously reported | |
$ | 2,260.3 | | |
$ | 1,704.8 | | |
$ | 400.4 | | |
$ | 20.1 | | |
$ | (156.7 | ) | |
$ | 4,228.9 | |
Intersegment activity revisions (A) | |
| (14.8 | ) | |
| - | | |
| (5.8 | ) | |
| - | | |
| 20.6 | | |
| - | |
Total revenues and sales, as revised | |
$ | 2,245.5 | | |
$ | 1,704.8 | | |
$ | 394.6 | | |
$ | 20.1 | | |
$ | (136.1 | ) | |
$ | 4,228.9 | |
| |
| | |
| | |
| | |
| | |
Shared | | |
Total | |
| |
Kinetic | | |
Enterprise | | |
Wholesale | | |
OfficeSuite | | |
Expenses | | |
Consolidated | |
Contribution margin: | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | |
Contribution margin, as previously reported | |
$ | 1,092.6 | | |
$ | 323.7 | | |
$ | 145.8 | | |
$ | 14.5 | | |
$ | (92.3 | ) | |
$ | 1,484.3 | |
Intersegment activity revisions (A) | |
| (9.0 | ) | |
| - | | |
| 9.0 | | |
| - | | |
| - | | |
| - | |
Expense realignments (B) | |
| (1.5 | ) | |
| - | | |
| - | | |
| - | | |
| 1.5 | | |
| - | |
Contribution margin, as revised | |
$ | 1,082.1 | | |
$ | 323.7 | | |
$ | 154.8 | | |
$ | 14.5 | | |
$ | (90.8 | ) | |
$ | 1,484.3 | |
| (A) | Reflects updates to intercompany billing
agreements between Kinetic and Wholesale completed in the second quarter of 2023. |
| (B) | Reflects updates to cost and expense
assignments completed in the second quarter of 2023. |
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