Completes strategic transaction with Everstream
- Revenue of $ 268.2 million for the second quarter
- Net earnings of $ 0.20 per diluted common share for the second quarter; $ 3.26 per diluted common share increase over the second quarter of last year
- AFFO per diluted common share of $ 0.41 for the second quarter
- Adjusted EBITDA and AFFO increased 6% and 10%, respectively, in the second quarter of the prior year
- Updates 2021 Outlook
LITTLE ROCK, Ark., Aug 5, 2021 (GLOBE NEWSWIRE) – Uniti Group Inc. (“Uniti” or the “Company”) (Nasdaq: UNIT) today announced its second quarter 2021 results.
“Uniti delivered another strong quarter of results, including consolidated bookings in the quarter of approximately $ 1.0 million in monthly recurring revenue, an increase of over 80% over consolidated bookings in the first quarter of 2021 and an industry leading monthly churn of Corresponds to 0.2%. Demand for our fiber optic infrastructure remains very strong and is being fueled by the continued virtualization of our society, ”said Kenny Gunderman, President and Chief Executive Officer.
Mr. Gunderman continued, “Given the tailwind we're seeing for more investments our customers need to enable 5G networks, fiber to the home and better cloud-based connectivity, we expect these to be strong Demand trends will continue for the foreseeable future. "
QUARTERLY RESULTS
Consolidated revenue for the second quarter of 2021 was $ 268.2 million. Net income and Adjusted EBITDA were $ 49.6 million and $ 215.7 million, respectively, for the same period. Net income attributable to common stock for the period was $ 48.6 million and included a gain of $ 28.1 million on the northeast sale of Uniti Fiber and certain dark fiber contracts related to the Everstream Transaction and $ 0.4 million in transaction-related and other costs. Adjusted Funds From Operations ("AFFO") attributable to common stockholders was $ 103.2 million, or $ 0.41 per diluted common share, an increase of 10% compared to the second quarter of 2020.
Uniti Fiber contributed $ 72.1 million to revenue and $ 29.4 million to adjusted EBITDA in the second quarter of 2021, and achieved an adjusted EBITDA margin of approximately 40.8% compared to 36.1% in the second quarter of 2020 Uniti Fiber's Net Success-Based Equity Spending for the quarter was $ 37.4 million.
Uniti Leasing contributed revenue of $ 196.1 million and Adjusted EBITDA of $ 192.1 million for the second quarter, up 6% and 5%, respectively, compared to the second quarter of 2020. Uniti Leasing invested $ 50.0 million in the quarter primarily related to the construction of over 1,500 new miles of valuable fiber infrastructure.
INVESTMENT TRANSACTION
On June 1, 2021, Uniti announced that it had completed its aforementioned strategic transaction with Everstream Solutions LLC (“Everstream”). As part of the transaction, which was originally announced on November 9, 2020, Uniti entered into two 20-year IRU agreements with Everstream for Uniti's proprietary fiber optics. In addition, Uniti sold to Everstream a portion of the Northeast operations of Uniti Fiber and certain dark fiber IRU customer contracts acquired under the Windstream agreement.
The total cash payment to Uniti, including upfront IRU payments, was approximately $ 135 million. In addition to the upfront revenue, Uniti will receive fees from Everstream of approximately $ 3 million per year for the first 20 year term of the IRU leases, subject to an annual increase of 2%.
LIQUIDITY
At the end of the quarter, the company had approximately $ 574 million in unconstrained cash and cash equivalents and undrawn borrowing under its revolving loan agreement. The company's leverage ratio at the end of the quarter was 5.65x based on net debt to annualized adjusted EBITDA.
On August 3, 2021, the company's board of directors declared a quarterly cash dividend of $ 0.15 per common share payable on October 1, 2021 to shareholders of record on September 17, 2021.
OUTLOOK UPDATED FOR WHOLE 2021
The company is updating its outlook for 2021 primarily to reflect the impact of income from the sale of operations and income tax expense related to the Everstream Transaction, the impact of transactional and other costs incurred to date, and revised estimates of interest expense. Our outlook excludes future acquisitions, capital market transactions as well as future transaction-related and other costs not mentioned here.
The company's consolidated outlook for 2021 is as follows (in millions):
| Full year 2021 | Growth rate in the middle compared to Previous year(1) |
|||||||
| revenue | $ | 1,083 | to | $ | 1,094 | 2% | ||
| Net income attributable to ordinary shareholders (2) | 123 | to | 135 | |||||
| Adjusted EBITDA (3) | 846 | to | 858 | 4% | ||||
| Interest expense, net (4) | 441 | to | 441 | |||||
| Attributable to ordinary shareholders: | ||||||||
| FFO (3) | 331 | to | 343 | |||||
| AFFO (3) | 408 | to | 420 | 6% | ||||
| Weighted average of common shares outstanding – diluted | 263 | to | 263 | |||||
| ________________________ | ||||||||
| 1. Represents the growth rate at the middle of the outlook for the full year 2021 compared to the actual figures for the full year 2020. 2. Includes a gain of $ 28 million related to the Everstream transaction. 3. See "Non-GAAP Financial Measures" below. 4. See "Components of Interest Expenses" below. |
||||||||
CONFERENCE CALL
Uniti will host a conference call today at 4:15 p.m. Eastern Time (3:15 p.m. Central Time) to discuss this earnings release. The conference call dial-in number is (844) 513-7153 (or (508) 637-5603 for international callers) and the conference ID is 6138328. The conference call will be webcast live and available 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 starting around 8:00 p.m. Eastern time today. To access the 14 day phone recording, please dial (855) 859-2056 and enter the conference ID number 6138328.
ABOUT UNIT
Uniti, an internally managed real estate investment trust, is a leader in the acquisition and construction of mission-critical communications infrastructures and a leading provider of fiber optic and other wireless solutions for the communications industry. As of June 30, 2021, Uniti owns approximately 123,000 fiber route miles, 7.1 million fiber strands, and other communications properties in the United States. For more information about Uniti, please visit www.uniti.com.
FORWARDING STATEMENTS
Certain statements in this press release and on today's conference call may constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, as amended. These forward-looking statements include all statements that are not statements of historical fact including, but not limited to, our 2021 financial outlook, expectations of strong demand trends, our business strategies, growth prospects, industry trends, sales opportunities, and operational and financial performance.
Words like "expect", "expect," "intend," "guess," "predictable," "plan," "believe," "," may "," will "," would "," could "," should "," seek "and similar expressions or the negative of these terms are intended to identify such forward-looking statements, which are based on management's current expectations and beliefs and are subject to a number of risks and uncertainties that could cause actual results to differ materially from projected, projected or expected results. Although we believe that the assumptions underlying any forward-looking statements are reasonable, we cannot guarantee that our expectations will be met. Factors that could materially change our expectations include the future prospects of Windstream, our largest customer, the ability and willingness of our customers to meet their commitments n to fulfill and / or fulfill all contractual agreements concluded with us, including master leasing agreements; the ability of our customers to comply with laws, rules and regulations in the operation of the assets we rent out; the ability and willingness of our clients to extend their lease agreements with us upon expiry and the ability to reposition our properties on equal or better terms in the event of non-renewal or in the event of an existing tenant replacing; the adverse effects of litigation affecting us or our customers; our ability to renew, extend or enter into contracts with major customers (including customers of the companies we have acquired); the availability and our ability to identify suitable acquisition opportunities and our ability to acquire and lease the relevant properties on favorable terms; the risk that we may not take full advantage of the potential benefits of acquisitions or have difficulty integrating companies we have acquired; our ability to generate sufficient cash flows to service our outstanding debt and fund our capital financing obligations; our ability to access debt and equity markets; the impact on our business or the business of our customers due to credit downgrades and fluctuating interest rates; our ability to keep our staff in key positions; our ability to qualify or maintain our status as a Real Estate Investment Trust (“REIT”); Changes in US tax law and other state, state, or local laws, whether or not REITs; Covenants in our debt agreements that can limit our operational flexibility; our expectations about the impact of the COVID-19 pandemic on our results of operations and financial condition; other risks inherent in the communications industry and ownership of communications distribution systems, including potential environmental liability and real estate investment illiquidity; and additional factors described in our filings with the SEC.
Uniti expressly disclaims any obligation to publicly release any updates or revisions to any forward-looking statements contained in this press release and today's conference call to reflect changes in your expectations or changes in the events, conditions, or circumstances on which any statement is based.
NON-GAAP PRESENTATION
This press release and today's conference call contain certain supplementary performance measures that are not required by or presented in accordance with United States generally accepted accounting principles (“GAAP”). Such measures should not be viewed as alternatives to GAAP. You can find more information about and comparison of these metrics with the closest GAAP metric here.
Uniti Group Inc.
Consolidated balance sheets
(in thousands, except data per share)
| June 30th 2021 |
December 31, 2020 |
|||||||
| Financial assets: | ||||||||
| Property, plant and equipment, net | $ | 3,400,755 | $ | 3,273,353 | ||||
| Cash and cash equivalents | 108,536 | 77,534 | ||||||
| Accounts receivable, net | 42,986 | 62,952 | ||||||
| goodwill | 601,878 | 601,878 | ||||||
| Intangible assets, net | 379,524 | 390.725 | ||||||
| Linear wagering requirement | 26,278 | 13,107 | ||||||
| Other assets, net | 115.730 | 152.883 | ||||||
| Participation in non-consolidated companies | 65,038 | 66,043 | ||||||
| Deferred tax assets, net | 4,649 | – | ||||||
| Assets held for sale | – | 93,343 | ||||||
| Total assets | $ | 4,745,374 | $ | 4,731,818 | ||||
| Liabilities and Shareholder Deficit | ||||||||
| Liabilities: | ||||||||
| Trade payables, provisions and other liabilities, net | $ | 136,577 | $ | 146.144 | ||||
| Payment due | 378.718 | 418,840 | ||||||
| Intangible liabilities, net | 183.133 | 187.886 | ||||||
| Pay accrued interest | 105,922 | 95,338 | ||||||
| Deferred sales | 1,122,445 | 995.123 | ||||||
| Derivative liability, net | 16,786 | 22,897 | ||||||
| Dividends | 36,326 | 36,725 | ||||||
| Deferred income tax liabilities, net | – | 10,540 | ||||||
| Finance lease obligations | 14,497 | 15,468 | ||||||
| Contingent consideration | – | 2,957 | ||||||
| Notes and other debts, net | 4,884,410 | 4,816,524 | ||||||
| Liabilities held for sale | – | 55,752 | ||||||
| Total liabilities | 6,878,814 | 6,804,194 | ||||||
| Obligations and contingencies | ||||||||
| Shareholder deficit: | ||||||||
| Preferred shares, face value $ 0.0001, 50,000 authorized shares, no shares issued and outstanding | – | – | ||||||
| Common stock, $ 0.0001 face value, 500,000 authorized shares, issued and in circulation: 231,805 shares as of June 30, 2021 and 231,262 shares as of December 31, 2020 |
23 | 23 | ||||||
| Capital reserve | 1,153,707 | 1,209,141 | ||||||
| Cumulative other total damage | (14,792) | (20,367) | ||||||
| Distributions based on the accumulated profit | (3,341,371) | (3,330,455) | ||||||
| Uniti Shareholders Total Deficit | (2,202,433) | (2,141,658) | ||||||
| Non-controlling interests – operating partnerships and non-voting convertible preferred shares | 68.993 | 69,282 | ||||||
| Total deficit of shareholders | (2,133,440) | (2,072,376) | ||||||
| Total liabilities and shareholder deficit | $ | 4,745,374 | $ | 4,731,818 | ||||
Uniti Group Inc.
Consolidated income statement
(in thousands, except data per share)
| Three months to June 30th | Six months to June 30th | ||||||||||||||
| 2021 | 2020 | 2021 | 2020 | ||||||||||||
| Revenues: | |||||||||||||||
| leasing | $ | 196.057 | $ | 185,320 | $ | 390.993 | $ | 369,672 | |||||||
| Fiber optic infrastructure | 72.123 | 79.140 | 149.773 | 156,547 | |||||||||||
| Towers | – | 2,392 | – | 6.112 | |||||||||||
| Consumer CLEC | – | (32) | – | 651 | |||||||||||
| Total sales | 268.180 | 266,820 | 540,766 | 532,982 | |||||||||||
| Costs and expenses: | |||||||||||||||
| Interest expense, net | 106,388 | 107.243 | 246,969 | 285,636 | |||||||||||
| Depreciation | 69,671 | 84,969 | 140,635 | 171.090 | |||||||||||
| General and administrative costs | 24,900 | 27,894 | 50,723 | 55,027 | |||||||||||
| Operating expenses (without depreciation) | 33.185 | 40.167 | 71,269 | 80,477 | |||||||||||
| Billing expenses | – | 650,000 | – | 650,000 | |||||||||||
| Transaction-related and other costs | 424 | 18,556 | 4,561 | 34,528 | |||||||||||
| Profit on the sale of real estate | (442) | (63,818) | (442) | (63,818) | |||||||||||
| Profit from the sale of a company | (28,143) | – | (28,143) | – | |||||||||||
| Other (income) expenses | 8,021 | 6,013 | 8,475 | 9,088 | |||||||||||
| Total costs and expenses | 214.004 | 871.024 | 494.047 | 1,222,028 | |||||||||||
| Profit (loss) before income taxes and equity in earnings from unconsolidated companies | 54.176 | (604,204) | 46,719 | (689,046) | |||||||||||
| Income tax expense (benefit) | 5,084 | (5,875) | 2,527 | (10,451) | |||||||||||
| Equity (earnings) of unconsolidated companies | (547) | – | (945) | – | |||||||||||
| Net income (loss) | 49,639 | (598,329) | 45.137 | (678,595) | |||||||||||
| Net income (loss) attributable to non-controlling interests | 732 | (10,585) | 668 | (11,998) | |||||||||||
| Net profit (loss) attributable to shareholders | 48.907 | (587,744) | 44,469 | (666,597) | |||||||||||
| Profit Share of the Participating Securities | (333) | (424) | (581) | (624) | |||||||||||
| Reported dividends on convertible preferred stock | (2) | (1) | (5) | (4) | |||||||||||
| Net profit (loss) attributable to ordinary shareholders | $ | 48,572 | $ | (588,169) | $ | 43,883 | $ | (667,225) | |||||||
| Net profit (loss) attributable to common stockholders – base | $ | 48,572 | $ | (588,169) | $ | 43,883 | $ | (667,225) | |||||||
| Effects of If-Converted Securities | 2,974 | – | – | – | |||||||||||
| Net Income (Loss) attributable to common stockholders – diluted | $ | 51,546 | $ | (588,169) | $ | 43,883 | $ | (667,225) | |||||||
| Weighted average of common shares outstanding: | |||||||||||||||
| basic | 231,801 | 192.479 | 231,636 | 192.358 | |||||||||||
| Diluted | 262.268 | 192.479 | 231,862 | 192.358 | |||||||||||
| Earnings (loss) per common share: | |||||||||||||||
| basic | $ | 0.21 | $ | (3.06) | $ | 0.19 | $ | (3.47) | |||||||
| Diluted | $ | 0.20 | $ | (3.06) | $ | 0.19 | $ | (3.47) | |||||||
Uniti Group Inc.
Consolidated cash flow statement
(In thousands)
|
Six months to June 30th |
||||||||
| 2021 | 2020 | |||||||
| Cash generated from operations: | ||||||||
| Net income (loss) | $ | 45.137 | $ | (678,595) | ||||
| Adjustments to match the net loss to the net liquidity of operational activities: |
||||||||
| Depreciation | 140,635 | 171.090 | ||||||
| Amortization of deferred financing costs and debt discount | 9,371 | 18,666 | ||||||
| Loss on debt settlement | 43,369 | 73,952 | ||||||
| Interest rate swap termination | 5,658 | 4,496 | ||||||
| Deferred income taxes | 605 | (11,209) | ||||||
| Equity in the result of unconsolidated companies | (945) | – | ||||||
| Distributions of the cumulative results from unconsolidated companies | 1,950 | – | ||||||
| Cash payment for the interest rate swap | (6,110) | (2,251) | ||||||
| Linear turnover | (14,215) | 711 | ||||||
| Share-based payment | 6,797 | 7.105 | ||||||
| Change in the fair value of the contingent consideration | 21 | 6.140 | ||||||
| Profit on the sale of real estate | (442) | (63,818) | ||||||
| Profit from the sale of a company | (28,143) | – | ||||||
| (Profit) loss from the disposal of assets | (218) | 672 | ||||||
| Creation of the billing obligation | 8,889 | – | ||||||
| Others | 143 | (195) | ||||||
| Changes in assets and liabilities, less acquisitions: | ||||||||
| Accounts obtainable | 19,965 | 6.263 | ||||||
| Other assets | 39,019 | (8,285) | ||||||
| Trade payables, provisions and other liabilities | 46.991 | 51,539 | ||||||
| Payment due | – | 650,000 | ||||||
| Cash generated from operations | 318,477 | 226.281 | ||||||
| Cash flows from investing activities: | ||||||||
| Other investments | (177,934) | (134,035) | ||||||
| Proceeds from property sales, net of cash | 1,034 | 225.149 | ||||||
| Income from the sale of a company | 62.113 | – | ||||||
| Proceeds from the sale of other equipment | 399 | – | ||||||
| Net cash (used in) from investing activities | (114,388) | 91.114 | ||||||
| Cash flows from financing activities: | ||||||||
| Debt settlement | (1,660,000) | (2,044,728) | ||||||
| Proceeds from issuing notes | 1,680,000 | 2,250,000 | ||||||
| Dividends paid out | (70,386) | (71,645) | ||||||
| Payment of the compensation obligation | (49,011) | – | ||||||
| Contingent Consideration Payments | (2,979) | (7,086) | ||||||
| Distributions to non-controlling interests | (1,039) | (1,282) | ||||||
| Borrowing under a revolving credit facility | 205,000 | 10,000 | ||||||
| Revolving Credit Facility Payments | (220,000) | (456,700) | ||||||
| Finance lease payments | (1,393) | (1,979) | ||||||
| Payments for financing costs | (25,156) | (47,775) | ||||||
| Prepayment costs | (25,800) | – | ||||||
| Share purchase program for employees | 319 | 306 | ||||||
| Payments related to withholding tax for stock-based compensation | (2,642) | (1,050) | ||||||
| Cash outflow from financing activities | (173,087) | (371,939) | ||||||
| Net increase (decrease) in cash and cash equivalents | 31,002 | (54,544) | ||||||
| Cash and cash equivalents at the beginning of the period | 77,534 | 142,813 | ||||||
| Cash and cash equivalents at the end of the period | 108,536 | $ | 88,269 | |||||
Uniti Group Inc.
Reconciliation of net profit to FFO and AFFO
(in thousands, except data per share)
| Three months to June 30th | Six months to June 30th | |||||||||||||||
| 2021 | 2020 | 2021 | 2020 | |||||||||||||
| Net profit (loss) attributable to ordinary shareholders | $ | 48,572 | $ | (588,169) | $ | 43,883 | $ | (667,225) | ||||||||
| Depreciation and amortization of real estate | 52,178 | 62.107 | 105,555 | 126.059 | ||||||||||||
| Profit from the sale of real estate assets, after tax | (442) | (63,818) | (442) | (63,818) | ||||||||||||
| Profit Share of the Participating Securities | 333 | 424 | 581 | 624 | ||||||||||||
| Share of participating securities in FFO | (681) | (406) | (1,025) | (606) | ||||||||||||
| Adjustments for non-consolidated units | 614 | – | 1,230 | – | ||||||||||||
| Adjustments for non-controlling interests | (771) | 30th | (1,567) | (1,102) | ||||||||||||
| FFO attributable to ordinary shareholders | 99,803 | (589,832) | 148.215 | (606,068) | ||||||||||||
| Transaction-related and other costs | 424 | 18,556 | 4,561 | 34,528 | ||||||||||||
| Change in the fair value of the contingent consideration | – | 4,645 | 21 | 6.140 | ||||||||||||
| Amortization of accrued financing costs and debts | 4,412 | 8,958 | 9,371 | 18,666 | ||||||||||||
| Write off accrued finance charges and debt rebates | 2,413 | – | 22,828 | 73,952 | ||||||||||||
| Share-based payment | 3,462 | 4.110 | 6,797 | 7.105 | ||||||||||||
| Profit from the sale of a company | (28,143) | – | (28,143) | – | ||||||||||||
| Depreciation and amortization excluding real estate | 17,493 | 22,862 | 35,080 | 45,031 | ||||||||||||
| Billing expenses | – | 650,000 | – | 650,000 | ||||||||||||
| Prepayment costs | 10,935 | – | 28,485 | – | ||||||||||||
| Linear turnover | (7,309) | 602 | (14,215) | 711 | ||||||||||||
| Maintenance investment | (2,408) | (2,253) | (4,384) | (3,361) | ||||||||||||
| Other, net | 1.961 | (11,356) | (2,009) | (21,810) | ||||||||||||
| Adjustments for non-consolidated units | 258 | – | 614 | – | ||||||||||||
| Adjustments for non-controlling interests | (52) | (12,317) | (870) | (14,339) | ||||||||||||
| Adjusted FFO attributable to common shareholders | $ | 103,249 | $ | 93,975 | $ | 206.351 | $ | 190,555 | ||||||||
| Adjustment of diluted FFO and AFFO: | ||||||||||||||||
| FFO – Basic attributable to ordinary shareholders | $ | 99,803 | $ | (589,832) | $ | 148.215 | $ | (606,068) | ||||||||
| Effect of if-converted dilutive securities | 2,979 | – | 5,953 | – | ||||||||||||
| FFO attributable to ordinary shareholders – diluted | $ | 102,782 | $ | (589,832) | $ | 154.168 | $ | (606,068) | ||||||||
| AFFO – Basic attributable to the ordinary shareholders | $ | 103,249 | $ | 93,975 | $ | 206.351 | $ | 190,555 | ||||||||
| Effect of if-converted dilutive securities | 3,450 | 3,450 | 6,900 | 6,900 | ||||||||||||
| AFFO attributable to ordinary shareholders – diluted | $ | 106,699 | $ | 97,425 | $ | 213.251 | $ | 197,455 | ||||||||
| Weighted average of the ordinary shares for the calculation of the basic earnings (loss) per ordinary share (1) | 231,801 | 192.479 | 231,636 | 192.358 | ||||||||||||
| Effect of Diluting Non-Participating Securities | 135 | – | 226 | – | ||||||||||||
| Effect of if-converted dilutive securities | 30,332 | 29,198 | 30,332 | 29,198 | ||||||||||||
| Weighted average of common shares used to calculate diluted FFO and AFFO per common share (1) | 262.268 | 221,677 | 262.194 | 221,556 | ||||||||||||
| Per diluted common share: | ||||||||||||||||
| EPS | $ | 0.20 | $ | (3.06) | $ | 0.19 | $ | (3.47) | ||||||||
| FFO | $ | 0.39 | $ | (3.06) | $ | 0.59 | $ | (3.15) | ||||||||
| AFFO | $ | 0.41 | $ | 0.44 | $ | 0.81 | $ | 0.89 | ||||||||
________________________
- For periods when FFO or AFFO attributable to ordinary shareholders is a loss, the weighted average of ordinary shares used to calculate diluted FFO or AFFO per ordinary share is the weighted average of ordinary shares used to calculate basic earnings (loss) is used per share.
Uniti Group Inc.
Reconciliation of EBITDA and adjusted EBITDA
(In thousands)
| Three months ended June 30th |
Six months ended June 30th |
|||||||||||||||
| 2021 | 2020 | 2021 | 2020 | |||||||||||||
| Net income (loss) | $ | 49,639 | $ | (598,329) | $ | 45.137 | $ | (678,595) | ||||||||
| Depreciation | 69,671 | 84,969 | 140,635 | 171.090 | ||||||||||||
| Interest expense, net | 106,388 | 107.243 | 246,969 | 285,636 | ||||||||||||
| Income tax expense (benefit) | 5,084 | (5,875) | 2,527 | (10,451) | ||||||||||||
| EBITDA | 230.782 | (411,992) | 435.268 | (232,320) | ||||||||||||
| Share-based payment | 3,462 | 4.110 | 6,797 | 7.105 | ||||||||||||
| Transaction-related and other costs | 424 | 18,556 | 4,561 | 34,528 | ||||||||||||
| Billing expenses | – | 650,000 | – | 650,000 | ||||||||||||
| Profit on the sale of real estate | (442) | (63,818) | (442) | (63,818) | ||||||||||||
| Profit from the sale of a company | (28,143) | – | (28,143) | – | ||||||||||||
| Adjustments for non-consolidated units | 872 | – | 1,844 | – | ||||||||||||
| Other (income) expenses | 8,779 | 6,013 | 10.097 | 9,088 | ||||||||||||
| Adjusted EBITDA | $ | 215.734 | $ | 202,869 | $ | 429,982 | $ | 404 583 | ||||||||
| Adjusted EBITDA: | ||||||||||||||||
| leasing | $ | 192.137 | $ | 182.810 | $ | 383,634 | $ | 364,689 | ||||||||
| Fiber optic infrastructure | 29,439 | 28,493 | 59,160 | 56.034 | ||||||||||||
| Towers | – | 85 | – | 77 | ||||||||||||
| Consumer CLEC | – | (292) | – | (275) | ||||||||||||
| company | (5,842) | (8,227) | (12,812) | (15,942) | ||||||||||||
| $ | 215.734 | $ | 202,869 | $ | 429,982 | $ | 404 583 | |||||||||
| Annualized Adjusted EBITDA (1) | $ | 862.936 | ||||||||||||||
| As of June 30, 2021: | ||||||||||||||||
| Total debt (2) | $ | 4,984,497 | ||||||||||||||
| Cash and cash equivalents | 108,536 | |||||||||||||||
| Net debt | $ | 4,875,961 | ||||||||||||||
| Net debt / annualized adjusted EBITDA | 5.65x | |||||||||||||||
________________________
- Calculated as adjusted EBITDA for the most recently reported three-month period, multiplied by four. The annualized adjusted EBITDA was not prepared on a pro forma basis in accordance with Article 11 of Regulation S-X.
- Includes $ 14.5 million finance lease but excludes $ 85.6 million in unamortized cash discounts and deferred finance charges.
Uniti Group Inc.
Projected future results (1)
(in millions)
| end of year December 31, 2021 |
|||
| Net Income Attributable to Ordinary Shareholders – Basic | $ 123 to $ 135 | ||
| Non-controlling interest in the result | 2 | ||
| Profit Share of the Participating Securities | 1 | ||
| Net income (2) | 126 to 138 | ||
| Interest expense, net (3) | 441 | ||
| Depreciation | 278 | ||
| Income tax benefit | (2) | ||
| EBITDA (2) | 843 to 855 | ||
| Share-based payment | fifteen | ||
| Profit from company sale (4) | (28) | ||
| Transaction-related and other costs (5) | 13th | ||
| Adjustment for non-consolidated companies | 3 | ||
| Adjusted EBITDA (2) | $ 846 to $ 858 | ||
________________________
- These ranges represent management's best estimates based on the underlying assumptions as of the date of this press release. Our forecasts exclude future acquisitions, capital market transactions, changes in market conditions and other factors. There can be no assurance that our actual results will not differ materially from the estimates set out above.
- The components of the forecast future results may not add up due to rounding.
- See “Components of Interest Expense” below.
- Represents the gain on the sale of a portion of our Northeast operations and certain Dark Fiber IRU contracts acquired under the Windstream Agreement.
- Future transaction-related and other costs are not included in our current outlook.
Uniti Group Inc.
Projected future results (1)
(Per diluted share)
| end of year December 31, 2021 |
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| Net Income Attributable to Ordinary Shareholders – Basic | $ 0.53 to $ 0.58 | ||
| Depreciation and amortization of real estate | 0.90 | ||
| Profit-Sharing Securities | – | ||
| Participating share in the FFO | – | ||
| Adjustments for non-controlling interests | (0.01) | ||
| Adjustments for non-consolidated units | 0.01 | ||
| FFO – Basic attributable to ordinary shareholders (2) | $ 1.43 to $ 1.48 | ||
| Effects of If-Converted Securities | (0.13) | ||
| FFO attributable to ordinary shareholders – diluted (2) | $ 1.31 to $ 1.35 | ||
| FFO – Basic attributable to ordinary shareholders (2) | $ 1.43 to $ 1.48 | ||
| Transaction-related and other costs (3) | 0.02 | ||
| Amortization of deferred financing costs and discount (4) | 0.18 | ||
| Debt prepayment costs (5) | 0.12 | ||
| Increase in compensation payment (6) | 0.07 | ||
| Share-based payment | 0.06 | ||
| Profit from company sale (7) | (0.12) | ||
| Depreciation and amortization excluding real estate | 0.30 | ||
| Linear turnover | (0.13) | ||
| Maintenance investment | (0.03) | ||
| Other, net | (0.14) | ||
| Adjustments for non-controlling interests | – | ||
| AFFO – Basic attributable to the ordinary shareholders (2) | $ 1.76 to $ 1.81 | ||
| Effects of If-Converted Securities | (0.16) | ||
| AFFO attributable to ordinary shareholders – diluted (2) | $ 1.61 to $ 1.65 | ||
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- These ranges represent management's best estimates based on the underlying assumptions as of the date of this press release. Our forecasts exclude future acquisitions, capital market transactions, changes in market conditions and other factors. There can be no assurance that our actual results will not differ materially from the estimates set out above.
- The components of the forecast future results may not add up to the FFO and AFFO attributable to the common stockholders due to rounding.
- Future transaction-related and other costs are not included in our current outlook.
- Includes the depreciation of approx. 23 million
- Represents the premium paid and the associated costs in connection with the early redemption of our 8.25% Senior Notes due 2023 and our 6.00% Senior Notes due 2023.
- Represents the increase in Windstream severance payable to its stated value. On the day the settlement came into effect, we recognized the liability at its original fair value, which is accrued on the basis of an effective interest rate of 4.7% and reduced by the scheduled quarterly payments.
- Represents the gain on the sale of a portion of our Northeast operations and certain Dark Fiber IRU contracts acquired under the Windstream Agreement.
Components of interest expense (1)
(in millions)
| end of year December 31, 2021 |
||||
| Interest expense on bonds | $ | 353 | ||
| Capitalized Interest | (2) | |||
| Crediting of the due Windstream remuneration | 17th | |||
| Amortization of deferred financing costs and discounts (2) | 41 | |||
| Early debt repayment premium (3) | 21 | |||
| Swap Termination (4) | 11 | |||
| Interest expense, net (5) | $ | 441 | ||
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- These ranges represent management's best estimates based on the underlying assumptions as of the date of this press release. Our forecasts exclude future acquisitions, capital market transactions, changes in market conditions and other factors. There can be no assurance that our actual results will not differ materially from the estimates set out above.
- Includes the depreciation of approximately $ 23 million
- Represents the premium paid on the early redemption of our 8.25% Senior Notes due 2023 and our 6.00% Senior Notes due 2023.
- Represents the recognition of deferred interest expenses that are attributable to the discontinuation of hedge accounting for interest rate swaps.
- The components of the interest expense may not add up to the total due to rounding.
NON-GAAP FINANCIAL MEASURES
In our analysis of our operating results, 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”). that are not required by or presented in accordance with United States generally accepted accounting principles (“GAAP”). While we believe that GAAP net income is the most appropriate earnings metric, we also believe that EBITDA, Adjusted EBITDA, FFO, and AFFO are important non-GAAP additional measures of a REIT's operating performance.
We define “EBITDA” as GAAP net income before interest expense, provision for income taxes, depreciation and amortization. We define "adjusted EBITDA" as EBITDA before share-based compensation expenses and the possibly recurring effects of transaction and integration costs, costs in connection with the bankruptcy of Windstream, costs in connection with legal disputes brought against us and costs associated with the introduction of our new merchandise management system, In summary, "transaction-related and other costs", costs in connection with the settlement with Windstream, impairment of goodwill, amortization of non-cash usage rights, depreciation of unamortized accrued financing costs, costs that have arisen from the early repayment of debts, including early tender premiums and costs in connection with the termination of relevant hedging activities, capital gains or losses, changes in the fair value of contingent consideration and financial instruments and the like or rare items. Adjusted EBITDA includes adjustments to reflect the company's share of the adjusted EBITDA of unconsolidated companies. We believe that EBITDA and Adjusted EBITDA are important complementary metrics to net income as they provide additional information to evaluate our operational performance on a no-fault basis. In addition, adjusted EBITDA is calculated in a manner similar to that defined in our agreements on material liabilities, which are used to determine compliance with certain financial metrics. Because EBITDA and Adjusted EBITDA are not GAAP measures, they should not be viewed as alternatives to GAAP net income.
Since the manufacturing cost accounting method used for real estate assets requires the recording of depreciation expenses, with the exception of land, such accounting means that the value of the real estate assets will decline predictably over time. However, since real estate values have historically risen or fallen with market and other conditions, presentations of operating results for a REIT that use historical cost accounting for depreciation could be less informative. Thus, NAREIT created FFO as a supplemental measure of operating performance for REITs that excludes historical cost depreciation and amortization, among other items, from net income, as defined by GAAP. FFO is defined by NAREIT as net income attributable to common shareholders computed in accordance with GAAP, excluding gains or losses from real estate dispositions, plus real estate depreciation and amortization and impairment charges, and includes adjustments to reflect the Company’s share of FFO from unconsolidated entities. We compute FFO in accordance with NAREIT’s definition.
The Company defines AFFO, as FFO excluding (i) Transaction Related and Other Costs; (ii) costs related to the litigation settlement with Windstream, and accretion on our settlement obligation as these items are not reflective of ongoing operating performance; (iii) goodwill impairment charges; (iv) certain non-cash revenues and expenses such as stock-based compensation expense, amortization of debt and equity discounts, amortization of deferred financing costs, depreciation and amortization of non-real estate assets, amortization of non-cash rights-of-use, straight line revenues, non-cash income taxes, and the amortization of other non-cash revenues to the extent that cash has not been received, such as revenue associated with the amortization of tenant capital improvements; and (v) the impact, which may be recurring in nature, of the write-off of unamortized deferred financing fees, additional costs incurred as a result of early repayment of debt, including early tender premiums and costs associated with the termination of related hedging activities, taxes associated with tax basis cancellation of debt, gains or losses on dispositions, changes in the fair value of contingent consideration and financial instruments and similar or infrequent items less maintenance capital expenditures. AFFO includes adjustments to reflect the Company’s share of AFFO from unconsolidated entities. We believe that the use of FFO and AFFO, and their respective per share amounts, combined with the required GAAP presentations, improves the understanding of operating results of REITs among investors and analysts, and makes comparisons of operating results among such companies more meaningful. We consider FFO and AFFO to be useful measures for reviewing comparative operating performance. In particular, we believe AFFO, by excluding certain revenue and expense items, can help investors compare our operating performance between periods and to other REITs on a consistent basis without having to account for differences caused by unanticipated items and events, such as transaction and integration related costs. The Company uses FFO and AFFO, and their respective per share amounts, only as performance measures, and FFO and AFFO do not purport to be indicative of cash available to fund our future cash requirements. While FFO and AFFO are relevant and widely used measures of operating performance of REITs, they do not represent cash flows from operations or net income as defined by GAAP and should not be considered an alternative to those measures in evaluating our liquidity or operating performance.
Further, our computations of EBITDA, Adjusted EBITDA, FFO and AFFO may not be comparable to that reported by other REITs or companies that do not define FFO in accordance with the current NAREIT definition or that interpret the current NAREIT definition or define EBITDA, Adjusted EBITDA and AFFO differently than we do.
INVESTOR AND MEDIA CONTACTS:
Bill DiTullio, 501-850-0872
Vice President, Finance and Investor Relations
[email protected]