Business Wire | Feb 25, 2021 08:00AM EST

Consolidated Communications Reports Fourth Quarter and Full Year 2020 Results

Feb. 25, 2021

MATTOON, Ill.--(BUSINESS WIRE)--Feb. 25, 2021--Consolidated Communications Holdings, Inc. (Nasdaq: CNSL) (the "Company" or "Consolidated") reported results for the fourth quarter and full-year 2020.

"We finished the year with strong performance which included growing consumer broadband revenue for the seventh consecutive quarter, and robust data-transport revenue growth of 3.2% in the fourth quarter," said Bob Udell, president and chief executive officer at Consolidated Communications. "Our fiber build plans are well underway."

"We are heading into 2021 with solid momentum," added Udell. "We have a fully funded growth plan, which is supported by our robust capital structure and the strategic partnership we secured in the fourth quarter with Searchlight Capital. Our long-term outlook is very positive. We are confident in our ability to upgrade more than 300,000 passings in 2021 as we execute on our fiber build plan and bring highly competitive, gigabit broadband services to 70% of our footprint by 2025."

Financial Results for the Fourth Quarter

* Revenue totaled $326.1 million, a decline of 1.5% compared to the fourth quarter 2019. This reflects a 250 basis point improvement compared to the prior year. Data and transport service revenue increased 3.2% or $2.9 million. Broadband revenue increased 2.8% or $1.8 million. Voice services revenue rate of decline across all customer channels improved 1.4% or $1.7 million. Network access revenues declined $1.7 million primarily due to a decrease in special access.

* Income from operations totaled $21 million in the fourth quarter, a decline of $5.7 million. The year-over-year change was primarily due to a 1.5% revenue decline and transaction costs of $7.6 million related to the Searchlight investment. These costs were partially offset by a decrease of $10.8 million in depreciation and amortization expense where certain acquired assets became fully depreciated.

* Net interest expense was $48.4 million, an increase of $15 million, as a result of the recapitalization of the balance sheet associated with the Oct. 2, 2020 refinancing and the receipt of the $350 million Searchlight strategic investment. Interest expense increased $3.5 million due to the higher mix of 6.5% Senior notes in the Company's external debt. Non-cash interest on the Searchlight note combined with amortization of deferred financing costs and the discount totaled $10.1 million. The Company expects to make Payment in Kind (PIK) interest payments on the Searchlight note through at least 2022.

* As part of the quarterly valuation of the Searchlight contingent payment right, the Company recognized a gain of $23.8 million in the fourth quarter related to a change in the fair value of contingent payment obligations as of Dec. 31, 2020. Upon receipt of all approvals and the completion of the second close which is expected in 2021, this contingent payment right will convert to common stock.

* Cash distributions from the Company's wireless partnerships totaled $9.5 million, an increase of $2.5 million from a year ago.

* Other income, net was $12.2 million compared to expense of $286,000 one year ago. The change included a $2.5 million increase in investment income from the Company's minority interest in wireless partnerships and a reduction in non-operating pension/OPEB expense of $8.8 million. The latter was the result of a non-cash pension settlement charge of $6.7 million in 2019.

* On a GAAP basis, net loss was $6.8 million, compared to a loss of $5.8 million for the same period a year ago. GAAP net loss per share was ($0.09). Adjusted diluted net income (loss) per share excludes certain items as outlined in the table provided in this release. Adjusted diluted net income per share was $0.12 in the fourth quarter of 2020, compared to $0.01 in the fourth quarter of 2019.

* Adjusted EBITDA was $132.3 million, an increase of 1.1% from the fourth quarter a year ago.

* The total net debt leverage ratio was 3.39x, an improvement from 4.33x at Dec. 31, 2019.

* Capital expenditures totaled $65.3 million in the fourth quarter driven by success-based opportunities across all customer channels as well as preparations for the 2021 fiber build expansion.

Full Year 2020 Results

* Operating revenue totaled $1.30 billion, down 2.4% from fiscal year 2019. This reflects an overall 200 basis point improvement compared to the prior year.

* Total operating expenses were reduced 3.5% or $30.4 million primarily driven by reduced labor costs, lower expense associated with integration efforts and continued operating efficiencies.

* Net cash from operating activities was $365 million.

* Adjusted EBITDA was $529.2 million. Adjusted diluted net income per share was $0.78.

* Capital expenditures totaled $217.6 million in 2020 supporting success-based, fiber projects and broadband network investments.

On Oct. 2, 2020, Consolidated closed on stage one of Searchlight's investment and received $350 million of the aggregate $425 million. Concurrent with Searchlight's investment, Consolidated completed a global refinancing in which it raised $2.25 billion in new secured debt at attractive rates, including a $250 million revolving credit facility. On Jan. 15, 2021 the Company secured an additional $150 million term loan financing on substantially the same terms as the October refinancing.

2021 Outlook

For 2021, Consolidated Communications is providing outlook based on the Company's new fiber build plan and current capital structure.

* Capital expenditures are expected to be in a range of $400 million to $420 million, reflecting a higher level of spending to support the build plan. * Adjusted EBITDA is expected to be in a range of $500 million to $510 million, lower than 2020 primarily due to the start-up and acceleration of the fiber build expansion plan. * Cash interest expense is expected to be in a range of $142 million to $152 million, reflecting the current debt structure. * Cash income taxes are expected to be in a range of $2 million to $4 million.

Conference Call

Consolidated's fourth-quarter earnings conference call will be webcast today at 10 a.m. ET. The live webcast and materials will be available on the Investor Relations section of the Company's website at http://ir.consolidated.com. The live conference call dial-in number for investors and analysts is 833-794-0898, conference ID 3278619. A telephonic replay of the conference call will be available through Mar. 4 and can be accessed by calling 800-585-8367, enter ID 3278619.

About Consolidated Communications

Consolidated Communications Holdings, Inc. (NASDAQ: CNSL) is a leading broadband and business communications provider serving consumers, businesses, and wireless and wireline carriers across rural and metro communities and a 23-state service area. Leveraging an advanced fiber network spanning 46,600 fiber route miles, Consolidated Communications offers a wide range of communications solutions, including: high-speed Internet, data, phone, security, managed services, cloud services and wholesale, carrier solutions. From our first connection 125 years ago, Consolidated is dedicated to turning technology into solutions, connecting people and enriching how they work and live. Visit www.consolidated.com for more information.

Use of Non-GAAP Financial Measures

This press release, as well as the conference call, includes disclosures regarding "EBITDA," "adjusted EBITDA," "total net debt to last 12 month adjusted EBITDA ratio" or "Net debt leverage ratio," "free cash flow" and "adjusted diluted net income (loss) per share," all of which are non-GAAP financial measures and described in this section as not being in compliance with Regulation S-X. Accordingly, they should not be construed as alternatives to net cash from operating or investing activities, cash and cash equivalents, cash flows from operations, net income or net income per share as defined by GAAP and are not, on their own, necessarily indicative of cash available to fund cash needs as determined in accordance with GAAP. In addition, not all companies use identical calculations, and the non-GAAP financial measures may not be comparable to other similarly titled measures of other companies. A reconciliation of the differences between these non-GAAP financial measures and the most directly comparable financial measures presented in accordance with GAAP is included in the tables that follow.

Adjusted EBITDA is comprised of EBITDA, adjusted for certain items as permitted or required by the lenders under our credit agreement in place at the end of each quarter in the periods presented. The tables that follow include an explanation of how adjusted EBITDA is calculated for each of the periods presented with the reconciliation to net income. EBITDA is defined as net earnings before interest expense, income taxes, depreciation and amortization on a historical basis.

We present adjusted EBITDA for several reasons. Management believes adjusted EBITDA is useful as a means to evaluate our ability to fund our estimated uses of cash (including interest on our debt). In addition, we have presented adjusted EBITDA to investors in the past because it is frequently used by investors, securities analysts and other interested parties in the evaluation of companies in our industry, and management believes presenting it here provides a measure of consistency in our financial reporting. Adjusted EBITDA, referred to as Available Cash in our credit agreement, is also a component of the restrictive covenants and financial ratios contained in our credit agreement that requires us to maintain compliance with these covenants and limit certain activities, such as our ability to incur debt. The definitions in these covenants and ratios are based on adjusted EBITDA after giving effect to specified charges. In addition, adjusted EBITDA provides our board of directors with meaningful information, with other data, assumptions and considerations, to measure our ability to service and repay debt. We present the related "total net debt to last 12 month adjusted EBITDA ratio" or "Net debt leverage ratio" principally to put other non-GAAP measures in context and facilitate comparisons by investors, security analysts and others; this ratio differs in certain respects from the similar ratio used in our credit agreement. These measures differ in certain respects from the ratios used in our senior notes indenture.

These non-GAAP financial measures have certain shortcomings. In particular, adjusted EBITDA does not represent the residual cash flows available for discretionary expenditures, since items such as debt repayment and interest payments are not deducted from such measure. Because adjusted EBITDA is a component of the ratio of total net debt to last twelve month adjusted EBITDA, these measures are also subject to the material limitations discussed above. In addition, the ratio of total net debt to last twelve month adjusted EBITDA is subject to the risk that we may not be able to use the cash on the balance sheet to reduce our debt on a dollar-for-dollar basis. Management believes this ratio is useful as a means to evaluate our ability to incur additional indebtedness in the future.

Free cash flow represents net cash provided by operating activities adjusted for capital expenditures, cash dividends, and proceeds received from the sale of assets, refinancing and investment. Free cash flow is a measure of operating cash flows available for corporate purposes after providing sufficient fixed asset additions. The tables that follow include a calculation of free cash flow for each of the periods presented with a reconciliation to net cash provided by operating activities. Free cash flow provides useful information to investors in the evaluation of our operating performance and liquidity.

We present the non-GAAP measure "adjusted diluted net income (loss) per share" because our net income (loss) and net income (loss) per share are regularly affected by items that occur at irregular intervals or are non-cash items. We believe that disclosing these measures assists investors, securities analysts and other interested parties in evaluating both our company over time and the relative performance of the companies in our industry.

Safe Harbor

Certain statements in this press release are forward-looking statements and are made pursuant to the safe harbor provisions of the Securities Litigation Reform Act of 1995. These forward-looking statements reflect, among other things, our current expectations, plans, strategies, and anticipated financial results. There are a number of risks, uncertainties, and conditions that may cause our actual results to differ materially from those expressed or implied by these forward-looking statements. These risks and uncertainties include a number of factors related to our business, including the uncertainties relating to the impact of the novel coronavirus (COVID-19) pandemic on the Company's business, results of operations, cash flows, stock price and employees; the possibility that any of the anticipated benefits of the strategic investment from Searchlight or our refinancing of outstanding debt, including our senior secured credit facilities, will not be realized; the outcome of any legal proceedings that may be instituted against the Company or its directors; the ability to obtain regulatory approvals and meet other closing conditions to the investment on a timely basis or at all, including the risk that regulatory approvals required for the investment are not obtained subject to conditions that are not anticipated or that could adversely affect the Company or the expected benefits of the investment; the anticipated use of proceeds of the strategic investment; economic and financial market conditions generally and economic conditions in our service areas; various risks to the price and volatility of our common stock; changes in the valuation of pension plan assets; the substantial amount of debt and our ability to repay or refinance it or incur additional debt in the future; our need for a significant amount of cash to service and repay the debt restrictions contained in our debt agreements that limit the discretion of management in operating the business; regulatory changes, including changes to subsidies, rapid development and introduction of new technologies and intense competition in the telecommunications industry; risks associated with our possible pursuit of acquisitions; system failures; cyber-attacks, information or security breaches or technology failure of ours or of a third party; losses of large customers or government contracts; risks associated with the rights-of-way for the network; disruptions in the relationship with third party vendors; losses of key management personnel and the inability to attract and retain highly qualified management and personnel in the future; changes in the extensive governmental legislation and regulations governing telecommunications providers and the provision of telecommunications services; new or changing tax laws or regulations; telecommunications carriers disputing and/or avoiding their obligations to pay network access charges for use of our network; high costs of regulatory compliance; the competitive impact of legislation and regulatory changes in the telecommunications industry; and liability and compliance costs regarding environmental regulations; and risks associated with discontinuing paying dividends on our common stock. A detailed discussion of these and other risks and uncertainties that could cause actual results and events to differ materially from such forward-looking statements are discussed in more detail in our filings with the SEC, including our reports on Form 10-K and Form 10-Q. Many of these circumstances are beyond our ability to control or predict. Moreover, forward-looking statements necessarily involve assumptions on our part. These forward-looking statements generally are identified by the words "believe," "expect," "anticipate," "estimate," "project," "intend," "plan," "should," "may," "will," "would," "will be," "will continue" or similar expressions. Such forward-looking statements involve known and unknown risks, uncertainties and other factors that may cause actual results, performance or achievements of the Company and its subsidiaries to be different from those expressed or implied in the forward-looking statements. All forward-looking statements attributable to us or persons acting on our behalf are expressly qualified in their entirety by the cautionary statements that appear throughout this press release. Furthermore, forward-looking statements speak only as of the date they are made. Except as required under the federal securities laws or the rules and regulations of the SEC, we disclaim any intention or obligation to update or revise publicly any forward-looking statements. You should not place undue reliance on forward-looking statements.

Tag: [Consolidated-Communications-Earnings]

Consolidated Communications Holdings, Inc.Condensed Consolidated Balance Sheets(Dollars in thousands, except share and per share amounts)(Unaudited) December 31, December 31,

2020 2019

ASSETSCurrent assets:Cash and cash equivalents $ 155,561 $ 12,395

Accounts receivable, net 137,646 120,016

Income tax receivable 1,072 2,669

Prepaid expenses and other current assets 46,382 41,787

Total current assets 340,661 176,867

Property, plant and equipment, net 1,760,152 1,835,878

Investments 111,665 112,717

Goodwill 1,035,274 1,035,274

Customer relationships, net 113,418 164,069

Other intangible assets 10,557 10,557

Other assets 135,573 54,915

Total assets $ 3,507,300 $ 3,390,277

LIABILITIES AND SHAREHOLDERS' EQUITYCurrent liabilities:Accounts payable $ 25,283 $ 30,936

Advance billings and customer deposits 49,544 45,710

Accrued compensation 74,957 57,069

Accrued interest 21,194 7,874

Accrued expense 81,931 75,406

Current portion of long-term debt and finance 17,561 27,301 lease obligationsTotal current liabilities 270,470 244,296

Long-term debt and finance lease obligations 1,932,666 2,250,677

Deferred income taxes 171,021 173,027

Pension and other post-retirement obligations 300,373 302,296

Convertible security interest 238,701 -

Contingent payment right 123,241 -

Other long-term liabilities 81,600 72,730

Total liabilities 3,118,072 3,043,026

Shareholders' equity:Common stock, par value $0.01 per share;100,000,000 shares authorized, 79,227,607 and 792 720 71,961,045, shares outstanding as of December 31,2020 and December 31, 2019, respectivelyAdditional paid-in capital 525,673 492,246

Accumulated deficit (34,514 ) (71,217 )

Accumulated other comprehensive loss, net (109,418 ) (80,868 )

Noncontrolling interest 6,695 6,370

Total shareholders' equity 389,228 347,251

Total liabilities and shareholders' equity $ 3,507,300 $ 3,390,277

Consolidated Communications Holdings, Inc.Condensed Consolidated Statements of Operations(Dollars in thousands, except per share amounts)(Unaudited)Three Months EndedYear EndedDecember 31,December 31,2020

2019

2020

2019

Net revenues$326,124

$331,035

$1,304,028

$1,336,542

Operating expenses:Cost of services and products138,927

136,201

560,644

574,936

Selling, general and administrative expenses77,682

76,473

275,361

299,088

Acquisition and other transaction costs7,646

-

7,646

-

Depreciation and amortization80,840

91,642

324,864

381,237

Income from operations21,029

26,719

135,513

81,281

Other income (expense):Interest expense, net of interest income(48,376

)

(33,390

)

(143,591

)

(136,660

)

Gain (loss) on extinguishment of debt(18,498

)

3,140

(18,264

)

4,510

Change in fair value of contingent payment rights23,802

-

23,802

-

Other income, net12,249

(286

)

50,778

27,224

Income (loss) before income taxes(9,794

)

(3,817

)

48,238

(23,645

)

Income tax expense (benefit)(2,956

)

2,005

10,936

(3,714

)

Net income (loss)(6,838

)

(5,822

)

37,302

(19,931

)

Less: net income attributable to noncontrolling interest82

166

325

452

Net income (loss) attributable to common shareholders$(6,920

)

$(5,988

)

$36,977

$(20,383

)

Net income (loss) per basic and diluted common shares attributable to common shareholders$(0.09

)

$(0.08

)

$0.47

$(0.29

)

Consolidated Communications Holdings, Inc.Condensed Consolidated Statements of Operations(Dollars in thousands, except per share amounts)(Unaudited) Three Months Ended Year Ended December 31, December 31, 2020 2019 2020 2019

Net revenues $ 326,124 $ 331,035 $ 1,304,028 $ 1,336,542

Operating expenses:Cost of services and 138,927 136,201 560,644 574,936 productsSelling, general and 77,682 76,473 275,361 299,088 administrativeexpensesAcquisition and 7,646 - 7,646 - other transactioncostsDepreciation and 80,840 91,642 324,864 381,237 amortizationIncome from 21,029 26,719 135,513 81,281 operationsOther income(expense):Interest expense, (48,376 ) (33,390 ) (143,591 ) (136,660 )net of interestincomeGain (loss) on (18,498 ) 3,140 (18,264 ) 4,510 extinguishment ofdebtChange in fair value 23,802 - 23,802 - of contingentpayment rightsOther income, net 12,249 (286 ) 50,778 27,224

Income (loss) before (9,794 ) (3,817 ) 48,238 (23,645 )income taxesIncome tax expense (2,956 ) 2,005 10,936 (3,714 )(benefit)Net income (loss) (6,838 ) (5,822 ) 37,302 (19,931 )

Less: net incomeattributable to 82 166 325 452 noncontrollinginterest Net income (loss) (6,920 ) (5,988 ) 36,977 (20,383 )attributable to $ $ $ $common shareholders Net income (loss)per basic anddiluted common $ (0.09 ) $ (0.08 ) $ 0.47 $ (0.29 )shares attributableto commonshareholdersConsolidated Communications Holdings, Inc.Condensed Consolidated Statements of Cash Flows(Dollars in thousands)(Unaudited)Three Months Ended

Year Ended

December 31,

December 31,

2020

2019

2020

2019

OPERATING ACTIVITIESNet income (loss)$(6,838

)

$(5,822

)

$37,302

$(19,931

)

Adjustments to reconcile net income (loss) to net cash provided by operating activities:Depreciation and amortization80,840

91,642

324,864

381,237

Deferred income taxes8,386

(5,888

)

8,386

(5,249

)

Cash distributions from wireless partnerships in excess of (less than) earnings(157

)

(340

)

844

(1,901

)

Pension and post-retirement contributions in excess of expense(7,635

)

(246

)

(37,301

)

(24,507

)

Non-cash, stock-based compensation2,046

1,596

7,533

6,836

Amortization of deferred financing costs and discounts4,243

1,253

7,871

4,932

Loss (gain) on extinguishment of debt10,863

(3,140

)

10,629

(4,510

)

Gain on change in fair value of contingent payment rights(23,802

)

-

(23,802

)

-

Other adjustments, net9,859

696

5,374

1,487

Changes in operating assets and liabilities, net(10,175

)

10,708

23,280

702

Net cash provided by operating activities67,630

90,459

364,980

339,096

INVESTING ACTIVITIESPurchase of property, plant and equipment, net(65,348

)

(47,860

)

(217,563

)

(232,203

)

Proceeds from sale of assets94

375

7,071

14,718

Proceeds from sale of investments-

-

426

329

Other-

(213

)

-

(663

)

Net cash used in investing activities(65,254

)

(47,698

)

(210,066

)

(217,819

)

FINANCING ACTIVITIESProceeds on bond offering750,000

-

750,000

-

Proceeds from issuance of long-term debt1,231,250

43,000

1,271,250

195,000

Proceeds from issuance of common stock350,000

-

350,000

-

Payment of finance lease obligations(1,777

)

(2,776

)

(9,020

)

(12,519

)

Payment on long-term debt(1,774,075

)

(52,587

)

(1,867,838

)

(195,350

)

Retirement of senior notes(440,509

)

(23,818

)

(444,717

)

(49,804

)

Payment of financing costs(59,139

)

-

(59,139

)

-

Share repurchases for minimum tax withholding(812

)

(363

)

(812

)

(363

)

Dividends on common stock-

-

-

(55,445

)

Other(1,472

)

-

(1,472

)

-

Net cash used in financing activities53,466

(36,544

)

(11,748

)

(118,481

)

Net change in cash and cash equivalents55,842

6,217

143,166

2,796

Cash and cash equivalents at beginning of period99,719

6,178

12,395

9,599

Cash and cash equivalents at end of period$155,561

$12,395

$155,561

$12,395

Consolidated Communications Holdings, Inc.Condensed Consolidated Statements of Cash Flows(Dollars in thousands)(Unaudited) Three Months Ended Year Ended

December 31, December 31,

2020 2019 2020 2019

OPERATINGACTIVITIESNet income (loss) $ (6,838 ) $ (5,822 ) $ 37,302 $ (19,931 )

Adjustments toreconcile netincome (loss) tonet cash providedby operatingactivities:Depreciation and 80,840 91,642 324,864 381,237 amortizationDeferred income 8,386 (5,888 ) 8,386 (5,249 )taxesCashdistributionsfrom wireless (157 ) (340 ) 844 (1,901 )partnerships inexcess of (lessthan) earningsPension andpost-retirement (7,635 ) (246 ) (37,301 ) (24,507 )contributions inexcess of expenseNon-cash, 2,046 1,596 7,533 6,836 stock-basedcompensationAmortization ofdeferred 4,243 1,253 7,871 4,932 financing costsand discountsLoss (gain) on 10,863 (3,140 ) 10,629 (4,510 )extinguishment ofdebtGain on change infair value of (23,802 ) - (23,802 ) - contingentpayment rightsOther 9,859 696 5,374 1,487 adjustments, netChanges inoperating assets (10,175 ) 10,708 23,280 702 and liabilities,netNet cash provided 67,630 90,459 364,980 339,096 by operatingactivitiesINVESTINGACTIVITIESPurchase ofproperty, plant (65,348 ) (47,860 ) (217,563 ) (232,203 )and equipment,netProceeds from 94 375 7,071 14,718 sale of assetsProceeds from - - 426 329 sale ofinvestmentsOther - (213 ) - (663 )

Net cash used in (65,254 ) (47,698 ) (210,066 ) (217,819 )investingactivitiesFINANCINGACTIVITIESProceeds on bond 750,000 - 750,000 - offeringProceeds from 1,231,250 43,000 1,271,250 195,000 issuance oflong-term debtProceeds from 350,000 - 350,000 - issuance ofcommon stockPayment of (1,777 ) (2,776 ) (9,020 ) (12,519 )finance leaseobligationsPayment on (1,774,075 ) (52,587 ) (1,867,838 ) (195,350 )long-term debtRetirement of (440,509 ) (23,818 ) (444,717 ) (49,804 )senior notesPayment of (59,139 ) - (59,139 ) - financing costsShare repurchases (812 ) (363 ) (812 ) (363 )for minimum taxwithholdingDividends on - - - (55,445 )common stockOther (1,472 ) - (1,472 ) -

Net cash used in 53,466 (36,544 ) (11,748 ) (118,481 )financingactivitiesNet change in 55,842 6,217 143,166 2,796 cash and cashequivalentsCash and cashequivalents at 99,719 6,178 12,395 9,599 beginning ofperiodCash and cash 155,561 12,395 155,561 12,395 equivalents at $ $ $ $end of periodConsolidated Communications Holdings, Inc.Consolidated Revenue by Category(Dollars in thousands)(Unaudited)Three Months EndedYear EndedDecember 31,December 31,2020

2019

2020

2019

Commercial and carrier:Data and transport services (includes VoIP)$92,781

$89,905

$362,078

$355,325

Voice services44,862

46,510

181,700

188,322

Other12,128

12,500

45,155

52,894

149,771

148,915

588,933

596,541

Consumer:Broadband (VoIP and Data)66,253

64,474

263,059

257,083

Video services17,547

19,838

74,343

81,378

Voice services41,431

44,238

170,503

180,839

125,231

128,550

507,905

519,300

Subsidies17,402

18,122

71,989

72,440

Network access31,314

33,056

125,261

138,056

Other products and services2,406

2,392

9,940

10,205

Total operating revenue$326,124

$331,035

$1,304,028

$1,336,542

Consolidated Communications Holdings, Inc.Consolidated Revenue by Category(Dollars in thousands)(Unaudited) Three Months Ended Year Ended December 31, December 31, 2020 2019 2020 2019

Commercial and carrier:Data and transport services $ 92,781 $ 89,905 $ 362,078 $ 355,325(includes VoIP)Voice services 44,862 46,510 181,700 188,322

Other 12,128 12,500 45,155 52,894

149,771 148,915 588,933 596,541

Consumer:Broadband (VoIP and Data) 66,253 64,474 263,059 257,083

Video services 17,547 19,838 74,343 81,378

Voice services 41,431 44,238 170,503 180,839

125,231 128,550 507,905 519,300

Subsidies 17,402 18,122 71,989 72,440

Network access 31,314 33,056 125,261 138,056

Other products and services 2,406 2,392 9,940 10,205

Total operating revenue $ 326,124 $ 331,035 $ 1,304,028 $ 1,336,542

Consolidated Communications Holdings, Inc.Consolidated Revenue Trend by Category(Dollars in thousands)(Unaudited)Three Months EndedQ4 2020

Q3 2020

Q2 2020

Q1 2020

Q4 2019

Commercial and carrier:Data and transport services (includes VoIP)$92,781

$90,153

$89,572

$89,572

$89,905

Voice services44,862

45,343

45,775

45,720

46,510

Other12,128

10,909

10,406

11,712

12,500

149,771

146,405

145,753

147,004

148,915

Consumer:Broadband (VoIP and Data)66,253

67,163

65,567

64,076

64,474

Video services17,547

18,452

19,213

19,131

19,838

Voice services41,431

42,775

43,121

43,176

44,238

125,231

128,390

127,901

126,383

128,550

Subsidies17,402

18,064

18,069

18,454

18,122

Network access31,314

32,009

30,473

31,465

33,056

Other products and services2,406

2,198

2,980

2,356

2,392

Total operating revenue$326,124

$327,066

$325,176

$325,662

$331,035

Consolidated Communications Holdings, Inc.Consolidated Revenue Trend by Category(Dollars in thousands)(Unaudited) Three Months Ended Q4 2020 Q3 2020 Q2 2020 Q1 2020 Q4 2019

Commercial andcarrier:Data and transport 92,781 90,153 89,572 89,572 89,905services (includes $ $ $ $ $VoIP)Voice services 44,862 45,343 45,775 45,720 46,510

Other 12,128 10,909 10,406 11,712 12,500

149,771 146,405 145,753 147,004 148,915

Consumer:Broadband (VoIP and 66,253 67,163 65,567 64,076 64,474Data)Video services 17,547 18,452 19,213 19,131 19,838

Voice services 41,431 42,775 43,121 43,176 44,238

125,231 128,390 127,901 126,383 128,550

Subsidies 17,402 18,064 18,069 18,454 18,122

Network access 31,314 32,009 30,473 31,465 33,056

Other products and 2,406 2,198 2,980 2,356 2,392servicesTotal operating $ 326,124 $ 327,066 $ 325,176 $ 325,662 $ 331,035revenueConsolidated Communications Holdings, Inc.Schedule of Adjusted EBITDA Calculation(Dollars in thousands)(Unaudited)Three Months EndedYear EndedDecember 31,December 31,2020

2019

2020

2019

Net income (loss)$(6,838

)

$(5,822

)

$37,302

$(19,931

)

Add (subtract):Income tax expense (benefit)(2,956

)

2,005

10,936

(3,714

)

Interest expense, net48,376

33,390

143,591

136,660

Depreciation and amortization80,840

91,642

324,864

381,237

EBITDA119,422

121,215

516,693

494,252

Adjustments to EBITDA (1):Other, net (2)17,518

3,914

14,238

17,754

Investment income (accrual basis)(9,793

)

(7,483

)

(41,062

)

(38,088

)

Investment distributions (cash basis)9,483

6,986

41,529

35,809

Pension/OPEB expense (benefit)(1,062

)

7,797

(4,169

)

11,487

Loss (gain) on extinguishment of debt18,498

(3,140

)

18,264

(4,510

)

Change in fair value of contingent payment right(23,802

)

-

(23,802

)

-

Non-cash compensation (3)2,046

1,596

7,533

6,836

Adjusted EBITDA$132,310

$130,885

$529,224

$523,540

Consolidated Communications Holdings, Inc.Schedule of Adjusted EBITDA Calculation(Dollars in thousands)(Unaudited) Three Months Ended Year Ended December 31, December 31, 2020 2019 2020 2019

Net income (loss) $ (6,838 ) $ (5,822 ) $ 37,302 $ (19,931 )

Add (subtract):Income tax expense (2,956 ) 2,005 10,936 (3,714 )(benefit)Interest expense, net 48,376 33,390 143,591 136,660

Depreciation and 80,840 91,642 324,864 381,237 amortizationEBITDA 119,422 121,215 516,693 494,252

Adjustments to EBITDA(1):Other, net (2) 17,518 3,914 14,238 17,754

Investment income (9,793 ) (7,483 ) (41,062 ) (38,088 )(accrual basis)Investment distributions 9,483 6,986 41,529 35,809 (cash basis)Pension/OPEB expense (1,062 ) 7,797 (4,169 ) 11,487 (benefit)Loss (gain) on 18,498 (3,140 ) 18,264 (4,510 )extinguishment of debtChange in fair value of (23,802 ) - (23,802 ) - contingent payment rightNon-cash compensation 2,046 1,596 7,533 6,836 (3)Adjusted EBITDA $ 132,310 $ 130,885 $ 529,224 $ 523,540

Notes:

(1) These adjustments reflect those required or permitted by the lenders under our credit agreement.

(2) Other, net includes income attributable to noncontrolling interests, acquisition and non-recurring related costs, and certain miscellaneous items.

(3) Represents compensation expenses in connection with our Restricted Share Plan, which because of the non-cash nature of the expenses are excluded from adjusted EBITDA.

Notes:

(1) These adjustments reflect those required or permitted by the lendersunder our credit agreement.

(2) Other, net includes income attributable to noncontrolling interests,acquisition and non-recurring related costs, and certain miscellaneous items.

(3) Represents compensation expenses in connection with our Restricted SharePlan, which because of the non-cash nature of the expenses are excluded fromadjusted EBITDA.

Consolidated Communications Holdings, Inc.Total Net Debt to LTM Adjusted EBITDA Ratio(Dollars in thousands)(Unaudited)December 31,2020

Summary of Outstanding Debt:Term loans, net of discount $18,181$1,228,694

Senior secured notes due 2028750,000

Finance leases17,467

Total debt as of December 31, 20201,996,161

Less deferred debt issuance costs(45,934

)

Less cash on hand(155,561

)

Total net debt as of December 31, 2020$1,794,666

Adjusted EBITDA for the twelve months ended December 31, 2020$529,224

Total Net Debt to last twelve monthsAdjusted EBITDA3.39x

Consolidated Communications Holdings, Inc.Total Net Debt to LTM Adjusted EBITDA Ratio(Dollars in thousands)(Unaudited) December 31, 2020

Summary of Outstanding Debt:Term loans, net of discount $18,181 $ 1,228,694

Senior secured notes due 2028 750,000

Finance leases 17,467

Total debt as of December 31, 2020 1,996,161

Less deferred debt issuance costs (45,934 )

Less cash on hand (155,561 )

Total net debt as of December 31, 2020 $ 1,794,666

Adjusted EBITDA for the twelve months ended December 31, 2020 $ 529,224

Total Net Debt to last twelve monthsAdjusted EBITDA 3.39x

Consolidated Communications Holdings, Inc.Schedule of Free Cash Flow Calculation(Dollars in thousands)(Unaudited)Three Months EndedYear EndedDecember 31,December 31,2020

2019

2020

2019

Net cash provided by operating activities$67,630

$90,459

$364,980

$339,096

Add (subtract):Capital expenditures(65,348

)

(47,860

)

(217,563

)

(232,203

)

Dividends paid-

-

-

(55,445

)

Proceeds from the sale of assets94

375

7,071

14,718

Net proceeds from refinancing and Searchlight investment43,420

-

43,420

-

Free cash flow$45,796

$42,974

$197,908

$66,166

Consolidated Communications Holdings, Inc.Schedule of Free Cash Flow Calculation(Dollars in thousands)(Unaudited) Three Months Ended Year Ended December 31, December 31, 2020 2019 2020 2019

Net cash provided by $ 67,630 $ 90,459 $ 364,980 $ 339,096 operating activitiesAdd (subtract):Capital expenditures (65,348 ) (47,860 ) (217,563 ) (232,203 )

Dividends paid - - - (55,445 )

Proceeds from the sale 94 375 7,071 14,718 of assetsNet proceeds from 43,420 - 43,420 - refinancing andSearchlight investmentFree cash flow $ 45,796 $ 42,974 $ 197,908 $ 66,166

Consolidated Communications Holdings, Inc.Reconciliation of Net Income to Adjusted EBITDA Guidance(Dollars in millions)(Unaudited)Twelve Months EndedDecember 31, 2021RangeLowHighNet income$

30

$

45

Add:Income tax expense11

16

Interest expense, net150

145

Depreciation and amortization305

300

EBITDA496

506

Adjustments to EBITDA (1):Other, net (2)1

1

Pension/OPEB expense(4

)

(4

)

Non-cash compensation (3)7

7

Adjusted EBITDA$

500

$

510

Consolidated Communications Holdings, Inc.Reconciliation of Net Income to Adjusted EBITDA Guidance(Dollars in millions)(Unaudited) Twelve Months Ended December 31, 2021 Range Low HighNet income $ 30 $ 45

Add:Income tax expense 11 16

Interest expense, net 150 145

Depreciation and amortization 305 300

EBITDA 496 506

Adjustments to EBITDA (1):Other, net (2) 1 1

Pension/OPEB expense (4 ) (4 )

Non-cash compensation (3) 7 7

Adjusted EBITDA $ 500 $ 510

Notes:

(1) These adjustments reflect those required or permitted by the lenders under our credit agreement.

(2) Other, net includes income attributable to noncontrolling interests, cash distributions less equity earnings from our investments, dividend income, acquisition and non-recurring related costs and certain miscellaneous items.

(3) Represents compensation expenses in connection with our Restricted Share Plan, which because of the non-cash nature of the expenses are excluded from adjusted EBITDA.

Notes:

(1) These adjustments reflect those required or permitted by the lenders underour credit agreement.

(2) Other, net includes income attributable to noncontrolling interests, cashdistributions less equity earnings from our investments, dividend income,acquisition and non-recurring related costs and certain miscellaneous items.

(3) Represents compensation expenses in connection with our Restricted SharePlan, which because of the non-cash nature of the expenses are excluded fromadjusted EBITDA.

Consolidated Communications Holdings, Inc.Adjusted Net Income (Loss) and Net Income (Loss) Per Share(Dollars in thousands, except per share amounts)(Unaudited)Three Months EndedYear EndedDecember 31,December 31,2020

2019

2020

2019

Net income (loss)$(6,838

)

$(5,822

)

$37,302

$(19,931

)

Integration and severance related costs, net of tax13,171

5,712

13,201

17,449

Storm costs (recoveries), net of tax172

105

71

(171

)

Loss (gain) on extinguishment of debt, net of tax13,674

(2,289

)

13,501

(3,288

)

Change in fair value of contingent payment rights(23,802

)

-

(23,802

)

-

Non-cash interest expense for Searchlight note including amortization of discount and fees10,131

-

10,131

-

Non-cash interest expense for swaps, net of tax(175

)

(112

)

(727

)

(28

)

Change in deferred tax rate(6

)

686

(6

)

686

Other, tax1,346

1,227

1,346

1,865

Non-cash stock compensation, net of tax1,512

1,163

5,568

4,983

Adjusted net income (loss)$9,185

$670

$56,585

$1,565

Weighted average number of shares outstanding77,515

70,909

72,752

70,837

Adjusted diluted net income (loss) per share$0.12

$0.01

$0.78

$0.02

Consolidated Communications Holdings, Inc.Adjusted Net Income (Loss) and Net Income (Loss) Per Share(Dollars in thousands, except per share amounts)(Unaudited) Three Months Ended Year Ended December 31, December 31, 2020 2019 2020 2019

Net income (loss) $ (6,838 ) $ (5,822 ) $ 37,302 $ (19,931 )

Integration and severance 13,171 5,712 13,201 17,449 related costs, net of taxStorm costs (recoveries), 172 105 71 (171 )net of taxLoss (gain) on 13,674 (2,289 ) 13,501 (3,288 )extinguishment of debt,net of taxChange in fair value of (23,802 ) - (23,802 ) - contingent payment rightsNon-cash interest expensefor Searchlight note 10,131 - 10,131 - including amortization ofdiscount and feesNon-cash interest expense (175 ) (112 ) (727 ) (28 )for swaps, net of taxChange in deferred tax (6 ) 686 (6 ) 686 rateOther, tax 1,346 1,227 1,346 1,865

Non-cash stock 1,512 1,163 5,568 4,983 compensation, net of taxAdjusted net income $ 9,185 $ 670 $ 56,585 $ 1,565 (loss) Weighted average number 77,515 70,909 72,752 70,837 of shares outstandingAdjusted diluted net $ 0.12 $ 0.01 $ 0.78 $ 0.02 income (loss) per shareNotes:

Calculations above assume a 26.1% effective tax rate for the three months and year ended December 31, 2020 and 27.1% effective tax rate for the three months and year ended December 31, 2019.

Notes:

Calculations above assume a 26.1% effective tax rate for the three months andyear ended December 31, 2020 and 27.1% effective tax rate for the threemonths and year ended December 31, 2019.

Consolidated Communications Holdings, Inc.Key Operating Statistics(Unaudited)December 31,

September 30,

% Change

December 31,

% Change

2020

2020

in Qtr

2019

YOY

Voice Connections779,590

794,333

(1.9%)

835,997

(6.7%)

Data and Internet Connections792,200

792,211

(0.0%)

784,165

1.0%

Video Connections76,041

77,854

(2.3%)

84,171

(9.7%)

Business and Broadband as % of total revenue (1)76.5

%

75.9

%

0.9%

75.8

%

1.0%

Fiber route network miles (long-haul, metro and FTTH) (2)46,664

46,326

0.7%

37,511

24.4%

On-net buildings13,564

13,202

2.7%

12,264

10.6%

Consumer Customers554,763

562,587

(1.4%)

582,818

(4.8%)

Consumer ARPU$75.25

$76.07

(1.1%)

$73.52

2.4%

Consolidated Communications Holdings, Inc.Key Operating Statistics(Unaudited) December September % December % 31, 30, Change 31, Change

2020 2020 in Qtr 2019 YOY

Voice Connections 779,590 794,333 (1.9%) 835,997 (6.7%)



Data and Internet 792,200 792,211 (0.0%) 784,165 1.0%Connections

Video Connections 76,041 77,854 (2.3%) 84,171 (9.7%)



Business and Broadband as 76.5 % 75.9 % 0.9% 75.8 % 1.0%% of total revenue (1)

Fiber route network miles 46,664 46,326 0.7% 37,511 24.4%(long-haul, metro andFTTH) (2)

On-net buildings 13,564 13,202 2.7% 12,264 10.6%



Consumer Customers 554,763 562,587 (1.4%) 582,818 (4.8%)



Consumer ARPU $ 75.25 $ 76.07 (1.1%) $ 73.52 2.4%

Notes:

(1) Business and Broadband revenue % includes: commercial/carrier, equipment sales and service, directory, consumer broadband and special access.

(2) FTTH miles added to fiber route network miles beginning in Q2 2020, which were previously not included. Prior period amounts have not been restated to the current period presentation.

View source version on businesswire.com: https://www.businesswire.com/news/home/20210225005255/en/

CONTACT: Investor and Media Contact Jennifer Spaude, Consolidated Communications Phone: 507-386-3765 jennifer.spaude@consolidated.com