Business Wire | Apr 29, 2021 08:00AM EDT

Consolidated Communications Reports First Quarter 2021 Results

Apr. 29, 2021

MATTOON, Ill.--(BUSINESS WIRE)--Apr. 29, 2021--Consolidated Communications Holdings, Inc. (Nasdaq: CNSL) (the "Company" or "Consolidated") reported results for the first quarter 2021.

"Our first-quarter results demonstrate we're delivering on our fiber growth plans as we upgraded approximately 46,000 passings to Gig+ FTTP and are sustaining an eight-quarter track record of year-over-year broadband revenue growth," said Bob Udell, president and chief executive officer at Consolidated Communications. "The fast start to the year demonstrates our team's strong execution of our fiber-first strategy."

"We are on track to close on the final stage of the Searchlight investment following FCC and state approvals which are expected in the third quarter 2021," added Udell. "Our fiber expansion plan is fully funded and we are embarking on the Company's most important growth and transformation period yet as we bring highly competitive, gigabit broadband services to at least 70% of our footprint by 2025."

Financial Results for the First Quarter

* Revenue totaled $324.8 million, a decline of 0.3% compared to the first quarter 2020. Broadband revenue increased 2.6% or $1.7 million. Video services revenue declined $2.3 million reflecting our strategy change to streaming Over-The-Top services bundled with broadband services. Voice services revenue declined $4.2 million or 4.7% across all customer channels. Subsidies declined $1.1 million primarily due to reductions in support from Texas High Cost Funds. Other Products and Services revenue increased $6.2 million. Non-recurring revenue associated with network builds for public-private partnerships totaled $6.5 million. * Operating expenses increased $5.3 million or 2.6% compared to the same period last year. First quarter operating expenses included $8 million in expense related to public-private partnership network builds and initial fiber expansion costs. * Income from operations totaled $38.3 million in the first quarter, an increase of $974,000 or 2.6%. The year-over-year change was primarily due to a decline in depreciation and amortization expense of $7.1 million, partially offset by an increase of $5.3 million in operating expenses and slightly lower revenue. * Net interest expense was $48.4 million, an increase of $16.3 million, as a result of the recapitalization of the balance sheet associated with the Oct. 2, 2020 refinancing, the receipt of the $350 million Searchlight strategic investment and additional borrowings during the quarter. Interest expense increased $5.6 million due to the higher mix of senior notes in the Company's external debt and additional borrowings under the Company's credit agreement during the quarter. Non-cash interest on the Searchlight note combined with amortization of deferred financing costs and the discount totaled $10.2 million. The Company expects to continue to make payment in kind (PIK) interest payments on the Searchlight note. * At March 31, 2021, the Company recognized a non-cash loss of $57.6 million related to a change in the fair value of the Searchlight contingent payment obligations. * Cash distributions from the Company's wireless partnerships totaled $9.4 million, a decline of $700,000 from a year ago. * Other income, net was $12.3 million compared to $15.2 million in the first quarter 2020. The change was primarily due to lower income from the Company's minority interest in wireless partnerships, a gain of $3.7 million on an asset sale in the first quarter of 2020 offset by a decrease in non-operating pension/OPEB expense of $1.9 million. * On a GAAP basis, net loss was $62.1 million, compared to net income of $15.6 million for the same period a year ago. GAAP net loss per share was ($0.80). 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 $0.21 in the first quarter of 2021, compared to $0.23 in the first quarter of 2020. * Adjusted EBITDA was $126.6 million, a decrease 3.8% from the first quarter 2020 primarily due to certain expenses associated with the startup of the fiber expansion plans. * The total net debt leverage ratio was 3.41x with $325.1 million cash and cash equivalents. * Capital expenditures totaled $76 million in the first quarter, compared to $42.4 million in the first quarter of 2020, driven by the Company's fiber build expansion plan and investment in digital transformation technology.

On April 26, 2021, Consolidated's shareholders approved the issuance to Searchlight of additional shares of common stock equal to 20% or more of the Company's outstanding common stock. Those shares are issuable to Searchlight pursuant to a contingent payment right, which is convertible upon receipt of FCC and certain state regulatory approvals. FCC approval is also required for the closing of the second stage of the transaction and the investment by Searchlight of its remaining $75 million investment. The Company has received Hart-Scott-Rodino approval of the transaction.

2021 Outlook

Consolidated Communications affirmed its previous outlook for 2021 which is outlined below.

* Capital expenditures are expected to be in a range of $400 million to $420 million, reflecting a higher level of spending to support the fiber expansion plan. * Adjusted EBITDA is expected to be in a range of $500 million to $510 million, reflecting the start-up and acceleration of the Company's growth plan. * Cash interest expense is expected to be in a range of $130 million to $135 million, and was updated on April 5, 2021 with the Company's announcement of a repricing of its term loan. * Cash income taxes are expected to be in a range of $2 million to $4 million.

Conference Call

Consolidated's first-quarter 2021 earnings conference call will be webcast live today at 10 a.m. ET. The 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 analysts and investors is 833-794-0898, conference ID 7369367. A telephonic replay of the conference call will be available through May 6 and can be accessed by calling 800-585-8367, enter ID 7369367.

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 47,400 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)



March 31, December 31,

2021 2020

ASSETSCurrent assets:Cash and cash equivalents $ 325,142 $ 155,561

Accounts receivable, net 125,677 137,646

Income tax receivable 1,072 1,072

Prepaid expenses and other current assets 48,574 46,382

Total current assets 500,465 340,661

Property, plant and equipment, net 1,772,678 1,760,152

Investments 110,801 111,665

Goodwill 1,035,274 1,035,274

Customer relationships, net 103,522 113,418

Other intangible assets 10,590 10,557

Other assets 140,490 135,573

Total assets $ 3,673,820 $ 3,507,300

LIABILITIES AND SHAREHOLDERS' EQUITYCurrent liabilities:Accounts payable $ 27,174 $ 25,283

Advance billings and customer deposits 49,144 49,544

Accrued compensation 64,971 74,957

Accrued interest 41,439 21,194

Accrued expense 86,978 81,931

Current portion of long-term debt and finance 5,018 17,561 lease obligationsTotal current liabilities 274,724 270,470

Long-term debt and finance lease obligations 2,105,779 1,932,666

Deferred income taxes 167,096 171,021

Pension and other post-retirement obligations 291,273 300,373

Convertible security interest 241,027 238,701

Contingent payment rights 180,829 123,241

Other long-term liabilities 80,586 81,600

Total liabilities 3,341,314 3,118,072

Shareholders' equity:Common stock, par value $0.01 per share;100,000,000 shares authorized,79,983,431 and 79,227,607 shares outstanding as 800 792of March 31, 2021and December 31, 2020, respectively

Additional paid-in capital 527,115 525,673

Accumulated deficit (96,613 ) (34,514 )

Accumulated other comprehensive loss, net (105,507 ) (109,418 )

Noncontrolling interest 6,711 6,695

Total shareholders' equity 332,506 389,228

Total liabilities and shareholders' equity $ 3,673,820 $ 3,507,300

Consolidated Communications Holdings, Inc.

Condensed Consolidated Statements of Operations

(Dollars in thousands, except per share amounts)

(Unaudited)

Three Months Ended

March 31,

2021

2020

Net revenues$324,766

$325,662

Operating expenses:Cost of services and products143,979

137,755

Selling, general and administrative expenses66,850

67,817

Depreciation and amortization75,611

82,738

Income from operations38,326

37,352

Other income (expense):Interest expense, net of interest income(48,415

)

(32,095

)

Gain (loss) on extinguishment of debt(11,980

)

234

Change in fair value of contingent payment rights(57,588

)

-

Other income, net12,274

15,173

Income (loss) before income taxes(67,383

)

20,664

Income tax expense (benefit)(5,300

)

5,041

Net income (loss)(62,083

)

15,623

Less: net income attributable to noncontrolling interest16

76

Net income (loss) attributable to common shareholders$(62,099

)

$15,547

Net income (loss) per basic and diluted common shares attributable to common shareholders$(0.80

)

$0.22

Consolidated Communications Holdings, Inc.

Condensed Consolidated Statements of Operations

(Dollars in thousands, except per share amounts)

(Unaudited)



Three Months Ended

March 31,

2021 2020

Net revenues $ 324,766 $ 325,662

Operating expenses:Cost of services and products 143,979 137,755

Selling, general and administrative expenses 66,850 67,817

Depreciation and amortization 75,611 82,738

Income from operations 38,326 37,352

Other income (expense):Interest expense, net of interest income (48,415 ) (32,095 )

Gain (loss) on extinguishment of debt (11,980 ) 234

Change in fair value of contingent payment rights (57,588 ) -

Other income, net 12,274 15,173

Income (loss) before income taxes (67,383 ) 20,664

Income tax expense (benefit) (5,300 ) 5,041

Net income (loss) (62,083 ) 15,623

Less: net income attributable to noncontrolling 16 76 interest Net income (loss) attributable to common $ (62,099 ) $ 15,547 shareholdersNet income (loss) per basic and diluted common $ (0.80 ) $ 0.22 shares attributable to common shareholdersConsolidated Communications Holdings, Inc.

Condensed Consolidated Statements of Cash Flows

(Dollars in thousands)

(Unaudited)

Three Months Ended

March 31,

2021

2020

OPERATING ACTIVITIESNet income (loss)$(62,083

)

$15,623

Adjustments to reconcile net income (loss) to net cash provided by operating activities:Depreciation and amortization75,611

82,738

Cash distributions from wireless partnerships in excess of (less than) earnings11

(307

)

Pension and post-retirement contributions in excess of expense(8,770

)

(8,571

)

Non-cash, stock-based compensation1,450

890

Amortization of deferred financing costs and discounts4,283

1,196

Loss (gain) on extinguishment of debt11,980

(234

)

Loss on change in fair value of contingent payment rights57,588

-

Other adjustments, net7,507

(4,138

)

Changes in operating assets and liabilities, net10,913

(2,207

)

Net cash provided by operating activities98,490

84,990

INVESTING ACTIVITIESPurchase of property, plant and equipment, net(75,960

)

(42,389

)

Proceeds from sale of assets24

2,187

Proceeds from sale of investments1,198

426

Net cash used in investing activities(74,738

)

(39,776

)

FINANCING ACTIVITIESProceeds from bond offering400,000

-

Proceeds from issuance of long-term debt150,000

10,000

Payment of finance lease obligations(1,598

)

(2,674

)

Payment on long-term debt(397,000

)

(46,588

)

Retirement of senior notes-

(4,208

)

Payment of financing costs(5,573

)

-

Net cash provided by (used in) financing activities145,829

(43,470

)

Net change in cash and cash equivalents169,581

1,744

Cash and cash equivalents at beginning of period155,561

12,395

Cash and cash equivalents at end of period$325,142

$14,139

Consolidated Communications Holdings, Inc.

Condensed Consolidated Statements of Cash Flows

(Dollars in thousands)

(Unaudited)



Three Months Ended

March 31,

2021 2020

OPERATING ACTIVITIESNet income (loss) $ (62,083 ) $ 15,623

Adjustments to reconcile net income (loss) to netcash provided by operating activities:Depreciation and amortization 75,611 82,738

Cash distributions from wireless partnerships in 11 (307 )excess of (less than) earningsPension and post-retirement contributions in (8,770 ) (8,571 )excess of expenseNon-cash, stock-based compensation 1,450 890

Amortization of deferred financing costs and 4,283 1,196 discountsLoss (gain) on extinguishment of debt 11,980 (234 )

Loss on change in fair value of contingent payment 57,588 - rightsOther adjustments, net 7,507 (4,138 )

Changes in operating assets and liabilities, net 10,913 (2,207 )

Net cash provided by operating activities 98,490 84,990

INVESTING ACTIVITIESPurchase of property, plant and equipment, net (75,960 ) (42,389 )

Proceeds from sale of assets 24 2,187

Proceeds from sale of investments 1,198 426

Net cash used in investing activities (74,738 ) (39,776 )

FINANCING ACTIVITIESProceeds from bond offering 400,000 -

Proceeds from issuance of long-term debt 150,000 10,000

Payment of finance lease obligations (1,598 ) (2,674 )

Payment on long-term debt (397,000 ) (46,588 )

Retirement of senior notes - (4,208 )

Payment of financing costs (5,573 ) -

Net cash provided by (used in) financing 145,829 (43,470 )activitiesNet change in cash and cash equivalents 169,581 1,744

Cash and cash equivalents at beginning of period 155,561 12,395

Cash and cash equivalents at end of period $ 325,142 $ 14,139

Consolidated Communications Holdings, Inc.

Consolidated Revenue by Category

(Dollars in thousands)

(Unaudited)

Three Months Ended

March 31,

2021

2020

Commercial and carrier:Data and transport services (includes VoIP)$90,348

$89,572

Voice services44,279

45,720

Other9,719

11,712

144,346

147,004

Consumer:Broadband (VoIP and Data)65,755

64,076

Video services16,781

19,131

Voice services40,420

43,176

122,956

126,383

Subsidies17,339

18,454

Network access31,603

31,465

Other products and services8,522

2,356

Total operating revenue$324,766

$325,662

Consolidated Communications Holdings, Inc.

Consolidated Revenue by Category

(Dollars in thousands)

(Unaudited)



Three Months Ended

March 31,

2021 2020

Commercial and carrier:Data and transport services (includes VoIP) $ 90,348 $ 89,572

Voice services 44,279 45,720

Other 9,719 11,712

144,346 147,004

Consumer:Broadband (VoIP and Data) 65,755 64,076

Video services 16,781 19,131

Voice services 40,420 43,176

122,956 126,383

Subsidies 17,339 18,454

Network access 31,603 31,465

Other products and services 8,522 2,356

Total operating revenue $ 324,766 $ 325,662

Consolidated Communications Holdings, Inc.

Consolidated Revenue Trend by Category

(Dollars in thousands)

(Unaudited)

Three Months Ended

Q1 2021

Q4 2020

Q3 2020

Q2 2020

Q1 2020

Commercial and carrier:Data and transport services (includes VoIP)$90,348

$92,781

$90,153

$89,572

$89,572

Voice services44,279

44,862

45,343

45,775

45,720

Other9,719

12,128

10,909

10,406

11,712

144,346

149,771

146,405

145,753

147,004

Consumer:Broadband (VoIP and Data)65,755

66,253

67,163

65,567

64,076

Video services16,781

17,547

18,452

19,213

19,131

Voice services40,420

41,431

42,775

43,121

43,176

122,956

125,231

128,390

127,901

126,383

Subsidies17,339

17,402

18,064

18,069

18,454

Network access31,603

31,314

32,009

30,473

31,465

Other products and services8,522

2,406

2,198

2,980

2,356

Total operating revenue$324,766

$326,124

$327,066

$325,176

$325,662

Consolidated Communications Holdings, Inc.

Consolidated Revenue Trend by Category

(Dollars in thousands)

(Unaudited)



Three Months Ended

Q1 2021 Q4 2020 Q3 2020 Q2 2020 Q1 2020

Commercial andcarrier:Data and transport 90,348 92,781 90,153 89,572 89,572services (includes $ $ $ $ $VoIP)Voice services 44,279 44,862 45,343 45,775 45,720

Other 9,719 12,128 10,909 10,406 11,712

144,346 149,771 146,405 145,753 147,004

Consumer:Broadband (VoIP and 65,755 66,253 67,163 65,567 64,076Data)Video services 16,781 17,547 18,452 19,213 19,131

Voice services 40,420 41,431 42,775 43,121 43,176

122,956 125,231 128,390 127,901 126,383

Subsidies 17,339 17,402 18,064 18,069 18,454

Network access 31,603 31,314 32,009 30,473 31,465

Other products and 8,522 2,406 2,198 2,980 2,356servicesTotal operating $ 324,766 $ 326,124 $ 327,066 $ 325,176 $ 325,662revenueConsolidated Communications Holdings, Inc.

Schedule of Adjusted EBITDA Calculation

(Dollars in thousands)

(Unaudited)

Three Months Ended

March 31,

2021

2020

Net income (loss)$(62,083

)

$15,623

Add (subtract):Income tax expense (benefit)(5,300

)

5,041

Interest expense, net48,415

32,095

Depreciation and amortization75,611

82,738

EBITDA56,643

135,497

Adjustments to EBITDA (1):Other, net (2)1,688

(3,476

)

Investment income (accrual basis)(9,556

)

(10,579

)

Investment distributions (cash basis)9,377

10,064

Pension/OPEB expense (benefit)(2,541

)

(584

)

Loss (gain) on extinguishment of debt11,980

(234

)

Change in fair value of contingent payment right57,588

-

Non-cash compensation (3)1,450

890

Adjusted EBITDA$126,629

$131,578

Consolidated Communications Holdings, Inc.

Schedule of Adjusted EBITDA Calculation

(Dollars in thousands)

(Unaudited)



Three Months Ended

March 31,

2021 2020

Net income (loss) $ (62,083 ) $ 15,623

Add (subtract):Income tax expense (benefit) (5,300 ) 5,041

Interest expense, net 48,415 32,095

Depreciation and amortization 75,611 82,738

EBITDA 56,643 135,497

Adjustments to EBITDA (1):Other, net (2) 1,688 (3,476 )

Investment income (accrual basis) (9,556 ) (10,579 )

Investment distributions (cash basis) 9,377 10,064

Pension/OPEB expense (benefit) (2,541 ) (584 )

Loss (gain) on extinguishment of debt 11,980 (234 )

Change in fair value of contingent payment right 57,588 -

Non-cash compensation (3) 1,450 890

Adjusted EBITDA $ 126,629 $ 131,578

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 lenders underour 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)

March 31,

2021

Summary of Outstanding Debt:Term loans, net of discount $12,607$987,268

6.50% Senior secured notes due 2028750,000

5.00% Senior secured notes due 2028400,000

Finance leases16,692

Total debt as of March 31, 20212,153,960

Less deferred debt issuance costs(43,163

)

Less cash on hand(325,142

)

Total net debt as of March 31, 2021$1,785,655

Adjusted EBITDA for the twelve months ended March 31, 2021$524,275

Total Net Debt to last twelve months Adjusted EBITDA3.41x

Consolidated Communications Holdings, Inc.

Total Net Debt to LTM Adjusted EBITDA Ratio

(Dollars in thousands)

(Unaudited)



March 31,

2021

Summary of Outstanding Debt:Term loans, net of discount $12,607 $ 987,268

6.50% Senior secured notes due 2028 750,000

5.00% Senior secured notes due 2028 400,000

Finance leases 16,692

Total debt as of March 31, 2021 2,153,960

Less deferred debt issuance costs (43,163 )

Less cash on hand (325,142 )

Total net debt as of March 31, 2021 $ 1,785,655

Adjusted EBITDA for the twelve months ended March 31, 2021 $ 524,275

Total Net Debt to last twelve months Adjusted EBITDA 3.41x

Consolidated Communications Holdings, Inc.

Schedule of Free Cash Flow Calculation

(Dollars in thousands)

(Unaudited)

Three Months Ended

March 31,

2021

2020

Net cash provided by operating activities$98,490

$84,990

Add (subtract):Capital expenditures(75,960

)

(42,389

)

Proceeds from the sale of assets24

2,187

Net proceeds from refinancing148,498

-

Free cash flow$171,052

$44,788

Consolidated Communications Holdings, Inc.

Schedule of Free Cash Flow Calculation

(Dollars in thousands)

(Unaudited)



Three Months Ended

March 31,

2021 2020

Net cash provided by operating activities $ 98,490 $ 84,990

Add (subtract):Capital expenditures (75,960 ) (42,389 )

Proceeds from the sale of assets 24 2,187

Net proceeds from refinancing 148,498 -

Free cash flow $ 171,052 $ 44,788

Consolidated Communications Holdings, Inc.Reconciliation of Net Income to Adjusted EBITDA Guidance

(Dollars in millions)

(Unaudited)

Twelve Months Ended

December 31, 2021

Range

Low

High

Net income$

31

$

41

Add:Income tax expense

10

20

Interest expense, net

150

145

Depreciation and amortization

305

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 High

Net income $ 31 $ 41

Add:Income tax expense 10 20

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 Ended

March 31,

2021

2020

Net income (loss)$(62,083

)

$15,623

Integration and severance related costs, net of tax1,156

297

Storm costs (recoveries), net of tax-

82

Loss (gain) on extinguishment of debt, net of tax8,743

(177

)

Change in fair value of contingent payment rights57,588

-

Non-cash interest expense for Searchlight note including amortization of discount and fees10,201

-

Non-cash interest expense for swaps, net of tax(182

)

(183

)

Non-cash stock compensation, net of tax1,058

673

Adjusted net income$16,481

$16,315

Weighted average number of shares outstanding78,029

71,153

Adjusted diluted net income per share$0.21

$0.23

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

March 31,

2021 2020

Net income (loss) $ (62,083 ) $ 15,623

Integration and severance related costs, net of tax 1,156 297

Storm costs (recoveries), net of tax - 82

Loss (gain) on extinguishment of debt, net of tax 8,743 (177 )

Change in fair value of contingent payment rights 57,588 -

Non-cash interest expense for Searchlight note 10,201 - including amortization of discount and feesNon-cash interest expense for swaps, net of tax (182 ) (183 )

Non-cash stock compensation, net of tax 1,058 673

Adjusted net income $ 16,481 $ 16,315

Weighted average number of shares outstanding 78,029 71,153

Adjusted diluted net income per share $ 0.21 $ 0.23

Notes:Calculations above assume a 27.0% and 24.4% effective tax rate for the three months ended March 31, 2021 and 2020, respectively.Notes:Calculations above assume a 27.0% and 24.4% effective tax rate for the threemonths ended March 31, 2021 and 2020, respectively.Consolidated Communications Holdings, Inc.Key Operating Statistics(Unaudited)Operating MetricsMarch 31,

December 31,

QoQ

March 31,

YoY

In thousands2021

2020

Change

% Change

2020

Change

% Change

Consumer Addressable Market? FTTP 1 Gig+ capable (1)321

275

46

16.7

%

273

48

17.5

%

Fiber Node/DSL2,421

2,461

(40

)

(1.6

%)

2,448

(26

)

(1.1

%)

Total Passings2,742

2,736

6

0.2

%

2,721

21

0.8

%

? 1 Gig capable %12

%

10

%

1.7

%

10

%

1.8

%

Note: (1) Company launched multi-year, Gig+ network investment plan. In Q1 2021, completed 45,800 of target 300,000 FTTP upgrades for 2021 and 1.6 million by 2025, with at least 70% Gig coverage.

March 31,

December 31,

QoQ

March 31,

YoY

2021

2020

Change

% Change

2020

Change

% Change

Data and Internet Connections794,224

792,200

2,024

0.3

%

786,125

8,099

1.0

%

Voice Connections768,083

779,590

(11,507

)

(1.5

%)

820,620

(52,537

)

(6.4

%)

Video Connections73,986

76,041

(2,055

)

(2.7

%)

82,633

(8,647

)

(10.5

%)

Consumer Data ARPU$55.24

$54.41

$

0.83

1.5

%

$51.65

$

3.59

7.0

%

Consumer ARPU$75.19

$75.25

$

(0.06

)

(0.1

%)

$73.32

$

1.87

2.6

%

Fiber route network miles (long-haul, metro and FTTP) (2)47,364

46,664

700

1.5

%

37,757

9,607

25.4

%

On-net buildings13,910

13,564

346

2.6

%

12,536

1,374

11.0

%

Note: (2) FTTP 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/20210429005326/en/

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