solidated munications (CNSL) - 2021 Q3 - Quarterly Report

Investment and Financing - Searchlight Capital Partners committed to invest up to $425.0 million, enabling the company to enhance its fiber infrastructure and upgrade approximately 1.6 million passings over the next five years[27]. - The company has received a total investment commitment of$425 million from Searchlight, with $350 million already invested, representing approximately 24.5$75 million, is expected to close later this year, pending regulatory approvals[58][60]. - The company completed a refinancing of long-term debt, issuing $2,250 million in new secured debt[155]. - The company issued$400 million of 5.00% Senior Notes due 2028 on March 18, 2021, to repay a portion of outstanding Term Loans[93]. - The company incurred a loss of $12.0 million on the extinguishment of debt related to the repayment of$397.0 million of outstanding term loans during the nine months ended September 30, 2021[211]. Revenue and Earnings - Total operating revenues for the quarter ended September 30, 2021, were $318.584 million, a decrease from$327.066 million in the same quarter of 2020[44]. - For the quarter ended September 30, 2021, the company reported a net loss of $4.481 million compared to a net income of$14.582 million for the same quarter in 2020[56]. - The diluted earnings per share (EPS) for the quarter was $(0.05), a decrease from$0.20 in the same quarter of the previous year[56]. - Adjusted EBITDA for the quarter was $127.4 million, down$4.8 million (4%) from $132.2 million in the previous year[165]. - EBITDA for Q3 2021 was$117.4 million, down from $131.0 million in Q3 2020; nine-month EBITDA was$245.9 million, compared to $397.3 million in the same period in 2020[222]. - Adjusted EBITDA for Q3 2021 was$127.4 million, slightly down from $132.2 million in Q3 2020; nine-month adjusted EBITDA was$380.7 million, compared to $396.9 million in 2020[222]. Assets and Liabilities - Accounts receivable, net, increased to$133.524 million as of September 30, 2021, compared to $119.076 million as of September 30, 2020[45]. - Contract liabilities rose to$62.210 million as of September 30, 2021, from $56.086 million as of September 30, 2020[45]. - As of September 30, 2021, the company held$154.963 million in short-term investments, primarily in held-to-maturity debt securities[66]. - Long-term debt increased to $2.115 billion as of September 30, 2021, compared to$1.933 billion at December 31, 2020[81]. - The fair value of long-term debt, excluding finance leases, was $2.225 billion as of September 30, 2021, compared to$2.040 billion at December 31, 2020[78]. - The estimated fair value of the contingent payment obligation (CPR) was $105.8 million as of September 30, 2021, down from$123.2 million at the end of 2020[75]. Operational Performance - The company plans to upgrade approximately 300,000 homes and small businesses in 2021 as part of its fiber build plan[27]. - The company plans to upgrade approximately 1.6 million passings over five years to enable multi-Gig capable services[147]. - The company operates an advanced fiber network spanning approximately 50,000 fiber route miles across a 23-state service area, focusing on broadband and business communications[142]. - Commercial and carrier services are the largest source of operating revenues and are expected to be key growth areas in the future[143]. - Total video connections decreased by 14% as of September 30, 2021, compared to the same date in 2020[148]. - Total voice connections decreased by 7% as of September 30, 2021, compared to 2020[149]. Tax and Regulatory Matters - The effective tax rate for the quarter ended September 30, 2021, was 1,047.9%, significantly higher than 23.9% for the same quarter in 2020, primarily due to non-cash adjustments related to the Searchlight and Ohio transactions[131]. - The company has reserved $0.8 million and$1.6 million for potential additional tax liabilities related to ongoing audits for its subsidiaries[135]. - The company does not expect any material change in its unrecognized tax benefits during the remainder of 2021, which stood at $4.9 million as of September 30, 2021[125]. Impairments and Losses - The company recognized an impairment loss of$5.7 million during the quarter and nine months ended September 30, 2021, related to assets held for sale[36]. - The company recognized a loss of $99.6 million on the increase in the fair value of the contingent payment right (CPR) during the nine months ended September 30, 2021[63]. - The company recorded a$5.7 million impairment loss related to noncash goodwill during the quarter due to the Ohio transaction[218]. Cash Flow and Investments - Cash flows from operating activities for the nine months ended September 30, 2021, were $295.98 million, compared to$297.35 million in the same period in 2020[225]. - Cash used in investing activities for the nine months ended September 30, 2021, was $(493.13) million, significantly higher than$(144.81) million in 2020[225]. - Cash provided by financing activities for the nine months ended September 30, 2021, was $140.27 million, compared to$(65.21) million in the same period in 2020[225].