solidated munications (US:CNSL)2022-05-05 16:00Investment and Ownership - Searchlight Capital Partners invested an aggregate of $425.0 million, holding approximately 34% of the Company's outstanding common stock as of March 31, 2022[28]. - Searchlight invested an additional $75.0 million and converted the Note into 434,266 shares of Series A Preferred Stock, representing approximately 34% of the Company's outstanding common stock as of March 31, 2022[53]. - As of March 31, 2022, shares of common stock issued to Searchlight represented approximately 34% of the company's outstanding common stock[152]. Financial Performance - Total operating revenues for the quarter ended March 31, 2022, were $300.3 million, a decrease from $324.8 million in the same quarter of 2021, representing a decline of approximately 7.5%[38]. - The net loss for the quarter ended March 31, 2022, was $115.5 million, compared to a net loss of $62.1 million for the same quarter in 2021[50]. - Adjusted EBITDA decreased by $19.4 million or 15% to $107.2 million for the quarter ended March 31, 2022 compared to the same period in 2021[159]. - EBITDA for Q1 2022 was $(23.99) million, a decrease from $56.64 million in Q1 2021[217]. - Cash flows from operating activities were $81.6 million in Q1 2022, a decrease of $16.9 million compared to Q1 2021[221]. Revenue Breakdown - Broadband revenue for the quarter was $65.9 million, slightly up from $65.8 million in the prior year, while video services revenue decreased to $14.4 million from $16.8 million[38]. - Voice services revenues decreased by $2.9 million or 7% primarily due to a 13% decline in access lines for the quarter ended March 31, 2022[166]. - Video services revenues decreased by $2.4 million or 14% due to a 21% decrease in connections as consumers shift to alternative video services[168]. - Data services revenues increased by $0.9 million during the quarter ended March 31, 2022, driven by growth in dedicated Internet access and SD-WAN services[172]. - Subsidies revenues decreased by $10.8 million during Q1 2022 compared to Q1 2021, primarily due to a reduction in federal subsidies support[179]. Expenses and Costs - Cost of services and products decreased by $8.1 million during Q1 2022 compared to Q1 2021, driven by lower access expenses and a 21% decline in video connections[183]. - Selling, general and administrative costs increased by $6.4 million during Q1 2022 compared to Q1 2021, due to higher advertising expenses and increased employee labor costs[184]. - Depreciation and amortization expense decreased by $3.2 million during Q1 2022 compared to Q1 2021, primarily due to a decline in amortization expense for customer relationships[186]. - Interest expense, net of interest income, decreased by $18.9 million during Q1 2022 compared to Q1 2021, due to a reduction in the annual interest rate from refinancing[208]. Asset Sales and Impairments - The Company completed the sale of its non-core rural ILEC business in Ohio for approximately $26.0 million in cash on January 31, 2022[58]. - The Company entered into a definitive agreement to sell its Kansas City operations for estimated cash consideration of approximately $90.4 million, expected to close in the second half of 2022[60]. - An impairment loss of $126.5 million was recognized during the quarter ended March 31, 2022, related to assets classified as held for sale[64]. - The company completed the sale of non-core assets in Ohio for cash proceeds of $26.0 million[226]. Capital Expenditures and Investments - Capital expenditures in Q1 2022 were $156.5 million, compared to $76.0 million in Q1 2021, with expected total capital expenditures for 2022 between $475.0 million and $495.0 million[225]. - Cash used in investing activities was $104.6 million in Q1 2022, primarily for capital expenditures and short-term investments[224]. Debt and Financing - Long-term debt, excluding finance leases, had a carrying value of $2,139,963 thousand as of March 31, 2022, with a fair value of $1,967,039 thousand[76]. - The company has a senior secured credit facility with term loans totaling $1,250 million and a revolving loan facility of $250 million[80]. - The weighted-average interest rate on outstanding borrowings under the credit facility was 4.25% as of March 31, 2022[88]. - The company issued $400 million of 5.00% Senior Notes due 2028, with proceeds used to repay $397 million of Term Loans[93]. Taxation - The effective tax rate for the quarters ended March 31, 2022, and 2021, was 8.2% and 7.9%, respectively[129]. - The company recorded a current tax expense increase of $20.1 million related to an $83.7 million impairment loss of noncash goodwill that is not deductible for tax purposes[129]. - The effective tax rate for the quarter ended March 31, 2022, was approximately 27.2%, compared to 26.0% for the same quarter in 2021[132]. Customer Metrics - Consumer customers decreased by 37,294 or 7% to 507,767 as of March 31, 2022 compared to 545,061 in 2021[162]. - Fiber Gig+ capable connections increased by 19,317 or 26% to 93,812 as of March 31, 2022 compared to 74,495 in 2021[162]. - Total voice connections decreased by 9% as of March 31, 2022, compared to 2021[146]. - Total video connections decreased by 21% as of March 31, 2022, compared to 2021[147]. Future Plans and Expectations - The Company plans to upgrade approximately 1.6 million passings over five years to enable multi-Gig capable services, with 400,000 homes targeted for upgrade in 2022[28]. - The company intends to use proceeds from asset sales to further its fiber expansion plans[153]. - The company expects to contribute approximately $20.5 million to its Pension Plans and $8.2 million to its Post-retirement Plans in 2022[125]. - The company expects a reduction in federal subsidies of approximately $42.2 million annually as of January 1, 2022[148].