solidated munications (US:CNSL)2022-08-04 16:00Investment and Financing - Searchlight Capital Partners invested an aggregate of $425.0 million, holding approximately 34% of the Company's outstanding common stock as of June 30, 2022[28]. - Searchlight Investment committed to invest up to $425.0 million, with $350.0 million already invested for approximately 8% of the Company's common stock[54]. - The company issued $750 million of 6.50% Senior Notes due 2028, priced at par, with interest payable semi-annually[93]. - The company also issued $400 million of 5.00% Senior Notes due 2028, with proceeds used to repay $397 million of Term Loans[94]. - The interest rate on Term Loans was reduced to 3.50% plus LIBOR following the second amendment to the Credit Agreement[88]. - The Note from Searchlight bore interest at 9.0% per annum, with a term of 10 years due on October 1, 2029[59]. Revenue and Financial Performance - For the quarter ended June 30, 2022, total operating revenues were $298.4 million, a decrease of 6.8% from $320.4 million in the same quarter of 2021[41]. - Adjusted EBITDA decreased by $19.2 million (15%) to $107.5 million for the quarter ended June 30, 2022, compared to $126.7 million in the same period of 2021[169]. - The Company recognized previously deferred revenues of $122.6 million and $113.4 million for the quarters ended June 30, 2022 and 2021, respectively[44]. - The company recognized an impairment loss of $126.5 million during the six months ended June 30, 2022, related to assets classified as held for sale[66]. - Net loss attributable to common shareholders for the quarter ended June 30, 2022, was $(11,517) thousand, compared to $(55,356) thousand for the same period in 2021, representing a significant improvement[53]. Operating Metrics - Broadband revenue for the quarter was $67.6 million, slightly down from $68.0 million year-over-year, while voice services revenue decreased from $40.2 million to $36.6 million[41]. - The company upgraded approximately 142,300 and 226,000 passings during the quarter and six months ended June 30, 2022, respectively, and added approximately 9,600 and 17,300 consumer fiber Gig-capable subscribers[149]. - Total voice connections decreased by 9% as of June 30, 2022, compared to 2021, while total video connections decreased by 22% in the same period[152][153]. - Consumer customers decreased by 29,456 (6%) to 505,614 as of June 30, 2022, compared to 535,070 in 2021[171]. - Fiber Gig+ capable connections increased by 25,934 (33%) to 103,455 as of June 30, 2022, compared to 77,521 in 2021[171]. Expenses and Costs - Total operating expenses decreased by $6.5 million (2%) to $283.9 million for the quarter ended June 30, 2022, compared to $290.4 million in the same period of 2021[1]. - Selling, general and administrative costs increased by $6.5 million and $12.9 million during the quarter and six months ended June 30, 2022, respectively, due to increased advertising and employee labor costs[196]. - Depreciation and amortization expense decreased by $3.6 million and $6.8 million during the quarter and six months ended June 30, 2022, respectively, primarily due to a decline in amortization expense for customer relationships[198]. - Interest expense, net of interest income, decreased by $15.2 million and $34.1 million during the quarter and six months ended June 30, 2022, respectively, compared to the same periods in 2021[219]. Tax and Regulatory Matters - The effective tax rate for the quarter ended June 30, 2022, was 45.8%, compared to (10.9)% for the same quarter in 2021, indicating significant fluctuations in tax expenses[132]. - Unrecognized tax benefits as of June 30, 2022, were $4.9 million, with a net amount of $4.7 million that could impact the effective tax rate if recognized[129]. - The company recorded a net periodic post-retirement cost of $513 thousand for the quarter ended June 30, 2022, up from $462 thousand in the same quarter of 2021[127]. - The company has reserved $0.8 million and $1.6 million for potential additional tax liabilities related to ongoing audits for its subsidiaries[138]. Strategic Initiatives and Sales - The Company plans to upgrade approximately 1.6 million passings over five years, with 400,000 homes and small businesses targeted for upgrades in 2022[28]. - The sale of five limited wireless partnership interests to Cellco Partnership is expected to close by the end of 2022 for an aggregate purchase price of $490.0 million, with a pre-tax gain of approximately $390.0 million anticipated[29][31]. - 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[60]. - An additional agreement was made to sell the Kansas City operations for estimated cash consideration of approximately $91.7 million, expected to close by the end of 2022[62]. - The strategic investment with Searchlight Capital Partners L.P. provided the company with $425.0 million, enabling acceleration of fiber expansion plans and enhancements to its broadband services[156].