solidated munications (US:CNSL)2023-03-05 16:00Financial Performance - The company reported total operating revenues of $1,191.3 million for 2022, a decrease from $1,282.2 million in 2021, with broadband services contributing $272.1 million, or 22.8% of total revenues[32]. - The company’s voice services generated $144.8 million in revenue, accounting for 12.2% of total revenues, down from $160.7 million in 2021[32]. - The company reported income from wireless partnerships of $23.5 million, $41.8 million, and $40.7 million for the years ended December 31, 2022, 2021, and 2020, respectively[57]. - Revenue from contracts with customers for the year ended December 31, 2022, was $119,675,000, a decrease from $133,362,000 in 2021, representing a decline of approximately 10.3%[184]. - Contract assets increased to $25,322,000 in 2022 from $23,893,000 in 2021, reflecting a growth of about 5.9%[184]. - Contract liabilities decreased from $60,503,000 in 2021 to $54,537,000 in 2022, indicating a reduction of approximately 9.8%[184]. Network Expansion and Upgrades - The company has upgraded approximately 403,000 homes and small businesses to fiber-to-the-home/premise (FTTP) in 2022, following 330,000 upgrades in 2021, with a target of at least 225,000 upgrades in 2023[40]. - The company launched its largest-ever fiber infrastructure project in 2021, aiming to upgrade around 1.6 million premises over six years to enable multi-Gig symmetrical speeds[40]. - Company plans to upgrade approximately 1.6 million passings to fiber by 2026, with 403,000 and 330,000 passings upgraded in 2022 and 2021 respectively[110]. - The upgraded network is expected to provide up to 10 Gbps symmetrical broadband, enhancing average revenue per user (ARPU) and customer retention[110]. - The fiber-optic network consisted of over 57,800 route-miles as of December 31, 2022, including approximately 17,000 miles of FTTP deployments[85]. Customer Base and Market Position - As of December 31, 2022, the company had 484,669 consumer customers, a decrease from 516,949 in 2021 and 554,763 in 2020, indicating a trend in customer attrition[43]. - The company aims to transition its customer base from legacy TDM-based products to fiber and IP-based data and transport services, focusing on high revenue visibility projects[63]. - The company plans to expand its Fidium Fiber brand further into its footprint and to small business customers, enhancing its competitive position in the market[40]. - The company continues to face significant competition from various providers, including cable, wireless, and fiber data providers[113]. Strategic Partnerships and Investments - The company’s partnership with Searchlight aims to pursue targeted investments and growth opportunities in broadband and fiber infrastructure[30]. - Searchlight committed to invest up to $425 million in the Company, with $350 million already invested for approximately 8% of common stock[190]. - The Note issued to Searchlight bore interest at 9.0% per annum, with a term of 10 years, maturing on October 1, 2029[191]. Regulatory and Funding Initiatives - The Rural Digital Opportunity Fund (RDOF) is a $20.4 billion initiative aimed at providing broadband speeds of 25 Mbps downstream and 3 Mbps upstream to underserved areas in the U.S.[123]. - Consolidated won bids for 246 census block groups across seven states during the RDOF auction, which took place from October 29 to November 24, 2020[123]. - Consolidated began receiving RDOF funding in January 2022, following the approval of its application on December 14, 2021[125]. - Annual support from FCC's CAF Phase II funding was $48.1 million through 2021, with obligations to serve approximately 124,500 locations[105]. Operational Changes and Challenges - The company completed the sale of its Ohio operations and Kansas City operations, generating operating revenues of $8.9 million and $51.3 million for the year ended December 31, 2021, which accounted for 0.7% and 4.0% of consolidated operating revenues respectively[5]. - The company completed the sale of its limited partnership interests for an aggregate purchase price of $490.0 million, classified as discontinued operations in its financial statements[31]. - The company completed the sale of its wireless partnerships for an aggregate purchase price of $490 million on September 13, 2022, intending to use the proceeds to support fiber expansion plans[82]. - The company reported a significant reduction in consumer data connections due to the sale of its operations, with approximately 3,325 fiber and 14,505 DSL/Copper connections lost in 2022[5]. - The company anticipates continued erosion in voice connections due to competition from alternative technologies, including its own VoIP product[133]. Employee and Workplace Initiatives - Approximately 49% of employees were covered by collective bargaining agreements as of December 31, 2022[115]. - Company aims to create a diverse and inclusive workplace, offering training on discrimination and harassment prevention[97]. - Company is committed to enhancing customer experience through digital transformation projects and improved customer service capabilities[90]. Financial Health and Asset Management - As of December 31, 2022, the carrying value of goodwill was $929.6 million, a decrease of $83.6 million from the previous year due to a divestiture[166]. - The total plant in service was valued at $4,756.7 million as of December 31, 2022, with accumulated depreciation of $2,754.6 million[161]. - The Company did not recognize any goodwill impairment in 2022, 2021, or 2020, indicating stable asset valuations[198]. - The total assets of the Company amounted to $26,048,000, with current assets at $137,000 and property, plant, and equipment at $9,584,000[194]. - The Company utilizes derivative financial instruments to manage interest rate risks, converting a portion of floating-rate debt to fixed-rate[201]. - Cash flows from hedging activities are classified under the same category as the cash flows from the hedged items in the consolidated statement of cash flows[202].