Q3 2021 Earnings
Oct. 28, 2021
Safe Harbor
The Securities and Exchange Commission ("SEC") encourages companies to disclose forward-looking information so that investors can better understand a
company's future prospects and make informed investment decisions. Certain statements in this communication 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 ability to obtain regulatory approvals required for the Searchlight investment and meet other closing conditions to the investment on a timely basis or at all; 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 Consolidated Communications Holdings, Inc. 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 communication. 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.
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Non-GAAP Measures
This presentation includes certain non-GAAP historical and forward-looking financial measures, including but not limited to "EBITDA," "adjusted
EBITDA," and "total net debt to last twelve month adjusted EBITDA ratio." In addition to providing key metrics for management to evaluate the
Company's performance, we believes these measurements assist investors in their understanding of operating performance and in identifying historical and prospective trends.
A reconciliation of the differences between these non-GAAP financial measures and the most directly comparable financial measures presented in accordance with GAAP are available on the Company's website at https://ir.consolidated.com. Non-GAAP measures are not presented to be replacements or alternatives to the GAAP measures, and investors are urged to consider these non-GAAP measures in addition to, and not in substitution for, measures prepared in accordance with GAAP. Consolidated may present or calculate its non-GAAP measures differently from other companies.
Consolidated has filed a Form 8-K reporting the quarterly results for the third quarter of 2021. The Company's 8-K, Form 10-K, Form 10-Q and other filings should be read in conjunction with this presentation as they contain additional important details on the quarterly results.
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Consolidated's Fiber Build Plan
Consolidated Fiber Upgrade Markets
2021 - 2025 Fiber Build Plan
Passings in thousands
Operating States
Fiber Build Markets
1.6 million passings to be upgraded by 2025,
~1M in Northern New England
70%+ service area to be Gig+ capable by 2025
Majority markets have
one competitor
No competition in 11% of markets
2,000 | 70% | 80% | |||||||||||||
61% | 1,925 | 70% | |||||||||||||
Fiber Expansion | |||||||||||||||
1,500 | 50% | 1,675 | 60% | ||||||||||||
Progress | |||||||||||||||
1,375 | 50% | ||||||||||||||
35% | |||||||||||||||
1,000 | 40% | ||||||||||||||
14% | 18% | 21% | 975 | 30% | |||||||||||
12% | 400 | 400 | |||||||||||||
500 | 10% | 300 | 300 | 20% | |||||||||||
575 | 250 | ||||||||||||||
97 | 494 | ||||||||||||||
2 | 275 | 46 | 321 | 76 | 397 | 10% | |||||||||
0 | 0% | ||||||||||||||
2020 | Q1-21 | Q2-21 | Q3-21 | 2021 | 2022E | 2023E | 2024E | 2025E |
G+ Upgrades | Total Fiber Gig+ Passings | % Gig+ Capable Passings | ||
On track to exceed 300,000 fiber upgrades in 2021
In Q1 2021, the Company launched a multi-year, fiber build plan to upgrade 1.6 million passings or 70% of its service area to Gig+ fiber capable services by 2025. As of Sept. 30, 2021, 219,000 of the target 300,000 passings for 2021 were upgraded to FttP.
Consolidated has ~2.7M total passings across 23 operating states. Fiber Build Plan chart updated quarterly to reflect progress and forecast of planned upgrades.
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Fiber Expansion Plan
Fiber Penetration Target per Cohort
14% | 24% | 33% | ||
12 mos. | 24 mos. | 36 mos. |
See appendix for actual consumer total company FttP - Gig penetration.
Consolidated Fiber Deployment Advantages
- Incumbent position accelerates plan
- Owned or leased local and long-haul fiber network, conduit capacity
- Aerial fiber access to 80% of Northern New England
- Less competitive markets: majority with one wireline competitor
- Experienced teams, contractor resources and strong build partners
Average cost per passing:
$550-600 fiber passing1
- Northern New England: $400-$450/passing
- Includes edge access equipment, labor and fiber components.
$700 cost to connect2
(2) Includes CPE, labor and drop
2021 Capex
Guidance*
$440M to $460M
45% fiber build
35% success based (all customer channels)
20% maintenance & digital transformation
*Outlook updated with Q3 earnings on Oct. 28, 2021.
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Consolidated Communications Holdings Inc. published this content on 02 November 2021 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 02 November 2021 09:28:09 UTC.