EXHIBIT 99.1
Consolidated Communications Holdings Reports Second Quarter 2009 Results
* IPTV additions exceeded 1,500 for the quarter with 41% growth year-
over-year.
* North Pittsburgh systems integration completed on schedule and on
budget.
* Pair bonding rolled out with 40,000 additional homes to be passed
by year-end.
* Strong quarter of cash available for dividends.
MATTOON, Ill., Aug. 6, 2009 (GLOBE NEWSWIRE) -- Consolidated Communications Holdings, Inc. (Nasdaq:CNSL) reported results for the second quarter ended June 30, 2009.
Second quarter financial summary:
* Revenue was $102.0 million.
* Net cash provided by operations was $28.6 million.
* Adjusted EBITDA was $48.1 million.
* Dividend payout ratio was 53.3%.
"We are pleased with our overall second quarter results and our best-ever quarterly payout ratio," said Bob Currey, president and CEO. "Operating metrics were in-line with our expectations with access line losses continuing to moderate, DSL adds seasonally soft and IPTV maintaining strong growth."
"In addition to delivering solid results, we accomplished two major corporate initiatives in the quarter. First, we completed the final phase of the North Pittsburgh systems integration on schedule and on budget. Second, we introduced pair bonding technology adding 5,000 homes passed in the quarter and setting us up to pass another 35,000 homes with IPTV over the next two quarters."
"Finally, with line losses improving for the third quarter in a row and our broadband products continuing to grow at a solid pace, we remain confident that we are well positioned to continue to execute on our plan. We are investing in new technologies and common platforms, while also introducing new products in our continued effort to offer high value service and bundles to our customers," Currey concluded.
Operating Statistics at June 30, 2009, Compared to June 30, 2008.
* Total connections were 449,925, a decrease of 5,356 or 1.2%.
* Total local access lines were 254,593, a decrease of 22,200, or
8.0%.
* ILEC Broadband connections were 115,387, an increase of 14,700, or
14.6%.
* DSL subscribers were 95,656, an increase of 9,081, or 10.5%.
* IPTV subscribers were 19,731, an increase of 5,619, or 39.8%.
* ILEC VOIP lines were 7,883, an increase of 3,795, or 92.8%.
* CLEC access line equivalents were 72,062, a decrease of 1,651, or
2.2%.
Steve Childers, Consolidated's Chief Financial Officer, stated, "During the quarter, we continued to focus on improving our cost structure and combined with the added efficiency gained from finalizing the North Pittsburgh systems integration, we had a net headcount reduction of 28 in the quarter, resulting in severance expenses of $0.9 million of which $0.6 million qualified as an add-back to adjusted EBITDA. Also, in the quarter, we resolved an outstanding access dispute that had been reserved for as part of the North Pittsburgh acquisition. The result of the settlement was a $1.8 million non-cash benefit to other income. Finally, as of the end of the second quarter, we have funded $9.1 million of the $11.0 million full year estimated cash pension contributions."
Cash Available to Pay Dividends
For the quarter, cash available to pay dividends, or CAPD, was $21.6 million and the payout ratio was 53.3%. At June 30, 2009, cash and cash equivalents were $20.0 million. The Company made capital expenditures of $10.2 million during the quarter.
Financial Highlights for the Second Quarter Ended June 30, 2009
* Revenues were $102.0 million, compared to $106.4 million in the
second quarter of 2008. Declines in Local Calling Services, Long
Distance, and Network Access were partially offset by increases in
Data and Internet Services and Other Operations. Local Calling
Services declined $2.3 million due to the loss of access lines.
Network Access revenues were down $2.7 million due to the loss of
access lines, lower minutes of use and a rate reduction associated
with our July 1, 2008 Price Caps election for Illinois and Texas.
Data and Internet revenues increased $1.5 million due to the
continued growth in DSL, IPTV and VOIP services.
* Depreciation and amortization was $21.0 million, compared to $22.4
million in the same period last year. The $1.4 million decline was
primarily attributable to our election to discontinue FAS 71
accounting for our regulated fixed assets at year end 2008.
* Income from operations was $18.9 million, compared to $21.1 million
in the second quarter of 2008. The decrease is mainly due to the
decline in revenues, $1.5 million in incremental pension and OPEB
expense and $0.9 million in severance associated with our headcount
reductions, net of the $1.4 million decrease in depreciation and
amortization.
* Interest expense, net was $14.5 million, compared to $16.0 million
in the same quarter last year. The decrease is driven by an
overall lower weighted average cost of debt due primarily to the
April 1, 2008 redemption of our 9 3/4 % Senior Notes.
* Other income, net was $8.5 million, compared to $4.7 million for
the same period in 2008. As mentioned, we recognized a $1.8
million benefit for resolution of an access dispute. In addition,
we recognized $4.5 million in cash distributions from wireless
partnerships compared to $3.4 million for the second quarter of
2008.
* Net income attributable to common stockholders was $7.5 million
versus net income of $0.2 million in the second quarter of 2008.
The second quarter of 2008 included $5.2 million in after tax
charges associated with the redemption of our 9 3/4 % Senior
Notes. "Adjusted net income" excludes this and certain other items
in the manner described in the table provided in this release. On
that basis, "adjusted net income" was $7.9 million for the second
quarter of 2009, compared to $6.4 million in the same quarter of
2008.
* Diluted net income per common share was $0.25, compared to a
diluted net income per common share of $0.01 in the same quarter of
2008. "Adjusted diluted net income per share" excludes certain
items in the manner described in the table provided in this
release. On that basis, "adjusted diluted net income per share"
for the second quarter ended June 30, 2009 was $0.27 versus $0.22
in the second quarter of 2008.
* Adjusted EBITDA was $48.1 million, compared to $48.3 million for
the same period in 2008.
* Net cash provided from operating activities was $28.6 million,
compared to $17.1 million for the second quarter in 2008.
* The total net debt to last twelve month adjusted EBITDA coverage
ratio is 4.6 times to 1.0.
Financial Highlights for the Six Months Ended June 30, 2009
* Revenues were $203.8 million, compared to $211.9 million in the
same period of 2008. Declines in Local Calling Services, Long
Distance, and Network Access were partially offset by increases in
Data and Internet Services and Subsidies. Local Calling Services
declined $4.5 million due to the loss of access lines. Network
Access revenues were down $5.3 million due to the loss of access
lines, lower minutes of use and a rate reduction associated with
our July 1, 2008 Price Caps election for Illinois and Texas. Data
and Internet revenues were up $3.5 million due to the continued
growth in DSL, IPTV and VOIP services.
* Net income was $10.8 million versus $3.9 million in the prior year
period. The difference was primarily driven by the $5.2 million in
after tax charges associated with the redemption of our 9 3/4 %
Senior Notes in the second quarter 2008 and the $1.8 million
benefit this quarter for the aforementioned access settlement.
* Diluted net income per common share was $0.37, compared to a
diluted net income per common share of $0.13 in the same period of
2008. "Adjusted diluted net income per share" excludes certain
items in the manner described in the table provided in this
release. On that basis, "adjusted diluted net income per share"
was $0.45 versus $0.37 for the six months ended June 30, 2008.
* Adjusted EBITDA was $93.4 million, compared to $97.4 million for
the same period in 2008. The decrease was primarily driven by
lower revenue and $3.1 million in incremental pension and OPEB
expense.
* Net cash provided from operating activities was $48.0 million,
compared to $42.2 million for the six month period in 2008.
Financial Guidance
For 2009, the Company is updating its full year guidance with respect to capital expenditures, cash interest, and cash taxes. Capital expenditures are now expected to be in the range of $41.0 million to $42.0 million versus previous guidance of $42.0 million to $43.0 million; cash interest expense is now expected to be in the range of $56.0 million to $57.5 million compared to prior guidance of $58.0 million to $61.0 million; and when including the bonus depreciation from the stimulus plan, cash income taxes are now expected to be in the range of $9.0 million to $11.0 million versus previous guidance of $11.0 million to $13.0 million.
Dividend Payments
On August 3, 2009, the Company's board of directors declared its next quarterly dividend of $0.38738 per common share, which is payable on November 1, 2009 to stockholders of record at the close of business on October 15, 2009.
Conference Call Information
The Company will host a conference call today at 11:00 a.m. Eastern Time / 10:00 a.m. Central Time to discuss second quarter earnings and developments in the business. The call is being webcast and can be accessed from the "Investor Relations" section of the Company's website at http://www.consolidated.com. The webcast will also be archived on the Company's website. If you do not have internet access, the conference call dial-in number is 866-395-2185 with pass code 19357566. International parties can access the call by dialing 706-758-1344. A telephonic replay of the conference call will also be available starting two hours after completion of the call until August 20, 2009 at midnight Eastern Time. To hear the replay, parties in the United States and Canada should call 800-642-1687 and international parties should call 706-645-9291.
Use of Non-GAAP Financial Measures
This press release, as well as the conference call, includes disclosures regarding "EBITDA", "adjusted EBITDA", "cash available to pay dividends", "total net debt to last twelve month adjusted EBITDA coverage ratio", "adjusted diluted net income," and "adjusted diluted net income per share", all of which are non-GAAP financial measures. Accordingly, they should not be construed as alternatives to net cash from operating or investing activities, cash and cash equivalents, cash flows from operations, net income (loss) or net income (loss) per share as defined by GAAP and are not, on their own, necessarily indicative of cash available to fund cash needs as determined in accordance with GAAP. In addition, not all companies use identical calculations, and the non-GAAP financial measures may not be comparable to other similarly titled measures of other companies. A reconciliation of the differences between these non-GAAP financial measures and the most directly comparable financial measures presented in accordance with GAAP is included in the tables that follow.
Adjusted EBITDA is comprised of EBITDA, adjusted for certain items as permitted or required by the lenders under the credit facility in place at the end of each quarter in the periods presented. The tables that follow include an explanation of how adjusted EBITDA is calculated for each of the periods presented.
EBITDA is defined as net earnings (loss) before interest expense, income taxes, depreciation and amortization on an historical basis. We believe net cash provided by operating activities is the most directly comparable financial measure to EBITDA under GAAP. EBITDA is a non-GAAP financial measure.
Cash available to pay dividends represents adjusted EBITDA plus cash interest income less (1) cash interest expense, (2) capital expenditures, and (3) cash taxes.
We present adjusted EBITDA and cash available to pay dividends for several reasons. Management believes adjusted EBITDA and cash available to pay dividends are useful as a means to evaluate our ability to fund our estimated uses of cash (including interest on our debt) and pay dividends. In addition, we have presented adjusted EBITDA and cash available to pay dividends to investors in the past because they are frequently used by investors, securities analysts and other interested parties in the evaluation of companies in our industry, and management believes presenting them here provides a measure of consistency in our financial reporting. Adjusted EBITDA and cash available to pay dividends, referred to as Available Cash in our credit agreement, are also components of the restrictive covenants and financial ratios contained in the agreements governing our debt that require us to maintain compliance with these covenants and limit certain activities, such as our ability to incur debt and to pay dividends. The definitions in these covenants and ratios are based on adjusted EBITDA and cash available to pay dividends after giving effect to specified charges. We present other information related to the non-GAAP financial measures, specifically "total net debt to last twelve month adjusted EBITDA coverage ratio," principally to put these other measures in context and facilitate comparisons by investors, security analysts and others; this ratio differs in certain respects from the similar ratio used in our credit agreement. As a result, management believes the presentation of adjusted EBITDA and cash available to pay dividends, as supplemented by "total net debt to last twelve months adjusted EBITDA coverage ratio," provides important additional information to investors. In addition, adjusted EBITDA and cash available to pay dividends provide our board of directors with meaningful information to determine, with other data, assumptions and considerations, our dividend policy and our ability to pay dividends under the re strictive covenants in the agreements governing our debt and to measure our ability to service and repay debt.
These non-GAAP financial measures have certain shortcomings. In particular, adjusted EBITDA does not represent the residual cash flows available for discretionary expenditures, since items such as debt repayment and interest payments are not deducted from such measure. Similarly, while we may generate cash available to pay dividends, we are not required to use any such cash to pay dividends, and the payment of any dividends is subject to declaration by our board of directors, compliance with applicable law and the terms of our credit agreement.
Because adjusted EBITDA is a component of the Dividend Payout Ratio and the ratio of total net debt to last twelve month adjusted EBITDA, these measures are also subject to the material limitations discussed above. In addition, the ratio of total net debt to last twelve month adjusted EBITDA is subject to the risk that we may not be able to use the cash on the balance sheet to reduce our debt on a dollar-for-dollar basis. Management believes these ratios are useful as a means to evaluate our ability to incur additional indebtedness in the future. We present the non-GAAP measures adjusted net income and adjusted diluted net income per share, because our net income and net income per share are regularly affected by items that occur at irregular intervals or are non-cash items. We believe that disclosing these measures assists investors, securities analysts and other interested parties in evaluating both our company over time and the relative performance of the companies in our industry.
About Consolidated
Consolidated Communications Holdings, Inc. is an established rural local exchange company providing voice, data and video services to residential and business customers in Illinois, Texas and Pennsylvania. Each of the operating companies has been operating in its local market for over 100 years. With approximately 254,593 ILEC access lines, 72,062 Competitive Local Exchange Carrier (CLEC) access line equivalents, 95,656 DSL subscribers, and 19,731 IPTV subscribers, Consolidated Communications offers a wide range of telecommunications services, including local and long distance service, custom calling features, private line services, high-speed Internet access, digital TV, carrier access services, and directory publishing.
Safe Harbor
Any statements contained in this press release other than statements of historical fact, including statements about management's beliefs and expectations, are forward-looking statements and should be evaluated as such. These statements are made on the basis of management's views and assumptions regarding future events and business performance. Words such as "estimate," "believe," "anticipate," "expect," "intend," "plan," "target," "project," "should," "may," "will" and similar expressions are intended to identify forward-looking statements. Forward-looking statements (including oral representations) involve risks and uncertainties that may cause actual results to differ materially from any future results, performance or achievements expressed or implied by such statements. These risks and uncertainties include economic and financial market conditions generally and economic conditions in Consolidated's service areas; changes in the valuation of pension plan assets, as well as a number of other factors related to our business, including various risks to shareholders of not receiving dividends and risks to Consolidated's ability to pursue growth opportunities if Consolidated continues to pay dividends according to the current dividend policy; various risks to the price and volatility of Consolidated's common stock; the substantial amount of debt and Consolidated's ability to incur additional debt in the future; Consolidated's need for a significant amount of cash to service and repay the debt and to pay dividends on the common stock; restrictions contained in the debt agreements that limit the discretion of management in operating the business; the ability to refinance the existing debt as necessary; regulatory changes, including changes to subsidies, rapid development and introduction of new technologies and intense competition in the telecommunications industry; risks associated with Consolidated's possible pursuit of acquisitions; system failures; losses of large customers or government contracts; risks associa ted 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; telecommunications carriers disputing and/or avoiding their obligations to pay network access charges for use of Consolidated's 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. These and other risks and uncertainties are discussed in more detail in Consolidated's filings with the Securities and Exchange Commission, including our reports on Form 10-K and Form 10-Q. Many of these risks are beyond management's ability to control or predict. All forward-looking statem ents attributable to Consolidated or persons acting on behalf of us are expressly qualified in their entirety by the cautionary statements and risk factors contained in this press release and Consolidated's filings with the Securities and Exchange Commission. Because of these risks, uncertainties and assumptions, you should not place undue reliance on these forward-looking statements. 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 Securities and Exchange Commission, Consolidated does not undertake any obligation to update or review any forward-looking information, whether as a result of new information, future events or otherwise.
Consolidated Communications Holdings, Inc.
Condensed Consolidated Balance Sheets
(Dollars in thousands)
(Unaudited)
June 30, December 31,
2009 2008
------------ ------------
ASSETS
Current assets:
Cash and cash
equivalents $ 20,025 $ 15,471
Accounts receivable, net 46,229 45,092
Prepaid expenses and other current assets 16,715 18,013
------------ ------------
Total current assets 82,969 78,576
Property, plant and equipment, net 388,058 400,286
Intangibles, net and other assets 752,835 762,764
------------ ------------
Total assets $1,223,862 $ 1,241,626
============ ============
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Current portion of capital lease
obligation $ 813 $ 922
Accounts payable 10,790 12,336
Accrued expenses and other current
liabilities 61,999 58,034
------------ ------------
Total current liabilities 73,602 71,292
Capital lease obligation less current
portion -- 344
Long-term debt 880,000 880,000
Other long-term liabilities 198,405 214,705
------------ ------------
Total liabilities 1,152,007 1,166,341
------------ ------------
Stockholders' equity:
Common stock, $0.01 par value 295 295
Paid in capital 118,010 129,284
Accumulated other comprehensive loss (52,178) (59,479)
------------ ------------
Total Consolidated Communications Holdings,
Inc. stockholders' equity: 66,127 70,100
Noncontrolling interest 5,728 5,185
------------ ------------
Total equity 71,855 75,285
------------ ------------
Total liabilities and stockholder's equity $ 1,223,862 $ 1,241,626
============ ============
Consolidated Communications Holdings, Inc.
Condensed Consolidated Statements of Operations
(Dollars in thousands, except per share amounts)
(Unaudited)
Three Months Ended Six Months Ended
June 30, June 30,
------------------------- -------------------------
2009 2008 2009 2008
------------ ------------ ------------ ------------
Revenues $ 102,042 $ 106,444 $ 203,752 $ 211,858
Operating
expenses:
Cost of services
and products 36,344 36,108 72,444 69,971
Selling, general
and
administrative
expenses 25,850 26,911 53,727 55,055
Depreciation and
amortization 20,981 22,350 42,658 45,221
------------ ------------ ------------ ------------
Income from
operations 18,867 21,075 34,923 41,611
Other income
(expense):
Interest
expense, net (14,549) (15,984) (29,019) (34,038)
Loss on
extinguishment
of debt -- (9,224) -- (9,224)
Other income,
net 8,527 4,716 13,024 9,093
------------ ------------ ------------ ------------
Income before
income taxes 12,845 583 18,928 7,442
Income tax expense 5,186 270 7,572 3,148
------------ ------------ ------------ ------------
Net income 7,659 313 11,356 4,294
Less: Net income
attributable to
noncontrolling
interest 136 133 543 405
------------ ------------ ------------ ------------
Net income
attributable to
Consolidated
Communications
Holdings, Inc. $ 7,523 $ 180 $ 10,813 $ 3,889
============ ============ ============ ============
Diluted net income
attributable to
Consolidated
Communications
Holdings, Inc.
per common share $ 0.25 $ 0.01 $ 0.37 $ 0.13
============ ============ ============ ============
Consolidated Communications Holdings, Inc.
Condensed Consolidated Statements of Cash Flows
(Dollars in thousands)
(Unaudited)
Three Months Ended Six Months Ended
June 30 June 30
------------------------- -------------------------
2009 2008 2009 2008
------------ ------------ ------------ ------------
OPERATING
ACTIVITIES
Net income $ 7,659 $ 313 $ 11,356 $ 4,294
Adjustments to
reconcile net
income to cash
provided by
operating
activities:
Depreciation
and amortiza-
tion 20,981 22,350 42,658 45,221
Non-cash stock
compensation 499 476 932 860
Loss on exting-
uishment of
debt -- 9,224 -- 9,224
Other adjust-
ments, net 1,518 (1,071) 75 (3,163)
Changes in
operating assets
and liabilities,
net (2,013) (14,145) (7,023) (14,256)
------------ ------------ ------------ ------------
Net cash
provided by
operating
activities 28,644 17,147 47,998 42,180
------------ ------------ ------------ ------------
INVESTING
ACTIVITIES
Proceeds from
sale of assets -- -- 300 --
Capital
expenditures (10,218) (13,001) (20,375) (26,286)
------------ ------------ ------------ ------------
Net cash used
for
investing
activities (10,218) (13,001) (20,075) (26,286)
------------ ------------ ------------ ------------
FINANCING
ACTIVITIES
Proceeds from
long-term
obligations -- 120,000 -- 120,000
Payments made
on long-term
obligations (229) (136,587) (453) (136,833)
Payment of
deferred
financing
costs -- (59) -- (240)
Purchase and
retirement of
common stock -- -- (9) (8)
Dividends on
common stock &
participating
ecurities (11,519) (11,362) (22,907) (22,721)
------------ ------------ ------------ ------------
Net cash used
in financing
activities (11,748) (28,008) (23,369) (39,802)
------------ ------------ ------------ ------------
Net Increase in
cash and cash
equivalents 6,678 (23,862) 4,554 (23,908)
Cash and cash
equivalents at
beginning of
period 13,347 34,295 15,471 34,341
------------ ------------ ------------ ------------
Cash and cash
equivalents at
end of period $ 20,025 $ 10,433 $ 20,025 $ 10,433
============ ============ ============ ============
Consolidated Communications Holdings, Inc.
Consolidated Revenue by Category
(Dollars in thousands)
(Unaudited)
Three Months Ended Six Months Ended
June 30, June 30,
------------------------- -------------------------
2009 2008 2009 2008
------------ ------------ ------------ ------------
Telephone
Operations
Local calling
services $ 24,260 $ 26,533 $ 48,987 $ 53,483
Network access
services 22,143 24,811 44,123 49,442
Subsidies 13,418 13,395 27,536 27,194
Long distance
services 5,402 6,252 10,890 12,552
Data and
Internet
services 16,704 15,209 33,105 29,610
Other services 9,217 9,722 18,197 18,910
------------ ------------ ------------ ------------
Total Telephone
Operations 91,144 95,922 182,838 191,191
Other Operations 10,898 10,522 20,914 20,667
------------ ------------ ------------ ------------
Total operating
revenues $ 102,042 $ 106,444 $ 203,752 $ 211,858
============ ============ ============ ============
Consolidated Communications Holdings, Inc.
Schedule of Adjusted EBITDA Calculation
(Dollars in thousands)
(Unaudited)
Three Months Ended Six Months Ended
June 30, June 30,
------------------------- -------------------------
2009 2008 2009 2008
------------ ------------ ------------ ------------
EBITDA:
Net cash provided
by operating
activities $ 28,644 $ 17,147 $ 47,998 $ 42,180
Adjustments:
Compensation
from restricted
share plan (499) (476) (932) (860)
Loss on
extinguishment
of debt -- (9,224) -- (9,224)
Other
adjustments,
net (1,518) 1,071 (75) 3,163
Changes in
operating
assets and
liabilities 2,013 14,145 7,023 14,256
Interest expense,
net 14,549 15,984 29,019 34,038
Income taxes 5,186 270 7,572 3,148
------------ ------------ ------------ ------------
EBITDA (1) 48,375 38,917 90,605 86,701
Adjustments to
EBITDA (2):
Integration and
restructuring
(3) 1,592 1,021 3,972 2,103
Other, net (4) (6,884) (4,849) (11,788) (9,498)
Investment
distributions
(5) 4,543 3,466 9,703 8,056
Non-cash
compensation
(6) 499 476 932 860
Loss on
extinguishment
of debt (7) -- 9,224 -- 9,224
------------ ------------ ------------ ------------
Adjusted EBITDA $ 48,125 $ 48,255 $ 93,424 $ 97,446
============ ============ ============ ============
Footnotes for Adjusted EBITDA:
(1) EBITDA is defined as net earnings before interest expense, income
taxes, depreciation amortization and extraordinary items on a
historical basis.
(2) These adjustments reflect those required or permitted by the
lenders under the credit facility in place at the end of each of the
quarters included in the periods presented.
(3) Represents certain expenses associated with integrating and
restructuring the Texas, Illinois and Pennsylvania businesses. For
the second quarter of 2009, this is comprised of $0.9 million of
integration costs and $0.7 million of severance costs. For the second
quarter of 2008, this is comprised of $0.9 million of integration
costs and $0.1 million of severance costs.
(4) Other, net includes the equity earnings from our investments,
dividend income, income attributable to noncontrolling interests in
subsidiaries and certain miscellaneous non-operating items. In
accordance with the terms of our credit facility, $1.8 million of
income recognized upon settlement of a dispute was not included in
the adjustment. The income represents the reversal of a reserve that
was created in connection with the purchase of North Pittsburgh.
(5) For purposes of calculating adjusted EBITDA, we include all cash
dividends and other cash distributions received from our
investments.
(6) Represents compensation expenses in connection with our
Restricted Share Plan, which because of the non-cash nature of the
expenses are being excluded from adjusted EBITDA.
(7) This includes approximately $6.3 million as a call premium and
$2.9 million in write offs of deferred financing costs incurred with
the redemption of the 9.75% Senior Notes on April 1, 2008.
Consolidated Communications Holdings, Inc.
Cash Available to Pay Dividends
(Dollars in thousands)
(Unaudited)
Three Months Six Months
Ended Ended
June 30, June 30,
2009 2009
-------------------------
Adjusted EBITDA $ 48,125 $ 93,424
- Cash interest expense (14,173) (28,258)
- Capital expenditures (10,218) (20,375)
- Cash income taxes (1,905) (4,683)
- Principal payments on debt (229) (453)
+ Cash interest income 15 37
------------ ------------
Cash available to pay dividends $ 21,615 $ 39,692
============ ============
Dividends Paid $ 11,519 $ 22,907
Payout Ratio 53.3% 57.7%
Consolidated Communications Holdings, Inc.
Total Net Debt to LTM Adjusted EBITDA Ratio
(Dollars in thousands)
(Unaudited)
Summary of Outstanding Debt
Term loan $ 880,000
Capital leases 813
------------
Total debt as of June 30, 2009 $ 880,813
Less cash on hand (20,025)
------------
Total net debt as of March 31, 2009 $ 860,788
============
Adjusted EBITDA for the last twelve
months ended June 30, 2009 $ 185,734
Total Net Debt to last twelve months
Adjusted EBITDA 4.6x
Consolidated Communications Holdings, Inc.
Adjusted Net Income and Diluted Net Income Per Share
(Dollars in thousands)
(Unaudited)
Three Months Ended Six Months Ended
June 30, June 30, June 30, June 30,
2009 2008 2009 2008
------------ ------------ ------------ ------------
Reported net
income
applicable to
common
stockholders $ 7,523 $ 180 $ 10,813 $ 3,889
Access dispute
settlement, net
of tax (1,067) -- (1,067) --
Bond redemption
charge, net of
tax -- 5,193 -- 5,087
Severance, net of
tax 410 57 1,723 187
Integration and
restructuring
charges, net of
tax 545 517 1,021 996
Non-cash
compensation 499 476 932 860
------------ ------------ ------------ ------------
Adjusted net
income applicable
to common
stockholders $ 7,910 $ 6,423 $ 13,422 $ 11,019
============ ============ ============ ============
Weighted average
number of shares
outstanding 29,674,395 29,529,290 29,620,154 29,514,570
============ ============ ============ ============
Adjusted diluted
net income per
share $ 0.27 $ 0.22 $ 0.45 $ 0.37
============ ============ ============ ============
Calculations above assume a 40.0 and 43.7 percent effective tax rate
for the three months ended June 30, 2009 and 2008, respectively and
the six month ended rates for the same ending period are assumed at
40.0 and 44.9 percent, respectively.
Consolidated Communications Holdings, Inc.
Key Operating Statistics
June 30, March 31, June 30,
2009 2009 2008
------------ ------------ ------------
Local access lines in service
Residential 151,937 156,935 174,641
Business (1) 102,656 102,852 102,152
------------ ------------ ------------
Total local access lines 254,593 259,787 276,793
Total IPTV subscribers 19,731 18,207 14,112
ILEC DSL subscribers (2) 95,656 94,554 86,575
------------ ------------ ------------
ILEC Broadband Connections 115,387 112,761 100,687
ILEC VOIP subscribers 7,883 7,141 4,088
CLEC Access Line Equivalents
(3) 72,062 73,737 73,713
Total connections 449,925 453,426 455,281
============ ============ ============
Long distance lines (4) 166,006 165,892 167,767
Dial-up subscribers 3,406 3,612 5,687
IPTV Homes passed 152,181 147,338 129,872
(1) The first quarter of 2009 included an increase of approximately
1,000 business lines due to a one-time billing true-up of access
lines installed in 2008 that were not reflected in our line counts.
(2) Includes only ILEC DSL. CLEC DSL is included in CLEC access line
equivalents.
(3) CLEC access line equivalents represent a combination of voice
services and data circuits. The calculations represent a conversion
of data circuits to an access line basis. Equivalents are calculated
by converting data circuits (basic rate interface (BRI), primary rate
interface (PRI), DSL, DS-1, DS-3, and Ethernet) and SONET-based
(optical) services (OC-3 and OC-48) to the equivalent of an access
line.
(4) Excludes CLEC LD subscribers.
CONTACT: Consolidated Communications Holdings, Inc.
Matt Smith, Treasurer & Director of Finance
217-258-2959
matthew.smith@consolidated.com
