Cover
Cover - shares | 9 Months Ended | |
Sep. 30, 2022 | Oct. 27, 2022 | |
Cover [Abstract] | ||
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Period End Date | Sep. 30, 2022 | |
Document Transition Report | false | |
Entity File Number | 001-36708 | |
Entity Registrant Name | Uniti Group Inc. | |
Entity Incorporation, State or Country Code | MD | |
Entity Tax Identification Number | 46-5230630 | |
Entity Address, Address Line One | 2101 Riverfront Drive, Suite A | |
Entity Address, City or Town | Little Rock | |
Entity Address, State or Province | AR | |
Entity Address, Postal Zip Code | 72202 | |
City Area Code | 501 | |
Local Phone Number | 850-0820 | |
Title of 12(b) Security | Common Stock | |
Trading Symbol | UNIT | |
Security Exchange Name | NASDAQ | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Large Accelerated Filer | |
Entity Small Business | false | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding | 237,200,050 | |
Amendment Flag | false | |
Document Fiscal Year Focus | 2022 | |
Document Fiscal Period Focus | Q3 | |
Entity Central Index Key | 0001620280 | |
Current Fiscal Year End Date | --12-31 |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets - USD ($) $ in Thousands | Sep. 30, 2022 | Dec. 31, 2021 |
Assets: | ||
Property, plant and equipment, net | $ 3,693,581 | $ 3,508,939 |
Cash and cash equivalents | 43,394 | 58,903 |
Accounts receivable, net | 41,317 | 38,455 |
Goodwill | 385,878 | 601,878 |
Intangible assets, net | 342,291 | 364,630 |
Straight-line revenue receivable | 62,137 | 41,323 |
Operating lease right-of-use assets, net | 86,212 | 80,271 |
Other assets | 83,762 | 38,900 |
Investment in unconsolidated entities | 38,990 | 64,223 |
Deferred income tax assets, net | 33,444 | 11,721 |
Total Assets | 4,811,006 | 4,809,243 |
Liabilities: | ||
Accounts payable, accrued expenses and other liabilities | 137,019 | 86,868 |
Settlement payable | 248,117 | 239,384 |
Intangible liabilities, net | 169,765 | 177,786 |
Accrued interest payable | 57,848 | 109,826 |
Deferred revenue | 1,197,375 | 1,134,236 |
Derivative liability, net | 822 | 10,413 |
Dividends payable | 658 | 1,264 |
Operating lease liabilities | 64,681 | 57,355 |
Finance lease obligations | 15,569 | 15,348 |
Notes and other debt, net | 5,179,327 | 5,090,537 |
Total liabilities | 7,071,181 | 6,923,017 |
Commitments and contingencies (Note 13) | ||
Shareholders' Deficit: | ||
Preferred stock, $0.0001 par value, 50,000 shares authorized; no shares issued and outstanding | 0 | 0 |
Common stock, $0.0001 par value, 500,000 shares authorized; issued and outstanding: 235,741 shares at September 30, 2022 and 234,779 at December 31, 2021 | 24 | 23 |
Additional paid-in capital | 1,227,905 | 1,214,830 |
Accumulated other comprehensive loss | (688) | (9,164) |
Distributions in excess of accumulated earnings | (3,489,718) | (3,333,481) |
Total Uniti shareholders' deficit | (2,262,477) | (2,127,792) |
Noncontrolling interests: | ||
Operating partnership units | 2,052 | 13,893 |
Cumulative non-voting convertible preferred stock, $0.01 par value, 6 shares authorized, 3 issued and outstanding | 250 | 125 |
Total shareholders' deficit | (2,260,175) | (2,113,774) |
Total Liabilities and Shareholders' Deficit | $ 4,811,006 | $ 4,809,243 |
Condensed Consolidated Balanc_2
Condensed Consolidated Balance Sheets (Parenthetical) - $ / shares | Sep. 30, 2022 | Dec. 31, 2021 |
Statement of Financial Position [Abstract] | ||
Preferred stock, par value (in dollars per share) | $ 0.0001 | $ 0.0001 |
Preferred stock, shares authorized (in shares) | 50,000,000 | 50,000,000 |
Preferred stock, shares issued (in shares) | 0 | 0 |
Preferred stock, shares outstanding (in shares) | 0 | 0 |
Common stock, par value (in dollars per share) | $ 0.0001 | $ 0.0001 |
Common stock, shares authorized (in shares) | 500,000,000 | 500,000,000 |
Common stock, shares issued (in shares) | 235,741,000 | 234,779,000 |
Common stock, shares outstanding (in shares) | 235,741,000 | 234,779,000 |
Cumulative non-voting convertible preferred stock par value (in dollars per share) | $ 0.01 | $ 0.01 |
Cumulative non-voting convertible preferred shares authorized (in shares) | 6,000 | 6,000 |
Cumulative non-voting convertible preferred shares issued (in shares) | 3,000 | 3,000 |
Cumulative non-voting convertible preferred shares outstanding (in shares) | 3,000 | 3,000 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Income - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Revenues: | ||||
Total revenues | $ 283,103 | $ 266,747 | $ 845,112 | $ 807,513 |
Costs and Expenses: | ||||
Interest expense, net | 97,731 | 94,793 | 290,280 | 341,762 |
Depreciation and amortization | 73,516 | 70,530 | 217,276 | 211,165 |
General and administrative expense | 26,863 | 25,077 | 75,818 | 75,800 |
Operating expense (exclusive of depreciation and amortization) | 36,291 | 34,167 | 108,184 | 105,436 |
Goodwill impairment | 216,000 | 0 | 216,000 | 0 |
Transaction related and other costs | 2,375 | 1,063 | 7,324 | 5,624 |
Gain on sale of real estate | (94) | 0 | (344) | (442) |
Gain on sale of operations | (176) | 0 | (176) | (28,143) |
Other (income) expense, net | 74 | 283 | (8,254) | 8,758 |
Total costs and expenses | 452,580 | 225,913 | 906,108 | 719,960 |
(Loss) income before income taxes and equity in earnings from unconsolidated entities | (169,477) | 40,834 | (60,996) | 87,553 |
Income tax (benefit) expense | (13,056) | (2,244) | (10,183) | 283 |
Equity in earnings of unconsolidated entities | (672) | (604) | (1,696) | (1,549) |
Net (loss) income | (155,749) | 43,682 | (49,117) | 88,819 |
Net (loss) income attributable to noncontrolling interests | (70) | 316 | 135 | 984 |
Net (loss) income attributable to shareholders | (155,679) | 43,366 | (49,252) | 87,835 |
Participating securities' share in earnings | (226) | (283) | (897) | (864) |
Dividends declared on convertible preferred stock | (5) | (3) | (15) | (8) |
Net (loss) income attributable to common shareholders | $ (155,910) | $ 43,080 | $ (50,164) | $ 86,963 |
(Loss) income per common share: | ||||
Basic (in dollars per share) | $ (0.66) | $ 0.18 | $ (0.21) | $ 0.37 |
Diluted (in dollars per share) | $ (0.66) | $ 0.17 | $ (0.21) | $ 0.37 |
Weighted-average number of common shares outstanding: | ||||
Basic (in shares) | 235,739 | 233,513 | 235,483 | 232,269 |
Diluted (in shares) | 235,739 | 264,421 | 235,483 | 232,540 |
Leasing | ||||
Revenues: | ||||
Total revenues | $ 208,623 | $ 199,485 | $ 618,878 | $ 590,478 |
Fiber Infrastructure | ||||
Revenues: | ||||
Total revenues | $ 74,480 | $ 67,262 | 226,234 | $ 217,035 |
Costs and Expenses: | ||||
Goodwill impairment | $ 216,000 |
Condensed Consolidated Statem_2
Condensed Consolidated Statements of Comprehensive Income - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Statement of Comprehensive Income [Abstract] | ||||
Net (loss) income | $ (155,749) | $ 43,682 | $ (49,117) | $ 88,819 |
Other comprehensive income: | ||||
Interest rate swap termination | 2,829 | 2,830 | 8,488 | 8,488 |
Other comprehensive income | 2,829 | 2,830 | 8,488 | 8,488 |
Comprehensive (loss) income | (152,920) | 46,512 | (40,629) | 97,307 |
Comprehensive (loss) income attributable to noncontrolling interest | (69) | 338 | 147 | 1,089 |
Comprehensive (loss) income attributable to shareholders | $ (152,851) | $ 46,174 | $ (40,776) | $ 96,218 |
Condensed Consolidated Statem_3
Condensed Consolidated Statements of Shareholders' Deficit - USD ($) $ in Thousands | Total | Cumulative effect adjustment for adoption of new accounting standard | Common Stock | Additional Paid-in Capital | Additional Paid-in Capital Cumulative effect adjustment for adoption of new accounting standard | Accumulated Other Comprehensive Loss | Distributions in Excess of Accumulated Earnings | Distributions in Excess of Accumulated Earnings Cumulative effect adjustment for adoption of new accounting standard | Noncontrolling Interest - OP Units | Noncontrolling Interest - Non- voting Preferred Shares |
Beginning balance (in shares) at Dec. 31, 2020 | 231,261,958,000 | |||||||||
Beginning balance at Dec. 31, 2020 | $ (2,072,376) | $ (45,310) | $ 23 | $ 1,209,141 | $ (59,908) | $ (20,367) | $ (3,330,455) | $ 14,598 | $ 69,157 | $ 125 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||||
Net (loss) income | 88,819 | 87,835 | 984 | |||||||
Other comprehensive income | 8,488 | 8,383 | 105 | |||||||
Common stock dividends declared | (105,664) | (105,664) | ||||||||
Distributions to noncontrolling interest declared | (1,181) | (1,181) | ||||||||
Exchange of noncontrolling interest (in shares) | 2,528,199,000 | |||||||||
Exchange of noncontrolling interest | 0 | 50,395 | (50,395) | |||||||
Payments related to tax withholding for stock-based compensation | (2,652) | (2,652) | ||||||||
Stock-based compensation (in shares) | 630,249,000 | |||||||||
Stock-based compensation | 10,963 | 10,963 | ||||||||
Issuance of common stock - employee stock purchase plan (in shares) | 74,950,000 | |||||||||
Issuance of common stock - employee stock purchase plan | 672 | 672 | ||||||||
Ending balance (in shares) at Sep. 30, 2021 | 234,495,356,000 | |||||||||
Ending balance at Sep. 30, 2021 | (2,118,241) | $ 23 | 1,208,611 | (11,984) | (3,333,686) | 18,670 | 125 | |||
Beginning balance (in shares) at Jun. 30, 2021 | 231,804,921,000 | |||||||||
Beginning balance at Jun. 30, 2021 | (2,133,440) | $ 23 | 1,153,707 | (14,792) | (3,341,371) | 68,868 | 125 | |||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||||
Net (loss) income | 43,682 | 43,366 | 316 | |||||||
Other comprehensive income | 2,830 | 2,808 | 22 | |||||||
Common stock dividends declared | (35,681) | (35,681) | ||||||||
Distributions to noncontrolling interest declared | (141) | (141) | ||||||||
Exchange of noncontrolling interest (in shares) | 2,528,199,000 | |||||||||
Exchange of noncontrolling interest | 0 | 50,395 | (50,395) | |||||||
Payments related to tax withholding for stock-based compensation | (10) | (10) | ||||||||
Stock-based compensation (in shares) | 123,050,000 | |||||||||
Stock-based compensation | 4,166 | 4,166 | ||||||||
Issuance of common stock - employee stock purchase plan (in shares) | 39,186,000 | |||||||||
Issuance of common stock - employee stock purchase plan | 353 | 353 | ||||||||
Ending balance (in shares) at Sep. 30, 2021 | 234,495,356,000 | |||||||||
Ending balance at Sep. 30, 2021 | (2,118,241) | $ 23 | 1,208,611 | (11,984) | (3,333,686) | 18,670 | 125 | |||
Beginning balance (in shares) at Dec. 31, 2021 | 234,779,247,000 | |||||||||
Beginning balance at Dec. 31, 2021 | (2,113,774) | $ 23 | 1,214,830 | (9,164) | (3,333,481) | 13,893 | 125 | |||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||||
Net (loss) income | (49,117) | (49,252) | 135 | |||||||
Other comprehensive income | 8,488 | 8,476 | 12 | |||||||
Common stock dividends declared | (106,860) | (106,860) | ||||||||
Distributions to noncontrolling interest declared | (111) | (111) | ||||||||
Cumulative non-voting convertible preferred stock | 0 | (125) | 125 | |||||||
Exchange of noncontrolling interest (in shares) | 244,682,000 | |||||||||
Exchange of noncontrolling interest | (4,620) | 7,257 | (11,877) | |||||||
Payments related to tax withholding for stock-based compensation | (4,434) | (4,434) | ||||||||
Stock-based compensation (in shares) | 647,461,000 | |||||||||
Stock-based compensation | 9,664 | $ 1 | 9,663 | |||||||
Issuance of common stock - employee stock purchase plan (in shares) | 69,854,000 | |||||||||
Issuance of common stock - employee stock purchase plan | 589 | 589 | ||||||||
Ending balance (in shares) at Sep. 30, 2022 | 235,741,244,000 | |||||||||
Ending balance at Sep. 30, 2022 | (2,260,175) | $ 24 | 1,227,905 | (688) | (3,489,718) | 2,052 | 250 | |||
Beginning balance (in shares) at Jun. 30, 2022 | 235,699,513,000 | |||||||||
Beginning balance at Jun. 30, 2022 | (2,075,198) | $ 24 | 1,224,427 | (3,516) | (3,298,455) | 2,072 | 250 | |||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||||
Net (loss) income | (155,749) | (155,679) | (70) | |||||||
Other comprehensive income | 2,829 | 2,828 | 1 | |||||||
Common stock dividends declared | (35,584) | (35,584) | ||||||||
Distributions to noncontrolling interest declared | 49 | 49 | ||||||||
Payments related to tax withholding for stock-based compensation | 2 | 2 | ||||||||
Stock-based compensation (in shares) | 1,201,000 | |||||||||
Stock-based compensation | 3,151 | 3,151 | ||||||||
Issuance of common stock - employee stock purchase plan (in shares) | 40,530,000 | |||||||||
Issuance of common stock - employee stock purchase plan | 325 | 325 | ||||||||
Ending balance (in shares) at Sep. 30, 2022 | 235,741,244,000 | |||||||||
Ending balance at Sep. 30, 2022 | $ (2,260,175) | $ 24 | $ 1,227,905 | $ (688) | $ (3,489,718) | $ 2,052 | $ 250 |
Condensed Consolidated Statem_4
Condensed Consolidated Statements of Shareholders' Deficit - Parenthetical - $ / shares | 3 Months Ended | 9 Months Ended | 12 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | Dec. 31, 2020 | |
Statement of Stockholders' Equity [Abstract] | |||||
Accounting standards update | Accounting Standards Update 2020-06 [Member] | ||||
Common stock dividends declared per share (in dollars per share) | $ 0.15 | $ 0.15 | $ 0.45 | $ 0.45 |
Condensed Consolidated Statem_5
Condensed Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2022 | Sep. 30, 2021 | |
Cash flow from operating activities | ||
Net (loss) income | $ (49,117) | $ 88,819 |
Adjustments to reconcile net (loss) income to net cash provided by operating activities: | ||
Depreciation and amortization | 217,276 | 211,165 |
Amortization of deferred financing costs and debt discount | 13,510 | 13,723 |
Loss on debt extinguishment | 0 | 43,369 |
Interest rate swap termination | 8,488 | 8,488 |
Deferred income taxes | (21,723) | (2,270) |
Equity in earnings of unconsolidated entities | (1,696) | (1,549) |
Distributions of cumulative earnings from unconsolidated entities | 2,959 | 2,933 |
Cash paid for interest rate swap settlement | (9,591) | (9,291) |
Straight-line revenues and amortization of below-market lease intangibles | (31,066) | (22,455) |
Stock-based compensation | 9,664 | 10,963 |
Change in fair value of contingent consideration | 0 | 21 |
Goodwill impairment | 216,000 | 0 |
Gain on sale of unconsolidated entity | (7,923) | 0 |
Gain on sale of real estate | (344) | (442) |
Gain on sale of operations | (176) | (28,143) |
Loss (gain) on asset disposals | 902 | (232) |
Accretion of settlement obligation | 8,733 | 13,006 |
Other | (126) | 97 |
Changes in assets and liabilities: | ||
Accounts receivable | (2,863) | 23,938 |
Other assets | 7,756 | (150) |
Accounts payable, accrued expenses and other liabilities | (75,556) | 1,363 |
Net cash provided by operating activities | 285,107 | 353,353 |
Cash flow from investing activities | ||
Capital expenditures | (292,666) | (276,010) |
Proceeds from sale of unconsolidated entity | 32,527 | 0 |
Proceeds from sale of real estate, net of cash | 575 | 1,034 |
Proceeds from sale of operations | 541 | 62,113 |
Proceeds from sale of other equipment | 338 | 1,143 |
Net cash used in investing activities | (258,685) | (211,720) |
Cash flow from financing activities | ||
Repayment of debt | 0 | (1,660,000) |
Proceeds from issuance of notes | 0 | 1,680,000 |
Dividends paid | (107,362) | (105,941) |
Payments of settlement payable | 0 | (73,516) |
Payments of contingent consideration | 0 | (2,979) |
Distributions paid to noncontrolling interest | (217) | (1,700) |
Payment for exchange of noncontrolling interest | (4,620) | 0 |
Borrowings under revolving credit facility | 180,000 | 290,000 |
Payments under revolving credit facility | (105,000) | (220,000) |
Finance lease payments | (887) | (1,745) |
Payments for financing costs | 0 | (25,755) |
Payment of tender premium | 0 | (25,800) |
Employee stock purchase program | 589 | 672 |
Payments related to tax withholding for stock-based compensation | (4,434) | (2,652) |
Net cash used in financing activities | (41,931) | (149,416) |
Net increase in cash and cash equivalents | (15,509) | (7,783) |
Cash and cash equivalents at beginning of period | 58,903 | 77,534 |
Cash and cash equivalents at end of period | 43,394 | 69,751 |
Non-cash investing and financing activities: | ||
Property and equipment acquired but not yet paid | 12,751 | 22,586 |
Tenant capital improvements | $ 120,239 | $ 140,996 |
Organization and Description of
Organization and Description of Business | 9 Months Ended |
Sep. 30, 2022 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Organization and Description of Business | Organization and Description of Business Uniti Group Inc. (the “Company,” “Uniti,” “we,” “us,” or “our”) was incorporated in the state of Maryland on September 4, 2014. We are an independent internally managed real estate investment trust (“REIT”) engaged in the acquisition, construction and leasing of mission critical infrastructure in the communications industry. We are principally focused on acquiring and constructing fiber optic, copper and coaxial broadband networks and data centers. We manage our operations focused on our two primary lines of business: Uniti Fiber and Uniti Leasing. The Company operates through a customary “up-REIT” structure, pursuant to which we hold substantially all of our assets through a partnership, Uniti Group LP, a Delaware limited partnership (the “Operating Partnership”) that we control as general partner. The up-REIT structure is intended to facilitate future acquisition opportunities by providing the Company with the ability to use common units of the Operating Partnership as a tax-efficient acquisition currency. As of September 30, 2022, we are the sole general partner of the Operating Partnership and own approximately 99.96% of the partnership interests in the Operating Partnership. |
Basis of Presentation and Summa
Basis of Presentation and Summary of Significant Accounting Policies | 9 Months Ended |
Sep. 30, 2022 | |
Accounting Policies [Abstract] | |
Basis of Presentation and Summary of Significant Accounting Policies | Basis of Presentation and Summary of Significant Accounting Policies The accompanying Condensed Consolidated Financial Statements include all accounts of the Company and its wholly-owned and/or controlled subsidiaries, including the Operating Partnership. Under the Accounting Standards Codification 810, Consolidation (“ASC 810”), the Operating Partnership is considered a variable interest entity and is consolidated in the Condensed Consolidated Financial Statements of Uniti Group Inc. because the Company is the primary beneficiary. All material intercompany balances and transactions have been eliminated. ASC 810 provides guidance on the identification of entities for which control is achieved through means other than voting rights (“variable interest entities” or “VIEs”) and the determination of which business enterprise, if any, should consolidate the VIEs. Generally, the consideration of whether an entity is a VIE applies when either: (1) the equity investors (if any) lack (i) the ability to make decisions about the entity’s activities through voting or similar rights, (ii) the obligation to absorb the expected losses of the entity, or (iii) the right to receive the expected residual returns of the entity; (2) the equity investment at risk is insufficient to finance that entity’s activities without additional subordinated financial support; or (3) the equity investors have voting rights that are not proportionate to their economic interests and substantially all of the activities of the entity involve or are conducted on behalf of an investor with a disproportionately small voting interest. The Company consolidates VIEs in which it is considered to be the primary beneficiary. The primary beneficiary is defined as the entity having both of the following characteristics: (1) the power to direct the activities that, when taken together, most significantly impact the VIE’s performance; and (2) the obligation to absorb losses and right to receive the returns from the VIE that would be significant to the VIE. The accompanying Condensed Consolidated Financial Statements have been prepared in accordance with U.S. generally accepted accounting principles (“GAAP”) for interim financial information set forth in the Accounting Standards Codification (“ASC”), as published by the Financial Accounting Standards Board (“FASB”), and with the applicable rules and regulations of the Securities and Exchange Commission (“SEC”). Accordingly, they do not include all of the information and footnotes required by GAAP for complete financial statements. In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for a fair statement of results for the interim period have been included. Operating results from any interim period are not necessarily indicative of the results that may be expected for the full fiscal year. The accompanying Condensed Consolidated Financial Statements and related notes should be read in conjunction with the audited consolidated financial statements and notes thereto included in our Annual Report on Form 10-K filed with the SEC on February 25, 2022 , as amended by Amendment No. 1 thereto filed on Form 10-K/A with the SEC on March 22, 2022 (the “Annual Report”). Accordingly, significant accounting policies and other disclosures normally provided have been omitted from the accompanying Condensed Consolidated Financial Statements and related notes since such items are disclosed in our Annual Report. Concentration of Credit Risks —Prior to September 2020, we were party to a long-term exclusive triple-net lease (the “Master Lease”) with Windstream Holdings, Inc. (together with Windstream Holdings II, LLC, its successor in interest, and its subsidiaries, “Windstream”) pursuant to which a substantial portion of our real property was leased to Windstream and from which a substantial portion of our leasing revenues were derived. On September 18, 2020, Uniti and Windstream bifurcated the Master Lease and entered into two structurally similar master leases (collectively, the “Windstream Leases”), which amended and restated the Master Lease in its entirety. Revenue under the Windstream Leases provided 66.4% and 67.6% of our revenue for the nine months ended September 30, 2022 and 2021, respectively. Because a substantial portion of our revenue and cash flows are derived from lease payments by Windstream pursuant to the Windstream Leases, there could be a material adverse impact on our consolidated results of operations, liquidity, financial condition and/or ability to pay dividends and service debt if Windstream were to default under the Windstream Leases or otherwise experiences operating or liquidity difficulties and becomes unable to generate sufficient cash to make payments to us. Prior to its emergence from bankruptcy on September 21, 2020, Windstream was a publicly traded company subject to the periodic filing requirements of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). Windstream’s historic filings through their quarter ended June 30, 2020 can be found at www.sec.gov. Additionally, the Windstream audited financial statements as of December 31, 2021, and for the year ended December 31, 2021, as of December 31, 2020 and for the period from September 22, 2020 to December 31, 2020 and for the period from January 1, 2020 to September 21, 2020 and for the year ended December 31, 2019 are included as an exhibit to our Annual Report. On September 22, 2020, Windstream filed a Form 15 to terminate all filing obligations under Sections 12(g) and 15(d) under the Exchange Act. Windstream filings are not incorporated by reference in this Quarterly Report on Form 10-Q. We monitor the credit quality of Windstream through numerous methods, including by (i) reviewing credit ratings of Windstream by nationally recognized credit agencies, (ii) reviewing the financial statements of Windstream that are required to be delivered to us pursuant to the Windstream Leases, (iii) monitoring news reports regarding Windstream and its business, (iv) conducting research to ascertain industry trends potentially affecting Windstream, (v) monitoring Windstream’s compliance with the terms of the Windstream Leases and (vi) monitoring the timeliness of its payments under the Windstream Leases. As of the date of this Quarterly Report on Form 10-Q, Windstream is current on all lease payments. We note that in August 2020, Moody’s Investor Service assigned a B3 corporate family rating with a stable outlook to Windstream in connection with its post-emergence exit financing. At the same time, S&P Global Ratings assigned Windstream a B- issuer rating with a stable outlook. Both ratings remain current as of the date of this filing. In order to assist us in our continuing assessment of Windstream’s creditworthiness, we periodically receive certain confidential financial information and metrics from Windstream. Goodwill —As of September 30, 2022 and December 31, 2021, all of our goodwill is included in our Fiber Infrastructure segment. Goodwill is recognized for the excess of purchase price over the fair value of net assets of businesses acquired. Goodwill is reviewed for impairment on an annual basis during the fourth quarter. Application of the goodwill impairment test requires significant judgment, including: the identification of reporting units; assignment of assets and liabilities to reporting units; and assignment of goodwill to reporting units. In accordance with ASC 350-20, Intangibles-Goodwill and Other , we evaluate goodwill for impairment between annual impairment tests if an event occurs or circumstances change that would more likely than not reduce the fair value of a reporting unit below its carrying amount (a “Triggering Event”). On the occurrence of a Triggering Event, an entity has the option to first assess qualitative factors to determine whether a quantitative impairment test is necessary. If it is more likely than not that goodwill is impaired, the fair value of the reporting unit must be compared with its carrying value. In performing the quantitative assessment of goodwill, we estimate the fair value of our fiber reporting unit using a combination of an income approach based on the present value of estimated future cash flows and a market approach based on market data of comparable businesses, and acquisition multiples paid in recent transactions. Inherent in our preparation of cash flow projections are significant assumptions and estimates derived from a review of our operating results and business plans, which include expected revenue and expense growth rates, capital expenditure plans and discount rate. In determining these assumptions, we consider our ability to execute on our plans, future economic conditions, interest rates and other market data. Many of the factors used in assessing fair value are outside the control of management, and these assumptions and estimates may change in future periods. Small changes in these assumptions or estimates could materially affect our cash flow projections, and therefore could affect the likelihood and amount of potential impairment in future periods. Potential events that could negatively impact these assumptions or estimates may include customer losses or poor execution of our business plans, which impact revenue growth, cost escalation impacting margin, the level of capital expenditures required to sustain our growth and market factors, including stock price fluctuations and increased interest rates, impacting our discount rate. For example, if we were to experience a significant delay in our permitting process in the construction of our fiber networks, the timing of effected cash flows could impact long term growth rates and negatively impact the income approach, leading to potential impairment. As a result, should our expectations of average projected revenue growth percentage, average projected EBITDA margin percentage and/or average projected capital expenditures as a percentage of revenue change, we may experience future impairment to goodwill (while other assumptions remain constant). Furthermore, a deterioration in market factors such as stock prices or increased interest rates and/or declines in acquisition multiples utilized in the market approach could affect the likelihood and amount of potential impairment. We evaluate the appropriateness of each valuation methodology in determining the weighting applied to each methodology in the determination of the concluded fair value. If the carrying amount of a reporting unit's net assets is less than its fair value, no impairment exists. If the carrying amount of the reporting unit is greater than the fair value of the reporting unit, an impairment loss must be recognized for the excess and recorded in the Consolidated Statements of (Loss) Income not to exceed the carrying amount of goodwill. In connection with the preparation of the Condensed Consolidated Financial Statements for the three and nine months ended September 30, 2022, the Company identified a Triggering Event and, therefore, performed a qualitative and quantitative goodwill impairment test. The Triggering Event was a result of macroeconomic and financial market factors, specifically increased interest rates, impacting our discount rate. As a result of this interim assessment of goodwill, we concluded that the fair value of the Fiber Infrastructure reporting unit, estimated using a combination of the income approach and market approach, is less than its carrying amount. Accordingly, we recorded a $216.0 million goodwill impairment charge in the Fiber Infrastructure reporting unit during the three months ended September 30, 2022. Reclassifications —Certain prior year asset and liability categories and related amounts have been reclassified to conform with current year presentation. Recently Adopted Accounting Pronouncements In May 2021 , the FASB issued ASU 2021-04, Earnings Per Share (Topic 260), Debt—Modifications and Extinguishments (Subtopic 470-50), Compensation— Stock Compensation (Topic 718), and Derivatives and Hedging—Contracts in Entity’s Own Equity (Subtopic 815- 40) : Issuer’s Accounting for Certain Modifications or Exchanges of Freestanding Equity-Classified Written Call Options , which clarifies and reduces diversity in an issuer’s accounting for modifications or exchanges of freestanding equity-classified written call options (for example, warrants) that remain equity classified after modification or exchange (“ASU 2021-04”). ASU 2021-04 is effective for all entities for fiscal years beginning after December 15, 2021 , including interim periods within those fiscal years. The Company adopted ASU 2021-04 effective January 1, 2022 , and there was no impact on our consolidated financial statements. In July 2021, the FASB issued ASU 2021-05 , Leases (Topic 842): Lessors—Certain Leases with Variable Lease Payments (“ ASU 2021-05 ”), which requires lessors to classify leases as operating leases if they (1) have variable lease payments that do not depend on a reference index or rate, and (2) would have resulted in the recognition of a selling loss at lease commencement if classified as sales-type or direct financing. ASU 2021-05 is effective for all entities which have previously adopted Topic 842 for fiscal years beginning after December 15, 2021, including interim periods within those fiscal years. The Company adopted ASU 2021-05 effective January 1, 2022, and there was no impact on our consolidated financial statements. |
Revenues
Revenues | 9 Months Ended |
Sep. 30, 2022 | |
Revenue from Contract with Customer [Abstract] | |
Revenues | Revenues Disaggregation of Revenue The following table presents our revenues disaggregated by revenue stream. Three Months Ended Nine Months Ended (Thousands) 2022 2021 2022 2021 Revenue disaggregated by revenue stream Revenue from contracts with customers Fiber Infrastructure Lit backhaul $ 19,969 $ 19,381 $ 59,344 $ 67,404 Enterprise and wholesale 21,423 20,863 63,359 63,190 E-Rate and government 15,245 13,505 48,026 48,795 Other 703 839 2,076 2,479 Fiber Infrastructure $ 57,340 $ 54,588 $ 172,805 $ 181,868 Leasing 1,201 1,070 3,553 3,237 Total revenue from contracts with customers 58,541 55,658 176,358 185,105 Revenue accounted for under leasing guidance Leasing 207,422 198,415 615,325 587,241 Fiber Infrastructure 17,140 12,674 53,429 35,167 Total revenue accounted for under leasing guidance 224,562 211,089 668,754 622,408 Total revenue $ 283,103 $ 266,747 $ 845,112 $ 807,513 At September 30, 2022 and December 31, 2021, lease receivables were $23.8 million and $19.4 million, respectively, and receivables from contracts with customers were $17.2 million and $14.7 million, respectively. Contract Assets (Unbilled Revenue) and Liabilities (Deferred Revenue) Contract assets primarily consist of unbilled construction revenue where we are utilizing our costs incurred as the measure of progress of satisfying our performance obligation. Contract assets are reported within accounts receivable, net on our Condensed Consolidated Balance Sheets. When the contract price is invoiced, the related unbilled receivable is reclassified to trade accounts receivable, where the balance will be settled upon the collection of the invoiced amount. Contract liabilities are generally comprised of upfront fees charged to the customer for the cost of establishing the necessary components of the Company’s network prior to the commencement of use by the customer. Fees charged to customers for the recurring use of the Company’s network are recognized during the related periods of service. Upfront fees that are billed in advance of providing services are deferred until such time the customer accepts the Company’s network and then are recognized as service revenues ratably over a period in which substantive services required under the revenue arrangement are expected to be performed, which is the initial term of the arrangement. During the three and nine months ended September 30, 2022, we recognized revenues of $2.6 million and $5.6 million, respectively, which was included in the December 31, 2021 contract liabilities balance. The following table provides information about contract assets and contract liabilities accounted for under ASC 606. (Thousands) Contract Assets Contract Liabilities Balance at December 31, 2021 $ 4,066 $ 9,099 Balance at September 30, 2022 $ 391 $ 11,061 Transaction Price Allocated to Remaining Performance Obligations Performance obligations within contracts to stand ready to provide services are typically satisfied over time or as those services are provided. Contract liabilities primarily relate to deferred revenue from upfront customer payments. The deferred revenue is recognized, and the liability reduced, over the contract term as the Company completes the performance obligation. As of September 30, 2022, our future revenues (i.e., transaction price related to remaining performance obligations) under contract accounted for under ASC 606 totaled $564.2 million, of which $464.1 million is related to contracts that are currently being invoiced and have an average remaining contract term of 2.4 years, while $100.1 million represents our backlog for sales bookings which have yet to be installed and have an average contract term of 6.0 years. We do not disclose the value of unsatisfied performance obligations for contracts that have an original expected duration of one year or less. |
Leases
Leases | 9 Months Ended |
Sep. 30, 2022 | |
Leases [Abstract] | |
Leases | Leases Lessor Accounting We lease communications towers, ground, colocation, and dark fiber to tenants under operating leases. Our leases have initial lease terms ranging from less than one year to 35 years, most of which include options to extend or renew the leases for less than one year to 20 years (based on the satisfaction of certain conditions as defined in the lease agreements), and some of which may include options to terminate the leases within one . Certain lease agreements contain provisions for future rent increases. Payments due under the lease contracts include fixed payments plus, for some of our leases, variable payments. The components of lease income for the three and nine months ended September 30, 2022 and 2021, respectively, are as follows: Three Months Ended September 30, Nine Months Ended September 30, (Thousands) 2022 2021 2022 2021 Lease income - operating leases $ 224,562 $ 211,089 $ 668,754 $ 622,408 Lease payments to be received under non-cancellable operating leases where we are the lessor for the remainder of the lease terms as of September 30, 2022 are as follows: (Thousands) September 30, 2022⁽¹⁾ 2022 $ 191,496 2023 777,937 2024 784,400 2025 785,568 2026 787,169 Thereafter 3,066,497 Total lease receivables $ 6,393,067 (1) Total future minimum lease payments to be received include $5.5 billion relating to the Windstream Leases. The underlying assets under operating leases where we are the lessor are summarized as follows: (Thousands) September 30, 2022 December 31, 2021 Land $ 26,550 $ 26,593 Building and improvements 344,836 343,624 Poles 293,504 281,130 Fiber 3,465,878 3,278,276 Equipment 428 428 Copper 3,955,180 3,918,281 Conduit 89,925 89,859 Tower assets 1,397 1,397 Finance lease assets 28,126 28,126 Other assets 10,434 10,649 8,216,258 7,978,363 Less: accumulated depreciation (5,502,245) (5,391,479) Underlying assets under operating leases, net $ 2,714,013 $ 2,586,884 Depreciation expense for the underlying assets under operating leases where we are the lessor for the three and nine months ended September 30, 2022 and 2021, respectively, is summarized as follows: Three Months Ended September 30, Nine Months Ended September 30, (Thousands) 2022 2021 2022 2021 Depreciation expense for underlying assets under operating leases $ 44,127 $ 44,763 $ 130,858 $ 134,783 Lessee Accounting We have commitments under operating leases for communications towers, ground, colocation, dark fiber lease arrangements and buildings. We also have finance leases for dark fiber lease arrangements. Our leases have initial lease terms ranging from less than one year to 30 years, most of which include options to extend or renew the leases for less than one year to 20 years , and some of which may include options to terminate the leases within one . Certain lease agreements contain provisions for future rent increases. Payments due under the lease contracts include fixed payments plus, for some of our leases, variable payments. As of September 30, 2022, we have short term lease commitments amounting to approximately $2.8 million. Future lease payments under non-cancellable leases as of September 30, 2022 are as follows: (Thousands) Operating Leases Finance Leases 2022 $ 4,079 $ 625 2023 15,588 2,497 2024 13,201 2,307 2025 10,529 2,254 2026 7,739 2,254 Thereafter 47,463 14,878 Total undiscounted lease payments $ 98,599 $ 24,815 Less: imputed interest (33,918) (9,246) Total lease liabilities $ 64,681 $ 15,569 |
Leases | Leases Lessor Accounting We lease communications towers, ground, colocation, and dark fiber to tenants under operating leases. Our leases have initial lease terms ranging from less than one year to 35 years, most of which include options to extend or renew the leases for less than one year to 20 years (based on the satisfaction of certain conditions as defined in the lease agreements), and some of which may include options to terminate the leases within one . Certain lease agreements contain provisions for future rent increases. Payments due under the lease contracts include fixed payments plus, for some of our leases, variable payments. The components of lease income for the three and nine months ended September 30, 2022 and 2021, respectively, are as follows: Three Months Ended September 30, Nine Months Ended September 30, (Thousands) 2022 2021 2022 2021 Lease income - operating leases $ 224,562 $ 211,089 $ 668,754 $ 622,408 Lease payments to be received under non-cancellable operating leases where we are the lessor for the remainder of the lease terms as of September 30, 2022 are as follows: (Thousands) September 30, 2022⁽¹⁾ 2022 $ 191,496 2023 777,937 2024 784,400 2025 785,568 2026 787,169 Thereafter 3,066,497 Total lease receivables $ 6,393,067 (1) Total future minimum lease payments to be received include $5.5 billion relating to the Windstream Leases. The underlying assets under operating leases where we are the lessor are summarized as follows: (Thousands) September 30, 2022 December 31, 2021 Land $ 26,550 $ 26,593 Building and improvements 344,836 343,624 Poles 293,504 281,130 Fiber 3,465,878 3,278,276 Equipment 428 428 Copper 3,955,180 3,918,281 Conduit 89,925 89,859 Tower assets 1,397 1,397 Finance lease assets 28,126 28,126 Other assets 10,434 10,649 8,216,258 7,978,363 Less: accumulated depreciation (5,502,245) (5,391,479) Underlying assets under operating leases, net $ 2,714,013 $ 2,586,884 Depreciation expense for the underlying assets under operating leases where we are the lessor for the three and nine months ended September 30, 2022 and 2021, respectively, is summarized as follows: Three Months Ended September 30, Nine Months Ended September 30, (Thousands) 2022 2021 2022 2021 Depreciation expense for underlying assets under operating leases $ 44,127 $ 44,763 $ 130,858 $ 134,783 Lessee Accounting We have commitments under operating leases for communications towers, ground, colocation, dark fiber lease arrangements and buildings. We also have finance leases for dark fiber lease arrangements. Our leases have initial lease terms ranging from less than one year to 30 years, most of which include options to extend or renew the leases for less than one year to 20 years , and some of which may include options to terminate the leases within one . Certain lease agreements contain provisions for future rent increases. Payments due under the lease contracts include fixed payments plus, for some of our leases, variable payments. As of September 30, 2022, we have short term lease commitments amounting to approximately $2.8 million. Future lease payments under non-cancellable leases as of September 30, 2022 are as follows: (Thousands) Operating Leases Finance Leases 2022 $ 4,079 $ 625 2023 15,588 2,497 2024 13,201 2,307 2025 10,529 2,254 2026 7,739 2,254 Thereafter 47,463 14,878 Total undiscounted lease payments $ 98,599 $ 24,815 Less: imputed interest (33,918) (9,246) Total lease liabilities $ 64,681 $ 15,569 |
Leases | Leases Lessor Accounting We lease communications towers, ground, colocation, and dark fiber to tenants under operating leases. Our leases have initial lease terms ranging from less than one year to 35 years, most of which include options to extend or renew the leases for less than one year to 20 years (based on the satisfaction of certain conditions as defined in the lease agreements), and some of which may include options to terminate the leases within one . Certain lease agreements contain provisions for future rent increases. Payments due under the lease contracts include fixed payments plus, for some of our leases, variable payments. The components of lease income for the three and nine months ended September 30, 2022 and 2021, respectively, are as follows: Three Months Ended September 30, Nine Months Ended September 30, (Thousands) 2022 2021 2022 2021 Lease income - operating leases $ 224,562 $ 211,089 $ 668,754 $ 622,408 Lease payments to be received under non-cancellable operating leases where we are the lessor for the remainder of the lease terms as of September 30, 2022 are as follows: (Thousands) September 30, 2022⁽¹⁾ 2022 $ 191,496 2023 777,937 2024 784,400 2025 785,568 2026 787,169 Thereafter 3,066,497 Total lease receivables $ 6,393,067 (1) Total future minimum lease payments to be received include $5.5 billion relating to the Windstream Leases. The underlying assets under operating leases where we are the lessor are summarized as follows: (Thousands) September 30, 2022 December 31, 2021 Land $ 26,550 $ 26,593 Building and improvements 344,836 343,624 Poles 293,504 281,130 Fiber 3,465,878 3,278,276 Equipment 428 428 Copper 3,955,180 3,918,281 Conduit 89,925 89,859 Tower assets 1,397 1,397 Finance lease assets 28,126 28,126 Other assets 10,434 10,649 8,216,258 7,978,363 Less: accumulated depreciation (5,502,245) (5,391,479) Underlying assets under operating leases, net $ 2,714,013 $ 2,586,884 Depreciation expense for the underlying assets under operating leases where we are the lessor for the three and nine months ended September 30, 2022 and 2021, respectively, is summarized as follows: Three Months Ended September 30, Nine Months Ended September 30, (Thousands) 2022 2021 2022 2021 Depreciation expense for underlying assets under operating leases $ 44,127 $ 44,763 $ 130,858 $ 134,783 Lessee Accounting We have commitments under operating leases for communications towers, ground, colocation, dark fiber lease arrangements and buildings. We also have finance leases for dark fiber lease arrangements. Our leases have initial lease terms ranging from less than one year to 30 years, most of which include options to extend or renew the leases for less than one year to 20 years , and some of which may include options to terminate the leases within one . Certain lease agreements contain provisions for future rent increases. Payments due under the lease contracts include fixed payments plus, for some of our leases, variable payments. As of September 30, 2022, we have short term lease commitments amounting to approximately $2.8 million. Future lease payments under non-cancellable leases as of September 30, 2022 are as follows: (Thousands) Operating Leases Finance Leases 2022 $ 4,079 $ 625 2023 15,588 2,497 2024 13,201 2,307 2025 10,529 2,254 2026 7,739 2,254 Thereafter 47,463 14,878 Total undiscounted lease payments $ 98,599 $ 24,815 Less: imputed interest (33,918) (9,246) Total lease liabilities $ 64,681 $ 15,569 |
Investments in Unconsolidated E
Investments in Unconsolidated Entities | 9 Months Ended |
Sep. 30, 2022 | |
Equity Method Investments and Joint Ventures [Abstract] | |
Investments in Unconsolidated Entities | Investments in Unconsolidated Entities Fiber Holdings BB Fiber Holdings LLC ( “Fiber Holdings” ) was primarily established to develop fiber networks as real estate property for long-term investment. On July 1, 2020, the Company completed the sale of an ownership stake in the entity that controls the Company’s Midwest fiber network assets (the “Propco”). Fiber Holdings has a 47.5% ownership in the Propco that is under a long-term, triple net lease with our joint venture partner. Our ownership interest in Fiber Holdings represents approximately a 20% economic interest in the Propco. The Company’s current investment and maximum exposure to loss as a result of its involvement with Fiber Holdings, an equity method unconsolidated entity, was approximately $39.0 million as of September 30, 2022. The Company has not provided financial support to Fiber Holdings. Harmoni On June 21, 2022, the Company completed the sale of its investment in Harmoni Towers L P (“Harmoni”) |
Fair Value of Financial Instrum
Fair Value of Financial Instruments | 9 Months Ended |
Sep. 30, 2022 | |
Fair Value Disclosures [Abstract] | |
Fair Value of Financial Instruments | Fair Value of Financial Instruments FASB ASC 820, Fair Value Measurements , establishes a hierarchy of valuation techniques based on the observability of inputs utilized in measuring assets and liabilities at fair values. This hierarchy establishes market-based or observable inputs as the preferred source of values, followed by valuation models using management assumptions in the absence of market inputs. The three levels of the hierarchy are as follows: Level 1 – Quoted prices (unadjusted) in active markets for identical assets or liabilities that the reporting entity can access at the assessment date; Level 2 – Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly; and Level 3 – Unobservable inputs for the asset or liability. Our financial instruments consist of cash and cash equivalents, accounts and other receivables, derivative assets and liabilities, our outstanding notes and other debt, settlement payable, contingent consideration and accounts, interest and dividends payable. The following table summarizes the fair value of our financial instruments at September 30, 2022 and December 31, 2021: (Thousands) Total Quoted Prices in Active Markets (Level 1) Prices with Other Observable Inputs (Level 2) Prices with Unobservable At September 30, 2022 Liabilities Senior secured notes - 7.875%, due February 15, 2025 $ 2,198,565 $ — $ 2,198,565 $ — Senior secured notes - 4.75%, due April 15, 2028 451,640 — 451,640 — Senior unsecured notes - 6.50% , due February 15, 2029 748,728 — 748,728 — Senior unsecured notes - 6.00%, due January 15, 2030 447,965 — 447,965 — Exchangeable senior notes - 4.00%, due June 15, 2024 316,517 — 316,517 — Senior secured revolving credit facility, variable rate, due December 10, 2024 274,972 — 274,972 — Settlement payable 235,225 — 235,225 — Derivative liability, net 822 — 822 — Total $ 4,674,434 $ — $ 4,674,434 $ — (Thousands) Total Quoted Prices in Active Markets (Level 1) Prices with Other Observable Inputs (Level 2) Prices with Unobservable At December 31, 2021 Liabilities Senior secured notes - 7.875%, due February 15, 2025 $ 2,351,576 $ — $ 2,351,576 $ — Senior secured notes - 4.75%, due April 15, 2028 560,857 — 560,857 — Senior unsecured notes - 6.50% , due February 15, 2029 1,087,844 — 1,087,844 — Senior unsecured notes - 6.00%, due January 15, 2030 659,992 — 659,992 — Exchangeable senior notes - 4.00%, due June 15, 2024 453,104 — 453,104 — Senior secured revolving credit facility, variable rate, due December 10, 2024 199,980 — 199,980 — Settlement payable 254,725 — 254,725 — Derivative liability, net 10,413 — 10,413 — Total $ 5,578,491 $ — $ 5,578,491 $ — The carrying value of cash and cash equivalents, accounts and other receivables, and accounts, interest and dividends payable approximate fair values due to the short-term nature of these financial instruments. The total principal balance of our outstanding notes and other debt was $5.25 billion at September 30, 2022, with a fair value of $4.44 billion. The estimated fair value of our outstanding notes and other debt was based on available external pricing data and current market rates for similar debt instruments, among other factors, which are classified as Level 2 inputs within the fair value hierarchy. Derivative assets and liabilities are carried at fair value. See Note 8 . The fair value of an interest rate swap is determined based on the present value of expected future cash flows using observable, quoted LIBOR swap rates for the full term of the swap and also incorporate credit valuation adjustments to appropriately reflect both Uniti’s own non-performance risk and non-performance risk of the respective counterparties. The Company has determined that the majority of the inputs used to value its derivative assets and liabilities fall within Level 2 of the fair value hierarchy; however, the associated credit valuation adjustments utilized Level 3 inputs, such as estimates of credit spreads, to evaluate the likelihood of default by the Company and its counterparties. As of September 30, 2022, the Company has assessed the significance of the impact of the credit valuation adjustments on the overall valuation of its derivative positions and has determined that the credit valuation adjustment is not significant to the overall value of the derivatives. As such, the Company classifies its derivative assets and liabilities valuation in Level 2 of the fair value hierarchy. Given the limited trade activity of the Exchangeable Notes, the fair value of the Exchangeable Notes ( see Note 10 ) is determined based on inputs that are observable in the market and have been classified as Level 2 in the fair value hierarchy. Specifically, we estimated the fair value of the Exchangeable Notes based on readily available external pricing information, quoted market prices, and current market rates for similar convertible debt instruments. Uniti is required to make $490.1 million of cash payments to Windstream in equal installments over 20 consecutive quarters beginning October 2020 (the “Settlement Payable”). See Note 13 . The Settlement Payable was recorded at fair value, using the present value of future cash flows. The future cash flows are discounted using discount rate input based on observable market data. Accordingly, we classify inputs used as Level 2 in the fair value hierarchy. As of September 30, 2022, the remaining Settlement Payable is $248.1 million and is reported on our Condensed Consolidated Balance Sheets. There have been no changes in the valuation methodologies used since the initial recording. |
Property, Plant and Equipment
Property, Plant and Equipment | 9 Months Ended |
Sep. 30, 2022 | |
Property, Plant and Equipment [Abstract] | |
Property, Plant and Equipment | Property, Plant and Equipment The carrying value of property, plant and equipment is as follows: (Thousands) Depreciable Lives September 30, 2022 December 31, 2021 Land Indefinite $ 28,678 $ 28,449 Building and improvements 3 - 40 years 361,592 359,980 Poles 30 years 293,504 281,130 Fiber 30 years 4,354,532 4,107,519 Equipment 5 - 7 years 375,340 331,761 Copper 20 years 3,955,180 3,918,281 Conduit 30 years 89,925 89,859 Tower assets 20 years 8,544 8,544 Finance lease assets (1) 73,203 72,284 Other assets 15 - 20 years 10,451 10,652 Corporate assets 3 - 7 years 14,775 14,326 Construction in progress (1) 40,141 27,366 9,605,865 9,250,151 Less accumulated depreciation (5,912,284) (5,741,212) Net property, plant and equipment $ 3,693,581 $ 3,508,939 (1) See our Annual Report for property, plant and equipment accounting policies. Depreciation expense for the three and nine months ended September 30, 2022 was $66.1 million and $194.9 million, respectively. Depreciation expense for the three and nine months ended September 30, 2021 was $65.7 million and $196.8 million, respectively. |
Derivative Instruments and Hedg
Derivative Instruments and Hedging Activities | 9 Months Ended |
Sep. 30, 2022 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Derivative Instruments and Hedging Activities | Derivative Instruments and Hedging ActivitiesThe Company uses derivative instruments to mitigate the effects of interest rate volatility inherent in our variable rate debt, which could unfavorably impact our future earnings and forecasted cash flows. The Company does not use derivative instruments for speculative or trading purposes. On April 27, 2015, we entered into fixed for floating interest rate swap agreements to mitigate the interest rate risk inherent in our variable rate senior secured term loan B facility. These interest rate swaps were designated as cash flow hedges and have a notional value of $2.0 billion and mature on October 24, 2022. As a result of the repayment of the Company’s senior secured term loan B facility in February 2020, the Company entered into receive-fixed interest rate swaps to offset its existing pay-fixed interest rate swaps. As a result, the Company discontinued hedge accounting as the hedge accounting requirements were no longer met. Amounts in accumulated other comprehensive loss as of the date of de-designation will be reclassified to interest expense as the hedged transactions impact earnings. Prospectively, changes in fair value of all interest rate swaps will be recorded directly to earnings. The Company has elected to offset derivative positions that are subject to master netting arrangements with the same counterparty in our Condensed Consolidated Balance Sheets. The following tables present the gross amounts of our derivative instruments subject to master netting arrangements with the same counterparty as of September 30, 2022 and December 31, 2021: Offsetting of Derivative Assets and Liabilities (Thousands) Gross Amounts of Recognized Assets or Liabilities Gross Amounts Offset in the Condensed Consolidated Balance Sheets Net Amounts of Assets or Liabilities presented in the Condensed Consolidated Balance Sheets At September 30, 2022 Assets Interest rate swaps $ 1,278 $ (1,278) $ — Total $ 1,278 $ (1,278) $ — Liabilities Interest rate swaps $ 2,100 $ (1,278) $ 822 Total $ 2,100 $ (1,278) $ 822 Offsetting of Derivative Assets and Liabilities (Thousands) Gross Amounts of Recognized Assets or Liabilities Gross Amounts Offset in the Condensed Consolidated Balance Sheets Net Amounts of Assets or Liabilities presented in the Condensed Consolidated Balance Sheets At December 31, 2021 Assets Interest rate swaps $ 10,788 $ (10,788) $ — Total $ 10,788 $ (10,788) $ — Liabilities Interest rate swaps $ 21,201 $ (10,788) $ 10,413 Total $ 21,201 $ (10,788) $ 10,413 The following table summarizes the fair value and the presentation in our Condensed Consolidated Balance Sheets: (Thousands) Location on Condensed Consolidated Balance Sheets September 30, 2022 December 31, 2021 Interest rate swaps Derivative liability, net $ 822 $ 10,413 As of September 30, 2022, the interest rate swaps were valued in net unrealized loss positions and recognized as liability balances within derivative liability, net in our Condensed Consolidated Balance Sheets. As hedge accounting is no longer applied beginning in February 2020, the unrealized loss amounts are now being recorded directly to earnings. The amount reclassified out of other comprehensive income into interest expense on our Condensed Consolidated Statements of Income for the three and nine months ended September 30, 2022 was $2.8 million and $8.5 million, respectively. The amount reclassified out of other comprehensive income into interest expense on our Condensed Consolidated Statements of Income for the three and nine months ended September 30, 2021 was $2.8 million and $8.5 million, respectively. During the next twelve months, beginning October 1, 2022, we estimate that $0.8 million will be reclassified as an increase to interest expense. Exchangeable Notes Hedge Transactions On June 25, 2019, concurrently with the pricing of the Exchangeable Notes, and on June 27, 2019, concurrently with the exercise by the initial purchasers involved in the offering of the Exchangeable Notes (the “Initial Purchasers”) of their option to purchase additional Exchangeable Notes, Uniti Fiber Holdings Inc., the issuer of the Exchangeable Notes, entered into exchangeable note hedge transactions with respect to the Company’s common stock ( the “Note Hedge Transactions”) with certain of the Initial Purchasers or their respective affiliates (collectively, the “Counterparties”) . The Note Hedge Transactions cover, subject to anti-dilution adjustments substantially similar to those applicable to the Exchangeable Notes, the same number of shares of the Company’s common stock that initially underlie the Exchangeable Notes in the aggregate and are exercisable upon exchange of the Exchangeable Notes. The Note Hedge Transactions have an initial strike price that corresponds to the initial exchange price of the Exchangeable Notes, subject to anti-dilution adjustments substantially similar to those applicable to the Exchangeable Notes. The Note Hedge Transactions will expire upon the maturity of the Exchangeable Notes, if not earlier exercised. The Note Hedge Transactions are intended to reduce potential dilution to the Company’s common stock upon any exchange of the Exchangeable Notes and/or offset any cash payments Uniti Fiber is required to make in excess of the principal amount of exchanged Exchangeable Notes, as the case may be, in the event that the market value per share of the Company’s common stock, as measured under the Note Hedge Transactions, at the time of exercise is greater than the strike price of the Note Hedge Transactions. The Note Hedge Transactions are separate transactions, entered into by Uniti Fiber Holdings Inc. with the Counterparties, and are not part of the terms of the Exchangeable Notes. Holders of the Exchangeable Notes will not have any rights with respect to the Note Hedge Transactions. The Note Hedge Transactions meet certain accounting criteria under GAAP, are recorded in additional paid-in capital on our Condensed Consolidated Balance Sheets and are not accounted for as derivatives that are remeasured each reporting period. Warrant Transactions On June 25, 2019, concurrently with the pricing of the Exchangeable Notes, and on June 27, 2019 concurrently with the exercise by the Initial Purchasers of their option to purchase additional Exchangeable Notes, the Company entered into warrant transactions to sell to the Counterparties Warrants (the “Warrants”) to acquire, subject to anti-dilution adjustments, up to approximately 27.8 million shares of the Company’s common stock in the aggregate at an exercise price of approximately $16.42 per share. The maximum number of shares of the Company’s common stock that could be issued pursuant to the Warrants is approximately 55.5 million. The Company offered and sold the Warrants in reliance on the exemption from registration provided by Section 4(a)(2) of the Securities Act of 1933, as amended. If the market value per share of the Company’s common stock, as measured under the Warrants, at the time of exercise exceeds the strike price of the Warrants, the Warrants will have a dilutive effect on the Company’s common stock unless, subject to the terms of the Warrants, the Company elects to cash settle the Warrants. The Warrants will expire over a period beginning in September 2024. |
Goodwill and Intangible Assets
Goodwill and Intangible Assets and Liabilities | 9 Months Ended |
Sep. 30, 2022 | |
Goodwill And Intangible Assets And Liabilities Disclosure [Abstract] | |
Goodwill and Intangible Assets and Liabilities | Goodwill and Intangible Assets and Liabilities Changes in the carrying amount of goodwill occurring during the nine months ended September 30, 2022 are as follows: (Thousands) Fiber Infrastructure Total Goodwill at December 31, 2021 $ 601,878 $ 601,878 Goodwill impairment (Note 2) (216,000) $ (216,000) Goodwill at September 30, 2022 $ 385,878 $ 385,878 (Thousands) September 30, 2022 December 31, 2021 Original Cost Accumulated Amortization Original Cost Accumulated Finite life intangible assets: Customer lists $ 416,104 $ (123,012) $ 416,104 $ (105,861) Contracts 52,536 (13,134) 52,536 (8,209) Underlying Rights 10,497 (700) 10,497 (437) Total intangible assets $ 479,137 $ 479,137 Less: accumulated amortization (136,846) (114,507) Total intangible assets, net $ 342,291 $ 364,630 Finite life intangible liabilities: Below-market leases $ 191,154 (21,389) $ 191,154 (13,368) Finite life intangible liabilities: Below-market leases $ 191,154 $ 191,154 Less: accumulated amortization (21,389) (13,368) Total intangible liabilities, net $ 169,765 $ 177,786 As of September 30, 2022, the remaining weighted average amortization period of the Company’s intangible assets was 14.4 years. Amortization expense for the three and nine months ended September 30, 2022 was $7.5 million and $22.3 million, respectively. Amortization expense for the three and nine months ended September 30, 2021 was $4.8 million and $14.3 million, respectively. Amortization expense is estimated to be $29.8 million for the full year of 2022, $29.8 million in 2023, $29.7 million in 2024, $29.7 million in 2025, and $29.7 million for 2026. |
Notes and Other Debt
Notes and Other Debt | 9 Months Ended |
Sep. 30, 2022 | |
Long-Term Debt, Unclassified [Abstract] | |
Notes and Other Debt | Notes and Other DebtAll debt, including the senior secured credit facility and notes described below, are obligations of the Operating Partnership and/or certain of its subsidiaries as discussed below. The Company is, however, a guarantor of such debt. Notes and other debt are as follows: (Thousands) September 30, 2022 December 31, 2021 Principal amount $ 5,250,000 $ 5,175,000 Less unamortized discount, premium and debt issuance costs (70,673) (84,463) Notes and other debt less unamortized discount, premium and debt issuance costs $ 5,179,327 $ 5,090,537 Notes and other debt at September 30, 2022 and December 31, 2021 consisted of the following: September 30, 2022 December 31, 2021 (Thousands) Principal Unamortized Discount, Premium and Debt Issuance Costs Principal Unamortized Discount, Premium and Debt Issuance Costs Senior secured notes - 7.875%, due February 15, 2025 (discount is based on imputed interest rate of 8.38%) $ 2,250,000 $ (24,604) $ 2,250,000 $ (31,411) Senior secured notes - 4.75%, due April 15, 2028 (discount is based on imputed interest rate of 5.04%) 570,000 (7,968) 570,000 (8,886) Senior unsecured notes - 4.00%, due June 15, 2024 (discount is based on imputed interest rate of 4.77%) 345,000 (4,376) 345,000 (6,187) Senior unsecured notes - 6.50%, due February 15, 2029 (discount is based on imputed interest rate of 6.83%) 1,110,000 (18,840) 1,110,000 (20,797) Senior unsecured notes - 6.00% due January 15, 2030 (discount is based on imputed interest rate of 6.27%) 700,000 (10,831) 700,000 (11,689) Senior secured revolving credit facility, variable rate, due December 10, 2024 275,000 (4,054) 200,000 (5,493) Total $ 5,250,000 $ (70,673) $ 5,175,000 $ (84,463) At September 30, 2022, notes and other debt included the following: (i) $275.0 million under the Revolving Credit Facility (as defined below) pursuant to the credit agreement by and among Uniti Group LP, Uniti Group Finance 2019 Inc. and CSL Capital, LLC (the “Borrowers”), the guarantors and lenders party thereto and Bank of America, N.A., as administrative agent and collateral agent (the “Credit Agreement”); (ii) $2.25 billion aggregate principal amount of 7.875% Senior Secured Notes due 2025 (the “2025 Secured Notes”); (iii) $570.0 million aggregate principal amount of 4.75% Senior Secured Notes due 2028 (the “2028 Secured Notes”); (iv) $1.11 billion aggregate principal amount of 6.50% Senior Notes due February 15, 2029 (the “2029 Notes”); and (v) $345.0 million aggregate principal amount of 4.00% Exchangeable Senior Notes due June 15, 2024 (the “Exchangeable Notes”); and (vi) $700.0 million aggregate principal amount of 6.00% Senior Unsecured Notes due January 15, 2030 (the “2030 Notes” and collectively with the 2025 Secured Notes, the 2028 Secured Notes, the 2029 Notes and the Exchangeable Notes, the “Notes”). T he terms of the Notes are as described in the Company’s Annual Report on Form 10-K for the year ended December 31, 2021. Credit Agreement The Borrowers are party to the Credit Agreement, which provides for a $500 million revolving credit facility that will mature on December 10, 2024 (the “Revolving Credit Facility”) and provides us with the ability to obtain revolving loans as well as swingline loans and letters of credit from time to time. All obligations under the Credit Agreement are guaranteed by (i) the Company and (ii) certain of the Operating Partnership’s subsidiaries (the “Subsidiary Guarantors”) and are secured by substantially all of the assets of the Borrowers and the Subsidiary Guarantors. The Borrowers are subject to customary covenants under the Credit Agreement, including an obligation to maintain a consolidated secured leverage ratio, as defined in the Credit Agreement, not to exceed 5.00 to 1.00. We are permitted, subject to customary conditions, to incur other indebtedness, so long as, on a pro forma basis after giving effect to any such indebtedness, our consolidated total leverage ratio, as defined in the Credit Agreement, does not exceed 6.50 to 1.00 and, if such debt is secured, our consolidated secured leverage ratio, as defined in the Credit Agreement, does not exceed 4.00 to 1.00. In addition, the Credit Agreement contains customary events of default, including a cross default provision whereby the failure of the Borrowers or certain of their subsidiaries to make payments under other debt obligations, or the occurrence of certain events affecting those other borrowing arrangements, could trigger an obligation to repay any amounts outstanding under the Credit Agreement. In particular, a repayment obligation could be triggered if (i) the Borrowers or certain of their subsidiaries fail to make a payment when due of any principal or interest on any other indebtedness aggregating $75.0 million or more, or (ii) an event occurs that causes, or would permit the holders of any other indebtedness aggregating $75.0 million or more to cause, such indebtedness to become due prior to its stated maturity. As of September 30, 2022, the Borrowers were in compliance with all of the covenants under the Credit Agreement. A termination of either Windstream Lease would result in an “event of default” under the Credit Agreement if a replacement lease is not entered into within ninety (90) calendar days and we do not maintain pro forma compliance with a consolidated secured leverage ratio, as defined in the Credit Agreement, of 5.00 to 1.00. Borrowings under the Revolving Credit Facility bear interest at a rate equal to either a base rate plus an applicable margin ranging from 2.75% to 3.50% or a eurodollar rate plus an applicable margin ranging from 3.75% to 4.50% in each case, calculated in a customary manner and determined based on our consolidated secured leverage ratio. We are required to pay a quarterly commitment fee under the Revolving Credit Facility equal to 0.50% of the average amount of unused commitments during the applicable quarter (subject to a step-down to 0.40% per annum of the average amount of unused commitments during the applicable quarter upon achievement of a consolidated secured leverage ratio not to exceed a certain level), as well as quarterly letter of credit fees equal to the product of (A) the applicable margin with respect to eurodollar borrowings and (B) the average amount available to be drawn under outstanding letters of credit during such quarter. Deferred Financing Cost Deferred financing costs were incurred in connection with the issuance of the Notes and the Revolving Credit Facility. These costs are amortized using the effective interest method over the term of the related indebtedness and are included in interest expense in our Condensed Consolidated Statements of Income. For the three and nine months ended September 30, 2022, we recognized $4.4 million and $13.0 million, respectively, of non-cash interest expense related to the amortization of deferred financing costs. For the three and nine months ended September 30, 2021, we recognized $4.2 million and $12.4 million, respectively, of non-cash interest expense related to the amortization of deferred financing costs. |
Earnings Per Share
Earnings Per Share | 9 Months Ended |
Sep. 30, 2022 | |
Earnings Per Share [Abstract] | |
Earnings Per Share | Earnings Per Share Our time-based restricted stock awards are considered participating securities as they receive non-forfeitable rights to dividends at the same rate as common stock. As participating securities, we included these instruments in the computation of earnings per share under the two-class method described in FASB ASC 260, Earnings per Share (“ASC 260”). We also have outstanding performance-based restricted stock units that contain forfeitable rights to receive dividends. Therefore, the awards are considered non-participating restrictive shares and are not dilutive under the two-class method until performance conditions are met. The dilutive effect of the Exchangeable Notes is calculated by using the “if-converted” method. This assumes an add-back of interest, net of income taxes, to net income attributable to shareholders as if the securities were converted at the beginning of the reporting period (or at time of issuance, if later) and the resulting common shares included in number of weighted average shares. The dilutive effect of the Warrants ( see Note 8 ) is calculated using the treasury-stock method. During the three and nine months ended September 30, 2022 and 2021, the Warrants were excluded from diluted shares outstanding because the exercise price exceeded the average market price of our common stock for the reporting period. The following sets forth the computation of basic and diluted earnings per share under the two-class method: Three Months Ended September 30, Nine Months Ended September 30, (Thousands, except per share data) 2022 2021 2022 2021 Basic earnings per share: Numerator: Net (loss) income attributable to shareholders $ (155,679) $ 43,366 $ (49,252) $ 87,835 Less: Income allocated to participating securities (226) (283) (897) (864) Dividends declared on convertible preferred stock (5) (3) (15) (8) Net (loss) income attributable to common shares $ (155,910) $ 43,080 $ (50,164) $ 86,963 Denominator: Basic weighted-average common shares outstanding 235,739 233,513 235,483 232,269 Basic (loss) earnings per common share $ (0.66) $ 0.18 $ (0.21) $ 0.37 Three Months Ended September 30, Nine Months Ended September 30, (Thousands, except per share data) 2022 2021 2022 2021 Diluted earnings per share: Numerator: Net (loss) income attributable to shareholders $ (155,679) $ 43,366 $ (49,252) $ 87,835 Less: Income allocated to participating securities (226) (283) (897) (864) Dividends declared on convertible preferred stock (5) (3) (15) (8) Impact on if-converted dilutive securities — 2,984 — — Net (loss) income attributable to common shares $ (155,910) $ 46,064 $ (50,164) $ 86,963 Denominator: Basic weighted-average common shares outstanding 235,739 233,513 235,483 232,269 Effect of dilutive non-participating securities — 338 — 271 Impact on if-converted dilutive securities — 30,570 — — Weighted-average shares for dilutive earnings per common share 235,739 264,421 235,483 232,540 Dilutive (loss) earnings per common share $ (0.66) $ 0.17 $ (0.21) $ 0.37 For the three and nine months ended September 30, 2022, 847,147 non-participating securities were excluded from the computation of earnings per share, as their effect would have been anti-dilutive. For the three and nine months ended September 30, 2022, 31,691,390 potential common shares related to the Exchangeable Notes were excluded from the computation of earnings per share, as their effect would have been anti-dilutive. For the nine months ended September 30, 2021, 30,569,588 potential common shares related to the Exchangeable Notes were excluded from the computation of earnings per share, as their effect would have been anti-dilutive. |
Segment Information
Segment Information | 9 Months Ended |
Sep. 30, 2022 | |
Segment Reporting [Abstract] | |
Segment Information | Segment Information Our management, including our chief executive officer, who is our chief operating decision maker, manages our operations as two reportable segments, in addition to our corporate operations, which include: Leasing : Represents the operations of our leasing business, Uniti Leasing, which is engaged in the acquisition and construction of mission-critical communications assets and leasing them to anchor customers on either an exclusive or shared-tenant basis, in addition to the leasing of dark fiber on our existing dark fiber network assets that we either constructed or acquired. While the Leasing segment represents our REIT operations, certain aspects of the Leasing segment are also operated through taxable REIT subsidiaries. Fiber Infrastructure : Represents the operations of our fiber business, Uniti Fiber, which is a leading provider of infrastructure solutions, including cell site backhaul and dark fiber, to the telecommunications industry. Corporate : Represents our corporate office and shared service functions. Certain costs and expenses, primarily related to headcount, insurance, professional fees and similar charges, that are directly attributable to operations of our business segments are allocated to the respective segments. Management evaluates the performance of each segment using Adjusted EBITDA, which is a segment performance measure we define as net income determined in accordance with GAAP, before interest expense, provision for income taxes, depreciation and amortization, stock-based compensation expense and the impact, which may be recurring in nature, of transaction and integration related costs, costs associated with Windstream’s bankruptcy, costs associated with litigation claims made against us, costs associated with the implementation of our enterprise resource planning system, executive severance costs, costs related to the settlement with Windstream, amortization of non-cash rights-of-use assets, the write off of unamortized deferred financing costs, costs incurred as a result of the early repayment of debt, including early tender and redemption premiums and costs associated with the termination of related hedging activities, gains or losses on dispositions, changes in the fair value of contingent consideration and financial instruments, and other similar or infrequent items (although we may not have had such charges in the periods presented). Adjusted EBITDA includes adjustments to reflect the Company’s share of Adjusted EBITDA from unconsolidated entities. The Company believes that net income, as defined by GAAP, is the most appropriate earnings metric; however, we believe that Adjusted EBITDA serves as a useful supplement to net income because it allows investors, analysts and management to evaluate the performance of our segments in a manner that is comparable period over period. Adjusted EBITDA should not be considered as an alternative to net income as determined in accordance with GAAP. Selected financial data related to our segments is presented below for the three and nine months ended September 30, 2022 and 2021: Three Months Ended September 30, 2022 (Thousands) Leasing Fiber Infrastructure Corporate Subtotal of Reportable Segments Revenues $ 208,623 74,480 $ — $ 283,103 Adjusted EBITDA $ 203,209 28,586 (6,742) $ 225,053 Less: Interest expense 97,731 Depreciation and amortization 43,121 30,370 25 73,516 Transaction related and other costs 2,375 Gain on sale of real estate (94) Gain on sale of operations (176) Goodwill impairment 216,000 Other, net 600 Stock-based compensation 3,151 Income tax benefit (13,056) Adjustments for equity in earnings from unconsolidated entities 755 Net loss $ (155,749) Three Months Ended September 30, 2021 (Thousands) Leasing Fiber Infrastructure Corporate Subtotal of Reportable Segments Revenues $ 199,485 $ 67,262 $ — $ 266,747 Adjusted EBITDA $ 194,303 $ 27,556 $ (4,632) $ 217,227 Less: Interest expense 94,793 Depreciation and amortization 41,432 29,036 62 70,530 Transaction related and other costs 1,063 Gain on sale of real estate — Gain on sale of operations — Other, net 4,472 Stock-based compensation 4,166 Income tax benefit (2,244) Adjustments for equity in earnings from unconsolidated entities 765 Net income $ 43,682 Nine Months Ended September 30, 2022 (Thousands) Leasing Fiber Infrastructure Corporate Subtotal of Reportable Segments Revenues 618,878 226,234 $ — $ 845,112 Adjusted EBITDA 602,531 93,628 (19,153) $ 677,006 Less: Interest expense 290,280 Depreciation and amortization 127,738 89,440 98 217,276 Transaction related and other costs 7,324 Gain on sale of real estate (344) Gain on sale of operations (176) Goodwill impairment 216,000 Other, net (6,534) Stock-based compensation 9,664 Income tax benefit (10,183) Adjustments for equity in earnings from unconsolidated entities 2,816 Net loss $ (49,117) Nine Months Ended September 30, 2021 (Thousands) Leasing Fiber Infrastructure Corporate Subtotal of Reportable Segments Revenues $ 590,478 $ 217,035 $ — $ 807,513 Adjusted EBITDA $ 577,937 $ 86,716 $ (17,444) $ 647,209 Less: Interest expense 341,762 Depreciation and amortization 124,132 86,838 195 211,165 Transaction related and other costs 5,624 Gain on sale of real estate (442) Gain on sale of operations (28,143) Other, net 14,569 Stock-based compensation 10,963 Income tax expense 283 Adjustments for equity in earnings from unconsolidated entities 2,609 Net income $ 88,819 |
Commitments and Contingencies
Commitments and Contingencies | 9 Months Ended |
Sep. 30, 2022 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Commitments and Contingencies In the ordinary course of our business, we are subject to claims and administrative proceedings, none of which we believe are material or would be expected to have, individually or in the aggregate, a material adverse effect on our business, financial condition, cash flows or results of operations. Windstream Commitments Following the consummation of our settlement agreement with Windstream, including entry into the Windstream Leases, we are obligated to make $490.1 million of cash payments to Windstream in equal installments over 20 consecutive quarters beginning in October 2020, and Uniti may prepay any installments due on or after the first anniversary of the settlement agreement (discounted at a 9% rate). On October 14, 2021, the Company prepaid four installments for a total of $92.9 million. As of September 30, 2022, the Company has made payments totaling $215.4 million. Further, we are obligated to reimburse Windstream for up to an aggregate of $1.75 billion for certain growth capital improvements in long-term fiber and related assets made by Windstream (“Growth Capital Improvements”) through 2029. Uniti’s reimbursement commitment for Growth Capital Improvements does not require Uniti to reimburse Windstream for maintenance or repair expenditures (except for costs incurred for fiber replacements to the property leased under the competitive local exchange carrier master lease agreement, up to $70 million during the term), and each such reimbursement is subject to underwriting standards. Uniti’s total annual reimbursement commitments for the Growth Capital Improvements under both Windstream Leases (and under separate equipment loan facilities) were limited to $125 million in 2020, $225 million in 2021, and are limited to $225 million per year in 2022 through 2024; $175 million per year in 2025 and 2026; and $125 million per year in 2027 through 2029. If the cost incurred by Windstream (or the successor tenant under a Windstream Lease) for Growth Capital Improvements in any calendar year exceeds the annual limit for such calendar year, Windstream (or such tenant, as the case may be) may submit such excess costs for reimbursement in any subsequent year and such excess costs shall be funded from the annual commitment amounts in such subsequent period. In addition, to the extent that reimbursements for Growth Capital Improvements funded in any calendar year during the term is less than the annual limit for such calendar year, the unfunded amount in any calendar year will carry-over and may be added to the annual limits for subsequent calendar years, subject to an annual limit of $250 million in any calendar year. During the nine months ended September 30, 2022, Uniti reimbursed $158.1 million of Growth Capital Improvements, of which $30.6 million represented the reimbursement of capital improvements completed in 2021 that were previously classified as tenant funded capital improvements. Upon reimbursement, the Company reduced the unamortized portion of deferred revenue related to these capital improvements and capitalized the difference between the cash provided to Windstream and the unamortized deferred revenue as a lease incentive. This lease incentive, which is $0.8 million and reported within other assets on our Condensed Consolidated Balance Sheets as of September 30, 2022, will be amortized as a reduction to revenue over the initial term of the Windstream Leases. Starting on the first anniversary of each installment of reimbursement for a Growth Capital Improvement, the rent payable by Windstream under the applicable Windstream Lease will increase by an amount equal to 8.0% (the “Rent Rate”) of such installment of reimbursement. The Rent Rate will thereafter increase to 100.5% of the prior Rent Rate on each anniversary of each reimbursement. In the event that the tenant’s interest in either Windstream Lease is transferred by Windstream under the terms thereof (unless transferred to the same transferee), or if Uniti transfers its interests as landlord under either Windstream Lease (unless to the same transferee), the reimbursement rights and obligations will be allocated between the ILEC MLA and the CLEC MLA by Windstream, provided that the maximum that may be allocated to the CLEC MLA following such transfer is $20 million per year. If Uniti fails to reimburse any Growth Capital Improvement reimbursement payment or equipment loan funding request as and when it is required to do so under the terms of the Windstream Leases, and such failure continues for thirty (30) days, then such unreimbursed amounts may be applied as an offset against the rent owed by Windstream under the Windstream Leases (and such amounts will thereafter be treated as if Uniti had reimbursed them). Uniti and Windstream have entered into separate ILEC and CLEC Equipment Loan and Security Agreements (collectively “Equipment Loan Agreement”) in which Uniti will provide up to $125 million (limited to $25 million in any calendar year) of the $1.75 billion of Growth Capital Improvements commitments discussed above in the form of loans for Windstream to purchase equipment related to network upgrades or to be used in connection with the Windstream Leases. Interest on these loans will accrue at 8% from the date of the borrowing. All equipment financed through the Equipment Loan Agreement is the sole property of Windstream; however, Uniti will receive a first-lien security interest in the equipment purchased with the loans. Other Litigation On July 3, 2019, SLF Holdings, LLC (“SLF”) filed a complaint against the Company, Uniti Fiber, and certain current and former officers of the Company (collectively, the “Defendants”) in the United States District Court for the Southern District of Alabama, in connection with Uniti Fiber’s purchase of Southern Light, LLC from SLF in July 2017. The complaint asserted claims for fraud and conspiracy, as well as claims under federal and Alabama securities laws, alleging that Defendants improperly failed to disclose to SLF the risk that the Spin-Off and entry into the Master Lease violated certain debt covenants of Windstream. On September 26, 2019, the action was transferred to United States District Court for the District of Delaware. On November 18, 2019, SLF filed an amended complaint, adding allegations that Defendants also failed to fully disclose the risk that the Master Lease purportedly could be recharacterized as a financing instead of a “true lease.” The amended complaint sought compensatory and punitive damages, as well as reformation of the purchase agreement for the sale. On December 18, 2019, Defendants moved to dismiss the amended complaint in its entirety. On November 4, 2020, the court granted the Defendants’ motion and dismissed SLF’s amended complaint, in its entirety, with prejudice. On December 1, 2020, SLF filed a notice of appeal to the United States Court of Appeals for the Third Circuit from the district court’s dismissal order. On August 17, 2022, the Court of Appeals for the Third Circuit denied SLF's appeal. We have evaluated this matter under the guidance provided by ASC 450, Contingencies (“ASC 450”), and as of the date of this Quarterly Report on Form 10-Q, we consider a loss not to be probable and are unable to estimate a reasonably possible range of loss; therefore, we have not recorded any liabilities associated with these claims in our Condensed Consolidated Balance Sheets. Beginning on October 25, 2019, several purported shareholders filed separate putative class actions in the U.S. District Court for the Eastern District of Arkansas against the Company and certain of our officers, alleging violations of the federal securities laws based on claims similar to those asserted in the SLF Action. On March 12, 2020, the U.S. District Court for the Eastern District of Arkansas consolidated the Shareholder Actions and appointed lead plaintiffs and lead counsel in the consolidated cases under the caption In re Uniti Group Inc. Securities Litigation (the “Class Action”). On May 11, 2020, lead plaintiffs filed a consolidated amended complaint in the Class Action. The consolidated amended complaint seeks to represent investors who acquired the Company’s securities between April 20, 2015 and February 15, 2019. The Class Action asserts claims under Sections 10(b) and 20(a) of the Exchange Act and Rule 10b-5 promulgated thereunder, alleging that the Company made materially false and misleading statements by allegedly failing to disclose, among other things, the risk that the Spin-Off and entry into the Master Lease violated certain debt covenants of Windstream and/or the risk that the Master Lease purportedly could be recharacterized as a financing instead of a “true lease.” The Class Action seeks class certification, unspecified monetary damages, costs and attorneys’ fees and other relief. On July 10, 2020, defendants moved to dismiss the consolidated amended complaint. On April 1, 2021, the court issued an order denying defendants’ motion to dismiss. On April 15, 2021, defendants filed a motion for reconsideration of the order or, in the alternative, for certification of an appeal of the decision to the Eighth Circuit. On October 25, 2021, plaintiffs filed a motion for class certification, which defendants opposed . On December 22, 2021, the court issued an order denying defendants’ motion for reconsideration or, in the alternative, certification of an appeal. On March 25, 2022, the parties reached an agreement to settle the Class Action, on behalf of a settlement class, for $38.9 million, to be funded entirely by the Company’s insurance carriers. On June 17, 2022, the parties signed a stipulation of settlement and plaintiffs moved for preliminary approval of the settlement. The court granted preliminary approval on July 20, 2022. The settlement remains subject to final court approval. In accordance with ASC 450, we recorded $38.9 million of settlement expense within general and administrative expense within our Condensed Consolidated Statements of Income during the first quarter of 2022 and accounts payable, accrued expenses and other liabilities, net within our Condensed Consolidated Balance Sheets as of September 30, 2022. Additionally, we recorded the probable insurance recovery of $38.9 million as a reduction to general and administrative expense during the first quarter of 2022 within our Condensed Consolidated Statements of Income, and other assets within Condensed Consolidated Balance Sheets as of September 30, 2022. On August 17, 2021, two purported shareholders filed a derivative action on behalf of Uniti in the Circuit Court for Baltimore City, Maryland, under the caption Mayer et al. v. Gunderman et al. , 24-C-21-003488 (the “Mayer Derivative Action”). The Mayer Derivative Action names Kenneth Gunderman and Mark Wallace as defendants and the Company as a nominal defendant and asserts claims for breach of fiduciary duty and unjust enrichment. The complaint alleges that the individual defendants caused the Company to issue certain false and misleading statements relating to the Spin-Off and/or the Master Lease. In particular, as in the Shareholder Actions, the complaint alleges, among other things, that defendants failed to disclose the risk that the Spin-Off and entry into the Master Lease violated certain debt covenants of Windstream and/or the risk that the Master Lease purportedly could be recharacterized as a financing instead of a “true lease.” The complaint seeks unspecified damages, unspecified equitable relief, and related costs and fees. On December 23, 2021, the court entered a joint stipulation to stay the Mayer Derivative Action, including the time for the defendants to respond to the complaint, pending the outcome of the Class Action. Because this matter is still in its preliminary stages, we have not yet determined what effect this lawsuit will have, if any, on our financial position or results of operations. We have evaluated this matter under the guidance provided by ASC 450, and as of the date of this Quarterly Report on Form 10-Q, we consider a loss not to be probable and are unable to estimate a reasonably possible range of loss; therefore, we have not recorded any liabilities associated with these claims in our Condensed Consolidated Balance Sheets. On February 11, 2022, a purported shareholder filed a derivative action on behalf of Uniti in the federal District Court for the District of Maryland, under the caption Guzzo et al. v. Gunderman et al. , 1:22-cv-00366-GLR (the “Guzzo Derivative Action”). The complaint names Kenneth Gunderman, Mark Wallace, Francis Frantz, David Solomon, Jennifer Banner, and Scott Bruce as defendants and the Company as a nominal defendant and asserts claims for contribution against Gunderman and Wallace if the Company is found to be liable for violations of the federal securities laws in the Class Action and claims against all the individual defendants for breaches of fiduciary duty, waste of corporate assets, and unjust enrichment. The allegations in the Guzzo Derivative Action are similar to those in the Mayer Derivative Action and the Class Action. The complaint seeks unspecified damages, equitable relief, and related costs and fees. On March 16, 2022, the court entered a joint stipulation to stay the Guzzo Derivative Action, including the time for the defendants to respond to the complaint, pending the outcome of the Class Action. We intend to defend this matter vigorously, and, because it is still in its relatively early stages, we have not yet determined what effect this lawsuit will have, if any, on our financial position or results of operations. We maintain insurance policies that would provide coverage to various degrees for potential liabilities arising from the legal proceedings described above. Under t he terms of the tax matters agreement entered into on April 24, 2015 by the Company, Windstream Services, LLC and Windstream (the “Tax Matters Agreement”), in connection with the Spin-Off, we are generally responsible for any taxes imposed on Windstream that arise from the failure of the Spin-Off and the debt exchanges to qualify as tax-free for U.S. federal income tax purposes, within the meaning of Section 355 and Section 368(a)(1)(D) of the Code, as applicable, to the extent such failure to qualify is attributable to certain actions, events or transactions relating to our stock, indebtedness, assets or business, or a breach of the relevant representations or any covenants made by us in the Tax Matters Agreement, the materials submitted to the IRS in connection with the request for the private letter ruling or the representations provided in connection with the tax opinion. We believe that the probability of us incurring obligations under the Tax Matters Agreement are remote; and therefore, we have recorded no such liabilities in our Condensed Consolidated Balance Sheets as of September 30, 2022. |
Accumulated Other Comprehensive
Accumulated Other Comprehensive Loss | 9 Months Ended |
Sep. 30, 2022 | |
Accumulated Other Comprehensive Income (Loss), Net of Tax [Abstract] | |
Accumulated Other Comprehensive Loss | Accumulated Other Comprehensive Loss Changes in accumulated other comprehensive loss by component is as follows for the three and nine months ended September 30, 2022 and 2021: Three Months Ended September 30, Nine Months Ended September 30, (Thousands) 2022 2021 2022 2021 Cash flow hedge changes in fair value: Balance at beginning of period attributable to shareholders $ (30,353) $ (30,353) $ (30,353) $ (30,353) Balance at end of period attributable to shareholders (30,353) (30,353) (30,353) (30,353) Interest rate swap termination: Balance at beginning of period attributable to shareholders 26,837 15,561 21,189 9,986 Amounts reclassified from accumulated other comprehensive income 2,829 2,830 8,488 8,488 Balance at end of period 29,666 18,391 29,677 18,474 Less: Other comprehensive income attributable to noncontrolling interest $ 1 22 12 105 Balance at end of period attributable to shareholders 29,665 18,369 29,665 18,369 Accumulated other comprehensive loss at end of period $ (688) $ (11,984) $ (688) $ (11,984) |
Capital Stock
Capital Stock | 9 Months Ended |
Sep. 30, 2022 | |
Equity [Abstract] | |
Capital Stock | Capital StockThe limited partner equity interests in our operating partnership (commonly called “OP Units”), are exchangeable on a one-for-one basis for shares of our common stock or, at our election, cash of equivalent value. No OP Units held by third parties were exchanged during the three months ended September 30, 2022. During the nine months ended September 30, 2022, the Company exchanged 591,349 OP Units held by third parties, of which 244,683 OP Units were exchanged for an equal number of common shares of the Company and 346,667 OP Units were exchanged for cash consideration of $4.6 million, representing approximately 85% of the OP Units held by third parties with a carrying value of $11.9 million as of the exchange dates. |
Basis of Presentation and Sum_2
Basis of Presentation and Summary of Significant Accounting Policies (Policies) | 9 Months Ended |
Sep. 30, 2022 | |
Accounting Policies [Abstract] | |
Consolidation | The accompanying Condensed Consolidated Financial Statements include all accounts of the Company and its wholly-owned and/or controlled subsidiaries, including the Operating Partnership. Under the Accounting Standards Codification 810, Consolidation (“ASC 810”), the Operating Partnership is considered a variable interest entity and is consolidated in the Condensed Consolidated Financial Statements of Uniti Group Inc. because the Company is the primary beneficiary. All material intercompany balances and transactions have been eliminated. |
Basis of Accounting | The accompanying Condensed Consolidated Financial Statements have been prepared in accordance with U.S. generally accepted accounting principles (“GAAP”) for interim financial information set forth in the Accounting Standards Codification (“ASC”), as published by the Financial Accounting Standards Board (“FASB”), and with the applicable rules and regulations of the Securities and Exchange Commission (“SEC”). Accordingly, they do not include all of the information and footnotes required by GAAP for complete financial statements. In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for a fair statement of results for the interim period have been included. Operating results from any interim period are not necessarily indicative of the results that may be expected for the full fiscal year. The accompanying Condensed Consolidated Financial Statements and related notes should be read in conjunction with the audited consolidated financial statements and notes thereto included in our Annual Report on Form 10-K filed with the SEC on February 25, 2022 , as amended by Amendment No. 1 thereto filed on Form 10-K/A with the SEC on March 22, 2022 |
Concentration of Credit Risks | Concentration of Credit Risks —Prior to September 2020, we were party to a long-term exclusive triple-net lease (the “Master Lease”) with Windstream Holdings, Inc. (together with Windstream Holdings II, LLC, its successor in interest, and its subsidiaries, “Windstream”) pursuant to which a substantial portion of our real property was leased to Windstream and from which a substantial portion of our leasing revenues were derived. On September 18, 2020, Uniti and Windstream bifurcated the Master Lease and entered into two structurally similar master leases (collectively, the “Windstream Leases”), which amended and restated the Master Lease in its entirety. Revenue under the Windstream Leases provided 66.4% and 67.6% of our revenue for the nine months ended September 30, 2022 and 2021, respectively. Because a substantial portion of our revenue and cash flows are derived from lease payments by Windstream pursuant to the Windstream Leases, there could be a material adverse impact on our consolidated results of operations, liquidity, financial condition and/or ability to pay dividends and service debt if Windstream were to default under the Windstream Leases or otherwise experiences operating or liquidity difficulties and becomes unable to generate sufficient cash to make payments to us. Prior to its emergence from bankruptcy on September 21, 2020, Windstream was a publicly traded company subject to the periodic filing requirements of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). Windstream’s historic filings through their quarter ended June 30, 2020 can be found at www.sec.gov. Additionally, the Windstream audited financial statements as of December 31, 2021, and for the year ended December 31, 2021, as of December 31, 2020 and for the period from September 22, 2020 to December 31, 2020 and for the period from January 1, 2020 to September 21, 2020 and for the year ended December 31, 2019 are included as an exhibit to our Annual Report. On September 22, 2020, Windstream filed a Form 15 to terminate all filing obligations under Sections 12(g) and 15(d) under the Exchange Act. Windstream filings are not incorporated by reference in this Quarterly Report on Form 10-Q. We monitor the credit quality of Windstream through numerous methods, including by (i) reviewing credit ratings of Windstream by nationally recognized credit agencies, (ii) reviewing the financial statements of Windstream that are required to be delivered to us pursuant to the Windstream Leases, (iii) monitoring news reports regarding Windstream and its business, (iv) conducting research to ascertain industry trends potentially affecting Windstream, (v) monitoring Windstream’s compliance with the terms of the Windstream Leases and (vi) monitoring the timeliness of its payments under the Windstream Leases. As of the date of this Quarterly Report on Form 10-Q, Windstream is current on all lease payments. We note that in August 2020, Moody’s Investor Service assigned a B3 corporate family rating with a stable outlook to Windstream in connection with its post-emergence exit financing. At the same time, S&P Global Ratings assigned Windstream a B- issuer rating with a stable outlook. Both ratings remain current as of the date of this filing. In order to assist us in our continuing assessment of Windstream’s creditworthiness, we periodically receive certain confidential financial information and metrics from Windstream. |
Goodwill | Goodwill —As of September 30, 2022 and December 31, 2021, all of our goodwill is included in our Fiber Infrastructure segment. Goodwill is recognized for the excess of purchase price over the fair value of net assets of businesses acquired. Goodwill is reviewed for impairment on an annual basis during the fourth quarter. Application of the goodwill impairment test requires significant judgment, including: the identification of reporting units; assignment of assets and liabilities to reporting units; and assignment of goodwill to reporting units. In accordance with ASC 350-20, Intangibles-Goodwill and Other , we evaluate goodwill for impairment between annual impairment tests if an event occurs or circumstances change that would more likely than not reduce the fair value of a reporting unit below its carrying amount (a “Triggering Event”). On the occurrence of a Triggering Event, an entity has the option to first assess qualitative factors to determine whether a quantitative impairment test is necessary. If it is more likely than not that goodwill is impaired, the fair value of the reporting unit must be compared with its carrying value. In performing the quantitative assessment of goodwill, we estimate the fair value of our fiber reporting unit using a combination of an income approach based on the present value of estimated future cash flows and a market approach based on market data of comparable businesses, and acquisition multiples paid in recent transactions. Inherent in our preparation of cash flow projections are significant assumptions and estimates derived from a review of our operating results and business plans, which include expected revenue and expense growth rates, capital expenditure plans and discount rate. In determining these assumptions, we consider our ability to execute on our plans, future economic conditions, interest rates and other market data. Many of the factors used in assessing fair value are outside the control of management, and these assumptions and estimates may change in future periods. Small changes in these assumptions or estimates could materially affect our cash flow projections, and therefore could affect the likelihood and amount of potential impairment in future periods. Potential events that could negatively impact these assumptions or estimates may include customer losses or poor execution of our business plans, which impact revenue growth, cost escalation impacting margin, the level of capital expenditures required to sustain our growth and market factors, including stock price fluctuations and increased interest rates, impacting our discount rate. For example, if we were to experience a significant delay in our permitting process in the construction of our fiber networks, the timing of effected cash flows could impact long term growth rates and negatively impact the income approach, leading to potential impairment. As a result, should our expectations of average projected revenue growth percentage, average projected EBITDA margin percentage and/or average projected capital expenditures as a percentage of revenue change, we may experience future impairment to goodwill (while other assumptions remain constant). Furthermore, a deterioration in market factors such as stock prices or increased interest rates |
Reclassifications | Reclassifications —Certain prior year asset and liability categories and related amounts have been reclassified to conform with current year presentation. |
Recently Adopted Accounting Pronouncements | Recently Adopted Accounting Pronouncements In May 2021 , the FASB issued ASU 2021-04, Earnings Per Share (Topic 260), Debt—Modifications and Extinguishments (Subtopic 470-50), Compensation— Stock Compensation (Topic 718), and Derivatives and Hedging—Contracts in Entity’s Own Equity (Subtopic 815- 40) : Issuer’s Accounting for Certain Modifications or Exchanges of Freestanding Equity-Classified Written Call Options , which clarifies and reduces diversity in an issuer’s accounting for modifications or exchanges of freestanding equity-classified written call options (for example, warrants) that remain equity classified after modification or exchange (“ASU 2021-04”). ASU 2021-04 is effective for all entities for fiscal years beginning after December 15, 2021 , including interim periods within those fiscal years. The Company adopted ASU 2021-04 effective January 1, 2022 , and there was no impact on our consolidated financial statements. In July 2021, the FASB issued ASU 2021-05 , Leases (Topic 842): Lessors—Certain Leases with Variable Lease Payments (“ ASU 2021-05 ”), which requires lessors to classify leases as operating leases if they (1) have variable lease payments that do not depend on a reference index or rate, and (2) would have resulted in the recognition of a selling loss at lease commencement if classified as sales-type or direct financing. ASU 2021-05 is effective for all entities which have previously adopted Topic 842 for fiscal years beginning after December 15, 2021, including interim periods within those fiscal years. The Company adopted ASU 2021-05 effective January 1, 2022, and there was no impact on our consolidated financial statements. |
Segment Reporting | Management evaluates the performance of each segment using Adjusted EBITDA, which is a segment performance measure we define as net income determined in accordance with GAAP, before interest expense, provision for income taxes, depreciation and amortization, stock-based compensation expense and the impact, which may be recurring in nature, of transaction and integration related costs, costs associated with Windstream’s bankruptcy, costs associated with litigation claims made against us, costs associated with the implementation of our enterprise resource planning system, executive severance costs, costs related to the settlement with Windstream, amortization of non-cash rights-of-use assets, the write off of unamortized deferred financing costs, costs incurred as a result of the early repayment of debt, including early tender and redemption premiums and costs associated with the termination of related hedging activities, gains or losses on dispositions, changes in the fair value of contingent consideration and financial instruments, and other similar or infrequent items (although we may not have had such charges in the periods presented). Adjusted EBITDA includes adjustments to reflect the Company’s share of Adjusted EBITDA from unconsolidated entities. The Company believes that net income, as defined by GAAP, is the most appropriate earnings metric; however, we believe that Adjusted EBITDA serves as a useful supplement to net income because it allows investors, analysts and management to evaluate the performance of our segments in a manner that is comparable period over period. Adjusted EBITDA should not be considered as an alternative to net income as determined in accordance with GAAP. |
Revenues (Tables)
Revenues (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Revenue from Contract with Customer [Abstract] | |
Revenues Disaggregated by Revenue Stream | The following table presents our revenues disaggregated by revenue stream. Three Months Ended Nine Months Ended (Thousands) 2022 2021 2022 2021 Revenue disaggregated by revenue stream Revenue from contracts with customers Fiber Infrastructure Lit backhaul $ 19,969 $ 19,381 $ 59,344 $ 67,404 Enterprise and wholesale 21,423 20,863 63,359 63,190 E-Rate and government 15,245 13,505 48,026 48,795 Other 703 839 2,076 2,479 Fiber Infrastructure $ 57,340 $ 54,588 $ 172,805 $ 181,868 Leasing 1,201 1,070 3,553 3,237 Total revenue from contracts with customers 58,541 55,658 176,358 185,105 Revenue accounted for under leasing guidance Leasing 207,422 198,415 615,325 587,241 Fiber Infrastructure 17,140 12,674 53,429 35,167 Total revenue accounted for under leasing guidance 224,562 211,089 668,754 622,408 Total revenue $ 283,103 $ 266,747 $ 845,112 $ 807,513 |
Schedule of Contract Assets and Contract Liabilities | The following table provides information about contract assets and contract liabilities accounted for under ASC 606. (Thousands) Contract Assets Contract Liabilities Balance at December 31, 2021 $ 4,066 $ 9,099 Balance at September 30, 2022 $ 391 $ 11,061 |
Leases (Tables)
Leases (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Leases [Abstract] | |
Components of Lease Income | The components of lease income for the three and nine months ended September 30, 2022 and 2021, respectively, are as follows: Three Months Ended September 30, Nine Months Ended September 30, (Thousands) 2022 2021 2022 2021 Lease income - operating leases $ 224,562 $ 211,089 $ 668,754 $ 622,408 |
Lease Payments to be Received under Non-Cancellable Operating Leases | Lease payments to be received under non-cancellable operating leases where we are the lessor for the remainder of the lease terms as of September 30, 2022 are as follows: (Thousands) September 30, 2022⁽¹⁾ 2022 $ 191,496 2023 777,937 2024 784,400 2025 785,568 2026 787,169 Thereafter 3,066,497 Total lease receivables $ 6,393,067 (1) Total future minimum lease payments to be received include $5.5 billion relating to the Windstream Leases. |
Property, Plant, and Equipment, Lessor Asset under Operating Lease | The underlying assets under operating leases where we are the lessor are summarized as follows: (Thousands) September 30, 2022 December 31, 2021 Land $ 26,550 $ 26,593 Building and improvements 344,836 343,624 Poles 293,504 281,130 Fiber 3,465,878 3,278,276 Equipment 428 428 Copper 3,955,180 3,918,281 Conduit 89,925 89,859 Tower assets 1,397 1,397 Finance lease assets 28,126 28,126 Other assets 10,434 10,649 8,216,258 7,978,363 Less: accumulated depreciation (5,502,245) (5,391,479) Underlying assets under operating leases, net $ 2,714,013 $ 2,586,884 |
Schedule of Depreciation Expense for Underlying Assets under Operating Leases | Depreciation expense for the underlying assets under operating leases where we are the lessor for the three and nine months ended September 30, 2022 and 2021, respectively, is summarized as follows: Three Months Ended September 30, Nine Months Ended September 30, (Thousands) 2022 2021 2022 2021 Depreciation expense for underlying assets under operating leases $ 44,127 $ 44,763 $ 130,858 $ 134,783 |
Future Lease Payments Under Non-Cancellable Operating Leases | Future lease payments under non-cancellable leases as of September 30, 2022 are as follows: (Thousands) Operating Leases Finance Leases 2022 $ 4,079 $ 625 2023 15,588 2,497 2024 13,201 2,307 2025 10,529 2,254 2026 7,739 2,254 Thereafter 47,463 14,878 Total undiscounted lease payments $ 98,599 $ 24,815 Less: imputed interest (33,918) (9,246) Total lease liabilities $ 64,681 $ 15,569 |
Future Lease Payments Under Non-Cancellable Finance Leases | Future lease payments under non-cancellable leases as of September 30, 2022 are as follows: (Thousands) Operating Leases Finance Leases 2022 $ 4,079 $ 625 2023 15,588 2,497 2024 13,201 2,307 2025 10,529 2,254 2026 7,739 2,254 Thereafter 47,463 14,878 Total undiscounted lease payments $ 98,599 $ 24,815 Less: imputed interest (33,918) (9,246) Total lease liabilities $ 64,681 $ 15,569 |
Fair Value of Financial Instr_2
Fair Value of Financial Instruments (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Fair Value Disclosures [Abstract] | |
Schedule of Fair Value Valuation of Financial Instruments | The following table summarizes the fair value of our financial instruments at September 30, 2022 and December 31, 2021: (Thousands) Total Quoted Prices in Active Markets (Level 1) Prices with Other Observable Inputs (Level 2) Prices with Unobservable At September 30, 2022 Liabilities Senior secured notes - 7.875%, due February 15, 2025 $ 2,198,565 $ — $ 2,198,565 $ — Senior secured notes - 4.75%, due April 15, 2028 451,640 — 451,640 — Senior unsecured notes - 6.50% , due February 15, 2029 748,728 — 748,728 — Senior unsecured notes - 6.00%, due January 15, 2030 447,965 — 447,965 — Exchangeable senior notes - 4.00%, due June 15, 2024 316,517 — 316,517 — Senior secured revolving credit facility, variable rate, due December 10, 2024 274,972 — 274,972 — Settlement payable 235,225 — 235,225 — Derivative liability, net 822 — 822 — Total $ 4,674,434 $ — $ 4,674,434 $ — (Thousands) Total Quoted Prices in Active Markets (Level 1) Prices with Other Observable Inputs (Level 2) Prices with Unobservable At December 31, 2021 Liabilities Senior secured notes - 7.875%, due February 15, 2025 $ 2,351,576 $ — $ 2,351,576 $ — Senior secured notes - 4.75%, due April 15, 2028 560,857 — 560,857 — Senior unsecured notes - 6.50% , due February 15, 2029 1,087,844 — 1,087,844 — Senior unsecured notes - 6.00%, due January 15, 2030 659,992 — 659,992 — Exchangeable senior notes - 4.00%, due June 15, 2024 453,104 — 453,104 — Senior secured revolving credit facility, variable rate, due December 10, 2024 199,980 — 199,980 — Settlement payable 254,725 — 254,725 — Derivative liability, net 10,413 — 10,413 — Total $ 5,578,491 $ — $ 5,578,491 $ — |
Property, Plant and Equipment (
Property, Plant and Equipment (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Property, Plant and Equipment [Abstract] | |
Schedule of Carrying Value of Property, Plant and Equipment | The carrying value of property, plant and equipment is as follows: (Thousands) Depreciable Lives September 30, 2022 December 31, 2021 Land Indefinite $ 28,678 $ 28,449 Building and improvements 3 - 40 years 361,592 359,980 Poles 30 years 293,504 281,130 Fiber 30 years 4,354,532 4,107,519 Equipment 5 - 7 years 375,340 331,761 Copper 20 years 3,955,180 3,918,281 Conduit 30 years 89,925 89,859 Tower assets 20 years 8,544 8,544 Finance lease assets (1) 73,203 72,284 Other assets 15 - 20 years 10,451 10,652 Corporate assets 3 - 7 years 14,775 14,326 Construction in progress (1) 40,141 27,366 9,605,865 9,250,151 Less accumulated depreciation (5,912,284) (5,741,212) Net property, plant and equipment $ 3,693,581 $ 3,508,939 |
Derivative Instruments and He_2
Derivative Instruments and Hedging Activities (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Schedule of Derivative Assets at Fair Value | The following tables present the gross amounts of our derivative instruments subject to master netting arrangements with the same counterparty as of September 30, 2022 and December 31, 2021: Offsetting of Derivative Assets and Liabilities (Thousands) Gross Amounts of Recognized Assets or Liabilities Gross Amounts Offset in the Condensed Consolidated Balance Sheets Net Amounts of Assets or Liabilities presented in the Condensed Consolidated Balance Sheets At September 30, 2022 Assets Interest rate swaps $ 1,278 $ (1,278) $ — Total $ 1,278 $ (1,278) $ — Liabilities Interest rate swaps $ 2,100 $ (1,278) $ 822 Total $ 2,100 $ (1,278) $ 822 Offsetting of Derivative Assets and Liabilities (Thousands) Gross Amounts of Recognized Assets or Liabilities Gross Amounts Offset in the Condensed Consolidated Balance Sheets Net Amounts of Assets or Liabilities presented in the Condensed Consolidated Balance Sheets At December 31, 2021 Assets Interest rate swaps $ 10,788 $ (10,788) $ — Total $ 10,788 $ (10,788) $ — Liabilities Interest rate swaps $ 21,201 $ (10,788) $ 10,413 Total $ 21,201 $ (10,788) $ 10,413 |
Schedule of Derivative Liabilities at Fair Value | The following tables present the gross amounts of our derivative instruments subject to master netting arrangements with the same counterparty as of September 30, 2022 and December 31, 2021: Offsetting of Derivative Assets and Liabilities (Thousands) Gross Amounts of Recognized Assets or Liabilities Gross Amounts Offset in the Condensed Consolidated Balance Sheets Net Amounts of Assets or Liabilities presented in the Condensed Consolidated Balance Sheets At September 30, 2022 Assets Interest rate swaps $ 1,278 $ (1,278) $ — Total $ 1,278 $ (1,278) $ — Liabilities Interest rate swaps $ 2,100 $ (1,278) $ 822 Total $ 2,100 $ (1,278) $ 822 Offsetting of Derivative Assets and Liabilities (Thousands) Gross Amounts of Recognized Assets or Liabilities Gross Amounts Offset in the Condensed Consolidated Balance Sheets Net Amounts of Assets or Liabilities presented in the Condensed Consolidated Balance Sheets At December 31, 2021 Assets Interest rate swaps $ 10,788 $ (10,788) $ — Total $ 10,788 $ (10,788) $ — Liabilities Interest rate swaps $ 21,201 $ (10,788) $ 10,413 Total $ 21,201 $ (10,788) $ 10,413 |
Summary of Fair Value of Derivative Instruments and Presentation in Condensed Consolidated Balance Sheet | The following table summarizes the fair value and the presentation in our Condensed Consolidated Balance Sheets: (Thousands) Location on Condensed Consolidated Balance Sheets September 30, 2022 December 31, 2021 Interest rate swaps Derivative liability, net $ 822 $ 10,413 |
Goodwill and Intangible Asset_2
Goodwill and Intangible Assets and Liabilities (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Goodwill And Intangible Assets And Liabilities Disclosure [Abstract] | |
Schedule of Carrying Amount of Goodwill | Changes in the carrying amount of goodwill occurring during the nine months ended September 30, 2022 are as follows: (Thousands) Fiber Infrastructure Total Goodwill at December 31, 2021 $ 601,878 $ 601,878 Goodwill impairment (Note 2) (216,000) $ (216,000) Goodwill at September 30, 2022 $ 385,878 $ 385,878 |
Schedule of Carrying Value of Other Intangible Assets | (Thousands) September 30, 2022 December 31, 2021 Original Cost Accumulated Amortization Original Cost Accumulated Finite life intangible assets: Customer lists $ 416,104 $ (123,012) $ 416,104 $ (105,861) Contracts 52,536 (13,134) 52,536 (8,209) Underlying Rights 10,497 (700) 10,497 (437) Total intangible assets $ 479,137 $ 479,137 Less: accumulated amortization (136,846) (114,507) Total intangible assets, net $ 342,291 $ 364,630 Finite life intangible liabilities: Below-market leases $ 191,154 (21,389) $ 191,154 (13,368) Finite life intangible liabilities: Below-market leases $ 191,154 $ 191,154 Less: accumulated amortization (21,389) (13,368) Total intangible liabilities, net $ 169,765 $ 177,786 |
Notes and Other Debt (Tables)
Notes and Other Debt (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Long-Term Debt, Unclassified [Abstract] | |
Schedule of Notes and Other Debt | Notes and other debt are as follows: (Thousands) September 30, 2022 December 31, 2021 Principal amount $ 5,250,000 $ 5,175,000 Less unamortized discount, premium and debt issuance costs (70,673) (84,463) Notes and other debt less unamortized discount, premium and debt issuance costs $ 5,179,327 $ 5,090,537 Notes and other debt at September 30, 2022 and December 31, 2021 consisted of the following: September 30, 2022 December 31, 2021 (Thousands) Principal Unamortized Discount, Premium and Debt Issuance Costs Principal Unamortized Discount, Premium and Debt Issuance Costs Senior secured notes - 7.875%, due February 15, 2025 (discount is based on imputed interest rate of 8.38%) $ 2,250,000 $ (24,604) $ 2,250,000 $ (31,411) Senior secured notes - 4.75%, due April 15, 2028 (discount is based on imputed interest rate of 5.04%) 570,000 (7,968) 570,000 (8,886) Senior unsecured notes - 4.00%, due June 15, 2024 (discount is based on imputed interest rate of 4.77%) 345,000 (4,376) 345,000 (6,187) Senior unsecured notes - 6.50%, due February 15, 2029 (discount is based on imputed interest rate of 6.83%) 1,110,000 (18,840) 1,110,000 (20,797) Senior unsecured notes - 6.00% due January 15, 2030 (discount is based on imputed interest rate of 6.27%) 700,000 (10,831) 700,000 (11,689) Senior secured revolving credit facility, variable rate, due December 10, 2024 275,000 (4,054) 200,000 (5,493) Total $ 5,250,000 $ (70,673) $ 5,175,000 $ (84,463) |
Earnings Per Share (Tables)
Earnings Per Share (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Earnings Per Share [Abstract] | |
Schedule of Earnings Per Share Basic and Diluted | The following sets forth the computation of basic and diluted earnings per share under the two-class method: Three Months Ended September 30, Nine Months Ended September 30, (Thousands, except per share data) 2022 2021 2022 2021 Basic earnings per share: Numerator: Net (loss) income attributable to shareholders $ (155,679) $ 43,366 $ (49,252) $ 87,835 Less: Income allocated to participating securities (226) (283) (897) (864) Dividends declared on convertible preferred stock (5) (3) (15) (8) Net (loss) income attributable to common shares $ (155,910) $ 43,080 $ (50,164) $ 86,963 Denominator: Basic weighted-average common shares outstanding 235,739 233,513 235,483 232,269 Basic (loss) earnings per common share $ (0.66) $ 0.18 $ (0.21) $ 0.37 Three Months Ended September 30, Nine Months Ended September 30, (Thousands, except per share data) 2022 2021 2022 2021 Diluted earnings per share: Numerator: Net (loss) income attributable to shareholders $ (155,679) $ 43,366 $ (49,252) $ 87,835 Less: Income allocated to participating securities (226) (283) (897) (864) Dividends declared on convertible preferred stock (5) (3) (15) (8) Impact on if-converted dilutive securities — 2,984 — — Net (loss) income attributable to common shares $ (155,910) $ 46,064 $ (50,164) $ 86,963 Denominator: Basic weighted-average common shares outstanding 235,739 233,513 235,483 232,269 Effect of dilutive non-participating securities — 338 — 271 Impact on if-converted dilutive securities — 30,570 — — Weighted-average shares for dilutive earnings per common share 235,739 264,421 235,483 232,540 Dilutive (loss) earnings per common share $ (0.66) $ 0.17 $ (0.21) $ 0.37 |
Segment Information (Tables)
Segment Information (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Segment Reporting [Abstract] | |
Schedule of Segment Reporting Information | Selected financial data related to our segments is presented below for the three and nine months ended September 30, 2022 and 2021: Three Months Ended September 30, 2022 (Thousands) Leasing Fiber Infrastructure Corporate Subtotal of Reportable Segments Revenues $ 208,623 74,480 $ — $ 283,103 Adjusted EBITDA $ 203,209 28,586 (6,742) $ 225,053 Less: Interest expense 97,731 Depreciation and amortization 43,121 30,370 25 73,516 Transaction related and other costs 2,375 Gain on sale of real estate (94) Gain on sale of operations (176) Goodwill impairment 216,000 Other, net 600 Stock-based compensation 3,151 Income tax benefit (13,056) Adjustments for equity in earnings from unconsolidated entities 755 Net loss $ (155,749) Three Months Ended September 30, 2021 (Thousands) Leasing Fiber Infrastructure Corporate Subtotal of Reportable Segments Revenues $ 199,485 $ 67,262 $ — $ 266,747 Adjusted EBITDA $ 194,303 $ 27,556 $ (4,632) $ 217,227 Less: Interest expense 94,793 Depreciation and amortization 41,432 29,036 62 70,530 Transaction related and other costs 1,063 Gain on sale of real estate — Gain on sale of operations — Other, net 4,472 Stock-based compensation 4,166 Income tax benefit (2,244) Adjustments for equity in earnings from unconsolidated entities 765 Net income $ 43,682 Nine Months Ended September 30, 2022 (Thousands) Leasing Fiber Infrastructure Corporate Subtotal of Reportable Segments Revenues 618,878 226,234 $ — $ 845,112 Adjusted EBITDA 602,531 93,628 (19,153) $ 677,006 Less: Interest expense 290,280 Depreciation and amortization 127,738 89,440 98 217,276 Transaction related and other costs 7,324 Gain on sale of real estate (344) Gain on sale of operations (176) Goodwill impairment 216,000 Other, net (6,534) Stock-based compensation 9,664 Income tax benefit (10,183) Adjustments for equity in earnings from unconsolidated entities 2,816 Net loss $ (49,117) Nine Months Ended September 30, 2021 (Thousands) Leasing Fiber Infrastructure Corporate Subtotal of Reportable Segments Revenues $ 590,478 $ 217,035 $ — $ 807,513 Adjusted EBITDA $ 577,937 $ 86,716 $ (17,444) $ 647,209 Less: Interest expense 341,762 Depreciation and amortization 124,132 86,838 195 211,165 Transaction related and other costs 5,624 Gain on sale of real estate (442) Gain on sale of operations (28,143) Other, net 14,569 Stock-based compensation 10,963 Income tax expense 283 Adjustments for equity in earnings from unconsolidated entities 2,609 Net income $ 88,819 |
Accumulated Other Comprehensi_2
Accumulated Other Comprehensive Loss (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Accumulated Other Comprehensive Income (Loss), Net of Tax [Abstract] | |
Schedule of Changes in Accumulated Other Comprehensive (Loss) Income by Component | Changes in accumulated other comprehensive loss by component is as follows for the three and nine months ended September 30, 2022 and 2021: Three Months Ended September 30, Nine Months Ended September 30, (Thousands) 2022 2021 2022 2021 Cash flow hedge changes in fair value: Balance at beginning of period attributable to shareholders $ (30,353) $ (30,353) $ (30,353) $ (30,353) Balance at end of period attributable to shareholders (30,353) (30,353) (30,353) (30,353) Interest rate swap termination: Balance at beginning of period attributable to shareholders 26,837 15,561 21,189 9,986 Amounts reclassified from accumulated other comprehensive income 2,829 2,830 8,488 8,488 Balance at end of period 29,666 18,391 29,677 18,474 Less: Other comprehensive income attributable to noncontrolling interest $ 1 22 12 105 Balance at end of period attributable to shareholders 29,665 18,369 29,665 18,369 Accumulated other comprehensive loss at end of period $ (688) $ (11,984) $ (688) $ (11,984) |
Organization and Description _2
Organization and Description of Business - Additional Information (Details) | 9 Months Ended |
Sep. 30, 2022 segment | |
Organization And Description Of Business [Line Items] | |
Number of operating business segments | 2 |
Uniti Group LP | |
Organization And Description Of Business [Line Items] | |
Percentage of partnership interests owned | 99.96% |
Basis of Presentation and Sum_3
Basis of Presentation and Summary of Significant Accounting Policies - Additional Information (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Summary Of Significant Accounting Policies [Line Items] | ||||
Goodwill impairment | $ 216,000 | $ 0 | $ 216,000 | $ 0 |
Concentration of Credit Risk | Revenue | Windstream | ||||
Summary Of Significant Accounting Policies [Line Items] | ||||
Master lease and the windstream leases revenue percentage | 66.40% | 67.60% |
Revenues - Revenues Disaggregat
Revenues - Revenues Disaggregated by Revenue Stream (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Disaggregation Of Revenue [Line Items] | ||||
Total revenue from contracts with customers | $ 58,541 | $ 55,658 | $ 176,358 | $ 185,105 |
Lease income - operating leases | 224,562 | 211,089 | 668,754 | 622,408 |
Total revenues | 283,103 | 266,747 | 845,112 | 807,513 |
Fiber Infrastructure | ||||
Disaggregation Of Revenue [Line Items] | ||||
Total revenue from contracts with customers | 57,340 | 54,588 | 172,805 | 181,868 |
Lease income - operating leases | 17,140 | 12,674 | 53,429 | 35,167 |
Total revenues | 74,480 | 67,262 | 226,234 | 217,035 |
Fiber Infrastructure | Lit backhaul | ||||
Disaggregation Of Revenue [Line Items] | ||||
Total revenue from contracts with customers | 19,969 | 19,381 | 59,344 | 67,404 |
Fiber Infrastructure | Enterprise and wholesale | ||||
Disaggregation Of Revenue [Line Items] | ||||
Total revenue from contracts with customers | 21,423 | 20,863 | 63,359 | 63,190 |
Fiber Infrastructure | E-Rate and government | ||||
Disaggregation Of Revenue [Line Items] | ||||
Total revenue from contracts with customers | 15,245 | 13,505 | 48,026 | 48,795 |
Fiber Infrastructure | Other | ||||
Disaggregation Of Revenue [Line Items] | ||||
Total revenue from contracts with customers | 703 | 839 | 2,076 | 2,479 |
Leasing | ||||
Disaggregation Of Revenue [Line Items] | ||||
Total revenue from contracts with customers | 1,201 | 1,070 | 3,553 | 3,237 |
Lease income - operating leases | 207,422 | 198,415 | 615,325 | 587,241 |
Total revenues | $ 208,623 | $ 199,485 | $ 618,878 | $ 590,478 |
Revenues - Additional Informati
Revenues - Additional Information (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |
Sep. 30, 2022 | Sep. 30, 2022 | Dec. 31, 2021 | |
Disaggregation Of Revenue [Line Items] | |||
Accounts receivable, net | $ 41,317 | $ 41,317 | $ 38,455 |
Contract with customer, receivable, after allowance for credit loss | 17,200 | 17,200 | 14,700 |
Revenue recognized that was included in the contract liability | 2,600 | 5,600 | |
Unbilled Revenues | |||
Disaggregation Of Revenue [Line Items] | |||
Future revenues under contract | 100,100 | 100,100 | |
Operating Lease Receivable | |||
Disaggregation Of Revenue [Line Items] | |||
Accounts receivable, net | 23,800 | 23,800 | $ 19,400 |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date: 2022-10-01 | |||
Disaggregation Of Revenue [Line Items] | |||
Future revenues under contract | 564,200 | 564,200 | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date: 2022-10-01 | Billed Revenues | |||
Disaggregation Of Revenue [Line Items] | |||
Future revenues under contract | $ 464,100 | $ 464,100 | |
Average remaining contract term for contracts currently billing | 2 years 4 months 24 days | 2 years 4 months 24 days | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date: 2022-10-01 | Unbilled Revenues | |||
Disaggregation Of Revenue [Line Items] | |||
Average remaining contract term for contracts currently billing | 6 years | 6 years |
Revenues - Schedule of Contract
Revenues - Schedule of Contract Assets and Contract Liabilities (Details) - USD ($) $ in Thousands | Sep. 30, 2022 | Dec. 31, 2021 |
Revenue from Contract with Customer [Abstract] | ||
Contract Assets | $ 391 | $ 4,066 |
Contract Liabilities | $ 11,061 | $ 9,099 |
Leases - Additional Information
Leases - Additional Information (Details) $ in Millions | 9 Months Ended |
Sep. 30, 2022 USD ($) | |
Leases [Line Items] | |
Short term lease commitments | $ 2.8 |
Minimum | |
Leases [Line Items] | |
Lessor, initial lease term | 1 year |
Lessor, lease renewal term | 1 year |
Lessor operating lease, termination | 1 month |
Lessee, initial lease term | 1 year |
Lessee, lease renewal term | 1 year |
Lessee operating lease, termination | 1 month |
Maximum | |
Leases [Line Items] | |
Lessor, initial lease term | 35 years |
Lessor, lease renewal term | 20 years |
Lessor operating lease, termination | 6 months |
Lessee, initial lease term | 30 years |
Lessee, lease renewal term | 20 years |
Lessee operating lease, termination | 6 months |
Leases - Components of Lease In
Leases - Components of Lease Income (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Leases [Abstract] | ||||
Lease income - operating leases | $ 224,562 | $ 211,089 | $ 668,754 | $ 622,408 |
Leases - Lease Payments to be R
Leases - Lease Payments to be Received under Non-Cancellable Operating Leases (Details) $ in Thousands | Sep. 30, 2022 USD ($) |
Lessee Lease Description [Line Items] | |
2022 | $ 191,496 |
2023 | 777,937 |
2024 | 784,400 |
2025 | 785,568 |
2026 | 787,169 |
Thereafter | 3,066,497 |
Total lease receivables | 6,393,067 |
Total future minimum lease payments to be received | 6,393,067 |
Windstream | |
Lessee Lease Description [Line Items] | |
Total lease receivables | 5,500,000 |
Total future minimum lease payments to be received | $ 5,500,000 |
Leases - Schedule of Underlying
Leases - Schedule of Underlying Assets under Operating Leases (Details) - USD ($) $ in Thousands | Sep. 30, 2022 | Dec. 31, 2021 |
Lessor Lease Description [Line Items] | ||
Underlying assets under operating leases, gross | $ 8,216,258 | $ 7,978,363 |
Less: accumulated depreciation | (5,502,245) | (5,391,479) |
Underlying assets under operating leases, net | 2,714,013 | 2,586,884 |
Land | ||
Lessor Lease Description [Line Items] | ||
Property, plant, and equipment, lessor asset under operating lease, before accumulated depreciation | 26,550 | 26,593 |
Building and improvements | ||
Lessor Lease Description [Line Items] | ||
Property, plant, and equipment, lessor asset under operating lease, before accumulated depreciation | 344,836 | 343,624 |
Poles | ||
Lessor Lease Description [Line Items] | ||
Property, plant, and equipment, lessor asset under operating lease, before accumulated depreciation | 293,504 | 281,130 |
Fiber | ||
Lessor Lease Description [Line Items] | ||
Property, plant, and equipment, lessor asset under operating lease, before accumulated depreciation | 3,465,878 | 3,278,276 |
Equipment | ||
Lessor Lease Description [Line Items] | ||
Property, plant, and equipment, lessor asset under operating lease, before accumulated depreciation | 428 | 428 |
Copper | ||
Lessor Lease Description [Line Items] | ||
Property, plant, and equipment, lessor asset under operating lease, before accumulated depreciation | 3,955,180 | 3,918,281 |
Conduit | ||
Lessor Lease Description [Line Items] | ||
Property, plant, and equipment, lessor asset under operating lease, before accumulated depreciation | 89,925 | 89,859 |
Tower assets | ||
Lessor Lease Description [Line Items] | ||
Property, plant, and equipment, lessor asset under operating lease, before accumulated depreciation | 1,397 | 1,397 |
Finance lease assets | ||
Lessor Lease Description [Line Items] | ||
Finance lease assets | 28,126 | 28,126 |
Other assets | ||
Lessor Lease Description [Line Items] | ||
Property, plant, and equipment, lessor asset under operating lease, before accumulated depreciation | $ 10,434 | $ 10,649 |
Leases - Schedule of Depreciati
Leases - Schedule of Depreciation Expense for Underlying Assets under Operating Leases (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Leases [Abstract] | ||||
Depreciation expense for underlying assets under operating leases | $ 44,127 | $ 44,763 | $ 130,858 | $ 134,783 |
Leases - Future Lease Payments
Leases - Future Lease Payments under Non-Cancellable Leases (Details) - USD ($) $ in Thousands | Sep. 30, 2022 | Dec. 31, 2021 |
Operating Leases | ||
2022 | $ 4,079 | |
2023 | 15,588 | |
2024 | 13,201 | |
2025 | 10,529 | |
2026 | 7,739 | |
Thereafter | 47,463 | |
Total undiscounted lease payments | 98,599 | |
Less: imputed interest | (33,918) | |
Operating lease liabilities | 64,681 | $ 57,355 |
Finance Leases | ||
2022 | 625 | |
2023 | 2,497 | |
2024 | 2,307 | |
2025 | 2,254 | |
2026 | 2,254 | |
Thereafter | 14,878 | |
Total undiscounted lease payments | 24,815 | |
Less: imputed interest | (9,246) | |
Total lease liabilities | $ 15,569 |
Investments in Unconsolidated_2
Investments in Unconsolidated Entities - Additional Information (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2022 | Jun. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Schedule Of Equity Method Investments [Line Items] | |||||
Proceeds from sale of unconsolidated entity | $ 32,527 | $ 0 | |||
Gain on sale of unconsolidated entity | 7,923 | 0 | |||
Income tax (benefit) expense | $ (13,056) | $ (2,244) | $ (10,183) | $ 283 | |
Propco | |||||
Schedule Of Equity Method Investments [Line Items] | |||||
Equity method investment retained after disposal | 20% | ||||
BB Fiber Holdings LLC | |||||
Schedule Of Equity Method Investments [Line Items] | |||||
Equity method investments | $ 39,000 | $ 39,000 | |||
Harmoni | |||||
Schedule Of Equity Method Investments [Line Items] | |||||
Proceeds from sale of unconsolidated entity | $ 32,500 | ||||
Gain on sale of unconsolidated entity | $ 7,900 | ||||
Income tax (benefit) expense | $ 6,700 | ||||
BB Fiber Holdings LLC | Propco | |||||
Schedule Of Equity Method Investments [Line Items] | |||||
Percentage of ownership interest | 47.50% | 47.50% |
Fair Value of Financial Instr_3
Fair Value of Financial Instruments - Schedule of Fair Value Valuation of Financial Instruments (Details) - USD ($) $ in Thousands | Sep. 30, 2022 | Dec. 31, 2021 |
Liabilities | ||
Settlement payable | $ 235,225 | $ 254,725 |
Derivative liability, net | 822 | 10,413 |
Total | 4,674,434 | 5,578,491 |
Quoted Prices in Active Markets (Level 1) | ||
Liabilities | ||
Settlement payable | 0 | 0 |
Derivative liability, net | 0 | 0 |
Total | 0 | 0 |
Prices with Other Observable Inputs (Level 2) | ||
Liabilities | ||
Settlement payable | 235,225 | 254,725 |
Derivative liability, net | 822 | 10,413 |
Total | 4,674,434 | 5,578,491 |
Prices with Unobservable Inputs (Level 3) | ||
Liabilities | ||
Settlement payable | 0 | 0 |
Derivative liability, net | 0 | 0 |
Total | 0 | 0 |
7.875% Senior Secured Notes | ||
Liabilities | ||
Senior notes | $ 2,198,565 | $ 2,351,576 |
Issuance senior notes, stated percentage | 7.875% | 7.875% |
7.875% Senior Secured Notes | Quoted Prices in Active Markets (Level 1) | ||
Liabilities | ||
Senior notes | $ 0 | $ 0 |
7.875% Senior Secured Notes | Prices with Other Observable Inputs (Level 2) | ||
Liabilities | ||
Senior notes | 2,198,565 | 2,351,576 |
7.875% Senior Secured Notes | Prices with Unobservable Inputs (Level 3) | ||
Liabilities | ||
Senior notes | 0 | 0 |
4.75% Senior Secured Notes | ||
Liabilities | ||
Senior notes | $ 451,640 | $ 560,857 |
Issuance senior notes, stated percentage | 4.75% | 4.75% |
4.75% Senior Secured Notes | Quoted Prices in Active Markets (Level 1) | ||
Liabilities | ||
Senior notes | $ 0 | $ 0 |
4.75% Senior Secured Notes | Prices with Other Observable Inputs (Level 2) | ||
Liabilities | ||
Senior notes | 451,640 | 560,857 |
4.75% Senior Secured Notes | Prices with Unobservable Inputs (Level 3) | ||
Liabilities | ||
Senior notes | 0 | 0 |
6.50% Senior Unsecured Notes | ||
Liabilities | ||
Senior notes | $ 748,728 | $ 1,087,844 |
Issuance senior notes, stated percentage | 6.50% | 6.50% |
6.50% Senior Unsecured Notes | Quoted Prices in Active Markets (Level 1) | ||
Liabilities | ||
Senior notes | $ 0 | $ 0 |
6.50% Senior Unsecured Notes | Prices with Other Observable Inputs (Level 2) | ||
Liabilities | ||
Senior notes | 748,728 | 1,087,844 |
6.50% Senior Unsecured Notes | Prices with Unobservable Inputs (Level 3) | ||
Liabilities | ||
Senior notes | 0 | 0 |
6.00% Senior Unsecured Notes | ||
Liabilities | ||
Senior notes | $ 447,965 | $ 659,992 |
Issuance senior notes, stated percentage | 6% | 6% |
6.00% Senior Unsecured Notes | Quoted Prices in Active Markets (Level 1) | ||
Liabilities | ||
Senior notes | $ 0 | $ 0 |
6.00% Senior Unsecured Notes | Prices with Other Observable Inputs (Level 2) | ||
Liabilities | ||
Senior notes | 447,965 | 659,992 |
6.00% Senior Unsecured Notes | Prices with Unobservable Inputs (Level 3) | ||
Liabilities | ||
Senior notes | 0 | 0 |
Exchangeable Senior Notes - 4.00%, due June 15, 2024 | ||
Liabilities | ||
Senior notes | $ 316,517 | $ 453,104 |
Issuance senior notes, stated percentage | 4% | 4% |
Exchangeable Senior Notes - 4.00%, due June 15, 2024 | Quoted Prices in Active Markets (Level 1) | ||
Liabilities | ||
Senior notes | $ 0 | $ 0 |
Exchangeable Senior Notes - 4.00%, due June 15, 2024 | Prices with Other Observable Inputs (Level 2) | ||
Liabilities | ||
Senior notes | 316,517 | 453,104 |
Exchangeable Senior Notes - 4.00%, due June 15, 2024 | Prices with Unobservable Inputs (Level 3) | ||
Liabilities | ||
Senior notes | 0 | 0 |
Senior Secured Revolving Credit Facility | ||
Liabilities | ||
Senior secured loan | 274,972 | 199,980 |
Senior Secured Revolving Credit Facility | Quoted Prices in Active Markets (Level 1) | ||
Liabilities | ||
Senior secured loan | 0 | 0 |
Senior Secured Revolving Credit Facility | Prices with Other Observable Inputs (Level 2) | ||
Liabilities | ||
Senior secured loan | 274,972 | 199,980 |
Senior Secured Revolving Credit Facility | Prices with Unobservable Inputs (Level 3) | ||
Liabilities | ||
Senior secured loan | $ 0 | $ 0 |
Fair Value of Financial Instr_4
Fair Value of Financial Instruments - Additional Information (Details) $ in Thousands | Sep. 30, 2022 USD ($) | Dec. 31, 2021 USD ($) | Oct. 01, 2020 USD ($) installment |
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | |||
Principal amount | $ 5,250,000 | $ 5,175,000 | |
Settlement payable | 248,117 | $ 239,384 | |
Windstream Commitment | |||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | |||
Other commitment | $ 490,100 | ||
Number of installments | installment | 20 | ||
Prices with Other Observable Inputs (Level 2) | |||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | |||
Notes and other debt, fair value | $ 4,440,000 |
Property, Plant and Equipment -
Property, Plant and Equipment - Schedule of Carrying Value of Property, Plant and Equipment (Details) - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2022 | Dec. 31, 2021 | |
Property Plant And Equipment [Line Items] | ||
Property, plant and equipment, gross | $ 9,605,865 | |
Property, plant, and equipment and finance lease right-of-use asset | 9,605,865 | $ 9,250,151 |
Less accumulated depreciation | (5,912,284) | (5,741,212) |
Net property, plant and equipment | 3,693,581 | 3,508,939 |
Land | ||
Property Plant And Equipment [Line Items] | ||
Property, plant and equipment, gross | 28,678 | 28,449 |
Building and improvements | ||
Property Plant And Equipment [Line Items] | ||
Property, plant and equipment, gross | $ 361,592 | 359,980 |
Building and improvements | Minimum | ||
Property Plant And Equipment [Line Items] | ||
Depreciable Lives | 3 years | |
Building and improvements | Maximum | ||
Property Plant And Equipment [Line Items] | ||
Depreciable Lives | 40 years | |
Poles | ||
Property Plant And Equipment [Line Items] | ||
Depreciable Lives | 30 years | |
Property, plant and equipment, gross | $ 293,504 | 281,130 |
Fiber | ||
Property Plant And Equipment [Line Items] | ||
Depreciable Lives | 30 years | |
Property, plant and equipment, gross | $ 4,354,532 | 4,107,519 |
Equipment | ||
Property Plant And Equipment [Line Items] | ||
Property, plant and equipment, gross | $ 375,340 | 331,761 |
Equipment | Minimum | ||
Property Plant And Equipment [Line Items] | ||
Depreciable Lives | 5 years | |
Equipment | Maximum | ||
Property Plant And Equipment [Line Items] | ||
Depreciable Lives | 7 years | |
Copper | ||
Property Plant And Equipment [Line Items] | ||
Depreciable Lives | 20 years | |
Property, plant and equipment, gross | $ 3,955,180 | 3,918,281 |
Conduit | ||
Property Plant And Equipment [Line Items] | ||
Depreciable Lives | 30 years | |
Property, plant and equipment, gross | $ 89,925 | 89,859 |
Tower assets | ||
Property Plant And Equipment [Line Items] | ||
Depreciable Lives | 20 years | |
Property, plant and equipment, gross | $ 8,544 | 8,544 |
Finance lease assets | ||
Property Plant And Equipment [Line Items] | ||
Finance lease assets | 73,203 | 72,284 |
Other assets | ||
Property Plant And Equipment [Line Items] | ||
Property, plant and equipment, gross | $ 10,451 | 10,652 |
Other assets | Minimum | ||
Property Plant And Equipment [Line Items] | ||
Depreciable Lives | 15 years | |
Other assets | Maximum | ||
Property Plant And Equipment [Line Items] | ||
Depreciable Lives | 20 years | |
Corporate assets | ||
Property Plant And Equipment [Line Items] | ||
Property, plant and equipment, gross | $ 14,775 | 14,326 |
Corporate assets | Minimum | ||
Property Plant And Equipment [Line Items] | ||
Depreciable Lives | 3 years | |
Corporate assets | Maximum | ||
Property Plant And Equipment [Line Items] | ||
Depreciable Lives | 7 years | |
Construction in progress | ||
Property Plant And Equipment [Line Items] | ||
Property, plant and equipment, gross | $ 40,141 | $ 27,366 |
Property, Plant and Equipment_2
Property, Plant and Equipment - Additional Information (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Property, Plant and Equipment [Abstract] | ||||
Depreciation expense | $ 66.1 | $ 65.7 | $ 194.9 | $ 196.8 |
Derivative Instruments and He_3
Derivative Instruments and Hedging Activities - Additional Information (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 9 Months Ended | ||||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | Jun. 25, 2019 | Apr. 27, 2015 | |
Derivative Instruments And Hedging Activities Disclosures [Line Items] | ||||||
Reclassification out of other comprehensive income into interest (expense) benefit | $ (97,731) | $ (94,793) | $ (290,280) | $ (341,762) | ||
Estimated amount to be reclassified as an increase to interest expense | 800 | 800 | ||||
Common Stock Warrants | ||||||
Derivative Instruments And Hedging Activities Disclosures [Line Items] | ||||||
Exercise price of warrants or rights (in dollars per share) | $ 16.42 | |||||
Reclassification Out of Other Comprehensive Income | Designated as Cash Flow Hedges | ||||||
Derivative Instruments And Hedging Activities Disclosures [Line Items] | ||||||
Reclassification out of other comprehensive income into interest (expense) benefit | $ 2,800 | $ 2,800 | $ 8,500 | $ 8,500 | ||
Maximum | Common Stock Warrants | ||||||
Derivative Instruments And Hedging Activities Disclosures [Line Items] | ||||||
Warrants (in shares) | 27,800,000 | |||||
Maximum number of shares issued pursuant to warrants (in shares) | 55,500,000 | |||||
Interest Rate Swap | ||||||
Derivative Instruments And Hedging Activities Disclosures [Line Items] | ||||||
Derivative, notional value | $ 2,000,000 |
Derivative Instruments and He_4
Derivative Instruments and Hedging Activities - Summary of Gross Amount of Derivative Instruments Subject to Master Netting Arrangements With Same Counterparty (Details) - USD ($) $ in Thousands | Sep. 30, 2022 | Dec. 31, 2021 |
Offsetting Assets And Liabilities [Line Items] | ||
Gross Amounts of Recognized Assets | $ 1,278 | $ 10,788 |
Gross Amounts Offset in the Condensed Consolidated Balance Sheets | (1,278) | (10,788) |
Derivative Asset | 0 | 0 |
Gross Amounts of Recognized Liabilities | 2,100 | 21,201 |
Gross Amounts Offset in the Condensed Consolidated Balance Sheets | (1,278) | (10,788) |
Derivative Liability | 822 | 10,413 |
Interest Rate Swap | ||
Offsetting Assets And Liabilities [Line Items] | ||
Gross Amounts of Recognized Assets | 1,278 | 10,788 |
Gross Amounts Offset in the Condensed Consolidated Balance Sheets | (1,278) | (10,788) |
Derivative Asset | 0 | 0 |
Gross Amounts of Recognized Liabilities | 2,100 | 21,201 |
Gross Amounts Offset in the Condensed Consolidated Balance Sheets | (1,278) | (10,788) |
Derivative Liability | $ 822 | $ 10,413 |
Derivative Instruments and He_5
Derivative Instruments and Hedging Activities - Summary of Fair Value of Derivative Instruments and Presentation in Condensed Consolidated Balance Sheet (Details) - USD ($) $ in Thousands | Sep. 30, 2022 | Dec. 31, 2021 |
Derivatives Fair Value [Line Items] | ||
Derivative liability, net | $ 822 | $ 10,413 |
Interest Rate Swap | ||
Derivatives Fair Value [Line Items] | ||
Derivative liability, net | $ 822 | $ 10,413 |
Goodwill and Intangible Asset_3
Goodwill and Intangible Assets and Liabilities - Additional Information (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Schedule Of Indefinite And Finite Lived Intangible Assets And Liabilities [Line Items] | ||||
Remaining weighted average amortization period of intangible assets | 14 years 4 months 24 days | |||
Amortization of intangible assets | $ 7.5 | $ 4.8 | $ 22.3 | $ 14.3 |
Estimated amortization expense for 2022 | 29.8 | 29.8 | ||
Estimated amortization expense for 2023 | 29.8 | 29.8 | ||
Estimated amortization expense for 2024 | 29.7 | 29.7 | ||
Estimated amortization expense for 2025 | 29.7 | 29.7 | ||
Estimated amortization expense for 2026 | 29.7 | 29.7 | ||
Revenue related to amortization of below-market leases | 2.7 | $ 2.7 | $ 8 | $ 8 |
Remaining weighted average amortization period of intangible liabilities | 17 years 2 months 12 days | |||
Estimated revenue due to amortization, 2022 | 10.7 | $ 10.7 | ||
Estimated revenue due to amortization, 2023 | 10.7 | 10.7 | ||
Estimated revenue due to amortization, 2024 | 10.7 | 10.7 | ||
Estimated revenue due to amortization, 2025 | 10.7 | 10.7 | ||
Estimated revenue due to amortization, 2026 | $ 10.7 | $ 10.7 |
Goodwill and Intangible Asset_4
Goodwill and Intangible Assets and Liabilities - Schedule of Carrying Amount of Goodwill (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Goodwill [Roll Forward] | ||||
Goodwill at December 31, 2021 | $ 601,878 | |||
Goodwill impairment loss | $ (216,000) | $ 0 | (216,000) | $ 0 |
Goodwill at September 30, 2022 | 385,878 | 385,878 | ||
Fiber Infrastructure | ||||
Goodwill [Roll Forward] | ||||
Goodwill at December 31, 2021 | 601,878 | |||
Goodwill impairment loss | (216,000) | |||
Goodwill at September 30, 2022 | $ 385,878 | $ 385,878 |
Goodwill and Intangible Asset_5
Goodwill and Intangible Assets and Liabilities - Schedule of Carrying Value of the Intangible Assets (Details) - USD ($) $ in Thousands | Sep. 30, 2022 | Dec. 31, 2021 |
Schedule Of Indefinite And Finite Lived Intangible Assets And Liabilities [Line Items] | ||
Total intangible assets, Original Cost | $ 479,137 | $ 479,137 |
Less: accumulated amortization | (136,846) | (114,507) |
Total intangible assets, net | 342,291 | 364,630 |
Less: accumulated amortization | (21,389) | (13,368) |
Total intangible liabilities, net | 169,765 | 177,786 |
Customer lists | ||
Schedule Of Indefinite And Finite Lived Intangible Assets And Liabilities [Line Items] | ||
Finite life intangible assets, Original Cost | 416,104 | 416,104 |
Less: accumulated amortization | (123,012) | (105,861) |
Contracts | ||
Schedule Of Indefinite And Finite Lived Intangible Assets And Liabilities [Line Items] | ||
Finite life intangible assets, Original Cost | 52,536 | 52,536 |
Less: accumulated amortization | (13,134) | (8,209) |
Underlying Rights | ||
Schedule Of Indefinite And Finite Lived Intangible Assets And Liabilities [Line Items] | ||
Finite life intangible assets, Original Cost | 10,497 | 10,497 |
Less: accumulated amortization | (700) | (437) |
Below-market leases | ||
Schedule Of Indefinite And Finite Lived Intangible Assets And Liabilities [Line Items] | ||
Total intangible liabilities | 191,154 | 191,154 |
Less: accumulated amortization | $ (21,389) | $ (13,368) |
Notes and Other Debt - Schedule
Notes and Other Debt - Schedule of Notes and Other Debt (Details) - USD ($) $ in Thousands | Sep. 30, 2022 | Dec. 31, 2021 |
Debt Instrument [Line Items] | ||
Principal amount | $ 5,250,000 | $ 5,175,000 |
Less unamortized discount, premium and debt issuance costs | (70,673) | (84,463) |
Long-Term Debt, Total | 5,179,327 | 5,090,537 |
Senior Secured Notes - 7.875% Due February 15, 2025 | ||
Debt Instrument [Line Items] | ||
Principal amount | 2,250,000 | 2,250,000 |
Less unamortized discount, premium and debt issuance costs | $ (24,604) | $ (31,411) |
Issuance senior notes, stated percentage | 7.875% | 7.875% |
Effective interest rate | 8.38% | |
Senior Secured Notes - 4.75% Due April 15, 2028 | ||
Debt Instrument [Line Items] | ||
Principal amount | $ 570,000 | $ 570,000 |
Less unamortized discount, premium and debt issuance costs | $ (7,968) | $ (8,886) |
Issuance senior notes, stated percentage | 4.75% | 4.75% |
Effective interest rate | 5.04% | |
Senior Unsecured Notes - 4.00%, Due June 15, 2024 | ||
Debt Instrument [Line Items] | ||
Principal amount | $ 345,000 | $ 345,000 |
Less unamortized discount, premium and debt issuance costs | $ (4,376) | (6,187) |
Issuance senior notes, stated percentage | 4% | |
Effective interest rate | 4.77% | |
Senior Unsecured Notes - 6.50%, Due February 15, 2029 | ||
Debt Instrument [Line Items] | ||
Principal amount | $ 1,110,000 | 1,110,000 |
Less unamortized discount, premium and debt issuance costs | $ (18,840) | $ (20,797) |
Issuance senior notes, stated percentage | 6.50% | 6.50% |
Effective interest rate | 6.83% | |
Senior Unsecured Notes - 6.00%, Due January 15, 2030 | ||
Debt Instrument [Line Items] | ||
Principal amount | $ 700,000 | $ 700,000 |
Less unamortized discount, premium and debt issuance costs | $ (10,831) | (11,689) |
Issuance senior notes, stated percentage | 6% | |
Effective interest rate | 6.27% | |
Senior Secured Revolving Credit Facility | ||
Debt Instrument [Line Items] | ||
Principal amount | $ 275,000 | 200,000 |
Less unamortized discount, premium and debt issuance costs | $ (4,054) | $ (5,493) |
Notes and Other Debt - Addition
Notes and Other Debt - Additional Information (Details) $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2022 USD ($) | Sep. 30, 2021 USD ($) | Sep. 30, 2022 USD ($) day | Sep. 30, 2021 USD ($) | Dec. 31, 2021 USD ($) | |
Debt Instrument [Line Items] | |||||
Debt instrument amount | $ 5,250,000 | $ 5,250,000 | $ 5,175,000 | ||
Debt Instrument, debt default, amount | 75,000 | $ 75,000 | |||
Debt instrument, covenant, lease default period threshold | day | 90 | ||||
Amortization of deferred financing costs | $ 4,400 | $ 4,200 | $ 13,000 | $ 12,400 | |
Maximum | |||||
Debt Instrument [Line Items] | |||||
Debt instrument, covenant, secured leverage ratio | 5% | 5% | |||
Consolidated total leverage ratio | 6.50% | 6.50% | |||
Maximum | Pro Forma | |||||
Debt Instrument [Line Items] | |||||
Debt instrument, covenant, secured leverage ratio | 4% | 4% | |||
Senior Secured Revolving Credit Facility | |||||
Debt Instrument [Line Items] | |||||
Debt instrument amount | $ 275,000 | $ 275,000 | 200,000 | ||
Commitment fee percentage of average amount of unused commitments | 0.50% | ||||
Commitment fee step-down percentage of average amount of unused commitments | 0.40% | ||||
7.875% Senior Secured Notes | |||||
Debt Instrument [Line Items] | |||||
Debt instrument amount | $ 2,250,000 | $ 2,250,000 | $ 2,250,000 | ||
Issuance senior notes, stated percentage | 7.875% | 7.875% | 7.875% | ||
4.75% Senior Secured Notes | |||||
Debt Instrument [Line Items] | |||||
Debt instrument amount | $ 570,000 | $ 570,000 | $ 570,000 | ||
Issuance senior notes, stated percentage | 4.75% | 4.75% | 4.75% | ||
6.50% Senior Notes | |||||
Debt Instrument [Line Items] | |||||
Debt instrument amount | $ 1,110,000 | $ 1,110,000 | |||
Issuance senior notes, stated percentage | 6.50% | 6.50% | |||
Exchangeable Senior Notes - 4.00%, due June 15, 2024 | |||||
Debt Instrument [Line Items] | |||||
Debt instrument amount | $ 345,000 | $ 345,000 | |||
Issuance senior notes, stated percentage | 4% | 4% | 4% | ||
6.00% Senior Unsecured Notes | |||||
Debt Instrument [Line Items] | |||||
Debt instrument amount | $ 700,000 | $ 700,000 | |||
Issuance senior notes, stated percentage | 6% | 6% | |||
Extended Revolving Credit Facility | |||||
Debt Instrument [Line Items] | |||||
Debt instrument amount | $ 500,000 | $ 500,000 | |||
Extended Revolving Credit Facility | Maximum | Base Rate | |||||
Debt Instrument [Line Items] | |||||
Debt instrument, basis spread on variable rate | 3.50% | ||||
Extended Revolving Credit Facility | Maximum | Eurodollar | |||||
Debt Instrument [Line Items] | |||||
Debt instrument, basis spread on variable rate | 4.50% | ||||
Extended Revolving Credit Facility | Minimum | Base Rate | |||||
Debt Instrument [Line Items] | |||||
Debt instrument, basis spread on variable rate | 2.75% | ||||
Extended Revolving Credit Facility | Minimum | Eurodollar | |||||
Debt Instrument [Line Items] | |||||
Debt instrument, basis spread on variable rate | 3.75% |
Earnings Per Share - Schedule o
Earnings Per Share - Schedule of Earnings Per Share Basic and Diluted (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Numerator: | ||||
Net (loss) income attributable to shareholders | $ (155,679) | $ 43,366 | $ (49,252) | $ 87,835 |
Less: Income allocated to participating securities | 226 | 283 | 897 | 864 |
Dividends declared on convertible preferred stock | (5) | (3) | (15) | (8) |
Net (loss) income attributable to common shareholders | $ (155,910) | $ 43,080 | $ (50,164) | $ 86,963 |
Denominator: | ||||
Basic weighted-average common shares outstanding | 235,739 | 233,513 | 235,483 | 232,269 |
Basic (loss) earnings per common share | $ (0.66) | $ 0.18 | $ (0.21) | $ 0.37 |
Numerator: | ||||
Net (loss) income attributable to shareholders | $ (155,679) | $ 43,366 | $ (49,252) | $ 87,835 |
Less: Income allocated to participating securities | (226) | (283) | (897) | (864) |
Dividends declared on convertible preferred stock | (5) | (3) | (15) | (8) |
Impact on if-converted dilutive securities | 0 | 2,984 | 0 | 0 |
Net (loss) income attributable to common shares | $ (155,910) | $ 46,064 | $ (50,164) | $ 86,963 |
Denominator: | ||||
Basic weighted-average common shares outstanding | 235,739 | 233,513 | 235,483 | 232,269 |
Effect of dilutive non-participating securities | 0 | 338 | 0 | 271 |
Impact on if-converted dilutive securities | 0 | 30,570 | 0 | 0 |
Weighted-average shares for dilutive earnings per common share | 235,739 | 264,421 | 235,483 | 232,540 |
Dilutive (loss) earnings per common share | $ (0.66) | $ 0.17 | $ (0.21) | $ 0.37 |
Earnings Per Share - Additional
Earnings Per Share - Additional Information (Details) - shares | 3 Months Ended | 9 Months Ended | |
Sep. 30, 2022 | Sep. 30, 2022 | Sep. 30, 2021 | |
Non-Participating Securities | |||
Antidilutive Securities Excluded From Computation Of Earnings Per Share [Line Items] | |||
Anti-dilution adjustments (in shares) | 847,147 | 847,147 | |
Convertible Debt Securities | |||
Antidilutive Securities Excluded From Computation Of Earnings Per Share [Line Items] | |||
Anti-dilution adjustments (in shares) | 31,691,390 | 31,691,390 | 30,569,588 |
Segment Information - Additiona
Segment Information - Additional Information (Details) | 9 Months Ended |
Sep. 30, 2022 segment | |
Segment Reporting [Abstract] | |
Number of reportable business segments | 2 |
Segment Information - Schedule
Segment Information - Schedule of Segment Reporting Information (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Segment Reporting Information [Line Items] | ||||
Revenues | $ 283,103 | $ 266,747 | $ 845,112 | $ 807,513 |
Adjusted EBITDA | 225,053 | 217,227 | 677,006 | 647,209 |
Interest expense | 97,731 | 94,793 | 290,280 | 341,762 |
Depreciation and amortization | 73,516 | 70,530 | 217,276 | 211,165 |
Transaction related and other costs | 2,375 | 1,063 | 7,324 | 5,624 |
Gain on sale of real estate | (94) | 0 | (344) | (442) |
Gain on sale of operations | (176) | 0 | (176) | (28,143) |
Goodwill impairment | 216,000 | 0 | 216,000 | 0 |
Other, net | 600 | 4,472 | (6,534) | 14,569 |
Stock-based compensation | 3,151 | 4,166 | 9,664 | 10,963 |
Income tax (benefit) expense | (13,056) | (2,244) | (10,183) | 283 |
Adjustments for equity in earnings from unconsolidated entities | 755 | 765 | 2,816 | 2,609 |
Net (loss) income | (155,749) | 43,682 | (49,117) | 88,819 |
Corporate | ||||
Segment Reporting Information [Line Items] | ||||
Adjusted EBITDA | (6,742) | (4,632) | (19,153) | (17,444) |
Depreciation and amortization | 25 | 62 | 98 | 195 |
Leasing | ||||
Segment Reporting Information [Line Items] | ||||
Revenues | 208,623 | 199,485 | 618,878 | 590,478 |
Leasing | Operating Segments | ||||
Segment Reporting Information [Line Items] | ||||
Revenues | 208,623 | 199,485 | 618,878 | 590,478 |
Adjusted EBITDA | 203,209 | 194,303 | 602,531 | 577,937 |
Depreciation and amortization | 43,121 | 41,432 | 127,738 | 124,132 |
Fiber Infrastructure | ||||
Segment Reporting Information [Line Items] | ||||
Revenues | 74,480 | 67,262 | 226,234 | 217,035 |
Goodwill impairment | 216,000 | |||
Fiber Infrastructure | Operating Segments | ||||
Segment Reporting Information [Line Items] | ||||
Revenues | 74,480 | 67,262 | 226,234 | 217,035 |
Adjusted EBITDA | 28,586 | 27,556 | 93,628 | 86,716 |
Depreciation and amortization | $ 30,370 | $ 29,036 | $ 89,440 | $ 86,838 |
Commitments and Contingencies -
Commitments and Contingencies - Additional Information (Details) $ in Millions | 9 Months Ended | |||
Mar. 25, 2022 USD ($) | Oct. 14, 2021 USD ($) payment | Sep. 30, 2022 USD ($) day | Oct. 01, 2020 USD ($) installment | |
Commitments And Contingencies [Line Items] | ||||
Other commitment, number of prepaid installment payments | payment | 4 | |||
Other commitment, reimbursement default period threshold | day | 30 | |||
Settlement expense | $ 38.9 | |||
SLF Holdings, LLC | ||||
Commitments And Contingencies [Line Items] | ||||
Settlement expense | $ 38.9 | |||
Insurance recovery for settlement expense | 38.9 | |||
Windstream Commitment | ||||
Commitments And Contingencies [Line Items] | ||||
Other commitment | $ 490.1 | |||
Number of installments | installment | 20 | |||
Percentage of committed purchase of assets | 9% | |||
Prepayment of settlement obligations under settlement agreement | $ 92.9 | |||
First five quarterly cash payments to be made after emergence | 215.4 | |||
Windstream Commitment, Growth Capital Improvements | ||||
Commitments And Contingencies [Line Items] | ||||
Other commitment | $ 1,750 | |||
Growth capital improvements fund annual limit | 250 | |||
Growth capital improvements reimbursement amount | 158.1 | |||
New lease, aggregate reimbursements made for certain growth capital improvements | 30.6 | |||
Lease incentive | $ 0.8 | |||
Windstream Commitment, Growth Capital Improvements | Maximum | ||||
Commitments And Contingencies [Line Items] | ||||
Other commitment, to be paid, remainder of fiscal year | 125 | |||
Other commitment, to be paid, year one | 225 | |||
Other commitment, to be paid, year two | 225 | |||
Other commitment, to be paid, year three | 225 | |||
Other commitment, to be paid, year four | 225 | |||
Other commitment, to be paid, year five | 175 | |||
Other commitment, to be paid, year six | 175 | |||
Other commitment, to be paid, year seven | 125 | |||
Other commitment, to be paid, year eight | 125 | |||
Other commitment, to be paid, year nine | 125 | |||
Windstream Commitments, Growth Capital Improvements, Cost Reimbursements | ||||
Commitments And Contingencies [Line Items] | ||||
Other commitment | $ 70 | |||
Windstream Commitments, Equipment Loan and Security Agreements | ||||
Commitments And Contingencies [Line Items] | ||||
Accrued interest rate for borrowing | 8% | |||
Windstream Commitments, Equipment Loan and Security Agreements | Maximum | ||||
Commitments And Contingencies [Line Items] | ||||
Other commitment | $ 125 | |||
New lease, aggregate reimbursements made for certain growth capital improvements | $ 25 | |||
Windstream | ||||
Commitments And Contingencies [Line Items] | ||||
Annual rent adjustment for Growth Capital Funding | 8% | |||
Rate used for rent percentage | 100.50% | |||
Maximum funding rights allocated per year upon transfer of interests under Windstream lease | $ 20 |
Accumulated Other Comprehensi_3
Accumulated Other Comprehensive Loss - Schedule of Changes in Accumulated Other Comprehensive (Loss) Income by Component (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
AOCI Including Portion Attributable to Noncontrolling Interest, Net of Tax [Roll Forward] | ||||
Beginning balance | $ (2,075,198) | $ (2,133,440) | $ (2,113,774) | $ (2,072,376) |
Other comprehensive income | 2,829 | 2,830 | 8,488 | 8,488 |
Ending balance | (2,260,175) | (2,118,241) | (2,260,175) | (2,118,241) |
Cash flow hedge changes in fair value | ||||
AOCI Including Portion Attributable to Noncontrolling Interest, Net of Tax [Roll Forward] | ||||
Beginning balance | (30,353) | (30,353) | (30,353) | (30,353) |
Ending balance | (30,353) | (30,353) | (30,353) | (30,353) |
Cash flow hedge changes in fair value | Interest Rate Swap | ||||
AOCI Including Portion Attributable to Noncontrolling Interest, Net of Tax [Roll Forward] | ||||
Other comprehensive income (loss), before reclassifications, net of tax | 26,837 | 15,561 | 21,189 | 9,986 |
Amounts reclassified from accumulated other comprehensive income | 2,829 | 2,830 | 8,488 | 8,488 |
Other comprehensive income | 29,666 | 18,391 | 29,677 | 18,474 |
Accumulated Other Comprehensive Loss | ||||
AOCI Including Portion Attributable to Noncontrolling Interest, Net of Tax [Roll Forward] | ||||
Beginning balance | (3,516) | (14,792) | (9,164) | (20,367) |
Other comprehensive income | 2,828 | 2,808 | 8,476 | 8,383 |
Ending balance | (688) | (11,984) | (688) | (11,984) |
Interest rate swap termination, noncontrolling interest | ||||
AOCI Including Portion Attributable to Noncontrolling Interest, Net of Tax [Roll Forward] | ||||
Other comprehensive income | 1 | 22 | 12 | 105 |
Interest rate swap termination, parent | ||||
AOCI Including Portion Attributable to Noncontrolling Interest, Net of Tax [Roll Forward] | ||||
Other comprehensive income | $ 29,665 | $ 18,369 | $ 29,665 | $ 18,369 |
Capital Stock (Details)
Capital Stock (Details) $ in Millions | 9 Months Ended |
Sep. 30, 2022 USD ($) shares | |
Schedule Of Capitalization Equity [Line Items] | |
Conversion of stock, ratio | 1 |
Exchange of noncontrolling interest (in shares) | 591,349 |
Percentage of units exchanged held by third parties | 85% |
Noncontrolling Interest - OP Units | |
Schedule Of Capitalization Equity [Line Items] | |
Exchange of noncontrolling interest | $ | $ 11.9 |
Cash Share Exchange | |
Schedule Of Capitalization Equity [Line Items] | |
Exchange of noncontrolling interest (in shares) | 346,667 |
Cash Share Exchange | Noncontrolling Interest - OP Units | |
Schedule Of Capitalization Equity [Line Items] | |
Exchange of noncontrolling interest | $ | $ 4.6 |
Common Share Exchange | |
Schedule Of Capitalization Equity [Line Items] | |
Exchange of noncontrolling interest (in shares) | 244,683 |