CNSL - Consolidated Communications Reports Second Quarter 2019 Results

August, 01 2019 08:00 AM Consolidated Communications Holdings Inc.

MATTOON, Ill., Aug. 01, 2019 (GLOBE NEWSWIRE) -- Consolidated Communications Holdings, Inc. (Nasdaq: CNSL) (the “Company”) reported results for the second quarter 2019 and will hold a conference call and simultaneous webcast to discuss its results and developments today at 10 a.m. ET.

Second Quarter 2019 Financial Summary:

Revenue totaled $333.5 million
Net cash from operating activities was $88.3 million
Adjusted EBITDA was $131.4 million

Second Quarter 2019 Operational Summary:

Fiber connections for wireless carriers under contract increased 5 percent
Ethernet revenues increased 4 percent year over year
Consumer broadband revenue grew more than 2 percent year over year

“Following our final dividend payment on May 1, we are now focused on our revised capital allocation plan, which is designed to achieve our deleveraging goal of less than 4.0x net debt to adjusted EBITDA in advance of refinancing our unsecured debt no later than mid-2021,” said Bob Udell, president and chief executive officer of Consolidated Communications.

“With the change in our capital allocation policy, we are now providing full-year 2019 adjusted EBITDA guidance," continued Udell. "The adjusted EBITDA for 2019 is estimated to be in the range of $520 million to $525 million. We believe the enhanced guidance demonstrates our confidence in our business plan and our commitment to executing on our deleveraging targets.”

“We are pleased with the performance of our carrier and consumer channels this quarter,” added Udell. "In the carrier channel, we increased our fiber connections 5 percent year over year. Consumer broadband revenue grew more than 2 percent year over year and was flat from the prior quarter with strong broadband revenue growth offsetting declines in voice and lower margin video revenue.”

Financial Results for the Second Quarter

Revenues totaled $333.5 million, compared to $350.2 million for the second quarter of 2018, a decline of $16.7 million. After normalizing for the sale of the Virginia properties in July 2018, revenue declined $15.3 million or 4.4 percent for the quarter.
- Commercial and carrier data and transport service revenue increased 1.1 percent or $900,000 on a comparable basis from a year ago.
- Consumer broadband revenue increased 2.4 percent or $1.5 million compared to a year ago, despite the sale of our Virginia properties and impacts related to last year’s Hurricane Michael impacting our Florida service area.
- Total Consumer revenue was largely flat from the first quarter of 2019 as broadband data increases offset voice and video revenue declines.
- Voice services revenue declined $10.6 million compared to a year ago across all customer channels.
- Subsidies decreased $2.8 million during the quarter, due to the final CAF step down in transitional revenues. Network access revenues declined $3.1 million.
Income from operations was up and totaled $14.3 million compared to $5.4 million in the second quarter of 2018. The change was primarily due to declines in revenues, offset by reductions in operating expense of $11.1 million. Depreciation and amortization expense declined by $14.4 million due to acquired assets with a short remaining useful life becoming fully depreciated.
Interest expense, net was $34.7 million, compared to $32.8 million for the same period last year. The change was due primarily to LIBOR increases, offset by a net benefit associated with interest rate hedge agreements put in place to maintain our fixed-debt target of 75 percent. As of June 2019, our weighted average cost of debt was approximately 5.6 percent.
Cash distributions from the Company’s wireless partnerships totaled $10.6 million for the second quarter compared to $11.2 million for the prior year period.
Other income, net was $9.1 million, compared to $12.8 million in the second quarter of 2018, due to lower income from the Company’s minority interest in wireless partnerships.
On a GAAP basis, the net loss was ($7.3 million) and GAAP net loss per share was ($0.10). Adjusted diluted net loss per share excludes certain items as outlined in the table provided in this release. Adjusted diluted net loss per share was ($0.03) in the second quarter of 2019, compared to ($0.10) in the second quarter of 2018.
Adjusted EBITDA was $131.4 million compared to $135.8 million in the year ago quarter.
The total net debt to last 12-month adjusted EBITDA ratio was 4.41x.
Capital expenditures were $66.4 million, due to seasonal construction and non-recurring expenditures associated with Hurricane Michael restoration and integration.

Financial Guidance

The Company updated its 2019 guidance as follows:

2019 Updated Guidance

2019 Previous Guidance

Cash interest expense

$130 million to $135 million

(no change)

Cash income taxes/refund¹

$1 million to $3 million

(no change)

Capital expenditures

$210 million to $220 million

(no change)

Adjusted EBITDA

$520 million to $525 million

N/A

(1) Cash income taxes primarily include local and state income taxes as federal income taxes will be shielded by existing net operating losses and the benefit of The Tax Cuts and Jobs Act of 2017 tax reform legislation that was enacted in December 2017.

Conference Call Information

Consolidated Communications will host a conference call and webcast today at 10 a.m. ET / 9 a.m. CT to discuss second quarter earnings and developments. The live webcast and replay can be accessed from the Investor Relations section of the Company’s website at http://ir.consolidated.com. The live conference call dial-in number is 1-877-374-3981, conference ID 6069567. A telephonic replay of the conference call will be available through Aug. 8 and can be accessed by calling 1-855-859-2056, conference ID 6069567.

About Consolidated Communications

Consolidated Communications Holdings, Inc. (NASDAQ: CNSL) is a leading broadband and business communications provider serving consumers, businesses, and wireless and wireline carriers across rural and metro communities and a 23-state service area. Leveraging an advanced fiber network spanning 37,000 fiber route miles, Consolidated Communications offers a wide range of communications solutions, including: high-speed Internet, data, phone, security, managed services, cloud services and wholesale, carrier solutions. From our first connection 125 years ago, Consolidated is dedicated to turning technology into solutions, connecting people and enriching how they work and live. Visit www.consolidated.com for more information.

Use of Non-GAAP Financial Measures

This press release, as well as the conference call, includes disclosures regarding “EBITDA,” “adjusted EBITDA” and “total net debt to last twelve month adjusted EBITDA coverage ratio,” “adjusted diluted net loss per share” and “adjusted net loss attributable to common stockholders,” all of which are non-GAAP financial measures and described in this section as not being in compliance with Regulation S-X. Accordingly, they should not be construed as alternatives to net cash from operating or investing activities, cash and cash equivalents, cash flows from operations, net income or net income per share as defined by GAAP and are not, on their own, necessarily indicative of cash available to fund cash needs as determined in accordance with GAAP. In addition, not all companies use identical calculations, and the non-GAAP financial measures may not be comparable to other similarly titled measures of other companies. A reconciliation of the differences between these non-GAAP financial measures and the most directly comparable financial measures presented in accordance with GAAP is included in the tables that follow.

Adjusted EBITDA is comprised of EBITDA, adjusted for certain items as permitted or required by the lenders under our credit agreement in place at the end of each quarter in the periods presented. The tables that follow include an explanation of how adjusted EBITDA is calculated for each of the periods presented with the reconciliation to net income. EBITDA is defined as net earnings before interest expense, income taxes, depreciation and amortization on a historical basis.

We present adjusted EBITDA for several reasons. Management believes adjusted EBITDA is useful as a means to evaluate our ability to fund our estimated uses of cash (including interest on our debt). In addition, we have presented adjusted EBITDA to investors in the past because they are frequently used by investors, securities analysts and other interested parties in the evaluation of companies in our industry, and management believes presenting them here provides a measure of consistency in our financial reporting. Adjusted EBITDA, referred to as Available Cash in our credit agreement, is also a component of the restrictive covenants and financial ratios contained in our credit agreement that requires us to maintain compliance with these covenants and limit certain activities, such as our ability to incur debt. The definitions in these covenants and ratios are based on adjusted EBITDA after giving effect to specified charges. In addition, adjusted EBITDA provides our board of directors with meaningful information, with other data, assumptions and considerations, to measure our ability to service and repay debt. We present the related “total net debt to last twelve month adjusted EBITDA coverage ratio” principally to put other non-GAAP measures in context and facilitate comparisons by investors, security analysts and others; this ratio differs in certain respects from the similar ratio used in our credit agreement. These measures differ in certain respects from the ratios used in our senior notes indenture.

These non-GAAP financial measures have certain shortcomings. In particular, adjusted EBITDA does not represent the residual cash flows available for discretionary expenditures, since items such as debt repayment and interest payments are not deducted from such measure. Because adjusted EBITDA is a component of the ratio of total net debt to last twelve month adjusted EBITDA, these measures are also subject to the material limitations discussed above. In addition, the ratio of total net debt to last twelve month adjusted EBITDA is subject to the risk that we may not be able to use the cash on the balance sheet to reduce our debt on a dollar-for-dollar basis. Management believes this ratio is useful as a means to evaluate our ability to incur additional indebtedness in the future.

We present the non-GAAP measures adjusted diluted net income per share and adjusted diluted net income attributable to common stockholders because our net income and net income per share are regularly affected by items that occur at irregular intervals or are non-cash items. We believe that disclosing these measures assists investors, securities analysts and other interested parties in evaluating both our company over time and the relative performance of the companies in our industry.

Safe Harbor

The Securities and Exchange Commission (“SEC”) encourages companies to disclose forward-looking information so that investors can better understand a company’s future prospects and make informed investment decisions. Certain statements in this communication are forward-looking statements and are made pursuant to the safe harbor provisions of the Securities Litigation Reform Act of 1995. These forward-looking statements reflect, among other things, our current expectations, plans, strategies, and anticipated financial results. There are a number of risks, uncertainties, and conditions that may cause our actual results to differ materially from those expressed or implied by these forward-looking statements. These risks and uncertainties include our ability to successfully integrate FairPoint Communications, Inc.’s operations and realize the synergies from the integration, as well as a number of factors related to our business, including economic and financial market conditions generally and economic conditions in our service areas; various risks to the price and volatility of our common stock; changes in the valuation of pension plan assets; the substantial amount of debt and our ability to repay or refinance it or incur additional debt in the future; our need for a significant amount of cash to service and repay the debt restrictions contained in our debt agreements that limit the discretion of management in operating the business; regulatory changes, including changes to subsidies, rapid development and introduction of new technologies and intense competition in the telecommunications industry; risks associated with our possible pursuit of acquisitions; system failures; cyber-attacks, information or security breaches or technology failure of ours or of a third party; losses of large customers or government contracts; risks associated with the rights-of-way for the network; disruptions in the relationship with third party vendors; losses of key management personnel and the inability to attract and retain highly qualified management and personnel in the future; changes in the extensive governmental legislation and regulations governing telecommunications providers and the provision of telecommunications services; new or changing tax laws or regulations; telecommunications carriers disputing and/or avoiding their obligations to pay network access charges for use of our network; high costs of regulatory compliance; the competitive impact of legislation and regulatory changes in the telecommunications industry; and liability and compliance costs regarding environmental regulations; and risks associated with discontinuing paying dividends on our common stock. A detailed discussion of these and other risks and uncertainties that could cause actual results and events to differ materially from such forward-looking statements are discussed in more detail in our filings with the SEC, including our reports on Form 10-K and Form 10-Q. Many of these circumstances are beyond our ability to control or predict. Moreover, forward-looking statements necessarily involve assumptions on our part. These forward-looking statements generally are identified by the words “believe,” “expect,” “anticipate,” “estimate,” “project,” “intend,” “plan,” “should,” “may,” “will,” “would,” “will be,” “will continue” or similar expressions. Such forward-looking statements involve known and unknown risks, uncertainties and other factors that may cause actual results, performance or achievements of Consolidated Communications Holdings, Inc. and its subsidiaries to be different from those expressed or implied in the forward-looking statements. All forward-looking statements attributable to us or persons acting on our behalf are expressly qualified in their entirety by the cautionary statements that appear throughout this communication. Furthermore, forward-looking statements speak only as of the date they are made. Except as required under the federal securities laws or the rules and regulations of the SEC, we disclaim any intention or obligation to update or revise publicly any forward-looking statements. You should not place undue reliance on forward-looking statements.

Company Contact

Lisa Hood, Consolidated Communications
Phone: (844)-909-CNSL (2675)
Lisa.hood@consolidated.com

– Tables to follow –



Consolidated Communications Holdings, Inc.

Condensed Consolidated Balance Sheets

(Dollars in thousands, except share and per share amounts)

(Unaudited)


June 30,

December 31,



2019



2018
















ASSETS




Current assets:




Cash and cash equivalents
$
10,450


$
9,599


Accounts receivable, net

133,535



133,136


Income tax receivable

11,380



11,072


Prepaid expenses and other current assets

45,231



44,336


Total current assets

200,596



198,143







Property, plant and equipment, net

1,872,312



1,927,126


Investments

112,154



110,853


Goodwill

1,035,274



1,035,274


Customer relationships, net

196,754



228,959


Other intangible assets

10,927



11,483


Other assets

57,693



23,423


Total assets
$
3,485,710


$
3,535,261
















LIABILITIES AND SHAREHOLDERS' EQUITY




Current liabilities:




Accounts payable
$
44,746


$
32,502


Advance billings and customer deposits

46,892



47,724


Dividends payable

-



27,579


Accrued compensation

55,926



64,459


Accrued interest

9,955



9,232


Accrued expense

77,589



71,650


Current portion of long-term debt and finance lease obligations

29,003



30,468


Total current liabilities

264,111



283,614







Long-term debt and finance lease obligations

2,309,117



2,303,585


Deferred income taxes

174,631



188,129


Pension and other post-retirement obligations

298,571



314,134


Other long-term liabilities

80,107



30,145


Total liabilities

3,126,537



3,119,607
















Shareholders' equity:




Common stock, par value $0.01 per share; 100,000,000 shares




authorized, 72,076,069 and 71,187,301, shares outstanding




as of June 30, 2019 and December 31, 2018, respectively

721



712


Additional paid-in capital

489,084



513,070


Accumulated deficit

(65,486
)


(50,834
)

Accumulated other comprehensive loss, net

(71,218
)


(53,212
)

Noncontrolling interest

6,072



5,918


Total shareholders' equity

359,173



415,654


Total liabilities and shareholders' equity
$
3,485,710


$
3,535,261

Consolidated Communications Holdings, Inc.
Condensed Consolidated Statements of Operations
(Dollars in thousands, except per share amounts)
(Unaudited)









Three Months Ended

Six Months Ended

June 30,

June 30,


2019



2018



2019



2018

















Net revenues
$
333,532


$
350,221


$
672,181


$
706,260

Operating expenses:







Cost of services and products

143,780



151,358



292,099



304,274

Selling, general and administrative expenses

78,148



81,695



152,515



167,680

Depreciation and amortization

97,304



111,741



196,547



219,640

Income from operations

14,300



5,427



31,020



14,666

Other income (expense):







Interest expense, net of interest income

(34,737
)


(32,839
)


(69,020
)


(65,555
)
Gain on extinguishment of debt

249



-



249



-

Other income, net

9,098



12,843



16,330



20,874

Loss before income taxes

(11,090
)


(14,569
)


(21,421
)


(30,015
)
Income tax benefit

(3,778
)


(4,009
)


(6,923
)


(8,257
)
Net loss

(7,312
)


(10,560
)


(14,498
)


(21,758
)
Less: net income attributable to noncontrolling interest

75



83



154



183









Net loss attributable to common shareholders
$
(7,387
)

$
(10,643
)

$
(14,652
)

$
(21,941
)








Net loss per basic and diluted common shares







attributable to common shareholders
$
(0.10
)

$
(0.15
)

$
(0.21
)

$
(0.32
)

Consolidated Communications Holdings, Inc.
Condensed Consolidated Statements of Cash Flows
(Dollars in thousands)
(Unaudited)













Three Months Ended

Six Months Ended



June 30,

June 30,




2019



2018



2019



2018

OPERATING ACTIVITIES









Net loss

$
(7,312
)

$
(10,560
)

$
(14,498
)

$
(21,758
)

Adjustments to reconcile net loss to net cash provided by operating activities:









Depreciation and amortization


97,304



111,741



196,547



219,640


Deferred income taxes


-



-



-



2


Cash distributions from wireless partnerships in excess of (less than) earnings


(94
)


(1,343
)


(1,212
)


519


Non-cash, stock-based compensation


1,814



1,538



3,312



2,216


Amortization of deferred financing


1,226



1,174



2,439



2,335


Other adjustments, net


149



1,075



546



3,415


Changes in operating assets and liabilities, net


(4,822
)


(96
)


(23,872
)


(11,998
)

Net cash provided by operating activities


88,265



103,529



163,262



194,371

INVESTING ACTIVITIES









Purchase of property, plant and equipment, net


(66,374
)


(64,032
)


(119,768
)


(124,840
)

Proceeds from sale of assets


13,338



1,299



14,203



1,443


Distributions from investments


-



-



329



233


Other


(450
)


-



(450
)


-


Net cash used in investing activities


(53,486
)


(62,733
)


(105,686
)


(123,164
)
FINANCING ACTIVITIES









Proceeds from issuance of long-term debt


56,000



49,000



107,000



76,000


Payment of finance lease obligations


(3,304
)


(3,104
)


(6,811
)


(6,027
)

Payment on long-term debt


(51,587
)


(59,588
)


(97,175
)


(91,176
)

Repurchase of senior notes


(4,294
)


-



(4,294
)


-


Dividends on common stock


(27,868
)


(27,602
)


(55,445
)


(55,019
)

Net cash used in financing activities


(31,053
)


(41,294
)


(56,725
)


(76,222
)
Net change in cash and cash equivalents


3,726



(498
)


851



(5,015
)
Cash and cash equivalents at beginning of period


6,724



11,140



9,599



15,657

Cash and cash equivalents at end of period

$
10,450


$
10,642


$
10,450


$
10,642

Consolidated Communications Holdings, Inc.

Consolidated Revenue by Category

(Dollars in thousands)

(Unaudited)















Three Months Ended

Six Months Ended




June 30,

June 30,




2019

2018

2019

2018

Commercial and carrier:










Data and transport services (includes VoIP)


$
88,538

$
87,603


$
176,664

$
173,628


Voice services



47,136


51,322



95,206


103,483


Other



13,390


14,237



28,566


26,100






149,064


153,162



300,436


303,211


Consumer:










Broadband (VoIP and Data)



64,068


62,545



127,153


125,656


Video services



20,341


22,065



41,077


44,899


Voice services



45,235


51,616



91,114


103,678






129,644


136,226



259,344


274,233













Subsidies



18,134


20,979



36,293


46,234


Network access



34,198


37,338



70,789


77,053


Other products and services



2,492


2,516



5,319


5,529


Total operating revenue



333,532


350,221



672,181


706,260


Less operating revenues from divestitures



-


(1,417
)


-


(2,871
)




$
333,532

$
348,804


$
672,181

$
703,389

Consolidated Communications Holdings, Inc.
Consolidated Revenue by Category
(Dollars in thousands)
(Unaudited)
























Three Months Ended


Q2 2019

Q1 2019

Q4 2018

Q3 2018

Q2 2018
Commercial and carrier:










Data and transport services (includes VoIP)

$
88,538

$
88,126

$
88,152

$
87,633


$
87,603

Voice services


47,136


48,070


49,301


50,091



51,322

Other


13,390


15,176


16,389


13,906



14,237




149,064


151,372


153,842


151,630



153,162

Consumer:










Broadband (VoIP and Data)


64,068


63,085


63,598


63,865



62,545

Video services


20,341


20,736


21,649


21,790



22,065

Voice services


45,235


45,879


47,597


50,757



51,616




129,644


129,700


132,844


136,412



136,226












Subsidies


18,134


18,159


17,948


19,189



20,979

Network access


34,198


36,591


37,382


38,147



37,338

Other products and services


2,492


2,827


2,734


2,686



2,516

Total operating revenue


333,532


338,649


344,750


348,064



350,221

Less operating revenues from divestitures


-


-


-


(466
)


(1,417
)


$
333,532

$
338,649

$
344,750

$
347,598


$
348,804

Consolidated Communications Holdings, Inc.
Schedule of Adjusted EBITDA Calculation
(Dollars in thousands)
(Unaudited)

















Three Months Ended

Six Months Ended

June 30,

June 30,


2019



2018



2019



2018

Net loss
$
(7,312
)

$
(10,560
)

$
(14,498
)

$
(21,758
)
Add (subtract):







Income tax benefit

(3,778
)


(4,009
)


(6,923
)


(8,257
)
Interest expense, net

34,737



32,839



69,020



65,555

Depreciation and amortization

97,304



111,741



196,547



219,640

EBITDA

120,951



130,011



244,146



255,180









Adjustments to EBITDA (1):







Other, net (2)

7,374



4,118



12,699



10,634

Investment income (accrual basis)

(10,750
)


(12,535
)


(19,351
)


(20,324
)
Investment distributions (cash basis)

10,628



11,224



17,918



20,694

Pension/OPEB expense

1,603



1,455



3,207



2,827

Gain on extinguishment of debt

(249
)


-



(249
)


-

Non-cash compensation (3)

1,814



1,538



3,312



2,216

Adjusted EBITDA
$
131,371


$
135,811


$
261,682


$
271,227









Notes:







(1) These adjustments reflect those required or permitted by the lenders under our credit agreement.
(2) Other, net includes income attributable to noncontrolling interests, acquisition and non-recurring related costs, and certain miscellaneous items.
(3) Represents compensation expenses in connection with our Restricted Share Plan, which because of the non-cash nature of the expenses are excluded from adjusted EBITDA.

Consolidated Communications Holdings, Inc.
Reconciliation of Net Loss to Adjusted EBITDA Guidance
(Dollars in millions)
(Unaudited)











Twelve Months Ended


December 31, 2019


Range


Low

High

Net loss
$
(22
)

$
(12
)

Add (subtract):




Income tax benefit

(11
)


(6
)

Interest expense, net

138



133


Depreciation and amortization

390



385


EBITDA

495



500







Adjustments to EBITDA (1):




Other, net (2)

12



12


Pension/OPEB expense

6



6


Non-cash compensation (3)

7



7


Adjusted EBITDA
$
520


$
525







Notes:




(1) These adjustments reflect those required or permitted by the lenders under our credit agreement.
(2) Other, net includes income attributable to noncontrolling interests, cash distributions less equity earnings from our investments, dividend income, acquisition and non-recurring related costs, gain on the extinguishment of debt and certain miscellaneous items.
(3) Represents compensation expenses in connection with our Restricted Share Plan, which because of the non-cash nature of the expenses are excluded from adjusted EBITDA.





To enhance the information in our outlook with respect to non-GAAP metrics, we are providing a range for certain GAAP measures that are components of the reconciliation of the non-GAAP metrics. The provision of these ranges is in no way meant to indicate that we are explicitly or implicitly providing an outlook on those GAAP components of the reconciliation. In order to reconcile the non-GAAP financial metric to GAAP, we have used ranges for the GAAP components that arithmetically add up to the non-GAAP financial metric. While we feel reasonably comfortable about the outlook for the non-GAAP financial metrics, we fully expect that the ranges used for the GAAP components will vary from actual results. We will consider our outlook of non-GAAP financial metrics to be accurate if the specific non-GAAP metric is met or exceeded, even if the GAAP components of the reconciliation are different from those provided in an earlier reconciliation.

Consolidated Communications Holdings, Inc.
Total Net Debt to LTM Adjusted EBITDA Ratio
(Dollars in thousands)
(Unaudited)




June 30,

Summary of Outstanding Debt:

2019


Term loans, net of discount $6,304
$
1,787,584


Revolving loan

41,000


Senior unsecured notes due 2022, net of discount $2,611

492,784


Finance leases

26,708


Total debt as of June 30, 2019
$
2,348,076


Less deferred debt issuance costs

(9,956
)

Less cash on hand

(10,450
)

Total net debt as of June 30, 2019
$
2,327,670





Adjusted EBITDA for the twelve


months ended June 30, 2019
$
527,749





Total Net Debt to last twelve months


Adjusted EBITDA

4.41x

Consolidated Communications Holdings, Inc.

Adjusted Net Loss and Net Loss Per Share

(Dollars in thousands, except per share amounts)

(Unaudited)




















Three Months Ended

Six Months Ended


June 30,

June 30,



2019



2018



2019



2018


Net loss
$
(7,312
)

$
(10,560
)

$
(14,498
)

$
(21,758
)

Integration and severance related costs, net of tax

4,595



2,735



8,006



7,458


Storm costs (recoveries), net of tax

(506
)


(459
)


(256
)


1,716


Gain on extinguishment of debt, net of tax

(164
)


-



(169
)


-


Local switching support settlement, net of tax

-



-



-



(2,891
)

Non-cash interest expense for swaps, net of tax

(10
)


213



238



1,923


Non-cash stock compensation, net of tax

1,195



1,115



2,242



1,607


Adjusted net loss
$
(2,202
)

$
(6,956
)

$
(4,437
)

$
(11,945
)










Weighted average number of shares outstanding

70,813



70,598



70,813



70,598


Adjusted diluted net loss per share
$
(0.03
)

$
(0.10
)

$
(0.06
)

$
(0.17
)










Notes:








Calculations above assume a 34.1% and 27.5% effective tax rate for the three months ended and 32.3% and 27.5% for the six months ended June 30, 2019 and 2018, respectively.

Consolidated Communications Holdings, Inc.

Key Operating Statistics

(Unaudited)

















June 30,

March 31,

% Change

June 30,

% Change





2019



2019


in Qtr


2018


YOY














Voice Connections


873,269



887,357


(1.6%)


936,576


(6.8%)














Data and Internet Connections


783,008



780,720


0.3%


783,886


(0.1%)














Video Connections


89,531



91,269


(1.9%)


97,853


(8.5%)














Business and Broadband as % of total revenue (1)


76.2%



76.3%


(0.1%)


74.5%


2.3%














Fiber route network miles (long-haul and metro)


37,167



36,987


0.5%


36,568


1.6%














On-net buildings


11,164



10,702


4.3%


9,674


15.4%














Consumer Customers


609,876



616,091


(1.0%)


649,561


(6.1%)














Consumer ARPU


$70.86



$70.17


1.0%


$69.47


2.0%














Notes:











(1) Business and Broadband revenue % includes: commercial/carrier, equipment sales and service, directory, consumer broadband and special access.

(2) The sale of our local exchange carrier in Virginia resulted in a reduction of approximately 4,110 voice connections, 2,900 data and Internet connections and 4,340 consumer customers in the third quarter of 2018. Prior period amounts have been adjusted to reflect the sale.

Company Name:	Consolidated Communications Holdings Inc.
Stock Symbol:	CNSL
Market:	NASDAQ
Website:	consolidated.com

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