Consolidated Communications Announces Fourth Quarter and Full Year 2023 Financial Results

MATTOON, Ill.--(BUSINESS WIRE)--Consolidated Communications Holdings, Inc. (Nasdaq: CNSL) (the “Company” or “Consolidated”), a top 10 fiber provider in the U.S., today reported results for the fourth quarter and full year 2023.

Fourth Quarter 2023 Results

• Revenue totaled $275.2 million
• Overall consumer revenue was $113.9 million
• Consumer fiber revenue was $37.9 million
• Total consumer broadband net adds were 6,998
• Consumer broadband revenue was $76.5 million
• Commercial data services revenue was $54.5 million
• Carrier data-transport revenue was $31.7 million
• Net loss was ($58.6 million). Adjusted EBITDA was $86.7 million
• Total committed capital expenditures were $91.5 million

Cost of services and products and selling, general and administrative expenses collectively decreased $12.6 million versus the prior year largely due to the divestiture of the Kansas City operations on Nov. 30, 2022, lower video programming costs, lower advertising expense, lower access expense and a reduction in salaries driven by the cost savings initiative.

Net interest expense was $41.6 million, an increase of $8.4 million versus the prior year, primarily as a result of higher interest on the term loan. The Company had 77% of its total debt at a fixed rate through September 2026. As of Dec. 31, 2023, the weighted average cost of debt was 7.04%.

Net loss in the fourth quarter of 2023 was ($58.6 million) compared to net loss of ($45.5 million) in the fourth quarter of 2022, which included $5.8 million of income from discontinued operations. Net loss per share was ($0.52) in the fourth quarter of 2023 as compared to net loss per share of ($0.41) in the fourth quarter of 2022. Adjusted diluted net income (loss) per share excludes certain items as outlined in the table provided in this release. Adjusted diluted net loss per share from continuing operations was ($0.26) compared to ($0.17) in the fourth quarter of 2022.

Capital Expenditures

Total committed capital expenditures were $91.5 million, driven by 49,132 new fiber passings, fourth quarter fiber adds, and reflect the usage of existing inventory for install and build activity.

Full-Year 2023 Results

• Revenue totaled $1.11 billion
• Overall consumer revenue was $451.0 million
• Consumer fiber revenue was $127.7 million
• Total consumer broadband net adds were 25,761
• Consumer broadband revenue was $290.8 million
• Commercial data services revenue was $214.7 million
• Carrier data-transport revenue was $127.2 million
• Net loss was ($294.4 million). Adjusted EBITDA was $319.2 million
• Total committed capital expenditures were $511.8 million

Capital Structure

As of Dec. 31, 2023, the Company maintained liquidity with cash and short-term investments of approximately $4.8 million and $214 million of available borrowing capacity on the revolving credit facility, subject to certain covenants. The net debt leverage ratio for the trailing 12 months ended Dec. 31, 2023, was 6.73x.

Pending Transaction

As previously announced, on Oct. 16, 2023, Consolidated entered into an agreement to be acquired by Searchlight and BCI in an all-cash transaction with an enterprise value of approximately $3.1 billion, including the assumption of debt. On Jan. 31, 2024, at a special meeting of shareholders, approximately 75% of disinterested shareholders voted to approve the proposal to adopt the merger agreement and approve the pending transaction. The transaction will result in Consolidated becoming a private company and is expected to close by the first quarter of 2025, subject to customary closing conditions, including receipt of regulatory approvals. The transaction is not subject to a financing condition. Following the closing of the transaction, shares of Consolidated common stock will no longer be traded or listed on any public securities exchange.

In light of the transaction, Consolidated will not host an earnings conference call.

About Consolidated Communications

Consolidated Communications Holdings, Inc. (Nasdaq: CNSL) is dedicated to moving people, businesses and communities forward by delivering the most reliable fiber communications solutions. Consumers, businesses and wireless and wireline carriers depend on Consolidated for a wide range of high-speed internet, data, phone, security, cloud and wholesale carrier solutions. With a network spanning over 60,000 fiber route miles, Consolidated is a top 10 U.S. fiber provider, turning technology into solutions that are backed by exceptional customer support. Learn more at consolidated.com.

Use of Non-GAAP Financial Measures

This press release includes disclosures regarding “EBITDA,” “adjusted EBITDA,” “Net debt leverage ratio,” “adjusted diluted net income (loss) per share,” and “Normalized revenue,” all of which are non-GAAP financial measures. Accordingly, they should not be construed as alternatives to net cash from operating or investing activities, cash and cash equivalents, cash flows from operations, net income 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 these non-GAAP financial measures to 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 (loss) from continuing operations. EBITDA is defined as income (loss) from continuing operations 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 it is frequently used by investors, securities analysts and other interested parties in the evaluation of companies in our industry, and management believes presenting it 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 “Net debt leverage ratio” principally to help investors understand how we measure leverage and facilitate comparisons by investors, security analysts and others. Total net debt is defined as the current and long-term portions of debt and finance lease obligations less cash, cash equivalents and short-term investments, deferred debt issuance costs and discounts on debt. Our Net debt leverage ratio differs in certain respects from the similar ratio used in our credit agreement or against comparable measures of certain other companies in our industry. 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. In addition, the Net debt leverage ratio 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 measure “adjusted diluted net income (loss) per share” because our net income (loss) and net income (loss) 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.

Forward-Looking Statements

Certain statements in this press release, including those relating to the current expectations, plans, strategies, and the timeline for consummating the take private transaction with Searchlight and BCI by the first quarter of 2025, are forward-looking statements and are made pursuant to the safe harbor provisions of the Private 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, including: significant competition in all parts of our business and among our customer channels; our ability to adapt to rapid technological changes; shifts in our product mix that may result in a decline in operating profitability; continued receipt of support from various funds established under federal and state laws; disruptions in our networks and infrastructure and any related service delays or disruptions could cause us to lose customers and incur additional expenses; cyber-attacks may lead to unauthorized access to confidential customer, personnel and business information that could adversely affect our business; our operations require substantial capital expenditures and our business, financial condition, results of operations and liquidity may be impacted if funds for capital expenditures are not available when needed; our ability to obtain and maintain necessary rights-of-way for our networks; our ability to obtain necessary hardware, software and operational support from third-party vendors; substantial video content costs continue to rise; our ability to enter into new collective bargaining agreements or renew existing agreements; our ability to attract and/or retain certain key management and other personnel in the future; risks associated with acquisitions and the realization of anticipated benefits from such acquisitions; increasing attention to, and evolving expectations for, environmental, social and governance initiatives; unfavorable changes in financial markets could affect pension plan investments; weak economic conditions; the risk that the proposed transaction may not be completed in a timely manner or at all; the possibility that any or all of the various conditions to the consummation of the proposed transaction may not be satisfied or waived, including the failure to receive any required regulatory approvals from any applicable governmental entities (or any conditions, limitations or restrictions placed on such approvals); the occurrence of any event, change or other circumstance that could give rise to the termination of the definitive transaction agreement relating to the proposed transaction, including in circumstances which would require the Company to pay a termination fee; the effect of the announcement or pendency of the proposed transaction on the Company’s ability to attract, motivate or retain key executives and employees, its ability to maintain relationships with its customers, suppliers and other business counterparties, or its operating results and business generally; risks related to the proposed transaction diverting management’s attention from the Company’s ongoing business operations; the amount of costs, fees and expenses related to the proposed transaction; the risk that the Company’s stock price may decline significantly if the proposed transaction is not consummated; the risk of shareholder litigation in connection with the proposed transaction, including resulting expense or delay; and the other risk factors described in Part I, Item 1A of Risk Factors in our Annual Report on Form 10-K for the year ended December 31, 2023 and the other risk factors identified from time to time in the Company’s other filings with the SEC. Filings with the SEC are available on the SEC’s website at http://www.sec.gov. 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. 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 press release. Furthermore, undue reliance should not be placed on forward-looking statements, which are based on the information currently available to us and speak only as of the date they are made. Except as required under federal securities laws or the rules and regulations of the Securities and Exchange Commission, we disclaim any intention or obligation to update or revise publicly any forward-looking statements.

Tag: [Consolidated-Communications-Earnings]

Consolidated Communications Holdings, Inc.
Condensed Consolidated Balance Sheets
(Dollars in thousands, except share and per share amounts)
(Unaudited)
	December 31,			December 31,
	2023			2022
ASSETS
Current assets:
Cash and cash equivalents	$	4,765		$	325,852
Short-term investments		—			87,951
Accounts receivable, net		121,194			119,675
Income tax receivable		2,880			1,670
Prepaid expenses and other current assets		56,843			62,996
Assets held for sale		70,473			—
Total current assets		256,155			598,144
Property, plant and equipment, net		2,449,009			2,234,122
Investments		8,887			10,297
Goodwill		814,624			929,570
Customer relationships, net		18,616			43,089
Other intangible assets		10,557			10,557
Other assets		70,578			61,315
Total assets	$	3,628,426		$	3,887,094
LIABILITIES, MEZZANINE EQUITY AND SHAREHOLDERS' EQUITY
Current liabilities:
Accounts payable	$	60,073		$	33,096
Advance billings and customer deposits		44,478			46,664
Accrued compensation		58,151			60,903
Accrued interest		18,694			18,201
Accrued expense		114,022			95,206
Current portion of long-term debt and finance lease obligations		18,425			12,834
Liabilities held for sale		3,402			—
Total current liabilities		317,245			266,904
Long-term debt and finance lease obligations		2,134,916			2,129,462
Deferred income taxes		210,648			274,309
Pension and other post-retirement obligations		137,616			123,644
Other long-term liabilities		48,637			47,326
Total liabilities		2,849,062			2,841,645
Series A Preferred Stock, par value $0.01 per share; 10,000,000 shares authorized, 434,266 and 456,343 shares outstanding as of December 31, 2023 and December 31, 2022, respectively; liquidation preference of $520,957 and $477,047 as of December 31, 2023 and December 31, 2022, respectively		372,590			328,680
Shareholders' equity:
Common stock, par value $0.01 per share; 150,000,000 shares authorized, 116,172,568 and 115,167,193 shares outstanding as of December 31, 2023 and December 31, 2022, respectively		1,162			1,152
Additional paid-in capital		681,757			720,442
Accumulated deficit		(262,380	)		(11,866	)
Accumulated other comprehensive loss, net		(21,872	)		(610	)
Noncontrolling interest		8,107			7,651
Total shareholders' equity		406,774			716,769
Total liabilities, mezzanine equity and shareholders' equity	$	3,628,426		$	3,887,094

Consolidated Communications Holdings, Inc.
Condensed Consolidated Statements of Operations
(Dollars in thousands, except per share amounts)
(Unaudited)
	Three Months Ended						Year Ended
	December 31,						December 31,
	2023			2022			2023			2022
Net revenues	$	275,178		$	295,976		$	1,110,120		$	1,191,263
Operating expenses:
Cost of services and products		120,539			133,652			511,866			546,661
Selling, general and administrative expenses		80,575			80,035			340,252			301,667
Transaction costs		11,797			—			13,783			—
Loss on impairment of assets held for sale		—			—			77,755			131,698
Loss (gain) on disposal of assets		(2,900	)		23,396			9,480			4,233
Depreciation and amortization		78,321			79,614			315,162			300,166
Income (loss) from operations		(13,154	)		(20,721	)		(158,178	)		(93,162	)
Other income (expense):
Interest expense, net of interest income		(41,630	)		(33,236	)		(151,964	)		(124,978	)
Other, net		(3,200	)		3,953			8,477			13,378
Loss from continuing operations before income taxes		(57,984	)		(50,004	)		(301,665	)		(204,762	)
Income tax benefit		(10,699	)		(9,244	)		(51,607	)		(27,058	)
Loss from continuing operations		(47,285	)		(40,760	)		(250,058	)		(177,704	)
Discontinued operations:
Income from discontinued operations		—			839			—			23,467
Gain (loss) on sale of discontinued operations		—			(20	)		—			389,885
Income tax expense (benefit)		—			(4,974	)		—			94,999
Income from discontinued operations		—			5,793			—			318,353
Net income (loss)		(47,285	)		(34,967	)		(250,058	)		140,649
Less: dividends on Series A preferred stock		11,314			10,352			43,910			40,104
Less: net income attributable to noncontrolling interest		15			171			456			564
Net income (loss) attributable to common shareholders	$	(58,614	)	$	(45,490	)	$	(294,424	)	$	99,981
Net income (loss) per common share - basic and diluted:
Loss from continuing operations	$	(0.52	)	$	(0.46	)	$	(2.60	)	$	(1.90	)
Income from discontinued operations		—			0.05			—			2.77
Net income (loss) per basic and diluted common shares attributable to common shareholders	$	(0.52	)	$	(0.41	)	$	(2.60	)	$	0.87

Consolidated Communications Holdings, Inc.
Condensed Consolidated Statements of Cash Flows
(Dollars in thousands)
(Unaudited)
	Three Months Ended						Year Ended
	December 31,						December 31,
	2023			2022			2023			2022
OPERATING ACTIVITIES
Net income (loss)	$	(47,285	)	$	(34,967	)	$	(250,058	)	$	140,649
Adjustments to reconcile net income (loss) to net cash provided by operating activities:
Depreciation and amortization		78,321			79,614			315,162			300,166
Deferred income tax expense (benefit)		(11,395	)		(11,055	)		(56,092	)		58,894
Cash distributions from wireless partnerships in excess of earnings		—			79			—			5,697
Pension and post-retirement contributions less than (in excess) of expense		3,414			(5,214	)		(5,827	)		(29,205	)
Non-cash, stock-based compensation		2,165			2,784			7,613			10,755
Amortization of deferred financing costs and discounts		2,429			1,856			8,051			7,331
Loss on impairment of assets held for sale		—			—			77,755			131,698
Loss (gain) on sale of partnership interests		—			20			—			(389,885	)
Loss (gain) on disposal of assets		(2,900	)		23,396			9,480			4,233
Other adjustments, net		574			191			(1,673	)		(367	)
Changes in operating assets and liabilities, net		(13,329	)		(51,125	)		10,176			(16,256	)
Net cash provided by operating activities		11,994			5,579			114,587			223,710
INVESTING ACTIVITIES
Purchase of property, plant and equipment, net		(90,838	)		(123,022	)		(515,035	)		(619,981	)
Purchase of investments		—			(262,948	)		—			(302,907	)
Proceeds (disbursements) from sale of assets		(135	)		1,661			5,954			22,918
Proceeds from business dispositions, net		—			79,781			—			105,823
Proceeds from sale and maturity of investments		—			175,859			91,623			327,419
Proceeds from sale of partnership interests, net		—			(6,601	)		—			482,966
Net cash provided by (used in) investing activities		(90,973	)		(135,270	)		(417,458	)		16,238
FINANCING ACTIVITIES
Payment of finance lease obligations		(4,079	)		(2,725	)		(15,338	)		(9,836	)
Payment of financing costs		(500	)		(2,603	)		(500	)		(2,603	)
Share repurchases for minimum tax withholding		(1,294	)		(1,178	)		(2,378	)		(1,292	)
Net cash used in financing activities		(5,873	)		(6,506	)		(18,216	)		(13,731	)
Net change in cash and cash equivalents		(84,852	)		(136,197	)		(321,087	)		226,217
Cash and cash equivalents at beginning of period		89,617			462,049			325,852			99,635
Cash and cash equivalents at end of period	$	4,765		$	325,852		$	4,765		$	325,852

Consolidated Communications Holdings, Inc.
Consolidated Revenue by Category
(Dollars in thousands)
(Unaudited)
	Three Months Ended				Year Ended
	December 31,				December 31,
	2023		2022		2023		2022
Consumer:
Broadband (Data and VoIP)	$	76,458	$	69,002	$	290,847	$	272,146
Voice services		29,935		34,314		125,166		144,853
Video services		7,460		11,876		34,957		54,153
		113,853		115,192		450,970		471,152
Commercial:
Data services (includes VoIP)		54,473		56,662		214,707		228,466
Voice services		31,217		34,676		127,909		142,274
Other		10,521		10,320		39,883		43,100
		96,211		101,658		382,499		413,840
Carrier:
Data and transport services		31,713		33,752		127,248		137,378
Voice services		2,868		3,685		15,588		14,772
Other		243		338		1,168		1,688
		34,824		37,775		144,004		153,838
Subsidies		6,902		13,078		27,888		33,382
Network access		22,217		26,308		90,250		104,644
Other products and services		1,171		1,965		14,509		14,407
Total operating revenue	$	275,178	$	295,976	$	1,110,120	$	1,191,263

Consolidated Communications Holdings, Inc.
Consolidated Revenue Trend by Category
(Dollars in thousands)
(Unaudited)
	Three Months Ended
	Q4 2023		Q3 2023		Q2 2023		Q1 2023		Q4 2022
Consumer:
Broadband (Data and VoIP)	$	76,458	$	75,089	$	71,339	$	67,961	$	69,002
Voice services		29,935		31,616		31,352		32,263		34,314
Video services		7,460		8,541		9,362		9,594		11,876
		113,853		115,246		112,053		109,818		115,192
Commercial:
Data services (includes VoIP)		54,473		53,870		53,230		53,134		56,662
Voice services		31,217		31,825		32,236		32,631		34,676
Other		10,521		9,228		10,378		9,756		10,320
		96,211		94,923		95,844		95,521		101,658
Carrier:
Data and transport services		31,713		31,388		31,224		32,923		33,752
Voice services		2,868		4,090		4,263		4,367		3,685
Other		243		262		313		350		338
		34,824		35,740		35,800		37,640		37,775
Subsidies		6,902		6,878		7,072		7,036		13,078
Network access		22,217		20,842		22,747		24,444		26,308
Other products and services		1,171		10,025		1,646		1,667		1,965
Total operating revenue	$	275,178	$	283,654	$	275,162	$	276,126	$	295,976

Consolidated Communications Holdings, Inc.
Reconciliation of Historical Revenue by Category to Normalized Revenue by Category
(Dollars in thousands)
(Unaudited)
	Three Months Ended							Year Ended
	December 31, 2022							December 31, 2022
	Historical		Adjustments^(1)			Normalized		Historical		Adjustments^(1)			Normalized
Consumer:
Broadband (Data and VoIP)	$	69,002	$	(1,138	)	$	67,864	$	272,146	$	(6,732	)	$	265,414
Voice services		34,314		(328	)		33,986		144,853		(2,067	)		142,786
Video services		11,876		(1,679	)		10,197		54,153		(9,684	)		44,469
		115,192		(3,145	)		112,047		471,152		(18,483	)		452,669
Commercial:
Data services (includes VoIP)		56,662		(2,952	)		53,710		228,466		(15,355	)		213,111
Voice services		34,676		(818	)		33,858		142,274		(4,864	)		137,410
Other		10,320		(179	)		10,141		43,100		(1,039	)		42,061
		101,658		(3,949	)		97,709		413,840		(21,258	)		392,582
Carrier:
Data and transport services		33,752		(171	)		33,581		137,378		(4,095	)		133,283
Voice services		3,685		(2	)		3,683		14,772		(14	)		14,758
Other		338		(3	)		335		1,688		(11	)		1,677
		37,775		(176	)		37,599		153,838		(4,120	)		149,718
Subsidies		13,078		—			13,078		33,382		(49	)		33,333
Network access		26,308		(303	)		26,005		104,644		(1,715	)		102,929
Other products and services		1,965		(121	)		1,844		14,407		(490	)		13,917
Total operating revenue	$	295,976	$	(7,694	)	$	288,282	$	1,191,263	$	(46,115	)	$	1,145,148
Notes:
(1) These adjustments reflect the removal of operating revenues for divestitures. We completed the sale of the Company's Ohio and Kansas assets on January 31, 2022 and November 30, 2022, respectively.

Consolidated Communications Holdings, Inc.
Reconciliation of Loss from Continuing Operations to Adjusted EBITDA
(Dollars in thousands)
(Unaudited)
	Three Months Ended						Year Ended
	December 31,						December 31,
	2023			2022			2023			2022
Loss from continuing operations	$	(47,285	)	$	(40,760	)	$	(250,058	)	$	(177,704	)
Add (subtract):
Income tax benefit		(10,699	)		(9,244	)		(51,607	)		(27,058	)
Interest expense, net		41,630			33,236			151,964			124,978
Depreciation and amortization		78,321			79,614			315,162			300,166
EBITDA		61,967			62,846			165,461			220,382
Adjustments to EBITDA (1):
Other, net (2)		20,697			11,902			57,534			29,656
Pension/OPEB benefit		4,751			(3,412	)		1,356			(12,309	)
Loss (gain) on disposal of assets		(2,900	)		23,396			9,480			4,233
Loss on impairment		—			—			77,755			131,698
Non-cash compensation (3)		2,165			2,784			7,613			10,755
Adjusted EBITDA from continuing operations		86,680			97,516			319,199			384,415
Investment distributions from discontinued operations		—			4,142			—			29,165
Adjusted EBITDA	$	86,680		$	101,658		$	319,199		$	413,580
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 Loss Attributable to Common Shareholders from Continuing Operations to Adjusted Loss from Continuing Operations and Calculation of Adjusted Diluted Net Income (Loss) Per Common Share
(Dollars in thousands, except per share amounts)
(Unaudited)
	Three Months Ended						Year Ended
	December 31,						December 31,
	2023			2022			2023			2022
Loss from continuing operations	$	(47,285	)	$	(40,760	)	$	(250,058	)	$	(177,704	)
Less: dividends on Series A preferred stock		11,314			10,352			43,910			40,104
Less: net income attributable to noncontrolling interest		15			171			456			564
Loss attributable to common shareholders from continuing operations		(58,614	)		(51,283	)		(294,424	)		(218,372	)
Adjustments to loss attributable to common shareholders:
Dividends on Series A preferred stock		11,314			10,352			43,910			40,104
Integration and severance related costs, net of tax		9,551			1,498			26,604			3,081
Loss on impairment of assets held for sale		—			—			77,755			131,698
Loss (gain) on disposition of assets, net of tax		(2,141	)		17,354			6,999			3,140
Non-cash pension settlement charge, net of tax		4,727			—			4,727			—
Non-cash interest expense for swaps, net of tax		—			(339	)		(732	)		(1,274	)
Tax impact of non-deductible goodwill		2,618			2,931			—			(8,187	)
Change in deferred tax rate		112			(2,417	)		112			(3,062	)
Other, tax		1,749			622			1,749			622
Non-cash stock compensation, net of tax		1,598			2,065			5,621			7,977
Adjusted net loss from continuing operations	$	(29,086	)	$	(19,217	)	$	(127,679	)	$	(44,273	)
Weighted average number of common shares outstanding		113,338			111,929			113,096			111,754
Adjusted diluted net income (loss) per common share:
Adjusted net loss from continuing operations	$	(0.26	)	$	(0.17	)	$	(1.13	)	$	(0.40	)
Adjusted income from discontinued operations excluding gain on sale of partnership interests, net of tax		—			0.01			—			0.16
	$	(0.26	)	$	(0.16	)	$	(1.13	)	$	(0.24	)
Notes:
Calculations above assume a 26.17% effective tax rate for the three months and year ended December 31, 2023 and 25.83% effective tax rate for the three months and year ended December 31, 2022.

Consolidated Communications Holdings, Inc.
Reconciliation of Total Net Debt to LTM Adjusted EBITDA Ratio
(Dollars in thousands)
(Unaudited)
	December 31,
	2023
Long-term debt and finance lease obligations:
Term loans, net of discount $7,017	$	992,858
6.50% Senior secured notes due 2028		750,000
5.00% Senior secured notes due 2028		400,000
Finance leases		39,240
Total debt as of December 31, 2023		2,182,098
Less: deferred debt issuance costs		(28,757	)
Less: cash, cash equivalents and short-term investments		(4,765	)
Total net debt as of December 31, 2023	$	2,148,576
Adjusted EBITDA for the 12 months ended December 31, 2023	$	319,199
Total Net Debt to last 12 months Adjusted EBITDA		6.73x

Consolidated Communications Holdings, Inc.
Key Operating Metrics
(Unaudited)
	2022															2023
	Q1			Q2			Q3			Q4			FY			Q1			Q2			Q3			Q4			FY
Passings
Total Fiber Gig+ Capable Passings ^(1)(5)(6)		689,406			831,779			947,974			1,008,660			1,008,660			1,062,518			1,119,956			1,187,076			1,236,208			1,236,208
Total DSL/Copper Passings ^(2)(3)(5)(6)		2,059,025			1,920,214			1,807,381			1,617,077			1,617,077			1,564,889			1,509,875			1,447,539			1,401,535			1,401,535
Total Passings ^(1)(2)(3)(5)(6)		2,748,431			2,751,993			2,755,355			2,625,737			2,625,737			2,627,407			2,629,831			2,634,615			2,637,743			2,637,743
% Fiber Gig+ Coverage/Total Passings		25	%		30	%		34	%		38	%		38	%		40	%		43	%		45	%		47	%		47	%
Consumer Broadband Connections
Fiber Gig+ Capable ^(3)		93,812			103,455			115,598			122,872			122,872			135,209			153,860			175,748			195,195			195,195
DSL/Copper ^(2)(3)		286,338			277,758			266,314			244,586			244,586			234,653			222,969			210,473			198,024			198,024
Total Consumer Broadband Connections^(2)(3)		380,150			381,213			381,912			367,458			367,458			369,862			376,829			386,221			393,219			393,219
Consumer Broadband Net Adds
Total Fiber Gig+ Capable Net Adds^(7)		7,690			9,643			12,143			10,599			40,075			12,337			18,651			21,888			19,447			72,323
DSL/Copper Net Adds ^(7)		(8,544	)		(8,580	)		(11,444	)		(10,783	)		(39,351	)		(9,933	)		(11,684	)		(12,496	)		(12,449	)		(46,562	)
Total Consumer Broadband Net Adds ^(7)		(854	)		1,063			699			(184	)		724			2,404			6,967			9,392			6,998			25,761
Consumer Broadband Penetration %
Fiber Gig+ Capable (on fiber passings)		13.6	%		12.4	%		12.2	%		12.2	%		12.2	%		12.7	%		13.7	%		14.8	%		15.8	%		15.8	%
DSL/Copper (on DSL/copper passings)		13.9	%		14.5	%		14.7	%		15.1	%		15.1	%		15.0	%		14.8	%		14.5	%		14.1	%		14.1	%
Total Consumer Broadband Penetration %		13.8	%		13.9	%		13.9	%		14.0	%		14.0	%		14.1	%		14.3	%		14.7	%		14.9	%		14.9	%
Consumer Average Revenue Per Unit (ARPU)
Fiber Gig+ Capable	$	63.88		$	64.95		$	65.61		$	67.14		$	65.42		$	67.51		$	68.29		$	68.78		$	68.14		$	66.90
DSL/Copper	$	50.78		$	52.36		$	53.87		$	53.55		$	53.36		$	53.21		$	55.88		$	57.18		$	56.27		$	55.83
Churn
Fiber Consumer Broadband Churn^(7)		0.9	%		1.1	%		1.2	%		1.1	%		1.1	%		1.0	%		1.3	%		1.3	%		1.2	%		1.2	%
DSL/Copper Consumer Broadband Churn ^(7)		1.3	%		1.6	%		1.8	%		1.7	%		1.6	%		1.5	%		1.7	%		2.0	%		2.0	%		1.8	%
Consumer Broadband Revenue ($ in thousands)
Fiber Broadband Revenue ^(4)	$	17,242		$	19,218		$	21,558		$	24,016		$	82,034		$	26,136		$	29,613		$	34,004		$	37,916		$	127,668
Copper and Other Broadband Revenue		48,669			48,374			48,083			44,986			190,112			41,825			41,726			41,085			38,542			163,179
Total Consumer Broadband Revenue	$	65,911		$	67,592		$	69,641		$	69,002		$	272,146		$	67,961		$	71,339		$	75,089		$	76,458		$	290,847
Consumer Voice Connections^(3)		316,634			306,458			294,441			276,779			276,779			267,509			258,680			249,081			239,587			239,587
Video Connections ^(3)		58,812			55,225			51,339			35,039			35,039			32,426			28,934			26,158			21,900			21,900
Fiber route network miles (long-haul, metro and FttP)		54,239			56,093			57,498			57,865			57,865			57,569			58,836			59,915			60,438			60,438
On-net buildings ^(3)		15,446			15,618			15,715			14,427			14,427			14,520			14,735			14,928			15,105			15,105
Notes:
(1) In Q1 2021, the Company launched a multi-year fiber build plan to upgrade 1.6 million passings or 70% of our service area to fiber Gig+ capable services. As of December 31, 2023, 227,548 passings for 2023 were upgraded to FttP and total fiber passings were 1,236,208 or 47% of the Company's service area.
(2) The sale of the non-core Ohio operations resulted in a reduction of approximately 5,658 DSL/Copper passings and 3,560 DSL/Copper broadband connections in the first quarter of 2022.
(3) The sale of the net assets of our Kansas City operations in the fourth quarter of 2022 resulted in a reduction of approximately 135,144 DSL/Copper passings, 3,325 fiber broadband connections, 10,945 DSL/Copper broadband connections, 6,670 consumer voice connections, 13,425 video connections and 1,415 on-net buildings. Prior period amounts have not been adjusted to reflect the sale.
(4) Fiber broadband revenue includes revenue from our Kansas City operations of approximately $0.3 million for the quarter ended December 31, 2022 and approximately $0.5 million for each of the quarters ended March 31, 2022 through September 30, 2022. Amounts have not been adjusted to reflect the sale.
(5) Passings counts are estimates of single family units, multi-dwelling units, and multi-tenant units within consumer, small business and enterprise. These counts are based upon the information available at this time and are subject to updates as additional information becomes available.
(6) When a passing is both fiber and DSL/Copper capable it is counted as a fiber passing.
(7) Consumer Broadband net adds and churn have been normalized to reflect the divestitures of our Kansas City and Ohio operations.