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Consolidated Communications Reports Second Quarter 2018 Results

August 2, 2018 8:00 AM

MATTOON, Ill., Aug. 02, 2018 (GLOBE NEWSWIRE) -- Consolidated Communications Holdings, Inc. (Nasdaq: CNSL) (the “Company”) reported results for the second quarter 2018 and will hold a conference call and simultaneous webcast to discuss its results and developments with respect to the Company today at 10 a.m. ET.

Second quarter 2018 Consolidated Communications financial summary:

“As we pass the one year milestone following our FairPoint acquisition, we are on track with the integration, fast start network, customer service and branding initiatives which will allow us to achieve at least $55 million in synergies.” said Bob Udell, president and chief executive officer of Consolidated Communications. “I am also pleased with the continued growth in our commercial and carrier data and transport revenues. Our commercial sales team continues to gain good traction in both legacy and Northern New England markets as we experienced sequential quarterly growth of data and transport revenues.”

“We have declared our 53rd consecutive dividend and our year-to-date payout of 66 percent is right on plan given the increased construction activities during the second quarter of 2018,” added Udell. “We are focused on turning up the new fiber connections for wireless carriers we sold this year and we have increased broadband speeds available to 214,000 homes and small businesses in Northern New England with a plan to complete a half million upgrades by year end.”

Pro Forma Financial Results for the Second Quarter

The pro forma results (below) give effect to the FairPoint acquisition as if it had occurred as of Jan. 1, 2017.

Cash Available to Pay Dividends, Capex

For the second quarter, cash available to pay dividends was $39.3 million, and the dividend payout ratio was 70 percent as compared to 78 percent in the second quarter a year ago. At June 30, 2018, cash and cash equivalents were $10.6 million. Capital expenditures were $64.0 million for the second quarter.

Financial Guidance

The Company updated its 2018 guidance as follows:

($ in millions) 2018 Updated Guidance 2018 Original Guidance
Cash interest expense $123 to $128 $123 to $128
Cash income taxes/refund1 $1 to $3 $1 to $3
Capital expenditures $235 to $240 $235 to $245
(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.

Dividend Payments

On July 30, 2018, the Company’s board of directors declared a quarterly dividend of $0.38738 per common share, which is payable on Nov. 1, 2018 to stockholders of record at the close of business on Oct. 15, 2018. This will represent the 53rd consecutive quarterly dividend paid by the Company.

Conference Call Information

The Company will host a conference call and webcast today at 10 a.m. ET / 9 a.m. CT to discuss second quarter earnings and developments with respect to the Company. 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 2387776. A telephonic replay of the conference call will be available through Aug 9, 2018 and can be accessed by calling 1-855-859-2056, conference ID 2387776.

About Consolidated Communications

Consolidated Communications Holdings, Inc. (NASDAQ: CNSL) is a leading broadband and business communications provider serving consumers, businesses of all sizes, and wireless companies and carriers, across a 23-state service area. Leveraging its advanced fiber optic network spanning more than 36,000 fiber route miles, Consolidated Communications offers a wide range of communications solutions, including: data, voice, video, managed services, cloud computing and wireless backhaul. Headquartered in Mattoon, Ill., Consolidated Communications has been providing services in many of its markets for more than a century.

Use of Non-GAAP Financial Measures

This press release, as well as the conference call, includes disclosures regarding “EBITDA,” “adjusted EBITDA,” “cash available to pay dividends” and the related “dividend payout ratio,” “total net debt to last twelve month adjusted EBITDA coverage ratio,” “adjusted diluted net income per share” and “adjusted net income 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.

Cash available to pay dividends represents adjusted EBITDA plus cash interest income less (1) cash interest expense, (2) capital expenditures and (3) cash income taxes; this calculation differs in certain respects from the similar calculation used in our credit agreement.

We present adjusted EBITDA, cash available to pay dividends and the related dividend payout ratio for several reasons. Management believes adjusted EBITDA, cash available to pay dividends and the dividend payout ratio are useful as a means to evaluate our ability to fund our estimated uses of cash (including interest on our debt) and pay dividends. In addition, we have presented adjusted EBITDA, cash available to pay dividends and the dividend payout ratio to investors in the past because they are frequently used by investors, securities analysts and other interested parties in the evaluation of companies in our industry, and management believes presenting them here provides a measure of consistency in our financial reporting. Adjusted EBITDA and cash available to pay dividends, referred to as Available Cash in our credit agreement, are also components of the restrictive covenants and financial ratios contained in our credit agreement that requires us to maintain compliance with these covenants and limit certain activities, such as our ability to incur debt and to pay dividends. The definitions in these covenants and ratios are based on adjusted EBITDA and cash available to pay dividends after giving effect to specified charges. In addition, adjusted EBITDA, cash available to pay dividends and the dividend payout ratio provide our board of directors with meaningful information to determine, with other data, assumptions and considerations, our dividend policy and our ability to pay dividends under the restrictive covenants in our credit agreement and 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. Similarly, while we may generate cash available to pay dividends, we are not required to use any such cash to pay dividends, and the payment of any dividends is subject to declaration by our board of directors, compliance with applicable law and the terms of our credit agreement. Because adjusted EBITDA is a component of the dividend payout ratio and the ratio of total net debt to last twelve month adjusted EBITDA, these measures are also subject to the material limitations discussed above. In addition, the ratio of total net debt to last twelve month adjusted EBITDA is subject to the risk that we may not be able to use the cash on the balance sheet to reduce our debt on a dollar-for-dollar basis. Management believes these ratios are useful as a means to evaluate our ability to incur additional indebtedness in the future.

We present the non-GAAP measures adjusted 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.

Preliminary Pro Forma Results

Estimated pro forma results of operations presented herein gives effect to the acquisition of FairPoint Communications, Inc. as if it had occurred on Jan. 1, 2017. The estimated pro forma results include certain accounting adjustments related to the acquisition that are expected to have a continuing impact on the combined results, including adjustments for depreciation and amortization of the acquired tangible and intangible assets , interest expense on the debt incurred to complete the acquisition and to repay certain existing indebtedness of FairPoint, the exclusion of certain acquisition related costs and the tax impact of these pro forma adjustments. These adjustments and the related results are based on a preliminary valuation of the estimated fair value of the net assets acquired, which is subject to change upon the final assessment and such changes could be material. The estimated pro forma information is not intended to represent or be indicative of the results of the combined company that would have been obtained had the acquisition been completed as of the dates presented and should not be taken as representative of the future consolidated results of the combined company.

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 stockholders of not receiving dividends and risks to our ability to pursue growth opportunities if we continue to pay dividends according to the current dividend policy; 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 and to pay dividends on our common stock; 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. 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 CommunicationsPhone: (844)-909-CNSL (2675) [email protected]

- 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,
2018 2017
ASSETS
Current assets:
Cash and cash equivalents $ 10,642 $ 15,657
Accounts receivable, net 122,167 121,528
Income tax receivable 12,391 21,846
Prepaid expenses and other current assets 43,727 33,318
Assets held for sale 20,719 21,310
Total current assets 209,646 213,659
Property, plant and equipment, net 1,986,318 2,037,606
Investments 110,105 108,858
Goodwill 1,035,274 1,038,032
Customer relationships, net 262,853 293,300
Other intangible assets 12,038 13,483
Other assets 30,578 14,188
Total assets $ 3,646,812 $ 3,719,126
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Accounts payable $ 23,057 $ 24,143
Advance billings and customer deposits 46,322 42,526
Dividends payable 27,602 27,418
Accrued compensation 55,462 49,770
Accrued interest 9,376 9,343
Accrued expense 74,112 72,041
Current portion of long-term debt and capital lease obligations 32,570 29,696
Liabilities held for sale 381 1,003
Total current liabilities 268,882 255,940
Long-term debt and capital lease obligations 2,308,752 2,311,514
Deferred income taxes 211,740 209,720
Pension and other post-retirement obligations 318,306 334,193
Other long-term liabilities 24,816 33,817
Total liabilities 3,132,496 3,145,184
Shareholders' equity:
Common stock, par value $0.01 per share; 100,000,000 shares
authorized, 71,252,576 and 70,777,354, shares outstanding
as of June 30, 2018 and December 31, 2017, respectively 713 708
Additional paid-in capital 565,961 615,662
Accumulated deficit (21,941) -
Accumulated other comprehensive loss, net (36,255) (48,083)
Noncontrolling interest 5,838 5,655
Total shareholders' equity 514,316 573,942
Total liabilities and shareholders' equity$ 3,646,812 $ 3,719,126

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,
2018 2017 2018 2017
Net revenues $ 350,221 $ 169,950 $ 706,260 $ 339,885
Operating expenses:
Cost of services and products 151,358 71,136 304,274 142,168
Selling, general and administrative
expenses 81,128 35,986 166,746 71,884
Acquisition and other transaction costs 899 1,793 1,630 3,524
Depreciation and amortization 111,741 40,483 219,640 82,678
Income from operations 5,095 20,552 13,970 39,631
Other income (expense):
Interest expense, net of interest income (32,839) (33,918) (65,555) (63,589)
Other income, net 13,175 9,341 21,570 14,054
Loss before income taxes (14,569) (4,025) (30,015) (9,904)
Income tax benefit (4,009) (1,399) (8,257) (3,573)
Net loss (10,560) (2,626) (21,758) (6,331)
Less: net income attributable to noncontrolling interest 83 102 183 82
Net loss attributable to common shareholders $ (10,643) $ (2,728) $ (21,941) $ (6,413)
Net loss per basic and diluted common shares
attributable to common shareholders$ (0.15) $ (0.06) $ (0.32) $ (0.13)

Consolidated Communications Holdings, Inc.
Pro Forma Condensed Consolidated Statements of Operations
(Dollars in thousands, except per share amounts)
(Unaudited)
Pro Forma Pro Forma
Three Months Ended Six Months Ended
June 30, June 30,
2018 2017 2018 2017
Net revenues $ 350,221 $ 369,089 $ 706,260 $ 740,932
Operating expenses:
Operating expenses (exclusive of depreciation
and amortization) 233,385 244,624 472,650 499,894
Depreciation and amortization 111,741 103,730 219,640 209,171
Income from operations 5,095 20,735 13,970 31,867
Other income (expense):
Interest expense, net of interest income (32,839) (30,938) (65,555) (59,482)
Other income, net 13,175 8,222 21,570 11,684
Loss before income taxes (14,569) (1,981) (30,015) (15,931)
Income tax benefit (4,009) (581) (8,257) (5,983)
Net loss (10,560) (1,400) (21,758) (9,948)
Less: net income attributable to noncontrolling interest 83 102 183 82
Net loss attributable to common shareholders $ (10,643) $ (1,502) $ (21,941) $ (10,030)
Net loss per basic and diluted common share
attributable to common shareholders$ (0.15) $ (0.02) $ (0.32) $ (0.14)

Consolidated Communications Holdings, Inc.
Condensed Consolidated Statements of Cash Flows
(Dollars in thousands)
(Unaudited)
Three Months Ended Six Months Ended
June 30, June 30,
2018 2017 2018 2017
OPERATING ACTIVITIES
Net loss $ (10,560) $ (2,626) $ (21,758) $ (6,331)
Adjustments to reconcile net loss to net cash provided by operating activities:
Depreciation and amortization 111,741 40,483 219,640 82,678
Deferred income taxes - - 2 22
Cash distributions from wireless partnerships in excess of/(less than) earnings (1,343) (459) 519 64
Non-cash, stock-based compensation 1,538 892 2,216 1,430
Amortization of deferred financing 1,174 4,409 2,335 8,809
Other adjustments, net 1,075 2,302 3,415 2,298
Changes in operating assets and liabilities, net (96) (3,186) (11,998) 4,563
Net cash provided by operating activities 103,529 41,815 194,371 93,533
INVESTING ACTIVITIES
Purchase of property, plant and equipment, net (64,032) (29,036) (124,840) (58,061)
Proceeds from sale of assets 1,299 58 1,443 101
Proceeds from sale of investments - - 233 -
Net cash used in investing activities (62,733) (28,978) (123,164) (57,960)
FINANCING ACTIVITIES
Proceeds from issuance of long-term debt 49,000 16,000 76,000 23,000
Payment of capital lease obligations (3,104) (1,704) (6,027) (2,993)
Payment on long-term debt (59,588) (18,250) (91,176) (27,500)
Share repurchases for minimum tax withholding - - - (41)
Dividends on common stock (27,602) (19,653) (55,019) (39,257)
Net cash used in financing activities (41,294) (23,607) (76,222) (46,791)
Net change in cash and cash equivalents (498) (10,770) (5,015) (11,218)
Cash and cash equivalents at beginning of period 11,140 26,629 15,657 27,077
Cash and cash equivalents at end of period $ 10,642 $ 15,859 $ 10,642 $ 15,859

Consolidated Communications Holdings, Inc.
Consolidated Revenue by Category
(Dollars in thousands)
(Unaudited)
Three Months Ended Six Months Ended
June 30, June 30,
2018 2017 2018 2017
Commercial and carrier:
Data and transport services (includes VoIP) $ 87,603 $ 51,528 $ 173,628 $ 102,432
Voice services 51,322 22,199 103,483 44,225
Other 14,237 4,931 26,100 8,833
153,162 78,658 303,211 155,490
Consumer:
Broadband (VoIP and Data) 62,545 28,296 125,656 56,689
Video services 22,065 22,314 44,899 45,418
Voice services 51,616 12,860 103,678 25,902
136,226 63,470 274,233 128,009
Subsidies 20,979 10,392 46,234 20,964
Network access 37,338 14,138 77,053 28,691
Other products and services 2,516 3,292 5,529 6,731
Total operating revenue $ 350,221 $ 169,950 $ 706,260 $ 339,885

Consolidated Communications Holdings, Inc.
Pro Forma Consolidated Revenue by Category
(Dollars in thousands)
(Unaudited)
Pro Forma, Three Months Ended
Q2 2018 Q1 2018 Q4 2017 Q3 2017 Q2 2017
Commercial and carrier:
Data and transport services (includes VoIP) $ 87,603 $ 86,025 $ 86,145 $ 85,644 $ 85,213
Voice services 51,322 52,161 54,137 54,270 56,180
Other 14,237 11,863 11,709 13,366 13,563
153,162 150,049 151,991 153,280 154,956
Consumer:
Broadband (VoIP and Data) 62,545 63,111 63,052 63,893 63,576
Video services 22,065 22,834 22,646 23,342 23,900
Voice services 51,616 52,062 54,581 57,213 57,381
136,226 138,007 140,279 144,448 144,857
Subsidies 20,979 25,255 20,375 20,933 22,890
Network access 37,338 39,715 40,243 41,262 42,715
Other products and services 2,516 3,013 3,472 3,406 3,671
Total operating revenue $ 350,221 $ 356,039 $ 356,360 $ 363,329 $ 369,089

Consolidated Communications Holdings, Inc.
Schedule of Adjusted EBITDA Calculation
(Dollars in thousands)
(Unaudited)
Three Months Ended Six Months Ended
June 30, June 30,
2018 2017 2018 2017
Net loss$ (10,560) $ (2,626) $ (21,758) $ (6,331)
Add (subtract):
Income tax benefit (4,009) (1,399) (8,257) (3,573)
Interest expense, net 32,839 33,918 65,555 63,589
Depreciation and amortization 111,741 40,483 219,640 82,678
EBITDA 130,011 70,376 255,180 136,363
Adjustments to EBITDA (1):
Other, net (2) 4,482 2,497 10,634 6,037
Investment income (accrual basis) (12,535) (8,196) (20,324) (13,474)
Investment distributions (cash basis) 11,224 7,736 20,694 13,380
Pension/OPEB expense 1,455 (837) 2,827 (144)
Non-cash compensation (3) 1,538 892 2,216 1,430
Adjusted EBITDA$ 136,175 $ 72,468 $ 271,227 $ 143,592
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.
Schedule of Pro Forma Adjusted EBITDA Calculation
(Dollars in thousands)
(Unaudited)
Pro Forma Pro Forma
Three Months Ended Six Months Ended
June 30, June 30,
2018 2017 2018 2017
Net loss$ (10,560) $ (1,400) $ (21,758) $ (9,948)
Add (subtract):
Income tax benefit (4,009) (581) (8,257) (5,983)
Interest expense, net 32,839 30,938 65,555 59,482
Depreciation and amortization 111,741 103,730 219,640 209,171
EBITDA 130,011 132,687 255,180 252,722
Adjustments to EBITDA (1):
Other, net (2) 4,482 658 10,634 2,777
Investment income (accrual basis) (12,535) (8,196) (20,324) (13,474)
Investment distributions (cash basis) 11,224 7,736 20,694 13,380
Pension/OPEB expense 1,455 2,085 2,827 5,875
Non-cash compensation (3) 1,538 2,244 2,216 4,416
Adjusted EBITDA$ 136,175 $ 137,214 $ 271,227 $ 265,696
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.
Cash Available to Pay Dividends
(Dollars in thousands)
(Unaudited)
Three Months Ended Six Months Ended
June 30, 2018 June 30, 2018
Adjusted EBITDA$ 136,175 $ 271,227
- Cash interest expense (32,133) (62,033)
- Capital expenditures (64,032) (124,840)
- Cash income taxes (713) (785)
Cash available to pay dividends$ 39,297 $ 83,569
Dividends Paid$ 27,602 $ 55,019
Payout Ratio 70.2% 65.8%
Note: The above calculation excludes the principal payments on our debt.

Consolidated Communications Holdings, Inc.
Total Net Debt to LTM Adjusted EBITDA Ratio
(Dollars in thousands)
(Unaudited)
June 30,
Summary of Outstanding Debt: 2018
Term loans, net of discount $7,674$ 1,804,563
Revolving loan 16,000
Senior unsecured notes due 2022, net of discount $3,336 496,664
Capital leases 36,843
Total debt as of June 30, 2018$ 2,354,070
Less deferred debt issuance costs (12,748)
Less cash on hand (10,642)
Total net debt as of June 30, 2018$ 2,330,680
Adjusted EBITDA for the
twelve months ended June 30, 2018$ 541,739 (a)
Total Net Debt to last twelve months
Adjusted EBITDA - Pro Forma 4.30x
(a) Full benefit of targeted synergies of $55.0 million are not yet fully reflected in Pro Forma Adjusted EBITDA.

Consolidated Communications Holdings, Inc.
Adjusted Net Income and Net Income Per Share
Dollars in thousands, except per share amounts)
(Unaudited)
Three Months Ended Six Months Ended
June 30, June 30,
2018 2017 2018 2017
Net loss$ (10,560) $ (2,626) $ (21,758) $ (6,331)
Transaction and severance related costs, net of tax 2,735 1,535 7,458 3,644
Storm costs, net of tax (459) - 1,716 -
Local switching support settlement, net of tax - - (2,891) -
Non-cash interest expense for swaps, net of tax 213 1,171 1,923 1,173
Amortization of commitment fee, net of tax - 2,286 - 4,481
Ticking fees on committed financing, net of tax - 6,366 - 11,314
Non-cash stock compensation, net of tax 1,115 582 1,607 914
Adjusted net income (loss)$ (6,955) $ 9,314 $ (11,945) $ 15,195
Weighted average number of shares outstanding 70,598 50,412 70,598 50,411
Adjusted diluted net income (loss) per share$ (0.10) $ 0.18 $ (0.17) $ 0.30
Notes:
Calculations above assume a 27.5% and 34.8% effective tax rate for the three months ended and 27.5% and 36.1% for the six months ended June 30, 2018 and 2017, respectively.
Net income per share has been impacted by approximately $0.11 for the three months ended June 30, 2018 and $0.22 for the six months ended June 30, 2018 due to increased depreciation and amortization associated with the preliminary valuation of the FairPoint assets.

Consolidated Communications Holdings, Inc.
Key Operating Statistics
(Unaudited)
Pro Forma
June 30, March 31, % Change June 30, % Change
2018 2018 in Qtr 2017 YOY
Voice Connections 940,713 955,419 (1.5%) 1,012,467 (7.1%)
Data and Internet Connections 786,787 785,230 0.2% 784,619 0.3%
Video Connections 97,853 100,570 (2.7%) 107,279 (8.8%)
Business and Broadband as % of total revenue (1) 74.4% 73.2% 1.6% 74.3% 0.1%
Fiber route network miles (long-haul and metro) 36,568 36,294 0.8% 35,592 2.7%
On-net buildings 9,674 9,356 3.4% 8,555 13.1%
Consumer Customers 653,910 661,758 (1.2%) 696,136 (6.1%)
Consumer ARPU $69.44 $69.52 (0.1%) $69.36 0.1%
Notes:
(1) Business and Broadband revenue % includes: commercial/carrier, equipment sales and service, directory, consumer broadband and special access.

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Source: Consolidated Communications Holdings, Inc.

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