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Filed by Consolidated CommunicationsHoldings,Inc. pursuant to Rule 425 under the Securities Actof1933, as amended, and deemed filed pursuant toRule14a-12 under the Securities Exchange Act of 1934, asamended Subject Company: FairPointCommunications,Inc. File No. of Related
Registration Statement:333-215758 THOMSON REUTERSSTREETEVENTS EDITEDTRANSCRIPT CNSL –Q4 2016 CONSOLIDATED COMMUNICATIONS HOLDINGS INC EARNINGSCALL EVENT DATE/TIME: FEBRUARY 23, 2017 / 4:00PMGMT Client Id:77
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Filed by Consolidated CommunicationsHoldings,Inc. pursuant to Rule 425 under the Securities Actof1933, as amended, and deemed filed pursuant toRule14a-12 under the Securities Exchange Act of 1934, asamended Subject Company: FairPointCommunications,Inc. File No. of Related
Registration Statement:333-215758 THOMSON REUTERSSTREETEVENTS EDITEDTRANSCRIPT CNSL –Q4 2016 CONSOLIDATED COMMUNICATIONS HOLDINGS INC EARNINGSCALL EVENT DATE/TIME: FEBRUARY 23, 2017 / 4:00PMGMT Client Id:77
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Client Id:77 FEBRUARY 23, 2017/4:00PM,CNSL-Q42016 ConsolidatedCommunicationsHoldingsIncEarningsCall CORPORATE PARTICIPANTS Jennifer SpaudeConsolidatedCommunications HoldingsInc.-DirectorofIR Bob UdellConsolidated Communications Holdings Inc.
-President & CEO Steve ChildersConsolidated Communications Holdings Inc. -CFO CONFERENCE CALL PARTICIPANTS ScottGoldmanJefferiesLLC-Analyst BarrySineDrexelHamilton-Analyst JonCharbonneauCowenandCompany-Analyst AdamIlkowitzCitigroup-Analyst
PRESENTATION Operator Goodday,ladiesandgentlemen,andwelcometoConsolidatedCommunicationsHoldings,Inc'sfourth-quarter2016resultsconferencecall. (OperatorInstructions)
Iwouldliketointroduceyourhostfortoday'sconference,Ms.JenniferSpaude,DirectorofInvestorRelations.Ma'am,pleasebegin. JenniferSpaude-ConsolidatedCommunications HoldingsInc.-DirectorofIR
Thankyou,andgoodmorningeveryone.Weappreciateyoujoiningustodayforourfourth-quarterearningscall.Joiningmeonthecalltodayare BobUdell,PresidentandChiefExecutiveOfficer,andSteveChilders,ChiefFinancialOfficer.Afterourpreparedremarkswewillopenthecallup forquestions.
PleasereviewtheSafeHarborprovisionsinourpressreleaseandinourSECfilingsforinformationaboutforward-lookingstatementsand related riskfactors.Thiscallmaycontainforward-lookingstatementswithinthemeaningsofthefederalsecuritieslaws.Suchforward-looking
statementsreflect,amongotherthings,management'scurrentexpectations,plans,andstrategies,andanticipatedfinancialresults.Allofwhich aresubject toknownandunknownrisks,uncertainties,andfactorsthatmaycauseactualresultstodiffermateriallyfromthoseexpressedor
impliedbytheseforward-lookingstatements. Today'sdiscussionwillalsoincludecertainnon-GAAPfinancialmeasures.Ourearningsreleaseforthefourth-quarterresultshavebeenpostedon
theInvestorRelationssectionofourwebsiteatConsolidated.com.ItdoesincludereconciliationofthesemeasurestothenearestGAAP equivalent.IwillnowturnthecallovertoBobUdell. BobUdell-Consolidated Communications HoldingsInc.-President&CEO Thanks Jennifer, and good morning
everyone. I appreciate you joining us today. I will provide highlights for both the fourth quarter and the full year, and Steve will provide a more detailed review of thefinancials.
Wetookimportantstepsthroughseveralstrategictransactionstosharpenandrefineourfocusonourcorebusinessandbroadbandstrategy while enhancing shareholder value. Most recently, we announced our agreement to acquire FairPoint Communications, an acquisition consistentwith Client
Id:77 -------------------------------------------- Street Events DigitalWatermark 2 THOMSON REUTERS STREETEVENTS | www.streetevents.com| ContactUs ©2017 Thomson Reuters. All rights reserved. Republication or redistribution of Thomson Reuters content, including by framing
or similar means, is prohibited without the prior written consent of Thomson Reuters. 'Thomson Reuters' and the Thomson Reuters logo are registered trademarks of Thomson Reuters and its affiliated companies.
Client Id:77 FEBRUARY 23, 2017/4:00PM,CNSL-Q42016 ConsolidatedCommunicationsHoldingsIncEarningsCall CORPORATE PARTICIPANTS Jennifer SpaudeConsolidatedCommunications HoldingsInc.-DirectorofIR Bob UdellConsolidated Communications Holdings Inc.
-President & CEO Steve ChildersConsolidated Communications Holdings Inc. -CFO CONFERENCE CALL PARTICIPANTS ScottGoldmanJefferiesLLC-Analyst BarrySineDrexelHamilton-Analyst JonCharbonneauCowenandCompany-Analyst AdamIlkowitzCitigroup-Analyst
PRESENTATION Operator Goodday,ladiesandgentlemen,andwelcometoConsolidatedCommunicationsHoldings,Inc'sfourth-quarter2016resultsconferencecall. (OperatorInstructions)
Iwouldliketointroduceyourhostfortoday'sconference,Ms.JenniferSpaude,DirectorofInvestorRelations.Ma'am,pleasebegin. JenniferSpaude-ConsolidatedCommunications HoldingsInc.-DirectorofIR
Thankyou,andgoodmorningeveryone.Weappreciateyoujoiningustodayforourfourth-quarterearningscall.Joiningmeonthecalltodayare BobUdell,PresidentandChiefExecutiveOfficer,andSteveChilders,ChiefFinancialOfficer.Afterourpreparedremarkswewillopenthecallup forquestions.
PleasereviewtheSafeHarborprovisionsinourpressreleaseandinourSECfilingsforinformationaboutforward-lookingstatementsand related riskfactors.Thiscallmaycontainforward-lookingstatementswithinthemeaningsofthefederalsecuritieslaws.Suchforward-looking
statementsreflect,amongotherthings,management'scurrentexpectations,plans,andstrategies,andanticipatedfinancialresults.Allofwhich aresubject toknownandunknownrisks,uncertainties,andfactorsthatmaycauseactualresultstodiffermateriallyfromthoseexpressedor
impliedbytheseforward-lookingstatements. Today'sdiscussionwillalsoincludecertainnon-GAAPfinancialmeasures.Ourearningsreleaseforthefourth-quarterresultshavebeenpostedon
theInvestorRelationssectionofourwebsiteatConsolidated.com.ItdoesincludereconciliationofthesemeasurestothenearestGAAP equivalent.IwillnowturnthecallovertoBobUdell. BobUdell-Consolidated Communications HoldingsInc.-President&CEO Thanks Jennifer, and good morning
everyone. I appreciate you joining us today. I will provide highlights for both the fourth quarter and the full year, and Steve will provide a more detailed review of thefinancials.
Wetookimportantstepsthroughseveralstrategictransactionstosharpenandrefineourfocusonourcorebusinessandbroadbandstrategy while enhancing shareholder value. Most recently, we announced our agreement to acquire FairPoint Communications, an acquisition consistentwith Client
Id:77 -------------------------------------------- Street Events DigitalWatermark 2 THOMSON REUTERS STREETEVENTS | www.streetevents.com| ContactUs ©2017 Thomson Reuters. All rights reserved. Republication or redistribution of Thomson Reuters content, including by framing
or similar means, is prohibited without the prior written consent of Thomson Reuters. 'Thomson Reuters' and the Thomson Reuters logo are registered trademarks of Thomson Reuters and its affiliated companies.
Client Id:77 FEBRUARY 23, 2017/4:00PM,CNSL-Q42016 ConsolidatedCommunicationsHoldingsIncEarningsCall ourstrategytosustainandgrowcashflow.TheadditionofFairPointwillsignificantlyexpandConsolidated'sbroadbandreachandscaleby
addingmorethan21,000fiberroutemilesand13newstatestoourservicearea. Webelievethiscombinationwillcreatesignificantbenefitsforourcombinedcustomersandshareholdersaswerealizeimportantgrowth opportunities,andultimatelybecomeastrongerCompany.
ConsolidatedhasasuccessfultrackrecordofintegratingCompanies.WebelieveweareinanexcellentpositiontoleverageFairPoint'senterprise-class fiberopticnetworkalongwithourextensiveproductandserviceportfoliothatbenefitourcarrier,commercial,andconsumercustomergroups.
Wearecurrentlyworkingontherequiredapprovalsandaremakinggreatprogresswiththetargetofclosingonthetransactionbymid-2017. InJanuary,weweregrantedHart-Scott-Rodinoapprovalandsecuredthefinancingtofundtheacquisitiononveryfavorableterms.We,in
collaborationwithFairPoint,havecompletedallrequiredstateandfederalmergerapplications.Thecalendarshavebeensetandweareworking throughtheregulatoryprocessineachstate.Overall,IamverypleasedwiththeprogressmadetodateontheFairPointacquisition,andI'mvery
confidentinthemanybenefitswewillrealizewiththismergerandtheincreaseinscale. Additionally,ouracquisitionofIllinois-basedChampaignTelephoneCompanyclosedonJuly1,2016.Thisisagreatexampleofasuccessfultuck-in
acquisitionandanotherimportantstepwetooktoexpandourcommercialstrategyandourfibernetwork.Itbroughtusametrofibernetworkin theChampaign-Urbanaarea,connectingmorethan300litbuildingsandacommercialandenterprisecustomerbasewhichisadjacenttoour existingIllinoisoperations.
Wealsotookstepsin2016torefineandfocusonourcorestrategybycompleting2divestitures.FirstwesoldourruralIowaILECpropertylast August.Thesecommunitieswillbebetterservedbyadjacentincumbentswhoacquiredtheassets,allowingustoallocateourcapitaldollarsto
bestsupportourbroadbandstrategyinthesemarketswithhigherreturns. Second,wecompletedthedivestitureofourequipmentandservicesbusinessinDecember,whichallowsustoconcentrateonournetwork-based
businessandbroadbandservices.WeformedapartnershipwiththeacquiringCompanytosupportournetworkcustomerswithITservices nationwide.Itisthecombinationofthesefourtransactionsthatsharpensandrefinesourfocusonourcorebusinessandbroadbandstrategy.
Thesetransitionsstrengthenourbusiness,improveEBITDAmargins,cashflows,andourabilitytodeliverlong-termgrowthandshareholdervalue. Nowletmegiveyouanoverviewofourfourth-quarterresults.Wecontinuedourstrategyofextendingourfibernetwork,maximizingcommercial
andcarrierrevenueswhileproducingcashflowswhichsupportourdividend.Revenuetotaled$175.9millioninthefourthquarterandadjusted EBITDAwas$72million.In2016weinvestedmorethan$125million,or16%ofrevenue,backintothebusiness,andreturned$78.4milliontoour
shareholdersindividends.Thisresultedinasolidpayoutratiofortheyearof71%. Letmehighlightsomeoftheresultswithinthequarter,andourcustomerchannels.First,withinourcommercialchannelwehadanotherstrong
quarterofgrowthinMetroethernetanddataconnectionswithanincreaseof7%inthequarterand22%fortheyear.Werecentlywonacontract fora34-sitemedicalservicenetworkinTexas,providingaprivateethernetnetworksolutionwithgigabitcapacity,whichwillbeutilizedfor
telemedicine.Thesolution,whichisagoodexampleofourconsultativesalesapproach,willbefullyinstalledbymid-year,andbringswithitatotal contractvalueof$16million.
In2016,wecontinuedtoexpandourfiberfootprint,growingournetworkby434routemiles,whichsupportedourcarrierteams'additionofanet 28newtowersand270additionalon-netbuildings,whichalsocreateanopportunityforourcommercialteam.
Inadditionwesecuredourfirstsmall-cellcontractsandsawdemandforproposalsofthesepickingup.Despiteincreasedpricecompression,we grewcarrierandcommercialrevenues2%in2016.
Withinourconsumerchannel,wecontinuetofocusonsecuringthebroadbandpipetothehomeandofferinghigher-speedconnectionsat competitiveprices.Wenowofferover90%ofourmarketablehomesabroadbandconnectionof20megpersecondorhigherand42%canreceive Client Id:77
-------------------------------------------- Street Events DigitalWatermark 3 THOMSON REUTERS STREETEVENTS | www.streetevents.com| ContactUs ©2017 Thomson Reuters. All rights reserved. Republication or redistribution of Thomson Reuters content, including by framing or
similar means, is prohibited without the prior written consent of Thomson Reuters. 'Thomson Reuters' and the Thomson Reuters logo are registered trademarks of Thomson Reuters and its affiliated companies.
Client Id:77 FEBRUARY 23, 2017/4:00PM,CNSL-Q42016 ConsolidatedCommunicationsHoldingsIncEarningsCall ourstrategytosustainandgrowcashflow.TheadditionofFairPointwillsignificantlyexpandConsolidated'sbroadbandreachandscaleby
addingmorethan21,000fiberroutemilesand13newstatestoourservicearea. Webelievethiscombinationwillcreatesignificantbenefitsforourcombinedcustomersandshareholdersaswerealizeimportantgrowth opportunities,andultimatelybecomeastrongerCompany.
ConsolidatedhasasuccessfultrackrecordofintegratingCompanies.WebelieveweareinanexcellentpositiontoleverageFairPoint'senterprise-class fiberopticnetworkalongwithourextensiveproductandserviceportfoliothatbenefitourcarrier,commercial,andconsumercustomergroups.
Wearecurrentlyworkingontherequiredapprovalsandaremakinggreatprogresswiththetargetofclosingonthetransactionbymid-2017. InJanuary,weweregrantedHart-Scott-Rodinoapprovalandsecuredthefinancingtofundtheacquisitiononveryfavorableterms.We,in
collaborationwithFairPoint,havecompletedallrequiredstateandfederalmergerapplications.Thecalendarshavebeensetandweareworking throughtheregulatoryprocessineachstate.Overall,IamverypleasedwiththeprogressmadetodateontheFairPointacquisition,andI'mvery
confidentinthemanybenefitswewillrealizewiththismergerandtheincreaseinscale. Additionally,ouracquisitionofIllinois-basedChampaignTelephoneCompanyclosedonJuly1,2016.Thisisagreatexampleofasuccessfultuck-in
acquisitionandanotherimportantstepwetooktoexpandourcommercialstrategyandourfibernetwork.Itbroughtusametrofibernetworkin theChampaign-Urbanaarea,connectingmorethan300litbuildingsandacommercialandenterprisecustomerbasewhichisadjacenttoour existingIllinoisoperations.
Wealsotookstepsin2016torefineandfocusonourcorestrategybycompleting2divestitures.FirstwesoldourruralIowaILECpropertylast August.Thesecommunitieswillbebetterservedbyadjacentincumbentswhoacquiredtheassets,allowingustoallocateourcapitaldollarsto
bestsupportourbroadbandstrategyinthesemarketswithhigherreturns. Second,wecompletedthedivestitureofourequipmentandservicesbusinessinDecember,whichallowsustoconcentrateonournetwork-based
businessandbroadbandservices.WeformedapartnershipwiththeacquiringCompanytosupportournetworkcustomerswithITservices nationwide.Itisthecombinationofthesefourtransactionsthatsharpensandrefinesourfocusonourcorebusinessandbroadbandstrategy.
Thesetransitionsstrengthenourbusiness,improveEBITDAmargins,cashflows,andourabilitytodeliverlong-termgrowthandshareholdervalue. Nowletmegiveyouanoverviewofourfourth-quarterresults.Wecontinuedourstrategyofextendingourfibernetwork,maximizingcommercial
andcarrierrevenueswhileproducingcashflowswhichsupportourdividend.Revenuetotaled$175.9millioninthefourthquarterandadjusted EBITDAwas$72million.In2016weinvestedmorethan$125million,or16%ofrevenue,backintothebusiness,andreturned$78.4milliontoour
shareholdersindividends.Thisresultedinasolidpayoutratiofortheyearof71%. Letmehighlightsomeoftheresultswithinthequarter,andourcustomerchannels.First,withinourcommercialchannelwehadanotherstrong
quarterofgrowthinMetroethernetanddataconnectionswithanincreaseof7%inthequarterand22%fortheyear.Werecentlywonacontract fora34-sitemedicalservicenetworkinTexas,providingaprivateethernetnetworksolutionwithgigabitcapacity,whichwillbeutilizedfor
telemedicine.Thesolution,whichisagoodexampleofourconsultativesalesapproach,willbefullyinstalledbymid-year,andbringswithitatotal contractvalueof$16million.
In2016,wecontinuedtoexpandourfiberfootprint,growingournetworkby434routemiles,whichsupportedourcarrierteams'additionofanet 28newtowersand270additionalon-netbuildings,whichalsocreateanopportunityforourcommercialteam.
Inadditionwesecuredourfirstsmall-cellcontractsandsawdemandforproposalsofthesepickingup.Despiteincreasedpricecompression,we grewcarrierandcommercialrevenues2%in2016.
Withinourconsumerchannel,wecontinuetofocusonsecuringthebroadbandpipetothehomeandofferinghigher-speedconnectionsat competitiveprices.Wenowofferover90%ofourmarketablehomesabroadbandconnectionof20megpersecondorhigherand42%canreceive Client Id:77
-------------------------------------------- Street Events DigitalWatermark 3 THOMSON REUTERS STREETEVENTS | www.streetevents.com| ContactUs ©2017 Thomson Reuters. All rights reserved. Republication or redistribution of Thomson Reuters content, including by framing or
similar means, is prohibited without the prior written consent of Thomson Reuters. 'Thomson Reuters' and the Thomson Reuters logo are registered trademarks of Thomson Reuters and its affiliated companies.
Client Id:77 FEBRUARY 23, 2017/4:00PM,CNSL-Q42016 ConsolidatedCommunicationsHoldingsIncEarningsCall our100megproduct.Thenumberofcustomerssubscribingtoour1-gigspeedofferinghasmorethandoubledinthelastyear.Andthedemands
forhigherspeedswillcontinueandournetwork,ourservice,andoursupportarekeydifferentiators. InQ4,dataandbroadbandconnectionsgrewby2,900.However,consumerrevenuewasdown,primarilyduetovoiceservicesanddigitalTV
declines.Asyouknow,wearefocusedondeliveringaprofitablevideoproductwhilewefocusourcustomersonover-the-topversustraditional cableTVofferings.Withthat,IwillturnthecallovertoSteveforthefinancialreview.Steve. SteveChilders-Consolidated Communications HoldingsInc.-CFO
ThanksBob,andgoodmorningtoeveryone.AsBobmentioned,thefourthquarterwasaveryimportantquarterforusaswecompletedseveral strategictransactions.ThismorningIwillreviewourfourth-quarterfinancialresultscomparedtothefourthquarter2015.Iwillalsoupdateyouon
2financingswedidinthequarter,andIwillendbyupdatingourguidancefor2017. Operatingrevenueforthefourthquarterwas$175.9millioncomparedto$188.2millionayearago.Overhalfofthe$12.3milliondeclinewasdue
todivestituresofourequipmentservicesbusinessandtheIowaILEC.SubsidyrevenuenetoftheIowaILECsalewasdown$1.0millionforthe quarterafterthesecondstepdownofCAF-IIfundingwhichoccurseachyearinthethirdquarter.
Wegrewcommercialandcarrierrevenuedespitepricecompressionandchurnoncarrieraccounts.Consumerrevenuewasimpactedbythesale ofourIowaILEC,andcontinuingdeclineinvoiceandaccessrevenue.82%ofourrevenuemixinthefourthquarterwasfrombusinessandbroadband
servicesaswecontinuetogrowstrategicrevenuetocountertheexpectedlegacydeclines. Totaloperatingexpensesexclusiveofdepreciationandamortizationwere$115.3millioncomparedto$121.8millionforthesamequarterlast
year.Theimprovementinoperatingexpensesin2016istheresultofourcontinuedfocusoncoststructure,productmarginexpansion,aswellas thesaleoftheequipmentbusinessandtheIowaILEC.
Netinterestexpenseforthequarterwas$20millioncomparedto$19.3millionforthefourthquarterof2015.InOctoberwedidarefinancingof ourtermdebtthatresultedina25basispointratereductionforanannualizedcashinterestsavingsofover$2million.Wealsoamortizedone
monthor$1.2millionasacommitmentfeeontheFairPointacquisitionfinancing.Iwilltalkinalittlebitmoredetailabouteachofthesefinancings inafewminutes. Otherincomenetwas$9.8millioncomparedto$9.4millioninthefourthquarterof2015.Cashdistributionsfromourwirelesspartnershipsinthe
quarterwere$8.9millionascomparedto$11.2millionayearago.Distributionstotaled$32.1millionin2016,down$13.2millionfrom2015,which didincludeapproximately$10millioninnonrecurringdistribution,forourshareofproceedsfromthesaleofpartnership-ownedtowersales.
Weighingallthesefactorsandadjustingforcertainitemsasoutlinedinthetableonourpressrelease,adjustednetincomewas$5.5millioninthe fourthquarterandadjustednetincomepersharewas$0.11,whichcomparesto$8.1millionand$0.16pershareinthesameperiod2015.
AdjustedEBITDAwas$72millioninthefourthquartercomparedto$79.4millionintheprioryear.Approximately$2millionofthedeclineisdue tothefourth-quarterperformanceoftheequipmentservicesbusinessandasaresultofthesaleofthebusinessonDecember6,aswellasthe
September1saleoftheIowaILEC. Cashdistributionsfromwirelessweredown$2.3million.Asmentionedearlier,wealsosawdeclinesinsubsidiesduetothesecondannualstep downinConnectAmericaFundinthethirdquarter.Wealsocontinuedtoexperienceerosioninlegacyvoiceandaccessrevenues.
AdjustedEBITDAfor2016was$305.8millioncomparedto$328.9millionfor2015.Theprimarydifferencesintheyear-over-yearresultsarethat 2015includeda$10millionofnonrecurringwirelessdistributionaswellasthefourth-quartersaleoftheEnventisbillingsoftwarebusiness.2016
includesthedivestituresoftheequipmentbusinessandtheIowaILEC. Client Id:77 -------------------------------------------- Street Events DigitalWatermark 4 THOMSON REUTERS STREETEVENTS | www.streetevents.com| ContactUs ©2017 Thomson Reuters. All rights reserved.
Republication or redistribution of Thomson Reuters content, including by framing or similar means, is prohibited without the prior written consent of Thomson Reuters. 'Thomson Reuters' and the Thomson Reuters logo are registered trademarks of Thomson Reuters and its affiliated
companies.
Client Id:77 FEBRUARY 23, 2017/4:00PM,CNSL-Q42016 ConsolidatedCommunicationsHoldingsIncEarningsCall our100megproduct.Thenumberofcustomerssubscribingtoour1-gigspeedofferinghasmorethandoubledinthelastyear.Andthedemands
forhigherspeedswillcontinueandournetwork,ourservice,andoursupportarekeydifferentiators. InQ4,dataandbroadbandconnectionsgrewby2,900.However,consumerrevenuewasdown,primarilyduetovoiceservicesanddigitalTV
declines.Asyouknow,wearefocusedondeliveringaprofitablevideoproductwhilewefocusourcustomersonover-the-topversustraditional cableTVofferings.Withthat,IwillturnthecallovertoSteveforthefinancialreview.Steve. SteveChilders-Consolidated Communications HoldingsInc.-CFO
ThanksBob,andgoodmorningtoeveryone.AsBobmentioned,thefourthquarterwasaveryimportantquarterforusaswecompletedseveral strategictransactions.ThismorningIwillreviewourfourth-quarterfinancialresultscomparedtothefourthquarter2015.Iwillalsoupdateyouon
2financingswedidinthequarter,andIwillendbyupdatingourguidancefor2017. Operatingrevenueforthefourthquarterwas$175.9millioncomparedto$188.2millionayearago.Overhalfofthe$12.3milliondeclinewasdue
todivestituresofourequipmentservicesbusinessandtheIowaILEC.SubsidyrevenuenetoftheIowaILECsalewasdown$1.0millionforthe quarterafterthesecondstepdownofCAF-IIfundingwhichoccurseachyearinthethirdquarter.
Wegrewcommercialandcarrierrevenuedespitepricecompressionandchurnoncarrieraccounts.Consumerrevenuewasimpactedbythesale ofourIowaILEC,andcontinuingdeclineinvoiceandaccessrevenue.82%ofourrevenuemixinthefourthquarterwasfrombusinessandbroadband
servicesaswecontinuetogrowstrategicrevenuetocountertheexpectedlegacydeclines. Totaloperatingexpensesexclusiveofdepreciationandamortizationwere$115.3millioncomparedto$121.8millionforthesamequarterlast
year.Theimprovementinoperatingexpensesin2016istheresultofourcontinuedfocusoncoststructure,productmarginexpansion,aswellas thesaleoftheequipmentbusinessandtheIowaILEC.
Netinterestexpenseforthequarterwas$20millioncomparedto$19.3millionforthefourthquarterof2015.InOctoberwedidarefinancingof ourtermdebtthatresultedina25basispointratereductionforanannualizedcashinterestsavingsofover$2million.Wealsoamortizedone
monthor$1.2millionasacommitmentfeeontheFairPointacquisitionfinancing.Iwilltalkinalittlebitmoredetailabouteachofthesefinancings inafewminutes. Otherincomenetwas$9.8millioncomparedto$9.4millioninthefourthquarterof2015.Cashdistributionsfromourwirelesspartnershipsinthe
quarterwere$8.9millionascomparedto$11.2millionayearago.Distributionstotaled$32.1millionin2016,down$13.2millionfrom2015,which didincludeapproximately$10millioninnonrecurringdistribution,forourshareofproceedsfromthesaleofpartnership-ownedtowersales.
Weighingallthesefactorsandadjustingforcertainitemsasoutlinedinthetableonourpressrelease,adjustednetincomewas$5.5millioninthe fourthquarterandadjustednetincomepersharewas$0.11,whichcomparesto$8.1millionand$0.16pershareinthesameperiod2015.
AdjustedEBITDAwas$72millioninthefourthquartercomparedto$79.4millionintheprioryear.Approximately$2millionofthedeclineisdue tothefourth-quarterperformanceoftheequipmentservicesbusinessandasaresultofthesaleofthebusinessonDecember6,aswellasthe
September1saleoftheIowaILEC. Cashdistributionsfromwirelessweredown$2.3million.Asmentionedearlier,wealsosawdeclinesinsubsidiesduetothesecondannualstep downinConnectAmericaFundinthethirdquarter.Wealsocontinuedtoexperienceerosioninlegacyvoiceandaccessrevenues.
AdjustedEBITDAfor2016was$305.8millioncomparedto$328.9millionfor2015.Theprimarydifferencesintheyear-over-yearresultsarethat 2015includeda$10millionofnonrecurringwirelessdistributionaswellasthefourth-quartersaleoftheEnventisbillingsoftwarebusiness.2016
includesthedivestituresoftheequipmentbusinessandtheIowaILEC. Client Id:77 -------------------------------------------- Street Events DigitalWatermark 4 THOMSON REUTERS STREETEVENTS | www.streetevents.com| ContactUs ©2017 Thomson Reuters. All rights reserved.
Republication or redistribution of Thomson Reuters content, including by framing or similar means, is prohibited without the prior written consent of Thomson Reuters. 'Thomson Reuters' and the Thomson Reuters logo are registered trademarks of Thomson Reuters and its affiliated
companies.
Client Id:77 QUESTIONS AND ANSWERS Operator (OperatorInstructions) The first question is from Scott Goldman, Jefferies, your line isopen. FEBRUARY 23, 2017/4:00PM,CNSL-Q42016 ConsolidatedCommunicationsHoldingsIncEarningsCall
Inthequarterwemade$31millionincapitalinvestmentsandinvested$125millionintothebusinessforthefullyear2016.Wehaveflexibilityin ourcapitalplanswithtwo-thirdstiedtosuccess-basedopportunitieswithacontinuedfocusonfiberdeployment,andourcapitalinvestments
havetomeetourinternalpaybacksandreturns. Fromaliquiditystandpoint,weendedthequarterwithapproximately$27millionincashandthefull$110millionavailableinourrevolver.For thequarter,ourtotalnetleverageratiowas4.46.
Cashavailableto[pay]dividendswas$25.1millionresultinginapayoutratioof78.2%forthequartercomparedtoour2016full-yearpayout ratioof71%.Lastyearwedeliveredvaluetoourshareholdersthrough$78.4millionindeclareddividends.Andwithrespecttoourdividend,our Board
ofDirectorsdeclaredthenextquarterlydividendofapproximately$0.39percommonsharepayableonMay2,2017,toshareholdersof recordonApril15,2017.Thiswillrepresentour47thconsecutivequarterlydividend.
Wesignificantlyimprovedourfinancialflexibilityandcapitalstructurewithtwofinancingsinthefourthquarter.InOctoberwerefinancedour legacysecuredtermdebt,whichresultedinextendingtermby3yearsandthecouponinterestratewasreduced25basispointsasitwasrepriced
to3%.Wealsoextendedthematurityoftherevolverby3years,andupsizeditfrom$75millionto$110million.Aspartoftherefinance,the [recurrence]assessedforsecuredleveragewasincreasedto3timesfrom2.75times.
Additionally,inthefourthquarter,wealsosecuredfinancingcommitmentsunderanewincrementaltermloanfacilityfortheacquisitionofFairPoint Communications.Thenewloanfacilityprovidesupto$935millionthatwillbedrawnatclosing.Theterms,conditions,andcovenantsofanew
incrementaltermloanfacilityaremateriallyconsistentwiththeCompany'sexistingtermloanandwillbetreatedasafungibletack-ontothe existingfacilityatclose.ThenewfacilityhasaninterestrateofLIBORpus3%witha1%LIBORfloor.
Weareextremelypleasedwiththeoutcomeofbothofthesetransactionsandwehavesignificantlyde-riskedourcapitalstructurebygettingthe acquisitionfinancingbehindus.Wewillpaymonthlytickingfees,whichstartedtoaccrueJanuary2015throughtheclosingatasimilarratetothe
effectiverateonthetermdebt.WegreatlyappreciatethestrongsupportofourplantoacquireFairPointbyourunderwritersandourbankgroup. Nowletmeshareourguidancefor2017.OnastandalonebasisandwithoutgivingeffectofthependingFairPointacquisition,weexpectcash
interestcosttobeintherangeof$70millionto$72million.Cashincometaxesareexpectedtobelessthan$2million.Andweexpectcapital expenditurestobeintherangeof$115millionto$120million.
WewillresetguidanceafterwecloseontheFairPointtransaction.Withthat,IwillnowturnthecallbackovertoBobforclosingremarks. BobUdell-Consolidated Communications HoldingsInc.-President&CEO
ThanksSteve.InclosingtodayI'mconfidentinourabilitytoexecute,deliverresults,andreturnvaluetoourshareholders.Wearefocusedon investingforthefuture,expandingourfiberfootprint,andgrowingourstrategicrevenues.Itisthecombinationofthesestepsthatprovide
long-termsustainabilityandvaluetoourshareholders,ourcustomers,andouremployees.WelookforwardtoclosingontheFairPoint acquisition. Oncewedo,wewillbededicatedtoensuringasmoothandseamlessintegrationwhileextendingourbusinessandbroadband
strategyacrossthecombinedfootprint.Withthat,Vincewilltakeanyquestionsatthistime. Client Id:77 -------------------------------------------- Street Events DigitalWatermark 5 THOMSON REUTERS STREETEVENTS | www.streetevents.com| ContactUs ©2017 Thomson Reuters. All rights
reserved. Republication or redistribution of Thomson Reuters content, including by framing or similar means, is prohibited without the prior written consent of Thomson Reuters. 'Thomson Reuters' and the Thomson Reuters logo are registered trademarks of Thomson Reuters and its
affiliated companies.
Client Id:77 QUESTIONS AND ANSWERS Operator (OperatorInstructions) The first question is from Scott Goldman, Jefferies, your line isopen. FEBRUARY 23, 2017/4:00PM,CNSL-Q42016 ConsolidatedCommunicationsHoldingsIncEarningsCall
Inthequarterwemade$31millionincapitalinvestmentsandinvested$125millionintothebusinessforthefullyear2016.Wehaveflexibilityin ourcapitalplanswithtwo-thirdstiedtosuccess-basedopportunitieswithacontinuedfocusonfiberdeployment,andourcapitalinvestments
havetomeetourinternalpaybacksandreturns. Fromaliquiditystandpoint,weendedthequarterwithapproximately$27millionincashandthefull$110millionavailableinourrevolver.For thequarter,ourtotalnetleverageratiowas4.46.
Cashavailableto[pay]dividendswas$25.1millionresultinginapayoutratioof78.2%forthequartercomparedtoour2016full-yearpayout ratioof71%.Lastyearwedeliveredvaluetoourshareholdersthrough$78.4millionindeclareddividends.Andwithrespecttoourdividend,our Board
ofDirectorsdeclaredthenextquarterlydividendofapproximately$0.39percommonsharepayableonMay2,2017,toshareholdersof recordonApril15,2017.Thiswillrepresentour47thconsecutivequarterlydividend.
Wesignificantlyimprovedourfinancialflexibilityandcapitalstructurewithtwofinancingsinthefourthquarter.InOctoberwerefinancedour legacysecuredtermdebt,whichresultedinextendingtermby3yearsandthecouponinterestratewasreduced25basispointsasitwasrepriced
to3%.Wealsoextendedthematurityoftherevolverby3years,andupsizeditfrom$75millionto$110million.Aspartoftherefinance,the [recurrence]assessedforsecuredleveragewasincreasedto3timesfrom2.75times.
Additionally,inthefourthquarter,wealsosecuredfinancingcommitmentsunderanewincrementaltermloanfacilityfortheacquisitionofFairPoint Communications.Thenewloanfacilityprovidesupto$935millionthatwillbedrawnatclosing.Theterms,conditions,andcovenantsofanew
incrementaltermloanfacilityaremateriallyconsistentwiththeCompany'sexistingtermloanandwillbetreatedasafungibletack-ontothe existingfacilityatclose.ThenewfacilityhasaninterestrateofLIBORpus3%witha1%LIBORfloor.
Weareextremelypleasedwiththeoutcomeofbothofthesetransactionsandwehavesignificantlyde-riskedourcapitalstructurebygettingthe acquisitionfinancingbehindus.Wewillpaymonthlytickingfees,whichstartedtoaccrueJanuary2015throughtheclosingatasimilarratetothe
effectiverateonthetermdebt.WegreatlyappreciatethestrongsupportofourplantoacquireFairPointbyourunderwritersandourbankgroup. Nowletmeshareourguidancefor2017.OnastandalonebasisandwithoutgivingeffectofthependingFairPointacquisition,weexpectcash
interestcosttobeintherangeof$70millionto$72million.Cashincometaxesareexpectedtobelessthan$2million.Andweexpectcapital expenditurestobeintherangeof$115millionto$120million.
WewillresetguidanceafterwecloseontheFairPointtransaction.Withthat,IwillnowturnthecallbackovertoBobforclosingremarks. BobUdell-Consolidated Communications HoldingsInc.-President&CEO
ThanksSteve.InclosingtodayI'mconfidentinourabilitytoexecute,deliverresults,andreturnvaluetoourshareholders.Wearefocusedon investingforthefuture,expandingourfiberfootprint,andgrowingourstrategicrevenues.Itisthecombinationofthesestepsthatprovide
long-termsustainabilityandvaluetoourshareholders,ourcustomers,andouremployees.WelookforwardtoclosingontheFairPoint acquisition. Oncewedo,wewillbededicatedtoensuringasmoothandseamlessintegrationwhileextendingourbusinessandbroadband
strategyacrossthecombinedfootprint.Withthat,Vincewilltakeanyquestionsatthistime. Client Id:77 -------------------------------------------- Street Events DigitalWatermark 5 THOMSON REUTERS STREETEVENTS | www.streetevents.com| ContactUs ©2017 Thomson Reuters. All rights
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Client Id:77 ScottGoldman-JefferiesLLC-Analyst Hey.Goodmorningeverybody,coupleofquestionsifIcould.Firstontherevenuesideoftheequationlookingparticularlyatcommercialand
carrier.Iguessatwo-parter.I'mwonderingifthereisanyimpactfromthetimingofanyofthesalesortransactionsthatwouldhaveimpactedthe 4Qresults?Butthenaswelookoutinto2017,IthinkBob,youmentioned,maybeSteveaswell,pricecompressionandchurnoffsettingsomeof
thegainsyouareseeinginMetroethernet.Wonderinghowweshouldthinkaboutpricecompressionandchurnandhowthatmightimpact2017 commercialandcarrierrevenue?
Andthensecondly,Bob,ontheFairPoint,obviouslyyouhadacoupleofmoremonthstomaybedigunderthehoodalittlebit.I'mwonderingif thereisanythingyou'vediscoveredyouknowasyouhavebeendiggingdeeperthatgetsyoumoreexcitedaboutthatdealthanwhenyoufirst announcedit?
BobUdell-Consolidated Communications HoldingsInc.-President&CEO YesScott,thanksforthequestion.Iwilltakethesecondpartofthefirstquestionfirst,ifyoucanfollowthat.AndthenwewillgettoFairPointafter Stevepileson.
First,intermsofpricecompression.WeareseeingcostperMegaswellassomeinterestbythewirelessbackhaulcustomersofoursinlargerdeals acrossourentirefootprint.ThatiswherescalewillworktoourfavorwiththeFairPointacquisition.Andinthiscase,itcausedustorewritesome
TDMcircuits,largerdeals,downasweexpandedthetermofthosecontractsandreplacedthemwithethernet.Sothatiskindoftheinflectionpoint weexperiencedinthefourthquarteronapricecompressionbasis.Intermsofthemovingpartsaroundthedeals,Steve,dowanttocommenton that?
SteveChilders-Consolidated Communications HoldingsInc.-CFO Sure.Scott,IthinkyourquestionwasdirectlywiththedivestituresofEISinIowa,theimpactthathadonfourth-quarterrevenues.SoEISdidhave
amajorimpactonoverallconsolidatedrevenue.Youcanseebythebreakoutontherevenuescheduleinthepressrelease,butitwouldnothave impactedordirectlyimpactedthecommercialandcarrierlinethatyouaskedabout.TheIowasaleoftheILECortheIowaILECsalewouldhave
hadmoreofanimpactonconsumerandsubsidies.Butthereareprobably$300,000to$400,000incommercialrevenuethatwedidn'tgetinthe fourthquarterduetothesale. BobUdell-Consolidated Communications HoldingsInc.-President&CEO
Thewaytothinkaboutthis,thewaywethinkaboutthis,isit'sa3%growthopportunitythatwepursueeachyear.Andwewouldnotexpectthat tobeanydifferent.Thepipelineisstrong,it'sbiggerthanithaseverbeenintermsofsoldrevenuetobeinstalled.Itisahigherpercentof
facilities-basedorderswithourexpandedfootprintbasedonnetworkbuildoutsandsowefeelprettygoodaboutourconsultativesales approach,andtherunwayaheadfor2017. ScottGoldman-JefferiesLLC-Analyst
That'sveryhelpful.Justonequickhousekeeping.Theequipmentsalesandserviceline,doesthatcompletelygoawayin2017?Isthereanything intherethatwasnotpartofthesaleofthatbusiness? FEBRUARY 23, 2017/4:00PM,CNSL-Q42016 ConsolidatedCommunicationsHoldingsIncEarningsCall
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Client Id:77 ScottGoldman-JefferiesLLC-Analyst Hey.Goodmorningeverybody,coupleofquestionsifIcould.Firstontherevenuesideoftheequationlookingparticularlyatcommercialand
carrier.Iguessatwo-parter.I'mwonderingifthereisanyimpactfromthetimingofanyofthesalesortransactionsthatwouldhaveimpactedthe 4Qresults?Butthenaswelookoutinto2017,IthinkBob,youmentioned,maybeSteveaswell,pricecompressionandchurnoffsettingsomeof
thegainsyouareseeinginMetroethernet.Wonderinghowweshouldthinkaboutpricecompressionandchurnandhowthatmightimpact2017 commercialandcarrierrevenue?
Andthensecondly,Bob,ontheFairPoint,obviouslyyouhadacoupleofmoremonthstomaybedigunderthehoodalittlebit.I'mwonderingif thereisanythingyou'vediscoveredyouknowasyouhavebeendiggingdeeperthatgetsyoumoreexcitedaboutthatdealthanwhenyoufirst announcedit?
BobUdell-Consolidated Communications HoldingsInc.-President&CEO YesScott,thanksforthequestion.Iwilltakethesecondpartofthefirstquestionfirst,ifyoucanfollowthat.AndthenwewillgettoFairPointafter Stevepileson.
First,intermsofpricecompression.WeareseeingcostperMegaswellassomeinterestbythewirelessbackhaulcustomersofoursinlargerdeals acrossourentirefootprint.ThatiswherescalewillworktoourfavorwiththeFairPointacquisition.Andinthiscase,itcausedustorewritesome
TDMcircuits,largerdeals,downasweexpandedthetermofthosecontractsandreplacedthemwithethernet.Sothatiskindoftheinflectionpoint weexperiencedinthefourthquarteronapricecompressionbasis.Intermsofthemovingpartsaroundthedeals,Steve,dowanttocommenton that?
SteveChilders-Consolidated Communications HoldingsInc.-CFO Sure.Scott,IthinkyourquestionwasdirectlywiththedivestituresofEISinIowa,theimpactthathadonfourth-quarterrevenues.SoEISdidhave
amajorimpactonoverallconsolidatedrevenue.Youcanseebythebreakoutontherevenuescheduleinthepressrelease,butitwouldnothave impactedordirectlyimpactedthecommercialandcarrierlinethatyouaskedabout.TheIowasaleoftheILECortheIowaILECsalewouldhave
hadmoreofanimpactonconsumerandsubsidies.Butthereareprobably$300,000to$400,000incommercialrevenuethatwedidn'tgetinthe fourthquarterduetothesale. BobUdell-Consolidated Communications HoldingsInc.-President&CEO
Thewaytothinkaboutthis,thewaywethinkaboutthis,isit'sa3%growthopportunitythatwepursueeachyear.Andwewouldnotexpectthat tobeanydifferent.Thepipelineisstrong,it'sbiggerthanithaseverbeenintermsofsoldrevenuetobeinstalled.Itisahigherpercentof
facilities-basedorderswithourexpandedfootprintbasedonnetworkbuildoutsandsowefeelprettygoodaboutourconsultativesales approach,andtherunwayaheadfor2017. ScottGoldman-JefferiesLLC-Analyst
That'sveryhelpful.Justonequickhousekeeping.Theequipmentsalesandserviceline,doesthatcompletelygoawayin2017?Isthereanything intherethatwasnotpartofthesaleofthatbusiness? FEBRUARY 23, 2017/4:00PM,CNSL-Q42016 ConsolidatedCommunicationsHoldingsIncEarningsCall
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Client Id:77 FEBRUARY 23, 2017/4:00PM,CNSL-Q42016 ConsolidatedCommunicationsHoldingsIncEarningsCall BobUdell-Consolidated Communications HoldingsInc.-President&CEO
TheEISline--yes,Scott,itwillgoaway.There'sacoupleofrevenuesharingopportunitiesbasedonthepartnershipagreementthatwehavewith E-Plus, the company that bought the asset. But it will probably, that [build] revenues will probably flow through the commercialrevenueline.
ScottGoldman-JefferiesLLC-Analyst Iappreciatethecolor,thanksguys. BobUdell-Consolidated Communications HoldingsInc.-President&CEO AsfarastheFairPointquestion,Scott,wegrowincreasinglymoreexcitedthemorewelearnabouttheteamthere,theopportunitytoleverage
thatfootprint.Theyhavedonesomethingsreallyrightonthecarrierandtheverylargecustomersidethatwearegoingtoexploitinourplaybook forcommercialandconsumer.SoIwouldsaythatourexcitementaroundtheopportunitycontinuestogrowandthatprocessisontrackandwe feelgoodabouttheprogress.
ScottGoldman-JefferiesLLC-Analyst Great,thanksBob. Operator Thankyou,ournextquestionisfromBarrySineofDrexelHamilton,yourlineisopen. BarrySine-DrexelHamilton-Analyst
Goodmorningfolks.Bob,kindofalongquestionforyou.Youguysobviouslyoperateinalotofprettydisparatemarketswithdifferent dynamics. Couldyougiveusaquickwhirlwindtourofthemarkets,whattheeconomyislookingat--like,whatisspendinglookinglike?You
know,whatisthecompetitivesituationlookinglike? BobUdell-Consolidated Communications HoldingsInc.-President&CEO Wow. BarrySine-DrexelHamilton-Analyst In10wordsorless.[laughter] BobUdell-Consolidated Communications HoldingsInc.-President&CEO
Yes.Letmedoitthisway.AndIwillstartatahighlevel.Ourpredominantcarrier--orpredominantcompetitorsarethecableguys.Andwherewe seethemmostaggressiveisinconsumerandsmallbiz.Ourfacilities-basedandservicedisciplinereallypositionsuswellagainstallofthem,and
theone-offfibercompetitorsthatwehaveinvariousareas. Client Id:77 -------------------------------------------- Street Events DigitalWatermark 7 THOMSON REUTERS STREETEVENTS | www.streetevents.com| ContactUs ©2017 Thomson Reuters. All rights reserved. Republication or
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Client Id:77 FEBRUARY 23, 2017/4:00PM,CNSL-Q42016 ConsolidatedCommunicationsHoldingsIncEarningsCall BobUdell-Consolidated Communications HoldingsInc.-President&CEO
TheEISline--yes,Scott,itwillgoaway.There'sacoupleofrevenuesharingopportunitiesbasedonthepartnershipagreementthatwehavewith E-Plus, the company that bought the asset. But it will probably, that [build] revenues will probably flow through the commercialrevenueline.
ScottGoldman-JefferiesLLC-Analyst Iappreciatethecolor,thanksguys. BobUdell-Consolidated Communications HoldingsInc.-President&CEO AsfarastheFairPointquestion,Scott,wegrowincreasinglymoreexcitedthemorewelearnabouttheteamthere,theopportunitytoleverage
thatfootprint.Theyhavedonesomethingsreallyrightonthecarrierandtheverylargecustomersidethatwearegoingtoexploitinourplaybook forcommercialandconsumer.SoIwouldsaythatourexcitementaroundtheopportunitycontinuestogrowandthatprocessisontrackandwe feelgoodabouttheprogress.
ScottGoldman-JefferiesLLC-Analyst Great,thanksBob. Operator Thankyou,ournextquestionisfromBarrySineofDrexelHamilton,yourlineisopen. BarrySine-DrexelHamilton-Analyst
Goodmorningfolks.Bob,kindofalongquestionforyou.Youguysobviouslyoperateinalotofprettydisparatemarketswithdifferent dynamics. Couldyougiveusaquickwhirlwindtourofthemarkets,whattheeconomyislookingat--like,whatisspendinglookinglike?You
know,whatisthecompetitivesituationlookinglike? BobUdell-Consolidated Communications HoldingsInc.-President&CEO Wow. BarrySine-DrexelHamilton-Analyst In10wordsorless.[laughter] BobUdell-Consolidated Communications HoldingsInc.-President&CEO
Yes.Letmedoitthisway.AndIwillstartatahighlevel.Ourpredominantcarrier--orpredominantcompetitorsarethecableguys.Andwherewe seethemmostaggressiveisinconsumerandsmallbiz.Ourfacilities-basedandservicedisciplinereallypositionsuswellagainstallofthem,and
theone-offfibercompetitorsthatwehaveinvariousareas. Client Id:77 -------------------------------------------- Street Events DigitalWatermark 7 THOMSON REUTERS STREETEVENTS | www.streetevents.com| ContactUs ©2017 Thomson Reuters. All rights reserved. Republication or
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Client Id:77 FEBRUARY 23, 2017/4:00PM,CNSL-Q42016 ConsolidatedCommunicationsHoldingsIncEarningsCall Welookforreasonablereturns.Andsotheonlychallengingpositionsthatwegetiniswherescaleworksagainstus,andwecan'tusethescale
thatothersmighthavetobenefitoffsettingpostalizedpricingthatsomeofthelargerwirelessguysarepursuing.Weareveryexcitedthatthe FairPointdealhelpsputusinabetterpositionfromascaleperspective.
Sowhenyougomarketbymarketyoureallyhavetohandicapthecompetitionbasedontheeffectivenessofthecablecompetitorthatisthere. AndthesmallermorenimbleoneslikeMidcontinentintheNorth,Armstrong,theyareprettygoodcompetitorsandtheycanmovemorequickly.
theComcast,theTimeWarner's,wefeelveryeffectivetocompeteagainst.AndtheyareinthehugeTexasmarkets,thePennsylvaniamarket.Some ofitisComcast,someofitisArmstrong.Soitreallyvariesmarketbymarket.
Letmesaythisonabroadsense.Therewasalittlebitslowerdecision-makingthatwesawacrossallofourmarketsthroughtheelectiontime periodofthirdandfourthquarterlastyear.Thatwasobviousinalotofwirelessproposalsthatwentoutforsmallsalesaswellasonthecommercial
front.Andwhenyouaremakingfacilities-baseddecisionsthereareusuallylongerleadtimes. ButIthinktherewassomeelectionparalysisthatsetinforashorttime.Thatisstartingtofreeup.AlsowhenyoulookacrosstheUSmarkets,you
know,weareseeingyouknowaniceresurgenceintheSouthinTexas,eventhoughoilisstillnotgrowingtremendouslyinvalue.Thatmarket seemsnormalizedintermsofwhatweusedtoseeasleadingindicatorsasoutofbusinesslabelsthroughourdirectoryoutthere.Thatisfairlywell
stabilized.I'mseeingamorepositivesignfromaneconomicleadingindicatorsthatwewatchforthestarter,butIwouldsaythirdandfourth quarterwasalittlebitsofterthanwehadseeninthepast. BarrySine-DrexelHamilton-Analyst
Okay.Andnexttalkaboutthesalesforcealittlebit.Areyoustillgrowingsalesheadcount?Whereareyouatintermsofthesizeinthequota-bearing salesforce?Andwhatareyoulookinglikeintermsofproductivity?Aretheyalluptospeed,aretherestillgainsthatyoucanhavefromtheexisting salesforce?
BobUdell-Consolidated Communications HoldingsInc.-President&CEO Wearemakingsomeadditionsinmarketswhereweseethemoresignificantgrowthpotential.AndIwouldsaywearetradingthatheadcount
aroundtomaximizeouropportunity.Weareprettystableataround80quota-bearingandwiththewholeteamatabout140,whichincludes managementandsalesengineers.WearefeelingIwouldsayprettystable.
Thethingthatwehavedonetoenhanceourdistributioncapabilityisreallydevelopathree-prongedapproachonthesalesside.SoallofourFTEs, full-timeequivalentdirectsalesfolks,havestayedrelativelystableatabout80quota-bearing.Thereasonwehaveyouknow140totalinthis
organizationis,we'vegotaconsultativeapproachthatsupportsnotonlyadirectchannelbutalsothetwootherchannelsagentsandinside sales. Wehavereallybeefeduptheinsidesalesthatfocusesonourbronzecustomer,sothatwecanmoreeffectivelycompetewiththecable
guys,whoarefairlyeffectiveinthatcustomerprofileorsize. Andtheagentprogramisjustbeginningtogetreallygoodtractionforustowardstheendoffourthquarter.Youmayrememberwesignedan
agreementwithanationalagentproviderthathasreallybeen,youknow,showinggoodsignsofbuildingasolidfunnel.Soyoucan'treallycount itexclusivelyonour80FTEagents,thatisgoingtobeafairlystablenumber,eventhoughwetradetheresourcesbetweenourmostfertilemarkets.
BarrySine-DrexelHamilton-Analyst Okay.Andthenagain,shiftinggearsovertoFairPoint;justtalkabouttheapprovalprocess.Wehaveprettygoodvisibilityinthe3NewEngland
states,hearingsaregoingon,andIhaven'tseenmanymajorissuescropup.Thetelecomgroupofpropertiesthere'salotofstatesgoingonthere. HowmanydoyouneedtoactuallygothroughaPUCprocess?Andonceyougetthatclosed,doyouseesynergies?Iknowforexample,Pennsylvania
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Client Id:77 FEBRUARY 23, 2017/4:00PM,CNSL-Q42016 ConsolidatedCommunicationsHoldingsIncEarningsCall Welookforreasonablereturns.Andsotheonlychallengingpositionsthatwegetiniswherescaleworksagainstus,andwecan'tusethescale
thatothersmighthavetobenefitoffsettingpostalizedpricingthatsomeofthelargerwirelessguysarepursuing.Weareveryexcitedthatthe FairPointdealhelpsputusinabetterpositionfromascaleperspective.
Sowhenyougomarketbymarketyoureallyhavetohandicapthecompetitionbasedontheeffectivenessofthecablecompetitorthatisthere. AndthesmallermorenimbleoneslikeMidcontinentintheNorth,Armstrong,theyareprettygoodcompetitorsandtheycanmovemorequickly.
theComcast,theTimeWarner's,wefeelveryeffectivetocompeteagainst.AndtheyareinthehugeTexasmarkets,thePennsylvaniamarket.Some ofitisComcast,someofitisArmstrong.Soitreallyvariesmarketbymarket.
Letmesaythisonabroadsense.Therewasalittlebitslowerdecision-makingthatwesawacrossallofourmarketsthroughtheelectiontime periodofthirdandfourthquarterlastyear.Thatwasobviousinalotofwirelessproposalsthatwentoutforsmallsalesaswellasonthecommercial
front.Andwhenyouaremakingfacilities-baseddecisionsthereareusuallylongerleadtimes. ButIthinktherewassomeelectionparalysisthatsetinforashorttime.Thatisstartingtofreeup.AlsowhenyoulookacrosstheUSmarkets,you
know,weareseeingyouknowaniceresurgenceintheSouthinTexas,eventhoughoilisstillnotgrowingtremendouslyinvalue.Thatmarket seemsnormalizedintermsofwhatweusedtoseeasleadingindicatorsasoutofbusinesslabelsthroughourdirectoryoutthere.Thatisfairlywell
stabilized.I'mseeingamorepositivesignfromaneconomicleadingindicatorsthatwewatchforthestarter,butIwouldsaythirdandfourth quarterwasalittlebitsofterthanwehadseeninthepast. BarrySine-DrexelHamilton-Analyst
Okay.Andnexttalkaboutthesalesforcealittlebit.Areyoustillgrowingsalesheadcount?Whereareyouatintermsofthesizeinthequota-bearing salesforce?Andwhatareyoulookinglikeintermsofproductivity?Aretheyalluptospeed,aretherestillgainsthatyoucanhavefromtheexisting salesforce?
BobUdell-Consolidated Communications HoldingsInc.-President&CEO Wearemakingsomeadditionsinmarketswhereweseethemoresignificantgrowthpotential.AndIwouldsaywearetradingthatheadcount
aroundtomaximizeouropportunity.Weareprettystableataround80quota-bearingandwiththewholeteamatabout140,whichincludes managementandsalesengineers.WearefeelingIwouldsayprettystable.
Thethingthatwehavedonetoenhanceourdistributioncapabilityisreallydevelopathree-prongedapproachonthesalesside.SoallofourFTEs, full-timeequivalentdirectsalesfolks,havestayedrelativelystableatabout80quota-bearing.Thereasonwehaveyouknow140totalinthis
organizationis,we'vegotaconsultativeapproachthatsupportsnotonlyadirectchannelbutalsothetwootherchannelsagentsandinside sales. Wehavereallybeefeduptheinsidesalesthatfocusesonourbronzecustomer,sothatwecanmoreeffectivelycompetewiththecable
guys,whoarefairlyeffectiveinthatcustomerprofileorsize. Andtheagentprogramisjustbeginningtogetreallygoodtractionforustowardstheendoffourthquarter.Youmayrememberwesignedan
agreementwithanationalagentproviderthathasreallybeen,youknow,showinggoodsignsofbuildingasolidfunnel.Soyoucan'treallycount itexclusivelyonour80FTEagents,thatisgoingtobeafairlystablenumber,eventhoughwetradetheresourcesbetweenourmostfertilemarkets.
BarrySine-DrexelHamilton-Analyst Okay.Andthenagain,shiftinggearsovertoFairPoint;justtalkabouttheapprovalprocess.Wehaveprettygoodvisibilityinthe3NewEngland
states,hearingsaregoingon,andIhaven'tseenmanymajorissuescropup.Thetelecomgroupofpropertiesthere'salotofstatesgoingonthere. HowmanydoyouneedtoactuallygothroughaPUCprocess?Andonceyougetthatclosed,doyouseesynergies?Iknowforexample,Pennsylvania
hasapropertyjustsouthofyourPittsburghproperty. Client Id:77 -------------------------------------------- Street Events DigitalWatermark 8 THOMSON REUTERS STREETEVENTS | www.streetevents.com| ContactUs ©2017 Thomson Reuters. All rights reserved. Republication or
redistribution of Thomson Reuters content, including by framing or similar means, is prohibited without the prior written consent of Thomson Reuters. 'Thomson Reuters' and the Thomson Reuters logo are registered trademarks of Thomson Reuters and its affiliated companies.
Client Id:77 BobUdell-Consolidated Communications HoldingsInc.-President&CEO Ican'tanswerspecificsynergyquestionsatthisstagearoundPennsylvania,becauseIjustdon'tknow.Youknow,untilwegetunderneaththe
coversandworkmorecloselywithmanagementwhowillbeinvolvedinthatdecision-makingprocess,whatthosesynergiesaregoingtolooklike. ButwhatIdoknowis,wearewellalongintheprocess.Ican'tremember--Steve,doyouhavethenumber?Outofthe17statesthereare14of
themthataretelecom.Thereareroughly7or8thatrequireformalapprovalprocess.Andthereisacorresponding5or6Ithinkthatwehave alreadygottenapprovalin.Andsoitismovingalongquiteefficiently.Youknowtherearenormalsnagshereandthere,butnothingthat'ssurprising
andnothingwehaven'tfacedbefore. BarrySine-DrexelHamilton-Analyst Okay,mylastquestionisontheVerizondistribution.Thestepdownin4Qversusayearago.Wasthatdue,weretheresometowerproceedsinthe
year-agofourthquarter?Ifnot,whatisdrivingthat?Andthenifyouhaveanysenseofwhat2017willlooklike?Specifically,arethereanyknown one-timersthatmayimpactyourdistributionsontheVerizonproperties? SteveChilders-Consolidated Communications HoldingsInc.-CFO
ThisisSteve.Thedistributionsforfull-year2016are$32millioncomparedtokindofournormalizedrunratefortheprioryearsofbeing around $35million.AndIthinkontheone-timedistributionsfortowersaleswecalledoutthe$10millionthatwereceivedlastyear.Iguesstheyactually
soldthetowersecondquarter,wegotourproratashareoftheproceedsinthirdquarter. Thereisnothingrelativetothetowersaleshashappenedsubsequentlytothat.Ithinkwhatweareseeingarethedistributionswereprimarilyin
acoupleofspecificmarketsforthepartnershipsthatweareinvolvedin.OneinTexas,theHoustonSMSA,aswellasoneofthePittsburghRSAs thatVerizonisjustacceleratingsomeofthe4GLTEbuildoutinthosemarkets.ParticularlyinHouston,theyweredoingalittlebitofprepforthe
Superbowlthatjusthappened. Soagain,ifthey'rebuildingonthedatasideofthenetwork,maybeit'sashort-terminconveniencerelativetothedistributions.Buthopefullywe
willseegreaterdistributionsdowntheroadastheyenhancethedataprofile.Theyarealsomaking--theyaregettingmuchmorecompetitivewith SprintandT-Mobilenowwiththedeviceplans.Ithinkthey'rereallyjuststartingtomatchkindoftheofferingsforthoseprograms.Soweexpect
toseethenumbersimprovegoingforward. Butagain,for2016,Iwouldkindofputyouinthe$32millionto$35millionrange.Wehopewestartseeingandgettingtothehighsideasthey movethroughsomeoftheCapExdeployment. BarrySine-DrexelHamilton-Analyst
Okay,that'smyquestions.Thankyougentlemen. Operator Thankyou.OurnextquestionisfromJonCharbonneauofCowenandCompany,yourlineisopen. FEBRUARY 23, 2017/4:00PM,CNSL-Q42016 ConsolidatedCommunicationsHoldingsIncEarningsCall Client Id:77
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Client Id:77 BobUdell-Consolidated Communications HoldingsInc.-President&CEO Ican'tanswerspecificsynergyquestionsatthisstagearoundPennsylvania,becauseIjustdon'tknow.Youknow,untilwegetunderneaththe
coversandworkmorecloselywithmanagementwhowillbeinvolvedinthatdecision-makingprocess,whatthosesynergiesaregoingtolooklike. ButwhatIdoknowis,wearewellalongintheprocess.Ican'tremember--Steve,doyouhavethenumber?Outofthe17statesthereare14of
themthataretelecom.Thereareroughly7or8thatrequireformalapprovalprocess.Andthereisacorresponding5or6Ithinkthatwehave alreadygottenapprovalin.Andsoitismovingalongquiteefficiently.Youknowtherearenormalsnagshereandthere,butnothingthat'ssurprising
andnothingwehaven'tfacedbefore. BarrySine-DrexelHamilton-Analyst Okay,mylastquestionisontheVerizondistribution.Thestepdownin4Qversusayearago.Wasthatdue,weretheresometowerproceedsinthe
year-agofourthquarter?Ifnot,whatisdrivingthat?Andthenifyouhaveanysenseofwhat2017willlooklike?Specifically,arethereanyknown one-timersthatmayimpactyourdistributionsontheVerizonproperties? SteveChilders-Consolidated Communications HoldingsInc.-CFO
ThisisSteve.Thedistributionsforfull-year2016are$32millioncomparedtokindofournormalizedrunratefortheprioryearsofbeing around $35million.AndIthinkontheone-timedistributionsfortowersaleswecalledoutthe$10millionthatwereceivedlastyear.Iguesstheyactually
soldthetowersecondquarter,wegotourproratashareoftheproceedsinthirdquarter. Thereisnothingrelativetothetowersaleshashappenedsubsequentlytothat.Ithinkwhatweareseeingarethedistributionswereprimarilyin
acoupleofspecificmarketsforthepartnershipsthatweareinvolvedin.OneinTexas,theHoustonSMSA,aswellasoneofthePittsburghRSAs thatVerizonisjustacceleratingsomeofthe4GLTEbuildoutinthosemarkets.ParticularlyinHouston,theyweredoingalittlebitofprepforthe
Superbowlthatjusthappened. Soagain,ifthey'rebuildingonthedatasideofthenetwork,maybeit'sashort-terminconveniencerelativetothedistributions.Buthopefullywe
willseegreaterdistributionsdowntheroadastheyenhancethedataprofile.Theyarealsomaking--theyaregettingmuchmorecompetitivewith SprintandT-Mobilenowwiththedeviceplans.Ithinkthey'rereallyjuststartingtomatchkindoftheofferingsforthoseprograms.Soweexpect
toseethenumbersimprovegoingforward. Butagain,for2016,Iwouldkindofputyouinthe$32millionto$35millionrange.Wehopewestartseeingandgettingtothehighsideasthey movethroughsomeoftheCapExdeployment. BarrySine-DrexelHamilton-Analyst
Okay,that'smyquestions.Thankyougentlemen. Operator Thankyou.OurnextquestionisfromJonCharbonneauofCowenandCompany,yourlineisopen. FEBRUARY 23, 2017/4:00PM,CNSL-Q42016 ConsolidatedCommunicationsHoldingsIncEarningsCall Client Id:77
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Client Id:77 FEBRUARY 23, 2017/4:00PM,CNSL-Q42016 ConsolidatedCommunicationsHoldingsIncEarningsCall JonCharbonneau-CowenandCompany-Analyst
Great,thankyoufortakingthequestions.CanyoujustgiveusanupdateonhowweshouldbethinkingaboutEBITDAmargins,thisyear,especially giventhesaleofyourequipmentbusiness?Andthenwithinyourconsumerbusiness,canyoualsogiveanupdateonhowweshouldbethinking
aboutpotentialpriceincreasesoverthecourseofthisyear?Thankyou. SteveChilders-Consolidated Communications HoldingsInc.-CFO John,thisisSteve.Iwilltakethefirstpart.OverallonEBITDAmargins,Ithinkforthefourthquarterwewereroughly41%andthat'swithwireless
beingdownjustalittlebit.IfyoutakeEISoutofthere,andthatisbasicallyforfull-year,itis$45millioninrevenue,roughly$4millioninEBITDA.I wouldprobablyexpecttosee,again,ifeverythingelseremainedsteady,justfromaEBITDAmarginperspective,EBITDAmarginsprobablyimprove 200basispoints.
BobUdell-Consolidated Communications HoldingsInc.-President&CEO Withrespecttotheconsumerbusiness,wecontinueasyouknowtofocusonprofitabilityandatransitionofthevideoproductoverthetop.
RPUremainsrelativelystableifnotslightlyincreasing.Priceincreaseswerejustputinplaceatthebeginningofthisyearortowardtheendof--I guesswasitwastheendofDecember?Sothosewillbegettingtractionhereinthenextquarter'sresults. JonCharbonneau-CowenandCompany-Analyst Great,thankyou.
Operator Thankyou,ournextquestionisfromAdamIlkowitzofCiti,yourlineisopen. AdamIlkowitz-Citigroup-Analyst Thankyouverymuch.Iwantedtorevisitthewirelessbackhaulpricingthatyouhadmentioned--alotofothersintheindustryhaveseenittoo.Is
thatsomethingthatisfullypricedintothefourthquarter?Andwiththechangeinpricing,haveyoucompletelyormostlymitigatedthepricing changefrommovingfromTDMtoethernetforthatcustomer? BobUdell-Consolidated Communications HoldingsInc.-President&CEO
Yes,specifictoactuallytwoofthosecustomers.Butthatisanevolutionaryitemforus.Andfortheindustry.Therearefewerandfewerofthose TDM-orientedoverhangsoutthere.SoIdon'texpectthemtobeassignificantasweexperiencedthispastquarter.However,wehavebeenincredibly
successfulatturningthemintoextendedtermsoradditionalsitesthatweareeithercurrentlybuildingout,orwill,aswecompleteadditional negotiations.SothatisaboutasmuchspecificityasIcangiveonthatfornow. AdamIlkowitz-Citigroup-Analyst
Iguessjusttofinalizethat,doyouexpectadditionalpressurefromthosetwocontractsinthefirstquarter?Orwasthefourthquarterfullypriced inthatpressure? Client Id:77 -------------------------------------------- Street Events DigitalWatermark 10 THOMSON REUTERS STREETEVENTS |
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Client Id:77 FEBRUARY 23, 2017/4:00PM,CNSL-Q42016 ConsolidatedCommunicationsHoldingsIncEarningsCall JonCharbonneau-CowenandCompany-Analyst
Great,thankyoufortakingthequestions.CanyoujustgiveusanupdateonhowweshouldbethinkingaboutEBITDAmargins,thisyear,especially giventhesaleofyourequipmentbusiness?Andthenwithinyourconsumerbusiness,canyoualsogiveanupdateonhowweshouldbethinking
aboutpotentialpriceincreasesoverthecourseofthisyear?Thankyou. SteveChilders-Consolidated Communications HoldingsInc.-CFO John,thisisSteve.Iwilltakethefirstpart.OverallonEBITDAmargins,Ithinkforthefourthquarterwewereroughly41%andthat'swithwireless
beingdownjustalittlebit.IfyoutakeEISoutofthere,andthatisbasicallyforfull-year,itis$45millioninrevenue,roughly$4millioninEBITDA.I wouldprobablyexpecttosee,again,ifeverythingelseremainedsteady,justfromaEBITDAmarginperspective,EBITDAmarginsprobablyimprove 200basispoints.
BobUdell-Consolidated Communications HoldingsInc.-President&CEO Withrespecttotheconsumerbusiness,wecontinueasyouknowtofocusonprofitabilityandatransitionofthevideoproductoverthetop.
RPUremainsrelativelystableifnotslightlyincreasing.Priceincreaseswerejustputinplaceatthebeginningofthisyearortowardtheendof--I guesswasitwastheendofDecember?Sothosewillbegettingtractionhereinthenextquarter'sresults. JonCharbonneau-CowenandCompany-Analyst Great,thankyou.
Operator Thankyou,ournextquestionisfromAdamIlkowitzofCiti,yourlineisopen. AdamIlkowitz-Citigroup-Analyst Thankyouverymuch.Iwantedtorevisitthewirelessbackhaulpricingthatyouhadmentioned--alotofothersintheindustryhaveseenittoo.Is
thatsomethingthatisfullypricedintothefourthquarter?Andwiththechangeinpricing,haveyoucompletelyormostlymitigatedthepricing changefrommovingfromTDMtoethernetforthatcustomer? BobUdell-Consolidated Communications HoldingsInc.-President&CEO
Yes,specifictoactuallytwoofthosecustomers.Butthatisanevolutionaryitemforus.Andfortheindustry.Therearefewerandfewerofthose TDM-orientedoverhangsoutthere.SoIdon'texpectthemtobeassignificantasweexperiencedthispastquarter.However,wehavebeenincredibly
successfulatturningthemintoextendedtermsoradditionalsitesthatweareeithercurrentlybuildingout,orwill,aswecompleteadditional negotiations.SothatisaboutasmuchspecificityasIcangiveonthatfornow. AdamIlkowitz-Citigroup-Analyst
Iguessjusttofinalizethat,doyouexpectadditionalpressurefromthosetwocontractsinthefirstquarter?Orwasthefourthquarterfullypriced inthatpressure? Client Id:77 -------------------------------------------- Street Events DigitalWatermark 10 THOMSON REUTERS STREETEVENTS |
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Client Id:77 FEBRUARY 23, 2017/4:00PM,CNSL-Q42016 ConsolidatedCommunicationsHoldingsIncEarningsCall BobUdell-Consolidated Communications HoldingsInc.-President&CEO Withthose,withoneofthosecontractsitisfullypricedin.Withthesecond,thereisstillalittleoverhang.
AdamIlkowitz-Citigroup-Analyst Andthenifweweretoremovethosetwocontractsfromthequarter,wouldyouhavebeenabletogrowcommercialrevenuesequentially,orjust
thedataandtransportlinessequentially?Maybeyoucouldhelpusunderstandhowthatimpactedthesequentialchangeincommercialand carrier? BobUdell-Consolidated Communications HoldingsInc.-President&CEO
Eric,wearelookingatouranalysishere.Ithinktheansweris,growthobviouslywouldhavebeenalittlebithigher.Butrightnowwecouldn'tgive youafirmnumberonthat.Sowecouldgetbacktoyouonthat.Butobviouslywithpricecompressionandthechurnwehadinthelatethird-quarter
earlyfourth-quarterdidimpactfourth-quarternumbers.Andwewilljustyouknow[willask].Ithinkwewouldhavebeenpositiveoverall,Ijust can'ttellyouhowmuchrightnow. AdamIlkowitz-Citigroup-Analyst
Andthenjustonefinalone.GiventhattheFairPointacquisitionisgoingtobeincreasingthescale,Idon'tknowhowhandyanynumbersareon this.Butdoyouhaveasenseofhowmuchofyourcommercialandcarrierrevenueiscomingfromperhapsmultipleregionsversusjustoneregion?
HowmanysellinIllinoisandHoustonforexampleversusjustHouston. BobUdell-Consolidated Communications HoldingsInc.-President&CEO Thatisagoodquestion.Wedolookatthat.Wedon'tquitefranklydiscloseinthatlevelofdetail,wedon'tdisclosemarketdataonaspecificbasis.
Iwouldtellyouthis.Thenumberofmultiplestateinquiriesonespeciallythecarrierfrontareincreasing.It'sjustanaturalevolutionthatthecarrier islookingtoremaincompetitiveontheircoststructure,wirelesscarriers,andsqueezethenetworkprovidersasaresult.Sothatiswherescale
hasbeenasignificantpriorityofoursyouknowwithinourplaybookforthatcustomerchannel.Sowhatitwasfiveyearsago,oreventwoyears ago,isdifferentthanwhatitisnow.Anditwouldbetoughtogiveyouknowevenaroughpercentage. AdamIlkowitz-Citigroup-Analyst Okay,thankyouverymuch.
Operator Thankyou.Atthistimetherearenootherquestionsinqueue,IwouldliketoturnitbacktoMr.Udellforanyclosingcomments. BobUdell-Consolidated Communications HoldingsInc.-President&CEO
ThanksVincent.Thankyouallagainforjoiningustoday.WelookforwardtoupdatingyouonourfirstquarterresultsandprogresswiththeFairPoint acquisitioninthenearfuture.Withthat,thankyouandhaveagreatday. Client Id:77 -------------------------------------------- Street Events DigitalWatermark 11
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Client Id:77 FEBRUARY 23, 2017/4:00PM,CNSL-Q42016 ConsolidatedCommunicationsHoldingsIncEarningsCall BobUdell-Consolidated Communications HoldingsInc.-President&CEO Withthose,withoneofthosecontractsitisfullypricedin.Withthesecond,thereisstillalittleoverhang.
AdamIlkowitz-Citigroup-Analyst Andthenifweweretoremovethosetwocontractsfromthequarter,wouldyouhavebeenabletogrowcommercialrevenuesequentially,orjust
thedataandtransportlinessequentially?Maybeyoucouldhelpusunderstandhowthatimpactedthesequentialchangeincommercialand carrier? BobUdell-Consolidated Communications HoldingsInc.-President&CEO
Eric,wearelookingatouranalysishere.Ithinktheansweris,growthobviouslywouldhavebeenalittlebithigher.Butrightnowwecouldn'tgive youafirmnumberonthat.Sowecouldgetbacktoyouonthat.Butobviouslywithpricecompressionandthechurnwehadinthelatethird-quarter
earlyfourth-quarterdidimpactfourth-quarternumbers.Andwewilljustyouknow[willask].Ithinkwewouldhavebeenpositiveoverall,Ijust can'ttellyouhowmuchrightnow. AdamIlkowitz-Citigroup-Analyst
Andthenjustonefinalone.GiventhattheFairPointacquisitionisgoingtobeincreasingthescale,Idon'tknowhowhandyanynumbersareon this.Butdoyouhaveasenseofhowmuchofyourcommercialandcarrierrevenueiscomingfromperhapsmultipleregionsversusjustoneregion?
HowmanysellinIllinoisandHoustonforexampleversusjustHouston. BobUdell-Consolidated Communications HoldingsInc.-President&CEO Thatisagoodquestion.Wedolookatthat.Wedon'tquitefranklydiscloseinthatlevelofdetail,wedon'tdisclosemarketdataonaspecificbasis.
Iwouldtellyouthis.Thenumberofmultiplestateinquiriesonespeciallythecarrierfrontareincreasing.It'sjustanaturalevolutionthatthecarrier islookingtoremaincompetitiveontheircoststructure,wirelesscarriers,andsqueezethenetworkprovidersasaresult.Sothatiswherescale
hasbeenasignificantpriorityofoursyouknowwithinourplaybookforthatcustomerchannel.Sowhatitwasfiveyearsago,oreventwoyears ago,isdifferentthanwhatitisnow.Anditwouldbetoughtogiveyouknowevenaroughpercentage. AdamIlkowitz-Citigroup-Analyst Okay,thankyouverymuch.
Operator Thankyou.Atthistimetherearenootherquestionsinqueue,IwouldliketoturnitbacktoMr.Udellforanyclosingcomments. BobUdell-Consolidated Communications HoldingsInc.-President&CEO
ThanksVincent.Thankyouallagainforjoiningustoday.WelookforwardtoupdatingyouonourfirstquarterresultsandprogresswiththeFairPoint acquisitioninthenearfuture.Withthat,thankyouandhaveagreatday. Client Id:77 -------------------------------------------- Street Events DigitalWatermark 11
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IntheconferencecallsuponwhichEventTranscriptsarebased,companiesmaymakeprojectionsorotherforward-lookingstatementsregardingavarietyofitems.Suchforward-lookingstatementsarebasedupon
currentexpectationsandinvolverisksanduncertainties.Actualresultsmaydiffermateriallyfromthosestatedinanyforward-lookingstatementbasedonanumberofimportantfactorsandrisks,whicharemore
specificallyidentifiedinthecompanies'mostrecentSECfilings.Althoughthecompaniesmayindicateandbelievethattheassumptionsunderlyingtheforward-lookingstatementsarereasonable,anyofthe
assumptionscouldproveinaccurateorincorrectand,therefore,therecanbenoassurancethattheresultscontemplatedintheforward-lookingstatementswillberealized.
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ConsolidatedCommunicationsHoldingsIncEarningsCall Operator Ladies and gentlemen, thank you for participation in today's conference. This concludes the program, you may now disconnect. Everyone havea greatday. Client Id:77 -------------------------------------------- Street Events
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SafeHarbor 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, current expectations, plans, strategies, and anticipated financial results of Consolidated
Communications Holdings, Inc. (the “Company”) and FairPoint Communications, Inc. (“FairPoint”), both separately and as a combined entity. There are a number of risks, uncertainties, and conditions that may cause the actual results of the Company and FairPoint, both separately and
as a combined entity, to differ materially from those expressed or implied by these forward-looking statements. These risks and uncertainties include the timing and ability to complete the proposed acquisition of FairPoint by the Company, the expected benefits of the integration of the
two companies and successful integration of FairPoint’s operations with those of the Company and realization of the synergies from the integration, as well as a number of factors related to the respective businesses of the Company and FairPoint, including economic and financial market
conditions generally and economic conditions in the Company’s and FairPoint’s service areas; various risks to stockholders of not receiving dividends and risks to the Company’s ability to pursue growth opportunities if the Company continues to pay dividends according to the current
dividend policy; various risks to the price and volatility of the Company’s common stock; changes in the valuation of pension plan assets; the substantial amount of debt and the Company’s ability to repay or refinance it or incur additional debt in the future; the Company’s need for a
significant amount of cash to service and repay the debt and to pay dividends on its common stock; restrictions contained in the Company’s debt agreements that limit the discretion of management in operating the business; legal or regulatory proceedings or other matters that impact the
timing or ability to complete the acquisition as contemplated, regulatory changes, including changes to subsidies, rapid development and introduction of new technologies and intense competition in the telecommunications industry; risks associated with the Company’s possible pursuit of
acquisitions; system failures; 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; telecommunications carriers disputing and/or avoiding their obligations to pay network
access charges for use of the Company’s and FairPoint’s network; high costs of regulatory compliance; the competitive impact of legislation and regulatory changes in the telecommunications industry; liability and compliance costs regarding environmental regulations; the possibility of
disruption from the integration of the two companies making it more difficult to maintain business and operational relationships; the possibility that the acquisition is not consummated, including, but not limited to, due to the failure to satisfy the closing conditions; the possibility that the
merger or the acquisition may be more expensive to complete than anticipated, including as a result of unexpected factors or events; and diversion of management’s attention from ongoing business operations and opportunities. A detailed discussion of risks and uncertainties that could
cause actual results and events to differ materially from such forward-looking statements are discussed in more detail in the Registration Statement on Form S-4 that the Company filed with the SEC on January 26, 2017, as amended on February 24, 2017, that includes a joint proxy
statement of the Company and FairPoint and which also constitutes a prospectus of the Company and in the Company’s and FairPoint’s respective filings with the SEC, including the Annual Report on Form 10-K of the Company for the year ended December 31, 2015, which was filed
with the SEC on February 29, 2016, under the heading “Item 1A—Risk Factors,” and the Annual Report on Form 10-K of FairPoint for the year ended December 31, 2015, which was filed with the SEC on March 2, 2016, under the heading “Item 1A—Risk Factors,” and
SafeHarbor 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, current expectations, plans, strategies, and anticipated financial results of Consolidated
Communications Holdings, Inc. (the “Company”) and FairPoint Communications, Inc. (“FairPoint”), both separately and as a combined entity. There are a number of risks, uncertainties, and conditions that may cause the actual results of the Company and FairPoint, both separately and
as a combined entity, to differ materially from those expressed or implied by these forward-looking statements. These risks and uncertainties include the timing and ability to complete the proposed acquisition of FairPoint by the Company, the expected benefits of the integration of the
two companies and successful integration of FairPoint’s operations with those of the Company and realization of the synergies from the integration, as well as a number of factors related to the respective businesses of the Company and FairPoint, including economic and financial market
conditions generally and economic conditions in the Company’s and FairPoint’s service areas; various risks to stockholders of not receiving dividends and risks to the Company’s ability to pursue growth opportunities if the Company continues to pay dividends according to the current
dividend policy; various risks to the price and volatility of the Company’s common stock; changes in the valuation of pension plan assets; the substantial amount of debt and the Company’s ability to repay or refinance it or incur additional debt in the future; the Company’s need for a
significant amount of cash to service and repay the debt and to pay dividends on its common stock; restrictions contained in the Company’s debt agreements that limit the discretion of management in operating the business; legal or regulatory proceedings or other matters that impact the
timing or ability to complete the acquisition as contemplated, regulatory changes, including changes to subsidies, rapid development and introduction of new technologies and intense competition in the telecommunications industry; risks associated with the Company’s possible pursuit of
acquisitions; system failures; 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; telecommunications carriers disputing and/or avoiding their obligations to pay network
access charges for use of the Company’s and FairPoint’s network; high costs of regulatory compliance; the competitive impact of legislation and regulatory changes in the telecommunications industry; liability and compliance costs regarding environmental regulations; the possibility of
disruption from the integration of the two companies making it more difficult to maintain business and operational relationships; the possibility that the acquisition is not consummated, including, but not limited to, due to the failure to satisfy the closing conditions; the possibility that the
merger or the acquisition may be more expensive to complete than anticipated, including as a result of unexpected factors or events; and diversion of management’s attention from ongoing business operations and opportunities. A detailed discussion of risks and uncertainties that could
cause actual results and events to differ materially from such forward-looking statements are discussed in more detail in the Registration Statement on Form S-4 that the Company filed with the SEC on January 26, 2017, as amended on February 24, 2017, that includes a joint proxy
statement of the Company and FairPoint and which also constitutes a prospectus of the Company and in the Company’s and FairPoint’s respective filings with the SEC, including the Annual Report on Form 10-K of the Company for the year ended December 31, 2015, which was filed
with the SEC on February 29, 2016, under the heading “Item 1A—Risk Factors,” and the Annual Report on Form 10-K of FairPoint for the year ended December 31, 2015, which was filed with the SEC on March 2, 2016, under the heading “Item 1A—Risk Factors,” and
in subsequent reports on Forms 10-Q and 8-K and other filings made with the SEC by each of the Company and FairPoint. Many of these circumstances are beyond the ability of the Company and FairPoint to control or predict. Moreover, forward-looking statements necessarily involve
assumptions on the part of the Company and FairPoint. 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 the Company and FairPoint, and their respective subsidiaries, both separately and as a combined entity to be different from
those expressed or implied in the forward- looking statements. All forward-looking statements attributable to us or persons acting on the respective behalf of the Company or FairPoint 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, each of the Company and FairPoint disclaim any intention or obligation to update or revise
publicly any forward-looking statements. You should not place undue reliance on forward-looking statements. Important Merger Information and AdditionalInformation This communication does not constitute an offer to sell or the solicitation of an offer to buy any securities or a
solicitation of any vote or approval. In connection with the proposed transaction, the Company and FairPoint have and will file relevant materials with the SEC. The Company filed a Registration Statement on Form S-4 on January 26, 2017, as amended on February 24, 2017, that
includes a joint proxy statement of the Company and FairPoint and which also constitutes a prospectus of the Company. The Company and FairPoint will mail the final definitive joint proxy statement/prospectus to their respective stockholders when it becomes available. Investors are
urged to read the joint proxy statement/prospectus regarding the proposed transaction, which contains important information, and any amendments thereto when they become available. The joint proxy statement/prospectus and other relevant documents that have been or will be filed by
the Company and FairPoint with the SEC are or will be available free of charge at the SEC’s website, www.sec.gov,or by directing a request when such a filing is made to Consolidated Communications Holdings, Inc., 121 South 17th Street, Mattoon, IL 61938, Attention: Investor
Relations or to FairPoint Communications, Inc., 521 East Morehead Street, Suite 500, Charlotte, North Carolina 28202, Attention:Secretary. TheCompany,FairPointandcertainoftheirrespectivedirectors,executiveofficersandothermembersof
managementandemployeesmaybeconsideredparticipantsinthesolicitationofproxiesinconnectionwith theproposedtransaction.InformationaboutthedirectorsandexecutiveofficersoftheCompanyisset forthinitsdefinitiveproxystatement,whichwasfiledwiththeSEConMarch28,2016.Information
aboutthedirectorsandexecutiveofficersofFairPointissetforthinitsdefinitiveproxystatement, whichwasfiledwiththeSEConMarch25,2016,andinthejointproxystatement/prospectus.These documentscanbeobtainedfreeofchargefromthesourceslistedabove.Investorsmayobtainadditional
informationregardingtheinterestsofsuchparticipantsbyreadingthejointproxystatement/prospectus, andanyamendmentstheretothattheCompanyandFairPointfilewiththeSECwhentheybecomeavailable.
in subsequent reports on Forms 10-Q and 8-K and other filings made with the SEC by each of the Company and FairPoint. Many of these circumstances are beyond the ability of the Company and FairPoint to control or predict. Moreover, forward-looking statements necessarily involve
assumptions on the part of the Company and FairPoint. 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 the Company and FairPoint, and their respective subsidiaries, both separately and as a combined entity to be different from
those expressed or implied in the forward- looking statements. All forward-looking statements attributable to us or persons acting on the respective behalf of the Company or FairPoint 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, each of the Company and FairPoint disclaim any intention or obligation to update or revise
publicly any forward-looking statements. You should not place undue reliance on forward-looking statements. Important Merger Information and AdditionalInformation This communication does not constitute an offer to sell or the solicitation of an offer to buy any securities or a
solicitation of any vote or approval. In connection with the proposed transaction, the Company and FairPoint have and will file relevant materials with the SEC. The Company filed a Registration Statement on Form S-4 on January 26, 2017, as amended on February 24, 2017, that
includes a joint proxy statement of the Company and FairPoint and which also constitutes a prospectus of the Company. The Company and FairPoint will mail the final definitive joint proxy statement/prospectus to their respective stockholders when it becomes available. Investors are
urged to read the joint proxy statement/prospectus regarding the proposed transaction, which contains important information, and any amendments thereto when they become available. The joint proxy statement/prospectus and other relevant documents that have been or will be filed by
the Company and FairPoint with the SEC are or will be available free of charge at the SEC’s website, www.sec.gov,or by directing a request when such a filing is made to Consolidated Communications Holdings, Inc., 121 South 17th Street, Mattoon, IL 61938, Attention: Investor
Relations or to FairPoint Communications, Inc., 521 East Morehead Street, Suite 500, Charlotte, North Carolina 28202, Attention:Secretary. TheCompany,FairPointandcertainoftheirrespectivedirectors,executiveofficersandothermembersof
managementandemployeesmaybeconsideredparticipantsinthesolicitationofproxiesinconnectionwith theproposedtransaction.InformationaboutthedirectorsandexecutiveofficersoftheCompanyisset forthinitsdefinitiveproxystatement,whichwasfiledwiththeSEConMarch28,2016.Information
aboutthedirectorsandexecutiveofficersofFairPointissetforthinitsdefinitiveproxystatement, whichwasfiledwiththeSEConMarch25,2016,andinthejointproxystatement/prospectus.These documentscanbeobtainedfreeofchargefromthesourceslistedabove.Investorsmayobtainadditional
informationregardingtheinterestsofsuchparticipantsbyreadingthejointproxystatement/prospectus, andanyamendmentstheretothattheCompanyandFairPointfilewiththeSECwhentheybecomeavailable.