Sinch: Initiate Microsoft Teams Phone Calls with Direct Routing

CONSOLIDATED COMMUNICATIONS HOLDINGS, INC. MANAGEMENT REPORT AND ANALYSIS OF FINANCIAL POSITION AND OPERATING RESULTS. (Form 10-Q)

The Securities and Alternate Fee ("SEC") encourages corporations to reveal
forward-looking info in order that buyers can higher perceive an organization's
future prospects and make knowledgeable funding selections.  Sure statements in
this Quarterly Report on Type 10-Q, together with these which relate to the affect
on future income sources, pending and future regulatory orders, continued
enlargement of the telecommunications community and anticipated adjustments within the sources
of our income and value construction ensuing from our entrance into new
communications markets, are forward-looking statements and are made pursuant to
the protected harbor provisions of the Securities Litigation Reform Act of 1995.
 These forward-looking statements mirror, amongst different issues, our present
expectations, plans, methods and anticipated monetary outcomes.  There are a
variety of dangers, uncertainties and situations which will trigger our precise outcomes
to vary materially from these expressed or implied by these forward-looking
statements together with the affect of the continued novel coronavirus ("COVID-19")
pandemic and our response to it.  Many of those circumstances are past our
means to regulate or predict.  Furthermore, forward-looking statements essentially
contain assumptions on our half.  These forward-looking statements usually are
recognized by the phrases "consider," "anticipate," "anticipate," "estimate,"
"challenge," "intend," "plan," "ought to," "might," "will," "would," "will likely be," "will
proceed" or related expressions.  Such forward-looking statements contain identified
and unknown dangers, uncertainties and different elements which will trigger precise
outcomes, efficiency or achievements of Consolidated Communications
Holdings, Inc. and its subsidiaries ("Consolidated," the "Firm," "we" or
"our") to be totally different from these expressed or implied within the forward-looking
statements.  All forward-looking statements attributable to us or individuals performing
on our behalf are expressly certified of their entirety by the cautionary
statements that seem all through this report.  An in depth dialogue of those
and different dangers and uncertainties that would trigger precise outcomes and occasions to
differ materially from such forward-looking statements is included in our 2021
Annual Report on Type 10-Okay filed with the SEC and in Merchandise 1A - "Threat Components" of
this report.  Moreover, undue reliance shouldn't be positioned on
forward-looking statements, which communicate solely as of the date they're made.
 Besides as required underneath federal securities legal guidelines or the principles and laws
of the SEC, we disclaim any intention or obligation to replace or revise publicly
any forward-looking statements. Administration's Dialogue and Evaluation ("MD&A")
must be learn along with our unaudited condensed consolidated
monetary statements and accompanying notes to the monetary statements
("Notes") as of and for the quarter and 9 months ended September 30, 2022
included in Merchandise 1 of Half I of this Quarterly Report on Type 10-Q.

All through this MD&A, we consult with sure measures that aren't measures of
monetary efficiency in accordance with accounting rules usually
accepted in the USA ("US GAAP" or "GAAP").  We consider using
these non-GAAP measures on a consolidated foundation gives the reader with
extra info that's helpful in understanding our working outcomes and
developments. These measures must be seen along with, slightly than as a
substitute for, these measures ready in accordance with GAAP. See the
"Non-GAAP Measures" part under for a extra detailed dialogue on the use and
calculation of those measures.

Perception

Consolidated is a broadband and enterprise communications supplier providing a large
vary of communication options to shopper, industrial and service clients
throughout a 22-state service space.  We function a sophisticated fiber community spanning
roughly 57,500 fiber route miles throughout many rural areas and metro
communities.  We provide residential high-speed Web, video, telephone and residential
safety companies in addition to multi-service residential and small enterprise
bundles. Our enterprise product suite contains: information and Web options,
voice, information middle companies, safety companies, managed and IT companies, and an
expanded suite of cloud companies.  We offer wholesale options to wi-fi
and wireline carriers and different service suppliers together with information, voice, community
connections and customized fiber builds and final mile connections.



We generate the vast majority of our consolidated working revenues primarily from
month-to-month subscriptions to our broadband, information and transport companies
(collectively "broadband companies") marketed to residential and enterprise
clients. As shopper calls for for bandwidth proceed to extend, our focus is
on increasing our fiber broadband companies and upgrading information speeds with the intention to
supply a extremely aggressive fiber product. Our funding in additional aggressive
broadband speeds is important to our long-term success.  Our strategic funding
with Searchlight Capital Companions L.P. ("Searchlight") mixed with the
refinancing of our capital construction in 2020 has supplied us with extra
capital that has enabled us

                                       25

  Desk of Contents

to speed up our fiber enlargement plans and supplied important advantages to our
shopper, industrial and service clients. With this strategic funding, we
are enhancing our fiber infrastructure and accelerating our investments in
high-growth and aggressive areas.  By leveraging our current dense core fiber
community and an accelerated construct plan, we anticipate to have the ability to considerably
improve information speeds, develop our multi-Gig protection and strategically prolong our
community throughout our sturdy current industrial and service footprint to draw
extra on-net and near-net alternatives.  As a part of our fiber enlargement plan, we
plan to improve roughly 1.6 million passings to fiber over 5 years
throughout choose service areas to allow multi-Gig succesful companies to those properties
and small companies together with greater than 1 million passings inside our northern
New England service areas.

Our fiber construct plan contains the improve of 400,000 properties and small companies
in 2022. In the course of the quarter and 9 months ended September 30, 2022, we
upgraded roughly 116,200 and 342,200 passings, respectively, and added
roughly 12,100 and 29,400 shopper fiber Gig-capable subscribers,
respectively. In the course of the 12 months ended December 31, 2021, we upgraded roughly
330,000 passings. In our northern New England service areas, roughly 31%
of the properties we serve had been 1 Gig succesful as of September 30, 2022 in comparison with
12% throughout the identical interval in 2021. As of September 30, 2022, roughly 41%
of the properties we serve in all different markets had availability to broadband speeds
of as much as 1 Gbps in comparison with 27% throughout the identical interval in 2021.

Fidium Fiber, our new Gigabit shopper fiber web product with an all-new
buyer expertise, launched in November 2021 in choose northern New England
markets, reinforcing our broadband-first technique. In Might 2022, Fidium Fiber was
expanded to extra markets in California, Illinois, Minnesota, Pennsylvania
and Texas. In June 2022, we launched symmetrical 2 Gig speeds throughout the complete
Fidium fiber community.  Our Fidium plans supply symmetrical speeds from 50 Mbps to
2 Gbps with no information caps.

As we proceed to extend broadband speeds, we consider that we'll even be
in a position to concurrently develop the array of companies and content material choices that
our community gives.  We proceed to give attention to increasing our industrial and
service product choices together with broadband and our industrial product suite,
and are frequently enhancing our industrial product choices to fulfill the wants
of our enterprise clients.  By leveraging our superior fiber community, we will
tailor our companies for enterprise clients by creating options to suit their
particular wants.  Moreover, we're repeatedly enhancing our suite of
managed and cloud companies by including new performance and help, which
will increase effectivity and permits larger scalability and reliability for
companies. We anticipate future momentum in industrial and service companies as
these merchandise acquire traction in addition to from the demand from clients for
extra bandwidth and data-based companies.

Nonetheless, working revenues proceed to be impacted by the industry-wide development
of declines in voice companies, entry strains and associated community entry
income. Many purchasers are selecting to subscribe to various communication
companies, and competitors for these subscribers continues to extend. Whole
voice connections decreased 10% as of September 30, 2022 in comparison with 2021. We
have been in a position to mitigate a few of the entry line losses by various
product choices, resembling our VoIP service.

Our aggressive broadband speeds allow us to fulfill shopper demand for increased
bandwidth for streaming programming or on-demand content material on any machine.  The
shoppers demand for streaming companies, both to reinforce their present video
subscription plan or to thoroughly substitute their linear video subscription might
affect our future video subscriber base and, accordingly, scale back our video
income in addition to our video programing prices.  Whole video connections
decreased 23% as of September 30, 2022 in comparison with 2021 as we proceed to
de-emphasize our linear video companies and transition clients to streaming and
over-the-top video companies. We consider the development in altering shopper viewing
habits will proceed to affect our enterprise outcomes and complement our technique
of offering shoppers with increased broadband speeds to facilitate streaming
content material together with companies supplied by our streaming partnerships.



Our working revenues are impacted by legislative or regulatory adjustments on the
federal and state ranges, which may scale back or eradicate the present subsidies
income we obtain. A lot of proceedings and up to date orders relate to
common service reform, inter-carrier compensation ("ICC") and community entry
prices. Current orders adopted in 2020 resulted in a discount within the federal
subsidies we obtain of roughly $42.2 million yearly as of January 1,
2022.  See the "Regulatory Issues" part under for an extra dialogue
of
the subsidies we obtain.

                                       26

  Desk of Contents

Current Developments

Discontinued Operations – Sale of an Funding in Wi-fi Partnerships

On September 13, 2022, we accomplished the sale of our 5 restricted wi-fi
partnership pursuits to Cellco Partnership ("Cellco") for an combination buy
worth of $490.0 million. Cellco is the overall accomplice for every of the 5
wi-fi partnerships and is an oblique, wholly-owned subsidiary of Verizon
Communications, Inc. Our wi-fi partnership funding consisted of possession
in 5 wi-fi partnerships: 2.34% of GTE Mobilnet of South Texas Restricted
Partnership, 20.51% of GTE Mobilnet of Texas RSA #17 Restricted Partnership, 3.60%
of Pittsburgh SMSA Restricted Partnership, 16.67% of Pennsylvania RSA
No. 6(I) Restricted Partnership and 23.67% of Pennsylvania RSA No. 6(II) Restricted
Partnership.  We intend to make use of the proceeds from the sale to help our fiber
enlargement plan. The monetary outcomes of the restricted partnership pursuits have
been reported as discontinued operations in our condensed consolidated monetary
statements for all durations introduced. Within the assertion of money flows, we now have
elected to mix money flows from discontinued operations with money flows from
persevering with operations. In reference to the sale of the partnership pursuits,
we acknowledged a pre-tax acquire on sale of $389.9 million through the quarter and
9 months ended September 30, 2022. For the quarters ended September 30, 2022
and 2021, we acknowledged funding revenue of $4.7 million and $11.0 million,
respectively, and acquired money distributions of $5.5 million and $11.1 million,
respectively, from these wi-fi partnerships. For the 9 months ended
September 30, 2022 and 2021, we acknowledged funding revenue of $22.6 million
and $31.8 million, respectively, and acquired money distributions of $25.0
million and $33.2 million, respectively, from these wi-fi partnerships.

Disposals

On September 22, 2021, we entered right into a definitive settlement to promote
considerably all the property of our non-core, rural ILEC enterprise positioned in
Ohio, Consolidated Communications of Ohio Firm ("CCOC"). CCOC gives
telecommunications and information companies to residential and enterprise clients in 11
rural communities in Ohio and surrounding areas and included roughly 3,800
entry strains, 3,900 information connections and 1,400 video connections. The sale was
accomplished on January 31, 2022 for roughly $26.0 million in money, topic
to a customary working capital adjustment. As of December 31, 2021, the property
and liabilities to be disposed of had been labeled as held on the market within the
condensed consolidated steadiness sheet and consisted primarily of allotted
goodwill of $16.3 million and property, plant and tools of $9.5 million. In
reference to the classification as property held on the market, we acknowledged an
impairment lack of $5.7 million through the quarter ended September 30, 2021.
In the course of the 9 months ended September 30, 2022, we acknowledged a further
loss on the sale of $0.5 million, which is included in promoting, normal and
administrative expense within the condensed consolidated assertion of operations. We
intend to make use of the proceeds from the asset sale to additional our fiber enlargement
plans.

On March 2, 2022, we entered right into a definitive settlement to promote considerably
all of the property of our enterprise positioned within the Kansas Metropolis market (the "Kansas
Metropolis operations") for estimated money consideration of roughly $90.0
million, topic to sure working capital and different buy worth
changes. The Kansas Metropolis operations present information, voice and video companies
to clients inside the Kansas Metropolis metropolitan space and surrounding counties
and contains roughly 17,500 shopper clients and 1,700 industrial
clients. The transaction is predicted to shut by the tip of 2022 and is
topic to the receipt of all customary regulatory approvals and the
satisfaction of different closing situations.  At September 30, 2022, the property and
liabilities to be disposed of had been labeled as held on the market within the condensed
consolidated steadiness sheet and consisted primarily of allotted goodwill of
$83.7 million and property, plant and tools of $135.9 million. In connection
with the anticipated sale, the carrying worth of the web property to be bought was
decreased to their estimated honest worth and we acknowledged an impairment lack of
$126.5 million through the quarter ended March 31, 2022. In the course of the quarter ended
September 30, 2022, we acknowledged a further impairment lack of $5.2 million
on account of a rise in internet property held on the market and estimated promoting
prices through the interval. The asset gross sales align with our strategic asset evaluate
and give attention to our core broadband areas.

                                       27

  Desk of Contents

Searchlight Funding

On September 13, 2020, we entered into an funding settlement (the "Funding
Settlement") with an affiliate of Searchlight.  In reference to the Funding
Settlement, associates of Searchlight have invested an combination of $425.0
million within the Firm.  The funding dedication was structured in two phases.
 Within the first stage of the transaction, which was accomplished on October 2, 2020,
Searchlight invested $350.0 million within the Firm in alternate for six,352,842
shares, or roughly 8%, of the Firm's widespread inventory and a contingent
cost proper ("CPR") that was convertible, upon the receipt of sure
regulatory and shareholder approvals, into a further 17,870,012 shares, or
16.9%, of the Firm's widespread inventory.  As well as, Searchlight acquired the
proper to an unsecured subordinated be aware with an combination principal quantity of
roughly $395.5 million (the "Be aware"), which, on the time of issuance, was
convertible into shares of a brand new collection of perpetual most well-liked inventory of the
Firm with an combination liquidation desire equal to the principal quantity
of the Be aware plus accrued curiosity as of the date of conversion.

On July 15, 2021, the Firm acquired all required state public utility
fee regulatory approvals essential for the conversion of the CPR into
16.9% extra shares of the Firm's widespread inventory. Consequently, the CPR was
transformed into 17,870,012 shares of widespread inventory, which had been issued to
Searchlight on July 16, 2021.

Within the second stage of the Funding, which was accomplished on December 7, 2021
following the receipt of Federal Communications Fee ("FCC") and sure
regulatory approvals and the satisfaction of sure different customary closing
situations, Searchlight invested a further $75.0 million and was issued the
Be aware. The Be aware bore curiosity at 9.0% every year from the date of the closing of
the primary stage of the transaction and was payable semi-annually in arrears. The
Be aware included a paid-in-kind ("PIK") possibility for a five-year interval starting as
of October 2, 2020. In the course of the 12 months ended December 31, 2021, the Firm elected
the PIK possibility and accrued curiosity of $38.8 million was added to the principal
steadiness of the Be aware.  On December 7, 2021, Searchlight elected to transform the
Be aware into 434,266 shares of Sequence A Perpetual Most popular Inventory, par worth $0.01
per share (the "Sequence A Most popular Inventory"). As well as, on December 7, 2021,
the CPR transformed into a further 15,115,899 shares, or a further 10.1%,
of the Firm's widespread inventory.  As of September 30, 2022 and December 31, 2021,
shares of widespread inventory issued to Searchlight symbolize roughly 34% and
35%, respectively, of the Firm's excellent widespread inventory. The strategic
funding with Searchlight gives us a valued accomplice with important
expertise in deploying broadband infrastructure as we proceed to execute our
fiber-focused technique and develop broadband companies.

                                       28

  Desk of Contents

Outcomes of Operations
The next tables mirror our monetary outcomes on a consolidated foundation and
key working metrics as of and for the quarters and 9 months ended September
30, 2022 and 2021.

                                 Monetary Knowledge

                                                Quarter Ended September 30,                     9 Months Ended September 30,
                                                                    $          %                                       $          %
(In hundreds of thousands, apart from percentages)      2022        2021       Change     Change        2022         2021        Change      Change
Working Revenues
Client:
Broadband (Knowledge and VoIP)                $   69.6    $   68.6    $    1.0         1 %    $   203.1    $   202.4    $     0.7         0 %
Voice companies                               36.4        40.6       (4.2)      (10)          110.5        121.2       (10.7)       (9)
Video companies                               13.6        16.1       (2.5)      (16)           42.3         49.7        (7.4)      (15)
                                            119.6       125.3       (5.7)   

(5) 355.9 373.3 (17.4) (5) Industrial: information companies (together with VoIP)

                56.8        57.5       (0.7)       (1)          171.8        171.4          0.4         0
Voice companies                               35.5        38.4       (2.9)       (8)          107.6        117.3        (9.7)       (8)
Different                                         9.9        10.2       (0.3)       (3)           32.8         28.6          4.2        15
                                            102.2       106.1       (3.9)       (4)          312.2        317.3        (5.1)       (2)
Provider:
Knowledge and transport companies                  33.9        33.6         0.3         1          103.7        100.8          2.9         3
Voice companies                                3.5         4.2       (0.7)      (17)           11.0         13.1        (2.1)      (16)
Different                                         0.6         0.4         0.2        50            1.4          1.2          0.2        17
                                             38.0        38.2       (0.2)       (1)          116.1        115.1          1.0         1

Subsidies                                     7.2        17.3      (10.1)      (58)           20.3         52.1       (31.8)      (61)
Community entry                               27.3        29.9       (2.6)       (9)           78.4         92.6       (14.2)      (15)
Different services and products                   2.3         1.8         0.5        28           12.4         13.4        (1.0)       (7)
Whole working revenues                    296.6       318.6      (22.0)       (7)          895.3        963.8       (68.5)       (7)

Working Bills
Price of companies and merchandise
(unique of depreciation and
amortization)                               141.2       142.5       (1.3)  

(1) 413.0 431.8 (18.8) (4) Promoting, normal and administrative bills

                                        72.8        64.1         8.7   

14,221.6 200.0 21.6 11 Impairment loss on property held on the market

                                          5.2         5.7       (0.5)   

(9) 131.7 5.7 126.0 2,211 Capital acquire on disposal of property

                 (19.2)           -      (19.2)     (100)         (19.2)            -       (19.2)     (100)
Depreciation and amortization                75.7        73.8         1.9  

3,220.6 225.5 (4.9) (2) Whole working bills

                    275.7       286.1      (10.4)   

(4) 967.7 863.0 104.7 12 Working revenue

                20.9        32.5      (11.6)   

(36) (72.4) 100.8 (173.2) (172) Internet curiosity expense

                      (32.0)      (43.2)      (11.2)   

(26) (91.7) (137.0) (45.3) (33) Loss on extinguishment of debt

                  -           -           -         -              -       (17.1)         17.1       100
Change in honest worth of contingent
cost rights                                  -       (2.2)         2.2       100              -       (99.6)         99.6       100
Different revenue, internet                             3.0         2.4         0.6        25            9.4          4.5          4.9       109
Revenue tax expense (profit)                (1.0)         2.6       (3.6)  

(138) (17.8) (1.9) (15.9) (837) Loss from persevering with operations

             (7.1)      (13.1)         6.0   

46 (136.9) (146.5) 9.6 7 Revenue from discontinued operations, internet of tax

                                  299.9         8.6       291.3   

3,387 312.5 24.8 287.7 1,160 Dividends on Sequence A Most popular Shares 10.4

           -        10.4       100           29.8            -         29.8       100
Internet revenue attributable to
noncontrolling curiosity                       0.1         0.2       (0.1)      (50)            0.4          0.5        (0.1)      (20)
Internet revenue (loss) attributable to
widespread shareholders                      $  282.3    $  (4.7)    $  287.0     6,106      $   145.4    $ (122.2)    $   267.6       219

Adjusted EBITDA (1)                      $   97.2    $  127.4    $ (30.2)      (24) %    $   311.9    $   380.7    $  (68.8)      (18) %


                                       29

  Desk of Contents

(1) A non-GAAP measure.  See the "Non-GAAP Measures" part under for added
    info and reconciliation to probably the most immediately comparable GAAP measure.


                            Key Working Statistics

                                         As of September 30,
                               2022       2021       Change     % Change
Client clients            505,302    527,327    (22,025)         (4) %

Fiber Gig+ succesful            115,598     81,539      34,059          42
DSL/Copper                    266,314    309,122    (42,808)        (14)
Client information connections     381,912    390,661     (8,749)         (2)

Client voice connections    294,441    341,135    (46,694)        (14)
Video connections              51,339     66,971    (15,632)        (23)


Working Revenues

Client

Broadband Companies

Broadband companies embody revenues from residential clients for subscriptions
to our VoIP and information merchandise.  We provide high-speed Web entry at speeds of
as much as 2 Gbps, relying on the community amenities which might be accessible, the extent
of service chosen and the placement.  Our VoIP digital telephone service can be
accessible in sure markets as an alternative choice to the normal phone
line.

Broadband companies revenues elevated $1.0 million and $0.7 million through the
quarter and 9 months ended September 30, 2022, respectively, in comparison with the
similar durations in 2021. Excluding the sale of COCC, broadband companies revenues
elevated $1.7 million and $2.5 million through the quarter and 9 months ended
September 30, 2022, respectively, regardless of a lower in information connections of two%,
primarily on account of worth will increase in addition to progress in fiber Web
companies.

Voice Companies

We provide a number of totally different primary native telephone service packages and long-distance
calling plans, together with limitless flat-rate calling plans. The plans embody
choices for voicemail and different customized calling options resembling caller ID, name
forwarding and name ready. Voice companies revenues decreased $4.2 million and
$10.7 million through the quarter and 9 months ended September 30, 2022,
respectively, in comparison with the identical durations in 2021 primarily resulting from a 16%
decline in entry strains.  The variety of native entry strains in service immediately
impacts the recurring revenues we generate from finish customers and continues to be
impacted by the industry-wide decline in entry strains. We anticipate to proceed to
expertise erosion in voice connections resulting from competitors from various
applied sciences.

                                       30

  Desk of Contents

Video Companies
Relying on geographic market availability, our video companies vary from
restricted primary service to superior digital tv, which incorporates a number of
plans, every with tons of of native, nationwide and music channels together with
premium and Pay-Per-View channels in addition to video On-Demand service.  Sure
clients may additionally subscribe to our superior video companies, which include
high-definition tv, digital video recorders ("DVR") and/or a complete dwelling
DVR.  Our video subscribers can even watch their favourite reveals, motion pictures and
livestreams on any machine.  As well as, we provide different in-demand streaming TV
companies, which give limitless leisure choices.

Video companies revenues decreased $2.5 million and $7.4 million through the
quarter and 9 months ended September 30, 2022, respectively, in comparison with the
similar durations in 2021 primarily resulting from a 26% lower in connections as shoppers
are selecting to subscribe to various video companies resembling over-the-top
streaming or different aggressive companies. We anticipate to proceed to expertise a
decline in video connections as we de-emphasize our linear video subscriptions
and transition clients to streaming companies, which can amplify the demand for
increased broadband speeds to facilitate streaming content material.

Industrial

Knowledge Companies

We offer quite a lot of enterprise communication companies to enterprise clients of
all sizes, together with voice and information companies over our superior fiber
community. The companies we provide embody scalable high-speed broadband Web
entry and VoIP telephone companies, which vary from primary service plans to digital
hosted techniques.  Along with Web and VoIP companies, we additionally supply a
number of industrial information connectivity companies in choose markets together with
Ethernet companies; non-public line information companies; software program outlined huge space
community ("SD-WAN") and multi-protocol label switching. Our networking companies
embody point-to-point and multi-point deployments from 2.5 Mbps to 10 Gbps to
accommodate the expansion patterns of our enterprise clients. We provide a set of
cloud-based companies, which features a hosted unified communications resolution
that replaces the shopper's on-site telephone techniques and information networks, managed
community safety companies and information safety companies.  Knowledge middle and
catastrophe restoration options present a dependable and native colocation possibility for
industrial clients.

Knowledge companies revenues decreased $0.7 million and elevated $0.4 million throughout
the quarter and 9 months ended September 30, 2022, respectively, in comparison with
the identical durations in 2021 as declines in Metro Ethernet resulting from buyer churn
through the quarter had been decreased partially by the continued progress in devoted
Web entry, VoIP and SD-WAN companies.

Voice companies

Voice companies embody primary native telephone and long-distance service packages for
enterprise clients. The plans embody choices for voicemail, convention calling,
linking a number of workplace areas and different customized calling options resembling
caller ID, name forwarding, pace dialing and name ready.  Companies will be
charged at a hard and fast month-to-month price, a measured price or will be bundled with chosen
companies at a reduced price.  Voice companies revenues decreased $2.9 million
and $9.7 million through the quarter and 9 months ended September 30, 2022,
respectively, in comparison with the identical durations in 2021 primarily resulting from a ten%
decline in entry strains as industrial clients are more and more selecting
various applied sciences and the broad vary of options that Web based mostly
voice companies can supply.

Different

Different companies embody enterprise tools gross sales and associated {hardware} and
upkeep help, video companies and different miscellaneous revenues, together with
911 service revenues.  Different companies revenues decreased $0.3 million through the
quarter ended September 30, 2022 in comparison with the identical interval in 2021 primarily
resulting from a discount in structured cabling tasks, however was offset partially by an
improve in customized building revenues. Different companies revenues elevated $4.2
million through the 9 months ended September 30, 2022 in comparison with the identical
interval in 2021 primarily resulting from a rise in enterprise techniques and customized
building revenues.

                                       31

  Desk of Contents

Provider

Knowledge and Transport Companies

We offer high-speed fiber information transmission companies to regional and nationwide
interexchange and wi-fi carriers together with Ethernet, mobile backhaul, darkish
fiber and colocation companies.  Knowledge companies revenues elevated $0.3 million
and $2.9 million through the quarter and 9 months ended September 30, 2022,
respectively, in comparison with the identical durations in 2021 primarily resulting from a rise
in darkish fiber income on account of a brand new IRU settlement entered into through the
9 months ended September 30, 2022. Nonetheless, continued progress in Ethernet
companies was offset partially by a decline in mobile backhaul on account of
worth compression and a discount in pricing of current contract renewals with
our wi-fi backhaul companions. We anticipate to acknowledge additional declines in
mobile backhaul income on account of the delayed timing of recent pricing in
2022 and ongoing contract renewals.

Voice companies

We offer primary native telephone service packages with custom-made options for
resell by wholesale clients. The plans embody choices for voicemail,
convention calling, linking a number of workplace areas and different customized calling
options.  Voice companies revenues decreased $0.7 million and $2.1 million
through the quarter and 9 months ended September 30, 2022, respectively,
in comparison with the identical durations in 2021 as clients proceed to decide on various
know-how options.

Different

Income from different companies contains income from conduits and different asset rental income in addition to different miscellaneous income. Income from different companies elevated $0.2 million
throughout every of the quarter and nine-month durations ended September 30, 2022
in comparison with the identical durations in 2021 resulting from a rise in conduit rental income.

Subsidies

Subsidies include each federal and state subsidies, that are designed to
promote extensively accessible, high quality broadband companies at reasonably priced costs with
increased information speeds in rural areas.  Subsidies revenues decreased $10.1 million
and $31.8 million through the quarter and 9 months ended September 30, 2022,
respectively, in comparison with the identical durations in 2021 primarily resulting from a discount
in federal subsidies help.  In 2020, the FCC adopted an order establishing
the Rural Digital Alternative Fund ("RDOF"), which resulted in a discount in
our annual help of roughly $42.2 million as of January 1, 2022.  See
the "Regulatory Issues" part under for an extra dialogue of the subsidies
we obtain.

Community Entry Companies
Community entry companies embody interstate and intrastate switched entry,
community particular entry and finish consumer entry. Switched entry revenues embody
entry companies to different communications carriers to terminate or originate
long-distance calls on our community. Particular entry circuits present devoted
strains and trunks to enterprise clients and interexchange carriers.  Community
entry companies revenues decreased $2.6 million and $14.2 million through the
quarter and 9 months ended September 30, 2022, respectively, in comparison with the
similar durations in 2021 primarily as a result of persevering with decline in interstate
charges, minutes of use, voice connections and service circuits as carriers
transition to Ethernet based mostly transport options. As well as, for the 9
months ended September 30, 2022, finish consumer entry income decreased resulting from a
discount within the Federal Common Service Fund Contribution Issue throughout
the
first half of 2022.

Different Merchandise and Companies

Different services and products embody revenues from phone listing
publishing, video promoting, billing and help companies and different
miscellaneous revenues. We've got entered into quite a few Public Personal Partnership
agreements with a number of cities in New Hampshire to construct new fiber to the premise
("FTTP") Web networks.  The brand new city networks present broadband speeds of
as much as 1 Gbps to residential and industrial clients. Public Personal
Partnerships are a key element of Consolidated's dedication to develop rural
broadband entry.

                                       32

  Desk of Contents

Different services and products revenues elevated $0.5 million and decreased $1.0
million through the quarter and 9 months ended September 30, 2022,
respectively, in comparison with the identical durations in 2021 primarily as a result of
recognition of Public Personal Partnership building tasks throughout 2022
and
2021.

Working Bills

Price of companies and merchandise

Price of companies and merchandise decreased $1.3 million and $18.8 million throughout
the quarter and 9 months ended September 30, 2022, respectively, in comparison with
the identical durations in 2021. Video programming prices decreased on account of a 23%
decline in video connections, which had been offset partially by a rise in
utility and gas prices within the present 12 months durations. As well as, for the 9
months ended September 30, 2022, required contributions to the Federal Common
Service Fund ("USF") decreased $6.7 million on account of a discount within the
annual funding price for the primary half of the 12 months. Entry expense additionally
decreased on account of entry prices of $3.4 million incurred through the 9
months ended September 30, 2021 associated to the early termination of a contract
obligation for fastened wi-fi companies.

Promoting, normal and administrative bills

Promoting, normal and administrative prices elevated $8.7 million and $21.6
million through the quarter and 9 months ended September 30, 2022,
respectively, in comparison with the identical durations in 2021. Promoting expense
elevated resulting from larger promotional actions surrounding the continued
advertising and marketing of our new fiber broadband merchandise. Property and actual property taxes
elevated primarily resulting from refunds and settlements acquired in 2021. Worker
labor prices additionally elevated from the prior 12 months durations.

Acquire on sale of property

In the course of the quarter and 9 months ended September 30, 2022, we accomplished the
sale of sure non-strategic communication towers for money proceeds of $19.4
million and acknowledged a pre-tax acquire on the sale of $19.2 million.

Depreciation and amortization

Depreciation and amortization expense elevated $1.9 million and decreased $4.9
million through the quarter and 9 months ended September 30, 2022,
respectively, in comparison with the identical durations in 2021 primarily resulting from a decline in
amortization expense for buyer relationships, that are amortized underneath the
accelerated methodology. Depreciation expense additionally declined as a result of sale of the
Ohio property and the classification of the Kansas Metropolis property as held on the market in
the primary quarter of 2022. These declines in depreciation and amortization
expense had been offset by ongoing capital expenditures associated to the fiber community
enlargement and customer support enhancements in addition to success-based capital
tasks for shopper and industrial companies.

Reclassifications

Sure quantities in our 2021 condensed consolidated monetary statements have
been reclassified to evolve to the 2022 presentation, primarily associated to the
presentation of the monetary outcomes for our wi-fi partnership pursuits as
discontinued operations. Sure working revenues have additionally been reclassified
to report industrial and service revenues individually. The change within the
classification of those revenues had no affect to whole working revenues
as
beforehand reported.

Regulatory Issues

Our revenues are topic to broad federal and/or state laws, which
embody such telecommunications companies as native phone service, community
entry service and toll service.  The telecommunications {industry} is topic to
intensive federal, state and native regulation. Underneath the Telecommunications Act
of 1996, federal and state regulators share accountability for implementing and
imposing statutes and laws designed to encourage competitors and to
protect and advance extensively accessible, high quality phone service at reasonably priced
costs.

                                       33

  Desk of Contents

On the federal degree, the FCC usually workout routines jurisdiction over amenities
and companies of native alternate carriers, resembling our rural phone corporations,
to the extent they're used to offer, originate or terminate interstate or
worldwide communications. The FCC has the authority to situation, modify,
cancel, terminate or revoke our working authority for failure to adjust to
relevant federal legal guidelines or FCC guidelines, laws and insurance policies. Fines or
penalties additionally could also be imposed for any of those violations.

State regulatory commissions usually train jurisdiction over carriers'
amenities and companies to the extent they're used to offer, originate or
terminate intrastate communications. Specifically, state regulatory businesses
have substantial oversight over interconnection and community entry by
opponents of our rural phone corporations. As well as, municipalities and
different native authorities businesses regulate the general public rights-of-way essential to
set up and function networks. State regulators can sanction our rural phone
corporations or revoke our certifications if we violate related legal guidelines or
laws.

FCC Questions

Generally, telecommunications service in rural areas is costlier to offer
than service in city areas. The decrease buyer density signifies that switching and
different amenities serve fewer clients and loops are sometimes longer, requiring
larger expenditures per buyer to construct and keep. By supporting the
high-cost of operations in rural markets, USF subsidies promote extensively
accessible, high quality phone service at reasonably priced costs in rural areas.

Our annual help by the FCC's Join America Fund ("CAF") Section II
funding was $48.1 million by 2021.  The precise obligations related
with CAF Section II funding included the duty to serve roughly 124,500
areas by December 31, 2020 (with interim milestones of 40%, 60% and 80%
completion by December 2017, 2018 and 2019, respectively); to offer broadband
service with speeds of 10 Mbps downstream and 1 Mbps upstream; to realize
latency of lower than 100 milliseconds; to offer information of no less than 100 gigabytes
monthly; and to supply pricing fairly corresponding to pricing in city
areas. The Firm met the buildout milestones and efficiency metrics
necessities for 2017 by 2020 for all states the place it acquired funding.

In April 2019, the FCC introduced plans for the RDOF, the following part of the CAF
program. The RDOF is a $20.4 billion fund to carry speeds of 25 Mbps downstream
and three Mbps upstream to unserved and underserved areas of America. The FCC issued
a Discover of Proposed Rulemaking at their August 2019 Open Fee Assembly.
The order prioritizes terrestrial broadband as a bridge to rural 5G networks by
offering a major weight benefit to conventional broadband suppliers.
Funding will happen in two phases with the primary part auctioning $16.0 billion
and the second part auctioning $4.4 billion, every to be distributed over
10 years. The minimal pace required to obtain funding is 25 Mbps downstream
and three Mbps upstream. CAF Section II funding was prolonged by December 31, 2021
for worth cap holding corporations. The FCC issued the ultimate census block teams
with areas and reserve worth. We filed the RDOF brief kind utility on
July 14, 2020 and had been listed as a certified bidder by the FCC on October 13,
2020 and took part within the public sale. The public sale started on October 29, 2020 and
ended on November 24, 2020. Consolidated gained 246 census block teams serving in
seven states. The bids we gained are on the 1 Gbps downstream and 500 Mbps upstream
pace tier to roughly 27,000 areas at an annual funding degree of
$5.9 million, which resulted in a discount of roughly $42.2 million in
annual help as of January 1, 2022 by December 31, 2031. Consolidated
filed its lengthy kind utility with supporting paperwork on January 29, 2021
and acquired ultimate FCC approval on December 14, 2021. Consolidated started
receiving RDOF funding in January 2022.

The annual FCC worth cap submitting was made on June 16, 2022 and have become efficient
on July 1, 2022.  The online affect is a rise of roughly $2.0 million in
community entry and CAF ICC help funding for the July 2022 by June 2023
tariff interval.

                                       34

  Desk of Contents

State Issues

Texas

The Texas Common Service Fund ("TUSF") is run by the Nationwide
Alternate Provider Affiliation ("NECA").  The Texas Public Utilities Regulatory
Act directs the Public Utilities Fee of Texas ("PUCT") to undertake and
implement guidelines requiring native alternate carriers to contribute to a state
common service fund that helps telecommunications suppliers supply primary native
telecommunications service at cheap charges in high-cost rural areas.  The
TUSF can be used to reimburse telecommunications suppliers for revenues misplaced by
offering lifeline service.  Our Texas rural phone corporations obtain
disbursements from this fund.

Our Texas incumbent native alternate carriers (“ILECs”) have traditionally acquired help from two state funds, the Small and Rural Incumbent Native Alternate Provider Plan Excessive Price Funds (“HCF”) and the Excessive Price Reduction Fund (“HCAF”).

 In December 2020, the PUCT introduced a TUSF funding shortfall and could be
lowering all funded carriers help by 64% starting January 15, 2021. The
potential affect of the choice by the PUCT was a discount in help we
obtain of roughly $4.0 million yearly.  The Texas Phone Affiliation
("TTA"), which Consolidated is a member, and the Texas Statewide Phone
Cooperative, Inc. ("TSTCI"), filed a lawsuit searching for to overturn the PUCT
resolution in addition to a short lived injunction on the funding discount.  On June 7,
2021, the courtroom dominated in favor of the PUCT.  The TTA and TSTCI filed a discover to
attraction on July 2, 2021.  We filed our temporary on September 18, 2021, together with a
Movement to Expedite.  The movement to expedite was granted.  On June 30, 2022, the
Third Courtroom of Appeals in Austin dominated in favor of the agricultural telephone corporations
requiring the state to extend the state surcharge to completely fund the TUSF and
reimburse rural telephone corporations for the shortfall.  The state had 45 days from
the ruling date to resolve whether or not to attraction the choice. The state didn't
attraction the ruling and in October 2022, the TTA, TSTCI and PUCT reached an
settlement on how the excellent funding could be repaid. Month-to-month help
funds will resume in full in October 2022 and the funding shortfall for the
durations from January 2021 by September 2022 will likely be reimbursed to carriers
evenly over a 15-month interval.  All reimbursements are anticipated to be accomplished
by December 2023.

Funding the US Bailout Act

President Biden signed the American Rescue Plan Act of 2021 ("ARPA") on March
11, 2021.  States have been allotted federal funds to be utilized for capital
infrastructure, together with broadband deployment, and are in varied phases of
implementation.  We're working with the states and municipalities to
take part on this broadband grant program.

COVID-19[feminine]

On March 13, 2020, the FCC issued a pledge to Preserve America Related by Might
13, 2020, which was later prolonged to June 30, 2020.  The pledge requested all
communications suppliers to not terminate service to any residential or small
enterprise clients due to their lack of ability to pay their payments as a result of
disruptions attributable to the coronavirus pandemic; to waive any late charges that any
residential or small enterprise clients incur due to their financial
circumstances associated to the coronavirus pandemic; and to open their Wi-Fi
hotspots to any American who wants them.  Consolidated signed on to the pledge
by June 30, 2020. A number of states took the FCC pledge a step additional by not
permitting any service to disconnect service inside their state through the
Governors' declared state of emergency, which Consolidated additionally supported.  Most
state moratoriums on disconnections have expired; nevertheless, sure states such
as Washington and New York had been prolonged to July 31, 2021 and December 31, 2021,
respectively.

In February 2021, the FCC created the Emergency Broadband Profit Program
("EBB"), a short lived program to assist low revenue households keep related throughout
the COVID-19 pandemic by offering broadband service reductions for eligible
households. Consolidated is a participant on this program. The EBB ended
December 31, 2021.  EBB recipients absolutely enrolled as of December 31, 2021
robotically continued to obtain their present month-to-month profit till March 1,
2022 when the Inexpensive Connectivity Program took its place.

                                       35

Contents

Inexpensive Connectivity Program

The Inexpensive Connectivity Program ("ACP") is a everlasting broadband
affordability program set as much as substitute the EBB. The ACP program helps guarantee
that households can afford the broadband entry they want for work, college,
healthcare and extra. The profit gives a reduction of as much as $30 monthly
towards web service for eligible households and as much as $75 monthly for
households on qualifying Tribal lands. Eligible households can even obtain a
one-time low cost of as much as $100 to buy a laptop computer, desktop pc, or
pill from taking part suppliers in the event that they contribute greater than $10 and fewer
than $50 towards the acquisition worth. The ACP is proscribed to at least one month-to-month service
low cost and one machine low cost per family. This system started funding March
1, 2022.  Consolidated is taking part on this program.

Funding in infrastructure and employment regulation

The Infrastructure Funding and Jobs Act (the "Infrastructure Act") handed on
June 30, 2021 included $65.0 billion towards broadband.  The broadband web
portion of the Infrastructure Act is geared toward rising web protection for
extra common entry, together with for rural, low-income, and tribal communities.

65% of this funding is earmarked particularly for underserved communities. Moreover, this measure is designed to assist make Web entry extra reasonably priced and improve digital literacy.

The Infrastructure Act put aside $42.5 billion for Broadband Fairness, Entry and
Deployment grants. The Nationwide Telecommunications and Info
Administration administers the grant program and is within the means of soliciting
feedback earlier than issuing ultimate guidelines.



Different Regulatory Points

We're additionally topic to a lot of regulatory proceedings occurring on the
federal and state ranges which will have a cloth affect on our operations. The
FCC and state commissions have authority to subject guidelines and laws associated
to our enterprise. A lot of proceedings are pending or anticipated which might be
associated to such telecommunications points as competitors, interconnection,
entry prices, ICC, broadband deployment, shopper safety and common
service reform. Some proceedings might authorize new companies to compete with our
current companies. Proceedings that relate to our cable tv operations
embody rulemakings on set high bins, carriage of programming, {industry}
consolidation and methods to advertise extra competitors. There are numerous
on-going authorized challenges to the scope or validity of FCC orders which were
issued. Consequently, it isn't but potential to completely decide the affect of the
associated FCC guidelines and laws on our operations.

Non-operating gadgets

Curiosity expense, internet

Curiosity expense, internet of curiosity revenue, decreased $11.2 million and $45.3
million through the quarter and 9 months ended September 30, 2022,
respectively, in comparison with the identical durations in 2021. In the course of the quarter and 9
months ended September 30, 2021, we acknowledged curiosity expense, together with
amortized prices, of $10.9 million and $32.0 million, respectively, on the Be aware
issued to Searchlight as a part of the funding settlement entered into in
October 2020. The Be aware was transformed into perpetual most well-liked inventory in
conjunction with the closing of the second stage of the Searchlight funding
in December 2021. As well as, the maturity of an rate of interest swap settlement
in July 2021 decreased curiosity expense $0.9 million and $6.3 million through the
quarter and 9 months ended September 30, 2022, respectively, as in comparison with
2021. Curiosity expense on our excellent time period mortgage additionally decreased through the
9 months ended September 30, 2022 due a discount within the annual rate of interest
as a part of the refinancing of our credit score settlement in April 2021, as described
within the "Liquidity and Capital Assets" part under.

Loss on extinguishment of debt

As described within the "Liquidity and Capital Assets" part under, we incurred
a loss on the extinguishment of debt of $12.0 million in reference to the
compensation of $397.0 million of excellent time period loans underneath our credit score settlement
through the 9 months ended September 30, 2021.  As well as, we acknowledged a
lack of $5.1 million on the extinguishment

                                       36

Contents

of debt through the nine-month interval ended September 30, 2021 associated to the refinancing of our credit score settlement in April 2021.

Change in honest worth of contingent cost rights

We had been required to measure our contingent cost rights at honest worth till
they had been transformed into shares of the Firm's widespread inventory. In the course of the
quarter and 9 months ended September 30, 2021, we acknowledged a lack of $2.2
million and $99.6 million, respectively, on the rise within the honest worth of
the contingent cost proper issued to Searchlight.

Different revenue

Different revenue elevated $0.6 million and $4.9 million through the quarter and 9
months ended September 30, 2022, respectively, in comparison with the identical durations in
2021. Pension and post-retirement expense decreased $0.9 million and $1.5
million, respectively. See Be aware 13 to the condensed consolidated monetary
statements for a extra detailed dialogue concerning our pension and
post-retirement plans. As well as, through the 9 months ended September 30,
2021, we acknowledged a lack of $3.6 million on the disposition of wi-fi
spectrum licenses.

Revenue taxes

Revenue taxes decreased $3.6 million and $15.9 million through the quarter and
9 months ended September 30, 2022, respectively, in comparison with the identical durations
in 2021. Our efficient tax price was 11.9% and (24.2)% for the quarters ended
September 30, 2022 and 2021, respectively, and 11.5% and 1.3% for the nine-month
durations ended September 30, 2022 and 2021, respectively.

On March 2, 2022, we entered right into a definitive settlement to promote considerably
all of the property of our Kansas Metropolis operations.  On September 22, 2021, we entered
right into a definitive settlement to promote considerably all the property of our
non-core, rural ILEC enterprise positioned in Ohio (the "Ohio transaction").  The
Ohio transaction closed on January 31, 2022.   Because of the Kansas Metropolis
and Ohio transactions, we recorded a rise of $1.9 million and $23.2 million
to our present tax expense for the quarter and 9 months ended September 30,
2022, respectively, associated to the writedown of noncash goodwill included within the
transactions that isn't deductible for tax functions.  For the Ohio transaction,
we recorded a rise to our present tax expense of $1.5 million for the
quarter and nine-month interval ended September 30, 2021 associated to the writedown
of noncash goodwill in 2021. The Firm doesn't contemplate these gross sales
transactions and associated goodwill changes uncommon or rare and
subsequently the corresponding tax affect is recorded by persevering with
operations.

The funding made by Searchlight in 2020 is handled as a contribution of
fairness for federal tax functions. Accordingly, the affect of the non-cash PIK
curiosity expense, low cost and issuance prices, and honest worth changes on the
CPR are usually not acknowledged for federal revenue tax functions, leading to a rise
to our present tax expense of $3.6 million and $34.7 million for the quarter and
9 months ended September 30, 2021, respectively.

For the quarter and 9 months ended September 30, 2021, the Firm utilized
the discrete efficient tax price methodology, as allowed by Accounting Requirements
Codification ("ASC") 740-270-30-18, "Revenue Taxes - Interim Reporting," to
calculate its interim revenue tax provision. The Firm utilized the discrete
methodology, at the moment, as a result of the appliance of the estimated annual efficient
tax price methodology (i) was not dependable as a result of excessive diploma of uncertainty in
estimating annual pretax earnings and (ii) would end in small adjustments to the
projected atypical annual revenue inflicting important adjustments within the estimated
annual efficient price.

Unique of the discrete efficient tax price methodology and everlasting revenue tax
affect associated to the Kansas Metropolis, Ohio and Searchlight transactions, our
efficient tax price for the quarters ended September 30, 2022 and 2021 would have
been roughly 28.2% and 23.9%, respectively, and roughly 26.1% and
25.6% for the 9 months ended September 30, 2022 and 2021, respectively. The
efficient tax price differed from the federal and state statutory charges primarily
resulting from everlasting revenue tax variations associated to the Kansas Metropolis, Ohio, and
Searchlight transactions, recurring everlasting tax variations, and variations
in allocable revenue for the Firm's state tax filings.

                                       37

  Desk of Contents

Non-GAAP Measures
Along with the outcomes reported in accordance with US GAAP, we additionally use
sure non-GAAP measures resembling EBITDA and adjusted EBITDA to guage
working efficiency and to facilitate the comparability of our historic outcomes
and developments. These monetary measures are usually not measures of monetary efficiency
underneath US GAAP and shouldn't be thought-about in isolation or as an alternative to
internet revenue as a measure of efficiency and internet money supplied by working
actions as a measure of liquidity. They aren't, on their very own, essentially
indicative of money accessible to fund money wants as decided in accordance with
GAAP. The calculation of those non-GAAP measures is probably not corresponding to
equally titled measures utilized by different corporations. Reconciliations of those
non-GAAP measures to probably the most immediately comparable monetary measures introduced
in accordance with GAAP are supplied under.

EBITDA is outlined as internet earnings earlier than curiosity expense, revenue taxes and
depreciation and amortization.  Adjusted EBITDA is comprised of EBITDA, adjusted
for sure gadgets as permitted or required underneath our credit score facility as
described within the reconciliations under. These measures are a typical measure of
working efficiency within the telecommunications {industry} and are helpful, with
different information, as a way to guage our means to fund our estimated makes use of of
money.

The next desk is a reconciliation of loss from persevering with operations to
adjusted EBITDA for the quarters and 9 months ended September 30, 2022 and
2021:

                                             Quarter Ended              9 Months Ended
                                             September 30,                September 30,
(In 1000's, unaudited)                  2022          2021          2022           2021
Loss from persevering with operations         $  (7,257)    $ (13,100)    $ (136,944)    $ (146,542)
Add (subtract):
Curiosity expense, internet of curiosity
revenue                                      32,071        43,176         91,742        137,022
Revenue tax expense (profit)                 (978)         2,552       (17,814)        (1,860)
Depreciation and amortization               75,659        73,765        220,552        225,455
EBITDA                                      99,495       106,393        157,536        214,075

Changes to EBITDA:
Different, internet (1)                               3,236       (1,288)          8,857          3,865
Acquire on disposal of property                (19,163)             -       (19,163)              -
Loss on extinguishment of debt                   -             -              -         17,101
Loss on impairment                           5,208         5,704        131,698          5,704
Change in honest worth of contingent
cost rights                                   -         2,205              -         99,619
Non-cash, stock-based compensation           2,939         3,217          7,971          7,160
Adjusted EBITDA from persevering with
operations                                  91,715       116,231        286,899        347,524
Funding distributions from
discontinued operations                      5,478        11,127         25,023         33,160
Adjusted EBITDA                         $   97,193    $  127,358    $   311,922    $   380,684

Consists of dividend revenue, revenue attributable to non-controlling pursuits in (1) subsidiaries, prices associated to acquisitions and transactions, together with integration

and severance pay, non-cash retirement and post-retirement advantages and sure

different miscellaneous gadgets.

Money and capital sources

Views and overview

Our working necessities have traditionally been funded from money flows
generated from our enterprise and borrowings underneath our credit score amenities. We
anticipate that our future working necessities will proceed to be funded from
money flows from working actions, current money and money equivalents,
proceeds from gross sales of nonstrategic property and, if wanted, borrowings underneath our
revolving credit score facility and our means to acquire future exterior financing.
 We anticipate that we

                                       38

  Desk of Contents

will proceed to make use of a good portion of our money stream to fund capital expenditures for our accelerated fiber optic community enlargement and progress plan and to spend money on future enterprise alternatives.

The next desk summarizes our money flows:

                                          9 Months Ended September 30,
(In 1000's)                               2022                 2021
Money flows supplied by (utilized in):
Working actions
Persevering with operations                  $        193,108     $        262,819
Discontinued operations                          25,023               33,160
Investing actions
Persevering with operations                         (338,059)            (493,127)
Discontinued operations                         489,567                    -
Financing actions                            (7,225)              140,269

Change in money and money equivalents $362,414 ($56,879)

Money stream generated by working actions

Internet money supplied by working actions from persevering with operations was $193.1
million through the nine-month interval ended September 30, 2022, a lower of
$69.7 million in comparison with the identical interval in 2021. Money flows supplied by
working actions decreased partially resulting from a decline in earnings because of this
of a lower in working income and a discount in our annual federal
subsidies help. The decline can be on account of adjustments in working capital
and the timing of expenditures. These reductions in money supplied by working
actions had been offset partially by a lower in money paid for curiosity of $1.9
million and money contributions to our outlined profit pension plan of $6.1
million through the nine-month interval ended September 30, 2022 in comparison with the
similar interval in 2021. As well as, in response to the potential impacts of the
COVID-19 pandemic in 2020, we deferred sure employer payroll tax funds
underneath the CARES Act. The portion of the taxes deferred till 2021 of
roughly $6.0 million had been paid through the 9 months ended September 30,
2021.

Money flows utilized in investing actions

Internet money utilized in investing actions from persevering with operations was $338.1
million through the nine-month interval ended September 30, 2022 and consisted
primarily of money used for capital expenditures, the acquisition and maturity of
short-term investments and proceeds acquired from enterprise tendencies and the
sale of property.

Capital expenditures proceed to be our main recurring investing exercise and
had been $497.0 million and $339.5 million through the nine-month durations ended
September 30, 2022 and 2021, respectively. Capital expenditures for 2022 are
anticipated to be $565.0 million to $585.0 million, which will likely be used for our
deliberate fiber tasks and broadband community enlargement, which is able to embody the
improve in 2022 of roughly 400,000 fiber passings, and to help
success-based capital tasks for industrial, service and shopper initiatives.
We anticipate to proceed to spend money on the enhancement and enlargement of our fiber
community with the intention to retain and purchase extra clients by a broader set of
merchandise and an expanded community footprint.

In the course of the 9 months ended September 30, 2022, we acquired proceeds from the
maturity and sale of investments of $151.6 million, which was offset partially by
the acquisition of $40.0 million in short-term investments consisting primarily of
held-to-maturity debt securities with authentic maturities of three to 12
months. In the course of the 9 months ended September 30, 2021, we bought $155.0
million in short-term investments.



In the course of the 9 months ended September 30, 2022, we accomplished the sale of
considerably all the property of CCOC, our non-core, rural ILEC enterprise
positioned in Ohio, for money proceeds of $26.0 million. Money proceeds from the sale
of property elevated $21.1 million through the nine-month interval ended September
30, 2022, primarily from money proceeds of $19.4 million for the sale of sure
non-strategic communication towers.

                                       39

Contents

Internet money supplied by discontinued operations of $489.6 million consists of the
internet proceeds from the sale of our 5 restricted wi-fi partnership pursuits
through the 9 months ended September 30, 2022. The proceeds from the sale are
anticipated for use to help the fiber enlargement plan.

Money flows utilized in financing actions

Internet money utilized in financing actions consists primarily of proceeds and principal repayments of our long-term borrowings.

long-term debt

credit score settlement

On October 2, 2020, the Firm, by sure of its wholly-owned
subsidiaries, entered right into a Credit score Settlement with varied monetary
establishments (as amended, the "Credit score Settlement") to switch the Firm's
earlier credit score settlement in its entirety.  The Credit score Settlement consisted of
time period loans in an authentic combination quantity of $1,250.0 million (the "Preliminary
Time period Loans") and a revolving mortgage facility of $250.0 million.  The Credit score
Settlement additionally contains an incremental mortgage facility which gives the power
to borrow, topic to sure phrases and situations, incremental loans in an
combination quantity of as much as the larger of (a) $300.0 million plus (b) an quantity
which might not trigger its senior secured leverage ratio to not exceed 3.70:1.00
(the "Incremental Facility"). Borrowings underneath the Credit score Settlement are secured
by considerably all the property of the Firm and its subsidiaries, topic
to sure exceptions.

The Preliminary Time period Loans had been issued in an authentic combination principal quantity of
$1,250.0 million with a maturity date of October 2, 2027 and contained an
authentic issuance low cost of 1.5% or $18.8 million, which is being amortized
over the time period of the mortgage.  Previous to amendments to the Credit score Settlement, as
described under, the Preliminary Time period Loans required quarterly principal funds of
$3.1 million, which commenced December 31, 2020, and bore curiosity at a price of
4.75% plus the London Interbank Supplied Fee ("LIBOR") topic to a 1.00% LIBOR
flooring.

On January 15, 2021, the Firm entered into Modification No. 1 to the Credit score
Settlement by which we borrowed a further $150.0 million combination principal
quantity of incremental time period loans (the "Incremental Time period Loans"). The Incremental
Time period Loans have phrases and situations similar to the Preliminary Time period Loans
together with the identical maturity date and rate of interest. The Preliminary Time period Loans and
Incremental Time period Loans, collectively (the "Time period Loans"), comprise a single class
of time period loans underneath the Credit score Settlement.

On March 18, 2021, the Firm repaid $397.0 million of the excellent Time period
Loans with the web proceeds acquired from the issuance of $400.0 million
combination principal quantity of 5.00% senior secured notes due 2028 (the "5.00%
Senior Notes"), as described under. The compensation of the Time period Loans was utilized
to the remaining principal funds in direct order of maturity, thereby
eliminating the required quarterly principal funds by the remaining time period
of the mortgage.  In reference to the compensation of the Time period Loans, we acknowledged
a loss on extinguishment of debt of $12.0 million through the 9 months ended
September 30, 2021.

On April 5, 2021, the Firm, entered right into a second modification to the Credit score
Settlement (the "Second Modification") to refinance the excellent Time period Loans of
$999.9 million. The phrases and situations of the Credit score Settlement stay
considerably related and unchanged besides with respect to the rate of interest
relevant to the Time period Loans and sure different provisions.  Because of the
Second Modification, the rate of interest of the Time period Loans was decreased to three.50% plus
LIBOR topic to a 0.75% LIBOR flooring. The maturity date of the Time period Loans of
October 2, 2027 remained unchanged. In reference to coming into into the Second
Modification, we acknowledged a lack of $5.1 million on the extinguishment of debt
through the 9 months ended September 30, 2021.

The revolving credit score facility has a maturity date of October 2, 2025 and an
relevant margin (at our election) of 4.00% for LIBOR-based borrowings or 3.00%
for alternate base price borrowings, with a 0.25% discount in every case if the
consolidated first lien leverage ratio, as outlined within the Credit score Settlement, does
not exceed 3.20 to 1.00.  At September 30, 2022 and December 31, 2021, there
had been no borrowings excellent underneath the revolving credit score facility. Stand-by
letters of credit score of $26.4 million had been excellent underneath our revolving credit score
facility as of September 30, 2022.  The stand-by

                                       40

Contents

letters of credit score are renewable yearly and scale back the borrowing availability
underneath the revolving credit score facility.  As of September 30, 2022, $223.6 million
was accessible for borrowing underneath the revolving credit score facility.

The weighted-average rate of interest on excellent borrowings underneath our credit score
facility was 6.06% and 4.25% as of September 30, 2022 and December 31, 2021,
respectively.  Curiosity is payable no less than quarterly.

Compliance with the phrases of the credit score settlement

The Credit score Settlement incorporates varied provisions and covenants, together with, amongst
different gadgets, restrictions on the power to pay dividends, incur extra
indebtedness, and subject sure capital inventory.  We've got agreed to keep up
sure monetary ratios, together with a most consolidated first lien leverage
ratio, as outlined within the Credit score Settlement.  Amongst different issues, it will likely be an
occasion of default, with respect to the revolving credit score facility solely, if our
consolidated first lien leverage ratio is bigger than 5.85:1.00 as of the tip
of any fiscal quarter, if on such date the testing threshold is met. The testing
threshold is met if the combination quantity of our borrowings excellent underneath the
revolving credit score facility exceeds 35%.  As of September 30, 2022, the testing
threshold was not met and our consolidated first lien leverage ratio underneath the
Credit score Settlement was 5.12:1.00.  As of September 30, 2022, we had been in compliance
with the Credit score Settlement covenants.

Senior Notes

On October 2, 2020, we accomplished an providing of $750.0 million combination
principal quantity of 6.50% unsubordinated secured notes due 2028 (the "6.50%
Senior Notes").  The 6.50% Senior Notes had been priced at par and bear curiosity at
a price of 6.50%, payable semi-annually on April 1 and October 1 of every 12 months,
starting on April 1, 2021.  The 6.50% Senior Notes mature on October 1, 2028.

On March 18, 2021, we issued $400.0 million combination principal quantity 5.00%
Senior Notes, along with the 6.50% Senior Notes (the "Senior Notes").  The
5.00% Senior Notes had been priced at par and bear curiosity at a price of 5.00% per
12 months, payable semi-annually on April 1 and October 1 of every 12 months, starting on
October 1, 2021.  The 5.00% Senior Notes mature on October 1, 2028. The online
proceeds from the issuance of the 5.00% Senior Notes had been used to repay $397.0
million of the Time period Loans excellent underneath the Credit score Settlement.

The Senior Notes are unsubordinated secured obligations of the Firm, secured
by a primary precedence lien on the collateral that secures the Firm's
obligations underneath the Credit score Settlement. The Senior Notes are absolutely and
unconditionally assured on a primary precedence secured foundation by the Firm and
the vast majority of our wholly-owned subsidiaries. The choices of the Senior Notes
haven't been registered underneath the Securities Act of 1933, as amended or any
state securities legal guidelines.

Compliance with the covenants of the Senior Notes

Topic to sure exceptions and {qualifications}, the indentures governing the
Senior Notes incorporates customary covenants that, amongst different issues, limits the
Firm and its restricted subsidiaries' means to: incur extra debt or
subject sure most well-liked inventory; pay dividends or make different distributions on
capital inventory or prepay subordinated indebtedness; buy or redeem any fairness
pursuits; make investments; create liens; promote property; enter into agreements
that prohibit dividends or different funds by restricted subsidiaries;
consolidate, merge or switch all or considerably all of its property; have interaction in
transactions with its associates; or enter into any sale and leaseback
transactions.  The indentures additionally comprise customary occasions of default.  As of
September 30, 2022, the Firm was in compliance with all phrases, situations and
covenants underneath the indentures governing the Senior Notes.

Finance leases

We lease sure amenities and tools underneath varied finance leases which
expire between 2022 and 2040.  As of September 30, 2022, the current worth of
the minimal remaining lease commitments was roughly $29.0 million, of
which $10.3 million was due and payable inside the subsequent twelve months. The
leases require whole remaining rental funds of $31.8 million as of September
30, 2022.

                                       41

  Desk of Contents

Adequacy of money sources

The next desk presents chosen info concerning our monetary situation.

                                                         September 30,      December 31,
(In 1000's, apart from ratio)                             2022          

2021

Money and money equivalents and short-term investments    $       462,049    $      210,436
Working capital                                                 431,058           142,270
Present ratio                                                      2.42              1.50


Our internet working capital elevated $288.8 million as of September 30, 2022
in comparison with December 31, 2021. Money, money equivalents and short-term investments
elevated $251.6 million primarily on account of the money proceeds from the
sale of our restricted wi-fi partnership pursuits, which was decreased partially by
capital expenditures for the fiber construct plan throughout 2022. Working capital additionally
included internet property labeled as held on the market of $88.2 million at September
30, 2022 associated to the pending sale of considerably all the property of our
Kansas Metropolis operations in comparison with internet property held on the market of $26.0 million at
December 31, 2021 for the ILEC enterprise positioned in Ohio.  Nonetheless, working
capital was decreased by a rise in accrued curiosity of $17.3 million at
September 30, 2022 associated to the timing of the semi-annual curiosity funds
for our Senior Notes.

Our most vital use of funds for the rest of 2022 is predicted to be
for: (i) curiosity funds on our indebtedness of between $50.0 million and
$52.0 million; and (ii) capital expenditures of between $88.0 million and $108.0
million.  The current refinancing of our capital construction mixed with the
Searchlight funding gives us the capital and monetary flexibility to fund
our accelerated fiber community enlargement and progress plans. Sooner or later, our
means to make use of money could also be restricted by our different anticipated makes use of of money and our
means to incur extra debt will likely be restricted by our current and future debt
agreements.

We’re carefully monitoring the continued affect on our enterprise of the novel pressure of coronavirus (“COVID-19”) and its variants. We’re taking precautions to make sure the security of our staff, clients and enterprise companions, whereas making certain enterprise continuity and dependable service and help to our clients.

 Whereas we now have not seen a cloth antagonistic affect to our monetary outcomes from
COVID-19 up to now, if the pandemic worsens or new variants of the virus develop into
extra dominant and had been to trigger important adverse impacts to financial
situations, our outcomes of operations, monetary situation and liquidity may
be materially and adversely impacted.

On March 27, 2020, the Coronavirus Help, Reduction, and Financial Safety Act
("CARES Act") was enacted by the U.S. authorities as an emergency financial
stimulus package deal that features spending and tax breaks to strengthen the US
financial system and fund a nationwide effort to curtail the financial results of
COVID-19.  The CARES Act included, amongst different issues, deferral of sure
employer payroll tax funds.  In 2020, we deferred the cost of
roughly $12.0 million for the employer portion of Social Safety taxes
in any other case due in 2020 with 50% due by December 31, 2021 and the remaining 50% by
December 31, 2022. The portion of the taxes deferred till 2021 had been paid throughout
the third quarter of 2021 and we anticipate to pay the remaining portion through the
fourth quarter of 2022.

We consider that money flows from working actions, along with our current
money and borrowings accessible underneath our revolving credit score facility, will likely be
adequate for no less than the following twelve months to fund our present anticipated
makes use of of money.  After that, our means to fund anticipated makes use of of money and to
adjust to the monetary covenants underneath our debt agreements will rely upon the
outcomes of future operations, efficiency and money stream. Our means to fund
anticipated makes use of from the outcomes of future operations will likely be topic to
prevailing financial situations and to monetary, enterprise, regulatory,
legislative and different elements, lots of that are past our management. As a result of
uncertainty and unpredictability associated to the potential impacts of the
COVID-19 pandemic on our enterprise, we are going to proceed to carefully handle our money
and monitor liquidity.

To the extent that our enterprise plans or projections change or show to be
inaccurate, we might require extra financing or require financing earlier than
we at present anticipate. Sources of extra financing might embody industrial
financial institution borrowings, different strategic debt financing, gross sales of nonstrategic property,
vendor financing or the non-public or public gross sales of fairness and debt securities.

There will be no assurance that we will generate adequate working money stream sooner or later, that anticipated income progress will likely be realized, or that future borrowings or fairness issuances will likely be accessible.

                                       42

Contents

in quantities adequate to offer enough sources of money to fund our anticipated
makes use of of money. Failure to acquire enough financing, if essential, may require
us to considerably scale back our operations or degree of capital expenditures which
may have a cloth antagonistic impact on our monetary situation and the outcomes
of operations.  As well as, the COVID-19 pandemic has precipitated a disruption in
the capital markets, which may make acquiring extra financing extra
troublesome and we might not have the ability to get hold of financing on favorable phrases or at
all.

We could also be unable to entry the money flows of our subsidiaries since sure of
our subsidiaries are events to credit score or different borrowing agreements, or are
topic to statutory or regulatory restrictions, that prohibit the cost of
dividends or making intercompany loans and investments, and people subsidiaries
are prone to proceed to be topic to such restrictions and prohibitions for
the foreseeable future.  As well as, future agreements that our subsidiaries
might enter into governing the phrases of indebtedness might prohibit our
subsidiaries' means to pay dividends or advance money in every other method
to
us.

Surety Bonds

Within the regular course of our enterprise, we enter into surety bonds, efficiency bonds and related bonds as required by sure jurisdictions by which we offer companies.

From September 30, 2022we had about $6.6 million of those excellent bonds.

Outlined profit pension plans

As required, we contribute to certified outlined pension plans and non-qualified
supplemental retirement plans (collectively the "Pension Plans") and different
post-retirement profit plans, which give retirement advantages to sure
eligible staff as described within the Be aware 13 to the Condensed Consolidated
Monetary Statements, included on this report in Half I - Merchandise 1 "Monetary
Statements". Contributions are supposed to offer for advantages attributed to
service up to now. Our funding coverage is to contribute yearly an actuarially
decided quantity according to relevant federal revenue tax laws.

The price to keep up our Pension Plans and future funding necessities are
affected by a number of elements together with the anticipated return on funding of the
property held by the Pension Plans, adjustments within the low cost price used to calculate
pension expense and the amortization of unrecognized features and losses. Returns
generated on the Pension Plans property have traditionally funded a major
portion of the advantages paid underneath the Pension Plans. We estimate the long-term
price of return on property will likely be 6.00%.  The Pension Plans spend money on marketable
fairness securities that are uncovered to adjustments within the monetary markets.
COVID-19 has additionally impacted the monetary markets, which may considerably
affect the returns on our plan property.  If the monetary markets expertise a
sustained downturn and returns fall under our estimate, we might be required to
make materials contributions to the Pension Plans, which may adversely have an effect on
our money flows from operations.

In 2022, we anticipate to make a contribution totaling roughly $10.0 million to
our Pension Plans and $8.2 million to our different post-retirement profit plans.
As of September 30, 2022, we now have contributed $10.0 million and $5.1 million to
our Pension Plans and our different post-retirement profit plans, respectively. Our
contribution quantities meet the minimal funding necessities as set forth in
worker profit and tax legal guidelines. We elected to take part in ARPA starting with
the 2021 plan 12 months.  ARPA, which was signed into regulation in March 2021, included
adjustments to the employer funding necessities and is designed to scale back the
quantities of required contributions as a reduction. Throughout 2021 and the six months
ended June 30, 2022, we elected to fund our pension contributions on the
pre-ARPA ranges, which has created a pre-funded steadiness. We anticipate that for the
the rest of 2022 and 2023, no extra pension contributions will likely be required
as we now have now adopted the ARPA minimal required contributions and can use our
present pre-funded steadiness to fulfill these minimal contribution necessities.

Revenue taxes

The timing of money funds for revenue taxes, which is ruled by the Inside
Income Service and different taxing jurisdictions, will differ from the timing of
recording tax expense and deferred revenue taxes, that are reported in
accordance with GAAP. For instance, tax legal guidelines in impact concerning accelerated or
"bonus" depreciation for tax reporting resulted in much less money funds than the
GAAP tax expense. Acceleration of tax deductions may ultimately end in
conditions the place money funds will exceed GAAP tax expense.

                                       43

  Desk of Contents

Regulatory Issues
In 2020, the FCC adopted an order establishing the RDOF, the following part of the
CAF program, which resulted in a discount of roughly $42.2 million within the
annual help we obtain as of January 1, 2022 by December 31, 2031.

Crucial accounting estimates

Our condensed consolidated monetary statements and accompanying notes are
ready in accordance with US GAAP. Making ready monetary statements requires
administration to make estimates and assumptions that have an effect on the reported quantities of
property, liabilities, income and bills. These estimates and assumptions are
affected by administration's utility of accounting insurance policies. Our judgments are
based mostly on historic expertise and on varied different assumptions which might be
believed to be cheap underneath the circumstances, the outcomes of which kind the
foundation for making estimates concerning the carrying values of property and liabilities
that aren't readily obvious from different sources. For a full dialogue of our
accounting estimates and assumptions that we now have recognized as important within the
preparation of our condensed consolidated monetary statements, consult with our
2021 Annual Report on Type 10-Okay filed with the SEC.

Current accounting pronouncements

For info concerning the affect of sure current accounting
pronouncements, see Be aware 1 "Abstract of Vital Accounting Insurance policies" to the
Condensed Consolidated Monetary Statements, included on this report in Half I -
Merchandise 1 "Monetary Statements".

© Edgar On-line, supply Previews

#CONSOLIDATED #COMMUNICATIONS #HOLDINGS #MANAGEMENT #REPORT #ANALYSIS #FINANCIAL #POSITION #OPERATING #RESULTS #Type #10Q

Leave a Comment

Your email address will not be published.