Communications Sales & Leasing Reports 2016 2Q Results
SECOND QUARTER RESULTS
Revenues for the second quarter of 2016 were $188.6 million. Net loss and Adjusted EBITDA was $1.5 million and $171.6 million, respectively. PEG Bandwidth (“PEG”) contributed $13.8 million of revenues and $5.5 million of Adjusted EBITDA from its acquisition date of May 2, 2016 to June 30, 2016. Net loss attributable to common shares was $2.9 million, or ($0.02) per diluted share, for the period. Adjusted Funds From Operations (“AFFO”) attributable to common shares was $99.6 million, or $0.66 per diluted common share. Normalized FFO (“NFFO”) attributable to common shares, which excludes transaction related costs, was $95.7 million, or $0.63 per diluted common share.
INVESTMENT ACTIVITIES
On June 20, 2016, we announced that we entered into a definitive agreement to acquire Tower Cloud, Inc. (“Tower Cloud”), a leading provider of data transport services, focusing on infrastructure solutions to the wireless and enterprise sectors, including fiber-to-the-tower backhaul, small cell networks, and dark fiber deployments. We expect to close the transaction before the end of the third quarter of 2016.
FINANCING
During the quarter, we issued $150 million of 6.00% Senior Secured Notes due 2023 at an issue price of 99.25%. In connection with Windstream’s disposition of its retained stake, we issued 2.2 million shares of our common stock in June 2016. Aggregate proceeds of approximately $200 million from these transactions were used to reduce borrowings under our revolving credit agreement.
At quarter-end, we had $507 million of liquidity consisting of $49 million of unrestricted cash and cash equivalents, and $458 million of undrawn borrowing capacity under our revolving credit facility. Our leverage ratio at quarter end was 5.6x based on Net Debt to Annualized Adjusted EBITDA.
As previously reported, on August 9, 2016 the Company’s Board of Directors declared a quarterly cash dividend of $0.60 per common share, payable on October 14, 2016 to stockholders of record on September 30, 2016.
OUTLOOK
We expect full year 2016 net income attributable to common shares to range between $0.08 and $0.10 per diluted share. AFFO is expected to range between $2.58 and $2.60 per diluted common share, and Normalized FFO is expected to range between $2.48 and $2.50 per diluted common share for the same period. We continue to anticipate PEG’s eight month contribution to our 2016 operating results to be approximately $55 million in revenues and $21 million of Adjusted EBITDA.
Our outlook reflects the impact of capital market transactions we executed in the second quarter, which reduced the mid-point of our AFFO guidance by approximately $0.02 per diluted common share. Additionally, our current outlook excludes the impact of Tower Cloud and any future acquisitions and capital market transactions.
ABOUT CS&LCS&L, an internally managed real estate investment trust, is engaged in the acquisition and construction of mission critical communications infrastructure, and is a leading provider of wireless infrastructure solutions for the communications industry. CS&L currently owns 3.9 million fiber strand miles, 86 wireless towers, and other communications real estate throughout the United States and Mexico.
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