unit-10ka_20211231.htm
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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

FORM 10-K/A

(Amendment No. 1)

 

(Mark One)

ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the fiscal year ended December 31, 2021

OR

TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from _____ to _____

Commission File Number 001-36708

 

Uniti Group Inc.

(Exact name of Registrant as specified in its Charter)

 

 

Maryland

46-5230630

(State or other jurisdiction of

incorporation or organization)

(I.R.S. Employer
Identification No.)

2101 Riverfront Drive

Suite A

Little Rock, Arkansas

72202

(Address of principal executive offices)

(Zip Code)

Registrant’s telephone number, including area code: (501850-0820

 

Securities registered pursuant to Section 12(b) of the Act:

 

Title of each class

Trading Symbol

Name of each exchange

on which registered

Common Stock, $0.0001 Par Value

UNIT

The NASDAQ Global Select Market

Securities registered pursuant to Section 12(g) of the Act: None

Indicate by check mark if the Registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.    Yes     No  

Indicate by check mark if the Registrant is not required to file reports pursuant to Section 13 or 15(d) of the Act.    Yes      No  

Indicate by check mark whether the Registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the Registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.    Yes      No  

Indicate by check mark whether the Registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the Registrant was required to submit such files).    Yes      No  

Indicate by check mark whether the Registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

 

Large accelerated filer

 

  

Accelerated filer

 

 

 

 

 

Non-accelerated filer

 

☐  

  

Smaller reporting company

 

 

 

 

 

Emerging growth company

 

 

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. 

Indicate by check mark whether the registrant has filed a report on and attestation to its management’s assessment of

the effectiveness of its internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C.7262(b)) by the registered public accounting firm that prepared or issued its audit report.

Indicate by check mark whether the Registrant is a shell company (as defined in Rule 12b-2 of the Act).    Yes      No  

The aggregate market value of the voting and non-voting common equity held by non-affiliates of the Registrant, based on the closing price of the shares of common stock on The NASDAQ Global Select Market on June 30, 2021 was $1,514,665,270

The number of shares of the Registrant’s common stock outstanding as of February 18, 2022 was 236,325,229.

DOCUMENTS INCORPORATED BY REFERENCE

 


 

Portions of the Registrant’s definitive proxy statement relating to the 2022 annual meeting of stockholders are incorporated by reference into Part III of this Annual Report on Form 10-K.

Auditor Firm Id:

185

Auditor Name:

KPMG LLP

Auditor Location:

Dallas, Texas

 

 

ii


 

 

Explanatory Note

 

Uniti Group Inc. (the “Company”) is filing this Amendment No. 1 on Form 10-K/A (the “Amended 10-K”) to its Annual Report for the year ended December 31, 2021 (the “Original 10-K”) filed with the U.S. Securities and Exchange Commission on February 25, 2022 to include financial statements and related notes of Windstream Holdings, Inc., Windstream Holdings II, LLC, its successor in interest, and consolidated subsidiaries (collectively, “Windstream”), the Company’s most significant customer. For the years ended December 31, 2021, 2020 and 2019, 66.4%, 65.8% and 65.0% of our revenues, respectively, were derived from leasing the Company’s fiber and copper networks and other real estate to Windstream.

 

The Original 10-K is being amended by this Amended 10-K to include as exhibits: (i) the Windstream audited financial statements as of December 31, 2021, and for the year ended December 31, 2021, as of December 31, 2020 and for the period from September 22, 2020 to December 31, 2020 and for the period from January 1, 2020 to September 21, 2020 and for the year ended December 31, 2019, prepared in accordance with generally accepted accounting principles in the United States, (ii) the consent of the independent registered public accounting firm of Windstream and (iii) certifications by our Chief Executive Officer and Chief Financial Officer. This Amended 10-K does not otherwise update any exhibits as originally filed and does not otherwise reflect events that occurred after the filing date of the Original 10-K.

1


 

PART IV

Item 15. Exhibits, Financial Statement Schedules.

Financial Statements

See Index to Consolidated Financial Statements in “Financial Statements and Supplementary Data” of the Original 10-K.

Financial Statement Schedules

Uniti Group Inc. Schedule I – Condensed Financial Information of the Registrant (Parent Company) Condensed Balance Sheets as of December 31, 2021 and 2020, and the related Condensed Statements of Comprehensive Income and Cash Flows for each of the three years in the period ended December 31, 2021, including the related notes, appearing on pages S-1, S-2, S-3, and S-4 of the Original 10-K.

Uniti Group Inc. Schedule II – Valuation and Qualifying Accounts for each of the three years in the period ended December 31, 2021 appearing on page S-5 of the Original 10-K.

Uniti Group Inc. Schedule III – Schedule of Real Estate Investments and Accumulated Depreciation as of December 31, 2021 appearing on page S-6 of the Original 10-K.

Index to Exhibits

 

Exhibit No.

 

Description

2.1

 

Separation and Distribution Agreement, dated as of March 26, 2015, by and among Windstream Holdings, Inc., Windstream Services, LLC and Communications Sales & Leasing, Inc. (incorporated by reference to Exhibit 2.1 to the Company’s Current Report on Form 8-K dated and filed with the SEC as of March 26, 2015 (File No. 001-36708))

2.2

 

Agreement and Plan of Merger, dated as of January 7, 2016, by and among Communications Sales & Leasing, Inc., CSL Bandwidth Inc., Penn Merger Sub, LLC, PEG Bandwidth, LLC, PEG Bandwidth Holdings, LLC, and PEG Bandwidth Holdings, LLC, as Unitholders’ Representative (incorporated by reference to Exhibit 2.1 to the Company’s Current Report on Form 8-K dated and filed with the SEC as of January 12, 2016 (File No. 001-36708))

2.3**

 

Agreement and Plan of Merger, dated as of June 20, 2016, by and among Communications Sales & Leasing, Inc., CSL Fiber Holdings LLC, Thor Merger Sub, Inc., Tower Cloud, Inc. and Shareholder Representative Services LLC, as representative of the equityholders of Tower Cloud, Inc. (incorporated by reference to Exhibit 2.1 to the Company’s Quarterly Report on Form 10-Q dated and filed with the SEC as of August 11, 2016 (File No. 001-36708))

2.4

 

First Amendment, dated as of August 11, 2016, to the Agreement and Plan of Merger, dated as of June 20, 2016, by and among Communications Sales & Leasing, Inc., CSL Fiber Holdings LLC, Thor Merger Sub, Inc., Tower Cloud, Inc. and Shareholder Representative Services LLC, as representative of the equityholders of Tower Cloud, Inc. (incorporated by reference to Exhibit 2.2 to the Company’s Quarterly Report on Form 10-Q dated and filed with the SEC as of August 11, 2016 (File No. 001-36708))

2.5

 

Membership Interests Purchase Agreement, dated as of April 7, 2017, by and among Uniti Group Inc., Uniti Fiber Holdings Inc. and SLF Holdings, LLC (incorporated by reference to Exhibit 2.1 to the Company’s Current Report on Form 8-K dated and filed with the SEC as of April 11, 2017 (File No. 001-36708))

2.6

 

Amended and Restated Agreement of Limited Partnership of Uniti Group LP, dated July 3, 2017, by and between Uniti Group Inc. and Uniti Group LP LLC (incorporated by reference to Exhibit 2.1 to the Company’s Current Report on Form 8-K dated and filed with the SEC as of July 3, 2017 (File No. 001-36708))

2


 

Exhibit No.

 

Description

3.1

 

Articles of Amendment and Restatement of Communications Sales & Leasing, Inc. (incorporated by reference to Exhibit 3.1 to the Company’s Current Report on Form 8-K dated and filed with the SEC as of April 10, 2015 (File No. 001-36708))

3.2

 

Articles of Amendment of Communications Sales & Leasing, Inc. (incorporated by reference to Exhibit 3.1 to the Company’s Current Report on Form 8-K dated and filed with the SEC as of February 28, 2017 (File No. 001-36708))

3.3

 

Articles of Amendment of Uniti Group Inc. (incorporated by reference to Exhibit 3.1 to the Company’s Current Report on Form 8-K dated and filed with the SEC as of May 18, 2018 (File No. 001-36708))

3.4

 

Amended and Restated Bylaws of Uniti Group Inc. (incorporated by reference to Exhibit 3.1 to the Company’s Current Report on Form 8-K dated as of May 1, 2017 and filed with the SEC as of May 2, 2017 (File No. 001-36708))

4.1

 

Description of the Registrant’s Securities Registered Pursuant to Section 12 of the Securities Exchange Act of 1934 (incorporated by reference to Exhibit 4.22 to the Company’s Annual Report on Form 10-K filed with the SEC as of March 12, 2020 (File No. 001-36708))

4.2

 

Indenture, dated as of June 28, 2019, among Uniti Fiber Holdings, Inc., as issuer, Uniti Group Inc. and the other guarantors named therein, as guarantors, and Deutsche Bank Trust Company Americas, as trustee, governing the 4.00% Exchangeable Senior Notes due 2024 (incorporated by reference to Exhibit 4.1 to the Company’s Current Report on Form 8-K dated June 25, 2019 and filed with the SEC as of June 28, 2019 (File No. 001-36708))

4.3

 

Form of 4.00% Exchangeable Senior Notes due 2024 (included in Exhibit 4.2 above) (incorporated by reference to Exhibit 4.2 to the Company’s Current Report on Form 8-K dated June 25, 2019 and filed with the SEC as of June 28, 2019 (File No. 001-36708))

4.4

 

Indenture, dated as of February 10, 2020, among Uniti Group LP, Uniti Fiber Holdings Inc., Uniti Group Finance 2019 Inc., CSL Capital, LLC, the guarantors named therein, and Deutsche Bank Trust Company Americas, as trustee and collateral agent, governing the 7.875% Senior Secured Notes due 2025 (incorporated by reference to Exhibit 4.1 to the Company’s Current Report on Form 8-K filed with the SEC on February 10, 2020 (File No. 001-36708))

4.5

 

Form of 7.875% Senior Secured Notes due 2025 (included in Exhibit 4.4 above) (incorporated by reference to Exhibit 4.2 to the Company’s Current Report on Form 8-K filed with the SEC on February 10, 2020 (File No. 001-36708))

4.6

 

Indenture, dated February 2, 2021, by and among Uniti Group LP, Uniti Group Finance 2019 Inc. and CSL Capital, LLC, as Issuers, the guarantors party thereto and Deutsche Bank Trust Company Americas, as trustee, governing the 6.500% Senior Notes due 2029 (incorporated by reference to Exhibit 4.1 to the Company’s Current Report on Form 8-K dated and filed with the SEC as of February 2, 2021 (File No. 001-36708))

4.7

 

Form of 6.500% Senior Notes due 2029 (included in Exhibit 4.6) (incorporated by reference to Exhibit 4.2 to the Company’s Current Report on Form 8-K dated and filed with the SEC as of February 2, 2021 (File No. 001-36708))

4.8

 

Indenture, dated as April 20, 2021, by and among Uniti Group LP, Uniti Group Finance 2019 Inc. and CSL Capital, LLC, as issuers, the guarantors party thereto, and Deutsche Bank Trust Company Americas, as trustee and collateral agent, governing the 4.750% Senior Secured Notes due 2028 (incorporated by reference to Exhibit 4.1 to the Company’s Current Report on Form 8-K filed with the SEC on April 20, 2021 (File No. 001-36708))

3


 

Exhibit No.

 

Description

4.9

 

Form of 4.750% Senior Secured Notes due 2028 (included in Exhibit 4.8 above) (incorporated by reference to Exhibit 4.2 to the Company’s Current Report on Form 8-K filed with the SEC on April 20, 2021 (File No. 001-36708))

4.10

 

Indenture, dated October 13, 2021, by and among Uniti Group LP, Uniti Fiber Holdings Inc., Uniti Group Finance 2019 Inc. and CSL Capital, LLC, as Issuers, the guarantors party thereto and Deutsche Bank Trust Company Americas, as trustee, governing the 6.000% Senior Notes due 2030 (incorporated by reference to Exhibit 4.1 to the Company’s Current Report on Form 8-K dated and filed with the SEC as of October 13, 2021 (File No. 001-36708))

4.11

 

Form of 6.000% Senior Notes due 2030 (included in Exhibit 4.10 above) (incorporated by reference to Exhibit 4.2 to the Company’s Current Report on Form 8-K dated and filed with the SEC as of October 13, 2021 (File No. 001-36708))

10.1

 

Settlement Agreement, dated as of May 12, 2020 by and among Windstream Holdings, Inc., Windstream Services, LLC and certain of their subsidiaries, and Uniti Group Inc. and certain of its subsidiaries (incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed with the SEC on May 15, 2020 (File No. 001-36708))

10.2

 

Amended and Restated ILEC Master Lease, entered into as of September 18, 2020, by and between CSL National, LP and the other entities listed therein, as Landlord, and Windstream Holdings II, LLC (as successor in interest to Windstream Holdings, Inc.), Windstream Services II, LLC (as successor in interest to Windstream Services, LLC) and the other entities listed therein, as Tenant (incorporated by reference to Exhibit 10.1 to the Company’s Quarterly Report on Form 10-Q filed with the SEC on November 9, 2020 (File No. 001-36708))

10.3

 

Amended and Restated CLEC Master Lease, entered into as of September 18, 2020, by and between CSL National, LP and the other entities listed therein, as Landlord, and Windstream Holdings II, LLC (as successor in interest to Windstream Holdings, Inc.), Windstream Services II, LLC (as successor in interest to Windstream Services, LLC) and the other entities listed therein, as Tenant (incorporated by reference to Exhibit 10.2 to the Company’s Quarterly Report on Form 10-Q filed with the SEC on November 9, 2020 (File No. 001-36708))

10.4

 

Tax Matters Agreement, entered into as of April 24, 2015, by and among Windstream Holdings, Inc., Windstream Services, LLC and Communications Sales & Leasing, Inc. (incorporated by reference to Exhibit 10.2 to the Company’s Current Report on Form 8-K dated and filed with the SEC as of April 27, 2015 (File No. 001-36708))

10.5

 

Credit Agreement, dated as of April 24, 2015, by and among Communications Sales & Leasing, Inc. and CSL Capital, LLC, as Borrowers, the guarantors party thereto, the lenders party thereto from time to time and Bank of America, N.A., as administrative agent, collateral agent, swing line lender and L/C issuer (incorporated by reference to Exhibit 10.10 to the Company’s Current Report on Form 8-K dated and filed with the SEC as of April 27, 2015 (File No. 001-36708))

10.6

 

Amendment No. 1 to the Credit Agreement, dated as of October 21, 2016 by and among Communications Sales & Leasing, Inc. and CSL Capital, LLC, as borrowers, the guarantors party thereto, the lenders party thereto, and Bank of America, N.A., as administrative agent and collateral agent (incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K dated and filed with the SEC as of October 21, 2016 (File No. 001-36708))

10.7

 

Amendment No. 2 to the Credit Agreement, dated as of February 9, 2017 by and among Communications Sales & Leasing, Inc. and CSL Capital, LLC, as borrowers, the guarantors party thereto, the lenders party thereto, and Bank of America, N.A., as administrative agent and collateral agent (incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K dated and filed with the SEC as of February 9, 2017 (File No. 001-36708))

4


 

Exhibit No.

 

Description

10.8

 

Amendment No. 3 (Incremental Amendment) to the Credit Agreement, dated as of April 28, 2017 by and among Uniti Group Inc. and CSL Capital, LLC, as borrowers, the guarantors party thereto, the lenders party thereto, and Bank of America, N.A., as administrative agent and collateral agent (incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K dated as of May 1, 2017 and filed with the SEC as of May 2, 2017 (File No. 001-36708))

10.9

 

Amendment No. 4 and Limited Waiver to the Credit Agreement, dated as of March 18, 2019, among Uniti Group Inc., as parent guarantor, Uniti Group LP, Uniti Group Finance Inc. and CSL Capital, LLC, as borrowers, the guarantors party thereto, the lenders party thereto, and Bank of America, N.A., as administrative agent and collateral agent (incorporated by reference to Exhibit 10.11 to the Company’s Annual Report on Form 10-K dated and filed with the SEC as of March 18, 2019 (File No. 001-36708))

10.10

 

Amendment No. 5 to the Credit Agreement, dated as of June 24, 2019, among Uniti Group Inc., as parent guarantor, Uniti Group LP, Uniti Group Finance Inc., and CSL Capital, LLC, as borrowers, the guarantors party thereto, the lenders party thereto, and Bank of America, N.A., as administrative agent and collateral agent (incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K dated and filed with the SEC as of June 24, 2019 (File No. 001-36708))

10.11

 

Amendment No. 6 and Limited Waiver to the Credit Agreement, dated as of February 10, 2020, among Uniti Group LP, Uniti Group Finance 2019 Inc. and CSL Capital, LLC, as borrowers, the guarantor party thereto, the lenders party thereto, and Bank of America, N.A., as administrative agent and collateral agent (incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed with the SEC on February 10, 2020 (File No. 001-36708))

10.12

 

Amendment No. 7 to the Credit Agreement, dated as of December 10, 2020, by and among Uniti Group Inc., as parent guarantor, Uniti Group LP, Uniti Group Finance Inc., and CSL Capital, LLC, as borrowers, the guarantors party thereto, the lenders party thereto, and Bank of America, N.A., as administrative agent and collateral agent (incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K dated and filed with the SEC as of December 10, 2020 (File No. 001-36708))

10.13

 

Agreement of Resignation, Appointment and Acceptance, dated as of June 26, 2019, by and among Uniti Group LP, CSL Capital, LLC, Uniti Group Finance, Inc., and Uniti Fiber Holdings, Inc., as Issuers, and Deutsche Bank Trust Company Americas, as successor trustee, and Wells Fargo Bank, N.A., as resigning trustee (incorporated by reference to Exhibit 10.4 to the Company’s Quarterly Report on Form 10-Q dated and filed with the SEC as of August 8, 2019 (File No. 001-36708))

10.14

 

Borrower Assumption Agreement and Joinder, dated as of May 9, 2017 by and among Uniti Group Inc., as initial borrower, Uniti Group LP and Uniti Group Finance Inc., as borrowers, the guarantors party thereto, the lenders party thereto, and Bank of America, N.A., as administrative agent and collateral agent  (incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K dated and filed with the SEC as of May 9, 2017 (File No. 001-36708))

10.15

 

Recognition Agreement, dated April 24, 2015, by and among CSL National, LP and the other entities listed therein, as Landlord, and Windstream Holdings, Inc., as Tenant, and JPMorgan Chase Bank, N.A., as administrative agent and collateral agent (incorporated by reference to Exhibit 10.11 to the Company’s Current Report on Form 8-K dated and filed with the SEC as of April 27, 2015 (File No. 001-36708))

10.16+

 

Employment Agreement between Uniti Group Inc. and Kenneth Gunderman, effective as of December 14, 2018 (incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K dated and filed with the SEC as of December 14, 2018 (File No. 001-36708))

5


 

Exhibit No.

 

Description

10.17+

 

Severance Agreement, dated as of December 30, 2020, by and between Uniti Group Inc. and Daniel L. Heard (incorporated by reference to Exhibit 10.2 to the Company’s Current Report on Form 8-K dated and filed with the SEC as of December 30, 2020 (File No. 001-36708))

10.18+

 

Uniti Group Inc. 2015 Equity Incentive Plan, as amended and restated effective March 28, 2018 (incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K dated and filed with the SEC as of March 29, 2018 (File No. 001-36708))

10.19+

 

Form of Restricted Shares Agreement for employees (incorporated by reference to Exhibit 10.3 to the Company’s Current Report on Form 8-K dated and filed with the SEC as of June 3, 2015 (File No. 001-36708))

10.20+

 

Form of Restricted Shares Agreement for employees (incorporated by reference to Exhibit 10.19 to the Company’s Annual Report on Form 10-K dated and filed with the SEC as of March 18, 2019 (File No. 001-36708))

10.21+

 

Form of Performance-Based Restricted Stock Unit Agreement (incorporated by reference to Exhibit 10.4 to the Company’s Current Report on Form 8-K dated and filed with the SEC as of June 3, 2015 (File No. 001-36708))

10.22+

 

Form of Performance-Based Restricted Stock Unit Agreement (incorporated by reference to Exhibit 10.21 to the Company’s Annual Report on Form 10-K dated and filed with the SEC as of March 18, 2019 (File No. 001-36708))

10.23+

 

Form of Restricted Shares Agreement for non-employee directors (incorporated by reference to Exhibit 10.5 to the Company’s Current Report on Form 8-K dated and filed with the SEC as of June 3, 2015 (File No. 001-36708))

10.24+

 

Form of Indemnity Agreement (incorporated by reference to Exhibit 10.20 to the Company’s Registration Statement on Form S-4 dated and filed with the SEC as of July 2, 2015 (File No. 333-205450))

10.25+

 

Communications Sales & Leasing, Inc. Deferred Compensation Plan, effective August 10, 2015 (incorporated by reference to Exhibit 10.20 to the Company’s Quarterly Report on Form 10-Q dated and filed with the SEC as of August 13, 2015 (File No. 001-36708))

10.26+

 

Uniti Group Inc. Amended and Restated Employee Stock Purchase Plan (incorporated by reference to Exhibit 99.1 to the Company’s Registration Statement on Form S-8 dated and filed with the SEC as of June 7, 2018 (File No. 333-225501))

10.27+

 

Uniti Group Inc. Annual Short-Term Incentive Plan (incorporated by reference to Exhibit 10.2 to the Company’s Quarterly Report on Form 10-Q dated and filed with the SEC as of May 11, 2020 (File No. 001-36708))

21.1#

 

List of Subsidiaries of Uniti Group Inc.

23.1#

 

Consent of KPMG LLP, independent registered public accounting firm

23.2#

 

Consent of PricewaterhouseCoopers LLP, independent registered public accounting firm

23.3*

 

Consent of PricewaterhouseCoopers LLP, independent registered public accounting firm of Windstream Holdings, Inc.

23.4*

 

Consent of PricewaterhouseCoopers LLP, independent registered public accounting firm of Windstream Holdings II, LLC

6


 

Exhibit No.

 

Description

31.1#

 

Certification of Principal Executive Officer Pursuant to Rules 13a-14(a) and 15d-14(a) under the Securities Exchange Act of 1934, as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

31.2#

 

Certification of Principal Financial Officer Pursuant to Rules 13a-14(a) and 15d-14(a) under the Securities Exchange Act of 1934, as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

31.3*

 

Certification of Principal Executive Officer Pursuant to Rules 13a-14(a) and 15d-14(a) under the Securities Exchange Act of 1934, as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

31.4*

 

Certification of Principal Financial Officer Pursuant to Rules 13a-14(a) and 15d-14(a) under the Securities Exchange Act of 1934, as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

32.1#

 

Certification of Principal Executive Officer Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

32.2#

 

Certification of Principal Financial Officer Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

32.3*

 

Certification of Principal Executive Officer Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

32.4*

 

Certification of Principal Financial Officer Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

99.1*

 

Financial Statements of Windstream Holdings, Inc., Windstream Holding II, LLC, its successor in interest, and consolidated subsidiaries

101.INS#

 

Inline XBRL Instance Document – the instance document does not appear in the Interactive Data File because XBRL tags are embedded within the Inline XBRL document.

101.SCH#

 

Inline XBRL Taxonomy Extension Schema Document

101.CAL#

 

Inline XBRL Taxonomy Extension Calculation Linkbase Document

101.DEF#

 

Inline XBRL Taxonomy Extension Definition Linkbase Document

101.LAB#

 

Inline XBRL Taxonomy Extension Label Linkbase Document

101.PRE#

 

Inline XBRL Taxonomy Extension Presentation Linkbase Document

104

 

Cover Page Interactive Data File (embedded within the Inline XBRL document)

 

*

Filed herewith

**

Certain portions of this exhibit have been omitted pursuant to a request for confidential treatment granted by, and have been filed separately with, the Securities and Exchange Commission. Also, certain exhibits and schedules to this exhibit have been omitted pursuant to Item 601(b)(2) of Regulation S-K. The Company agrees to furnish a supplemental copy of any such omitted exhibit or schedule to the Securities and Exchange Commission upon request but may request confidential treatment for any exhibit or schedule so furnished.

+

Constitutes a management contract or compensation plan or arrangement.

#

Incorporated by reference to the corresponding exhibit to the Original 10-K.

7


 

 

SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

 

 

 

UNITI GROUP INC.

 

 

 

 

Date: March 22, 2022

 

By:

/s/ Kenneth A. Gunderman

 

 

 

Kenneth A. Gunderman

 

 

 

President and Chief Executive Officer

 

 

 

 

 

 

 

8

unit-ex233_10.htm

Exhibit 23.3

CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

We hereby consent to the incorporation by reference in the Registration Statements on Form S-3 (No. 333-237139) and Form S-8 (Nos. 333‑203591 and No. 333-225501) of Uniti Group Inc. of our report dated March 11, 2022 relating to the financial statements of Windstream Holdings, Inc., which appears in this Form 10-K/A of Uniti Group Inc.



/s/ PricewaterhouseCoopers LLP
Little Rock, Arkansas
March 22, 2022

 

 

 

 

unit-ex234_221.htm

Exhibit 23.4

CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

We hereby consent to the incorporation by reference in the Registration Statements on Form S-3 (No. 333-237139) and Form S-8 (Nos. 333‑203591 and No. 333-225501) of Uniti Group Inc. of our report dated March 11, 2022 relating to the financial statements of Windstream Holdings II, LLC, which appears in this Form 10-K/A of Uniti Group Inc.



/s/ PricewaterhouseCoopers LLP
Little Rock, Arkansas
March 22, 2022

 

 

unit-ex313_9.htm

 

Exhibit 31.3

CERTIFICATION PURSUANT TO

RULES 13a-14(a) AND 15d-14(a) UNDER THE SECURITIES EXCHANGE ACT OF 1934,

AS ADOPTED PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

I, Kenneth A. Gunderman, certify that:

1.

I have reviewed this Annual Report on Form 10-K/A of Uniti Group Inc.;

2.

Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; and

3.

Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant, as of, and for, the periods presented in this report.

 

 

Date: March 22, 2022

 

By:

/s/ Kenneth A. Gunderman

 

 

 

Kenneth A. Gunderman

 

 

 

President and Chief Executive Officer

 

 

unit-ex314_8.htm

 

Exhibit 31.4

CERTIFICATION PURSUANT TO

RULES 13a-14(a) AND 15d-14(a) UNDER THE SECURITIES EXCHANGE ACT OF 1934,

AS ADOPTED PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

I, Paul E. Bullington, certify that:

1.

I have reviewed this Annual Report on Form 10-K/A of Uniti Group Inc.;

2.

Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; and

3.

Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant, as of, and for, the periods presented in this report.

 

 

Date: March 22, 2022

 

By:

/s/ Paul E. Bullington

 

 

 

Paul E. Bullington

 

 

 

Senior Vice President – Chief Financial Officer

 

 

 

and Treasurer

 

 

unit-ex323_7.htm

 

Exhibit 32.3

CERTIFICATION PURSUANT TO

18 U.S.C. SECTION 1350, AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Annual Report on Form 10-K/A of Uniti Group Inc. (the “Company”) for the period ending December 31, 2021 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I certify, pursuant to 18 U.S.C. § 1350, as adopted pursuant to § 906 of the Sarbanes-Oxley Act of 2002, to my knowledge, that:

 

(1)

The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

 

(2)

The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

 

Date: March 22, 2022

 

By:

/s/ Kenneth A. Gunderman

 

 

 

Kenneth A. Gunderman

 

 

 

President and Chief Executive Officer

 

 

unit-ex324_6.htm

 

Exhibit 32.4

CERTIFICATION PURSUANT TO

18 U.S.C. SECTION 1350, AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Annual Report on Form 10-K/A of Uniti Group Inc. (the “Company”) for the period ending December 31, 2021 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I certify, pursuant to 18 U.S.C. § 1350, as adopted pursuant to § 906 of the Sarbanes-Oxley Act of 2002, to my knowledge, that:

 

(1)

The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

 

(2)

The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

 

Date: March 22, 2022

 

By:

/s/ Paul E. Bullington

 

 

 

Paul E. Bullington

 

 

 

Senior Vice President – Chief Financial Officer

 

 

 

and Treasurer

 

 

unit-ex991_173.htm

 

Exhibit 99.1

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Windstream Holdings II, LLC

Consolidated Financial Information

For the period ended December 31, 2021

 

 

 

 


 

 

 

Windstream Holdings II, LLC (Successor)
Windstream Holdings, Inc. (Predecessor)

 

Table of Contents

 

 

 

Page No.

 

 

 

Report of Independent Auditors

 

F-1

Report of Independent Registered Public Accounting Firm

 

F-3

 

 

 

Consolidated Financial Statements:

 

 

Consolidated Statements of Operations

 

F-4

Consolidated Statements of Comprehensive Income (Loss)

 

F-5

Consolidated Balance Sheets

 

F-6

Consolidated Statements of Cash Flows

 

F-7

Consolidated Statements of Equity (Deficit)

 

F-8

Notes to Consolidated Financial Statements

 

F-9

 

 

 

 

 

 

 


 

 

Report of Independent Auditors

 

 

To the Board of Managers of Windstream Holdings II, LLC

 

Opinion

 

We have audited the accompanying consolidated financial statements of Windstream Holdings II, LLC and its subsidiaries (Successor or the “Company”), which comprise the consolidated balance sheets as of December 31, 2021 and 2020, and the related consolidated statements of operations, comprehensive income (loss), equity (deficit) and cash flows for the year ended December 31, 2021 and for the period from September 22, 2020 through December 31, 2020, including the related notes (collectively referred to as the “consolidated financial statements”).

 

In our opinion, the accompanying consolidated financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2021 and 2020, and the results of its operations and its cash flows for the year ended December 31, 2021 and for the period from September 22, 2020 through December 31, 2020 in accordance with accounting principles generally accepted in the United States of America.

 

Basis for Opinion

 

We conducted our audit in accordance with auditing standards generally accepted in the United States of America (US GAAS). Our responsibilities under those standards are further described in the Auditors’ Responsibilities for the Audit of the Consolidated Financial Statements section of our report. We are required to be independent of the Company and to meet our other ethical responsibilities, in accordance with the relevant ethical requirements relating to our audit. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.

 

Emphasis of Matter

 

As discussed in Note 1 to the consolidated financial statements, on June 26, 2020, the United States Bankruptcy Court for the Southern District of New York approved and confirmed the First Amended Joint Chapter 11 Plan of Reorganization (the "plan") of Windstream Holdings, Inc., et al. filed by Windstream Holdings, Inc. and all of its subsidiaries, including Windstream Services, LLC (collectively the “Debtors”). Confirmation of the plan resulted in the discharge of substantially all of the claims against the Debtors that arose before February 25, 2019 and terminates all rights and interests of equity security holders as provided for in the plan. Pursuant to the plan, the Debtors were reorganized and Windstream Holdings II, LLC was formed and became the new parent company. The plan was substantially consummated on September 21, 2020 and the Debtors emerged from bankruptcy. In connection with their emergence from bankruptcy, the Debtors adopted fresh start accounting as of September 21, 2020. Our opinion is not modified with respect to this matter.

 

Responsibilities of Management for the Consolidated Financial Statements

 

Management is responsible for the preparation and fair presentation of the consolidated financial statements in accordance with accounting principles generally accepted in the United States of America; and for the design, implementation, and maintenance of internal control relevant to the preparation and fair presentation of consolidated financial statements that are free from material misstatement, whether due to fraud or error.

 

In preparing the financial statements, management is required to evaluate whether there are conditions or events, considered in the aggregate, that raise substantial doubt about the Company’s ability to continue as a going concern for one year after the date the financial statements are available to be issued.

 

Auditors’ Responsibilities for the Audit of the Consolidated Financial Statements

 

Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditors’ report that includes our opinion. Reasonable assurance is a high level of assurance but is not absolute assurance and therefore is not a guarantee

 

F-1


 

that an audit conducted in accordance with US GAAS will always detect a material misstatement when it exists. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control. Misstatements are considered material if there is a substantial likelihood that, individually or in the aggregate, they would influence the judgment made by a reasonable user based on the financial statements.

 

In performing an audit in accordance with US GAAS, we:

 

 

Exercise professional judgment and maintain professional skepticism throughout the audit.

 

Identify and assess the risks of material misstatement of the consolidated financial statements, whether due to fraud or error, and design and perform audit procedures responsive to those risks. Such procedures include examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated financial statements.

 

Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company's internal control. Accordingly, no such opinion is expressed.

 

Evaluate the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluate the overall presentation of the consolidated financial statements.

 

Conclude whether, in our judgment, there are conditions or events, considered in the aggregate, that raise substantial doubt about the Company’s ability to continue as a going concern for a reasonable period of time.

 

We are required to communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit, significant audit findings, and certain internal control-related matters that we identified during the audit.

 

Other Information

 

Management is responsible for the other information included in the annual report. The other information comprises “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and “Risk Factors Related to Our Business”, but does not include the consolidated financial statements and our auditors' reports thereon. Our opinion on the consolidated financial statements does not cover the other information, and we do not express an opinion or any form of assurance thereon.

 

In connection with our audit of the consolidated financial statements, our responsibility is to read the other information and consider whether a material inconsistency exists between the other information and the consolidated financial statements or the other information otherwise appears to be materially misstated. If, based on the work performed, we conclude that an uncorrected material misstatement of the other information exists, we are required to describe it in our report.

 

 

 

/s/ PricewaterhouseCoopers LLP

Little Rock, Arkansas

March 11, 2022

 

F-2


 

Report of Independent Registered Public Accounting Firm

 

 

To the Board of Directors and Shareholders of Windstream Holdings, Inc.

 

Opinion on the Financial Statements

 

We have audited the accompanying consolidated statements of operations, comprehensive income (loss), equity (deficit) and cash flows of Windstream Holdings, Inc. and its subsidiaries (“Predecessor” or “Old Holdings”) for the period from January 1, 2020 through September 21, 2020, and for the year ended December 31, 2019, including the related notes (collectively referred to as the “consolidated financial statements”). In our opinion, the consolidated financial statements present fairly, in all material respects, the results of operations and cash flows of Old Holdings for the period from January 1, 2020 through September 21, 2020, and for the year ended December 31, 2019 in conformity with accounting principles generally accepted in the United States of America.

 

Basis of Accounting

 

As discussed in Note 1 to the consolidated financial statements, Old Holdings and all of its subsidiaries, including Old Services (collectively, the “Debtors”) filed a petition on February 25, 2019 with the United States Bankruptcy Court for the Southern District of New York for reorganization under the provisions of Chapter 11 of the Bankruptcy Code. The First Amended Joint Chapter 11 Plan of Reorganization of Windstream Holdings, Inc., et al. (the “plan”) was substantially consummated on September 21, 2020 and the Debtors emerged from bankruptcy. In connection with their emergence from bankruptcy, the Debtors adopted fresh start accounting.

 

Change in Accounting Principle

 

As discussed in Note 2 to the consolidated financial statements, Old Holdings changed the manner in which it accounts for leases in 2019.

 

Basis for Opinion

 

These consolidated financial statements are the responsibility of Old Holdings’ management. Our responsibility is to express an opinion on the Old Holdings’ consolidated financial statements based on our audit. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to Old Holdings in accordance with the relevant ethical requirements relating to our audit, which include standards of the American Institute of Certified Public Accountants (AICPA) Code of Professional Conduct.

 

We conducted our audits of these consolidated financial statements in accordance with the auditing standards of the PCAOB and in accordance with auditing standards generally accepted in the United States of America. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement, whether due to error or fraud.

 

Our audits included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements. We believe that our audits provide a reasonable basis for our opinion.

 

 

/s/ PricewaterhouseCoopers LLP

Little Rock, Arkansas

March 26, 2021

 

We have served as the Company's auditor since 2006.

 

F-3


 

WINDSTREAM HOLDINGS II, LLC (Successor)

WINDSTREAM HOLDINGS, INC. (Predecessor)

CONSOLIDATED STATEMENTS OF OPERATIONS

 

 

Successor

 

 

Predecessor

(Millions)

Year Ended
December 31, 2021

 

Period from
September 22, 2020
through
December 31, 2020

 

 

Period from
January 1, 2020
through
September 21, 2020

 

Year Ended
December 31, 2019

 

 

 

Revenues and sales:

 

 

 

 

 

 

 

 

Service revenues

$

4,355.8 

 

 

$

1,244.0 

 

 

 

$

3,368.9 

 

 

$

5,023.6 

 

Sales revenues

63.1 

 

 

17.4 

 

 

 

58.6 

 

 

91.8 

 

Total revenues and sales

4,418.9 

 

 

1,261.4 

 

 

 

3,427.5 

 

 

5,115.4 

 

Costs and expenses:

 

 

 

 

 

 

 

 

Cost of services

2,765.0 

 

 

797.3 

 

 

 

2,202.5 

 

 

3,341.3 

 

Cost of sales

64.1 

 

 

17.7 

 

 

 

60.7 

 

 

77.6 

 

Selling, general and administrative

638.9 

 

 

182.8 

 

 

 

492.1 

 

 

756.7 

 

Depreciation and amortization

751.5 

 

 

183.1 

 

 

 

646.3 

 

 

1,068.2 

 

Goodwill impairment

— 

 

 

— 

 

 

 

— 

 

 

2,712.3 

 

Loss on retirements of property, plant
   and equipment

35.6 

 

 

— 

 

 

 

— 

 

 

— 

 

Restructuring and other charges

7.2 

 

 

2.7 

 

 

 

16.3 

 

 

36.8 

 

Total costs and expenses

4,262.3 

 

 

1,183.6 

 

 

 

3,417.9 

 

 

7,992.9 

 

Operating income (loss)

156.6 

 

 

77.8 

 

 

 

9.6 

 

 

(2,877.5)

 

Other income (expense), net

47.9 

 

 

44.9 

 

 

 

13.0 

 

 

(7.8)

 

Gain on early extinguishment of debt

10.2 

 

 

— 

 

 

 

— 

 

 

— 

 

Reorganization items, net

— 

 

 

— 

 

 

 

2,518.4 

 

 

(260.6)

 

Interest expense

(175.8)

 

 

(57.1)

 

 

 

(198.9)

 

 

(331.9)

 

Income (loss) before income taxes

38.9 

 

 

65.6 

 

 

 

2,342.1 

 

 

(3,477.8)

 

Income tax (expense) benefit

(21.5)

 

 

(18.4)

 

 

 

(244.8)

 

 

320.0 

 

Net income (loss)

$

17.4 

 

 

$

47.2 

 

 

 

$

2,097.3 

 

 

$

(3,157.8)

 

 

The accompanying notes are an integral part of these consolidated financial statements.

 

F-4


 

WINDSTREAM HOLDINGS II, LLC (Successor)

WINDSTREAM HOLDINGS, INC. (Predecessor)

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Successor

 

 

Predecessor

(Millions)

 

Year Ended
December 31, 2021

 

Period from
September 22, 2020
through
December 31, 2020

 

 

Period from
January 1, 2020
through
September 21, 2020

 

Year Ended
December 31, 2019

 

 

 

 

Net income (loss)

 

$

17.4 

 

 

$

47.2 

 

 

 

$

2,097.3 

 

 

$

(3,157.8)

 

Other comprehensive income (loss):

 

 

 

 

 

 

 

 

 

Interest rate swaps:

 

 

 

 

 

 

 

 

 

Unrealized gains (losses) on
   designated interest rate swaps

 

5.6 

 

 

(0.2)

 

 

 

— 

 

 

(3.2)

 

Amortization of net unrealized
   gains on de-designated
   interest rate swaps

 

— 

 

 

— 

 

 

 

(9.5)

 

 

(10.6)

 

Elimination of Predecessor
   accumulated other
   comprehensive income

 

— 

 

 

— 

 

 

 

(14.1)

 

 

— 

 

Income tax (expense) benefit

 

(1.4)

 

 

— 

 

 

 

6.0 

 

 

3.5 

 

Change in interest rate swaps

 

4.2 

 

 

(0.2)

 

 

 

(17.6)

 

 

(10.3)

 

Pension and postretirement plans:

 

 

 

 

 

 

 

 

 

Prior service credit recorded during
   the period

 

8.2 

 

 

— 

 

 

 

— 

 

 

0.3 

 

Net actuarial gain (loss) recorded
   during the period

 

6.3 

 

 

(0.4)

 

 

 

(1.0)

 

 

(2.7)

 

Plan curtailments and settlements

 

— 

 

 

— 

 

 

 

— 

 

 

0.1 

 

Amounts included in net periodic
   benefit cost:

 

 

 

 

 

 

 

 

 

Amortization of net actuarial
   (gain) loss

 

(0.4)

 

 

— 

 

 

 

0.1 

 

 

— 

 

Amortization of prior service
   credits

 

(0.3)

 

 

— 

 

 

 

(0.9)

 

 

(1.3)

 

Income tax (expense) benefit

 

(3.4)

 

 

— 

 

 

 

0.4 

 

 

0.9 

 

Net periodic benefit cost

 

(4.1)

 

 

— 

 

 

 

(0.4)

 

 

(0.4)

 

Elimination of Predecessor
   accumulated other
   comprehensive income

 

— 

 

 

— 

 

 

 

(4.7)

 

 

— 

 

Income tax benefit

 

— 

 

 

0.1 

 

 

 

1.1 

 

 

— 

 

Change in pension and
   postretirement plans

 

10.4 

 

 

(0.3)

 

 

 

(5.0)

 

 

(2.7)

 

Other comprehensive income (loss)

 

14.6 

 

 

(0.5)

 

 

 

(22.6)

 

 

(13.0)

 

Comprehensive income (loss)

 

$

32.0 

 

 

$

46.7 

 

 

 

$

2,074.7 

 

 

$

(3,170.8)

 

 

The accompanying notes are an integral part of these consolidated financial statements.

 

F-5


 

WINDSTREAM HOLDINGS II, LLC (Successor)

CONSOLIDATED BALANCE SHEETS

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(Millions, except par value)

 

December 31,
2021

 

December 31,
2020

Assets

 

 

 

 

Current Assets:

 

 

 

 

Cash and cash equivalents

 

$

285.5 

 

 

$

141.9 

 

Restricted cash

 

5.3 

 

 

5.3 

 

Accounts receivable, net of allowance $14.0 and $11.0, respectively

 

366.3 

 

 

441.3 

 

Inventories

 

146.8 

 

 

77.0 

 

Prepaid expenses and other

 

154.4 

 

 

130.1 

 

Total current assets

 

958.3 

 

 

795.6 

 

Intangible assets, net

 

439.4 

 

 

592.3 

 

Property, plant and equipment, net

 

3,729.5 

 

 

3,577.9 

 

Operating lease right-of-use assets

 

4,206.4 

 

 

4,394.5 

 

Other assets

 

103.0 

 

 

60.8 

 

Total Assets

 

$

9,436.6 

 

 

$

9,421.1 

 

Liabilities and Equity

 

 

 

 

Current Liabilities:

 

 

 

 

Current portion of long-term debt

 

$

7.5 

 

 

$

7.5 

 

Current portion of operating lease obligations

 

452.4 

 

 

322.9 

 

Accounts payable

 

162.8 

 

 

191.8 

 

Advance payments

 

140.1 

 

 

137.7 

 

Accrued taxes

 

61.6 

 

 

62.8 

 

Accrued interest

 

41.3 

 

 

39.4 

 

Other current liabilities

 

332.9 

 

 

273.1 

 

Total current liabilities

 

1,198.6 

 

 

1,035.2 

 

Long-term debt

 

2,087.9 

 

 

2,102.1 

 

Long-term operating lease obligations

 

3,936.8 

 

 

4,085.7 

 

Deferred income taxes

 

342.1 

 

 

325.7 

 

Other liabilities

 

321.2 

 

 

360.9 

 

Total liabilities

 

7,886.6 

 

 

7,909.6 

 

Commitments and Contingencies (See Note 17)

 

 

 

 

Equity:

 

 

 

 

Equity units

 

1,463.0 

 

 

1,463.0 

 

Additional paid-in capital

 

8.3 

 

 

1.8 

 

Accumulated other comprehensive income (loss)

 

14.1 

 

 

(0.5)

 

Retained earnings

 

64.6 

 

 

47.2 

 

Total equity

 

1,550.0 

 

 

1,511.5 

 

Total Liabilities and Equity

 

$

9,436.6 

 

 

$

9,421.1 

 

 

The accompanying notes are an integral part of these consolidated financial statements.

 

F-6


 

WINDSTREAM HOLDINGS II, LLC (Successor)

WINDSTREAM HOLDINGS, INC. (Predecessor)

CONSOLIDATED STATEMENTS OF CASH FLOWS

 

 

Successor

 

 

Predecessor

(Millions)

 

Year Ended
December 31, 2021

 

Period from
September 22, 2020
through
December 31, 2020

 

 

Period from
January 1, 2020
through
September 21, 2020

 

Year Ended
December 31, 2019

 

 

 

 

 

Cash Flows from Operating Activities:

 

 

 

 

 

 

 

 

 

Net income (loss)

 

$

17.4 

 

 

$

47.2 

 

 

 

$

2,097.3 

 

 

$

(3,157.8)

 

Adjustments to reconcile net income (loss) to net cash provided   from operations:

 

 

 

 

 

 

 

 

 

Depreciation and amortization

 

751.5 

 

 

183.1 

 

 

 

646.3 

 

 

1,068.2 

 

Allowance for credit losses

 

22.9 

 

 

9.6 

 

 

 

18.8 

 

 

65.2 

 

Non-cash reorganization items, net

 

— 

 

 

— 

 

 

 

(2,740.0)

 

 

48.7 

 

Deferred income taxes

 

11.6 

 

 

15.4 

 

 

 

245.6 

 

 

(319.6)

 

Loss on retirements of property, plant and equipment

 

35.6 

 

 

— 

 

 

 

— 

 

 

— 

 

Gain on early extinguishment of debt

 

(10.2)

 

 

— 

 

 

 

— 

 

 

— 

 

Goodwill impairment

 

— 

 

 

— 

 

 

 

— 

 

 

2,712.3 

 

Pension (income) expense

 

(46.1)

 

 

(43.3)

 

 

 

(10.1)

 

 

3.0 

 

DIP Facilities issuance costs expensed

 

— 

 

 

— 

 

 

 

— 

 

 

24.4 

 

Other, net

 

15.3 

 

 

4.9 

 

 

 

(7.2)

 

 

8.4 

 

Changes in operating assets and liabilities, net

 

 

 

 

 

 

 

 

 

Accounts receivable

 

51.5 

 

 

3.6 

 

 

 

50.0 

 

 

(33.1)

 

Inventories

 

(71.9)

 

 

(7.4)

 

 

 

(10.7)

 

 

11.6 

 

Prepaid expenses and other

 

(33.7)

 

 

41.0 

 

 

 

(43.1)

 

 

(61.1)

 

Income tax receivable

 

9.7 

 

 

— 

 

 

 

— 

 

 

6.0 

 

Accounts payable

 

(35.4)

 

 

(12.8)

 

 

 

(337.2)

 

 

172.8 

 

Accrued interest

 

1.8 

 

 

39.3 

 

 

 

(1.1)

 

 

(11.6)

 

Accrued taxes

 

(1.2)

 

 

(14.6)

 

 

 

14.1 

 

 

3.4 

 

Other current liabilities

 

(8.6)

 

 

37.1 

 

 

 

(114.0)

 

 

48.6 

 

Other liabilities

 

20.2 

 

 

(27.5)

 

 

 

39.8 

 

 

(42.8)

 

Operating lease assets and lease obligations

 

168.7 

 

 

16.2 

 

 

 

9.0 

 

 

(0.8)

 

Other, net

 

(35.5)

 

 

(11.5)

 

 

 

(9.2)

 

 

(12.0)

 

Net cash provided from (used in) operating activities

 

863.6 

 

 

280.3 

 

 

 

(151.7)

 

 

533.8 

 

Cash Flows from Investing Activities:

 

 

 

 

 

 

 

 

 

Additions to property, plant and equipment

 

(962.8)

 

 

(298.7)

 

 

 

(722.8)

 

 

(878.5)

 

Proceeds from sale of assets to Uniti

 

— 

 

 

— 

 

 

 

230.1 

 

 

— 

 

Uniti funding of growth capital expenditures

 

221.5 

 

 

84.7 

 

 

 

— 

 

 

— 

 

Grant funds received for broadband expansion

 

50.9 

 

 

7.9 

 

 

 

— 

 

 

— 

 

Capital expenditures funded by government grants

 

(11.5)

 

 

(6.7)

 

 

 

— 

 

 

— 

 

Purchase of FCC spectrum licenses

 

— 

 

 

(24.3)

 

 

 

(27.9)

 

 

(26.6)

 

Other, net

 

1.7 

 

 

— 

 

 

 

(1.6)

 

 

1.7 

 

Net cash used in investing activities

 

(700.2)

 

 

(237.1)

 

 

 

(522.2)

 

 

(903.4)

 

Cash Flows from Financing Activities:

 

 

 

 

 

 

 

 

 

Proceeds from rights offering

 

— 

 

 

— 

 

 

 

750.0 

 

 

— 

 

Proceeds from IRU contract with Uniti

 

— 

 

 

— 

 

 

 

15.7 

 

 

— 

 

Repayments of debt and swaps

 

(7.5)

 

 

(5.8)

 

 

 

(2,533.4)

 

 

(372.4)

 

Proceeds from debt issuance

 

— 

 

 

— 

 

 

 

2,420.0 

 

 

655.0 

 

Debt issuance costs

 

— 

 

 

— 

 

 

 

(47.1)

 

 

(24.4)

 

Payments under finance leases

 

(10.6)

 

 

(3.2)

 

 

 

(17.3)

 

 

(49.3)

 

Other, net

 

(1.7)

 

 

(0.2)

 

 

 

(0.4)

 

 

(0.7)

 

Net cash (used in) provided from financing activities

 

(19.8)

 

 

(9.2)

 

 

 

587.5 

 

 

208.2 

 

Increase (decrease) in cash, cash equivalents and restricted cash

 

143.6 

 

 

34.0 

 

 

 

(86.4)

 

 

(161.4)

 

Cash, Cash Equivalents and Restricted Cash:

 

 

 

 

 

 

 

 

 

Beginning of period

 

147.2 

 

 

113.2 

 

 

 

199.6 

 

 

361.0 

 

End of period

 

$

290.8 

 

 

$

147.2 

 

 

 

$

113.2 

 

 

$

199.6 

 

 

The accompanying notes are an integral part of these consolidated financial statements.

 

F-7


 

WINDSTREAM HOLDINGS II, LLC (Successor)

WINDSTREAM HOLDINGS, INC. (Predecessor)

CONSOLIDATED STATEMENTS OF EQUITY (DEFICIT)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(Millions)

 

Common Stock (Predecessor)
Equity Units (Successor)

 

Additional
Paid-In
Capital

 

Accumulated
Other
Comprehensive
Income

 

Retained Earnings (Accumulated Deficit)

 

Total

Predecessor:

 

 

 

 

 

 

 

 

 

 

Balance at December 31, 2018

 

$

— 

 

 

$

1,250.4 

 

 

$

35.6 

 

 

$

(3,205.3)

 

 

$

(1,919.3)

 

Cumulative effect adjustment, net of tax:

 

 

 

 

 

 

 

 

 

 

Adoption of ASC 842

 

— 

 

 

— 

 

 

— 

 

 

3,013.0 

 

 

3,013.0 

 

Net loss

 

— 

 

 

— 

 

 

— 

 

 

(3,157.8)

 

 

(3,157.8)

 

Other comprehensive loss, net of tax:

 

 

 

 

 

 

 

 

 

 

Change in pension and postretirement plans

 

— 

 

 

— 

 

 

(2.7)

 

 

— 

 

 

(2.7)

 

Amortization of net unrealized gains on
   de-designated interest rate swaps

 

— 

 

 

— 

 

 

(7.9)

 

 

— 

 

 

(7.9)

 

Changes in designated interest rate swaps

 

— 

 

 

— 

 

 

(2.4)

 

 

— 

 

 

(2.4)

 

Comprehensive loss

 

— 

 

 

— 

 

 

(13.0)

 

 

(3,157.8)

 

 

(3,170.8)

 

Share-based compensation

 

— 

 

 

2.9 

 

 

— 

 

 

— 

 

 

2.9 

 

Other

 

— 

 

 

(0.2)

 

 

— 

 

 

— 

 

 

(0.2)

 

Balance at December 31, 2019

 

$

— 

 

 

$

1,253.1 

 

 

$

22.6 

 

 

$

(3,350.1)

 

 

$

(2,074.4)

 

Cumulative effect adjustment, net of tax:

 

 

 

 

 

 

 

 

 

 

Adoption of ASC 326

 

— 

 

 

— 

 

 

— 

 

 

(1.8)

 

 

(1.8)

 

Net income

 

— 

 

 

— 

 

 

— 

 

 

2,097.3 

 

 

2,097.3 

 

Other comprehensive (loss) income, net of tax:

 

 

 

 

 

 

 

 

 

 

Change in pension and postretirement plans

 

— 

 

 

— 

 

 

(1.4)

 

 

— 

 

 

(1.4)

 

Amortization of net unrealized gains
   on de-designated interest rate swaps

 

— 

 

 

— 

 

 

(7.1)

 

 

— 

 

 

(7.1)

 

Elimination of Predecessor accumulated other
   comprehensive income

 

— 

 

 

— 

 

 

(14.1)

 

 

— 

 

 

(14.1)

 

Comprehensive (loss) income

 

— 

 

 

— 

 

 

(22.6)

 

 

2,097.3 

 

 

2,074.7 

 

Share-based compensation

 

— 

 

 

1.4 

 

 

— 

 

 

— 

 

 

1.4 

 

Other

 

— 

 

 

0.1 

 

 

— 

 

 

— 

 

 

0.1 

 

Cancellation of Predecessor equity

 

— 

 

 

(1,254.6)

 

 

— 

 

 

1,254.6 

 

 

— 

 

Issuance of Successor equity units

 

1,463.0 

 

 

— 

 

 

— 

 

 

— 

 

 

1,463.0 

 

Balance at September 21, 2020

 

$

1,463.0 

 

 

$

— 

 

 

$

— 

 

 

$

— 

 

 

$

1,463.0 

 

Successor:

 

 

 

 

 

 

 

 

 

 

Balance at September 22, 2020

 

$

1,463.0 

 

 

$

— 

 

 

$

— 

 

 

$

— 

 

 

$

1,463.0 

 

Net income

 

— 

 

 

— 

 

 

— 

 

 

47.2 

 

 

47.2 

 

Other comprehensive (loss) income, net of tax:

 

 

 

 

 

 

 

 

 

 

Change in postretirement plan

 

— 

 

 

— 

 

 

(0.3)

 

 

— 

 

 

(0.3)

 

Changes in designated interest rate swaps

 

— 

 

 

— 

 

 

(0.2)

 

 

— 

 

 

(0.2)

 

Comprehensive (loss) income

 

— 

 

 

— 

 

 

(0.5)

 

 

47.2 

 

 

46.7 

 

Equity-based compensation

 

— 

 

 

1.8 

 

 

— 

 

 

— 

 

 

1.8 

 

Balance at December 31, 2020

 

$

1,463.0 

 

 

$

1.8 

 

 

$

(0.5)

 

 

$

47.2 

 

 

$

1,511.5 

 

Net income

 

— 

 

 

— 

 

 

— 

 

 

17.4 

 

 

17.4 

 

Other comprehensive income, net of tax:

 

 

 

 

 

 

 

 

 

 

Change in postretirement plan

 

— 

 

 

— 

 

 

10.4 

 

 

— 

 

 

10.4 

 

Change in designated interest rate swaps

 

— 

 

 

— 

 

 

4.2 

 

 

— 

 

 

4.2 

 

Comprehensive income

 

— 

 

 

— 

 

 

14.6 

 

 

17.4 

 

 

32.0 

 

Equity-based compensation

 

— 

 

 

6.5 

 

 

— 

 

 

— 

 

 

6.5 

 

Balance at December 31, 2021

 

$

1,463.0 

 

 

$

8.3 

 

 

$

14.1 

 

 

$

64.6 

 

 

$

1,550.0 

 

 

The accompanying notes are an integral part of these consolidated financial statements.

 

 

 

F-8


WINDSTREAM HOLDINGS II, LLC (Successor)

WINDSTREAM HOLDINGS, INC. (Predecessor)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

 

 

1. Background and Basis of Presentation:

 

Organizational Structure – Windstream Holdings II, LLC (“Holdings II”), is a Delaware limited liability company that was formed and became the successor entity through acquiring the net assets of Windstream Holdings, Inc. (“Old Holdings”) upon the emergence of Old Holdings and all of its subsidiaries from bankruptcy, as further discussed below. Holdings II, together with its consolidated subsidiaries, (collectively, “Windstream”, “the Company,” “we,” or “our”), is a privately held communications and software company with no publicly registered debt or equity securities. Windstream Services II, LLC (“Win Services” or “Borrower”) is a wholly owned subsidiary of Holdings II. Effective January 1, 2021, the legal name of Win Services was changed to Windstream Services, LLC.

 

Old Holdings was a publicly traded holding company incorporated in the state of Delaware and the parent of Windstream Services, LLC (“Old Services”). Effective December 31, 2020, the legal name of Old Services was changed to Windstream Services PE, LLC. Old Holdings owned a 100 percent interest in Old Services and was not a guarantor or subject to the restrictive covenants included in any of Old Services’ debt agreements. Old Services and its guarantor subsidiaries were the sole obligors of all outstanding debt obligations. Both Old Holdings and Old Services were required to file periodic reports with the United States Securities and Exchange Commission. There are no significant differences in the nature of the business operations conducted by Holdings II and its subsidiaries and those of Old Holdings and its subsidiaries.

 

Description of Business – Windstream offers managed communications services, including Software Defined Wide-Area Network (“SD-WAN”) and Unified Communication as a Service (“UCaaS”), and high-capacity bandwidth and transport services to businesses across the United States. The Company also provides premium broadband, entertainment and security services through an enhanced fiber network to consumers and small and midsize businesses primarily in rural areas in 18 states. Our operations are organized into three business units: Kinetic, Enterprise and Wholesale. The Kinetic business unit primarily serves customers in markets in which we are the incumbent local exchange carrier (“ILEC”) and provides services over network facilities operated by us. The Enterprise and Wholesale business units primarily serve customers in markets in which we are a competitive local exchange carrier (“CLEC”) and provide services over network facilities primarily leased from other carriers.

 

Consumer service revenues are generated from the provisioning of high-speed Internet, voice and video services to consumers. Enterprise service revenues include revenues from integrated voice and data services, advanced data and traditional voice and long-distance services provided to enterprise, mid-market and small business customers. Wholesale revenues include revenues from other communications services providers for special access circuits and fiber connections, voice and data transport services, and revenues from the reselling of our services. Service revenues also include switched access revenues, federal and state Universal Service Fund (“USF”) revenues, amounts received from Connect America Fund (“CAF”) - Phase II, USF surcharges and revenues from providing other miscellaneous services.

 

Bankruptcy-Related Developments – On February 25, 2019 (the “Petition Date”), Old Holdings and all of its subsidiaries, including Old Services (collectively, the “Debtors”), filed voluntary petitions (the “Chapter 11 Cases”) for reorganization under Chapter 11 of the United States Bankruptcy Code (the “Bankruptcy Code”) in the U.S. Bankruptcy Court for the Southern District of New York (the “Bankruptcy Court”). The Chapter 11 Cases were filed following an adverse court ruling further discussed in Note 17, the effects of which resulted in the acceleration of all of Old Services’ long-term debt and remaining obligations under the master lease agreement with Uniti Group, Inc. (“Uniti”). On April 1, 2020, the Debtors filed a Joint Chapter 11 Plan of Reorganization (as amended, the “Plan”) in the Bankruptcy Court and also filed on the same date a Disclosure Statement related to the Plan. On May 6, 2020, an amended Disclosure Statement was filed with the Bankruptcy Court. On June 26, 2020, the Bankruptcy Court entered an Order Confirming the First Amended Joint Chapter 11 Plan of Reorganization of Windstream Holdings, Inc., et al. Pursuant to Chapter 11 of the Bankruptcy Code (the “Confirmation Order”), which approved and confirmed the Plan. The Debtors operated their businesses as “debtors-in-possession” under the jurisdiction of the Bankruptcy Court and in accordance with the applicable provisions of Chapter 11 of the Bankruptcy Code and orders of the Bankruptcy Court until their emergence from bankruptcy.

 

 

F-9


WINDSTREAM HOLDINGS II, LLC (Successor)

WINDSTREAM HOLDINGS, INC. (Predecessor)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

 

 

1. Background and Basis of Presentation, Continued:

The Plan became effective on September 21, 2020 (“Effective Date”) in accordance with its terms and the Debtors emerged from the Chapter 11 Cases. As part of the transactions undertaken pursuant to the Plan, the Debtors were reorganized and Holdings II was formed and became the new parent company. All claims against the Debtors that arose before February 25, 2019 were substantially discharged and all of the shares of common stock of Old Holdings outstanding immediately prior to the Effective Date, and any rights of any holder in respect thereof, were deemed cancelled, discharged and of no further force or effect.

 

Following the cancellation of Old Holdings’ outstanding common stock, on the Effective Date, Windstream issued new common units and special warrants (“equity units”) to purchase common units to holders of allowed first lien claims and participants in a $750.0 million rights offering further discussed in Note 3.

 

Although Old Holdings and Old Services emerged from Chapter 11 on the Effective Date, the Chapter 11 cases for those entities will remain open for purposes of fully administrating the estate and reconciling and settling claims subject to compromise under the Plan until such time that the Bankruptcy Court enters a final order closing the case. At that time, any remaining cash held by Old Services will be transferred to the Company and Old Holdings and Old Services will be dissolved.

 

Basis of Presentation – Upon emergence from the Chapter 11 Cases, the Predecessor adopted fresh start accounting, which resulted in a new basis of accounting and the Company becoming a new entity for financial reporting purposes. As a result of the adoption of fresh start accounting and the effects of the implementation of the Plan, the consolidated financial statements after the Effective Date are not comparable with the consolidated financial statements on or before that date. All transactions associated with the emergence activities that occurred on the Effective Date are reflected in the Predecessor financial statements. Post-emergence operating activity occurring on September 21, 2020 has been accounted for in the Successor financial statements. See Note 4 for additional information related to the adoption of fresh start accounting. References to “Successor” relate to the consolidated financial position, results of operations and cash flows of the Company after September 21, 2020. Conversely, references to “Predecessor” refer to the consolidated financial position, results of operations and cash flows of Old Holdings on or before September 21, 2020.

 

Within the Predecessor financial statements, beginning with the Petition Date and ending on the Effective Date, the Debtors applied Accounting Standards Codification (“ASC”) 852 - Reorganizations (“ASC 852”) in preparing its consolidated financial statements. ASC 852 requires the financial statements, for periods subsequent to the commencement of the Chapter 11 Cases, to distinguish transactions and events that are directly associated with the reorganization from the ongoing operations of the business. Accordingly, certain charges incurred during 2020 and 2019 related to the Chapter 11 Cases, including the settlement of liabilities subject to compromise, accrual for damages, write-off of unamortized long-term debt issuance costs and discounts associated with debt classified as liabilities subject to compromise, and professional fees incurred directly as a result of the Chapter 11 Cases were recorded as reorganization items, net in the consolidated statements of operations of the Predecessor. In addition, liabilities subject to compromise during the Chapter 11 proceedings were distinguished from post-petition liabilities in the consolidated balance sheet of the Predecessor.

 

Pursuant to Section 6.01 of the Credit Agreement, by and between Win Services (“Borrower”), Holdings II, JPMorgan Chase Bank, N.A., as Administrative and Collateral Agent, and Lender Parties, dated September 21, 2020 (“Credit Agreement”), Borrower is satisfying the requirements of Section 6.01 of the Credit Agreement with presentation of the audited consolidated financial statements of its parent, Holdings II, and Holdings II’s subsidiaries.

 

Certain prior year amounts have been reclassified to conform to the current year financial statement presentation. These changes and reclassifications did not impact previously reported net income (loss) or comprehensive income (loss).

 

 

F-10


WINDSTREAM HOLDINGS II, LLC (Successor)

WINDSTREAM HOLDINGS, INC. (Predecessor)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

 

 

1. Background and Basis of Presentation, Continued:

 

Accounting Policy Changes – The application of fresh start accounting allows an entity to establish new accounting policies for the successor company independent of those followed by the predecessor company. As such, the following are the accounting policy changes adopted by the Successor.

 

 

Depreciation of property, plant and equipment – Depreciation expense for both regulated and non-regulated operations of the Successor is computed using the straight-line method over the estimated useful lives of the related assets. The Predecessor had used a group composite method for its regulated operations.

 

 

Revenue recognition – As permitted under ASC 842, Leases, the Successor adopted the predominance practical expedient applicable to contracts with customers that include both lease and non-lease components and prospectively combines the lease and non-lease components into a single performance obligation for purposes of recognizing revenue from such contracts. The Predecessor had not adopted the predominance practical expedient and had accounted for the lease and non-lease components as separate performance obligations.

 

Balance sheet presentation of amounts due to/from other carriers – Pursuant to the right-of-setoff conditions specified in ASC 210, Balance Sheet, the Successor has elected to present amounts due to/from the same telecommunications carrier related to interconnection costs it incurs with these carriers to utilize their networks to deliver products and services to its customers on a net basis within the consolidated balance sheet as either a net asset or net liability. The Predecessor had elected to present such amounts on a gross basis within the consolidated balance sheet.

 

Except for the changes discussed above, the accounting policies followed by the Company in the preparation of the consolidated financial statements for the Successor periods are consistent with those of the Predecessor periods and are further discussed in Note 2.

 

Supplemental Cash Flow Information – Supplemental cash flow information for the periods presented was as follows:

 

 

 

Successor

 

 

Predecessor

(Millions)

 

Year Ended
December 31, 2021

 

Period from
September 22, 2020
through
December 31, 2020

 

 

Period from
January 1, 2020
through
September 21, 2020

 

Year Ended
December 31, 2019

 

 

 

 

 

Interest paid, net of interest capitalized

 

$

168.3 

 

 

$

14.1 

 

 

 

$

210.0 

 

 

$

349.9 

 

Income taxes (refunded) paid, net

 

$

(0.4)

 

 

$

— 

 

 

 

$

1.0 

 

 

$

(8.5)

 

Reorganization items paid

 

$

— 

 

 

$

— 

 

 

 

$

254.8 

 

 

$

146.1 

 

 

2. Summary of Significant Accounting Policies and Changes:

 

Significant Accounting Policies

 

Consolidation – The accompanying consolidated financial statements include the accounts of the Company and its subsidiaries. All affiliated transactions have been eliminated, as applicable.

 

Use of Estimates – The preparation of financial statements, in accordance with U.S. GAAP, requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenues and expenses and disclosure of contingent assets and liabilities. The estimates and assumptions used in the accompanying consolidated financial statements are based upon management’s evaluation of the relevant facts and circumstances as of the date of the consolidated financial statements. Actual results may differ from the estimates and assumptions used in preparing the accompanying consolidated financial statements, including the potential impacts arising from the COVID-19 global pandemic, and such differences could be material.

 

F-11


WINDSTREAM HOLDINGS II, LLC (Successor)

WINDSTREAM HOLDINGS, INC. (Predecessor)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

 

2. Summary of Significant Accounting Policies and Changes, Continued:

 

Cash and Cash Equivalents – Cash and cash equivalents consist of highly liquid investments with original maturities of three months or less.

 

Restricted Cash – Deposits held as security for indebtedness under our corporate purchase card program and not available for use have been presented as restricted cash in the accompanying consolidated financial statements.

 

Accounts Receivable – Accounts receivable consist principally of amounts billed and currently due from customers and are generally unsecured and due within 30 days. The amounts due are stated at their net estimated realizable value. An allowance for credit losses is maintained to provide for the estimated amount of receivables that will not be collected. Concentration of credit risk with respect to accounts receivable is limited because a large number of geographically diverse customers make up our customer base. Due to varying customer billing cycle cut-off, management must estimate service revenues earned but not yet billed at the end of each reporting period. Included in accounts receivable are unbilled receivables related to communications services and product sales of $27.4 million and $31.5 million at December 31, 2021 and 2020, respectively.

 

Accounts receivable consists of the following as of December 31:

 

(Millions)

 

2021

 

2020

Accounts receivable

 

$

380.3 

 

 

$

452.3 

 

Less: Allowance for credit losses