| Supplemental Guarantor Information |
Note 14. Supplemental Guarantor Information
In connection with the issuance of our 6.00% Senior Secured Notes due 2023, 8.25% Senior Unsecured Notes due 2023 and Term Loan B Facility due 2022, the Guarantors provided guarantees of that indebtedness. These guarantees are full and unconditional as well as joint and several. All property assets and related operations of the Guarantors are pledged as collateral under these obligations and the Guarantors are subject to restrictions on certain investments and payments. Subject to the terms and provisions of the debt agreements, in certain circumstances, a Guarantor may be released from its guarantee obligation including, upon the sale or transfer of any portion of its equity interest or all or substantially all its property, and upon any Guarantor being designated an Unrestricted Subsidiary, as defined in the Credit Agreement, or otherwise no longer being required to remain a Guarantor given its size or regulatory restrictions.
The following information summarizes our Condensed Consolidating Balance Sheet as of September 30, 2015, Condensed Consolidating Statements of Comprehensive Income for the three months ended September 30, 2015 and for the period from April 24, 2015 to September 30, 2015, and the Condensed Consolidating Statement of Cash Flows for the period April 24, 2015 to September 30, 2015:
|
|
|
Condensed Consolidating Balance Sheet
As of September 30, 2015 |
|
|
(Thousands) |
|
CS&L |
|
|
CSL Capital |
|
|
Guarantors |
|
|
Non-Guarantors |
|
|
Eliminations |
|
|
Consolidated |
|
|
Assets: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Real estate investments, net of accumulated depreciation |
|
$ |
- |
|
|
$ |
- |
|
|
$ |
1,854,241 |
|
|
$ |
534,844 |
|
|
$ |
- |
|
|
$ |
2,389,085 |
|
|
Cash and cash equivalents |
|
|
17 |
|
|
|
- |
|
|
|
208,776 |
|
|
|
1,205 |
|
|
|
- |
|
|
|
209,998 |
|
|
Accounts receivable, net |
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
1,651 |
|
|
|
- |
|
|
|
1,651 |
|
|
Affiliate receivable |
|
|
- |
|
|
|
- |
|
|
|
68,732 |
|
|
|
77 |
|
|
|
(68,809 |
) |
|
|
- |
|
|
Customer list intangible assets, net |
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
11,494 |
|
|
|
- |
|
|
|
11,494 |
|
|
Straight-line rent receivable |
|
|
- |
|
|
|
- |
|
|
|
7,497 |
|
|
|
- |
|
|
|
- |
|
|
|
7,497 |
|
|
Investment in consolidated subsidiaries |
|
|
2,638,353 |
|
|
|
2,638,353 |
|
|
|
- |
|
|
|
- |
|
|
|
(5,276,706 |
) |
|
|
- |
|
|
Other assets |
|
|
- |
|
|
|
- |
|
|
|
2,570 |
|
|
|
484 |
|
|
|
- |
|
|
|
3,054 |
|
|
Total Assets |
|
$ |
2,638,370 |
|
|
$ |
2,638,353 |
|
|
$ |
2,141,816 |
|
|
$ |
549,755 |
|
|
$ |
(5,345,515 |
) |
|
$ |
2,622,779 |
|
|
Liabilities and Shareholders' Deficit: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Accounts payable, accrued expenses and other liabilities |
|
$ |
50,445 |
|
|
$ |
50,445 |
|
|
$ |
29,479 |
|
|
$ |
17,487 |
|
|
$ |
(50,445 |
) |
|
$ |
97,411 |
|
|
Derivative liability |
|
$ |
13,993 |
|
|
$ |
13,993 |
|
|
|
|
|
|
|
|
|
|
$ |
(13,993 |
) |
|
$ |
13,993 |
|
|
Affiliate payable |
|
|
68,809 |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
(68,809 |
) |
|
|
- |
|
|
Dividends payable |
|
|
90,404 |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
90,404 |
|
|
Deferred income taxes |
|
|
- |
|
|
|
- |
|
|
|
1,825 |
|
|
|
4,427 |
|
|
|
- |
|
|
|
6,252 |
|
|
Notes and other debt |
|
|
3,506,905 |
|
|
|
3,506,905 |
|
|
|
- |
|
|
|
- |
|
|
|
(3,506,905 |
) |
|
|
3,506,905 |
|
|
Total liabilities |
|
|
3,730,556 |
|
|
|
3,571,343 |
|
|
|
31,304 |
|
|
|
21,914 |
|
|
|
(3,640,152 |
) |
|
|
3,714,965 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Common Stock |
|
|
15 |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
15 |
|
|
Additional paid-in capital |
|
|
601 |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
601 |
|
|
Accumulated other comprehensive income |
|
|
(13,993 |
) |
|
|
(13,993 |
) |
|
|
- |
|
|
|
- |
|
|
|
13,993 |
|
|
|
(13,993 |
) |
|
Distributions in excess of earnings |
|
|
(1,078,809 |
) |
|
|
(918,997 |
) |
|
|
2,110,512 |
|
|
|
527,841 |
|
|
|
(1,719,356 |
) |
|
|
(1,078,809 |
) |
|
Total shareholders' deficit |
|
|
(1,092,186 |
) |
|
|
(932,990 |
) |
|
|
2,110,512 |
|
|
|
527,841 |
|
|
|
(1,705,363 |
) |
|
|
(1,092,186 |
) |
|
Total Liabilities and Shareholders' Deficit |
|
$ |
2,638,370 |
|
|
$ |
2,638,353 |
|
|
$ |
2,141,816 |
|
|
$ |
549,755 |
|
|
$ |
(5,345,515 |
) |
|
$ |
2,622,779 |
|
|
|
|
Condensed Consolidating Statement of Comprehensive Income
For the Three Months Ended September 30, 2015 |
|
|
(Thousands) |
|
CS&L |
|
CSL Capital |
|
Guarantors |
|
Non-Guarantors |
|
Eliminations |
|
|
Consolidated |
|
|
Revenues: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Rental revenues |
|
$ |
- |
|
$ |
- |
|
$ |
166,914 |
|
$ |
45 |
|
$ |
- |
|
|
$ |
166,959 |
|
|
Consumer CLEC |
|
|
- |
|
|
- |
|
|
- |
|
|
6,675 |
|
|
- |
|
|
|
6,675 |
|
|
Total revenues |
|
|
- |
|
|
- |
|
|
166,914 |
|
|
6,720 |
|
|
- |
|
|
|
173,634 |
|
|
Costs and Expenses: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest expense |
|
|
66,511 |
|
|
66,511 |
|
|
- |
|
|
- |
|
|
(66,511 |
) |
|
|
66,511 |
|
|
Depreciation and amortization |
|
|
- |
|
|
- |
|
|
63,257 |
|
|
24,014 |
|
|
- |
|
|
|
87,271 |
|
|
General and administrative expense |
|
|
779 |
|
|
- |
|
|
3,450 |
|
|
- |
|
|
- |
|
|
|
4,229 |
|
|
CLEC operating expense |
|
|
- |
|
|
- |
|
|
- |
|
|
5,148 |
|
|
- |
|
|
|
5,148 |
|
|
Acquisition and transaction related costs |
|
|
- |
|
|
- |
|
|
804 |
|
|
- |
|
|
- |
|
|
|
804 |
|
|
Total costs and expenses |
|
|
67,290 |
|
|
66,511 |
|
|
67,511 |
|
|
29,162 |
|
|
(66,511 |
) |
|
|
163,963 |
|
|
Earnings (losses) from consolidated subsidiaries |
|
|
10,182 |
|
|
76,693 |
|
|
- |
|
|
- |
|
|
(86,875 |
) |
|
|
- |
|
|
(Loss) Income before income taxes |
|
|
(57,108 |
) |
|
10,182 |
|
|
99,403 |
|
|
(22,442 |
) |
|
(20,364 |
) |
|
|
9,671 |
|
|
Income tax expense |
|
|
- |
|
|
- |
|
|
101 |
|
|
167 |
|
|
- |
|
|
|
268 |
|
|
Net (loss) income |
|
$ |
(57,108 |
) |
$ |
10,182 |
|
$ |
99,302 |
|
$ |
(22,609 |
) |
$ |
(20,364 |
) |
|
$ |
9,403 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Comprehensive (loss) income |
|
$ |
(99,652 |
) |
$ |
(32,362 |
) |
$ |
99,302 |
|
$ |
(22,609 |
) |
$ |
22,180 |
|
|
$ |
(33,141 |
) |
|
|
|
Condensed Consolidating Statement of Comprehensive Income
For the Period from April 24 - September 30, 2015 |
|
|
(Thousands) |
|
CS&L |
|
CSL Capital |
|
Guarantors |
|
Non-Guarantors |
|
Eliminations |
|
|
Consolidated |
|
|
Revenues: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Rental revenues |
|
$ |
- |
|
$ |
- |
|
$ |
291,086 |
|
$ |
45 |
|
$ |
- |
|
|
$ |
291,131 |
|
|
Consumer CLEC |
|
|
- |
|
|
- |
|
|
- |
|
|
11,251 |
|
|
- |
|
|
|
11,251 |
|
|
Total revenues |
|
|
- |
|
|
- |
|
|
291,086 |
|
|
11,296 |
|
|
- |
|
|
|
302,382 |
|
|
Costs and Expenses: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest expense |
|
|
115,307 |
|
|
115,307 |
|
|
- |
|
|
- |
|
|
(115,307 |
) |
|
|
115,307 |
|
|
Depreciation and amortization |
|
|
- |
|
|
- |
|
|
110,001 |
|
|
41,714 |
|
|
- |
|
|
|
151,715 |
|
|
General and administrative expense |
|
|
1,117 |
|
|
- |
|
|
6,273 |
|
|
- |
|
|
- |
|
|
|
7,390 |
|
|
CLEC operating expense |
|
|
- |
|
|
- |
|
|
- |
|
|
8,889 |
|
|
- |
|
|
|
8,889 |
|
|
Acquisition and transaction related costs |
|
|
|
|
|
|
|
|
877 |
|
|
|
|
|
|
|
|
|
877 |
|
|
Total costs and expenses |
|
|
116,424 |
|
|
115,307 |
|
|
117,151 |
|
|
50,603 |
|
|
(115,307 |
) |
|
|
284,178 |
|
|
Earnings (losses) from consolidated subsidiaries |
|
|
18,821 |
|
|
134,128 |
|
|
- |
|
|
- |
|
|
(152,949 |
) |
|
|
- |
|
|
(Loss) Income before income taxes |
|
|
(97,603 |
) |
|
18,821 |
|
|
173,935 |
|
|
(39,307 |
) |
|
(37,642 |
) |
|
|
18,204 |
|
|
Income tax expense |
|
|
- |
|
|
- |
|
|
195 |
|
|
305 |
|
|
- |
|
|
|
500 |
|
|
Net (loss) income |
|
$ |
(97,603 |
) |
$ |
18,821 |
|
$ |
173,740 |
|
$ |
(39,612 |
) |
$ |
(37,642 |
) |
|
$ |
17,704 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Comprehensive Income |
|
$ |
(111,596 |
) |
$ |
4,828 |
|
$ |
173,740 |
|
$ |
(39,612 |
) |
$ |
(23,649 |
) |
|
$ |
3,711 |
|
|
|
|
Condensed Consolidating Statement of Cash Flows
For the Period from April 24 - September 30, 2015 |
|
|
(Thousands) |
|
CS&L |
|
|
CSL Capital |
|
|
Guarantors |
|
|
Non-Guarantors |
|
|
Eliminations |
|
|
Consolidated |
|
|
Cash flow from operating activities |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net cash provided by operating activities |
|
$ |
10,584 |
|
|
$ |
- |
|
|
$ |
209,470 |
|
|
$ |
1,205 |
|
|
$ |
- |
|
|
$ |
221,259 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash flow from investing activities |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Consideration paid to Windstream Services |
|
|
(1,035,029 |
) |
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
(1,035,029 |
) |
|
Capital expenditures |
|
|
- |
|
|
|
- |
|
|
|
(712 |
) |
|
|
- |
|
|
|
- |
|
|
|
(712 |
) |
|
Net cash used in investing activities |
|
|
(1,035,029 |
) |
|
|
- |
|
|
|
(712 |
) |
|
|
- |
|
|
|
- |
|
|
|
(1,035,741 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash flow from financing activities |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Proceeds from issuance of Term Loans |
|
|
1,127,000 |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
1,127,000 |
|
|
Deferred financing costs |
|
|
(30,018 |
) |
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
(30,018 |
) |
|
Principal payment on debt |
|
|
(5,350 |
) |
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
(5,350 |
) |
|
Common stock issuance |
|
|
(629 |
) |
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
(629 |
) |
|
Dividends paid |
|
|
(66,522 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(66,522 |
) |
|
Cash in-lieu of fractional shares |
|
|
(19 |
) |
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
(19 |
) |
|
Net cash provided by investing activities |
|
|
1,024,462 |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
1,024,462 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net increase in cash and cash equivalents |
|
|
17 |
|
|
|
- |
|
|
|
208,758 |
|
|
|
1,205 |
|
|
|
- |
|
|
|
209,980 |
|
|
Cash and cash equivalents, April 24, 2015 |
|
|
- |
|
|
|
- |
|
|
|
18 |
|
|
|
- |
|
|
|
- |
|
|
|
18 |
|
|
Cash and cash equivalents, September 30, 2015 |
|
$ |
17 |
|
|
$ |
- |
|
|
$ |
208,776 |
|
|
$ |
1,205 |
|
|
$ |
- |
|
|
$ |
209,998 |
|
|