Communications Sales & Leasing, Inc. (NASDAQ:CSAL) Q4 2016 Earnings Conference Call - Final Transcript

Feb 23, 2017 • 08:30 am ET

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Communications Sales & Leasing, Inc. (NASDAQ:CSAL) Q4 2016 Earnings Conference Call - Final Transcript

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Presentation
Executive
Mark Wallace

been extremely pleased with wind stream's performance, and certainly believe the Earthling transaction will be credit enhancing for both a cash flow and leverage standpoint. Utility fiber reported revenues of 31.6 million and adjusted EBITDA of 11.1 million achieving adjusted EBITDA margins are just over 35% for the fourth quarter.

Maintenance capex for the quarter was 1.2 million or 4% of revenues, and success base capex was 18.1 day in that $3 million at NRCS. These results were in line with our previous guidance and include $300,000 of realized cost synergies. Regarding unity towers, we previously announced the acquisition of the NMS power portfolio, and closed that transaction at the end of January for initial consideration of 62.6 million.

At closing, the NMS portfolio included 366 operating towers, and 105 powers under development, all of which we expect to be completed in 2017. Turning out to our capital markets activities, on our last call we discuss are the October 2016 repricing of the $2.1 billion in term loans outstanding and our senior secured credit agreement that reduced the pricing 50 basis points to library plus 350.

Earlier this month, we announced we were able to again successfully reprise our term loans and achieved a another 50 basis point retur and the interest rate to live more plus 300. Together, these transactions have reduced our annual cash interest expense by over $20 million. As you may recall, our floating rate term loans are swapped to fixed and the repricing lowered the effective fixed rate to approximately 5.1%.

In December, we successfully completed a new $400 million eight year unsecured notes offering it's [Indecipherable]. These proceeds were used to fully pay down a revolver and product can provide about $25 million in excess cash to position our balance sheet for upcoming M&A activity this year.

Our liquidity and capital markets access continues to be in great shape at quarter in we had $172 million of unrestricted cash and cash equivalents and our $500 million revolving credit facility with completely undrawn our leverage ratio under our debt agreements at quarter and stands at 5.7 times based on net debt to anualize adjusted EBITDA.

Our regular quarterly cash dividend at $0.60 per share was declared last week representing an annual dividend rate of $2.40 per share. Turning now to our guidance for 2017. Let me preface our 2017 outlook by noting it does not include the acquisition of Hunt Telecom or any future M&A or capital markets activities. We expect to update our initial 2017 guidance after one closes.

In addition, beginning of the first quarter of 2017, we will report our results in four reportable segments leasing, cyber infrastructure powers and consumer see lack. This differs from my previous presentation and that our tower operations often also known to us at towers will be a separate reportable segment and included ground lease investments, whereas those operations were included in our leasing segment in 2016.

In addition, our corporate expenses will no longer be