Segment Information

12 Months Ended

Dec. 31, 2016

Segment Reporting [Abstract]

Segment Information

Note 13. Segment Information

As of December 31, 2016, our management, including our chief executive officer, who is our chief operating decision maker, manages our operations as three operating business segments: Leasing, Fiber Infrastructure and Consumer CLEC. Our Leasing segment represents our REIT operations, including the results of our tower and ground lease operations and corporate expenses not directly attributable to our other operating segments. The Fiber Infrastructure segment represents the operations of the Uniti Fiber business, as well as corporate expenses directly attributable to the operations of that business, and the Consumer CLEC segment represents the operations of our Consumer CLEC Business and corporate expenses directly attributable to the operation of that business. We determined that each of these operating segments represents a reportable segment.

Management evaluates the performance of each segment using Adjusted EBITDA, which is a segment performance measure defined as net income determined in accordance with GAAP, before interest expense, provision for income taxes, depreciation and amortization, stock-based compensation expense, the impact, which may be recurring in nature, of transaction and integration related expenses, the write off of unamortized deferred financing costs, costs incurred as a result of the early repayment of debt, changes in the fair value of contingent consideration and financial instruments, and other similar items. The Company believes that net income, as defined by GAAP, is the most appropriate earnings metric; however we believe that Adjusted EBITDA serves as a useful supplement to net income because it allows investors, analysts and management to evaluate the performance of our segments in a manner that is comparable period over period. Adjusted EBITDA should not be considered as an alternative to net income as determined in accordance with GAAP.

Selected financial data related to our segments is presented below for the year ended December 31, 2016 and for the period from April 24, 2015 to December 31, 2015:

	Year Ended December 31, 2016
(Thousands)	Leasing		Fiber Infrastructure		Consumer CLEC		Subtotal of Reportable Segments
Revenues	$	677,368	$	70,568	$	22,472	$	770,408
Adjusted EBITDA	$	659,198	$	25,912	$	5,074	$	690,184
Less:
Interest expense								275,394
Depreciation and amortization		344,083		28,629		3,258		375,970
Transaction related costs								33,669
Stock-based compensation								4,846
Income tax expense								517
Net loss							$	(212	)
Capital expenditures (1)	$	15,437	$	31,006	$	-	$	46,443

	Period from April 24, 2015 to December 31, 2015
(Thousands)	Leasing		Consumer CLEC		Subtotalof Reportable Segments
Revenues	$	458,614	$	17,700	$	476,314
Adjusted EBITDA	$	449,340	$	3,957	$	453,297
Less:
Interest expense						181,797
Depreciation and amortization		236,177		2,571		238,748
Transaction related costs						5,210
Stock-based compensation						1,934
Income tax expense						738
Net income					$	24,870
Capital expenditures (1)	$	44,413	$	-	$	44,413

(1) Segment capital expenditures represents acquisition of ground lease investments and other capital expenditures as reported in the investing activities section of the Statement of Cash Flows.

Total assets by business segment as of December 31, 2016 and December 31, 2015 are as follows:

(Thousands)	December 31, 2016		December 31, 2015
Leasing	$	2,390,431	$	2,527,915
Fiber Infrastructure		914,082		-
Consumer CLEC		14,239		14,721
Subtotal of reportable segments	$	3,318,752	$	2,542,636

Following the acquisition of Network Management Holdings, LTD in the first quarter of 2017, the Company now manages and reports our operations in four reportable business segment: Leasing, Fiber Infrastructure, Towers and Consumer CLEC.  This change in segments aligns with how management, including our Chief Operating Decision maker, evaluates the performance of our businesses and make decisions regarding the allocation of resources.  We will recast prior period segment data to conform to this new presentation beginning with our Quarterly Report on Form 10-Q for the quarter ended March 31, 2017.