Note 14. Supplemental Guarantor Information

Pursuant to SEC Regulation S-X Rule 3-10 “Financial statements of guarantors and issuers of guaranteed securities registered or being registered,” the Company is required to provide condensed consolidating financial information for CSL Capital and the Guarantors because the Exchange Notes (see Note 8) and the guarantees thereof were registered with the SEC under the Securities Act. Although the Exchange Notes are no longer registered with the SEC, we are required by SEC rules to provide the information contained in this footnote so long as the Exchange Notes remain outstanding.

While the condensed consolidating financial information presented below is in respect of our Exchange Notes only, our Secured Notes, 2024 Notes and senior credit facilities under the Credit Agreement are guaranteed by the Guarantors. 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 the Secured Notes and Credit Agreement 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 of 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.

Certain amounts in the Condensed Consolidating Statement of Comprehensive Income for the three months ended March 31, 2016, have been revised to correct immaterial errors. Specifically, immaterial adjustments were made to properly reflect the Guarantor’s proportionate share in earnings from consolidated subsidiaries of Non-Guarantor entities. These adjustments have no impact on the consolidated results of the Company.

During the first quarter of 2017, certain Non-Guarantor entities became Guarantor entities. Prior year information has been retrospectively revised based on the structure that existed at March 31, 2017.

The following information summarizes our Condensed Consolidating Balance Sheets as of March 31, 2017 and December 31, 2016, Condensed Consolidating Statement of Comprehensive Income (Loss) for the three months ended March 31, 2017 and 2016, and the Condensed Consolidating Statement of Cash Flows for the three months ended March 31, 2017 and 2016:

	Condensed Consolidating Balance Sheet As of March 31, 2017
(Thousands)	Uniti			CSL Capital			Guarantors		Non-Guarantors		Eliminations			Consolidated
Assets:
Property, plant and equipment, net	$	—		$	—		$	1,953,848	$	718,501	$	—		$	2,672,349
Cash and cash equivalents		36,179			—			15,779		16,768		—			68,726
Accounts receivable, net		(3	)		—			10,862		6,377		—			17,236
Affiliate receivable		—			—			125		—		(125	)		—
Goodwill		—			—			145,054		117,032		—			262,086
Intangible assets, net		—			—			36,511		177,550		—			214,061
Straight-line revenue receivable		—			—			33,406		—		—			33,406
Investment in consolidated subsidiaries		2,792,306			1,958,252			818,922		-		(5,569,480	)		-
Other assets		1,202			—			7,103		4,508		—			12,813
Total Assets	$	2,829,684		$	1,958,252		$	3,021,610	$	1,040,736	$	(5,569,605	)	$	3,280,677
Liabilities and Shareholders' Deficit:
Liabilities:
Accounts payable, accrued expenses and other liabilities	$	25		$	—		$	26,915	$	29,083	$	—		$	56,023
Accrued interest payable		65,715			65,715			—		—		(65,715	)		65,715
Deferred revenue		—			—			176,885		116,994		—			293,879
Derivative liability		1,536			1,536			—		—		(1,536	)		1,536
Affiliate payable		—			—			—		125		(125	)		—
Dividends payable		94,810			—			—		—		—			94,810
Deferred income taxes		—			—			1,978		45,070		—			47,048
Capital lease obligations		—			—			47,661		6,407		—			54,068
Contingent consideration		90,719			—			—		—		—			90,719
Notes and other debt, net		4,003,792			4,003,792			—		—		(4,003,792	)		4,003,792
Total liabilities		4,256,597			4,071,043			253,439		197,679		(4,071,168	)		4,707,590

Convertible preferred stock		81,296			—			—		—		—			81,296

Shareholders' Deficit:
Common stock		16			—			—		—		—			16
Additional paid-in capital		141,503			—			—		—		—			141,503
Accumulated other comprehensive income		3,072			(1,536	)		—		4,608		(3,072	)		3,072
Distributions in excess of earnings		(1,652,800	)		(2,111,255	)		2,768,171		838,449		(1,495,365	)		(1,652,800	)
Total shareholders' deficit		(1,508,209	)		(2,112,791	)		2,768,171		843,057		(1,498,437	)		(1,508,209	)
Total Liabilities, Convertible Preferred Stock, and Shareholders' Deficit	$	2,829,684		$	1,958,252		$	3,021,610	$	1,040,736	$	(5,569,605	)	$	3,280,677

	Condensed Consolidating Balance Sheet As of December 31, 2016
(Thousands)	Uniti			CSL Capital			Guarantors		Non-Guarantors			Eliminations			Consolidated
Assets:
Property, plant and equipment, net	$	—		$	—		$	1,990,526	$	679,511		$	—		$	2,670,037
Cash and cash equivalents		131,145			—			32,426		8,183			—			171,754
Accounts receivable, net		(3	)		—			9,034		6,250			—			15,281
Affiliate receivable		—			—			107		—			(107	)		—
Goodwill		—			—			145,054		117,280			—			262,334
Intangible assets, net		—			—			37,033		123,551			—			160,584
Straight-line revenue receivable		—			—			29,084		4			—			29,088
Investment in consolidated subsidiaries		2,801,234			2,036,717			763,522		-			(5,601,473	)		-
Other assets		1,066			—			6,599		2,009			—			9,674
Total Assets	$	2,933,442		$	2,036,717		$	3,013,385	$	936,788		$	(5,601,580	)	$	3,318,752
Liabilities and Shareholders' Deficit:
Liabilities:
Accounts payable, accrued expenses and other liabilities	$	—		$	—		$	25,865	$	15,112		$	—		$	40,977
Accrued interest payable		27,812			27,812			—		—			(27,812	)		27,812
Deferred revenue		—			—			157,857		103,547			—			261,404
Derivative liability		6,102			6,102			—		—			(6,102	)		6,102
Affiliate payable		—			—			—		107			(107	)		—
Dividends payable		94,607			—			—		—			—			94,607
Deferred income taxes		—			—			1,603		26,791			—			28,394
Capital lease obligations		—			—			47,977		6,558			—			54,535
Contingent consideration		98,600			—			—		—			—			98,600
Notes and other debt, net		4,028,214			4,028,214			—		—			(4,028,214	)		4,028,214
Total liabilities		4,255,335			4,062,128			233,302		152,115			(4,062,235	)		4,640,645

Convertible preferred stock		80,552			—			—		—			—			80,552

Shareholders' Deficit:
Common stock		15			—			—		—			—			15
Additional paid-in capital		141,092			—			—		—			—			141,092
Accumulated other comprehensive income		(6,369	)		(6,102	)		—		(267	)		6,369			(6,369	)
Distributions in excess of earnings		(1,537,183	)		(2,019,309	)		2,780,083		784,940			(1,545,714	)		(1,537,183	)
Total shareholders' deficit		(1,402,445	)		(2,025,411	)		2,780,083		784,673			(1,539,345	)		(1,402,445	)
Total Liabilities, Convertible Preferred Stock, and Shareholders' Deficit	$	2,933,442		$	2,036,717		$	3,013,385	$	936,788		$	(5,601,580	)	$	3,318,752

	Condensed Consolidating Statement of Comprehensive Income (Loss) For the Three Months Ended March 31, 2017
(Thousands)	Uniti			CSL Capital			Guarantors			Non-Guarantors			Eliminations			Consolidated
Revenues:
Leasing	$	—		$	—		$	169,335		$	971		$	—		$	170,306
Fiber Infrastructure		—			—			24,780			10,032			—			34,812
Tower		—			—			326			1,102			—			1,428
Consumer CLEC		—			—			—			4,927			—			4,927
Total revenues		—			—			194,441			17,032			—			211,473
Costs and Expenses:
Interest expense		70,372			72,247			2,693			300			(72,247	)		73,365
Depreciation and amortization		—			—			72,890			28,471			—			101,361
General and administrative expense		1,628			—			10,260			2,090			—			13,978
Operating expense (exclusive of depreciation, accretion and amortization)		—			—			12,819			9,306			—			22,125
Transaction related costs		—			—			8,597			1,087			—			9,684
Other expenses, net		10,910			—			429			—			—			11,339
Total costs and expenses		82,910			72,247			107,688			41,254			(72,247	)		231,852
Earnings (loss) from consolidated subsidiaries		62,910			69,358			(23,703	)		—			(108,565	)		—
(Loss) income before income taxes		(20,000	)		(2,889	)		63,050			(24,222	)		(36,318	)		(20,379	)
Income tax expense		—			—			556			(935	)		—			(379	)
Net (loss) income	$	(20,000	)	$	(2,889	)	$	62,494		$	(23,287	)	$	(36,318	)	$	(20,000	)

Comprehensive (loss) income	$	(10,559	)	$	1,677		$	62,494		$	(18,412	)	$	(45,759	)	$	(10,559	)

	Condensed Consolidating Statement of Comprehensive Income (Loss) For the Three Months Ended March 31, 2016
(Thousands)	Uniti			CSL Capital			Guarantors			Non-Guarantors			Eliminations			Consolidated
Revenues:
Leasing	$	—		$	—		$	168,266		$	347		$	—		$	168,613
Fiber Infrastructure		—			—			—			—			—			—
Tower		—			—			28			—			—			28
Consumer CLEC		—			—			—			6,034			—			6,034
Total revenues		—			—			168,294			6,381			—			174,675
Costs and Expenses:
Interest expense		66,145			66,145			(96	)		—			(66,145	)		66,049
Depreciation and amortization		—			—			64,089			22,251			—			86,340
General and administrative expense		930			—			4,163			96			—			5,189
Operating expense (exclusive of depreciation, accretion and amortization)		—			—			—			4,707			—			4,707
Transaction related costs		—			—			3,910			—			—			3,910
Total costs and expenses		67,075			66,145			72,066			27,054			(66,145	)		166,195
Earnings (loss) from consolidated subsidiaries		75,111			75,214			(21,191	)		—			(129,134	)		—
Income (loss) before income taxes		8,036			9,069			75,037			(20,673	)		(62,989	)		8,480
Income tax expense		—			—			248			196			—			444
Net income (loss)	$	8,036		$	9,069		$	74,789		$	(20,869	)	$	(62,989	)	$	8,036

Comprehensive income (loss)	$	(32,326	)	$	(31,373	)	$	74,789		$	(20,789	)	$	(22,627	)	$	(32,326	)

	Condensed Consolidating Statement of Cash Flows For the Three Months Ended March 31, 2017
(Thousands)	Uniti			CSL Capital		Guarantors			Non-Guarantors			Eliminations			Consolidated
Cash flow from operating activities
Net cash provided by (used in) operating activities	$	49,390		$	—	$	150,115		$	5,195		$	(76,498	)	$	128,202

Cash flow from investing activities
Acquisition of businesses, net of cash acquired		—			—		—			248			—			248
Acquisition of ground lease investments		—			—		(7,191	)		—			—			(7,191	)
NMS asset acquisition (Note 3)		—			—		—			(64,622	)		—			(64,622	)
Capital expenditures		—			—		(5,641	)		(9,290	)		—			(14,931	)
Net cash used in investing activities		—			—		(12,832	)		(73,664	)		—			(86,496	)

Cash flow from financing activities
Principal payment on debt		(5,270	)		—		—			—			—			(5,270	)
Dividends paid		(94,133	)		—		—			—			—			(94,133	)
Borrowings under revolving credit facility		25,000			—		—			—			—			25,000
Payments under revolving credit facility		(25,000	)		—		—			—			—			(25,000	)
Capital lease payments		—			—		(520	)		(152	)		—			(672	)
Deferred financing costs		(24,418	)		—		—			—			—			(24,418	)
Common stock issuance, net of costs		(54	)		—		—			—			—			(54	)
Payments of contingent consideration		(18,791	)													(18,791	)
Net share settlement		(1,690	)		—		—			—			—			(1,690	)
Intercompany transactions, net		—			—		(153,410	)		76,912			76,498			—
Net cash (used in) provided by financing activities		(144,356	)		—		(153,930	)		76,760			76,498			(145,028	)

Effect of exchange rates on cash and cash equivalents		—			—		—			294			—			294

Net increase in cash and cash equivalents		(94,966	)		—		(16,647	)		8,585			—			(103,028	)
Cash and cash equivalents, December 31, 2016		131,145			—		32,426			8,183			—			171,754
Cash and cash equivalents, March 31, 2017	$	36,179		$	—	$	15,779		$	16,768		$	—		$	68,726

	Condensed Consolidating Statement of Cash Flows For the three months ended March 31, 2016
(Thousands)	Uniti			CSL Capital		Guarantors			Non-Guarantors		Eliminations			Consolidated
Cash flow from operating activities
Net cash provided by (used in) operating activities	$	97,665		$	—	$	153,550		$	1,181	$	(130,695	)	$	121,701

Cash flow from investing activities
Acquisition of businesses, net of cash acquired		—			—		—			111		—			111
Acquisition of ground lease investments							(1,347	)		—					(1,347	)
Capital expenditures		—			—		(77	)		—		—			(77	)
Net cash used in investing activities		—			—		(1,424	)		111		—			(1,313	)

Cash flow from financing activities
Principal payment on debt		(6,044	)		—		—			—		—			(6,044	)
Net share settlement		(1,266	)												(1,266	)
Dividends Paid		(90,314	)		—		—			—		—			(90,314	)
Intercompany transactions, net		—			—		(132,165	)		1,470		130,695			—
Net cash (used in) provided by financing activities		(97,624	)		—		(132,165	)		1,470		130,695			(97,624	)

Effect of exchange rates on cash and cash equivalents		—			—		—			78		—			78

Net increase in cash and cash equivalents		41			—		19,961			2,840		—			22,842
Cash and cash equivalents, December 31, 2015		17			—		140,197			2,284		—			142,498
Cash and cash equivalents, March 31, 2016	$	58		$	—	$	160,158		$	5,124	$	—		$	165,340