Segment Information

9 Months Ended

Sep. 30, 2022

Segment Reporting [Abstract]

Segment Information

Segment Information

Our management, including our chief executive officer, who is our chief operating decision maker, manages our operations as two reportable segments, in addition to our corporate operations, which include:

Leasing: Represents the operations of our leasing business, Uniti Leasing, which is engaged in the acquisition and construction of mission-critical communications assets and leasing them to anchor customers on either an exclusive or shared-tenant basis, in addition to the leasing of dark fiber on our existing dark fiber network assets that we either constructed or acquired. While the Leasing segment represents our REIT operations, certain aspects of the Leasing segment are also operated through taxable REIT subsidiaries.

Fiber Infrastructure: Represents the operations of our fiber business, Uniti Fiber, which is a leading provider of infrastructure solutions, including cell site backhaul and dark fiber, to the telecommunications industry.

Corporate: Represents our corporate office and shared service functions. Certain costs and expenses, primarily related to headcount, insurance, professional fees and similar charges, that are directly attributable to operations of our business segments are allocated to the respective segments.

Management evaluates the performance of each segment using Adjusted EBITDA, which is a segment performance measure we define as net income determined in accordance with GAAP, before interest expense, provision for income taxes, depreciation and amortization, stock-based compensation expense and the impact, which may be recurring in nature, of transaction and integration related costs, costs associated with Windstream’s bankruptcy, costs associated with litigation claims made against us, costs associated with the implementation of our enterprise resource planning system, executive severance costs, costs related to the settlement with Windstream, amortization of non-cash rights-of-use assets, the write off of unamortized deferred financing costs, costs incurred as a result of the early repayment of debt, including early tender and redemption premiums and costs associated with the termination of related hedging activities, gains or losses on dispositions, changes in the fair value of contingent consideration and financial instruments, and other similar or infrequent items (although we may not have had such charges in the periods presented). Adjusted EBITDA includes adjustments to reflect the Company’s share of Adjusted EBITDA from unconsolidated entities. 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 three and nine months ended September 30, 2022 and 2021:

	Three Months Ended September 30, 2022
(Thousands)	Leasing		Fiber Infrastructure	Corporate		Subtotal of Reportable Segments
Revenues	$	208,623	74,480	$	—	$	283,103
Adjusted EBITDA	$	203,209	28,586	(6,742)		$	225,053
Less:
Interest expense						97,731
Depreciation and amortization	43,121		30,370	25		73,516
Transaction related and other costs						2,375
Gain on sale of real estate						(94)
Gain on sale of operations						(176)
Goodwill impairment						216,000
Other, net						600
Stock-based compensation						3,151
Income tax benefit						(13,056)
Adjustments for equity in earnings from unconsolidated entities						755
Net loss						$	(155,749)

	Three Months Ended September 30, 2021
(Thousands)	Leasing		Fiber Infrastructure		Corporate		Subtotal of Reportable Segments
Revenues	$	199,485	$	67,262	$	—	$	266,747
Adjusted EBITDA	$	194,303	$	27,556	$	(4,632)	$	217,227
Less:
Interest expense							94,793
Depreciation and amortization	41,432		29,036		62		70,530
Transaction related and other costs							1,063
Gain on sale of real estate							—
Gain on sale of operations							—
Other, net							4,472
Stock-based compensation							4,166
Income tax benefit							(2,244)
Adjustments for equity in earnings from unconsolidated entities							765
Net income							$	43,682

	Nine Months Ended September 30, 2022
(Thousands)	Leasing	Fiber Infrastructure	Corporate		Subtotal of Reportable Segments
Revenues	618,878	226,234	$	—	$	845,112
Adjusted EBITDA	602,531	93,628	(19,153)		$	677,006
Less:
Interest expense					290,280
Depreciation and amortization	127,738	89,440	98		217,276
Transaction related and other costs					7,324
Gain on sale of real estate					(344)
Gain on sale of operations					(176)
Goodwill impairment					216,000
Other, net					(6,534)
Stock-based compensation					9,664
Income tax benefit					(10,183)
Adjustments for equity in earnings from unconsolidated entities					2,816
Net loss					$	(49,117)

	Nine Months Ended September 30, 2021
(Thousands)	Leasing		Fiber Infrastructure		Corporate		Subtotal of Reportable Segments
Revenues	$	590,478	$	217,035	$	—	$	807,513
Adjusted EBITDA	$	577,937	$	86,716	$	(17,444)	$	647,209
Less:
Interest expense							341,762
Depreciation and amortization	124,132		86,838		195		211,165
Transaction related and other costs							5,624
Gain on sale of real estate							(442)
Gain on sale of operations							(28,143)
Other, net							14,569
Stock-based compensation							10,963
Income tax expense							283
Adjustments for equity in earnings from unconsolidated entities							2,609
Net income							$	88,819