Restatement of Previously Issued Financial Statements

9 Months Ended

Sep. 30, 2024

Restatement of Previously Issued Financial Statements

During the third quarter of 2023, the Company recorded a goodwill impairment and related income tax benefits, which it reflected in its unaudited condensed consolidated financial statements as of and for the three and nine months ended September 30, 2023 (the “2023 Interim Financial Statements”) included in the Company’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2023 filed with the SEC on November 2, 2023. As previously disclosed in the Company’s Annual Report on Form 10-K filed with the SEC on February 29, 2024, as amended by Amendment No. 1 and Amendment No. 2 thereto filed on Form 10-K/A with the SEC on March 26, 2024, and March 27, 2024, respectively (the “Annual Report”), during the fourth quarter of 2023, the Company identified certain errors with respect to the income tax benefit it recorded associated with the goodwill impairment. As a result, the goodwill impairment and income tax benefit were understated, netting to a $38.0 million increase in the net loss for the three and nine months ended September 30, 2023. As discussed in Note 2 to the Company’s consolidated financial statements included in the Annual Report, the Company had previously concluded that the error was immaterial, and the error was corrected as an immaterial correction to the 2023 Interim Financial Statements.

On October 30, 2024, the audit committee of the board of directors of the Company, in consultation with senior management of the Company, concluded that the error was material to the 2023 Interim Financial Statements and should have been reflected as a restatement of the 2023 Interim Financial Statements.

The impact of the restatement on our prior period unaudited condensed consolidated balance sheet, condensed consolidated statement of loss, condensed consolidated statement of comprehensive loss, and condensed consolidated statement of cash flows is presented below:


	As of September 30, 2023
(Thousands)	As Reported		Adjustments		As Restated
Goodwill	$	208,378	$	(50,998)	$	157,380
Deferred income taxes, net	$	90,792	$	13,035	$	103,827
Total Assets	$	4,981,325	$	(37,963)	$	4,943,362
Distributions in excess of accumulated earnings	$	(3,665,569)	$	(37,946)	$	(3,703,515)
Total Uniti shareholders' deficit	$	(2,446,730)	$	(37,946)	$	(2,484,676)
Operating partnership units	$	2,040	$	(17)	$	2,023
Total shareholders' deficit	$	(2,444,440)	$	(37,963)	$	(2,482,403)
Total Liabilities and Shareholders' Deficit	$	4,981,325	$	(37,963)	$	4,943,362


	Three Months Ended September 30, 2023
(Thousands)	As Reported		Adjustments		As Restated
Goodwill impairment	$	153,000	$	50,998	$	203,998
Loss before income taxes and equity in earnings from unconsolidated entities	$	(124,698)	$	(50,998)	$	(175,696)
Income tax benefit	$	(43,095)	$	(13,035)	$	(56,130)
Net loss	$	(80,933)	$	(37,963)	$	(118,896)
Net loss attributable to noncontrolling interest	$	(36)	$	(17)	$	(53)
Net loss attributable to shareholders	$	(80,897)	$	(37,946)	$	(118,843)
Net loss attributable to common shareholders	$	(81,223)	$	(37,946)	$	(119,169)
Earnings per share - Basic	$	(0.34)	$	(0.16)	$	(0.50)
Earnings per share - Diluted	$	(0.34)	$	(0.16)	$	(0.50)

Comprehensive loss:
Net loss	$	(80,933)	$	(37,963)	$	(118,896)
Comprehensive loss	$	(80,933)	$	(37,963)	$	(118,896)
Comprehensive loss attributable to noncontrolling interest	$	(36)	$	(17)	$	(53)
Comprehensive loss attributable to shareholders	$	(80,897)	$	(37,946)	$	(118,843)


	Nine Months Ended September 30, 2023
(Thousands)	As Reported		Adjustments		As Restated
Goodwill impairment	$	153,000	$	50,998	$	203,998
Loss before income taxes and equity in earnings from unconsolidated entities	$	(126,360)	$	(50,998)	$	(177,358)
Income tax benefit	$	(49,864)	$	(13,035)	$	(62,899)
Net loss	$	(74,506)	$	(37,963)	$	(112,469)
Net loss attributable to noncontrolling interest	$	(33)	$	(17)	$	(50)
Net loss attributable to shareholders	$	(74,473)	$	(37,946)	$	(112,419)
Net loss attributable to common shareholders	$	(75,378)	$	(37,946)	$	(113,324)
Earnings per share - Basic	$	(0.32)	$	(0.16)	$	(0.48)
Earnings per share - Diluted	$	(0.32)	$	(0.16)	$	(0.48)

Comprehensive loss:
Net loss	$	(74,506)	$	(37,963)	$	(112,469)
Comprehensive loss	$	(74,506)	$	(37,963)	$	(112,469)
Comprehensive loss attributable to noncontrolling interest	$	(33)	$	(17)	$	(50)
Comprehensive loss attributable to shareholders	$	(74,473)	$	(37,946)	$	(112,419)


	Nine Months Ended September 30, 2023
(Thousands)	As Reported		Adjustments		As Restated
Cash Flows from Operating Activities
Net Loss	$	(74,506)	$	(37,963)	$	(112,469)
Adjustments to reconcile net loss to net cash provided by operating activities:
Deferred income taxes	$	(50,161)	$	(13,035)	$	(63,196)
Goodwill impairment	$	153,000	$	50,998	$	203,998
Net cash provided by operating activities	$	190,575	$	—	$	190,575