CONSOLIDATED COMMUNICATIONS HOLDINGS, INC. Management report and analysis of the financial situation and operating results. (Form 10-K)

Reference is made to Part I - Item 1 - "Note About Forward-Looking Statements"
and Part I - Item 1A - "Risk Factors" which describes important factors that
could cause actual results to differ from expectations and non-historical
information contained herein. In addition, the following Management's Discussion
and Analysis of Financial Condition and Results of Operations ("MD&A") is
intended to help the reader understand the results of operations and financial
condition of Consolidated Communications Holdings, Inc. ("Consolidated," the
"Company," "we," "our" or "us").  MD&A should be read in conjunction with our
audited consolidated financial statements and accompanying notes to the
consolidated financial statements ("Notes") as of and for each of the three
years in the period ended December 31, 2021 included elsewhere in this Annual
Report on Form 10-K.

Throughout MD&A, we refer to certain measures that are not a measure of
financial performance in accordance with accounting principles generally
accepted in the United States ("US GAAP" or "GAAP").  We believe the use of
these non-GAAP measures on a consolidated basis provides the reader with
additional information that is useful in understanding our operating results and
trends. These measures should be viewed in addition to, rather than as a
substitute for, those measures prepared in accordance with GAAP.  See the
Non-GAAP Measures section below for a more detailed discussion on the use and
calculation of these measures.

Overview

Consolidated is a broadband and business communications provider offering a wide
range of communication solutions to consumer, commercial and carrier customers
across a service area in over 20 states.  We operate an advanced fiber network
spanning approximately 52,400 fiber route miles across many rural areas and
metro communities.  We offer residential high-speed Internet, video, phone and
home security services as well as multi-service residential and small business
bundles. Our business product suite includes: data and Internet solutions,
voice, data center services, security services, managed and IT services, and an
expanded suite of cloud services.  We provide wholesale solutions to wireless
and wireline carriers and other service providers including data, voice, network
connections and custom fiber builds and last mile connections.



We generate the majority of our consolidated operating revenues primarily from
monthly subscriptions to our broadband, data and transport services
(collectively "broadband services") marketed to residential and business
customers. As consumer demands for bandwidth continue to increase, our focus is
on expanding our fiber broadband services and upgrading data speeds in order to
offer a highly competitive fiber product. Our investment in more competitive
broadband speeds is critical to our long-term success.  Our strategic investment
with Searchlight Capital Partners L.P. ("Searchlight") combined with the
refinancing of our capital structure, as described below, has provided us with
additional capital that has enabled us to accelerate our fiber expansion plans
and provided significant benefits to our consumer, commercial and carrier
customers. With this strategic investment, we intend to enhance our fiber
infrastructure and accelerate our investments in high-growth and competitive
areas.  By leveraging our existing dense core fiber network and an accelerated
build plan, we expect to be able to significantly increase data speeds, expand
our multi-Gig coverage and strategically extend our network across our strong
existing commercial and carrier footprint to attract more on-net and near-net
opportunities.  As part of our fiber expansion plan, we plan to upgrade
approximately 1.6 million passings to fiber over five years across select
service areas to enable multi-Gig capable services to these homes and small
businesses including more than 1 million passings within our northern New
England service areas.

During the year ended December 31, 2021, we upgraded approximately 330,000
passings and added approximately 15,500 consumer fiber Gig-capable subscribers.
As of December 31, 2021, approximately 41% of the homes we serve on our legacy
Consolidated network had availability to broadband speeds of up to 1 Gbps
compared to 17% at December 31, 2020.  In our northern New England service
areas, approximately 14% of the homes we serve were 1 Gig capable as of December
31, 2021 compared to 4% at December 31, 2020. Our fiber build plan includes the
upgrade of an additional 400,000 homes and small businesses in 2022. In November
2021, we launched Fidium Fiber, our new Gigabit consumer fiber internet product
available in select northern New England markets, reinforcing our
broadband-first strategy. We expect to launch Fidium Fiber in other regions in
2022.

As we continue to increase broadband speeds, we believe that we will also be
able to simultaneously expand the array of services and content offerings that
our network provides. Commercial and carrier services represent the largest
source of our operating revenues and we are focused on expanding our broadband
and commercial product suite and are continually enhancing our commercial
product offerings to meet the needs of our business customers.  By leveraging
our advanced

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fiber network, we can tailor our services for business customers by developing
solutions to fit their specific needs.  Additionally, we are continuously
enhancing our suite of managed and cloud services by adding new functionality
and support, which increases efficiency and enables greater scalability and
reliability for businesses. We anticipate future momentum in commercial and
carrier services as these products gain traction as well as from the demand from
customers for additional bandwidth and data-based services.

However, operating revenues continue to be impacted by the industry-wide trend
of declines in voice services, access lines and related network access
revenue. Many customers are choosing to subscribe to alternative communication
services, and competition for these subscribers continues to increase. Total
voice connections decreased 8% as of December 31, 2021 compared to 2020. We have
been able to mitigate some of the access line losses through alternative product
offerings, such as our VoIP service.

Our competitive broadband speeds enable us to meet consumer demand for higher
bandwidth for streaming programming or on-demand content on any device.  The
consumers demand for streaming services, either to augment their current video
subscription plan or to entirely replace their linear video subscription may
impact our future video subscriber base and, accordingly, reduce our video
revenue as well as our video programing costs.  Total video connections
decreased 17% as of December 31, 2021 compared to 2020. We believe the trend in
changing consumer viewing habits will continue to impact our business results
and complement our strategy of providing consumers with higher broadband speeds
to facilitate streaming content including services offered through our streaming
partnerships.


Our operating revenues are impacted by legislative or regulatory changes at the
federal and state levels, which could reduce or eliminate the current subsidies
revenue we receive. A number of proceedings and recent orders relate to
universal service reform, inter-carrier compensation ("ICC") and network access
charges. Recent orders adopted in 2020 will result in a reduction in the federal
subsidies we receive of approximately $42.2 million annually beginning January
1, 2022. See the "Regulatory Matters" section below for a further discussion of
the subsidies we receive.

Important Recent Developments

Investment Projector


On September 13, 2020, we entered into an investment agreement (the "Investment
Agreement") with an affiliate of Searchlight.  In connection with the Investment
Agreement, affiliates of Searchlight have invested an aggregate of $425.0
million in the Company.  The investment commitment was structured in two stages.
 In the first stage of the transaction, which was completed on October 2, 2020,
Searchlight invested $350.0 million in the Company in exchange for 6,352,842
shares, or approximately 8%, of the Company's common stock and a contingent
payment right ("CPR") that was convertible, upon the receipt of certain
regulatory and shareholder approvals, into an additional 17,870,012 shares, or
16.9% of the Company's common stock.  In addition, Searchlight received the
right to an unsecured subordinated note with an aggregate principal amount of
approximately $395.5 million (the "Note"), which will be convertible into shares
of a new series of perpetual preferred stock of the Company with an aggregate
liquidation preference equal to the principal amount of the Note plus accrued
interest as of the date of conversion.

On July 15, 2021, the Company received all required state public utility
commission regulatory approvals necessary for the conversion of the CPR into
16.9% additional shares of the Company's common stock. As a result, the CPR was
converted into 17,870,012 shares of common stock, which were issued to
Searchlight on July 16, 2021.

In the second stage of the Investment, which was completed on December 7, 2021
following the receipt of Federal Communications Commission ("FCC") and certain
regulatory approvals and the satisfaction of certain other customary closing
conditions, Searchlight invested an additional $75.0 million and was issued the
Note. The Note bore interest at 9.0% per annum from the date of the closing of
the first stage of the transaction and was payable semi-annually in arrears. The
Note included a paid-in-kind ("PIK") option for a five-year period beginning as
of October 2, 2020. During the year ended December 31, 2021, the Company elected
the PIK option and accrued interest of $38.8 million was added to the principal
balance of the Note.  On December 7, 2021, Searchlight elected to convert the
Note into 434,266 shares of Series A Perpetual Preferred Stock, par value $0.01
per share (the "Series A Preferred Stock"). In addition, on December 7, 2021,
the CPR converted into an additional 15,115,899 shares, or an additional 10.1%,
of the Company's common stock.  As of December 31, 2021, shares of common stock
issued to Searchlight represent approximately 35% of the Company's outstanding
common stock. The strategic investment with Searchlight provides us a valued
partner with significant

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experience in deploying broadband infrastructure as we continue to execute our fiber-first strategy and expand broadband services.

Refinancing of long-term debt


On October 2, 2020, the Company and certain of its wholly-owned subsidiaries
completed a refinancing of our long-term debt through the issuance of $2,250.0
million in new secured debt and retired all of our then existing outstanding
debt obligations.  As described in the "Liquidity and Capital Resources"
section, we entered into a new credit agreement which consisted of term loans in
the original aggregate amount of $1,250.0 million and a $250.0 million revolving
credit facility. On October 2, 2020, we also issued $750.0 million aggregate
principal amount of 6.50% senior secured notes due 2028. On January 15, 2021,
the Company issued an additional $150.0 million aggregate principal amount of
incremental term loans under the credit agreement. On March 18, 2021, we issued
$400.0 million aggregate principal amount 5.00% Senior Notes and used the net
proceeds from the issuance of notes to repay $397.0 million of the term loans
outstanding under the credit agreement. On April 5, 2021, we entered into an
amendment to the credit agreement to refinance the outstanding term loans, which
reduced the combined interest rate margin and LIBOR floor by 1.5%. The
refinancing extended the maturities of our debt obligations and improved our
liquidity, which, combined with the strategic investment with Searchlight,
provides us the immediate flexibility to support our planned expansion of our
fiber network and revenue growth plan.

Assignment


On September 22, 2021, we entered into a definitive agreement to sell
substantially all of the assets of our non-core, rural ILEC business located in
Ohio, Consolidated Communications of Ohio Company ("CCOC"), for approximately
$26.0 million in cash, subject to a customary working capital adjustment.  CCOC
provides telecommunications and data services to residential and business
customers in 11 rural communities in Ohio and surrounding areas and includes
approximately 4,000 access lines and 3,900 data connections. The asset sale
aligns with our strategic asset review and focus on our core broadband regions.
As of December 31, 2021, the assets and liabilities to be disposed of were
classified as held for sale in the condensed consolidated balance sheet and
consisted primarily of allocated goodwill of $16.3 million and property, plant
and equipment of $9.5 million. In connection with the classification as assets
held for sale, we recognized an impairment loss of $5.7 million during the year
ended December 31, 2021.  Subsequent to December 31, 2021, the parties received
all required regulatory approvals and the transaction closed on February 1,
2022.

Subsequent to December 31, 2021, we entered into a definitive agreement on March
2, 2022 to sell substantially all the assets of our business located in the
Kansas City market (the "Kansas City operations"). The Kansas City operations
provides data, voice and video services to customers within the Kansas City
metropolitan area and surrounding counties and includes approximately 19,000
consumer customers and 1,900 commercial customers. The transaction is expected
to close in the second half of 2022 and is subject to the receipt of all
customary regulatory approvals and the satisfaction of other closing conditions.
We estimate that the pre-tax impairment loss to be recognized during the quarter
ended March 31, 2022 will range from $125.0 million to $130.0 million, which
includes approximately $90.0 million in allocated goodwill.

Covid-19 pandemic


We are closely monitoring the ongoing impact on our business of the coronavirus
("COVID-19") pandemic.  We are taking precautions to ensure the safety of our
employees, customers and business partners, while assuring business continuity
and reliable service and support to our customers. Health and safety measures
implemented include transitioning to remote work-from-home policies, providing
our field technicians with personal protective equipment and additional safety
training, practicing social distancing and adding call aheads for work that must
be performed inside customer premises.  While we have not seen a material
adverse impact to our financial results from COVID-19 to date, the extent of the
future impact of the COVID-19 pandemic on our business is highly uncertain and
difficult to predict.  If the pandemic worsens or new variants of the virus
become more dominant and were to cause significant negative impacts to economic
conditions, our results of operations, financial condition and liquidity could
be materially and adversely impacted.  See Part I, Item 1A - "Risk Factors."

At March 27, 2020the Coronavirus Aid, Relief, and Economic Security Act (“CARES Act”) was enacted by the we government as an emergency economic stimulus package that includes spending and tax relief to bolster the we
economy and fund a national effort to reduce the economic effects of COVID-19. The CARES Act included, among


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other things, deferral of certain employer payroll tax payments and certain
income tax law changes including modifications to the net interest deduction
limitations.  In 2020, we deferred the payment of approximately $12.0 million
for the employer portion of Social Security taxes otherwise due in 2020 with 50%
due by December 31, 2021 and the remaining 50% by December 31, 2022.  The
portion of the taxes deferred until 2021 were paid during the third quarter of
2021. On March 11, 2021, the American Rescue Plan Act of 2021 ("ARPA") was
enacted and provides further economic relief to address the continued economic
impact of COVID-19.  To date, these acts have not had a material impact on our
consolidated financial statements, although we will continue to monitor the
impact of any effects from these acts and other future legislation.

Operating results

The following tables reflect our financial results on a consolidated basis and
key operating statistics as of and for the years ended December 31, 2021, 2020
and 2019.

                                 Financial Data

                                                                                        % Change
                                                                                  2021 vs.    2020 vs.
(In millions, except for percentages)        2021         2020         2019         2020        2019
Operating Revenues
Commercial and carrier:
Data and transport services (includes
VoIP)                                      $   362.3    $   362.1    $   355.3           0 %         2 %
Voice services                                 171.8        181.7        188.3         (5)         (4)
Other                                           41.6         45.1         52.9         (8)        (15)
                                               575.7        588.9        596.5         (2)         (1)
Consumer:
Broadband (Data and VoIP)                      269.3        263.1        257.1           2           2
Video services                                  65.1         74.3         81.4        (12)         (9)
Voice services                                 160.7        170.5        180.8         (6)         (6)
                                               495.1        507.9        519.3         (3)         (2)
Subsidies                                       69.8         72.0         72.4         (3)         (1)
Network access                                 120.5        125.3        138.1         (4)         (9)
Other products and services                     21.1          9.9         10.2         113         (3)
Total operating revenues                     1,282.2      1,304.0      

1,336.5 (2) (2)


Operating Expenses
Cost of services and products
(exclusive of depreciation and
amortization)                                  569.6        560.6        574.9           2         (2)
Selling, general and administrative
costs                                          271.1        275.4        299.1         (2)         (8)
Acquisition and other transaction
costs                                              -          7.6            -       (100)         100
Loss on impairment of assets held for
sale                                             5.7            -            -         100           -
Depreciation and amortization                  300.6        324.9        381.2         (7)        (15)
Total operating expenses                     1,147.0      1,168.5     
1,255.2         (2)         (7)
Income from operations                         135.2        135.5         81.3         (0)          67
Interest expense, net                        (175.2)      (143.6)      (136.7)          22           5
Gain (loss) on extinguishment of debt         (17.1)       (18.3)          4.5         (7)       (507)
Change in fair value of contingent
payment rights                                (86.5)         23.8            -       (463)         100
Other income, net                               43.2         50.8         27.2        (15)          87
Income tax expense (benefit)                     6.3         10.9        (3.7)        (42)         395
Net income (loss)                            (106.7)         37.3       (20.0)       (386)         287
Dividends on Series A preferred stock            2.7            -            -         100           -
Net income attributable to
noncontrolling interest                          0.4          0.3          0.4          33        (25)
Net income (loss) attributable to
common shareholders                        $ (109.8)    $    37.0    $  (20.4)       (397)         281

Adjusted EBITDA (1)                        $   506.9    $   529.2    $   523.5         (4) %         1 %


(1) A non-GAAP measure.  See the "Non-GAAP Measures" section below for additional
    information and reconciliation to the most directly comparable GAAP measure.


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                            Key Operating Statistics

                                                                     % Change
                                                               2021 vs.    2020 vs.
                               2021       2020       2019        2020        2019
Consumer customers            516,949    554,763    582,818         (7) %       (5) %
Consumer data connections     384,564    401,357    417,410         (4)         (4)
Consumer voice connections    328,849    370,660    404,943        (11)         (8)
Video connections              63,447     76,041     84,171        (17)        (10)


Operating Revenues

Commercial and Carrier

Data and Transport Services

We provide a variety of business communication services to business customers of
all sizes, including voice and data services over our advanced fiber
network. The services we offer include scalable high-speed broadband Internet
access and VoIP phone services, which range from basic service plans to virtual
hosted systems.  In addition to Internet and VoIP services, we also offer a
variety of commercial data connectivity services in select markets including
Ethernet services; private line data services; software defined wide area
network ("SD-WAN") and multi-protocol label switching.  Our networking services
include point-to-point and multi-point deployments from 2.5 Mbps to 10 Gbps to
accommodate the growth patterns of our business customers. We offer a suite of
cloud-based services, which includes a hosted unified communications solution
that replaces the customer's on-site phone systems and data networks, managed
network security services and data protection services.  Data center and
disaster recovery solutions provide a reliable and local colocation option for
commercial customers. We also offer wholesale services to regional and national
interexchange and wireless carriers, including cellular backhaul and other fiber
transport solutions.

Data and transport services revenues increased $0.2 million during 2021 compared
to 2020 due to continued growth in Metro Ethernet and SD-WAN services, which was
largely offset by a decline in carrier services and cellular backhaul in 2021 as
a result of price compression and a reduction in pricing of recent contract
renewals with our wireless backhaul partners.  Data and transport services
revenues increased $6.8 million during 2020 compared to 2019 primarily due to
growth in Metro Ethernet and VoIP services. In recent years, the growth in data
and transport services revenues has been impacted by increased competition and
price compression as customers are migrating from legacy data connection
products to more competitive Ethernet based products, which have a lower average
revenue per user. In addition, recent and ongoing contract renewals with our
wireless backhaul partners have also resulted in a decline in pricing. Future
declines are expected to be partially offset with the increasing demand for
bandwidth and other Ethernet services.

Voice services

Voice services include basic local phone and long-distance service packages for
business customers. The plans include options for voicemail, conference calling,
linking multiple office locations and other custom calling features such as
caller ID, call forwarding, speed dialing and call waiting.  Services can be
charged at a fixed monthly rate, a measured rate or can be bundled with selected
services at a discounted rate.

Voice services revenues decreased $9.9 million during 2021 compared to 2020
primarily due to a 9% decline in access lines in 2021 compared to 2020.  Voice
services revenues decreased $6.6 million during 2020 compared to 2019 primarily
due to a 7% decline in access lines in 2020 compared to 2019.  Commercial
customers are increasingly choosing alternative technologies, including our own
VoIP product, and the broad range of features that Internet-based voice services
can offer.

Other

Other services include business equipment sales and related hardware and
maintenance support, video services and other miscellaneous revenues, including
911 service revenues. We are a full service 911 provider and have installed and
maintained two turn-key, state of the art statewide next-generation emergency
911 systems. These systems, located in Maine and Vermont, have processed several
million calls relying on the caller's location information for routing. As of
October 29, 2020, we were no longer the 911 service provider in Vermont.
Next-generation emergency 911 systems are

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an improvement over traditional 911 and should provide the foundation for handling future modes of communication such as SMS and video.

Other services revenues decreased $3.5 million during 2021 compared to 2020
primarily due to the expiration of our 911 service contract in Vermont as well
as decreases in pole attachment and custom construction revenues. Other services
revenues decreased $7.8 million during 2020 compared to 2019 primarily due to a
decrease in business system sales in 2020.

Consumer

Broadband services


Broadband services include revenues from residential customers for subscriptions
to our VoIP and data products.  We offer high-speed Internet access at speeds of
up to 1 Gbps, depending on the network facilities that are available, the level
of service selected and the location.  Our VoIP digital phone service is also
available in certain markets as an alternative to the traditional telephone
line. CCiTV, which is a customizable, cloud-enabled video service, supports a
wide variety of viewing habits and provides an app-based approach to video
services. Content can be delivered in high-definition quality to a big-screen
TV, as well as to tablets and mobile devices.

Broadband services revenues increased $6.2 million during 2021 compared to 2020
and $6.0 million during 2020 compared to 2019 despite a 4% decrease in broadband
connections in both 2021 and 2020 primarily due to an increase in Internet
services as a result of price increases as well as growth in CCiTV revenue.

However, the increase in broadband revenue was partially offset by a decline in VoIP revenue due to a 15% drop in connections in 2021 and 2020.

Video Services

Depending on geographic market availability, our video services range from
limited basic service to advanced digital television, which includes several
plans, each with hundreds of local, national and music channels including
premium and Pay-Per-View channels as well as video On-Demand service.  Certain
customers may also subscribe to our advanced video services, which consist of
high-definition television, digital video recorders ("DVR") and/or a whole home
DVR.  Our video subscribers can also watch their favorite shows, movies and
livestreams on any device.  In addition, we offer several in-demand streaming TV
services, which provide endless entertainment options.

Revenue from video services fell $9.2 million in 2021 compared to 2020 mainly due to an 18% decline in connections in 2021 compared to 2020. Video services revenue decreased $7.1 million in 2020 compared to 2019 mainly due to a 10% drop in connections in 2020 compared to 2019.

We

expect to continue to experience a decline in video connections as consumers choose to subscribe to alternative video services such as over-the-top streaming services.


Voice Services



We offer several different basic local phone service packages and long-distance
calling plans, including unlimited flat-rate calling plans. The plans include
options for voicemail and other custom calling features such as caller ID, call
forwarding and call waiting.

Voice services revenues decreased $9.8 million during 2021 compared to 2020
primarily due to a 11% decline in access lines during 2021 compared to 2020.
Voice services revenues decreased $10.3 million during 2020 compared to 2019
primarily due to an 8% decline in access lines during 2020 compared to 2019.

The number of local access lines in service directly affects the recurring revenue we generate from end users and continues to be impacted by the industry-wide decline in access lines. We expect to continue to experience voice connection erosion due to competition from alternative technologies, including our own competitive VoIP product.

Subsidies


Subsidies consist of both federal and state subsidies, which are designed to
promote widely available, quality broadband services at affordable prices with
higher data speeds in rural areas.  Subsidies revenues decreased $2.2 million
during 2021 compared to 2020 and $0.4 million in 2020 compared to 2019 primarily
due to a reduction in state subsidies support.  We

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anticipate future declines in federal subsidies support.  In 2020, the FCC
adopted an order establishing the Rural Digital Opportunity Fund ("RDOF"), which
will result in a reduction in our annual support of approximately $42.2 million
beginning January 1, 2022. See the "Regulatory Matters" section below for a
further discussion of the subsidies we receive.

Network Access services

Network access services include interstate and intrastate switched access,
network special access and end user access. Switched access revenues include
access services to other communications carriers to terminate or originate
long-distance calls on our network. Special access circuits provide dedicated
lines and trunks to business customers and interexchange carriers.  Network
access services revenues decreased $4.8 million during 2021 compared to 2020 and
$12.8 million in 2020 compared to 2019 primarily as a result of the continuing
decline in interstate rates, minutes of use, voice connections and carrier
circuits; however, a portion of the decrease can be attributed to carriers
shifting to our fiber Metro Ethernet product, contributing to the growth in
that
area.

Other Products and Services

Other products and services include revenues from telephone directory
publishing, video advertising, billing and support services and other
miscellaneous revenues. We have entered into numerous Public Private Partnership
agreements with several towns in New Hampshire to build new FTTP Internet
networks.  The new town networks provide broadband speeds of up to 1 Gbps to
residential and commercial customers. Public Private Partnerships are a key
component of Consolidated's commitment to expand rural broadband access.

Revenue from other products and services increased $11.2 million in 2021 compared to 2020 mainly due to the recognition of revenue from Private public partnership construction projects in 2021. Revenue from other products and services decreased $0.3 million in 2020 compared to 2019 primarily due to lower telephone book advertising revenue.

Functionnary costs

Cost of services and products


Cost of services and products increased $9.0 million during 2021 compared to
2020 primarily due to an increase in access expense related to fiber costs for
the Public Private Partnership agreements, as described above. In addition,
during 2021, we incurred access charges of $3.4 million related to the early
termination of a contract obligation for fixed wireless services. Required
contributions to the Federal Universal Service Fund ("USF") also increased in
2021 as a result of an increase in the annual funding rate. The increase in cost
of services and products was also due to insurance recoveries received in 2020.
However, employee labor costs declined due to an increase in capitalized costs
for the fiber network expansion in 2021 as well as a reduction in headcount.
Video programming costs decreased as a result of a decline in video connections.
Contract labor costs and repair and maintenance expense also decreased as a
result of operating efficiencies and a reduction in maintenance costs for
utility poles.

In 2020, cost of services and products decreased $14.3 million compared to 2019
primarily due to a reduction in video programming costs as a result of a 10%
decline in video connections, which was offset in part by an increase in
programming costs per channel as costs continue to rise as a result of annual
rate increases.  Video programming costs are impacted by license fees charged by
cable networks, the amount and quality of the content we provide and the number
of video subscribers we serve. Cost of goods sold related to equipment sales
also decreased from a decline in business system sales in 2020. Employee
salaries and benefits declined in 2020 as a result of a reduction in staff
through continued cost savings initiatives. Cost of services and products was
also reduced by insurance recoveries received in 2020 for hurricane damage
incurred in prior years.  However, access expense increased due to new fiber and
co-location costs as a result of an increase in commercial and carrier services.


Selling, general and administrative expenses


Selling, general and administrative costs decreased $4.3 million during 2021
compared to 2020 primarily due to a reduction in property and real estate taxes
as a result of property tax refunds and settlements received in 2021. However,
advertising expense increased from additional radio and television advertising
to promote our new Fidium brand and fiber broadband speeds.

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Selling, general and administrative costs decreased $23.7 million during 2020
compared to 2019 primarily due a decline in integration and severance costs in
connection with cost savings initiatives.  Employee salaries and benefits also
declined in 2020 as a result of a reduction in headcount.  In addition, contract
labor costs decreased as a result of operating efficiency improvements.
However, customer acquisition costs increased related to the amortization of
sales commissions following the adoption of ASC 606.  Real estate taxes also
increased due to property tax abatements received in 2019.

Acquisition costs and other transaction costs


Acquisition and other transaction costs of $7.6 million includes costs incurred
in 2020 in connection with the investment agreement entered into with
Searchlight in October 2020. Transaction costs consist primarily of legal,
finance and other professional fees incurred in connection with the CPRs issued
as part of the transaction.

Depreciation and amortization


Depreciation and amortization expense decreased $24.3 million during 2021
compared to 2020 primarily due to a decline in amortization expense for customer
relationships, which are amortized under the accelerated method. Depreciation
expense also declined due to the sale of utility poles located in the state of
New Hampshire in 2020 and certain acquired assets becoming fully depreciated or
amortized. These declines in depreciation and amortization expense were offset
in part by ongoing capital expenditures related to the fiber network expansion
and customer service improvements.

Depreciation and amortization expense decreased $56.3 million during 2020
compared to 2019 primarily due to acquired assets becoming fully depreciated or
amortized.  Depreciation expense also declined due to the sale of utility poles
located in the state of Vermont in 2019. These declines in depreciation and
amortization expense were offset in part by ongoing capital expenditures related
to CAF Phase II funding requirements and success-based capital projects for
consumer, commercial and carrier services as well as network enhancements and
customer service improvements.

Regulatory issues


Our revenues are subject to broad federal and/or state regulations, which
include such telecommunications services as local telephone service, network
access service and toll service.  The telecommunications industry is subject to
extensive federal, state and local regulation. Under the Telecommunications Act
of 1996, federal and state regulators share responsibility for implementing and
enforcing statutes and regulations designed to encourage competition and to
preserve and advance widely available, quality telephone service at affordable
prices.

At the federal level, the FCC generally exercises jurisdiction over facilities
and services of local exchange carriers, such as our rural telephone companies,
to the extent they are used to provide, originate or terminate interstate or
international communications. The FCC has the authority to condition, modify,
cancel, terminate or revoke our operating authority for failure to comply with
applicable federal laws or FCC rules, regulations and policies. Fines or
penalties also may be imposed for any of these violations.

State regulatory commissions generally exercise jurisdiction over carriers'
facilities and services to the extent they are used to provide, originate or
terminate intrastate communications. In particular, state regulatory agencies
have substantial oversight over interconnection and network access by
competitors of our rural telephone companies. In addition, municipalities and
other local government agencies regulate the public rights-of-way necessary to
install and operate networks. State regulators can sanction our rural telephone
companies or revoke our certifications if we violate relevant laws or
regulations.

FCC Questions


In general, telecommunications service in rural areas is costlier to provide
than service in urban areas. The lower customer density means that switching and
other facilities serve fewer customers and loops are typically longer, requiring
greater expenditures per customer to build and maintain. By supporting the
high-cost of operations in rural markets, USF subsidies promote widely
available, quality telephone service at affordable prices in rural areas.

Our annual support through the FCCit’s Connect America Fund (“CAF”) Funding for Phase II has been $48.1 million until 2021. Specific obligations associated with CAF Phase II funding included the obligation to serve approximately


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124,500 locations by December 31, 2020 (with interim milestones of 40%, 60% and
80% completion by December 2017, 2018 and 2019, respectively); to provide
broadband service with speeds of 10 Mbps downstream and 1 Mbps upstream; to
achieve latency of less than 100 milliseconds; to provide data of at least 100
gigabytes per month; and to offer pricing reasonably comparable to pricing in
urban areas. The Company met the buildout milestones and performance metrics
requirements for 2017 through 2020 for all states where it received funding.

We accepted CAF Phase II support in all of our operating states except Colorado
and Kansas, where we declined the offered CAF Phase II support.  We continued to
receive annual frozen CAF Phase I support of $1.0 million in Colorado and Kansas
until April 2019, when the FCC CAF Phase II auction assigned support to another
provider.

The annual FCC price cap filing was made on June 16, 2021 and became effective
on July 1, 2021.  The net impact is a decrease of approximately $3.3 million in
network access and CAF ICC support funding for the July 2021 through June 2022
tariff period.

In April 2019, the FCC announced plans for the RDOF, the next phase of the CAF
program. The RDOF is a $20.4 billion fund to bring speeds of 25 Mbps downstream
and 3 Mbps upstream to unserved and underserved areas of America. The FCC issued
a Notice of Proposed Rulemaking at their August 2019 Open Commission Meeting.
The order prioritizes terrestrial broadband as a bridge to rural 5G networks by
providing a significant weight advantage to traditional broadband providers.
Funding will occur in two phases with the first phase auctioning $16.0 billion
and the second phase auctioning $4.4 billion, each to be distributed over
10 years. The minimum speed required to receive funding is 25 Mbps downstream
and 3 Mbps upstream. CAF Phase II funding was extended through December 31, 2021
for price cap holding companies. The FCC issued the final census block groups
with locations and reserve price. We filed the RDOF short form application on
July 14, 2020 and were listed as a qualified bidder by the FCC on October 13,
2020 and participated in the auction. The auction began on October 29, 2020 and
ended on November 24, 2020. Consolidated won 246 census block groups serving in
seven states. The bids we won are at the 1 Gbps downstream and 500 Mbps upstream
speed tier to approximately 27,000 locations at an annual funding level of
$5.9 million, which will result in a reduction of approximately $42.2 million in
annual support beginning January 1, 2022 through December 31, 2031. Consolidated
filed its long form application with supporting documents on January 29, 2021
and received final FCC approval on December 14, 2021.

State Matters

Texas


The Texas Universal Service Fund ("TUSF") is administered by the National
Exchange Carrier Association ("NECA").  The Texas Public Utilities Regulatory
Act directs the Public Utilities Commission of Texas ("PUCT") to adopt and
enforce rules requiring local exchange carriers to contribute to a state
universal service fund that helps telecommunications providers offer basic local
telecommunications service at reasonable rates in high-cost rural areas.  The
TUSF is also used to reimburse telecommunications providers for revenues lost by
providing lifeline service.  Our Texas rural telephone companies receive
disbursements from this fund.

Our Texas incumbent local exchange carriers (“ILECs”) have historically received support from two state funds, the Small and Rural Incumbent Local Exchange Carrier Plan High Cost Funds (“HCF”) and the High Cost Relief Fund (“HCAF”).

 In December 2020, the PUCT announced a TUSF funding shortfall and would be
reducing all funded carriers support by 64% beginning January 15, 2021.  The
Texas Telephone Association ("TTA"), which Consolidated is a member, and the
Texas Statewide Telephone Cooperative, Inc. ("TSTCI"), filed a lawsuit seeking
to overturn the PUCT decision as well as a temporary injunction on the funding
reduction.  On June 7, 2021, the court ruled in favor of the PUCT.  The TTA and
TSTCI filed a notice to appeal on July 2, 2021.  We filed our brief on September
18, 2021, along with a Motion to Expedite.  The defendant's response was due
October 21, 2021, unless the motion to expedite was granted.  The potential
impact is a reduction in support of approximately $4.0 million annually.

Funding for the Coronavirus Aid, Relief, and Economic Security Act

States are exploring opportunities to use federal funding from the Coronavirus Aid, Relief, and Economic Security Act (“CARES Act”) to help roll out broadband to unserved and underserved areas of their respective states.

In

2020, New Hampshire assigned $50.0 million CARES Act funding to fund broadband expansion to unserved and underserved locations across the state.

consolidation has been granted until $3.5 million build high-speed Internet networks to


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homes and businesses in New Hampshire for the towns of Danbury, Springfield and
Mason.  The state funded 10% upfront with the remainder received upon completion
of projects in December 2020.

Funding the US Bailout Act


President Biden signed the American Rescue Plan Act of 2021 ("ARPA") on March
11, 2021.  States have been allocated federal funds to be utilized for capital
infrastructure, including broadband deployment, and are in various stages of
implementation.  We are working with the states and municipalities to
participate in this broadband grant program.

COVID-19[female[feminine


On March 13, 2020, the FCC issued a pledge to Keep America Connected through May
13, 2020, which was later extended to June 30, 2020.  The pledge asked all
communications providers to not terminate service to any residential or small
business customers because of their inability to pay their bills due to the
disruptions caused by the coronavirus pandemic; to waive any late fees that any
residential or small business customers incur because of their economic
circumstances related to the coronavirus pandemic; and to open their Wi-Fi
hotspots to any American who needs them.  Consolidated signed on to the pledge
through June 30, 2020.  Several states took the FCC pledge a step further by not
allowing any carrier to disconnect service within their state during the
Governors' declared state of emergency, which Consolidated also supported.  Most
state moratoriums on disconnections have expired; however, certain states such
as Washington and New York were extended to July 31, 2021 and December 31, 2021,
respectively.

In February 2021, the FCC created the Emergency Broadband Benefit Program
("EBB"), a temporary program to help low income households stay connected during
the COVID-19 pandemic by providing broadband service discounts for eligible
households.  Consolidated is a participant in this program.  The EBB ended
December 31, 2021.  EBB recipients fully enrolled as of December 31, 2021 will
automatically continue to receive their current monthly benefit until March 1,
2022 when the Affordable Connectivity Program takes its place.

Affordable Connectivity Program


The Affordable Connectivity Program ("ACP") is a permanent broadband
affordability program set up to replace the EBB.  The ACP program helps ensure
that households can afford the broadband access they need for work, school,
healthcare and more.  The benefit provides a discount of up to $30 per month
toward internet service for eligible households and up to $75 per month for
households on qualifying Tribal lands.  Eligible households can also receive a
one-time discount of up to $100 to purchase a laptop, desktop computer, or
tablet from participating providers if they contribute more than $10 and less
than $50 toward the purchase price.  The ACP is limited to one monthly service
discount and one device discount per household.  The program begins funding
March 1, 2022.  Consolidated will be participating in this program.

Investment in infrastructure and employment law

The Infrastructure Investment and Jobs Act (the "Infrastucture Act") passed on
March 31, 2021 included $65.0 billion toward broadband.  The broadband internet
portion of the Infrastructure Act is aimed at increasing internet coverage for
more universal access, including for rural, low-income, and tribal communities.

65% of this funding is earmarked specifically for underserved communities.

Additionally, this measure is designed to help make Internet access more affordable and increase digital literacy.

The Infrastructure Act set aside $42.5 billion for Broadband Equity, Access and
Deployment grants.  The National Telecommunications and Information
Administration administers the grant program and is in the process of soliciting
comments before issuing final rules.



Other Regulatory Issues

We are also subject to a number of regulatory proceedings occurring at the
federal and state levels that may have a material impact on our operations. The
FCC and state commissions have authority to issue rules and regulations related
to our business. A number of proceedings are pending or anticipated that are
related to such telecommunications issues as competition, interconnection,
access charges, ICC, broadband deployment, consumer protection and universal
service reform. Some proceedings may authorize new services to compete with our
existing services. Proceedings that relate to our cable television operations
include rulemakings on set top boxes, carriage of programming, industry
consolidation and

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ways to promote additional competition. There are various on-going legal
challenges to the scope or validity of FCC orders that have been issued. As a
result, it is not yet possible to fully determine the impact of the related FCC
rules and regulations on our operations.

Non-operating items

Interest expense, net

Interest expense, net of interest income, increased $31.6 million in 2021 compared to 2020. Interest expense, including amortized costs, on the note issued to Searchlight under the investment agreement entered into in
October 2020 increase $29.2 million in 2021.


Interest expense, net of interest income, increased $6.9 million during 2020
compared to 2019 primarily due to additional interest of $7.9 million recognized
on the Note issued to Searchlight as part of the investment agreement entered
into in October 2020.  Interest on our outstanding senior notes also increased
in 2020 due to the issuance of $750.0 million in 6.50% Senior Notes due 2028,
which were used in part, to redeem the then-remaining amount of our outstanding
6.50% Senior Notes due 2022 as part of the refinancing of our long-term debt in
October 2020 as described in the "Liquidity and Capital Resources" section
below.  However, interest expense was reduced in part by a reduction in
outstanding debt under our revolving credit facility and a decline in variable
interest rates in 2020.

Loss on extinguishment of debt


As described in the "Liquidity and Capital Resources" section below, we incurred
a loss on the extinguishment of debt of $17.1 million in connection with the
repayment of $397.0 million of outstanding term loans under our credit agreement
and the refinancing of our credit agreement during the year ended December 31,
2021.

In 2020, we incurred a loss on the extinguishment of debt of $18.3 million in
connection with the refinancing of our credit agreement and the redemption of
our 6.50% Senior Notes due 2022 during the year ended December 31, 2020.

Change in fair value of contingent payment obligations


Our contingent payment obligations were measured at fair value until they were
converted into shares of the Company's common stock.  During the years ended
December 31, 2021 and 2020, we recognized a loss of $86.5 million and a gain of
$23.8 million, respectively, on the change in the fair value of the contingent
payment rights issued to Searchlight.

Other income

Other income decreased $7.6 million during 2021 compared to 2020. In 2021, we
recognized a loss of $3.6 million on the disposition of wireless spectrum
licenses. In 2020, we recognized a gain of $3.7 million on the sale of our 39
GHz wireless spectrum licenses as part of the FCC's efforts to reclaim broadcast
TV spectrum for wireless use.  Pension and post-retirement benefit expense
increased $0.5 million as the reduction in annual expense was offset by a
pension settlement charge of $5.9 million recognized during the year ended
December 31, 2021 as a result of the transfer of the pension liability for a
select group of retirees to an annuity provider. See Note 13 to the consolidated
financial statements for a more detailed discussion regarding our pension and
other post-retirement plans. Investment income increased $1.2 million during
2021 from our wireless partnership interests.

Other income increased $23.6 million in 2020 compared to 2019 mainly due to a decrease in the pension expense and post-employment benefits of $15.5 million.

 During the year ended December 31, 2019, we recognized a pension settlement
charge of $6.7 million as a result of the transfer of the pension liability for
a select group of retirees to an annuity provider. Investment income increased
$3.0 million during 2020 from our wireless partnership interests.  In addition,
during 2020, we recognized a gain of $3.7 million on the sale of our 39 GHz
wireless spectrum licenses as part of the FCC's efforts to reclaim broadcast TV
spectrum for wireless use.

Income taxes


Income taxes decreased $4.6 million in 2021 compared to 2020.  Our effective tax
rate was (6.3)% for 2021 compared to 22.7% for 2020.  In 2021 and 2020, we
placed additional valuation allowances on deferred tax assets related to state
NOL and state tax credit carryforwards of $1.7 million and $1.3 million,
respectively.  On September 22, 2021, we entered into a definitive agreement to
sell substantially all of the assets of our non-core, rural ILEC business
located in Ohio (the "Ohio

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transaction").  As a result, we recorded an increase to our current tax expense
of $1.5 million related to the $5.7 million impairment loss of noncash goodwill
that is not deductible for tax purposes. We also recognized approximately $2.6
million of tax benefit in the fourth quarter of 2021 to adjust our 2020
provision to match our 2020 returns compared to $0.5 million of tax benefit in
the fourth quarter of 2020 to adjust our 2019 provision to match our 2019
returns. In addition, the investment made by Searchlight in 2020 is treated as a
contribution of equity for federal tax purposes.  Accordingly, the impact of the
non-cash PIK interest expense, discount and issuance costs, and fair value
adjustments on the CPR are not recognized for federal income tax purposes,
resulting in an increase of $33.1 million and a decrease of $1.6 million to our
current tax expense for 2021 and 2020, respectively.  In addition, for 2021 and
2020, the effective tax rate differed from the federal and state statutory rates
due to various permanent income tax differences and differences in allocable
income for the Company's state tax filings.  Exclusive of these discrete
adjustments, our effective tax rate for 2021 would have been approximately 26.8%
compared to 24.8% for 2020.

Income taxes increased $14.6 million in 2020 compared to 2019.  The increase was
primarily related to the change in pretax income.  Our effective tax rate was
22.7% for 2020 compared to 15.7% for 2019.  In 2020 and 2019, we placed
additional valuation allowances on deferred tax assets related to state NOL and
state tax credit carryforwards of $1.3 million and $1.1 million, respectively.
The investment transaction with Searchlight on October 2, 2020 resulted in a net
decrease to our tax provision of $1.6 million due to various permanent income
taxes differences.  In addition, for 2020 and 2019, the effective tax rate
differed from the federal and state statutory rates due to various permanent
income tax differences and differences in allocable income for the Company's
state tax filings.  Exclusive of discrete adjustments, our effective tax rate
for 2020 would have been approximately 24.8% compared to 27.1% for 2019.

Non-GAAP Measures

In addition to the results reported in accordance with US GAAP, we also use
certain non-GAAP measures such as EBITDA and Adjusted EBITDA to evaluate
operating performance and to facilitate the comparison of our historical results
and trends. These financial measures are not a measure of financial performance
under US GAAP and should not be considered in isolation or as a substitute for
net income as a measure of performance and net cash provided by operating
activities as a measure of liquidity. They are not, on their own, necessarily
indicative of cash available to fund cash needs as determined in accordance with
GAAP. The calculation of these non-GAAP measures may not be comparable to
similarly titled measures used by other companies. Reconciliations of these
non-GAAP measures to the most directly comparable financial measures presented
in accordance with GAAP are provided below.

EBITDA is defined as net earnings before interest expense, income taxes, and
depreciation and amortization.  Adjusted EBITDA is comprised of EBITDA, adjusted
for certain items as permitted or required under our credit facility as
described in the reconciliations below.  These measures are a common measure of
operating performance in the telecommunications industry and are useful, with
other data, as a means to evaluate our ability to fund our estimated uses of
cash.

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The following tables present a reconciliation of net income and adjusted EBITDA for the years ended December 31, 20212020 and 2019:


                                                            Year Ended December 31,
(In thousands, unaudited)                              2021           2020          2019
Net income (loss)                                   $ (106,693)    $   37,302    $ (19,931)
Add (subtract):
Interest expense, net of interest income                175,195       143,591       136,660
Income tax expense (benefit)                              6,279        10,936       (3,714)
Depreciation and amortization                           300,597       324,864       381,237
EBITDA                                                  375,378       516,693       494,252

Adjustments to EBITDA:
Other, net (1)                                         (30,934)      (30,993)       (8,847)
Investment distributions (2)                             43,040        41,529        35,809
Loss (gain) on extinguishment of debt                    17,101        18,264       (4,510)
Loss on impairment                                        5,704             -             -

Change in fair value of conditional payment rights 86,476 (23,802)

             -
Non-cash, stock-based compensation                       10,097         7,533         6,836
Adjusted EBITDA                                     $   506,862    $  529,224    $  523,540

Other, the net amount includes earnings on equity of our investments, dividend

income, income attributable to non-controlling interests in subsidiaries, (1) acquisition and transaction costs, including integration costs and

severance pay, non-cash pensions and post-retirement benefits and certain other

Various objects.



(2) Includes all cash dividends and other cash distributions received from our
    investments.


                        Liquidity and Capital Resources

Outlook and Overview

Our operating requirements have historically been funded from cash flows
generated from our business and borrowings under our credit facilities.  We
expect that our future operating requirements will continue to be funded from
cash flows from operating activities, existing cash and cash equivalents, and,
if needed, from borrowings under our revolving credit facility and our ability
to obtain future external financing.  We anticipate that we will continue to use
a substantial portion of our cash flow to fund capital expenditures for our
accelerated fiber network expansion and growth plan and to invest in future
business opportunities.

The following table summarizes our cash flows:


                                                      Years Ended December 

31,

(In thousands)                                   2021           2020       

2019

Cash flows provided by (used in):
Operating activities                          $   318,867    $   364,980    $   339,096
Investing activities                            (586,443)      (210,066)      (217,819)
Financing activities                              211,650       (11,748)      (118,481)
Increase (decrease) in cash and cash
equivalents                                   $  (55,926)    $   143,166   

$2,796

Cash flow generated by operating activities


Net cash provided by operating activities was $318.9 million in 2021, a decrease
of $46.1 million compared to the same period in 2020.  Cash flows provided by
operating activities decreased in part due to a decline in earnings as a result
of a decrease in operating revenue. In addition, in response to the potential
impacts of the COVID-19 pandemic in 2020, we deferred approximately $12.0
million of certain employer payroll tax payments under the CARES Act. The
portion of the taxes deferred until 2021 of approximately $6.0 million were paid
during the year ended December 31, 2021.  These

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reductions in cash provided by operating activities were offset in part by a
decrease in cash paid for interest and cash contributions to our defined benefit
pension plan of $6.1 million and $3.8 million, respectively, in 2021 compared to
2020.

In 2020, net cash provided by operating activities was $365.0 million, an
increase of $25.9 million compared to the same period in 2019 primarily as a
result of an increase in earnings primarily from a reduction in operating
expenses through cost management initiatives and improved operating
efficiencies. Cash distributions received from our wireless partnerships also
increased $5.7 million in 2020 compared to 2019. Interest payments decreased
approximately $8.6 million from prior year due a decrease in variable interest
rates in 2020.  In response to the potential impacts of the COVID-19 pandemic,
we elected the deferral of certain employer payroll tax payments under the CARES
Act of approximately $12.0 million during 2020. In addition, cash contributions
to our defined benefit pension plans decreased $3.5 million in 2020 compared to
2019. However, income tax refunds decreased approximately $7.8 million from
2019.

Cash flows used in investing activities


Net cash used in investing activities was $586.4 million in 2021 and consisted
primarily of cash used for capital expenditures and the purchase of short-term
investments. Capital expenditures continue to be our primary recurring investing
activity and were $480.3 million, $217.6 million and $232.2 million in 2021,
2020 and 2019, respectively.  Our fiber expansion plan contributed to the
increase in capital expenditures in 2021, which included the upgrade of more
than 330,000 passings with multi-Gig data speeds. Capital expenditures for 2022
are expected to be $475.0 million to $495.0 million, which will be used to
support success-based capital projects for commercial, carrier and consumer
initiatives and for our planned fiber projects and broadband network expansion,
which will include the upgrade in 2022 of approximately 400,000 fiber passings.
 We expect to continue to invest in the enhancement and expansion of our fiber
network in order to retain and acquire more customers through a broader set of
products and an expanded network footprint.

In 2021, we purchased $175.8 million in short-term investments consisting mainly of debt securities held to maturity with an initial maturity of three to twelve months, offset by the maturity of investments of $66.2 million.


Cash proceeds from the sale of assets decreased $3.6 million in 2021 compared to
2020.  In 2020, we received cash proceeds of $3.7 million on the sale of our 39
GHz wireless spectrum licenses as part of the FCC's spectrum recovery efforts.

Cash flows generated by (used in) financing activities

Net cash used in financing activities consists primarily of proceeds and principal repayments on long-term borrowings and debt buybacks.

long-term debt

The following table summarizes our indebtedness as of December 31, 2021:

(In thousands)                   Balance       Maturity Date         Rate(1)
6.50% Senior Notes             $   750,000    October 1, 2028               6.50 %
5.00% Senior Notes                 400,000    October 1, 2028               5.00 %
Term loans, net of discount        989,567    October 2, 2027    LIBOR plus
3.50 %
Finance leases                      24,990                                  5.55 % (2)
                               $ 2,164,557

(1)To December 31, 2021, the 1-month Libor applicable to our borrowings was 0.10%. Term loans are subject to a LIBOR floor of 0.75%.

(2)Weighted average rate.

credit agreement


On October 2, 2020, the Company, through certain of its wholly-owned
subsidiaries, entered into a Credit Agreement with various financial
institutions (the "Credit Agreement") to replace the Company's previous credit
agreement in its entirety.  The Credit Agreement consisted of term loans in the
aggregate amount of $1,250.0 million (the "Initial Term Loans") and

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a revolving loan facility of $250.0 million.  The Credit Agreement also includes
an incremental loan facility which provides the ability to borrow, subject to
certain terms and conditions, incremental loans in an aggregate amount of up to
the greater of (a) $300.0 million plus (b) an amount which would not cause its
senior secured leverage ratio not to exceed 3.70:1.00 (the "Incremental
Facility").  Borrowings under the Credit Agreement are secured by substantially
all of the assets of the Company and its subsidiaries, subject to certain
exceptions.

The Term Loans were issued in an original aggregate principal amount of $1,250.0
million with a maturity date of October 2, 2027 and contained an original
issuance discount of 1.5% or $18.8 million, which is being amortized over the
term of the loan.  Prior to amendments to the Credit Agreement, as described
below, the Initial Term Loans required quarterly principal payments of $3.1
million, which commenced December 31, 2020, and bore interest at a rate 4.75%
plus the London Interbank Offered Rate ("LIBOR") subject to a 1.00% LIBOR floor.

On January 15, 2021, the Company entered into Amendment No. 1 to the Credit
Agreement in which we borrowed an additional $150.0 million aggregate principal
amount of incremental term loans (the "Incremental Term Loans"). The Incremental
Term Loans have terms and conditions identical to the Initial Term Loans
including the same maturity date and interest rate. The Initial Term Loans and
Incremental Term Loans, collectively (the "Term Loans") will comprise a single
class of term loans under the Credit Agreement.

On March 18, 2021, the Company repaid $397.0 million of the outstanding Term
Loans with the net proceeds received from the issuance of $400.0 million
aggregate principal amount of 5.00% senior secured notes due 2028 (the "5.00%
Senior Notes"), as described below.  The repayment of the Term Loans was applied
to the remaining principal payments in direct order of maturity, thereby
eliminating the required quarterly principal payments through the remaining term
of the loan.  In connection with the repayment of the Term Loans, we recognized
a loss on extinguishment of debt of $12.0 million during the year ended December
31, 2021.

On April 5, 2021, the Company, entered into a second amendment to the Credit
Agreement (the "Second Amendment") to refinance the outstanding Term Loans of
$999.9 million. The terms and conditions of the Credit Agreement remain
substantially similar and unchanged except with respect to the interest rate
applicable to the Term Loans and certain other provisions.  As a result of the
Second Amendment, the interest rate of the Term Loans was reduced to 3.50% plus
LIBOR subject to a 0.75% LIBOR floor. The maturity date of the Term Loans of
October 2, 2027 remains unchanged. In connection with entering into the Second
Amendment, we recognized a loss of $5.1 million on the extinguishment of debt
during the year ended December 31, 2021.

The revolving credit facility has a maturity date of October 2, 2025 and an
applicable margin (at our election) of 4.00% for LIBOR-based borrowings or 3.00%
for alternate base rate borrowings, with a 0.25% reduction in each case if the
consolidated first lien leverage ratio, as defined in the Credit Agreement, does
not exceed 3.20 to 1.00.  As of December 31, 2021 and 2020, there were no
borrowings outstanding under the revolving credit facility.  Stand-by letters of
credit of $25.1 million were outstanding under our revolving credit facility as
of December 31, 2021.  The stand-by letters of credit are renewable annually and
reduce the borrowing availability under the revolving credit facility.  As of
December 31, 2021, $224.9 million was available for borrowing under the
revolving credit facility.

The weighted average interest rate on outstanding borrowings under our credit facilities was 4.25% and 5.75% at December 31, 2021 and 2020, respectively.

Interest is payable at least quarterly.

Funding costs

In connection with entering into the Credit Agreement in October 2020, fees of
$29.1 million were capitalized as deferred debt issuance costs.  These
capitalized costs are amortized over the term of the debt and are included as a
component of interest expense in the consolidated statements of operations. We
also incurred a loss on the extinguishment of debt of $12.3 million during the
year ended December 31, 2020 related to the repayment of the outstanding term
loan under the previous credit agreement.

Compliance with the terms of the credit agreement

The Credit Agreement contains various provisions and covenants, including, among
other items, restrictions on the ability to pay dividends, incur additional
indebtedness, and issue certain capital stock.  We have agreed to maintain
certain financial ratios, including a maximum consolidated first lien leverage
ratio, as defined in the Credit Agreement.  Among

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other things, it will be an event of default, with respect to the revolving
credit facility only, if our consolidated first lien leverage ratio as of the
end of any fiscal quarter is greater than 5.85:1.00.  As of December 31, 2021,
our consolidated first lien leverage ratio under the Credit Agreement was
4.14:1.00.  As of December 31, 2021, we were in compliance with the Credit
Agreement covenants.

Senior Notes

6.50% Senior Notes due 2028

On October 2, 2020, we completed an offering of $750.0 million aggregate
principal amount of 6.50% unsubordinated secured notes due 2028 (the "6.50%
Senior Notes").  The 6.50% Senior Notes were priced at par and bear interest at
a rate of 6.50%, payable semi-annually on April 1 and October 1 of each year,
beginning on April 1, 2021.  The 6.50% Senior Notes mature on October 1, 2028.
Deferred debt issuance costs of $17.0 million incurred in connection with the
issuance of the 6.50% Senior Notes in 2020 are being amortized using the
effective interest method over the term of the Senior Notes. The net proceeds
from the issuance of the 6.50% Senior Notes were used to redeem our then
outstanding $440.5 million aggregate principal amount of 6.50% Senior Notes due
in October 2022 at a price equal to 100% of the aggregate principal amount plus
accrued and unpaid interest through the redemption date, to repay a portion of
the outstanding borrowings under the previous credit agreement as part of the
refinancing in October 2020 and to pay related fees and expenses.

On March 18, 2021, we issued $400.0 million aggregate principal amount 5.00%
Senior Notes, together with the 6.50% Senior Notes (the "Senior Notes").  The
5.00% Senior Notes were priced at par and bear interest at a rate of 5.00% per
year, payable semi-annually on April 1 and October 1 of each year, beginning on
October 1, 2021.  The 5.00% Senior Notes will mature on October 1, 2028.
 Deferred debt issuance costs of $3.8 million incurred in connection with the
issuance of the 5.00% Senior Notes are being amortized using the effective
interest method over the term of the Senior Notes.  The net proceeds from the
issuance of the 5.00% Senior Notes were used to repay $397.0 million of the Term
Loans outstanding under the Credit Agreement.

Compliance with the covenants of the Senior Notes


Subject to certain exceptions and qualifications, the indenture governing the
Senior Notes contains customary covenants that, among other things, limits the
Company and its restricted subsidiaries' ability to: incur additional debt or
issue certain preferred stock; pay dividends or make other distributions on
capital stock or prepay subordinated indebtedness; purchase or redeem any equity
interests; make investments; create liens; sell assets; enter into agreements
that restrict dividends or other payments by restricted subsidiaries;
consolidate, merge or transfer all or substantially all of its assets; engage in
transactions with its affiliates; or enter into any sale and leaseback
transactions.  The indenture also contains customary events of default.  At
December 31, 2021, the Company was in compliance with all terms, conditions and
covenants under the indenture governing the Senior Notes.

Redemption of the 6.50% Senior Notes due 2022


On October 2, 2020, a notice of redemption was issued to holders of our then
outstanding $440.5 million aggregate principal amount of 6.50% Senior Notes due
in October 2022 (the "2022 Notes") to redeem all outstanding 2022 Notes at a
price equal to 100% of the aggregate principal amount plus accrued and unpaid
interest through the redemption date.  A portion of the proceeds from the
issuance of the Senior Notes was deposited with the trustee to pay and discharge
the entire indebtedness under the 2022 Notes.  The 2022 Notes were redeemed on
November 2, 2020, in accordance with the notice of redemption.

In connection with the redemption of the 2022 Notes, we recognized a loss on
extinguishment of debt of $5.9 million during the year ended December 31, 2020.
During the year ended December 31, 2019, we repurchased $55.0 million of the
aggregate principal amount of the 2022 Notes for $49.8 million and recognized a
gain on extinguishment of debt of $4.5 million.

Finance leases


We lease certain facilities and equipment under various finance leases which
expire between 2022 and 2040.  As of December 31, 2021, the present value of the
minimum remaining lease commitments was approximately $25.0 million, of

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which $8.0 million was due and payable within the next twelve months. The leases require total remaining rents of $27.9 million from December 31, 2021.


Searchlight Investment

In connection with the Investment Agreement entered into in September 2020,
Searchlight invested a total of $425.0 million in Consolidated and holds a
combination of perpetual Series A preferred stock and approximately 35% of the
Company's outstanding common stock. On October 2, 2020, we closed on the first
stage of the strategic investment of $350.0 million with Searchlight. The second
stage of the investment was completed on December 7, 2021 and we received the
additional investment of $75.0 million from Searchlight.

On December 7, 2021, we issued 434,266 shares of Series A Preferred Stock to
Searchlight.  Dividends on each share of Series A Preferred Stock accrue daily
on the liquidation preference at a rate of 9.0% per annum and will be payable
semi-annually in arrears on January 1 and July 1 of each year. Dividends are
payable until October 2, 2025 at our election, either in cash or in-kind through
an accrual of unpaid dividends, which are automatically added to the liquidation
preference; and after October 2, 2025, solely in cash.  The liquidation
preference at any given time is $1,000 per share.  As of December 31, 2021, the
liquidation preference of the Series A Preferred Stock was $436.9 million, which
includes accrued and unpaid dividends of $2.7 million. The Company intends to
exercise the PIK dividend option on the Series A Preferred Stock through at
least 2022.

Dividends

We paid $55.4 million in dividend payments to shareholders during 2019. On April
25, 2019, we announced the elimination of the payment of quarterly dividends on
our stock beginning in the second quarter of 2019 in order to focus on
deleveraging, fiber network investments and create long-term value for our
stockholders.  Future dividend payments, if any, are at the discretion of our
Board of Directors.  Changes in our dividend program will depend on our
earnings, capital requirements, financial condition, debt covenant compliance,
expected cash needs and other factors considered relevant by our Board of
Directors.

Adequacy of cash resources

The following table presents selected information regarding our financial condition:


                                                            December 31,
(In thousands, except for ratio)                         2021         2020
Cash and cash equivalents and short-term investments   $ 210,436    $ 155,561
Working capital                                          142,270       70,191
Current ratio                                               1.50         1.26

Our net working capital position improved $72.1 million as of December 31, 2021
compared to December 31, 2020 primarily as a result of an increase in cash, cash
equivalents and short-term investments of $54.9 million. At December 31, 2021,
working capital also included assets classified as held for sale of $25.9
million related to the sale of substantially all of the assets of our ILEC
business located in Ohio. Prepaid expenses and other current assets increased
$10.4 million. Working capital also improved from a decline in the current
portion of long-term debt and finance lease obligations of $9.6 million as a
result of the prepayment in March 2021 of $397.0 million of the outstanding Term
Loans, which eliminated the required quarterly principal payments through the
remaining term of the loan.  However, working capital was reduced by an increase
in accounts payable of $15.7 million and accrued expense of $15.5 million at
December 31, 2021 related to the timing of capital expenditures for the fiber
build plan.

Our most significant use of funds in 2022 is expected to be for: (i) interest
payments on our indebtedness of between $123.0 million and $127.0 million; and
(ii) capital expenditures of between $475.0 million and $495.0 million.  The
recent refinancing of our capital structure combined with the Searchlight
investment provides us the capital and financial flexibility to fund our
accelerated fiber network expansion and growth plans.  In the future, our
ability to use cash may be limited by our other expected uses of cash and our
ability to incur additional debt will be limited by our existing and future debt
agreements.

We believe that cash flows from operating activities, together with our existing
cash and borrowings available under our revolving credit facility, will be
sufficient for at least the next twelve months to fund our current anticipated
uses of cash.

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After that, our ability to fund these expected uses of cash and to comply with
the financial covenants under our debt agreements will depend on the results of
future operations, performance and cash flow.  Our ability to fund these
expected uses from the results of future operations will be subject to
prevailing economic conditions and to financial, business, regulatory,
legislative and other factors, many of which are beyond our control. Due to the
uncertainty and unpredictability related to the potential impacts of the
COVID-19 pandemic on our business, we will continue to closely manage our cash
and liquidity.

To the extent that our business plans or projections change or prove to be
inaccurate, we may require additional financing or require financing sooner than
we currently anticipate.  Sources of additional financing may include commercial
bank borrowings, other strategic debt financing, sales of nonstrategic assets,
vendor financing or the private or public sales of equity and debt securities.
 There can be no assurance that we will be able to generate sufficient cash
flows from operations in the future, that anticipated revenue growth will be
realized, or that future borrowings or equity issuances will be available in
amounts sufficient to provide adequate sources of cash to fund our expected uses
of cash.  Failure to obtain adequate financing, if necessary, could require us
to significantly reduce our operations or level of capital expenditures, which
could have a material adverse effect on our financial condition and the results
of operations.

We may be unable to access the cash flows of our subsidiaries since certain of
our subsidiaries are parties to credit or other borrowing agreements, or subject
to statutory or regulatory restrictions, that restrict the payment of dividends
or making intercompany loans and investments, and those subsidiaries are likely
to continue to be subject to such restrictions and prohibitions for the
foreseeable future.  In addition, future agreements that our subsidiaries may
enter into governing the terms of indebtedness may restrict our subsidiaries'
ability to pay dividends or advance cash in any other manner to us.

Guarantees

In the normal course of our business, we enter into surety bonds, performance bonds and similar bonds as required by certain jurisdictions in which we provide services.

From December 31, 2021we had about $6.4 million of these outstanding bonds.

Contractual obligations


As of December 31, 2021, our most significant contractual obligations include
the following:

(In thousands)                           Short-Term    Long-Term      Total
Long-term debt                          $          -  $ 2,149,875  $ 2,149,875
Interest on long-term debt obligations       122,523      626,364      748,887
Finance leases                                 9,020       18,890       27,910
Operating leases                               7,726       24,402       32,128
Purchase obligations                          93,122       24,276      117,398


Our long-term debt obligations represent our most significant contractual
obligations. The partial repayment of the Term Loans in March 2021, eliminated
all future required quarterly principal payments for the remaining term of the
loan. The long-term debt obligation represents the maturity of the Term Loans in
2027 and the Senior Notes in 2028. Interest on long-term debt includes amounts
due on fixed and variable rate debt. As the rates on our variable debt are
subject to change, the rates in effect at December 31, 2021 were used in
determining our future interest obligations.

Other contractual obligations primarily include purchase obligations and finance and operating leases for facilities, land, underground pipelines, co-locations and equipment used in our operations. Unrecognized purchase obligations include binding commitments for future capital expenditures and service and maintenance contracts to support various computer hardware and software applications and certain equipment. If we terminate any of the contracts before their expiration date, we would be liable for the minimum commitment payments as defined by the terms of the contracts. For more information, see Note 10 and Note 15 to the consolidated financial statements.

Defined benefit pension plans


As required, we contribute to qualified defined pension plans and non-qualified
supplemental retirement plans (collectively the "Pension Plans") and other
post-retirement benefit plans, which provide retirement benefits to certain
eligible employees. Contributions are intended to provide for benefits
attributed to service to date. Our funding policy is to contribute annually an
actuarially determined amount consistent with applicable federal income tax
regulations.

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The cost to maintain our Pension Plans and future funding requirements are
affected by several factors including the expected return on investment of the
assets held by the Pension Plans, changes in the discount rate used to calculate
pension expense and the amortization of unrecognized gains and losses.  Returns
generated on the Pension Plans assets have historically funded a significant
portion of the benefits paid under the Pension Plans.  We used a
weighted-average expected long-term rate of return of 6.00% and 6.25% in 2021
and 2020, respectively.  As of January 1, 2022, we estimate the long-term rate
of return of Plan assets will be 6.00%.  The Pension Plans invest in marketable
equity securities which are exposed to changes in the financial markets.  If the
financial markets experience a downturn and returns fall below our estimate, we
could be required to make material contributions to the Pension Plans, which
could adversely affect our cash flows from operations.

Net pension and post-retirement (benefit)/costs were $(3.8) million, $(4.1)
million and $11.5 million for the years ended December 31, 2021, 2020 and 2019,
respectively.  We contributed $20.8 million, $24.0 million and $27.5 million in
2021, 2020 and 2019, respectively to our Pension Plans.  For our other
post-retirement plans, we contributed $8.6 million, $9.2 million and $8.5
million in 2021, 2020 and 2019, respectively.  In 2022, we expect to make
contributions totaling approximately $20.5 million to our Pension Plans and $8.2
million to our other post-retirement benefit plans. Our contribution amounts
meet the minimum funding requirements as set forth in employee benefit and tax
laws. ARPA, which was signed into law in March 2021, included changes to the
employer funding requirements and is designed to reduce the amounts of required
contributions as a relief.  For 2021 and 2022, we have elected not to reduce our
required pension contributions to the minimum funding requirements under ARPA
and our expected contributions for 2022 are based on historical minimum funding
requirements of approximately $20.5 million in order to increase the Pension
Plan's funded status. See Note 13 to the consolidated financial statements for a
more detailed discussion regarding our pension and other post-retirement plans.

Income taxes


The timing of cash payments for income taxes, which is governed by the Internal
Revenue Service and other taxing jurisdictions, will differ from the timing of
recording tax expense and deferred income taxes, which are reported in
accordance with GAAP.  For example, tax laws in effect regarding accelerated or
"bonus" depreciation for tax reporting resulted in less cash payments than the
GAAP tax expense.  Acceleration of tax deductions could eventually result in
situations where cash payments will exceed GAAP tax expense.

Regulatory issues

In 2020, the FCC adopted an order establishing the RDOF, the next phase of the
CAF program, which will result in a reduction of approximately $42.2 million in
the annual support we receive beginning January 1, 2022 through December 31,
2031.

                         Critical Accounting Estimates

Our significant accounting policies and estimates are discussed in the Notes to
our consolidated financial statements.  We prepare our consolidated financial
statements in accordance with generally accepted accounting principles in the
United States.  The preparation of financial statements requires management to
make estimates and assumptions that affect reported amounts of assets,
liabilities, revenues and expenses.  These estimates and assumptions are
affected by management's application of our accounting policies.  Our judgments
are based on historical experience and various other assumptions that are
believed to be reasonable under the circumstances, the results of which form the
basis for making estimates about the carrying values of assets and liabilities
that are not readily apparent from other sources.  However, because future
events and the related effects cannot be determined with certainty, actual
results may differ from our estimates and assumptions and such differences could
be material.  Management believes that the following accounting estimates are
the most critical to understanding and evaluating our reported financial
results.

Indefinite life intangible assets

Our indefinite-lived intangible assets are not amortized and are tested for impairment annually or more frequently when events or changes in circumstances indicate that the asset may be impaired. We measure the carrying value of our indefinite life assets at November 30 of each year.


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Goodwill

As discussed more fully in Note 1 to the consolidated financial statements,
goodwill is not amortized but instead evaluated for impairment annually, or more
frequently if an event occurs or circumstances change that would indicate
potential impairment.  At December 31, 2021 and 2020, the carrying value of our
goodwill was $1,013.2 million and $1,035.3 million, respectively.  Goodwill
decreased $22.1 million during 2021 as a result of allocated goodwill for a
divestiture classified as held for sale at December 31, 2021, as described in
Note 5 to the consolidated financial statements. The evaluation of goodwill may
first include a qualitative assessment to determine whether it is more likely
than not that the fair value of the reporting unit is less than its carrying
amount.  Events and circumstances integrated into the qualitative assessment
process include a combination of macroeconomic conditions affecting equity and
credit markets, significant changes to the cost structure, overall financial
performance and other relevant events affecting the reporting unit.

Functional management within the organization evaluates the operations of our
single reporting unit on a consolidated basis rather than at a geographic level
or on any other component basis.  In general, product managers and cost managers
are responsible for managing costs and services across territories rather than
treating the territories as separate business units.  All of the properties are
managed at a functional level. As a result, we evaluate the operations for all
our service territories as a single reporting unit.

For the 2021 assessment, we evaluated the fair value of the goodwill compared to
the carrying value using the qualitative approach.  The results of the
qualitative approach concluded that it was more likely than not that the fair
value was greater than the carrying value, and therefore, we did not perform the
calculation of fair value for our single reporting unit as described below.

When we use the quantitative approach to assess the goodwill carrying value and
the fair value of our single reporting unit, the fair value of our reporting
unit is compared to its carrying amount, including goodwill. We would expect to
use the quantitative approach at least every third year or more frequently if an
event or if circumstances change that may indicate a potential impairment of
goodwill has occurred. The estimated fair value of the reporting unit is
determined using a combination of market-based approaches and a discounted cash
flow ("DCF") model and reconciled to our market capitalization plus an estimated
control premium.  The assumptions used in the estimate of fair value are based
upon a combination of historical results and trends, new industry developments
and future cash flow projections, as well as relevant comparable company
earnings multiples for the market-based approaches. Such assumptions are subject
to change as a result of changing economic and competitive conditions.  Based on
our assessment at November 30, 2020, using the quantitative approach, we
concluded that the fair value of the reporting unit exceeded the carrying value
at November 30, 2020 by approximately 120% and that there was no impairment
of
goodwill.

Trade Name
As discussed more fully in Note 1 to the consolidated financial statements,
trade names are generally not amortized, but instead evaluated annually, or more
frequently if an event occurs or circumstances change that would indicate
potential impairment using a preliminary qualitative assessment and a
quantitative process, if deemed necessary.  The carrying value of our trade
name, excluding any finite lived trade names, $10.6 million at December 31, 2021
and 2020.

When we use the quantitative approach to estimate the fair value of our trade
name, we use DCFs based on a relief from royalty method.  If the fair value of
our trade name was less than the carrying amount, we would recognize an
impairment charge for the difference between the estimated fair value and the
carrying value of the asset.  We perform our impairment testing of our trade
name as a single unit of accounting based on its use in our single reporting
unit.

For the 2021 valuation, we used the qualitative approach to assess the fair value against the book value of the trade name. Based on our assessment, we concluded that the fair value of the trade name continued to exceed the carrying value.

Income taxes


Our current and deferred income taxes and associated valuation allowances are
impacted by events and transactions arising in the normal course of business as
well as in connection with the adoption of new accounting standards,
acquisitions of businesses and non-recurring items.  Assessment of the
appropriate amount and classification of income taxes is dependent on several
factors, including estimates of the timing and realization of deferred income
tax assets and the timing of income

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tax payments.  Actual amounts may materially differ from these estimates as a
result of changes in tax laws as well as unanticipated future transactions
impacting related income tax balances.  We account for tax benefits taken or
expected to be taken in our tax returns in accordance with the accounting
guidance applicable for uncertainty in income taxes, which requires the use of a
two-step approach for recognizing and measuring tax benefits taken or expected
to be taken in a tax return.

Retirement and post-retirement benefits


The amounts recognized in our financial statements for pension and
post-retirement benefits are determined on an actuarial basis utilizing several
critical assumptions.  We make significant assumptions in regards to our pension
and post-retirement plans, including the expected long-term rate of return on
plan assets, the discount rate used to value the periodic pension expense and
liabilities, future salary increases and actuarial assumptions relating to
mortality rates and healthcare trend rates.  Changes in these estimates and
other factors could significantly impact our benefit cost and obligations to
maintain pension and post-retirement plans.

Our pension investment strategy is to maximize long-term returns on invested
plan assets while minimizing the risk of volatility.  Accordingly, we target our
allocation percentage at approximately 70 - 90% in return seeking assets
consisting primarily of equity and fixed income funds with the remainder in
hedge funds.  Our assumed rate considers this investment mix as well as past
trends.  We used a weighted-average expected long-term rate of return of 6.00%
and 6.25% in 2021 and 2020, respectively. As of January 1, 2022, we estimate
that the expected long-term rate of return of pension plan assets will be 6.00%.

In determining the appropriate discount rate, we consider the current yields on
high-quality corporate fixed-income investments with maturities that correspond
to the expected duration of our pension and post-retirement benefit plan
obligations.  For our 2021 and 2020 projected benefit obligations, we used a
weighted-average discount rate of 3.05% and 2.81%, respectively, for our pension
plans and 2.93% and 2.56%, respectively, for our other post-retirement plans.

Our Pension Plans are sensitive to changes in the discount rate and the expected
long-term rate of return on plan assets. A one percentage-point increase or
decrease in the discount rate and expected long-term rate of return would have
the following effects on net periodic pension cost of the Pension Plans:

                                                 1-Percentage-       1-Percentage-
(In thousands)                                   Point Increase      Point Decrease

Discount rate                                 $           1,841     $        (1,075)
Expected long-term rate of return on plan
assets                                        $         (6,166)     $      

6,166



Our post-retirement benefit plans are sensitive to the healthcare cost trend
rate assumption. For purposes of determining the cost and obligation for
post-retirement medical benefits, a 6.25% healthcare cost trend rate was assumed
for 2021, declining to the ultimate trend rate of 5.00% in 2027. A 1.00%
increase in the assumed healthcare cost trend rate would result in increases of
approximately $3.0 million and $0.2 million in the post-retirement benefit
obligation and total service and interest cost, respectively. A 1.00% decrease
in the assumed healthcare cost trend would result in decreases of approximately
$3.1 million and $0.2 million in the post-retirement benefit obligation and in
the total service and interest cost, respectively.

Recent accounting pronouncements

For more information regarding the impact of certain recent accounting pronouncements, see Note 1 “Description of activities and summary of significant accounting policies” of the consolidated financial statements included in this report in Part II – Heading 8 “Financial statements and additional data”.

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