2020 ANNUAL REPORT DEAR STOCKHOLDERS, 2020 was a year like no other for Consolidated Communications. Searchlight’s investment enabled us to completely refinance our debt and We entered the year with strong momentum and a clear set of strategic extend our maturity profile by seven years. Importantly, this investment goals to guide our path and focus for the year: and partnership with an experienced strategic investor in our sector is • stabilize revenue and EBITDA while growing free cash flow enabling us to accelerate our fiber expansion plans immediately. • leverage our network across the regional territories we serve while • We are in a strong position to accelerate our fiber investments with continuing to invest in the expansion of our fiber network; and a fully funded build, supporting our growth initiatives across three customer groups; carrier, commercial and consumer. We have • continue to execute on our disciplined capital allocation plan, including a embarked on a five-year investment initiative to upgrade 1.6 million strategic refinancing, to position the Company for investment in the future. passings and enable multi-gigabit, symmetrical speeds over fiber services. And then the COVID-19 pandemic arrived, testing us in previously We have a proven track record of growing broadband, and we are now unimaginable ways. But your Company and its employees responded positioned to expedite our fiber expansion plans, boost customer speeds with incredible energy, engagement and support for one another. We and expand gigabit fiber services to 70 percent of our addressable market. focused immediately and intensely to ensure the safety of our employees As part of our fiber expansion plans, we intend to transform the customer and customers while at the same time ensuring business continuity and experience by making it easy for customers to do business with us. meeting the increasing demand for services. Positioned for growth As a critical infrastructure provider, we were at the center of our customers’ Through our past investments in commercial and carrier high-return, connectivity needs which resulted in an increase in service orders and fiber expansion projects as well as Connect America Fund broadband bandwidth upgrades. Our network, as designed, performed and continues to investments across rural areas, we are well positioned to extend our fiber perform very well, even against the increasing load of voice and data traffic. network to over 70 percent of our 2.8 million addressable homes and businesses. Through these investments and innovative public-private We moved quickly and proactively to identify new and innovative ways to partnerships, we are executing on a broadband strategy that positions us serve our customers. For example, we launched Enterprise at Home, which for faster growth with our fiber nodes being closer to our customers than provides business class Internet and full-featured unified communications other providers in our target markets. We will remain disciplined on to remote employees at residential locations. We made it easier for our operational excellence as well as prioritizing every dollar we invest in the customers to upgrade bandwidth and stay connected with critical services highest-return projects. This will allow us to further grow broadband during this time. revenue in 2021 and beyond. We are proud of how the Consolidated team delivered on its commitments As we look ahead, we enter 2021 with an even stronger foundation, great to our customers and shareholders, with solid financial results during a momentum and excitement for the future. We intend to continue to deliver challenging year, and emerging even stronger. on our commitment to our customers, the communities we serve and our Delivering value in fiscal 2020 shareholders. As a critical broadband provider, we are helping residential, business and carrier customers as well as the communities we serve to Our fiscal 2020 results and accomplishments demonstrate both the connect, learn, and work – all key to economic vitality and recovery. I want resiliency of our business and the very strong execution in improving to especially thank our employees who work tirelessly to serve our revenue trends, growing adjusted EBITDA and strengthening the balance customers and are crucial to our long-term success. sheet. Among the highlights in fiscal 2020: • We produced stable revenue and increased EBITDA while managing Thank you, our valued shareholder, for your ongoing trust and support. our cost structure and significantly improved our overall liquidity. As a Company, our goals and growth plans have never been clearer and Revenue totaled $1.3 billion for the year, and we generated Adjusted we are committed to creating value for our customers, employees and EBITDA of $529 million, an improvement of 1.1 percent. Net cash from shareholders. I couldn’t be more excited for what the future holds for operating activities totaled $365 million, while operating expenses Consolidated Communications. excluding transaction costs declined 4.3 percent. • We closed on the first stage of a $425 million total strategic Sincerely, investment with Searchlight Capital Partners and refinanced our debt, strengthening our balance sheet. The consistency of our results, the strength and depth of our team and the quality of our assets helped us secure a strategic partnership with Searchlight Capital Partners, a Bob Udell private equity firm who brings industry experience and expertise. President and Chief Executive Officer Table of Contents UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-K ☒ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended December 31, 2020 ☐ TRANSITION REPORT PURSUANT TO SECTION 13 or 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from ________________ to ________________ Commission file number 000-51446 CONSOLIDATED COMMUNICATIONS HOLDINGS, INC. (Exact name of registrant as specified in its charter) Delaware 02-0636095 (State or other jurisdiction (I.R.S. Employer of incorporation or organization) Identification No.) 121 South 17th Street, Mattoon, Illinois 61938-3987 (Address of principal executive offices) (Zip Code) Registrant’s telephone number, including area code (217) 235-3311 Securities registered pursuant to Section 12(b) of the Act: Title of each class Trading Symbol Name of each exchange on which registered Common Stock - $0.01 par value CNSL The NASDAQ Global Select Market Securities registered pursuant to Section 12(g) of the Act: None Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes ☐ No ☒ Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. Yes ☐ No ☒ Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐ Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐ Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act. Large accelerated filer ☐ Accelerated filer ☒ Non-accelerated filer ☐ Smaller reporting company ☐ Emerging growth company ☐ If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ◻ Indicate by check mark whether the registrant has filed a report on and attestation to its management’s assessment of the effectiveness of its internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or issued its audit report. ☒ Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒ As of June 30, 2020, the aggregate market value of the shares held by non-affiliates of the registrant’s common stock was $485,618,951 based on the closing price as reported on the NASDAQ Global Select Market. The market value calculations exclude shares held on the stated date by registrant’s directors and officers on the assumption such shares may be shares owned by affiliates. Exclusion from these public market value calculations does not necessarily conclude affiliate status for any other purpose. On February 22, 2021, the registrant had 79,213,100 shares of Common Stock outstanding. DOCUMENTS INCORPORATED BY REFERENCE Portions of the registrant’s Proxy Statement for the 2021 Annual Meeting of Shareholders are incorporated herein by reference in Part III of this Annual Report on Form 10-K to the extent stated herein. Such proxy statement will be filed with the Securities and Exchange Commission within 120 days of the registrant’s fiscal year ended December 31, 2020. Table of Contents TABLE OF CONTENTS PAGE PART I Item 1. Business 1 Item 1A. Risk Factors 14 Item 1B. Unresolved Staff Comments 23 Item 2. Properties 23 Item 3. Legal Proceedings 23 Item 4. Mine Safety Disclosures 23 PART II Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities 23 Item 6.