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WindstreamのREIT戦略:Heavy Readingによる実態把握

Windstream's REIT Gambit: A Heavy Reading Reality Check

発行 Heavy Reading 商品コード 316360
出版日 ページ情報 英文 20 Pages
納期: 即日から翌営業日
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WindstreamのREIT戦略:Heavy Readingによる実態把握 Windstream's REIT Gambit: A Heavy Reading Reality Check
出版日: 2014年09月30日 ページ情報: 英文 20 Pages
概要

米IRS(国税庁)は5月、どのような資産を非課税不動産投資信託(REIT)にできるかについて、新たな指針を発表しました。Windstreamは自社パッシブアクセスネットワーク(銅およびファイバー回線)をREITに変換し、それを非課税で既存投資家にスピンオフ(分割譲渡)する機会を見出しました。単にサードパーティーに売却するという代替手段は、キャピタルゲイン(資本利得)税の課税対象となります。WindstreamによるこのREIT戦略は、当初その戦略に先見性と革新性を見出した金融および財界アナリストの間で大きな興奮を生み出しました。しかし、その高揚が起きたのとほぼ同じほどの速さで、他の通信オペレーターが同様の戦略で果たして利益を得られるのかについて懐疑的な見方が大勢を占めました。

当レポートでは、自社レガシーネットワーク資産をスピンオフするというWindstreamの決定を取り上げ、その決定に影響を及ぼした要因と他のネットワークオペレーターにおけるその要因の適用可能性を分析し、その決定が果たして株主に利益をもたらすものなのか、そしてそれが同社の負債レバレッジを下げるのかという疑問を検証するとともに、他のネットワークオペレーターが同じ戦略で恩恵を受けるのかに付いて分析しています。

第1章 イントロダクション

第2章 REITの詳細

  • REITスピンオフ発表の総括
  • 資金の流れ
  • REITおよび非課税スピンオフの規則

第3章 スピンオフは株主に価値をもたらすのか

  • Heavy ReadingによるFCF利益REIT構造の推定

第4章 スピンオフによってレバレッジは下がるのか

  • 格付け期間がWindstreamのレバレッジについて述べたこと
  • リース会計

第5章 他の通信オペレーターはREITを創出できるのか

  • REITが意義を持つのは納税している場合のみ
  • 所有権構造が一部にとっては論点
  • ひと握りの者にとっては所得および利益が論点を取り払う
  • 他の米国通信会社がWindstreamのREIT計画に抱く印象
  • Windstreamを真似た者について資本アナリストが書いたこと

第6章 結び

目次
Product Code: Vol. 14, No. 8

The IRS provided new guidance in May regarding what assets could be put into a tax-free real estate investment trust (REIT) vehicle. Windstream has seen the opportunity to put its passive access network (copper and fiber lines) into a REIT, which it will spin off tax free to existing investors. The alternative of simply selling the assets to a third party would incur capital gains tax.

The Windstream REIT decision generated a burst of excitement from financial and industry analysts who initially saw something visionary and ground breaking in the strategy. Almost as quickly, however, that enthusiasm gave way to skepticism over whether other telecom operators would have anything to gain from following a similar strategic course. Even in the telecom industry's accelerated hype-to-deflation cycle, the REIT strategy soared and fell in nanoseconds.

But dismissing the Windstream REIT strategy without fully understanding it is just as impulsive as labeling it as revolutionary before the planet actually completed one full revolution. A deeper look at Windstream's strategy and the factors that influenced it shows that, while most telecom operators aren't likely candidates to follow Windstream's path, there may be some promise in the REIT gambit for some, either now or at some future point.

The spinoff does create some shareholder value. Windstream estimates the REIT spinoff will boost free cash flow to shareholders by $115 million. However, this is before taking into account an approximate $118 million increase in annual capex to garner political support for the spinoff and compete more effectively with cable companies. Heavy Reading estimates suggest the boost to free cash flow is worth around $1 per share - slightly less than the positive share price reaction on the day Windstream announced the spinoff.

Other telcos are likely to try REIT spinoffs. Windstream has set a precedent with its copper/fiber-line REIT, which we believe other operators may try to follow. However, tax avoidance vehicles such as REITs are unnecessary if a company is sitting on large tax loss carry-forwards, which it can use to offset against current pre-tax profits. The only U.S. wireline operators that appear to pay any material corporation tax are AT&T, CenturyLink, Frontier Communications and Verizon.

The strategic rationale for the spinoff is unclear. Some cynics have suggested that Windstream's REIT spinoff plan is just an elaborate distraction from the fact that the company has had to cut its dividend by 30 percent in order to fund capex that is needed to compete more effectively with cable competitors. Given the rally in the share price on the day that the dividend cut and REIT spinoff was announced the "distraction" seems to have worked.

Windstream's REIT Gambit: A Heavy Reading Reality Check analyzes Windstream's decision to spin off its legacy network assets, focusing on the factors that influenced the decision and the applicability of those factors to other network operators. It explores and answers two key questions about the Windstream move: Does it create value for the company's shareholders, and does it reduce the company's debt leverage The report analyzes the relative financial and ownership positions of other network operators to determine which ones may potentially benefit from spinning off their legacy assets in a REIT.

Sample research data from the report is shown in the excerpts below:

Windstream will lower its net debt position by transferring $2.2 billion of its debts to the REIT and also by receiving a $1.2 billion cash injection from the REIT. After advisor fees (bankers, lawyers, accountants) of $150 million, the company's net financial debt should reduce by $3.2 billion from $8.5 billion to $5.3 billion. However, Windstream will transfer its fiber and copper plant to the REIT and must pay $650 million per year in rent to use those assets.

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Companies covered in this report include: Alaska Communications Inc. (Nasdaq: ALSK); AT&T Inc. (NYSE: T); CenturyLink Inc. (NYSE: CTL); Cincinnati Bell Inc. (NYSE: CBB); Cogent Communications Inc. (Nasdaq: CCOI); Consolidated Communications Inc. (Nasdaq: CNSL); EarthLink Inc. (Nasdaq: ELNK); Fairpoint Communications Inc. (Nasdaq: FRP); Frontier Communications Corp. (Nasdaq: FTR); Hawaiian Telcom Inc. (Nasdaq: HCOM); Level 3 Communications Inc. (NYSE: LVLT); Lumos Networks Corp. (Nasdaq: LMOS); Verizon Communications Inc. (NYSE: VZ); and Windstream Holdings Inc. (Nasdaq: WIN).

Table of Contents

I. Introduction

II. The REIT Details

  • Summary of REIT Spinoff Announcement
  • Money Flows
  • REIT & Tax-Free Spinoff Rules

III. Does the Spinoff Create Value for shareholders

  • Heavy Reading Estimate of FCF Benefit REIT Structure

IV. Does the Spinoff Reduce Leverage

  • What the Rating Agencies Said About Windstream's Leverage
  • Lease Accounting

V. Can Other Telecom Operators Create REITs

  • REITs Only Make Sense if You Pay Tax
  • Ownership Structure Is an Issue for Some
  • Earnings & Profits Purge an Issue for Few
  • What Other U.S. Telcos Think About Windstream's REIT Plan
  • What Equity Analysts Have Written About Others Emulating Windstream

VI. Conclusion

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