Uniti Group Inc. · NASDAQ:UNIT
Uniti — Communications Sales & Leasing — Investor Presentation (June 2015)
21 slides from Uniti's investor presentation, Jun 9, 2015
Slide 1: June 2015 Investor Presentation
June 2015 Investor Presentation
Slide 2: Safe Harbor
Safe Harbor Certain statements in this presentation may constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Those forward-looking statements include all statements that are not historical statements of fact and those regarding our intent,
Slide 3: Company Overview
Company Overview 2 Focused on Diversification and Growth First Net Lease REIT Primarily Focused on Mission Critical Communication Distribution Systems Private Letter Ruling received on July 2014 First mover advantage Long Term Triple-Net Lease with Predictable Cash Flows Over $10 billion in contract
Slide 4: Management team
Kenny Gunderman President & Chief Executive Officer 17 years of telecom sector investment banking experience at Stephens, Inc. and Lehman Brothers Developed extensive relationships with both large and small telecom service providers Substantial capital markets and M&A experience with private and pub
Slide 5: Asset Overview
Asset Overview 4 Geographically Diverse, High Quality Asset Base Network Map Key Metrics Assets by State (2) Composition of Assets (1) State Copper Fiber GA 45.4 8.8 TX 40.4 7.8 IA 33.2 8.3 KY 32.1 7.8 NC 18.4 3.8 AR 13.0 3.2 OH 11.5 3.4 OK 12.4 1.7 OK 12.4 1.7 FL 8.5 1.6 Network Summary: Top-10 Sta
Slide 6: Strategic Rationale for Spin Off
Strategic Rationale for Spin Off 5 Source: Windstream Company filings, presentations and public information Based upon Windstream public filings, 2014 Pro Forma Total Revenues and Sales include $5.6 billion in Services Revenues and $181.9 million in Product Sales Yield-oriented REIT with attractive
Slide 7: Triple-Net Lease: Same Structure, New Sector
Triple-Net Lease Same Structure, New Sector 6 First Triple-Net Lease REIT Primarily Focused on Communication Distribution Assets Predictable Cash Flows High Operating Margins Growth Opportunities Retail Healthcare Entertainment Infrastructure Telecommunications NYSE: HCP NYSE: OHI NYSE: EPR NYSE: CO
Slide 8: Business Strategy
Business Strategy 7 Create diversified portfolio of assets and customers High quality, creditworthy customers Fund strategic capital improvements for existing customers Own high quality, critical Communications Assets Last mile enterprise and consumer fiber Metro and long haul fiber Regulated custom
Slide 9: Growth Opportunities
Growth Opportunities 8 Acquire other communication distribution systems Exclusive use and multi-use Finance greenfield fiber builds Ongoing capex for existing customers 100% success-based capex Contractual escalators in lease agreements Acquire other REITable assets Facilitate M&A in a highly fragme
Slide 10: Universe of Potential Partners
Universe of Potential Partners Deep Familiarity with Sale Leaseback Transactions 9 Major Network Owners < 20, Typically Publicly Traded Independents Over 2,000 fiber and copper network operators Other Asset Classes Cable assets, data centers, towers, energy companies, Big Data Numerous small compani
Slide 11: Sizable Addressable Market
Public Telco Aggregate Capex Spend for 2014 (3): $62B Sizable Addressable Market 10 % of Market Estimated Market Size Copper / Coaxial Connections (1) CS&L Market source is FCC Local Telephone Competition report for 2013 and Excludes Mobile voice subscriptions. Market source is average spend from 20
Slide 12: Transaction Structures
Transaction Structures Flexibility to Create Tax-Advantaged, Tailored Solutions 11 Range of Available Transaction Structures Telcos invest billions every year in building / upgrading networks CS&L can offer a cost efficient method of raising capital for success based customer investments Opportunity
Slide 13: Anchor Customer – Windstream
Anchor Customer – Windstream 12 Source: Windstream filings, CS&L filings, presentations and public information Note: Represents FY 2014 pro forma financial results after giving effect to the spin Based upon Windstream’s Current Report on Form 8-K filed on April 30, 2015, 2014 Pro Forma Total Revenue
Slide 14: Favorable Comparison to Triple-Net REITs
CS&L Favorable Comparison to Triple-Net REITs 13 Average Triple-Net REIT (1) Dividend Yield Net Leverage Ratio Lease Term Average of triple-net REITs as of 6/4/15 which include: O, OHI, NNN, GLPI, MPW, EPR, LXP, NHI, SBRA, LTC, CTRE, GTY, STOR and SRC Figure calculated as the average of each REIT’s
Slide 15: Financial Profile
$667.2 million of leasing and rental revenue (including straight line amortization) and $36.0 million of Consumer CLEC revenue Reflects an estimated $25 million of general & administrative (G&A) expenses associated with being an independent, publicly traded company Revenue $703 million Pro Forma for
Slide 16: Key Investment Highlights
Key Investment Highlights 15 Substantial Liquidity and Capital Markets Access Long Term Triple-Net Lease with Predictable Cash Flows First Net Lease REIT Primarily Focused on Mission Critical Communication Distribution Systems Substantial Growth Potential
Slide 17: Appendix
16 Appendix
Slide 18: Reconciliation of Non-GAAP Historical Financials
17 Net Income $93.1 Interest Expense 233.8 Income Tax 3.1 Depreciation 343.1 Amortization 4.6 EBITDA $677.7 General & Administrative (25.0) Adj. EBITDA $652.7 Operating Income $495.3 Depreciation & Amortization 1,401.0 Merger & Integration Costs 25.0 Restructuring Charges 35.9 Pension Expense 128.3
Slide 19: CS&L Leverage Reconciliation
18 CS&L Leverage Reconciliation Pro Forma Year Ended December 31, 2014 (Unaudited; $ in millions) Adjusted EBITDA is EBITDA less an amount for estimated general & administrative (G&A) expenses associated with being an independent, publicly traded company. Estimated G&A expenses will be approximately
Slide 20: Reporting Definitions
19 Reporting Definitions Adjusted EBITDA: A non-GAAP measure calculated as consolidated EBITDA less estimated annual general and administrative costs associated with being an independent, publicly traded company. We use Adjusted EBITDA as a supplemental measure of our operating performance as an ind
Slide 21: Reporting Definitions
20 Reporting Definitions EBITDA: A non-GAAP measure calculated as consolidated earnings before interest, taxes, depreciation and amortization. We use EBITDA as a supplemental measure of our operating performance as an independent publicly traded company as it provides additional information to asses
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