Uniti Group Inc. · NASDAQ:UNIT
Uniti — Investor Presentation (June 2019)
30 slides from Uniti's investor presentation, Jun 20, 2019
Slide 1: 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, as amended from time to time. Those forward-looking statements include all statements that are not historical statements of fact,
Slide 2: Uniti is a Unique Way to Invest in Communications Infrastructure
Uniti is a Unique Way to Invest in Communications Infrastructure ƒ Differentiated Fiber Centric Investment Strategy Focused on Tier II and Tier III Markets Diversified Business Platforms Across All Asset Classes Multiple Proprietary Private Letter Rulings Enhance Unique REIT Advantages Only Fiber Fo
Slide 3: Uniti Investment Strategy
Uniti Investment Strategy Investment Criteria Value Creation Strategy 9 9 9 9 9 9 9 9 9 Mission Critical Communication Infrastructure Source & Proprietary Acquisition Opportunities Strategic Alignment Across Verticals Execute Value Accretive Transactions Opportunity to Enhance Revenue Growth Scale B
Slide 4: Uniti's Focus
Uniti’s Focus ƒ Solid Operational Performance in Each of Our Business Segments ƒ Continued Uninterrupted Investments to Support Our Organic Business Growth Smaller, Accretive M&A and ƒ Working Through the Challenges Following Windstream Bankruptcy Filing ƒ Expect Windstream Will Successfully Navigat
Slide 5: Windstream Master Lease Agreement
Windstream Master Lease Agreement ƒ Uniti’s Master Lease Agreement with Windstream Remains in Full Effect ƒ Our Fundamental View of the Lease is Unchanged ƒ Windstream Has Stated its Intent to Continue Operations in the Ordinary Course ƒ Windstream Remains Current on Lease Payments • March through J
Slide 6: Fiber is The New Mission Critical Asset
Fiber is The New Mission Critical Asset ...Will Require Significant Investment… Rapid Expansion in Wireless Data… ƒ ƒ ƒ Carriers Continue to Densify Networks Wireless Operators Preparing for 5G Deployment FirstNet Network Expected To Depend On Small Cell Sites Key Network Growth Drivers Mobile Video
Slide 7: Uniti's Profile Has Rapidly Evolved
Uniti’s Profile Has Rapidly Evolved 63% National ~ 18,850 5.8M (1) (2) (3) Information as of April 30, 2015. Capital Deployed, Customers and Strand Miles are as of March 31, 2019 and give effect for the Bluebird transaction, which is assumed to have occurred on January 1, 2019. Annual Revenue, Adjus
Slide 8: Towers and Fiber – Highly Attractive Models
Towers and Fiber – Highly Attractive Models ~ 50 Year Shared Infrastructure with Similar Attractive Economics Note: Statistics are indicative of current market characteristics. Uniti Group’s arrangements could differ materially from those stated. (1) (2) (3) Based on estimated original useful econom
Slide 9: Strategic Asset Portfolio
Uniti Strategic Asset Portfolio Business Units Assets Miles(1) ~ 100% 70% - 95% 80% - 90% 85% - 100% 90% - 100% Gross Margin % Significant Leasable Capacity with Attractive Incremental Yields (1) (2) (3) (4) Uniti Leasing fiber strand miles give effect for the Bluebird transaction as if it had close
Slide 10: Combined Network Footprint
Combined Network Footprint Fiber Owner in 22 of the Top 30 Markets(2) Top 5 Competitive (1) Combined fiber strand and fiber route miles in service give effect for the Bluebird transaction as if it had closed on January 1, 2019. (2) Based on data from Cowen Equity Research. 10 Combined Fiber Strand M
Slide 11: Fiber Overview
Uniti Fiber Overview • • • • Leverage DFTT Backhaul and Small Cell Awards to Grow Metro Fiber Footprint with Deep, Dense and High Strand Count Fiber that can be Monetized for New Customers and Applications 14 Large DFTT and Small Cell Projects Currently Under Construction with National Wireless Carr
Slide 12: Fiber at a Glance
Uniti Fiber at a Glance Dark Fiber & Small Cells 7% Dark Fiber & Small Cells 50% Wireless Carriers 54% E-Rate & Gov’t 21% E-Rate & Gov’t 21% Lit Backhaul 47% Revenues Under Contract (2) Lit Customer Product Revenues (1) Revenues (1) 29% Ent & Whs 24% Ent & Whs 24% Ent & Whs 15% E-Rate & Gov’t 6% Oth
Slide 13: Fiber Revenues Under Contract
Uniti Fiber Revenues Under Contract 1Q19 Revenue Under Contract Remaining Contract Life ($ in Millions) $1,400 $ in Millions) Wireless $1,200 $1,032 M $1,000 Wholesale/ Enterprise $800 $188 M $600 E-Rate and Government $84 M $400 $200 Total $1,304 M $0 Installed Base Backlog Total Installed Base Bac
Slide 14: Leasing Overview
Uniti Leasing Overview • • • Proprietary Strategy to Acquire and Lease Shared Infrastructure Fiber Assets Target National and Regional Carriers’ Fiber Assets in U.S. Creative Multi-Element Transaction Structures to Maximize Value Potential • • Sale-Leasebacks Bulk Purchases of Fibers Re-Leased to Th
Slide 15: Leasing Sales Pipeline
Uniti Leasing Sales Pipeline(1) ($ in millions) Providers 6% Other 1% <$10 21% Carrier 14% 8% Total Contract Value Carriers Customer Type Carriers 14% шΨϮϱ 71% Well Diversified Sales Pipeline Within First Year of Development (1) Reflects transactions we are actively pursuing as of March 31, 2019. We
Slide 16: Summary of Uniti Leasing Transactions
Summary of Uniti Leasing Transactions (1) Dark Fiber Lease-Up on Current Portfolio Lease of Acquired and Existing Fiber Assets Sale Lease-Back Positive Momentum on Lease-Up of Network (1) (2) (3) (4) (5) Bluebird transaction is expected to close by the end of 3Q19. Amount presented in addition to al
Slide 17: Comparisons
Comparisons(1) Uniti Leasing Transaction Revenue Share Component Windstream Master Lease Agreement In-Line with Recent Transactions Transactions may not be comparable in all respects, and therefore caution should be maintained in making any conclusions from the presentation set forth above. For exam
Slide 18: Towers Overview
Uniti Towers Overview • • Focused on Building Towers in the U.S. Expect Lease-Up Activity to Ramp in 2019 • Expect Average Build of 200 to 300 Towers in the U.S. Annually Over the Next 5 Years ~300 Towers Currently Under Development Potential to Reach ~$50 Million in U.S. Tower Revenue by the End o
Slide 19: Sale of LATAM Towers Overview
Sale of LATAM Towers Overview ƒ Sale of LATAM Tower Portfolio for ~$100 Million(1) • ~37.5x 2018 Adjusted EBITDA(2) of $2.7 Million • ~500 Towers Across Mexico, Colombia and Nicaragua • Purchased by Phoenix Towers International ƒ Realizes Significant Value for Our Stockholders • Economic Gain of $
Slide 20: Current Capitalization
Current Capitalization Capitalization Debt Maturities 3/31/2019 ($ in Millions ) Term Loan B Revolver Secured Notes Unsecured Notes Capital Lease(1) Total Debt 2,061 749 550 1,710 55 ($ in Millions) $2,064 $ 5,124 Less: Cash Net Debt Preferred Equity Common Equity Market Capitalization Enterprise Va
Slide 21: Facts First
Uniti Facts First Diversified Communication Infrastructure REIT Note: All information is as of March 31, 2019, unless otherwise noted. Market data as of June 5, 2019. (1) (2) Lease revenues under the Master Lease with Windstream to be received over the remaining initial term of 15 years, the TPx, Ca
Slide 22: Facts
Uniti Facts S&P 400 Mid-Cap Company ~ $7.1B Enterprise Value Annual Revenue) ~ $1.1B Fiber Strand Miles 5.8M First Divers’ Contractual Net Lease Revenue) ~ $8.3B Revenue Under Contract Net Leverage’) 6.3x Leasing Segment EBITDA Margin 99% Cor ote Aeration a of Maoh 33,2019, une tere nota Mart ot a f
Slide 23: Reconciliation of Uniti Fiber Non-GAAP Financial Measures
(1) Reconciliation of Uniti Fiber Non-GAAP Financial Measures $ in Millions Uniti Fiber 1Q19 Uniti 1Q19 Net income $2.9 $2.5 Depreciation and amortization 28.3 103.8 Interest expense (income) (0.1) 84.5 Income tax expense (benefit) (2.1) 4.1 EBITDA $29.0 $194.8 Stock-based compensation 0.4 1.9 Trans
Slide 24: Reconciliation of Uniti Non-GAAP Financial Measures
Non-GAAP Financial Measures(1) Reconciliation of Uniti $ in Millions 2019 Current Outlook(2) Leasing(2) Uniti Fiber(2) Uniti Towers(2) CLEC(2) Corporate(2) Uniti(2) Net (loss) income $426 $16 $15 $1 ($410) $48 Depreciation and amortization 269 117 6 1 - 394 Interest expense (income) - (2) (1) - 377
Slide 25: Non-GAAP Financial Measures
Non-GAAP Financial Measures We refer to EBITDA, Adjusted EBITDA, Funds From Operations (“FFO”) as defined by the National Association of Real Estate Investment Trusts (“NAREIT”) and Adjusted Funds From Operations (“AFFO”) in our analysis of our results of operations, which are not required by, or pr
Slide 26: Glossary
Glossary 4G: The fourth generation of cellular wireless standards that is widely deployed by cellular operators today with the ability to transport data at rates up to 100 MBPS Internet access for mobile users. 5G: The fifth generation of cellular wireless standards that is in trial stages today, wi
Slide 27: Glossary
Glossary Dark Fiber: Fiber that has not yet been connected to telecommunications transmission equipment or optronics and, therefore, has not yet been activated or “lit”. Enterprise Value: Net Debt plus fair value of preferred equity plus market value of outstanding common stock and OP units. Etherne
Slide 28: Glossary
Glossary Mobile Switching Centers: Buildings where wireless service providers house their Internet routers and voice switching equipment. Monthly Churn Rate: Monthly churn rate is calculated as monthly Churn divided by MRR on the last day of the preceding period. MRR (Monthly recurring revenue): Mon
Slide 29: Glossary
Glossary Sales Bookings: MRR in a given period relating to orders that have been signed by the customer and accepted by order management. Small Cells: A site where antennae, electronic communications equipment and power are placed on a utility pole, street light pole or other structure that are gene
Slide 30: Glossary
Glossary Sales Bookings: MRR in a given period relating to orders that have been signed by the customer and accepted by order management. Small Cells: A site where antennae, electronic communications equipment and power are placed on a utility pole, street light pole or other structure that are gene