Uniti Group Inc. · NASDAQ:UNIT
Uniti — Communications Sales & Leasing — Jefferies 2016 Global Data Center REIT Summit
20 slides from Uniti's conference presentation, Jan 12, 2016
Slide 1: PEG Bandwidth – Jefferies 2016 Global Data Center REIT Summit
IMAGE OMITTEDIMAGE OMITTED PEG PEG Bandwidth Jefferies 2016 Global Data Center REIT Summit January 1 2, 2016
Slide 2: Safe Harbor
IMAGE OMITTEDSafe 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 stateme
Slide 3: PEG At A Glance
IMAGE OMITTEDPEG At A Glance Owned Lit Backhaul 89% 82% National National Carrier A Carrier B ~300K 34% 26% Product Customer FIBER Revenues Revenues MILES Controlled (6) 3% Wholesale 11% 2% $ in Millions 4Q LQA LQA Revenue $80 LQA Adjusted EBITDA $35 Revenue Y-o-Y Growth 25% Adjusted EBITDA Margin 4
Slide 4: Transaction Rationale
IMAGE OMITTEDTransaction Rationale § Fiber-To-The-Tower focused connections Ø Mission critical communication infrastructure assets § Long term contracts with strong credit quality customers Ø Contractual annual revenue of ~$70 million (1) Ø Strong relationships with major wireless carriers § Organic
Slide 5: Investment Highlights
IMAGE OMITTEDInvestment Highlights § Strong revenue growth and operating performance Ø Success based deployments with large anchor tenant awards Ø Focused on Tier II and Tier III markets § Robust sales opportunities to expand and diversify revenues Ø ~11,000 near-net cell site backhaul opportunities
Slide 6: Extensive Rural Fiber Network Serving Markets
IMAGE OMITTEDExtensive Rural Fiber Network Serving 7 Markets IMAGE OMITTEDIMAGE OMITTEDIMAGE OMITTEDIMAGE OMITTED Northeast-Mid Atlantic Network IMAGE OMITTEDIMAGE OMITTED Illinois Network IMAGE OMITTED South Central Network IMAGE OMITTED PEG Fiber Network Planned Fiber Network Markets Served • Fibe
Slide 7: PEG Sales Opportunities
IMAGE OMITTEDPEG Sales Opportunities (1) IMAGE OMITTED Wholesale Wholesale Wholesale 11% 33% 23% Dark Fiber BH Lit BH Lit BH CONTRACT Lit BH 21% CONNECTIONS 68% MRR 52% VALUE 44% Dark Fiber Dark Fiber BH BH 15% 33% IMAGE OMITTEDIMAGE OMITTED (1) Represents sales opportunities currently being pursued
Slide 8: PEG Leadership Team
IMAGE OMITTEDPEG Leadership Team § Rich Ruben – Vice Chairman Ø 20 years of experience in the telecommunications and technology industry Ø CEO of PEG Bandwidth from February 2010 through February 2015 Ø Served as CEO at XOS Technologies, WireOne Communications and V-SPAN, and President at Comcast-Sp
Slide 9: Transaction Summary
IMAGE OMITTEDTransaction Summary IMAGE OMITTED Overview § Purchase price of $409 million for all outstanding equity interests of PEG Bandwidth LLC (1) § $315 million cash Consideration § One million shares of CS&L common stock § 87,500 shares of 3% Series A Convertible Preferred Stock; each with a l
Slide 10: Pro Forma CS&L Structure
IMAGE OMITTEDPro Forma CS&L Structure IMAGE OMITTED QRS IMAGE OMITTED § Acquired and operated as a Taxable REIT Subsidiary (“TRS”) § CS&L receives step-up in basis of assets TRS § REIT synergies include: Current fiber and copper network InterCo Mortgage Note IMAGE OMITTED Qualified REIT Subsidiary (
Slide 11: Convertible Preferred Shares
IMAGE OMITTEDConvertible Preferred Shares IMAGE OMITTED 87,500 of Series A Convertible Preferred Stock Issue Par value of $.0001 per share Liquidation preference of $1,000 per share Non-voting except for customary matters affecting the holders Maturity 8 years Coupon 3.00% Conversion Price $35.00 –
Slide 12: Capitalization (Debt Agreement Basis)
IMAGE OMITTEDCapitalization (Debt Agreement Basis) $ in Millions Transaction 9/30/2015 Adjustment Combined Cash $ 210 $ -- $ 210 Revolver (1) -- 321 321 Term Loan B 2,135 -- 2,135 Secured Notes 400 -- 400 Unsecured Notes 1,110 -- 1,110 Capital Leases (2) -- 41 41 Total Debt 3,645 362 4,007 Convertib
Slide 13: CS&L Business Strategy
IMAGE OMITTEDCS&L Business Strategy Characteristics of Communication Infrastructure Assets ● Same customers and sales cycle ● Customers willing to lease on a long term basis ● Value increases over time ● Attractive economics ● Difficult to replicate ● REITable Fiber Towers Consumer Ground Data Cente
Slide 14: CS&L M&A Pipeline
IMAGE OMITTEDCS&L M&A Pipeline (1) IMAGE OMITTED 26% 66% DEAL TYPE 4% 4% Whole Company M&A / SLB Capex SLB IMAGE OMITTED 30% DEAL SIZE 53% ($M) 17% < $250M IMAGE OMITTED ≥ $250M and < $500M IMAGE OMITTED ≥ $500M IMAGE OMITTED 96% PROCESS MIX 4% Process Negotiated (1) This is a summary of the transac
Slide 15: Q&A
IMAGE OMITTED Q&A IMAGE OMITTED 14
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Slide 17: Non-GAAP Financial Measures
IMAGE OMITTEDNon-GAAP Financial Measures We refer to EBITDA, Adjusted EBITDA, Funds From Operations, or "FFO" (as defined by the National Association of Real Estate Investment Trusts ("NAREIT")), and Adjusted Funds From Operations, or "AFFO," in this presentation, which are not required by, or prese
Slide 18: Non-GAAP Financial Measures
IMAGE OMITTEDNon-GAAP Financial Measures Because the historical cost accounting convention used for real estate assets requires the recognition of depreciation expense except on land, such accounting presentation implies that the value of real estate assets diminishes predictably over time. However,
Slide 19: Other Reporting Definitions
IMAGE OMITTEDOther Reporting Definitions § Adjusted EBITDA Margin: Adjusted EBITDA divided by consolidated revenue. Adjusted EBITDA margin is a supplemental measure of our operating margin that should be considered along with, but not as an alternative to our operating margins § Contract Value: MRR
Slide 20: Reconciliation of Non-GAAP Historical Financials
IMAGE OMITTEDReconciliation of Non-GAAP Historical Financials (Unaudited, $ in Millions) IMAGE OMITTED 3Q15 Net Income $ 9.4 Depreciation & amortization 87.3 Interest expense 66.5 Income tax expense 0.3 EBITDA 163.5 Stock-based compensation 0.8 Acquisition and transaction costs 0.8 Adjusted EBITDA 1
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