Uniti Group Inc. · NASDAQ:UNIT
Uniti — Q3 2024 Earnings Presentation
33 slides from Uniti's earnings presentation, Oct 31, 2024
Slide 1: Third Quarter 2024 Financial Results Conference Call Presentation
Third Quarter 2024 Financial Results Conference Call Presentation October 31, 2024 Together, Building the Future
Slide 2: Cautionary Statement
Cautionary Statement No Offer or Solicitation This communication and the information contained in it are provided for information purposes only and are not intended to be and shall not constitute a solicitation of any vote or approval, or an offer to sell or solicitation of an offer to buy, or an in
Slide 3: Cautionary Statement: Forward-Looking Statements
Cautionary Statement Forward-Looking Statements 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
Slide 4: Strategic Fiber Revenue 2024 MRR Growth Outlook
Strategic Fiber Revenue 2024 MRR Growth Outlook (1) ($ in millions) $32 - $42 $348 - $358 ~4% to ~6% Year-Over-Year Growth (2) (2) Continue to Execute on Our Lease-Up Strategy (1) Includes Uniti Fiber and Non-Windstream Uniti Leasing recurring revenue. (2) Represents annualized MRR as of the last da
Slide 5: Consolidated New Sales Bookings
Consolidated New Sales Bookings ▪ Consolidated New Sales Bookings MRR of $0.9 Million in the Third Quarter of 2024 ▪ Driven by Hyperscalers and Generative AI Demand (MRR $ in millions) $1.1 $1.1 $1.0 $0.9 $0.9 $0.4 $0.3 $0.9 $0.8 $0.3 $0.8 77% 74% $0.7 74% $0.7 68% $0.4 67% 66% $0.3 $0.6 64% $0.3 $0
Slide 6: Recent Hyperscaler Deals Case Study
Recent Hyperscaler Deals Case Study Deal D Deals A – C Deal A Deal B Deal C Deal D Initial Contract Term 20 Years 20 Years 20 Years 5 Years Route Miles (New Construction) 46 Miles 50 Miles 90 Miles - Number of Strands Leased 864 432 864 12 Deal Type Strategic Fiber Sale Dark Fiber IRU Dark Fiber IRU
Slide 7: Third Quarter 2024 Consolidated Results
Third Quarter 2024 Consolidated Results ($ in millions) Revenue(1) Adjusted EBITDA(2) (3) AFFO (2) $291 $292 $69 $76 $233 $235 $30 $26 $215 $223 $209 $215 $95 $87 3Q23 3Q24 3Q23 3Q24 3Q23 3Q24 As Reported As Reported As Reported As Reported As Reported As Reported Uniti Leasing Uniti Fiber Uniti Lea
Slide 8: Growth Capital Investments Overview
Growth Capital Investments Overview 2015 - 2023 YTD 2024(1) Cumulative TCI Investment(2) ~$1.2 Billion ~$59 Million ~$1.3 Billion GCI Investment(3) ~$794 Million ~$231 Million ~$1.0 Billion Total Network Investment(4) ~$2.0 Billion ~$290 Million ~$2.3 Billion TCI Revenue(5) ~$237 Million ~$37 Millio
Slide 9: New Uniti Current Financial Profile
New Uniti Current Financial Profile ($ in millions) YTD 2023 YTD 2024 Growth % Kinetic $1,588 $1,581 (0.4%) Fiber Infrastructure $605 $623 3.0% Core Fiber Revenue $2,193 $2,205 0.5% Managed Services $793 $740 (6.8%) Total Revenue (1) $2,987 $2,944 (1.4%) Total Adjusted EBITDA(2)(3) $1,281 $1,330 3.8
Slide 10: Uniti Leasing 2024 Outlook
Uniti Leasing 2024 Outlook(1) ($ in millions) Revenue(2) Adjusted EBITDA(3) Net Success-Based Capex(4) $853 $877 $830 $848 $272 $250 2023 2024 2023 2024 2023 2024 As Reported Outlook As Reported Outlook As Reported Outlook 2024 Leasing Lease-Up Revenue Expected to Grow 25%+ From Prior Year (1) 2024
Slide 11: Uniti Fiber 2024 Outlook
Uniti Fiber 2024 Outlook(1) ($ in millions) Revenue Adjusted EBITDA(2) Net Capex(3) $297 $290 $39 $25 $265 $116 $115 $258 $128 $7 $110 $8 $118 $100 2023 2024 2023 2024 2023 2024 As Reported Outlook As Reported Outlook As Reported Outlook Core Recurring Core Non-Recurring Net Success-Based Maintenanc
Slide 12: Full Year 2024 Consolidated Outlook
Full Year 2024 Consolidated Outlook(1) ($ in millions, except per share data) Revenue Adjusted EBITDA(2) (3) $1,150 $1,167 $924 $940 2023 2024 2023 2024 As Reported Outlook As Reported Outlook AFFO(2) AFFO/Diluted Share(2) (4) $385 $361 $1.42 $1.35 2023 2024 2023 2024 As Reported Outlook As Reported
Slide 13: Uniti + Windstream Merger Overview
Uniti + Windstream Merger Overview
Slide 14: Creating a Premier Insurgent Fiber Provider
Creating a Premier Insurgent Fiber Provider ~239K ~4.3M Fiber Route Residential Miles(1) Households ~75% ~150K % Network Inventory On-Net Available Locations(2) ~600K 300+ Near-Net Metro Locations(3) Markets ~12.8K ~2.6K Fiber-to-the-Tower Small Cell Connections Connections Company’s Combined Tier I
Slide 15: FTTH Industry Benchmarks
FTTH Industry Benchmarks Industry Benchmark Range Low Average High Fiber Network Year 1(1) ~28% 9% ~20% 32% Penetration % of Homes Passed Maturity >40.0% 27% ~40% 47% Overbuilder Overlap(2) 15% 10% ~17% 25% % of Network with One or More Overbuilders Broadband ARPU(3) ~$90 $43 ~$65 $100 Avg. Total Br
Slide 16: Kinetic's FTTH Focus Has Significant Upside Potential
Kinetic’s FTTH Focus Has Significant Upside Potential 2020 – 2023 Strong Fiber Expansion Cohort Penetration Rates Opportunities Yr 1 Penetration Yr 2 Penetration 30% 30% 29% 29% 29% 27% 27% 28% 1.9M+ 400K+ 26% 26% 26% Incremental 25% Total Fiber Homes 24% Fiber Homes Passed 23% 23% Passed by 2027(1)
Slide 17: Hyperscalers Fueling National Growth Opportunity
Hyperscalers Fueling National Growth Opportunity ▪ Recent industry trends have created significant demand for lit and dark long-haul capacity ▪ Uniti’s Dark Fiber Capabilities: • Nearly 200K Combined Fiber Route Miles Available Nationally to Lease / IRU • 300+ Metro Markets; ~325K On-Net / Near-Net
Slide 18: Merger Pre-Close Priorities
Merger Pre-Close Priorities STATUS Execute Operationally at Uniti and Windstream DONE Present Unified Investor Relations Messaging with Windstream DONE Refine Strategy to Simplify Dual Silo Capital Structure for New Uniti DONE Refine Expanded FTTH Build Plan On-Track Develop Integration Plan to Achi
Slide 19: New Uniti Intrinsic Value Supported by Recent Financing / Strategic Transactions
New Uniti Intrinsic Value Supported by Recent Financing / Strategic Transactions ▪ Based on Current Fiber Build Plan, ~60% of Kinetic’s 2028 Estimated Adjusted EBITDA will be Fiber Related ▪ EXPECTED Kinetic Weighted Average Blended Multiple of 8.0x to 12.0x 2023 Recent Industry Multiples CURRENT Pu
Slide 20: Appendix
Appendix
Slide 21: Key 2024 Outlook Ranges
Key 2024 Outlook Ranges(1) $ in millions, except per share data Uniti Leasing Uniti Fiber Consolidated Revenue $872 - $882 $285 - $295 $1,157 - $1,177 Adjusted EBITDA(2) $843 - $853 $110 - $120 $930 - $950 Interest Expense, Net(3) - - $514 Net Success-Based Capex(4) $240 - $260 $90 - $110 $330 - $37
Slide 22: Reconciliation of Uniti Non-GAAP Financial Measures
Reconciliation of Uniti Non-GAAP Financial Measures(1) $ in millions Uniti Uniti 3Q23 3Q24 Net (loss) income(2) ($118.9) $12.2 Depreciation and amortization 77.3 79.3 Interest expense 120.7 131.0 Income tax benefit (56.1) (5.9) EBITDA $23.0 $216.6 Stock-based compensation 3.1 3.4 Adjustments for unc
Slide 23: Reconciliation of Uniti Non-GAAP Financial Measures
Reconciliation of Uniti Non-GAAP Financial Measures(1) $ in millions 2023 Leasing Uniti Fiber Corporate Uniti Net income (loss)(2) $647.0 ($153.3) ($575.5) ($81.8) Depreciation and amortization 178.9 131.6 - 310.5 Interest expense - - 512.3 512.3 Income tax expense (benefit) 0.2 (68.7) - (68.5) EBIT
Slide 24: Reconciliation of Non-GAAP Financial Measures
Reconciliation of Non-GAAP Financial Measures(1) $ in millions 2023 Uniti Windstream Net loss(2) ($82) ($210) Depreciation and amortization 311 791 Interest expense 512 210 Income tax benefit (68) (61) EBITDA $673 $730 Stock-based compensation 13 13 Adjustments for unconsolidated entities(2) 3 - Tra
Slide 25: Reconciliation of Uniti Non-GAAP Financial Measures
Reconciliation of Uniti Non-GAAP Financial Measures(1) $ in millions Uniti Uniti Uniti 3Q23 3Q24 2023 Net (loss) income attributable to common shares(2) ($119.2) $11.9 ($82.9) Real estate depreciation and amortization 55.4 56.4 221.1 Gain on sale of real estate, net of tax (1.4) - (2.2) Participatin
Slide 26: Reconciliation of Uniti Non-GAAP Financial Measures
Reconciliation of Uniti Non-GAAP Financial Measures(1) $ in millions 2024 Outlook(2) Leasing(2) Uniti Fiber(2) Corporate(2) Uniti(2) Net income (loss) $681 ($6) ($575) $100 Depreciation and amortization 178 135 - 313 Interest expense - - 514 514 Income tax expense (benefit) 2 (17) - (15) EBITDA $861
Slide 27: Reconciliation of Uniti Non-GAAP Financial Measures
Reconciliation of Uniti Non-GAAP Financial Measures(1) $ in millions Uniti 2024 Outlook(2) Net income attributable to common shares $97 Real estate depreciation and amortization 225 Gain on sale of real estate, net of tax (19) Participating securities’ share in earnings 1 Participating securities’ s
Slide 28: 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
Slide 29: 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 began to be deployed in 2019
Slide 30: Glossary
Glossary Core Adjusted EBITDA: Represents Adjusted EBITDA principally generated from leasing and lit services of the fiber network, as well as Adjusted EBITDA that are ancillary to the fiber network, including managed services. Core Adjusted EBITDA also includes non-recurring Adjusted EBITDA that is
Slide 31: Glossary
Glossary Growth Capital Investments (“GCI”): Capital expenditures on long-term, value-accretive fiber and related assets in the ILEC and CLEC territories owned by Uniti and leased to Windstream. Integration Capex: Capital expenditures made specifically with respect to recent acquisitions that are es
Slide 32: Glossary
Glossary NRC (non-recurring charge): Upfront customer payments that are primarily associated with an executed fiber-related contract that utilizes either newly constructed or already owned fiber, and the fiber is intended to be owned by Uniti on a long-term basis. Optronics: Various types of equipme
Slide 33: Glossary
Glossary Success-Based Capex: Gross capital expenditures related to installing existing or anticipated contractual customer service orders. Does not include capital expenditures related to integration, maintenance, and other, such as IT-related capex. Switch: A switch is an electronic device that se