Uniti Group Inc. · NASDAQ:UNIT
Uniti — BofA Securities 2024 Leveraged Finance Conference
29 slides from Uniti's conference presentation, December 2024
Slide 1: BofA Securities 2024 Leveraged Finance Conference
BofA Securities 2024 Leveraged Finance Conference December 3-4, 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
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: Uniti + Windstream Merger Overview
Uniti + Windstream Merger Overview
Slide 5: Transaction Overview
Transaction Overview Financial Terms ▪ Consideration to Windstream shareholders to include $425 million in cash, $575 million of preferred equity in the new combined company, and common shares representing ~38% ownership of the outstanding common equity of the combined company (1) • Windstream share
Slide 6: Transformative Combination Unlocks Significant Value
Transformative Combination Unlocks Significant Value Uniti and Windstream to combine to create a premier insurgent fiber provider with ~$4 billion in revenue and 239,000 fiber route miles covering 47 states within the U.S. Existing Uniti shareholders will own ~62% and existing Windstream shareholder
Slide 7: Merger Pre-Close Priorities
Merger Pre-Close Priorities STATUS Execute Operationally at Uniti and Windstream DONE Present Unified Investor Relations Messaging with Windstream DONE Refine Strategy to Simplify Dual Silo Capital Structure for New Uniti DONE Refine Expanded FTTH Build Plan On-Track Develop Integration Plan to Achi
Slide 8: Creating a Premier Insurgent Fiber Provider
Creating a Premier Insurgent Fiber Provider ~239K ~4.3M Fiber Route Residential Miles(1) Households ~75% ~150K % Network Inventory On-Net Available Locations(2) ~600K 300+ Near-Net Metro Locations(3) Markets ~12.8K ~2.6K Fiber-to-the-Tower Small Cell Connections Connections Company’s Combined Tier I
Slide 9: New Uniti Current Financial Profile
New Uniti Current Financial Profile ($ 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: New Uniti Intrinsic Value Supported by Recent 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 11: 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 $100 Avg. Total Br
Slide 12: Kinetic's FTTH Focus Has Significant Upside Potential
Kinetic’s FTTH Focus Has Significant Upside Potential 2020 – 2023 Strong Fiber Expansion Cohort Penetration Rates Opportunities Yr 1 Penetration Yr 2 Penetration 30% 30% 29% 29% 29% 27% 27% 28% 1.9M+ 400K+ 26% 26% 26% Incremental 25% Total Fiber Homes 24% Fiber Homes Passed 23% 23% Passed by 2027(1)
Slide 13: Hyperscalers Fueling National Growth Opportunity
Hyperscalers Fueling National Growth Opportunity ▪ Recent industry trends have created significant demand for lit and dark long-haul capacity ▪ Uniti’s Dark Fiber Capabilities: • Nearly 200K Combined Fiber Route Miles Available Nationally to Lease / IRU • 300+ Metro Markets; ~325K On-Net / Near-Net
Slide 14: Uniti's Path Forward
Uniti’s Path Forward High Yielding Accretive Opportunities Actionable Following Combination Strong Underlying Fiber Powerful Combination Accelerates Trajectory Opportunities for Further Value Creation Infrastructure Accretive M&A / SOTP Financing Unlocks On-Net Fiber (i.e. ABS) Network and Fiber Foc
Slide 15: Creating a Premier Digital Infrastructure Company
Creating a Premier Digital Infrastructure Company ▪ Uniti is a premier insurgent fiber provider within the U.S. Premier Digital Infrastructure ▪ Combines Uniti’s hard to replicate national network with scaled FTTH platform Company ▪ Differentiated position in large and growing Tier II/III markets ▪
Slide 16: Current Uniti Overview
Current.Uniti Overview
Slide 17: Uniti Company Overview
Uniti Company Overview Uniti Leasing Uniti Fiber Incremental Cash Owns, Acquires, and Leases Mission-Critical Communications Leading Provider of Lit and Dark Fiber Solutions for Wireless Yield ~100% Assets Nationwide to Wholesale Customers on Either an Exclusive Operators, Carriers, Enterprises, Sch
Slide 18: Year-Over-Year Growth Outlook
Strategic Fiber Revenue 2024 MRR Growth Outlook (1) ($ 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 19: 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 20: 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 21: Appendix
Appendix
Slide 22: 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 23: 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 24: 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 25: 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 26: 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 27: 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 28: 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 29: 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
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