Uniti Group Inc. · NASDAQ:UNIT
Uniti — Q3 2023 Earnings Presentation
29 slides from Uniti's earnings presentation, Nov 13, 2023
Slide 1: 3Q23 Financial Earnings
Sensitivity: Internal 3Q23 Financial Earnings November 9, 2023
Slide 2: Forward-looking statements
Sensitivity: Internal 2 “This presentation includes forward-looking statements that are subject to risks and uncertainties that could cause actual future events and results to differ materially from those expressed in the forward-looking statements. Forward-looking statements are typically identifie
Slide 3: Presenters
Sensitivity: Internal 3 Paul Sunu Chief Executive Officer Drew Smith Chief Financial Officer & Treasurer Genesis White VP, Investor Relations
Slide 4: Third quarter highlights
Sensitivity: Internal Fiber Build Momentum Continues 74K new premises added in 3Q 1.6 million total premises now have access to FTTH services 32% coverage of consumer households was achieved by quarter end Adjusted EBITDAR of $370M; up 3% year-over-year and 2% year-to-date Strong Strategic Revenue T
Slide 5: Strategic priorities
Sensitivity: Internal 5 Grow market share through 1GB speed enablement Grow strategic revenue while exiting TDM Expand network and partnerships to grow revenue and contribution margin – KINETIC – – ENTERPRISE – – WHOLESALE – Focus on diversity and inclusion Reduce our carbon footprint Secure and kee
Slide 6: 1 Gbps premises passed
Sensitivity: Internal 141 158 162 169 170 170 173 174 178 826 954 1,012 1,111 1,174 1,237 1,294 1,336 1,406 0 200 400 600 800 1,000 1,200 1,400 1,600 3Q21 4Q21 1Q22 2Q22 3Q22 4Q22 1Q23 2Q23 3Q23 1 Gbps Premises Passed (in 000’s) SMB Consumer 1,112 1,174 1,280 1,344 1,407 1,510 74K 1 Gbps Premises Co
Slide 7: Homes in Kinetic footprint with access to speeds
Sensitivity: Internal 70% 72% 76% 79% 81% 42% 44% 50% 53% 56% 5% 10% 22% 29% 32% 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 2019 2020 2021 2022 3Q23 25 Mbps+ 100 Mbps+ 1Gbps % of Homes in Kinetic Footprint with Access to Available Speeds 7
Slide 8: Consumer fiber subscription growth and penetration
Sensitivity: Internal 32.9 23.6 28.7 24.4 23.1 22.4% 23.2% 24.4% 25.5% 25.8% 0% 4% 8% 12% 16% 20% 24% 28% 175 225 275 325 375 3Q22 4Q22 1Q23 2Q23 3Q23 264 316 363 340 287 Ended 3Q with Consumers on 1G capable facilities, up 23K from 2Q23 Penetration Consumer Fiber Subscription Growth Shows Strong Ad
Slide 9: Newest fiber cohorts showing strong penetration
Sensitivity: Internal 2023 Cohorts 18% 16% 22% 15% 15% 20% 22% 25% 26% 27% 23% 23% 29% 22% 21% 26% 2Q20 3Q20 4Q20 1Q21 2Q21 3Q21 4Q21 1Q22 2Q22 3Q22 27% 22% 1Q23 2Q23 Newest Fiber Cohorts Are Showing Strong Penetration Early Note: Cohort penetration reflects consumers on 1G capable facilities, withi
Slide 10: Broadband revenue and ARPU
Sensitivity: Internal 10 $291 $290 $300 $304 $301 $82.65 $82.65 $85.78 $87.41 $87.10 $70 $75 $80 $85 $90 $280 $285 $290 $295 $300 $305 $310 3Q22 4Q22 1Q23 2Q23 3Q23 Broadband Revenue ($ in millions) Broadband ARPU Note: Broadband revenue and ARPU shown is for consumer subscribers
Slide 11: Strategic revenue growth in Enterprise
Sensitivity: Internal 68% 64% 68% 70% 73% 60% 65% 70% 75% 3Q22 4Q22 1Q23 2Q23 3Q23 Cloud services, increasing bandwidth demand & software enabled networks fueling Strategic Revenue growth 3Q23 Annualized Strategic Product Revenue is over $500M and growing 15% y-o-y; Total Strategic Revenues are now
Slide 12: Windstream Enterprise SASE Express Lane
Sensitivity: Internal 12 Windstream Enterprise concierge managed service gives businesses fourteen-day installation for security peace-of-mind Windstream Enterprise Launches SASE Express Lane with Cato Networks to Give Businesses Quick Cybersecurity Protection PRESS RELEASE
Slide 13: Windstream Wholesale
Sensitivity: Internal Differentiate Windstream Wholesale from our competitors by being nimble, agile and fast in a commodity-based market. Expand our networks and make it easy to connect with Windstream Wholesale to drive more sales across our footprint. 13 13% service revenue growth y-o-y driven by
Slide 14: Wholesale award and iconnect portal
Sensitivity: Internal 14 Windstream Wholesale was named 2023 Best North American Wholesale Carrier by Capacity Media during their recent Global Carrier Awards event This esteemed industry award demonstrates recognition of Windstream Wholesale’s market leadership in technology innovation, network exp
Slide 15: Financial Overview
Sensitivity: Internal Financial Overview 2022 2022 2022 2022 2022 2023 2023 2023 Q1 Q2 Q3 Q4 YE Q1 Q2 Q3 Revenue Kinetic $ 534 $ 532 $ 544 $ 597 $ 2,206 $ 552 $ 550 $ 544 Enterprise 463 434 429 375 1,701 384 351 356 Wholesale 92 98 103 100 393 111 106 116 OfficeSuite 5 5 5 5 20 6 6 6 Segment Service
Slide 16: TDM retirement accelerates cost reduction
Sensitivity: Internal TDM Retirement Accelerates Cost Reduction and Improves Customer Experience 3Q23 annualized run-rate of $747M in interconnection, network facility and fiber expenses; annualized decline of 20% $385 million of Legacy TDM-related expense including Network Facility expense; annuali
Slide 17: Debt maturity and liquidity
Sensitivity: Internal $250 $0 $0 $0 $0 $713 $1,400 $- $250 $500 $750 $1,000 $1,250 $1,500 2023 2024 2025 2026 2027 2028 $475 Debt Maturity as of November 10, 2022 Revolver Draw Note: Available capacity under credit facility excludes outstanding letters of credit of $104.3 million of which $78.4 mill
Slide 18: Kinetic fully owned and operated metrics
Sensitivity: Internal Broadband Consumers(1) Fiber Broadband Consumers(1) Fiber Route Miles(1) Fiber Households Today(1) Fiber Households – Build Plan(1) Windstream Owns 100GB POPs(1) Total Consumer Revenues(2) Kinetic Owned Assets(3) E&W Owned Assets(3) Kinetic Fully Owned and Operated Metrics 228K
Slide 19: 2023 Guidance
Sensitivity: Internal 19 (all $ in millions) 2022 Results 2023 Guidance Adjusted EBITDAR $1,484M Flat to +2.5% y-o-y Adjusted Capex $1,067M Approximately $1,100M GCI $238M Approximately $250M Cash Interest $173M Approximately $200M Cash Taxes $12M Similar to 2022 Fiber Consumer Customer Additions 12
Slide 20: Our Mission and Vision
OUR MISSION CONNECT PEOPLE AND EMPOWER BUSINESS IN AWORLO OF INFINITE POSSIBILITIES OUR VISION TO PROVIDE INNOVATIVE SOFTWARE AND NETWORK SOLUTIONS WHILE CONSISTENTLY DELIVERING AN AMAZING CUSTOMER EXPERIENCE ONE GOAL: GROWTH!
Slide 21: Quarterly supplemental schedules (Pro Forma)
Sensitivity: Internal Quarterly supplemental schedules (Pro Forma) 21
Slide 22: Supplemental Financial Information
Supplemental Financial Information Windstream Holdings II, LLC ("Windstream", "we", "us", "our", or "the Company") has presented in this Investor Supplement unaudited adjusted results, which excludes depreciation and amortization, straight-line expense under the master leases with Uniti Group, Inc.
Slide 23: Supplemental Financial Information
Supplemental Financial Information ‘WINDSTREAM HOLDINGS IL LLC UNAUDITED ADIUSTED RESULTS OF OPERATIONS (NON-GAAP) ‘QUARTERLY SUPPLEMENTAL INFORMATION forthe quartet periods mth years 2023 and 2022 (Ga malions) 20m 20 ADIUSTED RESULTS OF OPERATIONS: Teal ied Tad Tag Teal Enns ier Tad Ta Revenues ad
Slide 24: Supplemental Financial Information
Supplemental Financial Information WINDSTREAM HOLDINGS Il LLC UNAUDITED ADIUSTED RESULTS OF OPERATIONS (NON-GAAP) (QUARTERLY SUPPLEMENTAL INFORMATION, forthe quarterly periods inthe yeas 2023 and 2022 i auilions) Debt Leverage Ratio: ‘Long-term debt, including curent maturities (G) ‘Add: Capital lea
Slide 25: Supplemental Financial Information
Supplemental Financial Information WINDSTREAM HOLDINGS IL LLC (QUARTERLY SUPPLEMENTAL INFORMATION - REVENUE SUPPLEMENT forth quarterly periods inthe Years 2023 and 2022 (Gn:miions) ‘Bronan bales ce Te TT ‘Consanee 380 385 Ris 380 Ta68 oso H03 303 sie Large besiness 83 268 266 29 ins jor 309 301 a8 D
Slide 26: Supplemental Financial Information
Supplemental Financial Information WINDSTREAM HOLDINGS 1, LLC (QUARTERLY SUPPLEMENTAL INFORMATION - BUSINESS SEGMENTS. forthe quarterly periods in the years 2025 and 2022 nmiltions) 2022 Toad Ext ENITs ered Toad ge 3d Qi Rigi ees Kinetic ‘evens and sales ‘Service revennes s sous s S520 $ 22064 $68 S
Slide 27: Supplemental Financial Information
Supplemental Financial Information WINDSTREAM HOLDINGS II, LLC QUARTERLY SUPPLEMENTAL INFORMATION - BUSINESS SEGMENTS for the quarterly periods in the years 2023 and 2022 (a millions) 2023, Total 3rd Que. 2nd Qur. Peter Total ath Qu. 2nd Qtr. eer Total segment revenues and expenses Revenues and sale
Slide 28: Supplemental Financial Information
Supplemental Financial Information \WINDSTREAM HOLDINGS IL, LLC (QUARTERLY SUPPLEMENTAL INFORMATION - OPERATING STATISTICS for the quarterly petiods in the years 2023 and 2022 (Cais in thousands, Dollar in mullions, except per unit amounts) 2023 2072 Teal 3a ad Ow Tae Teal Ene 3 Ow ad Ow Tar Kinetic
Slide 29: Supplemental Financial Information
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