Uniti Group Inc. · NASDAQ:UNIT
Uniti — Q2 2024 Earnings Presentation
33 slides from Uniti's earnings presentation, Aug 1, 2024
Slide 1: Second Quarter 2024 Financial Results Conference Call Presentation
Second Quarter 2024 Financial Results Conference Call Presentation August 1, 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 This communication contains forward-looking statements, including within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements can often be identified by terms such as “may,” “will,” “appears,” “should,” “expec
Slide 4: Strategic Fiber Revenue 2024 MRR Growth Outlook
Strategic Fiber Revenue 2024 MRR Growth Outlook (1) ($ in millions) $35 - $45 $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 ~$1.1 Million in the Second Quarter of 2024 • Highest Level of Bookings Since the Fourth Quarter of 2022 ▪ Driven by Hyperscalers and Generative AI Demand (MRR $ in millions) $1.1 $1.1 $1.0 $1.0 $0.9 $0.9 $0.4 $0.3 $0.8 $0.3 $0
Slide 6: Growth Capital Investments Overview
Growth Capital Investments Overview 2015 - 2023 YTD 2024(1) Cumulative TCI Investment(2) ~$1.2 Billion - ~$1.2 Billion GCI Investment(3) ~$794 Million ~$197 Million ~$991 Million Total Network Investment(4) ~$2.0 Billion ~$197 Million ~$2.2 Billion TCI Revenue(5) ~$237 Million ~$24 Million ~$261 Mil
Slide 7: Second Quarter 2024 Consolidated Results
Second Quarter 2024 Consolidated Results ($ in millions) Revenue(1) Adjusted EBITDA(2) (3) AFFO (2) $295 $284 $77 $71 $237 $228 $31 $25 $212 $218 $207 $211 $91 $92 2Q23 2Q24 2Q23 2Q24 2Q23 2Q24 As Reported As Reported As Reported As Reported As Reported As Reported Uniti Leasing Uniti Fiber Uniti Le
Slide 8: Uniti Leasing 2024 Outlook
Uniti Leasing 2024 Outlook(1) ($ in millions) Revenue(2) Adjusted EBITDA(3) Net Success-Based Capex(4) $853 $874 $830 $846 $272 $250 2023 2024 2023 2024 2023 2024 As Reported Outlook As Reported Outlook As Reported Outlook 2024 Leasing Lease-Up Revenue Expected to Grow 20%+ From Prior Year (1) 2024
Slide 9: Uniti Fiber 2024 Outlook
Uniti Fiber 2024 Outlook(1) ($ in millions) Revenue Adjusted EBITDA(2) Net Capex(3) $297 $290 $39 $25 $265 $116 $115 $258 $128 $7 $109 $8 $118 $100 2023 2024 2023 2024 2023 2024 As Reported Outlook As Reported Outlook As Reported Outlook Core Recurring Core Non-Recurring Net Success-Based Maintenanc
Slide 10: Full Year 2024 Consolidated Outlook
Full Year 2024 Consolidated Outlook(1) ($ in millions, except per share data) Revenue Adjusted EBITDA(2) (3) $1,150 $1,164 $924 $940 2023 2024 2023 2024 As Reported Outlook As Reported Outlook AFFO(2) AFFO/Diluted Share(2) (4) $385 $363 $1.42 $1.36 2023 2024 2023 2024 As Reported Outlook As Reported
Slide 11: Uniti + Windstream Merger Overview
Uniti + Windstream Merger Overview
Slide 12: Creating a Premier Insurgent Fiber Provider
Creating a Premier Insurgent Fiber Provider ~236K ~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 13: Kinetic Investment Highlights
Kinetic Investment Highlights Unique, diverse footprint with limited overbuilder presence ▪ Rural and geographically diverse footprint: ~75% of footprint in markets with less than 20,000 households ▪ Insurgent fiber provider resulting in 85% of footprint with no overbuilders Already upgraded ~1.6 mi
Slide 14: FTTH Industry Benchmarks
FTTH Industry Benchmarks Industry Benchmark Range Low Average High Fiber Network Year 1(1) ~29% 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 $100 Avg. Total Br
Slide 15: Kinetic's FTTH Focus Has Significant Upside Potential
Kinetic’s FTTH Focus Has Significant Upside Potential 2020 – 2023 Strong Fiber Expansion Cohort Penetration Rates Opportunities Yr 1 Penetration Yr 2 Penetration 30% 29% 29% 29% 27% 27% 28% ~1.9M ~400K 26% 26% Incremental 25% Total Fiber Homes 24% Fiber Homes Passed 23% 23% Passed by 2027(1) 22% 22%
Slide 16: New Uniti Current Financial Profile
New Uniti Current Financial Profile ($ in millions) YTD 2023 YTD 2024 Growth % Kinetic $1,078 $1,083 0.5% Fiber Infrastructure $400 $411 2.8% Core Fiber Revenue $1,478 $1,495 1.1% Managed Services $526 $505 (4.0%) Total Revenue(1) $2,005 $2,000 (0.2%) Total Adjusted EBITDA(2) $872 $916 5.0% Growing
Slide 17: New Uniti Long Term Growth
New Uniti Long Term Growth ▪ Current Business Plan Fully Funded • 2024-2025 Cumulative Free Cash Flow Burn Expected to be More than Fully Funded with On-Hand Available Liquidity • New Uniti Expected to be Free Cash Flow Positive by the End of 2026 New Uniti New Uniti ($ in billions) Revenue(1) Adjus
Slide 18: 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 19: Merger Pre-Close Priorities
Merger Pre-Close Priorities Execute Operationally at Uniti and Windstream Present Unified Investor Relations Messaging with Windstream Refine Strategy to Simplify Dual Silo Capital Structure for New Uniti Develop Integration Plan to Achieve Planned Synergies Refine Expanded FTTH Build Plan Begin Str
Slide 20: 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 21: Appendix
Appendix
Slide 22: Key 2024 Outlook Ranges
Key 2024 Outlook Ranges(1) $ in millions, except per share data Uniti Leasing Uniti Fiber Consolidated Revenue $869 - $879 $285 - $295 $1,154 - $1,174 Adjusted EBITDA(2) $841 - $851 $110 - $120 $930 - $950 Interest Expense, Net(3) - - $514 Net Success-Based Capex(4) $240 - $260 $90 - $110 $330 - $37
Slide 23: Reconciliation of Uniti Non-GAAP Financial Measures
Reconciliation of Uniti Non-GAAP Financial Measures(1) $ in millions Uniti Uniti 2Q23 2Q24 Net income(2) $25.6 $18.3 Depreciation and amortization 77.3 78.1 Interest expense 119.7 127.5 Income tax benefit (4.4) (2.6) EBITDA $218.2 $221.2 Stock-based compensation 3.1 3.4 Adjustments for unconsolidate
Slide 24: 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 25: Reconciliation of Uniti Non-GAAP Financial Measures
Reconciliation of Uniti Non-GAAP Financial Measures(1) $ in millions Uniti Uniti Uniti 2Q23 2Q24 2023 Net income (loss) attributable to common shares(2) $25.3 $17.6 ($82.9) Real estate depreciation and amortization 55.1 55.6 221.1 Gain on sale of real estate, net of tax - - (2.2) Participating secur
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) $679 ($10) ($559) $110 Depreciation and amortization 178 135 - 313 Interest expense - - 514 514 Income tax expense (benefit) 2 (13) - (11) EBITDA $85
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 $108 Real estate depreciation and amortization 223 Gain on sale of real estate, net of tax (19) Participating securities’ share in earnings 0 Participating securities’
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