Uniti Group Inc. · NASDAQ:UNIT
Uniti — TD Cowen 52nd Annual Technology, Media & Telecom Conference (May 2024)
34 slides from Uniti's conference presentation, May 29, 2024
Slide 1: Together, Building the Future
Together, Building the Future TD Cowen 52 nd Annual Technology, Media & Telecom Conference May 29, 2024
Slide 2: No Offer or Solicitation
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 invitation or recommend
Slide 3: Cautionary Statement
Cautionary Statement 3 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
Slide 4: Uniti + Windstream Merger Overview
Uniti + Windstream Merger Overview
Slide 5: Transformative Combination Unlocks Significant Value
Transformative Combination Unlocks Significant Value 5 Uniti and Windstream to combine to create a premier insurgent fiber provider with ~$4 billion in revenue and 217,000 fiber route miles covering 47 states within the U.S. Existing Uniti shareholders will own ~62% and existing Windstream sharehold
Slide 6: Merger Pre-Close Priorities
Merger Pre - Close Priorities 6 Execution at Uniti Fiber and Uniti Leasing Develop Integration Plan ▪ Finalize Leadership Team ▪ Refine Kinetic Insurgent Go - to - Market Strategy ▪ Maximize Off - Net to On - Net Cost Synergies Unified Investor Relations Messaging with Windstream Refine Expanded FTT
Slide 7: FTTH Industry Benchmarks
(1) Based on Windstream’s 2023 cohort penetration rate. (2) Consumer broadband ARPU as of March 31, 2024. (3) Kinetic cost per passing excludes RDOF and PPP funding. (4) Reflects expanded build plan for Kinetic. Industry benchmark range based on Consolidated’s, Frontier’s, Lumen’s, and TDS’ an nou n
Slide 8: New Uniti Long Term Growth
$2.2 $2.5 $0.8 $0.9 $1.0 $0.7 $4.1 $4.0 2023 2028 Estimate Kinetic Fiber Infrastructure Managed Services 2.1% CAGR New Uniti Long Term Growth (1) Excludes legacy Windstream revenue. Excluding Windstream wholesale, Fiber Infrastructure revenue CAGR would be 8.0%. (2) Excludes corporate expenses. Excl
Slide 9: New Uniti Intrinsic Value Supported by Recent 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 New Uniti Intrinsic Value Supported by Recent Financing / Strategic Transactions 9 Actionable Accretive Strategic and Fina
Slide 10: Transaction Terms and Consideration
▪ Consideration to Windstream shareholders to include $425 million in cash, $575 million of preferred equity in the new combine d company, and common shares representing ~38% ownership of the outstanding common equity of the combined company (1) • Windstream shareholders will additionally receive no
Slide 11: Combined Company's Assets & Customers Create a Leader in the Fiber Space
Combined Company’s Assets & Customers Create a Leader in the Fiber Space 11 Combined Company Windstream Uniti 4.3 Million Households OpCo PropCo Kinetic ~217,000 ~87,000 ~140,000 National Wholesale Fiber Route Miles (1) 30 to 50 Lit Metros Field Ops (2) 30 Lit Metros Regional Enterprise Leverages Ty
Slide 12: Creating a Premier Insurgent Fiber Provider
Creating a Premier Insurgent Fiber Provider 12 Market Expansion Opportunity Metro Markets with Uniti Enterprise Service Combined Uniti Network Residential Households ~4.3M Fiber Route Miles (1) ~217K On - Net Locations (2) ~150K % Network Inventory Available ~75% Metro Markets (4) 300+ Near - Net Lo
Slide 13: Unique, Diverse Footprint with Limited Overbuilder Presence
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 Additional network investments enhance competitive adv
Slide 14: Kinetic's FTTH Focus Has Significant Upside Potential
Kinetic’s FTTH Focus Has Significant Upside Potential Strong Fiber Expansion Opportunities ~34% 2020 - 2027 CAGR in Fiber Homes Passed (1) ~400K Incremental Fiber Homes Passed by 2027 (1)(2) >40% Long - Term Penetration Rate Target ~1.9M Total Fiber Homes Passed by 2027 (1) 14 Note: All data as of D
Slide 15: Uniti's Path Forward
Uniti’s Path Forward 15 FTTH Upgrade and Expansion Fiber Infrastructure Metro Market & Waves Expansion On - Net Fiber Focus Accretive Financing (i.e. ABS) M&A / SOTP Unlocks Network and Overhead Synergies Powerful Combination Accelerates Trajectory Opportunities for Further Value Creation Strong Und
Slide 16: Creating a Premier Digital Infrastructure Company
Creating a Premier Digital Infrastructure Company 16 Premier Digital Infrastructure Company ▪ Uniti is a premier insurgent fiber provider within the U.S. ▪ Combines Uniti’s hard to replicate national network with scaled FTTH platform ▪ Differentiated position in large and growing Tier II/ III market
Slide 17: Current Uniti Overview
Current.Uniti Overview
Slide 18: Uniti Company Overview
Uniti Company Overview National Network of 141,000 Fiber Route Miles and 8.5 Million Fiber Strand Miles Incremental Cash Yield 20% Incremental Cash Yield ~100% Leading Provider of Lit and Dark Fiber Solutions for Wireless Operators, Carriers, Enterprises, Schools and Government, Including Cell Site
Slide 19: Uniti's National Fiber Network
Uniti’s National Fiber Network Robust Demand For Our Portfolio of Mission Critical Communications Infrastructure (1) As of March 31, 2024. (2) Represents new fiber route miles constructed at Uniti Fiber since 1/1/2018, and new fiber route miles constructed associated wit h the Windstream GCI program
Slide 20: Strategic Fiber Revenue 2024 MRR Growth Outlook
Strategic Fiber Revenue 2024 MRR Growth Outlook (1) Continue to Execute on Our Lease - Up Strategy ($ in millions) 20 ~4% to 6% Year - Over - Year Growth (1) Includes Uniti Fiber and Non - Windstream Uniti Leasing recurring revenue. (2) R epresents annualized MRR as of the last day of the year. (2)
Slide 21: Cumulative Uniti Lease-Up
Cumulative Uniti Lease - Up Lease - up Provides Significant Upside on Fiber Acquired Through Sale Leasebacks and Other Asset Acquisitions (1) (2) (3) (4) (5) Incremental Cash Yield 29% Incremental Cash Yield ~100% (1) Calculated as expected annualized recurring cash flow on major wireless anchor bui
Slide 22: National Wholesale Business Overview
$1.9 $2.1 $4.0 2022 2023E 2024E 2025E 2026E 2027E 2028E 2029E 2030E Uniti Leasing National Wholesale Business Overview Focus on Wholesale Opportunities Provides Significant Margin Enhancement and AFFO Growth 22 ▪ Strong Market and Growing Demand for High - Capacity Long - Haul Routes • Annual North
Slide 23: Consolidated New Sales Bookings
$0.3 $0.7 $0.5 $0.7 $0.5 $0.5 $0.5 $0.8 $0.3 $0.4 $0.4 $0.3 $0.3 $0.3 $0.3 $0.4 $0.3 $0.3 $0.4 $0.3 $0.4 $0.4 $0.3 $0.3 $0.3 $0.3 $0.53 $0.98 $0.93 $1.01 $0.84 $0.88 $0.79 $1.13 $0.62 $0.75 $0.71 $0.54 $0.60 66% 72% 61% 67% 52% 64% 74% 74% 77% 64% 62% 68% 57% 1Q21 2Q21 3Q21 4Q21 1Q22 2Q22 3Q22 4Q22
Slide 24: Metro Business Overview
$216 $263 $304 $296 $285 $333 $300 $328 $283 $260 $298 $221 $253 $197 $227 $199 $213 $267 $334 $279 $279 $269 $342 $278 $253 $250 1Q21 2Q21 3Q21 4Q21 1Q22 2Q22 3Q22 4Q22 1Q23 2Q23 3Q23 4Q23 1Q24 Enterprise New Sales Bookings Enterprise Gross Installs (MRR $ in thousands) Metro Business Overview Ente
Slide 25: Growth Capital Investments Overview
Growth Capital Investments Overview GCI Program “Facilitates Future Proofing” of Uniti’s Network (1) As of March 31, 2024. (2) Represents tenant capital improvements made by Windstream. (3) Represents growth capital investments made by Uniti. (4) Represents combined TCI and GCI investments. (5) Repr
Slide 26: Appendix
Appendix
Slide 27: Reconciliation of Non-GAAP Financial Measures
Reconciliation of Non - GAAP Financial Measures (1) $ in millions 2023 Windstream Uniti ($210) ($82) Net loss (2) 791 311 Depreciation and amortization 210 512 Interest expense (61) (68) Income tax benefit $730 $673 EBITDA 13 13 Stock - based compensation - 3 Adjustments for unconsolidated entities
Slide 28: Reconciliation of Uniti Non-GAAP Financial Measures
Reconciliation of Uniti Non - GAAP Financial Measures (1) $ in millions 2024 Outlook (2) Uniti (2) Corporate (2) Uniti Fiber (2) Leasing (2) $126 ($541) ($13) $680 Net income (loss) 317 - 137 179 Depreciation and amortization 506 506 - - Interest expense (12) - (14) 2 Income tax expense (benefit) $9
Slide 29: 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, o
Slide 30: Glossary
Glossary 4G: The fourth generation of cellular wireless standards that is widely deployed by cellular operators today with the ability to tra nsport 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 201
Slide 31: Glossary
Glossary Core Adjusted EBITDA: Represents Adjusted EBITDA principally generated from leasing and lit services of the fiber network, as well as Adjusted EBIT DA that are ancillary to the fiber network, including managed services. Core Adjusted EBITDA also includes non - recurring Adjusted EBITDA that
Slide 32: 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 ar
Slide 33: 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 e
Slide 34: Glossary
Glossary Success - Based Capex: Gross capital expenditures related to installing existing or anticipated contractual customer service orders. Does not inclu de capital expenditures related to integration, maintenance, and other, such as IT - related capex. Switch: A switch is an electronic device th
Uniti Group — TD Cowen 52nd Annual Technology, Media & Telecom Conference (May 2024) on 6ix