Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically ~~and posted on its corporate Web site, if any,~~ every Interactive Data File required to be submitted ~~and posted~~ pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit ~~and post~~ such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

As of ~~October 27, 2017,~~April 29, 2021, the registrant had ~~175,462,901~~233,448,317 shares of common stock, $0.0001 par value per share, outstanding.

This Quarterly Report on Form 10-Q includes forward-looking statements as defined under U.S. federal securities law. Forward-looking statements include all statements that are not historical statements of fact and those regarding our intent, belief or expectations, including, but not limited to, statements regarding: our expectations regarding the settlement we have entered into with Windstream Holdings, Inc. (together with Windstream Holdings II, LLC, its successor in interest, and subsidiaries, “Windstream”); the future prospects and financial health of Windstream; our expectations about our ability to maintain our status as a real estate investment trust (a “REIT”); our expectations regarding the effect of the COVID-19 pandemic on our results of operations and financial condition, including the potential need to perform an interim goodwill analysis and report an impairment charge related thereto; our expectations regarding the effect of the Coronavirus Aid, Relief and Economic Security Act (the “CARES Act”), the Consolidated Appropriations Act of 2021 (the “2021 Appropriations Act”) and other tax related legislation on our tax position; our expectations regarding the future growth and demand of the telecommunication ~~industry;~~industry, future financing plans, business strategies, growth prospects, ~~and~~ operating and financial ~~performance; expectations regarding the impact~~performance, and ~~integration of Hunt Telecommunications, LLC ("Hunt")~~our future liquidity needs and ~~Southern Light, LLC ("Southern Light"), including expectations regarding operational synergies with Uniti Towers and Uniti Fiber; expectations regarding settling conversion of~~access to capital; our 3% convertible preferred stock in cash upon conversion; expectations regarding the probability of our obligation to pay contingent consideration upon Tower Cloud, Inc.'s ("Tower Cloud") or Hunt's achievement of certain defined operational and financial milestones; expectations regarding future deployment of fiber strand miles and recognition of revenue related thereto; expectations regarding levels of capital expenditures; expectations regarding the deductibility of goodwill for tax purposes; our expectations regarding reclassification of accumulated other comprehensive income (loss) related to derivatives to interest expense; our expectations regarding the amortization of intangible assets; our expectations regarding remediation of the material weakness in our internal control over financial reporting as discussed in Part II, Item 9A of our Annual Report on Form 10-K filed with the U.S. Securities and Exchange Commission (“SEC”) on March 5, 2021, as amended by Amendment No. 1 thereto filed on Form 10-K/A with the SEC on March 30, 2021 (the “Annual Report”); and our expectations regarding the payment of dividends.

Words such as ~~"anticipate(s)~~“anticipate(s),~~" "expect(s)~~” “expect(s),~~" "intend(s)~~” “intend(s),~~" "plan(s)~~” “plan(s),~~" "believe(s)~~” “believe(s),~~" "may," "will," "would," "could," "should," "seek(s)"~~” “may,” “will,” “would,” “could,” “should,” “seek(s)” and similar expressions, or the negative of these terms, are intended to identify such forward-looking statements. These statements are based on management's current expectations and beliefs and are subject to a number of risks and uncertainties that could lead to actual results differing materially from those projected, forecasted or expected. Although we believe that the assumptions underlying the forward-looking statements are reasonable, we can give no assurance that our expectations will be attained. Factors which could have a material adverse effect on our operations and future prospects or which could cause actual results to differ materially from our expectations include, but are not limited ~~to:~~

Forward-looking statements speak only as of the date of this Quarterly Report. Except in the normal course of our public disclosure obligations, we expressly disclaim any obligation to release publicly any updates or revisions to any forward-looking statements to reflect any change in our expectations or any change in events, conditions or circumstances on which any such statement is based.

(Thousands, except par value)	September 30, 2017			December 31, 2016			(Unaudited) March 31, 2021			December 31, 2020
Assets:
Property, plant and equipment, net	$	3,037,469		$	2,670,037		$	3,329,239		$	3,273,353
Cash and cash equivalents		49,923			171,754			122,466			77,534
Accounts receivable, net		32,715			15,281			51,485			62,952
Goodwill		672,368			262,334			601,878			601,878
Intangible assets, net		438,019			160,584			387,013			390,725
Straight-line revenue receivable		42,050			29,088			19,557			13,107
Other assets		19,666			9,674
Other assets, net								108,208			152,883
Investment in unconsolidated entities								65,481			66,043
Deferred income tax assets, net								8,682			-
Assets held for sale								87,750			93,343
Total Assets	$	4,292,210		$	3,318,752		$	4,781,759		$	4,731,818
Liabilities, Convertible Preferred Stock and Shareholders' Deficit:
Liabilities and Shareholders' Deficit:
Liabilities:
Accounts payable, accrued expenses and other liabilities	$	80,725		$	40,977
Accounts payable, accrued expenses and other liabilities, net							$	145,568		$	146,144
Settlement payable (Note 14)								398,887			418,840
Intangible liabilities, net								185,807			187,886
Accrued interest payable		70,205			27,812			68,845			95,338
Deferred revenue		466,321			261,404			1,021,627			995,123
Derivative liability		10,442			6,102
Derivative liability, net								19,908			22,897
Dividends payable		109,188			94,607			36,894			36,725
Deferred income taxes		85,145			28,394
Capital lease obligations		56,976			54,535
Deferred income tax liabilities, net								-			10,540
Finance lease obligations								14,856			15,468
Contingent consideration		104,117			98,600			-			2,957
Notes and other debt, net		4,361,963			4,028,214			4,988,890			4,816,524
Liabilities held for sale								54,167			55,752
Total liabilities		5,345,082			4,640,645			6,935,449			6,804,194

Commitments and contingencies (Note 13)

Convertible preferred stock, Series A, $0.0001 par value, 88 shares authorized, issued and outstanding, $87,500 liquidation value		82,785			80,552
Commitments and contingencies (Note 14)

Shareholders' Deficit:
Preferred stock, $0.0001 par value, 50,000 shares authorized, no shares issued and outstanding		-			-
Common stock, $0.0001 par value, 500,000 shares authorized, issued and outstanding: 174,821 shares at September 30, 2017 and 155,139 at December 31, 2016		17			15
Preferred stock, $0.0001 par value, 50,000 shares authorized, 0 shares issued and outstanding								-			-
Common stock, $0.0001 par value, 500,000 shares authorized, issued and outstanding: 231,694 shares at March 31, 2021 and 231,262 at December 31, 2020								23			23
Additional paid-in capital		642,981			141,092			1,150,550			1,209,141
Accumulated other comprehensive loss		(5,678	)		(6,369	)		(17,580	)		(20,367	)
Distributions in excess of accumulated earnings		(1,876,599	)		(1,537,183	)		(3,355,423	)		(3,330,455	)
Total Uniti shareholders' deficit		(1,239,279	)		(1,402,445	)		(2,222,430	)		(2,141,658	)
Noncontrolling interests - operating partnership units		103,622			-
Noncontrolling interests:
Operating partnership units								68,615			69,157
Cumulative non-voting convertible preferred stock, $0.01 par value, 3 shares authorized, 1 issued and outstanding								125			125
Total shareholders' deficit		(1,135,657	)		(1,402,445	)		(2,153,690	)		(2,072,376	)
Total Liabilities, Convertible Preferred Stock, and Shareholders' Deficit	$	4,292,210		$	3,318,752
Total Liabilities and Shareholders' Deficit							$	4,781,759		$	4,731,818

The accompanying notes are an integral part of these condensed consolidated financial statements.


	Three Months Ended September 30,						Nine Months Ended September 30,						Three Months Ended March 31,
(Thousands, except per share data)	2017			2016			2017			2016			2021			2020
Revenues:
Leasing	$	171,673		$	169,366		$	512,893		$	506,945		$	194,936		$	184,352
Fiber Infrastructure		66,363			25,219			136,158			38,995			77,650			77,407
Tower		2,796			159			6,679			271			-			3,720
Consumer CLEC		4,378			5,496			13,966			17,277			-			683
Total revenues		245,210			200,240			669,696			563,488			272,586			266,162
Costs and Expenses:
Interest expense		78,784			70,522			227,235			204,607			140,581			178,393
Depreciation and amortization		113,444			96,723			317,404			275,448			70,964			86,121
General and administrative expense		22,068			10,191			49,549			23,619			25,823			27,133
Operating expense (exclusive of depreciation and amortization)		30,172			15,704			74,258			30,322			38,084			40,310
Transaction related costs		8,512			9,315			32,213			24,435
Other (income) expense		(3,933	)		-			9,638			-
Transaction related and other costs														4,137			15,972
Other expense, net														454			3,075
Total costs and expenses		249,047			202,455			710,297			558,431			280,043			351,004

(Loss) income before income taxes		(3,837	)		(2,215	)		(40,601	)		5,057
Income tax (benefit) expense		(8,672	)		128			(8,976	)		899
Net income (loss)		4,835			(2,343	)		(31,625	)		4,158
Net income attributable to noncontrolling interests		107			-			107			-
Net income (loss) attributable to shareholders		4,728			(2,343	)		(31,732	)		4,158
Loss before income taxes and equity in earnings from unconsolidated entities														(7,457	)		(84,842	)
Income tax benefit														2,557			4,576
Equity in earnings from unconsolidated entities														398			-
Net loss														(4,502	)		(80,266	)
Net loss attributable to noncontrolling interests														(64	)		(1,413	)
Net loss attributable to shareholders														(4,438	)		(78,853	)
Participating securities' share in earnings		(388	)		(407	)		(1,156	)		(1,164	)		(248	)		(200	)
Dividends declared on convertible preferred stock		(656	)		(649	)		(1,968	)		(1,087	)		(3	)		(3	)
Amortization of discount on convertible preferred stock		(745	)		(745	)		(2,235	)		(1,241	)
Net income (loss) attributable to common shareholders	$	2,939		$	(4,144	)	$	(37,091	)	$	666
Net loss attributable to common shareholders													$	(4,689	)	$	(79,056	)

Earnings (loss) per common share:
Loss per common share:
Basic	$	0.02		$	(0.03	)	$	(0.22	)	$	0.00		$	(0.02	)	$	(0.41	)
Diluted	$	(0.02	)	$	(0.03	)	$	(0.26	)	$	0.00		$	(0.02	)	$	(0.41	)

Weighted-average number of common shares outstanding
Weighted-average number of common shares outstanding:
Basic		174,818			153,878			166,624			151,578			231,469			192,236
Diluted		175,399			153,878			166,816			151,716			231,469			192,236

Dividends declared per common share	$	0.60		$	0.60		$	1.80		$	1.80

The accompanying notes are an integral part of these condensed consolidated financial statements.

(Thousands, except share data)

Preferred Stock

Common Stock

Additional Paid-in Capital

Accumulated Other Comprehensive Loss

Distributions in Excess of Accumulated Earnings

Noncontrolling Interest

Total Shareholders' Deficit

Shares

Amount

Shares

Amount

Balance at December 31, 2015

-

$
-

149,862,459

$
15

$
1,392

$
(5,427
)

$
(1,162,886
)

$
-

$
(1,166,906
)
Net income

-

-

-

-

-

-

4,158

-

4,158

Issuance of common stock

-

-

5,077,629

-

137,665

-

-

-

137,665

Amortization of discount of convertible preferred stock

-

-

-

-

(1,241
)

-

-

-

(1,241
)
Other comprehensive loss

-

-

-

-

-

(63,511
)

-

-

(63,511
)
Common stock dividends

-

-

-

-

-

-

(276,567
)

-

(276,567
)
Convertible preferred stock dividends

-

-

-

-

-

-

(1,087
)

-

(1,087
)
Equity issuance cost

-

-

-

-

(625
)

-

-

-

(625
)
Net share settlement

-

-

-

-

(203
)

-

(1,920
)

-

(2,123
)
Stock-based compensation

-

-

183,072

-

3,478

-

-

-

3,478

Balance at September 30, 2016

-

$
-

155,123,160

$
15

$
140,466

$
(68,938
)

$
(1,438,302
)

$
-

$
(1,366,759
)

Balance at December 31, 2016

-

$
-

155,138,637

$
15

$
141,092

$
(6,369
)

$
(1,537,183
)

$
-

$
(1,402,445
)
Net loss

-

-

-

-

-

-

(31,732
)

107

(31,625
)
Issuance of common stock

-

-

19,528,302

2

517,499

-

-

-

517,501

Amortization of discount on convertible preferred stock

-

-

-

-

(2,235
)

-

-

-

(2,235
)
Other comprehensive income

-

-

-

-

-

691

-

43

734

Common stock dividends

-

-

-

-

-

-

(304,384
)

(2,497
)

(306,881
)
Convertible preferred stock dividends

-

-

-

-

-

-

(1,969
)

-

(1,969
)
Equity issuance cost

-

-

-

-

(18,575
)

-

-

-

(18,575
)
Contributions from noncontrolling interest holders

105,969

105,969

Net share settlement

-

-

-

-

(421
)

-

(1,331
)

-

(1,752
)
Stock-based compensation

-

-

154,100

-

5,621

-

-

-

5,621

Balance at September 30, 2017

-

$
-

174,821,039

$
17

$
642,981

$
(5,678
)

$
(1,876,599
)

$
103,622

$
(1,135,657
)

	For the Three Months Ended March 31,
(Thousands, except share data)	Preferred Stock				Common Stock				Additional Paid-in Capital			Accumulated Other Comprehensive Income (Loss)			Distributions in Excess of Accumulated Earnings			Noncontrolling Interest - OP Units			Noncontrolling Interest - Non-voting Preferred Shares		Total Shareholders' Deficit
	Shares		Amount		Shares		Amount
Balance at December 31, 2019		-	$	-		192,141,634	$	19	$	951,295		$	(23,442	)	$	(2,494,740	)	$	83,704		$	-	$	(1,483,164	)
Net loss		-		-		-		-		-			-			(78,853	)		(1,413	)		-		(80,266	)
Other comprehensive loss		-		-		-		-		-			(5,275	)		-			(95	)		-		(5,370	)
Common stock dividends declared ($0.15 per share)		-		-		-		-		-			-			(29,184	)		-			-		(29,184	)
Distributions to noncontrolling interest		-		-		-		-		-			-			-			(520	)		-		(520	)
Cumulative non-voting convertible preferred stock		-		-		-		-		-			-			-			-			125		125
Payments related to tax withholding for share-based compensation		-		-		-		-		(373	)		-			-			-			-		(373	)
Stock-based compensation		-		-		95,609		-		2,995			-			-			-			-		2,995
Issuance of common stock - employee stock purchase plan		-		-		43,849		-		306			-			-			-			-		306
Balance at March 31, 2020		-	$	-		192,281,092	$	19	$	954,223		$	(28,717	)	$	(2,602,777	)	$	81,676		$	125	$	(1,595,451	)

Balance at December 31, 2020		-	$	-		231,261,958	$	23	$	1,209,141		$	(20,367	)	$	(3,330,455	)	$	69,157		$	125	$	(2,072,376	)
Cumulative effect adjustment for adoption of new accounting standard		-		-		-		-		(59,908	)		-			14,598			-			-		(45,310	)
Net loss		-		-		-		-		-			-			(4,438	)		(64	)		-		(4,502	)
Other comprehensive income		-		-		-		-		-			2,787			-			42			-		2,829
Common stock dividends declared ($0.15 per share)		-		-		-		-		-			-			(35,128	)		-			-		(35,128	)
Distributions to noncontrolling interest		-		-		-		-		-			-			-			(520	)		-		(520	)
Payments related to tax withholding for share-based compensation		-		-		-		-		(2,306	)		-			-			-			-		(2,306	)
Stock-based compensation		-		-		396,481		-		3,335			-			-			-			-		3,335
Issuance of common stock - employee stock purchase plan		-		-		35,764		-		288			-			-			-			-		288
Balance at March 31, 2021		-		-		231,694,203		23		1,150,550			(17,580	)		(3,355,423	)		68,615			125		(2,153,690	)

The accompanying notes are an integral part of these condensed consolidated financial statements.

	Nine Months Ended September 30,						Three Months Ended March 31,
(Thousands)	2017			2016			2021			2020
Cash flow from operating activities
Net (loss) income	$	(31,625	)	$	4,158
Adjustments to reconcile net (loss) income to net cash provided by operating activities:
Net loss							$	(4,502	)	$	(80,266	)
Adjustments to reconcile net loss to net cash provided by operating activities:
Depreciation and amortization		317,404			275,448			70,964			86,121
Amortization of deferred financing costs		7,964			5,640
Amortization of debt discount		9,127			5,964
Amortization of deferred financing costs and debt discount								4,959			9,708
Loss on debt extinguishment								37,965			73,952
Interest rate swap termination								2,829			1,666
Deferred income taxes		(12,281	)		836			(3,428	)		(4,919	)
Equity in (earnings) loss of unconsolidated entities								(398	)		-
Distributions of cumulative earnings from unconsolidated entities								960			-
Cash paid for interest rate swap settlement								(2,989	)		(269	)
Straight-line revenues		(10,857	)		(13,174	)		(6,906	)		109
Stock-based compensation		5,621			3,478			3,335			2,995
Change in fair value of contingent consideration		9,091			-			21			1,495
Loss on asset disposal								134			1,923
Accretion of settlement obligation								4,553			-
Other		810			22			181			(97	)
Changes in assets and liabilities, net of acquisitions:
Accounts receivable		532			(4,435	)		11,466			3,246
Other assets		(4,307	)		(4,951	)		47,630			(8,083	)
Accounts payable, accrued expenses and other liabilities		46,275			27,565			(40,110	)		44,691
Net cash provided by operating activities		337,754			300,551			126,664			132,272
Cash flow from investing activities
Acquisition of businesses, net of cash acquired		(763,665	)		(489,538	)
Acquisition of ground lease investments		(13,869	)		(8,549	)
NMS asset acquisitions (Note 3)		(68,557	)		-
Capital expenditures - other		(111,101	)		(10,655	)
Capital expenditures								(84,377	)		(75,093	)
Net cash used in investing activities		(957,192	)		(508,742	)		(84,377	)		(75,093	)
Cash flow from financing activities
Principal payments on debt		(15,810	)		(16,744	)
Repayment of debt								(1,051,181	)		(2,044,728	)
Proceeds from issuance of notes								1,110,000			2,250,000
Dividends paid		(294,272	)		(273,692	)		(34,961	)		(42,519	)
Payment of settlement obligation								(24,505	)		-
Payments of contingent consideration		(19,999	)		-			(2,979	)		(7,086	)
Proceeds from issuance of Notes		201,000			148,875
Distributions paid to noncontrolling interest								(520	)		(762	)
Borrowings under revolving credit facility		360,000			521,000			105,000			-
Payments under revolving credit facility		(200,000	)		(321,000	)		(55,000	)		(196,700	)
Capital lease payments		(2,348	)		(945	)
Deferred financing costs		(28,533	)		(2,946	)
Common stock issuance, net of costs		498,924			54,211
Net share settlement		(1,752	)		(2,123	)
Net cash provided by financing activities		497,210			106,636
Effect of exchange rates on cash and cash equivalents		397			(181	)
Net decrease in cash and cash equivalents		(121,831	)		(101,736	)
Finance lease payments								(710	)		(1,026	)
Payments for financing costs								(22,931	)		(47,775	)
Payment of tender premium								(17,550	)		-
Employee stock purchase program								288			306
Payments related to tax withholding for share-based compensation								(2,306	)		(373	)
Net cash provided by (used in) financing activities								2,645			(90,663	)

Net increase (decrease) in cash and cash equivalents								44,932			(33,484	)
Cash and cash equivalents at beginning of period		171,754			142,498			77,534			142,813
Cash and cash equivalents at end of period	$	49,923		$	40,762		$	122,466		$	109,329

Non-cash investing and financing activities:
Property and equipment acquired but not yet paid	$	3,602		$	4,403		$	17,795		$	14,221
Tenant capital improvements	$	166,298		$	112,200			62,888			36,444
Acquisition of businesses through non-cash consideration	$	122,395		$	259,996

The accompanying notes are an integral part of these condensed consolidated financial statements.

Uniti Group Inc. (the “Company,” “Uniti,” “we,” “us,” or “our”)~~, formerly known as Communications Sales and Leasing, Inc.,~~ was incorporated in the state of Maryland on September 4, 2014. We are an independent internally managed real estate investment trust (“REIT”) engaged in the acquisition and construction of mission critical infrastructure in the communications industry. We are principally focused on acquiring and constructing fiber optic, ~~broadband networks, wireless communications towers,~~ copper and coaxial broadband networks and data centers. ~~Effective the first quarter of 2017, we commenced managing~~We have historically managed our operations in ~~four~~ 4 separate lines of business: Uniti Fiber, Uniti Towers, Uniti Leasing, and the Consumer CLEC Business.

On June 1, 2020, the Company completed the sale of its Uniti Towers business, and as of the end of the second quarter of 2020, the Company had substantially completed the wind down of its Consumer CLEC business. As a result, effective January 1, 2021, we manage our operations focused on our 2 primary lines of business: Uniti Fiber and Uniti Leasing.

The Company operates through a customary “up-REIT” structure, pursuant to which we hold substantially all of our assets through a partnership, Uniti Group LP, a Delaware limited partnership (the “Operating Partnership”), that we control as general partner, with the only significant difference between the financial position and results of operations of the Operating Partnership and its subsidiaries compared to the consolidated financial position and consolidated results of operations of Uniti is that the results for the Operating Partnership and its subsidiaries do not include Uniti’s Consumer CLEC segment, which consists of Talk America Services. The up-REIT structure is intended to facilitate future acquisition opportunities by providing the Company with the ability to use common units of the Operating Partnership as a tax-efficient acquisition currency. As of ~~September 30, 2017,~~March 31, 2021, we are the sole general partner of the Operating Partnership and own approximately ~~97.7%~~98.5% of the partnership interests in the Operating Partnership.

The accompanying Condensed Consolidated Financial Statements include all accounts of the Company and its wholly-owned and/or controlled subsidiaries, ~~which consist of~~including the Operating ~~Partnership, which the Company has determined itself to be the primary beneficiary.~~Partnership. Under the Accounting Standards Codification 810, Consolidation(“ASC 810”), ~~Consolidation~~, the Operating Partnership is considered a variable interest entity ~~the Company~~ and is consolidated in the ~~Company’s~~ Condensed Consolidated Financial Statements of Uniti Group Inc. because the Company is the primary beneficiary. All material intercompany balances and transactions have been ~~eliminated.~~eliminated.

ASC 810 provides guidance on the identification of entities for which control is achieved through means other than voting rights (“variable interest entities” or “VIEs”) and the determination of which business enterprise, if any, should consolidate the VIEs. Generally, the consideration of whether an entity is a VIE applies when either: (1) the equity investors (if any) lack (i) the ability to make decisions about the entity’s activities through voting or similar rights, (ii) the obligation to absorb the expected losses of the entity, or (iii) the right to receive the expected residual returns of the entity; (2) the equity investment at risk is insufficient to finance that entity’s activities without additional subordinated financial support; or (3) the equity investors have voting rights that are not proportionate to their economic interests and substantially all of the activities of the entity involve or are conducted on behalf of an investor with a disproportionately small voting interest. The Company consolidates VIEs in which it is considered to be the primary beneficiary. The primary beneficiary is defined byas the entity having both of the following characteristics: (1) the power to direct the activities that, when taken together, most significantly impact the VIE’s ~~performance:~~performance; and (2) the obligation to absorb losses and right to receive the returns from the VIE that would be significant to the VIE.

The accompanying Condensed Consolidated Financial Statements have been prepared in accordance with U.S. generally accepted accounting principles (“GAAP”) for interim financial information set forth in the Accounting Standards Codification (“ASC”), as published by the Financial Accounting Standards Board (“FASB”), and with the applicable rules and regulations of the Securities and Exchange Commission (“SEC”). Accordingly, they do not include all of the information and footnotes required by GAAP for complete financial statements. In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for a fair statement of results for the interim period have been included. Operating results from any interim period are not necessarily indicative of the results that may be expected for the full fiscal year. The accompanying Condensed Consolidated Financial Statements and related notes should be read in conjunction with the audited consolidated financial statements and notes thereto included in our Annual Report on Form 10-K ~~for~~filed with the ~~year ended December 31, 2016~~U.S. Securities and Exchange Commission (“~~Annual Report”~~SEC”), on March 5, 2021, as amended by Amendment No. 1 thereto filed on Form 10-K/A with the SEC on ~~February 23, 2017.~~March 30, 2021 (the “Annual Report”). Accordingly, significant accounting policies and other disclosures normally provided have been omitted from the accompanying Condensed Consolidated Financial Statements and related notes since such items are disclosed in our Annual Report.

~~Income Taxes~~Concentration of Credit Risks—Prior to September 2020, we were party to a long-term exclusive triple-net lease (the “Master Lease”) with Windstream Holdings, Inc. (together with Windstream Holdings II, LLC, its successor in interest, and its subsidiaries, “Windstream”) pursuant to which a substantial portion of our real property was leased to Windstream and from which a substantial portion of our leasing revenues were derived. On September 18, 2020, Uniti and Windstream bifurcated the Master Lease and entered into two structurally similar master leases (collectively, the “Windstream Leases”), which amended and restated the Master Lease in its entirety. Revenue under the Windstream Leases and the Master Lease provided 66.3% and 65.1% of our revenue for the three months ended March 31, 2021 and 2020, respectively. Because a substantial portion of our revenue and cash flows are derived from lease payments by Windstream pursuant to the Windstream Leases, there could be a material adverse impact on our consolidated results of operations, liquidity, financial condition and/or ability to pay dividends and service debt if Windstream were to default under the Windstream Leases or otherwise experiences operating or liquidity difficulties and becomes unable to generate sufficient cash to make payments to us.

Prior to its emergence from bankruptcy on September 21, 2020, Windstream was a publicly traded company subject to the periodic filing requirements of the Securities Exchange Act of 1934, as amended (the Exchange Act”). Windstream’s historic filings through their quarter ended June 30, 2020 can be found at www.sec.gov. Additionally, the Windstream audited financial statements as of December 31, 2020 and for the period from September 22, 2020 to December 31, 2020 and as of December 31, 2019 and for the period from January 1, 2020 to September 21, 2020 and for each of the two years in the period ended December 31, 2019 are included as an exhibit to our Annual Report. On September 22, 2020, Windstream filed a Form 15 to terminate all filing obligations under Sections 12(g) and 15(d) under the Exchange Act. Windstream filings are not incorporated by reference in this Quarterly Report on Form 10-Q.

We ~~currently have recorded~~monitor the credit quality of Windstream through numerous methods, including by (i) reviewing credit ratings of Windstream by nationally recognized credit agencies, (ii) reviewing the financial statements of Windstream that are required to be delivered to us pursuant to the Windstream Leases, (iii) monitoring news reports regarding Windstream and its business, (iv) conducting research to ascertain industry trends potentially affecting Windstream, (v) monitoring Windstream’s compliance with the terms of the Windstream Leases and (vi) monitoring the timeliness of its payments under the Windstream Leases.

As of the date of this Quarterly Report on Form 10-Q, Windstream is current on all lease payments. We note that in August 2020, Moody’s Investor Service assigned a ~~$5.3 million liability for unrecognized tax benefits which was assumed~~B3 corporate family rating with a stable outlook to Windstream in connection with its post-emergence exit financing. At the ~~acquisition~~same time, S&P Global Ratings assigned Windstream a B- issuer rating with a stable outlook. In order to assist us in our continuing assessment of ~~Network Management Holdings, LTD (“NMS”).~~ ~~See Note 3~~.~~We have filed our initial U.S. federal~~Windstream’s creditworthiness, we periodically receive certain confidential financial information and ~~state income tax returns which are subject to examination.~~metrics from Windstream.

~~Customer List Intangible Assets~~—Customer list intangible assets are presented in the financial statements at cost less accumulated amortization and are amortized using the straight-line method over their estimated useful lives with the exception of the customer list intangible assets related to our Consumer CLEC Business, which were brought over at carry-over basis at the time of the Company’s spin-off from Windstream Holdings, Inc. in 2015, and are amortized using the sum-of-the-digits method over their estimated useful lives.

~~Impairment of Long-Lived Assets and Finite-Lived Intangible Assets~~—We review long-lived assets and finite-lived intangible assets for impairment whenever events or changes in circumstances indicate that the carrying amount of the asset group may not be recoverable from future undiscounted net cash flows we expect the asset group to generate. If the asset group is not fully recoverable, an impairment loss would be recognized for the difference between the carrying value of the asset group and its estimated fair value based on discounted net future cash flows.

~~Reclassifications—Certain amounts have been reclassified to conform with current year presentation.~~ Following the acquisition of NMS in the first quarter of 2017, the Company manages and reports our operations in four reportable business segments: Leasing, Fiber Infrastructure, Towers and Consumer CLEC. Prior year information, including revenues on the Consolidated Statement of Income, has been recast to conform to the current year presentation. ~~See Note 12~~.

In ~~January 2017,~~August 2020, the FASB issued ASU ~~No. 2017-01,~~ ~~Business Combinations (Topic 805)~~2020-06, Debt - Debt with Conversion and Other Options (Subtopic 470- 20) and Derivatives and Hedging - Contracts in Entity’s Own Equity (Subtopic 815-40): ~~Clarifying the Definition of a Business~~Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity (“ASU ~~2017-01”~~2020-06”), which simplifies the accounting for certain financial instruments with characteristics of liabilities and equity. ASU 2020-06 (1) simplifies the accounting for convertible debt instruments and convertible preferred stock by removing the existing guidance in ASC 470-20, Debt: Debt with Conversion and Other Options, that requires entities to account for beneficial conversion features and cash conversion features in equity, separately from the host convertible debt or preferred stock; (2) revises the scope exception from derivative accounting in ASC 815-40 for freestanding financial instruments and embedded features that are both indexed to the issuer’s own stock and classified in stockholders’ equity, by removing certain criteria required for equity classification; and (3) revises the guidance in ASC 260, Earnings Per Share, to require entities to calculate diluted earnings per share (“EPS”) for convertible instruments by using the if-converted method.

In addition, entities must presume share settlement for purposes of calculating diluted EPS when an ~~effort to clarify the definition of a business with the objective of adding guidance to assist entities with evaluating whether transactions should~~instrument may be ~~accounted for as acquisitions (or disposals) of assets~~settled in cash or ~~businesses.~~shares. ASU ~~2017-01~~2020-06 is effective for fiscal years beginning after December 15, ~~2017,~~2021, and interim periods within those fiscal years, with early adoption permitted. ~~We adopted~~The Company elected to early adopt the guidance ASU ~~2017-01 effective~~2020-06 as of January 1, ~~2017,~~2021 using the modified retrospective transition method. Pursuant to the transition guidance, the Company is required to apply the guidance to all impacted financial instruments that were outstanding as of January 1, 2021 with ~~prospective application. As a result of~~ the ~~adoption of ASU 2017-01, the Company’s acquisition of NMS (see Note 3) was determined to be an asset acquisition. Transaction costs associated with asset acquisitions, which includes our real property interest investments, are now capitalized as opposed to be recorded~~cumulative effect recognized as an ~~expense as was required prior~~adjustment to ~~adoption~~the opening balance of ~~ASU 2017-01.~~

~~In August 2016, the FASB issued ASU No. 2016-15,~~ ~~Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and Cash Payments~~ (“ASU 2016-15”). ASU 2016-15 provides guidance on reducing the diversity in how certain cash receipts and cash payments are presented and classified in the statement of cash flows. In addition to other specific cash flow issues, ASU 2016-15 provides clarification on when an entity should separate cash receipts and cash payments into more than one class of cash flows and when an entity should classify those cash receipts and payments into one class of cash flows on the basis of predominance. The new guidance is effective for the fiscal years beginning after December 15, 2017, and interim periods within those fiscal years, and early adoption is permitted. The Company is currently evaluating the impact the adoption of this accounting standard will have on our financial statements.

~~In August 2017, the FASB issued~~ ~~Accounting Standards Update (“ASU”) No.~~ ~~2017-12, Derivatives and Hedging (Topic 815): Targeted Improvements to Accounting for Hedging Activities~~ (“ASU 2017-12”), which amends and simplifies existing guidance in order to allow companies to more accurately present the economic effects of risk management activities in the financial statements. ASU 2017-12 is ~~effective for annual periods beginning after December 15, 2018 and interim periods within those annual periods, and earlier adoption is permitted. The Company is currently evaluating the impacts the adoption of this accounting standard will have on our financial statements.~~

~~In February 2017, the FASB issued~~ ~~ASU No.~~ ~~2017-05,~~ Other Income - Gains and Losses from the Derecognition of Nonfinancial Assets (Subtopic 610-20): Clarifying the Scope of Asset Derecognition Guidance and Accounting for Partial Sales of Nonfinancial Assets, which provides guidance for recognizing gains and losses from the transfer of nonfinancial assets and for partial sales of nonfinancial assets, and is effective for financial statements issued for fiscal years and interim periods beginning after December 15, 2017. The Company is currently evaluating the impacts the adoption of this accounting standard will have on our financial statements, but it is not expected to have a material impact.retained earnings.

In ~~January 2017,~~As a result of early adopting ASU 2020-06, the ~~FASB issued~~Company made certain adjustments to its accounting for the outstanding exchangeable senior unsecured notes. The adoption of ASU ~~No. 2017-04,~~ ~~Intangibles - Goodwill~~2020-06 resulted in the re-combination of the liability and ~~Other (Topic 350): Simplifying the Accounting for Goodwill Impairment~~ ~~(“ASU 2017-04”), which removes the requirement to perform~~equity components of these notes into a ~~hypothetical purchase price allocation to measure goodwill impairment. A goodwill impairment will now be the amount by which a reporting unit’s~~single liability instrument. The carrying value ~~exceeds its fair value, not~~as of December 31, 2020, totaled approximately $275.4 million and as a result of the adoption increased by $61.1 million to ~~exceed the carrying amount~~$336.5 million as of ~~goodwill. ASU 2017-04 is effective for annual and interim periods beginning~~ January 1, ~~2020, with early~~2021. Because of this adoption, ~~permitted,~~the effective interest rate on the exchangeable senior unsecured notes went from 11.1% to 4.8%. Additional paid-in-capital was reduced by $59.9 million and ~~applied prospectively. We adopted ASU 2017-04 effective~~deferred tax liabilities were reduced by $15.8 million. Approximately $14.6 million of cumulative effect of adoption was recognized to the opening balance of retained earnings as of January 1, ~~2017,~~2021.

The following is a description of principal activities, separated by reportable segments (see Note 13), from which the Company generates its revenues.

Leasing revenue represents the results from our leasing program, Uniti Leasing, which is engaged in the acquisition of mission-critical communications assets and ~~there was no material impact~~leasing them to anchor customers on either an exclusive or shared-tenant basis. See Note 4.

The Fiber Infrastructure segment represents the operations of our ~~financial position, results~~fiber business, Uniti Fiber, which provides (i) consumer, enterprise, wholesale and backhaul lit fiber, (ii) E-rate, (iii) small cell, (iv) construction services, (v) dark fiber and (vi) other revenue generating activities.

~~In May 2014,~~of our former towers business, Uniti Towers, through which we acquired and constructed tower and tower-related real estate, which we then leased to our customers in the ~~FASB issued ASU No. 2014-09,~~ United States and Latin America. Revenue from ~~Contracts with~~our towers business qualifies as a lease under ASC 842 and is outside the scope of Topic 606. Starting in 2019, the Company completed a series of transactions to largely divest of its towers business: on April 2, 2019, May 23, 2019 and June 1, 2020, the Company completed the sales of its Latin American business, substantially all of its U.S. ground lease business, and its U.S. tower business, respectively.

The Consumer CLEC segment represents the operations of Talk America Services (“Talk America”) through which we operated the Consumer CLEC Business, which provided local telephone, high-speed internet and long-distance services to customers in the eastern and central United States. Customers ~~(“ASU 2014-09”). This~~ ~~update outlines~~ are billed monthly for services rendered based on actual usage or contracted amounts. The transaction price is equal to the monthly-recurring charge multiplied by the initial contract term (typically 12 months), plus any non-recurring or variable charges. As of the end of the second quarter of 2020, we substantially completed a ~~single comprehensive~~wind down of our Consumer CLEC business.

The following table presents our revenues disaggregated by revenue ~~recognition model for entities to follow in accounting for revenue~~stream.

At March 31, 2021, and December 31, 2020, lease receivables were $19.1 million and $17.5 million, respectively, and receivables from contracts with customers were $32.2 million and ~~supersedes most current~~$45.1 million, respectively.

Contract assets primarily consist of unbilled construction revenue recognition guidance, including industry-specific guidance. The core principle of the revenue model is that an entity should recognize revenue for the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled to receive for those goods or services. ASU 2014-09 is effective for annual periods beginning after December 15, 2017 and interim periods within those annual periods. Early adoption is permitted for public companies for annual periods beginning after December 15, 2016. The Company intends to adopt the revenue recognition guidance on January 1, 2018 using the modified retrospective approach. The Company’s implementation efforts include reviewing revenue contracts and the identification of revenue within the scope of the guidance. As ASU 2014-09 does not impact lessor accounting, the Company believes our accounting for leasing revenues will not be significantly impacted. While the Company currently has not identified any material changes in the timing of revenue recognition, we do anticipate an impact to our Fiber Infrastructure costs, primarily related to the capitalization of commission expense under ASU 2014-09, and are currently in the process of quantifying such impacts.

In ~~February 2016, the FASB issued ASU No. 2016-02,~~ ~~Leases~~ ~~(“ASC 842”),~~ which sets out the principles for the recognition, measurement, presentation and disclosure of leases for both parties to a contract (i.e. lessees and lessors). The new standard requires lessees to apply a dual approach, classifying leases as either finance or operating leases based on the principle of whether or not the lease is effectively a financed purchase by the lessee. This classification will determine whether lease expense is recognized based on an effective interest method or on a straight line basis over the term of the lease, respectively. A lessee is also required to record a right-of-use asset and a lease liability for all leases with a term of greater than 12 months regardless of their classification. Leases with a term of 12 months or less will be accounted for similar to existing guidance for operating leases today. The provisions of this guidance are effective for annual periods beginning after December 31, 2018, and for interim periods therein. The Company is currently evaluating this guidance to determine the impact it will have on our financial statements by reviewing its existing operating lease contracts, where we are utilizing our costs incurred as the ~~lessee and service contracts that may include embedded leases. The Company expects a gross-up~~measure of ~~its~~progress of satisfying our performance obligation, contract assets are reported within accounts receivable, net on our Consolidated Balance ~~Sheets as a result~~Sheet. When the contract price is invoiced, the related unbilled receivable is reclassified to trade accounts receivable, where the balance will be settled upon the collection of ~~recognizing lease~~the invoiced amount. Contract liabilities ~~and right~~are generally comprised of upfront fees charged to the customer for the cost of establishing the necessary components of the Company’s network prior to the commencement of use ~~assets,~~by the ~~extent~~customer. Fees charged to customers for the recurring use of the ~~impact~~Company’s network are recognized during the related periods of ~~a gross-up is under evaluation. The Company does not anticipate material changes to~~service. Upfront fees that are billed in advance of providing services are deferred until such time the ~~recognition of operating lease expense in its Consolidated Statements of Income.~~customer accepts the Company’s

On January 31, 2017, we completed the previously announced acquisition of NMS. The Company accounted for the acquisition of NMS as an asset purchase. At close, NMS owned and operated 366 wireless communications towers in Latin America with an additional 105 build to suit tower sites under development. The NMS portfolio spans three Latin American countries with 212 towers in Mexico, 54 towers in Nicaragua, and 100 towers in Colombia. The consideration for the 366 wireless towers in operation as of the transaction close date was $62.6 million, which was funded through cash on hand, and is presented in NMS asset acquisition on the Condensed Consolidated Statements of Cash Flows. NMS conducts its operations through three non-U.S. subsidiaries and the Company has determined that the functional currencies for the Mexican, Nicaraguan and Colombian subsidiaries are the Mexican Peso, US Dollar and Colombian Peso, respectively. The non-U.S. subsidiaries in which NMS conducts its operations are subject to income tax in the jurisdictions in which they operate. The acquisition did not result in a step up in tax basis under local law. The Company recorded a net deferred tax liability of $18.4 million and a liability for unrecognized tax benefits of $5.3 million in connection with the acquisition. The deferred tax liability is primarily related to the excess of the recorded amounts for Property, Plant

~~& Equipment~~network and ~~Intangibles~~then are recognized as service revenues ratably over ~~their respective historical tax bases. Under~~a period in which substantive services required under the ~~terms~~revenue arrangement are expected to be performed, which is the initial term of the ~~purchase agreement,~~arrangement. During the three months ended March 31, 2021, we ~~will acquire~~recognized revenues of $5.1million, which was included in the ~~towers under development when construction is completed. The NMS towers are reflected in our Towers segment.~~ ~~See Note 12~~. December 31, 2020 contract liabilities balance.

The following ~~is a summary of the estimated fair values of the~~table provides information about contract assets ~~acquired~~ and contract liabilities ~~assumed:~~accounted for under Topic 606.

Performance obligations within contracts to stand ready to provide services are typically satisfied over time or as those services are provided. Contract liabilities primarily relate to deferred revenue from upfront customer payments. The deferred revenue is recognized, and the ~~$52.4~~ liability reduced, over the contract term as the Company completes the performance obligation. As of March 31, 2021, our future revenues (i.e., transaction price related to remaining performance obligations) under contract accounted for under Topic 606 totaled $461.7million, of ~~acquired intangible assets, $37.4~~which $396.4 million ~~was assigned~~is related to ~~tenant~~ contracts ~~(22~~that are currently being invoiced and have an average remaining contract term of 1.8 years, while $65.3 million represents our backlog for sales bookings which have yet to be installed and have an average remaining contract term of6.6 years.

We do not disclose the value of unsatisfied performance obligations for contracts that have an original expected duration of one year ~~life)~~or less.

We exclude from the transaction price any amounts collected from customers for sales taxes and therefore, such amounts are not included in revenue.

We lease communications towers, ground, colocation, and dark fiber to tenants under operating leases. Our leases have initial lease terms ranging from less than one year to 35 years, most of which include options to extend or renew the leases for less than one year to 20 years (based on the satisfaction of certain conditions as defined in the lease agreements), ~~$13.5 million was assigned~~and some of which may include options to ~~network (22 year life)~~ terminate the leases within one to six months. Certain lease agreements contain provisions for future rent increases. Payments due under the lease contracts include fixed payments plus, for some of our leases, variable payments.

The components of lease income for the three months ended March 31, 2021 and ~~$1.5 million was assigned to acquired above-market leases (10 year life). The acquired below-market lease intangible liability of $3.4 million has a 10 year life.~~ ~~See Note 7~~.2020, respectively, are as follows:

~~As of~~ September 30, 2017, construction was completed on 43 of the 105 towers that were under development at the time of the NMS acquisition, and we acquired the completed towers pursuant to the purchase agreement for approximately $4.1 million.

On July 3, 2017, we acquired 100% of the outstanding equity of Southern Light for $638 million in cash and 2.5 million common units in the Operating Partnership with an acquisition date fair value of $64.3 million. Southern Light is a leading provider of data transport services along the Gulf Coast region serving twelve attractive Tier II and Tier III markets across Florida, Alabama, Louisiana, and Mississippi. The acquisition was recorded by allocating the costs of the assets acquired based on their estimated fair values at the acquisition date. The excess of the cost of the acquisition over the fair value of the assets acquired is recorded as goodwill within our Fiber Infrastructure segment. ~~See Note 12. The following is a summary of the estimated fair values of the assets acquired and liabilities assumed:~~

The above purchase price allocation is considered preliminary and is subject to revision when the valuation of assets and liabilities is finalized upon receipt of the final valuation report from a third party valuation expert, and resolution of contractual adjustments, such as working capital adjustments, set forth in the merger agreement, which is anticipated to be finalized during the first half of 2018.

The goodwill arising from the transaction is primarily attributable to the expansion of our fiber network through the complementary nature of Southern Light’s fiber network to our existing fiber network, including anticipated incremental sales and cost savings. A portion of t~~he goodwill is expected~~

Lease payments to be ~~deductible~~received under non-cancellable operating leases where we are the lessor for ~~tax purposes.~~the remainder of the lease terms as of March 31, 2021 are as follows:

~~We acquired an intangible asset that was assigned to customer relationships of $160.1 million (15 year life).~~

The ~~acquired business contributed revenue of $22.4 million and an~~underlying assets under operating ~~income of $1.9 million, which excludes transaction and transition costs, to our consolidated results from~~leases where we are the ~~date of acquisition through September 30, 2017. We recorded transaction related costs related to~~lessor are summarized as follows:

Depreciation expense for the ~~acquisition of Southern Light~~underlying assets under operating leases where we are the lessor for the three ~~and nine~~ months ended ~~September~~March 31, 2021 and 2020, respectively, is summarized as follows:

We have commitments under operating leases for communications towers, ground, colocation, dark fiber lease arrangements, and buildings. We also have finance leases for dark fiber lease arrangements and other communications equipment. Our leases have initial lease terms ranging from less than one year to 30 ~~2017~~years, most of ~~$2.1 million~~which include options to extend or renew the leases for less than one year to 20 years, and ~~$14.5 million, respectively,~~some of which may include options to terminate the leases within ~~transaction related costs on~~one to six months. Certain lease agreements contain provisions for future rent increases. Payments due under the ~~Consolidated Statement of Income.~~

The acquisition of Southern Light was structured in a manner such that Southern Light ended up being owned by a subsidiary of ours with a pre-existing valuation allowance primarily related to deferred tax assets associated with net operating loss carryforwards. The acquisition of Southern Light also resulted in a change to our assessment of the needlease contracts include fixed payments plus, for a valuation allowance against these deferred tax assets, which resulted in a decrease to the valuation allowance of $8.0 million. The decrease in valuation allowance was recorded as an income tax benefit for the quarter ended September 30, 2017.

On July 3, 2017, we acquired 100% of the outstanding equity of Hunt for $130.2 million in cash and 1.6 million common units in the Operating Partnership with an acquisition date fair value of $41.6 million. Additional contingent consideration of up to $17 million, with an acquisition date fair value of $16.4 million, may be paid upon the achievement of certain financial revenue milestones by delivering sharessome of our ~~common stock.~~ ~~See Note 4~~. ~~Hunt is a leading provider~~leases, variable payments.

As of ~~data transport~~March 31, 2021, we have short term lease commitments amounting to K-12 schools and government agencies with a dense fiber network in Louisiana. The acquisition was recorded by allocating the costs of the assets acquired based on their estimated fair values at the acquisition date. The excess of the cost of the acquisition over the fair value of the assets acquired is recorded as goodwill within our Fiber Infrastructure segment. ~~See Note 12~~approximately $2.6 million.

The ~~above purchase price allocation is considered preliminary and is subject to revision when the valuation~~components of ~~assets and liabilities is finalized upon receipt of the final valuation report from a third party valuation expert, which is anticipated to be finalized during the first half of 2018.~~

The goodwill arising from the transaction is primarily attributable to the expansion of our fiber network through the complementary nature of Hunt’s fiber network to our existing fiber network, including anticipated incremental sales andlease cost ~~savings.~~ ~~The goodwill is not expected to be deductible for tax purposes.~~

~~We acquired an intangible asset that was assigned to customer relationships of $73 million (18 year life).~~

The acquired business contributed revenue of $7.9 million and an operating income of $1.4 million, which excludes transaction and transition costs, to our consolidated results from the date of acquisition through September 30, 2017. We recorded transaction related costs related to the acquisition of Hunt for the three ~~and nine~~ months ended ~~September 30, 2017 of $2.0 million~~March 31, 2021 and ~~$5.7 million,~~2020, respectively, ~~within transaction related costs on the Consolidated Statement of Income.~~are as follows:

Amounts reported in the ~~unaudited pro forma summary of our financial results~~Condensed Consolidated Balance Sheets for leases where we are the lessee were as if the Southern Light and Hunt business combinations had occurred on January 1, 2016. The pro forma results include additional depreciation and amortization resulting from purchase accounting adjustments, adjustments to amortized deferred revenue, and interest expense associated with debt used to fund the acquisition. The pro forma results do not include any synergies or other benefits of the acquisition. The pro forma results are not indicative of future results of operations, or results that might have been achieved had the acquisition been consummated on January 1, 2016.follows:

~~On August~~Other information related to leases as of March 31, ~~2016, we~~ ~~acquired 100% of the outstanding equity of Tower Cloud, Inc. (“Tower Cloud”) for $187.5 million in cash~~2021 and 1.9 million shares of our common stock with an acquisition date fair value of $58.5 million. Additional contingent consideration of up to $130 million, with an acquisition date fair value of $98.6 million, may be paid upon the achievement of certain defined operational and financial milestones. ~~See Note 4~~. At the Company’s discretion, a combination of cash and shares of our common stock may be used to satisfy the contingent consideration payments, provided that at least 50% of the aggregate amount of payments is satisfied in cash. Tower Cloud provides data transport services, with particular focus on providing infrastructure solutions to the wireless and enterprise sectors, including fiber-to-the-tower backhaul, small cell networks, and dark fiber deployments. The acquisition was recorded by allocating the costs of the assets acquired based on their estimated fair values at the acquisition date. The excess of the cost of the acquisition over the fair value of the assets acquired is recorded2020, respectively, are as ~~goodwill within our Fiber Infrastructure segment.~~ ~~See Note 12. During the first quarter of 2017, certain contractual working capital adjustments resulted in a $0.2 million reduction of the purchase price and goodwill.~~ ~~See Note 7. The following is a summary of the estimated fair values of the assets acquired and liabilities assumed:~~follows:

On May 2, 2016, we acquired 100% of the outstanding equity of PEG Bandwidth for $322.5 million in cash, the issuance of 87,500 shares of our 3.00% Series A Convertible Preferred Stock with a fair value of $78.6 million and 1 million shares of our common stock with an acquisition date fair value of $23.2 million. PEG Bandwidth is a leading provider of infrastructure solutions, including cell site backhaul and dark fiber, to the telecommunications industry. The acquisition was recorded by allocating the costs of the assets

Future lease payments under non-cancellable leases as of March 31, 2021 are as follows:

In October 2020, the ~~acquisition date. The excess~~Company entered into an OpCo-PropCo transaction with Everstream Solutions LLC (“Everstream”). As part of the ~~cost~~transaction, Uniti will enter into two 20-year IRU lease agreements with Everstream on Uniti owned fiber. Concurrently, Uniti has agreed to sell its Uniti Fiber Northeast operations and certain dark fiber IRU contracts acquired as part of the ~~acquisition~~Windstream settlement to Everstream. Total cash consideration, including upfront IRU payments, is approximately $135 million. In addition to the upfront proceeds, Uniti will receive fees of approximately $3 million annually from Everstream over the ~~fair value~~initial 20-year term of the IRU lease agreements, subject to an annual escalator of 2%. The transaction is subject to regulatory approval and other customary closing conditions and is expected to close in the second quarter of 2021.

The following table presents the assets ~~acquired is recorded~~and liabilities associated with the Opco-Propco transaction with Everstream classified as ~~goodwill within our~~held for sale as of March 31, 2021 and December 31, 2020:

As of March 31, 2021, the Company had an aggregate investment of $65.5 million in its equity method unconsolidated entities, which included a 42% interest in BB Fiber Holdings LLC (“Fiber Holdings”) and a 8% interest in Harmoni Towers LP (“Harmoni”).

Fiber Holdings was primarily established to develop fiber networks as real estate property for long-term investment. On July 1, 2020, the Company completed the sale of an ownership stake in the entity that controls the Company’s Midwest fiber network assets (the “Propco”). Fiber Holdings has a 47.5% ownership in the Propco that is under a long-term, triple net lease with our joint venture partner. Our ownership interest in Fiber Holdings represents approximately a 20% economic interest in the Propco. The ~~following~~Company’s current investment and maximum exposure to loss as a result of its involvement with Fiber Holdings was approximately $40.8 million as of March 31, 2021. The Company has not provided financial support to Fiber Holdings.

Harmoni was primarily established to develop wireless communication towers as real estate property for long-term investment. We concluded that Harmoni is a ~~summary~~VIE; however, the Company determined that it was not the primary beneficiary of Harmoni because the ~~estimated fair values~~Company lacks the power to direct the activities that most significantly impact its economic performance. The Company’s current investment and maximum exposure to loss as a result of ~~the assets acquired and liabilities assumed:~~its involvement with Harmoni was approximately $24.6 million as of March 31, 2021. The Company has not provided financial support to Harmoni.

We provide transition services to Harmoni in exchange for fees and reimbursements. Total transition service fees earned in connection with Harmoni for the three months ended March 31, 2021 were $0.1 million, which is included in operating expense on a net basis in our Consolidated Statements of Income (Loss).

FASB ASC 820, Fair Value Measurements, establishes a hierarchy of valuation techniques based on the observability of inputs utilized in measuring assets and liabilities at fair values. This hierarchy establishes market-based or observable inputs as the preferred source of values, followed by valuation models using management assumptions in the absence of market inputs. The three levels of the hierarchy are as follows:

Level 1 – Quoted prices (unadjusted) in active markets for identical assets or liabilities that the reporting entity can access at the assessment ~~date~~date;

Level 2 – Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or ~~indirectly~~indirectly; and

Our financial instruments consist of cash and cash equivalents, accounts and other receivables, a derivative asset and liability, our outstanding notes and other debt, contingent consideration and accounts, interest and dividends payable.

The following table summarizes the fair value of our financial instruments at ~~September 30, 2017~~March 31, 2021 and December 31, ~~2016:~~2020:

The carrying value of cash and cash equivalents, accounts and other receivables, and accounts, interest and dividends payable approximate fair values due to the short-term nature of these financial instruments.

The total principal balance of our outstanding notes and other debt was ~~$4.5~~$5.07 billion at ~~September 30, 2017,~~March 31, 2021, with a fair value of ~~$4.1~~$5.32 billion. The estimated fair value of our outstanding notes and other debt was based on available external pricing data and current market rates for similar debt instruments, among other factors, which are classified as Level 2 inputs within the fair value hierarchy. Derivative assets and liabilities are carried at fair value. See Note 69. The fair value of an interest rate swap is determined based on the present value of expected future cash flows using observable, quoted LIBOR swap rates for the full term of the swap and also incorporate credit valuation adjustments to appropriately reflect both Uniti’s own non-performance risk and non-performance risk of the respective counterparties. The Company has determined that the majority of the inputs used to value its derivative assets and liabilities fall within Level 2 of the fair value hierarchy; however, the associated credit valuation adjustments utilized Level 3 inputs, such as estimates of credit spreads, to evaluate the likelihood of default by the Company and its counterparties. As of ~~September 30, 2017,~~March 31, 2021, the Company has assessed the significance of the impact of the credit valuation adjustments on the overall valuation of its derivative positions and has determined that the credit valuation adjustment is not significant to the overall value of the derivatives. As such, the Company classifies its derivative assets and liabilities valuation in Level 2 of the fair value ~~hierarchy.~~hierarchy.

~~As part~~Given the limited trade activity of the ~~acquisition of Hunt on July 3, 2017, we may be obligated to pay contingent consideration (the “Hunt Contingent Consideration”) upon~~Exchangeable Notes, the ~~achievement of certain defined revenue milestones; therefore, we have recorded the estimated~~ fair value of ~~contingent consideration~~the Exchangeable Notes (see Note 11) is determined based on inputs that are observable in the market and have been classified as Level 2 in the fair value hierarchy. Specifically, we estimated the fair value of ~~approximately $9.5~~the Exchangeable Notes based on readily available external pricing information, quoted market prices, and current market rates for similar convertible debt instruments.

Uniti is required to make a $490.1 million cash payment to Windstream in equal installments over 20 consecutive quarters beginning the first month after Windstream’s emergence (the “Settlement Payable”) (see Note 14). The Settlement Payable was initially recorded at fair value, using the present value of expected future cash flows, and is being amortized using the effective interest method and is classified as ~~of September 30, 2017.~~ ~~See Note 3. In accordance with~~Level 2 inputs within the ~~Hunt merger agreement, Uniti common shares will be used to satisfy the contingent consideration payment.~~fair value hierarchy. The fair value of the ~~Hunt Contingent Consideration at September 30, 2017 was determined using the closing price of our common shares in the active market and probability estimates of future earnings~~Settlement Payable is $398.9 million and is ~~classified~~reported as ~~Level 3.~~settlement payable on our Condensed Consolidated Balance Sheet at March 31, 2021.

We acquired Tower Cloud, Inc. (“Tower Cloud”) on August 31, 2016. As part of the ~~acquisition of~~ Tower Cloud ~~on August 31, 2016,~~acquisition, we ~~may be~~were obligated to pay contingent consideration upon achievement of certain defined operational and financial ~~milestones; therefore, we recorded~~milestones from the ~~estimated fair value~~date of future contingent consideration of $94.6 million as of September 30, 2017. The fair value of the contingent consideration as of September 30, 2017, was determined using a discounted cash flow model and probability adjusted estimates of the future earnings and is classified as Level 3.acquisition through December 31, 2021. During the three ~~and nine~~ months ended ~~September 30, 2017,~~March 31, 2021, the Company paid $3.0 million for the achievement of the final remaining milestone in accordance with the Tower Cloud merger agreement. During the three months ended March 31, 2020, we paid ~~$1.2~~$7.1 million ~~and $20.0 million, respectively,~~ for the achievement of certain milestones in accordance with the Tower Cloud merger agreement.

Changes in the fair value of contingent consideration arrangements are recorded in our Condensed Consolidated ~~Statement~~Statements of Income (Loss) in the period in which the change occurs. For the three months ended ~~September 30, 2017,~~March 31, 2021 and 2020, there was less than a ~~$3.9~~$0.1 million decrease in the fair value of the contingent consideration that was recorded in Other (income) expense on the Condensed Consolidated Statements of Income. For the nine months ended September 30, 2017, there was a $9.1and $1.5 million, respectively, increase in the fair value of the contingent consideration that was recorded in Other (income) expense on the Condensed Consolidated Statements of ~~Income.~~Income (Loss).

The following is a roll forward of our liabilities measured at fair value on a recurring basis using unobservable inputs (Level 3):

⁽¹⁾ ~~See our Annual Report for property, plant and equipment accounting policies.~~

Depreciation expense for the three ~~and nine~~ months ended ~~September 30, 2017~~ March 31, 2021 and 2020 was ~~$107.1~~$66.2 million and ~~$305.8~~$77.8 million, respectively. ~~Depreciation expense for the three and nine months ended September 30, 2016 was $95.0 million and $271.7 million, respectively.~~

The Company uses derivative instruments to mitigate the effects of interest rate volatility inherent in our variable rate debt, which could unfavorably impact our future earnings and forecasted cash flows. The Company does not use derivative instruments for speculative or trading purposes.

On April 27, 2015, we entered into fixed for floating interest rate swap agreements to mitigate the interest rate risk inherent in our variable rate ~~Senior Secured Term Loan~~senior secured term loan B facility. These interest rate swaps ~~are~~were designated as cash flow hedges and have a notional value of ~~$2.12~~$2.02 billion and mature on October 24, 2022. ~~The weighted average fixed~~ As result of the repayment of the Company’s senior secured term loan B facility in February 2020, the Company entered into receive-fixed interest rate ~~paid is 2.105%, and~~swaps to offset its existing pay-fixed interest rate swaps. As a result, the ~~variable~~Company discontinued hedge accounting as the hedge accounting requirements were no longer met. Amounts in accumulated other comprehensive (loss) income as of the date of de-designation, will be reclassified to interest expense as the hedged transactions impact earnings. Prospectively, changes in fair value of all interest rate ~~received resets monthly~~swaps will be recorded directly to earnings.

Notes to the ~~one-month LIBOR~~Condensed Consolidated Financial Statements – Continued

The Company has elected to offset derivative positions that are subject to ~~a minimum rate of 1.0%. The Company does not currently have any~~ master netting arrangements ~~related~~with the same counterparty in our Condensed Consolidated Balance Sheets. The following tables present the gross amounts of our derivative instruments subject to ~~its derivative contracts.~~master netting arrangements with the same counterparty as of March 31, 2021 and December 31, 2020:

The following table summarizes the fair value and the presentation in our Condensed Consolidated Balance ~~Sheet:~~Sheets:

As of ~~September 30, 2017 and December~~March 31, ~~2016,~~2021, all of the interest rate swaps were valued in net unrealized loss positions and recognized as liability balances within the derivative liability, ~~balance.~~ ~~For~~net in our Condensed Consolidated Balance Sheets. As hedge accounting is no longer applied beginning in February 2020, the ~~three and nine months ended September 30, 2017, the~~unrealized loss amounts are now being recorded directly to earnings. The amount ~~recorded in~~reclassified out of other comprehensive income ~~related~~into interest expense on our Condensed Consolidated Statements of Loss for the three months ended March 31, 2021 and 2020 was $2.8 million and $1.7 million, respectively.

During the next twelve months, beginning April 1, 2021, we estimate that $11.3 million will be reclassified as an increase to interest expense.

On June 25, 2019, concurrently with the pricing of the Exchangeable Notes (see Note 11), and on June 27, 2019, concurrently with the exercise by the initial purchasers involved in the offering of the Exchangeable Notes (the “Initial Purchasers”) of their option to purchase additional Exchangeable Notes, Uniti Fiber, the issuer of the Exchangeable Notes, entered into exchangeable note hedge transactions with respect to the ~~unrealized loss on derivative instruments was $2.9 million and~~Company’s common stock (the “Note Hedge Transactions”) with certain of the Initial Purchasers or their respective affiliates (collectively, the “Counterparties”) of the Counterparties. The Note Hedge Transactions cover, subject to

~~$20.6 million, respectively.~~anti-dilution adjustments substantially similar to those applicable to the Exchangeable Notes, the same number of shares of the Company’s common stock that initially underlie the Exchangeable Notes in the aggregate and are exercisable upon exchange of the Exchangeable Notes. The Note Hedge Transactions have an initial strike price that corresponds to the initial exchange price of the Exchangeable Notes, subject to anti-dilution adjustments substantially similar to those applicable to the Exchangeable Notes. The Note Hedge Transactions will expire upon the maturity of the Exchangeable Notes, if not earlier exercised. The Note Hedge Transactions are intended to reduce potential dilution to the Company’s common stock upon any exchange of the Exchangeable Notes and/or offset any cash payments Uniti Fiber is required to make in excess of the principal amount ~~reclassified out~~ of ~~other comprehensive income~~exchanged Exchangeable Notes, as the case may be, in the event that the market value per share of the Company’s common stock, as measured under the Note Hedge Transactions, at the time of exercise is greater than the strike price of the Note Hedge Transactions.

The Note Hedge Transactions are separate transactions, entered into ~~interest expense~~by Uniti Fiber with the Counterparties, and are not part of the terms of the Exchangeable Notes. Holders of the Exchangeable Notes will not have any rights with respect to the Note Hedge Transactions. The Note Hedge Transactions meet certain accounting criteria under GAAP, are recorded in additional paid-in capital on our Condensed Consolidated ~~Statement~~Balance Sheets and are not accounted for as derivatives that are remeasured each reporting period.

On June 25, 2019, concurrently with the pricing of ~~Income for~~ the ~~three~~Exchangeable Notes, and ~~nine months ended~~on June 27, 2019 concurrently with the exercise by the Initial Purchasers of their option to purchase additional Exchangeable Notes, the Company entered into warrant transactions to sell to the Counterparties Warrants to acquire, subject to anti-dilution adjustments, up to approximately 27.8 million shares of the Company’s common stock in the aggregate at an exercise price of approximately $16.42 per share. The maximum number of shares of the Company’s common stock that could be issued pursuant to the Warrants is approximately 55.5 million. The Company offered and sold the Warrants in reliance on the exemption from registration provided by Section 4(a)(2) of the Securities Act of 1933, as amended (the “Securities Act”). If the market value per share of the Company’s common stock, as measured under the Warrants, at the time of exercise exceeds the strike price of the Warrants, the Warrants will have a dilutive effect on the Company’s common stock unless, subject to the terms of the Warrants, the Company elects to cash settle the Warrants. The Warrants will expire over a period beginning in September ~~30, 2017 was $4.7 million~~2024.

The Warrants are separate transactions, entered into by the Company with the Counterparties, and ~~$16.3 million, respectively. For~~are not part of the ~~three and nine months ended September 30, 2016,~~terms of the ~~amount~~Exchangeable Notes. Holders of the Exchangeable Notes will not have any rights with respect to the Warrants. The Warrants meet certain accounting criteria under GAAP, are recorded in other comprehensive income related to the unrealized loss on derivative instruments was $7.8 million and $81.2 million, respectively. The amount reclassified out of other comprehensive income into interest expenseadditional paid-in capital on our Condensed Consolidated ~~Statement of Income~~Balance Sheets and are not accounted for ~~the three and nine months ended September 30, 2016 was $6.0 million and $17.8 million, respectively.~~ For the three and nine months ended September 30, 2017, there was no ineffective portion of the change in fair value derivatives. For the three and nine months ended September 30, 2016, there was no ineffective portion of the change in fair value derivatives.

~~Amounts reported in accumulated other comprehensive income (loss) related to~~as derivatives ~~will be reclassified to interest expense as interest payments~~that are ~~made on our variable-rate debt. During the next twelve months, beginning October 1, 2017, we estimate that $21.7 million will be reclassified as an increase to interest expense.~~remeasured each reporting period.

~~Changes~~There were 0 changes in the carrying amount of goodwill occurring during the ~~nine~~three months ended ~~September 30, 2017, are~~March 31, 2021. The balance of Goodwill recorded in our Fiber Infrastructure segment as ~~follows:~~

~~The carrying value~~ of ~~the intangible assets~~March 31, 2021 and December 31, 2020 is as follows:

As of March 31, 2021, the ~~three~~remaining weighted average amortization period of the Company’s intangible assets and ~~nine months ended September 30, 2017~~liabilities was ~~$6.3 million~~15.5 years and ~~$11.6 million,~~18.6 years, respectively. Amortization expense for the three ~~and nine~~ months ended ~~September 30, 2016 was $1.7~~March 31, 2021 and 2020 was $4.8 million and ~~$3.7~~$8.3 million, respectively.

Amortization expense is estimated to be ~~$18.3~~$19.1 million for the full year of ~~2017, $25.1~~2021, $19.1 million in ~~2018, $24.5~~2022, $19.1 million in ~~2019, $24.0~~2023, $19.0 million in ~~2020,~~2024, and ~~$23.5~~$19.0 million ~~in 2021.~~for 2025.

All debt, including the senior secured credit facility and notes described below, are obligations of the Operating Partnership ~~and~~and/or certain of its subsidiaries as discussed below. The Company is, however, a guarantor of such debt.

Notes and other debt at ~~September 30, 2017~~March 31, 2021 and December 31, ~~2016~~2020 consisted of the following:

At ~~September 30, 2017,~~March 31, 2021, notes and other debt included the following: (i) ~~$2.1 billion~~$160.0 million under the ~~senior secured term loan B facility that matures on October 24, 2022 (“Term Loan Facility”)~~Revolving Credit Facility (as defined below) pursuant to the credit agreement by and among ~~the Operating Partnership,~~Uniti Group LP, Uniti Group Finance 2019 Inc. and CSL Capital, LLC ~~and Uniti Group Finance Inc.~~(the “Borrowers”), the guarantors and lenders party thereto and Bank of America, N.A., as administrative agent and collateral agent (the “Credit Agreement”); (ii) $2.25 billion aggregate principal amount of 7.875% senior secured notes due 2025 (the “2025 Secured Notes”); (iii) $550.0 million aggregate principal amount of 6.00% Senior Secured Notes due April 15, 2023 (the ~~“Secured~~“2023 Secured Notes”); ~~(iii) $1.11 billion~~(iv) $58.8 million aggregate principal amount of 8.25% Senior Unsecured Notes due October 15, 2023 (the “2023 Notes”); ~~(iv) $600~~(v) $600.0 million aggregate principal amount of 7.125% Senior Unsecured Notes due December 15, 2024 (the “2024 Notes”); (v) $1.11 billion aggregate principal amount of 6.50% Senior Notes” due February 15, 2029 (the “2029 Notes”); and ~~together~~(vi) $345.0 million aggregate principal amount of 4.00% Exchangeable Senior Notes due June 15, 2024 (the “Exchangeable Notes” and, collectively with the 2025 Secured Notes, ~~and~~2023 Secured Notes, 2023 Notes, 2024 Notes and 2029 Notes, the ~~“Notes”), and (v) $160 million under~~Notes). Until our net leverage ratio is below 5.75 : 1.00, our 2025 Secured Notes limit our ability to make cash distributions to our shareholders in amounts exceeding 90% of our good faith estimate, as of the ~~senior secured revolving credit facility, variable rate, that matures April 24, 2020 pursuant~~date on which the first quarterly dividend for the relevant year is declared, of our REIT taxable income for such year, determined without regard to the ~~Credit Agreement (the “Revolving Credit Facility”~~dividends paid deduction and ~~together~~excluding any capital gains. Except as disclosed below with respect to the ~~Term Loan Facility, the “Facilities”).~~

On May 9, 2017, the Company completed its previously announced reorganization (the “up-REIT Reorganization”) to operate through a customary “up-REIT” structure. Under this structure, the Operating Partnership now holds substantially all of the Company’s assets and is the parent company of, among others, CSL Capital, LLC, Uniti ~~Group~~ ~~Finance Inc. and Uniti Fiber Holdings Inc. In connection with the up-REIT Reorganization, the Operating Partnership replaced the Company and assumed its obligations as an obligor under the~~2029 Notes and ~~Facilities. The Company subsequently became a guarantor~~the 2028 Secured Notes (as defined below), the terms of the Notes are as described in the Company’s Annual Report.

On February 2, 2021, the Borrowers, as co-issuers, issued $1.11 billion aggregate principal of the 2029 Notes and ~~Facilities. Because~~used the ~~Operating~~net proceeds to fund the tender offer of substantially all outstanding 2023 Notes, of which $58.8 million remained outstanding as of March 31, 2021. On April 15, 2021, the Borrowers redeemed the remaining outstanding principal amount of the 2023 Notes.During the three months ended March 31, 2021, we recognized a $38.0 million loss on the tendered 2023 Notes within interest expense, net on the Condensed Consolidated States of Income (loss), which included $20.4 million of non-cash interest expense for the write off of the unamortized discount and deferred financing costs and $17.6 million of cash interest expense for the tender premium. The remaining unamortized discount and deferred financing costs of $1.1 million will be written off during April 2021.

The 2029 Notes were issued at an issue price of 100% of their principal amount pursuant to an indenture, dated as of February 2, 2021 (the “2029 Indenture”), among the Borrowers, the guarantors named therein and Deutsche Bank Trust Company Americas, as trustee (the “Trustee”). The 2029 Notes mature on February 15, 2029 and bear interest at a rate of 6.50% per year. Interest on the 2029 Notes is payable on February 15 and August 15 of each year, beginning on August 15, 2021.

~~Partnership is not~~The Borrowers may redeem the 2029 Notes, in whole or in part, at any time prior to February 15, 2024 at a ~~corporation, a corporate co-obligor that is a subsidiary~~redemption price equal to 100% of the ~~Operating Partnership was also added~~principal amount of the 2029 Notes redeemed plus accrued and unpaid interest on the 2029 Notes, if any, to, but not including the redemption date, plus an applicable “make whole” premium described in the 2029 Indenture. Thereafter, the Borrowers may redeem the 2029 Notes in whole or in part, at the redemption prices set forth in the 2029 Indenture. In addition, at any time on or prior to February 15, 2024, up to 40% of the aggregate principal amount of the 2029 Notes may be redeemed with the net cash proceeds of certain equity offerings, at a redemption price of 106.500% of the principal amount, plus accrued and unpaid interest, if any, to, but excluding, the redemption date; provided that at least 60% of aggregate principal amount of the originally issued 2029 Notes remains outstanding. Further, if certain changes of control of Uniti Group LP occur, holders of the 2029 Notes will have the right to require the Borrowers to offer to repurchase their 2029 Notes at 101% of their principal amount plus accrued and unpaid interest, if any, to, but excluding, the repurchase date.

The 2029 Notes are fully and unconditionally guaranteed, jointly and severally, on a senior unsecured basis by the Company and by each of Uniti Group LP’s existing and future domestic restricted subsidiaries (other than the Borrowers) that guarantees indebtedness under the Company’s senior secured credit facilities. The guarantees are subject to release under specified circumstances, including certain circumstances in which such guarantees may be automatically released without the consent of the holders of the 2029 Notes.

The 2029 Indenture contains customary high yield covenants limiting the ability of Uniti Group LP and its restricted subsidiaries to: incur or guarantee additional indebtedness; incur or guarantee secured indebtedness; pay dividends or distributions on, or redeem or repurchase, capital stock; make certain investments or other restricted payments; sell assets; enter into transactions with affiliates; merge or consolidate or sell all or substantially all of their assets; and create restrictions on the ability of the Borrowers and their restricted subsidiaries to pay dividends or other amounts to the Borrowers. These covenants are subject to a number of limitations, qualifications and exceptions. The 2029 Indenture also contains customary events of default.

On April 20, 2021, the Borrowers issued $570 million aggregate principal amount of 4.750% Senior Secured Notes due 2028 (the “2028 Secured Notes”) and ~~Credit Agreement as part~~will use the net proceeds from the offering to fund the redemption in full of the ~~up-REIT Reorganization. As discussed below, Uniti Group Finance Inc. is~~2023 Secured Notes on May 6, 2021. On April 20, 2021, the ~~corporate co-obligor~~Borrowers deposited amounts sufficient to fund the redemption of the 2023 Secured Notes with the trustee and satisfied and discharged their respective obligations under the ~~Credit Agreement and co-issuer of the Secured Notes and~~indenture governing the 2023 ~~Notes, and Uniti Fiber Holdings Inc. is the co-issuer of the 2024~~Secured Notes. ~~Separate financial statements of the Operating Partnership have not been included since the Operating Partnership is not a registrant.~~See Note 16.

~~The Operating Partnership and its wholly-owned subsidiaries, CSL Capital, LLC, and Uniti Group Finance Inc. (collectively, the “Borrowers”)~~The Borrowers are party to the Credit Agreement, which ~~provides~~after the Seventh Amendment (as defined below) as of March 31, 2021, provided for ~~the Term Loan Facility (in an initial principal amount of $2.14 billion) and the~~a $60.5 million non-extended revolving credit facility that matures on April 24, 2022 (the “Non-Extended Revolving Credit ~~Facility. The term~~Facility”) and a $500 million revolving credit facility extended that will mature on December 10, 2024 (the “Extended Revolving Credit Facility” and together with Non-Extended Revolving Credit facility, the “Revolving Credit Facility”), which provide us with the ability to obtain revolving loans ~~bear interest at a rate equal~~as well as swingline loans and letters of credit from time to ~~LIBOR, subject to a 1.0% floor, plus an applicable margin equal to 3.00%, and are subject to amortization of 1.0% per annum.~~time. All obligations under the Credit Agreement are guaranteed by (i) the Company and (ii) certain of the Operating Partnership’s ~~wholly-owned~~ subsidiaries (the “Subsidiary Guarantors”), and are secured by substantially all of the assets of the Borrowers and the Subsidiary Guarantors, which assets also secure the Secured Notes. The Revolving Credit Facility bears interest at a rate equal to LIBOR plus 1.75% to 2.25% based on our consolidated secured leverage ratio, as defined in the Credit Agreement. On April 28, 2017, we amended the Credit Agreement to increase the commitments under our Revolving Credit Facility from $500 million to $750 million. Other terms of the Revolving Credit Facility remain unchanged.

The Borrowers are subject to customary covenants under the Credit Agreement, including an obligation to maintain a consolidated secured leverage ratio, as defined in the Credit Agreement, not to exceed 5.00 to 1.00. We are permitted, subject to customary conditions, to incur (i) incremental term loan borrowings and/or increased commitments under the Credit Agreement in an unlimited amount, so long as, on a pro forma basis after giving effect to any such borrowings or increases, our consolidated secured leverage ratio, as defined in the Credit Agreement, does not exceed 4.00 to 1.00 and (ii) other indebtedness, so long as, on a pro forma basis after giving effect to any such indebtedness, our consolidated total leverage ratio, as defined in the Credit Agreement, does not exceed 6.50 to 1.00 and, if such debt is secured, our consolidated secured leverage ratio, as defined in the Credit Agreement, does not exceed 4.00 to 1.00. In addition, the Credit Agreement contains customary events of default, including a cross default provision whereby the failure of the Borrowers or certain of their subsidiaries to make payments under other debt obligations, or the occurrence of certain events affecting those other borrowing arrangements, could trigger an obligation to repay any amounts outstanding under the Credit Agreement. In particular, a repayment obligation could be triggered if (i) the Borrowers or certain of their subsidiaries fail to make a payment when due of any principal or interest on any other indebtedness aggregating $75.0 million or more, or (ii) an event occurs that causes, or would permit the holders of any other indebtedness aggregating $75.0 million or more to cause, such indebtedness to become due prior to its stated maturity. As of ~~September 30, 2017,~~March 31, 2021, the Borrowers were in compliance with all of the covenants under the Credit Agreement.

The Borrowers, as co-issuers, have outstanding $550 million aggregate principal amount of the Secured Notes, of which $400 million was originally issued on April 24, 2015 at an issue price of 100% of par value and the remaining $150 million was issued on June 9, 2016 at an issue price of 99.25% of the par value as an add-on to the existing Secured Notes. The Borrowers, as co-issuers, also have outstanding $1.11 billion aggregate principal amount of the 2023 Notes that were originally issued on April 24, 2015 at an issue price of 97.055% of par value. The Secured Notes and the 2023 Notes are guaranteed by the Company and the Subsidiary Guarantors.

~~The Operating Partnership~~ ~~and its wholly-owned~~ ~~subsidiaries, CSL Capital, LLC and Uniti Fiber Holdings Inc., as co-issuers, have outstanding $600 million aggregate principal amount of the 2024 Notes, of which $400 million was originally issued on December 15, 2016 at an issue price of~~ 100% of par value and the remaining $200 million of which was issued on May 8, 2017 at an issue price of 100.50% of par value under a separate indenture and was mandatorily exchanged on August 11, 2017 for 2024 Notes issued as “additional notes” under the indenture governing the 2024 Notes. The 2024 Notes are guaranteed by the Company, Uniti Group Finance Inc. and the Guarantors.

Deferred financing costs were incurred in connection with the issuance of the Notes and the Facilities. These costs are amortized using the effective interest method over the term of the related indebtedness, and are included in interest expense in our Consolidated

A termination of either Windstream Lease would result in an “event of default” under the Credit Agreement if a replacement lease is not entered into within ninety (90) calendar days and we do not maintain pro forma compliance with a consolidated secured leverage ratio, as defined in the Credit Agreement, of 5.00 to 1.00.

On December 10, 2020, we entered into an amendment (the “Seventh Amendment”) to our Credit Agreement. Pursuant to the Seventh Amendment, commitments from new and existing lenders under the Revolving Credit Facility have increased to $500 million and the maturity date of such commitments has been extended to December 10, 2024. Certain non-extending lender commitments of $60.5 million will mature on April 24, 2022 and will continue to bear interest at rates previously in effect. Prior to the expiration of these commitments, the aggregate size of the Revolving Credit Facility will be $560.5 million from all lenders.

Borrowings under (a) the Non-Extended Revolving Credit Facility bear interest at a rate equal to either a base rate plus an applicable margin ranging from 3.75% to 4.25% or a eurodollar rate plus an applicable margin ranging from 4.75% to 5.25% and (b) effective April 17, 2021, following the receipt of certain routine regulatory approvals, the Extended Revolving Credit Facility bear interest at a rate equal to either a base rate plus an applicable margin ranging from 2.75% to 3.50% or a eurodollar rate plus an applicable margin ranging from 3.75% to 4.50%, in each case, calculated in a customary manner and determined based on our consolidated secured leverage ratio. We are required to pay a quarterly commitment fee under the Revolving Credit Facility equal to 0.50% of the average amount of unused commitments during the applicable quarter (subject to a step-down to 0.40% per annum of the average amount of unused commitments during the applicable quarter upon achievement of a consolidated secured leverage ratio not to exceed a certain level), as well as quarterly letter of credit fees equal to the product of (A) the applicable margin with respect to eurodollar borrowings and (B) the average amount available to be drawn under outstanding letters of credit during such quarter.

Deferred financing costs were incurred in connection with the issuance of the Notes and the Revolving Credit Facility. These costs are amortized using the effective interest method over the term of the related indebtedness and are included in interest expense in our Condensed Consolidated Statements of ~~Income.~~ Income (Loss). For the three ~~and nine~~ months ended ~~September 30, 2017,~~March 31, 2021 and 2020, we recognized ~~$2.9~~$4.1 million and ~~$8.0~~$3.0 million, respectively, of non-cash interest expense related to the amortization of deferred financing costs. ~~For the three and nine months ended September 30, 2016, we recognized $2.0 million and $5.6 million, respectively, of non-cash interest expense related to the amortization of deferred financing costs.~~

On April 25, 2017, we issued 19.5 million shares of our common stock, par value $0.0001 per share. The shares were sold at a public offering price of $26.50, generating proceeds of approximately $518 million, before underwriter discounts and transaction costs. The Company used the proceeds from this offering to fund a portion of the cash consideration paid in connection with the acquisitions of Southern Light and Hunt that closed on July 3, 2017.

On ~~April 24, 2015, Uniti was separated and spun-off (the “Spin-Off”) from Windstream Holdings, Inc. (“Windstream Holdings” and together with its subsidiaries, “Windstream”).~~ ~~In connection with the Spin-Off,~~ Windstream contributed certain telecommunications network assets, including fiber and copper networks and other real estate (the “Distribution Systems”) and a small consumer competitive local exchange carrier (“CLEC”) business (the “Consumer CLEC Business”) and ~~we issued approximately 149.8 million shares of our common stock to Windstream Services as partial consideration for the contribution of the Distribution Systems and the Consumer CLEC Business.~~ Immediately following the Spin-Off, we entered into a long-term exclusive triple-net lease (the “Master Lease”) with Windstream pursuant to which Uniti leases the Distribution Systems to Windstream. Windstream distributed approximately 80.4% of the Uniti shares it received to existing stockholders of Windstream Holdings and retained a passive ownership interest of approximately 19.6% of the common stock of Uniti. As a result of this ownership Windstream was deemed to be a related party.

On June 15, 2016, Windstream Holdings disposed of 14.7 million shares of our common stock, representing approximately half of its retained ownership interest. On June 24, 2016, Windstream Holdings disposed of its remaining 14.7 million shares of our common stock as part of a public offering. The Company did not receive any proceeds resulting from the disposition of these shares.

Accordingly, effective as of June 24, 2016, Windstream is no longer deemed a related party under applicable accounting regulations. Our condensed consolidated financial statements reflect the following transactions with Windstream during the periods in which Windstream was deemed a related party.

~~Revenues~~ – The Company records leasing revenue pursuant to the Master Lease. For the three and six months ended June 30, 2016, we recognized leasing revenues of $169.0 million and $337.6 million, respectively, related to the Master Lease.

~~General and Administrative Expenses~~ – We were party to a Transition Services Agreement (“TSA”) pursuant to which Windstream and its affiliates provided, on an interim basis, various services, including but not limited to information technology services, payment processing and collection services, financial and tax services, regulatory compliance and other support services. On April 1, 2016, the TSA terminated and we incurred $19,000 of related TSA expense for the three months ended March 31, 2016.

~~Operating Expenses~~ – We are party to a Wholesale Master Services Agreement (“Wholesale Agreement”) and a Master Services Agreement (the “Master Service Agreement”) with Windstream related to the Consumer CLEC Business. Under the Wholesale Agreement, Windstream provides us transport services (local and long distance telecommunications service), provisioning services (directory assistance, directory listing, service activation and service changes), and repair services (routine and emergency network maintenance, network audits and network security). Under the Master Services Agreement, Windstream provides billing and collections services to Uniti. During the three months ended June 30, 2016, we incurred expenses of $3.2 million and $0.4 million related to the Wholesale Agreement and Master Services Agreement, respectively. During the six months ended June 30, 2016, we incurred expenses of $6.6 million and $0.9 million related to the Wholesale Agreement and Master Services Agreement, respectively.

~~Employee Matters Agreement~~ – We are party to an Employee Matters Agreement (“Employee Matters Agreement”) with Windstream that governs the respective compensation and employee benefit obligations of the Company and Windstream in connection with and following the Spin-Off. Under the Employee Matters Agreement, if requested by a Windstream employee, the Company is required to withhold shares to satisfy the employee’s tax obligations arising from the recognition of income and the vesting of shares related to awards of Uniti restricted stock held by the employee that were granted in connection with the Spin-Off. In that case, the Company

must pay to Windstream an amount of cash equal to the amount required to be withheld to satisfy minimum statutory tax withholding obligations or, at the request of Windstream, remit such cash directly to the applicable taxing authorities. During the six months ended June 30, 2016, we withheld 91,412 common shares to satisfy these minimum statutory tax-withholding obligations and delivered $1.9 million to Windstream for remittance to the applicable taxing authorities.

~~Lease Amendment~~ – During the quarter ended March 31, 2016, we amended the Master Lease with Windstream (the “Master Lease Amendment”) to allow for the transfer of ownership rights or exchanges of indefeasible rights of use (an “IRU”) and other long term rights in certain fiber and associated assets constituting leased property under the Master Lease. We will enter into such transactions pursuant to certain fiber exchange agreements under which we will grant to a third party ownership rights in certain fiber assets or an IRU in certain fiber assets that constitute leased property under the Master Lease in exchange for Uniti receiving ownership rights in certain fiber assets or an IRU in certain fiber assets of the third party, which we will then lease to Windstream as leased property under the Master Lease~~. Under the terms of the Master Lease Amendment, Windstream is responsible for any taxes imposed on Uniti related to the sale, exchange or other disposition of the fiber assets delivered to a~~ third party or the granting of rights to the leased property that arise from fiber exchange agreements. As of June 24, 2016, no such transactions had been consummated. The Master Lease Amendment also permits us to install, own and operate certain wireless communication towers, antennas and related equipment on designated portions of the leased property.

Our time-based restricted stock awards are considered participating securities as they receive non-forfeitable rights to dividends at the same rate as common stock. As participating securities, we included these instruments in the computation of earnings per share under the two-class method described in FASB ASC 260, Earnings per Share (“ASC 260”).

We also have outstanding performance-based restricted stock units that contain forfeitable rights to receive dividends. Therefore, the awards are considered non-participating restrictive shares and are not dilutive under the two-class method until performance conditions are met.

The ~~earnings per share impact~~dilutive effect of the ~~Company’s 3% Convertible Preferred Stock, $0.0001 par value (“Series A Shares”~~Exchangeable Notes (see Note 11)~~, issued~~ is calculated by using the “if-converted” method. This assumes an add-back of interest, net of income taxes, to net income attributable to shareholders as if the securities were converted at the beginning of the reporting period (or at time of issuance, if later) and the resulting common shares included in ~~connection with~~number of weighted average shares. The dilutive effect of the ~~acquisition of PEG Bandwidth, LLC,~~Warrants (see Note 9) is calculated using the ~~net share settlement method, whereby~~treasury-stock method. During the ~~redemption value~~three months ended March 31, 2021 and 2020, the Warrants were excluded from diluted shares outstanding because the exercise price exceeded the average market price of the instrument is assumed to be settled in cash and only the conversion premium, if any, is assumed to be settled in shares. The Series A Shares provide Uniti the option to cash or share settle the instrument, and it is our ~~policy to settle the instrument in cash upon conversion.~~

~~The Hunt merger agreement provides~~common stock for the ~~issuance of additional common shares~~ ~~upon the achievement of certain defined revenue milestones.~~ ~~See Note 3~~. The earnings per share impact of the Hunt Contingent Consideration is calculated under the method described in ASC 260 for the treatment of contingently issuable shares in weighted-average shares outstanding.reporting period.

The following sets forth the computation of basic and diluted earnings per share under the two-class method:

For the ~~nine~~three months ended ~~September 30, 2017, 29,481~~March 31, 2021, 30,052,433 potential common shares related to the Exchangeable Notes and 762,355 non-participating securities were excluded from the computation of ~~diluted~~ earnings per share, as their effect would have been anti-dilutive. For the three months ended ~~September 30, 2016, 149,087~~March 31, 2020, 28,867,703 potential common shares related to the Exchangeable Notes and 747,274 non-participating securities were excluded from the computation of ~~diluted~~ earnings per share, as their effect would have been anti-dilutive.

~~Effective in the first quarter of 2017,~~Historically our management, including our chief executive officer, who is our chief operating decision maker, ~~commenced managing~~managed our operations as ~~four~~the 4 reportable segments, in addition to our corporate operations, ~~and include:~~

~~Notes~~as described below. Due to the ~~Condensed Consolidated Financial Statements – Continued~~sale of our towers business and wind down of the Consumer CLEC business, effective January 1, 2021, we manage our operations focused on our 2 primary businesses, Leasing and Fiber Infrastructure.

Leasing: Represents ~~our REIT operations and includes~~ the results from our leasing ~~programs,~~business, Uniti Leasing, which is engaged in the acquisition of mission-critical communications assets and leasing them back to anchor customers on either an exclusive or shared-tenant basis.

Fiber Infrastructure: Represents the operations of our fiber business, Uniti Fiber, which is a leading provider of infrastructure solutions, including cell site backhaul and dark fiber, to the telecommunications industry.

Towers: Represents the operations of our former towers business, Uniti Towers, through which we ~~acquire~~acquired and ~~construct~~constructed tower and tower-related real estateand leased space on communications towers to wireless service providers and other tenants in the United States and Latin ~~America.~~America. Starting in 2019, the Company completed a series of transactions to largely divest of its towers business:

Consumer CLEC: Represents the operations of Talk America Services (“Talk America”) through which we ~~operate~~operated the Consumer CLEC ~~Business, that~~business, which prior to ~~the Spin-Off~~Uniti’s separation and spin-off from Windstream (the “Spin-Off”) was reported as an integrated operation within Windstream. Talk America ~~provides~~provided local telephone, high-speed internet and ~~long distance~~long-distance services to customers in the eastern and central United States. As of the end of the second quarter of 2020, we substantially completed a wind down of our Consumer CLEC business.

Corporate: Represents our corporate and back office functions. Certain costs and expenses, primarily related to headcount, insurance, professional fees and similar charges, that are directly attributable to operations of our business segments are allocated to the respective segments.

Management evaluates the performance of each segment using Adjusted EBITDA, which is a segment performance measure ~~defined~~we define as net income determined in accordance with GAAP, before interest expense, provision for income taxes, depreciation and amortization, stock-based compensation expense and the impact, which may be recurring in nature, of transaction and integration related ~~expenses,~~costs, costs associated with Windstream’s bankruptcy, costs associated with litigation claims made against us, costs associated with the implementation of our enterprise resource planning system, costs related to the settlement with Windstream, amortization of non-cash rights-of-use, the write off of unamortized deferred financing costs, costs incurred as a result of the early repayment of debt, including early tender premiums and costs associated with the termination of related hedging activities, gains or losses on dispositions, changes in the fair value of contingent consideration and financial instruments, and other similar ~~items.~~or infrequent items (although we may not have had such charges in the periods presented). Adjusted EBITDA includes adjustments to reflect the Company’s share of Adjusted EBITDA from unconsolidated entities. The Company believes that net income, as defined by GAAP, is the most appropriate earnings metric; however, we believe that Adjusted EBITDA serves as a useful supplement to net income because it allows investors, analysts and management to evaluate the performance of our segments in a manner that is comparable period over period. Adjusted EBITDA should not be considered as an alternative to net income as determined in accordance with GAAP.

~~The Company’s business segment information~~Selected financial data related to our segments is presented ~~below. Prior year information has been recast to conform to~~below for the ~~current year presentation.~~three months ended March 31, 2021 and 2020:

	Three Months Ended September 30, 2017															Three Months Ended March 31, 2021
(Thousands)	Leasing		Fiber Infrastructure		Towers			Consumer CLEC		Corporate			Subtotal of Reportable Segments			Leasing		Fiber Infrastructure		Towers		Consumer CLEC		Corporate			Subtotal of Reportable Segments
Revenues	$	171,673	$	66,363	$	2,796		$	4,378	$	-		$	245,210		$	194,936	$	77,650	$	-	$	-	$	-		$	272,586

Adjusted EBITDA	$	171,215	$	28,348	$	(98	)	$	1,025	$	(5,552	)	$	194,938		$	191,497	$	29,721	$	-	$	-	$	(6,970	)	$	214,248
Less:
Interest expense														78,784														140,581
Depreciation and amortization		87,320		24,050		1,326			652		96			113,444			42,226		28,670		-		-		68			70,964
Other income														(3,933	)
Transaction related costs														8,512
Other expense, net																												1,318
Transaction related and other costs																												4,137
Stock-based compensation														1,968														3,335
Income tax benefit														(8,672	)													(2,557	)
Net income													$	4,835

Capital expenditures⁽¹⁾	$	-	$	59,723	$	10,284		$	-	$	7		$	70,014
Adjustments for equity in earnings from unconsolidated entities																												972
Net loss																											$	(4,502	)

⁽¹⁾Segment capital expenditures represents capital expenditures, the NMS asset acquisition and ground lease investments as reported in the investing activities section of the Condensed Consolidated Statements of Cash Flows.

	Three Months Ended September 30, 2016															Three Months Ended March 31, 2020
(Thousands)	Leasing		Fiber Infrastructure		Towers			Consumer CLEC		Corporate			Subtotal of Reportable Segments			Leasing		Fiber Infrastructure		Towers			Consumer CLEC		Corporate			Subtotal of Reportable Segments
Revenues	$	169,366	$	25,219	$	159			5,496	$	-		$	200,240		$	184,352	$	77,407	$	3,720			683	$	-		$	266,162

Adjusted EBITDA	$	169,075	$	9,273	$	(258	)	$	1,213	$	(3,627	)	$	175,676		$	181,879	$	27,541	$	(8	)	$	17	$	(7,715	)	$	201,714
Less:
Interest expense														70,522															178,393
Depreciation and amortization		86,007		9,701		106			814		95			96,723			54,622		30,061		769			594		75			86,121
Other expense														-
Transaction related costs														9,315
Other expense, net																													3,075
Transaction related and other costs																													15,972
Stock-based compensation														1,331															2,995
Income tax expense														128
Income tax benefit																													(4,576	)
Net loss													$	(2,343	)													$	(80,266	)

Capital expenditures⁽¹⁾	$	-	$	6,877	$	2,860		$	-	$	15		$	9,752

⁽¹⁾~~Segment capital expenditures represents capital expenditures and ground lease investments as reported in the investing activities section of the Condensed Consolidated Statements of Cash Flows.~~

~~Total assets by business segment as of September 30, 2017 and December 31, 2016 are as follows:~~

In the ordinary course of our business, we are subject to claims and administrative proceedings, none of which we believe are material or would be expected to have, individually or in the aggregate, a material adverse effect on our business, financial condition, cash flows or results of operations.

Following consummation of our settlement agreement with Windstream, including entry into the Windstream Leases, we are obligated to make $490.1 million of cash payments to Windstream in equal installments over 20 consecutive quarters beginning in October 2020. As of the date of this Quarterly Report on Form 10-Q, the Company made the first three quarterly payments totaling $73.5 million.

Further, we are obligated to reimburse Windstream for up to an aggregate of $1.75 billion for certain growth capital improvements in long-term fiber and related assets made by Windstream (“Growth Capital Improvements”) through 2029. Uniti’s reimbursement commitment for Growth Capital Improvements does not require Uniti to reimburse Windstream for maintenance or repair expenditures (except for costs incurred for fiber replacements to the ~~Separation~~property leased under the competitive local exchange carrier master lease agreement, up to $70 million during the term), and ~~Distribution Agreement entered into with~~each such reimbursement is subject to underwriting standards. Uniti’s total annual reimbursement commitments for the Growth Capital Improvements under both Windstream Leases (and under separate equipment loan facilities) are limited to $225 million per year in 2021 through 2024; $175 million per year in 2025 and 2026; and $125 million per year in 2027 through 2029. If the cost incurred by Windstream (or the successor tenant under a Windstream Lease) for Growth Capital Improvements in any calendar year exceeds the annual limit for such calendar year, Windstream (or such tenant, as the case may be) may submit such excess costs for reimbursement in any subsequent year and such excess costs shall be funded from the annual commitment amounts in such subsequent period. In addition, to the extent that reimbursements for Growth Capital Improvements funded in any calendar year during the term is less than the annual limit for such calendar year, the unfunded amount in any calendar year will carry-over and may be added to the annual limits for subsequent calendar years, subject to an annual limit of $250 million in any calendar year, except that, during calendar year 2021, our combined total obligation to fund Growth Capital Improvements may exceed $250 million to the extent of any unfunded excess amounts from calendar year 2020. Accordingly, because we funded $84.7 million of the $125 million limit in 2020, we are committed to fund up to $265.3 million of Growth Capital Improvements in 2021, of which we funded $42.7 million as of March 31, 2021. Upon reimbursement, the Company reduced the unamortized portion of deferred revenue related to these capital improvements and capitalized the difference between the cash provided to Windstream and the unamortized deferred revenue as a lease incentive. This lease incentive, which is $1.0 million and

reported within other assets on our Consolidated Balance Sheet as of March 31, 2021, will be amortized against revenue over the initial term of the Windstream Leases.

On July 3, 2019, SLF Holdings, LLC (“SLF”) filed a complaint against the Company, Uniti Fiber, and certain current and former officers of the Company (collectively, the “Defendants”) in the United States District Court for the Southern District of Alabama, in connection with Uniti Fiber’s purchase of Southern Light, LLC from SLF in July 2017. The complaint asserted claims for fraud and conspiracy, as well as claims under federal and Alabama securities laws, alleging that Defendants improperly failed to disclose to SLF the Spin-Off, Windstream has agreed to indemnify us (including our subsidiaries, directors, officers, employees and agents and certain other related parties) for any liability arising from or relating to legal proceedings involving Windstream's telecommunications business prior torisk that the Spin-Off and ~~pursuant to~~entry into the Master Lease ~~Windstream has agreed~~violated certain debt covenants of Windstream. On September 26, 2019, the action was transferred to ~~indemnify us~~United States District Court for the District of Delaware. On November 18, 2019, SLF filed an amended complaint, adding allegations that Defendants also failed to fully disclose the risk that the Master Lease purportedly could be recharacterized as a financing instead of a “true lease.” The amended complaint seeks compensatory and punitive damages, as well as reformation of the purchase agreement for the sale. On December 18, 2019, Defendants moved to dismiss the amended complaint in its entirety. That motion was fully briefed as of February 7, 2020, and a hearing on the motion was heard on May 12, 2020. On November 4, 2020, the court granted the Defendants’ motion and dismissed SLF’s amended complaint, in its entirety, with prejudice. On December 1, 2020, SLF filed a notice of appeal to the United States Court of Appeals for the Third Circuit from the district court’s dismissal order. The appeal is scheduled to be fully briefed by July 22, 2021. We have evaluated this matter under the guidance provided by ASC 450-20, Contingencies (“ASC 450”), and as of the date of this Quarterly Report on Form 10-Q, we consider a loss not to be probable and are unable to estimate a reasonably possible range of loss; therefore, we have not recorded any liabilities associated with these claims in our Condensed Consolidated Balance Sheet.

Beginning on October 25, 2019, several purported shareholders filed separate putative class actions in the U.S. District Court for the Eastern District of Arkansas against the Company and certain of our officers, alleging violations of the federal securities laws (the “Shareholder Actions”), based on claims similar to those asserted in the SLF Action. On March 12, 2020, the U.S. District Court for the Eastern District of Arkansas consolidated the Shareholder Actions and appointed lead plaintiffs and lead counsel in the consolidated cases under the caption In re Uniti Group Inc. Securities Litigation. On May 11, 2020, lead plaintiffs filed a consolidated amended complaint in the consolidated Shareholder Actions. The consolidated amended complaint seeks to represent investors who acquired the Company’s securities between April 20, 2015 and February 15, 2019. The Shareholder Actions assert claims under Sections 10(b) and 20(a) of the Exchange Act and Rule 10b-5 promulgated thereunder, alleging that the Company made materially false and misleading statements by allegedly failing to disclose, among other things, ~~any use, misuse, maintenance~~ the risk that the Spin-Off and entry into the Master Lease violated certain debt covenants of Windstream and/or ~~repair by Windstream with respect~~the risk that the Master Lease purportedly could be recharacterized as a financing instead of a “true lease.” The Shareholder Actions seek class certification, unspecified monetary damages, costs and attorneys’ fees and other relief. On July 10, 2020, defendants moved to dismiss the consolidated amended complaint. On April 1, 2021, the court issued an order denying Defendants’ motion to dismiss. On April 15, 2021, Defendants filed a motion for reconsideration of the order or, in the alternative, for certification of an appeal of the decision to the ~~Distribution Systems. Windstream~~Eighth Circuit. Plaintiffs formally opposed this motion on April 29, 2021. We intend to defend this matter vigorously, and, because it is ~~currently~~still in its preliminary stages, we have not yet determined what effect this lawsuit will have, if any, on our financial position or results of operations. We have evaluated this matter under the guidance provided by ASC 450, and as of the date of this Quarterly Report on Form 10-Q, we consider a ~~party~~loss not to be probable and are unable to estimate a reasonably possible range of loss; therefore, we have not recorded any liabilities associated with these claims in our Condensed Consolidated Balance Sheet.

We maintain insurance policies that would provide coverage to various degrees for potential liabilities arising from legal ~~actions and administrative~~ proceedings ~~including various claims arising in the ordinary course of its telecommunications business, which are subject to the indemnities provided by Windstream to us.~~described above.

Under ~~the~~the terms of the ~~Tax Matters Agreement~~tax matters agreement entered into ~~with~~on April 24, 2015 by the Company, Windstream Services, LLC and Windstream (the “Tax Matters Agreement”), in connection with the Spin-Off, we are generally responsible for any taxes imposed on Windstream that arise from the failure of the Spin-Off and the debt exchanges to qualify as tax-free for U.S. federal income tax purposes, within the meaning of Section 355 and Section 368(a)(1)(D) of the ~~Internal Revenue~~ Code, as applicable, to the extent such failure to qualify is attributable to certain actions, events or transactions relating to our stock,

indebtedness, assets or business, or a breach of the relevant representations or any covenants made by us in the Tax Matters Agreement, the materials submitted to the IRS in connection with the request for the private letter ruling or the representations provided in connection with the tax opinion. We believe that the probability of us incurring obligations under the Tax Matters Agreement are remote; and therefore, we have recorded no0 such liabilities in our ~~consolidated balance sheet.~~Condensed Consolidated Balance Sheet as of March 31, 2021.

Changes in accumulated other comprehensive (loss) income by component is as follows for the ~~nine~~three months ended ~~September 30, 2017:~~March 31, 2021 and 2020:

On April 20, 2021, the Borrowers issued $570 million aggregate principal amount of the 2028 Secured Notes and will use the net proceeds from the offering to fund the redemption in full of the 2023 Secured Notes on May 6, 2021. On April 20, 2021, the Borrowers deposited amounts sufficient to fund the redemption of the 2023 Secured Notes with the trustee and satisfied and discharged their respective obligations under the indenture governing the 2023 Secured Notes.

The 2028 Secured Notes were issued at an issue price of 100% of their principal amount pursuant to an Indenture, dated as of April 20, 2021 (the “Indenture”), among the Borrowers, the guarantors named therein (collectively, the “Guarantors”) and Deutsche Bank Trust Company Americas, as trustee (in such capacity, the “Trustee”) and as collateral agent. The 2028 Secured Notes mature on April 15, 2028 and bear interest at a rate of 4.750% per year. Interest on the 2028 Secured Notes is payable on April 15 and October 15 of each year, beginning on October 15, 2021.

The Borrowers may redeem the 2028 Secured Notes, in whole or in part, at any time prior to April 15, 2024 at a redemption price equal to 100% of the principal amount of the 2028 Secured Notes redeemed plus accrued and unpaid interest on the 2028 Secured Notes, if any, to, but not including, the redemption date, plus an applicable “make whole” premium described in the Indenture. Thereafter, the Borrowers may redeem the 2028 Secured Notes in whole or in part, at the redemption prices set forth in the Indenture. In addition, prior to April 15, 2024, the Borrowers may redeem up to 10% of the aggregate principal amount of the 2028 Secured Notes in any twelve month period at a redemption price equal to 103% of the principal amount thereof plus accrued and unpaid interest thereon, if any, to, but not including, the applicable redemption date. Further, at any time on or prior to April 15, 2024, up to 40% of the aggregate principal amount of the 2028 Secured Notes may be redeemed with the net cash proceeds of certain equity offerings at a redemption price of 104.750% of the principal amount plus accrued and unpaid interest, if any, to, but not including, the applicable redemption date; provided that at least 60% of aggregate principal amount of the originally issued 2028 Secured Notes remains outstanding. If certain changes of control of Uniti Group LP occur, holders of the 2028 Secured Notes will have the right to require the Borrowers to offer to repurchase their Notes at 101% of their principal amount plus accrued and unpaid interest, if any, to, but not including, the repurchase date.

Notes to ~~SEC Regulation S-X Rule 3-10 “Financial statements of guarantors~~the Condensed Consolidated Financial Statements – Continued

The 2028 Secured Notes are fully and ~~issuers of~~unconditionally guaranteed, ~~securities registered or being registered,”~~jointly and severally, on a senior unsecured basis by the Company ~~historically has provided condensed consolidating financial information for CSL Capital~~ and on a senior secured basis by each of Uniti Group LP’s existing and future domestic restricted subsidiaries (other than the ~~Guarantors because~~Borrowers) that guarantees indebtedness under the ~~2023~~senior secured credit facilities (the “Subsidiary Guarantors”). In addition, the Borrowers will use commercially reasonable efforts to obtain necessary regulatory approval to allow certain non-guarantor subsidiaries of the Company to guarantee the 2028 Secured Notes, including by making filings to obtain such approval within 60 days of the issuance of the 2028 Secured Notes. The guarantees are subject to release under specified circumstances, including certain circumstances in which such guarantees may be automatically released without the consent of the holders of the 2028 Secured Notes.

The 2028 Secured Notes and the related guarantees ~~thereof were previously registered~~are the Borrowers’ and the Subsidiary Guarantors’ senior secured obligations and the Company’s senior unsecured obligations and rank equal in right of payment with all of the ~~SEC~~Borrowers’ and the Subsidiary Guarantors’ existing and future senior unsubordinated obligations; effectively senior to all unsecured indebtedness of the Borrowers and the Subsidiary Guarantors, including the Borrowers’ existing senior unsecured notes, to the extent of the value of the collateral securing the 2028 Secured Notes; effectively equal with all of the Borrowers’ and the Subsidiary Guarantors’ existing and future indebtedness that is secured by first-priority liens on the collateral (including indebtedness under the ~~Securities Act~~senior secured credit facilities and existing secured notes); senior in right of ~~1933, as amended. Effective as of May 9, 2017 (the effective date~~payment to any of the ~~previously announced up-REIT Reorganization (see Note 8)),~~ ~~the 2023 Notes ceased~~Borrowers’ and Subsidiary Guarantors’ future subordinated indebtedness; and structurally subordinated to ~~be an obligation~~all existing and future liabilities (including trade payables) of the ~~Company,~~Company’s subsidiaries (other than the Borrowers) that do not guarantee the 2028 Secured Notes. The 2028 Secured Notes and the ~~Company was no longer required~~related guarantees will also be effectively subordinated to ~~provide supplemental guarantor information related~~any existing or future indebtedness that is secured by liens on assets that do not constitute a part of the collateral securing the 2028 Secured Notes to the ~~2023 Notes.~~extent of the value of such assets.

The 2028 Secured Notes and the related guarantees will be secured by liens on substantially all of the assets of the Borrowers and the Subsidiary Guarantors, which assets also ratably secure obligations under the existing secured notes and senior secured credit facilities, in each case, subject to certain exceptions and permitted liens. The collateral will not include real property (below a specified threshold of value), but will include certain fixtures and other equipment as well as cash that we receive pursuant the Windstream Leases.

The Indenture contains customary high yield covenants limiting the ability of Uniti Group LP and its restricted subsidiaries to: incur or guarantee additional indebtedness; incur or guarantee secured indebtedness; pay dividends or distributions on, or redeem or repurchase, capital stock; make certain investments or other restricted payments; sell assets; enter into transactions with affiliates; merge or consolidate or sell all or substantially all of their assets; and create restrictions on the ability of the Issuers and their restricted subsidiaries to pay dividends or other amounts to the Borrowers. These covenants are subject to a number of limitations, qualifications and exceptions. The Indenture also contains customary events of default.

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations.

The following management’s discussion and analysis of financial condition and results of operations describes the principal factors affecting the results of our operations, financial condition, and changes in financial condition for the three ~~and nine~~ months ended ~~September 30, 2017.~~March 31, 2021. This discussion should be read in conjunction with the accompanying ~~unaudited financial statements,~~Condensed Consolidated Financial Statements, and the notes thereto set forth in Part I, Item 1 of this Quarterly Report on Form 10-Q and our Annual Report on Form 10-K ~~for the year ended December 31, 2016,~~ filed with the U.S. Securities and Exchange Commission ~~(the “SEC”~~(“SEC”) on ~~February 23, 2017.~~March 5, 2021, as amended by Amendment No. 1 thereto filed on Form 10-K/A with the SEC on March 30, 2021 (the “Annual Report”).

Uniti Group Inc. (the “Company”, “Uniti”, “we”, “us” or “our”)~~, formerly known as Communications Sales & Leasing, Inc.,~~ is an independent, internally managed real estate investment trust (“REIT”) engaged in the acquisition and construction of mission critical infrastructure in the communications industry. We are principally focused on acquiring and constructing fiber optic, ~~broadband networks, wireless communications towers,~~ copper and coaxial broadband networks and data ~~centers.~~centers.

On April 24, 2015, we were separated and spun-off (the “Spin-Off”) from Windstream Holdings, Inc. (“Windstream Holdings” and together with Windstream Holdings II, LLC, its successor in interest, and its subsidiaries, “Windstream”) pursuant to which Windstream contributed certain telecommunications network assets, including fiber and copper networks and other real estate (the “Distribution Systems”) and a small consumer competitive local exchange carrier (“CLEC”) business (the “Consumer CLEC Business”) to Uniti and Uniti issued common stock and indebtedness and paid cash obtained from borrowings under Uniti’s senior credit facilities to Windstream. In connection with the Spin-Off, we entered into a long-term exclusive triple-net lease (the “Master Lease”) with Windstream, pursuant to which a substantial portion of our real property is leased to Windstream and from which ~~substantially all~~a substantial portion of our leasing revenues are currently ~~derived.~~derived. In connection with Windstream’s emergence from bankruptcy, Uniti and Windstream bifurcated the Master Lease and entered into two structurally similar master leases (collectively, the “Windstream Leases”), which amended and restated the Master Lease in its entirety. The Windstream Leases consist of (a) a master lease (the “ILEC MLA”) that governs Uniti owned assets used for Windstream’s incumbent local exchange carrier (“ILEC”) operations and (b) a master lease (the “CLEC MLA”) that governs Uniti owned assets used for Windstream’s CLEC operations.

Uniti operates as a REIT for U.S. federal income tax purposes. As a REIT, the Company is generally not subject to U.S. federal income taxes on income generated by its REIT operations, which includes income derived from the ~~Master Lease.~~Windstream Leases. We have elected to treat the subsidiaries through which we operate our fiber business, Uniti Fiber, certain aspects of our former towers business, and Talk America Services, LLC, which operated the Consumer CLEC Business (“Talk America”), as taxable REIT subsidiaries (“TRSs”). TRSs enable us to engage in activities that ~~do not~~ result in income that ~~would be~~does not constitute qualifying income for a REIT. Our TRSs are subject to U.S. federal, state and local corporate income ~~taxes.~~taxes.

The Company operates through a customary up-REIT structure, pursuant to which we hold substantially all of our assets through a partnership, Uniti Group LP, a Delaware limited partnership (the “Operating Partnership”), that we control as general partner. This structure is intended to facilitate future acquisition opportunities by providing the Company with the ability to use common units of the Operating Partnership as a tax-efficient acquisition currency. As of ~~the date of this report,~~March 31, 2021, we are the sole general partner of the Operating Partnership and own approximately ~~97.7%~~98.5% of the partnership interests in the Operating Partnership.

We ~~expect~~aim to grow and diversify our portfolio and tenant base by pursuing a range of transaction structures with communication service providers, including (i) ~~sale leaseback~~sale-leaseback transactions, whereby we acquire existing infrastructure assets from third parties, including communication service providers, and lease them back on a long-term ~~triple net~~triple-net basis; (ii) leasing of dark fiber and selling of lit services on our existing fiber network assets that we either constructed or acquired; (iii) whole company acquisitions, which may include the use of one or more TRSs that are permitted under the tax laws to acquire and operate non-REIT ~~operating~~ businesses and assets subject to certain limitations; ~~(iii)~~(iv) capital investment financing, whereby we offer communication service providers a cost efficient method of raising funds for discrete capital investments to upgrade or expand their network; and ~~(iv)~~(v) mergers and acquisitions financing, whereby we facilitate mergers and acquisition transactions as a capital ~~partner.~~partner, including through operating company-property company (“OpCo-PropCo”) structures.

We ~~manage~~have historically managed our operations asthe four reportable business segments inlisted below (in addition to our corporate ~~operations:~~operations), but due to the sale of our towers business and wind down of the Consumer CLEC Business, effective January 1, 2021, we manage our operations focused on our two primary businesses, Leasing and Fiber Infrastructure:

Leasing Segment: Represents ~~our REIT operations and includes~~ the results from our leasing ~~programs,~~business, Uniti Leasing, which is engaged in the acquisition of mission-critical communications assets and leasing them ~~back~~ to anchor customers on either an exclusive or shared-tenant ~~basis.~~basis. Uniti Leasing is a component of our REIT operations.

Fiber Infrastructure Segment: Represents the operations of our fiber business, Uniti Fiber, which is a leading provider of infrastructure solutions, including cell site backhaul and dark fiber, to the telecommunications ~~industry.~~industry.

Towers Segment: Represents the operations of our former towers business, Uniti Towers, through which we ~~acquire~~acquired and ~~construct~~constructed tower and tower-related real estate and leased space on communications towers to wireless service providers and other tenants in the United ~~States~~States. Starting in 2019, the Company completed a series of transactions to largely divest of its towers business: on April 2, 2019, May 23, 2019 and June 1, 2020, the Company completed the sales of its Latin ~~America.~~American business, substantially all of its U.S. ground lease business, and its U.S. tower business, respectively. Portions of our former towers business were a component of our REIT operations, while the remainder were owned and operated by our TRSs.

Consumer CLEC Segment: Represents the operations of Talk America through which we ~~operate~~operated the Consumer CLEC Business that, prior to the Spin-Off, was reported as an integrated operation within Windstream. Talk America ~~provides~~provided local telephone, high-speed internet and ~~long distance~~long-distance services to customers in the eastern and central United States. As of the end of the second quarter of 2020, we substantially completed a wind down of our Consumer CLEC Business.

Corporate Operations: Represents our corporate office and ~~back office~~shared service functions. Certain costs and expenses, primarily related to headcount, information technology systems, insurance, professional fees and similar charges, that are directly attributable to operations of our business segments are allocated to the respective ~~segments.~~segments.

We evaluate the performance of each segment based on Adjusted EBITDA, which is a segment performance measure ~~defined~~we define as net income determined in accordance with GAAP, before interest expense, provision for income taxes, depreciation and amortization, stock-based compensation expense and the impact, which may be recurring in nature, of transaction and integration related ~~expenses,~~costs, costs associated with Windstream’s bankruptcy, costs associated with litigation claims made against us, costs associated with the implementation of our enterprise resource planning system, costs related to the settlement with Windstream, amortization of non-cash rights-of-use, the write off of unamortized deferred financing costs, costs incurred as a result of the early repayment of debt, including early tender premiums and costs associated with the termination of related hedging activities, gains or losses on dispositions, changes in the fair value of contingent consideration and financial instruments, and other similar ~~items.~~or infrequent items (although we may not have had such charges in the periods presented). Adjusted EBITDA includes adjustments to reflect the Company’s share of Adjusted EBITDA from unconsolidated entities. For more information on Adjusted EBITDA, see ��Non-GAAP Financial Measures.” Detailed information about our segments can be found in Note 13 to our accompanying Condensed Consolidated Financial Statements contained in Part I, Item 1 of this Quarterly Report on Form 10-Q.

~~Acquisition of Southern Light, LLC.~~Unsecured Notes Offering, Tender and Redemption. On July 3, 2017, we completed the previously announced acquisition of Southern Light, LLC (“Southern Light”). We acquired all of the outstanding membership interests of Southern Light for approximately $638 million in cash, including the payoff of existing indebtedness and unpaid transaction expenses, and the issuance of 2.5 million common units inFebruary 2, 2021, the Operating Partnership, ~~with an acquisition date fair value~~Uniti Group Finance 2019 Inc. and CSL Capital, LLC, as co-issuers and, collectively, the “Issuers,” issued $1.11 billion aggregate principal amount of $64.3 million. Southern Light is a leading provider of data transport services along the Gulf Coast region serving twelve attractive Tier II and Tier III markets across Florida, Alabama, Louisiana, and Mississippi. Southern Light’s dense regional fiber network comprises nearly 540,000 fiber strand miles, 5,700 fiber route miles, and over 4,500 on-net locations.

~~Acquisition of Hunt Telecommunications, LLC.~~ ~~On July 3, 2017, we completed the previously announced acquisition of Hunt Telecommunications, LLC (“Hunt”~~6.50% Senior Notes due 2029 (the “2029 Notes”). The ~~Company acquired~~Issuers used the net proceeds from the offering to fund the tender offer of substantially all $1.11 billion principal amount of their 8.25% Senior Notes due 2023 (the “2023 Notes”), of which $58.8 million remained outstanding as of March 31, 2021. On April 15, 2021, the Issuers redeemed the remaining outstanding principal amount of the 2023 Notes.

Secured Notes Offering and Redemption. On April 20, 2021, the Issuers issued $570 million aggregate principal amount of 4.750% Senior Secured Notes due 2028 (the “2028 Secured Notes”) and will use the net proceeds from the offering to fund the redemption in full of their outstanding ~~equity interests~~6.00% Senior Secured Notes due 2023 (the “2023 Secured Notes”) on May 6, 2021. On April 20, 2021, the Issuers deposited amounts sufficient to fund the redemption of ~~Hunt~~the 2023 Secured Notes with the trustee and satisfied and discharged their respective obligations under the indenture governing the 2023 Secured Notes. See Note 16 – Subsequent Events to our Condensed Consolidated Financial Statements, included in this report at Part I, Item 1-Financial Statements for ~~approximately $130 million in cash, including the payoff~~additional information.

Results of ~~$41.6 million.~~ ~~Additional contingent consideration of up to $17 million, with an acquisition date fair value of $16.4 million will be paid upon the achievement of certain defined financial revenue milestones.~~ ~~Hunt is a~~ ~~leading provider of data transport to K-12 schools and government agencies with a dense fiber network in Louisiana.~~Operations

Comparison of the three months ended ~~September 30, 2017~~March 31, 2021 and ~~2016~~

Beginning in the first quarter of 2017, the Company manages and reports our operations in four reportable segments: Leasing, Fiber Infrastructure, Towers, and Consumer CLEC. Prior period data has been reclassified to conform to the current period presentation.2020

The following table sets forth, for the periods indicated, our results of operations expressed as dollars and as a percentage of total revenues:

	Three Months Ended March 31,
	2021				2020
(Thousands)	Amount			% of Revenues	Amount			% of Revenues
Revenues:
Leasing	$	194,936		71.5%	$	184,352		69.2%
Fiber Infrastructure		77,650		28.5%		77,407		29.1%
Tower		-		0.0%		3,720		1.4%
Consumer CLEC		-		0.0%		683		0.3%
Total revenues		272,586		100.0%		266,162		100.0%
Costs and Expenses:
Interest expense		140,581		51.5%		178,393		67.0%
Depreciation and amortization		70,964		26.0%		86,121		32.4%
General and administrative expense		25,823		9.5%		27,133		10.2%
Operating expense		38,084		14.0%		40,310		15.1%
Transaction related and other costs		4,137		1.5%		15,972		6.0%
Other expense, net		454		0.2%		3,075		1.2%
Total costs and expenses		280,043		102.7%		351,004		131.9%
Loss before income taxes and equity in earnings from unconsolidated entities		(7,457	)	(2.7%)		(84,842	)	(31.9%)
Income tax benefit		2,557		0.9%		4,576		1.7%
Equity in earnings from unconsolidated entities		398		0.1%		-		0.0%
Net loss		(4,502	)	(1.7%)		(80,266	)	(30.2%)
Net loss attributable to noncontrolling interests		(64	)	(0.1%)		(1,413	)	(0.6%)
Net loss attributable to shareholders		(4,438	)	(1.6%)		(78,853	)	(29.6%)
Participating securities' share in earnings		(248	)	(0.1%)		(200	)	(0.1%)
Dividends declared on convertible preferred stock		(3	)	(0.0%)		(3	)	(0.0%)
Net loss attributable to common shareholders	$	(4,689	)	(1.7%)	$	(79,056	)	(29.7%)

The following tables set forth, for the three months ended March 31, 2021 and 2020, revenues, Adjusted EBITDA and net (loss) income of our reportable segments:

Three Months Ended September 30,

2017

2016

(Thousands)

Amount

% of Revenues

Amount

% of Revenues

Revenues:

Leasing

$
171,673

70.0%

$
169,366

84.6%

Fiber Infrastructure

66,363

27.1%

25,219

12.6%

Tower

2,796

1.1%

159

0.1%

Consumer CLEC

4,378

1.8%

5,496

2.7%

Total revenues

245,210

100.0%

200,240

100.0%

Costs and Expenses:

Interest expense

78,784

32.1%

70,522

35.2%

Depreciation and amortization

113,444

46.3%

96,723

48.3%

General and administrative expense

22,068

9.0%

10,191

5.1%

Operating expense

30,172

12.3%

15,704

7.8%

Transaction related costs

8,512

3.5%

9,315

4.7%

Other (income) expense

(3,933
)

(1.6%)

-

-

Total costs and expenses

249,047

101.6%

202,455

101.1%

Loss before income taxes

(3,837
)

(1.6%)

(2,215
)

(1.1%)

Income tax (benefit) expense

(8,672
)

(3.5%)

128

0.1%

Net income (loss)

4,835

2.0%

(2,343
)

(1.2%)

Net income attributable to noncontrolling interests

107

0.0%

-

-

Net income (loss) attributable to shareholders

4,728

1.9%

(2,343
)

(1.2%)

Participating securities' share in earnings

(388
)

(0.2%)

(407
)

(0.2%)

Dividends declared on convertible preferred stock

(656
)

(0.3%)

(649
)

(0.3%)

Amortization of discount on convertible preferred stock

(745
)

(0.3%)

(745
)

(0.4%)

Net income (loss) attributable to common shareholders

$
2,939

1.2%

$
(4,144
)

(2.1%)

	Three Months Ended March 31, 2021
(Thousands)	Leasing		Fiber Infrastructure		Towers		Consumer CLEC		Corporate			Subtotal of Reportable Segments
Revenues	$	194,936	$	77,650	$	-	$	-	$	-		$	272,586

Adjusted EBITDA	$	191,497	$	29,721	$	-	$	-	$	(6,970	)	$	214,248
Less:
Interest expense													140,581
Depreciation and amortization		42,226		28,670		-		-		68			70,964
Other expense, net													1,318
Transaction related and other costs													4,137
Stock-based compensation													3,335
Income tax benefit													(2,557	)
Adjustments for equity in earnings from unconsolidated entities													972
Net loss												$	(4,502	)

Leasing - – Leasing revenues are primarily attributable to rental revenue from leasing our Distribution Systems to Windstream ~~Holdings~~ pursuant to the Windstream Leases (and historically, the Master ~~Lease.~~Lease). Under the Windstream Leases, Windstream is responsible for the costs related to operating the Distribution Systems, including property taxes, insurance, and maintenance and repair costs. As a result, we do not record an obligation related to the payment of property taxes, as Windstream makes direct payments to the taxing authorities. The initial term of the Windstream Leases expires on April 30, 2030. The aggregate initial annual rent under the Windstream Leases is $663 million, equal to the annual rent under the Master Lease previously in effect, and is subject to annual escalation at a rate of 0.5%.

The ~~Master~~rent for the first year of each renewal term will be an amount agreed to by us and Windstream. While the agreement requires that the renewal rent be “Fair Market Rent,” if we are unable to agree, the renewal Fair Market Rent will be determined by an independent appraisal process. Commencing with the second year of each renewal term, the renewal rent will increase at an escalation rate of 0.5%.

Pursuant to the Windstream Leases, Windstream (or any successor tenant under a Windstream Lease) has the right to cause Uniti to reimburse up to an aggregate $1.75 billion for certain growth capital improvements in long-term fiber and related assets made by Windstream (or the applicable tenant under the Windstream Lease) to certain ILEC and CLEC properties (the “Growth Capital Improvements”). Uniti’s reimbursement commitment for Growth Capital Improvements does not require Uniti to reimburse Windstream for maintenance or repair expenditures (except for costs incurred for fiber replacements to the CLEC MLA leased property, up to $70 million during the term), and each such reimbursement is subject to underwriting standards. Uniti’s total annual reimbursement commitments for the Growth Capital Improvements under both Windstream Leases (and under separate equipment loan facilities) are limited to $225 million per year in 2021 through 2024; $175 million per year in 2025 and 2026; and $125 million per year in 2027 through 2029. If the cost incurred by Windstream (or the successor tenant under a Windstream Lease) for Growth Capital Improvements in any calendar year exceeds the annual limit for such calendar year, Windstream (or such tenant, as the case may be) may submit such excess costs for reimbursement in any subsequent year and such excess costs shall be funded from the

annual commitment amounts in such subsequent period. In addition, to the extent that reimbursements for Growth Capital Improvements funded in any calendar year during the term is less than the annual limit for such calendar year, the unfunded amount in any calendar year will carry-over and may be added to the annual limits for subsequent calendar years, subject to an annual limit of $250 million in any calendar year, except that, during calendar year 2021, Uniti’s combined total obligation to fund Growth Capital Improvements may exceed $250 million to the extent of any unfunded excess amounts from calendar year 2020. Accordingly, because we funded $84.7 million of the $125 million limit in 2020, we are committed to fund up to $265.3 million of Growth Capital Improvements in 2021.

Starting on the first anniversary of each installment of reimbursement for a Growth Capital Improvement, the rent payable by Windstream under the applicable Windstream Lease ~~provides~~will increase by an amount equal to 8.0% (the “RentRate”) of such installment of reimbursement. The Rent Rate will thereafter increase to 100.5% of the prior Rent Rate on each anniversary of each reimbursement. In the event that the tenant’s interest in either Windstream Lease is transferred by Windstream under the terms thereof (unless transferred to the same transferee), or if Uniti transfers its interests as landlord under either Windstream Lease (unless to the same transferee), the reimbursement rights and obligations will be allocated between the ILEC MLA and the CLEC MLA by Windstream, provided that the maximum that may be allocated to the CLEC MLA following such transfer is $20 million per year. If Uniti fails to reimburse any Growth Capital Improvement reimbursement payment or equipment loan funding request as and when it is required to do so under the terms of the Windstream Leases, and such failure continues for thirty (30) days, then such unreimbursed amounts may be applied as an offset against the rent owed by Windstream under the Windstream Leases (and such amounts will thereafter be treated as if Uniti had reimbursed them).

Uniti and Windstream have entered into separate ILEC and CLEC Equipment Loan and Security Agreements (collectively “Equipment Loan Agreement”) in which Unit will provide up to $125 million (limited to $25 million in any calendar year) of the $1.75 billion of Growth Capital Improvements commitments discussed above in the form of loans for Windstream to purchase equipment related to network upgrades or to be used in connection with the Windstream Leases. Interest on these loans will accrue at 8% from the date of the borrowing. All equipment financed through the Equipment Loan Agreement is the sole property of Windstream; however, Uniti will receive a first-lien security interest in the equipment purchased with the loans. No such loans were made to Windstream during quarter ended March 31, 2021.

The Windstream Leases provide that tenant funded capital improvements (“TCIs”), defined as maintenance, repair, overbuild, upgrade or replacement to the Distribution Systems, including without limitation, the replacement of copper distribution systems with fiber distribution systems, automatically become property of Uniti upon their construction by Windstream. We receive non-monetary consideration related to TCIs as they automatically become our property, ~~thus~~and we recognize the cost basis of TCIs that are capital in nature as real estate investments and deferred revenue. We depreciate the real estate investments over their estimated useful lives and amortize the deferred revenue as additional leasing revenues over the same depreciable life of the TCI assets. TCIs exclude Growth Capital Improvements as and when reimbursed by Uniti.

~~For~~During the three months ended ~~September 30, 2017, we recognized $171.7~~March 31, 2021, Uniti reimbursed $42.7 million of ~~revenue from rents~~Growth Capital Improvements, of which $27.5 million, as allowed for under the ~~Master Lease,~~Settlement, represented the reimbursement of capital improvements completed in 2020 that were previously classified as TCIs. Upon reimbursement, the Company reduced the unamortized portion of deferred revenue related to these capital improvements and capitalized the difference between the cash provided to Windstream and the unamortized deferred revenue as a lease incentive. This lease incentive, which ~~included $4.3~~is $1.0 million and reported within other assets on our Condensed Consolidated Balance Sheet as of March 31, 2021, will be amortized against revenue over the initial term of the Windstream Leases. Subsequent to March 31, 2021, Windstream requested, and we reimbursed $14.9 million of ~~straight-line revenues and $4.0~~qualifying Growth Capital Improvements. As of the date of this Quarterly Report on Form 10-Q, we have reimbursed a total of $142.3 million of ~~TCI revenue. For the three months ended September 30, 2016, we recognized $169.4 million~~Growth Capital Improvements.

The increase in TCI revenue is attributable to ~~increased~~continued investment by Windstream, ~~in TCIs.~~where Windstream invested ~~$52.5~~$62.9 million inof TCIs during the three months ended ~~September 30, 2017, an increase from $41.6 million it~~March 31, 2021. The total amount invested in TCIs ~~during~~by Windstream since the inception of the Windstream Leases and Master Lease was $909.6 million as of March 31, 2021. For the three months ended ~~September 30, 2016. Since~~March 31, 2021, we recognized $14.2 million of leasing revenues from non-Windstream triple-net leasing and dark fiber indefeasible rights of use (“IRU”) arrangements. For the ~~inception of the Master Lease, Windstream has invested a total of $391.9~~three months ended March 31, 2020, we recognized $11.1 million ~~in such improvements.~~from non-Windstream triple-net leasing and dark fiber IRU arrangements.

Because a substantial portion of our revenue isand cash flows are derived from lease payments by Windstream pursuant to the ~~Master Lease,~~Windstream Leases, there could be a material adverse impact on our consolidated results of operations, liquidity, financial condition and/or ~~financial condition~~ability to maintain our status as a REIT and service debt if Windstream were to ~~default under the Master Lease or otherwise experience operating difficulties and becomes~~become unable to generate sufficient cash to make payments to ~~us. In recent years,~~us.

Prior to its emergence from bankruptcy on September 21, 2020, Windstream ~~has experienced annual declines in its total revenue~~was a publicly traded company and ~~sales.~~was subject to the periodic filing requirements of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). Windstream’s historic filings through their quarter ended June 30, 2020 can be found at www.sec.gov. On September 22, ~~2017,~~2020, Windstream ~~Services, LLC (“~~filed a Form 15 to terminate all filing obligations under Section 12(g) and 15(d) under the Exchange Act. Windstream Services”), Windstream’s primary operating subsidiary, received a purported notice of default dated September 21, 2017 from a large purported holder of Windstream Services’ 6 3/8% Senior Notes due 2023 (the “Windstream Notes”). The notice alleged, among other things, that Windstream Services violated certain restrictive covenants of the indenture governing the Windstream Notes in connection with Windstream’s Spin-Off of Uniti Group. Windstream is challenging the alleged default in federal court and recently launched an exchange offer and consent solicitation to obtain a waiver of the alleged

~~default from holders representing a majority of the aggregate principal amount of the Windstream Notes. If the alleged defaults claimed by the noteholder~~filings are not waived, the noteholder or the Windstream Notes’ trustee may allege that an “event of default” has occurred under the Windstream Notes’ indenture. An actual “event of default” would permit the Windstream Notes’ trustee or holders of at least 25%incorporated by reference in aggregate principal amount of outstanding of the Windstream Notes to declare the principal amount of all outstanding Windstream Notes to be immediately due and payable. Such an outcome would trigger cross-default provisions in Windstream’s other debt instruments, including Windstream Services existing credit facility, which, in turn, would trigger a default under the Master Lease. In addition, Windstream Services’ ability to pay dividends to Windstream Holdings under the terms of its indentures is subject to certain conditions, including the absence of a default or event of default, and any actual default or event of default could prevent Windstream Services from providing sufficient funding to Windstream Holdings to make paymentsthis Quarterly Report on ~~the Master Lease. Accordingly, we~~ Form 10-Q.

We monitor the credit quality of Windstream through numerous methods, including by (i) reviewing ~~the~~ credit ratings of Windstream by nationally recognized credit ~~rating~~ agencies, (ii) reviewing the financial statements of Windstream ~~that are publicly available and~~ that are required to be delivered to us pursuant to the ~~Master Lease,~~Windstream Leases, (iii) monitoring news reports regarding Windstream and its ~~businesses,~~business, (iv) conducting research to ascertain industry trends potentially affecting Windstream, (v) monitoring Windstream’s compliance with the terms of the Windstream Leases and ~~(v)~~(vi) monitoring the timeliness of its ~~lease payments.~~payments under the Windstream Leases.

~~In addition to periodic financial statements,~~As of the date of this Quarterly Report on Form 10-Q, Windstream is ~~obligated under the Master Lease to provide us (i)~~current on all lease payments. We note that in August 2020, Moody’s Investor Service assigned a ~~detailed consolidated budget on an annual basis and any significant revisions approved by Windstream’s board of directors, (ii) prompt notice of any adverse action or investigation by~~B3 corporate family rating with a governmental authority relating to Windstream’s licenses affecting the leased property, and (iii) any information we require to comply with our reporting and filing obligations with the SEC. Furthermore, pursuant to the Master Lease, we may inspect the properties leasedstable outlook to Windstream ~~upon reasonable advance notice, and, no more than twice per year, we may require Windstream to deliver an officer’s certificate certifying, among other things,~~in connection with its ~~material compliance with the covenants under the Master Lease, the amount of rent and additional charges payable thereunder, the dates~~post-emergence exit financing. At the same ~~were paid,~~time, S&P Global Ratings assigned Windstream a B- issuer rating with a stable outlook. In order to assist us in our continuing assessment of Windstream’s creditworthiness, we receive certain confidential financial information and ~~any other questions or statements~~metrics from Windstream.

Fiber Infrastructure – Fiber Infrastructure revenues for the three months ended March 31, 2021 and 2020 consisted of ~~fact~~the following:

For the three months ended March 31, 2021, Fiber Infrastructure revenues totaled $77.7 million as compared to $77.4 million for the three months ended March 31, 2020. At March 31, 2021 we ~~reasonably request.~~had approximately 26,315 customer connections, up from 22,175 customer connections at March 31, 2020.

~~Fiber Infrastructure~~Towers – For the three months ended ~~September 30, 2017,~~March 31, 2021, we recognized no revenue from the Towers business, as we ~~recognized $66.4 million~~completed the sale of ~~revenue, approximately 54% of which was derived from lit backhaul services, approximately 10% from construction revenue and approximately 29% from other service revenue.~~our U.S. tower business on June 1, 2020.

Consumer CLEC – For the three months ended ~~September 30, 2016,~~March 31, 2021, we recognized ~~$25.2 million of revenue, approximately 75% of which was derived from lit backhaul services.~~ ~~The increase is primarily driven by the timing of the acquisition of Tower Cloud which took place on August 31, 2016, and the acquisitions of Southern Light and Hunt which took place on July 3, 2017.~~ At September 30, 2017, we had approximately 16,324 customer connections, up from 5,400 customer connections at September 30, 2016. The increase is primarily attributable to the Southern Light and Hunt acquisitions.

~~Towers~~ - For the three months ended September 30, 2017, we recognized $2.8 million of revenue, of which $2.3 million relates to our Latin American operations, primarily driven by revenues associated with our January 2017 acquisition of Network Management Holdings LTD (“NMS”).

~~Consumer CLEC~~ ~~- For the three months ended September 30, 2017, we recognized $4.4 million of~~no revenue from the Consumer CLEC Business, ~~compared to $5.5 million for the three months ended September 30, 2016. The decrease is due to the effects of competition and customer attrition,~~ as we ~~served 31,590 customers~~substantially completed the wind down of the business as of ~~September 30, 2017, an 18.11% decrease from 38,574 customers served at September 30, 2016.~~the end of the second quarter of 2020.

Interest expense for the three months ended ~~September 30, 2017, totaled $78.8~~March 31, 2021 decreased $37.8 million ~~which includes non-cash interest expense of $6.1 million resulting from the amortization of our debt discounts and debt issuance costs. Interest expense for~~compared to the three months ended ~~September 30, 2016 totaled $70.5 million, which includes non-cash interest expense of $4.0 million resulting from the amortization of our debt discounts and debt issuance costs.~~March 31, 2020. The ~~increase~~decrease is primarily ~~related~~due to ~~interest expense~~the decrease in debt extinguishment loss of $73.9 million on the add-on Secured Notes and the 2024 Notes of $10.7 million, which were not incurred in the prior year. This increase was partially offset by approximately $5.3 million of interest savings related to the repricing of $2.1 billion of term loans outstanding under our senior secured ~~credit agreement. Effective February 9, 2017, interest on the~~ term ~~loans was LIBOR plus 3.00% per annum (with a minimum LIBOR rate of 1.0%), compared to LIBOR plus 4.0% per annum (with a minimum LIBOR rate of 1.0%) for~~loan B during the three months ended ~~September 30, 2016.~~March 31, 2020 as compared to the debt extinguishment loss of $38.0 million on the 2023 Notes during the three months ended March 31, 2021.

We incur depreciation and amortization expense related to our property, plant and equipment, corporate assets and intangible assets. Charges for depreciation and amortization for the three months ended ~~September 30, 2017~~March 31, 2021 totaled ~~$113.4~~$71.0 million, which included ~~property, plant~~$66.2 million of depreciation expense and ~~equipment depreciation~~$4.8 million of ~~$107.0 million, corporate asset depreciation of $0.1 million and intangible asset~~ amortization ~~of $6.3 million.~~ expense. Charges for depreciation and amortization for the three months ended ~~September 30, 2016~~ March 31, 2020 totaled ~~$96.7~~$86.1 million, which included ~~property, plant~~$77.9 million of depreciation expense and ~~equipment depreciation~~$8.3 million of ~~$94.8 million, corporate asset depreciation of $0.2 million and~~

~~intangible asset~~ amortization ~~of $1.7 million.~~ ~~The increase is primarily driven by the timing of the acquisitions of Tower Cloud, Southern Light and Hunt.~~expense.

General and administrative expenses include compensation costs, ~~(including~~including stock-based compensation ~~awards),~~awards, professional and legal services, corporate office costs and other costs associated with administrative activities. For the three months ended ~~September 30, 2017,~~March 31, 2021, general and administrative costs totaled ~~$22.1~~$25.8 million, ~~(9.0% of revenue),~~ which includes ~~$2.0~~$3.3 million of stock-based compensation. For the three months ended March 31, 2020, general and administrative costs totaled $27.1 million, which included $3.0 million of stock-based compensation expense. ~~For the three months ended September 30, 2016, general and administrative costs totaled $10.2 million (5.1% of revenue), which includes $1.3 million of stock-based compensation expense.~~ ~~The increase is primarily driven by the timing of the acquisitions of Tower Cloud, Southern Light and Hunt.~~ ~~Fiber Infrastructure general and administrative expenses for the three months ended September 30, 2017 and 2016, totaled $10.0 million and $4.8 million, respectively.~~

Operating expense for the three months ended ~~September 30, 2017, totaled $30.2 million (12.3% of revenue),~~March 31, 2021 decreased from the three months ended March 31, 2020, which was primarily attributable to decreases in Fiber Infrastructure, Towers and ~~consisted of $3.4 million (1.4% of revenue) of expense related to the operation of the~~ Consumer CLEC Business ~~$25.4 million (10.4%~~operating expenses offset by an increase in Leasing operating expenses discussed below. Operating expense for our reportable segments for the three months ended March 31, 2021 and 2020 consisted of ~~revenue)~~the following:

Fiber Infrastructure ~~operations and $1.4 million (0.5% of revenue) of expense related to Towers operations.~~ – For the three months ended September 30, 2016, operating expenses totaled $15.7 million (7.8% of revenue), which related to the operation of the Consumer CLEC Business ($4.3 million) and Fiber Infrastructure operations ($11.4 million).

~~The increase to Fiber Infrastructure operating expense is primarily driven by the timing of the acquisitions of Tower Cloud, Southern Light and Hunt.~~ ~~For the three months ended September 30, 2017,~~March 31, 2021, Fiber Infrastructure operating expenses ~~included $5.8~~totaled $34.9 million ~~of construction related expenses, $3.7~~as compared to $36.6 million of payroll related expense, $3.0 million of tower rent, $6.0 million of lit service expense and $1.7 million of dark fiber rent. For the three months ended September 30, 2016, Fiber Infrastructure operating expenses included $2.0 million of payroll related expense, $2.5 million of tower rent and $1.6 million of lit service expense.

Expense associated with the Consumer CLEC Business is primarily attributable to the Wholesale Agreement and the Master Services Agreement entered between us and Windstream in connection with the Spin-Off, and also included costs arising under the interconnection agreements with other telecommunication carriers. Expense associated with the Wholesale Agreement and Master Services Agreement for the three months ended ~~September 30, 2017 totaled $2.5 million (1.0%~~March 31, 2020. Operating expense consists of ~~revenue)~~network related costs, such as dark fiber and ~~$0.3 million (0.1% of revenue), respectively,~~tower rents, and ~~expense~~lit service and maintenance expense. In addition, costs associated with ~~the Wholesale Agreement~~our construction activities are presented within operating expenses. The decrease in operating expenses is primarily attributable to a decrease of $5.8 million in construction related expenses, partially offset by increased personnel expense of $1.7 million.

Leasing – Leasing operating expense was $3.2 million and ~~the Master Services Agreement~~$0.8 million for the three months ended ~~September 30, 2016 totaled $3.1 million (1.5% of revenue)~~March 31, 2021 and ~~$0.4 million (0.2% of revenue),~~2020, respectively.

We recognized $3.9 million of non-cash income due to an unrealized gain for mark-to-market adjustments on our contingent consideration arrangements, which was recorded in Other (income) expense for the three months ended September 30, 2017.

We recorded an $8.7 million benefit in income tax benefit for the three months ended September 30, 2017, primarily as a result of a $8.0 million income tax benefit we recorded related to the release of a valuation allowance due to the closing of the Southern Light transaction. The Southern Light transaction resulted in a deferred tax liability, and this future reversal of taxable temporary differences supports the realization of deferred tax assets which previously had a valuation allowance.

~~The following tables set forth, for the three months ended September 30, 2017 and 2016, revenues and Adjusted EBITDA of our reportable segments:~~

~~The following table sets forth, for the periods indicated, our results of operations expressed as dollars and as a percentage of total revenues:~~

Nine Months Ended September 30,

2017

2016

(Thousands)

Amount

% of Revenues

Amount

% of Revenues

Revenues:

Leasing

$
512,893

76.6%

$
506,945

90.0%

Fiber Infrastructure

136,158

20.3%

38,995

6.9%

Tower

6,679

1.0%

271

0.0%

Consumer CLEC

13,966

2.1%

17,277

3.1%

Total revenues

669,696

100.0%

563,488

100.0%

Costs and Expenses:

Interest expense

227,235

33.9%

204,607

36.3%

Depreciation and amortization

317,404

47.4%

275,448

48.9%

General and administrative expense

49,549

7.4%

23,619

4.2%

Operating expense

74,258

11.1%

30,322

5.4%

Transaction related costs

32,213

4.8%

24,435

4.3%

Other expense

9,638

1.4%

-

-

Total costs and expenses

710,297

106.1%

558,431

99.1%

(Loss) income before income taxes

(40,601
)

(6.1%)

5,057

0.9%

Income tax (benefit) expense

(8,976
)

(1.3%)

899

0.2%

Net (loss) income

(31,625
)

(4.7%)

4,158

0.7%

Net income attributable to noncontrolling interests

107

0.0%

-

-

Net income (loss) attributable to shareholders

(31,732
)

(4.7%)

4,158

0.7%

Participating securities' share in earnings

(1,156
)

(0.2%)

(1,164
)

(0.2%)

Dividends declared on convertible preferred stock

(1,968
)

(0.3%)

(1,087
)

(0.2%)

Amortization of discount on convertible preferred stock

(2,235
)

(0.3%)

(1,241
)

(0.2%)

Net (loss) income attributable to common shareholders

$
(37,091
)

(5.5%)

$
666

0.1%

~~Leasing~~ – For the nine months ended September 30, 2017, we recognized $512.9 million of revenue from rents under the Master Lease, which included $13.0 million of straight-line revenues and $9.8 million of TCI revenue. For the nine months ended September 30, 2016, we recognized $506.9 million of revenues from the Master Lease, which included $13.0 million of straight-line rent revenue, and $3.9 million of TCI revenue. The increase in TCI revenue is attributable to increased investment by Windstream in TCIs. Windstream invested $166.3 million in TCIs during the nine months ended September 30, 2017, an increase from $112.2 million it invested in TCIs during the nine months ended September 30, 2016. Since the inception of the Master Lease, Windstream has invested a total of $391.9 million in such improvements.

~~Fiber Infrastructure~~ – For the nine months ended September 30, 2017, we recognized $136.2 million of revenue, approximately 62% of which was derived from lit backhaul services, approximately 13% from construction revenue and approximately 15% from other service revenue. For the nine months ended September 30, 2016 we recognized $39.0 million of revenue, approximately 78% of which was derived from lit backhaul services. ~~The revenue increase is primarily driven by the timing of the acquisitions of PEG, Tower Cloud, Southern Light and Hunt.~~ At September 30, 2017, we had approximately 16,324 customer connections, up from 5,400 customer connections at September 30, 2016. The increase is primarily attributable to the August 31, 2016 acquisition of Tower Cloud and the July 3, 2017 acquisitions of Southern Light and Hunt.

~~Towers~~ - For the nine months ended September 30, 2017, we recognized $6.7 million of revenue, of which $5.4 million relates to our Latin American operations, primarily driven by revenues associated with our January 2017 acquisition of NMS.

~~Consumer CLEC~~ - For the nine months ended September 30, 2017, we recognized $14.0 million of revenue from the Consumer CLEC Business, compared to $17.3 million for the nine months ended September 30, 2016. The decrease is due to the effects of competition and customer attrition, as we served 31,590 customers as of September 30, 2017, a 18.11% decrease from 38,574 customers served at September 30, 2016.

Interest expense for the nine months ended September 30, 2017, totaled $227.2 million, which includes non-cash interest expense of $17.1 million resulting from the amortization of our debt discounts and debt issuance costs. Interest expense for the nine months ended September 30, 2016, totaled $204.6 million, which includes non-cash interest expense of $11.6 million resulting from the amortization of our debt discounts and debt issuance costs. The increase is primarily related to interest expense on the add-on Secured Notes and the 2024 Notes of $26.7 million, which were not incurred in the prior year. This increase was partially offset by approximately $13.5 million of interest savings related to the repricing of $2.1 billion of term loans outstanding under our senior secured credit agreement. Effective February 9, 2017, interest on the term loans was LIBOR plus 3.00% per annum (with a minimum LIBOR rate of 1.0%), compared to LIBOR plus 4.0% per annum (with a minimum LIBOR rate of 1.0%) for the nine months ended September 30, 2016.

We incur depreciation and amortization expense related to our property, plant and equipment, corporate assets and intangible assets. Charges for depreciation and amortization for the nine months ended September 30, 2017 totaled $317.4 million, which included property, plant and equipment depreciation of $305.5 million, corporate asset depreciation of $0.3 million and intangible asset amortization of $11.6 million. Charges for depreciation and amortization for the nine months ended September 30, 2016 totaled $275.4 million, which included property, plant and equipment depreciation of $271.3 million, corporate asset depreciation of $0.4 million and intangible asset amortization of $3.7 million. The increase is primarily driven by a $2.2 million increase in network expenses due to the ~~timing~~asset purchase agreement the Company entered into with Windstream which was completed in the third quarter of 2020.

Towers – For the three months ended March 31, 2021, Towers operating expenses were not incurred as the U.S. tower business sale was completed on June 1, 2020. Towers operating expense was $2.3 million for the three months ended March 31, 2020.

Consumer CLEC – For the three months ended March 31, 2021, Consumer CLEC Business operating expenses were not incurred, as we substantially completed the wind down of the ~~acquisitions~~business as of ~~PEG, Tower Cloud, Southern Light~~the end of the second quarter of 2020.

~~General and administrative expenses include compensation costs (including stock-based compensation awards), professional and legal services, corporate office costs~~Transaction related and other costs ~~associated with administrative activities. For the nine months ended September 30, 2017, general~~included incremental acquisition, pursuit, transaction and ~~administrative~~integration costs ~~totaled $49.5 million (7.4% of revenue)~~(including unsuccessful acquisition pursuit costs), ~~which includes $5.6 million of stock-based compensation expense. For the nine months ended September 30, 2016, general and administrative~~ costs ~~totaled $23.6 million (4.2% of revenue), which includes $3.5 million of stock-based compensation expense.~~ The increase is primarily driven by the timing of the acquisitions of PEG and Tower Cloud, which closed on May 2, 2016 and August 31, 2016, respectively, as well as the acquisition of Southern Light and Hunt that closed on July 3, 2017. Fiber Infrastructure general and administrative expenses for the nine months ended September 30, 2017 and 2016, totaled $21.2 million and $7.7 million, respectively.

Operating expense for the nine months ended September 30, 2017, totaled $74.3 million (11.1% of revenue), and consisted of $10.5 million (1.6% of revenue) of expense related to the operation of the Consumer CLEC Business, $60.4 million (9.0% of revenue) of expense related to Fiber Infrastructure operations and $3.4 million (0.5% of revenue) of expense related to Towers operations. For the nine months ended September 30, 2016, operating expenses totaled $30.3 million (5.4% of revenue), which related to the operation of the Consumer CLEC Business ($13.4 million) and Fiber Infrastructure operations ($16.9 million).

The increase to Fiber Infrastructure operating expense is primarily driven by the timing of the acquisitions of PEG and Tower Cloud, which closed on May 2, 2016 and August 31, 2016, respectively, as well as the acquisition of Southern Light and Hunt that closed on July 3, 2017. For the nine months ended September 30, 2017, Fiber Infrastructure operating expenses included $16.9 million of construction related expenses, $11.3 million of payroll related expense, $8.6 million of tower rent, $9.6 million of lit service expense, $7.3 million of maintenance expense and $5.3 million of dark fiber rent. For the nine months ended September 30, 2016, Fiber Infrastructure operating expenses included $3.1 million of payroll related expense, $4.1 million of tower rent and $2.4 million of lit service expense.

Expense associated with the Consumer CLEC Business is primarily attributable to the Wholesale Agreement and the Master Services Agreement entered between us and Windstream in connection with the Spin-Off, and also included costs arising under the interconnection agreements with other telecommunication carriers. Expense associated with the Wholesale Agreement and Master Services Agreement for the nine months ended September 30, 2017 totaled $7.8 million (1.2% of revenue) and $1.1 million (0.2% of revenue), respectively, and expense associated with the Wholesale Agreement and the Master Services Agreement for the nine months ended September 30, 2016 totaled $9.6 million (1.7% of revenue) and $1.3 million (0.2% of revenue), respectively.

~~Other expense for the nine months ended September 30, 2017, totaled $9.6 million (1.4% of revenue), primarily~~incurred as a result of ~~a net unrealized loss~~Windstream’s bankruptcy filing, costs associated with Windstream’s claims against us and costs associated with the implementation of ~~$9.1~~our new enterprise resource planning system. For the three months ended March 31, 2021, we incurred $4.1 million of transaction related and other costs, compared to $16.0 million of such costs during the three months ended March 31, 2020. The decrease is primarily related to incurring $13.0 million of total costs related to the Windstream bankruptcy for the three months ended March 31, 2020, as compared to $1.3 million for ~~mark-to-market adjustments on our contingent consideration arrangements.~~the three months ended March 31, 2021.

~~We recorded a $9.0 million benefit in~~The income tax benefit recorded for the ~~nine~~three months ended ~~September 30, 2017, primarily as a result of a $8.0 million income tax benefit we recorded primarily~~March 31, 2021 and 2020, respectively, is related to the ~~release of a valuation allowance due to the closing~~tax impact of the Southern Light transaction. The Southern Light transaction resulted in a deferred tax liability, and this future reversal of taxable temporary differences supports the realization of deferred tax assets which previously had a valuation allowance.following:

~~The following tables set forth, for the nine months ended September 30, 2017 and 2016, revenues and Adjusted EBITDA of our reportable segments:~~

We r~~efer~~refer to EBITDA, Adjusted EBITDA, Funds From Operations ~~("FFO"~~(“FFO”) (as defined by the National Association of Real Estate Investment Trusts ~~("NAREIT"~~(“NAREIT”)) and Adjusted Funds From Operations ~~("AFFO"~~(“AFFO”) in our analysis of our results of operations, which

are not required by, or presented in accordance with, accounting principles generally accepted in the United States ~~("GAAP"~~(“GAAP”). While we believe that net income, as defined by GAAP, is the most appropriate earnings measure, we also believe that EBITDA, Adjusted EBITDA, FFO and AFFO are important non-GAAP supplemental measures of operating performance for a REIT.

Wedefine ~~"EBITDA"~~“EBITDA” as net income, as defined by GAAP, before interest expense, provision for income taxes and depreciation and amortization. We define ~~"Adjusted EBITDA"~~“Adjusted EBITDA” as EBITDA before stock-based compensation expense and the impact, which may be recurring in nature, of transaction and integration related costs, costs associated with Windstream’s bankruptcy, costs associated with litigation claims made against us, and costs associated with the implementation of our enterprise resource planning system, (collectively, ~~"transaction related costs"~~“Transaction Related and Other Costs”), costs related to the ~~write-off~~settlement with Windstream, goodwill impairment charges, amortization of non-cash rights-of-use, the write off of unamortized deferred financing costs, costs incurred as a result of the early repayment of debt, including early tender premiums and costs associated with the termination of related hedging activities, gains or losses on dispositions, changes in the fair value of contingent consideration and financial instruments, and other similar or infrequent items (although we may not have had such charges in the periods presented). Adjusted EBITDA includes adjustments to reflect the Company’s share of Adjusted EBITDA from unconsolidated entities. We believe EBITDA and Adjusted EBITDA are important supplemental measures to net income because they provide additional information to evaluate our operating performance on an unleveraged basis. In addition, Adjusted EBITDA is calculated similar to defined terms in our material debt agreements used to determine compliance with specific financial covenants. Since EBITDA and Adjusted EBITDA are not measures calculated in accordance with GAAP, they should not be considered as ~~an alternative~~alternatives to net income determined in accordance with GAAP.

Because the historical cost accounting convention used for real estate assets requires the recognition of depreciation expense except on land, such accounting presentation implies that the value of real estate assets diminishes predictably over time. However, since real estate values have historically risen or fallen with market and other conditions, presentations of operating results for a REIT that uses historical cost accounting for depreciation could be less informative. Thus, NAREIT created FFO as a supplemental measure of operating performance for REITs that excludes historical cost depreciation and amortization, among other items, from net income, as defined by GAAP. FFO is defined by NAREIT as net income ~~applicable~~attributable to common shareholders computed in accordance with GAAP, excluding gains or losses from real estate dispositions, plus real estate depreciation and amortization and impairment ~~charges.~~charges, and includes adjustments to reflect the Company’s share of FFO from unconsolidated entities. We compute FFO in accordance with ~~NAREIT's~~ ~~definition~~.NAREIT’s definition.

~~We define~~The Company defines AFFO, as FFO excluding (i) ~~transaction~~Transaction Related and Other Costs; (ii) costs related ~~costs; (ii)~~to the litigation settlement with Windstream, and accretion on our settlement obligation as these items are not reflective of ongoing operating performance; (iii) goodwill impairment charges; (iv) certain ~~noncash~~non-cash revenues and expenses such as stock-based compensation expense, amortization of debt and equity discounts, amortization of deferred financing costs, depreciation and amortization of non-real estate assets, ~~straight-line~~amortization of non-cash rights-of-use, straight line revenues, non-cash income taxes, and the amortization of other non-cash revenues to the extent that cash has not been received, such as revenue associated with the amortization of ~~TCIs~~TCIs; and ~~(iii)~~(v) the impact, which may be recurring in nature, of the write-off of unamortized deferred financing fees, additional costs incurred as a result of the early repayment of debt, including early tender premium and costs associated with the termination of related hedging activities, taxes associated with tax basis cancellation of debt, gains or losses on dispositions, changes in the fair value of contingent consideration and financial instruments and similar or infrequent items less maintenance capital expenditures. AFFO includes adjustments to reflect the Company’s share of AFFO from unconsolidated entities. We believe that the use of FFO and AFFO, and their respective per share amounts, combined with the required GAAP presentations, improves the understanding of operating results of REITs among investors and analysts, and makes comparisons of operating results among such companies more meaningful. We consider FFO and AFFO to be useful measures for reviewing comparative operating ~~and financial~~ performance. In particular, we believe AFFO, by excluding certain revenue and expense items, can help investors compare our operating performance between periods and to other REITs on a consistent basis without having to account for differences caused by unanticipated items and events, such as transaction and integration related costs. ~~We use~~The Company uses FFO and AFFO, and their respective per share amounts, only as performance measures, and FFO and AFFO do not purport to be indicative of cash available to fund our future cash requirements. While FFO and AFFO are relevant and widely used measures of operating performance of REITs, they do not represent cash flows from operations or net income as defined by GAAP and should not be considered an alternative to those measures in evaluating our liquidity or operating performance.

Further, our computations of EBITDA, Adjusted EBITDA, FFO and AFFO may not be comparable to that reported by other REITs or companies that do not define FFO in accordance with the current NAREIT definition or that interpret the current NAREIT definition or define EBITDA, Adjusted EBITDA and AFFO differently than we do.

The reconciliation of our net (loss) income to EBITDA and Adjusted EBITDA and of our net (loss) income attributable to common shareholders to FFO and AFFO for the three months ended March 31, 2021 and ~~nine months ended September 30, 2017 and 2016~~2020 is as follows:

	Three Months Ended September 30,						Nine Months Ended September 30,						Three Months Ended March 31,
(Thousands)	2017			2016			2017			2016			2021			2020
Net income (loss)	$	4,835		$	(2,343	)	$	(31,625	)	$	4,158
Net loss													$	(4,502	)	$	(80,266	)
Depreciation and amortization		113,444			96,723			317,404			275,448			70,964			86,121
Interest expense		78,784			70,522			227,235			204,607
Income tax (benefit) expense		(8,672	)		128			(8,976	)		899
Interest expense, net														140,581			178,393
Income tax benefit														(2,557	)		(4,576	)
EBITDA	$	188,391		$	165,030		$	504,038		$	485,112		$	204,486		$	179,672
Stock based compensation		1,968			1,331			5,621			3,478			3,335			2,995
Other (income) expense		(3,933	)		-			9,638			-
Transaction related costs		8,512			9,315			32,213			24,435
Transaction related and other costs														4,137			15,972
Other expense														1,318			3,075
Adjustments for equity in earnings from unconsolidated entities														972			-
Adjusted EBITDA	$	194,938		$	175,676		$	551,510		$	513,025		$	214,248		$	201,714


	Three Months Ended September 30,						Nine Months Ended September 30,						Three Months Ended March 31,
(Thousands)	2017			2016			2017			2016			2021			2020
Net income (loss) attributable to common shareholders	$	2,939		$	(4,144	)	$	(37,091	)	$	666
Net loss attributable to common shareholders													$	(4,689	)	$	(79,056	)
Real estate depreciation and amortization		95,519			88,846			278,714			261,678			53,377			63,952
Participating securities share in earnings		388			407			1,156			1,164			248			200
Participating securities share in FFO		(388	)		(394	)		(1,156	)		(1,164	)		(344	)		(200	)
Real estate depreciation and amortization from unconsolidated entities														616			-
Adjustments for noncontrolling interests		(2,222	)		-			(2,222	)		-			(796	)		(1,132	)
FFO attributable to common shareholders	$	96,236		$	84,715		$	239,401		$	262,344		$	48,412		$	(16,236	)
Transaction related costs		8,512			9,315			32,213			24,435
Transaction related and other costs														4,137			15,972
Change in fair value of contingent consideration		(3,933	)		-			9,091			-			21			1,495
Amortization of deferred financing costs		2,889			1,959			7,964			5,640
Amortization of debt discount		3,221			2,038			9,127			5,964
Amortization of deferred financing costs and debt discount														4,959			9,708
Write off of deferred financing costs and debt discount														20,415			73,952
Payment of tender premium														17,550			-
Stock based compensation		1,968			1,331			5,621			3,478			3,335			2,995
Non-real estate depreciation and amortization		17,925			7,877			38,690			13,770			17,587			22,169
Straight-line revenues		(3,609	)		(4,547	)		(10,857	)		(13,174	)		(6,906	)		109
Maintenance capital expenditures		(1,476	)		(1,415	)		(3,454	)		(2,095	)		(1,976	)		(1,108	)
Amortization of discount on convertible preferred stock		745			745			2,235			1,241
Adjustment to deferred tax valuation allowance		(7,992	)		-			(7,992	)		-
Other non-cash (revenue) expense, net		(3,509	)		(2,333	)		(9,304	)		(4,842	)
Other, net														(3,970	)		(10,454	)
Adjustments for equity in earnings from unconsolidated entities														356			-
Adjustments for noncontrolling interests		(310	)		-			(310	)		-			(818	)		(2,022	)
AFFO attributable to common shareholders	$	110,667		$	99,685		$	312,425		$	296,761		$	103,102		$	96,580

We make certain judgments and use certain estimates and assumptions when applying accounting principles in the preparation of our consolidated financial statements. The nature of the estimates and assumptions are material due to the levels of subjectivity and judgment necessary to account for highly uncertain factors or the susceptibility of such factors to change.

We believe the current assumptions and other considerations used to estimate amounts reflected in our financial statements are appropriate. However, if actual experience differs from the assumptions and other considerations used in estimating amounts reflected in our consolidated financial statements, the resulting changes could have a material adverse effect on our consolidated results of operations and, in certain situations, could have a material adverse effect on our consolidated financial condition.

For further information on our critical accounting estimates, see “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and the notes to our audited financial statements included in our Annual Report on Form 10-K for the year

~~ended December 31, 2016, filed with SEC on February 23, 2017. As of September 30, 2017, there has been no material change to these estimates.~~

Our principal liquidity needs are to fund operating expenses, meet debt service ~~requirements,~~obligations, fund investment activities, including capital expenditures, and make dividend distributions. Furthermore, following consummation of our settlement agreement with Windstream, including entry into the Windstream Leases, we are obligated to make $490.1 million of cash payments to Windstream in equal installments over 20 consecutive quarters beginning in October 2020 and to reimburse Windstream for up to an aggregate of $1.75 billion for Growth Capital Improvements in long-term fiber and related assets made by Windstream through 2029.Uniti’s reimbursement commitment for Growth Capital Improvements does not require Uniti to reimburse Windstream for maintenance or repair expenditures (except for costs incurred for fiber replacements to the CLEC MLA leased property, up to $70 million during the term), and each such reimbursement is subject to underwriting standards. Uniti’s total annual reimbursement commitments for the Growth Capital Improvements under both Windstream Leases (and under separate equipment loan facilities) are limited to $225 million per year in 2021 through 2024; $175 million per year in 2025 and 2026; and $125 million per year in 2027 through 2029. If the cost incurred by Windstream (or the successor tenant under a Windstream Lease) for Growth Capital Improvements in any calendar year exceeds the annual limit for such calendar year, Windstream (or such tenant, as the case may be) may submit such excess costs for reimbursement in any subsequent year and such excess costs shall be funded from the annual commitment amounts in

such subsequent period. In addition, to the extent that reimbursements for Growth Capital Improvements funded in any calendar year during the term is less than the annual limit for such calendar year, the unfunded amount in any calendar year will carry-over and may be added to the annual limits for subsequent calendar years, subject to an annual limit of $250 million in any calendar year, except that, during calendar year 2021, our combined total obligation to fund Growth Capital Improvements may exceed $250 million to the extent of any unfunded excess amounts from calendar year 2020. Accordingly, because we funded $84.7 million of the $125 million limit in 2020, we are committed to fund up to $265.3 million of Growth Capital Improvements in 2021.

Our primary sources of liquidity and capital resources are cash on hand, cash provided by operating activities (primarily ~~arising under~~from the ~~Master Lease with Windstream)~~Windstream Leases), available borrowings under our credit agreement by and among the Operating ~~Partnership’s senior secured revolving credit facility that matures April 24, 2020~~Partnership, CSL Capital, LLC and Uniti Group Finance 2019 Inc., the guarantors and lenders party thereto and Bank of America, N.A., as administrative agent and collateral agent (the ~~“Revolving Credit Facility”~~“Credit Agreement”), and proceeds from the issuance of debt and equity ~~securities.~~ securities.

As of ~~September 30, 2017,~~March 31, 2021, we had cash and cash equivalents of ~~$49.9~~$122.5 million and ~~$590~~approximately $400.0 million of ~~undrawn~~ borrowing ~~capacity~~availability under ~~the~~our Revolving Credit Facility. ~~On July 3, 2017,~~Subsequent to March 31, 2021, other than the redemption of the remaining 2023 Notes as described below, and $14.9 million of Growth Capital Improvements (see “Result of Operations—Revenues” above), there have been no material outlays of funds outside of our scheduled interest and dividend payments. Availability under our Revolving Credit Facility is subject to various conditions, including a maximum secured leverage ratio of 5.0:1. In addition, if we ~~closed the previously announced acquisitions of Southern Light and Hunt, using approximately $768 million in cash, including the payoff of existing indebtedness and unpaid transaction expenses.~~incur debt under our Revolving Credit Facility or otherwise such that our total leverage ratio exceeds 6.5:1, our Revolving Credit Facility would impose significant restrictions on our ability to pay dividends. See “—Dividends.”

Cash provided by operating activities was ~~$337.8~~$126.7 million and ~~$300.5~~$132.3 million for the ~~nine~~three months ended ~~September 30, 2017~~March 31, 2021 and ~~2016,~~2020, respectively.Cash provided by operating activities is primarily attributable to our leasing activities.

Cash used in investing activities was ~~$957.2~~$84.4 million and $75.1 million for the ~~nine~~three months ended ~~September 30, 2017, which was~~ March 31, 2021 and 2020, respectively, and is driven by the acquisitions of Southern Light ($635.9 million), Hunt ($127.9 million), NMS assets ($68.6 million), ground lease investments ($13.9 million), partially offset by a Tower Cloud working capital adjustment ($0.2 million), and capital expenditures, ~~($111.1 million),~~ primarily related to our Uniti Fiber and Uniti ~~Towers businesses.~~ ~~Cash used in investing activities was $508.7 million~~Leasing business for ~~the nine months ended September 30, 2016, which was driven by the acquisition~~deployment of ~~PEG ($316.1 million), the acquisition~~network assets.

~~As of September 30, 2017,~~ ~~under the terms of the purchase agreement with NMS,~~ ~~we have acquired 43 of the 105 towers, which were under development at the time of the NMS acquisition, for approximately $4.1 million.~~

Cash provided by financing activities was ~~$497.2~~$2.6 million for the ~~nine~~three months ended ~~September 30, 2017,~~March 31, 2021, which was primarily ~~represents the net~~driven by proceeds from the ~~sale~~issuance of ~~common stock through a public offering~~the 2029 Notes ($~~498.9 million) and proceeds from the 2024 Notes issued in May 2017 ($201.0 million), which were used to fund the acquisitions of Southern Light and Hunt,~~1.11 billion) and net borrowings under the Revolving Credit Facility ($~~160.0~~50.0 million), partially offset by the repayment of the 2023 Notes ($1.05 billion), dividend payments ($~~294.3~~35.0 million), ~~deferred~~payments for financing costs ~~related to the term loan repricing~~($22.9 million), payment of settlement obligation ($24.5 million), 2023 Notes tender premium payment ($17.6 million) and ~~2024 Notes issued in May 2017 ($28.5 million),~~ contingent consideration payments ($~~19.9~~3.0 million). Cash used in financing activities was $90.7 million for the three months ended March 31, 2020, which was primarily driven by the repayment of senior secured term loan B ($2.04 billion), net payments under the Revolving Credit Facility ($196.7 million), dividend payments ($42.5 million) and payments for financing costs ($47.8 million), partially offset by the proceeds from the issuance of the 2025 Secured Notes ($2.25 billion).

On February 2, 2021, Uniti Group LP, Uniti Group Finance 2019 Inc. and CSL Capital, LLC (the “Issuers”), as co-issuers, issued $1.11 billion aggregate principal ~~payments related~~of the 2029 Notes and used the net proceeds to fund the tender offer of substantially all outstanding 2023 Notes, of which $58.8 million remained outstanding as of March 31, 2021. On April 15, 2021, the Issuers redeemed the remaining outstanding principal amount of the 2023 Notes.

The 2029 Notes were issued at an issue price of 100% of their principal amount pursuant to an indenture, dated as of February 2, 2021 (the “2029 Notes Indenture”), among the Issuers, the guarantors named therein and Deutsche Bank Trust Company Americas, as trustee (the “Trustee”). The 2029 Notes mature on February 15, 2029 and bear interest at a rate of 6.500% per year. Interest on the 2029 Notes is payable on February 15 and August 15 of each year, beginning on August 15, 2021.

The Issuers may redeem the 2029 Notes, in whole or in part, at any time prior to February 15, 2024 at a redemption price equal to 100% of the principal amount of the 2029 Notes redeemed plus accrued and unpaid interest on the 2029 Notes, if any, to, but not including the redemption date, plus an applicable “make whole” premium described in the 2029 Indenture. Thereafter, the Issuers may redeem the 2029 Notes in whole or in part, at the redemption prices set forth in the 2029 Indenture. In addition, at any time on or prior to February 15, 2024, up to 40% of the aggregate principal amount of the 2029 Notes may be redeemed with the net cash proceeds of certain equity offerings, at a redemption price of 106.500% of the principal amount, plus accrued and unpaid interest, if any, to, but excluding, the redemption date; provided that at least 60% of aggregate principal amount of the originally issued 2029 Notes remains outstanding. Further, if certain changes of control of Uniti Group LP occur, holders of the 2029 Notes will have the right to require the Issuers to offer to repurchase their 2029 Notes at 101% of their principal amount plus accrued and unpaid interest, if any, to, but excluding, the repurchase date.

The 2029 Indenture contains customary high yield covenants limiting the ability of Uniti Group LP and its restricted subsidiaries to: incur or guarantee additional indebtedness; incur or guarantee secured indebtedness; pay dividends or distributions on, or redeem or repurchase, capital stock; make certain investments or other restricted payments; sell assets; enter into transactions with affiliates; merge or consolidate or sell all or substantially all of their assets; and create restrictions on the ability of the Issuers and their restricted subsidiaries to pay dividends or other amounts to the ~~Term Loan Facility ($15.8 million)~~Issuers. These covenants are subject to a number of limitations, qualifications and exceptions. The 2029 Indenture also contains customary events of default.

On April 20, 2021, the Issuers issued $570 million aggregate principal amount of 4.750% Senior Secured Notes due 2028 (the “New Notes”) and will use the net proceeds from the offering to fund the redemption in full of their outstanding 6.00% Senior Secured Notes due 2023 (the “2023 Secured Notes”) on May 6, 2021. On April 20, 2021, the Issuers deposited amounts sufficient to fund the redemption of the 2023 Secured Notes with the trustee and satisfied and discharged their respective obligations under the indenture governing the 2023 Secured Notes. See Note 16 – Subsequent Events to our Condensed Consolidated Financial Statements, included in this report at Part I, Item 1-Financial Statements for additional information.

We have an effective shelf registration statement on file with the SEC (the “Registration Statement”) to offer and sell various securities from time to time. Under the ~~Registration Statement,~~registration statement, we have established an at-the-market common stock offering program (the “ATM Program”) to sell shares of common stock having an aggregate offering price of up to ~~$250.0~~$250 million. During the quarter ended ~~September 30, 2017, no~~March 31, 2021, we did not make any sales ~~were made~~ under the ATM Program. This program ~~provides~~is intended to provide additional financial flexibility and an alternative mechanism to access the capital markets at an efficient cost as and when we need financing, including for ~~acquisitions. While we have not used the program to date, we currently intend to utilize the program when we believe the price we can obtain for our common stock is attractive~~acquisitions. In addition, our UPREIT structure enables us to acquire properties by issuing to sellers, as a form of consideration, limited partnership interests in our operating partnership, (commonly called “OP Units”). We believe that this structure will facilitate our ability to acquire individual properties and portfolios of properties by enabling us to structure transactions which will defer taxes payable by a seller while preserving our available cash for other purposes, including the possible payment of dividends. ~~We issued limited partnership interests as part of the acquisition consideration for the recently completed acquisitions of Hunt and Southern Light.~~

We anticipate continuing to invest in our network infrastructure across our Uniti Leasing and Uniti Fiber portfolios. We anticipate that we will partially finance these needs, as well as operating expenses (including our debt service obligations), from our cash on hand and ~~borrowing availability under the Revolving Credit Facility, combined with our~~ cash flows provided by operating ~~activities will be~~activities. As of March 31, 2021, we had $400.0 million in borrowing availability under our Revolving Credit Facility, however, we may need to access the capital markets to generate additional funds in an amount sufficient to fund our business operations, announced investment activities, capital expenditures, including reimbursement commitments for Growth Capital Improvements, debt service and distributions to our ~~shareholders over~~shareholders. We may also issue equity securities to repay debt and reduce our leverage ratio to be below 5.75 to 1.0 to obtain additional flexibility under our debt covenants, as described under “—Dividends.” In light of the ~~next twelve months. However, we may take advantage of opportunities to generate additional liquidity through~~COVID-19 pandemic and its effects on the global economy and capital markets, ~~transactions including, without limitation,~~we are closely monitoring the ~~ATM Program.~~ equity and debt markets and may seek to access them promptly if and when we determine market conditions are appropriate. Our debt covenants currently do not permit us to incur material additional debt.

The amount, nature and timing of any capital markets transactions will depend on: the impact the COVID-19 pandemic has on the global economy and capital markets, our operating performance and other circumstances; our then-current commitments and obligations; the amount, nature and timing of our capital requirements; and any limitations imposed by our current credit ~~arrangements; and overall market conditions.~~arrangements. These expectations are forward-looking and subject to a number of uncertainties and assumptions. If our expectations about our liquidity prove to be incorrect or we ~~could~~are unable to access the capital markets as we anticipate, we would be subject to a shortfall in liquidity in the future which could lead to a reduction in our capital expenditures and/or dividends and, in an extreme case, our ability to pay our debt service obligations. If this shortfall ~~may occur~~occurs rapidly and with little or no notice, ~~which would~~it could limit our ability to address the shortfall on a timely basis.

Co~~ntractual Obligations~~In addition to exploring potential capital markets transactions, the Company regularly evaluates market conditions, its liquidity profile, and various financing alternatives for opportunities to enhance its capital structure. If opportunities are favorable, the Company may refinance or repurchase existing debt. However, there can be no assurances that any debt refinancing would be on similar or more favorable terms than our existing arrangements. This would include the risk that interest rates could increase and/or there may be changes to our existing covenants.

If circumstances warrant, we may take measures to conserve cash as we anticipate that it will be more difficult for us to access the capital markets at attractive rates until such uncertainty is clarified.

We categorize our capital expenditures as either (i) success-based, (ii) maintenance, (iii) integration or (iv) corporate and non-network. We define success-based capital expenditures as those related to installing existing or anticipated contractual customer service orders. Maintenance capital expenditures are those necessary to keep existing network elements fully operational. Integration capital expenditures are those made specifically with respect to recent acquisitions that are essential to integrating acquired companies in our business. We anticipate continuing to invest in our network infrastructure across our Uniti Leasing and Uniti Fiber businesses and expect that cash on hand and cash flows provided by operating activities will be sufficient to support these investments. We have

Asthe right, but not the obligation (except for Growth Capital Improvements), to reimburse growth capital expenditures in certain of ~~September 30, 2017,~~our lease arrangements where we ~~had contractual obligations~~are the lessor.

Uniti’s total annual reimbursement commitments to Windstream for the Growth Capital Improvements under the Windstream Leases (and under separate equipment loan facilities) are limited to $225 million per year in 2021 through 2024; $175 million per year in 2025 and ~~commitments~~2026; and $125 million per year in 2027 through 2029. If the cost incurred by Windstream (or the successor tenant under a Windstream Lease) for Growth Capital Improvements in any calendar year exceeds the annual limit for such calendar year, Windstream (or such tenant, as ~~follows:~~the case may be) may submit such excess costs for reimbursement in any subsequent year and such excess costs shall be funded from the annual commitment amounts in such subsequent period. In addition, to the extent that reimbursements for Growth Capital Improvements funded in any calendar year during the term is less than the annual limit for such calendar year, the unfunded amount in any calendar year will carry-over and may be added to the annual limits for subsequent calendar years, subject to an annual limit of $250 million in any calendar year, except that, during calendar year 2021, our combined total obligation to fund Growth Capital Improvements may exceed $250 million to the extent of any unfunded excess amounts from calendar year 2020. Accordingly, because we funded $84.7 million of the $125 million limit in 2020, we are committed to fund up to $265.3 million of Growth Capital Improvements in 2021.

If circumstances warrant, we may need to take measures to conserve cash, which may include a suspension, delay or reduction in success-based capital expenditures. We continually assess our capital expenditure plans in light of developments the impact COVID-19 has on our business and that of our tenants and customers.

We ~~are~~have elected to be taxed as a REIT for U.S. federal income tax purposes. U.S. federal income tax law generally requires that a REIT distribute annually at least 90% of its REIT taxable income, without regard to the deduction for dividends paid and excluding net capital gains, and that it pay tax at regular corporate rates to the extent that it annually distributes less than 100% of its taxable income. WeSubject to the restrictions imposed by our 7.875% senior secured notes due 2025 (the “2025 Secured Notes”), in order to maintain our REIT status, we intend to make ~~regular quarterly~~ dividend payments of all or substantially all of our taxable income to holders of our common stock out of assets legally available for this purpose, if and to the extent authorized by our board of directors. Before we make any dividend payments, whether for U.S. federal income tax purposes or otherwise, we must first meet both our operating requirements and debt service obligations. If our cash available for distribution is less than our taxable income, we could be required to sell assets or borrow funds to make cash dividends or we may make a portion of the required dividend in the form of a taxable distribution of stock or debt ~~securities.~~securities.

~~On October 13, 2017, we paid, to shareholders of record as of the close of business on September 29, 2017, a~~The following table below sets out details regarding our cash ~~dividend~~dividends on our common ~~stock~~stock:

Any dividends must be declared by our Board of ~~$0.60 per share~~Directors, which will take into account various factors including our current and anticipated operating results, our financial position, REIT requirements, conditions prevailing in the market, restrictions in our debt documents and additional factors they deem appropriate. Dividend payments are not guaranteed, and our Board of Directors may decide, in its absolute discretion, at any time and for any reason, not to pay dividends or to change the ~~period July 1, 2017 through September 30, 2017.~~

~~On July 14, 2017, we~~amount paid ~~to shareholders of record~~ as dividends. In light of the ~~close~~ongoing COVID-19 pandemic, we may take further measures to conserve cash, which may include a suspension, delay or reduction in our dividend. In addition, until such time our consolidated net leverage ratio (as defined in the indenture governing the 2025 Secured Notes) is no greater than 5.75 to 1.0, our 2025 Secured Notes generally limit our ability to pay cash dividends in excess of 90% of our REIT taxable income, determined without regard to the dividends paid deduction and excluding any net capital gains.

We make certain judgments and use certain estimates and assumptions when applying accounting principles in the preparation of our Condensed Consolidated Financial Statements. The nature of the estimates and assumptions are material due to the levels of subjectivity and judgment necessary to account for highly uncertain factors or the susceptibility of such factors to change. We have identified the accounting for income taxes, revenue recognition, the impairment of property, plant and equipment, goodwill impairment and business ~~on June 30, 2017,~~combinations as critical accounting estimates, as they are the most important to our financial statement presentation and require difficult, subjective and complex judgments.

We believe the current assumptions and other considerations used to estimate amounts reflected in our accompanying Condensed Consolidated Financial Statements are appropriate. However, if actual experience differs from the assumptions and other considerations used in estimating amounts reflected in our Condensed Consolidated Financial Statements, the resulting changes could have a ~~cash dividend~~material adverse effect on our ~~common stock~~consolidated results of ~~$0.60 per share for~~operations and, in certain situations, could have a material adverse effect on our financial condition.

For further information on our critical accounting estimates, see “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and the ~~period from April 1, 2017 through June 30, 2017.~~

~~On April 14, 2017, we paid,~~notes to ~~shareholders~~our audited financial statements included in our Annual Report. As of ~~record as of the close of business on~~ March 31, ~~2017, a cash dividend on our common stock of $0.60 per share for the period from January 1, 2017 through March 31, 2017.~~

~~On January 13, 2017, we paid,~~2021, there has been no material change to ~~shareholders of record as of the close of business on December 30, 2016, a cash dividend on our common stock of $0.60 per share for the period from October 1, 2016 through December 31, 2016.~~

We categorize our capital expenditures as either (i) success-based, (ii) maintenance, or (iii) corporate and non-network. We define success-based capital expenditures as those which are tied to contractual obligations to customers or are discretionary in nature and are intended to add growth capacity to our existing network. Maintenance capital expenditures are those necessary to keep existing network elements fully operational. We anticipate continuing to invest in our network infrastructure across our Uniti Fiber and Uniti Towers portfolios, and expect that cash on hand, borrowings under our Revolving Credit Facility, and cash flows provided by operating activities will be sufficient to support these ~~investments.~~estimates.

New accounting rules and disclosures can impact our reported results and comparability of our financial statements. These matters are described in our Annual ~~Report on Form 10-K for the year ended December 31, 2016, filed with the SEC on February 23, 2017.~~

~~ASU 2017-12 is~~ ~~effective for annual periods beginning after December 15, 2018 and interim periods within those annual periods, and earlier adoption is permitted. The Company is currently evaluating the impacts the adoption of this accounting standard will have on our financial statements.~~

In ~~January 2017, the FASB issued ASU No. 2017-04,~~ ~~Intangibles - Goodwill and Other (Topic 350): Simplifying the Accounting for Goodwill Impairment~~ (“ASU 2017-04”), which removes the requirement to perform a hypothetical purchase price allocation to measure goodwill impairment. A goodwill impairment will now be the amount by which a reporting unit’s carrying value exceeds its fair value, not to exceed the carrying amount of goodwill. ASU 2017-04 is effective for annual and interim periods beginning January 1, 2020, with early adoption permitted, and applied prospectively. We adopted ASU 2017-04 effective January 1, 2017, and there was no material impact on our financial position, results of operations or cash flows.

~~In January 2017, the FASB issued ASU No. 2017-01,~~ ~~Business Combinations (Topic 805): Clarifying the Definition of a Business~~ (“ASU 2017-01”), in an effort to clarify the definition of a business with the objective of adding guidance to assist entities with evaluating whether transactions should be accounted for as acquisitions (or disposals) of assets or businesses. ASU 2017-01 is effective for fiscal years beginning after December 15, 2017, and interim periods within those fiscal years, with early adoption permitted. We adopted ASU 2017-01 effective January 1, 2017, with prospective application. As a result of the adoption of ASU 2017-01, the Company’s acquisition of NMS (~~see Note 3~~) was determined to be an asset acquisition. Transaction costs associated with asset acquisitions, which includes our real property interest investments, are now capitalized as opposed to be recorded as an expense as was required prior to adoption of ASU 2017-01.

~~In May 2014, the FASB issued ASU No. 2014-09,~~ ~~Revenue from Contracts with Customers~~ ~~(“ASU 2014-09”). This~~ update outlines a single comprehensive revenue recognition model for entities to follow in accounting for revenue from contracts with customers and supersedes most current revenue recognition guidance, including industry-specific guidance. The core principle of the revenue model is that an entity should recognize revenue for the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled to receive for those goods or services. ASU 2014-09 is effective for annual periods beginning after December 15, 2017 and interim periods within those annual periods. Early adoption is permitted for public companies for annual periods beginning after December 15, 2016. The Company intends to adopt the revenue recognition guidance on January 1, 2018 using the modified retrospective approach. The Company’s implementation efforts include reviewing revenue contracts and the identification of revenue within the scope of the guidance. As ASU 2014-09 does not impact lessor accounting, the Company believes our accounting for leasing revenues will not be significantly impacted. While the Company currently has not identified any material changes in the timing of revenue recognition, we do anticipate an impact to our Fiber Infrastructure costs, primarily related to the capitalization of commission expense under ASU 2014-09, and are currently in the process of quantifying such impacts.

when an entity should classify those cash receipts and payments into one class of cash flows on the basis of predominance. The new guidance is effective for the fiscal years beginning after December 15, 2017, and interim periods within those fiscal years, and early adoption is permitted. The Company is currently evaluating the impact the adoption of this accounting standard will have on our financial statements.

As of the date of this Quarterly Report on Form 10-Q, we do not have any off-balance sheet arrangements.

There have been no material changes from the information reported under Item 7A of our Annual ~~Report on Form 10-K for the year ended December 31, 2016, filed with the SEC on February 23, 2017.~~Report.

We have established disclosure controls and procedures, as such term is defined in Rule 13a-15(e) under the Securities Exchange Act of 1934 (the “Exchange Act”), that are designed to ensure that information required to be disclosed by us in the reports that we file or submit under the Exchange Act is recorded, processed, summarized and reported, within the time periods specified in the SEC’s rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed by us in the reports that we file or submit under the Exchange Act is accumulated and communicated to management, including our principal executive and principal financial officers as appropriate, to allow timely decisions regarding required ~~disclosure.~~disclosure.

Our management, with the participation of our principal executive officer and principal financial officer, evaluated the effectiveness of our disclosure controls and procedures as of ~~September 30, 2017. Based~~March 31, 2021, and based on this evaluation, our principal executive officer and principal financial officer concluded that our disclosure controls and procedures were not effective as of ~~September 30, 2017.~~March 31, 2021, due to the material weakness in our internal control over financial reporting that was disclosed in our Annual Report.

As disclosed in “Part II. Item 9A. Controls and Procedures” in our Annual Report, during the fourth quarter of 2020, we identified a material weakness in our internal control over financial reporting due to ineffective controls over the annual goodwill impairment assessment, specifically, the control activities over the determination of the carrying value to be used in the assessment of goodwill impairment did not operate effectively due to an insufficient complement of qualified personnel. As of March 31, 2021, management is continuing to implement the remediation plan as disclosed in “Part II. Item 9A. Controls and Procedures” in our Annual Report, which is described below.

Management believes that our condensed consolidated financial statements included in this Quarterly Report on Form 10-Q have been prepared in accordance with US GAAP. Our principal executive officer and principal financial officer have certified that, based on such officer’s knowledge, the condensed consolidated financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the Company as of, and for, the periods presented in this report.

There were no changes in our internal control over financial reporting, as such term is defined in Rule 13a-15(f) under the Exchange Act, that occurred during the quarter ended ~~September 30, 2017~~March 31, 2021 that has materially affected, or is reasonably likely to materially affect, our internal control over financial ~~reporting.~~reporting.

Management is continuing to implement the remediation plan as disclosed in “Part II. Item 9A. Controls and Procedures” in our Annual Report, to ensure that the deficiency contributing to the material weakness is remediated such that this control will operate effectively. We believe that these actions, and the improvements we expect to achieve as a result, will effectively remediate the material weakness. However, the material weakness in our internal control over financial reporting will not be considered remediated until management has concluded, through testing, that this control is designed effectively. We expect that the remediation of this material weakness will be completed later in fiscal 2021.

~~In the ordinary course~~A description of legal proceedings can be found in Note 14 - Commitments and Contingencies to our ~~business, we are subject to claims~~Condensed Consolidated Financial Statements, included in this report at Part I, Item 1-Financial Statements, and administrative proceedings, none of which we believe are material or would be expected to have, individually or in the aggregate, a material adverse effect on our business, financial condition, cash flows or results of operations.is incorporated by reference into this Item 1.

There have been no material changes to the risk factors affecting our business that were discussed in Part I, “Item 1A. Risk Factors” in our Annual ~~Report on Form 10-K for the year ended December 31, 2016 filed with the SEC on February 23, 2017.~~Report.

The table below provides information regarding shares withheld from Uniti employees to satisfy minimum statutory tax withholding obligations arising from the vesting of restricted stock granted under the Uniti Group Inc. 2015 Equity Incentive Plan. The shares of common stock withheld to satisfy tax withholding obligations may be deemed purchases of such shares required to be disclosed pursuant to this Item 2.2.

⁽¹⁽¹⁾⁾ The average price paid per share is the ~~weighted-average~~weighted average of the fair market prices at which we calculated the number of shares withheld to cover tax withholdings for the employees.

~~None~~As previously disclosed on March 30, 2021, Blake Schuhmacher informed the Company of his intention to resign from his position as Senior Vice President - Chief Accounting Officer of the Company. Mr. Schuhmacher’s resignation will be effective May 11, 2021.

On May 4, 2021, the Board of Directors (the “Board”) of the Company appointed Travis Black to serve, effective upon Mr. Schuhmacher’s resignation, as the Company’s interim principal accounting officer, as such term is used in the Securities Exchange Act of 1934, as amended, and the rules and regulations promulgated thereunder. Mr. Black, 39, has served as the Company’s Director of Accounting and SEC Reporting since July 2015. Mr. Black is a Certified Public Accountant and holds a BS in Accounting from the University of Tennessee and an MBA from the University of Memphis.

There is no arrangement or understanding between Mr. Black and any other person pursuant to which Mr. Black was selected as an officer, nor is he party to any related party transactions required to be reported pursuant to Item 404(a) of Regulation S-K. Mr. Black has no family relationships with any of the Company’s directors or executive officers.

Mr. Black will retain his present title and continue to serve in his present position during his tenure as the interim principal accounting officer of the Company.

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

Maryland	46-5230630
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)
10802 Executive Center Drive Benton Building Suite 300 Little Rock, Arkansas	72211
(Address of principal executive offices)	(Zip Code)


Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common Stock	UNIT	The NASDAQ Global Select Market

Large accelerated filer	☒	Accelerated filer	☐

Non-accelerated filer	☐ ~~(Do not check if a smaller reporting company)~~	Smaller reporting company	☐
		Emerging growth company	☐

		Page
PART I.	FINANCIAL INFORMATION

Item 1.	Financial Statements (Unaudited)	5
	Uniti Group Inc.
	Condensed Consolidated Balance Sheets	5
	Condensed Consolidated Statements of Income (Loss)	6
	Condensed Consolidated Statements of Comprehensive Income (Loss)	7
	Condensed Consolidated Statements of Shareholders’ Deficit	8
	Condensed Consolidated Statements of Cash Flows	9
	Notes to Condensed Consolidated Financial Statements	10
	1.Organization and Description of Business	10
	2.Basis of Presentation and Summary of Significant Accounting Policies	10
	3.Revenues	12
	4.Leases	14
	5.Assets and Liabilities Held for Sale	17
	6.Investments in Unconsolidated Entities	18
	7.Fair Value of Financial Instruments	19
	8.Property Plant and Equipment	21
	9.Derivative Instruments and Hedging Activities	21
	10.Goodwill and Intangible Assets	23
	11.Notes and Other Debt	24
	12.Earnings Per Share	27
	13.Segment Information	28
	14.Commitments and Contingencies	30
	15.Accumulated Other Comprehensive (Loss) Income	32
	16.Subsequent Events	32

Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	2934
	1.Overview	34
	2.Results of Operations	36
	3.Non-GAAP Financial Measures	43
	4.Liquidity and Capital Resources	45
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	4350
Item 4.	Controls and Procedures	4350

PART II.	OTHER INFORMATION

Item 1.	Legal Proceedings	4452
Item 1A.	Risk Factors	4452
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	4452
Item 3.	Defaults Upon Senior Securities	4452
Item 4.	Mine Safety Disclosures	4452
Item 5.	Other Information	4452
Item 6.	Exhibits	4553

Signatures		4654


	Three Months Ended September 30,					Nine Months Ended September 30,
(Thousands)	2017		2016			2017			2016
Net income (loss)	$	4,835	$	(2,343	)	$	(31,625	)	$	4,158
Other comprehensive income (loss):
Unrealized gain (loss) on derivative contracts		1,789		(1,870	)		(4,340	)		(63,331	)
Changes in foreign currency translation		76		(101	)		5,074			(180	)
Other comprehensive income (loss)		1,865		(1,971	)		734			(63,511	)
Comprehensive income (loss)		6,700		(4,314	)		(30,891	)		(59,353	)
Comprehensive income attributable to noncontrolling interest		150		-			150			-
Comprehensive income (loss) attributable to common shareholders	$	6,550	$	(4,314	)	$	(31,041	)	$	(59,353	)

	(thousands)
Property, plant and equipment	$	36,417
Accounts receivable		2,826
Other assets		1,623
Intangible assets		52,437
Accounts payable, accrued expenses and other liabilities		(8,895	)
Intangible liabilities		(3,440	)
Deferred income taxes		(18,403	)
Total purchase consideration	$	62,565

(Thousands)	Contract Assets		Contract Liabilities
Balance at December 31, 2020	$	3,462	$	18,601
Balance at March 31, 2021	$	2,460	$	15,949

	(thousands)
Property, plant and equipment	$	279,658
Cash and cash equivalents		1,992
Accounts receivable		11,139
Goodwill		318,007
Intangible assets		160,100
Other assets		1,287
Accounts payable, accrued expenses and other liabilities		(19,546	)
Deferred revenue		(38,134	)
Deferred income taxes		(9,004	)
Capital lease obligations		(3,189	)
Total purchase consideration	$	702,310

(Thousands)	March 31, 2021⁽¹⁾
2021	$	551,099
2022		748,612
2023		750,261
2024		750,839
2025		751,855
Thereafter		3,651,772
Total lease receivables	$	7,204,438
⁽¹⁾ Total future minimum lease payments to be received include $6.2 billion relating to the Windstream Leases.

(Thousands)	March 31, 2021			December 31, 2020
Land	$	26,596		$	26,596
Building and improvements		335,534			335,495
Poles		270,102			266,758
Fiber		3,042,228			2,994,465
Equipment		428			421
Copper		3,881,801			3,850,988
Conduit		89,776			89,773
Tower assets		1,397			1,397
Finance lease assets		32,660			32,660
Other assets		10,671			10,425
		7,691,193			7,608,978
Less: accumulated depreciation		(5,268,648	)		(5,222,731	)
Underlying assets under operating leases, net⁽¹⁾	$	2,422,545		$	2,386,247
⁽¹⁾Includes $4.5 million assets under operating leases in Held for Sale as of March 31, 2021.

	(thousands)
Property, plant and equipment	$	59,639
Cash and cash equivalents		2,281
Accounts receivable		4,905
Goodwill		92,275
Intangible assets		73,000
Other assets		2,875
Accounts payable, accrued expenses and other liabilities		(2,349	)
Deferred revenue		(3,800	)
Deferred income taxes		(40,391	)
Capital lease obligations		(164	)
Total purchase consideration	$	188,271

(Thousands)	Location on Condensed Consolidated Balance Sheets	March 31, 2021			December 31, 2020
Operating leases
ROU assets, net⁽¹⁾	Other assets, net	$	94,210		$	97,850
Lease liabilities⁽²⁾	Accounts payable, accrued expenses and other liabilities, net		68,379			71,483

Finance leases
ROU asset, gross⁽³⁾	Property, plant and equipment, net	$	125,313		$	128,098
Lease liabilities⁽⁴⁾	Finance lease obligations		47,646			48,724

Weighted-average remaining lease term
Operating leases		12.5 years			12.2 years
Finance leases		13.2 years			13.3 years

Weighted-average discount rate
Operating leases			9.8	%		9.9	%
Finance leases			8.0	%		8.0	%
⁽¹⁾ Includes $18.5 million ROU assets in Held for Sale as of March 31, 2021
⁽²⁾ Includes $16.9 million lease liabilities in Held for Sale as of March 31, 2021
⁽³⁾ Includes $54.0 million finance lease assets in Held for Sale as of March 31, 2021
⁽⁴⁾ Includes $32.8 million finance lease obligations in Held for Sale as of March 31, 2021

	(thousands)
Property, plant and equipment	$	163,680
Cash and cash equivalents		14,346
Accounts receivable		3,043
Goodwill		117,032
Intangible assets		116,218
Other assets		2,595
Accounts payable, accrued expenses and other liabilities		(16,782	)
Deferred revenue		(23,900	)
Deferred income taxes		(24,866	)
Capital lease obligations		(6,750	)
Total purchase consideration	$	344,616

(Thousands)	Operating Leases⁽¹⁾			Finance Leases⁽²⁾
2021	$	14,952		$	5,045
2022		17,567			6,622
2023		15,003			6,601
2024		10,810			6,236
2025		6,828			5,184
Thereafter		35,903			45,114
Total undiscounted lease payments	$	101,063		$	74,802
Less: imputed interest		(32,684	)		(27,156	)
Total lease liabilities	$	68,379		$	47,646
⁽¹⁾ Includes $16.9 million lease liabilities in Held for Sale as of March 31, 2021
⁽²⁾ Includes $32.8 million finance lease obligations in Held for Sale as of March 31, 2021

(Thousands)	Sublease Rentals
2021	$	6,219
2022		8,746
2023		8,799
2024		8,851
2025		8,904
Thereafter		124,715
Total	$	166,234

	(thousands)
Property, plant and equipment	$	293,030
Cash and cash equivalents		7,003
Accounts receivable		6,584
Goodwill		145,054
Intangible assets		38,000
Other assets		5,161
Accounts payable, accrued expenses and other liabilities		(8,643	)
Deferred revenue		(12,700	)
Capital lease obligations		(49,195	)
Total purchase consideration	$	424,294

(Thousands)	Total		Quoted Prices in Active Markets (Level 1)		Prices with Other Observable Inputs (Level 2)		Prices with Unobservable Inputs (Level 3)
At September 30, 2017
Liabilities
Senior secured term loan B - variable rate, due October 24, 2022	$	1,935,245	$	-	$	1,935,245	$	-
Senior secured notes - 6.00%, due April 15, 2023		523,188		-		523,188		-
Senior unsecured notes - 8.25%, due October 15, 2023		979,575		-		979,575		-
Senior unsecured notes - 7.125%, due December 15, 2024		505,500		-		505,500		-
Senior secured revolving credit facility, variable rate, due April 24, 2020		159,984		-		159,984		-
Derivative liability		10,442		-		10,442		-
Contingent consideration		104,117		-		-		104,117
Total	$	4,218,051	$	-	$	4,113,934	$	104,117

(Thousands)		December 31, 2016				Transfers into Level 3				(Gain)/Loss included in earnings				Settlements				September 30, 2017				December 31, 2020				Transfers into Level 3				(Gain)/Loss included in earnings				Settlements				March 31, 2021
Contingent consideration		$	98,600			$	16,425			$	9,091			$	(19,999	)		$	104,117			$	2,957			$	-			$	22			$	(2,979	)		$	-

(Thousands)	Depreciable Lives			September 30, 2017			December 31, 2016				Depreciable Lives			March 31, 2021			December 31, 2020
Land	Indefinite			$	26,898		$	26,833			Indefinite			$	27,936		$	27,945
Building and improvements	3 - 40 years				324,692			318,967			3 - 40 years				351,351			351,305
Real property interests	50 - 99 years				26,782			12,265
Poles	13 - 40 years				242,248			234,393			30 years				270,102			266,758
Fiber	7 - 40 years				2,587,647			2,243,822			30 years				3,796,553			3,737,372
Equipment	5 - 7 years				200,542			130,945			5 - 7 years				306,931			298,912
Copper	7 - 40 years				3,626,505			3,538,566			20 years				3,881,801			3,850,987
Conduit	13 - 47 years				91,179			90,540			30 years				89,776			89,773
Tower assets	20 - 49 years				59,162			4,307			20 years				8,571			8,571
Capital lease assets		(1	)		97,283			89,723
Finance lease assets												(1	)		71,318			74,103
Other assets	15 - 20 years				6,806			5,299			15 - 20 years				10,675			10,553
Corporate assets	3 - 7 years				2,888			2,731			3 - 7 years				13,628			13,475
Construction in progress		(1	)		126,082			52,685				(1	)		68,719			47,086
					7,418,714			6,751,076							8,897,361			8,776,840
Less accumulated depreciation					(4,381,245	)		(4,081,039	)						(5,568,122	)		(5,503,487	)
Net property, plant and equipment				$	3,037,469		$	2,670,037						$	3,329,239		$	3,273,353
(1) See our Annual Report for property, plant and equipment accounting policies.										(1) See our Annual Report for property, plant and equipment accounting policies.

Offsetting of Derivative Assets and Liabilities (Thousands)	Gross Amounts of Recognized Assets or Liabilities		Gross Amounts Offset in the Condensed Consolidated Balance Sheets			Net Amounts of Assets or Liabilities presented in the Condensed Consolidated Balance Sheets
At March 31, 2021
Assets
Interest rate swaps	$	23,602	$	(23,602	)	$	-
Total	$	23,602	$	(23,602	)	$	-

Liabilities
Interest rate swaps	$	43,510	$	(23,602	)	$	19,908
Total	$	43,510	$	(23,602	)	$	19,908

	Nine Months Ended September 30, 2017
(Thousands)	Leasing		Fiber Infrastructure		Towers			Consumer CLEC		Corporate			Subtotal of Reportable Segments
Revenues	$	512,893	$	136,158	$	6,679		$	13,966	$	-		$	669,696

Adjusted EBITDA	$	511,803	$	52,533	$	(1,075	)	$	3,514	$	(15,265	)	$	551,510
Less:
Interest expense														227,235
Depreciation and amortization		261,037		50,618		3,505			1,955		289			317,404
Other expense														9,638
Transaction related costs														32,213
Stock-based compensation														5,621
Income tax benefit														(8,976	)
Net loss													$	(31,625	)

Capital expenditures⁽¹⁾	$	-	$	103,497	$	89,984		$	-	$	46		$	193,527

	Nine Months Ended September 30, 2016
(Thousands)	Leasing		Fiber Infrastructure		Towers			Consumer CLEC		Corporate			Subtotal of Reportable Segments
Revenues	$	506,945		38,995		271			17,277	$	-		$	563,488

Adjusted EBITDA	$	505,912	$	14,773	$	(857	)	$	3,875	$	(10,678	)	$	513,025
Less:
Interest expense														204,607
Depreciation and amortization		257,059		15,448		216			2,443		282			275,448
Other expense														-
Transaction related costs														24,435
Stock-based compensation														3,478
Income tax expense														899
Net income													$	4,158

Capital expenditures⁽¹⁾	$	-	$	10,278	$	8,771		$	-	$	155		$	19,204

(Thousands)	Currency Translation Adjustment			Changes in Fair Value of Effective Cash Flow Hedge			Total
Beginning balance at December 31, 2016	$	(267	)	$	(6,102	)	$	(6,369	)
Other comprehensive income (loss) before reclassifications		5,074			(20,591	)		(15,517	)
Amounts reclassified from accumulated other comprehensive income		-			16,251			16,251
Net other comprehensive income (loss)		4,807			(10,442	)		(5,635	)
Less: Other comprehensive income attributable to noncontrolling interest		2			41			43
Ending balance at September 30, 2017	$	4,805		$	(10,483	)	$	(5,678	)

	Operating Metrics
	As of March 31,
	2021		2020		% Increase / (Decrease)
Operating metrics:
Leasing:
Fiber strand miles		4,550,000		4,300,000	5.8%
Copper strand miles		230,000		230,000	0.0%
Fiber Infrastructure:
Fiber strand miles		2,490,000		2,050,000	21.5%
Customer connections		26,315		22,175	18.7%
Towers:
United States towers		-		703	(100.0%)
Consumer CLEC:
Customer connections		-		226	(100.0%)

(Thousands)	Success Based		Maintenance		Integration		Non-Network		Total
Capital expenditures:
Leasing	$	472	$	-	$	-	$	-	$	472
Growth capital improvements		42,725		-		-		-		42,725
Fiber Infrastructure		38,788		1,976		37		379		41,180
Total capital expenditures	$	81,985	$	1,976	$	37	$	379	$	84,377

	Payments Due by Period
(millions)	Less than 1 Year		1-3 Years		3-5 Years		More than 5 Years		Total
Long-term debt^(a)	$	21	$	42	$	42	$	4,247	$	4,352
Interest payments on long-term debt obligations^(b)		252		501		498		280		1,531
Operating leases		15		19		8		17		59
Capital Leases		8		16		13		56		93
Network deployment^(c)		52		-		-		-		52
Total projected obligations and commitments^(d)	$	348	$	578	$	561	$	4,600	$	6,087

Period	Payment Date	Cash Dividend Per Share		Record Date
October 1, 2020 - December 31, 2020	January 4, 2021	$	0.15	December 15, 2020
January 1, 2021 - March 31, 2021	April 16, 2021	$	0.15	April 1, 2021

Period	Total Number of Shares Purchased		Average Price Paid per Share⁽¹⁾		Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs		Maximum Number of Shares that May Yet Be Purchased Under the Plans or Programs
July 1, 2017 to July 31, 2017		1,335	$	26.26		—		—
August 1, 2017 to August 31, 2017		703		19.30		—		—
September 1, 2017 to September 30, 2017		—		—		—		—
Total		2,038	$	23.86		—		—

Exhibit Number		Description

4.1*4.1		~~Fifth Supplemental~~ Indenture, dated ~~as of August 11, 2017,~~February 2, 2021, by and among Uniti Group LP, Uniti ~~Fiber Holdings~~Group Finance 2019 Inc., and CSL Capital, LLC, as Issuers, the guarantors ~~named therein,~~party thereto and ~~Wells Fargo~~Deutsche Bank ~~National Association,~~Trust Company Americas, as trustee, ~~relating to~~governing the ~~7.125%~~6.500% Senior Notes due ~~2024.~~2029 (incorporated by reference to Exhibit 4.1 to the Company’s Current Report on Form 8-K dated and filed with the SEC as of February 2, 2021 (File No. 001-36708))

31.1*4.2		Form of 6.500% Senior Notes due 2029 (included in Exhibit 4.1) (incorporated by reference to Exhibit 4.2 to the Company’s Current Report on Form 8-K dated and filed with the SEC as of February 2, 2021 (File No. 001-36708))

4.3		Fifteenth Supplemental Indenture, dated February 2, 2021, to the Indenture dated April 24, 2015 by and among Uniti Group LP, Uniti Group Finance 2019 Inc. and CSL Capital, LLC, as Issuers, the guarantors party thereto and Deutsche Bank Trust Company Americas, as trustee, governing the 8.25% Senior Notes due 2023 (incorporated by reference to Exhibit 4.3 to the Company’s Current Report on Form 8-K dated and filed with the SEC as of February 2, 2021 (File No. 001-36708))

4.4		Indenture, dated April 20, 2021, by and among Uniti Group LP, Uniti Group Finance 2019 Inc. and CSL Capital, LLC, as Issuers, the guarantors party thereto and Deutsche Bank Trust Company Americas, as trustee and collateral agent, governing the 4.750% Senior Secured Notes due 2028. (incorporated by reference to Exhibit 4.1 to the Company’s Current Report on Form 8-K dated and filed with the SEC as of April 20, 2021 (File No. 001-36708))

4.5		Form of 4.750% Senior Secured Notes due 2028 (included in Exhibit 4.4) (incorporated by reference to Exhibit 4.2 to the Company’s Current Report on Form 8-K dated and filed with the SEC as of April 20, 2021 (File No. 001-36708))

31.1*		Certification of Principal Executive Officer Pursuant to Rules 13a-14(a) and 15d-14(a) under the Securities Exchange Act of 1934, as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

31.2*		Certification of Principal Financial Officer Pursuant to Rules 13a-14(a) and 15d-14(a) under the Securities Exchange Act of 1934, as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

32.1*		Certification of Principal Executive Officer Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

32.2*		Certification of Principal Financial Officer Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

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		UNITI GROUP INC.

Date:	~~November 2, 2017~~May 10, 2021	/s/ Mark A. Wallace
		Mark A. Wallace Executive Vice President – Chief Financial Officer and Treasurer (Principal Financial Officer)

Date:	~~November 2, 2017~~May 10, 2021	/s/ Blake Schuhmacher
		Blake Schuhmacher Senior Vice President – Chief Accounting Officer (Principal Accounting Officer)