Uniti (UNIT) 8-K Entry into a Material Definitive Agreement

Exhibit 99.2

Uniti Group Inc.’s

Unaudited Pro Forma Combined Financial Data

The following unaudited pro forma consolidated financial statements present Uniti Group Inc.’s (“Uniti” or the “Company”) unaudited pro forma combined statements of income for the three months ended March 31, 2017 and the year ended December 31, 2016, and its unaudited pro forma combined balance sheet as of March 31, 2017.  These statements have been derived from (a) the historical financial statements of Uniti for the year ended December 31, 2016, which includes the results of PEG Bandwidth, LLC (“PEG”) from the May 2, 2016 acquisition date to December 31, 2016 and the results of Tower Cloud, Inc. (“Tower Cloud”) from the August 31, 2016 acquisition date to December 31, 2016; (b) the historical financial statements of PEG for the period from January 1, 2016 to May 1, 2016; (c) the historical financial statements of Tower Cloud for the period from January 1, 2016 to August 31, 2016; and (d) the historical financial statements of Southern Light, LLC (“Southern Light”) as of and for the three months ended March 31, 2017 and the year ended December 31, 2016.

The following unaudited pro forma combined financial statements give effect to the acquisition of Southern Light and the related transactions, including: (i) an issuance of $200 million of senior unsecured debt securities and approximately $517.5 million of common stock (19.5 million shares of the Company’s common stock, $0.0001 par value (“Common Stock”), at a price, prior to underwriting discounts, of $26.50 per share) to fund the cash portion of the Southern Light purchase consideration and for other general corporate purposes and (ii) issuance of 2.5 million Operating Partnership units (“OP Units”), exchangeable subject to certain conditions on a 1:1 basis for common stock (or cash equivalent value, at Uniti’s election), for purchase consideration to Southern Light equity holders.  Additionally, the unaudited pro forma combined financial statements for the year ended December 31, 2016 give effect to the 2016 acquisitions of PEG and Tower Cloud and the related transactions, including: (i) revolving credit facility borrowings and related interest expense to fund the cash portion of the purchase consideration, (ii) issuance of 2.9 million shares of Common Stock for purchase consideration and (iii) issuance of 87,500 shares of the Company’s 3% Series A Convertible Preferred Stock, liquidation preference $1,000 per share (the “Convertible Preferred Stock”), for purchase consideration in the PEG acquisition.  The unaudited pro forma combined statement of income assumes the purchases of Southern Light, PEG and Tower Cloud (the “Acquisitions”) occurred on January 1, 2016, and the unaudited pro forma combined balance sheet assumes the Southern Light Acquisition occurred on March 31, 2017.

The pro forma adjustments are based on currently available information and assumptions we believe are reasonable, factually supportable, directly attributable to the Acquisitions, and for the purposes of the pro forma combined financial statements, are expected to have a continuing impact on us. The pro forma financial statements do not reflect other transactions since January 1, 2016, including our issuance of additional debt securities during 2016, the repricings of our term loans or other acquisitions including the completed acquisitions of Network Management Holdings, LTD (“NMS”) and Hunt Telecommunications, LLC (“Hunt”), for which financial statements and pro forma financial statements are not required.

Our unaudited pro forma combined financial statements were prepared in accordance with Article 11 of Regulation S-X, using the assumptions set forth in the notes to our unaudited pro forma combined financial statements.  The following unaudited pro forma combined financial statements are presented for illustrative purposes only and do not purport to reflect the results we may achieve in future periods or the historical results that would have been obtained had the Acquisitions occurred on January 1, 2016 or had the Southern Light Acquisition occurred as of March 31, 2017, as the case may be.  Our unaudited pro forma combined financial statements also do not give effect to the potential impact of final purchase

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accounting adjustments, current financial conditions, any anticipated synergies, operating efficiencies, costs savings, or integration costs that may result from the transactions described above.

Our unaudited pro forma combined financial statements are derived from, and should be read in conjunction with the historical financial statements of Uniti, Southern Light, PEG and Tower Cloud and accompanying notes filed herewith or previously filed with the SEC.

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Uniti Group Inc.

Unaudited Pro Forma Balance Sheet

As of March 31, 2017

	Historical
(Thousands, except par value)	Uniti			Southern Light		Pro Forma Adjustments				Pro Forma Combined
Assets:
Property, plant and equipment, net	$	2,672,349		$	208,349	$	12,133		(A) (T)	$	2,892,831
Cash and cash equivalents	68,726			73		82,427			(C) (T)	151,226
Accounts receivable, net	17,236			12,944		—				30,180
Goodwill	262,086			—		256,780			(A)	518,866
Intangible assets, net	214,061			—		255,300			(A)	469,361
Straight-line revenue receivable	33,406			—		—				33,406
Other assets	12,813			4,610		(634		)	(B)	16,789
Total Assets	$	3,280,677		$	225,976	$	606,006			$	4,112,659
Liabilities, Convertible Preferred Stock and Shareholders’ Deficit:
Liabilities:
Accounts payable, accrued expenses and other liabilities	$	56,023		$	17,338	$	—			$	73,361
Accrued interest payable	65,715			185		(185		)	(C)	65,715
Deferred revenue	293,879			33,998		(3,998		)	(A)	323,879
Derivative liability	1,536			—		—				1,536
Dividends payable	94,810			—		—				94,810
Deferred income taxes	47,048			—		—				47,048
Capital lease obligations	54,068			2,519		—				56,587
Contingent consideration	90,719			—		—				90,719
Notes and other debt, net	4,003,792			94,124		105,876			(C) (T)	4,203,792
Total liabilities	4,707,590			148,164		101,693				4,957,447
Convertible Preferred Stock, Series A, $0.0001 par value, 88 shares authorized, issued and outstanding, $87,500 liquidation value	81,296			—		—				81,296
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: 175,295 shares at March 31, 2017	16			—		2			(D)	18
Additional paid-in capital	141,503			—		517,498			(D)	659,001
Member’s equity	—			77,314		(77,314		)	(A)	—
Accumulated other comprehensive loss	3,072			498		(498		)	(A)	3,072
Distributions in excess of accumulated earnings	(1,652,800		)	—		—				(1,652,800		)
Total Uniti shareholders’ deficit	(1,508,209		)	77,812		439,688				(990,709		)
Noncontrolling Interests - operating partnership units	—			—		64,625			(D)	64,625
Total shareholders’ deficit	(1,508,209		)	77,812		504,313				(926,084		)
Total Liabilities, Convertible Preferred Stock, and Shareholders’ Deficit	$	3,280,677		$	225,976	$	606,006			$	4,112,659

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Uniti Group Inc.

Unaudited Pro Forma Statement of Income

Three Months Ended March 31, 2017

	Historical
(Thousands, except per share data)	Uniti			Southern Light			Pro FormaAdjustments				Pro FormaCombined
Revenues:
Leasing	$	170,306		$	—		$	—			$	170,306
Fiber Infrastructure	34,812			21,967			—				56,779
Towers	1,428			—			—				1,428
Consumer CLEC	4,927			—			—				4,927
Total revenues	211,473			21,967			—				233,440
Costs and Expenses:
Interest expense	73,365			974			2,589			(Q) (T)	76,928
Depreciation and amortization	101,361			6,521			2,256			(G) (T)	110,138
General and administrative expense	13,978			5,967			2			(T)	19,947
Operating expenses	22,125			5,745			—				27,870
Other expenses, net	11,339			(153		)	168			(B) (T)	11,354
Transaction related costs	9,684			717			(4,183		)	(I)	6,218
Total costs and expenses	231,852			19,771			832				252,455
(Loss) income before income taxes	(20,379		)	2,196			(832		)		(19,015		)
Income tax expense (benefit)	(379		)	—			535			(O)	156
Net (loss) income	(20,000		)	2,196			(1,367		)		(19,171		)
Net loss attributable to noncontrolling interests	—			—			(274		)	(R)	(274		)
Net (loss) income available for shareholders	(20,000		)	2,196			(1,093		)		(18,897		)
Participating securities’ share in earnings	(387		)	—			—				(387		)
Dividends declared on convertible preferred stock	(656		)	—			—				(656		)
Amortization of discount on convertible preferred stock	(745		)	—			—				(745		)
Net (loss) income applicable to common shareholders	$	(21,788	)	$	2,196		$	(1,093	)		$	(20,685	)
(Loss) earnings per common share:
Basic	$	(0.14	)								$	(0.12	)
Diluted	$	(0.14	)								$	(0.12	)
Weighted-average number of common shares outstanding
Basic	155,184						20,019			(S)	175,203
Diluted	155,184						20,019			(S)	175,203

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Uniti Group Inc.

Unaudited Pro Forma Statement of Income

Year Ended December 31, 2016

	Historical										Historical							Historical
(Thousands, except per share data)	Uniti			PEG Bandwidth, LLCJanuary 1 - May 1, 2016			Pro Forma PEGAdjustments				Tower Cloud, Inc. January 1 - August 31, 2016			Pro Forma Tower Cloud Adjustments				Southern Light			Pro Forma Southern Light Adjustments				Pro FormaCombined
Revenues:
Leasing	$	677,368		$	—		$	—			$	—		$	—			$	—		$	—			$	677,368
Fiber Infrastructure	70,568			27,302			(73		)	(E)	27,701			(56		)	(E)	84,251			—				209,693
Consumer CLEC	22,472			—			—				—			—				—			—				22,472
Total revenues	770,408			27,302			(73		)		27,701			(56		)		84,251			—				909,533
Costs and Expenses:
Interest expense	275,394			3,250			175			(F)	3,119			487			(N)	3,370			11,193			(Q) (T)	296,988
Depreciation and amortization	375,970			11,113			660			(G)	13,258			3,069			(G)	23,641			9,039			(G) (T)	436,750
General and administrative expense	35,402			6,042			(214		)	(H)	5,990			(792		)	(H)	21,794			16			(T)	68,238
Operating expenses	49,668			10,246			(11		)	(H)	13,462			—				21,216			86			(T)	94,667
Other expenses, net	—			29			—				1,353			—				(536		)	662			(B) (T)	1,508
Transaction related costs	33,669			2,820			(14,021		)	(I)	1,356			(10,492		)	(I)	—			(175		)	(I)	13,157
Total costs and expenses	770,103			33,500			(13,411		)		38,538			(7,728		)		69,485			20,821				911,308
Income before income taxes	305			(6,198		)	13,338				(10,837		)	7,672				14,766			(20,821		)		(1,775		)
Income tax expense (benefit)	517			—			—				—			(1,226		)	(O)	—			(2,374		)	(O)	(3,083		)
Net (loss) income	(212		)	(6,198		)	13,338				(10,837		)	8,898				14,766			(18,447		)		1,308
Net income attributable to noncontrolling interests	—			—			—				—			—				—			3			(R)	3
Net (loss) income available for shareholders	(212		)	(6,198		)	13,338				(10,837		)	8,898				14,766			(18,450		)		1,305
Participating securities’ share in earnings	(1,557		)	—			—				—			—				—			—				(1,557		)
Accretion of preferred units to redemption value	—			(3,677		)	3,677			(J)	—			—				—			—				—
Dividends declared on convertible preferred stock	(1,743		)	—			(882		)	(K)	—			—				—			—				(2,625		)
Amortization of discount on convertible preferred stock	(1,985		)	—			(891		)	(L)	—			—				—			—				(2,876		)
Net (loss) income applicable to common shareholders	$	(5,497	)	$	(9,875	)	$	15,242			$	(10,837	)	$	8,898			$	14,766		$	(18,450	)		$	(5,753	)
(Loss) earnings per common share:
Basic	$	(0.04	)																						$	(0.03	)
Diluted	$	(0.04	)																						$	(0.03	)
Weighted-average number of common shares outstanding
Basic	152,473						333			(M)				1,245			(P)				20,019			(S)	174,070
Diluted	152,473						333			(M)				1,245			(P)				20,019			(S)	174,070

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Uniti Group Inc.

Notes to Unaudited Pro Forma Combined Financial Data - Continued

Basis of Presentation

Uniti Group Inc. (“Uniti” or the “Company”), formally known as Communications Sales & Leasing, Inc. (“CS&L”), was incorporated in the state of Delaware in February 2014 and reorganized in the state of Maryland on September 4, 2014 as a subsidiary or Windstream Holdings, Inc. (“Windstream Holdings” and together with its consolidated subsidiaries “Windstream”), On April 24, 2015 Uniti was separated and spun-off from Windstream, whereby Windstream contributed certain telecommunications network assets, including fiber and copper networks and other real estate (the “Distribution Systems”), and the Consumer CLEC Business, a small consumer competitive local exchange carrier business, to Uniti in exchange for cash, shares of common stock of Uniti and certain indebtedness of Uniti.

On May 2, 2016, August 31, 2016 and July 3, 2017, Uniti completed its previously announced acquisitions of PEG Bandwidth, LLC (“PEG Bandwidth”), Tower Cloud, Inc. (“Tower Cloud”) and Southern Light, LLC (“Southern Light”), respectively.  As a result of these acquisitions, PEG, Tower Cloud and Southern Light became wholly-owned subsidiaries of Uniti. The unaudited pro forma combined financial statements give effect to the acquisitions of PEG, Tower Cloud and Southern Light, and the related transactions discussed above.

Consideration Transferred

The acquisitions of Southern Light, PEG and Tower Cloud have been accounted for using the acquisition method of accounting in accordance with Accounting Standards Codification 805, Business Combinations (“ASC 805”), which requires, among other things, that the assets acquired and liabilities assumed be recognized at their fair values, with any excess of the purchase price over the estimated fair values of the identifiable net assets acquired recorded as goodwill.  Additionally, ASC 805 establishes that equity issued to effect the acquisition be measured at the closing date of the transaction at the then-current market price.

Southern Light, LLC

The fair value of the consideration transferred is as follows:

(Thousands)
Cash transferred (1)	$	635,000
Fair value of Uniti OP Units (2)	64,625
Total value of consideration transferred	$	699,625

(1)The cash transferred of $635 million was funded through a combination of proceeds from an offering of $200 million of senior unsecured notes and an offering of 19.5 million shares of Uniti common stock at an issue price, prior to underwriting discounts, of $26.50 per share.

(2)The fair value was of the OP Units is based on Uniti’s closing stock price on March 31, 2017.

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Uniti Group Inc.

Notes to Unaudited Pro Forma Combined Financial Data - Continued

Southern Light Preliminary Purchase Price Allocation

The following is a summary of the preliminary estimated fair values of the net assets acquired:

(Thousands)
Property, plant and equipment	$	220,482
Accounts receivable	12,944
Other assets	3,976
Goodwill	256,780
Intangible assets	255,300
Accounts payable, accrued expenses and other liabilities	(17,338		)
Deferred revenue	(30,000		)
Capital lease obligations	(2,519		)
Total purchase price	$	699,625

The above purchase price allocation is considered preliminary and is subject to revision when the valuation of assets and liabilities are finalized upon receipt of the final valuation report from a third party valuation specialist, and resolution of contractual adjustments, such as working capital adjustments, set forth in the Membership Interest Purchase Agreement, dated April 7, 2017.

PEG Bandwidth, LLC

The fair value of the consideration transferred is as follows:

(Thousands)
Cash transferred (1)	$	322,498
Fair value of Uniti Series A Convertible Preferred Stock Issued (2)	78,566
Fair value of Uniti common stock issued (3)	23,230
Total value of consideration transferred	$	424,294

(1)The cash transferred was funded through cash on hand and borrowings under Uniti’s revolving credit facility.

(2)The liquidation value of our Series A Convertible Preferred Stock is $87.5 million.  The fair value was estimated using an income approach framework, including valuing the conversion feature using a Black-Scholes model.

(3)The fair value of the Uniti common stock of $23.2 million was calculated by multiplying the 1 million shares of Uniti common stock issued as purchase consideration, by $23.23, the closing trading price per share of Uniti common stock on April 29, 2016.

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Uniti Group Inc.

Notes to Unaudited Pro Forma Combined Financial Data - Continued

PEG Purchase Price Allocation

The following is a summary of the estimated fair values of the net assets acquired:

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

Tower Cloud, Inc.

The fair value of the consideration transferred is as follows:

(Thousands)
Cash transferred (1)	$	187,501
Fair value of contingent consideration	98,600
Fair value of Uniti common stock issued (2)	58,515
Total value of consideration transferred	$	344,616

(1)The cash transferred was funded through cash on hand and borrowings under Uniti’s revolving credit facility.

(2)Per the merger agreement, 1.9 million shares of Uniti common stock were issued in connection with the Tower Cloud acquisition. The acquisition date fair value of the Uniti common stock was calculated by multiplying 1.9 million shares of Uniti common stock by $31.20, the closing trading price per share of Uniti common stock on August 31, 2016.

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Uniti Group Inc.

Notes to Unaudited Pro Forma Combined Financial Data - Continued

Tower Cloud Purchase Price Allocation

The following is a summary of the estimated fair values of the net assets acquired:

(Thousands)
Property, plant and equipment	$	163,680
Cash and cash equivalents	14,346
Accounts receivable	3,043
Other assets	2,595
Goodwill	117,032
Intangible assets	116,218
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 price	$	344,616

Pro Forma Adjustments

(A)To reflect preliminary purchase accounting adjustments related to the Southern Light acquisition, as noted in the schedule above.

(B)Southern Light received patronage income from one of its long-term debt providers.  A portion of this was paid in cash and reflected in other expense, net, and a portion was paid in the equity of the lender, which is reflected in other assets.  This adjustment reflects removal of patronage income and related investment.

(C)To reflect the removal of accrued interest associated with Southern Light’s debt, and the issuance of debt to fund the cash portion of the Southern Light consideration, offset by the retirement of Southern Light’s debt and removal of deferred financing costs, calculated as follows:

(Thousands)	March 31, 2017
Issuance of Unsecured Notes	$	200,000
Remove Southern Light debt, net	(92,296		)
Remove Southern Light debt, net of VIE (see footnote T)	(1,828		)
Net adjustment to Notes and Other Debt, net	$	105,876

The difference in the amount of debt issued and cash consideration paid in partial consideration for Southern Light is reflected as an increase to cash on the balance sheet, calculated as follows:

(Thousands)
Issuance of Unsecured Notes	$	200,000
Fair value of Uniti common stock issued	517,500
Cash transferred	(635,000		)
Remove Southern Light cash and cash equivalents of VIE (see footnote T)	(73		)
Increase to cash and cash equivalents	$	82,427

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Uniti Group Inc.

Notes to Unaudited Pro Forma Combined Financial Data - Continued

The above calculations do not give effect to the payment of transaction fees and expenses in connection with the transactions described.

(D)To reflect issuance of OP Units as partial consideration for acquisition of Southern Light, and the issuance of 19.5 million shares of Uniti common stock to partially fund the cash portion of the purchase consideration.

(E)To reflect the adjustment to deferred revenue related to estimated purchase accounting adjustments.

(F)To reflect the adjustment to interest expense related to the draw on the revolving credit facility, offset by removal of interest expense related to PEG’s loan from parent, calculated as follows:

(Thousands)	Year EndedDecember 31, 2016
Revolving credit facility (LIBOR + 2.25%)	$	2,921
Capital lease obligation adjustment	253
Remove PEG interest expense on loan from parent	(2,466		)
Remove PEG amortization of deferred financing costs and debt discount	(533		)
Net adjustment to interest expense	$	175

For the purposes of the unaudited pro forma combined financial statements, we have assumed LIBOR as the average monthly 1-month LIBOR rate during the pre-acquisition period, which was 0.44%.

(G)To reflect impact on depreciation and amortization of step-up in net assets acquired.

(H)To reflect removal of the acquired company stock-based compensation expense, as all historical stock-based awards were cancelled at closing in accordance with the relevant purchase agreement.

(I)To remove acquisition and transaction costs directly attributable to the acquisition of respective companies.

(J)To remove the impact of the accretion of PEG preferred units to their redemption value, as Uniti acquired 100% of the interests in PEG.

(K)To reflect preferred stock dividends related to the issuance of 87,500 shares of Convertible Preferred Stock, with a liquidation preference of $87.5 million.

(L)To reflect accretion of the estimated fair value of the Convertible Preferred Stock issued in partial consideration for the acquisition of PEG to its liquidation value.  The difference is amortized, using the effective interest rate method, over the expected term of the Convertible Preferred Stock, which is estimated at 3 years. Based on the estimated fair value of the Convertible Preferred stock, the accretion was calculated assuming a 3.66% effective interest rate.

(M)To reflect adjustment to weighted-average common shares outstanding as if the 1 million shares of Uniti common stock issued as partial consideration for the acquisition of PEG were outstanding as of January 1, 2016.

(N)To reflect the adjustment to interest expense related to the draw on the revolving credit facility, offset by removal of interest expense related to Tower Cloud’s revolving loan agreement, calculated as follow:

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Uniti Group Inc.

Notes to Unaudited Pro Forma Combined Financial Data - Continued

(Thousands)	Year EndedDecember 31, 2016
Revolving credit facility (LIBOR + 2.25%)	$	2,742
Remove Tower Cloud interest expense on revolving loan agreement	(2,040		)
Remove Tower Cloud amortization of deferred financing costs and debt discount	(215		)
Net adjustment to interest expense	$	487

For the purposes of the unaudited pro forma combined financial statements, we have assumed LIBOR as the average monthly 1-month LIBOR rate during the pre-acquisition period, which was 0.45%.

(O)To reflect the estimated deferred taxes and income tax expense. This does not reflect Uniti’s effective tax rate, which includes other tax charges or benefits, and does not take into account any historical or possible future tax events that may impact the combined company.

(P)To reflect adjustment to weighted-average common shares outstanding as if the 1.9 million shares of Uniti common stock issued as partial consideration for the acquisition of Tower Cloud were outstanding as of January 1, 2016.

(Q)To reflect the adjustment to interest expense related to the issuance of debt to fund the cash portion of the acquisition cost, offset by removal of interest expense related to Southern Light’s debt, calculated as follows:

(Thousands)	Three Months Ended March 31, 2017			Year EndedDecember 31, 2016
Unsecured Notes (assumed interest rate of 7.125%)	$	3,563		$	14,250
Remove Southern Light interest expense on revolving loan agreement	(960		)	(3,036		)
Remove Southern Light interest expense of VIE (see footnote T)	(14		)	(21		)
Net adjustment to interest expense	$	2,589		$	11,193

(R)To reflect net income related to noncontrolling interests associated with the outstanding OP Units issued as partial consideration for the acquisition of Southern Light.

(S)To reflect adjustment of weighted-average common shares outstanding as if the 19.5 million shares of Uniti common stock to be issued in the contemplated equity offering to partially fund the cash portion of the consideration for the acquisition of Southern Light were outstanding as of January 1, 2016.

(T)The 2016 audited financial statements and unaudited financial statements as of and for the three months ended March 31, 2017 of Southern Light include the consolidation of a Variable Interest Entity (“VIE”), an entity in which Southern Light held a controlling interest. The VIE is not being acquired by Uniti in the Southern Light Acquisition, and therefore the financial statements of Southern Light have been adjusted to give effect to the de-consolidation of the financial impact of the

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Uniti Group Inc.

Notes to Unaudited Pro Forma Combined Financial Data - Continued

VIE. The impact of de-consolidating the VIE from Southern Light’s financial statements results in the following increase (decrease) to the financial statements:

(Thousands)	March 31, 2017
Property, plant and equipment, net	$	(1,865	)
Cash and cash equivalents	(73		)
Notes and other debt, net	(1,828		)

(Thousands)	Three Months Ended March 31, 2017			Year EndedDecember 31, 2016
Interest expense	$	(14	)	$	(21	)
Depreciation and amortization	(9		)	(21		)
General and administrative expense	2			16
Operating expenses	—			86
Other expenses, net	—			(8		)
Total cost and expenses	$	(21	)	$	52

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