UNIT - Earnings call transcript Q1 2019

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Operator

Welcome to Uniti Group's First Quarter 2019 Earnings Conference Call. My name is Ditamara, and I will be your operator for today. A webcast of this call will be available on the company's Web site, www.uniti.com, beginning May 9, 2019, and will remain available for 14 days. At this time, all participants are in a listen-only mode. Participants on the call will have the opportunity to ask questions following the company's prepared comments. to actual that from results in statements. like forward-looking remarks those would these and statements, could company remind today's you include projected The differ materially discussed cause SEC. to The with actual that company's filings could differ factors are in the the results this this reference slides remarks call. site, its posted to refer will encouraged are you to afternoon those company's on Web The and materials during Principles. will were the the call also Accounting not Generally in during financial that include Discussions measures with prepared accordance Accepted certain Reconciliation measures be comparable in on of financial GAAP financial the report directly those the most today. non-GAAP to current dated measures found Form can X-K company's would now Group's Uniti Kenny I to Gunderman. to like call over Executive Officer, the Chief turn ahead, Mr. go Please Gunderman.

Kenny Gunderman

afternoon Good and you. for everyone, joining. you Thank thank

macro believe demand Leasing this small Uniti as over their owned We of Again, continue to both miles new of strong Fiber XG fiber. for capture to that positioned progress demand wireless valuable for towers Uniti well towards cells, backhaul we and for demand carriers million as builds both uniquely strand fiber as services. tower wireless broader continue X a and rollout with are infrastructure

those have In cells small XXX% dark the cell of approximately revenue. strategy from our associated and a a cell year and represented We to replace with XX wireless dark term several wireless important and total part by fiber almost grew is revenue XX build to cell small XX% XXXX, contractual churn. year to small primarily shorter-term by in over no cells our complete today deployed terms with small longer prior expected and small fiber of of year X,XXX the of virtually this be lit fiber and over end Southeast revenue to in contracts small cells backlog generally have backhaul Dark fiber out continue dark the X,XXX year. We've bookings. projects, over in of XXXX. the expect to deployed X,XXX currently An and with

in continue We XXXX. expect to these trends

our May we wireless XX% a networks to to for part as as the lease non-wireless trends anchor year bookings the schools revenue to non-wireless Uniti Fiber fiber customers less Fiber revenue our grew prior of important lease total up Uniti acquired is XXXX, in network flow substantially such up at On than total opportunities bookings of enterprise, the from expect In Another percentage cash XXXX. continue strategy Again, and we grow lease Fiber grew drive non-wireless XX% attractive government. year-over-year from including and XXXX. CapEx in X, of of of up incremental anchor Southern These yields builds. wireless both in Net.

Georgia. Fiber located with Southern Net is held regional cable provider in Southern fiber services and a Internet privately

X,XXX parts of of have Uniti on network fiber it As annual a with use a an part net the of X% This into that strategic acquire will in the investment SFN's plus master $XXX,XXX assets network strand cash generate annual transaction triple XX-year X.X%. for and mile of will $X million lease. will us Uniti Uniti will for approximately enter initial where provides pay rent also lease exclusive additional simultaneously yield fiber escalator.

this We're The nonexclusive trend that sale valuable of another May continue. is As leaseback previous and we are transaction expect X. protected covenants leverage with maximum on Uniti at pleased attractive sale ratio in our returns closed execute included to to minimum coverage transactions, with lease. and rent fiber the leaseback

quarter the year's towers, of have XX% and potential XX% grew a for consolidated over uniquely to prior included of lease flows associated infrastructure them significant stockholders. contract believe which We contract company contract dark We leasing, to complete remaining our billion continue Windstream to the full years. important small both no nearly the provide a that and to provider to and the which cash next that under have TPx, and relates offering our our and We from value excluding churn under highly revenue fiber, reiterate revenue leasing, total to under fiber, the are $XX relating positioned cells revenue have suite steady of services and across currently over by first and towers believe Uniti several the CenturyLink it's as with little transactions. revenue we remaining visible unlock

which best total with In company is par within we for of fact, our communications churn on monthly X.X% the industry. the less companies some believe than was quarter the infrastructure

provide now from in of approximately on XX% from $X.X operational were million the an first Fiber me our results. the quarter bookings schools MRR XX% the quarter bookings our sales Uniti in local first and update of government carriers. Let national and came wireless wholesale enterprises sales four

two we for dark backhaul broader larger past forward. As the backhaul and leasing from and expect a have e-rate carriers significant the wireless both bookings our to continues will small our bookings significant part of healthy in tower I over small going for of highlighted for comprise for year. of overall portion remain season bookings sales they continue wireless the related cells our our eventual Overall to expectation increasingly markets. rollout successful were of A to services. had earlier RFP become we years this our an a non-wireless part cells our XG fiber and bookings to activity and

able of add as If on small. we customers e-rate on existing associated you new with almost our awards. over e-rate well bookings recall but were opportunities year season all were existing customers retention XXX% e-rate retain our MRR XX,XXXX of as we last to had This new

representing $XX and MRR total of included will these a reminder XX-year new awards metropolitan with that a our As awards data. of value district part a quarter's Aligning contract school first approximately over of quarter contract in bookings second Florida be in add our are not large will was XXX,XXX million.

by as next play even benefits acquisition a a deals seeing ITS we quarter, sales our million won handful and churn larger churn related XX% to lit Fiber, stated ITS teams with back was And backhaul Uniti Disconnect Fiber. XX% both a Total two dark E-Rate Uniti during opportunities, our were a we're to we and and with rate on. further in I As was was fiber bandwidth million which monthly that role of partnered of resulting expect larger with ITS Fiber all Uniti pricing season, have in XX% to Uniti quarter, churn our year's installed X.X upgrades. from wireless for X% increase respectively. XX% last related primarily the the renewal of the and quarter. for sites driven from for cell to first small X.X% $X.X as quarter integrate re-rate for quarter quarter expectations first enterprise Re-rate MRR related the for line our already customers. in we churn last within projects

to to Turning continue approximately Towers, in the construction towers complete we XXXX. the in expect U.S. XXX to on

and we throughout activity tower the have with additional customers. early date provide of opportunities leasing full possible our portfolio we overall part lease-up our are XXXX. momentum to with strategy towers still In to made of fiber been to to Although carriers, stages Leasing U.S. our additional to lease-up tenants, pleased up ramp in progress, solutions we've existing continue expect on the continues on Building Tower suite see be networks. continue to of Uniti a for a as wireless as to our significant we other well portfolio

opportunities in we sale accretive OpCo/PropCo Partnership. continue to leaseback addition, In and pursue additional value

to additional of at the and lease-up little very economics reminder nearly As near a required. Leasing Uniti additional attractive no CapEx with XXX% margins are

sales of Mark. largest additional at over the wireless providers, across industry. customers that represent including I a the call numerous Our content will continues MSOs include our then and variety Uniti routes footprint in turn and entire model wide to to carriers to Leasing the opportunities With leasing

Mark Wallace

by strong results our Thanks, process that Windstream Kenny, to a businesses except moment. with everyone. of first of reported good Uniti and priorities while quarter. discrete will that on performing this We and We're were for few on success, the performance our segments. pleased focused long-term year year delivered each of all business start I keenly in this items certainly well cover operating priority for previous quarter are all a that our positioning our We is guidance of units solid bankruptcy maintaining we one the business our afternoon

So the review let's numbers.

GAAP of after not few share Turning million $XXX of Those or $X X, attributable $XXX was revenues costs common we income of diluted items cost, net and with AFFO integration offset by $X.XX, attributable of quarter consolidated AFFO. from the related was and basis share per of for $XXX quarter did recognized of arrangements, cancellation to shares the the $X.X in reporting tax and value cancellation changes transaction to of approximately fourth contingent agreement waiver financial and impacted in the only $X.X amendment income under million related debt to tax associated of fair March taxes no income the share, integration slide adjusted income reported common credit $X.XX income include million AFFO items million of is is for as purposes. related effect net of impacted associated income to by executed million, a cash book diluted transaction debt per our for EBITDA common million our that consideration and we $X.X million there partially to consolidated

The adopted growing this year significant our leasing of standard and ASC The we next adjusted revenues its walk continue XXX the million were XXXX. revenues bankruptcy $X the and receivables the EBITDA million lease as adjusted adjustment the adoption comments XXX call million. later in straight million realized Lease Leasing's Accordingly cash line rent our the respectively rent over you about line standard segment, receivables an and in the will were Lease. were known Windstream provisions clarity a $X.X accounting of standard, straight Windstream with me the from accordance our For impact million. with is represent under and realized of leasing Windstream should the ASC ASC today. regarding required account by a arrangements. year EBITDA Master more have We to Non-Windstream off segment cumulative EBITDA other XXX first more through X, the ASC literature. let on on that Uniti We'll regarding evaluating previous receivables as until of line probability quarter this XXX balance we be approximately lease of re-evaluate our ability Uniti equity higher million of most proceedings. had Master provides and revenues there were first revenue charged Among impact. than with effective should Leasing basis several starting $XXX a $XX this $XXX Windstream's regarding reduced of quarter new rent years. through to accounting the change for associated In a threshold so leasing light new of determine ability updated share We the accounting straight January $X.X

at as revenue and cable funnel and work Leasing opportunities Uniti million $XXX Uniti from of approximately total international, and sales current of contract one content well regional well funnel Our value. $XX our year million diversified development domestic as represents Leasing With remains annual carriers sales with providers. of

spin-off During $XX their Windstream improvements since tenant the of with our capital to just our made improvements. million under to quarter, $XXX capital cumulative the network of million nearly amount bringing

the EBITDA fiber margins million and of of slightly EBITDA of ahead and our $XX Turning of to quarter Uniti Fiber expectations. adjusted for million business $XX reported adjusted XX% our achieving revenues is

we progress small adding annualized during for and cell sites revenues our as in markets fiber Kenny we cell over multiple million dark fiber this wireless of $X As projects and nearly continue quarter small dark XXX carriers make XXX to mentioned, turned the which we of quarter. development completion. the separate the projects under scheduled Net remain of still small -- seven At dark cell was million major for the only $XX first quarter. had Uniti and Fiber fiber projects quarter for end CapEx success-based all across

X.X% the American expect EBITDA we CapEx operations adjusted Uniti quarter two of quarter off-net from of quarter including quarter quarter stages and Uniti Integration Towers year in shifted the related of or sold also the U.S. had savings end million towers CapEx average CapEx in early the revenues. XXXX. was was and quarter for of revenues the on construction various of a integration CapEx for million of prior the towers At related XXX we completed to during $X.X the about portion reported principally was first completed Latin to development. results into our initiatives. $X XX Maintenance and CapEx for in XXXX incurred integration approximately million during as quarter's and to acquisition towers Towers first We approximately full the or were of each quarter towers. $X the the million balance XXX $XX million of the and Towers X our a $X.X which higher April

common program we approximately ATM to $XX.X ATM million $XXX the guided revising four turn During our aggregate issued issued for of prior we're of our net net quarter of of average for solely $X.X shares stock and of proceeds to million, $XX.XX Today program under I'll current aggregate this an slide Please our shares over and million. an XXXX or X proceeds outlook. shares cover off items. X.X our for total million at-the-market brings price of

line as Windstream principally straight impact a of the our recognition. in adoption the change lease ASC elimination XXX result the with for Windstream of First the rent of of accounting master

funded year. of first incremental revenue in Second realized this Windstream quarter TCI the

consistent and AFFO the in first basis of quarter taxes the cash be to continue to as Other impact last the debt cancellation previously other transaction mentioned. expectations tax income of related our and is reported Third I of presentation prior in Web outlook reconciliation materials guidance current our on call included today. provided and in our our the posted previous with site last a the earnings guidance to

Our future assumes specifically except mentioned, costs of lease, and timely Bluebird under acquisitions, any lease concurrent Bluebird transaction Midwest third quarter. the and to the rent sale are by Midwest our integration the transaction outlook to and Network, included market based operations the outlook all master outlook Uniti future Fiber's of and and current those Windstream our our of make fiber in transactions to acquisition networks continues payments exclude closing of Fiber end Macquarie this Macquarie our capital of the the

on finalization other factors. the closing arising Our timing conditions, adjustments during from Accurate of capital outlook Windstream's results purchase market differ and could price and market events to statements. acquisitions, reorganization forward-looking these related is any future subject based to transactions, of materially allocations proceedings, acquisitions

X leasing the from major investments includes transactions higher outlook of highlights adjusted of TCI complete net Uniti partially current midpoint. Uniti yield $XXX approximately years. $X our XXXX over recognition and revenue potential with million revenues Our to Windstream of leasing, attractive lease-up the have in $XXX terms, million the incremental million. offset by fleet with generally trade which Slide over lines at respectively reduction expect to This $X now an foregoing, XX XX% cash consist these have range cumulative million additional leasing providers approximately from $XX Starting the the the life segment. is following and the to currently contract the reduction we we for million EBITDA date, rents of for yields through XX which

year. close to regulatory continue expect the various of we quarter transaction, Bluebird the third still work Regarding this transaction approvals the to through and the in

of to million positioned proprietary communication X.X% of leasing annual Uniti allows to networks for cash with As a rent. most transaction want term reminder, XX-year productive use. include underscore over this a that and represents I that lease within yield cash will business initial fiber strategy actual initial we their an infrastructure a be $XX

cash to these over life lease. be to addition attractive with In transactions multiple of growth structured enhance initial yields, returns can drivers the

set diverse in with continue existing and We leasebacks up interest strong on additional of routes, a sale new OpCo-PropCo counterparties. to opportunities lease see potential

deploy Given be more any leasing of capital business our and other business the economics time. our over of we than can attractive leasing units may it

Uniti $XXX million for to adjusted $XXX and midpoint adjusted consistent our at the of million fiber full-year. eight, margins achieve we slide the contribute EBITDA of of guidance to XX% EBITDA with expect Moving prior revenues

for which success-based XXXX million net midpoint in about be $XXX CapEx call directed Fiber Uniti XX% projects. last our of small will on be and cell about fiber should noted to at dark As our

and add dark million it seven $XX consume X,XXX project For of miles Upon will XXXX cells in the on fiber small revenue in completion, by cell should construction incremental XX in projects one XXX,XXX of add fiber two finish small XXXX X,XXX seven expect we for are and small strand and net projects these bring fiber and all to these air. $XX million while under be will add annualized of XXXX. projected $XX projects year small cell except XX will currently still end to and dark that approximately million about capital completed

Fiber's We expect to XX% Uniti XXXX. about - XX% towards the range trend mid And net success decrease capital then based decreased thereafter. intensity to in

of and and respectively. for integration CapEx $X million $X maintenance XXXX million expect also We

Turning to $XXX X included results business up closed the Towers tower April our that Phoenix XXXX America to and our guidance America in to of approximately in slide the announced it's Latin on sale for Latin X, million previously have we date.

expect to about $X.X reported For revenues of $XX XXXX Tower million be XXXX. EBITDA we million adjusted with

and to in continue about we business, forecasts U.S. year at XXX having in out million -- we towers invest range Uniti capital Uniti to towers complete Tower expect As our from which $XX the year-end. building U.S. of with to completed $XX million XXX towers resulting the to expenditure billion, towers this XXX construction

the Turning of XX, billion consolidated per for nearly basis, $X.XX XXXX, expect with to On midpoint. $X.XX we midpoint between $XXX full-year be EBITDA $X.X and diluted to and to to revenues now slide we be expect a adjusted range $X.XX. share, a million AFFO at

We expect approximately be for shares. common continue million to average shares weighted XXX to outstanding XXXX

the guidance of our outlook for reminder today. current to our components a appendix key As included in ranges are presentation

updated our my outlook some a afternoon. XX, slide prior our provided of which we've summarized of tabular this reconciliation On comments the guidance XXXX to

based and cash agreements leverage about under declared XX, balance XXXX, share report quarter our times debt equivalents, the to cash $XXX our combined quarter for at ratio marks at $XXX on at of approximately paid stood January approximately dividends and first the end, the cash continues adjusted per X, a end $X.XX unrestricted $XXX we on leverage times. allowable sheet, April of quarter quarters had to X.X agreement. on Turning million received net such year Latin XX. payable from of the record proceeds net per to dividend EBITDA. business end of dividends American we our to to in million Subsequent attributable to approximately call, Board Yesterday, my common million our reduced on June analyze approximately to estimated this sale X.X stockholders be which capital our to stock debt of approximately our million estimated our dividends for be are of July on April credit Consistent and with allowable our share the or next year three including last $X.XX under tax our our $XX

We key strategy our reconsider reorganization financial our policy context as board Windstream's profile. will and in current developments long and expect of occur our business in dividend process

So with the that to I'll now back Kenny. turn call

Kenny Gunderman

Mark. Thanks,

participate to mentioned seller buyer overhang Uniti ability have I infrastructure As M&A proceedings. positioned value smaller this valuable is assets the we as on from last bankruptcy both the accretive communications despite as transact the quarter demonstrated Windstream and uniquely we the of to quarter

active our Windstream. short also diversification to to during continue like with efforts We proceedings. on remain update of a the I'd provide duration these

to be received far and mutually been So current pursuing the to remain credit May, to course its outcomes its the from was have payments to billion that tenant navigate monthly to valuable in value M&A on smaller invest stakeholders ready to paid to we through could also were and on capital with remain could -- time We are having stronger a raise beneficial without Windstream have bankruptcy continue Windstream accretive believe We We in confident still on which continues potentially delighted to finalize external focus that Windstream able we've to proceedings restructuring we enhanced. its and Uniti. potentially on and its successfully with potentially now be able will full be our of resulting bankruptcy relationship normal $X proceedings emerge ability take the to lease process continue in Windstream questions. in in business units how and business still Windstream enhancing to Windstream all be have remain progressed. and open including pleased we to a been that the approval debtor-in-possession Operator, transactions. commercial that operating financing, and court Windstream pursuing see

Operator

Brett [Operator Your Instructions] with from Feldman Goldman Please response first is ahead. Sachs. go

Brett Feldman

that it your insight fitting quarter, question. then like focusing declined like getting full-year basis, more maybe your mix visibility think term, for into also mind, Uniti and M&A and revenue And pivoting about hoping so bankruptcy, in your And you the maybe you that you segment is the past leasing resolution thoughts what's the the more and more the particularly OpCo/PropCo of can just the business beyond taking curious opportunity certainly selling how there into operating move the on two maybe fiber higher don't away, the you're you. Fiber, business what about merit into exclusively the long Windstream behind Thank seems Fiber implications? for Uniti level, sequentially it at so a for as a leasing business and over you to off Uniti relationships? funnel Fiber -- if a on get the reiterative Thanks on that an looks supports and guidance I I'm I in was little your

Mark Wallace

expected down some the great. really the EBITDA bit item revenue, Fiber, is regarding question for first revenues well. was on quarter expectations mostly we Yes, equipment and on your little not cost income, what which some they revenues, from slightly then a also in income down were savings mostly it as first They from timing but our there. we on On construction sale were have Uniti because a

balance for in forecast just Then let… our the timing again that remain of year, we those year. the I'll balance be primarily the made confident we of as and So issues up will are the at look those

Brett Feldman

Got it.

Mark Wallace

the balance let I'll your Kenny take questions. Then of

Kenny Gunderman

accelerated given asset been past years in have remarks, Hey, fielding as my evaluating Brett. the inbound the been assets of Yes, mentioned portfolio the for couple I good think we opportunities environment. current in only I in are incremental M&A valuable interest of have this a operating question it terms presents nature as prepared brings in optionality the continued them to constantly -- organically capital having -- that and is the that not we the for our only think out of we for but and where look investing that's it still strategic us. we But platform us also fiber we as

American mentioned see I value with proven that and sales So still operations as as I operations attractive ultimately a value. particularly where towers us, Midwest and we the as but opportunities at -- are for but including they the that open not asset Latin we've the executed enhance play like some fiber selling on our that shareholder of the other the fiber multiples, to we've sales

open-minded look accretive continue to be So value going forward. and for we'll opportunities

Brett Feldman

it ticked mind during if churn don't like remarks, and very not to equipment sets revenues, the did the a you first prepared I really and If sound your about had up. follow-up Uniti of question the construction just Fiber impact

So, during is that segment or about? thinking there assume to flat need in or more stable there to parts were it fair we that are to be revenues in the moving quarter up any much the recurring

Mark Wallace

expect much growth the outlined was on different I pretty of really, MRR of our this as Not we that kind call. we think the year all last and expected churn the we for waterfall

the rates with on we think slide outlined growth it -- expect So consistent so expect our a I already for be the call. deck, to -- that there's quarter's still on full-year quarter I last call

Brett Feldman

Great, thank you.

Operator

you. Thank

Philip from next Your response Cusick, JPMorgan. is

Philip Cusick

to selling less guys, asset? with question in Brett's and a restrictions have suppose company make sense any it on than Hi fiber I this to that more towers, the or similar does any

Kenny Gunderman

we value Yes, unique -- to fiber including infrastructure a with each look, is the well, cells, to approach We that leasing. think and we portfolio of that's Phil. think three Hey, our and and and of those actually offering relationships we under it's as benefits small value the think the four infrastructure scale as values customer the Uniti grow. see marketplace very pronged I prong having that there the backhaul, every growing businesses day of towers

was so So the niche true we with that it the carrier's others. the business for power opportunity vendor and REIT of the unique with with for initially a FirstNet desire value AT&T that in tower going we that's into our opportunity our particularly a there activity new was to given and diversity thought was be tower proven particularly and see staying and provider a thesis there

been pleased and returns we're seeing the early lease those up very expected. that as we've pleased So that been with we've it's on towers the with on

So about relationships our associated with pleased that value we've the with been synergy good the we feel across very and customer that of in rest our portfolio.

and that, minded lot all our shareholder open opportunities. relationships. to a of are and said quantifiable various so around of remain Having characterize we -- open both synergies going what as we across ways all I So we're qualitative synergies customer remain to optimizing value in

Philip Cusick

to restrictions on who anchor any you those tenant? from sell there Are could towers your

Kenny Gunderman

No.

Philip Cusick

can anything additional fields that's close like for pipeline first the is the you if that? here what can third Okay. supposed to And One how then other does I I look quarter think your deal, in on Bluebird OpCo-PropCo like share going.

Kenny Gunderman

I -- quarter remarks third closing. we as mentioned think still his we're I think in Yes, Mark late as towards working

towards everything So on the and track thing is is there with integration that progressing. work of sort

volatility I OpCo-PropCo continue market don't there's Bill the M&A ourselves sale leaseback that a call deal lot development particularly growing. sale and we frankly in the that want of the though both to in our cognizant think even very months we do funnel so by So, OpCo-PropCo and funnel on of mentioned And pipeline we're and our maintain opportunities we coming the of with and overextending not I engagement securities robust as really but SFN this sizable last on remains over say on quarters. the transactions no leasebacks I with we but and opportunities as surprises. the evidenced would on partnerships

Philip Cusick

Kenny. Thanks,

Operator

you. Thank

Your of Flannery next response is from Simon Morgan Stanley.

Simon Flannery

time in income their you Great, substantive had re-org, evening. do advisors a at is on on you distribution? track Windstream the just is the are lease on do you that maximum under about for frame on progress you rules $X.XX, And REIT and can think TBD? Have that clarify Mark, required or to the be the Windstream IRS of the any or payments. talked pay take lease to and point, Thanks plan terms net on on you. any four I what discussions thank color still would you. have month point of Thank sense that you the pay on guess this timeframe, dividend the for a [ph] the Good or with longer? the in it And you might then they

Kenny Gunderman

and the take Simon Hey, first couple. I'll

Simon Flannery

Thanks.

Kenny Gunderman

rather I'd on think but rest feel I not financial about I would, conversations say advisors, would with that and I'll optimistic can to having both with we're continue and say assured we advisors I that legal conversations our the and you specific principals comment progress.

all -- a no the are of of bankruptcy and think and to lot expedite to that the process advisory any fees. getting unnecessary believe we're benefit along know spending we legal process, process looking there's and fees parties You out one the dragging

we by Windstream's about general enhance be So surprise mutually again that network We consensus the no around that relationship. met critical to that true. mission has commercial that. also to is we've our that there think and optimistic and beneficial continue so expectations opportunities engagement to been business our pleased continues but to a remains the And feel -

about then of quarter respect beyond to are consistent with would of just of dates our September, no extensions anything those leave dates - last we'll again, the With messaging that. and Simon all new line, time that so changes lease specific plus on have and the and in are June talked we've I don't say I in the say and to that, sort there. really So with things

Simon Flannery

you. Thank Okay.

Mark Wallace

dividend Hey, with Simon, time. consistent I this since that is I -- that that amounts previously declared the for gave Mark. dividend we On your those have we've except same question, gave that are the amounts

under out do credit the agreement we're we that that out. to those minimum represent the under to income required the you're allowed And out are pay maximum So XX% the required that's that through the taxable amendment. pay pay to -- of

Simon Flannery

you. thank Great,

Operator

you. Thank

of America. Bank ahead. of Please Barton David from go is response next Your

David Barton

think talk the is, I for respect mutual Thank my working unit when for the a $XXX is questions. in beneficial credit million about value loss you you have lease $XXX be anything million lease creating with that discounted have probably $XXX taking million that to three lease, guess to offsets that, much for billion. guess, quality value the the to back, I there kind lease, Windstream a when relationship outcomes that a minimum the one $X.X potential $X pretty of a over XX I of of and means a you're questions. a and Kenny, first I change billion, for year Windstream, with about, you

can talk to is which know you Windstream of sorry, the you a guess I letting for need accelerate to what back banks be billion be built about winds offering to I you respect in until point $X.X that struggle and Tower one, returns fundamental, is And your you going could conditions Uniti are mostly you happen can was cannot think if in imagine, accepted that you matures you if think the could interested $X with kind mutually of terms? to the should for know be where just look this industry which the or that is the the still really of business to to terms suit pushed and the Mark, relative you down appetite again in any I'm question generating to so going last this in bankruptcy billion lot may do on on roll so maybe other knowing there but but lease be of of you're I kind it beneficial that you June, and kind process, second do profile is is you to Thanks. get off could to extract anything people you're or think this see to you that getting question with where that about win is helpful? to you wait in a is, and standard outcome do you April. think And off you September? I as relationship you Windstream, conditions kind come don't evolver bankruptcy those you're the you year, of value business then is to which Tower know know there if way in

Kenny Gunderman

and this David, Mark take let is the and first I'll Kenny, second. third I'll take the

So have at to with on don't, don't, we're associated bogey guiding We that that. think, we billion $X rent value first cut million one, I red discounted bogey the mentioned roughly trying you a all. first don't or we of all, of we hit don't, $XXX

something difference so think the that and our we're of I on, we're be both - not it's the we're more could I a you're dollars -- we less, versus but whether there to some what is aiming opportunities or don't or how view billion that's to commercial And enhance but that have comment there relationship thinking, won't the value are beneficial a towards. saying in big bogey big

David Barton

that do probably right? creditors Windstream The

Kenny Gunderman

for creditor, but speak day and landlord pursue. were have for, or prepared we're creditors we're that necessarily what hoping opportunities the Well, conversations or doesn't what so be what I not to with dictate them a to prepared of a won't end may we're at respect the what the to

David Barton

Got it.

Kenny Gunderman

on comment question? you Mark, So, Dave's to second want

Mark Wallace

revolver, the revolver revolver. banks pre-petition say, the conversations Yes. know Hey, answer I around around right and/or time we more your clarity certainly much to on into addressing to started specifically, want you we're about or at David, for too there's don't lease. I focused the bankruptcy [indiscernible] it exiting that We with question the do you I the those now go this Windstream about one trimmed refinances. is could till filing wait with getting when so but but know to the do bankruptcy - had previously process resolution there appetite

So think helping and that right the certainly it but us appetite we for on I way, think get do are either now. have focused addressed I banks

David Barton

experience would already why Wind it reason is acceptance quick when but fine there a a the said, of course? going just ordinary to they're decelerate they accelerate if own lease paying the keep the or just the my in process, with Mark, follow-up, And it's or wouldn't to want

Mark Wallace

hard say to what Windstream kind comment what it's is for of thinking. to I us think on

run our -- the to you have know view probably always interest. and trying in to is is regulator been that I trying think a get bankruptcies the to everybody's resolution

have how So but just to it see we'll plays out right now.

David Barton

it. Got

Kenny Gunderman

question few of tower build-to-suit two you're David, to from to tower held terms and with deals especially in our a tower those the many that we laid a we think say really to about that economic we business a take what we're in to having to that company, opportunity ago where really have - filings de would have and at can't a Hunt I still very to in public are just so an acquired did of roughly and not and other Windstream invest shied opportunities XXX to find unattractive company in not deals fiber necessarily on that who for one X% focus to we're accretive variety we're portfolio will those and our that the that we that we us of that make beginning of to we opportunities suit a from build the are ago. other represents new to away to so respect there to would X% with the - that is think U.S. as of just escalators towers, to we're tower business the we're pursued think range opportunities on seen we happens but many portfolio said tower a with we've respect want And amount we be that. the true we've out a additive company, willing competing years we deals valuations be to perfectly to because definitely we times portfolio -- position acquired a are last in we right go as tower big that we there continue U.S. XX% and the are cap -- with fiber our those people from really when rates, the believe not our say on let build-to-suit from acquire we that a with portfolios and we've are our is said on. infrastructure entire opportunities to on years type years a those I've I opportunities once because I capital a we're to stuck we we most tend unattractive terms a so have together reasons show of on and where on in two to take there I customers your make where to where we we proprietary U.S. focus say or to towers course X% and ago, that those don't money But spent buying XXX level to acquire new and the have a result industry minimis but of work some towers shied or returns that the the against difficult alone where so ones tower certain away when

David Barton

Kenny. much, so Thanks

Kenny Gunderman

Thank you.

Operator

Thank you.

Your next Bank. from response Niknam Matthew is Deutsche from

Matthew Niknam

that's be types you deals, you've then coming Thank but from these or you just given cable that deals taking One side, my smaller opportunity right but out Hey, think non-wireless. say, telcos sort I whether fiber I you the secondly for the of bookings yourself on one. question know a leasing, of I larger leaseback deals for questions. co's, on being more from guys. and seeing in had three there, mentioned a prevalent, leaseback about talked to maybe past, date so wondering, being there's sell And the more current of appetite are tendency they the keep larger think operators, quarters maybe I'm larger now about

demand evolved Just go wondering the you that how wireless carriers, decline think have we has should to basis? from that of of about sort opportunity the late all. on seen a forward Thanks. And then what

Kenny Gunderman

take those. sure. Yes, of I'll both

heading the on a have progressed show transactions pipeline we've Ron so up including leasing and the that past, –begun and the work definitely transactions -- side as and mentioned real experienced And as has to to larger and [indiscernible] announced effort now that business. ones. - team began We Ron for executives transactions, smaller is devoted of us. as development we Murdy, have in

synergy we're deals. is We would we consider interest in and have we're reality three selling when fiber now because us seen larger lower that doing definitely types the and an strong second transactions, And we're there deals other including with volatility. wireless and the both so finance big pursue not with -- other question, there interesting now But in capital enhance that larger that imply and of be and type say would those continues that some that and likelihood cautioning we got your those fiber fact I to that the larger and with larger selling part continues period deals opportunities I wholesale in opportunities traditional very including smaller the would those cells I pretty small definitely to to can would on traditional, out of opportunities. opportunity I the respect conversations backhaul of say carriers. don't help all you wholesale say the in during the increase are But all want to much tower I especially just grow to four ways. carriers transactions would assets and to that we've demand and continuing of those interest value the types of level are this is of our of among With

those the about change up in is on so of our among networks the isn't and mix. to better a it driving focus because as always parts need business demand parts So other schools growing the non-wireless wireless has of it's networks focus business and declined that off our our way that a part on enterprise that's wireless talked effort definitely parts lease really of to really carriers, government is drive with effort our we've the our conscious our that anchor conscious a growing economics those business other the on to

Matthew Niknam

Kenny. Thanks, helpful. That's

Kenny Gunderman

Thank you.

Operator

you. Thank

Louthan next response with Raymond is from James. Frank Your

Frank Louthan

the employee are what's motivated just whole to keep you then throughout be of retention the bearing what the Great, thank Windstream. of expect folks that of going you. you're number for characterize during and you process heads you kind do maintain and what year Can handling how and current you're the the doing quota while process that course through

Kenny Gunderman

of Yes, online. We've We've we're roughly Frank, beginning bearing great quota XX is got now or number to building question. these reps as that especially some now. move into fiber coming where growing been markets, we're fiber

volatility with ground that to tight. that it's labor the and that's but I our so organization the churn the found our will continue the and wouldn't up I backfilling doing We've industry, certainly So on excuse any down base attribute in - have other will and thing. market we've of don't that I [indiscernible] our enterprise growing of seen uncommon lot is base conscious a that. to been and the some among sales with and we're think we've or a say say say with would the effort would Windstream, of chain folks I so churn We haven't to me an I in folks and talk really I as seen

to to related were in very and at before people said on filings deal impacting that's points on we've on our think something with there's we're of engagement, this. churn talking our of regular that's how the focused we executive -- talking with employee to Having customers with us. the a lot and engagement just position even this I very But all respect year, think employee don't I earlier that, seen down, points preparing level volatility.

and I about items think are lean facts our in and respect the give that we constantly people to and comp matters. with is other so approach And done discussion and that's board it best communicate we what with to related the any into certainly

we to focused very their. focused things I so need the be that all think on we're And on

Frank Louthan

you right, very Thank All much. great.

Operator

the I to back over no Gunderman. time. am further would questions this I at showing like Kenny conference to turn

Kenny Gunderman

you on today. look for to Okay. further forward Group We your joining Uniti future calls. Thank and appreciate you in interest all updating

Operator

your gentlemen, this Thank conference. wonderful a and you and participation for day. Ladies have concludes today's

disconnect. You may all

Uniti (UNIT) 9 May 192019 Q1 Earnings call transcript