UNIT - Earnings call transcript Q4 2019

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Operator

Welcome to the Uniti Group’s Fourth Quarter 2019 Conference Call. My name is Jonathan and I will be your operator for today. A webcast of this call will be available on the company’s website, www.uniti.com, beginning March 12, 2020, and will be - 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 call. reference slides remarks and its posted these to will to encouraged are refer afternoon materials company’s on website The you during this

non-GAAP prepared Accounting also found this certain report financial measures of not call Principles. today. were dated Accepted Generally will financial include Form measures on most in during in the with Discussions that accordance GAAP current to directly financial Reconciliation measures X-K, the comparable company’s be can

I Group’s Mr. would over Gunderman. call Officer, to go to the ahead, Chief now Uniti Kenny like turn Executive Gunderman. Please

Kenny Gunderman

afternoon for to you Good you. joining. presentation. thank and X, Slide everyone turn our in Please Thank

Before quarter fourth Windstream. first our for recently I announced like and full performance our with to review XXXX, I’d address the agreement operational year

additional by up $X.XX owned invest strategic and Windstream upgrade today of and backed The commitment to to enhance agreement true Uniti further which fiber Windstream of capital with footprint in ensures in will the significant assets, with and company network positions national principle our Uniti and fiber a expansion between has deployments it our as in billion value leased significantly coming our the value years the network Uniti at of for renewal.

leases as Uniti. all with and parties working we on Windstream to involved financial forward competitive from look performance enhancing focus We the network Windstream’s position,

achieves Uniti believe mutually time reaching and beneficial both now, for repeatedly we that. some agreement were a As we we’ve Windstream this and to said outcome for committed

Towers valued US. our XX agreed XXX infrastructure of the located and a provider simultaneously with continue a strategic that to today are towers wireless we’ve build in XXX announcing into also entering across to to We’re arrangement states sell US

while of Windstream US the lease action This American portfolios Tower attractive the prepared the and Latin sale highly the Towers my sale in agreement for our a Midwest more Uniti provide of substantial capital operations, I’ll the remarks. similar sale and later our realizes Uniti our business at ground value to recycling stockholders, is US on valuation. details Fiber and of and

begin reiterate we out last to Uniti’s XXXX, I we As want that laid priorities quarter.

We low non-strategic to existing CLEC in some operations churn, margin, drive of business business margin, such high fit strategy, largely which construction continue America units, not businesses. of our and and our low do all business non-readable volatile residential all de-emphasizing non-recurring our called recurring are non-core, core that as our while revenue Talk

We’re also leaseback continuing de-risk our to in sale from fiber short and business. agreements to duration transition duration dark all of contracts which opportunities, pursuing revenue opco/propco substantially lit long

and small will and lease dark - as transition CapEx. and Second, networks we wireless have less at yields most now cell the substantially cash large existing - be up anchor of dark with fiber government Uniti our infrastructure we for as from of to builds. Fiber fiber This pivotal year customers accelerating major completed enterprise, that attractive E-Rate we flow position building

Our combined collectively utilized approximately networks Uniti substantial Uniti represent XX% are potentials. Leasing Fiber only and today lease-up and

in Windstream Third, can pursuing mostly M&A volatility we now now with our with prioritize accretive us, litigation associated behind larger the again funnel. opportunities the proprietary

that no to transformative bolt-on cash transactions flows we with require continue little acquisitions, very incremental While capital. the and attractive will focus on to we again attractive will execute source on

customer of result cash already Windstream high be improvement expect base. of settlement in tenant Lastly, substantially as - revenues our will agreement. the substantially a the diversification non-Windstream our of healthier will be flows we and quality quality continued the a and along

infrastructure valuation. revenue than represents for X.X% less and a a of $X solid under base contract Our churn truer of billion company-wide

wireless the approximately in bookings fourth quarter of activity in Turning carrier now deploy over sales backhaul $X.X cell one across macro our adding all a sales levels of the bookings national MRR, combined wireless million carriers, to XX% our quarter next three to the delivered. mentioned and our operational Approximately the of $X of small previously annual of Fiber from major XXX were Southeast ever. came contract bookings primarily are with results. years highest four Uniti sites million MRR our once footprint, sites the reflecting

deploy the one dark over the backhaul of a the quarter our approximately years will signed XX further markets. carriers wireless existing Southeast two also with densify our contract one next to during tower fiber We of sides major to to that

million value provide of Both will substantial existing This contract the over $X.X of MRR several annual potential total contract million. highly opportunities our are synergistic and lease-up network these next and a years. represents of $XX with

The from wholesale. remaining sales during bookings the of and enterprises, quarter local schools our XX% came government

continue networks. Fiber to to of As bookings lease-up forward ramp non-wireless the course we of we previously normal our mentioned, a to comprise bookings going expect continue substantial we our as portion

$X.X fourth Uniti MRR during quarter. Fiber installed the million of

For up XXXX, full we levels. $X million year MRR from XXXX of installed XX%

related fiber that to E-Rate cell services quarter $XXX,XXX Florida with related of with to XX% projects, in gross in over and gross metropolitan installs XX% opportunities non-wireless add backhaul remain a We deliver large on track of the to district to During third X% upgrades. MRR. coming school small installs fourth of the bandwidth and XX% will wireless, quarter related from dark

Total driven for for churn resulting quarter churn for in X.X% Disconnect churn million was the lit Uniti backhaul primarily rate X.X% quarter, Fiber. a disconnects. was the by of monthly $X.X

mentioned to converting sites quarter we the churn backhaul fiber. we to to quarter, As lit from dark expect comparable third to the in churn due last fourth quarter the be

expected of the sites expected to in now dark our to the lit occur in quarter fourth converting first is Most churn fiber the related be in the XXXX sites. that delays to realized customers to lit of to disconnecting due was half

of this several expect year. half customers first with churn us at to discount, for Coupled numerous sites elevated somewhat a the with be re-terming we

with for the of X% averaging monthly year. return in normalized full expect churn more levels We to second churn to the half XXXX

Leasing, network, pursue utilize fiber leaseback as continue with we lease-up on scale transactions. Uniti as sale build we At the existing additional opportunities XXXX in our well pursuing exit to momentum and opco/propco that larger

to actively includes customer and opportunities carriers, and with providers. wireless cable continue base global national content work a providers that We regional several well-diversified

contract is well for The million. fiber long X,XXX a fiber, routes solution we as a XX dark will example, international diverse recently haul Uniti with an miles long Uniti existing total deliver initial Leasing utilizes as of As IRU and fiber signed Windstream customized fiber over route span leased both to year a haul large deals owned $XX a dark that four and value represents dark carrier that over fiber.

with the We of customer of next this continue expect deliver of the routes new most end year several and to years. two by the route quarter orders initial the add over this to third

that, now With over turn the to I’ll call Mark.

Mark Wallace

first, of Thanks, Kenny. performance. our full and fourth brief areas, I’ll review focus three quarter year remarks in a this afternoon my XXXX

in an path affecting our Windstream. last, capital a I’ll the principle forward agreement There of to balance Second, comment following unit. consolidated comparability of our our key reached are with we each on Then number on year-over-year I’ll of XXXX overview results, sheet, for and my items in outlook a structure the basis and remarks. business try items highlight

X. Slide to Turning

share at we million, revenues per quarter, AFFO $XXX diluted adjusted million, and $X.XX. common reported of AFFO of fourth EBITDA common $XXX million consolidated attributable $XXX consolidated the shares For to

million other was the and common Net approximately of loss and transaction per diluted attributable for to $X.XX quarter shares $XX $XX included share million or related cost.

Starting Leasing. with Uniti

ago the [ph] up Our year each [$X were Leasing’s $XXX $XXX of expected period. million growing were Non-Windstream adjusted of and They EBITDA million] revenues respectively. revenues million, leasing segment respectively to X% $XX were a with share forward. over represent and EBITDA revenues adjusted Uniti going million

the other on we option networks deployed million for leased initial Bluebird yield of capital with under quarter an approximately fourth [ph] growth at and of capital to capital We tenants just and from have growth initiatives [X.XX%] the investment associated $X initiatives fund us during

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

Fiber. Turning to Uniti

dark XXX small sites During and fiber revenues million. for cell $X.X the wireless turned of adding carriers quarter we annualized over

X,XXX Florida, markets, across full the of turned representing annualized revenues dark of and we cell For Alabama, Mississippi, million. over multiple approximately and sites $XX fiber year Georgia including over XXXX, small

EBITDA EBITDA quarter. the Core fourth reported Fiber adjusted Fiber part our million million, $XX quarter include with or of that as were Uniti compared Midwest revenues sold of the same revenues Bluebird $XX they it’s our results on adjusted Macquarie as achieving to our and of and consistent last August remember When were XX. relating revenue adjusted Uniti to year, closed for margins EBITDA XX% important margins which transaction of expectations. to quarter do XXXX the to not fourth operations,

lower were and services construction multiple delays attributable The $X associated of primarily consists expected Fiber timing Uniti was at decline approximately revenues projects. primarily construction Non-core by to than with million.

lower that products non-recurring As previously and to strategic to noted, de-emphasize we margin, services are fiber our business. not continue

Fiber fourth base was approximately $XX million net the Uniti quarter. in CapEx success

have aggregate completed fiber anchor with - achieving with our small projects builds completed We initial the now X%. of XX cell of XX and dark an completed yield

of million $X incurred million $X of maintenance also or about CapEx We integration revenues. X% of CapEx and

million construction revenues under CapEx with spend quarter reported of just fourth the towers. adjusted completion near million $X XX Towers for $XX of in the of and break-even of Uniti EBITDA

count and US, towers the bringing completed year currently full two XXX in-service the tower various development. XXX approximately of For our the in at year-end additional stages towers to completed towers XXX and XXXX, We towers. have we acquisition in of

to turn Please Slide X.

our Turning XXXX now outlook. to

the uncertain at as principle guidance treatment any accounting from Our date effective impact Windstream with announced the this and in are excludes time. agreement the

full does our with on in expected and lease force Windstream in Our date make anticipates continues an sale April US lease outlook effect continues the that to XXX all payments announced and include towers of time. closing early Windstream of that the

materially related our these outlook future our results transactions presentation in Actual on mentioned are not costs, current and XXXX herein. included results market Our capital statements. A transaction website XXXX posted of year could differ outlook the actual reconciliation materials other future excludes forward-looking from and full today. specifically to acquisitions,

Uniti outlook following Our Starting XXXX for the segment. with full year includes Leasing. freight

We and be midpoint, to Leasing revenues at the respectively EBITDA and EBITDA adjusted $XXX representing $XXX million of expect adjusted XX%. Uniti margins approximately million

in slightly that network, have we Uniti building Leasing begun As on our higher XXXX. in SG&A opportunities at focus to existing XXXX team resulting leverage sales in investing when lease-up national out expenses a we compared will continue and to

and EBITDA up revenues million resulting of levels, Bluebird. $XX from be and to the impact full-year XX% from XX% XXXX primarily are and adjusted million $XX respectively, Non-Windstream expected

as well up Uniti comprised Leasing sales of both funnel of sales prior annual providers. carriers, represents from the million of contract of In aggregate, and funnel The $XX XX% now is represents the international revenue, funnel value, from quarter. mix total domestic well up as cable content last XX% and $XXX about the million sales quarter. diversified

This lease-up year network are on at our opportunities. pursuing well additional both Leasing additional existing as at cell we leaseback emphasizing Uniti as opco/propco

activity million Our outlook $X.X revenue. lease-up incremental this annualized of contributes assumes year

in my year, As I back remarks, we mentioned associated investment capital began last earlier capital with growth of in deploying initiatives. half the

Uniti success Bluebird. annualized of initial anticipates net yield that X.XX% network of deploy resulting of based investment rent cash an Bluebird earn million we CapEx of million. guidance the Our over incremental initial related The principally $XX to at will $X Leasing in

Moving X. Slide to

of at expect We achieve outlook. our full of revenue, million about year $XXX the of adjusted to XX% adjusted of for midpoint EBITDA Fiber margins million EBITDA Uniti and contribute the $XXX

year not Midwest EBITDA As does transaction adjusted August guidance a to or that closing reflects operations, include revenue results revenue Fiber’s Uniti and related adjusted the up reminder, of on EBITDA any XX. XXXX prior to while our

Also EBITDA our Michael to in Hurricane recoveries prior income $X of of that Insurance reflected adjusted quarter and last million reported we second in impacts comparability. year-over-year the related year year, was

Uniti two expect expect million projects, complete to large dark XXXX the of projects be cell be fiber three Fiber year-end. with net of We and the completed half the for to the this by first remaining $XX about project - year to small one midpoint remaining of at in completed we the

to it realize that lease-up is build to for it’s the priority of Uniti take lease-up wireless up years a to full Fiber, in to start three important larger keep in our also can anchor potential mind markets. While top

high-margin We enterprise local have sales pursuing markets non-wireless with recurring of already opportunities. deployed in personnel seven the XX focus sole

to enterprise to expect local further deploy one market. four We sales additional personnel

this first intensity this second about to Fiber’s year. about net in capital year, of XX% expect be Uniti the declining XXXX in to XX% We XX% from half of the half success-based

down small Going net substantially our we be capital capital or cell forward, the to success-base and range XX% Fiber’s but manage builds, handful of greenfield in we expect XX% will to lower Uniti fiber pursue to intensity. continue a as dark intensity

We million expect $X approximately maintenance CapEx this $X million year and of respectively.

to $X at We with consistent of year XXXX activity about expect install million MRR. overall this be levels

year. the of pickup XXXX churn averaging to X% see churn approximately with first in a monthly We in expect the for half

disconnecting footprint. with About churn Almost fiber. half relates portion utilize sites expected sites to significant churn off-net dark relates that outside located the that are to core several related Southeast [ph] and with returning lit services of to one-third associated lit sides are sites from to companies of the converting our with a

of As earlier, incur churn Kenny related XXXX expected in fourth the result half - dark delays. customer of now sites the converting was previously of is expected XXXX mentioned in occur first the of fiber backhaul to quarter most backhaul lit to to a to occur that as to

links sites are approximately resulting dark increase contract contract on for a three predictable at remaining a years XX lit while As flows. an fiber of and sites is average lower the remaining approximately the are versus term years sites, total sites those net backhaul cash dark in value lit fiber backhaul MRR, installed a the reminder, more substantially in replacing

X. Turning to Slide

As XXXX Towers or for to tower $XXX price. times consideration includes and US noted cash continue cash XXX The in approximately earlier, those agreement agreed-upon XX off-take an of the towers deal towers at sell have agreement flow. annualized with we signed party an an to our build we same to sell million of

to the Uniti retains to extend XXXX. off-take agreement

only towers up of We be estimated our to and closing in early guidance April close the transaction the expect XXXX the XXX included to have operating sold in date. results to

The be our as reported expected of will be and $XX towers million reported sale adjusted is on sale US AFFO. expected excluded on of revenues, gain the XXX of real pre-tax gain to and the EBITDA a from accordingly estate

adjusted expect revenues reported about million. For to of $X with XXXX, $XX Towers’ year the full million be we EBITDA

the to towers in not expect sell rather included Towers expenditures off-take revenue sale. approximately as off-take agreement as part constructed recognized classified the the for EBITDA. adjusted as reflected we will inventory proceeds The through related held completed be realized as newly those XXXX, be and will During will from XXX capital arrangement. sales sale for but margin of be

X. Slide to Turning

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

Our to $XXX level million million expense an for offering. senior of primarily from deferred XXXX notes financing consolidated incremental write-offs. recent any year guidance the interest contemplates cost excluding full related interest from represents That the our $XX increase of secured levels,

interest financing of an quarter additional of term to the first in include XXXX loans. million will $XX for related deferred of the pay-off year Reported costs write-off expense our this

loss revenues Talk wind to of down adjusted consumer America and CLEC million We million end by business EBITDA with expect June expected our the of XXXX. $X of for $X

million, including be our Consolidated approximately $XX amounts $X should stock-based compensation business expense. to million excluding segments, allocated SG&A, of

to compared in approximately weighted shares shares XXX average shares million common to XXX outstanding year diluted million as full be expect the for We XXXX.

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

Slide XX. On

have reconciliation which some of year afternoon. my We results XXXX tabular provided XXXX to a comments full of outlook, this our summarizes

[ph] senior the $XXX offering facility all our February our outstanding to revolver. XX, secured of X.XXX% $X.XX of borrowings borrowings our million XXXX. proceeds billion The Turning sheet, offering on due of to in we under loan an used closed from of our outstanding $X net on balance and term billion repay notes were under

repayment with statements XXXX, entered for amendment going The related notes a to opinion. lenders our the and and - any became also borrowings. concern of financial waiver waives payment that including and related closing related We company’s upon default amendment effective waiver an into offering the of and

had cash we capacity. $XXX and unrestricted and year-end cash combined revolver At of approximately million equivalents undrawn

annualized to on Our leverage at times ratio EBITDA. stood net based X.X at year end debt adjusted

reinvest US of credit closing proceeds we in repay expect proceeds towers - initially to the assets. currently use borrowings the net but expect revolver we under ultimately and Tower to Upon facility, the our sale, fiber to

On XX. XX, of a payable our of of per record year, February to $X.XX April share XX Board March declared dividend stockholders this on

For allowed about be debt under to per dividends year common share, our stock million approximately tax XXXX, our $X.XX declared capital attributable are agreements $XXX the dividend XX. or to February including on

This excluding estimate our income represents gains. XX% taxable of year, of for this capital

reorganization will be developments our of key Directors occur appropriate Windstream’s upon the We our Board continue expect dividend policy our evaluate dividend emergence will and/or Windstream’s in Board at to made time. Any to our from as decision by bankruptcy. change policy

the With that, to call turn now back over Kenny. I’ll

Kenny Gunderman

Please of believe significant the infrastructure to prominent associated XX. represents We’ve annual Slide our realizes Mark. XX cash or with value economic tower gain this towers. times for wireless US our provider those approximately approximately million. XXX to turn of $XX million it stockholders sell as agreed Thanks, flows an to We $XXX transaction for towers

the towers business. Although, we we tower most are we’re exiting of own today, the selling not

Our focus infrastructure customers. other wide a solutions operating of will owning wireless continue while communications and providing premier a to and portfolio assets, variety to be carriers our of

affords but This continue transaction carefully the choosing. towers uninterrupted, in to a CapEx manner structured macro opportunity our at building reduced us

towers an wireless view unique part service continue carrier Uniti’s important of our macro XG We full is customers. offering to to

represents inherent between This sale business in based our trading Fiber operations on of and values public valuation. another valuation our tower leased example parts market the private tangible to versus our portfolio, of US ground our the American multiple arbitrage Uniti sale and sale of of the addition some Latin Midwest

with a approximately earlier. XX% deal fiber that deal Slide spoke are in leased like Uniti to agreement large owned Windstream the XX about dark Windstream. provides fiber. this rights in XX in of I’d we The represents principle a year full that the sold which to international summary our acquiring I IRU highlight fiber carrier of with

lease-up indicator historically, leading not set this good a this future particular proactively carrier. especially the market since we’ve to is able This fiber including opportunities of been to

a Windstream the including helping and the now making healthier and detailed asset, fiber XX, provides long-term many value Beginning accretive stronger, at fiber Uniti. as of tenant with are on overview the Slide become attractive Windstream a lease benefits well more time I’ll Uniti, our agreement master making that same to provide acquiring long-term that investments for

note healthier critical a infrastructure mission build to which consistent Windstream making attractive that our used of being yields customer, to relates fiber is acquire it our is tenant, or to to it’s important As strategy. capital at with XX% our support

expect at we Further, a this of agreement liquidity bankruptcy balance from enable expansion. reorganization sheet and emergence, Windstream ample for and and fully with while positioning will margin growth Windstream sustainable emergence deleverage

to XX. Turning Slide

Windstream Our MLAs number in will benefit a with ways. of Uniti’s enhanced new for be substantially

under First, covenants financial our lease enhanced the lease, lease. Holdings as versus including services tenants Windstream as the ability and as provides add to to both our existing security Windstream well

not rent annual as Secondly, consistently the aggregate will we before. change stated

believe we and strategic networks both sell value CLEC govern new bifurcating that and enhanced ILEC ILEC for optionality and providing Uniti the lease leases potential or Windstream, Finally, the separately if to owners Windstream’s while assets. the decide into separate master for two CLEC unlocks Uniti, diversification

of Uniti. the represent our diversification Slide of Based total XX opportunity the expands outlook, on XXXX potential our XX% Windstream today. for revenue midpoint on

the to approximately our diversification restructuring. IRUs the However, we’re half third incremental before million out set the a acquiring, entered represent the goal dark business you achieve were EBITDA of fiber as where and transfer to we you Windstream originally to the to if was layer to Windstream recall, shifts may less if significantly the and would $XX revenue, Windstream party, revenue lease in which sell total than from CLEC of

Slide to XX. Turning

parties million as owned strand rights third Uniti miles our lease that increases that currently Uniti are network. We’re gaining by X.X owned miles are third acquiring the miles to by strand fiber leasable fiber sell to part fiber not strand to well available fiber XXX,XXX these Together as parties approximately or lease additional today, XX%. million X.X of Windstream

and not but brings Leasing. synergies substantial Uniti Uniti with lease-up Fiber This national network only also potential,

for the opco/propco and footprint company expanded acquisitions. greatly opportunity also enhances wide Importantly, set our

XX, reference, recurring national payments upfront which network of frame on CenturyLink IRU and has a acquired of million a $X span As of of $XX approximately XXXX, revenue million annual years. in Slide of just in from contributed previously a two we lease-up

strand and the such roughly network assets miles equates acquired XX X capacity and a X as which or routes metro newly of times X.X not Our opportunities services, only. rights on routes, fiber current and to X the sold and includes million are the and to of small be haul CenturyLink numerous additional fiber Tier and markets, providing utilizing fiber all CenturyLink cells, long the able are which enterprise to sale tower

of mix addition, XX. $XX currently In IRU acquiring dark a Slide that contracts detailed customers on well-diversified today million fiber are we’re revenue generate as of approximately of and comprised

XX% This is Uniti. quality network, a with customers of required. Uniti is revenue on on-net to customer’s the is margins readable XX XXX% with existing near Leasing revenue acquired Similar this customers EBITDA incremental that our revenue to CapEx high the of approximately the are XXX% no existing also and from little of top lease-up

GCI illustrates the benefits XX, CapEx program. Slide of

over increase to part much to ILECs As passed as favorably business its should emergence be stated fiber broadband home its gig Windstream it more by a to to XXXX. X XX% homes plan, plan most service which to bring of national markets. it’s with enable today competitive other footprint intends of its most compares of the This to Windstream post than

speeds compares become X% contracts these will and and yield, will our favorably Uniti on as assets Fiber an GCI initial of and the to Slide most Uniti Our enable come highlighted XX. assets Leasing investments also Uniti with existing immediately which

initial term, to and year MLAs, the new upon fiber numerous ability In anchor the opportunities addition, based as we use new to Windstream will build an joint contractual lease-up during shared Uniti new customer. have under additional our XX with

biggest very lower flows. our it’s reached and restructured at very substantially agreement strategic leverage, principle we’ve had overhang to Uniti Uniti the but the we’re Windstream summary, assets enables In overall enhances a and removing to in Windstream. cash not portfolio of also This pleased much only historically, a has with thus with emerge agreement

Turning X quality highly owned XXX strand our miles of macro cell to service or in portfolio underappreciated. of small million The to XX. backlog over and fiber X,XXX towers locations either continues Slide in of almost be approximately

three We enabling XG components growth and set many of select the few come. are are years that one the critical a revolution, is these of sustainable to as the for for providers result opportunity tremendous

revenue compare Our shown implied many is valuation XX, other Uniti infrastructure lease-up will our continue favorably. believe flow provides Windstream’s When And highly to potential a to further traded substantial, of Slide The described margins. publicly cash these predictable attractive characteristics to substantial compared and as in we earlier material I at that drive with continue there discount as of communications for infrastructure metrics. initiatives on of bankruptcy. REITs improvement many result

now With operator, we ready are take to questions. that

Operator

[Operator from Certainly. question the Our Greg first comes Instructions] line Williams Cowen. of from

Your question please.

Greg Williams

question, happened a guys what’s last the had a my just Mark, days. about Kenny taking question Thanks bigger and Great. I in questions. few for

equity is markets worry that being favorable, drying markets I not the think debt the up. the possibly

means access could limited. be to Your capital

a of one sale way whether and guess of [ph] alluded you I to or [PE means talk alternative if that’s yours about the tower you Could accessing it’s intrafunds] is capital it? concern

sort customers, thing? of talked your question leasing my it’s have then coronavirus Thanks. general, about your is second concerns the whether going just in And XG, forward, to that you businesses more any delay fiber, on of concerns

Mark Wallace

start this I’ll And Mark. with question. is the Yes.

raise actually the in towers, guidance delever with the no capital any - the the we gave capital, US guidance on So so then actually doesn’t I our anticipate we based that so would today. of expect with raise with capital terms

We volatile been the capital over and private those had discussions contact routine as markets, sources track in you mentioned, few with stay the weeks. course have Of closely as pretty last well. and capital obviously

opportunities, we monitor announce to guidance. continue at those, time and nothing and to to evaluate discussions continue this in included but nothing have So

Kenny Gunderman

capital anyway, The thing limited only to access had need do markets to is, last and Greg. we’ve to that and - a so I’d the we’ve year, just we’ve half year fine. Yes, add managed

or And nothing so of prepared more, to and certainly Uniti that’s for fine. be another we’ll we quarters as several volatility look for forward potential new that, just we’re

the small not question coronavirus, seen We’ve any or to not to our customers. We’ve And seen to of respect our big our were wholesale with seen any with customers impact guess very with your which about any any or our we’re any - I haven’t With on certainly not focused wireless business customers see even that’s expect where I impact. customers. enterprise some if of would we that. really

But not seen yet. we’ve any

to doing right on making going precautions taken importantly, to as that more focused necessary sure very and We’re monitor it with are importantly closely all or we’re the we’re the continue employee things our base and there.

Greg Williams

you. right. All Thank

Kenny Gunderman

you. Thank

Operator

you. Thank

Our line JPMorgan. of next question from Philip comes from the Cusack

Philip, have you please. question Your mute. phone your might on

Philip Cusack

can you more structure can about the buyer? there? Thanks, guys. then forward. you What talk co-investment Can be you first what and the for towers least sounds It some about expand like on the strategic tower And at building of would sale? was going like investment the process there say

Kenny Gunderman

Yeah, Phil.

rather and to much the respect process the I with So this on at that not - buyer comment too point. we’re

on process. that the go-shop a We’re middle actually of in

good don’t have well, many buyer I say and worked we’ve to too comment talked partnership in much, other a not capital potential with sources one about source it’s we know that a is to that So times our current for but only of being the that of than us. past capital as the want non-traditional party

we’re And that. about so excited

we’re structure business. But not reiterate, tower the to deal, exiting respect the the to with it’s important of

in issuing that. in an of portfolio this And market liquidity order period to opportunity assets sale volatile liquidity add utilizing to the securities. we’re this expensive inject and pleased is capital really We’re to as a way versus a to have do good

But immediate to our and investing continue - towers off-take ability partner a selling arrangement at the premium. effectively, this immediately gives those to building us but

that return as sure do for option do through we’ll if and we then the we’ll in locking that that choose. a we beyond so And we’re the period XXXX extending and XXXX have of

our gives gives of CapEx important - so. particularly carriers, do towers do offering but offering also continue that strategically it light manner as we us to in to Phil, ability to if an part the ability our to macro it a us So wireless the choose our infrastructure

Philip Cusack

Got it. dividend then forward? about think Thanks. investors how going your And should

Mark Wallace

Yes.

think that earlier currently we’re restrictions million our year. I’ve pay the have I agreements, So in referenced we out allowed this to that $XXX dividend debt under

now or share. we it’s just dividend at paid per - $X.XX right a So

the that we’ll but going during forward, out dividend assume pay full $XXX the So would announce the year. million I we’ll

It’s bit So $X.XX the is to a actually quarter dividend pay shares. on year, quarter did of we what at first set based next higher right the little share fourth year. outstanding dividend set the now similar declared in the current to last in per we would paid where

Philip Cusack

clear. the ability wasn’t the to dividend? to ins XXXX, pay should pay versus I beyond about your Sorry, we desire tower And for and rather how a about that outs using than example. of going What your investment think for

Mark Wallace

Yes.

dividend. I at outside debt expect I I forward, the it our would currently we’re for to least would going So that would expect increase in would I mean, agreement, earlier, as limited. a expect primarily two I Once Currently, limitations we’ll that pay of that, continue said we’re reasons.

that of currently. any do. to also capital that ordinary - any able for not then whether taxable And for increase we XX% would the income increase income will able distribute distributions it gains - the taxable be it for would Primarily, to we’re

to groups, we time. least a that if those ratio. In we’ll payout it to a not has - those would future is yes say addition at in and I dividend a the think overall two in try think the comparable of will have more, to a items, see to to pay I want would reflective to means pay comparable peer generally, I’d the that, at dividend be also continue and dividend, what But we say, policy that

dividend ability indicates and the that something to a sustainable So AFFO dividend time increase grows. as the over

Philip Cusack

Great. Thanks, guys.

Operator

Thank you.

Our from question comes Simon next the of from Stanley. Morgan Flannery line

Your question please.

Simon Flannery

Great. Thanks much. very afternoon. Good

between the selling? On did you’re towers? keeping of the What you the difference and you’re all not why tower ones the transaction, the sell ones kind was

working inventory the CapEx, cash tower, and take in will what as so, And incur it’s do impact I might then how this the we it that it put the about sell understand running not off-take. then through think the be? that cost how of of and flow the Thanks. but capital whole does you long in building

Kenny Gunderman

I’ll of of a we’ve transactions direct over the of transaction the we but A or several part. your we we the things. proceeds to also might the secondly, wanted that raise. acquired to amount couple And as you - second of respect along part that. Mark ones we’ve Simon, of bigger effectively let to with One, - part brought newly question, a fiber through So, answer we’ve portfolio we been first past ones years where transactions but amount have built got our some just the constructing, sized with that either then recall, towers as towers, of

really we really so have And largely additional towers one constructed largely - but lease-up, one which are what monetized customer newly here of some the some one and customer.

things. combination So two it’s of those a

Mark Wallace

Yes.

of So that from the that sell throughout regarding to is The of capital. the time. periodic able tower it relatively be we’ll to structured completion period a closings time will such time the such the we short year, the will be contract working the that have

will reinvested quickly. towers new the from capital requirements and construction be in kind of existing be So tower - fairly working returned will invested

Simon Flannery

best follow-up. Great your here, guess What’s settlement of and timing? one the final just

Kenny Gunderman

question I think, so good Simon. -

we is the that is early I approved that settlement the think I hearing point. at be could there expect - think in next April, and

Mark Wallace

it’s Yes. Xrd the hearing April I settlement. [XXXX] to approve the believe for [ph]

Simon Flannery

you. Thank

Kenny Gunderman

Thank you.

Operator

back any the Gunderman would Thank of question-and-answer program further today’s you. like to program. the for This does conclude I hand session Kenny to remarks.

Kenny Gunderman

was you. your of you. We and beneficial Windstream, outcome by to mutually work, including both interest Windstream. those our like expressing involved my to further Thank that tireless employees Uniti and achieving hard updating look this for their close with calls. in efforts to Group in appreciate and everyone Thank future gratitude I’d on sincere you forward

Operator

ladies for today's This Thank conclude participation in program. you, your does conference. and gentlemen the

now may disconnect. Good day. You

Uniti (UNIT) 12 Mar 202019 Q4 Earnings call transcript