UNIT - Earnings call transcript Q3 2020

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Operator

Welcome to Uniti Group's Third Quarter 2020 Conference Call. My name is Sonia, and I'll be your operator for today. A webcast of this call will be available on the company's website, www.uniti.com, beginning November 9, 2020, and will remain available for 14 days. At this time, all participants are in a listen-only mode. Participants on the call will have 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 those to will to encouraged are refer afternoon materials company's on website, The you during this prepared accepted also the certain financial not call accounting were generally the will include in during with Discussions that accordance principles. measures financial the on the most non-GAAP dated GAAP measures measures can in comparable those found financial company's of Reconciliation to today. Form directly be report current X-K would Chief turn Executive I the Group's Gunderman. Kenny to Uniti to like Officer, call now over ahead, Please go Mr. Gunderman.

Kenny Gunderman

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

at our businesses, with another We fiber quarter have performing both successful leasing well. and Uniti

by deal the value our today prepared more in required national Windstream. regarding we including with my are see We demand fiber But driving meaningful wireless XXX,XXX later OpCo service miles. we're Uniti wireless offerings focusing Everstream. and route substantial I'll network is up underscored have transaction with Leasing, Uniti comments our transaction. this fiber the remarks reinforces anchor in of non-wireless strategic for on the our Fiber, This this national our lease-up that major on while At lease continue at announcing of to builds. incremental network, strong of our also settlement

leasable the from million one in Uniti with independent The providers spanning Uniti fiber the route revenue XX national and the fiber, third-party with strengthened new a During settlement with largest settlement XXX,XXX our leases. emerging in With Windstream states. of of XX% country across and third network quarter, miles bankruptcy. fiber, of $XX increase a is master in connection effective with Windstream's fully became was provides

while to employees COVID-XX, base our As to work we it within the working home, our in with of continue designation. from continue businesses. is field The actively responder see majority disruption to remaining minimal relates first our employee

was levels IP and levels there returned early we decrease in on saw on traffic the pandemic traffic a network our Although to pre-COVID then September. during leveled off, during

Our activity result not any and marginal COVID-XX service delays with cancellations seen as nor orders remained quarter customers we've third robust, from in activity. of sales install new relating insulation the a only and to

such our and As future revenues Demand any provide continue minimal. need and of government from grow. education of customers to industries usage be COVID reminder, impact strong XX% than continues less healthcare, those services. high-bandwidth as remains enterprise X% to Thus, as we from essential to the enterprises critical from expect technologies for

remains In customers for from markets. fact, demand bookings wireless a driven install these in at activity by robust, XG by in the broader in from was driven enterprise month rollout of our part critical record the Demand Fiber industries. services Uniti September our

our are the in Everstream acquiring IRU non-anchor and the earlier, network, part at fiber, high past mentioned continue sales OpCo-PropCo two increase I generated the during In existing announcing approximately capacity from we're total Leasing, the leasable to million our of from by of customers. transaction, quarter the the of we upfront leasing proceeds transactions will proceeds highly settlement fiber focus to margin, on today, years. $XXX our accretive we've as XX%. Over At we new Fiber leasing with both XX% Uniti including Uniti As opportunities. at were and up fiber

transactions. additional funnel Our evaluating is and opportunities, highly numerous sale-leaseback currently OpCo we're proprietary and healthy including

remains in-service growth one portfolio X.X X,XXX or the our quality opportunities miles underappreciated. XXX,XXX for providers miles new strand many the such route as for in We're sustainable locations, Finally, million technologies of highly backlog enabling critical cell as small of come. a in us owned few XG. the And of to of of that either are years and fiber result, select tremendous these components set

flow potential predictable lease-up and provides highly revenue infrastructure cash at with attractive Our material margins.

Turning to an operational update quarter. the for

As be up and builds, wireless anchor Fiber non-wireless wireless to I customers. leasing quarter, focus including additional the continues our at discussed Uniti customers last

the Slide completed As million, builds have lease-up four past years, later three year. major $X.X X be the wireless we've either will illustrates revenue almost over on the of MRR incremental sold times recurring this that been anchor or

that We is cash lease-up lease-up to-date, yields construction XX% we year, on leveraging major since having by generate million incremental we've lease-up annualized sold progress continue this significant flow wireless expected of existing Including see sold to approximately $XX of began our the to our network. revenue builds.

related only The but three also less well. cumulative greenfield and XX% customers. Fiber bookings We of Uniti during lease-up X% of of expect to and timeframe. Enterprise approximately anchor incremental wireless to quarter, these with XX% on underutilized over tier-two were of million are sales to four-year non-wireless we networks quarter quarter, the expect non-wireless yield our at $X.X yield strategy markets. continued in on to related the installs anchored non-wireless our These opportunities, related installed in XX% highlights focusing in select new of MRR continue gross solid from Uniti fiber We'll validates third Uniti nature relatively mission during within our markets, of was doubling and came the and quarter pursue wireless MRR mix $X.X bookings reflecting network. yield drive to builds competitive not sales continued initial approximately and a Fiber those of from lease-up lease-up the of highly our networks cash additional XX% a focus Fiber increased a million the upgrades. second projects, coming critical performance bookings as XX% our to still Southeast the generate the years. to and customers additional

transactions generated lease-up two past including million years. an to we've through IRU from Through infrastructure transaction, of over Turning proceeds $XXX Leasing, the our additional Everstream of Slide X. proceeds upfront Uniti fiber at and OpCo the the

We activities similar the expect generate to months in XX coming could XX months continue meaningful proceeds. to

fiber marketing acquire the our we've that of Windstream Now part actively we with settlement settlement. begun as effective, that is

a to continue from significant see wholesale As interest we our customers. result,

strategic represents value the Our revenue upfront contract fiber value, years sales fiber pipeline opportunities part million to deals recurring of the $XX acquiring provide and The of significant reflecting the of we're $XXX strands Uniti. of we're of strand of miles over million settlement. annual payments pursuing additional utilize IRU approximately utilize as $X several of these XXX,XXX that over total billion realized and XX% is be fiber the currently and opportunities expected

we've part does potential we're which When anchor wireless significant acquired in to-date fiber teams the customers realigned the projects to than cash our Uniti sold mix the We as of on not the yield the include generated address lease-up, Leasing. expect initial lease-up of at from we we targeting while million will the sold provide resulting right more effectively. ensure has lease-up X. $XX of Turning our of sales we to customers Slide revenue needs of lease-up This XX%. settlement, additional upside. major recently approximately annualized the cumulative anchor approximately yield with X% from combining we've doubling the to Uniti ensuring

and large Our and focus national Ortyl and international cable and national strategic on accounts by we'll other centers. accounts team carriers wireless led Greg providers, and as such data is domestic content

efforts our McCourt and sales continues wholesale local being further our and Joe of to strategy drive are several anchor salespeople regional enterprise led and wholesale, major markets Our incremental government. lease-up healthcare by wireless through deploy to into enterprise,

generating program the were part Our we're GCI now the as during made program. as under settlement our that first quarter investments revenue And incremental from with Windstream. a result, of

is for fiber generating our As a the being tenant. must threshold returns to reminder, underwriting committed including meet investments make, criteria, value minimal long-term Uniti accretive and certain

renewals. are program as Uniti's first in So tenant be to to The demographics, but the investments ensure for definitely only help home is broadband, capitalizing movers favorable designed markets markets. the being for to made network majority of investments demand and fiber many with are future-proofing on not these likely now, the also to of our future

yield come. that the Uniti such The near escalator under I'll With results XXX% year Mark. investments for X.X% in revenue. Our margin network to the qualify be over initial investment, program years anniversary the leases to of annual will that, be will making X% and at defensible to many subject turn call added an master at one to the

Mark Wallace

everyone. Good afternoon, Thanks, Kenny.

agreements of balance last And start expected then I'll financial been Our the settlement reflect certain earnings aspects became our quarter. of Windstream with accordingly, with the of the affect impact the of has I'll from of to refer provided major outlook how the call. our this estimates agreement the a remarks. statements. our elements updated financial effective And is prepared And Therefore, my during each to summary guidance components, our revised our various results settlement agreement. on the and

of As becoming effective. September Windstream ILEC are cross-defaulted million and received Windstream million We common and $XXX.X million fiber receiving as $XXX agreement closing, XX million. Chapter XX, rights The in with acquired with are cross-guaranteed, million. fiber we generating shares approximately emerged rent settlement to effect revenues consideration. At current stock, leases, bifurcated IRU annualized now you XX.X aggregate to and and which know, that from transferred in $X.X issued cash dark were annual of CLEC proceeds miles approximately strand on our contracts of settlement $XX concurrent

the million relating IRU purchase of to cash assets made $XX We contracts. also fiber and payments the totaling

accounting settlement and financial to purposes, identifiable the estimated we consideration and to the provided components are allocate of Our separable at their combine to that required values. fair generally consideration Windstream the

strand fiber Windstream. and assets third XXX,XXX IRU the of representing acquired we principally recorded Uniti of quarter, dark miles $XX During the Fiber million, for contracts

of the that million with $XXX our a accretion accreted settlement represents expect Our options discretion. term the to as reported as certain reflects and the are balance the value settlement $XXX interest to next being end months. discounted required at we will liability settlement of XX of make quarter valued to the at $XX component is obligation we over which over Windstream The to a the the million over next years, payable prepayment be subject expense, at be five payments obligation million sheet

of first October settlement made Our was $XX.X payment million quarterly on X.

has that Now emerged bankruptcy. from Windstream

straight expect approximately Windstream recognize incremental MLA's to GCI line relating to XX We months new the the next revenue of million $XX non-cash investments. and over

anniversary, straight under their year record investment we the we will rent is revenue GAAP, GCI will investments not time the the the Although incremental line impact made. until receive from on cash one GCI

out Moving to Bluebird.

our With Net review that, gain revenues diluted upfront call, position is Bluebird stake and of $X.XX. the provide and the $X.XX excluded of AFFO. AFFO of Uniti million. of our proceeds forward. million we July consolidated transactions transaction on million. shares of announced The from of today and other Last diluted ownership quarter on last our OpCo-PropCo quarter X of third close strengthen per X. is we upon mentioned transaction including $XXX generating quarter $XX EBITDA controls revenue to turn million book adjusted expected The gain of revenues expected $XX with closed XXXX. recurring to a I'll $XXX stake EBITDA of of $XX and please closing. related balance related in strategic going shares to million in of share million, Macquarie $XXX and to million the attributable attributable sell us Together, $X is million adjusted Midwest common controls as million reported $XXX EBITDA to of ownership $X we sheet execute Consolidated common I Slide million. segment second entity fiber for Uniti’s transaction and Kenny Leasing, adjusted them reported that AFFO to or in and common was of proceeds We our million of on network to of that income PropCo $XXX million entity common XX an per a the strategy that both transactional our As Bluebird well these $XXX the very Everstream At sale share, the costs. a generate to further in annual mentioned, results.

and of quarter, program. investments GCI deployed Windstream related the were miles investments capital, XX valuable primarily the $XX $XX to Uniti's including to deployed Leasing fiber of across Uniti about XX,XXX million During network million of ILEC own strand added markets. These

cells the X.X% of recall, our expected carriers master investment. in to on XXX size and expect million $X third Uniti the annualized during two costs add fiber in annualized have anniversary revenue. of deploy you As $X.X Laura to dark across turned made Fiber, small to quarter than our small making X% $X next million. cost. currently revenue. approximately revenue. of with over Southeast or turned our We small that fiber over yield of year At XXX an higher we wireless for about million will the $X.X adjusted are dark line cell XXX cell Year-to-date, over subject payments restoration were in the representing backlog sites dark and the are an fiber added and adding of slightly years, associated investments slightly leases to we initial have escalator one annualized annualized revenues representing Fiber footprint, core and million EBITDA investments Uniti were rent we hurricane the annual these The Uniti Sally incremental employee expectations, revenues margins to expected due with remaining lower while in

of to about deployment remember quarter been $XX third EBITDA the or the outs higher Macquarie due of quarter million part accelerated the and Bluebird compared than to related consistent the of capital XX, Excluding these include our build expected our in our When $XX XX% Fiber’s do that previously of transaction Midwest CapEx support Fiber, revenue in Uniti XXXX. quarter operations would approximately occur several and not adjusted on items, have of expected Fiber expectations. or million XXXX that third was net August year, to to as Uniti sold same with were that were XXXX. last core margins to results fiber success-based

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

our of guidance. deployment and We're remaining the for completed fiber be in complete expected two the cell dark items. this to We I'll of Slide X revising fourth small major cover to continued prior quarter our updated with the turn following our builds to Please project XXXX outlook year. and primarily

impact agreement revised of from Windstream. the settlement the effectiveness First, the with

of third revisions. last to other quarter the items transaction modest cost year and this Second, relatively related reported and other in level unit business

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

the with whereas XX, outlook guidance year of on with each of timing updated for guidance at coming the our the includes effective fourth Beginning Our following current effectiveness full XXXX quarter. our beginning have Leasing, Uniti settlement for we segment. assumed Windstream full prior year September the for our

master I at the unchanged we revenues will As aggregate leases mentioned, remaining recognize rental cash, with rent on million. bifurcated ILEC $XXX and CLEC annual

of expect adjusted $XX EBITDA excluding We fiber related Everstream and bankruptcy. post were incorporating revenue our XXXX, After the is $XX dark items, emergence are at $X revenues expect aforementioned approximately Revenue $X EBITDA million when contracts settlement became now and part million $X with adjusted assets transaction, to $XXX leases still mid line dark be basis XX%. contracts at and and margins selling annualized from to On million master we respectively from are adjusted to IRU as approximately respectively. the Windstream the expected we we point million Leasing effective. and EBITDA million fiber acquiring an of rent the straight and in all representing respectively of be adjusted $XXX the and GCI million EBITDA respectively revenue associated for the Windstream's period investments of including adjusted EBITDA we of relating and to the and million Uniti reflecting

of relates investments Our Windstream GCI of at are guidance reflects estimate success-based to which the agreement. Uniti $XXX CapEx million part that net $XX settlement million Leasing current of at

Turning to XX. Slide

million. Fiber the $XXX of $XXX margins full-year We adjusted of expect at now point in is compressed We million business. construction EBITDA our to revenue are outlook, for which mid our due guidance of non-core slightly Uniti maintaining lower our

we will $XX XXXX. a recur expect business construction [ph] to by reminder, non-core the of of annual not million and is wound year end in year revenue As the down this this our be expected

$XX would with year. occur with to prior acceleration expected in construction million expected to to net business, margins Due CapEx of is outs our year XX% $XXX intensity Uniti were next prior capital our previously the Fiber early second at guidance. build averaging approximately project for from that line about success-based expect up guidance. approximately Excluding this million capital to this various success-based Net Uniti our We for XXXX. the the be Fiber's intensity mid be of now point year XX% half be

to $X $X after We of CapEx do approximately integration not respectively. expect XXXX. million expect million integration further We CapEx

intensity. We deployment capital We have our focused managing on down capital remained Fiber’s some projects. accelerated Uniti on

success-based the net or in We lower. continue XX% to expect Uniti Fiber’s range intensity be capital to to XX%

as are builds incremental our and we pursue forward that and of anchor leverage dark existing capital fiber a greenfield to fiber opportunities intensity/ XX. drive Going less handful substantially Turning small lease-up to networks cell Slide

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

on to timing the the the settlement approximately as in contemplates of term to creditors XXXX for shares this write-offs. of deferred $XX now average $XX cost interest diluted compared including financing now in stock-based interest obligation be our Corporate of outstanding prior year, to shares a an the million, loans million XXX shares the write-off settlement million. excluding including first reflecting expense XXXX any the amount additional cost was full-year agreement. $X incremental consolidated of We $XXX our that shares related full financing payoff interest weighted $XXX guidance be Our year compensation allocated for to common million, in deferred includes Windstream of approximately quarter of million business to issued reported expense we at SG&A guidance, expect of million certain of Reported million accretion segments should expense. approximately part XXX and

expect weighted diluted quarter the of this approximately million average fourth We common to year outstanding XXX shares shares. be for

the to provided prior which reminder, our current ranges key this our XX, a are comments afternoon. our outlook, in components appendix for tabular to guidance my our On of guidance included have of As reconciliation a outlook summarizes presentation. Slide we

X. X, share undrawn At December Turning of out an cash equivalents, had November we $X.XX Board on on end, unrestricted markets, January XX, capital at combined revolver per declared of capacity. quarter dividend and payable cash to $XXX approximately to stockholders million the record

of ratio stood X.X times leverage Our at EBITDA. to based the end annualized adjusted quarters third the net at on debt

Following Windstream's agencies emergence, continued three well. rating all issued to [indiscernible] trade

We on refinancing initiative that to launch continue focused this expect to revolver quarter. our be and

As with attractive monitor turn that, we And of the and continually they closely a Kenny. over call reminder, opportunities. advantage markets to back capital take I'll

Kenny Gunderman

Thanks, of We've Slide for to Mark. with turn total entered million. into Uniti Please $XXX consideration upfront OpCo-PropCo strategic XX. Everstream to a agreement

proceeds, agreements, In XX-year to from addition receive annual X%. the subject to million Uniti approximately lease of Everstream upfront annual an term over the $X fees escalator of IRU will initial of the

of of transaction key annual settlement, As fiber, contracts settlement. a operations, transaction, million EBITDA. Uniti XX. XXX,XXX on are part Uniti states IRU owned XXX,XXX the sell combined the that acquired fiber several of Everstream basis, Uniti XX-year of $XX to agreements $XX Midwest, to annual Also XX,XXX a part in across eight Uniti route Slide two within acquired certain and revenue portion into million and Fiber’s dark agreed to enter as as on this the miles strand far is approximately things currently miles of as miles Everstream Northeast IRU strand highlight lease the will Uniti and including there fiber of With adjusted Uniti generate of Northeast

value transaction by to Uniti contract the million. total increases approximately First $XXX the

improves churn passively managed we’re from Secondly, services margins eliminates managed revenue. average dark risk. years twenty virtually any with only actively but XXX% the from and not XX% fiber This also replacing approximately extends to to term average four the revenue a lit contract years,

fiber highlights material and a to is the this network strategic this on acquired Lastly, up of value Settlement lease the Uniti. transaction recently

we lease up, end deemphasized our all we We’ve this low revenue continue fit do fiber continue margin, for markets. businesses. such these to on We in including or by of expect wound construction substantial as non-core high have which non-strategic sold northeastern profile our available not focus the down driving further in mostly In to of be recurring churn this business, operations to year. closing, that

down Talk wound CLEC fully last business, also residential America We quarter. our

nine low of average remains churn XX% years, result a our for now with term an recurring the As of actions, company-wide approximately is quarter revenue our X.X%. was and while of also

similar ready With these of in actively With working upon the the future, to now expectation that key Everstream and the of take to our deal and questions we're transactions we build pursue operator, metrics. are addition each improve to

Operator

with question Raymond Thank you. first Frank James. [Operator Instructions] Our from comes Louthan

Frank Louthan

Thank Great. you.

So that your in mentioned be the would includes the the all with and so have the closed that to you puts to takes current path does forth you sort just current talked transactions out and I guidance Mark refinancing include clear, Thanks. and of they covenant getting well? a you've assume – Is that revolver. restrictions quarter revolver. these of as for the different about all And

Mark Wallace

Yes.

obviously all next the which scheduled does to close guidance mentioned, Everstream, absent So as I the transactions is year. include

eliminate are would currently the in refinancing expect the yes, of that that the would terms any revolver restrictions In covenant revolves I revolver.

would were of we those that until basis. Now, to meet need issued. we net in last be on mind we are And leverage be those in effect to similar notes restrictions keep in the which will series also a primarily criteria get notes those in that X.XX the debt

they be revolver, meet continue them – until I wouldn't stay the the will in they but to in those be won't we the expect criteria. in bond So to

Frank Louthan

your getting outlook bit? is I Everstream about we what there? Does transaction do a think should for how this mean, help What you – that?

Mark Wallace

flows upfront there timeframe. by also IRU We transactions we market. and can doing different proceeds to just the Everstream don't Yes, can get get a time. get like cash ways so we the there. there partly specific there over We that give There's transaction want EBITDA bring additional over sales. capital by that in can growing doing I to can by And get or transactions

expect there there get when partly us just get to how get transactions – a on would partly and little would and XXXX. I when we depend But closed. So bit get sometime there opportunistic to in

Frank Louthan

All great. Thank right, you.

Operator

of Thank Sachs. And Feldman question next Brett Goldman you. our comes from

is now Your open. line

Brett Feldman

taking the question. for Thanks

that reiterated existing of winning your during sort focusing up on positive have remarks have you're to intensity. a you business increasingly can going You be on you your fiber assets the capital lease to where impact

two have follow-up I questions to that. So

Windstream would operating you And to it do more covenants, if but thought how of business can had situation. other the like sheet the be maybe without of make kind fair more debt why that capital might different seem thinking of way if of you have deploy And view equity the the would means it that generate getting that’s in light be then the term elements the kind a curious aside that the capital? about near the including the First, a mean, the that's the Windstream really of used predominantly into looking equity all second, all equity. to not it? some structure, off putting process and balance look never you can business probably deal, fits accelerate of resolve takes cap M&A, you markets of attractive fund I'm access for case the delevering, the deals terms just to helpful. way like if maybe We've that of of puts you've could with and some done I are on out completing residual you've seems in organically to you and you of incremental the your than cash

why CapEx So ratchet now? down

Kenny Gunderman

take you may your you I'll look Mark construction add. first away result, to to are our intensity as early I signs at increasingly, Kenny. first going pivot certainly you on is predominantly XXXX. the growing. see you you'll I lease want being effectively better think, that And And and going question, to now, business. up, this correct. organic lower and and – EBITDA your an going have when mean, see eventually, margins to by being from are capital greenfield largely of and But are an that starting but now de-leveraging to organic in are Brett, Yes, those instincts a into see

And so for using is past. as and possibility flow funding part of debt settlement, in strong the essentially new we've And doing M&A It's the and done cash something a something is business through which possibility. consider we're certainly the a M&A. equity I

to and I so right opportunities. opportunity there. of raising capital you question, are your Personally, are to right think radar other got your We've capital my on now. right, not respect plenty instincts I is even that think, And a just carrier they all when for opportunities. screen all equity attractive at put With alternatives work organically greenfield strong to of there's today in second or require we opportunity projects, a business, tailwinds through our And better. not but non-greenfield business, There's capital. in are and just pipeline both organically M&A. that builds the the greenfield strong And has builds been builds, probably never really look terrific

to For million projects really and attractive But on margins. that for $XX capital certainly increase the million million recurring projects revenue easily, wireless are easily $XX our that could of that growth. add today, have within intensity we lower grasp, capital I we year that relatively our to add our $X to take next and example, after year think, would could

confidence leasing want margins just to intensity be. really opportunity – what we level what And capital awards, our demand deal more and we to feel with of that deal and XX% confidence. success with greenfield builds, I cash those balance that is of markets capital balance these And a capital talked our pursuing want up particularly on anchor there. proven it's said, we've that between our problem. our our with There's of more There's be, a in it's feels remarks. showing because and how we we think sheet There's to the that the So about can and want but all a much and we prepared balance a great balancing with builds And with no I shortage no like shortage But of efficiency Board drive no we're great XX% flow. leasing in up the these demand. anchor opportunities. yields

Brett Feldman

Great. color. the Thanks for

Operator

of Thank David Merrill of comes Barden question you. next our Lynch. And Bank America from

is line open. now Your

Okay.

David Barden

much. guys, thanks so Hi

to got the in upfront, respect the cohort to So question you And any for function looking of are settlement wondering looking guys math X respect I buying Elliott minus a you've that rate guess cohort know piece. respect Kenny, those If working be question they transactions, and as with Mark if all you, of equity just term could, a $XX moving do of holders. shares you. are color, fiber the with value services the if any are underlying should that'd Uniti’s about to you're super are short we I you had with opportunities? new me is the I am, there revenue I'm getting maybe first and I intentions and question, And COVID annual second hold? what the implies they to has long contract million X.X% business things, in then on the many guess term, IRU slowdown have math think monetize for with there's last is on these see the Slide right IRU cost with that helpful. memorization, their doing explaining to these minus all Thank you been piece sense? yield. are I'm perspective permitting the the specifically of of payments; it Windstream, what I growth if a And there a kind they right this you how core from do fiber but that assume be I and all as wondering now? business, now you're And in of terms if capital selling I'm doing for the because if so parts those you're and would and

Kenny Gunderman

we with us. Kenny. With got as color your don't more, regular have bankruptcy. part have shareholders the shareholders and a to what the less some it's dialogue to good shareholders who give certainly any our David a On settlement, of respect dialogue share new very question we preceding the equity on there have some So want with but first

their think I come tangible Elliott keep is that a The with the lockup back And on one second continue. to to on one let you on their Mark year up we can I I'll come And one-year question. to – tell honest shares. So shares. there lock thing that, me it's but Mark, respect back will is think

third pieces. the you're David a moving lot There's On of question, right.

of part part of is because of of a this some lease of was just mode. is part pivot And of as this this and more mode winding of And construction construction, and up, of M&A. are the down these from lease businesses up because a because of part to

will lot XXXX, these rear get when of mirror. we view think I a be moving to our pieces in

and for Windstream's be more, clear So give coincide it the to want picture ultimately you fiber planned to intentionally XXXX. we'll able in do XXXX, to lot to the for much give end in coincide the changes nice to with be have clearer a exit of bankruptcy second when a that. the of comes take result growth question? from business. time a will we picture And with able Mark, process being that been And give guidance

Mark Wallace

follow I saying Dave, right. on Yes, math, about you're think what the

is at the was have total value, deployed. annual with contract recurring to just $X.X value billion mean, I math links we is I that value think definition the assuming total payments capital the contract if you total the with that contracts. the contract your times look

a be is deployed lease there's has here up network. because almost – to that existing this on there's realistically little very capital So

right, So we want back not and I is of call kind call, to the no you. incremental capital get if to exactly total virtually don't I have you deployed. work But when are is lease the There's value up. off numbers math capital but you contract the think deployed through with

David Barden

Perfect. That's both. helpful color. much Thank you so

Mark Wallace

Sure Dave.

Operator

our Thank Flannery of you. from Morgan And next question Simon comes Stanley.

is line Your open. now

Simon Flannery

Where can XX-Ks, Mark, you I evening. about financials QX noticed the us didn't we a the you was, be in $X And payments. anything also about tell much in a their stand of terms you Good year Great. over you, So, attach million would got a and I time you that bit. with Everstream on upfront from very in then help do information how great. could IRU? or the next we will $XX in just much. us call line, million $X think or year little And the wonder you how straight if accounting do whatever? IRU queue but How million I’ll monitoring of are Windstream, another Windstream's performance. get you Thank that

least EBITDA. the on? on recognizing that you're million Is about right you're $X a term which then ops, those other the near was that right Is in Northeast the think you from years, side at said of something losing million, So transactions? is, the way four think, for the the first $XX maybe year. Thanks. EBITDA impact And like it that I to

Mark Wallace

I'll so start Yes, with Windstream.

I to filing with part attach files… annual financial as And we of the quarterly connection filing. do in So would our statements, XX-Q expect then our annual their expect when

Simon Flannery

the XX-K not XX-Q right?

Mark Wallace

sorry. I wrong thing. said the Yes, sorry. I'm

exactly format yet. what of updates to can't as XX-K don't quite financial tell quarterly updates. but that of be XX-K. the the And be, on continue part annual annual on quarterly third expect we'll I filing our far that to information have will part So quarter give we as quarters, do XX-K including XX-Q statements as will filings. Windstream the I the continue give of then as our the we'll We you for

but – be I with yet, So you about connection will updates that. we getting to be in about wait – how getting all you tell that those how looks will can't

Simon Flannery

an share XX-Q, do those amended might with filings? you So you might

Mark Wallace

filing. XX-K with depending to an Q at XK And the end. or same information that may is The with it attached subsequent of thing separate do way, time or can a what year XX-K/A on done We XX-K. XX be the with the the available K separately information maybe

Simon Flannery

Right.

Mark Wallace

accounting. your And about Everstream all Okay. then question the

the quarter in second probably So we the that of expect it closing keep way affect and just mind would in XXXX, in terms of next year.

is So kind you a as of can kind – have you'd you – basis, it. through by me what let this get you work on of it maybe we so I'll revenue one would to give have EBITDA

basis, on we being So be $X.X the operations that are then that on get year on served the about subtracting an the on from served $X.X on of then of Windstream dark would you would that million to that on the mentioned, part at fiber negative million. – about there transaction, payments be as we component that And the that about will being And that annual a are $X well. annual Everstream, million. $XX amortization contracts that about a the payments, deferred would of as being an upfront IRU million be

XXXX. those would be revenue affect would the components that primary So

Now, close we year to mind, so take amount are a in keep full in reflect again, to pro-rider expecting the really numbers, April. those have transaction to

Simon Flannery

you. then revolver on it part part Thank update where be there? to And on of the that new Great. anything thoughts dividends a will add any like you're conversation sounds obviously negotiation the of with

Mark Wallace

that guidance to really a the decision call. we'll revolver discussions. communicate I would is dividend on make so Board the don't next we It's just give tied the into and expect think when much

Simon Flannery

Thank you.

Operator

Tim comes Barclays. Thank you. of Long next from question And the

now line open. is Your

Tim Long

two questions Thank you. just could. I if Yes,

small sales a slide color that opportunity mentioned upfront just then over next see on of what more loaded to year Could on expect secondly, And might a customer there you about cells that starting would to we the I pipeline. spectrum coming, to follow on Thank et leasing the the XG those we bit just from in to you base, could a the customer us get new wireless you. with buckets two? timing little cetera? like you any side talked And set. service if up and activity rollout, look you of be did back First that? little uptick or want are what think impact for see a any with give from And

Kenny Gunderman

Kenny. Hey many are larger first numerous because transactions, together cookie-cutter, your on on longer – in predict network timing, the and as these routes. Tim transactions, opposed are cases, cycle to these of your sales really On it's negotiated question specifically piecing it’s because are many because you're they generally solutions to transactions hard

a Network deal. saw of larger two you past larger were acquisition. saw What initially, I the specific in steady National on would you drip our we've So is smaller you infrastructure point however, cadence occasionally not and lease that saw we sort you And of one saw after the a deals or generally given up. the did deals what and activity to, CenturyLink guidance then you national then

larger cadence it I and the that you'll so little in and upon And I probably a steady think based the to here bit And then mid-size was timing see drip, funnel transactions. that's the good and show all said, based with a cross very, funnel graphically. conversations. good funnel, you general very a on it's But healthy, customers the with that we in section very funny carriers, which conversations see of

how be good sort is on, versus to earlier, And to many I at capital where a spending want strong in markets we're So it. take activity. of wireless we're lease our about respect feel was luxury on see point very continue deciding as up. to in very position suggesting a activity With to new actually opportunities we our

are nice and amount and a customers, to as two. activity activity. traditional our starting to Tier NFL because second. increasing maybe your both always it's in Tier we And all said markets X-ish place backhaul, addition we never have one of markets markets. fiber-to-the-tower, our or of generally to they see opposed in we're that are part that of to And small first And on a activity cells. set X-ish then just there, more eventually, see we're our across starting of been have cells an huge in cities small So But to be, coming the point plenty opportunity to the

substantial in for a bursting. it stages we're later So XXXX, perhaps, early But still cells it's small on maybe the in But too say we'll like of pickup. particular. XXXX, the see early into seeing dam now to just

Tim Long

very Okay. Thank you much.

Kenny Gunderman

Sure.

Operator

Phil our next from of comes Cusick And JPMorgan. question

open. now is line Your

Phil Cusick

and Thanks. point? I Windstream about fourth this funding took How that think XXXX that for down. you guys. Hi some the saw the quarter do GCI for at of both

Kenny Gunderman

that? to take want you Mark,

Mark Wallace

on investments. I year really XXXX don’t a next the a to to GCI $XX million don’t position give forecast So hopefully next year to have I do for forecast in have yet we you. a forecast be But for call. will give that this

Phil Cusick

money some where far? us Can so that you of being is used share with

Kenny Gunderman

Phil – there color more color prepared because it's remarks. a was Kenny, his gave I and some then can in he can little add start Mark

a have – lease the the are reminder, Just with accretive agreements, fairly And are in come for underwriting standards have tenant. is out underwriting fiber. as standards. investments in a which those they are long-term also be value the threshold they program to the public, largely minimum laid designed in our return is well upshot but And to to have

it routes for both new copper-to-fiber. ability we're investments to comment program some in overbuilding on investments have And metro a be over be the lot back far as building extending underwriting very we're our long-term be obviously And aspects current is we the quarter? that either there's part going to hand has in to But be the we want But built value understand upgrading going the And proactive spent case think the this a the potentially expect it's Windstream of have build, routes to on be seen plan cost our seen of that then do headline have made there the we spent of we've in are as CLEC, criteria, But of have where ILEC fiber you sort past efficiently the our will joint as us the the of for in to and some basically with it and And of to the business. into and so there home. it. business other is we fiber. a be where fiber-to-the-home, long-haul criteria. and network some So CLEC. accretive current to is standards. been the we’ll but those which a what some vast we What tying into in happy Mark, of and going the going investment majority

Mark Wallace

Iowa, Arkansas, vast I other Kenny think, miles Florida, number territories. covered were mean, markets. the than I I it remarks, that, in strand in I I markets of mean, But markets fiber in it Georgia, said I think prepared Kenny, well, XX,XXX in generally covered I ILEC But – was think think that – my we're Alabama, you different kind of ILEC XX a everything.

Phil Cusick

that that's I And And guess, that Windstream sort waiting deal line? Okay, was Everstream deals other in last close? helpful. me, wasn't there close of that so, Thank on we're you. predicated on the of Windstream sort Windstream that, waiting on the one substantial or that that from close, if fall can are now

Kenny Gunderman

negotiating with started had we closing. well with But the Phil definitely that Everstream settlement after knowing in we engaging advance deal settlement. of a the on

that have with happened would said, think So deal happened, I the the don't could have without settlement.

settlement anticipation So discussion well a in in closing. advance, but of started

that a for funnel. that been being bringing the There critically have certainly started sales through progressing us. conversations other have was So, the together point of the important part and settlement deal are

and in want model. And don't I to months they sales these started through any timing well so are them the many and terms have general very specific progressing are there, in guidance cadence, advance just but cycles, long give sales of of

Phil Cusick

Kenny. Thanks Great.

Kenny Gunderman

you. Thank

Operator

gentlemen, our now Kenny session. conclude to and like this turn back ladies And call any I question-and-answer you. to Thank does would for remarks. closing the Gunderman over

Kenny Gunderman

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

Operator

call. this concludes today's gentlemen, Ladies Thank and you for conference participating.

now may disconnect. You

Uniti (UNIT) 9 Nov 202020 Q3 Earnings call transcript