UNIT - Earnings call transcript Q4 2021

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Operator

Welcome to Uniti Group's Fourth Quarter 2021 Conference Call. My name is Kevin, and I'll be your operator for today. A webcast of this call will be available on the company's website at www.uniti.com beginning February 25, 2022, and remain available for 14 days. [Operator Instructions] The company would like to remind you that today's remarks include forward-looking statements, and actual results could differ materially from those projected in these statements. The factors that could cause actual results to differ are discussed in the company's filings with the SEC. morning are slides those encouraged this this website, on materials remarks call. you and to company's will posted reference its during The refer to were include the accepted generally financial will during principles. in also Discussions measures with call accounting that not the prepared accordance certain financial current these of report X-K today. GAAP on measures be found most directly to Form Reconciliation can the in financial comparable non-GAAP measures the company's dated Gunderman. like to Chief turn the to over Group's Kenny now call Executive Uniti Officer, would I Please go ahead, Mr. Gunderman.

Kenny Gunderman

in morning, X,XXX for Good added you networks fiber capitalize joining. in a you. order route valuable, today. the thank on constructed Thank new everyone, are was is fiber XXX,XXX for of in accretive more when most miles the Starting and route XXXX opportunities. and our of high one lease X. largest nearly a our networks with time to network national has highly XXXX, intentionally robust We been miles fiber on Uniti. Slide never country strand terrific fiber and up year At of

more completed into business XX% and with capital all leverage provide its foundation third XXXX, our The almost from to for net going XXXX We're our our lease-up the As million fiber increase more just are alone was networks, bookings connected opportunities full while intentional within fiber at installed The future continues unique even today, buildings, prior towers in and XX% generate $X.X by investment of million investments represent XG the achieved by for consolidated fiber-to-the-home, bookings. our since million exciting. homes lowest and when We've our nature. of demand In this we the revenue the mid-XXXX. year-end $XX consecutive and growth Consolidated fully macro annual to trends of at XX-gig generated $X third with network all including quarter economics, for year. level our XXXX passed intensity portfolio Uniti Fiber Approximately Uniti need year in wholesale. opportunity upgrades, operator increase proof, equally year-over-year. MRR cells, of a an a of setting new in XX% sold the expected for These is to is lease-up in independent of driven the backhaul wholesale are cells. focus anchor on customers with country lease-up. expand largest small small decline

the infrastructure As evidenced on on shared Slide economics. well X, tracking Uniti is

margins believe represents very important all anchor that successfully an anchor We're Slide approximately adding a digits. of acquires threefold business CapEx, effective minimal today mix and and the healthy lease-up yield or to years. cumulative yield our resulting increase customers high cash in wireless As single mix. we with XX%, healthy mid- yields new flow X with almost to of profitable the additional long-term and anchor in flow from X our high part a the illustrates a tenants past largely bookings within Uniti cash an way of fiber reminder, drive builds then for the economics. most

only increase new bookings of we positive earlier, of of story. however, amount part fourth quarter $X mentioned our our The third from XXXX. consolidated an million, consecutive of of bookings had approximately I quarter XX% itself, As is the

growth, in anchor the bookings which pandemic. height focus results flow X business, and this growing years largely is remaining average intentional wholesale, to our lease-up This of was show and COVID-XX which nonwholesale expect the new to and continue by term nature. and resulted on good a we a lease-up of contract X.X% that mix mix balance We part enhancement business with is in and economy predictable to and on swings margin has in cash the evidenced churn gradually focus during a This continue. uninterrupted of of and relatively outsized our are monthly progress immune AFFO

Uniti in from million bookings to quarter XXXX Fiber. the fourth consecutive of over quarter our quarter an MRR, increase fourth $X.X were the Sales level. Turning third and bookings XX% this at of of of

In prior continue we carriers. increased by over bookings fact, the from wireless strong driven alone from in see demand threefold XXXX to year, the

major for services wireless XX% bookings and markets. a consolidated month In quarter December approximately bookings our was Lit from of lease-up while of mix, all bookings terms the one only new the months record-setting in offering on for anchor of metro record came enterprise during bills. of highest XX

However, and margin-efficient we which capital to and terrific metro have access in growth markets fiber represents XXX own potential. nearly

Southeast fiber Given these opportunities, lease-up XXXX growth the footprint in beyond. only could our facilitate we're markets anchor prioritizing these expansion our traditional acquisitions success also that in organic growth accelerate but metro of for and strategy, actively these metro view to outside proven as We markets. markets both not

of Uniti Slide to In making X players market of Turning million Leasing, us continue to largest fiber, in we the one miles wholesale the actively strand over X. fiber market.

nonwireless our national customers, Group such carrier the as MSOs FAANG continue expand as cloud-based to active and services. -- national their they be Our

dark million of infrastructure route long-term For alone and utilize long-haul leading miles metro announced approximately fiber million existing of contract have we carrier of These our example, IRU and recently revenue. deals $XX international represent provider. annualized X over network, a $X value agreements fiber and an X total X,XXX almost sizable with

Leasing consolidated as increasing number call network customers report last consolidated mentioned that, and leasing one expect to With Fiber we both a that to marketed although X I Uniti on X trend the Uniti continue. As quarter, to solutions An Fiber fully of Uniti encourage customers business. and are businesses and we fiber now mix separately, of -- networks, our I'll turn are Paul. and and over

Paul Bullington

outlook full Good our of by and followed business year I'd and XXXX overview of everyone. consolidated quarter Thank for basis. by review morning, performance on Kenny. each XXXX this fourth units to morning an like a you, a begin of our providing our

Kenny better, greenfield to very and strategy been our The industry Uniti. leasing recurring As high-margin while continue have with successfully fiber strong a our revenue time never was same XXXX attractive pursuing execute year at of new on we up opportunities, existing trends mentioned, our for builds. the network within

of this is just reflected that All in more in guidance will cover our in XXXX bit. detail I a

revenue on million million, attributed our Slide to reported quarter. turn Finally, with I million, current sheet consolidated fourth amount common agreement. from other the and lease I'll quarter on We transaction adjustment $XXX related the EBITDA EBITDA associated Uniti dark million as Please Everstream acquired straight-line revenues prior settlement from and straight-line a of shares subsequent Leasing our start consolidated of X, commentary AFFO we will for provide income capital and structure. the to The part adjusted with comments an of adjusted $XX approximately balance margin $XXX rent and common adjusted per recognition the revenues assets Leasing, contracts $XXX of quarter shares At share or reflects Windstream fiber in annual achieved noncash the was IRU and growth EBITDA attributable $X during IRU and the Uniti year-over-year has to of respectively, fiber the MLAs the Windstream, contracts we the Net up year. $XXX for fourth of our from we million, common our agreement, diluted onetime per of the AFFO X%, to Accordingly, settlement and and million quarter. Windstream escalators $X.XX of million segment investments X% of the share. to $X.XX. reported $XXX under acquired XX% impact the of diluted dark GCI

adjustment, revenue approximately revenue grew of X% for Excluding the and straight-line the period. adjusted X%, impact respectively, and the EBITDA

to X. Turning Slide

positive Our continues growth capital perform within results Uniti. for to investment expectations and program our yield

fiber gradually newly fiber-to-the-home. resulted legacy increase route being have to tenant of capital XX% of improvements the tenant has over network we past XX,XXX commercial invest billion with numbers mile fiber $X continue materially invested they quarter, of its our to fiber, each valuable fiber approximately will of long-term Collectively, fiber. and capital years. last in over parks in network years. X largely and focused Both coming own copper reminder, highly a these overbuilt expect increase constructed the including our on these and investments in miles Uniti continues the value-accretive As in

fourth deployed the own network towards GCI added markets. These million of investment of all $XX X,XXX investments the almost to Uniti with growth approximately GCI investments miles initiatives, program. route capital Uniti's During quarter, the Windstream across Leasing different around to relating several fiber

the adding under fiber Uniti capital As date $XXX route Windstream, around XXX,XXX network. miles with million miles of of and GCI to December invested to program XX, has our strand over of X,XXX

At approximately we annualized X.X% added a The Fiber, of master XXX small escalator These As subject have at a leases we for generate the be such of the made XXX% quarter. our investments. are $XX installs our to annualized ultimately They margin. these wireless an to footprint added fourth will and sites million over cash nearly lit $X.X cell across investments at resulted yield Uniti carriers and initial fiber X% date anniversary backhaul, revenues Southeast dark rent. during the reminder, of to making approximately Uniti X-year will million. turned in investments annual

backlog we around cell XXXX, dark sites, of represents deploy and to that $XX adding an within At during annualized small full X,XXX and cell $XX.X annualized We XXX million the backhaul, currently the quarter. $X backlog the wireless next small revenue. few lit dark remaining million For over our incremental have reported in installed Fiber, backhaul, This expect lit revenue. million year Uniti years. we revenues of we fiber fiber of sites

our early was $XX a for below quarter again fourth in core fee. to once of the Adjusted EBITDA line expectations due expectations, recurring with of revenue timing the were representing While million, core margin revenues was nonrecurring termination XX%. slightly

million fourth improvement For adjusted XXX Uniti CapEx success-based the EBITDA was a point basis XX%, the Fiber was XXXX. from in margin $XX XXXX, full net year quarter.

$X incurred about Please turn our cover to and or X% also guidance. million now revenues. X, Slide will XXXX maintenance of CapEx I We of

Our forward-looking acquisitions, materially costs transaction-related future market XXXX results outlook other specifically statements. these differ herein. future Actual could and transactions mentioned capital not and excludes from

each outlook the for following year Uniti Our full includes with for Leasing. Beginning segment. XXXX

to and EBITDA with include revenues each XX%. related midpoint, adjusted $XX GCI be expect $XX lease and million, $XXX respectively, EBITDA We associated the straight-line million investments $XXX EBITDA the cash and at to and associated investments. adjusted Revenue the Windstream and rent adjusted GCI rent of of million the margins million master with approximately representing

relates Windstream CapEx markets, time. the with of midpoint X, expect our we substantial X of Tier million are deploy GCI are the GCI which $XXX guidance, where making of investments. investments to Tier million our over We own providing at opportunities markets $XXX to of estimated Windstream success-based growth similar to Most

XX. Slide to Turning

the XXXX. year When Fiber adjusted of for May transaction EBITDA $XXX Uniti in to lease-up and $XXX and is expect the for leverages contribute reflects our and Everstream to continued adjusted million Southeast strong execute growth adjusting footprint. and occurred We dense midpoint XXXX, growth This that the year-over-year our of on fiber full that existing at revenue EBITDA X% X%, million pursue respectively. efforts revenues

and mix of due this our recurring a at ETLs of installs, can year in CapEx our do that decrease million and nature, onetime of revenues to Although of success-based fiber is at revenue the lumpy is $XXX to be bookings timing to for guidance, from levels expected equipment activity nonrecurring as the fairly Fiber our Fiber predictable our delivery. midpoint the and XX% XXXX. the be Uniti and sales in Net out majority Uniti call I such want sales

Turning XX. to Slide

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

expected expense guidance business for approximately million million. excluding contemplates our $XX amounts be SG&A, year stock-based of consolidated approximately million, is full allocated of expense. to Our interest compensation Corporate to $XXX including $X the segments,

million common shares weighted We to full for expect outstanding be average shares. XXX diluted year around XXXX

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

debt debt successful borrowing our we our refinancings costs several expected improved to flexibility, now lowered executed annual cost have interest $XX million in in our XXXX, extended with our financial years. capital over we structure. the by maturities Turning substantially savings Through significantly and

and relates attractive to capital capacity. combined of expect At advantage capital. as taking and improve continue to cash undrawn $XXX cost cash further it We had approximately opportunistic million we to monitor year-end, markets of and our equivalents opportunities of unrestricted be to revolver

of Yesterday, at since stood on April X.XXx a stockholders $X.XX mid-XXXX. which, annualized the ratio leverage per XX. to our of as net last been has X, on based Our mentioned Kenny lowest share it earlier, record declared EBITDA, debt dividend Board is April payable quarter to

including stock this approximately for now over our estimate paid turn represents XX% We currently $XXX to This attributable be and tax distribute in our of capital of declared year our the to our that, dividend to dividends I'll the taxable maximum January amount yesterday. gains, year, we under million, is With the XXXX one expect capital income and debt the can Kenny. excluding call back the agreements.

Kenny Gunderman

Paul. Thanks, XX. Slide turn to Please

past gotten we've few questions the many the lease the Windstream in made the renewal months, rent master about disclosure XXXX. of Over regarding

So wanted views. Uniti's discussing spend to I some time

value de were of market residual used assets value settlement is of The estimated has estimating to part neither is methodology nor under utilized disclosure the in renewal renewal, Windstream at therefore, the professional the of rather received short, required consistent their is in network used The mile as the incorrectly first value, current their well on a value the the than in our route basing Windstream agreement value miles. fair undiscounted column when rent. an removed their by value a the by analysis time effect Windstream not assumptions CLEC purposes XXXX. as fair and shows fiber fiber rent. that the estimated assumptions the Uniti basis minimis rights compute market as which reflect the analysis on of the value for of MLA using the using incorrectly CLEC In and calculating and strand with appraisers’

that the be slide to rent with used million. assumptions the X To Windstream's the of other we keeping consistently be inaccurate with aside, the XXXX an appraisal assumptions correct renewal must the consistent on which annual methods to clear, the were implied approximately $XXX appraisal. MLAs largely was unchanged, shows if all as column state the these that increase second report, for The would while calculated XXXX in rent

XXXX appraiser regarding column program The assumptions other in third by the methodology this This it In calculated to growth the applies but column makes X also of conservative around rent and big those reasonable the not estimated represents the only the XXXX. annual inputs. reflects in investments. GCI value correctly, view, our assumptions more

implied you of In fact, the of the annual higher as is the investment, utilizes the Windstream if last million. column rent billion entire slightly growth illustrates, and over GCI value assume a $X.XX in rate the $XXX

precise years our confident MLAs clear based do Windstream not higher While are a from and the independent appraisal function renewal the that today, be X we reports pretend in trends is we to received, what the on rent the rent know we've than the will industry the language claiming. favorable step in

M&A. to Turning

could we're to and in continue tax we value tax-efficient with Board Windstream our manner. manner. spend We efficient now confident assets separate upon evaluating time our businesses ability in non-Windstream a that work, to separate Based and our our a

for our value highly valuable we that avenues multiple optionality separation, enhanced Uniti definitively believe M&A are While accretive this not assets. suggesting we the will we provides do pursue with

themes that still are is to true for we strategic value not current us Uniti reinforce Our transaction are transformative a these confident only but that possible. accretive discussions

operator, on we're as from As take we the to looking I now positioned the close trends been forward to space never prospects them. questions. that, in we mentioned at for the an XXXX. uniquely With communications benefit and XXXX, better, outstanding outset, have infrastructure to The remain the ready books we're

Operator

comes from Cusick Phil Instructions] Our [Operator question first JPMorgan. with

Phil Cusick

I A couple can. if

like in discussions use second value smaller deals the let create The more either your that meantime? transaction, with just evolution you accretive or Kenny, can First, transformative comment to value follow up, me on any a that things on ago.

Kenny Gunderman

dialogue our months so. more the recent X the yes, prioritizing we've or in larger definitely recent meeting past transformative-type transactions Phil, more in been

say discussions probably think value-accretive And so in and would I regarding confident messaging opportunities. advance it should to of remain we I those at leave continue the those a that in But nature we material way that. our

Phil Cusick

move and something line. in maybe timing don't is terms doing get this in listen, the X Is But we perfect that the there time to a if time in get meantime? drive there's value that a there smaller mind to in X, next on your never deals it's that, back quarters -- done of

Kenny Gunderman

talk lot. Phil. a Yes. think We it We question, about Great about that.

I perspective, from has core the never better. think -- our been business our

Liquidity never Our never balance better. has sheet been has been better.

to give patient So the all of strategy. those but part ability things shareholders be us M&A also recognize as our we an always our valued important have of

ones, And as bolt-ons. so larger well including as smaller opportunities

think for back that. so a great really And get we We good it. to at to platform want We do we've it. think we're got

now because I time that us a limited But for right is critical to said, with think all shareholders ingredient the line. value. important So there patients is for unlock that's that

Phil Cusick

then bookings in dive into on that business, against the new consolidated the above were, Can line from And the bill acceleration 'XX. imply time Okay. netted revenue? book I think, you mentioned to does XQ eventual you an sales XX% and churn,

Kenny Gunderman

working I'll Yes. in we probably of the didn't lot certainly comment in business actually But Sprint too. so. -- XXXX. it, certainly I Phil. our see of on think of but through Paul it and a XXXX, the mean some let we're this, bulk see I churn that going we're in we to today,

ramping some that masks not And that, up forecasting growth year. you're see I revenue really an of much from a But going to year. this also, the yet. acceleration. think haven't So that beyond we for of perspective organic seen this We're DISH

coming if But so anything of and to see together, add. to in X have XXXX. Paul, the that to more things in quarters start you And those beyond you're going jump

Paul Bullington

right, that's think I No, Kenny.

increased bookings are result -- enterprise our activity. think as acceleration but a think the I in business, seeing in I of we particular

puts going definitely the that Kenny of -- kind we and while wireless pie. are see takes the go said, as we on. I the some masked agree of something expect by piece larger like So that of is acceleration that's that And larger as do forward. to smaller a

Operator

James. from Our Frank next Raymond with comes question Louthan

Frank Louthan

for the Windstream confidence to acquire do If GCI looking their why approached has of to And and that not by that of up you that your -- could all locked on separation, then some assets. comment the year. want chain even make supply the you complete are some to program they the part the need entities that needs they work have might separately, the

Kenny Gunderman

probably But that value intrinsic the dividend, attractive a that like markets there's we attributed than us of a of It's Frank, grow to and business, been we yes, invest allows of put there's on accretive, on see. business We a it because to think look, shareholders. think our we for of our markets we MLA markets. our perceived the applied -- value in first pay a an their because well-documented Windstream. question, And that. very arrangement put lot cash just think public And overall don't past debt, it's I public reasons that the it conglomerate the of your several have level all, think we commercial service a tenant for health. that. -- the higher with nearly currently And the at there's first business. the our history years our are the discount a valuing we over But think private have to value we

that the way. in especially think as we parts in these we that so see a of result monetize a our among And of us fact allow to interest private that I value-accretive there's fiber-to-the-home result as think market, the options a business of and days,

like pursuing be options. And work us sure confidence to the the so gives in make can done preparing, efficiently background tax that groundwork, those that options doing

also on business. of methodology different short valuation And terms past looking we've some it Frank, so of we're value in the version it. our that's dovetails with to parts the at why trying the about talked highlight the really And in of

them so shareholders to much there. some there as we have And paths just wanting that can give understanding information as are forward and

we dashboards. saying or paths, definitively but won't will have your sure we want lot we there. respect don't . those second So question, pursue a share people's to they're can on we're to not we With make

to short. hopeful amount. forecasting that deploy came tell full guidance, are the We from a little Last GCI the you in as able amount of will Windstream be full year, can the we're it

versus I the million million. think $XXX $XXX

could So to be it million. that certainly hopeful amount. able we're deploy But to $XXX the million we're $XXX full

Frank Louthan

Or come that? of short And or did in supply it was reason it -- was because the issues? the what chain for

Kenny Gunderman

rank decisions a of markets. say Frank. making vis-a-vis, variety things, is perfect we X wouldn't to that any highly, and I thing Windstream have about capital, non-Uniti where don't deploy the I'd that too into other visibility

But about -- sessions I good we're and of we a $XXX have range the And what deploying in year. visibility this have based funnel daily, million million capital. weekly, upon their that. monthly just we the with see into lot don't team visibility on on, pretty So $XXX this for to confident have

Operator

with next from comes Our question Barden Bank of America. David

David Barden

small faded. And long ask thanks particular for Slide sale and of seemed perspective, is this last options value emerge the you from And -- to to there And a is been went that with One of that kind your to a to in late combination possibility the and and is couple of miles kind back with a for conversation questions a you've XX. could. it Or I stating over year say large I this guys of process for to recognition want Windstream like be of now it's path shareholders. shareholders X-way your I if kind that extracting are obviously, fair time your of mean forth? stock that of the which idea. going seems around that, for presentation open XX there's with? fact away perspective,

Kenny Gunderman

year, obviously. last won't deny rumors I or David, any Yes, confirm from

I strategic continue. as our prepared I said conversations our remarks, think in

they developing on optimistic our about dashboard. nicely. opportunities think very We're are I

doing that. We we'd of And value disclosures not into that rather negotiating get terms publicly. do to so not I think or prefer in

disclosure. questions a shareholders requested last the tenant Our lot us a about by make of our disclosure frankly, this duty today is it to made and, us feeling a shareholders by really year getting our to of and and lot disclosure result of

a So question, to too and I I want all respect back is with don't a to much want don't into -- one, which good the forth. get to

David Barden

Okay. paper be some which you've out mean got I question you for there. -- or second high is relatively mean my either maybe would Paul, I coupon

-- had X-year concerned as you your XXXX, be kind and paper that you to guys X guys Have the how do have Is successful into with, to And balance all think that and pretty optimize go at come November come October. to knowing about? this in that are think you something should up this You a arbitration impacts the that of with financing this say, values ability your creates in about about sheet out. uncertainty own conversation thinking figure you and it? market we

Kenny Gunderman

on on can Paul I'm more I'll one, worried comment Dave, about actually it. opportunities. then Yes, start and near-term not that

I is It's for us our perspective important think that disclosure important. our there. to get out

for do. it, a Our it's And of I time mentioned, disclosure. that's think to for line to there's XXXX, point we have that to the view, of get evidence and tend it. time that I validation understand -- our you and support that XXXX show lot us is of between we've ample gotten reaction they investors important the think opportunity from now our proof the And which

want you term. I think, markets capital about comment So near just it. Paul, And worried on I'm if not to

Paul Bullington

remain to sheet we Kenny. balance to to to the totally in continue capital a and I there. business. I the access No, -- confident Sure, our your optimize ability agree in Yes. way markets with the that's think comments optimal We're

and of so. think bit maturities XXXX comments, volatile of cost a term, we're terms to just be we're very opportunistic. and the We it's In to at in be moment. the what continue out work short markets capital did do our to opportunistic push in the lot I to much going a are going of my said further, sheet, I continue balance lower in to optimize to Even

in mentioned, So timing that has we're right. that coupon of continue David, optimize and to sheet. on But be when is right, to right ability paper balance opportunity got high in economics The confident continue you has your be the question. got our our some to transact to to

David Barden

between the I guess and Great. lease. circular that, the of of And kind relationship from just investments smooth and kind in Is Uniti just lessor the working now the Windstream on boardroom kind relationship GCI tenant of of then drama. then light relationship Wind this question with has type building relationship of higher-level a my evolved to last with the

Kenny Gunderman

David, I think day-to-day constructive. working is the relationship

We have very large AT&T, Amazon. with complicated DISH, Google, Verizon, T-Mobile, MLAs

to overall so circular and the the the just with But and is relative it relationship of Windstream And complexity size and complexity the because front of our center of nature value our lot company. of it frankly, have. and a other true dissimilar the infrastructure not that's the and of circular we MLA MLAs from large a of of lot other nature is companies that And their relationships. the

out issues to with. some the on think with deployed year tenants. was on of this our program to deployment. and first deal the unique And the is back I mean to topped the questions earlier grind last a full about day-to-day a went we're of We deployment. in it I year, amount it dashboard accustomed and and -- GCI very the think There's always So bump the maximum I almost a it's great. for

some very with very relying we've which I we're obviously, rights. think upon decisions think is approval making nature investments we that positive we're made. the happy And supportive. for and being that is But very Windstream part, we're the decision-making, got most there. the their think We of good are

think day-to-day, in But work to forward clearly, that to it's accelerating looking we're and things XXXX. through. well, working So I .

Operator

Our next question comes from from Greg Cowen. Williams

GregWilliams

and recently, past. messages. the But and public mentioned much you've disparity Great. very more in heard private the Kenny, hearing you multiples that so mixed between we're

DigitalBridge areas could be fact in of in yesterday, multiples was private common Specifically, [froth]. mentioning competing that some

if thing. the same you're of Just kind wondering seeing

Next on your question Services is just business. Lit

the what strategy for success that wondering might that you services. moving and be and be products more You in just the up go-to-market I'm mind? said stack have you'd lit the and the

Kenny Gunderman

the about Greg, services. there glove comments referring bit We're markets XX it's our services straightforward we're the wireless --but part, made I growing XX business XX% your XX%, high XX%, This the to relatively it's And type that. enterprise these a and services. the with returns second for in low most that's Internet, it's white overlaying boy, are year, But lease-up when question. Really, simple, Ethernet what about about of straightforward critical managed services do on builds. in And markets. start, what a little -- offering office CapEx to expanding we're anchor is currently very outside margin really to very services. I'll It's strategy. business. our driving Yes. the and lit We

us offering XX are lot Southeastern Texas, geographically we're but there's et that them out the we metro into we and a -- X about them a capital-efficient with just Oklahoma, fiber in markets, lot country, many around Arkansas, fashion. of markets of a in XXX enterprise business and owning X contiguous grow footprint, Tier in that markets, think So there of cetera, expanding to our and margin-efficient opportunity Tier to

pretty and into the question, from expanding enterprise lease so not them really ebb your to necessarily simple. it's hear interest think markets and up much, I I With it's of to and didn't keeping I'll it's a private point. the not some adding comments flow, straightforward new multiples suite listen that that first and So but But services product yesterday. look, reflection at Mark's parties. respect market

more deals on commanding higher in own And have parties we've assets new ebb recently, and And infrastructure think a multiples. their more of and years, past assets to opportunity X the a or that really They've that's assets multiples just those is of diligence that commentary some predictable. those the operating lower the on become that assets. of across quality these that fact commercial to a large are X commanding and become are wholesale quality percentage more those done the I and or higher-quality had still versus quality, that's over that space meaning higher on are think have therefore, quality. buyers. the networks think seen a it's businesses revenue of I and that businesses, of I with reflection home, fiber a multiples. they and of high fiber smarter those And But think own be the years, large some percentage types the familiar revenue higher-quality whether contractual assets premium of of flow funds on I just the still complexity assets, entered they've these the have putting X actually many -- the net, cases, in fact

be it's don't quality the view think the on of our I private . smarter, changes they of might valued our getting assets assets in just value think our the So the I but and a market. of that industry as reflection

Operator

[Operator Instructions] Michael Citi. next from question Rollins comes Our with

Michael Rollins

annual what just rent range looking slide, bookends each conviction to disclosures Uniti's base go establish? to that like you'll with for from counterpoint describe XX, the back discussion. the want seems the up the information level or slides forward of on to And that are to and rate Just months, as describing the over you've the last to regarding were where an a that investors, versus engaged the is to had It exit certain there And Windstream. finding Or in are you as end a discussion is situation, are? this certain has the with few people the look leasing implications then independent just their in a investors you numbers, at relationship the investors perspective other's Page in you're on will want of again second cash slide? point and each rent XXXX on earlier call, the side case aspects are should of those as taking the the expect there help somewhere there's understand large question of between the gravitating the at

Kenny Gunderman

me a the let you of about with to second start or those of will. one to if anchor Michael, to question Yes, range kind columns, try -- people

be by upon analysis time. in trends the based the be done of based But in analysis hypocritical we're we us industry and to good be on around. seeing, by of XX remarks. years that great any know column and the rent that I because at upon is let be done a going dependent recent of back to based said will -- that that It's analysis, renewal market in and we've We're appraiser way, my in the XXXX, disclosures value the back upon quality to what a these a so anchor professional the place will third reiterate what not that say me of the done it's I've what was think fair pretending Uniti. would think be that. or before deal going that assets prepared with was precision do the That to Windstream to XXXX made the by analysis,

And So it a it predates and of at current credibility, more my in gives that least think little point the view. all I counterpoint. back-and-forth

is think go that so see too pointed refresh program. and there depreciate And one there on depreciate when and like much how that CLEC there how or we on so the the and analysis, analysis definitely going could for debate scrutinize and But assumptions are we we and are conservative, the you the others forth. we that in in GCI out in that of to much will example, decommissioned speculate copper of be

are of what that's on and move points but that the We different continue. we'll question, will counterpoint, the probably into continue. with probably of view a debate, that recent that -- think confident we're back professional what's especially frankly, point was We'd point -- happen on, forth. and our there our I'd look, was in rather probably refresh reflects and XXXX, your wish I done the here years. get certainly our in reflects And and wouldn't. And given agree. -- think not that very disclosing think and first done is going XX we're kind it analysis to and column I it from XXXX a will With before conversations view investors, of I our -- rather and to analysis said, So accurate of on your appraiser by Michael, to some I about but important anchor around, good lots

Michael Rollins

just quick in could other throw one I if And question on the balance sheet.

press that there's any those on in to through and covenants was front. release. noted release think are the press have limited opportunity just I And it leverage that new was that relative net where if perspectives to get debt the payment X.XX curious to you -- share the dividend the

Paul Bullington

one. Michael, this take is Paul. I'll that

quarter I mentioned number. that a annualized my last comments X.XXx the in is So

debt X.XXx. Our number. that around a for And based XX-month trailing year-end covenants was number are for -- the the most

And I'll covenant so that is -- remind you. and X.XXx, level

for think out so. or hit, to I'm expect So comment and towards a exact that prediction But our we think not continue covenant. on quarter on covenant. we to that to I would we And leverage making annualized, can we we would are, you reversion when put hit are progress by hitting progress making that last reversion timing, a do going towards as quarter that we we the covenant. reversion are see

So stay tuned.

Operator

question comes from Stanley. Morgan from Simon Our next Flannery

Simon Flannery

forward moving looking with implementations, you're a of to fiber. Infrastructure lot directly not Kenny, now know the out money there. residential I build Act

of should projects get have to But think are about some of see that obviously and You pricing the the components you are of of and also side, construction the what we fiber and a supply on other to on think labor? it'd Windstream. play other through be funded? from also going opportunities And how these about impact Uniti great for

Kenny Gunderman

going both of funding infrastructure network, But right. I'm your And of that network of on more we I itself. just to that see country not the to we're first and copper to it's rural map, from And more fiber-to-the-home that the question. that's a the a about areas. We're to outright. in a is and and bill And fiber the to Windstream the underpenetrated that about recognition take to state It's in the or be not areas. going really very that -- question good in receiving our funding Paul our really happy point, investments perspective, talking and lot exclusively the home of the that federal especially a of and we've space in rural rural and XX-ish states. woefully just that's broadband I'm areas. and continuation you supply more question. own lot in rights And the these lot let is the Simon, got any ILEC Yes, chain suburban But you're directly. the coming, us. a that's mean, about leased talking for a network opportunity suburban we have own with network,

of a suburban We're of from us. and to increasing an used building largely core. areas are funding to home that and who they're And we're amount the middle have And fiber the they're backhaul wholesale backhaul and get there's more they're of -- build from they areas, opportunity building these connection those rural customers, for in that that lot that to mile infrastructure dollars haven't so -- past. the in those need -- as last back to but that's they customers building seeing recipients from of as and spending opportunities much existing that mile the or that the the

we very pleased any and there's conversations so number do sure. in material the wouldn't I having, I type in sure. say that of the we're very terms you Paul, a optimistic feel on federal about with put to? And customer But Yes, that want it. can't effect for XXXX subsidy.

Paul Bullington

take I'll about Simon, Yes, supply. your question Yes. second

supply movie seen different other funding of we've or before. -- for this previous for think an in I stimulus we've -- providers. sort issue booms, definitely become fiber We government seen

so on something we we And something that's working to anticipate make hard that we've been and sure very of. top stay

we've working have go of been we confident as fiber supply our agreement an with And uninterrupted talking with in we to our we'll suppliers so and forward. with that suppliers, remain our -- continue

definitely in it does fiber affecting some including -- cable. supply of think, issues think inflation of I into the are fiber chain the inputs just I construction, general, price and the

inputs, of to maintain But suppliers continue be supply the sure a cost got competitive we I we what to are maintain in year commitments our to price We deliver is everybody that the the understand we and that price. customers. that need we've our in cable. to to with for tick-up make fiber worked throughout going seeing, those some a including with a bit imagine, hard So we've as else industry, our I of is, our again, of think

Operator

Bora Our RBC next question Markets. with Capital comes from Lee

Bora Lee

we think, with issues then about if way availability? much I'll I on talk in quick X, Simon's labor relatively if inflation. follow-up. I you're are and guess following seeing the labor And about inflation any a So question there Can of have ones. up

Kenny Gunderman

Yes, Thank the you for question. sure.

you which is is, labor -- the networks, to a largely largely contractor labor primarily I construction going terms okay, workforce. in my I'm So which talking is deploy think -- to our were of we yes, use response about that

or labor we really consistent a that supply impact rates few seen So have worked the to things. I that attribute actually have labor rates. not, sure to labor for major any date, of really make material we maintain hard And construction. to to we And to

are interested a with the in work. done think contractors a team a really lot key us in of Southeast, I has And good rates. got to our We're job of with we've of those working relationship contractors, particularly that know. you a competitive with having And We customer large us. our pool be provide competitive contractors. as for continue a providing

to it’s to So and hard seen top on monitor and to our of. we labor work date that really the to we're construction with at continue haven't up stay a regard to going something inputs all tick to

Bora Lee

become Great. And dividends a us do how and can you remind versus capital back should be dividends thinking our also we when to allocation then priorities particularly possibility. M&A

Kenny Gunderman

Bora, one. that Yes, I'll take

nothing new there. to think say I

ratchet been be really really growth if is bringing dividend. raise up, And intentionally that. yes, growth. Evaluates good be a potential. said good reality We've to allocation good we times, options as growth got and capital I been this there'd I organic Our try down, that could profitable it, we've to then including in And capital team, to confident Board it ratchet to management -- many We've the can. each We've think quarter. at our the M&A. a but the several associated place I've we create good highly capital opportunity the We up, -- as many evaluates growth dividend in we've deploying we're thirdly, good we we with got proven Board where there's for each options, quarter. were think feel as intensity

So I approaching. is think, date as Paul covenant reversion mentioned, the

that there date be just so higher the and then, more substantive But list. the a when discussion. the that theoretical really probably about Board comes. it's time to more priority in . that approaches, on terms And before will up be But of discussion a will as

Operator

And I'm any I'd the turn not like to further questions this any time. showing call for closing at remarks.

Kenny Gunderman

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

Operator

does Ladies presentation. this conclude today's gentlemen, and

day. may a You disconnect, wonderful now and have

Uniti (UNIT) 25 Feb 222021 Q4 Earnings call transcript