Good morning and welcome to today's conference call to discuss Uniti’s Third Quarter 2024 Earnings Results. My name is Gigi and I'll be your operator for today. Today's call is being recorded and a webcast will be available on the company's investor relations website investor.uniti.com, beginning today and will remain available for 365 days. At this time all participants are in a listen-only mode. Participants on the call will have the opportunity to ask questions following the company's prepared comments. It is now my pleasure to introduce Bill DiTullio, Uniti's Vice President of Investor Relations and Treasury. Please begin.

Thanks, Gigi. Good morning everyone and thank you for joining today's conference call to discuss Uniti's Third Quarter 2024 Results. Speaking on the call today will be Kenny Gunderman, our CEO, and Paul Bullington, Uniti's CFO. Before we get started, I would like to quickly cover our safe harbor statement. Please note that today's remarks may contain forward-looking statements. These statements include, but are not limited to, statements about our 2024 outlook, expectations regarding lease up of our network, demand trends, business strategies, growth prospects, the benefits of the proposed transaction between Uniti and Windstream, including future financial and operating results of either company or the combined company. Statements related to the expected timing of the completion of the transaction and combined company plans and other statements that are not historical facts. Any forward-looking statements contained in today's discussion and materials speak only as of the particular date or dates indicated in the materials. Please also note that Uniti and Windstream, through the entity that will be the combined parent company following the merger has filed a Form S-4 registration statement with the SEC that includes a proxy statement and prospectus regarding the transaction that has not yet become effective. Investors are urged to read that proxy statement and prospectus as it contains important information about the transaction. In addition, Uniti and Windstream and their Directors and Officers may be deemed to be participating in the solicitation of proxies in favor of the transaction. You may find information about Uniti Directors and Executive Officers in the company's most recent proxy statement. You may also obtain a copy of the proxy statement and prospectus through the SEC website, Uniti's and Windstream's websites, or by requesting a copy from either company's investor relations website. More information on how to request these documents is available in the investor presentation that accompanies this call. Uniti does not undertake any obligation to update or revise any of this information in today's remarks, whether as a result of new information, future events, or otherwise. Numerous factors could cause actual results that differ materially from those described in the forward-looking statements. And for more information on those factors, please see the section titled forward-looking statements in the presentation and risk factors section of the filed Form S-4. With that, I would now like to turn the call over to Kenny.

Thank you, Bill. Good morning, everyone, and thank you for joining. I'm excited to discuss another solid quarter of performance at Uniti and our pending combination with Windstream. Before we get into that, I want to acknowledge the significant impact of hurricanes Helene and Milton. Our thoughts are with those who have experienced loss and damage in affected areas. I also want to sincerely thank the committed Uniti first responders and support employees who provided immediate assistance to our customers and communities again. While our response to such national disasters is a core competency and is regularly praised by our customers, Uniti leadership always appreciates your service. Now, turning to the quarter and starting on Slide 4. Uniti once again delivered a solid quarter, driven by strong demand for our mission-critical fiber infrastructure from various customers, including hyperscalers. Paul will provide more details on our updated guidance later, but we are slightly increasing our full-year 2024 revenue outlook due to this demand. Our core recurring strategic fiber business grew 3% in the third quarter, supported by impressive growth in enterprise, wholesale, and dark fiber revenue of 10%, 14%, and 18%, respectively. With our industry-leading 0.2% churn, we are on track to achieve 4% to 6% MRR growth for the full year. Moving to Slide 5, we had another strong quarter of new bookings. Wireless bookings have remained low so far, but we are optimistic about increased activity toward the end of this year and into 2025. This slowdown is more than balanced by demand from other customers, including fiber-to-the-home carriers, which are driving substantial demand for middle-mile and inner-city backhaul to connect their neighborhoods. The bookings from fiber-to-the-home carriers increased threefold in 2023 compared to 2022, and we expect a similar level this year. As previously mentioned, demand from hyperscalers continues to account for a significant portion of our consolidated bookings, with 20% of our year-to-date bookings coming from them. We are confident this demand will continue as a substantial portion of our sales funnel comes from hyperscalers. Moving to Slide 6, I want to provide more detail about the hyperscaler deals we are seeing. There should be no question in the industry about the demand for digital infrastructure — the hyperscaler opportunity for digital infrastructure providers, including data centers and fiber. Hyperscalers are spending over $200 billion annually, and a significant portion of that is on digital infrastructure for cloud-based products, generative AI, and other future applications. We believe this spending will continue and likely increase. The transactions we are pursuing with hyperscalers are financially attractive and highly strategic. As illustrated on the map, we are either selling existing infrastructure with little or no capital required or building new infrastructure in strategically important areas of our network that provide future lease-up potential. In some instances, we are creating new long-haul routes that we previously wanted but couldn't justify cost-wise. Additionally, the economics of these transactions align with our previously stated anchor-plus-lease-up model, and we are eager to pursue future deals during this investment phase. The types of deals range from strategic sales to IRUs to dark fiber leases, and sometimes selling wavelengths. Thus, the impact on our financials, including bookings, will differ from quarter to quarter. For instance, in the fourth quarter, we are likely to see a spike in revenue from strategic sales made to hyperscalers earlier in the year that are being delivered this quarter. We're particularly excited about the inference phase of generative AI and the many ultra-high broadband use cases emerging. The edge of our network will become increasingly valuable as data centers, wireless towers, small cells, and connected buildings require construction or upgrades, positively affecting MRR. Notably, fiber-to-the-home will also become more valuable. In summary, Uniti is effectively executing our core strategy of providing mission-critical fiber, and we are well-positioned for the future. Now, I will turn the call over to Paul.

Thanks, Kenny. I'd like to begin by reviewing our third quarter performance followed by an overview of our current 2024 outlook. The solid results we saw in the third quarter for Uniti were once again anchored by a healthy level of consolidated bookings, MRR of nearly $1 million, 3% year-over-year growth in our core recurring strategic fiber revenue, and declining consolidated net success-based capital intensity, ending the quarter at around 20%. As I'll cover in more detail in just a bit, we are slightly increasing our 2024 outlook for consolidated revenue, while adjusted EBITDA remains unchanged as we expect to end the year within the previous guidance ranges provided. We have also provided Windstream's third quarter financial information in an 8-K filed with the SEC earlier this morning. Please turn to Slide 7 and I'll start with comments on our third quarter. We reported consolidated revenues of $292 million, consolidated adjusted EBITDA of $235 million, AFFO attributed to common shareholders of $87 million, and AFFO per diluted common share of $0.33. As I mentioned last quarter, given the timing of one-time sales, including strategic dark fiber sales to hyperscalers, we continue to expect second half revenue and adjusted EBITDA will be more heavily weighted in the fourth quarter versus the third quarter. On a consolidated basis, our net capital intensity during the quarter was 21%, down from 41% in the same prior period last year as we wrapped up our 2024 GCI funding commitments in July. There continue to be a number of encouraging trends in bookings that are driving this capital efficiency, including our continued focus on lease-up and a higher mix of hyperscaler deals that generally come with higher NRCs. At Uniti Leasing, we reported segment revenues of $223 million and adjusted EBITDA of $215 million, representing an adjusted EBITDA margin of 97% for the quarter. At Uniti Fiber, we reported revenues of $69 million and adjusted EBITDA of $26 million during the third quarter. Both revenue and adjusted EBITDA during the quarter were in line with our expectations. Turning to Slide 8, our growth capital investment program continues to provide positive results for Uniti and given our pending merger with Windstream, I wanted to highlight a key point that I believe the market is underappreciating. Since 2015, Kinetic and Uniti have invested almost $2.5 billion of capital in its network. These historical investments have helped enable Kinetic's approximate $650 fiber-to-the-home per passing cost, as we estimate that deploying backhaul fiber networks equates to roughly 20% of the total cost of building fiber-to-the-home for others in the industry. On Slide 9, we've updated the consolidated year-to-date view of revenue and adjusted EBITDA for New Uniti by each segment on which we expect to report post close. Both Kinetic and fiber infrastructure consists of a highly predictable core recurring revenue base that continues to grow and yield attractive margins. As a reminder, our fiber-to-the-home platform will continue to be branded as Kinetic. Fiber infrastructure will include our current Uniti Fiber and Uniti Leasing segments along with the Windstream wholesale segment, all of which are highly complementary and will combine to create a premier fiber infrastructure company with both national and deep regional capabilities and a fiber network that is predominantly owned and operated. As you can see, the core fiber business demonstrated solid top line growth for the quarter, and just as importantly, the combined business is demonstrating continued solid EBITDA growth. Please turn to Slide 10 and I'll now cover our updated 2024 guidance. We are revising our guidance for business unit-level revisions and the impact of transaction related and other costs incurred to date. Our outlook excludes the impact from the expected merger with Windstream, future acquisitions, capital market transactions, and future transaction related and other costs not specifically mentioned herein. Actual results could differ materially from these forward-looking statements. As I mentioned earlier, we are increasing our 2024 outlook for consolidated revenue by $3 million to account for higher than expected one-time lease up that was realized during the quarter at Uniti Leasing. While our full-year outlook for adjusted EBITDA remains unchanged, we are increasing the midpoint of our outlook for Uniti Leasing by $2 million to reflect the additional one-time lease-up I just mentioned, which is offset by an increase of $2 million in our full-year corporate expense outlook due to higher than expected corporate SG&A expenses. At Uniti Leasing, we continue to expect $250 million of net success-based CapEx at the midpoint of our guidance, of which, approximately $230 million relates to Windstream GCI investments. Net success-based CapEx for Uniti Fiber this year is still expected to be $100 million at the midpoint of our guidance, representing a capital intensity of 34%, down from 40% in 2023 and 45% in 2022, further demonstrating the success we are having in transitioning to less capital-intensive, higher return lease-up deals. We expect full-year AFFO to range between $1.32 and $1.39 per diluted common share with a midpoint of $1.35 per diluted share. As a reminder, guidance ranges for key components of our outlook are included in the appendix to our earnings presentation. At quarter end, we had approximately $529 million of combined unrestricted cash and cash equivalents and undrawn revolver capacity. Our leverage ratio at quarter-end was 6.05 times based on net debt to third quarter 2024 annualized adjusted EBITDA excluding the debt and net contributions from the ABS loan facility. Finally, a couple of comments on our capital structure. During the quarter, Windstream successfully executed on a collaborative plan to strengthen and simplify the post-merger capital structure. These moves accomplished three primary goals. First, all of Windstream's debt is now portable into the Uniti debt structure at or shortly after close, allowing for a collapse of the dual debt silos into one, simplifying the combined capital structure for both the company and investors, which was something that was important for us to accomplish quickly and efficiently. Second, it addresses the majority of our 2027 maturity stack by pushing out significant debt maturities to 2031. And third, it raises additional capital that can be used for general corporate purposes, including expanding the Kinetic fiber-to-the-home build plan. As it relates to the ABS market, we continue to view it as an attractive source of financing that complements our existing capital structure well. To that end, we continue to make good progress on replacing our current ABS bridge financing with a permanent ABS solution, which we expect will be in place by later this year or early next year. With that, I'll now turn the call back over to Kenny.

Thanks, Paul. We continue to make great progress on our timeline to close our pending merger. In fact, we've already received PUC approvals from 13 of the 18 jurisdictions requiring them. Slide 14 showcases the reach of new Uniti's insurgent fiber network, extending our successful strategy of targeting Tier 2 and Tier 3 markets for wholesale and enterprise now into residential fiber-to-the-home. Our true north is building fiber first in less competitive markets, giving us the right to win for many years into the future. Including connected buildings, fiber to the tower, and small cell connections, connected POPs and data centers, and the 4.3 million total homes within Kinetic's current footprint, Uniti will have the potential to reach over 5 million connected on-ramps in largely unique locations, each driving increasing amounts of bandwidth onto our owned wholesale network. Slide 15 highlights how Kinetic compares favorably to other providers in the industry. Only 15% of the footprint today has a true overbuilder, and that's held relatively constant for the last five years. Next, Kinetic is also building fiber passings of what we believe to be an industry-leading cost of $650 per passing. As Paul highlighted earlier, the historical GCI, TCI investments have given Kinetic a head start from a cost and network quality perspective, and Kinetic has a fully internally owned build engine that lowers costs further. Importantly, our current plan currently targets approximately 60% coverage with fiber, and we're actively evaluating expanding that plan further. In fact, Windstream announced on its earnings call yesterday that we expect to accelerate its fiber build program beginning in 2025. We plan to provide more specific guidance on that plan when we provide our 2025 outlook early next year. Moving to Slide 16, you can see Kinetic has been demonstrating strong success the past few years. Initial penetration levels on early cohorts have consistently averaged between 15% to 18% in the first year, increasing to above 25% on average by the second year. Recent cohorts have been demonstrating initial penetration rates of up to 30%, as Kinetic has really ramped a more customer-focused, digitally enhanced local go-to-market strategy. Slide 17 highlights another exciting element of our combination, which is the bringing together of Uniti's robust, asset-rich national wholesale business with Windstream's national lit network. On a combined basis, this business will have over 200,000 route miles, many in unique Tier 2 and Tier 3 routes, almost 800,000 connected buildings, and over 1,600 connected POPs and data centers. We'll be uniquely positioned to continue being a share taker in the growing dark fiber and waves markets. Turning to Slide 18, we committed to making progress on numerous key initiatives between signing and closing of our transaction. First, both companies continue to execute well operationally and we continue to provide a unified investor relations outreach to help investors understand the New Uniti. Next, as Paul mentioned earlier, we're very excited to have completed the simplification of our new pro forma balance sheet at closing. As part of that, we're working on an accelerated and expanded fiber-to-the-home build plan with extra capital. We're also actively working with Kinetic on an integration plan to achieve our synergy goals. And lastly, we're never idle when it comes to M&A. Let me close on Slide 19 by restating how excited we are for our pending merger with Windstream. When we announced the transaction in May, we talked about the strategic rationale, and since then, market developments have absolutely validated our views. The new Uniti is at the epicenter of the growing convergence trend, highlighting the substantial strategic value of Kinetic and its scaled fiber-to-the-home platform. Our fiber infrastructure business is also uniquely positioned to benefit from the explosion and broadband demand in general, including the demand being fueled by hyperscalers. We cannot be more excited about our positioning. And with that, we'd be happy to take your questions.

Thank you. Our first question comes from Greg Williams from TD Cowen.

Great. Thanks for taking my questions. The first one is just hoping you could provide more color on the recent win with the Montgomery Metro rings in terms of MRR and bookings. And there's a concern out there in general that you're seeing high upfront NRCs, as Paul you noted, but not much recurring MRR cash and low yields on some of these deals. So maybe you can talk to the flavor and then the characterization of the deals and the mechanics and if the yields are acceptable. And part and parcel to that, just can you talk to the competitive dynamics in the RFP process? Press releases out there and funnels that are in the billions of dollars, and if it's a lucrative GenAI fiber opportunity, is there more competition at the RFP table, and can you speak to how you need these advantages? Thanks.

Good morning, Greg. Thank you. We wanted to provide more details about the transactions we are targeting, as mentioned in the prepared remarks. When considering Montgomery, which you referenced, it aligns closely with the initiatives outlined on this slide. At Uniti, our approach with hyperscalers involves constructing strategic fiber. We're not developing fiber in isolated areas that lack the potential for multiple tenants. Instead, we're creating fiber at the core of our network in key markets like Montgomery, and linking Montgomery to Huntsville and Huntsville to Mobile, which offers significant opportunities for leasing beyond the initial construction. This connects well to your second question regarding the economics of these deals and how they align with our established anchor plus lease-up strategy. We see these transactions fitting perfectly within that framework. We've consistently aimed to build anchor fiber within an initial cash flow range of 5% to 10%, followed by a lease-up strategy that pushes us above that 10%. Every quarter, we monitor our performance metrics, which indicate we are exceeding these targets based on the anchor builds we've completed over the years. Regarding the hyperscaler agreements, if we opt for a lower net revenue commitment (NRC), it increases the emphasis on leasing to achieve desired returns. Conversely, a higher NRC reduces this pressure and urgency regarding lease-up. Typically, we're finding that the NRCs for hyperscaler deals are higher, and many fall above the 5% to 10% initial yield range we're targeting. Economically, we are optimistic about these agreements and our leasing potential following the anchor deals, especially given their strategic placement within our network. We are eager to expand these initiatives further and will keep updating on their economic aspects. In terms of competitive dynamics, these opportunities differ from standard wireless requests for proposals. Our engagement with hyperscalers is somewhat tailored, emphasizing a proactive connection rather than a typical RFP format. Large, sophisticated companies seeking fiber networks prioritize robust and scalable networks with ample capacity and reliability in delivery timelines and budgets. They are keen to partner with providers who can deliver efficiently, and Uniti has a strong network, particularly in Tier 2 and Tier 3 markets, where there is current interest. We have demonstrated success in timely and budget-friendly execution, so we don't experience the same competitive pressures inherent in traditional RFP processes. This is a favorable position for us as we continue to concentrate on delivering quality for these valuable customers, and we anticipate that this competitive landscape will remain.

That's helpful color. Thank you.

Thank you. One moment for our next question. Our next question comes from the line of Frank Louthan from Raymond James.

Great. Thank you. With these anchor deals, can you give us some color on how much fiber you're building for yourself with that? How much is this all new greenfield construction? I assume you're getting some fiber for yourself for inventory. And then on Slide 14 with some of these potential market expansions, can you give us more color on that? Are these Windstream markets as well as Uniti Fiber markets or a combination? And how should we think about the revenue opportunity there? Thanks.

So, Frank, regarding fiber, three or four years ago, we were typically selling six to 12 strands to hyperscalers. Now, we're averaging around 864 strand count deals, and sometimes even more. There's been a significant increase in the fiber and infrastructure they're acquiring. In response to your question about how much fiber we are reserving or constructing for ourselves, I would say it's a considerable amount, comparable to what we're delivering, if not more. Whenever we initiate new network installations, we are also planning for our future needs. We consider the capacity we are selling. Previously, selling six to 12 strands meant that 144 count cable was sufficient. However, now that we are dealing with 864 strand counts, we require more capacity and conduits. This is a prime opportunity for us to meet customer demand while also future-proofing our network. We are enthusiastic about the potential for leasing that we are crafting with the fiber we are supplying. Regarding new market expansion, there are numerous opportunities for Uniti. For Kinetic, they currently have fiber built to about 37% to 38% of their area, with plans to reach 60%. This represents a significant increase in the markets where Kinetic currently has copper and where we can build fiber. We believe there's potential to expand even further, and we are diligently working on that. Additionally, apart from Kinetic, we have metro fiber in 300 markets nationwide, much of which falls within the Uniti footprint, outside the Kinetic area. Currently, we offer lit services in about 30 of those markets, which is just a fraction of the opportunity. It's important to clarify that we do not expect a hundredfold increase in revenue as we strategically target these markets. However, we recognize the value of having metro fiber, which is supported by an owned backhaul network with unique routes and markets. This aspect of our wholesale business is often overlooked, especially with hyperscalers, as we connect data centers in unique metro markets with distinct Tier 2 and Tier 3 routes that have additional leasing potential. I'm very excited, Frank, about the market expansion opportunities across all three of our businesses: Kinetic, Uniti Fiber, and our wholesale segment.

Great that's really helpful color. Thanks.

Thank you. Our next question comes from David Barden from Bank of America.

Hey, everyone. Thanks for taking my questions. I have a couple. Kenny, on that slide, can you explain the progress of the merger indicated by the green and yellow? Also, what's missing is the regulatory discussions happening on a state-by-state level. Can you provide some details on the actions from state regulatory agencies, and are there certain states that might have a longer process than others? Paul, could you clarify the one-time revenue benefit that led to your increased revenue guidance but isn’t affecting the EBITDA? Lastly, Kenny, I want to delve a bit deeper into the hyperscale topic mentioned earlier. It seems like the hyperscalers know precisely where they're establishing their operations, so they may not require a traditional sales approach but are instead looking for partners who can provide the necessary connections. Is this process more like a reverse sale? I’m trying to grasp how this is all functioning since it's relatively new. Thank you.

Great, David, I'll take the first and turn it to Paul and then come back on the third. So on the regulatory approval process, when we originally signed the deal, we talked about the closing. We expected it to close in the second half of 2025. And as part of that guidance, we were sort of baking in the long polls that we thought existed. I would tell you, we thought the long polls were probably the one or two of the state PUCs, and I won't get into which ones, but we thought it was one or two of those. Now after having engaged with the various regulators over a period of several months, we're less concerned about those long polls. We haven't heard any issues or concerns that are troubling or that are surprising. In fact, we think there's a lot of enthusiasm for the transaction. And on the federal front, the same, making good progress across the board. And so we constantly debate whether to update our guidance on the closing of the transaction. We're increasingly confident that our original guidance was conservative, not yet prepared to change that, but I think in the coming weeks and months we certainly will update that. But we feel great about the progress and have not heard any issues that are concerning to us at all.

Yes, Frank, regarding the benefit from the one-time revenue for the quarter, we are increasing our Uniti leasing guidance by $3 million due to this one-time deal. This will positively impact our bottom line with a $2 million increase in our Uniti leasing EBITDA guidance for the year. However, this increase is offset by a corresponding $2 million rise in corporate expenses, leading to a decrease in EBITDA guidance at the corporate level due to higher SG&A costs, which are mainly driven by performance-based compensation. So, there's a balance to the one-time revenue profitability that we are realizing.

Thank you.

And David, regarding the hyperscaler question, I want to emphasize that not all these deals are identical. The hyperscalers are not a single customer; they each have their own buying behaviors. In some cases, we are selling traditional wave capacity or dark fiber IRU on an existing network, which is part of their standard network planning for current and future needs. We might be selling a few strands of dark fiber or traditional 100 or 400 gig waves. This is advantageous for us and represents a growing segment of our sales pipeline, which we expect to continue expanding. I mention this because as we enter the phase where AI is increasingly utilized at the edges, where data cannot be cached and must be processed in real-time, the importance of lit fiber in these areas will grow. This shift will likely lead to more business translating into monthly recurring revenue instead of the uneven deals we're currently witnessing. The sales cycle for these unique hyperscaler projects, like building new data centers, isn’t traditional. Initially, the focus for hyperscalers is on securing land, power, and grid capacity, followed by constructing the data center. After that, they seek fiber providers with existing networks in proximity or the capability to extend from nearby locations. The bulk of the capital required to establish these data centers isn't for fiber, but rather for the data center itself, the land, and the power supply, with fiber coming later. This can be advantageous because it reduces pressure on pricing and emphasizes timely delivery and installation of fiber. In our key markets, we possess a competitive edge in this regard.

Got it. Thanks, Kenny. Thanks, Paul.

Thank you. At this time, I would now like to turn the conference back over to Kenny Gunderman for closing remarks.

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

This concludes today's conference call. Thank you for participating. You may now disconnect.