Earnings Call Transcript - UNIT Q1 2021

Operator, Operator

Welcome to Uniti Group’s First Quarter 2021 Conference Call. My name is Cynthia, and I’ll be your operator for today’s call. A webcast of this call will be available on the company’s website, www.uniti.com, beginning May 6, 2021, and will remain available for 14 days. At this time, all participants are in a listen-only mode. Participants on the call will have the opportunity to ask questions following the company’s prepared comments. 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. The company’s remarks this afternoon will reference slides posted on its website, and you are encouraged to refer to those materials during this call. Discussions during the call will also include certain financial measures that were not prepared in accordance with Generally Accepted Accounting Principles. Reconciliation of those non-GAAP financial measures to the most directly comparable GAAP financial measures can be found in the company’s current report on Form 8-K dated today. I would now like to turn the call over to Uniti Group’s Chief Executive Officer, Kenny Gunderman. Please go ahead, Mr. Gunderman.

Kenny Gunderman, CEO

Thank you, Cynthia. Good afternoon, everyone. Joining me on the call today is our Chief Revenue Officer, Ron Mudry, along with Mark. Given our strong momentum at Uniti Leasing, we thought it would be appropriate to include Ron in this call. Before we review Uniti’s operational performance for the first quarter, I’d like to highlight some trends we're observing in the communications infrastructure sector. Our presentation shows that fiber is essential for virtually all current and future broadband delivery. We're witnessing an acceleration in the virtualization of our culture with technologies like 5G mobile broadband, fiber-to-the-home, fixed wireless, and over-the-top video, which are increasing the use of video conferencing, e-learning, telemedicine, remote work environments, and overall broadband traffic. Uniti is among the largest independent wholesale fiber providers in the country, serving a variety of communication service providers. As such, we are agnostic to competing edge technologies and benefit from almost all broadband trends that lead to increased traffic per fiber network. Over the last four years, for instance, our Southeast fiber network has experienced a tenfold increase in daily traffic, growing from 16 gigs to 160 gigs, and we anticipate this growth will continue. Our wireless carrier customers are particularly proactive in ensuring their infrastructure keeps pace with the rapid growth in mobile broadband. These carriers are actively seeking 10-gig upgrades on our macro tower backhaul circuits, while also pushing for CRAN small cell deployments in our metro areas and accelerating their 5G network densification. Consequently, our dark fiber and small cell revenue increased by 30% year-over-year during the quarter. We expect this trend to persist, especially with Dish becoming a more engaged customer. Our non-wireless carrier customers, including the FAANG group and national MSOs, are also active as they expand their cloud-based services, leading to a significant demand for high-capacity long-haul routes. For example, there was a 30% rise in the monthly MRR quoted to FAANG customers in March compared to the end of last year. Our residential and enterprise-focused carrier customers are equally active, broadening broadband access to more consumers. Our metro networks currently pass 185,000 buildings, and we are actively extending into commercial parks and neighborhoods through fiber-to-the-home and fixed wireless solutions. In the past three years, we have constructed over 7,000 route miles of new fiber and anticipate that number could potentially triple over the next three years. As we turn to our fiber network, we are positioned to leverage significant industry tailwinds with the eighth largest fiber network in the country, along with a growing portfolio of small cells, connected buildings, macro towers, and the homes passed. Achieving this in just six years through our proprietary M&A and organic sales strategies, our portfolio continues to grow. We are actively engaged in the M&A market, and we know that both private and strategic capital is valuing comparable portfolios at cash multiples of 15 to 25 times. We’re confident in our ability to generate shareholder value consistently. Fiber offers an appealing shared infrastructure model that can yield significant returns. Uniti either acquires or builds new fiber with attractive long-term cash flow economics averaging in the mid to high single digits. We then onboard additional tenants with high margins and low CapEx, culminating in combined cash flow yields of around 17%. We believe our track record supports our future potential as we continue to experience robust demand for new customers and successful lease-ups. At Uniti Leasing, as a national wholesale provider across 42 states, we are generating highly profitable, passively managed lease-up revenue on our long-haul and metro routes while strategically expanding our portfolio through M&A. At Uniti Fiber, we are focusing on less competitive Tier 2 and Tier 3 markets mainly in the Southeastern U.S., delivering actively managed fiber solutions to wireless customers, enterprises, schools, and government entities. Targeting these underserved markets, combined with our national scale and customer connections, is driving distinctive demand. Our Southeast fiber network has seen considerable success in leasing up, where we have largely dense metro fiber. We have achieved over three times the recurring revenue from major wireless anchor builds completed so far. Over the past five quarters, we recorded approximately $17 million in annualized lease-up MRR, which is anticipated to yield over 50% in additional cash flows. Including the lease-up to date since we began constructing our major wireless builds, we expect to achieve a cumulative cash yield of 14% on these projects, doubling the initial anchor yield as newer networks stay underutilized, with additional lease-up likely to further enhance our cumulative cash yield in the coming years. In addition to leasing up our existing network, we will keep pursuing select attractive anchor greenfield builds and expand those networks while also adding more wireless and non-wireless customers. As mentioned earlier, our dark fiber and small cell revenue grew by 30% year-over-year, while enterprise revenue increased by 17%. This indicates we are strategically selecting good anchor markets for network expansion and executing well on follow-up lease-up. Uniti Fiber's sales bookings in the first quarter amounted to approximately $0.5 million in MRR, with 90% of bookings sourced from non-wireless customers. Uniti Fiber installed $0.5 million in MRR during the first quarter, with 68% related to non-wireless, 24% to wireless, and 8% to bandwidth upgrades. I will now turn the call over to Ron, who will provide an update on Uniti Leasing.

Ron Mudry, CRO

Thanks, Kenny. Good afternoon, everyone. Turning to slide nine, at Uniti Leasing, we continue to actively market over 3 million strand miles of fiber that is available to lease to third parties, making us one of the largest players in the wholesale fiber market. Our sales pipeline today stands at approximately 1 billion of total contract value, which translates to approximately 60 million of potential annual recurring revenue. This reflects the continued significant interest from our wholesale customers as well as the strategic value of these fiber strands. Approximately 75% of the deals utilize fiber we acquired as part of the settlement with Windstream, and our success is the result of less than one year of actively marketing this new fiber. We continue to be successful in monetizing our portfolio of assets and to date have executed on opportunities that represent total remaining revenues under contract of 765 million, with an average contract term remaining of 14.5 years and incremental cash flow yields of approximately 12%. As slide 10 illustrates, we have executed and continue to pursue several different types of opportunities within our Uniti Leasing segment. Traditional dark fiber IRUs and dark fiber leases have driven $60 million of upfront proceeds and $345 million of remaining revenues under contract, primarily on the fiber we acquired from Lumen and Windstream. These opportunities generate margins of over 90%, with minimal to no CapEx required. Sale leasebacks are structures where we acquire new fiber to expand our network reach and then immediately enter a long-term lease with a tenant to provide anchor return economics. Our transactions with TPx, CableSouth and others over the years are examples of these. In OpCo/PropCo transactions, we sell our existing actively managed lit services revenue at double-digit transaction multiples to an operating partner and then immediately lease access to the underlying fiber network, which we retain in the form of a 10 or 20-year IRU of lease. These transactions generate upfront proceeds, grow net contractual revenue, and extend the average term of revenue substantially. For example, we sold our Midwest fiber operations as part of our Bluebird transaction, and we recently entered into a transaction to sell our northeast operations as part of our Everstream transaction. Over the past two years, we have generated total upfront proceeds of approximately $400 million from these various transaction structures. Turning to slide 11, during the first quarter, Uniti Leasing deployed approximately $43 million towards growth capital investment initiatives, with almost all of these investments related to the Windstream GCI program. These GCI investments were mostly ILEC related and added approximately 800 route miles and 38,000 strand miles of valuable fiber to Uniti’s owned network across 13 different ILEC states. As of March 31, Uniti has invested approximately $127 million to date under the GCI Program with Windstream, adding approximately 3,375 route miles and 122,000 fiber strand miles. These investments will be added to the master leases at an 8% initial yield, subject to a 0.5% annual escalator and result in nearly 100% margin revenue. The investments we have made thus far will ultimately generate approximately $10 billion of annualized cash rent. In 2021, we expect to deploy $200 million of capital relating to the GCI Program primarily within Windstream ILEC markets. Most of these markets are similar to our Tier 2 and 3 markets, providing Windstream with substantial growth opportunities over time. As a reminder, the investments Uniti has committed to making must meet certain underwriting criteria, including being long-term value-creating fiber meeting minimal threshold returns for our tenants. Each request made by Windstream is reviewed by Uniti to ensure it meets the criteria. In other words, the program is designed to ensure investments are being made to help our tenant now and facilitate future-proofing new lease network for future renewals. With that, I'll turn the call back over to Kenny.

Kenny Gunderman, CEO

Thanks, Ron. Our guidance remains largely in line with our prior outlook. We still expect to close our transaction with Everstream in the second quarter of this year. Upon closing of the transaction, we expect to record a pretax book gain of $25 million relating to the partial sale of our Northeast operations and sell certain dark fiber IRU contracts. The gain is excluded from both adjusted EBITDA and AFFO. Turning to slide 12, we reported consolidated revenues of 273 million, consolidated adjusted EBITDA of $214 million, AFFO attributed to common shares of $103 million, and AFFO for the diluted common share of $0.41. The net loss attributable to common shares for the quarter was $5 million or $0.02 per diluted share and excludes $4 million of transaction-related and other costs. At Uniti Leasing, we reported segment revenues of $195 million and adjusted EBITDA of $192 million, up approximately 6% and 5% respectively from the prior year while achieving adjusted EBIT margin of 98%. At Uniti Fiber, we turned over 160 lit backhaul, dark fiber and small cell sites for our wireless carriers across our southeast footprint during the first quarter. We currently have approximately 1,100 lit backhaul, dark fiber and small cell sites remaining in our backlog that we expect to deploy within the next two years. Uniti Fiber revenues are $78 million, and adjusted EBITDA of $30 million during the first quarter were in line with our expectations, with adjusted EBIT of 8% from the prior year, primarily due to the wind down of our non-core construction business and lower operational and maintenance costs. The adjusted EBITDA margin for the quarter was 38%, representing a 270 basis point improvement from the prior year. Turning to slide 13, we're revising our prior guidance for the impact from the recent issuance of our 4.75% secured notes and related redemption, the impact of transaction-related costs incurred to date, and changes in estimates of depreciation and amortization. In Uniti Leasing, we continue to expect revenues and adjusted EBITDA to be $784 million and $766 million respectively at the midpoint, representing adjusted EBITDA margins of approximately 98%. As slide 14 highlights, non-Windstream revenues and adjusted EBITDA continue to grow at a healthy pace and are expected to be $55 million and $42 million respectively, up 27% and 17% from 2020 levels. This includes the assets and dark fiber IRU contracts we acquired from Lumen and Windstream, where the revenue is diversified across multiple third parties and the dark fiber IRU leases that are part of the Everstream transaction. For full year 2021, our guidance continues to include lease up of our national fiber network, with opportunities expected to generate $5.5 million of annualized revenue when fully deployed. As a reminder, the bookings associated with this lease up are expected to be more heavily weighted toward the back half of this year, given the typical sales cycle. Therefore, the full year revenue run rate impact is not expected to be realized until next year. Turning to slide 15, we still expect Uniti Fiber to contribute $305 million of revenues and $118 million of adjusted EBITDA, representing a margin of 39% this year at the midpoint of our guidance, which is a 300 basis point improvement from last year. As we pointed out on our earnings call last quarter, Uniti Fiber’s outlook is impacted by the sale of our Northeast operations as part of our Everstream transaction and the winding down of our non-core construction business, as I noted earlier. Adjusting for the impact of these two items, revenue and adjusted EBITDA for 2021 at Uniti Fiber are expected to increase by 6% and 10%, respectively, from the prior year. Turning to slide 16, for 2021, we continue to expect full year AFFO to range from $1.61 to $1.65 per diluted common share with a midpoint of $1.63 per diluted share. On a consolidated basis, we expect revenues to be $1.1 billion and adjusted EBITDA to be $852 million at the midpoint. Our guidance contemplates consolidated interest expense for the full year of approximately $400 million, excluding any deferred financing costs write-off and premium paid relating to early retirements of our debt. Reported interest expense in 2021 will include an additional $51 million relating to the write-off of deferred financing costs and premiums paid on the early retirement of our 8.25% senior unsecured notes and 6% senior secured notes due 2023. We continue to improve our financial flexibility and lower our borrowing costs. On April 20th, we successfully closed on the issuance of $570 million of senior secured notes due April 2028. These notes will bear interest at 3.25% and 4.25% and were issued at par. The proceeds from the offering were used to redeem in full the outstanding 6% senior secured notes due 2023 which occurred today, combined with the refinancing of our 8.25% unsecured notes, which were fully redeemed on April 15. We expect to realize annual interest cost savings of approximately $25 million and have extended our debt maturities several years. At quarter end, we had approximately $523 million of combined unrestricted cash and cash equivalents and undrawn revolver capacity. Our leverage ratio year-end stood at 5.83 times based on net debt to annualized adjusted EBITDA. In closing, slide 18 highlights that Uniti remains a unique opportunity in the communications infrastructure space with a differentiated strategy and a unique, hard-to-replicate portfolio of assets with attractive economics, including 95% recurring revenue, monthly churn of 0.3%, company-wide net success-based capital intensity of 30%, and $8 billion of revenues under contract with nine years of average term remaining. Our proven track record of organic growth execution and a proprietary value-accretive M&A funnel, along with the fact that we are still in the early years of a multi-year investment cycle, provides significant growth tailwinds for the foreseeable future. With that, Operator, we are now ready to take questions.

Operator, Operator

Thank you. We will now begin the question-and-answer session. Our first question comes from Frank Louthan with Raymond James. You may go ahead with your question.

Frank Louthan, Analyst

Great, thank you. Maybe walk us through the Dish situation and how you see yourself benefiting from that. And then, you know, how broadly across your network. Thanks.

Kenny Gunderman, CEO

Sure, Frank. Thanks. Yeah, we don't like to talk specifically about customers. But Dish did name us in a press release at the end of last year, as you know, so happy to provide a little more color. And I think we've been foreshadowing this, but we really think the second half of this year could be very, very active with Dish. Especially in the southeast, we've got a number of markets that are on the list for them for deployment. And we're going to be active, we think, in those markets. So I think that's just the beginning based on everything we're seeing and hearing. We look forward to the activity ramping.

Operator, Operator

And our next question comes from Phil Cusick with JPMorgan. You may begin with your question.

Phil Cusick, Analyst

Hey, guys, thanks. Hi, thanks. You mentioned growth in small cell deployments in metro markets and increasing 5G network densification. Can you just expand on that, and what kind of spectrum you're seeing deployed? Thanks.

Kenny Gunderman, CEO

Yes. Phil, this is Kenny. I'm going to start with that, and then ask Ron to add some comments, because Ron engages a lot with our big carrier customers. But, you know, we've always said that small cells were not a central part of our strategy; they were more of an addition to our core strategy. And we've also said that in our Tier 2 and Tier 3 markets, small cells would be behind in terms of deployments, behind meaning, come later in timing relative to the larger NFL cities. And we've also said, but eventually, those deployments would start to ramp. And when they did, us having fiber in those markets would give us a leg up on competition from a speed to deployment perspective, and just an economics point of view. We're starting to see that; we're in the early innings of that, and eventually, I think the spigot is going to be really opened. Right now, we're starting to see good deployments across the spectrum of large wireless carriers, and so I'm pretty excited about it. Again, it's not the core central part of our strategy, but it provides great economics, either leased up on existing networks, or they can be good anchor economic networks for us when we are able to deploy and expand into our current markets or adjacent markets. So Ron, feel free to add to that if you'd like.

Ron Mudry, CRO

Sure. Thanks, Kenny. Thanks, Phil. I would say that the recent C-band spectrum auction is going to be driving some significant demand. You know, that spectrum will be put out on towers that have other spectrums carrying on them as well. So it's driving a very significant ramp-up in bandwidth requirements that lift sites up to 10 gigs. As Kenny mentioned, we have multiple carriers looking for that now and also increasing our demand for dark fiber. So I think that that's going to be a continuing trend over the next two to three years as the carriers look to activate that new spectrum as it clears. Ken?

Phil Cusick, Analyst

Thanks. Ron, for the small cell, are you seeing one carrier mostly driving this, or is this really more than one or all the major carriers? Thank you.

Ron Mudry, CRO

We have activity with all the major carriers, I would say, in the small cell space and continue to see that.

Operator, Operator

And our next question comes from Michael Rollins with Citi.

Michael Rollins, Analyst

Hi. Good afternoon. Just a few questions. On slide 8, it looks like the incremental lease up in the blue cumulative MRR in the left is up about 0.2 million off of last quarter. And just curious on that how to think about the pacing of this growth and how you would evaluate that outcome in the range of expectations you have? And then on slide 9, just a little bit more context about the growth of opportunities you're seeing in terms of the quantity of numbers going from 140 to 186 and the contract value staying around a billion. Is there a mix or type of business that you're now seeing in the pipeline today versus what you maybe saw a couple of months ago shifting a little bit? Thanks.

Kenny Gunderman, CEO

Sure, Mike. It's Kenny. I'll start with your first question and then ask Ron to comment on your second. I think on the lease-up, whether it be a Uniti Leasing or at Uniti Fiber, and we're really trying to show both. There are lots of different ways to look at it. But ultimately, we're extremely pleased with both. And the lease-up could be wireless or non-wireless. It could be the second tenant or the third wireless tenant, or it could be an enterprise or school or government entity. We're relatively agnostic to that. And so in terms of the pacing and the trajectory, I think, it's been steady from the time we've deployed many of these networks. It's been steadily building as you would expect. You get into these markets, you're building more and more networks, and you're establishing more and more of a presence with customers and more of a brand, and it just builds on itself. And that's exactly what we've been saying. So we're very pleased with it and expect it to continue. And importantly, we've said this in the past, I can't remember if it was in our prepared remarks or there or not, but most of these networks, including our national network, are highly underutilized, meaning there's a tremendous amount of capacity in the network already that we can deploy without a substantial amount of additional capital. So we're very pleased with the progress there. Ron, do you want to comment on the second question about the leasing funnel?

Ron Mudry, CRO

Sure. Thank you. I would say, we've only been actively marketing this new fiber that we got through the Windstream settlement for a short period of time. Relative to the sales cycle, dark fiber has a much longer sales cycle than lit services does. As we've been developing the sales funnel, I would say that opportunities are becoming better qualified. Some drop out of the funnel because we've closed them; others drop off because they don't qualify for some reason. But overall, we've seen a steady growth in interest, and the transactions are moving their way through the qualification, design and so forth phases of the sales cycle to get to an actual sale. As I look at the sales funnel, obviously, we're very well-diversified in terms of the different segments that we're serving. The regional carriers have seen an increase in interest recently. That's because the nature of the Windstream settlement fiber involves a lot of regional markets in Tier 2, Tier 3 reach, compared to our national long-haul network that connects larger markets together. So overall, we've seen strong demand, and actually, I'd say we had our best month in bookings in April since 2019. So things are definitely trending up.

Michael Rollins, Analyst

Thank you.

Operator, Operator

And our next question comes from David Barden with Bank of America.

David Barden, Analyst

Hey, guys, thanks so much for taking the question. So I guess, Kenny, I got to ask this question. You know, there's a slide 9, there's 186 opportunities out there. The Windstream bankruptcy was reemerged months ago. Once upon a time, this was never about being an organic execution story; it was about being an OpCo-PropCo unique REIT with a unique private letter ruling from the IRS and improved cost of capital. You could help people do things they couldn't do on their own. Is that not the story anymore? Because I guess during the Windstream bankruptcy, I was – okay, I get it, they can't do deals because the Windstream bankruptcy is going on. But now that it's been over for nine months, nothing's really happening. And I’m wondering if the whole story is different, and then the focus on the execution in the fiber deployments in the customer base is really about trying to get some kind of fiber multiple, which other companies are trying to get as well? I'm just trying to understand what the story is today. And I guess the second question is with respect to this Biden Infrastructure Bill, is this amazing news for you guys, because you're in the exact spot where this money is trying to exploit the under-penetrated broadband opportunity, or is it terrible news because this money is going to go to the municipalities and cities in the markets where you operate with the express purpose of competing with you guys? Thanks.

Kenny Gunderman, CEO

Hey, David, all good questions. Look, first of all, to your comment about nothing happening, I completely disagree. So let me go back and I'll eventually build up to that. Our strategy from the beginning was to build an operating platform in addition to being acquisitive from an M&A front. We wanted to have an operating platform where we could have day-to-day, active interaction with the big wireless carriers, the data-centric providers, the MSOs, the national carriers, and the real big consumers of broadband and fiber. That would allow us to deploy capital organically to build a fiber network and operate a fiber network in addition to being an M&A roll-up play. If you remember, our very first transaction back in 2016 was the buy of an operating business. It was our first acquisition out of the gate. For nine months after being spun out in 2015, we got the question, 'Hey, what's going on? What's happening?' and it took us a while to finally find the right first deal. After that, the floodgates were open, and the acquisitions we did were a combination of platform companies that were combined with our operating business, as well as portfolios of assets. Some of those assets were structured as sales leasebacks, and some were just straightforward acquisitions of assets. Today, when you fast forward to where we are, I think that strategy is working exactly as we designed. We've got a terrific operating platform that’s putting capital to work, building new fiber, adding new long term customers with locked-in attractive economics, and we’re leasing up that fiber very effectively. But we also have an M&A platform that, yes, was somewhat on pause for a year or year and a half. As I've said repeatedly, we've been very active, and as we've always been, we're going to be very disciplined on the next opportunity. I love and respect the questions about, 'Hey, when are you going to do another deal?' We're going to do another deal because to me, that is a compliment; it means people liked our old deals and the ones we've done in the past, and they want to see more, and I'm all for that. But one of the things that has led to those good deals was being disciplined, and we were careful about doing the right ones, and that's what we're going to do. So I like that we're active and that you'll see more of those. On page nine, when you talk about these opportunities and the customers, it's important to point out that most of those opportunities are selling dark fiber or selling long-haul wholesale contracts. Those are basically just OpCo/PropCo relationships by another name. I mean we're selling access to fiber; we're very passively managing that fiber, very light touch, very high margin, low CapEx, and that's essentially the same economics being driven from the types of deals you're referencing. The OpCo/PropCo, sale leaseback, they're all very, very similar in nature. So locking in long-term customers, steady economics, very low churn, and I think the customer base on page nine is highly consistent with that strategy. Yes, we love the fiber multiple; that's exactly what we're aspiring to because we are a fiber company. We are also very excited about the infrastructure bill. I think it's another example of bipartisan support for getting funding into the industry to help expand broadband. When you look at the two competing bills, the Republican and the Democratic bills, there’s a lot of disparity, but one area that's relatively consistent is they're both proposing substantial dollars for broadband deployment. Deployment is not at all competitive to us; it's highly complimentary. These are dollars that will be spent at the edge of the networks, either deploying fiber to the home in most cases, or other technologies like fixed wireless, which will eventually drive traffic onto our fiber network. We're not going to be direct recipients of any of this federal money, but we will be a derivative beneficiary of it. We have seen that in past programs like CARES funding or the E-rate, you name it; these are dollars that get into the industry, and they find their way to an infrastructure provider like us because service providers use that capital to build networks, and they're coming to us to build those networks. Our sale leaseback customers, and I’m talking partially about Windstream, but also about some of the cable companies, MSOs, and others accessing our network through sale leaseback or dark fiber, are substantial recipients of RDOF. We're having lots of discussions with carriers about accessing our network all over the country, deep into these rural areas. We have fiber deep into these areas, and many of these recipients need fiber out to the edge, Metro rings, or fiber into the CEOs, and in some cases, fiber even to the home. We’re seeing an uplift in customer discussions related to using RDOF money to expand their networks. We believe we will be big beneficiaries here.

David Barden, Analyst

All right, Kenny, thank you so much. I don't get the softball moniker very often, but I appreciate it. Thanks.

Operator, Operator

And our last question comes from Simon Flannery with Morgan Stanley. You may begin.

Simon Flannery, Analyst

Great. Thanks a lot. Good evening, Ron. One of the telcos yesterday was talking about delayed decision-making in the enterprises and hoping that activity would pick up later in the year. I was just wondering what your conversations are like as the economy reopens? Are you seeing people more willing to make big decisions or has this really not been affected by the COVID lockdowns? And just any updates on the Windstream disclosures, how their business went in Q1? And will we be getting any more disclosures during the course of this year, or more again with the 10-K? Thank you.

Ron Mudry, CRO

Sure, thank you. I'll take the first question and then refer the second one to Kenny. I'd say, on the enterprise side, when COVID first hit and the shutdowns happened, obviously, we were affected by that. But then it rebounded quite significantly after things began to settle down a little bit. I'm sure there are companies out there that are still assessing their situation because different sectors are affected differently by what's happening with COVID and the shutdowns, right. But broadband is required by virtually everyone. Our enterprise business continues to grow at a very significant pace and is achieving its objectives for the year. We feel very positive about that. So maybe we're less affected; I don't know, but our enterprise initiatives seem to be on track to me, and I think it's getting stronger as the economy continues to recover. Kenny.

Kenny Gunderman, CEO

And Simon, on your Windstream results question. They're reporting, I think, in 10 days, so I can't get ahead of those results. We will be making some disclosures at that time. More to come there. I will say, and this is a little bit related to David's question, that we are very, very encouraged and pleased by the industry overall with respect to residential broadband successes, especially among the traditional telecom spaces where fiber-to-the-home is being deployed. Whether you're looking at the very large carriers down to some of the more regional ILEC players, public or private, the successes on broadband ads, especially where fiber-to-the-home deployments are being made, are encouraging. This suggests positive outcomes for Windstream and carriers like Windstream. Also, in our view, at least, it validates our GCI program. We're spending a lot of dollars to overbuild some of the corporate portions of our network and to future-proof those portions of our network with fiber, much of which is fiber-to-the-home. Additional details will come on Windstream results.

Simon Flannery, Analyst

Great, appreciate it. Thank you.

Operator, Operator

And we have no further questions at this time. I will now turn the call over to Kenny for closing remarks.

Kenny Gunderman, CEO

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

Ron Mudry, CRO

Thank you.

Operator, Operator

Thank you. Ladies and gentlemen, this concludes today's conference. Thank you for participating. You may now disconnect.