Good morning and welcome to today's conference call to discuss the 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.

Thanks, Bill. Good morning, everyone, and thank you for joining. I'm excited to talk about another solid quarter of performance at Uniti in our pending combination with Windstream. But before doing that, I want to first acknowledge the terrible impact of hurricanes Helene and Milton. Our thoughts are with the many people who have suffered loss and damage in the affected areas. I also want to thank emphatically the loyal Uniti first responders and support employees who yet again provided terrific, virtually immediate support to our customers and communities. While our response to such national disasters is a core competency and regularly complemented by our customers, Uniti leadership never takes your service for granted. Now, turning to the quarter and starting on Slide 4. Uniti once again delivered a solid quarter of performance led by the continued strong demand for our mission critical fiber infrastructure by various customers, including hyperscalers. Paul will provide more details on our updated guidance later on, but we're slightly increasing our full-year 2024 revenue outlook as a result of this strong demand. Our core recurring strategic fiber business grew 3% in the third quarter, fueled by exceptional growth in enterprise, wholesale, and dark fiber revenue of 10%, 14%, and 18%, respectively. When paired with our industry-leading 0.2% churn, we remain on track to deliver 4% to 6% MRR growth for the full year. Turning to Slide 5, we had another strong quarter of new bookings. While wireless bookings have remained muted so far, we are encouraged that we'll see a pickup in activity towards the end of this year and into 2025. This downturn is more than offset by demand from other customers including fiber-to-the-home carriers, which are driving substantial demand procuring middle mile and inner city backhaul to connect their neighborhoods. The amount of…

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 on 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 period -- same prior period prior 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…

Thanks, Paul. We continue to make great progress on our timeline to close our pending merger, and 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, Winstream 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…

Thank you. [Operator Instructions] Our first question comes from the line of 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, you need these advantages. Thanks.

Good morning, Greg. Thanks. Yes, we wanted to provide more color on the types of transactions we're pursuing with this new slide that we hit in the prepared remarks. And really, when you look at Montgomery, the one you mentioned, it's really part and parcel with the ones on this page. And it’s -- what we're doing at Uniti with respect to the hyperscalers is we're building very strategic fiber when we're working with them. We're not building fiber off in remote locations that we can't use for a second, third, or fourth tenant. We're building fiber that's in the core of our network in markets like Montgomery or connecting markets like Montgomery to Huntsville or Huntsville to Mobile, which give us tremendous lease-up potential on top of the initial build. And so that dovetails, I think, nicely into your second question, which is the economics of these deals, how do they work for us and how do they fit within our previously stated strategy of our anchor plus lease-up model. And we believe they fit squarely in that model. And we've always talked about building anchor fiber in the 5% to 10% initial cash flow range, but then having a lease up strategy on top of that that gets you well above that 10%. And as we talk about every quarter, we're tracking well above those performance metrics when we look at all the anchor bills we've done over the past number of years. And with respect to these hyperscaler deals, I would say -- and when you do an anchor deal, if you take a lower NRC, that puts more stress or more focus on the need for lease up in order to get to those returns. And conversely, if you have a higher NRC, there's less stress…

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 of 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, we're -- in terms of the fiber, your first question, look, three or four years ago we were selling six to 12 strands generally to hyperscalers. Now we're delivering on average I'd say 864 strand count deals and in some cases more. And so, there's been a substantial pickup in the amount of fiber and just general infrastructure that they're procuring. And to your question about how much fiber we're keeping for ourselves or building for ourselves, I would say it's a substantial amount on par with what we're delivering, if not more. So anytime we break ground and put in new network, we're planning -- future-proofing our own network and own capacity needs. And we're keeping in mind the amount of capacity we're selling. In the past, when we were selling six to 12 strands, putting in 144 count cable seemed like enough. But now when you're not and you're selling 864 strand count, you need more. You need more capacity and more conduits. And so, we're absolutely using this as an opportunity to not only deliver the fiber that our customers are demanding, but we're also future proofing our network, which goes back to Greg's question. I mean, we just feel very excited about the lease up potential that we're building in for ourselves with the fiber that we're delivering. In terms of the new market expansion, I think there's multiple new market expansion opportunities for the new Uniti. Starting with Kinetic, currently today, Kinetic has built fiber to roughly 37%, 38% of their footprint. And we have a plan to get to 60%. So that's a substantial pickup in the number of markets that -- where Kinetic has copper today and we have the opportunity to build fiber. And we think there's potentially an opportunity…

Great that's really helpful color. Thanks.

Thank you. [Operator Instructions] Our next question comes from the line of David Barden from Bank of America.

Hey, guys. Thanks for taking the questions. I guess, a couple if I could. Kenny, I guess on that slide is the green and the yellow kind of the progress of the merger. What's not on there is kind of the regulatory conversation that you're going through on a state-by-state basis, can you kind of give us a little bit of color about what is the act on both sides, from the state regulatory agencies, and are there some longer polls in this tent than others? Second, Paul, could you kind of just step us through the one-time revenue benefit that is causing you to guide up on revenue but is not flowing through to the EBITDA line, that'd be helpful. And then I guess my last question, if I could, Kenny, I just want to drill down a little bit on the hyperscale thing to follow up on the first question, which was, the selling process. I mean, it kind of feels to me like the hyperscalers know [indiscernible] today where they're building. So they don't necessarily need to be sold, they need to be -- they have a route. And I guess they're out there hunting for the people that have that route. And is that -- is it more like a reverse sale? I'm just trying to understand how that whole thing is working since it's so 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 deal 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 a number of 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, so Frank, on the benefit from the one-time revenue for the quarter. So we are taking Uniti leasing guidance up $3 million as a result of this one-time deal or one-time revenues that we reported. But it is flowing through to the bottom line. There's a $2 million increase, corresponding increase, in our guidance for Uniti leasing EBITDA for the year. So it is flowing through. It's just being offset by also a $2 million increase at corporate in terms of expenses. So a decrease in EBITDA guidance at corporate as a result of increased SG&A costs. And those costs are primarily being driven by performance-based comps. So it's just -- there's an offset to that one-time revenue profitability that's flowing through.

Thank you.

And David, on the hyperscaler question, first, just as a reminder, we've said this before, but I think it's worth reiterating that not all of these deals are the same. The hyperscalers are -- first of all, they're not all one single customer. They all have different buying patterns, of course, but also in some cases we're selling traditional waves or we may be selling traditional dark fiber IRU on existing network and it's just their typical network planning for current and future uses. And so we may be selling six or 12 strands of dark fiber, or we may be selling 100 or 400 gig waves in the traditional sense. I think you're -- and by the way, that's terrific business for us, and it's a growing part of the funnel, and it will continue to grow on a go-forward basis. And I highlight that because I actually -- we think once we start to hit the inference phase where people are using more of the AI at the edges where you can't -- where a lot of that data can't be cached and it has to be used real time, that's when a lot of the lit fiber on the edges will become even more valuable and I think that's when you'll start to see a lot of this business flowing through into MRR as opposed to now. You're seeing a lot of these lumpy type deals that we're explaining and it's either in bookings or it's not or it's a one-time sale or it's not. And I think that's the heart of your question. What's the sales cycle like for those types of deals where the hyperscalers are building new data centers, for example, in a unique location. And look, what I would tell you is, the fiber is not -- the fiber piece of it is not what's driving the decision initially. For the hyperscalers, it's procuring the land, and it's procuring the power and the grid capacity, and obviously building the data center. And then from there, the hyperscalers, I think, are looking for fiber providers that have network near the location or can justify building it off of an existing location. And so it goes back to my earlier question. It's not really a traditional sales cycle, if you will. I think the majority of the capital required for the hyperscalers to build these data centers is not the fiber. It's the data center, the land, and the power. And then fiber comes later. And so in some ways that's a good thing, right? Because there's a little bit less focus on getting the last dollar of economics and it's more about getting that fiber built on time and getting it turned up expeditiously. And I think in our markets, our core markets, we have an advantage when it comes to providing that.

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.