Uniti Group Inc. · NASDAQ:UNIT
Uniti — Merger or Acquisition (April 2017)
21 slides from Uniti's merger presentation, Apr 11, 2017
Slide 1: The Communications REIT Acquisition of Southern Light
The Communications REIT Acquisition of April 10, 2017
Slide 2: Safe Harbor
Safe Harbor Certain statements in this presentation may constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, as amended from time to time. Those forward-looking statements include all statements that are not historical statements of fact i
Slide 3: Southern Light Investment Thesis
Southern Light Investment Thesis § Expansive and Dense Fiber Network Comprising 540,000 Strand Miles § Connects Uniti Fiber’s Network Across Southeast Region in Tier II and Tier III Markets § Enhances Products and Services in the Government, Enterprise and Wireless Carrier Segments § Substantial Syn
Slide 4: Combined Benefits of Southern Light & Hunt Telecom
Combined Benefits of Southern Light & Hunt Telecom Uniti Leasing Uniti Fiber Southern Light Hunt Telecom 3
Slide 5: Diversifying Uniti Fiber's Revenue
Diversifying Uniti Fiber’s Revenue Wireless Carriers 79% Customer Revenues (1) E-Rate Ent & Whs & Gov’t 10% 11% Lit Backhaul 57% Dark Revenues Fiber Under & Contract (2) Small $700 M Cells 32% Ent & E-Rate & Whs 6% Gov’t 5% Wireless Carriers 58% Customer Ent & Revenues (3) Whs 20% E-Rate & Gov’t Oth
Slide 6: Uniti Pro Forma Revenue Diversification
Uniti Pro Forma Revenue Diversification Wireless Carriers 58% Windstream Customer Lease Revenues (1) 30% 70% Revenues Ent & Whs 16% CLEC & Other E-Rate & Gov't 9% 17% Note: Data based on fourth quarter 2016 results. (1) Fourth quarter 2016 revenues for NMS and Hunt are unaudited. Hunt’s revenue is p
Slide 7: Pro Forma Uniti Fiber At A Glance
Pro Forma Uniti Fiber At A Glance Dark Fiber & Small Cells 1% Wireless Carriers Lit Dark Fiber 58% Lit Revenues Customer Product E-Rate & & Ent & Backhaul Backhaul Under Small Cells Revenues (1) Revenues (1) (3) Gov’t 45% 35% Whs 57% 20% Contract (2) 20% Ent & Ent & E-Rate & Whs 20% Gov’t Whs 12% E-
Slide 8: Southern Light at a Glance
Southern Light at a Glance Dark Fiber & Small Cells 1% Dark Fiber & E-Rate & Gov’t Small Cells 14% 44% Lit Product Other 6% Lit Customer Ent & Whs Backhaul Backhaul Revenues Under Wireless 30% 49% Revenues (1) 32% Contract (2)(3) Carrier Revenues (1) 50% Ent & Whs 6% Ent & Whs E-Rate & 30% 18% Other
Slide 9: Southern Light Strong & Consistent Growth Track Record
Southern Light Strong & Consistent Growth Track Record $84 $70 $75 $65 2013 2014 2015 2016 $41 $36 $30 $32 2013 2014 2015 2016 (1) 2013 results for Southern Light are preliminary and unaudited. Actual results could differ materially. Investors should not place undue reliance on such numbers. 8
Slide 10: Southern Light Long-Term Revenue Visibility
Southern Light Long-Term Revenue Visibility Remaining Contract Life Wireless 12.2 Years Ent & Wholesale 3.7 Years E-Rate & Gov't 3.9 Years $ in Millions $332.0 M $78.5 M $24.1 M (1) Revenues under contract as of December 31, 2016. Contracts are subject to termination under certain conditions and/or
Slide 11: Significant Synergy Opportunity
Significant Synergy Opportunity § Capture Network Operations Center Efficiencies, Capital Synergies, and Economies of Scale in All Network Operations § Leverage Best-In-Class Construction and Engineering Capabilities to Optimize Cost to Engineer, Operational Synergies Map, Permit and Construct Fiber
Slide 12: Transaction Summary
Transaction Summary § $700 Million aggregate Consideration in Cash and Equity Consideration § $635 Million in Cash, subject to adjustment in accordance with acquisition agreement § 2.5 Million Operating Partnership Units of Uniti to the Seller, Convertible on a One-for-One Basis into Shares of Uniti
Slide 13: Uniti's Facts – Pro Forma
Uniti’s Facts – Pro Forma S&P 400 Uniti Leasing (1) Uniti Fiber (5) Uniti Towers Mid-Cap Company > $8B > $8.5B >$1.2B 573 Enterprise Value Revenues Under Contract Revenues Under Contract Owned Towers (2) Annual Revenue Revenue Uniti Fiber (5) Near Term Debt Diversification (3) Maturities > $950M 30%
Slide 14: Uniti's Vision and Strategy
Uniti’s Vision and Strategy § Building Unique REIT Investment Platform Across Communication Infrastructure Assets § Taking Advantage of Favorable Industry Dynamics Driving Capital Investments § Fiber is The Mission Critical Asset in the Communications Ecosystem § Substantial M&A Opportunities will D
Slide 15: Uniti's M&A Pipeline
Uniti’s M&A Pipeline (1) 69% 65% ASSET TYPE DEAL SIZE ($ in Millions) 8% 12% 12% 11% 23% Fiber <$250 Towers =>$250 and < $500 Ground Leases =>$500 Consumer Broadband 92% PROCESS MIX 8% Process Negotiated (1) This is a summary of the transactions we are actively pursuing as of January 31, 2017. Other
Slide 16: Enhanced Combined Network Footprint
Enhanced Combined Network Footprint Combined Fiber Strand Miles in Service: 4,800,000 Combined Fiber Route Miles in Service: 96,000 Uniti Leasing Uniti Fiber Southern Light Hunt Telecom 15
Slide 17: Appendix
Appendix
Slide 18: Reconciliation of Southern Light Non-GAAP Financial Measures
Reconciliation of Southern Light Non-GAAP Financial Measures (1) $ in Millions 2013 (2) 2014 (2) 2015 (2) 2016 (2) 4Q16 (2) Net income $ 13.7 $ 11.4 $ 12.2 $ 14.7 $ 3.1 Depreciation and amortization 14.3 17.9 20.7 23.6 6.3 Interest expense 2.0 2.5 3.4 3.4 0.9 Income tax expense – – – – – EBITDA $ 30
Slide 19: Reconciliation of Uniti Fiber Non-GAAP Financial Measures
Reconciliation of Uniti Fiber Non-GAAP Financial Measures (1) $ in Millions 4Q16 4Q16 4Q16 4Q16 Pro Forma Uniti Fiber Southern Light Hunt (2) Uniti Fiber Net income $ (5.3) $ 3.1 $ 2.5 $ 0.3 Depreciation and amortization 13.2 6.3 0.8 20.3 Interest expense 3.0 0.9 0.3 4.2 Income tax expense (0.6) – –
Slide 20: Non-GAAP Financial Measures
Non-GAAP Financial Measures We refer to EBITDA and Adjusted EBITDA in our analysis of our results of operations, which are not required by, or presented in accordance with, accounting principles generally accepted in the United States (“GAAP”). While we believe that net income, as defined by GAAP, i
Slide 21: Other Reporting Definitions
Other Reporting Definitions § Adjusted EBITDA: . Adjusted EBITDA is defined as EBITDA less stock-based compensation expense and the impact, which may be recurring in nature, of acquisition and transaction and integration related expenses, the write off of unamortized deferred financing costs, costs