Uniti Group Inc. (UNIT) Q2 2017 Earnings Report, Transcript and Summary

Welcome to the Uniti Group's Second Quarter 2017 Conference Call. My name is Valerie, and I'll be your operator for today. A webcast of this call will be available on the company's website, www.uniti.com, beginning August 4, 2017, and will 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 the statements. The factors that could cause actual results to differ are discussed in the company's filing with the SEC. Discussions during the call will also include certain financial measures that were not prepared in accordance to generally accepted accounting principles. Reconciliation of the 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.

Thank you. Good afternoon, everyone, and thank you for joining. On July 3rd, we closed our acquisitions for Southern Light and Hunt. Uniti Fiber now owns a fiber network expanding approximately 31,500 fiber route miles across 15 states and will be generating over $260 million of annual revenue and over $100 million of annual adjusted EBITDA on a pre-synergy basis. We've discussed in the past how these acquisitions will help us achieve scale in our fiber infrastructure group, expand our carrier relationships and accelerate future lease-up of our network. We're more excited about that now than we've ever been. Pro forma, Uniti Fiber had a strong second quarter of sales bookings with approximately 70% coming from the wholesale, enterprise, e-rate and government customer segments. While we continue to see robust demand and bookings with our wireless customers, the change in mix among verticals is due to contributions of the local sales teams of Southern Light and Hunt. Our new acquisitions bring with them a proven set of products and go-to-market strategies to sell fiber-based solutions to local schools, governments and enterprises. We are excited about leveraging this expertise in the legacy Uniti Fiber tier two markets and we believe the size of the local school, government and enterprise market to be a significant revenue opportunity over the longer term. The macro trends in our business remain positive as the demand for bandwidth exceed the available supply in regards to wireless data consumption. So far this year, we upgraded the bandwidth on 475 of our backhaul sites and have pending orders for an additional 82 sites, which will create high margin incremental run rate revenue when complete. We are seeing per site bandwidth growth from all four national wireless carriers. In addition to bandwidth growth, we are also seeing each of the carriers prepare for and begin the densification of their networks in our tier 2 markets. To prepare the core of their networks for densification, carriers are either leasing dark fiber or purchasing large bandwidth Ethernet circuits. During the second quarter, for example, we received orders for dark fiber for 87 sites from a wireless carrier under a new master lease agreement that spans 13 states. We expect the number of sites to be ordered under this MLA to grow to over 1,000 over the next few years as this carrier prepares its network for densification by increasing the bandwidth of the backbone for their network that serves small cells and macro towers. Two other wireless carriers have recently requested proposals for 1 gig to 10 gig pricing for a large number of sites in the core part of their network of served markets. While we've upgraded backhaul bandwidth speed in past years to 1 gig to cover hotspots around stadiums and college campuses, this is the first time carriers have requested proposals for this level of bandwidth on a larger scale basis. Similar to the dark fiber deployments, these large pipes will be used to connect small cells and macros when they're built. In terms of actual small cell densification, our bookings and funnel continues to grow with all four of the wireless carriers. This activity reinforces our thesis that small cells will be an integral part of the wireless architecture in both major metro cities and the smaller tier 2 and 3 cities where we operate. In addition, we also received 320 add-on small cell node orders in three different markets that were previously awarded to us in prior quarters as carriers are pushing small cell deeper into their networks. These anchor orders and incremental awards drive attractive lease-up economics. Whether it's small cells, dark fiber or large gig plus Ethernet service, the densification of wireless networks is well on its way for all the national carriers. We are well positioned to deploy our existing inventory of over 1.2 million fiber strand miles or construct new fiber to meet this demand and believe densification will be a catalyst for revenue growth for Uniti Fiber for many years. Let me now turn to the M&A market and our M&A funnel. There has been and we believe will continue to be a very active M&A market focused on companies that own valuable fiber assets. The demand for fiber by operators not only highlights the value of the assets we currently own, including nearly 5 million strand miles of fiber, but it also validates our fiber focused communications infrastructure strategy. Fiber is the new mission-critical communications infrastructure asset that is the necessary ingredient for wireless broadband proliferation. Fiber can be deployed with numerous types of anchor customers including not just wireless carriers but data content providers, schools and government entities. The available lease-up potential beyond those anchor customers is also substantial. Our M&A funnel remains very robust. As our footprint grows, the number of available contiguous targets actually grows as well. The vast majority of our pipeline remains proprietary and we fully expect to be active with attractive, accretive acquisitions in the second half of the year. In addition to company acquisitions, we continue to develop a sale leaseback funnel focused predominantly on fiber assets with very attractive anchor customers, including asset acquisitions and CapEx programs building new fiber with anchor customers. With that, I'll turn the call over to Mark to review our financial results and guidance.

Thanks, Kenny. Good afternoon, everyone. We reported solid second quarter results today that were in line with our expectations. Consolidated revenues were $213 million with consolidated adjusted EBITDA of $179.6 million. AFFO for the quarter was $0.60 per diluted common share. Net loss attributable to common shares for the quarter was $18.2 million or $0.11 per diluted share. The net loss for the quarter includes $2.1 million non-cash charge for the change in fair value of contingent consideration related to the Tower Cloud small cell deployment milestones. As Kenny discussed, Uniti Fiber continues to see strong small cell order flow from all of the wireless carriers as they continue to densify their network. Uniti Fiber reported revenues of $35 million and adjusted EBITDA margins of 36% or $12.6 million. These results include just over $1.5 million of realized cost savings during the quarter or over $6 million on an annualized run rate basis. Maintenance CapEx for the quarter was $1.4 million or 4% of revenues. Net success based CapEx for Uniti Fiber was $25 million this quarter and was primarily deployed towards the Augusta and North Florida dark fiber builds. Uniti Fiber continued to make good progress towards completion of these dark fiber projects, both of which are for wireless carriers. The Augusta project covers 400 route miles and is scheduled to be completed late this year. The North Florida build covers over 1,000 route miles and is scheduled to be completed by the first half of 2019. On the North Florida build, we expect over half the total sites will be turned over this year, with the remaining sites turned over in stages before final project completion. With the closing of the Hunt and Southern Light acquisitions, Uniti Fiber now has three additional major Florida dark fiber builds in progress for wireless carriers, covering over 2,000 route miles. Two of the projects are expected to be completed late this year or in the first half of 2018. The remaining project, which runs along the Gulf Coast, is expected to be completed in the late 2019. These projects illustrate the attractive organic investment opportunity in Uniti Fiber's business as they are anchored by 20 year leases with high credit quality wireless customers. Furthermore, these builds are in the Southeast region, where we have continued to gain operational scale and have healthy future lease-up prospects to drive incremental returns. Following the acquisition of Hunt and Southern Light, Uniti Fiber now has over $1.2 billion of revenues under contract, providing excellent line of sight to future cash flows. These long term contractual commitments are with high quality customers, and nearly 40% are for future dark fiber and small cell deployments. Uniti Towers completed and closed on the acquisition of 16 of the NMS development towers during the second quarter this year, bringing year-to-date completions to 40 development towers. The balance of the NMS development towers should be completed this year or in early 2018. At quarter end, Uniti Towers had 510 completed towers. At closing, Hunt Telecom had 121 towers that are now included in our Uniti Tower portfolio, bringing our current tower count to 631. The Hunt towers had historically been used principally for e-rate services. However, we expect to market the towers to wireless carriers over time. Our leasing segment revenues were $170.9 million with adjusted EBITDA of $170.5 million for the second quarter of this year. Our Leasing segment benefited in the second quarter from nearly $80 million of improvements to our network made by Windstream with their capital. On a cumulative basis since our spin-off, we benefited from $340 million of tenant capital improvements completed by Windstream. Turning now to our capital markets activity. In connection with the closing of Southern Light and Hunt transactions, we issued 19.5 million common shares and closed on the $200 million of senior unsecured notes due 2024. At quarter-end, we had $934 million of unrestricted cash and $235 million of outstanding borrowings on our $750 million revolving credit facility. On July 3, we closed on the acquisitions of Hunt and Southern Light, using approximately $762 million of cash and issued $4.2 million operating partnership units. Following closing, our pro forma total debt to annualized adjusted EBITDA was 5.9 times, and net debt to annualized adjusted EBITDA was 5.7 times. Our regular quarterly cash dividend of $0.60 per share was declared earlier this week, representing an annual dividend rate of $2.40 per share. Turning now to our 2017 guidance. Our outlook for this year incorporates our acquisitions of Hunt and Southern Light as of the closing date on July 3. Accordingly, our outlook reflects the consolidated results of operations for six months in 2017 for both transactions. On a consolidated basis, we expect reported revenues this year to range between $913 million to $918 million, and adjusted EBITDA to range between $748 million and $753 million. During 2017, Hunt and Southern Light are expected to contribute a combined $64 million of revenue and $34 million of adjusted EBITDA, representing adjusted EBITDA margins of 53%. Uniti Fiber's integration efforts are proceeding smoothly. The combined organizational structure is in place. Go to market strategies are developed and both operations and back office integration execution is underway. We continue to expect Southern Light and Hunt to provide $12.5 million of run rate cost savings within 24 months of close and cost savings in the 2017 post close period of $2.5 million. Accordingly, Uniti Fiber is expected to report consolidated revenues this year of $205 million with adjusted EBITDA margins of 42% or $86 million at the midpoint of our guidance range. Net success based CapEx for Uniti Fiber is expected to be between $95 million and $105 million. Uniti Towers revenue for 2017 is expected to be between $8 million and $9 million, with adjusted EBITDA near breakeven. CapEx for Uniti Towers is expected to be $45 million to $50 million, including approximately $20 million for ground lease investments this year, with the balance towards tower development. Revenues from our leasing segment will be approximately $684 million, including $30 million of non-cash revenues, which is $3 million higher than our prior guidance, reflecting higher amortization of tenant capital improvements made by Windstream. Uniti Leasing adjusted EBITDA will be approximately $682 million for the year. Our consumer CLEC segment is expected to report revenues this year of approximately $18 million, with adjusted EBITDA of about $4.5 million or about 25% adjusted EBITDA margins. Moving to corporate items. We expect interest expense this year to be approximately $306 million, including $23 million related to the amortization of debt, discount and financing cost amortization. Corporate G&A expense should be approximately $27 million, including $6 million of corporate stock-based compensation. We now expect weighted average common shares outstanding for the third and fourth quarters to be approximately 175 million, and weighted average common shares outstanding for the full year 2017 to be 169 million, taking into account the issuance of 19.5 million shares in late April. Accordingly, we expect full year reported AFFO to range between $2.51 and $2.55 per diluted common share with a midpoint of $2.53. The impact of pre-funding the Hunt and Southern Light acquisitions was $0.07 on AFFO per diluted share. That impact is about $0.03 less than we previously indicated due to the timing of closing in each transaction. Excluding the pre-funding impact, our midpoint AFFO guidance would have been $2.60 per share. As a reminder, our outlook is subject to change based on the finalization of purchase price allocation adjustments. The full range of components of our guidance is included in our earnings press release issued this afternoon. In closing, we continue to be focused on deploying capital to accelerate the growth and diversification of our business. Our M&A pipeline is active with opportunities to execute on a wide spectrum of deals, including entity acquisitions, sale leasebacks and other transactions. That concludes my prepared remarks. We're now ready to take your questions. Operator?

[Operator Instructions] Our first question comes from Matthew Niknam from Deutsche Bank. Your line is open.

Just two, if I could. One on the dividend. Maybe if you can give us latest thoughts there, both in terms of sustainability and growth potential as fiber contributes more in forward periods. Just trying to really get a sense of the growth potential or maybe even sustainability in light of some of what's going on at your largest tenant financially. And then secondly, just in terms of deal pipeline, maybe Mark or Ken, if you can just talk about what you're seeing in the pipeline, particularly around opportunities in valuation, given some of the elevated interest from larger players in fiber and some of the valuations we've seen in larger markets to date. Thanks.

Sure, good afternoon. This is Kenny, I'll take both of those questions. So first of all, let me address your reference to Windstream and then dovetail that into our discussion of our dividend. But first of all, with respect to Windstream, I think it's important to point out that we view our relationship more as a creditor versus an equity investor and that's a very important distinction. Secondly, with respect to our lease payment from Windstream and to your point, we continue to view it as very, very safe and a very high-priority payment from their perspective. And so we remain highly confident in that lease payment. Thirdly, we applaud the decision to cut their dividend. We think it was the right corporate finance decision on their part and ultimately is credit enhancing. If you look at the amount of cash flow savings even through the first quarter of 2019 and if they were to execute on the full share repurchase, there's still close to $100 million of incremental cash flow coming into their system. And then certainly beyond the share repurchase past the first quarter of 2019, there's over $100 million of annual cash flow savings from the dividend cut. And so that we think will be used for debt pay down and/or network enhancements and both of those are credit enhancing. Thirdly, we are, as we've said in the past, very supportive of the BroadView and EarthLink acquisitions and think there are strategic benefits that come with those deals. But from a credit perspective, we're very supportive of those plus the dividend cut when you consider, inclusive of the synergies from those deals and the dividend cut, there's close to $300 million or more of incremental cash flow coming into the system. And so from our perspective, those are all positives. Our rent coverage essentially is going from 2.9 times to close to 3.5 times coverage. And so from our perspective, we view the recent activity there as positive. And with respect to your question about our dividend, we feel highly, highly confident in it and continue to view our strategy as being a growth dividend story and that has not changed. With respect to your second question, I think there's definitely been a lot of activity on the M&A front and we watch it very closely, as you would imagine. I'll point out a few things and I think most of these points are repetitive with ones we've made in the past but they continue to be true. There shouldn't be a perception that just because there's an asset that's sold and we're not the buyer that, that's a loss on our part. That's really almost has never been the case. There are various reasons why we may not be the buyer of an asset. It could be for value reasons, as you pointed out, or it could be for diligence reasons. It could be for deal negotiating points. Or most likely, it is that many of the assets are just not a fit with our strategy. And I would highlight that a number of the businesses or assets that have been sold most recently are ones focused on tier 1 markets, NFL cities, versus our strategy has been and will continue to be to focus on tier 2 markets. And so when you consider that we have signed and closed four fiber acquisitions in the past, I guess, roughly 18 months, and that's during a time when others have also been acquisitive, we're very pleased with the activity and the progress that we've made and when we look at our sales funnel -- I'm sorry, our M&A funnel, continue to be very encouraged and excited about the prospects that are there for us. And so there's no change in that point of view from previous quarters, and we expect to be active going forward.

Thank you. Our next question comes from Phil Cusick of JP Morgan. Your line is open.

Two. First, I guess following up on the first one. Given your position as a creditor to Windstream and the sort of large position you have with them, would you rule out, for us, an acquisition of the EarthLink assets at this point?

Phil, we're not in active discussions there and as I've always said, that it's a high bar to do anything with respect to EarthLink assets. So I wouldn't expect to see anything there. So I think it's fair to say there's no prospect for that.

Okay. And then, second, can you talk about the pipeline for new tower builds in the U.S.? I think it sounds like you've got $30 million dedicated this year to tower builds. What's that look like in the U.S. and how should we think about the pace of those coming on? Thank you.

Sure. I don't want to comment on any specific customer activity but we have always viewed the tower opportunity as opportunistic on our part. We're a fiber company first and where we can find macro tower opportunities that are synergistic with our fiber business and/or our big wireless carrier customer relationships and we can find tower opportunities that are proprietary in nature. So in other words, we're not competing against the big three tower REITs and ultimately find economically attractive opportunities then we will pursue those. And when you look at situations in the U.S., like FirstNet for example, and other activity among the wireless carriers as they continue their 5G deployments, which by the way, there's a lot of talk about small cells when it comes to 5G deployments but there are also new macros that are going to be part of that network engineering, all of which require fiber. And so when you consider those opportunities, we do think there will be very attractive macro opportunities for us and we're very excited about them. And in terms of pacing, I think that the CapEx guidance for the rest of the year is a pretty good indicator of what you could expect this year and we'll have more to say about future activity when time permits.

Thank you. If I could sneak in one more. Do you expect to be unleveraged free cash flow positive in the fiber business next year? Over the next few years? Or sort of a net investor in fiber? Thank you.

We'll be a net investor. And again, that's because we'll still have dark fiber projects that we're investing in. We'll continue to have, given the small cell projects that we've had good success at winning those awards, we'll continue to invest in small cell. So I do expect us to continue to have investments in the fiber business next year.

Thank you. Our next question comes from David Barden of Bank of America. Your line is open.

So I guess three, if I could. Just for the first one, following up on Phil's question just in terms of, maybe Kenny or Mark, the economics that inform your appetite for the tower builds. Obviously, the carriers have been looking for novel economic models that break with the traditional 3% escalators and such. And so could you kind of talk about your willingness or your competitive edge in terms of structuring these deals? For instance, do you bundle fiber and tower economics together to create a return justification for making the investment? The second question was just, could you kind of talk about the quarter-on-quarter, I think it was like $100,000 increase in revenue in the fiber business, not exactly I think, torrid growth, sequentially. So if you could kind of address that. And then the third piece. I think, Mark, I heard you at, maybe it was PCIA, talking about contractual relationships with carriers and how some carriers are striking agreements and then breaking them and trying to renegotiate them later. And I was wondering if you could kind of talk a little bit about your experience in that regard in the marketplace right now and how big an issue that is. Thank you very much.

Dave, let me start. I'll start with your last question. Whatever you heard on that topic, that was not me. So I don't recall any comments I've made in that regard.

So, David, to your question about tower economics. I think the first point to stress on that is that we're very opportunistic and selective. We're going to be very opportunistic and selective on whatever tower opportunities we pursue. So we're a fiber company first and towers are opportunistic where we see economics that are attractive to us. And things that make those opportunities attractive include situations where it does feed or complement our fiber business. So I think you're thinking about the bundling in the right way. It may not be a direct bundling, but in terms of customer relationship, improving the quality of a customer relationship that can be expanded across the fiber business, the small cell business, we definitely see benefit there. And in terms of the economics, we have seen and heard of models out there from some of the carriers on new towers that are just uneconomical to us. We don't find them attractive but we do think there are some that could be. And those economics in our view are very similar to some of the dark fiber economics that we see on the fiber side. And as we've talked about previously, we think there are very strong analogies between anchor dark fiber deployments and macro towers for a variety of reasons. But when we see economics that are similar, those start to get appealing to us.

Dave, on your other question about the sequential growth in the fiber business. I believe most of that's related to the fact, if you remember in the first quarter I mentioned that we had higher construction revenues in the first quarter, and that's also one of the things that depressed the margins in the first quarter for the fiber business and so you didn't have that effect in this quarter. I can give you more details if you give me a call back after the call and I can go through it with you in more details, but I'm pretty sure that's the answer to your question. Just to reiterate that, we still expect that these fiber businesses for Uniti Fiber to continue to grow at about a 10% annual growth rate on the revenue side. And so nothing's changed in our outlook there.

Thank you. Our next question comes from Simon Flannery of Morgan Stanley. Your line is open.

Kenny, can we just come back to your commentary on the M&A pipeline? I think you said you saw some accretive deals later this year, and then you went on to the sales and leaseback transactions. Do you expect to see some sales on leaseback transactions this year as well? And then, just an overall commentary on, given some of the Windstream discussions, how are you thinking about credit quality of your tenants here? Or in your pipeline?

Yes. So Simon, with respect to credit quality, that's always our first question with respect to any sale-leaseback opportunity. So it's something we focus on, always have, and we'll continue to focus on that. So very important to us. With respect to activity in the second half of the year, it's always hard to predict timing. But as I've said in the past, when you see a certain level of activity and engagement from counterparties, including certain things like signed NDAs and exchanging documents and focusing on specific assets and negotiating business terms and things like that, those are all positive leading indicators of signed transactions. And so we do have those types of activities going on with respect to high quality credit, high quality tenants and high quality assets. And so feel good about upcoming activity. It's hard to predict timing but feel good about upcoming activity.

And with a goal to being accretive or at least some of them being accretive?

Yes.

Thank you. Our next question comes from Jonathan Atkin of RBC. Your line is open.

So I was interested in the 10% organic growth and if you could maybe just remind us, how do you define organic in terms of the capital needed to build out laterals and so forth? And as you think about that, the opportunity for additional tenancy beyond the anchor tenant, how often might that be a non-carrier entity, whether it's government or SMB or what not? And then I do have a second -- well, actually I guess my second question relates to complementary assets. You talk about macro towers in fiber. And just any sort of updated thoughts on data center assets in smaller markets and to the extent that might still fit into your strategy? Thanks.

I think in terms of 10% organic growth, that is growth from the Uniti Fiber business itself. So it's independent of any M&A, it's independent of any sale leasebacks. So if there's any other clarity we can provide on that, let me know. But that's independent...

Yes. I guess I'm asking about 10% organic growth, what's the capital intensity associated with that? Or is that a same asset growth rate that you're going to get another 0.1 tenants on in place infrastructure. Presumably, that's not the case but I wanted to maybe drill down on that a bit.

Yes. So I've kind of tried to lay out what our CapEx guidance for the balance of the year is. I don't really have what kind of split other than success-based and maintenance. I really don’t have the split in greater detail for that. But some of the organic growth will come from additional success-based investments including, for example, the dark fiber projects that I mentioned earlier. And just on your question, so on those, we do have certainly good deals from the initial anchor tenant. But across the board of those five builds that I talked about earlier, across the board with the additional lease-up that we have already, those projects in aggregate are double-digit yields already. So I would include lease-up opportunities on developed assets in our organic growth [indiscernible].

And as you think about lease-up then, what portion of the time is that a carrier versus a non-carrier?

On those assets, just to give you specifics on those assets, I believe all of the lease up is non-carrier.

Thank you. And then data centers?

Yes, with respect to data centers, we're really not looking at any data centers in the funnel right now. We see opportunities, get shown opportunities, but it's really not a focus and I don't expect it to be any time soon.

And then finally on the inorganic growth of fiber driven, presumably, for maybe towers. How much of that might occur in an edge out fashion or into entirely new parts of the country where you currently don't focus?

Yes, I think the vast -- so first of all, if there's tower growth it will be builds versus acquiring any portfolios. I mean, we think that the prices on tower portfolios are too high and we look at returns that we can get, potentially get, on building as much more attractive. And also back to my earlier comment about proprietary, unique opportunities, when we're dealing directly with the carrier customers we think those proprietary opportunities potentially exist, whereas they don't on portfolios. With respect to fiber, I think you should expect to certainly see more geographically contiguous acquisitions. As we've shown with what we've done in the past, we believe in regionalizing interconnecting networks. That's the way to really drive the best economics and that continues to be our view and will likely play out with our actions.

Thank you. And our final question is from Frank Louthan of Raymond James. Your line is open.

With respect to continued acquisitions. Can you give us your thoughts on other ILEC or cable-type assets that maybe do not have fiber, who might have some better economics? What do those assets look like currently? And just on the Windstream side, Kenny, you referred to sort of a prudent corporate finance decision. Is there anything in their underlying business or trends that you see is concerning or that you think kind of pushed that decision for the dividend? Or was it just, in your view, just simply a financing decision that should ultimately indirectly benefit you?

So, Frank, with respect to your first question. I think when we're looking at consumer broadband opportunities, I think there's a, as I mentioned earlier, there's definitely a focus on credit quality first. And so that's always been a consideration and it will continue to be. I've mentioned many times in the past that we've had opportunities to execute sale leasebacks where we might have what looked like really attractive economics on day one, but when you consider the credit quality or the prospects over a period of time, it's not a good risk-reward trade off and so we've passed. And that continues to be the balance that we look for. I think we're having an increasing amount of conversations with cable in addition to ILECs. But I would say the vast, vast majority of conversations in that part of our business, the Uniti leasing part of our business are focused on fiber and I expect that to continue to be the case. With respect to the second part of your question. Obviously, we follow Windstream's business closely. I think the trends in some of their businesses are challenged and they've got secular headwinds that are well-known and documented. But we continue to believe that they're making the right investments in the network, in the business. We like the strategic fit of the BroadView, particularly the BroadView deal and the EarthLink deal. And so we're encouraged by that. The board agreed, or they've implemented the share repurchase which we, from a purely credit perspective, there's a debt payback or investment in the network alternative that might be preferred. But the other way of looking at that is a board of independent directors agreed to a share repurchase which in and of itself could be viewed as a bullish signal in the underlying business. And so I think that's the perspective that we're taking. So, again, from our perspective, we're very confident in our lease payment and it's business as usual from our perspective with a very extreme focus on growth and diversification.

Thank you. I'd now like to turn the conference back over to Kenny Gunderman for any closing remarks.

Thank you, Valerie, and thank you all for joining. I'd like to close by welcoming, again, the employees from Southern Light and Hunt Telecom to the Uniti family and thank the loyal Uniti employees for their dedication to growing our company. We're very excited about the new leadership team, the integration work thus far and the prospects for Uniti going forward. Thank you, all.

Thank you. Ladies and gentlemen, this does conclude today's conference. Thank you for your participation. You may now disconnect.