Welcome to the Uniti Group’s Fourth Quarter 2019 Conference Call. My name is Jonathan and I will be your operator for today. A webcast of this call will be available on the company’s website, www.uniti.com, beginning March 12, 2020, and will be - 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 these materials during this call. Discussions during this call will also include certain financial measures that were not prepared in accordance with Generally Accepted Accounting Principles. Reconciliation of 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. Please turn to Slide 4, in our presentation. Before I review our operational performance for the fourth quarter and full year 2019, I’d like to first address our recently announced agreement with Windstream. The agreement in principle between Uniti and Windstream has significant strategic value for Uniti as it positions our company with a true national fiber footprint and ensures further upgrade and expansion of the network in the coming years with additional fiber deployments backed by our commitment to invest up to $1.75 billion of capital in Uniti owned Windstream leased assets, which will significantly enhance the value of our network today and at renewal. We look forward to working with all involved parties as we focus on enhancing Windstream’s competitive position, financial performance and the network Windstream leases from Uniti. As we’ve repeatedly said for some time now, we were committed to reaching a mutually beneficial outcome for both Uniti and Windstream and we believe this agreement achieves that. We’re also announcing today that we’ve agreed to sell 486 of our 672 US Towers located across 32 states and are simultaneously entering into a strategic arrangement with a valued wireless infrastructure provider to continue to build towers in the US. This action is similar to the sale of our Latin American Tower business and US ground lease portfolios and the sale of our Uniti Fiber Midwest operations, realizes substantial value for Uniti and our stockholders, while recycling capital at a highly attractive valuation. I’ll provide more details on the Windstream agreement and the sale of the US Towers later in my prepared remarks. As we begin 2020, I want to reiterate Uniti’s priorities that we laid out last quarter. We continue to drive high margin, low churn, recurring…

Thanks, Kenny. I’ll focus my remarks this afternoon in three areas, first, a brief review of our fourth quarter and full year 2019 performance. Second, an overview of our 2020 outlook on a consolidated basis and for each business unit. There are a number of items affecting comparability of our year-over-year results, I’ll try to highlight the key items in my remarks. Then last, I’ll comment on our balance sheet, capital structure and path forward following the agreement in principle we reached with Windstream. Turning to Slide 5. For the fourth quarter, we reported consolidated revenues $269 million, consolidated adjusted EBITDA of $203 million, AFFO attributable to common shares at $102 million and AFFO per diluted common share of $0.48. Net loss attributable to common shares for the quarter was $11 million or $0.06 per diluted share and included approximately $15 million of transaction related and other cost. Starting with Uniti Leasing. Our leasing segment revenues were $184 million with adjusted EBITDA of $182 million, up 3% each respectively over the year ago period. Non-Windstream revenues and adjusted EBITDA were $11 million and [$2 million] [ph] respectively. They were expected to represent a growing share of Uniti Leasing’s revenues going forward. We have the option to fund growth capital initiatives for Bluebird and other tenants on networks leased from us and we deployed just under $8 million of capital associated with growth capital investment initiatives during the fourth quarter at an initial yield of approximately [9.25%] [ph] Windstream also made $41 million of improvements to our network with their capital during the quarter, bringing the cumulative amount since our spin-off to just over $770 million of tenant capital improvements. Turning to Uniti Fiber. During the quarter we turned over 490 dark fiber and small cell sites for wireless carriers adding…

Thanks, Mark. Please turn to Slide 11. We’ve agreed to sell 486 of our US towers to prominent wireless infrastructure provider for approximately $190 million or 30 times the annual tower cash flows associated with those towers. We believe this transaction realizes significant value for our stockholders as it represents an economic gain of approximately $23 million. Although, we are selling most of the towers we own today, we’re not exiting the tower business. Our focus will continue to be owning and operating a premier portfolio of communications infrastructure assets, while providing a wide variety of solutions to our wireless carriers and other customers. This carefully structured transaction affords us the opportunity to continue building macro towers uninterrupted, but in a reduced CapEx manner at our choosing. We continue to view macro towers is an important part of Uniti’s unique full service 5G offering to our wireless carrier customers. This sale in addition to the sale of our Latin American tower portfolio, US ground leased business and sale of our Uniti Fiber Midwest operations represents another tangible example of the inherent and multiple arbitrage between our some of the parts valuation based on private market values versus our public trading valuation. Slide 12 provides a summary of the 20 year dark fiber IRU deal with a large international carrier that I spoke about earlier. I’d like to highlight that approximately 25% of the fiber sold in this deal represents Uniti owned Windstream leased fiber. The full rights to which we are acquiring in our agreement in principle with Windstream. This is a good leading indicator of the future lease-up opportunities set especially since historically, we’ve not been able to proactively market this fiber including to this particular carrier. Beginning on Slide 13, I’ll now provide a more detailed overview of…

Certainly. [Operator Instructions] Our first question comes from the line of Greg Williams from Cowen. Your question please.

Great. Thanks guys for taking my questions. Kenny and Mark, I just had a question, a bigger question about what’s happened in the last few days. I think the worry is that the equity markets not being favorable, possibly the debt markets drying up. Your means to access capital could be limited. Could you talk about if that’s a concern of yours and alternative means of accessing capital whether it’s [PE intrafunds] [ph] or the tower sale I guess is one way you alluded to it? And then my second question is just on the coronavirus concerns in general, have you talked to your customers, your businesses about any concerns going forward, whether it’s leasing more fiber, delay of 5G, that sort of thing? Thanks.

Yes. And this is Mark. I’ll start with the question. So in terms of the capital, so our guidance doesn’t anticipate any capital raise then actually with the - so with the US towers, we actually expect with no capital raise we would delever based on the guidance that I gave today. Of course the capital markets, as you mentioned, had been pretty volatile over the last few weeks. We obviously track those closely and stay in contact and have routine discussions with private capital sources as well. So we continue to monitor those, continue to have discussions and evaluate opportunities, but nothing to announce at this time and nothing included in guidance.

Yes, Greg. The only thing I’d add to that is, we’ve - last year, year and a half we’ve had limited need to access the capital markets anyway, and so we’ve managed to do just fine. And so as we look forward to another several quarters of potential volatility or more, we’re certainly prepared for that, that’s nothing new for Uniti and we’ll be just fine. With respect to your question about the coronavirus, we’re very focused on that. We’ve not seen any impact with our customers. We’ve not seen any - certainly not with our wireless customers or any of our big wholesale customers. And we really haven’t even seen any with any of our enterprise or small business customers which if I were to guess that’s where I would expect to see some impact. But we’ve not seen any yet. We’re going to continue to monitor it closely and more importantly or as importantly, we’re very focused on making sure we’re doing the right things with our employee base and taken all the precautions that are necessary there.

All right. Thank you.

Thank you.

Thank you. Our next question comes from the line of Philip Cusack from JPMorgan. Your question please. Philip, you might have your phone on mute.

Thanks, guys. Can you first expand on the strategic tower sale? What was the process like and what can you say about the buyer? And then can you talk more about the structure of investment for building towers going forward. It sounds like there would be some at least co-investment there?

Yeah, Phil. So with respect to the process and the buyer we’re - I rather not comment too much on that at this point. We’re actually in the middle of a go-shop on that process. So I don’t want to comment too much, other than to say that our current buyer is a party that we know well, have worked with in the past and it’s one of the non-traditional capital sources that we’ve talked about many times as being a good source of not only capital but potential partnership for us. And so we’re excited about that. But with respect to the structure of the deal, it’s important to reiterate, we’re not exiting the tower business. We’re really utilizing this sale as an opportunity to inject liquidity in a volatile capital market period and this is a good way to add liquidity versus issuing expensive securities. And we’re pleased to have the portfolio of assets in order to do that. But this off-take arrangement gives us the ability to continue investing and building towers but immediate - effectively, immediately selling those to our partner at a premium. And so we’re locking in a return as we do that and we’ll do that for sure through the 2020 period and then we’ll have the option of extending that beyond 2020 if we choose. So strategically that gives us the ability Phil, to continue offering macro towers as an important part of our infrastructure offering to our - particularly our wireless carriers, but it also gives us the ability to do it in a CapEx light manner if we choose to do so.

Got it. Thanks. And then how should investors think about your dividend going forward?

Yes. So I think I’ve referenced earlier that we’re allowed to pay out under the dividend restrictions that we currently have in our debt agreements, $140 million this year. So right now it’s at - or we just paid a dividend $0.15 per share. So we’ll announce the dividend going forward, but I would assume that we’ll pay out the full $140 million during the year. So right now the dividend is set at $0.15 per share based on the current outstanding shares. It’s set to where we would actually pay a little bit higher dividend declared in the fourth quarter paid in the first quarter of next year, similar to what we did last year.

Sorry, I wasn’t clear. What about going beyond 2020, how should we think about the ins and outs of your ability to pay versus your desire to pay a dividend? And rather than using that for the tower investment for example.

Yes. So going forward, I would expect that, I mean, I would expect that we’ll continue to pay a dividend. Currently, as I said earlier, currently we’re limited. Once we’re outside of the limitations in our debt agreement, I would expect that it would increase primarily at least for two reasons. Primarily, it would increase for any capital gains distributions that we will be able to do. And then it would also increase for any - for the 10% of the taxable income - whether ordinary taxable income that we’re not able to distribute currently. In addition to that, what that means in the overall dividend policy will have to see at the time. But generally, I would say, yes we’ll continue to pay a dividend, we think it would be reflective in the future of those at least those two items, if not more, and I think we want to try to pay a dividend that is comparable to peer groups, and also has a - I’d say a comparable payout ratio. So something that indicates a sustainable dividend and the ability to increase the dividend over time as AFFO grows.

Great. Thanks, guys.

Thank you. Our next question comes from the line of Simon Flannery from Morgan Stanley. Your question please.

Great. Thanks very much. Good afternoon. On the tower transaction, why did you not sell all the towers? What was the kind of difference between the ones you’re keeping and the ones you’re selling? And then how do we think about the cash flow in this whole off-take. I understand it’s not running through as CapEx, but will you incur the cost of building the tower, put it in the inventory and then sell it so, how long does that take and what might the working capital impact of that be? Thanks.

So, Simon, I’ll let Mark answer the second part of your question, but with respect to the first part. A couple of things. One, we sized the transaction to the amount of - effectively amount of proceeds we wanted to raise. And then secondly, we have a - as you might recall, we’ve got a portfolio of newly built towers, ones that we’ve been constructing, but also ones that we’ve acquired over the past several years either through direct transactions or as part of our bigger fiber transactions where we just brought some towers along with that. And so what we really monetized here are some of the newly constructed towers which have really one - largely one customer and some additional lease-up, but largely one customer. So it’s a combination of those two things.

Yes. So regarding the working capital. The contract is structured such that we will have periodic closings throughout the year, such that from the time of the completion to the time that we’ll be able to sell the tower it will be a relatively short period of time. So the working capital requirements will be reinvested and kind of - will be returned from existing towers invested in new tower construction fairly quickly.

Great and just one follow-up. What’s your best guess of the final settlement here, timing?

I think, so - good question Simon. I think there is - the next hearing I think is in early April, and we expect that the settlement could be approved at that point.

Yes. I believe it’s April 3rd for the hearing to approve the [1919] [ph] settlement.

Thank you.

Thank you.

Thank you. This does conclude the question-and-answer session of today’s program. I would like to hand the program back to Kenny Gunderman for any further remarks.

Thank you. I’d like to close by expressing my sincere gratitude to everyone that was involved in achieving this mutually beneficial outcome with Windstream, both for their tireless efforts and hard work, including our employees and those of Windstream. We appreciate your interest in Uniti Group and look forward to updating you further on future calls. Thank you.

Thank you, ladies and gentlemen for your participation in today's conference. This does conclude the program. You may now disconnect. Good day.