Good morning and welcome to today's conference call to discuss the Uniti’s Second Quarter 2024 Earnings Results. My name is Latif 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.

Good morning everyone and thank you for joining today's conference call to discuss Uniti's Second 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 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 combined, that will be the combined parent company following the merger, recently filed a preliminary form S-4 registration statement with the SDC 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 obtain a copy of the merger 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 the risk factors section of the recently filed preliminary 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. Starting on slide four, Uniti delivered another solid quarter of performance led by the continued strong demand for our mission-critical fiber infrastructure. As a result, we're reiterating our consolidated full-year 2024 revenue and adjusted EBITDA outlook. Our core recurring strategic fiber business grew 3% in the second quarter, fueled by exceptional growth in enterprise, wholesale, and dark fiber revenue of 12%, 15%, and 18%, respectively. When paired with our industry-leading 0.3% churn, we remain on track to deliver 4% to 6% MRR growth for the full year. We continue to execute well in our unique strategy of being a pure-play fiber provider in Tier 2 and 3 metro markets and on inner-city routes. We believe that if you build fiber first in less competitive markets, you secure a right to win for many years into the future. Turning to slide five, we had a strong quarter of new bookings. As we have discussed previously, the demand from hyperscalers driven by generative AI is real and represented approximately 40% of this quarter's bookings. We're increasingly confident that this demand will be sustained as a meaningful percentage of our entire wholesale sales funnel is from hyperscalers. With wireless bookings for the quarter, while wireless bookings for the quarter were muted, we continue to expect a pickup in wireless in the second half of this year. We're not only seeing a meaningful pickup in wireless RFPs, but we're also starting to have conversations about 25-gig upgrades at tower sites. Growth in mobile broadband, fixed wireless, and fiber-to-the-home connectivity are all driving substantial data traffic growth, and we do not see any of those trends dissipating. Finally, fiber-to-the-home carriers are driving an increasing amount of demand procuring middle-mile and inner-city backhaul to connect our…

Thank you, Kenny. I'd like to begin by reviewing our second quarter performance, followed by an overview of our current 2024 outlook. We had another solid quarter highlighted by near-record consolidated bookings of $1.1 million, 3% core recurring strategic fiber revenue growth, and declining consolidated net success-based capital intensity, which stood at 31% for the quarter. As I'll cover in more detail in just a bit, our 2024 outlook for consolidated revenue and adjusted EBITDA remains unchanged, as we expect to end the year within the previous guidance ranges provided. We have also provided Windstream's second quarter financial information in an 8-K filed with the SEC earlier this morning. Please turn to slide seven, and I'll start with comments on our second quarter. We reported consolidated revenues of $295 million, consolidated adjusted EBITDA of $237 million, AFFO attributed to common shareholders of $92 million, and AFFO per diluted common share of $0.34. At Uniti Leasing, we reported segment revenues of $218 million, and adjusted EBITDA of $211 million, representing an adjusted EBITDA margin of 97% for the quarter. During the second quarter, Uniti Leasing deployed approximately $70 million towards growth capital investment initiatives, with the majority of the investments relating to the Windstream GCI program. With the GCI amount funded subsequent to the second quarter in July, Windstream has now reached its GCI funding limit for 2024, and there will be no further GCI payments for the remainder of the year. At Uniti Fiber, we reported revenues of $77 million, and adjusted EBITDA of $31 million during the second quarter, achieving margins of approximately 40%. Both revenue and adjusted EBITDA during the quarter were higher than expected due to one-time non-recurring revenue items. Uniti Fiber net success-based CapEx was $21 million in the second quarter. We also incurred about $2…

Thanks, Paul. As a reminder, we announced last quarter that we've reached a definitive agreement to merge Uniti and Windstream, creating a national fiber powerhouse. We continue to expect the transaction to close in the second half of 2025, and we're making great progress on our timeline. In fact, we've already received six of 18 required PUC approvals, including from Washington, D.C. Given the transformative nature of this transaction, I wanted to reiterate a few key highlights. Slide 12 showcases the reach of new Uniti’s and insurgent fiber network, extending our successful strategy of targeting Tier 2 and 3 markets for wholesale and enterprise, now into residential fiber to the home. Our [Indiscernible] 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 five million connected on-ramps in largely unique locations, each driving increasing amounts of bandwidth onto our own wholesale network. Please turn to slide 13. Kinetic is a unique fiber to the home platform for a number of reasons. First, fiber to the home is indisputably a superior product from a latency and reliability perspective, and will be for our lifetimes and beyond. Second, incumbent providers have a big advantage when providing fiber to the home, given the embedded network benefiting from years of investment. And ironically, incumbents are now share takers with fiber to the home after many years of playing defense against cable and wireless. Thirdly, over 50% of Kinetic's footprint is located in the southeast. We believe the southeast is a terrific place to invest from a competitive and demographic point…

Thank you. [Operator Instructions] Our first question comes from the line of Greg Williams of TD Cowen.

Great, thanks for taking my questions and congrats on some solid bookings here. And that's what my question is really about is, what sort of the cadence of the deals going forward? Are we going to see plus $1 million in bookings, in many quarters going forward? And I think you mentioned 40% of that is from GNIIs [ph]. Is that percentage mix going to maybe hold as well? How many Huntville-type deals are in the funnel and for how long? Any color there would be great, thanks.

Hey, Greg, good morning. I don't think you should expect million-dollar-plus quarters sequentially. I think there'll be a little lumpy. Wholesale deals are lumpy, as we've always said, including the hyperscaler deals. But I think in general, you're going to continue to see solid bookings. And over the mid-to-longer term, that's going to persist. We're increasingly confident in a more regular cadence of hyperscaler deals. And we're confident in saying that just based upon the building funnel that we have. And obviously, a funnel is a leading indicator of bookings. And we've got an increasing number of opportunities in there that have been through costing and pricing, have been vetted through sales engineering, embedded through grant of authority, approval levels at our, at Uniti, and presumably at our customers. And so we feel good about those opportunities. But equally importantly, when you hear what the hyperscalers say publicly about the opportunity around AI, they're extremely bullish on it. Comments ranging from, there's greater risk to under-investing than there is to over-investing. And raising CapEx guidance and materially higher CapEx related to AI next year, for example. So I just think that, we just think that the opportunity is meaningful. It will persist for some time. And we expect to achieve our, at least our fair share of it, especially given we continue to hear a trend of the hyperscalers looking to grow into markets that have less stressed power grids and less stressed distribution grids. We're interacting more and more with our utility partners in some of these markets to talk about ways to collaborate because they also are, view the hyperscaler opportunities as a big one for them. So I think view it as a terrific opportunity and we're going to get our fair share of it. We're also going to continue pushing on all the other wholesale threads that are driving broadband growth, including wireless, including fiber to the home, including traditional wholesale. As we've said many times, we're diversified as a wholesale provider against which use case eventually is the most successful. And frankly, one of the most encouraging comments I've heard from the hyperscalers publicly recently is that even if they don't use the infrastructure capacity that they're procuring for AI, they're going to use it for something else. And that's music to my ears because it just says there's going to be broadband growth. They're going to need this infrastructure for all manner of things, including and especially AI. So very bullish on it, hard to predict the cadence, but the funnel is building and we're excited about the opportunity.

Got it, thanks, Kenny.

Thank you. Our next question comes from the line of David Barden of Bank of America.

Hi, thank you. This is Shipra [ph] calling in for David today. Thank you for all the details on the call we went through the S-4, of course, it was pretty dense. So just wondering from your point of view, what in the filing on the merger are the most important pieces of information that we don't already have that we should take away from the filing? And if you could just go over the moving parts to achieving that positive free cash flow goal in 2026, particularly the CapEx outlook and how fiber expansion plans might impact the current outlook. Thank you.

Good morning, Shipra, I'll take the first one and then Paul, you can take the second. I think a lot of information in there for sure, pro forma financials, which obviously folks have been asking for. So I think that that should be a focus area and there shouldn't be any surprises. And we look forward to engaging with the market in answering whatever questions arise from that, but we still feel very bullish and confident in the forward trajectory of the business. And Paul will comment on that as it relates to the bridge to free cash flow positive. I think a section that really should get a lot of focus and attention is the background reading of the merger. And those are always sections that provide juicy details. But in this case, we think there's a lot of very interesting facts and circumstances in there, including number one, that Uniti and really Windstream began thinking about our relationship in a much more strategic manner, going back to the bankruptcy and even before. And I think when you think about the settlement and the bankruptcy and how we decided to invest materially in overbuilding the copper with fiber, that was meaningful when you look at bifurcating the MLAs in the way we did to provide for strategic optionality and also just opening up the CLEG network to Uniti's use. All were very intentional and strategic in nature, which many of those things led to a substantial amount of strategic and M&A related dialogue post the bankruptcy. And I think that's the second point that there has been and continues to be a lot of financial and strategic interest in our collective assets and at valuation metrics that we think are validating of what we believe the intrinsic value to be. And while you can take a point of view on whether those multiples are, where those multiples should be at any point in time, I think one thing that's indisputable is they validate intrinsic value, which is substantially higher than where we currently trade and where we've traded recently. So we're just very excited about the intrinsic value of the business. And I think many of the data points in that background reading validate that. And the final point I would make is, just on the background is, as you can see, we never sit on our hands when it comes to having strategic dialogue. We're regularly constantly engaging with the market and even when transactions aren't being announced publicly, which up until recently, there hadn't been any from our perspective. We would always say that we were very active regardless. And I think that's important to note because it's hard to flip a switch off and on, on M&A. You need to stay engaged with the market. And that's always been a core tenet of ours. And I think something that will persist going forward. So Paul, you want to take that one?

Hey, Shipra, this is Paul. I'll take your second question. Yes, so as you mentioned, and as Kenny mentioned earlier, this is a fully funded business plan to get us through the combined company plan and cashflow inflection to cashflow positive in 2026. And really, the pieces of that are really just executing on both companies' plans as they have in place today. Continuing to, at Kinetic, continuing to drive fiber deeper into that business, replacing copper, and hitting those marks and hitting the penetration goals for the fiber product, fiber to the home product at Kinetic is going to be key. Doing that at a cost that's as projected, and that's been going really well, as Kenny mentioned, the cost per passing at Kinetic is coming in at $650 per home, which we think is an industry-leading number. And so continuing to execute on that capital plan, bringing fiber to those homes, and then achieving the penetration rates that Kinetic is showing good progress toward achieving. And then at fiber infrastructure, it's really continuing to execute on just what we've been talking about, lowering capital intensity, delivering more and more lease up higher return type deals. But investment levels in that fiber infrastructure business are relatively consistent with what they are today. And then also for that Windstream business, continuing to drive efficiencies, drive TDM costs out of that business, which is a big part of their plan over the next couple of years, and they're making great progress with regard to doing that. We saw some nice efficiency gains in their costs this quarter, and the results that were just published today in our 8-K saw some good efficiency gains in that business, so continuing to drive that through. So it's really just executing on that plan that's in front of both of our companies that we're executing on today, going through the completion of that fiber to the home build plan at Kinetic and kind of 2026, 2027 zone gets us to that free cash flow profile that we were talking about. One other thing I will mention is synergy. There's some synergy built into that as well, so we're going to have to do our job in achieving those synergies, which we are confident at. We think the $100 million kind of run rate of synergies that we've got baked into the plan are conservative and highly achievable.

Yes, I agree with all that. I think one thing to add, Shipra, and tying it back to the question about the hyperscalers. I do think that when we look at capital intensity going forward, we don't anticipate pulling back on investing in our fiber infrastructure business, as Paul mentioned, so just to be clear on that. But I do think that there's an increasingly amount of our bigger deals, whether it be anchor deals or lease-up deals, that have higher NRCs as a part of them, which will drive down capital intensity, as I mentioned in our prepared remarks. And I also think, independent of NRCs, there's a likelihood that we'll see higher IRU fees going forward as well. And so those things are both, I'd say, additions to our original plan when we think about bridging to that free cash flow period in 2026. So that's a trend that's developing, and we're excited about it.

Thank you.

[Operator Instructions] Our next question comes from the line of Frank Louthan of Raymond James.

Hey, guys. Good morning. This is Rob [ph] on for Frank. You might have spoken to this earlier. I didn't catch it. Are you expecting to do any builds for bead within Uniti Fiber, not within Windstream, in 2025, or is that more likely to be a 2026 event at this point?

Good morning, Rob. So we're currently not having conversations related to bead at Uniti. The bead-related conversations are entirely at Kinetic, which, as an aside, gives us the ability to communicate directly with Windstream about that, as opposed to being competing bidders. I do think on a combined basis, once the transaction is closed and on a go-forward basis, there will be opportunities to build in or around or off of our Uniti Fiber network. There are some really attractive metro fiber markets that we have, as you know, and taking the build and execution expertise of Kinetic and expanding that into that footprint, I think, is an opportunity that we really haven't started to fully evaluate yet, but we do believe it's an opportunity that's on the dashboard. But that will be post-closing. And when you look at the bead opportunity, we entirely agree with the way Paul and Drew Smith over at Windstream communicate about bead. It's a terrific opportunity for Kinetic. It's really targeting the Tier 2 and Tier 3 markets where Kinetic operates and thrives today. And so we think it's a real opportunity, and it's a big part of us expanding the number of homes targeted with fiber up to a million. So we're really leaning into that on a combined basis, and we're excited about the opportunity that we think it's going to bring.

Great. Thank you, guys.

Thank you. I would now like to turn the conference back to Kenny Gunderman for closing remarks. Sir?

Great. 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.