Uniti : Q3 2023 Uniti Group Earnings Conference Call Presentation

Third Quarter 2023 Financial Results

Conference Call Presentation

November 2, 2023

Together, Building the Future

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, including, without limitation, our 2023 financial outlook, expectations regarding high-margin recurring revenue, lease-up of our network and strong demand trends, our business strategies, growth prospects, industry trends, sales opportunities, and operating and financial performance.

Words such as "anticipate(s)," "expect(s)," "intend(s)," "estimate(s)," "foresee(s)," "plan(s)," "believe(s)," "may," "will," "would," "could," "should," "seek(s)" and similar expressions, or the negative of these terms, are intended to identify such forward-looking statements. These statements are based on management's current expectations and beliefs and are subject to a number of risks and uncertainties that could lead to actual results differing materially from those projected, forecasted or expected. Although we believe that the assumptions underlying the forward-looking statements are reasonable, we can give no assurance that our expectations will be attained. Factors which could materially alter our expectations include, but are not limited to, the future prospects of Windstream, our largest customer; the ability and willingness of our customers to renew their leases with us upon their expiration, and the ability to reposition our properties on the same or better terms in the event of nonrenewal or in the event we replace an existing tenant; the availability of and our ability to identify suitable acquisition opportunities and our ability to acquire and lease the respective properties on favorable terms; the risk that we fail to fully realize the potential benefits of acquisitions or have difficulty integrating acquired companies; our ability to generate sufficient cash flows to service our outstanding indebtedness and fund our capital funding commitments; our ability to access debt and equity capital markets; the impact on our business or the business of our customers as a result of credit rating downgrades and fluctuating interest rates; our ability to retain our key management personnel; changes in the U.S. tax law and other state, federal or local laws, whether or not specific to real estate investment trusts; covenants in our debt agreements that may limit our operational flexibility; the possibility that we may experience equipment failures, natural disasters, cyber-attacks or terrorist attacks for which our insurance may not provide adequate coverage; other risks inherent in the communications industry and in the ownership of communications distribution systems, including potential liability relating to environmental matters and illiquidity of real estate investments; and additional factors described in our reports filed with the SEC. Uniti expressly disclaims any obligation to release publicly any updates or revisions to any of the forward-looking statements set forth in this presentation to reflect any change in its expectations or any change in events, conditions or circumstances on which any statement is based.

This presentation may contain certain supplemental measures of performance that are not required by, or presented in accordance with, accounting principles generally accepted in the United States ("GAAP"). Such measures should not be considered as alternatives to GAAP. Further information with respect to and reconciliations of such measures to the nearest GAAP measure can be found herein.

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Strategic Fiber Revenue 2023 MRR Growth Outlook (1)

($ in millions)

$40 - $46

$343 - $349

~4% to 6% Year-Over-Year Growth

(2)

(3)

(2)

Continue to Execute on Our Lease-Up Strategy

(1)	Includes Uniti Fiber and Non-Windstream Uniti Leasing recurring revenue.
(2)	Represents annualized MRR as of the last day of the year.	3
(3)	Excludes one-time rerate churn associated with two large wireless lit backhaul renewals.

Cumulative Uniti Lease-Up

• Initial Aggregate Cash Yields on Major Wireless Anchor Builds of ~7%
• Cumulative Lease-Up Sold Expected to Generate Incremental Cash Yields of ~36%

▪ Results in Combined Anchor and Lease-Up Cash Yield of ~24%	Incremental Cash
	Yield ~100%

Incremental

Cash Yield

28%

Cumulative Cash Yield Has Increased More Than 3x from Anchor Cash Yield

(1)

(2)

(3)

(4)

(5)

Lease-up Provides Significant Upside on Fiber Acquired Through Sale Leasebacks and Other Asset Acquisitions

1. Calculated as expected annualized recurring cash flow on major wireless anchor builds at Uniti Fiber divided by the related net capital investment on the anchor builds of ~$205 million.
2. Calculated as expected annualized recurring cash flow from lease-up sold on major wireless anchor builds from the time the project started through September 30, 2023, divided by the related net capital investment on the lease-up of ~$344 million.
3. Represents expected initial cash yield on major wireless anchor builds plus expected incremental yield from lease-up sold to-date.

(4)	Calculated as expected annualized recurring cash flow from lease-up sold to-date through September 30, 2023 at Uniti Leasing divided by capital spent to acquire fiber assets from Lumen Technologies (formerly CenturyLink), net of upfront customer IRU payments received.	4
(5)	Represents expected cumulative cash yield on major wireless anchor builds plus lease-up at Uniti Fiber and reflects capital spent to acquire fiber assets from Lumen Technologies (formerly CenturyLink) and lease-up of those assets at Uniti Leasing.

Uniti's National Fiber Network

Top 10 Largest Fiber Providers in the U.S.	(6)
1	RBOC
2	RBOC
3	RBOC
4	National Cable Provider
5	RLEC / National CLEC
6	National Cable Provider
7	Independent Fiber Provider
8	Uniti
9	International Carrier
10	Independent Fiber & Tower Provider

Fiber Route	Fiber Strand	Route Miles	Small	Buildings	Total Metro
Miles(1)	Miles(1)	Constructed(2)	Cells(3)	Passed(4)	Markets(5)
~139,000	~8,400,000	~25,000	~2,600	~300,000	~300

Robust Demand For Our Portfolio of Mission Critical Communications Infrastructure

1. As of September 30, 2023.
2. Represents new fiber route miles constructed at Uniti Fiber since 1/1/2018, and new fiber route miles constructed associated with the Windstream GCI program.
3. Includes small cells in service or in backlog.
4. Represents on-net and near-net buildings passed on Uniti Fiber's network.

(5)	Represents the number of markets served by Uniti owned metro fiber or enterprise services.	5
(6)	Source: Kagan and company estimates.

Customer Mix

Non-

Wholesale(2)

11%

2022

Consolidated Revenue Mix

Wholesale

89%

Non-

Wholesale(2)

24%

Fiber

Customer Mix(1)

Traditional

Wholesale(3)

53%

Wireless

23%

Predominantly Wholesale Business with Healthy Mix of Customers

(1)	Based on ending MRR as of September 30, 2023. Excludes MRR from Windstream ILEC master lease and related GCI.
(2)	Includes Enterprise, E-Rate and Government customers at Uniti Fiber.	6
(3)	Includes wholesale customers at Uniti Fiber, Uniti Leasing Non-Windstream customers, including international and domestic carriers, hyperscalers, cable providers and government entities, and Windstream CLEC master lease.

Uniti Leasing National Wholesale Business Overview

▪ Strong Market and Growing Demand for High-Capacity	North America Dark Fiber Demand(2)
Long-Haul Routes	$ in billions

~$4

• Annual North America Wavelength Sales Currently at ~$2 Billion and Expected to Grow at an Annual Rate of ~7%(1)

• Owned National Fiber Network of 139,000 Route Miles and 8.4 Million Strand Miles

$1.5

$1.6

• Significant Amount of Capital and Time Needed to Replicate National Network

2020

2021

2022E 2023E 2024E 2025E 2026E 2027E 2028E 2029E 2030E

• Only Five Owned National Networks in the U.S. and
	Uniti Leasing Economics
Only One Other Independent Fiber Provider
▪	Adjusted EBITDA Margin(3): ~97%
▪ Attractive Anchor and Lease-Up Economics with	▪	Capital Intensity(3): ~33%
Meaningful Organic Growth Potential
• Dark and Lit Network Growth	▪	Average Contract Term Length(4): ~20 Years
• Expansion Opportunities for Uniti	▪	Monthly Churn %: ~0%

Focus on Wholesale Opportunities Provides Significant Margin Enhancement and AFFO Growth

1. Source: ReportLinker.
2. Source: Grand View Research. Represents expected dark fiber annual revenue within North America. Annual Growth rate based on expected constant annual growth rate from 2022 to 2030.

(3)	Based on the mid-point of 2023 Outlook range provided in the Company's Earnings Release dated November 2, 2023.	7
(4)	Represents average contract term length for lease-up sold as of September 30, 2023. Excludes contract term remaining under the Windstream Master Lease Agreements. Contracts are subject to termination under certain conditions and/or may not be renewed.

Consolidated New Sales Bookings

• Consolidated New Sales Bookings MRR of ~$0.71 Million in the Third Quarter of 2023
• Driven by Continued Lease-Up of Our National Owned Fiber Network

(MRR $ in millions)						$1.13
	$0.98		$1.01
	$0.93			$0.88		$0.4
				$0.84
			$0.3		$0.79			77%
	$0.3				74%	$0.75	$0.71
66%		67%			74%
	$0.4
						$0.62	64%
			$0.3	$0.4				62%
				$0.3
	72%
$0.53	61%		52%	64%					$0.3	$0.3
$0.3							$0.8	$0.4
		$0.7
	$0.7
	$0.5
			$0.5	$0.5	$0.5					$0.4	$0.4
$0.3							$0.3
1Q21	2Q21	3Q21	4Q21	1Q22	2Q22	3Q22	4Q22	1Q23	2Q23	3Q23
	Wholesale Bookings (1)	Non-Wholesale Bookings (2)			Lease-Up Bookings %(3)

Healthy Mix of Both Wholesale and Non-Wholesale Opportunities Driving Robust Growth

Note: Amounts may not foot due to rounding.

1. Wholesale Bookings include Uniti Leasing bookings, and wireless and wholesale bookings at Uniti Fiber.

(2)	Non-Wholesale Bookings include enterprise, E-Rate and government bookings at Uniti Fiber.	8
(3)	Represents percentage of total bookings that comes from lease-up sold on our major wireless anchor builds and lease-up sold at Uniti Leasing.

Metro Business Overview

• Enterprise New Sales Bookings & Install Activity Remain Strong
• • Enterprise Recurring Revenue Up 16% from Prior Year Third Quarter
  • Expect Strong Trends to Continue as We Capture Market Share and Deploy Fiber-Based Lit Services
• 30+ Markets Today with Enterprise Sales Presence
• • Average Market Share of Less than 5% Today
  • Available Fiber in ~300 Metro Markets
  • Expect to Enter Multiple Metro Markets Over the Next Several Years
• Attractive Economics with High Margin Opportunities
• • Typical Payback is About Half of the Contract Term
  • Typical Cash Yields of 50%+

(MRR $ in thousands)			$333$334	$328			$342
	$304	$296	$300	$283		$298
				$285
				$279	$279	$269	$278
$263			$267
						$260
$216	$227		$213
$199
$197

1Q21	2Q21	3Q21	4Q21	1Q22	2Q22	3Q22	4Q22	1Q23	2Q23	3Q23
	Enterprise New Sales Bookings	Enterprise Gross Installs

Enterprise Lease-Up Activity Key Contributor to High Margin Recuring Revenue

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Third Quarter 2023 Consolidated Results

($ in millions)

Revenue(1)		Adjusted EBITDA(2) (3)	AFFO (2)
$283	$291
$74	$76		$233
	$225

$29	$30

$113

$209

$215

$203

$209

$95

3Q22	3Q23	3Q22	3Q23	3Q22	3Q23
As Reported	As Reported	As Reported	As Reported	As Reported	As Reported
Uniti Leasing	Uniti Fiber	Uniti Leasing	Uniti Fiber		Uniti Consolidated

Solid Recurring Growth Reflects Continued Emphasis on Higher Margin Revenue

1. 3Q22 and 3Q23 Uniti Leasing revenue each include $6 million of straight-line rent recognition under the Windstream Master Leases and GCI Investments subsequent to our settlement agreement with Windstream.
2. See Appendix for a reconciliation of non-GAAP metrics to the most closely comparable GAAP metric.

(3) Segment amounts do not foot to total as consolidated Adjusted EBITDA is net of corporate expenses of $7 million in 3Q22 and $5 million in 3Q23.

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