Core Insights - Uniti Group Inc. will present at the TD Cowen 52nd Annual Global Technology, Media and Telecom Conference on May 29, 2024, at 9:40 AM EDT [1] - The presentation will be accessible via a live webcast on Uniti's Investor Relations website, with a replay available for a limited time [2] Company Overview - Uniti is an internally managed real estate investment trust focused on acquiring and constructing mission-critical communications infrastructure [3] - As of March 31, 2024, Uniti owns approximately 141,000 fiber route miles and 8.5 million fiber strand miles across the United States [3]

LITTLE ROCK, Ark., May 22, 2024 (GLOBE NEWSWIRE) -- Uniti Group Inc. ("Uniti") (Nasdaq: UNIT) announced today that its President and Chief Executive Officer, Kenny Gunderman, and Senior Vice President, Chief Financial Officer and Treasurer, Paul Bullington, are scheduled to present at the TD Cowen 52nd Annual Global Technology, Media and Telecom Conference. The presentation is scheduled for 9:40 AM EDT on May 29, 2024 in New York, NY. You may access a live webcast of the event on Uniti's Investor Relations ...

PART I. FINANCIAL INFORMATION [Item 1. Financial Statements (Unaudited)](index=6&type=section&id=Item%201.%20Financial%20Statements%20(Unaudited)) Presents the unaudited condensed consolidated financial statements and accompanying notes for the period **Condensed Consolidated Balance Sheets (March 31, 2024 vs. December 31, 2023)** | Metric | March 31, 2024 (Thousands) | December 31, 2023 (Thousands) | | :-------------------------------- | :--------------------------- | :---------------------------- | | Total Assets | $4,984,569 | $5,025,129 | | Total Liabilities | $7,462,052 | $7,509,250 | | Total Shareholders' Deficit | $(2,477,483) | $(2,484,121) | **Condensed Consolidated Statements of Income (Loss) (Three Months Ended March 31, 2024 vs. 2023)** | Metric | 2024 (Thousands) | 2023 (Thousands) | Change (YoY) | | :----------------------------------- | :--------------- | :--------------- | :----------- | | Total Revenues | $286,418 | $289,822 | $(3,404) | | Net Income (Loss) | $41,348 | $(19,211) | $60,559 | | Net Income (Loss) Attributable to Common Shareholders | $40,888 | $(19,454) | $60,342 | | Basic EPS | $0.17 | $(0.08) | $0.25 | | Diluted EPS | $0.16 | $(0.08) | $0.24 | **Condensed Consolidated Statements of Cash Flows (Three Months Ended March 31, 2024 vs. 2023)** | Metric | 2024 (Thousands) | 2023 (Thousands) | | :----------------------------------- | :--------------- | :--------------- | | Net Cash Provided by Operating Activities | $6,190 | $14,562 | | Net Cash Used in Investing Activities | $(87,587) | $(114,374) | | Net Cash Provided by Financing Activities | $69,875 | $126,355 | | Cash, Restricted Cash and Cash Equivalents at End of Period | $50,742 | $70,346 | [Notes to Condensed Consolidated Financial Statements](index=14&type=section&id=Notes%20to%20Condensed%20Consolidated%20Financial%20Statements) Provides detailed disclosures and explanations for the condensed consolidated financial statements [1. Organization and Description of Business](index=14&type=section&id=1.Organization%20and%20Description%20of%20Business) The company operates as a REIT focused on communications infrastructure through an up-REIT structure - Uniti Group Inc is an independent, internally managed real estate investment trust (REIT) focused on acquiring, constructing, and leasing mission-critical communications infrastructure, primarily fiber optic, copper, and coaxial broadband networks and data centers[29](index=29&type=chunk) - The company operates through an "up-REIT" structure, holding substantially all assets via Uniti Group LP, where Uniti Group Inc is the sole general partner, owning approximately **99.96% of partnership interests** as of March 31, 2024[30](index=30&type=chunk) [2. Basis of Presentation and Summary of Significant Accounting Policies](index=14&type=section&id=2.Basis%20of%20Presentation%20and%20Summary%20of%20Significant%20Accounting%20Policies) Outlines the U.S. GAAP basis for the interim statements and highlights key accounting policies - The financial statements are prepared in accordance with U.S. GAAP for interim financial information and SEC rules, and should be read in conjunction with the Annual Report on Form 10-K[33](index=33&type=chunk) - Restricted cash and cash equivalents represent funds that are restricted for an obligation under the ABS Loan Facility to maintain three months of interest and other expenses[34](index=34&type=chunk) - Revenue from Windstream Leases accounted for **68.8% and 66.0% of total revenue** for the three months ended March 31, 2024 and 2023, respectively, highlighting a significant concentration of credit risk[36](index=36&type=chunk) [3. Revenues](index=16&type=section&id=3.Revenues) Details the disaggregation of total revenue and discusses contract liabilities and future performance obligations **Total Revenue Disaggregation (Three Months Ended March 31, 2024 vs. 2023)** | Revenue Stream | 2024 (Thousands) | 2023 (Thousands) | | :----------------------------------- | :--------------- | :--------------- | | Revenue from contracts with customers | $58,263 | $57,902 | | Revenue accounted for under leasing guidance | $228,155 | $231,920 | | **Total Revenue** | **$286,418** | **$289,822** | - Contract liabilities (deferred revenue) decreased from $11.1 million at December 31, 2023, to **$9.5 million** at March 31, 2024, with $1.3 million recognized as revenue during the quarter[43](index=43&type=chunk)[45](index=45&type=chunk) - Future revenues from remaining performance obligations under ASC 606 totaled **$627.1 million** as of March 31, 2024, with an average remaining contract term of 3.3 years for invoiced contracts and 5.0 years for backlog[46](index=46&type=chunk) [4. Leases](index=17&type=section&id=4.Leases) Discloses lease income from operating leases and details the underlying assets **Lease Income - Operating Leases (Three Months Ended March 31)** | Year | Amount (Thousands) | | :--- | :----------------- | | 2024 | $228,155 | | 2023 | $231,920 | - Total future minimum lease payments to be received under non-cancellable operating leases as of March 31, 2024, are **$5.44 billion**, with $4.6 billion relating to the Windstream Leases[48](index=48&type=chunk) **Underlying Assets Under Operating Leases, Net (March 31, 2024 vs. December 31, 2023)** | Asset Type | March 31, 2024 (Thousands) | December 31, 2023 (Thousands) | | :-------------------------------- | :--------------------------- | :---------------------------- | | Fiber | $3,950,464 | $3,862,635 | | Copper | $3,978,023 | $3,974,410 | | Total Underlying Assets, Net | $2,991,249 | $2,938,605 | [5. Fair Value of Financial Instruments](index=19&type=section&id=5.Fair%20Value%20of%20Financial%20Instruments) Reports the fair value of the company's outstanding debt and other financial instruments - The total principal balance of outstanding notes and other debt was **$5.76 billion** at March 31, 2024, with a fair value of **$5.36 billion**, based on Level 2 inputs[57](index=57&type=chunk) - The Settlement Payable to Windstream was **$141.0 million** as of March 31, 2024, recorded at fair value using Level 2 inputs based on discounted future cash flows[58](index=58&type=chunk) [6. Property, Plant and Equipment](index=21&type=section&id=6.Property%20Plant%20and%20Equipment) Details the composition of property, plant, and equipment and related depreciation expense **Net Property, Plant and Equipment (March 31, 2024 vs. December 31, 2023)** | Asset Type | March 31, 2024 (Thousands) | December 31, 2023 (Thousands) | | :-------------------------------- | :--------------------------- | :---------------------------- | | Fiber | $4,941,964 | $4,835,623 | | Copper | $3,978,023 | $3,974,410 | | Total Net Property, Plant and Equipment | $4,042,485 | $3,982,069 | - Depreciation expense for the three months ended March 31, 2024, was **$70.1 million**, an increase from $69.3 million in the prior year[60](index=60&type=chunk) - The company completed the CableSouth Transaction on January 31, 2024, selling fiber assets and buying out a triple-net lease for $40.0 million cash, recording a **$19 million gain on sale of real estate**[62](index=62&type=chunk) [7. Derivative Instruments and Hedging Activities](index=21&type=section&id=7.Derivative%20Instruments%20and%20Hedging%20Activities) Describes the company's use of interest rate caps as cash flow hedges - On March 1, 2024, the Company entered into an interest rate cap agreement (ABS Loan Interest Rate Cap) with a notional value of **$275.0 million**, capping the 1-month SOFR at 4.50%, designated as a cash flow hedge[65](index=65&type=chunk) - The fair value of interest rate caps as a derivative asset was **$1.845 million** at March 31, 2024, compared to zero at December 31, 2023[66](index=66&type=chunk) - The company estimates that an additional **$0.4 million** will be reclassified from accumulated other comprehensive income as a decrease to interest expense over the next twelve months[66](index=66&type=chunk) [8. Goodwill and Intangible Assets and Liabilities](index=23&type=section&id=8.Goodwill%20and%20Intangible%20Assets%20and%20Liabilities) Reports the carrying amounts of goodwill and net intangible assets - Goodwill remained stable at **$157.38 million** for the Uniti Fiber segment as of March 31, 2024, with accumulated impairment charges of $515.498 million[73](index=73&type=chunk) **Intangible Assets, Net (March 31, 2024 vs. December 31, 2023)** | Asset Type | March 31, 2024 (Thousands) | December 31, 2023 (Thousands) | | :-------------------------------- | :--------------------------- | :---------------------------- | | Customer lists | $258,866 | $264,562 | | Contracts | $29,552 | $31,193 | | Underlying Rights | $9,271 | $9,360 | | **Total Intangible Assets, Net** | **$297,689** | **$305,115** | - Amortization expense for intangible assets was **$7.4 million** for both the three months ended March 31, 2024 and 2023[76](index=76&type=chunk) [9. Notes and Other Debt](index=24&type=section&id=9.Notes%20and%20Other%20Debt) Provides a detailed breakdown of the company's outstanding debt obligations **Notes and Other Debt (March 31, 2024 vs. December 31, 2023)** | Metric | March 31, 2024 (Thousands) | December 31, 2023 (Thousands) | | :-------------------------------- | :--------------------------- | :---------------------------- | | Principal Amount | $5,757,442 | $5,617,442 | | Net of Discount/Costs | $5,660,696 | $5,523,579 | - On February 23, 2024, the company entered into an ABS Loan Agreement for a secured, multi-draw term loan facility of up to **$350 million**, with an initial drawing of $275 million on March 1, 2024[86](index=86&type=chunk) - The ABS Loan Facility bears interest at a floating rate (SOFR + 3.75% or Base Rate + 2.75%), with spreads increasing after 12 and 15 months, and SOFR interest expense capped at **4.50%** via an interest rate cap[87](index=87&type=chunk) [10. Earnings Per Share](index=27&type=section&id=10.Earnings%20Per%20Share) Presents the calculation of basic and diluted earnings per share - **Basic EPS for Q1 2024 was $0.17**, up from $(0.08) in Q1 2023; **Diluted EPS for Q1 2024 was $0.16**, up from $(0.08) in Q1 2023[19](index=19&type=chunk)[96](index=96&type=chunk) - The computation of EPS uses the two-class method for time-based restricted stock awards and the "if-converted" method for Exchangeable Notes and Convertible 2027 Notes[92](index=92&type=chunk)[94](index=94&type=chunk) [11. Segment Information](index=29&type=section&id=11.Segment%20Information) Details financial performance for the Uniti Leasing and Uniti Fiber operating segments - Uniti manages operations in two reportable segments: Uniti Leasing (REIT operations, leasing communications assets) and Uniti Fiber (infrastructure solutions, cell site backhaul, dark fiber)[98](index=98&type=chunk)[99](index=99&type=chunk) **Adjusted EBITDA by Segment (Three Months Ended March 31, 2024 vs. 2023)** | Segment | 2024 (Thousands) | 2023 (Thousands) | | :---------------- | :--------------- | :--------------- | | Uniti Leasing | $210,677 | $204,966 | | Uniti Fiber | $23,838 | $33,674 | | Corporate | $(5,887) | $(7,439) | | **Total Adjusted EBITDA** | **$228,628** | **$231,201** | [12. Commitments and Contingencies](index=31&type=section&id=12.Commitments%20and%20Contingencies) Outlines significant financial commitments, primarily related to Windstream - Uniti is obligated to make **$490.1 million** in cash payments to Windstream in 20 consecutive quarterly installments, with $337.9 million paid as of March 31, 2024[105](index=105&type=chunk) - Uniti is committed to reimburse Windstream up to **$1.75 billion** for Growth Capital Improvements through 2029, with annual limits ($225M in 2024, $175M in 2025-2026, $125M in 2027-2029)[106](index=106&type=chunk) - As of March 31, 2024, Uniti reimbursed **$131.3 million** for Growth Capital Improvements during the quarter, bringing the total reimbursed to $952.4 million[106](index=106&type=chunk) [13. Accumulated Other Comprehensive Loss](index=32&type=section&id=13.Accumulated%20Other%20Comprehensive%20Loss) Reports changes in accumulated other comprehensive loss attributable to shareholders - Accumulated other comprehensive loss attributable to shareholders was **$(167) thousand** at March 31, 2024, compared to $0 at March 31, 2023, primarily due to changes in the fair value of derivative assets[109](index=109&type=chunk) [14. Subsequent Events](index=32&type=section&id=14.Subsequent%20Events) Discloses significant events after the reporting period, including the proposed merger with Windstream - On May 3, 2024, Uniti entered into a Merger Agreement with Windstream Holdings II, LLC, to combine the companies, forming "New Uniti," with Uniti and Windstream stockholders expected to hold approximately **62% and 38%** respectively[110](index=110&type=chunk)[112](index=112&type=chunk) - The merger involves a **$425 million cash payment** to Windstream equityholders, new non-voting preferred stock with an 11% dividend rate, and warrants for New Uniti Common Stock[113](index=113&type=chunk) - The merger is expected to close in 2025, subject to stockholder and regulatory approvals, and Uniti will suspend dividend payments and **cease to be a REIT post-merger**[114](index=114&type=chunk)[116](index=116&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=33&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Analyzes financial performance, liquidity, and capital resources, including key business developments and non-GAAP measures [1. Overview](index=33&type=section&id=1.Overview) Summarizes the company's business, operating segments, and recent significant developments - Uniti Group Inc is an independent, internally managed REIT focused on acquiring and constructing mission-critical communications infrastructure, operating through Uniti Leasing (REIT operations) and Uniti Fiber (infrastructure solutions)[118](index=118&type=chunk)[123](index=123&type=chunk)[124](index=124&type=chunk) - The company's proposed merger with Windstream aims to create an integrated telecommunications company, with Uniti and Windstream stockholders holding approximately **62% and 38%** of New Uniti, respectively[127](index=127&type=chunk)[129](index=129&type=chunk) - Uniti completed the CableSouth Transaction on January 31, 2024, selling fiber assets and buying out a triple-net lease for $40.0 million cash, resulting in a **$19 million gain on sale of real estate**[140](index=140&type=chunk) [2. Results of Operations](index=37&type=section&id=2.Results%20of%20Operations) Provides a detailed comparison of operating results for the current and prior year periods **Total Revenues (Three Months Ended March 31, 2024 vs. 2023)** | Segment | 2024 (Thousands) | 2023 (Thousands) | % of Total 2024 | % of Total 2023 | | :---------------- | :--------------- | :--------------- | :-------------- | :-------------- | | Uniti Leasing | $217,621 | $210,808 | 76.0% | 72.7% | | Uniti Fiber | $68,797 | $79,014 | 24.0% | 27.3% | | **Total Revenues** | **$286,418** | **$289,822** | **100.0%** | **100.0%** | - **Net income increased significantly to $41.3 million** in Q1 2024 from a net loss of $19.2 million in Q1 2023, primarily due to a decrease in interest expense and a gain on sale of real estate[143](index=143&type=chunk) - Uniti Fiber revenues decreased by **$10.2 million**, mainly due to a $10.1 million decrease in dark fiber and small cells revenue and a $2.7 million decrease in E-rate and government revenues, partially offset by a $4.3 million increase in Enterprise and wholesale revenues[158](index=158&type=chunk) - Interest expense, net, decreased by **$25.7 million YoY**, primarily attributable to a $32.3 million loss on extinguishment of debt recognized in Q1 2023 that did not recur in Q1 2024[160](index=160&type=chunk) [3. Non-GAAP Financial Measures](index=41&type=section&id=3.Non-GAAP%20Financial%20Measures) Defines and reconciles non-GAAP financial measures such as EBITDA, FFO, and AFFO to their GAAP equivalents - The company uses non-GAAP measures like EBITDA, Adjusted EBITDA, FFO, and AFFO to supplement GAAP net income, believing they provide additional insights into operating performance for a REIT[174](index=174&type=chunk)[175](index=175&type=chunk)[178](index=178&type=chunk) **Adjusted EBITDA (Three Months Ended March 31, 2024 vs. 2023)** | Metric | 2024 (Thousands) | 2023 (Thousands) | | :---------------- | :--------------- | :--------------- | | EBITDA | $236,681 | $204,015 | | **Adjusted EBITDA** | **$228,628** | **$231,201** | **AFFO Attributable to Common Shareholders (Three Months Ended March 31, 2024 vs. 2023)** | Metric | 2024 (Thousands) | 2023 (Thousands) | | :----------------------------------- | :--------------- | :--------------- | | FFO attributable to common shareholders | $77,462 | $35,472 | | **AFFO attributable to common shareholders** | **$87,626** | **$107,393** | [4. Liquidity and Capital Resources](index=46&type=section&id=4.Liquidity%20and%20Capital%20Resources) Discusses the company's sources of liquidity, cash flows, and capital expenditure plans - Principal liquidity needs include funding operating expenses, meeting debt service obligations, funding investment activities, and making dividend distributions, alongside a **$1.75 billion commitment** for Growth Capital Improvements through 2029[182](index=182&type=chunk) - As of March 31, 2024, liquidity sources included **$50.7 million cash**, $427.0 million borrowing availability under the Revolving Credit Facility, and up to $75.0 million under the ABS Loan Facility[184](index=184&type=chunk) - Net cash provided by operating activities decreased to **$6.2 million** in Q1 2024 from $14.6 million in Q1 2023, primarily due to an increase in cash interest expense associated with secured notes[185](index=185&type=chunk) - Capital expenditures totaled **$167.9 million** in Q1 2024, including $131.3 million for Growth Capital Improvements, which are classified as success-based[200](index=200&type=chunk) - The company plans to fund the **$425 million Merger Cash Consideration** with up to $300 million of secured debt and cash on hand[196](index=196&type=chunk) [Item 3. Quantitative and Qualitative Disclosures About Market Risk](index=51&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) States that there have been no material changes in market risk disclosures from the Annual Report - There have been no material changes from the information reported under Item 7A of the Annual Report[209](index=209&type=chunk) [Item 4. Controls and Procedures](index=51&type=section&id=Item%204.%20Controls%20and%20Procedures) Reports that disclosure controls were ineffective due to a material weakness in internal control over financial reporting - Disclosure controls and procedures were **not effective** as of March 31, 2024, due to a material weakness in internal control over financial reporting[211](index=211&type=chunk)[212](index=212&type=chunk) - The material weakness relates to ineffective controls over the annual goodwill impairment assessment, specifically a lack of sufficient personnel with appropriate technical expertise for determining the income tax impact[212](index=212&type=chunk) - Management is continuing to implement a remediation plan, expecting completion later in fiscal year 2024, and believes the Condensed Consolidated Financial Statements are prepared in accordance with US GAAP[213](index=213&type=chunk)[215](index=215&type=chunk) PART II. OTHER INFORMATION [Item 1. Legal Proceedings](index=54&type=section&id=Item%201.%20Legal%20Proceedings) Refers to the financial statement notes for a description of legal proceedings - Legal proceedings are described in Note 12 - Commitments and Contingencies, and **none are believed to be material**[104](index=104&type=chunk)[218](index=218&type=chunk) [Item 1A. Risk Factors](index=54&type=section&id=Item%201A.%20Risk%20Factors) Details risks related to the proposed merger, business operations, REIT status, and common stock [Risks Related to our Proposed Merger with Windstream](index=54&type=section&id=Risks%20Related%20to%20our%20Proposed%20Merger%20with%20Windstream) Outlines risks associated with the successful completion and integration of the Windstream merger - A **failure to complete the merger** could cause irreparable reputational harm and negatively impact business, operations, earnings, financial results, and the trading and pricing of common stock[219](index=219&type=chunk) - Realizing expected benefits depends on **successful and efficient integration**, which is complex and time-consuming[221](index=221&type=chunk) - The merger agreement limits Uniti's ability to pursue alternatives and could discourage competing offers, with a potential termination fee of **$55 million** payable to Windstream under certain circumstances[228](index=228&type=chunk) - Uniti shareholders may recognize **taxable gain or loss** upon exchanging Uniti shares for New Uniti shares, even without receiving cash, depending on the final merger structure[231](index=231&type=chunk)[232](index=232&type=chunk) - Post-merger, the Windstream Leases will become intercompany agreements, and New Uniti's performance will still depend on Windstream's ability to meet its lease obligations[234](index=234&type=chunk) [Risks Related to our Business](index=58&type=section&id=Risks%20Related%20to%20our%20Business) Describes operational risks including customer concentration, lease renewals, indebtedness, and internal controls - Uniti is **highly dependent on Windstream** for lease payments, which constitute a substantial portion of its revenues; a default by Windstream could materially adversely affect Uniti's business[236](index=236&type=chunk)[237](index=237&type=chunk) - The initial term of the Windstream Leases expires on April 30, 2030; there's **no assurance of renewal** on commercially attractive terms[240](index=240&type=chunk)[241](index=241&type=chunk) - Uniti's outstanding long-term indebtedness was approximately **$5.8 billion** as of March 31, 2024, with an additional $300 million expected for the Windstream merger, which could limit operational flexibility[242](index=242&type=chunk) - A **material weakness in internal control** over financial reporting related to goodwill impairment assessment could lead to material misstatements if not remediated[248](index=248&type=chunk) [Risks Related to the Status of Uniti as a REIT](index=59&type=section&id=Risks%20Related%20to%20the%20Status%20of%20Uniti%20as%20a%20REIT) Highlights risks associated with maintaining REIT qualification and its distribution requirements - If Uniti **fails to qualify as a REIT**, it would be subject to U.S. federal income tax as a regular corporation, reducing cash available for distributions and debt service[259](index=259&type=chunk)[262](index=262&type=chunk) - REIT distribution requirements (at least **90% of taxable income** annually) may force Uniti to borrow, sell assets, or reduce investments to make distributions[266](index=266&type=chunk)[267](index=267&type=chunk) - A deterioration in Windstream's financial condition could adversely affect Uniti's ability to meet REIT asset and income tests, potentially leading to **loss of REIT qualification**[269](index=269&type=chunk)[270](index=270&type=chunk) [Risks Related to Our Common Stock](index=64&type=section&id=Risks%20Related%20to%20Our%20Common%20Stock) Discusses risks affecting common stock, including dividend uncertainty and ownership restrictions - Uniti **cannot guarantee future dividend payments**, especially if the Windstream merger is completed and it ceases to be a REIT[274](index=274&type=chunk)[276](index=276&type=chunk) - The market price and trading volume of common stock may **fluctuate widely** due to various factors, including the success of the Windstream merger[277](index=277&type=chunk) - Uniti's charter restricts stock ownership and transfer (e.g., **9.8% limit**) to maintain REIT status, which could delay or prevent a change of control[278](index=278&type=chunk) [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=60&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) Reports on shares withheld from employees to cover tax withholding obligations **Shares Withheld for Tax Obligations (Q1 2024)** | Period | Total Number of Shares Purchased | Average Price Paid per Share | | :-------------------------------- | :----------------------------- | :--------------------------- | | February 1, 2024 to February 29, 2024 | 281,521 | $5.59 | | **Total** | **281,521** | **$5.59** | [Item 3. Defaults Upon Senior Securities](index=66&type=section&id=Item%203.%20Defaults%20Upon%20Senior%20Securities) States that there were no defaults upon senior securities - None[282](index=282&type=chunk) [Item 4. Mine Safety Disclosures](index=66&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) States that this item is not applicable - Not Applicable[282](index=282&type=chunk) [Item 5. Other Information](index=66&type=section&id=Item%205.%20Other%20Information) Reports that no directors or officers adopted or terminated Rule 10b5-1 trading arrangements - No directors or officers adopted or terminated Rule 10b5-1 trading arrangements or non-Rule 10b5-1 trading arrangements during the three months ended March 31, 2024[282](index=282&type=chunk) [Item 6. Exhibits](index=66&type=section&id=Item%206.%20Exhibits) Lists the exhibits filed with the Form 10-Q, including key merger and loan agreements - Includes the Agreement and Plan of Merger, dated as of May 3, 2024, by and between Uniti Group Inc and Windstream Holdings II, LLC (Exhibit 2.1)[283](index=283&type=chunk) - Includes the Bridge Loan and Security Agreement, dated as of February 23, 2024 (Exhibit 10.1)[283](index=283&type=chunk) - Includes various Voting Agreement, Unitholder Agreement, and Form Stockholder Agreement related to the proposed merger[283](index=283&type=chunk)[284](index=284&type=chunk) Signatures [Signatures](index=68&type=section&id=Signatures) Contains the signatures of the authorized officers certifying the report - Signed by Paul E Bullington, Senior Vice President – Chief Financial Officer and Treasurer[288](index=288&type=chunk) - Signed by Travis T Black, Senior Vice President – Chief Accounting Officer[288](index=288&type=chunk)

$1.13 (MRR $ in millions) $0.3 $0.7 $0.5 $0.7 $0.5 $0.5 $0.5 $0.8 $0.3 $0.4 $0.4 $0.3 $0.3 $0.3 $0.3 $0.4 $0.3 $0.3 $0.4 $0.3 $0.4 $0.4 $0.3 $0.3 $0.3 $0.3 $0.53 $0.98 $0.93 $1.01 $0.84 $0.88 $0.79 $0.62 $0.75 $0.71 $0.54 $0.60 66% 72% 61% 67% 52% 64% 74% 74% 77% 64% 62% 68% 57% 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 ...

Financial Data and Key Metrics Changes - The implied valuation for Windstream is at an attractive 5.3 times EBITDA multiple and 4.7 times on a synergy-adjusted basis [6] - The company expects full year AFFO to range between $1.36 and $1.43 per diluted common share, with a midpoint of $1.40 [39] - The leverage ratio at quarter end was 6.07 times based on net debt to first quarter 2024 annualized adjusted EBITDA [69] Business Line Data and Key Metrics Changes - Uniti's consolidated bookings during the first quarter were $0.6 million of MRR, with April expected to be one of the largest months on record with close to $500,000 of MRR [30][31] - Uniti Leasing revenue and EBITDA estimates have been slightly increased due to higher than expected lease-up activity [38] - Uniti Fiber revenue and adjusted EBITDA estimates have been slightly lowered due to the timing of enterprise sales [38] Market Data and Key Metrics Changes - The combined company will serve more than 1.1 million customers, with a strong presence in the Midwest and Southeast [21] - Kinetic is currently targeting building fiber to 1.9 million homes by 2027, achieving over 40% coverage with fiber [29] - The company overlaps with Charter in about 40% of households and with Comcast in about 15% to 20% [109] Company Strategy and Development Direction - The merger with Windstream is expected to create a premier insurgent fiber provider in the U.S., focusing on expanding fiber-to-the-home deployments [21][40] - The company plans to prioritize expanding the fiber-to-the-home build and continue investing in Uniti Fiber and leasing businesses [40] - The combined company will retain the Uniti name and expects to report business segments as Kinetic Fiber Infrastructure and Managed Services [62] Management's Comments on Operating Environment and Future Outlook - Management highlighted the importance of fiber as a mission-critical asset in communications infrastructure, especially during the digital transformation era [54] - The company expects to realize significant incremental upside from enhanced sales and cost of capital improvements [37] - Management expressed confidence in the strategic optionality that the combined company will have compared to the two companies separately [52] Other Important Information - The company will suspend its common dividend going forward, with a total of $0.45 per share distributed for the 2024 tax year [7] - The merger is expected to generate annual CapEx synergies of $20 million to $30 million per year [37] - The company has entered into a bridge funding commitment with certain banks in the amount of $300 million to fund the cash consideration for Windstream [35] Q&A Session Summary Question: Access to Windstream's Financials - Management acknowledged the importance of transparency and plans to provide more information going forward, especially regarding Windstream's financials [74] Question: Timing of the Deal - Management explained that the deal was made possible after clearing previous financing work and having ample liquidity, allowing for a proactive approach to M&A [50] Question: Debt Structure and Leverage - Management clarified that the pro forma leverage of 4.8 times includes the $425 million cash required at closing and does not include the preferred equity [75] Question: Fiber-to-the-Home Build Plans - Management indicated that the target for expanding the fiber-to-the-home build may extend beyond 2027, especially with the BEAD program [106] Question: Competitive Landscape - Management provided insights on market overlap, indicating competition with Charter and Comcast, and noted the number of ACP customers served by Kinetic [109]

Exhibit 99.1 Press Release Release date: May 3, 2024 Uniti Group Inc. Reports First Quarter 2024 Results QUARTERLY RESULTS Announced Merger with Windstream Creates Premier Insurgent Fiber Provider Updates 2024 Outlook LITTLE ROCK, Ark., May 3, 2024 (GLOBE NEWSWIRE) – Uniti Group Inc. ("Uniti" or the "Company") (Nasdaq: UNIT) today announced its results for the first quarter 2024. "Uniti is off to a solid start in 2024. Our core recurring strategic fiber business grew 4% in the first quarter of 2024 when com ...

Table of Contents UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 ________________________________________________________________ FORM 10-K ________________________________________________________________ (Mark One) x ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended December 31, 2023 OR o TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from _____ to _____ ...

Uniti Group Inc. (NASDAQ:UNIT) Q4 2023 Earnings Conference Call February 29, 2024 8:30 AM ET Company Participants Kenny Gunderman - Chief Executive Officer Paul Bullington - Chief Financial Officer Conference Call Participants Greg Williams - TD Cowen Frank Louthan - Raymond James Michael Rollins - Citi David Barden - Bank of America Securities Simon Flannery - Morgan Stanley Operator Welcome to Uniti Group's Fourth Quarter 2023 Conference Call. My name is Gigi, and I will be your operator for today. A webc ...

$116 $115 2023 As Reported 2024 Outlook Core Recurring Core Non-Recurring ($ in millions, except per share data) Reconciliation of 2023 Results to 2024 Outlook Uniti AFFO(1) Full Year 2024 Midpoint Outlook $1,164 $940 $375 $1.41 Appendix and 100 the see and and HINDRA eter Start Partic Bank Bangland States gers > > D D D D cts 2 2 3 5 5 3 三十二十六年二十二十六年 Stress Sunnes and De Ber cin 11 11 2 【大】 anksmin mmmm T 7 7 1 TRE I KE 1 CST 2400000 H F P | | IN I WALL OILE CARDE THE an and I l I see in T MA REE ORD ORDER ...

```markdown [PART I. FINANCIAL INFORMATION](index=6&type=section&id=PART%20I.%20FINANCIAL%20INFORMATION) [Item 1. Financial Statements (Unaudited)](index=6&type=section&id=Item%201.%20Financial%20Statements%20(Unaudited)) This section presents Uniti Group Inc.'s unaudited condensed consolidated financial statements and detailed notes for the period ended September 30, 2023 [Condensed Consolidated Balance Sheets](index=6&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) Condensed Consolidated Balance Sheets (Thousands, except par value) | | September 30, 2023 | December 31, 2022 | | :---------------------------- | :----------------- | :------------------ | | **Assets:** | | | | Property, plant and equipment, net | $3,962,436 | $3,754,547 | | Cash and cash equivalents | $34,119 | $43,803 | | Goodwill | $208,378 | $361,378 | | Total Assets | $4,981,325 | $4,851,229 | | **Liabilities:** | | | | Notes and other debt, net | $5,582,057 | $5,188,815 | | Total liabilities | $7,425,765 | $7,122,435 | | **Shareholders' Deficit:** | | | | Total shareholders' deficit | $(2,444,440) | $(2,271,206) | | Total Liabilities and Shareholders' Deficit | $4,981,325 | $4,851,229 | [Condensed Consolidated Statements of Loss](index=7&type=section&id=Condensed%20Consolidated%20Statements%20of%20Loss) Condensed Consolidated Statements of Loss (Thousands, except per share data) | Metric | Three Months Ended September 30, 2023 | Three Months Ended September 30, 2022 | Nine Months Ended September 30, 2023 | Nine Months Ended September 30, 2022 | | :--------------------------------- | :------------------------------------ | :------------------------------------ | :----------------------------------- | :----------------------------------- | | Total revenues | $290,655 | $283,103 | $864,175 | $845,112 | | Total costs and expenses | $415,353 | $452,580 | $990,535 | $906,108 | | Net loss | $(80,933) | $(155,749) | $(74,506) | $(49,117) | | Net loss attributable to common shareholders | $(81,223) | $(155,910) | $(75,378) | $(50,164) | | Basic loss per common share | $(0.34) | $(0.66) | $(0.32) | $(0.21) | | Diluted loss per common share | $(0.34) | $(0.66) | $(0.32) | $(0.21) | [Condensed Consolidated Statements of Comprehensive Loss](index=8&type=section&id=Condensed%20Consolidated%20Statements%20of%20Comprehensive%20Loss) Condensed Consolidated Statements of Comprehensive Loss (Thousands) | | Three Months Ended September 30, 2023 | Three Months Ended September 30, 2022 | Nine Months Ended September 30, 2023 | Nine Months Ended September 30, 2022 | | :---------- | :------------------------------------ | :------------------------------------ | :----------------------------------- | :----------------------------------- | | Net loss | $(80,933) | $(155,749) | $(74,506) | $(49,117) | | Other comprehensive income | — | $2,829 | — | $8,488 | | Comprehensive loss | $(80,933) | $(152,920) | $(74,506) | $(40,629) | | Comprehensive loss attributable to shareholders | $(80,897) | $(152,851) | $(74,473) | $(40,776) | [Condensed Consolidated Statements of Shareholders' Deficit](index=9&type=section&id=Condensed%20Consolidated%20Statements%20of%20Shareholders'%20Deficit) - **Total shareholders' deficit increased** from **$(2.27 billion)** at December 31, 2022, to **$(2.44 billion)** at September 30, 2023, primarily due to net loss and common stock dividends declared[15](index=15&type=chunk)[22](index=22&type=chunk)[23](index=23&type=chunk) [Condensed Consolidated Statements of Cash Flows](index=11&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) Condensed Consolidated Statements of Cash Flows (Thousands) | | Nine Months Ended September 30, 2023 | Nine Months Ended September 30, 2022 | | :---------- | :----------------------------------- | :----------------------------------- | | Net cash provided by operating activities | $190,575 | $285,107 | | Net cash used in investing activities | $(365,153) | $(258,685) | | Net cash provided by (used in) financing activities | $164,894 | $(41,931) | | Net decrease in cash and cash equivalents | $(9,684) | $(15,509) | | Cash and cash equivalents at end of period | $34,119 | $43,394 | [Notes to Condensed Consolidated Financial Statements](index=13&type=section&id=Notes%20to%20Condensed%20Financial%20Statements) [Note 1. Organization and Description of Business](index=13&type=section&id=Note%201.%20Organization%20and%20Description%20of%20Business) - **Uniti Group Inc. is an independent, internally managed REIT** focused on acquiring, constructing, and leasing mission-critical communications infrastructure, primarily **fiber optic, copper, and coaxial broadband networks and data centers**. The company operates through two main business lines: **Uniti Fiber** and **Uniti Leasing**[30](index=30&type=chunk) - Uniti operates an **'up-REIT' structure**, holding substantially all assets through Uniti Group LP, a Delaware limited partnership, which it controls as the sole general partner (owning approximately **99.96% of partnership interests** as of September 30, 2023). This structure facilitates **tax-efficient acquisitions** using common units of the Operating Partnership[31](index=31&type=chunk) [Note 2. Basis of Presentation and Summary of Significant Accounting Policies](index=13&type=section&id=Note%202.%20Basis%20of%20Presentation%20and%20Summary%20of%20Significant%20Accounting%20Policies) - The financial statements are prepared in accordance with **U.S. GAAP** for interim financial information and **SEC rules**. The company consolidates its Operating Partnership as a **variable interest entity** where it is the primary beneficiary[32](index=32&type=chunk)[34](index=34&type=chunk) - A significant portion of revenue (**66.9%** for the nine months ended September 30, 2023) is derived from **Windstream Leases**, posing a **concentration of credit risk**. Windstream's credit quality is monitored through ratings (**B3 by Moody's, B- by S&P**, both stable outlook) and financial statements[36](index=36&type=chunk)[38](index=38&type=chunk) - **Goodwill**, entirely within the **Uniti Fiber** segment, was impaired by **$153.0 million** (**$113.9 million net of tax**) during **Q3 2023** due to **rising interest rates** impacting the discount rate, following a **$216.0 million impairment** in Q3 2022 for similar reasons[39](index=39&type=chunk)[41](index=41&type=chunk)[42](index=42&type=chunk) [Note 3. Revenues](index=15&type=section&id=Note%203.%20Revenues) Revenue Disaggregated by Stream (Thousands) | Revenue Stream | Three Months Ended Sep 30, 2023 | Three Months Ended Sep 30, 2022 | Nine Months Ended Sep 30, 2023 | Nine Months Ended Sep 30, 2022 | | :--------------- | :------------------------------ | :------------------------------ | :----------------------------- | :----------------------------- | | Uniti Fiber (contracts with customers) | $59,154 | $57,340 | $173,576 | $172,805 | | Uniti Leasing (contracts with customers) | $1,868 | $1,201 | $5,142 | $3,553 | | Uniti Leasing (leasing guidance) | $212,720 | $207,422 | $632,707 | $615,325 | | Uniti Fiber (leasing guidance) | $16,913 | $17,140 | $52,750 | $53,429 | | **Total revenue** | **$290,655** | **$283,103** | **$864,175** | **$845,112** | - As of September 30, 2023, future revenues from remaining performance obligations under **ASC 606** totaled **$646.1 million**, with **$584.9 million** from currently invoiced contracts (average **3.4 years** remaining) and **$61.2 million** from backlog sales bookings (average **5.0 years** remaining)[51](index=51&type=chunk) [Note 4. Leases](index=16&type=section&id=Note%204.%20Leases) Lease Income - Operating Leases (Thousands) | Period | 2023 | 2022 | | :----- | :--- | :--- | | Three Months Ended September 30 | $229,633 | $224,562 | | Nine Months Ended September 30 | $685,457 | $668,754 | - **Total future minimum lease payments** to be received under non-cancellable operating leases as of September 30, 2023, amount to **$5.8 billion**, with **$4.9 billion** relating to the **Windstream Leases**[54](index=54&type=chunk) Future Lease Payments (Thousands) | Year | Operating Leases | Finance Leases | | :--- | :--------------- | :------------- | | 2023 | $4,169 | $928 | | 2024 | $17,941 | $3,521 | | 2025 | $15,090 | $3,468 | | 2026 | $11,701 | $3,335 | | 2027 | $9,060 | $2,960 | | Thereafter | $101,405 | $12,934 | | **Total undiscounted lease payments** | **$159,366** | **$27,146** | | Less: imputed interest | $(78,064) | $(8,758) | | **Total lease liabilities** | **$81,302** | **$18,388** | [Note 5. Investments in Unconsolidated Entities](index=18&type=section&id=Note%205.%20Investments%20in%20Unconsolidated%20Entities) - Uniti's investment in Fiber Holdings, an **equity method unconsolidated entity**, was approximately **$37.7 million** as of September 30, 2023, representing about a **20% economic interest** in the Propco that controls the Midwest fiber network assets[58](index=58&type=chunk) - **The company completed the sale of its investment** in Harmoni Towers LP on **June 21, 2022**, for **$32.5 million cash**, resulting in a pre-tax gain of **$7.9 million**[59](index=59&type=chunk) [Note 6. Fair Value of Financial Instruments](index=18&type=section&id=Note%206.%20Fair%20Value%20of%20Financial%20Instruments) Fair Value of Financial Instruments (Thousands) | | September 30, 2023 Total | December 31, 2022 Total | | :---------- | :----------------------- | :---------------------- | | **Liabilities** | | | | Senior secured notes - 10.50%, due February 15, 2028 | $2,530,476 | — | | Senior secured notes - 4.75%, due April 15, 2028 | $460,130 | $469,740 | | Senior unsecured notes - 6.00%, due January 15, 2030 | $441,809 | $467,401 | | Senior unsecured notes - 6.50%, due February 15, 2029 | $723,720 | $759,917 | | Exchangeable senior notes - 4.00%, due June 15, 2024 | $118,016 | $127,024 | | Convertible senior notes - 7.50% due December 1, 2027 | $263,535 | $297,765 | | Senior secured revolving credit facility, variable rate | $270,973 | $187,981 | | Settlement payable | $174,075 | $232,350 | | **Total** | **$4,982,734** | **$4,750,497** | - **The total principal balance of outstanding notes and other debt was $5.68 billion** at September 30, 2023, with a fair value of **$4.98 billion**. **The Settlement Payable to Windstream was $185.9 million** as of September 30, 2023[63](index=63&type=chunk)[64](index=64&type=chunk) [Note 7. Property, Plant and Equipment](index=20&type=section&id=Note%207.%20Property,%20Plant%20and%20Equipment) Carrying Value of Property, Plant and Equipment (Thousands) | | September 30, 2023 | December 31, 2022 | | :---------- | :----------------- | :------------------ | | Land | $30,035 | $28,845 | | Fiber | $4,763,091 | $4,434,506 | | Copper | $3,978,336 | $3,964,439 | | Construction in progress | $57,597 | $46,508 | | Total | $10,127,906 | $9,728,177 | | Less accumulated depreciation | $(6,165,470) | $(5,973,630) | | **Net property, plant and equipment** | **$3,962,436** | **$3,754,547** | - **Depreciation expense** for the three and nine months ended September 30, 2023, was **$69.9 million** and **$209.1 million**, respectively, showing an increase from **$66.1 million** and **$194.9 million** in the prior year periods[65](index=65&type=chunk) [Note 8. Derivative Instruments and Hedging Activities](index=20&type=section&id=Note%208.%20Derivative%20Instruments%20and%20Hedging%20Activities) - **Uniti Fiber Holdings Inc. entered into Note Hedge Transactions** to reduce potential dilution from **Exchangeable Notes**, which are recorded in **additional paid-in capital** and not remeasured as derivatives[66](index=66&type=chunk)[67](index=67&type=chunk) - The company also entered into **Warrant transactions** to sell warrants to acquire common stock, which are also recorded in **additional paid-in capital** and not remeasured as derivatives. The maximum number of shares issuable under warrants has **decreased** due to partial unwind agreements[68](index=68&type=chunk)[69](index=69&type=chunk) [Note 9. Goodwill and Intangible Assets and Liabilities](index=21&type=section&id=Note%209.%20Goodwill%20and%20Intangible%20Assets%20and%20Liabilities) Changes in Goodwill Carrying Value (Thousands) | | Uniti Fiber | Total | | :---------- | :---------- | :---- | | Balance at December 31, 2022 | $361,378 | $361,378 | | Goodwill Impairment (Note 2) | $(153,000) | $(153,000) | | **Balance at September 30, 2023** | **$208,378** | **$208,378** | Intangible Assets and Liabilities, Net (Thousands) | | September 30, 2023 | December 31, 2022 | | :---------- | :----------------- | :------------------ | | Total intangible assets, net | $312,541 | $334,846 | | Total intangible liabilities, net | $159,071 | $167,092 | - **Amortization expense for intangible assets was $7.4 million** for Q3 2023 and **$22.3 million** for the nine months ended September 30, 2023. Estimated annual amortization expense is **$29.8 million** for 2023 and **$29.7 million** for 2024-2027[72](index=72&type=chunk) - **Revenue from amortization of below-market leases was $2.7 million** for Q3 2023 and **$8.0 million** for the nine months ended September 30, 2023. Estimated annual revenue from this source is **$10.7 million** for 2023-2027[73](index=73&type=chunk) [Note 10. Notes and Other Debt](index=22&type=section&id=Note%2010.%20Notes%20and%20Other%20Debt) Notes and Other Debt (Thousands) | | September 30, 2023 Principal | December 31, 2022 Principal | | :---------- | :--------------------------- | :-------------------------- | | Senior secured notes - 10.50% due Feb 15, 2028 | $2,600,000 | — | | Senior secured notes - 4.75% due Apr 15, 2028 | $570,000 | $570,000 | | Senior unsecured notes - 6.00% due Jan 15, 2030 | $700,000 | $700,000 | | Senior unsecured notes - 6.50% due Feb 15, 2029 | $1,110,000 | $1,110,000 | | Exchangeable senior notes - 4.00% due Jun 15, 2024 | $122,942 | $137,873 | | Convertible senior notes - 7.50% due Dec 1, 2027 | $306,500 | $306,500 | | Senior secured revolving credit facility | $271,000 | $188,000 | | **Total Principal Amount** | **$5,680,442** | **$5,262,373** | | Less unamortized discount, premium and debt issuance costs | $(98,385) | $(73,558) | | **Notes and other debt, net** | **$5,582,057** | **$5,188,815** | - On **February 14, 2023**, the company issued **$2.6 billion of 10.50% Senior Secured Notes** due February 15, 2028, using proceeds to redeem **$2.25 billion of 7.875% senior secured notes** due 2025 and repay revolving credit facility borrowings. This resulted in a **$32.3 million loss on extinguishment of debt**[82](index=82&type=chunk) - **The Revolving Credit Facility's maturity was extended** to **September 24, 2027**, and transitioned from **LIBOR to Term SOFR** with a **10 basis point credit spread adjustment**. The company was in **compliance with all debt covenants** as of September 30, 2023[78](index=78&type=chunk)[79](index=79&type=chunk) [Note 11. Earnings Per Share](index=24&type=section&id=Note%2011.%20Earnings%20Per%20Share) Loss Per Common Share (Thousands, except per share data) | | Three Months Ended Sep 30, 2023 | Three Months Ended Sep 30, 2022 | Nine Months Ended Sep 30, 2023 | Nine Months Ended Sep 30, 2022 | | :--------------------------------- | :------------------------------ | :------------------------------ | :----------------------------- | :----------------------------- | | Net loss attributable to common shareholders | $(81,223) | $(155,910) | $(75,378) | $(50,164) | | Basic weighted-average common shares outstanding | 236,533 | 235,739 | 236,352 | 235,483 | | Basic loss per common share | $(0.34) | $(0.66) | $(0.32) | $(0.21) | | Diluted loss per common share | $(0.34) | $(0.66) | $(0.32) | $(0.21) | - For the three and nine months ended September 30, 2023, **1,053,189 non-participating securities** and **53,427,833** and **53,836,845 potential common shares** related to Exchangeable Notes and Convertible Notes, respectively, were excluded from EPS computation as their effect would have been **anti-dilutive**[96](index=96&type=chunk) [Note 12. Segment Information](index=28&type=section&id=Note%2012.%20Segment%20Information) - **Uniti Group Inc. manages its operations through two reportable segments**: **Uniti Leasing** (**REIT operations**, leasing mission-critical communications assets) and **Uniti Fiber** (infrastructure solutions, including **cell site backhaul and dark fiber**). Corporate operations include shared service functions[98](index=98&type=chunk)[99](index=99&type=chunk) - **Segment performance is evaluated using Adjusted EBITDA**. For the three months ended September 30, 2023, Uniti Leasing reported **$208.6 million** in **Adjusted EBITDA** and Uniti Fiber reported **$29.9 million**. For the nine months ended September 30, 2023, Uniti Leasing reported **$620.1 million** and Uniti Fiber reported **$88.7 million**[100](index=100&type=chunk)[101](index=101&type=chunk)[102](index=102&type=chunk) [Note 13. Commitments and Contingencies](index=31&type=section&id=Note%2013.%20Commitments%20and%20Contingencies) - **Uniti is obligated to make $490.1 million** in cash payments to Windstream in **20 quarterly installments**, having paid **$288.9 million** as of September 30, 2023[104](index=104&type=chunk) - **The company is committed to reimbursing Windstream up to $1.75 billion** for **Growth Capital Improvements (GCIs)** through 2029, with annual limits. During the nine months ended September 30, 2023, Uniti reimbursed **$233.5 million** for GCIs, bringing the total to **$794.2 million**[105](index=105&type=chunk) - **Rent payable by Windstream increases by 8.0%** of each GCI reimbursement installment, escalating by **100.5%** of the prior rate annually[106](index=106&type=chunk) - **A class action lawsuit was settled for $38.9 million**, fully funded by insurance carriers. Derivative actions were settled for **non-monetary damages** and **$0.8 million** in attorney's fees[109](index=109&type=chunk)[110](index=110&type=chunk) [Note 14. Accumulated Other Comprehensive Loss](index=33&type=section&id=Note%2014.%20Accumulated%20Other%20Comprehensive%20Loss) Changes in Accumulated Other Comprehensive Loss (Thousands) | | Three Months Ended Sep 30, 2023 | Three Months Ended Sep 30, 2022 | Nine Months Ended Sep 30, 2023 | Nine Months Ended Sep 30, 2022 | | :---------- | :------------------------------ | :------------------------------ | :----------------------------- | :----------------------------- | | Balance at beginning of period attributable to shareholders (Cash flow hedge) | $(30,353) | $(30,353) | $(30,353) | $(30,353) | | Balance at end of period attributable to shareholders (Cash flow hedge) | $(30,353) | $(30,353) | $(30,353) | $(30,353) | | Balance at beginning of period attributable to shareholders (Interest rate swap termination) | $30,353 | $26,837 | $30,353 | $21,189 | | Amounts reclassified from accumulated other comprehensive income | — | $2,829 | — | $8,488 | | Balance at end of period attributable to shareholders (Interest rate swap termination) | $30,353 | $29,665 | $30,353 | $29,665 | | **Accumulated other comprehensive loss at end of period** | **$—** | **$(688)** | **$—** | **$(688)** | [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=33&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management analyzes Uniti Group Inc.'s financial condition and operations for Q3 2023, covering segment performance, non-GAAP measures, liquidity, and accounting estimates [1. Overview](index=33&type=section&id=1.%20Overview) - **Uniti Group Inc. is an independent, internally managed REIT** focused on acquiring and constructing mission-critical communications infrastructure, including **fiber optic, copper, and coaxial broadband networks and data centers**[115](index=115&type=chunk) - The company operates as a **REIT** for U.S. federal income tax purposes, with its fiber and certain leasing businesses operating through **Taxable REIT Subsidiaries (TRSs)** which are subject to corporate income taxes[117](index=117&type=chunk) - Uniti aims to grow and diversify its portfolio through various transaction structures, including **sale-leasebacks, dark fiber leasing, whole company acquisitions, capital investment financing, and M&A financing**[119](index=119&type=chunk) - **The company manages operations through two reportable segments**: **Uniti Leasing** (**REIT operations**, leasing communications assets) and **Uniti Fiber** (infrastructure solutions like **cell site backhaul and dark fiber**)[120](index=120&type=chunk)[121](index=121&type=chunk) [2. Results of Operations](index=35&type=section&id=2.%20Results%20of%20Operations) Consolidated Results of Operations (Thousands, % of Revenues) | Metric | Three Months Ended Sep 30, 2023 | Three Months Ended Sep 30, 2022 | Nine Months Ended Sep 30, 2023 | Nine Months Ended Sep 30, 2022 | | :----- | :------------------------------ | :------------------------------ | :----------------------------- | :----------------------------- | | Total revenues | $290,655 (100.0%) | $283,103 (100.0%) | $864,175 (100.0%) | $845,112 (100.0%) | | Interest expense, net | $120,691 (41.5%) | $97,731 (34.5%) | $389,243 (45.0%) | $290,280 (34.3%) | | Depreciation and amortization | $77,337 (26.6%) | $73,516 (26.1%) | $231,379 (26.8%) | $217,276 (25.7%) | | Goodwill impairment | $153,000 (52.6%) | $216,000 (76.3%) | $153,000 (17.7%) | $216,000 (25.6%) | | Net loss attributable to common shareholders | $(81,223) (27.9%) | $(155,910) (55.1%) | $(75,378) (8.7%) | $(50,164) (5.9%) | Operating Metrics | Operating Metrics | September 30, 2023 | September 30, 2022 | % Increase (Decrease) | | :---------------- | :----------------- | :----------------- | :-------------------- | | Uniti Leasing: Fiber strand miles | 5,460,000 | 5,140,000 | 6.2% | | Uniti Leasing: Copper strand miles | 230,000 | 230,000 | 0.0% | | Uniti Fiber: Fiber strand miles | 2,940,000 | 2,840,000 | 3.5% | | Uniti Fiber: Customer connections | 28,257 | 27,615 | 2.3% | - **Uniti Leasing revenues increased by $5.9 million (2.8%)** for the three months ended September 30, 2023, and by **$18.9 million (3.1%)** for the nine months ended September 30, 2023, primarily driven by **Growth Capital Improvement (GCI) revenue** and continued investment by Windstream in **Tenant Funded Capital Improvements (TCIs)**[127](index=127&type=chunk)[131](index=131&type=chunk)[132](index=132&type=chunk)[156](index=156&type=chunk)[157](index=157&type=chunk) - **Uniti Fiber revenues increased by $1.6 million (2.1%)** for the three months ended September 30, 2023, mainly due to increased **Enterprise and wholesale revenues**, partially offset by a decrease in **Lit backhaul services**. For the nine months, Uniti Fiber revenues were relatively flat, with growth in Enterprise and wholesale offset by declines in **E-Rate and government** and Lit backhaul[137](index=137&type=chunk)[138](index=138&type=chunk)[159](index=159&type=chunk)[160](index=160&type=chunk) - **Interest expense, net, increased significantly by $23.0 million** for the three months and **$99.0 million** for the nine months ended September 30, 2023, primarily due to **higher cash interest** on secured and unsecured notes and a **$32.3 million loss on extinguishment of debt** related to the 2025 Secured Notes redemption[139](index=139&type=chunk)[162](index=162&type=chunk) - **Depreciation expense increased** for both Uniti Leasing and Uniti Fiber segments due to **asset additions** since September 30, 2022[140](index=140&type=chunk)[141](index=141&type=chunk)[163](index=163&type=chunk)[164](index=164&type=chunk) - **Goodwill impairment charges of $153.0 million** were recorded in the **Uniti Fiber** segment for both the three and nine months ended September 30, 2023, driven by **macroeconomic factors** and **increased interest rates** impacting the discount rate[149](index=149&type=chunk)[173](index=173&type=chunk) [3. Non-GAAP Financial Measures](index=48&type=section&id=3.%20Non-GAAP%20Financial%20Measures) - The company uses **non-GAAP financial measures** like **EBITDA, Adjusted EBITDA, FFO (NAREIT defined), and AFFO** to supplement GAAP net income, believing they provide additional information for evaluating operating performance and comparability among REITs[177](index=177&type=chunk)[179](index=179&type=chunk)[181](index=181&type=chunk) Reconciliation of Net Loss to EBITDA and Adjusted EBITDA (Thousands) | | Three Months Ended Sep 30, 2023 | Three Months Ended Sep 30, 2022 | Nine Months Ended Sep 30, 2023 | Nine Months Ended Sep 30, 2022 | | :---------- | :------------------------------ | :------------------------------ | :----------------------------- | :----------------------------- | | Net loss | $(80,933) | $(155,749) | $(74,506) | $(49,117) | | EBITDA | $74,000 | $2,442 | $496,252 | $448,256 | | Adjusted EBITDA | $233,010 | $225,053 | $692,378 | $677,006 | Reconciliation of Net Loss to FFO and AFFO (Thousands) | | Three Months Ended Sep 30, 2023 | Three Months Ended Sep 30, 2022 | Nine Months Ended Sep 30, 2023 | Nine Months Ended Sep 30, 2022 | | :---------- | :------------------------------ | :------------------------------ | :----------------------------- | :----------------------------- | | Net loss attributable to common shareholders | $(81,223) | $(155,910) | $(75,378) | $(50,164) | | FFO attributable to common shareholders | $(26,831) | $(102,474) | $89,004 | $107,733 | | AFFO attributable to common shareholders | $95,340 | $112,578 | $293,691 | $339,819 | [4. Liquidity and Capital Resources](index=51&type=section&id=4.%20Liquidity%20and%20Capital%20Resources) - **Principal liquidity needs include** funding operating expenses, debt service, investment activities (including capital expenditures), and dividend distributions. The company is obligated to make **$490.1 million** in cash payments to Windstream and reimburse up to **$1.75 billion** for Growth Capital Improvements through 2029[186](index=186&type=chunk) - **As of September 30, 2023, Uniti had $34.1 million** in cash and cash equivalents and **$229.0 million** in borrowing availability under its Revolving Credit Facility[188](index=188&type=chunk) - **Net cash provided by operating activities decreased to $190.6 million** for the nine months ended September 30, 2023, from **$285.1 million** in the prior year, primarily due to **increased cash interest expense** and changes in working capital[188](index=188&type=chunk) - **Net cash used in investing activities increased by $106.5 million to $365.2 million** for the nine months ended September 30, 2023, mainly driven by a **$75.4 million increase in Growth Capital Improvements**[189](index=189&type=chunk) - **Net cash provided by financing activities was $164.9 million** for the nine months ended September 30, 2023, a significant change from net cash used of **$41.9 million** in the prior year, primarily due to **proceeds from new secured notes** offset by debt repayments and related costs[190](index=190&type=chunk) Capital Expenditures (Thousands) | | Success Based | Maintenance | Non-Network | Total | | :---------- | :------------ | :---------- | :---------- | :---- | | Uniti Leasing, excluding growth capital improvements | $20,657 | — | — | $20,657 | | Growth capital improvements | $233,465 | — | — | $233,465 | | Uniti Fiber | $108,173 | $5,338 | $631 | $114,142 | | **Total capital expenditures** | **$362,295** | **$5,338** | **$631** | **$368,264** | - **The company intends to make dividend payments** of all or substantially all of its taxable income to maintain **REIT status**. **Quarterly cash dividends of $0.15 per share** were declared for the periods ended March 31, June 30, and September 30, 2023[203](index=203&type=chunk)[204](index=204&type=chunk) [Item 3. Quantitative and Qualitative Disclosures About Market Risk](index=57&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) No material changes to market risk disclosures were reported compared to the Annual Report - **No material changes to market risk disclosures** were reported compared to the Annual Report[213](index=213&type=chunk) [Item 4. Controls and Procedures](index=57&type=section&id=Item%204.%20Controls%20and%20Procedures) Disclosure controls were effective as of September 30, 2023, with no material changes in internal control over financial reporting - Management, including the principal executive and financial officers, concluded that **disclosure controls and procedures were effective** as of September 30, 2023[215](index=215&type=chunk) - There were **no changes in internal control over financial reporting** during the quarter ended September 30, 2023, that materially affected or are reasonably likely to materially affect internal control over financial reporting[216](index=216&type=chunk) [PART II. OTHER INFORMATION](index=58&type=section&id=PART%20II.%20OTHER%20INFORMATION) [Item 1. Legal Proceedings](index=58&type=section&id=Item%201.%20Legal%20Proceedings) Legal proceedings information is incorporated by reference from Note 13 of the financial statements - **Legal proceedings information is incorporated by reference** from Note 13 to the Condensed Consolidated Financial Statements[219](index=219&type=chunk) [Item 1A. Risk Factors](index=58&type=section&id=Item%201A.%20Risk%20Factors) No material changes to risk factors were reported compared to the Annual Report - **No material changes to risk factors** were reported compared to the Annual Report[220](index=220&type=chunk) [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=58&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) This section details shares withheld from employees for tax obligations related to restricted stock vesting Issuer Purchases of Equity Securities (Shares Withheld for Tax) | Period | Total Number of Shares Purchased | Average Price Paid per Share | | :----- | :----------------------------- | :--------------------------- | | July 1, 2023 to July 31, 2023 | 644 | $5.07 | | August 1, 2023 to August 31, 2023 | 987 | $5.49 | | September 1, 2023 to September 30, 2023 | 67 | $4.58 | | **Total** | **1,698** | **$5.30** | [Item 3. Defaults Upon Senior Securities](index=58&type=section&id=Item%203.%20Defaults%20Upon%20Senior%20Securities) No defaults upon senior securities were reported - **No defaults upon senior securities** were reported[223](index=223&type=chunk) [Item 4. Mine Safety Disclosures](index=58&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) Mine safety disclosures are not applicable to the company - **Mine safety disclosures are not applicable**[223](index=223&type=chunk) [Item 5. Other Information](index=58&type=section&id=Item%205.%20Other%20Information) The Board amended Bylaws for SEC Rule 14a-19 compliance; no Rule 10b5-1 trading arrangements were adopted or terminated - On **November 1, 2023**, the Board approved an amendment to the Bylaws to address **SEC Rule 14a-19** regarding universal proxy cards, requiring stockholders to comply with the rule for nominations and use a non-white proxy card[223](index=223&type=chunk) - **No directors or officers adopted or terminated Rule 10b5-1 or non-Rule 10b5-1 trading arrangements** during the three months ended September 30, 2023[225](index=225&type=chunk) [Item 6. Exhibits](index=59&type=section&id=Item%206.%20Exhibits) This section lists exhibits filed with Form 10-Q, including amended Bylaws, officer certifications, and Inline XBRL documents - **Key exhibits include the Amended and Restated Bylaws** (as amended November 1, 2023), **certifications of the Principal Executive Officer and Principal Financial Officer** (pursuant to Sections 302 and 906 of Sarbanes-Oxley Act), and **Inline XBRL documents**[226](index=226&type=chunk) ```