PART I. FINANCIAL INFORMATION Financial Statements (Unaudited) Uniti Group Inc. reported increased revenues but a sharp decline in net income for H1 2025, driven by higher interest expenses Condensed Consolidated Balance Sheets Total assets and liabilities increased as of June 30, 2025, with a continued significant shareholders' deficit Condensed Consolidated Balance Sheets (Thousands) | Balance Sheet Item | June 30, 2025 ($ thousands) | December 31, 2024 ($ thousands) | | :--- | :--- | :--- | | Total Assets | 5,543,531 | 5,282,145 | | Property, plant and equipment, net | 4,366,790 | 4,209,747 | | Cash and cash equivalents | 240,727 | 155,593 | | Total Liabilities | 7,987,519 | 7,733,985 | | Notes and other debt, net | 6,064,751 | 5,783,597 | | Total Shareholders' Deficit | (2,443,988) | (2,451,840) | Condensed Consolidated Statements of (Loss) Income Q2 2025 net loss and year-to-date net income decline were primarily driven by a substantial increase in interest expense Condensed Consolidated Statements of (Loss) Income (Thousands, except EPS) | Metric ($ thousands, except EPS) | Q2 2025 | Q2 2024 | YTD 2025 | YTD 2024 | | :--- | :--- | :--- | :--- | :--- | | Total Revenues | 300,732 | 294,947 | 594,641 | 581,365 | | Interest Expense, net | 160,784 | 127,475 | 298,771 | 250,686 | | Net (Loss) Income | (10,729) | 18,281 | 1,491 | 59,629 | | Diluted EPS | $(0.04) | $0.07 | $0.00 | $0.25 | Condensed Consolidated Statements of Cash Flows Stable operating cash flow and increased investing/financing activities led to a higher net cash increase for H1 2025 Condensed Consolidated Statements of Cash Flows (Thousands) | Cash Flow Activity ($ thousands) | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :--- | :--- | :--- | | Net Cash Provided by Operating Activities | 183,495 | 174,338 | | Net Cash Used in Investing Activities | (245,587) | (182,284) | | Net Cash Provided by Financing Activities | 176,838 | 77,173 | | Net Increase in Cash | 114,746 | 69,227 | Notes to Condensed Consolidated Financial Statements Notes detail the pending Windstream merger, customer concentration, capital commitments, and recent debt restructuring activities - Uniti entered into a merger agreement with its largest customer, Windstream, with an intended closing date of August 1, 2025; post-merger, Uniti will cease to be a REIT3138 - Revenue from the Windstream Leases constituted 68.2% of total revenue for the first six months of 2025, highlighting significant customer concentration42 - The company has an ongoing commitment to reimburse Windstream for up to $1.75 billion in Growth Capital Improvements through 2029, with $1.2 billion reimbursed to date118 - In Q2 2025, the company issued $600 million of 8.625% Senior Unsecured Notes due 2032 and used the proceeds to partially redeem higher-cost secured notes8895 Management's Discussion and Analysis of Financial Condition and Results of Operations Management discusses the Windstream merger, Q2 2025 revenue growth, increased interest expense, and liquidity for operations and merger funding Overview Uniti, an internally managed REIT, is merging with Windstream, terminating its REIT status and integrating fiber infrastructure - The company is structured as a REIT with two primary business segments: Uniti Leasing, which acquires and leases mission-critical communications assets, and Uniti Fiber, which provides infrastructure solutions like cell site backhaul135136 - A definitive merger agreement with Windstream was signed, with an expected closing date of August 1, 2025; post-merger, Uniti will cease to be a REIT and become an integrated telecommunications company139140146 - In June 2025, Uniti issued $600 million of 8.625% Senior Notes due 2032, using proceeds to redeem a portion of its 10.50% Senior Secured Notes, resulting in a $31.9 million loss on extinguishment147153 Results of Operations Q2 2025 total revenues increased by 2.0% due to Uniti Leasing, but a net loss resulted from a significant rise in interest expense Revenue by Segment (Thousands) | Revenue Segment ($ thousands) | Q2 2025 | Q2 2024 | % Change | | :--- | :--- | :--- | :--- | | Uniti Leasing | 226,478 | 218,286 | 3.7% | | Uniti Fiber | 74,254 | 76,661 | (3.1%) | | Total Revenues | 300,732 | 294,947 | 2.0% | - The increase in Uniti Leasing revenue was primarily driven by higher cash revenue from Growth Capital Improvement (GCI) reimbursements and non-cash revenue from Tenant Funded Capital Improvements (TCIs)162163 - Interest expense for Q2 2025 increased by $33.3 million year-over-year, mainly due to a $31.9 million loss on the partial redemption of the February 2028 Secured Notes167 - Transaction-related costs rose to $13.5 million in Q2 2025 from $11.0 million in Q2 2024, primarily due to expenses associated with the pending merger with Windstream177 Non-GAAP Financial Measures Adjusted EBITDA and AFFO increased in Q2 2025, reflecting operational growth despite a GAAP net loss Non-GAAP Financial Measures (Thousands) | Non-GAAP Metric ($ thousands) | Q2 2025 | Q2 2024 | YTD 2025 | YTD 2024 | | :--- | :--- | :--- | :--- | :--- | | EBITDA | 223,540 | 221,237 | 448,912 | 457,918 | | Adjusted EBITDA | 242,563 | 236,659 | 480,393 | 465,287 | | FFO attributable to common shareholders | 46,301 | 72,409 | 114,571 | 149,871 | | AFFO attributable to common shareholders | 96,483 | 92,254 | 188,784 | 179,880 | Liquidity and Capital Resources Uniti maintains strong liquidity for operations and the Windstream merger, with significant capital expenditures in H1 2025 - As of June 30, 2025, the company had total liquidity of approximately $798.6 million, consisting of $298.6 million in cash and equivalents and $500.0 million of borrowing availability under its revolving credit facility211 - The company expects to fund the $425 million cash portion of the Windstream merger consideration using cash on hand and borrowings from its Revolving Credit Facility220 Capital Expenditures YTD 2025 (Thousands) | Capital Expenditures YTD 2025 ($ thousands) | Amount | | :--- | :--- | | Success Based (incl. GCIs) | 241,222 | | Maintenance | 3,582 | | Non-Network | 1,394 | | Total Capital Expenditures | 246,198 | - The company has suspended dividend payments, except where necessary to maintain REIT status, until the consummation of the Merger with Windstream228 Quantitative and Qualitative Disclosures About Market Risk No material changes to market risk disclosures have occurred since the most recent Annual Report on Form 10-K - There have been no material changes to the company's market risk disclosures since the last Annual Report234 Controls and Procedures Disclosure controls and procedures were effective as of June 30, 2025, with no material changes to internal control over financial reporting - The principal executive officer and principal financial officer concluded that the company's disclosure controls and procedures were effective as of June 30, 2025236 - No changes occurred during the quarter that materially affected, or are reasonably likely to materially affect, the company's internal control over financial reporting237 PART II. OTHER INFORMATION Legal Proceedings Legal proceedings information is incorporated by reference from Note 11 of the Condensed Consolidated Financial Statements - Information regarding legal proceedings is incorporated by reference from Note 11 of the Condensed Consolidated Financial Statements239 Risk Factors No material changes to risk factors have occurred since the Annual Report on Form 10-K - No material changes to the risk factors discussed in the Annual Report have occurred240 Unregistered Sales of Equity Securities and Use of Proceeds The company withheld 534 common shares during the quarter to satisfy employee tax obligations from restricted stock vesting Shares Purchased to Satisfy Tax Obligations | Period | Total Shares Purchased | Average Price Paid per Share | | :--- | :--- | :--- | | April 2025 | 12 | $4.80 | | May 2025 | 522 | $4.21 | | June 2025 | 0 | N/A | | Total | 534 | $4.22 | Other Information No directors or officers adopted or terminated Rule 10b5-1 or non-Rule 10b5-1 trading arrangements in Q2 2025 - No directors or officers adopted or terminated a Rule 10b5-1 or non-Rule 10b5-1 trading arrangement during the three months ended June 30, 2025243
Uniti(UNIT) - 2025 Q2 - Quarterly Report