All right, everyone. Thanks for coming. I appreciate everyone here being with us this morning for our 30th Annual Leveraged Finance Conference. This is the session for Uniti. We're pleased to have Uniti with us here today to kinda talk about some of the trends in the business. With us here from the company is Chief Financial Officer Paul Bullington and Bill DiTullio, who is the VP of Finance and Investor Relations. I wanna thank you guys both very much for coming. Very much. I guess I gotta kind of turn this way to answer your question. No, thank you for having us here. We're delighted to be back a nd, I want, I wanna start by maybe talking about a few of the operating trends, and we'll talk about, you know, some of the M&A stuff too as we get through. I thought maybe you could just remind us of what you're seeing demand-wise across your customer segments. I think on the last earnings call, you talked a little bit about seeing some signs of accelerating growth. How do bookings look so far, and how should the market think about kind of the back half of the year of the underlying fundamentals that you see driving the growth in the business? Sure. Bookings has been exceptionally strong. Demand has been exceptionally strong, really across all of our customer segments. When I say that, I'm talking about sort of our strategic customers, wireless customers, large carriers, hyperscalers, but also into our enterprise business and small sort of metro wholesale business. Demand has been really strong across the board. We've seen now 5 straight quarters that we've reported of what we've been referring to as elevated bookings. Prior to the last 5 quarters, bookings typically averaged $500 thousand-$600 thousand of MRR per quarter. The last 5 quarters, we've been seeing it closer to $1 million of MRR. So $800 thousand-$900 thousand to $1 million of MRR. That new level of bookings is a result of a few things, but mostly, just execution on our strategy for lease-up, getting the right sales force in place across all of our customer segments, the right leadership in place, the right product set in place, and really driving that business. We expect that this level of bookings is sort of the new normal for Uniti. Bookings can go up and down from quarter to quarter. You know, not saying necessarily we're gonna have that level of bookings every quarter, but we expect that to be more the norm going forward than the level of booking. As we think about the bookings, I guess, can you talk a little bit about what that gives you in terms of the certainty of the visibility of the future cash flows? Just kinda like the average term that you're sort of seeing with some of them have contract terms shortened and have people's commitment levels shortened during the uncertainty around COVID? Now, as we exit out, is there greater confidence being given as guys are looking to sign deals? We have really good visibility into our revenue base, and that's one of the beauties of a recurring revenue model with generally long-term contracts. In dark fiber, contracts tend to be very long, 10-20 years on average. You know, those are very long contracts. Our wholesale wireless contracts tend to five years plus, so that 5-10-year range, depending on the service and the particular deal. The smaller wholesale enterprise tends to be sort of that 36, maybe 40 months on average. So somewhere between 36 months and 60 months on average. That gives us a very stable recurring revenue base. In terms of visibility going forward, we've got good visibility into our funnel and the flow of deals. There's a, you know, once you do a booking, there's, you know, from 90 to 120 days for an enterprise customer to be deployed. For a larger wireless deal, it might be 6 months, 12 months, even 24 months for more of an anchor build. That gives us a lot of visibility into revenue going forward. I wanted to talk a little bit about enterprise. Maybe before we get there, just one more on the dark fiber side. I guess, how big of an opportunity is there, particularly as 5G becomes more of a reality, to monetize some of that dark fiber that you have in the backbone of the network? It's we think a very sizable opportunity for us. That business really changed for us overnight in 2020 when we got access to 2.2 million strands on the Windstream network that we owned prior, but they were reserved for Windstream's exclusive use. Post-2020, those 2.2 million fiber strands are now available to us to market to third parties. That really changed the game for us. It really put us. We were already national in some ways, but it really made us a competitive player nationally in that market. That's really increased demand that we've seen from carriers looking to add fiber routes to their backbone, to add diversity maybe to their networks, to connect new data centers, and get new routes. We've also seen a lot of demand coming in, actually exceeded our expectations with regard to hyperscalers, sort of the FAANG type of customer, cloud customer looking to deploy additional fiber routes to support their business. Strong demand there. It's been a really nice part of our demand set for How do we think about, you know, the future for that business as you think about the stuff that you would light up to support, you know, sort of your own business versus how much you think of that you actually can monetize and so on? Yes. You know, we're really not lighting up a lot of that national business for our own use. It's really only in, you know, across the markets where we have a heavy local metro presence. Really, the Southeast is w here we might light a route to support, you know, our IP backbone or other. Through the rest of the country where we don't have those metro operations, it's really. You know, we're really leasing those fibers off to other parties. There's really not a need for us to light those. I mean, that could change over time as we expand. We've talked a little bit about maybe we've got fiber. While we only have enterprise and wholesale metro operations in about 20-25 metro markets, we have fiber available to us in about 300 metro markets. As we expand that over time, those fibers could be more useful for our own traffic, but mostly it's about leasing those to third parties. We've started to light a couple of those routes up as well in order to provide high-cap lit service. When you are selling those dark fiber strands, I guess, is that the same model as it has historically been with very high almost 100% type margin from the sale? Absolutely. Very high margin, so dark fiber, you know, there's really no additional incremental operational support, very marginal operational additional support needed in order to to support those going forward. You're already really maintaining networks. Very high margin, very low capital intensity for the most part. I mean, it's possible we could do a deal where we're building a new route, but really for the most part, when we're talking about I mean leasing those fibers, we're talking about leasing existing networks. You know, it's 90%+ margin and low capital intensity. Nice revenue. I wanna pivot to enterprise and talk a little bit about, I guess, first, what are you seeing from your customers today in terms of activity levels and the conversations that you're having? I guess, enterprise is tagged as one of those segments of the broader telecom sector that kind of sees the softness coming perhaps before other parts do. I think, you know, earlier we had a panel going on that talked about risks around a recession for 2023 and how you guys sort of plan for, you know, potential softness in the broader economy and how that maybe impacts some of what you're trying to do on the enterprise side. From an enterprise standpoint, and when carriers talk about their enterprise business, it's not really necessarily all the same. Our enterprise business is based around high-cap, on-net fiber delivery of core infrastructure products to enterprises. We're talking about direct internet access over fiber to large bandwidth users in the enterprise space in our metro markets. We're talking about wide area networks that connect, say, schools together or connect hospital systems together. It's really kind of table stakes types of products It's not a lot of the ancillary over the top or managed services products that we're talking about. We do have a few managed services offerings that you might hear us talk about occasionally. In large part, what we're talking about are these high-cap services, and those are our services that businesses continue to need. They contract for those on a, like I said earlier, really long-term basis. We see the demand for that continuing. Our business is fairly acyclical because of the types of products we provide to customers on longer term contracts. We're typically pretty insulated from that type of business. We've been operating our enterprise business through a number of cycles, economic cycles now, and so we would expect it to hold up pretty well. Doesn't mean it's recession-proof. I think, in terms of new sales, certainly customers could go under, they could shut down locations, they could postpone decisions. We're typically the disruptive, you know competitive provider in these markets. A recession can also be a catalyst for enterprises to look to us to see if we can deliver more value for what they're spending. We expect that our enterprise business. We haven't seen that softness develop at this point. We expect it to hold up pretty well. I did wanna talk a little bit about capital and kinda the yields that you're getting on capital. If you could maybe just remind the room and folks listening what the capital plans are for this year, as you do the CapEx deployment, and then how yields look now relative to, you know, we're seeing risk yields in the bond market, you know, move way wider. Have there been impacts on the underlying yield that you get on some of these new builds that you're doing? We're continuing to deploy capital into our existing markets to serve customers. As we're doing that, we're doing that more on a lease-up basis. Whereas a couple of years ago, we had 12-15, what we call anchor projects or more greenfield, where it's very capital intensive, the yields on those types of deals are sort of mid-single digits. That's, you know, 5, 6, 7, 8% type of yield on average that we talk about for those anchor deals. As that backlog of deals has wound down over the last couple of years, we have very intentionally moved more towards leasing up the fiber that is built to support those anchor deals, because that's where, over the long term, the return to our investment really ramps up and then. The types of yields that we're seeing on lease up, we do have a slide that we include in our earnings deck that we've kind of tracked quarter-over-quarter for a while to let people see sort of how the lease up math works. Whereas you're in the kind of mid-single digits on an anchor deal, you know, over time, those markets that we're tracking have gotten to a combined yield when you look at lease up of over 20%, so now 21%. If you look at just our enterprise business in Q2, average yield was over 50% for that new business. Very attractive rates of return coming in on that lease-up business. You know, when we think about rising interest rate environment, obviously that cost of capital goes into our calculus of the way we analyze deals. You know, for anchor deals that are in that mid-single digit area, you know, we're gonna be pickier, I think. You know, our cost of capital rising, which doesn't mean we wouldn't do an anchor deal in that same range. The functions of those anchor deals, you know, not every anchor deal is created equal. You know, we'd wanna make sure that, you know, is that anchor deal adjacent to our existing markets where we can get some synergies? What does the lease up opportunity look like around that anchor deal? We'd wanna look at some of those things to make sure we're making., the cost of capital certainly comes into the equation for sure. Yep. We'll get back to cost of capital and balance sheet in a little bit, but I wanted to talk about, you know, some of the new revenue opportunity with DISH. On the 2Q call, I think you talked about DISH being a bit more active than you were initially expecting. But your markets probably fit more to the build that DISH has coming in 2023 and 2024, 'cause they have to get to that 70% pop coverage. What kind of activity levels should we be expecting from DISH? It sounds like they were sort of ahead of pace, but was that just timing related? How quickly does that scale in the 2023, 2024 timeframe as they meet their build out commitments to the FCC? . Right. Well, you're right in that, Anthony. Our Tier 2, Tier 3 markets are a little further out their deployment schedule in terms of the calendar that they're trying to meet in terms of coverage. So our deployment for them is, it's skewed a little later in that curve. We haven't disclosed the amount of orders or our expectations with regard to orders. We've only sort of talked about it generally, saying that they've been active and that we've been very pleased with the orders that are coming in. But now as we're coming into the back half of 2022, we're actually starting to deliver services, and we expect that to continue. We expect order activity to continue as they get further into their deployment. We think there's more to come. We expect them to continue to be active with us in terms of orders. Now we're really starting to ramp that in the back half of this year. There's a very minimal effect that DISH will have on our 2022 financials. It's more of a 2023, 2024. They're taking delivery of those starting to really ramp back up some of those. Understood. We've gone about half the time and we haven't mentioned Windstream yet. I guess we're gonna- That's amazing. That's probably the first time that's happened to you in a while. I appreciate that. We're also gonna bring that to an end and Okay. All right. Hopefully talk about it a little bit. Okay. I guess probably in something that benefited neither side, a lot of maybe the debate or the discussion that you and Windstream and others had kind of made its way public. The market perceived a very big bid-offer spread, to use market terminology, on where people saw the renewal coming. It's obviously a critically important contract for both sides. I guess, can you just give us. It was being debated publicly, which is probably, again, not a benefit to anyone. Can you maybe just give us an assessment of where that relationship stands today, you know, as the two companies work towards it? Given that we're talking about a renewal that is contractually so far off into the future, how you narrow that gap of where it was perceived that the two sides were to bring that more towards some kinda consensual resolution that takes the topic off the table for both companies? Well, I think it definitely wasn't our choice to debate all of that publicly. I don't think it helped either side, and I do think it just created confusion for both companies in the marketplace. Certainly wasn't our choice to debate all of that publicly. To a large degree, it's really a red herring. I mean, not really a bid-ask spread that now that we've got to come to, you know, terms on and meet in the middle. We negotiated in 2020 as part of the settlement through all of the mechanics of how the lease renewal is gonna work. There's a very specific path that it's gonna take and a timeframe where all of that's gonna play out. At the end of the day, it really doesn't require us to agree. There's an arbitration that involves third-party Big Four accounting firm appraisers that come in and do the work and determine a fair market value for that lease. You know, we've had to explain a lot of the detail of that and get in the weeds with that with certain constituents. You know, maybe that'll be a good thing in the end because I think our position has really resonated with those constituents you know where we've gone through that process and explained the process that'll transpire. You know, that'll all take care of itself out into the future. Obviously, it's very important for both of our businesses. We are confident that it's gonna be a fair market value for the renewal. I can't sit here and tell you what fair market value is gonna be in 2030, but we believe the trends are in our favor. We believe the precedent set by previous appraisals bodes well to having a good outcome for us to renewal. You know, that confusion, that cloud out there isn't great for either of our businesses. You know, the right opportunity to clear some of that up ahead of 2030, say it's off the table. There's not really a real negotiation going on right now. Sure to set that rate All that is is the mechanics of that are set for the. I guess given that it is, it had a negative impact on your cost to capital, and you just mentioned that obviously cost to capital is an important influence. As you think about deals that you would go do because now you have this comparative yield that is comparing against your cost to capital. Is there a scenario or a priority where you just really do wanna try to pull this forward? I know there's some mechanisms set up that have it take, you know, place in 2030, but it would seem like it might be certainly in your best interest, even with a maybe not a perfect outcome, to bring it forward and just take the topic off the table. . I mean, I don't know. I don't want to say too much there and get ahead of ourselves. I mean, from the terms of our cost of capital, we did a lot of work in 2021 to push out maturities to lower our cost of capital. We had a really good outcome there. We did that, I think very well. Most of our debt is fixed debt. We've got some maturities coming up and small maturity in 2024 with our converts. The next big one is 2025. We've got some runway, some ability to be opportunistic with regard to that. We really haven't seen our cost of capital rise in a measurable way as a result of public back and forth that's going on. Certainly uncertainty around 30 and that renewal doesn't help. We're confident in our ability to access the public debt market as needed. Right now, it's not a great time. To opportunistically go out to market, but time we think stabilize and have a little runway. 2025 is coming. Coming faster than, you know we all know. As a CFO, you probably think about that every day. I do, actually. I do think about that, and sometimes every night, you know? Right. That's kind of a good segue to talk about M&A more broadly. I think you guys have used a term on your call of transformational M&A. I think that's been an objective from the time that, you know, sort of CSAL was created. You know, full annuity of diversification of revenue streams and geographies and product lines. There have been some assets that have traded in the market recently, some small, you know, some bigger. I'm thinking about, like, the Sprint. network transaction. What will it take, or I guess what are you looking for as you kind of evaluate acquisitions about when is the right time to push the button, you know, kind of push the chips in, whether it's using the balance sheet flexibility that you may have left? Or I don't know, there are a lot of constraints on that, but to really push for something transformational. . Well, in terms of transformational, I mean, we've talked a lot about transformational deals. We haven't given specific color to the market about exactly what that might look like. We have talked a little bit about separating, the assets and work that we've done to validate that they can be separated tax efficiently. We've talked a little bit about that, in the context of transformational. I think transformational can take on multiple different avenues. Some of that might be additive, some of it might be more, you know, subtractive in splitting the assets. The credit markets come into play heavily in some of those sort of scenarios and not so much into other scenarios. I think it just kinda depends on how that transformational deal evolved, and what it looks like. We did talk at the end of our second quarter about how the credit markets right now are not really conducive to going out and getting a lot of new things for. That does put some limitations on, or raises the cost really of some of those options on the spectrum. It definitely comes into the equation. I was speaking to someone earlier and they made the point that the cost of capital to the buyer sort of adjusts before the purchase price you would have to go pay, kind of adjusts lower to reflect the higher cost of capital. Are you still seeing multiples in line with where they had been historically and not necessarily reflecting that capital is just more expensive for any buyer to go tap than it was certainly even just six months ago? Well, we're seeing elevated multiples and a lot of demand for fiber assets. You know, whether it's infrastructure funds that are pushing to do more in terms of digital, adding more digital assets to their structure, to their portfolios or other, we see demand as high and remaining high. We think multiples for quality fiber assets, and not every asset is created equal, but for quality fiber assets, a dense fiber, a fiber with, you know, that lease-up potential owned, a lot of on-net possibility, we think those. That's the kind of fiber network we have, and we think there's a lot of, there will be continued interest and a lot of value placed on that type of an asset. Now, intellectually dishonest if I said that interest rates don't matter and the cost of financing doesn't affect valuation. Obviously it does. Whether it's 17x or 18x or 20x or we saw deals recently advertised as 25x- Right In this space. You know, we think multiples are gonna, and demand for fiber assets are gonna hold up. Nobody has a crystal ball. I don't mean to lead the witness, but would that lend itself more to what you were just mentioning a moment ago, where perhaps crystallizing some of that value where you collect the valuations to remain high, might make more sense for you than going paying those multiples. In other words, whether that's separating the businesses to more clearly identify that kind of value within Uniti? . No, I think we've been pretty transparent about the fact that we think our equity is undervalued. I think there's what we've kind of been referring to as a conglomerate discount. You know, some people talk about it being an overhang from, you know, from Windstream, scenarios. You know, that's a reality. I think it's incumbent upon us to figure out how to break through that and unlock that value for shareholders over time. Transformational M&A, we think is one logical way that we could do that effectively. The markets are conducive and the demand is there. We think the demand is there, maybe markets aren't as conducive right now. We do have the ability to be patient. Our core business is doing really well. We're gonna continue to take cash flow from that triple net lease at Windstream and a couple of others that the triple net lease that you know you did in the high single digit multiples, say, and take it and come over here and invest it in our fiber business that's in that- 17 to 20 18-20 times business. We think that's a good play long term. We're gonna continue to do that, and that business is doing really well. We think we have really one of the premier fiber assets in the country. Invest in that and the right transformation to unlock value, then we're interested. Value through organic growth. In terms of other M&A, I think we're gonna continue to, but we're gonna be disciplined. If valuations are high or if debt isn't or other sources of funding are not cost-effective to tap in, we don't have the imperative to do M&A that we once had. Still wanna continue to do types of M&A that are accretive and help us diversify, but only when they make sense. Let's to finish maybe with talk of capital allocation how you think about kinda allocating capital, you know, across the business. You talked about what the yield is you think you'd get on CapEx between anchor tenant and then additional lease-up deals. I guess I'm thinking more about, you know, your broader capital allocation policy as it relates to dividends. I think you've got leverage down to a level where some of the restrictions fall away a bit. How are management and the board thinking about potentially flexing some of that capital allocation now that you have fewer restrictions versus reinvesting that, you know, in what could be pretty good yielding opportunities on organic growth? You're right. We did announce after second quarter that we had hit the reversion covenant date on some of the covenants on our bonds that restricted our dividend to the minimum level necessary to keep our REIT status, so 90% of REIT taxable income. That basically freed the board to consider paying a higher dividend going forward. Can't go lower. Right We were already at the minim That is something that's under consideration. That's a board decision, and I don't have an announcement today about any change in trajectory or a dividend level. They have that option now to do that. They're considering that. We also, as you would expect, as your question sort of indicates, we're considering that in the context of our entire capital allocation strategy, liquidity and all those other things. Go into it. Our yield marketplace, you know, sometimes how much it's gone up. Sure. You know that we were for a while on that 5%-6% yield, now maybe 6%-7%. Right. yield. That compares very favorably to our REIT. Here's another benchmark that we've got out there. I mean, that's one thing that we would look at. I think from a capital allocation standpoint, investing in the business, I think, is our highest priority. We're gonna create the most value long-term for shareholders. That's our highest priority, and then we'll look at the dividend, decide what to do about that, and we'll have an announcement. Yep. Last question is just, I guess, the evolution of the capital structure over time. Your capital structure, you mentioned there's nothing sort of really that needs to be done. There's some things that are callable, like the higher coupon notes, 7 7/8% at some point. You'll have a credit facility to redo at some point, I think, revolver extension. That's right. Some of that other stuff. What is the? Is that the right sequence of events to think about? Then I think you had talked at one point about, you know, an ability to get net leverage down much lower than where it is today. Can that all happen organically, or do you need some of these other things to kind of click to get to that? I think maybe it was 2.5 or 3x range over the long term. We did mention sort of that organic trajectory, kind of getting to free cash flow positive and somewhere around 2025 across all of our business. Then, you know, if you kind of play that out towards 2030, held other things constant, which is what that could do to sort of capital structure and leverage ratio. It's kind of theoretical. I don't anticipate we would target to operate in that. 2-3 times leverage. I think operate higher than that more efficiently and higher RPM for the business. I mean, we're comfortable where we are in that 5.5-6 times ratio. We're good there, and we can continue to operate there. I think over time, depending on the market backdrop, depending on, you know, investor appetite for risk and all those other factors that go into it, you might see us gradually work our way lower that to maybe something in the 4-5 range. I think, you know, for now, we anticipate continuing to operate in the 5.5 leverage area. The next priority for you really would be, you know, extending the revolver and creating. More runway around, you know, the liquidity and revolver capacity of the company. . Because of the work that we did last year when, you know, making hay when the sun was shining you know, we don't have any immediate maturities. Like I said before, 2025 is coming probably faster than any of us would like. We are certainly thinking about that on a daily basis. 2025 is when our, the $2.25 billion dollar seven and seven-eight bond- Maturity. mature. Obviously, we're gonna stay way ahead of that maturity. We're looking to be opportunistic in the market. Not a lot of opportunistic issuances right now. No. Things will get better you know, that's our highest coupon. We'd like us to lower our cost of capital, but interest rate environment will deal with. We will address that certainly when the time is right and well before. Well, we have reached the end of our allotted time. Paul and Bill, I wanted to thank you both very much for being part of the conference. Thank you very much. Thanks. Good to be here. Thank you. Thank you, everyone.