UNIT - NASDAQ

Welcome to Uniti Group's Fourth Quarter 2022 Conference Call. My name is Jonathan and I will be your operator for today. A webcast of this call will be available on the company's website, www.uniti.com, beginning today, and will remain available for 14 days. At this time, all participants are in a listen-only mode. Participants on the call will have the opportunity to ask questions following the company’s prepared comments. The company would like to remind you that today's remarks include forward-looking statements and actual results could differ materially from those projected in these statements. The factors that could cause actual results to differ are discussed in the company's filings with the SEC. The company's remarks this morning will reference slides posted on its website, and you are encouraged to refer to those materials during this call. Discussions during this call will also include certain financial measures that were not prepared in accordance with Generally Accepted Accounting Principles. Reconciliation of those non-GAAP financial measures to the most directly comparable GAAP financial measures can be found in the company's current report on Form 8-K dated today. I would now like to turn the call over to Uniti Group's Chief Executive Officer, Kenny Gunderman. Please go ahead, Mr. Gunderman.

Thank you. Good morning, everyone, and thank you for joining. Starting on slide three, I wanted to briefly cover our key accomplishments in 2022 and our priorities for 2023. I'm very pleased with how we executed on our disciplined growth plan throughout 2022. The growth of broadband continues to accelerate and is being fueled by fiber. Uniti's core IP backbone peaked at around 30 gigs in 2017 and grew to approximately 100 gigs just before the pandemic. As of last week, our IP backbone peaked at 300 gigs, a 10 times increase from just six years ago. We expect this acceleration to continue across both our IP and transport networks, especially given that three out of our four wireless carriers, where some of our largest customer -- consumers of capacity are just beginning to upgrade towers from 1-gig to 10-gig. As we said many times before, we do not have a lack of demand in our industry. However, profitable demand is key. In 2022, we had record levels of consolidated new bookings and gross installs, but as importantly, the bookings and installs were balanced between anchor and lease-up and wholesale and non-wholesale. Along with sub-100 day mean time to deliver on our installs and our industry-leading monthly churn of 0.2%, Uniti is demonstrating the outstanding economics of shared fiber infrastructure. Wholesale and enterprise recurring revenue were up 10% and 13%, respectively, in 2022 from the prior year, while dark fiber lease-up at Uniti Leasing was up over 50% from the prior year. On an overall basis, we continue to target and deliver mid-single-digit top line growth, increasing adjusted EBITDA and declining capital intensity. 2022 was also an important year with respect to positioning Uniti to control its own destiny. We recently completed two successful financings that pushed out our most meaningful debt maturities, while also providing additional liquidity to an increasingly positive free cash flow trajectory. Combined with our organic growth runway and our steady performance, we now have a growth plan that is virtually fully funded aside from potential future refinancings. As we turn to our priorities for 2023, many remain the same as they were in 2022. We're still focused on driving high margin recurring revenue through lease-up on both our metro fiber and on our long-haul routes to span the country. We'll selectively light more and more fiber with anchor economics with a clear path to lease up. We'll closely monitor and adapt to macroeconomic conditions and potential supply chain and labor challenges, and we remain confident we're in a good position to withstand any disruptions that may occur. As it relates to M&A, we'll continue to take a disciplined approach and do not expect any transactions in the immediate future given the current interest rate in macroeconomic environment. In the meantime, we're focused on delivering strong organic growth and operating results, while creating value for our stakeholders. Turning to Slide 4. Our strategy continues to focus on buying and building mission-critical fiber infrastructure and in turn, leasing that infrastructure to anchor customers as well as to additional lease-up customers, while driving cumulative cash yields well above anchor yields. This strategy has resulted in Uniti becoming the second largest independent fiber operator in the country. We're often asked what distinguishes Uniti from other facilities-based fiber operators, so I'd like to highlight a few. Many other sizable fiber companies were built through dozens of company acquisitions that come with integration challenges and some percentage of legacy revenue. This often leads to years of challenges on growth, elevated churn and profitability. Conversely, Uniti has only acquired three meaningful operating companies in its history, which are now fully integrated and brought over no legacy services. However, through additional sale leaseback and other asset acquisitions, we've acquired over 100,000 fiber route miles that come with one or two anchor customers. Said differently, 75% of our network was acquired with no legacy services, no integration challenges and substantial amounts of unused fiber for lease-up. As Slide 5 demonstrates this substantially underutilized fiber network is helping drive our shared infrastructure economics. We're driving cumulative cash flow yields today of 23%, a more than threefold increase from the anchor yields on these projects. Slide 6 demonstrates the second distinguishing characteristic. The majority of our revenue is wholesale in nature, which comes with longer-term contracts, lower churn and less required overhead. As a result, our business and underlying performance are less susceptible to macroeconomic conditions. The vast majority of these wholesale customers of the large wireless providers, hyperscalers and international and domestic carriers. These carriers are purchasing large pipes from Uniti to connect towers, small cells, data centers, fiber-to-the-home and intercity pops, which further highlights that our business is diversified across numerous fiber use cases. These use cases are all on ramps that are driving traffic into our core network. Turning to Slide 7. Scale matters in fiber, especially with a wholesale heavy business like ours. Having an owned national network is a meaningful competitive advantage for Uniti, especially given that we take billions of dollars in many years to build a new national network. We estimate there are only five truly owned national networks and two independent fiber providers with national networks in the US today with Uniti being one of them. Thus, our ability to deploy dark fiber and wave services present Uniti with a unique growth opportunity with minimal competition. Today, dark fiber in North America is an approximately $1.5 billion annual market opportunity and is expected to grow about 10% annually over the next several years. A growing component of our wholesale strategy or wavelength services, which represent a $2 billion annual revenue opportunity today and are expected to grow 7% over the next several years. We're selectively lighting more and more long-haul routes to provide wave services and capitalize on growing demand, while maintaining the same discipline on anchor and lease-up economics. For example, we recently signed a long-term contract with a large global Internet provider, offering long-haul dark fiber connectivity over 3,100 route miles to premier data centers located in 12 cities within the Central and Southeastern US. The total contract value of this deal was approximately $65 million, making it one of the largest customer contracts in Uniti's history. We expect these routes to be delivered throughout this year and next. As I mentioned earlier, our wholesale heavy model produces economics that are very attractive with high margin, passively managed revenue, virtually no churn long-term contracts that routinely have escalators and minimal CapEx requirements. Slide 8 demonstrates third distinguishing characteristic of Uniti’s, which is our balanced approach to bookings. Although the wholesale business will always be our focus, disciplined and control enterprise strategy can drive enhanced profitability with minimal CapEx and low churn, especially if there are no legacy services. While greenfield bookings drive growth with anchor customers and expand the network in a cost effective manner for new lease up opportunities, the majority of new bookings continue to be leased up in nature and are substantially less capital intensive. Turning to slide 9, our fourth distinguishing characteristic is that our enterprise strategy is highly disciplined and regional in nature. As you can see from the map, we're only offering enterprise services in approximately 30 metros, concentrated in the southeast. Our product set is simple. All sales are on our owned and controlled dense metro fiber network and we have no legacy services such as legacy voice or TDM. The majority of operational expenses within fiber businesses are employees and off-net fiber purchases, because we are selling largely on-net products and services and the majority of our employees including sales, field techs, site acquisition, construction, maintenance and others are concentrated in a certain geographic area, we're able to maximize efficiency, and therefore, drive 50% plus cash yields on our enterprise lease up sales. In addition, our local brand is substantially enhanced in this region and our enterprise monthly churn is industry leading at around 0.7%. As a result of our consistent strong bookings activity, enterprise recurring revenue was up 15% during the quarter, while gross install MRR was up 30% from the prior year. Equally exciting and as we mentioned before, we own dark metro fiber in about 300 markets nationwide, which represents terrific capital and margin efficient growth potential for enterprise, wireless backhaul, and even small cells. With that, I'll now turn the call over to Paul.

Thank you, Kenny. Good morning, everyone. I'd like to begin by reviewing our fourth quarter and full year 2022 performance, followed by an overview of our 2023 outlook. As Kenny highlighted, 2022 was an outstanding year for Uniti from a performance perspective. Our bookings and growth installs have never been higher and we expect these high levels to continue throughout 2023 as the demand for our product and service offerings remain strong. We are also recently completed two refinancing transactions that effectively pushed out our significant near-term debt maturities by five years and added additional liquidity, fortifying our balance sheet and enhancing our ability to weather any financial market uncertainty that we'll cover in more detail in just a bit. Our 2023 outlook reflects these trends and the continued strength we're seeing in our fiber business today. Finally, I will end with additional commentary on our current balance sheet and capital structure. Please turn to slide 10, and I'll start with comments on our fourth quarter. We reported consolidated revenues of $284 million, consolidated adjusted EBITDA of $229 million AFFO attributed to the common shareholders of $150 million and AFFO per diluted common share of $0.44. Net income attributable to common shareholders for the quarter was approximately $41 million or $0.13 per diluted share, which includes a $24.5 million goodwill impairment charge related to our Uniti Fiber segment that was driven by an increase in the macro interest rate environment. At Uniti Leasing, we reported segment revenues of $209 million and adjusted EBITDA of $203 million. Excluding an $8 million one-time non-cash adjustment in the fourth quarter of 2021 that related to the straight line revenue associated with dark fiber IRU contracts and other assets we acquired from Windstream as part of the settlement agreement. Revenue and adjusted EBITDA grew 3%, respectively in the fourth quarter of 2022 compared to the prior year period. Accordingly, Uniti Leasing achieved an adjusted EBITDA margin of 97% for the quarter. Turning to slide 11. Our growth capital investment program continues to provide positive results for Uniti. Over the past six years, our tenant has invested over $1 billion of tenant capital improvements in our network. Uniti continues to invest its own capital and long-term value-accretive fiber largely focused on highly valuable last-mile fiber, including fiber in commercial parks and fiber-to-the-home. Collectively, these investments have resulted in 2,800 route miles of newly constructed fiber and 23% of the legacy copper network being overbuilt with fiber. Based on the investments made to date and our expectation that Windstream will utilize most, if not all, of the GCI program, we expect that nearly half of the legacy copper network will be overbuilt with fiber by 2030. During the fourth quarter, Uniti Leasing deployed approximately $85 million towards growth capital investment initiatives, with the majority of the investments relating to the Windstream GCI program. These GCI investments added 1,950 route miles of fiber to Uniti's own network across several different markets. As of December 31, Uniti has invested approximately $544 million of capital to-date under the GCI program with Windstream, adding around 15,450 route miles and 755,000 strand miles of fiber to our network. These investments will be added to the master lease at an 8% initial yield at the one-year anniversary of Uniti making such investments. They are subject to a 0.5% annual escalator and result in nearly 100% margin. The investments we have made to date will ultimately generate approximately $44 million of annualized cash rent and increase the overall value of our network. At Uniti Fiber, we turned over 236 limp back haul dark fiber and small cell sites for our wireless carriers across our Southeast forefront during the fourth quarter. These installs add annualized revenues of approximately $2.6 million – for the full year 2022, we installed over 1,100 lit backhaul, dark fiber and small cell sites, adding approximately $12 million of annualized revenue. We currently have around 1,300 lit backhaul, dark fiber and small cell sites remaining in our backlog that we expect to deploy over the next few years. This wireless backlog represents an incremental $12 million of annualized revenues. At Uniti Fiber, we reported revenues of $75 million and adjusted EBITDA of $32 million during the fourth quarter, achieving margins of 42%. Revenues were slightly lower than expected due to the timing of non-recurring equipment sales and installs, while adjusted EBITDA was above expectations due to lower-than-expected costs relating to the early termination of legacy spread sites. Uniti Fiber net success-based CapEx was $41 million in the fourth quarter and was higher than originally anticipated due to the timing of equipment purchases relating to double projects. Given the continued challenges affecting the industry supply chain and lengthy delivery times, we expedited the purchase of certain equipment during the quarter to ensure that we would meet the delivery time frames of our customers. We also incurred $3 million of maintenance CapEx during the quarter. Please turn to slide 12, and I'll now cover our 2023 guidance. Our 2023 outlook includes the estimated impact from our recent convertible unsecured notes offerings and related redemptions. Our outlook excludes future acquisitions, capital market transactions, and future transaction-related and other costs not specifically mentioned here in. Actual results could differ materially from these forward-looking statements. Our full year outlook for 2023 includes the following for each segment; beginning with Uniti Leasing, we expect revenues and adjusted EBITDA to be $850 million and $825 million respectively at the midpoint, representing adjusted EBITDA margins of approximately 97%. Revenue and adjusted EBITDA each include $33 million of cash rent associated with the GCI investments, and $21 million relating to the straight-line rent associated with the Windstream master leases and GCI investments. We expect to deploy to $216 million of success-based CapEx at the midpoint of our guidance, of which $237 million relates to estimated Windstream GCI investments. Turning to slide 13, we expect Uniti Fiber to contribute $314 million of revenue at the midpoint with core recurring revenue is expected to grow 6% from the prior year. Slide 14 further emphasizes this point as we expect our run rate monthly recurring revenue and Uniti Fiber to grow between 6% and 8% in 2023. This strong growth demonstrates our continued success and executing on our lease-up strategy that leverages our existing dense Southeast fiber footprint. As it relates to DISH, we saw strong levels of bookings throughout 2022 and as previously stated, the revenue impact will begin to be realized during 2023. Although we do expect continued healthy bookings from DISH in 2023, we expect they will come at a slower pace than in 2022. Core non-recurring revenue is expected to be slightly down from the prior year due to lower ETL fees in 2023 when compared to 2022, partially offset by higher equipment and install revenue. As you may recall, 2022 was a peak year for ETL fees due to Sprint-related churn. We expect ETL fees in 2023 to be approximately $15 million compared to $24 million last year. For full year 2023, we expect adjusted EBITDA at Uniti Fiber to be $125 million at the midpoint. Adjusted EBITDA based on core recurring revenue is expected to be up 5% from the prior year, while non-recurring adjusted EBITDA is expected to be lower due to higher equipment and install cost. Overall, we expect adjusted EBITDA margins at Uniti Fiber to be approximately 40% for the full year 2023. Net success-based CapEx for Uniti Fiber this year is expected to be $120 million at the midpoint of our guidance, a 10% decrease from levels in 2022. Turning to slide 15. For 2023, we expect full year AFFO to range between $1.36 and $1.43 per diluted common share with a midpoint of $1.39 per diluted share. AFFO in 2023 will be impacted by incremental interest and diluted shares relating to our recent convertible and secured note refinancing. Excluding the impact of those transactions, 2023 AFFO would have been $1.78 per diluted share. On a consolidated basis, we expect revenues to be $1.2 billion and adjusted EBITDA to be $925 million at the midpoint. Our guidance contemplates consolidated interest expense for the full year of approximately $550 million, which includes a $21 million write-off of deferred financing costs and $44 million of early repayment premium in the first quarter of this year related to the redemption of our 7.875% [ph] senior notes due 2025. Corporate SG&A, excluding amounts allocated to our business segments, is expected to be approximately $32 million, including $7 million of stock-based compensation expense. We expect our weighted average diluted common shares outstanding for the full year 2023 to be around 291 million shares compared to 268 million shares in 2022, reflecting the full year impact of the incremental diluted shares relating to the accounting of the new convertible notes using the if-converted method. As a reminder, guidance ranges for key components of our outlook are included in the appendix to our presentation. On slide 16, we have provided a tabular reconciliation of our full year 2022 results to our 2023 outlook, which summarizes the organic contribution from our core operations and the impact from recent financing activities. Turning now to our capital structure. During the fourth quarter, we issued $306.5 million of 7.5% convertible senior notes due December 2027, to repurchase approximately $207 million of our 4% exchangeable notes due 2024 at a discount. The initial conversion price of the convertible notes is approximately $7.29 per share, representing a premium of 20% to the closing price of the common stock of the company on the date of pricing. In connection with the convertible notes offering, Uniti entered into privately negotiated capped call transactions with certain financial institutions that effectively increased the conversion price to approximately $10.63 per share. On February 14, we closed on the issuance of $2.6 billion of 10.5% senior secured notes due February 2028. The proceeds from the offering will be used to redeem all of the outstanding 7.875% senior secured notes due 2025 and repay outstanding borrowings under the company's revolving credit facility. At year-end, we had approximately $356 million of combined unrestricted cash and cash equivalent and undrawn revolver capacity. As of today, we have essentially repaid all of our borrowings under our revolver and have almost $500 million of undrawn capacity under our facility. Our leverage ratio at year-end stood at 5.72 times based on net debt to last quarter annualized adjusted EBITDA. On February 23, our Board declared a dividend of $0.15 per share to stockholders of record on March 31, payable April 14. With that, I'll now turn the call back over to Kenny.

Thanks, Paul. Despite the current macroeconomic backdrop, we continue to prioritize investment in our core business. We currently have approximately $7 billion of revenue under contract with an average term remaining of eight years. Given the wholesale-heavy nature of our business, majority of this revenue is passively managed in the form of triple net or dark fiber MLAs. As a result, the operating costs associated with this revenue is de minimis, which results in a very cash flow-rich business over the mid to long term. As slide 17 illustrates, the investment from this cash flow will lead to a more sizable and valuable fiber business over the next several years. We also expect to be free cash flow positive by 2026 and generate cumulative free cash flow of over $1 billion within the five years -- within the five-year period ending in 2030, if we maintain our current dividend and approximate level of annual capital investment. This trajectory leads to substantial deleveraging, resulting in net leverage between 4 to 5 times and roughly doubling the size of our fiber business by 2030. Our fully-funded business plan, no significant near-term debt maturities and long runway for profitable growth afford Uniti, the ability to create value for our shareholders each day. With that, operator, we're now ready to take questions.

Certainly. [Operator Instructions] One moment for our first question. And our first question comes from the line of Bora Lee from RBC. Your question, please.

Thank you for taking the call and the question. So given the current macro environment, are you seeing any changes in wholesale demand with some players stopping to shift from CapEx to OpEx?

Hey, Bora, not really. I think -- so we're selling wholesale to the large wireless carriers, the hyperscalers, a lot of big international and domestic carriers. And so the spending patterns are all going up and the differential between whether they're prioritizing spending capital versus OpEx is very customer specific. And frankly, in some cases, it's more route specific or market specific. So -- but I wouldn't characterize any of that -- any of those observations as being related to the macro environment.

I'll also add to that as well, Bora, that we're flexible in our terms with our customers. So not -- in addition to IRUs that come with large upfront capital expenditures for customers. We also do monthly leasing and we also offer lit services that fit right into somebody who prefers adding OpEx over adding capital expense in the near term. So I think we also have the ability to be flexible with our wholesale customers and provide services and contracts the way that fit their capital demands.

Right. And then a follow-up, we've heard some others in the communications infrastructure space talk about customers taking longer to make a buy decision, as they either do some more cost analysis or require more approvals from additional parties internally. Have you -- what have you been seeing in terms of how long it takes customers to actually make decisions?

Yes. We've heard of that anecdotally, Bora. And I think we certainly hear of that around the enterprise business a little bit. I think -- but when it comes to our big wholesale customers, we haven't really seen that. I think that the -- there's a big push among our wireless carriers to upgrade to 10-gig. So that's a capital-intensive approach. And we've seen at least particularly among one carrier in particular a real push to get that done sooner rather than later. There's a lot of intercity capacity being acquired by the hyperscalers and just appears to be no ceiling on their need for capacity, particularly intercity capacity. So I don't think that any sort of decisions being made around purchasing, we don't -- we wouldn't attribute them to macro environment issues is more just network planning and typical decision-making from our vantage point.

Okay. And if I could just squeeze in one last one. Thank you for that long-term target slide, going into that a little bit. Can you provide some additional color for on the revenue side, how you see the top, maybe top two or three drivers and how you see that -- that revenue mix shifting over time? Thank you.

Yeah, I'll comment on it, and then ask Paul to comment on it, too. But we thought that slide would be helpful just to give people some data to anchor around. And we were -- we're confident putting it out there, because we just see the growth trajectory of the business continuing, and we've said it many times, we just have a long runway for profitable organic growth. And ultimately doubling the size of the fiber business or better is absolutely within our within our sites. And really, and I mentioned it a number of times in our prepared remarks to highlight it, but we just -- we don't have any legacy services. And a lot of carriers, a lot of operators, lot of infrastructure providers have legacy services that weigh down their growth, or heighten the churn, and we don't have that. And so when we look at our different businesses, whether it's dark fiber or lid, fiber-to-the-tower, small cells, enterprise, e-rate [ph], government, those businesses are all growing. And it's just a question of to what extent? Some are growing at mid single digits; some are growing at, as we said in our prepared remarks at 10% to 20%. But when we started to look a little bit longer term, several years out and the business starts to level out, we think -- again, we think the mid-single-digit, blended top-line growth is what we expect, and again, some businesses will be more, some will be less but generally in that zip code, and the mix of business will continue to be heavily dependent, reliant, weighted towards wholesale, that's going to continue to be our focus. That's where we think that the optimal economics are that's where we're driving good returns from the wireless carriers, the hyperscalers, the international and domestic carriers. It gives us the ability to stay agnostic and diversified across all the different fiber use cases. So whether it's 5G or some other version of mobile broadband or fixed wireless or fiber-to-the-home or intercity capacity, data center connectivity, it doesn't matter to us. All of those are trends that are driving growth in our business, especially if we stay tethered to wholesale, which we plan to do, and there will be a nice mix of enterprise in there to help drive optimal economics and lease-up in the business. But I think, kind of, roughly 75% to 80%, if not more focus on wholesale and the rest on enterprise and government is what we're looking at.

Yeah, I would agree with those comments, Kenny. I don't have a lot to add to those. I think you said those well. I think we expect the macro environment, the demand for bandwidth continued to drive growth. We see that continuing going forward. And we're also a share taker in a lot of our markets, particularly our metro markets. So in addition to just overall demand growth, we expect to be a share taker in that to help drive our growth as well. So in the mix, we expect it to continue to be -- to come from -- as Kenny just add from all of our customer segments and tilted towards wholesale, but was a good contribution from enterprise and metro services.

Thank you both.

Thank you. [Operator Instructions] And our next question comes from the line of Shipra Pandey from Bank of America. Your question, please.

Hey, guys. Sorry, I dialed-in as Shipra. It's David Barden, how are you? So I guess two questions, if I could, Kenny, one for you, one for Paul. I guess, Kenny, when I think about your comments about the immediate future and kind of M&A and where rates are for the time being and kind of the return profile that you've got in your organic harbor business as you describe it. Can you elaborate why being a REIT is still a good idea because it seems like when you look at that slide 17 by the mid year 2030, after dividends, you've managed to skim about $1 billion of free cash flow out of the business. But that will be net of current course and speed more than $1 billion of dividends over that time. Arguably, if the returns are what we're seeing here on this page, it seems like being not a REIT and not paying a dividend and investing those dollars or de-levering with those dollars, any of those uses would be better than the dividend use that you're kind of confined to today. So if you could kind of elaborate a little bit on why this is a good idea to keep doing it. And then, Paul, I guess, I just wanted to make sure we understood. Thank you again for that slide. And I think that, you guys had made some comments about how with the kind of new financing, net of the dividends, net of the payments to Windstream of about $100 million a year for the settlement, net of the GCI CapEx that you're making on their behalf that you might be free cash flow positive by the end of 2025 after the dividend. And so what we're looking at here is really a concentration of cash flows, accumulating between kind of 2026 and 2030, am I thinking about that correct? Appreciate it. Thank you.

Hey, David, yeah, on the question about being a REIT, I think if you believe the cash flow heavy nature of our business, obviously, as indicated by that slide, and particularly once we become free cash flow positive, then the upshot of that, if we're not a REIT is that we're paying taxes, a lot of taxes. And so there is – as you know, one of the benefits of being a REIT is that you're shielding taxes. And so that has always been true of us and will continue to be going forward, especially as we start generating more cash flow in the outer years. So there's that benefit. Secondly, -- and I think to your point about the use of cash and where do you use that extra $1 billion, is it better to pay a higher dividend, or is it better to deleverage, or is it better than investment business or some different combination of all of the above? I think those are all great questions and we're excited about the ability to have that flexibility. And I think as we go forward, we'll make different capital allocation decisions based upon the trajectory of the business, the growth of the business, preference of our shareholders. And I think that's exactly the place where we want to be, to be able to give our board the optionality on things like that. And -- for one, like being levered around 5.5 to 6 times, I think that's an optimal place for us. It always has been. We've always been in that

Yes. Dave, I'll take your second question. I mean the short answer to your question is yes, you're exactly right. You're interpreting that slide correctly. So, -- we do have a clear path to free cash flow positive by the end of 2025. Part of that is continuing to grow the business organically and driving towards lower capital intensity at Uniti Fiber and more low CapEx large deals on the national network at Uniti Leasing. The other piece of that is not depending on operational execution at all. It's really kind of baked into the cake as part of the Windstream settlement. So, those Windstream settlement payments fall off in 2025 and then GCI continues – our GCI funding commitment continues to step down over time, while the GCI revenue from the previous GCI investments continue to step-up. So, those two pieces are more just a factor of time. So, part of it is operational execution and part of it is just sort of baked into the cake of those future commitments.

Perfect. And just one last thing, if I could, Paul, just on kind of your experience through the refinancing process, you guys in Windstream and Windstream's owners have had back and forth over the last year or so for various sundry reasons. And yet, irrespective of that, it seems like the refinancing went pretty smoothly. I was wondering if you could kind of talk a little bit about how relevant, if at all relevant, the backward-looking wrestling with Windstream owners and/or the future kind of lease renewal period came up in the process of kind of nailing down this runway that you now have over the next five years?

Yes. Sure, Dave. Happy to comment on that. I mean, as you're kind of alluding to it, I mean, that refinancing was critical for our business, and we were very pleased with how it got done, especially against the challenging capital market backdrop. It was significantly oversubscribed. It was the largest book order for a bond deal in Uniti's history. So that was something that was very encouraging for the management team here and the board to see that kind of confidence in our plan going forward. And we have the largest number of single -- number of orders. So the interest, the demand for that bond issuance came from a larger number of investors, and we there have participated in that bond issuance before as well. So we also we're very pleased with that. And with that demand, we were able to price at the level -- the tight end of the range and to upsize it to full $2.6 billion, which we thought was a very good thing for the business as well. So, in terms of the renewal rent discussion, it really was not a factor in the process at all. And as a matter of fact, during our marketing of that deal, we actually didn't take a single question from investors on the renewal rent. I'm sure it's something that everybody knows is out there, and they've heard a lot of the commentary that you alluded to, back and forth between the parties. But it just really wasn't -- it wasn't a big factor in getting that deal done. And I think the demand that we receive, the oversubscription, I think, is a good testament to the comfort level that investors had with our plan going forward.

Yes. Okay. Good to hear. Thanks, Paul.

Thank you. One moment for our next question. And our next question comes from the line of Frank Louthan from Raymond James. Your question, please.

Hey, guys. This is Rob on for Frank. So you kind of touched on this first part earlier, but what do you think of the outlook for network expansion? And do you guys think that Cogent's acquisition of the Sprint network could potentially impact you guys if Cogent decides to drop pricing on wavelengths and dark fiber? Thank you.

Good morning, Rob. Yes, we have a lot of respect for Cogent and Dave Schaeffer. I think he's a great operator, and they're a good customer. And we're very familiar with the asset they're acquiring and definitely paying a lot of attention to that. We like the -- frankly, it's a bit of an affirmation of our strategy, right, because it's moving more towards facilities based and moving into long-haul transport dark fiber and waves, right? So we appreciate that affirmation of our strategy by an operator that we have a lot of respect for. I think that the risk of competition is always there. I mean, telecom is a competitive industry. And so we're forever competing with customers in some markets and in other markets they're just customers. And in this case, for the transport -- long-haul transport space, there's really just a few competitors there. I mean, there's

Great. Thank you, guys.

Thank you. And this does conclude the question-and-answer session of today's program. I'd like to hand the program back to Kenny Gunderman for any further remarks.

Thank you. We appreciate your interest in Uniti Group and look forward to updating you further on future calls.