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Uniti Group books 10.4% YOY increase in Q4'17 AFFO; signs $95M fiber asset deals

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Uniti Group books 10.4% YOY increase in Q4'17 AFFO; signs $95M fiber asset deals

Uniti Group Inc. reported 2017 fourth-quarter funds from operations attributable to common shareholders of $113.0 million, or 64 cents per share, a 35.0% increase in the aggregate from $83.7 million, or 54 cents per share, in the 2016 fourth quarter.

For the quarter, AFFO increased 10.4% year over year to $112.4 million, or 64 cents per share, from $101.8 million, or 66 cents per share.

For the full year 2017, the communications-focused real estate investment trust disclosed a 1.9% year-over-year rise in FFO. In the aggregate, results totaled $352.5 million, or $2.09 per share, compared with $346.1 million, or $2.27 per share. AFFO for the full year amounted to $424.8 million, or $2.51 per share, a 6.6% increase from $398.5 million, or $2.61 per share, from a year ago.

For full year 2017, the S&P Capital IQ consensus estimate for FFO-per-share was $2.09 and the consensus estimate for AFFO-per-share was $2.51. For fourth quarter 2017, the S&P Capital IQ consensus estimate for AFFO-per-share was 64 cents.

For the year ended Dec. 31, the company expects FFO per share attributable to common shareholders in a range of $2.12 to $2.17, while AFFO per share is expected between $2.52 and $2.57.

Uniti said it has signed deals to buy fiber assets from U.S. TelePacific Holdings Corp., or TPx, for $95 million in cash. The company will purchase and leaseback to TPx 38,000 fiber strand miles spread across California, Nevada, Texas and Massachusetts on a triple-net basis.

The company will also buy and have exclusive use of 7,000 fiber strand miles in Texas, adjacent to its southern network footprint. Uniti will also have nonexclusive rights to market certain of the fiber assets in California and Massachusetts on behalf of TPx.

The deals are expected to close in two tranches, with the non-California assets projected to close in the second quarter and the remaining California assets to close in the third quarter.

The initial lease term will be 15 years with five, five-year renewal options at TPx's discretion, Uniti noted, adding that it expects to use borrowings on its revolving credit facility to finance the transactions.