NASDAQ:SBAC SBA Communications Q3 2024 Earnings Report $243.40 +4.90 (+2.05%) Closing price 04/30/2025 04:00 PM EasternExtended Trading$244.18 +0.78 (+0.32%) As of 07:18 AM Eastern Extended trading is trading that happens on electronic markets outside of regular trading hours. This is a fair market value extended hours price provided by Polygon.io. Learn more. Earnings HistoryForecast SBA Communications EPS ResultsActual EPS$2.40Consensus EPS $3.17Beat/MissMissed by -$0.77One Year Ago EPS$3.34SBA Communications Revenue ResultsActual Revenue$667.60 millionExpected Revenue$669.29 millionBeat/MissMissed by -$1.69 millionYoY Revenue Growth-2.20%SBA Communications Announcement DetailsQuarterQ3 2024Date10/28/2024TimeAfter Market ClosesConference Call DateMonday, October 28, 2024Conference Call Time5:00PM ETConference Call ResourcesConference Call AudioConference Call TranscriptSlide DeckPress Release (8-K)Quarterly Report (10-Q)SEC FilingEarnings HistoryCompany ProfileSlide DeckFull Screen Slide DeckPowered by SBA Communications Q3 2024 Earnings Call TranscriptProvided by QuartrOctober 28, 2024 ShareLink copied to clipboard.There are 17 speakers on the call. Operator00:00:00Thank you for standing by, and welcome to the SBA Communications Third Quarter Results Conference. At this time, all participants are in a listen only mode. Later, we will conduct a question and answer session. Instructions will be given at that time. And as a reminder, this conference is being recorded. Operator00:00:26I would now like to turn the conference over to our host, Vice President of Finance, Mark DeRussy. Please go ahead, sir. Speaker 100:00:33Thank you. Good evening, and thank you for joining us for SBA's Q3 2024 earnings conference call. Here with me today are Brendan Cavanagh, our President and Chief Executive Officer and Mark Montagnier, our Chief Financial Officer. Some of the information we will discuss on this call is forward looking, including, but not limited to, any guidance for 2024 and beyond. In today's press release and in our SEC filings, we detail material risks that may cause our future results to differ from our expectations. Speaker 100:01:01Our statements are as of today, October 28, and we have no obligation to update any forward looking statement we may make. In addition, our comments will include non GAAP financial measures and other key operating metrics. The reconciliation of and other information regarding these items can be found in our supplemental financial data package, which is located on the landing page of our Investor Relations website. With that, I will now turn it over to Brendan to comment on the Q3. Speaker 200:01:28Thank you, Mark. Good afternoon. Operationally, the Q3 ended up rolling out largely as we expected with leasing results in line with our outlook and services results a little ahead of our outlook. Foreign exchange rates were a little stronger than our estimates a quarter ago and domestic new carrier activity was up from the first half of the year. All of these items combined to allow us to increase our full year 2024 outlook across all of our key financial metrics. Speaker 200:01:57In the U. S, new business executions were up from the prior three quarters and applications and inquiries have increased as well. We are beginning to see a shift in the makeup of our new business signed up and applications with a growing percentage coming from new lease co locations versus amendments to existing leases. We anticipate this trend continuing into 2025. All of our major customers have significant network needs over the next few years as mobile network consumption continues to grow at a healthy pace. Speaker 200:02:29The limitation of new spectrum availability over the next several years will challenge our customers to meet the demands on their networks through incremental equipment deployment and densification of sites. Our macro tower portfolio should be a beneficiary of this dynamic. Other growth drivers, which we have discussed before, such as fixed wireless access, the incorporation of new generative AI capabilities into handsets, regulatory build out commitments and remaining 5 gs coverage expansion will all contribute to a healthy network investment environment over the next several years. In addition, our customer relationships are strong. We are a trusted and valued partner to each of them. Speaker 200:03:13We are very focused on helping them to achieve their objectives through providing exceptional service and quality. As I mentioned on last quarter's call, we are in the business of long term assets and long term customer relationships. Things don't change much from quarter to quarter, but consistently delivering over time as we have done for the past 35 years is the best way to be our customers' 1st choice provider and ultimately to maximize growth for our shareholders. Internationally, we have adopted the same philosophy and as a result, we are seen as a valued partner to our carrier customers in each of our largest markets. The quarter was solid with international leasing results in line with our expectations and we expect a solid finish to the year. Speaker 200:03:58The broader market internationally though still presents some challenges as we manage through customer consolidations and network rationalizations. However, we see light at the end of this tunnel as the surviving customers are stronger and better positioned to invest in growing their wireless product offerings and their ARPUs. To accomplish this, increased network investment will be required. 5 gs upgrades across all of our international markets are really just at the very beginning and wireless broadband consumption is growing across our markets just as fast if not faster than the U. S. Speaker 200:04:34Overall, we believe our international business will continue to be additive to our organic growth profile over time and the long term prospects are still very good. As part of maximizing the long term prospects of our international business, we continue to strategically review our operations and future potential in each of our existing markets. As I have shared with you before, we believe that in order to create the longest the greatest, excuse me, long term stability and opportunity to maximize growth in a particular market, it is important to be of scale and positioned as an industry leader in that market and to be closely aligned with the leading wireless carriers in the market as well. In alignment with that effort, we are very pleased to share with you today's announcement of a purchase agreement signed with Millicom International Cellular for the acquisition of over 7,000 sites throughout Central America for an initial cash purchase price of approximately $975,000,000 Pro form a for this transaction, SBA will be the largest tower company across the region. We are very excited to increase our partnership with Millicom and to help them grow their business for many years to come. Speaker 200:05:46The assets are located across 5 countries in Central America, increasing SBA scale in 4 of those countries where we already have operations. The assets are anticipated to produce approximately $129,000,000 in site leasing revenue and $89,000,000 in tower cash flow during the 1st full year of operations after closing and significantly all of the cash flow will be denominated in U. S. Dollars. Millicom will be a tenant on each site under a leaseback arrangement in which they have committed to an initial 15 year term. Speaker 200:06:20In addition, as part of the leasing arrangement, Millicom has agreed to extend all of their approximately 1500 existing leases with SBA that exist on our existing assets in the region for a new 15 year term. SBA and Millicom have also entered into a new build to suit agreement under which SBA will exclusively build up to 2,500 new sites in Central America for Millicom over the next 7 years. The transaction is subject to regulatory approvals and customary closing conditions and we expect it will close sometime in mid to late 2025. The Millicom transaction demonstrates one way in which we are carrying out the learnings from our strategic review of each market, increasing our scale in existing markets and establishing long term relationships with the leading customers in those markets. In some markets, however, we may conclude this type of opportunity is not available to us. Speaker 200:07:13In those cases, we will consider divesting markets where we are subscale. One example of this is in the Philippines. Our original strategy in the Philippines was to gain scale through build to suit arrangements with local carriers and continue to grow our portfolio through organic growth, smaller acquisitions and further builds. Unfortunately, over the past 2 years, the market has changed with the leading carriers awarding large build to suit opportunities to tower companies as a component of significant sale leaseback transactions with those tower companies at very high valuations. We have successfully built a valuable portfolio of tower assets in the Philippines, but today there are over 30 independent tower companies in the market and our market share is still less than 1%. Speaker 200:08:00Given our lack of broader presence in the region and a limited path to scale over the near to medium term, we have begun a process to exit the market through a sale of our existing business. We will continue our strategic review of all of our operations and markets with a focus on stabilizing long term cash flows and positioning ourselves to maximize organic growth opportunities in each market. Some markets may grow and others we may exit, but I am confident that each decision will strengthen SBA's prospects for the long term. Pivoting now to our services business, we had a very good 3rd quarter. Revenue was up over 23% from the 2nd quarter and gross profit was up over 33%. Speaker 200:08:42Our carrier customers meaningfully stepped up their construction activity in the quarter, contributing to better results than we had anticipated. As a result, we have increased our full year outlook for services revenue from the outlook provided last quarter. And our full year adjusted EBITDA outlook also benefited from these strong results. Our services teams continue to execute very well and they provide a true differentiation for SBA with our customers. During the Q3, we also made significant progress in managing our balance sheet with 3 very positive capital markets transactions, which Mark will discuss in a moment. Speaker 200:09:19These transactions demonstrate our access to attractively priced capital and our position as a preferred issuer across the debt markets in which we participate. Our leverage remains near historical lows. We have one debt maturity over the next 2 years and our $2,000,000,000 revolver is fully undrawn. So we are in excellent shape in terms of capital structure and liquidity. In addition, we continue a targeted approach to capital allocation. Speaker 200:09:45Completing our recent refinancings provides us with flexibility to opportunistically allocate capital into strategic and value enhancing asset investment with a key example being the Millicom transaction. During the Q3, we also acquired a portfolio of high cash flowing sites in the U. S. At an attractive price and we will continue to look for opportunities to grow our asset base at appropriate valuations as well as to opportunistically repurchase our stock. Our business continues to perform well and our customers continue to enhance their networks. Speaker 200:10:18As a result, we are set up well for a strong finish to the year. Before turning it over to Mark to share more specifics on our Q3 results, I'd like to thank our team members and our customers for their contributions to our success. Our operations teams deserve a special thank you for the tremendous job they did through the recent hurricanes affecting the Southeastern United States. Between the two storms, we had over 1,000 sites in the path of 1 or both storms. Our sites once again demonstrated their resiliency with relatively little structural damage. Speaker 200:10:52More impressive though was the quick and dedicated response from our team members to assess the damage, clear access and assist our customers in getting their networks up and running as quickly as possible. I greatly appreciate the dedication and commitment of our teams on the ground in these challenging situations. With that, I will now turn things over to Mark who will provide additional details. Speaker 300:11:13Thank you, Brendan. Our Q3 results were mostly in line with our expectation. 3rd quarter domestic steam tower revenue growth over the Q3 of last year was 5.3% on a gross basis and 2% on a net basis including 3.3 percent of churn. Of that 3.3%, 2% was related to spring consolidation. International same tower recurring cash leasing revenue growth for the 3rd quarter, which is calculated on the constant currency basis was 3.1 percent net, including 4.3% of churn or 7.4% on a gross basis. Speaker 300:11:53In Brazil, our largest international market, same tower gross organic growth was 6.5% on a constant currency basis. We continue to see solid organic lease up in our international markets. Total international churn remained elevated in the 3rd quarter due mostly to previously announced carrier consolidation. Pro form a for today's announcement with Medicom, approximately 80% of cash site leasing revenue and 84% of adjusted EBITDA are expected to be denominated in U. S. Speaker 300:12:27Dollars. Let's now cover our results outlook for 2024. Even excluding the impact of better than expected foreign currency exchange rates in the Q3, we increased our full year outlook across all key metrics, including site leasing revenue, total cash flow, adjusted EBITDA, AFFO and AFFO per share as compared to our prior outlook. With regard to site development revenue, we're increasing the full outlook by $5,000,000 to mostly to strong third quarter outperformance in that business. Please also note that the outlook does not assume any further acquisition beyond those which as of today are under contract and expected to close by year end. Speaker 300:13:14We also do not assume any share repurchase beyond what was already completed so far this year. However, it is possible that we invest in additional assets or share repurchase or both during the year. Our outlook for net cash interest expenses and for FF4.5 to 4 per share now assume the recent ABS financing and repricing of our Term Loan B. Additionally, we enter into a new forward starting interest rate swap starting in April 2025. It will have no impact on our 2024 outlook. Speaker 300:13:50We are quite busy with our balance sheet in the last 2 months. During the Q3, the company issued to an existing trust 2 tranches of tower revenue securities totaling $2,070,000,000 This includes a tranche of $620,000,000 issued at 4.654 percent is an anticipated repayment rate of October 2027 and the final maturity date of October 2054. This also includes a tranche of $1,450,000,000 issued at 4.831 percent with an anticipated repayment date of October 2029 and the final maturity date of October 2054. The net proceeds from the offering we used to repay the $620,000,000 total maturity that will be used to pay back the $1,165,000,000 ABS maturity in January of 2025. Cash proceeds to repay the January maturity will sit in an escrow account until then, at which time the $1,165,000,000 will be repaid. Speaker 300:14:56Our next maturity is a $750,000,000 ABS during January 2026. Let me now turn the call over Speaker 100:15:06to Mark. Thanks, Mark. In September, we repriced our $2,300,000,000 term loan by lowering the spread above 1 month term SOFR from 200 basis points to 175 basis points. This improvement represents approximately $6,000,000 of annual interest expense savings. In addition to lowering the spread on our term loan by 25 basis points, we also further hedged the future floating rate component of the loan by entering into a forward starting interest rate swap. Speaker 100:15:33This swap will fix the otherwise floating 1 month term SOFR at 3% for a notional amount of $1,000,000,000 significantly lower than today's current 1 month term SOFR rate. Similar to the existing $1,000,000,000 forward starting interest rate swap we entered into back in the Q4 of 2023, the new swap has an effective start date of March 31, 2025 and a maturity of April 11, 2028. Together, the blended 1 month term SOFR rate, we will pay starting in March 2025 on $2,000,000,000 notional will be 3.45 excuse me, 3.15 percent. Inclusive of the new spread of 175 basis points, the all in costs for the $2,000,000,000 fixed portion of the $2,300,000,000 outstanding term loan will be 5.165 percent starting in April of 2025. The remaining unhedged portion of the loan will continue to float and accrue interest at 1 month term SOFR plus 175 basis points. Speaker 100:16:40Pro form a for the new swap, approximately 98% of our non revolver debt outstanding is fixed, which will reduce the impact of future interest rate fluctuations and create greater certainty in our future AFFO. Our current leverage of 6.4x net debt to adjusted EBITDA remains near historical lows. Our Q3 net cash interest coverage ratio of adjusted EBITDA to net cash interest expense was a very strong 5.3 times. Pro form a for the ABS refinancings, our weighted average maturity is approximately 4 years with an average interest rate of 3.2% across our total outstanding debt. We continue to use cash on hand to repay amounts outstanding under the revolver And as of today, our $2,000,000,000 revolver is fully paid down. Speaker 100:17:30And finally, during the Q3, we declared and paid a cash dividend of $105,300,000 or $0.98 per share. And today, we announced that our Board of Directors declared a 4th quarter dividend of $0.98 per share payable on December 12, 2024 to shareholders of record as of the close of business on November 14, 2024. This dividend represents an increase of approximately 15% over the dividend paid in the Q4 of 2023. And operator, with that, we are now ready for questions. Operator00:18:05Thank you. And we'll go to the line of excuse me, one moment. Dhatia Levy, your line is open. Speaker 400:18:40Great. Thank you. A couple of questions. First, domestically, you mentioned that carrier activity is increasing from the first half levels and shifting to more colocation versus amendment. Can you size that mix? Speaker 400:18:54And if this holds up into 4Q, how should we think generally about 25 leasing versus 2024? Can it be flat to up? And on the Millicom deal, can you provide more color on the AFFO per share accretion in year 1 and maybe the lease up opportunity on these sites? Thank you. Speaker 200:19:15Sure. So on the carrier activity mix, we have seen an increase in carrier activity in the U. S. In terms of new business signed up. The 3rd quarter was higher than the first half of the year, really than the last three quarters actually. Speaker 200:19:31And we would expect based on the backlogs growing that we'll continue to see that move up. It's not at levels of where it was during the height of a couple of years ago, but it's moving up in the right direction. And obviously, that's favorable for the future. The mix of that shifting, we've begun to see, as I mentioned, a little bit more of that revenue coming from new co locations as opposed to amendments. We've had such a large percentage from amendments over time that now as we start to see more new leases, it's starting to shift a bit. Speaker 200:20:03And I guess what that really means is that we're obviously getting more points of presence with those carrier customers, which is a good thing for future growth as a baseline. It does mean, I guess, slightly on the negative side is that there's a little bit greater delay from when those leases when that revenue gets signed up to when it commences. The amendments typically commence a little bit quicker. But if we continue to see something similar in the Q4 to what we saw in the 3rd quarter, we'll be in okay shape for next year. But I can't really comment on how it will look relative to this year. Speaker 200:20:36There's a lot of moving parts. So we'll see where we are when we get there. As it relates to the Millicom deal, I think it's a little premature for me to give you the exact AFFO accretion. I think you can look at the numbers that we released in our press release in terms of tower cash flow. It will be because we're in many of these markets, there'll be limited overhead increases associated with that. Speaker 200:21:03In addition, I would expect we'll have some income tax implications, but it definitely will be accretive to AFFO per share once it closes. The issue is really just the timing of when it closes. So as we get a little bit further down the road and we have a better sense of timing, we'll share that more specifically with you, Batya. Got it. Thank you. Speaker 200:21:25You asked one other question too, which I don't think I answered, which is about the lease up potential on those sites. The current tenancy ratio on those sites is 1.2 with the one obviously being Millicom leaseback. So they're fairly underpenetrated in terms of co location. So we think it actually will set them up pretty well to see some nice growth into the future. Speaker 400:21:50Sounds good. Thank you. Operator00:21:53And next we'll go to the line of Ric Prentiss with Raymond James. Your line is open. Speaker 500:21:59Thanks. Good afternoon, everybody. Speaker 200:22:01Hey, Ric. Speaker 500:22:03Hey, I'm glad you all made it through the hurricane, okay, got the networks back up and running as a Florida based firm. We feel you there. Glad everybody is doing well. I want to follow-up Batya's questions on the TIGO deal. Can you help us understand kind of maybe a rough magnitude of EBITDA? Speaker 500:22:22Know you said it would be limited, added overhead. Just trying to get at an understanding, it looks like the multiple on tower cash flow was about 11 times for the initial payment. Just trying to get a sense of what the EBITDA multiple might have been ballpark. Speaker 200:22:34Yes. I would expect that the incremental SG and A will be between $3,000,000 $5,000,000 Rick. Okay. So maybe a half a turn or so higher on a multiple. Speaker 500:22:48Yes. So still something kind of in the sub 6 times for EV, the EBITDA multiple paid for the assets? Speaker 200:22:58No, the 11. Speaker 500:23:00Yes. In the yes, right, 11.5, sub-twelve like 11.5, sorry. Yes. Okay. So help us understand maybe a little bit more about why that price? Speaker 500:23:13Can you talk a little bit about the quality of the assets? How robust are they as far as adding tenants? And then just what's the carrier universe like in each one of those markets so we can understand the leasing potential, given the multiple was kind of like 11.5 tons? Speaker 200:23:31Yes. So Rick, 1st of all, let me just kind of go to the overall premise, which I tried to lay out a little bit in my scripted comments, but we're operating throughout Central America today. We're one of the leading tower companies there. But as we kind of and I talked about this earlier in the year, as we kind of look through each of our markets and where we're operating, we tried to kind of say what's the future look like, what's the potential look like for us. And we came pretty early on to the conclusion that you need to be a leader in the market in terms of your size and scale to be of the most relevance and importance to the carriers that operate there. Speaker 200:24:06And not only that, you needed to be aligned as closely as you could with the leading carriers in the markets so that you weren't as subject to some of the challenges that we faced when we've been indexed to maybe some of the weaker carriers in certain markets that we've been in. And it obviously has created churn and some disruption to the stability that this business is well known for. And so with that in mind, this was an opportunity to 1, take a leadership position where we're clearly the largest, most dominant tower company across the region and 2, to partner with the leading carrier across the region. So that was really the biggest driver. We could and the fact that we could do it at a price point that was good for us and good for TIGO, I think made it work very well. Speaker 200:24:55Obviously, it's a way for them to unlock value and assets that are not core to their operations. And for us, it's a way to make the most of our skill set, which is delivering these types of infrastructure assets at the highest quality and making them available not only to TIGO, but also to the other carriers in the region. Now when we look at the growth potential across the markets, we have a number of these markets. One of the good things about where we are today as we look forward is that many of them have already experienced the consolidation that kind of disrupted things for a little while over the last few years. And because of that, we feel very good about the remaining carriers in each of the markets. Speaker 200:25:37So each one is a little bit different. Each country is a little different. Some only have 2 carriers that are fairly well balanced with CIGO being 1. Others have more carriers than that. But the fact that there's only 1.2 tenants on these sites, and looking at where a number of them are located with CIGO as the leading provider in many of these markets, we believe it leaves a nice opportunity for some additional growth in the market. Speaker 500:26:04Okay. And any CapEx that's required kind of to get them up to handle that additional tenancy? Speaker 200:26:11There may be some, but that would obviously be figured in to the analysis as we sign those leases with new carriers. So there's no required CapEx other than to the extent we see fit that it's appropriate in connection with the lease up opportunity. Speaker 600:26:29Okay. Thanks. Yes. Operator00:26:32And next we'll go to the line of Jim Schneider with Goldman Sachs. Your line is open. Speaker 700:26:39Good afternoon. Thanks for taking my question. I guess first question would be relative to Millcomm deal. Clearly, you're doubling down on the Central America footprint. What should we draw away from this in terms of anything you may say about or not about foreclosing the possibility of larger out of footprint deal in Europe or elsewhere? Speaker 200:26:59I don't think that it necessarily means anything as it relates to that. Our top priority was certainly to look at the markets where we already are operating and to improve our position in those or frankly to look at exiting those if we don't see a clear path to doing that. But that in and of itself isn't a commentary on expansion into other places. I think the expansion into other places is simply secondary to strengthening the position in the markets where we already are. Speaker 700:27:32Understand. And then in terms of the commentary on greater proportion of new leasing on the domestic sites, can you maybe just talk a little bit about qualitatively, how much of that is sort of new leases in, say, rural markets and sort of outside of urban, suburban areas? And are you seeing anything on the margin in terms of densification? Speaker 200:27:57Yes. I'd say it's a little bit of both, Jim. I mean, it's fairly early that we started to see this shift. We've really just seen an uptick in the sheer number of brand new leases that we're signing relative to the pace we've seen over the last 2 years. So some of that is definitely in more rural markets as at least one of our customers has an initiative, regulatory requirement frankly to build out some of those areas. Speaker 200:28:24So that's a part of it. But other parts of it are definitely densification as well in some of the more suburban markets. And I think it's our this is our best guess based on what we're seeing in the conversations we're having with our customers, but I expect both of those things to actually continue into the future, particularly given the lack of new spectrum that's going to be made available. Speaker 800:28:45Great. Thank you. Operator00:28:49And next we'll go to the line of Brandon Mispel with KeyBanc Capital Markets. Your line is open. Speaker 900:28:57Todd, thanks for taking the question, Brendan. I'll try to lease the activity question a little bit away. I was hoping you could quantify the growth in lease applications in terms of the backlog of new leases that are signed but not commenced. And then, Mark, just looking at the guide implied by 4Q weeks, it looks like something just shy of $9,000,000 Is that the bottom? And when do you actually think there is inflection in the leasing activity? Speaker 900:29:23Thanks. Speaker 200:29:25Yes. Brandon, I'm sorry to hear this to you, but it was a little hard to hear you. I think you were asking about the organic growth and the timing of the inflection. Is it possible for you to just repeat it a little bit? Yes. Speaker 200:29:37Sorry, I can try again. Speaker 600:29:38I was hoping you could take the activity question a little different direction and hoping you could quantify the application backlog in terms of signs, but not commenced new leases. And then just looking at 4Qs implied by guidance, it seems like new leases and domestically is just shy of $9,000,000 Is that correct? And when is the bottom for that leasing metrics? Thanks. Speaker 200:30:05Yes. So the application backlog is of a similar shift in mix that we talked about. Your number for the Q4 is pretty close, I would say, within $500,000 or so of what we estimate. And on the timing of the bottom, I think that's around it. I can't tell you for sure yet as we get into next year, but I think we would expect to see that sort of represent right around the bottom area. Speaker 200:30:34I mean some of that is dependent upon what we continue to see happen here as we move to the balance of the year in terms of leasing activity. The other caveat to that, the reason I'm hedging a little bit is just that shift in the mix of the lease up has some impact on timing. These are the 2 different things. They're obviously related. 1 is what we sign up and 2 is when does it commence and hit the financials. Speaker 200:30:57And that shift in the mix to some degree can push it out a little bit further. So until we see how that plays out for the balance of the year, it's hard for me to say exactly. But we're seeing an uptick in the overall leasing activity. So I'm pretty confident we'll start to see it move upward. Speaker 600:31:15Great. Thank you. Speaker 200:31:17Sure. Operator00:31:19And next we'll go to the line of Simon Flannery with Morgan Stanley. Your line is open. Thank you very much. Good evening. I want to come back to the Millicom deal. Operator00:31:30You did an additional build to suit agreement with them. Could you just talk about how you think about underwriting that return on investment and so forth and it's a 7 year deal. So is that ratable over that time period? And then, I think leverage stayed in the sort of mid-6s. How are you thinking about where you want leverage to go over the next year or 2 as you balance in M and A and buybacks and keeping flexibility on the balance sheet? Operator00:31:59Thanks. Speaker 200:32:00Sure. So, yes, the build to suit agreement was actually a piece of it that we're very excited about because it allows us to continue to expand our partnership with Millicom. Basically what it is, is we are their exclusive provider of build to suit opportunities over that next 7 years up to a total of 2,500 sites. We underwrote that with as we looked at what we expected the estimated costs and the pricing of it was tied into those estimated costs. We expect it to be a high returner, certainly north of double digits without any lease up. Speaker 200:32:41And again, we think that there will be plenty of opportunities to see second tendencies on a number of those sites as we add them over time because they're typically going in locations where there isn't any coverage today. So I think it'll be certainly additive over time. In terms of the timing of it coming in over that 7 years, there isn't an expected timeframe. It may come in evenly over that or it may come in quicker. So we'll just we'll report that as it progresses. Speaker 200:33:12There's no requirement in that regard. On the leverage front, yes, our leverage is still it's still hovering around the lowest level that it's been at for us historically at 6.4 times. Even with the Millicom deal pro form a for that, that's a fairly small impact. You're talking about 0.2 turns is what I'd estimate of incremental leverage when that eventually closes. So I don't really have the desire to necessarily see the leverage go lower. Speaker 200:33:43It's really more a function of good places to use the excess capital that it generates. This deal is an example of an opportunity that we saw that we thought would be very value enhancing. And so having that flexibility to do that is a nice place to be. And that leverage being lower allows us the opportunity to do that. But going forward, we'll continue to look for places where we can invest in assets. Speaker 200:34:08And if we don't see asset opportunities, we'll invest in share repurchases. And if that doesn't seem like the best spot at a given time, we'll obviously continue to pay down debt. But my preference is to do one of the first two. Operator00:34:22Great. Thanks a lot. Next, we'll go to the line of Jonathan Atkin with RBC Capital Markets. Your line is open. Speaker 1000:34:32Thanks. Thank you. Couple of questions. So, as you manage your Latin American portfolio, my recollection is that you had somewhat of a centralized model doing a lot of it out of Florida. And is that still the case now that you've got a couple of quarters under your belt as CEO? Speaker 1000:34:50And does the Millicom transaction change that at all? Speaker 200:34:55Yes, John. It's basically still the same. And really what it is, is the things that can be done centrally, we try to do centrally, meaning back office functions, accounting, HR, legal, those types of things. We obviously have to have a presence of course in the markets for operational purposes, for sales purposes, interactions with our customers, those sorts of things. And we do have local representation of these other functions there. Speaker 200:35:24But we try to have everything kind of funneled back through our core systems here and our teams here. And the reason we do that is, 1, it's cost effective, but 2, it gives us a much greater insight into what's happening across all of our international markets by having it run that way. And 3, it also allows us to have consistency across all these various markets in the way that we operate and the way that we approach our business. And I think over time that has generally benefited us relative to our peers. So I don't expect to change that going forward. Speaker 200:35:56And even with this Millicom deal, we'll obviously have to have a few more people in the field and maybe 1 or 2 more here. But I think the general structure will stay the same. Speaker 1000:36:07And then a couple of U. S. Questions. Just wondering if you're seeing any kind of different impacts or activity from some of the build to relocate tower development activities as well as any impacts that you might expect to see on the industry with the Verizon portfolio sale changing hands into an independent operation? Speaker 200:36:29Yes. We're not really seeing too much on the relo stuff anymore. It was a little bit hotter a couple of years ago, but it's largely died down. We see very limited situations for that. And I think most people have come to realize that building towers next to other towers is kind of a way to mutually assure self destruction in those particular situations. Speaker 200:36:54So we're seeing a lot less of that. In terms of the Verizon sale, yes, I mean, they there was a nice there was a nice sized portfolio here in the U. S. There's obviously very few portfolios of that size available in the U. S. Speaker 200:37:07Market and looks like it went for a very nice price, which I think is representative of the value of towers here in the U. S. And we think is supportive of the fact that SBA has a very high quality, high value platform and portfolio. Speaker 100:37:29Thank you. Operator00:37:32And next we'll go to the line of Richard Choe with JPMorgan. Speaker 1100:37:38Hi. I wanted to ask you about the site development. The revenue picked up and the guidance was moved up slightly. Is that following that type of work following with the increase in co location and new leases? Or is there something else going on there? Speaker 1100:37:53And how should we think about it as we roll into next year? Speaker 200:37:59Yes, Richard. It is a little bit. We had actually a better quarter than we had anticipated when we gave guidance 3 months ago, which is why we're moving our outlook up for the year. And I would say a lot of that there's a couple of carrier customers that were particularly busy, and it does seem to be because of the shift to more new leases and the fact that actually we're doing a lot more of full term fee work than we used to, so there's a heavy construction component to it. That doing that heavy construction piece drives the total volume up even on a same number of agreements. Speaker 200:38:38So I do think that's one of the contributing factors. And I would expect as we move into next year, we'd see the same types of drivers for it. Speaker 1100:38:49Great. And you talked a little bit about domestic M and A, but you did have a smaller deal that you said was highly cash flow accretive. Do you think there's more of these smaller deals to kind of build upon or is that is it just a one off type thing? Speaker 200:39:06Yes. Unfortunately, I would say it's somewhat limited. We do our best to look at everything that's available and the volume of opportunities in the U. S. Is somewhat limited, which is part of the reason that they go for such high valuations because the folks chasing them outnumber the folks making them available for sale. Speaker 200:39:29But, yes, I mean, we're going to continue to look and I think every so often we're going to find opportunities to jump in and take advantage of something or maybe somebody else has missed it or we see value unlock opportunities that others don't. But I do think, unfortunately it's more limited than I would like. Great. Thank you. Operator00:39:53And we'll go to the line of Matt Niknam with Deutsche Bank. Your line is open. Speaker 600:39:59Hey, guys. Thanks for taking the question. Just to dovetail on some of the questions that have been asked around the U. S. Can you talk maybe a little bit more on what necessarily changed in 3Q that drove the uptick in activity? Speaker 600:40:12Was it one carrier in particular or more broad based? And then maybe just to follow on to that, on the DISH front, any changes in activity and any thoughts you can offer up on some of the moves they've made of late? Thank you. Speaker 200:40:29Sure. Yes, the change in the Q3, I would say it's more broad based. But in any given quarter, one carrier can be a little more active than another side. I don't know that as I kind of look at the pieces of it here in front of me, I don't see too much to highlight and we don't really like to get into the individual customers. I'm not sure that it would mean anything anyway because the next quarter that shift can turn around a little bit and just be a different carrier. Speaker 200:41:01It all depends on when they're hitting our specific sites, I think. With regard to DISH, obviously some positive news that I think sets us up well for the future, just the fact that they're one of our key customers. They have a lot to do. The fact they got some relief on the regulatory deadlines, I think, is clearly positive because it allows them to actually be able to achieve this build out that they seem very, very committed to. And the funding, that they've raised through the sale of satellite business, I think is also obviously positive. Speaker 200:41:41It's really just a question of timing. What they've done here is they've raised the funding. They've got themselves a schedule that they can work with, but I do think it will take some time for them to go through that. And so it's a little early for me to know what the short term impacts will be, but I do know long term it's obviously very positive. Speaker 600:42:01Great. If I could just throw in one more follow-up. In terms of colo relative to amendment in the U. S, what's the mix now? And how does I mean, because you mentioned more of a mix of colo, but I'm just curious at least in the Q3 what that mix was in the U. Speaker 600:42:15S? Speaker 200:42:16Yes. And this is based on dollars, but it was roughly 60%, little over 60% from new leases. Speaker 600:42:27Great. Thank you. Operator00:42:30And we'll go to the line of Nick Del Deo with MoffettNathanson. Your line is open. Speaker 600:42:36Hi. Thanks for taking my questions. First, a couple of clarifications on Millicom. The Millicom press release highlighted the potential for them to get earn outs over time if you meet certain financial milestones. Are those likely? Speaker 600:42:50Would they need material to the purchase price? And from a churn perspective, is it fair to say that the 15 year MLA kind of locks Millicom in without any opportunity to get off any of the towers over time? Speaker 200:43:04Yes, on the second one. It's a 15 year committed term. On the first question on the earn out, there are some potential earn outs for them. Those would only be paid if certain financial milestones were reached and that would be actually a great win for both parties. I don't think it overly materially will change the numbers and it actually will be certainly enhancing to the overall multiple of the deal if it happens. Speaker 600:43:39Okay. Okay. And then you cited a deal with a nice yield on it that you closed. I think you're referencing the Televisa Univision deal. Can you share anything about the expected contribution there or the degree to which that thesis is based on the existing broadcast revenue stream versus potential lease up? Speaker 600:43:59And how big of share of your business is broadcast today? Speaker 200:44:04Broadcast is a fairly small percentage of our business. We have some existing embedded broadcast towers that we've had for a lot of years in our portfolio. This particular portfolio was something that we spent a number of months with them on looking at each site and what its potential was. Obviously, the price point is well below where the typical wireless towers are trading here in the U. S. Speaker 200:44:31So that allows for a lot more flexibility in terms of what you need to do from an organic growth standpoint. But we do think some of the sites have potential for some growth. But it doesn't really require much. And we have a long term commitment from Univision on that leaseback. Speaker 800:44:51Okay, great. Speaker 600:44:51Thanks, Brendan. Operator00:44:55And next we'll go to the line of Eric Luebchow with Wells Fargo. One moment please. And your line is open. Speaker 1200:45:06Could you maybe touch on kind of how not you see non Sprint churn in your domestic markets looking beyond this year? I think you've talked about getting that down to below 1% range, but any update on kind of timing to when you guys think you could get there? Speaker 200:45:22Yes. I think that, and guys in the room correct me if I'm wrong, I believe we were this quarter it's at about 1.3% the non Sprint churn. So it's already down into the lower ones. And I think it will probably improve from there. So I think that next year, I would expect that we're going to get somewhere close to 1% or So it continues to dwindle in terms of overall numbers and impact. Speaker 1200:45:53Got you. Speaker 1300:45:54Good to hear. Speaker 1200:45:54And then just to follow-up on the Millicom MLA. You noted it's mostly U. S. Dollar denominated, but any kind of color you can provide on kind of the escalator structure, whether are those fixed? And are the new leases with them more comprehensive or holistic in nature? Speaker 1200:46:11Or will that growth be more subject to their kind of future activity levels, just kind of comparing it with what we typically see in the U. S? Thanks. Speaker 200:46:19Yes. I can't get into too much detail on all of it. First of all, on the dollar piece, the MLA is 100% U. S. Dollars, are referenced to significantly all the cash flow has to do with a few other small oddball things, mostly around expenses. Speaker 200:46:36But the MLA is all in U. S. Dollars. And it's got all of the typical things you would see. There are escalators in it, but I'd rather not get into all the detail structure on that if I can avoid it. Speaker 1200:46:56Okay, great. Thank you. Operator00:46:59And we'll go to the line of Walter Piecyk with LightShed Partners. Speaker 1400:47:05Hey, can you just refresh my memory on how long it does take from order to implementation for colo? And then you said, obviously, it takes longer than amendment, but just kind of a ballpark number of months? Speaker 200:47:20Yes, I'd say ballpark 6 months, Walt. Speaker 1400:47:24Got it. So if the order flow is kicking in now, then obviously that revenue should kick in, in conjunction with the capital plans for these operators in 2025. And then on the dividend, obviously, you stated what you're doing in the Q4. Last year, the growth was 20%. This year, it was 15%. Speaker 1400:47:47It sounds like the outlook in terms of growth might be a bit better, maybe not. But is the expectation that or when you look at the investor base out there that's available to you on the yield side, is there kind of a like a floor that you think about in terms of growth in the dividend year over year as we contemplate 2025 and 26? Speaker 200:48:15Not explicitly. I would expect that we will be certainly the fastest growing dividends within our small industry here and one of the fastest among REITs broadly. It is 15% this year, which is the lowest it's been actually at any point in our history. Obviously, we're starting with relatively small numbers, so the percentage growth can be higher. Part of it, Walt, is that we're triangulating a little bit towards our REIT obligation. Speaker 200:48:46We have NOLs that we've been burning off. And so we've been able to use those as kind of a supplement to limit us from having to pay the full REIT dividend. But as we burn those NOLs, that starts to kind of lock in more and more what our number needs to be. But I would expect I don't really want to jump ahead because we're going to look at our dividend increase next quarter that we typically do it with our Q4 earnings. But I would expect it will still be very healthy growth relative to the rest of the industry. Speaker 200:49:21Got it. Thank you. Operator00:49:24And we'll go to the line of David Barden with Bank of America. Speaker 800:49:30Hey, guys. Thanks for taking the question. And apologies to ask, when tower companies do something new and exciting, we have to Speaker 600:49:37ask about it. So I'll have to Speaker 800:49:38ask about the Millicom deal. The Brendan, the Millicom, I think, is operating in 9 markets in Central America and you guys bought, I think, 5. Is there some sort of potential that there's something more that's going to evolve out of that? Or can you explain a little bit more about why you bought what you bought and didn't buy what you didn't buy? And then I guess another question for the marks is if I'm kind of reading this right, you've kind of swung from a world view where having a 15% to 20% variable rate debt portfolio was the right mix. Speaker 800:50:19Now you're 98% of nonrevolver is fixed. Can you talk a little bit about why you chose now to make that decision? And you had a lot of activity in the quarter. A lot of it has to do with the $2,300,000,000 term loan expiring in 2025. Are there more moves to make? Speaker 800:50:39Or is this kind of the balance sheet that SBA is going to have for the next 12 months, 24 months that we can kind of just chew on and put into our models? Thank you. Speaker 200:50:51So on the Millicom markets, we, I believe bought every market that they operate in Central America. I think when you're referring to their extra markets, you're including South American markets, David. And so what we focused on is the places where we had operations and frankly where we have a good sized presence and this was a meaningful enough transaction to put us in a much stronger go forward position. Some of the markets where they operate, we are not currently in some of those markets and others were well below scale and it didn't really seem like it was going to change things. And it was actually a much cleaner separation to Central America versus South America. Speaker 200:51:41There's nothing that you should read into that in terms of future additional items. This was one specific deal and it stands on its own merits. And then your other question on the debt, which Mark you can take if you want, but I don't think there's any change though in our philosophy. As you mentioned the fixed versus floating as though it was a change. We actually already had hedges in place for the vast majority of our floating debt. Speaker 200:52:11Sometimes it changes because of the amounts outstanding on the revolver, which is obviously floating. And part of the reason is 98% is because there's 0 outstanding on the revolver. But we already have most of our term loan, which is the other floating instrument, fixed today through hedges. And what we've done is enter into some forward starting hedges to continue that fixing to provide some certainty. And we did that more to be opportunistic around the rate environment that we saw locking in rates that were materially below where the rates are today, will require significant reductions in rates. Speaker 200:52:46And so it's really to provide the certainty, but also to take advantage of what we thought were actually pretty good rates. Mark, you want to add anything? Speaker 300:52:58No, I think the existing hedge on the term loan for $1,950,000,000 expires in April of 2025. So we just put 2 new hedges in place, dollars 1,000,000,000 each, one a few months ago at 3.8 percent and another one on the cap at 3% that we did last month. So the average or the max interest rate on sulfur now for the $2,000,000,000 of the Term 1 B would be 3.41 percent and sulfur is at 4.7% now. So I think we just took advantage of a debt in interest rate to lock in a cap on the max interest rate we're going to pay on the term loan B, starting in April of 25. Speaker 200:53:51Yes. I mean, they're really just replacements of what existed when they're set to expire. And I think going forward, you asked the question about whether the balance sheet looks the same here for the next 12 months or so. I mean, we only have one maturity during the next 24 months, and that's in January of 2026. And frankly, it's only $750,000,000 which is really not that much can be managed in many different ways. Speaker 200:54:16So I think the answer to that question is yes, David. It's going to stay very much similar to what you see today. The only caveat to that is other opportunities that come along that will require some shift in the way we're capitalized to take advantage of them. But otherwise, you should expect it will be the same. Speaker 800:54:33Okay, great. Thank you, guys. Operator00:54:37And excuse me, we'll go to the line of Mike Rollins with Citigroup. Your line is open. Speaker 1500:54:43Hi, and thanks for taking the questions. 2 if I could. First, as you're seeing more opportunity and leasing from your carrier customers, does that increase the likelihood that you would enter into new multi year comprehensive deals with additional domestic national wireless carriers? And then second, philosophically, how are you looking at updating escalators in the domestic business when you have renewal opportunities with your customers? Do you still prefer a fixed long term rate? Speaker 1500:55:18Or just given some questions of inflation and future rates, are you considering taking a CPI based approach with possible floors and ceilings? Thanks. Speaker 200:55:30Yes. So we have as you know, we already have a comprehensive MLA that we signed with AT and T about 15 months or so ago. So that is already set in place and isn't really impacted by what's happening. Now, I think as we have continuing conversations with our other customers, if we can find a way to agree on things that work for both parties that are comprehensive in nature, we're open to doing that. In either case, I would expect us to have what I'll call regular MLAs, meaning things that define the overall merits of the relationship. Speaker 200:56:18Don't necessarily have to be the all you can eat structure. That really just depends on if it's something that works for what their needs are in the short term and what we think is the best way to monetize value. So I don't really know honestly, Mike. We'll continue to talk to our customers and whatever structure works the best for both parties is what we'll go with, but we don't have a disposition towards trying to do more of those. In terms of the escalators, they don't really change much because even when we negotiate new agreements, sometimes we'll look at what the escalator will be for the brand new co locations that they sign. Speaker 200:56:54We don't touch the ones that are in the embedded base and that's obviously the bulk of our business. So there's little impact on the base escalators. For the new ones, we will discuss it, but we usually end up focusing on a fixed rate as opposed to a CPI. But really that's a matter of just negotiation on each individual case. Speaker 1500:57:20Thanks very much. Operator00:57:24And we'll go to the line of Brendan Lynch with Barclays. Speaker 1600:57:29Great. Thanks for taking my questions. A couple of quick ones on Millicom. The first release alluded to 7,000 communication sites. Can you talk about the mix of towers versus rooftops? Speaker 1600:57:40And then also on the tenancy ratio being 1.2. Can you talk about whether Millicom was pursuing a strategy of co location or perhaps they were trying to avoid leasing to some of their competitors to maintain a competitive advantage in some of these areas? Speaker 300:57:58Yes. Speaker 200:57:58So, the vast majority of these are towers and even the ones that are rooftops, which is a fairly small percentage, are typically towers on rooftops. So, it's basically all effectively towers. But I don't know the exact number off the top of my head. I think it's somewhere around 90% as ground based towers and the other 10% to 12% or so is rooftop based. And then on the tenancy side, they Millicom did have these in a they had established a tower company entity that they called Loti. Speaker 200:58:38That's where these towers resided. And the intention was to lease space on them to other parties. So they did do some efforts around that. However, it's our belief that a number of these sites were held back because they were better sites and therefore for competitive reasons for their wireless business they did not make them available. And even in other cases competing carriers were not as inclined to go on the sites when they're owned by one of their competitors. Speaker 200:59:09So we do think there's an opportunity to unlock lease up value here. Speaker 800:59:15Great. Thank you. Operator00:59:18And we'll go to the line of David Guarino with Green Street Advisors. Speaker 1300:59:24Thanks. I just wanted to go back to that earlier question about the earn out because it's really helpful for figuring out the valuation you paid. So I know in your SEC filings you disclosed potential obligations on prior transactions, but those don't end up being shown up on your balance sheet. So I guess, as we kind of think about when the deal closes, should we assume that line item in your Qs is going to increase materially or is the earn out not that material? And then also just an idea of the timeframe for when those earn outs would be payable? Speaker 200:59:54Thanks. Yes. I don't think it's going to change on our balance sheet. There may be some disclosure around potential earn outs. But honestly, David, the deal was just signed today, so I'm not 100% sure what the disclosure will look like in our financials, but we'll that's something that maybe our guys can look at and just give it to you offline on that. Speaker 201:00:19In any case, it's not that material to the overall picture. So, I think even if you see what it might look like, I don't think it's going to it's not going to change the way that the deal looks. And as I said, to the extent that anything is paid, it will actually be a success, because it means that we've added more revenue than perhaps we even expected. Speaker 601:00:42Thanks. Speaker 201:00:44Sure. Colin, I think we're probably ready. I think we've already used up our allotted time. So I just want to thank everybody for joining the call and we look forward to catching up with you next quarter to share our year end results. Operator01:01:10And ladies and gentlemen, that does conclude our teleconference call for today. Thank you for your participation and for using AT and T Conferencing Services. You may now disconnect.Read morePowered by Conference Call Audio Live Call not available Earnings Conference CallSBA Communications Q3 202400:00 / 00:00Speed:1x1.25x1.5x2x Earnings DocumentsSlide DeckPress Release(8-K)Quarterly report(10-Q) SBA Communications Earnings HeadlinesSBA Communications (NASDAQ:SBAC) Receives Strong-Buy Rating from Raymond JamesMay 1 at 3:49 AM | americanbankingnews.comSBA Communications (NASDAQ:SBAC) Price Target Raised to $265.00May 1 at 2:58 AM | americanbankingnews.comHow to invest in Elon Musk’s Optimus before its launchElon Musk is set to completely take over the AI industry with Optimus… A breakthrough AI-powered robot that Elon Musk himself believes "will be the biggest product ever of any kind". One well-connected Silicon Valley insider has uncovered a way for anybody to claim a stake in Optimus with as little as $100. All you'll need is a regular brokerage account.May 1, 2025 | InvestorPlace (Ad)SBA Communications (NASDAQ:SBAC) Shares Gap Up Following Dividend AnnouncementMay 1 at 1:51 AM | americanbankingnews.comWhy SBA Communications Corp (SBAC) Is Surging In 2025May 1 at 1:10 AM | msn.comSBA Communications Navigates Growth Amid ChallengesApril 29 at 8:34 PM | tipranks.comSee More SBA Communications Headlines Get Earnings Announcements in your inboxWant to stay updated on the latest earnings announcements and upcoming reports for companies like SBA Communications? Sign up for Earnings360's daily newsletter to receive timely earnings updates on SBA Communications and other key companies, straight to your email. Email Address About SBA CommunicationsSBA Communications (NASDAQ:SBAC) is a leading independent owner and operator of wireless communications infrastructure including towers, buildings, rooftops, distributed antenna systems (DAS) and small cells. With a portfolio of more than 39,000 communications sites throughout the Americas, Africa and in Asia, SBA is listed on NASDAQ under the symbol SBAC. 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There are 17 speakers on the call. Operator00:00:00Thank you for standing by, and welcome to the SBA Communications Third Quarter Results Conference. At this time, all participants are in a listen only mode. Later, we will conduct a question and answer session. Instructions will be given at that time. And as a reminder, this conference is being recorded. Operator00:00:26I would now like to turn the conference over to our host, Vice President of Finance, Mark DeRussy. Please go ahead, sir. Speaker 100:00:33Thank you. Good evening, and thank you for joining us for SBA's Q3 2024 earnings conference call. Here with me today are Brendan Cavanagh, our President and Chief Executive Officer and Mark Montagnier, our Chief Financial Officer. Some of the information we will discuss on this call is forward looking, including, but not limited to, any guidance for 2024 and beyond. In today's press release and in our SEC filings, we detail material risks that may cause our future results to differ from our expectations. Speaker 100:01:01Our statements are as of today, October 28, and we have no obligation to update any forward looking statement we may make. In addition, our comments will include non GAAP financial measures and other key operating metrics. The reconciliation of and other information regarding these items can be found in our supplemental financial data package, which is located on the landing page of our Investor Relations website. With that, I will now turn it over to Brendan to comment on the Q3. Speaker 200:01:28Thank you, Mark. Good afternoon. Operationally, the Q3 ended up rolling out largely as we expected with leasing results in line with our outlook and services results a little ahead of our outlook. Foreign exchange rates were a little stronger than our estimates a quarter ago and domestic new carrier activity was up from the first half of the year. All of these items combined to allow us to increase our full year 2024 outlook across all of our key financial metrics. Speaker 200:01:57In the U. S, new business executions were up from the prior three quarters and applications and inquiries have increased as well. We are beginning to see a shift in the makeup of our new business signed up and applications with a growing percentage coming from new lease co locations versus amendments to existing leases. We anticipate this trend continuing into 2025. All of our major customers have significant network needs over the next few years as mobile network consumption continues to grow at a healthy pace. Speaker 200:02:29The limitation of new spectrum availability over the next several years will challenge our customers to meet the demands on their networks through incremental equipment deployment and densification of sites. Our macro tower portfolio should be a beneficiary of this dynamic. Other growth drivers, which we have discussed before, such as fixed wireless access, the incorporation of new generative AI capabilities into handsets, regulatory build out commitments and remaining 5 gs coverage expansion will all contribute to a healthy network investment environment over the next several years. In addition, our customer relationships are strong. We are a trusted and valued partner to each of them. Speaker 200:03:13We are very focused on helping them to achieve their objectives through providing exceptional service and quality. As I mentioned on last quarter's call, we are in the business of long term assets and long term customer relationships. Things don't change much from quarter to quarter, but consistently delivering over time as we have done for the past 35 years is the best way to be our customers' 1st choice provider and ultimately to maximize growth for our shareholders. Internationally, we have adopted the same philosophy and as a result, we are seen as a valued partner to our carrier customers in each of our largest markets. The quarter was solid with international leasing results in line with our expectations and we expect a solid finish to the year. Speaker 200:03:58The broader market internationally though still presents some challenges as we manage through customer consolidations and network rationalizations. However, we see light at the end of this tunnel as the surviving customers are stronger and better positioned to invest in growing their wireless product offerings and their ARPUs. To accomplish this, increased network investment will be required. 5 gs upgrades across all of our international markets are really just at the very beginning and wireless broadband consumption is growing across our markets just as fast if not faster than the U. S. Speaker 200:04:34Overall, we believe our international business will continue to be additive to our organic growth profile over time and the long term prospects are still very good. As part of maximizing the long term prospects of our international business, we continue to strategically review our operations and future potential in each of our existing markets. As I have shared with you before, we believe that in order to create the longest the greatest, excuse me, long term stability and opportunity to maximize growth in a particular market, it is important to be of scale and positioned as an industry leader in that market and to be closely aligned with the leading wireless carriers in the market as well. In alignment with that effort, we are very pleased to share with you today's announcement of a purchase agreement signed with Millicom International Cellular for the acquisition of over 7,000 sites throughout Central America for an initial cash purchase price of approximately $975,000,000 Pro form a for this transaction, SBA will be the largest tower company across the region. We are very excited to increase our partnership with Millicom and to help them grow their business for many years to come. Speaker 200:05:46The assets are located across 5 countries in Central America, increasing SBA scale in 4 of those countries where we already have operations. The assets are anticipated to produce approximately $129,000,000 in site leasing revenue and $89,000,000 in tower cash flow during the 1st full year of operations after closing and significantly all of the cash flow will be denominated in U. S. Dollars. Millicom will be a tenant on each site under a leaseback arrangement in which they have committed to an initial 15 year term. Speaker 200:06:20In addition, as part of the leasing arrangement, Millicom has agreed to extend all of their approximately 1500 existing leases with SBA that exist on our existing assets in the region for a new 15 year term. SBA and Millicom have also entered into a new build to suit agreement under which SBA will exclusively build up to 2,500 new sites in Central America for Millicom over the next 7 years. The transaction is subject to regulatory approvals and customary closing conditions and we expect it will close sometime in mid to late 2025. The Millicom transaction demonstrates one way in which we are carrying out the learnings from our strategic review of each market, increasing our scale in existing markets and establishing long term relationships with the leading customers in those markets. In some markets, however, we may conclude this type of opportunity is not available to us. Speaker 200:07:13In those cases, we will consider divesting markets where we are subscale. One example of this is in the Philippines. Our original strategy in the Philippines was to gain scale through build to suit arrangements with local carriers and continue to grow our portfolio through organic growth, smaller acquisitions and further builds. Unfortunately, over the past 2 years, the market has changed with the leading carriers awarding large build to suit opportunities to tower companies as a component of significant sale leaseback transactions with those tower companies at very high valuations. We have successfully built a valuable portfolio of tower assets in the Philippines, but today there are over 30 independent tower companies in the market and our market share is still less than 1%. Speaker 200:08:00Given our lack of broader presence in the region and a limited path to scale over the near to medium term, we have begun a process to exit the market through a sale of our existing business. We will continue our strategic review of all of our operations and markets with a focus on stabilizing long term cash flows and positioning ourselves to maximize organic growth opportunities in each market. Some markets may grow and others we may exit, but I am confident that each decision will strengthen SBA's prospects for the long term. Pivoting now to our services business, we had a very good 3rd quarter. Revenue was up over 23% from the 2nd quarter and gross profit was up over 33%. Speaker 200:08:42Our carrier customers meaningfully stepped up their construction activity in the quarter, contributing to better results than we had anticipated. As a result, we have increased our full year outlook for services revenue from the outlook provided last quarter. And our full year adjusted EBITDA outlook also benefited from these strong results. Our services teams continue to execute very well and they provide a true differentiation for SBA with our customers. During the Q3, we also made significant progress in managing our balance sheet with 3 very positive capital markets transactions, which Mark will discuss in a moment. Speaker 200:09:19These transactions demonstrate our access to attractively priced capital and our position as a preferred issuer across the debt markets in which we participate. Our leverage remains near historical lows. We have one debt maturity over the next 2 years and our $2,000,000,000 revolver is fully undrawn. So we are in excellent shape in terms of capital structure and liquidity. In addition, we continue a targeted approach to capital allocation. Speaker 200:09:45Completing our recent refinancings provides us with flexibility to opportunistically allocate capital into strategic and value enhancing asset investment with a key example being the Millicom transaction. During the Q3, we also acquired a portfolio of high cash flowing sites in the U. S. At an attractive price and we will continue to look for opportunities to grow our asset base at appropriate valuations as well as to opportunistically repurchase our stock. Our business continues to perform well and our customers continue to enhance their networks. Speaker 200:10:18As a result, we are set up well for a strong finish to the year. Before turning it over to Mark to share more specifics on our Q3 results, I'd like to thank our team members and our customers for their contributions to our success. Our operations teams deserve a special thank you for the tremendous job they did through the recent hurricanes affecting the Southeastern United States. Between the two storms, we had over 1,000 sites in the path of 1 or both storms. Our sites once again demonstrated their resiliency with relatively little structural damage. Speaker 200:10:52More impressive though was the quick and dedicated response from our team members to assess the damage, clear access and assist our customers in getting their networks up and running as quickly as possible. I greatly appreciate the dedication and commitment of our teams on the ground in these challenging situations. With that, I will now turn things over to Mark who will provide additional details. Speaker 300:11:13Thank you, Brendan. Our Q3 results were mostly in line with our expectation. 3rd quarter domestic steam tower revenue growth over the Q3 of last year was 5.3% on a gross basis and 2% on a net basis including 3.3 percent of churn. Of that 3.3%, 2% was related to spring consolidation. International same tower recurring cash leasing revenue growth for the 3rd quarter, which is calculated on the constant currency basis was 3.1 percent net, including 4.3% of churn or 7.4% on a gross basis. Speaker 300:11:53In Brazil, our largest international market, same tower gross organic growth was 6.5% on a constant currency basis. We continue to see solid organic lease up in our international markets. Total international churn remained elevated in the 3rd quarter due mostly to previously announced carrier consolidation. Pro form a for today's announcement with Medicom, approximately 80% of cash site leasing revenue and 84% of adjusted EBITDA are expected to be denominated in U. S. Speaker 300:12:27Dollars. Let's now cover our results outlook for 2024. Even excluding the impact of better than expected foreign currency exchange rates in the Q3, we increased our full year outlook across all key metrics, including site leasing revenue, total cash flow, adjusted EBITDA, AFFO and AFFO per share as compared to our prior outlook. With regard to site development revenue, we're increasing the full outlook by $5,000,000 to mostly to strong third quarter outperformance in that business. Please also note that the outlook does not assume any further acquisition beyond those which as of today are under contract and expected to close by year end. Speaker 300:13:14We also do not assume any share repurchase beyond what was already completed so far this year. However, it is possible that we invest in additional assets or share repurchase or both during the year. Our outlook for net cash interest expenses and for FF4.5 to 4 per share now assume the recent ABS financing and repricing of our Term Loan B. Additionally, we enter into a new forward starting interest rate swap starting in April 2025. It will have no impact on our 2024 outlook. Speaker 300:13:50We are quite busy with our balance sheet in the last 2 months. During the Q3, the company issued to an existing trust 2 tranches of tower revenue securities totaling $2,070,000,000 This includes a tranche of $620,000,000 issued at 4.654 percent is an anticipated repayment rate of October 2027 and the final maturity date of October 2054. This also includes a tranche of $1,450,000,000 issued at 4.831 percent with an anticipated repayment date of October 2029 and the final maturity date of October 2054. The net proceeds from the offering we used to repay the $620,000,000 total maturity that will be used to pay back the $1,165,000,000 ABS maturity in January of 2025. Cash proceeds to repay the January maturity will sit in an escrow account until then, at which time the $1,165,000,000 will be repaid. Speaker 300:14:56Our next maturity is a $750,000,000 ABS during January 2026. Let me now turn the call over Speaker 100:15:06to Mark. Thanks, Mark. In September, we repriced our $2,300,000,000 term loan by lowering the spread above 1 month term SOFR from 200 basis points to 175 basis points. This improvement represents approximately $6,000,000 of annual interest expense savings. In addition to lowering the spread on our term loan by 25 basis points, we also further hedged the future floating rate component of the loan by entering into a forward starting interest rate swap. Speaker 100:15:33This swap will fix the otherwise floating 1 month term SOFR at 3% for a notional amount of $1,000,000,000 significantly lower than today's current 1 month term SOFR rate. Similar to the existing $1,000,000,000 forward starting interest rate swap we entered into back in the Q4 of 2023, the new swap has an effective start date of March 31, 2025 and a maturity of April 11, 2028. Together, the blended 1 month term SOFR rate, we will pay starting in March 2025 on $2,000,000,000 notional will be 3.45 excuse me, 3.15 percent. Inclusive of the new spread of 175 basis points, the all in costs for the $2,000,000,000 fixed portion of the $2,300,000,000 outstanding term loan will be 5.165 percent starting in April of 2025. The remaining unhedged portion of the loan will continue to float and accrue interest at 1 month term SOFR plus 175 basis points. Speaker 100:16:40Pro form a for the new swap, approximately 98% of our non revolver debt outstanding is fixed, which will reduce the impact of future interest rate fluctuations and create greater certainty in our future AFFO. Our current leverage of 6.4x net debt to adjusted EBITDA remains near historical lows. Our Q3 net cash interest coverage ratio of adjusted EBITDA to net cash interest expense was a very strong 5.3 times. Pro form a for the ABS refinancings, our weighted average maturity is approximately 4 years with an average interest rate of 3.2% across our total outstanding debt. We continue to use cash on hand to repay amounts outstanding under the revolver And as of today, our $2,000,000,000 revolver is fully paid down. Speaker 100:17:30And finally, during the Q3, we declared and paid a cash dividend of $105,300,000 or $0.98 per share. And today, we announced that our Board of Directors declared a 4th quarter dividend of $0.98 per share payable on December 12, 2024 to shareholders of record as of the close of business on November 14, 2024. This dividend represents an increase of approximately 15% over the dividend paid in the Q4 of 2023. And operator, with that, we are now ready for questions. Operator00:18:05Thank you. And we'll go to the line of excuse me, one moment. Dhatia Levy, your line is open. Speaker 400:18:40Great. Thank you. A couple of questions. First, domestically, you mentioned that carrier activity is increasing from the first half levels and shifting to more colocation versus amendment. Can you size that mix? Speaker 400:18:54And if this holds up into 4Q, how should we think generally about 25 leasing versus 2024? Can it be flat to up? And on the Millicom deal, can you provide more color on the AFFO per share accretion in year 1 and maybe the lease up opportunity on these sites? Thank you. Speaker 200:19:15Sure. So on the carrier activity mix, we have seen an increase in carrier activity in the U. S. In terms of new business signed up. The 3rd quarter was higher than the first half of the year, really than the last three quarters actually. Speaker 200:19:31And we would expect based on the backlogs growing that we'll continue to see that move up. It's not at levels of where it was during the height of a couple of years ago, but it's moving up in the right direction. And obviously, that's favorable for the future. The mix of that shifting, we've begun to see, as I mentioned, a little bit more of that revenue coming from new co locations as opposed to amendments. We've had such a large percentage from amendments over time that now as we start to see more new leases, it's starting to shift a bit. Speaker 200:20:03And I guess what that really means is that we're obviously getting more points of presence with those carrier customers, which is a good thing for future growth as a baseline. It does mean, I guess, slightly on the negative side is that there's a little bit greater delay from when those leases when that revenue gets signed up to when it commences. The amendments typically commence a little bit quicker. But if we continue to see something similar in the Q4 to what we saw in the 3rd quarter, we'll be in okay shape for next year. But I can't really comment on how it will look relative to this year. Speaker 200:20:36There's a lot of moving parts. So we'll see where we are when we get there. As it relates to the Millicom deal, I think it's a little premature for me to give you the exact AFFO accretion. I think you can look at the numbers that we released in our press release in terms of tower cash flow. It will be because we're in many of these markets, there'll be limited overhead increases associated with that. Speaker 200:21:03In addition, I would expect we'll have some income tax implications, but it definitely will be accretive to AFFO per share once it closes. The issue is really just the timing of when it closes. So as we get a little bit further down the road and we have a better sense of timing, we'll share that more specifically with you, Batya. Got it. Thank you. Speaker 200:21:25You asked one other question too, which I don't think I answered, which is about the lease up potential on those sites. The current tenancy ratio on those sites is 1.2 with the one obviously being Millicom leaseback. So they're fairly underpenetrated in terms of co location. So we think it actually will set them up pretty well to see some nice growth into the future. Speaker 400:21:50Sounds good. Thank you. Operator00:21:53And next we'll go to the line of Ric Prentiss with Raymond James. Your line is open. Speaker 500:21:59Thanks. Good afternoon, everybody. Speaker 200:22:01Hey, Ric. Speaker 500:22:03Hey, I'm glad you all made it through the hurricane, okay, got the networks back up and running as a Florida based firm. We feel you there. Glad everybody is doing well. I want to follow-up Batya's questions on the TIGO deal. Can you help us understand kind of maybe a rough magnitude of EBITDA? Speaker 500:22:22Know you said it would be limited, added overhead. Just trying to get at an understanding, it looks like the multiple on tower cash flow was about 11 times for the initial payment. Just trying to get a sense of what the EBITDA multiple might have been ballpark. Speaker 200:22:34Yes. I would expect that the incremental SG and A will be between $3,000,000 $5,000,000 Rick. Okay. So maybe a half a turn or so higher on a multiple. Speaker 500:22:48Yes. So still something kind of in the sub 6 times for EV, the EBITDA multiple paid for the assets? Speaker 200:22:58No, the 11. Speaker 500:23:00Yes. In the yes, right, 11.5, sub-twelve like 11.5, sorry. Yes. Okay. So help us understand maybe a little bit more about why that price? Speaker 500:23:13Can you talk a little bit about the quality of the assets? How robust are they as far as adding tenants? And then just what's the carrier universe like in each one of those markets so we can understand the leasing potential, given the multiple was kind of like 11.5 tons? Speaker 200:23:31Yes. So Rick, 1st of all, let me just kind of go to the overall premise, which I tried to lay out a little bit in my scripted comments, but we're operating throughout Central America today. We're one of the leading tower companies there. But as we kind of and I talked about this earlier in the year, as we kind of look through each of our markets and where we're operating, we tried to kind of say what's the future look like, what's the potential look like for us. And we came pretty early on to the conclusion that you need to be a leader in the market in terms of your size and scale to be of the most relevance and importance to the carriers that operate there. Speaker 200:24:06And not only that, you needed to be aligned as closely as you could with the leading carriers in the markets so that you weren't as subject to some of the challenges that we faced when we've been indexed to maybe some of the weaker carriers in certain markets that we've been in. And it obviously has created churn and some disruption to the stability that this business is well known for. And so with that in mind, this was an opportunity to 1, take a leadership position where we're clearly the largest, most dominant tower company across the region and 2, to partner with the leading carrier across the region. So that was really the biggest driver. We could and the fact that we could do it at a price point that was good for us and good for TIGO, I think made it work very well. Speaker 200:24:55Obviously, it's a way for them to unlock value and assets that are not core to their operations. And for us, it's a way to make the most of our skill set, which is delivering these types of infrastructure assets at the highest quality and making them available not only to TIGO, but also to the other carriers in the region. Now when we look at the growth potential across the markets, we have a number of these markets. One of the good things about where we are today as we look forward is that many of them have already experienced the consolidation that kind of disrupted things for a little while over the last few years. And because of that, we feel very good about the remaining carriers in each of the markets. Speaker 200:25:37So each one is a little bit different. Each country is a little different. Some only have 2 carriers that are fairly well balanced with CIGO being 1. Others have more carriers than that. But the fact that there's only 1.2 tenants on these sites, and looking at where a number of them are located with CIGO as the leading provider in many of these markets, we believe it leaves a nice opportunity for some additional growth in the market. Speaker 500:26:04Okay. And any CapEx that's required kind of to get them up to handle that additional tenancy? Speaker 200:26:11There may be some, but that would obviously be figured in to the analysis as we sign those leases with new carriers. So there's no required CapEx other than to the extent we see fit that it's appropriate in connection with the lease up opportunity. Speaker 600:26:29Okay. Thanks. Yes. Operator00:26:32And next we'll go to the line of Jim Schneider with Goldman Sachs. Your line is open. Speaker 700:26:39Good afternoon. Thanks for taking my question. I guess first question would be relative to Millcomm deal. Clearly, you're doubling down on the Central America footprint. What should we draw away from this in terms of anything you may say about or not about foreclosing the possibility of larger out of footprint deal in Europe or elsewhere? Speaker 200:26:59I don't think that it necessarily means anything as it relates to that. Our top priority was certainly to look at the markets where we already are operating and to improve our position in those or frankly to look at exiting those if we don't see a clear path to doing that. But that in and of itself isn't a commentary on expansion into other places. I think the expansion into other places is simply secondary to strengthening the position in the markets where we already are. Speaker 700:27:32Understand. And then in terms of the commentary on greater proportion of new leasing on the domestic sites, can you maybe just talk a little bit about qualitatively, how much of that is sort of new leases in, say, rural markets and sort of outside of urban, suburban areas? And are you seeing anything on the margin in terms of densification? Speaker 200:27:57Yes. I'd say it's a little bit of both, Jim. I mean, it's fairly early that we started to see this shift. We've really just seen an uptick in the sheer number of brand new leases that we're signing relative to the pace we've seen over the last 2 years. So some of that is definitely in more rural markets as at least one of our customers has an initiative, regulatory requirement frankly to build out some of those areas. Speaker 200:28:24So that's a part of it. But other parts of it are definitely densification as well in some of the more suburban markets. And I think it's our this is our best guess based on what we're seeing in the conversations we're having with our customers, but I expect both of those things to actually continue into the future, particularly given the lack of new spectrum that's going to be made available. Speaker 800:28:45Great. Thank you. Operator00:28:49And next we'll go to the line of Brandon Mispel with KeyBanc Capital Markets. Your line is open. Speaker 900:28:57Todd, thanks for taking the question, Brendan. I'll try to lease the activity question a little bit away. I was hoping you could quantify the growth in lease applications in terms of the backlog of new leases that are signed but not commenced. And then, Mark, just looking at the guide implied by 4Q weeks, it looks like something just shy of $9,000,000 Is that the bottom? And when do you actually think there is inflection in the leasing activity? Speaker 900:29:23Thanks. Speaker 200:29:25Yes. Brandon, I'm sorry to hear this to you, but it was a little hard to hear you. I think you were asking about the organic growth and the timing of the inflection. Is it possible for you to just repeat it a little bit? Yes. Speaker 200:29:37Sorry, I can try again. Speaker 600:29:38I was hoping you could take the activity question a little different direction and hoping you could quantify the application backlog in terms of signs, but not commenced new leases. And then just looking at 4Qs implied by guidance, it seems like new leases and domestically is just shy of $9,000,000 Is that correct? And when is the bottom for that leasing metrics? Thanks. Speaker 200:30:05Yes. So the application backlog is of a similar shift in mix that we talked about. Your number for the Q4 is pretty close, I would say, within $500,000 or so of what we estimate. And on the timing of the bottom, I think that's around it. I can't tell you for sure yet as we get into next year, but I think we would expect to see that sort of represent right around the bottom area. Speaker 200:30:34I mean some of that is dependent upon what we continue to see happen here as we move to the balance of the year in terms of leasing activity. The other caveat to that, the reason I'm hedging a little bit is just that shift in the mix of the lease up has some impact on timing. These are the 2 different things. They're obviously related. 1 is what we sign up and 2 is when does it commence and hit the financials. Speaker 200:30:57And that shift in the mix to some degree can push it out a little bit further. So until we see how that plays out for the balance of the year, it's hard for me to say exactly. But we're seeing an uptick in the overall leasing activity. So I'm pretty confident we'll start to see it move upward. Speaker 600:31:15Great. Thank you. Speaker 200:31:17Sure. Operator00:31:19And next we'll go to the line of Simon Flannery with Morgan Stanley. Your line is open. Thank you very much. Good evening. I want to come back to the Millicom deal. Operator00:31:30You did an additional build to suit agreement with them. Could you just talk about how you think about underwriting that return on investment and so forth and it's a 7 year deal. So is that ratable over that time period? And then, I think leverage stayed in the sort of mid-6s. How are you thinking about where you want leverage to go over the next year or 2 as you balance in M and A and buybacks and keeping flexibility on the balance sheet? Operator00:31:59Thanks. Speaker 200:32:00Sure. So, yes, the build to suit agreement was actually a piece of it that we're very excited about because it allows us to continue to expand our partnership with Millicom. Basically what it is, is we are their exclusive provider of build to suit opportunities over that next 7 years up to a total of 2,500 sites. We underwrote that with as we looked at what we expected the estimated costs and the pricing of it was tied into those estimated costs. We expect it to be a high returner, certainly north of double digits without any lease up. Speaker 200:32:41And again, we think that there will be plenty of opportunities to see second tendencies on a number of those sites as we add them over time because they're typically going in locations where there isn't any coverage today. So I think it'll be certainly additive over time. In terms of the timing of it coming in over that 7 years, there isn't an expected timeframe. It may come in evenly over that or it may come in quicker. So we'll just we'll report that as it progresses. Speaker 200:33:12There's no requirement in that regard. On the leverage front, yes, our leverage is still it's still hovering around the lowest level that it's been at for us historically at 6.4 times. Even with the Millicom deal pro form a for that, that's a fairly small impact. You're talking about 0.2 turns is what I'd estimate of incremental leverage when that eventually closes. So I don't really have the desire to necessarily see the leverage go lower. Speaker 200:33:43It's really more a function of good places to use the excess capital that it generates. This deal is an example of an opportunity that we saw that we thought would be very value enhancing. And so having that flexibility to do that is a nice place to be. And that leverage being lower allows us the opportunity to do that. But going forward, we'll continue to look for places where we can invest in assets. Speaker 200:34:08And if we don't see asset opportunities, we'll invest in share repurchases. And if that doesn't seem like the best spot at a given time, we'll obviously continue to pay down debt. But my preference is to do one of the first two. Operator00:34:22Great. Thanks a lot. Next, we'll go to the line of Jonathan Atkin with RBC Capital Markets. Your line is open. Speaker 1000:34:32Thanks. Thank you. Couple of questions. So, as you manage your Latin American portfolio, my recollection is that you had somewhat of a centralized model doing a lot of it out of Florida. And is that still the case now that you've got a couple of quarters under your belt as CEO? Speaker 1000:34:50And does the Millicom transaction change that at all? Speaker 200:34:55Yes, John. It's basically still the same. And really what it is, is the things that can be done centrally, we try to do centrally, meaning back office functions, accounting, HR, legal, those types of things. We obviously have to have a presence of course in the markets for operational purposes, for sales purposes, interactions with our customers, those sorts of things. And we do have local representation of these other functions there. Speaker 200:35:24But we try to have everything kind of funneled back through our core systems here and our teams here. And the reason we do that is, 1, it's cost effective, but 2, it gives us a much greater insight into what's happening across all of our international markets by having it run that way. And 3, it also allows us to have consistency across all these various markets in the way that we operate and the way that we approach our business. And I think over time that has generally benefited us relative to our peers. So I don't expect to change that going forward. Speaker 200:35:56And even with this Millicom deal, we'll obviously have to have a few more people in the field and maybe 1 or 2 more here. But I think the general structure will stay the same. Speaker 1000:36:07And then a couple of U. S. Questions. Just wondering if you're seeing any kind of different impacts or activity from some of the build to relocate tower development activities as well as any impacts that you might expect to see on the industry with the Verizon portfolio sale changing hands into an independent operation? Speaker 200:36:29Yes. We're not really seeing too much on the relo stuff anymore. It was a little bit hotter a couple of years ago, but it's largely died down. We see very limited situations for that. And I think most people have come to realize that building towers next to other towers is kind of a way to mutually assure self destruction in those particular situations. Speaker 200:36:54So we're seeing a lot less of that. In terms of the Verizon sale, yes, I mean, they there was a nice there was a nice sized portfolio here in the U. S. There's obviously very few portfolios of that size available in the U. S. Speaker 200:37:07Market and looks like it went for a very nice price, which I think is representative of the value of towers here in the U. S. And we think is supportive of the fact that SBA has a very high quality, high value platform and portfolio. Speaker 100:37:29Thank you. Operator00:37:32And next we'll go to the line of Richard Choe with JPMorgan. Speaker 1100:37:38Hi. I wanted to ask you about the site development. The revenue picked up and the guidance was moved up slightly. Is that following that type of work following with the increase in co location and new leases? Or is there something else going on there? Speaker 1100:37:53And how should we think about it as we roll into next year? Speaker 200:37:59Yes, Richard. It is a little bit. We had actually a better quarter than we had anticipated when we gave guidance 3 months ago, which is why we're moving our outlook up for the year. And I would say a lot of that there's a couple of carrier customers that were particularly busy, and it does seem to be because of the shift to more new leases and the fact that actually we're doing a lot more of full term fee work than we used to, so there's a heavy construction component to it. That doing that heavy construction piece drives the total volume up even on a same number of agreements. Speaker 200:38:38So I do think that's one of the contributing factors. And I would expect as we move into next year, we'd see the same types of drivers for it. Speaker 1100:38:49Great. And you talked a little bit about domestic M and A, but you did have a smaller deal that you said was highly cash flow accretive. Do you think there's more of these smaller deals to kind of build upon or is that is it just a one off type thing? Speaker 200:39:06Yes. Unfortunately, I would say it's somewhat limited. We do our best to look at everything that's available and the volume of opportunities in the U. S. Is somewhat limited, which is part of the reason that they go for such high valuations because the folks chasing them outnumber the folks making them available for sale. Speaker 200:39:29But, yes, I mean, we're going to continue to look and I think every so often we're going to find opportunities to jump in and take advantage of something or maybe somebody else has missed it or we see value unlock opportunities that others don't. But I do think, unfortunately it's more limited than I would like. Great. Thank you. Operator00:39:53And we'll go to the line of Matt Niknam with Deutsche Bank. Your line is open. Speaker 600:39:59Hey, guys. Thanks for taking the question. Just to dovetail on some of the questions that have been asked around the U. S. Can you talk maybe a little bit more on what necessarily changed in 3Q that drove the uptick in activity? Speaker 600:40:12Was it one carrier in particular or more broad based? And then maybe just to follow on to that, on the DISH front, any changes in activity and any thoughts you can offer up on some of the moves they've made of late? Thank you. Speaker 200:40:29Sure. Yes, the change in the Q3, I would say it's more broad based. But in any given quarter, one carrier can be a little more active than another side. I don't know that as I kind of look at the pieces of it here in front of me, I don't see too much to highlight and we don't really like to get into the individual customers. I'm not sure that it would mean anything anyway because the next quarter that shift can turn around a little bit and just be a different carrier. Speaker 200:41:01It all depends on when they're hitting our specific sites, I think. With regard to DISH, obviously some positive news that I think sets us up well for the future, just the fact that they're one of our key customers. They have a lot to do. The fact they got some relief on the regulatory deadlines, I think, is clearly positive because it allows them to actually be able to achieve this build out that they seem very, very committed to. And the funding, that they've raised through the sale of satellite business, I think is also obviously positive. Speaker 200:41:41It's really just a question of timing. What they've done here is they've raised the funding. They've got themselves a schedule that they can work with, but I do think it will take some time for them to go through that. And so it's a little early for me to know what the short term impacts will be, but I do know long term it's obviously very positive. Speaker 600:42:01Great. If I could just throw in one more follow-up. In terms of colo relative to amendment in the U. S, what's the mix now? And how does I mean, because you mentioned more of a mix of colo, but I'm just curious at least in the Q3 what that mix was in the U. Speaker 600:42:15S? Speaker 200:42:16Yes. And this is based on dollars, but it was roughly 60%, little over 60% from new leases. Speaker 600:42:27Great. Thank you. Operator00:42:30And we'll go to the line of Nick Del Deo with MoffettNathanson. Your line is open. Speaker 600:42:36Hi. Thanks for taking my questions. First, a couple of clarifications on Millicom. The Millicom press release highlighted the potential for them to get earn outs over time if you meet certain financial milestones. Are those likely? Speaker 600:42:50Would they need material to the purchase price? And from a churn perspective, is it fair to say that the 15 year MLA kind of locks Millicom in without any opportunity to get off any of the towers over time? Speaker 200:43:04Yes, on the second one. It's a 15 year committed term. On the first question on the earn out, there are some potential earn outs for them. Those would only be paid if certain financial milestones were reached and that would be actually a great win for both parties. I don't think it overly materially will change the numbers and it actually will be certainly enhancing to the overall multiple of the deal if it happens. Speaker 600:43:39Okay. Okay. And then you cited a deal with a nice yield on it that you closed. I think you're referencing the Televisa Univision deal. Can you share anything about the expected contribution there or the degree to which that thesis is based on the existing broadcast revenue stream versus potential lease up? Speaker 600:43:59And how big of share of your business is broadcast today? Speaker 200:44:04Broadcast is a fairly small percentage of our business. We have some existing embedded broadcast towers that we've had for a lot of years in our portfolio. This particular portfolio was something that we spent a number of months with them on looking at each site and what its potential was. Obviously, the price point is well below where the typical wireless towers are trading here in the U. S. Speaker 200:44:31So that allows for a lot more flexibility in terms of what you need to do from an organic growth standpoint. But we do think some of the sites have potential for some growth. But it doesn't really require much. And we have a long term commitment from Univision on that leaseback. Speaker 800:44:51Okay, great. Speaker 600:44:51Thanks, Brendan. Operator00:44:55And next we'll go to the line of Eric Luebchow with Wells Fargo. One moment please. And your line is open. Speaker 1200:45:06Could you maybe touch on kind of how not you see non Sprint churn in your domestic markets looking beyond this year? I think you've talked about getting that down to below 1% range, but any update on kind of timing to when you guys think you could get there? Speaker 200:45:22Yes. I think that, and guys in the room correct me if I'm wrong, I believe we were this quarter it's at about 1.3% the non Sprint churn. So it's already down into the lower ones. And I think it will probably improve from there. So I think that next year, I would expect that we're going to get somewhere close to 1% or So it continues to dwindle in terms of overall numbers and impact. Speaker 1200:45:53Got you. Speaker 1300:45:54Good to hear. Speaker 1200:45:54And then just to follow-up on the Millicom MLA. You noted it's mostly U. S. Dollar denominated, but any kind of color you can provide on kind of the escalator structure, whether are those fixed? And are the new leases with them more comprehensive or holistic in nature? Speaker 1200:46:11Or will that growth be more subject to their kind of future activity levels, just kind of comparing it with what we typically see in the U. S? Thanks. Speaker 200:46:19Yes. I can't get into too much detail on all of it. First of all, on the dollar piece, the MLA is 100% U. S. Dollars, are referenced to significantly all the cash flow has to do with a few other small oddball things, mostly around expenses. Speaker 200:46:36But the MLA is all in U. S. Dollars. And it's got all of the typical things you would see. There are escalators in it, but I'd rather not get into all the detail structure on that if I can avoid it. Speaker 1200:46:56Okay, great. Thank you. Operator00:46:59And we'll go to the line of Walter Piecyk with LightShed Partners. Speaker 1400:47:05Hey, can you just refresh my memory on how long it does take from order to implementation for colo? And then you said, obviously, it takes longer than amendment, but just kind of a ballpark number of months? Speaker 200:47:20Yes, I'd say ballpark 6 months, Walt. Speaker 1400:47:24Got it. So if the order flow is kicking in now, then obviously that revenue should kick in, in conjunction with the capital plans for these operators in 2025. And then on the dividend, obviously, you stated what you're doing in the Q4. Last year, the growth was 20%. This year, it was 15%. Speaker 1400:47:47It sounds like the outlook in terms of growth might be a bit better, maybe not. But is the expectation that or when you look at the investor base out there that's available to you on the yield side, is there kind of a like a floor that you think about in terms of growth in the dividend year over year as we contemplate 2025 and 26? Speaker 200:48:15Not explicitly. I would expect that we will be certainly the fastest growing dividends within our small industry here and one of the fastest among REITs broadly. It is 15% this year, which is the lowest it's been actually at any point in our history. Obviously, we're starting with relatively small numbers, so the percentage growth can be higher. Part of it, Walt, is that we're triangulating a little bit towards our REIT obligation. Speaker 200:48:46We have NOLs that we've been burning off. And so we've been able to use those as kind of a supplement to limit us from having to pay the full REIT dividend. But as we burn those NOLs, that starts to kind of lock in more and more what our number needs to be. But I would expect I don't really want to jump ahead because we're going to look at our dividend increase next quarter that we typically do it with our Q4 earnings. But I would expect it will still be very healthy growth relative to the rest of the industry. Speaker 200:49:21Got it. Thank you. Operator00:49:24And we'll go to the line of David Barden with Bank of America. Speaker 800:49:30Hey, guys. Thanks for taking the question. And apologies to ask, when tower companies do something new and exciting, we have to Speaker 600:49:37ask about it. So I'll have to Speaker 800:49:38ask about the Millicom deal. The Brendan, the Millicom, I think, is operating in 9 markets in Central America and you guys bought, I think, 5. Is there some sort of potential that there's something more that's going to evolve out of that? Or can you explain a little bit more about why you bought what you bought and didn't buy what you didn't buy? And then I guess another question for the marks is if I'm kind of reading this right, you've kind of swung from a world view where having a 15% to 20% variable rate debt portfolio was the right mix. Speaker 800:50:19Now you're 98% of nonrevolver is fixed. Can you talk a little bit about why you chose now to make that decision? And you had a lot of activity in the quarter. A lot of it has to do with the $2,300,000,000 term loan expiring in 2025. Are there more moves to make? Speaker 800:50:39Or is this kind of the balance sheet that SBA is going to have for the next 12 months, 24 months that we can kind of just chew on and put into our models? Thank you. Speaker 200:50:51So on the Millicom markets, we, I believe bought every market that they operate in Central America. I think when you're referring to their extra markets, you're including South American markets, David. And so what we focused on is the places where we had operations and frankly where we have a good sized presence and this was a meaningful enough transaction to put us in a much stronger go forward position. Some of the markets where they operate, we are not currently in some of those markets and others were well below scale and it didn't really seem like it was going to change things. And it was actually a much cleaner separation to Central America versus South America. Speaker 200:51:41There's nothing that you should read into that in terms of future additional items. This was one specific deal and it stands on its own merits. And then your other question on the debt, which Mark you can take if you want, but I don't think there's any change though in our philosophy. As you mentioned the fixed versus floating as though it was a change. We actually already had hedges in place for the vast majority of our floating debt. Speaker 200:52:11Sometimes it changes because of the amounts outstanding on the revolver, which is obviously floating. And part of the reason is 98% is because there's 0 outstanding on the revolver. But we already have most of our term loan, which is the other floating instrument, fixed today through hedges. And what we've done is enter into some forward starting hedges to continue that fixing to provide some certainty. And we did that more to be opportunistic around the rate environment that we saw locking in rates that were materially below where the rates are today, will require significant reductions in rates. Speaker 200:52:46And so it's really to provide the certainty, but also to take advantage of what we thought were actually pretty good rates. Mark, you want to add anything? Speaker 300:52:58No, I think the existing hedge on the term loan for $1,950,000,000 expires in April of 2025. So we just put 2 new hedges in place, dollars 1,000,000,000 each, one a few months ago at 3.8 percent and another one on the cap at 3% that we did last month. So the average or the max interest rate on sulfur now for the $2,000,000,000 of the Term 1 B would be 3.41 percent and sulfur is at 4.7% now. So I think we just took advantage of a debt in interest rate to lock in a cap on the max interest rate we're going to pay on the term loan B, starting in April of 25. Speaker 200:53:51Yes. I mean, they're really just replacements of what existed when they're set to expire. And I think going forward, you asked the question about whether the balance sheet looks the same here for the next 12 months or so. I mean, we only have one maturity during the next 24 months, and that's in January of 2026. And frankly, it's only $750,000,000 which is really not that much can be managed in many different ways. Speaker 200:54:16So I think the answer to that question is yes, David. It's going to stay very much similar to what you see today. The only caveat to that is other opportunities that come along that will require some shift in the way we're capitalized to take advantage of them. But otherwise, you should expect it will be the same. Speaker 800:54:33Okay, great. Thank you, guys. Operator00:54:37And excuse me, we'll go to the line of Mike Rollins with Citigroup. Your line is open. Speaker 1500:54:43Hi, and thanks for taking the questions. 2 if I could. First, as you're seeing more opportunity and leasing from your carrier customers, does that increase the likelihood that you would enter into new multi year comprehensive deals with additional domestic national wireless carriers? And then second, philosophically, how are you looking at updating escalators in the domestic business when you have renewal opportunities with your customers? Do you still prefer a fixed long term rate? Speaker 1500:55:18Or just given some questions of inflation and future rates, are you considering taking a CPI based approach with possible floors and ceilings? Thanks. Speaker 200:55:30Yes. So we have as you know, we already have a comprehensive MLA that we signed with AT and T about 15 months or so ago. So that is already set in place and isn't really impacted by what's happening. Now, I think as we have continuing conversations with our other customers, if we can find a way to agree on things that work for both parties that are comprehensive in nature, we're open to doing that. In either case, I would expect us to have what I'll call regular MLAs, meaning things that define the overall merits of the relationship. Speaker 200:56:18Don't necessarily have to be the all you can eat structure. That really just depends on if it's something that works for what their needs are in the short term and what we think is the best way to monetize value. So I don't really know honestly, Mike. We'll continue to talk to our customers and whatever structure works the best for both parties is what we'll go with, but we don't have a disposition towards trying to do more of those. In terms of the escalators, they don't really change much because even when we negotiate new agreements, sometimes we'll look at what the escalator will be for the brand new co locations that they sign. Speaker 200:56:54We don't touch the ones that are in the embedded base and that's obviously the bulk of our business. So there's little impact on the base escalators. For the new ones, we will discuss it, but we usually end up focusing on a fixed rate as opposed to a CPI. But really that's a matter of just negotiation on each individual case. Speaker 1500:57:20Thanks very much. Operator00:57:24And we'll go to the line of Brendan Lynch with Barclays. Speaker 1600:57:29Great. Thanks for taking my questions. A couple of quick ones on Millicom. The first release alluded to 7,000 communication sites. Can you talk about the mix of towers versus rooftops? Speaker 1600:57:40And then also on the tenancy ratio being 1.2. Can you talk about whether Millicom was pursuing a strategy of co location or perhaps they were trying to avoid leasing to some of their competitors to maintain a competitive advantage in some of these areas? Speaker 300:57:58Yes. Speaker 200:57:58So, the vast majority of these are towers and even the ones that are rooftops, which is a fairly small percentage, are typically towers on rooftops. So, it's basically all effectively towers. But I don't know the exact number off the top of my head. I think it's somewhere around 90% as ground based towers and the other 10% to 12% or so is rooftop based. And then on the tenancy side, they Millicom did have these in a they had established a tower company entity that they called Loti. Speaker 200:58:38That's where these towers resided. And the intention was to lease space on them to other parties. So they did do some efforts around that. However, it's our belief that a number of these sites were held back because they were better sites and therefore for competitive reasons for their wireless business they did not make them available. And even in other cases competing carriers were not as inclined to go on the sites when they're owned by one of their competitors. Speaker 200:59:09So we do think there's an opportunity to unlock lease up value here. Speaker 800:59:15Great. Thank you. Operator00:59:18And we'll go to the line of David Guarino with Green Street Advisors. Speaker 1300:59:24Thanks. I just wanted to go back to that earlier question about the earn out because it's really helpful for figuring out the valuation you paid. So I know in your SEC filings you disclosed potential obligations on prior transactions, but those don't end up being shown up on your balance sheet. So I guess, as we kind of think about when the deal closes, should we assume that line item in your Qs is going to increase materially or is the earn out not that material? And then also just an idea of the timeframe for when those earn outs would be payable? Speaker 200:59:54Thanks. Yes. I don't think it's going to change on our balance sheet. There may be some disclosure around potential earn outs. But honestly, David, the deal was just signed today, so I'm not 100% sure what the disclosure will look like in our financials, but we'll that's something that maybe our guys can look at and just give it to you offline on that. Speaker 201:00:19In any case, it's not that material to the overall picture. So, I think even if you see what it might look like, I don't think it's going to it's not going to change the way that the deal looks. And as I said, to the extent that anything is paid, it will actually be a success, because it means that we've added more revenue than perhaps we even expected. Speaker 601:00:42Thanks. Speaker 201:00:44Sure. Colin, I think we're probably ready. I think we've already used up our allotted time. So I just want to thank everybody for joining the call and we look forward to catching up with you next quarter to share our year end results. Operator01:01:10And ladies and gentlemen, that does conclude our teleconference call for today. 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