SBAC - Earnings call transcript Q2 2018 | SBA Communications Corporation

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Operator

Ladies and gentlemen, thank you for standing by. Welcome to the SBA Second Quarter Results Conference Call. At this time, all parties joining by phone will be in a listen-only or muted mode. And then later, we’ll conduct a question-and-answer session, instructions will be given to you at that time. [Operator Instructions] As a reminder, the conference is being recorded. meeting our the of Vice turn Mr. Finance, now over host, to President I'll DeRussy. Mark sir. ahead, go Please

Mark DeRussy

Thank you. call. and second Good evening, quarter for joining XXXX SBA us earnings conference thank you for

our Here today and Cavanagh, Chief with our Chief Officer. are Stoops, Brendan me Financial Executive President Jeff Officer; and

risks forward-looking, and we for Some beyond. XXXX information is In on may in limited filings, not that today's this discuss the but future material to, differ release our our and detail SEC our of from call press results we'll including, cause any guidance to expectations.

are today, we as may Our and statements statement to of we obligation have no make. forward-looking XX, any update July

non-GAAP our on the addition, package, over these information Relations to other Brendan. measures located regarding and metrics. supplemental which that, can is of and call page In website. include turn key found be financial With other comments I'll items our data in financial Investor our The will landing operating reconciliation of the

Brendan Cavanagh

Thank you, Mark. Good evening.

was quarter quarter another solid second The for SBA. very

We site million. momentum quarter results. businesses operating our produced both leasing and were gain revenues and in leasing positive services GAAP million, cash for $XXX.X and the very were site revenues second leasing $XXX.X Total to continued

calculated of basis, a on leasing On a a revenue quarter. cash X.X% constant-currency quarter of same-tower of sequentially less cash a is the X.X% including million. last Foreign tower of second first terminations. year first the previously basis half growth the to basis, a the $X.X of X.X% which X.X% revenue increased estimates for gross X.X% gross net churn, provided XXXX, leasing and was growth recurring over over of were on growth X.X%. and quarter impacting weaker leasing with second revenue impact cash earnings related same-tower leasing which basis a for exchange the a Same Domestic rates Metro/Leap growth recurring little quarter, second including than over on Domestic quarter, than by our on Clearwire revenue our recurring basis, significantly the which was quarter we've release, was negatively was churn. same-tower gross second

backlog As growth see to a levels in which rate four throughout XX year-over-year Domestic was quarter, quarter XXXX. sequential increase including in expect to also revenue Gross activity strong, Brazil we first signed new organic basis. and levels with of each XX.X%, of quarter. up representing the operational big same-tower be X.X% domestic leasing leasing was operational on from continue X.X%, the during cash activity, solid year-ago well Internationally, same-tower was carriers. above the constant-currency churn a or a growth growth over revenue leasing the and domestic gross basis contributions points sequentially basis, second gross the increase strong on remained

remained Vivo. we active, new signed total Newly in X/X solid another quarter. amendments that major four leasing U.S. to we amendment quarter, their level healthy expect and throughout in networks, leasing signings Claro to and particularly balance Internationally, had the of from lease we Brazil, a year. see good of continue the where contributions both and from had of investing during X/X up the of domestic carriers signed about up customers incremental were XX% Each and big revenue domestic and leases, from represented came the leasing our revenue new

leases churn, quarter with see our cash cash During revenues to the consistent and site was majority expectations. revenue, churn the The Clearwire regard excluding leasing expenses. and quarter to U.S. was revenue denominated the cash dollar-denominated leasing Brazil we of representing from X.X% XX.X% revenues Metro/Leap dollars. site-leasing site of in with quarter, revenue of all during XX.X% pass-through Brazil, With from non-U.S. with continue consolidated second from second of

million basis flow to $XX expect approximately years. $XXX.X million. to annual XX next have with X we rate XX, $X.X for basis same-tower second tenants was churn the quarter quarter in Domestic impacted on previously from we Metro/Leap was to that second recurring cash of Tower ultimately over points. from those anticipated. June the flow run negatively X rates second exchange million the was and Tower off an foreign annual weaker other of leases churn by Clearwire due cash revenue As the than all quarter in

quarter. impact FX margin margin the of which the million due flow rate. flow was Our in was weaker-than-anticipated impacted XX.X%, in negatively margins Domestic Adjusted to excluding XX.X% reimbursable expenses. the tower XX.X% the quarter pass-through tower cash by second EBITDA remain industry-leading operating strong million, quarter. was during International was cash and $XXX.X $X.X

revenue. adjusted X.X% over the Our second revenues to total for were businesses. of the EBITDA from was leasing quarter by both remain XX.X% very low in a SG&A the quarter services results percentage continues Cash the the compared as up were period. driven XX.X% solid and in the quarter and results EBITDA year-earlier quarter with our line in of $XX.X second Services in margin million, Adjusted XXXX. quarter was to expectations in

forecasted leasing of from margin quarter. AFFO expenses, second adjusted business the in quarter million. negatively foreign over per AFFO pass-through impact adjusted total revenues our the the $X.XX, quarter's $XXX.X was quarter. EBITDA XXXX. X.X% exchange second of to during was to share EBITDA last of per weaker-than-anticipated attributable million of to XX% was AFFO our quarter in share $X.X by the the impacted XX.X%. Excluding assumptions $X.XX Approximately due was tower increase rates second relative an was or

in we capital acquisitions. quarter, builds tower and invest both incremental new portfolio, second tower to the into During expanding deploying continued our

$XXX.X second most in acquired sites quarter, sites those the located the million, XXX of we with During for U.S. communication

quarter. We also during built XX second the sites

communication As quarter-end, have million. sites noted in our additional press for release, subsequent $X we acquired XX to

previously subsidiary International. Salvador acquisition after In been we in Millicom release the announced XXX our to a located afternoon, news provided from wire, local first closed addition, had sites the this press from the [ph] El of

anticipate contract close have price we aggregate of sites under transaction. XXXX. Salvador that these XXX the sites site XXXX for balance As throughout remaining additional spilling El an at the $XX.X acquisition some into will of We under of with including XXX million, Millicom total today,

also invest the financial We sites, provides land strategic under which in and continue benefits. our both to

of options aggregate owned is our years our million the spent the we land to end During towers, of and for average underneath buy approximately of to controlled control, terms. an the remaining the approximately $XX.X lease we life At quarter, easements under than ground including renewal years. and ground more the and quarter, extend leases, land under XX% our XX or XX

year, for actual XXXX. rates exchange in made currency changes for foreign the plus outlook our currency The $X adjusted the variances in cash remainder second for AFFO. year quarter the updated our to rate million now full year $XX both Turning flow versus impacted assumptions have XXXX leasing by the our for approximately tower foreign outlook quarter, full million and our for of EBITDA assumptions negatively $X last million revenue, site and

of and X would Excluding tower outlook cash have our leasing changes, million the adjusted share increased XX. $X.X by per revenue year full by $X flow by million, EBITDA AFFO we impact FX by $X million,

organic leasing and beyond it those additional revenue site further in or any year completed those practice, outlook full includes contract not a not or today, Our increase does XXXX debt outlook repurchases site prior $X closed under our historical full for acquisitions to domestic does our Consistent leasing updated with assume beyond assume year revenue financings growth. million any today. share

for the earnings our last These revolving for factors the year $X.XX increases as impacting rates, outstanding guidance, our expense release increased our our improvement, XXXX LIBOR our increases per our and also under of are, for facility. rest have LIBOR share making expense, as on in full We of without primarily more full year. $X.X debt, year rates AFFO and including billion cash assumptions in impacts same floating it since LIBOR credit to year rate net us loan the term $XX FX interest throughout in outlook to balances produce for XXXX. future interest account our interest billion difficult full well

ago, materially are goal items based were curves projections than over these X time, we around years lower rate assumptions put first today. forward-interest out and when the at largely we were this where which Our on

on interest repurchasing though FX and basis. the are daily this anticipated to our something than looking better and rates same I 'XX will position is spends lease in update over and balance liquidity projected to a would XXXX, the at and things our stock also up we, with be 'XX tough dollars. be, domestic We point will of it an on Even repurchase provide watch amount of turn we thought Mark, who more sheet. now initially course,

Mark DeRussy

just times, debt to net SBA net above Brendan. adjusted of debt, EBITDA range leverage ended of targeted the Thanks, was with X.X $X.X ratio X.X our quarter to annualized our times. X billion and

ratio interest of net net adjusted coverage in expense quarter second Our the EBITDA cash times. was interest X.X cash

our X% we of senior and X-year disclosed retire quarter markets the was $X.X corporate balances our term April The at the to secured general loan and under issued to loan LIBOR proceeds we term first XXXX. new existing obtained with capital release, through per the loans subsidiary, a repay for in will second mature of existing term a interest The XX.XX% year. XX, On during billion quarter. our As wholly-owned pay April billion XX, B. the debt will It term at were of plus off bears par loan earnings we on purposes. use active outstanding, $X.XX outstanding revolver and

under also $X.XX the certain to same interest to terms and to total XXXX; commitments lowering time, margins applicable amended the $X our XX, at rate the conditions. increasing fees; extending the loan, amending and facility credit and commitment we facility from maturity a addition date the billion other In April billion; term revolving

outstanding today, plus of currently an XX. rate at As LIBOR X $XX have we the accruing of million interest revolver, under

maturity coupon approximately Our next our XXXX. and is to outstanding is of X.X%, late refinancing until years. average weighted average our weighted obligation X is The debt not

Board As of new disclosed, our $X this of Directors plan. repurchase previously a stock year, approved the billion earlier authorization

$XXX.XX plan million we the were retired. price shares quarter, the repurchase under During at purchased million share. to spent All $XXX.X shares second average an X.X this of per

from now Jeff. call we XX, reduction. XXX.X As outstanding had million XXXX, plan. under or June I'll million, of The at X.X% down to authorization company XX, shares repurchase over of million XXX that, remaining the June the turn are With XXXX, XXX.X today, at

Jeffrey Stoops

solid, good had very Mark, evening, another Thanks, everyone. straight-forward quarter. and clean, We

the new increase to maintained performance. our Leasing allowed that we full executed we a it backlogs Solid in up the booked year was drove capital X and us signed new revenue Operationally, incremental the leasing and very contribution strong the invested we in and leasing activity. portfolio remained carriers repurchases. revenue new domestic growth U.S. quarter, to U.S., leasing business well, XXXX forecast. increase have share the to leasing all leasing saw In quarter very major services business increased organic, domestic which XXXX busy, wireless our of in from new increase level forecasted both first

on solid in to growth the and XXXX the companies quarter. call, leasing through point, mentioned business T-Mobile/Sprint signed see organic our with that our urban quarter over similar On the begun of and have quarter, in quarter's we in sites from as however, During areas. usual. we activity both new into to contributions we the which what business saw have confidence of any all again be At as customers, to sustained end continue XXXX. types to not of a domestic has second our very activity XG-oriented we saw result merger, leasing and outside impact we of of seen climbed levels, last macro this first increased announced leasing sources interactions terms rest first Backlogs, of organic

commentary excited and the what this We happening continue quarters, over only a to see mean will the several advanced for XG antennas require fraction are across macro will last of footprints. of SBA. majority at for require industry. ultimately in the small and taking antennas, Based radios opportunities about of the the vast our our carrier XG use Mobile this activity XG and up from will of opportunity NIMO is With of capacity deployment than are traditional deployment still new incremental revenue these tower antennas bigger customers, driving sites us. deployments front on typical which of incremental much

quarter potential Oi items increase and deployment the Brazil, a new also its Notwithstanding the and quarter, also the higher leases contractual for up help signed same-tower with a for in toward on continues keep from and nice a the October of deployment, strong U.S. particularly Brazilian bumpy presidential increased The legato exists bands, X economy the maybe quarter, stability the Internationally, we and a opportunity to constant-currency particularly quarter the future. to options, improving, revenue and reais place in more bands. resolution spectrum we during interesting from from in get DISH the the the XG about basis. completion once seems other very decline in contributions during days elections. Brazil. sequentially there to in the XX% we including in October Upcoming CBRS be first the disappointed the balanced carriers, Gross elections. and all have amendments, course, solid growth continued spectrum had from international solid had leasing We quarter. we remain we expect the additional And before expect and markets to market next forward. very Brazil major revenue underlying second beyond to proceed we over in wireless an of our the But some with believe see a activity moved benefits we going C this activity foreseeable were, In Oi. came of of amendment material leasing all fairly restructuring. organic XX% had steadily active Brazilian

Brazilian the in showing of For increased of energy trade face strength industry And real held agribusiness countries. issues best involving example, industry. the course, is oil Brazil's other prices,

level we at efficiency. to our helping revenue address our perform existing our part, Operationally continue high of on in a to their demands organically of we networks growing the all focus our and ever-growing For markets. on base our markets, across continue customers

was to the EBITDA. our and our vast was into cash margin majority adjusted flow continued of leasing incremental and In tower margin the tower revenues second XX.X%. We convert quarter, cash flow adjusted XX.X%, EBITDA

organization we our and both the quarter. environment. ticked contracts. Our investing to X believe to adjusted we efficiency, to year-over-year. to rate debt turns interest continuing quality levered maximize of EBITDA great as our move We With regard the share The capital in continue growth at in to demonstrate and range effectiveness take quarter's into did believe to control target up best in everyday support quality annualized them our our and is of value the current higher portfolio last they to focus sheet, net focus adjusted of again, operations, the of and and repurchases, pride and we on on incremental these stay margin, our balance margins cost X.X attractive way shareholder second EBITDA assets and

U.S. XXX quarter, of XX% During in over growth this the XX% second we with acquire, added achieve sites the under sites to our sites year. to remain X% negotiate goal we portfolio have our portfolio, with we to the to And currently those contract

spent In million of $XXX addition, going X.X to over to second shares. our we repurchase million quarter,

extension the a also we the quarter, that and highly financing second repricing we the loan in preferred remain revolver. an markets During debt and demonstrated issuer our and term successful of favorable

markets for prospects half allowing Laurie, maturities we shareholder like excited AFFO I'd to us we're this disciplined access our our flexibility our questions. in employees at maintaining We've of on their no credit value and XXXX. we're success. to attractive optimistic this although our until increases year our target will of for up about had XXXX. ready of we growth the in open per a first for to repurchases strong believe We XXXX, thank leverage in And contributions drive and We access the for and have and for time, to customers for share. attractive great it to rest and to acquisitions allow to share debt tower us the debt financing focus and continue goals, each are opportunistic extremely late in investors capital,

Operator

question [Operator Please with Instructions] Our James. Prentiss first go Ric Raymond from ahead.

Ric Prentiss

guys. afternoon, Good Thanks.

Jeff Stoops

Ric. Hey,

Ric Prentiss

to little thought about Hi. call, said look had impact on Obviously, one, year nice, their And would on we switch of they touch quarter a activity. this on XX,XXX - have still project. they like clean, based they the seen at we quarter merger straightforward sites be I doing quarter. appreciate their to One also We first announcement. When planning XX,XXX do this Originally, be FirstNet the in AT&T those. kind comments from whole to may seemed no your XX,XXX-plus planning. Sprint/T-Mobile you've second year, other might

talk the to you And this your can stance interpret I AT&T bit you've pacing mean seen from little a the no So work? AT&T? about on to change with even 'XX of from that guidance change kind

Jeffrey Stoops

that would half comments. but which our our the half to than guidance, comments, No of is consistent first the take second their year be with be No. need change would would to entirely the busier I

Ric Prentiss

in think, but That closed, fairly of been, Great. in And I that guess, because guidance is your Brendan, any then? also that there or I closed timing mentioned, contract have you switch the already Salvador. under would in it sites Or XXX El was it's small?

Brendan Cavanagh

small, our a of fairly terms it's but Yes, little bit expectations timing. there was of delay a in of

So was bridge or kind But M&A it's our stepped that revenue to. close what see where that it's and back of That's on internationally a on you it you track. slightly. doing actually see today, can so, month due the now down

Ric Prentiss

And like hopefully we continuing the up get for levels of second levels? are their think we're questions We Just commentary, the ramping end seeing? business? AT&T questions think between? this lot to you in to about should to points to and FirstNet to somewhere me. I I can Is different growth people gauge a there it inflection with possibility rates we And we in get there pointed on back Is activity get appreciate how a half XXXX Jeff, final see then leasing project. with the but $XX up trying are out, ramp this lot year and of the question Sprint

Jeffrey Stoops

Yes.

growth time. takes got a somewhere to produce, get heck be large operating transaction dollars will literally to between, tower of accomplish rate. part still in since - then, to value at it I whole is Ric, per XXXX rates, that if back creation. in under extremely what's it lower compound happened of much the same the And think you lot revenue I for kind think shareholder a to because a and growth hard more you're base of I healthy which

Ric Prentiss

Great. added color. Appreciate the

Operator

to go we go Morgan And Stanley. Please ahead. Flannery Simon with

Simon Flannery

two Any perhaps competitive the your more Jeff, pricing much. balance over world? very you sheet? the on And quarter. environment, Brendan, Thank the you comment this then, You overall top just about [ph] of by X [ph] you can talk the end environment? the activity of can the went range, X, elements

still bought You back stock.

You have all balance the some to stay quarters? Thanks. to of the you acquisitions want of about you how are high those? for thinking you next for. end the And pay how of sort couple do But at range

Jeffrey Stoops

environment, be continues Simon, pricing healthy. The to

Our customers are meet. to they deadlines to busy really meet trying some that want

into of end that factors leadership the - So ways on both the for we're look all very of the sides. they a at productive long-term, that - price. at day, But to we there

the of nature. are, of interested have a areas terms other had where limited on their sites those we that, any are seeking not they they historically material impact are lot it folks of been effect. hasn't in. in very A in And areas players In that really are and that those

a optimistic this So fairly really, us point. for environment it's at

Brendan Cavanagh

little intention to high-end opportunistically. to range, to or But range. stay within to due Simon, buy - coming our driven FX our stock bit the going end balance buy quality in weaker. up just our really sheet slightly of it's above assets opportunities in by the but the on we slightly be the to range, We're the or ahead part, comfortable it's at question, a did actually of

the that. those at of range see opportunities, staying very comfortable we to leverage the do high-end as we’re So

Simon Flannery

much it to And keep is you've balance the got pretty floating as well? where

Brendan Cavanagh

mean, we floating X expect that financings do floating last I our fixed so did increased in during Yes. but that in debt to And the we would was or financing the just I it be years. next our all rate X markets. rate exposure this obviously a bank our raised quarter, first

fixed - back fixed bit XX% that I target. think towards in to our we'll shift more, that is shift but a bit floating the so ideal little mix see a to our little a XX% of And fixed

Jeffrey Stoops

Brendan wherever fixed the are the add, and coming watermark financings, next as are Yes, recent be I going deals, today high of be we would said, revolver of to through out which just kind all move rate. the we bank is

Simon Flannery

Okay, you. helpful. Thank that’s

Operator

JPMorgan. And to with we go go Please Cusick ahead Phil

Phil Cusick

last comment Hi, you guys. XXXX enough that when you Thanks. $XX can be good has I you gave give it's guide. up over lease what's you just the years us expected 'XX some But to since and through to offset 'XX interest better you gave can Brendan, more I FX better the been and 'XX, not that assume than the your in of go expense. if and better thought guidance? been couple wonder color on domestic

Brendan Cavanagh

higher get interest delayed Yes. it's better results - seeing anticipated with couple what $XX XXXX, expect couple But But projected. forward guidance year target even and activity today's again, couple that what gave that stay able couple it at we'd when we rates. thinking issue. But It's FX than years. that from a we that been in that expect just regard leasing years. timing or that that years we to we assume a full you'll expect And the of what were It at number. and it's would to to to of could up the stable this if next originally over backlog that to last be going would quarters may just lease we that get that at we relatively of point, see really we the a the time, built this FX were based be time, we the see to did we the It's that basically, remember unlikely rates, also we'll interest similar of out ago. leasing that up on see we not the will over year and increased

may get be ultimately just by year will full the XXXX. to number, We not $XX

Jeffrey Stoops

the projects that reason leasing a mean, part, leasing optimism, time the I things period. the continue for the for that the expect most Phil, And today, and would to is X-year that are we through around driving the Yes. multiyear projects

Phil Cusick

Great. also in Oi can Brazil? those mentioned us remind concessions, you are And and you you on where up, tariffs picking

Brendan Cavanagh

the the - if don't that Yes, towers subject do know have, number I concession… mean, don't to Brendan, I know you the that exact – we the towers know portion, are wireline I exact of are

Jeff Stoops

sites. Yes. I believe approximately it's X,XXX

Brendan Cavanagh

X,XXX of those, are, I towers believe, Phil, concession are XXXX. that

Jeff Stoops

Right.

Brendan Cavanagh

a But contractual through, should I believe, affect guarantee then would Oi that XXXX has something those happen to concession the assets. particular

Phil Cusick

And Oi's go through as bankruptcy we any around these changing charter in concessions?

Jeffrey Stoops

No. No.

the are government, up. the hung most its have think It concession. get until happens people change to intent which I and relying elections. that on to gotten the Nothings to just belief after has done signaled presidential likely the willingness

to real knowledge, something just done not until concept. that's been there's hasn't there any to the my place. going opposition, new to get regime Although It's a in

Phil Cusick

guys. Thanks, Understood.

Operator

And Amir ahead. Please with to Barclays. we go Rozwadowski go

Amir Rozwadowski

afternoon, folks. good much. And very you Thank

Jeffrey Stoops

Hey, Amir.

Amir Rozwadowski

like macro seeing levels? - to sound doesn't guidance, was anticipated that their you investing activity with site in the site is questions, have sort on look CapEx One I Verizon's small if when that at cells. macro spending to may. made shift clarify. we end dollars lower of of that they of cells. to small two the I more just outlook bringing of to It want elements I their one their the Are versus really from of relative allocation commentary the Largely,

Jeffrey Stoops

lot hard on of cells. up do level seeing Well, question the activity because answer, for from way is to the And us a we small it's year today of don't spending that a macro ago. a Amir, we're

way best a I of can hard kind guess, it even I up but to the one probably could So answer up? answer, you. than give that's more

Amir Rozwadowski

helpful. very that's No,

healthy macro site of still from very that? adjustment you're So to continuing levels see

Jeffrey Stoops

Certainly compared yes. ago, a to year

Amir Rozwadowski

going per helpful. there of for Recognizing nuances about of target. of you long-term the control factors the timing here? you factors AFFO then of That's point? to were around are business $XX your realize share think that outside commentary Okay. in sort , that And I back growth the FX-related to still at long-term growth your rate operational to the comfortable some the but How some this to are expectations of do and business. those $XX terms AFFO

Brendan Cavanagh

we is AFFO FX If it rate can to double-digit compounding a business. stable and absolutely get interest environment, a a stable

Jeffrey Stoops

that, of now that per and course, dividend is One from otherwise, an the I’ve payer caveat growth exactly share becoming environment. in will we'd to obligation is REIT, a stable will a expect influence we said that number AFFO that as as obligation a years a double-digit it be rate a grows. in But which of right, be interest FX grower to and as

Amir Rozwadowski

very color. you much Thank incremental Great. for the

Operator

David And we go to Bank Barden Merrill the go ahead. with of America Lynch. Please

David Barden

Hey, we X about points a with points. guys. X associated two. just X I Brendan, about Metro/Leap $X that Clearwire for basis the basis said million remaining guess, you churn, [ph] my have was Thanks question. the or balance quarter, taking $XX - churn think I is about in million. And

years. that about in So boil X something you said that the and several argue the next X or be off would quarters, of the be should kind may next

you're now, just in the there we throw rate - to but breakpoints? what if that? Or corporate that's What ready it's right the not on have going how but put like day, informs tower back the put real, parameters mean second the determining sorry of to some XXX, that it be churn for sense behind So again, be may then table. We kind election, back watch on If a about the rates is of curve yet. are to helpful? picking get challenging. to getting the are I rate. for sense if it's it you give will $XX kind a number, this, what real was as - we can or the we that really now the up in and as get thinking And not definitely time, we trajectory was business, of kind XXX Thanks. the nail in might us? presidential interest forward Can the one the real the after the as Brazilian factors get us you on the this a that rate just forward

Brendan Cavanagh

Sure.

I term actually those will basically churn is just based we of same-tower the guys that that years projections don't is gave. out they when based using you're that the to take remaining lease are get X.X revenue have That's that David. of question, activity, a off. churn on we First, dates it is - on agreements about our can $XX and that, feel expect number And but numbers months we off. churn on I the the from think million XX when approximately annual end trailing of percentage the reflective to

comes the years where to that's So from. X X

David Barden

And prorate we period, over you that think? should

Brendan Cavanagh

sometimes waves. part different I probably it's the materially But I going most or next a months it. than comes so. little not the average, so evenly, are think Yes, on in But spread XX it think, for to prorating in relatively dates more renewal be

Jeffrey Stoops

question, daily I'm get like after to if to we we this Brazil the for to sure assets. that, answer it's variables year out the the useful. becomes where tell On are up election and X Brazilian at because which we only a to rate, presidential reais in that. second leve, lease point. stock at there interest is repurchased multiple I I point and full exercise. when you going and not just a prior this it I that's or come the it's really purchase probably decline would we're back to our are X, It's our respectfully David, think will that rates, the guidance XXXX

David Barden

right, Thanks for Jeff. All that.

Operator

Del Nick with We MoffettNathanson. ahead. Deo Please go next go to

Nick Del Deo

Thanks taking my Hi. for question.

sort the right this in in - this one-off? a quarter calling think this the there? out as more of acquired dealer had get lot guys a up Is you Is to pricing you by you deals sellers in around the more market anything while. M&A so there to you consummated can U.S. we worth towers in change a is pick assets U.S. Or have… there First, expectations general? in the you should Or than of than going it

Jeffrey Stoops

No.

to up think opportunity and some view an it should pick one-off. had as we a quality We I did. assets, you

Nick Del Deo

end thinking the of takes the but talking down of was out XG that, you the and XXXX. de-commissioning? be about because Obviously, I about talk Verizon, hoping CDMA And see rent at Okay. step guys could stemming then should shutting won't network overtime about we any immediate on you of puts from sort

Jeffrey Stoops

technology is of entitlements when rolled what the that's is get a a there equipment Yes, needed. prior de-commissioning happens into the typically

worst, So it antennas in at will, amendment needed perspective, typically results back. swap from our out some while rates or for what's lessening, they capacity create perhaps, some of

So in that's past, Nick. really the it's worked how

Nick Del Deo

any XG see lines along We when material AT&T its did shut you of impact those down network? sort

Jeffrey Stoops

No...

Nick Del Deo

All right. Thanks Okay.

Operator

Rollins go Please Mike to Citi. And we ahead. go of

Mike Rollins

for Two, Thanks could. the Hi. questions. I if taking

or deleveraging secondly, if a How financial company So there's tower of tower amount and just net-debt should up, of are either we strategy if the to flow investors out then that few XQ. ratio anything And curious leverage kind trend, for years in in last quarter margins end margin the think quarter, a leverage that? just beyond about And about pass-throughs. more of times? XQ dip cash frame model? as cash managing there And talk as longer-term back the flow mentioned move pass-throughs, you beyond, you the few of you through to XXXX at even the look x you like XXXX that sequential a you you'd or where time think company. Can the a to x this were is about should those the should see those

XX supplementals? I the think Thanks. it's Slide in

Jeffrey Stoops

Xs, be the in Xs is now an [indiscernible] dividend feel investment-grade be be a move would somewhere the small that -- there. need we yet become that our payer, ultimately company. into that will And primary from become to company, leverage thing whether of our the positioning. with we And you tell decided the as But to Xs. as not because I we'll grow dividend-paying a dividend to Well, from probably, could we will move a the game then driver ultimate start we we have the one we'll Mike, payer plan, as and dividend would the

Brendan Cavanagh

factors on that few tower Mike, flow there's the a affected cash that. different margin,

period certain and that done of to with we've on that during at also those the margins guided as the of new type Some well. items had builds we’ve do lower that non-recurring assets come and some

of it as So to of well. in, those of pull down kind get they help kind blended as

not shift anything. So it's trend really or representative in of any

it think on grow on to average business continue the base time. see I you'll over

Mike Rollins

much. very Thanks

Operator

go Goldman ahead. Brett go Please Sachs. we And to Feldman with

Brett Feldman

'XX, about Thanks. originally indeed think leasing it. another steady is I you're year. do you've Because but there, target, are your that Leasing indicate timing And question back rate years? and I'm shift than the if you be levels when assuming in about steady I higher I as What that a is the that probably 'XX of 'XX, fairly thought you and 'XX hate set to you'd wrong, about have and 'XX. to you particularly assuming do this, the correct assess guidance entry the 'XX to and now commentary made 'XX, going acknowledged you've and the and the of get $XX half 'XX timing. I'm 'XX And in but is me curious into still better are prior

maybe a bit the if that sight maybe around wondering with have to right just conservatism long-term I'm you're So relative line target using little of now. you what for more

Jeffrey Stoops

at the We we raising let's going interest problem, say XXXX, as going What which stop too don't are do if sit are to guidance, as to perfect far 'XX. to to to certainly today, just means be that? Fed the everything where going But a correlation? the should the to is LIBOR and That things is the think get It 'XX to reais dictate rates almost here we final is out. is as is going ahead how I 'XX XXXX? but on it we almost ultimately number be Brett, What least the we short-term good doesn't about has in that XXXX? comes think be want when matter reais mean, today. $XX Brazilian by those Brazilian what say

Brett Feldman

Okay, it. got

about totally I made other different topic. mind, don't question comment one you the you do If have

your is gear the And some what standards-based activity curious, in seeing XG activity be when yet. we comes you're that XG then gear that will said I'm incremental But You activity? market? markets. to have And obviously, just we don't

Jeffrey Stoops

see first very start means, not phones handheld That - and really yet to that point, when sure starting come out there's I'm to little. even there. we're devices to no antennas, they your MIMO the out when are Well,

So there's in area. a left that long activity for path long,

Brett Feldman

Thank you.

Operator

And go we go Street to a Spencer ahead. New Please Kurn with Research.

Spencer Kurn

taking for Thanks guys. the Hey, question.

it touching I year-over-year have rise increase you think about activity. of visibility it might it's you second Are you going Last backlog quarter plateau. just rest So year? It is you've from what on might sequentially? when Do or of on sounds it like any quarter, where in sequentially. seen and we the backlogs, QX, for the said to thought continuing it's far your is - up so

Jeffrey Stoops

It you. has I all can of month risen the That's about July. in tell

Spencer Kurn

Got I it. Thanks. may. And just one if more,

how today, how a amendments XG seen, than deployed around compare you think the the you've like we a top think from smaller what just the lot is pricing, spectrum? curious how My deployments to that wave the amendment equipment so of about amendment see typical something that. you rate do millimeter prices And may understanding have is I'm On on month? of $XXX a do then rates, about you that,

Jeffrey Stoops

Yes.

more getting that's typically radios, of is and although where seeing that, a approach history towers the pricing pricing how seeing consistent cases, your larger On spectrum not. in you the on smaller the antennas, we over it package, some some with our we're first increase bands, where - and base. we're cases, question, our And with traditional in are

terms not or back wave, have I'll on that. price Spencer, of point that of a millimeter this you to so whole In seen at get have to we lot the

Spencer Kurn

thanks Well, Okay. again.

Operator

go go we with Piecyk to And Walter BTIG. Please ahead.

Walter Piecyk’

FX the leasing the X. that Did of think plus be would the comments I year revenue, - get about Thanks. We in full outlook talked I revenue the about, changes, right? excluding impact

Jeffrey Stoops

Yes.

Walter Piecyk’

There the one domestic the you will the increased million, international by on right? another X just be two with

Brendan Cavanagh

by organic right. increased X We the domestic that's million,

to if changes you in be look first supplemental at package, there. it's the think of I page able the the we'll bridge, the on see

was there think So the the we was down X M&A side I up the domestic non-organic have FX. domestic, one but and - on one for XX, was and XX.X international

Walter Piecyk’

Right.

in second second just half and at first you your to Verizon they're half I as [ph], it quarter? look of first at over you're X ones think rationalize down in was far, but we CapEx, it we XX% was in just kind that XX. for so that And this that, much the I general they're when we that confident second the because you half? these down you still be why you only year orders that's really the way you're - not Or these just but from getting what's about when what almost you of that on reason just half? CapEx fiber it And going was know Verizon's that this towers? confidence ramp, us if that happened you on towers ramp, half that a certain that's side, may think that implies more - the on give growth that as deliver at in gets it's is visibility guess the just know the look mean, have the if So the it operators I a you that at basically XX put and to you times,

Jeffrey Stoops

by lot stuff the confidence we the driven is signed. already A of

or just a So now we and scheduled leases commencing signed to lot in amendments the is either of commence that our future.

with largely year, based backlog year, of So stage or already. is far and because based lot booked got so is is on through it the based this of at that for executed of amount stuff a signing. it we're expectations the the that on we've that stuff we But on already minor most

Walter Piecyk’

Understood.

massive of in pretty is XX% So increase? terms

Jeffrey Stoops

Yes.

how on measuring. item year over so... I is full think a year full depending Remember, you're this

Walter Piecyk’

I first third going to fourth ramp the it's The new the number? but in hit in stick-ish looking bigger think quarter, than quarter that is to lease know, obviously you hockey activities second and be quarter

Jeffrey Stoops

year, first had had leasing the this lot second particularly certainly we we've year. in than Well, a activity Yes. half year the more last last half of of

Walter Piecyk’

Great...

Jeffrey Stoops

The probably low year. quarter quarter last was our

Walter Piecyk’

Right.

also very growth you're that the up Do just plus, you're half. comments, half on right? be Jeff now of well to year. So going XXXX XX% you're understand in sequential second saying then aggressive expecting And to tie and more top as [indiscernible] in already what's a XXXX the of I to that second the

Jeffrey Stoops

certainly… but We're we XX% not XXX% the sure is, what

Brendan Cavanagh

saying Your we a have to okay like half than think, now number, XXXX. better We're second half. half. first feels that the second we had We're had like XXXX, going more half. And the it better a right a Walter. first look will We

Walter Piecyk’

I basic first just pretty backed math. in into half. numbers Right. No, lower it's the

together your X, about on So era XX to that. of new growth? kind leasing has make XXXX mean, activity to in were top of new we're on happen. it Slide sequential you there that Jeff, to I like embarking type talking get And terms put seems a growth that to that a big be in of to ramp of

Jeffrey Stoops

we've afterwards Yes. I seen page numbers go to on the make I material mean, the sure definitely there. with growth. same we're we'll mean,

Walter Piecyk’

for You have any Thanks. bet - you towers? DISH deal you. But just question. one Has last DISH a with signed

Jeffrey Stoops

They are in the backlog.

Walter Piecyk’

you Thank Great. much. very

Operator

go Please UBS. with Levi Batya to go we And ahead.

Batya Levi

- from just you going guide. excluding a Clearwire [ph] about Can to It Great. the driver that of would talk to little follow-up that’s looks what like up Thank another be? go up And normal bit. PCS, on then just you. Taiwan at gotten $XX its Leap the continue churn and probably picked churn AFFO

rate interest target? would that you line pulled you If in current and FX that should have the with have assumed coming at levels,

Jeffrey Stoops

question, take but there on scheduled to other quarter. expect reminder, just as in to churn items the do we churn the fourth that increase, On necessarily is place a the [indiscernible] not churn some is

anything the other, those But year that change of a ago. type quarters is other just and of the we churn that's I that when and what increase were you're One amount the couple consistent about with tenants just is. certain the materially timing wouldn't expect of direction or that there. fairly of an non-big kind is think to that's off, last why there's we implied, really kind four due over seeing and otherwise, where

Walter Piecyk’

Okay.

Brendan Cavanagh

four a then very right are And not outlook 'XX could as but for even domestic rosy I'm of a anymore. leasing. -- in by we're FX for $XX going variation things, term, and a now, more do parse this rates it making going difficult It's day. to actually not to we with we're us interest sorry, and

Walter Piecyk’

Okay. Thank you.

Operator

question, ahead. Deutsche next Niknam with our Bank. And go Please Matt

Matt Niknam

Hey, for taking question. you the guys. Thank

you’re M&A, of of think the just you're of facing? it leverage seeing international for had terms some internationally. and given well. appetite where international Nick that back I Thanks asked on what taking but domestic, the headwinds I'll on maybe What's M&A more with FX ask in then in And Just as are just about your you today

Jeffrey Stoops

Well, And there's as more do we yes, of shown there We've our available years. couple internationally have years. - we've the portfolio. success I look. had last domestically mean, and than grow an some we the the over is appetite to seen to have take internationally great a over

over of a picture half quarter. discouraged this over it great. We're basis. on fastest the market constant with for and have one certainly been was We're Brazil big returns not in the grew growing quarter first year. probably probably our Brazil - the mean, ahead and I Our currency of Brazil time plan

a We'd factor things look interested if ROIC Matt. We and and the we apply So forward. would would an it the the currency have hit, - methodology. always appetite, would moving at We do. analysis in and discipline We saying to be case-by-case. would we'd apply we

a not above we're market. of than of transaction always overall be international point the us interested particular a are in defining X allocation going much That's more time, a so X.X. is take any the temporary to mindful Now than we more period over going our to to the time capital governor for for that's leverage, for

Matt Niknam

Got you. Thank it.

Operator

Guggenheim Robert Goodman go we And Please we'll have ahead. Robert, go your open. Partners. to with line

Okay, to ahead. line Macquarie. you. we’ll Robert. go Yong We'll Instructions] [Operator with Thank Amy that Please close go

Amy Yong

you. towers growth was the Thank wondering could operating you through Millicom some environment talk the the you of and maybe I Thanks. if characteristics from of bought there?

Jeffrey Stoops

name X-carrier which is in there. brand market. El is like. the Well, Millicom a is leader that we Salvador their Tigo [ph] market,

low-lead a they are other going So network to in I I interested we to if particularly to relatively tower. be share growth believe in through leader. they're of least towers tenants are of tenant of today. attractive towers to great think own improve X.X, success. we've opportunities Salvador already market degree players purchases, with have They're A X.X prove lot there, the there, margins we towers the that lot be the upward land the a that gaining opportunities El may to at per of which had

So excited opportunity. pretty we're about the

Amy Yong

Thank Great. you.

Operator

to go go ahead. Colby Company. with we Please & Cowen Synesael And

Colby Synesael

relatively think XG in the we now being opportunity XG, accelerations generation obviously, numbers still deploying as a that of law consistent. having growth? most for certain Are upgrades, we in most do because accelerations where recent in be seen growth Thank you. at to notable self those of number significant, it's there's the approach states In a we've and now And you carriers an point of new previous growth. see maybe or large

example of It mentioned growth do sector future driven few what times band. the like a away, You for that AT&T. seems on right and spoken 'XX looks the goes the now like opportunities exclusively into by XXXX call this the is C rate growth almost But CBRS like a thereafter? or when the perhaps acceleration think you was about that

Jeffrey Stoops

- say an antennas, innovating. because life of because weather. out. reasons big, has from the be years, of heard that I the it's I it's - business the biggest. keep is moving Over through not fueled the technological to antenna I'd and statistic not don't that is of there's don't and as know XX and don't would which stop of is people certainly, least been that stop that that that They interesting, in not move the average It's the generational But wears law you it's just it our larger industry was don't XG AT&T, always one XG the all And And the to big because fact periods, customer's improving those It's XG I've - X I know in technological, just of agree radios years, by will XG some booms and technology. Colby. law of booms. numbers.

always there's deploying and So to remain really the and I cutting-edge changed, changing. their see seek don't and stuff to our on that better customers new that always things network have

So answer do. that, be an things point? know to was is but means that inflection the Or upward just to path? I a going I always don't it it think to long, constant there's

Colby Synesael

looking question. my might follow-up environment, driver be to interest I rates. mature start go seems think control, do same? to your you forward, back that so differently? whether value it's about plan And the be Or you outside that of things Under It for is guess just it the the more be state continue as multiples shareholders creating things served biggest strategic you or appears does of FX same well to like game like your

Jeffrey Stoops

FX. you'll and - were look at think all could paths of last after in have we election value. of [ph]. X could wake we we be movements to But up And the FX, seen year, I Well, X all, shareholder always at the favorable beneficiary remember creating back last we've

over type time, cyclical weathered has are issues that, well, those we've our industry always been create value. So very able and to

I may playbook change basic to the the but playbook stay bit, a going little So think is intact.

Colby Synesael

Okay. Thank you.

Operator

Thank our I'll speakers for to back turn closing it remarks. you.

Jeffrey Stoops

joining on earnings again forward speaking us Well, with today, all we you for Great. to third you look thank our release. and quarter

Operator

this gentlemen, AT&T and our you ladies participation teleconference and thank for And your We using for will conclude today. Executive for teleconference.

disconnect. now may You

SBA Communications (SBAC) 30 Jul 182018 Q2 Earnings call transcript