Q3 2020 American Tower Corp Earnings Call
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Ladies and gentlemen, thank you for standing by welcome to the American Tower Corporation third quarter 2020 earnings Conference call. As a reminder, today's conference is being recorded.
Good.
Following the prepared remarks, we will open the call for questions. If you would like to ask a question. Please press. One then zero on your telephone keypad, you will hear acknowledgment told that your line has been placed in Q.
I would now like to turn the conference over to your host Igor Kieslowski Vice President of Investor Relations. Please go ahead Sir.
Good morning, and thank you for joining American Tower's third quarter 2020 earnings conference call.
We have posted a presentation, which we will refer to throughout her prepared remarks under the Investor Relations tab of our website Www Dot American tower dotcom.
Before her rest of my comments I'll note that due to COVID-19 all of US on the call. This morning are again dialing in remotely from different locations. So to the extent with or any minor technical difficulties, we would ask that you bear with us.
Our agenda for this morning will be as follows first.
First I'll quickly summarize our financial results for the third quarter.
Next Tom Bartlett, our president and CEO will provide an update on our platform expansion initiatives and how we are positioned to benefit from continued wireless technology evolution.
And finally, Rob Smith, our executive Vice President CFO, and Treasurer will discuss our third quarter results and updated toy 20 hour.
After these comments, we will take your questions.
I'll remind you that this call will contain forward looking statements that involve a number of risks and uncertainties. Examples of these statements include our expectations regarding future growth, including our toy 20 out with capital allocation in future operating performance.
Our expectations regarding the impacts of COVID-19.
Our expectations regarding the impacts of the age our decision in India and any other statements regarding matters that are not historical facts.
You should be aware that certain factors may affect us in the future and could cause actual results to differ materially from those expressed in these forward looking statements.
Such factors include the risk factors set forth in this mornings earnings press release.
Those set forth in our form 10-K for the year ended December 30, Onest 2019 as updated in our form 10-Q for the three months ended March 31, 2020 and.
And in other filings, we make with the SEC.
And $64 million.
Well $1.04 per diluted common share.
The decrease included the impacts of an FX loss of about $49 million in the quarter and the loss on retirement of long term obligations of roughly $37 million.
And with that I'll turn the call over to Tom.
Thanks, Igor good morning, everyone consistent.
Consistent with our past practice for our third quarter reports my remarks today will center largely around the evolution of mobile technology and how we are positioning American tower to benefit.
Specifically, how we aim to extend our core neutral host exclusive real estate portfolio to a digital multi product multi service platform.
Offering incremental value to existing and new customers.
Also go into a bit more depth around two specific platform expansion initiatives one in the United States in one outside of our core us market.
But before I elaborate on that topic I wanted to briefly cover a few key points and the comprehensive master lease agreement North Malay that we signed with T mobile in mid September.
This agreement, which lasts through early 2035, augments, our strategic relationship with T mobile positions us to capture significant new business with them over an extended period of time and preserves the potential for incremental upside for us, particularly later on in the contract term.
PML a maintains the typical annual base escalator that we will recognize on the entire portfolio of included leases over the nearly 15 year term.
This escalators consistent with our historical 3% to 3.5% average rate included in our other us based customer lease agreements in.
Outdated property revenue at the time they occur.
Included in these contractual terminations are principally the legacy sprint revenues, we extended for 10 years back in 2011 as.
As you may recall through that contract, we were able to delay the significant iden churn than our peers experienced for more than five years, having realized the NPV benefits from that we will now see some of that deferred to commissioning flow through our run rate over a multiyear period.
Once that is complete we would expect to incur minimal levels of cancellations from T mobile over the remaining life of this agreement.
Taken as a whole we believe that our expanded relationship with T. Mobile will be important as we seek to generate double digit annual growth in the combination of our consolidated AFFO per share and dividend yield over the next decade. These.
These types of comprehensive agreements have been incredibly valuable and strategic for us as we are better able to service our customers and consequently become more strategic to them as they densify their networks and deploying new spectrum.
As a result, our cash flow generation becomes even more predictable providing us a solid foundation for continued investment in our business and generating further shareholder value.
With that said, let me now turn our attention back to discussing how we are positioning American tower to further benefit from the evolution of mobile technology.
Our core global macro tower business has been and will continue to be the foundation of our success and the primary driver of future cash flows and.
In fact, our conviction around macro towers being the primary infrastructure for Fiveg deployments has only increased as.
As more and more mid band spectrum is deployed to support Fiveg and his network usage continues to grow it upwards of 30% per year and even faster internationally. We believe that significant additional macro tower oriented network densification is inevitable.
Recall that today, we believe our consolidated customer base is spending upwards of $60 billion per year on building out their networks.
Going forward, there will be the need for even more equipment on more of our sites as carriers deploy massive mimo and utilized DSS overran and the many other tools they have at their disposal to optimize their network performance and efficiency.
In addition, as Fiveg in the surrounding ecosystem develops in the US and his network technology continues to advance throughout our international footprint, we expect to have compelling opportunities to extend our core value proposition into new related accretive product and service offerings to expand our total addressable.
Vessel market.
One of the key trends driving these opportunities is the continued convergence of wireless and wireline networks.
We believe that this convergence along with increasing digitalization network virtualization.
And the agility of cloud native software defined services will lead to increasing demand for distributed interconnected global edge compute processing.
As a result, the first mile of cloud on ramps at this edge should become a more critical component of our customers' network architecture, and notably this edge is exactly where our exclusive communications real estate assets are located.
To capitalize on the opportunities. This network evolution is likely to present, we are focused on developing communications infrastructure business models that augment the value of our existing assets expand our revenue base beyond traditional tenants and enhance our leadership role in the wireless ecosystem.
At the highest level our goal is to selectively extend our digital infrastructure core capabilities to further encapsulate neutral host wireless connectivity transport and compute functions as part of our comprehensive HTC platform.
We can then offer tenants in integrated suite complimentary solutions that fit well within their evermore complex network designs.
Within this framework, we intend to remain disciplined in terms of how we deploy capital and believe ventures with select partners could be the most efficient way to develop this platform extension we.
We expect our investments to focus on business models.
With several key elements.
First contracted long term revenue commitments from tier one customers second increasing ROI see with multi tenancy and multi service offerings, requiring modest ongoing maintenance capex.
Third operating leverage characteristics similar to towers with focus on our fixed costs.
And for synergies in adjacent services with existing AGTC assets and skill sets.
So with that general backdrop in mind, let me dive deeper into a few specific areas, where we are currently focusing our efforts with one example in the United States and one offshore.
In the United States is fiveg deployments accelerate we expect the proliferation of lower latency applications and incremental cloud based customer demand for application level and network compute functions at the edge.
There are two distinct solutions within this emerging ecosystem that we are paying attention to.
Distributed compute and mobile edge compute.
We believe that these two offerings will develop at different timelines and will allow us to provide differentiated value propositions for our customers.
On the distributed compute side enterprise workloads continued to move to the public cloud and a growing near term market segment is the use of on or off Prem private cloud computing is a hybrid solution.
Small and medium sized businesses are often willing to move legacy workloads to more responsive proximate cost effective datacenters and we believe that many datacenters at some of our macro towers can represent optimal locations for these installations.
We have started to deploy a micro datacenter facilities at select tower sites and have seen early indications of solid demand in collaboration with partners like Flex essentials.
In the near term this solution enables us to develop operational excellence around the technology and ironed out the Kinks on a small scale.
With that said, we don't necessarily think this use case alone will be the long term driver of significant value for us.
We expect true Fiveg mobile edge compute solutions to represent a much larger long term opportunity.
The foundational concept of our mobile led strategy is the expectation that localize neutral host multi operator multi cloud micro datacenters.
Can be the most cost and technology efficient means through which latency can be reduced to the edge and at these facilities can be optimally located at select macro tower sites that already have power fiber in multiple wireless tenants.
Rather than each cloud provider in carrier forging ahead with our own connectivity arrangements. Our vision is to serve as the neutral host for these low latency relationships, which would drive cost efficiency improve inter immuno application performance and accelerate deployment of these facilities throughout the network.
We expect this to be a multiyear re architecture process and we are in the early stages of leveraging the knowledge that we have developed through co Lo LTL and the small scale deployments at the tower sites I mentioned earlier to determine the specifics of our go forward strategy.
They also mentioned these offerings in all likelihood will evolve partnerships and joint ventures, as we continue to explore where in the value chain. We can drive the most incremental upside at.
At this point, we think a scaled solution is still at least a few years away, but there's tangible progress being made we're excited about the possibilities.
Underlying this excitement or the potential future fiveg related used cases that we expect to drive rapid uptake of mobile edge compute functions.
Immersive VR and VR gaming applications are obvious examples autonomous vehicle connectivities, another including our involvement in CV to X with partners like Qualcomm and Audi.
Next generation drone delivery networks real time sensor based data collection and analytics and a host of other enterprise oriented solutions are also underway and will require significant levels of compute power on the network edge.
Our objective today is to position American tower to be ready to act decisively when the time is right to be a meaningful player in this space.
Meanwhile, on the international side, most of our markets or at least five years behind us in terms of deployed network technology.
As a result, the edge compute opportunity another potential fiveg enabled business models are further down the road.
The strategic advantage that we expect to have in these areas similar to what we did with our core tower business is the ability to prove out these models in the United States first and then export them internationally when the time is right or.
Over time, we believe that our global interconnected reach will be critical in the context of an ever more global multinational customer base and their need to support their customers global needs.
In the meantime, one of the main focus areas of our platform extension efforts today throughout Africa, India, especially is on developing power as a service to drive operational efficiency and cost savings while materially reducing the carbon footprint of the wireless industry.
Throughout much of Africa, and India. The electric grid is inherently unreliable and as part of our service offerings. We are responsible for providing onsite power for our tenants in.
In the past this was almost exclusively deliver through diesel generators with significant daily run times and diesel usage at considerable expense.
More recently as solar and lithium ion battery technologies improve while becoming more cost effective we have accelerated our adoption of these technologies to make power provision in our sites more efficient and environmentally friendly.
In fact as of the end of 2019, we had 12.3 megawatts of solar capacity already online with more than 4500 sites utilizing lithium ion batteries.
To date, we've invested nearly $135 million on fuel and power optimization solutions and expect to continue to make these investments as we improved site reliability levels for our tenants.
As we disclosed in our latest sustainability report our long term target is to reduce our scope one fossil fuel consumption and diesel related greenhouse gas emissions in Africa, and India by more than 60% or 140 million liters of diesel annually by 2027.
Already we have made significant progress towards that objective, having reduced annual diesel consumption by 65 million liters since 2017 after normalizing for site count growth.
To give you a sense for what that translates to is essentially the equivalent taking more than 35000 cars off the road for a full year or preserving more than 65000 acres of floors.
In addition, we are currently exploring the development of science based emissions targets consistent with the Paris agreement goals.
These initiatives are in their early stages. We are excited about the impact that we can make going forward.
Just like in the United States, where we are seeking to leverage our expanding platform to augment the value of our communication sites. We believe that we can translate our expertise and industry leadership and fuel and power internationally integer mendis added value.
Reducing the total cost of ownership for our tenants further improving uptimes and developing more efficient clean renewable networks will benefit stakeholders across the value chain and we are committed to making substantial additional progress over the long term.
And just like in the United States, where we are working on a number of other initiatives. We are continuing to look at things like fiber to the tower fiber to the home and other transport model in many of our international markets as ways to further broaden our addressable market and add value. These.
These value propositions would all be predicated on long term contractual commitments with multi tenant and multi service elements that mirror our existing tower model.
In closing on a global basis, we are in a time of tremendous technological digital transformation.
Access ubiquitous broadband connectivity has never been more important, particularly in the context of the ongoing pandemic.
There are new use cases emerging everyday with modern wireless networks, becoming more and more dynamic responsive and critical.
As providers of the underlying infrastructure that supports mobile connectivity for billions of people around the world. We have a unique advantage point from which to observe all of these developments.
And I think we also have an incredible opportunity to pair our advantages and scale financial resources and global reach with our platform expansion initiatives to drive tremendous incremental value for our stakeholders overtime in a sustainable way.
With that let me turn the call over to Rod to go through our third quarter results and updated full year 2020 outlook.
Thanks, Tom and good morning, everyone. Thank you all for joining our call and I Hope you are well and remain safe during these challenging times.
As you saw on our press release, we had a very strong third quarter that outpaced our expectations and as a result are raising our full year outlook for key metrics.
Before we dive into the details of our results and updated expectations I'd like to highlight the following first demand for our global tower assets was strong in the quarter, most notably and as Tom just discussed we signed a comprehensive nearly 15 year long Master lease agreement with T mobile in the us which brought our contracted base.
Have committed future revenue across the company to over $58 billion we.
We believe that the same allay serves as another reaffirmation of macro towers, serving as the baseline of modern wireless networks for the foreseeable future.
We also expanded our tower portfolio through select acquisitions and build to suit initiatives.
Acquiring more than 300 sites and building nearly 1500, which was a quarterly record.
We continue to effectively manage through the challenges posed by coal that when they continued focus on the safety of our employees vendors customers and communities. Additionally, our focus on operational excellence efficiency and cost controls enabled us to drive expanding margins across the business. Despite some of the challenges resulting.
From a global pandemic.
Moving to the balance sheet, we issued around $2.8 billion in us dollar and euro denominated senior notes across several tenders, including 30 years during the quarter.
As a result of these refinancing initiatives, we were able to further extend our repayment schedule and reduce our weighted average cost of borrowings.
We ended the quarter with nearly $6.7 billion and liquidity and increased our euro denominated borrowings to represent over 10% of our total debt find.
Finally, we declared a common stock dividend of one dollar and 14 cents per share extending our long track record of solid dividend growth.
Returning capital to shareholders through the dividend remains an important part of our capital allocation strategy.
Now please turn to slide six and I will review, our property revenue and organic tenant billings growth.
In addition to discussing growth rates on a reported basis I will also outline FX neutral metrics.
Our third quarter consolidated property revenue of nearly $2 billion grew on a reported basis by $66 million or 3.4% over the prior year period, and on an FX neutral basis by $155 million or 8.1%.
Our us property revenue totaled more than $1.1 billion in grew by $27 million or 2.4% over the prior year, including a roughly 2% negative impact from lower straight line revenue.
Approximately 55% of our consolidated property revenue was generated in the us.
Our international property revenue was approximately $865 million and grew on a reported basis by around $39 million or 4.8%. This included FX headwinds of roughly $89 million as compared to Q3 of last year and on an FX neutral basis International property revenue grew by 102.
$29 million or 15.6%.
Thanks trends have appeared to stabilize over the last several months and FX was slightly better in Q3 than our prior expectations, our underlying revenue growth rates reflect solid demand for our tower space from our base of primarily large multinational tenants who are expected to invest approximately $30 billion in their networks.
This year as they continue to add coverage increased network capacity in rollout more advanced network technology move.
Moving to the right side of the slide you can see that we achieved consolidated organic tenant billings growth of 4.4% for the quarter right in line with our expectations. This included us organic tenant billings growth of 4.2% comprised of new business activity.
Which contributed 2.9% escalators, which contributed 3.1% churn of 1.4% in a roughly 0.3% negative impact from other items as expected. This growth rate reflects a sequential deceleration driven by modest levels of new business activity from T mobile over the last year, but continue.
Strong contributions from other tenants.
On a gross basis, including the impacts of our new MLP with T. Mobile we expect activity to increase beginning in early 2021.
Although this will be accompanied by higher levels of churn over the next few years as T mobile decommissioned certain sprint sites.
Our international organic tenant billings growth in the quarter was 4.7% led by Africa at over 8% in Latin America, and 7% year.
Europe was just over 2%, while India was negative 2.5% all of which were in line with our expectations gross new business Commencements were solid once again as network expansion and Densification initiatives continued the component parts of our international organic tenant billings growth were new business activity, which to.
Totaled over 6% are mostly local inflation based pricing escalators, which contributed 3.5% and other items, which contributed 20 basis points, partially offset by churn of 5.2% concentrated in India.
Moving on to slide seven you can see that our third quarter consolidated adjusted EBITDA of nearly $1.3 billion grew on a reported basis by about $69 million or 5.6% over the prior year and on an FX neutral basis by $119 million or 9.7%.
Adjusted EBITDA margins were 64.5% up roughly 160 basis points over the prior year and 120 basis points sequentially.
This increase was attributable primarily to solid organic growth throughout the business as well as diligent cost management and efficiency initiatives.
Our us business again drove a substantial majority of our consolidated property segment operating profit accounting for roughly two thirds of the total.
Moving to the right side of the slide you can see our consolidated AFFO of 1.020 billion grew on a reported basis by nearly $131 million or 14.7% over the prior year.
And on an FX neutral basis by around 175 million for nearly 20%.
Consolidated AFFO per share of $2.29 grew on a reported basis by about 29 cents or 14.5% over last year's levels and on an FX neutral basis grew by 39 cents or almost 20%. This growth in an AFFO and AFFO per share was driven by our previously discussed.
Faster growth in cash adjusted EBITDA as well as lower cash interest cost, resulting from financing activity, along with lower levels of cash taxes in maintenance capital spending.
Let's now move on to the high level themes, driving our updated 2020 expectations, which reflect increases across all key metrics are.
Our revised full year outlook is based on underlying demand expectations that are broadly consistent with our prior view the large multinational carriers that account for the vast majority of our consolidated property revenue continued to deploy network capital as their customers consume more and more mobile data irrespective of some of the disruptions caused by.
COVID-19.
In the US we expect leasing demand to pick up as we head into 2021 as carriers ramp investments in Fiveg and continue Fourg upgrades mobile data consumption growth at 30% or more per year and mid band spectrum deployments accelerate.
In the intermediate term, we think that much of this acceleration is likely to revolve around the deployment of 2.5 gigahertz spectrum looking slightly further out we expect that the C band dishes spectrum assets and to some extent Crs are likely to all the relevant drivers of network activity.
As a result, we believe that the us wireless landscape remains constructive and is poised to drive solid tower leasing activity for many years to come.
Our international businesses are performing well and continue to meet our expectations highlighting the resiliency and critical nature of tower assets across the globe.
We also continue to augment our international portfolio through both accretive M&A and high return new build programs.
For the full year, we are raising our expectations for Newbuilds to 5500 at the mid point.
On the back of a record third quarter, where we constructed nearly 1500 sites.
And on the M&A front, we added nearly 300 sites across our international footprint in Q3, bringing our year to date total to about 800, including more than 300 in Europe.
Broadband connectivity across our international footprint has never been more critical particularly in markets with limited fixed line access and we are working closely with our tenants to help them drive it.
As part of these efforts we have augmented several customer relationships recently, which we believe position us well to drive attractive growth, while delivering high levels of service. We are already seeing benefits of these enhanced partnerships through accelerating organic growth in markets like Nigeria and higher levels of new.
New build activity in many of our other markets and expect these positive trends to continue over the long term.
Meanwhile, in India. The Supreme Court has ruled on a 10 year aer repayment timeline for the carriers. We view this as a positive as it provides incremental clarity in the marketplace and near term breathing room for the carriers in terms of the liquidity.
While we believe it is too early for these positive developments to translate into significant improvement in our near term operating results. They do provide a base for optimism for the longer term.
As it relates to our 2020 outlook outside of some more favorable projections for bad debt due to better collections over the last few months, our operational expectations in India are essentially unchanged from our prior view.
Now please turn to slide eight and we will review our raised outlook mid points.
Our updated guidance for property revenue is $7.89 billion, which is an increase of $165 million compared to our prior outlook and reflects a growth rate on a reported basis of 5.6% on an FX neutral basis, the growth rate would be right around 10%.
For the US property segment, we now expect revenues of nearly $4.5 billion.
Which is $115 million above our prior projection. This is primarily being driven by about $105 million in incremental straight line revenue attributable to our new T mobile MLS as well as some other non run rate outperformance in the business.
For our international property segment, we now anticipate property revenue of 3.390 billion, which is $50 million higher than our prior projections. This is being driven by approximately $15 million and favorable FX impacts along with around $13 million in additional currency neutral pass throughs and roughly.
$7 million, an incremental straight line revenue as well as $15 million or so in other outperformance throughout the business.
Moving to the right side of the slide we are reiterating our expectations for 4.5% to 5% consolidated organic tenant billings growth. This includes a projection of 4.5% for the us and roughly 5% for international as I mentioned earlier, we do expect an acceleration in gross new business activity.
In the US beginning in early 2021.
In part driven by our new agreement with T mobile.
Turning to slide nine you can see that we now expect our full year adjusted EBITDA to be.
$5.100 billion, which.
Which is $170 million above the midpoint of our prior outlook.
And over 11% greater than the prior year on an FX neutral basis.
The primary drivers of this increase are approximately $105 million, an incremental net straight line about $27 million in better than expected non pass through primarily non run rate cash revenues around $28 million and lower than expected non pass through direct operating costs and cash SG nine.
Including $20 million and lower bad debt expectations in India.
And favorable FX impacts of roughly $5 million.
For the year, we now expect cash SGN as a percent of consolidated property revenue to be 8.2% or around 7.2%, excluding bad debt, reflecting continued scale benefits across the business law.
In line with our expected re taxable income growth rates again subject to the discretion of our board.
Regarding our capital expenditures, we expect to deploy about $1.150 billion with more than 85% allocated towards discretionary projects. This is up $75 million from our prior outlook driven primarily by higher expected newbuild activity as well as some acceleration.
And startup capital spending and a small increase in maintenance capex.
On the M&A front, we have spent roughly $860 million. So far this year, including our previously mentioned purchase of the JV steak in Africa in the first quarter and we are actively evaluating additional opportunities.
Or previously announced purchase of the top how's the remaining stake in our India business is still pending regulatory approval in India at quarter and exchange rates. This represents a purchase price of approximately $336 million and for the purposes of outlook. We have assume that this transaction will be finally.
<unk> by the end of the year.
And lastly are year to date dividend declarations, plus the $56 million, we have deployed for stock repurchases. We have now returned about $1.5 billion to common stockholders so far in 2020.
Turning now to slide 11 I'll briefly.
Briefly touch on our strong investment grade balance sheet, which we believe will be a critical component of our continued growth.
Since becoming investment grade in late 2009, our balance sheet strength is allowed us to grow revenue adjusted EBITDA consolidated <unk> and consolidated <unk> per share, while maintaining prudent levels of liquidity and ensuring unobstructed access to capital at attractive rates.
During the quarter, we access to capital markets in the us and Europe to issue roughly $2.8 billion across multiple tenors, including 30 years and both U S dollar in euros.
As of the end of the quarter, our average cost of that stood at 2.9% more than 200 basis points below 2010 levels.
An average that Tanner was more than seven years, nearly two years in excess of where we were back in 2010.
Are available liquidity totaled six $7 billion in our net leverage was four five times solidly within the three to five times target range.
Taking all this balance sheet momentum into account, we believe that we are in a tremendous position of financial strength looking forward, we remain committed to our existing financial policies. As we continue to believe that a strong balance sheet low cost of that appropriate and consistent levels of leverage along with disciplined capital.
<unk> allocation decisions are essential to our ability to deliver attractive total shareholder returns over an extended period of time.
On slide 12 and in summary.
We are positioned to finish the year strong with improving margins enhanced strategic relationships with our tenants and continued opportunities to deploy capital towards accretive growth.
Looking ahead <unk> deployment activity in the U S is poised to accelerate beginning in 2021 and we believe this will include material deployments of Midband spectrum, primarily in suburban and rural areas of the country, where our towers are located.
In addition dishes expect to begin building a nationwide network towards the back half of next year driving potential future upside.
Given our comprehensive portfolio of assets and mutually beneficial relationships with our tenants. We believe that we are well positioned to drive a prolonged period of attractive contractually guaranteed U S growth.
Meanwhile, we expect our diverse international property segment to continue to perform well has global mobile network operators deploy significant capital to deliver capable high quality networks for their customers, who are consuming more and more mobile data than ever before.
Our international footprint of more than 140000 sites as an excellent complement to our foundational use asset base and we expect that over the long term it will help us elongate and augment our growth trajectory.
Finally, we believe that as a result of our strong balance sheet are disciplined and steady approach to capital allocation and most importantly, because of our 5500 experienced and talented employees across the globe. We are well positioned to continue our long track record of driving consistent reoccurring.
Dated SFO per share growth and growing dividend and attractive total shareholder returns.
With that operator will you. Please open the line for questions.
Thank you and we I have a first question from Michael Rollins with City. Please go ahead, what's one moment here.
My apologies Mister Rollins. Please go ahead.
Thanks, and good morning, two questions. If I could the first is you were describing that gross new activity in the U S business should improve in early 2021 is there a risk that carriers slow activity, while they await the results of the C band auction a can you provide us.
Framework or historical perspective on how to think about how much leasing activity can improve.
From the current run right and then secondly, if you could just help unpack the timing of churn related to the comprehensive deal that you signed with T mobile. Thanks.
Hey, Michael maybe I'll I'll start and then arrived and can come in you know what will come out with specific guidance. Obviously in in February of next year, when we release earnings.
But what we are seeing is as we said on the last call. We would expect a pick up in activity from T mobile.
So they're going to be one of the principal drivers have to pick up particularly early on in 2021, as we see that level of activity picking up and the the latter half of 2020, so they're going to be one of the principal.
I think drivers of that pick up and with regards to kind of a C. Band question, what we've seen historically you've seen this as clearly as well being so close to to us and towards the carriers Youre doing.
They're going to be taking.
Taking advantage of leveraging every last megahertz, they have of spectrum and so I think that they're not going to wait.
Specifically for the new spectrum to be deployed there that's going to fit right into their strategy C band.
Deployment schedule is going to be over a multi year.
And so they're going to continue to to build out.
Their their current five <unk>, if you will.
Along the same kind of layered cake kind of spectrum capacity that we've talked about in the past. So we would expect that the carriers you are going to continue to spend continue.
To meet their own customers needs and they're doing it differently as you well know they're doing it across many different band, but they're going to continue to deploy.
So as I said, well, we'll provide more detail on on that kind of deployment and are cute for call, but but we're obviously very bullish in terms of how we would C 2021 and arrived you have anything to add.
Yes, I'm all out a couple of things good morning, Michael Thanks for the thanks for the question.
So the.
Pick up that we are seeing going forward really a senator on came oval as Tom alluded to so everybody knows that there was a slowdown from T. Mobile that began late in 2019 as they prepared for their merger with sprint that persisted through most of 2020 today. So that now that we're <unk>.
Wrapping that we've got a base of of growth to grow from and then with the new team will will deal we have contracted levels of business going into 2021. So we do see an acceleration there. The other carry that's been pretty consistent through through 2020. So that's been.
That's been good to see this year, so far and then related to the churn part of your question, we do see that churn for t-mobile happening over a multiyear period it really will begin.
In late 2021 and go out for a few years so about four years.
And we'll talk more about that Michael when we give guidance.
In February.
Thanks for those additional detail.
Next we go to a question from the line of Rick Prentice with Raymond James. Please go ahead.
Good morning, Hope you guys are doing well.
You too Rick.
Yeah, I want a couple of questions.
A couple of questions apologize I got pulled off their secondary to give my human firm. When you were getting your prepared remarks T mobile when they were talking about the new MLA said that the escalators could escalate overtime. Tom you mentioned before I got cut off the escalators are the kind of consistent with the three $3.
Have raised but how should we think about escalators plus usage and then churn effecting on kind of a multiyear basis to.
Do the numbers go up every yours or per cent going down and how how should we think about that comment from T. Mobile so as soon as we're going to escalate.
Well I you know I I think as as I mentioned before Rick.
There are two escalators that are part of this.
This agreement as is typical with similar types of agreement you have debate escalator.
Which we have it all as you well know and all of our agreements master agreements, which isn't the 3% to 3.5% range and and that is that will stay fixed or the entire.
The term of the contract.
On top of that is or what we call our use fee or or second escalator. That's on top of the the the the base escalator.
And that escalator.
Allows then and that's on an annual basis, and it's and it's determined based upon kind of the prior year monthly or the end of year run rates and that then allows.
Mobile to add equipment up to pre loading.
Agreements up to a certain rights on the agreement themselves.
And that escalator is also.
Enforce over the length of the contract now that second escalator. Unlike the first does decrease over time really as a result of the base getting bigger so it's a slightly lower escalator that it's apply.
To a higher base to drive consistent rates of incremental growth.
And so the comment was that I I believe that does the escalate and on that second escalator. The way we think about that that is in fact true, but it's really as I said a function of at the base is getting bigger and so you have a slightly.
Lower.
Use the escalator being applied to it to keep a consistent rate of incremental growth again as part of the comprehensive or elliptic agreement over the entire survey the agreement so that I think trying to trying to.
Tie the.
Connect the dots and tied together that's fundamentally how that agreements both escalators will work.
Okay, and and I know, you're Gonna give 21 guidance on the February call, but should we think about given all the complexity here, maybe you guys might consider giving multiyear guidance in the future.
Yeah that that's something that we are thinking about it I mean, I've been spending time with with variety or so it's very very possible just to give people a sense of of what it might look like in a multiyear period given the the churn that we are expecting in as a result of the kind of the sprint leases coming coming off but.
That's very very possible.
Okay and the last one for me you mentioned.
Rod mentioned dish.
Back half of 21 wrapping up alrighty, guys MLA discussions with them should we expect Illinois was the dish and could there be maybe see band effort earlier than when you suggest if people are aggressive the other carriers.
Well you know on on the desk question I don't want to get any any specifics with them or.
As you would expect where in.
Significant conversations with them Edward always talking to customers. They've stated that they are looking to start to build out their network I believe in the second half of the year and so we want to make sure that we are therefore them unable to service them to the to the extent that we can so there can't really a lot of conversation going on there.
As I said that like we have with all our customers. This evening and that's as possible in anticipation of of that spectrum being deployed carriers getting ready to to be able to participate in that that's always an opportunity. We believe I'm not sure how material that would be candidly Rick at this.
Point in time.
To tell you.
The the likes of a Verizon AT&T I mean, they deploy capital and are not a very regimented kind of measured way.
And so it's hard to say, if it would materially changed the timing or or direction of growth rates, but it's very possible that there might be some some acceleration of some growth as a result of that band in particular, becoming available.
Sorry, and it's also asking are you seeing anything from cable operators, who started buying some spectrum and a registered for some options on any activity from cable interested in your colors.
We've we've.
We've had we have cable customers.
<unk>.
You know again I don't want to get any any specifics there Rick uhm.
Particularly as it relates to kind of new entrants into the market but.
We're obviously I think well positioned to be able to services to the extent that they they go down that path.
So I appreciate you helping families employees they will lose close your time's. Good luck, yeah, you too Rick it'd be well thanks correct.
And our next question is from Matt and nicknamed with Deutsche Bank. Please go ahead.
Hey, guys. Thanks for taking my question just a few on international I guess more broadly are you seeing any.
Pause or slowing in the pacing of activity across you a larger markets.
Why they call it the macro or covid related pressures sort of hampering carrier spending plan and then just drilling down in terms of India KOLO, an amendment activity looks like it's moderated now for three straight quarters.
So I'm just wondering what's the latest you're seeing there and how should we think about the pacing of net organic growth from here. Thanks.
Yeah, No Hey man. Thanks. Thanks for the question I think on the contrary if I International markets, you know I continually see incredible densification initiatives and new build projects going on in and just about all of the market, whether it's Mexico, Brazil.
Down in Latin America.
Africa, we're seeing a significant increases in demand for bill to suits nuclear location orders. So I can go kind of by market and I can see significant levels of of increase in Cola orders as well as built the services as rides that are would continue to set records on built to suit activity.
So.
I think that's just indicative of the amount of Densification is kind of going on around the globe.
With particularly in India.
India again, we had on a gross basis kind of double digit growth rates.
And so what we see continued demand there I think there has been a a general a slowdown over overall not just regard the covid, but I think also with regard so.
Clearing through a lot of the a G R. A lot of those tax issues.
That put a.
<unk> slowed down if you will some of the level of spend that that the carriers, where we're doing in the marketplace, but but hopefully much of that will be behind us.
And the carriers I know I know are are really starting to.
Think about and move forward in terms of looking to kind of increase kinda rates of growth going forward Covid has impacted some of the bill to suit activity in the marketplace.
Getting permits and some of those types of things and and as you All know I mean, India has really struggle.
As.
Much of the world, but in particular, India struggled with with Covid.
Oh, particularly over the last several months. So I know that has actually slowed down some of the bill to suit activity, but on the gross side.
The the market's is very strong.
And so if I could just add a couple of points. There. So on the organic tenants billings growth. We did have a a basically a flat organic tenant billings growth for the quarter in India, but we had about 2.3%.
Added through the Newbuild program that Tom just mentioned so we built just shy of a thousand towers in India in the quarter and I'll, just remind everyone that in India or day, one returns on those new bills are solidly in the double digits, so even close to 14%.
Thanks Scott.
Yeah. Thanks, Matt.
And our next question is from John Atkins with RBC. Please go ahead.
Thanks, Uhm, so one one international in one U S. I guess I guess on the U S. Given again, although moving parts around the C. B O S T ban to dish and the T mobile sure that while I talked about can you frame the the U S. Organic close late next year, just sort of directionally higher or lower than what you were forecast.
For this year based on based on what you're seeing right now and then internationally.
Apart from India, or it sounds like you've made a little bit of a different assumptions with respect to bad depth. There was some sherpa. There's some gross leasing a lot to unpack theory, but what are the biggest some variables to think about cause we think about 2021, either by country or or within India, India is that country that would lead to kind of the most.
The ability of the outlook.
Would appreciate your perspective thanks.
Yeah, Hey, Thanks, Jonathan you know, we'll we'll get into specifics.
Or 2021 and on our next quarter's call.
I I think as as we've alluded to it we've talked that we would expect an increase in the gross on in the U S business.
Michael asked that wouldn't be before and I think it's a function of some of the activity that we're seeing happened with T mobile and and we're very bullish and what's going on in the U S market from and not a lot of different fronts not just in terms of the new spectrum of new technology being deployed but potential new entrants into the into the market continued growth in demand you know even though.
Rural as Asian process.
The government is driving in terms of trying to ensure that broadband is there for for all I mean, I think all of these would.
Clearly give us a a a bullish sense of what we would expect in the in the U S market over over the next couple of years in particular in 2021 gift on top of the ongoing demand that we see going on from a from a network usage perspective.
And internationally.
And in each of the markets. We just in terms of guidance for 2020, I mean, all of the all of the markets are up from a from a revenue perspective as I mentioned before their significant densification efforts going on in in all of the the markets you can always go market by market and and look.
Various metrics and you can <unk> you can see that there is you know significant new infrastructure that needs to be added a new sites that need to be added in those in those markets to be able to support the growth that they have going on in those markets and so.
As we've always said and as you all know you know the international markets are a couple of technologies department behind generally.
And so and without any.
Really strong wireline capability and so I'm in a pandemic, even the the market to the world that we're living in today, there's even more of a demand for wireless infrastructure in those markets and so I think all of that gives a a good backdrop for what we would expect growth to look like and.
And actually in those markets. We've always said, it's gonna be two to 300 basis points.
Foster then we're seeing in the not in the United States and if you take a look at you know even Q3 you look at the Latin America, you look at Africa, you know, they're all up and down kind of seven 8% range and.
And so it's the the the model works I think the strategy works and and we're very bullish in terms of what we're expecting to see in our international markets over the next several years.
The 5500 bills that that Upsized I'll look at it will take you gave us or any kind of a regional breakout that you could provide.
I mean, I think we have I mean right to give the the one I'm in India where up.
A bit it'll be seeing continued growth in India marketplace from a couple of the large carriers there so.
<unk>, there's an outside probably piece.
Piece of the 5500. It is it is there in his rod mentioned, we're getting double digit kind of.
Right to return right right out of the gate. We're seeing also has significant demand in in Africa.
In in Nigeria markets like Nigeria, Uganda, some of the market there we're seeing upticks in the overall built to suit activity, Brazil, you know.
It was a marketing we've always talked about it it's been.
He'd probably twice as many sites in the market is there are today I think to be able to meet that demand and provide kind of that good quality quality signal and so we're seeing increased demand for site builds an in Brazil as well so it it it's a bit of electric cross the three of them I'd say and you know I'm I'm home.
So that we're gonna be able to see continued increases in rates of built the suits going forward, it's our best rate of return.
Capital dollars spent in the business and so we worked very closely with our carriers to be able to kind of maximize that category of capex.
Yeah, and John very much to give it up and Jonathan I'll just give it a few numbers here to to support Tom's comment. So of the 5500, India is going to be the lion's share of that probably close to 3500.
In Latin America, maybe around 500 in Africa, you can think of that is about 1300 or so in that range and a and a handful in Europe, maybe 40 in Europe, and a and a small number in the U S.
Got it takes so much.
Next we have a question from Tim came along with Barclays. Please go ahead.
Thank you. Thank you just one one quick quick clarification, if I could and then it's been a question I just want to make sure I heard it right as far as done enough to to kill the chemo sprint Emily here, but it is the comment that this is likely going to be a four year period, I think I heard that and then second just to.
Interested in talking to a little bit on Europe, obviously still pretty small, but a few hundred 200 acquired sites. There could you give a little more color on that and maybe update us on on views there with the M&A landscape. This obviously.
Still a lot of activity in the Europe Theater and you guys are under represented so just an update there would be great. Thank you.
Yeah, No sure Tim.
<unk> as we said multiyear three to four years that you would expect to see a lot of that that churned kind of flushed through so hopefully that'll give you a sense of of the time period on that.
Europe has always been a market we've been looking at Europe for and getting deeper into the region.
For many many years and and we've always struggled from evaluation perspective, and a growth perspective, we we think of the U S business being the largest driver of of cash flow as as the kind of the developed market and and create J a consistent rate of growth and then we've looked at all.
Are your are are international markets candidly as ways to kind of increase the slope in the curve from a cash flow growth perspective, and so we're willing and have been able to take some higher levels of risk. If you will going into international markets using significantly higher risk adjusted hurdle rates.
But really the function of the core U U S business and so when we take a look at Europe as being a sort of a more of a developed market. The growth rates have just not been particularly strong you know I mean, the the beachfront properties that we have in France, and Germany, and and now just entered into into.
Poland the growth rates have been kind of in the 2% to 4% kind of rate of growth and so when we think about allocating capital you know that.
Generally hasn't been overly excited handling in terms of the overall rates of growth and and then when we take a look at that and the underlying valuations for a lot of the assets in particular markets, we really struggle with some of the growth expectations that you would have to realize to be able to support some of the.
The underlying valuations for those assets.
Now we're.
Given given the size and and kind of this scope of American tower, where part of of every deal to go down in the region and so.
We're watching it very closely we're participating in in certain areas.
As you said were undersized I guess relative to some of the <unk> for example in the marketplace, but but that's okay. I mean, where you know that that doesn't bother me in terms of our presence we're going to continue to look at.
A deal about every deal on its own and take a look at the underlying variables of the deal and the expectations of the deal and.
And to the extent that the the wrong and the Npv's can be sizable we'll look to participate in it and.
And and see kind of where we land in terms of being successful there, but you know.
Just because we're.
Relatively undersides versus the other place in the market, but that doesn't concern me at all we're all here about creating F.
Oh per share growth and Roissy road and to the extent that they can contribute to do those two variables, we're gonna weigh in and and and participate.
So what we'll see where that lands over then.
Continue developed there are <unk> there are a lot of assets as you said it was going to be coming up on the marketplace or a lot of large carriers, who are looking to monetize their assets. So there very well could be some opportunities there and as I said, we will just take a look at them one at a time.
Okay. Thank you very much okay. I think the other part of the question was the breakdown of the sites that we acquired in Q3. So we acquired a little over 300 site and Q3 195 of those orange.
We're in France. There are are arrangement with Orange, which we've talked about in the past and then there was an additional block here in Chile, and Peru, which are are additional tranches with the on the end Pal.
Agreement that we have so.
That makes up the majority of that that 305, so it's really in in France, Chilean Peru.
Okay, great. Thanks for the clarification.
And next I go to a question from David Barton with Bank of America. Please go ahead.
Hey, guys. Thanks for taking my question I.
I wanted to.
Hey, I wanted to come back to the T Mobile agreement a little bit you know last quarter.
You guys took T mobile out of your second half Guy.
Guidance your competitors.
Actually spoke pretty optimistically about what that was kind of mean.
For them and so the conclusion was that.
T mobile was steering business away from American tower in an effort to gain leverage to negotiate a new M. L. A and as a result of that as we look forward to.
Conversations they're going to emerge around the C band deployments, you know brand new networks, not going to be deployed everywhere only need to be deployed somewhere is there a thought.
That.
Other carriers fish included are gonna look at what T mobile dig in terms of how they steered business to some players and away from others to gain leverage in these negotiations that somehow the balance of power between the towers and the carriers might've changed somehow could you kind of comment on how you think that.
Might evolve in the next phase of network development.
Yeah, I mean, I I don't I don't think that's the case candidly.
You know I think given given me real estate that we have in our site that we have.
We're quite comfortable.
That the carriers are always going to have to come to US you know I mean, that's that's the kind of the beauty of the of the business that we have in the real estate that that we have I mean, we're all you know we're always in negotiations with with all the carriers, we're trying to meet their needs.
You know along the way as any typical kind of.
Lessor lessee kind of a relationship, but but I don't think there there's any real credence.
Credence to the fact that you know there's leverage this created as a result of moving or not coming onto our sites. I mean, we we have a very long term view.
Of our of our business of our customer base. We think that you know I think that's indicative of of kind of the 15 year agreement that we put in put in place with with T. Mobile we think that as we said in the past that these types of master lease agreements are incredibly strategic and important to us for a number of.
Reasons, you know not just a driving sizeable predictable growth.
But we also see really very sizeable growth overall as a result of the additional right to use kind of base escalator you know historically, if you look at ATC in the United States. We've garnered we generated over 50% of the new business in the United States.
On a fairly consistent basis, and so I think that's indicative of the types of relationships that we have with our carriers overtime are there are always other issues you know in terms of some of the negotiation sure we get some high price sites side could've been out there for a very long period of time that have escalators on.
And we work very closely with the carriers then to to.
Try to Ah bring those back to market, but then generating other types of value for us over over a long time. So you know.
We have we're in <unk> I'm in constant conversations with with R. U S Ah customers and and so I I don't see that kind of activity and if it does as I said it it would be noise and it would not in fact, the way, we think about our business or the way, we strike kind of a long term lease agreements with with any of our customers.
Got it okay. Thank you for that and then Rod could I ask you just one quick one.
You mentioned that part of the the guidance.
I was in the corner was slated to non one right outperformance soccer's could you kind of elaborate a little bit on what those were and what they contributed.
Sure David I think <unk>, I think you're referring to the queue three numbers. So the non run right items there primarily in India, We had a few settlements in India.
About $25 million worth of settlements in India that will not be recurring that were in our Q3 numbers.
Got it okay. So that was the the big Delta and the and the.
It performs right. Thank you so much.
Correct.
And our next question is from Sammy better you with credit Suisse. Please go ahead.
Hi, Thank you for the question. So you know a lot of the questions today I've been focused on the model to three two results the escalators and it's often very helpful. But I wanted to just shift gears to the micro data center and to the edge compute commentary that you made earlier on the conference call and I think the one thing that a lot of market constituents and.
<unk> and the animals communities interested in is what is American towers core strategy entering this market is it going to be the provider of Colo is it going to be the the leasing aspect is it going to be the go to market with flecks sensual and other providers can just give us more color on what we should expect from a empty over the next couple of years on what your.
[noise] tactical strategy is going to be within the edge ecosystem that'd be very helpful. Just to get a good idea on where where all the chips are are gonna fall.
Right No no I I appreciate it. Thanks. Thanks for the question you know I I tried to cover that in some of my prepared remarks I mean.
At the highest level, we're really tried to create power like communications infrastructure business models, they're really augment if you will the value of our existing assets expand our revenue base.
Honda traditional tenants, if you will and.
And expand our role in that hold delivery system.
It's all about extending the platform and and clearly part of that platform is that compute capability and so.
<unk> looking as part of that platform at the computer transport functions and really trying to create ways of being able to incrementally provide service to our to our customers and so if you think about kind of.
Our longer term views of it where candidly looking at okay of the 40000 sites.
In the United States, which could all be considered edge compute locations. It is at the edge. It is at the very edge of the edge. If you will you don't have any of those sites would would put fit well.
In terms of fitting them out.
To be able to support.
The number of enterprise accounts to support Hyperscale or just apart data centers.
In ways, where we can provide and be really part of that process to provide lower latency types of applications and at each one of those sites then getting kind of real estate that we have you know how many shelters can we put it each one of those locations how much power can we drop into each.
One of those shelters and how many comes down to how many cabinets can we load up in each one of those shelters and so we're looking at.
<unk> potentially can hold two or three shelters eat shelter holding you know eight to 10 cats, each providing 100 kilowatt of power.
Into each one of those shelters themselves in a way that it can provide then cut really an on ramp or.
Accounts in that particular location and into the into the wireless world.
And so the the models that we have and and the trials that we have right now are trialling exactly that and looking at then what are the price points for each one of those cabinets can we get a traditional kind of 1900 to $2000 per cab in each one of those locations.
How stackable are are the shelter is going to be and then and really looking at what that demand is so we have several proof of concepts that we're working on in tandem with some potential partners and and and actually are looking at those now in front of certain enterprises to be.
Able to determine really what is the the opportunity there in terms of how far we go along to the.
The value prop scale, you know that that's to be determined.
Nearly we have co location in real estate. So those are kind of got any given then the question is okay. How far do we go up the stack and and then how do we provide those kinds of capabilities as as I mentioned in my remarks, it's not like we're looking to hire a thousand software engineers or you know 2000 sales reps to stop.
<unk> selling into enterprise accounts, and providing them access to cloud based services, that's not our skill set and so we would look to augment our capabilities with other capabilities to be able to jointly provide what we think could be a very interesting you know value proposition to to enterprise accounts.
Around around the country. So.
Time will tell whether this is early stages now as I said, we're we're really dedicated to add a number of resources dedicated to try to understand what this is what the capex requirements are gonna be at the site location and really again to come back to driving power like communications infrastructure business models.
So that's it and kind of it up.
Kind of a short couple of sound bites.
And and you're continually hear more and more about our strategy there as as it develops and as we continue to to.
To go down the journey.
Got it. Thank you that was actually a lot of detail just one quick follow up on that and this fall mainly has to do with domestic versus international and this micro opportunity a lot of the focus and the commentary has been focused on domestic deployment of micro data centers, but what about international right. There's clearly big differences in terms of how the.
[noise] network looks abroad, and do you see as being a much bigger opportunity abroad versus domestic at least within the next two to three years or is it going to be predominantly focused on domestic opportunities for now.
You know it as I mentioned before traditionally are international markets are a couple of technologies behind where they are in the United States.
Having said that though I think one of the real advantages that we bring.
To a venture is our global reach.
And the lack of really processing capability and many of our emerging market.
That we have today and so while I think this strategy will probably more will.
Actually developed in the United States, I think the real value ultimately, particularly as the as the as the world shrimps and as as the cloud learns.
Learns to <unk> will will connect to Soho and does moved to the edge I think the the global reach is actually a real interesting element to as I said, we bring to the party and so.
It's it's difficult to say how the the the the outside of the United States market might develop we might find in certain markets that it may develop more quickly and that's the kind of the edge compute capability.
Turns into more than just an urge you.
You May you may be able to cluster certain edge is to provide more of a metro data facility again, particularly in areas of the world, where there really isn't a lot of data center presence.
So it'll be very it's a very interesting question and one we're kind of getting our arms around and understanding exactly you know what are the benefits as a result of having that global reach I think candidly that they're significant and and we will try to leverage that as much as we possibly can.
Thank you very much.
And our final question comes from Boccia Levi with UBS. Please go ahead.
Great. Thank you a couple of follow ups on the team in my like and I think you adjusted the straight line for this year 20 million higher than the original guidance much of that and second in terms of as you look at the T mobile deployment.
You have a pretty good insight into the long term networks time would you would you be able to provide some colors do you think that you took a larger <unk> two months future activity with this long term contract and also to the extent that T mobile acquired my spectrum or does more.
Sites do you <unk> can you give us some commentary and turns out could there be upsides to this existing MLA or is it mostly captured.
At least for the next 10 years.
Yeah, no. Thanks out and then let me start and ride to get in.
To to add any additional color you know on on the straight line I mean, it's it's we just refining the calculations as you might expect it's a very complicated calculation and so it was just a kind of <unk> refinement of the calculation is that we were able to do so there's there's nothing remark.
Well I think going on with regards to.
The actual straight-line calculation and and with regards to your other question I mean.
All of our contracts your design to take more than our fair share of of the business and.
As I mentioned be before you know historically in the United States, we've captured over 50% of the new business in the United States and so our our our contractor designed to do that but in a way that is providing a meaningful capability in service to our customers and so with regards to the the agreement that we.
Put in and T. Mobile we are absolutely we believe more strategic to them you know, we're working side by side with them on a on a number of different initiatives.
As we typically do when we enter into these types of relationships clearly there is a desire for them to want to put more equipment on our site as a result of the fact that they're already paying for it and so you know as a result of that we would think that we would get an outside part of of their their business and so this is.
This is no no different and so to the extent that there there's accelerations, there's different initiatives that they're looking to undertake which knowing T. Mobile we would expect so.
We would hope that we would be really in the catbird seat in terms of being able to pick up a lot of that incremental business and and that's as I said historically, what these kinds of comprehensive holistic master lease agreements it really positioned us to be able to take advantage of I would hope so.
Got it thank you.
And Mister Koslowski I'll turn the call back over to you.
Great. Thanks, Leah. Thank you everybody for joining this morning and have a great rest of your day.
Yeah.
Ladies and gentlemen that does conclude your conference for today. Thank you for your participation you may now disconnect.
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