Ladies and gentlemen, thank you very much for standing by. Welcome to the SBA Second Quarter Results Conference Call. At this time, all participants are in a listen-only mode. Later we will conduct a question-and-answer session. Instructions will be given at that time. As a reminder, this conference is being recorded. I would now like to turn the conference over to our host, Mark DeRussy, VP of Finance. Please go ahead, sir.

Good evening and thank you for joining us for SBA's second quarter 2022 earnings conference call. Here with me today are Jeff Stoops, our President and Chief Executive Officer; and Brendan Cavanagh, our Chief Financial Officer. Some of the information we will discuss on this call is forward-looking, including, but not limited to, any guidance for 2022 and beyond. In today's press release and in our SEC filings, we detail material risks that may cause our future results to differ from our expectations. Our statements are as of today, August 1, and we have no obligation to update any forward-looking statements that we may make. In addition, our comments will include non-GAAP financial measures and other key operating metrics. The reconciliation of and information regarding these items can be found in our supplemental financial data package, which is located on the landing page of our Investor Relations website. With that, I will now turn it over to Brendan to discuss our second quarter results.

Thanks, Mark. Good evening. SBA continued building on our strong first quarter with an even better second quarter with across-the-board results ahead of our expectations and a backlog supportive of an equally good, or possibly even better, second half of the year. Total GAAP site leasing revenues for the second quarter were $580.2 million, and cash site leasing revenues were $570.4 million. Foreign exchange rates were largely in line with our previously forecasted FX rate estimates for the quarter but were a tailwind on comparisons to the second quarter of 2021, positively impacting revenues by $3.4 million on a year-over-year basis. Same-tower recurring cash leasing revenue growth for the second quarter, which is calculated on a constant currency basis, was 4.4% over the second quarter of 2021, including the impact of 3.7% of churn. On a gross basis, same-tower growth was 8.1%. Domestic same-tower recurring cash leasing revenue growth over the second quarter of last year was 7.1%, on a gross basis and 4.1% on a net basis, including 3% of churn. Domestic operational leasing activity or bookings, representing new revenue placed under contract during the second quarter, was very strong again and incrementally higher than the first quarter of this year. In addition, our domestic new lease and new amendment application backlogs remain very healthy as well. The combination of our strong second quarter leasing activity level and our backlogs have allowed us to increase our outlook for new 2022 domestic site leasing revenue from organic lease-ups. During the second quarter, amendment activity represented 66% of our domestic bookings, with 34% coming from new leases. The big four carriers—AT&T, T-Mobile, Verizon, and Dish—represented 96% of total incremental domestic leasing revenue signed up during the quarter. Internationally, on a constant currency basis, same-tower cash leasing revenue growth was 5.6% net, including 7.1% of churn, or 12.7% on a gross basis. International leasing activity was very good again and also higher than we saw in the first quarter. We continued to see strong customer activity levels in many of our markets, as well as increased contributions from inflation-based escalators. In Brazil, our largest international market, we had another particularly strong quarter. Same-tower organic growth in Brazil was 14.2% on a constant currency basis. International churn was elevated in the quarter as anticipated, due primarily to carrier consolidations and other customer financial challenges, mainly in Guatemala and Panama. During the second quarter, 80.6% of consolidated cash site leasing revenue was denominated in US dollars. The majority of non-US dollar-denominated revenue was from Brazil, with Brazil representing 13.1% of consolidated cash site leasing revenues during the quarter and 9.9% of cash site leasing revenue, excluding revenues from pass-through expenses. Tower cash flow for the second quarter was $459.6 million. Our tower cash flow margins remain very strong with a second quarter domestic tower cash flow margin of 84.9% and an international tower cash flow margin of 67.2% or 90.3% excluding the impact of pass-through reimbursable expenses. International tower margins were impacted on a year-over-year basis by our new, less mature Tanzania assets. Adjusted EBITDA in the second quarter was $437.8 million. The adjusted EBITDA margin was 68.2% in the quarter. Excluding the impact of revenues from pass-through expenses, the adjusted EBITDA margin was 73.3%. Approximately 96% of our total adjusted EBITDA was attributable to our tower leasing business in the second quarter. During the second quarter, our services business produced record results for the fifth quarter in a row with $71.8 million in revenue and $17.3 million of segment operating profit. We also continued to replenish and build even higher our services backlogs, finishing the quarter once again at a higher level than the prior quarter, notwithstanding our record second quarter results. Based on this backlog, our strong second quarter, and the continuing high activity levels by our customers, we have raised our outlook for full-year site development revenue by $40 million. Adjusted funds from operations, or AFFO, in the second quarter was $335.3 million. AFFO per share was $3.07, an increase of 16.3% over the second quarter of 2021. During the second quarter, we continue to expand our portfolio, acquiring 210 communication sites and one data center in Brazil, which we previously disclosed with our first quarter results for total cash consideration of $127.3 million. We also built 100 new sites in the quarter. Subsequent to quarter-end, we have purchased or are under agreement to purchase approximately 200 sites in our existing markets for an aggregate price of $85 million. We anticipate closing on these sites under contract by the end of the year. In addition, during the quarter, we entered into a contract with Grupo TorreSur, or GTS, to purchase their remaining approximately 2,600 tower sites in Brazil for $725 million. We anticipate closing on this acquisition during the fourth quarter of this year and expect these assets to produce approximately $68 million of tower cash flow during the first full year following closing, based on our current estimates of future exchange rates. These are assets we know well in a market we obviously know well, and this acquisition will be immediately accretive to AFFO per share upon closing. Jeff will share a little more about this acquisition in a moment. In addition to new tower and other assets, we also continue to invest in the land under our sites. During the quarter, we spent an aggregate of $9.9 million to buy land and easements and to extend ground lease terms. At the end of the quarter, we owned or controlled for more than 20 years the land underneath approximately 72% of our towers, and the average remaining life under our ground leases, including renewal options under our control, is approximately 36 years. Looking ahead now to the rest of the year, this afternoon's earnings press release includes our updated outlook for full-year 2022. We have increased our outlook across all of our key metrics based on a combination of outperformance in the second quarter, strengthening activity levels in both services and leasing, lower churn expectations, and anticipated contributions from the pending GTS acquisition. These items were partially offset by weaker foreign exchange rates and higher interest costs from the outlook previously provided with our prior quarter earnings release. We are excited about the current operating environment and pleased with how our team has been able to execute in order to produce better-than-expected results and support our customers at a high level with all of their network initiatives. With that, I will now turn things over to Mark, who'll provide an update on our liquidity position and balance sheet.

Thanks, Brendan. We ended the quarter with $12.6 billion of total debt and $12.3 billion of net debt. Our net debt to annualized adjusted EBITDA leverage ratio was 7.0 times, which is at the low end of our target range. Our second quarter net cash interest coverage ratio of adjusted EBITDA to net cash interest expense was 5.3 times, equaling last quarter, the highest in the company's history. As of the end of the quarter, the weighted average interest rate of our outstanding debt was 2.9% with a weighted average maturity of approximately 4.3 years, and the interest rate on 93% of our outstanding debt is fixed. As of today, we have $480 million outstanding under our $1.5 billion revolver. During the second quarter, we did not repurchase any shares of our common stock as we chose instead to pursue the Brazil acquisition. We currently have $504.7 million of repurchase authorization remaining under our $1 billion stock repurchase plan. The company shares outstanding at June 30, 2022, were 107.9 million compared to 109.5 million at June 30, 2021, which is a reduction of 1.5%. In addition, during the second quarter, we declared and paid a cash dividend of $76.6 million, or $0.71 per share, and today we announced that our board of directors declared a third-quarter dividend of $0.71 a share, an increase of 22.4% over the third quarter of last year. The dividend will be payable on September 20, 2022, to shareholders of record as of the close of business on August 25, 2022. With that, I'll now turn the call over to Jeff.

Thanks, Mark, and good evening, everyone. As you have heard, we had another great performance in the second quarter. All areas of our operations were very busy and executed at a very high level, producing better-than-expected financial results and setting us up well for the second half of the year. Despite higher interest rates and weaker FX rates, we have meaningfully increased our full-year outlook in all areas, including a $64 million increase in anticipated total revenue. Our strong results and increased outlook are driven by the current network investment initiatives around the globe. While there is a range in the degree of activity from each of our customers around the globe, collectively, they are producing very high levels of demand, which we expect will keep us very busy for the remainder of this year and well into 2023. As of this moment, we are not seeing any material adverse impact on our activity levels from supply chain labor or COVID-19 issues. In the US, each of our carrier customers remain busy during the quarter, signing up new leases and amendments, primarily associated with the build-out of their networks through the deployment of new spectrum. T-Mobile was very active during the quarter and continued their nationwide deployment of 2.5 gigahertz and 600 megahertz spectrum. Verizon and AT&T each increased their 5G-related signings with us from the first quarter, with each focused on C-band deployments and AT&T beginning to incorporate 3.45 gigahertz spectrum into their deployments as well. And Dish also contributed to the quarter, continuing to sign up new lease agreements in support of their nationwide 5G network build-out. We are excited about the upcoming 2.5 gigahertz auction, which will result in even more spectrum being deployed. Internationally, we also had one of our best organic leasing quarters in a while, coupled with increased CPI-based escalators in a number of our markets. International leasing activity was again led by strong new lease and amendment activity in Brazil, but we also saw significant executions in a number of our other markets, including South Africa and El Salvador. During the second quarter, we signed up 51% of new international revenue through new leases and 49% through amendments to existing leases—almost evenly balanced. The combined US and international new leasing revenue signed up during the second quarter were the best we have produced in about seven years. On top of these outstanding leasing results, our services business had its best quarter in company history, producing record services revenue and margin results for the fifth quarter in a row. Our services backlog finished the quarter at its highest level ever, increasing our confidence in US carrier activity for the balance of the year and allowing us to increase our services outlook by 33% over the initial guidance we provided in February. I am extremely pleased with the job our team has done to deliver outstanding support to our customers during this critical time. In addition to our strong operational performance during the second quarter, we maintained our disciplined and opportunistic approach to capital allocation. This quarter, we pursued a very attractive portfolio growth opportunity, evidenced by our agreement to buy the remaining 2,600 towers owned by GTS in Brazil. GTS is one of the longest tenured independent tower companies in Brazil, run by industry veterans we have known and respected for many years—individuals who know how to properly run a tower company. The majority of these sites are located in São Paulo state and most are located in urban or suburban areas. The sites have 2.1 tenants per tower, and we believe there are opportunities for growth, particularly with recent 5G spectrum options in Brazil as the driver. This will be our second acquisition of towers from GTS. We like the current dynamic in Brazil quite a bit, and we are pleased to incorporate these high-quality assets into our portfolio at a very accretive price. On this portfolio, OI and legacy Nextel leases represent 17% of the business. So while these towers present some variability around future churn outcomes, we believe we are uniquely positioned to maximize the future of these assets. This acquisition will increase SBA's total portfolio in Brazil by over 25% to over 12,500 sites, and we expect the towers will be integrated with little to no incremental SG&A expense. We believe this increased size and scale will be an asset in upcoming OI consolidation discussions and will also position us well to capture more of the necessary incremental network investment that will be required of the remaining three legacy M&Os. Finally, we will be able to absorb this transaction while still maintaining leverage in our target 7 times to 7.5 times range. We expect this will be a very complimentary value-enhancing investment in a market that we know very well. With regard to our balance sheet, we remain in good position. We have only one debt instrument representing 5% of our outstanding debt maturing in the next two years. 93% of our debt is fixed rate, and our weighted average interest rate remains very low at 2.9%. With respect to that one instrument due March 2023, our plan is to refinance that in the next six months as we watch and stay opportunistic around the credit markets. While incremental interest rates are higher, our access to capital remains very strong and we continue to be a preferred issuer in the debt markets we have historically used. We are really very well positioned to weather the challenging broader macro environment. In addition to our strong balance sheet, growing AFFO and the steady and growing operational environment of our industry, the majority of our largest costs are fixed or increase our cap. As a result, we believe we are not only able to withstand the current inflationary environment, but we are able to continue growing our AFFO per share, creating additional value for our shareholders. In closing, we are very pleased with our first half of 2022. Our team performed well against a very strong demand environment. I expect more of the same throughout the rest of the year and into 2023. I want to thank our customers and team members for their support and contributions to our success. I also want to take a brief moment to recognize and thank both Kurt Bagwell, our President of International, and Tom Hunt, our General Counsel, for their decades of service to SBA. Both will be retiring at the end of this year, but each has left an indelible mark on SBA and the industry. I appreciate their sacrifices and contributions and wish them all the best in retirement. And with that, we are now ready for questions.

And first we go to the line of Michael Rollins with Citi. Please go ahead.

Thanks and good afternoon. First, curious if you could give us an update on the domestic leasing environment. In particular, are you seeing any change in activity from AT&T after announced some of the progress it's made on mid-band spectrum deployment, and also what you're seeing out of Dish's build? And then just secondly, with regards to the acquisition, can you talk a little bit more about how the valuation might be contemplating that 17% of leasing that could be subject to some future rationalization? Thanks.

Well, clearly I'll take the last one first, Mike. Clearly, 10.5 times is an extremely attractive price that takes into account exactly that. We don't really believe any of the next revenue will stay on, and we have heavily discounted the old revenue as well in our underwriting. So yes, all that was taken into account when we arrived at the price. In terms of AT&T, I listened to their call and heard their comments and based on our observations in our markets, which are mostly suburban, highway corridor, and rural, I think the numbers that they were talking about mostly came from dense urban markets, which makes a lot of sense because that's how all new generational upgrades start. So we still have, in our opinion, a very, very long way to go with AT&T and their C-band and 3.45 work, and Dish is a very active contributor. They would represent most all of the new leases that we are signing domestically. So there will be some ebbs and flows as they work around their— they have already worked around their 2022 regulatory requirements and are now going to be working towards their 2023 regulatory requirements, but still a very, very active participant.

Next, we'll go to line of Batya Levi with UBS. Please go ahead.

With the leasing activity ramping up towards the end of the year, do you think that bodes well for the activity we should expect for '23? I know you're going to provide formal guidance later, but in terms of trajectory, some comments would be helpful to think about puts and takes into next year. And another question on churn: it has been coming lower than you had expected. Is that pushed out to next year, or are you seeing lower decommissioning than you had prior expectations? Thank you.

Yeah, I think, Batya, the most we could say about the trajectory is that the fourth quarter of this year we believe will be the highest growth rate of the year, and we'll let you extrapolate what that means going forward. And obviously we'll give a full review when we give our 2023 guidance. Brendan, I'm going to let you take the churn question.

Yeah, the churn is— you should mostly think of it as rolling into next year or future years; it's largely timing related as opposed to below our expectations. It's just the timing, primarily around the Sprint, T-Mobile decommissioning is a little bit more deferred than the estimates that we had made, but we don't expect the total to really be any different.

Great. Maybe just to follow up on that, Brendan, I think you had originally said maybe it's $30 million in '22. Should we assume that it's closer to $27 million now, and then if you could give us guidance for '23, that'd be great.

Yeah, it was— well, last quarter we actually brought it down about $3 million, and we brought it down about another $3 million this quarter. So this year is probably closer to $24 million, that's what's assumed in our numbers right now for '22. And next year, we're probably somewhere in the $15 million to $25 million range. It's a fairly wide range, but obviously there are some uncertainties around exact timing, but somewhere in that $20ish million level.

And next, we'll go to the line of Ric Prentiss with Raymond James. Please go ahead.

I want to follow up on some of Michael's questions. Why was now the right time? Was it just the right price as far as doing the GTS deal? And help us understand maybe as we should think about the total exposure to Nextel and timing for Nextel to affect your international operations, and I've got a follow-up.

Yeah, it was the right time because the opportunity presented itself at a time and on terms where we thought it was very attractive for our future value creation. What's going on in Brazil right now is they've got a fairly hawkish central bank. They have—I think they're a little bit ahead of the US in terms of their economy having been dancing around a recession. The demand, notwithstanding that for cellular and 5G continues to mushroom in Brazil. You have this rationalization going on with the oil transaction for three carriers who now have bought a lot of new spectrum that needs to be deployed and are in a better market share position to do all that. So we like the dynamic a lot, Rick, and we know these assets well, and we know the sellers well, and all things kind of came together in the right way.

Yeah, Rick, we've been kind of ballparking on our portfolio at about $20 million to $30 million US over the next many years. This portfolio actually reduces our exposure to oil on a percentage basis in Brazil but would probably add somewhere in the $3ish million of incremental oil churn would be our current estimate.

Okay. And you all know me; I really harp on this whole amortization of prepaid rent. I don't like it. I know you have to account for it. It's just—it's not cash. Yours has been very tiny. I think about $25 million. Crown did acknowledge and provide a table this earning season on where their level was at $560 million, dropping it to maybe $450 million, maybe going in, and lower American tower talked about theirs had been maybe $140 million dropping to $110 million. Should we think of your kind of $25 million a year as a good number? Because again, we really think cash, AFFO, and funds available for distribution is the right way to do valuations.

Yeah, that's— obviously it's been trending down. Part of the reason it's trending down, Rick, is because as we've done amendments and had longer terms to some of our tenant leases, you amortize it over a longer period of time. So it's actually had a reducing effect. So it really is just a function of how much augmentation work we do that we get reimbursed for and which leases that relate to how much time they have. But I think based on the way that it's trended, that number that you just mentioned of $25 million or so is probably a reasonable estimate, but it's been higher in the past and it's been lower. So, we'll see how it goes, but I think that's a reasonable estimate.

Yeah. We're always going to disclose it very specifically, Rick, but it's not necessarily a bad thing. This is—

I love getting paid, right?

Understand it for what it is. So it's not something we look to discourage but you can depend on us that it's always going to be clearly marked out.

It's great for return on capital. I just like to think of it as net capital return on yield kind of thing, as opposed to an AFFO number. I just don't like it an AFFO.

Yeah, no, I hear you.

Next we'll go to line of Simon Flannery - Morgan Stanley. Please go ahead.

Great. Thank you. Good evening. On the M&A market, obviously the transaction multiple, you said it's accretive. It's certainly lower than we've seen elsewhere. Do you think this was a particular situation given the oil exposure, given the Brazil market, or do you sense a turn that maybe it's going to be easier to be a buyer in the private markets than it has been for the last couple of years? Anything changing there either in towers or for ground leases, etcetera. And then on the leverage you came down to seven-point times; obviously rates have been rising, you've got a great liquidity profile, but any updates you want to stay more towards the lower end or are you still happy right within that 7 to 7.5 going forward in this rate environment?

Yeah, I think as long as we can continue to produce the organic growth, Simon, we're fine in the 7 to 7.5 times. But, if we don't find good things to buy, it'll obviously be trending lower. In terms of your first question, I think there are some breaks on the margins that are happening around the world in terms of seller and buyer expectations coming more together. But in this particular case, this was more a situation of these particular assets, our familiarity with them, the fact that it was the last tranche of towers that the seller had and needed to sell them to basically liquidate some funds and do some things that private equity needs to do. So I would attribute it more to this deal than I would to a wholesale change in the buying environment. Although I do think that is improving.

And what sort of clarity can you give us on the—or what have you assumed on the timing of the next oil churn for these assets?

It's over the next several years. Some of it is specific to the timeframes of the terms of those agreements, Simon, and they're all spread out to different dates, but you should assume over the next three years roughly on average, but it won't be even; it'll be certain amount each.

So, that's $68 million includes presumably some churn in the next 12 months after closing.

A little bit. Yes.

Next, we'll go to the line of Nick Del Deo with MoffettNathanson. Please go ahead.

Thanks for taking my questions. First, two quick clarifications. First for Brendan. Brendan, you said that you expect about $3 million in oil churn from the GTS towers. Can you share what your expectation is for the next churn?

Yeah, I don't want to give the exact number, but there the oil, well, as Jeff said, we're assuming that all of the next revenue goes away. The total for oil and Nextel is about 17%. So Nextel is roughly half of that. So you can probably do the math from there.

Okay. That's great. Thanks. And then your expectation for other revenue in the US in '22, went from zero last quarter to $5 million this quarter. What that the function of, and was that realized this quarter?

Yes, it was realized this quarter. It's basically there's a few different things in there, but it's essentially what we consider cash basis revenue, which is stuff that we're collecting kind of one off. Sometimes there's extra fees that are paid or holdover fees, things that are not part of the recurring ongoing lease. So we classify it as other, but the increase is really that we got more of that than we expected. So almost all of that is stuff that we realized in the second quarter. There may be a small amount projected for the second half of the year, but most of it was actually realized.

Stuff that doesn't go in the $66 million bucket. Right, because we want to be careful as to how folks think about that year after year after year.

Okay. Got it. Great. That's terrific. And then one more substantive question and any change in behaviour from you'll call it non-traditional customers like cable that might be worth calling out that would suggest either they're more likely or less likely to be a meaningful customer in coming years.

No real change, Nick. No real change that comes to mind.

We'll go to the line of Phil Cusick with JPMorgan. Please go ahead.

Hey, guys, thanks. Just to go back to the US for a second, can you tell us, is there sort of flat and running steady from here, or is there sort of an acceleration happening in that one? Just trying to get an idea of what's driving the back half strength and the durability there. Jeff, it was interesting you mentioned, continuing strength in '23 and maybe '24. So anything you can add to us there? And then second, what's driving the service revenue growth and anything you can sort of help us on there if it's shifting at the margin. Thanks very much.

Well, the services revenue is pretty straightforward. It's just more activity, more stuff going, and our services business is almost entirely gained from our own towers. So it's just a lot of activity, Phil. And in terms of the— remember we report those growth rates on a trailing 12-month basis. So a lot of what you're going to see in our financial reports for the second or the third and the fourth quarter, we already know, it's already kind of on the books. So, that part of it, there's much less risk, so to speak than those, and as we move through the year as a calendar-year company, the risk drops and drops and drops. So here we are in August, our year isn't entirely baked yet, but it's pretty close. Yeah. And so to your question on Dish being a part of it, they're certainly a part of it because they've been a big part of our leasing activity success over the last, really last year. And so the timing of when those leases commence is a driver. And so it's certainly a contributing factor to the increasing growth that we expect in Q3 and Q4.

Yep. Jeff, you sort of cautioned us from taking that fourth-quarter exit run rate from this year and extrapolating that onto next year. Do you think that that's starting to look more reasonable as you get closer to 23?

I think I'd like to save all that till my 2023 guidance, Phil.

Next, we'll go to line of Matt Niknam with Deutsche Bank. Please go ahead.

I have one follow-up and one other question. The follow-up is just on the last question on services, any color you can share just in terms of the breadth of carrier contributions across the big four in terms of what's driving the upside on services. And then just, secondly, in terms of the edge strategy, any thoughts, updates in terms of how you're thinking about it, many difference in terms of how you're thinking about the relative to any use cases internationally? Thanks.

Well internationally, recall and we talked about this last quarter, the data center we bought in Brazil. We are having more advanced discussions there around CRAN and other carrier deployments that we'll tie into owning a data center and data center expertise. So that's encouraging, but in terms of the edge itself, we're adding couple three, four, five, maybe as many as 10 new facilities a quarter, but it's still we're not yet prepared to say the edge is here and it's at the tower site. It's all going in the right direction, but it still needs more time, certainly is still a ways off from being material. Now in terms of the services contributions, I believe in our 10-Q we disclose who our top services customers are. So I will accelerate that for you that, and it is T-Mobile, Verizon, and Dish are going to be the top three, right, Brendan? Yeah, for this quarter, T-Mobile, certainly the number one. Yeah, yeah.

Great. All right, appreciate it. Thanks, guys.

Next we'll go to line of Eric Luebchow with Wells Fargo. Please go ahead.

I wanted to check real quick. You mentioned the 2.5 gigahertz auction that's going on right now. Generally, most people think T-Mobile will be the only meaningful bidder there, but just wondering if you have any thoughts and kind of service overlap with some of the licenses that are up for auction, and whether you think that can be a meaningful contributor for you looking out the next year or two?

Well, a number of folks in addition to T-Mobile registered. I would agree with you; only based on what I read, most folks expect T-Mobile to be the big winner. And any kind of spectrum for us is new spectrum is going to prove valuable in one degree or another. Now, if it's folks who don't have existing 2.5 gigahertz spectrum to deploy, that's going to generally mean new radios and antennas. So that can be a little more impactful than not, but just having more spectrum and greater densification that will permit is a good thing. So, I'm not really going to speculate as to who else is going to put in bids that ultimately win the day. We're just happy that there's another auction, a very valuable mid-band spectrum that we know ultimately gets deployed.

Fair enough, and just related to T-Mobile; seems like they've been running at a pretty fast pace, but based on what they've said, it sounds like they'll be mostly done with their 2.5 and 600 overlays at some point, maybe by mid-next year. So wondering if you see any sign that they could moderate activity, or do you think maybe there's still some opportunity, especially with the C-band licenses and the 3.45 that they've got to deploy?

Yeah, I think there'll be opportunities. And I think when all of our customers talk about when this spectrum gets deployed, they generally talk about coverage, and that's just really the end of coverage is the beginning of densification and all the infill and other things that will ultimately be driven by consumer uptake of 5G apps and products. So when we think about these periods of additional investment, they have always in our history gone well beyond the dates that folks talk about achieving their pops—their desired pops coverage—because then it gets to densification, which is much different.

Next, we'll go to line of David Guarino with Green Street. Please go ahead.

Thanks. Just a quick one from me on the financing market. Did you guys mention how you're planning on funding the GTS transaction, and maybe for Brendan, if you could just comment on the relative attractiveness of a secured versus the unsecured markets today?

Yeah. On GTS, as of right now, we plan to be opportunistic in the financing markets. That financing, we haven't been specific about that. We do have the capacity on our revolver and with the cash that we're generating from operations to handle it if necessary, but we do intend to be opportunistic. We do have a maturity. Our next step maturity actually comes up in March of next year, and so that will be refinanced at some point between now and then, and there's capacity within our ABS structure to actually raise more money. So that might be a contributor. So we'll see how that goes. In the general sense of secured versus unsecured, I don't think they're obviously all up right now in terms of pricing. For us, there's still availability in any of the markets that we typically use. So it's not a question of access; it's really just a question of pricing, and so we intend to take our time and be opportunistic. And as was mentioned in the script, we have other than this one maturity that I mentioned, which represents about 5% of our outstanding debt, we don't have any maturities for over two years. So we have the flexibility to be a little bit patient with that. But I think you should expect we'll continue to use the secured markets as we have in the past. But a mix of both will likely be the path for us.

Yeah. And while we may be opportunistic, David, and raise the money from somewhere else for purposes of our outlook, it assumes cash on hand and a revolver draw.

Next, we'll go to line of Greg Williams with Cowen. Please go ahead.

Great. Thanks for taking my questions. First one's just on the mix of colo versus amendments. I think you noted you're at elevated levels like a third of the US, this new colo and two thirds amendments, and I think International's a 51-49 split. Curious to hear your thoughts on where that could go from here. We had sort of pish-ish levels. Jeff, you mentioned we're going to go from coverage to densification. I would imagine that you'd see more amendments that way. So curious to hear your thoughts there. Second question is just on the service margin. If you are seeing this five quarters in a row record, and you're going to more of a construction phase, would that mean the service margin could decline a bit as you shift away from like planning and designing towards construction? Thanks.

Well, the short answer to your last question is yes. So that could vary very well happen, and I'm sorry, what was color versus amendments and the mix in terms of a shift; if you kind of go back really the colo side of it in the US is heavily driven by Dish. And so as you have a little less Dish contribution, you see the percentage shifting more towards amendments, and I think with that, and the mix towards infill, as we talked about amendments will probably be trending higher as a percentage.

Yeah. When you think about how this is going to go, and there will be exceptions, of course, to this, but for the most part, the rollouts by T-Mobile, Verizon, and AT&T are going to be heavily amendment. For Dish, it's going to be more colo. And then when we get to the densification part, Greg, you kind of lean toward amendments, but I believe that you will see a higher percentage of brand new leases when we get to the densification stage.

And at this time, there's no one in queue.

Okay. Well, I want to thank everyone for joining us. We had a great quarter and we look forward to our next report. Thank you.

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