American Tower Corp (AMT) — Q3 2020 Earnings Call Transcript

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 our prepared remarks, under the Investor Relations tab of our website, www.americantower.com. Before the 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 if there are any minor technical difficulties, we would ask that you bear with us. Our agenda for this morning will be as follows: 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 expense initiatives and how we are positioned to benefit from continued wireless technology evolution; and finally, Rod Smith, our Executive Vice President, CFO and Treasurer, will discuss our third quarter results and updated 2020 outlook. 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 2020 outlook, capital allocation and future operating performance; our expectations regarding the impacts of COVID-19; our expectations regarding the impacts of the AGR 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 morning's earnings press release, those set forth in our Form 10-K for the year ended December 31, 2019, as updated in our Form 10-Q for the three months ended March 31, 2020, and in other filings we make with the SEC. We urge you to consider these factors and remind you that we undertake no obligation to update the information contained in this call to reflect subsequent events or circumstances. Now please turn to Slide 4 of our presentation, which highlights our financial results for the third quarter. During the quarter, our property revenue increased 3.4% to nearly $2 billion. Our adjusted EBITDA grew by 5.6% to approximately $1.3 billion. And our consolidated AFFO and consolidated AFFO per share increased by 14.7% and 14.5%, respectively, to $1.02 billion and $2.29. On an FX-neutral basis, growth rates for property revenue, adjusted EBITDA, and consolidated AFFO per share would have been 8.1%, 9.7%, and 19.5%, respectively. Finally, net income attributable to American Tower Corporation common stockholders decreased by roughly 7% to $464 million, or $1.04 per diluted common share. The decrease included the impacts of an FX loss of about $49 million in the quarter and a loss on retirement of long-term obligations of roughly $37 million. And with that, I'll turn the call over to Tom.

Thank you, Igor. Good morning everyone. Consistent with our past practice from 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. I'll also go into a bit more depth around two specific platform expansion initiatives, one in the United States and one outside of our core U.S. market. But before I elaborate on that topic, I wanted to briefly cover a few key points on the comprehensive master lease agreement, or MLA, 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 a 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. The MLA maintains the typical annual base escalator that we will recognize on the entire portfolio of included leases over the nearly 15-year term. This escalator is consistent with our historical 3% to 3.5% average rate included in our other U.S. based customer lease agreements. In addition to the base escalator, as is typical with our other comprehensive MLA agreements, there's an annual use fee or bonus escalator component. This additional annual use fee calculated as a percentage of the prior year's lease run rate is in force over the entire term of the agreement, and it allows T-Mobile to add equipment on certain sites up to pre-agreed loading levels. As a result of this use fee, we lock in contractually guaranteed revenue growth over and above the base escalator while T-Mobile will be able to more efficiently deploy their network, a win for both parties. In total, between their contracted backlog we already had in place before the deal, the approximately $17 billion in incremental contractual backlog from the agreement and a roughly 10% of our T-Mobile revenues that sit outside of the MLA, we expect to generate at least $23 billion in total revenue from T-Mobile through the contract term and bring our total consolidated contractually committed revenue to more than $58 billion as of the end of Q3. This backlog incorporates the impact of cancellations included within the agreement, which in total is expected to represent around 4% of our consolidated property revenue at the time they occur. Included in these contractual terminations are principally the legacy Sprint revenues that we extended for 10 years back in 2011. As you may recall through that contract, we were able to delay the significant impact that our peers experienced for more than five years. Having realized the NPV benefits from that, we will now see some of that deferred commissioning flow through our run rate over a multi-year 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 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 deploy 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. In fact, our conviction around macro towers being the primary infrastructure for 5G deployments has only increased. As more and more mid-band spectrum is deployed to support 5G, and this network usage continues to grow at upwards of 30% per year and even faster internationally, we believe that significant additional macro tower oriented network densification is inevitable.

Thanks Tom and good morning everyone. Thank you all for joining our call, and I hope you're well and remain safe during these challenging times. As you saw in 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 U.S. which brought our contracted base of committed future revenue across the company to over $58 billion. We believe that this MLA 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 in building nearly 1,500, which was a quarterly record. We continue to effectively manage through the challenges posed by COVID with a 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 the global pandemic. Moving to the balance sheet, we issued around $2.8 billion in U.S. dollar in 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 in liquidity and increased our euro-denominated borrowings to represent over 10% of our total debt. Finally, we declared a common stock dividend of $1.14 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.

Well, 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? Can you provide us with a framework or historical perspective on how to think about how much leasing activity can improve from the current run rate? And then just secondly, if you could help unpack the timing of churn related to the comprehensive deal that you signed with T-Mobile? Thank you.

Hey Michael, maybe I'll start and then, Rod can come in. What we'll come out with specific guidance, obviously in February of next year when we release earnings. But what we are seeing is, as we said on the last call, we expect that a pickup in activity from T-Mobile. So there is going to be one of the principal drivers of the pickup particularly early on in 2021. As we see the level of activity picking up in the latter half of 2020. So there are going to be one of the principal, I think drivers of that pickup. And with regards to kind of the C-Band question what we've seen historically, you've seen this as clearly as well being so close to us and to what the carriers are doing. They're going to be taking advantage and leveraging every last megahertz they have of the 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 at C-Band deployment schedule is going to be over a multi-year. And so they're going to continue to build out their current 5G 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 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 bands. But they're going to continue to deploy. So as I said, we'll provide more detail on that deployment in our Q4 call. But we're obviously, very bullish in terms of how we would see 2021. And Rod, you have anything to add.

Yes. I'll add a couple of things. Good morning, Michael. Thanks for the question. So the pickup that we are seeing going forward really is centered on T-Mobile 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 to date. So that – now that we're lapping that, we've got a base of growth to grow from and that was the new T-Mobile deal, we have contracted levels of business going into 2021. So we do see an acceleration there. The other carriers have been pretty consistent through 2020, so that's been good to see this year so far. And then related to the churning part of your question, we do see that churn for T-Mobile happening over a multi-year period. It really will begin in late 2021, and go out for a few years, about four years. And we'll talk more about that Michael when we give guidance in February.

Thanks, good morning. I hope you guys are doing well.

Well, I think as I mentioned before Ric. There are two escalators that are part of this agreement. As is typical with similar types of the agreement, we have the base escalator which we have in all as you well know in all of our agreements – master agreements which are in the 3% to 3.5% range. And that will stay fixed for the entire term of the contract. On top of that is our – what we call is our use fee or our second escalator that's on top of the base escalator. And that escalator allows then – and that on an annual basis, and it's determined based upon the prior year, monthly or the ending year run rates. And that then allows T-Mobile to add equipment up to preloading agreements, up to certain rights on the agreement themselves. And that escalator is also in force over the lane 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 applied to a higher base to drive consistent rate of incremental growth. And so the comment was that I believe that it does de-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 that the base is getting bigger. And so you have a slightly lower use fee escalator being applied to it to keep a consistent rate of incremental growth, again, as part of the comprehensive or holistic agreement over the entire term of the agreement. So that I think, I'm trying to tie to connect the dots and tie it together. That's fundamentally how that agreement, both escalators will work.

Okay. And I know you're going to give 2021 guidance on the February call. But should we think about given all the complexity here. Maybe you guys might consider giving multi-year guidance in the future?

That's something that we are thinking about. I mean I've been spending time with Rod and Igor. So that's very, very possible Ric, just to give people a sense of what it might look like on a multi-year period given the churn that we are expecting in as a result of the, kind of the Sprint leases coming off. But that's very possible.

Yes. I'm here, Ric. I think that’s a good idea. The multi-year guidance is something we'd look at, as part of the ongoing discussions we have internally as well.

We know, on the Dish question, I don't want to get into any specifics with them or as you would expect, we're in significant conversations with them, as we're 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're there for them enable to service them to the extent that we can.

I understand that, what I meant to also ask is just are you seeing anything from cable operators who have started buying some spectrum and are registered for some auctions? Any activity from the cable interested in new towers?

We've – and by the way we have cable customers today. Again, I don't want to get any specifics there Ric, particularly as it relates to new entrants into the market. But we're obviously, I think well positioned to be able to service them to the extent that they go down that path.

Hey, guys. Thanks for taking the questions. Just a few on international. I guess more broadly are you seeing any cause or slowing in the pacing of activity across your larger markets whether you like the macro or COVID-related pressure, sort of hampering carrier spending plans? And then just drilling down in terms of India, Colo and 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.

Yes. Hey Matt. Hey, thanks. Thanks for the question. I think on the contrary on international markets. I continually see incredible densification initiatives and new newbuild projects going on in just about all of the markets whether it's Mexico, Brazil, down in Latin America, Africa. We're seeing significant increases in demand for build to suit new co-locations orders. So I can go by market and I can see significant levels of increase in Colo orders as well as build to suit. As Rod said, I would continue to set records on build to suit activities. So I think that's just indicative of the amount of densification that's going on around the globe. With particularly in India, in India again, we hit on a gross basis kind of double-digit growth rates. And so what we see continued demand there. I think there has been a general slowdown overall, not just regards to COVID, but I think also with regard to clearing through a lot of the AGR, a lot of tax issues, I think that put a slowdown if you will. Some of the levels of the spend that the carriers were doing in the marketplace. But hopefully, much of that will be behind us and the carriers I now – I know are really starting to think about and move forward in terms of looking to increase kind of rates of growth going forward. COVID has impacted some of the build to suit activity in the marketplace in terms of getting permits and some of those types of things. And as you well know, I mean India has really struggled as much of the world. But in particular, India has struggled with COVID, particularly over the last several months. So I know that has actually slowed down some of the build to suit activity.

And Tom, if I could just add a couple of points there. So on the organic tenant billings growth, we did have 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, our day one returns on those new bills are solidly in the double digits. So even close to 14 %.

Thanks. So one international and one U.S. I guess on the U.S., given again all the moving parts around CBRS, and C-Band, and Dish, and the T-Mobile churn that Rod talked about. Can you frame the U.S. organic growth rate next year? Just sort of directionally higher or lower than what you were forecasting for this year based on – based on what you're seeing right now. And then internationally, apart from India where it sounds like you made a little bit of a different assumption with respect to bad debt there was some churn – there's some gross leasing a lot to unpack there. But what are the biggest variables to think about as we think about 2021 either by country or within India? If India is that country that would need to kind of the most variability in the outlook? I would appreciate your perspective. Thanks.

Yes. Hey, thanks, Jon. We'll get in the specifics for 2021 and on our next quarter's call. I think as we've alluded to it, we've talked that we would expect an increase in the gross in the U.S. business. Michael if that wouldn't be before and I think it's a function of some of the activity that we're seeing happen with T-Mobile. And we're very bullish on what's going on in the U.S. markets. I mean not a lot of different fronts not just in terms of the new spectrum, new technology being deployed, but potential new entrants into the market continued growth in demand. Even though the realization process that the government is driving in terms of trying to ensure that broadband is therefore for all. I mean I think all of these would clearly give us a bullish sense of what we would expect in the U.S. market over the next couple of years. And in particular in 2021, just on top of the ongoing demand that we see going on from a network usage perspective. Internationally, in each of the markets we – just in terms of guidance for 2020, I mean all of the markets are up from a revenue perspective. As I mentioned before they're significant densification efforts going on in all of the markets. You can always go market-by-market and look at various metrics, and you can – you can see that there is a significant new infrastructure that needs to be added. New sites that need to be added 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 well know, the international markets are a couple of technologies behind generally. And so – and without any really strong wireline capability, and so on – and a pandemic even the market, 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 good backdrop for what we would expect growth to look like in the internationally in those markets. We've always said it's going to be 200 basis points to 300 basis points faster than we're seeing in the United States. And if you take a look at even in Q3, you look at Latin America; you look at Africa they're all up in the kind of 7% to 8% range. And so, it's – the model works. I think the strategy works and we're very bullish in terms of what we're expecting to see in our international markets over the next several years.

The 5,500 deals that upsized outlook that you gave us to any kind of a regional pick out that you could provide?

I mean, I think we have. I mean Rod can give the one. I mean India was up a bit. We've seen continued growth in the India marketplace from a couple of the large carriers there. So there's an outsized, probably piece of that 5,500 that is there. And as Rod mentioned, we're getting double-digit rates of return right out of the gate. We're seeing also significant demand in Africa. In Nigeria – markets like Nigeria, Uganda, some of the markets there we're seeing upticks in the overall build to suit the activity. Brazil is a market we've always talked about. It's been indeed probably twice as many sites in the market as they are today. I think to be able to meet the demand and provide a good quality signal, and so we're seeing increased demand for site builds in Brazil as well. So it's a bit of a mix across the three of them I'd say. And I'm hopeful that we're going to be able to see continued increases in rates that built the suit going forward. It's our best rate of return capital dollars spent in the business. And so, we work very closely with our carriers to be able to kind of maximize that category of CapEx.

And Jonathan, I'll just give you a few numbers here to support Tom's comment. So of the 5,500, India is going to be the lion's share of that probably close to 3,500. In Latin America maybe around 500. In Africa, you can think of that as about 1,300 or so in that range and handful in Europe, maybe 40 in Europe and in a small number in the U.S.

Thank you. Thank you. Just one quick clarification if I could and then a question. I just want to make sure I heard it right as far as not to kill the team of Sprint MLA 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, I'm just interested in talking a little bit about 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 views there with the MLA landscape is obviously still a lot of activity in the European theatre. And you guys are underrepresented? So just an update there would be great. Thank you.

Yes. Sure. No, Tim. The churn in the – as we said multi-year, three to four years that you would expect to see a lot of that churn flush through. So hopefully that will give you a sense 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 we've always struggled from a valuation perspective and a growth perspective. We think of the U.S. business being the largest driver of cash flow as kind of the developed market and create a consistent rate of growth. And then we've looked at our Europe, our international markets candidly as ways to increase the slope of 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 is a function of the core U.S. business. And so when we take a look at Europe as being somewhat – more of a developed market, the growth rates have just not been particularly strong. I mean the beachfront properties that we have in France, and Germany and now just entered into Poland; the growth rates have been in the 2% to 4% kind of rate of growth. And so when we think about allocating capital that generally hasn't been overly exciting, candidly in terms of the overall rates of growth. And then when we take a look at the underlying valuations for a lot of the assets in the 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 underlying valuations for those assets. Now, we're – given the size and kind of the scope of American Tower, we're part of every deal that goes down in the region. And so, we're watching it very closely. We're participating in certain areas. As you said, we're undersized, I guess, relative to some of the – to Cellnex, for example, in the marketplace. But that's okay. I mean we're – that doesn't bother me in terms of our presence. We're going to continue to look at a deal by every deal on its own and take a look at the underlying variables of the deal and expectations of the deal and to the extent that the ROI and the NPDs can be sizeable. We'll look to participate in it and see kind of where we land in terms of being successful there. But just because we're relatively under sized versus the other players in the marketplace that doesn't concern me at all. We're all here about creating AFFO per share growth and ROIC growth, and to the extent that they can contribute to those two variables. We're going to weigh in and participate. So, we'll see where that lands over and it will continue to develop. There are a lot of assets, as you said. They're going to be coming up on the marketplace. There are 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'll just take a look at them one at a time.

Hi, Tim. Tim, I think the other part of your question was the breakdown of the sites that we acquired in Q3, so we acquired a little over 300 sites in Q3. 195 of those were in France through our 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 our additional tranches with the – on the Intel agreement that we have. So that makes up the majority of that that 305. So it's really in France, Chile, and Peru.

Hi, guys. Thanks for taking the question.

Hi, Dave.

Hi, Tom. I wanted to come back to the T-Mobile agreement a little bit, last quarter you guys took T-Mobile out of your second half guidance. Your competitors actually spoke pretty optimistically about what that was going to 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 MLA. And as a result of that, as we look forward to conversations that are going to emerge around the C-Band deployments, brand new networks not going to be deployed everywhere, only need to be deployed somewhere. Is there a thought that other carriers, DISH included, are going to look at what T-Mobile did in terms of how they steered business to some players in a way from others to gain leverage in these negotiations that somehow the balance of power between the towers and the carriers might have changed somehow. Could you kind of comment on how you think that might evolve in kind of the next phase of network development?

Yes, Dave, I mean, I don't think that's the case candidly. I think given the real estate that we have and the sites that we have, we're quite comfortable that the carriers are always going to have to come to us. I mean, that's kind of the beauty of the business that we have and the real estate that we have. I mean, we're always in negotiations with all the carriers. We're trying to meet their needs along the way is any typical kind of lesser or lessee kind of a relationship, but I don't think there's any real credence to the fact that there's leverage that's created as a result of moving or not coming onto our sites. I mean, we have a very long-term view of our business, of our customer base. We think that I think that's indicative of kind of the 15-year agreement that we put in place 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, not just to driving sizable predictable growth, but we also see really very sizable growth overall as a result of the additional right to use kind of base escalator. 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 over time.

Got it. Okay. Thank you for that. And then Rod, could I ask you just one quick one. You mentioned that part of the guidance in the quarter was related to non-run rate outperformance factors. Could you kind of elaborate a little bit on what those were and what they contributed?

Sure, Dave. I think you're referring to the Q3 numbers. So, the non-run rate items, they're 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.

Hi. Thank you for the question. So a lot of the questions today have been focused on the model, the 3Q results, the escalators, and it's all been 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 the analyst community is interested in is what is American Tower's core strategy entering this market? Is it going to be the provider of Colo? Is it going to be the leasing aspect? Is it going to be the go-to-market with Flexential and other providers? Can you just give us more color on what we should expect from AMT over the next couple of years on what your tactical strategy is going to be within the edge ecosystem? That'd be very helpful just to get a good idea on where all the chips are going to fall.

Right. No, no, I appreciate it. Thanks for the question. I tried to cover that in some of my prepared remarks. I mean, it's the highest level. We're really trying to create tower like communications infrastructure business models. They really augment, if you will, the value of our existing assets, expand our revenue base beyond the traditional tenants if you will and expand our role in that whole delivery system. It's all about extending the platform. And clearly part of that platform is that compute capability. And so, we're looking as part of that platform and the compute transport functions and really trying to create ways of being able to incrementally provide service to our customers. And so, if you think about kind of our longer term views of it, we're candidly looking at okay of the 40,000 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. How many of those sites would fit well in terms of fitting them out to be able to support the number of enterprise accounts, to support hyperscalers, to supplier 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 given kind of the real estate that we have, how many shelters can we put at 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 new shelters? And so, we're looking at sites that potentially can hold two or three shelters, each shelter holding 8 to 10 cabs each providing 100 kilowatt of power into each one of those shelters themselves in a way that it can provide them kind of really an on-ramp for accounts in that particular location into the wireless world. And so, the models that we have and the trials that we have right now are trialing exactly that. And looking at then what are the price points for each one of those cabinets, can we get a traditional kind of $1,900 to $2,000 per cab in each one of those locations. How stackable are the shelters going to be? And then – and really looking at what that demand is. And so, we have several proof-of-concepts that we're working on in tandem with some potential partners and actually are looking at those now in front of certain enterprises to be able to determine really what is the opportunity there.

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 are clearly big differences in terms of how the network looks abroad. And do you see edge 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?

As I mentioned before, traditionally our 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 in many of our emerging markets that we have today. And so, while I think the strategy will probably more – will initially develop in the United States. I think the real value, ultimately, particularly as the – as the world shrinks. And as the cloud learns – we'll connect this off and does move to the edge. I think that our global reach is actually a real interesting element to what, as I said, we bring to the party. And so, it's difficult to say how the outside of the United States market might develop. We might find in certain markets that it may develop more quickly and that the kind of the edge compute capability turns into more than just in edge. You may be able to cluster certain edges to provide more of a metro data facility. Again – and particularly in areas of the world where there really isn't a lot of data center presence. So it will be very interesting question and one we're kind of getting our arms around and understanding exactly what are the benefits as a result of having that global reach? I think candidly that they're significant and we'll try to leverage that as much as we possibly can.

Great. Thanks, Leah. Thank you everybody for joining this morning and have a great rest of your day.