SBA Communications Corp (SBAC) — Q4 2020 Earnings Call Transcript

Good evening, and thank you for joining us for SBA's fourth quarter 2020 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 2021 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, February 22, and we have no obligation to update any forward-looking statement we may make. In addition, our comments will include non-GAAP financial measures and other key operating metrics. The reconciliation of and other information regarding these items can be found in our supplemental financial data package, which is located on the landing page of our Investor Relations website. With that, I'll now turn it over to Brendan.

Thank you, Mark. Good evening. SBA had a very strong end to the year with fourth quarter results near the high end of our outlook for all key financial metrics. Total GAAP site leasing revenues for the fourth quarter were $493 million, and cash site leasing revenues were $492.8 million. Foreign exchange rates were a $3.5 million tailwind to revenues when compared with our previously forecasted FX rate estimates for the fourth quarter. They were, again, however, a significant headwind on comparisons to the fourth quarter of 2019, negatively impacting revenues by $17.7 million on a year-over-year basis. Same tower recurring cash leasing revenue growth for the fourth quarter, which is calculated on a constant currency basis, was 4% over the fourth quarter of 2019, including the impact of 2% of churn. On a gross basis, same tower growth was 6%. Domestic same tower recurring cash leasing revenue growth over the fourth quarter of last year was 5.7% on a gross basis and 3.4% on a net basis, including 2.3% of churn. Domestic operational leasing activity or bookings, representing new revenue placed under contract during the fourth quarter, was at the highest levels of the year. We saw continued increased activity levels with T-Mobile during the quarter, and our domestic application backlog continues to grow. During the fourth quarter, amendment activity represented 88% of our domestic bookings, with 12% coming from new leases. The big three carriers represented 94% of total incremental domestic leasing revenue signed up during the quarter.

Thanks, Brendan. We ended the year with $11.2 billion of total debt and $10.8 billion of net debt. Our net debt-to-annualized adjusted EBITDA leverage ratio was 7.1 times. Our fourth quarter net cash interest coverage ratio of adjusted EBITDA-to-net cash interest expense was 4.4 times. After year-end, on January 29, 2021, the company issued $1.5 billion of unsecured senior notes due February 1, 2029. These notes accrue interest at a rate of 3.125% per year, and interest is due semiannually on February 1 and August 1 of each year, beginning in August 1, 2021. The net proceeds from this offering were used to fully redeem all of the outstanding 4% senior notes and to pay all premiums and costs associated with such redemption to repay the amounts outstanding at the time under our revolving credit facility and for general corporate purposes. As of today, we have $630 million outstanding under our revolver. And pro forma for the January unsecured notes issuance, the weighted average interest rate on our outstanding debt is 3.1%, with a weighted average maturity of approximately 4.7 years. During the fourth quarter, we repurchased 1.7 million shares of our common stock for $480 million at an average price of $290.89 per share. Subsequent to year-end, we have repurchased 549,000 shares for $144 million at an average price of $262.16 per share. All the shares repurchased were retired.

Thanks, Mark, and good evening, everyone. We had a strong finish to 2020 with solid financial and operating results. The fourth quarter was our best quarter of the year in terms of organic leasing activity and services results, and we added a number of high-quality assets to our portfolio. We produced $2.49 of AFFO per share, or $0.01 short of an annualized rate of $10 per share. Our AFFO per share for the quarter represented material growth over the prior year period and demonstrates the value creation capability of this business. We also continued to invest in our company through material share repurchases, buying back 1.7 million shares in the fourth quarter, and we did not slow down as we moved into 2021. Since year-end, we have signed up and closed on our large and exciting transaction with PG&E, repurchased an additional 0.5 million shares of our stock and signed up a master lease agreement with DISH. All of these activities will have long-lasting positive implications for SBA. We've demonstrated our ability over the years to find specific targeted opportunities where we can add assets at accretive prices and bring our expertise to bear in extracting and maximizing value. We're particularly pleased with the PG&E transaction. We've added a large number of high-quality, exclusive locations in Northern California to our portfolio at what we believe is an attractive price. We believe our experience and operational expertise will allow us to maximize the potential for wireless use of these assets for the benefit of both our wireless carrier customers and PG&E. With regard to our domestic leasing business, our customers are all turning their attention toward their 5G network investment plans. The significant investment in the current C-Band auction is evidence of the critical role that mid-band spectrum will play in the deployment of next-generation networks. And as a result, the importance of macro tower sites in the next wave of network investment. We believe it has been well settled that the primary use of C-Band spectrum will be on macro sites outside of urban markets.

Hey, thanks. Good afternoon, guys.

Hey, Rick.

Hey, a couple of questions. Jeff, obviously, the PG&E transaction is a pretty major transaction. Can you walk us through a little bit about 2021 guidance? And how much revenue there is associated with the tower cash flow? I assume not much operating expenses at their sites. But then also take us down maybe to EBITDA because I'd also expect not a lot of below the line costs.

You're right on both counts. Brendan?

Yes. Rick, so if you look at our bridge for 2020 and 2021, we've got about $40 million of non-organic revenue coming in. I would say, the majority of that, $35 million of that, is coming from PG&E.

Okay. And how about on the EBITDA area? Is it in that kind of $30 million, $35 million range?

Yes. It's within a couple of million dollars because the key factor is the ground rent. They own most of the land or have rights to it, so there is essentially no ground rent expense. This results in extremely high margins, allowing the vast majority of the revenue to contribute directly to the bottom line.

It makes sense. Jeff, one of the major discussions in the market right now is about the growth rates in the U.S. concerning same tower revenue and net organic cash. Considering the law of large numbers and factors like churn, while I’m not looking to give you a specific number like you had years ago, do you think we can return to mid-single digits? What’s your perspective on the long-term sustainable growth rate in the U.S. on a net organic cash basis?

Yes, I believe we can achieve upper single digits, although I’m uncertain about reaching double digits. This year, there are major carriers heavily involved in the C-Band auctions, which will create a lot of activity. Consequently, this could lead to delaying some current initiatives to the future. Additionally, DISH has clearly communicated its timeline for actions, which provides clarity regarding the pace and timing for 2021. This positions us well for a very compelling 2022 compared to 2021.

Makes sense. And then how should we think about the churn impact? DISH also on their call today was talking about T-Mobile had given DISH notice that they would turn off the CDMA. I don't think they said VoLTE, but they said they would turn off the CDMA network January of 2022. How should we think about the T-Mobile-Sprint relationship you guys have? And what the churn outlook looks like?

Yes, Rick. We previously announced on our last call that we have received non-renewal notifications from T-Mobile. For next year, which is 2021, this accounts for an estimated impact of about $4 million to $5 million in revenue loss. Additionally, based on the timing of lease expirations and our discussions so far, we anticipate an extra $3 million or so from them. When looking ahead, we're assessing the situation based on overlapping sites and the timing of lease expirations. Most of the financial impact from terminations is expected to occur in 2025 and 2026. We anticipate experiencing around 30% of the total exposure over the next three years.

Yes. And obviously, we'll be well suited to talk to DISH about any of those sites that T-Mobile decides they no longer want.

Makes sense. Thanks, guys. Stay well.

Thanks very much. Yes. I just wanted to get a sense of some of the organic U.S. growth drivers this year that you alluded to around C-Band and DISH. Anything that you're seeing kind of so far this year around application activity that gives you a sense of when the timing would be around rent commencement? And then if you don't mind also addressing some of the smaller potential drivers, U.S. cellular, cable as well in the context of C-Band? Thanks.

We have not factored any C-Band revenue into our 2021 guidance, including leasing guidance, and the same goes for DISH. While there are arguments and optimism that this could change and we might see revenue from it, it is not included in our current projections, Jon.

Okay. And then on Rick's question about the Sprint T-Mobile, on the keep sites project, are you getting any sense as you think about churn and the guidance that you gave, but any variability around where you're getting to get informed about the sites to get kept as part of that? How does that kind of play into your thinking? And where are they in that process?

Well, we've received quite a bit of information already, which we've been able to share with you on our outlook. But we don't know that we've received it all.

Right.

I believe we already have most of the information needed at this point based on the timing of notices and other factors.

Got it. Any update on SBA Edge?

Yes. We continue to have a number of opportunities that we're pursuing to actually move forward and tie. What we're focusing on, Jon, is the areas around the data centers to work on the direct ties between true mobile edge at the tower site type facilities, which have direct connections back, and we've got a number of different things that we're working on there. And we would just ask you to stay tuned there because we think there continues to be a lot of exciting opportunities and things that we can do there. But I think it's…

Thank you very much.

…it will be not a material contributor to 2021.

Got it. Thanks so much.

Hi, Jeff. In our previous conversations, we've discussed the timing of orders in relation to revenue and the execution duration. I'm curious about the C-Band orders. By the end of the second quarter, shouldn't there be orders in place if we expect any revenue in calendar 2021, possibly even by the end of this quarter? Can you remind us about the timing for that? I ask because Verizon has been conveying that they can quickly build the C-Band. However, we may need to reflect on how long it actually takes to process orders, which could be nine months or more before they start generating revenue for you. I'd prefer not to mention a specific customer; you can consider AT&T or T-Mobile as examples. You understand the question.

It's not quite 9 months. Well, we probably have, at the absolute minimum 4 but more likely 6.

Okay. So if we're to believe the ability to light up a C-Band market, then we should be hearing from tower companies, whether you or someone else C-Band orders by June 30, is that fair?

Yes.

DISH mentioned the substantial minimum lease agreement. Can you explain how that works? Does it mean they agree to a specific amount for 2022, or is it that they're committing to pay that amount over the life of the agreement? Which is it?

It involves multiple leases. While it can be viewed as a single agreement, there are specific financial terms established for each lease, with a minimum site requirement.

Got it. So that doesn't give us any sense on timing. It's just like he told you, we'll put up X thousand sites at some point over the next Y years.

We do have some scheduled breaks in there, so it is a bit more structured than that. Over the contract's duration, the commitments are due at various times, not just at the end. Some payments are due much earlier.

And then just one last question. Have you seen any initial deployments of massive MIMO antennas? I think there were some issues with ramping up production for certain spectrum bands. Perhaps we have to wait for C-Band, I’m not sure.

We've been seeing that for a while with T-Mobile-Sprint on the 2.5G.

Got it. I should be more specific. There might have been issues with the MIMO antennas related to C-Band, but I'm unsure why that would be happening until the auction concludes. I will save that question for a future quarter. Thanks, Jeff.

Yes.

So you guys noted that your leverage is going to be above your target post-PG&E, but trend down organically over the course of the year. Does that mean that any share repurchases or then activity are going to be somewhat restrained through year-end? Or would you be willing to stay above your target leverage for longer if the stock is attractively valued and you buy some more or if other M&A opportunities surface?

Well, it means we don't have to rush, but we would like to be at the high end of the target or below by year-end. But that statement gives us quite a bit of flexibility.

Yes. We have, just to be clear, Nick, I mean, we have plenty of capacity to continue to do typical levels of M&A and buybacks and still be within our target leverage range at the end of the year.

I think the key answer to your question is, are you going to rush to do it in one quarter? Or are you going to wait until the end of the year to preserve maximum flexibility? And the answer is the latter.

Okay. Okay. That's helpful. And then related to the DISH deal, obviously, one of your peers has talked about getting more than their proportionate share of business from DISH by virtue of their deal. Do you feel like you're well positioned to get your fair share of new business? And do you feel like you were well served by waiting some extra time to sign the deal?

Based on the firm commitment that we have, the answer is yes. So I guess the answer to your second question is yes.

Okay. That's good to hear. Maybe one more if I could squeeze it in. Has T-Mobile's leasing activity been recovering in the way you had expected it would a quarter or two ago? Or has it come in a bit slower?

No. I believe T-Mobile is performing as we anticipated. They are highly active, focused, and certainly a significant presence. Everything is quite dynamic, and we foresee a robust year ahead for them.

First, Jeff, now that you've completed the PG&E deal, it seems like this could bridge the gap between the tower sector and the utility sector that has existed for a long time. I’m curious if this creates a new total addressable market opportunity for you. Second, Brendan, regarding international churn, is the $10 million annual figure the new normal we should anticipate going forward? Specifically related to the PG&E deal, will it run at 8 to 9 in the first quarter, or will it gradually reach that 35 throughout the year?

Yes, why don't you go first, then I'll wrap it up with the more philosophical.

Sure. Yes. Well, I'll take the last one first. On the PG&E piece, it does step up a little bit during the year, but it's relatively small, David. I would expect it to not be significant steps up. There are escalators that are built in, and we would expect a modest amount of new lease-up. Obviously, we just brought these sites into our portfolio. So there will be some step up, but it will be generally run rated at the same pace. Of course, the first quarter will obviously be materially lower than the other quarters as we only have it in our portfolio for half the quarter. But on a run rate basis, it will be very small step up throughout the year. On the international churn side, the $10 million is definitely not the new normal. There are some specific things that are driving that number up. I do expect it, though, to be elevated probably next year as well. It's hard for us to say exactly what the number will be because we are in the midst of discussions with the carriers, where there's been some consolidation as well as the other customer where we've had some work with them to try and help them through some issues that they have. So I do expect that there will be additional impact next year, but the exact amount remains to be seen. But eventually, we'll get through those issues, and I would not expect to be at that level long-term.

Yes. In terms of whether this opens up a new source of relationships between tower companies and utilities, David, I mean, I think it remains to be seen. It's not the first. There have been a couple of other transactions between tower companies and utilities. They were not involving any of the publics, however, so this might be the third. And this one was fairly unique in particularly as to its geographic location, but we'll see. We've actually had more than a couple of inquiries. Utilities have very different primary considerations that they have to think about and it has to fit bearings, but we found certainly, in the case of PG&E that it did, and I'm sure that those characteristics could be met again. And because it's never the primary, and frankly, can't be the primary focus of a utility company to make tower leasing top of mind or the number 1 thing they think about, there's always going to be an element of improvement that can be an arbitrage there for the benefit of everyone. So we'll see. We'll see.

I just actually have 2 points of clarification and then just 1 quick question. First off, point of clarification, Jeff, when you're saying you think you're going to get back to high single-digit domestic growth...

I said mid, but go ahead.

I was going to ask if you're speaking about gross or net? And then my next question just real quick. When you said you're expecting T-Mobile churn for 2021, I heard 4 and 5 and I heard 7 and 8. Are you saying you were previously thinking 4 to 5, and now it's 7 to 8? And then my last question, the 299 sites that you've already committed to acquire, can you give us some color on where those sites are?

On the Sprint T-Mobile matter, the amount is $4 million to $5 million based on the notices we have received so far. The additional $3 million is an estimate included in our outlook regarding churn assumptions, which we have projected based on the anticipated timing of when those leases will expire. The 299 sites that are under contract from an M&A perspective are primarily located internationally, with a significant concentration in South Africa, along with several in Latin America. Regarding the growth rates, we believe there is potential for that to rise back to mid-levels, above 5%. The main obstacle we face is the churn related to Sprint T-Mobile, which will certainly impact our figures. However, if we can set that aside, there are significant growth opportunities ahead of us.

Actually, I thought Rick's question was gross.

So mid-level is a tough 5% net long-term domestic, you think is a reasonable expectation?

Yes. And obviously, higher gross.

Yes. And then just actually one real other quick one. You said that PG&E hasn't closed completely. What else is still left to close?

There's a small number of sites. So the total purchase price is about $973 million. We've closed on $954 million of that, so the vast majority of it. There's some number of sites that have certain specific issues that have to be addressed, but we expect them to be cleaned up in the next 6 months, and those sites will just close later.

So when we look at the expected leasing from the major wireless carriers, virtually all of the spectrum that they'll be deploying that they haven't used is at frequency ranges that's higher than what they have in their networks today. And so what that would imply is that their existing site grids are insufficient to fully utilize those bands. And with that as context, that sort of leads to 2 questions. One, as you look out and expect that leasing activity is going to ramp, as some of these spectrum bands get deployed, you've been very amendment heavy for a while with your leasing. I'm wondering if you do expect or maybe even have visibility into that being more balanced between new colocations versus amendments? And then the second is, I'm wondering, do you think that perhaps the nation's power grid is insufficiently dense such that there might be an emerging opportunity to do to a step up here of development of U.S. towers because historically, I think that has actually been your highest return on investment?

Yes. I think amendments will always play a big role, Brett, because they're the most efficient and I think economically beneficial for our customers. And then I think existing structures will get colocation because the existing regulatory regime tapers that. But yes, there'll be some more towers still. There's no question, not only because of the spectrum propagation, but because, I think on a perhaps totally unrelated reason, there's going to be a fair amount of emphasis on closing the digital divide and just bringing broadband to everyone, which is clearly going to require that some more towers get built.

Got it. If I could ask a quick follow-up, just around the same concept of densification. We know your opinion around small cells, but I'm wondering if there's any other emerging areas in infrastructure, maybe rooftops, where the economics could potentially become more favorable as these mid-band spectrum ranges are being deployed versus historically?

I think it has to depend on the facts and circumstances. I believe that wherever you can get a true tower, a macro site that always gives our customers the most bang for their buck, but I do believe you will see this spectrum used in conjunction with small cells as well in areas where you just don't get towers. It doesn't mean those areas aren't going to be served, they're going to be served by alternate architecture.

I just wanted to follow-up on the PG&E acquisition. Obviously, the 700 sites you acquired and then the additional 28,000 you have the right to market. Just wondering kind of the tenants per tower in that portfolio? And then on that 28,000, how many do you really think realistically tenants per tower you think you can drive and colocatability of perhaps some of those sites in terms of growing that portfolio from where it's at today, that would be helpful.

Yes. Currently, there are not many tenants per tower among the 28,000. They haven't really been marketed. As I mentioned earlier, we have around 900 tenants across roughly 700 sites. Carriers have had to connect with the right PG&E representatives, which is how this relationship functions, and we believe we can add more value here. To be honest, I can’t make any predictions regarding the 28,000, but I can assure you that we will find opportunities.

Okay. That's fair. And then just one more for me. It sounded like you at least had some additional capacity, perhaps later in the year for either share repurchases or additional acquisitions. So kind of where you sit today, the stock, 20% or so down from where you were at last year. I mean, do you think potentially share repurchases versus acquisitions, how would you think about it? It seems like tower cash flow multiples continue to be greater than 30 times in many cases, and your stock is trading well under that. So wondering how you kind of balance your thoughts on capital allocation, given those dynamics?

If we encountered the types of dynamics you mentioned, it would support the idea of stock repurchases, especially if more opportunities like PG&E arose.

I wanted to return to Brazil. You mentioned some significant spectrum auctions in international markets, including the upcoming ones in Brazil. What other auctions are on your radar? Additionally, regarding the C-Band bidding, there are concerns about the level of debt that carriers are accruing. Do you believe this could affect their ability to deploy C-Band quickly or influence their outsourcing strategies?

Canada has 3.5 gigahertz scheduled for June. South Africa is set to auction an entire suite of 5G spectrum next quarter. Peru is expected to have a major auction in the first half of the year, while Chile, Colombia, and Brazil are also included. Regarding the investments being made, I believe our customers are well-informed about their decisions. For the spectrum to be valuable, it needs to be deployed. I’m unsure about the exact costs involved, but it ultimately needs to be utilized. The timing of deployment—whether it's in one, two, or three quarters—does not significantly impact the overall value creation for us.

Regarding the PG&E deal, could you provide some details about the wireless contracts? How do they measure up against your current portfolio in terms of tenancy mix and contract length? Should we expect some churn from T-Mobile Sprint in this context? Additionally, concerning domestic churn this year, is the information you're receiving from T-Mobile primarily related to overlapping sites, or is there also churn from sites that are geographically close?

The tenant mix for PG&E largely consists of revenue from the three major wireless carriers. There is some overlap with Sprint, which we accounted for in our underwriting assumptions, but it's not significant since T-Mobile and Sprint are present at the same sites. The average remaining term for these tenants is approximately seven years, providing a substantial runway ahead.

Great. And the Sprint T-Mobile churn this year?

All of those sites.

On those sites, for this year, we're not really expecting to see any Sprint T-Mobile churn this year. So our numbers that we gave you on our outlook don't include anything for PG&E.

I'm sorry, for your existing portfolio, the approximately 8 million that you mentioned, is that primarily coming from overlapping sites, as you expect? Or...

Yes. So the $4 million to $5 million that we've already been noticed on, almost all of that is on overlapping sites. The remaining $2 million to $3 million is predominantly overlap sites as well.

Got it. And one more thing maybe on DISH. As we take out some of the equipment for the narrowband IoT network that they had put on your towers, would that show up as churn? Or would that be captured within the new deals that they have with you?

Well, it depends on what happens with those leases. There is a potential under our deal with them that they would transition those sites to their new architecture, in which case, it would just simply be an amendment depending on what the change was there based on the original lease. If they're actually going to cancel a lease altogether and not use that site, then it would show up as churn.

A couple of questions, if I could, on Slide 8 in the supplemental deck. So there's been a few different questions around how you may allocate capital in 2021. And just curious, I look at this slide, for the last 4 years, the range of capital allocation dollars in total has been about $1.4 billion to $1.5 billion. And just curious, given everything that you discussed on the call and the guidance that you outlined, is there a range of dollars for 2021 that we should keep in mind? And then you've also put the period ending leverage on this chart over the last few years, and just curious how you look at the influences of what would get you comfortable keeping net debt leverage at that higher end of the 7.5 times range you mentioned versus the lower end of 7 times? And just finally, I heard that $10 per share AFFO goal mentioned that you set out to reach 5 years ago. I'm just curious if you have a new 5-year expectation that you're considering or you may share with us just to provide a sort of a compass of what that future direction might look like?

Yes, I'll address the last question first, Mike. The answer is no. Despite how close we came and how proud we are of our understanding and projections of our business's operating components, we have found that the changes in interest rates and foreign exchange were beyond our forecasting abilities through the AFFO per share line. Therefore, we have decided not to proceed with that at this time. Regarding the potential capital expenditures, we can easily assess this by examining the EBITDA contribution outlined in our forecast. If you were to make certain purchases instead of buying back stock and ended up at a 7.5 times net debt-to-adjusted EBITDA ratio, that would provide the capital needed for your question. However, it's uncertain how things will actually turn out. It will depend on whether we opt for stock repurchases or acquisitions, and whether we choose to finish the year at that 7.5 times ratio. That decision will also rely on whether we continue to experience a favorable interest rate environment and if we maintain our optimism about the increase in carrier activity as we approach the end of the year and into 2022.

And just in terms of the leverage, what factors get you comfortable at that high end versus low end of the range? And not just maybe in the moment, but over time?

Well, I mean, over time, that would come down. In the moment, it would be because we found things that based on everything I just talked about, we thought it would be very value creative, we took advantage of it this year rather than letting it go by.

I wanted to follow up on the trend of new leasing activity and organic growth in the U.S. this year. You finished the fourth quarter with gross organic growth of around 5.7%, and it seems you're projecting 5.9% for the year in 2021. You anticipate that organic growth will consistently increase throughout the year. Can you clarify when you expect the lowest point to be and what we should expect for the exit rate for 2021 to gain insights into the growth we can expect in 2022?

Yes. Spencer, I mean, it certainly will be lower in the first part of the year, the first couple of quarters. We definitely expect to exit the year at a higher rate, not really prepared to say exactly what that is, but at a rate that is starting to ramp back towards where we've been in the past. Obviously, we're kind of at a low, you can tell by looking at our charts, the trajectory of where it's gone to. And we've talked a lot, I think about having a slower year than anticipated last year. That certainly affects what we report, for instance, in the first quarter and second quarter of 2021. But based on our expectations for the increasing activity in the latter part of the year, I would expect that we will exit the year in the fourth quarter at a rate that is higher than the average that's implied by our guidance, and it will build into next year.

Awesome. And just one more. It looks like you've got churn increasing next year, largely as a result of Sprint and T-Mobile churn, but it still seems like normalized churn, excluding other mergers is still hovering around 1.5%. I've always thought of the long-term opportunity for churn to fall below 1%, do you see a runway to getting there over the next couple of years?

Well, we've been there actually before. If you go back a couple of years ago, we were below 1%. But our historical range is typically between 1% and 2% right now. We're towards the higher end of that. And I would expect that there'll be times in the future where we're higher and times where we're lower, but it tends to fluctuate based on what's happening with specific carriers at specific times.

Two, if I could. Number one, maybe just a higher-level question. Given DISH is kind of a new player and the established players looks like they've spent a bunch on the C-Band auction, anything different that we're seeing or that you would expect from pricing or terms of new activity or amendments? And then second, on the CBRS and private side, have you seen any activity there starting to tick up to help as we go through 2021 and into 2022?

Yes. So Tim, on the DISH question, I mean, you say anything different on terms, well, it's actually a very different network. It's kind of the card from the whole full cloth and a clean sheet of paper. So no amendments, it will be brand-new installations of brand-new cell sites, different kind of equipment. So it's very hard to compare. It's just different. So I'm not quite sure what you're looking for in terms of comparing what the DISH terms and particularly rates are compared to, say, an AT&T, a Verizon, or a T-Mobile, it's just different. In terms of CBRS, actually, we are. And it's where it's showing up more and more frequently is as a solution to governmental, municipal, and school district providers as an elegant and cost-effective solution to bridge some of these digital divide issues that we've all been reading about. And these are some things that we've been participating in and actually are quite a bit excited about. Again, not material this year in terms of financial contribution, but technically and certainly from a community perspective, very exciting.

Jeff, I was hoping you could quantify the year-over-year change in the backlog number that you referenced at the start of the call?

Year-over-year, that was Brendan?

Yes. I mean, Brandon, it's hard for me to put an exact number on it. But our backlogs today are much higher than they were a year ago at this time. I can't give you a specific percentage on that. And obviously, the makeup of the backlog has a lot to do with how that plays out in terms of its financial impact, but they're definitely up. There's a lot more applications received.

Fair enough. Different question. Jeff, maybe could you walk us through your thoughts on potentially reaching an expanded MLA with T-Mobile or even reaching one with Verizon, I guess that goes above and beyond the T-Mobile agreement today. And really, what's keeping your business from being more heavily indexed to Verizon given your exposure there is relatively low?

We are open to any master licensing agreement with any customer; that's always been the case. It's really about reaching a mutual understanding. Currently, we have an agreement with T-Mobile, though it's not entirely comprehensive yet. In the future, it could evolve, and we are definitely open to discussions with T-Mobile on that front, just as we have been with DISH and historically with Sprint, T-Mobile, and others. Ultimately, it takes cooperation from both sides.

Just from my perspective, it would seem as if that there is a caret in that you guys have 70% of your T-Mobile or Sprint leases going off after the next 3 years, and that's 70% of their synergies. So I guess, do you see a win-win coming in the near term where you can get more clarity on what the potential churn in booking or backlog activity might look like in the more near term?

There are probably a lot of mutually beneficial outcomes that could happen there, Brandon. I don't think I want to negotiate with you over the earnings call.

Thank you for also squeezing me in. I just want to make sure I get the numbers right on the churn for 2021. And I think you said $8 million of churn from the T-Mobile-Sprint dynamic. And that's from your currently informed view. Does this mean that churn could potentially come in a little bit higher than that if T-Mobile decides to accelerate some of its cost rationalization and synergies?

Yes, it's unlikely because our estimates consider almost everything. There may be minor differences, but if there is a change, it would probably be slightly lower.

Got it. Got it. And then my other question has to do with M&A. And I know you've targeted very specific developing markets for your M&A mandates. But given recently one of your peers making a push into Europe, does this change where you may potentially be looking to do deals?

No. We actually look everywhere, but we only act where we think it's clear that we can create substantial value relative to the cost and the risk of the investment and we will continue to look broadly and widely and probably act narrowly.

Just on my comment on acquisitions. Can you comment on how competitive bidding is for tower assets in Latin America? And the reason I ask is it feels like the past 2 tower transactions we've seen in developed countries are really sought after and that's been reflected in the full prices that are paid. So are you seeing a similar dynamic in emerging countries?

I would say it's a little bit less pricey, David, but it's still pricing. We have to be very disciplined and very careful and understand what you're buying. And you have to start with the premise that it's only in the United States that you have the tax shield provided by the REIT architecture, which everywhere else, you're a taxpayer.