Good day, and welcome to the Crown Castle second quarter 2024 earnings conference call. All participants will be in a listen-only mode. Should you need assistance, please signal a conference specialist by pressing the star key followed by zero. After today's presentation, there will be an opportunity to ask questions. To ask a question, you may press star, then one on a touch-tone phone. To withdraw your question, please press star, then two. Please note, this event is being recorded. I would now like to turn the conference over to Kris Hinson, Vice President of Corporate Finance and Treasurer. Please go ahead. Thank you, Betsy, and good afternoon, everyone. Thank you for joining us today as we discuss our second quarter 2024 results. With me on the call this afternoon are Steven Moskowitz, Crown Castle's Chief Executive Officer, and Dan Schlanger, Crown Castle's Chief Financial Officer. To aid the discussion, we have posted supplemental materials in the investor section of our website at crowncastle.com that will be referenced throughout the call. This conference call will contain forward-looking statements, which are subject to certain risks, uncertainties, and assumptions, and actual results may vary materially from those expected. Information about potential factors which could affect our results is available in the press release in the Risk Factor sections of the company's SEC filings. Our statements are made as of today, July 17th, 2024, and we assume no obligation to update any forward-looking statements. In addition, today's call includes discussion of certain non-GAAP financial measures. Tables reconciling these non-GAAP financial measures are available in the supplemental information package in the investor section of the company's website at crowncastle.com. With that, let me turn the call over to Steven. Thanks, Kris, and good afternoon, everyone. We appreciate you joining us for this call, and, as you can see from our second quarter results, we delivered solid operating and financial performance in all three of our businesses and reiterated our full year 2024 outlook. We're confident in our outlook based on having 95% of our expected tower revenue growth for this year contracted, either as part of our holistic Master License Agreements with our major customers, or with revenues from regional and local wireless customers, and also having implemented changes to our fiber segment, which will position us to generate more profitable business and increase our operating efficiencies. In the tower business, we anticipate organic revenue growth of 4.5% this year and believe that as we look out over the next few years, our growth rate will be higher based on three factors. First, the holistic master license agreements we have with our largest customers provide us a stable and consistent level of growth over time. Second, industry forecasts estimate that long-term U.S. wireless data demand growth will continue to drive the need for significant future communications infrastructure investment. We are aware that major carriers still have lots of work to do to expand their networks in the 5G build cycle. Finally, we believe that as more tangible steps are taken by our company to be a best-in-class supplier of low-cost shared infrastructure solutions, we'll be better positioned to compete for a higher share of revenues as our customers continue to invest in their networks. Moving to our fiber and small cell businesses, we've completed many of the changes to our operating plans that we announced in June, and have started to see the benefits of those changes through more profitable growth and greater operating efficiencies. As part of the operational review of our fiber segment, which we conducted earlier this year, we affirmed that greater opportunity exists to provide additional customer solutions to enterprise fiber connections and small cell locations that are on or near our existing high-quality fiber footprint, which allows us to add revenue without the requirement to invest as much capital as we've done in the past. To implement these changes in our small cell business, our commercial and deployment teams have been working collaboratively with our customers on a mix of outcomes, many of which improves our project economics, while also addressing our customers' evolving priorities around network densification and capital allocation. As part of this change in our operating plan, we plan to build fewer anchor nodes in the short run. However, given our large pipeline and our customers' long-term densification needs in geographies where we have really robust assets in place, we continue to expect there is sufficient demand to grow small cell revenues by double digits over the next several years. Turning to our fiber solutions business, we believe we can improve returns by focusing our sales efforts on or near-net opportunities that reduce discretionary capital expenditures going forward. To support these changes, we've already adjusted our go-to-market commercial plan. We've changed our sales incentive award system and increased our required rates of project returns, resulting in anticipated shorter payback periods on invested capital. So like in our small cell business, we analyzed the markets around our fiber assets to quantify the opportunities to utilize our existing fiber, and we believe we have ample opportunities to improve capital efficiency while achieving long-term organic revenue growth in fiber solutions of 3% per year. As we announced in June, we believe our more focused effort to target on-net and near-net demand in both small cells and fiber solutions will drive a more efficient use of capital and will also generate approximately $100 million of annualized run rate cost savings. Importantly, we implemented most of these changes by the end of the second quarter, which keeps us on track to generate approximately $60 million of expected cost savings and reduce capital expenditures by about $300 million for this year. As we continue to deliver solid results and make operational changes, we remain focused on the fiber strategic review, which is active and ongoing. The management team and I continue working with the Fiber Review Committee, the board of directors, and external consultants to evaluate strategic alternatives to determine how to maximize shareholder value. Now, we can't share much more about the process and the timing. What we can share is that we remain actively engaged with multiple third parties who continue to show a lot of interest in our fiber solutions and small cell businesses, and we'll provide updates as the process unfolds. I'd like to conclude my comments by saying that over the past few weeks, I've been fortunate to have engaged in conversations with more than 50% of our company's employees through either in-person conversations and also video conference calls. The goal of my meetings with everybody was to be present and discuss the rationale behind our recent operational changes, answer questions that are on people's minds about the fiber segment, and start to set expectations for everybody in the company going forward. My takeaways from these discussions were that two major themes exist in the minds of Crown Castle employees. First, they care and have great pride. They're very proud of being part of Crown Castle, and they want our company to be seen as as excellent in the minds of the constituents we serve, including shareholders and customers, and communities. And second, most recognize that to be excellent, we need to continue to make changes in how we operate, and they are engaged and energized about their ability to participate in and lead the process and develop new ways of doing things to help differentiate us, differentiate us as a leader in this sector. So I'd like to thank all the employees I met for being as open and transparent with me as they were, and to those employees I've yet to meet, but will at a time come soon. And to all of our employees, a big thanks for continuing to drive our business and deliver results over the past several months. I know there's been a lot of change, and it's reassuring that this team has been able to stay focused on delivering for customers during this period. Now, having said all that, I would ask all employees and our investors to keep in mind that change management's a process, and it takes time. I appreciate your understanding as we continue to develop new goals that will improve our chances of taking higher shares of new revenue opportunities, convert a greater share of new revenue down to EBITDA, increase investment returns on the growth capital we deploy, bolster our balance sheet to generate more optionality for us in the future, and ultimately, increase shareholder value. So with that, let me turn it over to Dan to walk through the quarter results. Thanks, Steven, and good afternoon, everyone. We delivered second quarter results in line with expectations and remain on track for our full year outlook after implementing the operational changes we announced in June. Looking at the second quarter results on page four of our earnings presentation, the underlying business continued to perform well in the quarter, highlighted by 4.7% consolidated organic growth, excluding the impact of Sprint cancellations. The 4.7% organic growth in the second quarter consisted of 4.4% growth from towers, 11% from small cells, and 3.2% from fiber solutions. We are encouraged by these levels of growth at this time, with our tower business generating growth in line with our current expectations, the uptick in small cell activity resulting in higher growth compared to the last couple of years, and our fiber solutions business delivering growth above our 3% expectation, despite the changes we made to our operating plan. This growth underscores the stability and attractiveness of our business as we are well-positioned to capitalize on the growing demand for data in the U.S. As anticipated, the solid organic growth delivered in the quarter was more than offset by several one-time and non-cash items, including a $106 million reduction to site rental revenues related to the Sprint cancellations, a combined $105 million reduction in straight-line revenues and prepaid rent amortization, both of which are non-cash items. A $22 million decrease in service margin contribution due to the combination of lower tower activity and the decision we made to exit the construction and installation business, which we implemented in the second half of last year, and $20 million of advisory fees, primarily related to our recent proxy contest. Turning to page five, we are reiterating the full-year outlook we released in June, which reflects a year-over-year decrease in site rental revenues, Adjusted EBITDA and AFFO, primarily due to the one-time and non-cash items I just mentioned. Our expected organic growth contribution to full-year site rental billings remains unchanged, with organic growth of 2% or 5%, excluding the impact of Sprint cancellations. The 5% consolidated organic growth, excluding the impact of Sprint cancellations, consists of 4.5% from towers, compared to 5% in 2023, 15% from small cells, as we expect 11,000-13,000 new billable nodes in 2024, compared to 8,000 nodes in 2023, and 2% from fiber solutions. As we announced in June, the small cell organic growth of 15% includes a $25 million increase in non-recurring revenues, primarily related to early termination payments. Excluding this impact, small cell organic growth is expected to be 10% this year. Moving to page seven, we expect to deliver $105 million of AFFO growth at the midpoint, excluding the impact of the Sprint cancellations and non-cash decrease in the amortization of prepaid rent. Included in this AFFO growth is a $10 million increase in cost, which includes normal operating cost increases, as well as $25 million of advisory fees related to our recent proxy contest. All of which is expected to be offset by an approximately $60 million decrease in costs related to the reduction in staffing levels and office closures we announced in June. Turning to the balance sheet, we ended the second quarter with leverage at 5.9 times EBITDA, or 5.7 times, excluding the impact of the non-recurring advisory fees. Looking ahead to the third quarter, we expect our leverage metrics to improve, as we believe our second quarter EBITDA will be the low point for the year, and we benefit from our operating cost reductions. Since transitioning to investment grade in 2015, we have strengthened our balance sheet by extending our weighted average maturity from 5-7 years, decreasing the percentage of secured debt from 47%-6%, and increasing the percentage of fixed rate debt from 68%-89%. In addition, we ended the quarter with approximately $5.5 billion of availability under our revolving credit facility and only $2 billion in debt maturities through 2025, providing us with ample liquidity to fund our business. We believe the steps we have taken to strengthen our balance sheet provide us with financial stability and flexibility as we evaluate strategic paths forward. As we announced in June, we decreased our outlook for discretionary CapEx as a result of the modified investment parameters we recently implemented, and now expect $1.2 billion-$1.3 billion of gross discretionary CapEx, or $900 million-$1 billion after taking into account $355 million of prepaid rent we expect to receive. In summary, the business is performing well, delivering organic growth and keeping us on track for our full-year outlook after implementing the operational changes we announced in June. With the operating review complete, our focus is on maximizing shareholder value by continuing to progress the fiber strategic review and delivering operational and financial results across our portfolio of tower, small cell, and fiber solutions assets. Before starting Q&A, I'd like to note that we are changing the timing of when we provide guidance for the upcoming year. Going forward, we will provide forward-year guidance with fourth quarter earnings, as opposed to our past practice of providing guidance in our third quarter release. This means you should expect to receive our full year 2025 guide with earnings in January. With that, Betsy, I'd like to open the call for questions. We will now begin the question and answer session. To ask a question, you may press star, then one on your touch-tone phone. If you are using a speakerphone, please pick up your handset before pressing the keys. If at any time your question has been addressed and you would like to withdraw your question, please press Star then two. At this time, we will pause momentarily to assemble our roster. The first question today comes from Simon Flannery with Morgan Stanley. Please go ahead. Great. Thank you very much. Good afternoon. Steven, thanks for all the color on the CapEx and OpEx review there. What I wanted to get more color on was what is the new run rate of CapEx? Presumably, since this was sort of a mid-year review, some of the spending was already done. You may perhaps more spending contracted in the second half of the year. So any color you can provide us at what sort of you think the more usual rate, given this sort of higher hurdle rate and new, more focused approach will be going forward. And then maybe, Dan, one for you. You talked about the leverage coming down to 5.7 on an adjusted basis. What are you targeting in terms of leverage over the next couple of years here? There's Bloomberg's reporting that there may be a Verizon portfolio out there. How are you thinking about M&A in the context of that? Thank you. Hey, Simon, it's Dan. I'm gonna take the first two and leave the M&A point for Steven to hit. But the run rate of CapEx, as we had been talking about, we're focusing our CapEx on lower capital intensity projects so that we go towards on-net and near-net opportunities. Which means that over time, we believe that the overall level of CapEx, the amount of revenue we generate, will come down. But ultimately, CapEx is gonna be driven by how much opportunity we have in the business, so we can't really give a full run rate of what we think is going to happen until we understand what that activity looks like, and we're able to give guidance in 2025. But I think what one of the things you mentioned, and you're right about, is that this was a mid-year move, and we were able to save $300 million, is what we expect for the year. So we would anticipate that somewhere in that range neighborhood or potentially more going forward, but we're gonna have to get to 2025 before we can really give specifics on that point. Understood. In terms of leverage, our goal is to be at 5x leverage. And obviously, we're elevated from that point now, but we believe as we continue to grow our EBITDA and not grow CapEx nearly as much because of the CapEx savings we just talked about, we think we will be able to organically bring that leverage down over time, towards that 5x goal. Thank you. Hey, Simon, it's Steven. In terms of M&A, you know, we're aware of different assets that are either in the market or coming to market in the U.S. And, you know, if it's a truly compelling proposition for us, which we would consider compelling being highly strategic and cost effective, so, we have confidence in delivering future shareholder value, then if it has those types of characteristics, we definitely have interest. But overall, right now, I mean, M&A is not necessarily the priority for us. Right. Thank you. The next question comes from Michael Rollins with Citi. Please go ahead. Thanks, and good afternoon. I was curious, Steven, on some of the comments that you made about the tower business. You talked about three things that you thought could drive a higher organic annual growth rate. I'm curious if you can give us an update within that context of what you're seeing in terms of carrier activity, and are there any early signals that you're seeing as you, you know, look at the visibility that you have in this business and what could come in 2025? And then you also mentioned more tangible steps the company's taking to be a best-in-class provider. I'm curious if you could share some of those steps and how you think that'll translate into better share and results going forward. Yeah. Okay, Michael. You know, it's tough to talk about next year, you know, and beyond. It's a little bit early from our vantage point, but what we see in the market today, and conversations that we're having with our customers, it just gives us optimism that what we've forecasted for revenue growth is directionally correct. We also obviously have benefit of stability and visibility in our revenue from our MLAs. So we don't really see demand shifting directions in one way or another from our major carriers. Right now, to some degree, we look at things as steady state as carriers work on their mid-band 5G rollouts. So that's you know, pretty much, you know, how we're thinking about this year. Again, going into next year, you know, ideally, there's more opportunity for growth, but we'll, you know, we'll be working through our budgets, you know, between now and the end of this year from that vantage point. As it relates to, you know, tangible things, I mean, the priorities right now for us are the strategic review of our fiber business, very critical. Spending cash, what we would say is wisely or differently, you know, with some changes that have already occurred in our fiber business, as we've outwardly discussed with everybody. Cost management for us, which is key, and our leadership team is, you know, evaluating kind of other areas of the business to see how we can consider improving operating and EBITDA margins over time. And then business transformation. I think business transformation is probably the biggest thing that we need to work on. I mean, this company has grown significantly over the last decade, and when you're growing like crazy, you know, you tend to be focused more on driving revenue and getting every opportunity you can for lease up. And now that things are a little bit more in a steady state, I think the key for us is to you know, do some transformation. And when I think about that, it's really evaluating the people, making sure we have the right people in the right roles. It's the business processes, so identifying, you know, root causes of inefficiencies for us and figuring out plans to fix them so things are more repeatable and reliable and efficient. Improving our systems, which you know, a lot of people have been starting to do with improved workflows in this company. We have some new asset management tools, CRM and on the enterprise side. So kind of wrapping that all up, if we're able to, over the next year, year and a half, you know, really improve the processes that we have, whether it's the application to on-air cycle time, making sure we have just better data and data governance around our assets. All those types of things are gonna help keep us really focused, and that'll lead to providing better customer service to maximize organic growth in the future. Thanks. The next question comes from David Barden with Bank of America. Please go ahead. Hey, guys. Thanks so much for taking the questions. A nice straightforward quarter. I guess my, my first question would be, Dan, you know, if we go backwards and we start thinking about, you know, the small cell return thresholds, right? It was always, you know, whatever the CapEx is, times 6%, and then if we get a second tenant, that goes into the double digits, and if we get a third tenant, it goes north of there. Could you kind of come back to that and, and kind of give us what the new language around, you know, return threshold expectations is, for the company now that we've kind of undertaken the, you know, the operational review? And then I guess, maybe a second question would be, just in terms of the service revenue kind of run rate in the quarter, I think, Steve, to your point, that this might be kind of, you know, run rate, you know, from a tower activity level. Is this the new run rate for kind of services for the, you know, for the foreseeable future before we start guiding to 2025? Thank you. Sure. Thanks, Dave. Let me answer the first one, which is: What are our return thresholds as we look at the small cell business? You pointed them out right. Historically, we had targeted 6%-7% on the anchor build. All I can say now is that our target is higher than that. And we're gonna work through the market and figure out exactly what that's gonna look like. But what it does, by going to a higher level of anchor build economics, is allows us, upon lease-up, to get even a higher return on the lease-up, so that we de-risk the business substantially. With our cost of capital being higher than it was when we first targeted 6%-7%, we think that we can start making, on the anchor build, a return that accommodates that higher cost of capital and allows us to make money over time by leasing up those assets. But they're not yet in the position of quantifying exactly what that number is going to be or is at this point. On the service revenue question that you asked, yes, the second quarter run rate is what I would put in for kind of generally what we think will happen over the course of the rest of this year. And then, as you pointed out, we'll give additional guidance for 2025 when we give update our guidance in January. Appreciate it. Thank you, Dan. Thanks. The next question comes from Ric Prentiss with Raymond James. Please go ahead. Yeah, thanks, everybody. I wanna start with the change in giving guidance, slipping it to the 4Q call from the 3Q call. I know we had chatted about it in May readout, Dan, but kind of help us understand what kind of led to that, that change. I know your peers do it on the 4Q call. Sure. That is part of what led us to it. I think that what we had noticed is that when we were giving our guidance in October, we were a full five months ahead of our peers. And what we had also noticed was whatever trends we started to talk about, we were kind of blazing a trail, well before anybody else could talk about them. And so we would get an outsized amount of the questions and an outsized amount of the consternation, ultimately, about what we were saying about the subsequent year for a pretty long time. And by the time that our peers were giving guidance in February, that news had settled a bit, and it didn't impact them as much. And so what we've noticed is, it's been hard to be the trailblazer on that front. One of the things that has led us down the path of giving guidance so early is that our business is relatively predictable, and so we like the idea that giving guidance in October expressed that predictability. We didn't miss very often, even though we were giving guidance in October. We still believe our business is predictable. We still believe we could give guidance in October and be good with it, but we think giving ourselves another three months and being closer to our peers makes it easier for us to maintain a good message to the market and for investors to understand what's going on, and gives us a little bit more time to incorporate any additional information in that last quarter that will help us give the best guidance we possibly can. Hey, hey, Ric, it's Steven. You know, I'd add to that. You know, this company has started the budget process in at the beginning of August. You know, most companies I've been with in August, September, October, we're driving home to try to finish out the year as strongly as we can. So I also felt compelled to ask the team to reconsider, start the budget process a little bit later. And if we need to move guidance out, you know, move guidance out, since it gives us a little bit more opportunity to really understand the market before we completely formalize what we have for our outlook. That makes sense. And the carrier budget cycle seems to really come to a head, bottoms up, tops down, Halloween into the fourth quarter. So I think it makes sense from your customer standpoint, too. That's exactly right. Yeah, it takes away one other thing, Ric. I would just mention. It takes away one of the issues that we were having, which was we would provide guidance based on what we thought that the fourth quarter was gonna be, and then it would be a jumping-off point. Now, we actually will know what that is, so that we don't have that other, that extra change to try to reconcile back to. Makes sense to me. Gonna talk to the strategic review delicately, but I think this will work. Last quarter, we talked about fiber small cells, and would it make sense from a seller standpoint or the buyer standpoint to separate fiber solutions from small cells? Is it possible to update us as kind of what are the pros and cons from a very 30,000-foot level to say, what about is there a strategic review outcome that is including both of them together, or what if it's something that splits them apart? Is that a fair question? I think it is. Yeah, it's a totally fair question. I think what we've said is that we are open to any alternative that maximizes shareholder value. And if that alternative is that somebody is willing to value the fiber solutions business apart from us, higher than what we think we're getting credit for, what we believe it's worth internally, then we would like to sell it separately. If that valuation metric goes only in combination with small cells, then we would do something with a combined business. So that's really how we're thinking about it. I can't tell you how a potential buyer would look at the pros and cons of whether they want it together or separate. That's up to them to try to figure out. We know that there have been good overlaps between tower, small cells, and fiber solutions. That's why we have them together, but we are open to somebody coming in and valuing each however they think they see value, and, comparing that to what our own internal look is and making the best decision for shareholders. Okay, last one for me. Steven, unique position we think you're in. We continue to see private multiples well above public multiples. Can you give us your opinion on, are you seeing that? Why are we seeing it, and why has it persisted so long, if it is there? That's a great question. Yeah, I mean, it's a bit of a mystery. I mean, obviously, you have a lot of private investors who are, you know, very excited about this business, about the business model, and about the future growth prospects. And, you know, they're investing capital, and they feel that, you know, whatever high multiples they're investing capital at, that at some point down the road, they'll be able to sell the business and get a good return on their invested capital, or recapitalize the business somehow, or partner with somebody. But they see a very good exit. And I think there's, from our perspective, a dislocation. You know, we just, you know, we're, again, we're not being opportunistic, in looking at some, deals that are out there, that are, you know, very non-accretive to this company. So, you know, we'll see what happens over time. And we are hoping, Ric, that, the dislocation changes, and it does give us an opportunity. So as our balance sheet strengthens over the next number of years, and we do have more flexibility and optionality, you know, to grow inorganically, that there's opportunities, and, that maybe multiples at that juncture will have come down a little bit, and, it's something that we would be seeking to, you know, engage in conversations with some of these privates. Great. Appreciate the call. Thanks, guys. Thanks, Ric. The next question comes from Jim Schneider with Goldman Sachs. Please go ahead. Good afternoon, and thanks for taking my question. Relative to the operational update and the lower number of small cell deliveries you expect to make in 2024, can you clarify whether that reflects a reduction in the amount of small cell activity that carriers intend to do overall this year? And do you believe there's any change in their intention to do more self-perform work on small cells? Yeah, I'll take that. You know, again, we made the shift since returns on our invested capital, you know, has not yet materialized, right, to the level we'd hoped for, as we talked about. But we have a lot of conviction that if we continue to execute well, we're gonna be able to maximize business in the future, as long as it's more on or around our fiber backbone. And, you know, again, we're looking at this as, you know, the carriers have their demands in terms of network changes and expansion with their different types of solutions, and it's based on many factors. So, you know, for now, the carriers remain focused on deploying mid-band spectrum. I mean, that's kind of their top priority. And from our perspective, you know, our priority is to drive better returns and capital deployed. So we're, you know, we're in the process now of working with these, with these customers on solutions, and we feel that we're gonna be able to align their needs with ours, in the short run, right? Going through kind of the balance of this year and into next year. But, you know, as it relates to future demand, you know, this business is kind of, ever changing, and it's, it's a bit lumpy in terms of how we see things quarter to quarter. Generally speaking, the type of data demand growth that we see in the future, and that's estimated, we remain very optimistic that data growth is gonna drive more densification, and it'll drive more demand for cells, for small cells over time, which will lead to the type of double-digit revenue growth that we forecast into the future. That's helpful. Thank you. And then, Steven, relative to your comments on the potential opportunity for market share gains, is there a particular segment of your business where you think you have the greatest confidence in achieving that over the next few years? You know, we have these holistic agreements with, with our major customers, where, we have, we have one, that's gonna be coming up, for, kind of a, a new negotiation over the next year. So, you know, we're hopeful that that leads to, kind of sanctifying our relationship even further and kind of taking our relationship or partnership up to the, to a next level of excellence with that customer, which hopefully will enable, them to consider us as being a real preferred supplier. So, that's one element of it. There's a whole host of kind of mid and smaller regional customers out there that, you know, we've been focused on, and I think with a greater effort, a greater sales effort and different rewards for our sales teams, we should be able to be kind of convincingly garnering a higher share of business than we have in the past. So I think the combination of those two things should give us the chance to be able to generate more of our unfair share of business than we're taking now. Thank you very much. The next question comes from Nick Del Deo with MoffettNathanson. Please go ahead. Oh, hi, thanks for taking my questions, and I hope you guys and your team have been managing through the effects of the hurricane okay. Steven, you just touched on this a little bit in your prior answer, but I was hoping you could expand a bit more broadly on your high-level philosophies as it relates to MLAs, so we can kinda understand, you know, the puts and takes of what you think about or wanna see when you're contemplating those sorts of arrangements. Yeah, I mean, Nick, you know, obviously, we've been able to achieve good growth and create significant shareholder value by negotiating these types of comprehensive MLAs. And the key for me is to be able to find ways where we're really kind of getting to a yes, a yes-yes situation or a win-win situation between both parties where we're able to realize kind of more guaranteed growth over a multi-year period of time in a way that maximizes the value of our assets, while giving the carriers really a much better degree of certainty as it relates to how they budget, and also enables them to get onto our sites more quickly, more efficiently, which then lowers their overall costs of operation. So the goal here is to have them be really beneficial to both our customers, in providing that framework to leverage our assets, and, and also for us, in order to be able to, drive more, revenue. But obviously, there's key elements to that include, you know, you know, pricing and packaging and volume and annual escalations, in addition to the types of needs that the carriers, feel that they need over time in terms of entitlements, on these assets. So there's a number of things that come to play, which I know you know a lot of those, but that's kind of how, you know, I think about it broadly. Okay. That's helpful. Thank you for sharing that. I guess one other question on fiber solutions. I guess, can you guys drill down a little bit on the changes to, you know, your sales tactics or sales incentives or the sales tools you're gonna be using to enable you to sell more on or near net versus what you've been doing historically? Well, again, from an enterprise perspective or fiber solutions, you know, the shift is in sales and marketing, primarily. Basically, going kind of from a wide-angle lens to more of a zoom lens, I guess, I would say. And we're kind of dealing, we've been dealing a lot with retail type of clients, and we're trying to move a bit away from retail clients that are more transactional, that create a little bit more churn, that aren't as financially sound. And we're trying to move to customers and increase time spent with the larger customers out there that are in telecom, financials, and what we call GEM, which is government, education, and medical. And those folks tend to, you know, remain loyal for longer contractual periods of time, which help, and they also have more financial wherewithal to contribute, you know, more capital to any type of new project. So, you know, the goal really is to kind of shift more into that, what we call complex sale area. And between the review that our teams did over the last number of months and some input from an advisor who's very steeped in in this industry, you know, they both felt collectively that there's a lot of headroom or opportunity to be able to kind of shift a bit from retail to more complex selling. We've put some pretty good sales incentives in place, and we have some automated systems that also help us in terms of kind of defining, you know, where there's upside in our footprint. Okay. That's great. Thank you, Steven. The next question comes from Richard Choe with JP Morgan. Please go ahead. Hi. I have one question regarding the strategic review. I mean, should we be thinking about an outcome kind of by the next earnings call, end of the year, or maybe longer than that? And then following up on the tower question, longer term, is the tower business still a 5% business, or could that actually be a little bit higher given maybe the changes that you're focusing on? Thank you. Yeah, as it relates to the strategic review, it's, you know, it's difficult to put a timeframe on it, right? We're in the mix now. We're heavily engaged with, you know, multiple counterparties, potential counterparties, and, you know, we'll see how it plays out. You know, we're-- we'd like it to be accelerated as so we can make a decision, right? It'd be good for our company, it'd be good for our people, be good for our shareholders, depending on what outcome we decide on. So, you know, just, I guess, stay tuned, stay with us on this, and we'll be able to hopefully report something out as, you know, as the year flows through. As it relates to the tower business in terms of, you know, kind of the outlook, we're not sure how, you know, if over 5% is something that's so readily available. Ideally, for us, it could be. We've talked about cycles with the Gs, and we feel we're kind of in mid-cycle right now, a bit of a trough. Ideally, by the mid to end of next year, maybe we see a tick-up by the carriers in their capital spend. I think they're gonna be spending $32 billion or $33 billion this year overall. Not all of it, of course, on our networks. But, you know, if they, if they ratchet back a bit, or, say, ratchet forward a bit, particularly maybe as interest rates settle a bit, which could be helpful to them, then, you know, by middle of next year, you know, ideally, we see a little bit greater demand and kind of finishing off between 26 and 27 of the 5G expansion. So if that happens, then that could increase growth incrementally. And then if we are able to get a bit of a higher share of growth, those things collectively, you know, puts us, we believe, kind of in that 5% or maybe 5%+ range. Great. Thank you. The next question comes from Ari Klein with BMO Capital Markets. Please go ahead. Thank you. Maybe just going back to small cells. You know, given the shift in strategy, I think you've previously talked about 50,000 nodes in backlog. How many of those are impacted, I guess, by the shifts that you're implementing? As of right now, we don't have a change. We still have the 50,000 nodes in backlog. We're working through all of those and through the discussions with our customers, and nothing at this point has changed that would change that 50,000. As we come to some sort of decisions with our customers and figure out what we wanna do, should there be changes, we will obviously update that number, but it hadn't happened yet. Thanks. And then maybe, you talked a little bit about increased flexibility, which includes the balance sheet and maybe bringing leverage lower. Could that, at some point, include a shift in the dividend strategy and how you think about that? Yeah, I think given the fact that we're in the middle of the strategic review, which would include the thought around capital allocation, dividend policy, everything else, ultimately, we're really not in a great place to talk about what's going forward until we have more of a conclusion on what businesses we have and where we're gonna be in the future. Got it. All right. Thanks. Thanks for the color. The next question comes from Matthew Niknam with Deutsche Bank. Please go ahead. Hey, guys. Thanks for taking the question. Just two on fiber as well. It seems to be the theme of the call. One, obviously, there's a sharpened focus on more profitable on- or near-net build. So Dan, I wanna go back to a point that was brought up before. I know we reduced discretionary CapEx for the fiber business, $300 million this year. This is a business that typically has, from what I remember, an 18- to 36-month book-to-bill, so there's pretty decent visibility. And so I'm wondering, as we sit here today, how that maybe informs what 2025 can look like, just given sort of that longer book-to-bill window. And then secondly, on fiber solutions, the core leasing number this quarter, $39 million, I believe that was the highest since 1Q 2022. Just looking for any updates you can share there and anything notable you'd call out driving that strength. Thanks. Yeah, Matt, I just wanna make sure that the first question you asked was based on, was directed at small cells, right? Not fiber solutions? Yeah, more so just around discretionary spend- Yeah. Fiber in general. Okay, fiber in general, because when you're talking about an 18- to 36-month book to bill, that's more like a small cell type of book to bill cycle. Fiber solutions is much faster. So we have reduced the discretionary CapEx. We do believe that that reduction will ultimately impact the amount of nodes that we're going to build and the revenue that we can generate. And part of how we're gonna go through the discussions with our customers and how those will end up will impact 2025, and we'll be able to talk about it, like I said, in January when we give guidance. On the fiber solutions side of reduction, we do have reductions in the CapEx that has to do with some fiber business. And that's because what we talked about is we're not really targeting building out to new locations. We're targeting locations that are already on our existing fiber. So both of those are happening at the same time, all of which may impact 2025. But as we pointed out, as we look out at our business in the fiber solutions side, we believe there's plenty of opportunity around our existing fiber plant in great markets throughout the top 30 markets in the U.S., which is most where our fiber assets reside now, that we think we can get back to a 3% growth in fiber solutions going forward, even with a more limited focus on on-net and near-net opportunities as opposed to expansion opportunities. And as you pointed out in your second point of your question on the core leasing activity in fiber solutions, it was a very good quarter for us. And it gives us some encouragement that the changes that we're making are available to still generate that 3% growth over time. And as you pointed out, that's some of the best growth or core leasing activity we've seen in that business in quite some time. And what I would say is, it really is the focus of the sales team having gone out and made the right types of decisions with the right types of customers to sell the right types of products. And as Steven was talking about earlier, put the right incentives in place to make all of that happen. And our sales team and sales leadership have done a phenomenal job of taking that input and attacking the market. And we're seeing that they're still, we're still, like I said, we're encouraged by how much opportunity we're unearthing that's near our already existing assets. Yeah, I guess I'd like to also say... I'd like to also just add, in a recent meeting with our teams on the enterprise fiber side in New York, you know, some of the sales teams were asking the question about, you know, about greenfield builds. And, you know, the answer to that was, it's not like it's binary, right? It's not a yes or no scenario. And the example that the individual brought up was, if I'm able to get a deal done with a, you know, very well-known hedge fund who wants, you know, 15 floors, you know, of fiber built in Hudson Yards, and I think there's opportunity, you know, for co-location, and we can prove in that the returns, you know, from day one are gonna be X, and the payback's gonna be, you know, within the realm of what we're looking at, is that something that I can compete on? And the answer was yes. So, you know, we're not counting out not doing greenfields at all. It's just from our perspective, it just has to be profitable. If I could just follow up on the first question. I know that there was a reduction of about $300 million that was announced, and I think that was reaffirmed in today's release for discretionary spend in totality for fiber. That's six months of this year. So is it fair to extrapolate that and say next year could look more like an $800 million number? Or is that too much of a generalization and we should just sit tight till January to get additional color? Yeah, unfortunately, you're not going to love the answer. It's going to be, you're going to need to sit tight till January, because, because like I tried to say earlier, the amount of CapEx that we ultimately spend is going to be based on the amount of activity we see from our customers. Whatever that CapEx is, is a lower capital intensity than it would have been historically for us. But it still could be that there's lots of activity we can go out and get, to Stephen's point, that would be very profitable. And so we don't want to give any guidance that says, "We will definitely have this amount of capital reduction going into next year." Plus, we haven't given a forecast for 2025, so it's hard to give a reduction to a forecast that doesn't exist. So, unfortunately, Matt, I'm sorry, you're going to have to just sit tight and wait until January. I had to ask. I appreciate it. Thank you both. No problem. The next question comes from Batya Levi with UBS. Please go ahead. Great, thank you. A couple follow-ups. First, on the small cell side, can you provide more color on how we should think about the pacing from here? Should we assume the 3,000-5,000 delayed builds will be just tackled down to maybe the 10,000 annual deployments you were targeting next year? And then one more follow-up on the fiber CapEx reduction, if you don't mind. The $300 million, can you give us a split on what the small cell versus fiber mix of that is? Sure, Batya. On the first point, again, we, we don't, we don't have really a plan for 2025 that we've talked about publicly around the small cell nodes that we would deploy. But the push out of the 3,000-5,000 nodes from 2024, we do believe some of those will hit in 2025, because it is a deferral of those nodes going into a future period, a lot of which will happen in 2025. So we do think we have a pretty good sense or a good starting point for 2025 and think that the small cell business will continue to grow, as we've talked about, like that we think we can grow that business in the double digits over the next several years. And we, because our backlog is what it is, because we are able to continue to build for our customers, we feel comfortable with being able to grow double digits. On the $300 million reduction in CapEx, the majority of that reduction is in small cells as opposed to fiber solutions. Okay. Thank you. Yep. The next question comes from Eric Luebchow with Wells Fargo. Please go ahead. Great. Thank you for taking the question. On the small cell backlog and what you expect to deliver the next couple of years, any change to the mix of co-locations versus anchor tenant nodes? How should we think about that shifting as a result of the strategic review or the operational review that you announced last month? Yeah, Eric, it's Steven. You know, the fact that we're going to be, you know, shifting down on the anchor nodes means that a higher percentage of our nodes going forward will be co-locations. I think we've already, you know, communicated that of the 50,000 backlog, you know, a big chunk of those, the majority of those are co-locations. So when you look at our overall mix, you're going to see a higher percentage of colos versus anchors. Okay, great. And then just a higher level question on tower activity. So perhaps with the exception of DISH, is the majority of your activity today still amendment related from carriers upgrading mid-band spectrum? Or, you know, have you seen any activity out there related to new co-locations to densify tower grids in any of your markets, particularly the more urban ones? And if you haven't seen that in a big way, any kind of visibility on when that tower densification phase may pick up in the next couple of years? Thanks. Yeah. I mean, yeah, most of our activity is amendments. There's a few co-locations, you know, in the mix, but it's not a large percentage. Obviously, some of the co-locations we're getting are coming from, as I said before, kind of the smaller regional players out there, not necessarily the big three or DISH. And we expect that same type of, you know, cadence to happen over the next, you know, number of quarters. Thank you. The next question comes from Walter Piecyk with LightShed. Please go ahead. Thanks. Just was hoping you could remind me of the components of, believe it or not, I'm asking about SG&A. You know, at, at $200 million, $204 million, not much of a reduction from last year, especially given the reduction we saw in the first quarter. Maybe there's just some non-cash things that move back and forth. But can you just kind of talk about the components in there and, and what areas are targeted for reductions going forward? Yeah. Well, how do you talk about the components that are in there? The majority of our G&A, as you would imagine, are people that are working on the back office functions that we have, whether those are accounting or finance, things of that nature, legal and IT. And what we've been able to do in that business, we've been able to offset all of the labor inflation that we've seen over the course of the last several years by the operating plan we have. And we are and have targeted it, the G&A, and believe that we will have reductions over time, which is part of the $60 million reduction that we talked about and that we'll realize in 2024. And what you'll have to just allow me. I don't have the number off the top of my head of what quarter-over-quarter... That's fine. I'm just looking... I mean, last year you had it kind of came up in the second quarter, but then I looked at prior years, and there doesn't seem to be seasonality there. So when you talk about $60 million, you know, is it that's off of the fourth quarter level, and then that's just gonna keep going down? Or, maybe there was some proxy fees in there in the quarter, but I guess there wasn't, I mean, there was a big number last year. Yeah. You know? There were $20 million of- But that wasn't there last year, but that wasn't there last year in the second quarter, which also was up, but... Whatever. Yeah. I just, you know, it just seems like obviously an important component, but you don't, you don't think there's anything abnormal there? And so when are we gonna see these reductions kick in? Obviously, the proxy fees drop out in the third quarter, so you'll get whatever that number is, an immediate drop, and then we'll see some additional organic improvements in Q3, or these are all back-end loaded? Yeah, so as you pointed out, I think as we see the proxy fees come out, we will be at a lower run rate than we saw in 2023 because we also did a restructuring in 2023, where in Q2 we reduced our G&A pretty substantially as well. Right. We believe we will see the impact of the money we saved was largely done very recently at the end of Q2, so you will see the impact in Q3 and beyond. So you'll see both of those things go on. So I think the answer to your question is basically yes, it is back-end loaded- Yeah ... to see the reductions. And if you look at the numbers in 2023, you see a similar outcome, which even not looking, not focusing on Q2, but going from Q1 to Q4, there was a substantial reduction, but it started in Q3 because we had a very similar timing for the restructuring. Right We did last year to this year. So I, I do think you'll see a reduction in G&A. And the spike in the, in the second quarter was very much because of the, the proxy-related fees. Okay. So I mean, look, at the end of the day, next, next year, assuming there's no more proxy fights, and then you've got the reduction, then whatever you announce in terms of guidance, you should get some much better efficiencies in 2025, hopefully, right? Yep. Exac-exactly. That is the plan. Yeah. And, as we've talked about a few times today, you know, we announced the restructuring, the changes we were gonna make in June. We have completed those changes for the most part, and believe that we will see the savings that we're talking about roll through our income statement over the course of the last half of this year. Got it. All right. Thank you. Sure. The next question comes from Brandon Nispel with KeyBanc Capital Markets. Please go ahead. Yeah. Hey, thanks for taking the questions. A lot have been answered already, but you guys have talked about in the past, you know, the guidance, 5% tower growth through 2027, and that 75% of that is contracted. So I guess a simple question is, how, how are our lease applications trending today in terms of your confidence in achieving the remaining sort of 25% to hit that 5% growth rate? Thanks. Yeah, what I would say there is that, the 5% growth rate is based off of, as Steven talked about earlier, the MLAs we have in place and then additional growth we see going forward. The application volumes are much more akin or much more linked to what we see as near-term growth in our tower business. And what we've talked about is that we've maintained our 4.5% guidance for 2024 because we see activity levels that are very much in line with what we expected when we gave guidance last year. So it is all very much in line with what we would have expected. And we gave that 5% longer-term guide knowing what was going on in 2024, so it's all in line with what we would have expected to get to that longer-term growth. Great. Thanks. Sure. Our last question today comes from Brendan Lynch with Barclays. Please go ahead. Great. Thanks for taking my question. How should we interpret the changes in operations in the fiber and small cell businesses while the sales process is still ongoing? Sounds like you're engaged with multiple counterparties currently, and it seems like maybe it would be a little bit premature to make such changes if somebody else was going to be managing these assets somewhat imminently. Yeah, I mean, I guess we look at it as the process really was, you know, two different processes under one. Where, you know, strategic obviously is trying to figure out what makes the most sense for the fiber division as it relates to shareholder value in the future. And then from an operations perspective, is what can we do to continually improve our business? You know, and we're trying to have that continuous improvement mindset going forward with this company in all elements of our businesses. So we just felt, you know, there was opportunity, we wanted to take it. We felt, it was something that was gonna be good for our business, good for the division, and, and good for, you know, for, for the profitability of our business as we move forward, which in essence, creates more shareholder value. So we just, we want to take the opportunity now and implement these changes, because it's kind of separate, apart from how we think about the strategic part of, a potential sale. Okay, thank you. Thank you. This concludes our question and answer session and concludes the conference call. Thank you for attending today's presentation. You may now disconnect.