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American Tower (NYSE:AMT)
Q1 2018 Earnings Conference Call
May. 1, 2018 8:30 a.m. ET

Contents:

  • Prepared Remarks
  • Questions and Answers
  • Call Participants

Prepared Remarks:

Operator

Ladies and gentlemen, thank you for standing by. Welcome to the American Tower first-quarter 2018 earnings call. [Operator instructions] As a reminder, today's conference is being recorded. I'd now like to turn the conference over to your host, Igor Khislavsky. Please go ahead, sir.

Igor Khislavsky -- Senior Director of Investor Relations

Thank you. Good morning, and thank you for joining American Tower's first-quarter 2018 earnings conference call. We have posted a presentation, which we'll refer to throughout our prepared remarks, under the Investor Relations tab of our website, www.americantower.com. Our agenda for this morning's call will be as follows.

First, I'll provide a few highlights from our financial results for the quarter. Next, Jim Taiclet, our chairman, president, and CEO, will share some brief thoughts on our U.S. business and recent developments in the industry. And finally, Tom Bartlett, our executive vice president, CFO, and treasurer, will provide a more detailed review of our first-quarter results and updated full-year outlook.

After these comments, we'll open the call up for your questions. Before I begin, I'll remind you that this call will contain forward-looking statements that involve a number of risks and uncertainties. Examples of these statements include our expectations regarding future growth, including our 2018 outlook, capital allocation and future operating performance; the pacing and magnitude of the Indian Carrier consolidation process and its impacts on American Tower; assumptions around our pending and recently closed acquisitions; and any other statements regarding matters that are not historical facts. You should be aware that certain factors may affect us in the future and could cause actual results to differ materially from those expressed in these forward-looking statements.

Such factors include the risk factors set forth in this morning's earnings press release, those set forth in our Form 10-K for the year ended December 31, 2017, and in the other filings we make with the SEC. We urge you to consider these factors and remind you that we undertake no obligation to update the information contained in this call to reflect subsequent events or circumstances. Now please turn to Slide 4 of our presentation, which highlights our financial results for the first quarter of 2018. During the quarter, our property revenue grew 7.3% to $1.71 billion.

Our adjusted EBITDA grew 6.5% to $1.06 billion. Our consolidated adjusted funds from operations grew nearly 12% to $807 million, and consolidated AFFO per share increased by about 9.5% to $1.84. Finally, net income attributable to American Tower Corporation common stockholders decreased by about 4.7% to $276 million, or $0.63 per diluted common share. This included an impairment charge of approximately $147 million, primarily driven by Aircel's recent bankruptcy in India, partially offset by tax benefits also associated with our India operations.

About $59 million of these items were attributable to ATC common stockholders. And with that, I'll turn the call over to Jim.

James D. Taiclet Jr. -- Chairman, President, and Chief Executive Officer

Thanks, Igor, and good morning to everyone on the call. For those of you who are long-term investors in American Tower, you'll recall that our traditional first-quarter earnings call theme is a review of the U.S. market. And given industry developments over the weekend, I'll first address that Sprint/T-Mobile merger announcement and our view of its ramifications for our company and then move on to overall current trends in the U.S.

As to our expectations regarding the announced merger between T-Mobile and Sprint, we remain highly confident that this transaction as proposed will be neutral to positive for American Tower's U.S. business. First, the disclosed plans for the combined entity to spend $40 billion in network and other capital investments over the next three years would represent a substantial increase in spending relative to the recent average annual combined spending of the two companies. And the other carriers per their recent public statements are already increasing their capital spend to meet the growing demand for data on their networks while positioning themselves to take advantage of enhanced opportunities that may be offered by 5G.

Second, aggregate network equipment deployment and, therefore, demand for tower space, remains a function of the number of device units in service and the gigabits of data per unit per month. An accelerated 5G deployment schedule by the U.S. mobile industry should result in a more rapid escalation of both metrics. Hence, that's what expands from cellphones in a fairly modest population of 4G-enabled tablets and laptops on to the Internet of things, machine-to-machine mobile communications, which should dramatically add to the number of connected devices well beyond traditional handsets.

Moreover, even primarily on cellphones, the gigabits of data per month in the U.S. continues to expand at roughly 30% per year, which would again be further augmented by new IoT data traffic. Third, our experience has been that past U.S. carrier mergers have historically led to a net positive impact to tower revenue growth for ATC.

In this particular case, it's important to note that the merging companies have announced that their planned 5G network would be based on low-band spectrum in rural and suburban areas, mid-band spectrum in metro and millimeter wave spectrum in dense urban. This is in line with ATC's prior expectations for actual operational 5G rollouts utilizing sub-6-gigahertz bands in the vast majority of U.S. geographies, fully preserving in those geographies supremacy of macro tower sites in the coming 5G technology upgrade cycle. Of specific potential relevance to ATC in this transaction is the merging companies' expectation of deploying 2.5 gigahertz on the bulk of T-Mobile's towers, which none of them have today.

We also recognize that T-Mobile and Sprint have announced their intention to enhance the efficiency of their combined network by reducing total cell site count over time. However, we expect that there will be a significant amendment opportunity that will run concurrently, as the merging companies have described plans to largely deploy all of their respective spectrum bands on all remaining sites. So while there may ultimately be less total transmission sites in the merged network, each site is likely to have more spectrum bands, more data traffic and more equipment installed, which would result in offsetting amendment benefits from American Tower. In addition, we believe that our leading U.S.

portfolio of over 40,000 sites and strong existing business and contractual relationships with both companies position us well to help facilitate their network strategy while crafting a win-win solution for both the new T-Mobile and for ATC should the transaction proceed. To summarize, an enhanced amendment opportunity and densification need for 2.5G in a future merged TMobile network, combined with the potential for an accelerated 5G deployment by the wider U.S. mobile industry, in our view, preserves the long arc of cash flow growth that we expect to generate over the current planning period for our U.S. business.

Turning to current trends in our U.S. and international operations. We had a solid quarter across our global business in Q1, especially in the U.S., where our organic tenant billings growth accelerated to 6.3%. We continue to have a high level of visibility and confidence in activity levels across our U.S.

operations. And as indicated in our press release and shown on our Slide 6 in the presentation, we've raised our full-year 2018 U.S. organic tenant billings outlook to around 6.5%. The fundamental driver of these results remain consistent.

More U.S. consumers are using more advanced devices for more bandwidth applications every month. And to keep pace, our wireless carrier tenants are expected to spend over $30 billion in capex this year. Taking into account other multiyear initiatives like FirstNet, we believe we are well-positioned for a sustained period of attractive U.S.

organic growth. The combination of accelerating consumer utilization of mobile devices to access video services via branded and social media, unlimited data plans offered by all of the national carriers and increasingly capable handsets are driving network traffic ever higher. As of the end of 2017, four out of five Americans were using a smartphone for an average of over five gigabytes per month. That's up more than 800% from just five years ago.

And industry projections suggest, over the next five years, usage will go up another three to four times. Given the relentless strain on their networks, mobile operators are responding now by adding more equipment and additional spectrum bands to their network infrastructure, leading to strong amendment and colocation growth for ATC. Adding to our confidence and optimism surrounding our multiyear demand curve in the U.S. is the evolving deployment path of 5G.

In an important development, the industry consortium, 3GPP, recently approved a 5G new radio standard last December that enabled some elements of 5G to be used with an LTE core network. This has the potential to speed the deployment of mobile 5G in the U.S. beyond what we had expected to be an early fixed wireless cable substitution case. Already, several major wireless carriers have signaled their intention to commence mobile 5G service in select markets this year in the U.S.

As a result, it seems more likely to us that the deployment of mobile 5G and the addition of associated transmission equipment on our tower sites will actually either coincide with or quickly follow millimeter wave rollouts in dense urban areas. In turn, that activity should help support strong organic growth rates for us as 2G and 3G spectrum in suburban and rural and the urban areas is refarmed and new spectrum assets are deployed. Increasingly, it appears to us that in addition to 600 megahertz and 2.5G spectrum, which companies have both been talking about as 5G mobile, there are other spectrum assets that are increasingly likely to also be used for mobile 5G deployments, particularly of recent interest is spectrum in the 3.7 to 4.2 gigahertz range, which could offer an additional opportunity for the carriers to bring mobile 5G service outside of dense urban areas early in the cycle by utilizing our towers. Given the propagation characteristics of those spectrum assets and the coverage as well as capacity needs of an eventual 5G network, we believe that a substantial number of macro towers would be needed to support such a rollout.

The third and final aspect of the evolving U.S. mobile industry landscape that has the potential to be a meaningful growth driver for our business over the longer term includes smart city technology, AR/ VR edge computing solutions, drone-controlled networks, autonomous cars and other IoT applications. We continue to be active in dialogue with a variety of leading companies across numerous industries to ensure that we position American Tower as the provider of choice for these and other future products and services. Simultaneously, we're using our recently formalized innovation program to develop and trial a number of concepts, including ongoing efforts with ATSC 3.0 broadcast technology, urban smart poles through an alliance with Philips Lighting and our participation in the CBRS Alliance through a strategic investment in Republican -- Republic Wireless, among other projects.

This focus on innovation has long been an integral part of American Tower's strategy, and we believe it has the potential to eventually contribute significantly to our growth on a global basis and specifically, in the U.S. So as we did in 2007 for our nascent international business then, we've set an aspirational goal for innovation-related initiatives to be a driver of up to 25% of our run-rate revenue 10 years out with the return on investment profile comparable to that of our current business. We're already organizationally and systemically structured to address innovative investment opportunities largely based on our existing macro towers and adjacent assets and targeting both existing and some new customers. We're already starting to gain some traction with our first deployment of smart poles later this year in Huntington Beach, California.

And we have a number of other prototype deployments in our pipeline and midsize investments we've done in international markets as well. So in summary, we view the growth profile of the U.S., our largest market, by far, our largest free cash flow generator, to be very attractive whether there are four or three national wireless carriers. In the near to medium term, we believe that our growth will be driven by the necessary strengthening and improvement of the domestic 4G network, augmented by early phases of 5G deployments. The massive increase in network speeds and greatly reduced latency of 5G will enable machine-to-machine connectivity through the cloud, along with enhanced mobile entertainment and gaming capabilities for consumers.

Now with our focus on innovation, we seek to augment and extend our U.S. growth trajectory even further by collaborating with pioneers and building businesses based on the leapfrog from 4G to 5G technology. So with that, I'll turn the call over to Tom to go through our results for the quarter and our updated outlook in detail.

Tom Bartlett -- Chief Financial Officer

OK. Thanks, Jim. Good morning, everyone. As Igor highlighted earlier, we generated another quarter of strong results, posting solid growth in property revenue, adjusted EBITDA and consolidated AFFO.

U.S. organic tenant billings growth accelerated sequentially to 6.3%, as Jim noted. We grew our common stock dividend by about 21%, and demand trends across our global footprint were even better than our initial expectations. We also closed on our acquisition of the Vodafone tower portfolio in India at the very end of the quarter, adding over 10,000 sites to our portfolio and further solidifying our position as a leading independent tower operator in the market.

Given Aircel's recent bankruptcy announcement in India, we've raised our churn expectations for the market in 2018, accelerating the timing of certain churn we previously would have anticipated to occur over the next several years. For purposes of our results and outlook for the year, we've taken what we believe to be a prudent approach in providing for how we see the bankruptcy process working out. We expect 2018 to be the high watermark in terms of Indian Carrier consolidation-driven churn by a fairly wide margin. With that, let's dive into the details around our first-quarter performance and updated outlook for the year.

If you please turn to Slide 8. During the first quarter, we realized consolidated organic tenant billings growth of nearly 6%, with 5% attributable to volume growth from gross new business added throughout our geographic footprint. Our U.S. property segment revenue growth for the quarter was roughly 4.4%, including a negative impact of over 3% associated with the $25 million decline in non-cash straight-line revenue recognition versus the prior year.

Volume growth from colocations and amendments contributed nearly 5% to our U.S. growth rate, supported by record levels of organic new business on both an aggregate and per-tower basis. As compared to Q1 of last year, new business commencements were up over 40%. Pricing escalators contributed just over 3% and were partially offset by churn of just around 1.2%.

Notably, our U.S. organic tenant billings growth accelerated nearly 50 basis points sequentially to 6.3% for the quarter. Network development efforts across our entire domestic customer base, including First-Net-focused activity, helped drive that strong organic growth. New business commencements were once again heavily weighted toward amendments in the quarter, and we continued to see amendment pricing at the high end of our historical range as significant equipment overlays are occurring on our sites.

We continue to have solid visibility into growth in the U.S. and believe that we're in the midst of a multiyear period of elevated demand for our communications real estate, given the long-term nature of ongoing network initiatives and recent public commentary from our tenants in the marketplace. In our international markets, as a whole, organic tenant billings growth was nearly 5% in the quarter, including solid gross new business commencements, offset by the impacts of the higher levels of carrier consolidation-driven churn in India, particularly as a result of Aircel's recent filing for bankruptcy protection. On a total international basis, colocations and amendments drove nearly 6% of organic tenant billings growth, while escalators contributed another 4.2% and other run rate items added another 40 basis points.

This was partially offset by churn of about 5.5%, of which about 3% was related to carrier consolidation-driven churn in India. Q1 gross organic growth in our international markets exceeded that of the year-ago period by a few million dollars. As a result, adjusting for the impact of consolidation-driven churn in India, international organic tenant billings growth would have been around 8%. New business was particularly strong in Latin America, where the contribution from colocations and amendments grew nearly 40% over the prior-year quarter.

Mexico, our second-largest market in the region, generated organic tenant billings growth of 17%, the highest level over the last five years, and this was driven by activity from multiple tenants, including Altan. And finally, on a total American Tower consolidated basis, the Day 1 revenue associated with the sites we've added over the course of the last year contributed another 1.6% to our global tenant billings growth. This was driven by acquisitions as well as the over 300 newly constructed sites built just this quarter, primarily in our international markets, with average day one NOI yields of around 11%. Turning to Slide 9.

We also generated solid adjusted EBITDA and consolidated AFFO growth in the quarter, driven by strong top line growth and diligent management of operating expenses, interest cost and maintenance capex. Our adjusted EBITDA grew by 6.5%, and adjusted EBITDA margin rose about 0.5% sequentially to 61%, due primarily to revenue outperformance across the U.S., Latin America and EMEA markets as well as the continued cost controls throughout the business. We were able to generate solid margins despite the addition of a number of new, initially lower-tenancy assets, a negative impact of about 40 basis points from net straight-line declines, elevated Indian Carrier consolidated churn rates and a negative impact of about 1.7% as a result of around $29 million of primarily Aircel-driven bad debt expense that we recorded in India in the quarter. Meanwhile, both consolidated AFFO and AFFO attributable to common stockholders grew nearly 12% in the quarter.

Similarly, on a per-share basis, both rose by around 9.5%. These growth rates reflect our high-quality global portfolio's significant diversification, focus on operational efficiency and strong investment-grade balance sheet. In addition, they're reflective of a conversion rate from adjusted EBITDA to consolidated AFFO of well over 100% and a consolidated property segment gross margin of nearly 71%. So turning to Slide 10, let's now take a look at our updated expectations for 2018.

At the midpoint of our revised outlook, we expect property revenue growth of over 6%, including a negative impact of over 2% from lower noncash straight-line revenue and another 3% or so from Indian Carrier consolidation-driven churn, now projected to be higher than it was in our prior guidance, primarily as a result of Aircel's recently announced bankruptcy. We anticipate that consolidated tenant billings will increase to about 8%, including organic tenant billings growth of about 4% to 5% and a roughly 3% to 4% contribution from newly acquired or constructed assets. This is being supported by strong trends throughout our U.S., LatAm and EMEA regions, where we are raising our expectations for organic tenant billings growth. In the U.S., we are raising our outlook for organic tenant billings growth to approximately 6.5%, supported by record levels of new business, which is expected to be up more than 30% versus last year.

And meanwhile, in Latin America and EMEA, we now expect to generate organic tenant billings growth of approximately 10% and 7%, respectively, also as a result of higher-than-anticipated levels of new business. And finally, organic tenant billings are expected to contract by about 12%, representing an additional 4% or so decline versus our prior expectations. This primarily reflects an acceleration in consolidation-driven churn as the result of Aircel's bankruptcy filing. Normalized to exclude for the impacts of carrier consolidation-driven churn in India, we now anticipate consolidated organic tenant billings growth at the midpoint to be around 7% for the year.

Turning to Slide 11. At the midpoint of our outlook, we are reducing our expectations for property revenue by approximately $60 million, driven primarily by accelerated carrier consolidation-driven churn impacts in India and some unfavorable FX impacts. Excluding India, we expect to exceed our initial expectations with the combination of the U.S., Latin America and EMEA markets forecasted to generate $25 million in tenant billings outperformance and about $35 million in total property revenue outperformance relative to our prior outlook. Notably, the U.S.

is expected to contribute around two-thirds of that total. Offsetting this strong expected revenue outperformance is just over $70 million of negative impacts associated with Aircel in India, inclusive around $20 million of lower expected FX-neutral pass-through revenue. In addition, and as you can see, we also anticipate about $24 million in unfavorable foreign exchange impacts as compared to our prior outlook. Turning to Slide 12.

Before we move on to the other aspects of our updated outlook, as we did on our last earnings call, I'd like to quickly review our revised expectations for India. As we've communicated over the last year or so, we expect near-term churn in the market to be significantly above historical levels, driven by a carrier-consolidation process through which we think the current eight or nine wireless carriers will consolidate down to three or four. We are reiterating our prior expectations for total carrier consolidation-driven churn in the market over the next several years of $150 million to $200 million, but now expect more of that run rate to churn off sooner. In 2008 -- 2018 specifically, we are increasing what we expect to realize in India for carrier consolidation-driven churn to around $120 million.

The increase in churn is principally due to the Aircel bankruptcy. In addition, we also expect pass-through revenue to decline by around $70 million. All of these impacts are included in our revised outlook. Net-net, we believe that these adjustments set us on an accelerated path to return to more normalized levels of organic tenant billings growth in India.

Further, we do think that 2018 should represent, by far, the largest year of churn for us in India, and that churn should begin to ease next year. I also want to note that we continue to benefit from incremental wireless carrier network investments being made in the marketplace and consistent with our prior outlook, expect gross organic tenant billings growth of about 8% in India for the year. These investments are currently being led by Reliance Jio, who, per their own public statements, have been very aggressive in their 4G network rollout. Over the next few years, we believe, as the other carriers in the market have stated publicly, that they will need to rapidly increase their network spending to keep up.

Well, we're all well-positioned to capture that incremental activity with our comprehensive India portfolio. And as we get to 2020 and beyond, we believe that this spending will lead to more normalized levels of organic tenant billings growth for us in India. Moving on to Slide 13. We now expect our adjusted EBITDA to grow by about 5.5% for the year, down $35 million from our previous outlook.

The combination of the U.S., LatAm, and EMEA regions are expected to generate nearly $50 million of adjusted EBITDA outperformance with the majority of this coming from our largest market, the U.S. We expect that outperformance to be more than offset by just over $70 million in lower adjusted EBITDA in India, driven primarily by the combination of the increased carrier consolidation-driven churn I just discussed and the higher bad debt expense we recorded in Q1, primarily associated with Aircel. The balance of our reduced outlook for adjusted EBITDA is attributable to about $10 million in unfavorable foreign currency exchange rate movements. However, we are more than offsetting these items at the consolidated AFFO level and raising our expectations for consolidated AFFO by $20 million and maintaining our outlook for consolidated AFFO per share at $7.30 for the year.

We now expect consolidated AFFO to grow by over 11%, up about 60 basis points from our prior outlook. The increase is being driven by $29 million in lower net cash interest, $10 million in reduced cash taxes, and about $10 million in reduced maintenance capex expectations, partially offset by around $21 million in lower cash-adjusted EBITDA and around $7 million of negative impact from FX fluctuations. As you can see from these compelling growth rates, we continue to translate solid organic performance across our footprint into strong AFFO growth. As you can see on Slide 14, given our track record of delivering strong financial and operational results, we remain committed to our disciplined capital allocation program.

During the first quarter, we continued to strategically augment our portfolio, spending nearly $700 million or over half of our capital deployed during the period to acquire nearly 10,600 sites, primarily in India. We expect that the attractive valuations of these assets will enable us to drive rapidly expanding returns once the market normalizes. Historically, we found times of market volatility often present the best opportunity to add high-return assets to our portfolio. We also spent about $170 million, or about 14% of total capital deployed, on discretionary capital projects, with about 70% of this for new site construction and site augmentation.

We built over 300 new sites this quarter, primarily in our international markets, where initial returns continue to be in the double digits and long-term returns also continue to be even more compelling. Our earliest vintage of new builds, those built between 2000 and 2009, are now delivering returns of around 40%. Just 3%, or under $40 million, was spent on non-discretionary capex in the period, primarily to maintain our high-quality asset base. Lastly, we deployed over $330 million for our common stock dividend, which grew by around 21% during the period.

We've done all of this while continuing to maintain a strong balance sheet, our investmentgrade credit rating and driving rising return on invested capital for our consolidated business. We ended the quarter at about 4.8 times net debt to annualized adjusted EBITDA, which is solidly within our long-term target range of three to five times. We've also continued to expand our return on invested capital, delivering an ROIC of 10.4%, which is up around 100 basis points over the last five years. We expect that over time, the current investment being made through our methodical capital allocation process will enable us to continue to deliver strong financial growth, rising returns and a consistently growing dividend well into the future.

So turning to Slide 15 and in summary, we kicked off 2018 with a strong start across our U.S., Latin America and EMEA segments. And while we are seeing elevated near-term cancellations in India, efficiencies, and strong growth in other parts of our diversified business are expected to enable us to generate compelling growth in consolidated AFFO per share for the year. Additionally, by accelerating some of the churn impacts that we have previously assumed to occur more ratably over the next several years, we believe we are now better positioned for a resumption growth in India sooner rather than later. We also continue to focus on taking steps to optimize the business to generate strong returns for our shareholders well into the future.

Operational efficiency remains a key priority in all of our markets. And the maintenance of our investment-grade balance sheet and strong liquidity position is also top of mind. Further, our innovation teams are busy conducting trials in a number of markets to pave the way for future growth, improve the efficiency of our existing operations and help us to minimize our environmental impact. The underlying trends for communication real estate continues to be strong throughout our global footprint.

In the U.S., organic tenant billings growth continues to be well over 6%, supported by record levels of new business, as all major carriers in the marketplace invest in their various network initiatives. And in our international markets, we are seeing rapid growth in mobile usage, resulting in strong demand, particularly in key markets like Mexico and Brazil. We think we are well-positioned to continue to deliver attractive total shareholder returns for the remainder of 2018, as we translate the secular growth in global wireless and the continued consolidated AFFO per share and dividend growth. And with that, I'll turn the call over to the operator, so we can take some Q&A.

Questions and Answers:

Operator

[Operator instructions] Our first question comes from the line of Phil Cusick. Please go ahead.

Phil Cusick -- J.P.Morgan -- Analyst

Hey, guys, thanks. On the U.S., clearly, momentum is building in the business. Can you talk about what's built into the guidance at this point? Does the guide assume a ramp in committed activity through the year? Or does today's guidance reflect really only the committed revenue pace today?

Tom Bartlett -- Chief Financial Officer

Yes, Phil. No, I mean, it's a function of what we see in our backlog, in terms of the application volumes that we have in place and based upon the discussions that our teams continually have with our customers at the local level. We're expecting to see these kinds of trends continue.

Phil Cusick -- J.P.Morgan -- Analyst

And so if we see continued ramp from some carriers through the year, would you anticipate guidance to go higher? Or is that, again, that's already built in?

Tom Bartlett -- Chief Financial Officer

No, I mean, given the existing levels that we have, to the extent that we seek increases in those level -- levels of activity, I would expect there to be an increase in the overall organic growth.

Phil Cusick -- J.P.Morgan -- Analyst

Great. Thanks, Tom.

Operator

Thank you.

Phil Cusick -- J.P.Morgan -- Analyst

Sure.

Operator

And our next question comes from the line Simon Flannery. Please go ahead.

Simon Flannery -- Morgan Stanley -- Analyst

Great. Thanks very much.Just continuing on from Phil's question there. Is -- do you have -- and I know it's very early, but is there any concern that Sprint or T-Mobile may moderate some of their activity this year, as they wait for -- to see how the regulators deal with the deal? And then on India, I think in the past, you talked about 2020 being kind of your goal of when you return to more normal activity. Perhaps you could just update us on your thought process around that.

Thanks.

James D. Taiclet Jr. -- Chairman, President, and Chief Executive Officer

Simon, it's Jim. It is too early to see any change in behavior, if it indeed will occur at all, from either Sprint or T-Mobile on their current network plans. Their public statement referred to them continuing those plans. But if we see any adjustments that are significant enough to affect the guidance, we'll let you know, of course, next quarter.

Tom Bartlett -- Chief Financial Officer

Yes. And as I said, Simon, with regards to kind of levels of churn, given that this year will clearly be the, what we believe to be, the high watermark for churn, we expect to reduce levels come next year. And so even in my comments, beginning in 2020, we would expect to start to get back to more normal levels of organic growth. We're generating 8% of gross growth this year, and we would expect kind of normal churn in kind of that 3% or 4% range.

And so that's why, ex this churn, we would have probably in the 4%-ish range of organic growth and then you have the incremental churn on top of that. And so we would expect the carriers to -- as they come out of this consolidation process, to continue to invest in their markets. Some probably, even more than others, to try to gain some level footing, if you will, in the marketplace. And so we would expect 2020, 2021 to get back to more normal levels of organic growth that we've seen over the past several years.

Simon Flannery -- Morgan Stanley -- Analyst

Thank you.

Operator

Thank you. And our next question comes from the line of Jonathan Atkin. Please go ahead.

Jonathan Atkin -- RBC Capital Markets -- Analyst

Thanks. So on India, just bigger picture. I wondered if you can comment on the tower industry structure given some changes ongoing. How do you see that further evolving? And any implications you see for your business? And then on a more micro basis, just wanted to confirm that Tata exposure is not in your churn guidance because of the iteration of that lease?

James D. Taiclet Jr. -- Chairman, President, and Chief Executive Officer

Sure. I'll take the first one, Jonathan. As far as the tower industry evolution in India, it's exactly what we'd like to see and very much we expect the outcome to look a lot like where the U.S. industry is.

What I mean by that is, there are a number of -- and still are a number of captive, as they're called, towercos in India, which are owned and controlled by mobile operators. The behavior of those companies is heavily influenced by the interest of the operators. And we've always had an expectation, since our initial investment that over time, those operators would monetize their towers, sell them off into independent companies like ours. And you have a rational tower market in addition to a rationalizing carrier market with three or four operators.

So we expect at the end of the day, three or four quite strong, well-capitalized mobile operators, like we have in the U.S. And we also expect two to three significant tower companies with the bulk of those assets -- managing the bulk of those assets, again, like we have in the U.S. So the long-term industry evolution for India, we think, is going to end up very similar to the United States, as they enter a very competitive 4G environment, which again is the same situation that happened here about 10 years ago when Alltel, Nextel, and AT&T Wireless merged into bigger carriers. So that's how we see the landscape playing out, and I think that would be very constructive for our already independent tower company given our scale.

Tom Bartlett -- Chief Financial Officer

And you're right, Jonathan. This does not include the impacts of the Tata settlement. We would -- we continue to work with our customer, our shareholder, on what that settlement will look like. We would expect that that settlement will probably happen over a couple of year period, working through with the carriers to really assess just how many sites are going to be needed to be able to support their existing customer base in new hands.

And we're also continuing to look at what additional cost will be needed in our own business given the lower levels of business. So a lot of ongoing activity with that relationship. But you are right. It is not included in those numbers.

Jonathan Atkin -- RBC Capital Markets -- Analyst

And then just a quick follow-up. Mexico, strong growth there. Where are we in the cycle for Altan? And is this potentially a peak year for same-store growth in that market?

Tom Bartlett -- Chief Financial Officer

It's very difficult to say. They have their own regulatory requirements in terms of just how much of that network needs to be -- how much of the population needs to be supported over the next couple of years It will largely depend upon the demand on that network, I believe. And so as I said, we're really pleased with the activity. And it's not just from Altan, but it's from the entire marketplace.

So we would hope to see this kind of activity for many periods to come but depending, as I said, I think to the extent -- to the success of Altan with leasing out its own network. I think we'll largely drive what that activity might look like over the next several years.

Operator

Thank you. And our next question will come from the line of Matt Niknam.

Tom Bartlett -- Chief Financial Officer

Matt?

James D. Taiclet Jr. -- Chairman, President, and Chief Executive Officer

Matt?

Tom Bartlett -- Chief Financial Officer

Maybe next call, operator.

Operator

Just one second here. Matt your line is open.

Matt Niknam -- Deutsche Bank -- Analyst

Hey, guys, can you hear me OK?

James D. Taiclet Jr. -- Chairman, President, and Chief Executive Officer

Oh, yes, we can. Thanks, Matt.

Matt Niknam -- Deutsche Bank -- Analyst

OK. Great. So the question was strategy-wise, on the back of the T-Mobile announcement this weekend, does that change at all your plans around international expansion and diversification? And then on the back of that, 5G was obviously at the core of the T-Mobile and Sprint plan in terms of technology roll-out. Does that impact the way you think about fiber and small cells in the U.S.?

James D. Taiclet Jr. -- Chairman, President, and Chief Executive Officer

The Sprint/T-Mobile merger wouldn't affect our capital allocation process, which includes reviewing and acting on international opportunities that fall within our investment criteria. So that doesn't affect -- or that is not affected by the Sprint/T-Mobile merger. That process will remain in place. As far as the 5G plan announced by T-Mobile and Sprint, again, it doesn't change our conviction on -- one thing that I tried -- emphasized in the prepared remarks is the macro-site role in the 5G network rollout in the U.S., I think it's pretty clear now that it's going to be a foundational role.

Most of the population, about 85% of it. And the vast, vast majority of the geographic coverage is outside of urban and dense urban areas. So we feel that this validates the hypothesis we've always had, which is these macro towers are going to be the foundational infrastructure for 5G. As to fiber and small cells in urban and dense urban areas, again, we have the same strategic view of this, which is location rights at scale, and on a franchised basis, are the value-creating opportunity for us.

We'll buy or lease or find fiber from the existing marketplace. It's already there in the U.S. Multiple competitors in every urban market, lots of existing asset base, a competitive supply chain. We'll go buy fiber from the market to support the small cell franchise rights, should we get them at scale.

So it doesn't really change the strategy there either, frankly.

Matt Niknam -- Deutsche Bank -- Analyst

Got it. Thanks, Jim

James D. Taiclet Jr. -- Chairman, President, and Chief Executive Officer

Sure.

Operator

Thank you. And our next question comes from the line of David Barden. Your line is open.

David Barden -- Bank of America Merrill Lynch -- Analyst

I guess, one for Tom, just on the kind of updated AFFO outlook. I understand the walk on Slide 13. I guess, on the supplement on Page 16, there's another walk. And if you compare them quarter over quarter, it looks like the big changes are deferred income taxes and other, which includes some kind of provision for India.

Could you kind of help us walk through the moving parts in that other buildup in taxes and other? And then Jim, just -- you kind of gave birth to this innovations initiative last quarter, kind of laid out a bunch of priorities and targets that you kind of wanted to get to work on. Could you talk to us about what actually is happening on that front right now? And kind of what the budget was for this past quarter and for the year?

James D. Taiclet Jr. -- Chairman, President, and Chief Executive Officer

Sure. I'll start with the second question on innovation. Our biggest investment so far have been fiber-to-the-tower-based infrastructure opportunities in Latin America predominantly, right? So we have an investment in Mexico along those lines and one in Argentina. With those fiber-to-the-tower assets, they also come with the scale transmission rights based on utility poles that come with those particular companies and businesses.

So that's the bulk of the actual capital investment so far or M&A investment, if you will. Then we have some smaller, very targeted investments, and one is Federated Wireless, a reference I made earlier, where we are working with them as a minority owner to help craft the CBRS spectrum utilization plan for small cells, predominantly in indoor venues as our main interest but outdoor as well. And hopefully, we will be able to help guide that process of utilizing that spectrum in a way where we can get franchise real estate rights, help deploy and get our carries a much cheaper access, especially to indoor opportunities in office buildings, apartments, etc. So that's one small investment we've made.

Another one, which is fairly modest, under $10 million, is with Philips Alliance, where we co-develop with them an actual product that is being deployed in California right now to combine LED lighting system, which reduces the cost of the municipality for lighting, plus the transmission system for 4 and 5G embedded in the pole. So again, that's another place we made a small investment. And it goes down the line. And we've got innovation teams, David, deployed around the world, very highly qualified people and a fantastic CTO, Ed Knapp, that is managing all of this under sort of my guidance.

And we will methodically keep making these investments as we go forward.

Tom Bartlett -- Chief Financial Officer

And David, on the -- on your first question, maybe there are a number of events that are going on in India. And we had the merger of our legacy businesses into the -- our joint venture business that's, we believe, creating some opportunities and with the writedown that we recently took in the quarter. And then more broadly, I think that there are -- we have a number of initiatives that are going on around the world that are tax group is actively working on to be able to mitigate as much tax exposure as we possibly can. So I think among those three areas, I think, is really driving some of the improvement in overall cash taxes that you referred to.

David Barden -- Bank of America Merrill Lynch -- Analyst

If I could just follow up, Tom, is that kind of legacy ATC merged into Viom? Is that kind of under way that the terms and everything been set in your -- or is this negotiation with Tata regarding the legacy leases kind of getting involved in that conversation?

Tom Bartlett -- Chief Financial Officer

No, no. David, that's done.

David Barden -- Bank of America Merrill Lynch -- Analyst

OK.

Tom Bartlett -- Chief Financial Officer

Yes, that was an event that occurred in the quarter. So yes, we do now have that legacy business now officially merged into the traditional Viom business.

David Barden -- Bank of America Merrill Lynch -- Analyst

Perfect. All right. Thanks.

Operator

Thank you. And next, we'll go to the line of Amy Yong. Please go ahead.

Amy Yong -- Macquarie Bank -- Analyst

Good morning. Maybe just elaborating on T-Mobile and Sprint. If you could talk about -- I think a lot of investors are focused on the 35 sites that are going to get turned off and maybe the build of 10. Were you surprised by the numbers around that? Is that kind of in line with your expectations? And then just secondly on India.

If you can help us think through kind of what a good base assumption for 2019 and maybe the shape of growth and churn for the back half of '18 and '19, that would be really helpful.

James D. Taiclet Jr. -- Chairman, President, and Chief Executive Officer

As far as T-Mobile and Sprint's network plans, they're not a surprise. They're the internal analysis done by the two companies. They also may well include sites from say Clearwire, MetroPCS, etc., that were likely to be reduced or decommissioned over time anyway by the independent companies. That would -- could be a portion of them.

But as I said in the remarks, I mean, at the end of the day, this -- should this merger come to fruition and completion, there will be an intelligent rationalization of the 100,000, plus or minus, cell sites that the companies have today into something that will give good coverage but will need to be improved itself over time. And as I said, when you're starting to apply 2.5 gigahertz spectrum to cell sites that were designed for 800, 900 megahertz spectrum, there's going to be a density need over time. There's also going to have to be a significant, we think, amendment activity on the sites that are consolidated into that will offset some of the leases that sunset over the next few -- many years, actually, as what they usually turn out. So we're not surprised by any of it.

One of our benefits as a company is we have the leading tower portfolio. We're a highly focused macro-site company that doesn't need -- necessarily feel that we have to make any trade-offs elsewhere. And we've got great contractual relationships with both companies and really good business relationships. So we tend to be their network partner in evolving to the layout and infrastructure topology that they're going to need to grow from in the future.

So we see this as a very constructive opportunity for us, should it go through. And we'll work with them. And I think it will be a good outcome for ATC, as I said.

Tom Bartlett -- Chief Financial Officer

And Amy, just kind of following up on your question with churn. As I mentioned, we were looking at that kind of $110 million or $120 million of churn in 2018. Probably 60% of that will occur in the second half of the year, given the assumptions that we've made relative to transactions getting approved and notifications coming in to when that -- those leases will actually be canceled. And as I mentioned, it is the high watermark.

We've talked about $150 million to $200 million of total churn. And given the kind of the 120-ish in '18, with the RCom and MTS churn of -- in the fourth quarter in the kind of the $30 million to $40 million, you can kind of back into what we would expect to be the kind of the 2019 related churn. Now again, this can move around based upon what kinds of cancellation notices, when in fact we do get these, but this is our best estimate of when we think this churn will actually impact us between 2017 and 2019.

Amy Yong -- Macquarie Bank -- Analyst

Great. Thanks.

Operator

Thank you. And next, we'll go to the line of Amir Rozwadoski. Your line is open.

Amir Rozwadowski -- Barclays -- Analyst

Thank you very much and good morning, folks. Two questions, if I may. First and foremost, if we think about sort of the demand environment in the U.S., are there any constraints that you're seeing from resources perhaps? Just given the amount of work that's being done or application activity level, are there any sort of limitations into -- in terms of tower climbers or anything that you could see in the food chain that could be holding back some of the activity levels? And then if we think about 5G over the longer term, one of your peers had mentioned that they're starting to see deployments taking place that could be a precursor to 5G or indicative of 5G in non-urban areas. Any comment you can provide to that effect?

James D. Taiclet Jr. -- Chairman, President, and Chief Executive Officer

On our U.S. demand cycle, resource constraints aren't a factor for what we do on our sites at all, Amir. So I wouldn't look at that as any kind of an obstacle or problem that we face. We have an outstanding supply chain.

We've got great operational employees and a very tight organization in the U.S. So we don't face those constraints, I believe, in any kind of material way. And secondly, as I described in the remarks, yes, there are applications starting to come in for certain types of antennas, trial sites. The -- three or four of the carriers have already announced that they are going to be in certain markets installing this kind of equipment.

So we're getting applications starting to come in for those projects.

Amir Rozwadowski -- Barclays -- Analyst

Then just a quick follow-up on that. If we think about sort of either antenna designs or any types of technology needed to enable that opportunity set, should we think about 5G as being an incremental add to your total addressable market, just given how networks are expected to be designed to utilize some of that spectrum?

James D. Taiclet Jr. -- Chairman, President, and Chief Executive Officer

I'll give you one quick example. Just a 600-megahertz antenna versus a 700-megahertz antenna. The optimal antenna length is -- or height, if you will, is an extra foot, right? So that comes with weight. It comes with an upcharge.

So that's just one small example of when you get into more advanced technologies, whether it's lower-band spectrums, which have bigger antennas, or higher-band spectrums, which have smaller antennas but a lot more of them and a lot closer together, the physics are hard to get around. You've got to -- if you want to put that traffic out there using those frequencies, you're going to have to deploy the equipment at scale to meet that 30-plus-percent increase in data demand. And whether you're using 600 or 2500, the trade-offs and everywhere in between, the trade-offs are based on physics, Amir. And there's an equipment set that comes with those.

Amir Rozwadowski -- Barclays -- Analyst

Thank you very much for the incremental color.

Operator

Thank you. And next, we'll go to the line of Batya Levi.

Batya Levi -- UBS -- Analyst

Great. Thank you. In the U.S., do you see any change in the competitive environment to attract new business from the carriers? And just a question on the guidance. It looks like you're using a higher share count for the '18 guide.

Any implications for the buyback for the year?

James D. Taiclet Jr. -- Chairman, President, and Chief Executive Officer

Sure, Batya. I'll take the first one. And Tom, you can speak to the share count. We don't see any change in the competitive environment in the U.S.

On the major MLA front, we have no visibility, first of all, to anyone else's agreements or conversations with customers. But we are -- as the market leader, we would envision ourselves not changing our approach at all. It's patient. It is agnostic in between a holistic-type comprehensive wholesale deal and the set of retail transactions, we'll work with the customer to get our best outcome and their best outcome, should we find common ground.

So we're agnostic on that, but we're basically looking for the highest level and most reliable cash flow with the least downside in every agreement we have. When it comes to new build opportunities, there's been a competitive tower build environment in the U.S. [Audio gap] a few sites that do get built here from the ground up on a macro basis for many, many years since certainly I've been here. Some of the players and companies and names and promotional efforts change, but that market has always been there.

And when we can get our return, we'll build towers. And where we can't, others will underbid us, and they will get that opportunity. But with 40,000-plus, I think we're in pretty good shape. So we don't really see any change from our perch in the competitive environment and -- whether it's new builds or existing infrastructure.

Tom Bartlett -- Chief Financial Officer

And Batya, with regards to your second question, you're right. We anticipate now slightly more M&A activity and capital dedicated to M&A. So that's one of the reasons as well as the timing of when the buybacks occur. So that impacts what the ultimate weighting would be.

Batya Levi -- UBS -- Analyst

OK. Thank you.

Operator

And our next question will come from the line of Tim Horan. Your line is open.

Tim Horan -- Oppenheimer & Company -- Analyst

Thanks, guys. On -- Jim, T-Mobile and Sprint are kind of implying that over time, wireless can supplant a lot of wireline broadbands. And 12% of households are wireless-only now for their Internet access. Do you think we have the spectrum and the infrastructure to support a much larger percentage of your households being wireless-only? And I know India is largely wireless at this point, and I just have a quick follow-up in India also.

James D. Taiclet Jr. -- Chairman, President, and Chief Executive Officer

Well, Tim, I believe that many of the carriers, not just T-Mobile and/or Sprint, feel that this is a real business opportunity for them. Cable substitution, fixed broadband to the home, using a range of spectrum assets based on the topology and the population density of the homes. And of course, there is spectrum available for that, but it's limited. And therefore, if these projects actually get deployed at scale and they're beyond, say, millimeter wave spectrum, which will be effective for maybe a couple of hundred yards or a few hundred yards, you're going to be into macro sites or mini macro sites with mid-band spectrum.

And if you're going to be, again, putting through the bandwidth, gigabits-per-second type of speeds that require -- is required to do fiber- or cable-to-the-home type competition, you're going to have to have a lot of transmission sites. So the trade-offs are there, whether you want to dig a trench down the street and through everybody's yard or you want to deploy macro sites that have slaved many macros and then a last quarter-mile transmission to the home, there's going to be a cost to competing in either of those environments. But there are a number of mobile companies that have made public statements about their interest in competing on fixed wireless. And that's absolutely the way to do it.

Tim Horan -- Oppenheimer & Company -- Analyst

And now just an update on India, I think in the presentation you said 4% organic growth. When everything kind of shakes out and the industry settles down, do you have any thoughts on what that market can grow at longer term?

Tom Bartlett -- Chief Financial Officer

Yes, Tim. Last year, year before, we were up in the high single digits, low double-digit kind of growth rate. Given the demand that we believe we are going to see in that marketplace, we believe that we're going to be getting back to the similar rates of growth.

Tim Horan -- Oppenheimer & Company -- Analyst

Thank you.

Operator

Thank you. And our next question comes from the line of Brett Feldman. Please go ahead.

Brett Feldman -- Navigant Research -- Analyst

Yes. Thanks. Just to start with a quick clarification, Tom, just so I know I'm doing this right. The churn you're expecting in India, the consolidation churn of $150 million to $200 million, that's property revenue, correct? Meaning, we're comparing that to the $120 million you expect this year? It doesn't include passthrough.

Tom Bartlett -- Chief Financial Officer

That's right.

Brett Feldman -- Navigant Research -- Analyst

And then just a follow-up question on India. I mean, you've noted that the new business you're getting, exclusive of churn, is at a lower level as well because there's a lot of focus on network integration. Part of the long-term thesis, I believe, you had around the Viom portfolio is that it did under-index to the bigger operators, but that you estimated that, as consolidation played out, you'd be able to leverage some of the relationships you had in ATC India and bring that business on to Viom. So I guess, I was hoping you can maybe just talk about the nature of the new leasing you are seeing in India even if it is at a lower level to maybe help frame why your constructive on where you're going to be once you get through the consolidation period?

James D. Taiclet Jr. -- Chairman, President, and Chief Executive Officer

Well, I mean, the large pieces of the existing business, Brett, is coming from R Jio, as I mentioned. So they continue to expand. 80% or 90% of the country's data traffic is now going over their network. And so they're continually having to invest heavily into that business and continually to expand the capacity of that network.

We would expect that, once we get through this -- when we would get through this, the process that they're going through, which is probably another 18 months or so in the marketplace, then all of the carriers, the remaining carriers, will start to invest heavily into that market for both voice and data and to continually building out their 4G. So we think that R Jio -- because R Jio is not going through that same kind of consolidation process that the other carriers are going, that they're able to maintain just more focus on building out their network, underlying what their foundational infrastructure looks like. And so they're just able to build on it and continue with it. And so we would hope and we would anticipate that we'd be able to continue with the kind of the R Jio kind of deployment.

And then on top of that, be able to enjoy the growth coming from the other consolidated entities.

Brett Feldman -- Navigant Research -- Analyst

Is it fair to assume that once you get through this consolidation period, to the extent you're able to grow organically on your existing towers, that will be very capital-efficient, meaning that there will actually be excess space on the towers? Or is there anything you're going to have to do to kind of recondition them to take on new tenants?

James D. Taiclet Jr. -- Chairman, President, and Chief Executive Officer

No, you're exactly right. We would anticipate -- we have a lot of single-tenant -- towers in the marketplace, so we would expect to be able to really leverage that at that infrastructure to be able to enjoy that kind of growth going forward.

Brett Feldman -- Navigant Research -- Analyst

Thank you for taking the questions.

Operator

Thank you. And our final question will come from the line of Ric Prentiss.

Ric Prentiss -- Raymond James -- Analyst

Hey, guys. Good morning. Thanks for squeezing me. A couple of questions.

James D. Taiclet Jr. -- Chairman, President, and Chief Executive Officer

Absolutely, and I hope you're as pleased as we are with the outcome of the hockey playoffs there, Ric.

Ric Prentiss -- Raymond James -- Analyst

One-one. We'll see you in Boston, eh? Two questions, if I could. One, going back to a little bit of what Phil asked. When we think about the U.S.

momentum, what's the update as far as how long is it taking from executed lease to seeing the revenue show up on the tower in the U.S.? And then I've got a follow-up on India.

James D. Taiclet Jr. -- Chairman, President, and Chief Executive Officer

Rick, that depends on a couple of things whether it's amendment or a colocation. The amendments tend to be quicker. And it also depends on the contractual arrangement with each carrier and their own internal approval process. But the lead times are still for amendments in weeks or a couple of months, and in -- when it comes to colocations, it could be three to six months, depending on the carrier.

So those are the kind of time frames. So I'd say, just to give it some shorthand, a quarter for an amendment, two quarters for a colocation. That's kind of the visibility we have on average.

Ric Prentiss -- Raymond James -- Analyst

That makes sense. And in India, going back to something Brett was asking. Obviously, it's excluding pass-throughs, the $150 million to $200 million. Last time, the guidance I think assumed about $90 million would come in '19 -- in 2018, sorry.

And now we're at $120 million coming in 2018, a difference of about $30 million, but Slide 13 is kind of talking about $71 million. I assume part of that is that bad debt, right? I just want to understand the differences in those numbers, if I'm getting them right.

Tom Bartlett -- Chief Financial Officer

No, you are, Ric. I mean, there's incremental churn coming from the -- what we anticipate coming from Aircel, which is driving it. There are some timing benefits as a result of some of the other churn that we assumed in the businesses is being pushed out later in the year.

Ric Prentiss -- Raymond James -- Analyst

And there was the bad debt in Aircel, was that -- I missed that one, was that $29 million?

Tom Bartlett -- Chief Financial Officer

Yes, that's right. No, that's exactly right. And if you take a look at the impacts to EBITDA, on top of the impacts of that revenue-related largely driven by the churn from Aircel, there were some outstanding receivables that we needed to reserve against, given the bankruptcy process. And that was what we booked -- as I mentioned, we booked in Q1.

Ric Prentiss -- Raymond James -- Analyst

And that's bad debt, not the churn number?

Tom Bartlett -- Chief Financial Officer

That's right.

Ric Prentiss -- Raymond James -- Analyst

OK. And just one -- I don't know if you've got the time there. What is the Tata time frame? I think originally, what, it was 2025 they were contractually obligated through. But you're maybe suggesting that you could negotiate the Viom stake versus maybe having churn come in earlier, is that kind of what we should think about?

James D. Taiclet Jr. -- Chairman, President, and Chief Executive Officer

So, Ric, everything's integrated here. Tata is a partner in ATC India now based on the overall legal entity consolidation. So they have a stake in the success of the business as well. They've got -- and we have other partners in the JV.

And so we're all working through kind of the simultaneous equations that speak to the participation, length of time in the JV, the exit from that, the run rate of revenue and potentially, a settlement portion at some point in the future. So all those things are wrapped together. And it's a constructive process among the partners right now on all those dimensions. And once we conclude it, we'll get -- be able to kind of report out all of the specifics.

Ric Prentiss -- Raymond James -- Analyst

All right. Let's go Lightning. We'll see you, guys. Have a good day.

James D. Taiclet Jr. -- Chairman, President, and Chief Executive Officer

Thanks, Ric.

Ric Prentiss -- Raymond James -- Analyst

Take care.

Operator

Thank you. And speakers, I'll turn it back over to you for any closing remarks.

James D. Taiclet Jr. -- Chairman, President, and Chief Executive Officer

All right. Thanks, everyone, for joining today. Have a great day.

Tom Bartlett -- Chief Financial Officer

All right. Bye, everybody.

Operator

[Operator signoff]

Duration: 66 minutes

Call Participants:

Igor Khislavsky -- Senior Director of Investor Relations

James D. Taiclet Jr. -- Chairman, President, and Chief Executive Officer

Tom Bartlett -- Chief Financial Officer

Phil Cusick -- J.P.Morgan -- Analyst

Simon Flannery -- Morgan Stanley -- Analyst

Jonathan Atkin -- RBC Capital Markets -- Analyst

Matt Niknam -- Deutsche Bank -- Analyst

David Barden -- Bank of America Merrill Lynch -- Analyst

Amy Yong -- Macquarie Bank -- Analyst

Amir Rozwadowski -- Barclays -- Analyst

Batya Levi -- UBS -- Analyst

Tim Horan -- Oppenheimer & Company -- Analyst

Brett Feldman -- Navigant Research -- Analyst

Ric Prentiss -- Raymond James -- Analyst

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