SBA Communications (SBAC) Q2 2026 earnings call transcript

Good evening, and thank you for joining us for SBA 2nd Quarter 2026 Earnings Conference Call. Here with me today are Brendan Kavanaugh, our President and Chief Executive Officer, and Mark Montemier, our Chief Financial Officer.

Some of the information we will discuss on this call is forward-looking, including but not limited to any guidance for 2026 and beyond. In today's press release, in our SEC filings, we detail material risks that may cause our future results to differ from our expectations.

Our statements are out of today, August 3rd, and we have no obligation to update any forward-looking statements we may make. In addition, our comments will include non-gapped financial measures and other key operating metrics. The reconciliation of and other information regarding these items can be found in our Supplemental Financial Data Package, which is located on the landing page of our investor relations website.

With that, I will now turn it over to Mark to comment on the second quarter results in 2026 Outlook.

Thank you, Lewis. We had another good quarter in our results we in line with our expectation. Even the solid performance in the second quarter will manage the increasing of fully output for cycling revenue, FFO, and FFO per shares compared to our prior 2026 guidance. The primary drivers of this increase include higher straight-eyed revenues than improved net cash interest expenses.

In the second quarter, FFO per share was $3.05, and we put a cash dividend of $1.25 per share. We continue to operate efficiently, controlling direct costs, and achieving company-wide tower cash flow margins of just under 80%. In the U. S. , we added approximately $9 million domestic new lease and amendment billings in the second quarter. The bulk of the activity continues to come from new co-locations as carriers both identify and expand their network footprints.

With respect to churn, our prior outlook for both print and eco-star related churn for the year remains unchanged. With regard to eco-star, we continue to litigate the amount of federal court and believe strongly in our contractual rights. Internationally, we continue to see healthy demand for our infrastructure, and we added approximately $4 million of new lease and amendment billings in the second quarter.

International churn continues to be elevated due to carrier consolidations, care of bankruptcy, restructuring, and wireless operators' network's rationalizations. Moving to our balance sheet, I'm very pleased to discuss our recent debt offering when July we issue our first unsecured investment grade bonds. The total amount raised was $3.5 billion, and that proceed we used to pay in full both our term not be an amount of outstanding on our revolving trade facility.

As of today, the revolver is fully paid down, and we currently have $570 million of cash on our balance sheet. For former for this transaction, the amount of secure versus unsecured debt is now below 50%.

The transaction generated very strong demand for each of the three tranches we issued. The three tranches include $1.350 billion due 2030, with a cash coupon of 4.78%, $1.350 billion due 2031, with a cash coupon of 5.15%, and $800 million due 2033, with a cash coupon of 5.45%. In aggregate, the $3.5 billion is a blended cash coupon of 5.11%, and a weighted average maturity of five years.

In addition to the new bond offering, we put in place a new larger revolving credit facility with $2.5 billion of capacity, which is unsecured. We now have a solid base of investor for investment grade debt, and we plan to continue to issue investment grade notes in the future to refinance our upcoming maturing ABS and higher security.

I would also like to point out that in June, SBA was upgraded from triple V bonus to triple V by S&P for another positive step in our new investment grade journey.

Consistent with our prior outlook, we continue to assume that at $1.2 billion November ABS maturity will be refinanced in November of this year at 5.25%. We ended the quarter with approximately $13 billion total debt. Our current leverage of 6.4 turns net debt to adjusted EBITDA remains new historical lows and within our target range of six to seven times.

During the second quarter, we declared until cash dividend of $132.7 billion or $1.25 per share. And today, we announced that our board of directors declared a quarter dividend of $1.25 per share payable of September 17, 2026 to shareholders of record as of the close of business on August 20, 2026. This dividend represents an increase of approximately 13% over the dividend paid in the prior year period, and in that year, as a rate of approximately 41% of the midpoint of a full year FFO outlook.

I will now turn the quarter over to Brendan.

Thanks, Mark. The second quarter represented another solid period of both financial and operating results. We continue to lead the industry in AFFO for share and dividend growth. Throughout the quarter, the level of customer activity remained steady and in line with the first quarter. In the U. S. , our customers continue to invest in their networks, expanding 5G coverage with a new spectrum, including C-Band, technology upgrades such as massive MIMO antennas, and growth and fixed wireless access subscribers.

Internationally, we continued the solid progress we made last quarter, integrating the telecom assets and expanding our new tower build capabilities. We built 99 new towers up from 75 in the last quarter. We expect this number will increase steadily over time. New tower builds continue to be a good use of capital, and we expect the risk-adjusted returns to exceed our cost of capital, often on day one. We continue to see positive organic growth in our international portfolio due, in part, to local CPI-linked rent escalators.

While international churn remains elevated, we continue to focus on locking and stable, predictable operating cash flow through long-term contracts and high-quality customer partnerships.

Looking ahead, I am excited about a number of prospects that I think will contribute to organic growth for years to come. On July 22, the FCC formally adopted a plan to auction 160 MHz of upper C-band spectrum, starting in April of next year. When combined with the existing lower C-band spectrum previously auctioned, this option will create a harmonized superband of 440 MHz of contiguous mid-band spectrum to be used for wireless.

In addition to the large amount of spectrum being made available and the accelerated pace of the options, we were very pleased with the stricter build-out requirements established by the FCC, requiring holders to deploy the spectrum or risk forfeiture with no review or waiver process. The upper C-band's build-out requires 45% population coverage two years after the transition deadline and 80% coverage six years after, paired with automatic license termination for not fulfilling the second performance benchmark.

In addition, the FCC made clear that alternative uses such as IoT, fixed point-to-point, and private networks do not count towards coverage milestones. And these tougher build-out requirements are now expected to also extend to private investment firms and others that hold spectrum into the future. This structure will be helpful in ensuring that licensed winners are serious about deploying spectrum for the benefit of the American wireless consumer.

And this will, of course, be good for SBA. As we invest in supporting our customers in meeting their network build-out goals, we expect to see incremental equipment deployed at our sites, driving organic growth for years to come.

And these opportunities do not only apply to the upper C-band. The NTIA recently announced that 2.7 GHz spectrum can be repurposed for full power commercial licensed use. Once approved by Congress and coordinated with NOAA and the FAA, the FCC could auction 2.7 GHz spectrum as early as 2028. We expect that deployment of this spectrum will also require new equipment at the tower site and support long-term sustained site leasing organic growth.

And on Friday, the NTIA announced that it is cleared cleanse to study the 4.4 GHz band for full power commercial licensed use as well. We now have the largest set of federal spectrum bands ever under consideration for repurposing, including 1.6 GHz, 2.7 GHz, 4.4 GHz, and the 7 GHz band. While it will be several years before these airwaves are made available for commercial use, real progress is being made that will be supportive of network investment on our infrastructure for the next decade.

In addition to new spectrum deployments, I am excited for the prospect of other new organic growth drivers, including low latency edge compute demand and terrestrial compliments to potential future satellite directed device offerings.

With regard to edge compute, we see a clear migration towards a distributed architecture with a significant increase in the required number of power and fiber fed locations. To improve speed and latency, enhance redundancy, and reduce the concentration of resources needed to support the growth in AI oriented applications.

Our existing portfolio of assets are well suited to support this growing architecture. And I believe we have the opportunity to realize meaningful incremental organic growth over the coming years as a result of this type of activity.

With regard to satellite solutions, there has been a lot of discussion around direct to device satellite technology, but our view remains unchanged. Satellites are a complement to terrestrial wireless networks, not a substitute for them. However, depending on how the industry develops, the advancement of this technology is expected to provide growth opportunities for our business. Potential new entrants offering direct to device satellite based coverage will require a trail component to their networks in order to provide ubiquitous, high quality coverage at a level competitive with traditional networks.

As new providers arise, new opportunities to benefit from our extensive high quality infrastructure portfolio and our experienced network deployment teams will grow as well. I look forward to the potential of this incremental growth opportunity.

Finally, turning to capital allocation, our dividend remains the fastest growing in the industry and among the fastest growing of all reads. Nonetheless, as a percentage of AFFO, it remains relatively low, providing capacity to continue allocating significant capital for the benefit of our shareholders.

Our leverage at quarter end was 6.4 times net debt to adjusted EBITDA below the midpoint of our target range. As a result, we have ample liquidity to put to work. We will continue to build new towers and look for attractive acquisition opportunities. However, today, we believe share buybacks are the best use of capital at current valuation levels.

As Mark mentioned earlier, we have now fully paid off our revolver balance and we intend to resume share buybacks in the second half of this year. We believe in the strength of our business, the future growth potential and our ability to execute. As a result, we see share repurchases at current valuations as a low risk, high return opportunity.

Before opening it up for questions, I'd like to thank our team members and customers for their trust in SBA. The company's ability to achieve our vision to be our customers' first choice provider and the industry leader in quality infrastructure solutions is what we work towards every day. I'm excited about the future. With new bands of spectrum becoming available, new edge use cases for our existing tower infrastructure and towers being at the center of all future wireless deployments.

I'd also like to thank our shareholders for your ongoing support. With that operator, we are now ready for questions.

If you'd like to ask a question, please press pound 2 on your telephone keypad to enter the question queue. You are going to hear a notification when your line has been unmuted at which time you can then please state your name and your company. Once again, please press pound 2 on your telephone keypad if you would like to ask a question.

Sure. But yet the volumes that we're seeing in terms of applications are relatively consistent with the first half of the year. We haven't necessarily seen an uptick. That's not necessarily the same across all carriers. And I assume this question is specific to the U. S. market. So that's how I'm answering it. In the U. S. market it is, you know, one of our customers is a little bit busier than the others with us today, but that's not really that dissimilar from where we are at various points in time where there's some cyclicality and rotation among who's the busiest. So overall, if you added up the application volumes, they're relatively consistent with where they've been throughout the year.

And in terms of the drivers of growth opportunities into the future, you know, particularly around the new spectrum bands, most of what we talked about is something that is longer term in its nature. So that's something that's going to happen over the next five plus years. I don't necessarily expect it to have a significant impact on next year, but we're also not ready to give our outlook for next year's leasing growth yet. So stay tuned for that for next year.

That's right. Thank you. Sure.

Yeah, I mean, we didn't really change much, right? Most of the stuff at the top end is changed slightly because of FX, and because we're changing the specific FX assumption, which is really driven by what's happened specifically with the Brazilian Real, while it's small, just the math without making a change is driven in large part because of the FX, which is why we break out what the change is excluding FX, and you can see most of those did not change. As you get a little bit further down the P&L, there's a few minor changes that are mostly to do with things like interest expense, which is changed in part because of the financing that we did, so that causes an impact.

And so really, we're just flowing those into the numbers, but basically there's no change in our outlook from what we gave last time, except for a couple of these specific things that occurred that we felt that we should modify the ranges for. But generally, you're correct. I would expect everything still end up in the same ranges that we gave before.

Okay. Glad to hear the news on the stock buyback. Earlier day, we had Echo Star say they're going to do a $5 billion buyback, but it didn't seem like there's pacing there. I appreciate your saying that you could resume the second half 26. I think it's 1.1 billion you guys have left, but how should we think about your pacing of the buyback how it works with leverage at your other capital allocation items?

Yeah. I mean, obviously, I don't want to say exactly and specifically what we would do, but we were trying to be pretty clear that we fully expect to be active during the second half of the year and buying back our stock. And if you look at where we were before, you know, we had a fairly large amount outstanding on our revolver. We had some refinancing that we needed to get done. We completed that in July, just a few weeks ago. And so with that now behind us, we feel like we're in a very strong position to, you know, lean into what we think is a very good value in our stock today, unfortunately.

Yeah. No, I appreciate that. And the last one from me on the competition from Sally, we agree, he's more complimentary. But how should we think about what percent of your base is like really rural, but percent of your towers, because we think that's probably the better venue for satellite direct to sell. We like to differentiate direct to sell versus directed device. But how do you think about that? Are there some sites on the fringe that might be better served by satellite? What kind of magnitude was that for you guys?

Yeah. I mean, it's hard to say, obviously, exactly. I think when we look at our portfolio, we've done some of our own analysis about what might be those fringe sites. You know, it's probably no more than two to three percent, Rick.

But even that, I'm hesitant to really quantify because this remains to be seen how this all plays out. And I don't. I'm not so sure that it's going to be all that impactful at all.

It's a small number. In fact, it might actually find some sites that need to be built, I guess, as you look at when people start using satellite connectivity that they might want to actually say, oh, we need a sell site here. Yeah, for sure. I think I've shared in the past some stories that I've heard anecdotal evidence of the need for incremental sites that might come through satellite activity. And I know that our carrier customers today have used the data that they've gathered from some of the satellite service that has been provided through partners to identify places where they had needs to maybe put a tower site to serve a greater amount of usage than they were expecting in a particular location.

So I think there will be some balance. There will probably be some fringe sites that perhaps aren't economical to maintain, and there will be other places where the opposite is true, and there will be new infrastructure added.

Great. Thanks, guys. Have a good afternoon. Sure.

So in terms of our efforts around optimizing our assets and really what we talked about two years ago, we've been on a consistent journey around that throughout the last couple of years. You've seen a number of activities where we have expanded our presence in certain markets to improve our positioning and other places we have exited certain markets. We continue on that, Mike.

It's not the kind of thing that every quarter there's something specific to announce, but you can be assured that it's an ongoing effort here at the company, and I expect in the future there will be stops taken to improve our positioning as it relates to a variety of markets and businesses that were in, where they are either subscale or we see greater opportunity to enhance what we're doing there. So I guess I'd like to say on that is stay tuned and we continue to pursue that effort.

On the second question, there's really not much I could say. You know, we're always looking at opportunities in the market in all different ways and what we see there as well as conversations with our customers inform our views on the value of our price that would suggest evaluation below where we think our intrinsic value is, and that is usually why you see us lean into buying it at times like that.

Thanks. Sure.

Sure. So on the Lattam question about tower rents, I mean, you know, it's not really that different in Latin America versus our other markets in the sense that all of our customers are always looking at ways to be more efficient and to control costs. And one of those costs is their rents on towers. But it's really a matter of making sure that what we're delivering to them is of greater value than the costs that they're incurring in order to be there. And I think generally speaking, we're able to do that through having high quality locations, providing service and support that meets their needs and provides them a better outcome than they might see from somebody else.

And so, you know, we continue to work with all of our customers in Lattam and otherwise on how we can provide them the most value for what they need out of the sites that we're leasing to them. And I think we've done a pretty good job with that. I mean, there's always going to be situations where there's a site that they don't need or they have some other alternative and it's more cost effective.

But I'd say that those are more the exception than the rule. In terms of ground land buyouts, you know, that's something we continue to do. That's something we've been doing for 15 to 20 years now. Here we have a well established function inside of the company that focuses on buying out land, both for strategic purposes as well as financial purposes.

And I think we've done a very good job. One of the downsides to having done it so well for so long is that the opportunity set is a little bit smaller than perhaps it's been in the past, particularly in places like the U. S. , where we've been at it for a long time. Most of the new opportunities that we see are with the new assets that we've added in some of the other markets, including Central America, and we continue to lean into it there. In terms of the values, though, we continue to find opportunities to do immediately financially accretive deals as well as secure our assets for the long term.

And then in places like Brazil and others where you have pass through of land costs, you know, we're able to share a little bit of that with our customers and that goes to your first question and that it helps reduce some of that cost for them and make it a better value proposition. And then your last question, I think, was on new tower builds. If I remember correctly, the returns on new tower builds.

And, you know, we have, it's been tough in the U. S. to see very strong returns because we've had competition from folks who've been willing to accept, frankly, returns that we just really weren't willing to accept. But, you know, our ability to deliver timely for our customers and to do a quality job, I think, is going to allow us some incremental opportunities here over the next couple of years.

I would expect to see us do a little bit more. But, having said that, I don't expect it to be overly material. Internationally, though, we're building a lot of sites. We have some great opportunities in both Africa and in Central America in particular, and you're seeing us build more and more sites. And, as mentioned in my prepared comments, as we move through the balance of the year, I would expect that you'll see us build a greater amount of sites, each of the successive quarters throughout the rest of the year.

Thank you. You're welcome.

Brendan, that's honestly a little bit of a hard question to answer because of where we are in the current status of the development of those opportunities. The companies that are obviously looking at direct-to-device service are still in the very early stages of working out how that might work as they acquire spectrum vans and they start to do network planning.

The comments that I made were really meant to highlight what I believe will be a long-term driver of additional opportunity for our towers. And that is that anybody that is going to provide direct-to-device satellite service, if they plan to compete with the existing MNOs and the existing networks, in order to do that effectively and to deliver the kind of quality that will be required, there will be a need for a terrestrial component of those networks. And if that is the case, obviously that will be good for us because we will be able to provide a solution that gets them to market and on air as quickly as possible.

And I think we're very early in those conversations, so it's premature to talk about anything specifically, but I'm hopeful that over the coming year or two we will have more specifics that we can discuss as that starts to develop, but the bottom line is really the physics and what's necessary to provide that kind of service and compete, and I think we're well positioned to benefit from that.

Okay, great. Thanks. That's helpful. And then just on the headcount reductions that we've seen at some of the U. S. carriers recently, has this altered their plans or the piece of deployments that you're seeing for this year or kind of even going into 2027?

Yeah, I don't know whether the headcount reductions specifically, but I do think that there's been a change in leadership at a couple of our larger customers and certainly a renewed focus on cost control and maybe just a refreshed review of how things are done. And I think while taking a pause to refresh how they view these things and where they spend their resources, that has had some impact on spending levels here in the U. S. , but I don't think that it means anything that significant for the long term, because ultimately, network quality is going to continue to be critical for their future competitive positioning, and I think we're in a good position for that.

Very good. Thank you. Thanks. Moving to our next question.

Well, I can't give you the specific details at this point, but we are talking to a number of parties who have an interest in this more disaggregated approach to compute and specifically to spread out the usage of power, those types of things that I think present challenges in the existing more centralized or hyperscale data center structure. So based on how the conversation is going, I would expect that things will develop over the course of the next 12 months, but it's just a hair premature to get into that specifically, but I do feel more confident today than I have at any point in the past about the development of this particular.

On the discretionary CAPX, I would say that we're expecting in the ballpark around 600 or so sites to be built on new tower goods this year. Most of those in Central America has a reasonable amount in Tanzania as well. So that's maybe slightly out from what we had previously assumed, which contributes to the discretionary CAPX increase.

And then the second question, and I apologize, I got this a little bit mixed. I think you're asking the staff across international markets of a 4G to 5G transition. Is that correct?

Yeah. So many of our markets do not actually have 5G service outside of the core central urban areas, and that allows great opportunity for us to see incremental spending and a min-act city to upload those networks over the coming years. I don't have a sanitary offline. We can probably get you something to give you a ballpark on that, but it's fairly low. It's certainly well behind the U. S. I would say if you were looking at it in terms of years, it's at least five years, maybe more behind the U. S. in terms of development for our average latte-am and African market.

Got it. Thank you.

Yeah. I mean, we obviously vehemently disagree with their claims of the cap, and we will fight that as we currently are. I think we're pretty well aligned with the rest of the industry and the counterparties that are involved in this. I don't want to say too much about something that's ongoing litigation. I am pleased that the FCC did make it clear that some of the games, frankly, that were being played by Dish EcoStar around the fund. The escrow fund that was set up in terms of their rights to claim, to make claims there that that was shut down pretty quickly by the FCC, which we appreciate.

But, you know, we expect that we will be successful in our legal pursuits and that there will be plenty of funds available within that account to meet many of those obligations that we expect Dish will have to SPX.

Great. And then one more if I can. Just with the recent DE auction, you know, Verizon came out a winner there. As they deploy that spectrum, is that within your agreements, is that something that you'll be able to monetize?

Yes. Short answer, yes. Okay. Thanks very much. Appreciate the time. Sure.

Sure. On the M&A front, you should expect that we are looking at everything as we have always and continue to do that. What really is being reflected here with the low number of sites that we've closed on and the commentary on the buybacks, which you correctly put together, is just simply that, and this is mostly specific to the U. S. , but the relative valuations for the limited number of assets that are available in the U. S. are on average at a much higher valuation that our own company is valued at by a fairly significant margin. And so as a result, comparatively, in terms of using our resources for investment, we see our stock is a much better use of capital than paying up for deluded deals, frankly.

However, there are opportunities that still come along, and we think maybe we can add value, and I would expect that we will still be active in the M&A market when those opportunities arise. On the new leasing cadence in the second half, if you look at our outlook that we provided in the revenue bridge that's in our press release and you look at the range that we provided, at the midpoint of the range for new leasing contributions in the U. S. , you'll note that based on the actual results of the first half of the year, it implies a lesser contribution in the second half of the year. That's kind of been the expectation throughout the year, so nothing is really different than what we expected.

We didn't change that outlook at all. But based on a little bit of a slowdown coming out of last year and into this year, and although it's been steady this year, that flows through with it being a little bit higher in the first half of the year and a little bit lower in the second half of the year. So that's still our expectation. Nothing has happened to change that for this year.

Great. Thank you. You're welcome.

Yeah. I think each of the things that you just mentioned would certainly drive more activity towards amendments because they would each require either a replacement of the existing antennas with one that has a new radio embedded or there would be incremental antennas added in some cases. Those would all be in the form of amendments. So I would expect that would be the nearer term drivers, the two items that you just mentioned, but definitely longer term with some of these new spectrum bands that will come online over the coming years that we discussed in our prepared comments.

I would think a lot of that initial activity would be in the form of amendments. And there is usually a cycle where you have amendments where you upgrade the existing network and then there's kind of an effort where there's more collocations as there's some infill or densification of the network done for that newer spectrum band over time.

And in this point in time, we're sort of in that phase for prior deployments including CBAN, lower CBAN. Great. Appreciate that. And just one follow-up for me. Could you maybe update us on international churn? I think you've talked about this being a peak year, but I believe there's still a chunk of claro churn that could come. So just trying to gauge the timing of when the international churn comes down back to a more normalized level. Thanks.

Yeah. You know, it's been elevated recently and probably remains elevated for at least a little while. We're in regular conversations with our customers, but the reality is there's been a decent amount of both consolidation and even bankruptcies in some of our international markets, particularly our largest international market. And so that's had an impact on the international churn.

In any case, our focus is on working out agreements with each of our largest customers where we stabilize that through long-term arrangements. Where they get something out of it, that might be some rental relief that results in churn, but that we get something out of it too, which is a much more stabilized and consistent and reliable cash flow stream.

And it allows us to work together towards new growth opportunities as they deploy new spectrum bands. So we're kind of in the midst of that. I don't want to commit as it relates to next year because frankly we're having a lot of those conversations today, and I don't know for sure what the timing will be. But I expect that we're nearing the end of this heightened international churn, mostly because we've gone through it with most of the customers, and there's only a couple left.

Great. Thank you. Sure.

Sure. On the bond, I think we gave all the details that you can look at for each of the specific tranche of notes and what the interest rates are. So you can basically do the math on what that will be going forward when you talk about it in terms of savings. Unfortunately, we're refinancing debt that is generally speaking less expensive or will be in the future.

So it's really a matter of savings against what the alternative might be. And I think as an IG issue where we're getting a better interest rate today than we could get if we weren't. So there are savings, but we're in an overall higher interest rate environment than we were when we put in place some of the debt instruments that we'll be coming to now in the next several years.

But it should all be very clear and our guys can walk through that with you, Michael, if you need any help on calculating the interest impacts going forward. On the wholesale MLAs versus allocart approach, the reality is we're sort of indifferent to the structure in and of itself. It really comes down to the specific terms. I think with the wholesale MLAs, we've done more of that recently than we had in the early days of our history.

In part, because we've had an evolution here where things are getting a little bit more mature, there's less customers, and there's a value that they see, and frankly we see in having some level of certainty not only in price points, but also in how business flows, how we process things, how we can be helping them be more efficient in their deployments, which ultimately benefits us. And the easier we make business for them, I think that that benefits us. But having said all that, at the end of the day, if the terms are not something that we feel is in the best interest of our company or our shareholders, then we're fine doing it allocart as well, and that's what we've done many times in the past.

So I would expect there will probably be a situation at some point where we have some carriers on MLAs and others that we are dealing with on an allocart basis.

Great. Thank you very much. Sure.

Well, depends on who we're talking to. Obviously, there are different thoughts depending on the potential customers that we're currently engaged with and some very specific plans and expectations, and they're not all exactly the same. But on average, these would be smaller type of facilities, not, you know, these would not be one megawatt facilities typically. That's something that is possible down the road, but really our tower sites are not set up today for that in terms of power availability specifically. But, you know, we continue to work through what the needs are, and we're able to make adjustments and accommodations to help meet the needs of the customer based on what works for them. So it'll continue to evolve, I'm sure, and we'll find the right balance between provide and what they need.

Okay. Great. Thank you. Sure.

Yeah, we have flexibility, as you said, and the good news is that we're producing a lot of free cash flow as well. So we actually have flexibility that doesn't even have a major impact on our leverage. I would expect us to try to be more towards the middle of our target range over time. But if we saw an opportunity where we could be opportunistic around some dislocation that we thought didn't make any sense, then perhaps you would see us temporarily bring leverage up a little bit closer to the high end.

Thanks.

Yeah, I don't, I don't really want to say too much about the specific for competitive reasons. I don't want to say too much about the specific customers today, but that is something that we will certainly talk more about if it develops as I expect that it will. In terms of our portfolio, the types of things that we're looking at today, I would say roughly half, just about half of our portfolio in the U. S. would be well suited for the type of uses that we're discussing with some of these parties today.

Thank you.

Great. Well, thank you all for taking the time tonight. And we appreciate it. We look forward to reporting our third quarter results next quarter. So thank you again.