Gregory Lundberg - Senior Vice President-Investor Relations Jeremy John Male - Chairman & Chief Executive Officer Donald R. Shassian - Chief Financial Officer & Executive Vice President.

Marci L. Ryvicker - Wells Fargo Securities LLC Alexia S. Quadrani - JPMorgan Securities LLC Benjamin Daniel Swinburne - Morgan Stanley & Co. LLC Tracy Young - Evercore ISI Jason Boisvert Bazinet - Citigroup Global Markets, Inc. (Broker) Drew M. Borst - Goldman Sachs & Co..

Good day, ladies and gentlemen, and welcome to the OUTFRONT Media Fourth Quarter 2015 Earnings Conference Call. At this time, I would like to turn the conference over to Mr. Gregory Lundberg. Please go ahead, sir..

Good afternoon, everyone. Thanks for joining our 2015 fourth quarter and full year earnings call. On the call today are Jeremy Male, Chief Executive Officer, and Donald Shassian, Executive Vice President and Chief Financial Officer. After a discussion of our financial results, we'll open up the lines for a question-and-answer session.

A slide presentation to accompany today's call can be found in the Investor Relations section of our website along with the earnings release and an audio webcast. This conference call may include forward-looking statements.

Relative factors that could cause actual results to differ materially from these forward-looking statements are listed in our earnings materials and in our SEC filings, including our Form 10-K. We will also refer to certain non-GAAP financial measures on the call.

Any references to OIBDA and AFFO made today will be on an adjusted and REIT comparable basis, respectively, both of which are reconciled along with other non-GAAP financial measures in the appendix of the slide presentation, the earnings release, and on our website, outfrontmedia.com. With that, I will now turn the call over to Jeremy..

Thanks, Greg. Good afternoon, everyone, and thank you for joining our call today. Now please turn to slide four, the key highlights of the quarter. I'll begin with revenue growth. The growing top line is the single most important factor in our ability to deliver growth and value to our shareholders.

And in the fourth quarter, we grew revenues 4.3% organically. This compares favorably to our growth in the past two quarters and, importantly, this growth was distributed across our asset portfolio. We improved growth rates once again in U.S. billboards and we delivered a very strong double-digit organic growth in transit nationwide.

Not only did we have a good performance in the quarter, we grew total organic revenues for the year by 3.8%. This is a solid result, and we look forward to improving it over time through our numerous strategic growth initiatives.

During the quarter, we invested $3.2 million into these strategic growth initiatives, particularly in our development of advanced digital displays, mobile, cellular leasing, and our data management platform. It is this investment along with the negative impact of foreign exchange that contributed to a slight OIBDA decline.

We fundamentally believe, however, it's important to position ourselves for the media market shift to mobile, digital and data – a shift which perfectly complements our location-based assets. As you look at our overall revenue growth, it's also important to remember that we're enhancing and rationalizing the asset portfolio.

First, the sale of our Latin American businesses is on track to close in the first half of this year. We think this is great for the focus it gives our business on a going forward basis, and it enhances the mix of our business in the qualified REIT subsidiary. The sale proceeds are being brought back into the U.S.

with minimal tax leakage and are expected to be used primarily for debt repayment.

Secondly, we continue to execute on our stated strategy of pursuing smaller tuck-in acquisitions that are accretive to AFFO, such as our announcement earlier this month of our acquisition of Reynolds Outdoor Media, which brings over 500 transit and mall displays into our portfolio in Dallas and Houston, the number five and number 10 DMAs, further reinforcing our already great positions in both markets.

A number of you have been asking for more color on our annual AFFO expectation, and this is something I'd like to address on today's call. Right now, we estimate AFFO to increase in the mid to high single-digit range for the full year 2016.

Later on in this call, Don will discuss AFFO in further detail, and I'll provide some perspective around our first quarter 2016 revenue expectation. As you probably have seen in a separate press release today, our board has declared the first quarter dividend of 2016 of $0.34 per share payable March 31.

This level is unchanged from the December quarter. Last year at this time, our board increased our regular dividend by around 5%. It's the board's view that currently our dividend is not being fully valued in the market, as evidenced by a yield of 6.7% at today's close.

While this remains the case, the board believes that shareholder interests are best served by deploying our incremental capital for growth investment, acquisitions, and debt reduction. I'll now turn the call over to Don for a more in-depth look at our financial results..

Thank you, Jeremy, and good afternoon, everyone. Please turn to slide six, which shows a summary of the year-over-year performance of some of our key financial metrics for the quarter and the year.

The fourth quarter columns in the table include the acquired Van Wagner assets in their entirety for the two periods, but the fiscal year columns only includes them on a reported basis from the date of acquisition on October 1, 2014.

A significant item affecting the comparability for the two years and quarters relates to a non-cash loss on real estate assets held for sale. This appears in our financial statements as a result of our October 31 agreement to sell Latin America.

From an accounting perspective, we are required to compare the fair market value to the carrying value, including any foreign currency translation losses on the balance sheet.

This produces a non-cash loss that essentially represents the write-off of those foreign currency translation losses that have built up over up to 18 years that the assets were under our ownership. These losses are in accumulated comprehensive income of the equity section of the balance sheet.

As a result, in Q4 2015, this non-cash loss on real estate assets held for sale relating to our pending sale of Latin America was $103.6 million. We adjust for this in our REIT comparable figures for net income, funds from operations, and adjusted funds from operations on this slide.

The table on this slide also adjusts the full year 2014 to show the level of taxes that we would have paid had we been operating as a REIT for all periods and adjusts for interest expense as well as restructuring expenses, acquisition costs, and standalone costs in order to equalize their impact on both periods. Turning to slide seven.

For the quarter, our total revenues were up 0.9% on a reported basis and 4.3% on an organic basis. The primary difference between the two is substantially from the impact of foreign exchange in both Latin America and Canada.

Since we are in the process of closing on the Latin America sale, I thought you would find it useful to know that this growth rate would increase slightly by removing Latin America from both periods. In the U.S., total organic revenues were up 4.7% in the fourth quarter, driven by growth in both local and national.

Transit and other delivered strong 12.8% organic growth. I would like to, once again, highlight that the transit franchises in the portfolio are virtually the same as last year, so the increase in revenues is almost entirely driven by our managing the assets through growing incremental yield. U.S.

billboard organic revenues were up 1.4%, a significantly improved growth rate compared to the second quarter and third quarter. Same-board static billboard yields were up in the fourth quarter, their strongest performance of the year. Similar to prior quarters this year, same-board digital yields were down.

Internationally, organic revenues were essentially flat due to slightly higher revenues in Latin America, offset by slightly lower revenues in Canada. As you know, we continue to build and evolve our sales organization with both new and experienced people into our key markets, and we'll continue to do so throughout the year.

The markets where we made proactive changes earlier in 2015 continue to improve, and we are highly focused on driving further improvements in all of our markets. Now, let's turn to expenses on slide eight. Our total expenses were up $7 million or 2.5% on a year-over-year basis.

If you exclude the investment in our growth initiatives, which are in strategic business development expenses, you can see that total expenses were up just around half of that amount. Compared to the fourth quarter of 2014, corporate expenses are down in both dollars and as a percentage of total revenues.

In combination, billboard lease costs and posting and maintenance expenses were also essentially flat in both dollars and as a percentage of total revenues. The only areas where we experienced an increase in expenses were transit franchise, which as you know are essentially revenue share contracts.

So the increase here is a function of a very strong transit revenue growth. And we're up in general and administrative where we made the strategic investments mentioned earlier.

Turning to our adjusted OIBDA on slide nine, you can see that this 2.5% expense growth combined with 0.9% reported revenue growth translated into a 2.5% year-over-year decline in fourth quarter adjusted OIBDA.

This decline of $3 million in large part reflects the $3.2 million strategic investment we made in the business in Q4 as well as a $1.2 million foreign exchange headwind. It also reflects the mix of our business during the quarter. The growth in U.S. transit contributed to improved margins but billboard did not.

As we have mentioned before, we need a bit more billboard revenue growth for margin expansion relative to lease and other cost increases. Overall, we believe that our cost structure and ongoing expense control is in a good place.

That being said, we continue to look at several initiatives to drive additional permanent reductions to be more efficient and we're particularly focused on lease maintenance and administrative costs. Turning to slide 10, capital expenditures were $16.2 million, which is comprised of $5.1 million of maintenance CapEx and $11.1 million of growth CapEx.

Maintenance CapEx was 1.3% of revenues during the quarter and 1.7% for the full year 2015. During the quarter, we built 42 digital boards in the U.S. and eight internationally. For the year, we built 100 in the U.S. and 25 internationally, a little north of the guidance we gave you and we expect to be in this range again in 2016.

For the full year 2015, our capital expenditures were $59.2 million, below our revised guidance of $65 million. Our 2016 guidance for total capital expenditures is similar to what we gave you at the beginning of last year, $65 million to $70 million. This includes $25 million to $30 million for maintenance.

Please turn now to slide 11 and we'll look at our cash flow for the quarter. This slide shows AFFO on a REIT comparable basis to equalize the number of items that you can see in the schedule in our press release. Please note that the quarterly AFFO now reflects Van Wagner for all periods.

However, the full year 2014 number only reflects the acquisition for the fourth quarter of 2014. AFFO for the quarter declined $2.1 million or 2.7% year-over-year, driven by a $3 million decrease in OIBDA, including the strategic business development expenses and a $1.2 million increase in acquisition-related interest expense.

These were partially offset by $2.8 million of lower maintenance capital expenditures and $2 million of lower current taxes. For the year, AFFO was $266.8 million or $1.94 per share. You can see how this provides very good support of our dividends on slide 12. For 2015, dividends were 71% of AFFO and 80% of free cash flow.

As Jeremy mentioned, the board declared the first quarter 2016 dividend, unchanged at $0.34 per share. Presently, we see the best use of incremental capital for growth investment, acquisitions, and debt reduction. As you know, at $0.34 per share, our current dividend is in excess of the 90% REIT-required payout.

It has always been our stated goal to pay at least 100%. Right now, our payout is above 100% of our tax return taxable income. As our business and profitability expands, we are committed to growing shareholder value through both growth in AFFO and growth in dividend income.

Capital allocation is an ongoing decision process, and we will update you as we move forward. Slide 13 presents an overview of our balance sheet. At quarter-end, the weighted average cost of debt remained 4.7%. Our liquidity position was $495.4 million at the end of the quarter.

And our net leverage ratio was 4.8 times, down from 4.9 times at the end of the third quarter 2015. Our target range for net leverage is unchanged. We are committed to drive our capital structure to 3.5 times to 4 times, which we believe is the appropriate leverage for this business.

We expect to further delever through a combination of growth in OIBDA and additional debt pay-down through the use of the Latin America proceeds and internal cash generation. I would now turn it back over to Jeremy..

Thanks, Don. Please now turn to slide 15. I'll begin with our first quarter outlook. At this point, we expect that revenue growth in the first quarter will be in the low single-digit range, with broadly similar growth rates in both billboard and transit.

As usual, this outlook only represents our view at this point in time and is on a constant dollar basis. Please also note that until we close on our Latin America sale, it also reflects our international reporting segment in its entirety. I'd like to close our prepared comments today by saying that I'm very excited about where we are right now.

Our revenue growth is solid and we're forecasting mid to high single-digit growth in AFFO while continuing to invest in our key strategic objectives for 2016. Our investment in digital display technology continues as part of our ON Smart Media platform and we will be making further deployments in the near future in New York City, the Washington D.C.

Metro system, and also the pedestrian walkways around downtown Minneapolis. Substantially all of the sales force is trained in selling OUTFRONT Mobile, which is our geo-fenced mobile advertising solution. We started selling this in the fourth quarter, so revenues are still small.

However, initial results to advertisers show click-through and secondary action rates on the campaigns that are well above industry benchmarks. To-date, we've sold campaigns to nearly 100 advertisers across 11 different categories and across 11 different markets. It's growing every day and we're already seeing renewals.

So a very encouraging product and we look forward to updating you on this in future quarters as the revenue scales. This will be the year that our cell site leasing on select billboard assets begins to generate revenue and we're working on several fronts with potential wireless tenants for IoT, small cell and macro cell.

And we're continuing the development of our proprietary data management platform, a cornerstone of ON Smart Media with valuable input from data providers and technology partners. Our advertising clients are very excited about the prospect of being able to target specific audience profiles mapped to our assets in real-time by location.

So I hope that gives you an idea of what we're focused on 24 hours a day and we believe these efforts will improve the advertising proposition for our clients, improve our operations, and importantly drive returns for our shareholders. So, operator, now let's open the line for questions..

Thank you. And we will hear first from Marci Ryvicker [Wells Fargo]..

Thanks. I have a couple of questions.

First, in light of the strongest fourth quarter of any of your peers, can you just give a little bit of color on the first quarter revenue guidance, why the deceleration?.

Yeah, thanks, Marci. Look, Q4 in 2015 was a good quarter for us. I think it's important when we look at our growth and consider it in the light of our peers, you can't always draw a straight line between us and our peers. We operate in slightly different market sectors. We have more exposure to transit, for example.

And we have slightly different exposure to our geographies. But, overall, I think it's fair to say that we were reasonably pleased with the development of the business and our revenues in Q4. I think as we look forward into the first quarter, we had a pretty strong growth rate in Q1 2015. We were up actually over 5% in our U.S. business.

We had a very strong performance in our transit business. We also had a pretty good contribution to both billboards and transit actually from the NBA All-Star Game, which disappeared this year from New York and actually went up to Toronto. So we missed a bit of revenue there.

So, looking forward, I think low single-digits and, as I said, much more consistent growth across both our billboard and our transit businesses..

Okay.

And I didn't hear a mention of the New York MTA contract, so I assume the RFP has not – is not out yet?.

Marci, it feels a little bit like Groundhog Day for me whenever I'm asked about the MTA. I think we first started talking about it, in earnest, if we go back to Thanksgiving 2014. The simple answer is that the MTA RFP isn't out yet. It is in their hands. We don't have any control of that.

You'll recall that our contract was extended to have a potential end date at the end of this year. There was some optionality in them having the ability to terminate the middle of this year. I think from where we are right now, and not seeing an RFP, that's highly unlikely. So we're certain so that won't be the case.

So I think we can pretty safely say we'll be going right through to the end of this year. The RFP will come out when it comes out. We remain very confident in our ability to win this RFP when it comes out. As always, I will say we're never arrogant, but we're absolutely ready to bid this contract just as soon as we see that RFP..

Got it. The last question for me, I know billboards were up.

Both digital and static billboards were up in the quarter?.

Same-board yield question, Marci, the static billboard was up, same-board digital was down, consistent with what it has been in the past several quarters. But static yields were up very strong this past quarter, the strongest quarter for the year..

Got it. Thank you so much..

Thank you..

Thank you. And we'll now go to Alexia Quadrani [JPMorgan]..

Hi. Thank you. Just two questions.

I guess, first, on all the M&A we're seeing in the outdoor industry right now, I guess, can you comment on the competition? What the environment looks like, maybe a little bit of color in terms of how competitive Reynolds was? And then if you could provide some color about, I guess, why you passed or why you were not involved in CCOA..

Sure. Alexia, thanks for the question. You know what? When it comes to M&A for OUTFRONT Media, I think the headline for us is smart and selective. As a leading company in this industry, we look at virtually every transaction that's in the marketplace. We have qualitative and quantitative criteria that we look at.

And not every transaction is a perfect fit for us. Not all can be executed at the right price or the timing relative to other things we have going on. And our valuation may be different than others. Revenue and expense synergies that we may see or may not see can be different than others and that drives different valuations.

We are seeing today, continue to see some tuck-ins that are out there, and we continue to look at them and we will continue to be very selective. Reynolds itself was a competitive bidding process. We did not disclose the price or the revenues at the seller's request.

So it was not a material transaction, we didn't disclose it, but it was a seller's request to not do so. What I can tell you is that we paid a multiple on EBITDA that is significantly below our public trading multiple and I can tell you that that transaction is immediately accretive to AFFO per share. We are – continue to look at transactions.

We think there's a lot of things that continue to be out there. And we're committed to also be smart about these – smart and selective because we're not going to go after everything that's out there. We are committed to getting our leverage down and we'll look at things where it makes sense.

And if it's not – if it's a nice to have, we're not going to go and lean into. If it's a must-have, we'll lean into it. But we are really committed to using our balance sheet smart and growing things in the right way that meets our criteria.

Does that help?.

Yeah. That's very helpful. And then just one follow-up, if I might, and I apologize if you said this and I missed it.

But on the better growth we're seeing in the static billboards in the quarter, did you give any – if you'd give any color maybe on the different verticals that drove that?.

What we can say, if we look at the sort of top verticals for us by dollar change in that quarter, also was very strong for us in Q4. And it looks as though that's continuing into this year. And government was second by dollar change, and third was health. Drags actually were movies, interestingly, in Q4.

Casinos, which has been frankly a category that was difficult all year. And in the quarter, beer and liquor, there was similarly also a category that was a little bit down for us across the 12-month period..

Thank you very much..

Thank you..

Thank you. We'll continue on to Ben Swinburne..

Thanks. Good afternoon. Can I ask on the AFFO guidance, presumably that includes the Latin American assets. I realize it's small dollars, but that includes the Latin American assets until they are sold.

And, Don, can you give us anything else that could help us with the build there, particularly cash paid for direct lease acquisition costs? Any comment on cash taxes, just a couple of the pieces that help us build it..

The guidance anticipates LatAm being with us for a portion of the year. It also includes the tuck-ins that we have completed to-date. So really it's – we're expecting that LatAm is going to close in the first half of the year. And we've announced a couple of transactions that are relatively small and meshed in there.

The pieces on LatAm – LatAm overall, when you look at an OIBDA and AFFO, we really haven't given out a lot of color on it. I would say that the amounts that are paid on commissions are pretty consistent as a percentage of revenue of all the rest of the businesses. And so I think that's probably the best guidance that we really can give you.

And taxes is not that significant..

No. I meant – sorry, not on LatAm, I meant overall for the company.

The cash taxes and acquisition costs then for 2016, should it look like 2015?.

Well, I'm sorry. My bad, Ben. Acquisition cost should look like 2015. Cash taxes I think you'll see that – we've got a disclosure that's in our – I think it's in the press release. I know it's in the 10-K that you can see our taxes – both the tax expense and the cash taxes as a percentage of pre-tax income, excluding the loss on the real estate sale.

And I think if you sort of model that's upwards of about $10 million, I think that's probably a reasonable approximation at this stage..

Okay. And then, Jeremy, just on the first quarter guidance, particularly transit, which was up again low teens in the fourth quarter and I think you're guiding to low single-digits in the first quarter.

How much of that is the NBA All-Star Game? Is there something else happening to slow down – I realize transit was running at sort of an incredibly rapid pace. Maybe it's just mean reversion.

But any other color on the transit slowdown that you could share with us?.

Yeah. I mean, in Q1 last year, Ben, we were up sort of 13% in our transit business. And I have to tell you that we're not budgeting for that level of growth this year. NBA All-Star across both parts of our business is around about $5 million. A good portion of that was transit.

I think when you look at how well we did in that business last year, it relates a little bit to the question that Marci asked earlier on the MTA. We increased revenues on the MTA by north of 10% for the last year. That's an amazing job that we've done for the MTA. And I think that resonates very well for us as we look at the RFP going into this year.

So, I guess, in short, we're not expecting that to be in the double-digit growth range in our transit business next year. It's, obviously, a smaller part of our business and does tend to bounce around a bit more. So that's probably the only color I can sort of add to that..

Okay. And then just one last one on the dividend situation. Don, I'm trying to understand the board's rationale or maybe what would change their view, you said you guys are going to continue to evaluate it.

But is it mainly a function of the stock price and the yield, or are there other factors that might lead you to revisit the dividend as you move through 2016?.

Ben, there's a lot of factors that go into it, but I do believe that the stock price and that yield really played a big part in our thinking and our recommendation and the board's decision. Raising dividend, it's not a lot of cash, absolute dollar when you think about it. But it's – well, I don't think we're getting any value for it.

And while we are making investments in this business if we want to grow this business we really believe that investing in the business, investing in acquisitions or paying down debt, which is an immediate improvement in increased equity value, is a much better use of that cash. And so we don't like where the stock price is.

We're going to manage this business and drive it and it is our goal to grow this business and to grow that dividend and we do hope that all of our stakeholders are going to recognize that and we'll get recognition for that in our stock price and we will – the board will act accordingly..

Got it. Thank you..

Thank you..

Thank you. Our next question will come from Tracy Young with Evercore..

Yeah. I have a couple.

In terms of the digital business or your guidance, I guess, for Q1, does that imply anything about the digital business in terms of yield?.

No. I wouldn't say that – we're seeing digital yields and the whole digital business right now is doing very, very well. I mean, we analyze our digital boards quite strongly. We're seeing a big push by all of our sales people. We're putting a big emphasis on growing.

I don't think that by itself is a reflection of the low single-digit guidance that Jeremy gave. I think the low single-digit really is – excuse the bluntness – first quarter last year was a heck of a quarter. It was a really strong quarter. And while we're working off of a really good comp, that's great.

Some things are tough to repeat like the NBA All-Star Game that Jeremy talked about. We're seeing static billboard and digital billboard doing very, very well. And there is nothing to be looking under the covers for that one. It's really I think doing pretty well..

Okay, great. Last quarter, I believe New York and L.A. were particularly strong in terms of your markets.

Are you still seeing or did you see the same in Q4?.

Go ahead. I'm sorry..

Yeah. I mean, geographically, if we look back to the year as a whole and including Q4, New York and L.A. were both geographically very good for us. Yes. They also happen to be our two largest markets, which helps..

Yes, thanks. And then you mentioned the $3.2 million of strategic business expenses in Q4.

Should we expect something similar in Q1?.

I would still say in that zone, yes..

Okay. Thank you very much..

Thanks, Tracy..

Thank you. We'll go to Jason Bazinet with Citi..

Thanks. I ask this only because the buy side is so focused on recession risks.

But can you just give us a ballpark estimate of how much revenue you could absorb in terms of declines before you'd have to potentially cut the dividend? And how does that compare to a garden-variety recession if you sort of look further back in time than the Great Recession?.

Well, Jason, I'm going to have to start shooting from the hip here. It's something we planned and we've looked at. We've got a – we believe that dividend is sacrosanct. It is extremely important to us. We've got a payout ratio today of 80% on free cash flow.

So there is a very significant – you're talking $188 million dividend on $230-some-odd million of free cash flow, so there is about $50 million of room of free cash flow right there. You gross that up for revenues.

You're talking a very large amount, you'd have to look at our CapEx, the free cash flow number includes growth CapEx, which we could stop on a heartbeat. Our $60 million of CapEx we did this year, we've got a very large amount of that, which you can just cut off and really put on a sequester for a period of time and move it to another point in time..

I think the other point is, in that kind of real recessionary type environment and then there are other costs that we can go forward in the business. If you look back to the sort of 2009 time, all the outdoor companies actually found within what we understand is a fixed cost business, actually there are costs that you can take out.

And I think it's also worth repeating I think that came up on one of our peer calls and that is that right now we have pretty good percentage of our revenues booked for the year.

We are sort of well north of 50% and right now be it in terms of either our national business or indeed our local business, there's nothing to tell us that we're going down this – going down that kind of road..

Right, okay..

And, in fact, on the U.S. side, Jeremy, 60% of last year's revenue in the U.S. has already been booked. I mean, this clearly has been pretty strong bookings coming in..

Interesting.

Is that contractual, though? I mean, in other words, if someone books it, can't they always pull it?.

Those are contractual to a period. So we have locked out those down. You got to work with your customers. But those – if they want to pull out, you've got to play with them. They sort of have a – they probably have a 60 day out, but people made commitments and we continue to see commitments near term and longer term throughout the year.

So we're not seeing – I understand the question, I understand some of the sentiment that may be out there. We're not seeing it..

You're not alone. No one is seeing it. Thank you very much for the answer..

Thanks for the question, Jason..

Yes, you bet..

Thank you. And we have a question from Drew Borst with Goldman Sachs..

Hi, guys. Thanks. I wanted to ask about the growth CapEx. I noticed that it looks like you're expecting it to increase about $6 million in 2016? And if I heard you right, I think the digital board rollout will be pretty similar. So I'm kind of wondering what's driving the increase..

Drew, actually, if you look back to this time last year, we guided pretty much the same, and that's sort of $65 million to $70 million range. There is nothing particular in that.

We've probably got a slightly larger envelope out there just to – if anything comes up that if we get some decision to go out and make some great capital investments over that time, it sort of gives us that cover. But overall, I wouldn't expect there to be too much difference between this year and last year.

One thing that we are looking to do is enhance some of our billboards. We're looking at sort of enhancing some of the lighting, which we think will increase value on some of those boards. There is a bit of that in there. But we'll keep updating that CapEx guidance on a quarterly basis.

And as I say, the guidance today was actually in line with what we gave this time last year..

Okay. On the strategic business initiative expense, Don, I heard your comment about the first quarter being similar at about $3.2 million.

How about for the rest of the year? What do you expect to see?.

Drew, I'm going to suggest to people to sort of think about that at that same level on a quarterly basis at this juncture. We're looking at a number of initiatives and still working through scaling up and doing something. At this juncture, I would leave it there. And if it's going to change, I'll give you different guidance.

But we are working very feverishly on those four initiatives that Jeremy mentioned, both wage and non-wage costs, and at this point I think that's still a pretty good run rate for right now..

Okay. And then one last one.

On your AFFO guidance, the mid to high single-digit growth, what are you guys assuming for contribution from the cell site leasing initiative that you're working on?.

It's actually a pretty small number built into 2016. I'm sort of a show-me-the-money kind of a guy. We've got a lot of initiatives on this way. We feel very good about it, very optimistic. I think we got a team working on this and we'll make some great headway. And I'm hoping to be pleasantly surprised that that's going to build some stuff in there.

Though it's pretty small for what we sort of budgeted but we've got a lot of resources and attention to this. We think it's a very, very unique opportunity that we really, really want to harness..

Okay. Very good. Thank you..

Thank you..

Thank you. And with no additional questions, I would like to turn the floor back over to Jeremy Male for any additional or closing remarks..

Thanks, operator. And firstly, thanks to all of you for your questions and your time today. And we look forward to seeing many of you at investor conferences over the next couple of weeks. Thanks very much, again..

Thank you. And again, ladies and gentlemen, that does conclude today's conference. Thank you all again for your participation..