Q4 2019 Consolidated Communications Holdings Inc Earnings Call

Feb 20, 2020 PM UTC 查看原文
CNSL - Consolidated Communications Holdings Inc
Q4 2019 Consolidated Communications Holdings Inc Earnings Call
Feb 20, 2020 / 03:00PM GMT 

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Corporate Participants
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   *  C. Robert Udell
      Consolidated Communications Holdings, Inc. - President, CEO & Director
   *  Jennifer M. Spaude
      Consolidated Communications Holdings, Inc. - VP of Corporate Communications & IR
   *  Steven L. Childers
      Consolidated Communications Holdings, Inc. - CFO, CAO & Assistant Secretary

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Conference Call Participants
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   *  Davis Hebert
      Wells Fargo Securities, LLC, Research Division - Director and Senior High Yield Analyst
   *  Gregory Bradford Williams
      Cowen and Company, LLC, Research Division - VP
   *  Jennifer Fritzsche
      Wells Fargo Securities, LLC, Research Division - MD & Senior Analyst

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Presentation
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Operator   [1]
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 Ladies and gentlemen, thank you for standing by. And welcome to the Consolidated Communications Holdings, Inc. Fourth Quarter 2019 Results Conference Call. (Operator Instructions) Please be advised that today's conference is being recorded. (Operator Instructions)

 I would now like to turn the conference over to your speaker today, Jennifer Spaude. Please go ahead.

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 Jennifer M. Spaude,  Consolidated Communications Holdings, Inc. - VP of Corporate Communications & IR   [2]
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 Thank you. And good morning, everyone. I would like to welcome you to Consolidated Communications' Fourth Quarter 2019 Earnings Call. With me today are Bob Udell, our President and Chief Executive Officer; and Steve Childers, our Chief Financial Officer. Bob's comments today will highlight our strategic initiatives and our operational results. Steve will provide details on our fourth quarter financial performance and 2020 guidance. Following their prepared remarks, we will open the call up for questions.

 Before we proceed, I will remind you, our earnings release, financial statements and, new this quarter, an earnings presentation are all posted on our Investor Relations section of our website at consolidated.com.

 Please review the safe harbor provisions on Slide 2 of the presentation. Today's discussion includes statements about expected future events and financial results that are forward-looking and subject to risks and uncertainties. A discussion of factors that may affect future results is contained in Consolidated's filings with the SEC.

 Today's discussion will also include certain non-GAAP financial measures. Our earnings release includes reconciliations of these measures to the nearest GAAP equivalent.

 I will now turn the call over to Bob Udell.

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 C. Robert Udell,  Consolidated Communications Holdings, Inc. - President, CEO & Director   [3]
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 Thank you, Jennifer. And good morning, everyone. 2019 marked a transformational period for Consolidated Communications. We grew broadband, data and transport revenue, improved cash flow, while we finished integration projects and transitioned back to our focus on continuous improvement of the business across all markets.

 Our strategic imperatives, which you can see on Slide 4 of our presentation are Consolidated's road map for success. First, we are committed to producing stable earnings and growing free cash flow. We delivered stable and consistent adjusted EBITDA and revenue in the fourth quarter. We are leveraging our fiber networks and demonstrated growth in broadband revenue and commercial, carrier data and transport revenue. This is further offsetting the managed declines in legacy services.

 We remain disciplined in optimizing cost as well as prioritizing every dollar we invest with a focus on the highest-return projects and, ultimately, growing free cash flow.

 Our second strategic imperative is leveraging our fiber assets across 3 customer groups: carrier, commercial and consumer. We are investing in and edging out our fiber network, and have built nearly 600 fiber-route miles in last year. As a top 10 provider -- fiber provider in the U.S., we're delivering competitive broadband solutions to rural America, lighting buildings, offices and homes across 23 states.

 Stable earnings and cash flow, combined with leveraging our fiber assets lead to our third strategic imperative and that's executing on our capital allocation plan, which we announced last year. I'm pleased to report, we are delivering on this plan and did exactly what we said we would do, pay down debt and strengthen the balance sheet. We retired over $27 million in senior unsecured notes during the fourth quarter and $55 million since announcing our capital allocation plan in April. Essentially, we've taken our entire dividend savings to pay down debt and lower our leverage ratio.

 Our final strategic imperative is reviewing our portfolio of assets for investment or monetization to ensure all assets have a long-term strategic fit. The sale of our polls in Vermont last year is a small example of a nonstrategic asset divestiture, which generated $13 million in cash proceeds.

 Our plan and priorities are clear for our entire team. We remain laser-focused on our strategic initiatives and believe that continued execution on our plan will differentiate us within our peer group and within the communities we serve.

 Now I'll update you on some of the highlights and the progress we have made within our operations. We grew commercial and carrier data and transport revenue 2% in the fourth quarter. While I am pleased with this growth, our target is higher in 2020. Our sales teams are aligned and energized, and our marketing strategy is refined and we've added to our sales channels.

 Our carrier sales team is doing an excellent job of negotiating long-term contracts that continue to drive gig Ethernet sales and offset TDM services. 2019 was a record year with more than 700 wireless facility upgrades.

 Total tower connections under contract increased by 4.5% year-over-year, reaching approximately 3,900 total tower connections. We continue to collaborate with wireless carriers to optimize their capacity needs and provide transport solutions that offer diversity and maximize utilization for peak performance. We are building out capacity within our carrier-grade fiber network to support wireless densification, especially in rural areas. We are well positioned to be the backhaul provider of choice with high reliability and excellent back-office and an experienced team.

 Our network investments made for carrier services are also benefiting our commercial customers. We connected 1,800 new buildings onto our network in 2019, an increase of 18%. Approximately 90% of new sales generated in 2019 were on-net, which correlates to higher margins, increased opportunity to add products and a greater ability to ensure the best customer experience.

 In 2019, consistent with our commercial product road map, we launched a new virtual intelligent agent solution, we enhanced our cloud-secured solutions and launched Microsoft productivity suite. We build and partner to deliver highly competitive solutions for businesses to stay connected, be productive wherever they are and whatever device they may choose to use.

 Our 2020 commercial product road map is focused on enhancing our cloud and security services as well as launching new premium data services, including secure broadband.

 We're launching a new channel partner program next month called PartnerONE, which offers new incentives and benefits for our agent partners to do business with Consolidated. PartnerONE features a new full-service portal, a performance-based recognition program and other benefits, including new marketing tools. This is redefining our channel program, and it gives us the opportunity to reinforce our commitment to existing partners and drive greater awareness of our brand amongst potential new partners.

 Now turning to our consumer channel. Our focus is to lead with broadband and grow ARPU through speed upgrades. In the last 2 years, we have increased speeds to more than 750,000 homes, primarily in Northern New England. These upgrades were only incremental investments made possible because of our robust fiber network and its close proximity to end users.

 Virtually, 100% of our consumer customer base is connected to the network through either fiber-to-the-node or fiber-to-the-home. We have the flexibility to connect directly to the fiber network or use lower cost alternatives to deliver speeds determined by the local competitive environment. Our core fiber network allows us to maximize our network delivery in order to grow broadband revenue in most -- in the most cost-effective manner.

 Consumer broadband revenue grew 1.4% in fourth quarter, despite the fourth quarter being our high watermark typically for seasonality. This is our third consecutive quarter of broadband revenue growth. And our success with public-private partnerships continue.

 In the fourth quarter, we completed the fiber overbuild in Chesterfield, New Hampshire. In the 3 months since completion, we have been activating customers and have seen the average speed grow by more than 4x, with approximately 1/3 of the orders being first-time customers. We have 5 more fiber overbuild projects similar to Chesterfield targeted for the second half of 2020.

 Our fiber-rich network positions us well to partner with communities to deploy last-mile fiber in rural areas that would otherwise be difficult to justify financially. Through a combination of efforts, including public-private partnerships, innovative fixed wireless and new technologies, we continue to improve our consumer broadband business.

 Also in the fourth quarter, we completed the launch of our streaming video service branded CCiTV across Northern New England. While it is early in the launch, we are finding that nearly half of all CCiTV orders come from customers also activating a new broadband connection with us, and approximately 1/4 of them with broadband service are upgrading their speeds. We have made measurable progress in our consumer markets, delivering faster speeds and providing a quality experience, which establishes the groundwork for products like CCiTV. The cumulative effect of this strategy is a platform that gives us the ability to more effectively complete -- compete on a lower capital intensity, ultimately driving higher revenues with lower churn.

 I will now turn the call over to Steve, who will provide details on our financial results for the fourth quarter as well as an outlook for 2020. Steve?

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 Steven L. Childers,  Consolidated Communications Holdings, Inc. - CFO, CAO & Assistant Secretary   [4]
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 Thanks, Bob. Good morning, everyone. Slide 5 summarizes the company's fourth quarter and full year results. I am pleased to report that we achieved our 2019 guidance for adjusted EBITDA, as we produced another solid quarter of financial results and demonstrated progress on our capital allocation plan.

 Operating revenue for the fourth quarter totaled $331 million and generated adjusted EBITDA of $130.9 million. EBITDA margins remained strong at 39.5% for the quarter and 39.2% for 2019.

 Now let's discuss each of our customer channels. Turning to commercial and carrier. Revenue totaled $148.9 million in the fourth quarter. Data and transport grew 2% and totaled approximately $90 million in the quarter. Voice services revenue declined $2.8 million, while other revenue declined 3.9%, primarily due to the timing of equipment sales, which on average have margins of approximately 10% or 15%.

 Within our consumer channel, revenue was down $4.3 million or 3.2% year-over-year. Consumer broadband revenue grew 1.4% in the fourth quarter, and this is our third consecutive quarter of broadband growth.

 Consumer ARPU increased 4% or just over $3 per unit. We continue to realize positive momentum by leading with broadband, specifically in our newly upgraded areas. Consumer voice revenue was down 7% or $3.4 million for the recent quarter. However, our voice services revenue decline was nearly cut in half from a year ago. We attribute this to a more robust broadband offering, which contributes to a more positive voice revenue trend.

 Video, consistent with our strategy to transition from low margin, linear video to broadband streaming services declined $1.8 million, which was entirely offset by reductions in video programming expense.

 Network access declined $4.3 million. Subsidy revenues remained in our expected $18 million run rate following the last transitional step down for CAF II that occurred in August 2018. With respect to subsidies, the FCC released the final order for the Rural Digital Opportunity Fund on February 7. In our view, the final order improved substantially with some of the enhancements. For example, bringing certainty on transition revenue and new service tiers and auction ratings that we believe will be advantageous for fiber infrastructure providers. We remain optimistic about the opportunity to expand broadband capabilities in rural markets with the support of RDOF. We will evaluate the economic opportunities within our service area and will be aggressive as we look to enable access to underserved areas.

 Now turning to operating expenses. Exclusive of depreciation and amortization, operating expenses totaled $212.7 million, an improvement of 10.4% or $24.6 million from the prior year. We continue to identify and implement initiatives to transform the business and optimize free cash flow. Our track record speaks for itself in this area as we have been and will continue to be very focused on improving cost structure as our revenue mix changes.

 Cost of service and products declined $18.5 million, driven by network cost optimization and lower salaries and benefits associated from the ongoing cost savings initiatives.

 SG&A costs were reduced $6 million in the recent quarter, primarily due to operational synergies and ongoing efficiencies.

 Net interest expense for the quarter was $33.4 million, down 2.1% from the same period last year. Our weighted average cost of debt was approximately 5.6% as of December 31.

 Cash distributions from the company's wireless partnerships were $7 million in the fourth quarter compared to $10.3 million a year ago due primarily to accelerated partnership capital expenditures in the fourth quarter.

 For the year, wireless cash distributions totaled $35.8 million compared to $39.1 million in 2018. For 2020, we expect distributions will be in line with our past run rate in the range of $37 million to $39 million.

 Adjusted net income per share was $0.01 compared to a net loss of $0.09 per share a year ago. The improvement reflects the consistency of our operating results and a decline in depreciation expense.

 We invested $47.9 million in capital expenditures during the quarter, which supported success-based projects and broadband network infrastructure expansion. For the full year 2019, CapEx totaled $232.2 million and included $15.7 million in nonrecurring costs for hurricane restoration and integration projects.

 Total liquidity, including cash on hand and availability under our revolver was approximately $82 million. We retired over $27 million in senior unsecured notes at par value in the recent quarter. When we announced a change in the capital allocation policy last April, we committed to repurposing the dividend savings from the last half of 2019 to pay down debt. We actually retired $55 million in our senior unsecured notes at par value in 2019.

 In 2020, we will further commit to using substantially all free cash flow to pay down debt. We will continue to prioritize being opportunistic with open market purchases of our bonds. Our net leverage ratio was 4.33x at the end of the fourth quarter. Our consistently strong operational execution coupled with our capital allocation strategy and focus on improving the balance sheet will enable us to achieve our total net leverage target of 4x by the end of 2020 and position us for refinancing no later than mid-2021.

 Now I'll review our 2020 guidance, as outlined in our earnings release and on Slide 12. We expect adjusted EBITDA to be flat to 2019 results and be in the range of $520 million to $525 million. Cash interest expense will be in the range of $125 million to $130 million. Cash taxes are expected to be $1 million to $3 million. Capital expenditures are targeted to be in the range of $195 million to $205 million. And as part of our capital allocation policy, we are enhancing our outlook metrics by providing guidance for free cash flow, which we expect to be in the range of $145 million to $155 million for 2020.

 I'll now turn the call back over to Bob for closing remarks.

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 C. Robert Udell,  Consolidated Communications Holdings, Inc. - President, CEO & Director   [5]
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 Thank you, Steve. I am pleased with our progress in producing stable and consistent EBITDA and revenue, while reducing operating expenses and while executing on our capital allocation plan. We are diligently focused on strengthening our balance sheet. We continue to build out fiber assets, and while our sector is undergoing continued transformation. Consolidated remains a growing top 10 fiber provider in the United States, delivering on our promise of providing competitive broadband solutions to rural America.

 We're excited about the strong momentum and position we have going into 2020. Our path forward is about building long-term sustainability and value for our investors, our customers and our employees.

 I will now turn the call over to the operator for our first question.

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Questions and Answers
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Operator   [1]
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 (Operator Instructions) Your first question comes from the line of Jennifer Fritzsche of Wells Fargo.

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 Jennifer Fritzsche,  Wells Fargo Securities, LLC, Research Division - MD & Senior Analyst   [2]
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 Congrats you guys for this great quarter. The area you can't control on the Verizon dividend was a little bit lower than what we were looking for, which I guess makes your results even more impressive. But what are you seeing there? I know we all know Verizon is undergoing a fairly large fiber initiative. Is that hitting some CapEx there? And then I will have a follow-up.

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 Steven L. Childers,  Consolidated Communications Holdings, Inc. - CFO, CAO & Assistant Secretary   [3]
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 Jennifer, this is Steve. Thank you for your question and your comment about the quarter. I'll take the first part and Bob might want to add on to it. But with respect to distributions in Q4, they were a little bit lighter than what we expected at the $7 million. There were -- there was some accelerated CapEx coming in to the Q4 distributions for us. They -- over the course of the year, Verizon also -- Verizon wireless also implemented the new lease accounting rules that's had a sort of a onetime effect on full year distributions. But for fourth quarter, it was primarily the timing of CapEx. And we have some visibility to Q1 distribution. So we are back on track for what you might expect and what we expect.

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 Jennifer Fritzsche,  Wells Fargo Securities, LLC, Research Division - MD & Senior Analyst   [4]
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 Got it. Okay. And then if I could, just -- you had talked about selling some assets in the past that might not be core to your fiber strategy. Is that still -- I'm sorry, you mentioned as continued focus. I mean just came back from Metro Connect last week, where it seems like there's a lot of fiber buying, including non-fiber RLEC assets, a lot of interest given the right away. And I was just wondering if you're being opportunistic in those negotiations or discussions.

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 C. Robert Udell,  Consolidated Communications Holdings, Inc. - President, CEO & Director   [5]
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 Yes. Those -- Jennifer, it's Bob. And those discussions take -- have a long lead time associated with them. So in our prepared remarks, and I'll reinforce it here, we're looking at ways to optimize our assets, including divestiture, where it makes sense or certainly assessing for continued investment. We have assets we feel really good about. We've been intentional about the things we've acquired, but where there is interest, we're entertaining that. And we'll continue to explore the best options to maximize value for shareholders, and that includes considering divestitures and entertaining those discussions.

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Operator   [6]
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 Your next question comes from the line of Greg Williams of Cowen.

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 Gregory Bradford Williams,  Cowen and Company, LLC, Research Division - VP   [7]
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 Great. And again, congrats on the quarter. So I just wanted to talk about, Bob, you mentioned how in consumer, you're leading with broadband and then growing ARPU in turn. And as I look at the model, you did lose an outsized level of customer or consumer connections, yet your ARPU growth was at near-record high. So as I take your scripted remarks and I look at model, is that the new sort of cadence we should look at as maybe outsized losses on the customer level, but these are ARPU gains as they take -- speed uptake and they take your new video product? And then I have a follow-up.

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 C. Robert Udell,  Consolidated Communications Holdings, Inc. - President, CEO & Director   [8]
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 Yes. Thanks, Greg, for the question. And what you're seeing is in the competitive areas, we're continuing to upgrade speed aggressively. And so yes, you're seeing the 2 tier speed upgrades on the average bring us ARPU lift. And that's outweighing some of the lower speed, less competitive areas where we might be losing some customer base. But it's really predominantly weighted by the place we're doing upgrades and the increase in share we're seeing there.

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 Gregory Bradford Williams,  Cowen and Company, LLC, Research Division - VP   [9]
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 Got it. And then second question is on EBITDA and maybe at the risk of thinking about longer-term EBITDA, obviously, very solid guidance. And if I recall, you guys had, I think, 12 projects that you were working on in the fourth quarter. You closed 6 of them, and I think 6 more cost efficiency projects you're closing in the first quarter. I imagine that had a lot to do with the solid EBITDA guidance. And I was just hoping you can talk about the trajectory of the savings and when they come through each quarter in the year. And more importantly, can you sort of identify these projects, specifically like what are they? Because we're trying to understand how many more projects would you have in the pipeline as we think about EBITDA sustainability beyond 2020. Is there more efficiencies and transformations to be realized as we think about the outer years with that revenue mix pressure?

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 C. Robert Udell,  Consolidated Communications Holdings, Inc. - President, CEO & Director   [10]
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 Yes, there really are. And this is a benefit of transitioning from integration to our normal cadence of continuous improvement. The scale that's been provided by the acquisitions we've done has allowed us to do platform upgrades that you otherwise wouldn't necessarily be able to justify and that is giving us significant automation opportunities and the ability to refine the business process. And I'm not going to go through every project because some are in different stages of implementation. But that's the benefit. For example, the platform that we've deployed in the last year that gives us automation capability started with automating the most frequent transaction in the consumer side. And that's helped us in the quality of service improvements. It's helped us get better information to the field test for deployment and the installations. And we're now spreading that into the commercial process development activity and installation activity and shortening sold-to-build time lines as a result. And we're driving that through the entire business. So there is now a list of 26 projects and we roll some off. We add some on and we have our ops executive, [Dave] Wagner lead that cost reduction discussion with support from our CTO and CIO, and they're very closely aligned. So that each time a new project comes up, Steve and I do a cost-benefit analysis with the team and it's a very disciplined approach. So it's really a function of turning that integration focus to refining the business as usual and getting all the focus on getting deeper penetrations across the 3 customer groups for which we're leveraging common fiber assets. So yes, those projects continue, Greg, and they continue to roll out and deliver and that's why we have the confidence to give the guidance on EBITDA and cash flow that we're giving.

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 Gregory Bradford Williams,  Cowen and Company, LLC, Research Division - VP   [11]
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 And just the trajectory of the quarter-by-quarter, as I think about those savings coming through?

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 C. Robert Udell,  Consolidated Communications Holdings, Inc. - President, CEO & Director   [12]
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 We're being very careful to -- I guess careful is probably the right word -- deliberate in making sure that we see delivery of those things to feed our budget. And so there's a little more of that, that bleeds out in second, third and fourth quarter, just by nature of kicking off things as we end the year. But it is a setup then for 2021, and we're always putting new projects in queue or looking for how do we match the cost model with where we see the revenue trajectory.

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Operator   [13]
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 (Operator Instructions) Your question comes from the line of Davis Hebert of Wells Fargo.

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 Davis Hebert,  Wells Fargo Securities, LLC, Research Division - Director and Senior High Yield Analyst   [14]
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 Nice to see the guidance, that's impressive. And I think you've already touched on some of the moving parts there. Can you share with us anything on the KPI side, like broadband subscriber growth, offsetting pressure in voice and video? How you're thinking about some of those metrics, when you're looking at your 2020 guidance?

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 C. Robert Udell,  Consolidated Communications Holdings, Inc. - President, CEO & Director   [15]
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 I think the way to think about it right now is the -- and we need to probably do some work on the metrics and helping you with that. But the ARPU and the trajectory on data and voice are going to be impacted by the speed upgrades and the reduced churn that's associated with those. I mean we're seeing a churn -- despite some of the data, low-speed losses, we're seeing great progress on churn on both voice and data. And so there's a significant improvement, as Steve mentioned, in Q4, reflection of significant improvement in consumer voice as a result of retention on the broadband side. And so that's helpful. And I think you'll see that in the ARPU numbers as well as in the revenue line on voice.

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 Davis Hebert,  Wells Fargo Securities, LLC, Research Division - Director and Senior High Yield Analyst   [16]
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 Okay, that's helpful. And given the recent Cincinnati Bell announced transaction, I guess that's still in flux. But how do you think about -- I mean, I guess, that turned a lot of heads when people are thinking about fiber, and you've mentioned fiber a lot on this call. Do you have any footprints that you would say would be similar to Cincinnati Bell and their fiber-to-the-home and fiber-to-the-prem build-out?

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 C. Robert Udell,  Consolidated Communications Holdings, Inc. - President, CEO & Director   [17]
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 Yes. I think the way to think about our business is we're fortunate that we've either, like in Texas, California, Pennsylvania, we have been deploying fiber, Illinois for that matter, we've been deploying fiber for years. And in some of the areas where we bought or acquired assets with deep fiber, even though it may not have had the on-ramps and off-ramps like Northern New England, we're quickly accelerating those connections. And so we have pockets of what might look like Cincinnati in 5 different regions, and that serves us very well. And yet it gives us diversity of having different regions in the economic environments in those regions that allow us to pull multiple levers, think of 5 regions and 3 customer groups, that's 15 levers we can pull to balance the cash flow and the delivery on our commitments throughout the year. So if you look at the upgrades we've done, it's 750,000 in the last 18 months to 2 years, and that's allowed us to increase our competitive speeds in the most densely populated areas. And since 2006, in California and Texas, we've been deploying only fiber. So it puts us in an excellent position. And those would be very similar to what you see in the concentrated investment that Cincinnati Bell made in Cincinnati.

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 Davis Hebert,  Wells Fargo Securities, LLC, Research Division - Director and Senior High Yield Analyst   [18]
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 Okay, excellent. That's a good color. And I've got 2 for Steve. You mentioned continuing to repurchase senior notes in the open market as a possibility. But has anything changed with how you're thinking about a more comprehensive refinancing extension of your maturities? Or do you want to wait to see how this asset portfolio review plays out?

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 Steven L. Childers,  Consolidated Communications Holdings, Inc. - CFO, CAO & Assistant Secretary   [19]
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 Well, Davis, thanks for the question. We -- so we're looking at all things relative to capital structure, right? I mean in the deck on Page 8, we have our maturity towers and stacks. And I guess the way we think about it for the short term is we have -- number one, we're focused on execution of the business to make sure that we are going to deliver that $520 million to $525 million to be able to invest the $145 million to $155 million in debt pay down. And as I said, we would prioritize the open market repurchase of bonds, particularly through trading at a discount. It's been nice to see them trade up here lately. So we do have the revolver that we need to deal with this year. We are -- we've already kicked off conversations with our relationship banks, optimistic about being able to get that done. And in the meantime, we were going to continue to prioritize paying down the senior notes or getting to 0 on our revolver, whichever kind of comes first.

 But to your question, we're closely following market conditions, we're closely following what's going on with the peer group. You mentioned Cincinnati Bell, while some of the other guys that might be going through some restructuring. So we are looking at everything, and if we could do a holistic refinancing, we would do that. But again, we're set up where we're taking the revolver this year. We're focused on doing the senior notes by mid-2021. At that time, we would consider doing something holistic, but we'll do this -- we would move as soon as market conditions based on our results would allow us to move.

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 Davis Hebert,  Wells Fargo Securities, LLC, Research Division - Director and Senior High Yield Analyst   [20]
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 Okay. That's very helpful. And then just last one for me. On pension contributions, how are you thinking about that for 2020? And is that included in your free cash flow guide?

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 Steven L. Childers,  Consolidated Communications Holdings, Inc. - CFO, CAO & Assistant Secretary   [21]
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 Yes, it is. We also have a free cash flow reconciliation in the tab. And I think we have a 30 for this year. We have a 36 number. I think you can think about it as a 34 to 35 number for 2020.

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Operator   [22]
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 (Operator Instructions) There are no further questions over the phone lines. I turn the call back over to the presenters.

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 C. Robert Udell,  Consolidated Communications Holdings, Inc. - President, CEO & Director   [23]
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 Well, thank you. And thank you all for joining the call today. We appreciate your continued interest in Consolidated Communications and look forward to updating you on next quarter. Have a great day.

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Operator   [24]
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 This concludes today's conference call, you may now disconnect.




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