Q3 2023 American Tower Corp Earnings Call

In the prepared remarks, we'll open the call for questions if you'd like to ask a question press. One then zero now I would now like to turn the call over to your host Adam Smith Senior Vice President of Investor Relations. Please go ahead, Sir good morning, and thank you for joining American Tower's third quarter 2023 earnings conference call.

We have posted a presentation, which we'll refer to throughout our prepared remarks under the Investor Relations tab of our website Www Dot American tower Dot com.

On this morning's call Tom Bartlett, our president and CEO will discuss current technology trends and how our distributor portfolio of assets is positioned to benefit from ongoing wireless technology evolution.

And then Rod Smith, our executive Vice President CFO, and Treasurer will discuss our Q3 2023 results and revised full year outlook.

We are also joined on the call today by Steve Andre Our current executive Vice President and President of our U S Tower Division, who as announced this morning will assume the role of global Chief Operating Officer effective November one.

Or assuming the role of President and Chief Executive Officer on February one 2024.

After these comments, we will open up the call for your questions.

Before we begin I'll remind you that our comments will contain forward looking statements that involve a number of risks and uncertainties.

Examples of these statements include our expectations regarding future growth, including our 2023 outlook capital allocation and future operating performance.

Our collections expectations associated with Vodafone idea in India.

And any other statements regarding matters that are not historical facts.

You should be aware that certain factors may affect us in the future and could cause actual results to differ materially from those expressed in these forward looking statements.

Such factors include the risk factors set forth in this morning's earnings press release.

Those set forth in our Form 10-K for the year ended December 31 2022.

As updated in our Form 10-Q for the six months ended June 30th 2023, and in other filings, we make with the SEC.

We urge you to consider these factors and remind you that we undertake no obligation to update the information contained in this call to reflect subsequent events or circumstances.

With that I'll turn the call over to Tom.

Thanks, Adam and good morning, everyone.

My focus for today's call will be on the technology trends and network investments that drive demand for our leading tower in datacenter platforms as well as the developments, we're seeing at the edge, where my comments will largely be focused on the five G evolution and the progress we're seeing in the United States. We believe similar trends will prevail across our international.

National footprint as they have historically.

Beginning with our macro tower business, the fundamental factor that drives demand for our global tower portfolio growth in mobile data consumption continues unabated. This is true both in the United States and across the Globe, where mobile network data traffic has almost doubled over the last two years alone to a staggering 102.

<unk> six extra bytes per month looking out over the next five years forecasted growth in data traffic per device remains compelling as more spectrum for <unk> networks will be deployed at scale.

Average monthly data usage per smartphone across our key developed markets like the U S, Germany, and Spain is expected to grow at a healthy compounded annual rate of 18% between 2023 and 2028.

Note that these estimates have been somewhat conservative historically.

So let's spend a moment on where we are in the <unk> investment cycle in the U S and where we believe we're going over the next several years just as we saw with the three G and <unk> Rollouts, we expect five G investment cycle to play out in three phases. They represent discrete business cases for the carriers and these three.

Phases will drive to peak periods of spend that are bridged by a temporary phase of more moderate activity.

The first phases coverage, driven and aimed at upgrading existing infrastructure with new spectrum bands and a radio technology is competition to provide broad nationwide coverage with the new G ramps up.

At the same time carriers are looking to realize the efficiency benefits of their investments in new software hardware and upgraded user devices initial equipment upgrades and new spectrum deployment quickly deliver reduce cost per gigabyte, resulting in the ability to maintain margin profiles absent this migration.

Any incremental investments in the prior generation would be expected to result in significantly diminished returns as the additional densification required to sustain increasing network traffic and existing spectrum bands would be cost prohibitive.

As the cadence of initial coverage investments begin to moderate from a record spend of over $40 billion in 2020 to the first peak of the <unk> cycle, we retain a high degree of conviction that there is a long tail of network investment to come.

This belief is predicated on several factors, including our experience with past investment cycles industry forecast for growth in mobile data consumption that apply a necessity for significant incremental coverage and capacity and the visibility into network needs, we get through our contract structures.

Today phase one of the <unk> rollout is winding down and we're heading into a second phase we expect phase two to be characterized by carriers beginning to harvest the network efficiency benefits of their initial investments while moderating spend from the record levels in 2022 to roughly 35.

$5 billion in 2023, which is 5 billion in excess of four G averages representing the second highest level of annual spend on record.

And this next phase we will begin to see a sleeping in a five <unk> technology across the wireless and enterprise landscape.

For example, <unk> smartphone penetration has now surpassed the 50% Mark in North America, which will ultimately allow for the majority of network traffic to shift over to five G networks, which we would expect to occur in the 2025 time frame. We're also looking forward to the emergence of more ubiquitous.

<unk> ability of Standalone five G core networks, which will unlock improved five G network quality higher speeds and lower latency and provide a platform for the development of innovative services and consumer applications.

Finally, we anticipate that the arrival of end to end <unk> capabilities will facilitate additional monetization opportunities at the enterprise level, who use cases like private networks network slicing and other Iot services that are beginning to emerge today.

Ultimately these dynamics will culminate in a third capacity focused phase aimed at significant densification of <unk> networks. We continue to believe that <unk> will advance and enable the next generation of mass market consumer use cases, particularly ones three GPP released <unk>.

<unk> and <unk> are in the market coupled with five G cores that provide the true benefits of the end to end technology upgrade at scale.

That said meeting industry forecasts for growth in mobile data consumption that will drive the need for substantial network capacity investments seems highly achievable when taking into account the technology, we have at our fingertips today.

In fact industry estimates already show that <unk> subscribers are consuming two to three times more mobile data than the average <unk> subscriber.

So let's take the case of mobile video consumption, which has consistently shown to be a dominant use case across subscriber usage types.

As you can see on slide six today, the average smartphone subscriber in North America utilizes roughly 21 gigabytes of mobile data per month and this is expected to grow to about 48 gigabytes by 2028.

Of the 21 gigabytes consumed today, the majority or approximately 19 gigabytes are attributed to video streaming which corresponds to a little over an hour of BLE video usage and $3 60, and 480 pixel videos currently make up around half of that time.

So by simply assuming a modest level of incremental usage towards higher resolution streaming such as eight minutes of <unk> Ultra HD, we'd see video consumption alone drive usage to the forecasted 48 gigabytes per month.

Or approximately two three times the current rate.

Furthermore, the data already shows that <unk> is driving increased usage of higher resolution video formats. A recent report from Ericsson founded since 2021 <unk> users report a nearly 50% increase in time spent on enhanced video formats for.

For example, among that user base usage of new video formats like 360 degree videos and multi view streaming have increased by an average of 10 minutes 15 minutes per day, respectively. While time spent streaming videos and standard resolution has decreased by 23 minutes over the same.

<unk>.

In short we've already seen five G adoption linked with a shift in behavior towards using more data intensive applications. A trend we firmly believe will continue going forward.

And while we remain confident that new low latency high bandwidth consumer applications will be born as <unk> Standalone networks are deployed at scale, we see a highly tangible case for densification requirements from where we stand today.

With that I'll briefly provide an update on core site and our data center segment before shifting to the progress we're making at the edge.

The case remains the demand in core sites interconnection centric business is exceeding our initial expectations. Our teams delivered record signed new business in 2022, a record we are targeting to exceed in 2023. We've also seen consistent elevated growth in interconnection revenue mark to market.

Pricing increases that exceed our historical averages low churn and ongoing performance that we believe positions us to deliver compelling results in this segment for many years to come.

And much like we see in our tower business, the secular trends that underpin the business model like the migration of workloads from on Prem to hybrid multi cloud environments and the emergence of AI use cases that will drive more demand in our ecosystem continue on a path toward long term acceleration.

For example findings from our recent 2023 state of the datacenter report showed that 94% of it leaders noted that native direct connection between Colocation data centers major cloud providers, which core site provides is essential for improved performance enhanced security cost.

<unk> and hybrid cloud connectivity.

Further 92% of it leaders are considering moving critical workloads from public cloud co location to accelerate revenue growth and support the increasing need for AI and machine learning applications.

In this context, we continue to upgrade our offerings and capabilities within the business to support emerging use cases for.

For example earlier this month, we launched new capabilities on our Ocs, our pioneering software defined networking platform, enabling clients to rapidly create higher bandwidth virtual connections to Google cloud and AWS direct connect and between core site data centers, including 50 gigabit services.

These upgrades reduce the time required for organizations to augment network capacity to support high bandwidth low latency hybrid applications like AI machine learning and digital media production.

When it comes to current and future AI and machine learning applications core sites flexible purpose built design data centers position us to host power intensive GPU services being used for AI and ml use cases.

For example, we're already providing GPU capacity for applications like <unk> visualization, and rendering and for software development within niche cloud environments and for the dentist AI applications are purpose built facilities are designed to accommodate liquid cooling with modest development efforts when required.

As we've stated previously in the near term we continue to believe the majority of today's generative AI workloads will provide hyperscale opportunities that don't meet our investment criteria or fit within the core side ecosystem. However.

However, as Jan AI evolves, we would expect the balance of workloads to shift from large language model development intensive training in public prompts to specialized inference based use cases as productivity gains from the deployment of custom models accelerates.

At this stage when low latency interconnection high power density and distributed high performance compute become the priorities, we believe core site and ultimately our distributor portfolio of franchise real estate assets across the U S are going to be optimally positioned to benefit.

On that note, we've continued to see progress towards the realization of demand cases that support our initial edge thesis and we believe we have an opportunity to enable a more efficient exchange of network traffic and support cloud services and peering and a more distributed manner as.

As a result, we've been working both internally and with external stakeholders to develop an edge model, we can execute on as compelling opportunities present themselves.

And our initial assumption that through core site, our seat at the table and visibility into the customer demand environment would be materially enhanced is holding true we're increasingly seeing interest from potential customers looking to extend technologies, such as private cloud computing AI and <unk> applications.

Closer to the end device through more distributed architecture.

This is resulting from several key demand cases, including availability of future power requirements business efficiency revenue generation opportunities and customer experience.

When it comes to power core side has secured significant future power availability and is insulated from expected shortages in markets like Northern Virginia. However.

However, power constraints in general are increasingly and focus in legacy data center markets. In this case, we believe our distributed land footprint in tier two and three markets with significant power availability and capability to connect back to core side campuses can serve more distributed power capacity needs.

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While enabling customers to enjoy the interconnection benefits of the core site ecosystem.

And as potential customers increasingly focus on new revenue opportunities and customer experience, including through the proliferation of applications like next generation gaming.

In devices and Wearables that leverage interactive AI. We believe we have a compelling combination of distributed points of presence and interconnection capabilities that can be extended to a broader edge.

In addition by prioritizing our existing owned real estate, which in many cases is already designated for uses digital infrastructure, we see an opportunity to drive a significant time to market advantage and reduce overall development costs, which could be compelling to customers and enhance returns on investment.

Unknown Executive: Following the prepared remarks we will open the call for questions. If you'd like to ask a question, press 1, then 0 now.

Adam Smith: I would now like to turn the call over to your host, Adam Smith, Senior Vice President of Investor Relations. Please go ahead, sir. Good morning.

As a result of these factors we continue to work towards establishing a repeatable rapidly deployable design with initial capacity and the one megawatt range, which could then be scalable to incremental megawatts with interconnection to multi site campuses as demand dictates.

As always we will assess potential growth at the edge through the prism of our disciplined capital allocation framework.

<unk> capital only if the opportunity meets our investment criteria and aligns with our long term strategic vision of growing our interconnection ecosystem in a way that maximizes shareholder value.

In closing the bottom line is that we remain at the relatively early stages of a five G and network technology evolution that we believe will necessitate continuous incremental investment in existing infrastructure like towers data centers and distributed edge infrastructure.

Adam Smith: Thank you for joining American Tower's third quarter, 2023 Earnings Conference Call. We have posted a presentation which we will refer to throughout our prepared remarks under the Investor Relations tab of our website, www.americantower.com. On this morning's call, Tom Bartlett, our President and CEO will discuss current technology trends and how our distributed portfolio of assets is positioned to benefit from ongoing wireless technology evolution. And then Rod Smith, our Executive Vice President, CFO and Treasurer, will discuss our Q3 2023 results and revised for your outlook. We are also joined on the call today by Steve Vondran, our current Executive Vice President and President of our U.S. Tower Division.

Adam Smith: Who, as announced this morning, will assume the role of Global Chief Operating Officer, Effective November 1st, before assuming the role of our President and Chief Executive Officer on February 1st, 2024.

Adam Smith: After these comments, we will open up the call for your questions. Before we begin, I remind you that our comments will contain four looking statements that involve a number of risks and uncertainties. Examples of these statements include our expectations regarding future growth, including our 2023 outlook. Capital allocation and future operating performance. Our collections expectations associated with voter phone idea in India and any other statements regarding matters that are not historical facts.

Adam Smith: You should be aware that certain factors may affect us in the future and could cause actual results to differ materially from those expressed in these forward-looking statements. Such factors include the risk factors set forth in this morning's earnings press release. Those set forth and are formed 10K for the year-end of December 31st, 2022, as updated and are formed 10K for the six months-vended June 30th, 2023, and in other filings we make with the SEC. We urge you to consider these factors and remind you that we undertake no obligation to update the information contained in this call to reflect subsequent events or circumstances.

We also believe that ongoing technology developments will unlock new capabilities that will drive the next wave of innovative and data intensive consumer and enterprise devices and applications and American tower with its leading tower portfolio and real estate footprint combined with our highly interconnected dataset.

Adam Smith: With that, I'll turn the call over to Tom. Thanks, Adam.

Thomas Bartlett: Good morning, everyone. My focus for today's call will be on the technology trends and network investments that drive demand for our leading tower and data center platforms, as well as the developments we're seeing at the edge. My comments will largely be focused on the 5G evolution and the progress we're seeing in the United States. We believe similar trends will prevail across our international footprint as they have historically. Beginning with our macro tower business, the fundamental factor that drives demand for our global tower portfolio, growth in mobile data consumption continues unabated.

Our ecosystem is in a truly differentiated position to serve the network infrastructure needs of the future.

Before I hand, the call over to Rod I'd like to close my remarks by congratulating, Steve Andre who effective November one we'll hold the role of global Chief Operating Officer until February 1st of next year at which point he'll transition to the position of Chief Executive Officer, and Bud No two.

Thomas Bartlett: This is true both in the United States and across the globe, where mobile network data traffic is almost doubled over the last two years alone to a staggering 126 exabytes per month. Looking out over the next five years, forecasted growth in data traffic per device remains compelling as more spectrum for 5G networks will be deployed at scale. Average monthly data usage per smartphone across our key developed markets like the US, Germany and Spain is expected to grow at a healthy compounded annual rate of 18% between 2023 and 2028.

Who will become our new executive Vice President and President of our U S Tower Division.

The board and I have worked diligently on succession planning weighing the merits of an external search against the talent we have within our organization.

Steve joined American Tower in 2000, and currently serves as the executive Vice President of our U S and Canada business, including both towers and data centers.

Thomas Bartlett: And I would note that these estimates have been somewhat conservative historically. So let's spend a moment on where we are in the 5G investment cycle in the US and where we believe we're going over the next several years.

For the past 23 years, Steve has been instrumental to the growth and sustainability of earnings for American Tower and has built tremendous credibility with our global organization. His peers. The board of directors, The American tower Investor base and our customers.

Thomas Bartlett: Just as we saw with the 3G and 4G rollouts, we expect a 5G investment cycle to play out in three phases that represent discrete business cases for the carriers, and these three phases will drive two peak periods of spend that are bridged by a temporary phase of more moderate activity. The first phase is coverage-driven and aimed at upgrading existing infrastructure with new spectrum bands and radio technology. We had broad nationwide coverage with the new G ramps up.

All this to say Steve is a clear candidate to lead American tower and its next growth phase in over the next several months I will work closely with the executive leadership team and the board to ensure a seamless transition.

Lastly, I want to thank all of the incredible American tower employees around the world, both past and present, our customers and investors for their support and confidence you've demonstrated since I joined in 2009.

Thomas Bartlett: At the same time, carriers are looking to realize the efficiency benefits of their investments in new software, hardware, and upgraded user devices. Initial equipment upgrades and new spectrum deployment quickly deliver reduced cost per gigabyte, resulting in the ability to maintain margin profiles. Absent this migration, any incremental investments in the prior generation would be expected to result in significantly diminished returns, as the additional densification required to sustain increasing network traffic on existing spectrum bands would be cost prohibitive.

Although this is a difficult decision on my part I look forward to the time ahead with family friends and new challenges, while watching the company under Steve's leadership continue to succeed.

With that I'll turn the call over to Rod to review, our latest results and updated outlook Rod.

Thanks, Tom Good morning, and thank you for joining today's call in Q3, we continued our trend of strong performance driven by solid demand for our diverse global portfolio of assets.

Thomas Bartlett: At the cadence of initial coverage investments begins to moderate from record spend of over $40 billion in 2022, the first peak of the 5G cycle, we retain a high degree of conviction that there's a long pale of network investment to come. This belief is predicated on several factors, including our experience with past investment cycles, industry forecasts for growth and mobile data consumption, that apply necessity for significant incremental coverage and capacity, and the visibility into network needs we get through our contract structures.

Against the challenging macroeconomic backdrop, we remain focused on delivering results and creating value by driving organic growth across our existing portfolio and demonstrating global operational efficiency and cost management in support of attractive margin expansion at the same time, we are committed to strengthening our balance sheet by enhancing our liquidity.

Quiddity, extending our maturities, reducing floating rate debt volatility and making progress towards our leverage target.

These efforts coupled with the evolving technological trend highlighted by Tom remain key drivers of our current performance and give us confidence in our ability to drive sustained growth over the long term before delving into the specifics of our Q3 results and raised outlook, let me touch on a few highlights from the quarter.

Thomas Bartlett: Today, phase 1 of the 5G rollout is winding down and we're heading into a second phase. We expect phase 2 to be characterized by carriers beginning to harvest the network efficiency benefits of their initial investments, while moderating spend from the record levels of 2022 to roughly 35 billion in 2023, which is 5 billion in excess of 4G averages, representing the second highest level of annual spend on record. In this next phase, we will begin to see a seeping in a 5G technology across the wireless and enterprise landscape.

First we saw a continuation of solid trends across our global operations driving consolidated property revenue growth of 7% consolidated organic tenant billings growth in our tower business exceeded 6% for the third consecutive quarter and was complemented by over 9% revenue growth in our data center business as a <unk>.

Result of this strong performance and visibility extending through the end of 2023, we raised our full year expectations across nearly all segments, which I'll discuss in more detail later.

Thomas Bartlett: For example, 5G smartphone penetration has now surpassed the 50% mark in North America, which will ultimately allow for the majority of network traffic to shift over to 5G networks, which we'd expect to occur in the 2025 timeframe. We're also looking forward to the emergence of more ubiquitous accessibility of standalone 5G core networks, which will unlock improved 5G network quality, higher speeds and lower latency, and provide a platform for the development of innovative services and consumer applications.

Next our keen focus on cost management resulted in conversion rates exceeding 100% and adjusted EBITA margin expansion of roughly 290 basis points year over year, it's still over 215 basis points when normalized for the prior year Vil revenue reserves.

Complementing our operational efforts on the balance sheet side, we raised one $5 billion in senior unsecured notes at a weighted average cost of approximately five 9% by utilizing the proceeds to pay down revolver balances, we've reduced our floating rate debt exposure to approximately $4 billion or less.

Thomas Bartlett: Finally, we anticipate that the arrival of end to end 5G capabilities will facilitate additional monetization opportunities at the enterprise level through use cases like private networks, networks slicing, and other IoT services that are beginning to emerge today. Ultimately, these dynamics will culminate in a third capacity-focused phase aimed at significant densification of 5G networks. We continue to believe that 5G will advance and enable the next generation of mass market consumer use cases, particularly once 3GPP released 17 and 18 are in the market, coupled with 5G cores that provide the true benefits of the end-to-end technology upgrade at scale.

And 11% of our total outstanding debt as of the end of the third quarter down from over 22% at the start of the year.

Finally, we're making significant progress on the strategic review of our India business.

As we are in the final stages of this process, we remain committed to communicating the outcome to our shareholders before the end of the year consistent with our past messaging in Q3, we recorded $322 million in goodwill impairment charges associated with R&D of business. This was prompted by indications of value obtained through the process.

Conducted over the past several months supported by our own interim goodwill impairment test. We believe this impairment accurately reflects the current market conditions evolving risk premiums associated with operating in the India market and more generally increases in the cost of capital.

Thomas Bartlett: That said, meeting industry forecasts for growth and mobile data consumption that will drive the need for substantial network capacity investments seems highly achievable when taking into account the technology we have at our fingertips today. In fact, industry estimates already show that 5G subscribers are consuming 2-3 times more mobile data than the average 4G subscriber.

With that please turn to slide eight and I'll review, our property revenue and organic tenant billings growth for the quarter.

As you can see consolidated property revenue growth was 7% or 8% on an FX neutral basis U S and Canada property revenue growth was over 5%, which includes a nearly 2% headwind associated with a reduction in straight line revenue offset by timing benefits associated with certain nonrecurring onetime.

Thomas Bartlett: So let's take the case of mobile video consumption, which has consistently shown to be a dominant use case across subscriber usage types. As you can see on slide 6, today the average smartphone subscriber in North America utilizes roughly 21 gigabytes of mobile data per month, and this is expected to grow to about 48 gigabytes by 2028. Of the 21 gigabytes consumed today, the majority or approximately 19 gigabytes are attributed to video streaming, which corresponds to a little over an hour of daily video usage, and 360 and 480 pixel videos currently make up around half of that time.

Thomas Bartlett: So by simply assuming a modest level of incremental usage towards higher resolution streaming, such as 8 minutes of 4K Ultra HD, we'd see video consumption alone drive usage to the forecasted 48 gigabytes per month, or approximately 2.3 times the current rate. Furthermore, the data already shows that 5G is driving increased usage of higher resolution video formats. A recent report from Erickson found that since 2021, 5G users report a nearly 50 percent increase in time spent on enhanced video formats.

Items in the quarter.

International growth was nearly 9% or approximately 11% excluding the impacts of currency fluctuations, which included a 4% benefit associated with the full collection of the IL billings in India in the quarter as compared to approximately $48 million revenue reserve in the prior year.

Finally, as I mentioned in my earlier remarks, our data center business revenue increased by over 9% and continues to demonstrate solid outperformance as compared to our initial underwriting plan.

As Tom mentioned earlier, we anticipate 2023 to again break defined new business record just set in 2020 to setting up a core site to drive sustained attractive levels of growth as the backlog of new business commences over the next several years.

Moving to the right side of the slide strong performance across each of our segments drove consolidated organic tenant billings growth of six 3%.

Within our U S and Canada segment organic tenant billings growth was five 3% and greater than six 5% absent sprint related churn, including another quarter of Colocation and amendment contributions of nearly $60 million. Our international segment saw outperformance across nearly all reported segments primarily.

Thomas Bartlett: For example, among that user base, usage of new video formats like 360 degree videos and multi-view streaming have increased by an average of 10 minutes and 15 minutes per day respectively, while time spent streaming videos and standard resolution has decreased by 23 minutes over the same period. In short, we've already seen 5G adoption linked with a shift in behavior toward using more data intensive applications. A trend we firmly believe will continue going forward.

Driven by higher new business in Africa, and churn delays in Latin America, and APAC, resulting in organic tenant billings growth of seven 9%.

Thomas Bartlett: And while we remain confident that new low latency high bandwidth consumer applications will be born as 5G standalone networks are deployed at scale, we see a highly tangible case for densification requirements from where we stand today.

Turning to slide nine adjusted EBITDA grew over 10% to $1 8 billion for the quarter or approximately 11% on an FX neutral basis as I highlighted in my opening remarks, adjusted EBITA margin expanded to 64, 4%, a 290 basis point improvement.

To the previous year, primarily driven by solid organic growth.

<unk> cost management throughout the business and the one time revenue items I mentioned in fact, despite the current inflationary environment. We have managed to maintain a relatively flat year over year cash SG&A profile remaining consistent with the themes from the first half of the year with cash SG&A as a percent of property.

Thomas Bartlett: With that, I'll briefly provide an update on core site and our data center segment before shifting to the progress we're making at the College. The case remains that demand and core sites interconnection centric business is exceeding our initial expectations. Our teams delivered records signed new business in 2022, a record we are targeting to exceed in 2023. We've also seen consistent elevated growth in interconnection revenue, market market pricing increases that exceed our historical averages, low churn, and ongoing performance that we believe positions us to deliver compelling results in the segment for many years to come.

Revenue standing at approximately six 5% for the quarter in nearly 70 basis point improvement versus Q3 of 2022.

Moving to the right side of the slide attributable F O and attributable <unk> per share each increased by over 9% driven by solid cash adjusted EBITDA growth, partially offset by an approximately 5% headwind from financing costs.

Thomas Bartlett: And much like we see in our tower business, the secular trends that underpin the business model, like the migration of workloads from on-prem to hybrid, multi-cloud environments, and the emergence of AI use cases that will drive more demand in our ecosystem, continue on a path toward long-term acceleration. For example, findings from our recent 2023 State of the Data Center report showed that 94% of IT leaders noted that native direct connection between co-location data centers, major cloud providers, which core site provides, is essential for improved performance, enhanced security, cost savings, and hybrid cloud connectivity.

Now shifting focus to our revised full year outlook I'll start by highlighting a few key items.

As a result of our strong performance in the third quarter and the momentum taking us through the end of the year. We've raised our guidance for property revenue adjusted EBITDA attributable <unk> and attributable <unk> per share.

Next our revised outlook includes a reduction in U S services, resulting in a $20 million decrease in gross margin compared to our previous expectations for the year.

As we've highlighted in the past although quarter to quarter variations in tower leasing activity have impacted our services revenue in 2023, our leasing revenue remains unaffected underpinned by the comprehensive master lease agreements currently in place.

Thomas Bartlett: Further, 92% of IT leaders are considering moving critical workloads from public cloud to co-location to accelerate revenue growth and support the increasing need for AI in machine learning applications. In this context, we continue to upgrade our offerings and capabilities within the business to support emerging use cases. For example, earlier this month, we launched new capabilities on our OCX, our pioneering software to find networking platform, enabling clients to rapidly create higher bandwidth virtual connections to Google Cloud and AWS direct connect and between core site data centers, including 50 gigabit services.

Finally, the updated mid points include revised FX assumptions that have resulted in outlook to outlook headwinds of approximately $28 million for property revenue $14 million for adjusted EBITDA and $5 million for attributable <unk>.

With that let's dive into the numbers.

Turning to slide 10, we are increasing our expectations for property revenue by approximately $60 million as compared to our prior outlook.

Our revised expectations are driven by $31 million in core property revenue outperformance, along with approximately $45 million and $12 million in additional pass through and straight line revenues respectively.

Thomas Bartlett: These upgrades reduced the time required for organizations to augment network capacity to support high bandwidth, low latency, hybrid applications like AI, machine learning, and digital media production. When it comes to current and future AI and machine learning applications, core sites flexible, purpose built design data centers position us to host power intensive GPU services being used for AI and ML use cases. For example, we're already providing GPU capacity for applications like 3D visualization and rendering and for software development within niche cloud environments.

Our revised guidance includes $10 million in outperformance associated with Vil collections with roughly half included in our core property revenue and the balance in the pass through outperformance illustrated growth was partially offset by $28 million of negative FX impacts.

Turning to slide 11, we are increasing our expectations for organic tenant billings growth across nearly all segments in the U S and Canada, we are increasing our guidance to greater than 5% or approximately six 5% excluding sprint churn now with an expectation for approximately $230 million in co located.

Thomas Bartlett: And for the densest AI applications, our purpose built facilities are designed to accommodate liquid cooling with modest development efforts when required. As we've stated previously in the near term, we continue to believe the majority of today's generative AI workloads will provide hyper scale opportunities that don't meet our investment criteria or fit within the core site ecosystem. However, as Gen AI evolves, we would expect the balance of workloads to shift from large language model development, intensive training in public prompts to specialized inference based use cases as productivity gains from the deployment of custom models, accelerates.

<unk> an amendment growth contributions.

Growth is further benefiting from non sprint related churn delays, which we now anticipate occurring in 2024.

In Latin America, we have increased our outlook from approximately 4% now to approximately 5% largely driven by continued delays in anticipated consolidation related churn.

Next we are increasing our Africa outlook from greater than 11% to approximately 12% primarily due to a continued uptick in colocation and amendment demand in APAC, we are increasing our guidance from approximately 4% to about 5% supported by a combination of strong new business.

Thomas Bartlett: Series. At this stage, when low latency, interconnection, high power density, and distributed high performance compute become the priorities, we believe, core site, and ultimately our distributed portfolio of franchise real estate assets across the US are going to be optimally positioned to benefit.

And delayed churn.

Moving on to Slide 12, we are raising our adjusted EBITDA outlook by $60 million. This reflects the strong conversion of the incremental property revenue highlighted earlier, coupled with prudent cost controls, resulting in an incremental $67 million in cash property gross margin outperformance along with an additional $14 million in cash.

Thomas Bartlett: On that note, we've continued to see progress toward the realization of demand cases that support our initial edge thesis. And we believe we have an opportunity to enable a more efficient exchange of network traffic and support cloud services and peering in a more distributed manner. As a result, we've been working both internally and with external stakeholders to develop an edge model we can execute on as compelling opportunities present themselves. And our initial assumption that through core site, our seed at the table and visibility into the customer demand environment would be material enhanced is holding true.

Cash SG&A savings and $13 million straight line. This growth was partially offset by a reduction of $20 million associated with our U S services business in a negative FX impact of $14 million.

Turning to slide 13, we are raising our expectations for <unk> attributable to common stockholders by $40 million at the midpoint or approximately nine on a per share basis, moving the midpoint to $9 79 per share outperformance was driven by the cash adjusted EBITDA increase.

Thomas Bartlett: We're increasingly seeing interest from potential customers looking to extend technologies such as private cloud computing, AI, and 5G applications closer to the end device through more distributed architecture. This is resulting from several key demand cases, including availability of future power requirements, business efficiency, revenue generation opportunities, and customer experience. When it comes to power, core site has secured significant future power availability and is insulated from expected shortages in markets like Northern Virginia.

<unk> of $61 million, partially offset by $16 million of other items, including an acceleration of certain maintenance projects and cash taxes, along with incremental minority interest due to outperformance in our JV businesses, partially offset by improvements in net interest as I noted earlier FX.

The headwind of approximately $5 million.

Moving on to Slide 14, Let's review our capital allocation plans for the full year.

Consistent with the expectations set at the beginning of the year, we are planning to distribute approximately $3 billion in common stock dividends, which represents a year over year growth rate of 10% on a per share basis subject to board approval. Our full year Capex spend also remains consistent at $1 $7 billion with the acceleration.

Thomas Bartlett: However, power constraints in general are increasingly in focus in legacy data center markets. In this case, we believe our distributed land footprint in tier 2 and 3 markets with significant power availability and capability to connect back to core site campuses can serve more distributed power capacity needs while enabling customers to enjoy the interconnection benefits of the core site ecosystem. And its potential customers increasingly focus on new revenue opportunities and customer experience, including through the proliferation of applications like next generation gaming, AR and devices and wearables that leverage interactive AI, we believe we have a compelling combination of distributed points of presence and interconnection capabilities that can be extended to a broader edge.

Of certain non discretionary projects that I mentioned earlier offset by lower discretionary spend which includes a reduction in development capex associated with lower anticipated newbuild volumes.

As always our goal is to execute our capital deployment strategy that maximizes total shareholder returns in line with my earlier remarks, we're focused on creating incremental value through solid organic growth and quality of earnings optimizing global operational efficiency and expanding cash margins, all while strengthening our financial position by far.

Further reducing balance sheet risk and enhancing financial flexibility.

Thomas Bartlett: In addition, by prioritizing our existing owned real estate, which in many cases is already designated for use as digital infrastructure, we see an opportunity to drive a significant time to market advantage and reduce overall development costs, which could be compelling to customers and enhance returns on investment. As a result of these factors, we continue to work toward establishing a repeatable, rapidly deployable design with initial capacity and the one megawatt range, which could then be scalable to incremental megawatts with interconnection to multi-side campuses as demand dictates.

As it relates to capital allocation and against the current economic backdrop, we believe its optimal to prioritize balance sheet strength and keep discretionary spend focused on select capital expenditure projects that yield the best risk adjusted returns and quality of earnings.

Additionally, decoupled from our current line of sight towards attributable <unk> growth for next year, we anticipate maintaining a dividend per share profile in 2024 that closely aligns with our 2023 expectation of $6 45 per share.

Resuming growth in a manner supportive of our REIT taxable income thereafter, all subject to board approval.

Thomas Bartlett: As always, we'll assess potential growth at the edge through the prism of our discipline, capital allocation framework, committing capital only if the opportunity meets our investment criteria and aligns with our long-term strategic vision of growing our interconnection ecosystem in a way that maximizes shareholder value.

By focusing on the above priorities, we believe American tower's positioned for sustained a compelling total shareholder returns supported through balance sheet strength over the long term.

Consistent with our historical practice, we will discuss our 2024 plans in more detail on our next earnings call.

Thomas Bartlett: Closing the bottom line is that we remain at the relatively early stages of a 5G and network technology evolution that we believe will necessitate continuous incremental investment in existing infrastructure, like towers, data centers and distributed edge infrastructure. We are now at the center of the network and enterprise devices and applications and American Tower with its leading tower portfolio and real estate footprint combined with a highly interconnected data center ecosystem is in a truly differentiated position to serve the network infrastructure needs of the future.

Moving to the right side of the slide and as highlighted earlier as a result of the successful execution of our financing initiatives in the third quarter, we reduced our floating rate debt balance to below 11% increased our liquidity to $9 $7 billion and our average maturity remains over six years.

We closed the quarter with net leverage of approximately five times, which benefits from certain nonrecurring items in the quarter as I mentioned earlier.

And we expect to close the year slightly above five times move.

Moving forward, we will remain opportunistic and potentially further accessing the debt capital markets, ensuring continued strengthen our balance sheet, reducing risk and enhancing our financial flexibility.

Turning to slide 15, and in summary, our diverse portfolio of global communications assets continued to demonstrate resiliency in the face of a challenging macroeconomic backdrop producing attractive growth through organic leasing further amplified by exceptional cost management at the margin.

Thomas Bartlett: Before I hand the call over to Rod, I'd like to close my remarks by congratulating Steve Vondran, who effective November 1st will hold the role of global chief operating officer until February 1st of next year, at which point he'll transition to the position of chief executive officer and Bud Nol who will become our new executive vice president and president of our US tower division. The board and I have worked diligently on succession planning weighing the merits of an external search against the talent we have within our organization.

Complementing our operational performance, we continue to make progress in strengthening and Derisking our balance sheet.

Furthermore, we remain committed to managing our capital structure sources and uses and capital allocation priorities in a manner that positions American tower to drive sustained attractive returns for our shareholders over the long term.

Thomas Bartlett: Steve joined American Tower in 2000 and currently serves as the executive vice president of our US and Canada business, including both towers and data centers. For the past 23 years, Steve has been instrumental to the growth and sustainability of earnings for American tower and has built tremendous credibility with our global organization, his peers, the board of directors, the American tower investor base and our customers. All this to stay, Steve is a clear candidate to lead American tower in its next growth phase. And over the next several months, I'll work closely with Steve, the executive leadership team and the board to ensure a seamless transition.

With that operator, we can open the line for questions.

Thank you, ladies and gentlemen, if you do wish to ask a question. Please press one and then zero on your telephone keypad you can withdraw your question at any time by repeating the ones. They will command and if you're using a speakerphone. Please pick up the handset before pressing the numbers once again, it's one zero to ask a question.

And we'll go to the line of Simon Flannery with Morgan Stanley.

Tom all the best for the two trips and great working with you over the years, even back to the Verizon used to sell days.

Congratulations.

Thomas Bartlett: Lastly, I want to thank all of the incredible American tower employees around the world, both past and present, our customers and investors for the support and confidence you've demonstrated and I joined in 2009. Although this is a difficult decision on my part, I look forward to the time ahead with family, friends and new challenges while watching the company under Steve's leadership continue to succeed.

Okay.

Good luck in the new role.

If we could come back to the capital allocation.

Please.

The comments around the dividend.

Perhaps.

Project risk talk about target leverage are you thinking about bringing leverage down more aggressively.

Given the rate environment on the uncertain macro environment, just any color around that would be greater than the other drivers of the dividend decision.

And perhaps how are you thinking about M&A more broadly outside of India.

Rodney Smith: With that, I'll turn the call over to Rod to review our latest results and updated outlook. Rod? Thanks, Tom.

It is a process that you referenced earlier.

A big gap here between public and private markets any opportunities there that you see.

Rodney Smith: Good morning and thank you for joining today's call. In Q3, we continued our trend of strong performance driven by solid demand for our diverse global portfolio of assets. Against the challenging macro economic backdrop, we remained focused on delivering results and creating value by driving the organic growth across our existing portfolio and demonstrating global operational efficiency and cost management in support of attractive margin expansion. At the same time, we are committed to strengthening our balance sheet by enhancing our liquidity, extending our maturities, reducing floating rate debt volatility and making progress towards our leverage target. These efforts, coupled with the evolving technological trends highlighted by Tom, remained key drivers of our current performance and give us confidence in our ability to drive sustained growth over the long term.

What about buybacks is that something that could come into.

Your your toolbox in the in the <unk>.

Quarters here. Thank you.

Yes, Simon good morning, and thanks for joining I'll hit the leverage piece first and then Tom will address.

The dividend more broadly when you think about the leverage.

And then a little bit higher than our <unk>.

Stated range, we've been up in less than the $5 three range. We did in this quarter at around 5.0 that was benefited from some nonrecurring onetime revenue items. So we do expect that to tick back up towards the end of this year and we expect to end this year again higher than our stated range of three to five times.

Up in the $5 to $5 three range. It is a priority of ours to bring that leverage down along with driving organic growth operational efficiency expanding margins controlling the.

Rodney Smith: Before delving into the specifics of our Q3 results and raised outlook, let me touch on a few highlights from the quarter. First, we saw a continuation of solid trends across our global operations, driving consolidated property revenue growth of 7%. Consolidated organic tenant billing growth in our tower business exceeded 6% for the third consecutive quarter and was complemented by over 9% revenue growth in our data center business. As a result of this strong performance and visibility extending through the end of 2023, we raised our full-year expectations across nearly all segments, which I'll discuss in more detail later.

The SG&A and the <unk> and.

And ultimately the <unk> growth that we can drive so the target is to get to 5.0 as soon as we can we'll be working through that diligently next year.

A lot of these operational objectives around organic growth and driving <unk> as well as capital allocation our capital plan, specifically youll see a reduction you've seen a reduction in our capital plans this year versus last year and that again is all in line with trying to drive down leverage and strengthen our balance sheet, we do.

I think those are important steps to take to drive total shareholder return in the short term and the long term. So that's what it's really all about the dividend holding it flat next year is in line with that I will say, we believe that's the best use of capital in terms of strengthening the balance sheet in this time of uncertain right.

Rodney Smith: Next, our keen focus on cost management resulted in conversion rates exceeding 100% and adjusted EBITDA margin expansion of roughly 290 basis points a year every year, and still over 215 basis points when normalized for the prior year, VIL revenue reserves. Complementing our operational efforts on the balance sheet side, we raised $1.5 billion in senior unsecured notes that awaited average cost of approximately 5.9%. By utilizing the proceeds to pay down to revolver balances, we reduced our floating rate debt exposure to approximately $4 billion, or less than 11% of our total outstanding debt as of the end of the third quarter, down from over 22% at the start of the year.

When it comes to M&A, we continue to not see compelling M&A opportunities in our pipeline. So it's not something that's hitting our radar screen in terms of capital allocation. This year and certainly as we turn the corner into next year, and then I'll turn it over to Tom to hit and a little bit more directly so first of all Simon Thanks for Scott here.

Thanks for your kind words, but maybe with regards to the dividend.

It's important just to take maybe just take a step back and understand how we really manage this dividend growth since we became a REIT over a decade ago back in 2012, we've always looked to complement <unk> grows with a compelling yield which we've grown as you all know around 20% annually as compared to our <unk> per share growth, which is.

Rodney Smith: Finally, we're making significant progress on the strategic review of our India business. As we are in the final stages of this process, we remain committed to communicating the outcome to our shareholders before the end of the year, consistent with our past messaging. In Q3, we recorded $322 million in goodwill and payment charges associated with our India business. This was prompted by indications of value obtained through the process conducted over the past several months, supported by our own interim goodwill impairment tests. We believe this impairment accurately reflects the current market conditions, evolving risk premiums associated with operating in the India market, and more generally increases in the cost of capital.

Been closer to 10% over that same time period, we've aligned our distribution with REIT taxable income as you would expect and within re Ti you do have a recurring run rate and more of one time buckets consistent with things like earnings and profit settlements Throwbacks, Nols, which we used last decade.

Much of which is discretionary and the planning that are absolutely separate from <unk> and these tools allow us to manage a more predictable glide path on our dividend. So here. We are in 2023, and we're committed to a 10% dividend growth rate, which like other years consisted of certain one time items to manage the dividend path.

Rodney Smith: With that, please turn to slide 8, and I'll review our property revenue and organic tenant billing's growth for the quarter. As you can see, consolidated property revenue growth was 7%, or 8% on an FX neutral basis. US and Canada property revenue growth was over 5%, which includes a nearly 2% headwind associated with a reduction in straight line revenue, offset by timing benefits associated with certain non-recurring one-time items in the quarter. International growth was nearly 9%, or approximately 11%, excluding the impacts of currency fluctuations, which included a 4% benefit associated with the full collection of VIL billings in India in the quarter, as compared to the approximately $48 million revenue reserve in the prior year.

And ensure alignment between our distribution and re Ti.

Although our recurring <unk> bucket was negatively impacted by interest rates, we utilized certain one time items to manage towards the distribution and absent those items like most years, we'd be over distributed.

So as we look ahead to 'twenty four we see an opportunity to accelerate our glide path to reset <unk> closer to the run rate, which means temporarily relatively flat dividends per share and 24 decoupled from our expectations for <unk> growth based on our line of sight to today, so our priorities that rod just laid out.

Out really remain on maximizing our total shareholder returns.

Rodney Smith: Finally, as I mentioned in my earlier remarks, our data center business revenue increased by over 9%, and continues to demonstrate solid outperformance as compared to our initial underwriting plan. As Tom mentioned earlier, we anticipate 2023 to, again, break defined new business record just set in 2022. Setting up course height to drive sustained, attractive levels of growth as the backlog of new business commences over the next several years. Lewis. Moving to the right side of the slide, strong performance across each of our segments drove consolidated organic tentative billing growth of 6.3 percent.

And we see the optimal path to do so really centered around strengthening and derisking, our balance sheet, which means in part reducing our debt balance and advancing our pathway to sub five times net leverage and with that more financial flexibility than we do the levers to accelerate this path to maximizing organic growth, reducing our cost base as we've done.

In 'twenty three and we will continue to do in 24 with a disciplined capital allocation and Roger referred to together with managing the dividend in a relatively flat basis before resuming growth in line with our recurring retail thereafter. So this isn't a decision we take lightly as you would expect but given the current macro volatility.

Rodney Smith: Within our US and Canada segment, organic tentative billing growth was 5.3 percent, and greater than 6.5 percent absent spring-related churn, including another quarter of co-location and amendment contributions of nearly $60 million. Our international segments saw out of performance across nearly all reported segments, primarily driven by higher new business in Africa and churned delays in Latin America and APAC, resulting in organic tentative billing's growth of 7.9 percent.

We believe that the balance sheet strength and accelerating financial flexibility for future opportunities, which could include buybacks is the optimal approach from where we sit today. So hopefully that gives you a little bit of a sense at least in terms of how we're thinking about it and how it fits into our overall plans for creating value long term.

Great. Yeah, that's very helpful. So just to be clear the hope would be to resume dividend growth and 25 or up to 25, yes.

Okay, great. Thanks, a lot.

Rodney Smith: Turning to slide 9, adjusted EBITDA grew over 10 percent to $1.8 billion for the quarter, or approximately 11 percent on an FX neutral basis. As I highlighted in my opening remarks, adjusted EBITDA margin expanded to 64.4 percent, a 290 basis point improvement compared to the previous year, primarily driven by solid organic growth, effective cost management throughout the business, and the one-time revenue items I mentioned. In fact, despite the current inflationary environment, we have managed to maintain a relatively flat year-of-a-year cash S-GNA profile, remaining consistent with the themes from the first half of the year, with cash S-GNA as a percent of property revenue standing at approximately 6.5 percent for the quarter, a nearly 70 basis point improvement versus Q3 of 2022.

And next we'll go to Michael Rollins with Citi. Please go ahead.

Thanks, and good morning, and Tom I also want to express my Thanks, and best wishes for your upcoming retirement, congratulations Steve on your upcoming transition to the CEO role.

Just a couple of questions for me.

Oh, you're welcome and again thank you.

It's both Verizon and at a M T.

Got along I've got a long history of my my airline has receded more than yours.

[laughter] so.

So a couple of things so first on.

Activity levels in the domestic business curious if you could just go deeper into.

What you're seeing.

As you're looking at the balance of this year and what it means for next year in terms of how that domestic business can grow relative to the long term annual targets that you've set.

Rodney Smith: Moving to the right side of the slide, attributable AFFO and attributable AFFO per share each increased by over 9 percent driven by solid cash adjusted EBITDA partially offset by an approximately 5 percent headwind from financing costs.

For that business and if you can within that context.

Also unpack the delays that youre seeing in sprint.

Related churn and.

What that means for that decommissioning pace as we look forward. Thanks.

Rodney Smith: Now, shifting focus to our revised full-year outlook, I'll start by highlighting a few key items. First, as a result of our strong performance in the third quarter and the momentum taking us through the end of the year, we've raised our guidance for property revenue, adjusted EBITDA, attributable AFFO and attributable AFFO per share. Next, our revised outlook includes a reduction in U.S, services, resulting in a $20 million decrease in gross margin compared to our previous expectations for the year.

Sure I'll take that one.

So we're not going to give specific guidance for 2024 at this time obviously.

Want to get into specific carrier activity levels, because I will leave it to them to talk about the rollout plans, but in general we have seen activity levels moderate over the last several months from the recent highs.

However, the visibility that we have into a baseline level of contractually guaranteed growth through these comprehensive MLA is.

Allow us to reiterate our expectation that we're going to achieve an average annual <unk>.

Rodney Smith: As we've highlighted in the past, although quarter to quarter variations in tower leasing activity have impacted our services revenue in 2023, our leasing revenue remains unaffected, underpinned by the comprehensive master lease agreements currently in place. Finally, the updated midpoints include revised FX assumptions that have resulted in outlook headwinds of approximately $28 million for property revenue, $14 million for adjusted EBITDA, and $5 million for attributable AFFO. With that, let's dive into the numbers.

<unk> growth rate of at least 5% in the U S and Canada segment between 2023 and 2027.

And despite some of the concerns that people have in the market over the recent moderation we have visibility into a level of organic growth in 2024, the supportive of that average.

Now, having said that I want to breakdown the components a little bit.

We do not have visibility into another year of a $230 million growth from Colocation and amendment activity, thus far and away a record for American tower, but we balance that with an expectation for some moderation.

Rodney Smith: Turning to slide 10, we are increasing our expectations for property revenue by approximately $60 million as compared to our prior outlook. Our revised expectations are driven by $31 million in core property revenue outperformance, along with approximately $45 million in $12 million in additional pass-through and straight line revenues. Respect. Actively. Our revised guidance includes $10 million in outperformance associated with VIL Collections, with roughly half included in our core property revenue and the balance in the pass-through outperformance illustrated. Growth was partially offset by $28 million in negative FX impacts.

Sure Paul.

In 2023, excluding spread.

Our mlps do provide us with visibility to a level of Colocation and amendment contributions that exceeds the average we've seen over the past several years and again, it's supportive of that at least 5% average OTG that we've guided to between.

Between 2023 and 2027.

And to reiterate on our sprint churn the annual impacts of our spreadsheet or it would have been 195 million in 2021 $60 million in 2000 $20 million to $50 million in 2023 and $70 million in 2024 for a total of $375 million. So we're past the peak of that churn and Theres no change.

Rodney Smith: Turning to slide 11, we are increasing our expectations for organic tenant billing's growth across nearly all segments. In the U.S, and Canada, we are increasing our guidance to greater than 5 percent, or approximately 6.5 percent excluding sprint churn. Now with an expectation for approximately $230 million in co-location and amendment growth contributions. Growth is further benefiting from non-sprint-related churn delays, which we now anticipate occurring in 2024. In Latin America, we have increased our outlook from approximately 4 percent up now to approximately 5 percent, largely driven by continued delays and anticipated consolidation-related churn.

<unk> does that cadence versus our prior guidance.

In that respect and.

And Mike I would just add just to make it clear the delays in churn that we're seeing in the U S is not spring related other items that we were planning that could be moved out a bit as Steve is saying the spring cadence has not changed and when you think about next year 2024 in our long term guide.

It's unlikely that there's going to be material upside based on where we sit today. We do think there's potential for upside in the longer term growth rates, but that would probably come in 'twenty six 'twenty seven and down the line not necessarily in 'twenty four.

Rodney Smith: Next, we are increasing our Africa outlook from greater than 11 percent to approximately 12 percent, primarily due to a continued uptick in co-location and amendment demand. In APAC, we are increasing our guidance from approximately 4 percent to about 5 percent, supported by a combination of strong new business and delayed churn.

Thanks, and just one quick one what's the percent that youre seeing in terms of the mid band upgrade the percent of sites that had been upgraded for mid band already versus the amount that might be remaining.

A little over half at this point.

Thank you.

Thanks, Michael.

Rodney Smith: Moving on to slide 12, we are raising our adjusted EBITDA outlook by $60 million. This reflects the strong conversion of the incremental property revenue highlighted earlier. Coupled with prudent cost controls, resulting in an incremental $67 million in cash property growth margin outperformance, along with an additional $14 million in cash, SGNA savings, and $13 million of straight line. This growth was partially offset by a reduction of $20 million associated with our U.S, services business in a negative FX impact of $14 million.

Next we'll go to David Barden with Bank of America. Please go ahead.

Hey, guys. Thanks, so much for taking the questions and let me Echo Tom the <unk> the.

For years, we spent together it's been great and congrats too.

But and Steve on the new role.

Thanks, Dave So I guess, if I can.

I can start.

Just to maybe more on the finance side Rod.

Slide 11.

You talked about some of the increases we're seeing in some of the non U S regions could you break that down into kind of core organic leasing and then some of the inflation driven escalators and so is this real growth that we're seeing.

Rodney Smith: Turning to slide 13, we are raising our expectations for AFFO attributable to common stockholders by $40 million at the or approximately 9 cents on a per share basis. Moving to midpoint to $9.79 per share, outperformance was driven by the cash adjusted EBITDA increase of $61 million, partially offset by $60 million of other items, including an acceleration of certain maintenance projects in cash taxes, along with incremental minority interest due to outperformance in our JV businesses, partially offset by improvements to net interest. As I noted earlier, AFX caused a headwind of approximately $5 million.

That could be sustained or is it more of an inflation driven bubble that we need to kind of be conscious of that might reverse.

And then second just on the India.

The situation with the write down I think the task with the acknowledgment that maybe some of the locked your valuation ambitions were not there.

I guess, we're all sitting here trying to figure out what kind of dilution, we should be baking into 2024.

The latest press reports suggested kind of a $2 billion valuation with something like a five times EBITDA multiple.

Obviously, it depends on kind of how big is taking you sell and when you sell it but is there any kind of more color you can dead on.

Rodney Smith: Moving on to slide 14, let's review our capital allocation plans for the full year. Consisted with the expectation set at the beginning of the year, we are planning to distribute approximately $3 million in common stock dividends, which represent the yearly year growth rate of 10% on a per share basis, subject to board approval. Our full year CAPEX spend also remains consistent at $1.7 billion, with the acceleration of certain non-discretionary projects that I mentioned earlier, offset by lower discretionary spend, which includes a reduction in development CAPEX associated with lower-anticipated new-build volume.

The shape of what kind of dilution expectation, we should be thinking about the 24. Thank you.

Yeah, David So let me hit the first part of your question I think I missed a little bit in the second so I may ask you to repeat that but if you think about the upside in terms of the growth rates.

Let me hit it by addressing the organic tenant billings.

<unk> first off so we are seeing increases in organic tenant billings really across the board. So you can see on the charts there were increasing our overall organic tenant billings for the company to about 6% that's up about 50 basis points from prior and that that kind of that theme is consistent across many of the regions.

Rodney Smith: Williams. As always, our goal is to execute a capital deployment strategy that maximizes total treeholder returns. In line with my earlier remarks, we're focused on creating incremental value through solid organic growth and quality of earnings, optimizing global operational efficiency and expanding cash margins, all while strengthening our financial position by further reducing balance sheet risk and enhancing financial flexibility. As it relates to capital allocation and against the current economic backdrop, we believe it's optimal to prioritize balance sheet strength and keep discretionary spend focused on select capital expenditure projects that yield the best risk adjusted returns and quality of earnings.

As Steve just highlighted in the U S. We're bringing that a guy to beyond 5% from what was previously around 5% international is coming up to greater than 7% prior were at greater than six 5% and then you look at the different parts of the company region by region Latam is going up.

So about 5% versus what was previously a 4% APAC is coming up to about 5% previously it was 4% Europe is staying around where it was at 8% and Africa is also coming up to around 12% from what was prior higher than.

Rodney Smith: Additionally, decoupled from our current line of site towards attributable AFFO growth for next year, we anticipate maintaining a dividend per share profile in 2024 that closely aligned with our 2023 expectation of $6.45 per share, resuming growth in a manner supportive of our reach taxable income thereafter, all subject to board approval.

And then 11% a couple of things I'll say in terms of the stay ability of the durability of some of that growth.

Certainly in the U S. It's nice strong performance there is a little bit of delayed churn. So we can expect to see that hit next year other than that the U S is very steady in terms of the demand part of that is because of the way. The contracts. We have work out when you think of Latin America, we do have higher levels of churn this year than we have it.

Rodney Smith: By focusing on the above priorities, we believe American Tower's positions for sustaining compelling total shareholder returns supported through balance sheet strength over the long term.

Had in prior years some of the outperformance is churn driven so when you think about the Latam over performance is really a delay in churn and probably not all that durable from that perspective, one year. When you get into APAC. It's a similar situation and the increase there is delayed churn maybe some delayed discounts Europe is staying in line in Africa, we're seeing higher <unk>.

Rodney Smith: Consistent with our historical practice, we'll discuss our 2024 plans in more detail on our next earnings call. Moving to the right side of the slide, and as highlighted earlier, as a result of the successful execution of our financing initiatives in the third quarter, we reduced our floating rate debt balance to below 11%. Increased our liquidity to $9.7 billion in our average maturity remains over six years. We closed the quarter with net leverage of approximately five times, which benefits from certain non-recurring items in the quarter, as I mentioned earlier, and we expect to close the year slightly above five times. Moving forward, we'll remain opportunistic and potentially further accessing the debt capital markets, ensuring continued strength in our balance sheet, reducing risk and enhancing our financial flexibility.

Levels of new business activity. So much of that is in fact durable and lasting that's the way I would kind of articulate that and then maybe on the second question. If you could maybe just repeat the question about the dilution.

So I get it right.

Hey, Rod so thank you. So I think we were just trying to and thank you for those comments that's helpful on the on the pieces parts.

Just the India right down.

Seem to suggest that the bid ask spread.

Between what may be A&P hoped to accomplish from a valuation standpoint, and what's been offered.

It collapsed down to the offer side of the spread and.

Rodney Smith: Turning to slide 15 and in summary, our diverse portfolio of global communications assets continue to demonstrate resiliency in the face of a challenging macroeconomic backdrop, producing attractive growth through organic leasing further amplified by exceptional cost management at the margin. Complementing our operational performance, we continue to make progress in strengthening and de-risking our balance sheet. Furthermore, we remain committed to managing our capital structure, sources and uses and capital allocation priorities in a manner that positions American talent to drive sustained attractive returns for our shareholders over the long term.

Is that the right interpretation.

Or.

We're reading through that right that write down and then obviously you know.

We're all attempting to evaluate what the dilution effect for the sale might be in 2020 for any more color on you know, whether it's a full divestiture of 50% divestiture and kind of timetable would help us kind of do that math. Thank you Yep Yep. That's good David. Thank you, so where we're making good progress with the with the strategic.

Nick.

Review that we've set out in terms of the write down we are writing the NDA business down about $322 million et cetera, the book value in around $2 2 billion or so and as I stated in my prepared remarks. It really is based on our internal impairment review analysis discounted cash flow driven and certainly.

Unknown Executive: With that operator, we can open the line for questions.

Unknown Executive: Thank you. Ladies and gentlemen, if you do wish to ask a question, please press one and then zero on your telephone keypad. You can withdraw your question at any time by repeating the 10 command and if using a speaker phone, please pick up the handset before pressing those numbers.

Cost of capital plays a.

Significant role in that but also as I highlighted in my comments. It does also consider indications of value that we've determined throughout the process. So I think you can understand what that means and it'll help you kind of think about where things sit.

Simon Flannery: Once again, it's one zero to ask a question and we'll go to the line of Simon Flannery with Morgan Stanley. Tom, all the best for the future. It's been great working with you over the years, even back to the Verizon, used to sell days.

<unk> also provided a little bit more breakout on on the India financials and some is in the back of the presentation, which you will see yet but in terms of revenue. We're a little over 1 billion EBITDA, it's about $355 million Unlevered <unk> is about to 90.

Rodney Smith: Absolutely. Congratulations and best of luck in the new role. If we could come back to the capital allocation, please, the comments around the dividend and perhaps Roger could just talk about target leverage. Are you thinking about bringing leverage down more aggressively, given the rate environment and the uncertain macro and environment, just any color around that would be great or any other drivers of the dividend decision? Perhaps how are you thinking about M&A more broadly outside of the India process that you referenced earlier?

So that gives you a little bit more information to kind of piece through and kind of assume where we may.

We may have I don't want to get into too much direct guidance will certainly lay that out when we complete our strategic review, which the good news is we're happy with the way the process. The process is evolving we're confident we will be concluding it. This year just as we've previously mentioned once we do we'll let the investors know.

<unk>, what we've concluded and what we what we plan to do there we've said that our goal and we're on track to achieve our goals, which is to sell a majority equity stake to a financial investor.

Rodney Smith: There's a big gap here between public and private markets and the opportunities there that you see. What about buybacks? Is that something that could come into your toolbox in the coming quarters here? Thank you. Yes, Simon, good morning. Thanks for joining. I'll hit the leverage piece first and then Tom will address the dividend more broadly. When you think about the leverage, you know, we've been a little bit higher than our stated range.

Said between 51 and 100% the reality is it's probably going to be a majority stake we probably will retain a stake so it'll be somewhere between that 61 and 100, that's that's where we're kind of directing the process at this point, but again, we are confident that the process will conclude in.

Rodney Smith: We've been up in the five three range. We did end this quarter at around 5.0. That was benefited from some non-recurring one-time revenue items. So we do expect that to tick back up towards the end of this year. And we expect to end this year. Again, higher than our stated range of three to five times up in the five, two, five, three range. It is a priority of ours to bring that leverage down along with driving the organic growth, operational efficiency, expanding margins, controlling the SGNA and ultimately the AFFO growth that we can drive.

In the next couple of months and when it does we'll let the investors know exactly what we've done.

Thanks, So much guys appreciate it good luck everybody.

And next we'll move to Ric Prentiss with Raymond James. Please go ahead.

So I'll go to Bell had.

Thanks for the memories, so great working with you.

In the first movie.

Years ago, absolutely you set up the table for us at the NAREIT Conference Rick I remember that.

Rodney Smith: So the target is to get the 5.0 as soon as we can. We'll be working through that diligently next year. And a lot of these operational objectives around organic growth and driving AFFO, as well as capital allocation, our capital plan specifically, you'll see a reduction. You've seen a reduction in our capital plan this year versus last year. And that, again, is all in line with trying to drive down leverage and strengthen our balance sheet.

Thanks, Stephen Great working with you in the past and we look forward to the new role.

Thanks, Rick.

Let me go back to the dividend question from a couple of different angles as well.

I think you mentioned $6 45, a share approximately.

Kurt.

And then the analysis and getting paid shortly we didn't play a little bit higher than that 648, or we think it's in that range or is 645, where we should be thinking well, yes, I think at this point to think about it being flat year on year. So of course every quarter, we get the dividend approved by by by the Board.

Rodney Smith: We do think those are important steps to take to drive total share of the return in the short term and the long term. So that's what it's really all about. The dividend holding it flat next year is in line with that. I'll say we believe that's the best use of capital in terms of strengthening the balance sheet in this time of uncertain rates. When it comes to M&A, we continue to not see compelling M&A opportunities in our pipeline. So it's not something that's hitting our radar screen in terms of capital allocation this year. And certainly as we turn the corner into next year.

But our intention is to hold the dividend flat annually year over year to help support deleveraging balance sheet strength, and ultimately <unk> growth as well as total shareholder returns.

Yes.

And I appreciate the color.

Helpful.

Related to the REIT taxable income it sounds like as well but.

Implicitly that isn't also the thought that the India sale.

Thomas Bartlett: Then I'll turn it over to Tom to hit the end a little bit more directly. First of all, Simon, thanks for your kind words. But maybe with regards to the dividend, it's important just to take maybe just take a step back and understand how we really manage this dividend growth since we became a read over a decade ago back in 2012. We've always looked at complement AFFO growth with a compelling yield, which we've grown as you all know around 20% annually as compared to our AFFO for share growth, which has been closer to 10% over that same time period.

We anticipate and then also in terms of the effect with the dividend.

Hum product thoughts.

Yeah, I guess, Rick I would say that's not that's not correct the India business isn't in our in our REIT at this point so it really doesn't drive into the REIT taxable income issue.

I think Tom articulated all of the drivers what's at which it's really this is a this is a management decision and certainly supported by our board to prioritize capital to prioritize deleveraging and balance sheet strength, it's not impacted by the India process.

Thomas Bartlett: We've aligned our distribution with retaxible income, as you would expect. And within RTI, you do have a recurring run rate and more of one-time buckets consistent of things like earnings and profits, settlements, throwbacks, NOLs, which we used last decade, much of which is discretionary in the planning. They are absolutely separate from AFFO, and these tools allow us for to manage a more predictable glide path under dividend. So here we are in 2023, and we're committed to a 10% dividend growth rate, which like other years, consistent of certain one-time items to manage the dividend path and ensure alignment between our distribution and RTI.

At all.

Tom highlighted there are certain REIT rules that allow one time items and some pre tax earnings to be moved from one period to another so.

There have been times in the past when we've been overrun just under distributed in or we can move some of that over or under distribution back and forth from year to year, which is which is helpful. So in this case. It really is a decision to drive balance sheet strength and using our capital in the best way, we can again to dry.

<unk> total shareholder return in the short term and the long term and in this in this market with uncertain interest rates going forward, we think that's prudent and that's really the driving factor.

Thomas Bartlett: And so although our recurring RTI bucket was negatively impacted by interest rates, we utilize certain one-time items to manage towards the distribution. In absent those items, like most years, we'd be over-distributed. So as we look ahead to 24, we see an opportunity to accelerate our glide path and reset RTI closer to the run rate, which means temporarily relatively flat dividends per share in 24, decoupled from our expectations for AFFO growth based on our line of sight today.

Okay.

And.

And then there was a small acquisition.

AT&T has launched SBC, he's talking about history lesson.

<unk>.

Can you talk a little bit about what you're seeing in the marketplace as far as multiples.

In the U S Europe and other places.

Yeah, Rick I would guess I mean, let me highlight first that we don't see compelling M&A on our pipeline I think everyone kind of knows that I'll just reiterate that.

Thomas Bartlett: So our priorities are just laid out, really remain on maximizing our total share on the returns. And we see the optimal path to do so, really centered around strengthening and de-risking our balance sheet, which means in part reducing our debt balance and advancing our pathway to sub five times net leverage, and with that more financial flexibility. And we do the levers to accelerate this path through maximizing organic growth, reducing our cost base, as we've done in 23, and we'll continue to do in 24, with a disciplined capital allocation or I just refer to, together with managing the dividend in a relatively flat basis before resuming growth in line with our recurring RTI thereafter.

We are seeing some things out there certainly there is a.

Not as robust, but there is a market in the U S with some smaller portfolios.

And I don't want to get into a lot of detail in terms of what we see I think we still see very high prices, even though they may have pulled back slightly from where they were lets say a year ago and.

And for that we still look at those at the small deals if we can find compelling ways to expand total shareholder return we have a little flexibility. There we don't see anything major but we also just see the majority of the deals are probably still priced a little higher than what today's cost of capital, which suggests that they that they should be the small acquisition you see.

Thomas Bartlett: So this isn't a decision we take lightly, as you would expect, but given the current macro volatility, we believe that the balance sheet strength and accelerating financial flexibility for future opportunities, which could include by the acts as the optimal approach from where we sit today. So hopefully that gives you a little bit of a sense, at least in terms of how we're thinking about it, and how it sticks into our overall plans for creating value long term. Right, yeah, that's very helpful. So just declare the hope would be to resume dividend growth in 25 or into 25. Yes. Thanks a lot.

In our numbers is really just a buyout of the prior SBC sublease, which you'll be familiar with it was a small tranche.

Okay. Okay was that some of the final purchase option stuff as well.

Yes, that's exactly what it is it's not the final one its just another tranche and that will continue for a few more years.

Makes sense and last one for me then.

I think you've mentioned that all assets are coming on until we were viewed with ended up getting closer towards process any update as far as what youre looking at on the balance sheet that might be.

Michael Rollins: And next we go to Michael Rollins with City.

Possible, it's a it's not living up to where we thought it would be or maybe even someone else wants to pay more given private versus public multiples.

Michael Rollins: Please go ahead. Thanks and good morning and Tom else want to express my thanks and best wishes for your upcoming retirement. Congratulations to Steve on your upcoming transition to the CEO role.

Yes, I would say Rick we routinely review the portfolio performance across our business globally, we do that from a couple of perspective, one one is it could be capital recycling opportunities, which we think can be very good for our shareholders over the long term that certainly the decisions. We we saw driving our exit from the <unk>.

Michael Rollins: Just a couple question for me. Oh, you're welcome. And again, thank you. It's both a horizon in at AMT. I've been working. I've got a long, I've got a long history. My, my hairline has received more than years.

Mexico fiber business. It also is what is driving our consideration around what we're doing in India.

Thomas Bartlett: So, so a couple things. So first, on activity levels and the domestic business, curious if you could just go deeper into what you're seeing as you're, you know, looking at the balance of this year. And what it means for next year in terms of how that domestic business can grow relative to the long-term annual targets that you set for that business. And if you can within that context, also unpack the delays that you're seeing in sprint related churn and, you know, what that means for that decommissioning pace as we look forward.

So I'd highlight that I don't want to get into specifics other places, where we might be looking but we are looking at our portfolio and it's something we do.

Constantly the other thing we do is we constantly look at our capital deployments.

And from that perspective, we can throttle those back or up depending on where the opportunities are we can also reallocate or redistribute capital to where we feel that investments will most will be most aligned with our priorities of driving organic growth in the short term and the long term quality of earnings and.

Consistent durable industry, leading <unk> growth and ultimately total shareholder return so I wouldn't just look at whether or not we sell a business here or there those would be kind of operational decisions as well as recycling capital, but also kind of our capex programs. How much are we investing where are we investing what kind of.

Thomas Bartlett: Thanks. Sure, I'll take that one. So we're not going to give specific guidance for 2024 this time, obviously. And I don't want to get into specific care activity levels, because I want to leave it to them to talk about the rollout plans. But in general, we have seen activity levels moderate over the last several months from the recent highs. However, the visibility that we have into a baseline level of contractual guarantee growth through these comprehensive MLAs allow us to reiterate our expectation that we're going to achieve an average annual OTBG growth rate of at least 5% in the US and Canada segment between 2023 and 2027.

Assets.

And again those decisions are made each and every year really each and every quarter and they are they are meant to do align with our priorities.

Okay, Thanks, guys and again best wishes everybody.

Revenue.

And next.

Pardon Me next we'll go to Matt <unk> with Deutsche Bank. Please go ahead.

Hey, guys. Thanks for taking the question.

Thomas Bartlett: And despite some of the concerns that people have in the market over the recent moderation, we have visibility into a level of organic growth in 2024 that's supportive of that average. Now, having said that, I want to break down the components a little bit. We do not have visibility into another year of a $230 million growth from co-location and amendment activity. That's far away a record from American tower, but we balance that with an expectation for some moderation and the in turn fall in 2023 excluding sport.

Just two related to the U S. Maybe first on services. So it was a pretty sizable drop off maybe less surprising in terms of what's going on in the industry, but services revenue looks like they dropped off in third quarter. Just wondering if you can share.

Any color in terms of whether this is broad base are related to one or two customers in particular and how to think about sort of forward.

Trajectory into <unk>, and then maybe on a somewhat related note in terms of Colo and amendment activity in the U S. So <unk>.

<unk> hold in relatively stable to what you saw in the first half I think the implied number for <unk> is around $53 million just wondering whether.

Thomas Bartlett: Our MLAs do provide visibility into a level of co-location and amendment contributions that exceeds the average we've seen over the past several years. And again, it's supportive of that at least 5% average OTBG that we've guided to between 2023 and 2027. And to reiterate on our sprint churn, the annual impacts of our sprint churn have been 195 million in 2021, 60 million in 2022, 50 million in 2023 and 70 million in 2024 for a total of 375 million.

That's sort of an appropriate.

Run rate to consider into next year or whether we should anticipate sort of incremental moderations by virtue of just a broader lull in the industry.

Sure I'll start out and then if you want to.

Jetblue Rod.

Terms of our service business, it's inherently a non run rate business and that makes it.

Difficult to predict and you saw that in 2021, when we raised archived material over a couple of quarters, we're seeing that this year as we've seen a moderation of activity.

Thomas Bartlett: So we're past the peak of that churn and there's no change to that cadence versus our prior guidance of that respect. And Mike, I would just add just to make it clear the delays in churn that we're seeing in the US is not sprint related. It's other items that we were planning that could be moved out a bit as Steve is saying the sprint cadence has not changed.

What I would say is because of our comprehensive MLA that's not a.

A direct read across to our property revenue because we are somewhat insulated from the peaks and valleys of activity with our customers on that.

It's too early to be giving guidance for 2024, and where we see the activity level's going there.

Thomas Bartlett: When you think about next year 2024 in our long-term guide, it's unlikely that there's going to be material upside based on where we sit today. We do think there's potential for upside in the longer-term growth rates, but that would probably come in 26 and 27 in down the line, not necessarily in 2020.

What I would just reiterate is this is consistent with what we've seen in other geos of activity and the carriers have an initial build phase.

Arts out with.

Kind of a bow wave of activity I think you'll see that moderate a little bit.

We are seeing the capital spend moderate a bit but it's still settling in at levels higher than it was in <unk> and even with our reduced expectations. This year for our services business its still higher than it was at the same point.

Unknown Executive: Thanks, and just one quick one, what's the percent that you're seeing in terms of the midband upgrade, the percent of sites that have been upgraded for midband already versus the amount that might be remaining? It's a little over half at this point. Thank you. Thanks, Michael.

And <unk>. So we're very optimistic that our customers will continue to build.

Throughout the cadence of this fiber build there'll be a restart of that activity. We don't know exactly when that's going to happen.

We'll give better guidance on that in February as we get more visibility into 2024, what those activity levels are going to be.

David Barden: Next we can go to David Barden with the Bank of America. Please go ahead. Hey guys, thanks so much for taking the questions and let me echo Tom the years we've spent together.

And Matt I'll, just add a couple of data.

Data points, when you think about the co location amendment.

David Barden: It's been great and congrats to button Steve on the new roles. Next day. If I could start maybe more on the finance side, Rod, 5-11, you could talk about some of the increases we're seeing in some of the non-US regions. Could you break that down into core organic leasing and some of the inflation driven escalators? So there's just real growth that we're seeing that could be sustained or that more of an inflation driven bubble that we need to kind of be conscious of that might reverse.

Additions this year.

We're anticipating a number of around $230 million for the U S. You recall last year, we were around 150 were at about $58 million this quarter and our guide.

We anticipate.

A further reduction, but still a number that's greater than $50 million in Q4.

Just take that Q4 number and annualize that I think you're better off and we won't give guidance as Steve suggested until next year.

But for modeling purposes, if you look at this year and last year and you split the difference that's probably a safer place too.

To put in your models today, and then of course, we'll guide in February and we will be able to update that number the only other thing I would say on services is the 100.

David Barden: And then second, just on the India situation with the right down, I think the path to acknowledgement that maybe some of the loftier valuation ambitions were not there. You know, I guess we're all kidding here, kind of figure out what kind of delusion we should be baking in the 2024. You know, the latest pressure for the India suggested, you know, kind of a $2 billion valuation, something like a five times EBITDA multiple.

The $140 million number is still higher than the historical average for services and we are continuing to maintain a very nice gross margin in that business at all levels. So when we saw that go up to about $270 million, we were still in the fifties low $50 50, 354% margins as it tapered off.

David Barden: Obviously, it depends on kind of how big a stake you sell and when you sell it. But is there any kind of more color you can get on the shape of what kind of delusion expectation we should be thinking about for 24? Thank you. Yeah, David. So let me hit the first party question. I think I missed a little bit of the second, so I may ask you to repeat that. But if you think about the upside in terms of the growth rates, you know, let me hit it by addressing the organic tenant buildings piece first off.

A little bit to $1 40, we are able to drive up the margins based on the mix the mix of the revenue and the way we service that revenue so with a lower revenue, we're still able to.

To mitigate some of that with higher margins in the upper <unk> at this point.

I appreciate it thank you both.

Welcome.

And next we'll go to Eric Loophole with Wells Fargo. Please go ahead.

Alright, great. Thanks for thanks for taking the question just a couple on capital allocation. So.

David Barden: So we are seeing increases in organic tenant buildings really across the board. So you can see in the charts, they were increasing our overall organic tenant buildings for the company to about 6%. That's up about 50 basis points from prior and that kind of that theme is consistent across many of the region. So as Steve just highlighted in the US, we're bringing that guy to beyond 5% from what was previously around 5%.

Given the recent increases in interest rates and cost of capital I mean, it's an influence at all as you look into next year kind of your build to suit ambition internationally or is there any kind of evaluation and maybe slowing that to reinvest in other areas and that could potentially be data centers, where it seems like you've had really strong performance year to date.

It seems like growth continues to ramp and maybe you need to allocate more capital to your data center business and how you kind of balance that versus other forms of shareholder return that'd be very helpful. Thank you.

David Barden: International is coming up to greater than 7% prior. We're at greater than 6.5%. And then you look at the different parts of the company region by region. In Latin, it's going up to about 5% versus what was previously a 4% impact is coming up to about 5%, previously it was 4%. Europe is staying around where it was at 8% and then Africa is also coming up to around 12% from what was prior higher than 11%.

Yeah. Good morning, Thanks for joining in and absolutely all of those issues around the table, we look at our capital allocation every year, certainly and I would say even more frequently than that and then the idea and the approach is to make the best decisions. We can to support long term total shareholder return.

The increase in cost of capital the increase in interest rates as well as other factors affecting our markets around the globe are those all play into how much capital we will be deploying how many build to suits will be executing on and where those will be so that certainly comes into play I won't get.

David Barden: A couple of things that I was saying terms of the stayability or the durability of some of that growth. Certainly in the US, it's a nice strong performance. There is a little bit of delay churn so we can expect to see that hit next year. Other than that, the US is very steady in terms of the demand. Part of that is because of the way the contracts we have work out. When you think of Latin America, we do have higher levels of churn this year than we have it had in prior years.

A lot of detail in terms of decision, making there I would just maybe highlight again that capital. This year is lower than it was last year and the.

<unk> and interest rates in particular.

There's still a fair amount of uncertainty. So we will be continuing to kind of look at that capital plan to decide if putting the capital into build to suits around the globe is better than some of the other options, we have and a continuation of capital reductions is probably what youll end up seeing in this environment, that's kind of where we're we're looking at the other part of your question is.

David Barden: Some of the outperformance is churn driven. So when you think about the Latin overperformance, it's really a delay in churn and probably not all that durable from that perspective. When you get into APAC, it's a similar situation. The increase there is delayed churn, maybe some delayed discounts. Europe is staying in line. In Africa, we're seeing higher levels of new business activity. So much of that is in fact durable in lasting. That's the way I would articulate that.

Absolutely, we look at putting capital into places that primarily.

Or specifically drive and aligned with our priorities. So when you think about us focused on organic growth over the long term. We're focused on quality of earnings we're focused on on operational efficiencies and driving balance sheet strength all of the different ways that we can execute.

David Barden: And then maybe on the second question, if you could just repeat the question about the dilution just so I get it right. Hey, yeah, Rod, so thank you. So I think we were just trying to, and thank you for those comments, that's helpful on the pieces part. The, you know, just the India right down, you know, would seem to suggest that the BITF spread between what maybe AMT hopes to, you know, accomplish an evaluation standpoint and what's been offered has kind of collapsed down to the offer.

Achieving those goals are in play if that means allocating more capital to higher quality markets versus emerging markets or vice versa. If it means putting less into capex and more into debt reduction if it means reducing the growth of the dividend and putting more towards balance sheet and debt reduction we think about those things all the time and.

David Barden: It's either the spread and, you know, is that the right interpretation or reading through that right, that right down. And then obviously, you know, we're all attempting to, to evaluate what the delusion effect for the sale might be in 2024. It's any more color on, you know, whether it's a full divestiture or a 50% divestiture and kind of timetable would help us kind of do that math. Thank you. Yep, yeah, that's, that's good David.

It plays into our capital allocation and it will next year as well and we'll lay out what that will mean in February.

Alright, great. Thanks, and then just just one follow up question.

Latin America, you've talked about some delayed churn in that in that business. So maybe you could just kind of walk us through the cadence of when that you expect that churn to kind of layer through and when you may be on the other side of it and then and then obviously it seems like given a pretty big reduction in inflation in some of those markets like Brazil, which seem to seem like the CPI linked escalators will be a bit of a head.

David Barden: Thank you. So we're, you know, we're making good progress with the, with the strategic review that we've set out in terms of the right now. We are writing the India business down about 322 million dollars. It sets the book value in around 2.2 billion or so. And as I stated in my prepare remarks, it really is based on our internal impairment review analysis. This kind of cash flow driven and certainly cost of capital plays a significant role in that.

At least into next year. So maybe just talk about some of the some of the moving pieces in the growth outlook there.

Yeah, a couple of things that I would highlight.

Highlight relative to the Latam market I mean in 2022, we had roughly 5% churn that was part of embedded in our organic tenant billings growth in Q3, <unk> was $5 two so pretty consistent for the full year of 23, we're projecting that to be around 6%. So that's what's driving when we say elevated churn.

David Barden: But also as I highlighted in my comments, it, it does also consider indications of value that we've determined throughout the process. So I think you can understand what that means and it'll help you kind of think about where things might sit. We've also provided a little bit more breakout on, on the India financials and some of the, in the back of the presentation, which you'll see. But in terms of revenue, you know, we're a little over a billion evitats, about 355 million unleavened FFOs, about 290.

That's exactly.

Kind of what we're seeing there we are seeing delays in churn much of that is tied to the oil.

Oil churn that we're experiencing and will continue to experience.

Down in Brazil, we also see churn from Telefonica.

And Mexico those are kind of the two primary places where where we see chart. We've laid out a lot of the different pieces of the old churn.

David Barden: So that gives you a little bit more information to kind of piece through and kind of assume where we may, where we may head. I don't want to get into too much direct guidance. We'll certainly lay that out when we complete our strategic review, which the good news is we're happy with the way the process is evolving. We're confident we'll be concluding it this year just as we've previously mentioned. Once we do, we'll let the investors know exactly what we've concluded and what we, what we plan to do there.

I won't do that again here, but I would say, we do expect elevated churn to continue into next year I think youre absolutely right in terms of when inflation moderates and some of these markets that will potentially lower the the organic tenant billings growth from that perspective as well.

So we'll be watching all of those issues I think when it comes to Latam.

David Barden: We've said that our goal and we're on track to achieve our goals, which is to sell a majority equity stake to a financial investor. We've said between 51 and 100%. The reality is it's probably going to be a majority stake. We probably will retain a stake. So it'll be somewhere between that 61 and 100. That's, that's where we're, we're kind of directing the process at this point. But again, we are confident that the process will conclude in the next couple of months. And when it does, we'll let the investors know exactly what we've done. Thanks so much guys. Appreciate it. Good luck everybody. Thanks.

We'll be watching the churn as we go into next year I can't tell you yet.

We're beyond the peak here because of this churn that was delayed and potentially pushed in to next year, but over the next couple of years Latam because of the reduction in inflation that could happen and the elevated churn we could be in the low single digits in terms of organic tenant billings growth as we head into next year.

Okay, great. Thank you Rob appreciate it Youre welcome.

Yes.

And next we can go to Nick del Deo with Moffat Nathanson. Please go ahead.

Hey, Thanks for taking my questions and.

First of all I want to Echo others' comments and congratulate both Tom and Steve on the on the upcoming changes alright. Thank you sure.

Rick Prentiss: And next, we'll move to Rick Prenis with Raymond James. Please go ahead. Thank you very much. I'll echo the bellhead. Thanks for the memory, Tom. It's been a great working with you. I think we went to the first Mayree, like four years ago. Absolutely. He set up the table for us at the Mayree conference. Rick, I remember that. That's what we've been working with you in the past and we'll look forward to the new year all. Thanks Rick.

Tom just following up on the technology outlook you shared is there any reason to believe that.

The combination of the volume of spectrum that the carriers have been able to deploy.

And the capacity improvements enabled by <unk> and massive mimo are going to allow them to stretch out their five G upgrades over a longer period of time that may have been the case in the past I think what you call. The harvest phase of the fiber deployment. What do you think those the impact of those improvements are are just comparable to what we've seen in the past with other technology upgrades.

Rodney Smith: One could back to the dividend question from a couple of different angles as well. Rod, I think you mentioned $6.45 a share approximately. Current dividend announcing didn't paint shortly. We can apply a little bit higher than that $6.48 or we think it's in that range or $6.45 more we should be thinking about. Yeah, I think at this point think about it being flat year on year. So of course, every quarter we get the dividend approved by the board.

But my sense is that they're more comparable with what we've seen in prior upgrades. Yeah. Yeah. There are bigger swaps of spectrum in the market today that that all of our customers are deploying particularly in the mid band, but the demand is disproportionate to what we've seen in the past. So my sense is that given the demand and the additional kind of usage that.

Rodney Smith: But our intention is to hold the dividend flat annually year over year to help support. Deleveraging balance sheet strength and ultimately AFFO growth as well as total shareholder returns. I appreciate comments that we're going to kind of decouple from AFFO and make it more related to the rate tax rate than it sounds like as well. But implicitly that isn't also the fact that the India sale is anticipated and that also kind of effect with the dividend might have been prior thoughts.

We would expect over the next several years it'll be very rarely very very consistent.

The data intensity that I, even talked about with regards to <unk>.

Adding certain levels of video usage is is really going to eat into a lot of that spectrum capacity that is out there. So as I said there is definitely more spectrum out there definitely more in the mid band but.

But I would expect that the usage that we will see and experience over the next several years.

Rodney Smith: Yeah, I guess Rick, I would say that's not that's not correct. The India businesses in our in our read at this point so it really doesn't drive into the re taxable income issue. I think Tom articulated all the drivers with that which it's really this is a this is a management decision and certainly supported by our board to prioritize capital to prioritize. Deleveraging and balance sheet strength. It's not impacted by the India process at all.

We'll put it on the same path as what we've seen in <unk> and forging.

Okay, Okay, and then maybe for Rod.

Kind of a follow up question on the dividend outlook.

You noted that come 2025, we should start to see the dividend grow at.

Kind of in line with taxable income I think historically, you would outline as sort of a 10% expectation.

We think of your likely taxable income growth has been in that zone.

Rodney Smith: And Tom highlighted you know there are certain rules that allow one time items and some pre tax earnings to be moved from one period to another. So there have been times in the past where we've been over under under distributed and we can move some of that over or under distribution back and forth from year to year which is which is helpful. So in this case it really is a decision to drive balance sheet strength and using our capital in the best way we can again to drive total shareholder return in the short term in the long term. And in this in this market with uncertain interest rates going forward we think that's prudent and that's really the driving factor.

Or is it going to be sort of a different level or is it just too early to say.

Thank Nick it.

We'll have to watch kind of the trajectory of that of the REIT taxable income, but in general I think it's probably safe to assume that that will be in line.

With all material respects with our <unk> growth and <unk> per share growth, that's probably a safe way to kind of think about it it may not be exact all the time, but.

Given the given the fact that we can't predict the future certain and certainly we're not going to be guiding long term on that if you think about where our <unk> per share growth is going to be and you think about that being probably consistent with where our REIT taxable income growth might be and where the where the dividend growth could be that's <unk>.

Rodney Smith: Okay. And I'm interested through a small acquisition from AT&T slash SBC is talking about history lesson. Can you talk about what we've seen in the marketplace as far as multiples in the U.S. Europe and other places? Yeah Rick I would I mean let me highlight first that we don't see compelling M&A on our pipeline I think everyone kind of knows that I'll just reiterate that. We are seeing some things out there certainly there is a not as robust but there is a market in the U.S, with some smaller portfolios.

Probably the safest bet and I'd just highlight again, we do have a requirement to dividend out 90% of our REIT taxable income, we typically dividend out closer to a 100% because we think that's most beneficial to our shareholders from a tax.

Rodney Smith: And I don't want to get into a lot of detail in terms of what we see I think we still see very high prices even though they may have pulled back slightly from where they were let's say a year ago. And for that you know we still look at the small deals if we can find compelling ways to expand total shareholder return. We have a little flexibility there we don't see anything major but we also just see the majority of the deals are probably spilled priced a little higher than what today's cost of capital would suggest that they that they should be.

Perspective, so that's important to notice, but then as Tom mentioned there are other ways that we manage the dividend payout relative to REIT taxable income and Thats, where there is a little bit more discretion on our end to try to match it up to <unk> growth. So that's probably the way to think about it think about what our <unk> growth is going to be over the long term what are <unk>.

<unk> per share growth is going to be in a dividend growth very well may align with that but with that said, we will be considering capital allocation and and.

And the best uses of capital for our shareholders.

Each and every year and each and every quarter and the dividends specifically as approved by our board each year.

In each quarter.

Okay. Okay. That's great. Thank you Rod and can I just one one quick clarification on the one time revenue benefits you called out it.

Rodney Smith: The small acquisition you see in our numbers is really just a buy out of the prior SBC sub. Police, which you'll be familiar with. There was a small trance. Okay, okay. Is that some of the final purchase options stuff as well? Yeah, that's exactly what it is. It's not the final one. It's just another trance and that'll continue for a few more years. It's not really up to where we thought it would be or maybe that someone else wants to pay more, given the private versus private multiples.

It looks like other was elevated in the U S in the quarter.

That's really the sprint payments and any other one timers that you would that you would call out or be able to describe to us. The only thing. It is really in the settlement area I mean, we had about.

I think it was about $50 million in settlements this quarter last year same quarter. It was much lower more in the $15 million range, there's a customer equipment removal settlement in the U S that was pulled forward from.

The fourth quarter into the third quarter that was probably in the range of 25 million.

So, but those are really the items. It's the one time items that settlement fees, we get some small settlement fees or what are other international markets and the timing of those can be.

Rodney Smith: Yeah, I would say, we routinely review the portfolio performance across our business globally. We do that from a couple of perspectives. One is that it could be capital recycling opportunities, which we think could be very good for our shareholders over the long term. That's certainly the decisions we saw driving our exit from the Mexico fiber business. It also was what is driving our consideration around what we're doing in India. So I highlight that.

Somewhat bumpy one thing you'll see from our guide is those settlement fees those onetime items do drop off pretty substantially in Q4. So that's one of the things you can think about when you look at the bridge from Q3 to Q4 in terms of our <unk> there'll be a non recurrence of close to $40 million to $45 million of those onetime items.

Okay, great. Thank you so much.

Rodney Smith: I don't want to get into specific other places where we might be looking, but we are looking at our portfolio and it's something we do constantly. The other thing we do is we constantly look at our capital deployments. And from that perspective, we can throttle those back are up depending on where the opportunities are. We can also reallocate or redistribute that capital to where we feel that investments will most will be most aligned with our priorities of driving organic growth in the short term and the long term quality of earnings and consistent, durable industry leading AFFO growth.

And next we'll go to <unk> Levi with UBS. Please go ahead.

Rodney Smith: And ultimately, total shield of return. So, you know, I wouldn't just look at whether or not we sell a business here or there, those would be kind of operational decisions as well as recycling capital, but also kind of our CAPEX programs. How much are we investing? Where are we investing? What kind of assets? And again, those decisions are made each and every year, really each and every quarter. And they are, they are meant to and do align with our priorities.

Great. Thank you comments to that Steve I wish you all the best as well.

Couple of quick follow ups.

Rob you mentioned that will and leverage at about 5253 at year end, where do you where do that where do you want that to be over the next year or two and and.

And we will give specific guidance next year, but just directionally do you expect <unk> to grow in 'twenty four assuming NDA sold at year end. Thank you.

Yeah, Hey body, a nice a nice hearing from you all hope you're well.

Yes. So we ended the quarter with five <unk> leverage is going to be a little higher than that at the end of the year, primarily driven because of those one time items on the on the EBITDA side, but our clear focus is to delever to reduce debt as well as reduce our exposure to floating rate debt by driving the percentage of our debt is exposed to floating rates.

We got that down to about.

11% or so our goal is to get to five times really as soon as we can and that's what we're focused on and that's what's driving a lot of our capital allocation decisions is is driving balance sheet strength.

Rodney Smith: Okay, thanks guys. Again, that's what she's everybody. Thanks, Regen.

Unknown Executive: And next, pardon me, next we go to neck, neck them with Deutsche Bank. Please go ahead. Hey guys, thank you for taking the question. Just too related to the US, maybe first on services. So it was a pretty sizable drop off. Maybe less surprising in terms of what's going on in the industry, but services revenue with like they dropped off in third quarter. Just wondering if you can share any color in terms of whether this is broad based or related to one or two customers in particular and how to think about sort of forward trajectory into 4Q.

And reducing leverage getting to that five dot O. As soon as we can so that is clearly the goal the goal will also.

And it's specifically for 2024, that's where we hope to get to.

And we're looking for all of the opportunities we can find to drive that and that could include reducing the capital program a little bit next year that certainly is in line with.

Unknown Executive: And then maybe on a somewhat related note in terms of color and amendment activity in the US. So 3Q held in relatively stable to what you saw on the first half. I think the implied number for 4Q is around 53 million just wondering whether you know that's sort of an appropriate run rate to consider into next year, whether we should anticipate sort of incremental moderations by virtue of just a broader law in the industry. Thanks.

With the dividend decision that you heard us articulate today Youll see that our SG&A is being held flat year over year, you'll see that our margins are expanding that's the result of a lot of global initiatives around operational efficiency to drive additional EBITDA in <unk> not only is that good for everyone. It also helps us get our leverage numbers down.

A little bit of provides a little bit more cash flow to reduce the debt. So those are all the pieces that were focused on.

Rodney Smith: Sure, I'll start out and then if you want to jump in right in terms of our service business, it's inherently a non-run rate business and that makes. I think it's difficult to predict. And you saw that in 2021 when we raised our guide material over a couple of quarters and we've seen that this year as we've seen a moderation activity. What I would say is because of our coverage of MLAs, that's not a direct read across to our property revenue because we are somewhat insulated from the peaks and valleys of activity with the customers on that.

The short answer is five times as soon as possible five times in 2024 would be great.

That's possible and we're driving towards that and we'll see if we can achieve it.

And then with <unk> I would absolutely say our portfolio.

Consistent with the way we've explained this up for.

<unk> is really well positioned for us for durable <unk> per share growth. This year that was interrupted primarily because of financing cost headwinds driven by interest rates additional shares that we issued for some of our prior acquisitions.

Rodney Smith: And it's too early to be giving guidance for 2024 and where we see the activity levels go in there. What I would just reiterate is this is consistent with what we've seen in other G's of activity and the carriers have an initial build phase that starts out with a kind of evaluate of activity and you'll see that moderate a little bit. We are seeing the capital spend moderate a bit but it's still settling at levels higher than it was in 4G.

And some minority interest that we that we have because of some of the private capital that we raised in certain parts of our business with our new <unk> <unk> per share outlook of around $9 79 were pretty much flat with where we were prior year. So we've been able to convert a 1% to 2% reduction in <unk> per share up to closer to flat.

Matt.

Is good but when you think about that number being flat and an 8% headwind from financing being embedded in it as well as a 2% headwind from vil short payments or the let's say the vil reserve of $75 million we made.

Rodney Smith: And even with our reduced expectations this year for our services business, it's still higher than it was at the same point in 4G. So we're very optimistic. The customers will continue to build throughout the cadence of this 5G build. There'll be a restart of that activity. We don't exactly when that's going to happen. And we'll get better guidance on that in February as we get more visibility into 2024. What those activity levels are going to be.

You adjust for those things the underlying core operating performance of the assets that we own around the globe are driving double digit growth.

Without those headwinds so we absolutely believe this business can drive growth over the long term and in 2020 for the things that we'll be watching that a potential interrupters would be any material volatility in FX. We don't know where rates will go rate uncertainty is something that we watch but absent those those.

Rodney Smith: And Matt, I'll just add a couple of data points. When you think about the co-location amendment additions this year, we're anticipating a number of around 230 million for the US. You recall last year we were around 150. We're at about 58 million this quarter and our guide anticipates a further reduction but still a number that's greater than 50 million in Q4. I wouldn't just take that Q4 number and annualize it. I think you're better off and we won't give guidance as Steve suggests until next year.

Sorts of items, we think the portfolio is well positioned to grow next year and over the long term.

Got it thank you.

Welcome.

And ladies and gentlemen, it does conclude our Q&A session for today I'll hand, the call back over to our team.

Great. Thank you everyone for joining today's call. If you have any other questions. Please feel free to reach out to me or the Investor Relations team have a great day.

Rodney Smith: But for modeling purposes, if you look at this year and last year and you split the difference, that's probably a safer place to put in your models today and then of course we'll guide in February and we'll be able to update that number. The only other thing I would say on services is the 140 million dollar number is still higher than the historical average for services. And we're continuing to maintain a very nice gross margin in that business at all levels.

And that does conclude the call for today. Thanks for your participation in peace and AT&T teleconference. You may now disconnect.

Sure.

Rodney Smith: So when we saw that go up to about 270 million, we were still in the 50s, low 50s, 53, 54% margins. As it tapered off a little bit to 140, we are able to drive up the margins based on the mix, the mix of the revenue and the way we service that revenue. So with a lower revenue, we're still able to mitigate some of that with higher margins, you know, in the upper 50s at this point. Appreciate it.

Yeah.

Okay.

Yeah.

Yeah.

Okay.

Okay.

Yeah.

Yeah.

Yeah.

Rodney Smith: Thank you both. And next we'll go to Eric Lupo with Wells Fargo. Please go ahead. Great. Thanks for, thanks for taking the question. Just a couple on capital allocations though. You know, given the recent increases in interest rates and cost of capital, I mean, it's an influence at all as you look into next year, kind of your build the suit ambitions internationally or. You know, is there any kind of valuation of maybe slowing that to reinvest in other areas and that can potentially be data centers where it seems like you've had really strong performance here to date seems like growth continues to ramp and you maybe need to allocate more capital to your data center business and how you kind of balance that versus other forms of shareholder return. That would be very helpful. Thank you.

Rodney Smith: Yeah, good morning, Eric. Thanks for joining in. And absolutely all those issues are on the table. We look at our capital allocation every year, certainly, and I would say even more frequently than that, and the the idea and the approach is to make the best decisions we can to support long-term, total-shoulder return. With the increase in cost to capital, the increase in interest rates, as well as other factors affecting our markets around the globe, those all play into how much capital we will be deploying, how money built the suits will be executing on, and where those will be.

Rodney Smith: So that certainly comes into play. I won't get into a lot of detail in terms of decision-making there. I would just maybe highlight again that capital this year is lower than it was last year, and the the environment and interest rates in particular, they're still a fair amount of uncertainty, so we will be continuing to kind of look at that capital plan to decide if putting the capital into built the suits around the globe is better.

We're sorry your conferences ending now please hang up.

Rodney Smith: Then some of the other options we have, and a continuation of capital reductions is probably what you'll end up seeing in this environment, that's kind of where we're looking at. The other part of the question is absolutely, we look at putting capital in the places that primarily or specifically drive and align with our priority. So when you think about us focused on organic growth over the long term, we're focused on quality of earnings, we're focused on operational efficiencies, and driving balance sheet strength, all of the different ways that we can execute on achieving those goals are in play.

Rodney Smith: If that means allocating more capital to higher quality markets versus emerging markets, or vice versa, if it means putting less into CapEx and more into debt reduction, if it means reducing the growth of the dividend and putting more towards balance sheet and debt reduction, we think about those things all the time and it plays into our capital allocation.

Rodney Smith: And it will next year as well, and we'll lay out what that will mean in February. Great.

Rodney Smith: Thanks, and just one follow-up question. You know, Latin America, you talked about some delayed churn in that business, and maybe you could just kind of walk us through the cadence of when that, you expect that churn to kind of layer through and when you may be on the other side of it. And then, and then obviously it seems like, you know, given a pretty big reduction in inflation and some of those market playing Brazil, which seem to seem like the CTI linked escalators will be a bit of a headwind, at least in the next year.

Rodney Smith: So maybe just talk about some of the some of the moving pieces in the growth outlook there. Thank you. Yeah, a couple of things that I would highlight relative to the Latin market. I mean, in 2022, we had, you know, roughly 5% turn that was part of embedded in our organic tendent billing growth. In Q3 here, it was 5.2, so pretty consistent. For the full year of 23, we're projecting that to be around 6%.

Rodney Smith: So that's what's driving when we say elevated churn, that's exactly kind of what we're seeing there. We are seeing delays in churn. Much of that is tied to the oil, the oil term that we're experiencing and will continue to experience down in Brazil. We also see churn from California up in Mexico. Those are kind of the two primary places where where we see churn. We've laid out a lot of the different pieces of the oil term.

Rodney Smith: You know, I won't do that again here, but I would say we do expect elevated churn to continue into next year. I think you're absolutely right in terms of when inflation moderates in some of these markets, that will potentially lower the organic tendent billing growth from that perspective as well. So we'll be watching all of those issues. I think when it comes to Latin, you know, we'll be watching the churn as we go into next year. I can't tell you yet that we're beyond the peak here because of this churn that was delayed and potentially pushed into next year.

Rodney Smith: But over the next couple of years, Latin, because of the reduction in inflation that could happen and the elevated churn, we could be in the low single digits in terms of organic kind of billings growth as we head into, of the next year.

Rodney Smith: Hey, great. Thank you, Rob. Appreciate it.

Unknown Executive: Welcome.

Nick Deo: And next, we can go to Nick Deo with Nathanson. Please go ahead. Hey, thanks for taking my questions.

Thomas Bartlett: And, you know, first of all, I want to echo others' comments and congratulate both Thomas and Steven on the upcoming changes. All right. Thank you. Sure. You know, Tom, just following up on the technology outlook you shared, is there any reason to believe that, you know, the combination of the volume of spectrum that the carriers have been able to deploy and the capacity improvements enabled by 5G and massive MIMO are going to allow them to stretch out their 5G upgrades over a longer period of time than may have been the case in the past.

Thomas Bartlett: I think what you call the harvest phase of the 5G deployment. Or do you think those, the impact of those improvements are just comparable to what we've seen in the past with other technology upgrades? You know, my sense is that they're more comparable with what we've seen in prior upgrades. Yeah, there are bigger sloths of spectrum in the market today that all of our customers are deploying, particularly in the midband. But the demand is proportionate to what we've seen in the past.

Thomas Bartlett: So my sense is that, given the demand and the additional kind of usage that we would expect over the next several years, it will be very, rarely very, very consistent. You know, the dated intensity that I even talked about with regards to, you know, adding certain levels of video usage is really going to eat into a lot of that spectrum capacity that is out there. So as I said, there is definitely more spectrum out there, definitely more in the midband. But I would expect that the usage that we will see and experience over the next several years will put it on the same path as what we've seen in 3G and 4G. Okay.

Rodney Smith: And then maybe for Rod, kind of a follow-up question on the dividend outlook, you know, you noted that come 2025, we should start to see the dividend grow at, you know, kind of in line with taxable income. I think, you know, historically, you had outlined sort of a 10% expectation. Should we think of your likely taxable income growth as being in that zone, or is it going to be sort of a different level, or is it just too early to say?

Rodney Smith: I think, Nick, it, you know, we'll have to watch kind of the trajectory of the, of the taxable income. But in general, I think it's probably safe for you to assume that that'll be in line with all material or respects with our AFFO growth and AFFO per share growth. That's probably a safe way to kind of think about it. It may not be exact all the time, but given the fact that we can't predict the future certain, and certainly we're not going to be guiding long term on that, if you think about where our AFFO and AFFO per share growth is going to be and you think about that being probably consistent with where a taxable income growth might be and where the, where the dividend growth could be, that's probably the safest bet.

Rodney Smith: And I just highlight again, we do have a requirement to dividend of 90% of our taxable income. We typically dividend close to 100% because we think that's most beneficial to our shareholders from a tax perspective. So that's important to notice. But then as Tom mentioned, there are other ways that we manage the dividend payout relative to reach taxable income. And that's where there is a little bit more discretion on RN to try to match it up to AFFO growth.

Rodney Smith: So that's probably the way to think about it. Think about what our AFFO growth is going to be over the long term. What our AFFO per share growth is going to be and a dividend growth very well may align with that. But with that said, we will be considering capital allocation and the best uses of capital for our shareholders each and every year and each and every quarter. And the dividend specifically is approved by our board, in each quarter. Okay, that's great, thank you, Rod.

Rodney Smith: Can I just one quick clarification on the one-time revenue benefits you called out? Looks like other was elevated in the US in the quarter. I think that's really disparate payments. Any other one-timers that you would call out or be able to describe to us? The only thing, it's really in the settlement area. I mean, we had about, I think it was about 50 million in settlements this quarter. Last year, same quarter, it was much lower, more than the 15 million arranged.

Rodney Smith: There's a customer equipment removals settlement in the US that was pulled forward from the fourth quarter and the third quarter. That was probably in the range of $25 million or so. But those are really the items. It's the one-time items at settlement fees. We get some small settlement fees throughout our other international markets in the timing of those can be somewhat bumpy. One thing you'll see from our guide is those settlement fees, those one-time items, do drop off pretty substantially in Q4.

Rodney Smith: So that's one of the things you can think about when you look at the bridge from Q3 to Q4. In terms of our AFFO, there'll be a non-recurrence of close to $40, $45 million or those one-time items. Okay, great.

Michael Levi: Thank you so much.

Michael Levi: Next, we'll go to Michael Levi with UBS. Please go ahead. Great.

Rodney Smith: Thank you, comments to Steve. I wish you all the best as well. Just a couple of quick follow-ups. Rod, you mentioned that we'll end leverage at about 5.2, 5.3 at the end. Where do you want that to be over the next year or two? And we will get specific guidance next year, but just directly. Do you expect AFFO to grow in 24 assuming India is sold at your end? Thank you. Hey, buddy.

Rodney Smith: Nice hearing from you. Hope you're well. Yeah, so we ended the quarter with 5.0 leverage. It's going to be a little higher than that at the end of the year, primarily driven because of those one-time items on the EBITAS side. But our clear focus is to give leverage or reduce debt as well as reduce our exposure to floating rate debt by driving the percentage of our debt that is exposed to floating rates.

Rodney Smith: And we got that down to about 11 percent or so. Our goal is to get to five times really as soon as we can. And that's what we're focused on. And that's what's driving a lot of our capital allocation decisions is is driving balance sheet strength and reducing leverage getting to that 5.0 as soon as we can. So that is is clearly the goal. The goal will also the goal and it's you know, it's specifically for 2024.

Rodney Smith: You know, that's where we hope to get to. And we're looking for all the opportunities we can find to drive that and that could include reducing the capital program a little bit next year. That certainly is in line with, you know, with the dividend decisions that you heard us articulate today. You'll see that our SGNA is being held flat year over year. You'll see that our margins are expanding. That's the result of a lot of global initiatives around operational efficiency to drive additional EBITAS and AFFO.

Rodney Smith: Not only is that good for everyone, it also helps us get our leverage numbers down a little bit. It provides a little bit more cash flow to reduce the debt. So those are all the pieces that were focused on the short answer is five times as soon as possible, five times in 2024 would be great. That's possible and we're driving towards that and we'll see if we, and we can achieve it.

Rodney Smith: And then with AFFO, I would absolutely say our portfolio, consistent with the way we've explained this for years, is really well positioned for durable AFFO per share growth. This year that was interrupted primarily because of financing cost, headwinds driven by interest rates, additional shares that we issued for some of our prior acquisitions, and some minority interest that we have. Because of some of the private capital that we raised in certain parts of our business, with our new AFFO per share outlook of around $9.79, we're pretty much flat with the way we were prior year.

Rodney Smith: So we've been able to convert a 1% to 2% reduction in AFFO, AFFO per share up to closer to flat, which is good. But when you think about that number being flat, and an 8% headwind from financing being embedded in it, as well as a 2% headwind from VIL short payments, so let's say the VIL reserve of 75 million we made, you know, you adjust for those things, the underlying core operating performance of the assets that we own around the globe are driving double digit growth without those headwinds.

Rodney Smith: So we absolutely believe this business can drive growth over the long term, and in 2024. The things that we'll be watching that potential, you know, interrupters would be any material volatility and FX, we don't know where rates will go, rate uncertainty is something that we watch. But after those sorts of items, we think to portfolio's well positioned to grow next year and over the long term. All right, thank you. You're welcome.

Unknown Executive: And ladies and gentlemen, does conclude our Q&A session for today. I'll hand the call back over to our team. Very, thank you, everyone, for joining today's call. If you have any other questions, please feel free to reach out to me or the investor relations team. Have a great day.

Unknown Executive: And that does conclude the call for today. Thanks for participation, and for using AT&T teleconference. You may now disconnect. You You You You You You You You You You We're sorry. Your conference is ending now.

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