Q4 2023 American Tower Corp Earnings Call

Yes.

Operator: Ladies and gentlemen, thank you for standing by. Welcome to the American Tower fourth quarter and full year 2023 earnings conference call. As a reminder, today's conference is being recorded. Following the prepared remarks, we will open the call for questions. If you'd like to ask a question, please 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.

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Speaker Change: Ladies and gentlemen, thank you for standing by welcome to the American Tower fourth quarter and full year 2023 earnings Conference call. As a reminder, today's conference is being recorded following the prepared remarks, we will open the call for questions if you'd like to ask a question. Please press one zero now.

Speaker Change: I would now like to turn the call over to your host Adam Smith Senior Vice President of Investor Relations. Please go ahead Sir.

Adam Smith: Good morning, and thank you for joining American Tower's fourth quarter and full year 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. I'm joined on the call today by Steve Vondran, our President and CEO, and Rod Smith, our Executive Vice President, CFO, and Treasurer.

Adam Smith: Good morning, and thank you for joining American towers fourth quarter and full year 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 Dot American tower dotcom.

Adam Smith: I'm joined on the call today by Steve Andre <unk>, our president and CEO and Rod Smith, our executive Vice President CFO and Treasurer. Following our prepared remarks, we will open up the call for your questions.

Adam Smith: Following our prepared remarks, we will open the call to 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 2024 outlook, capital allocation, and future operating performance; our expectations for the closing of the sale of our India business and the expected impacts of such sale on our business; collections expectations 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 and those that will be set forth in our upcoming Form 10-K for the year ended December 31st, 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 Steve. Thanks, Adam.

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

Examples of these statements include our expectations regarding future growth, including our 2024 outlook capital allocation and future operating performance.

Adam Smith: Our expectations for the closing of the sale of our India business.

Adam Smith: And the expected impacts of such sale on our business.

Adam Smith: Our collections expectations 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.

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

Adam Smith: Those that will be set forth in our upcoming Form 10-K for the year ended December 31, 2023 and in other filings, we make with the SEC.

Adam Smith: 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.

Adam Smith: With that I'll turn the call over to Steve.

Steven O. Vondran: And thanks to everyone for joining the call today. I'd like to start by saying it's an honor and a privilege to step into the role of CEO at American Tower. I want to thank Tom Bartlett for his leadership over the last 15 years of the company and congratulate him on an exceptional career. I certainly recognize I have big shoes to fill.

Steve Andre: Thanks, Adam and thanks to everyone for joining the call today I'd like to start by saying, it's an honor and a privilege to step into the role of CEO at American tower.

Steve Andre: Want to thank Tom Bartlett for his leadership over the last 15 years at the company and congratulate him on exceptional career.

Steve Andre: I certainly recognize I have big shoes to fill and to all of our stakeholders I look forward to continuing to build on the tremendous success, we've achieved together today.

Steven O. Vondran: And to all of our stakeholders, I look forward to continuing to build on the tremendous success we've achieved together today. In recent weeks, I've been telling many of our employees, customers, and investors that I'm more excited today by the opportunity ahead than I've been in my 20 plus years with the company. There are two key reasons for that.

Steve Andre: In recent weeks Ive been telling many of our employees customers and investors, but I'm more excited today about the opportunity ahead and I put in my 20 plus years with the company. There are two key reasons for that.

Steven O. Vondran: First, we're still in the early stages of a mobility and computing-driven technology wave that suggests distributed digital infrastructure is going to be in higher demand for the foreseeable future. Second, we spent the last two decades developing a leading global portfolio of real estate, power, and interconnection platforms that will serve as the core backbone of this. I believe we're now positioned to harvest the benefits of the scaled, differentiated tower and data center platforms we built to provide unique value for our customers and best-in-class growth, profitability, and returns for our investors. To deliver on that opportunity, we're going to be zeroing in on a few key areas in 2024 and beyond. To begin, we're committed to operating the highest quality portfolio.

Steve Andre: First we're still in the early stages of our mobility and computing driven technology wave does suggest distributed digital infrastructure is going to be a higher demand for the foreseeable future.

Steve Andre: Second we spent the last two decades, developing a leading global portfolio with real estate power and interconnection platforms that will serve as the core backbone of this wave.

I believe we're now positioned to harvest the benefits of the scaled differentiated tower in data center platforms. We've built to provide unique value for our customers and best in class growth profitability and returns for our investors to.

Steve Andre: To deliver on that opportunity, we're going to be zeroing in on a few key areas in 2024 and beyond.

Steve Andre: To begin we're committed to operating the highest quality portfolio. This means owning and investing in assets in the most attractive geographies or secular demand trends signaled the potential for long term sustained growth.

Steven O. Vondran: This means owning and investing in assets in the most attractive geographies where secular demand trends signal the potential for long-term sustainable growth. Equally important, it means securing business with market leaders, maintaining contract structures that maximize organic growth and minimize downside risks, as well as attracting and securing accretive development opportunities afforded by our in-market scale and leading operational capability. We saw the clear benefits of these factors play out in 2023.

Steve Andre: Equally as important it means securing new business with market leaders maintaining contract structures that maximize organic growth and minimize downside risks as well as attracting and securing accretive development opportunities afforded by our in market scale and leading operational capabilities.

Steve Andre: We saw the clear benefits of these factors play out in 2023, and our anchor U S and Canada tower business, the <unk> investment cycle and contributions from our comprehensive MLA as drove a record of roughly $230 million in Colocation and amendment growth.

Steven O. Vondran: In our anchor US and Canada tower business, the 5G investment cycle and contributions from our comprehensive MLAs drove a record of roughly $230 million in co-location and amendment growth. International performance was also driven by record organic new business growth contributions, and further supported by critical CPI-linked escalator terms and growth from our Build-A-Suite and Powers of Service programs. Furthermore, our differentiated core site interconnection business sought a second consecutive year of record-signing new business.

Steve Andre: International performance was also driven by record organic new business growth contributions and further supported by critical CPI linked escalator terms and growth from our build to suit empowers service programs.

Steve Andre: Furthermore, our differentiated course that interconnection business saw its second consecutive year of record signed new business.

Steven O. Vondran: Going forward, we're going to continue our focus on maximizing organic growth across our existing assets and complement that with incremental revenue generation through select development opportunities. At the same time, we'll continue to actively assess and challenge our prior capital allocation decisions to ensure the opportunity we see ahead across our global footprint is still supportive of our original underwriting thesis, and apply what we've learned over the last two decades to our deployment plans going forward. Ultimately, we're focused on operating a portfolio that provides the proper mix of risk exposure and can deliver high-quality sustained top-line growth supported by an operating structure that drives outsells rates of conversion to profitability and commands a premium in the market. That's a good segue into the next area of focus, which is delivering the most efficient global operating model centered around cost discipline, margin expansion, and increasing returns on invested capital.

Steve Andre: Going forward, we're going to continue our focus on maximizing organic growth across our existing asset and complement that with incremental revenue generation through select development opportunities.

Steve Andre: At the same time, we'll continue to actively assess and challenge our prior capital allocation decisions to ensure the opportunity. We see ahead across our global footprint is still supportive of our original underwriting thesis and apply what we've learned over the last two decades to our deployment plans going forward.

Steve Andre: Ultimately, we're focused on operating a portfolio that provides the proper mix of risk exposure and can deliver high quality sustained top line growth supported by an operating structure that drives outsized rates of conversion to profitability. It commands a premium in the market.

Steve Andre: That's a good segue into the next area of focus which is delivering the most efficient global operating model centered around cost discipline margin expansion and increasing returns on invested capital our global and regional scale and long operating track record present, an opportunity to further improve on the operating leverage inherent in the neutral host infrastructure.

Steven O. Vondran: Our global and regional scale and long operating track record present an opportunity to further improve on the operating leverage inherent in the neutral host infrastructure model. We're accelerating initiatives in our regional operations to bring down direct costs per site. We're also investing in the experimentation and implementation of AI applications and other technologies that create a more cost and time efficient equipment deployment cycle, bring greater precision and lower cost to our maintenance operations, and improve yields on renewable energy generation, just to name a few examples.

Steve Andre: Al.

We're accelerating initiatives our regional operations to bring down direct costs per site were also investing in experimentation and implementation of AI applications and other technologies that create a more cost and time efficient equipment deployment cycle bring greater precision and lower cost of our maintenance operations and improved yields on renewable energy generation.

Steve Andre: Just to name a few examples.

Steven O. Vondran: When it comes to our overhead costs, as you'll see in our 2024 guidance, we're targeting a reduction in SG&A, which combined with healthy top-line growth is supporting an 80 basis point reduction in cash SG&A as a percentage of property revenue and an approximately 200 basis point expansion in cash adjusted EBITDA margins since 2022. Continued improvement to our cost structure and driving profitability is going to be a cornerstone of our growth algorithm going forward. Next, and as we've highlighted on past calls, we're working today to further reinforce our balance sheet as a strategic asset. Our investment grade credit rating is at the core of our strategy, and that's not going to change. In fact, I believe market access and cost of capital advantages may be of even more strategic importance in this cycle than they were over the last decade.

Steve Andre: What it tells our overhead costs as you'll see in our 2024 guidance, we're targeting a reduction in SG&A, which combined with healthy top line growth is supporting an 80 basis point reduction in cash SG&A as a percentage of property revenue approximately 200 basis point expansion in cash adjusted EBITDA margin since 2022.

Steve Andre: Continued improvement to our cost structure and driving profitability is going to be a cornerstone of our growth algorithm going forward.

Steve Andre: Next and as we've highlighted on past calls we're working today to further reinforce our balance sheet as a strategic asset.

Steve Andre: Our investment grade credit rating is at the core of our strategy and that's not going to change in fact, I believe market access and cost of capital advantages, maybe it's even more strategic importance in this cycle than they were over the last decade.

Steven O. Vondran: As Robin will elaborate further, we made substantial progress towards strengthening the balance sheet in 2023. And as we look to 2024 and beyond, our capital allocation program is going to prioritize resiliency and flexibility in this evolving economic environment. Together with other strategic initiatives like reducing our overall capital intensity and executing on cost savings across the business, we will hold the dividend relatively flat in 2024, subject to vote approval. In turn, we'll prioritize a reduction to our gross debt balance and accelerate the pathway to achieving our net leverage target and enhance financial flexibility.

Steve Andre: As Rob will elaborate on further we made substantial progress towards strengthening the balance sheet in 2023, and as we look to 2024 and beyond our capital allocation program is going to prioritize resiliency and flexibility in this evolving economic environment.

Steve Andre: Together with other strategic initiatives like reducing our overall capital intensity and executing on cost savings across the business.

Steve Andre: We will hold the dividend relatively flat in 2024 subject to board approval.

Steve Andre: In turn we will prioritize a reduction to our gross debt balance an accelerated pathway to achieving our net leverage target and enhanced financial flexibility.

Steven O. Vondran: As we've highlighted in the past, while M&A is not a priority today, as a company, we want to be in a position of strength when and if strategically relevant portfolios that meet our investment criteria do come to the market. Through our internal CapEx program, we'll continue investing to expand our existing power and data center platforms by selecting the opportunities with the highest risk-adjusted rates of return. At American Tower, we've developed a unique ability to allocate capital between our U.S. and international tower businesses, as well as our U.S.-based core site platform. We see this as a distinct competitive advantage.

Steve Andre: As we've highlighted in the past while M&A is not a priority today as a company we want to be in a position of strength. When it is strategically relevant portfolios that meet our investment criteria do come to the market.

Steve Andre: And our internal Capex program, we'll continue investing to expand our existing tower and data center platforms by selecting the opportunities with the highest risk adjusted rates of return.

At American Tower, we have developed a unique ability to allocate capital between our U S and international tower businesses as well as our U S. Based core site platform, we see this as a distinct competitive advantage.

Steven O. Vondran: While we continue to view the tower business as the best model out there, the flexibility we're building into our CapEx program and the robust cash flow our assets generate allow us to be nimble and responsive to market conditions as we make capital allocation decisions over time, which in the near term means growing our exposure to developed markets. In our outlook for 2024, a larger share of our development capital is going toward the US and Europe, including expanding within our core site footprint, where the same demand trends that have resulted in two consecutive years of record new leasing are expected to drive stabilized returns in the mid-teens for ongoing development projects. We're balancing that with an expectation to build around 3,000 new tower sites, primarily in our international market. This does represent a decline in volumes compared to 2022 and 2023, particularly as we assess certain risks in our emerging market footprint, including the FX volatility we've seen recently in Africa.

Steve Andre: While we continue to view the tower business is the best model out there the flexibility we're building into our Capex program and our robust cash flow exodus generate allow us to be nimble and responsive to market conditions as we make capital allocation decisions over time.

Steve Andre: Which in the near term means growing our exposure to developed markets.

Steve Andre: Our outlook for 2020 for a larger share of our development capital is going towards the U S and Europe, including expanding within our core site footprint, where the same demand trends that have resulted in two consecutive years of record new leasing are expected to drive stabilized returns of the mid teens for ongoing development projects.

We're balancing that with an expectation of built around 3000, new tower sites, primarily in our international markets. This does represent a decline in volumes compared to 2022, and 2023, particularly as we assess certain risks in our emerging market footprint, including the FX volatility we've seen recently in Africa.

Steve Andre: However, I want to reiterate that we continue to see partnering with market leaders to grow our tower portfolio globally as a key component of our long term growth algorithm.

Steven O. Vondran: However, I want to reiterate that we continue to see partnering with market leaders to grow our tower portfolio globally as a key component of our long-term growth strategy. Simply put, the changes in the global macroeconomic environment we've seen over the last 24 months and our balance sheet priorities have raised the bar when it comes to required returns, and you're seeing discipline and flexibility reflected in the capital allocation expectations that we're rolling out for 2024. Finally, and foundational to our strategy, are the people throughout the global business.

Steve Andre: Simply put the changes in the global macroeconomic environment, we've seen over the last 24 months and our balance sheet priorities have raised the bar when it comes to required returns and you're seeing disappointment flexibility reflected in the capital allocation expectations that we're rolling out for 2024.

Steve Andre: Finally, and foundational to our strategy are the people throughout our global business everything I've talked about today hinges on the dedication and performance of our teams across the globe and the impact we can make for our customers investors and the communities we serve.

Speaker Change: <unk> been so impressed by the team's I've met with and heard from over recent weeks and we're going to continue strengthening our organization around the world and focus on developing attracting and rewarding the best talent in the industry.

Steven O. Vondran: Everything I've talked about today hinges on the dedication and performance of our teams across the globe and the impact we can make for our customers, investors, and the communities we serve. I've been so impressed by the teams I've met with and heard from in recent weeks, and we're going to continue strengthening our organization around the world and focus on developing, attracting, and rewarding the best talent in the industry. In closing, I want to reiterate my comments from the outset. I believe there is tremendous opportunity ahead for American Tower. Evolving technological trends continue to drive demand for more ubiquitous, dense, low-latency distributed networks.

Speaker Change: In closing I want to reiterate my comments from the outset I believe there's tremendous opportunity ahead for American tower.

Bobbing technology trends continue to drive demand for more ubiquitous dense low latency distributed networks against those trends were going to leverage our leading tower in data center platforms balance sheet strength capital allocation discipline and the dedicated teams that are supporting our global business to present, a truly differentiated value proposition.

Speaker Change: Selling growth and return opportunities for shareholders.

Speaker Change: With that I'll hand, the call over to Rob to discuss our 2023 results and 2020 for outlook.

Rob: Thanks, Steve Good morning, and thank you for joining today's call before I dive into our 2023 financial results and our expectations for 2024, I will highlight a few key achievements from the past year burst. We closed a successful 2023 with a strong fourth quarter exceeding our prior outlook mid points.

Rob: Against those trends, we're going to leverage our leading tower and data center platforms, balance sheet strength, capital allocation discipline, and the dedicated teams that are supporting our global business to present a truly differentiated value proposition and compelling growth and return opportunities for shareholders. With that, I'll hand the call over to Rob to discuss our 2023 results and 2024 outlook. Thanks, Steve.

Rob: Property revenue adjusted EBITDA in attributable <unk> per share with full year 2023 results comfortably, beating our initial guidance from a year ago for the year performance was anchored by continued demand for our diverse global asset portfolio, resulting in over 6% consolidated organic tenant billings growth in <unk>.

Rob: <unk> of over 300 basis points as compared to 2022, with our U S and Canada and international segments, each delivering record Colocation and amendment growth of roughly $230 million in nearly $150 million respectively. Additionally, we marked another record year of signed new business.

Rob: Good morning, and thank you for joining today's call. Before I dive into our 2023 financial results and our expectations for 2024, I will highlight a few key achievements from the past year. First, we closed a successful 2023 with a strong fourth quarter, exceeding our prior outlook midpoints across property revenue, adjusted EBITDA, and attributable AFFO per share, with full-year 2023 results comfortably beating our initial guidance from a year ago. For the year, performance was anchored by continued demand for our diverse global asset portfolio, resulting in over 6% consolidated organic tenant billings growth, an acceleration of over 300 basis points as With our U.S. and Canada and international segments each delivering record co-location and amendment growth of roughly $230 million and nearly $150 million, respectively. Additionally, we marked another record year of signed new business for CoreSight, supporting digital transformation across diverse workloads and emerging technologies, including, more recently, AI use cases.

Rob: Of course, like supporting digital transformation across diverse workloads in emerging technologies, including more recently AI use cases. Furthermore, our focus on cost management combined with the inherent operating leverage in the tower model and certain one time benefits resulted in attractive year over year cash adjusted EBITDA margin expansion.

Rob: I'll touch on in a moment.

Rob: Second we continued to strengthen our balance sheet through organic deleveraging and the successful issuance of approximately $7 billion in fixed rate debt as a result of our 2023 actions, we've extended our average maturity and reduced our exposure to floating rate debt of less than 11% of the total debts back down from over 22% at the start of the year.

Rob: Closing the fourth quarter with net leverage of five two times, we are on track to meet the upper end of our three to five times net leverage goal by the end of 2024. Finally, we concluded the strategic review of our India business earlier, this year, reaching a definitive agreement to sell 100% of ATC, India to Brookfield.

Rob: Which we will refer to as the India fail. We believe this transaction together with the Mexico fiber in Poland divestitures in 2023 enhances our global portfolio mix and risk profile and positions American tower for sustained high quality earnings growth over the long term now lets discuss.

Rob: Furthermore, our focus on cost management, combined with the inherent operating leverage in the tower model and certain one-time benefits, resulted in an attractive year-over-year cash-adjusted EBITDA margin expansion, which I'll touch on in a moment. Second, we continue to strengthen our balance sheet through organic deleveraging and the successful issuance of approximately $7 billion in fixed-rate debt. As a result of our 2023 actions, we've extended our average maturity and reduced our exposure to floating rate debt to less than 11% of the total debt stack, down from over 22% at the start of the year. Closing the fourth quarter with net leverage of 5.2 times, we are on track to meet the upper end of our three to five times net leverage goal by the end of 2024. Finally, we concluded the strategic review of our India business earlier this year, reaching a definitive agreement to sell 100% of ATC India to Brookfield, which we will refer to as the India sale.

Rob: The details of our full year 2023 results.

Rob: Turning to slide six full year consolidated property revenue growth was over 5% and nearly 7% on an FX neutral basis tenant billings growth was seven 2% with organic tenant billings growth of six 3% complemented by the construction of nearly 3200, new builds primarily in our international.

Rob: Markets.

Rob: In the United States, and Canada property revenue growth was over 4% with organic tenant billings growth of five 3% or six 6% excluding sprint churn our international property revenue grew by over 5%, including organic tenant billings growth of seven 7% with each segment meeting auryxia.

Rob: Leading our prior outlook. Additionally, in the fourth quarter, we were able to reverse approximately $38 million of prior revenue reserves associated with customer collections in India contributing to outperformance versus our prior outlook closing the year with a net revenue reserve associated with customer collections in India.

Rob: We believe this transaction, together with the Mexico Fiber and Poland divestitures in 2023, enhances our global portfolio mix and risk profile and positions American Tower for sustained high-quality earnings growth over the long term. Now, let's discuss the details of our full year 2023 results. Turning to slide six, full-year consolidated property revenue growth was over 5% and nearly 7% on an FX-neutral basis. Tenant billings growth was 7.2%, with organic tenant billings growth of 6.3%, complemented by the construction of nearly 3,200 new builds, primarily in our international market. In the United States and Canada, property revenue growth was over 4% with organic tenant billings growth of 5.3% or 6.6% excluding splint germ. Our international property revenue grew by over 5%, including organic tenant billings growth of 7.7%, with each segment meeting or exceeding our prior outlook. Additionally, in the fourth quarter, we were able to reverse approximately $38 million of prior revenue reserves associated with customer collections in India, contributing to outperformance versus our prior outlook and closing the year with a net revenue reserve associated with customer collections in India of approximately $28 million.

Rob: Of approximately $28 million.

Rob: Finally, our data center segment contributed approximately $835 million to our total property revenue in 2023, representing year over year growth of nearly 9% and as I mentioned earlier delivering another record year of signed new business.

Rob: Moving on adjusted EBITDA grew nearly 7% or around seven 5% on an FX neutral basis to over $7 billion on a consolidated.

Rob: 80 basis cash adjusted EBITA margins improved approximately 170 basis points year over year to 62, 3%, primarily driven by strong organic growth and certain one time benefits combined with a keen focus on cost management throughout the business with cash SG&A as a percent of total property revenue.

Rob: <unk> down over 30 basis points year over year to approximately 7%.

Rob: Moving to the right side of the slide attributable avid Mo and attributable <unk> per share grew by over 2% and 1% respectively.

Rob: Growth on a per share basis absorb negative impacts of approximately 7% in financing costs and another 1% from FX.

Rob: Finally, our data center segment contributed approximately $835 million to our total property revenue in 2023, representing year-over-year growth of nearly 9% and, as I mentioned earlier, delivering another record year of signed new business. Moving on, adjusted EBITDA grew nearly 7% or around 7.5% on an FX-neutral basis to over $7 billion. On a consolidated basis, cash adjusted EBITDA margins improved approximately 170 basis points year-over-year to 62.3%, primarily driven by strong organic growth and certain one-time benefits, combined with a keen focus on cost management throughout the business, with cash SG&A as a percent of total property revenue down over 30 basis points year-over-year to approximately 7%. Moving to the right side of the slide, attributable Growth on a per share basis absorbed negative impacts of approximately 7% in financing costs and another 1% from FX.

Now before I discuss the details of our outlook for 2024, I will start by summarizing a few key highlights and assumptions.

Rob: And as Steve mentioned, we are committed to owning and operating the highest quality portfolio supported by a strong balance sheet.

Rob: With that commitment in mind, we are focused on continuing to drive compelling organic growth across our diverse portfolio of assets, while maximizing the conversion of top line growth to profitability by taking costs out of the business.

Rob: Together with reducing our aggregate capital intensity for the second year in a row in maintaining a relatively flat dividend payout in 2024 as compared to 2023 subject to board approval. We believe these collective actions will maximize recurring cash flow growth.

Rob: Further strengthen our balance sheet and as a result accelerate our pathway to financial flexibility and Optionality, we will get into more detail shortly.

Rob: Next we are assuming a full year contribution of the India business in our outlook representing over $116 billion in property revenue $360 million of adjusted EBITDA and $285 million for Unlevered <unk> attributable to AMG common stockholders.

Rob: Now, before I discuss the details of our outlook for 2024, I will start by summarizing a few key highlights and assumptions. First, and as Steve mentioned, we are committed to owning and operating the highest quality portfolio, supported by a strong balance sheet. With that commitment in mind, we are focused on continuing to drive compelling organic growth across our diverse portfolio of assets, while maximizing the conversion of top-line growth to profitability by taking costs out of the business, together with reducing our aggregate capital intensity for the second year in a row and maintaining a relatively flat dividend payout in 2024 as compared to 2023, subject to board approval. We believe these collective actions will maximize recurring cashflow growth, further strengthen our balance sheet We'll get into more details shortly.

Rob: Upon closing of the India sale, which we anticipate occurring during the second half of 2024 subject to customary conditions and regulatory approval. We will then revise our outlook assumptions to incorporate the transaction for added transparency. We've included slide 20 in this earnings presentation, which shows the India.

Rob: So our outlook by quarter, assuming a potential closing on October one 2020 or for your reference we would anticipate a reduction of $295 million and $95 million to our presented outlook mid points for property revenue and adjusted EBITDA, respectively. Furthermore, we would estimate an approximate.

Rob: <unk> nine cent reduction to attributable <unk> per share, which assumes anticipated proceeds at closing are used to pay down existing indebtedness.

Rob: Also within the India segment, we have included approximately $65 million in incremental revenue reserves for the full year translating to a reduction of 14 two attributable <unk> per share. Although we are encouraged by the positive collection results realized in the second half of 2023, we believe it's prudent to take a concern.

Rob: Next, we are assuming a full-year contribution from the India business in our outlook, representing over $1.16 billion in property revenue, $360 million of adjusted EBITDA, and $285 million for unlevered AFFO attributable to AMT common stockholders upon the closing of the India sale, which we anticipate occurring during the second half of 2024, subject to customary conditions and regulatory approval. We will then revise our outlook assumptions to incorporate the transaction. For added transparency, we have included slide 20 in this earnings presentation, which shows the India contributions to our outlook by quarter. Assuming a potential closing on October 1st, 2024, for your reference, we would anticipate a reduction of $295 million and $95 million to our presented outlook midpoints for property revenue and adjusted EBITDA, respectively. Furthermore, we would estimate an approximately $0.09 reduction in attributable AFFO per share, which assumes anticipated proceeds at closing are used to pay down existing indebtedness.

Rob: Our review at this point in time. Additionally, we've assumed the forward rate curve to support our 2024 interest rate assumptions, including the cost of our floating rate debt and assumptions for refinancing our 2024 senior note maturities lastly on the FX side, our outlook reflects estimated negative.

Rob: Translational impacts of approximately $191 million on property revenue $132 million for adjusted EBITDA and $82 million per attributable asset Boe as compared to 2023 with that let's dive into the numbers.

Rob: Moving to the details on slide seven at the midpoint of our outlook. We expect total property revenue of over 11, 1 billion, representing an increase year over year of greater than 1% and 3% on an FX neutral basis. Our guide includes cash revenue growth of around $200 million in the U S and <unk>.

Rob: At a segment and $225 million of FX neutral growth in our international regions, Excluding pass throughs.

Rob: We also expect data centers to contribute roughly $80 million of growth in cash revenue in 2024, demonstrating nearly 10% growth year over year, excluding the impacts of straight line.

Rob: Also, within the India segment, we have included approximately $65 million in incremental revenue reserves for the full year, translating to a reduction of 14 cents to attributable AFFO per share. Although we are encouraged by the positive collection results realized in the second half of 2023, we believe it's prudent to take a conservative view at this point in time. Additionally, we've assumed the forward rate curve to support our 2024 interest rate assumptions, including the cost of our floating rate debt and assumptions for refinancing our 2024 senior note maturities.

Rob: <unk> revenue also includes an approximately $203 million step down in noncash straight line revenue or approximately 2% headwind to growth, partially offset by approximately $28 million increase in pass through lastly, as I mentioned in my earlier remarks, we anticipate an FX headwind.

Rob: Of nearly 2% or $191 million to consolidated property revenue growth.

Rob: Turning to slide eight we expect another solid year of organic growth contributions from our U S and Canada and international segments.

Rob: In the U S and Canada, we anticipate organic tenant billings growth of approximately four 7% or 6%. Excluding sprint churn. This expectation includes another healthy year of Colocation and amendment growth contributions of $180 million to $190 million, reflecting the expected.

Rob: Lastly, on the FX side, our outlook reflects estimated negative translational impacts of approximately $191 million on property revenue, $132 million for adjusted EBITDA, and $82 million for attributable AFFO as compared to 2023. With that, let's dive into the numbers. Moving to the details on slide seven, at the midpoint of our outlook, we expect total property revenue of over $11.1 billion, representing an increase year-over-year of greater than 1% and 3% on an FX-neutral basis. Our guide includes cash revenue growth of around $200 million in the U.S. and Canada segment and $225 million of FX-neutral growth in our international regions, excluding pass-through. We also expect data centers to contribute roughly $80 million of growth in cash revenue in 2024, demonstrating nearly 10% growth year-over-year, excluding the impacts of straight lines. Property revenue also includes an approximately $203 million step down in non-cash straight line revenue, or approximately 2% headwind to growth, partially offset by approximately $28 million increase in pass-through.

Rob: Stepped down from our record level of achievement in 2023, those still approximately 20% higher than our 2016 to 2022 average.

Internationally, starting with Africa, we expect the strong momentum from 2023 to continue with expected organic tenant billings growth of 11% to 12%. This includes Colocation and amendment contributions of approximately 7% along with escalator growth of 8% to 9%, partially offset by churn of around 4%.

Rob: <unk>, which would represent a notable year over year improvement after incurring the largest impacts from carrier consolidation in 2023.

Rob: Turning to Europe 2020 for organic tenant billings growth is expected to be 5% to 6% on the Colocation and amendment front, we anticipate growth of 3% to 4% an acceleration as compared to 2023, while growth from escalators stand at roughly 3% consistent with 2000.

Rob: Lastly, as I mentioned in my earlier remarks, we anticipate an FX headwind of nearly 2%, or $191 million, to consolidated property revenue growth. Turning to slide eight, we expect another solid year of organic growth contributions from our U.S. and Canada and international segments. In the U.S. and Canada, we anticipate organic tenant building growth of approximately 4.7% or 6% excluding sprint churn. This expectation includes another healthy year of co-location and amendment growth contributions of 180 million to 190 million, reflecting the expected step down from our record-level achievement in 2023, though still approximately 20% higher than our 2016 to 2022 average. Internationally, starting with Africa, we expect strong momentum from 2023 to continue, with expected organic tenant billings growth of 11 to 12 percent.

Rob: Twenty-three churn is expected to remain low at around 1%.

Rob: In Latin America, consistent with our previous messaging, we expect organic tenant billings growth to step down as compared to 2023 to approximately 2% for the year as churn will remain elevated at around 5% primarily due to Oi in Brazil churn is offset by relatively consistent.

Rob: Colocation and amendment activity of approximately 3% and contributions from escalators of approximately 4% finally in Asia Pacific We are guiding to approximately 2% organic tenant billings growth in 2024, including collocation and amendment growth of approximately three 5%.

Rob: Roughly two 5% from escalators and churn of around 4%.

Rob: Moving onto slide nine at the midpoint of our outlook, we expect adjusted EBITDA growth of less than 1% and approximately two 5% on an FX neutral basis, while absorbing a negative impact of over 3% associated with net straight line complementing.

Complementing the strong revenue growth trends I mentioned earlier, we're planning to reduce cash SG&A by approximately $30 million as compared to 2023 contributing to cash adjusted EBITDA margin expansion of around 30 basis points. Additionally, our outlook includes an expectation for approximately 17.

Rob: This includes co-location and amendment contributions of approximately seven percent, along with escalated growth of eight to nine percent, partially offset by churn of around four percent, which would represent a notable year-over-year improvement after incurring the largest impacts from carry consolidation in 2023. Turning to Europe, 2024 Organic Tenant Buildings growth is expected to be 5% to 6%. On the co-location and amendment front, we anticipate growth of 3% to 4%, an acceleration as compared to 2023. While growth from escalators stands at roughly 3%, consistent with 2023, churn is expected to remain low at around 1%.

Rob: Millions of dollars in year over year gross margin growth from our U S services business with the quarterly cadence, suggesting a ramp up in carrier activity in the second half of the year.

Rob: Turning to slide 10, we expect attributable <unk> per share to grow approximately 5% year over year to $10 33.

Rob: And approximately six 5% on an FX neutral basis.

Rob: Growth in cash adjusted EBITDA and a reduction in maintenance Capex is partially offset by an increase in financing costs and cash taxes.

Rob: Gather with higher minority interest adjustments due to growth in our European in datacenter Jv's.

Rob: In Latin America, consistent with our previous messaging, we expect Organic Tenant Buildings growth to step down as compared to 2023 to approximately 2% for the year, as churn will remain elevated at around 5%, primarily due to oil in Brazil. Churn is offset by relatively consistent co-location and amendment activity of approximately 3% and contributions from escalators of approximately 4%. Finally, in Asia Pacific, we are guiding to approximately 2% organic Tenant Building growth in 2024, including co-location and amendment growth of approximately 3.5%, roughly 2.5% from escalators, and churn of around 4%. Moving on to slide 9, at the midpoint of our outlook, we expect adjusted EBITDA growth of less than 1% and approximately 2.5% on an FX-neutral basis, while absorbing a negative impact of over 3% associated with net straight lines.

Speaker Change: Moving on to Slide 11, I'll review, our capital plans for 2024 in our balance sheet priorities for the upcoming year in 2024, and we will continue to focus on organic growth quality of earnings and operational efficiency, while prioritizing balance sheet strength, reducing risk and channeling discretionary spending in.

Speaker Change: The capital projects that supports sustainable earnings growth in yield the most attractive risk adjusted returns.

Speaker Change: Consistent with the messaging on our third quarter 2023 earnings call. The 2024 plan assumes maintaining an annual common dividend distribution of approximately $3 billion representing.

Speaker Change: A modest increase on an annual per share basis to $6 48 per share. We also expect to evenly distribute the dividend across each quarter of the year, which would suggest a onetime sequential step down from our fourth quarter 2023 declared dividend of $1 78 to one.

Rob: Complementing the strong revenue growth trends I mentioned earlier, we're planning to reduce cash SG&A by approximately $30 million as compared to 2023, contributing to cash-adjusted EBITDA margin expansion of around 30 basis points. Additionally, our outlook includes an expectation of approximately $17 million in year-over-year gross margin growth from our U.S. services business, with the quarterly cadence suggesting a ramp-up in carrier activity in Turning to slide 10, we expect attributable AFFO per share to grow approximately 5% year-over-year to $10.33, and approximately 6.5% on an FX-neutral basis.

Speaker Change: Dollars 62 in the first quarter of 2024, all subject to board approval in.

Speaker Change: In addition, we expect to deploy around $1 $6 billion in Capex of which 90% will be discretionary as Steve highlighted in his remarks, we view the flexibility of our capex deployments with options across a range of geographies and assets to be a distinct competitive advantage for American tower and our ability to.

Drive sustained attractive returns for our shareholders.

Speaker Change: In 2024, this means increasing our capex allocation and exposure towards our developed markets. This includes increasing development spend for existing core site data center campuses to $450 million as we seek to replenish the record capacity sold in 2022 and 2023.

Rob: Growth in cash-adjusted EBITDA and a reduction in maintenance CapEx is partially offset by an increase in financing costs and cash taxes, together with higher minority interest adjustments due to growth in our European and data-centered JVs. Moving on to slide 11, I'll review our capital plans for 2024 and our balance sheet priorities for the upcoming year. In 2024, we will continue to focus on organic growth, quality of earnings, and operational efficiency while prioritizing balance sheet strength, reducing risk, and channeling discretionary spending into capital projects that support sustainable earnings growth and yield the most attractive risk-adjusted returns, consistent with the messaging on our third-quarter 2023 earnings call. The 2024 plan assumes maintaining an annual common dividend distribution of approximately $3 billion, representing a modest increase on an annual per share basis to $6.48 per share.

Speaker Change: And maintain appropriate levels of sellable capacity, while continuing to drive attractive targeted stabilized yields in the mid teens.

Speaker Change: The balance of the development Capex spend will support another year of solid newbuild volumes internationally, which assumes the construction of 3000 sites at the midpoint.

Speaker Change: Moving to the right side of the slide and as I mentioned earlier, we made significant progress towards strengthening our balance sheet in 2023 through recurring business growth augmented with cost discipline and combined with the strategic management of our capital allocation plans, we anticipate meeting the upper end of our three to five times net leverage range.

Speaker Change: By year end.

Rob: We also expect to evenly distribute the dividend across each quarter of the year, which would suggest a one-time sequential step down from our fourth-quarter 2023 declared dividend of $1.70 to $1.62 in the first quarter of 2024, all subject to board approval. In addition, we expect to deploy around $1.6 billion in CapEx, of which 90% will be discretionary. As Steve highlighted in his remarks, we view the flexibility of our CapEx deployments with options across a range of geographies and assets to be a distinct competitive advantage for American Tower and our ability to drive sustained attractive returns for our shareholders. In 2024, this means increasing our CapEx allocation and exposure to our developed markets. This includes increasing development spend for existing core site data center campuses to $450 million as we seek to replenish the record capacity sold in 2022 and 2023 and maintain appropriate levels of sellable capacity while continuing to drive attractive targeted stabilized yields in the mid-teens. The balance of the development CapEx spend will support another year of solid new build volumes internationally, which assumes the construction of 3,000 sites at the midpoint.

Speaker Change: Our steadfast commitment to maintaining an investment grade credit rating and enhancing our balance sheet strength and financial flexibility remains unchanged.

Speaker Change: Turning to slide 12, and in summary, our global business continued to demonstrate solid core growth and resiliency in 2023 augmented by strategic initiatives aimed at enhancing our quality of earnings driving operational efficiency and strengthening our already strong balance sheet, we believe successful execution.

Speaker Change: These initiatives provide a strong foundation for 2024 and enhances our position as a leader in the global communications infrastructure industry looking.

Speaker Change: Looking ahead, we are well positioned to capitalize on opportunities adapt to challenges and deliver compelling risk adjusted returns to our shareholders for years to come.

Speaker Change: With that operator, we can open up the line for questions.

Speaker Change: As a reminder, if you'd like to ask a question. Please press one then zero.

Speaker Change: Your first question comes from the line of Simon Flannery from Morgan Stanley. Please go ahead.

Simon Flannery: Great. Thank you very much good morning, I'm, Steve Congrats on the new role on the very best for that I. Appreciate the initial comments on your priorities I wanted to come back to this the highest quality portfolio of point that you were making.

Simon Flannery: Is there some sort of review process, where youre sort of formally going through each of the markets I'm just looking at what fits and what doesn't and what do you want to do about that or is it more kind of investing more in these developed markets I mean, any color around that and I'm thinking about markets like Nigeria, where we've obviously had a challenging FX environment here, how do you think about <unk>.

Rob: Moving to the right side of the slide, and as I mentioned earlier, we made significant progress towards strengthening our balance sheet in 2023. Through recurring business growth, augmented with cost discipline, and combined with the strategic management of our capital allocation plans, we anticipate meeting the upper end of our three to five times net leverage range by year end. Our steadfast commitment to maintaining an investment-grade credit rating and enhancing our balance sheet strength and financial flexibility remains unchanged.

Simon Flannery: Some of those.

Simon Flannery: More challenged markets in the near and medium term and then you mentioned datacenter several times in your comments.

Rob: Turning to slide 12, and in summary, our global business continued to demonstrate solid core growth and resiliency in 2023, augmented by strategic initiatives aimed at enhancing our quality of earnings, driving operational efficiency, and strengthening our already strong balance sheet. We believe successful execution of these initiatives provides a strong foundation for 2024 and enhances our position as a leader in the global communications infrastructure industry. Looking ahead, we are well positioned to capitalize on opportunities, adapt to challenges, and deliver compelling risk-adjusted returns to our shareholders for years to come. With that, Operator, we can open up the line to questions. As a reminder, if you'd like to ask a question, please press 1 and 0. Your first question comes from the line of Simon Flannery from Morgan Stanley. Please go ahead.

Simon Flannery: Comments I know that Rod noted the Capex was going up here, how are you thinking beyond the existing campuses either domestically or internationally, certainly a huge opportunity in that business and again, a business where scale really matters.

Sure well thanks, Simon Thanks for the good wishes there.

Speaker Change: I'll take the other couple of pieces here, so I'll start out with what do we mean by the highest quality portfolio.

Rod Smith: What we mean by that is we're constantly reassessing all of our portfolios both domestically and abroad.

Rod Smith: Re challenging all the decisions, we made about capital allocation in the past to say that there's still meet our investment criteria.

Rod Smith: And if there's a challenge in our business. Our first choice is to say what can we do to fix that how can we get it to meet those criteria and then the second thing when you look at his ongoing capital allocation and is it a market or a business. We want to continue to put capital into so when we talk about.

Simon Flannery: Great. Thank you very much. Good morning.

Steven O. Vondran: And, Steve, congratulations on the new role and the very best for that. I appreciate your initial comments on your priorities. I wanted to come back to this highest quality portfolio point that you were making. Is there some sort of review process where you're sort of formally going through each of the markets and just looking at what fits and what doesn't and what you want to do about that? Or is it more a case of investing more in these developed markets, any color around that? And I'm thinking about markets like Nigeria, where we've obviously had a challenging FX environment here. How do you think about some of those more challenged markets in the near and medium term? And then you mentioned data centers several times in your comments.

Rod Smith: Best quality portfolio and what we're saying is that we continue to look at that refine our.

Rod Smith: Our assumptions there.

Rod Smith: And I did mention in my comments.

Rod Smith: If you look at a market like Nigeria.

Rod Smith: Macroeconomic conditions, including some of the FX translation issues have caused us to raise the bar in terms of required returns. So when we talk about the portfolio. We're looking at.

Rod Smith: The market the asset class the demand for the assets the contract structures, we have in place what types of contractual protections, we can get for something like an FX devaluation.

Rod Smith: We're shaping the portfolio for that.

Steven O. Vondran: And I know that Rod noted the CapEx is going up here. How are you thinking beyond the existing campuses, either domestically or internationally? A huge opportunity in that business and, again, a business where scale really matters. Thanks. Sure. Well, thanks, Simon. Thanks for the good wishes.

Rod Smith: You said that there's nothing to report beyond what we've already talked about in terms of.

Rod Smith: The strategic review, we do in India, we've been.

Rod Smith: Very clear that we're going to exit that market.

Rod Smith: Good exit Poland, because it wasn't to scale for us and we did choose to exit Mexico fiber and we'll continue to look at those those other businesses that we have and make assessments on those but theres nothing I would point to today to say that we're going to make any portfolio changes.

Steven O. Vondran: I'll take a couple of pieces here, so I'll start out with what we mean by the highest quality. And what we mean by that is we're constantly reassessing all of our portfolios, both domestically and abroad. Re-examining all the decisions we made about capital allocation in the past to say, do they still meet our investment... And if there's a challenge in a business, our first choice is to say, what can we do to... How can we get it? And then the second thing we would look at is ongoing capital allocation. Is it a market or a business? When we talk about it,

Rod Smith:

Rod Smith: The second question I think you asked was how do we think about a market like Nigeria.

Rod Smith: And we believe that the emerging market.

Rod Smith: Portfolio is still an important part of our growth algorithm going forward and we think that having the appropriate level of risk there to complement our developed market strategy.

Rod Smith: We will continue to allow us to elongate our growth curve over time there.

Rod Smith: We are mindful that there are some near term challenges that we're seeing there and youre seeing that play out in some of our capital allocation decisions as we are rotating some of our discretionary capex towards developed markets versus emerging markets.

Rod Smith: You've also seen that play out in recent years with some of the acquisitions we've done.

Rod Smith: Inside in the U S of course.

Steven O. Vondran: Best Quality Portfolio, what we're saying is... We continue to look at that, refine our... and I did mention in my comments that if you look at a market like Nigeria... Macroeconomic conditions, including some of the FX translations, have caused us to raise the bar in terms of required... So when we talk about that portfolio, we're looking at the market, the asset class, the demand for the assets, the contract structures we have in place, what types of... evaluation, and we're shaping the portfolio. Having said that, there's nothing to report beyond what we've already talked about internally.

Rod Smith: <unk> tells us in Europe.

Rod Smith: Those all had the effect of reducing our emerging market exposure divesting, India will reduce our emerging market exposure. If we continue to allocate more of our development capex.

Rod Smith: Developed markets versus emerging markets that will also decrease our emerging market exposure.

Rod Smith: What you're essentially seeing play out there is rebalancing our portfolio a little bit.

Rod Smith: So the macroeconomic conditions that we're seeing which we think is the appropriate thing to do in any environment is to look at the portfolio rebalancing and so that leads back into the highest quality portfolio.

Rod Smith: The second question I think you had was around core side and what are what are we focused on there.

Rod Smith: Right now most of our development Capex is focused on expanding our existing campuses.

Rod Smith: If you look at how that that.

Rod Smith: That business has performed we've had two years of record leasing.

Steven O. Vondran: The review, we do it on NDS, did exit Poland because... And we'll continue to look at the and other businesses that we have in those, but there's nothing I'm going to point to today that's... The second question I think you asked was, how do we think about a market like this? And, you know, we believe that the emerging markets... portfolio is still an important part of our growth algorithm going forward. We think that having the appropriate level of risk there to complement our development... to you, to allow us to elongate our. We are mindful that there are some near-term challenges that we're seeing there, and you're seeing that play out in some of our capital outlets, such as some of our discretionary captains who are emerging.

Rod Smith: And we need to replenish.

<unk> that we have sold in those campuses.

Rod Smith: And.

Rod Smith: It's a very good use of our capital again, we're looking at stabilized returns in the mid teens.

Rod Smith: And if you think about.

Rod Smith: Projects, we have under development.

Rod Smith: There are more than 40% pre leased as of the end of the year.

Rod Smith: And so when you think about that business pre leasing is something that wasn't as prevalent in core site.

Rod Smith: Pre acquisition and that pre leasing really reduces the risk of all that development and it shortens the time period that it takes to get to those stabilized mid teens returns and so thats why youre seeing us pick up the investment there a bit.

Rod Smith: We do evaluate.

Rod Smith: Some tier two markets in the U S. You saw us.

Rod Smith: By a small data center in Miami.

Rod Smith: And we'll continue to look at whether there are sort of tuck ins that we might want to do in the U S. If we have an anchor tenant that's going to give us.

Steven O. Vondran: You've also seen that play out in recent years, with an Inside in the U.S. Coresight, in Europe, and those all have the effect of reducing our emerging market expansion. Investing in India, If we continue to allocate more of our development capital to that, that will, So what you're essentially seeing play out there is us rebalancing our portfolio a little bit in response to the Macri crisis, for the group. Good evening, everyone. Look at the portfolio. So that leads back into that hospital.

Rod Smith: A good return going into it and if we think it can turn into a more material campus force later on but it's not a huge priority for us we're not going to see us put a lot of capital into that and with respect to international expansion in data centers.

Rod Smith: Something we're leaning into at this point.

Rod Smith: We do have customers that would love for us to have a larger footprint than we do today and they will consider those opportunities, but there's nothing that I would point to today to say that we're going to do anything outside of the U S. In the near term.

Speaker Change: Hey, sorry, maybe I would complement complement Steve's comments on Nigeria, just briefly here, but just as a reminder, I know you know this but for others in Nigeria. We also look to protect ourselves in the contract structures that Steve mentioned, so just as a reminder, we've got about $400 million in revenue property revenue in Nigeria 40 per.

Steven O. Vondran: The second question I think you had was around courses, what are we? Right now, most of our development capital ex... experiment. And if you look at how that business has performed, we've had two years of very good use of our capital. Again, we're looking at stabilized returns in the mid-single digits, and if you think about the projects we have under development, more than 40% pre-leave. So when you think about that business... Pre-leasing is something that wasn't as prevalent, of course, pre-election. And that pre-leasing really reduces the risk of all that development, and it shortens the time period. So that's why you're seeing this ticket.

Speaker Change: <unk> of that is actually passed through much of that is power, which is pegged to the U S pricing. So we avoid the FX risk.

Speaker Change: On those pass through numbers, 60% of that $400 million roughly is the is the leasing revenue and 50% of that adjusts annually pegged to the U S. Dollar so again that's protected.

Steven O. Vondran: We do evaluate some Tier 2 markets in the U.S. You saw... by a small data center. I'm looking to you to look at whether there are, So these are the sort of tuck-ins that we might want to do in the U.S. if we have a tenant that's going to give a good return going into it, and if we think it can turn into a more material investment, but it's not a huge priority for us. Capital into that, and with respect to international expansion and data, That's not something we're leaning into. We do have customers that would love for us to have a larger footprint than we do today, and we'll consider those opportunities, but there's nothing that I would point to today to say that, Hey Simon, maybe I would compliment Steve's comments on Nigeria just briefly here. But just as a reminder, I know you know this, but for others, in Nigeria, we also look to protect ourselves and the contract structure, mentioned so. Just as a reminder, we've got about $400 million in revenue from property in Nigeria. Forty percent of that is actually passed through.

Speaker Change: Our sheltered from the FX volatility that leaves about 30% of the revenue in Nigeria, that's actually directly exposed to the FX fluctuations.

Speaker Change: Now with that said of course, we build the Fisher effect into our models, we look for risk adjusted rates of returns although in the short term FX can be volatile, we do think our underwriting process.

Speaker Change: The FX volatility that would be in a market like Nigeria and others over the long term.

Speaker Change: Alright, Thanks, a lot.

Speaker Change: Your next question comes from the line of Michael Rollins from Citi. Please go ahead.

Thanks, Good morning, and congrats again, Steve on the official transition to topics.

Michael I. Rollins: Are you. This morning first can you share an update on the domestic leasing environment as to whether or not youre seeing any changes in the activity levels. Early this year and can you share some of the data points and development that are contributing to the decision to include improving carrier activity during the second.

Rod: Much of that is power, which is pegged to U.S. prices, so we avoid the FX risk on the... on those past certain. 60% of that 400 million roughly is the leasing revenue, and 50% of that adjusts annually pegged to the U.S. dollar. So again, that's protected or sheltered from the FCC.

Michael Rollins: Half.

Michael Rollins: Within your services guidance.

Michael Rollins: And then just a second topic what is the roadmap for the Latam portfolio to normalized level of organic growth.

Michael Rollins: How long does it take to get there and what is that level of organic growth that AMG can return to you.

Rod: Volatility. That leaves about 30% of the revenue in Nigeria that's directly exposed to the FX fluctuation. And then, with that said, of course, we build the Fisher effect into our models.

Michael Rollins: Sure.

Speaker Change: Thanks, Michael Thanks for the well wishes there.

Speaker Change: So I'll start with your first question about the U S.

So.

Speaker Change: We are predicting that our guidance for <unk> is approximately four 7%.

Rod: We look for risk-adjusted rates of returns, although in the short-term, FX can be volatile. We do think our underwriting process... Catches the FX volatility that would be in a market like Nigeria and others over the long term. Great, thanks a lot. Your next question comes from the line of Michael Rollins from Citi; please go ahead. Thanks, good morning, and congrats again, Steve, on the official transition. Topics for you this morning.

Speaker Change: And as you know that's underwritten largely by our comprehensive MLA as that we have with the carriers. So we have a degree of insulation from the variability that you see in the deployment cadence there.

Speaker Change: We do have one of our big three carrier in a ways that has rolled off of its comprehensive.

Speaker Change: A portion of that MLA and so that's gone to a little bit more of an all of the car so youll see that.

Speaker Change: That activity spread more throughout the year.

Speaker Change: Front end loaded like it would've been in a comprehensive agreement.

Speaker Change: What we're seeing from the carriers in the U S. Because we are seeing an uptick in the conversations around activity. We've seen a modest increase in application levels already this year and that's off a pretty low base at the end of last year, but we are seeing.

Michael I. Rollins: First, can you share an update on the domestic environment, as to whether or not you're seeing any change in Activity Levels early this year? And can you share some of the data points in development that are contributing to the decision, including improving carrier activity during the second half? Using Your Services Guide.

Speaker Change: Some increase in activity.

Speaker Change: Before we get the applications, there's a degree of conversation and inquiries that happens with our carriers and especially.

Speaker Change: Especially with respect to our services business, we have a lot of conversation around that and we're engaged on the front of the process when they're doing their RF design sheets and try to figure out what they're going to do for the year and that's what's led us to to.

Steven O. Vondran: And just a second topic, what is the roadmap for the LATAM portfolio to normalize its level of organic growth? How long does it take to get there? And what is that level of organic growth that I mentioned?

Speaker Change: To believe that there is an uptick.

Speaker Change: Activity.

Speaker Change: Probably back end loaded and that's led to our increasing our guidance that our services.

Rod: Thanks. Thanks, Michael. Thanks for the well wishes there.

Speaker Change: Business for next year now I would point out that if you look at our services guide.

Steven O. Vondran: So I'll start with your first question about the U.S. We are predicting our guidance for OTBG in the U.S. is approximately 4.7%. And as you know, that's underwritten largely by our comprehensive MLAs that we have. So we have a degree of inflation from the variability that you see. We do have one of our big three carrier MLAs, rolled off of its car, portion for that.

Speaker Change: A little bit lower margin than previously that's a result of having a little bit more construction services and that that guide I do want to point out with our construction business, that's something that we've not grown aggressively over the past.

Speaker Change: And when you think about that services business, we don't do that nationwide, we do it in pockets, where we have the right resources and.

Steven O. Vondran: So that's gone to a little bit more of an a la carte, so you'll see that activity spread more throughout front-end loaded. What we're seeing from the carriers in the U.S. is that we are seeing an uptick in the conversations around......

Speaker Change: On third party contractors to do the work so that if there are variability.

Speaker Change: The demand that we see there that we can cut our costs pretty quickly. There. So that's one of the things we're seeing reflected in that services margin as a higher mix of construction services, but again, that's targeted by region by carrier.

Steven O. Vondran: This is a presentation on the new new new new new new new new new new new new new new, some increase in activity. But before we get the applications, there's a degree of conversation and inquiry that happens with our.., and especially with respect to our services business, we have a lot of. We're engaged on the front end of the process, when they're doing their RF design sheets and trying to figure out... And that's what's led us to believe that there's an uptick in activity. Probably back and loaded and that's led to our increasing our guidance in our service. Business Fund. Now I would point out that if you look at our services.., a little bit lower margin. That's a result of having a little bit more construction services in that. Guide, and I do want to point out with our construction business, that's something that, not grown aggressively over the past, And when you think about that services business, we don't do that nationwide. We do it. We have the right resources. And can you lean on third-party contractors to do the work, so that if there are variability?

Speaker Change: Not a huge business for us, but it's one that we think adds value to our customers.

Speaker Change: Or is this a little bit more business.

Speaker Change: Okay.

Speaker Change: Yeah, Michael Michael I'll hit the Latam question on the organic tenant billing. So let me just kind of recap a little bit where we're at our.

Michael I. Rollins: Our guide for 2024 is about 2% organic tenant billings growth that comes with a pretty steady colocation and amendment level of activity of around 3%. We also are benefiting from the.

Speaker Change: The escalators that are tied to local inflation across the region. That's at about 4%. So you have that gross growth coming in in the upper single digits, 7%. We do also have 5% churn in for 2024, we've had a couple of churn events that we've worked through in Latin America over the last couple of years noticeably in 2010.

Three we worked through the Telefonica churn down in Mexico, I think you're well well aware of that one of the primary drivers of the churn in 2024 is the OE churn in Brazil, so of that 5% churn almost half of it is the only churn that we're assuming is going to.

Steven O. Vondran: the demand that we see there, that we can cut our costs. So that's one of the things we're seeing reflected in the data, higher services, but again, that's targeted by region, by... Not a huge business for us, but it's one for Michael, I'll hit the LATAM question on the organic tenant billing.

Rod: So let me just kind of recap a little bit where we're at. Our guide for 2024 is about 2% organic tenant billings growth. That comes with a pretty steady level of co-location and amendment activity of around 3%. We also are benefiting from the escalators that are tied to local inflation across the region, which is at about 4%.

Speaker Change: Come through in 2024.

That's about $26 million of tenant billings for oil that ends up coming off in 2024. So we look at the market there and yes, we have gone through some consolidation churn and that churn is really what's been reducing our overall organic tenant billings growth rate, we do expect to get through that churn in return.

Rod: So you have that gross growth coming in at the upper single digits, 7%. We do also have 5% churn in for 2024. We've had a couple of churn events that we've worked through in Latin America over the last couple of years. Noticeably, in 2023, we worked through the Telefonica churn down in Mexico. I think you're very, very aware of that.

Speaker Change: Turn to more normalized growth in the mid to upper mid single digits, but it's probably going to be a few years away before we get through that in the event not that I want to talk too much about 25 and beyond but the Oi churn will persist for a couple of more years thats, the one sort of to watching to see how it rolls through but once we get through that.

Rod: One of the primary drivers of the churn. 2024 is the OI churn in Brazil. So of that 5% churn, almost half of it is the OI churn that we're assuming is gonna come through in 2024. That's about $26 million of tenant billings for OI that ends up coming off. So we look at the market there, and yes, we've gone through some consolidation churn, and that churn is really what's been reducing our overall organic tenant billings growth rate. We do expect to get through that churn and return to more normalized growth in the mid to upper-mid single digits, but it's probably going to be a few years before we get through that. In the event, not that I want to talk too much about 25 and beyond, but the OI churn will persist for a couple of more years. That's the one sort of to watch and see how it rolls through.

Speaker Change: That where we do see a good steady level of Colocation amendment activity in the way our contracts are written we do benefit or benefit from the escalations tied to inflation, we protect ourselves from some FX volatility as well.

Speaker Change: Thanks very much.

Speaker Change: Okay.

Speaker Change: Your next question comes from the line of David Barden from Bank of America. Please go ahead.

David Barden: Hey, guys. Thanks, so much for taking the questions I guess.

David Barden: Two if I could first.

David Barden: Maybe just Steve.

David Barden: I think the biggest question I'm getting is is that what we're hearing from American tower about maybe a better second half of visibility into higher activity levels into the second half of the year is different than maybe what we heard yesterday from one of your peers, which is that three years can be more front end loaded.

Rod: But once we get through that, we do see a good steady level of co-location amendment activity in the way our contracts are written, benefiting from the escalations tied to inflation. We protect ourselves from some FX volatility as well. Thanks very much.

David Barden: That the back part of the year could be slower that the jumping off point for 2024, and 2025 might be slower. So could you kind of maybe talk a little bit about your conviction level that the second half activity levels can be higher or maybe some of the differences between some of the MLA as you might have that others don't dish relationships et cetera, that'd be very helpful. I think for people.

David Barden: Your next question comes from the line of David Barden from Bank of America. Please go ahead. Hey guys, thanks so much for taking the questions. I guess, too, if I could, first, maybe just Steve...

Steven O. Vondran: I think the biggest question I'm getting is that what we're hearing from American Tower about maybe a better second half of visibility into higher activity levels into the second half of the year is different than maybe what we heard yesterday from one of your peers, which is that the year is going to be more front-end loaded, that the back part of the year could be slower, and that the jumping off point for 2024 into 2025 might be slower. So could you kind of maybe talk a little bit about your conviction level that the second half activity levels can be higher, maybe some of the differences between some of the MLAs you might have that others don't, food, relationships, et cetera. That would be very helpful, I think, for people to kind of reconcile what we've been hearing in the last couple days. And then there's the second question, Rod. Thank you for all the details around India.

David Barden: To kind of reconcile what we're hearing in the last couple of days and then the second question Rod.

Speaker Change: Thank you for all the details around in India I think so.

Speaker Change: People I think were surprised to see India in the full year guide and if people are trying to back out that one quarter in the back part of the year Slide 20, you have an unlevered number that gets you to around 15 16 cents per share but in the text you have got a number that you are pulling out for about nine cents per share in the fourth quarter could you help us understand that.

Speaker Change: Between the Unlevered and Levered.

Speaker Change: Numbers that in order to kind of get a.

Rod: I think some people were surprised to see India in the full year guide and people are trying to back out that one quarter in the back part of the year. On slide 20, you have an unlevered number that gets you to around 15-16 cents per share, but in the text, you've got a number that you're pulling out for about nine cents per share in the fourth quarter. Could you help us understand the difference between the unlevered and the levered numbers in order to kind of get a level set for what we are really thinking will be the guide for 2024 AFFO per share? Thank you. I'll start with the first question, and we'll talk about U.S. growth.

Speaker Change: Level set for what we are really thinking will be the guide for <unk> for 2024 <unk> per share. Thank you.

Speaker Change: Okay I'll start with the first question you were talking about the U S growth. So I would just point out that as a result of our comprehensive MLA.

Speaker Change: Our revenue is decoupled from the levels of activity to some extent, so I think comparing us to someone else's <unk>.

Speaker Change: Estimations of leasing new business is a little bit tough.

Speaker Change: The fact that we have a level of locked in activity.

Speaker Change: A large part of our part of our rental growth is.

Speaker Change: It's block there that's either signed because it was signed last year and commencing this year, it's part of a comprehensive MLA or there's a degree of carryover revenue in that <unk> number that carries forward because it's a trailing 12 months metric there.

Rod: So I would just point out that, as a result of our comprehensive MLAs, that our revenue is decoupled from the levels of activity. I think comparing us to someone else... Estimations of new business are a little bit tough. We have a level of, and a large part of our rental growth is Locked in, it's either a sign, is part of our comprehensive MLAs, or there's a degree of carryover revenue. The Better Analog for Activities or Services. It's notoriously hard to predict exactly where you're going to end up.

Speaker Change: The better analog for activity as our services business and as we've said in the past it notoriously hard to predict exactly we're going to land a couple of years ago, we had to take guidance up quite a bit last year. We brought it down so what we're providing is our best estimate given the levels of activity, we're seeing but also some of it.

Speaker Change: It can be more market driven so it may be activity in a particular market versus more ubiquitous activity.

Steven O. Vondran: A few years ago, we had to take guidance up quite a bit. So what we're providing is Our best estimate, given the levels of activity... Also, some of it can be more market-driven, so it may be. The market, given that that's how we do it. General, believe that there will be. But as you think about that, I, Service. You have to do quite a bit of service work before you actually sign up. So it could just be time that we're referencing there.

Speaker Change: Given that that's how we're performing some of that services work.

Speaker Change: We do see a general uptick in conversation from our customers.

Speaker Change: Make us believe that there will be an uptick in the second half of the year, but as you think about that activity and our service levels are excellent.

Speaker Change: <unk> business for that activity.

Speaker Change: You have to do quite a bit of services work before you actually sign a new lease because youre kind of at an olive garden.

Speaker Change: Environment, so it could just be timing.

Speaker Change: That were referencing there.

Rod: But at the end of the day... Property Revenue Growth and Rental Growth, on the services side, we believe. Thank you. Thank you. Thank you. Hey David, Rod here.

Speaker Change: At the end of the day.

Speaker Change: Our our belief is.

Speaker Change: Yeah.

Speaker Change: Property revenue growth of rental growth is largely locked in and we feel confident in the.

Speaker Change: A portion of that is not locked down but that will come through and then the cadence we believe.

Speaker Change: The services side, we believe that we will see a continuing ramp in that activity.

Speaker Change: That's what led to the guide on that.

Speaker Change: Hey, David right here regarding India, just a couple of points.

Rod: Regarding India, just a couple of points there. So on page 20, we give you the breakdown for India, not just for the full year but also on a quarterly basis so that it really helps you figure out kind of what the impact may be up against a variety of closing dates, right? We expect the transaction to close in the second half of 2024, and the process that we're going through is it's being reviewed by the Competition Commission in India. So that's kind of the gating action going on there.

Speaker Change: Points. There. So you see in page 20, we gave you the breakdown for India and not just for the full year, but also on a quarterly basis. So that can really help you figure out kind of what the impact may be.

Speaker Change: Up against a variety of closing dates right. We expect the transaction to close in the second half of 2024.

Speaker Change: They were going through as it's being reviewed by the competition Commission in India. So that's kind of the gating the gating action there and of course, we reviewed kind of that process with local with our local team with local advisors lawyers in India base lawyers in the U S.

Rod: And of course, we reviewed kind of that process with our local team, with local advisors, lawyers in India, lawyers in the U.S., and as well as, you know, doing the proper diligence around interested parties within India. And we feel pretty good about that approval process. With all that said, we do expect it to be approved and closed in the second half of the year, but we're not exactly sure what the date will be.

Speaker Change: As well as doing the proper diligence around interested parties within India, and we feel pretty good about that approval process.

Speaker Change: With all that said, we do expect it to be approved and closed in the second half of the year, but we're not exactly sure. What the date would be so we wanted to give you the quarterly breakdown.

Rod: So we wanted to give you the quarterly breakdown so that as we progress through the year, you'd have the ability to kind of look at it quarter by quarter. For a full year, we've got property revenue from India at about one point, you know, just under $1.2 billion, and custody was at about $300 million. Unlevered AFFO at $285, and again, you can see the way that breaks down per quarter. Essentially, the difference between that unlevered AFFO and what we look at is the potential dilution of 30 to 40 cents for the year, maybe 90 cents, is the assumption that we would take the proceeds from the sale, roughly the two to two and a half billion dollars, and pay down revolving debt that is in You know, you put that money towards paying down that debt, and that's the differential that brings that dilution down into the nine cents per quarter, or The math is really that simple.

Speaker Change: So that as we progress through the year, you would have the ability to kind of look at it quarter by quarter on a full year. We've got property revenue from India at about one point just under $1 2 billion adjusted EBITDA at about 360, and Unlevered <unk> at 285, and again, you can see the way that breaks down per quarter.

Speaker Change: Essentially the difference between that Unlevered <unk> and what we look at is the potential dilution of 30 to 40 for the year maybe nine.

Speaker Change: Solution on a quarterly basis.

Speaker Change: Is the assumption that we would take the proceeds from the sale roughly the two to $2 5 billion.

Speaker Change: And pay down the revolving debt.

Speaker Change: That is in the not that I want to give you. The guide in terms of our interest rate, but you can kind of nowhere revolving debt is these days for us up in the 6% range or so approximately.

Speaker Change: You put that those proceeds towards paying down that debt and that's the differential that brings that dilution down into the nine per quarter or between 30 and 40.

Speaker Change: For the year, the math is really that simple David.

Rod: Perfect. That's really helpful, guys. Thank you so much.

David Barden: Perfect. That's really helpful guys. Thank you so much.

Ric Prentiss: Your next question comes from the line of Ric Prentiss from Raymond James. Please go ahead. Good morning, guys.

Speaker Change: Your next.

Speaker Change: Next question comes from the line of Ric Prentiss from Raymond James. Please go ahead.

Ric Prentiss: Yeah. Thanks, good morning, guys.

Rod: I appreciate you giving us your view and the refinement and raising the capital allocation by all. Good detail. The first question I've got is, Rod, piggybacking on David's question about India, there is obviously some concentration there at Brookfield as far as how many towers they have in the marketplace. Have you heard anything from the competitive commission there about their comfort level, or would there be any required divestiture? Yeah, Rick, thanks for the question. So we're, you know, we're working through the process. I don't want to get into detailed discussions.

Ric Prentiss: I appreciate you, giving us your view and the refinement and the.

Raising the capital allocation Bajo two details.

Ric Prentiss: The first question I've got is broad piggybacking on David's question about India.

Ric Prentiss: There is obviously some concentration there brookfield as far as how many towers that have in the marketplace have you heard anything from the competitive commission in there about their comfort level or would there be any required divestitures.

Speaker Change: Yes, Robert Thanks for the question. So we're working through the process I don't want to get into detailed discussions we certainly haven't talked directly to the competition Commission, but we've certainly done a fair amount of diligence.

Rod: We certainly haven't talked directly to the competition commission, but we've certainly done a fair amount of diligence. We're not sure where that will end up. We're pretty confident, very confident it gets approved. There could be some level of divestitures. That was contemplated within the agreement that we worked through. So nothing there that would concern us overly. And the other part is where Brookfield does have some towers.

We're not sure where that will end up we're pretty confident very confident it gets approved there could be some level of divestitures that was contemplated within the agreement.

Speaker Change: We worked through so nothing there that would that would concern us overly.

Speaker Change: And the other the other part is where Brookfield does have some towers the way they plan to run. These also.

Rod: The way they plan to run these also is competition-friendly, I would say, and that's the way that we kind of, I don't want to go into more detail than that, but we do expect that the transaction would be approved and would have the ability to close it in the second half. Okay. And then, Steve, appreciate the comments that you decouple service revenue really from leasing revenue because of the MLAs versus others. Is it still kind of three to six months from the time you're getting applications and having these talks before it shows up in the financials, and then can you give us a little color kind of on the pacing you expect of that, I think Rod you said, 180 to 190 million new leasing activity in the US and

Speaker Change: Is competition friendly I would say is the way that we kind of we view it there so.

Speaker Change: So I don't want to go into more detail than that but we do expect that the transaction will be approved and would have the ability to close it in the second half of 2024.

Speaker Change: Okay and then.

Speaker Change: So I appreciate the comments that decoupled service revenue really from losing revenue because of the annualized versus others.

Speaker Change: Is it still kind of.

Speaker Change: Six months from the time Youre getting applications, having these talks before it shows up in the financials and then can you give us a little color kind of been on the pacing you expect of that.

Speaker Change: I think Raj, you said $180 million to $190 million of new leasing activity in U S. Canada.

Rod: Sure. It's hard to give an exact timeline, Rick, because it's different for different customers. So I would say from application to revenue showing up on an a la carte basis, there's a variability there from call it 60 days to months, kind of what you referred to there. It really depends on the customer and how urgent they are to get on the site.

Speaker Change: Sure.

Speaker Change: But it's hard to give an exact timeline, Rick because it's different by different customers. So I would say from application to revenue showing up on a ala carte basis, there's a variability there from call. It 60 days.

Speaker Change: The six months.

Speaker Change: Referred to there and it really depends on the customer and how urgent they ought to get on the site to be honest with you.

Steven O. Vondran: In terms of the cadence for the contribution from the new leases and co-locations, it's relatively flat across the period. Again, I just would point out that the comprehensive portion of one of our major MLAs expired at the end of last year, so that got rid of some of the front-end loading.....

Speaker Change: In terms of the cadence for the contribution from the new leases and co locations, it's relatively flat across the period.

Speaker Change: And again I just would point out that we have the corporate as a portion of one of our major msas expired at the end of last year and so that got rid of some of the front end loading that you saw in previous years, so it'll be more evenly distributed this year.

Steven O. Vondran: Okay. And the last one, Rod just pointed out that there's a probability that the dividend could go down from the $1.70 paid in the fourth quarter to what would be paid evenly spread, over $24, maybe $1.62, while keeping it fairly flat, $24 versus $23 annually. Help people understand what the thought process was on why we raised the dividend because we get this question a lot: why raise the dividend so much in 4Q23 if you have to pull it optically down in 1Q24 while keeping it flat? Hey Rick, I'll take that one.

Speaker Change: Okay and the last one.

Speaker Change: Rob just pointed out that there is.

Speaker Change: Probability that the dividend could go down from the books 70 paid in fourth quarter to what would be paid evenly spread.

Speaker Change: 24, maybe above 62, while keeping it fairly flat 24 versus 23 annually help people understand what was the thought process on why raise the dividend because we get this question a lot why raise the dividends so much in <unk> 'twenty three if you have to pull it optically down <unk> 24, while keeping it flat for the year.

Speaker Change: Yeah, Eric I'll take that one.

Rod: Look, we didn't take the decision to hold the dividend flat lightly on that, and we were aware of the... optics problem with a step down from Q4 to Q1. But we committed to our shareholders to a certain dividend in 2020, and when we decided to hold it flat in 2024. If we didn't have the step-up in Q4, then we would have..., and we wouldn't have hit the number that we did. Transcript by Rev.com Page PAGE of NUMPAGES www.verbalink.com Page PAGE of NUMPAGES www.verbalink.com, 3 call about what was happening, and we've talked about it since then, and this is the one time that we've really, really, So Breeze http://www.youtube.com.au It's not the ideal situation, but we wanted to do what we said we'd do, and we did. We always like executives doing what they say they're going to do, and I do think going spread evenly through the years is probably good as well. So thanks guys, and again, Steve, I appreciate all the color.

Speaker Change: Look we didn't take the decision to hold the dividend flat lately on that and we were aware of the of the the optics problem with a step down from Q4 to Q1, but we are committed to our shareholders to a certain dividend in 2023, and when we decided to hold it flat in 2024.

Speaker Change: We didn't have the step up in Q4 than we would have.

Speaker Change: Then we wouldn't have hit the number that we have committed to and so we like to do what we say we're going to do and that's the reason we kept it there and we think this has been very well telegraphed we were trying to be very clear on our on our.

Speaker Change: Our Q3 call.

Speaker Change: We've talked about it since then and this is a one time event.

Speaker Change: So.

Speaker Change: Agreed.

Speaker Change: It was not the ideal situation, but we wanted to do what we say we're going to handle the dividend flat.

Speaker Change: It was always like executives doing what they say, they're going to do and I do think going.

Speaker Change: Spread evenly through the year is probably good as well. So thanks guys can stay appreciate all the color. It was very insightful about how youre sitting in the seat and running the company.

Eric Luebchow: It was very insightful about how you're sitting in the seat and running the company. Your next question comes from the line of Eric Luebchow from Wells Fargo. Please go ahead.

Speaker Change: Thanks.

Speaker Change: Your next question comes from the line of Eric Loop shelf from Wells Fargo. Please go ahead.

Steven O. Vondran: I appreciate the question. Steve, you made it pretty clear that deleveraging and investing in kind of more developed markets this year is a top priority. So maybe you could talk about the M&A environment right now as a potential use of capital. I know there are some consolidation opportunities out there in Europe, just wondering if that's, you know, an area of expansion for you over time.

Speaker Change: I appreciate the question.

Eric Loop: Steve So you made it pretty clear you know deleveraging investing in kind of more developed markets. This year is a top priority. So maybe you could talk about the M&A environment right now as a potential use of capital I know there are some consolidation opportunities out there in Europe. Just wondering if that's an area of expansion for you over time and then one for Rob I think you've talked.

Eric Luebchow: And then, you know, one for Rod, I think you've talked aspirationally about getting to kind of a double-digit AFFO growth rate. Maybe you could just kind of update us longer term on the impact of, you know, refinancings in the coming years, the India transactions, where do you think you can get to when stripping out some of the noise from India and some of the changes in interest rates that we've seen recently So I'll start talking about M&A and the... We continue to monitor what's going on in the M&A activity across the portfolio. We're still seeing a dislocation between public and private multipliers. And so there's no portfolio out there today that's trading that we think is strategically important and that would meet our investment criteria, and that's one of the reasons that we're a little bit out of that market right now.

Rob: It's really about getting to kind of a double digit <unk> growth rate, maybe you could just kind of update us longer term with the impact of refinancings in the coming years.

Rob: The India transaction, where do you think you can get to when stripping out some of the noise from India and some of the changes in interest rates that we've seen recently thank you.

Speaker Change: So I'll start talking about the M&A environment.

Speaker Change: We continue to monitor what's going on in <unk>.

Speaker Change: M&A activity is across the portfolio.

Speaker Change: We're still seeing a dislocation between public and private multiples and so there's no portfolio out there today. That's trading that we think is strategically important that would meet our investment criteria and that's.

Speaker Change: One of the reasons that were a little bit out of that market right now.

Steven O. Vondran: One of the reasons that we're very focused on bringing our leverage down to the high end of our target range is to make sure that we're in a position to take advantage of inorganic opportunities when and if they come to market that we think are strategically important but also that meet our investment criteria. So we're optimistic that there will be portfolios in the future that are something. Right now, there's just nothing that I would point to that... Trading in a Range. Hey Eric, Rod here.

One of the reasons that we're very focused on bringing our leverage down to the high end of our target range is to make sure that we're in a position to take advantage of inorganic opportunities whenever they come to market.

Speaker Change: Okay.

Speaker Change: But also that meet our investment criteria. So we're optimistic that there will be portfolios in the future that are something that we would be interested in.

Speaker Change: Right now Theres, just nothing that I would point to that that we think is.

Speaker Change: Trading in a range that we would find compelling.

Speaker Change: Eric Rod here. Thanks for the question so regarding <unk> growth, let me just hit a couple of.

Rod: Thanks for the question. So regarding AFFO growth, let me just hit a couple of points. First, I'll just hit kind of generically on what we look at as kind of a growth algorithm for the portfolio. And as Steve said, we're really pleased with the portfolio that we have, the diversity that we have throughout developed markets, as well as exposure to emerging markets. You know, I would remind you and everyone that in those emerging markets, those are some of the largest populating countries in the world that need more and more infrastructure over time. And we do think having exposure to that is going to be really good for us and our investors in this growth algorithm. But the algorithm is really pretty straightforward.

Eric Rod: A couple of points first of all just said kind of generically what we what we look at it as kind of a growth algorithm for the portfolio and as Steve said, we're really pleased with the portfolio that we have the diversity that we have throughout the developed markets as well as exposure to emerging markets.

Eric Rod: Mind, you and everyone that in those emerging markets. Those are some of the largest populated countries in the world that need more and more infrastructure over time, but we do think having exposure to that is going to be really good for us and our investors in this growth algorithm, but the algorithm is really pretty straightforward, we look at it roughly 5%.

Rod: We look at roughly 5%, you know, organic growth from the U.S. That includes some sprint churn over the next couple of years, the next few years there. We do expect that the non-U.S. properties will have incremental growth from there, maybe a couple hundred bases. We think that's possible, certainly, from Africa and Latin America over time, maybe not every year, but, you know, on average, over a long period of time, we expect to be there.

Eric Rod: Organic growth from the U S that includes some sprint churn over the next the next few years. There. We do expect that the non U S properties will have incremental growth from there may be a couple of hundred basis points and we think that's possible certainly from Africa, and Latin America over time, maybe not every year, but.

Eric Rod: On average over a long period of time, which we expect to be there. We're looking at upper single digit double digit growth rates from core site with very nice returns. So that looks very good and of course as you move down the P&L you end up with higher growth rates at gross margin and EBITDA margin, particularly with our focus on cost.

Rod: We're looking at upper single-digit, double-digit growth rates from CoreSight with very nice returns, so that looks very good. And, of course, as you move down the P&L, you end up with higher growth rates at gross margin, at EBITDA margin, particularly with our focus on cost discipline, reducing costs, both direct costs as well as SG&A, and driving expanded margins. So by the time you get down to AFFO, you know, that 5% U.S. growth, 7% international, double-digit CoreSight, all that can translate into upper, you know, single-digit AFFO growth pretty nicely. That's kind of what we look at. And then if you just look at 2023, you know, and 2024, in 23, we come in at AFFO per share growth of around 1% or so. I'll just remind you, that included 7% headwind from... during the year.

Eric Rod: Reducing costs managing costs, both direct cost as well as SG&A and driving expanded margins. So by the time, we get out of <unk>.

Eric Rod: That 5% U S growth, 7% international double digit core side, all that concerns late into upper single digit <unk> growth pretty nicely, that's kind of what we look at and then if you just look at 2023.

Eric Rod: In 2024, and 23, we came in <unk> per share growth at around 1% or so I'll just remind you that included 7% headwind from financing.

Eric Rod: And in the year. It included an additional 100 basis point headwind for Vil reserve and maybe a full percentage 0.44, FX. If you kind of do the math backwards that core underlying businesses solidly upper single digit growth rate in 2020 for the guide is around 5% getting us to that $10 33.

Rod: It included an additional 100 basis point headwind for the VIL reserve and maybe a full percentage point for FX. If you kind of do the math backwards, that core underlying business is, you know, solidly in the upper single digit growth rate. In 2024, the guide is around 5% getting us to that 1033 per share, excluding financing headwinds, and that is about 100 basis points. We have the reserve, broadly speaking, for India, and that's about 100 basis points of headwind as well.

Eric Rod: Per share financing headwinds and that is about a 100 basis points, we have the AR reserve broadly speaking for India.

Eric Rod: And that's about 100 basis point headwind as well and with the FX volatility that we're seeing and that's about a 200 basis point headwind. So again, you're back up into that and you're getting into that upper single digit kind of core growth and I'll remind you that that even that upper single digit core growth has embedded in at higher than normal churn in some of the emerging market.

Rod: And with the FX volatility that we're seeing, that's about a 200 basis point headwind. So again, you back up into that, and you're getting into that upper single-digit kind of core growth. And I'll remind you that even that upper single-digit core growth has embedded in it higher than normal churn in some of the emerging markets, as well as the sprint churn in the U.S. As we go through that, you know, being able to handle some modest FX and even financing, you know, items with churn being at a more normal level, certainly in the upper single-digit growth rates on AFFO Please go ahead.

Eric Rod: As well as the sprint churn in the U S is as we go through that being able to handle some some modest FX and even financing.

Eric Rod: Items with churn being at them at a more normal level certainly in the in the upper single digit growth rates on a <unk> per shares in our line of sight.

Eric Rod: Your next question comes from the line of but Yeah Levi from UBS. Please go ahead.

Batya Levi: Great, thank you. Can you talk a little bit more about your expectations for Europe in terms of new leasing revenue growth beyond this year? And what you think about your scale in the region? And I think there was a bit of a write-down in Spain. Can you talk about what drove that?

Levi: Great. Thank you and can you talk a little bit more about your expectations for Europe in terms of new leasing revenue growth beyond this year and how you think about scale in the region and I think there was a bit of a route down right down in Spain can you can you talk about what drove that thank you.

Steven O. Vondran: Thank you. I'll start with some leasing trends, and you can pick it up later. So what we're seeing in Europe is that we continue to see build-outs by the carriers, and we do see substantial 5G population coverage from the leading MNOs in Germany and Spain.

Speaker Change: I'll start with some leasing trends, where arguably you can pick it up.

Speaker Change: So what we're seeing in Europe, as we continue to see build outs by the carriers.

We do see substantial <unk> population coverage from the leading msos.

Steven O. Vondran: So the pipeline of growth that we see remains solid, but it's more weighted toward co-location. In Germany, we are continuing to work through some of the market complexities that everyone's dealing with there, including some permitting delays and time for power connection. But we do feel good about the progress we've made there, brought in resources from other parts of our company to help with that, and kind of utilize best practices. So we do expect. Some improvement in our timelines. So that's what we would expect to continue to see in Europe, a little bit more co-location-driven activity as they're through the bulk of their 5G upgrades. Hey, Batya Rod here.

Speaker Change: In Germany, and Spain, so the pipeline of growth that we see remains solid, but it's more weighted toward co locations.

Speaker Change: In Germany, we are continuing to work through some of the market complexities that everyone's dealing with there, including some permitting delays in time for power connections, but we do feel good about the progress we've made there.

Speaker Change: <unk> brought in resources from other parts of our company to help with that and kind of utilizing best practices. So we do expect.

Speaker Change: Some improvement in our timelines there.

Speaker Change: So that's what we would expect to continue to see in Europe is a little bit more co location driven activity there through the bulk of their five G upgrades in most of our markets.

Speaker Change: Hey, Bob rout here, so regarding Spain, you, obviously saw that we had a write down in our Spain market of about $80 million that is exclusively rate driven based on our cost of capital as a function of our annual impairment testing.

Rod: So regarding Spain... You obviously saw that we had a write-down in our Spanish market of about $80 million. That is... Please see the complete disclaimer at https://sites.google.com, and I would also add to that. The Spanish market is performing very well in terms of hitting its metrics and milestones up against our original... I'd also remind you that Spain was really the only business in Europe that is 100% from Telsius Acme.

Bob: And I would also add to that that the Spain market is performing very well.

Bob: In terms of hitting its its metrics and milestones up against our original business case I'd also remind you that the Spain business was really the only business in Europe that is 100% from the <unk> acquisition. There was no legacy business there prior to to.

Rod: Lake, Prior, of that transaction, but simply put, the impairment of about $80 million was a... exclusively a fun, rising cost of capital running through at this kind of cash flow impairment. Got it. Thank you. Your next question comes from the line of Matt Niknam from Deutsche Bank. Please go ahead.

Bob: So that transaction, but simply put the impairment of about $80 million was exclusively a function of rising cost of capital running through a discount of cash flow impairment model.

Speaker Change: Got it thank you.

Speaker Change: Your next question comes from the line of Matt nickname from Deutsche Bank. Please go ahead.

Matthew Niknam: Hey guys, thank you so much for taking the questions. One was on data centers and one was housekeeping. First, on data centers, how is the nature of conversations with your customers changing or evolving, if at all, as AI use cases become a little bit more pervasive across enterprises? And I'm really getting at, you know, do you sense that that sort of edge data center build that maybe was part of the, course, I'd acquisition maybe rationale, at least initially, the micro data centers at the basis of your towers is that becoming something that's a little bit more near-term, or is that more still of a long-term opportunity, and then maybe for Rod on DNA, what's driving the review and the decision In general, with CoreSight, what we're seeing is demand is still largely driven by enterprises moving to a hybrid cloud environment, and that's people who either are... cloud-native or primarily cloud, or they were still in their on-prem. That's still a major driver.

Hey, guys. Thank you so much for taking the questions.

Matt: Just one on data centers and one housekeeping first on data centers, how are the nature of conversations with your customers changing or evolving.

Matt: If at all as a I use cases become a little bit more pervasive across enterprises and I'm really getting at do you sense that that's sort of edge data center builds that maybe was part of the.

Matt: Of course that acquisition, maybe a rationale at least initially the micro data centers at the base of your towers is that becoming something that's a little bit more.

Matt: Near term or is that more still have a long term opportunity and then maybe for rod.

Matt: DNA, what's driving the reviewing the decision to potentially extend the useful lives of the tower assets. They saw a pretty big step down implied.

Matt: In DNA in your guide for this year. Thanks.

Speaker Change: So I'll start with the data center question.

Speaker Change: In general with core side, what we're seeing is demand is still largely driven by enterprises moving to a hybrid cloud environment, and that's people who either or.

DNA: These are cloud native or program, primarily cloud or they were still on their on Prem facilities. That's still a major driver we are seeing AI inferencing pickup.

Steven O. Vondran: We are seeing AI pick up in our facilities. We've always had some AI that we're targeting our customers, so we are seeing demand. More broadly speaking, AI is... Reducing overall capacity, which is leading to. When it comes to edge deployment, we do think that AI inferencing, in particular the interface people have with AI, will lead to opportunities there.

DNA: Pick up in our facilities, we've always had some AI applications that we're targeting our facilities. So we are seeing demand there more broadly speaking AI is.

DNA: Reducing overall capacity in the markets our overall supply in the markets, which is leading to some favorable pricing trends for us when it comes to the edge deployment.

DNA: We do think that AI inferencing in particular in the interface people.

DNA: I will lead to opportunities there right now the nearer term opportunities that we're exploring are more niche markets.

Steven O. Vondran: Right now, the near-term opportunities that we're exploring are more niche markets. You may have seen one of our partners put out a blog that we're working with them, an EDGE facility, kind of an automotive market, to update software on their product. We have a number of POCs that we're working on with various partners that are more niche applications in particular. I think the microdata centers at the base of the towers facilitating AI are still a bit further out, and we'll continue to update you guys if there's something to talk about there, but in the meantime, you should work with our customers, our potential customers, on iterating on Hey Matt, regarding the tower life adjustment that And that was, you know, simply put; it's just a function of matching up the book life here more closely with what the actual realized life is for the asset.

DNA: I have seen one of our partners put out a blog that where we're working with them on.

DNA: An edge facility kind of in the automotive market to uptake software on their products. We have a number of POC is that we're working on with various partners that are more niche more more niche applications in particular I think the the micro data centers at the base of the towers facilitating AI is still a bit further.

DNA: <unk>.

DNA: And we'll continue to update you guys as there's something to talk about there but in the meantime, we just continue to work with our customers or potential customers on iterating on what that's going to look like.

DNA: Hey, Matt regarding the tower life adjustment that you saw running through our numbers here, we essentially increase the tower life from 20 years to 30 years for book purposes for our GAAP books.

Matt: And that was simply put it's just a function of matching up.

Matt: The book life here more closely with what the actual realized life is for the asset so.

Rod: Nothing really more complicated than that, other than a realization that these assets last a lot longer than 20 years, so our books will not reflect that. Got it. Thank you. And your final question today comes from the line of Brandon Nispel from KeyBank. Please go ahead.

Matt: Nothing really more complicated than that other than a realization that these assets last a lot longer than 20 years. So our books will not reflect that going forward.

Speaker Change: Got it thank you.

Speaker Change: And your final question today comes from the line of Brandon Isbell from Keybanc. Please go ahead.

Brandon Nispel: Hey, thank you for taking the question. So when we look at the capital spending on the data center segment in your development pipeline, does that imply your development pipeline? With your development pipeline, does that imply capital spending expansion beyond 2024? Really, how does that inform your decision on spending around your remaining businesses with your power segments? Thanks. Sure.

Brandon Isbell: Thank you for taking the question. So when we look at the capital spending for the data segment and the development pipeline does that imply your development pipe.

Speaker Change: And.

Brandon Isbell: With your development pipeline does that imply capital spending expansion beyond 2024, or how does that inform your decision on spending.

Brandon Isbell: The remaining businesses in your pilot segments. Thanks.

Speaker Change: Sure well.

Steven O. Vondran: The record amount of sales that we've had is what's led to increasing the development pipeline there. And it really depends on what our sales are this year and how we continue to see the opportunities in that portfolio evolve as to what future spending is. So it'd be premature for me to say.

Speaker Change: The record amount of sales that we've had is whats led to increasing the <unk>.

Speaker Change: Development pipeline there.

Speaker Change: It really depends on what our what our sales are this year and how we continue to see the opportunities in that portfolio have evolved as to what the future spending or so it would be premature for me to.

Steven O. Vondran: Guide to Future Years Capital There, what I would reinforce is that we have a degree of optionality in our capital spending and that we do have a structure with CoreSite where we also have partners. So there is some optionality in terms of how much capital we put in, and you could... use our capital or someone else's capital to expand if we thought that was a better idea. You're a better option. But at this point, the development pipeline we have today, we're choosing to sell the fund because we're achieving mid-team stabilized returns, very low risk services, and we continue to see demand. So we'll make that assessment about what's appropriate for 2025 and later, a little bit later. And we'll share that with you guys. Hey Brandon, Rod here. The only thing I would add to Steve...

Speaker Change: Guide future Years' capital there.

Speaker Change: What reinforces that we have a degree of optionality in our capital spending.

Speaker Change: That we do have a structure with core site, where we are.

Speaker Change: So have.

Speaker Change: Partners in that business and so there is some optionality in terms of how much capital we put in and you could see us.

Speaker Change: Using our capital or somebody else's capital to expand if we thought that was a better.

Speaker Change: Better option for us.

Speaker Change: But at this point.

Speaker Change: Development pipeline, we have today, we're choosing to self fund because we're achieving.

Speaker Change: Mid teens stabilize returns very little risk at our existing campuses. It would continue to see demand rise. So we'll make that assessment and determine what's appropriate for 2025 and later.

Speaker Change: A little bit later, and we'll share that with you guys at the appropriate time.

Speaker Change: Hey, Brandon Ross here, the only thing I would add to Steve's comments.

Brandon Ross: Comments, there is that we have full optionality kind of going forward I think Steve alluded to this but going beyond 2024. The fact that we're investing $450 million in the data center business in 2024 does not commit us to that level or a higher level of capital spending in that in that business going forward. So.

Rod: I think Steve alluded to this, but going beyond 2024, the fact that we're investing $400 billion in the Data Center and 2024 does not commit us to that level or a higher level of capital spending in that business going forward. So we have a fair amount of flexibility to deploy capital towards towers, towards data centers, towards towers in developed markets, emerging markets, certain countries, not other countries as we go year to year.

Brandon Ross: We have we have a fair amount of flexibility to deploy capital towards towers towards data centers towards towers in developed markets emerging markets certain countries not other countries as we go year to year. So we will be looking to secure that optionality protect that optionality. So we can always make decisions.

Rod: So we will be looking to secure that optionality, protect that optionality, so we can always make decisions with our capital that follow the best risk-adjusted rates of return around the globe for an. Great. Thank you. Thank you everybody for joining today's call. If you have any follow-up questions, please feel free to reach out to the investor relations team. Thank you. Ladies and gentlemen, that does conclude your conference for today. Thank you for your participation and for using AT&T Teleconference. You may now disconnect. We're sorry, your conference is ending now. Please hang up.

Brandon Ross: With our capital that followed the best risk adjusted rates of return around the globe for any given year.

Speaker Change: Great. Thank you.

Speaker Change: Thank you everybody for joining today's call. If you have any follow up questions. Please feel free to reach out to the Investor Relations team. Thank you all.

Speaker Change: Ladies and gentlemen that does conclude your conference for today. Thank you for your participation and for using AT&T teleconference. You may now disconnect.

Speaker Change: Okay.

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