Q1 2024 American Tower Corp Earnings Call

Okay.

[music], ladies and gentlemen, thank you for standing by welcome to the American Tower first quarter 2024 earnings Conference call as a reminder, today's call.

Operator: Ladies and gentlemen, thank you for standing by. Welcome to the American Tower First Quarter 2024 Earnings Conference Call. As a reminder, today's conference call is being recorded. Following the prepared remarks, we will open the call for questions. If you would like to ask a question, please press one and zero now. I would now like to turn the call over to your host, Adam Smith, Senior Vice President of Investor Relations and FP&A. Please go ahead, sir. Good morning.

This call is being recorded following the prepared remarks, we will open the call for questions. If you would like to ask a question. Please press one zero now I would now like to turn the call over to your host Adam Smith Senior Vice President of Investor Relations and F. T. N. A please go ahead sir.

Adam Smith: Good morning, and thank you for joining American Tower's first quarter 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.

Morning, and thank you for joining American Tower's first quarter earnings conference call, we've posted a presentation, which we will refer to throughout our prepared remarks under the Investor Relations tab of our website Www Dot American tower Darko.

Adam Smith: I'm joined on the call today by Steve <unk>, our president and CEO and Rod Smith, our executive Vice President CFO and Treasurer.

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, our collections expectations in India, and any other statements regarding matters that are not historical facts.

Adam Smith: Following our prepared remarks, we will open up the call for your questions before.

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

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

Adam Smith: Our expectations for the closing of the sale of our India business and the expected impact of such sale on our business.

Our 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.

Adam Smith: You should be aware that certain factors may affect us in the future and could cause actual results to differ materially from those expressed in these forward-looking statements. Such factors include the risk factors set forth in this morning's earnings press release. Those set forth in our most recent annual report on Form 10-K and other risks described in documents we subsequently file from time to time with the SEC. We urge you to consider these risks 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.

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

Adam Smith: Those set forth in our most recent annual report on Form 10-K.

Adam Smith: And other risks described in documents subsequently filed from time to time 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: Thanks, Adam. And thanks to everyone for joining us today. As you can see in the results we reported this morning, mobile network upgrades and digital transformation trends are driving compelling demand across our tower and data center platforms. 5G rollouts are contributing to an acceleration in our U.S. application pipeline and another sequential step up in co-location and amendment growth in Europe. Solid demand in Africa continued to drop, accelerating business growth, and retail demand resulted in another quarter of strong sales performance at CoreSite, which you'll hear more about later.

Steve: Thanks, Adam and thanks to everyone for joining today.

Steve: As you can see in our results. We reported this morning mobile network upgrades and digital transformation firms are driving compelling demand across our tower and data center platforms.

Steve: <unk> rollouts are contributing to the acceleration in our U S application pipeline.

Steve: Sequential step up in Colocation and amendment growth in Europe.

Steve: Solid demand in Africa continue to drive elevated new business growth and retail demand resulted in another quarter of strong sales performance of course, which you'll hear more about later on.

Steven O. Vondran: Before handing the call over to Rod, I'm going to spend a few minutes discussing the key factors that have driven performance in our US and Canada tower business and underpin the evaluation and execution of our global expansion strategy. In particular, we believe that our focus on asset quality, operational excellence, and contract structures, all through the prism of long-term value creation, have been the most critical factors in determining our ability to monetize growth in mobile data consumption and our ability to drive leading performance of our assets over multiple network investment cycles. Over the last 25 years, we've developed a scalable nationwide portfolio of approximately 43,000 sites across the U.S. and Canada.

Speaker Change: Before handing the call over to Rob I'm going to spend a few minutes discussing the key factors that have driven performance in our U S tower business and underpin the evaluation and execution of our global expansion strategy.

Speaker Change: In particular, we believe that our focus on asset quality operational excellence and contract structures all through the prism of long term value creation have been the most critical factors in determining our ability to monetize growth in mobile data consumption and our ability to drive leading performance of our assets over multiple network investment cycles.

Speaker Change: Over the last 25 years, we've developed a scaled nationwide portfolio of approximately 43000 sites across the U S and Canada. This portfolio has been methodically constructed primarily through the acquisition of high quality carrier designed and constructed tower portfolios.

Steven O. Vondran: This portfolio has been methodically constructed, primarily through the acquisition of high-quality, carrier-designed and constructed tower portfolios, on which nationwide networks have been built and expanded upon through each successive G, and have further benefited from the transition to neutral host operations. We've complemented the acquisition of these target assets with select, high-quality, independent tower provider portfolios, smaller tuck-in portfolios, and build-a-suit sites, which taken together represent Our ability to be highly selective in the assets that we've aggressively pursued for acquisition and development, the assets we've chosen not to pursue, and the standards we've used to underwrite our growth is the result of robust internal analysis and due diligence capabilities that rely on data insights that we've accumulated through our history as a tower operator.

Speaker Change: Nationwide networks have been built and it's premised upon each successive GE and has further benefited from a transition to neutral host operation.

Speaker Change: We've complemented the acquisition of these target assets with select high quality independent tower provider portfolios smaller tuck in portfolios and build to suit sites, which taken together represent meaningful scale.

Speaker Change: Our ability to be highly selective in the assets that we've aggressively pursued for acquisition and development. The assets, we've chosen not to pursue and the standards. We've used underwriter growth are the result of robust internal analysis and due diligence capabilities that rely on data insights we've accumulated through our history as a tower operator please.

Steven O. Vondran: These insights have reinforced our understanding of how asset location, competition considerations, and structural dynamics come together to create the potential for differentiated value creation. For example, our focus on high-quality assets in premier locations has resulted in a portfolio that's geographically skewed towards suburban and rural environments and transport corridors, where the vast majority of Americans live and travel, as well as towers that are structurally designed for co-tenancy, which we believe has enabled us to generate leading new business growth on our assets.

Speaker Change: Insights or reinforce our understanding of asset location competition considerations on structural dynamics come together to create the potential for differentiated value creation.

Speaker Change: For example, our focus on high quality assets in Premier locations as a result of in our portfolio that is geographically skewed towards suburban and rural environments and transport corridors or the vast majority of Americans live in travel as well as towers are structurally designed for co tenancy, which we believe has enabled us to generate leading new there.

Speaker Change: This growth on our assets.

Steven O. Vondran: Similarly, by focusing on assets with significant structural capacity, we believe we can reduce overall operating and redevelopment costs, allowing for profit and return maximization at the asset level and industry-best speed to market for care, deployments, and our towers. And we've seen these factors come together to result in significant value creation in our assets. Notably, cash operating profit margins for our U.S. and Canada property segment have expanded by over 440 basis points since 2016, the year following our Verizon transaction in the U.S. As we continue to focus on driving more new business and efficiency at the asset level, we see a path to further increasing the profitability of our U.S. and Canada business going forward.

Speaker Change: Similarly by focusing on assets with significant structural capacity. We believe we can reduce overall operating redevelopment costs, allowing for profit and return back to innovation at the asset level at industry best speed to market for chair deployments on our towers.

And we've seen these factors came together to result in significant value creation, our assets, notably cash operating profit margins for our U S and Canada property segment have expanded by over 440 basis points in 2016, the ear following our Verizon transaction in the U S.

As we continue to focus on driving more new business and efficiency at the asset level, we see a path to further increasing the profitability of our U S and Canada business going forward.

Steven O. Vondran: Turning to our operating model, through our focus on efficiency and delivering exceptional value for customers, we've invested in technology and the build-up of capabilities that we believe enhance the service we provide our customers and the value of our product offer. For example, through our application services automation programs, we've continuously reduced cycle times, further supporting critical speed to market advantages for our customers, which translates into accelerated revenue realization for our business.

Speaker Change: Turning to our operating model through our focus on efficiency and delivering exceptional value for customers. We've invested in technology and the buildup of capabilities that we believe enhance the service, we provide our customers and a valuable product offering for.

Speaker Change: For example, through our application services automation programs, we've continuously reduced cycle times further supporting critical speed to market advantages for our customers, which translates into accelerated revenue realization for our business.

Steven O. Vondran: Elsewhere in our services segment, we've combined investment in data quality and governance with the development of internal data platforms to improve our overall service offerings and asset integrity. Over time, customer feedback shows that these investments have resulted in a consistent upward trajectory in customer satisfaction, achieved by providing a differentiated customer experience of high asset integrity. In our land management operations, we've also taken an approach that's focused on our customers' needs and expanded the profitability of our sites. Through our Tower Asset Protection Program, we perform thousands of transactions a year that improve land rights and ease site access conditions, a critical factor for our customers.

Speaker Change: Elsewhere, our services segment, we've combined investments in data quality and governance with the development of internal data platforms to improve our overall service offerings and asset integrity.

Speaker Change: Over time customer feedback shows that these investments have resulted in a consistent upward trajectory and customer satisfaction.

Speaker Change: By providing a differentiated customer experience of high asset integrity.

Our land management operations. We've also taken approach that's focused on our customers' needs and expanding the possibility of our sites.

Speaker Change: So our tower asset protection program, we performed thousands of transactions a year that improved the gravel rights and Eastside access conditions, a critical factor for our customers.

Steven O. Vondran: And over the last decade, we've deployed significant capital and attractive rates of return and amended thousands of contracts to protect our assets and mitigate growth and land rent, supporting margin performance. Finally, as we've said publicly many times, contract terms and structure are critical to realizing the full value of the assets we own and manage, and our approach has been centered around creating long-term value for American Tower and our carrier customers, even when it can potentially come at the expense of short-term wealth. Perhaps the most important capability we've built internally over the last two decades is knowing your assets and understanding your value.

Speaker Change: Over the last decade, we've deployed significant capital at attractive rates of return and admitted thousands of contracts to protect our assets and mitigate growth and Robert supporting margin performance.

Speaker Change: Finally, as we've said publicly many times contract terms and structure are critical to realizing the full value of the assets, we own and manage and our approach has been centered around creating long term value for American tower, and our carrier customers, even when it can potentially come at the expense of short term wins.

Speaker Change: Perhaps the most important capability, we've built internally over the last two decades is knowing our assets and understanding your value add.

Steven O. Vondran: As a result, we've been able to achieve outstanding growth and create significant shareholder value under this MOA agreement, while also developing innovative structures such as the Comprehensive MLA. Under these agreements, we are able to secure guaranteed growth over a multi-year period in a way that maximizes the value of our assets, while providing a degree of insulation from quarter to quarter ebbs and flows in wireless network spending. Critically, we've seen these contracts represent a compelling value proposition for our carrier customers by lowering their total cost of ownership when compared to self-performed, by providing a framework to leverage our skill for their networks that translates to budgetary operational visibility, and by creating administrative efficiencies that yield lower transaction costs on self-led deployments.

Speaker Change: As a result, we've been able to achieve outstanding growth and create significant shareholder value under traditional MLA agreements, while also developing innovative structures such as the comprehensive MLA.

Speaker Change: Under these agreements were able secure guaranteed growth over a multiyear period.

Speaker Change: It maximizes the value of our assets, while providing a degree of insulation from quarter to quarter ebbs and flows and wireless network spending.

Critically we've seen that these contracts represent a compelling value proposition part carrier customers.

Their total cost of ownership when compare to self performed by providing a framework to leverage our scale their networks that translates to budgetary operational visibility.

And by creating administrative efficiencies that yield lower transaction costs on cell site deployments.

Taking all of this together, we've seen us focus on the right assets high quality contracts with operational excellence facilitate increasing monetization and growth in mobile data consumption and corresponding carrier capex increases over time.

Speaker Change: Over the course of the <unk> investment cycle between 2010 2018.

Speaker Change: Average mobile data consumption per smartphone increased from less than 100 megawatts per month to seven gigabytes per month.

Steven O. Vondran: Putting all this together, we've seen this focus on the right assets, high-quality contracts, and operational excellence facilitate increasing monetization and growth in mobile data consumption and corresponding carrier capex increases over time. For example, over the course of the 4G investment cycle, between 2010 and 2018, average mobile data consumption per smartphone increased from less than 100 megabytes per month to 7 gigabytes per month. And over that period, carriers were deploying approximately $29 billion annually on average, up from approximately $23 billion during 3G.

Speaker Change: Over that period carriers, we're deploying approximately $29 billion annually on average up from approximately 23 billion during <unk>.

Speaker Change: As we've moved into the <unk> investment cycle for early 2019 today with.

Speaker Change: We've once again seen mobile data consumption per smartphone grow to almost 30 gigabytes per month in 2024, we've.

Speaker Change: We've seen early five G subscribers consuming roughly two times, the mobile data compared to the average forging subscriber.

Speaker Change: We see average annual carrier Capex step up to approximately $36 billion a year.

Speaker Change: This capex investment translate into approximately $230 million in year over year Colocation Amendment growth, we delivered last year, most of which was attributed to <unk> activity as well as the expectation for growth on a per site basis in 2024 significantly exceeds the average seen during the <unk> deployment cycle.

Steven O. Vondran: As we've moved into the 5G investment cycle from early 2019 to today, we've once again seen mobile data consumption per smartphone grow to almost 30 gigabytes per month in 2024. We've seen early 5G subscribers consuming roughly twice the amount of mobile data compared to the average 4G subscriber.

Speaker Change: That brings us to today.

Speaker Change: We continue to see all of our key customers actively working on network upgrades Rollouts.

Steven O. Vondran: And we've seen average annual carrier capex step up to approximately $36 billion a year. This CapEx investment translated to the approximately $230 million in year over year co-location amendment growth we delivered last year, much of which was attributed to 5G activity, as well as an expectation for growth on a per-site basis in 2024 that significantly exceeds the average seen during the 4G deployment cycle. That brings us to today, where we continue to see all of our key customers actively working on network upgrades and rollouts, and the 5G cycle playing out in line with the broader expectations underwritten in our long-term guidance.

G cycle, playing out in line with the broader expectations underwritten in our long term guidance.

Speaker Change: On our last call, we indicated that we expected a year over year increase in contributions from our services segment due in part early indications or uptake in our application pipeline as well as conversations with our teams are having with our customers on the ground.

Speaker Change: The activity, we saw in Q1 reinforces that expectation.

Speaker Change: Specifically contributions in our services segment for the quarter came in ahead of our internal expectations and on the application side Q1 volume was over 70% higher than what we saw in Q4 of last year.

Speaker Change: In fact March represented the highest volume level over the trailing 12 months. It was supported by broad based step ups across our major U S customers now.

Steven O. Vondran: On our last call, we indicated that we expected a year-over-year increase in contributions for our services segment, due in part to early indications of an uptick in our application pipeline, as well as conversations that our teams were having with our customers on the ground. The activity we saw in Q1 reinforces that expectation. Specifically, contributions in our services segment for the quarter came in ahead of our internal expectations. And on the application side, Q1 volume was over 70% higher than what we saw in Q4 of last year. In fact, March represented the highest volume level for the trailing 12 months.

Speaker Change: Now, while there's always some level of risk associated with our expectations in the servicing segment I'm pleased to say that what we've seen thus far supports the 2024 guidance. We provided in February including approximately $195 million, we expected services revenue contribution.

Speaker Change: Approximately four 7% organic tenant billings growth.

Speaker Change: At $180 million to $190 million in year over year, Colocation and amendment growth one of our strongest year to date.

Speaker Change: So as we move forward, we believe our U S tower portfolio is uniquely positioned to continue driving compelling growth in spine G expected increases in mobile data consumption and associated carrier investments drive increasing demand for essence over time importantly.

Steven O. Vondran: It was supported by broad-based step-ups across our major U.S. Now, while there's always some level of risk associated with our expectations in the services segment, I'm pleased to say that what we've seen thus far supports the 2024 guidance we provided in February, including approximately $195 million, the expected services revenue contribution. Approximately 4.7% organic Tenant Billings Growth and $180 to $190 million in year-over-year co-location and amendment growth, one of our strongest years to date.

Speaker Change: Importantly by leveraging that same expertise to develop our leading global portfolio, we are well positioned to monetize similar trends across our global footprint, while delivering a differentiated experience and value proposition to our customers.

Speaker Change: Further we believe the factors are taking you through today as well as our global focus on increasing efficiency in our cost structure provide a path to continued converting topline growth at a rate that expands already attractive cash operating profit margins and creating incremental shareholder value with.

Speaker Change: With that I'll turn it over to Rod to discuss Q1 performance and our updated outlook Brian.

Rodney Smith: Thanks, Steve Good morning, and thank you for joining today's call. We are off to a solid start to 2024 with Q1 performance exceeding our initial expectations across many of our key metrics. These results together with the positive trends highlighted by Steve the various initiatives, we have in place to drive profitability and margin expansion.

Steven O. Vondran: As we move forward, we believe our U.S. Tower portfolio is uniquely positioned to continue driving compelling growth as 5G, expected increases in mobile data consumption, and associated carrier investments drive increasing demand for our assets over time. Importantly, by leveraging that same expertise to develop our leading global portfolio, we're well positioned to monetize similar trends across our global footprint, while delivering a differentiated experience and value proposition to our customers. Further, we believe the factors I've taken you through today, as well as the global focus on increasing efficiency in our cost structure, provide a path to continue converting top-line growth at a rate that expands already attractive cash and operating profit margins and creates incremental shareholder value. With that, I'll turn it over to Rod to discuss Q1 performance and our updated outlook. Rod?

And our optionality and discipline and selectively deploying capital towards projects, yielding the most attractive risk adjusted rates of return gave us confidence in our ability to drive strong sustained growth quality of earnings and shareholder returns for 2024 and beyond.

Speaker Change: Before I dive into the results in a revised 2024 outlook I'll touch on a few highlights from the quarter.

Speaker Change: First the strong reoccurring fundamentals that underpin our business are again highlighted in our Q1 performance with consolidated organic tenant billings growth of five 4% <unk>.

Speaker Change: And another exceptional leasing quarter at core site, including its highest quarter of retail new business signed since Q4 of 2020. Furthermore, we continue to demonstrate cost discipline, resulting in strong year over year cash adjusted EBITA margin expansion, which I will touch on in a moment.

Rodney Smith: Thanks, Steve. Good morning, and thank you for joining us on today's call. We are off to a solid start to 2024, with Q1 performance exceeding our initial expectations across many of our key metrics. These results, together with the positive trends highlighted by Steve, the various initiatives we have in place to drive profitability and margin expansion, and our optionality and discipline in selectively deploying capital towards projects yielding the most attractive risk-adjusted rates of return, give us confidence in our ability to drive strong, sustained growth, quality of earnings, and shareholder returns for 2024 and beyond.

Speaker Change: Next in India. The collections trends, we saw in Q4 of 2023 continued into Q1, allowing us to reverse approximately $29 million of previously reserved revenue.

Speaker Change: Separately, while we continue to anticipate a second half 2024 closing on our sale of ATC, India to Brookfield, we have already made progress in accelerating certain payments included in the potential of $2 $5 billion total proceeds associated with the transaction, including the repatriation of approximately $100 million net.

Rodney Smith: Before I dive into the results and our revised 2024 outlook, I'll touch on a few highlights from the quarter. First, the strong, reoccurring fundamentals that underpin our business are again highlighted in our Q1 performance, with consolidated organic tenant building growth of 5.4% and another exceptional leasing quarter at CoreSite, including its highest quarter of retail new business signs since Q4 of 2020. Furthermore, we continue to demonstrate cost discipline, resulting in strong year-over-year cash-adjusted EBITDA margin expansion, which I will touch on in a moment.

Speaker Change: Withholdings tax back to the U S. Earlier. This month. Additionally, we are making progress towards monetizing our optionally convertible debentures issued by the eye out ahead of the anticipated closing of R&D at transaction executing the intended purpose of the debentures in serving as a liquid asset to backstop outstanding receivable.

Speaker Change: <unk> balances, we expect to use the anticipated proceeds from the India stay out to pay down existing indebtedness.

Speaker Change: We will continue to keep our shareholders informed as incremental progress was made towards the closing of our transaction. Finally, we successfully accessed the debt capital markets last month issuing $1 $3 billion in senior unsecured notes at a weighted average cost of five 3% with proceeds used to.

Rodney Smith: Next, in India, the collections trends we saw in Q4 of 2023 continued into Q1, allowing us to reverse approximately $29 million of previously reserved revenue. Separately, while we continue to anticipate a second half 2024 closing on our sale of ATC India to Brookfield, we have already made progress in accelerating certain payments included in the potential $2.5 billion total proceeds associated with the transaction, including the repatriation of approximately $100 million net of withholding tax back to the U.S. earlier this month.

Speaker Change: Pay down floating rate debt.

Speaker Change: Turning to first quarter property revenue and organic tenant billings growth on slide six consolidated property revenue growth was three 3% or over four 5%, excluding noncash straight line revenue, while absorbing roughly 100 basis points of FX headwinds U S and Canada property revenue growth was approximately one 8%.

Speaker Change: <unk> or over 4%, excluding straight line, which includes over 1% impact from sprint churn International revenue growth was approximately three 7% or roughly 6% excluding the impacts of currency fluctuations, which includes a benefit associated with the improved collections in India, partially offset by.

Rodney Smith: Additionally, we are making progress towards monetizing our optionally convertible debentures issued by VIL ahead of the anticipated closing of our India transaction. Executing the intended purpose of the debentures in serving as a liquid asset to backstop outstanding receivable balances. We expect to use the anticipated proceeds from the India sale to pay down existing indebtedness.

Speaker Change: The timing of the sale of our Mexico fiber business at the end of Q1 in 2023, and a reduction in Latin America termination fees as compared to the prior year finally revenue in our datacenter business increased by 10, 6% continuing the outperformance versus our initial underwriting plan as strong demand for <unk>.

Rodney Smith: We will continue to keep our shareholders informed as incremental progress is made towards the closing of our transaction. Finally, we successfully accessed the debt capital markets last month, issuing $1.3 billion in senior unsecured notes at a weighted average cost of 5.3%, with proceeds used to pay down floating rate debt. Turning to first quarter property revenue and organic tenant buildings growth on slide six, consolidated property revenue growth was 3.3% or over 4.5% excluding non-cash straight line revenue, while absorbing roughly 100 basis points of FX headwinds.

Speaker Change: Hybrid and multi cloud architecture continues and the backlog a record new business signed over the last two years begins to commence in a meaningful way.

Speaker Change: Moving to the right side of the slide consolidated organic tenant billings growth was five 4% supported by strong demand across our global footprint and our U S and Canada segment organic tenant billings growth was four 6% and over five 5% absent sprint related churn as expected growth in the quarter was <unk>.

Speaker Change: Slightly below our full year guidance of four 7% as we lap modestly elevated churn that commenced in Q2 of 2023, we would expect Q2 and Q3 growth rates to each accelerate to roughly 5% before a step down in Q4 as we commenced the final tranche of contracted sprint churn.

Rodney Smith: U.S. and Canada property revenue growth was approximately 1.8 percent or over 4 percent excluding straight line, which includes over 1 percent impact from sprint churn. International revenue growth was approximately 3.7 percent, or roughly 6 percent excluding the impacts of currency fluctuations, which includes a benefit associated with improved collections in India, partially offset by the timing of the sale of our Mexico fiber business at the end of Q1 in 2023 and a reduction in Latin America termination fees as compared to the prior year.

Speaker Change: All supportive of our 2024 outlook expectation.

Speaker Change: Our international segment drove six 5% and organic tenant billings growth, reflecting an expected step down from the Q4 2023 rate of seven 7% as we see moderation in CPI linked escalators.

Rodney Smith: Finally, revenue in our data center business increased by 10.6 percent, continuing the outperformance versus our initial underwriting plan as strong demand for hybrid and multi-cloud IT architecture continues and the backlog of record new business signed over the last two years begins to commence in a meaningful way. Moving to the right side of the slide, consolidated organic tenant building growth was 5.4 percent, supported by strong demand across our global footprint. In our U.S. and Canada segment, organic tenant buildings growth was 4.6 percent, and over 5.5 percent absent sprint-related churn. As expected, growth in the quarter was slightly below our full-year guidance of 4.7 percent.

Speaker Change: Meanwhile, contribution from co location and amendments remained strong with another sequential acceleration in Europe, and a continuation of elevated contribution rates of around 8% in Africa.

Speaker Change: Turning to slide seven adjusted EBITDA grew five 2% or nearly 8% excluding the impact of noncash straight line, while absorbing 90 basis points and FX headwinds.

Speaker Change: Cash adjusted EBITDA margins improved approximately 240 basis points year over year to 64, 9%, taking certain expense timing in any reserve benefits and further supported by our ongoing cost management focus in fact cash SG&A, excluding bad debt declined approximately five.

Rodney Smith: As we lap modestly elevated churn that commenced in Q2 of 2023, we would expect Q2 and Q3 growth rates to each accelerate to roughly 5 percent before a step-down in Q4 as we commence the final tranche of contracted sprint churn, all supportive of our 2024 outlook expectation. Our international segment drove 6.5% of organic tenant building growth, reflecting an expected step down from the Q4 2023 rate of 7.7%, as we see moderation in CPI-linked escalators. Meanwhile, contributions from co-location and amendments remain strong, with another sequential acceleration in Europe and a continuation of elevated contribution rates of around 8% in Africa.

Speaker Change: <unk> year over year in Q1 and was down roughly 7% off our Q1 2022 levels. Additionally, gross margin from our U S services business came in just over $16 million a decline of roughly 50% year over year, though representing an acceleration of nearly 70%.

Speaker Change: Off our Q4 2023 levels. This performance together with the broad based application pipeline buildup discussed by Steve in his prepared remarks gives us confidence in our expectation for accelerating activity continuing through the duration of the year and is supportive of our full year U S services outlook.

Speaker Change: Moving to the right side of the slide attributable <unk> and attributable <unk> per share grew by 10% and nine 8% respectively supported by high conversion of cash adjusted EBITDA growth to attributable <unk>.

Rodney Smith: Turning to slide 7, adjusted EBITDA group 5.2% or nearly 8% excluding the impacts of non-cash straight line while absorbing 90 basis points and FX headwinds. Cash-adjusted EBITDA margins improved approximately 240 basis points year-over-year to 64.9%, taking certain expense timing in Indy Reserve benefits and further supported by our ongoing cost management focus. In fact, cash SG&A excluding bad debt declined approximately 5% year-over-year in Q1 and was down roughly 7% off our Q1 2022 levels.

Speaker Change: Now shifting to our revised full year outlook as I mentioned, we are pleased with the results to date in the sustainable demand trends underpinning our performance. However, given the close proximity to our previously released guidance. We have kept core full year assumptions largely unchanged with that in mind, our revised outlook.

Speaker Change: Includes several notable updates first we have taken the strong collections activity in India through the first quarter, which as I mentioned earlier resulted in approximately $29 million in revenue reserve reversals compared to approximately $16 million in revenue reserves assumed for Q1 in our prior outlook.

Rodney Smith: Additionally, gross margin from our U.S. services business came in just over $16 million, a decline of roughly 50% year-over-year, though representing an acceleration of nearly 70% off our Q4 2023 levels. This performance, together with the broad-based application pipeline buildup discussed by Steve in his prepared remarks, gives us confidence in our expectation for accelerating activity continuing through the duration of the year and is supportive of our full-year U.S. services outlook. Moving to the right side of the slide, attributable AFFO and attributable AFFO per share grew by 10% and 9.8%, respectively, supported by a high conversion of cash-adjusted EBITDA growth to attributable AFFO.

Speaker Change: Resulting in a net benefit to plan of $45 million for property revenue adjusted EBITDA and attributable <unk>.

Speaker Change: Reserve assumptions for April through December remained unchanged, resulting in a net reserve for the year of $20 million compared to the prior outlook assumption of $65 million.

Speaker Change: Next we have revised our FX assumptions for the year, resulting in a modest headwind compared to our prior outlook.

Speaker Change: Finally, while our net interest assumptions remain relatively unchanged, we have increased our interest expense due to elevated rates.

Rodney Smith: Now, shifting to our revised full-year outlook. As I mentioned, we are pleased with the results to date and the sustainable demand trends underpinning our performance. However, given the close proximity to our previously released guidance, we have kept core full-year assumptions largely unchanged.

Speaker Change: Which was partially offset by modest interest expense reductions through a reduced debt balance attributed to the accelerated India proceeds I mentioned earlier and further offset by higher interest income.

Speaker Change: With that let's dive into the numbers.

Speaker Change: Turning to slide eight we are increasing our expectations for property revenue by approximately $30 million compared to prior outlook driven by $45 million of upside related to the positive collections in India. During the first quarter, partially offset by $15 million associated with negative FX impacts.

Rodney Smith: With that in mind, our revised outlook includes several notable updates. First, we have taken the strong collections activity in India through the first quarter, which, as I mentioned earlier, resulted in approximately $29 million in revenue reserve reversals compared to approximately $16 million in revenue reserves assumed for Q1 in our prior outlook, resulting in a net benefit to plan of $45 million for property revenue, adjusted EBITDA, and attributable AFFO. Reserve assumptions for April through December remain unchanged, resulting in a net reserve for the year of $20 million compared to the prior outlook assumption of $65 million.

Speaker Change: We are reiterating our prior outlook expectations for organic tenant billings growth across all regions, including approximately four 7% in the U S and Canada, 11% to 12% and Africa, 5% to 6% in Europe, and 2% in both Latam and APAC collectively driving approximately.

Speaker Change: <unk>, 5% for international and 5% on a consolidated basis, we will continue to assess our first quarter momentum as we work through the year.

Rodney Smith: Next, we have revised our FX assumptions for the year, resulting in a modest headwind compared to our prior outlook. Finally, while our net interest assumptions remain relatively unchanged, we have increased our interest expense due to elevated rates, which was partially offset by modest interest expense reductions through a reduced debt balance attributed to the accelerated India proceeds I mentioned earlier and further offset by higher interest income. With that in mind, let's dive into the numbers.

Speaker Change: Turning to slide nine we are increasing our adjusted EBITDA outlook by $40 million as compared to prior outlook driven by the flow through of the revised revenue reserve assumptions in India, partially offset by $5 million of FX headwinds.

Rodney Smith: Turning to slide eight, we are increasing our expectations for property revenue by approximately $30 million compared to prior outlook, driven by $45 million of upside related to the positive collections in India during the first quarter, partially offset by $15 million associated with the negative FX impact. We are reiterating our prior outlook expectations for organic tenant building growth across all regions, including approximately 4.7% in the U.S. and Canada, 11 to 12% in Africa, 5 to 6% in Europe, and 2% in both LATAM and APAC, collectively driving approximately 5% for international and 5% on a consolidated basis.

Moving to slide 10, we are similarly, raising our expectations for <unk> attributable to common stockholders by $40 million at the midpoint and approximately nine on a per share basis, moving the midpoint of $10 42.

Speaker Change: Supported by the revised indeed reserve assumption benefits, partially offset by FX.

Speaker Change: As I mentioned, although we are raising expectations for interest expense. It is offset on the net basis by a similar increase in interest income.

Speaker Change: Turning to slide 11, we are reiterating our capital allocation plans for 2024, which is focused on selectively funding projects, we expect to drive the most attractive risk adjusted rates of return sustained growth and quality of earnings executing on an accelerated pathway to balance sheet strength and financial flexibility and <unk>.

Rodney Smith: We will continue to assess our first quarter momentum as we work through the year. Turning to slide nine, we are increasing our adjusted EBITDA outlook by $40 million as compared to the prior outlook, driven by the flow through the revised revenue reserve assumptions in India, partially offset by $5 million of FX headwind. Moving to slide 10, we are similarly raising our expectations for AFFO attributable to common stockholders by $40 million at the midpoint and approximately $0.09 on a per share basis, moving the midpoint to $10.42, supported by the revised Indy Reserve Assumption Benefits, partially offset by FX.

Speaker Change: Levering an attractive total shareholder return profile as discussed on our Q4 2023 earnings call. This includes maintaining a relatively flat annual common dividend declaration of $6 48 per share or approximately $3 billion in 2024 with an expectation to resume <unk>.

Speaker Change: <unk> again in 2025, all subject to board approval.

Speaker Change: Moving to the right side of the slide our disciplined approach to capital allocation together with recurring topline growth and its high conversion to profitability through cost management all support the progress we've made to achieving our goal of five times net leverage by the end of the year.

Rodney Smith: As I mentioned, although we are raising expectations for interest expense, it is offset on a net basis by a similar increase in interest income. Turning to slide 11, we are reiterating our capital allocation plans for 2024, which is focused on selectively funding projects we expect to drive the most attractive, risk-adjusted rates of return, sustained growth, and quality of earnings, executing on an accelerated pathway to balance sheet strength and financial flexibility, and delivering an attractive total shareholder return profile.

Speaker Change: While our Q1 net leverage already stands at five times. It is important to note that the metrics in this quarter benefits from the Indian Reserve reversals previously mentioned and we'd expect to be above five times in Q2.

Speaker Change: These efforts combined with our successful capital markets execution year to date have further reinforced our investment grade balance sheet as a strategic asset which will remain a key focus moving forward.

Rodney Smith: As discussed on our Q4 2023 earnings call, this includes maintaining a relatively flat annual common dividend declaration of $6.48 per share, or approximately $3 billion in 2024, with an expectation to resume growth again in 2025, all subject to board approval. Moving to the right side of the slide, our disciplined approach to capital allocation, together with recurring top-line growth and its high conversion to profitability through cost management, all support the progress we've made toward achieving our goal of five times net leverage by the end of the year.

Turning to slide 12, and in summary, we are off to a great start to 2024, our visibility into a solid foundation of recurring contracted growth across our global business combined with an accelerating pipeline supporting our expectations for future activity, a keen focus on cost discipline and margin expansion and a continued derma.

Speaker Change: Australia of strategically deploying capital, while enhancing balance sheet strength gives us a high degree of confidence in our ability to drive strong sustained growth over the long term for our shareholders, while being a best in class operator for our stakeholders globally.

Rodney Smith: While our Q1 net leverage already stands at five times, it is important to note that the metric for this quarter benefits from the Indian Reserve reversals previously mentioned, and we'd expect it to be above five times in Q2. These efforts, combined with our successful capital markets execution year to date, have further reinforced our investment grade balance sheet as a strategic asset, which will remain a key focus moving forward. Turning to slide 12, and in summary, we are off to a great start to 2024.

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

Speaker Change: Thank you, ladies and gentlemen, if you'd like to ask a question. Please press. One then zero on your telephone keypad you may withdraw your question at any time by repeating the one zero command if youre using a speakerphone. Please pick up the handset before pressing the numbers. Once again, if you have a question. Please press one zero at this time.

Speaker Change: And one moment. Please for your first question.

Yeah.

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

Rodney Smith: Our visibility into a solid foundation of recurring contracted growth across our global business, combined with an accelerating pipeline supporting our expectations for future activity, a keen focus on cost discipline and margin expansion, and a continued demonstration of strategically deploying capital while enhancing balance sheet strength, gives us a high degree of confidence in our ability to drive strong, sustained growth over the long term for our shareholders while being a best-in-class operator for our stakeholders globally. With that operator, we can open the line for questions.

Matt: Hey, guys congrats on the quarter. Thanks for taking the question.

Matt: Just two if I could first on the U S. Maybe you can get a little bit more color on the acceleration in activity.

Matt: So in the quarter and maybe what that implies for services and new leasing expectations going forward and more curious whether this was broad base across.

Matt: Across the big three and maybe even dish are more limited in nature and then secondly on data centers I think you talked about your highest quarter of side retail leasing since for Q 'twenty.

Operator: Thank you. Ladies and gentlemen, if you'd like to ask a question, please press 1 and 0 on your telephone keypad. You may withdraw your question at any time by repeating the 1-0 command. If you are using a speakerphone, please pick up the handset before pressing the numbers.

Matt: Any color you can share in terms of what's driving the uptick in new business and it seems to imply there isn't much in the way of macro headwinds or caution that some of your peers have talked about but again just curious if there are any signs of macro caution there. Thanks.

Operator: Once again, if you have a question, please press 1 and 0 at this time. In one moment, please, for your first question. Your first question comes from the line of Matt Niknam from Deutsche Bank. Please go ahead.

Speaker Change: Sure. Thanks for the question.

Speaker Change: In the U S.

Speaker Change: We're seeing an acceleration in Q1 relative to Q4.

Speaker Change: Our application pipeline coming into Q1 was about 70% higher than Q4.

Matthew Niknam: Hey guys, congratulations on the quarter. Thanks for taking the question. Just two if I could.

Speaker Change: Our services gross margin came in at about 16 million in the quarter, which was higher than we'd expected. So what we're seeing is an acceleration of activity that really underpins. The guidance that we gave last quarter and just kind of reiterate what that is on our services. We're expecting our services were about $195 million in.

Matthew Niknam: First, on the US, maybe we can get a little bit more color on the acceleration and activity you saw in the quarter, and maybe what that implies for services and new leasing expectations going forward. And more curious whether this was broad-based across the big three, and maybe even BISH, or more limited in nature. And then secondly, on data centers, I think you talked about your highest quarter of signed retail leasing since 4Q20.

Speaker Change: Revenue of about $100 million in gross margin.

Speaker Change: For services is inherently hard to predict sometimes.

Matthew Niknam: Any color you can share in terms of what's driving the uptick in new business? And it seems to imply there isn't much in the way of macro headwinds or caution that some of your peers have talked about. But again, just curious if there are any signs of macro caution there. Thanks.

Speaker Change: Activity, we're seeing in Q1, along with the conversations we're having with kind of the boots on the ground teams from our customers.

Speaker Change: This is confidence that we're going to hit that that services guide for the year.

Speaker Change: We'll continue to watch it and see how that cadence goes throughout the rest of the year, but everything we're seeing in Q1.

Steven O. Vondran: Sure, thanks for the question. In the US, again, we're seeing an acceleration in Q1 relative to Q4. And our application pipeline coming in for Q1 was about 70% higher than Q4. And our services gross margin came in at about 16 million in the quarter, which was higher than we'd expect.

Speaker Change: It gives us some optimism there.

Speaker Change: When it comes to our property revenue growth from that I can I'll remind you that a lot of our revenue assumptions are underpinned by our accounts comprehensive MLA.

Speaker Change: At this point.

Speaker Change: The acceleration that we're seeing in growth that doesn't change our guidance in terms of what we're expecting to see.

Steven O. Vondran: So what we're seeing is an acceleration in activity that really underpins the guidance we gave last quarter. And just to kind of reiterate what that is, for our services, we're expecting our services to generate about $195 million in revenue, about $100 million in gross margin. And look, while services are inherently hard to predict sometimes, the activity we're seeing in Q1, along with the conversations we're having with kind of the boots on the ground teams from our customers, that gives us confidence that we're going to hit that services guide for the year. And so we'll continue to watch it and see how that cadence goes throughout the rest of the year.

Speaker Change: In the U S.

Speaker Change: Again, I'll reiterate that we're expecting to see organic tenant billings growth of approximately four 7% in the U S.

Speaker Change: And that will be a little bit different quarter by quarter.

Speaker Change: Q1 was four 6% and I would expect that to go up a little bit in the middle of the year and then the final tranche of sprint churn that hits in October we'll weigh that down a bit in Q4.

Speaker Change: But overall, we're encouraged by that in terms of what we're seeing it as fairly broad based I don't want to get into individual customer activity levels, but we are seeing some broad based activity pick up.

Speaker Change: In the U S with all of our major customers.

Speaker Change: Again, we're encouraged that that's going to continue for the rest of the year.

Steven O. Vondran: But everything we're seeing in Q1 gives us some optimism there. When it comes to our property revenue growth from that, again, I'll remind you that a lot of our revenue assumptions are underpinned by our comprehensive MLAs. So at this point, the acceleration that we're seeing in growth doesn't change our guidance in terms of what we're expecting to see in the U.S. Again, I'll reiterate that. We're expecting to see organic tenant building growth of approximately 4.7% in the U.S. And that will be a little bit different quarter by quarter.

Speaker Change: When it comes to core site.

Speaker Change: Yeah, we have two years of kind of record sales and we have a healthy pipeline. This year that we've got a tough comp compared to last year. So I don't know that we will.

Speaker Change: <unk> had another record year of sales, but we're hoping and we did have a very strong quarter on retail. This year that was really exciting to see in terms of the headwinds for that business.

Speaker Change: We're very optimistic about what we're seeing again, what's underpinning the growth of course like right now the bulk of that growth is being driven by enterprises that are going to hybrid cloud.

Steven O. Vondran: In Q1, it was 4.6%, and we'll expect that to go up a little bit in the middle of the year, and then the final tranche of sprint churn that hits in October will weigh that down a bit in Q4. But overall, we're encouraged by that. In terms of what we're seeing, it is fairly broad-based.

Speaker Change: Okay.

Speaker Change: Infrastructure and there's a long tail of that that we see out there there's still a lot of companies that have their own data centers and there are a lot of companies that went cloud native or that pet food everything to the cloud and they're looking for a different cost structure on a go into this hybrid environment and that's still the biggest driver we have it we see a very very long tail of that activity out there.

Speaker Change: Are seeing an uptick in activity from AI particular, the inferencing portion of AI models is kind of perfectly suited for core site.

Steven O. Vondran: I don't want to get into individual customer activity levels, but we are seeing some broad-based activity pickup in the U.S. with all of our major customers, and again, we're encouraged that that's going to continue for the rest of the year. When it comes to CoreSite, we have had two years of kind of record sales, and we have a healthy pipeline this year. And we've got a tough comp compared to last year, so I don't know that we'll achieve another record year of sales, but we're hoping. And we did have a very strong quarter in retail this year, and that was really exciting to see. In terms of the headwinds for that business, we're very optimistic about what we're seeing. Infrastructure.

Speaker Change: Got it.

Speaker Change: Had these large learning models that are done.

Speaker Change: Hyperscale data centers, but when you start interfacing with the users.

Speaker Change: Provide that data to them and also get input from them you need a distribution channel and of course site is perfectly suited to provide that type of distribution. So we are seeing some activity there.

Speaker Change: In terms of kind of industry headwinds, we're not seeing a falloff in our funnel today, we're watching it just like everyone else's.

Speaker Change: Some of the things that people have highlighted some of the demand or the.

Speaker Change: Supply issues are things actually drive pricing up so where we have.

Speaker Change: Markets that are constraining supply, that's actually driving pricing up we've got more megawatts under construction today than we ever had before of course site. So we're planning for the mines demand cycle to continue but I'll just reiterate that a large portion of that is pre leased more than we ever have before.

Steven O. Vondran: And there's a long tail of that that we see out there. There are still a lot of companies that have their own data centers, and there are a lot of companies that went cloud native, or that moved everything to the cloud. And they're looking for a different call structure, and they're going to this hybrid environment. And that's still the biggest driver we have.

Speaker Change: Fact, our pre leasing percentage right now.

Speaker Change: The stuff that we have under construction is about 35%, but that's down a tick from last quarter, because we've placed some things in service.

Steven O. Vondran: And we see a very, very long tail of that activity out there. We are seeing an uptick in activity from AI, particularly the inferencing portion of AI models, which is kind of perfectly suited for CoreSight. You're going to have these large learning models that are done in the big hyperscale data centers, but when you start interfacing with users to provide that data to them and also get inputs from them, you need a distribution channel, and CoreSight is perfectly suited to provide that type of distribution.

Speaker Change: But we're still seeing healthy demand for pre leasing will continue to explore that as well.

Speaker Change: We're still seeing growth in interconnect.

Speaker Change: And I know that there's some been some discussion out there about grooming of cross connects and Thats something that we constantly see with customers is they're trying to optimize our cost structure, but even with a little bit of grooming going on we're still seeing healthy growth there.

Speaker Change: So again I think we're very optimistic about the demand for core site pipeline that we're seeing.

Speaker Change: Hoping for another record year of sales, but that's a tough comp. So I am sure. My sales team was cringing here, let me say that.

Steven O. Vondran: So we are seeing some activity there. In terms of kind of industry headwinds, we're not seeing a fall off in our funnel today. We're watching it just like everyone else is.

Speaker Change: But we feel good about it but we're not seeing headwinds weigh on it today.

Speaker Change: But again, we're watching the market just like everybody else's and will be appropriately cautious if we see if.

Steven O. Vondran: Some of the things that people have highlighted, some of the demand and supply issues, are things that actually drive prices up. So where we have markets that are constrained by supply, that's actually driving prices up. We've got more megawatts under construction today than we ever have before at CoreSight, so we're planning for that demand cycle to continue, but I'll just reiterate that a large portion of that's pre-leased more than we ever have before.

Speaker Change: If we see that demand slowing down, but that's not what we're seeing from our sales teams today.

Speaker Change: Hey, Matt This is rod if I could just add briefly here one or two comments so with core site as Steve said, we've had record levels of new business in the past and what that is leading to is higher revenue growth now as we're delivering that new business that we signed up over the last couple of years. So you saw in the quarter, we had north of 10% revenue growth.

Steven O. Vondran: In fact, our pre-leasing percentage right now of the stuff that we have under construction is about 35%, and that's down a tick from last quarter because we've placed some things in service, but we're still seeing healthy demand for pre-leasing, and we'll continue, We're still seeing growth in InterConnect, and I know that there's been some discussion out there about grooming of CrossConnects, and that's something that we constantly see with customers as they're trying to optimize their cost structure, but even with a little bit of grooming going on, we're still seeing healthy growth there. So again, I think we're very optimistic about the demand for CoreSight, the pipeline that we're seeing, hoping for another record year of sales, but that's a tough comp, so I'm sure my sales team is cringing hearing me say that, but we feel good about it, and we're not seeing headwinds weigh on it today, but again, we're watching the market just like everybody else is, and we'll be appropriately cautious if we see that demand slowing down, but that's not what we're seeing from our sales teams today.

Speaker Change: Right as I said in my prepared remarks that is the result of delivering on that new business those record levels of new business, we signed up over the last couple of years. The last couple of years of New base of ours has also led to a high level of backlog. So were up in the close to $60 million in terms of backlog, which is.

Speaker Change: Signed deals that we haven't commenced into revenue yet that's up from a run rate of in closer to 40 or $45 million in the last couple of years or so.

Speaker Change: The new business, we sign up it translates into backlog and then it translates into revenue and revenue growth. So with the activity level. We've seen in the last couple of years. The high backlog, we have today that positions core site very well they have high levels of growth over the next couple of years.

Speaker Change: I appreciate it. Thank you both for all that color.

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

Michael Ian Rollins: Thanks, and good morning, just following up on your comments regarding the pickup in domestic activity in the first quarter do you see this as a rising tide for the tower category or do you see American tower, taking share from your competitors and then secondly, yes.

Rodney Smith: Hey Matt, this is Rod. If I could just add briefly here one or two comments. So with CoreSight, as Steve said, we've had record levels of new business in the past, and what that is leading to is higher revenue growth now as we're delivering that new business that we signed up over the last couple of years. So you saw in the quarter, we had a north of 10% revenue growth rate. As I said in my prepared remarks, that is the result of delivering on that new business, those record levels of new business we signed up over the last couple of years.

Speaker Change: Yes, you referenced.

Speaker Change: I think in one of the slides and some of your comments.

Speaker Change: That the activity is supporting your long term guide for the domestic business. If you can recap for us where you see the longer term average annual organic tenant billings growth and how these changes in activity levels may influence those outcomes.

Speaker Change: Yes.

Speaker Change: Sure. Thanks for the question so.

Rodney Smith: The last couple of years of new business has also led to a high level of backlog. So we're up in the close to $60 million in terms of backlog, which is signed deals that we haven't commenced revenue on yet. That's up from a run rate of closer to $40 or $45 million in the last couple of years. So the new business we sign up, it translates into backlog, and then it translates into revenue and revenue growth.

Speaker Change: What we're seeing in the U S. It's clearly it's one quarter results kind of get the conversations that we're having.

Speaker Change: Give us the optimism that our our guide for the year.

Speaker Change: Is kind of spot on in terms of the customer starting to ramp up I don't have a lot of visibility into what my competitors are seeing sorry topic I can give an opinion on whether what we're seeing is materially different than what they're seeing.

Matthew Niknam: I appreciate it. Thank you both for all that color.

Speaker Change: But when I reflect on what the customers need to do.

Michael Ian Rollins: Your next question comes from the line of Michael Rollins from City. Please go ahead.

Speaker Change: To complete their good band fiber Rollouts.

Speaker Change: When I think about what the book there.

Michael Ian Rollins: Thanks and good morning. Just following up on your comments regarding the pickup in domestic activity in the first quarter, do you see this as a rising tide for the tower category, or do you see American Tower taking share from your competitors? And then secondly, you referenced, you know, I think in one of the slides and some of your comments, that the activity is supporting your long-term guide for the domestic business. Can you recap for us where you see the longer-term average annual organic tenant billing growth and how these changes in activity levels may influence those outcomes? Thanks.

Speaker Change: Their long term goals are on their network, there's a lot of work yet to be done so.

Speaker Change: I think that we're seeing play out is the same cycle. We saw in <unk>, what we saw in <unk>, where there's an initial push then there's a little bit of a slowdown while they're optimizing their network and then there's another flush and I think that we're starting to see that.

Speaker Change: Where do you think we really differentiate ourselves.

Speaker Change: Is that our MLA as do provide a little bit of an easy button for our customers and we're able to give them great speed to market great cost predictability.

Speaker Change: Think that that does give us greater market share over time.

Steven O. Vondran: Sure. Thanks for the question.

Speaker Change: Back to your kind of our.

Speaker Change: Our.

Speaker Change: Longer term guide for the U S. Just to remind everyone. We said that we.

Steven O. Vondran: So what we're seeing in the U.S., you know, it's clearly, it's one quarter results, and again, the conversations that we're having give us the optimism that our guide for the year is kind of spot on in terms of customers starting to ramp up. I don't have a lot of visibility into what my competitors are seeing, so I don't think I can give an opinion on whether what we're seeing is materially different from what they're seeing.

Speaker Change: At least 5% organic tenant billings growth on average for the period between 2023 of 2027 and that would be 6%, excluding the sprint churn that we have.

Speaker Change: 2023 that that <unk> number was $5 three and we're projecting four 7% this year and that's all what we're absorbing greater than 100 basis points of sprint for a year and each of those years. So we see the activity levels are very supportive of that long term guide.

Steven O. Vondran: But when I reflect on what customers need to do to complete their mid-band 5G rollouts, and when I think about what their long-term goals are for their networks, there's a lot of work yet to be done. So what I think that we're seeing play out is the same cycle we saw in 4G, the same cycle we saw in 3G, where there's an initial push, then there's a little bit of a slowdown while they're optimizing their network, and then there's another push. And I think that we're starting to see that.

Speaker Change: And again, we feel good about the cycle or <unk>, we feel good about the.

Speaker Change: Carrier activity that we're seeing and about the way <unk> performing in terms of giving them megabytes of data or gigabytes of data a lot cheaper than they could produce it any other way.

Speaker Change: Thanks, and just one other quick one any shift in the mix between amendments.

Speaker Change: Vacation within the domestic activity.

Speaker Change: Well a little bit.

Steven O. Vondran: Now, where I do think we've really differentiated ourselves is that our MLAs do provide a little bit of an easy button for our customers, and we're able to give them great speed to market, great cost predictability, and I think that that does give us greater market share over time. Back to kind of our longer-term guide for the U.S., just to remind everyone, we said that we expected at least 5% organic tenant building growth on average for the period between 2023 and 2027, and that would be 6% excluding the short term that we have.

Speaker Change: Again, I think when you think about these cycles with the carriers build in the first push that you see is always a coverage network and that implies overlays on existing sites and then when they they slow down and start optimizing part of that optimization is infill to give better quality of service, where they might have some coverage gaps or might not be getting the optimal search.

Speaker Change: This is not always employers more co locations. So we are seeing some demand for that as well.

Speaker Change: Again, where we.

Speaker Change: We see some kind of broad based activity. So we're seeing both and we're seeing that across the carriers.

Steven O. Vondran: In 2023, that OTBG number was 5.3, and we're projecting 4.7% this year, and that's all while we're absorbing greater than 100 basis points of sprint chart a year in each of those years. So we see the activity levels very supportive of that long-term guide, and again, we feel good about the cycle of 5G. We feel good about the carrier activity that we're seeing and about the way 5G is performing in terms of giving them megabytes of data or gigabytes of data a lot cheaper than they could produce it any other way.

Speaker Change: And again I would just remind folks that we do have comprehensive MLA in place with some of our customers that smooth out some of those cycles of the ups and downs of the activity levels.

Speaker Change: Did disclose in Q1 that one of our major customers rolled off of their conferences or noise and so for that customer when you come off the comprehensive portion and go to more of the kind of pay by the drink. There is more seasonality in terms of the commencement of those leases as they sign them and so from that perspective.

Speaker Change: Activity levels will drive.

Michael Ian Rollins: Thanks. And just one other quick one. Any shift in the mix between

Speaker Change: Yeah.

Speaker Change: Portion of our business.

Speaker Change: Other than they do for the ones that are the comprehensive MLA.

Speaker Change: Thanks for all those details.

Michael Ian Rollins: It is mixed between amendments and densification within the domestic activity.

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

Steven O. Vondran: Again, I think when you think about these cycles that the carriers build in, the first push that you see is always a coverage network, and that implies overlays on existing sites. And then when they slow down and start optimizing, part of that optimization is infill to give a better quality of service where they might have some coverage gaps or might not be getting optimal service. And that always implies more co-locations.

Simon William Flannery: Great. Thank you good morning, I'm, Steve Thanks for the comments on the portfolio review, maybe you could just review the M&A market more broadly are there.

Simon William Flannery: Things that you might be looking at doing either buying or selling beyond the India situation.

Simon William Flannery: And how you think about that and then.

Simon William Flannery: Another part of the things that come out of that any sort of portfolio assessment and then any updates on the deal timing in India. I think we talked last quarter, perhaps about sort of October 1st just being kind of a.

Steven O. Vondran: So we are seeing some demand for that as well. Again, we see some kind of broad-based activity, so we're seeing both, and we're seeing that across the carriers. And again, I would just remind folks that we do have comprehensive MLAs in place with some of our customers that smooth out some of those cycles of the ups and downs of the activity levels. We did disclose in Q1 that one of our major customers rolled off of their comprehensive MLAs.

Speaker Change: Placeholder, but any updates on regulatory processes in India at this point thanks sure.

Speaker Change: Sure I'll start with India no updates at this point, it's very hard to predict when that approval will come through.

Speaker Change: So we're still expecting second half of the year, but.

Steven O. Vondran: And so for that customer, when you come off the comprehensive portion and get more of the kind of pay-per-drink, there is more seasonality in terms of the commencement of those leases as they sign them. And so from that perspective, activity levels will drive that portion of our business more than they do for the ones that are in the comprehensive MLAs.

Speaker Change: Well, let you know as soon as we know what's happening on that.

Speaker Change: In terms of broader M&A.

Speaker Change: Our teams look at everything that's kind of out there for sale and that's just part of our standard practice, there's nothing that we're seeing that's compelling that would take us off of our capital.

Speaker Change: Allocation priorities that we laid out at the beginning of the year and Thats dessert.

Speaker Change: Our first priority of any of our capital allocation is paying our dividend, but then we're really focused on delevering after that making sure we got to get down to our five times net leverage and so when we're looking at.

Michael Ian Rollins: Thanks for all those details.

Simon William Flannery: Your next question comes from the line of Simon Flannery from Morgan Stanley. Please go ahead.

Simon William Flannery: Great. Thank you. Good morning.

Steven O. Vondran: Steve, thanks for the comments on the portfolio review. Maybe you could just review the M&A market more broadly. Are there things that you might be looking at doing, either buying or selling, beyond the India situation? And how do you think about that? And then, you know, and other things that come out of that, any sort of portfolio assessment. And then, any updates on the deal timing in India? I think we talked last quarter about sort of October 1st just being kind of a, you know, a placeholder. But any updates on regulatory processes in India at this point? Thanks.

Speaker Change: Out there theres nothing that we're seeing today that is strategically important for at the right price that would make us.

Speaker Change: Like has changed your mind on that at this point.

Speaker Change: When it comes to our own portfolio, that's what I'd be clear about this we're not doing a strategic review specifically if anything meeting there is nothing that we're.

Speaker Change: Intending to sell out there today.

Speaker Change: I said that we do have some businesses that may not be strategic for us or they may not be.

Speaker Change: Scale and if the right buyer with the right price came along we would consider something there but.

Speaker Change: But as we look at our portfolio kind of across the globe.

Speaker Change: Our goal is to figure out.

Speaker Change: If there are businesses that are not meeting our original underwriting criteria.

Speaker Change: The first thing is what can we do to fixed dose how do we drive greater sales how do we get.

Steven O. Vondran: Sure, I'll start with India. No updates at this point. It's very hard to predict when that approval will come through. So we're still expecting the second half of the year.

Speaker Change: More efficiency in the market to drive margins up.

Speaker Change: And we'll try that first.

Speaker Change: If we decided to exit other market you would have to be because we're getting the right price and that we think its more accretive to our shareholders that hold yet so.

Steven O. Vondran: We'll let you know as soon as we know what's happening with that. In terms of broader M&A, you know, our teams look at everything that's kind of out there for sale, and that's just part of our standard practice. There's nothing that we're seeing that's compelling that would take us off of our capital allocation priorities that we laid out at the beginning of the year, and that is our, you know, our first priority for any of our capital allocations, paying our dividend, but then we're really focused on de-leverage after that, making sure we get down to our five times net leverage.

Speaker Change: So at this point Theres nothing to point to our portfolio.

Speaker Change: We're actively looking to dispose of.

Speaker Change: But again there are some non strategic businesses for us out there that we would consider if the right buyer at the right price came along.

Speaker Change: Alright Thats helpful.

Speaker Change: Simon I'm going to add a couple of comments on India just to give everyone listening a couple of the numbers and a reminder, so.

Simon William Flannery: As Steve said, the timing is still second half of this year everything is going well certainly within our expectation.

Steven O. Vondran: And so when we're looking at the M&A that's out there, there's nothing that we're seeing today that is strategically important or at the right price that would make us, you know, a little bit more competitive or make us change our mind on that this Friday.

Simon William Flannery: I just want to remind everyone that we announced when we signed the deal with Brookfield to sell 100% of India than it would have total proceeds that could be up to two 5 billion that comes in a couple of different forms it'll be $2 billion in terms of the let's call. It the purchase price, which includes the intercompany debt that we have in there as well as <unk>.

Steven O. Vondran: When it comes to our own portfolio, and I just want to be clear about this, we're not doing a strategic review specifically of anything, meaning there's nothing that we're intending to sell out there today. Having said that, we do have some businesses that may not be as strategic for us, or they may not be at scale, and if the right buyer with the right price came along, we would consider selling some of them. But as we look at our portfolio kind of across the globe, our goal is to figure out if there are businesses that are not meeting our original underwriting criteria.

Simon William Flannery: Term loan that we have in India, the intercompany debt.

Simon William Flannery: Little less than a half a billion and then the term loan is about 120. It also includes some working capital some receivables in the OCD that I'm sure you're familiar with it we put in place with with Vio. So the OCD was about $200 million. The other India receivables was a little less.

Simon William Flannery: And about $200 million and then there is also a ticking fee component that we get.

Steven O. Vondran: You know, the first thing is, what can we do to fix that? How do we drive greater sales? How do we get more efficiency in the market to drive margins up? And we'll try that first. If we decided to exit another market, it would have to be because we're getting the right price and that we think it's more creative for our shareholders and hold. So, at this point, there's nothing to point to in our portfolio that we're actively looking to dispose of, but again, you know, there are some non-strategic businesses for us out there that we would consider if the right buyer and the right price came along.

Simon William Flannery: That is based on the mechanics between signing and closing you put all those things together it comes up to about $2 5 billion.

Simon William Flannery: We are in the process of realizing and taking some of these proceeds out of India. So you did see and Youll see in the details we removed about $100 million from India and took it back to the U S. That's based on some of the positive collections trends that we've seen and India those receivables belong to us and as part of the $2 5 billion.

Simon William Flannery: We also converted 90% of the $200 million OCD and then we subsequently liquidated that.

Rodney Smith: Hey Simon, I'm going to add a couple of comments on India just to give everyone listening a couple of the numbers and a reminder. So, as Steve said, the timing is still second half this year.

Simon William Flannery: Kind of.

Simon William Flannery: During and after the successful spo that vil at Dawn, which we were happy.

Simon William Flannery: To see so the 90% of the $200 million that we converted we sold it into the market we realized a little over 200 million on that so that's worked out really well in and again I'll just highlight that it's achieving our original purpose, which is giving us multiple avenues to to liquidate that that receivable balance increasing the probability of actually.

Rodney Smith: Everything is going well, certainly within our expectations. I just want to remind everyone that we announced when we signed the deal with Brookfield to sell 100% of India that it would have total proceeds of up to $2.5 billion. That comes in a couple of different forms. It'll be $2 billion in terms of the, let's call it the purchase price, which includes the intercompany debt that we have in India as well as the term loan that we have in India.

Simon William Flannery: <unk> cash and it worked well so we have over $200 million. We will you will see us remove that from India and bring it back to the U S as well and on closing you will see the 2 billion plus any kind of ticking fee probably be paired up around closing just to give everyone. The mechanics of those and what to expect in terms of.

Rodney Smith: The intercompany debt is a little less than half a billion, and then the term loan is about $120. It also includes some working capital, some receivables, and the OCD that I'm sure you're familiar with that we put in place with VIL. So the OCD was about $200 million. The other India receivables were a little less than $200 million. And then there's also a ticking fee component that we get that is based on the mechanics between signing and closing.

Simon William Flannery: The proceeds on closing.

Speaker Change: That's great Thanks, Rod and any update on dividend policy beyond this year.

Speaker Change: Yes, what we've said is we plan to resume growth in 2025 subject to board approval and we'll give specifics on our Q4 call.

Speaker Change: On February 25, as we always do in terms of what that's going to look like.

Speaker Change: Over the long term what you can think about is that our dividend per share and <unk> per share growth to be similar over the longer term.

Rodney Smith: If you put all those things together, it comes up to about $2.5 billion. We are in the process of realizing and taking some of these profits out of India. So you did see, and you'll see in the details, we removed about $100 million from India and took it back to the U.S. That's based on some of the positive collections trends that we've seen in India. Those receivables belong to us and are part of the $2.5 billion.

Speaker Change: And so there might be some short term.

Speaker Change: Changes in that so for example, with our India divestiture, there will be some dilution per share so there might be a dislocation there from.

Speaker Change: For share growth and what we will see if taxable income.

Speaker Change: Over the long term you can think about those being similar for 2025 in particular will get more specific about that in February of next year.

Speaker Change: Great appreciate it thank you.

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

Rodney Smith: We also converted 90% of the $200 million OCD, and then we subsequently liquidated that right kind of during and after the successful FPO that VIL had done, which we were happy to see. So the 90% of the $200 million that we converted, we sold it into the market, and we realized a little over $200 million on that. So that's worked out really well. And again, I'll just highlight that it's achieving our original purpose, which is giving us multiple avenues to liquidate that receivable balance, increasing the probability of actually realizing cash. And it has worked well.

Richard Hamilton Prentiss: Thanks, Yes.

Richard Hamilton Prentiss: Follow up on Simon's question, there on the dividend I. Appreciate you can't give a lot of color there yet, but what kind of payout ratio are you trying to achieve that is it like a 100% of attributable to <unk> per share was it more like 90% in the growth rate is going to be more on that long term again board decision, but is it more a payout ratio or isn't enough.

Richard Hamilton Prentiss: Salute level or is it growth that youre kind of pairing up dividend per share attributable to <unk> per share.

Richard Hamilton Prentiss: Well, if we continue to grow at kind of in line with our <unk> per share growth you can think of that payout ratio staying kind of in that 60% to 65% range.

Richard Hamilton Prentiss: Okay.

Rodney Smith: So we have over $200 million. You will see us remove that from India and bring it back to the U.S. as well. And on closing, you'll see the $2 billion plus any kind of ticking fee probably be paired up around closing.

Speaker Change: Makes sense.

Speaker Change: And then very quickly.

Speaker Change: Yes, just to add to that quickly record that 65% range. It does leave us between 1 billion and a half in $2 billion of additional let's say <unk> to put towards.

Rodney Smith: That's great. Thanks for that. And any update on that?

Speaker Change: Other uses either capex or anything else, we want to do so that that ratio of that 60% to 65% kind of fits in well with giving us a lot of financial flexibility to invest capital.

Simon William Flannery: That's great. Thanks, Rod. And any update on dividend policy beyond this year?

Rodney Smith: Yeah, what we've said is we plan to resume growth in 2025, subject to board approval, and we'll give specifics on our Q4 call, February 25, as we always do in terms of what that's going to look like. Over the long term, what you can think about is that our dividend per share and AFFO per share grow to be similar over the longer term. And so there may be some short-term changes to that.

Speaker Change: It's a good thing not to pay it all out leave yourself some room to grow the business right appreciate that.

Speaker Change: One question, we get a lot and Steve you talked to a lot on the call already prepared remarking questions, Michael and others.

Speaker Change: About U S green shoots possibility of improvement a lot of investors, we've talked to always look to like carrier Capex and.

Rodney Smith: So, you know, for example, with our India divestiture, there will be some dilution in AFFO per share. So there might be a dislocation there from the AFFO per share growth and what we will see in taxable income. So over the long term, you can think about those being similar, but for 2025, in particular, we'll get more specific about that in February of next year.

Speaker Change: And you pointed to it as well as new carrier Capex isn't indicated but not a perfect linear indicator of leasing can you help us understand how you look at carrier Capex and why it may or may not be a perfect indicator to what can happen in any given quarter or a year on the leasing activity you see.

Simon William Flannery: Great. I appreciate it.

Speaker Change: Sure Im happy to thanks for the question Rick.

Richard Hamilton Prentiss: Your next question comes from the line of Rick Prentiss from Raymond James. Please go ahead.

Speaker Change: So when you look at carrier Capex first I would point out that we're seeing the estimates for carrier Capex and <unk> are around that 35 $36 billion per year, Mark on average and that's up about five or $6 billion from what we saw in <unk> and that was up five or 6 billion from <unk>. So we do see.

Richard Hamilton Prentiss: Thanks. Yeah, I want to follow up on Simon's question there about the dividend. I appreciate you can't give a lot of color there yet, but what kind of payout ratio are you trying to achieve with that? Is it then like a hundred percent of attributable AFFO per share? Was it more like 90% and the growth rate's going to be more on that long-term, again, board decision, but is it more a payout ratio or is it an absolute level, or is it growth that you're kind of pairing up dividend per share with attributable AFFO per share?

Speaker Change: <unk> overall capex increasing.

Speaker Change: The reason, it's not a perfect algorithm for growth.

Speaker Change: Tower side is that Capex goes to a lot of different uses it's not all going into the radio access network that goes on towers. Some of that Capex goes into the core of the network and some of it goes to the fiber to connect the network.

Speaker Change: There's a lot of Capex, that's not related to just the red on the older sites. So it's not a perfect.

Rodney Smith: Well, if we continue to grow it kind of in line with our FFO per share growth, you can think of that payout ratio staying kind of in that 60-65% range.

Speaker Change: Algorithm for that.

Speaker Change: In fact, I think I'd point, you to one of my customers comments earlier this year, where they said that their C band deployments will continue at pace.

Richard Hamilton Prentiss: [inaudible]

Speaker Change: The savings that Theyre getting in their Capex. This year is coming from corn fiber.

Steven O. Vondran: It's a good thing not to pay it all out and leave yourself some money to grow the business. I appreciate that. One question we get a lot, and Steve, you've talked about it a lot on the call already, prepared marketing questions, Michael and others, about U.S. green shoots, and the possibility of improvement. A lot of investors we talk to always look to like carrier capex, and you've pointed to it as well. I view carrier capex as an indicator, but it is not a perfect linear indicator of leasing.

Speaker Change: So when we think about carrier Capex, what we're really trying to focus on is what we think the capex is going to be all the tower sites themselves.

Speaker Change: While the carriers don't break that out specifically.

Speaker Change: Where we take our market intelligence and what we're hearing from the teams on the ground to get a better idea from our perspective of what the activity is going to be based on what they are preparing to do on their sites.

Speaker Change: And so the Capex does matter if they are spending more capex that does imply generally speaking more activity less means less.

Steven O. Vondran: Can you help us understand how you look at carrier capex and why it may or may not be a perfect indicator of what can happen in any given quarter or year on the leasing activity you see?

Speaker Change: But it's not a perfect algorithm.

Speaker Change: Sure.

Speaker Change: Other thing Michael pointed out it seems to US also that if you do see the shift from.

Steven O. Vondran: Sure, I'm happy to. Thanks for the question, Rick. So when you look at carrier capex, first, I would point out that we're seeing estimates for carrier capex in 5G are around that 35, 36 billion dollars per year mark on average. And that's up about five or six billion from what we saw in 4G, and that was up five or six billion from 3G. So we do see overall capex increasing. The reason it's not a perfect algorithm for growth on the tower side is that capex goes to a lot of different uses. It's not all going into the radio access network that goes on towers.

Speaker Change: Coverage and amendment activity to new lease activity and new co locations. Typically your average rent is going to be higher obviously for new leased an amendment, even though capex might not be very different in the carriers that are another possibility.

Speaker Change: Yes, that's a possibility.

Speaker Change: New lease rate is typically higher than the minimum rate.

Speaker Change: But you get more amendments than you do new leases. So there is a little bit.

Speaker Change: Of a tradeoff there, but look it's all positive and it's all of the things that underpin our long term guidance and that's what our expectation for growth. There is it's a combination of new leases and amendments as we go through the <unk> cycle, It's a long cycle and it's got to replicate very closely what we saw in <unk> and <unk>.

Steven O. Vondran: Some of that CapEx goes into the core of the network, and some of it goes to the fiber to connect the network. And so there's a lot of CapEx that's not related to just the RAD on the site. So it's not a perfect algorithm for that.

Speaker Change: That's what we're seeing play out today.

Speaker Change: So let me circle back last one for me Rod you mentioned.

Steven O. Vondran: And in fact, I think I'll point you to one of my customers' comments earlier this year, where they said that their C-band deployments will continue at pace, and that the savings that they're getting in their CapEx this year are coming from corn fiber. So when we think about CARE CAPEX, what we're really trying to focus on is what we think the CAPEX is going to be on the tower sites themselves. And while the CARES don't break that out specifically, that's where we take our market intelligence and what we're hearing from the teams on the ground to get a better idea from our perspective of what the activity is going to be based on what they're preparing to do on their sites. And so the CapEx does matter. If they're spending more CapEx, that does imply, generally speaking, more activity. Less means less. But it's not a perfect algorithm.

Rodney Smith: Obviously, you have excess cash that you can use for capital allocation construction projects and the returns, but you would also think stock buyback comes into the equation at some point.

Rodney Smith: I know youre trying to get to the five dato help us understand the process getting through India, and then what would trigger and allow you to think that stock buybacks are available option, given where the stock prices.

Speaker Change: Yeah, It's a great question, Rick and as Steve and I have been saying really for the last couple of quarters. We are very focused on driving organic growth very focused on driving operational efficiency, reducing our overall direct and SG&A costs to drive <unk> and <unk> per share growth.

Richard Hamilton Prentiss: And back to another thing Michael pointed out, it seems to us also that if you do see the shift from coverage and amendment activity to new lease activity and new co-locations, typically, your average rent is going to be higher, obviously, for a new lease than an amendment, even though CapEx might not be very different from a carrier. Is that another possibility?

Speaker Change: When it comes to capital allocation, we're very focused on delevering and strengthening our balance sheet and continuing momentum of adding capex in.

Speaker Change: With the best projects that we see driving quality of earnings the right risk profile, the right growth profile over the long term.

Speaker Change: So all that is clear and remains our focus you did see we are at five times. This quarter in terms of net leverage that we've achieved our goal for Q1 I'll point out Rick for you that that was benefited by.

Steven O. Vondran: Yeah, that's a possibility, Rick. A new lease rate is typically higher than an amendment rate, but you get more amendments than you do new leases, so there's a little bit of a trade-off there. But, look, it's all positive, and it's all the things that underpin our long-term guidance, and that's what our expectation for growth is. It's a combination of new leases and amendments. As we go through a 5G cycle, it's a long cycle, and it's going to replicate very closely what we saw in 4G and 3G, and that's what we're seeing playing out today.

Speaker Change: The payments that we saw in India in the absence of lets say the need for the reserve that we had in our outlook. So there is some timing benefits there that could be as much as $40 $45 million in Q1 with that means is we expect that leverage during the year, we'll be back up above five slightly.

Richard Hamilton Prentiss: It helps. I want to circle back to the last one for me. Rod, you mentioned, obviously, you have excess cash that you can use for capital allocation, and construction projects that need returns, but you would also think stock buybacks come into the equation at some point. I know you're trying to get to the 5.0. Help us understand the process of getting through India and then what would trigger and allow you to think that stock buybacks are an available option given where the stock price is at.

Speaker Change: Between now and the end of the year and we're going to continue to work on getting that down to five in a sustainable way and the goal is by the end of the year, we may not get there, but we'll be very close I think it will be in good shape.

Speaker Change: So with all that said at some point when we have leverage at our target range or below in a sustained fashion. Then I think all options are on the table at that point, we regained full financial flexibility in order to really engage in buybacks I think we'd want to see more certainty around the economics more certainty around.

Rodney Smith: Yeah, it's a great question, Rick, and as Steve and I have been saying for the last couple of quarters, we are, you know, very focused on driving organic growth, very focused on driving operational efficiency, reducing our overall direct and SG&A costs to drive AFFO and AFFO per share growth, where when it comes to capital allocation, we're very focused on delevering and strengthening our balance sheet and continuing momentum of adding So all that is clear and remains our focus.

Speaker Change: Issues of <unk>.

Speaker Change: <unk> and interest rates and those sorts of things today I think we all appreciate the fact that there is still a fair amount of uncertainty there and we're going to be prudent and making sure our balance sheet is strong.

Speaker Change: And that we are managing the business effectively to drive <unk> growth that means reducing our floating rate debt, reducing our vulnerability, let's say to changes in short term rates, that's kind of the focus for this year. So I would say when you think about buybacks, Rick it's probably more towards the end of this year, we will be reassessing things.

Rodney Smith: You did see that we are at five times this quarter in terms of net leverage, so we've achieved our goal for Q1. I'll point out, Rick, for you that that was helped by the payments that we saw in India and the absence of, let's say, the need for the reserve that we had in our outlook. So there are some timing benefits there that could be as much as 40 or $45 million in Q1. What that means is we expect that leverage during the year will be back up slightly above five between now and the end of the year, and we're going to continue to work on getting that down to five in a sustainable way, and the goal is by the end of the year. We may not get there, but we'll be very close, I think, and we'll be in good shape.

Speaker Change: At that point, I think we'll be in a little bit.

Speaker Change: Position when it comes to a sustained leverage hopefully by then there's more certainty in the economic outlook and where interest rates are going in at that point, we can.

Speaker Change: We can do a full consideration of different allocation options.

Speaker Change: Well I sure hope so more certainty and visibility. Thanks, so much guys have a good day.

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 my questions I guess first.

David Barden: First question.

Richard Hamilton Prentiss: So with all that said, at some point when we have leverage at our target range or below in a sustained fashion, then I think all options are on the table. At that point, we've regained full financial flexibility. In order to really engage in buybacks, I think we'd want to see more certainty around the economics, more certainty around issues of inflation and interest rates and those sorts of things. Today, I think we all appreciate the fact that there is still a fair amount of uncertainty there, and we're going to be prudent in making sure our balance sheet is strong and that we're managing the business effectively to drive ASFO growth.

David Barden: Would just be related to foreign currency movements.

David Barden: We've been seeing some pretty extraordinary.

David Barden: Moves in the last six months, the Argentinian peso the Nigerian naira.

David Barden: Even more recently the yen.

David Barden: Would you kind of share with us any evolution in your thinking around.

David Barden: Hedging and how that might be impacting your your outlooks as you give them for the year.

Speaker Change: And then the second question would be.

David Barden: We seem to be at a inflection point, maybe and fixed wireless access some carriers getting more aggressive some carriers getting less aggressive.

Richard Hamilton Prentiss: That means reducing our floating rate debt, and reducing our vulnerability, let's say, to changes in short-term rates. That's kind of the focus for this year. So I would say when you think about buybacks, Rick, it's probably more towards the end of this year we'll be reassessing things. At that point, I think we'll be in a little bit different position when it comes to sustained leverage. Hopefully, by then, there will be more certainty about the economic outlook and where interest rates are going, and at that point, we can do a full consideration of different allocation options.

David Barden: Could you kind of share how you are looking at fixed.

David Barden: The fixed wireless access as a <unk>.

David Barden: Increasing contributor or a decreasing contributor to your growth outlook for the macro side. Thank you.

Speaker Change: Hey, David Thanks for the question I'll hit the FX, one and then.

Speaker Change: I think Steve will take the.

Steve: The one on fixed wireless so when it comes to FX Youre, absolutely right to point out we do have some FX headwinds in the business. That's that's clear this year. The FX headwinds that we're really seeing are coming through Africa, and primarily in Nigeria, which I think youre aware of so.

David Barden: Well, I sure hope so. More certainty and visibility. Thanks so much, guys. Have a good day.

David Barden: 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. They would just be related to foreign currency movements. We've been seeing some pretty extraordinary moves in the last six months, you know, the Argentinian peso, the Nigerian naira, and even more recently, the yen.

David Barden: When you look at outlook to outlook, we're down about $15 million in this guide on property revenue just about $5 million on EBITDA and <unk>, which is about a penny.

David Barden: Allusion or headwind when it comes to the outlook adjustment there in the puts and takes there we've seen although for the year year on year, we have an FX tailwind across Latin America outlook to outlook, there's a bit of a headwind that brewed up here in the first quarter and then we have the opposite in Africa, where we have a pretty significant headwind in FX.

Rodney Smith: Could you kind of share with us any evolution in your thinking around hedging and how that might be impacting your outlooks as you give them for the year? And then, similarly, we seem to be at an inflection point maybe in fixed price access, some carriers getting more aggressive, some carriers getting less aggressive. Could you kind of share how you are looking at fixed price access as an increasing contributor or a decreasing contributor to your growth outlook on the macro side? Thank you.

David Barden: Ross the region year on year, but outlook to outlook is actually.

David Barden: A positive kind of tailwind in Africa, so not all currencies kind of move together, we certainly benefit at times more than others in terms of the portfolio effect, where if one currency is under pressure and the other one may be up a little bit. If you look at the spot rates, we actually could improve ravaged by about $17 million, it's too early to bill.

Rodney Smith: Hey David, thanks for the question on fixed wireless. So when it comes to FX, you're absolutely right to point out we do have some FX headwinds in the business. That's clear. This year, the FX headwinds that we're really seeing are coming through Africa and primarily in Nigeria, which I think you're aware of. So when you look at Outlook to Outlook, we're down about $15 million in this guide on property revenue, and just about $5 million on EBITDA on AFFO, which is about a penny dilution or headwind when it comes to the outlook adjustment there.

David Barden: All of that into our outlook, but that's what the spots would would tell us so from a hedging standpoint, I mean, one of the things that we've done is we've diversified our debt structure quite a bit in the last several years and we're up now to about seven 5 billion.

Rodney Smith: And the puts and takes there, we've seen, although for the year, year on year, we have an FX tailwind across Latin America, Outlook to Outlook, there's a bit of a headwind that brewed up here in the first quarter. And then we have the opposite in Africa, where we have a pretty significant headwind in FX across the region year on year, but Outlook to Outlook is actually a positive kind of tailwind in Africa.

David Barden: Dollars of Euro denominated debt to kind of match up with our euro based business that we have.

David Barden: In Europe. The other thing I would say is the international businesses that we have let's say across Latin America, and in Africa and APAC.

David Barden: Cash flow that we generate there we continue to kind of reinvest back in the business. If we don't take it out through our intercompany lending.

Rodney Smith: So not all currencies kind of move together. We certainly benefit at times more than others in terms of the portfolio effect, where if one currency is under pressure, another one may be up a little bit. If you look at the spot rates, we could improve REVs by about $17 million. It's too early to build that into our outlook, but that's what the spot rates would tell us.

David Barden: And of course, when you have devaluation.

David Barden: We're still operating in local currency in those markets. Our P&L is is denominated in local currency. So all of the revenues.

Rodney Smith: So from a hedging standpoint, one of the things that we've done is we've diversified our debt structure quite a bit in the last several years, and we're up now to about $7.5 billion of euro-denominated debt to kind of match up with our euro-based business that we have in Europe. The other thing I would say is the international businesses that we have, let's say across Latin America and Africa in APAC, the cash flow that we generate there, we continue to kind of reinvest back in the business if we don't take it out through our intercompany lending.

David Barden: Revenues and expenses are all in local currency. So a lot of it is translational there isn't a lot of hedging that we can do or we think is prudent to do in Africa and Latin America.

David Barden: But reinvesting those those cash flows back into assets in those regions. I think is a pretty good long term play in terms of creating value for our shareholders, but with that said to the extent that we see any markets that have outsized FX headwinds that certainly comes into our capital allocation thinking in one of the benefits.

Rodney Smith: And of course, when you have devaluation, we're still operating in local currency in those markets. Our P&L is denominated in local currency, so all of the revenues and expenses are all in local currency. So a lot of it is translational. There isn't a lot of hedging that we can do or that we think is prudent to do in Africa and Latin America.

David Barden: Of our portfolio as it is very broad and we don't have to invest capital in every country every year, we can allocate it where it makes most sense for our shareholders and where it will create.

David Barden: The most value and we do that actively and dynamically the other thing you've heard US say this before David we certainly build FX headwinds our FX.

Rodney Smith: But reinvesting those cash flows back into assets in those regions is, I think, a pretty good long-term play in terms of creating value for our shareholders. But with that said, to the extent that we see any markets that have outsized FX headwinds, that certainly comes into our capital allocation thinking. And one of the benefits of our portfolio is that it is very broad, and we don't have to invest capital in every country every year.

David Barden: Impacts into our underwriting model, it's in all of our deals.

David Barden: So we do weighted average cost of capital is country by country. We also have the Fisher effect and an expectation of any.

David Barden: Inflation differentials between the foreign country as well as the U S currency that we invest in and we build that out over the long term within the model. So it's hard to get FX rate in the short term, but I think when you pull that out over a 2030 year period.

Rodney Smith: We can allocate it where it makes most sense for our shareholders and where it will create the most value, and we do that actively and dynamically. The other thing, you've heard us say this before, David, we certainly build FX headwinds or FX impacts into our underwriting model. It's in all of our deals. So we do weighted average cost of capital country by country.

David Barden: You have a much better chance of getting that right in the long term model. So in terms of our underwriting over the long term, we still feel.

David Barden: Good about the portfolio that we have in our ability to handle the FX, but it is important to note that in the short term, we have the ability to lean in and out of different places depending on what's happening in FX is one of those things that we would certainly be looking at.

Steven O. Vondran: We also have the Fisher effect and the expectation of inflation differentials between the foreign country as well as the U.S. currency that we invest in, and we build that in over the long term within the model. So it's hard to get FX right in the short term, but I think when you pull that out over a 20-, 30-year period, you have a much better chance of getting that right in the long run.

Speaker Change: I would just add that we also use contractual mechanisms to also control that to some extent that's very important for us to have CPI linked escalators and all those international markets to make sure that that you do recover some of the differential.

David Barden: From inflation from the U S in those markets and in some markets. We also will have some of the revenues pegged to U S. Dollar for example in Nigeria.

Steven O. Vondran: So in terms of our underwriting for the long term, we still feel good about the portfolio that we have and our ability to handle FX. But it is important to know that in the short term, we have the ability to lean in and out of different places depending on what's happening, and FX is one of those things that we would certainly be looking at. Yeah, I would just add that we also use them.

David Barden: Alright.

David Barden: About 40% of the revenue in Nigeria as pass through power and so that's kind of a kind of passing through at the same rate that we're paying and so that's a little bit of a natural hedge of the remaining 60% about half of that is pegged to the U S. Dollar that we get paid an IRA but it's pegged at whatever the exchange rate is when you go in there. So we do use contractual mechanisms.

David Barden: Hedge as well.

David Barden: As well as what Rod said that our most of our expenses are.

Steven O. Vondran: Yeah, I would just add that we also use contractual mechanisms to some extent. It's very important for us to have CPI-linked escalators in all those international markets to make sure that you do recover some of the differential you have from inflation in the U.S. in those markets. And in some markets, we will also have some of the revenues pegged to the U.S. dollar. For example, in Nigeria, about 40% of the revenue in Nigeria is passed through a power utility.

David Barden: Local currency expenses, so theres, some natural hedge there as well.

David Barden: Thanks.

David Barden: Fixed wireless.

David Barden: So on the fixed wireless side look we're seeing our carrier customers.

David Barden: Aggressively only the end of fixed wireless and.

David Barden: We've always said that that might be one of the first use cases of <unk> and we're seeing that play out.

David Barden: <unk>.

David Barden: The numbers about 10 million subs that were at.

Steven O. Vondran: And so that's kind of passing through at the same rate that we're paying it. So that's a little bit of a natural hedge. The remaining 60%, about half of that is pegged to the U.S. dollar. Now, we get paid in Naira, but it's pegged to whatever the exchange rate is when we bill it there.

David Barden: Total for fixed wireless in the U S. At this point, we're not seeing them deploy stand alone fixed wireless networks by the major carriers, we do have several fixed wireless for some of the small guys the wisps and people like that.

Steven O. Vondran: So we do use contractual mechanisms to hedge as well, as well as what Rod said, that most of our expenses are local currency expenses, so there's some natural hedge there as well. Oh, fixed wireless. So on the fixed wireless side, look, we're seeing our carrier customers aggressively leaning end-to-end wireless, and we've always said that that might be one of the first use cases of 5G, and we're seeing that play out. I think the numbers are about 10 million subs that we're at.

David Barden: But at this point the carriers continue to utilized.

David Barden: The excess capacity they have in their current builds.

David Barden: That means for the long term I think it's too early to say.

David Barden: I'm encouraged by the Rps theyre getting the growth that they're seeing the competitive list that they're showing with the fixed line.

David Barden: Broadband and if those trends continue and if they are able to kind of underwrite some additional.

David Barden: Incremental network builds to support that that would be upside to our base case.

David Barden: <unk> set our long term guide in the U S. We were not anticipating any type of a stand alone fixed wireless build or incremental network activity driven by fixed wireless so that would be upside for us if it happens, but I think it's too early or too early to tell right now what that's going to drive a lot of additional business or not.

Steven O. Vondran: Total for fixed wireless in the U.S. At this point, we're not seeing them deploy stand-alone fixed wireless networks by the major carriers. We do have stand-alone fixed wireless for some of the small guys, the WISPs, and people like that.

Speaker Change: When it got it thanks, Steve I appreciate it.

Steven O. Vondran: But at this point, the carriers continue to utilize the excess capacity they have in their current build. What that means for the long term, I think it's too early to say. I'm encouraged by the RPs they're getting, the growth that they're seeing, and the competitiveness that they're showing with fixed-line broadband. And if those trends continue, and if they're able to kind of underwrite some additional... Incremental network builds to support that would be an upside to our base case.

David Barden: Okay.

Speaker Change: Your next question comes from the line of Nick del Deo from Moffat Nathanson. Please go ahead.

Speaker Change: Hey, good morning, Thanks for taking my questions.

Speaker Change: First on core site.

Speaker Change: Youre MMR per cab growth has been really strong Steve you talked about that a little bit earlier, I guess can you help to decompose the drivers a bit more.

Speaker Change: Like for like pricing gains versus mix changes versus higher consumption per per cabinet might be driving that.

Steven O. Vondran: When we set our long-term guide in the U.S., we were not anticipating any type of standalone fixed wireless build or incremental network activity driven by fixed wireless. So that would be upside for us if it happens, but I think it's too early to tell right now if that's going to drive a lot of additional business or not.

Speaker Change: And you also noted you had a record quarter for retail signings in the quarter.

Speaker Change: I guess more generally can you comment on the mix of retail versus scale deals that you've had in recent periods and what's in your funnel today.

David Barden: Thank you, Steve. I appreciate it.

Nicholas Ralph Del Deo: Your next question comes from the line of Nick Del Dio from Moffitt Nathanson. Please go ahead.

Speaker Change: Sure let me attack the first part of that so when you look at pricing across our markets, what's really driving it is supply and demand dynamics.

Nicholas Ralph Del Deo: Hey, good morning. Thanks for taking my questions. You know, first on CoreSight, your MMR per cab growth has been really strong. You know, Steve, you talked about that a little bit earlier. I guess, can you help to decompose the drivers a bit more?

Speaker Change: So we're seeing similar increases and retail scale and hyperscale pricing in those markets. There is probably a little bit more increase in hyperscale at this point because contiguous capacity is becoming more rare and because of that the lowest pricing to begin with kind of in the markets and so what we've seen across all of our market.

Steven O. Vondran: You know, how like-for-like pricing gains versus mixed changes versus, you know, higher consumption per cabinet might be driving that. And, you know, you also noted you had a record quarter for retail signings in the quarter. I guess more generally, can you comment on the mix of retail versus scale deals that you've had in recent periods and what's in your funnel today?

Speaker Change: <unk> is the supply is less than the demand.

Speaker Change: Part of that's just.

Speaker Change: I think AI and other use cases have taken off faster than people expected and the entire ecosystem has not provided as much capacity as what people are seeking and that's really the underlying driver for for what that pricing is happening in our.

Steven O. Vondran: Sure, let me address the first part of that. So, when you look at pricing across our markets, what's really driving it is supply-demand dynamics. And so we're seeing similar increases in retail scale, hyperscale pricing in those markets. There's probably a little bit more increase in hyperscale at this point, because contiguous capacity is becoming more rare, and because they have the lowest pricing to begin with, kind of in the market. And so, what we've seen across all of our markets is the supply is less than the demand, and part of that's just because, you know, I think AI and other use cases have taken off faster than people expected, and the entire ecosystem has not provided as much capacity as what people are seeking.

Speaker Change:

Speaker Change: And our our facilities our funnel has a healthy mix of retail and scale I don't have the exact breakdown at my fingertips, but.

Speaker Change: A lot of that's driven by what capacity we have to sell.

Speaker Change: And what capacity is out there for some of the scale installations, and so depending on which facility in which market.

Speaker Change: We can be flexible in terms of what we offer people and we can be selective on the customers.

Speaker Change: Cause core side is really good interconnection hub.

Speaker Change: Just a retail co location facility.

Steven O. Vondran: And that's really the underlying driver for what pricing is happening in our ecosystem. Our funnel has a healthy mix of retail and scale. I don't have the exact breakdown at my fingertips, but a lot of that is driven by what capacity we have to sell and what contiguous capacity is out there for some of the scale installations.

Speaker Change: Don't underwrite we don't write all the business that comes to US we're not a low cost provider.

Speaker Change: And those markets people come to us because of the interconnection we provide.

Speaker Change: So we curate a mix and we try to balance networks cloud players in enterprises.

Speaker Change: A healthy mix of retail in a way that gives us that.

Steven O. Vondran: And so, you know, depending on which facility and which market, we can be flexible in terms of what we offer people, and we can be selective in terms of the customers. Because, you know, CoreSite is really an interconnection hub, it's not just a retail or, you know, co-location facility; we don't underwrite all the business that comes to us. You know, we're not a low-cost provider, per se, in those markets.

Speaker Change: We have industry, leading returns on our capital that core site was delivering before we bought them and then we continue to use to underwrite our model there.

Speaker Change: Hey, Steve have have higher powered entities influence the MMR per cab at all or is it more just the like for like pricing dynamic you you described.

Speaker Change: I mean certainly.

Speaker Change: Higher the higher density cabinets more because they're taking up more power so that does influence it.

Steven O. Vondran: People come to us because of the interconnection we provide. We curate a mix, and we try to balance networks, cloud players, and enterprises with a healthy mix of retail in a way that gives us the kind of industry-leading returns on our capital that CoreSite was delivering before we bought them and that we continue to use to underwrite our model.

Speaker Change: We did a press release.

Speaker Change: Couple of weeks ago about being in video certified in some of our facilities and so certainly when you are putting gpus in versus Cpus theres, a pricing differential on that.

Steven O. Vondran: On a cabinet, but really what's driving the pricing increases across the board or the supply demand dynamics.

Steven O. Vondran: Hey, Steve, have higher power densities influenced the MMR grab at all? Or is it more just the like for like pricing dynamic you described?

Steve: Okay, Okay, and then can I ask one on.

Steven O. Vondran: I mean, certainly, we price higher density cabinets more because they're taking up more power, so that does influence it. You know, we did have a press release a couple weeks ago about being NVIDIA certified in some of our facilities, and so certainly, when you're putting GPUs in versus CPUs, there's a pricing differential on that cabinet. But really, what's driving the pricing increases across the board are the supply-demand

Speaker Change: <unk>, you've always run a pretty tight ship from that perspective, it seems like you're running even tighter than normal. This year I guess can you drill down into any of the specific actions you're taking to really helps.

Speaker Change: I'll keep costs down.

Speaker Change: Sure, Let me give you kind of a.

Speaker Change: The backdrop to it that I can give you a few examples so over the last decade, we've been in a rapid growth mode in a lot of our markets and when you are growing very quickly and you are buying and integrating assets you're really focused on.

Nicholas Ralph Del Deo: Okay, okay. Can I ask one on expenses?

Nicholas Ralph Del Deo: You know, you've always run a pretty tight ship from that perspective. Seems like you're running even tighter than normal this year. I guess, can you drill down into any of the specific actions you're taking to really, you know, help keep costs down? Sure.

Nicholas Ralph Del Deo: That piece of it and making sure that no balls dropped and they are providing good customer service et cetera, now that we're not.

Steven O. Vondran: Sure, let me keep track of that, the backdrop to it so that I can give you a few examples. So, over the last decade, we've been in a rapid growth mode. And a lot of our market When you're growing very quickly and you're buying and integrating assets, you're really focused on that piece of it and making sure that no balls drop and you're providing good customer service, etc. Now that we're not buying and integrating assets, it's a good time for us to really focus on operational aspects.

Speaker Change: Buying a lot of assets and integrating them. It's a good time for us to really focus on operational excellence.

Steven O. Vondran: So across the board what we're doing is we're looking at our operations and saying how can we be better without negatively impacting customer service or the future of our business. So we're being very careful that we're not damaging the long term trajectory of the business with it but we are finding opportunities to do things more efficiently.

Steven O. Vondran: And I would say what we're doing today is kind of phase one and that each market is looking at what they can do on their own and then there is an opportunity that works that were focused on two more globalize the business and that's taking best practices from each market and in terms of what their expertise is.

Steven O. Vondran: So across the board, what we're doing is looking at our operations and saying, how can we be better without negatively impacting customer service or the future of our business? So we're being very careful that we're not damaging the long-term trajectory of the business with this, but we are finding opportunities to do things more efficiently. And, you know, I would say what we're doing today is kind of phase one, and that each market is looking at what they can do on their own.

Steven O. Vondran: And taking that to other markets to see if we can drive additional efficiencies there.

Speaker Change: For example in the U S. We've automated a lot of our processes.

Rod Smith: And the question that we're asking ourselves is can we take those automation that we use them internationally to drive even more efficiency there.

Steven O. Vondran: And then there is an opportunity that we're focused on to more globalize the business. And that means taking best practices from each market in terms of what their expertise is, and taking that to other markets to see if we can drive additional efficiencies there. You know, for example, in the US, we've automated a lot of our processes. And the question that we're asking ourselves is, can we take those automations and use them internationally to drive even more efficiency there? In Africa, we are extremely efficient with how we use fuel and our power of service business.

Steven O. Vondran: In Africa, we are extremely efficient with how we use fuel.

Speaker Change: Power as a service business. So we're looking at that saying can we export those practices to other markets like the U S and so right now we're being very.

Steven O. Vondran: Deliberate and kind of chasing a low hanging fruit, that's just inherent business after coming off a decade of growth.

Steven O. Vondran: We're going to be very thoughtful about continuing to look at those costs as we try to become as efficient as we can everywhere we can over time.

Speaker Change: Alright, that's great. Thanks, Dave.

Steven O. Vondran: Your next question comes from the line of <unk> Levi from UBS. Please go ahead.

Steven O. Vondran: So we're looking at that saying, can we export those practices to other markets like the US? And so, you know, right now, we're being very deliberate in kind of chasing the low-hanging fruit that's just inherited the business after coming off a decade of growth.

Speaker Change: Great. Thank you can you talk a little bit about the trends youre seeing in Latam I think the quarter came in a bit ahead of your outlook and update on activity and maybe expected churn from ori and exposure to its wireline business would be helpful. And just a second question on your built to suit program across regions.

Steven O. Vondran: We're going to be very thoughtful about continuing to look at those costs as we try to become as efficient as we can everywhere we can over time. That's great. Thanks, Steve. Your next question comes from the line of Batya Levi from UBS. Please go ahead.

Batya Levi: Any changes given the macro pressures there was some regional risks that you're seeing thank you.

Batya Levi: Thanks Glenn.

Batya Levi: Your next question comes from the line of Batya Levi from UBS. Please go ahead. Great, thank you. Can you talk a little bit about the

Steven O. Vondran: Hey, Bob This is Ron I'll I'll start with Latam and give you a little.

Batya Levi: A little insight on the on.

Rodney Smith: Hey Batya, this is Rod. I'll start with LATAM and give you a little insight on the trends there. So for the outlook for 2024, LATAM is going to be coming in around 2% organic tenant building growth. That's coming with about 3% being contributed via co-location and amendment revenue. And if you put that up against the prior year, it's pretty flat.

Batya Levi: On the trends there so we were.

Rodney Smith: We're seeing.

Rodney Smith: For the outlook for 2020 for Latam is going to be coming in around 2% organic tenant billings growth.

Rodney Smith: It's coming with about 3% being contributed.

Rodney Smith: He is the.

Rodney Smith: Colocation and amendment revenue and if you put that up against prior year, its pretty flat. So we're seeing a steady level of demand and activity across Latin America in that three ish percent.

Rodney Smith: So we're seeing a steady level of demand and activity across Latin America in that 3-ish percent for new business. The escalators are also in that 4%. So a touch above that, that's actually down, kind of moderating because inflation across the region has come down. So last year, it was north of 7%. This year it's about 4%. So that's a big driver of any headline change that you'll see is just the moderation of that inflation. The good news is we are also seeing a lower level of churn. Churn is about 5% in this year's guide. Last year it was up closer to 6%.

Rodney Smith: For new business. The escalators are are also in that 4%. So a touch above that that's actually down kind of moderating because inflation across the region has come down so last year that was north of 7%. This year, it's about 4%. So that's a big driver of any headline change that Youll see is just a moderation of that.

Rodney Smith: The good news is we also are seeing a lower level of churn. So churn is about 5% in this year's guide last year was up closer to 6% within that 5% churn almost half of it is coming from <unk>, which I know you're familiar with that it'll take a couple more years to kind of work through.

Rodney Smith: Within that 5% churn, almost half of it is coming from oil, which I know you're familiar with. That will take a couple more years to kind of work through, and we will sort of get to the other side there. And then we would expect that more normalized overall growth will come back in the region, but it will take a couple years before we get there. When you think about maybe just hitting the wireline side of oil, you probably saw a couple of comments come out publicly around the wireline of oil and what they're doing.

Rodney Smith: And we will sort of get to the the other side there and.

Rodney Smith: And then we would expected more normalized overall growth will come back in the region, but it will take a couple of years before we get there when you think about maybe just hitting the wireline side of.

Rodney Smith: Of Oi you heard of you probably saw a couple of comments come out publicly around the wireline away and what Theyre doing but I'll give you a couple of numbers here they represent about $35 million to $40 million of revenue.

Rodney Smith: But I'll give you a couple of numbers here. They represent about $35 million to $40 million of revenue for us in our LATAM business. We did agree to about a 20% discount. That is assumed in our outlook, so there's no negative impact on the outlook that we have out on the street based on that. That means that it comes to about $7 million on a per-year basis over the next couple of years in terms of the discount. And as part of the transaction, we will also be taking ownership of certain sites down there from oil. I'm not going to give you a count or any more details about that.

Rodney Smith: For us in our Latam.

Rodney Smith: Business, we did agree to about a 20% discount that is assumed in our outlook. So there's no negative impact to the outlook that we have out on the street.

Rodney Smith: Based on that that that means that that comes into about $7 million on a on a per year basis over the next couple of years.

Rodney Smith: In terms of the discounting and as a as a.

Rodney Smith: As part of the transaction, we will also be taking ownership of certain sites down there from not.

Rodney Smith: We've got a little bit of work to do to look at that, but we have kind of worked through that. So we'll be working through the remaining churn in LATAM. We do think it's temporary, but we also think that you'll see kind of relatively low growth for the region for the next couple years, let's say lower single digits. In that 2% to 4% range, let's say. That's helpful. Thank you.

Rodney Smith: We're not going to give your account or any more detail. There we've got a little bit of work to do to look at that but we have kind of worked through that so.

Rodney Smith: We will be working through the remaining churn down in.

Rodney Smith: In Latam, we do think it's temporary but we also do think that youll see kind of relatively low growth for the region for the next couple of years, let's say lower single digits in that three 2% to 4% range, let's say.

Rodney Smith: Yes.

Rodney Smith: That's helpful. Thank you and maybe just a built to suit update.

Rodney Smith: And maybe just the Build to Choose update. Yeah, in terms of the built-to-suits, I mean, we're keeping, you know, that consistent in the range of a couple thousand, 2,500 to 3,500. In Q1, the volumes were a little bit lower, but we do expect that to increase. We continue to see strong demand for us building towers for our customers across Africa and also in Europe, so we certainly have been happy with that.

Rodney Smith: Yes in terms of the build to suits I mean, we're keeping.

Rodney Smith: That consistent up in the range of a couple thousand to 2500.

Rodney Smith: 230, 500, Q1, the volumes were a little bit lower but we do expect that too to increase we continue to see strong demand for us building towers for our customers across Africa and also in.

Rodney Smith: In Europe. So we certainly have been happy with that we're being fairly disciplined with the higher cost of capital looking to make sure that.

Rodney Smith: We're being fairly disciplined with the higher cost of capital, looking to make sure that pricing around built-to-suits reflects the new reality, but we still see several thousand sites that we can build every year, and I would say the volumes have come down a little bit, but one of the results of that is that the quality, let's say, has increased because we're really being very selective on where we build, who we build for, and what As we look at the macro environment with the uncertainty around rates and cost of capital, we're being extremely disciplined.

Rodney Smith: <unk> around build to suits reflects the new reality.

Rodney Smith: But we still see several thousand sites.

Rodney Smith: That we can build every year and I and I would say the volumes have come down a little bit, but one of the results of that as the quality. Let's say has increased because we are really being very selective on where we build who we build for and what assets we built.

Rodney Smith: As we look at the macro environment with the uncertainty around rates and cost of capital we're being extremely disciplined.

Rodney Smith: And your final question today comes from the line of John Atkin from RBC. Please go ahead.

Speaker Change: Great. Thank you.

Jonathan Atkin: You're welcome.

Rodney Smith: And your final question today comes from the line of John Atkin from RBC. Please go ahead.

Jonathan Atkin: A question about MLAs, maybe a two-parter. To what extent do you use them internationally? I know a lot of it is paid by the drink, but maybe just update us on holistic MLAs and to what extent they're used internationally. And then, as we look into maybe year-end 25, anything changing around the holistic portions of your domestic MLAs that roll off or even take effect? Thanks.

Jonathan Atkin: Hey, a question about MLA.

Jonathan Atkin: Maybe a two parter to what extent do you use them internationally I know a lot of it is pay by the drink.

Jonathan Atkin: But maybe just update us on holistic MLA and to what extent, they're used internationally and then.

Jonathan Atkin: As we look into.

Jonathan Atkin: Maybe year end 'twenty five.

Jonathan Atkin: Anything changing around the holistic portions of your domestic MLA that roll off or or even take effect.

Steven O. Vondran: Sure, so when it comes to our international markets, we have a variety of contract structures, and sometimes they depend on whether it's with an acquisition that we did or build-a-suits or a bigger part of the business there. So I would say there's a lot more variety in terms of how we construct our contracts internationally. We do have a couple of holistic type deals internationally, again, a little bit different flavor than we would have in the U.S., but we do try to utilize those contract structures.

Speaker Change: Sure. So when it comes to our international markets, we have a variety of contract structures.

Steven O. Vondran: Sometimes it depends on whether it's with an acquisition that we did or build to suits are a bigger part of the business. There. So I would say theres a lot more variation in terms of how we construct our contracts internationally.

Steven O. Vondran: We do have a couple of.

Steven O. Vondran: Holistic type deals internationally again, a little bit different flavor that we would have in the U S. But we do try to utilize those contract structures.

Steven O. Vondran: I think that's something that may be an opportunity for us over time, but it takes time to get customers to understand them. They're not typically used in a lot of those markets, and so educating them on the benefits of those type of structures and seeing the experience that our U.S. customers have had in terms of using those agreements and seeing value from them is something that may take some time.

Steven O. Vondran: That's something that may be an opportunity for us over time.

Steven O. Vondran: But it takes time to get the customers to understand those they're not typically used in a lot of those markets and so.

Steven O. Vondran: Kind of educating them on the benefits of those type structures and seeing the experience at our U S customers have had in terms of being able to.

Steven O. Vondran: To continue to.

Steven O. Vondran: To utilize those agreements can see value from them is something that may take some time.

Steven O. Vondran: In terms of.

Steven O. Vondran: The U S.

Steven O. Vondran: Agreements at the end of the year this year, there's nothing that we would point to specifically on that that we're talking about publicly at this point. So I would expect a ton of change there.

Steven O. Vondran: Agreements at the end of the year this year.

Steven O. Vondran: Theres nothing that we would point to specifically on that that we're talking about publicly at this point.

Steven O. Vondran: So I would expect kind of.

Steven O. Vondran: Not a ton of change there.

Steven O. Vondran: and any change to 25 given that these are often five years in duration. Well, look, it's a little

Steven O. Vondran: And any change into 25, given that these are often five years in duration.

Steven O. Vondran: Well, look, it's a little early for us to be giving any type of guidance for 2025, but we think that our fundamental growth algorithm kind of holds true. And so when we look at 2025, we continue to see strong fundamentals in our business, and that includes a continuation of solid US and Canada organic tenant building growth, even while we're still absorbing some headwinds associated with that final Toronto Sprint churn that happens in Q4 of this year.

Steven O. Vondran: Well, it's a little early for us to be giving any type of guidance for 2025.

Steven O. Vondran: But look we think that our fundamental growth algorithm kind of holds true.

Steven O. Vondran: So when we look at 2025, we.

Steven O. Vondran: We continue to see strong fundamentals in our business and that includes a continuation of solid U S organic tenant billings growth.

Steven O. Vondran: Even while we're still absorbing some headwinds associated with the final tranche of sprint churn that happens in Q4 of this year.

Steven O. Vondran: We see leasing volumes in Africa and Europe remaining positive, with churn remaining low in Europe and an expectation for further moderation of churn in Africa, and continued strong growth from CoreSite, especially as we're commencing those kind of record levels of new business that we've signed since the transaction was consummated. And we'll complement that top-line growth by, again, continuing to focus on margin expansion and cost discipline and continue to be very disciplined in our capital allocation.

Steven O. Vondran: We see a leasing volumes in Africa, and Europe remains positive with churn remaining low in Europe and in <unk>.

Steven O. Vondran: Expectation for further moderation of chartered Africa.

Steven O. Vondran: Continued strong growth from core site, especially as we're commencing those kind of record levels of new business.

Steven O. Vondran: The that we've signed since the transaction.

Steven O. Vondran: <unk> and.

Steven O. Vondran: It will complement that topline growth again continue to focus on margin expansion and cost discipline and continue to be very disciplined capital allocation.

Steven O. Vondran: Now, that growth is going to be a little bit offset by the headwinds we have in Latin America because we do see an elevated consolidation and churn environment there for the next few years, and that's going to keep Latin America kind of in that low single-digit growth. And then again, you know, when you think about 2025 and beyond, there's a lot of variables that we're keeping our eyes on, like FX rates, interest rates, services are inherently harder to predict, so we won't be trying to guide anything on that until early next year.

Steven O. Vondran: Now that growth going to be a little bit offset by the headwinds we have in Latin America, because we do see.

Steven O. Vondran: Elevated consolidation churn environment there for the next few years, but that's going to keep our Latin America kind of in that low single digit growth.

Steven O. Vondran: And then again when you think about 2025 and beyond there is a lot of variables that we're keeping our eyes on.

Steven O. Vondran: FX rates interest rates, our services is inherently harder to predict so we won't be.

Steven O. Vondran: I'm trying to guide anything on that until early next year and then the timing of the NDA closing will also have an impact on what the per share growth rate is although we think we've been very.

Steven O. Vondran: And then the timing of the NDA closing will also have an impact on what that InfoVote per share growth rate is, although we think we've been very clear about what that means to us. I think most of our investors understand the variability in that with the timing. But all those kinds of things, we think point to our long-term growth algorithm remaining strong in 2025 and beyond.

Steven O. Vondran: Clear about what that means to us I think most of our investors understand the variability on that with the timing.

Steven O. Vondran: But all of those kind of.

Steven O. Vondran: Of.

Steven O. Vondran: Variables.

Steven O. Vondran: Point to our long term growth algorithm.

Steven O. Vondran: Remaining strong.

Steven O. Vondran: In 2025 and beyond.

Speaker Change: Thank you very much.

Steven O. Vondran: Thank you everyone for joining the call today. Please feel free to reach out to myself or the IR team with any questions.

Speaker Change: Thanks, everyone for joining the call today, please feel free to reach out to myself or the IR team with any questions and operator, we can close the call.

Operator: And Operator, we can close the call. 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.

Operator: 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.

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Operator: Please hang up.