In the first paragraph, the operator introduces the American Tower Third Quarter 2024 Earnings Conference Call and mentions that the call is being recorded. Adam Smith, the Senior Vice President of Investor Relations and FP&A, then greets the audience and mentions that a presentation is available on the company's website. He is joined by Steve Vondran, President and CEO, and Rod Smith, Executive Vice President, CFO, and Treasurer. Adam notes that after their prepared remarks, they will take questions. He also provides a disclaimer about forward-looking statements, highlighting that these involve risks and uncertainties, and advises that factors could cause actual results to differ. He stresses that there is no obligation to update any information post-call. The paragraph ends with Adam handing the call over to Steve.

In the Q3 results, the company reports strong demand for its global real-estate assets, particularly in the Tower business, driven by 5G deployment needs in the US and Europe. The data center segment also showed robust leasing performance due to hybrid IT and AI demand. The company's strategic focus is on enhancing portfolio quality and earnings by concentrating capital in developed markets, exemplified by the sale of its India assets. The company aims to maximize profitability through cost management and remains committed to strategic initiatives that promote sustainable, high-quality earnings growth. Future efforts will focus on developed markets, especially Europe and CoreSite.

The paragraph highlights the efforts of US teams in restoring communication services after hurricanes and shifts focus to the company's European and CoreSite businesses, emphasizing their potential for organic growth and investment opportunities. The company has strategically selected European markets like Germany, France, and Spain for expansion due to factors like macroeconomic stability, government support for mobile connectivity, and promising market conditions. These efforts have been driven by a rigorous assessment and are aimed at capturing growth, enhancing margins, and delivering superior customer experiences. The paragraph also mentions specific government initiatives supporting these markets, such as France's new deal, Spain's 5G UNICO, and the EU's Gigabit Infrastructure Act.

The paragraph discusses how the company, American Tower, benefits from a strong and competitive carrier environment in Europe, particularly in Germany, France, and Spain. By partnering with major market leaders and indexing 85% of revenues to carriers with significant market shares, the company remains protected from consolidation risks and maintains growth opportunities. Despite challenges like land sharing, American Tower effectively manages them with strategic customer agreements. The company has leveraged the Telxius acquisition to strengthen its operational capabilities, internalize critical functions, and improve customer integration, resulting in a successful growth strategy in Europe.

The paragraph discusses the company's growth strategies in both organic tenant billings and new infrastructure developments. Over the past three years, they have achieved over 7% organic growth in tenant billings, driven by carrier demand and CPI-linked escalators. Complementing this, they've built 1,200 new sites since 2021 and streamlined colocations processes to lower carrier costs. The majority of expected new business growth in 2024 will come from colocations, with many located on rooftops. The company anticipates continued growth, supported by network densification and data demand. Additionally, the company's US data center segment shows strong long-term demand, highlighted by ongoing successful leasing activities since the CoreSite acquisition in 2021, with expectations for further growth into 2024.

The paragraph discusses the strategic positioning of CoreSite's portfolio to capitalize on the growing demand for hybrid and multi-cloud IT architectures, particularly with the rise of AI deployments. It highlights the potential of CoreSite's interconnection campus model for low-latency and cost-efficient operations, especially when integrated with their tower assets at the edge. Although there might be delays in realizing synergies between their Tower and CoreSite platforms, the company is benefiting from increased AI-related demand and leasing success at CoreSite. It notes that enterprises are developing GPU space architectures connected to the cloud, which are larger and more power-dense than typical hybrid IT setups, and CoreSite's facilities are ready to support these requirements.

The paragraph discusses the strategic focus of American Tower's data center portfolio, highlighting the benefits of hyperscale AI absorption on supply-demand dynamics and pricing. The company plans to invest more in CoreSite due to consistent demand, potentially exceeding $480 million in development spending by 2024. While there is potential interest in hyperscale development, the priority remains on expanding existing campuses and developing multi-tenant colocation facilities. Partners like Stonepeak may be involved in specific opportunities. Overall, the emphasis is on enhancing interconnection ecosystems and planning for future needs to capitalize on growing data demand.

The paragraph discusses the performance and strategic positioning of American Tower's operations, including their CoreSite data center and European tower businesses, highlighting their strong asset quality and operational excellence. These attributes, along with increasing demand and strategic progress, are expected to drive sustained organic growth and shareholder returns. The paragraph also mentions a key reporting change following the recent sale of ATC India, which will now be listed as discontinued operations in financial statements, emphasizing the company's focus on disciplined capital allocation and cost management to ensure long-term earnings growth.

The paragraph discusses changes in financial reporting for a company's Q3 earnings, specifically excluding discontinued operations from certain measures and introducing new metrics: attributable AFFO and attributable AFFO per share, which reflect results from continuing operations adjusted for interest savings from the sale of assets in India. The aim is to provide a clearer baseline for future performance. The paragraph also highlights strong demand for the company's global assets, significant growth in application volumes in the U.S., and positive international growth, with substantial new site construction in Europe and Africa.

The paragraph highlights the strong demand and growth in CoreSite's US data center business, leading to significant year-over-year revenue growth. The company is executing its strategic priorities, such as cost management and portfolio optimization, including selling assets in India, Australia, and New Zealand. The proceeds from these sales helped reduce gross debt, and S&P upgraded the company's credit rating. These efforts enhance their balance sheet and focus on driving earnings and shareholder value. Additionally, the company addressed financial provisions related to WOM in Colombia, recognizing revenue on a cash basis and reserving $13 million as bad debt due to WOM's bankruptcy filing.

The paragraph discusses financial performance metrics for WOM Columbia and the broader company in the third quarter. WOM Columbia's revenue comprises a small percentage of the company's Latin America and consolidated property revenues. Overall, consolidated property revenue declined by about 1% year-over-year but showed a slight increase when excluding non-cash revenue factors. The decline was influenced by FX impacts, absence of prior one-time US benefits, and Colombia revenue reserves. The US Data Center business experienced strong growth, aiding performance. Consolidated organic tenant billings grew over 5%, with 5% growth in the US and Canada segment, potentially 6% without Sprint churn. International growth was 5.7%, exceeding expectations due to the exclusion of the India business. Adjusted EBITDA fell by about 1% mainly due to previously discussed revenue factors, but would be up over 2% when excluding non-cash revenue factors, helped by cost management and an increase in services gross margin due to more tower activity, despite a 3% negative impact from FX headwinds.

The paragraph discusses American Tower's financial performance and outlook adjustments. AFFO attributable to common stockholders increased by 2.6% year-over-year, with a growth of nearly 3% on an adjusted per-share basis. The full-year outlook has been updated to reflect the closure of the India transaction, treating past India results as discontinued operations. As a result, metrics excluding property revenue and adjusted EBITDA will not include India contributions. The core business remains strong, focusing on new business demands, cost discipline, and effective capital allocation. Adjustments include absorbing provisions related to WOM, with $36 million in downside to adjusted EBITDA and $33 million to AFFO, but these are being offset by direct expense savings and a $35 million benefit from a settlement in Brazil.

The paragraph discusses the company's revised financial outlook, including expected impacts from foreign exchange headwinds on property revenue, adjusted EBITDA, and AFFO for AMT common stockholders. It mentions an increase in property revenue expectations by $15 million due to core performances like data center contributions and a customer settlement in Brazil. This is slightly offset by reserves related to WOM and reimbursement delays. The company maintains consistent organic tenant billings growth expectations across their regions and notes a slight increase in international outlook due to the removal of a lower-growth Indian business. They also increase the adjusted EBITDA outlook by $5 million, driven by revenue and operational efficiencies, while acknowledging some project delays that may slightly reduce US services revenue estimates.

The paragraph discusses the financial outlook and performance adjustments for a company. It highlights assumed expenses, including $15 million in bad debt and $20 million in unfavorable foreign exchange impacts. The midpoints for attributable AFFO per share have been adjusted due to the India closing, resulting in some dilution but also showing a $0.05 improvement from outperforming the India business and currency-neutral operations. The capital allocation plans are mostly unchanged, except for the removal of $105 million in capital expenditures in India, with a planned dividend distribution of $6.48 per share. The company anticipates continued demand growth in 2024, driven by data needs, 5G coverage, 4G expansion, and strong leasing activity in data centers.

The paragraph discusses a company's strategic priorities aimed at capturing demand, supporting customer needs, driving business opportunities, managing costs and capital, and optimizing their portfolio for better margins and earnings quality. The company's achievements and expectations for the year indicate successful execution of these priorities, suggesting a positive outlook for future growth and shareholder value. During the subsequent Q&A session, Ric Prentiss from Raymond James inquires about new lease activity in North America for 2025, referencing past guidance. Steve Vondran responds, stating it's too early to provide specific guidance but noting positive discussions with customers about network densification, aligning with the company's expectations.

The paragraph discusses expectations for the US growth rate in leasing for next year, indicating it will likely be in the mid-4% range due to factors such as the final tranche of Sprint churn and the current leasing environment. This aligns with their long-term growth goal of at least 5% from 2023 to 2027, with expectations for higher growth once the Sprint churn is resolved by 2026. There are also potential volume-driven opportunities and new colocations being considered, but the timing is still uncertain. Additionally, Rod Smith notes that for 2024, new business levels are expected to be in the $180 million to $190 million range, with consistent quarterly contributions of about $45 million.

The paragraph discusses the financial adjustments related to the sale of operations in India and its impact on the company's adjusted funds from operations (AFFO). Initially, India was expected to contribute $0.08 per quarter or $0.32 annually. The company had an original AFFO outlook of $10.60 per share, which was adjusted to $10.48 per share after India was sold, removing $0.12 from the AFFO for the fourth quarter. India outperformed expectations by about $22 million, largely due to cash tax refunds and other factors. The overall discussion suggests this adjustment should be the starting point to assess growth projections for 2025. Rod Smith emphasizes the complexity of these numbers and offers further clarification through their Investor Relations group for more detailed explanations.

The paragraph discusses the financial adjustments and estimates related to the company's AFFO (Adjusted Funds From Operations) per share. It explains the impact of removing India’s contributions and the benefits of interest savings from debt repayment. This results in a reduction of AFFO per share from $10.53 to $9.95 for 2024, reflecting continuing operations. The company anticipates mid-single-digit growth, projecting AFFO per share to reach around $10.50 in 2025. The complexity of these figures and details may require further clarification from the Investor Relations team.

The paragraph discusses the growth potential and financial outlook for a business, emphasizing that mid-single-digit growth is achievable and possibly even higher. The company is satisfied with its global portfolio and has improved earnings quality by removing volatile assets, such as the India business. It anticipates that US business growth will align with a long-term average of 5%, although there might be fluctuations due to factors like the Sprint churn. International business is expected to grow faster, and the CoreSite division is performing exceedingly well, achieving and projecting double-digit growth, with record new business anticipated for 2024.

The paragraph discusses the company's focus on cost control, margin expansion, cash management, and debt reduction to strengthen its portfolio and improve earnings quality amid rising interest rates. Concern is expressed about growth in Latin America and Africa, which contribute 25% of earnings, with Latin America expected to grow at low single digits in the near term due to consolidation challenges, but potentially return to high single-digit growth later. U.S. Sprint churn is expected to end this year, providing a future positive impact. Foreign exchange (FX) risk remains a concern due to emerging markets exposure, and recent trends have shown some negative impact on next year's expectations.

The paragraph involves a discussion between various executives and analysts about interest rates, leasing numbers for CoreSite, and AFFO metrics. Steve Vondran and Rod Smith provide insights into CoreSite's strong leasing performance, mentioning a construction pipeline of over 40 megawatts, 60% of which is pre-leased. They also address the ongoing reporting of the AAA adjusted attributable AFFO metric, particularly concerning the impact of the India sale. The conversation focuses on how these factors will enable double-digit revenue growth moving forward.

The paragraph discusses the financial performance and growth prospects of a company (likely CoreSite). It highlights that their current leasing levels are significantly higher compared to when they were first acquired, and most of their $70 million backlog is expected to generate revenue between now and the first half of 2025. The company is projecting a double-digit revenue growth rate over the next several years, driven by increasing demand for hybrid cloud infrastructure among enterprises. Customers are expanding their installations, contributing to a strong sales pipeline anticipated to remain healthy through 2025. The backlog has grown by 75% since they acquired CoreSite, rising from around $40 million to $70 million, signaling similar growth in new business. The paragraph also briefly mentions an upcoming discussion about the company's dividend policy.

The paragraph discusses plans for dividend growth and capital expenditure for CoreSite. Rod Smith mentions that the company aims to resume dividend growth by 2025, with the growth rate expected to mirror the average AFFO per share growth rate over time, which is in the mid-single digits. This approach may not apply to every year but reflects the overall trajectory. On CapEx for CoreSite, the company might exceed the previously planned $480 million and is considering investing $600 million to $700 million in data centers, acknowledging opportunities for attractive capital deployment but without going hyperscale at this point.

In the paragraph, the speaker discusses the company's approach to dividends and capital allocation, noting that dividend declarations and distributions require Board approval. They highlight a strong and improving financial position, which may enable mid-single-digit growth in AFFO per share and consequently, potential dividend growth. The company aims to keep its dividend payout ratio stable between 60% and mid-60s of AFFO. This financial strategy allows for $1.5 to $2 billion to be used for global CapEx programs, share buybacks, or debt reduction, while maintaining sufficient capital for operations. For CoreSite, capital allocation is flexible, with no constraints, allowing the company to decide how much capital to deploy alongside private partners. They can choose real-time funding strategies for additional capital growth, ensuring efficient use of capital with favorable development yields.

The paragraph discusses a strategic approach towards capital deployment and acquisitions. Steve believes that high levels of pre-leasing provide a low-risk investment opportunity, leading to faster stabilization and justifying capital investment in campus developments. James Schneider from Goldman Sachs questions the potential for acquiring European Tower assets due to other owners expressing openness to sales. He also inquires about CoreSite's business, specifically a large land purchase for expanding the LA campus and an observation that some initially expected business growth has been slower. Steve Vondran confirms that the land purchase in LA is for expanding the campus to accommodate customer needs.

The paragraph discusses a company's strategy regarding land investment around its campuses to support future growth, while showing interest in the inferencing layer due to robust demand. The company is cautious about counterparty risk with unproven businesses. In Europe, they aim to replicate successful partnerships like with Telxius, emphasizing patience and discipline, especially in France where they seek more scale. They focus on favorable terms and conditions for shareholder value and highlight the benefit of low churn and low tenancy risk in their acquired towers, despite market consolidations.

The paragraph discusses the positive competitive dynamics emerging in the European market, particularly in terms of network quality and government pushes for widespread coverage, including in rural areas. The speaker expresses interest in potential portfolio acquisitions in Europe, provided they meet certain investment criteria. Rod Smith highlights the strong performance of their European business, noting that organic tenant billings growth exceeded 6% for the quarter and is expected to maintain that rate for the year. The growth is balanced, with over 4% coming from new business, and the churn rate remains low at below 1%. Overall, the European platform is generating durable revenue growth similar to the U.S. market. The operator then prompts the next question, with Batya Levi from UBS next in line.

In the paragraph, Batya Levi inquires about the changes in the mix between colocation and amendments in domestic operations, and the potential impact of DISH's network expansion on current agreements. Steve Vondran responds by noting a consistent mix overall, but an increased interest in new colocations, indicating a shift towards network densification. This is aligned with their long-term plans, suggesting that new colocations outside of existing agreements will contribute more significantly to growth in the coming years. Rod is expected to address the year-on-year decline in domestic gross margins.

The paragraph discusses a conference call where Rod Smith addresses the decline in domestic business margins from 74.7% to 74.2% in Q3 2023. He explains that the main reason for this decline is a 90 basis-point hit from non-cash items like straight-line impact. However, on a cash basis, margins have actually increased by 40 to 50 basis points. He also notes that some one-time settlements from the previous year are not recurring. Batya Levi receives clarification from Steve Vondran about a new lease comprehensive agreement, which will not reach its maximum number of leases for some time. Nick Del Deo then brings up the topic of mobile edge, highlighting Steve's belief in its future potential despite delays.

The paragraph discusses the trend of decentralization in the tech ecosystem, highlighting a shift towards more distributed architectures by cloud and AI providers. This involves expanding into regional centers to capitalize on factors like power costs, proximity to end-users, and lower latency. CoreSite is exploring these opportunities by expanding into Tier-2 markets. Additionally, carriers are moving towards 5G standalone infrastructure, which incorporates mobile edge computing more extensively.

The paragraph discusses the evolving architecture needs at the edge of both wireline and wireless ecosystems, emphasizing the requirement for more computing power. As discussions progress, it's becoming increasingly evident that this shift, although slower than anticipated due to necessary advancements like 5G standalone and wireline evolution, is inevitable and will extend towards consumers. In terms of emerging tower markets, Steve Vondran mentions tightening capital expenditure (CapEx) despite customer preferences for increased investment. However, customers understand the company's need to create shareholder value, leading to renegotiated agreements that balance lower CapEx with increased co-locations, reflecting a cooperative approach with Tier-1 MNOs globally to devise mutually beneficial solutions.

The paragraph discusses a business strategy adjustment where the company plans to reduce capital spending in emerging markets while focusing on developed markets. Steve Vondran thanks customers for their support and cooperation. Brandon Nispel from KeyBanc Capital Markets inquires about a decrease in contracted growth under MLAs for the next year and assumptions for organic billing growth in the US. Vondran explains that the reduction is due to adjustments in how agreements are structured to align with activity levels, particularly during 5G network development. He also mentions that the churn rate is expected to remain at the lower end of the historical range of 1% to 2%.

In the paragraph, the speakers discuss their cost management efforts and potential divestitures. Steve Vondran emphasizes their focus on reducing SG&A expenses, achieving a $17 million or 3% reduction year-over-year, excluding bad debt. They are working towards further globalizing operations to realize synergies, which is expected to expand margins over time, albeit more slowly than SG&A savings. Regarding emerging markets, Vondran notes that there are no current plans for significant divestitures, specifically excluding large-scale markets like India.

In the discussed quarter, the company signed an agreement to sell some third-party land in Australia and New Zealand and is considering other portfolio options, including fiber businesses, if they offer the right price. Although no active sales process is currently underway, the company routinely assesses its holdings to determine if divesting certain assets could create more shareholder value. Past divestments were made in India, Mexico, and Poland. The company prioritizes finding optimal market solutions. Closing remarks highlighted the availability of a replay and directed further inquiries to Investor Relations.

This summary was generated with AI and may contain some inaccuracies.