The paragraph introduces an earnings conference call for SBA's fourth quarter of 2024. The call is being recorded, with the initial part in listen-only mode until the Q&A session. Mark DeRussy, the Vice President of Finance, leads the call, joined by Brendan Cavanagh, President and CEO, and Marc Montagner, CFO. They discuss forward-looking statements, guidance for 2025, and the potential risks involved. The statements pertain to as of February 24, and there's an emphasis on non-GAAP financial measures available online. Brendan Cavanagh comments on the quarter's solid performance, slightly exceeding estimates despite unfavorable foreign exchange rates.

The paragraph discusses the ongoing growth and positive outlook for the company's domestic and international telecommunications operations. Domestically, new carrier activity and lease bookings increased, driven by the expansion of 5G coverage and new leasing rather than amendments. While the U.S. services business had its best quarter, the company anticipates further growth and strong performance into 2025. Internationally, despite being behind the U.S. in 5G coverage, operators are investing in network expansion, though there's elevated churn due to customer consolidations. The company expects that these consolidations will ultimately lead to stronger and more stable international business, concluding that 2024 was a successful year.

The paragraph highlights the company's accomplishments and strategic initiatives over the past year, despite challenges from a difficult macroeconomic environment. The company enhanced customer relationships, expanded its leasing and service backlogs, and improved operations and capital allocation, including significant investments in assets and stock repurchases. It improved its balance sheet by refinancing loans and securities at favorable rates and reducing debt levels. Strategically, the company focused on stabilizing results and growing its core business. A major milestone was the purchase agreement for approximately 7,000 towers from Millicom in Central America, strengthening its position as a leading tower operator in the region.

The article discusses a strategic deal aligning the company with a leading MNO through long-term US dollar lease agreements, and a growth-promoting build-to-suit agreement with Millicom, predicting up to 800 new tower constructions primarily in Central America by 2025, which is the most in over 20 years. The company plans to exit underperforming markets, having done so in Argentina and the Philippines, and is selling operations in Colombia due to its small scale. The focus remains on scaling through partnerships with top carriers and maximizing new business opportunities. Key growth drivers include rising mobile network consumption, limited spectrum availability, fixed wireless access, AI applications, regulatory requirements, and expanding 5G coverage.

The paragraph discusses the financial performance and strategic outlook of SBA. It highlights the company's strong balance sheet and consistent free cash flow, which support investments in new assets and shareholder returns through dividend growth and share repurchases. The company's management expresses gratitude to team members and customers. Marc Montagner reports on the financial results, noting a 5.1% domestic organic revenue growth for the fourth quarter compared to the previous year, with a net growth of 2.2% after accounting for churn. He mentions $8.5 million added in new leases and amendments, with specific churn details from the Sprint consolidation. Internationally, Brazil showed an 8.7% gross organic growth. During the fourth quarter, US dollar-denominated consolidated cash site leasing revenue and adjusted EBITDA were 78% and 81%, respectively, with Brazil contributing 15.6% of the consolidated cash site leasing revenues.

The earnings press release outlines the company's initial outlook for 2025, highlighting expectations for both domestic and international segments. Domestically, they anticipate revenue from new leases and amendments to be between $35 million and $39 million, factoring in Sprint churn and regular churn. Internationally, they project steady network investments with $16 billion to $18 billion for new leases and expect churn to be influenced by carrier consolidations and other factors. Additionally, foreign exchange is expected to negatively impact site leasing revenue by $25 million. Services revenue is projected between $160 million and $180 million, with increased carrier activity noted. The anticipated closing of the Millicom transaction is set for September 1, contributing to cash site leasing revenue and overall cash flow, pending regulatory approval.

The company does not expect any further acquisitions or share repurchases in its outlook, though such actions might still occur during the year. Mark DeRussy provides additional details, noting the company issued $2.07 billion in Tower Revenue Securities through an existing trust, consisting of a $620 million tranche with a 4.654% interest rate due in October 2027 and a $1.45 billion tranche with a 4.831% interest rate due in October 2029, both with a final maturity date of October 2054. The next maturity is a $750 million ABS note due in January 2026. The company has a leverage ratio of 6.1 times net debt to adjusted EBITDA and a net cash interest coverage ratio of 5.5 times. The weighted average maturity of the debt is about 3.4 years with a 3.2% average interest rate. The $2 billion revolver remains undrawn. A cash dividend of $105.4 million or $0.98 per share was paid in the fourth quarter, and a first quarter dividend of $1.11 per share is announced, representing a 13% increase over the previous quarter's dividend and 35% of the midpoint of the full-year AFFO outlook. The call is now open for questions.

In the conference call, Batya Levi from UBS inquires about the increase in backlog and whether it's driven by specific tenants or is more widespread. Brendan Cavanagh responds that the backlog growth is broad across various carriers, with some tenants being more active than others. There is an increased number of new leases compared to amendments to existing ones, which impacts the book to bill cycle, suggesting growth will continue through the year. Cavanagh anticipates domestic leasing growth into the next year but emphasizes it's too early to determine specific figures. Another caller, Jim Schneider from Goldman Sachs, is then introduced.

The paragraph discusses the outlook for domestic leasing growth for a company, given that US carrier customers have maintained consistent multiyear CapEx budgets. Brendan Cavanagh expresses that flat overall CapEx budgets aren't concerning because there's increased activity in wireless networks, particularly macro-based networks. He notes that without new spectrum, existing spectrum must be optimized, which could benefit their business. Jim Schneider asks for clarification on the demand for fixed wireless capacity, questioning if it is separate from conventional mobile capacity, to which Brendan begins to respond.

The paragraph discusses the impact of 5G mobile capacity and fixed wireless access on site investments, describing the observed activity as anecdotal but notable. The speaker mentions increased investments driven by customer demand, suggesting a multifaceted motivation for these investments. Jim Schneider is thanked, and the operator moves to the next caller, Matt Niknam from Deutsche Bank. Matt asks about the leasing outlook for 2025, particularly concerning customer-specific activity among three national carriers and DISH, and inquires about a discrepancy in services guidance compared to the fourth quarter's annualized exit rate. Brendan Cavanagh responds, clarifying that there were no one-time events in Q4 and explaining that services guidance is less precise due to its short-term nature compared to leasing.

In the second half of the year, there's a cautious approach being taken compared to the previous year's fourth quarter. The leasing outlook indicates that the three major carriers are increasing their activity, mainly driven by regulatory obligations related to coverage and downlink speeds. DISH is contributing less than before. Brendan Cavanagh notes that in the U.S., there is currently a greater financial contribution from colocation (colo) agreements compared to amendments, a shift from the historic trend where amendments dominated. Despite this, the number of agreements still favors amendments due to their lower individual value. Additionally, there is expected churn from Sprint both this year and next.

In the paragraph, Brendan Cavanagh discusses the financial impacts and timelines related to Sprint churn as it pertains to T-Mobile. He mentions that most of the churn for the year has already happened or is about to happen, impacting this year’s financial numbers. He notes that significant impacts for the next year will derive from expiring leases at the end of this year or early next year, making it unlikely to accelerate the process. He explains that there’s an expectation of a balance if T-Mobile were to pay off early. Michael Rollins then asks if merger churn has led to increased fees for carriers leaving equipment behind and how that might contribute financially. He also inquires about updates on capital allocation priorities and target debt leverage. Cavanagh acknowledges these points but does not provide detailed answers within this excerpt.

The paragraph discusses financial aspects related to Sprint's decommissioning fees and the impact on revenue. Some decommissionings have already occurred, reducing the current contribution to revenue compared to previous years. The company anticipates further decommissioning but doesn't expect it to significantly affect their reported results. Additionally, the paragraph addresses the company's target debt level, which has been below their historical range. They are open to increasing leverage if sizable investment opportunities arise, but predict the debt level will remain below 6.5 times net debt to EBITDA by year-end, considering upcoming deals like the Millicom acquisition.

In the paragraph, Ric Prentiss from Raymond James is participating in a call with Brendan Cavanagh, asking about leverage levels needed to achieve an investment-grade rating. Brendan indicates that they could reach investment-grade status at their current leverage level if they commit to maintaining or lowering it, although he believes it might not be beneficial at the moment due to minimal cost benefits and the value of maintaining financial flexibility. Ric then inquires about the leverage impact of a transaction with Millicom, to which Brendan responds that it adds a minor increase of 0.2 turns of leverage and notes that their AFFO allows them to handle such changes without significantly affecting leverage. Ric concludes with a strategic and an "outyear" question.

In the paragraph, Brendan Cavanagh discusses the potential impact of AI on towers, mentioning that while it's difficult to predict specific effects, AI is expected to drive increased network usage due to its integration into handsets, similar to past technological advancements. Cavanagh also notes AI's internal benefits for their business efficiency and customer information. The conversation then shifts to Simon Flannery from Morgan Stanley asking about the timeline for a Millicom deal closure and inquiring about the Sprint churn and international churn post-2026, seeking updates on ongoing consolidation effects from companies like Oi.

Brendan Cavanagh discusses the anticipated closing date for the Millicom deal, initially set for September 1, while acknowledging that it could happen earlier if regulatory hurdles and other formalities are cleared. He mentions that the outlook may be updated if the closing happens sooner and deems a later date unlikely. Additionally, he addresses international churn, particularly in Brazil, attributing it to the Oi consolidation and the carriers' efforts to optimize their networks. This has resulted in a higher churn rate than expected, with various factors impacting different markets.

The paragraph discusses the impact of market changes in Brazil and Panama, particularly mentioning a churn related to the Claro-Liberty consolidation in Panama, which is expected to stabilize the market. Simon Flannery and Nick Del Deo have a dialogue where Nick inquires about the diversification of services work for 2025 compared to 2024. Brendan Cavanagh responds by indicating overall increases but a continued heavy concentration on one major customer due to existing agreements. Cavanagh emphasizes the company’s reputation for quality work and expresses an internal goal to diversify revenue. Additionally, Del Deo asks about anticipated development yields from new builds set for 2025, which Cavanagh had previously mentioned but doesn't provide detailed information in this segment.

The paragraph discusses the influence of the Millicom deal on the change in cadence, with Brendan Cavanagh stating it's the biggest driver, especially with the planned 800 new builds for the year, primarily in Central America related to Millicom. There's also significant activity in Tanzania. Despite being concentrated in certain markets, the projects are expected to yield positive returns and opportunities for lease up. The conversation shifts to David Barden from Bank of America querying whether SBA is involved in providing solutions for fixed wireless access as part of the BEAD program, influenced by Brendan Carr's advocacy for more flexible broadband approaches.

The paragraph discusses DISH's recent refinancing and the anticipation surrounding their $5 billion capital allocation, questioning whether it will be used for handset investment, marketing, or fulfilling build-out requirements. The speaker, Brendan Cavanagh, mentions not expecting significant contributions from DISH this year due to their relative inactivity. He also touches on the BEAD program, noting it primarily focuses on fiber solutions, with limited current impact on fixed wireless access, but expresses hope for broader wireless consideration in the future.

In the paragraph, Brendan Cavanagh discusses the current slow progress of a company's plans due to the extra time they have for build-outs, which allows them to focus more on stabilizing their financial situation. While he remains hopeful for future collaboration, he notes that their progress is currently slow. Ari Klein then asks about international churn, particularly its impact on leasing acceleration in those markets. Brendan responds that while he doesn't expect churn to peak in 2025, it will likely remain similar to current levels. He notes that different markets have varying dynamics, highlighting significant new build activity and potential for good lease uptake in regions like Central America and Africa, particularly Tanzania.

The discussion in the paragraph revolves around economic developments in Central America and Brazil, with a particular focus on Brazil's challenging market conditions expected to persist for another year. There's also a dialogue about share repurchases in relation to the Millicom deal, with Brendan Cavanagh indicating that the repurchase program operates independently and opportunistically. Additionally, there is mention of potential spectrum auctions in relation to government policy, with a query about ongoing conversations with customers regarding future intentions and support strategies in that context.

Brendan Cavanagh discusses the current focus of the new FCC on supporting spectrum auctions, noting that while they are favorable and hopeful for future auctions, the process will take several years before new spectrum is available for deployment. In the meantime, the priority is optimizing existing spectrum resources. Regarding market presence, Cavanagh indicates no immediate plans to exit additional markets after selling a portfolio in Colombia. The preference is to improve scale and positioning with leading carriers in existing markets unless a viable path for improvement is not foreseeable, as was the case in Colombia and the Philippines.

The conversation concludes a conference call about SBA's fourth quarter 2024 results, with Brendan Lynch thanking Brendan Cavanagh for his input. The operator confirms there are no more questions, marking the end of the call.

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