American Tower Corp at Citi Global TMT Conference Transcript

The following is excerpted from the question-and-answer section of the transcript.

Question: Mike Rollins - Citi - Analyst : So Steve, maybe just to get us started, if you could provide an update on American Tower's strategy to expand financial performance and improve the value for shareholders.

Question: Mike Rollins - Citi - Analyst : Great. Well, it gives us a lot to dig into today. And as we're getting started, getting into each of these components, we'll throw up our first survey question. So the first one we're going to go with is -- I'm going to ask our audience to participate. Remember, you can use the QR codes, and this is all anonymous. So do you expect domestic leasing activity to improve over the next 12 to 24 months? And we're excluding the impact from the Sprint merger just to make it kind of simple to think about. And we'll come back to this question in a moment, but the answers are yes, with opportunities for annual organic domestic revenue growth to expand above 6%, yes, to sustain a 5%, 6% range. And no, expect annual organic revenue growth to fall below 5%. And by way of background, I think what the normalized number for this year is about 6%, guidance at the midpoint?

Question: Mike Rollins - Citi - Analyst : Great. So we're going to come back to this as we get the responses in and just encourage everyone to participate. So just one more question, sort of big picture. So the management team has been talking about focusing more on developed markets. And that this has been not just a recent decision, but something that's been maybe more deliberate over a longer period of time. Can you talk about what's driving the interest to focus more on the developed markets and what that should mean for shareholders?

Question: Mike Rollins - Citi - Analyst : Very helpful. And maybe we'll shift gears, talk about the domestic power business and the leasing opportunity, obviously, your biggest exposure in developed markets. Can you unpack the reasons that American Tower seems to be seeing better leasing activity than your competitors? And I realize it's a hard question because there's part of a comparison in there. But what are you seeing that is benefiting American Tower? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. SEPTEMBER 04, 2024 / 6:10PM, AMT.N - American Tower Corp at Citi Global TMT Conference

Question: Mike Rollins - Citi - Analyst : Let's see our survey results and see what our audience expects. So 25% expand. The annual organic domestic revenue growth rate to expand above 6%, 50% sustain 5% to 6% range and 25% of the audience expects the annual organic domestic revenue growth to fall below 5%. Now based on the activity levels that you're seeing, how do you frame the future opportunities to grow organic leasing revenues?

Question: Mike Rollins - Citi - Analyst : So for the customers that have these comprehensive deals, do you see times where they're going to spend more with you than what they commit to? And what should we be watching to see if that could be a possibility for you in the future?

Question: Mike Rollins - Citi - Analyst : And in terms of one of the recent trends that we've noticed is that churn has fallen to below 1% in the domestic segment, if you take out Sprint merger-related churn. What's happening to push churn to kind of below the longer-term ranges that the company has previously indicated? And is this a sticky place that could also help that organic growth potential?

Question: Mike Rollins - Citi - Analyst : Going to introduce our next survey question. So the next one here is -- and this is -- some of the investor feedback that we've received has kind of raised this question of -- for our audience. Do you view American Tower as, I guess, the terminology that I've heard from the buy side is a bond proxy, with share performance primarily influenced by the level of treasury rates in the market? So we're going to go to our audience and see what they think. Steve, look forward to getting your view on this as well in a moment. But maybe just finishing up the domestic conversation, so what's the potential for American Tower to get this last carrier, not on the comprehensive, on a new one, whereby then you have even greater visibility across all your customers? And can you give us an update on your exposure to DISH?

Question: Mike Rollins - Citi - Analyst : Let's go to our audience and see the results of our survey. So 40% yes, they view AMT as a bond proxy, and 60% no. What's your view on how American Tower views its own company in terms of the influence of rates? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. SEPTEMBER 04, 2024 / 6:10PM, AMT.N - American Tower Corp at Citi Global TMT Conference

Question: Mike Rollins - Citi - Analyst : And you mentioned the upgrades. So is there any evolution, in your view, we'll kind of skip ahead on just the capital allocation side since you mentioned it? Does that influence where you see target leverage for the company or how you would approach shareholder returns?

Question: Mike Rollins - Citi - Analyst : Right. And that actually just brings us to our last survey question, and we get this question from investors, so I thought it would be helpful to ask our audience this question of should American Tower simplify its asset mix. And the choices we're offering are no, the current asset mix should generate the best long-term value for shareholders; yes, divest international assets, become a domestic-only tower and data center provider; yes, become a domestic-only tower provider, divest all other assets; or yes, divest data center assets and just become a global tower operator. So we'll see what our audience thinks of this, but maybe we can just start talking about discussing some of these segments. So what have you learned, maybe migrating over to data centers for a moment, of owning CoreSite? And how do you view this platform expanding over time?

Question: Mike Rollins - Citi - Analyst : It kind of brings us to another question that we're asking a lot of the companies here this week. How can the emergence of Gen AI help revenue as well as cost for American Tower? And which is the greater opportunity between these two for value creation for American Tower?

Question: Mike Rollins - Citi - Analyst : And can you give us an update on what's happening with India right now in terms of timing to potentially close the transaction? As well as do you have a view now of where the monetization is ultimately going to end up when you tally up all the parts to it?

Question: Mike Rollins - Citi - Analyst : Very helpful. And maybe taking a step back across the broader international arena, FX has been something you've been dealing with since you broadened outside of the US. And I think, in a recent discussion, you were describing how you're moving towards CPI escalators in a number of markets. Where are you on that front in terms of in the international arena, trying to reduce the FX risk? And if you look back historically, is that a very effective way to manage that currency risk? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. SEPTEMBER 04, 2024 / 6:10PM, AMT.N - American Tower Corp at Citi Global TMT Conference

Question: Mike Rollins - Citi - Analyst : And just thinking about this international arena, maybe you could just take us around the world briefly and give us a fundamental update. So the regions and markets that are performing well and you're seeing maybe accelerating trends and maybe those where things may not be where you want it for whatever reason you can share with us?

Question: Mike Rollins - Citi - Analyst : Good. Are you ready to see the results to our survey?

Question: Mike Rollins - Citi - Analyst : Okay. So question is, should American Tower further simplify its asset mix? 14%, no, the current asset mix should generate the best long-term value for shareholders; 57%, divest International and become a domestic-only tower and data center provider; 0 for yes, become a domestic-only tower provider and divest all other assets; and 29% divest data center assets and become a global tower provider. So a range of perspectives. You've been at the company a long time, the key part of the strategy, leading the company now, how do you look at the asset mix? And what can create the most value for shareholders? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. SEPTEMBER 04, 2024 / 6:10PM, AMT.N - American Tower Corp at Citi Global TMT Conference

Question: Mike Rollins - Citi - Analyst : When you take your 2024 guidance at the midpoint, is there a way to unpack that to just -- if you kind of look past the Sprint churn, look past some of the rates that you've had to absorb and then the divestitures, the deleveraging, is there a way to unpack what that underlying AFFO per share growth is? And then a follow-up to that would be, does that -- should that inform us the type of growth American Tower can achieve in the future?

Question: Mike Rollins - Citi - Analyst : Do you still believe that international should grow faster on average than domestic?

Question: Mike Rollins - Citi - Analyst : And within that context, talking about capital allocation earlier, as you look at getting to this debt leverage target of five times or below, is there a significant opportunity to ramp that development program as you look out over the next couple of years?

Question: Mike Rollins - Citi - Analyst : Steve, thank you so much.