American Tower Corp Q3 2024 Earnings Call Transcript

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

Question: Ric Prentiss - Raymond James & Associates Inc - Analyst : I got two areas of questions. One on the top line and one at the bottom line. Last year on the third quarter call, you gave some color on new lease activity in North America kind of saying, Hey, we're going to split the goalpost. No guidance given at the time. But kind of directionally, we'll split the goalposts, we'll be above '22 level, but below '23 levels. As we look at the green shoes and the positive stuff you just went through on your presentation, directionally, how should we think about '25 new lease activity versus '24 in North America?

Question: Ric Prentiss - Raymond James & Associates Inc - Analyst : Okay. And then on the bottom line question, slide 11 is helpful. I appreciate slide 11 in the deck. I want to make sure I understand completely, not a CPA, discontinued ops accounting makes my head spin this morning, I'll admit. We had been thinking originally that India would be kind of about $0.08 a quarter, maybe $0.32 a year as far as an impact, net-net-net. How should we think about going from $10.60 to $10.48 to the $9.95, is what I'll call AAAFFO, adjusted attributable -- adjusted funds from operations. How should we think about stepping down from that $10.60 to the $10.48, to the $9.95, which sounds like that should be our jump-off point to thinking how growth in '25 would look?

Question: Ric Prentiss - Raymond James & Associates Inc - Analyst : That's very helpful. And bottom line for me then is attributable AFFO per share, now that it's kind of cleaned up, is it really a mid-single-digit growing business? Can you get back to high single digits? What kind of tailwinds, headwinds would keep you in mid-single digit versus high single digits?

Question: David Barden, - Bank of America - Analyst : Thanks for all that color, Rod. Just Steve, on the on the core site business, you've been flagging the record leasing. It's not a number you guys have disclosed. Could we have a conversation about what the leasing number is and kind of what the historical context of what you're throwing up now is, and what the book-to-bill situation looks like in terms of the available pipeline to make that double-digit revenue growth happen? And then the second question, if I could, Rod, just to follow up on this discussion. So this I think what Rick called it the AAA, adjusted attributable AFFO, this is a number that you're going to report kind of on an ongoing basis, and it will be the anchor for our conversation about the growth in 2025 on a quarterly basis. Is that fair?

Question: Simon Flannery - Morgan Stanley & Co. LLC - Analyst : Rod, you talked about the dividend policy. Perhaps you could just give us some context around how you're thinking about that. If you're growing the bottom line, call it, mid-single digits, is that the right way to think about dividend growth from here, and how that works into payout ratios and leverage and so forth? And just coming back to the CoreSite CapEx, I think you said it could be ahead of the $480 million. I know in the past when you bought this, you were kind of, to some extent, ring-fencing how much you would spend on CapEx. Can you sort of update that for us? I mean would you be prepared to go to, say, $600 million or $700 million, or what are the parameters you're thinking about how much money you do commit to data centers? Obviously, a great opportunity and you don't want to go hyperscale at this point, but it does sound like you see opportunities to deploy capital at attractive levels. But love to understand how big that might go.

Question: James Schneider - Goldman Sachs Group Inc - Analyst : I guess, first of all, strategically, Steve, you laid out some of the attractive qualities of European tower business on an organic basis. At the same time, some of the owners of European tower assets have been more vocal that they're open to potential sales. So I guess, all else equal, is it fair to conclude this would be an area where you might consider an acquisition of scale over the coming quarters or years? And then secondly, on the core site business, a couple of things I noted. One is a large land purchase in the quarter. Is that related to Core Site and a new site development there that you're anticipating? And then I think you also made a comment on maybe inference being a little bit slower to materialize in your initial expectations. So maybe if you could unpack that -- those two things a little bit, that would be great.

Question: Batya Levi - UBS Securities LLC - Analyst : Back to the domestic operations. Can you talk about if you're seeing any change in the colocation versus amendment mix? And to the extent that this starts to expand its network, is it mostly included in the holistic agreement that you have right now? Or could there be upside? And one thing quickly on domestic gross margins. I think they were down a little bit year-on-year. Is there anything to call out there? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. OCTOBER 29, 2024 / 12:30PM, AMT.N - Q3 2024 American Tower Corp Earnings Call

Question: Nick Del Deo - MoffettNathanson LLC - Analyst : Steve, in your prepared remarks, I think you said that you're more convinced than ever that mobile edge is going to eventually be an opportunity even if it's taking a bit longer to transpire. I guess, are there specific conversations or data points or other things you can point to help us understand that increased level of conviction? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. OCTOBER 29, 2024 / 12:30PM, AMT.N - Q3 2024 American Tower Corp Earnings Call

Question: Nick Del Deo - MoffettNathanson LLC - Analyst : Okay. That's super helpful. And then one other on -- thinking about some of your emerging tower markets. You've been clear in your words and actions that you're tightening up CapEx there. I guess has there been any sort of customer reaction to that decision? So for example, customer engagement with respect to discussing larger commitments, maybe if you're not willing to put as much CapEx behind new builds or anything along those lines?

Question: Brandon Nispel - KeyBanc Capital Markets Inc - Analyst : Great. Steve, I think I heard in your answer to Rick's question earlier, you said contracted growth under your MLA steps down next year. Why is that? Do you guys have another customer who comes off their holistic MLA next year? And then for Rod or Steve, do the assumptions for mid-4% organic billings growth next year in the US includes the assumption that churn, excluding Sprint, should be maintained in the sub-1% range, which it's been the last couple of quarters?

Question: Richard Choe - JPMorgan Chase & Co - Analyst : I just wanted to get an update on the cost management initiatives. And I guess, along with that, you pulled back on CapEx in some of the emerging markets. But how should we think about potential divestitures in some of these markets where you feel like you're not enough scale or the trends could take a long time to turnaround?

Question: Richard Choe - JPMorgan Chase & Co - Analyst : And then on the emerging markets that, I guess, where you don't feel like you have enough scale or the -- ?