American Tower at Mizuho Technology Conference: Strategic Growth and Challenges

On Wednesday, 11 June 2025, American Tower Corp (NYSE:AMT) participated in the Mizuho Technology Conference 2025. The discussion, led by CFO Rod Smith, highlighted strategic focuses such as organic growth and financial resilience. While the company is optimistic about U.S. market expansion and European growth, it faces challenges like Sprint churn and competitive pressures in private tower valuations.

Key Takeaways

• American Tower is prioritizing organic growth and margin expansion across global assets.
• The company has successfully reduced floating rate debt to 4% of its debt stack.
• Dividend growth is set to resume, with an expected increase of approximately 5% this year.
• American Tower is shifting investments towards developed markets and data centers, reducing exposure in emerging markets.
• The impact of Sprint churn is expected to conclude by Q3 2025.

Financial Results

• Balance Sheet Strength

- Floating rate debt reduced to 4%, well below the policy target of 20%.

- Leverage decreased from above 5x to 5x.

• Sprint Churn

- $70 million of run-rate revenue churned in Q4 2024.

- Sprint churn impact to end in Q3 2025.

• Capital Expenditure

- Total CapEx ranges between $1.7 billion and $1.8 billion annually.

- Investments are increasing in the U.S. and Europe, with reductions in emerging markets.

• Dividend

- Planned dividend growth of approximately 5% this year.

- Targeting a dividend payout of 100% of REIT pre-tax income.

Operational Updates

• Organic Growth

- Focused on driving organic growth across global assets.

• Margin Expansion

- Emphasizing operational efficiency and cost reduction.

• US Tower Business

- Increased spending from carriers for coverage and capacity needs.

- Notable colocation activity from large carriers.

• International Business

- Exited India due to unfavorable future opportunities.

- Prioritizing developed markets like the U.S. and Europe.

• CoreSite Data Centers

- Performing better than initially expected, with economic growth projected at 6-8%.

- Customers are beginning to lease space for AI inferencing.

Future Outlook

• US Market

- Anticipates acceleration of 5G applications from late 2025 into 2026.

- Expects normalized churn of 1% to 2%, trending towards the lower end.

• Europe

- Business in Europe is outperforming expectations with a disciplined growth approach.

• CoreSite

- Projects high single-digit to double-digit growth over the coming years.

- Potential synergies between towers and data centers, especially at the edge.

• Capital Allocation

- Focused on internal CapEx, dividend growth, M&A, and share buybacks, all aimed at enhancing shareholder value.

Q&A Highlights

• Leverage Profile

- Comfortable maintaining leverage at 5x, with no immediate rush to deleverage.

• M&A

- Acknowledges disparities between private and public tower valuations.

- Remains open to M&A opportunities, leveraging advantages over private capital.

For more detailed insights, please refer to the full transcript below.

Full transcript - Mizuho Technology Conference 2025:

Jennifer Fritsche, TMT Group, Banking Side, Former Analyst: Hey. Terrific. For those of you that I don’t know, I’m Jennifer Fritsche, and I sit in the, TMT group on the banking side. But in my former life, I was an analyst and had the privilege of covering American Tower for a long, long time. And I’m really excited to have Rod Smith here.

Rod, welcome. Thank you so much for joining us.

Rod Smith, EVP and Chief Financial Officer and Treasurer, American Tower: Yeah. Thank you, Jennifer. It’s great to be here. Nice seeing you again.

Jennifer Fritsche, TMT Group, Banking Side, Former Analyst: You too. So Rod is the EVP and Chief Financial Officer and Treasurer of American Tower. He’s also a member of the Board of Directors for ATC Europe. He joined in 02/2009, is that right? Wow.

Rod Smith, EVP and Chief Financial Officer and Treasurer, American Tower: That’s right. Sixteen years ago.

Jennifer Fritsche, TMT Group, Banking Side, Former Analyst: Oh my gosh. And has had many prior roles at the company, especially in when I knew him at the as the treasurer and CFO of the US Tower division. So welcome. We’ll jump right into Sounds

Rod Smith, EVP and Chief Financial Officer and Treasurer, American Tower: great.

Jennifer Fritsche, TMT Group, Banking Side, Former Analyst: So I was saying yesterday with AT and T, you know, these are the years when I miss being an analyst because it’s been a really fun ride in 2025 for tower companies, certainly much better than 2024. Can you talk a little bit a bigger picture question. You know, you have a long to do list is my guess. And what is on the top of that list in terms of near term priorities for what you want to accomplish this year?

Rod Smith, EVP and Chief Financial Officer and Treasurer, American Tower: Yes. There are a few things. I mean, certainly, are there is a long list, as you suggest. The priorities for us from a macro perspective really is pretty simple. It’s driving organic growth across our assets globally.

We have teams, operating teams around the globe that that’s their mission number one. Their priority is to make sure that we are satisfying the customers in that pursuit that we’re driving as much organic growth as we can on the assets that we currently have. We also add to that margin expansion and driving operational efficiency around the globe. Over the last several years, where M and A, not just in our sector, not just for us, but globally and in other sectors, has slowed. We’ve taken that time to really refocus on the operating business that we have.

We have a large multinational organization that we manage, and we’ve been very focused on driving efficiency there, reducing complications, simplifying the structure, highlighting decision making paths and reducing costs kind of across the board. We’ve done that multiple years in a row. We continue to focus on that, and that’s going well. That drives margin expansion, which is critical that we, in our view and from our priority set, focus on margin expansion along with driving that revenue growth. Balance sheet strength, and we’ve always had a strong balance sheet.

But as interest rates went up, we reenergized ourselves around creating even more strength in the balance sheet. With interest rates rising as fast as they did, it was a time to take action a little differently than the way we were managing it before, and I think that goes for all companies. So we’ve been very focused on reducing exposure to floating rate debt. We’ve got that down now in the low single digits.

Jennifer Fritsche, TMT Group, Banking Side, Former Analyst: I was going to ask what it

Rod Smith, EVP and Chief Financial Officer and Treasurer, American Tower: said about. Yes. We’ve got it down in the low single digits in our financial policies. The long stated financial policies suggest that that would be around 20% of our debt stack. We’ve got that down to about 4%.

So that gives us much more clarity around what our future interest costs are going to be because that floating rate exposure is much lower. And in line with that, we’ve also been really managing our capital allocation across internal CapEx programs, M and A, share buybacks, even the dividend. We did pause the dividend growth last year to create some additional free cash flow that we could use to delever the balance sheet. We’ve delevered from above five times down to five times, which was critical for us. So that was key.

We’ve also reduced capital spending in aggregate and used those extra funds to put back into delevering. So that’s been critical. And I would also highlight, and this, I guess, gets into the priority, which is really focusing on capital allocation very intently in a very disciplined way to drive shareholder value. So even within a smaller internal CapEx program, we’ve increased the investments in The U. S.

We’ve increased our capital investments in our data center platform in The US and in our European business, and we’ve reduced capital investments across the emerging markets, India, LatAm, Africa. So part of those reductions went to debt repayment and part of it went to fueling higher return, higher probability value add for the investors across the developed markets. And we sold India and used all of those proceeds to drive down balance sheet strength. But the but the but the key to selling India was really about improving our quality of earnings and improving our outlook in terms of value creation for our shareholders, consistent, durable value creation.

Jennifer Fritsche, TMT Group, Banking Side, Former Analyst: So you’ve really, like, controlled what you have control over and really aligned the model, the balance sheet to really be well positioned. If we could break down the business, let’s just start with the domestic tower side. You know, it seems like the carriers, I’m gonna say have finally come back to the spending table after a few years. I know you don’t comment on specific customer but in Q1 you noticed you were seeing a nice pickup in leases outside of what you’ve incorporated in your MLAs, master lease agreements. I’m curious would you characterize this as more coverage or capacity spend by them or a combination of both?

Rod Smith, EVP and Chief Financial Officer and Treasurer, American Tower: Yeah. It really is a combination of both. I mean, they the the the large carriers in The US continue to deploy five g for coverage Mhmm. For five g coverage, so that that continues. Right.

And and we also are seeing a slight slant towards densification, a pickup in new colocation activity from the large carriers. So they’re not only are they investing in their current infrastructure and installations with us to make them five g capable. They’re adding additional new installations on our assets in order to strengthen that five g coverage to densify the network. So it really is a mixture of both.

Jennifer Fritsche, TMT Group, Banking Side, Former Analyst: Both. Okay. And, you know, a significant headwind for the tower companies in The US has been the Sprint churn. I don’t think you’ve been immune to that, and the decommissioning that comes with it. Is it fair to say the worst is behind, you know, speaking for just American Tower in that regard?

And then I’ll add on to that. If that is behind you, do you see any kind of other black swans emerging here that impact the industry?

Rod Smith, EVP and Chief Financial Officer and Treasurer, American Tower: Yes. The worst is behind us regarding the Sprint churn. Absolutely. We have we are running through the very tail end of the Sprint churn for us. So we have $70,000,000 of run rate revenue that churned off back in the beginning of Q4 of twenty four.

We’re running so that is a headwind to our growth this year right up through the end of Q3. When we get to Q4 of twenty five, our churn in Q4 of twenty five will not include any Sprint churn. That will be the time in four years that we haven’t had Sprint churn in there.

Jennifer Fritsche, TMT Group, Banking Side, Former Analyst: So essentially only two more quarters, including the one we’re in.

Rod Smith, EVP and Chief Financial Officer and Treasurer, American Tower: Two more quarters and we’re done with sprint I would expect you’ll never hear us talk about sprint churn again after that. There is no other kind of sprint churn lurking in the background for Everything is done when comes to sprint churn.

Jennifer Fritsche, TMT Group, Banking Side, Former Analyst: Got it.

Rod Smith, EVP and Chief Financial Officer and Treasurer, American Tower: And then after that, when you look around The U. S. Business, our revenue is really underpinned with very strong carriers. And the demand backdrop, the growth in mobile data consumption across The U. S.

Network, we expect an acceleration of five g applications to come at the end of twenty five into ’26. That will be a catalyst for continued investment, from the carriers. So in terms of additional black swan churn events, I think we’re we’re looking at the backdrop in The U. S. And thinking we get to more normalized churn, which is 1% to 2%.

We think in this environment, that would even drift towards the lower end of that churn. There are a few blocks out there that people look at, certainly that we look at The U. S. Cellular business is one. Everyone has questions around DISH, so I won’t proactively bring that up.

We’ll get to that when we get to it. But even if you think about U. S. Cellular, if they were they represent a very small piece of our business, about half a percent of our global revenue, less than 1% of our U. S.

Revenue. If you assume that they churn off completely, which we’re not making that assumption yet, that would still most likely fit within our 1% to 2% normal churn range. So it really is difficult to see a black swan event in The U. S. From a churn perspective.

Jennifer Fritsche, TMT Group, Banking Side, Former Analyst: When I think when you start the year knowing 90 plus percent of your revenue, I mean that’s really the beauty of the tower model. It’s like it’s because of the long term contracts. Now also I wanted, you touched on it, more coverage or more usage coming. I would throw in AI as well driving usage. But I want to ask your opinion on spectrum.

I mean, DC is talking a lot about spectrum but I think it’s gonna be a kind of an uphill push to find it. I think of that as either scenario if spectrum appears from heaven that we get it or it doesn’t. Both of those are good for the tower companies because either you have to deploy the spectrum that you get or if you don’t have spectrum, you have to essentially spend through splitting. Do you agree with that assessment?

Rod Smith, EVP and Chief Financial Officer and Treasurer, American Tower: Yeah. I agree a 100%. I mean, we are in a very, fortunate situation, where we’re able to help our customers whether they get new spectrum or not. Right. Because they’ll do exactly what you said, and we will be able to help them.

If there is new spectrum allocated from the government, which which people are working on that, and it will come eventually.

Jennifer Fritsche, TMT Group, Banking Side, Former Analyst: Yes.

Rod Smith, EVP and Chief Financial Officer and Treasurer, American Tower: Maybe slower than people would like, maybe maybe not. But when the new spectrum becomes available, the carriers will deploy that spectrum by putting more equipment on towers. More antennas, more base radios, more lines to be able to utilize that spectrum in network. So we get an opportunity to help our customers deploy that, which is exactly what we want to do. If they don’t get the spectrum when they want or if the spectrum is delayed beyond where they would like Mhmm.

And then they end up with some network congestion, the way we help them resolve that is they put more equipment on our towers so that they can be more efficient and reuse their current spectrum more frequently within the network. In order to do that, they add radios, add cables and lines, add antennas. So, yeah, think the way you phrase it is exactly right. We’re here to support the customers, deploy their network in the best way they see fit. If they have spectrum, we can help them do that.

It’ll be great for us as well. And if they don’t, then they’re gonna reuse their spectrum more frequently and they can do that on our towers by adding more equipment throughout the network.

Jennifer Fritsche, TMT Group, Banking Side, Former Analyst: Which, I mean, I know there’s nuances to each MLA, but that would probably show itself in the form of more amendment revenue.

Rod Smith, EVP and Chief Financial Officer and Treasurer, American Tower: Yes. Yes. I would say, if it was an absence of new spectrum and that was paired with growth in five gs applications and we saw that growing mobile data consumption, there would be a scenario where that densification, those amendments, let’s say, that would be required because of the need to reuse the spectrum. There could be a volume there that’s not anticipated in our holistic deals that would be additions to pay for us, right? Our holistic agreements with the carriers are mostly tied towards amendment revenue, meaning the way they work is the carrier will tell us how many, amendments, how many sites they want to touch, how much equipment, what is the specific equipment they expect to put up.

We’ll price that, we’ll give them the right to put that up and they’ll agree to pass those fees. And we can smooth that over a number of years or however we want to do it, but the economics match up with the activity that the carriers want to do and that’s what they get. So in a case like you’re describing, if there is an increase in activity required because there’s an absence of new spectrum, most likely that would be outside the holistic deal over time.

Jennifer Fritsche, TMT Group, Banking Side, Former Analyst: Got it. I want to shift to international. You alluded to this, but last year you had a very, very busy year. As you noted, you exited India, you sold some assets in Australia and South Africa I believe and I guess my question would be is should we see these activities as kind of a purposeful shift to focus on more developed markets or am I reading too much into that?

Rod Smith, EVP and Chief Financial Officer and Treasurer, American Tower: It is a purposeful shift really towards optimizing our portfolio for the purpose of increasing the quality of our earnings. We are in a mindset of balancing quality of earnings with growth and long term value creation. And I would say we pair that with the fact that we are a global tower company. There are certain skills that we have as a global tower operator that adds value that we can leverage with customers, on behalf of investors to create good returns for people. That doesn’t mean everything we’ve done is perfect.

And in the case of India, it was not working the way we intended it to work. We made the decision to exit India because we got to the point where the forward looking results of India were not compelling. We didn’t sell it because we had difficulty with the results and the performance over the prior five, ten years. It was because when we looked forward, there was really not a good backdrop for us to have a consistency in a reasonable revenue growth and return profile for our customers. And it was very noisy to manage, right?

So reducing distractions, focusing on ways that we can create value and not spending a lot of time chasing a hope and a dream that wasn’t gonna materialize. So selling indie was all about forward looking opportunities just did not feel good to us after a lot of experience, a lot of knowledge, a lot of learnings. And with that being said, we do believe that our highest opportunity to create sustainable value for our shareholders is to drive a high quality of earnings. And not a moderate and certainly not a low. We don’t want volatility in earnings.

We we wanna remove pockets within our business where you can have big surprises. We wanna remove distractions that that really prevent us from putting the full force of our focus on meaningful ways to create value. And with all that said, we are now prioritizing developed markets. Those are the highest quality economies with the highest quality counterparties. That’s where the citizens within those, economies demand wireless services increasingly so when they’re willing to pay for it.

So that’s where, those cash flows are more valuable to investors because of the durability of those cash flows. That we’re focusing on the places where we can leverage our skills and our platforms to drive maximum shareholder value.

Jennifer Fritsche, TMT Group, Banking Side, Former Analyst: Is there, Rod, one area internationally that you’re most excited about that either you have, you know

Rod Smith, EVP and Chief Financial Officer and Treasurer, American Tower: I mean, we we are in a great position because we do have this diverse portfolio, which not a lot of not I don’t know of any other tower company that has the or really any other publicly traded infrastructure company that has the diversity of opportunities that we have. When it comes to the best opportunities we have, clearly, The U. S. Market is the primary market for us. And it’s not just an affection that we have for The U.

S. Market because it’s where we started, but it’s just got great demand drivers. There’s just an enormous amount of continued growth in mobile data consumption. There’s going to be lots of investing. If we can invest more in The U.

S, that would be the number one priority. We also have a great business in Europe, a growing business in Europe that’s outperforming our expectations. You know, in all candor, it’s not as good as the The US environment, but it’s but it’s better than most.

Jennifer Fritsche, TMT Group, Banking Side, Former Analyst: Yep.

Rod Smith, EVP and Chief Financial Officer and Treasurer, American Tower: And so that’s a place where, yes, we continue to look there, but we will be disciplined. And we’re not under an illusion that growth in Europe is at all cost because it’s not. We have a great portfolio there. If we don’t grow in M and A in Europe, it’s fine. We’re going to do really well in Europe with what we have.

But we will be looking at that intently. We also have the data center platform that’s in The U. S, again, in that premier economy. It’s a differentiated asset that really does drive value. It drives revenue growth.

It minimizes churn. We get good cash mark to markets on renewals. And there’s more capital that could be invested there at very high returns. That is certainly something that we look at. And if that can transition into synergies, which is what we look at, the reason we own this very differentiated high quality set of US data centers in all of our US towers is because we believe there could be synergies between the two, revenue synergies, maybe operating synergies over time as you see a convergence of these networks.

Jennifer Fritsche, TMT Group, Banking Side, Former Analyst: Which perfect segue to my next question. Obviously, you’re talking about CoreSite. Yes. You’re doing some interesting, things on the edge, which I’ll get to as well. But I think you purchased CoreSite in 2021.

I mean, even before this whole AI revolution really kind of kicked into high gear and so your timing really couldn’t have been better. I’m sure there’s many bankers saying sell it now, it’d be worth a lot of money, but I would love to know some how you see this evolving to kind of connect those dots with your core tower business and how that kind of transitions also to what you’re doing on the edge, namely Raleigh?

Rod Smith, EVP and Chief Financial Officer and Treasurer, American Tower: Yeah. Yeah. It’s a great question. I would I would say, a couple of things. before I highlight the edge, I’ll just highlight when we originally underwrote the acquisition of CoreSite, there were a few key principles.

One is we saw a very differentiated asset. Mhmm. It it isn’t your typical sort of old fashioned data center business where you’re providing space and and and power and cooling. These are different, materially different, because there are cloud on ramps, multiple cloud on ramps in every facility. That’s what attracted us Mhmm.

To CoreSite. It’s highly interconnected, network dense. So our customers interconnect with each other within these facilities. They’re not just keeping their own equipment there. That’s why we like the business so much because we just felt the demand backdrop was so strong for that kind of a unique, that kind of a differentiated asset.

So we did see good demand drivers, not from AI, but just the traditional demand. And so we felt like the performance of that business justified the purchase price, and we were going to be in good shape from that perspective. We also did a lot of work on risk analysis and risk mitigation. We came out with a compelling case that the downside risk was not that significant. So that felt pretty good.

We underwrote the transaction at a 6% to 8% economic growth out over the long term. We’re doing much better than I would assume. No. And we’re not seeing a lot of AI driven activity. So this core business is performing better than we thought as a core business.

With that said, we are beginning to see customers come in and specifically lease space and join our ecosystem for the purpose of of inferencing. Okay. And so we’re beginning to see that. I think that’s a it’s a whole another additive demand driver for for this unique asset. So I think that’s that’s pretty good, and we feel as though a high single digit kind of transitioning to double digit economic growth over the next several years.

That’s kind of in our line of sight here for that business. It’s really performing exceptionally well. And then the revenue synergies that we see, the operational synergies is as services across wireless networks and landline networks and what enterprise customers wanna do for themselves Mhmm. Become more sophisticated and latency becomes more of an issue and they need to reduce the latency to get their peak performance. And they need, you know, compute power, content caching out towards the edge and actually computing on their own data, closer to the edge is gonna reduce transport costs over the long term rather than trying to pull that information back and every time they wanna change a number and recalculate things or every time a surgeon wants to move a pen and and redo kind of the imaging.

So we do think that edge is gonna be important. But that’s what it’s that’s what it’s about. It’s really about having that activity closer to the base radios and closer to the end users so you can reduce latency, get the true experience for it, reduce backhaul costs, all of those things kinda come together. And then a big piece of that is those edge facilities we believe will have to be able to connect into on ramps, multiple on ramps for the cloud. And we have that through our Coresight.

We have 43,000 towers in The US. We have landline customers, wireless customers. We have cloud providers as our customers. We have the largest enterprise across the space in our facilities around. So we’ve got the ecosystem that we own and can and control.

And so building out an edge facility, taking landline networks, wireless networks, enterprise customers, giving them a place to run and compute, even AI, I think, will help drive that so that their five gs and beyond networks work properly. And then giving them access into all the cloud on ramps that we have across the country. That was another unique part of that Coresight business was the multiple cloud on ramps in each facility span Southern Northern California, the Chicago area out into the Northeast and up in New York, down in Virginia. And then we’ve expanded into Miami and a few other places. So there’s kind of broad distribution.

We don’t need a ton of facilities, but having multiple cloud on ramps strategically located across the country is important.

Jennifer Fritsche, TMT Group, Banking Side, Former Analyst: Well, can tell you with great certainty, there’s a lot of people who wanted that asset. So it’s a great mode around that business for I wanted to ask on M and A. There’s been kind of shifting back to towers, a wide, wide, wide disparity between private tower deal multiples and where the publics are trading even with a better 2025. Do you agree? And then does that keep you out of the M and A game or how do you see that rightsizing?

Rod Smith, EVP and Chief Financial Officer and Treasurer, American Tower: We do see it. It’s real thing. The valuations of very similar assets on the private side tend to be higher than a similar asset on the public equity side. That it’s been like that for a while. Mhmm.

That’s tightened up a little bit, but it hasn’t, you know, tightened up to a great extent. Right. And there there are reasons for that. Number one, I would highlight that the private capital in the developed markets have identified the towers at as an asset class and and the cash flows from it as highly valuable. Mhmm.

Lots of capital is running in and and doing. So that just highlights that we have a tremendous asset. I mean, starting in The U. S. With the portfolio and the contracts that we have, it’s an amazing business.

But then also the optionality we have all around the world in terms of being able to explore and find pockets where we can create value in that model. So the assets are super valuable. Private Capital has recognized that. The other thing that I think drives some of the differential is just the capital structuring is different.

Jennifer Fritsche, TMT Group, Banking Side, Former Analyst: Mhmm.

Rod Smith, EVP and Chief Financial Officer and Treasurer, American Tower: Right? The private investors, they they see the high quality nature of the cash flows because it’s it’s tied to high quality critical infrastructure that will be paid over the long term. So they’re it’s a very secure cash flow. They’re willing to lever it up quite a bit. And by doing that, they’re reducing their cost of capital and expanding their purchase price.

And they’re competing with one another. So you see debt on the front end and the back leverage coming in, that boosts pricing. We’re not going to do that. We’re a different type of a company being a $100,000,000,000 public company. We are BBB flat.

Intend to continue to be there and continue to drive improvements in our quality of our cash flows and balance sheet. So that’s who we are. So you’ll see us, we’re five times levered. We may drift a little bit below that, but we’ll be around that place. That you could say disadvantages us from a capital structuring standpoint a little bit.

That is true. They lever up sometimes eight times, 10 times, and that is Even higher. Right? In a lower interest rate environment, it was more of a of a tailwind for them. Sure.

And this environment’s a little different, and you may see that the leverage come down from where it was a few years ago. So that that disadvantage may may shrink as we go forward. The other thing I would say is we have advantages that they don’t have. We are a global tower company. We can help the large multinational carriers in multiple places where other people struggle to provide that sort of value.

We’ve got a rich history of operating excellence and the carriers understand that. That helps us in the in the pursuit for, good acquisitions. And so with with that said, I would highlight that the, the Telefonica acquisition we did in Europe of several years ago. Yep. We were up against private capital folks.

They had the advantage of higher leverage and maybe a lower cost of capital. We had the operational advantages, and and that’s what that’s what won the the day for us certainly. And, you know, the other thing I would say is there’s a certain place that private capital operates really well in terms of a size and scale. We’re not constrained by that. No.

So we’re not out of the m and a game by any stretch of the imaginations. We have certain advantages over private capital. But there are also some disadvantages, most notably the leverage, amount of leverage that they put on the assets.

Jennifer Fritsche, TMT Group, Banking Side, Former Analyst: Well, great. I know we have a few minutes left and I want to turn it over if there’s any questions. You have a mic. Any questions? Well I’ll just end to how we started.

In your overall leverage profile, you said you’ve reached your goal of five times and I guess how does capital allocation look from here? I mean would you you touched on this, but specifically, what’s the focus near term?

Rod Smith, EVP and Chief Financial Officer and Treasurer, American Tower: Yeah. We we are in a great position. We’ve got a very strong balance sheet, and and a strong balance sheet has to come with a very strong business. And and we have a strong business, which is why we have a strong balance sheet. We have very high quality durable cash flows.

So now that we no longer have a a need to delever, That would be an optional that’s an option that we have to continue to delever, but we don’t have to delever. And with, again, with the high quality cash flows we have, I don’t feel the need to rush to delever as a priority. We will if it makes sense, but we don’t have to. That means we’re gonna begin to generate a lot of free cash flow that we’ll have to reinvest in the business. We will certainly be looking at internal CapEx programs.

We’re investing $1,800,000,000 $1,700,000,000 in CapEx this year. So we have that amount every year that we can allocate. We can move that up. If we have good opportunities, we can move it down. The key there, and this is one of our strengths, we can move it around.

We can focus it on The U. S. And Europe and CoreSite when we want to, and that’s what we’re doing today. If we find something different, we can allocate it in a way that best creates shareholder value. So there is internal CapEx programs that we have been funding and we will be able to fund.

Certainly, I should highlight the dividend, right? We have a growing dividend. We’ll have about 5% growth this year, which will be subject to Board approval each quarter. We took the growth rate on the dividend to zero last year. That was temporary, a onetime shot just to strengthen the balance sheet.

And now we’re resuming growth in the dividend. So that’s a key priority. And that growth in the dividend is really a REIT requirement. It’s not a discretionary item for management. Are as a real estate investment trust, we’re required to dividend out 90% of our REIT pretax income.

We choose to dividend out our target about 100% of REIT pretax income because we think that’s most efficient. But that dividend is required. And as our pretax income increases, the dividend needs to increase. So there’s not a lot of discretion there. So you’ll see a growing dividend that’ll grow roughly in line with kind of how our AFFO per share grows over time on average over a multiple year period.

So in addition to funding the dividend and the dividend growth, internal CapEx programs, then we do have capital. Excess capital will be generated that we can invest in m and a. We can increase internal CapEx programs. We can buy back our own shares. And that it’s really just a math exercise.

Or we could choose to delever further to be opportunistic and create investment capacity that would be available if there was anything we wanted to do. So it’s all around the math. It’s all tied into driving shareholder value. Anytime we look to allocate capital, it has nothing to do with tower counts, number of countries we’re in, size of the business. It’s only evaluated through our ability to drive durable shareholder value.

And that said, if buying back shares is the best way to do it, we will have the capacity to do that. If delevering is the right answer from time to time, we will do that. M and A, absolutely, we’ll be looking at things. Today, don’t see anything that’s compelling. We haven’t done an M and A transaction in an emerging market since 2018, think, or early two thousand eighteen.

We’ve done a few big transactions in the developed markets since then.

Jennifer Fritsche, TMT Group, Banking Side, Former Analyst: Right.

Rod Smith, EVP and Chief Financial Officer and Treasurer, American Tower: So there has been kind of a long standing focus and prioritization on developed markets.

Jennifer Fritsche, TMT Group, Banking Side, Former Analyst: To have such choices with your free cash flow is a problem many CFOs would love to have. That’s fantastic.

Rod Smith, EVP and Chief Financial Officer and Treasurer, American Tower: I agree with that.

Jennifer Fritsche, TMT Group, Banking Side, Former Analyst: Well, Rod, thank you so much. Thank you everyone for coming and really appreciate the time.

Rod Smith, EVP and Chief Financial Officer and Treasurer, American Tower: Yeah. You’re welcome. It was great being here. Thanks everyone.

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