American Tower at Nareit REITweek: Strategic Shifts and 5G Growth

On Wednesday, 04 June 2025, American Tower (NYSE:AMT) participated in the Nareit REITweek: 2025 Investor Conference, presenting a balanced strategic outlook. CEO Steve Ondron highlighted American Tower’s focus on developed markets and capital flexibility, while acknowledging challenges such as foreign exchange headwinds and interest rates. The company is optimistic about the U.S. tower leasing environment and the potential of 5G densification.

Key Takeaways

• American Tower is shifting focus from emerging to developed markets, aiming to reduce emerging market exposure to below 25%.
• The company is confident in its U.S. tower leasing growth, driven by 5G deployment and densification.
• CoreSite, part of American Tower’s portfolio, is performing well due to AI-driven demand.
• American Tower is prepared for potential financial challenges with DISH Network, which represents a small percentage of its revenue.
• The company maintains a strong emphasis on capital allocation to maximize long-term shareholder value.

Financial Results

• American Tower aims for mid- to high-single-digit growth in AFFO per share over the long term.
• Dividend growth is expected to align with AFFO per share growth, subject to board approval.
• The company faces headwinds from foreign exchange rates (2.7% impact) and interest rates (1.7% impact) in 2024.
• Cost-saving measures have resulted in $35 million in SG&A savings last year, with an additional $20 million expected this year.

Operational Updates

• American Tower divested its India business to reduce exposure to emerging market volatility.
• The company is focusing on developed markets, particularly Europe, for M&A opportunities.
• U.S. leasing activity has increased for five consecutive quarters, driven by 5G deployment.
• CoreSite has achieved two years of record sales, benefiting from AI demand and pricing power.

Future Outlook

• American Tower sees no threat from satellites, viewing them as complementary to tower infrastructure.
• The company anticipates continued growth in mobile demand and the deployment of new technologies like 6G.
• CoreSite’s edge computing opportunities are expected to evolve beyond 2026-2027.

Q&A Highlights

• Ondron expressed confidence in receiving payments from DISH Network, despite its financial situation.
• American Tower’s exposure to DISH is limited to 2% of global revenues and 4% of U.S. revenues.
• The company is committed to maintaining flexibility and a strong balance sheet amidst macroeconomic uncertainties.

In conclusion, American Tower’s strategic focus on developed markets and 5G growth positions it for long-term success. For more details, refer to the full transcript below.

Full transcript - Nareit REITweek: 2025 Investor Conference:

Rick Prentice, Head of TMT Research, Raymond James: We’re good? Alright. Alright. Good morning, everybody. I’m gonna continue the NAREIT tradition of American Tower and Raymond James continues.

American Tower converted to a REIT, I think, in 2012, and we hosted you at your first NAREIT presentation then. And now we’re still here. I’m Rick Prentice, head of TMT Research at Raymond James. To me, TMT means towers, so is digital infrastructure, media and telecom and satellite carriers. So I want to welcome back to a second NAREIT, I think, right?

Or second summer NAREIT week.

Steve Ondron, CEO, American Tower: Second summer one, yes.

Rick Prentice, Head of TMT Research, Raymond James: Second summer one, yes. Steve Ondron, who is the CEO of American Tower. Steve, thanks for coming.

Steve Ondron, CEO, American Tower: Happy to be here. Thanks, Rick.

Rick Prentice, Head of TMT Research, Raymond James: Yes. I want to start out with kind of since we’ve been doing this a lot of years with American Tower, and you’ve been there a long time, Second REIT week, summer NAREIT session. You’ve been in American Tower a long time. Why don’t you give people a little bit of just background?

Steve Ondron, CEO, American Tower: It’ll be twenty five years in July. So I’ve been there for a long time. A lawyer by training. Was general counsel for about a decade of The U. S.

Business.

Rick Prentice, Head of TMT Research, Raymond James: I’m not going to hold that against you.

Steve Ondron, CEO, American Tower: Some people do. It’s all right. I ran The U. S. Business for about five years and I’ve been in the chair here for about fifteen months.

Rick Prentice, Head of TMT Research, Raymond James: Great. And for those not in the audience that don’t know, we wrote our first tower report in January of nineteen ninety nine. Literally twenty six and a half years ago, we started talking about what this tower industry was going to become. And back then, we said, it’s a pretty simple business model. It’s a great we called it the best business ever, BBE business model.

And that The U. S. Was really a strong place. And then it was vertical real estate. And so here we are in the real estate conference because it truly is.

You don’t have walls and windows, but have long term contracts with some pretty good tenants.

Steve Ondron, CEO, American Tower: We do. And you don’t have the occupancy limitations that you have with other assets. And it’s capital light. So you can keep adding more revenue without putting a ton of CapEx in it. That’s what makes it the best model out there.

Rick Prentice, Head of TMT Research, Raymond James: Revenue conversion to free cash flow is a beautiful thing. I want to start with what’s new or newish since last year’s NAREIT when it was your first time here in the summer one. You have sold the India business. You’ve done some pruning of some of their assets. Why are you selling India?

Why are you pruning? And what lessons have you kind of learned?

Steve Ondron, CEO, American Tower: Sure. So the way we think about our jobs is running this company is we have to manage this portfolio of assets that we have better than anybody else out there. It’s similar to when you’re managing your stock portfolio. So we have to look at the investments we’ve made. Are they performing the way we want them to?

And is the balance the right balance? So when we looked at our overall portfolio exposure to emerging markets, before we divested India, we had about 40% of our AFFO that was exposed to the fluctuations you get from currency issues and macroeconomic conditions in emerging markets. And we thought that was too high. You know, people value us because of the reliable long term cash flow generation, the growth that we can see. And when you get too much exposure in those emerging markets, you see a lot more volatility in your earnings as a result of that.

So that’s kind of the philosophical thing that we were looking at. India in particular was a challenge for us because a lot of the things that we thought would play out in that market when we bought it didn’t play out. It ended up having mostly captive tower companies, which changed the market dynamics. The terms and conditions my favorite thing to talk about, Rick the terms and conditions that evolved there weren’t conducive to the long term growth profiles that we saw other places. You had well capitalized captive tower companies, so that also decreased some of the opportunities to deploy capital there in the right way.

And we also were exposed to a customer who was financially troubled there. And because of that, we had some non payment issues one year, we got paid the next year. So again, that volatility in it. And for us, the way we look at portfolio management is, is that portfolio worth more in someone else’s hands? And if it is, then they should be willing to pay us more than what we think it’s worth in our hands.

And that’s what happened in India. We were able to sell to an incumbent who had an advantage there. They already had a partnership with the most dominant carrier there. They already had a presence there. And so they can better monetize that than we could.

So it made sense for us to divest it. And it fit in with this long term vision of improving the quality of cash flow. And that’s a mantra you’ll hear from Rod a lot, you’ll hear it from me. We’re trying to improve the quality of our cash flow because that’s what we think is the most desirable aspect of being a REIT and being a reliable investment that grows.

Rick Prentice, Head of TMT Research, Raymond James: And when you think about allocating new capital, because one of the great things about the tower model is you produce a lot of cash. And then the question is, do you do with all that cash? What’s the right leverage? What’s the dividend rate? But then what do you do with the excess?

Steve Ondron, CEO, American Tower: Yeah, absolutely. So the way we think about the investment is, well, first of all, where we’re going to put it is important strategically. And because we have looked at that balance in our portfolio, ex India, we still have about 25% of our cash flow exposed to emerging markets. Now we think those emerging markets offer great growth opportunities for us over time. So we think it’s appropriate to have some exposure.

But we still think 25% is probably a little high. So we’re allocating more capital toward the developed markets. Now that’s not trying to message we’re going to sell stuff. That’s just saying that we’re going to invest more in developed markets. So as those grow over time, the emerging markets will become a smaller percentage of the portfolio over time.

But in terms of where we allocate capital, we’ve worked really hard over the last eighteen months or two years to get a lot of capital flexibility. After we purchased Telesius and CoreSite, we were over our target leverage range and we had a commitment to get down to under our target leverage range.

Rick Prentice, Head of TMT Research, Raymond James: Five point zero zero zero zero?

Steve Ondron, CEO, American Tower: Five point zero zero zero. So we took some tough decisions last year to get there. We cut back on our internal CapEx programs. We paused our dividend, which was a very tough decision to make pause the growth in our dividend for a year. We made a number of moves in terms of terming out debt on our balance sheet to really get down to where flexibility there.

And the reason we wanted to do that is to make sure especially in kind of uncertain times that we can look at every incremental dollar of investable cash and allocate it among kind of the five uses that we see. So we have M and A, our internal CapEx program, further delevering, stock buybacks and dividend payments. And the way we think about those is we need to create the most long term shareholder value. We’re not looking to drive short term catalysts, looking to drive long term shareholder value. So Rod and I are very much in agreement that’s a math equation and we look at each opportunity when it comes in and they compete against each other.

So if you see us buy towers, we think it’s because they’re going to give us a better return than buying our stock. If you see us incrementally invest in CapEx internally, it’s because we think it’s better than buying any M and A that’s out there. And that’s a really dynamic opportunity to allocate capital, because we don’t have a strategic imperative. We’ve gotten the scale we need in the markets that we’re in. That’s been something we’ve worked really hard to get to so that we can create the most value.

Rick Prentice, Head of TMT Research, Raymond James: So if you think about the M and A equation out there, a lot of times there’s books available in Europe. How do you think about kind of price, growth rates and quality of assets, terms and conditions? But how do you think about M and A opportunities around the world that might be interesting or might not be as interesting in the current environment?

Steve Ondron, CEO, American Tower: Sure. Well, first lens is our strategic imperative is to invest in developed markets. So that’s where we’re going to be focused. I’ve got many teams that like to buy stuff. So you’re going to see them involved in every process because they look every You’re to look at everything, right?

There’s nothing that’s come across Minor Rod’s desk of any scale that’s compelling right now. And it is part of it is just looking at where it is, what the price is, and what the terms and conditions are, and how constructive the market is. And so you know we get a lot of questions about Europe because there are things being sold in Europe and you’ve got to break Europe apart. It’s not one megalith. Each individual market has its own telecom industry and there’s going to be different growth aspects that you have to evaluate there.

And so we feel really good about the portfolio that we bought that’s predominantly Spain and Germany. We have a small presence in France. And we were very patient. We passed up a lot of deals. And so as we’re looking at the stuff that’s coming available, some of those deals are recycled.

So we didn’t buy them the first time, so we don’t know why buying the second time. And some of those deals are just in markets that we don’t think is constructive for the long term. And some of them don’t have the right terms and conditions. I’m hoping that changes. I hope that we do find opportunities to further increase our scale in the right place at the right time at the right price.

But it’s still got to be better than buying our stock. And that’s kind of hard to do these days. So that’s really how we think about it.

Rick Prentice, Head of TMT Research, Raymond James: I think people are always like hearing that too. It’s like there’s opportunities here for your own stock. You’re also a data center company. Let’s touch on that for second, and then we’ll come back to the tower side. About three and a half years ago, you bought CoreSight, so it’s not new since last year.

But some of the valuations have been new. Data centers have been on a tear. AI probably helping with some of that, pricing power helping with some of Walk a little bit through data centers ballpark 10% or so probably of you guys.

Steve Ondron, CEO, American Tower: It’s a little bit less than that. It’s got high single digits in terms of our overall portfolio. So when we bought CoreSite, the strategic rationale behind that was that we see that we’re always trying to look to where the puck’s going, skating where the puck’s going. And we think that edge data centers will eventually be something that drives activity on towers. And we were starting to work with our innovation team and some of the ecosystem partners on that.

We’re trying to figure out what does this look like? What creates value here? And so we dropped a couple of shelters on sites, took the cable back to a data center, talk to partners about what you need. And what we realized was, you can’t just drop a shelter in a tower, you’ve actually got to connect that to an ecosystem of partners that’s going to feed that use case. And when we were trying to work with data center companies, including CoreSite, we weren’t getting very far with that.

And what we realized is there’s going to be a value transfer for connection to the ecosystem. So we said, well, if we’re going to have a right to win in this space, eventually we have to control that interconnection ecosystem. Now, we didn’t buy CoreSite with a big bet on that. We valued that acquisition. We did the underwriting just based on the core business and said, is it worth what we’re gonna have to pay for?

Can we grow it? Will it be accretive to our business? And the answer was yes. So there’s not a penny of revenue in the underwriting for Edge. So I look at it as like a free option on the Edge for us to be the person that has the right to win there.

In the meantime, that asset has performed phenomenally. AI wasn’t really a thing. Machine learning was, but generative AI didn’t exist. And so we’ve had two consecutive years of record sales. We’ve also had more pricing power because of the supply and demand dynamics in all those markets.

And we’re able to still curate the customer mix that we did before to feed the ecosystem. It gives us a competitive moat, low churn, high mark to market. So that business is performing phenomenally well. So I do get asked, know, why don’t you sell it? And the answer is I’m looking at long term value creation.

I still believe the edge is going to evolve. It’s a little bit later than we thought. We thought it was going be a 2627 event. It’s not. It’s going to be a little bit later.

But everything that we’re working on, the people we’re talking to are still working on it. They just slowed the timeline a bit. So I still think that there’s a lot of value creation to be had there. In the meantime, our mandate is to grow that business as much as it possibly can increase the value there. As long as we’re maximizing the value of that asset, that’s what our shareholders should care about.

And at some point if the edge doesn’t materialize and I’m not going to put a time limit on myself but if we’re looking out and we say, you know what, this isn’t going the way we thought it would, then as portfolio managers we have to ask ourselves, is it still makes sense to be part of us? In the meantime, we’re going to create a ton of value by growing that business and feeding it. And I mentioned flexibility before. When we set up our private capital structure with CoreSite, one of the reasons for doing that was to give us flexibility there. So CoreSite can grow as fast as it needs to grow, and we can choose to invest American Tower Capital or we can ask our private capital partners to put something on.

And frankly we did that in Q1 with a separate JV for DE3. And that’s us taking advantage of that capital flexibility that we built into the model. So I feel great about the asset how it’s performing. I think it’s way outstripping what I thought it was going to because of AI but it still would have we still would have the business case without AI. And then it gives us a real option to be the player that gets to win at the edge when that evolves over time.

Rick Prentice, Head of TMT Research, Raymond James: And it’s a US only strategy.

Steve Ondron, CEO, American Tower: It’s a US only strategy. You know, the edge is going to develop here first. The business model will develop here first. We can prove that out and make money, we’ll figure out if it goes somewhere else or not. But for now, it’s really focused on how do we maximize the value in The U.

S.

Rick Prentice, Head of TMT Research, Raymond James: Let’s come back to The U. S. On the tower side. ConnectX, the WIA Industry Association, had their conference a couple of weeks ago in Chicago. A lot of private tower companies there.

They were very bullish on U. S. Leasing. But they’re seeing not just green shoots that we were talking about a year ago, but they’re seeing really strong applications, dollar terms. Walk us through what you’re seeing and what are the tones at that ConnectX meeting was really a lot of new co locations versus amendments.

So help us understand in the room why that might be important.

Steve Ondron, CEO, American Tower: Well, I’m glad that everybody else is finally starting We’ve been talking about this for two years. We saw an inflection last year where we saw the pause that everyone talked about ending and

Rick Prentice, Head of TMT Research, Raymond James: A pause in the growth.

Steve Ondron, CEO, American Tower: A pause in the growth of the development of new networks. And then we’ve had five sequential quarters of increasing applications coming in. So this is nothing new to us. We saw this coming. We knew it was happening.

And we’ve seen it over time. I think when you think about some of those private guys, they have very small portfolios with very low tenancy. So they’re going to see a higher percentage of their contributions from new leases. And some of those folks have portfolios that you can’t monetize the amendments on anyway. So they’re probably not going talk about those.

If you look at our portfolio, what we’ve said publicly is on the three major carriers, one of them is deployed mid band five gs on about 85% of the sites, one’s closer to 70 and one’s a little bit under half. So that implies there’s still a long runway of activity to get to that, you know, high 90s percentage of mid band five gs that we expect to be seen over time. So we think there’s a lot of pipeline there. We are seeing more new collocations. And that comes in really three flavors.

Some of it is normal fill in. When you build in the first phase of a network and a new technology with a new spectrum band, you’re gonna have holes it’s just natural so you got to fill those in and that usually comes in new sites the second area that we see it is people are painting the map a little bit more there’s some regulatory requirements on some carriers some are doing it for strategic reasons but you’re seeing people push out into into areas they weren’t in before. So we’re seeing some activity there. The third area, which I’m really excited about is we’re starting to see densification activity. Now, the early phase that we see of activity is before applications before services come in is information requests and they say hey I’m looking at this area what heights are available on your towers what’s the structural capacity are there any you know barriers on zoning or landlords And we’re getting a lot more of that tied to planning for densification.

And that’s exactly what we thought would happen at this phase in the five gs build out. So we’re excited about the activity levels that are out there. For us, it’s been a steady ramp over five quarters. We think we’re getting to a good kind of steady state level on it. We’re seeing a little bit more in terms of the colocation mix.

We still have a lot of amendments to do. So I’m not expecting a big flip or anything like that.

Rick Prentice, Head of TMT Research, Raymond James: Okay. One of the more negative things in the news, just really the last few days has been DISH.

Steve Ondron, CEO, American Tower: I haven’t heard that.

Rick Prentice, Head of TMT Research, Raymond James: No. So you have the big three wireless carriers, AT and T, Verizon T Mobile. You have the big three public tower stocks, American Tower Crown and SBAC, and some large privates and smaller privates. DISH is very distant, to be blunt, fourth operator in the wireless world. They stopped making interest payment on Friday.

They announced another one Monday. They were not going make an interest Walk us through what how you protect yourself against what might happen to DISH and what kind of the range of outcomes are?

Steve Ondron, CEO, American Tower: So I don’t like to talk about individual customers by enrolling this case a little bit because it is such an issue. What I think about DISH as a customer, I think about it I’m not thinking about it from trying to invest in their stock I’m thinking about it from a vendor perspective.

Rick Prentice, Head of TMT Research, Raymond James: Are you gonna get paid? Am I gonna get paid?

Steve Ondron, CEO, American Tower: Is the check gonna clear?

Rick Prentice, Head of TMT Research, Raymond James: Yeah.

Steve Ondron, CEO, American Tower: And they need the network they built to protect the spectrum, which is a hugely valuable asset for them. So I expect them to do everything they can to keep the network running to keep the spectrum. So I expect to get paid. And when I look at their balance sheet and I look at the actions they’ve taken, I expect to get paid. There’s a lot of speculation about them out there about them selling spectrum and things like that.

If they sell spectrum they’re not using that gives them more cash to pay me. They’re not using it on my sites anyway. Maybe somebody else would deploy it and I can monetize it. When you think about how you protect yourself I’m a lawyer don’t if I mentioned that but I always try to make sure that we’re very careful in our contracting there’s certain things you can’t protect against like bankruptcies and things like that and so you know that is what it may be. But I’m not losing a lot of sleep on that because I expect to get paid.

When you think about our growth, there’s a component addition our growth. But the only thing we’ve incorporated into our growth algorithm for our kind of guidance we gave for multi years is a contractually committed minimums under the contract. So I’m not banking on anything more from that. I do expect to get paid. If something happened, I can size the exposure for you.

So this represents about 2% of our global revenues, about 4% of our US revenues. So in a worst case scenario, that’s the exposure. I don’t anticipate the worst case happening. I expect to continue to get paid. And I think that’s how this is going to play out.

Rick Prentice, Head of TMT Research, Raymond James: And your contract term probably has a lot of years left on it?

Steve Ondron, CEO, American Tower: We haven’t disclosed exactly what that is, but we’re okay for a while.

Rick Prentice, Head of TMT Research, Raymond James: Typically, master lease agreements would be at least five, seven, or ten years, and they’re somewhat into a process.

Steve Ondron, CEO, American Tower: Generally speaking.

Rick Prentice, Head of TMT Research, Raymond James: Yes. Okay. One of the other questions we get a lot came up yesterday in one of our meetings that, hey, how come the rating agencies don’t appreciate that towers are a really good model is because there’s concern from people outside of the world and outside of the wireless world of what is this whole satellite thing? Isn’t Elon Musk going to come in and just make everybody’s cell phone go away and make towers go away? Help us understand.

You have an investment in ASTS. Help us understand how you view satellites’ role in this ecosystem and what it means to wireless and towers.

Steve Ondron, CEO, American Tower: So we bought the stake in AST to get a board seat there to have a front row seat to what’s happening there. So if there’s any threat, we would know about it. There’s no threat. I’ll be really clear about that. There’s no threat from satellites to towers.

Satellites are a great additional component to the network and they’re going to satisfy the need in places like rural Montana. I don’t want to build towers in rural Montana. Okay? It’s going to fill the need in Sub Saharan Africa where we don’t cover. I don’t want to build towers there.

When you look at just the physics of spectrum and how much throughput you can get, even if you took every available megahertz of spectrum that exists and put on satellites, you still couldn’t meet the needs for people. It would be a lot more expensive. So macro towers continue to represent the lowest cost solution for providing the data throughput that people need. And when you think about the densification we’re talking about in The US, the reason they have to densify is they need to provide more throughput, so they have to reuse that spectrum. There’s not enough spectrum to just add it to the existing towers and get there.

They have to split that spectrum among more cell sites. You’d have the same phenomenon with satellites. So it’s a good complement to the network. It’s gonna help my customers, give their customers better service. I think it’s probably gonna create monetization opportunities for our customers and others in the ecosystem.

I think it’s a good thing. You know, who knows? It might even give us some upside because you might be able to see where there’s a data intensity from a satellite that says, hey, go put a tower here. We didn’t think we needed one. But it’s no threat.

Rick Prentice, Head of TMT Research, Raymond James: Good. Somebody else had changed from the last time we heard NAREIT, tariffs, macroeconomic, geopolitical, all that stuff. Talk us through how you view what’s happening in the broader scheme, what it means specifically for American Tower.

Steve Ondron, CEO, American Tower: For me, it just spells a lot of uncertainty. And that’s really one of the reasons that we focused on flexibility. It’s one of the reasons that we’ve focused on making sure we have a fortress balance sheet that we have the optionality, we cut our floating rate debt percentage down to low single digits. So we’re kind of in a good position no matter what happens. The tariffs don’t directly impact us in a significant way.

I mean we buy some things that might have tariffs on them, generators, things like that, but that’s a small portion of our overall capital plan. And so right now we’re not seeing near term impacts for that. Longer term, think it depends on how it affects our customers. I need healthy customers. If what they buy costs more, there could be some negative impacts there.

But we don’t know how that’s going to play out over time. A lot of the impact of the tariffs and the macro uncertainty has to do with our international business and how that affects the FX rates. And quite frankly when the dollar devalues, which is happening, I haven’t looked today, but yesterday it was still devaluing. That actually makes the FX tailwind instead of a headwind. So that actually helps in the translation back.

So there’s not a huge impact on the core business and one of the reasons we started talking about the core business in our last earnings call we put a slide in there kind of laying that out is to help people understand what’s the health of the actual underlying business and what are the is the variability coming from FX and interest rates and things like that. And so really the biggest impact for us is FX and interest rates, a little bit on the cost structure, but it’s manageable. And other than that, it’s how it affects my customers.

Rick Prentice, Head of TMT Research, Raymond James: Great. And for people in the audience, we hear steel tariffs. You’re probably not building a lot in The United States.

Steve Ondron, CEO, American Tower: We’re not building a lot in The United States and it makes what I’ve got more valuable because you can’t build another one.

Rick Prentice, Head of TMT Research, Raymond James: Right. It makes the competing concept an even tougher model to

Steve Ondron, CEO, American Tower: Exactly. So I again, it’s not a big mover for us because of the scale that we have. And most of the CapEx that we’re doing is smaller augmentations on those existing towers. Right.

Rick Prentice, Head of TMT Research, Raymond James: One thing that seems to continue is that private multiples, kind of an NAV concept, private multiples are staying higher. It feels like low, mid, high 30s, even 40s, depending on the towers and terms and conditions. But the publics are in the 20s. Why is there the dichotomy of that?

Steve Ondron, CEO, American Tower: I think there’s a few reasons for that. I think one is I think that some of the private capital values the model and looks at the long term on it. So they’re not looking at a short term interest rate. They’re not looking at short term care dynamics and things like that. They’re looking at what’s that going to grow over time.

So I do think that there is an undervaluation in the public market because of the macroeconomic conditions. I also think that there’s a little bit of a rational exuberance sometimes in the private markets. Not every tower is created equal. And the growth factor on that tower depends on a number of things. How desirable is the location?

What are the underlying terms and conditions with the anchor? Meaning can you monetize the amendments with the anchor tenant? What’s your escalator? Things like that. And I think that sometimes private capital looks at public tower companies and just assumes that everything’s going to grow in line.

It’s a little bit harder around a tower company than people realize. So I do think there’s some irrational exuberance in there as well. And we’re seeing a little bit of moderation in some of that. We’ve seen a couple portfolios that are not trading for what people thought they were going to. Have gotten pulled, might have fallen through on that.

So my hope is that irrational exuberance tamps down, creates more opportunities for us. And we’ll be there to take advantage of it. But the way we underwrite any acquisition is with the business plan per tower. Even when we bought or subleased 11,500 towers a few years ago, I had 11,500 sales plans created for those. So we would have an idea about what that’s going to look like.

And I think that’s the kind of discipline you have to have and not overpay.

Rick Prentice, Head of TMT Research, Raymond James: You touched on the beginning that you held your dividend flat, no growth. Now we’re seeing growth again this year. Walk us through what people should think of as the dividend growth part of the story.

Steve Ondron, CEO, American Tower: Sure. So as a real estate investment trust, we’re required to dividend out 90% of our taxable income. We believe that the most tax efficient way to do it is to pay out 100% of our taxable income. So subject to board approval, that’s kind of our intent to do that.

Rick Prentice, Head of TMT Research, Raymond James: From the QRS side?

Steve Ondron, CEO, American Tower: Yeah. And so if you think about our AFFO per share growth that should roughly align with our taxable income growth. So you can expect all things being equal for us to have a dividend growth rate that kind of mirrors AFFO per share growth rate. Now there’s some variability you can have with throwbacks and pull forwards and things like that. And there are some things that might not affect it like when we sold India that was dilutive on an AFFO per share basis, but it wasn’t part of the REIT, so it didn’t affect the taxable income.

So there’s a little bit of a disconnect. But broadly speaking, you should expect our dividend to grow in line with our AFFO per share subject to board approval.

Rick Prentice, Head of TMT Research, Raymond James: And obviously, interest rates play into that, FX rates play into that. But if we think about the business model of the tower company with the mix of assets that you have and data center assets that you have, what should people think of as kind of a targeted range of what AFFO per share might grow over a long time?

Steve Ondron, CEO, American Tower: Yeah. So the algorithm that we’ve laid out for folks says that our business model supports mid to high single digit growth even absorbing some impact from FX and interest rates. Now, you got to make some assumptions in terms of what the interest rates and dividends that have FX are going to be. We put a chart in that earnings, I’ll just kind of walk through the twenty twenty five numbers, because I think that’s instructive about how to think about the longer term. So if you look at that chart, I’ll just do it from memory here.

Our U. S. Business on an organic growth basis is growing at about 4.3% this year on organic tenant billings growth plus we have a little bit of increase from services business. That translated into what we call a core growth rate of about 6% of additional growth. Our emerging markets segments, our international segments contribute about 2% of growth on an FX neutral basis.

And the Core Sites growing faster, but it’s a smaller piece. So it contributed about a half percent. So you add all that up and the core business is growing about 8.5%. Now FX was pretty significantly negative for us this year in particular Brazil had a pretty big devaluation last year. So that cost us about 2.7 of growth this year.

And then we had interest rate headwinds because we were refinancing very low interest rate debt at about 1.7% this year. So this year at the midpoint of our guidance that AFFO growth rates about 4.4%, but the core business was in mid-8s. And we put that in there to kind of illustrate that the core business is healthy. We’re writing a lot of new business. We’re organically growing that business.

We’re working through the churn in various markets. And we’re getting to that place where it supports that high growth. But you have to make your own assumptions about what FX is going to do over time and interest rates. Now we’re coupling that growth I do want to mention this we’ve been very disciplined about seeking cost savings over the past two years we were able to get net reductions in SG and A And it would last year was about $35,000,000 this year at the midpoint of our guidance is an incremental 20. And that’s net reductions, that’s absorbing the, you know, inflation cost of raises, etc.

We’re doing that in a sustainable fashion. That’s really as we’re done some automation, kind of reshaping our workforce in line with our new strategic priorities, etc. And earlier this year, I named Bud Nola as the COO of the company, to focus on the rest of our cost structure, structure, with a goal of bending down the growth rate of the rest of the direct cost curve to always keep that growing lower than our revenue growth base to keep that margin expansion on the tower side. So when you kind of couple all that together, we think that’s very supportive of a sustainable mid to high single digit growth rate over time.

Rick Prentice, Head of TMT Research, Raymond James: Great. Thirty seconds. What do want to close with? Anything else you want to make sure we hit? Thirty seconds.

You got it.

Steve Ondron, CEO, American Tower: Yeah. I would just reiterate that towers are a great investment for now and the future. As long as people keep using their cell phones and mobile demand keeps increasing, people need to put more stuff on towers. And so five gs will continue to be deployed across the globe. You will get densification.

You will get new use cases. And six gs is just around the corner. The standards are going to come out in 2029. We’ll be deploying shortly after that. So this cycle through every g continues to build.

And we continue to be see a long runway of opportunity ahead.

Rick Prentice, Head of TMT Research, Raymond James: Steve, TNC, Vondran says it is the BBE best of business ever.

Steve Ondron, CEO, American Tower: It is the best business ever.

Rick Prentice, Head of TMT Research, Raymond James: Thanks. Appreciate it.

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