American Tower Q3 2024 Earnings Call Transcript

Presentation

[Operator]

Ladies and gentlemen, thank you for standing by. Welcome to the American Tower Third Quarter 2024 Earnings Conference Call. [Operator Instructions]

I would now like to turn the call over to your host, Adam Smith, Senior Vice President of Investor Relations and FP&A. Please go ahead, sir.

[Adam Smith, Senior Vice President of Investor Relations at American Tower]

Good morning. And thank you for joining American Tower's third quarter earnings conference call. We have posted a presentation, which we will refer to throughout our prepared remarks under the Investor Relations tab of our website, www.americantower.com.

I'm joined on the call today by Steve Vondran, our President and CEO; and Rod Smith, our Executive Vice President, CFO and Treasurer. Following our prepared remarks, we will open up the call for your questions.

Before we begin, I'll remind you that our comments will contain forward-looking statements that involve a number of risks and uncertainties. Examples of these statements include our expectations regarding future growth, including our 2024 outlook, capital allocation and future operating performance and any other statements regarding matters that are not historical facts.

You should be aware that certain factors may affect us in the future and could cause actual results to differ materially from those expressed in these forward-looking statements. Such factors include the risk factors set forth in this morning's earnings press release, those set forth in our most recent annual report on Form 10-K, and other risks described in documents we subsequently filed from time to time with the SEC. We urge you to consider these factors and remind you that we undertake no obligation to update the information contained in this call to reflect subsequent events or circumstances.

With that, I'll turn the call over to Steve.

[Steven Vondran, Executive Vice President and Chief Executive Officer at American Tower]

Thanks, Adam, and thanks to everyone for joining today. As you can see in our Q3 results, demand remained strong across our global portfolio of real estate assets. In our tower business, our customers' efforts to deploy mid-band 5G for additional coverage continue to support a healthy pipeline of activity across the U.S., Europe and parts of our emerging markets. The discussions we're having with our carrier customers about their need to address upcoming capacity requirements, particularly in the U.S., further reinforce our bullish expectations for the densification phase of the 5G investment cycle.

Additionally, our data center segment delivered another fantastic quarter of leasing, benefiting from accelerating hybrid IT deployments and early signs of AI-related demand. To complement our top line growth, we're executing on our previously stated strategic initiative to enhance our portfolio composition and improve the quality of earnings by focusing our discretionary capital in developed markets and closing our India sale. I want to thank all the teams involved in the sale process for their efforts and dedication to getting the deal over the finish line and for ensuring a successful outcome for both American Tower and Brookfield.

Finally, we continue to add value by managing our cost structure to maximize conversion rates, expand our margins, and drive profitability across our business. We remain committed to executing on all these strategic priorities that position American Tower to deliver durable, high-quality earnings growth over the long term.

On our last call, I talked through the key lessons learned from our historical capital investments that have led us to refine our approach to investment underwriting and prioritize capital deployment to our developed markets. Having recently covered the U.S. tower market where demand remains firmly intact, I'll focus today's remarks on our other developed market platforms, Europe and CoreSite.

However, I'd first like to recognize the critical efforts of our U.S. teams who've been working with our customers to rapidly restore essential communication and emergency services to those communities affected by hurricanes Helene and Milton. I really appreciate all their hard work.

So now I'd like to highlight trends in our European and CoreSite businesses, which are each positioned to capture high rates of organic growth and provide opportunities to further invest where returns meet our standards. I'll start with Europe.

As we've highlighted on past calls, we were highly disciplined in our approach to enter select European markets at scale, and we're seeing that patience pay off. Our assessment of Europe, we leveraged our global underwriting operating experience to effectively evaluate the most attractive markets. Our criteria included macroeconomic stability, government support for mobile connectivity, healthy carrier and counterparty profiles, and critical contract terms and conditions.

Additionally, we saw market and competitive dynamics where we believe that our value proposition as a true independent operator with over two decades of global experience could successfully deliver our best-in-class customer experience that affords outsized new business and enhanced margins. This rigorous assessment led to the acquisition of select portfolios across Germany, France and Spain where mobile data consumption is expected to grow at about a 20% CAGR over the next five years and where governments have advocated for nationwide coverage through various activities, including spectrum auctions and subsidy programs like the new deal in France, Spain's 5G Unico to support rural 5G development and the Gigabit Infrastructure Act at the broader EU level.

Importantly, these markets also present a healthy carrier environment, including increased competition in Germany and Spain through new entrants as well as strong market leaders with whom we contract for the majority of our business. Approximately 85% of our revenues in Europe are indexed to carriers with at least a 25% share in their respective markets. This provides a high degree of insulation from further consolidation risk, maintaining our very low exposure to ongoing consolidation in Spain, while providing visibility into sustained growth and quality of earnings over the long term.

And although ramp sharing is a reality in certain parts of these markets, we've mitigated its impact with well-structured customer agreements that allow us to either monetize that sharing or provide certain revenue protections that support our growth objectives.

American Tower is uniquely positioned to unlock opportunities in Germany, France and Spain where the neutral host independent tower model is still relatively nascent. Leveraging our considerable experience and capabilities can help solve persistent operational challenges experienced by the carriers and infrastructure operators throughout past network cycles. Since closing the Telxius acquisition, which increased our asset count in the region over five times, we further enhanced our ability to serve our customers by internalizing critical activities that aligns with our global competencies, reducing reliance on external vendors, strengthening our process management leadership, and when possible, integrating our teams directly with our customers to expedite decision-making and improve processes.

Our disciplined approach to market entry and effective operational execution have yielded an attractive growth profile in Europe. On the organic side, healthy carrier demand, combined with the benefit of CPI-linked escalators, have yielded an average of over 7% organic tenant billings growth over the past three years. And we remain confident in driving organic growth in line with our mid-single-digit expectations in the region going forward.

To complement this organic growth, we also invested in increased rebuild activity, delivering 1,200 new sites since the start of 2021. Additionally, we've improved the process of getting new colocations on air to further evolve the neutral host model and reduce the carrier's total cost of ownership. This required engagement with regulators, landlords, tenants, vendors and the enhancement of our own internal skill sets that's paying off as approximately 70% of our expected organic new business growth in 2024 is coming through colocations, of which over 1/4 are on rooftops.

Taken all together, we see a long runway of sustained growth, with optionality to further capitalize on a multiyear pipeline of attractive development opportunities. As carriers continue to rapidly deploy mid-band spectrum and densify their networks to meet insatiable data demand, we'll continue to assess opportunities using both the principle that shaped our investments for over a decade and the recent learnings we've institutionalized.

Now I'll switch to our data center business. We also see long-term demand trends within our U.S. data center segment, which, like our European portfolio, provides a platform for incremental development opportunities underwritten at very attractive return profiles. Since closing the CoreSite transaction at the end of 2021, we've achieved record-breaking leasing each year and are on pace again to deliver a new high mark in 2024.

As we've highlighted on past calls, our portfolio is optimally positioned to benefit from accelerating demand for hybrid and multi-cloud IT architecture due to its ability to facilitate seamless, secure, nationwide low-latency interoperability, including native cloud access to a diverse set of customers. Critically, we believe that CoreSite's interconnection campus model, which can be extended to distributed endpoints to support the low latency and cost efficiency required for future use cases, represents a potentially distinct option for new synergistic revenue opportunities when combined with our tower assets at the edge.

Today I'm more convinced than ever that the mobile edge is going to present a meaningful addressable market for us, in part due to the rapid acceleration of AI deployments and the infrastructure required to accommodate future latency-sensitive workloads like inferencing. And while the timing might be delayed relative to our initial expectations, we continue to expect synergies between our Tower and CoreSite platforms over the long term.

In the meantime, we're realizing the benefits of the step function of AI demand and our leasing results at CoreSite. AI directed workloads are a growing component of CoreSite's signed leases, and customer requirements are indicating that demand will only grow in the near to medium term. Over the past several quarters, enterprises have started to build their own GPU-based architectures, connecting to the cloud either through on-ramps or a virtual OCX offering. These deployments resemble a typical hybrid IT architecture, but they're larger and more power dense. As with virtually all workloads across the AI spectrum, our facilities are well equipped to accommodate this need.

More indirectly, our data center portfolio is also benefiting from hyperscale AI absorption that's consuming a record use of capacity through our key markets, exacerbating the supply and demand imbalance and further supporting a favorable pricing environment for both new leasing and renewals into the foreseeable future.

Given the healthy demand catalyst that we see persisting for many years to come, at attractive rates of return that are derisked through accelerated pre-leasing activity, we plan to allocate more capital to CoreSite over the next several years, likely meeting or exceeding the $480 million in development spend assumed at the midpoint of our 2024 guide. Recently, we have received questions as to whether we'd be interested in participating in the extensive hyperscale development taking place in the market today.

We see a long runway ahead for CoreSite's retail-oriented approach, which has yielded industry-leading returns on a sustained basis as our facilities continue to meet and, in certain cases, exceed our initial expectations for mid-teens stabilized yields. Thus, single-tenant hyperscale opportunities are not a priority unless there was a clear opportunity for what to serve as a seed for a new campus or if there were compelling opportunities to invest on our JV partners Stonepeak.

Today we're prioritizing the expansion of existing campuses, new ground-up facilities adjacent to existing campuses, or potentially selected expansion of our national ecosystem by establishing new campuses and new markets. We remain focused on developing multi-tenant colocation facilities, methodically curating the mix of customers deployed within our facilities to enhance the variable interconnection ecosystem and effectively planning for long-term absorption and power needs.

In closing, American Tower has built a global platform of assets that are well positioned to capitalize on the exponential rise in data demand. Our CoreSite data center business and European tower operation are both differentiated by asset quality and best-in-class operations, creating a leading experience for our customers as they deploy their critical networks and applications of today and the future.

These businesses are uniquely positioned to deliver attractive, sustained organic growth and provide optionality for us to assess future opportunities for investment. This portfolio strength, combined with demand catalysts across our global portfolio and the ongoing progress we're making in executing the strategic priorities I laid out earlier this year, position American Tower extremely well to deliver high-quality earnings growth and total shareholder returns for many years to come.

With that, I'll turn it over to Rod to discuss Q3 performance and our updated outlook. Rod?

[Rod Smith, Executive Vice President, Chief Financial Officer and Treasurer at American Tower]

Thanks, Steve. Good morning, and thank you for joining today's call. As you saw in this morning's press release, adjusted for certain non-cash items in the quarter, including the loss taken upon closing our ATC India sale, our solid third quarter results continue to highlight strong demand across our exceptional portfolio of global assets. These durable demand trends, combined with our disciplined approach to capital allocation, continued focus on cost management and strong balance sheet position us to deliver sustained high-quality earnings growth and shareholder returns over the long term.

Before I dive into our results, I want to highlight a key reporting change as it relates to the successful closing of our ATC India sale on September 12. You will now see historical results associated with our India business reported as discontinued operations represented as a standalone line item on the income statement, balance sheet and in our reconciliations to attributable AFFO. As such, certain reported measures, including revenues and expenses within the income statement, in non-GAAP measures such as adjusted EBITDA and tenant billings will not be presented to exclude discontinued operations. I encourage you to refer to the definitions of footnotes throughout our Q3 earnings presentation and press release for a clarity on how the discontinued operations treatment is reflected in our results.

Additionally, we have introduced new metrix. AFFO attributable to AMT common stockholders or attributable AFFO as adjusted, and AFFO attributable to AMT common stockholders per share or attributable AFFO per share as adjusted. These new metrics represent results from continuing operations adjusted for a full period of interest expense savings associated with the use of proceeds from the India sale. The attempt of these as-adjusted metrics is to provide investors with what we believe our continuing operations would produce in attributable AFFO and attributable AFFO per share. We believe this will be useful in determining an appropriate baseline for future periods.

Now a few highlights from the quarter. First, in the third quarter, demand for our global portfolio of assets remained strong as we saw continued acceleration in application volumes in the U.S., which nearly doubled those of the prior year period, and similar growth in our services gross margin. Internationally, mid-single-digit organic tenant billings growth was supported by another quarter of accelerating new business contributions in Europe and double-digit organic growth in Africa.

International organic growth was complemented by selective new site construction, including the four consecutive quarter of over 100 sites in Europe, and approximately 500 new sites overall. As Steve mentioned, demand in our U.S. data center business remains exceptionally strong and well in excess of our initial underwriting, as CoreSite is on track for its third consecutive record year of new leasing, supporting year-over-year revenue growth of over 10%.

Next, complementing the demand trends driving our top line results, we continue to execute strategic priorities laid out earlier this year on the cost management side, third quarter SG&A, excluding bad debt, declined nearly 2% year-over-year, supporting cash adjusted EBITDA margin expansion of roughly 30 basis points as compared to the prior year period. We also made progress in optimizing our portfolio, closing our India sale and signing agreements to sell our land interests in Australia and New Zealand.

Additionally, we further strengthened the balance sheet by using ATC India sale proceeds to reduce gross debt, and we expect further reductions from efficient repatriation in the near term. Importantly, S&P upgraded our credit rating to BBB flat from BBB minus during the quarter, signaling our momentum in executing key financial and operating strategies to enhance our balance sheet strength, financial flexibility and portfolio quality. These achievements reinforce our commitment to actively assess our global portfolio to focus on platforms where we can drive high-quality earnings and earnings growth outsized returns and compelling total shareholder value over the long term.

Finally, on the customer front, we took certain provisions in Colombia related to WOM, who filed for the equivalent of U.S. bankruptcy earlier this year. Any outcome of the potential reorganization is uncertain and it would be premature to speculate. But we began recognizing revenue on a cash basis and reserved a portion of outstanding AR as bad debt. In the third quarter, this resulted in revenue reserves of $13 million, including $3 million in straight line and another $8 million recognized as bad debt expense. For context, WOM Colombia's gross revenue makes up approximately 1.5% and less than 0.5% of our total Latin America and consolidated property revenues, respectively.

Turning to third quarter property revenue and organic tenant billings growth on Slide 6. Consolidated property revenue declined approximately 1% year-over-year, and increased nearly 1% excluding non-cash straight line revenue. Growth was negatively impacted by roughly 3% due to FX, as well as by the non-recurrence of certain onetime benefits in the U.S. in the prior year period and revenue reserves taken in the current period in Colombia.

As I mentioned, performance was supported by the third consecutive quarter of double-digit growth in our U.S. data center business.

Moving to the right side of the slide, consolidated organic tenant billings growth was over 5%. In our U.S. and Canada segment, growth was 5% or approximately 6% absent Sprint related churn. As we have previously indicated, we expect to see a step down towards 4% growth in Q4 due to the commencement of the final tranche of Sprint churn, consistent with prior outlook assumptions.

On the international side, growth was 5.7%, representing an enhancement of over 100 basis points compared to prior expectations through the exclusion of the India business.

Turning to Slide 7. Adjusted EBITDA declined approximately 1% year-over-year. primarily due to the revenue drivers I just discussed. Growth, excluding non-cash straight line, was just over 2%, benefiting from disciplined cost management and a roughly 100% increase in our services gross margin associated with an increase in tower activity. Growth was negatively impacted approximately 3% by FX headwinds.

Moving to the right side of the slide, AFFO attributable to American Tower common stockholders increased 2.6% year-over-year, driven by the high conversion of cash adjusted EBITDA growth to AFFO through the effective management of interest costs, maintenance capex and cash taxes, partially offset by the timing of our India sale. On an as-adjusted per share basis, growth would have stood at nearly 3%.

Now shifting to our revised full year outlook. I'll start with a few key updates. First, outlook has been adjusted for the close of our India transaction. As a result, historical India results will now be treated as discontinued operations, and as such, our property revenue, organic tenant billings and adjusted EBITDA will exclude India contributions for the full year. Our reported AFFO attributable to AMT common stockholders will include contributions from discontinued operations up to the date of closing. Prior year periods have been adjusted accordingly.

Next, our core business and the drivers that underpin our performance remains solid. As a company, we're focused on executing on a strong pipeline of new business demand driving cost discipline and margin expansion across the global business and effectively allocating our capital in a manner that supports sustained value creation. As you'll see, we're absorbing provisions in our outlook related to WOM, consisting of $21 million in incremental revenue reserves, including $3 million in straight line and an additional $15 million in bad debt expense, which combined represent $36 million in downside to adjusted EBITDA and $33 million to AFFO relative to our prior outlook.

However, we're more than offsetting that exposure through direct expense savings and an anticipated settlement with a customer in Brazil associated with the cancellation of future lease obligations, the latter contributing $35 million of upside.

Lastly, our revised FX assumptions include an incremental headwind of $25 million, $20 million and $17 million to property revenue, adjusted EBITDA and AFFO attributable to AMT common stockholders, respectively.

Turning to Slide 8. We are increasing our expectations for property revenue from continuing operations by approximately $15 million. This outperformance includes $15 million of core upside, primarily driven by our data center segment and the one-time customer settlement in Brazil, partially offset by WOM related reserves and an anticipated delay in certain non-run rate reimbursements in the U.S. which we now expect to receive in 2025. Non-core outperformance is driven by increases in pass-through revenue and straight line. Total outperformance was partially offset by FX.

Moving to Slide 9. Organic tenant billings growth expectations for consolidated U.S. and Canada, Africa, Europe and Latin America remain unchanged with trends and catalysts consistent with our prior assumptions. The removal of the lower-growth India business did increase our international expectation by roughly 100 basis points from the prior outlook to approximately 6%, and providing a modest benefit to our consolidated company expectations, though not enough to move our expectation of approximately 5%.

Turning to Slide 10. We are increasing our outlook for adjusted EBITDA from continuing operations by $5 million. This outperformance is driven by the revenue drivers I just mentioned together with incremental operating expenses upside achieved through a combination of recurring savings from various strategic initiatives as well as certain non-recurring benefits. Gross margin expectations for our U.S. services business remain intact, although certain anticipated project delays into 2025 will likely bring our revenue modestly below initial estimates. Partially offsetting the benefits to adjusted EBITDA, we've assumed $15 million of additional bad debt expense associated with WOM and another $20 million in FX unfavorability.

Moving to Slide 11. Adjusting our prior attributable AFFO per share outlook midpoint of $10.60 to the timing of the India closing resulted in approximately $0.12 of dilution, leading to a midpoint of $10.48 per share. This is directionally consistent with the dilution expectations communicated on past calls. Relative to prior outlook, adjusted for the ATC India closing, our revised outlook reflects upside of $0.05, moving the midpoint to $10.53 per share. Improvements include approximately $0.05 in outperformance from our India business through the September 12 closing date and the 100% conversion of cash adjusted EBITDA upside from our continuing operations on a currency-neutral basis, which is largely offset by the impacts of FX.

On an as-adjusted basis, the outlook midpoint remains consistent at $9.95 per share, reflecting the core outperformance in our continuing operations, offset by FX.

Moving to Slide 12. Our capital allocation plans remain relatively consistent, except for the removal of $105 million of capital expenditures allocated to India in our prior outlook. Our planned dividend distribution remains at $6.48 per share, with the expectation to resume growth in 2025, all subject to Board approval.

In summary, at the start of the year, we laid out a compelling set of expectations for 2024, reflective of the strong durable data demand trends that continue to highlight the criticality of our real estate assets. Our top line financial targets assumed accelerating demand in the U.S. and Europe, ongoing growth through 5G coverage and 4G densification across our emerging markets, and a continuation of near record-setting leasing in our data center segment.

To capture that demand, we established a set of strategic priorities aimed to effectively support our customers' needs and drive new business opportunities, manage our costs and capital structure, and optimize our portfolio through selective asset sales and refined capital allocation priorities to enhance margins and the quality of our earnings profile.

Our accomplishments to date and expectations for the duration of the year reflect the successful execution across each of these priorities, we believe this momentum will position us for an even stronger future, enabling us to drive attractive high-quality growth and shareholder value for years to come.

With that, operator, we can open the line for questions.

Questions and Answers

[Operator]

[Operator Instructions] We'll go to the line of Ric Prentiss with Raymond James.

[Ric Prentiss, Analyst at Raymond James]

Yes. Good morning, everybody. 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 slip 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?

[Steven Vondran, Executive Vice President and Chief Executive Officer at American Tower]

Yeah. I'll take that, Rick. It's still too early to give guidance for next year. There's still some moving pieces in it. But if you look at, in particular, the U.S. business, we are hearing a lot of good conversation from our customers about the beginnings of the densification phase. And that's right in line with what we thought was going to happen. And so if you think about next year, in terms of the leasing in the U.S., we still have this final tranche of Sprint churn that's hitting in October this year that will weigh on the U.S. a bit. And so when you kind of couple that with the kind of leasing environment that we're seeing, what's contractually already committed growth under our comprehensive MLAs, which does tick down just a little bit next year, that's most likely you're going to see us kind of in that mid-4s range in terms of the U.S. growth rate for next year.

And that's consistent with our long-term guide of at least 5% from '23 to '27. Because if you think about '26 and '27, at that point, we're through the Sprint churn. And so if you look at 2025 through that lens, we still have about 100 basis points of churn coming in from that final Sprint tranche. So if you normalize that out, that would kind of be in the mid-5s or next year. So that's kind of the way to think about sizing it. And exactly where in that mid-4s range we're going to be, we're not sure yet. We do have one customer that's not on comprehensive. So there's some volume-driven things with that. We also are hearing some interest from customers and new colocations that will be outside of our comprehensive MLAs. We don't know if that's going to fall in the early part of '25, the later part of '25, or '26. We're still trying to figure that out. So there's a few moving pieces there.

But directionally, you can think about it kind of being in that mid-4s range.

[Rod Smith, Executive Vice President, Chief Financial Officer and Treasurer at American Tower]

Rick, maybe I would just add to that, in terms of 2024, levels of new business, we had provided you guys all a range of between 180 and 190. And the way the year is shaping up, it's pretty consistent each quarter in terms of the amount of new biz that we loaded on. We expect that to be similar for Q4 as well, so pretty similar to the last three quarters, which was all in and around a quarterly contribution of about mid-40s, $45 million or so. That would end up landing us at kind of the lower end of that range, around $180 million. And that's all kind of supportive of them transitioning into next year and hitting the numbers that Steve just talked about.

[Ric Prentiss, Analyst at Raymond James]

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?

[Rod Smith, Executive Vice President, Chief Financial Officer and Treasurer at American Tower]

Yes, I think that's right, Rick. So fully appreciate that the numbers can be a little bit complicated with the addition of the sale of India and accounting for that under discontinued ops. So I'll try to hit a couple of the highlights here. And certainly for anyone on the call that wants to go through it in more granular detail, our Investor Relations group is here to walk you through all the details.

First, I'll take you from maybe the $10.60 going over the $10.53, which is kind of our AFFO numbers as reported, right? So the $10.60 -- $10.60 a share was the original outlook. We sold India at the beginning of the fourth quarter here. So that's out of our numbers for the fourth quarter. So that pulled out $0.12. That's just the elimination of the India contribution to AFFO per share for Q4, which they're no longer in there. So we stepped from $10.60 per share to $10.48.

Then on an apples-to-apples basis, India outperformed by about $22 million. That was largely with cash tax refunds and a few other items, this outperformance across cash adjusted EBITDA of the $20 million we show. And then there's a little bit of FX headwind, another $17 million going the other way, primarily in the Latin America countries. That bridges us over to that $4.930 billion, which is equal to $10.53. So that $10.53 still has India in there for the first three quarters. When you drop down to the $9.95, you're basically reducing that by $0.58, which is the combination of pulling out the India contributions to AFFO and also offsetting that with interest savings that we have by using the $2 billion proceeds and the cash we got out earlier than closing in the third -- second and third quarter, which we pulled out another almost $350 million. Using all those proceeds to pay down debt will reduce our interest cost.

So the net of taking India contributions to AFFO out also combining that with the interest savings from using the proceeds to pay down debt is the $0.58 that gets you down to the $9.95.

And then there is some timing issues in there and some outperformance in that number as well, basically the $22 million that I just talked about from India, the discontinued outperformance largely in terms of cash taxes. And that $9.95 million is the best representation of our continuing operations AFFO per share for 2024. And that is a really good starting point to think about how the core business, the ongoing business, will grow going forward.

And as we said, we look forward to mid-single-digit growth rates kind of going forward, and that holds true for 2025. So that would put us into next year on an apples-to-apples basis to $9.95. We think we can grow that into the $10.50 range for 2025, and that would be AFFO from continuing operations.

And again, Rick, I appreciate that there's a lot of numbers in here, and it may take a little bit of time going through it with our Investor Relations team. But trust me, when you kind of look through it, it becomes much easier after you've had a few minutes to think about it. I know people on the phone have only gotten the press release earlier this morning and there's a lot to digest. But once you get through it, I think you'll understand it pretty clearly.

[Ric Prentiss, Analyst at Raymond James]

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 kind of would keep you in mid-single digit versus high single digits?

[Rod Smith, Executive Vice President, Chief Financial Officer and Treasurer at American Tower]

Yes. I think, Rick, certainly getting above mid-single digits is absolutely possible. We are very happy with the portfolio that we have across the globe. We've been working very diligently to improve the quality of the earnings and selling the India business. Removing that volatility from the business is certainly a positive when you think of that.

So the long-term growth algorithm still holds true, just as we've talked in the past, certainly. We think that U.S. business can grow in the mid-single digits, just like Steve walked through the long-term guide for U.S. OTBG, on average, that 5%. We do think next year, with that final tranche of the Sprint churn, will be the low watermark, and then it will spring back up in '26 and '27. And you think about that longer-term guide over that whole period, averaging 5%, we're still on track -- we're still on track to that.

The international business can grow faster than that, certainly. We all know that CoreSite is outperforming our original expectations. We're hitting double-digit growth this quarter and will -- for Q3, and we expect double-digit growth in now going forward annually. And we've had two years of record new business in CoreSite, and we're pretty well-set to either tie that or maybe even set a new record in 2024. So CoreSite is going exceptionally well. We've been very focused on cost controls, expanding margins, managing cash taxes, watching the balance sheet and reducing exposure to floating rate debt.

You put all that together, and yes, the portfolio is strong and it's getting stronger as the quality of earnings go up, and we've gotten through this interest headwind. So when you think about the longer term, yes, we can get beyond that mid-single-digit growth rate. The areas to watch FX, we still have 25% of our earnings coming from Latin America and Africa, so that there is something that we will watch and where interest rates go. There's always uncertainty there. So we will watch that as well.

[Steven Vondran, Executive Vice President and Chief Executive Officer at American Tower]

Yes. And I would just add in, Rick, if you think about kind of our long-term growth algorithm a couple of components we'll watch out for there. The first is Latin America. Over time, we believe that will come back to high single-digit growth. But for the next few years, we are projecting low single-digit growth in there based on care consolidation churn. That's primarily poised, but it's also some potential consolidation that we see kind of on the map. We're seeing some challenges with WOM, and there maybe a little bit more consolidation there. And that's why we think for the next few years, that's going to be low single digits. Once we get past that, that won't be a headwind for us. And we are past the U.S. spread churn after the end of this year. So that will be a positive for us.

And so the swing factors will really be what's going to happen with FX over time. And while we have reduced our exposure to it, 25% of our attributable AFFO is still attributable to our emerging markets. So there is still some FX risk there. And just in the last few weeks, we've seen a negative trend in that, which resulted in a little bit of degradation for next year just for the past few weeks. And then the other piece is interest rate headwinds. And I think it's anybody's guess as to what exactly happens with interest rates over the next few years. So those are the things we'll be watching. But that long-term algorithm of mid- to high single digits holds true even while absorbing some of those costs in there.

[Ric Prentiss, Analyst at Raymond James]

Appreciate, all the color guys. Thanks.

[Operator]

We'll go next to the line of David Barden of Bank of America.

[David Barden, Analyst at Bank of America]

Thanks for all that color, Rod. Just Steve, on the CoreSite 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? Thank you.

[Rod Smith, Executive Vice President, Chief Financial Officer and Treasurer at American Tower]

Yes, David. We'll certainly talk about that metric for as long as it's applicable, which will be a little while until we lap this India sale. But while the India sale and the discontinued operations is in our base number or the comparable prior year numbers, we will let you know what it is.

[Steven Vondran, Executive Vice President and Chief Executive Officer at American Tower]

And when it comes to CoreSite, I don't think we've given a specific number in terms of what sales are. But you can think about it as factor of what they were doing pre-acquisition. That build pipeline, just for reference, we've got about over 40 megawatts of construction ongoing today. It's about 60% pre-leased today, and that's replacing the capacity we've sold.

So the way to think about that is their leasing today is significantly higher than the year before we bought them. And the majority of our $70 million backlog that we have today is commencing between now and kind of the first half of 2025, and the remainder is beyond that. So we haven't given a specific sale number, we are giving you guys the backlog, and that's the way to think about that revenue growth.

But we feel very confident in a high single or double digit -- most likely double-digit growth rate for the next several years in terms of revenue commencing there. And that continued strength continues to feed that sales pipeline, and we're expecting to have a healthy pipeline in 2025 as well. At this point, all those general dynamics that we're seeing in the industry are -- just continue to accelerate. And that is demand for hybrid cloud infrastructure by enterprises is our bread and butter. That's where we continue to see strength in it.

And we're starting to see those enterprises now deploy GPUs. It's their own kind of AI-based models. And that, again, is kind of the perfect customer for CoreSite. So we're seeing our existing customers increasing the size of their installations. And that's going to keep feeding that pipeline for years to come. So we feel like that growth rate is durable for the foreseeable future right now.

[Rod Smith, Executive Vice President, Chief Financial Officer and Treasurer at American Tower]

Yes. And David, maybe I would just add, in terms of the relationship with the prior numbers, our backlog in that $70 million range, that's up from a number in the range of $40 million or so when we bought CoreSite in those first couple of years. So it's up 75% or so. And that's a similar level of increase that we're seeing in the new biz roughly.

[David Barden, Analyst at Bank of America]

Okay. Thank you for the color, Rod.

[Operator]

We'll go next to the line of Simon Flannery of Morgan Stanley.

[Simon Flannery, Analyst at Morgan Stanley]

Thanks so much. Good morning. 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? Thanks.

[Rod Smith, Executive Vice President, Chief Financial Officer and Treasurer at American Tower]

Yes. Sounds good, Simon. I'll take the dividend question, and then Steve will talk to you about the capex for CoreSite. So with the dividend, as we talked about on the last call, we do look forward to resuming dividend growth as we get into 2025. I don't want to get into too much detail in terms of what that growth rate might be. But similar to the way we've discussed it in prior calls, the long-term view of the dividend growth rate is that it will closely mirror the average AFFO per share growth rate over time. So that's the way we think about it.

So if we are hitting a mid-single-digit AFFO per share growth rate on average over time, we would expect that the dividend growth rate on average over that same time period would roughly equal that same kind of a growth rate. That's the way to think about it. You can't really apply that to every individual year because there could be puts and takes. But over time, I think you kind of get the trajectory there.

Now of course, with dividend and dividend policy, every quarter, we go to our Board and ask them to approve the dividend declaration and distribution; we would always do that. So everything I'm talking about here is subject to Board approval. But we do -- again, the portfolio that we have is strong. It's getting stronger with the quality of earnings increasing, the balance sheet becoming stronger. So achieving that mid-single-digit AFFO per share growth rate, maybe driving that up from there as we talked about with Rick's question, that all would kind of tie into our ability to grow the dividend.

And if that dividend grows in line with AFFO per share, we do see the dividend payout as a percent of AFFO staying roughly where it is, which call it between 60 and mid-60s, kind of in that range. That leaves us another $1.5 billion to $2 billion-ish to deploy into our capex programs around the globe or use it to buy back shares, or we can allocate it to debt reductions if we wanted to. But it still leaves us with plenty of excess capital to run the business.

[Steven Vondran, Executive Vice President and Chief Executive Officer at American Tower]

Yes, on the capex for CoreSite, we're not constraining the business. So the business has the opportunity to deploy as much capital as it wants, and so you could see that number grow kind of into that range that you're talking about. And I would also just reiterate that the beauty of how we've constructed our CoreSite entity with our private capital partners is we have a lot of optionality in terms of how we fund that additional capital growth.

So we'll be able to make the determination how much American Tower wants to put in versus how much we rely on our partners kind of real time as we're looking at the budgets for next year. So it's too early to tell you what the budget is going to be and what percentage we're going to pay. But it's a very good use of capital. We're still able to underwrite those mid-teens or better development yield and stabilization. And because the pre-leasing is at historically high levels, it's a very low risk way to deploy capital, and we actually get a stabilization even sooner.

So we think it's a great use of our capital to do that. We'll continue to fund those developments in our campuses as aggressively as we can sell and build. And so we'll let you know kind of where we lay out our expectations for 2025, where that lands. But the numbers that you're suggesting are in the ballpark of something that could be very reasonable for us to be.

[Simon Flannery, Analyst at Morgan Stanley]

Great. Thanks so much, Steve.

[Operator]

We'll go next to the line of James Schneider with Goldman Sachs.

[James Schneider, Analyst at The Goldman Sachs Group]

Good morning, Thanks for taking my question. 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 CoreSite business, a couple of things I noted. One is a large land purchase in the quarter. Is that related to CoreSite 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. Thank you.

[Steven Vondran, Executive Vice President and Chief Executive Officer at American Tower]

Sure. So I'll start with the -- let me start with the CoreSite just because that's the most recent you asked. The land purchase that we did was in L.A., and that's to expand our LA campus. And that's to make sure we have a continued runway to continue to serve our customers there. So that's, again -- you'll see us continue to invest in land around our campuses, and that just gives us more capacity to continue to build and grow over time. And that's what that one was.

In terms of inferencing, I don't think it's been slower to develop than we thought. That was the edge that I was talking about that's been a little bit slower to develop than we thought. The inferencing layer, we're seeing some robust demand for that. And in fact, we're able to be very selective about the counterparty risk that we're taking there. We think that we're an ideal place for inferencing because that's really the distribution channel, how you interact with the large learning models. And we've certainly seen a lot of interest in that, and we are writing some contracts with that. But there are a lot of kind of unproven businesses out there, so we're being very selective about that counterparty risk.

In terms of Europe, we would love to be able to replicate what we did with Telxius in other markets. We don't feel like we have to do that. We have adequate scale in Germany and Spain. We'd like to find some more scale in France, if we could, because we're a little bit subscale there. But we have to be patient and disciplined. We've seen a number of portfolios trade in Europe that had terms and conditions that just aren't conducive to long-term shareholder value growth in terms of the way we see it. And so we've reiterated those kind of factors a few times.

But the terms and conditions are very important to us, as are the counterparties that we're contracting with, as well as the overall colocation dynamic. And what's working so well for us today in Europe is we have a very low churn, we bought towers in a low tenancy, we have very little risk of some of the consolidation we're seeing in Spain and other markets. And we're seeing some competitive dynamics emerge in Europe that just weren't there in the past decade or so where you're seeing people competing on network quality a little bit compared to what they were in the past. And that's promoting some builds.

And you couple that with the real push by the governments to get ubiquitous coverage everywhere, including the rural area, it's a great dynamic for us. So there are portfolios that came available in Europe that had similar characteristics, some more terms and conditions at the right valuation, we'd certainly be interested. But we're not going to rush into anything, and we're not going to buy things that don't meet our investment criteria that create that long-term value chain.

[Rod Smith, Executive Vice President, Chief Financial Officer and Treasurer at American Tower]

James, maybe when it comes to Europe, maybe I'll just highlight a couple of revenue items for you here. So you've heard us say in the past that we're very happy with the European business that we have. It's outperforming our original expectations. I'll just hone in on the organic tenant billings growth.

We had another quarter where we were over 6% OTBG for Europe. We're looking at about 6% for the full year. And that's a very balanced 6%. So we're -- in the quarter, we were a little over 4% contributions from organic new biz. That has been accelerating for the last several quarters. It is higher than it was in any quarter in the last six quarters or so. So we're seeing an accelerated level of activity in the market, which we like a lot. The escalator is right around 3%. And the churn rate continues to be below 1%.

So it's a very balanced revenue generation model that we've been able to build there. And we're very excited about the platform that we have and the durability of the way that business could grow. It looks very much like the U.S. in terms of those numbers.

[Operator]

Anything further, Mr. Schneider?

[James Schneider, Analyst at The Goldman Sachs Group]

No, thank you. That's great.

[Operator]

We'll go next to the line of Batya Levi with UBS.

[Batya Levi, Analyst at UBS Group]

Great. Thank you. 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 they 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? Thank you.

[Steven Vondran, Executive Vice President and Chief Executive Officer at American Tower]

Sure. I'll talk about the demand trends and, Rod, you can talk about the gross margin. Overall, the mix that we're seeing is pretty consistent today, but we're seeing more interest in new colos. So we're getting -- we're having a request for information, like what rent centers are available, what the structural capacity, those kind of precede the applications typically as we're doing our RF [Phonetic] planning, and the conversations we're having certainly indicate that they're moving into a densification phase that will shift more to new colos. So we're encouraged by what we're seeing there.

In terms of how they work in our comprehensive agreements, every one of those agreements is a little bit differently -- works a little bit differently. Some of them are just amendments only. So in those agreements, all the new colocations are incremental. And in some of those, they may include a limited amount of colocations. And once they reach that number of colocations that's in the comprehensive agreement, the incremental over that would be extra outside of the comprehensive agreements.

And so as we constructed our long-term guide, we always knew that we would get this densification phase and that the contribution from new colocation outside of the comprehensive agreement would become a larger factor. And that's what we expect to see over the next several years. We expect to see this ramp-up in colocations that will add into the growth that we're expecting to see over the next several years. And that's very consistent with what we're starting to hear from customers as they're planning for the next phase of their network development.

[Rod Smith, Executive Vice President, Chief Financial Officer and Treasurer at American Tower]

Batya, thanks for joining the call. So on the margins, I'll just hit the total margins, and this applies to the domestic margins as well because of the things I'll describe are really in the domestic business. But we had margins for the quarter a year ago for Q3 of 2023 of about 74.7%. That's down to 74.2%. So you look at that, and it's a 50 basis point reduction.

The largest callout that I would highlight for you is the straight-line impact there is about a negative 90 basis point hit to that margin. So of course, we all know straight line is a noncash item, and it just kind of goes -- it's a dwindling balance here as we kind of run through that straight line curve. So on a cash basis, the margins really increased 40, 50 bps, not decreased.

And then there's a few other small things, some one-time settlements in the prior year that's not reoccurring, things like that. But the straight line balance coming through is the biggest change -- is the biggest impact that makes it -- the reported margins come down, but the cash margins are actually going up.

[Steven Vondran, Executive Vice President and Chief Executive Officer at American Tower]

Batya, one more clarification on the MLAs. DISH is largely a new lease comprehensive agreement. So that one, the new colocation will be included until they get to the maximum number of lease of that agreement which we don't expect to happen for some time.

[Batya Levi, Analyst at UBS Group]

Got it. Thank you.

[Operator]

We'll go next to the line of Nick Del Deo of Moffett Nathanson.

[Nick Del Deo, Analyst at Moffett Nathanson]

Good morning, guys. 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, to help us understand that increased level of conviction?

[Steven Vondran, Executive Vice President and Chief Executive Officer at American Tower]

Sure. So what I would say is we've got a few proof of concepts that we're working on with some partners on some kind of niche use cases. But the underlying theme that we're seeing from really kind of the whole ecosystem, and I would point to the ecosystem at CoreSite, is you're seeing more decentralization. So you're seeing the cloud providers and the AI providers start looking at more distributed architecture today. And the first phase of that is going to more regional centers.

And that's what you're seeing driving a lot of the hyperscale activity that's out there, is you're seeing people diversifying to more regions. Some of that is to take advantage of power cost, but some of that is also to get closer to the end user and the lower latency and transport costs. And so as we see that continuing to emerge. We think that will continue.

And the conversations we're having with those types of players are that they want to continue to diversify over time. So they'll go to more regional facilities for a period of time. They're looking at Tier 2 markets, which is something that we're exploring with CoreSite, is looking at expanding our presence in a couple of Tier 2 markets. You saw us do that in Miami a couple of years ago. We're still looking for opportunities to do that. And then that kind of diversification will continue until it gets out to the wireless edge, we believe, over time.

At the same time, we're seeing our carrier customers start talking about going to 5G standalone infrastructure versus the non-stand-alone 5G that's been deployed to date. And as you look at what's happening across the globe, you're seeing carriers that go to 5G standalone look at mobile edge compute more and more. So as we kind of look at both sides of that system, the wireline and the wireless, they're both going into an architecture that suggests the need for more compute at the edge. And so as we have those conversations and talk about what that eventual plan is and talk with them about what that infrastructure needs to look like at the edge, we're becoming more convinced than ever that that's going to happen. And that's really kind of what I'd point you to.

Again, it's taking longer than we thought. You had to get the 5G standalone on the wireless side for that to make sense. And on the wireline side, there's a little bit of evolution that has to happen to get into that more distributed architecture. But once we -- once that momentum starts, they'll keep pushing out further and further toward the consumer.

[Nick Del Deo, Analyst at Moffett Nathanson]

Okay. That's super helpful. Thank you, Steve. 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 all those lines?

[Steven Vondran, Executive Vice President and Chief Executive Officer at American Tower]

We've been engaging with our customers on that. They understand the issues. I mean they're good business people. Of course, they would love for us to invest more capital there. But they understand that we need to run our business in a way that creates shareholder value. And so if you look at what we were -- we've been able to talk about publicly, where we renegotiated an agreement that we'd love to lower capex and more colocations, that's a result of the customer appreciating the situation we're in and working together to find a win-win solution. And we think that we have the opportunity to continue to do that with those customers.

We do want to support our Tier 1 MNOs across the globe. That's an important business for us. We do think that we will continue to see growth in those emerging markets over time. And so we're not saying we're spending no capital. We're just reducing the capital spend there and focusing more in the developed markets. So certainly, customers are a huge piece of that. And they've been very receptive to working with us to find the right solution for them and for us.

[Nick Del Deo, Analyst at Moffett Nathanson]

Thanks, Steve.

[Steven Vondran, Executive Vice President and Chief Executive Officer at American Tower]

I guess I should say thank you to all of our customers who are listening for understanding and working with us on that.

[Operator]

We'll go next to the line of Brandon Nispel of KeyBanc Capital Markets.

[Brandon Nispel, Analyst at KeyBanc Capital Markets]

Great. Thank you for taking the question. 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 U.S. includes the assumption that churn, excluding Sprint, should be maintained in the sub-1% range, which it's been the last couple of quarters? Thanks.

[Steven Vondran, Executive Vice President and Chief Executive Officer at American Tower]

Sure. So we don't have anyone rolling off a comprehensive agreement. When we structure those agreements, we typically try to structure the revenue towards the activity levels that we're seeing because we don't want to lose the time value of money. And so when you have a densification or when you have a phased building of a 5G network, you don't want to completely smooth it out. It smooths out the peaks and valley some, but you don't want to lose the time value of money for the earlier phases in that. So there's just a little bit of a step down there.

But that also corresponds to an increase in new colocations in the densification phase of it. And so we -- in terms of the kind of mid-4s. We do expect our churn to be at the lower end of the historical range, which was 1% to 2%. We're still expecting to be at the lower end of that range. But we don't want to get too specific on what that is because it's too early. We're still waiting to size that up before we can give you exact numbers.

[Brandon Nispel, Analyst at KeyBanc Capital Markets]

Great. Thanks for taking the questions.

[Operator]

And our last question will come from the line of Richard Chen with JP Morgan.

[Richard Chen, Analyst at J.P. Morgan]

Hi. 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? Thank you.

[Steven Vondran, Executive Vice President and Chief Executive Officer at American Tower]

Sure. So we continue to work on cost management and SG&A has been a particular focus for us because that's kind of the low-hanging fruit, and we're -- we continue to make progress on that. And so if you look at kind of cash SG&A excluding bad debt, kind of year-over-year September year-to-date '24 versus '23, excluding the bad debt, it's down about $17 million or 3% over that period of time. So we're still seeing some savings there.

Our cost management overall, though is more comprehensive than that. We're looking at different ways to globalized parts of our business. That will take longer to realize some of the synergies that we think we can get in terms of looking at a more global approach to things like finance and operations, and we'll continue to explore those. So I do think over time you'll see some savings. It probably won't be as rapid as the savings we had in SG&A, but we think we can continue to expand margins over time with that.

I'm sorry, what was the second part of your question there, Richard?

[Richard Chen, Analyst at J.P. Morgan]

And then on the emerging markets that, I guess, where you don't feel like you have enough scale or...

[Steven Vondran, Executive Vice President and Chief Executive Officer at American Tower]

So there's nothing I would point to, and certainly nothing on the scale of India. In the quarter, we did sign an agreement to sell some third-party land that we had in Australia and New Zealand. And we do have a few and ramp portfolios, fiber businesses, things like that. But if we were able to realize the right price line, you might see us look at that, but there's no kind of active process that I would point you to on that.

But just to kind of reiterate, we've divested India. Mexico fiber, we divested. We exited Poland. So we are continuing to look at the portfolio. And for us, the real question is, can someone else realize more value on the business than we can? And if they can, then that probably creates more value for our shareholders to monetize it. And so there's nothing specific that I would point to, but the Board and the management team is always looking at all aspects of the business, trying to figure out what the right solution is for each market.

[Richard Chen, Analyst at J.P. Morgan]

Great. Thank you.

[Operator]

Thank you. And I'll turn it back to our speakers for any closing remarks.

[Adam Smith, Senior Vice President of Investor Relations at American Tower]

Thank you for everyone for joining the call today. Like Rod said earlier, if there's any questions regarding the representation of discontinued operations, or if you have any other questions regarding the results and outlook in general, please feel free to reach out to Investor Relations. Thank you.

[Operator]

[Operator Closing Remarks].

Participants

Corporate Executives

• Adam Smith, Senior Vice President of Investor Relations
• Steven Vondran, Executive Vice President and Chief Executive Officer
• Rod Smith, Executive Vice President, Chief Financial Officer and Treasurer

Analysts

• Ric Prentiss, Raymond James
• David Barden, Bank of America Co.
• Simon Flannery, Morgan Stanley
• James Schneider, The Goldman Sachs Group, Inc.
• Batya Levi, UBS Group AG
• Nick Del Deo, Moffett Nathanson
• Brandon Nispel, KeyBanc Capital Markets
• Richard Chen, J.P. Morgan