American Tower Corporation (AMT) TD Cowen 10th Annual Communications Infrastructure Summit Call (Transcript)

Summary of American Tower Corporation Conference Call Company Overview - Company: American Tower Corporation (NYSE: AMT) - Event: TD Cowen 10th Annual Communications Infrastructure Summit - Date: August 13, 2024 Key Points Strategic Priorities - Sales Growth: Focus on driving organic growth globally as a top priority [2] - Selective Investments: Increase investments in developed markets while decreasing in emerging markets [3] - Cost Control: SG&A expenses expected to be 35 million lower than the previous year, with a focus on maintaining best-in-class margins [4] - **Investment-Grade Balance Sheet**: Aim to reduce leverage below the 3x to 5x range to enhance M&A opportunities and shareholder value [5] - **Board Refreshment**: Ongoing efforts to refresh the Board with new members and committee chairs [6] Market Activity and Performance - **U.S. Carrier Activity**: Notable uptick in activity for the second half of the year compared to the previous year, with Q1 application volume up 70% over Q4 [8] - **5G Rollout**: Carriers are primarily focused on coverage expansion, with mid-band 5G deployment expected to reach near 100% [26] - **New Leasing Guidance**: Guidance of 180 million to $190 million in U.S. new leasing, with$90 million tracked in the first half of the year [17] International Operations - Emerging Markets Strategy: Shift in capital allocation towards developed markets due to macroeconomic challenges in emerging markets [38][39] - India Operations: Anticipated closing of a sale following approval from the Competition Commission, with expected higher SG&A and maintenance CapEx of about $15 million each prior to close [34][36] - Africa and Latin America: Continued demand for wireless infrastructure in Africa, while Latin America faces escalated churn due to carrier consolidation [44] Data Center Business - CoreSite Performance: Strong demand for data center capacity, particularly driven by hybrid cloud deployments and AI applications [55][58] - Power Constraints: Current power needs secured for development, with plans for future power sourcing to address constraints [63] M&A and Capital Allocation - M&A Landscape: No significant changes in seller expectations; still a dislocation between private and public multiples [71] - Capital Allocation Strategy: Focus on long-term shareholder value, evaluating all potential uses of capital when leverage falls below 5x [67] Challenges and Opportunities - Churn in Latin America: Expected low single-digit growth rates through 2027 due to ongoing churn, but potential for recovery post-consolidation [49] - Power as a Service Model: Expertise in power management in Africa may lead to future opportunities in developed markets [80] - Underwriting Standards: Raised underwriting standards across emerging markets to mitigate risks associated with foreign exchange and economic challenges [82][83] Conclusion - American Tower Corporation is strategically focusing on organic growth, cost control, and selective investments in developed markets while navigating challenges in emerging markets. The company is well-positioned to capitalize on the ongoing demand for wireless infrastructure and data center capacity, particularly in the context of 5G and AI advancements.