American Tower Corporation (AMT) Earnings Call Transcript & Summary

Okay. Well, good afternoon, everyone. Thanks for joining us, I am Nick Del Deo with MoffettNathanson. And I am thrilled to be joined by Adam Smith, SVP of Investor Relations at American Tower. I know Adam is powering through. He's feeling a little under the weather, so I especially appreciate him taking the time to speak with us today. So thanks, Adam.

Yes. No, sorry, I'm not there, Nick, but I appreciate the opportunity. And yes, as you know, hopefully, I don't pass out midway through, but splash some virtual water on my face if things go south.

Okay. We'll do. All right. Well, listen, I thought it makes sense to start with your U.S. unit. It's the largest and most important contributor to American Tower's business. You get a lot of optimism in the marketplace about accelerating leasing as a result of 5G deployments and a lot of the new spectrum that's come to market. I think we're starting to see that in your results. We're starting to see it in the results of your peers. And your outlook call is for kind of an increase in leasing activity as we exit the year versus where entered the year. You kind of by design, some of the large holistic MLAs that you've signed tend to dampen results over time or at least dampen the relationship between physical leasing and what you recognize as revenue. So I guess in that context, how should we think about your potential leasing upside if leasing stays, call it, stronger for longer.

Yes. No, no. It's obviously a very topical question. And as you know, Nick, we actually have great visibility into our growth profile, just given the fact that we have comprehensive MLAs with AT&T, T-Mobile and DISH. And as you know, Verizon has kind of moved to more of a pay-by-the-drink cadence here in 2022, and that's kind of how we've modeled our long-term guide. As you know, in 2021, we probably had our colocation amendment year-over-year growth contribution, which is obviously a very critical metric, kind of in and around maybe a little less than $130 million. We're accelerating that here in 2022, kind of moving it closer to the $150 million range. And as you know, we continue to see a growth profile per our outlook that meaningfully accelerates in the back half of the year relative to the front half of the year. And I think that's a trend that we anticipate going into 2023. I think even as you know, and I think a lot of our investors, know, we've laid out a growth expectation over a multiyear period that's very contractually supported as a baseline through these comprehensive MLAs. And we were very thoughtful in laying out this growth expectation because we're obviously working through a pretty considerable amount of contractual sprint churn. But what I would kind of focus on is from the 2023 through 2027 time frame, we're looking at organic growth in the U.S. of at least 5% on a reported basis. And absent the impact of Sprint churn or contractual Sprint churn, that moves to at least 6%, which I think is a little bit more in line with kind of that growth profile that investors have kind of grown accustomed to from American Tower over the last decade or so. And roughly 2/3 of that is contractual. So we have very good visibility. And the other 1/3 is really kind of built on these pay-by-the-drink contributions mainly from Verizon, but also some of our national carriers. But we very much look at this as a baseline. And the 2/3 again is a contractual obligation through the comprehensive MLAs. But I think for those of you who have been following us over the last decade or so, we've been under these comprehensive MLAs in some capacity through a mix of our key customers. But when a customer goes above and beyond their permitted real estate rights, we typically do get an opportunity for some level of upside. I think there's additional opportunities for upside as we look at potential for new entrants and whether it's cloud or cable or other enterprise that can leverage our distributed portfolio here in the U.S. and even just increase volumes on the pay-by-the-drink basis, among the customers that are kind of going more on that cadence. So I think for us, we're very excited about what we're seeing over the next couple of years. If you kind of just peel back the, at least, 6% growth, absent the Sprint churn, you know our escalator is roughly 3%. I think you can kind of anticipate a churn rate, absent Sprint, to kind of be in the, call it, the low 1% range. And I think what that implies is a baseline expectation for an acceleration of colocation and amendment contributions above and beyond what -- obviously, what we're realizing here in 2022, but I think you can anticipate an acceleration as we move forward.

Okay. Okay. That's helpful. I think within the drivers that we think about over the next couple of years, C-band is an important one with Verizon, AT&T deploying that. You noted the Verizon is on a pay-by-the-drink model now. If I think back to the 2015 deal where you acquired most of Verizon's remaining towers, if I remember correct, that was 11,000 or 12,000 sites. That deal granted Verizon, some pretty substantial capacity rights on those towers. Again, recognize it sometimes you can't get into the details of these things. But at a high level, should we think of you being able to fully monetize lease-up on those towers with Verizon in the coming years? Or maybe stated differently, have those capacity rights been fully consumed by this point? Or is there still some protection there for Verizon?

No. We obviously don't like to get into too much of the details, Nick, on specific MLA terms among our customers. But as you know, we did acquire a little over 11,000 sites from Verizon in 2015. Those sites do operate under a separate MLA structure versus what expired at the end of 2021. So it's roughly 50-50. But I would say, look, like -- we anticipate Verizon to be a great contributor to our growth over the long term. And they have over the last 6 years, 7 years since we did that transaction. And among the peak of our leasing over the last, call it, 5 or 6 years, you look at 2017, 2018, 2019, Verizon has been a fantastic contributor, has evolved the carriers. So I think whether it's a mix of the existing MLA, whether or not there's an opportunity for a new comprehensive MLA or a pay-by-the-drink, we're here to be a partner for Verizon. And I anticipate them to be a great partner for us going forward and supporting them with their network builds. And I think that fits squarely into the long-term plan that we've laid out.

Okay. Okay. Terrific. Well, listen, I want to turn and spend some time on DISH Network. Obviously, it's a very important driver of new business for the tower industry going forward. It has been a real source of excitement for the operators and for a lot of investors. By all accounts, the company has been pretty active in the leasing market over the past, call it, a year or 2. They made some pretty significant commitments to and your peers for the coming years. Now again, you can't share specific, but what can you tell us about the broad contours of the agreement that you signed with DISH? Is it more tend to, call it, the unit price framework that SBA set up? Is it more like the flat rate for a given number of sites that Crown Castle set up? Or is it something different?

Yes. Again, and we'll obviously have to be a little bit more high level as we are with all of our customer agreements. But I think it's pretty similar to how we've constructed the comprehensive MLAs with our other customers in the past. And it really gives us a very clear contractual baseline of organic growth over a multiyear period. And that's really what we've built into our long-term expectations for the U.S. business. So each year, there's a level of kind of what we call use fee commencements. And under that, there's a level of permitted real estate rights that a customer will have. To the extent that it goes above and beyond just like any of our comprehensive MLAs just kind of generally speaking, when a customer goes above and beyond their permitted real estate rights, there might be an opportunity for upside for American Tower to benefit, and that's something that we've been able to capitalize on and support our growth over the past decade plus. But we very much have a very clear visibility into what will commence on an ongoing basis and how that contributes to our organic growth profile. And it's really, quite honestly, irrespective of any potential deviation in network deployments, we're very much insulated in that regard. So what I would say is what we've laid out in our long-term plan is a baseline growth, what's contractual. And I think in our mind, we're -- it kind of almost sets a floor for how we're thinking about growth over the next several years. But it kind of follows those same kind of general parameters, I'd say, Nick. It's a long-term agreement. There's a contractual level of step-up for organic growth over a multiyear period. And under that, the customer has a permitted set of real estate rights that they are able to kind of follow. So it's pretty consistent with how we've approached comprehensive MLAs in the past.

Okay. Okay. That's helpful. I think one of the more interesting aspects of DISH's deployment is that maybe unlike some new entrants in the past, they have a long-term wholesale agreement with AT&T that supports them for, at least, the next 10 years or so. When I think about it, on the one hand, it might mean that there are some geographies where DISH wouldn't build a site that it may have otherwise built a site. But on the flip side, you might say that it reduces their threshold for success and maybe incents them to invest more in other markets. Now how do you think about the puts and takes of that kind of wholesale agreement for American Tower?

Yes. I think it's -- look, I think when you're building a greenfield network, it's prudent to have a level of kind of a back software support and you're seeing that with AT&T with DISH. You kind of see it in Germany with 1&1 in their agreement with Telefonica. I think it's certainly prudent. We obviously have our comprehensive MLA with DISH. We have our comprehensive MLA with AT&T. So I think this arrangement, we're very much wanting DISH to be very successful and able to accomplish their network goals. And if this is a tool to kind of help them support that, I think that's fantastic. But the fact that we have comprehensive MLAs with both DISH and AT&T, I don't think that agreement really has much of an impact on American Tower in terms of what we've laid out for a growth expectation.

Okay. Okay. As you know, DISH had an Analyst Day last week, first that they have had in ages. They made an interesting comment with respect to you guys. They said -- specifically, they said that their deals with you and Crown Castle gave them an ability to "Pay, frankly, a fraction of what the legacy carriers pay." I guess can you expand upon that at all? I mean, is that simply a reference to the fact that DISH is starting off with much smaller antenna arrays and fewer radios that are naturally going to pay less? Or is there some other aspect of the deal that they're referencing?

We can't talk about every specific customer and kind of their pricing framework. But I think just kind of logically, look, we price space on our tower based on equipment. And I think in the case of DISH, I mean, look, it's a 5G installation. It's a smaller installation. And I think, in the case of DISH, they'll grow over time. They'll build in subscribers. The leases will escalate. And I think over time, it might be more reflective of maybe what other carriers have grown accustomed to. But I think right now, it kind of makes a lot of sense. It's a smaller installation, it's a 5G installation. And I think if you kind of compare that to incumbents that have been augmenting their sites and going through multiple technologies over a decade plus, I mean, I think you would probably anticipate there to be a bit of a disconnect, I would say, in typical lease terms.

Okay. Okay. So nothing -- so if you drilled down, nothing unexpected or atypical for what they're deploying, I'm going to phrase it.

No, no.

Okay. Okay. Obviously, we've talked a lot about the opportunities from DISH. I think we looked at DISH's stock price and perhaps some investor commentary as of late. It seems like there's a general perception that it might be more challenging for DISH to have success in the marketplace over time than maybe many one's thought. I don't want you to -- I'm not going to ask you to endorse their odds of success or anything like that. But I want to talk about what potential downside cases might look like for American Tower. So let's say that DISH enters the market, they kind of do what they're going to do under your MLA. And maybe it turns out to be sort of a Sprint-like situation where they're kind of treading water, not very successful, but not -- maybe not an imminent risk from a financial perspective. I guess, maybe you answered the question already, but is this just sort of they pay you what's in the MLA and that's kind of that? Or do you see something else that we should consider in that sort of scenario?

Yes. I'm certainly not going to endorse or comment on a downside scenario for one of our customers. I think, for us, we're very excited about DISH emerging and entering the market. I think they've obviously got a strong spectrum position. They seem very committed to being successful in deploying a nationwide network. For us, like I said, our growth profile that we've laid into our long-term guide is really a baseline that's contracted. We hope that there's opportunities for upside, but in terms of downside scenario, in terms of deployments, for what we've laid out in our guide, I don't really see a downside case. But look, we view this as a partnership. We've kind of structured, at least the contract. We started the commencement of cash payments here in 2022 to make sure that they're able to get up and running and successful. And I think it's kind of the way we've kind of laid out this plan and the incremental growth of contracted baseline over a multiyear period. I think it kind of gives them a good runway to grow and be successful. And yes, I don't really want to kind of comment on a downside scenario, but I think over the long term, they seem very committed. I think they've struck deals with key players here in the market to support them. And look, I think what they're doing in terms of cloud native -- cloud-native network and the kind of disaggregation of hardware and software and their own O-RAN deployments, I think it's really interesting. I think hopefully, they're able to achieve a level of cost synergies that really kind of make this a compelling approach that they're working through.

Okay. Okay. Listen, let's talk about the cable industry for a bit. They're starting to have a real impact in the market through their MVNO relationship with Verizon. I think, last quarter, Comcast and Charter had over 8 million subscribers, which is a pretty healthy amount, and they're growing pretty rapidly. Both of those companies have talked about potentially offloading some traffic onto owned facilities, perhaps by CBRS spectrum, perhaps using strand-mounted small cells. I guess how are you thinking about the puts and takes of cable wireless offloading? Again, kind of thinking about towers versus strand-mounted small cells, do you think that will kind of be a net positive, net negative or net neutral for AMT?

Yes. It's obviously very early innings here and nothing tangible, I'd say, obviously, Nick, but I think it's a net positive over the long term. I think whenever you've got well-capitalized cable or telecom providers that are entering the market and finding a need for additional wireless infrastructure, that's a positive for us. And while it's very early innings, and I would say it's still a bit unknown as to what the most optimal and efficient way for the carriers to -- or I'm sorry, the cable companies to offload this traffic. We're very keen to being at the forefront to understand and recognize and hopefully facilitate this opportunity. So we're part of -- we're on the board of the CBRS Alliance. We're doing a lot of work to understand how CBRS can be used or supported through our in-building strategy or macro fixed wireless strategy. And I think over the long term, I think it would be great if cable finds an opportunity to utilize our infrastructure. I think we haven't really built in cable to be a meaningful contributor over our long term per our guide. But I think there's hopefully a great opportunity for that to become a little bit more meaningful as their network needs continue to evolve over the next 5 to 10 years. So I think long story short, it's still a bit unknown, but I think we're very keen through some of the steps that we've taken in terms of proactively becoming a part of the CBRS Alliance and some of the other trials that we're doing to make sure that we're prepared to realize whatever opportunity might come and being able to satisfy the network needs of the cable operators. It's pretty early, but I think we're kind of generally optimistic that maybe there's an opportunity for that to be a little bit more meaningful for us over the long term.

Okay. Do you have a view internally as to the viability or usefulness of strand-mount small cells?

I think for us, it's -- it all kind of comes down to returns. I think there's certainly going to be a -- certainly a need. I think certainly in urban locations from our perspective. For us, I think it more comes down to where can we get the best return for our buck. And I think on that front, it continues to be more on the macro side. I mean, that's where our bread and butter is.

Not just -- I meant more from not you investing in small cells, but rather as a competitor to macro towers.

Yes. I don't really see it, Nick. I mean, look, there's going to be certain use cases that I think it's certainly going to be -- it's certainly going to play a role, especially as the 5G ecosystem evolves. But I don't see it displacing macro towers by any means over the long term.

Okay. When we think about leasing going forward, I think the performance of your services unit is kind of a loose leading indicator. It's currently putting up record numbers. If we see services growth kind of inflect one way or another, about how long does it take before that shows up in the P&L from a rental revenue perspective?

Yes, I certainly think it's a general indicator, Nick, but I wouldn't say it's necessarily a one-for-one. I definitely think here in the early going of the 5G cycle, there's -- especially when one of your customers is a little bit more colocation focused and kind of ramping up more of a greenfield network, you're going to see kind of more of a peak on the services side. So over the last decade, we've done, call it, like $75 million to $125 million annually of services revenue. It's inherently a non-run rate business. And I think when you kind of get to 2021, quite honestly, it well surpassed our expectations. And I think it is a function of call it, 3 carriers plus DISH doing a lot of upfront work on their 5G networks. Now that does, to an extent, carry over and indicate kind of an elevation in leasing, and we are seeing that. But I would also kind of say, we've also experienced peak leasing in the 2017, '18, '19 range with services revenue of $100 million. So it is just -- there's a mix of activities, whether it's construction, acquisition, zoning, permitting, engineering. So there's certainly a mix, and I think there's just a lot of different customer initiatives that kind of go into it. With all that said, I do think, obviously, this is kind of translating into an elevation in our leasing versus what we saw in 2021, even now here into 2022, and we expect it to continue into 2023. But do I think kind of 250 is a long-term expectation for our services business? I think it's pretty hard to tell. I think we're trying to be a little prudent here in 2022, and we've got a guide in and around $230 million, but it doesn't indicate that we think our leasing is going down. And as I said, I think we see that continuing to accelerate here in the back half of the year and into 2023. So I think it's kind of a loose indicator, but especially when we're kind of under these comprehensive MLAs and just given the various mixing that you actually see in the services activity and what we're doing for each customer, there's a little bit more to the peeling back the onion in terms of really drawing a pure correlation to our leasing.

Okay. Okay. Understood. Another big topic today that we're getting questions on is inflation. No surprises there. I think people seem increasingly aware of how your revenues and expenses tend to be matched in that your -- at least domestically, your escalators tend to be fixed, but your ground rent escalators are fixed, too, so there's not a real mismatch there. I guess, if we think longer term, I've always kind of been in the view that if inflation were to step up materially in a more permanent way, the tower industry might be in a good position to negotiate incremental business with terms that reflect that new reality as another source of protection. I guess just thinking of that in the context of the long-term MLAs that you've signed, would that reduce your ability to respond to inflation in that way? Or are there other tools you could use to protect the business, if necessary?

I think as you know, Nick, so we do have fixed escalators of around 3%. Probably 95% of our leases in the U.S. have fixed escalators, on average about 3%. Over the last decade, that's really proven to be a nice number for American Tower relative to U.S. inflation. I think economically, you're probably going to see a little pressure relative to the 3% escalator here in the near term. But I don't think we're going to get a lot of sympathy from the carriers given how we benefited over the last 10, 12 years. But I think our view is over the long term, on average, 3% is still a fine number. And I think we're definitely going to see some elevated inflation here in the next several years. But I don't think it's anything that we want to contractually and structurally change the business because I do think our view is when we get past, hopefully, a short-term period of inflation, I think the 3% will continue to make sense. So I don't think we're really rushing to structurally change the business as a result of a couple of years. And I think as you note, obviously, there's economic pressure here in the near term, but there are some levels of mitigation when you get down to the margin. And as you point out, probably 65% to 70% of our direct expenses are -- is land rent, which also has a fixed escalator construct kind of in the 2.5% to 3% range. So we don't have our expenses growing at, call it, 7%, 8%, 9%. But I think -- look, I think we've got strong leverage as we move forward over the long term as a business. But I don't think it's anything we -- there's probably an immediate lever that we're going to be looking to push here in the next couple of years. And I think, again, I think over the long term, our expectation is that 3% will continue to make sense for American Tower.

Okay. Okay. Fair enough. Let's turn to another major initiative that you're undertaking here in the U.S., which is your edge initiative. Obviously, you paid over $10 billion for CoreSite not long ago, plus a couple of other data center businesses that you acquired to try to accelerate that. When I think about the data center operators that generate appealing returns on invested capital, like CoreSite or like Equinix, they do so because of the network effects of ecosystems in their facilities. They're durable. They're hard to replicate. They allow them to better monetize their assets than those of less differentiated operators. So kind of big picture, if I step back about what you're trying to do with the edge, should I think of your ultimate goal there as being the first to develop similar ecosystems across hundreds or thousands of small data centers at the bases of your towers with kind of this winner take all or winner take most dynamic? Or is that not an appropriate way to think about it?

Yes. I think it's -- I think it's very much to be determined in a lot of ways, Nick. I think right now, we obviously underwrote -- we did underwrite the CoreSite transaction on a stand-alone basis. So looking at the existing assets of CoreSite and also the development pipeline, which we're really excited about looking at their capacity to expand the demand that's dictating a need for expansion, we'll be breaking ground this year on our SV9 Santa Clara facility in the Valley this year as well. So -- and those provide very compelling returns. So kind of taken all together, we really did underwrite this on a stand-alone basis. And our focus right now is executing. We're coming off a fantastic first quarter. And I think over the long term, this is going to be a great contributor to supporting our double-digit growth profile. But really, the reason American Tower does this deal, as you point out, is how do we kind of further identify opportunities to enhance our option for success at the mobile edge. And I know you've been following us for a long time. I think this is kind of a recurring theme that we've brought up on earnings calls for probably 3 or 4 years now in terms of what's that new flywheel that can kind of, in our mind, meaningfully provide a level of upside and value back to our macro tower sites. And we've done a handful of trials over the last couple of years, identifying the capabilities of our existing positioning to kind of capture this upside. And we've done, call it, like 6 base MEC installations at the base of our towers. And I think the thing that we really kind of understood is like, look, you need to be able to provide an interconnection-rich, cloud orient rich network dense ecosystem that you can extend out to these sites. Otherwise, you're kind of just providing the land and you're not really solving for this interconnection latency ecosystem that I think is going to be kind of essential. And what we saw in CoreSite was, in our mind, a very reasonable cost option to meaningfully enhance our positioning. And part of that is not just the asset itself, but being able to now proactively become part of the ecosystem, I guess, in terms of the cloud service providers, the network operators, the fiber providers, the MNOs from a different lens and become part of the discussion on how do we kind of advance this moving forward and highlighting the neutral host infrastructure model that I think it's going to be kind of essential from a capital efficiency perspective for not just cloud service providers, but MNOs to kind of address and meet the needs of this next generation of 5G use cases and applications. So I don't know if I'd say it's a winner take all. I think it's just how do we continue to position American Tower to make sure we're not missing out on an opportunity and how do we help prioritize our sites. And I think over the long term, while I think, of course, it's an amazing asset, I think it really kind of advances our positioning. I think there's probably a lot of pieces to the puzzle that further needs to kind of be evaluated through maybe strategic alliances, maybe it's with other data center companies, maybe it's with MNOs, cloud service providers. I think there's a lot still to be determined. I think what you're seeing though is an industry-wide recognition that Mobile Edge is going to be extremely critical. And I think you're already seeing it with MNOs partnering with CSPs already. And whether it's Verizon teaming up with all 3 of the cloud service providers, AT&T is doing similar things. And it's, I think in our mind, rather than each MNO going at it alone, and I would imagine every cloud service provider not over -- finding that overly efficient, I think for us, just like data centers and just like towers, a neutral host model is going to be the most efficient. I think the reason American Tower does its deals further augmenting our positioning to make sure that this becomes an opportunity for American Tower back to our macro sites over the long term.

Okay. Is it necessary to own CoreSite to kind of develop that opportunity versus a partnership or some other structure?

Yes. And if you kind of go back and read the tender offer, Nick, you probably pick up that our relationship with CoreSite started with discussions on a partnership. And what I would also say is American Tower has been discussing partnerships with leading data center companies for a couple of years now. So it's very much something that we've evaluated and we've kind of put that opportunity up against the opportunity to own. So we've had visibility into both options. I think for American Tower, it might come down to 3 things. I think one, what's your strategic positioning in such a relationship or partnership? I think your value proposition is meaningfully different when you're just providing the land versus maybe playing a more strategic. And I think with any partnership, if you're solely coming at it with land, you're probably missing out on the direct cloud service provider relationships, enterprise relationships. And I think you're probably just -- you're at the risk of not being as strategic of a contributor to that relationship. I think 2 is location. I think given that type of positioning where you're just bringing the land, we want to very much be in a position to prioritize our tower sites for these deployments. And I think by having an asset like CoreSite, that further enhances our ability to prioritize those deployments on our site over time. And I think the last one is just general capital priorities. And I think with any JV, there's a level of risk for disagreement or prioritization. And I think for us, we're very much looking forward to the extent it becomes tangible and we're well positioned, I think it's something we would want to prioritize if the returns are there over the long term. Now with all that said, I think the opportunity for future partnerships is certainly real. And I think we're now in just a better position to evaluate what those critical pieces might look like. But I wouldn't rule it out, but I think American Towers position in any partnership moving forward is much more meaningfully augmented as a result of being able to come to the table with these type of assets.

Okay. I think you noted that one of the advantages of picking up CoreSite was the cloud service provider relationships they've built over the years and how strong those are and being able to more directly leverage those. Any early read on conversations you've been having with those with the big cloud providers and whether it's going to help kind of turn your vision for the edge into a reality?

Yes, nothing I would really -- I think we want to be a little careful, Nick, to make sure whatever we communicate to our investors is tangible and meaningful. So I wouldn't like to pick up on anything. We're obviously very early on in this. We closed it December 28. So we're several months into this. Our focus so far has very much been on managing the CoreSite business, integrating the CoreSite business, which isn't not too much of an undertaking since we are operating it on a stand-alone basis. And look, they're coming off a fantastic first quarter. So we just want to make sure we give them the opportunity to continue to be successful and grow. But look, like cloud makes up, call it, 35% of CoreSite's business. So I think having the ongoing dialogue, I think, the edge will evolve from these core data centers out. So being able to have that close type of relationship to help solve for their needs is only going to be a positive for us. But I think when we have something really tangible, I think we obviously don't want to kind of overhype and overpromise. So I think when we have something more meaningful, but we're very much early on in the process at this point. And our focus is on executing at the CoreSite level.

Okay. When we think about your -- some of the long-term targets you've put out there, specifically on AFFO, I think you've said greater than or equal to 10% from '21 to '27. Should we think of the CoreSite deal as kind of bolstering that 10% or being additive to it over that time frame?

I would kind of say it's very much supportive of it, Nick. So I think getting to that growth rate. I think, obviously, CoreSite makes up, call it, 5%, 6%, 7% of our operating profit. So it's not going to overly move the needle from a 10% growth business to a 20% growth business. But I would say it's very supportive of that growth profile. As quite honestly, all of our investments need to be in terms of us to really kind of evaluate and make sure it's accretive to our shareholders. I think for CoreSite, we very much see a strong organic growth profile kind of in the mid-single digits. I think that translates and converts down to the EBITDA and AFFO level to kind of move up towards the mid- to high single digits. And then I think being able to execute on their development pipeline and being able to deploy capital here in the U.S. towards -- and you noted it earlier, a strong return on invested capital type of investments, integrating our existing data centers into the ecosystem, these are all kind of incremental opportunities to further move this investment and the growth profile up to kind of a growth range that we think is supportive of the double-digit expectation that we've laid out.

Okay. Okay. Let's turn to some of your overseas markets. I thought that one of the more interesting things to develop after Tom took the reins of the company was the decision to pretty dramatically ramp the pace of new construction overseas. So maybe talk a little bit about what changed to prompt the decision to put more capital in that direction? And why you hadn't done that historically?

Yes. I think nothing's really changed, Nick, in terms of prioritization. I mean after our dividend, being able to deploy CapEx kind of organically is a top priority for us because, quite honestly, that's where we generate our best returns in the business. But I would say it's an opportunity that's afforded to American Tower because of the scale and the customer relationships that we've built over the last decade. We've built, I think, 40,000 sites since 2010. We're looking to build 40,000 sites over the next 5 years. And this is all afforded to us. One, fantastic secular trends. But two, the scale that we've built in each one of these markets, proactively built in each one of these markets and the strengthening of MNO relationships in these markets. And I think a great example is take Africa, right? So we did the Eaton transaction at the tail end of 2019. And since then, we built about 4,000 towers. We built 2,000 towers in Africa in the preceding 9 years of operating in the market. And then what is it a function. It's a function of building scale in key markets and strengthening MNO relationships with Airtel and MTN, demonstrating our capabilities. And take Europe, for example, being able to do a deal like Telxius, strengthening our relationship with Telefonica. We now have a very strong pipeline of new builds in Germany and in Spain and in Latin America. So I think these are very much a function of why do you build scale? Why do you enhance your relationships, these multinational relationships? And I think that's kind of the benefits that you get after a decade-long cycle of building up these portfolios and building up these MNO relationships. So look, I think we look over the next 5 years, and this is going to be a tremendous opportunity for us. And like I said, it's the best deployment of capital because we get day 1 returns on these assets of, call it, 10% to 14%. If you go look at our vintages over time, what we've built from 2015 through 2021, we're yielding, call it, 20%. What we've built from 2010 to 2014, we're yielding high 20s. And what we've built prior to 2010, we're yielding almost 50%. I mean these are fantastic deployments of capital for us, and we're doing it for the top-tier multinational carriers so there's a degree of high credit that comes with it as well. So getting back to your original point, Nick, nothing's changed. I think if we could build 40,000 towers over a 5-year period, looking back at 2010, we would have done it, but it's just -- it's a function of what we've done. And I would also say that the other beauty of this is we're doing it, we're funding it with internally generated cash flows. So we're not using our corporate balance sheet to send U.S. dollars to Nigeria. We're not sending U.S. dollars to India or Ghana or Uganda or South Africa. These are internally generated cash flows, locally generated cash flows that are being reinvested back into the business. And I think that's also just kind of a nice natural hedge for us as well.

Okay. Okay. That's great color. I guess on the topic of yields, it's kind of interesting. You've noted that the development yields in your overseas markets have remained relatively consistent over time, which is pretty different than what we've seen in the U.S. In the U.S., as people figured out that towers are good assets, you saw the development yields compress pretty significantly. It's part of why you don't build a lot of towers in the U.S. anymore. I guess, is it reasonable to think that international yields will remain elevated? Or should we expect a degree of compression over time? And if we don't see the compression, why is that the case?

Yes. I mean we haven't seen the compression, right. And then obviously, you're going to get some movement just based on the geographies that are contributing to that blended number. But I think, by and large, we're just not really seeing much of a compression. I think -- I mean, one, there's not the type of competition that you see in the U.S., but I think part of that is there's a little bit more complexity to being effective and capable of building these sites in some of these emerging markets. I mean that's just a fact. And I think let's take Africa, for example, you're not just building a site for MTN or Airtel. You're also providing their primary source of power at these sites. These aren't just typically connected to the grid and you're kind of -- the carriers are kind of set in doing their own provisioning for utilities. You need to provide a generator. You need to procure and provision fuel. And I think there's a level of uptime and a level of capability that you need to demonstrate to really kind of put the trust in your hands of these carriers to provide the right uptime and SLAs that they need for their networks. And over time, American Tower, and again, I think it comes back to being a multinational partner. We've demonstrated to MTN. We've demonstrated to Airtel, both across Africa and with Airtel in India, that we're a reliable, capable partner to demonstrate this, and I think that affords us opportunities across borders as well to be quite honest. And we're able to -- we've almost become, I would say, procurement experts over the last couple of years, especially during the supply chain crunch. We're in a position to proactively purchase materials, inventory materials, make sure that we're able to deploy the sites in a very expedited manner to meet their network needs. But then we're also experts in terms of power provisioning as well. We've put in, I think, cumulatively, probably $275 million in Africa towards our power solutions and energy initiatives. And that means investing in lithium-ion battery, solar power, ultimately becoming more efficient at the site. We've reduced our power consumption of our fuel usage in Africa since 2018 by 35% on a per site basis by being more efficient at the site. And this not only supports American Tower sustainability targets, but it also supports the customers in their more indirect sustainability targets as well. But we're also able to provide a very meaningfully enhanced level of reliability at the site and making sure that we're adequately meeting the uptime as well. So I guess it looks very short, like we've -- we have built this trust with the customers in these geographies in what's probably a much more complex type of environment to do these BTSs. And I think it's afforded through our track record, but also our commitment to being a partner when it comes to the power and some of the other ancillary elements that you might not see here in the U.S.

Okay. Okay. That makes a lot of sense. Let's talk a little bit about Europe, which is, I think, one of the more intriguing markets for -- in the tower landscape today. A lot of change there in a relatively short period of time, both in terms of carrier perceptions of the leasing model as well as who owns what assets. You've obviously been in the thick of it, most notably with Telxius. I won't ask you to comment on any specific potential deal, but I guess, more generally, how do you think about the economic benefits of adding scale in some of your key markets versus adding complementary markets?

It's a good question, obviously one we've been getting a lot lately. I would say, over the last decade, Nick, we've been extremely patient in Europe. And we first did our first transaction in Germany with the E-Plus portfolio back in 2012, and really been extremely patient. We've done the FPS transaction in France in 2017. But these are very much -- these are MNO-divested assets that come with very unique sale-leaseback terms and arrangements. And we've been very patient in finding the right asset for us that we think gives us scale, but also comes with a growth profile that is supportive of us being a double-digit AFFO per share company. And we really got that, we believe, with Telxius. And I think it's playing out in our growth numbers right now. So look, we've got an asset with CPI-linked escalators, low churn, amendment capabilities, colocation capabilities, a BTS pipeline, a fantastic counterparty in Telefonica, and strengthened and brought us to scale in very attractive markets, not just in Latin America, where we already have operations, but now having over 11,000 sites in Spain and almost 15,000 sites in Germany and now kind of a more enhanced rooftop portfolio in Germany, which, quite honestly, we didn't have before. And I think it's the strength of these assets are very much playing out in our organic growth. So I think we're very -- even though we're guiding to greater than 9% in Europe from an organic growth perspective here in 2022, we're very proactive in pointing out first half is going to be a little skewed just because we didn't have Telxius in the prior year base. But when you look at the back half of the year, we're looking at organic growth in like the 7%, 7.5% range in Europe, which is really compelling. And as you've probably seen announced, we do have a contractual framework with 1&1 in Germany that, quite honestly, it wasn't even in our underwriting for Telxius and it isn't really a contributor to our guide for 2022. So I think that's another contributor to the growth catalyst that we see going beyond 2022. So we're very excited about the asset we got in Telxius. We think our patience paid off. And I think we've got a fantastic growth profile and some very strong markets that are really generating organic growth rates a couple of hundred basis points above that will be in the U.S. And it's -- I think it's really compelling. And I think when we look ahead, I'd say we're in a great scale position in Spain, and we're in a great position in Germany. And I think any deal -- I think you could probably expect American Tower to almost have a fiduciary duty, I would say, to evaluate deals that happen in our backyard. We have to. And -- but we're going to continue to look at all these assets through the exact same lens that really compelled us to do Telxius. And maybe they're appropriate for us or maybe they're not, but I don't feel as though we're compelled to have to do anything. And the scale that we've created through the Telxius transaction and complementing with an additional build program, I think it sets us up very well to drive a lot of value in Europe over the long term.

Okay. Okay. In the couple of minutes we have left, I thought I'd throw in kind of one last question before I let you go on 2 countries that you've recently entered in Asia, but haven't talked a heck of a lot about, Bangladesh and the Philippines. They both strike me as pretty interesting markets, big populations, I think it's over 0.25 billion people between the 2 of them, very early in the stages of tower development, at least in the Philippines, a lot of pro-development changes to -- from a regulatory perspective and whatnot. So maybe just expand a little bit on your plans for those markets and what we should expect from them in the coming years.

Yes. No, it's -- we look at the Philippines and Bangladesh, as you point out, 2 markets with tremendous population and opportunity. And as you know, they're at a very early stage of network deployments and probably a great tower opportunity as we move forward. And I think as you point out, too, the governments have also taken some pretty attractive steps to help facilitate these network rollouts. So with any emerging market expansion or consideration, we want to do it in kind of a thoughtful manner. So we have -- we're kind of approaching it more with a BTS, build-to-suit type of approach to see how can we leverage our existing overhead and HQ capabilities out of India and APAC, and what can we learn about the market that can help us evaluate the opportunity or whether we want to deploy more capital there. But I think right now, we built about 100 sites in the Philippines last year, great day 1 yields. And it's the same with Bangladesh, I think we built probably 60. So I think right now, it's very much, Nick, kind of an exploratory phase. I think all the kind of the characteristics of the market are kind of interesting from a growth perspective over the long term. But just like with any emerging market, trying to go about it in a thoughtful manner. And one thing we've typically found is kind of thinking about it more from a BTS perspective driving those compelling day 1 returns, but see what you can learn about a market and what are kind of the longer-term growth opportunities, the carriers, the support of the government and kind of the makeup of the countries. And I think that's something we're kind of wanting to get our foot in the door and further evaluate a little bit. But I think it's just kind of a prudent approach to evaluating the opportunities within a market.

Okay. Okay. That's great. Well, listen, I think we're just about at time. So again, I want to thank you for a really informative discussion, Adam, especially kind of powering through when you're not feeling all that well.

Looks like the Michael Jordan flu game over here now.

Exactly, exactly. Well, thanks, again, Adam, and we'll talk again soon.

Yes. No, I appreciate it, Nick. Thanks a lot. Take care.

Okay. Take care.