American Tower Corp

NYSE:AMT

Earnings Call Transcript 2022-Q2

[Operator]

Ladies and gentlemen, thank you for standing by. Welcome to the American Tower Second Quarter 2022 Earnings Conference Call. As a reminder, today's conference call is being recorded. Following the prepared remarks, we will open the call for questions. [Operator Instructions]

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

[Adam Smith, VP of IR]

Good morning. Thank you for joining American Tower's second quarter 2022 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.

On this morning's call, Tom Bartlett, our President and CEO, will provide an update on our international business. And then Rod Smith, our Executive Vice President, CFO and Treasurer, will discuss our Q2 2022 results and revised full year outlook. After these comments, we will open up the call for your questions.

Before we begin, I'll remind you that our comments contain forward-looking statements that involve a number of risks and uncertainties. Examples of these statements include our expectations regarding future growth, including our 2022 outlook, capital allocation and future operating performance; our expectations regarding the financing plan for the CoreSite acquisition; including the closing of our Stonepeak minority investment in our U.S. data center business, our expectations regarding the impact of COVID-19 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 Form 10-K for the year ended December 31, 2021; and in other filings we make 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 Tom.

[Tom Bartlett, President and CEO]

Thanks Adam. And good morning everyone. In line with our historical practice for our second quarter earnings call, my comments today will be focused on American Towers international business, before diving into the trends that we see driving a long runway of growth in our international segment, I'd like to take a moment to review the principles that have underpinned our international expansion strategy over the last two decades.

Since we first started expanding outside of the United States, entering Mexico and Brazil in 1999, and 2000, respectively, we've been guided by the belief that the secular demand trends and fundamentals of the tower business model that would drive tremendous value in the U.S. over a multi decade period would be replicated internationally. Central to this thesis was that the anticipated proliferation of wireless networks and resulting rapid growth and mobile data demand would necessitate neutral host shared wireless infrastructure across the globe.

We also believe that by leveraging our core capabilities developed here in the United States, we could position American Tower as a premier global provider of communications, real estate, and a prime beneficiary of these trends. Further given the relative lack of fixed line infrastructure, accelerating population growth, and earlier stages of network technology evolution in many parts of the world, we believe we could both augment and extend our overall consolidated growth trajectory.

So we set out to construct a geographically diverse platform of communication assets in the world's largest democratic economies, while establishing relationships with the leading global wireless carriers, achieved primarily through the acquisition of high quality portfolios with compelling underlying organic growth and risk adjusted return profiles. We then sought to leverage our scale, customer relationships and capabilities to execute on high return new build opportunities, and innovative solutions like power as a service that have strengthened our competitive positioning, and supported our customers in meeting their network needs, all while driving, increasing shareholder value.

As a result of these efforts today, our global platform includes an international portfolio that fits in over 170,000 sites and contributes approximately 45% of our property revenues and approximately 36% of our property segment operating profit. Focusing in our international new build program for a moment, we've constructed approximately 40,000 sites since launching our international operations over two decades ago, just over 22,000 of those sites being built since the start of 2018 alone. We credit this recent acceleration to our enhanced market positioning ahead of major network deployments, demonstrated operational capabilities and strong cross national MNO partnerships, all afforded to previous strategic M&A expansion initiatives.

In total, these 40,000 American Tower build sites are driving an attractive NOI yield of 25% owing to the strong demand we've seen for our infrastructure, and the operating leverage inherent to the shared tower model across the globe. As sites looking forward we’ll continue driving toward our ambition to add another 40,000 sites to 50,000 sites to our international portfolio over the next several years.

With that, let's take a few minutes to discuss each of our international regions and the key trends developing across our footprint. First, I'll touch on Europe; we have a portfolio of over 30,000 sites, and strong scaled positions in Germany and Spain, which are benefiting from many of the same trends driving strong growth in the United States, including the early stage of 5G rollouts, and a new entrant.

As many of you know, we've taken a consistently measured approach to achieving scale on the continent. We started through a modest acquisition in Germany in 2012. We then spent the better part of the following decade evaluating various opportunities, who are disciplined approach to capital allocation, which led to our entry into France in 2017, and later a small scale entry to Poland. However, it wasn't until the Telxius transaction in 2021, that we found an opportunity to add significant scale to a portfolio that met the standards of our global underwriting framework. These characteristics include high quality, strategically located assets that stand to benefit from continued network investments and attractive contractual terms and conditions, such as CPI based escalators, which act as a natural hedge against local inflation, along with a low churn profile, which taken together drive compelling risk adjusted returns for American Tower and our shareholders.

From a timing perspective, we couldn't be happier with our acquisition of the Telxius tower portfolio, across Germany and Spain, we've seen several quarters of accelerating activity as carriers begin lighting up low and mid band spectrum with new 5G equipment, while continuing to invest to support growth data consumption on their existing 4G networks. At the same time, in Germany, new entrant 1&1 is rolling out a Greenfield 5G network and we believe our portfolio of nearly 15,000 sites, primarily located in urban centers across the country is in a strong position to support their network bill.

Earlier this year, we signed a framework agreement with 1&1 through which we can provide value to the carrier while benefiting from incremental growth associated with the relationship for many years to come. As a result of these factors, we're seeing strong leasing activity on our assets, as well as demand for new builds, particularly in white and gray spot areas where carriers are working to meet coverage requirements and provide critical connectivity in areas that hadn't historically been underserved.

In 2022, we plan to double our previous record and build approximately 400 sites across Europe. And we expect this trend of elevated new build activities continue. Thanks to the demand driven by such initiatives, the pipeline secure through the Telxius transaction in our position as a leading independent power operator on the continent, with a global reputation for operational excellence.

With that let's turn to our regions that are in relatively earlier stages of network technology, and where we see an opportunity to capitalize on a strong persistent demand environment for an extended period. There's probably no region where the benefits of local scale and the operational expertise gained is a premier independent operator are more pronounced than an Africa, where we're seeing these benefits play out across essentially every facet of the business.

In recent years, we've seen the proliferation of affordable smart devices and consumer uptake of mobile application use cases drive outsize growth in mobile data usage. And our multinational carrier customers across the region have been working to rollout and enhance their 4G networks in response.

For ATC Africa, this has resulted in average organic kind of billings growth in the high single digit range over the last several years, coupled with five consecutive years of record new build activity. This trend has continued unabated into 2022. And as a result, we've built over 1000 sites across Africa in the first half alone, up over 30%, compared to the first half of 2021, and nearly double the volumes achieved in the same period in 2020. These sites continue to demonstrate very attractive average day one NOI yields with our year-to-date builds producing more than 13%. And we expect to continue to execute on opportunities to add critical scale and earn strong returns in key markets throughout the region over the next several years.

While the trends supporting a strong growth environment in the region are expected to persist, there are operational challenges to create unique opportunities in the African market, particularly in the context of a global supply chain disruptions, power grid availability and reliability and on-going macro volatility. It's here that the scale of our African business shared learnings of a global organization and an entrenched culture of innovation have resulted in a resilient, differentiated business across the region.

For example, we've been able to leverage global supply chain learnings from the peak of the pandemic, as well as the resources afforded by our investment grade balance sheet and strong international cash flows to produce materials for a new build program several quarters in advance. Not only does this result in cost savings in an inflationary environment, but also derisk operational challenges in a core sector of high yield growth for American Tower, while bolstering our reputation as a preferred partner, who is capable of delivering new sites when we say we're going to. This forward thinking approach to the procurement of critical resources is also been applied to an area of our Africa business that we are perhaps most proud of our power program, where we've accelerated our innovative efforts across the region in recent years.

Today, we've deployed roughly $300 million in the region to equip nearly 16,000 sites with the capability to source power from renewables, and more energy efficient resources, including lithium ion batteries, and solar arrays, and in our new build program, where we're working toward making the majority of our newly constructed towers operationally zero, or near zero greenhouse gas emission sites.

In fact, as of the end of the second quarter, we've installed lithium ion batteries and solar panels at nearly 70% in over 40% of our sites in the region respectively, which has driven a reduction in our reliance on fossil fuel power generators, accommodated our potential to increasingly rely on intermittent renewable sources, and supported our progress toward meeting our GHG emission reduction targets.

More recently, we've been able to leverage our position in the region to form a strategic partnership with a vendor in our energy supply chain. This alliance brings product assembly to the region, as we look to augment our delivery of environmentally and economically sustainable power solutions that are sites where power availability and access to efficient and reliable sources can often be a challenge.

Additionally, this local partnership will facilitate the acceleration of our progress toward meeting our emission targets, reducing our supply chain risks, lowering the overall carbon footprint and cost of our procurement process and supporting the local economy and the communities we serve, which we are particularly proud of.

Let's turn to Latin America, which was our first region of international expansion, and where we've seen upper single digit average organic tenant billings growth over the last several years. On a consolidated basis our nearly 49,000 sites earning a double digit NOI yield in our earlier vintage in the region, which consists of assets built or acquired prior to 2010 were seeing a U.S. dollar yield of over 40%.

Today, M&O's in the region are in advanced stages of 4G, and in the early innings of 5G network deployments to driving a significant need for additional cell sites. As a result, we continue to see solid activity on our existing sites, as well as growth through new infrastructure to improve both coverage and capacity. Although we expect to see the on-going effects of industry restructuring impact net organic growth in the midterm, we believe the portfolio we've developed across the continent over the last two decades will be critical for our customers as they continue to invest in their networks.

Looking at Brazil, specifically our largest market in the region in terms of site count revenue, we're seeing the final stages of a consolidation process that has resulted in a Transfer Network assets in the hands of large multinational operators, with the capabilities and financial firepower to build out enhanced next generation networks on a nationwide basis.

Further with 5G auction now complete, our local scale positions American Tower as a strategic partner to our customers as they transform their networks, while allowing us to maximize the opportunities provided by consolidation, and increased carrier investment obligations. Although we're at the very early stages of a network upgrade investment cycle, we're already seeing incremental demand for infrastructure capturing a large share of the initial urban amendment cycle. We expect this amendment cycle to be followed by a period of new site deployments, aimed at improving capacity and performance, similar to the cadence we anticipate in the U.S. over the course of the next decade, which would translate to solid growth for American Tower in the region over a multiyear period.

Finally, let's turn to Asia Pacific. Our portfolio in the region predominantly consists of our scaled footprint across India, as well as our more recently established presence in the Philippines and Bangladesh, where we've leveraged our management site deployment expertise to prudently evaluate opportunities in the region to high yield build programs, resulting in over 400 sites being constructed across the two markets combined year-to-date.

In India, we continue to be encouraged by the improvements in market structure, carrier health, and government reforms aimed at easing the near term financial burden of operators and ensuring a multiplayer competitive ecosystem, all of which is driving incrementally constructive trends across the communications infrastructure landscape. And with the carrier consolidation cycle, and associated elevated churn largely complete, a full year outlook includes an expectation for positive organic tenant billings growth in the region for the first time in several years. While challenges certainly remain in the market, and we could see some variability in growth from period to period, our optimism around the longer term opportunity presented in India remains. With an attractive backdrop of a growing population of over 1.4 billion people it's driving accelerated mobile data usage and a government is demonstrating a commitment to a digital transformation of the economy, we see a need for thousands of new cell sites to serve 4G, and eventually future 5G networks. We expect these catalysts to drive a period of sustained attractive, gross growth, as well as a continued acceleration of our new build program, where we're seeing low to mid double digit day one NOI yields on average, and taken together with a moderating churn environment, we remain optimistic that India and the Asia Pacific region can be a solid contributor toward achieving our longer term growth targets on a consolidated basis.

In summary, we're encouraged by the trends we're seeing across our international footprint, with an acceleration in mobile data consumption, driving sustained customer investments on current and next generation networks globally. Over the past two decades, we followed a consistent and disciplined approach to market and asset selection demonstrated a consistent track record of operational excellence, and developed the scale presence and strong customer partnerships across a geographically diverse and globally distributed footprint, which we believe places this at a distinct competitive advantage in a 5G world and beyond.

While we'll continue to evaluate opportunities to further enhance our scale to the same discipline lens, we remained focused on leveraging our position and capabilities to drive incremental value across our served markets. We believe our well balanced international platform, combined with our highly complementary foundational U.S. business, provides American Tower with an unmatched global portfolio that's optimally positioned to benefit from multiple network technology evolutions, and digital transformation opportunities for many years to come.

With that, I'll turn it over to Rod to take you through our latest quarterly results, and updated outlook. Rod?

[Rod Smith, EVP & CFO]

Thanks, Tom. Good morning and thank you to everyone for joining today's call. As you saw in today's press release, we delivered another quarter of strong performance across our global business. Before walking through the details of our Q2 results and revised outlook, I'll touch on a few highlights from the quarter along with the financing initiatives we've executed over the last several months.

First, we've announced and partially closed our plans to raise approximately $4.8 billion in equity financing in support of our core site acquisition, beginning with our common equity issuance in early June, and later, through our announced agreement was Stonepeak in our U.S. data center business. With these two transactions, not only have we addressed our equity financing requirements for CoreSite, but we've accomplished it in a manner that maximizes shareholder value and supports our investment grade credit ratings further through our partnership with Stonepeak, who brings tremendous expertise and communications infrastructure, and if they like minded long term investment philosophy, we've created a platform to further evaluate and finance growth opportunities across our U.S. datacenter business as the 5G ecosystem further develops.

Moreover, we believe Stonepeak’s investment represents a full valuation relative to what we have invested in our U.S. data center portfolio today, and allows American Tower to retain operational control, as well as the flexibility to execute on our mobile edge strategy. I'll discuss this transaction in more detail later.

Second, we also continue to strengthen our balance sheet by leveraging the debt capital markets, raising $1.3 billion in senior unsecured notes at attractive terms. As a result of our Q2 financing activities in pro forma for our private capital proceeds, which we expect to use to pay down short term floating rate debt, we will increase our percentage of fixed debt to nearly 80%, up from 66% as of the end of Q1, and bring pro forma net leverage down to approximately 5.5 times. With our CoreSite financing now largely complete, we remain committed to organically delivering back below five times over the next couple of years.

Third, we see strong secular trends driving increased network coverage and densification initiatives among our customers, continuing to translate into solid gross new business globally, including the need for more cell sites internationally as Tom just highlighted. Evidenced by the success of our new builds program, we constructed over 1500 sites in Q2, representing the 12 quarter of over 1000 new builds since the start of 2019, a demonstration of the success of our capabilities and expertise, scaled to market positions, and strong customer relationships.

Additionally, demand remains robust for our differentiated interconnection rich U.S. data center campuses, as customers leverage the dynamically scalable solutions and interoperability provided by CoreSite’s national ecosystem, leading to another strong quarter of new and expansion leasing.

And finally, our first half performance and confidence in our full year outlook and long term targets amid heightened market volatility, rising inflation and operational challenges is a testament to the resiliency of our business and the stability of the earnings we consistently generate. This is made possible through operational excellence and service dependability, our investment grade balance sheet, the strength of our underlying contracts, including international revenue supported by CPI linked escalators, the ability to pass through a substantial portion of our direct costs across our international regions, and the matching of escalator terms in the U.S. between customer and land leases, and more importantly, the mobile data trends driving unabated demand for our communications assets.

With that, please turn to slide six and I'll review our Q2 property revenue and organic tenant billings growth. As you can see, our Q2 consolidated property revenue of $2.6 billion grew by over 17% and nearly 19% on an FX neutral basis over the prior year period. In the U.S. and Canada, property revenue was roughly flat due to the continued effects of Sprint churn, while international growth stood at roughly 19% or nearly 23%, excluding the impacts of currency fluctuations, and includes about 12% contributed by the Telxius assets.

In addition, our U.S. data center business contributed nearly $190 million of growth in the quarter. These growth rates are indicative of the strong secular demand drivers that underpin growth on our communications infrastructure assets across the globe as 4G and 5G deployments continue.

Moving to the right side of the slide, you can see we achieved consolidated organic tenant billings growth of 2.6% for the quarter. In the U.S. and Canada, as expected, organic growth was slightly negative at 0.4% including a sequential step down and gross organic new business on $1 basis associated with the timing of certain MLA use V commencements in 2021 which we guided to during our Q1 call, we continue to expect a reacceleration and gross new business in the back half of the year. Escalators were 2.8%, which as we also highlighted last quarter, were impacted by certain timing mechanics within our MLAs though for the full year, we expect escalators to come in right around 3%, consistent with historical trends. This growth was offset by the impacts of Sprint churn, which continues to drive over 4% of negative headwind year-over-year.

On the international side, organic growth was 7.8%. Starting with Europe we saw growth of 11.2%, which remains elevated given contributions from the Telxius portfolio, which were only partially included in our Q2 2021 base. Absent Telxius our legacy European business grew roughly 6% and expansion of approximately 160 basis points as compared to our Q2 2021 growth rates.

In Africa, we generated organic tenant billings growth of 9%, which includes 8% in gross organic new business contributions, our highest quarter on record the continued strength and new leasing activity in the region was complemented by the construction of just over 400 sites in the quarter. As we see 4G coverage and densification initiatives continue to drive strong top line growth in returns across the region.

Moving to Latin America, organic growth was 8.3%, which includes approximately 8.7% from escalations. Consistent gross organic leasing growth was offset by expected elevated churn primarily associated with certain decommissioning agreements, as highlighted on previous earnings calls. For both Africa and Latin America as we look to the second half of the year, we expect a step down relative to the first half in net organic growth rates due to anticipated consolidation driven churn, which remains consistent with our prior outlook assumptions.

In APAC, we saw organic growth of 3.9% in line with our expectations and representing our fourth consecutive quarter of positive growth, which comes alongside a continuation of solid new build activity with nearly 1000 sites constructed during the quarter. It's important to note that although we remain encouraged by the positive trends we're seeing in our APAC growth rates, we do anticipate a modest sequential step down in Q3 to the low single digit range before recovery in Q4 to near that upper end of our 2% to 3% full year guide, which remains unchanged.

Turning to slide seven, our second quarter adjusted EBITDA grew just over 13% or over 14% on an FX neutral basis to approximately $1.7 billion. Adjusted EBITDA margin was 62.5%, down 170 basis points over the prior year, driven by the lower margin profile of newly acquired assets, the conversion impacts of commenced sprint churn along with higher pasture revenue, resulting from rising fuel costs.

Moving to the right side of the slide, attributable AFFO and attributable AFFO per share grew by 7% and 5%, respectively. Growth was meaningfully impacted by sprint churn and the timing of cash taxes, which together provided a negative headwind of nearly 7%.

Let's now turn to our revised full year outlook where I'll start by reviewing a few of the key high level drivers. First, our core operating performance remains strong across our business, allowing us to raise our AFFO per share guidance for the year and increase our expectations on an FX neutral basis for property revenue and adjusted EBITDA.

Second, we have revised our FX assumptions using our standard methodology, which has resulted in Outlook to Outlook headwinds of approximately 100 million, nearly 50 million, 40 million and roughly $0.08 for property revenue, adjusted EBITDA, consolidated AFFO, and AFFO per share, respectively.

Finally, we have updated our CoreSite financing assumptions to reflect our completed common equity issuance, and our anticipated close of private capital funding. This update has resulted in a reduction in our total equity requirement balanced with the incremental debt and associated interest costs.

Additionally, we have contemplated the minority interest impacts related to the Stonepeak partnership and updated closing assumptions, all of which I will address in more detail in a moment. With that, let's discuss the details of our revised full year expectations.

As you can see on slide eight, we are continuing to project consolidated year-over-year property revenue growth of nearly 14% at the midpoint. The $15 million decrease relative to prior guidance is driven by the FX headwinds I previously mentioned, which were partially offset by over $40 million in core property revenue outperformance taking the benefits of CPI in our international escalators and accelerated decommissioning related settlements, together with upside in our U.S. and Canada in data center segments and over $40 million and other outperformance primarily driven by higher international passer revenue due to elevated fuel costs.

Moving to slide nine, you will see our organic tenant billings growth projections, which have been slightly revised since our last earnings call. While our expectations remain consistent in the U.S. and Canada, international, and on a consolidated basis, we have made some adjustments within our specific international segments.

In Europe, we have adjusted our growth back to approximately 9% reflecting our expectations for temporary shift and new business commencement timing, from the back half of 2022 into 2023. Demand remains very solid in the region, setting us up well as we exit 2022. You will also see that we have modestly raised the guidance for Latin America to approximately 7% in Africa to approximately 6.5% both up from previous expectations of greater than 6% reflecting a continuation of escalation benefits from CPI.

Moving to slide 10, we are lowering our adjusted EBITDA outlook by $20 million as compared to our prior outlook, driven again by negative FX impacts, with expected growth of approximately 10% year-over-year. While we are seeing a strong conversion of core property revenue upside to cash margin outperformance we have taken a revised view on SG&A, notably on bad debt reversal expectations for the year. Although collection trends were solid in Q2, we have pushed out some of our assumptions related to the incremental collections associated with previously reserve balances that we continue to expect to collect in time.

Turning to slide 11, we are raising our attributable AFFO per share guidance to $9.74 from $9.72, despite absorbing the negative effects from FX and a continued rise in interest rates. To better understand the components in our revised outlook bridge, I'd like to spend a moment to walk through the moving pieces of the guidance associated with our updated Equity Plan and the mechanics of our Stonepeak partnership, which consists of 1.75 billion in common equity, and 750 million in mandatory convertible preferred equity for a total ownership interest of 29% on a fully convertible basis in our U.S. datacenter business.

First, as I mentioned, we were able to reduce our total equity requirement from approximately $5.5 billion to $4.8 billion, including $2.3 billion of common equity proceeds, which meaningfully reduced our share issuance to approximately 9.2 million shares. The reduction in equity resulted in an increase to our debt balances, which together with the revised timing of the equity raise, along with the elevated interest rates has driven an increase to our interest expense outlook, which largely makes up the over $50 million other reduction to AFFO as compared to our prior outlook.

Next, regarding our Stonepeak partnership, the financial impacts for their minority investment will appear in two places. First, a coupon of $750 million of mandatorily convertible preferred equity with a cost in the mid-single digit percent range will be recognized as a deduction to the AFFO generated by our data center segment and reflected in our consolidated AFFO, which represents approximately $14 million in our 2022 guide, as shown on the slide.

Second, until conversion of their preferred equity, which is expected to occur four years from the date of closing, Stonepeaks initial common equity stake in our data center business will stand at 23% which contemplates approximately $2 billion of net debt on the U.S. data center business and will be considered as a minority interest deduction for attributable AFFO purposes, equating to approximately $20 million in our 2022 outlook.

Please note, we have also reduced the European minority interest assumption from $160 million previously to $150 million largely due to FX. Together, we are now guiding to a minority interest adjustment of $170 million in 2022.

Finally, as I mentioned earlier, our updated outlook also takes consideration updated equity closing assumptions. We previously assumed they made closing for our common equity issuance, which actually occurred in early June. We also assumed our private capital will close in mid Q3 with plan proceeds to be used to pay down short term floating rate debt. Taken all together, our revised CoreSite financing plan drove approximately $0.06 of incremental accretion relative to our prior attributable AFFO per share outlook, which includes a negative hit of roughly $0.03 driven by higher interest rates on our debt financing relative to our previous assumptions.

Moving to slide 12, let's look at our capitol deployment expectations for 2022, which are updated compared to our prior outlook, while continuing to reflect our focus on driving strong, sustainable AFFO per share growth. First, we now expect to dedicate approximately $2.7 billion subject to board approval towards our 2022 dividends. This is down slightly from our previous guidance of $2.8 billion, which is simply a function of our reduced common equity issuance and continues to represent approximately 12.5% in year-over-year growth on a per share basis.

In regards to CapEx, we are decreasing our outlook midpoint by $60 million in total, with development CapEx increasing $15 million and with redevelopment capital and land acquisition spend decreasing $25 million and $50 million respectively. Our development plan continues to assume the construction of approximately 6500 new sites globally at attractive returns.

In fact, on the nearly 3000 sites constructed in the first half of 2022, we saw a day one NOI yield of roughly 14%. Lastly, we continue to expect to direct roughly $300 million towards our U.S. data center business largely associated with development spend.

Now turning to slide 13. In with our CoreSite financing plan largely complete, I will briefly touch on the strength of our investment grade balance sheet, which is fundamental to the execution of our stand and deliver strategy. Our long standing financial policies, including establishing optimal levels of leverage and an appropriate mix of debt instruments guide the management of our capital structure, which together with our strong business fundamentals provide American Tower with continued access to capital markets at attractive terms.

As you recall, the American Tower proactively access the debt capital markets in 2021, taking advantage of historically low pricing, raising roughly $3 billion in senior unsecured notes in the second half of the year, at a blended cost of approximately 1.6%. With our fixed debt percentage at the time rising to over 85%, this effectively allowed us to lock in low rate debt for future strategic initiatives including the CoreSite acquisition, which in turn reduce our dependency on the debt markets in 2022 as part of our final financing plan. We believe the strategic and efficient management of our balance sheet puts us in a strong position as we close out 2022 and look beyond. As of the end of the second quarter in pro forma for the close of the Stonepeak investment in our U.S. data center business our average cost of debt stands at about 2.6% with an average remaining tenor of over six years.

Since 2010, we have reduced our average cost of debt by approximately 250 basis points and increased our average debt tenure [ph] by about one year by accessing the long part of the yield curve proactively refinancing our debt and capitalizing on low rate environments.

In addition, and more recently, we also focused on diversifying and expanding our capital sources and structure by issuing Euro denominated debt, establishing our ATM program and efficiently executing on public equity raises and partnership agreements with leading global private investors. With a strong liquidity position of approximately $6.7 billion on a pro forma basis, inclusive of Stonepeak proceeds and other financing activities subsequent to the quarter end in a staggered maturity profile we feel well positioned moving forward as we focus on organically deleveraging back to within our normal net leverage range over the next couple of years.

Taken all together, we see the strength of our financial position as a competitive advantage for American Tower, whether executing on our growth strategy navigating economic downturns or volatility in the financial markets. And we remain focused on and committed to our thoughtfully established financial policies that have guided our financial strategy for the past decade.

Finally, on slide 14, and in summary, Q2 was another solid quarter supported by leasing demand across our global portfolio of communication assets, strong execution of capital markets initiatives, including financing for the CoreSite acquisition and meaningful high yielding new asset development activity. Our high quality set of assets and established market positions continue to benefit from secular demand trends driving 4G and 5G initiatives across our global footprint, while the strength of our balance sheet and cash flows, has us well positioned to manage and grow the business through potential market volatility and uncertainty.

As we look to the back half of the year, we are excited about our growth trajectory and remain focused on executing on our strategic initiatives, which support our long term double digit AFFO growth aspirations.

With that, I'll turn the call back over to the operator for Q&A.

[Operator]

Thank you.[Operator Instructions] One moment here. We're going to Michael Rollins with Citi. Please go ahead.

[Michael Rollins, Citi]

Thanks and good morning. Two topics, if I could, first on the U.S. curious if you can give a further update on the U.S. leasing environment, and specifically provide an update on how American Tower is tracking against the previously provided growth target of at least 5% organic growth beginning next year. And then also sorry, just one other part of this is just are you seeing any change in the environment with AT&T announcing the acceleration of C band deployment? And then I'll come back to be on in just a second topic on India if I could.

[Tom Bartlett, President and CEO]

Okay, Michael, I can start and Rod can join. We're right on track with our previously planned growth rates going forward. We would expect kind of an acceleration in the back half of 2022, and then even a further acceleration into 2023. So we have so much visibility with regards to our MLAs I think we're in a really good position to be able to track what that growth looks like. But everything is right on track, as we've laid out. And with regards to AT&T, nothing outside of the ordinary. I mean, all the carriers are building at a great pace. And as I said, very consistent with how we've seen the market and how we see it developing over the next several years.

[Rod Smith, EVP & CFO]

Yes. And Tom, maybe I'll just add in there. In terms of further discussing the on-track comment, we guided to approximately 2% of growth both on average for 2021 and 2022. And as you can see in numbers, Michael, right on track with that 2.2% last year in the U.S.

So a little at 1% this year. That puts us right on the back of that 2%. I will remind you that there is a pretty significant headwind from the Sprint churn that is affecting the growth rate. And that does equal about 4% headwind going into this year. So that 1% would have been a lot closer to 5% if it hadn't been for [Technical Difficulty]. And then, the further guidance from 2023 out to 2027 is the -- is around 5% on a reported basis with about 2% adjusted for the Sprint churn kind of coming out of that. And we're well on track for that. We've got about two-thirds of that revenue growth already committed within the framework of our holistic agreement.

And we're also seeing that in the co-location and amendment contributions from new biz in the U.S., so we are on track with that metric for this year. That is growth over last year. We do expect Q3 and Q4 to be at higher levels than what we had in Q1. So that's the acceleration we're seeing through this year, and we expect the levels as compared next year based on the way that our holistic deals are struck, the addition of DISH, as well as the acceleration of spend from the carrier.

[Michael Rollins, Citi]

Thanks. And just one question on India. I was just cruising over the supplement on and on page 12 the historical power counts. It shows in the APAC region, presumably India that the -- that there's been this negative adjustment in sales or just shutdowns of towers that's been running at an annualized rate of 3% to 5%. And just curious, when this optimization could substantially slow down or conclude and if that then releases a headwind on the growth of this segment.

[Tom Bartlett, President and CEO]

Just quick on the – sorry Mike I had a little computer difficulty here that I just had to, to address. Yes. So when it comes to the, to the India information, it really is associated with the consolidation that we've seen in the Indian market with the turn that we've had over the last several years, as you're well aware of with that, when we have single tenant towers where we don't see additional lease possibilities in the near term, we did end up taking those down to kind of rationalize the operating expense aspect of kind of what we're what we're doing in India. So as you see churn in India continue to moderate which we've seen to a great extent, over the last couple of years, you'll see commission activity in the tower reduction slowdown as well. And there is usually a little lag between when you see the churn come through our revenue numbers. And then when you see the tower, some towers actually come out of the tower counts.

[Michael Rollins, Citi]

Thanks very much.

[Operator]

And next we’ll go to Simon Flannery with Morgan Stanley. Please go ahead.

[Simon Flannery, Morgan Stanley]

Great. Thank you very much. Good morning. I was wondering if you could talk a little bit about the data center portfolio. I think you referenced in the slides, outperformance there, it looked like the sequential numbers were good. What are you seeing in terms of bookings, trends, backlog, things like bad industry pricing. And then I think on the European guidance, you talked about pushing some activity from late 2022 into 2023. I think one of the other tower companies in Europe had mentioned something similar, can you just expand on that a little bit and what gives you confidence that it's just a matter of months and other things, given the kind of recession concerns and the impact power prices might be having there? Thanks.

[Tom Bartlett, President and CEO]

Hey Simon, maybe I'll take on the data center side. And we had another really strong quarter with all of our data center business. We've largely completed the integration of our legacy centered into intercourse, right. Strong sales, strong backlog, really positive cash MDM, churn is right on contract. So we're really pleased they're outpacing as Rod mentioned, we've actually upgraded our, our guidance relative to the activity that we've seen within CoreSite. So really strong top line growth, new and expanded sales activity, all very, very good mix with new logos with a network, new business, as well as with hyperscale. So really balanced, strong growth and interconnection, as well, which I think is just critical to this the competitive advantage that we are seeing in the business and fully expected. So couldn't be more pleased with, with what the business has been able to generate out of the gate.

[Rod Smith, EVP & CFO]

Yes, Simon. And I would just add to that, that's competence to undertake a couple of development projects on the data center side. So we have a few of them, two of them going on, that's driving slightly elevated CapEx investments in the data center business. So I think you've seen our numbers, we've got, upwards to 300 million, 320 million of CapEx, which is a little heavier than what we would normally expect to see. But we do have a couple of facilities where the demand goes strong, we've undertaken some additional development opportunities within the campus that that we operate.

And then to, to address your question on Europe, we are seeing a little bit of a moderation in terms of the growth in Europe, our previous guidance was to have organic tenant billing growth for the full year to be greater than nine. And we've taken that back a touch to approximately 9%. And that's primarily driven because we do you see some leasing activity that we expected in the second half of 2022, to be pushed into 2023. So we do see a very strong market in Europe, particularly in Germany, with the addition of one on one coming in and the 5G, the initial deployment of 5G networks. And the way that the organic tenant billings Brookfield exit this year is going to be you know approaching 7% sort of SP exit run rate, which is I think is a really strong number for us. We couldn't be more happy with the timing of what we're seeing in Europe and the demand for our assets.

Through the Telxius portfolio, we've picked up a lot of really urban centric assets, including a lot of roof tops, and we're finding that very desirable in terms of carrier activity going forward. And that's what's really driving the growth rates there. So it's really just the timing in Europe with the growth rates are really great.

[Simon Flannery, Morgan Stanley]

Great. And on the data center Tom, any updated thoughts on the edge opportunity now that you've owned it for six plus months?

[Tom Bartlett, President and CEO]

Yes, it's I mean, it's yes, there is. I mean, we've actually created internally an Edge Advisory Board, we're setting up an Edge Lab, we've scanned our sites, and we've done the really the full evaluation of, of our sites that can support a megawatt and two megawatts of activity. We're looking by the end of the year to actually establish and start to build out a few of these megawatt facilities. And we're in discussions, with all the potential participants looking to take advantage of the opportunity. So, it's still early days, as you recall that the reason for this particular transaction was the underlying business itself, diversification of our existing business into the broader digital infrastructure, industry, and then the potential for being a major player in terms of developing what that edge would look like. And so we'll have more about this on our third quarter call. We talk more about technology, Simon.

[Simon Flannery, Morgan Stanley]

Thank you.

[Operator]

And next, we go to the line of Eric Luebchow with Wells Fargo. Please go ahead.

[Eric Luebchow, Wells Fargo]

Great, thanks for taking the question. First, I wanted to touch on the -- you mentioned some of the churn in Latin America. And maybe you could just expand on that, whether that specific to the oil restructuring in Brazil, kind of how you expect that to flow versus some of the churn you've had in Mexico and how you see that trending into next year.

And then, Rod curious on the bad debt reserve, you mentioned any color you can provide in terms of regions that you're closely monitoring in terms of collections or payments activity that would be helpful. Thank you.

[Rod Smith, EVP & CFO]

Yes. Good morning, Eric. Thanks for joining. So the term that we're seeing Latin America is primarily just telephonic in Mexico is next thing in, in the Brazil market, we have begun to experience the oil churn. So oil has consolidated with [Technical difficulty] the contract that we have with oil actually has six years remaining on average across those, they're on about 7500 bytes or so, and already makes up about 1% of our growth. We've got quite a long time here to kind of work through the term, the oil, the oil restructuring that's happening there. So that's something that you'll see through the next several years, maybe longer than they were certainly with the countries who are picking up those assets, to talk about maybe restructuring those contracts, figuring out the term count. But we are in a pretty good position with oil, because we do have a silver stick over six years left on the contract there.

And then in terms of the bad debt, in terms of where we're seeing the bad activity in, really in India and a little bit in Africa, recently here is we've actually reduced our reserves by about $8 million or so in Q2. And we have a plan in the Outlook to further reduce that, for a total of about $20 million. So flexions in Q2 were really quite strong for us around the globe, but particularly in India, where we're happy to see that and based on all the discussions that we have had, indeed to have with our customers, we expect elections in India will remain with those expectations that are in our outlook, which would allow us to the full year to rebuild about $20 [Ph] million of fire bad debt reserves. We did reduce that, you'll see it in the presentation by about 10 million. And that's just based on the timing of reversing some of those reserves that we have moderated. But it's still good news for the year.

[Eric Luebchow, Wells Fargo]

Great, thanks.

[Operator]

And we can go now to Ric Prentiss with Raymond James. Please go ahead.

[Ric Prentiss, Raymond James]

Thanks, good morning everyone.

[Tom Bartlett, President and CEO]

Morning, Ric.

[Ric Prentiss, Raymond James]

A couple of questions. First, obviously, I think it's important you guys are focusing on attributable AFFO. Help us understand what a full year impact of the new Stonepeak would be as far as demand out convert $14 million in the current year and the $20 million minority interest? And then I've got two others quick ones.

[Tom Bartlett, President and CEO]

Yes, sure, Ric. So the way that we've got the guidance that next year, or actually in Q4 of this year, the full year kind of utilized run rate of approximately $200 million. $50 million of that has really come -- in the data center business that we have. So that's kind of the exit run rate. The balance, roughly the $150 million, is what we have in Europe. So that's kind of what you can think of from the minority interest piece of our AFFO going into next year. $200 million. $150 million in Europe and about $50 million on the data center side.

And that's mandatory, you're going to see that through with deduct to our AFFO. The mandatory is about $750 million mid-single-digit interest rate. So you just calculate the math, and that's what you'll see in terms of the deducts from AFFO from that.

[Ric Prentiss, Raymond James]

Second one is, you guys obviously know I've really focused on removing amortization of prepaid rent from valuation and non-cash items. Interestingly, a number of smaller than crown, crown did put a table out there, talking about what they see, as far as the amortization of prepaid rent going forward, is that something you guys would consider and I’ve got one of the quickie ones?

[Tom Bartlett, President and CEO]

I don't know, Ric, if we would put out a table. But I can tell you this year for the full year, we're looking at about $110 million or so in amortized revenue kind of coming through our numbers. That's down a little bit from last year. Last year, we were about $140 million.

I think from a going forward run rate basis, if you think of that line item being around $25 million to $30 million on a quarterly basis. That's what we see. We think it will hold pretty consistent as we go forward. But you can think about our amortized revenue in line with the $25 million to $30 million per quarter, and it's going to be a $100 million this year.

[Ric Prentiss, Raymond James]

That makes sense, unless we lose, we're getting a lot of questions from investors on data center's. We talked about the growth capital opportunity, there that CoreSite. What do you think maintenance CapEx is in the data center business? And one I think unusual question we get that came up is what would cause data centers to become obsolete or individual data centers becoming obsolete?

[Rod Smith, EVP & CFO]

Yes, maybe I'll take the first one, Tom, and then you can handle the second one. So the maintenance CapEx is about 20 million this year, for us in our data center business. We could take the sense of round about 3%, maybe 4% of the data center revenue. We don't see that changing at all. So that's actually I think about the main FX of the business.

[Tom Bartlett, President and CEO]

And Ric relative to your second question. I mean, it all comes down to really barriers to entry. And if you think of the, the asset that we have with CoreSite, the barriers to entry are incredibly strong, with the interconnection capability with the cloud on ramps. And so, it's hard to think about a world in which, our customers are not going to be still looking at kind of this hybrid environment, to be able to connect with the cloud to be able to really use data centers as a sales channel for themselves as their interconnection within the business. So, we don't anticipate any of that kind of activity you said, but I must say that it's I think this particular asset that we have within CoreSite, and we're building out, really continues to build up those barriers to entry.

And, and that's going to be critical. It's much like the tower business. We build up a strong barrier to entry with the foods and pieces of real estate we have, that's our strategy to find those assets, that have those strong barriers that we can continue to develop.

[Ric Prentiss, Raymond James]

That makes sense. Thanks, guys. I love hearing barriers to entry.

[Tom Bartlett, President and CEO]

Thanks Ric.

[Operator]

Next we'll go to David Barton with Bank of America.

[David Barton, Bank of America]

Hey, guys, thanks so much for taking the questions. First, I guess maybe, Rod, you in your script, when you were talking about the partnership with Stonepeak mentioned something to the effect that you were creating a platform for data center investment given Stonepeak’s experience in the common infrastructure space? I think one of the concerns some people have about American Towers foray into data center’s is that it's going to be a big call on Capitol at the margin, and we just don't know how big it's going to be. So if you could kind of clear up a little bit about how you think this platform, might be looking at acquisitions and investments and calls on capital.

And then second, maybe, Tom, I don't know if you have a view on this. But with respect to American Tower, not having a holistic MLA with Verizon at this stage. Do you feel that that AMT contributing factor to AMPs kind of domestic same store sales growth performance this year might be that that Verizon is allocating business to its other tower partners in the early stages of its C-build and we need to wait for them to come around to become an A&T customer. Thanks.

[Tom Bartlett, President and CEO]

Hey David. Let me take that one and then I'll let Rod and then I'll come back and add on to that to that to the first one. Relative to how Verizon is building out their seat, man, it's really hard to tell, in terms of whether it's happening with other carriers who have more holistic type of an MLA versus ourselves I don't think so, candidly. I think that Verizon is being very, as they always are measured in terms of how they're rolling out C-band. And I would expect candidly over the next half of the year, and clearly into 2023, some real investments that they're going to be making it to the site.

We represent a significant piece of their portfolio, and strategically located in some critical markets, that I know Verizon is going to want to drop in C-band on the site they have to. And I would expect that to see in the second half. Relative to the timing in terms of us not having that it's really difficult to say whether there has been a timing difference in terms of when we're going to see that type of activity, as I said, I don't think so. But more importantly, I would expect to see significant activity really ramping up in the second half and into 2023, which is the more important element.

[Rod Smith, EVP & CFO]

Yes, and David, with regard to your question on the on the data center spend, this year we do have CapEx in the plan of about $300 million, maybe a touch over was a couple of development projects, that really will not be recurring in May. So we're looking at about $200 million of historical annual investment projects, and total CapEx including the maintenance CapEx. And that's where we expect to stay going forward, that would allow us to keep ahead of kind of a net absorption, forward looking two years, we need to make sure that each of our facilities has a scalable megawatt capacity. And in order to do that, we expect to reinvest about that $200 million, give or take, which is what CoreSite had been doing historically. Maybe ours will be a touch higher, maybe they were closer to 150, between 150 and 200, we'll probably be closer to 200, or maybe a touch, a touch over. So we're not looking to compete on a national scale and the data center business. We really bought CoreSite because of the cloud centric network, dense nature, the inner nature of these assets and kind of the geographical spread throughout the U.S. in really good proximity to our tower sites with his facilities. And in LA, and Silicon Valley, Chicago, Denver, Boston, New York, Northern Virginia, we have, we've got a nice spread of these assets. And because of the high quality nature, that's what's giving us the, the nice growth rates, as I mentioned earlier, up and up in the 10% range, which is well above our underwriting expectations of between 6% and 8%.

So we see really strong demand for these high quality. And we're looking to really take these assets, and potentially in the future, connect them to our sales, cloud on ramps and interconnection facility at the tower sites, that's the real significant upside. So with that said, we'll be reinvesting the CoreSite cash flow kind of back into keep ahead of that two years of absorption on the megawatt capacity. And then you may see us add a data center here or there throughout the West, but not a major change in capital allocation certainly.

[David Barton, Bank of America]

That's super helpful, guys. Thank you so much.

[Operator]

And we'll go to Matt Niknam with Deutsche Bank. Please go ahead.

[Matthew Niknam, Deutsche Bank]

Thanks for taking the questions. Just maybe to follow up on the prior one around expanding the platform, I guess, more broadly, beyond data centers just thinking about the broader common infrastructure portfolio, are you seeing incremental opportunities internationally, that may not have been as present a year ago.

And then secondly, as it relates to India 4% organic growth. This quarter, we noticed a pretty big step down in churn. I'm just wondering if there's any additional color you could share there. And whether that's maybe this quarter is maybe a better run rate to think about, from a churn perspective in India on a go-forward basis? Thanks.

[Tom Bartlett, President and CEO]

Hey Matt. I'll take the first one, Rod can take the second one. We're very focused on the U.S. as we said. Yes, there are a lot of opportunities outside of the United States. And, and as a result of the positioning that we have with CoreSite, we get approached by many, many different players to develop, but we're very focused on the U.S. And as Rod said, to the extent that there's outside CapEx, we're going to be incredibly measured about how we spend that, but it will be at the tower sites. Remember the Edge is all about the opportunity at the site itself. And we've identified, largely over 1000 sites that with power and interconnection could support upwards of at least a megawatt of capacity. And so we're going to be looking at that where we can take it to a megawatt where we can take it to two, where we can take it to three. And to the extent that we're able to develop the demand from a customer perspective, we will look at building, that kind of capacity out, but it'd be very measured. It will be based upon demand. And it will largely be in the United States.

[Rod Smith, EVP & CFO]

And Matt, good morning, thanks for joining the call. So regarding India, we are guiding to 2% to 3% Organic candidate billings growth. In India for the second quarter, we did see a higher number than that close to 4%, which was nice to see. That was driven by consistent sort of stable organic new business, we have the 2% escalator, of course. And then we did see a reduction in churn and Q2 from Q1 and certainly a further reduction from the prior year quarter.

So when we go forward, one thing that I will highlight is in Q3, we do see a higher level of churn happening in Q3 compared to Q2. So don't be surprised if you see that organic tenant billings getting pulled back a little bit from the 4% to probably below 2%, maybe approaching 1%.

That will be temporary and you'll see it come back up in Q4 up in the 3% range. So I think for now, we are constantly optimistic about India. There are still some churn events that we're working through, and we feel good about a 2% to 3% number for this year. And certainly, as we go forward, we hope to see and expect to see continued moderation on the churn line, solid new business activity that allow us to grow from that 2% to 3% organic billings growth. But of course, we'll address that in next February when we give guidance for 2023.

[Matthew Niknam, Deutsche Bank]

That's great. Thank you both.

[Operator]

And next we can go to Phil Cusick with JPMorgan. Please go ahead.

[Unidentified Analyst]

Hi, this is Richard [ph] for Phil. Just wanted to follow up on the international tower builds of the 40,000 to 50,000 over the next few years. Wanted to get a sense of how much of that is contracted versus you have a good line of sight into…

[Rod Smith, EVP & CFO]

Yes, I would say Richard we have a good line of sight into those. Certainly there are elements of that that are contracted, and the Telxius transaction that we did over in Europe, there are about 3000 sites that will build for Telefonica over time. There's also a building for Orange over time that are contracted. I don't want to put too firm numbers on there in terms of orange piece. When it comes to India, Africa and Latin America, it's more opportunistic. But we do have a really good run rate in terms of building sites. This year we'll build around 6500 towers, that's a little bit above where we were in the prior year. And we see that run rate is being sustainable going forward.

And as of course, we highlight this often, those builds are some of our most attractive capital deployment opportunities. And we're seeing double digit NOI yields day one from those, those newly constructed sites around the globe. So we have a high level of confidence in that $40,000 to $50,000 number, some of its contracted, some of its more opportunistic but the pipeline is robust.

[Unidentified Analyst]

Great. And the follow up on that the yields are high on day one, but what kind of colocation, I guess, expectations do you have on those builds over time? Can you give us any color around that?

[Rod Smith, EVP & CFO]

Yes, I think we would, we would view them to be very similar to the rest of our towers, in be comparable to the market that they're in. Certainly the towers we build, we like to see that they are, multiple entities, of course, and we know that the growth in mobile data consumption around the globe, continues to run at a at a really solid clip in that 30% range or even higher in some markets. So certainly getting additional tenants on those sites is something that's really important that we do have a line of sight to see that. And we see with these new builds, we do see in the north of 20% NOI yields on most of these, most of the assets.

Time will tell, but given the demand for tower sites, the critical nature of these power assets globally, and the fact that a lot of these emerging markets, as well as Europe are positioned to new technologies, either building out 4G networks, or in the case of Europe transitioning out of 5G is there's a need in the demand for more and more tasks. So that gives us the confidence that we will be able to attract additional tenants on these site.

[Unidentified Analyst]

And the last follow up for me on the data center side, just to clarify, there's no additional capital coming in from Stonepeak with either, the new builds, but there might be if there's an acquisition a small one or whatnot.

[Rod Smith, EVP & CFO]

Yes, I think that's right. The way and we announced a $2.5 billion investment which is gives them a minority stake that'll be when their preferred investment is fully burdened, there'll be a 29%, owner of the data center business. And certainly if there's any capital requirements needed to fund our data center business, there will be a capital call to all investors, us and veteran [Ph] on a pro rata share. And then certainly if there's M&A opportunities that require capital calls, of course, again, it'll be the same situation we'll be up and funding that, that together.

[Unidentified Analyst]

Okay, thank you.

[Operator]

And we have time for one last question. We've got to line up Batya Levi with UBS. Please go ahead.

[Batya Levi, UBS]

Great, thank you. In the U.S., can you provide a little bit more color on the activity you are seeing from DISH? And a question on capital allocation? You typically bring back sharp share buybacks after an issuance or ahead of like mandatory conversion. Going forward, can we expect it to balance maybe debt reduction versus opportunistic buybacks? Thank you.

[Tom Bartlett, President and CEO]

Sure, I'll do the first one. On DISH, they're right where we thought they would be. I mean, they've been very measured in terms of their deployment. They've been very active. Got a couple of critical markets that they are bringing up. And we have a comprehensive MLA with him, and we're seeing good activity across the country.

[Rod Smith, EVP & CFO]

Yes. And then, relative to the capital allocation question, you've heard us say it many times, but the first priority, of course, is funding our dividend. And not only funding it, growing the dividend. So this year, we'll have a double-digit 12.5% growth rate on the dividend.

And in the current environment that we're in, we certainly will be focused on delevering. It's no surprise to anyone on the call, I'm sure, that we are outside a little high of our target range of around 5%, below 5%. So we ended the quarter at about 5.8%. That's about 5.5% of the pro forma the investment from Stonepeak in.

So we still have some delevering work to do, which we will be focused on. So we will be focused on organic growth, where we focused on driving 10% AFFO per share growth. We'll be focused on delevering. We'll be focused on our capex plans around the globe, funding the build to suits that can see very good returns on across all the markets that we're currently in. And then, to the extent that there are opportunities to buy back shares at attractive prices from time to time or fund additional M&A from time to time that's accretive and fits within our disciplined approach, we'll balance those to investment opportunities and make the choice that's best for our shareholders and drives the most AFFO per share growth.

[Batya Levi, UBS]

Great, thank you.

[Operator]

And speaker’s I hand the call back to you.

[Adam Smith, VP of IR]

Thank you everyone for joining today's call. Please feel free to reach out to the investor relations team with any questions. Thank you everyone.

[Operator]

Thank you. And that does conclude the call for today. The replay will be made available after 10:30 this morning and running through August 11 at midnight. You can access the AT&T replay system at any time by dialing 1-866-207-1041 and entering the access code 5855174. International parties may dial 402-970-0847. Those numbers again 1-866-207-1041 with the access code 85855174. That does conclude the call for today. Thanks for your participation and for using AT&T teleconference. You may now disconnect.