American Tower Corp

NYSE:AMT

Earnings Call Transcript 2020-Q4

[Operator]

Ladies and gentlemen, thank you for standing by. Welcome to the American Tower Fourth Quarter and Full Year 2020 Earnings Conference Call. As a reminder, today's conference call is being recorded. [Operator instructions] I would not like to turn the call over to your host, Igor Khislavsky, Vice President of Investor Relations. Please, go ahead sir.

[Igor Khislavsky, Vice President of Investor Relations]

Good morning and thank you for joining American Tower's fourth quarter and full year 2020 earnings conference call. We've posted a presentation, which we will refer to throughout our prepared remarks, under the investor relations tab of our website, www.americantower.com.

Our agenda for this morning will be as follows. First, I'll quickly summarize our financial results for the quarter and full year 2020. Next, Tom Bartlett, our President, and CEO will provide strategic update on our long-term growth trajectory. And finally, Rod Smith, our Executive Vice President, CFO, and Treasurer, will discuss our 2020 results and 2021 outlook. After these comments, we will open the call for your questions. Before I begin, I'll remind you that this call will contain forward-looking statements that involve a number of risks and uncertainties.

Examples of these statements include our expectations regarding future growth, including our 2021 outlook, capital allocation, and future operating performance; our expectations regarding the impacts of COVID-19; our expectations regarding the impacts of the AGR decision in India; Our expectations regarding our pending Telxius transaction, and any other statement 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, 2019 as updated in our Form 10-Q for the three months ended March 3,1 2020. And 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 reflect subsequent events or circumstances. Now, please turn to slide 4 of our presentation, which highlights our financial results for the fourth quarter and full year 2020. During the quarter, our property revenue increased 10% to $2.1 billion; our adjusted EBITDA grew by 13%, nearly $1.4 billion and our consolidated AFFO and consolidated AFFO per share increased by 8.9% and 8.8% respectively to $936 million and $2.10. On an FX neutral basis, growth rates for property revenue, adjusted EBITDA and consolidated AFFO per share would have been 13.4%, 15.9% and 11.9%, respectively.

Finally, net income attributable to American Tower Corporation common stockholders decreased by roughly 35% to $365 million or $0.82 per diluted common share. The decrease includes the impact of approximately $181 million impairment charges in the quarter across several markets, as well as the non recurrence of certain income tax benefits in India from 2019. From a full year perspective, our property revenue increased 6.5% to nearly $8 billion. Our adjusted EBITDA grew by 8.7% to approximately $5.2 billion and our consolidated AFFO and consolidated AFFO per share increased by 7.6% and 7.5%, respectively and nearly $3.8 billion and $8.49.

On an FX neutral basis, full year growth rates for property revenue, adjusted EBITDA, and consolidated AFFO per share would have been 10.8%, 12.3% and 11.6%, respectively. Finally, net income attributable to American Tower Corporation common stockholders decreased by about 10.4% to $1.7 billion, or $3.79 per diluted common share, again, impacted by the impairment charges in the fourth quarter and the non occurrence of certain income tax benefits in India from 2019.

And with that, I'll turn the call over to Tom.

[Tom Bartlett, President and Chief Executive Officer]

Thanks, Igor. Good morning, everyone. As you just saw from our posted results, we finished 2020 with another strong quarter of solid momentum heading into 2021. Globally, the secular trends in mobile that we've leveraged to deliver sustainable, long-term growth are firmly intact. As advancing mobile technology, modernizes economies, transforms the lives of billions of people and connections during an unprecedented pandemic. Our extensive communications real estate portfolio is well positioned to serve as the fundamental backbone of today, and tomorrow's modern wireless network. And we're excited about our path forward. But before I get into our future expectation, I want to first briefly summarize our last five years of performance and highlight the key drivers of those results. As a form of a backdrop what we expect going forward.

Turning to slide 6 of our presentation, you can see that from 2015 to 2020, we've generated an 11% CAGR for consolidated property revenue, adjusted EBITDA, and consolidated AFFO per share. These results were supported by attractive organic kind of billings growth rate, which averaged 6% in the US and 7% internationally. Additionally, over the last five years, we have meaningfully enhanced our global new build program, creating a platform that enabled us to construct nearly 5,900 sites just this past year, and almost 17,000 sites since the start of 2016. We are focused on new site construction together with our proven discipline M&A strategy has resulted in the addition of nearly 100,000 new sites over the last five years, further lifting our returns and growth trajectory. Concurrently, we grew our annual common stock dividend by more than 150% from $1.81 per share in 2015 to $4.53 per share in 2020, adding another attractive element to our total return formula.

The consistency of our performance over these last five years speaks to the fact that our standard delivery strategy is working. The four pillars of this strategy, operational efficiency, growing our asset and capabilities, extending our platform and driving industry leadership have continued to pay dividends across our global asset base. We firmly believe that the continued implementation of these strategic priorities will result in sustainable, long-term growth generation, and that remains our focus. In other words, while we are obviously mindful of and realize the importance of our quarterly numbers, the way that we've run the company is fundamentally designed to optimize returns over a much longer planning horizon.

And we believe our results speak for themselves. This philosophy is evidenced by among other things, our strategic long term contracts, the T-Mobile agreement that we signed in September. In the immediate term that deal will result in some elevated churn. But over the longer term, we expect it to create tremendous value for our stockholders, while helping to secure a significant share of industry leading activity in our sites, and supporting the deployment of 5G across the country. Our recently announced Telxius transaction is another good example of our Stand and Deliver construct inaction. Our financial stream, proven capital allocation strategy, and objective of gaining scale in the most attractive markets globally enabled us to identify what we believe to be a unique opportunity for long term value creation in Europe. And overall as we expand our global platform, as is typical with our investment, this transaction is expected to be immediately accretive to consolidated AFFO per share. However, most of the accretion and shareholder value will be realized over time as we generate Lisa, construct additional types to round out the portfolio and drive higher margin. Additional future upside may come we believe from our platform expansion initiatives, particularly in markets like Germany, where we anticipate that edge computing will be important for carriers and enterprise accounts themselves as they seized the benefits of 5G.

And the ability to be in a unique position to be able to provide a global platform well over 200,000 sites in over 20 countries pro forma for Fortelus the global MNOS, hyperscalers, enterprise accounts and data center companies should drive additional value over time. Our Stand and Deliver commitment also drives our focus on industry leadership, particularly in the area of ESG. Including, among other things, our increasing use of renewable energy, reduction of our emissions, and numerous human capital initiatives designed to ensure that we remain is not only a preferred employer, but also a positive driving force in our community. This was particularly relevant this past year, as we enhanced our commitment to diversity throughout the company, committed funds to help counter social injustice and structural inequities, and saw additional opportunities to make a positive impact, including initiatives to help bridge the digital divide through programs like our digital village.

Our culture and American Power is extremely important to me personally, as well as the rest of our executive team. And while we clearly have more to do, I'm proud of the tremendous strides we have all made together over the last few years. Looking forward, we expect our continued execution of Stand and Deliver to result in stimulating attractive long term, sustainable growth for American Power and propelling total returns for our stockholders.

Moving to slide 7, you can see that the US and Canada Organic Tenant Billings growth will continue to be a critical component for long term success. Having said that, as I just mentioned, we will have elevated levels of US churn beginning in the fourth quarter of this year, and particularly in 2022, which will result in average US organic tenant billing growth rates of around 2% for us the next few years. This is due to the legacy Sprint network being substantially decommissioned by T-Mobile. And the fact that unlike our peers, we have been able to eliminate ad and related churn to date as a result of previous master lease agreements. Adjusted to exclude these cancellations are expected US organic tenant billings growth through 2022 would average around 5%.

As part of that growth, we expect our gross new business commencements to accelerate beyond 2020 level given the deployment of new technology, new spectrum, and new market entrants. What's even more interesting for us in line with our focus on long-term growth is the organic trajectory beginning in 2023. As you can see in the slide from 2023 through 2027, we expect organic tenant billings growth to accelerate to on average at least 5% on a reported basis, and at least 6%, excluding the impact of the remaining legacy Sprint churn. Importantly, much of this growth has been fractured, in part driven by escalators on existing leases, which will continue to average more than 3% per year, and in part represented by future new business that we have locked in through contractual framework. Like our agreement with T-Mobile. Said another way, the majority of our expected baseline future organic growth in the United States through 2027 is contractually guaranteed today.

This is further supported by our expectations, that churn in the US will be lower than historical level. Once the legacy Sprint leases fully roll off in 2024. The non-contractually guaranteed components to these projections based on the assumption that annual wireless CapEx in the US will be slightly higher than current levels through 2027 as 5G deployments take hold in its new spectrum C-band is deployed. This in many ways mirrors what has occurred in the past with new technology rollout where CapEx levels have risen with each new G. We continue to believe that the carriers have a mandate to deploy 5G as quickly as possible; given it is the most cost effective way for them to address the tremendous growing levels of mobile data traffic streaming across their networks. As a result, we expect to see meaningful incremental densification and amendment activity for the foreseeable future driving strong growth.

Importantly, we've not layered in any material assumptions around a potential new entrant outside of it. And we have assumed only modest contributions from edge computing and other platform expansion initiatives within these numbers. We are working diligently to unearth additional meaningful opportunities that can drive further upside to our growth rate.

Turning to slide 8, we are also reiterating our aspirational goal of delivering average annual double digit consolidated AFFO per share growth for the next seven years, including initial guidance of around 8.5% growth for 2021. We expect the US organic growth I just referenced to, to be an important component of our AFFO trajectory. In addition, similar to what we have seen in the past, our expectation is for international organic tenant billings growth rates to be at least 200 basis points higher than the US over the long term, further enhancing our consolidated AFFO for shared growth. Many of our international markets are in earlier stages of technology development, have little to no fixed line penetration, and require tremendous incremental investment in their wireless network infrastructure to support future densification. The criticality of wireless in these locations has been further highlighted during the ongoing pandemic and set the limitations of current network infrastructure. As a result, we expect that as carriers ramp their network investments, our emerging market organic growth rates will continue to be very attractive.

Meanwhile, in more advanced markets like Germany, we are now seeing early stages of 5G buildup, which we believe will result in a long pathway of attractive growth as well. Importantly, we expect organic growth in Germany to accelerate meaningfully over the next several years. Furthermore, we expect recent and future M&A together with our accelerating new build program to drive additional value. This includes our pending Telxius deal, several recently closed transactions in the United States, as well as the nearly 5,900 sites we constructed in 2020 and the roughly 6,500 sites we expect to build in 2021. In fact, based upon the demand we are seeing for new sites across our international business, we are targeting the construction of 40,000 to 50,000 new towers over the next five years with day one NOI yields continuing to be extremely attractive. And on the M&A side, we expect there to be numerous additional opportunities for us to deploy capital towards high quality assets with attractive counterparties and favorable economic.

As in the past, we expect M&A to be a key piece of our future growth story. Enhancing operational efficiency, another pillar of stand and deliver will also be a key area for us as we seek to drive continued double digit growth and consolidated AFFO per share. As we incrementally globalize the business, we are creating shared service centers, optimizing various back office processes, sharpening our pencils, on site level services like energy provision, and focusing resources on further enhancing and improving our customers experience with us. Utilizing drone technology and our instant colo initiatives are examples of how we are both scaling more efficiently and increasing the value proposition for our customers. We remain laser focused on driving margin improvement throughout the business, which should translate into continued high conversion rates of adjusted EBITDA and consolidated AFFO.

And finally, we continue to believe that our leading investment grade balance sheet is a key differentiator for the company and expected it will be an important component in achieving double digit consolidated AFFO per share growth. The investment grade, debt markets remain extremely attractive from both the rate and access perspective. And we feel good about our ability to not only complete value additive refinancing transactions, but also to fund accretive M&A in the future. We remain fully committed to our investment grade credit rating, and expect it to be an important element of our future success.

In conclusion, we believe that we are exceptionally well positioned to extend our long track record of driving strong growth and attractive returns, particularly at a point in time when mobile broadband connectivity globally has never been more critical. We have tremendous visibility into our future baseline growth trajectory, including having roughly $59 billion in contractually committed revenues, supported by long term, mutually beneficial comprehensive master lease agreements with each tenant. We also expect to have some interesting opportunities further enhanced that baseline through platform expansion initiatives like edge computing, power as a service, and other potential sources of upside. Moreover, we believe that our unmatched geographic diversification of distributed side has the potential to set us apart from the competition, particularly in the context of an increasingly global tenant base, cross border infrastructure deployments, and an even more connected and digitally driven world.

We firmly believe we have the right strategy, the right macro tower oriented asset base, and the right management team to move American Tower forward into the 5G era and beyond.

With that, let me turn the call over to Rod to go through our 2020 results and the details of our 2021 outlook. Rod?

[Rod Smith]

Thanks, Tom, and good morning, everyone. I hope you and your families are all doing well. As you can see from our press release and presentation, we had another solid year and finished 2020 on a high note hosting another strong quarter of performance across our global business. This included constructing record number high return new sites, completing two sizable and accretive acquisitions in the US, strengthening our already strong balance sheet and achieving higher than previously expected consolidated AFFO per share growth. Our mission critical power portfolio, ability to execute across our global footprint, disciplined, reliable and proven approach to capital allocation and strong balance sheet all positioned us to achieve the long-term predictable growth that Tom referenced earlier.

As part of that growth path, we expect to have a strong year in 2021. But before I get into the details of our 2021 expectations, I'll spend a few minutes on our financial results for the quarter and the full year 2020. As you can see on slide 10, we reached double digit growth in property revenues, adjusted EBITDA and consolidated AFFO in the fourth quarter on an FX neutral base. Our fourth quarter consolidated property revenue of $2.1 billion grew on a reported basis by $191 million or 10% over the prior year period, and on an FX neutral basis by $256 million, or 30.4%. We generated consolidated organic tenant billings growth of 4.4% including 4% in the US and 5.2% in our international market, led by Africa is 9.4% and Latin America at more than 7%. As expected US organic tenant billings growth pull back a bit in Q4, due primarily to the flow through impact of slower activity levels earlier in the year.

Meanwhile, in international markets, we completed the construction of approximately 2,900 news sites, which nearly doubled the previous American Tower record set in Q3 of 2020. Adjusted EBITDA growth was 13% in the quarter with adjusted EBITDA margins, up by over 150 basis points year-over-year due to organic growth, cost controls and straight line benefits. Finally, we translated that strong adjusted EBITDA growth to solid consolidated AFFO and consolidated AFFO per share growth of nearly 9% or about 12% on a currency neutral basis.

On slide 11, you can see that our full year consolidated property revenue growth was 6.5%, including organic tenant billings growth of 4.8% and total tenant billings growth of 9.7%. In total, we outpaced our initial property revenue outlook on a currency neutral basis by more than $130 million. Our organic tenant billings growth included 4.5% in volume growth from colocations and amendment activity with another 3.3% generated through escalators. Churn was just under 3% and there was a negative 10 basis point impact from other items. For the year, we commenced over $19 million in gross new monthly business with nearly $10 million of that in the US. Our US and Canada property revenue grew nearly 8% supported by organic tenant billings growth of 4.6%, contributions to tenant billings from new assets of less than 1% and approximately $135 million in higher straight line revenue. With respect to organic tenant billings growth, volume growth from colocations and amendments contributed 3.5% to the full year growth rate.

While pricing escalate has contributed 3.2%. This was partially offset by churn of about 1.7% and a negative impact of roughly 30 basis points from other items. Our international property revenue grew by nearly 5% or by around 14.5% on a currency neutral basis, as meaningful network capital was again deployed globally by large multinational tenants. International organic tenant billings growth was 5.1% with colocation and amendment revenue driving 6.5% growth, while escalators contributed nearly 3.6%. Other run rate items added 20 basis points, while churn concentrated in India was just over 5%.

Finally, the day one revenue associated with more than 23,000 sites we've added through M&A in our new build programs over the last few years, contributed nearly 5% to our global tenant billings growth. This includes the impact of our nearly 5,900 new builds in 2020, which generated average day one NOI yield of over 12%.

Moving to slide 12. For the year, adjusted EBITDA grew by nearly 9%, with adjusted EBITDA margin increasing to 64.1%, a year-over-year expansion of over 150 basis points. This increase was primarily driven by strong underlying revenue growth, net straight line benefits and continuing cost efficiencies throughout the business. On an FX neutral basis, we exceeded our initial 2020 outlook for adjusted EBITDA by around $150 million. These adjusted EBITDA results included continuing progress in fuel management, particularly in Africa, where we reduced our vehicle usage by more than 45 million liters in 2020. As of the end of the year, we had more than 7,000 sites with lithium ion batteries in over 3,000 with solar. We also grew consolidated AFFO and consolidated AFFO per share by nearly 8% in 2020, as a result of our previously discussed growth in cash, adjusted EBITDA.

This growth was also supported by our disciplined capital market strategy. We avoided the credit market disruption caused by COVID-19 between March and May, while taking full advantage of improved conditions thereafter. In fact, despite closing over $9 billion in M&A since the start of 2019, we were able to reduce our cash interest expense by approximately $40 million. Maintenance CapEx by more than $10 million and kept cash taxes flat 2020 verse 2019. On a currency neutral basis, these strategic efforts and effective management of our cost structure facilitated consolidated AFFO per share growth of roughly 11.6% exceeding our initial expectations for the year by more than $0.23 per share.

Now, let's take a look at our expectations for 2021. Before we dig into the numbers, I'd like to summarize a few of the key high level assumptions surrounding our projections. First, both in the US and in our international market, we expect gross new business additions to our recurring monthly run rate to be above 2020 level. This is due to a mix of contractually committed revenue growth, particularly in the US and continued solid demand for tower space international. Carriers are expected to deploy new technologies and new spectrum while densifying their network to keep up with rapidly growing mobile data usage around the world.

Second, we expect churn to be somewhat elevated this year due to a combination of T-Mobile lease cancellations in the US primarily in the fourth quarter and hold over churn in India. In the US, we expect that churn will be just over 3% for the full year, including 6.5% in Q4 specifically. This includes scheduled cancellations as part of our agreement with T-Mobile, some legacy Sprint and Clearwire churn outside of the MLA in normal force cancellations of around 2%. Of the roughly $375 million in total, annualized legacy Sprint churn that we expect over the next four years, more than 50%, or just under $200 million, will hit our run rate in 2021, with the vast majority churning off October 1. Given this is an annualized number; we will incur a quarter of the impact in 2021, with three quarters of its coming in 2022.

In India, we expect churn to be roughly 11% in 2021, which is down about 3% versus 2020, but still higher than historical level. Similar to 2020, this churn is primarily being driven by holdover consolidation impact in the effects of the AGR case. We continue to work closely with the Indian wireless carriers as they plan for the future and are optimistic that churn rates in India will continue to trend down over the next several years.

Finally, I would note that we have excluded the impact of our pending Telxius transaction and its associated financing from our outlook for historical practice. We continue to expect the deal to close in multiple tranches beginning late in the second quarter, and we'll plan to layer on the deal impact into the future outlook update. As a reminder, we expect Telxius assets to be immediately accretive consolidated AFFO per share. Taking these assumptions into account, as you can see on slide 13, we expect consolidated property revenue to grow by nearly 8% to midpoint of our outlook. Supported by solid overall levels of organic new business contribution from new assets.

Our US and Canada property revenue is expected to grow by 8%. With anticipated international property revenue growth of 7.5% including an approximately 1% positive impacts of foreign currency translation. We expect organic new business to again be a critical component of our overall growth in 2021. And on a consolidated basis, our outlook assumes more than $23 million of gross new business monthly run rate added across our tower and DAS assets in 2021, up about 20% as compared to 2020. Turning to slide 14, in the US and Canada; we are projecting organic tenant billings growth of around 3% as 5G deployments continue to gather steam and network densification efforts progress. On a gross basis, we expect monthly new business run rate added in 2021 to exceed what we added in 2020 by more than 15%.

However, we will see elevated churn from T-Mobile beginning in Q4. And we will also see some carryover effects and slower activity levels since 2020, particularly earlier in the year. As a result, our organic tenant billings growth in the US and Canada is expected to be lower than last year. I would note that these projections don't include significant contributions from DISH, nor do they assume material C-band performance and so slight late in the year. As we saw in the recently concluded C-band auction, there is a huge premium being placed on mid band spectrum by the carriers. And we continue to expect that the majority of mid band deployments will be on macro tower sites. We are enthusiastic about the potential impact of these deployments on our USA and Canada growth, particularly in 2022 and beyond.

Moving on to Latin America, we expect organic tenant billings growth of around 7% for the year, broadly in line with what we saw in 2020. Demand trends remain solid with carriers focused on improving and extending 4G networks as mobile data usage accelerates. Additionally, we expect escalators across the region to be around 130 basis points higher than last year, due primarily to certain contractual arrangements in Brazil on some of the tenant leases. Partially offsetting these items is expected churn of nearly 3% in the region, due primarily to a settlement agreement we reached with Brazil related to legacy Nextel leases, and some TelefAnica churn in Mexico in the second half of the year.

On the inorganic side, we expect to further accelerate our new build program anticipate constructing around 600 sites a year-over-year increase of almost 50%. Incorporating contributions from these new sites we expect Latin America tenant billings to grow by around 7.5% for the full year. Meanwhile, in Africa 2021 organic tenant billings growth is expected to be more than 8%. We anticipate gross new business monthly run rate added to be up roughly 70% year-over-year, with Nigeria leading the way in terms of higher activity levels. Partially offsetting this, our escalators that we anticipate will be around 70 basis points lower than last year, and churn of about 3% up about 140 basis points first 2020. The escalators are largely a function of local CPI. While the slightly elevated churn primarily reflects some carrier consolidation in South Africa.

We also expect another year of significant new build activity in Africa, with 1,300 new builds planned for 2021. In total, we expect to drive tenant billings growth of more than 13% in the region.

In Europe, we expect organic tenant billings growth of over 3% in 2021, up from 2.2% in 2020. The acceleration is being driven by the combination of higher levels of expected new business and slightly lower churn, as carriers advanced their network deployments. We are starting to see some of the growth that drives our optimism around the healthiest assets in our existing European business. Germany's gross organic tenant billings growth in Q4 of 2020 was nearly 7% and is expected to continue at that level into 2021, with further accelerations anticipating in future years.

Finally, in India, we expect organic tenant billings growth to be roughly flat in 2021 broadly similar to what we saw in 2020. While we believe the wireless industry consolidation process is essentially complete, there remains some uncertainty with respect to the exact path forward post AGR. As a result, our outlook for 2021 incorporates the expectation that we will again see higher than historical levels of churn. In addition, while new monthly run rate added from new businesses expect to be slightly up first 2020 due to the activity being mostly in the second half of the year; it will not fully impact our organic growth in 2021.

As a result, although we expect churn to be 11%, down from nearly 14% in 2020. Overall, organic tenant billings growth is projected to be similar. Long term, we remain optimistic with respect to our Indian business. There's a tremendous amount of work that needs to be done to bring networks across the country up to 4G standards, and our portfolio is well positioned to capture that activity. From a structure perspective, we think there is a path to an eventual return to high typical organic tenants billings growth rates in the high single digits. What is less clear is the specific timing of that growth acceleration, which will depend on a number of factors in the marketplace. As we learn more, and as the trajectory becomes clear, we will plan to keep you all updated.

Turning to slide 15. At the midpoint of our outlook, we expect adjusted EBITDA to grow by almost $485 million, or nearly 9.5%. This includes continued high margin flow through organic growth, as well as the impacts of accretive M&A transactions completed in 2020. Along with built to suit activity and a full year of our recent MLA agreement with T-Mobile. In addition, we expect to target areas in our business where we can take additional efficiencies, including power and fuel, where we are continuing to invest in more efficient equipment and renewable energy solutions. Our cash SG&A expense as a percent of total property revenue is expected to be around 7.3%, down from just over 8% in 2020. And we anticipate further reductions in the future.

Finally, our adjusted EBITDA expectations include an estimated positive impact of around $27 million from the effects of FX translation.

Moving to the next slide, we expect to convert our adjusted EBITDA growth into to year-over-year growth and consolidate AFFO of around $322 million, or 8.5%. This includes $358 million from FX neutral cash adjusted EBITDA growth, benefits from lower cash interest costs due to the recent refinancing initiative and about $23 million in favorable translational FX impacts. Partially offsetting these items is a $62 million increase in FX neutral cash taxes versus the prior year. As well as a slight increase in total maintenance CapEx. On a per share basis, we expect consolidated AFFO growth to be nearly 8.5% for the year, setting the stage for us to achieve double digit per share growth if we drive some outperformance versus current expectations.

Moving on to slide 17, let's review our capital deployment in 2020 and our expectations for 2021. In 2020, we deployed about $2 billion for our dividend while spending roughly $1.1 billion on CapEx with more than 85% of that being discretionary. Part of that discretionary spend was to build nearly 5,900 sites throughout our global footprint, a new record for American Tower. We spent around $5.5 billion, including the assumption of debt to acquire new assets and additional stakes in our Africa and India businesses from JV partners. And we also dedicated about $56 million to buybacks.

In total, we deployed nearly $9 billion in 2020, a record year for American Tower while staying within our leverage targets and simultaneously strengthening the balance sheet. We again expect to deploy capital in a consistent balanced manner in 2021. This includes $1.4 billion committed to CapEx, again largely discretionary and about $2.3 billion allocated towards our dividend assuming a growth rate of around 15% in subject to board approval. Included in our discretionary CapEx spend is the expected construction of 6,500 new sites worldwide, an increase of more than 600 sites compared to 2020. Day one NOI yields on these builds are expected to continue to average more than 10%. A new builds CapEx remains as our highest return investment with solid anchor tenant credit quality.

In addition, and as I'll talk more in a minute, we expect to close our pending Telxius acquisition this year for total consideration of about $9.4 billion. Including this transaction, we expect that roughly 90% of our total capital deployment in 2021 will be in investment grade rated geographies with investment grade carriers. As you can see on the right side of the slide, our discipline to capital allocation strategy coupled with solid operational execution, and a strong balance sheet has enabled us to drive consistent, reoccurring, long-term growth and consolidated AFFO per share and we expect more of the same this year. In fact, in 2021, we expect our 2020 investments in new builds and M&A to generate around $0.15 in increments of consolidated AFFO per share. We continue to believe that both consolidated AFFO per share growth and attractive returns on invested capital are critical to our creation of long-term sustainable stockholder value.

Now turning to slide 18, I will discuss our financing plans for the pending Telxius acquisition. As a reminder, this transaction is transformational for our European business, as it delivers significant scale and key markets is expected to drive some of the highest organic tenant buildings growth rates available in the region, and based on our analysis represents the best portfolio of tower assets that has come to market in Europe. The total consideration will be approximately $9.4 billion and we anticipate completing the purchase in 2021 through multiple closings. We expect the first closing to consist of a large portion of the European assets in late Q2 with the remaining assets in Europe and Latin America closing in late Q3. Of course, this timeline may shift as the regulatory process unfolds. As we communicated when we announced the deal, we plan to finance the transaction in a manner consistent with maintaining our investment grade credit rating. We anticipate this will include bringing our net leverage, which stood at 5x at the end of 2020 up to the high 5x range temporarily.

Importantly, we are committed to organically delevering back down to a level consistent with our stated financial policy of 3x to 5x net leverage over a multi year period. On the debt funding front, we expect to utilize a combination of our recently upsize revolving credit facilities and new euro denominated term loans and plan to opportunistically consider long-term sources, including senior unsecured notes. The balance of the total consideration is expected to be funded with equity, which may include common stock issuances, mandatory convertible preferred instruments, and/or private capital raised through the sale of minority stakes of our European subsidiary to one or more private investment partners. On the private capital side, we are currently engaged in discussions with a select group of premier, strategic investors who not only can provide capital, but also have considerable experience in telecommunications infrastructure and in the European region specifically.

We are encouraged by our progress on this front, and if terms are sufficiently attractive, are optimistic that we can complement a public equity issuance with a high quality strategic private capital raise. As always, through this process, we remain disciplined and focused on minimizing dilution to our common stockholders, while optimizing our long-term value creation objectives.

On slide 19, and in summary, 2020 was a very strong resilient year for America Tower with solid organic growth, operational efficiencies, providing high conversion rates, record new build activity, accretive M&A, and continued value creation for our shareholders. Looking forward, we are excited about the long-term potential of our business. Our comprehensive portfolio is well positioned to capture meaningful lease up as new spectrum assets and new network technologies are deployed globally. In the US, activity is ramping up and we expect to continue to create significant value through the master lease agreements with key tenants. We stand ready to quickly integrate the new Telxius assets this year, and leverage our expanded European presence for significant future growth, which will complement our operations and other less mature markets.

Taking into account continued strong tailwind from secular growth trends in mobile, we expect to be able to deliver attractive sustainable growth in revenues and cash flows for years to come, while driving compelling total stockholder returns.

And with that, operator, will you please open the line for questions?

[Operator]

[Operator Instructions]

Your first question comes from a line of Brett Feldman.

[BrettFeldman]

Yes, thank you for taking the question and just a few about the outlook you provided for domestic organic tenants billings growth. First, you mentioned that you do expect that gross activity is likely to increase from here; one of your peers outlined a view that that will begin in the second half of this year. I'm wondering if that's the same assumption you've embedded in your outlook. I'm also curious how sensitive your outlook is to that. I think at this point, you have an MLA with all of your major customers. And so perhaps the variability here is narrower and then just on churn. I think you suggested in non Sprint churn was going to be in the 2% range this year, which is a bit above trend.

I'm wondering if there's anything we need to focus on. And then I believe T-Mobile has indicated they're going to be shutting down this Sprint CDMA network, I think starting next year, is that captured in your churn assumptions as well? Thank you.

[RodSmith]

Thanks, Brett. So I'll take that. This is Rod Smith, thanks for the question. So with regards to our US organic tenant billings growth, as we roll into 2021, let me get a couple of the component drivers that will be factors including the new business. So as you saw in the presentation, we expect to have organic tenant billings growth of around 3% for 2021. That's down from about 4.6% in 2020. There are a few factors driving that the. The first one is that our monthly run rate new bid is anticipated to increase by about 50% year-over-year so that's going to kind of drive some growth there in our organic tenant billings growth. That obviously is being offset by a couple of factors. One is as you mentioned the Sprint churn. So we do expect to begin to see Sprint churn in Q3 of 2021.

And as you saw in the presentation in some of our prepared remarks, we are expecting over the next four years to have about $375 million of annualized Sprint churn, the vast majority that ends up coming in the beginning in the fourth quarter of 2021. So we'll see churn begins in the fourth quarter that'll represent about $200 million of annualized run rate. That'll begin to come off or come off in Q4 of 2020. That has a drag on organic tenant billings growth of almost 100 basis points. So that explains a big chunk of that step down between year-over-year. The next piece that I would highlight is the activity levels coming out of 2020. So everyone knows there was kind of a slowdown and from T-Mobile and Sprint in 2020, began in 2019, and went into 2020, that slowdown has flowed through effect into 2021, which also impact our growth rate. And that is going to impact the beginning of the year, the first half of the year, more than the second half of the year. So that's probably consistent with what you may have heard from some other folks.

And then the final piece of this, the size of our base is getting bigger. And that usually brings down growth by about 20 bps. So we have that as well. And then I would, the final point I would make on the organic tenant billings growth is our organic tenant billings growth is not that sensitive to the timing of activity, and even other network decommissioning now, because it's mostly made up of contracts that have minimum levels of activity and predefined churn reductions and those sorts of things. So there's not a lot of variability in our numbers from that perspective. And then in terms of the Sprint, I guess I address the Sprint churn numbers. So I think that probably addresses that part of your question, Brett.

[BrettFeldman]

Okay, was there anything outside of Sprint churn? And it sounded like that might be a little higher this year, I wasn't sure that was a one shot deal or something else?

[RodSmith]

Yes, no, I think the way you framed it up is correct. We expect churn, normal churn to be within that 1% to 2% range, pretty consistent, nothing abnormal there. And then the Sprint churn again, that begins in Q4, we'll have about 100 basis point hit. So when you think about that, all in our annual churn will be in the range of 3%, a little bit above what our normal range is. And again, as you see the quarters unfolding in 2021, the fourth quarter will be where you'll see that kind of that big bump up in the churn numbers. And then of course, that will take one quarter of that in 2021. And then there'll be flow through effect from that churn into 2022 where we will get three quarters of that churn in 2022. And that, of course, will have a flow through negative impact on the 2022 growth numbers. [Multiple Speakers] yes and gross new business are accelerating as we head into 2021 and we expect that to continue into 2022. It's really the churn that'll partially or fully offset that in 2021, or 2022.

[BrettFeldman]

Got it. And just to be clear, all of this team over related currently returned it captures everything you expect them to do with the integration, including anything to do with the CDMA network. That is correct.

[RodSmith]

That's correct. Yes. It's all predefined in contract.

[TomBartlett]

And actually, Brett, I would just add is, as I mentioned before, when we get through this churn, because then we have this really locked in kind of growth rates with our key customers, we would expect the churn really to fall off quite a bit significantly actually. And they kind of that 2023 to 2024, 2027 kind of timeframe, which is reflected in some of the growth rates that I laid out for a long term perspective.

[Operator]

Your next question comes from the line of Michael Rollins.

[MichaelRollins]

Thanks and good morning. Tom, if I could just briefly follow up on a comment that you just made. You talked about the committee growth that you have with key customers. You also talked about that earlier in the call, when you were talking about the 57, 2023, 2027 growth, so are there additional long-term deals that you've recently renewed or entered into with carriers other than T-Mobile, that is contributing to that visibility into that long term guidance? And then just secondly, one of the questions that come up is how to think about AFFO per share growth, when you're experiencing the peak churn from the Sprint deal in 2022? Is there anything that investors should be mindful of as you're looking for that long-term target you described? But coming out of 2021 and into 2022, with that elevated Sprint churn that you and the team were just describing?

[TomBartlett]

Yes, no, hey, Michael thanks for the questions. With regards to your first comment, I mean, there are no new MLA, that I mean, we already have MLA to place with the major carriers so there's nothing else that's driving that which I think is what your question was that the most significant MLA that we've recently managed with clearly with T-Mobile. And so that's what's really impacting, if you will, and as I mentioned over two thirds of the over the planning period that we're talking about. Two thirds of our growth rates are locked in. And so we have a tremendous visibility in terms of what that's going to look like. And as I mentioned, we have $59 billion or $60 billion, already contractually committed of revenue on the book.

So that gives us, I think, some really good comfort, in terms of what we would expect. On top of that, we will also have the largest Telxius transaction that will kick in as Rod said throughout the year. And so we'll have that benefit continuing forward, which kind of gets into your second question. We've looked at as I mentioned, in my comment or last five years, we're talking about double digit growth rates in terms of AFFO per share. And I'm compensated candidly on the bulk on AFFO per share growth, as well as return on invested capital. So those are two critical benchmarks for myself and my team. So we obviously spend a lot of time working through all of the elements of those.

In 2022, yes, there is going to be that drop of T-Mobile churn that we're going to see, we know what it is, we're working on opportunities now, to be able to mitigate a lot of that as we go into 2022, we put out an initial guide for 2021 at that 8.5% level. We're all hoping that we're going to be able to improve on that for 2021, particularly as we bring on the kind of Telxius transaction. And then we're working through what 2022 will look like, but clearly are committed to driving that double digit AFFO per share growth over the long period of time, as we've done in the past. And so we've had historically consolidations going on, and as you know, we've had consolidation churn in India over the past, no doubt that the T-Mobile Sprint churns is a large item for us that we need to address.

But our teams are working on it diligently right now. And we're trying to work through that. And but clearly, we are committed to driving that double digit kind of growth.

[MichaelRollins]

Thanks. And just one other quick follow up. Rod, when you're talking about the AFFO per share expectation for growth in 2021. You refer to the possibility of upside opportunities, are those operational financial in nature what would be the factors? And there's a line on the slide that talks about the potential path to double digit growth, if upside opportunities to initial outlook materialize. Thanks.

[RodSmith]

Yes, Michael. I think there are a lot of additional opportunities, they're certainly some of our operational, driving down expenses bringing up our margins, we continue to kind of work on that on a regular basis. There are potential for additional acquisitions, as well as integrating the acquisitions that we've already announced, particularly the inside transaction in Telxius to drive additional growth, capital markets activity and where rates go, certainly it'll be interesting to us as we continue to pay down higher cost debt and replace it with lower cost debt. Those sorts of things as well as driving business through new business around the globe. Certainly could help. So there are a number of things. And we always remain focused on trying to drive upside relative to our plans and outlook. So we'll just continue to do that.

[Operator]

Your next question comes from the line of Ric Prentiss.

[RicPrentiss]

Thanks. Good morning, guys. Hope you continue doing well. Appreciate all the details. Short term, long term guidance really helped set the table here as far as what we're looking at. I think a couple of extra questions. First, you mentioned DISH is fairly modest as far as in the 2021 guidance. What should we think about? Will you be able to get your fair share of DISH leases with or without an MLA?

[TomBartlett]

Yes. Next question.

[RicPrentiss]

Pretty clear.

[RodSmith]

Yes. And I would also confirm, Ric.

[TomBartlett]

No, hey, Ric, I mean, I don't mean to be wise guy. We have, I mean, if you take a look at over the last several years particularly in the United States we've gained more than our fair share of business, from our customers. And it's a function of number of things, but it's also a function of the contract that we have in place with them. I like to think it's also a function of the level of service that we're providing and the quality assets that we have but we have been able to demonstrate that kind of outperformance and we stand ready to support DISH. And however, they're going to be rolling out their network. And we know the teams well. And they are smart team. Dave Mayo is smart guy, smart operator, and we're working very closely with them.

And so we're looking forward to it. And as I said, kind of given the location and given the quality assets, I am confident that we will gain at least our fair share of activity from DISH.

[RicPrentiss]

Right. And I think in your prepared remarks, you also had mentioned that you've not layered in any new entrants beside DISH. Is that an illusion to maybe cable operators starting to deploy some CBRS or what might that comment also imply?

[TomBartlett]

Yes, it kind of covers the waterfront, right? I mean, who knows? I mean, yes, clearly, whether there are cable cos, or some of those that might be looking to move off of some of their MVNOs. We see that happening in other markets. And we see that happening in Germany, for example, MVNOs has a strong relationship with Telefónica is going to be looking to build out their network in Germany. So it's so hard to say, who might be looking to do that, I think with the deployment and the new technology, who knows even whether the hyperscalars or who might else be coming into the marketplace wouldn't surprise me, and I don't think it would surprise you either. So it's kind of a blanket statement. We just don't know what we don't know, relative to other players coming into the market so. We haven't included them clearly in any of our forecasts.

[RicPrentiss]

And speaking of MVNOs in Germany, any thoughts about timing to get some agreements in place with a holistic approach in Germany, given the new portfolio, and particularly the rooftops you're getting?

[TomBartlett]

Yes we've been working with all of the players in the market for several years, obviously. And most recently, since we have a new potential entrant into the market, just as with every other one of our customers working very closely, I think that the assets that we now have, the presence that we now have in Germany gives us a really good platform to be able to support this existing MVNO and new build in Germany, and I think, as Rod said we're really excited about some of the organic growth that we expect to see in the region, particularly in Germany, as they've just gotten through their 5G spectrums. And as we see new entrants coming into the marketplace, and now with the presence that we have there, particularly with the rooftop, we now have that dense urban area covered, which we didn't have before. So I think are really positioned as well to be able to capture new business.

[RicPrentiss]

Makes sense. Last one, for me, is modest edge assumption, when does edge become real? And is it going to timeout the same in the US as it is in Europe and other markets?

[TomBartlett]

Well, I clearly see it advancing in the United States first. But candidly, I almost see the opportunity for it to be even greater outside of the United States. And that's where I think that the your pro forma for Telxius were 220,000 sites, we're looking to build 40,000 to 50,000 more sites over the next several years. We have a massive global platform, Ric, which I think is really going to be puts us in a really unique spot, to be able to offer that global platform, to hyperscalars data center companies, even global MNOS who are looking for that kind of a ubiquitous type of a capability. And so that's what we're looking and trying to build here. This is not a 2021 real big revenue opportunity. I think it's going to take a few years. But we have MOUs in place with several companies in the United States, working with them on different kind of value propositions, different types of market entries, we have proof of concepts that we're bringing, we're dropping in front of the major MNOS.

And so we're very excited on it about it. We're spending a lot of time working through this and working with potential partners. This is not something that we would be looking to bring entirely on our own. So I do see this is an opportunity to be partnering with a number of other players to bring it. I think that even in our own market in the United States and our portfolio they're probably 4,000 - 5,000 sites that we've identified, where we think that we can bring in several shelters into a site being able to offer up 20 to 30 cabs, with 100 to 300- 400 kilowatts of power and so I think we're uniquely positioned to be able to do this, not just in the United States, but globally. But I do think it'll be start in the United States. But as I said, I think our global reach really puts us in a unique position to be able to offer a high value prop to potential customers.

[Operator]

Your next question comes from the line of Simon Flannery.

[SimonFlannery]

Great. Thank you very much. Rod, could you just talk a little bit more about the balance of the Sprint churn? You said $200 million October 1, the other $175 million, do you have clarity on when that peels off? Is that in 2022 -2023? Any specifics around that would be great. And then Tom, maybe just come back to India, if you could talk about pricing trends there and capital raising and the ability to maybe move past and return to more normal growth in 2022 and beyond?

[TomBartlett]

Sure, Rod, why don't you start then I'll take the second one.

[RodSmith]

Yes, sounds good. So good morning, Simon. So the Sprint churn is expected to be around $375 million. That's an annualized number, as I stated in the prepared remarks, and in the last Q&A, we expect about $200 million of that annualized number, or about 53% to roll off in Q4, 2021. The balance will be spread across 2022 -2023 and 2024. And I guess, in broad percentages data you can think about 16% of that total $375 million rolling off in 2022, an additional 13% coming off in 2023 and say another 19% coming off in 2024. And then that'll be the end of the Sprint churn.

[SimonFlannery]

Okay, great, that's helpful, thank you.

[TomBartlett]

And then Simon on India, as Rod said and I alluded too as well, we continue to remain really positive on the market; overall, it's a work in progress. As you all know, we're looking at gross growth in the market of double digit. The challenge is to churn and it's coming down on a year-over-year basis, and it will continue to come down. And that's what we need to be working on with our carriers, particularly Vodafone, in the region. And we are working on that as we speak. And so over the longer period of time, I would expect that churn to be coming down, and for us to be early be able to start to drive and the positive net organic growth. I mean, if you take a look at our overall international market we're growing 79% in Latin America and Africa, Europe is I mentioned before, with Ric we really see some nice growth, I think that we're going to be experiencing there.

So it is India, it is that focused on that particular market that we need to drive that will bring up the overall clearly the growth rate in an international space. And there are a number of things that that have to happen in the marketplace, which we see happening. They just don't happen very quickly. Clearly the government is committed to Digital India to their Digital India program. I think the pandemic has made that even more obvious because so many Indians are looking for telehealth services, and they need that broadband connection. So everything that we're hearing we're seeing is really giving me even more and more comfort that the government is going to be supporting the carriers, they're really being able to densify the overall network, and we're seeing that we're seeing and to build programs.

Clearly, we're seeing that from all of the three major carriers in the marketplace. We're starting to see price increases in the market, which I think is positive, really positive. We're also seeing our customers in particular Vodafone looking to identify different areas to be able to reduce capital. I also just saw yesterday from an AGR perspective that the government is now re-looking at some of the new calculations that the carriers were being opposed on that they were going to have to pay over the next 10 years or so. So, again, I think that's just indicative of the fact that the government very much wants each and every one of the carriers to survive and to participate to their own digitization that's going on within the marketplace. But we got more work to do.

We got to work through the contracts that we have in place, particularly with Vodafone to try to nip the some of that churn. But as I said, we're seeing the growth in the marketplace, which I think is what we've always seen, is that opportunity. And so now we need to work on that the churn, which is exactly what we're doing.

[Operator]

Your next question comes from the line of David Barden.

[DavidBarden]

Hey, guys, thanks so much for taking the question. I guess, Tom, it wasn't too long ago that the same store sales organic growth rate domestically was 6%. And the belief that the international market would grow to 4% premium to that at a 10. And now we have kind of a seven year outlook, which thank you for that for the US to grow it for and for the international market to grow 2% more than that, so now it's at six. And I guess the question then becomes two questions, one, can you just aggregate that 6% growth into organic growth inflation based escalators, and new builds relative to the US? And then can you disaggregate it regionally with respect to which regions are going to be driving more than 6%? And I guess your answer to Simon's question just now maybe India's on the lower end of that six, if that calculation is correct. Thank you so much.

[TomBartlett]

Okay, hey, David. Well, thanks for that question. Let me take -- I'll start it and then I'm sure Rod and Igor might be able to fill in some of the pieces, but as I talked about it, I mean, your right, we talked about kind of a 6% to 8% kind of growth rate on consolidated basis, right? If you go back a number of years, now, we are twice the size of business that we were back then. So growth on a base of that size does get to be a little bit more challenging, but even take a look at the numbers that I laid out for the US. And this is just organic, right? And so it's not -- it does not include our bill to suit programs in the United States. The item there is this for insurance. And so that's why we kind of laid it out looking at the next couple of years, and then even layering in on top of okay, what would that growth looks like perhaps without that, Sprint churn, and that's where it goes next couple of years being on average, in the United States organically a couple percent.

But being up in that 5% range, to the extent that we did not have it, and then you go out longer term, 2023 to 2027, in the United States, where it'd be greater or equal to 5%. And then without a greater equal to 6%. So it's kind of getting back. And particularly if you didn't weigh in the fact that the business is so much bigger. It's getting back to those ranges. And we're looking at some of that growth coming from some of our platform extension and issues, but not in any significant way. I mean it's largely from pure organic growth, coming from our contractually committed master lease agreements that we have with our customers.

On the international side, we didn't necessarily come up with kind of long term growth projections for them, other than saying that we would expect it to be a couple 100 basis points higher than what we're seeing in the United States. So given that you would look at the 2023 to 2027, kind of average up in that 7%, 8% normalize without the kind of -- without the impact of the churn in the United States. So it's working really rather consistent with some of those growth rates that we laid out several years ago. And as I said that we do have a big, a much bigger base of a business. What's also exciting though, is on the build program that's driving 10s of millions of dollars of new revenue for us each and every year, we do have and I do expect that I meant to kind of four sites on adding 40,000 to 50,000 new built-to-suits over the next five years, and we set records kind of every month every year in terms of the building of these double digit NOI.

So it's really good return of capital for us and with good tenants. So it really provides upside to our overall growth rates that we expect going forward. With the Telxius deal and the heavier European presence, we're getting a little bit more presence even in the developed market. And I would expect as I mentioned, I think it was Ric, up 6% kind of growth rate. We're kind of being expected from my perspective in Germany. And I think that there are really a lot of opportunities there. So again just kind of stepping back, I don't think they're inconsistent with what we've said in the past. We are bigger business, we did, we do have that big print churn event, which will impact us over the next couple of years, which is to no one's surprise, kicking in really the fourth quarter here, we talked about that right out of the gate, they'd have been churn, and that kind of four percentage range, if you will, of our business.

And it really did land on that. And I think we've been able to put in place a long term contract with T-Mobile, who is really in a very good position from a spectrum perspective and a build perspective. And I think we're going to be very aggressive. And so given the kind of master lease agreement we have in place with them, I'm really excited about the kind of their strategic relationship that we have with them to be able to explore new stuff, and new areas of business. So kind of long rambling answer for your question, but I think it's pretty consistent.

[RodSmith]

Yes. And Tom maybe I just add a couple of -- David, maybe I'll just add a couple of quick points there. When you look at the out years of the US organic tenant billings growth number, the normalized to the Sprint churn we say greater than or equal to 6%, between 2023 and 2027. When you get beyond that, that big churn event in 2022, the high level pieces of that we maintain a 3% escalator in our business. So that's a piece of that 6%, we expect new business to drive 4% to 5% in that range, and then churn outside of Sprint would be back down into the between 1% and 2%. That's how you get to that 6% over that 2023 to 2027 timeframe.

[Operator]

Your next question comes from the line of Nick Del Deo.

[NickDeo]

Hey, good morning, thanks for taking my question. The first one in Europe and then one in India. In Europe, O-RAN is talking about trying to get to the other carriers that haven't sold their towers yet to kind of join forces and kind of create a pan European carrier controlled Towerco? Maybe akin to what's happened in China. Obviously, a lot to happen for that to be realized. But if it did do you feel like that would affect the growth outlook or appeal of European markets for independent like you.

[TomBartlett]

No. By the way, O-RAN is a great customer of ours right now. We're doing a lot of business with them. Candidly, we've seen captives working around the world, including even in the United States back in the day. And so we've operated and we've seen the results and the impact of them. I think in many -- in some cases, it brings some stability in certain respects. But we wouldn't expect that to impact growth rates at all.

[NickDeo]

Okay. And then India, obviously known emphasis for you over the next decade is going to be new builds, which is great to hear. A lot of that's going to take place in India; you've also been decommissioning a lot of sites in India over the last several years. I assume sites that are naked when the ground lease came up. Can you talk about that dynamic at all? How many more sites in India you think are left decommissioned, and when we should start to see kind of aggregate tower growth in that market?

[TomBartlett]

We do -- we evaluate that every month, every year. And a lot of it is a function of consolidation that's gone on in the marketplace, over the last several years. And so when something like that happens, we look at the site, we look at the opportunities to put new customers on those sites, and we evaluate them over a couple of year period to really kind of get a sense of whether there is an opportunity to lease back up, as you said, kind of those naked sites. And so I would expect that the consolidation churn what's happened in the market probably in the next couple of years to but you will see those types of things, you can't, it's relatively, overall relatively insignificant to the portfolio overall, but it is part of our just our normal impairment analysis that we go through and as you all know, with lease accounting, it's not just now the property itself, it's also the land itself that we're evaluating as well given the debt on the balance sheet.

[NickDeo]

Okay. Got it. And maybe one quick, if I can. You noted an expectation for the Australian dollar FX rate in your guidance. Do you have something in the works in that market?

[TomBartlett]

Yes, it actually with the recent acquisition of Insight, we picked up some land. It's immaterial really but yes, we do now have some presence in Australia minimum.

[Operator]

Your next question comes from the line of Tim Horon.

[TimHoron]

Thanks guys. On the AFFO per share growth of double digit, I'm just having a tough time getting there. Last kind of few years have been growing organically more like 7% EBITDA margin it's been up like 50 basis points a year, your interest expense has improved 100 basis points maybe a little bit more even. And you're talking about slower organic growth going forward. I mean, what are the other levers you can pull to get to that type of AFFO growth? I mean, do you think the interest expense can continue to improve? And will margin improvement accelerate from here any other color would be very helpful. Thanks.

[TomBartlett]

No, sure, Tim. I mean keep in mind we've had huge FX headwinds, right. Even take a look at last year it was like $0.25 - $0.30. So we've had some huge FX headwinds going on, we do have as Rod pointed out some M&A that's going to be kicking in, in 2021, with Telxius and that will impact part of this year, and then kick in largely in terms of 2022. I also have a significant focus on our margin performance. And I think that there are a lot of really interesting opportunities for us to even further standardize and globalize some of our business. And so, I'm hopeful that we can even take our industry leading margins to the new level. And so you'll see even this coming year margin performance is up from last year. And so I would continue to expect margin improvements going forward, and then there's just general operating leverage that will come. And so we thought we -- I think Rod mentioned the increased flows through from revenue down to AFFO.

So we're hopeful that will be a contributor. And even on our balance sheet we continue to look at ways from a maintenance perspective to drive down our overall cost of borrowing. So I do think that there are a number of different leverage there, again, that we will be able to drive that and as I kind of said early on, take a look at the last, I don't know, 10 years, in terms of what we've done. I think our record kind of speaks for itself in terms of the underlying growth that we've been experiencing. Now, we're talking long terms, I mean, every year is going to be at those double digit growth rates. Well, I hope so. But you can also have challenges from a year-to- year basis, but I'm very optimistic that we're going to be able to drive those kinds of growth rates.

[RodSmith]

And Tim maybe I can add -- just I'll add a couple of things. Real quick point here on FX, the FX something that we have in that long term plan is to hold the FX rates fairly steady to where they are now, you had mentioned that we also expect rates to stay relatively low over that time period, and I'd remind you that 80% of our debt is fixed. So very insulated from short term movements in rates, we also have additional senior notes that we can continue to kind of pay down, maybe redeem early and replace them with lower interest rate notes now, and in the future, assuming rates stay low. So those are two of the pieces kind of at the -- to put a finer point on FX and interest rates.

[TimHoron]

That's helpful and thanks for guide through 2027. Are you implying the, or I guess you have major MLA agreements in place through that timeframe for the most part? And do these agreements allow the C-band equipment to be put on the towers without any incremental payments or minimal incremental payments? Any more color on the MLA would be great.

[TomBartlett]

Yes, I mean the MLA, I think we've said in the past, I mean they do cover through this period of time, and relative to C-band and technology and those types of things. Tim, I really do try to stay away from it. I don't want to get into the weeds on some of that activity. But to answer the other question, yes, master lease agreements to cover through this period. So we have -- we do have some very good visibility into this and I think as Rod said two thirds of the underlying growth there are things that we actually see within the MLA themselves today.

[Operator]

Your next question comes from the line of Colby Synesael.

[ColbySynesael]

Great. Thanks for fitting me in. You had mentioned equity raises in that there's a variety of different ways in which you're looking at potentially doing that. Can you give us a sense of the total size of equity you're looking to raise to support the acquisition of Telxius? And then secondly, when you think about your leverage targets, how much room do you still have left in 2021 for things like buybacks, or M&A? Or should we really kind of push those out in terms of expectations for 2022 and beyond?

[RodSmith]

Thanks, Colby. This is Rod. I'll take that and Tom can add in. So I think I'll start by just reminding everyone we ended the year with leverage it about five times. That is at the top of our stated financial policy of three to five times when it comes to Telxius and financing. The Telxius acquisition, of course, we expect to do that in a in a manner that's consistent with maintaining our investment grade credit rating, that's always been important to us, it continues to be very important to us. And we've been engaged in a variety of fronts here, since we announced that deal in terms of preparing some financing. The first thing I would note is we do have that committee bridge, led by Bank of America, and we've gone further and syndicated after we have that in place as a backstop.

You've also seen us in the debt markets here in terms of the bank facilities we upsized a couple of our revolvers, we also entered into a new term loan that euro denominated, that's about $1.5 billion or $1.9 billion value. So we've got increased liquidity from that perspective, we did end 2022 with about $4.5 billion, almost $4.9 billion of liquidity. And these are additive to that to prepare for the closing. One thing that we are comfortable with doing, we've been working with the rating agencies; we've been doing a lot of internal analysis. And we're comfortable increasing our leverage to the high 5x as in when we close the Telxius deal, and then we'll be committing to delevering back into within our financial policies over a couple of year time period. So you will see us with higher leverage probably for an extended time period. And I'll let you do the math, Colby, in terms of what that might mean in terms of how much we'll raise from debt to actually execute on the Telxius transaction.

The balance of the purchase price that will remain, we'll look at a number of different equity sources, we're looking at public equity, we're looking at mandatory converts. And we're also looking at private capital. And we're doing a lot of different analysis around that it will make the best decisions for our shareholders in terms of maximizing total shareholder return, maximizing AFFO per share growth. And also looking to help make sure that we have a really strong balance sheet as we go into the future so we can continue to grow. So when you think about that, one of the things we've done is we've worked very hard at raising private capital, we've done a lot of work there, we're continuing to be engaged with just a small number of very large premier investors around the world.

And we maintain high level of confidence in that could be a very attractive vehicle for our shareholders. So we're continuing to explore that. And we'll make the decisions kind of along the way. And I would say when you think about private capital, we are in our analysis and the way we're thinking about it, we would be selling a minority stake in our European business that's not really related to the Telxius transactions specifically, it's the entire European business that we would look to finance, potentially by adding some private capital in there. And in terms of the mix, how much private capital versus how much public equity, we'll be making those decisions here over the coming weeks and months as we kind of work through the analysis and get close to the closing. Does that hit all your points, Colby?

[Igor Khislavsky, Vice President of Investor Relations]

Great. Well, thanks everybody for joining. I think that'll do it for this morning.

[Tom Bartlett, President and Chief Executive Officer]

Appreciate you joining everyone.

[Operator]

Ladies and gentlemen, that does conclude your conference for today. Thank you for your participation and for using AT&T Teleconference. You may now disconnect.