Ladies and gentlemen, thank you for being here. Welcome to the American Tower First Quarter 2022 Earnings Conference Call. Please note that this call is being recorded. After the prepared remarks, we will have a question and answer session. I will now hand the call over to your host, Adam Smith, Vice President of Investor Relations. Please proceed.

Good morning and thank you for joining American Tower's first 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 U.S. business. And then Rod Smith, our Executive Vice President, CFO and Treasurer, will discuss our Q1 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; our expectations regarding the impacts 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.

Thanks, Adam. And thank you everyone for joining our call this morning. In line with our traditional first quarter practice, my comments on this call will primarily focus on our core U.S. and Canadian tower business, which together with our U.S. based data center segment, made up approximately 54% of our total property revenues, and 65% of our total property segment operating profit in the first quarter. Growth in our foundational U.S. and Canadian business continues to be propelled by the rapid acceleration in mobile data consumption that we've seen over the last decade plus. Back in 2017, the average smartphone in the U.S. was consuming roughly six gigabytes of data per month. And today, in the early stages of 5G uptake by consumers, that number has grown by a staggering 240% to over 20 gigabytes on a monthly basis. As both 5G handsets and coverage become increasingly pervasive, this upward trend is expected to continue, with industry estimates now forecasting an average monthly consumption rate of 54 gigabytes by 2027. To meet this expected demand, carriers are aggressively deploying mid-band spectrum to provide ubiquitous 5G mobile services. Historically, annual carrier CapEx in the U.S. has grown by approximately $5 billion to $6 billion, with every new generation as MNOs deploy capital to maintain service quality on their increasingly strained networks, and provide incremental capacity and density to meet consumer demand for enhanced network performance. Early evidence in the 5G cycle suggests this will continue to be the case. In fact, in 2021, we saw carriers increase aggregate network CapEx to approximately $34 billion up from the roughly $30 billion annually we saw during the 4G cycle. Independent industry reports suggest that this number should continue in the $35 billion range on average going forward. Further, as we've seen with prior network technology deployments, we expect a prolonged 5G investment cycle that will extend over the next decade. Today, carriers are in the earlier stages of upgrading sites with new equipment to provide broad contiguous 5G coverage across their respective subscriber bases. Given the propagation characteristics of mid-band spectrum, and ever increasing mobile data consumption paired with incremental low latency requirements arising from 5G enabled use cases, we expect an extended period of investment aimed at delivering greater cell site density and stronger performance across networks for many years to come. Importantly, it is clear that macro towers will continue to be crucial infrastructure for the long runway of carrier network investments that lie ahead. Macro sites have historically been the most cost-effective means for carriers to provide broad base network coverage to the vast majority of the U.S. populace, and evidence suggests that remains unchanged in a 5G world. To support this point over the last five years, our backlog of contractually guaranteed revenues in the U.S. has more than doubled on a per site basis. This speaks not only to our team's capacity to secure long-term, profitable cash flow growth from more than 43,000 distributed sites, but also to the long-term value our tenants place on our macro tower assets as a critical component of their network deployment strategy for 5G and beyond. These trends along with the guaranteed growth secured through our comprehensive MLAs support our expectation for strong growth on our tower assets, both in the near and longer term. In 2022, we expect another year of accelerating gross new business growth in the U.S. and Canada. As we've previously communicated, growth from colocations and amendments is expected to ramp in the back half of the year with the expectation that we'll exit 2022 at a high point. With colocation and amendment contributions accelerating and the impacts of the Sprint churn beginning to come off their peaks, we are well positioned to execute on a return to strong mid-single digit organic tenant billings growth in 2023 and beyond. On the operational front, our U.S. teams remain focused on driving efficiencies throughout the business that allow us to quickly scale up to meet customer needs and maximize the flow through of top-line growth to the bottom line. Over the last few years, we progressed on process and IT initiatives designed to deliver best-in-class cycle times and introduce technology innovations in the field that improves site monitoring and data collection capabilities, while lowering site-level operating costs and providing efficiency benefits for our tenants. In addition, our focus on cost controls has driven cash SG&A as a percent of property revenue in the segment to well below 4% on a consistent basis, a trend we expect to continue in 2022 and beyond. As a result, we've been able to continue extending on the significant operating leverage inherent to the tower business model. At the midpoint of our 2022 outlook, we expect an operating profit margin of 78.8%, representing a 370 basis point expansion in the segment over the last five years, even while absorbing the significant impacts of Sprint churn more recently. This strong conversion of top line growth to profit margin, combined with the low capital intensity of just over 1%, positions our U.S. and Canadian business to continue its decades-long track record of delivering strong free cash flow growth in 2022 and beyond. With that, I'd like to shift gears for a moment to our data center segment, which we expect to benefit from many of the same long-term technological trends that are driving attractive growth in our tower business. We're off to a great start in our first full quarter of ownership of the CoreSite business. In Q1, the CoreSite team delivered a very strong quarter of new and expansion sales, as these interconnection rich network and cloud dense data center campuses continue to attract strong demand from enterprises to cloud, network and IT service providers in key U.S. markets. Looking forward, we expect to continue to see accelerating Hybrid IT and multi-cloud deployments drive increasing demand for a highly interconnected portfolio, which should result in opportunities to selectively deploy capital toward high yield development projects. Additionally, as the 5G revolution begins to unlock new capabilities, we're beginning to see incremental deployments resulting from AR, VR, gaming, artificial intelligence, machine learning, and other next generation use cases which require lower latency. We would only expect this trend to accelerate and drive more demand for our data center campuses over the coming years, while pushing storage and compute requirements further out to the network edge. And when we combine our differentiated data center portfolio, CSP and network operator relationships with our distributed U.S. macro tower portfolio, and long-standing MNO partnerships, we believe we have a significantly enhanced option to create value as the edge evolves over the coming years. In summary, we're more excited than ever for the opportunity to extend on our long track record of strong profitable growth in the U.S. As the 5G environment continues to take shape, we believe we're uniquely positioned to drive continued long-term value for shareholders, while playing a critical role as an industry leader in this evolving 5G landscape. Finally, I'd like to acknowledge the horrific events unfolding in Ukraine today. It's hard for any of us to comprehend the suffering of those affected by this humanitarian crisis. While we do not have operations or employees in Ukraine, our thoughts and prayers go out to all those we have lost and to all those who continue to be subjected to this crisis. We, like many global organizations, are focused on finding ways to help the millions of people who are suffering, both within the country and those who are now refugees elsewhere. We will look to join with others to contribute to the relief efforts underway. With that, let me hand the call over to Rod to discuss our first quarter results and updated 2022 outlook.

Thanks, Tom. And thanks, everyone for joining today's call. As you saw in today's press release, we're off to a great start in 2022, delivering another quarter of strong performance across our global business. Before getting into the details of our Q1 results and revised outlook, I want to touch on a few highlights from the quarter. First, demand for our towers continues to be strong throughout our global footprint, evidenced by the sequential acceleration of organic tenant billings growth across each of our reported segments. Additionally, organic leasing activity was complemented with nearly 1,450 newly constructed sites in Q1, our eleventh quarter of over 1000 new builds in the last three years, a milestone that was only achieved once prior to 2019. Second, growth from our recently acquired premier assets Telxius and CoreSite is at the high end of our initial expectations. As a result, we are modestly raising guidance for Europe organic tenant billings growth and the midpoint of our data center segment revenues. Additionally, in Europe, we recently signed an agreement with 1&1 in Germany, establishing a leasing framework to support their network rollout, which we expect to be another solid catalyst for growth in an already strong leasing market. We believe this further speaks to the quality and strategic positioning of our acquired Telxius assets, the opportune timing of the transaction and our optimism for the future. And finally, we continue to leverage the capital markets to support our investment grade balance sheet. We're able to issue $1.3 billion in senior unsecured notes on attractive terms, right after the end of the first quarter. With proceeds used to term out a portion of our floating rate debt. Looking ahead, and as it relates to our CoreSite financing plan, we continue to explore options that are aimed at maximizing shareholder value while supporting our investment grade credit ratings. Consistent with our prior outlook, we are targeting to finance the $10 billion plus purchase price roughly equally between debt and equity, the latter potentially being satisfied through issuances of common equity, mandatory preferred equity, or other convertible instruments or private capital or a well-balanced combination. With that, please turn to Slide six and I'll review our property revenue and organic tenant billings growth for the quarter. As you can see, our Q1 consolidated property revenue of $2.6 billion grew by 22% or over 23% on an FX neutral basis over the prior year period, which included a contribution of approximately 17% in growth from Telxius and CoreSite. In the U.S. and Canada, property revenue grew under 1% due to the impacts of Sprint churn, while international growth stood at roughly 32% or nearly 35%, excluding the impacts of currency fluctuations. Additionally, our newly expanded U.S. data center business contributed over $180 million of growth in the quarter. These growth rates across our property segments continued to reflect the essential nature of digital services and our communications real estate throughout our served markets. Moving to the right side of the slide, you'll see our organic tenant billings growth for the quarter, with consolidated growth standing at 3%. In the United States and Canada, while growth was 0.6%, we saw an acceleration of gross organic new business on a dollar basis, posting our highest quarter since Q1 of 2020, resulting in a 3.3% contribution to growth. Given the mechanics of our MLAs and the timing of certain use fees in 2021, we will see a decline in gross organic new business in the second quarter before ramping up in the back half of the year, which was all contemplated in our original 2022 guidance. Escalators were 3.5%, which is also impacted by certain timing mechanics within our MLAs. However, for the full year, we expect escalators to come in right around 3%, consistent with historical trends. This growth was largely offset by the impacts of Sprint churn. On the international side, growth was 7.4%, and we saw improvements across each of our reported segments. Starting with Latin America, growth came in at roughly 8.7%. This includes approximately 8.5% from escalations, which represents an acceleration of 300 basis points compared to Q4 2021. Additionally, relatively consistent growth organic leasing trends were largely offset by churn primarily associated with certain decommissioning agreements as highlighted on our Q4 2021 earnings call. In Africa, we generated organic tenant billings growth of 8%, which includes 7% in gross organic new business contributions, our second highest quarter on record. This strong new leasing activity was complemented by the construction of over 600 sites in the quarter, as we see 4G coverage and densification initiatives continue to drive strong top line growth and returns across the region. We have now constructed over 3,800 sites in Africa since the start of 2020, around the time we closed the Eaton Tower transaction, which meaningfully augmented our scale and enhanced the existing MNO relationships in the region. As a point of reference, prior to the Eaton transaction, we had constructed less than 2,200 sites in the preceding nine years of operations in Africa combined. Turning to Europe, we saw growth of 18.8%, reflecting pronounced contributions from the Telxius portfolio, which was not in our Q1 2021 base. Absent Telxius, our legacy European business grew over 6%, an expansion of 300 basis points compared to our Q1 2021 growth rate. As we look to the back half of 2022, where we'll have more comparable year-over-year results with Telxius included, we expect to see strong organic tenant billings growth in the mid-7% range, driven by accelerating 5G deployments and continuing investments in 4G. In APAC, we saw growth of 2.1%, a continuation of the improvements we have seen over the past several quarters as churn further moderates in the India market. In fact, churn is now down to the mid-6% range, the lowest we've seen in nearly five years, which we project to further improve over the course of 2022. Turning to Slide seven. Our first quarter adjusted EBITDA grew approximately 13% or nearly 14% on an FX-neutral basis to $1.6 billion. Adjusted EBITDA margin was 61%, down over 5 percentage points over the prior year, driven by the lower margin profile of newly acquired assets, the conversion impacts of the commenced Sprint churn, along with the higher pass-through revenue resulting from rising fuel costs. Moving to the right side of the slide, attributable AFFO and attributable AFFO per share grew by roughly 6% and nearly 4% respectively. Growth was meaningfully impacted by the timing of cash taxes and maintenance CapEx in 2021, which was heavily back-end weighted. The contributions of these two line items provided a negative year-over-year growth headwind of approximately 5% on AFFO in the quarter. 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, due to higher pass-through revenue associated with rising fuel costs, strong underlying trends in the business and modest FX improvements, we're increasing our property revenue outlook by $75 million at the midpoint. It's important to note that we continue to apply our standard methodology for projecting FX across our regions, taking the more conservative of the trailing 30-day spot rate averages and an aggregation of bank estimates. When applying current spot rates, we would actually see improvement beyond these revised assumptions, although we believe it's prudent to continue with our standard approach. Second, through solid conversion of our top line upside, the carry-forward of some cost benefits and strong services performance in Q1, we are raising our outlook for adjusted EBITDA by $55 million. At an attributable AFFO per share level, we are raising our guide at the midpoint to $9.72, an increase of $0.02. Finally, as I mentioned earlier, we are maintaining our prior guidance assumptions around the equity financing for CoreSite. With that, let's move into the details of our revised full year expectations. As you can see on Slide eight, we are now projecting consolidated year-over-year property revenue growth of 14% at the midpoint. The increase, as compared to prior guidance, is due to approximately $66 million in additional international pass-through and straight-line revenue, $7 million in core property revenue outperformance, along with another $2 million in FX benefits. Moving to Slide nine, you'll see our revised organic tenant billings growth expectations for 2022. With the leasing environment remaining largely consistent across our footprint, we are reiterating our prior growth rates for Latin America, APAC, international, U.S. and Canada, and on a total consolidated basis. We are modestly raising our expectations for Africa, driven by stronger new business in Europe mainly due to higher CPI-driven escalation contributions. As such, we now expect organic growth of greater than 6% and greater than 9% in Africa and Europe, respectively. Moving to Slide 10. As noted earlier, we are raising our adjusted EBITDA outlook by $55 million and now expect year-over-year growth of roughly 10.5%. These revised expectations include $26 million from cash gross margin outperformance, driven by the increase in our revenue guidance and some services margin expansion, partially offset by higher pass-through expenses. We also now expect an additional $19 million in net straight-line and another $10 million associated with revised FX assumptions. Turning to Slide 11. We are raising our expectations for AFFO attributable to common stockholders by $10 million at the midpoint. As the benefits from the operational and FX upside I just mentioned are being partially offset by higher interest expenses, the result of an elevated rate curve since our last call. This translates to an increase of $0.02 on a per share basis, moving the midpoint to $9.72. As I mentioned earlier, and consistent with our initial outlook, our AFFO guidance includes an assumption for the CoreSite equity financing, which, for modeling purposes, assumes a common equity issuance by midyear. However, we continue to evaluate several potential sources, including common equity, mandatory convertible preferred equity and other convertible instruments and also private capital partnerships, where discussions continue to progress as a result of strong interest from leading private investors for a minority stake in our U.S. data center business. That said, we remain flexible in our approach, with the final mix ultimately depending upon what course offers the most attractive cost of capital terms and operational flexibility. Finally, with respect to balance sheet management, following our recent senior unsecured note issuance, which I highlighted earlier, and pro forma for executing our equity financing, we will have termed out a significant balance of our floating rate debt and would expect to bring our net leverage to the high 5 times range, with a clear path to returning to our target range of 3 to 5 times over the next couple of years. Moving on to Slide 12, let's review our capital deployment expectations for 2022, which are consistent with our prior outlook and reflect our continued focus on driving strong, sustainable AFFO per share growth. As always, distributing capital to our common shareholders remains our top priority, and we continue to expect to allocate, subject to Board approval, approximately $2.8 billion towards our dividend in 2022. On a per share basis, this equates to approximately 12.5% in year-over-year growth, consistent with our double-digit target. On the CapEx front, we are reiterating our prior outlook midpoints across all categories. This plan supports our initial expectations to construct approximately 6,500 new sites across our international footprint and includes roughly $300 million towards our data center business, $270 million of which is tied to development projects. We will continue to prioritize our development opportunities across our global footprint given its strong return profile and our ability to largely fund these initiatives through locally generated cash flows. In fact, of the nearly 1,450 sites we constructed in Q1, we saw an average day 01 NOI yield of 14%, at the high end of the double-digit initial return rates we've seen through our build program historically. Looking ahead, our development pipeline remains strong, with opportunities afforded by our scale, market positions, customer relationships, operational capabilities and solid underlying secular trends, which continue to drive strong demand across the portfolio. Finally, on Slide 13 and in summary, Q1 was a fantastic start to the year, with organic tenant billings growth accelerating sequentially across each of our reported segments as 5G deployments, 4G densification initiatives and the benefits of our comprehensive MLA agreements drive strong organic new leasing and increasing demand for newly constructed sites. We see the same secular trends driving solid performance on the data center front, and we could not be happier with the assets and team we've added through the CoreSite and data site acquisitions. We continue to be encouraged by the demand trends across our global portfolio of distributed communications real estate and look forward to executing on a number of strategic initiatives, including finalizing our CoreSite financing through the rest of the year, as we aim to deliver compelling total returns to our stockholders. With that, I'll turn the call back over to the operator for Q&A.

Our first question will come from Matt Niknam from Deutsche Bank. Please go ahead.

Hey guys, thank you for taking the question. Just two, if I could. First, on Europe. So we've heard a lot of press around larger carrier portfolios coming to market there. I'm wondering how you think about the prospects of scaling up in Europe further through the lens of either full ownership versus partnering with a financial sponsor as you've done in the past? And then already in light of leverage sitting at 6.4 turns right now. And then secondly, on CoreSite, obviously, this was the first full quarter with CoreSite under your belt. I'm wondering if there are any positive or negative surprises you can share. And then, Rod, I think you alluded to maybe a little bit of an increased outlook for the data center business, if there's any color or additional detail you can give? Thanks.

Matt, let me start off, and Rod can add in as he sees fit. First of all, within Europe, both Telxius as well as our CoreSite acquisition are hitting on all cylinders. They're both outperforming our expectations right out of the gate. And so in Europe, we're very focused on realizing the full potential with Telxius. As Rod said, we just landed the transaction with 1&1. So our focus is really on the final integration steps with Telxius and really leveraging that capability in the markets that we're in. So we're really pleased with the teams there and the contracts there and the relationship with Telefonica. With regards to CoreSite, they had a record retail and scale quarter. We're really pleased with what we've seen there. We've got a terrific management team in place, a good balance between activity between the retail scale and hyperscale types of business. I've got our sights set on building out some of the existing infrastructure that we have available to us. So on both transactions, we couldn't be more pleased with the activity that we're seeing right out of the gate.

Yes, good morning Matt. Thanks for joining us, and thanks for the question. I'll add a couple of points on CoreSite. So we are seeing positive trends in CoreSite. You've heard us say it before, we continue to view the asset as a very unique high-quality asset, and we're seeing the quality of the asset come through early on here in the financials. So we did have a terrific end of the year last year in terms of new and expansion revenue being added. We do see that accelerating into 2022. So that's really positive. That allowed us to increase the midpoint of the revenues by about $5 million. We have seen the backlog for that measure kind of come up. We're sitting at about $19 million backlog versus a year ago same period where it was around $9 million. So that's up about $10 million. Across the major metrics here, we think the business is really strong. In terms of revenue growth, the range we look at is between 6% and 8%. We're looking at the high end of that range, maybe even a touch above that range here. The escalators are in the range of 2% to 4%. Interconnection growth, our target range is between 6% and 8%, and again, we'll be at the high end of that range. We believe cash mark-to-market in the range of 2.3. We'll have to see exactly where that ends up. It always can be affected by unique renewals from certain customers, with the range there being about 2% to 3% on an ongoing basis. The monthly recurring revenue per cabinet, we look at growth rates of 4% to 6% range. Again, we're in the mid-single digits for this year. So that is compelling. The churn rate is right where we expected them to be in the middle of the range, the range being 6% to 8%. So we're taking on all cylinders with the business. I think it really demonstrates the quality of the asset. The fact customers of this business really do enjoy the interconnection nature and the cloud-centric nature of these assets. From a CapEx perspective, we put in about 2% of revenue back in maintenance CapEx. For growth CapEx, we've got about $300 million going into the business this year, really to build out additional capacity. Hopefully, that gives you some color, Matt.

Our next question will come from the line of Eric Luebchow with Wells Fargo. Go ahead.

Hi, good morning. Thanks for taking the question. Just wondering if you could comment a little bit on the 1&1 relationship, the new MLA you signed. Is that kind of driving a faster organic growth outlook in Europe than you previously had anticipated? And then secondly, I just wanted to take your temperature on the potential to do future data center M&A. Obviously, CoreSite only in eight markets. Are you seeing some opportunities out there, whether internationally or perhaps in secondary markets in the U.S. that might be interesting to further scale that platform? Thank you.

Yes, I'll address the second question regarding 1&1 while Rod can cover the first one. First, concerning the data centers, we're effectively utilizing the assets we acquired at the end of last year. Our focus is on further developing that business by enhancing sales, expanding distribution, growing the campuses, entering new markets, and utilizing the interconnection capabilities available. Additionally, we are exploring opportunities at the edge. Our towers are integral to our business; this is why we pursued the transaction—to enhance the revenue potential from the tower segment.

Yes. Thanks, Tom, and thanks, Eric. So with 1&1, we are pleased that we have the agreement with 1&1. We're really looking forward to helping them build out their greenfield 5G network across Germany. That really is very exciting. The deal that we struck really is a framework around how the two parties will work together contractually. It also kind of lays out and gives 1&1 that framework to access our sites. There are long-term contracts kind of embedded in there. So we'll work through that. It's not really driving additional growth in our 2022 organic tenant billings yet, although we do think it's a very exciting development that will provide growth over the long-term and maybe even pick up in the back half of this year a little bit. But maybe, Eric, I'll hit a couple of points on the growth rates here in Europe. We announced earlier that we experienced organic tenant billings growth in Europe in the high teens, largely driven by the Telxius assets, which are high-quality assets, especially in Germany. We anticipate this momentum to continue in terms of leasing activity. However, as we move into the second half of the year and factor in the Telxius base revenue, we expect organic tenant billings growth in Europe to moderate to around 7%, possibly between 7% and 8%. This is still a strong growth rate. If we exclude Telxius and focus on our legacy European business, that segment saw organic tenant billings growth of over 6% in Q1, compared to only 3% to 3.5% in the same period last year. We are witnessing very positive growth momentum in Europe regarding the OTP metric for our legacy business, complemented by the high-quality assets from Telxius.

We'll go next to the line of Michael Rollins with Citi. Go ahead.

Thanks and good morning. Just curious if you could talk a little bit more about the domestic leasing environment in terms of that multiyear visibility that you've previously been speaking to? And how that visibility is evolving for the business?

Thank you for joining us. I'd like to remind you about our long-term guidance, which averages over a seven-year period extending to 2027. We aim for at least 4% growth during this time, with a normalized growth of around 5% when excluding the negative effects of Sprint churn. In 2021, we had a certain metric, and now for 2022, we project an average growth of about 2% on a reported basis. Normalizing for Sprint churn, the anticipated growth would be approximately 5%. Looking ahead to the period from 2023 to 2027, we expect reported organic tenant billings growth to be at least 5%, with normalized growth around 6%. We are optimistic about an acceleration in momentum and foresee stable, healthy long-term growth in our U.S. business as we move past the Sprint churn. It's crucial to note that two-thirds of our revenue and growth is already secured through the existing MLAs, including our partnership with DISH, where revenue generation will begin this year and increase throughout the year.

Our next question will come from David Barden with Bank of America. Go ahead please.

Hi, good morning, Rod. This is Alex Waters filling in for Dave. I have a question regarding the plans for the size and timing of the CoreSite equity raise. You mentioned it in your prepared remarks, but could you provide more details? I recall you indicating it would be in the second quarter with a nice transition into the third quarter. How have the plans changed to incorporate private capital?

Yes. Thanks, Alex. Thanks for the question. Thanks for joining us. We're working through the financing plan. We're very excited at the prospects and the different opportunities we have. As I said in our prepared remarks, we're looking at an equity component. That's really the final piece of the CoreSite financing. We ended the quarter here at about 4.6 times leverage. Our target range is between 3 and 5 times. We do have a plan to delever over the next couple of years. We expect by the end of the year to get into the mid- to upper 5 times. So that's where the equity component comes in. We're looking at raising about $5 billion from an equity transaction. That's what's in our base model. The outlook, just to reiterate here, the base plan assumes that we're going to do a common equity issuance for the $5 billion, at roughly $235 a share. That's what's in our 2022 guidance for AFFO and AFFO per share growth. With that said, we're also looking at other forms of equity. So complementing the common equity with some preferred convertible equity instruments, other kinds of convertible instruments and private capital. We are looking at private capital options. Much of that has come from inbound inquiries that we've had. When people heard that we were buying CoreSite, I think there was a lot of excitement in the marketplace in terms of the high-quality nature of those assets. So there was a lot of inbound interest there. We also went out with some outbound inquiries, and we've been working through a process. The other thing I would just clarify here, Alex, I think I mixed up the numbers on the leverage. We're ending at 6.4 and I think I may have said 4.6. So again, we're getting back down into the mid- to upper 5s by the end of the year. I think you made a comment in your question that we might be pushing the equity financing into Q3. I'm not sure that's correct, but we're working through the process. There's a good chance that we could have it wrapped up in Q2, like we initially said at the outset of the year.

And I guess, Rod, I would just add, we chose not to change the outlook assumptions. So at the time when we issued that initial outlook, we had the equity at that $5 billion level at the price point level. Just want to be clear that we kept that going forward, and obviously, we'll adjust that when Rod finally closes this whole transaction, which we again would expect in Q2.

We'll go next to the line of Ric Prentiss with Raymond James. Go ahead.

Thanks and good morning everybody. I appreciate you guys being available. First question is down in Brazil. It looks like it's finally making it to the final positioning. Can you update us a little bit about how you see the Oi getting carved into the other three operators as far as what it means to that market? And just what your exposure is?

Sure. Rod, do you want to share your thoughts?

Yes, Ric. Oi has completed its process of exiting the market and dividing its business among the three remaining carriers. We view this as a positive development, as it allows those leases to be allocated to financially stable carriers that are fostering healthy competition in that market. We believe this will be beneficial overall. We derive a portion of our revenue from Oi, with approximately 6.7 years—close to seven years—remaining on average for those leases. Regarding the revenue impact on our business, it represents less than 1% of our global revenues from Oi in Brazil. Although we have that nearly seven-year average, it is just an average, so some leases may terminate sooner. We might start experiencing churn as early as next year, continuing over the next few years as we navigate that transition. Overall, we believe this is a positive development for the industry in Brazil. We are pleased to move past this issue within the wireless segment in Brazil so that everyone can progress.

And, Ric, I'd just reiterate that I think they're candidly a very positive event, putting these assets in the hands of Tim Claro and Vivo. They're very focused on building out further 4G and 5G. So I think this is a real positive for the market.

We'll move on to the line of Brandon Nispel with KeyBanc. Go ahead.

I want to follow up on Mike's question. Do you guys continue to expect to be at $150 million in colocation and amendments in the U.S. in '22? And then how should we think about the exit rate in terms of colocation and amendments for modeling purposes for 2023? Is that going to be a good run rate? Thanks.

Yes, Brandon, thanks for the question. Thanks for joining us. We are targeting about $150 million of contribution to organic tenant billings growth through colocation and amendment. The metric for the quarter was about $36 million. So that's an acceleration over the exit out of 2021, and it's higher than any quarter we had in 2021. We are seeing that acceleration in gross leasing activity in the U.S. As I said in my prepared remarks, we will see a slight pullback in Q2 in that metric, really just around the mechanics of the way the MLAs work in the U.S. But when you get to Q3 and Q4, we'll be above the Q1 total here. So we'll be exiting at a higher level going into next year. I don't want to talk about next year too specifically here and give guidance, but we are seeing an acceleration in that metric. We expected to see that, and we are seeing that. It's all very constructive and in line with our longer-term organic tenant billings growth guidance for the U.S.

We'll move on to the line of Jon Atkin with RBC. Go ahead.

Thanks very much. A couple of questions. I noticed that you talked about $120 million of asset acquisitions, $30 million of which were towers. Can you talk to us a little bit about what comprised the rest?

Sure, Jonathan. I can give you that. It's really just a variety of small acquisitions on the tower side. Many of them were in Europe. We do have an arrangement with a carrier in Europe, where we consistently buy a number of sites throughout each quarter in Europe. We're also buying a few down in Latin America, 1s and 2s here and there. We also always have a pipeline in the U.S. where we're rolling up a few acquisitions here and there. Then there's some payments that are related to the prior year deals that we acquired. There’s really not a ton going on. We think about it in terms of Europe and in Latin America, primarily.

I'm curious about the recent bankruptcy announcement from SunGuard in April. CoreSite, as an independent entity, hinted at some developments regarding the prepackaged bankruptcy. As we move into the next phase of that situation, I'm interested in understanding the effects you're observing on your data center business from this event.

No, Jon, we're not expecting anything material from that perspective. We don't see any real negatives. Nothing meaningful to note. So we're committed and confident in the growth rates that I outlined a little earlier in the call.

And our next question will be from Batya Levi with UBS. Go ahead.

Thank you. In the U.S., could you discuss the activity you're observing from DISH? Fixed wireless seems to be growing faster than we anticipated. While it's still a small segment and carriers have a lot of unused capacity, have you noticed any change in carrier activity where there is a significant increase in usage? I'd like to hear your thoughts on that. Additionally, regarding the pulse build, you have a substantial development CapEx program this year. Can you share your insights on the cost compared to your expectations and any potential delays?

Yes, thank you Batya. Regarding the ongoing expansion in the U.S., the carriers have all expressed their interest in further developing fixed wireless, but this is not hindering their capital expenditure on advancing 5G infrastructure. We anticipate a continued acceleration in the 5G rollout in the latter half of the year, especially with Spectra being cleared and ready for implementation. We are enthusiastic about the potential of the 5G development, and I believe the carriers will ensure that nothing obstructs this opportunity moving forward.

Batya, here are some specific numbers for you. Concerning costs, the average per site is coming in at just under 100,000, perhaps closer to 75,000. We’re still seeing the targeted NOI yields in the low to mid-teens, currently around 14%, which is positive. In terms of DISH, we've noticed ongoing activity in the U.S. this year, following last year's engagement. This primarily reflects in our services business, which is performing strongly. We anticipate services revenue in the range of $225 million to $230 million this year, down from about $250 million last year. However, if we look at our services activity for the first quarter of 2022, it shows nearly 100% growth compared to the same period last year. The DISH greenfield build significantly contributes to this growth. We expect leasing revenue from DISH to materialize this year, increasing in the latter half of the year, and we will exit at a much higher leasing revenue level than we started with, which will continue to grow in the coming years.

We'll go now to the line of Phil Cusick with JPMorgan. Go ahead.

Hey guys, thanks. I have a couple of questions. First, regarding the capital raise for CoreSite, if you're working on a significant European deal, would that be substantial enough to complicate raising public equity in the meantime, or is that not a concern? Secondly, could you elaborate on your comments about the anticipated decline in gross organic new business in the second quarter before you expect it to pick up in the latter half of the year? Is that tied to the expiration of the Verizon MLA? It seems like that did not affect the first quarter at all.

Yes. Thanks, Phil. Thanks for joining the call and thanks for the question. In terms of the capital raise, I don't want to get into too much hypothetical there. A lot of different deals over in Europe, a lot of different stuff. I don't want to guess in terms of the level of capital that potentially could be needed. I would tell you, our equities are really strong. We've got a lot of support in the equity markets. If we wanted to go out and raise equity, we're very confident that we can do that for the right value accretive deal for our shareholders. So that's what I would say in terms of the potential for any other acquisitions and issuing equity. Jumping over to the deceleration from Q1 to Q2 in our OTBG contributions from colocations and amendments, it's dropping down from like the mid-30s for Q1 into the low 30s for Q2. It's not Verizon-driven, it's really just mechanics of the MLAs and where some use right fees kick in early in the year. We do see that ramping up, and we expect it to be in the range of 40 plus each of the final two quarters in the year. That's kind of the way to think about that ramp. There's nothing concerning about the step down in Q2. It's all just MLA mechanics, and we feel very good about the level of activity in the position of our U.S. portfolio.

We chose not to change the outlook assumptions. At the time when we issued that initial outlook, we had the equity at that $5 billion level at the price point level. We just want to keep that going forward, and we'll adjust when Rod finalizes the transaction, which we expect in Q2.

We have time for one final question. That will come from the line of Sami Badri with Credit Suisse.

Thank you very much for the question. First, I wanted to just get a better sense on how you think about the CoreSite business from a pricing and renewal perspective. And I know you mentioned that business for retail colo and other parts also were very strong last quarter, but what is kind of the strategy at A&T? Are you guys looking to take a bigger share out of the market by lowering pricing a little bit and winning a bigger chunk? Or are you maintaining pricing discipline as legacy CoreSite and seeing kind of the revisions and renewals as strong as what CoreSite was reported?

I can start, and Rod can jump in. We're very focused on maintaining pricing discipline. We believe the assets they have and what the business is doing with its own infrastructure can support a growth rate in the high single digits to low double digits moving forward. The team is dedicated to expanding distribution across all its major segments by driving new sales and renewals, developing campus and market expansion, and leveraging interconnection. There is no change in the direction or discipline that the team is bringing to the market. We have increased some of the funding to accelerate the build-out, which will create more growth opportunities. The strong discipline in how they approach the business is what we acquired, and we are excited about continuing that same level of discipline in the future.

And with that, we'll turn the conference call back over to your host.

Thanks, everyone, for joining today's call. Please feel free to reach out to me or the IR team with any further questions. Thanks again.

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