SBA Communications Corporation

Ladies and gentlemen, thank you for standing by. Welcome to the SBA first quarter results conference call. At this time, all participants are in a listen-only mode. Later, we'll conduct a question and answer session, and instructions will be given at that time. However, should you require assistance during the call, you may press star, then zero, and an operator will assist you offline. As a reminder, this conference is being recorded, and I would now like to turn the conference over to our host, Vice President of Finance, Mr. Mark DeRussie. Please go ahead.

Good evening and thank you for joining us for SBA's first quarter 2024 earnings conference call. Here with me today are Brendan Cavanaugh, our President and Chief Executive Officer, and Mark Montagnier, our Chief Financial Officer. Some of the information we will discuss on this call is forward-looking, including but not limited to any guidance for 2024 and beyond. In today's press release and in our SEC filings, we detail material risks that may cause our future results to differ from our expectations. Our statements are as of today, April 29th, and we have no obligation to update any forward-looking statements we may make. In addition, our comments will include non-GAAP financial measures and other key operating metrics. The reconciliation of and other information regarding these items can be found in our supplemental financial data package, which is located on the landing page of our investor relations website. With that, I will now turn the call over to Mark.

Thank you, Mark. Our first quarter results were in line with our expectations. Excluding the impact of weakening foreign currency assumptions, we increase our full-year outlook for tower cash flow, adjusted EBITDA, and FFO per share as compared to our initial 2024 outlook. The primary drivers of these increases are direct cost savings associated with towers to be decommissioned and a reduction in our estimated full-year share count from completed share buybacks. Due to the current strength of the U.S. dollars versus local currencies in some of our international markets, our overall outlook for site leasing revenue, total revenues, tower cash flow, and adjusted EBITDA are slightly down versus our initial guidance. First quarter domestic same-tower recurring cash leasing revenue growth over the first quarter of last year was 5.9% on the growth basis. 2.3% on the net basis, including 3.6% of churn. 7.5 million of the first quarter churn was related to spring consolidation churn, which we anticipate to be approximately $30 million for the full year 2024. As expected, domestic operational leasing activity or bookings representing new revenue placed under contract during the first quarter was consistent with the levels of activity we saw in 2023. Non-SPRINT-related domestic annual churn continues to be between 1 and 2 percent of our domestic site leasing revenue. Our previously provided estimates of aggregate SPRINT-related churn over the next several years remain unchanged. We anticipate a range of $40 to $45 million in 2025, $45 to $55 million in 2026, and $10 to $20 million in 2027. International same-tower recurring cash-losing revenue growth for the first quarter, which is calculated on a constant currency basis, was 3.3% net, including 4.8% of churn, or 8.1% on the gross basis. In Brazil, our largest international market, same-tower growth organic growth was 6.8% on the constant currency basis. As compared to the previous quarter and full year 2023, Our reported international growth rates continue to be impacted by a declining local CPI link escalator in Brazil. Total international churn remained elevated in the first quarter, mostly to carry consolidation. During the first quarter, 78% of consolidated cash site leasing revenue was denominated in U.S. dollars. The majority of non-U.S. dollar denominated revenue was from Brazil, with Brazil representing 15.8% of consolidated cash cycle leasing revenue during the quarter. As a remainder, our 2024 Outlook does not include any churn of certain related to the oil wireless consolidation other than the amount associated with the previously announced agreement that we executed with VIVO. If during 2024, we were to enter into further agreements with other carriers related to the oil wireless consolidation that may have an impact on 2024, we will adjust our outlook in future earning calls. Additionally, the new judicial reorganization plan for oil wireline was recently approved by a majority of creditors. As a result of this plan, we have increased our fully-earned outlook for oil wireline by $2 million to a total of approximately $4 million. This adjustment is including an updated full-year site leasing revenue outlook. As a result, all wireline now represent approximately $20 million total annual site leasing revenue in 2024. During the first quarter of 2024, we acquired 11 communication sites for a total cash consideration of $9.2 million. We also built 76 new sites mostly outside of the U.S. Subsequent to quarter end, we have purchased or are under agreement to purchase 271 sites in our existing market for an aggregate price of $84.5 million. We anticipate closing on these sites under contract by the end of the third quarter. Our outlook does not assume any further acquisition beyond those under contract today. We also do not assume any share buyback beyond what was already completed so far this year. However, it is possible that we invest in additional assets or share repurchase or both during the year. Our outlook for net cash interest expenses and for FFO and FFO per share continues to include the July 1st refinancing of our $620 million ABS tower security scheduled to mature in October 2024. we assume a refinancing at a fixed rate of 6% per year. Actual rates and timing may vary from these assumptions. Our balance sheet remains strong and we have ample liquidity. If not for the recent share buyback, our $2 billion revolver would have been fully paid down. Our current leverage of 6.5 times net debt to EBITDA remains near historical low and will be a steady target of 7 to 7.5 times. Our balance sheet is very strong, with a current weighted average interest rate of 3.1% across our total outstanding debt. Our weighted average maturity is approximately four years, including the impact of our current interest rate hedge, the interest rate on 96% of our current outstanding debt in six. And now, let me turn the call over to Mark.