Operator: Good morning. My name is Angel, and I will be your conference operator today. At this time, I would like to welcome everyone to the American Tower's and Fourth Quarter Full Year Earning Call. All lines have been placed on mute to prevent any background noise. After the speakers' remarks, there will be a question-and-answer session. Thank you.
I would now like to turn the call over to our host, Ms. Leah Stearns, Vice President of Investor Relations and Capital Markets. Ma'am, you may begin your conference.
Leah C. Stearns - Director, IR: Thank you, Angel. Good morning, and thank you for joining American Tower's fourth quarter and full year 2012 earnings conference call. We have posted a presentation, which we will refer to throughout our prepared remarks under the Investors tab on our website, www.americantower.com.
Our agenda for this morning's call will be as follows. First, Jim Taiclet, our Chairman, President and CEO, will provide opening remarks. Then Tom Bartlett, our Executive Vice President, CFO and Treasurer, will review our financial and operational performance for the fourth quarter and full year 2012 as well as our outlook for 2013. Finally, after these comments, we will open up the call for your questions.
Before I begin, I would like to remind you that this call will contain forward-looking statements that involve a number of risks and uncertainties. Examples of these statements include those regarding our 2013 outlook and future operating performance, including AFFO growth and dividend per share growth, our capital allocation strategy, including our stock repurchase program and REIT distribution 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 press release, those set forth in our Form 10-Q for the quarter ended September 30, 2012, and in our other filings 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 would like to turn the call over to Jim.
James D. Taiclet, Jr. - Chairman, President and CEO: Thanks Leah, and good morning, everybody. American Tower's growth strategy is based on a simple observable premise. The consumers' appetites for mobile communications and entertainment are growing dramatically in the U.S. and around the world. The most recent industry results and forecasts confirm that we are squarely in the midst of the decade of wireless in the U.S. based on tremendous demand for mobile data and entertainment services.
In just the first two years of the decade smartphone penetration increased from about 20% to nearly 60% and mobile data traffic grew by five times in just those two years.
Moreover, as shown on Slide 5, the most recent Cisco forecast that was just released projects that mobile network traffic will grow another 10 times over the next five years. The Cisco study also estimates that approximately 75% of this growth will be delivered over traditional macro sites, primarily towers. The remaining 25% of the expected growth would be on supplemental solutions, such as DAS, picocells and Wi-Fi, with even some of these small cell installations being used on or in connection with macro sites on towers and we're starting to see some of that that now.
Therefore, our view is that macro site network infrastructure, which is predominantly tower-based, will shoulder the bulk of network expansion and is expected to grow at a 50% cumulative average growth rate over the next five-year period as you in the dark green on the chart.
So, to meet this demand, we expect our wireless carrier customers to continue to employ an integrated approach to their networks, which will further increase demand for communications real estate, especially towers. An obvious aspect of this integrated approach is the installation of fourth generation wireless technology, primarily long-term evolution or LTE. This network upgrade requires the installation of additional equipment, especially antennas to our customers' existing cell sites.
As a result, site leasing rates increased due to the amendments our customers make to their existing contracts with us. This investment cycle has been a key driver of recent revenue growth for tower operators as they install 4G.
Another important aspect of the integrated approach is the attainment and deployment of incremental wireless spectrum. This often results in additional lease amendments for equipment that's needed to transmit the new spectrum or for other rights at our sites, again contributing to our revenue growth. However, additional equipment in spectrum won't be enough to meet the exploding demand for mobile data and entertainment. Over time, new cell sites will be needed to increase the capacity and density of each carrier's 4G network.
Today, less than 10% of U.S. wireless subscribers are experiencing the speed and quality of service offered by LTE technology. As the level of penetration of LTE devices increases and voice-over-LTE, commonly known as VoLTE is added to carrier's service offerings, it's our technical view that additional cell sites will be needed as a result of the higher signal strength required to effectively deliver acceptable video and VoLTE applications to large numbers of users.
So, as site proximity and consequently network density increases, American Tower expects to secure additional leases on our existing towers, as well as more opportunities for new tower constructions. Of course, both these activities are major drivers of our future growth.
Today, the U.S. is among the leaders in moving the 4G technology, with the four largest domestic carriers in the process of national LTE deployments right now. However, we believe that access to the broadband data and entertainment services enabled by 4G will be in high demand not only in the U.S. but worldwide.
In some of our 11 served markets, we're already experiencing the following developments. In Germany, LTE has been rolled out first in some rural areas as per local regulatory requirements, but the overall deployment although it started at least a year behind the U.S. Further in countries such as South Africa, Mexico, Brazil and Colombia 3G is still even in the process of deployment while 4G is even in the planning or very early initiation phase. In these types of countries the lag time behind the U.S. schedule is we believe about two to five years.
Then in markets such as Ghana and India voice coverage is still being expanded while 3G service is in the introductory stage. 4G will come down the road. And these types of markets we believe are six to 10 years behind the U.S. schedule. So, as a result, we believe our international presence will lengthen and strengthen American Tower's domestic growth trajectory.
Our management team anticipated this global phenomenon years ago and in preparing for the future our first step was to achieve a doubling of our U.S. assets with the acquisition of SpectraSite in 2005. This move positioned ATC as the first mover in the consolidation of the domestic tower industry and laid the financial and operational knowledge foundation for our ultimate global expansion initiative.
Then beginning in 2007 we established regional teams around the world to explore and cultivate growth opportunities, leveraging our U.S. knowledge base and our early experience operating in Mexico and Brazil. Once again, these teams use their first mover advantage which started six years ago to build leading franchise positions in the most critical and attractive markets in each region. For example, expanding dramatically in Mexico and Brazil, while adding new cornerstone markets such as India, Colombia, South Africa, and most recently, Germany. Moreover, our teams have secured deeply-rooted strategic relationships with some of the world's leading multinational mobile operators, such as Telefonica, MTN, and Millicom, further strengthening our international position.
So, given our geographic strength in mobile operator partnerships, I'd argue that our strategic positioning on the International front is truly exceptional. As a result of our growth prospects in the U.S. and around the world, we've set a new aspirational goal to once again double our asset base and our financial performance over the next five to six-year planning horizon.
Our confidence in striving towards this new goal is bolstered by our Company's progress over the past five years. When we first set our sights on doubling the business at the end of 2007, our tower count stood at 23,000 sites. After five years we more than surpassed this goal by ending 2012 with over 54,000 sites.
So turning to Slide 6, I'll quickly review our Company's consistently strong financial performance over those past five years, beginning with Rental and Management revenue growth of 14.5% cumulative average growth rate as you do see on Page 6.
The next slide shows the 14.2% CAGR in gross margins.
Then Slide 8 shows the 14.1% CAGR in adjusted EBITDA. Moreover, we were successful in maintaining adjusted EBITDA margins at industry-leading levels all along the way.
Then on Slide 9 you can see that AFFO per share has grown nearly 15% per year over this period.
Moving on to Slide 10, we've also enhanced our return on invested capital at the same time.
On Slide 11, you can see that we've also maintained our disciplined capital structure, keeping our financial leverage near the midpoint of our stated 3 times to 5 times range.
Given this consistent track record, American Tower's management team is committed to pursuing our aspirational goal of doubling the business yet again. We expect that much of this growth will be generated organically through our worldwide portfolio of over 54,000 sites.
We also anticipate that our strategic relationships with our key customers around the globe should support a construction program of 2,000 to 3,000 sites per year, and that our significant cash flow generation capabilities should in turn enable us to choose to invest in additional acquisitions that meet our investment criteria or to repurchase shares during periods during which available asset prices and quality may not meet our standards.
Our management objective is to deliver mid-teens growth and AFFO per share for our investors as we strive to double the business again over these next five years.
At this point, I'll turn it over to Tom to describe in detail the Company's fourth-quarter and full year 2012 performance and our outlook for 2013. Following that, we'll take your questions. Tom?
Tom Bartlett - EVP and CFO: Hey, thanks Jim, and good morning, everyone. We finished 2012 on a high note and believe we have positioned ourselves to have a solid 2013, reflecting both a strong global demand backdrop as Jim just laid out for tower space and the operational performance of our employees.
If you please turn to Slide 13 of our presentation, you will see that both our Domestic and International segments had another strong quarter in Q4. Our U.S. reported Rental and Management segment revenue increased by 7.5% and nearly eclipsed to $500 million mark for the first time in American Tower's history.
On a core basis, which we will reference throughout this presentation as reported results excluding the impacts of foreign currency exchange rate fluctuations, non-cash straight-line lease accounting and significant one-time items, growth was 9%. The majority of sites acquired during the quarter closed in late December. So, the revenue contributions from those transactions were relatively modest through our quarterly results.
Finally, core organic growth, which reflects core growth on sites that have been in our portfolio for at least one full-year, was 7.6% in the fourth quarter. During the quarter, signed new business, which is a leading indicator of future revenue commencements, was at levels well over recent highs. In addition, churn continues to decline and was only 1.2% during the quarter.
Turning to our International segment results, reported fourth quarter rental revenue growth was over 36% with core growth coming in at nearly 45%. Core organic growth was over 13%. Our International segment growth was positively impacted by the launch of our operations in Germany in early December, which contributed about $4 million to the quarter.
Our reported consolidated Rental and Management revenue increased by over 15% to $740 million in the quarter, with core growth of over 19%. This growth was composed of core organic revenue growth of about 9% which was driven by strong new business commencement activity on our existing sites, with the balance of our core growth attributable to the more than 14,000 new sites we had added to our portfolio since the beginning of the fourth quarter of 2011. About 90% of these new communication sites are located in our international markets and have an average tenancy ratio in the low 1s. Consequently, we expect there to be significant future new business demand for these sites over the next several years.
Turning to Slide 14, our reported adjusted EBITDA growth relative to the fourth quarter of 2011 was nearly 17%, with our adjusted EBITDA core growth for the quarter at about 20%. Reported adjusted EBITDA increased by about $71 million in the quarter, primarily as a result of an increase of roughly $115 million in total revenue, which was partially offset by an increase in direct expenses, excluding stock-based compensation expense of about $29 million, including a $19 million increase in International past due cost. Our direct expense growth during the quarter was favorably impacted by a one-time item in the U.S. of approximately $5.7 million related to land rent expense.
Finally, SG&A, excluding stock-based compensation expense increased $14 million from the year ago period, driven in part by our international expansion initiatives as well as investments we've made in our Domestic business. For the quarter, our adjusted EBITDA margin was 65% as compared to approximately 66% in the year ago period. Excluding the impact of international pass-through revenue, our adjusted EBITDA margin for the quarter was about 71% and our adjusted EBITDA conversion rate was nearly 75%.
During the quarter, adjusted funds from operations or AFFO increased by approximately $13 million or about 5%, relative to AFFO in Q4 2011. This reported growth was impacted by several items, including about $15 million in one-time international cash tax payments, primarily related to withholding taxes and audit settlements, approximately $6 million related to one-time start-up CapEx in our new international markets, and the impact of foreign currency exchange rate fluctuations. Adjusting for these items, core AFFO growth was about 12%.
Now moving on to Slide 15 and discussing our full year 2012 results, the performance of our rental management business, both in our Domestic and International segments was also ahead of our original 2012 plans. Our Domestic Rental and Management segment reported revenue grew 11.3% to over $1.94 billion, our Domestic segment core revenue growth was just under 10%, and our core organic growth for the year was more than 7%. This growth was driven primarily by the strong lease-up environment we saw all year in the U.S. as the carriers led by AT&T and Verizon continue to be extremely active in rolling out next-generation wireless networks.
Similarly, as a result of the nearly 18,000 sites we have added to our international portfolios since the beginning of 2011 and the associated impacts of increased pass-through revenue as well as record levels of organic new business, our International Rental and Management segment reported revenue increased over 34% to $863 million, with over 50% core revenue growth for the full year. Core organic growth in our International segment was 13.6%. In 2012, our international pass-through revenue was $229 million, reflecting an increase of about $53 million.
On a consolidated basis for the year, reported Rental and Management segment grew 17.5% to a reported $2.8 billion, with core revenue growth of over 21% and core organic revenue growth of over 8%.
Turning to Slide 16, for the full year 2012, our adjusted EBITDA growth relative to 2011 was about 18.6%, with our core adjusted EBITDA growth at over 21%. Our adjusted EBITDA margin was about 65.8% and our adjusted EBITDA conversion rate was 69%. Excluding the impact of pass-through our adjusted EBITDA margin would have been about 72%. In addition, AFFO increased by $143 million or 13.5% relative to AFFO in 2011 and 13.6% on a per share basis. Core AFFO growth was nearly 19%. AFFO growth in 2012 was driven by our adjusted EBITDA growth partially offset by increased cash interest expenses associated with the funding of some of our growth initiatives. This strong adjusted EBITDA and AFFO growth reflects our continued commitment to driving long-term cash-based returns through accretive asset acquisitions and leashing up existing sites.
Turning to Slide 17, we deployed nearly $570 million via our capital expenditure program in 2012, split about evenly between our Domestic and International operations. Some highlights of our capital deployments in 2012 include nearly $280 million spent on discretionary capital projects associated with the completion of the construction of nearly 2,400 sites globally. Of these new-builds 250 were in the U.S. with the remainder throughout our international markets. In addition, we continue to utilize our discretionary land purchase program in the U.S. to acquire a land interests under our existing towers in 2012 and spend over $80 million to purchase more than 500 land parcels under our sites during the year. We also meaningfully extended the terms of another 500 leases. The fourth quarter represented an unprecedented level of activity in our land program and as of the end of the year we owned about 29% of the land under our sites and have the remaining leased term of over 22 years on the balance of our land leases. We were able to leverage our experienced teams to close these transactions at attractive multiples original budget of $100 million.
Acquiring land parcels has historically led to a reduction of about 2% to 3% in our land rent expense growth per year and we will continue to selectively acquire land when we can meet our risk adjusted hurdle rates while also proactively extending our end of term maturities. From a total capital allocation perspective, we deployed nearly $3 billion including REIT dividend distributions of about $356 million to shareholders nearly $570 million on capital expenditures and about $2 billion principally for the acquisition of nearly 6500 communication sites globally. Finally, we spent about $46 million in the fourth quarter to repurchase shares of our common stock bringing full-year total repurchases to approximately $63 million pursuant to our stock repurchase program.
Moving on Slide 18, I like to spend a few minutes walking through how we expect the capital we spent on 2012 acquisitions were to translate into revenue, tower cash flow and AFFO in 2013 and beyond. In 2012 we acquired nearly 6500 sites, 713 in the U.S., the remainder in a number of international markets including our new Ugandan and German markets. On an annualized basis, we expect these sites which have an average of about 1.3 tenants to generate approximately $200 million in revenues, a $130 million in tower cash flow, and about $50 million in AFFO. On a consolidated basis, the acquisition price for these transactions equates to a year-one tower cash flow multiple of about 14.5 times or an NOI yield of about 6.9%. Our day one average multiple was a bit higher in 2012 compared to past years given a greater proportion of U.S. sites in the mix. We continue to believe that these types of results demonstrate our ability to pursue value-creating investments through our capital allocation process, and given the lower current tenancy, expect these sites to generate growth in future years.
Turning to Slide 19, I'd like to begin our 2013 outlook discussion with an outline of our expectations for Rental and Management revenue growth. Consistent with past practice, these numbers only include sites in our portfolio as of today, which includes the 883 sites we acquired in Mexico earlier this year, plus our expected 2013 build program. So these numbers do not include any additional pending acquisitions.
We currently expect that our full year Rental and Management segment reported revenue will increase from $2.8 billion in 2012 to between $3.16 billion and $3.21 billion in 2013, representing year-over-year growth of $382 million or nearly 14% at the midpoint, and core growth of approximately 16.5%. The overall increase in total Rental and Management revenue can be broken down further into a number of discrete items.
First of all, about 4% of the growth will come from our contractual rent escalations from our existing tenants, which represents about $95 million of incremental cash revenue. Second, at the midpoint, we expect approximately $160 million of our revenue growth will be generated from new business, including new leases and amendments on existing sites. In addition, we expect that about $210 million at the midpoint of our revenue will result from the incremental impact of our new sites which we built or acquired since the beginning of 2012 and includes our expectation that pass-through revenue attributable to our new sites will increase about $56 million.
We estimate the consolidated churn will be about 1% and offset revenue growth by about $38 million. The holistic MLA structure that we have in place with three of our top four customers in the U.S. is helping to keep Domestic churn low.
Finally, we estimate that the net impact of our non-core revenue will negatively impact our growth in 2012 by about $45 million which is primarily attributable to the impact of an approximately $30 million year-over-year reduction in straight-line revenue and the non-recurrence of several favorable one-time items in 2012. We currently expect minimal FX impacts on our results in 2013.
Moving on to Slide 20, we expect our Domestic Rental and Management segment reported revenue to grow about 7.2% via mostly organic growth. We're projecting core growth in our Domestic segment to be over 10%. Embedded in our Domestic Rental and Management revenue segment outlook is our expectation that the very positive leasing environment we saw in 2012 will continue in 2013 as all four major carriers aggressively deploy 4G. In addition to a high level of confidence we have in revenue growth through the contractual provisions in our holistic MLAs, we think we are well-positioned to capture incremental revenues above and beyond those agreements. As you would expect, we have not included any potential contributions from DISH, Clearwire or a national safety network build-out in our outlook numbers.
Turning to our International Rental and Management segment, we expect reported revenue growth of over 28%, with core revenue growth of almost 30%, and core organic growth of nearly 10%. Throughout our international markets, we expect the strong leasing trends we saw in 2012 to carry over into 2013, as carriers deploy newly acquired spectrum and further their investments in wireless data.
In Latin America, we expect companies such as Telefonica, and America Movil to remain active in their 3G overlays. In India, we expect the large incumbent provider such as Vodafone, Idea and Bharti to increase their network investments as the regulatory and competitive environment improves. In our three African markets we continue to see strong demand trends, both in Uganda and Ghana, where the focus is still on voice networks and in South Africa, where wireless data is becoming a reality.
Finally, we expect our German assets to perform well in 2013 as carriers begin their government mandated rural 4G build-outs.
Turning to Slide 21, we currently expect our reported 2013 adjusted EBITDA to increase over $210 million at the midpoint to between $2.08 billion and $2.13 billion, representing reported growth of over 11% and core growth of 14.8%. This reflects the strong rental revenue growth I spoke about earlier as well as consistent year-over-year performance in our services segment. In addition to driving revenue growth, we continue to remain focused on controlling costs in our business and our outlook for adjusted EBITDA reflects a gross margin conversion rate excluding the impact of increases in pass-through revenue of about 78%. In addition, cash SG&A is expected to come in under 10% of total revenue as we continue to leverage the investments we've made in SG&A over the last several years. We expect SG&A as a percent of revenue to trend down over the next several years as we gain incremental scale in our served markets.
We are also introducing our 2013 outlook for AFFO of $1.385 billion at the midpoint representing growth of over $185 million or 15.6%. On a core basis, we expect AFFO to grow by over 16%. Our outlook for AFFO reflects our growth in adjusted EBITDA and is impacted by the carryover of about $20 million in startup maintenance costs in Colombia, Ghana and Uganda.
In addition, as we highlighted for you last quarter, we anticipate that our U.S. maintenance CapEx in 2013 will include about $15 million in spending on a network operation center and lighting upgrades for certain towers. Once completed, we expect annual OpEx savings of up to $4 million as a result of these projects. Our goal is to continue to deliver mid-teen AFFO growth as our sites continue to produce increasing levels of cash flow.
Moving on to Slide 22, in 2013 we expect to continue to carefully deploy our capital to our capital expenditure program and selected acquisitions. We currently plan to spend between $550 million and $650 million in CapEx during the year which includes the construction of between 2,250 and 2,750 new sites. In addition, we spent approximately $250 million on an acquisition in January and are continuing to evaluate additional acquisition opportunities. Given our build plans for 2013 and the acquisitions we just closed, we currently expect to have about 58,000 sites by year-end.
Finally, in 2013, our primary method of returning capital to stockholders is expected to continue to be our regular. The amounts and timing of our dividend payments are at the discretion of our Board. But our goal is to deliver annual dividend growth in the 20% range over the next five year as we discussed last quarter. In addition, as a part of our REIT planning we expect to bring one or more of our international operations into the QRS structure during the first half of 2013. Principal reason for this event is that this is likely to drive additional cash tax benefits in local markets.
Turning to Slide 23, I'd like to spend a moment to highlight a few points in our balance sheet. We ended the fourth quarter of 2012 with the last quarter pro forma annualized net leverage ratio of about 4.1 times which reflects a full quarter adjusted EBITDA impact from the acquisitions we closed in the fourth quarter. We continue to believe that we maximize the value of our firm by managing our capital structure within our stated target leverage range of 3 to 5 times net debt and more specifically, around the 4 times level.
We expect to continue to manage our capital structure consistent with these ranges. In January of 2013, we completed a 3.5% $1 billion senior unsecured note offering and used the proceeds to pay down existing indebtedness under our credit facilities. This demonstrated our ability to opportunistically access the capital markets at very attractive rates and we are continuing to evaluate refinancing options to further optimize our capital structure. We currently have liquidity of about $2 billion and believe that we are well positioned to continue to utilize our strong stable balance sheet to fund incremental, profitable growth for our business while maintaining our leverage within our targeted range.
Turning to Slide 24, and in summary, I'd like to spend a few moments just recapping our key milestones in 2012 and outline some of our goals for 2013. In 2012, we delivered solid growth in our key revenue, adjusted EBITDA, and AFFO metrics. In addition, we continue to invest in our business by adding nearly 9,000 sites to our portfolio while entering two new markets. We invested nearly $3 billion globally during the year, which included returning more than $400 million to our shareholders.
We continue to believe that these investments have positioned American Tower and our shareholders to benefit from the rapid worldwide adoption of wireless services for many years to come.
As evidenced by the outlook we've issued today, we believe that 2013 will be another very solid year, driven by strong demand for our communications real estate throughout our global footprint. In combination with our longer tenured assets, we expect that more than $9 billion investments we've made over the last five years to drive compelling cash returns in 2013.
Finally, we will continue to carefully manage our balance sheet and to seek to opportunistically access the capital markets at favorable rates as we seek to make incremental investments in growth.
Thank you for joining us on the call today, and operator, we'll now open the line for questions.
Operator: Phil Cusick, JPMorgan.
Phil Cusick - JPMorgan: Could I get a sense of how Germany slots in your international portfolio before, I guess, you had said that South Africa, India, and Brazil are kind of anchor countries. Where does Germany fit in there?
James D. Taiclet, Jr. - Chairman, President and CEO: Yeah, Phil, it's Jim. Germany fits exactly in the same category. It's we think the best market with respect to geopolitical and macroeconomic characteristics, of course, therefore it – multinational wireless carriers there, KPM is our counterparty, but we also obviously have business already with the other three, which are T-Mobile, Vodafone and Telefonica. So, it's really right down the middle for us as an anchor store market, so to speak, in the European region.
Phil Cusick - JPMorgan: And of your, I guess, guidance like 2,000 builds, can you give us a sense of where that would break out to, kind of what countries we should see more builds-in (indiscernible)?
Tom Bartlett - EVP and CFO: Yeah, I mean, Phil, like in – this is Tom – in 2012, I would expect the U.S. to be probably north of what they did in 2012, probably in the 300 range. We're building significantly as we have been in India, so we're probably building in 100 per month kind of range. We would expect a little bit of a tick-up in Latin America as we're seeing more 3G being deployed in those markets with the balance in Africa.
Phil Cusick - JPMorgan: And I guess, kind of final quick one, in terms of SBA entering Brazil, do you expect any changes or difficulty growing in Brazil now with another competitor?
Tom Bartlett - EVP and CFO: No, not at all.
Operator: David Barden, Bank of America.
David Barden - Bank of America: Hey guys, thanks for the color and all the detail. Tom, just last year you guys were able to map out kind of a very specific range for dividends which was helpful because of the moving parts that AMT has with some of NOL coverage of the income and obviously, that guidance helps the market kind of peg where the rates could come out. I know you said five-year growth in the 20% range for dividends but if you had anymore color for the plan for 2013 would be helpful. Then the second question was just kind of digging into the core growth numbers, especially for the Domestic business guys. Obviously, those numbers are going to be benefited in the fourth quarter and in 2013 by the kind of acquisition portfolios. If I was going to look at same-store sales growth for the Domestic business, could you kind of share with me what did the fourth quarter look like, what are you embedding same store sales growth for your towers into the 2013 would be helpful.
Tom Bartlett - EVP and CFO: David, that's an easy one. I mean, if you take a look at the chart (page number) that's talking about the Domestic revenue growth, that core organic growth metric that we talk to is exactly what you're referring to is the same store tower. It's the growth on those towers that we've owned for at least a year. So, I think that that is same tower growth. It's been in kind of the 7.5% range. In 2013, we're looking at 7.4% core organic growth. The overall core organic growth is a bit higher because of the decline we see in straight-line in 2013 versus 2012. But we've always talked about kind of core organic growth in the U.S. in that 6% to 8% range. We're smack in the middle of that for 2012 and 2013. And the International core organic growth would be 200 to 300 basis points higher. And 2013 outlook is right at 10% core organic growth in our international markets. So, it's consistent with what we've seen and what we would expect. On the dividend question, I mean it's subject to the discretion of our Board, obviously. What we had said last quarter, or what we had said at this same time last year, and the reason that I gave guidance out on, was that there were a lot of moving parts; it was our first year to pay a dividend. And so, I know it was very difficult for investors to understand exactly where that number would be, so we'd laid it out at the $0.80 to $0.90 and ended up at $0.90 in terms of dividend or the $355 million. So that's why the last quarter earnings call we talked about it being a 20% growth over the next five years and hopefully that will give people the right expectation of what they should expect the 2013 through '17 dividends to be, but even specifically, 2013.
James D. Taiclet, Jr. - Chairman, President and CEO: David, the other way to get to it as a confirmation is, we continue to sort of guide to 100% payout of U.S. taxable income and you can project that way as well, but it should be a pretty fairly predictable and stable dividend flow.
David Barden - Bank of America: And if I could just one last kind of housekeeping item; obviously the new market expansion expenses and CapEx were kind of a recurring one-time adjustment that we've been working through in '12, could you kind of map out how we should be thinking about '13 for those expenses in the run rate?
Tom Bartlett - EVP and CFO: Yeah, when we talked about kind of another $20 million of start-up CapEx in 2013 from Uganda, Ghana and in Colombia, and we would expect it then to level off. We have some additional maintenance CapEx that we're spending in our U.S. operations relative to the knock, and as I mentioned, the lighting systems of about $15 million. But if we didn't go into any new markets, you would expect that maintenance CapEx to really just grow if the incremental towers that we would in fact be building. So, we would expect that to tailor off.
James D. Taiclet, Jr. - Chairman, President and CEO: And Dave, even though we have mentioned it on three or four calls, it is the three same markets the whole time, right, the less developed Uganda, Ghana and Colombia. So, those are the types of locations where we had to upgrade some of the sites to meet our specifications, but in countries like Germany we don't have that issue whatsoever and we did in South Africa either. So, those are the ways to kind of we look at this to know that this is not an ongoing recurring issue.
Operator: Simon Flannery, Morgan Stanley.
Simon Flannery - Morgan Stanley: Jim you had mentioned, some interesting commentary about the importance of densification around voice-over-LTE and video. And as we see Verizon and AT&T concluding a lot of their kind of their initial coverage, how are we starting to see that move to that second-level of densification, is that something that is going to be a material factor exiting 2013 or is that more of a 2014 factor?
James D. Taiclet, Jr. - Chairman, President and CEO: It will probably begin layer in in 2013 with certain carriers and the onto 2014 and beyond. And the way that the engineering community kind of refers to this as Phase 1 build Phase 2 and Phase 3. So, Phase 1 build we expect to be done and again Phase 1 is dominated by overlays on existing sites which is driving most of the tower industries 4G business right now. Verizon and AT&T are the two leaders in this deployment schedule so to speak. Our expectation is Verizon will have Phase 1 essentially complete which in our view is 300 million POPs or more covered by the end of 2013. AT&T, our expectation is they will be in the same situation again 300 million POPs covered by year-end 2014. And then Sprint and T-Mobile will probably get there. Our estimation again is about – by the end of 2015 there will be 300 million POPs respectively. So, as you sequence those Phase 1 schedules out, Phase 2 tends to follow very quickly after and so, you'll see throughout to the end of 2015 overlaps between Phase 1 and Phase 2 among the carriers and in Phase 2 you do start to see the densification happening.
Simon Flannery - Morgan Stanley: What sort of – do you think that's enough growth to continue the same sort of trajectory, the high-single-digit organic that we've been seeing for the last couple of years?
James D. Taiclet, Jr. - Chairman, President and CEO: We do think so and it's a matter of a combination of consumer demand and the carriers, the wireless carriers' ability to meet that demand profitably and we think as long as those two things continue to happen, given the competitive dynamic in the U.S. and really most of the other markets we're in, you're going to see active network deployment to stay competitive among the carriers and in the U.S. that's been justifying about $25 billion to $30 billion of CapEx over the past few years annually, as you all know and we think that's fully justifiable in the next few years as these companies continue to roll out. It's really important to note only about 10%, as I said, of handsets out there today or less than 10% in the U.S. are 4G LTE. One of the things our technical advisors have provided to us is, when they compare a 3G phone's monthly network burden to a 4G phone's monthly network requirements, it goes up by 5 times from 3G to 4G per month. So, when you start going from 10%, to 20%, to 30%, 40%, 50% of penetration of these phones that are using 5x capacity, you're going to have to keep investing in your network.
Operator: Jason Armstrong, Goldman Sachs.
Jason Armstrong - Goldman Sachs: Maybe a couple of questions. First on the 2013 guide just as we think about the progression through the year; is there anything that would make this year different as it relates to frontend or backend loading and pacing of the guidance? Then second question, Tom I think you've got from CMBS that callable in the May-June timeframe, to what extent was that built into the AFFO guidance in terms of refinancing that at lower rates?
Tom Bartlett - EVP and CFO: Sure, Jason. In terms of the loading, obviously, pretty consistent with 2012. It was pretty well even throughout the year. I think it was maybe 45% in the first half, 55% in the second half. I would expect the similar kind of trends, probably more along 50-50, so pretty even throughout the year. With regards to the financing, as I mentioned earlier, we've based our guidance based upon the towers that we had on hand and kind of the balance sheet that we on hand. So, the answer is, no. We haven't reflected any changes in our future funding, or the benefits or the impacts of refinancing of anything on our balance sheet.
Operator: Jonathan Atkin, RBC Capital.
Jonathan Atkin - RBC Capital: I was interested in the international core organic growth. You gave an estimate of 10% and if you could maybe highlight among your largest international markets which ones you see performing strongest relative to that 10% bogie. Then also on international, with regards to the possible use of MLA structures, you talked about the use of holistic MLAs in the U.S. and to what extent might you use that internationally going forward?
James D. Taiclet, Jr. - Chairman, President and CEO: Jonathan, it's Jim. Our most active markets in 2012, I'd put South Africa right at the top of the list, incredibly busy, leasing environment with Telcom which is the government sponsored carrier; Vodacom and MTN, all deploying 3G data at a pretty rapid rate. We were, again, first mover commercial leasing company in South Africa with our Cell C acquisition, and the timing happened to be very fortuitous for us on that one. In addition to that, in Latin America, both Brazil and Mexico drove excellent new business. Both of them had Nextel deploying 3G aggressively. But in Brazil, you also had America Movil, Telecom Italia and Oi filling out their 3G networks as well on a pretty rapid pace. All four of them – actually all five of those carriers in Brazil are trying to get ready for the World Cup and the Olympics and there is some requirements for them to have coverage for those events that are pretty extensive. In Mexico, Telefonica was also very active along with Nextel as they try to stay competitive with Telcel in 3G. So, those are a few examples. Then, the last one I'll offer is Colombia, another really good surprise almost for us that our timing was fortuitous in that. Again, 3G starting to roll out a Company called Uni; has a 4G network rollout that started and the two major incumbents are again couple of our big multinational customers which are Millicom and American Movil there as well as Telefonica. So, those are some of the real highlight markets for us. For 2013, we think India is going to step right back up again once the spectrum auctions are completed in August – or, sorry, in March rather, of this year, and you will see there is the major carriers with the financial capacity, we'll have the additional spectrum in hand to go ahead and keep deploying their networks which is the right answer over there. Finally, on the MLA front, first of all, I want to clarify everyone's understanding of what this holistic MLAs really are really quick. These master lease agreements aggregate all of the existing individual contracts for a given carrier under a very specific set of rights, they are not capped; they are not all-you-can-eat. Whenever those rights are exceeded in some of the parameters include additional equipment on towers above limits, they include types of spectrum that aren't in the original rights. They are going to number of towers that you don't have included in the deal. So, for example, T-Mobile has only got half of its sites with us in the holistic deal. There are lot of parameters that can be exceeded, those parameters tend to have been based by mutual agreement with us in the carrier on the carriers original build out assumptions. And if those build out assumptions which say often sue get exceeded because customer demand is greater or because technical specifications didn't quite get met by the OEM, et cetera, you are going to see and we are seeing fairly extensive over and above amendment billing that's going on with essentially all of our holistic deals right now. So, just to clarify that is the structure it tends to be useful when there's a lot of amendment activity going on. So, we don't have these deployed yet in our international markets because 95% of our new business in the last quarter in the international markets was charge-offs-locations and new leases. So there will be a time when we will be able to apply these holistic agreements in the more advanced markets that will probably be in the next few years though.
Jonathan Atkin - RBC Capital: And then finally on International, we talked about bringing in one quarter more markets since the QRS and can you talk a little bit about the, I guess the savings at the local level that you would have hoped to realize from that?
Tom Bartlett - EVP and CFO: Yeah, I mean, the – actually, Jon, just want to add to Jim's comments first of all on the kind of core organic growth. Also, keep in mind that almost half of that core organic growth that we see having in the international markets is coming from escalations. So, as we continue to build and build out new markets there, we have that constant escalator that continues to give us our advantage, if you will, in those markets for growth. Relative to the REIT structure, we'll look, first of all, in our mature markets, if you will, in terms of who we would be bringing into the REIT. There is a technical nuance really within the kind of the REIT structure that to the extent that we have it in our REIT we're able to re-characterize the debt in the local markets and as a result, potentially have a higher rate of interest in those markets. So, that's what's really driving the cash tax benefit in those markets and it can be up to $5 million to $10 million in 2013 for us depending upon the timing in the market that we bring in, but we think that that justifies bringing it back into the REIT.
Operator: Brett Feldman, Deutsche Bank.
Brett Feldman - Deutsche Bank: I actually want to go back to clarify the mass release that we missed up that Jim was just talking about to make sure I understand this. We're so aware of the heavy level of activity on towers now being driven by the upgrades, but I think as you were pointing out, all of that upgrade – well, not all of it, but a lot of it is covered in the MLAs, meaning that it sort of irrelevant how much activity there is. Isn't that correct that your MLAs are really dictating pacing of your new revenue maybe more so than the actual activity levels?
James D. Taiclet, Jr. - Chairman, President and CEO: I think that's a fair characterization among the big four – three of the big carriers that have the holistic agreements. We feel that's good news which means the trajectory of the revenue growth from those three carriers is – first of all, it's positive and second of all it has a floor on it. The most important specific benefit in that regard on this agreement spread is that American Tower has zero iDEN churn exposure in the next number of years because of the agreement we have with Sprint. So, we've eliminated all iDEN churn. We have a minimum revenue ramp growth rate with those three customers, which as I have pointed out; we are adding over-and-above revenues in all those cases at some level on those.
Brett Feldman - Deutsche Bank: Sorry to interrupt you, I was just – the reason I asked is, some investor point out like this is sort of a peak activity year, because upgrades are so intense, but as we get through the upgrades and we get to the point which we think we're going to get to, as you referred to, is phase two, where carriers start adding new sites again, that activity is generally above and beyond what's contemplated in the MLA. So, could we see a scenario where activity goes down because upgrades are lighter but the amount of activity that creates new revenues goes up, or do I misunderstand how the MLAs work?
James D. Taiclet, Jr. - Chairman, President and CEO: I don't think you're misunderstanding it, but I do think the carriers are going to take advantage of the rights they do have, and frontloading them benefits us and actually benefits them – benefits them because they can get the signal out faster if they kind of frontload the activity that you're talking about on our towers with the holistic agreements, but also the phase two and three of refreshes will also go first, we hope, on our towers as well. So, there's a kind of a mutual benefit to having holistic agreements which allow for in theory the complete set of additional equipment you need on existing towers over a period of years right for us, so that's what the holistics are designed to do. They are not designed to meet your phase two requirements, right? So phase two requirements once you're going to start between a year and three years from now, your hypothesis I think is correct, is that can be incremental business to ATC under these agreements, but then again, there is a schedule to the holistics as well. We're working with our carriers to synchronize that they get increasing value for increasing tower lease revenue to us over time and we're trying to work with them so that that's both fair and benefits ATC.
Operator: Batya Levi, UBS.
Batya Levi - UBS: Just a follow-up on the last question. As we see the carriers approach the end of phase one, do you anticipate that they will continue to spend on 3G capacity to support the higher usage that they have or do you envision 3G spending to be completely replaced by 4G going forward?
James D. Taiclet, Jr. - Chairman, President and CEO: What's I think beneficial about our holistic agreements is it doesn't matter to us, right? So, you have, as a carrier, rights to so many antennas, so many lines, so much ground space for existing contract with us under these holistic agreements, therefore we're agnostic as to whether that equipment is 3G or 4G. At the bottom of it all, we do think depending on the deployment schedule, there will be carriers that we've been talking about they're going to have to continue to invest in 3G as they do their handset change-outs over the years because again, all-in, it's less than 10% 4G handsets right now. So, 80% to 90% of what's going on out there is still being covered by 3G. Those usage per month numbers are also going up. So, again, your hypothesis I think is correct; there'll be 3G investment but hopefully that will add to this over-and-above opportunity for us with some of these carriers.
Operator: John Stewart, Green Street Advisors.
John Stewart - Green Street Advisors: Jim, when you're looking at doubling the business over the next five years, can you give us a sense for what that mix between acquisitions and organic growth would look like and also what do you think is the opportunity in Europe?
James D. Taiclet, Jr. - Chairman, President and CEO: I think rough parameters would be we could probably get half way there as far as doubling the financial performance of the business with our organic growth opportunity. Another, call it, 10% to 15% or more was built-to-suit activity and the balance could be mergers and acquisitions. That's the way to double essentially the AFFO over five to six-year timeframe, those can be some of the major ingredients.
John Stewart - Green Street Advisors: And Europe?
James D. Taiclet, Jr. - Chairman, President and CEO: I'm sorry, could you repeat that portion?
John Stewart - Green Street Advisors: Just what's the opportunity set to expand in Europe?
James D. Taiclet, Jr. - Chairman, President and CEO: That will be a characteristic of the situation with the carriers in each country and their willingness to divest towers at prices that we'd be willing to pay. We've got a team in Europe for five years now, and we did our first deal two months ago. That could be the opening of other carriers coming to the same sorts of asset price points that we can find attractive or it may not be. So, it's really just a complete function of the opportunity set as these carriers reconsider ownership of towers and they'd be willing to part with those towers for.
John Stewart - Green Street Advisors: Did I understand you to say that one half of T-Mobile sites are covered under the MLA?
James D. Taiclet, Jr. - Chairman, President and CEO: Yeah, that's right. Half of the sites are under the T-Mobile MLA and if they need to exceed that, there'll be another renegotiation conversation, which I'm sure will be constructive if they need it between American Tower and T-Mobile.
John Stewart - Green Street Advisors: What's the percent of covered sites for the other two major carriers?
James D. Taiclet, Jr. - Chairman, President and CEO: They are 100% of the existing sites at the time we signed the agreements. Just to clarify that, they don't include build-to-suits since then, they don't include acquired tower that we brought since then in the United States.
John Stewart - Green Street Advisors: One quick follow-up for Tom. Could you explain for us what land rent one-timer was during the quarter and then sorry if I missed it, but what's the budget for land acquisitions in '13?
Tom Bartlett - EVP and CFO: Yeah, first of all, the budget for land acquisitions in '13 is around $100 million. In terms of the particular item, we looked at a transaction that we had done recently and we just adjusted the (lives) on that particular transaction and as a result, generated a one-time benefit in the quarter.
Operator: Kevin Smithen, Macquarie.
Kevin Smithen - Macquarie Research: You have a high level new-builds in your 2013 guidance. I was wondering if you could go through roughly what the CapEx per new tower built is by region in Europe, Africa, LatAm, U.S. and India? And do IRRs differ on builds versus buys in each region?
Tom Bartlett - EVP and CFO: First of all, just on the – for 2013, I mean, the builds, it's pretty consistent with 2012, a little bit of an uptick, but not significant. There absolutely a significant amount of opportunity for us for builds throughout the globe. In terms of the CapEx, as you well know, they do vary significantly by market. In the United States they are kind of in the $250,000 range, to Latin America they are probably in the $175,000 range, to India they are in the $50,000 to $60,000 range, and in Africa they are probably in the $190,000 to $200,000 range. On the IRRs, that we're looking for with regards to capital that we're spending in those markets, it's consistent with the IRRs that we're looking and to be consistent with when we're doing a deal. So if you take a look at the United States, we're looking at high-single-digit, kind of cost of capital and in Latin America it's 300 plus basis points on top that; in Asia it's 400 on top of that; and in Africa it's 500 to 1,000 depending upon the markets that we'd be looking on top to that. Yes, the IRRs on a build-to-suit day one are generally higher than they are in the acquisition side and that's why it's kind of our after paying a dividend, that's the first place that we'd like to put our capital.
Kevin Smithen - Macquarie Research: Can you give us an update on average tenants per site for the different regions?
Tom Bartlett - EVP and CFO: In the international markets right now, it's about 1.5 times. In the U.S. markets, it's like 2.6. So, overall, it's about 2 times. In our Asian markets it's up in the 1.7 kind of range. In our African markets, it's probably in the 1.4 range, if you will, getting into some of those markets with single tenant towers out of the gate. In Latin America, we've picked up some single tenant towers there and it's probably in the 1.5 times. In Germany, it's about the deal that we had just done; it's in the 1.6 to 1.7 times.
Operator: Ric Prentiss, Raymond James.
Ric Prentiss - Raymond James: Couple of parts. If you think about the growth, organic growth, I think you mentioned that Clearwire, DISH, and FirstNet are not in the '13 guidance. We've been hearing that Clearwire is starting to show up on their 2,000, 5,000, 8,000 build plans, so just want to confirm, Clearwire is not in your guidance and could be some upside if they were to continue on the external growth side of the growth. Appetite for carriers to sell towers around the world; you had a very successful year in 2012 adding them. It sure feels like Latin America carriers are getting it as far as colocation and selling towers; I just want to make sure we're right on that. On straight-line adjustment, pretty significant drop from '12 to '13, combining revenue and expense, looks like a negative 132 going to a negative 104, just want to make sure, as we think forward into '14, '15, is it that same kind of level of drop that we should see? And one quick one, NOL is kind of what did we do from 2011 to 2012 NOL; long laundry list, but I don't think they're too…?
Tom Bartlett - EVP and CFO: How many questions do you get to ask?
James D. Taiclet, Jr. - Chairman, President and CEO: I think Barden and Richard got a bunch in the beginning. Anyway.
Tom Bartlett - EVP and CFO: Let me – I didn't write it all down, so let me hit a couple of them and then you'll, I'm sure, filling the pieces of ones that we haven't answered. Relative to NOLs, we spent – probably, we utilized just under $200 million in 2012. I would expect 2013 to be somewhere between $200 million and $300 million of NOL is utilized. So that was that question. Relative to straight-line, as you said, we had an uptick in 2012 of about $25 million, about $30 million decline, as you pointed out, in 2013, and probably normalized going forward, kind of that consistent level of decline given the contracts that we have in place and that will largely be offset by the cash escalators that we see going forward. What else did you have on the list there Ric?
Ric Prentiss - Raymond James: Organic growth, Clearwire; I think I heard it's not in the guidance, but we're seeing (indiscernible) to show up, just wondering what was in there.
Tom Bartlett - EVP and CFO: That's right. It's not in the guidance and they currently represent a relatively small piece of our overall revenue. If we see some meaningful uptick that would impact guidance, we'll reflect it there. But there is no really impact of any Clearwire activity in the guidance as we speak.
James D. Taiclet, Jr. - Chairman, President and CEO: Finally, I can give you a break, Tom. On the willingness of wireless carriers around the world to sell tower assets, it's increasing, on one hand. It's not increasing across the board with every multinational coming to the same conclusion at the same time. But we do believe that there will be opportunities and activity in pretty much every region that we're operating in and we will use our standard evaluation process to determine if any of those assets should trade to us. If we meet our criteria, you'll see us act and if we don't, you may not see a trade or someone else may get it. But I do think it's something that many carriers are considering, Ric, but they also view it as important and strategic and that attitude moves over time and not necessarily instantly to sell.
Tom Bartlett - EVP and CFO: I think that concludes our call this morning. Again, really appreciate the time you've spent with us and to the extent that you have any follow-up calls, please give Leah or myself a call. Thanks again.
Operator: Thank you for your participation. This does conclude today's conference call. You may now disconnect.