Ladies and gentlemen, thank you for standing by, and welcome to the SBA fourth quarter results call. At this time, all lines are in a listen-only mode. Later, we will have a question-and-answer session. If you'd like to queue up for a question, please press one then zero at any time during today's call. As a reminder, today's conference is being recorded. I'd now like to turn the conference over to Vice President of Finance, Mark DeRussy. Please go ahead.
Good evening, and thank you for joining us for SBA's fourth quarter 2021 earnings conference call. Here with me today are Jeff Stoops, our President and Chief Executive Officer, and Brendan Cavanagh, 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 2022 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, February 28th, and we have no obligation to update any forward-looking statement 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 it over to Brendan to discuss our fourth quarter results.
Thanks, Mark. Good evening. SBA finished 2021 with our best quarter of the year. The quarter included financial and operating results ahead of our expectations and continued strong momentum into 2022. Total GAAP site leasing revenues for the fourth quarter were $539.4 million, and cash site leasing revenues were $529.8 million. Foreign exchange rates were generally in line with our previously forecasted FX rate estimates for the quarter. They were a headwind, though, on comparisons to the fourth quarter of 2020, negatively impacting revenues by $2.1 million on a year-over-year basis. Same tower recurring cash leasing revenue growth for the fourth quarter, which is calculated on a constant currency basis, was 4% over the fourth quarter of 2020, including the impact of 2.7% of churn.
On a gross basis, same tower growth was 6.7%. Domestic same tower recurring cash leasing revenue growth over the fourth quarter of last year was 6.3% on a gross basis and 3.9% on a net basis, including 2.4% of churn. Domestic operational leasing activity or bookings, representing new revenue placed under contract during the fourth quarter, was at its highest level of the year. This was the highest quarterly level since 2014. Even with this high level of executions, we continued to replenish our domestic new lease and new amendment application backlog, which remained very healthy at year-end. These backlogs support our expectations for continued strong domestic operational leasing activity throughout 2022. During the fourth quarter, amendment activity represented 48% of our domestic bookings, with 52% coming from new leases.
The big four carriers of AT&T, T-Mobile, Verizon, and DISH represented 96% of total incremental domestic leasing revenues signed up during the quarter. In the fourth quarter, reported domestic site leasing revenue was slightly impacted by the timing of revenue commencements versus our internal estimates, primarily with regard to new DISH leases. This is a timing issue only, as the number of leases executed exceeded our expectations. During the quarter, we also had slightly less domestic churn than our internal estimates due to delays in timing versus our prior estimates. Internationally, on a constant currency basis, same-tower cash leasing revenue growth was 4.3% net, including 4.4% of churn or 8.7% on a gross basis. International leasing activity increased again and was at the highest level of the year.
As anticipated, the impact of international churn increased in the quarter as we began to see greater impacts from carrier consolidations and other network and contract modifications in Central America. Although there were some churn timing delays that resulted in slightly lower reported international churn for 2021 than we previously forecasted. In Brazil, our largest international market, we had another solid quarter of leasing activity. Gross same-tower organic growth in Brazil was 9.8% on a constant currency basis. During the fourth quarter, 84.9% 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 11.3% of consolidated cash site leasing revenues during the quarter and 8.1% of cash site leasing revenue excluding revenues from pass-through expenses.
Tower cash flow for the fourth quarter was $434.1 million. Our tower cash flow margins remain very strong, with a fourth quarter domestic tower cash flow margin of 85% and an international tower cash flow margin of 70.1% or 91.6% excluding the impact of pass-through reimbursable expenses. Adjusted EBITDA in the fourth quarter was $409.1 million. The adjusted EBITDA margin was 69.8% in the quarter. Excluding the impact of revenues from pass-through expenses, adjusted EBITDA margin was 74.5%.
Approximately 97% of our total adjusted EBITDA was attributable to our tower leasing business in the fourth quarter. During the fourth quarter, our services business produced record results for the third quarter in a row, with $55.9 million in revenue and $12.9 million of segment operating profit. Notwithstanding these record results, we were able to completely replenish our services backlogs, finishing the year at an equal level to our company all-time high backlog from September 30th. Based on this backlog and the continuing high activity levels by our customers, we are projecting another very strong contribution from our services business in 2022. AFFO in the fourth quarter was $310.8 million.
AFFO per share was $2.81, an increase of 13.3% over the fourth quarter of 2020 on a constant currency basis. During the fourth quarter, we continued to expand our portfolio, acquiring 59 communication sites for total cash consideration of $38.4 million. We also built 88 new sites in the quarter, including our first seven sites built in our new market, the Philippines. Jeff will touch on our expansion into the Philippines in a moment. Subsequent to quarter end on January 4th, we closed on our previously announced deal to acquire towers from Airtel Tanzania. This transaction added 1,445 sites to our tower portfolio at a cash purchase price of $176.1 million.
The impact of this transaction is fully included in our 2022 full-year outlook. Additionally, subsequent to year-end, we have purchased or are under agreement to purchase 371 sites in our existing markets for an aggregate price of $137.1 million. We anticipate closing on these sites under contract by the end of the third quarter. In addition to new tower assets, we also continue to invest in the land under our sites. During the quarter, we spent an aggregate of $13.6 million to buy land and easements and to extend ground lease terms.
At the end of the quarter, we owned or controlled for more than 20 years the land underneath approximately 72% of our towers, and the average remaining life under our ground leases, including renewal options under our control, is approximately 37 years. Looking ahead now, this afternoon's earnings press release includes our initial outlook for full- year 2022. Our outlook reflects a significant increase in organic leasing revenue contributions from new leases and amendments. This increased organic leasing contribution is largely due to the increased pace of new leasing activity we experienced during 2021, as well as some contributions from anticipated continued strong organic leasing activity during 2022.
Our outlook for contributions from new leases and amendments is based in part on estimates of lease commencement timing with each of our customers, and shifts in the timing of equipment installations may have minor impacts on these estimates as they did in the fourth quarter. We are also projecting increases in contributions from contractual escalations. Most of the increase is projected in our international markets, where inflationary increases are expected to drive increased rental escalations. In addition, our leasing revenue outlook contemplates increased impacts from customer churn in 2022. The primary increase is in connection with anticipated Sprint-related decommissioning. Our outlook incorporates a current estimate of approximately $30 million of churn in 2022 related to legacy Sprint leases, and our previously provided estimates of aggregate Sprint-related churn over the next several years remains unchanged.
Our total churn projections for 2022 are based in part on internal estimates of a variety of factors that can impact the timing of actual revenue cease dates. To the extent that there are variances from these internal estimates, there may be impacts on our reported 2022 churn. However, any differences in reported 2022 churn from these variances is a timing issue and does not change our expectations for long-term aggregate churn. In addition to Sprint churn, our outlook includes increased churn in our international markets, primarily due to carrier consolidation in Central America. Our full- year 2022 outlook includes the projected impact of the Tanzania acquisition, but it does not assume any further acquisitions beyond those under contract today. The outlook also does not assume any share repurchases other than those completed as of today.
However, we are likely to invest in additional assets or share repurchases or both during the year. Our outlook for net cash interest expense and for AFFO do not contemplate any further financing activity in 2022. However, we will continue to look for opportunities to optimize our balance sheet and our cost of debt. Finally, our outlook for AFFO per share is based on an assumed weighted average number of diluted common shares of 110 million, which assumption is influenced in part by estimated future share prices. We are very excited about 2022. Our customers are all very active, and we expect to produce very strong results as we help them to achieve their network build-out goals.
With that, I'll now turn things back over to Mark, who will provide an update on our liquidity position and balance sheet.
Thanks, Brendan. We ended the quarter with $12.4 billion of total debt and $12 billion of net debt. Our net debt to annualized adjusted EBITDA leverage ratio was 7.3x. Our fourth quarter net cash interest coverage ratio of adjusted EBITDA to net cash interest expense was 5x, 5.0x, the highest in the company's history. During the fourth quarter, the company, through an existing trust, issued $895 million of 1.84% Secured Tower Revenue Securities, Series 2021-2C, which have an anticipated repayment date of April 9th, 2027, and a final maturity date of October 10, 2051. In addition, $895 million of 2.593% Secured Tower Revenue Securities, Series 2021-3C.
Which have an anticipated repayment date of October 9th, 2031, and a final maturity date of October 10, 2056. The aggregate $1.79 billion of these tower securities have a blended interest rate of 2.217% and a weighted average life through the anticipated repayment date of 7.8 years. Also, during the fourth quarter, the company repaid at par the entire aggregate principal amount of the 2013-2C tower securities, which had an anticipated repayment date of April 11th, 2023. We also redeemed the entire aggregate $1.1 billion principal amount of the 2016, 4.875% senior notes, as well as paid all premiums and costs associated with such redemption.
As of the end of the year, the weighted average interest rate of our outstanding debt was 2.6%, with a weighted average maturity of approximately 4.8 years, and the interest rate on 97% of our outstanding debt is fixed. As of today, we have $560 million outstanding under our $1.5 billion revolver. During the fourth quarter, we repurchased approximately 786,000 shares of our common stock for $263.6 million at an average price per share of $335.26. Subsequent to year-end, we repurchased an additional 1,047,000 shares for $350 million at an average price per share of $334.40.
Since the beginning of 2021, we have repurchased 2.9 million shares of our stock at an average price of $318.59 per share. All of the shares repurchased were retired. We currently have $586.4 million of repurchase authorization remaining under our $1 billion stock repurchase plan. The company shares outstanding at December 31st, 2021, were 109 million, compared to 109.8 million at December 31st, 2020, a reduction of 0.8%. Pro forma for the repurchases after year-end, we have reduced our outstanding share count by 1.7%. In addition, during the fourth quarter, we declared and paid a cash dividend of $63.1 million or $0.58 per share.
Today, we announced that our Board of Directors declared a first quarter dividend of $0.71 per share, an increase of 22.4% over last quarter, payable on March 25th, 2022 to shareholders of record as of the close of business on March 10th, 2022. Today's dividend announcement represents a payout ratio of 25% of fourth quarter AFFO per share. With that, I'll now turn the call over to Jeff.
Thanks, Mark, and good evening, everyone. We had a very strong finish to the year, again generating double-digit percentage growth in AFFO per share. We produced record results in several categories, and we are set up well for a very strong 2022. 2021 lease-up activity levels were ahead of plan in both the U.S. and internationally. The U.S. market was particularly strong, with the highest level of organic new leasing revenue per tower signed up in over seven years during the fourth quarter. T-Mobile remained extremely busy investing in their continued nationwide deployment of 2.5 GHz and 600 MHz spectrum. DISH continued signing up a large number of new lease agreements in support of their brand-new nationwide 5G network. Verizon continued its ramp up for their C-band deployments, and AT&T remained a steady contributor.
These significant activity levels have also translated into meaningful U.S. services results, where we produced record services revenue and margin results for the third quarter in a row. Domestic activity has remained strong through the first two months of 2022, and both our leasing and services backlogs have remained very healthy, notwithstanding the solid fourth quarter results we produced in both segments of the business. Based on this backlog, commentary from our largest U.S. customers disclosing robust capital expenditure plans for 2022 and the size and scope of our customers' 5G deployment plans, we expect to continue seeing elevated domestic leasing and services activities throughout 2022 into 2023, and perhaps beyond. Internationally, we had our strongest leasing quarter of the year.
Demand remains high in many of our largest international markets, and we expect to continue to see it remain strong throughout 2022. During the fourth quarter, we signed up 68% of new international revenue through new leases and 32% through amendments to existing leases. We had strong leasing results in Central America, Brazil, and South Africa. In addition, the recent 5G spectrum auction in Brazil and the upcoming 5G spectrum auction in South Africa give us confidence that we will continue to see increasing network investment and thus leasing demand throughout our largest international markets. We are also excited about the potential from our two newest international markets. In early January, we closed on our previously announced acquisition of over 1,400 sites from Airtel Tanzania.
We believe this market has great promise for us, not only in terms of organic lease up on our acquired sites, but also in terms of new tower build opportunities. Significant wireless investment will be needed over the upcoming years, and we are well-positioned to support our customers in Tanzania and participate in the growth of wireless throughout this market. In addition, during the fourth quarter, we built our first brand new greenfield sites in the Philippines. The Philippines is a market that we have studied for a number of years, and we are very excited about the prospects for favorable growth over the next few years. We have established operations in the market, opening a local office, hiring staff, working with the appropriate government agencies for all necessary permits, and establishing strong positive relationships with each of the three major mobile network operators in the market.
We are initially and primarily focused on a greenfield new build strategy in the Philippines, and we anticipate the demand to support significant new tower build numbers for the next several years. We believe our significant long-standing tower operation expertise will provide meaningful value to our customers in this market and will give us a competitive advantage. I look forward to sharing results with you in the future as we continue to grow in the Philippines. Overall, internationally, we have a lot of very exciting things happening, and we believe 2022 will be a very good year. Throughout the last year, we have done an excellent job with regard to our balance sheet and capital allocation priorities. During the last year, we have completed a number of significant low-cost refinancings, which have meaningfully improved our balance sheet positioning, particularly ahead of a period with potentially increasing interest rates.
Our early refinancing of several of our outstanding debt securities during 2021 extended out maturity dates and produced the lowest weighted average interest rate in our company's history at 2.6%. The substantial majority of our interest cost is also locked in at fixed rates. We have continued to target our net debt to annualized adjusted EBITDA leverage in a range of 7-7.5 turns and have invested the available capital produced by that strategy into portfolio growth and share repurchases. Since the beginning of 2021, we have grown our site portfolio by over 8%, and we have repurchased 2.9 million shares of our outstanding stock.
We have also been able to continue to meaningfully increase our quarterly dividend, today announcing an increase in our dividend of over 22% while still retaining over 75% of our projected AFFO for additional discretionary investment. We believe that all of these factors will be additive to AFFO per share, and as a result, shareholder value creation. I'd like to take a moment to reflect on full-year results. They were very good. Year-over-year, we grew cash site leasing revenue, tower cash flow, adjusted EBITDA, and AFFO per share by 6.3%, 6.5%, 7.6%, and 13.9%, respectively. We posted industry-leading tower cash flow and adjusted EBITDA margins of 81.7% and 70.5%.
Beyond the impressive growth rates and margins, the quality of revenue and cash flow shine through, backed by predominantly U.S. macro towers. In our services segment, we had a banner year, finishing 2021 with $205 million in revenue and $46 million in gross profit, among the highest in company history. Each quarter throughout the year, SBA posted sequentially higher results, a reflection of the tremendous activity we're seeing from our customers with little signs of slowing. We allocated over $2 billion in 2021, with a lion's share going towards acquisitions and new builds, share repurchases, and dividends. We added 991 and 335 sites through acquisitions and new builds, respectively, in the year following that on January 4th, with over 1,400 sites acquired in Tanzania.
Finally, we published our second corporate sustainability report at the end of the year, evidencing our continued focus on and success in environmental, social, and governance matters. We take great pride in our performance throughout 2021, and we are very excited about the upcoming year. The current operating environment for our industry and our internal excellence of operational execution combine to give us great confidence that we will produce very strong results this year. I believe our full- year 2022 outlook provided in today's earnings release supports that confidence. Our customers are all very busy, and we believe we are well-positioned to help them achieve their operational and network goals. I want to thank our team members and our customers for their commitment and contributions to our success, and I look forward to sharing our 2022 results with you as we move through the year.
With that, Ryan, we are now ready for questions.
Okay. Ladies and gentleman, if you do wish to ask a question, please press one then zero at this time, one zero. Our first question will come from the line of Phil Cusick with JP Morgan. Please go ahead. Your line is open.
Hi, guys. Thank you. You know, two things. Can you just talk about what's built in for DISH and AT&T in the current guide?
Well, we're not gonna get too specific, Phil, but we, there will. DISH has rolled over quite a bit of activity that will be in our outlook as revenues for 2022. I'll speak generally to AT&T and really just track their public comments, which is that they anticipate a step up in their level of activity when the 3.45 equipment becomes available midyear, so that they can combine that with C-band equipment and do a one-stop or a one-truck roll stop.
I mean, knowing our history and knowing that you really need all your leasing activity in the first nine months of the year to impact that fiscal year's results, I would say you have more probably in there from DISH, as opposed to any kind of incremental step up this fiscal year for AT&T, although we would certainly expect to see that quite a bit greater in 2023.
Okay. Second, if I can, anything we should think about in terms of site development, either front-loaded or back-loaded in the current guide anyway? Thank you.
I think it's matching up pretty well with anticipating where leasing revenue is and will be headed for, you know, at least the next couple quarters. I think it's a current to two quarter forward look at activity.
Okay. Thanks, Jeff.
Mm-hmm.
Our next question will come from the line of Brett Feldman with Goldman Sachs. Please go ahead. Your line is open.
Yeah, thanks. Two, about M&A, if you don't mind. First, now that you're in the Philippines, I understand you're mostly gonna be doing that through greenfield builds. But how are you thinking about that as maybe a beachhead for broader expansion across Asia, and what does the M&A opportunities look like over there? Just on the data center side of things, you know, you've gotten further into operating a very small portfolio. We've clearly seen some of your peers get bigger through M&A in the data center space.
Are you at a point where you're thinking that might become a more interesting priority for your capital allocation, or do you still think that this is mostly a bit of a niche period for you as you understand the synergy between those assets and your tower assets? Thanks.
Yeah. In Southeast Asia, there's a number of opportunities, Brett, carrier dispositions we think will be coming, and just like anywhere else in the world, we will look at that, mostly from its, you know, financial sensibilities, not that anything, you know, strategic as we know, necessarily combines North America with the Far East or anywhere in between. Just like with every other decision we make, it will be primarily made on its financial attributes. But having said that, we would love to continue to grow, and that is our goal and remains our number one priority is using capital to grow the portfolio. The second question-
Data centers.
Yeah, I think you're gonna continue to see our kinda current pattern of behavior remain there. We like data centers, but in terms of a big investment, much bigger than kind of what we've been doing, we'd really have to get to the point where it was absolutely clear that there were great synergies, and the data centers would lead to expanded activity at the tower site. While there are certain pieces of evidence towards that, it has not really been proven out yet. I think it's gonna be the latter of the two paths that you framed in your question, and we will continue to learn the business and grow the business very, very modestly.
It actually has turned out to be very good so far in the two that we've had. We've had demands for increased capacity. We're actually investing additional capital to grow the capacity in both Jacksonville and Chicago, and that's based on contracted tenant demand. I mean, so far so good, but it's not material today. It won't be material this year, and we'll see where it goes in the future.
Thank you.
Next, we'll go to the line of Michael Rollins with Citi. Please go ahead.
Well, thanks, and good afternoon. Two questions, if I could. First, you know, Jeff, you're describing some of the visibility, and the demand picture in 2023 and beyond, and just curious, how's your visibility today different maybe from times in the past, and if there's a sense of the type of average growth investors should be expecting over the next few years? Just on the balance sheet, on target leverage, just given some of the recent changes in rates, curious what your current perspective is on target net debt leverage, maybe in the current year and then over time.
Yeah. In terms of visibility, Mike, it hasn't really changed that much, and our views around and the comments really about this year's activity rolling into 2023 really are a combination of what our customers have said as to how many sites that they're gonna be able to get to this year, what their capital plans are, and what our own internal backlogs are showing. Basically, to oversimplify it, there's gonna be a lot of work still left to do by the end of this year. That's what gives us confidence about 2023, and not sure it'll all be done by the end of 2023.
Average growth rates over the next year, I mean, I think on a gross basis, you're still looking at the mid- to high-single- digits that we've been talking about. We feel good about that. In terms of leverage, you know, we've talked about this a lot over time. You know, 60 basis point movement in the tenure, while it seemingly, you know, had done quite a bit of impact to our trading multiple, it really doesn't impact the way we think about structure and capital allocation and balance sheet. We're not really changing anything today based on where the tenure is now. If it, you know, hopefully it doesn't, but if it goes up materially from here, we have to revisit that.
The fact that we do pay a dividend puts a you know a little bit more caution and conservatism in where we ultimately wanna take leverage or maintain leverage in an increasing rate environment. The movement that we've seen so far this year really hasn't caused us to rethink any of the big picture balance sheet structural points.
Thanks.
The next question will come from the line of Ric Prentiss with Raymond James. Please go ahead.
Thanks. Good afternoon, everybody.
Hey, Ric.
Hey. I'm gonna ask a couple of questions. Jeff, on DISH's call last week, Charlie Ergen mentioned how in the future, maybe there is some ability to share spectrum, particularly in that 3.45 DoD spectrum band, but maybe some of the other spectrum bands as well. How do you guys look at that, and how do you actually even monitor it?
There are certain filings that would allow you to monitor it. You have to work at it. You know, there's a certain reliance on customer transparency because all the leases really talk only about deploying and using spectrum that is owned or controlled by the lessee. That's really not something that would be allowed under our current leases without some additional discussions and modifications to the lease. In terms of actually, you know, it's not like there's necessarily gonna be new equipment on the tower to do that.
Yeah.
You would be able to figure that out through RF tests based on, you know, each customer's signal strength in that particular area. If they're not on the tower officially, but for some reason they're broadcasting a strong signal at 3.45, you know you got a sharing issue.
Yeah. Exactly. I think you also called out that obviously CPI is gonna be up, escalators up in LatAm. Quickie math suggests instead of being in the fours, you might be in the sixes. Where does CPI go, and how should we think about the pacing in Latin America or your all your international markets on what we should think of in CPI and escalators?
Brendan?
Yeah. Ric, I mean, obviously, the majority of our international escalators are in Brazil and South Africa being our largest markets. We do have some concentration of leases in a couple of time periods during the year based on acquisitions that we've done over the years and the lease backs associated with those. You know, otherwise, over time, it's fairly well evenly spread in. You know, we've put in certain basic assumptions for purposes of guidance. Obviously, some of those are our best estimate today as to where it'll be at the point that the biggest escalator concentration happens. You know, I think that they are reasonable, if not, maybe a touch conservative.
Those concentration points, are they kind of more in the middle of the year? I'm trying to remember back from some of those old acquisitions.
Yeah. I mean, one of them is in the late spring, and one is sort of in the late fall.
Okay. Last one for me. You also touched on that Sprint churn's not gonna be as low in the current calendar year 2022, as might have been first thought. Can you update us and just remind us what is the cumulative Sprint churn you're expecting, and can you give us a feeling, as far as how much you're thinking right now might hit 2023 or 2024?
Yeah. I mean, our assumptions right now are pretty much the same as what we've disclosed before. You know, when we talked about 2022 in last year when we gave our projections for it, we said we'd be somewhere in the $30 million-$35 million range. We actually are thinking we're somewhere on the lower end of that right now based on just some slight movements in timing around various decommissioning and stuff. All that means is that that probably rolls into next year. Our projections for 2023 and 2024 that we've given before are $10 million-$20 million in each year. That's still the case. But obviously, if numbers shift in 2022 at all, that would slightly affect 2023.
Really, we have a fairly small level of churn expected for the next couple of years before we see our bigger years.
After this year?
Yeah, after this year, 2025 and 2026 are the bigger years where we expect to see, you know, the majority of our Sprint-related churn.
Makes sense. Thanks for the extra color. We'll see you guys next week.
Our next question comes from the line of Walter Piecyk with LightShed. Please go ahead.
Jeff, I just paid like $600 to have Roto-Rooter clear a drain for me, which I'm pretty sure was like double the last time I had to do it. Can you give us a sense of the labor market and whether that's having any impact in all the construction activities of these telcos out there, and whether you think that has any impact on their speed at the moment?
Walt, that is more information than I needed to hear. In terms of-
Actually, it was amazing. That was $600 to have a drain cleaned. Can you- I couldn't fucking believe it. The point is that we're all seeing this. We're all seeing our expenses go up, right? It's not. You know, who knows how transitory it is, but are the operators, do they play these games like when you look at the services businesses? I mean, do you think this has any impact on the business? Because a lot of times, in the last couple of quarters, you guys, meaning collectively the tower industry, tell, "Oh, it's not a big deal. Everything's fine." It's just hard to believe given what we see in the market right now that that's not having some impact on-
Yeah. It is.
Some of the operators.
It is having some impact in absolute terms, but I think we're managing it pretty well. Here's what's going on. There is wage pressure everywhere. In the services business, we generally work on fixed fees in the site consulting business, which is the zoning business. In the construction business, though, which was most of the revenue and will be this year, that's all bid, and it's bid contemporaneously. We're able to pass a lot of that on, assuming we win the bid. We're actually managing it okay. I mean, it has started over a year ago, and we're very happy with the profits and the margins that we're producing in that business. Our outlook implies that we're gonna do it again.
Yes, it is happening, but we are managing it in a good way, some of which gets passed on through to the customer because of the bid process and the way the work is awarded.
I think it was Phil had asked about DISH, and I think you used the term rolled over. When you say rolled over, does that mean that was lease revenue that maybe, you know, a little while ago you thought would've hit in 2021 and now it's gonna be hitting in 2022 instead? Is that what you mean by rolled over?
Yes. Yeah. It means the leasing activity's been tremendous. The revenue recognition on those leases lags based on either a fixed end date or the earlier of construction. That's where we manage and estimate that. We were estimating a little bit higher last year, but the reality is the leases are signed up. They rolled over into this year, and it gives us, you know, obviously solid confidence for where DISH's revenue contribution will be this year.
Okay. My last question is-
Yeah, leases that were signed up that had not begun accruing revenue in 2021.
Right. It's just better visibility for 2022.
Yeah.
My last question then on the divvy policy, I think you had mentioned the prepared comments. You highlighted 25% of AFFO per share. Obviously, 20% growth was good. When I think about like a company like Cogent, which gets a very elevated valuation, it's because they, Schaeffer goes out there and predictively says like the same dividend increase every quarter, right? Is the 25% of AFFO per share, is that what we should just use as kind of the benchmark, and then yield investors can just look at AFFO and then just predict the dividend growth as a result of the growth of the AFFO per share? Or does it make more sense maybe-
No. No.
For you guys to do more of a-
I think we will grow. I think what we have done, we will continue to do, which is grow our dividend faster than our AFFO per share growth. Now, we have that luxury because we started with a low payout, and on a yield basis, you know, it's still low. As we've always said, going back to before we paid a dividend, while we want to pay a dividend to expand the base of our investor universe, we believe that we will make our shareholders more money by keeping the money inside the company and compounding it through portfolio growth and stock repurchases.
Right. Why not then, rather than like tie it to say, "Hey, we're growing it fast at AFFO," just tell the yield investor, "It will grow minimum x percent," whether that's 10%, 15%, or whatever the number is you wanna pick, and then just give them a very predictable growth rate that you can bring all these people in order to drive the stock.
We have talked about an amount of growth in five year increments, and I think we've talked about 20% annually.
Yeah. We've said, I mean, in the past, Walt, we've been pretty clear that we expect to grow it for the next several years by at least 20% per year. That's what we've done.
I guess you just need to repeat it on your-
Yeah.
Prepared remarks every quarter like Dave does, and then you can get that benefit. Okay. Thank you.
Yeah.
Our next question comes from the line of Nick Del Deo with MoffettNathanson. Please go ahead.
Hey. Hey, guys. Thanks for taking my questions. I guess first, Jeff, I was hoping you could talk a bit more about your aspirations for the Philippines, you know, maybe a bit more about the magnitude of the greenfield opportunity over the coming years and maybe describe the level of competition you're seeing or expect to see because if I'm not mistaken, you know, several other tower codes have jumped into that market too since it opened up. And then second-
Nick-
Oh, sorry, go ahead.
I was gonna answer your question.
Oh, sure. Sure.
The Philippines has 110 million people and growing, and they have about 24,000 cell sites. There is a huge opportunity based on those numbers to expand wireless networks, and a lot of greenfield sites will need to be built. The market, we like it from a stability point of view, from a land use, a regulation point of view. There are over 20 tower companies in country. We know that because you have to get a license to operate as a tower company in the Philippines. We think there's only five or six of them, including us, that are strong and have the confidence of the customers to get meaningful build-to-suit opportunities going forward.
We've found the customers in the Philippines to be very smart and very careful in terms of who they partner with, and I think those are the kinds of relationships where our history, experience, and our people on the ground will distinguish themselves, and we will excel. I think thousands of towers will be built in the Philippines every year for the next 10 years. I think if we get our fair share of that, we'll build a nice business there.
Okay. That's terrific. It sounds like the headline competition may not be as intense as it first seems, which is good to hear.
The numbers are higher. The folks with real capabilities, though, are much lower.
Got it.
The number-
Got it.
Hmm?
Got it. You know, maybe second question, you've repurchased a lot of stock so far in 2022. You know, maybe just some updated thoughts on the relative appeal of M&A versus repurchases here, and maybe, you know, any general observations about trends in the M&A market and what you're seeing?
Based on a $303 stock price in the midpoint of our guidance, that's a 26x AFFO per share multiple, if I'm not mistaken. That currently, while I think there is some rationalization going on in the markets, both domestic and internationally, there are a number of transactions that are selling for quite a bit more than that on a multiple basis. That should lead you to conclude that while we continue to want to grow our portfolio, and we'll make every effort to do that, we will do it only in those circumstances where it makes financial sense and that stock repurchases at today's price relative to private market values are extremely attractive.
Got it. That's great. Thank you, Jeff.
Yeah.
Our next question will come from the line of Greg Williams with Cowen. Please go ahead.
Great. Thanks for taking my questions. The first one's just on the international guide. Looks like Tanzania is contributing about $45 million in revenue, but how much is being contributed in terms of EBITDA and AFFO per share for Tanzania? Second question is just maybe more philosophical on the telco versus cloud debate. There's an ongoing debate of cloud providers offering network as a service, AWS in the fray. Does that lighten up the equipment load for you guys? Maybe not the top of the towers, but at the bottom of the towers, and how do you see that dynamic unfolding? Thanks.
The contribution from Tanzania is approximately $22 million to EBITDA. That would be very similar to AFFO.
On your second question, I mean, we have always thought of ourselves first and foremost as houses and housing antennas and radios. While there is some movement as to the compute that's going on at the tower site, we really haven't seen that impact, and it really doesn't impact our thoughts in terms of antenna and radio locations. While a lot's going on there, we really don't see or expect a material impact, at least in terms of the way we structure leases and think about our business.
Got it. Thank you.
Mm-hmm.
Our next question will come from the line of Sami Badri with Credit Suisse. Please go ahead.
Hi. Thank you. I have two questions. The first one is regarding just the wage inflation conversation you had earlier.
Mm-hmm.
Now, we all are operating with this idea that prices and costs of labor are gonna be reduced or normalized, but what if they don't? What measures will you have to take if they don't actually normalize and this new pricing level is actually the new normal?
Well, we will do what we always do, which is take a fine pencil and work through the aspects of our costs where we can do something about it, you know. In some cases, we may be able to improve upon that, and in some cases, we won't. What is good though in this conversation is for people to realize how small, frankly for us compared to other businesses, that these changes can really have on our bottom line because of the 70%+ EBITDA margin. I mean, we have great operating leverage in this business. Thankfully, we've demonstrated over the years, and that continues to be true, that a little amount of people can manage and operate a lot of towers. We have that going for us.
But you know, we'll do what we always do. We'll execute and make changes as necessary to make sure we have the best team on the field at the best possible expense levels for the company.
Maybe just for us to know, because there are some new contracts in place with the MLAs and all the telcos more formalizing what they plan on spending or what they prefer to spend. Does the fact that there are MLAs in place make the renegotiation process more complex or no difference at all?
It makes things much less complex in terms of the business that you're doing with your counterparty during the life of the MLA. I'm not sure I got your question. The renegotiation of what? With employees or the renegotiation of an MLA?
Renegotiation of the MLA and the fees you're getting, the contributing payments from your customer, and were you relatively matching the wage inflation against price, right? Just managing your margin, just to get an idea on where you're gonna be turning the levers.
Well, when we get to that point, that certainly will be a consideration. I would just say, I think you're focused on something that we don't believe will be a material issue at all. I think if you look at our outlook, you'll see increasing margins.
Yeah. Maybe I can just add to that our actual cash SG&A is about 6% of our total revenues. Its impact from a personnel standpoint is not that much. Our largest expense on our tower business are ground leases, which also have fixed escalators, so that's an expense that can be controlled. It doesn't adjust with any of these inflationary pressures that you're talking about.
Yeah, I hope you can tell from our comments, Sami, that we don't really worry about that much, and we're fully aware of where the market is today and where it might go.
Nope, absolutely. I just, these are questions that I get on my side, so I was just hoping I could run them by you guys. The other kind of question I actually do get as well from investors that I was hoping you could share your take on is, you are very focused on emerging market opportunities seen by the acquisitions and the announcements you've made. Then there are just your competitors going after or your competitor going after developing or developed markets, sorry, within the European region. That seems to be a very compelling and digestible opportunity in the wake of international and geopolitical dynamics. Is there a reason why you guys haven't really tilted on the European side as an opportunity for M&A rather than sticking to emerging markets?
It's entirely due to our assessment of return on invested capital for those opportunities versus what we believe we will achieve in Tanzania, Philippines, and markets like that. I mean, we've talked a lot, Sami, over the years about how we like the European market. When you look at what, who's competing for assets over there and the fact that a number of them are, they denominate their investors and their results in euros, and you can borrow euros, at least you could. I'm not sure what today is, but you could borrow at less than zero. It just became a market that we did not find compelling from an investment perspective and from a shareholder value creation perspective. Is it otherwise a good market, sure .
Got it. Well, thank you guys very much.
Our next question will come from the line of David Guarino with Green Street. Please go ahead.
Hey, thanks. On the $65 million of domestic new leasing activity this year, I believe if you hit that'd be a record for the company. Just wanna know, do you think that's a sustainable pace going forward, or is 2022 just an outlier year?
You know, 2023, we think is gonna be really good, too. That's kind of as far as the crystal ball goes right now.
Okay.
While we're not making any promises or guaranteeing anything, we would not sit here today and tell you that we're sure that 2022 will be the high watermark. It may not be.
Okay. That's definitely encouraging. Maybe going back to the Philippines comment. I don't think you mentioned it, but could you share which M&A is the anchor tenant on your new builds? It would be interesting to know just in light of the tower dispositions that several of the carriers have hinted at recently. Then-
Yeah.
With the opportunity-
It's both Globe and Smart.
Okay. That's very helpful. Could you just tell us what's the day one yield that you're gonna achieve on the tower builds, given that large opportunities that you talked about?
Double- digit.
Okay. Better than what you would get in LatAm, or is it comparable to the other emerging markets you're in?
It's comparable, and that's on a tower cash flow yield. That's kind of what we look for when we're putting new towers up.
Okay. That's it for me. Thank you.
Our next question will come from the line of Simon Flannery with Morgan Stanley. Please go ahead.
Great. Thank you. Good evening. Jeff, you talked a little bit about the M&A environment. You grew your site portfolio about 8% since last February. How are you thinking about the 5%-10% long-term guidance? Is that still something you see as achievable even in this M&A environment, or might that more be through M&A, or is it more maybe some build-to-suit to hit those sort of numbers?
Well, we're definitely gonna need some build-to-suit, Simon, to get to any number.
Yeah.
You know, I still feel pretty good about the 5%-10%, certainly the 5%. That is still a goal of ours. We'll need to do-
Right. I believe.
A little bit of work around that like we do every year, but you know, we managed to look a lot and find some things that work for us. We certainly did that between the PG&E deal in Tanzania. We're gonna build a lot more towers this year than we built in the prior year. If we get one good size acquisition out there somewhere, we'll hit the bottom, at least the bottom end of that range.
Great. On the Philippines, you talked about the large market opportunity. You know, what is sort of critical mass for you in a market like that? Is that 500 towers, 1,000 towers? Is-
Yeah, those are good guesses. It's at least 500.
Great.
We have gone in there with the belief and the expectation that we will get to at least 500 towers in that market.
Great. Thanks a lot.
Mm-hmm.
The final question we have in queue comes to the line of Brandon Nispel with KeyBanc Capital Markets. Please go ahead.
Awesome. Maybe two questions for Brendan. Could you share what the backlog of lease applications was up year-over-year in the fourth quarter? Going back on the $65 million in new leasing in 2022, I would imagine that is predominantly second half weighted. Is it possible that you could exit the year with, say, $20 million in new leases on a year-over-year basis? Thanks.
Yeah. Brandon, I don't wanna be too specific on the backlog. It's obviously up a good bit from where it was last year. We, you know, we came out of last year with a reasonably good backlog. We had a slow first quarter, and then it began to ramp, and it's been at a pretty high level that's been fairly consistent throughout at least the second half of the year and as much as back into the second quarter of last year. You know, I don't wanna get into the specifics too much, but-
I mean, if you looked at who was in that backlog in December of 2020, you didn't really have DISH-
You had no DISH, yeah.
Yet, you really didn't have Verizon C-band. It's up big, December 31 to December 31.
Yeah. Yeah, I mean, the question is how much of it was sitting there at the time that hadn't yet been signed. I mean, if you look at the growth, though, and the actual number, you know, that $65 million that we just printed versus $38 million, I believe, for last year, I mean, that percentage from the time that activity was down to when it started to pick up, that's representative of what we saw in the growth in the backlog. You know, that's almost doubling the backlog in terms of dollars. I'm sorry, the second question? I apologize.
Yeah, I guess just looking at the new leasing again, you know, on my numbers, you're at $11 million in new leasing today. To get to the guide to $65 million would suggest that you need to get to something like a high teens, low $20 million dollar number for the fourth quarter. I'm just making sure that-
Yes.
That's what we're thinking about.
Yeah, that's right. Yeah, no, that's accurate. I expect that it's gonna go up every single quarter, I would expect, during the course of this year, just based on what we've already signed up and the timings of when we're estimating the commencements. Your numbers are in the right range.
Okay. Thank you.
We have no further questions in queue.
Great. I wanna thank everybody for joining us to wrap up our 2021 results, and we greatly look forward to reporting as we move through 2022. Thank you very much.
Okay. Ladies and gentlemen, that does conclude today's conference. I'd like to thank you for your participation. You may now disconnect.