Phil Cusick: Jeff, we’ve mentioned a few years in the past where you’ve been pretty cautious to build in that acceleration in your guidance until you see the orders coming through. Is it fair to say that you’re fairly cautious on that acceleration in the current guide?
Jeff Stoops: In the aggregate, yes, with respect to certain individual U.S. carriers, I mean we know that there will be some acceleration in 2023. But again, the guide is to the aggregate, not just an individual carrier.
Phil Cusick: Thank you. And then if I can, one more, just how do you think about the math on buybacks now, right? Last quarter, you made clear that borrowing money at the current rates and buying stock where it was then just didn’t make a lot of sense in terms of accretion. I thought your comment today about sort of waiting for better opportunities was interesting. Do you think that either the private markets are going to start coming around given where rates are? Or do you anticipate that the sort of ratio between the current stock price and the current borrowing rates will change?
Jeff Stoops: Well, with the revolver, you have a guaranteed return 6%, right, to pay that back. And the corollary to that is a 16x, at least on today’s AFFO accretion, a 16x acquisition or stock repurchase. We’re always going to be stock repurchases, Phil, and it’s really a question of picking the right time against the right cost of debt capital and that may €“ there may be very well opportunities to do that this year and we will do that. In terms of acquisitions, I do think the market is starting to narrow the gap a little bit, but there is still a gap. And if we see opportunities like we did Tanzania or GTS, we will take a hard look. But we’re very financially-driven. And something we will have to look better, short, long, medium term than repaying our revolver.
I mean we do think that interest rates will come down over time. We are going to be betting on the side of the Fed that they reduce inflation to 2% over time, and we know what effect that will have on interest rates. And when that plays itself out, we will have put ourselves in a great position to access incremental debt at prices that will be much more accretive to what we’re doing, and we’re happy to do that and wait for that time.
Phil Cusick: Great. Okay, thank you. Congratulations again.
Jeff Stoops: Thanks.
Operator: And the next question comes from the line of Simon Flannery with Morgan Stanley. Please go ahead.
Simon Flannery: Thank you. Good evening, and congrats to you, Jeff and Brendan. On leverage, I think you’ve noted a couple of times, 6.9%, below the target leverage level. So it sounds like even though you referenced perhaps getting to mid-6s, there is really no change despite the rate environment in your long-term target of 7% to 7.5%. Just wanted to clarify that? And then one of your peers noted on their earnings call in January that they are only seeing the big three carriers adding mid-band spectrum to about half of the towers in their portfolio. It would be great if you could just comment on what you’re seeing with your activity from those companies?
Jeff Stoops: Yes. You’re €“ what you said about how we’re thinking about leverage is absolutely correct, Simon. This is a period of time that we’re tactically steering €“ and we may not. We may see an acquisition tomorrow that looks much better than paying down the revolver at 6%. And if we do, that’s what we will do. But if we don’t, the natural result of the cash flows that we generate will be deleveraging, but it will only be temporary until such time as we believe incremental debt at the prices then available will create additional value, and that’s what we will do.
Brendan Cavanagh: Yes. And then on the carriers adding mid-band only half the sites, I can’t speak to what the others are talking about. I think it’s our belief and expectation that they will add it to the vast majority of their sites. That comment may have been related to where they are today, which parity. And there is still a long way to go, I think, is the overarching message here. A lot of our sites have not been touched yet. But based on backlogs and communications with our customers, we expect that, that will come over the coming years.
Jeff Stoops: Yes. And actually, if you’re speaking today, Simon, we actually think that we’re a little bit less than that on the aggregate for all three. So there is a lot of work left to be done. But it ties into the question Ric asked me first that is the €“ what is going to cause the carriers to really spend everything this year to get there, and I think we have to see the killer 3G app that is going to provide the impetus to do that. I said 3G app, 5G app.
Simon Flannery: Right. So this is probably not a year where you necessarily will hit that 5% to 10% portfolio growth. You were strong last year. But if the opportunity is there, you’ll do it, but you’re not going to just do it to keep up that sort of target.
Jeff Stoops: No, no. And if you look at what we’ve done over the last 10 years on that metric of portfolio growth, I think we’re north of 10%. So it’s not every year necessarily. This may not be the year that we do that, but we did 15% last year. So I think overall, our views around portfolio growth and leverage have not changed.
Simon Flannery: Great. Thanks a lot.
