CONSOLIDATED HIGHLIGHTSFirst Quarter 2017
- Total revenue increased 25.4% to $1,616
million
- Property revenue increased 25.7% to
$1,594 million
- Net income increased 9.3% to $307
million
- Adjusted EBITDA increased 19.8% to $998
million
- Consolidated AFFO increased 19.7% to
$721 million
American Tower Corporation (NYSE:AMT) today reported financial
results for the quarter ended March 31, 2017.
Jim Taiclet, American Tower’s Chief Executive Officer stated,
“We continued the methodical execution of our operational and
financial strategies in the first quarter, extending American
Tower’s long track record of delivering double digit growth in
property revenue, Adjusted EBITDA and Consolidated AFFO. This
consistent performance supported the expansion of our common stock
dividend by nearly 22%. We also resumed our share repurchase
program during the quarter and have now repurchased more than 3.6
million shares of our stock so far this year for a total of over
$400 million.
We saw particularly strong results in our largest core market,
the U.S., where our 6.5% Organic Tenant Billings Growth was the
highest we’ve seen since the second quarter of 2015, supported by a
recently amended master lease agreement with one of our tenants.
Further, given the recent conclusion of the 600 MHz auction, the
numerous other spectrum assets yet to be deployed and several other
potential catalysts, we believe that our portfolio of over 40,000
U.S. sites remains optimally positioned to drive strong organic
growth over the long term.”
CONSOLIDATED OPERATING RESULTS OVERVIEWAmerican Tower
generated the following operating results for the quarter ended
March 31, 2017 (all comparative information is presented
against the quarter ended March 31, 2016).
($ in millions, except per share amounts)
Q1 2017 Growth Rate Total revenue $ 1,616 25.4% Total
property revenue $ 1,594 25.7% Total Tenant Billings Growth $ 231
21.9% Organic Tenant Billings Growth $ 90 8.6% Property Gross
Margin $ 1,111 19.7% Property Gross Margin % 69.7 % Net income $
307 9.3% Net income attributable to AMT common stockholders $ 289
16.5% Net income attributable to AMT common stockholders per
diluted share $ 0.67 15.5% Adjusted EBITDA $ 998 19.8% Adjusted
EBITDA Margin % 61.7 % NAREIT Funds From Operations (FFO)
attributable to AMT common stockholders $ 634 16.3% Consolidated
AFFO $ 721 19.7% Consolidated AFFO per Share $ 1.68 19.1% AFFO
attributable to AMT common stockholders $ 681 16.0% AFFO
attributable to AMT common stockholders per Share $ 1.58 15.3%
Cash provided by operating activities $ 683 21.2% Less:
total cash capital expenditures(1) $ 177 11.5% Free Cash
Flow $ 506 25.1% (1) Cash capital expenditures for Q1 2017
include $9.2 million of payments on capital leases of property and
equipment, which are presented in the condensed consolidated
statements of cash flows included herein under Repayments of notes
payable, credit facilities, senior notes and capital leases.
Please refer to “Non-GAAP and Defined Financial Measures” below
for definitions and other information regarding the Company’s use
of non-GAAP measures. For financial information and reconciliations
to GAAP measures, please refer to the “Unaudited Selected
Consolidated Financial Information” and “Unaudited Reconciliations
to GAAP Measures and the Calculation of Defined Financial Measures”
below.
CAPITAL ALLOCATION OVERVIEW
Distributions – During the quarter ended March 31, 2017,
the Company declared the following regular cash distributions to
its common stockholders:
Common Stock Distributions Q1
2017(1) Distribution per share $ 0.62 Aggregate
amount (in millions) $ 264 Year-over-year per share growth 22 %
_______________
(1) The dividend declared will be paid in the second quarter
of 2017 to stockholders of record as of the close of business on
April 12, 2017.
In addition, the Company paid approximately $27 million in
preferred stock dividends during the first quarter of 2017.
Stock Repurchase Program – During the first quarter of
2017, the Company resumed its stock repurchase program and
repurchased a total of approximately 1.9 million shares of its
common stock for approximately $225 million. Subsequent to the end
of the first quarter of 2017, the Company repurchased approximately
1.7 million additional shares of its common stock pursuant to the
program, for approximately $213 million.
Capital Expenditures – During the first quarter of 2017,
total capital expenditures were $177 million, of which
approximately $24 million was for non-discretionary capital
improvements and corporate capital expenditures. For additional
capital expenditure details, please refer to the supplemental
disclosure package available on the Company’s website.
Acquisitions and Other Transactions – During the first
quarter of 2017, the Company spent approximately $512 million, net
of joint venture partner contributions, to acquire nearly 2,500
sites, primarily through ATC Europe’s acquisition of FPS Towers
(“FPS”) in France, which closed on February 15, 2017.
Subsequent to the end of the first quarter of 2017, the Company
entered into a definitive agreement to acquire up to approximately
1,400 sites in Paraguay from Millicom International Cellular’s
subsidiary, Tigo Paraguay, for a total consideration of
approximately PYG 700 billion (approximately $125 million at
current exchange rates). The transaction is expected to close
during the second half of 2017, subject to customary closing
conditions.
LEVERAGE AND FINANCING OVERVIEW
Leverage – For the quarter ended March 31, 2017, the
Company’s Net Leverage Ratio was approximately 4.6x net debt (total
debt less cash and cash equivalents) to first quarter 2017
annualized Adjusted EBITDA.
Calculation of Net Leverage Ratio ($ in millions)
As of March 31, 2017 Total debt $ 18,890 Less: Cash and cash
equivalents 713 Net Debt 18,177 Divided By: First quarter
annualized Adjusted EBITDA(1) 3,991 Net Leverage Ratio 4.6x
_______________
(1) Q1 2017 Adjusted EBITDA multiplied by four.
Liquidity – As of March 31, 2017, the Company had
approximately $2.5 billion of total liquidity, consisting of
approximately $0.7 billion in cash and cash equivalents plus the
ability to borrow an aggregate of approximately $1.8 billion under
its revolving credit facilities, net of any outstanding letters of
credit.
During the first quarter of 2017, the Company’s net borrowings
under its credit facilities were $1.0 billion. These borrowings
were used to fund the Company’s portion of the FPS acquisition in
France, to redeem all outstanding 7.25% senior unsecured
notes, to repay all amounts outstanding under certain securitized
notes assumed in connection with prior acquisitions and for general
corporate purposes.
Subsequent to the end of the first quarter, the Company issued
€500.0 million aggregate principal amount of Euro-denominated
1.375% senior unsecured notes due 2025. The net proceeds from this
issuance were used to repay a portion of existing indebtedness
under one of the Company’s revolving credit facilities and for
general corporate purposes.
FULL YEAR 2017 OUTLOOK
The following estimates are based on a number of assumptions
that management believes to be reasonable and reflect the Company’s
expectations as of April 27, 2017. Actual results may differ
materially from these estimates as a result of various factors, and
the Company refers you to the cautionary language regarding
“forward-looking” statements included in this press release when
considering this information.
The Company’s outlook is based on the following average foreign
currency exchange rates to 1.00 U.S. Dollar for April 27, 2017
through December 31, 2017: (a) 16.60 Argentinean Pesos;
(b) 3.20 Brazilian Reais; (c) 670 Chilean Pesos;
(d) 3,020 Colombian Pesos; (e) 0.94 Euros; (f) 4.45
Ghanaian Cedi; (g) 66.70 Indian Rupees; (h) 20.00 Mexican
Pesos; (i) 325.00 Nigerian Naira; (j) 3.35 Peruvian Soles;
(k) 13.80 South African Rand; and (l) 3,620 Ugandan
Shillings.
The Company is raising the midpoint of its full year 2017
outlook for property revenue, net income, Adjusted EBITDA and
Consolidated AFFO by $105 million, $30 million, $70 million and $55
million, respectively, as compared to the Company’s 2017 outlook,
as updated on March 21, 2017.
Based on these assumptions, the Company’s outlook reflects
estimated favorable impacts from foreign currency exchange rate
fluctuations to property revenue, Adjusted EBITDA and Consolidated
AFFO, of approximately $73 million, $42 million and $31 million,
respectively, as compared to the Company’s 2017 outlook, as updated
on March 21, 2017. The impact of foreign currency rate fluctuations
on net income is not provided, as the impact on all components of
the net income measure cannot be calculated without unreasonable
effort.
Additional information pertaining to the impact of foreign
currency and London Interbank Offered Rate (LIBOR) fluctuations on
the Company’s outlook has been provided in the supplemental
disclosure package available on its website.
Midpoint 2017 Outlook ($ in millions)
Full Year 2017 Growth Total property revenue(1) $
6,415 to $ 6,595 13.9% Net income 1,300 to 1,380 38.1%
Adjusted EBITDA 3,980 to 4,080 13.4% Consolidated AFFO 2,760 to
2,850 12.6%
_______________
(1) Includes U.S. property revenue of $3,570 million to
$3,630 million and international property revenue of $2,845 million
to $2,965 million reflecting midpoint growth rates of 6.8% and
24.0%, respectively. The U.S. growth rate includes a negative
impact of 1.2% from the non-recurrence of approximately $39 million
in decommissioning revenue from 2016. International property
revenue reflects the Company’s Latin America, EMEA and Asia
segments.
2017 Outlook for Total Property
revenue, at the midpoint, includes the following
components(1): ($ in millions, totals may not add
due to rounding.)
U.S. Property
InternationalProperty(2)
Total Property International pass-through revenue
$ N/A
$ 908 $ 908 Straight-line revenue 140 45 185
_______________
(1) For additional discussion regarding these components,
please refer to “Revenue Components” below. (2) International
property revenue reflects the Company’s Latin America, EMEA and
Asia segments.
2017 Outlook growth, at the midpoint,
includes the following components(1): (Totals may
not add due to rounding.)
U.S. Property
InternationalProperty(2)
Total Property Organic Tenant Billings >6% ~9-10%
~7-8% New Site Tenant Billings ~0.1% ~15-16% ~5-6% Total Tenant
Billings Growth >6% ~24-25% >12%
_______________
(1) For additional discussion regarding the component growth
rates, please refer to “Revenue Components” below. (2)
International property revenue reflects the Company’s Latin
America, EMEA and Asia segments.
Outlook for Capital
Expenditures: ($ in millions,
totals may not add due to rounding.)
Full Year 2017
Discretionary capital projects(1) $ 145 to $ 175 Ground lease
purchases 150 to 160 Start-up capital projects 165 to 185
Redevelopment 185 to 215 Capital improvement 140 to 150 Corporate
15 — 15 Total $ 800 to $ 900
_______________
(1) Includes the construction of approximately 2,500 to
3,500 communications sites globally.
Reconciliation of
Outlook for Adjusted EBITDA to Net income: ($ in millions,
totals may not add due to rounding.)
Full Year 2017
Net income $ 1,300 to $ 1,380 Interest expense
755 to 775 Depreciation, amortization and accretion 1,590 to 1,620
Income tax provision 140 to 130 Stock-based compensation expense
104 — 104
Other, including other operating expenses,
interest income, gain (loss) on retirement of long-term
obligations and other income (expense)
91 to 71 Adjusted EBITDA $ 3,980 to $ 4,080
Reconciliation of Outlook for Consolidated AFFO to Net
income: ($ in millions, totals may not add due to rounding.)
Full Year 2017 Net income $ 1,300 to
$ 1,380 Straight-line revenue (185) — (185) Straight-line
expense 67 — 67 Depreciation, amortization and accretion 1,590 to
1,620 Stock-based compensation expense 104 — 104 Deferred portion
of income tax (4) to 8
Other, including other operating expenses,
amortization of deferred financing costs, capitalized
interest, debt discounts and premiums,
gain (loss) on retirement of long-term obligations,
other income (expense), long-term deferred
interest charges and dividends on preferred stock
43 to 22 Capital improvement capital expenditures (140) to (150)
Corporate capital expenditures (15) — (15) Consolidated AFFO $
2,760 to $ 2,850
Conference Call InformationAmerican Tower will host a
conference call today at 8:30 a.m. ET to discuss its financial
results for the quarter ended March 31, 2017 and its updated
outlook for full year 2017. Supplemental materials for the call
will be available on the Company’s website, www.americantower.com. The conference call dial-in
numbers are as follows:
U.S./Canada dial-in: (800)
260-0712International dial-in: (612) 288-0318Passcode: 421533
When available, a replay of the call can be accessed until 11:59
p.m. ET on May 11, 2017. The replay dial-in numbers are as
follows:
U.S./Canada dial-in: (800)
475-6701International dial-in: (320) 365-3844Passcode: 421533
American Tower will also sponsor a live simulcast and replay of
the call on its website, www.americantower.com.
About American TowerAmerican Tower, one of the largest
global REITs, is a leading independent owner, operator and
developer of multitenant communications real estate with a
portfolio of over 147,000 communications sites. For more
information about American Tower, please visit the “Earnings
Materials” and “Company & Industry Resources” sections of our
investor relations website at www.americantower.com.
Non-GAAP and Defined Financial MeasuresIn addition to the
results prepared in accordance with generally accepted accounting
principles in the United States (GAAP) provided throughout this
press release, the Company has presented the following Non-GAAP and
Defined Financial Measures: Gross Margin, Operating Profit,
Operating Profit Margin, Adjusted EBITDA, Adjusted EBITDA Margin,
NAREIT Funds From Operations (FFO) attributable to American Tower
Corporation common stockholders, Consolidated Adjusted Funds From
Operations (AFFO), AFFO attributable to American Tower Corporation
common stockholders, Consolidated AFFO per Share, AFFO attributable
to American Tower Corporation common stockholders per Share, Free
Cash Flow, Net Debt and Net Leverage Ratio. In addition, the
Company presents: Tenant Billings, Tenant Billings Growth, Organic
Tenant Billings Growth and New Site Tenant Billings Growth.
These measures are not intended to replace financial performance
measures determined in accordance with GAAP. Rather, they are
presented as additional information because management believes
they are useful indicators of the current financial performance of
the Company's core businesses and are commonly used across its
industry peer group. As outlined in detail below, the Company
believes that these measures can assist in comparing company
performance on a consistent basis irrespective of depreciation and
amortization or capital structure, while also providing valuable
incremental insight into the underlying operating trends of its
business.
Depreciation and amortization can vary significantly among
companies depending on accounting methods, particularly where
acquisitions or non-operating factors, including historical cost
basis, are involved. Notwithstanding the foregoing, the Company's
Non-GAAP and Defined Financial measures may not be comparable to
similarly titled measures used by other companies.
Revenue Components
In addition to reporting total revenue, the Company believes
that providing transparency around the components of its revenue
provides investors with insight into the indicators of the
underlying demand for, and operating performance of, its real
estate portfolio. Accordingly, the Company has provided disclosure
of the following revenue components: (i) Tenant Billings, (ii) New
Site Tenant Billings; (iii) Organic Tenant Billings; (iv)
International pass-through revenue; (v) Straight-line revenue; (vi)
Pre-paid amortization revenue; and (vii) Other revenue.
Tenant Billings: The majority of the Company’s revenue is
generated from non-cancellable, long-term tenant leases. Revenue
from Tenant Billings reflects several key aspects of the Company’s
real estate business: (i) “colocations/amendments” reflects new
tenant leases for space on existing towers and amendments to
existing leases to add additional tenant equipment; (ii)
“escalations” reflects contractual increases in billing rates,
which are typically tied to fixed percentages or a variable
percentage based on a consumer price index; (iii) “cancellations”
reflects the impact of tenant lease terminations or non-renewals
or, in limited circumstances, when the lease rates on existing
leases are reduced; and (iv) “new sites” reflects the impact of new
property construction and acquisitions.
New Site Tenant Billings: Day-one Tenant Billings
associated with sites that have been built or acquired since the
beginning of the prior-year period. Incremental
colocations/amendments, escalations or cancellations that occur on
these sites after the date of their initial addition to our
portfolio are not included in New Site Tenant Billings. The Company
believes providing New Site Tenant Billings enhances an investor’s
ability to analyze our existing real estate portfolio growth as
well as our development program growth, as the Company’s
construction and acquisition activities can drive variability in
growth rates from period to period.
Organic Tenant Billings: Tenant Billings on sites that
the Company has owned since the beginning of the prior-year period,
as well as Tenant Billings activity on new sites that occurred
after the date of their initial addition to the Company’s
portfolio.
International pass-through revenue: A portion of the
Company’s pass-through revenue is based on power and fuel expense
reimbursements and therefore subject to fluctuations in fuel
prices. As a result, revenue growth rates may fluctuate depending
on the market price for fuel in any given period, which is not
representative of the Company’s real estate business and its
economic exposure to power and fuel costs. Furthermore, this
expense reimbursement mitigates the economic impact associated with
fluctuations in operating expenses, such as power and fuel costs
and land rents in certain of the Company’s markets. As a result,
the Company believes that it is appropriate to provide insight into
the impact of pass-through revenue on certain revenue growth
rates.
Straight-line revenue: Under GAAP, the Company recognizes
revenue on a straight-line basis over the term of the contract for
certain of its tenant leases. Due to the Company’s significant base
of non-cancellable, long-term tenant leases, this can result in
significant fluctuations in growth rates upon tenant lease signings
and renewals (typically increases), when amounts billed or received
upfront upon these events are initially deferred. These signings
and renewals are only a portion of the Company’s underlying
business growth and can distort the underlying performance of our
Tenant Billings Growth. As a result, the Company believes that it
is appropriate to provide insight into the impact of straight-line
revenue on certain growth rates in revenue and select other
measures.
Pre-paid amortization revenue: The Company recovers a
portion of the costs it incurs for the redevelopment and
development of its properties from its tenants. These upfront
payments are then amortized over the initial term of the
corresponding tenant lease. Given this amortization is not
necessarily directly representative of underlying leasing activity
on our real estate portfolio, (i.e.: does not have a renewal option
or escalation as our tenant leases do) the Company believes that it
is appropriate to provide insight into the impact of pre-paid
amortization revenue on certain revenue growth rates to provide
transparency into the underlying performance of our real estate
business.
Foreign currency exchange impact: The majority of the
Company’s international revenue and operating expenses are
denominated in each respective country’s local currency. As a
result, foreign currency fluctuations may distort the underlying
performance of our real estate business from period to period,
depending on the movement of foreign currency exchange rates versus
the U.S. Dollar. The Company believes it is appropriate to quantify
the impact of foreign currency exchange fluctuations on its
reported growth to provide transparency into the underlying
performance of its real estate business.
Other revenue: Typically an immaterial portion of the
Company’s total revenue, Other revenue represents revenue not
captured by the above listed terms and can include items such as
tenant settlements.
Non-GAAP and Defined Financial Measure
Definitions
Tenant Billings Growth: The increase or decrease
resulting from a comparison of Tenant Billings for a current period
with Tenant Billings for the corresponding prior-year period, in
each case adjusted for foreign currency exchange fluctuations. The
Company believes this measure provides valuable insight into the
growth in recurring Tenant Billings and underlying demand for its
real estate portfolio.
Organic Tenant Billings Growth: The portion of Tenant
Billings Growth attributable to Organic Tenant Billings. The
Company believes that organic growth is a useful measure of its
ability to add tenancy and incremental revenue to its assets for
the reported period, which enables investors and analysts to gain
additional insight into the relative attractiveness, and therefore
the value, of the Company’s property assets.
New Site Tenant Billings Growth: The portion of Tenant
Billings Growth attributable to New Site Tenant Billings. The
Company believes this measure provides valuable insight into the
growth attributable to Tenant Billings from recently acquired or
constructed properties.
Gross Margin: Revenues less operating expenses, excluding
stock-based compensation expense recorded in costs of operations,
depreciation, amortization and accretion, selling, general,
administrative and development expense and other operating
expenses. The Company believes this measure provides valuable
insight into the site-level profitability of its assets.
Operating Profit: Gross Margin less selling, general,
administrative and development expense, excluding stock-based
compensation expense and corporate expenses. The Company believes
this measure provides valuable insight into the site-level
profitability of its assets while also taking into account the
overhead expenses required to manage each of its operating
segments.
For segment reporting purposes, the Latin America property
segment Operating Profit and Gross Margin also include interest
income, TV Azteca, net. Operating Profit and Gross Margin are
before interest income, interest expense, gain (loss) on retirement
of long-term obligations, other income (expense), net income (loss)
attributable to noncontrolling interest and income tax benefit
(provision).
Operating Profit Margin: The percentage that results from
dividing Operating Profit by revenue.
Adjusted EBITDA: Net income before income (loss) from
equity method investments, income tax benefit (provision), other
income (expense), gain (loss) on retirement of long-term
obligations, interest expense, interest income, other operating
income (expense), depreciation, amortization and accretion and
stock-based compensation expense. The Company believes this measure
provides valuable insight into the profitability of its operations
while at the same time taking into account the central overhead
expenses required to manage its global operations. In addition, it
is a widely used performance measure across our telecommunications
real estate sector.
Adjusted EBITDA Margin: The percentage that results from
dividing Adjusted EBITDA by total revenue.
NAREIT Funds From Operations (FFO), as defined by the
National Association of Real Estate Investment Trusts (NAREIT),
attributable to American Tower Corporation common stockholders:
Net income before gains or losses from the sale or disposal of real
estate, real estate related impairment charges, real estate related
depreciation, amortization and accretion and dividends on preferred
stock, and including adjustments for (i) unconsolidated affiliates
and (ii) noncontrolling interests. The Company believes this
measure provides valuable insight into the operating performance of
its property assets by excluding the charges described above,
particularly depreciation expenses, given the high initial,
up-front capital intensity of the Company’s operating model. In
addition, it is a widely used performance measure across our
telecommunications real estate sector.
Consolidated Adjusted Funds From Operations (AFFO):
NAREIT FFO attributable to American Tower Corporation common
stockholders before (i) straight-line revenue and expense, (ii)
stock-based compensation expense, (iii) the deferred portion of
income tax, (iv) non-real estate related depreciation, amortization
and accretion, (v) amortization of deferred financing costs,
capitalized interest, debt discounts and premiums and long-term
deferred interest charges, (vi) other income (expense), (vii) gain
(loss) on retirement of long-term obligations, (viii) other
operating income (expense), and adjustments for (ix) unconsolidated
affiliates and (x) noncontrolling interests, less cash payments
related to capital improvements and cash payments related to
corporate capital expenditures. The Company believes this measure
provides valuable insight into the operating performance of its
property assets by further adjusting the NAREIT FFO attributable to
American Tower Corporation common stockholders metric to exclude
the factors outlined above, which if unadjusted, may cause material
fluctuations in NAREIT FFO attributable to American Tower
Corporation common stockholders growth from period to period that
would not be representative of the underlying performance of our
property assets in those periods. In addition, it is a widely used
performance measure across our telecommunications real estate
sector.
Adjusted Funds From Operations (AFFO) attributable to
American Tower Corporation common stockholders: Consolidated
AFFO, excluding the impact of noncontrolling interests on both
NAREIT FFO attributable to American Tower Corporation common
stockholders as well as the other line items included in the
calculation of Consolidated AFFO. The Company believes that
providing this additional metric enhances transparency, given a
significantly larger minority interest component of its business as
a result of the Company’s Viom transaction and European joint
venture with PGGM, which both closed in 2016.
Consolidated AFFO per Share: Consolidated AFFO divided by
the diluted weighted average common shares outstanding.
AFFO attributable to American Tower Corporation common
stockholders per Share: AFFO attributable to American Tower
Corporation common stockholders divided by the diluted weighted
average common shares outstanding.
Free Cash Flow: Cash provided by operating activities
less total cash capital expenditures, including payments on capital
leases of property and equipment. The Company believes that Free
Cash Flow is useful to investors as the basis for comparing our
performance and coverage ratios with other companies in its
industry, although this measure of Free Cash Flow may not be
directly comparable to similar measures used by other
companies.
Net Debt: Total long-term debt less cash and cash
equivalents.
Net Leverage Ratio: Net Debt divided by the quarter’s
annualized Adjusted EBITDA (the quarter’s Adjusted EBITDA
multiplied by four). The Company believes that including this
calculation is important for investors and analysts given it is a
critical component underlying its credit agency ratings.
Cautionary Language Regarding Forward-Looking
StatementsThis press release contains “forward-looking
statements” concerning our goals, beliefs, expectations,
strategies, objectives, plans, future operating results and
underlying assumptions, and other statements that are not
necessarily based on historical facts. Examples of these statements
include, but are not limited to, statements regarding our full year
2017 outlook and other targets, foreign currency exchange rates,
our expectations for the closing of signed acquisitions and our
expectations regarding the leasing demand for communications real
estate. Actual results may differ materially from those indicated
in our forward-looking statements as a result of various important
factors, including: (1) decrease in demand for our communications
infrastructure would materially and adversely affect our operating
results, and we cannot control that demand; (2) increasing
competition for tenants in the tower industry may materially and
adversely affect our revenue; (3) if our tenants share site
infrastructure to a significant degree or consolidate or merge, our
growth, revenue and ability to generate positive cash flows could
be materially and adversely affected; (4) our business is subject
to government and tax regulations and changes in current or future
laws or regulations could restrict our ability to operate our
business as we currently do; (5) our foreign operations are subject
to economic, political and other risks that could materially and
adversely affect our revenues or financial position, including
risks associated with fluctuations in foreign currency exchange
rates; (6) our expansion initiatives involve a number of risks and
uncertainties, including those related to integrating acquired or
leased assets, that could adversely affect our operating results,
disrupt our operations or expose us to additional risk; (7)
competition for assets could adversely affect our ability to
achieve our return on investment criteria; (8) new technologies or
changes in a tenant’s business model could make our tower leasing
business less desirable and result in decreasing revenues; (9) our
leverage and debt service obligations may materially and adversely
affect our ability to raise additional financing to fund capital
expenditures, future growth and expansion initiatives and to
satisfy our distribution requirements; (10) a substantial portion
of our revenue is derived from a small number of tenants, and we
are sensitive to changes in the creditworthiness and financial
strength of our tenants; (11) if we fail to remain qualified for
taxation as a REIT, we will be subject to tax at corporate income
tax rates, which may substantially reduce funds otherwise
available, and even if we qualify for taxation as a REIT, we may
face tax liabilities that impact earnings and available cash flow;
(12) complying with REIT requirements may limit our flexibility or
cause us to forego otherwise attractive opportunities; (13)
restrictive covenants in the agreements related to our
securitization transactions, our credit facilities and our debt
securities and the terms of our preferred stock could materially
and adversely affect our business by limiting flexibility, and we
may be prohibited from paying dividends on our common stock, which
may jeopardize our qualification for taxation as a REIT; (14) if we
are unable to protect our rights to the land under our towers, it
could adversely affect our business and operating results; (15) if
we are unable or choose not to exercise our rights to purchase
towers that are subject to lease and sublease agreements at the end
of the applicable period, our cash flows derived from such towers
will be eliminated; (16) our costs could increase and our revenues
could decrease due to perceived health risks from radio emissions,
especially if these perceived risks are substantiated; (17) we
could have liability under environmental and occupational safety
and health laws; and (18) our towers, data centers or computer
systems may be affected by natural disasters and other unforeseen
events for which our insurance may not provide adequate coverage.
For additional information regarding factors that may cause actual
results to differ materially from those indicated in our
forward-looking statements, we refer you to the information
contained in Item 1A of our Form 10-K for the year ended December
31, 2016, under the caption “Risk Factors”. We undertake no
obligation to update the information contained in this press
release to reflect subsequently occurring events or
circumstances.
UNAUDITED CONSOLIDATED BALANCE SHEETS(In thousands)
March 31, 2017 December 31, 2016
ASSETS CURRENT ASSETS: Cash and cash equivalents $ 712,778 $
787,161 Restricted cash 145,478 149,281 Short-term investments
5,294 4,026 Accounts receivable, net 369,972 308,369 Prepaid and
other current assets 477,665 441,033 Total current assets 1,711,187
1,689,870 PROPERTY AND EQUIPMENT, net 10,717,160 10,517,258
GOODWILL 5,379,830 5,070,680 OTHER INTANGIBLE ASSETS, net
11,826,886 11,274,611 DEFERRED TAX ASSET 206,331 195,678 DEFERRED
RENT ASSET 1,352,642 1,289,530 NOTES RECEIVABLE AND OTHER
NON-CURRENT ASSETS 863,353 841,523 TOTAL $ 32,057,389 $ 30,879,150
LIABILITIES CURRENT LIABILITIES: Accounts payable $ 109,424
$ 118,666 Accrued expenses 742,500 620,563 Distributions payable
267,369 250,550 Accrued interest 98,220 157,297 Current portion of
long-term obligations 1,707,330 238,806 Unearned revenue 284,215
245,387 Total current liabilities 3,209,058 1,631,269 LONG-TERM
OBLIGATIONS 17,182,754 18,294,659 ASSET RETIREMENT OBLIGATIONS
1,011,071 965,507 DEFERRED TAX LIABILITY 952,893 777,572 OTHER
NON-CURRENT LIABILITIES 1,186,785 1,142,723 Total liabilities
23,542,561 22,811,730
COMMITMENTS AND CONTINGENCIES
REDEEMABLE NONCONTROLLING INTERESTS 1,129,988 1,091,220
EQUITY: Preferred stock, Series A 60 60 Preferred stock,
Series B 14 14 Common stock 4,309 4,299 Additional paid-in capital
10,094,017 10,043,559 Distributions in excess of earnings
(1,053,706) (1,076,965) Accumulated other comprehensive loss
(1,759,489) (1,999,332) Treasury stock (432,731) (207,740) Total
American Tower Corporation equity 6,852,474 6,763,895
Noncontrolling interests 532,366 212,305 Total equity 7,384,840
6,976,200 TOTAL $ 32,057,389 $ 30,879,150
UNAUDITED CONSOLIDATED STATEMENTS OF OPERATIONS(In
thousands, except per share data)
Three Months Ended March 31, 2017
2016 REVENUES: Property $ 1,594,064 $ 1,267,651
Services 22,174 21,396 Total operating revenues
1,616,238 1,289,047 OPERATING EXPENSES: Costs of
operations (exclusive of items shown separately below): Property
(including stock-based compensation expense of $655 and $507,
respectively) 486,167 342,290 Services (including stock-based
compensation expense of $223 and $151, respectively) 6,541 9,155
Depreciation, amortization and accretion 421,140 341,634
Selling, general, administrative and
development expense (including stock-based
compensation expense of $35,344 and
$27,421, respectively)
164,796 135,315 Other operating expenses 6,215 8,800
Total operating expenses 1,084,859 837,194 OPERATING
INCOME 531,379 451,853 OTHER INCOME (EXPENSE):
Interest income, TV Azteca, net of interest expense of $291 and
$283, respectively 2,700 2,716 Interest income 9,927 3,534 Interest
expense (183,695 ) (159,880 ) Loss on retirement of long-term
obligations (55,440 ) — Other expense (including unrealized foreign
currency gains of $27,951 and $29,362, respectively) 29,302
12,208 Total other expense (197,206 ) (141,422 ) INCOME FROM
CONTINUING OPERATIONS BEFORE INCOME TAXES 334,173 310,431 Income
tax provision (26,763 ) (29,124 ) NET INCOME 307,410 281,307 Net
loss (income) attributable to noncontrolling interests 8,670
(6,148 ) NET INCOME ATTRIBUTABLE TO AMERICAN TOWER CORPORATION
STOCKHOLDERS 316,080 275,159 Dividends on preferred stock (26,781 )
(26,781 ) NET INCOME ATTRIBUTABLE TO AMERICAN TOWER CORPORATION
COMMON STOCKHOLDERS $ 289,299 $ 248,378 NET INCOME
PER COMMON SHARE AMOUNTS: Basic net income attributable to American
Tower Corporation common stockholders $ 0.68 $ 0.59
Diluted net income attributable to American Tower Corporation
common stockholders $ 0.67 $ 0.58 WEIGHTED AVERAGE
COMMON SHARES OUTSTANDING: BASIC 427,279 424,059
DILUTED 430,199 427,888
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH
FLOWS(In thousands)
Three Months Ended March 31, 2017
2016 CASH FLOWS FROM OPERATING ACTIVITIES: Net income
$ 307,410 $ 281,307 Adjustments to reconcile net income to cash
provided by operating activities: Depreciation, amortization and
accretion 421,140 341,634 Stock-based compensation expense 36,222
28,079 Loss on early retirement of long-term obligations 55,440 —
Other non-cash items reflected in statements of operations (45,258
) 12,451 Decrease in restricted cash 4,918 3,005 Increase in net
deferred rent balances (35,057 ) (16,171 ) Increase in assets
(40,411 ) (30,535 ) Decrease in liabilities (21,307 ) (56,258 )
Cash provided by operating activities 683,097 563,512
CASH FLOWS FROM INVESTING ACTIVITIES: Payments for purchase of
property and equipment and construction activities (168,138 )
(154,222 ) Payments for acquisitions, net of cash acquired (777,755
) (873 ) Payment for Verizon transaction — (4,655 ) Proceeds from
sales of short-term investments and other non-current assets 3,751
1,184 Deposits, restricted cash, investments and other 21,848
(26,950 ) Cash used for investing activities (920,294 )
(185,516 ) CASH FLOWS FROM FINANCING ACTIVITIES: Repayments of
short-term borrowings, net — (8,636 ) Borrowings under credit
facilities 1,997,039 31,504 Proceeds from issuance of senior notes,
net — 1,247,463 Repayments of notes payable, credit facilities,
senior notes and capital leases(1) (1,633,408 ) (1,388,613 )
Contributions from (distributions to) noncontrolling interest
holders, net 265,392 (274 ) Purchases of common stock (147,173 ) —
Proceeds from stock options 36,933 14,582 Distributions paid on
preferred stock (26,781 ) (26,781 ) Distributions paid on common
stock (250,436 ) (209,984 ) Payment for early retirement of
long-term obligations (61,764 ) — Deferred financing costs and
other financing activities (21,935 ) (25,325 ) Cash provided by
(used for) financing activities 157,867 (366,064 ) Net
effect of changes in foreign currency exchange rates on cash and
cash equivalents 4,947 3,785 NET (DECREASE) INCREASE
IN CASH AND CASH EQUIVALENTS (74,383 ) 15,717 CASH AND CASH
EQUIVALENTS, BEGINNING OF PERIOD 787,161 320,686 CASH
AND CASH EQUIVALENTS, END OF PERIOD $ 712,778 $ 336,403
CASH PAID FOR INCOME TAXES, NET $ 23,074 $ 19,368
CASH PAID FOR INTEREST $ 230,977 $ 177,574
_______________
(1) Three months ended March 31, 2017 and March 31, 2016
include $9.2 million and $4.9 million, respectively, of payments on
capital leases of property and equipment.
UNAUDITED CONSOLIDATED RESULTS FROM OPERATIONS, BY
SEGMENT($ in millions, totals may not add due to rounding.)
Three Months Ended March 31, 2017
Property Services Total
U.S.
LatinAmerica
Asia EMEA
TotalInternational
TotalProperty
Segment revenues $ 892 $ 276 $ 276 $ 150 $ 702 $ 1,594 $ 22 $ 1,616
Segment operating expenses(1) 181 93 149 61 304 486 6 492 Interest
income, TV Azteca, net — 3 — — 3
3 — 3 Segment Gross Margin $ 711 $ 186
$ 126 $ 89 $ 401 $ 1,111 $ 16
$ 1,127 Segment SG&A(1) 35 19 20
16 56 90 3 93 Segment
Operating Profit $ 676 $ 167 $ 106 $ 72
$ 345 $ 1,021 $ 13 $ 1,034 Segment
Operating Profit Margin 76 % 60 % 38 % 48 % 49 % 64 % 57 % 64 %
Revenue Growth 4.7 % 23.8 % 335.9 % 16.0 % 68.8 % 25.7 % 3.6
% 25.4 % Total Tenant Billings Growth 6.6 % 17.2 % 342.0 % 25.0 %
63.2 % 21.9 % Organic Tenant Billings Growth 6.5 % 12.2 % 28.5 %
11.4 % 14.1 % 8.6 %
Revenue
Components(2) Prior-Year Tenant Billings $ 771 $ 152 $
38 $ 94 $ 284 $ 1,055 Colocations/Amendments 40 9 13 5 26 66
Escalations 24 10 3 6 19 43 Cancellations (16 ) (1 ) (5 ) (1 ) (7 )
(23 ) Other 2 0 (0 ) 2 2 4
Organic Tenant Billings $ 821 $ 170 $ 49 $ 105
$ 324 $ 1,145 New Site Tenant Billings 1
8 119 13 139 140 Total
Tenant Billings $ 822 $ 178 $ 168 $ 118
$ 464 $ 1,286 Foreign Currency Exchange Impact(3) —
16 1 (6 ) 11 11 Total Tenant
Billings (Current Period) $ 822 $ 194 $ 169 $
112 $ 475 $ 1,297 Straight-Line Revenue
40 7 3 2 13 53 Prepaid Amortization Revenue 24 0 — 0 0 24 Other
Revenue 6 3 (6 ) (2 ) (5 ) 1 International Pass-Through Revenue —
64 109 50 224 224 Foreign Currency Exchange Impact(4) — 7
1 (12 ) (4 ) (4 ) Total Property Revenue (Current
Period) $ 892 $ 276 $ 276 $ 150 $ 702
$ 1,594
_______________
(1) Excludes stock-based compensation expense. (2) All
components of revenue, except those labeled current period, have
been translated at prior period foreign exchange rates. (3)
Reflects foreign currency exchange impact on all components of
Total Tenant Billings. (4) Reflects foreign currency exchange
impact on components of revenue, other than Total Tenant Billings.
UNAUDITED CONSOLIDATED RESULTS FROM OPERATIONS, BY SEGMENT
(CONTINUED)($ in millions, totals may not add due to
rounding.)
Three Months Ended March 31, 2016
Property Services Total
U.S.
LatinAmerica
Asia EMEA
TotalInternational
TotalProperty
Segment revenues $ 852 $ 223 $ 63 $ 130 $ 416 $ 1,268 $ 21 $ 1,289
Segment operating expenses(1) 178 75 33 56 164 342 9 351 Interest
income, TV Azteca, net — 3 — — 3
3 — 3 Segment Gross Margin $ 674 $ 150
$ 30 $ 74 $ 255 $ 929 $ 12
$ 941 Segment SG&A(1) 37 15 7
16 37 75 3 78 Segment
Operating Profit $ 637 $ 136 $ 24 $ 58
$ 217 $ 854 $ 9 $ 863 Segment Operating
Profit Margin 75 % 61 % 37 % 45 % 52 % 67 % 44 % 67 %
Revenue Growth 18.6 % 5.5 % 10.7 % 71.0 % 20.8 % 19.3 % 25.8 % 19.4
% Total Tenant Billings Growth 19.6 % 25.8 % 22.1 % 84.2 % 38.7 %
24.9 % Organic Tenant Billings Growth 5.9 % 13.6 % 12.7 % 16.1 %
14.0 % 8.1 %
Revenue Components(2)
Prior-Year Tenant Billings $ 645 $ 157 $ 34 $ 57 $ 247 $ 892
Colocations/Amendments 30 10 4 6 20 50 Escalations 19 12 1 5 17 37
Cancellations (10 ) (1 ) (1 ) (0 ) (2 ) (12 ) Other (2 ) 1 0
(1 ) (0 ) (2 ) Organic Tenant Billings $ 682 $ 179
$ 38 $ 66 $ 282 $ 965 New Site
Tenant Billings 88 19 3 39 61
149 Total Tenant Billings $ 771 $ 198 $ 41
$ 104 $ 343 $ 1,114 Foreign Currency
Exchange Impact(3) — (46 ) (3 ) (10 ) (59 ) (59 ) Total
Tenant Billings (Current Period) $ 771 $ 152 $ 38
$ 94 $ 284 $ 1,055 Straight-Line
Revenue 21 12 0 1 13 34 Prepaid Amortization Revenue 22 0 — 0 1 22
Other Revenue 38 5 (0 ) 1 6 44 International Pass-Through Revenue —
74 27 36 138 138 Foreign Currency Exchange Impact(4) — (20 )
(2 ) (3 ) (25 ) (25 ) Total Property Revenue (Current Period) $ 852
$ 223 $ 63 $ 130 $ 416 $ 1,268
_______________
(1) Excludes stock-based compensation expense. (2) All
components of revenue, except those labeled current period, have
been translated at prior period foreign exchange rates. (3)
Reflects foreign currency exchange impact on all components of
Total Tenant Billings. (4) Reflects foreign currency exchange
impact on components of revenue, other than Total Tenant Billings.
UNAUDITED SELECTED CONSOLIDATED FINANCIAL INFORMATION($
in thousands, totals may not add due to rounding.)
The reconciliation of net income to Adjusted EBITDA and the
calculation of Adjusted EBITDA Margin are as follows:
Three Months Ended March 31, 2017
2016 Net income $ 307,410 $ 281,307 Income tax provision
26,763 29,124 Other expense (29,302 ) (12,208 ) Loss on retirement
of long-term obligations 55,440 — Interest expense 183,695 159,880
Interest income (9,927 ) (3,534 ) Other operating expenses 6,215
8,800 Depreciation, amortization and accretion 421,140 341,634
Stock-based compensation expense 36,222 28,079
Adjusted EBITDA $ 997,656 $ 833,082 Total revenue
1,616,238 1,289,047 Adjusted EBITDA Margin 62 % 65 %
The reconciliation of NAREIT FFO attributable to American
Tower Corporation common stockholders to net income and the
calculation of Consolidated AFFO, Consolidated AFFO per Share, AFFO
attributable to American Tower Corporation common stockholders and
AFFO attributable to American Tower Corporation common stockholders
per Share are presented below:
Three Months Ended March 31, 2017
2016 Net income $ 307,410 $ 281,307 Real estate related
depreciation, amortization and accretion 377,964 297,513 Losses
from sale or disposal of real estate and real estate related
impairment charges 7,370 4,602 Dividends on preferred stock (26,781
) (26,781 ) Adjustments for unconsolidated affiliates and
noncontrolling interests (31,654 ) (11,016 ) NAREIT FFO
attributable to AMT common stockholders $ 634,309 $ 545,625
Straight-line revenue (52,026 ) (32,008 ) Straight-line
expense 16,969 15,837 Stock-based compensation expense 36,222
28,079 Deferred portion of income tax 3,689 9,756 Non-real estate
related depreciation, amortization and accretion 43,176 44,121
Amortization of deferred financing costs,
capitalized interest and debt discounts and
premiums and long-term deferred interest
charges
6,034 7,429 Other expense(1) (29,302 ) (12,208 ) Loss on retirement
of long-term obligations 55,440 — Other operating (income)
expense(2) (1,155 ) 4,198 Capital improvement capital expenditures
(20,514 ) (16,724 ) Corporate capital expenditures (3,151 ) (2,667
) Adjustments for unconsolidated affiliates and noncontrolling
interests 31,654 11,016 Consolidated AFFO 721,345
602,454 Adjustments for unconsolidated affiliates and
noncontrolling interests(3) (40,789 ) (15,690 ) AFFO attributable
to AMT common stockholders $ 680,556 $ 586,764
Divided by weighted average diluted shares outstanding 430,199
427,888 Consolidated AFFO per Share $ 1.68 $
1.41 AFFO attributable to AMT common stockholders per Share
$ 1.58 $ 1.37
_______________
(1) Primarily includes realized and unrealized (gains)
losses on foreign currency exchange rate fluctuations. (2)
Primarily includes integration and acquisition-related costs. (3)
Includes adjustments for the impact on both NAREIT FFO attributable
to American Tower Corporation common stockholders as well as the
other line items included in the calculation of Consolidated AFFO.
View source
version on businesswire.com: http://www.businesswire.com/news/home/20170427005606/en/
American Tower CorporationLeah Stearns, 617-375-7500Senior Vice
President, Treasurer and Investor Relations
American Tower (NYSE:AMT)
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