CONSOLIDATED HIGHLIGHTS
First Quarter 2016
- Total revenue increased 19.4% to $1,289
million
- Property revenue increased 19.3% to
$1,268 million
- Adjusted EBITDA increased 15.1% to $833
million
- AFFO increased 17.3% to $602
million
American Tower Corporation (NYSE:AMT) today reported financial
results for the quarter ended March 31, 2016.
Jim Taiclet, American Tower’s Chief Executive Officer stated,
“The global proliferation of smartphones is driving significant
growth in subscriber demand for higher bandwidth applications. As a
result, during the first quarter, we continued to experience solid
leasing demand across our served markets as mobile operators invest
in their networks to manage key performance factors, including
coverage, capacity and peak network speed.
Additionally, in India, we recently closed our Viom transaction,
the latest step in our strategic initiative to diversify our
operations and further establish the Company as a leading global
provider of communications real estate in key free market
democracies around the globe. We remain focused on pursuing
disciplined investments like Viom as we aim to simultaneously
increase return on invested capital and generate double digit
growth in both our AFFO per Share and dividend. We believe this
strategy will drive compelling returns for stockholders over the
long term.”
CONSOLIDATED OPERATING RESULTS OVERVIEW
American Tower generated the following operating results for the
quarter ended March 31, 2016 (unless otherwise indicated, all
comparative information is presented against the quarter ended
March 31, 2015).
($ in millions, except
per share amounts)
Q1 2016 Growth Rate Total revenue
$ 1,289 19.4 % Total property revenue $ 1,268 19.3 % Property Gross
Margin $ 929 15.2 % Adjusted EBITDA $ 833 15.1 % Net income
attributable to AMT common stockholders $ 248 35.4 % Net income
attributable to AMT common stockholders per diluted share $ 0.58
28.9 % Property revenue Core Growth(1) 25.0 % Property revenue
Organic Core Growth(2) 8.7 % Property revenue Run-Rate Organic
Growth(3) 8.1 %
(1) Property revenue Core Growth reflects revenue growth
excluding the impacts of straight-line and pass-through revenue,
foreign currency exchange rate fluctuations and significant
one-time items.
(2) Q1 2016 Organic Core Growth excludes revenue growth
associated with properties that the Company has added to the
portfolio since the beginning of Q1 2015.
(3) See “Non-GAAP and Defined Financial Measures” below.
($ in millions, except
per share amounts)
Q1 2016 Growth Rate NAREIT Funds
From Operations (FFO) $ 546 32.8 % AFFO $ 602 17.3 % AFFO per Share
$ 1.41 12.8 % Cash provided by operating activities $ 564 10.5 %
Free Cash Flow(1) $ 404 15.3 %
(1) Free Cash Flow is defined as cash provided by operating
activities less total cash capital expenditures. Cash capital
expenditures in Q1 2016 include $4.9 million of payments on capital
leases of property and equipment, which are presented in the
condensed consolidated statement of cash flows under Repayments of
notes payable, credit facilities and capital leases.
Please refer to “Non-GAAP and Defined Financial Measures” below
for additional definitions. For additional financial information
and reconciliations to GAAP measures, please refer to the
“Unaudited Selected Consolidated Financial Information” and
“Unaudited Reconciliation to GAAP Measures and the Calculation of
Defined Financial Measures” below.
CAPITAL ALLOCATION OVERVIEW
Distributions – During the first quarter of 2016, the
Company declared the following regular cash distributions to its
common stockholders:
Common Stock Distributions Q1
2016(1) Distribution per share $ 0.51 Aggregate amount
(millions) $ 217 Year-over-year per share growth 21.4 %
(1) The dividend declared was paid in the second quarter of 2016
to stockholders of record as of the close of business on April 12,
2016.
In addition, the Company declared approximately $27 million in
preferred stock dividends during the first quarter of 2016.
Capital Expenditures – During the first quarter of 2016,
total capital expenditures were $159 million. For additional
capital expenditure details, please refer to the supplemental
disclosure package available on the Company’s website.
Acquisitions – During the first quarter of 2016, the
Company entered into a definitive agreement to acquire
approximately 1,350 communications sites from Bharti Airtel’s
subsidiary company, Airtel Tanzania Limited for total consideration
of approximately $179 million, subject to customary adjustments.
The transaction is expected to close during the second quarter of
2016, subject to customary closing conditions and regulatory
approval.
On April 21, 2016, the Company closed its previously announced
acquisition of a 51% controlling ownership interest in Viom
Networks Limited (“Viom”), which owns and operates over 42,000
sites in India. The total cash consideration for the Viom
acquisition was approximately 76 billion Indian Rupees (“INR”). The
Company also assumed approximately INR 51 billion of existing debt
at closing. The Company anticipates consolidating the full
financial results for Viom.
LEVERAGE AND FINANCING OVERVIEW
Leverage – For the quarter ended March 31, 2016, the
Company’s Net Leverage Ratio was approximately 5.0x net debt (total
debt less cash and cash equivalents) to first quarter 2016
annualized Adjusted EBITDA.
Calculation of Net Leverage
Ratio Three Months Ended ($ in millions)
March 31,
2016(1) Net Debt $ 16,686 First Quarter Annualized
Adjusted EBITDA 3,332 Net Leverage Ratio 5.0x
(1) Excludes the impact of Viom transaction, which closed in
April.
Liquidity – As of March 31, 2016, the Company had
approximately $3.2 billion of total liquidity, consisting of over
$0.3 billion in cash and cash equivalents, plus the ability to
borrow an aggregate of approximately $2.9 billion under its
revolving credit facilities, net of any outstanding letters of
credit.
Subsequent to the end of the first quarter, the Company borrowed
an incremental $1.3 billion under its revolving credit facilities,
which it primarily used to fund a portion of the Viom
transaction.
FULL YEAR 2016 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 29, 2016. 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 is raising the midpoint of its full year 2016
outlook for property revenue, Adjusted EBITDA and AFFO by $40
million, $25 million and $20 million, respectively.
The Company’s revised outlook is based on the following average
foreign currency exchange rates to 1.00 U.S. Dollar for the
remainder of 2016: (a) 3.90 Brazilian Reais; (b) 705
Chilean Pesos; (c) 3,230 Colombian Pesos; (d) 0.91 Euros;
(e) 4.00 Ghanaian Cedi; (f) 67.60 Indian Rupees;
(g) 17.60 Mexican Pesos; (h) 210 Nigerian Naira; (i) 3.50
Peruvian Soles; (j) 15.95 South African Rand; and
(k) 3,420 Ugandan Shillings.
Based on these assumptions, the Company’s current outlook
reflects favorable impacts of foreign currency fluctuations of
approximately $50 million for total property revenue, $30 million
for Adjusted EBITDA and $25 million for AFFO, as compared to the
Company’s previously issued full year outlook. Additional
information pertaining to the impact of foreign currency
fluctuations on the Company’s outlook has been provided in the
supplemental disclosure package available on its website.
The Company’s outlook also includes the estimated impact of the
Viom transaction, which closed on April 21, 2016. The transaction
is expected to contribute approximately $555 million in property
revenue and $215 million in Adjusted EBITDA to full year 2016
results, which is approximately $40 million and $20 million lower,
respectively, than the estimates included in the Company’s prior
outlook due to the delay in the closing of the transaction.
The Company’s outlook for 2016 reflects the
following:($ in millions)
Full Year
2016 Midpoint
Growth
Midpoint Core
Growth(1)
Total property revenue $ 5,585 to $
5,715 20.7 % 21.4 % Adjusted EBITDA(1) 3,460 to 3,550 14.3 % 20.4 %
AFFO(1) 2,380 to 2,470 12.8 % 17.2 % Net income 1,010 to 1,120 58.5
% N/A
(1) See “Non-GAAP and Defined Financial Measures” below.
The Company’s outlook for total property revenue reflects
the following, at the midpoint:
($ in millions)
Segment Organic
Core Pass-through
Straight-line Revenue
Growth(1)
Revenue(2)
Revenue(2)
U.S. property revenue $ 3,365 ~5.5% $ — $ 68 Total international
property revenue 2,285 ~12% 710 42 Total property
revenue $ 5,650 ~7% $ 710 $ 110
(1) See “Non-GAAP and Defined Financial Measures” below.
(2) Included in Segment Revenue totals but excluded from Core
Growth and Organic Core Growth.
The calculation of outlook midpoint
Core Growth is as follows:
(Totals may not add due to rounding.)
Total PropertyRevenue Adjusted
EBITDA(1) AFFO(1) Outlook midpoint Core
Growth 21.4 % 20.4 % 17.2 % Estimated impact of pass-through
revenues 4.7 % — % — % Estimated impact of fluctuations in foreign
currency exchange rates
(3.6)
%
(3.7)
%
(4.0 )% Estimated impact of straight-line revenue and expense
recognition
(1.7)
%
(2.1)
%
— % Estimated impact of significant one-time items
(0.2)
%
(0.3)
%
(0.4 )% Outlook midpoint growth 20.7 %
14.3
% 12.8 %
(1) See “Non-GAAP and Defined Financial Measures” below.
Total Property Revenue Core Growth
Components(1):
(Totals may not add due to rounding.)
Full Year 2016 Organic Core Growth ~7% New Property Core
Growth(2) ~14% Core Growth ~21%
(1) Reflects growth at the midpoint of outlook ranges.
(2) Reflects revenue growth at sites that have been under
American Tower’s ownership or control since the beginning of the
prior-year period.
Outlook
for Capital Expenditures: ($ in millions) (Totals may not add
due to rounding.)
Full Year 2016 Discretionary capital
projects(1) $ 170 to $ 200 Ground lease purchases 130 to 150
Start-up capital projects 90 to 110 Redevelopment 190 to 210
Capital improvement 110 to 120 Corporate 10 — 10 Total $ 700
to $ 800
(1) Includes the construction of approximately 2,500 to 3,000
communications sites globally.
Reconciliation of Outlook for Net Income to Adjusted
EBITDA: ($ in millions) (Totals may not
add due to rounding.)
Full Year 2016 Net income $ 1,010
to $ 1,120 Interest expense 745 to 715
Depreciation, amortization and accretion 1,450 to 1,480 Income tax
provision 130 to 120 Stock-based compensation expense 90 — 90
Other, including other operating expenses,
interest income, gain (loss) on retirement of long-term
obligations and other income (expense)
35 to 25 Adjusted EBITDA $ 3,460 to $ 3,550
Reconciliation of Outlook for Net Income to AFFO: ($
in millions) (Totals may not add due to
rounding.)
Full Year 2016 Net income $ 1,010
to $ 1,120 Straight-line revenue (110 ) — (110 )
Straight-line expense 60 — 60 Depreciation, amortization and
accretion 1,450 to 1,480 Stock-based compensation expense 90 — 90
Non-cash portion of tax provision 36 to 23
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), non-cash interest
related to joint venture shareholder loans and dividends on
preferred stock
(36 ) to (63 ) Capital improvement capital expenditures (110 ) to
(120 ) Corporate capital expenditures (10 ) — (10 ) AFFO $ 2,380
to $ 2,470
Conference Call Information
American Tower will host a conference call today at 8:30 a.m. ET
to discuss its financial results for the quarter ended
March 31, 2016 and its outlook for 2016. 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) 230-1074
International dial-in: (612) 234-9960 Passcode: 391078
When available, a replay of the call can be accessed until 11:59
p.m. ET on May 13, 2016. The replay dial-in numbers are as
follows:
U.S./Canada dial-in: (800) 475-6701
International dial-in: (320) 365-3844 Passcode: 391078
American Tower will also sponsor a live simulcast and replay of
the call on its website, www.americantower.com.
About American Tower
American 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 143,000
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 Measures
In 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, AFFO, AFFO
per Share, Core Growth, Organic Core Growth, New Property Core
Growth, Net Leverage Ratio and Run-Rate Revenue. The Company uses
Funds From Operations as defined by the National Association of
Real Estate Investment Trusts (NAREIT), referred to herein as
NAREIT Funds From Operations.
Beginning with the first quarter of 2016, the Company is
providing a new metric titled “Property revenue Run-Rate Organic
Growth” in addition to the existing “Property revenue Organic Core
Growth” metric. The Company defines Property revenue Run-Rate
Organic Growth as the increase or decrease, expressed as a
percentage, of Run-Rate Revenue resulting from property revenue
growth as compared to the prior-year period, excluding growth
attributable to day-one Run-Rate Revenue on new sites added after
the beginning of the prior-year period. Run-Rate Revenue excludes
the impact of foreign currency exchange rate fluctuations,
significant one-time items, straight-line revenues and the impact
of other non-Run Rate Revenue. Reconciliations of the Property
revenue Run-Rate Organic Growth metric by segment are included in
the segment disclosures on pages 10 and 11 of this press release,
as well as in the Company’s supplemental disclosure package
available on its website.
The Company defines Gross Margin as 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 defines Operating Profit as Gross
Margin less selling, general, administrative and development
expense, excluding stock-based compensation expense and corporate
expenses. For reporting purposes, the Latin America property
segment Operating Profit and Gross Margin also include interest
income, TV Azteca, net. These measures of Gross Margin and
Operating Profit are also 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). The Company defines
Operating Profit Margin as the percentage that results from
dividing Operating Profit by revenue. The Company defines Adjusted
EBITDA as 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 defines Adjusted EBITDA Margin as
the percentage that results from dividing Adjusted EBITDA by total
revenue. NAREIT Funds From Operations is defined as 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 interest. The Company defines AFFO as
NAREIT Funds From Operations before (i) straight-line revenue and
expense, (ii) stock-based compensation expense, (iii) the non-cash
portion of its tax provision, (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 interest, less cash payments related to capital
improvements and cash payments related to corporate capital
expenditures. The Company defines AFFO per Share as AFFO divided by
the diluted weighted average common shares outstanding. The Company
defines churn as revenue lost when a tenant cancels or does not
renew its lease or, in limited circumstances, when the lease rates
on existing leases are reduced. The Company defines Core Growth in
total property revenue, Adjusted EBITDA and AFFO as the increase or
decrease, expressed as a percentage, resulting from a comparison of
financial results for a current period with corresponding financial
results for the corresponding period in a prior-year, in each case,
excluding the impact of pass-through revenue (expense), where
applicable, straight-line revenue and expense recognition, foreign
currency exchange rate fluctuations and significant one-time items.
The Company defines Organic Core Growth in property revenue as the
increase or decrease, expressed as a percentage, resulting from a
comparison of financial results for a current period with
corresponding financial results for the corresponding period in a
prior-year, in each case, excluding the impact of pass-through
revenue (expense), straight-line revenue and expense recognition,
foreign currency exchange rate fluctuations, significant one-time
items and revenue associated with new properties that the Company
has added to the portfolio since the beginning of the prior-year
period. The Company defines New Property Core Growth in property
revenue as the increase or decrease, expressed as a percentage, on
the properties the Company has added to its portfolio since the
beginning of the prior-year period, in each case excluding the
impact of pass-through revenue (expense), straight-line revenue and
expense recognition, foreign currency exchange rate fluctuations
and significant one-time items. The Company defines Net Leverage
Ratio as net debt (total debt, less cash and cash equivalents)
divided by last quarter annualized Adjusted EBITDA. The Company
defines Run-Rate Revenue as primarily cash-based, recurring
revenues, typically tied to long-term tenant lease agreements that
in the absence of churn at the end of the contract term should
continue in the future, excluding pass-through revenue. 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. The Company believes that these measures can
assist in comparing company performances on a consistent basis
irrespective of depreciation and amortization or capital structure.
Depreciation and amortization can vary significantly among
companies depending on accounting methods, particularly where
acquisitions or non-operating factors, including historical cost
bases, are involved. Notwithstanding the foregoing, the Company's
measures of Gross Margin, Operating Profit, Operating Profit
Margin, Adjusted EBITDA, Adjusted EBITDA Margin, NAREIT Funds From
Operations, AFFO, AFFO per Share, Core Growth, Organic Core Growth,
New Property Core Growth, Net Leverage Ratio, Run-Rate Revenue and
Property revenue Run-Rate Organic Growth may not be comparable to
similarly titled measures used by other companies.
Cautionary Language Regarding Forward-Looking
Statements
This 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 2016 outlook,
foreign currency exchange rates, our expectation regarding the
leasing demand for communications real estate and our expectations
for the closing of signed acquisitions and the impact of recently
closed acquisitions. 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 sites would materially and adversely affect our
operating results, and we cannot control that demand; (2) 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; (3)
increasing competition for tenants in the tower industry may
materially and adversely affect our pricing; (4) competition for
assets could adversely affect our ability to achieve our return on
investment criteria; (5) 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; (6) our leverage and debt service obligations may
materially and adversely affect us, including our ability to raise
additional financing to fund capital expenditures, future growth
and expansion initiatives and to satisfy our distribution
requirements; (7) our expansion initiatives involve a number of
risks and uncertainties, including those related to integration of
acquired or leased assets, that could adversely affect our
operating results, disrupt our operations or expose us to
additional risk; (8) 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; (9) new technologies or changes in a tenant’s business model
could make our tower leasing business less desirable and result in
decreasing revenues; (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) if we are unable to
protect our rights to the land under our towers, it could adversely
affect our business and operating results; (14) 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; (15) 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; (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, 2015, 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, 2016 December 31, 2015 ASSETS
CURRENT ASSETS: Cash and cash equivalents $ 336,403 $ 320,686
Restricted cash 140,865 142,193 Accounts receivable, net 217,457
227,354 Prepaid and other current assets 341,791 306,235
Total current assets 1,036,516 996,468
PROPERTY AND EQUIPMENT, net 9,917,985 9,866,424 GOODWILL 4,123,401
4,091,805 OTHER INTANGIBLE ASSETS, net 9,813,990 9,837,876 DEFERRED
INCOME TAXES 216,643 212,041 DEFERRED RENT ASSET 1,201,841
1,166,755 NOTES RECEIVABLE AND OTHER NON-CURRENT ASSETS 753,939
732,903 TOTAL $ 27,064,315 $ 26,904,272
LIABILITIES AND EQUITY CURRENT LIABILITIES: Accounts payable
$ 94,051 $ 96,714 Accrued expenses 437,546 516,413 Distributions
payable 218,420 210,027 Accrued interest 87,899 115,672 Current
portion of long-term obligations 137,853 50,202 Unearned revenue
222,387 211,001
Total current liabilities
1,198,156 1,200,029 LONG-TERM OBLIGATIONS 16,884,242
17,068,807 ASSET RETIREMENT OBLIGATIONS 888,040 856,936 OTHER
NON-CURRENT LIABILITIES 1,093,662 1,065,682 Total
liabilities 20,064,100 20,191,454
COMMITMENTS AND
CONTINGENCIES EQUITY: Preferred stock, Series A 60 60
Preferred stock, Series B 14 14 Common stock 4,273 4,267 Additional
paid-in capital 9,714,952 9,690,609 Distributions in excess of
earnings (967,718 ) (998,535 ) Accumulated other comprehensive loss
(1,610,592 ) (1,836,996 ) Treasury stock (207,740 ) (207,740 )
Total American Tower Corporation equity 6,933,249 6,651,679
Noncontrolling interest 66,966 61,139 Total equity
7,000,215 6,712,818 TOTAL $ 27,064,315 $
26,904,272
UNAUDITED
CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except per share data)
Three Months Ended March 31, 2016
2015 REVENUES: Property $ 1,267,651 $ 1,062,180
Services 21,396 17,010 Total operating revenues
1,289,047 1,079,190 OPERATING EXPENSES: Costs of
operations (exclusive of items shown separately below):
Property (including stock-based
compensation expense of $507 and $432,
respectively)
342,290 259,257
Services (including stock-based
compensation expense of $151 and $139,
respectively)
9,155 5,383 Depreciation, amortization and accretion 341,634
263,520
Selling, general, administrative and
development expense (including stock-based
compensation expense of $27,421 and
$29,290, respectively)
135,315 123,290 Other operating expenses 8,800 7,774
Total operating expenses
837,194 659,224 OPERATING INCOME 451,853
419,966 OTHER INCOME (EXPENSE): Interest income, TV Azteca,
net 2,716 2,596 Interest income 3,534 2,964 Interest expense
(159,880 ) (147,934 ) Loss on retirement of long-term obligations —
(3,725 )
Other income (expense) (including
unrealized foreign currency gains (losses) of $29,362
and ($55,468), respectively)
12,208 (54,503 ) Total other expense (141,422 ) (200,602 )
INCOME FROM CONTINUING OPERATIONS BEFORE INCOME TAXES 310,431
219,364 Income tax provision (29,124 ) (23,872 ) NET INCOME 281,307
195,492 Net income attributable to noncontrolling interest (6,148 )
(2,175 ) NET INCOME ATTRIBUTABLE TO AMERICAN TOWER CORPORATION
STOCKHOLDERS
275,159 193,317 Dividends on preferred stock (26,781 ) (9,819 ) NET
INCOME ATTRIBUTABLE TO AMERICAN TOWER CORPORATION COMMON
STOCKHOLDERS $ 248,378 $ 183,498 NET INCOME PER
COMMON SHARE AMOUNTS: Basic net income attributable to American
Tower Corporation common stockholders $ 0.59 $ 0.45
Diluted net income attributable to American Tower Corporation
common stockholders $ 0.58 $ 0.45 WEIGHTED AVERAGE
COMMON SHARES OUTSTANDING: BASIC 424,059 405,111
DILUTED 427,888 409,399
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)
Three Months Ended March 31, 2016
2015 CASH FLOWS FROM OPERATING ACTIVITIES: Net income
$ 281,307 $ 195,492 Adjustments to reconcile net income to cash
provided by operating activities: Stock-based compensation expense
28,079 29,861 Depreciation, amortization and accretion 341,634
263,520 Loss on early retirement of long-term obligations — 3,725
Other non-cash items reflected in statements of operations 12,451
66,309 Increase in net deferred rent asset (16,171 ) (25,074 )
Decrease in restricted cash 3,005 28,180 Increase in assets (30,535
) (2,779 ) Decrease in liabilities (56,258 ) (49,304 ) Cash
provided by operating activities 563,512 509,930 CASH
FLOWS FROM INVESTING ACTIVITIES: Payments for purchase of property
and equipment and construction activities (154,222 ) (159,184 )
Payments for acquisitions, net of cash acquired (873 ) (20,946 )
Payment for Verizon transaction (4,655 ) (5,058,019 ) Proceeds from
sales of short-term investments and other non-current assets 1,184
72,684 Payments for short-term investments — (82,557 ) Deposits,
restricted cash, investments and other (26,950 ) (1,397 ) Cash from
investing activities (185,516 ) (5,249,419 ) CASH FLOWS FROM
FINANCING ACTIVITIES: Repayments of short-term borrowings, net
(8,636 ) — Borrowings under credit facilities 31,504 3,150,000
Proceeds from issuance of senior notes, net 1,247,463 — Proceeds
from term loan — 500,000 Repayments of notes payable, credit
facilities and capital leases(1) (1,388,613 ) (2,490,771 )
Distributions to noncontrolling interest holders, net (274 ) (137 )
Proceeds from stock options 14,582 5,106 Proceeds from the issuance
of common stock, net — 2,440,390 Proceeds from the issuance of
preferred stock, net — 1,338,009 Deferred financing costs and other
financing activities (25,325 ) (22,558 ) Distributions paid on
preferred stock (26,781 ) (7,875 ) Distributions paid on common
stock (209,984 ) (152,037 ) Cash (used for) provided by financing
activities (366,064 ) 4,760,127 Net effect of changes in
foreign currency exchange rates on cash and cash equivalents 3,785
(10,730 ) NET INCREASE IN CASH AND CASH EQUIVALENTS 15,717
9,908 CASH AND CASH EQUIVALENTS, BEGINNING OF YEAR 320,686
313,492 CASH AND CASH EQUIVALENTS, END OF YEAR $
336,403 $ 323,400 CASH PAID FOR INCOME TAXES, NET $
19,368 $ 14,714 CASH PAID FOR INTEREST $ 177,574
$ 199,022
(1) Q1 2016 includes $4.9 million of payments on capital leases
of property and equipment.
UNAUDITED CONSOLIDATED RESULTS FROM
OPERATIONS, BY SEGMENT
($ in millions. Totals may not add due to
rounding.)
Three months ended March 31, 2016 Property
Services Total
U.S. Asia EMEA
Latin
America
Total
International
Total
Property
Segment revenues $ 852 $ 63 $ 130 $ 223 $ 416 $ 1,268 $ 21 $ 1,289
Segment operating expenses(1) 178 33 56 75 164 342 9 351 Interest
income, TV Azteca, net — — — 3 3
3 — 3 Segment Gross Margin 674 30
74 150 255 929 12 941
Segment SG&A(1) 37 7 16 15
37 75 3 78 Segment Operating Profit $
637 $ 24 $ 58 $ 136 $ 217 $ 854
$ 9 $ 863 Segment Operating Profit Margin 75 %
37 % 45 % 61 % 52 % 67 % 44 % 67 % Core Growth 20.2 % 22.1 %
84.2 % 25.2 % 38.3 % 25.0 % New Property Core Growth 13.1 % 9.8 %
70.2 % 12.1 % 25.0 % 16.3 % Organic Core Growth 7.1 % 12.3 % 14.0 %
13.2 % 13.2 % 8.7 % Property revenue Run-Rate Organic Growth 5.9 %
12.7 % 16.1 % 13.6 % 14.0 % 8.1 %
Revenue
Components(2) Prior-Year Run-Rate Revenue $ 645 $ 34 $
57 $ 157 $ 247 $ 892 Colocations/Amendments 30 4 6 10 20 50
Escalations 19 1 5 12 17 37 Cancellations (10 ) (1 ) (0) (1 ) (2 )
(12 ) Other Run-Rate (2 ) 0 (1 ) 1 0 (2 )
Organic Run-Rate Revenue $ 682 $ 38 $ 66 $ 179
$ 282 $ 965 New Sites 88 3 39
19 61 149 Total Run-Rate Revenue $ 771
$ 41 $ 104 $ 198 $ 343 $ 1,114
Foreign Currency Exchange Impact — (3 ) (10 ) (46 )
(59 ) (59 ) Run-Rate Revenue (Current Period) $ 771 $ 38
$ 94 $ 152 $ 284 $ 1,055
Straight-Line Revenue 21 0 1 12 13 34 Prepaid Amortization Revenue
22 — 0 0 1 22 Other Non Run-Rate Revenue 38 (0) 1 5 6 44
Pass-Through Revenue — 27 36 74 138 138
Non Run-Rate Foreign Currency Exchange
Impact
— (2 ) (3 ) (20 ) (25 ) (25 ) Total Property Revenue
(Current Period) $ 852 $ 63 $ 130 $ 223
$ 416 $ 1,268
(1) Excludes stock-based compensation expense.
(2) All components of revenue, except current period, have been
translated at prior period foreign exchange rates.
UNAUDITED CONSOLIDATED RESULTS FROM
OPERATIONS, BY SEGMENT (CONTINUED)
($ in millions. Totals may not add due to
rounding.)
Three months ended March 31, 2015 Property
Services Total
U.S. Asia EMEA
Latin
America
Total
International
Total
Property
Segment revenues $ 718 $ 57 $ 76 $ 211 $ 344 $ 1,062 $ 17 $ 1,079
Segment operating expenses(1) 133 30 29 68 126 259 5 264 Interest
income, TV Azteca, net — — — 3 3
3 — 3 Segment Gross Margin 585 27
47 146 221 806 12 818
Segment SG&A(1) 27 7 9 17 33
60 3 63 Segment Operating Profit $ 558
$ 21 $ 38 $ 129 $ 188 $ 746
$ 8 $ 755 Segment Operating Profit Margin 78 %
36 % 51 % 61 % 55 % 70 % 49 % 70 % Core Growth 13.0 % 20.0 %
17.0 % 24.8 % 22.3 % 15.6 % New Property Core Growth 3.7 % 9.3 %
3.2 % 16.9 % 12.6 % 6.2 % Organic Core Growth 9.3 % 10.7 % 13.9 %
7.9 % 9.7 % 9.4 % Property revenue Run-Rate Organic Growth 6.7 %
9.0 % 15.8 % 10.2 % 11.4 % 8.0 %
Revenue
Components(2) Prior-Year Run-Rate Revenue $ 586 $ 29 $
58 $ 144 $ 230 $ 817 Colocations/Amendments 37 4 4 9 18 55
Escalations 18 1 5 7 12 30 Cancellations (13 ) (2 ) (0) (2 ) (4 )
(18 ) Other Run-Rate (3 ) (0) 0 1 1 (2 )
Organic Run-Rate Revenue $ 626 $ 32 $ 67 $ 158
$ 257 $ 883 New Sites 19 2 2
25 29 48 Total Run-Rate Revenue $ 645
$ 34 $ 68 $ 183 $ 286 $ 930
Foreign Currency Exchange Impact — (0) (12 ) (26 )
(38 ) (38 ) Run-Rate Revenue (Current Period) $ 645 $ 34
$ 57 $ 157 $ 247 $ 892
Straight-Line Revenue 27 0 2 5 8 34 Prepaid Amortization Revenue 19
— 0 0 0 19 Other Non Run-Rate Revenue 28 (0) 0 3 3 31 Pass-Through
Revenue — 23 22 53 98 98
Non Run-Rate Foreign Currency Exchange
Impact
— (0) (5 ) (8 ) (13 ) (13 ) Total Property Revenue (Current
Period) $ 718 $ 57 $ 76 $ 211 $ 344
$ 1,062
(1) Excludes stock-based compensation expense.
(2) All components of revenue, except current period, have been
translated at prior period foreign exchange rates.
UNAUDITED SELECTED CONSOLIDATED FINANCIAL INFORMATION
($ In thousands. Totals may not add due to rounding.)
The following table reflects the estimated impact of foreign
currency exchange rate fluctuations, pass-through revenue,
straight-line revenue and expense recognition and material one-time
items on total property revenue, Adjusted EBITDA and AFFO.
The calculation of Core Growth is as follows:
Three
months ended March 31, 2016
Property
Revenue
Adjusted
EBITDA
AFFO Core Growth 25.0 % 23.5 % 24.7 % Estimated impact of
pass-through revenue 1.4 % — % — % Estimated impact of fluctuations
in foreign currency exchange rates (6.2 )% (6.4 )% (7.5 )%
Estimated impact of straight-line revenue recognition (0.8 )% (1.8
)% — % Estimated impact of significant one-time items — % — % — %
Reported growth 19.3 % 15.1 % 17.3 %
The reconciliation of Net Income to Adjusted EBITDA and the
calculation of Adjusted EBITDA Margin are as follows:
Three Months Ended March 31,
2016 2015 Net Income $ 281,307 $
195,492 Income tax provision 29,124 23,872 Other (income) expense
(12,208 ) 54,503 Loss on retirement of long-term obligations —
3,725 Interest expense 159,880 147,934 Interest income (3,534 )
(2,964 ) Other operating expenses 8,800 7,774 Depreciation,
amortization and accretion 341,634 263,520 Stock-based compensation
expense 28,079 29,861 Adjusted EBITDA $ 833,082
$ 723,717 Total revenue 1,289,047 1,079,190
Adjusted EBITDA Margin 65 % 67 %
UNAUDITED RECONCILIATIONS TO GAAP MEASURES AND THE
CALCULATION OF DEFINED FINANCIAL MEASURES
($ in thousands, except per share data. Totals may not add due
to rounding.)
The reconciliation of net income to NAREIT Funds From
Operations and the calculation of AFFO and AFFO per Share are
presented below:
Three Months Ended March 31,
2016 2015 Net income $ 281,307 $
195,492 Real estate related depreciation, amortization and
accretion 297,513 228,828 Losses from sale or disposal of real
estate and real estate related impairment charges 4,602 3,681
Dividends on preferred stock (26,781 ) (9,819 ) Adjustments for
unconsolidated affiliates and noncontrolling interest (11,016 )
(7,226 ) NAREIT Funds From Operations $ 545,625 $ 410,956
Straight-line revenue (32,008 ) (33,838 ) Straight-line
expense 15,837 8,764 Stock-based compensation expense 28,079 29,861
Non-cash portion of tax provision 9,756 9,158 Non-real estate
related depreciation, amortization and accretion 44,121 34,692
Amortization of deferred financing costs,
capitalized interest and debt discounts and
premiums and long-term deferred interest
charges
7,429 3,603 Other (income) expense(1) (12,208 ) 54,503 Loss on
retirement of long-term obligations — 3,725 Other operating
expense(2) 4,198 4,093 Capital improvement capital expenditures
(16,724 ) (16,784 ) Corporate capital expenditures (2,667 ) (2,312
) Adjustments for unconsolidated affiliates and noncontrolling
interest 11,016 7,226 AFFO $ 602,454 $ 513,647
Weighted average diluted shares outstanding 427,888 409,399
AFFO per Share $ 1.41 $ 1.25
(1) Primarily includes realized and unrealized (gains) loss on
foreign currency exchange rate fluctuations.
(2) Primarily includes integration and acquisition-related
costs.
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version on businesswire.com: http://www.businesswire.com/news/home/20160429005296/en/
For American Tower Corporation:Leah Stearns, 617-375-7500Senior
Vice President, Treasurer and Investor Relations
American Tower (NYSE:AMT)
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