CONSOLIDATED HIGHLIGHTS First Quarter 2020
- Total revenue increased 9.9% to $1,993 million
- Property revenue increased 10.5% to $1,973 million
- Net income increased 2.7% to $419 million
- Adjusted EBITDA increased 14.1% to $1,271 million
- Consolidated AFFO increased 5.3% to $907 million
American Tower Corporation (NYSE: AMT) today reported financial
results for the quarter ended March 31, 2020.
Tom Bartlett, American Tower’s Chief Executive Officer, stated,
“Despite the challenges posed by the COVID-19 pandemic, we
delivered a solid first quarter, including U.S. Organic Tenant
Billings Growth of 5.6%, consistent international leasing activity
and a 20% dividend increase. We believe that the resilience and
stability of our business model, our investment-grade balance
sheet, substantial liquidity and the secular global growth trends
in mobile data usage will help us manage through the ongoing
crisis.
As we stand together with our employees, tenants and
communities, we are focused more than ever on advancing our mission
of extending and enhancing the reach of mobile broadband.
Connectivity is critical in challenging times like these, and we
are proud to play a lead role in delivering it to billions of
people around the world.”
CONSOLIDATED OPERATING RESULTS OVERVIEW American Tower
generated the following operating results for the quarter ended
March 31, 2020 (all comparative information is presented against
the quarter ended March 31, 2019).
($ in millions, except per share
amounts.)
Q1 2020
Growth Rate
Total revenue
$
1,993
9.9
%
Total property revenue
$
1,973
10.5
%
Total Tenant Billings Growth
$
151
10.3
%
Organic Tenant Billings Growth
$
79
5.4
%
Property Gross Margin
$
1,430
14.0
%
Property Gross Margin %
72.5
%
Net income
$
419
2.7
%
Net income attributable to AMT common
stockholders
$
415
4.4
%
Net income attributable to AMT common
stockholders per diluted share
$
0.93
4.5
%
Adjusted EBITDA
$
1,271
14.1
%
Adjusted EBITDA Margin %
63.8
%
Nareit Funds From Operations (FFO)
attributable to AMT common stockholders
$
819
6.4
%
Consolidated AFFO
$
907
5.3
%
Consolidated AFFO per Share
$
2.03
4.6
%
AFFO attributable to AMT common
stockholders
$
945
15.6
%
AFFO attributable to AMT common
stockholders per Share
$
2.12
15.2
%
Cash provided by operating activities
$
800
1.9
%
Less: total cash capital
expenditures(1)
$
225
(2.4)
%
Free Cash Flow
$
575
3.7
%
_______________
(1)
Q1 2020 cash capital expenditures include
$12.7 million of finance lease and perpetual land easement payments
reported in cash flows from financing activities in the condensed
consolidated statements of cash flows.
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” below.
CAPITAL ALLOCATION OVERVIEW
Distributions – During the quarter ended March 31, 2020,
the Company declared the following regular cash distributions to
its common stockholders:
Common Stock Distributions
Q1 2020(1)
Distributions per share
$
1.08
Aggregate amount (in millions)
$
479
Year-over-year per share growth
20.0
%
_______________
(1)
The distribution declared on March 12,
2020 was paid in the second quarter of 2020 to stockholders of
record as of the close of business on April 14, 2020.
Stock Repurchase Program – During the first quarter of
2020, the Company repurchased a total of approximately 213 thousand
shares of its common stock under its stock repurchase program for
approximately $45 million. Subsequent to the end of the first
quarter, through April 22, 2020, the Company repurchased
approximately 48 thousand additional shares of its common stock
pursuant to the program, for approximately $10 million, and had
approximately $2.0 billion remaining under the Company’s existing
stock repurchase programs.
Capital Expenditures – During the first quarter of 2020,
total capital expenditures were approximately $225 million, of
which $32 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 – During the first quarter of 2020, the
Company spent approximately $49 million to acquire 193
communications sites, primarily in international markets.
Other Events – During the first quarter of 2020, the
Company completed its previously announced acquisition of MTN Group
Limited’s (“MTN”) noncontrolling interests in each of the Company’s
joint ventures in Ghana and Uganda for total consideration of
approximately $524 million, which resulted in an increase in the
Company’s controlling interest in those joint ventures from 51% to
100%. The closing of the transaction resulted in a one-time
negative impact of approximately $63 million to the Company’s first
quarter 2020 Consolidated AFFO from the payment of previously
deferred cash interest related to joint venture debt.
In April 2019, Tata Teleservices Limited served notice of
exercise of its put options with respect to 100% of its remaining
combined holdings with Tata Sons in ATC Telecom Infrastructure
Private Limited (“ATC TIPL”). The Company expects to pay INR 24.8
billion (approximately $328 million at the March 31, 2020 exchange
rate) to redeem the put shares in 2020, subject to regulatory
approval. After the completion of the redemption, the Company will
hold an approximately 92% ownership interest in ATC TIPL.
LEVERAGE AND FINANCING OVERVIEW
Leverage – For the quarter ended March 31, 2020, the
Company’s Net Leverage Ratio was 4.6x net debt (total debt less
cash and cash equivalents) to first quarter 2020 annualized
Adjusted EBITDA.
Calculation of Net Leverage Ratio
($ in millions, totals may not add due to rounding)
As of March 31, 2020
Total debt
$
24,577
Less: Cash and cash equivalents
1,326
Net Debt
23,251
Divided By: First quarter annualized
Adjusted EBITDA(1)
5,084
Net Leverage Ratio
4.6
x
_______________
(1)
Q1 2020 Adjusted EBITDA multiplied by
four.
Liquidity – As of March 31, 2020, the Company had $4.2
billion of total liquidity, consisting of $1.3 billion in cash and
cash equivalents plus the ability to borrow an aggregate of $2.9
billion under its revolving credit facilities, net of any
outstanding letters of credit.
On January 10, 2020, the Company issued $750.0 million aggregate
principal amount of 2.400% senior unsecured notes due 2025 and
$750.0 million aggregate principal amount of 2.900% senior
unsecured notes due 2030. The Company used the net proceeds to
repay existing indebtedness under its $2.25 billion senior
unsecured revolving credit facility, as amended and restated in
December 2019 (the “2019 Credit Facility”).
On January 15, 2020, the Company completed the redemption of all
of its outstanding 5.900% senior unsecured notes due 2021 for a
total aggregate redemption price of $539.6 million, including $6.1
million in accrued and unpaid interest. Upon completion of the
redemption, none of the 5.900% notes remained outstanding.
On February 13, 2020, the Company entered into a loan agreement
for a new $750.0 million unsecured term loan due February 12, 2021.
The Company used the net proceeds of this new term loan, together
with borrowings under the 2019 Credit Facility and cash on hand, to
repay outstanding indebtedness under its $1.3 billion unsecured
term loan entered into on February 14, 2019.
Subsequent to the end of the first quarter, on April 3, 2020,
the Company entered into a $1.14 billion unsecured term loan due
April 2, 2021, which was subsequently increased to $1.19 billion
effective April 21, 2020 (the “April 2020 Term Loan”), the net
proceeds of which were used to repay outstanding indebtedness under
the 2019 Credit Facility. Pro forma for the April 2020 Term Loan,
the Company had $5.4 billion of total liquidity.
Additionally, on April 9, 2020, the Company announced the
planned redemption of all of its outstanding 2.800% senior
unsecured notes due 2020 for a price equal to the principal amount
of the 2.800% Notes, together with accrued interest, if any, up to,
but excluding, the redemption date, which has been set for May 11,
2020. The Company intends to fund the redemption with borrowings
under the 2019 Credit Facility and cash on hand.
FULL YEAR 2020 OUTLOOK
The following full year 2020 financial and operational estimates
are based on a number of assumptions that management believes to be
reasonable and reflect the Company’s expectations as of April 29,
2020. 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.
As of April 29, 2020, based on currently available information
and outside of the foreign currency translation effects outlined
below, the Company does not anticipate significant impacts to its
underlying operating results in 2020 as a result of the coronavirus
(“COVID-19”) pandemic. This is subject to change depending on
future developments, which are highly uncertain and cannot be
predicted at this time. Additional information pertaining to the
impact of COVID-19 on the Company will be provided in our upcoming
Form 10-Q for the three months ended March 31, 2020 (the “Q1
Quarterly Report”).
The Company’s outlook is based on the following average foreign
currency exchange rates to 1.00 U.S. Dollar for April 29, 2020
through December 31, 2020: (a) 75.60 Argentinean Pesos; (b) 5.25
Brazilian Reais; (c) 855 Chilean Pesos; (d) 3,990 Colombian Pesos;
(e) 0.92 Euros; (f) 5.75 Ghanaian Cedis; (g) 76.50 Indian Rupees;
(h) 106 Kenyan Shillings; (i) 24.20 Mexican Pesos; (j) 390 Nigerian
Naira; (k) 6,710 Paraguayan Guarani; (l) 3.45 Peruvian Soles; (m)
18.65 South African Rand; (n) 3,850 Ugandan Shillings; and (o) 600
West African CFA Francs.
The Company’s outlook reflects estimated unfavorable impacts of
foreign currency exchange rate fluctuations to property revenue,
Adjusted EBITDA and Consolidated AFFO of approximately $300
million, $165 million and $140 million, respectively, as compared
to the Company’s prior 2020 outlook. The impact of foreign currency
exchange 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.
Primarily as a result of these unfavorable impacts, the Company
is reducing the midpoint of its full year 2020 outlook for property
revenue, net income, Adjusted EBITDA and Consolidated AFFO by $300
million, $160 million, $165 million and $140 million, respectively.
The ongoing impacts of COVID-19 on global capital markets have
contributed to the volatility in foreign currency exchange rates
since the issuance of the Company’s prior 2020 outlook.
Additional information pertaining to the impact of foreign
currency and London Interbank Offered Rate (“LIBOR”) fluctuations
on the Company’s outlook has been provided in the supplemental
disclosure package available on the Company’s website.
2020 Outlook ($ in millions)
Full Year 2020
Midpoint Growth Rates vs.
Prior Year
Total property revenue(1)
$
7,675
to
$
7,825
3.8%
Net income
1,790
to
1,890
(4.0)%
Adjusted EBITDA
4,920
to
5,020
4.8%
Consolidated AFFO
3,600
to
3,700
3.7%
_______________
(1)
Includes U.S. property revenue of $4,385
million to $4,445 million and international property revenue of
$3,290 million to $3,380 million, reflecting midpoint growth rates
of 5.4% and 1.8%, respectively. The U.S. growth rate includes an
estimated positive impact of nearly 1% associated with an increase
in non-cash straight-line revenue recognition. The international
growth rate includes an estimated negative impact of approximately
9% from the translational effects of foreign currency exchange rate
fluctuations. International property revenue reflects the Company’s
Latin America, Africa, Europe and Asia segments.
2020 Outlook for Total Property
revenue, at the midpoint, includes the following components(1):
($ in millions, totals may not add due to rounding.)
U.S. Property
International
Property(2)
Total Property
International pass-through revenue
N/A
$
1,006
$
1,006
Straight-line revenue
185
28
213
_______________
(1)
For additional discussion regarding these
components, please refer to “Revenue Components” below.
(2)
International property revenue reflects the Company’s Latin
America, Africa, Europe and Asia segments.
2020 Outlook for Total Tenant Billings
Growth, at the midpoint, includes the following components(1):
(Totals may not add due to rounding.)
U.S. Property
International
Property(2)
Total Property
Organic Tenant Billings
~5%
~5%
~5%
New Site Tenant Billings
<0.5%
~13%
~5%
Total Tenant Billings Growth
~5-6%
~18%
~10%
_______________
(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, Africa, Europe and Asia segments.
Outlook for Capital Expenditures:
($ in millions, totals may not add due to rounding.)
Full Year 2020
Discretionary capital projects(1)
$
360
to
$
390
Ground lease purchases
175
to
185
Start-up capital projects
130
to
150
Redevelopment
230
to
250
Capital improvement
145
to
165
Corporate
10
—
10
Total
$
1,050
to
$
1,150
_______________
(1)
Includes the construction of 5,000 to
6,000 communications sites globally.
Reconciliation of Outlook for Adjusted
EBITDA to Net income: ($ in millions, totals may not add due to
rounding.)
Full Year 2020
Net income
$
1,790
to
$
1,890
Interest expense
855
to
835
Depreciation, amortization and
accretion
1,870
to
1,890
Income tax provision
140
to
150
Stock-based compensation expense
110
—
110
Other, including other operating expenses,
interest income, gain (loss) on retirement of long-term obligations
and other income (expense)
155
to
145
Adjusted EBITDA
$
4,920
to
$
5,020
Reconciliation of Outlook for
Consolidated AFFO to Net income: ($ in millions, totals may not
add due to rounding.)
Full Year 2020
Net income
$
1,790
to
$
1,890
Straight-line revenue
(213)
—
(213)
Straight-line expense
49
—
49
Depreciation, amortization and
accretion
1,870
to
1,890
Stock-based compensation expense
110
—
110
Deferred portion of income tax
(12)
—
(12)
Other, including other operating expense,
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 distributions to minority interests
161
—
161
Capital improvement capital
expenditures
(145)
to
(165)
Corporate capital expenditures
(10)
—
(10)
Consolidated AFFO
$
3,600
to
$
3,700
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,
2020 and its revised outlook for 2020. 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: (877) 692-8955
International dial-in: (234) 720-6979 Passcode: 4802432
When available, a replay of the call can be accessed until 11:59
p.m. ET on May 13, 2020. The replay dial-in numbers are as
follows:
U.S./Canada dial-in: (866) 207-1041
International dial-in: (402) 970-0847 Passcode: 5017974
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 approximately
180,000 communications sites. For more information about American
Tower, please visit the “Earnings Materials” and “Investor
Presentations” 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 (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, Net Leverage Ratio and Indian Carrier Consolidation-Driven
Churn (ICCC). 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. 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; (vii) Foreign currency exchange
impact; and (viii) 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 sites 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 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 the Company’s existing real estate portfolio growth as
well as its 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 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 its 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 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 rate fluctuations on its reported growth
to provide transparency into the underlying performance of its real
estate business.
Other revenue: Other revenue represents revenue not
captured by the above listed items and can include items such as
tenant settlements and fiber solutions revenue.
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 rate 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.
Indian Carrier Consolidation-Driven Churn (ICCC): Tenant
cancellations specifically attributable to short-term carrier
consolidation in India. Includes impacts of carrier exits from the
marketplace and carrier cancellations as a result of consolidation,
but excludes normal course churn. In prior periods, the Company
provided this additional metric to enhance transparency and provide
a better understanding of its recurring business.
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.
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 the 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 the
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 the
Company’s property assets in those periods. In addition, it is a
widely used performance measure across the 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 and the other line items included in the calculation
of Consolidated AFFO. The Company believes that providing this
additional metric enhances transparency, given the minority
interests in its Indian and European businesses.
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 finance
leases and perpetual land easements. 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, including current portion
and finance lease liabilities, 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
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 2020 outlook and
other targets, foreign currency exchange rates, expectations for
the closing of signed acquisitions, our expectations for the
redemption of shares in ATC TIPL, our expectations regarding the
potential impacts of the Adjusted Gross Revenue court ruling in
India and factors that could affect such expectations, our
expectations regarding the impacts of COVID-19 and actions in
response to the pandemic on our business and our operating results
and factors that could affect such expectations 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) a significant decrease in leasing demand
for our communications infrastructure would materially and
adversely affect our business and operating results, and we cannot
control that demand; (2) if our tenants consolidate their
operations, exit the telecommunications business or share site
infrastructure to a significant degree, our growth, revenue and
ability to generate positive cash flows could be materially and
adversely affected; (3) a substantial portion of our revenue is
derived from a small number of tenants, and we are sensitive to
adverse changes in the creditworthiness and financial strength of
our tenants; (4) our business, and that of our tenants, is subject
to laws, regulations and administrative and judicial decisions, and
changes thereto, that could restrict our ability to operate our
business as we currently do or impact our competitive landscape;
(5) increasing competition within our industry may materially and
adversely affect our revenue; (6) 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; (7) our expansion and innovation 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; (8) new technologies or changes in
our or a tenant’s business model could make our tower leasing
business less desirable and result in decreasing revenues and
operating results; (9) competition for assets could adversely
affect our ability to achieve our return on investment criteria;
(10) 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; (11) we may be adversely
affected by changes in LIBOR reporting practices, the method in
which LIBOR is determined or the use of alternative reference
rates; (12) 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; (13) complying with REIT
requirements may limit our flexibility or cause us to forego
otherwise attractive opportunities; (14) our towers, fiber
networks, data centers or computer systems may be affected by
natural disasters, security breaches and other unforeseen events
for which our insurance may not provide adequate coverage; (15)
restrictive covenants in the agreements related to our
securitization transactions, our credit facilities and our debt
securities 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; (18) if we are unable to
protect our rights to the land under our towers, it could adversely
affect our business and operating results; and (19) 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 those towers will be
eliminated. 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, 2019 and in our upcoming Q1 Quarterly Report, each 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 millions)
March 31, 2020
December 31, 2019
ASSETS
CURRENT ASSETS:
Cash and cash equivalents
$
1,326.0
$
1,501.2
Restricted cash
74.3
76.8
Accounts receivable, net
623.9
462.2
Prepaid and other current assets
480.7
513.6
Total current assets
2,504.9
2,553.8
PROPERTY AND EQUIPMENT, net
11,451.3
12,084.4
GOODWILL
5,948.8
6,178.3
OTHER INTANGIBLE ASSETS, net
11,600.6
12,318.4
DEFERRED TAX ASSET
126.4
131.8
DEFERRED RENT ASSET
1,781.8
1,771.1
RIGHT-OF-USE ASSET
6,968.3
7,357.4
NOTES RECEIVABLE AND OTHER NON-CURRENT
ASSETS
407.0
406.4
TOTAL
$
40,789.1
$
42,801.6
LIABILITIES
CURRENT LIABILITIES:
Accounts payable
$
120.6
$
148.1
Accrued expenses
876.4
958.2
Distributions payable
483.9
455.0
Accrued interest
148.2
209.4
Current portion of operating lease
liability
476.8
494.5
Current portion of long-term
obligations
2,640.0
2,928.2
Unearned revenue
408.5
294.3
Total current liabilities
5,154.4
5,487.7
LONG-TERM OBLIGATIONS
21,937.4
21,127.2
OPERATING LEASE LIABILITY
6,137.8
6,510.4
ASSET RETIREMENT OBLIGATIONS
1,321.5
1,384.1
DEFERRED TAX LIABILITY
731.0
768.3
OTHER NON-CURRENT LIABILITIES
901.0
937.0
Total liabilities
36,183.1
36,214.7
COMMITMENTS AND CONTINGENCIES
REDEEMABLE NONCONTROLLING
INTERESTS
541.4
1,096.5
EQUITY:
Common stock
4.5
4.5
Additional paid-in capital
10,255.6
10,117.7
Distributions in excess of earnings
(1,082.5)
(1,016.8)
Accumulated other comprehensive loss
(4,271.7)
(2,823.6)
Treasury stock
(1,271.5)
(1,226.4)
Total American Tower Corporation
equity
3,634.4
5,055.4
Noncontrolling interests
430.2
435.0
Total equity
4,064.6
5,490.4
TOTAL
$
40,789.1
$
42,801.6
UNAUDITED CONSOLIDATED STATEMENTS OF
OPERATIONS
(In millions, except share and per share
data)
Three Months Ended March
31,
2020
2019
REVENUES:
Property
$
1,973.2
$
1,786.0
Services
19.9
27.4
Total operating revenues
1,993.1
1,813.4
OPERATING EXPENSES:
Costs of operations (exclusive of items
shown separately below):
Property(1)
544.1
533.0
Services(1)
7.9
10.4
Depreciation, amortization and
accretion
472.3
436.9
Selling, general, administrative and
development expense(1)
217.8
198.1
Other operating expenses
14.2
20.1
Total operating expenses
1,256.3
1,198.5
OPERATING INCOME
736.8
614.9
OTHER INCOME (EXPENSE):
Interest income
10.1
12.4
Interest expense
(208.8)
(207.5)
Loss on retirement of long-term
obligations
(34.6)
(0.1)
Other (expense) income (including foreign
currency (losses) gains of ($65.5) and $20.1, respectively)
(63.8)
21.9
Total other expense
(297.1)
(173.3)
INCOME FROM CONTINUING OPERATIONS BEFORE
INCOME TAXES
439.7
441.6
Income tax provision
(21.1)
(34.0)
NET INCOME
418.6
407.6
Net income attributable to noncontrolling
interests
(3.6)
(10.2)
NET INCOME ATTRIBUTABLE TO AMERICAN TOWER
CORPORATION STOCKHOLDERS
415.0
397.4
NET INCOME ATTRIBUTABLE TO AMERICAN TOWER
CORPORATION COMMON STOCKHOLDERS
$
415.0
$
397.4
NET INCOME PER COMMON SHARE AMOUNTS:
Basic net income attributable to American
Tower Corporation common stockholders
$
0.94
$
0.90
Diluted net income attributable to
American Tower Corporation common stockholders
$
0.93
$
0.89
WEIGHTED AVERAGE COMMON SHARES OUTSTANDING
(in thousands):
BASIC
443,055
441,351
DILUTED
445,832
444,621
_______________
(1)
Property costs of operations, services
costs of operations and selling, general, administrative and
development expense include stock-based compensation expense in
aggregate amounts of $47.7 million and $42.5 million for the three
months ended March 31, 2020 and March 31, 2019, respectively.
UNAUDITED CONDENSED CONSOLIDATED
STATEMENTS OF CASH FLOWS
(In millions)
Three Months Ended March
31,
2020
2019
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income
$
418.6
$
407.6
Adjustments to reconcile net income to
cash provided by operating activities:
Depreciation, amortization and
accretion
472.3
436.9
Stock-based compensation expense
47.7
42.5
Loss on early retirement of long-term
obligations
34.6
0.1
Other non-cash items reflected in
statements of operations
81.6
28.9
Increase in net deferred rent balances
(56.2)
(5.3)
Right-of-use asset and Operating lease
liability, net
1.0
20.2
Increase in assets
(210.8)
(33.0)
Increase (decrease) in liabilities
11.2
(112.8)
Cash provided by operating activities
800.0
785.1
CASH FLOWS FROM INVESTING ACTIVITIES:
Payments for purchase of property and
equipment and construction activities
(214.4)
(220.8)
Payments for acquisitions, net of cash
acquired
(49.3)
(91.1)
Proceeds from sales of short-term
investments and other non-current assets
5.8
254.9
Payments for short-term investments
—
(261.5)
Deposits and other
4.5
(4.8)
Cash used for investing activities
(253.4)
(323.3)
CASH FLOWS FROM FINANCING ACTIVITIES:
Borrowings under credit facilities
2,642.3
1,700.0
Proceeds from issuance of senior notes,
net
1,496.0
1,241.6
Proceeds from term loan
750.0
1,300.0
Repayments of notes payable, credit
facilities, senior notes, secured debt, term loan and finance
leases(1)
(4,351.2)
(4,025.9)
Distributions to noncontrolling interest
holders, net
(13.5)
(13.8)
Purchases of common stock
(39.7)
—
Proceeds from stock options
11.1
27.2
Distributions paid on common stock
(454.9)
(377.1)
Payment for early retirement of long-term
obligations
(33.5)
—
Deferred financing costs and other
financing activities(2)
(88.2)
(76.7)
Purchase of redeemable noncontrolling
interest
(524.4)
(425.7)
Cash used for financing activities
(606.0)
(650.4)
Net effect of changes in foreign currency
exchange rates on cash and cash equivalents, and restricted
cash
(118.3)
(16.6)
NET DECREASE IN CASH AND CASH EQUIVALENTS,
AND RESTRICTED CASH
(177.7)
(205.2)
CASH AND CASH EQUIVALENTS, AND RESTRICTED
CASH, BEGINNING OF PERIOD
1,578.0
1,304.9
CASH AND CASH EQUIVALENTS, AND RESTRICTED
CASH, END OF PERIOD
$
1,400.3
$
1,099.7
CASH PAID FOR INCOME TAXES, NET
$
35.1
$
36.9
CASH PAID FOR INTEREST
$
262.0
$
249.0
_______________
(1)
Three months ended March 31, 2020 and
March 31, 2019 include $2.0 million and $1.3 million of finance
lease payments, respectively.
(2)
Three months ended March 31, 2020 and March 31, 2019 include
$10.7 million and $11.5 million of perpetual land easement
payments, respectively.
UNAUDITED CONSOLIDATED RESULTS FROM OPERATIONS, BY
SEGMENT ($ in millions, totals may not add due to
rounding.)
The Company is now reporting its operating results in six
segments after separating its EMEA property segment into Africa
property and Europe property. Historical financial information
included in this press release has been adjusted to reflect the
change in reportable segments. The sum of the Africa and Europe
segments may not tie to the previously disclosed EMEA segment
figures due to rounding.
Three Months Ended March 31,
2020
Property
Services
Total
U.S.
Latin America
Asia
Africa
Europe
Total International
Total Property
Segment revenues
$
1,090
$
337
$
287
$
226
$
35
$
883
$
1,973
$
20
$
1,993
Segment operating expenses(1)
190
105
164
78
7
354
544
8
551
Segment Gross Margin
$
900
$
232
$
123
$
148
$
28
$
530
$
1,430
$
12
$
1,442
Segment SG&A(1)
42
27
33
17
6
82
124
4
127
Segment Operating Profit
$
858
$
205
$
90
$
131
$
22
$
448
$
1,306
$
9
$
1,315
Segment Operating Profit Margin
79
%
61
%
31
%
58
%
65
%
51
%
66
%
44
%
66
%
Revenue Growth
10.5
%
1.0
%
(0.8)
%
56.6
%
3.0
%
10.5
%
10.5
%
(27.4)
%
9.9
%
Total Tenant Billings Growth
6.0
%
12.4
%
3.0
%
58.7
%
2.2
%
18.4
%
10.3
%
Organic Tenant Billings Growth
5.6
%
7.5
%
(0.7)
%
9.3
%
1.9
%
5.1
%
5.4
%
Revenue Components(2)
Prior-Year Tenant Billings
$
955
$
223
$
153
$
104
$
31
$
511
$
1,466
Colocations/Amendments
43
10
19
5
1
36
79
Escalations
32
10
4
5
0
19
50
Cancellations
(19)
(4)
(24)
(1)
(1)
(30)
(49)
Other
(3)
1
(0)
1
0
1
(1)
Organic Tenant Billings
$
1,008
$
240
$
152
$
114
$
31
$
537
$
1,545
New Site Tenant Billings
4
11
6
51
0
68
72
Total Tenant Billings
$
1,012
$
251
$
158
$
165
$
31
$
605
$
1,617
Foreign Currency Exchange Impact(3)
—
(23)
(3)
(6)
(1)
(33)
(33)
Total Tenant Billings (Current Period)
$
1,012
$
227
$
155
$
160
$
30
$
572
$
1,584
Straight-Line Revenue
46
4
3
3
0
11
56
Prepaid Amortization Revenue
26
1
—
0
1
2
29
Other Revenue
6
29
2
7
2
39
44
International Pass-Through Revenue
—
87
130
57
0
274
274
Foreign Currency Exchange Impact(4)
—
(11)
(3)
(1)
(0)
(15)
(15)
Total Property Revenue (Current
Period)
$
1,090
$
337
$
287
$
226
$
35
$
883
$
1,973
_______________
(1)
Excludes stock-based compensation
expense.
(2)
All components of revenue, except those
labeled current period, have been translated at prior-period
foreign currency 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,
2019
Property
Services
Total
U.S.
Latin America
Asia(1)
Africa
Europe
Total International
Total Property
Segment revenues
$
986
$
333
$
289
$
144
$
34
$
800
$
1,786
$
27
$
1,813
Segment operating expenses(2)
191
103
178
54
6
341
532
10
543
Segment Gross Margin
$
795
$
230
$
111
$
91
$
27
$
459
$
1,254
$
17
$
1,271
Segment SG&A(2)
42
28
27
13
5
73
114
3
118
Segment Operating Profit
$
753
$
202
$
84
$
77
$
22
$
386
$
1,139
$
14
$
1,153
Segment Operating Profit Margin
76
%
61
%
29
%
54
%
66
%
48
%
64
%
51
%
64
%
Revenue Growth
5.9
%
0.5
%
5.8
%
3.6
%
(4.8)
%
2.7
%
4.4
%
(12.7)
%
4.1
%
Total Tenant Billings Growth
8.4
%
9.5
%
(0.8)
%
14.7
%
2.8
%
6.7
%
7.8
%
Organic Tenant Billings Growth
8.2
%
7.7
%
(28.5)
%
7.8
%
2.6
%
(4.3)
%
3.5
%
Revenue Components(3)
Prior-Year Tenant Billings
$
881
$
225
$
170
$
98
$
32
$
525
$
1,406
Colocations/Amendments
57
11
17
4
1
32
89
Escalations
28
11
3
6
1
21
49
Cancellations
(12)
(6)
(69)
(3)
(1)
(79)
(91)
Other
(1)
2
1
1
0
4
3
Organic Tenant Billings
$
953
$
242
$
121
$
106
$
33
$
502
$
1,455
New Site Tenant Billings
2
4
47
7
0
58
60
Total Tenant Billings
$
955
$
246
$
168
$
112
$
33
$
560
$
1,515
Foreign Currency Exchange Impact(4)
—
(23)
(15)
(8)
(2)
(49)
(49)
Total Tenant Billings (Current Period)
$
955
$
223
$
153
$
104
$
31
$
511
$
1,466
Straight-Line Revenue
(6)
6
4
1
1
11
6
Prepaid Amortization Revenue
28
1
—
0
1
2
30
Other Revenue
9
27
6
2
1
38
46
International Pass-Through Revenue
—
86
139
38
0
264
264
Foreign Currency Exchange Impact(5)
—
(10)
(13)
(2)
(0)
(26)
(26)
Total Property Revenue (Current
Period)
$
986
$
333
$
289
$
144
$
34
$
800
$
1,786
_______________
(1)
Inclusive of the negative impacts of ICCC.
See quarterly supplemental materials package for additional
detail.
(2)
Excludes stock-based compensation
expense.
(3)
All components of revenue, except those
labeled current period, have been translated at prior-period
foreign currency exchange rates.
(4)
Reflects foreign currency exchange impact
on all components of Total Tenant Billings.
(5)
Reflects foreign currency exchange impact on components of
revenue, other than Total Tenant Billings.
UNAUDITED SELECTED CONSOLIDATED
FINANCIAL INFORMATION
($ in millions, totals may not add due to
rounding.)
The reconciliation of Adjusted EBITDA
to net income and the calculation of Adjusted EBITDA Margin are as
follows:
Three Months Ended March
31,
2020
2019
Net income
$
418.6
$
407.6
Income tax provision
21.1
34.0
Other expense (income)
63.8
(21.9)
Loss on retirement of long-term
obligations
34.6
0.1
Interest expense
208.8
207.5
Interest income
(10.1)
(12.4)
Other operating expenses
14.2
20.1
Depreciation, amortization and
accretion
472.3
436.9
Stock-based compensation expense
47.7
42.5
Adjusted EBITDA
$
1,271.0
$
1,114.4
Total revenue
1,993.1
1,813.4
Adjusted EBITDA Margin
64
%
61
%
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 as follows:
Three Months Ended March
31,
2020
2019
Net income
$
418.6
$
407.6
Real estate related depreciation,
amortization and accretion
419.5
388.5
Losses from sale or disposal of real
estate and real estate related impairment charges(1)
7.5
19.1
Adjustments for unconsolidated affiliates
and noncontrolling interests
(26.4)
(45.6)
Nareit FFO attributable to AMT common
stockholders
$
819.2
$
769.6
Straight-line revenue
(56.2)
(5.3)
Straight-line expense
12.7
9.2
Stock-based compensation expense
47.7
42.5
Deferred portion of income tax
(14.0)
(2.9)
Non-real estate related depreciation,
amortization and accretion
52.8
48.4
Amortization of deferred financing costs,
capitalized interest and debt discounts and premiums and long-term
deferred interest charges
7.9
6.4
Payment of shareholder loan(2)
(63.3)
—
Other expense (income)(3)
63.8
(21.9)
Loss on retirement of long-term
obligations
34.6
0.1
Other operating expense(4)
6.7
1.0
Capital improvement capital
expenditures
(30.3)
(28.2)
Corporate capital expenditures
(1.4)
(3.4)
Adjustments for unconsolidated affiliates
and noncontrolling interests
26.4
45.6
Consolidated AFFO
$
906.6
$
861.1
Adjustments for unconsolidated affiliates
and noncontrolling interests(5)
38.8
(43.3)
AFFO attributable to AMT common
stockholders
$
945.4
$
817.8
Divided by weighted average diluted shares
outstanding
445,832
444,621
Consolidated AFFO per Share
$
2.03
$
1.94
AFFO attributable to AMT common
stockholders per Share
$
2.12
$
1.84
_______________
(1)
Included in these amounts are impairment
charges of $3.7 million and $18.1 million, respectively.
(2)
Relates to the payment of capitalized
interest associated with the acquisition of MTN’s redeemable
noncontrolling interests in each of our joint ventures in Ghana and
Uganda. This long-term deferred interest was previously expensed
but excluded from Consolidated AFFO.
(3)
Q1 2020 and Q1 2019 include losses (gains)
on foreign currency exchange rate fluctuations of $65.5 million and
($20.1) million, respectively.
(4)
Primarily includes integration and
acquisition-related costs.
(5)
Includes adjustments for the impact on
both Nareit FFO attributable to American Tower Corporation common
stockholders and the other line items included in the calculation
of Consolidated AFFO.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20200429005222/en/
Igor Khislavsky Vice President, Investor Relations
Telephone: (617) 375-7500
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