American Tower Corp : American Tower Corporation Reports First Quarter 2012 Financial Results

American Tower Corporation:

American Tower Corporation (NYSE: AMT) today reported financial results for the quarter ended March 31, 2012.

Jim Taiclet, American Tower's Chief Executive Officer stated, "Due to our unique global reach, American Tower is positioned to benefit from strong secular trends in wireless telecommunications in both the US and around the world. As a result of our robust first quarter performance and recent acquisition activities, we have increased the midpoint of our full year 2012 outlook for rental and management revenue, Adjusted EBITDA and AFFO growth to over 16%, 14% and 11%, respectively.

Furthermore, we are currently committed to deploying over $1.5 billion of capital during 2012, which includes spending on our annual capital expenditure program and acquisitions we have under contract today, as well as our regular distributions. We expect that these disciplined investments will support our internal goal of generating double digit annual AFFO growth."

FIRST QUARTER 2012 OPERATING RESULTS OVERVIEW

American Tower generated the following operating results for the quarter ended March 31, 2012 (unless otherwise indicated, all comparative information is presented against the quarter ended March 31, 2011).

Total revenue increased 23.8% to $696.5 million and total rental and management revenue increased 25.1% to $684.0 million, which includes the impact of two non-recurring domestic revenue items, as further described below. Total rental and management Gross Margin increased 24.1% to $524.0 million. Total selling, general, administrative and development expense was $79.6 million, including approximately $12.6 million of stock-based compensation expense and the impact of a one-time state tax expense. Adjusted EBITDA increased 22.7% to $462.5 million, and the Adjusted EBITDA Margin was 66%.

Total rental and management revenue Core Growth was approximately 24.5%, and Core Growth in Adjusted EBITDA was approximately 22.5%. Please refer to the selected statement of operations detail on page 13, which highlights the items affecting the Core Growth percentages.

Operating income increased 25.7% to $274.4 million, net income attributable to American Tower Corporation increased 141.0% to $221.3 million, and net income attributable to American Tower Corporation per basic and diluted common share both increased 143.5% to $0.56.

Recurring Free Cash Flow (RFCF) increased 20.5% to $299.2 million and RFCF per Share increased 21.0% to $0.75. Adjusted Funds From Operations (AFFO) increased 13.2% to $295.8 million from the pro forma AFFO for the same period in 2011, and AFFO per Share increased 13.8% to $0.74 from the pro forma AFFO per Share for the same period in 2011. Core Growth in AFFO was approximately 15.9%.

Cash provided by operating activities increased 41.6% to $402.0 million, which reflects the accelerated recovery of approximately $62 million of value added tax in our international rental and management segment.

Segment Results

Domestic Rental and Management Segment - Domestic rental and management segment revenue increased 16.6% to $487.1 million, which represented 70% of total revenues. In addition, domestic rental and management segment Gross Margin increased 17.8% to $394.1 million, while domestic rental and management segment Operating Profit increased 18.5% to $374.7 million. Domestic rental and management segment Operating Profit Margin was 77%.

Domestic rental and management segment revenue for the quarter was positively impacted by two non-recurring items, including a tenant billing settlement of $6.0 million and a lease termination settlement of $9.6 million. The lease termination settlement resulted in the Company recording an impairment of $10.7 million.

International Rental and Management Segment - International rental and management segment revenue increased 52.6% to $196.9 million, which represented 28% of total revenues. International rental and management segment pass-through revenues increased 46.7% to $48.6 million. In addition, international rental and management segment Gross Margin increased 47.9% to $129.9 million, while international rental and management segment Operating Profit increased 50.7% to $106.1 million. International rental and management segment Operating Profit Margin was 54% and would be 72%, if the impact of pass-through revenues were excluded.

Network Development Services Segment - Network development services segment revenue was $12.5 million, which represented 2% of total revenues. Network development services segment Gross Margin was $5.5 million, and network development services segment Operating Profit was $5.2 million. Network development services segment Operating Profit Margin was 41%.

Please refer to Non-GAAP and Defined Financial Measures on pages 5 and 6 for definitions of Gross Margin, Operating Profit, Operating Profit Margin, Adjusted EBITDA, Adjusted EBITDA Margin, Recurring Free Cash Flow, Recurring Free Cash Flow per Share, Funds From Operations, Adjusted Funds From Operations, Adjusted Funds From Operations per Share, Core Growth and Net Leverage Ratio. For additional financial information, including reconciliations to GAAP measures, please refer to the unaudited selected financial information on pages 11 through 15.

FIRST QUARTER 2012 INVESTING AND FINANCING OVERVIEW

Cash Paid for Capital Expenditures - During the first quarter of 2012, total capital expenditures of $121.0 million included $63.7 million for capital projects, including the construction of 29 communications sites domestically and 597 towers internationally and the installation of 109 shared generators domestically; $14.7 million to purchase land under the Company's towers; $22.8 million for the redevelopment of existing communications sites to accommodate new tenant equipment; and $19.8 million for capital improvements and corporate capital expenditures.

Cash Paid for Acquisitions - During the first quarter of 2012, the Company spent $159.4 million, which consisted of $15.5 million for the purchase of 35 domestic towers and $143.9 million for amounts due from acquisitions, which closed in December of 2011. Subsequent to the end of the first quarter of 2012, the Company funded its acquisition of 800 towers in Brazil.

Stock Repurchase Program - During the first quarter of 2012, the Company repurchased a total of approximately 0.1 million shares of its common stock for approximately $4.9 million, pursuant to its stock repurchase program. Between April 1, 2012 and April 24, 2012, the Company repurchased approximately 0.02 million additional shares of its common stock for an aggregate of approximately $1.6 million, pursuant to its stock repurchase program.

Distribution - On April 25, 2012, the Company paid its first regular distribution to stockholders of record at the close of business on April 11, 2012 of $0.21 per share, or approximately $82.9 million. Subject to the discretion of the Company's Board of Directors, the Company expects to continue paying regular distributions, the amount and timing of which will be determined by the Board.

Leverage - For the quarter ended March 31, 2012, the Company's net leverage ratio was approximately 3.7x net debt (total debt less cash and cash equivalents) to last quarter annualized Adjusted EBITDA.

Liquidity - As of March 31, 2012, the Company had approximately $1.8 billion of total liquidity, comprised of approximately $0.5 billion in cash and cash equivalents and the ability to borrow an aggregate of approximately $1.3 billion under its two revolving credit facilities, net of any outstanding letters of credit.

RECENT ACQUISITIONS

First Quarter 2012 Acquisitions - During the first quarter of 2012, the Company completed the acquisition of 35 towers domestically and acquired 800 towers in Brazil from a wireless service provider.

Subsequent and Pending Acquisitions - Subsequent to the end of the first quarter of 2012, the Company completed the acquisitions of 55 towers in Mexico and expects to complete the acquisition of 962 towers in Uganda, in early May. The Company currently expects to complete its acquisition of up to approximately 350 towers in Mexico and up to approximately 800 towers in Colombia, prior to the end of 2012.

FULL YEAR 2012 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 May 3, 2012. These estimates include the Company's pending acquisition of 962 towers in Uganda and exclude any remaining pending acquisitions described above. 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 the remainder of 2012: (a) 1.80 Brazilian Reais; (b) 500.00 Chilean Pesos; (c) 1,860.00 Colombian Pesos; (d) 1.60 Ghanian Cedi; (e) 51.50 Indian Rupees; (f) 13.25 Mexican Pesos; (g) 2.70 Peruvian Soles; (h) 8.20 South African Rand; and (i) 2,500.00 Ugandan Shillings.

The Company's outlook for total rental and management revenue reflects the following at the midpoint: (1) domestic rental and management segment revenue of $1,900 million; and (2) international rental and management segment revenue of $870 million, which includes approximately $230 million of pass-through revenue.

Conference Call Information

American Tower will host a conference call today at 8:30 a.m. ET to discuss its financial results for the first quarter ended March 31, 2012 and its outlook for the remainder of 2012. 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:

When available, a replay of the call can be accessed until 11:59 p.m. ET on May 17, 2012. The replay dial-in numbers are as follows:

American Tower will also sponsor a live simulcast and replay of the call on its website, www.americantower.com.

About American Tower

American Tower is a leading independent global owner, operator and developer of wireless communications sites. American Tower currently owns and operates approximately 47,000 communications sites in the United States, Brazil, Chile, Colombia, Ghana, India, Mexico, Peru and South Africa. For more information about American Tower, please visit 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, Recurring Free Cash Flow, Recurring Free Cash Flow per Share, Funds From Operations, Adjusted Funds From Operations, Adjusted Funds From Operations per Share, Core Growth and Net Leverage Ratio. The Company defines Gross Margin as revenues less operating expenses, excluding stock-based compensation expense. 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 international rental and management 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, loss on retirement of long-term obligations, other income (expense), net income attributable to non-controlling interest, income (loss) on equity method investments, income taxes and discontinued operations. The Company defines Operating Profit Margin as Operating Profit divided by revenue. The Company defines Adjusted EBITDA as net income before income (loss) from discontinued operations, net, income (loss) from equity method investments, income tax provision (benefit), other (income) expense, loss on retirement of long-term obligations, interest expense, interest income, other operating expenses, 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. The Company defines Recurring Free Cash Flow as Adjusted EBITDA before straight-line revenue and expense, plus interest income, less interest expense, cash paid for income taxes and cash payments related to redevelopment, capital improvement and corporate capital expenditures. The Company defines Recurring Free Cash Flow per Share as Recurring Free Cash Flow divided by the diluted weighted average common shares outstanding. The Company defines Funds From Operations as net income before real estate related depreciation, amortization and accretion. The Company defines Adjusted Funds From Operations as Funds From Operations before straight-line revenue and expense, stock-based compensation expense, non-real estate related depreciation, amortization and accretion, amortization of deferred financing costs, debt discounts and capitalized interest, other (income) expense, loss on retirement of long-term obligations, other operating (income) expense, less cash payments related to capital improvements and cash payments related to corporate capital expenditures. The Company defines Adjusted Funds From Operations per Share as Adjusted Funds From Operations divided by the diluted weighted average common shares outstanding. Funds From Operations, Adjusted Funds From Operations and Adjusted Funds From Operations per Share for the three months ended March 31, 2011 are presented on a pro forma basis and reflect adjustments for income tax provision as if the REIT conversion had occurred on January 1, 2011. The Company defines Core Growth in total rental and management revenue and Adjusted EBITDA 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 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. 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, Recurring Free Cash Flow, Recurring Free Cash Flow per Share, Funds From Operations, Adjusted Funds From Operations, Adjusted Funds From Operations per Share, Core Growth and Net Leverage Ratio 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 2012 outlook, our pending acquisitions, including anticipated closing dates and expected purchase prices, foreign currency exchange rates and our expectation regarding the declaration of regular distributions. 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 consolidate, merge or share site infrastructure with each other to a significant degree, our growth, revenue and ability to generate positive cash flows could be materially and adversely affected; (3) new technologies or changes in a tenant's business model could make our tower leasing business less desirable and result in decreasing revenues; (4) our expansion initiatives may disrupt our operations or expose us to additional risk if we are not able to successfully integrate operations, assets and personnel; (5) if we fail to qualify as a REIT or fail to remain qualified as a REIT, we would be subject to tax at corporate income tax rates, which would substantially reduce funds available; (6) we could suffer adverse tax and other financial consequences if taxing authorities do not agree with our tax positions; (7) failure to make required distributions would subject us to federal corporate income tax, which may limit our ability to fund these distributions using cash generated through our taxable REIT subsidiaries (TRSs); (8) certain of our business activities will be subject to corporate level income tax and foreign taxes, which will reduce our cash flows, and we will have potential deferred and contingent tax liabilities; (9) complying with REIT requirements may limit our flexibility or cause us to forego otherwise attractive opportunities; (10) our extensive use of TRSs, in particular for our international operations, may cause us to fail to qualify as a REIT; (11) we have no experience operating as a REIT, which may adversely affect our financial condition, results of operations, cash flow, per share trading price of our common stock and ability to satisfy debt service obligations; (12) 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; (13) our business is subject to government regulations and changes in current or future laws or regulations could restrict our ability to operate our business as we currently do; (14) a substantial portion of our revenue is derived from a small number of tenants; (15) due to the long-term expectations of revenue from tenant leases, we are sensitive to changes in the creditworthiness and financial strength of our tenants; (16) if we are unable to protect our rights to the land under our towers, it could adversely affect our business and operating results; (17) we we may need additional financing to fund capital expenditures, future growth and expansion initiatives and satisfy our REIT distribution requirements; (18) our leverage and debt service obligations may materially and adversely affect us; (19) restrictive covenants in the loan agreements related to our Securitization, the loan agreements for the credit facilities and the indentures governing our debt securities could materially and adversely affect our business by limiting flexibility; (20) increasing competition in the tower industry may create pricing pressures that may materially and adversely affect us; (21) 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 would be eliminated; (22) we may incur goodwill and other intangible impairment charges which may require us to record a significant charge to earnings; (23) distributions payable by REITs generally do not qualify for reduced tax rates; (24) we could have liability under environmental and occupational and health laws; (25) our towers or data centers may be affected by natural disasters and other unforeseen damage for which our insurance may not provide adequate coverage; and (26) our costs could increase and our revenues could decrease due to perceived health risks from radio emissions, especially if these perceived risks are substantiated. 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 twelve months ended December 31, 2011. We undertake no obligation to update the information contained in this press release to reflect subsequently occurring events or circumstances.

SELECTED PORTFOLIO DETAIL:

American Tower Corporation
Leah Stearns, 617-375-7500
Director, Investor Relations