American Tower Corp : American Tower Corporation Reports First Quarter 2012 Financial Results
05/03/2012| 07:05am US/Eastern
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American Tower Corporation:
FIRST QUARTER 2012
Consolidated Highlights
Segment Highlights
Total revenue increased 23.8% to $696.5 million
Operating income increased 25.7% to $274.4 million
Cash provided by operating activities increased 41.6% to $402.0
million
Domestic rental and management segment revenue increased 16.6%
to $487.1 million
International rental and management segment revenue increased
52.6% to $196.9 million
Network development services segment revenue was $12.5 million
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 $1.3 billion under its two revolving credit facilities,
net of any outstanding letters of credit.
RECENT ACQUISITIONS
First Quarter 2012 Acquisitions - During the first quarter of
2012, the Company completed the acquisition of 35 towers domestically
and acquired 800 towers in Brazil from a wireless service provider.
Subsequent and Pending Acquisitions - Subsequent to the end of
the first quarter of 2012, the Company completed the acquisitions of 55
towers in Mexico and expects to complete the acquisition of 962 towers
in Uganda, in early May. The Company currently expects to complete its
acquisition of up to approximately 350 towers in Mexico and up to
approximately 800 towers in Colombia, prior to the end of 2012.
FULL YEAR 2012 OUTLOOK
The following estimates are based on a number of assumptions that
management believes to be reasonable and reflect the Company's
expectations as of May 3, 2012. These estimates include the Company's
pending acquisition of 962 towers in Uganda and exclude any remaining
pending acquisitions described above. Actual results may differ
materially from these estimates as a result of various factors and the
Company refers you to the cautionary language regarding
"forward-looking" statements included in this press release when
considering this information.
The Company's outlook is based on the following average foreign currency
exchange rates to 1.00 U.S. Dollar for the remainder of 2012: (a) 1.80
Brazilian Reais; (b) 500.00 Chilean Pesos; (c) 1,860.00 Colombian Pesos;
(d) 1.60 Ghanian Cedi; (e) 51.50 Indian Rupees; (f) 13.25 Mexican Pesos;
(g) 2.70 Peruvian Soles; (h) 8.20 South African Rand; and (i) 2,500.00
Ugandan Shillings.
($ in millions)
(Totals may not add due to rounding.)
Full Year 2012
Midpoint Growth
Midpoint Core Growth
Total rental and management revenue
$2,745
to
$2,795
16.1%
18.7%
Adjusted EBITDA (1)
1,795
to
1,845
14.1%
16.5%
Adjusted Funds From Operations(1)
1,170
to
1,202
11.1%
14.8%
Net Income
675
to
715
82.0%
N/A
__________________________
(1) See Non-GAAP and Defined Financial Measures below.
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.
The calculation of midpoint Core Growth is as follows:
(Totals may not add due to rounding.)
Total Rental and Management Revenue
Adjusted EBITDA
AFFO(1)
Outlook midpoint Core Growth
18.7%
16.5%
14.8%
Estimated impact of fluctuations in foreign currency exchange rates
(2.3)
(1.8)
(2.4)
Impact of straight-line revenue and expense recognition
(0.9)
(0.9)
-
Impact of significant one-time items
0.6
0.4
(1.2)
Outlook midpoint growth
16.1%
14.1%
11.1%
__________________________
(1) Core Growth in AFFO reflects approximately $20 million of
one-time start-up capital improvement capital expenditures related
to our joint ventures in Colombia, Ghana and Uganda.
Outlook for Capital Expenditures:
($ in millions)
(Totals may not add due to rounding.)
Full Year 2012
Capital improvement
$75
to
$85
Corporate
15
-
15
Redevelopment
65
to
75
Ground lease purchases
90
to
100
Discretionary capital projects(1)
255
to
325
Total
$500
to
$600
__________________________
(1) Includes the construction of approximately 1,800 to 2,200 new
communications sites.
Reconciliations of Outlook for Net Income to Adjusted EBITDA:
($ in millions)
(Totals may not add due to rounding.)
Full Year 2012
Net income
$675
to
$715
Interest expense
380
to
384
Depreciation, amortization and accretion
630
to
640
Stock-based compensation expense
53
-
53
Other, including other operating expenses, interest income, loss on
retirement of long-term obligations, income (loss) on equity method
investments, other income (expense) and income tax provision
(benefit)
57
to
53
Adjusted EBITDA
$1,795
to
$1,845
Reconciliations of Outlook for Net Income to Adjusted Funds
From Operations:
($ in millions)
(Totals may not add due to rounding.)
Full Year 2012
Net income
$675
to
$715
Straight-line revenue
(148)
-
(148)
Straight-line expense
33
-
33
Depreciation, amortization and accretion
630
to
640
Stock-based compensation expense
53
-
53
Other, including other operating expenses, interest expense,
amortization of deferred financing costs, debt discounts and
capitalized interest, loss on retirement of long-term obligations,
income (loss) on equity method investments and other (income) expense
17
to
9
Capital improvement capital expenditures
(75)
to
(85)
Corporate capital expenditures
(15)
-
(15)
Adjusted Funds From Operations
$1,170
to
$1,202
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:
U.S./Canada dial-in: (866) 740-9153
International dial-in: (706) 645-9644
Passcode: 72926728
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:
U.S./Canada dial-in: (855) 859-2056
International dial-in: (404) 537-3406
Passcode: 72926728
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.
UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands)
March 31,
December 31,
2012
2011(1)
ASSETS
Current assets:
Cash and cash equivalents
$471,258
$330,191
Restricted cash
56,338
42,775
Short-term investments and available-for-sale securities
32,817
22,270
Accounts receivable, net
105,120
100,971
Prepaid and other current assets
279,518
317,698
Deferred income taxes
30,318
29,596
Total current assets
975,369
843,501
Property and equipment, net
5,006,647
4,881,000
Goodwill
2,767,516
2,726,376
Other intangible assets, net
2,523,354
2,465,148
Deferred income taxes
233,646
209,863
Deferred rent asset
651,476
609,529
Notes receivable and other long-term assets
480,198
494,272
Total
$12,638,206
$12,229,689
LIABILITIES:
Current liabilities:
Accounts payable
$226,283
$215,366
Accrued expenses
336,094
304,208
Distribution payable
82,907
-
Accrued interest
73,728
65,729
Current portion of long-term obligations
127,316
101,816
Unearned revenue
92,939
93,099
Total current liabilities
939,267
780,218
Long-term obligations
7,161,126
7,134,492
Asset retirement obligations
368,959
344,180
Other long-term liabilities
582,451
560,657
Total liabilities
9,051,803
8,819,547
COMMITMENTS AND CONTINGENCIES
Common stock
3,946
3,936
Additional paid-in capital
4,917,255
4,903,800
Distributions in excess of earnings
(1,339,627)
(1,477,899)
Accumulated other comprehensive loss
(97,682)
(142,617)
Treasury Stock(2)
(4,924)
-
Total American Tower Corporation equity
3,478,968
3,287,220
Noncontrolling interest
107,435
122,922
Total equity
3,586,403
3,410,142
Total
$12,638,206
$12,229,689
(1)
December 31, 2011 balances have been revised to reflect purchase
accounting measurement period adjustments.
(2)
As part of the Company's reorganization to qualify as a REIT for
federal income tax purposes, effective December 31, 2011, the
Company completed the merger with its predecessor approved by the
Company's stockholders in November 2011. At the time of the merger,
each share of Class A common stock of American Tower held in
treasury at December 31, 2011 ceased to be outstanding, and a
corresponding adjustment was recorded to additional paid?in capital
and common stock.
UNAUDITED CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
(In thousands, except per share data)
Three Months Ended
March 31,
2012
2011
REVENUES:
Rental and management
$683,990
$546,655
Network development services
12,527
16,040
Total operating revenues
696,517
562,695
OPERATING EXPENSES:
Costs of operations (exclusive of items shown separately below)
Rental and management (including stock-based compensation expense of
$197 and $0, respectively)
163,724
127,859
Network development services (including stock-based compensation
expense of $264 and $0, respectively)
7,261
7,469
Depreciation, amortization and accretion
149,655
131,231
Selling, general, administrative and development expense (including
stock-based
compensation expense of $12,584 and $12,358, respectively)
79,584
66,132
Other operating expenses
21,847
11,704
Total operating expenses
422,071
344,395
OPERATING INCOME
274,446
218,300
OTHER (EXPENSE) INCOME:
Interest income, TV Azteca, net
3,543
3,499
Interest income
2,253
2,304
Interest expense
(95,117)
(74,427)
Loss on retirement of long-term obligations
(398)
-
Other income (including unrealized foreign currency gains of $55,838
and $16,178, respectively)
52,861
13,707
Total other expense
(36,858)
(54,917)
INCOME FROM CONTINUING OPERATIONS BEFORE INCOME TAXES AND
INCOME ON EQUITY METHOD INVESTMENTS
237,588
163,383
Income tax provision
(27,248)
(71,423)
Income on equity method investments
18
1
NET INCOME
210,358
91,961
Net loss (income) attributable to noncontrolling interest
10,948
(119)
NET INCOME ATTRIBUTABLE TO AMERICAN TOWER CORPORATION
$221,306
$91,842
NET INCOME PER COMMON SHARE AMOUNTS:
Basic net income attributable to American Tower Corporation
$ 0.56
$ 0.23
Diluted net income attributable to American Tower Corporation
$ 0.56
$ 0.23
WEIGHTED AVERAGE COMMON SHARES OUTSTANDING:
BASIC
393,885
397,768
DILUTED
398,453
401,899
DISTRIBUTIONS DECLARED PER SHARE
$ 0.21
-
UNAUDITED CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS
(In thousands)
Three Months Ended
March 31,
2012
2011
CASH FLOWS FROM OPERATIONS:
Net income
$ 210,358
$ 91,961
Adjustments to reconcile net income to cash provided by operating
activities:
Stock-based compensation expense
13,045
12,358
Depreciation, amortization and accretion
149,655
131,231
Other non-cash items reflected in statements of operations
(28,342)
53,335
Increase in net deferred rent asset
(28,789)
(22,704)
Increase in restricted cash
(13,490)
(7,444)
Decrease (increase) in assets
55,126
(13,486)
Increase in liabilities
44,454
38,565
Cash provided by operating activities
402,017
283,816
CASH FLOWS FROM INVESTING ACTIVITIES:
Payments for purchase of property and equipment and construction
activities
(121,032)
(97,901)
Payments for acquisitions, net of cash acquired
(159,403)
(617,348)
Proceeds from sale of short-term investments, available-for-sale
securities and other long-term assets
1,095
49,189
Payments for short-term investments
(10,085)
(12,037)
Deposits, restricted cash, investments and other
(1,871)
3,567
Cash used for investing activities
(291,296)
(674,530)
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from short-term borrowings
17,127
101,129
Borrowings under credit facilities
1,325,000
-
Proceeds from issuance of senior notes
698,670
-
Proceeds from other long-term borrowings
16,676
-
Repayments of notes payable, credit facilities and capital leases
(2,018,847)
(126,669)
Net contributions from noncontrolling interest holders
3,327
6,589
Purchases of common stock
(20,665)
(127,723)
Proceeds from stock options
15,615
10,173
Deferred financing costs and other financing activities
(9,463)
(1,025)
Cash provided by (used for) financing activities
27,440
(137,526)
Net effect of changes in foreign currency exchange rates on cash and
cash equivalents
2,906
7,100
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS
141,067
(521,140)
CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD
330,191
883,963
CASH AND CASH EQUIVALENTS, END OF PERIOD
$ 471,258
$ 362,823
CASH (RECEIVED) PAID FOR INCOME TAXES
$ (897)
$ 13,477
CASH PAID FOR INTEREST
$ 77,936
$ 50,806
UNAUDITED RESULTS FROM OPERATIONS, BY SEGMENT
(In thousands)
Three Months Ended, March 31, 2012
Rental and Management
Network Development Services
Total
Domestic
International
Total
Segment revenues
$487,062
$196,928
$683,990
$12,527
$696,517
Segment operating expenses (1)
93,003
70,524
163,527
6,997
170,524
Interest income, TV Azteca, net
-
3,543
3,543
-
3,543
Segment Gross Margin
394,059
129,947
524,006
5,530
529,536
Segment selling, general, administrative
and development expense(1)
19,400
23,895
43,295
358
43,653
Segment Operating Profit
$374,659
$106,052
$480,711
$5,172
$485,883
Segment Operating Profit Margin
77%
54%
70%
41%
70%
Three Months Ended, March 31, 2011
Rental and Management
Network Development Services
Total
Domestic
International
Total
Segment revenues
$417,626
$129,029
$546,655
$16,040
$562,695
Segment operating expenses
83,182
44,677
127,859
7,469
135,328
Interest income, TV Azteca, net
-
3,499
3,499
-
3,499
Segment Gross Margin
334,444
87,851
422,295
8,571
430,866
Segment selling, general, administrative
and development expense(1)
18,179
17,461
35,640
1,663
37,303
Segment Operating Profit
$316,265
$70,390
$386,655
$6,908
$393,563
Segment Operating Profit Margin
76%
55%
71%
43%
70%
(1)
Excludes stock-based compensation expense.
UNAUDITED SELECTED FINANCIAL INFORMATION
(In thousands, except where noted. Totals may not add due to
rounding.)
Selected Balance Sheet Detail:
Long-term obligations summary, including current portion
March 31, 2012
Commercial Mortgage Pass-Through Certificates, Series 2007-1
$1,750,000
2011 Credit Facility
-
2012 Credit Facility
632,000
4.625% Senior Notes due 2015
599,525
7.000% Senior Notes due 2017
500,000
4.500% Senior Notes due 2018
999,338
7.250% Senior Notes due 2019
295,938
5.05% Senior Notes due 2020
699,276
5.900% Senior Notes due 2021
499,316
4.700% Senior Notes due 2022
698,680
Unison Notes(1)
208,503
South African Facility(2)
89,535
Colombian short-term credit facility (3)
78,907
Colombian bridge loans (3)
46,212
Colombian loan (4)
13,192
Ghana Loan (5)
130,951
Other debt, including capital leases
47,069
Total debt
7,288,442
Cash and cash equivalents
471,258
Net debt (Total debt less cash and cash equivalents)
$6,817,184
(1)
The Unison Notes are secured debt and were assumed as a result of
the acquisition of certain legal entities holding a portfolio of
property interests from Unison Holdings LLC and Unison Site
Management II, L.L.C.
(2)
The South African Facility is denominated in South African Rand.
(3)
The Colombian short-term credit facility and bridge loans are
denominated in Colombian Pesos.
(4)
The Colombian loan is denominated in U.S. Dollars.
(5)
The Ghana Loan is denominated in U.S. Dollars and was entered into
in connection with the establishment of our joint venture and
subsequent acquisition of towers in Ghana.
Three Months Ended
Calculation of Net Leverage Ratio ($ in thousands)
March 31, 2012
Total debt
$7,288,442
Cash and cash equivalents
471,258
Numerator: net debt (total debt less cash and cash equivalents)
$6,817,184
Adjusted EBITDA
$462,536
Denominator: annualized Adjusted EBITDA
1,850,144
Net leverage ratio
3.7x
UNAUDITED SELECTED FINANCIAL INFORMATION
(In thousands, except where noted. Totals may not add due to
rounding.)
Three Months Ended
Share count rollforward: (in millions of shares)
March 31, 2012
Total common shares, beginning of period
393.6
Common shares repurchased
(0.1)
Common shares issued
1.0
Total common shares outstanding, end of period (1)
394.6
(1)
As of March 31, 2012, excludes (a) 4.2 million potentially dilutive
shares associated with vested and exercisable stock options with an
average exercise price of $35.27 per share, (b) 2.8 million
potentially dilutive shares associated with unvested stock options,
and (c) 2.0 million potentially dilutive shares associated with
unvested restricted stock units.
Total rental and management straight-line revenue and expense:
In accordance with GAAP, the Company recognizes consolidated rental
and management revenue and expense related to non-cancellable
customer and ground lease agreements with fixed escalations on a
straight-line basis, over the applicable lease term. As a result,
the Company's revenue recognized may differ materially from the
amount of cash collected per customer lease, and the Company's
expense incurred may differ materially from the amount of cash paid
per ground lease. Additional information regarding straight-line
accounting can be found in the Company's Annual Report on Form 10-K
for the year ended December 31, 2011 in the section entitled
"Revenue Recognition," of note 1, "Business and Summary of
Significant Accounting Policies" within the notes to the
consolidated financial statements. A summary of total rental and
management straight-line revenue and expense, which represents the
non-cash revenue and expense recorded due to straight-line
recognition, is as follows:
Three Months Ended
March 31,
2012
2011
Total rental and management operations straight-line revenue
$38,503
$29,843
Total rental and management operations straight-line expense
9,735
7,139
Three Months Ended
March 31,
Selling, general, administrative and development expense breakout:
2012
2011
Total rental and management overhead
$43,295
$35,640
Network development services segment overhead
358
1,663
Corporate and development expenses
23,347
16,471
Stock-based compensation expense
12,584
12,358
Total
$79,584
$66,132
Three Months Ended
March 31,
International pass-through revenue detail:
2012
2011
Pass-through revenue
$48,626
$33,137
SELECTED CASH FLOW DETAIL:
Three Months Ended
March 31,
Payments for purchase of property and equipment and construction
activities:
2012
2011
Discretionary capital projects
$63,738
$56,830
Discretionary ground lease purchases
14,714
20,529
Redevelopment
22,812
7,705
Capital improvements
15,556
10,156
Corporate
4,212
2,681
Total
$121,032
$97,901
UNAUDITED SELECTED FINANCIAL INFORMATION
(In thousands, except where noted. Totals may not add due to
rounding.)
SELECTED STATEMENT OF OPERATIONS DETAIL:
The following table reflects the estimated impact of foreign
currency exchange rate fluctuations, straight-line revenue and
expense recognition and material one-time items on total rental and
management revenue, Adjusted EBITDA and AFFO:
The calculation of Core Growth is as follows:
Total Rental and Management Revenue
Adjusted EBITDA
AFFO
Three Months Ended March 31, 2012
Core Growth
24.5%
22.5%
15.9%
Estimated impact of fluctuations in foreign currency exchange rates
(2.1)
(1.6)
(4.3)
Impact of straight-line revenue recognition
0.2
0.3
-
Impact of material one-time items
2.5
1.5
1.6
Reported growth
25.1%
22.7%
13.2%
SELECTED PORTFOLIO DETAIL:
Tower Count(1):
As of December 31, 2011(2)
Constructed
Acquired
Adjustments
As of March 31, 2012
United States(3)
21,446
23
35
(16)
21,488
Brazil
2,502
55
800
-
3,357
Chile
1,142
26
-
-
1,168
Colombia
2,677
-
-
-
2,677
Ghana
1,872
3
-
-
1,875
India
8,801
500
-
-
9,301
Mexico(4)
5,064
12
-
-
5,076
Peru
475
-
-
-
475
South Africa
1,364
1
-
-
1,365
Total
45,343
620
835
(16)
46,782
(1)
Excludes 265 in-building and outdoor Distributed Antenna System
networks, generators and third party property interests.
(2)
December 31, 2011 balances have been adjusted to reflect a change in
methodology from a site count to a tower count approach.
(3)
United States tower count includes 274 broadcast towers.
(4)
Mexico tower count includes 199 broadcast towers.
UNAUDITED RECONCILIATIONS TO GAAP MEASURES AND THE CALCULATION OF
DEFINED FINANCIAL MEASURES
(In thousands, except where noted. Totals may not add due to
rounding.)
The reconciliation of net income to Adjusted EBITDA and the
calculation of Recurring Free Cash Flow, Recurring Free Cash Flow
per Share and Adjusted EBITDA Margin are as follows:
Three Months Ended
March 31,
2012
2011
Net income
210,358
91,961
Income from equity method investments
(18)
(1)
Income tax provision
27,248
71,423
Other income
(52,861)
(13,707)
Loss on retirement of long-term obligations
398
-
Interest expense
95,117
74,427
Interest income
(2,253)
(2,304)
Other operating expenses
21,847
11,704
Depreciation, amortization and accretion
149,655
131,231
Stock-based compensation expense
13,045
12,358
Adjusted EBITDA
462,536
377,092
Adjusted EBITDA (from above)
$462,536
$377,092
Interest expense
(95,117)
(74,427)
Interest income
2,253
2,304
Cash (received) paid for income taxes
897
(13,477)
Straight-line revenue
(38,503)
(29,843)
Straight-line expense
9,735
7,139
Redevelopment capital expenditures
(22,812)
(7,705)
Capital improvement capital expenditures
(15,556)
(10,156)
Corporate capital expenditures
(4,212)
(2,681)
Recurring Free Cash Flow
$299,221
$248,246
Divided by weighted average diluted shares outstanding
398,453
401,899
Recurring Free Cash Flow per Share
$0.75
$0.62
Adjusted EBITDA (from above)
$462,536
$377,092
Divided by total revenue
696,517
562,695
Adjusted EBITDA Margin
66%
67%
UNAUDITED REIT MEASURES AND RECONCILIATIONS TO GAAP MEASURES
(In thousands, except where noted. Totals may not add due to
rounding.)
The reconciliation of net income to Funds From Operations and the
calculation of Adjusted Funds From Operations and Adjusted Funds
From Operations per Share are presented below:
Three Months Ended
March 31,
2012
2011
Net Income
210,358
91,961
Adjustment for pro forma income tax provision (1)
-
60,791
Pro forma net income
210,358
152,753
Real estate related depreciation, amortization
132,832
114,209
Funds from operations
343,190
266,961
Straight-line revenue
(38,503)
(29,843)
Straight-line expense
9,735
7,139
Stock-based compensation expense
13,045
12,358
Non-real estate related depreciation, amortization and accretion
16,823
17,022
Amortization of deferred financing costs, capitalized interest and
debt discounts and premiums
1,852
2,502
Other income
(52,861)
(13,707)
Loss on retirement of long-term obligations
398
-
Other operating (income) expense (2)
21,847
11,704
Capital improvement capital expenditures
(15,556)
(10,156)
Corporate capital expenditures
(4,212)
(2,681)
Adjusted Funds From Operations
$295,758
$261,298
Divided by weighted average diluted shares outstanding
398,453
401,899
Adjusted Funds From Operations per Share
$0.74
$0.65
(1)
Adjustment for March 31, 2011 assumes the REIT election occurred on
January 1, 2011, and that as a result, income taxes would no longer
be payable on certain of the Company's activities. As a result, on a
pro forma basis, income tax expense is lower by the amount of the
adjustment. For more information, see Note (B) to Unaudited Pro
Forma Consolidated Financial Statements in the Company's Definitive
Proxy Statement, filed with the SEC on October 11, 2011. The pro
forma adjustment set forth in this footnote has been made solely for
the purpose of this pro forma information. This information is not
necessarily indicative of the financial position or operating
results that would have been achieved had the REIT election been
completed as of January 1, 2011, nor is it necessarily indicative of
future financial position or operating results. It also does not
reflect one-time transaction costs related to the REIT election and
the potential immaterial effect of lower cash balances these
transactions have on interest income, higher borrowing costs or
foregone investment opportunities.
(2)
Primarily includes impairments and transaction related costs.
American Tower Corporation Leah Stearns, 617-375-7500 Director,
Investor Relations
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