AMT
AMERICAN TOWER CORPORATION
142.7600
-0.61%
142.7600
-0.61%
102.5100 155.2800
52 weeks
52 weeks

Mkt Cap 60.67B

Shares Out 425.01M

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American Tower Corporation: Senior Vice President, Treasurer & Investor Relations

The following excerpt is from the company's SEC filing.

Telephone: (617) 375-7500

AMERICAN TOWER CORPORATION REPORTS

THIRD QUARTER

FINANCIAL RESULTS

THIRD QUARTER 2015 HIGHLIGHTS

Consolidated Results

Segment Results

Total revenue increased 19.2% to $1,238 million

Domestic rental and management segment revenue increased 21.8%, or 21.2% on a core basis

Adjusted EBITDA increased 17.0% to $779 million

International rental and management segment revenue increased 16.5%, or 43.5% on a core basis

AFFO increased 21.4% to $558 million

Network development services segment revenue was $25 million

American Tower Corporation (NYSE: AMT) today reported financial results for the quarter ended

September 30, 2015

Jim Taiclet, American Tower's Chief Executive Officer stated, "Our nearly 14% growth in AFFO per Share in the third quarter was fueled by continuing exponential growth in mobile data demand in both the U.S. and in our international markets. We believe that this growth in demand will go on for many years to come, driven by a combination of lower cost smartphones proliferating around the world, additional spectrum being deployed for mobile data and the competitive imperative for mobile operators to steadily invest in their networks.

Our strategic objective is to capture this long-term growth opportunity by building strong positions in the world’s largest free market economies with attractive wireless industry structures. So far in 2015, we have made tremendous progress on expanding American Tower’s global growth platform through our acquisitions of rights to the Verizon towers in the U.S., Telecom Italia’s towers in Brazil, Airtel’s portfolio in Nigeria and our recently announced Viom transaction in India. We expect that these strategically located assets will further lengthen and strengthen our AFFO per Share growth trajectory well into the future."

2015 OPERATING RESULTS OVERVIEW

American Tower generated the following operating results for the quarter ended

(unless otherwise indicated, all comparative information is presented against the quarter ended

September 30, 2014

, and total rental and management revenue increased

$1,213 million

Total rental and management revenue Core Growth was approximately

, and total rental and management Organic Core Growth was approximately

Total rental and management Gross Margin increased

$860 million

, and total rental and management Gross Margin percentage was

, Core Growth in Adjusted EBITDA was

, and Adjusted EBITDA Margin was

Adjusted Funds From Operations (AFFO) increased

, AFFO per Share increased

, and Core Growth in AFFO was approximately

, each of which excludes the impact of the one-time GTP cash tax payment described below.

The Company incurred one-time cash costs of approximately $93 million in the third quarter in connection with its previously disclosed tax election, pursuant to which Global Tower Partners (GTP) REIT was folded into the American Tower REIT and no longer operates as a separate REIT for federal and state income tax purposes.

Net income attributable to American Tower common stockholders decreased

$76 million

, and Net income attributable to American Tower common stockholders per both basic and diluted common share decreased to

. The decreases were primarily attributable to the one-time GTP cash tax item as well as the non-cash impacts of unfavorable foreign currency exchange rate fluctuations on intercompany balances.

Cash provided by operating activities decreased

$1,544 million

for the first nine months of 2015.

Domestic Rental and Management Segment

Revenue increased

$808 million

Organic Core Growth in revenue was

$621 million

Operating Profit increased

$589 million

, which represented

of total Operating Profit; and

Operating Profit Margin was

International Rental and Management Segment

$405 million

, and Core Growth in revenue was

$240 million

excluding the impact of

$119 million

of pass-through revenues);

$205 million

excluding the impact of pass-through revenues).

Network Development Services Segment

Revenue was

Gross Margin was

$16 million

Operating Profit was

$12 million

Please refer to “Non-GAAP and Defined Financial Measures” below for definitions of Gross Margin, Operating Profit, Operating Profit Margin, Adjusted EBITDA, Adjusted EBITDA Margin, NAREIT Funds From Operations, AFFO, AFFO per Share, Core Growth, Organic Core Growth, New Property Core Growth and Net Leverage Ratio. For additional financial information, including reconciliations to GAAP measures, please refer to the unaudited selected financial information below.

CAPITAL ALLOCATION OVERVIEW

Common Stock Distributions

– During the third quarter of 2015, the Company paid its

second quarter

2015 distribution of

per share, or a total of approximately

$186 million

, to common stockholders. Subsequent to the end of the third quarter, the Company paid its

$195 million

Mandatory Convertible Preferred Stock Dividends

of 2015, the Company paid an aggregate amount of approximately $27 million in Series A and Series B preferred stock dividends. Subsequent to the end of the third quarter, the Company declared dividends on its Series A and Series B preferred stock in an aggregate amount of approximately $27 million, payable on November 16, 2015 to such stockholders of record at the close of business on November 1, 2015.

Cash Paid for Capital Expenditures

, total capital expenditures of

$207 million

included:

$71 million

for discretionary capital projects, including spending to complete the construction of 22 towers and the installation of two distributed antenna system networks domestically and the construction of 737 towers and the installation of nine distributed antenna system networks internationally;

$38 million

to purchase land under the Company’s communications sites;

$28 million

for start-up capital projects;

$43 million

for the redevelopment of existing communications sites to accommodate new tenant equipment; and

for capital improvements and corporate capital expenditures.

Cash Paid for Acquisitions

, the Company spent approximately $946 million to acquire

five sites in the U.S. and 6,206 sites internationally.

This included the Company’s acquisition of 4,700 communications sites in Nigeria in the third quarter, as part of its previously announced transaction with Bharti Airtel, for a total consideration of approximately $1.1 billion, including VAT. Of the purchase price, approximately $807 million of the consideration has been paid, with the remainder to be paid prior to January 15, 2016.

Further, on September 30, 2015, the Company closed on an additional 1,125 communications sites in Brazil as part of a previously announced transaction with TIM Celular S.A., for an aggregate purchase price of approximately BRL 517 million (approximately $131 million at the date of acquisition).

Subsequent to the end of the third quarter, the Company announced that one of its wholly owned subsidiaries had entered into a definitive agreement to acquire a 51% controlling interest in Viom Networks Limited, which owns and operates approximately 42,200 wireless

communications towers and 200 indoor distributed antenna systems across India, for a total cash consideration of approximately INR 76 billion (approximately $1,157 million assuming an exchange rate of 66 INR per USD). The Company expects the transaction to close in mid-2016.

FINANCING OVERVIEW

For the quarter ended

, the Company’s Net Leverage Ratio was approximately

net debt (total debt less cash and cash equivalents) to

2015 annualized Adjusted EBITDA.

Liquidity

As of

, the Company had approximately

$2.0 billion

of total liquidity, comprised of the ability to borrow up to an aggregate of approximately

$1.7 billion

under its revolving credit facilities, net of outstanding letters of credit, and approximately $0.3 billion in cash and cash equivalents.

Subsequent to the end of the quarter, the Company extended the maturity dates of its 2014 Credit Facility, 2013 Credit Facility and Term Loan to January 29, 2021, June 28, 2019 and January 29, 2021, respectively.

FULL YEAR

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 October 29,

. 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 current outlook reflects unfavorable impacts of foreign currency fluctuations of approximately $56 million for total rental and management revenue, $30 million for Adjusted EBITDA and $28 million for AFFO, relative to the foreign exchange rate assumptions used in the Company's prior outlook.

After incorporating these impacts, the Company has reduced the midpoint of its full year 2015 outlook for total rental and management revenue by

$20 million

, and raised the midpoint for Adjusted EBITDA by $5 million and AFFO by $10 million.

The Company's outlook is based on the following average foreign currency exchange rates to 1.00 U.S. Dollar for the fourth quarter of 2015: (a)

Brazilian Reais; (b)

Chilean Pesos; (c)

Colombian Pesos; (d)

Euros; (e)

Ghanaian Cedi; (f)

Indian Rupees; (g)

Mexican Pesos; (h)

Nigerian Naira; (i)

Peruvian Soles; (j)

South African Rand; and (k)

Ugandan Shillings. These assumptions are based on the more conservative of: (a) the 30-day average spot rate; or (b) the average Bloomberg forecast for each currency.

($ in millions)

Full Year 2015

Midpoint

Midpoint Core

See “Non-GAAP and Defined Financial Measures” below.

The Company’s outlook for total rental and management revenue reflects the following at the midpoint:

Domestic rental and management segment revenue of

$3,145 million

and Organic Core Growth of approximately 7%; and

International rental and management segment revenue of $

1,505 million

and Organic Core Growth of nearly 11%. International rental and management segment revenue includes approximately

$413 million

of pass-through revenue.

The calculation of midpoint Core Growth is as follows:

(Totals may not add due to rounding)

Total Rental and

Outlook midpoint Core Growth

Impact of pass-through revenues

Estimated impact of fluctuations in foreign currency exchange rates

Impact of straight-line revenue and expense recognition

Impact of significant one-time items

Outlook midpoint growth

Total Rental and Management Revenue Core Growth Components

Reflects growth at the midpoint of outlook ranges. Excludes pass-through revenue.

Revenue growth attributable to sites added to the portfolio on or after January 1, 2014.

Outlook for Capital Expenditures:

Discretionary capital projects

Ground lease purchases

Start-up capital projects

Redevelopment

Capital improvement

Corporate

Includes the construction of approximately

communications sites.

Reconciliations of Outlook for Net Income to Adjusted EBITDA:

Interest expense

Depreciation, amortization and accretion

Income tax provision

Stock-based compensation expense

Other, including other operating expenses, interest income, (gain) loss on retirement of long-term obligations, (income) loss on equity method investments and other expense (income)

Includes approximately $93 million one-time cash tax charge as part of the tax election related to the GTP REIT.

Reconciliations of Outlook for Net Income to AFFO:

Straight-line revenue

Straight-line expense

Non-cash portion of tax provision

GTP REIT one-time cash tax charge

Other, including other operating expenses, amortization of deferred financing costs, capitalized interest, debt discounts and premiums, (gain) loss on retirement of long-term obligations, other expense (income), non-cash interest related to joint venture shareholder loans and dividends on preferred stock

Capital improvement capital expenditures

Corporate capital expenditures

Conference Call Information

American Tower will host a conference call today at 8:30 a.m. ET...


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