10-KPeriod: FY2013

AMERICAN TOWER CORP /MA/ Annual Report, Year Ended Dec 31, 2013

Filed February 26, 2014For Securities:AMT

Summary

American Tower Corporation (AMT) reported strong performance in its 2013 10-K filing, driven by significant growth in its rental and management operations, which constituted approximately 98% of its total revenues. The company's strategic acquisition of MIP Tower Holdings LLC (MIPT) in October 2013 substantially expanded its domestic portfolio and international footprint, contributing to a 17% increase in total revenues year-over-year to $3.36 billion. Key financial highlights include a 15% increase in Adjusted EBITDA to $2.18 billion and a 20% increase in Adjusted Funds From Operations (AFFO) to $1.47 billion, underscoring the company's operational efficiency and ability to generate cash. AMT also focused on strengthening its balance sheet, although the MIPT acquisition resulted in leverage temporarily exceeding its long-term target range. The company maintained its REIT status and demonstrated robust organic revenue growth from its legacy sites, alongside expansion through new site acquisitions and development.

Financial Highlights

53 data points
Beta

Revenue

$3.36B

Net Income

$551.33M

16.4% Net Margin

EPS (Diluted)

$1.38

Total Assets

$20.21B

Cash & Equivalents

$293.58M

Free Cash Flow

$1.60B

Financial Statements
Beta
Revenue$3.36B
SG&A Expenses$415.55M
Operating Expenses$2.15B
Operating Income$1.21B
Interest Expense$458.30M
Net Income$551.33M
EPS (Basic)$1.40
EPS (Diluted)$1.38
Shares Outstanding (Basic)395.04M
Shares Outstanding (Diluted)399.15M

Key Highlights

  • 1Total revenues increased by 17% to $3.36 billion in 2013, primarily driven by the rental and management segments.
  • 2Adjusted EBITDA grew by 15% to $2.18 billion, indicating strong operational profitability.
  • 3Adjusted Funds From Operations (AFFO) increased by 20% to $1.47 billion, demonstrating enhanced cash flow generation.
  • 4The acquisition of MIP Tower Holdings LLC (MIPT) in October 2013 significantly expanded the company's asset base, adding approximately 5,370 communications sites domestically and in Latin America.
  • 5Domestic rental and management segment revenue grew by 13%, supported by organic growth from legacy sites and contributions from new sites.
  • 6International rental and management segment revenue increased by 27%, showcasing the company's successful global expansion strategy.
  • 7The company ended 2013 with approximately $2.3 billion in available liquidity, maintaining a strong financial position.

Frequently Asked Questions

The primary driver of American Tower's revenue growth in 2013 was its rental and management operations, which accounted for approximately 98% of total revenues. This growth was fueled by both organic increases from existing 'legacy' sites and the addition of new sites through acquisitions and construction, notably the significant acquisition of MIPT.

The acquisition of MIPT in October 2013 significantly expanded American Tower's portfolio and geographic reach. While it contributed to revenue growth and diversification, it also resulted in an increase in total debt and leverage, temporarily pushing the company's net leverage outside of its long-term target range. However, the company expressed commitment to reducing this leverage through debt repayment and continued growth.

American Tower's strategy focuses on increasing the leasing of its existing communications real estate portfolio, selectively growing the portfolio through investments and acquisitions, improving operational performance, and maintaining a strong balance sheet. Capital allocation prioritizes increasing Adjusted Funds From Operations (AFFO) and return on invested capital, which includes funding capital expenditure programs, pursuing strategic acquisitions, and returning excess capital to stockholders through share repurchases or distributions.

Key risks identified include a decrease in demand for communications sites due to factors like network sharing, tenant consolidation, or technological changes; increased competition; the company's substantial leverage and debt service obligations; adverse impacts from government regulations; and risks associated with foreign operations such as currency fluctuations and political instability. The company also highlighted the concentration of revenue from a few major tenants.