Summary
American Tower Corporation (AMT) reported its second-quarter and first-half 2008 financial results, showcasing strong revenue growth driven primarily by its rental and management segment. Total revenues increased by 10% year-over-year for the quarter and 9% for the first half, reflecting continued demand for tower space. The company also highlighted a significant positive impact from a change in accounting estimate for the useful lives of its tower assets, which reduced depreciation and amortization expenses and boosted net income. Operations in Mexico and Brazil contribute to overall revenue, although foreign currency fluctuations presented a minor headwind. Financially, AMT saw a substantial increase in net income, largely due to a significant tax benefit related to its investment in Verestar, Inc. and a substantial positive swing in income from discontinued operations compared to the prior year. The company continued its share repurchase program, investing significantly in its own stock. Management reiterated its belief that cash from operations will be sufficient to cover capital expenditures and debt service obligations in the coming twelve months.
Financial Highlights
23 data points| Revenue | $393.73M |
| SG&A Expenses | $41.78M |
| Operating Expenses | $238.94M |
| Operating Income | $154.79M |
| Interest Expense | $62.51M |
| Net Income | $158.79M |
| EPS (Basic) | $0.40 |
| EPS (Diluted) | $0.38 |
| Shares Outstanding (Basic) | 396.94M |
| Shares Outstanding (Diluted) | 421.62M |
Key Highlights
- 1Total revenues increased by 10% to $393.7 million for the three months ended June 30, 2008, compared to the prior year period, driven by a 10% increase in rental and management revenue.
- 2Net income surged to $158.8 million for the three months ended June 30, 2008, a significant improvement from a net loss of $20.0 million in the same period of 2007. This was heavily influenced by a $106.1 million tax benefit related to the Verestar investment.
- 3Depreciation, amortization, and accretion expenses decreased by 24% to $99.7 million for the three months ended June 30, 2008, primarily due to a prospective change in accounting estimate extending the useful lives of towers and related intangible assets from 15 to 20 years.
- 4The company repurchased approximately $285.9 million of its Class A common stock during the six months ended June 30, 2008, under its publicly announced stock repurchase programs.
- 5As of June 30, 2008, total outstanding indebtedness was approximately $4.4 billion. The company had $152.1 million in cash and cash equivalents and $650.0 million outstanding under its revolving credit facility.
- 6The company is actively addressing a material weakness in internal control over financial reporting related to accounting for income taxes.
- 7Interest expense increased by 7% to $62.5 million for the three months ended June 30, 2008, driven by higher average outstanding debt.