10-QPeriod: Q3 FY2010

AMERICAN TOWER CORP /MA/ Quarterly Report for Q3 Ended Sep 30, 2010

Filed November 5, 2010For Securities:AMT

Summary

American Tower Corporation (AMT) reported strong financial performance for the nine months ended September 30, 2010, with total operating revenues increasing by 13% year-over-year to $1.44 billion. This growth was primarily driven by a robust 14% increase in rental and management revenues, which now represent 97% of total revenues, highlighting the company's core business strength. Net income attributable to American Tower Corporation surged by 59% to $289.4 million. The company also demonstrated solid operational cash flow generation, with cash provided by operating activities increasing by 19% to $774.6 million. Significant strategic investments were made, with cash used in investing activities rising substantially due to acquisitions totaling $584.3 million, alongside ongoing capital expenditures for property and equipment. The company also successfully raised capital through a $700 million offering of 5.05% senior notes.

Financial Highlights

46 data points
Beta

Revenue

$513.32M

Net Income

$93.44M

18.2% Net Margin

EPS (Diluted)

$0.23

Total Assets

$9.45B

Cash & Equivalents

$371.88M

Free Cash Flow

$258.22M

Financial Statements
Beta
Revenue$513.32M
SG&A Expenses$57.30M
Operating Expenses$299.95M
Operating Income$213.37M
Interest Expense$62.90M
Net Income$93.44M
EPS (Basic)$0.23
EPS (Diluted)$0.23
Shares Outstanding (Basic)400.60M
Shares Outstanding (Diluted)403.45M

Key Highlights

  • 1Total operating revenues increased by 13% year-over-year to $1.44 billion for the nine months ended September 30, 2010.
  • 2Rental and management revenue, the company's primary revenue stream, grew by 14% to $1.40 billion for the same period.
  • 3Net income attributable to American Tower Corporation saw a significant increase of 59% to $289.4 million for the nine months ended September 30, 2010.
  • 4Cash provided by operating activities increased by 19% to $774.6 million for the nine months ended September 30, 2010.
  • 5The company actively pursued growth through acquisitions, spending $584.3 million on acquiring additional towers in various international markets.
  • 6American Tower Corporation successfully raised $700 million in net proceeds from a 5.05% senior notes offering to fund acquisitions and general corporate purposes.
  • 7Total debt remained significant at $4.8 billion as of September 30, 2010, but the company was in compliance with its debt covenants.

Frequently Asked Questions

The primary driver of American Tower's revenue growth is its rental and management segment, which accounts for approximately 97% of total revenues. This segment benefits from recurring revenue from tenant leases, contractual escalations, and new sites acquired or constructed.

The company is funding its growth and acquisitions through a combination of operating cash flows, debt financings, and equity offerings. Notably, they raised $700 million from a senior notes offering and also utilized borrowings under their credit facilities. Significant capital was also deployed for acquisitions, totaling $584.3 million in the nine months ended September 30, 2010.

As of September 30, 2010, American Tower had approximately $4.8 billion in total outstanding debt. While this is a substantial amount, the company reported compliance with its debt covenants and expects that cash generated from operations will be sufficient to fund capital expenditures and debt service obligations for the next 12 months.

Key risks highlighted include potential decreases in demand for communication sites due to factors like customer consolidation, economic conditions, and technological changes. The company also notes its substantial leverage, reliance on a few key customers, and the risks associated with international operations. Additionally, there are ongoing reviews related to historical stock option granting practices.