10-QPeriod: Q1 FY2011

AMERICAN TOWER CORP /MA/ Quarterly Report for Q1 Ended Mar 31, 2011

Filed May 5, 2011For Securities:AMT

Summary

American Tower Corporation (AMT) reported its first quarter results for the period ending March 31, 2011, showcasing robust revenue growth driven by its core rental and management operations. Total revenues increased by 24% year-over-year, largely due to a 23% rise in total gross margin, fueled by strong performance in both domestic and international segments. The company experienced significant growth in its international rental and management segment, which saw revenues jump by 75%, driven by both organic growth and the acquisition of new sites. This expansion is supported by strategic acquisitions and a growing demand for wireless infrastructure. The company also demonstrated strong operational execution with a 20% increase in total operating profit. Adjusted EBITDA, a key measure of operational performance, rose by 21% to $377.1 million, indicating effective cost management and revenue generation. Despite increased interest expenses and a higher income tax provision, net income saw a slight decrease of 5% to $92.0 million, primarily due to these increased expenses. AMT continues to actively manage its capital structure, including ongoing share repurchase programs, and is considering a REIT election for future tax benefits.

Financial Highlights

48 data points
Beta

Revenue

$562.70M

Net Income

$91.84M

16.3% Net Margin

EPS (Diluted)

$0.23

Total Assets

$10.76B

Cash & Equivalents

$362.82M

Free Cash Flow

$283.82M

Financial Statements
Beta
Revenue$562.70M
SG&A Expenses$66.13M
Operating Expenses$344.39M
Operating Income$218.30M
Interest Expense$74.43M
Net Income$91.84M
EPS (Basic)$0.23
EPS (Diluted)$0.23
Shares Outstanding (Basic)397.77M
Shares Outstanding (Diluted)401.90M

Key Highlights

  • 1Total revenues grew by 24% to $562.7 million for the first quarter of 2011 compared to the same period in 2010.
  • 2International rental and management segment revenue surged by 75% to $129.0 million, driven by significant new site acquisitions and organic growth.
  • 3Total gross margin increased by 23% to $430.9 million, reflecting effective cost management across segments.
  • 4Adjusted EBITDA, a key operational metric, rose by 21% to $377.1 million.
  • 5The company made substantial investments in acquisitions during the quarter, using $617.3 million for site acquisitions across various international markets and the U.S.
  • 6American Tower continues its share repurchase program, buying back $122.7 million of its common stock in the first quarter.
  • 7The company is actively considering an election to become a Real Estate Investment Trust (REIT) for U.S. federal and state income tax purposes.

Frequently Asked Questions

The primary driver of American Tower's revenue growth was a significant increase in both its domestic and international rental and management segments. This growth was fueled by organic revenue increases from existing sites (legacy sites) and substantial revenue from newly acquired and constructed sites. The international segment, in particular, saw remarkable growth due to new site acquisitions.

American Tower is funding its expansion through a combination of cash generated from operations, borrowings under its credit facilities, and strategic acquisitions. The company has a strong operating cash flow and significant liquidity available through its revolving credit facility. It also actively manages its capital structure, including ongoing stock repurchase programs and considering a REIT election for future tax advantages.

The company sees strong growth potential in its international operations, evidenced by the 75% revenue increase in the international rental and management segment. This growth is supported by strategic acquisitions of communication sites in markets like Brazil, Chile, Colombia, India, Ghana, Mexico, Peru, and South Africa, aligning with the company's strategy to expand in selected international markets.

American Tower is actively considering an election to qualify as a Real Estate Investment Trust (REIT) for U.S. federal and state income tax purposes. This could potentially offer tax efficiencies, such as reducing its overall tax burden, by allowing it to potentially distribute accumulated earnings and profits. The final decision is subject to board approval and ongoing compliance with REIT qualification tests.