10-QPeriod: Q3 FY2012

AMERICAN TOWER CORP /MA/ Quarterly Report for Q3 Ended Sep 30, 2012

Filed October 31, 2012For Securities:AMT

Summary

American Tower Corporation (AMT) reported solid financial performance for the nine months ended September 30, 2012. Total revenues increased by 18% to $2.1 billion, driven by strong growth in both domestic and international rental and management segments. The company's strategic acquisitions and organic growth from existing sites contributed significantly to this increase. Net income surged by 157% to $475.9 million, reflecting improved operating profit and lower income tax provisions, partly due to the company's successful transition to operating as a Real Estate Investment Trust (REIT) effective January 1, 2012. Adjusted EBITDA also saw a healthy 19% increase to $1.39 billion, indicating strong operational performance and cash flow generation. The company maintained a strong liquidity position with $2.37 billion in total liquidity, comprising cash and cash equivalents and available borrowing capacity. AMT continued to invest in its portfolio, with capital expenditures totaling $1.17 billion for investing activities, including significant acquisitions in Brazil, Colombia, Mexico, South Africa, and Uganda. The company also repaid a substantial portion of its outstanding debt and strengthened its capital structure through new debt offerings and existing credit facilities. The ongoing commitment to shareholder returns is evident through regular cash distributions declared during the period.

Financial Highlights

51 data points
Beta

Revenue

$713.34M

Net Income

$232.09M

32.5% Net Margin

EPS (Diluted)

$0.58

Total Assets

$12.96B

Cash & Equivalents

$382.31M

Free Cash Flow

$353.67M

Financial Statements
Beta
Revenue$713.34M
SG&A Expenses$81.46M
Operating Expenses$417.78M
Operating Income$295.55M
Interest Expense$102.27M
Net Income$232.09M
EPS (Basic)$0.59
EPS (Diluted)$0.58
Shares Outstanding (Basic)395.24M
Shares Outstanding (Diluted)399.49M

Key Highlights

  • 1Total revenues grew 18% year-over-year to $2.11 billion for the nine months ended September 30, 2012.
  • 2Net income attributable to American Tower Corporation increased significantly by 157% to $501.6 million for the nine months ended September 30, 2012.
  • 3Adjusted EBITDA rose 19% to $1.39 billion for the nine months ended September 30, 2012, demonstrating strong operational performance.
  • 4The company successfully transitioned to operating as a Real Estate Investment Trust (REIT) effective January 1, 2012, impacting its tax provisions and distributions.
  • 5Total liquidity remained strong at $2.37 billion as of September 30, 2012, including $382.3 million in cash and cash equivalents and substantial undrawn credit facilities.
  • 6Significant investments were made in acquisitions, with $1.17 billion used for investing activities during the nine months ended September 30, 2012, expanding the global tower portfolio.
  • 7Long-term debt was refinanced and managed, with proceeds from new debt offerings and credit facilities used to repay existing obligations and fund acquisitions.

Frequently Asked Questions

Revenue growth was primarily driven by increases in both domestic and international rental and management segments. This growth was fueled by organic revenue from legacy sites, contractual rent escalations, and revenue from approximately 12,860 new sites constructed or acquired since July 1, 2011 (for the three-month period) and 15,860 new sites since January 1, 2011 (for the nine-month period).

The transition to a REIT effective January 1, 2012, significantly reduced the company's income tax provision. For the nine months ended September 30, 2012, the effective tax rate decreased to 11.9% from 46.6% in the prior year. As a REIT, the company is required to distribute at least 90% of its REIT taxable income to stockholders, which it is doing through regular cash distributions.

As of September 30, 2012, American Tower had approximately $2.37 billion in total liquidity, consisting of $382.3 million in cash and cash equivalents and the ability to borrow up to $1.99 billion under its revolving credit facilities. The company actively managed its debt, including repaying portions of its credit facilities and issuing new senior notes to fund acquisitions and refinance existing debt, while maintaining compliance with debt covenants.

Key risks include potential decreases in demand for communications sites due to tenant consolidation, technological changes, or economic downturns; failure to qualify or remain qualified as a REIT; adverse impacts from foreign operations including currency fluctuations and political risks; increasing competition; and the substantial amount of debt the company carries, which could limit financial flexibility and impact its ability to meet obligations.