10-QPeriod: Q3 FY2013

AMERICAN TOWER CORP /MA/ Quarterly Report for Q3 Ended Sep 30, 2013

Filed October 30, 2013For Securities:AMT

Summary

American Tower Corporation (AMT) reported strong revenue growth for the first nine months of 2013, with total revenues increasing by 15% year-over-year to $2.42 billion. This growth was primarily driven by its domestic and international rental and management segments, bolstered by the acquisition and development of new sites and organic growth from existing "legacy" sites. The company's focus on expanding its portfolio through strategic acquisitions, such as the significant acquisition of MIPT, underscores its commitment to growth. Despite increased operating expenses, including depreciation and SG&A, the company maintained robust Adjusted EBITDA growth of 13% for the nine-month period, reaching $1.58 billion. AFFO also saw a substantial 18% increase, indicating strong underlying operational performance and cash generation capabilities. AMT's balance sheet reflects significant growth in its asset base, with total assets increasing substantially from the prior year, largely due to acquisitions. The company also actively managed its capital structure, undertaking various debt offerings and repaying existing obligations. Liquidity remains strong, with substantial cash and cash equivalents on hand, supplemented by significant revolving credit facilities. The company continues to prioritize reinvestment in its business while also returning capital to shareholders through distributions, underscoring its REIT status and commitment to shareholder value.

Financial Highlights

51 data points
Beta

Revenue

$807.88M

Net Income

$180.12M

22.3% Net Margin

EPS (Diluted)

$0.45

Total Assets

$18.18B

Cash & Equivalents

$4.04B

Free Cash Flow

$359.92M

Financial Statements
Beta
Revenue$807.88M
SG&A Expenses$97.78M
Operating Expenses$499.00M
Operating Income$308.88M
Interest Expense$106.33M
Net Income$180.12M
EPS (Basic)$0.46
EPS (Diluted)$0.45
Shares Outstanding (Basic)394.76M
Shares Outstanding (Diluted)398.35M

Key Highlights

  • 1Total revenues increased by 15% to $2.42 billion for the first nine months of 2013, driven by strong performance in both domestic and international rental and management segments.
  • 2Adjusted EBITDA grew by 13% year-over-year to $1.58 billion for the first nine months of 2013, demonstrating operational efficiency and revenue growth.
  • 3Affordable Funds From Operations (AFFO) increased by a significant 18% to $1.09 billion for the first nine months of 2013, reflecting healthy cash flow generation.
  • 4The company acquired over 5,000 communications sites through the significant acquisition of MIPT in October 2013, expanding its portfolio and future growth prospects.
  • 5AMT actively managed its debt, issuing new notes and repaying existing obligations, including a substantial securitization transaction in March 2013.
  • 6Total assets grew significantly, reflecting the company's aggressive acquisition and development strategy.
  • 7The company maintained strong liquidity, with substantial cash and cash equivalents and ample borrowing capacity under its credit facilities.

Frequently Asked Questions

American Tower Corporation's primary business is the leasing of antenna space on multi-tenant communications sites. This rental and management operation accounted for approximately 98% of its total revenues for the nine months ended September 30, 2013, making it the company's main revenue driver.

The acquisition of MIPT, completed on October 1, 2013, significantly expanded American Tower's portfolio by adding over 5,000 communications sites. The preliminary allocation of the purchase price indicates substantial increases in assets, including property and equipment and intangible assets, and a corresponding increase in goodwill. This acquisition was financed through a combination of cash and significant borrowings, increasing the company's total debt.

American Tower Corporation actively manages its capital structure. During the first nine months of 2013, the company issued new senior notes totaling $1.75 billion (3.40% and 5.00% senior notes) and $1.0 billion (3.50% senior notes). It also repaid significant portions of its debt, including the $1.75 billion Commercial Mortgage Pass-Through Certificates. The company utilizes its credit facilities for both short-term needs and significant financing, such as the MIPT acquisition. A substantial portion of its long-term obligations are fixed rate, with variable rate debt primarily related to its credit facilities.

Key risks include a decrease in demand for communications sites due to technological changes, tenant consolidation, or economic downturns; potential negative impacts from new technologies that could reduce the need for tower space; government regulations affecting operations; risks associated with international operations, including currency fluctuations and political instability; the potential inability to realize the benefits of acquisitions like MIPT; significant transaction and integration costs; substantial revenue concentration from a few key tenants; and the risk of failing to maintain its REIT status, which would lead to corporate income taxes and reduced cash flow.