10-QPeriod: Q2 FY2015

AMERICAN TOWER CORP /MA/ Quarterly Report for Q2 Ended Jun 30, 2015

Filed July 29, 2015For Securities:AMT

Summary

American Tower Corporation (AMT) reported its second quarter 2015 results, highlighting significant expansion and a strong operational performance. The company's total revenues increased by 14% year-over-year to $1.17 billion, driven by a robust 15% growth in its rental and management segments, largely due to the strategic Verizon Transaction which added 11,448 U.S. communications sites. This expansion significantly boosted domestic segment revenues, while international operations also showed growth despite foreign currency headwinds. Adjusted EBITDA saw a healthy 12% increase, reflecting the company's ability to leverage its portfolio for organic growth and operational efficiencies. AMT's financial position was strengthened through substantial capital raises, including common stock and preferred stock offerings, totaling over $3.7 billion, which were primarily used to fund the significant Verizon Transaction. The company also managed its debt effectively, refinancing securitized debt and issuing new senior notes. Despite increased depreciation and amortization expenses due to asset growth, and a notable loss on retirement of long-term obligations, the company maintained a strong liquidity position with over $2.7 billion in total liquidity. The company's commitment to shareholder returns is evident through its declared common stock distributions, which increased compared to the prior year.

Financial Statements
Beta
Revenue$1.17B
SG&A Expenses$116.34M
Operating Expenses$784.60M
Operating Income$389.77M
Interest Expense$148.51M
Net Income$156.06M
EPS (Basic)$0.31
EPS (Diluted)$0.30
Shares Outstanding (Basic)423.15M
Shares Outstanding (Diluted)426.93M

Key Highlights

  • 1Total revenues increased 14% year-over-year to $1.17 billion, driven by a 15% increase in rental and management segment revenues.
  • 2The significant Verizon Transaction, adding 11,448 U.S. sites, contributed approximately $96.7 million in revenue during the quarter.
  • 3Adjusted EBITDA grew 12% year-over-year to $762.3 million, indicating strong operational performance and profitability.
  • 4Completed significant equity offerings, raising approximately $2.44 billion in common stock and $1.34 billion in preferred stock, primarily to fund the Verizon Transaction.
  • 5Maintained a strong liquidity position with over $2.78 billion in total liquidity, including cash and cash equivalents and available credit facilities.
  • 6Reported a $75.1 million loss on retirement of long-term obligations primarily related to the redemption of 7.000% senior notes.
  • 7Capital expenditures for the first six months of 2015 were $311.1 million for property and equipment and construction activities, with full-year guidance between $770 million and $870 million.

Frequently Asked Questions

The Verizon Transaction, which closed on March 27, 2015, significantly contributed to AMT's Q2 2015 results. It added 11,448 U.S. communications sites to the company's portfolio. This contributed approximately $96.7 million to revenue and increased domestic rental and management segment revenue by roughly 14% for the quarter. The transaction was primarily funded through equity offerings and credit facilities.

Foreign currency fluctuations had a negative impact on AMT's international segment performance. For the three months ended June 30, 2015, international rental and management segment revenue decreased by approximately 24% due to these fluctuations, with notable impacts from Brazilian Reais (BRL), Mexican Pesos (MXN), and Ghanaian Cedi (GHS). Similarly, gross margin was negatively impacted by approximately 25%.

As of June 30, 2015, American Tower Corporation maintained a strong liquidity position with over $2.78 billion in total liquidity, comprising $274.7 million in cash and cash equivalents and approximately $2.51 billion in available credit facilities. The company used cash flows from operations, financing activities, and capital raises to fund operations, capital expenditures, acquisitions, and debt obligations. In July 2015, the company borrowed an additional $850 million under its credit facility to fund its acquisition in Nigeria.

The company reported a substantial loss of $75.1 million on retirement of long-term obligations for the three months ended June 30, 2015. This was primarily due to the redemption of its 7.000% senior notes due 2017, which included prepayment consideration, write-off of unamortized deferred financing costs, and the settlement cost of a treasury rate lock. A smaller loss was also recorded related to the refinancing of securitized debt.