10-QPeriod: Q2 FY2020

AMERICAN TOWER CORP /MA/ Quarterly Report for Q2 Ended Jun 30, 2020

Filed July 30, 2020For Securities:AMT

Summary

American Tower Corporation (AMT) reported its second-quarter and first-half 2020 results, showing resilience in its core business despite the ongoing COVID-19 pandemic. Total revenues increased slightly year-over-year for the quarter and showed more robust growth for the first half, driven primarily by its U.S. property segment and contributions from recent acquisitions, most notably the Eaton Towers acquisition. While international operations saw revenue declines due to negative foreign currency impacts and certain market-specific challenges, the company's diversified global footprint and recurring revenue model provided stability. Financially, AMT demonstrated strong operational execution with increased Adjusted EBITDA and AFFO, reflecting effective cost management and operational efficiencies. The company also actively managed its balance sheet by refinancing debt, issuing new notes, and repaying existing obligations. Liquidity remains strong, with substantial availability under its credit facilities and significant cash on hand, providing flexibility for ongoing operations, capital expenditures, and potential future growth opportunities.

Financial Highlights

50 data points
Beta

Revenue

$1.91B

Net Income

$446.10M

23.3% Net Margin

EPS (Diluted)

$1.00

Total Assets

$41.52B

Cash & Equivalents

$2.04B

Free Cash Flow

$778.30M

Financial Statements
Beta
Revenue$1.91B
SG&A Expenses$188.60M
Operating Expenses$1.22B
Operating Income$691.30M
Interest Expense$197.70M
Net Income$446.10M
EPS (Basic)$1.01
EPS (Diluted)$1.00
Shares Outstanding (Basic)443.44M
Shares Outstanding (Diluted)445.87M

Key Highlights

  • 1Total revenues increased by 1% for the three months ended June 30, 2020, to $1.91 billion, and by 5% for the six months ended June 30, 2020, to $3.91 billion.
  • 2U.S. property segment revenue showed strong growth, increasing by 8% for the quarter and 9% for the first half, driven by tenant billings and lease escalations.
  • 3Africa property segment revenue experienced significant growth (46% for the quarter, 51% for the first half), largely attributed to the Eaton Towers acquisition.
  • 4Adjusted EBITDA increased by 2% for the quarter to $1.21 billion and by 8% for the first half to $2.48 billion, demonstrating operational strength.
  • 5AFFO attributable to common stockholders grew by 1% for the quarter to $897.8 million and by 8% for the first half to $1.84 billion, indicating healthy cash flow generation.
  • 6The company actively managed its debt, issuing $3.5 billion in senior unsecured notes and repaying $1.3 billion of senior notes during the first six months of 2020.
  • 7Liquidity remains robust with $6.49 billion in available liquidity as of June 30, 2020, including $2.04 billion in cash and cash equivalents and substantial credit facility availability.

Frequently Asked Questions

While the COVID-19 pandemic presented challenges, American Tower's business demonstrated resilience. The company experienced revenue declines in some international markets due to negative foreign currency translation and market-specific factors, and noted increased bad debt expense in Asia and Africa. However, overall revenues and profitability metrics like Adjusted EBITDA and AFFO showed growth, particularly driven by the U.S. market and strategic acquisitions. The company also implemented measures to ensure operational continuity and employee safety.

Foreign currency exchange rates had a negative impact on reported revenues and operating profit. For the second quarter, the adverse impact on consolidated revenue was approximately $114 million, and on operating profit was $62 million. For the first six months, the impact on revenue was approximately $162 million and on operating profit was $88 million. Several currencies, including the Indian Rupee, Brazilian Real, Mexican Peso, and South African Rand, contributed to these fluctuations.

American Tower actively managed its debt during the first half of 2020. The company issued approximately $3.5 billion in new senior unsecured notes and repaid approximately $1.3 billion of existing senior notes. It also repaid $350 million in securitized debt and entered into new term loans totaling $1.94 billion. The company also increased commitments under its revolving credit facilities, maintaining strong liquidity.

The company continues to see growth from colocation (leasing additional space on existing sites) and amendments, particularly in the U.S. and parts of Latin America. While new site construction in India is expected to be delayed due to COVID-19 impacts, the company's strategic acquisitions, like Eaton Towers, and ongoing capital expenditure program for new site development remain key growth drivers. The recurring nature of tenant leases and contractual escalations provide a stable base for future revenue.