CONSOLIDATED HIGHLIGHTS
Second Quarter 2023
- Total revenue increased 3.6% to $2,772 million
- Property revenue increased 4.4% to $2,729 million
- Net income decreased 48.2% to $462 million(1)
- Adjusted EBITDA increased 4.7% to $1,749 million
- Net income attributable to AMT common stockholders decreased
47.0% to $476 million(1)
- AFFO attributable to AMT common stockholders decreased 0.4% to
$1,151 million
American Tower Corporation (NYSE: AMT) today reported financial
results for the quarter ended June 30, 2023.
Tom Bartlett, American Tower’s Chief Executive Officer, stated,
“The momentum from the start of the year carried on into the second
quarter, as our customers continued to invest in their networks to
meet growing demand. We saw Consolidated Organic Tenant Billings
Growth exceed 6% for the second consecutive quarter, solid leasing
in our U.S. Data Center segment, and demonstrated a focus on cost
controls, all supporting strong growth and attractive margin
expansion. Additionally, we delivered another quarter of
approximately 10% dividend per share growth, while making
significant progress toward strengthening our investment grade
balance sheet. As a result, we are pleased to raise our full year
outlook for property revenue, Adjusted EBITDA and Attributable
AFFO.
As the 5G investment cycle continues, we believe our portfolio
of globally distributed communications assets is well positioned to
drive sustained, elevated leasing growth, which combined with our
focus on cost management, capital allocation discipline and
dividend growth, sets us up well to deliver attractive shareholder
returns over the long-term.”
CONSOLIDATED OPERATING RESULTS OVERVIEW
American Tower generated the following operating results for the
quarter ended June 30, 2023 (all comparative information is
presented against the quarter ended June 30, 2022).
($ in millions, except per share
amounts.)
Q2 2023
Growth Rate
Total revenue
$
2,772
3.6
%
Total property revenue
$
2,729
4.4
%
Total Tenant Billings Growth
$
133
7.2
%
Organic Tenant Billings Growth
$
115
6.2
%
Property Gross Margin
$
1,919
5.4
%
Property Gross Margin %
70.3
%
Net income(1)
$
462
(48.2
)%
Net income attributable to AMT common
stockholders(1)
$
476
(47.0
)%
Net income attributable to AMT common
stockholders per diluted share(1)
$
1.02
(47.7
)%
Adjusted EBITDA
$
1,749
4.7
%
Adjusted EBITDA Margin %
63.1
%
Nareit Funds From Operations (FFO)
attributable to AMT common stockholders(1)
$
1,133
(31.3
)%
AFFO attributable to AMT common
stockholders
$
1,151
(0.4
)%
AFFO attributable to AMT common
stockholders per Share
$
2.46
(2.0
)%
Cash provided by operating activities
$
1,209
32.1
%
Less: total cash capital
expenditures(2)
$
417
10.5
%
Free Cash Flow
$
792
47.4
%
- Q2 2023 growth rates impacted by foreign currency losses of
approximately $107.6 million in the current period as compared to
foreign currency gains of approximately $394.7 million in the
prior-year period.
- Q2 2023 cash capital expenditures include $11.9 million of
finance lease and perpetual land easement payments reported in cash
flows from financing activities in the condensed consolidated
statements of cash flows.
Please refer to “Non-GAAP and Defined Financial Measures” below
for definitions and other information regarding the Company’s use
of non-GAAP measures. For financial information and reconciliations
to GAAP measures, please refer to the “Unaudited Selected
Consolidated Financial Information” below.
CAPITAL ALLOCATION OVERVIEW
Distributions – During the quarter ended June 30, 2023,
the Company declared the following regular cash distributions to
its common stockholders:
Common Stock Distributions
Q2 2023(1)
Distributions per share
$
1.57
Aggregate amount (in millions)
$
732
Year-over-year per share growth
9.8
%
(1) The distribution declared on May 24, 2023 was paid on July
10, 2023 to stockholders of record as of the close of business on
June 16, 2023.
Capital Expenditures – During the second quarter of 2023,
total capital expenditures were approximately $417 million, of
which $34 million was for non-discretionary capital improvements
and corporate capital expenditures. For additional capital
expenditure details, please refer to the supplemental disclosure
package available on the Company’s website.
Acquisitions – During the second quarter of 2023, the
Company spent approximately $30 million to acquire 60
communications sites, as well as other communications
infrastructure assets, primarily in France and Spain.
Other Events – On May 31, 2023, the Company completed the
sale of its subsidiary in Poland (“ATC Poland”) for total
consideration of €6.7 million (approximately $7.2 million at the
date of closing), resulting in a gain on the sale of $1.1 million,
which was included in Other operating expenses. Prior to the
divestiture, ATC Poland’s operating results were included within
the Europe property segment. The divestiture did not qualify for
presentation as a discontinued operation.
LEVERAGE AND FINANCING OVERVIEW
Leverage – For the quarter ended June 30, 2023, the
Company’s Net Leverage Ratio was 5.3x net debt (total debt less
cash and cash equivalents) to second quarter 2023 annualized
Adjusted EBITDA.
Calculation of Net Leverage Ratio
($ in millions, totals may not add due to rounding.)
As of June 30, 2023
Total debt
$
38,795
Less: Cash and cash equivalents
2,016
Net Debt
$
36,779
Divided By: Second quarter annualized
Adjusted EBITDA(1)
6,998
Net Leverage Ratio
5.3x
- Q2 2023 Adjusted EBITDA multiplied by four.
Liquidity and Financing Activities – As of June 30, 2023,
the Company had approximately $8.2 billion of total liquidity,
consisting of approximately $2.0 billion in cash and cash
equivalents plus the ability to borrow an aggregate of
approximately $6.2 billion under its revolving credit facilities,
net of any outstanding letters of credit.
On May 16, 2023, the Company issued an aggregate of €1.1 billion
(approximately $1.2 billion at the date of issuance) in senior
unsecured notes and on May 25, 2023, the Company issued an
aggregate of $1.5 billion in senior unsecured notes. The net
proceeds of both offerings were used to repay existing indebtedness
under its revolving credit facilities.
On June 15, 2023, the Company repaid $700.0 million aggregate
principal amount of its 3.000% senior unsecured notes due 2023
using borrowings under its $4.0 billion revolving credit facility.
Upon completion of the repayment, none of the 3.000% senior
unsecured notes remained outstanding.
Additionally, in June 2023, the Company amended its revolving
credit facilities and $1.0 billion term loan to, among other
things, extend the maturity dates under the revolving credit
facilities and adopt an Adjusted Term SOFR (as defined in the
amendment agreements) pricing benchmark. Additionally, the Company
repaid all amounts outstanding under its $1.5 billion two-year
unsecured term loan due December 2023.
FULL YEAR 2023 OUTLOOK
The following full year 2023 estimates are based on a number of
assumptions that management believes to be reasonable and reflect
the Company’s expectations as of July 27, 2023. Actual results may
differ materially from these estimates as a result of various
factors, and the Company refers you to the cautionary language
regarding “forward-looking” statements included in this press
release when considering this information.
The Company’s outlook is based on the following average foreign
currency exchange rates to 1.00 U.S. Dollar for July 27, 2023
through December 31, 2023: (a) 339 Argentinean Pesos; (b) 1.49
Australian Dollars; (c) 111.10 Bangladeshi Taka; (d) 4.85 Brazilian
Reais; (e) 1.33 Canadian Dollars; (f) 805 Chilean Pesos; (g) 4,250
Colombian Pesos; (h) 0.92 Euros; (i) 11.35 Ghanaian Cedis; (j)
82.20 Indian Rupees; (k) 141 Kenyan Shillings; (l) 17.50 Mexican
Pesos; (m) 1.63 New Zealand Dollars; (n) 765 Nigerian Naira; (o)
7,260 Paraguayan Guarani; (p) 3.65 Peruvian Soles; (q) 55.80
Philippine Pesos; (r) 18.70 South African Rand; (s) 3,700 Ugandan
Shillings; and (t) 600 West African CFA Francs.
The Company’s outlook reflects estimated negative impacts of
foreign currency exchange rate fluctuations to property revenue,
Adjusted EBITDA and AFFO attributable to AMT common stockholders,
each by less than $5 million, relative to the Company’s prior 2023
outlook. The impact of foreign currency exchange rate fluctuations
on net income metrics is not provided, as the impact on all
components of the net income measure cannot be calculated without
unreasonable effort.
The Company is raising the midpoints of its full year 2023
outlook for property revenue, Adjusted EBITDA, AFFO attributable to
AMT common stockholders and AFFO attributable to AMT common
stockholders per Share by $125 million, $75 million, $25 million
and $0.05, respectively, primarily driven by core property
outperformance. The Company is reducing the midpoint for net income
and net income attributable to AMT common stockholders, each by $10
million, primarily due to foreign currency losses.
Additional information pertaining to the impact of foreign
currency and Secured Overnight Financing Rate (“SOFR”) fluctuations
on the Company’s outlook has been provided in the supplemental
disclosure package available on the Company’s website.
2023 Outlook ($ in millions, except
per share amounts.)
Full Year 2023
Midpoint Growth Rates vs.
Prior Year
Total property revenue(1)
$
10,790
to
$
10,970
3.9
%
Net income
1,785
to
1,845
7.0
%
Net income attributable to AMT common
stockholders
1,845
to
1,905
6.2
%
Adjusted EBITDA
6,950
to
7,030
5.2
%
AFFO attributable to AMT common
stockholders
4,490
to
4,570
0.3
%
AFFO attributable to AMT common
stockholders per Share
$
9.61
to
$
9.79
(0.6
)%
- Includes U.S. & Canada segment property revenue of $5,165
million to $5,225 million, international property revenue of $4,810
million to $4,910 million and Data Centers segment property revenue
of $815 million to $835 million, reflecting midpoint growth rates
of 3.8%, 3.5% and 7.6%, respectively. The U.S. & Canada growth
rate includes an estimated negative impact of approximately 1.5%
associated with a decrease in non-cash straight-line revenue
recognition. The international growth rate includes an estimated
negative impact of approximately 3% from the translational effects
of foreign currency exchange rate fluctuations. International
property revenue reflects the Company’s Africa, Asia-Pacific,
Europe and Latin America segments. Data Centers segment property
revenue reflects revenue from the Company’s data center facilities
and related assets.
2023 Outlook for Total Property
revenue, at the midpoint, includes the following components(1):
($ in millions, totals may not add due to rounding.)
U.S. & Canada
Property(2)
International
Property(3)
Data Centers
Property(4)
Total Property
International pass-through revenue
N/A
$
1,550
N/A
$
1,550
Straight-line revenue
383
45
20
448
- For additional discussion regarding these components, please
refer to “Revenue Components” below.
- U.S. & Canada property revenue includes revenue from all
assets in the United States and Canada, other than data center
facilities and related assets.
- International property revenue reflects the Company’s Africa,
Asia-Pacific, Europe and Latin America segments.
- Data Centers property revenue reflects revenue from the
Company’s data center facilities and related assets.
2023 Outlook for Total Tenant Billings
Growth, at the midpoint, includes the following components(1):
(Totals may not add due to rounding.)
U.S. & Canada
Property
International
Property(2)
Total Property
Organic Tenant Billings
~5%
>6.5%
~5.5%
New Site Tenant Billings
~0%
~2%
~1%
Total Tenant Billings Growth
~5%
>8.5%
~6.5%
- For additional discussion regarding the component growth rates,
please refer to “Revenue Components” below. Tenant Billings Growth
is not applicable to the Data Centers segment. For additional
details related to the Data Centers segment, please refer to the
supplemental disclosure package available on the Company’s
website.
- International property revenue reflects the Company’s Africa,
Asia-Pacific, Europe and Latin America segments.
Outlook for Capital Expenditures:
($ in millions, totals may not add due to rounding.)
Full Year 2023
Discretionary capital projects(1)
$ 785
to
$ 815
Ground lease purchases
85
to
105
Start-up capital projects
120
to
140
Redevelopment
485
to
515
Capital improvement
165
to
175
Corporate
10
—
10
Total
$ 1,650
to
$ 1,760
- Includes the construction of 3,450 to 4,550 communications
sites globally.
Reconciliation of Outlook for Adjusted
EBITDA to Net income: ($ in millions, totals may not add due to
rounding.)
Full Year 2023
Net income
$
1,785
to
$
1,845
Interest expense
1,420
to
1,400
Depreciation, amortization and
accretion
3,050
to
3,080
Income tax provision
180
to
190
Stock-based compensation expense
190
—
190
Other, including other operating expenses,
interest income, gain (loss) on retirement of long-term
obligations and other income (expense)
325
—
325
Adjusted EBITDA
$
6,950
to
$
7,030
Reconciliation of Outlook for AFFO
attributable to AMT common stockholders to Net income: ($ in
millions, except share and per share data, totals may not add due
to rounding.)
Full Year 2023
Net income
$ 1,785
to
$ 1,845
Straight-line revenue
(448)
—
(448)
Straight-line expense
32
—
32
Depreciation, amortization and
accretion
3,050
to
3,080
Stock-based compensation expense
190
—
190
Deferred portion of income tax and other
income tax adjustments
(128)
—
(128)
Other, including other operating expense,
amortization of deferred financing costs, debt discounts
and premiums, gain (loss) on retirement of
long-term obligations, other income (expense),
long-term deferred interest charges and
distributions to minority interests
439
—
439
Capital improvement capital
expenditures
(165)
to
(175)
Corporate capital expenditures
(10)
—
(10)
Consolidated AFFO
$ 4,745
to
$ 4,825
Minority interest
$ (255)
—
$ (255)
AFFO attributable to AMT common
stockholders
$ 4,490
to
$ 4,570
Divided by weighted average diluted shares
outstanding (in thousands)
467,000
—
467,000
AFFO attributable to AMT common
stockholders per Share
$ 9.61
to
$ 9.79
Conference Call Information
American Tower will host a conference call today at 8:30 a.m. ET
to discuss its financial results for the quarter ended June 30,
2023 and its updated outlook for 2023. Supplemental materials for
the call will be available on the Company’s website, www.americantower.com. The conference call dial-in
numbers are as follows:
U.S./Canada dial-in: (844) 291-4185
International dial-in: (409) 207-6997 Passcode: 9195827
When available, a replay of the call can be accessed until 11:59
p.m. ET on August 10, 2023. The replay dial-in numbers are as
follows:
U.S./Canada dial-in: (866) 207-1041
International dial-in: (402) 970-0847 Passcode: 6812094
American Tower will also sponsor a live simulcast and replay of
the call on its website, www.americantower.com.
About American Tower
American Tower, one of the largest global REITs, is a leading
independent owner, operator and developer of multitenant
communications real estate with a portfolio of nearly 226,000
communications sites and a highly interconnected footprint of U.S.
data center facilities. For more information about American Tower,
please visit the “Earnings Materials” and “Investor Presentations”
sections of our investor relations website at www.americantower.com.
Non-GAAP and Defined Financial
Measures
In addition to the results prepared in accordance with generally
accepted accounting principles in the United States (GAAP) provided
throughout this press release, the Company has presented the
following Non-GAAP and Defined Financial Measures: Gross Margin,
Operating Profit, Operating Profit Margin, Adjusted EBITDA,
Adjusted EBITDA Margin, Nareit Funds From Operations (FFO)
attributable to American Tower Corporation common stockholders,
Consolidated Adjusted Funds From Operations (AFFO), AFFO
attributable to American Tower Corporation common stockholders,
AFFO attributable to American Tower Corporation common stockholders
per Share, Free Cash Flow, Net Debt and Net Leverage Ratio. In
addition, the Company presents: Tenant Billings, Tenant Billings
Growth, Organic Tenant Billings Growth and New Site Tenant Billings
Growth.
These measures are not intended to replace financial performance
measures determined in accordance with GAAP. Rather, they are
presented as additional information because management believes
they are useful indicators of the current financial performance of
the Company's core businesses and are commonly used across its
industry peer group. As outlined in detail below, the Company
believes that these measures can assist in comparing company
performance on a consistent basis irrespective of depreciation and
amortization or capital structure, while also providing valuable
incremental insight into the underlying operating trends of its
business.
Depreciation and amortization can vary significantly among
companies depending on accounting methods, particularly where
acquisitions or non-operating factors, including historical cost
basis, are involved. The Company's Non-GAAP and Defined Financial
Measures may not be comparable to similarly titled measures used by
other companies.
Revenue Components
In addition to reporting total revenue, the Company believes
that providing transparency around the components of its revenue
provides investors with insight into the indicators of the
underlying demand for, and operating performance of, its real
estate portfolio. Accordingly, the Company has provided disclosure
of the following revenue components: (i) Tenant Billings, (ii) New
Site Tenant Billings; (iii) Organic Tenant Billings; (iv)
International pass-through revenue; (v) Straight-line revenue; (vi)
Pre-paid amortization revenue; (vii) Foreign currency exchange
impact; and (viii) Other revenue.
Tenant Billings: The majority of the Company’s revenue is
generated from non-cancellable, long-term tenant leases. Revenue
from Tenant Billings reflects several key aspects of the Company’s
real estate business: (i) “colocations/amendments” reflects new
tenant leases for space on existing sites and amendments to
existing leases to add additional tenant equipment; (ii)
“escalations” reflects contractual increases in billing rates,
which are typically tied to fixed percentages or a variable
percentage based on a consumer price index; (iii) “cancellations”
reflects the impact of tenant lease terminations or non-renewals
or, in limited circumstances, when the lease rates on existing
leases are reduced; and (iv) “new sites” reflects the impact of new
property construction and acquisitions.
New Site Tenant Billings: Day-one Tenant Billings
associated with sites that have been built or acquired since the
beginning of the prior-year period. Incremental
colocations/amendments, escalations or cancellations that occur on
these sites after the date of their addition to our portfolio are
not included in New Site Tenant Billings. The Company believes
providing New Site Tenant Billings enhances an investor’s ability
to analyze the Company’s existing real estate portfolio growth as
well as its development program growth, as the Company’s
construction and acquisition activities can drive variability in
growth rates from period to period.
Organic Tenant Billings: Tenant Billings on sites that
the Company has owned since the beginning of the prior-year period,
as well as Tenant Billings activity on new sites that occurred
after the date of their addition to the Company’s portfolio.
International pass-through revenue: A portion of the
Company’s pass-through revenue is based on power and fuel expense
reimbursements and therefore subject to fluctuations in fuel
prices. As a result, revenue growth rates may fluctuate depending
on the market price for fuel in any given period, which is not
representative of the Company’s real estate business and its
economic exposure to power and fuel costs. Furthermore, this
expense reimbursement mitigates the economic impact associated with
fluctuations in operating expenses, such as power and fuel costs
and land rents in certain of the Company’s markets. As a result,
the Company believes that it is appropriate to provide insight into
the impact of pass-through revenue on certain revenue growth
rates.
Straight-line revenue: Under GAAP, the Company recognizes
revenue on a straight-line basis over the term of the contract for
certain of its tenant leases. Due to the Company’s significant base
of non-cancellable, long-term tenant leases, this can result in
significant fluctuations in growth rates upon tenant lease signings
and renewals (typically increases), when amounts billed or received
upfront upon these events are initially deferred. These signings
and renewals are only a portion of the Company’s underlying
business growth and can distort the underlying performance of our
Tenant Billings Growth. As a result, the Company believes that it
is appropriate to provide insight into the impact of straight-line
revenue on certain growth rates in revenue and select other
measures.
Pre-paid amortization revenue: The Company recovers a
portion of the costs it incurs for the redevelopment and
development of its properties from its tenants. These upfront
payments are then amortized over the initial term of the
corresponding tenant lease. Given this amortization is not
necessarily directly representative of underlying leasing activity
on its real estate portfolio (i.e. does not have a renewal option
or escalation as our tenant leases do), the Company believes that
it is appropriate to provide insight into the impact of pre-paid
amortization revenue on certain revenue growth rates to provide
transparency into the underlying performance of our real estate
business.
Foreign currency exchange impact: The majority of the
Company’s international revenue and operating expenses are
denominated in each country’s local currency. As a result, foreign
currency fluctuations may distort the underlying performance of our
real estate business from period to period, depending on the
movement of foreign currency exchange rates versus the U.S. Dollar.
The Company believes it is appropriate to quantify the impact of
foreign currency exchange rate fluctuations on its reported growth
to provide transparency into the underlying performance of its real
estate business.
Other revenue: Other revenue represents revenue not
captured by the above listed items and can include items such as
customer settlements, fiber solutions revenue and data centers
revenue.
Non-GAAP and Defined Financial Measure
Definitions
Tenant Billings Growth: The increase or decrease
resulting from a comparison of Tenant Billings for a current period
with Tenant Billings for the corresponding prior-year period, in
each case adjusted for foreign currency exchange rate fluctuations.
The Company believes this measure provides valuable insight into
the growth in recurring Tenant Billings and underlying demand for
its real estate portfolio.
Organic Tenant Billings Growth: The portion of Tenant
Billings Growth attributable to Organic Tenant Billings. The
Company believes that organic growth is a useful measure of its
ability to add tenancy and incremental revenue to its assets for
the reported period, which enables investors and analysts to gain
additional insight into the relative attractiveness, and therefore
the value, of the Company’s property assets.
New Site Tenant Billings Growth: The portion of Tenant
Billings Growth attributable to New Site Tenant Billings. The
Company believes this measure provides valuable insight into the
growth attributable to Tenant Billings from recently acquired or
constructed properties.
Gross Margin: Revenues less operating expenses, excluding
depreciation, amortization and accretion, selling, general,
administrative and development expense and other operating
expenses. The Company believes this measure provides valuable
insight into the site-level profitability of its assets.
Operating Profit: Gross Margin less selling, general,
administrative and development expense, excluding stock-based
compensation expense and corporate expenses. The Company believes
this measure provides valuable insight into the site-level
profitability of its assets while also taking into account the
overhead expenses required to manage each of its operating
segments.
Operating Profit Margin: The percentage that results from
dividing Operating Profit by revenue.
Adjusted EBITDA: Net income before income (loss) from
equity method investments, income tax benefit (provision), other
income (expense), gain (loss) on retirement of long-term
obligations, interest expense, interest income, other operating
income (expense), depreciation, amortization and accretion and
stock-based compensation expense. The Company believes this measure
provides valuable insight into the profitability of its operations
while at the same time taking into account the central overhead
expenses required to manage its global operations. In addition, it
is a widely used performance measure across the telecommunications
real estate sector.
Adjusted EBITDA Margin: The percentage that results from
dividing Adjusted EBITDA by total revenue.
Nareit Funds From Operations (FFO), as defined by the
National Association of Real Estate Investment Trusts (Nareit),
attributable to American Tower Corporation common stockholders:
Net income before gains or losses from the sale or disposal of real
estate, real estate related impairment charges, real estate related
depreciation, amortization and accretion less dividends to
noncontrolling interests, and including adjustments for (i)
unconsolidated affiliates and (ii) noncontrolling interests. The
Company believes this measure provides valuable insight into the
operating performance of its property assets by excluding the
charges described above, particularly depreciation expenses, given
the high initial, up-front capital intensity of the Company’s
operating model. In addition, it is a widely used performance
measure across the telecommunications real estate sector.
Consolidated Adjusted Funds From Operations (AFFO):
Nareit FFO attributable to American Tower Corporation common
stockholders before (i) straight-line revenue and expense, (ii)
stock-based compensation expense, (iii) the deferred portion of
income tax and other income tax adjustments, (iv) non-real estate
related depreciation, amortization and accretion, (v) amortization
of deferred financing costs, debt discounts and premiums and
long-term deferred interest charges, (vi) other income (expense),
(vii) gain (loss) on retirement of long-term obligations, (viii)
other operating income (expense), and adjustments for (ix)
unconsolidated affiliates and (x) noncontrolling interests, less
cash payments related to capital improvements and cash payments
related to corporate capital expenditures. The Company believes
this measure provides valuable insight into the operating
performance of its property assets by further adjusting the Nareit
FFO attributable to American Tower Corporation common stockholders
metric to exclude the factors outlined above, which if unadjusted,
may cause material fluctuations in Nareit FFO attributable to
American Tower Corporation common stockholders growth from period
to period that would not be representative of the underlying
performance of the Company’s property assets in those periods. In
addition, it is a widely used performance measure across the
telecommunications real estate sector.
Adjusted Funds From Operations (AFFO) attributable to
American Tower Corporation common stockholders: Consolidated
AFFO, excluding the impact of noncontrolling interests on both
Nareit FFO attributable to American Tower Corporation common
stockholders and the other line items included in the calculation
of Consolidated AFFO. The Company believes that providing this
additional metric enhances transparency, given the minority
interests in its Europe business and its U.S. data center
business.
AFFO attributable to American Tower Corporation common
stockholders per Share: AFFO attributable to American Tower
Corporation common stockholders divided by the diluted weighted
average common shares outstanding.
Free Cash Flow: Cash provided by operating activities
less total cash capital expenditures, including payments on finance
leases and perpetual land easements. The Company believes that Free
Cash Flow is useful to investors as the basis for comparing our
performance and coverage ratios with other companies in its
industry, although this measure of Free Cash Flow may not be
directly comparable to similar measures used by other
companies.
Net Debt: Total long-term debt, including current portion
and finance lease liabilities, less cash and cash equivalents.
Net Leverage Ratio: Net Debt divided by the quarter’s
annualized Adjusted EBITDA (the quarter’s Adjusted EBITDA
multiplied by four). The Company believes that including this
calculation is important for investors and analysts given it is a
critical component underlying its credit agency ratings.
Cautionary Language Regarding
Forward-Looking Statements
This press release contains “forward-looking statements”
concerning our goals, beliefs, expectations, strategies,
objectives, plans, future operating results and underlying
assumptions and other statements that are not necessarily based on
historical facts. Examples of these statements include, but are not
limited to, statements regarding our full year 2023 outlook and
other targets, foreign currency exchange rates, our expectations
regarding the potential impacts of the Adjusted Gross Revenue court
ruling in India, including impacts on our customers’ payments, and
factors that could affect such expectations, the creditworthiness
and financial strength of our customers, including the expected
impacts of payment shortfalls by VIL on our business and our
operating results, our expectations regarding potential additional
impairments in India and factors that could affect our expectations
and our expectations regarding the leasing demand for
communications real estate. Actual results may differ materially
from those indicated in our forward-looking statements as a result
of various important factors, including: (1) a significant decrease
in leasing demand for our communications infrastructure would
materially and adversely affect our business and operating results,
and we cannot control that demand; (2) a substantial portion of our
current and projected future revenue is derived from a small number
of customers, and we are sensitive to adverse changes in the
creditworthiness and financial strength of our customers; (3) if
our customers consolidate their operations, exit their businesses
or share site infrastructure to a significant degree, our growth,
revenue and ability to generate positive cash flows could be
materially and adversely affected; (4) increasing competition
within our industry may materially and adversely affect our
revenue; (5) our expansion initiatives involve a number of risks
and uncertainties, including those related to integrating acquired
or leased assets, that could adversely affect our operating
results, disrupt our operations or expose us to additional risk;
(6) new technologies or changes, or lack thereof, in our or a
customer’s business model could make our communications
infrastructure leasing business less desirable and result in
decreasing revenues and operating results; (7) competition for
assets could adversely affect our ability to achieve our return on
investment criteria; (8) our leverage and debt service obligations,
including during a rising interest rates environment, may
materially and adversely affect our ability to raise additional
financing to fund capital expenditures, future growth and expansion
initiatives and to satisfy our distribution requirements; (9)
rising inflation may adversely affect us by increasing costs beyond
what we can recover through price increases; (10) restrictive
covenants in the agreements related to our securitization
transactions, our credit facilities and our debt securities could
materially and adversely affect our business by limiting
flexibility, and we may be prohibited from paying dividends on our
common stock, which may jeopardize our qualification for taxation
as a REIT; (11) the transition to SOFR based loans may adversely
affect our cost to obtain financing; (12) our business, and that of
our customers, is subject to laws, regulations and administrative
and judicial decisions, and changes thereto, that could restrict
our ability to operate our business as we currently do or impact
our competitive landscape; (13) our foreign operations are subject
to economic, political and other risks that could materially and
adversely affect our revenues or financial position, including
risks associated with fluctuations in foreign currency exchange
rates; (14) we may be adversely affected by regulations related to
climate change; (15) if we fail to remain qualified for taxation as
a REIT, we will be subject to tax at corporate income tax rates,
which may substantially reduce funds otherwise available, and even
if we qualify for taxation as a REIT, we may face tax liabilities
that impact earnings and available cash flow; (16) complying with
REIT requirements may limit our flexibility or cause us to forego
otherwise attractive opportunities; (17) we could have liability
under environmental and occupational safety and health laws; (18)
our towers, fiber networks, data centers or computer systems may be
affected by natural disasters (including as a result of climate
change) and other unforeseen events for which our insurance may not
provide adequate coverage or result in increased insurance
premiums; (19) if we, or third parties on which we rely, experience
technology failures, including cybersecurity incidents or the loss
of personally identifiable information, we may incur substantial
costs and suffer other negative consequences, which may include
reputational damage; (20) our costs could increase and our revenues
could decrease due to perceived health risks from radio emissions,
especially if these perceived risks are substantiated; (21) if we
are unable to protect our rights to the land under our towers and
buildings in which our data centers are located, it could adversely
affect our business and operating results; and (22) if we are
unable or choose not to exercise our rights to purchase towers that
are subject to lease and sublease agreements at the end of the
applicable period, our cash flows derived from those towers will be
eliminated. For additional information regarding factors that may
cause actual results to differ materially from those indicated in
our forward-looking statements, we refer you to the information
provided in Item 1A of the Company’s 2022 Form 10-K, as updated in
our upcoming Form 10-Q for the six months ended June 30, 2023,
under the caption “Risk Factors.” We undertake no obligation to
update the information contained in this press release to reflect
subsequently occurring events or circumstances.
UNAUDITED CONSOLIDATED BALANCE
SHEETS
(In millions)
June 30, 2023
December 31, 2022
ASSETS
CURRENT ASSETS:
Cash and cash equivalents
$
2,015.7
$
2,028.4
Restricted cash
133.7
112.3
Accounts receivable, net
684.0
758.3
Prepaid and other current assets
848.0
723.3
Total current assets
3,681.4
3,622.3
PROPERTY AND EQUIPMENT, net
19,758.8
19,998.3
GOODWILL
13,050.7
12,956.7
OTHER INTANGIBLE ASSETS, net
17,286.0
17,983.3
DEFERRED TAX ASSET
125.7
129.2
DEFERRED RENT ASSET
3,284.6
3,039.1
RIGHT-OF-USE ASSET
8,981.7
8,918.9
NOTES RECEIVABLE AND OTHER NON-CURRENT
ASSETS
710.1
546.7
TOTAL
$
66,879.0
$
67,194.5
LIABILITIES
CURRENT LIABILITIES:
Accounts payable
$
216.2
$
218.6
Accrued expenses
1,182.3
1,344.2
Distributions payable
751.1
745.3
Accrued interest
260.8
261.0
Current portion of operating lease
liability
794.5
788.9
Current portion of long-term
obligations
3,205.1
4,514.2
Unearned revenue
515.7
439.7
Total current liabilities
6,925.7
8,311.9
LONG-TERM OBLIGATIONS
35,589.5
34,156.0
OPERATING LEASE LIABILITY
7,587.4
7,591.9
ASSET RETIREMENT OBLIGATIONS
2,122.9
2,047.4
DEFERRED TAX LIABILITY
1,487.7
1,492.0
OTHER NON-CURRENT LIABILITIES
1,158.6
1,186.8
Total liabilities
54,871.8
54,786.0
COMMITMENTS AND CONTINGENCIES
EQUITY:
Common stock
4.8
4.8
Additional paid-in capital
14,779.2
14,689.0
Distributions in excess of earnings
(2,755.8
)
(2,101.9
)
Accumulated other comprehensive loss
(5,560.6
)
(5,718.3
)
Treasury stock
(1,301.2
)
(1,301.2
)
Total American Tower Corporation
equity
5,166.4
5,572.4
Noncontrolling interests
6,840.8
6,836.1
Total equity
12,007.2
12,408.5
TOTAL
$
66,879.0
$
67,194.5
UNAUDITED CONSOLIDATED STATEMENTS OF
OPERATIONS
(In millions, except share and per share
data)
Three Months Ended June
30,
Six Months Ended June
30,
2023
2022
2023
2022
REVENUES:
Property
$
2,728.6
$
2,614.5
$
5,443.1
$
5,215.3
Services
43.1
59.8
95.8
119.3
Total operating revenues
2,771.7
2,674.3
5,538.9
5,334.6
OPERATING EXPENSES:
Costs of operations (exclusive of items
shown separately below):
Property
810.1
794.0
1,597.1
1,565.5
Services
17.2
28.9
36.3
56.8
Depreciation, amortization and
accretion
764.6
826.5
1,558.7
1,642.3
Selling, general, administrative and
development expense(1)
244.4
222.9
508.3
516.8
Other operating expenses
61.7
19.7
189.2
45.8
Total operating expenses
1,898.0
1,892.0
3,889.6
3,827.2
OPERATING INCOME
873.7
782.3
1,649.3
1,507.4
OTHER INCOME (EXPENSE):
Interest income
30.6
14.3
61.4
24.2
Interest expense
(348.1
)
(276.6
)
(688.3
)
(539.0
)
Loss on retirement of long-term
obligations
(0.3
)
—
(0.3
)
—
Other (expense) income (including foreign
currency (losses) gains of ($107.6), $394.7, ($191.7) and $636.8,
respectively)
(81.2
)
378.3
(179.0
)
630.9
Total other (expense) income
(399.0
)
116.0
(806.2
)
116.1
INCOME FROM CONTINUING OPERATIONS BEFORE
INCOME TAXES
474.7
898.3
843.1
1,623.5
Income tax provision
(13.2
)
(7.4
)
(66.6
)
(29.9
)
NET INCOME
461.5
890.9
776.5
1,593.6
Net loss attributable to noncontrolling
interests
14.2
7.3
35.0
16.3
NET INCOME ATTRIBUTABLE TO AMERICAN TOWER
CORPORATION COMMON STOCKHOLDERS
$
475.7
$
898.2
$
811.5
$
1,609.9
NET INCOME PER COMMON SHARE AMOUNTS:
Basic net income attributable to American
Tower Corporation common stockholders
$
1.02
$
1.96
$
1.74
$
3.52
Diluted net income attributable to
American Tower Corporation common stockholders
$
1.02
$
1.95
$
1.74
$
3.51
WEIGHTED AVERAGE COMMON SHARES OUTSTANDING
(in thousands):
BASIC
466,087
458,776
465,915
457,369
DILUTED
466,979
459,819
466,939
458,564
- Selling, general, administrative and development expense
includes stock-based compensation expense in aggregate amounts of
$49.4 million and $114.9 million for the three and six months ended
June 30, 2023, respectively, and $42.2 million and $98.9 million
for the three and six months ended June 30, 2022,
respectively.
UNAUDITED CONDENSED CONSOLIDATED
STATEMENTS OF CASH FLOWS
(In millions)
Six Months Ended June
30,
2023
2022
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income
$
776.5
$
1,593.6
Adjustments to reconcile net income to
cash provided by operating activities:
Depreciation, amortization and
accretion
1,558.7
1,642.3
Stock-based compensation expense
114.9
98.9
Loss on early retirement of long-term
obligations
0.3
—
Other non-cash items reflected in
statements of operations
366.0
(655.5
)
Increase in net deferred rent balances
(232.8
)
(222.7
)
Right-of-use asset and Operating lease
liability, net
(62.7
)
(7.1
)
Unearned revenue
46.5
(495.3
)
Increase in assets
(238.1
)
(240.3
)
Decrease in liabilities
(49.4
)
(135.0
)
Cash provided by operating activities
2,279.9
1,578.9
CASH FLOWS FROM INVESTING ACTIVITIES:
Payments for purchase of property and
equipment and construction activities
(882.8
)
(756.2
)
Payments for acquisitions, net of cash
acquired
(91.2
)
(218.3
)
Proceeds from sales of short-term
investments and other non-current assets
6.9
9.2
Deposits and other
250.6
61.8
Cash used for investing activities
(716.5
)
(903.5
)
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from short-term borrowings,
net
146.2
—
Borrowings under credit facilities
4,780.0
2,900.0
Proceeds from issuance of senior notes,
net
4,182.3
1,293.6
Proceeds from issuance of securities in
securitization transaction
1,300.0
—
Repayments of notes payable, credit
facilities, senior notes, secured debt, term loans and finance
leases(1)
(10,409.6
)
(5,954.0
)
Contributions from noncontrolling interest
holders
1.9
48.4
Distributions to noncontrolling interest
holders
(22.7
)
(0.1
)
Proceeds from stock options and employee
stock purchase plan
10.3
19.8
Distributions paid on common stock
(1,461.3
)
(1,280.1
)
Proceeds from the issuance of common
stock, net
—
2,291.7
Deferred financing costs and other
financing activities(2)
(100.9
)
(74.7
)
Cash used for financing activities
(1,573.8
)
(755.4
)
Net effect of changes in foreign currency
exchange rates on cash and cash equivalents, and restricted
cash
19.1
(60.2
)
NET INCREASE (DECREASE) IN CASH AND CASH
EQUIVALENTS, AND RESTRICTED CASH
8.7
(140.2
)
CASH AND CASH EQUIVALENTS, AND RESTRICTED
CASH, BEGINNING OF PERIOD
2,140.7
2,343.3
CASH AND CASH EQUIVALENTS, AND RESTRICTED
CASH, END OF PERIOD
$
2,149.4
$
2,203.1
CASH PAID FOR INCOME TAXES, NET(3)
$
131.1
$
181.4
CASH PAID FOR INTEREST
$
681.4
$
529.9
- Six months ended June 30, 2023 and June 30, 2022 include $4.1
million and $3.2 million of finance lease payments,
respectively.
- Six months ended June 30, 2023 and June 30, 2022 include $21.6
million and $19.3 million of perpetual land easement payments,
respectively.
- Six months ended June 30, 2022 include $46.6 million related to
the Global Tower Partners (“GTP”) one-time cash settlement. In
2015, the Company incurred charges in connection with a tax
election pursuant to which MIP Tower Holdings LLC, parent company
to GTP, would no longer operate as a separate REIT for federal and
state income tax purposes. The Company finalized a settlement
related to this tax election in the six month period ended June 30,
2022.
UNAUDITED CONSOLIDATED RESULTS FROM
OPERATIONS, BY SEGMENT
($ in millions, totals may not add due to
rounding.)
Three Months Ended June 30,
2023
Property
Services
Total
U.S. & Canada
Latin America
Asia- Pacific
Africa
Europe
Total International(1)
Data Centers(2)
Total Property
Segment revenues
$
1,303
$
439
$
262
$
321
$
198
$
1,221
$
205
$
2,729
$
43
$
2,772
Segment operating expenses
217
140
180
113
77
510
84
810
17
827
Segment Gross Margin
$
1,086
$
300
$
82
$
208
$
121
$
711
$
121
$
1,919
$
26
$
1,944
Segment SG&A(3)
42
24
17
19
15
75
19
135
5
140
Segment Operating Profit
$
1,045
$
276
$
65
$
190
$
106
$
636
$
103
$
1,784
$
21
$
1,804
Segment Operating Profit Margin
80
%
63
%
25
%
59
%
53
%
52
%
50
%
65
%
48
%
65
%
Growth Metrics
Revenue Growth
5.4
%
3.3
%
(12.2
)%
12.5
%
10.9
%
2.8
%
7.2
%
4.4
%
(27.9
)%
3.6
%
Total Tenant Billings Growth
5.1
%
5.6
%
8.8
%
18.1
%
10.2
%
10.3
%
N/A
7.2
%
Organic Tenant Billings Growth
5.1
%
5.4
%
5.6
%
12.9
%
8.3
%
7.9
%
N/A
6.2
%
Revenue Components(4)
Prior-Year Tenant Billings
$
1,101
$
276
$
158
$
196
$
117
$
747
$
—
$
1,848
Colocations/Amendments
59
10
11
14
3
38
—
97
Escalations
32
22
3
23
7
55
—
88
Cancellations
(33
)
(17
)
(6
)
(12
)
(1
)
(36
)
—
(69
)
Other
(2
)
0
0
1
(0
)
1
—
(1
)
Organic Tenant Billings
$
1,158
$
290
$
167
$
221
$
127
$
806
$
—
$
1,963
New Site Tenant Billings
(0
)
1
5
10
2
18
—
18
Total Tenant Billings
$
1,157
$
291
$
172
$
231
$
129
$
824
$
—
$
1,981
Foreign Currency Exchange Impact(5)
(0
)
8
(11
)
(30
)
2
(30
)
—
(31
)
Total Tenant Billings (Current Period)
$
1,157
$
299
$
161
$
201
$
131
$
793
$
—
$
1,951
Straight-Line Revenue
101
(2
)
1
17
1
17
5
123
Pre-paid Amortization Revenue
21
0
—
0
4
5
—
26
Other Revenue
24
23
(21
)
(14
)
8
(4
)
200
219
International Pass-Through Revenue
—
116
127
134
53
430
—
430
Foreign Currency Exchange Impact(6)
(0
)
2
(7
)
(17
)
1
(21
)
—
(21
)
Total Property Revenue (Current
Period)
$
1,303
$
439
$
262
$
321
$
198
$
1,221
$
205
$
2,729
- Total International reflects the Company’s international
operations excluding Canada.
- For additional details related to the Data Centers segment,
please refer to the supplemental disclosure package available on
the Company’s website.
- Excludes stock-based compensation expense.
- All components of revenue, except those labeled current period,
have been translated at prior-period foreign currency exchange
rates.
- Reflects foreign currency exchange impact on all components of
Total Tenant Billings.
- Reflects foreign currency exchange impact on components of
revenue, other than Total Tenant Billings.
UNAUDITED CONSOLIDATED RESULTS FROM
OPERATIONS, BY SEGMENT (CONTINUED)
($ in millions, totals may not add due to
rounding.)
Three Months Ended June 30,
2022
Property
Services
Total
U.S. & Canada
Latin America
Asia- Pacific
Africa
Europe
Total International(1)
Data Centers(2)
Total Property
Segment revenues
$
1,236
$
425
$
298
$
286
$
179
$
1,188
$
191
$
2,615
$
60
$
2,674
Segment operating expenses
213
134
182
112
75
502
79
794
29
823
Segment Gross Margin
$
1,023
$
292
$
116
$
174
$
104
$
685
$
112
$
1,821
$
31
$
1,851
Segment SG&A(3)
44
26
6
22
14
68
16
127
5
132
Segment Operating Profit
$
980
$
266
$
110
$
152
$
89
$
617
$
97
$
1,693
$
26
$
1,719
Segment Operating Profit Margin
79
%
63
%
37
%
53
%
50
%
52
%
51
%
65
%
43
%
64
%
Growth Metrics
Revenue Growth
0.4
%
16.3
%
(0.1
)%
15.1
%
103.6
%
18.8
%
7,544.0
%
17.1
%
(9.3
)%
16.3
%
Total Tenant Billings Growth
(0.4
)%
13.5
%
7.7
%
15.5
%
110.6
%
22.0
%
N/A
7.8
%
Organic Tenant Billings Growth
(0.4
)%
8.3
%
3.9
%
9.0
%
11.2
%
7.8
%
N/A
2.6
%
Revenue Components(4)
Prior-Year Tenant Billings
$
1,106
$
238
$
154
$
183
$
61
$
636
$
—
$
1,743
Colocations/Amendments
31
9
9
15
3
36
—
68
Escalations
31
21
3
11
5
39
—
70
Cancellations
(65
)
(11
)
(6
)
(9
)
(1
)
(26
)
—
(91
)
Other
(1
)
0
(0
)
(0
)
0
0
—
(1
)
Organic Tenant Billings
$
1,102
$
258
$
160
$
200
$
68
$
686
$
—
$
1,788
New Site Tenant Billings
(1
)
12
6
12
61
91
—
90
Total Tenant Billings
$
1,101
$
270
$
166
$
212
$
129
$
777
$
—
$
1,878
Foreign Currency Exchange Impact(5)
(0
)
5
(7
)
(16
)
(12
)
(30
)
—
(30
)
Total Tenant Billings (Current Period)
$
1,101
$
276
$
158
$
196
$
117
$
747
$
—
$
1,848
Straight-Line Revenue
103
0
1
4
1
7
5
114
Pre-paid Amortization Revenue
25
1
—
0
3
4
—
29
Other Revenue
7
39
0
(9
)
1
33
186
226
International Pass-Through Revenue
—
107
144
100
56
408
—
408
Foreign Currency Exchange Impact(6)
0
2
(6
)
(7
)
(0
)
(11
)
—
(11
)
Total Property Revenue (Current
Period)
$
1,236
$
425
$
298
$
286
$
179
$
1,188
$
191
$
2,615
- Total International reflects the Company’s international
operations excluding Canada.
- For additional details related to the Data Centers segment,
please refer to the supplemental disclosure package available on
the Company’s website.
- Excludes stock-based compensation expense.
- All components of revenue, except those labeled current period,
have been translated at prior-period foreign currency exchange
rates.
- Reflects foreign currency exchange impact on all components of
Total Tenant Billings.
- Reflects foreign currency exchange impact on components of
revenue, other than Total Tenant Billings.
UNAUDITED SELECTED CONSOLIDATED FINANCIAL INFORMATION($ in
millions, except share and per share data, totals may not add due
to rounding.)
The reconciliation of Adjusted EBITDA
to net income and the calculation of Adjusted EBITDA Margin are as
follows:
Three Months Ended June
30,
2023
2022
Net income
$
461.5
$
890.9
Income tax provision
13.2
7.4
Other expense (income)
81.2
(378.3
)
Loss on retirement of long-term
obligations
0.3
—
Interest expense
348.1
276.6
Interest income
(30.6
)
(14.3
)
Other operating expenses
61.7
19.7
Depreciation, amortization and
accretion
764.6
826.5
Stock-based compensation expense
49.4
42.2
Adjusted EBITDA
$
1,749.4
$
1,670.7
Total revenue
$
2,771.7
$
2,674.3
Adjusted EBITDA Margin
63
%
63
%
The reconciliation of Nareit FFO attributable to American
Tower Corporation common stockholders to net income and the
calculation of Consolidated AFFO, AFFO attributable to American
Tower Corporation common stockholders and AFFO attributable to
American Tower Corporation common stockholders per Share are as
follows:
Three Months Ended June
30,
2023
2022
Net income
$
461.5
$
890.9
Real estate related depreciation,
amortization and accretion
703.0
796.4
Losses from sale or disposal of real
estate and real estate related impairment charges(1)
50.3
4.3
Dividends to noncontrolling
interests(2)
(11.4
)
—
Adjustments for unconsolidated affiliates
and noncontrolling interests
(70.8
)
(42.6
)
Nareit FFO attributable to AMT common
stockholders
$
1,132.6
$
1,649.0
Straight-line revenue
(120.8
)
(113.3
)
Straight-line expense
7.6
10.7
Stock-based compensation expense
49.4
42.2
Deferred portion of income tax and other
income tax adjustments
(55.6
)
(74.2
)
GTP one-time cash tax settlement
—
0.8
Non-real estate related depreciation,
amortization and accretion
61.6
30.1
Amortization of deferred financing costs,
debt discounts and premiums and long-term
deferred interest charges
12.5
11.4
Other expense (income)(3)
81.2
(378.3
)
Loss on retirement of long-term
obligations
0.3
—
Other operating expense(4)
11.4
15.4
Capital improvement capital
expenditures
(30.0
)
(40.7
)
Corporate capital expenditures
(4.2
)
(2.7
)
Adjustments for unconsolidated affiliates
and noncontrolling interests
70.8
42.6
Consolidated AFFO
$
1,216.8
$
1,193.0
Adjustments for unconsolidated affiliates
and noncontrolling interests(5)
(66.2
)
(37.8
)
AFFO attributable to AMT common
stockholders
$
1,150.6
$
1,155.2
Divided by weighted average diluted shares
outstanding (in thousands)
466,979
459,819
AFFO attributable to AMT common
stockholders per Share
$
2.46
$
2.51
- Three months ended June 30, 2023 and June 30, 2022 include
impairment charges of $37.5 million and $2.5 million,
respectively.
- Three months ended June 30, 2023 includes $11.4 million of
distributions related to the outstanding mandatorily convertible
preferred equity in connection with our agreements with certain
investment vehicles affiliated with Stonepeak Partners LP.
- Three months ended June 30, 2023 and June 30, 2022 include
losses (gains) on foreign currency exchange rate fluctuations of
$107.6 million and ($394.7) million, respectively.
- Primarily includes acquisition-related costs and integration
costs.
- Includes adjustments for the impact on both Nareit FFO
attributable to American Tower Corporation common stockholders as
well as the other line items included in the calculation of
Consolidated AFFO.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20230727535871/en/
Adam Smith Senior Vice President, Investor Relations Telephone:
(617) 375-7500
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