(Source: Business Wire)
American Tower Corporation (NYSE: AMT) today reported financial
results for the third quarter ended September 30, 2009.
Jim Taiclet, American Tower's Chief Executive Officer stated, "2009 has
been a very successful year thus far for American Tower, both
operationally and financially. Our achievements to date include the
integration of over 2,650 new communications sites into our portfolio,
while maintaining our industry leading Adjusted EBITDA Margin. In
addition, the recent upgrades of our credit rating to investment grade
enabled us to issue 4.625% senior unsecured notes, by far the lowest
cost unsecured notes we have achieved to date. These trends highlight
our disciplined capital allocation process and strong balance sheet
which we believe will continue to provide a foundation for strong Core
Growth beyond 2009."
Operating Highlights
American Tower generated the following operating results for the quarter
ended September 30, 2009 (unless otherwise indicated, all comparative
information is presented against the quarter ended September 30, 2008):
Total revenues increased 8.5% to $444.1 million, and rental and
management segment revenues increased 9.2% to $430.5 million. Rental and
management segment revenue for the quarter ended September 30, 2009
includes $6.7 million of one-time revenue related to a termination
agreement with one of the Company's broadcast customers. In addition,
rental and management segment revenue growth was negatively impacted by
approximately 2.1% due to foreign currency exchange rate fluctuations
and 0.9% due to straight-line revenue recognition. Excluding the impact
of foreign currency exchange rate fluctuations, straight-line revenue
recognition and the one-time revenue item described above, our Core
Growth in rental and management segment revenue was 10.3%. Rental and
management segment Gross Margin increased 9.4% to $333.0 million.
Network development services revenue and Gross Margin were $13.6 million
and $6.1 million, respectively.
Total selling, general, administrative and development expense was $47.9
million. The Company's selling, general, administrative and development
expense for the quarter included $13.0 million of stock-based
compensation expense.
Adjusted EBITDA increased 9.6% to $304.2 million, and Adjusted EBITDA
Margin was 68%. Adjusted EBITDA growth was negatively impacted by
approximately 1.4% due to foreign currency exchange rate fluctuations
and 0.8% due to straight-line revenue and expense recognition. Excluding
the impact of foreign currency exchange rate fluctuations, straight-line
revenue recognition and the one-time revenue item described above, our
Core Growth in Adjusted EBITDA was 9.2%.
Operating income was $179.1 million and net income was $67.4 million.
Net income per basic and diluted common share was $0.17.
The Company is introducing a new performance metric, Recurring Free Cash
Flow, which it believes better measures the performance of its
underlying assets and reflects the amount that may be available for the
Company to reinvest into the business through discretionary capital
expenditures and acquisitions or return to shareholders. During the
quarter ended September 30, 2009, Recurring Free Cash Flow increased
16.3% to $206.0 million and Recurring Free Cash Flow per Share increased
18.6% to $0.51.
Investing Highlights
During the quarter ended September 30, 2009, cash provided by operating
activities of $240.1 million, less $68.6 million in capital
expenditures, resulted in Free Cash Flow of $171.5 million.
Discretionary capital expenditures of $50.5 million included $32.9
million for the construction of new communications sites and the
installation of shared back-up power generators and $17.6 million for
the purchase of land under our towers. Additionally, the Company spent
$12.0 million for capital improvements and corporate capital
expenditures and $6.0 million for the augmentation of existing sites to
accommodate new equipment. Separately, the Company spent $67.9 million
on acquisitions.
During the quarter ended September 30, 2009, the Company completed the
construction of 267 communications sites and purchased 304
communications sites, including our previously announced acquisition of
230 communications sites in Brazil. Subsequent to the end of the
quarter, the Company acquired an additional 326 communications sites in
India.
During the quarter ended September 30, 2009, the Company repurchased a
total of 3.6 million shares of its Class A common stock for
approximately $117.6 million pursuant to its stock repurchase program.
As of October 23, 2009, the Company had repurchased approximately 19.9
million shares of its Class A common stock for approximately $721.3
million under its $1.5 billion stock repurchase program announced in
March 2008, which includes approximately 20,800 shares of Class A common
stock repurchased for approximately $0.8 million subsequent to September
30, 2009. The Company will continue to manage the pacing of the program
in the future in response to general market conditions and other
relevant factors.
Please refer to Non-GAAP and Defined Financial Measures on pages 3 and 4
for definitions of Rental and Management Segment Gross Margin, Network
Development Services Segment Gross Margin, Adjusted EBITDA, Adjusted
EBITDA Margin, Recurring Free Cash Flow, Recurring Free Cash Flow per
Share, Core Growth and Free Cash Flow. For additional financial
information, including reconciliations to GAAP measures, please refer to
the supplemental schedules of selected financial information on pages 8
through 12.
Reaffirming Full Year 2009 Outlook
Based on its continued strong operating performance, the Company is
reaffirming its Full Year 2009 Outlook that was provided on July 29,
2009.
These estimates are based on a number of assumptions that management
believes to be reasonable, and reflect the Company's expectations as of
November 3, 2009. Actual results may differ materially from these
estimates as a result of various factors, and we refer you to the
cautionary language regarding "forward-looking" statements included in
this press release when considering this information.
Conference Call Information
American Tower will host a conference call today at 8:30 a.m. ET to
discuss its third quarter 2009 financial results. 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:
US/Canada dial-in: (877) 235-9047
International dial-in: (706) 645-9644
Passcode: 36210079
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A replay of the call will be available from 10:30 a.m. ET November 3,
2009 until 11:59 p.m. ET November 17, 2009. The replay dial-in numbers
are as follows:
US/Canada dial-in: (800) 642-1687
International dial-in: (706) 645-9291
Passcode: 36210079
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American Tower will also sponsor a live simulcast of the call on its
website, www.americantower.com.
When available, a replay of the call will be available on the Company's
website.
About American Tower
American Tower is a leading independent owner, operator and developer of
broadcast and wireless communications sites. American Tower currently
owns and operates approximately 26,700 communications sites in the
United States, Mexico, Brazil and India. For more information about
American Tower, please visit www.americantower.com.
Non-GAAP and Defined Financial Measures
In addition to the results prepared in accordance with generally
accepted accounting principles (GAAP) provided throughout this press
release, the Company has presented the following non-GAAP and defined
financial measures: Rental and Management Segment Gross Margin, Network
Development Services Segment Gross Margin, Adjusted EBITDA, Adjusted
EBITDA Margin, Recurring Free Cash Flow, Recurring Free Cash Flow per
Share, Core Growth and Free Cash Flow. The Company defines Rental and
Management Segment Gross Margin as operating income before depreciation,
amortization and accretion, other operating expenses, stock-based
compensation expense, corporate expenses, international business
development expenses, rental and management segment overhead, network
development services segment overhead, network development services
segment operating expenses, network development services segment
revenue, plus interest income, TV Azteca, net. The Company defines
Network Development Services Segment Gross Margin as operating income
before depreciation, amortization and accretion, other operating
expenses, stock-based compensation expense, corporate expenses,
international business development expenses, network development
services segment overhead, rental and management segment overhead,
rental and management segment operating expenses, and rental and
management segment revenue. The Company defines Adjusted EBITDA as
operating income before depreciation, amortization and accretion, other
operating expenses, and stock-based compensation expense, plus interest
income, TV Azteca, net. The Company defines Adjusted EBITDA Margin as
the percentage that results from dividing Adjusted EBITDA by total
revenue. The Company defines Recurring Free Cash Flow as Adjusted EBITDA
before straight-line revenue and expense, plus interest income, less
interest expense, cash paid for income taxes and cash payments related
to redevelopment, capital improvement and corporate capital
expenditures. The Company defines Recurring Free Cash Flow per Share as
Recurring Free Cash Flow divided by the diluted weighted average common
shares outstanding. The Company defines Core Growth in rental and
management segment revenue and Adjusted EBITDA as the increase or
decrease, expressed as a percentage, resulting from a comparison of
financial results for a current period with corresponding financial
results for the corresponding period in a prior year, in each case,
excluding the impact of straight-line revenue and expense recognition,
foreign currency fluctuations, and material one-time items. The Company
defines Free Cash Flow as cash provided by operating activities less
payments for purchase of property and equipment and construction
activities. 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. The Company believes that these measures can
assist in comparing company performances on a consistent basis
irrespective of depreciation and amortization or capital structure.
Depreciation and amortization can vary significantly among companies
depending on accounting methods, particularly where acquisitions or
non-operating factors, including historical cost bases, are involved.
Notwithstanding the foregoing, the Company's measures of Rental and
Management Segment Gross Margin, Network Development Services Segment
Gross Margin, Adjusted EBITDA, Adjusted EBITDA Margin, Recurring Free
Cash Flow, Recurring Free Cash Flow per Share, Core Growth and Free Cash
Flow may not be comparable to similarly titled measures used by other
companies.
Cautionary Language Regarding Forward-Looking Statements
This press release contains "forward-looking statements" concerning the
Company's 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 2009 outlook, our stock repurchase programs, the financial
strength of certain of our customers and foreign currency exchange
rates. Actual results may differ materially from those indicated in our
forward-looking statements as a result of various important factors,
including: (1) decrease in demand for our communications sites would
materially and adversely affect our operating results and we cannot
control that demand; (2) if our wireless service provider customers
consolidate or merge with each other to a significant degree, our
growth, revenue and ability to generate positive cash flows could be
adversely affected; (3) substantial leverage and debt service
obligations may adversely affect us; (4) restrictive covenants in the
loan agreement for the revolving credit facility and term loan, the
indentures governing our debt securities, and the loan agreement related
to our securitization transaction could adversely affect our business by
limiting flexibility; (5) we could suffer adverse tax and other
financial consequences if taxing authorities do not agree with our tax
positions, or we are unable to utilize our net operating losses; (6) due
to the long-term expectations of revenue from tenant leases, the tower
industry is sensitive to the creditworthiness and financial strength of
its tenants; (7) our foreign operations are subject to economic,
political, and other risks that could adversely affect our revenues or
financial position, including risks associated with foreign currency
exchange rates; (8) a substantial portion of our revenue is derived from
a small number of customers; (9) we anticipate that we may need
additional financing to fund our stock repurchase programs, to refinance
our existing indebtedness and to fund future growth and expansion
initiatives; (10) new technologies could make our tower leasing business
less desirable to potential tenants and result in decreasing revenues;
(11) we could have liability under environmental laws; (12) our business
is subject to government regulations and changes in current or future
laws or regulations could restrict our ability to operate our business
as we currently do; (13) increasing competition in the tower industry
may create pricing pressures that may adversely affect us; (14) if we
are unable to protect our rights to the land under our towers, it could
adversely affect our business and operating results; (15) 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 such towers would be eliminated;
(16) our towers may be affected by natural disasters and other
unforeseen damage for which our insurance may not provide adequate
coverage; (17) our costs could increase and our revenues could decrease
due to perceived health risks from radio emissions, especially if these
perceived risks are substantiated; and (18) our historical stock option
granting practices are subject to ongoing governmental proceedings,
which could result in fines, penalties or other liability. For other
important factors that may cause actual results to differ materially
from those indicated in our forward-looking statements, we refer you to
the information contained in Item 1A of our Form 10-Q for the quarter
ended June 30, 2009 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 CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands)
September 30, 2009 December 31, 2008
ASSETS
Current assets:
Cash and cash equivalents $ 229,674 $ 143,077
Restricted cash 50,795 51,866
Short-term investments and available-for-sale securities 3,844 2,028
Accounts receivable, net of allowances 71,271 51,313
Prepaid and other current assets 78,723 61,415
Deferred income taxes 191,623 163,981
Total current assets 625,930 473,680
Property and equipment, net 3,128,120 3,022,636
Goodwill 2,239,420 2,186,233
Other intangible assets, net 1,532,400 1,566,155
Deferred income taxes 225,728 381,428
Notes receivable and other long-term assets 643,226 581,533
Total $ 8,394,824 $ 8,211,665
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable and accrued expenses $ 165,957 $ 151,985
Accrued interest 47,270 28,635
Current portion of long-term obligations 7,717 1,837
Unearned revenue 120,057 120,188
Total current liabilities 341,001 302,645
Long-term obligations 4,179,038 4,331,309
Other long-term liabilities 639,634 583,232
Total liabilities 5,159,673 5,217,186
STOCKHOLDERS' EQUITY
Class A Common Stock 4,785 4,685
Additional paid-in capital 8,352,944 8,109,224
Accumulated deficit (2,173,882 ) (2,356,127 )
Accumulated other comprehensive loss (18,420 ) (20,031 )
Treasury stock (2,933,612 ) (2,746,429 )
Total American Tower Corporation stockholders' equity 3,231,815 2,991,322
Non-controlling interest 3,336 3,157
Total stockholders' equity 3,235,151 2,994,479
Total $ 8,394,824 $ 8,211,665
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UNAUDITED CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
(In thousands, except per share data)
Three Months Ended September 30, Nine Months Ended September 30,
2009 2008 2009 2008
REVENUES:
Rental and management $ 430,525 $ 394,396 $ 1,233,222 $ 1,152,722
Network development services 13,580 14,872 42,919 32,458
Total operating revenues 444,105 409,268 1,276,141 1,185,180
OPERATING EXPENSES:
Costs of operations (exclusive of items shown separately below)
Rental and management 101,128 93,696 283,549 272,579
Network development services 7,466 10,161 25,324 18,710
Depreciation, amortization and accretion 105,543 104,389 307,874 301,158
Selling, general, administrative and development expense (1) 47,865 44,719 155,357 135,412
Other operating expenses 3,026 1,936 8,228 3,308
Total operating expenses 265,028 254,901 780,332 731,167
OPERATING INCOME 179,077 154,367 495,809 454,013
OTHER INCOME (EXPENSE)
Interest income, TV Azteca, net 3,585 3,586 10,669 10,711
Interest income 736 1,017 1,717 2,959
Interest expense (64,122 ) (63,546 ) (188,345 ) (191,568 )
Loss on retirement of long-term obligations (391 ) (959 ) (6,385 ) (1,195 )
Other income (expense) 42 1,059 1,096 (1,045 )
Total other expense (60,150 ) (58,843 ) (181,248 ) (180,138 )
INCOME FROM CONTINUING OPERATIONS BEFORE INCOME TAXES, MINORITY INTEREST AND INCOME ON EQUITY METHOD INVESTMENTS 118,927 95,524 314,561 273,875
Income tax provision (51,348 ) (34,918 ) (139,883 ) (120,254 )
Income on equity method investments 3 5 20 18
INCOME FROM CONTINUING OPERATIONS 67,582 60,611 174,698 153,639
(Loss) income from discontinued operations, net (4 ) (50 ) 8,127 108,034
NET INCOME 67,578 60,561 182,825 261,673
Net income attributable to non-controlling interest (223 ) (95 ) (580 ) (266 )
NET INCOME ATTRIBUTABLE TO AMERICAN TOWER CORPORATION (AMT) $ 67,355 $ 60,466 $ 182,245 $ 261,407
NET INCOME PER COMMON SHARE AMOUNTS:
BASIC:
Income from continuing operations attributable to AMT $ 0.17 $ 0.15 $ 0.44 $ 0.39
(Loss) income from discontinued operations attributable to AMT -- -- 0.02 0.27
Net income attributable to AMT $ 0.17 $ 0.15 $ 0.46 $ 0.66
DILUTED:
Income from continuing operations attributable to AMT $ 0.17 $ 0.15 $ 0.43 $ 0.36
(Loss) income from discontinued operations attributable to AMT -- -- 0.02 0.26
Net income attributable to AMT $ 0.17 $ 0.15 $ 0.45 $ 0.62
WEIGHTED AVERAGE COMMON SHARES OUTSTANDING:
BASIC 397,315 393,567 397,305 396,187
DILUTED 405,728 416,541 408,303 421,703
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(1) Selling, general, administrative and development expense includes $12,950 and $13,249 of stock-based compensation expense for the three months ended September 30, 2009 and September 30, 2008, respectively, and $50,124 and $43,111 of stock-based compensation expense for the nine months ended September 30, 2009 and September 30, 2008, respectively.
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UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)
Nine Months Ended September 30,
2009 2008
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income $ 182,825 $ 261,673
Stock-based compensation expense 50,124 43,111
Depreciation, amortization and accretion 307,874 301,158
Deferred income taxes related to discontinued operations (3,174 ) (104,966 )
Other non-cash items reflected in statements of operations 147,146 112,033
Increase in net deferred rent asset (8,329 ) (16,651 )
Decrease (increase) in restricted cash 4,236 (1,008 )
Increase in assets (49,297 ) (15,489 )
Increase in liabilities 17,994 6,465
Cash provided by operating activities 649,399 586,326
CASH FLOWS FROM INVESTING ACTIVITIES:
Payments for purchase of property and equipment and construction activities (182,427 ) (165,194 )
Payments for acquisitions (161,175 ) (32,633 )
Proceeds from sale of available-for-sale securities and other long term assets 3,550 4,517
Deposits, restricted cash and investments (4,329 ) 1,843
Cash used for investing activities (344,381 ) (191,467 )
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from issuance of senior debt 300,000 --
Borrowings under credit facilities -- 525,000
Repayments of notes payable, credit facilities and capital leases (354,644 ) (326,929 )
Purchases of Class A common stock (189,670 ) (631,901 )
Proceeds from stock options, warrants and stock purchase plan 35,987 75,910
Deferred financing costs and other financing activities (10,128 ) (3,827 )
Cash used for financing activities (218,455 ) (361,747 )
Net effect of changes in foreign currency exchange rates on cash and cash equivalents 34 --
NET INCREASE IN CASH AND CASH EQUIVALENTS 86,597 33,112
CASH AND CASH EQUIVALENTS, BEGINNING OF YEAR 143,077 33,123
CASH AND CASH EQUIVALENTS, END OF PERIOD $ 229,674 $ 66,235
CASH PAID FOR INCOME TAXES $ 32,760 $ 27,442
CASH PAID FOR INTEREST $ 160,567 $ 168,815
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UNAUDITED SELECTED FINANCIAL INFORMATION
(In thousands, except where noted. Totals may not add due to rounding.)
SELECTED BALANCE SHEET DETAIL:
Long-term obligations summary, including current portion: September 30, 2009 September 30, 2009 As Adjusted (1)
Commercial Mortgage Pass-Through Certificates, Series 2007-1 $ 1,750,000 $ 1,750,000
Senior Unsecured Revolving Credit Facility 625,000 550,000
Senior Unsecured Term Loan 325,000 325,000
7.125% Senior Notes due 2012 500,915 --
4.625% Senior Notes due 2015 -- 599,184
7.000% Senior Notes due 2017 500,000 500,000
7.250% Senior Notes due 2019 294,947 294,947
5.000% Convertible Notes due 2010 59,683 59,683
7.250% Senior Subordinated Notes due 2011 288 288
XCEL Telecom Credit Facility (2) 71,206 71,206
Other debt, including capital leases 59,716 59,716
Total debt $ 4,186,755 $ 4,210,024
Cash and cash equivalents 229,674
Net debt (Total debt less cash and cash equivalents) $ 3,957,081
___
(1) Gives effect to the following events subsequent to the end of the third quarter: (a) the Company's use of cash on hand to repay $75.0 million under its Senior Unsecured Revolving Credit Facility on October 19, 2009; (b) the issuance of $600.0 million principal amount of 4.625% Senior Notes due 2015 at a price equal to 99.864% of face value on October 20, 2009; and (c) the call for redemption of all outstanding 7.125% Senior Notes due 2012, which is set for November 13, 2009.
(2) The Indian rupee-denominated debt was an outstanding obligation of XCEL at the time of the Company's acquisition of XCEL.
Share count rollforward: (In millions of shares)
Total shares outstanding, as of June 30, 2009 395.8
Shares repurchased A service of YellowBrix, Inc.
