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CONSOLIDATED HIGHLIGHTS Second Quarter 2020
BOSTON--(BUSINESS WIRE)-- American Tower Corporation (NYSE: AMT) today reported financial results for the quarter ended June 30, 2020.
Tom Bartlett, American Tower’s Chief Executive Officer, stated, “Our global business delivered solid underlying results in the second quarter despite the ongoing challenges presented by the COVID-19 pandemic as we focused on helping our tenants preserve and enhance essential connectivity for their customers. As a result, our dividend increased by nearly 20% and we were able to further strengthen our investment-grade balance sheet while constructing more than 500 towers across our international markets.
We believe our existing diverse global portfolio, substantial liquidity and proven capital allocation strategy position us well to drive recurring, long-term growth and increasing return on invested capital as we execute our vision of making wireless communication possible everywhere.”
CONSOLIDATED OPERATING RESULTS OVERVIEW
American Tower generated the following operating results for the quarter ended June 30, 2020 (all comparative information is presented against the quarter ended June 30, 2019).
($ in millions, except per share amounts.) |
| Q2 2020 |
| Growth Rate | |||
Total revenue......................................................................................................................... |
| $ | 1,913 |
|
| 1.2 | % |
Total property revenue......................................................................................................................... |
| $ | 1,893 |
|
| 2.4 | % |
Total Tenant Billings Growth......................................................................................................................... |
| $ | 146 |
|
| 9.9 | % |
Organic Tenant Billings Growth......................................................................................................................... |
| $ | 73 |
|
| 5.0 | % |
Property Gross Margin......................................................................................................................... |
| $ | 1,363 |
|
| 4.9 | % |
Property Gross Margin %......................................................................................................................... |
| 72.0 | % |
|
| ||
Net income......................................................................................................................... |
| $ | 448 |
|
| 3.2 | % |
Net income attributable to AMT common stockholders......................................................................................................................... |
| $ | 446 |
|
| 4.0 | % |
Net income attributable to AMT common stockholders per diluted share......................................................................................................................... |
| $ | 1.00 |
|
| 4.2 | % |
Adjusted EBITDA......................................................................................................................... |
| $ | 1,212 |
|
| 2.4 | % |
Adjusted EBITDA Margin %......................................................................................................................... |
| 63.3 | % |
|
| ||
|
|
|
|
| |||
Nareit Funds From Operations (FFO) attributable to AMT common stockholders......................................................................................................................... |
| $ | 863 |
|
| 4.1 | % |
Consolidated AFFO......................................................................................................................... |
| $ | 924 |
|
| 1.6 | % |
Consolidated AFFO per Share......................................................................................................................... |
| $ | 2.07 |
|
| 1.5 | % |
AFFO attributable to AMT common stockholders......................................................................................................................... |
| $ | 898 |
|
| 0.5 | % |
AFFO attributable to AMT common stockholders per Share......................................................................................................................... |
| $ | 2.01 |
|
| 0.0 | % |
|
|
|
|
| |||
Cash provided by operating activities......................................................................................................................... |
| $ | 989 |
|
| (4.6) | % |
Less: total cash capital expenditures(1) |
| $ | 221 |
|
| (10.6) | % |
Free Cash Flow......................................................................................................................... |
| $ | 768 |
|
| (2.7) | % |
_______________
(1) | Q2 2020 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, 2020, the Company declared the following regular cash distributions to its common stockholders:
Common Stock Distributions |
| Q2 2020(1) | ||
Distributions per share......................................................................................................................................... |
| $ | 1.10 |
|
Aggregate amount (in millions)......................................................................................................................................... |
| $ | 488 |
|
Year-over-year per share growth......................................................................................................................................... |
| 19.6 | % | |
_______________
(1) | The distribution declared on May 19, 2020 was paid in the third quarter of 2020 to stockholders of record as of the close of business on June 19, 2020. |
Stock Repurchase Program – During the second quarter of 2020, the Company repurchased a total of approximately 51 thousand shares of its common stock under its stock repurchase program for approximately $11 million. As of June 30, 2020, the Company had approximately $2.0 billion remaining under its existing stock repurchase programs.
Capital Expenditures – During the second quarter of 2020, total capital expenditures were approximately $221 million, of which $32 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 2020, the Company spent approximately $128 million to acquire 350 communications sites, primarily in international markets, including 19 communications sites in the Company’s 20th market, Poland. In addition, the Company spent approximately $55 million to purchase 102 towers under its previously disclosed sublease agreement with AT&T.
Other Events – In April 2019, Tata Teleservices Limited served notice of exercise of its put options with respect to 100% of its remaining combined holdings with Tata Sons in ATC Telecom Infrastructure Private Limited (“ATC TIPL”). The Company expects to pay INR 24.8 billion (approximately $329 million at the June 30, 2020 exchange rate) to redeem the put shares in 2020, subject to regulatory approval. After the completion of the redemption, the Company will hold an approximately 92% ownership interest in ATC TIPL.
LEVERAGE AND FINANCING OVERVIEW
Leverage – For the quarter ended June 30, 2020, the Company’s Net Leverage Ratio was 4.8x net debt (total debt less cash and cash equivalents) to second quarter 2020 annualized Adjusted EBITDA.
Calculation of Net Leverage Ratio ($ in millions, totals may not add due to rounding) |
| As of June 30, 2020 | ||
Total debt..................................................................................................................... |
| $ | 25,215 | |
Less: Cash and cash equivalents..................................................................................................................... |
| 2,038 | ||
Net Debt..................................................................................................................... |
| 23,177 | ||
Divided By: Second quarter annualized Adjusted EBITDA(1) |
| 4,846 | ||
Net Leverage Ratio..................................................................................................................... |
| 4.8x | ||
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(1) | Q2 2020 Adjusted EBITDA multiplied by four. |
Liquidity and Financing Activities – As of June 30, 2020, the Company had nearly $6.5 billion of total liquidity, consisting of $2.0 billion in cash and cash equivalents plus the ability to borrow an aggregate of approximately $4.5 billion under its revolving credit facilities, net of any outstanding letters of credit.
During the second quarter of 2020, the Company increased the commitments under each of its 2019 multicurrency credit facility and 2019 credit facility by $100.0 million to $3.1 billion and $2.35 billion, respectively.
Additionally, including activity subsequent to the end of the second quarter, the Company redeemed or repaid a total of $2.5 billion in senior unsecured and secured debt, issued a total of $2.0 billion in new senior unsecured notes and entered into a $1.14 billion unsecured term loan, which was subsequently increased to $1.19 billion. Pro forma for this activity, the Company’s total liquidity was approximately $5.1 billion.
FULL YEAR 2020 OUTLOOK
The following full year 2020 financial and operational estimates are based on a number of assumptions that management believes to be reasonable and reflect the Company’s expectations as of July 30, 2020. 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.
As of July 30, 2020, based on currently available information and outside of foreign currency translation effects, the Company does not anticipate significant impacts to its underlying operating results in 2020 as a result of the coronavirus (“COVID-19”) pandemic. This is subject to change depending on future developments, which are highly uncertain and cannot be predicted at this time. Additional information pertaining to the impact of COVID-19 on the Company will be provided in our upcoming Form 10-Q for the six months ended June 30, 2020.
The Company’s outlook is based on the following average foreign currency exchange rates to 1.00 U.S. Dollar for July 30, 2020 through December 31, 2020: (a) 84.30 Argentinean Pesos; (b) 5.30 Brazilian Reais; (c) 800 Chilean Pesos; (d) 3,800 Colombian Pesos; (e) 0.89 Euros; (f) 5.80 Ghanaian Cedis; (g) 75.60 Indian Rupees; (h) 108 Kenyan Shillings; (i) 22.60 Mexican Pesos; (j) 390 Nigerian Naira; (k) 6,770 Paraguayan Guarani; (l) 3.50 Peruvian Soles; (m) 4.00 Polish Zloty; (n) 17.45 South African Rand; (o) 3,770 Ugandan Shillings; and (p) 600 West African CFA Francs.
The Company is lowering the midpoint of its full year 2020 outlook for property revenue, net income and Adjusted EBITDA by $30 million, $50 million and $40 million, respectively, while raising the midpoint of its outlook for Consolidated AFFO by $20 million.
The Company’s outlook reflects estimated favorable impacts of foreign currency exchange rate fluctuations to property revenue, Adjusted EBITDA and Consolidated AFFO of approximately $45 million, $20 million and $20 million, respectively, as compared to the Company’s prior 2020 outlook. This is expected to be offset by approximately $15 million in lower straight-line revenue in the U.S., approximately $50 million in lower currency-neutral pass-through revenue in international markets and approximately $75 million in additional bad debt expense, primarily in India, for the full year. The impact of foreign currency exchange rate fluctuations on net income is not provided, as the impact on all components of the net income measure cannot be calculated without unreasonable effort.
Additional information pertaining to the impact of foreign currency and London Interbank Offered Rate (“LIBOR”) fluctuations on the Company’s outlook has been provided in the supplemental disclosure package available on the Company’s website.
2020 Outlook ($ in millions) | Full Year 2020 |
| Midpoint Growth Rates vs. Prior Year | |||||||
Total property revenue(1) | $ | 7,655 |
| to | $ | 7,785 |
|
| 3.4 | % |
Net income................................................................................................... | 1,750 |
| to | 1,830 |
|
| (6.6 | )% | ||
Adjusted EBITDA................................................................................................... | 4,890 |
| to | 4,970 |
|
| 3.9 | % | ||
Consolidated AFFO................................................................................................... | 3,630 |
| to | 3,710 |
|
| 4.2 | % | ||
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(1)
| Includes U.S. property revenue of $4,350 million to $4,410 million and international property revenue of $3,305 million to $3,375 million, reflecting midpoint growth rates of 4.6% and 1.9%, respectively. The U.S. growth rate includes an estimated positive impact of less than 1% associated with an increase in non-cash straight-line revenue recognition. The international growth rate includes an estimated negative impact of approximately 8% from the translational effects of foreign currency exchange rate fluctuations. International property revenue reflects the Company’s Latin America, Africa, Europe and Asia segments. |
2020 Outlook for Total Property revenue, at the midpoint, includes the following components(1): ($ in millions, totals may not add due to rounding.) | U.S. Property |
| International Property(2) |
| Total Property | |||||
International pass-through revenue................................................................................................................... | N/A |
| $ | 969 |
|
| $ | 969 |
| |
Straight-line revenue................................................................................................................... | 170 |
|
| 29 |
|
| 199 |
| ||
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(1) | For additional discussion regarding these components, please refer to “Revenue Components” below. | |
(2) | International property revenue reflects the Company’s Latin America, Africa, Europe and Asia segments. |
2020 Outlook for Total Tenant Billings Growth, at the midpoint, includes the following components(1): (Totals may not add due to rounding.) | U.S. Property |
| International Property(2) |
| Total Property |
Organic Tenant Billings..................................................................................................................... | ~4.5% |
| ~5% |
| ~4.5-5% |
New Site Tenant Billings..................................................................................................................... |
