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CONSOLIDATED HIGHLIGHTS First Quarter 2020
BOSTON--(BUSINESS WIRE)-- American Tower Corporation (NYSE: AMT) today reported financial results for the quarter ended March 31, 2020.
Tom Bartlett, American Tower’s Chief Executive Officer, stated, “Despite the challenges posed by the COVID-19 pandemic, we delivered a solid first quarter, including U.S. Organic Tenant Billings Growth of 5.6%, consistent international leasing activity and a 20% dividend increase. We believe that the resilience and stability of our business model, our investment-grade balance sheet, substantial liquidity and the secular global growth trends in mobile data usage will help us manage through the ongoing crisis.
As we stand together with our employees, tenants and communities, we are focused more than ever on advancing our mission of extending and enhancing the reach of mobile broadband. Connectivity is critical in challenging times like these, and we are proud to play a lead role in delivering it to billions of people around the world.”
CONSOLIDATED OPERATING RESULTS OVERVIEW American Tower generated the following operating results for the quarter ended March 31, 2020 (all comparative information is presented against the quarter ended March 31, 2019).
($ in millions, except per share amounts.) |
| Q1 2020 |
| Growth Rate | |||
Total revenue |
| $ | 1,993 |
|
| 9.9 | % |
Total property revenue |
| $ | 1,973 |
|
| 10.5 | % |
Total Tenant Billings Growth |
| $ | 151 |
|
| 10.3 | % |
Organic Tenant Billings Growth |
| $ | 79 |
|
| 5.4 | % |
Property Gross Margin |
| $ | 1,430 |
|
| 14.0 | % |
Property Gross Margin % |
| 72.5 | % |
|
| ||
Net income |
| $ | 419 |
|
| 2.7 | % |
Net income attributable to AMT common stockholders |
| $ | 415 |
|
| 4.4 | % |
Net income attributable to AMT common stockholders per diluted share |
| $ | 0.93 |
|
| 4.5 | % |
Adjusted EBITDA |
| $ | 1,271 |
|
| 14.1 | % |
Adjusted EBITDA Margin % |
| 63.8 | % |
|
| ||
|
|
|
|
| |||
Nareit Funds From Operations (FFO) attributable to AMT common stockholders |
| $ | 819 |
|
| 6.4 | % |
Consolidated AFFO |
| $ | 907 |
|
| 5.3 | % |
Consolidated AFFO per Share |
| $ | 2.03 |
|
| 4.6 | % |
AFFO attributable to AMT common stockholders |
| $ | 945 |
|
| 15.6 | % |
AFFO attributable to AMT common stockholders per Share |
| $ | 2.12 |
|
| 15.2 | % |
|
|
|
|
| |||
Cash provided by operating activities |
| $ | 800 |
|
| 1.9 | % |
Less: total cash capital expenditures(1) |
| $ | 225 |
|
| (2.4) | % |
Free Cash Flow |
| $ | 575 |
|
| 3.7 | % |
_______________
(1) | Q1 2020 cash capital expenditures include $12.7 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 March 31, 2020, the Company declared the following regular cash distributions to its common stockholders:
Common Stock Distributions |
| Q1 2020(1) | ||
Distributions per share |
| $ | 1.08 |
|
Aggregate amount (in millions) |
| $ | 479 |
|
Year-over-year per share growth |
| 20.0 | % | |
_______________
(1) | The distribution declared on March 12, 2020 was paid in the second quarter of 2020 to stockholders of record as of the close of business on April 14, 2020. |
Stock Repurchase Program – During the first quarter of 2020, the Company repurchased a total of approximately 213 thousand shares of its common stock under its stock repurchase program for approximately $45 million. Subsequent to the end of the first quarter, through April 22, 2020, the Company repurchased approximately 48 thousand additional shares of its common stock pursuant to the program, for approximately $10 million, and had approximately $2.0 billion remaining under the Company’s existing stock repurchase programs.
Capital Expenditures – During the first quarter of 2020, total capital expenditures were approximately $225 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 first quarter of 2020, the Company spent approximately $49 million to acquire 193 communications sites, primarily in international markets.
Other Events – During the first quarter of 2020, the Company completed its previously announced acquisition of MTN Group Limited’s (“MTN”) noncontrolling interests in each of the Company’s joint ventures in Ghana and Uganda for total consideration of approximately $524 million, which resulted in an increase in the Company’s controlling interest in those joint ventures from 51% to 100%. The closing of the transaction resulted in a one-time negative impact of approximately $63 million to the Company’s first quarter 2020 Consolidated AFFO from the payment of previously deferred cash interest related to joint venture debt.
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 $328 million at the March 31, 2020 exchange rate) to redeem the put shares in 2020, subject to regulatory approval. After the completion of the redemption, the Company will hold an approximately 92% ownership interest in ATC TIPL.
LEVERAGE AND FINANCING OVERVIEW
Leverage – For the quarter ended March 31, 2020, the Company’s Net Leverage Ratio was 4.6x net debt (total debt less cash and cash equivalents) to first quarter 2020 annualized Adjusted EBITDA.
Calculation of Net Leverage Ratio ($ in millions, totals may not add due to rounding) |
| As of March 31, 2020 | ||
Total debt |
| $ | 24,577 |
|
Less: Cash and cash equivalents |
| 1,326 |
| |
Net Debt |
| 23,251 |
| |
Divided By: First quarter annualized Adjusted EBITDA(1) |
| 5,084 |
| |
Net Leverage Ratio |
| 4.6 | x | |
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(1) | Q1 2020 Adjusted EBITDA multiplied by four. |
Liquidity – As of March 31, 2020, the Company had $4.2 billion of total liquidity, consisting of $1.3 billion in cash and cash equivalents plus the ability to borrow an aggregate of $2.9 billion under its revolving credit facilities, net of any outstanding letters of credit.
On January 10, 2020, the Company issued $750.0 million aggregate principal amount of 2.400% senior unsecured notes due 2025 and $750.0 million aggregate principal amount of 2.900% senior unsecured notes due 2030. The Company used the net proceeds to repay existing indebtedness under its $2.25 billion senior unsecured revolving credit facility, as amended and restated in December 2019 (the “2019 Credit Facility”).
On January 15, 2020, the Company completed the redemption of all of its outstanding 5.900% senior unsecured notes due 2021 for a total aggregate redemption price of $539.6 million, including $6.1 million in accrued and unpaid interest. Upon completion of the redemption, none of the 5.900% notes remained outstanding.
On February 13, 2020, the Company entered into a loan agreement for a new $750.0 million unsecured term loan due February 12, 2021. The Company used the net proceeds of this new term loan, together with borrowings under the 2019 Credit Facility and cash on hand, to repay outstanding indebtedness under its $1.3 billion unsecured term loan entered into on February 14, 2019.
Subsequent to the end of the first quarter, on April 3, 2020, the Company entered into a $1.14 billion unsecured term loan due April 2, 2021, which was subsequently increased to $1.19 billion effective April 21, 2020 (the “April 2020 Term Loan”), the net proceeds of which were used to repay outstanding indebtedness under the 2019 Credit Facility. Pro forma for the April 2020 Term Loan, the Company had $5.4 billion of total liquidity.
Additionally, on April 9, 2020, the Company announced the planned redemption of all of its outstanding 2.800% senior unsecured notes due 2020 for a price equal to the principal amount of the 2.800% Notes, together with accrued interest, if any, up to, but excluding, the redemption date, which has been set for May 11, 2020. The Company intends to fund the redemption with borrowings under the 2019 Credit Facility and cash on hand.
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 April 29, 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 April 29, 2020, based on currently available information and outside of the foreign currency translation effects outlined below, 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 three months ended March 31, 2020 (the “Q1 Quarterly Report”).
The Company’s outlook is based on the following average foreign currency exchange rates to 1.00 U.S. Dollar for April 29, 2020 through December 31, 2020: (a) 75.60 Argentinean Pesos; (b) 5.25 Brazilian Reais; (c) 855 Chilean Pesos; (d) 3,990 Colombian Pesos; (e) 0.92 Euros; (f) 5.75 Ghanaian Cedis; (g) 76.50 Indian Rupees; (h) 106 Kenyan Shillings; (i) 24.20 Mexican Pesos; (j) 390 Nigerian Naira; (k) 6,710 Paraguayan Guarani; (l) 3.45 Peruvian Soles; (m) 18.65 South African Rand; (n) 3,850 Ugandan Shillings; and (o) 600 West African CFA Francs.
The Company’s outlook reflects estimated unfavorable impacts of foreign currency exchange rate fluctuations to property revenue, Adjusted EBITDA and Consolidated AFFO of approximately $300 million, $165 million and $140 million, respectively, as compared to the Company’s prior 2020 outlook. 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.
Primarily as a result of these unfavorable impacts, the Company is reducing the midpoint of its full year 2020 outlook for property revenue, net income, Adjusted EBITDA and Consolidated AFFO by $300 million, $160 million, $165 million and $140 million, respectively. The ongoing impacts of COVID-19 on global capital markets have contributed to the volatility in foreign currency exchange rates since the issuance of the Company’s prior 2020 outlook.
Additional information pertaining to the impact of foreign currency and London Interbank Offered Rate (“LIBOR”) fluctuations on the Company’s outlook has been provided in the supplemental disclosure package available on the Company’s website.
2020 Outlook ($ in millions) | Full Year 2020 |
| Midpoint Growth Rates vs. Prior Year | ||||||
Total property revenue(1) | $ | 7,675 |
| to | $ | 7,825 |
|
| 3.8% |
Net income | 1,790 |
| to | 1,890 |
|
| (4.0)% | ||
Adjusted EBITDA | 4,920 |
| to | 5,020 |
|
| 4.8% | ||
Consolidated AFFO | 3,600 |
| to | 3,700 |
|
| 3.7% | ||
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(1) | Includes U.S. property revenue of $4,385 million to $4,445 million and international property revenue of $3,290 million to $3,380 million, reflecting midpoint growth rates of 5.4% and 1.8%, respectively. The U.S. growth rate includes an estimated positive impact of nearly 1% associated with an increase in non-cash straight-line revenue recognition. The international growth rate includes an estimated negative impact of approximately 9% from the translational effects of foreign currency exchange rate fluctuations. International property revenue reflects the Company’s Latin America, Africa, Europe and Asia segments. |
2020 Outlook for Total Property revenue, at the midpoint, includes the following components(1): ($ in millions, totals may not add due to rounding.) | U.S. Property |
| International Property(2) |
| Total Property |
| ||||
International pass-through revenue | N/A |
|
| $ | 1,006 |
|
| $ | 1,006 |
|
Straight-line revenue | 185 |
|
| 28 |
|
| 213 |
| ||
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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 | ~5% |
| ~5% |
| ~5% |
New Site Tenant Billings |
