CONSOLIDATED HIGHLIGHTS
First Quarter 2022
Total revenue increased 23.2% to $2,660 million
Property revenue increased 22.1% to $2,601 million
Net income increased 7.7% to $703 million
Adjusted EBITDA increased 12.8% to $1,624 million
Consolidated AFFO increased 7.0% to $1,202 million
Net income attributable to AMT common stockholders increased 10.3% to $712 million
AFFO attributable to AMT common stockholders increased 6.1% to $1,167 million
BOSTON–(BUSINESS WIRE)–American Tower Corporation (NYSE: AMT) today reported financial results for the quarter ended March 31, 2022.
Tom Bartlett, American Tower’s Chief Executive Officer, stated, “We’re off to a strong start in 2022 with Organic Tenant Billings Growth accelerating sequentially in each of our reported segments. 5G is ramping up in the U.S. and Europe today, while 4G coverage and densification initiatives continue to grow in earlier stage markets, and it is clear to us that macro towers will continue to be critical infrastructure for carrier network investments over the next decade and beyond. We believe our global footprint of distributed communications real estate is well-positioned to capture the benefits of the emerging technological trends, ultimately driving what we hope to be a prolonged period of solid global growth and attractive returns for our shareholders.”
CONSOLIDATED OPERATING RESULTS OVERVIEW
American Tower generated the following operating results for the quarter ended March 31, 2022 (all comparative information is presented against the quarter ended March 31, 2021).
($ in millions, except per share amounts.)
Q1 2022
Growth Rate
Total revenue
$
2,660
23.2
%
Total property revenue
$
2,601
22.1
%
Total Tenant Billings Growth
$
173
10.3
%
Organic Tenant Billings Growth
$
50
3.0
%
Property Gross Margin
$
1,829
16.8
%
Property Gross Margin %
70.3
%
Net income(1)
$
703
7.7
%
Net income attributable to AMT common stockholders(1)
$
712
10.3
%
Net income attributable to AMT common stockholders per diluted share(1)
$
1.56
7.6
%
Adjusted EBITDA
$
1,624
12.8
%
Adjusted EBITDA Margin %
61.0
%
Nareit Funds From Operations (FFO) attributable to AMT common stockholders
$
1,400
26.7
%
Consolidated AFFO
$
1,202
7.0
%
Consolidated AFFO per Share
$
2.63
4.4
%
AFFO attributable to AMT common stockholders
$
1,167
6.1
%
AFFO attributable to AMT common stockholders per Share
$
2.55
3.7
%
Cash provided by operating activities(2)
$
664
(39.3
) %
Less: total cash capital expenditures(3)
$
395
17.9
%
Free Cash Flow(2)
$
269
(64.5
) %
____________
(1)
Q1 2022 growth rates positively impacted by approximately $242.1 million of foreign currency gains in the current period as compared to foreign currency gains of approximately $94.7 million in the prior-year period.
(2)
Growth rates negatively impacted by a non-recurring advance payment received from a customer in Q3 2021 for payments due through Q4 2022. Cash from operations through the end of 2022 is expected to be proportionately negatively impacted as a result of this advance payment.
(3)
Q1 2022 cash capital expenditures include $11.5 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, 2022, the Company declared the following regular cash distributions to its common stockholders:
Common Stock Distributions
Q1 2022(1)
Distributions per share
$
1.40
Aggregate amount (in millions)
$
639
Year-over-year per share growth
12.9
%
_______________
(1)
The distribution declared on March 10, 2022, will be paid in the second quarter of 2022 to stockholders of record as of the close of business on April 13, 2022.
Capital Expenditures – During the first quarter of 2022, total capital expenditures were approximately $395 million, of which $29 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 2022, the Company spent approximately $129 million on acquisitions, of which approximately $30 million was paid to acquire 27 communications sites, as well as other communications infrastructure assets, in the United States, Canada and Nigeria. The remaining balance of approximately $99 million represents cash paid associated with sites that were acquired in 2021.
LEVERAGE AND FINANCING OVERVIEW
Leverage – For the quarter ended March 31, 2022, the Company’s Net Leverage Ratio was 6.4x net debt (total debt less cash and cash equivalents) to first quarter 2022 annualized Adjusted EBITDA.
Calculation of Net Leverage Ratio
($ in millions, totals may not add due to rounding)
As of March 31, 2022
Total debt
$
43,464
Less: Cash and cash equivalents
1,942
Net Debt
$
41,523
Divided By: First quarter annualized Adjusted EBITDA(1)
6,495
Net Leverage Ratio
6.4x
_______________
(1)
Q1 2022 Adjusted EBITDA multiplied by four.
Liquidity and Financing Activities – As of March 31, 2022, the Company had approximately $4.2 billion of total liquidity, consisting of approximately $1.9 billion in cash and cash equivalents plus the ability to borrow an aggregate of approximately $2.2 billion under its revolving credit facilities, net of any outstanding letters of credit.
On January 7, 2022, the Company repaid all outstanding amounts, plus accrued and unpaid interest for the remaining debt assumed in connection with the acquisition of CoreSite Realty Corporation (“CoreSite,” and the acquisition, the “CoreSite Acquisition”) for an aggregate redemption price of approximately $962.9 million, including $80.1 million of prepayment consideration and $7.8 million in accrued and unpaid interest. The repayment of CoreSite’s debt was funded with borrowings under the Company’s $6.0 billion senior unsecured multicurrency revolving credit facility and cash on hand.
On January 14, 2022, the Company repaid all of its outstanding 2.250% senior unsecured notes due 2022 for an aggregate principal amount of $600.0 million using borrowings from the Company’s $4.0 billion senior unsecured credit facility.
Subsequent to the end of the first quarter, the Company issued an aggregate of $1.3 billion in senior unsecured notes. The net proceeds were used to repay existing indebtedness under its senior unsecured revolving credit facilities and its $3.0 billion 364-day delayed draw term loan.
FULL YEAR 2022 OUTLOOK
The following full year 2022 estimates are based on a number of assumptions that management believes to be reasonable and reflect the Company’s expectations as of April 27, 2022. 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 27, 2022, based on currently available information, the Company does not anticipate significant impacts to its underlying operating results in 2022 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 is provided in our Form 10-K for the twelve months ended December 31, 2021.
The Company’s outlook is based on the following average foreign currency exchange rates to 1.00 U.S. Dollar for April 27, 2022 through December 31, 2022: (a) 136 Argentinean Pesos; (b) 1.35 Australian Dollars; (c) 87.60 Bangladeshi Taka; (d) 5.25 Brazilian Reais; (e) 1.26 Canadian Dollars; (f) 800 Chilean Pesos; (g) 3,870 Colombian Pesos; (h) 0.91 Euros; (i) 7.40 Ghanaian Cedis; (j) 76.30 Indian Rupees; (k) 115 Kenyan Shillings; (l) 20.50 Mexican Pesos; (m) 415 Nigerian Naira; (n) 7,010 Paraguayan Guarani; (o) 3.85 Peruvian Soles; (p) 52.30 Philippine Pesos; (q) 4.25 Polish Zloty; (r) 15.15 South African Rand; (s) 3,590 Ugandan Shillings; and (t) 610 West African CFA Francs.
The Company’s outlook reflects estimated favorable impacts of foreign currency exchange rate fluctuations to property revenue, Adjusted EBITDA and Consolidated AFFO of approximately $2 million, $10 million and $10 million, respectively, relative to the Company’s prior 2022 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 midpoint of its full year 2022 outlook for property revenue, net income attributable to AMT common stockholders, Adjusted EBITDA, Consolidated AFFO and AFFO attributable to AMT common stockholders by $75 million, $3 million, $55 million, $5 million and $10 million, respectively.
Additional information pertaining to the impact of foreign currency and London Interbank Offered Rate (“LIBOR”) fluctuations on the Company’s outlook has been provided in the supplemental disclosure package available on the Company’s website.
2022 Outlook ($ in millions)
Full Year 2022
Midpoint Growth Rates
vs. Prior Year
Total property revenue(1)
$
10,295
to
$
10,475
14.0
%
Net income(2)
2,020
to
2,130
(19.2
)%
Net income attributable to AMT common stockholders(2)
2,045
to
2,155
(18.2
)%
Adjusted EBITDA
6,555
to
6,665
10.5
%
Consolidated AFFO
4,705
to
4,815
8.8
%
AFFO attributable to AMT common stockholders
4,545
to
4,655
7.6
%
_______________
(1)
Includes U.S. & Canada segment property revenue of $4,900 million to $4,960 million, international property revenue of $4,655 million to $4,755 million and Data Centers segment property revenue of $740 million to $760 million, reflecting midpoint growth rates of 0.2%, 12.9%, and 3,130.4%, respectively. The U.S. & Canada growth rate includes an estimated negative impact of nearly 1% 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 property revenue reflects revenue from the Company’s recently acquired CoreSite data center assets, along with revenue from its legacy owned data center facilities.
(2)
Midpoint growth rates vs. prior year for net income and net income attributable to AMT common stockholders are negatively impacted by the foreign currency gain of $558 million in 2021.
2022 Outlook for Total Property revenue, at the midpoint, includes the following components(1):
($ 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
$ 1,508
N/A
$ 1,508
Straight-line revenue
401
25
19
445
_______________
(1)
For additional discussion regarding these components, please refer to “Revenue Components” below.
(2)
U.S. & Canada property revenue includes revenue from all assets in the United States and Canada, other than data center facilities and related assets.
(3)
International property revenue reflects the Company’s Africa, Asia-Pacific, Europe and Latin America segments.
(4)
Data Centers property revenue reflects revenue from the Company’s recently acquired CoreSite data center assets, along with revenue from its legacy owned data center facilities.
2022 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
~1%
~6%
~3%
New Site Tenant Billings
>0%
~10%
~3-4%
Total Tenant Billings Growth
>1%
~16%
~6-7%
_______________
(1)
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.
(2)
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 2022
Discretionary capital projects(1)
$
820
to
$
850
Ground lease purchases
230
to
250
Start-up capital projects
280
to
300
Redevelopment
500
to
520
Capital improvement
165
to
175
Corporate
5
—
5
Total
$
2,000
to
$
2,100
_______________
(1)
Includes the construction of 6,000 to 7,000 communications sites globally.
Reconciliation of Outlook for Adjusted EBITDA to Net income:
($ in millions, totals may not add due to rounding.)
Full Year 2022
Net income
$
2,020
to
$
2,130
Interest expense
1,105
to
1,085
Depreciation, amortization and accretion
3,248
to
3,268
Income tax provision
170
to
180
Stock-based compensation expense
170
—
170
Other, including other operating expenses, interest income, gain (loss) on retirement of long-term obligations and other income (expense)
(158
)
to
(168
)
Adjusted EBITDA
$
6,555
to
$
6,665
Reconciliation of Outlook for Consolidated AFFO and AFFO attributable to AMT common stockholders to Net income:
($ in millions, totals may not add due to rounding.)
Full Year 2022
Net income
$
2,020
to
$
2,130
Straight-line revenue
(445
)
—
(445
)
Straight-line expense
46
—
46
Depreciation, amortization and accretion
3,248
to
3,268
Stock-based compensation expense
170
—
170
Deferred portion of income tax
(101
)
—
(101
)
Other, including other operating expense, amortization of deferred financing costs, capitalized interest, 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
(63
)
to
(73
)
Capital improvement capital expenditures
(165
)
to
(175
)
Corporate capital expenditures
(5
)
—
(5
)
Consolidated AFFO
$
4,705
to
$
4,815
Minority interest
$
(160
)
—
$
(160
)
AFFO attributable to AMT common stockholders
$
4,545
to
$
4,655
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 March 31, 2022 and its updated outlook for 2022. 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: (877) 692-8955
International dial-in: (234) 720-6979
Passcode: 4902790
When available, a replay of the call can be accessed until 11:59 p.m. ET on May 11, 2022. The replay dial-in numbers are as follows:
U.S./Canada dial-in: (866) 207-1041
International dial-in: (402) 970-0847
Passcode: 7543388
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 approximately 221,000 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, Consolidated AFFO per Share, 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.
Contacts
Adam Smith
Senior Vice President, Investor Relations
Telephone: (617) 375-7500
