CONSOLIDATED HIGHLIGHTS
First Quarter 2023
Total revenue increased 4.0% to $2,767 million
Property revenue increased 4.4% to $2,715 million
Net income decreased 55.2% to $315 million(1)(2)
Adjusted EBITDA increased 8.6% to $1,763 million
Net income attributable to AMT common stockholders decreased 52.8% to $336 million(1)(2)
AFFO attributable to AMT common stockholders increased 1.5% to $1,185 million
BOSTON–(BUSINESS WIRE)–American Tower Corporation (NYSE: AMT) today reported financial results for the quarter ended March 31, 2023.
Tom Bartlett, American Tower’s Chief Executive Officer, stated, “We’re off to a strong start in 2023. In Q1, we saw an acceleration in Organic Tenant Billings Growth, another record quarter of signed new business at CoreSite and our 11th consecutive quarter of delivering over 1,000 built sites, all of which demonstrates resilient demand across our portfolio of distributed real estate assets as carriers continue to invest in their 4G and 5G networks.
We remain focused on disciplined capital allocation, strengthening our investment grade balance sheet and maximizing returns on our top-line growth through prudent cost controls that will drive meaningful margin expansion. Together with our dividend, which we grew approximately 11% year over year in Q1, we believe this approach positions us to maximize growth and total shareholder returns for years to come.”
CONSOLIDATED OPERATING RESULTS OVERVIEW
American Tower generated the following operating results for the quarter ended March 31, 2023 (all comparative information is presented against the quarter ended March 31, 2022).
($ in millions, except per share amounts.)
Q1 2023
Growth Rate
Total revenue
$
2,767
4.0
%
Total property revenue
$
2,715
4.4
%
Total Tenant Billings Growth
$
134
7.3
%
Organic Tenant Billings Growth
$
117
6.4
%
Property Gross Margin
$
1,928
5.4
%
Property Gross Margin %
71.0
%
Net income(1)(2)
$
315
(55.2
) %
Net income attributable to AMT common stockholders(1)(2)
$
336
(52.8
) %
Net income attributable to AMT common stockholders per diluted share(1)(2)
$
0.72
(53.8
) %
Adjusted EBITDA
$
1,763
8.6
%
Adjusted EBITDA Margin %
63.7
%
Nareit Funds From Operations (FFO) attributable to AMT common stockholders(1)
$
1,083
(22.7
) %
AFFO attributable to AMT common stockholders
$
1,185
1.5
%
AFFO attributable to AMT common stockholders per Share
$
2.54
(0.4
) %
Cash provided by operating activities
$
1,071
61.3
%
Less: total cash capital expenditures(3)
$
473
19.9
%
Free Cash Flow
$
598
122.0
%
_______________
(1)
Q1 2023 growth rates impacted by foreign currency losses of approximately $84.1 million in the current period as compared to foreign currency gains of approximately $242.1 million in the prior-year period.
(2)
Q1 2023 growth rates impacted by the Company’s sale of one of its subsidiaries in Mexico that held fiber assets (“Mexico Fiber”), which resulted in a loss of approximately $80.0 million.
(3)
Q1 2023 cash capital expenditures include $13.8 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, 2023, the Company declared the following regular cash distributions to its common stockholders:
Common Stock Distributions
Q1 2023(1)
Distributions per share
$ 1.56
Aggregate amount (in millions)
$ 727
Year-over-year per share growth
11.4
%
_______________
(1)
The distribution declared on March 8, 2023 will be paid on April 28, 2023 to stockholders of record as of the close of business on April 14, 2023.
Capital Expenditures – During the first quarter of 2023, total capital expenditures were approximately $473 million, of which $39 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 2023, the Company spent approximately $61 million on acquisitions, of which approximately
$10 million was paid to acquire 8 communications sites, as well as other communications infrastructure assets, in the United States,
Canada, Poland and Spain. The remaining balance of approximately $51 million represents cash paid associated with sites that were acquired in 2022.
Other Events – On March 29, 2023, the Company completed the sale of Mexico Fiber for total consideration of $252.5 million, resulting in a loss on the sale of $80.0 million, which was included in Other operating expenses. As a result of the transaction, the Company disposed of $20.7 million of goodwill based on the relative fair value of Mexico Fiber and the portion of the applicable goodwill reporting unit that was expected to be retained. Prior to the sale, Mexico Fiber’s operating results were included within the Latin America property segment. The sale did not qualify for presentation as a discontinued operation.
LEVERAGE AND FINANCING OVERVIEW
Leverage – For the quarter ended March 31, 2023, the Company’s Net Leverage Ratio was 5.2x net debt (total debt less cash and cash equivalents) to first quarter 2023 annualized Adjusted EBITDA.
Calculation of Net Leverage Ratio ($ in millions, totals may not add due to rounding.)
As of March 31, 2023
Total debt
$
38,542
Less: Cash and cash equivalents
1,803
Net Debt
$
36,739
Divided By: First quarter annualized Adjusted EBITDA(1)
7,051
Net Leverage Ratio
5.2x
_______________
(1)
Q1 2023 Adjusted EBITDA multiplied by four.
Liquidity and Financing Activities – As of March 31, 2023, the Company had approximately $7.7 billion of total liquidity, consisting of approximately $1.8 billion in cash and cash equivalents plus the ability to borrow an aggregate of approximately $5.9 billion under its revolving credit facilities, net of any outstanding letters of credit.
On January 31, 2023, the Company repaid $1.0 billion aggregate principal amount of its 3.50% senior unsecured notes due 2023 (the “3.50% Notes”) upon their maturity. The 3.50% Notes were repaid using borrowings under the Company’s revolving credit facility. Upon completion of the repayment, none of the 3.50% Notes remained outstanding.
On March 3, 2023, the Company issued an aggregate of $1.5 billion in senior unsecured notes. The net proceeds were used to repay existing indebtedness under its revolving credit facilities.
On March 13, 2023, the Company completed a securitization transaction (the “2023 Securitization”), in which American Tower Trust I issued $1.3 billion aggregate principal amount of Secured Tower Revenue Securities, Series 2023-1, Subclass A. For additional information regarding the 2023 Securitization, the Company refers you to information that will be provided in the “Notes to Consolidated and Condensed Consolidated Financial Statements” in the Company’s upcoming quarterly report on Form 10-Q for the three months ended March 31, 2023, under the caption “Long-Term Obligations.”
On the March 2023 repayment date, the Company repaid the entire $1.3 billion aggregate principal amount outstanding under the Company’s Secured Tower Revenue Securities, Series 2013-2A due 2023, pursuant to the terms of the agreements governing such securities. The repayment was funded with proceeds from the 2023 Securitization.
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 April 26, 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 April 26, 2023 through December 31, 2023: (a) 292 Argentinean Pesos; (b) 1.49 Australian Dollars; (c) 105.90 Bangladeshi Taka; (d) 5.20 Brazilian Reais; (e) 1.35 Canadian Dollars; (f) 830 Chilean Pesos; (g) 4,770 Colombian Pesos; (h) 0.92 Euros; (i) 11.55 Ghanaian Cedis; (j) 82.20 Indian Rupees; (k) 134 Kenyan Shillings; (l) 18.90 Mexican Pesos; (m) 1.60 New Zealand Dollars; (n) 485 Nigerian Naira; (o) 7,260 Paraguayan Guarani; (p) 3.80 Peruvian Soles; (q) 54.90 Philippine Pesos; (r) 4.35 Polish Zloty; (s) 18.20 South African Rand; (t) 3,800 Ugandan Shillings; and (u) 600 West African CFA Francs.
The Company’s outlook reflects estimated positive impacts of foreign currency exchange rate fluctuations to property revenue, Adjusted EBITDA and AFFO attributable to AMT common stockholders of approximately $25 million, $25 million and $20 million, respectively, 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 has adjusted the 2023 outlook to reflect the sale of Mexico Fiber, resulting in a reduction to property revenue, Adjusted EBITDA and AFFO attributable to AMT common stockholders of $45 million, $25 million and $15 million, respectively. The impact of the sale of Mexico Fiber on net income metrics is not provided, as the impact on all components of the net income measure cannot be calculated without unreasonable effort.
As a result of the impacts associated with the Mexico Fiber sale, partially offset by the favorable impacts of foreign currency exchange rate fluctuations, the Company is reducing the midpoint of its full year 2023 outlook for property revenue by $20 million. The midpoint for Adjusted EBITDA is unchanged from the Company’s prior outlook. The Company is reducing the midpoints for net income and net income attributable to AMT common stockholders by $130 million and $175 million, respectively, primarily due to foreign currency losses and the loss from the sale of Mexico Fiber, and raising the midpoints for AFFO attributable to AMT common stockholders and AFFO attributable to AMT common stockholders per Share by $20 million and $0.05 per Share, respectively, primarily due to the favorable impacts of foreign currency exchange rate fluctuations.
Additional information pertaining to the impact of foreign currency and London Interbank Offered Rate (“LIBOR”) fluctuations on the Company’s outlook has been provided in the supplemental disclosure package available on the Company’s website.
2023 Outlook ($ in millions, except per share amounts.)
Full Year 2023
Midpoint Growth Rates vs. Prior Year
Total property revenue(1)
$
10,665
to
$
10,845
2.7
%
Net income
1,770
to
1,880
7.6
%
Net income attributable to AMT common stockholders
1,830
to
1,940
6.7
%
Adjusted EBITDA
6,860
to
6,970
4.1
%
AFFO attributable to AMT common stockholders
4,450
to
4,560
(0.3
)%
AFFO attributable to AMT common stockholders per Share
$
9.53
to
$
9.76
(1.1
)%
_______________
(1)
Includes U.S. & Canada segment property revenue of $5,115 million to $5,175 million, international property revenue of $4,740 million to $4,840 million and Data Centers segment property revenue of $810 million to $830 million, reflecting midpoint growth rates of 2.8%, 2.0% and 7.0%, respectively. The U.S. & Canada growth rate includes an estimated negative impact of approximately 2% associated with a decrease in non-cash straight-line revenue recognition. The international growth rate includes an estimated negative impact of approximately 3% from the translational effects of foreign currency exchange rate fluctuations. International property revenue reflects the Company’s Africa, Asia-Pacific, Europe and Latin America segments. Data Centers segment property revenue reflects revenue from the Company’s data center facilities and related assets.
2023 Outlook for Total Property revenue, at the midpoint, includes the following components(1): ($ 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
$ 1,539
N/A
$ 1,539
Straight-line revenue
368
30
18
416
_______________
(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 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%
>5%
~5%
New Site Tenant Billings
~0%
~2%
~1%
Total Tenant Billings Growth
~5%
>7%
~6%
_______________
(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 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
_______________
(1)
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
$
1,770
to
$
1,880
Interest expense
1,395
to
1,375
Depreciation, amortization and accretion
3,080
to
3,100
Income tax provision
221
to
231
Stock-based compensation expense
187
—
187
Other, including other operating expenses, interest income, gain (loss) on retirement of long-term obligations and other income (expense)
207
to
197
Adjusted EBITDA
$
6,860
to
$
6,970
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
$
1,770
to
$
1,880
Straight-line revenue
(416
)
—
(416
)
Straight-line expense
38
—
38
Depreciation, amortization and accretion
3,080
to
3,100
Stock-based compensation expense
187
—
187
Deferred portion of income tax and other income tax adjustments
(88
)
—
(88
)
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
304
to
294
Capital improvement capital expenditures
(165
)
to
(175
)
Corporate capital expenditures
(10
)
—
(10
)
Consolidated AFFO
$
4,700
to
$
4,810
Minority interest
$
(250
)
—
$
(250
)
AFFO attributable to AMT common stockholders
$
4,450
to
$
4,560
Divided by weighted average diluted shares outstanding (in thousands)
467,000
—
467,000
AFFO attributable to AMT common stockholders per Share
$
9.53
to
$
9.76
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, 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: (877) 692-8955
International dial-in: (234) 720-6979
Passcode: 2801199
When available, a replay of the call can be accessed until 11:59 p.m. ET on May 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: 5479543
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.
Contacts
Adam Smith
Senior Vice President, Investor Relations
Telephone: (617) 375-7500