American Tower Corporation Reports Fourth Quarter and Full Year 2020 Financial Results
CONSOLIDATED HIGHLIGHTS
Fourth Quarter 2020
- Total revenue increased 10.3% to $2,123 million
- Property revenue increased 10.0% to $2,100 million
- Net income decreased 36.5% to $362 million
- Adjusted EBITDA increased 13.0% to $1,375 million
- Consolidated AFFO increased 8.9% to $936 million
Full Year 2020
- Total revenue increased 6.1% to $8,042 million
- Property revenue increased 6.5% to $7,954 million
- Net income decreased 11.7% to $1,692 million
- Adjusted EBITDA increased 8.7% to $5,156 million
- Consolidated AFFO increased 7.6% to $3,788 million
BOSTON–(BUSINESS WIRE)–American Tower Corporation (NYSE: AMT) today reported financial results for the quarter and the full year ended December 31, 2020.
Tom Bartlett, American Tower’s Chief Executive Officer, stated, “We generated strong performance in 2020, driven by the combination of solid organic growth, accretive acquisitions and a record year of new site construction, along with improving margins. Moreover, we grew our common stock dividend and maintained our strong balance sheet, while helping to provide critical connectivity to billions of people across our served markets during the ongoing pandemic.
In 2021, we expect to extend our long track record of driving sustainable growth as mobile technology advances globally. We look forward to closing our transformational Telxius acquisition, which will establish us as a leader in Germany and Spain, and are rapidly integrating the more than 2,000 new towers we acquired in the U.S. and Canada in the fourth quarter of 2020. We believe that our comprehensive asset base, commitment to our Stand and Deliver strategy and our exceptional employees around the world position American Tower for continued success as we look to 5G and beyond.”
CONSOLIDATED OPERATING RESULTS OVERVIEW
American Tower generated the following operating results for the quarter and the full year ended December 31, 2020 (all comparative information is presented against the quarter and full year ended December 31, 2019).
|
($ in millions, except per share amounts.) |
|
Q4 2020 |
|
Growth |
|
FY 2020 |
|
Growth |
||||||
|
Total revenue…………………………………………………………………………………………………………. |
|
$ |
2,123 |
|
|
10.3 |
% |
|
$ |
8,042 |
|
|
6.1 |
% |
|
Total property revenue…………………………………………………………………………………………………………. |
|
$ |
2,100 |
|
|
10.0 |
% |
|
$ |
7,954 |
|
|
6.5 |
% |
|
Total Tenant Billings Growth…………………………………………………………………………………………………………. |
|
$ |
141 |
|
|
9.4 |
% |
|
$ |
574 |
|
|
9.7 |
% |
|
Organic Tenant Billings Growth…………………………………………………………………………………………………………. |
|
$ |
67 |
|
|
4.4 |
% |
|
$ |
285 |
|
|
4.8 |
% |
|
Property Gross Margin…………………………………………………………………………………………………………. |
|
$ |
1,537 |
|
|
12.6 |
% |
|
$ |
5,766 |
|
|
8.9 |
% |
|
Property Gross Margin %…………………………………………………………………………………………………………. |
|
73.2 |
% |
|
|
|
72.5 |
% |
|
|
||||
|
Net income(1)…………………………………………………………………………………………………………. |
|
$ |
362 |
|
|
(36.5) |
% |
|
$ |
1,692 |
|
|
(11.7) |
% |
|
Net income attributable to AMT common stockholders(1)…………………………………………………………………………………………………………. |
|
$ |
365 |
|
|
(35.1) |
% |
|
$ |
1,691 |
|
|
(10.4) |
% |
|
Net income attributable to AMT common stockholders per diluted share(1)…………………………………………………………………………………………………………. |
|
$ |
0.82 |
|
|
(34.9) |
% |
|
$ |
3.79 |
|
|
(10.6) |
% |
|
Adjusted EBITDA…………………………………………………………………………………………………………. |
|
$ |
1,375 |
|
|
13.0 |
% |
|
$ |
5,156 |
|
|
8.7 |
% |
|
Adjusted EBITDA Margin %…………………………………………………………………………………………………………. |
|
64.8 |
% |
|
|
|
64.1 |
% |
|
|
||||
|
|
|
|
|
|
|
|
|
|
||||||
|
Nareit Funds From Operations (FFO) attributable to AMT common stockholders…………………………………………………………………………………………………………. |
|
$ |
956 |
|
|
(3.8) |
% |
|
$ |
3,511 |
|
|
0.5 |
% |
|
Consolidated AFFO…………………………………………………………………………………………………………. |
|
$ |
936 |
|
|
8.9 |
% |
|
$ |
3,788 |
|
|
7.6 |
% |
|
Consolidated AFFO per Share…………………………………………………………………………………………………………. |
|
$ |
2.10 |
|
|
8.8 |
% |
|
$ |
8.49 |
|
|
7.5 |
% |
|
AFFO attributable to AMT common stockholders…………………………………………………………………………………………………………. |
|
$ |
923 |
|
|
6.2 |
% |
|
$ |
3,764 |
|
|
9.4 |
% |
|
AFFO attributable to AMT common stockholders per Share…………………………………………………………………………………………………………. |
|
$ |
2.07 |
|
|
6.2 |
% |
|
$ |
8.44 |
|
|
9.2 |
% |
|
|
|
|
|
|
|
|
|
|
||||||
|
Cash provided by operating activities…………………………………………………………………………………………………………. |
|
$ |
1,132 |
|
|
13.9 |
% |
|
$ |
3,881 |
|
|
3.4 |
% |
|
Less: total cash capital expenditures(2)…………………………………………………………………………………………………………. |
|
$ |
374 |
|
|
36.1 |
% |
|
$ |
1,071 |
|
|
4.0 |
% |
|
Free Cash Flow…………………………………………………………………………………………………………. |
|
$ |
758 |
|
|
5.5 |
% |
|
$ |
2,810 |
|
|
3.2 |
% |
_______________
|
(1)
|
Three and twelve months ended December 31,2020 and associated growth rates impacted by impairment charges of approximately $181 million and $223 million, respectively, recorded in 2020, as well as the non-recurrence of a $113 million one-time income tax benefit in India in 2019. |
|
|
(2)
|
Q4 2020 and FY 2020 cash capital expenditures include $13.4 million and $46.1 million, respectively, of finance lease and perpetual land easement payment 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 and full year ended December 31, 2020, the Company declared the following regular cash distributions to its common stockholders:
|
Common Stock Distributions |
|
Q4 2020(1) |
|
FY 2020 |
||||
|
Distributions per share……………………………………………………………………………………………………………………… |
|
$ |
1.21 |
|
|
$ |
4.53 |
|
|
Aggregate amount (in millions)……………………………………………………………………………………………………………………… |
|
$ |
538 |
|
|
$ |
2,011 |
|
|
Year-over-year per share growth……………………………………………………………………………………………………………………… |
|
19.8 |
% |
|
19.8 |
% |
||
_______________
(1) The distribution declared on December 3, 2020 was paid in the first quarter of 2021 to stockholders of record as of the close of business on December 28, 2020.
Stock Repurchase Program – The Company repurchased a total of 0.3 million shares of its common stock for approximately $56 million in 2020, all in the first and second quarters. As of December 31, 2020, there was approximately $2.0 billion remaining under the Company’s existing stock repurchase programs.
Capital Expenditures – During the fourth quarter of 2020, total capital expenditures were approximately $374 million, of which $67 million was for non-discretionary capital improvements and corporate capital expenditures. For the full year 2020, total capital expenditures were approximately $1.1 billion, of which $160 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 fourth quarter of 2020, the Company spent approximately $3.5 billion to acquire 2,629 communications sites, primarily in the U.S. and Canada, including more than 1,600 towers and distributed antenna systems, as well as other communications infrastructure, as part of its previously announced agreement with InSite Wireless Group, LLC (the “InSite Acquisition”). Also included in the totals herein is the Company’s acquisition of over 500 additional towers in the U.S. in the fourth quarter. For the full year 2020, the Company spent approximately $3.8 billion to acquire 3,477 communications sites and other communications infrastructure globally.
On January 13, 2021, the Company entered into definitive agreements with Telxius Telecom, S.A. (“Telxius”), a subsidiary of Telefónica, S.A., under which it will acquire Telxius’ European and Latin American tower divisions, comprising approximately 31,000 communications sites in Argentina, Brazil, Chile, Germany, Peru and Spain, for approximately €7.7 billion (approximately $9.4 billion at the date of signing) (the “Pending Telxius Acquisition”). The Pending Telxius Acquisition is expected to close in tranches beginning in the second quarter of 2021, subject to customary closing conditions, including government and regulatory approval.
Other Events – On December 16, 2020, the Company redeemed 100% of Tata Teleservices Limited and Tata Sons’ remaining combined holdings of ATC Telecom Infrastructure Private Limited (“ATC TIPL”), for total consideration of INR 24.8 billion (approximately $337 million at the date of redemption). As a result of the redemption, the Company’s controlling interest in ATC TIPL increased from 79% to 92%.
In February 2021, the Company entered into an agreement with Macquarie SBI Infrastructure Investments Pte Limited and SBI Macquarie Infrastructure Trust (together, “Macquarie”) to redeem 100% of their combined holdings in ATC TIPL. Accordingly, the Company expects to pay an amount equivalent to INR 12.9 billion (approximately $177 million at the December 31, 2020 exchange rate) to redeem the shares in 2021, subject to regulatory approval. After the completion of the redemption, the Company will hold a 100% ownership interest in ATC TIPL.
LEVERAGE AND FINANCING OVERVIEW
Leverage – For the quarter ended December 31, 2020, the Company’s Net Leverage Ratio was 5.0x net debt (total debt less cash and cash equivalents) to fourth quarter 2020 annualized Adjusted EBITDA.
|
Calculation of Net Leverage Ratio |
|
As of December 31, 2020 |
||
|
Total debt…………………………………………………………………………………………… |
|
$ |
29,287 |
|
|
Less: Cash and cash equivalents………………………………………………………………. |
|
1,746 |
|
|
|
Net Debt……………………………………………………………………………………………. |
|
27,541 |
|
|
|
Divided By: Fourth quarter annualized Adjusted EBITDA(1)…………………………… |
|
5,502 |
|
|
|
Net Leverage Ratio………………………………………………………………………………. |
|
5.0x |
||
_______________
|
(1) |
Q4 2020 Adjusted EBITDA multiplied by four. |
Liquidity and Financing Activities – As of December 31, 2020, the Company had nearly $4.9 billion of total liquidity, consisting of $1.7 billion in cash and cash equivalents plus the ability to borrow an aggregate of approximately $3.2 billion under its revolving credit facilities, net of any outstanding letters of credit.
During the fourth quarter of 2020, the Company issued $1.7 billion in senior unsecured notes. The net proceeds were used to repay existing indebtedness and for general corporate purposes, including the funding of the InSite Acquisition.
On February 5, 2021, the Company repaid its $750.0 million unsecured term loan due February 12, 2021.
On February 10, 2021, the Company entered into amendments to its revolving credit facilities and 2019 term loan providing for, among other things, an upsize of the commitments under its multicurrency revolving credit facility to $4.1 billion and its revolving credit facility to $2.9 billion, of which €1.3 billion under the multicurrency revolving credit facility is to be used to finance a portion of the Pending Telxius Acquisition. Also on February 10, 2021, the Company entered into a €1.1 billion 364-day delayed draw term loan and an €825.0 million 3-year delayed draw term loan, the proceeds of which are to be used to fund the Pending Telxius Acquisition.
As a result of the above transactions, effective February 10, 2021, the Company reduced the size of the bridge commitment it entered into on January 13, 2021 with Bank of America N.A. and BofA Securities, Inc. to €4.275 billion from the original €7.5 billion.
FULL YEAR 2021 OUTLOOK
The following full year 2021 estimates are based on a number of assumptions that management believes to be reasonable and reflect the Company’s expectations as of February 25, 2021. 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 does not include any impact from the Pending Telxius Acquisition.
As of February 25, 2021, based on currently available information, the Company does not anticipate significant impacts to its underlying operating results in 2021 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-K for the twelve months ended December 31, 2020.
The Company’s outlook is based on the following average foreign currency exchange rates to 1.00 U.S. Dollar for February 25, 2021 through December 31, 2021: (a) 107 Argentinean Pesos; (b) 1.30 Australian Dollars (c) 5.40 Brazilian Reais; (d) 1.27 Canadian Dollars (e) 730 Chilean Pesos; (f) 3,520 Colombian Pesos; (g) 0.82 Euros; (h) 5.90 Ghanaian Cedis; (i) 73.10 Indian Rupees; (j) 111 Kenyan Shillings; (k) 20.00 Mexican Pesos; (l) 400 Nigerian Naira; (m) 6,900 Paraguayan Guarani; (n) 3.65 Peruvian Soles; (o) 3.75 Polish Zloty; (p) 15.15 South African Rand; (q) 3,690 Ugandan Shillings; and (r) 540 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 $40 million, $27 million and $23 million, respectively, relative to the Company’s 2020 results. The impact of foreign currency exchange rate fluctuations on net income is not provided, as the impact on all components of the net income measure cannot be calculated without unreasonable effort.
Additional information pertaining to the impact of foreign currency and London Interbank Offered Rate (“LIBOR”) fluctuations on the Company’s outlook has been provided in the supplemental disclosure package available on the Company’s website.
|
2021 Outlook ($ in millions) |
Full Year 2021 |
|
Midpoint Growth Rates |
|||||||
|
Total property revenue(1)………………………………………………………………………………………… |
$ |
8,500 |
|
to |
$ |
8,650 |
|
|
7.8 |
% |
|
Net income………………………………………………………………………………………… |
2,165 |
|
to |
2,265 |
|
|
31.0 |
% |
||
|
Adjusted EBITDA………………………………………………………………………………………… |
5,590 |
|
to |
5,690 |
|
|
9.4 |
% |
||
|
Consolidated AFFO………………………………………………………………………………………… |
4,060 |
|
to |
4,160 |
|
|
8.5 |
% |
||
_______________
|
(1) |
Includes U.S. & Canada segment property revenue of $4,850 million to $4,910 million and international property revenue of $3,650 million to $3,740 million, reflecting midpoint growth rates of 8.0% and 7.5%, respectively. The U.S. & Canada growth rate includes an estimated positive impact of over 2% associated with an increase in non-cash straight-line revenue recognition. The international growth rate includes an estimated positive impact of over 1% from the translational effects of foreign currency exchange rate fluctuations. International property revenue reflects the Company’s Latin America, Africa, Europe and Asia-Pacific segments. |
|
2021 Outlook for Total Property revenue, at the midpoint, includes the |
U.S. & Canada |
|
International |
|
Total Property |
|||||
|
International pass-through revenue………………………………………………………….. |
N/A |
|
$ |
1,035 |
|
|
$ |
1,035 |
|
|
|
Straight-line revenue……………………………………………………………………………. |
405 |
|
30 |
|
|
435 |
|
|||
_______________
|
(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-Pacific segments. |
|
2021 Outlook for Total Tenant Billings Growth, at the midpoint, includes the |
U.S. & Canada |
|
International |
|
Total Property |
|
Organic Tenant Billings………………………………………………………………………… |
~3% |
|
~5% |
|
~3-4% |
|
New Site Tenant Billings……………………………………………………………………….. |
~4% |
|
~3% |
|
~3-4% |
|
Total Tenant Billings Growth………………………………………………………………….. |
~6-7% |
|
~8% |
|
~7% |
_______________
|
(1) |
For additional discussion regarding the component growth rates, please refer to “Revenue Components” below. |
|
|
(2) |
International property revenue reflects the Company’s Latin America, Africa, Europe and Asia-Pacific segments. |
|
Outlook for Capital Expenditures: |
|
|
|
||||
|
Full Year 2021 |
|||||||
|
Discretionary capital projects(1)……………………………………………………………………………………. |
$ |
475 |
|
to |
$ |
505 |
|
|
Ground lease purchases……………………………………………………………………………………………… |
230 |
|
to |
250 |
|
||
|
Start-up capital projects……………………………………………………………………………………………… |
190 |
|
to |
210 |
|
||
|
Redevelopment………………………………………………………………………………………………………… |
290 |
|
to |
310 |
|
||
|
Capital improvement…………………………………………………………………………………………………. |
160 |
|
to |
170 |
|
||
|
Corporate……………………………………………………………………………………………………………….. |
5 |
|
— |
5 |
|
||
|
Total……………………………………………………………………………………………………………….. |
$ |
1,350 |
|
to |
$ |
1,450 |
|
_______________
|
(1) |
Includes the construction of 6,000 to 7,000 communications sites globally. |
|
Reconciliation of Outlook for Adjusted EBITDA to Net income: |
|
|
|
||||
|
Full Year 2021 |
|||||||
|
Net income……………………………………………………………………………………………………………… |
$ |
2,165 |
|
to |
$ |
2,265 |
|
|
Interest expense……………………………………………………………………………………………………….. |
860 |
|
to |
840 |
|
||
|
Depreciation, amortization and accretion……………………………………………………………………….. |
2,105 |
|
to |
2,125 |
|
||
|
Income tax provision…………………………………………………………………………………………………. |
205 |
|
to |
215 |
|
||
|
Stock-based compensation expense………………………………………………………………………………. |
120 |
|
— |
120 |
|
||
|
Other, including other operating expenses, interest income, gain (loss) on retirement of long-term |
135 |
|
to |
125 |
|
||
|
Adjusted EBITDA……………………………………………………………………………………………… |
$ |
5,590 |
|
to |
$ |
5,690 |
|
|
Reconciliation of Outlook for Consolidated AFFO to Net income: |
|
|
|
||||||
|
Full Year 2021 |
|||||||||
|
Net income……………………………………………………………………………………………………………… |
$ |
2,165 |
|
|
to |
$ |
2,265 |
|
|
|
Straight-line revenue…………………………………………………………………………………………………. |
(435 |
) |
|
— |
(435 |
) |
|
||
|
Straight-line expense…………………………………………………………………………………………………. |
65 |
|
|
— |
65 |
|
|
||
|
Depreciation, amortization and accretion……………………………………………………………………….. |
2,105 |
|
|
to |
2,125 |
|
|
||
|
Stock-based compensation expense………………………………………………………………………………. |
120 |
|
|
— |
120 |
|
|
||
|
Deferred portion of income tax……………………………………………………………………………………. |
— |
|
|
— |
— |
|
|
||
|
Other, including other operating expense, amortization of deferred financing costs, capitalized |
205 |
|
|
to |
195 |
|
|
||
|
Capital improvement capital expenditures………………………………………………………………………. |
(160 |
) |
|
to |
(170 |
) |
|
||
|
Corporate capital expenditures…………………………………………………………………………………….. |
(5 |
) |
|
— |
(5 |
) |
|
||
|
Consolidated AFFO……………………………………………………………………………………………. |
$ |
4,060 |
|
|
to |
$ |
4,160 |
|
|
Contacts
Igor Khislavsky
Vice President, Investor Relations
Telephone: (617) 375-7500