American Tower Corporation Reports Fourth Quarter and Full Year 2021 Financial Results
BOSTON–(BUSINESS WIRE)–American Tower Corporation (NYSE: AMT):
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CONSOLIDATED HIGHLIGHTS |
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Fourth Quarter 2021 |
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Full Year 2021 |
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● |
Total revenue increased 15.2% to $2,445 million |
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Total revenue increased 16.4% to $9,357 million |
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Property revenue increased 13.3% to $2,378 million |
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Property revenue increased 14.5% to $9,110 million |
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Net income increased 22.0% to $441 million |
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Net income increased 51.8% to $2,568 million |
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Adjusted EBITDA increased 10.2% to $1,515 million |
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Adjusted EBITDA increased 16.0% to $5,983 million |
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Consolidated AFFO increased 6.5% to $996 million |
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● |
Consolidated AFFO increased 15.4% to $4,373 million |
American Tower Corporation (NYSE: AMT) today reported financial results for the quarter and the full year ended December 31, 2021.
Tom Bartlett, American Tower’s Chief Executive Officer, stated, “We drove another year of strong performance in 2021, including double-digit AFFO per Share growth, record new site construction activity and the closing of key acquisitions that we believe will enhance our future growth as digital transformation accelerates. Concurrently, we grew our common stock dividend, prudently managed our balance sheet and diversified our sources of capital in Europe with multiple high-quality strategic partners.
In 2022, we expect to again drive solid growth across our comprehensive global portfolio while working diligently to position American Tower to fully leverage the exciting emerging technological trends we are seeing across the wireless ecosystem. As we help deliver critical connectivity to billions of people around the world, we remain focused on producing attractive total long-term stockholder returns, further enhancing our sustainability initiatives and making a positive difference in our communities.”
CONSOLIDATED OPERATING RESULTS OVERVIEW
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American Tower generated the following operating results for the quarter and the full year ended December 31, 2021 (all comparative |
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($ in millions, except per share amounts.) |
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Q4 2021 |
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Growth |
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FY 2021 |
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Growth |
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Total revenue |
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$ |
2,445 |
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|
15.2 |
% |
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$ |
9,357 |
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|
16.4 |
% |
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Total property revenue |
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$ |
2,378 |
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13.3 |
% |
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$ |
9,110 |
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14.5 |
% |
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Total Tenant Billings Growth |
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$ |
187 |
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11.7 |
% |
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$ |
712 |
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11.3 |
% |
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Organic Tenant Billings Growth |
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$ |
27 |
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1.7 |
% |
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$ |
241 |
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3.8 |
% |
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Property Gross Margin |
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$ |
1,673 |
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8.8 |
% |
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$ |
6,524 |
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13.2 |
% |
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Property Gross Margin % |
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70.3 |
% |
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71.6 |
% |
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Net income(1) |
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$ |
441 |
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22.0 |
% |
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$ |
2,568 |
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51.8 |
% |
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Net income attributable to AMT common stockholders(1) |
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$ |
453 |
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24.2 |
% |
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$ |
2,568 |
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51.9 |
% |
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Net income attributable to AMT common stockholders per diluted share(1) |
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$ |
0.99 |
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20.7 |
% |
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$ |
5.66 |
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49.3 |
% |
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Adjusted EBITDA |
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$ |
1,515 |
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10.2 |
% |
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$ |
5,983 |
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16.0 |
% |
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Adjusted EBITDA Margin % |
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62.0 |
% |
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63.9 |
% |
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Nareit Funds From Operations (FFO) attributable to AMT common stockholders |
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$ |
1,105 |
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15.6 |
% |
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$ |
4,753 |
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35.4 |
% |
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Consolidated AFFO |
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$ |
996 |
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6.5 |
% |
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$ |
4,373 |
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15.4 |
% |
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Consolidated AFFO per Share |
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$ |
2.18 |
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3.8 |
% |
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$ |
9.65 |
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13.7 |
% |
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AFFO attributable to AMT common stockholders |
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$ |
958 |
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3.8 |
% |
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$ |
4,277 |
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13.6 |
% |
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AFFO attributable to AMT common stockholders per Share |
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$ |
2.10 |
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1.4 |
% |
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$ |
9.43 |
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11.7 |
% |
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Cash provided by operating activities(2) |
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$ |
679 |
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(40.0 |
) % |
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$ |
4,820 |
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24.2 |
% |
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Less: total cash capital expenditures(3) |
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$ |
467 |
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24.7 |
% |
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$ |
1,408 |
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31.4 |
% |
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Free Cash Flow(2) |
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$ |
212 |
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(72.0 |
) % |
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$ |
3,412 |
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21.4 |
% |
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(1) Q4 2021 and FY 2021 growth rates positively impacted by approximately $136 million and $558 million, respectively, of foreign currency gains in the current period as compared to foreign currency losses of approximately $64 million and $216 million, respectively, in the prior-year periods.
(2) FY 2021 reflects benefits of 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) Q4 2021 and FY 2021 cash capital expenditures include $11.6 million and $40.6 million, respectively, of finance lease and perpetual land easement payments reported in cash flows from financing activities in the condensed consolidated statements of cash flows.
Please refer to “Non-GAAP and Defined Financial Measures” below for definitions and other information regarding the Company’s use of non-GAAP measures. For financial information and reconciliations to GAAP measures, please refer to the “Unaudited Selected Consolidated Financial Information” below.
CAPITAL ALLOCATION OVERVIEW
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Distributions – During the quarter and the full year ended December 31, 2021, the Company declared the following regular cash |
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Common Stock Distributions |
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Q4 2021(1) |
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FY 2021 |
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Distributions per share |
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$ |
1.39 |
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$ |
5.21 |
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Aggregate amount (in millions) |
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$ |
634 |
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$ |
2,359 |
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Year-over-year per share growth |
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14.9 |
% |
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15.0 |
% |
_______________
(1) The distribution declared on December 15, 2021 was paid in the first quarter of 2022 to stockholders of record as of the close of business on December 27, 2021.
Capital Expenditures – During the fourth quarter of 2021, total capital expenditures were approximately $467 million, of which $81 million was for non-discretionary capital improvements and corporate capital expenditures. For the full year 2021, total capital expenditures were approximately $1.4 billion, of which $178 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 2021, the Company spent approximately $0.4 billion to acquire two data centers as part of the DataSite, Inc. (“DataSite”) acquisition, along with nearly 700 communications sites, primarily in international markets. Also during the fourth quarter of 2021, the Company acquired over 20 data center facilities and related assets in eight United States markets, as part of the Company’s previously announced acquisition of CoreSite Realty Corporation (“CoreSite,” and the acquisition, the “CoreSite Acquisition”), for total consideration of $10.4 billion, including the assumption and repayment of CoreSite’s existing debt. For the full year 2021, the Company spent approximately $20.8 billion to acquire nearly 33,000 communications sites and other communications infrastructure, including data center facilities, globally.
Other Events – During the fourth quarter of 2021, the Company redeemed 100% of Macquarie SBI Infrastructure Investments Pte Limited’s and SBI Macquarie Infrastructure Trust’s holdings in ATC Telecom Infrastructure Private Limited (“ATC TIPL”), for total consideration of 12.9 billion Indian Rupees (approximately $173.2 million at the date of redemption). As a result of the redemption, the Company now holds a 100% ownership interest in ATC TIPL.
LEVERAGE AND FINANCING OVERVIEW
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Leverage – For the quarter ended December 31, 2021, the Company’s Net Leverage Ratio was 6.8x net debt (total debt less cash and cash |
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Calculation of Net Leverage Ratio ($ in millions, totals may not add due to rounding) |
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As of December 31, 2021 |
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Total debt |
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$ |
43,254 |
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Less: Cash and cash equivalents |
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1,950 |
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Net Debt |
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41,304 |
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Divided By: Fourth quarter annualized Adjusted EBITDA(1) |
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6,061 |
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Net Leverage Ratio |
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6.8x |
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_______________
(1) Q4 2021 Adjusted EBITDA multiplied by four.
Liquidity and Financing Activities – As of December 31, 2021, the Company had approximately $6.1 billion of total liquidity, consisting of approximately $1.9 billion in cash and cash equivalents plus the ability to borrow an aggregate of approximately $4.2 billion under its revolving credit facilities, net of any outstanding letters of credit.
On October 5, 2021, the Company issued an aggregate of €1.0 billion (approximately $1.2 billion at the date of issuance) in Euro-denominated senior unsecured notes. The net proceeds were used to repay existing Euro-denominated indebtedness, including the full repayment of the remaining amounts outstanding under the Company’s 364-day Euro-denominated delayed draw term loan.
On October 18, 2021, the Company completed the redemption of all of its outstanding 4.70% senior unsecured notes due 2022, for an aggregate redemption price of approximately $715.1 million, including $3.0 million in accrued and unpaid interest.
On December 8, 2021, the Company amended and restated the agreements for (i) its senior unsecured multicurrency revolving credit facility (as amended and restated, the “2021 Multicurrency Credit Facility”), (ii) its senior unsecured revolving credit facility (as amended and restated, the “2021 Credit Facility”) and its unsecured term loan (as amended and restated, the “2021 Term Loan”). The amendments, among other things, extended the maturity dates and increased the commitments under the 2021 Multicurrency Credit Facility, the 2021 Credit Facility and the 2021 Term Loan to $6.0 billion, $4.0 billion and $1.0 billion, respectively, of which the Company borrowed an aggregate of $5.1 billion under these facilities during the fourth quarter of 2021 to fund the CoreSite Acquisition.
In addition, on December 8, 2021, the Company entered into a $3.0 billion 364-day unsecured term loan and a $1.5 billion two-year unsecured term loan. The Company borrowed an aggregate of $4.5 billion under these term loans during the fourth quarter of 2021 to fund the CoreSite Acquisition.
Subsequent to the end of 2021, on January 7, 2022, the Company repaid all outstanding amounts, plus accrued and unpaid interest for the remaining debt assumed in connection with 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 the CoreSite Debt was funded with borrowings under the 2021 Multicurrency Credit Facility and cash on hand.
Additionally, on January 14, 2022, the Company repaid all of its outstanding 2.250% senior unsecured notes due 2022 using borrowings from the 2021 Credit Facility.
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 February 24, 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 February 24, 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 will be provided in our upcoming 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 February 24, 2022 through December 31, 2022: (a) 121 Argentinean Pesos; (b) 1.40 Australian Dollars; (c) 87.40 Bangladeshi Taka; (d) 5.55 Brazilian Reais; (e) 1.26 Canadian Dollars; (f) 815 Chilean Pesos; (g) 3,980 Colombian Pesos; (h) 0.89 Euros; (i) 6.20 Ghanaian Cedis; (j) 74.80 Indian Rupees; (k) 113 Kenyan Shillings; (l) 21.00 Mexican Pesos; (m) 415 Nigerian Naira; (n) 7,000 Paraguayan Guarani; (o) 3.90 Peruvian Soles; (p) 51.30 Philippine Pesos; (q) 4.10 Polish Zloty; (r) 15.80 South African Rand; (s) 3,600 Ugandan Shillings; and (t) 580 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 $125 million, $70 million and $55 million, respectively, relative to the Company’s 2021 results. The impact of foreign currency exchange rate fluctuations on net income metrics is not provided, as the impact on all components of the net income measure cannot be calculated without unreasonable effort.
Additional information pertaining to the impact of foreign currency and London Interbank Offered Rate (“LIBOR”) fluctuations on the Company’s outlook has been provided in the supplemental disclosure package available on the Company’s website.
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2022 Outlook ($ in millions) |
Full Year 2022 |
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Midpoint Growth Rates |
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Total property revenue(1) |
$ |
10,220 |
to |
$ |
10,400 |
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13.2 |
% |
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Net income(2) |
|
2,020 |
to |
|
2,130 |
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(19.2 |
)% |
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Net income attributable to AMT common stockholders(2) |
|
2,042 |
to |
|
2,152 |
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(18.3 |
)% |
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Adjusted EBITDA |
|
6,500 |
to |
|
6,610 |
|
9.6 |
% |
|
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Consolidated AFFO |
|
4,700 |
to |
|
4,810 |
|
8.7 |
% |
|
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AFFO attributable to AMT common stockholders |
|
4,535 |
to |
|
4,645 |
|
7.3 |
% |
|
_______________
(1) Includes U.S. & Canada segment property revenue of $4,895 million to $4,955 million, international property revenue of $4,590 million to $4,690 million and Data Centers segment property revenue of $735 million to $755 million, reflecting midpoint growth rates of 0.1%, 11.4%, and 3,108.9%, 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.
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2022 Outlook for Total Property revenue, at the midpoint, |
U.S. & Canada |
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International |
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Data Centers |
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Total Property |
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International pass-through revenue |
N/A |
|
$ 1,454 |
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N/A |
|
$ 1,454 |
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Straight-line revenue |
398 |
|
25 |
|
16 |
|
439 |
_______________
(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.
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2022 Outlook for Total Tenant Billings Growth, at the midpoint, includes the |
U.S. & Canada |
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International |
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Total Property |
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Organic Tenant Billings |
~1% |
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~6% |
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~3% |
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New Site Tenant Billings |
>0% |
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~10% |
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~3-4% |
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Total Tenant Billings Growth |
>1% |
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~16% |
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~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.
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Outlook for Capital Expenditures: ($ in millions, totals may not add due to rounding.) |
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Full Year 2022 |
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Discretionary capital projects(1) |
$ |
820 |
to |
$ |
850 |
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Ground lease purchases |
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230 |
to |
|
250 |
|
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Start-up capital projects |
|
280 |
to |
|
300 |
|
|
Redevelopment |
|
500 |
to |
|
520 |
|
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Capital improvement |
|
165 |
to |
|
175 |
|
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Corporate |
|
5 |
— |
|
5 |
|
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Total |
$ |
2,000 |
to |
$ |
2,100 |
|
_______________
(1) Includes the construction of 6,000 to 7,000 communications sites globally.
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Reconciliation of Outlook for Adjusted EBITDA to Net income: |
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Full Year 2022 |
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Net income |
$ |
2,020 |
to |
$ |
2,130 |
|
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Interest expense |
|
1,090 |
to |
|
1,070 |
|
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Depreciation, amortization and accretion |
|
2,980 |
to |
|
3,000 |
|
|
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 |
|
70 |
to |
|
60 |
|
|
Adjusted EBITDA |
$ |
6,500 |
to |
$ |
6,610 |
|
|
Reconciliation of Outlook for Consolidated AFFO and AFFO attributable to AMT common |
|
|
|
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Full Year 2022 |
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|
Net income |
$ |
2,020 |
|
to |
$ |
2,130 |
|
|
Straight-line revenue |
|
(439 |
) |
— |
|
(439 |
) |
|
Straight-line expense |
|
59 |
|
— |
|
59 |
|
|
Depreciation, amortization and accretion |
|
2,980 |
|
to |
|
3,000 |
|
|
Stock-based compensation expense |
|
170 |
|
— |
|
170 |
|
|
Deferred portion of income tax |
|
(98 |
) |
— |
|
(98 |
) |
|
Other, including other operating expense, amortization of deferred financing costs, capitalized |
|
178 |
|
to |
|
168 |
|
|
Capital improvement capital expenditures |
|
(165 |
) |
to |
|
(175 |
) |
|
Corporate capital expenditures |
|
(5 |
) |
— |
|
(5 |
) |
|
Consolidated AFFO |
$ |
4,700 |
|
to |
$ |
4,810 |
|
|
Minority interest |
$ |
(165 |
) |
— |
$ |
(165 |
) |
|
AFFO attributable to AMT common stockholders |
$ |
4,535 |
|
to |
$ |
4,645 |
|
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 and the full year ended December 31, 2021 and its 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 March 10, 2022. The replay dial-in numbers are as follows:
U.S./Canada dial-in: (866) 207-1041
International dial-in: (402) 970-0847
Passcode: 8858953
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 over 220,000 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.
Contacts
Adam Smith
Vice President, Investor Relations
Telephone: (617) 375-7500