American Tower Corporation Reports Third Quarter 2021 Financial Results

CONSOLIDATED HIGHLIGHTS

Third Quarter 2021

• Total revenue increased 21.9% to $2,454 million
• Property revenue increased 19.2% to $2,369 million
• Net income increased 56.9% to $726 million
• Adjusted EBITDA increased 19.5% to $1,552 million
• Consolidated AFFO increased 13.3% to $1,158 million

BOSTON–(BUSINESS WIRE)–American Tower Corporation (NYSE: AMT) today reported financial results for the quarter ended September 30, 2021.

Tom Bartlett, American Tower’s Chief Executive Officer, stated, “We saw strong demand trends across our global business in the third quarter, supported by carrier investments in network densification, new network technologies and spectrum deployments. As a result, we continued to help our customers deliver critical connectivity to billions of people across the world while generating double-digit growth in both AFFO per Share and our common stock dividend.

As 5G deployments in the U.S. and Europe progress and 4G buildouts throughout our other markets accelerate, we remain confident in our ability to drive sustainable, recurring growth for years to come across our extensive existing portfolio. Further, we are energized by the ongoing evolution of the global wireless ecosystem, which we expect will generate additional attractive long-term value creation opportunities through our platform expansion initiatives.”

CONSOLIDATED OPERATING RESULTS OVERVIEW

American Tower generated the following operating results for the quarter ended September 30, 2021 (all comparative information is presented against the quarter ended September 30, 2020).

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1. Q3 2021 growth rates positively impacted by approximately $181 million of foreign currency gains in the current period as compared to foreign currency losses of approximately $49 million in the prior-year period.
2. Reflects benefits of a non-recurring advance payment received from a tenant 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. Q3 2021 cash capital expenditures include $9.2 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 September 30, 2021, the Company declared the following regular cash distributions to its common stockholders:

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1. The distribution declared on September 16, 2021 was paid in the fourth quarter of 2021 to stockholders of record as of the close of business on September 28, 2021.

Capital Expenditures – During the third quarter of 2021, total capital expenditures were approximately $321 million, of which $42 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 third quarter of 2021, the Company spent approximately $0.7 billion to acquire 4,369 communications sites, primarily in international markets, including the approximately 4,000 remaining communications sites in Germany as part of the Company’s previously announced transaction with Telxius Telecom, S.A. (the “Telxius Acquisition”).

Subsequent to the end of the third quarter, the Company added two multi-tenant data centers in Marietta, GA and Orlando, FL to its portfolio through the acquisition of DataSite, Inc. for approximately $201 million.

Other Events – On September 14, 2021, the Company closed its previously announced transactions with Caisse de dépôt et placement du Québec (“CDPQ”) and Allianz insurance companies and funds managed by Allianz Capital Partners GmbH, including the Allianz European Infrastructure Fund (collectively, “Allianz”). Pursuant to these transactions, CDPQ and Allianz acquired 30% and 18% noncontrolling interests, respectively, in subsidiaries whose holdings consist of the Company’s operations in France, Germany, Poland and Spain (such subsidiaries collectively, “ATC Europe”) for total aggregate consideration of €2.6 billion (approximately $3.1 billion at the date of closing). The Company currently holds a 52% controlling ownership interest in ATC Europe.

LEVERAGE AND FINANCING OVERVIEW

Leverage – For the quarter ended September 30, 2021, the Company’s Net Leverage Ratio was 4.9x net debt (total debt less cash and cash equivalents) to third quarter 2021 annualized Adjusted EBITDA.

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1. Q3 2021 Adjusted EBITDA multiplied by four.

Liquidity and Financing Activities – As of September 30, 2021, the Company had approximately $8.7 billion of total liquidity, consisting of approximately $3.3 billion in cash and cash equivalents plus the ability to borrow an aggregate of approximately $5.4 billion under its revolving credit facilities, net of any outstanding letters of credit.

During the third quarter of 2021, the Company issued an aggregate of $1.8 billion in senior unsecured notes. The net proceeds were used to repay existing indebtedness and for general corporate purposes.

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 indebtedness, including the full repayment of the remaining amounts outstanding under the Company’s 364-day delayed draw term loan.

Additionally, 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 unpaid interest.

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 October 28, 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.

As of October 28, 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 can be found in our 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 October 28, 2021 through December 31, 2021: (a) 107 Argentinean Pesos; (b) 1.37 Australian Dollars; (c) 86.00 Bangladeshi Taka; (d) 5.50 Brazilian Reais; (e) 1.25 Canadian Dollars; (f) 820 Chilean Pesos; (g) 3,770 Colombian Pesos; (h) 0.86 Euros; (i) 6.05 Ghanaian Cedis; (j) 75.10 Indian Rupees; (k) 111 Kenyan Shillings; (l) 20.50 Mexican Pesos; (m) 415 Nigerian Naira; (n) 6,920 Paraguayan Guarani; (o) 4.10 Peruvian Soles; (p) 50.70 Philippine Pesos; (q) 3.95 Polish Zloty; (r) 15.20 South African Rand; (s) 3,600 Ugandan Shillings; and (t) 570 West African CFA Francs.

The Company is raising the midpoint of its full year 2021 outlook for property revenue, net income, Adjusted EBITDA and Consolidated AFFO by $10 million, $170 million, $50 million and $60 million, respectively.

The Company’s outlook reflects estimated unfavorable impacts of foreign currency exchange rate fluctuations to property revenue, Adjusted EBITDA and Consolidated AFFO of approximately $30 million, $20 million and $15 million, respectively, relative to the Company’s prior 2021 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.

Additionally, the Company is now providing its outlook for Net income attributable to AMT common stockholders and AFFO attributable to AMT common stockholders due to the recent closings of its agreements with CDPQ and Allianz.

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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1. Includes U.S. & Canada segment property revenue of $4,905 million to $4,925 million and international property revenue of $4,130 million to $4,180 million, reflecting midpoint growth rates of 8.8% and 20.9%, respectively. The U.S. & Canada growth rate includes an estimated positive impact of nearly 3% associated with an increase in non-cash straight-line revenue recognition. The international growth rate includes an estimated positive impact of less than 1% 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.

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1. For additional discussion regarding these components, please refer to “Revenue Components” below.
2. International property revenue reflects the Company’s Africa, Asia-Pacific, Europe and Latin America segments.

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1. For additional discussion regarding the component growth rates, please refer to “Revenue Components” below.
2. International property revenue reflects the Company’s Africa, Asia-Pacific, Europe and Latin America segments.

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1. Includes the construction of 6,500 to 7,500 communications sites globally.

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 September 30, 2021 and its revised outlook for 2021. 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: 8072944

When available, a replay of the call can be accessed until 11:59 p.m. ET on November 11, 2021. The replay dial-in numbers are as follows:

U.S./Canada dial-in: (866) 207-1041

International dial-in: (402) 970-0847

Passcode: 6073373

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 219,000 communications sites. 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.

Contacts

Igor Khislavsky

Vice President, Investor Relations

Telephone: (617) 375-7500

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