Exhibit 99.1
Contact: Leah Stearns
Vice President, Investor Relations & Treasurer
Telephone: (617) 375-7500
AMERICAN TOWER CORPORATION REPORTS
FOURTH QUARTER AND FULL YEAR 2013 FINANCIAL RESULTS
| CONSOLIDATED HIGHLIGHTS | ||
Fourth Quarter 2013 |
Full Year 2013 | |
• Total revenue increased 22.6% to $942.0 million | • Total revenue increased 16.9% to $3,361.4 million | |
• Operating income increased 4.9% to $292.9 million | • Operating income increased 8.4% to $1,214.3 million | |
• Cash provided by operating activities increased 52.6% to $454.6 million | • Cash provided by operating activities increased 13.1% to $1,599.0 million | |
| SEGMENT HIGHLIGHTS | ||
| Fourth Quarter 2013 | Full Year 2013 | |
• Domestic rental and management segment revenue increased 24.6% to $622.7 million | • Domestic rental and management segment revenue increased 12.8% to $2,189.4 million | |
• International rental and management segment revenue increased 25.6% to $301.2 million | • International rental and management segment revenue increased 27.2% to $1,097.7 million | |
• Network development services segment revenue was $18.1 million | • Network development services segment revenue was $74.3 million | |
Boston, Massachusetts – February 25, 2014: American Tower Corporation (NYSE: AMT) today reported financial results for the fourth quarter and full year ended December 31, 2013.
Jim Taiclet, American Tower’s Chief Executive Officer stated, “In 2013, our global sales and operations teams delivered record levels of new leasing business. Collocations, amendments and annual escalators, net of churn, drove Organic Core Growth of 8.7% domestically and 13.5% in our international markets. In addition, we added over 10,000 towers to our portfolio via acquisitions, predominantly in our three largest markets, the U.S., Mexico and Brazil. We are especially pleased with the quality and performance to date of the Global Tower Partners assets, which expanded our domestic tower count by over 20%.
Moreover, we completed the construction of over 2,000 towers in 2013, ending the year with a total of over 67,000 sites. Taken together, our strong organic growth and successful portfolio expansion initiatives made for a great start to achieving our aspirational goal of doubling our 2012 AFFO per Share by 2017.”
FOURTH QUARTER 2013 OPERATING RESULTS OVERVIEW
American Tower generated the following operating results for the quarter ended December 31, 2013 (unless otherwise indicated, all comparative information is presented against the quarter ended December 31, 2012).
Total revenue increased 22.6% to $942.0 million and total rental and management revenue increased 24.9% to $923.9 million. Total rental and management revenue Core Growth was approximately 30.8%, and total rental and management Organic Core Growth was approximately 11.2%. Please refer to the selected statement of operations detail on page 13, which highlights the items affecting all Core Growth percentages for the quarter ended December 31, 2013.
Total rental and management Gross Margin increased 23.0% to $692.4 million. Total selling, general, administrative and development expense was $116.8 million, including $14.6 million of stock-based compensation expense. Adjusted EBITDA increased 19.9% to $600.1 million. Core Growth in Adjusted EBITDA was 27.3%, and Adjusted EBITDA Margin was 64%.
Adjusted Funds From Operations (AFFO) increased 28.1% to $378.2 million, AFFO per Share increased 28.4% to $0.95, and Core Growth in AFFO was approximately 27.4%.
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Operating income increased 4.9% to $292.9 million, and net income attributable to American Tower Corporation decreased 26.3% to $100.0 million, which was primarily attributable to the Company’s recognition of unrealized non-cash losses of $60.0 million associated with fluctuations in foreign currency exchange rates related to intercompany loans and similar unaffiliated balances. Net income attributable to American Tower Corporation per basic and diluted common share both decreased 26.5% to $0.25.
Cash provided by operating activities increased 52.6% to $454.6 million.
Segment Results
Domestic Rental and Management Segment – Domestic rental and management segment revenue increased 24.6% to $622.7 million, which represented 66% of total revenues, and domestic rental and management segment Gross Margin increased 20.2% to $499.6 million. Domestic rental and management segment Operating Profit increased 19.7% to $467.2 million, and domestic rental and management segment Operating Profit Margin was 75%.
International Rental and Management Segment – International rental and management segment revenue increased 25.6% to $301.2 million, which represented 32% of total revenues. International rental and management segment Gross Margin increased 30.9% to $192.8 million, while international rental and management segment Operating Profit increased 35.8% to $163.3 million. International rental and management segment Operating Profit Margin was 54% (75%, excluding the impact of $83.3 million of pass-through revenues).
Network Development Services Segment – Network development services segment revenue was $18.1 million, which represented 2% of total revenues. Network development services segment Gross Margin was $9.9 million, and network development services segment Operating Profit was $7.8 million. Network development services segment Operating Profit Margin was 43%.
FULL YEAR 2013 OPERATING RESULTS OVERVIEW
American Tower generated the following operating results for the twelve months ended December 31, 2013 (unless otherwise indicated, all comparative information is presented against the twelve months ended December 31, 2012).
Total revenue increased 16.9% to $3,361.4 million and total rental and management revenue increased 17.2% to $3,287.1 million. Total rental and management revenue Core Growth was approximately 22.1%, and total rental and management revenue Organic Core Growth was approximately 9.9%. Please refer to the selected statement of operations detail on page 13, which highlights the items affecting all Core Growth percentages for the twelve months ended December 31, 2013.
Total rental and management Gross Margin increased 16.4% to $2,481.6 million. Total selling, general, administrative and development expense was $415.5 million, including $66.6 million of stock-based compensation expense. Adjusted EBITDA increased 15.0% to $2,176.4 million, Core Growth in Adjusted EBITDA was 19.8%, and the Adjusted EBITDA Margin was 65%.
AFFO increased 20.2% to $1,469.5 million, AFFO per Share increased 20.3% to $3.68, and Core Growth in AFFO was approximately 23.1%.
Operating income increased 8.4% to $1,214.3 million, while net income attributable to American Tower Corporation decreased 13.5% to $551.3 million. The decrease was primarily attributable to the Company’s recognition of unrealized non-cash losses of $211.7 million associated with fluctuations in foreign currency exchange rates related to intercompany loans and similar unaffiliated balances. Net income attributable to American Tower Corporation per basic common share decreased 13.0% to $1.40, and net income attributable to American Tower Corporation per diluted common share decreased 13.8% to $1.38.
Cash provided by operating activities increased 13.1% to $1,599.0 million.
Segment Results
Domestic Rental and Management Segment – Domestic rental and management segment revenue increased 12.8% to $2,189.4 million, which represented 65% of total revenues. Domestic rental and management segment Gross Margin increased 12.7% to 1,783.9 million, while domestic rental and management segment Operating Profit increased 12.2% to $1,680.0 million. Domestic rental and management segment Operating Profit Margin was 77%.
International Rental and Management Segment – International rental and management segment revenue increased 27.2% to $1,097.7 million, which represented 33% of total revenues. International rental and management segment Gross Margin increased 27.1% to $697.6 million, while international rental and management segment Operating Profit increased 26.7% to $574.3 million. International rental and management segment Operating Profit Margin was 52% (72%, excluding the impact of $295.5 million of pass-through revenues).
Network Development Services Segment – Network development services segment revenue was $74.3 million, which represented 2% of total revenues. Network development services segment Gross Margin was $43.8 million, and network development services segment Operating Profit was $34.5 million. Network development services segment Operating Profit Margin was 46%.
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Please refer to “Non-GAAP and Defined Financial Measures” on pages 5 and 6 for definitions of Gross Margin, Operating Profit, Operating Profit Margin, Adjusted EBITDA, Adjusted EBITDA Margin, NAREIT Funds From Operations, Adjusted Funds From Operations, Adjusted Funds From Operations per Share, Core Growth, Organic Core Growth, New Property Core Growth and Net Leverage Ratio. For additional financial information, including reconciliations to GAAP measures, please refer to the unaudited selected financial information on pages 11 through 15.
INVESTING OVERVIEW
Distributions – On December 31, 2013, the Company paid its fourth quarter distribution of $0.29 per share, or a total of approximately $114.5 million, to stockholders of record at the close of business on December 16, 2013.
During the twelve months ended December 31, 2013, the Company declared an aggregate of $1.10 per share in distributions, or a total of approximately $434.5 million, to its stockholders. Subject to the discretion of the Company’s Board of Directors, the Company expects to continue paying regular distributions, the amount and timing of which will be determined by the Board.
Cash Paid for Capital Expenditures – During the fourth quarter of 2013, total capital expenditures of $276.3 million included $170.8 million for discretionary capital projects, including spending to complete the construction of 126 towers and the installation of 5 distributed antenna system networks and 448 shared generators domestically and the construction of 878 towers and the installation of 20 distributed antenna system networks internationally; $29.3 million to purchase land under the Company’s communications sites; $4.5 million for start-up capital projects in recently launched markets; $45.7 million for the redevelopment of existing communications sites to accommodate new tenant equipment; and $25.9 million for capital improvements and corporate capital expenditures.
During the twelve months ended December 31, 2013, total capital expenditures of $724.5 million included $381.6 million for discretionary capital projects, including spending to complete the construction of 318 towers and the installation of 13 distributed antenna system networks and 1,306 shared generators domestically and the construction of 1,991 towers and the installation of 48 distributed antenna system networks internationally; $83.8 million to purchase land under the Company’s communications sites; $26.7 million for start-up capital projects in recently launched markets; $120.8 million for the redevelopment of existing communications sites to accommodate new tenant equipment; and $111.6 million for capital improvements and corporate capital expenditures.
Cash Paid for Acquisitions – During the fourth quarter of 2013, the Company spent $4,096.1 million and assumed $1,576.2 million of debt for the purchase of 4,869 towers and 680 property interests under third-party communications sites domestically and 4,241 towers internationally. The international towers consisted of 2,178 towers in Brazil, 1,496 towers in Mexico, 456 towers in Costa Rica, 57 towers in Panama and 54 towers in South Africa.
During the twelve months ended December 31, 2013, the Company spent $4,461.8 million and assumed $1,576.2 million of debt for the purchase of 4,928 towers and 680 property interests under third-party communications sites domestically and 5,771 towers internationally.
Stock Repurchase Program – On September 6, 2013, the Company temporarily suspended its stock repurchases following the signing of its agreement to acquire MIP Tower Holdings LLC, the parent company of Global Tower Partners (GTP). Accordingly, during the fourth quarter of 2013, the Company did not repurchase any shares of its common stock.
During the twelve months ended December 31, 2013, the Company repurchased a total of approximately 1.9 million shares of its common stock for approximately $145.0 million pursuant to its stock repurchase program.
FINANCING OVERVIEW
Leverage – For the quarter ended December 31, 2013, the Company’s Net Leverage Ratio was approximately 5.9x net debt (total debt less cash and cash equivalents) to fourth quarter 2013 annualized Adjusted EBITDA.
Liquidity – As of December 31, 2013, the Company had approximately $2.3 billion of total liquidity, comprised of approximately $0.3 billion in cash and cash equivalents, plus the ability to borrow an aggregate of approximately $2.0 billion under its revolving credit facilities, net of any outstanding letters of credit.
Recent Financing Activities– Since the beginning of the fourth quarter of 2013, the Company has completed the following financing-related activities:
| • | Refinanced its $750 million 2012 term loan with a new $1.5 billion 2013 term loan, which extended the maturity to January 3, 2019 and reduced the drawn spread by 50 basis points to LIBOR plus 1.25%; |
| • | Entered into a 5.2 billion Mexican Peso (MXN) denominated loan, of which 4.9 billion MXN (approximately $374.7 million) was drawn to fund the initial purchase of sites from NII Holdings, Inc. in Mexico; and |
| • | Completed a reopening of $250 million of its 3.40% senior notes due 2019 and $500 million of its 5.00% senior notes due 2024. |
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FULL YEAR 2014 OUTLOOK
The following estimates are based on a number of assumptions that management believes to be reasonable and reflect the Company’s expectations as of February 25, 2014. 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 the full year 2014: (a) 2.40 Brazilian Reais; (b) 550.00 Chilean Pesos; (c) 2,000.00 Colombian Pesos; (d) 0.76 Euros; (e) 2.65 Ghanaian Cedi; (f) 63.00 Indian Rupees; (g) 13.30 Mexican Pesos; (h) 2.85 Peruvian Soles; (i) 11.00 South African Rand; and (j) 2,500.00 Ugandan Schillings.
A 5% fluctuation in average foreign currency exchange rates for the full year 2014 versus the rates assumed in the Company’s 2014 outlook would result in an impact of approximately $60 million in revenues, approximately $30 million in Adjusted EBITDA and approximately $25 million in AFFO, relative to the midpoints of the Company’s 2014 outlook.
| ($ in millions) | Full Year 2014 | Midpoint Growth | Midpoint Core Growth | |||||||||||||||
Total rental and management revenue | $ | 3,820 | to | $ | 3,910 | 17.6 | % | 23.2 | % | |||||||||
Adjusted EBITDA (1) | 2,500 | to | 2,560 | 16.2 | % | 22.3 | % | |||||||||||
Adjusted Funds From Operations (1) | 1,680 | to | 1,740 | 16.4 | % | 20.6 | % | |||||||||||
Net Income | 765 | to | 805 | 62.8 | % | N/A | ||||||||||||
| (1) | See “Non-GAAP and Defined Financial Measures” below. |
The Company’s outlook for total rental and management revenue reflects the following at the midpoint: (1) domestic rental and management segment revenue of $2,570 million; and (2) international rental and management segment revenue of $1,295 million, which includes approximately $328 million of pass-through revenue.
The calculation of midpoint Core Growth is as follows:
| (Totals may not add due to rounding.) | Total Rental and Management Revenue | Adjusted EBITDA | AFFO | |||||||||
Outlook midpoint Core Growth | 23.2 | % | 22.3 | % | 20.6 | % | ||||||
Estimated impact of fluctuations in foreign currency exchange rates | (3.5 | )% | (2.8 | )% | (3.5 | )% | ||||||
Impact of straight-line revenue and expense recognition | (2.0 | )% | (3.1 | )% | — | |||||||
Impact of significant one-time items | — | % | (0.1 | )% | (0.7 | )% | ||||||
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Outlook midpoint growth | 17.6 | % | 16.2 | % | 16.4 | % | ||||||
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Outlook for Capital Expenditures:
($ in millions)
| (Totals may not add due to rounding.) | Full Year 2014 | |||||||||
Discretionary capital projects (1) | $ | 415 | to | $ | 475 | |||||
Ground lease purchases | 105 | to | 115 | |||||||
Start-up capital projects | 40 | to | 50 | |||||||
Redevelopment | 170 | to | 180 | |||||||
Capital improvement (2) | 100 | to | 110 | |||||||
Corporate | 20 | — | 20 | |||||||
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Total | $ | 850 | to | $ | 950 | |||||
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| (1) | Includes the construction of approximately 2,250 to 2,750 new communications sites. |
| (2) | Includes spending related to a lighting and monitoring system upgrade in the U.S. of approximately $15 million. |
Reconciliations of Outlook for Net Income to Adjusted EBITDA:
($ in millions)
| (Totals may not add due to rounding.) | Full Year 2014 | |||||||||
Net income | $ | 765 | to | $ | 805 | |||||
Interest expense | 597 | to | 580 | |||||||
Depreciation, amortization and accretion | 965 | to | 985 | |||||||
Income tax provision | 63 | to | 74 | |||||||
Stock-based compensation expense | 80 | — | 80 | |||||||
Other, including other operating expenses, interest income, loss on retirement of long-term obligations, income (loss) on equity method investments and other income (expense) | 30 | to | 36 | |||||||
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Adjusted EBITDA | $ | 2,500 | to | $ | 2,560 | |||||
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Reconciliations of Outlook for Net Income to Adjusted Funds From Operations:
($ in millions)
| (Totals may not add due to rounding.) | Full Year 2014 | |||||||||
Net income | $ | 765 | to | $ | 805 | |||||
Straight-line revenue | (114 | ) | — | (114 | ) | |||||
Straight-line expense | 41 | — | 41 | |||||||
Depreciation, amortization and accretion | 965 | to | 985 | |||||||
Stock-based compensation expense | 80 | — | 80 | |||||||
Non-cash portion of tax provision | (5 | ) | to | 1 | ||||||
Other, including other operating expenses, interest expense, amortization of deferred financing costs, capitalized interest, debt discounts and premiums, loss on retirement of long-term obligations, other income (expense) and non-cash interest related to joint venture shareholder loans | 68 | to | 72 | |||||||
Capital improvement capital expenditures | (100 | ) | to | (110 | ) | |||||
Corporate capital expenditures | (20 | ) | — | (20 | ) | |||||
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Adjusted Funds From Operations | $ | 1,680 | to | $ | 1,740 | |||||
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Conference Call Information
American Tower will host a conference call today at 8:30 a.m. ET to discuss its financial results for the fourth quarter and full year ended December 31, 2013 and its outlook for 2014. 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: (866) 740-9153
International dial-in: (706) 645-9644
Passcode: 36538581
When available, a replay of the call can be accessed until 11:59 p.m. ET on March 6, 2014. The replay dial-in numbers are as follows:
U.S./Canada dial-in: (855) 859-2056
International dial-in: (404) 537-3406
Passcode: 36538581
American Tower will also sponsor a live simulcast and replay of the call on its website,www.americantower.com.
About American Tower
American Tower is a leading independent owner, operator and developer of wireless and broadcast communications real estate. American Tower currently owns and operates over 67,000 communications sites in the United States, Brazil, Chile, Colombia, Costa Rica, Germany, Ghana, India, Mexico, Panama, Peru, South Africa and Uganda. For more information about American Tower, please visitwww.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, Adjusted Funds From Operations, Adjusted Funds From Operations per Share, Core Growth, Organic Core Growth, New Property Core Growth and Net Leverage Ratio. The Company uses Funds From Operations as defined by the National Association of Real Estate Investment Trusts (NAREIT), referred to herein as NAREIT Funds From Operations.
The Company defines Gross Margin as revenues less operating expenses, excluding stock-based compensation expense recorded in costs of operations, depreciation, amortization and accretion, selling, general, administrative and development expense, and other operating expenses. The Company defines Operating Profit as Gross Margin less selling, general, administrative and development expense, excluding stock-based compensation expense and corporate expenses. For reporting purposes, the international rental and management segment Operating Profit and Gross Margin also include interest income, TV Azteca, net. These measures of Gross Margin and Operating Profit are also before interest income, interest expense, loss on retirement of long-term obligations, other (expense) income, net income (loss) attributable to non-controlling interest, income (loss) on equity method investments and income taxes. The Company defines Operating Profit Margin as the percentage that results from dividing Operating Profit by revenue. The Company defines Adjusted EBITDA as net income before income (loss) from discontinued operations, net, income (loss) from equity method investments, income tax provision (benefit), other income (expense), loss on retirement of long-term obligations, interest expense, interest income, other operating income (expense), depreciation, amortization and accretion and stock-based compensation expense. The Company defines Adjusted EBITDA Margin as the percentage that results from dividing Adjusted EBITDA by total revenue. NAREIT Funds From Operations is defined as net income before gains or losses from the sale or disposal of real estate, real estate related impairment charges and real estate related depreciation, amortization and accretion, and including adjustments for (i) unconsolidated affiliates and (ii) noncontrolling interest. The Company defines Adjusted Funds From Operations as NAREIT Funds From Operations before (i) straight-line revenue and expense, (ii) stock-based compensation expense, (iii) the non-cash portion of our tax provision, (iv) non-real estate related depreciation, amortization and accretion, (v) amortization of deferred financing costs, capitalized interest, debt discounts and premiums
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and long-term deferred interest, (vi) other income (expense), (vii) loss on retirement of long-term obligations, (viii) other operating income (expense), and adjusted for (ix) unconsolidated affiliates, and (x) noncontrolling interest, less cash payments related to capital improvements and cash payments related to corporate capital expenditures. The Company defines Adjusted Funds From Operations per Share as Adjusted Funds From Operations divided by the diluted weighted average common shares outstanding. The Company defines Core Growth in total rental and management revenue, Adjusted EBITDA and Adjusted Funds From Operations as the increase or decrease, expressed as a percentage, resulting from a comparison of financial results for a current period with corresponding financial results for the corresponding period in a prior year, in each case, excluding the impact of straight-line revenue and expense recognition, foreign currency exchange rate fluctuations and significant one-time items. The Company defines Organic Core Growth in rental and management revenue as the increase or decrease, expressed as a percentage, resulting from a comparison of financial results for a current period with corresponding financial results for the corresponding period in a prior year, in each case, excluding the impact of straight-line revenue and expense recognition, foreign currency exchange rate fluctuations, significant one-time items and revenue associated with new properties that the Company has added to the portfolio since the beginning of the prior period. The Company defines New Property Core Growth in rental and management revenue as the increase or decrease, expressed as a percentage, on the properties the Company has added to its portfolio since the beginning of the prior period, in each case, excluding the impact of straight-line revenue and expense recognition, foreign currency exchange rate fluctuations and significant one-time items. The Company defines Net Leverage Ratio as net debt (total debt, less cash and cash equivalents) divided by last quarter annualized Adjusted EBITDA. 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. The Company believes that these measures can assist in comparing company performances on a consistent basis irrespective of depreciation and amortization or capital structure. Depreciation and amortization can vary significantly among companies depending on accounting methods, particularly where acquisitions or non-operating factors, including historical cost bases, are involved. Notwithstanding the foregoing, the Company’s measures of Gross Margin, Operating Profit, Operating Profit Margin, Adjusted EBITDA, Adjusted EBITDA Margin, NAREIT Funds From Operations, Adjusted Funds From Operations, Adjusted Funds From Operations per Share, Core Growth, Organic Core Growth, New Property Core Growth and Net Leverage Ratio may not be comparable to similarly titled measures used by other companies.
Cautionary Language Regarding Forward-Looking Statements
This press release contains “forward-looking statements” concerning our goals, beliefs, expectations, strategies, objectives, plans, future operating results and underlying assumptions, and other statements that are not necessarily based on historical facts. Examples of these statements include, but are not limited to statements regarding our full year 2014 outlook, foreign currency exchange rates and our expectation regarding the declaration of regular distributions. Actual results may differ materially from those indicated in our forward-looking statements as a result of various important factors, including: (1) decrease in demand for our communications sites would materially and adversely affect our operating results, and we cannot control that demand; (2) if our tenants share site infrastructure to a significant degree or consolidate or merge, our growth, revenue and ability to generate positive cash flows could be materially and adversely affected; (3) our business is subject to government regulations and changes in current or future laws or regulations could restrict our ability to operate our business as we currently do; (4) our leverage and debt service obligations may materially and adversely affect us; (5) increasing competition in the tower industry may materially and adversely affect us; (6) our expansion initiatives involve a number of risks and uncertainties that could adversely affect our operating results, disrupt our operations or expose us to additional risk if we are not able to successfully integrate operations, assets and personnel; (7) our foreign operations are subject to economic, political and other risks that could materially and adversely affect our revenues or financial position, including risks associated with fluctuations in foreign currency exchange rates; (8) a substantial portion of our revenue is derived from a small number of tenants, and we are sensitive to changes in the creditworthiness and financial strength of our tenants; (9) we may fail to realize the growth prospects and cost savings anticipated as a result of, and will incur significant transaction and acquisition-related integration costs in connection with, our acquisition of GTP; (10) new technologies or changes in a tenant’s business model could make our tower leasing business less desirable and result in decreasing revenues; (11) if we fail to remain qualified as a REIT, we will be subject to tax at corporate income tax rates, which may substantially reduce funds otherwise available; (12) we may be limited in our ability to fund required distributions using cash generated through our TRSs; (13) complying with REIT requirements may limit our flexibility or cause us to forego otherwise attractive opportunities; (14) certain of our business activities may be subject to corporate level income tax and foreign taxes, which reduce our cash flows, and may create deferred and contingent tax liabilities; (15) we may need additional financing to fund capital expenditures, future growth and expansion initiatives and to satisfy our REIT distribution requirements; (16) if we are unable to protect our rights to the land under our towers, it could adversely affect our business and operating results; (17) if we are unable or choose not to exercise our rights to purchase towers that are subject to lease and sublease agreements at the end of the applicable period, our cash flows derived from such towers will be eliminated; (18) restrictive covenants in the agreements related to our securitization transactions, our credit facilities and our debt securities could materially and adversely affect our business by limiting flexibility; (19) we may incur goodwill and other intangible asset impairment charges, which could result in a significant reduction to our earnings; (20) our costs could increase and our revenues could decrease due to perceived health risks from radio emissions, especially if these perceived risks are substantiated; (21) we could have liability under environmental and occupational safety and health laws; and (22) our towers or data centers may be affected by natural disasters and other unforeseen events for which our insurance may not provide adequate coverage. For additional information regarding factors that may cause actual results to differ materially from those indicated in our forward-looking statements, we refer you to the information contained in Item 1A of our Form 10-Q for the quarter ended September 30, 2013. We undertake no obligation to update the information contained in this press release to reflect subsequently occurring events or circumstances.
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UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands)
| December 31, 2013 | December 31, 2012(1) | |||||||
ASSETS | ||||||||
CURRENT ASSETS: | ||||||||
Cash and cash equivalents | $ | 293,576 | $ | 368,618 | ||||
Restricted cash | 152,916 | 69,316 | ||||||
Short-term investments | 18,612 | 6,018 | ||||||
Accounts receivable, net | 151,084 | 143,562 | ||||||
Prepaid and other current assets | 314,067 | 222,999 | ||||||
Deferred income taxes | 22,401 | 25,754 | ||||||
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Total current assets | 952,656 | 836,267 | ||||||
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Property and equipment, net | 7,262,175 | 5,765,856 | ||||||
Goodwill | 3,729,901 | 2,842,643 | ||||||
Other intangible assets, net | 6,701,459 | 3,206,085 | ||||||
Deferred income taxes | 262,529 | 209,589 | ||||||
Deferred rent asset | 918,847 | 776,201 | ||||||
Notes receivable and other non-current assets | 445,004 | 452,788 | ||||||
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TOTAL | $ | 20,272,571 | $ | 14,089,429 | ||||
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LIABILITIES AND EQUITY | ||||||||
CURRENT LIABILITIES: | ||||||||
Accounts payable | $ | 171,050 | $ | 89,578 | ||||
Accrued expenses | 415,324 | 286,962 | ||||||
Distributions payable | 575 | 189 | ||||||
Accrued interest | 105,751 | 71,271 | ||||||
Current portion of long-term obligations | 70,132 | 60,031 | ||||||
Unearned revenue | 161,926 | 124,147 | ||||||
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Total current liabilities | 924,758 | 632,178 | ||||||
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Long-term obligations | 14,408,146 | 8,693,345 | ||||||
Asset retirement obligations | 526,869 | 435,624 | ||||||
Other non-current liabilities | 822,758 | 644,101 | ||||||
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Total liabilities | 16,682,531 | 10,405,248 | ||||||
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COMMITMENTS AND CONTINGENCIES | ||||||||
EQUITY: | ||||||||
Common stock | 3,976 | 3,959 | ||||||
Additional paid-in capital | 5,130,616 | 5,012,124 | ||||||
Distributions in excess of earnings | (1,081,467 | ) | (1,196,907 | ) | ||||
Accumulated other comprehensive loss | (311,220 | ) | (183,347 | ) | ||||
Treasury stock | (207,740 | ) | (62,728 | ) | ||||
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Total American Tower Corporation equity | 3,534,165 | 3,573,101 | ||||||
Noncontrolling interest | 55,875 | 111,080 | ||||||
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Total equity | 3,590,040 | 3,684,181 | ||||||
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TOTAL | $ | 20,272,571 | $ | 14,089,429 | ||||
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| (1) | December 31, 2012 balances have been revised to reflect purchase accounting measurement period adjustments. |
7
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except per share data)
| Three Months Ended | Twelve Months Ended | |||||||||||||||
| December 31, | December 31 | |||||||||||||||
| 2013 | 2012 | 2013 | 2012 | |||||||||||||
REVENUES: | ||||||||||||||||
Rental and management | $ | 923,883 | $ | 739,684 | $ | 3,287,090 | $ | 2,803,490 | ||||||||
Network development services | 18,086 | 28,690 | 74,317 | 72,470 | ||||||||||||
|
|
|
|
|
|
|
| |||||||||
Total operating revenues | 941,969 | 768,374 | 3,361,407 | 2,875,960 | ||||||||||||
|
|
|
|
|
|
|
| |||||||||
OPERATING EXPENSES: | ||||||||||||||||
Costs of operations (exclusive of items shown separately below): | ||||||||||||||||
Rental and management (including stock-based compensation expense of $226, $199, $977 and $793, respectively) | 243,277 | 180,561 | 828,742 | 686,681 | ||||||||||||
Network development services (including stock-based compensation expense of $127, $219, $567 and $968, respectively) | 8,292 | 13,645 | 31,131 | 35,798 | ||||||||||||
Depreciation, amortization and accretion | 244,811 | 178,488 | 800,145 | 644,276 | ||||||||||||
Selling, general, administrative and development expense (including stock-based compensation expense of $14,630, $11,911 $66,594 and $50,222, respectively) | 116,808 | 89,410 | 415,545 | 327,301 | ||||||||||||
Other operating expenses | 35,853 | 27,035 | 71,539 | 62,185 | ||||||||||||
|
|
|
|
|
|
|
| |||||||||
Total operating expenses | 649,041 | 489,139 | 2,147,102 | 1,756,241 | ||||||||||||
|
|
|
|
|
|
|
| |||||||||
OPERATING INCOME | 292,928 | 279,235 | 1,214,305 | 1,119,719 | ||||||||||||
|
|
|
|
|
|
|
| |||||||||
OTHER INCOME (EXPENSE): | ||||||||||||||||
Interest income, TV Azteca, net | 11,562 | 3,543 | 22,235 | 14,258 | ||||||||||||
Interest income | 4,238 | 1,427 | 9,706 | 7,680 | ||||||||||||
Interest expense | (139,380 | ) | (104,043 | ) | (458,296 | ) | (401,665 | ) | ||||||||
Loss on retirement of long-term obligations | (734 | ) | — | (38,701 | ) | (398 | ) | |||||||||
Other expense (including unrealized foreign currency losses of $60,049, $21,483, $211,722 and $34,330, respectively) | (58,509 | ) | (18,832 | ) | (207,500 | ) | (38,300 | ) | ||||||||
|
|
|
|
|
|
|
| |||||||||
Total other expense | (182,823 | ) | (117,905 | ) | (672,556 | ) | (418,425 | ) | ||||||||
|
|
|
|
|
|
|
| |||||||||
INCOME FROM CONTINUING OPERATIONS BEFORE INCOME TAXES AND INCOME ON EQUITY METHOD INVESTMENTS | 110,105 | 161,330 | 541,749 | 701,294 | ||||||||||||
Income tax provision | (36,180 | ) | (43,187 | ) | (59,541 | ) | (107,304 | ) | ||||||||
Income on equity method investments | — | 10 | — | 35 | ||||||||||||
|
|
|
|
|
|
|
| |||||||||
NET INCOME | 73,925 | 118,153 | 482,208 | 594,025 | ||||||||||||
Net loss attributable to noncontrolling interest | 26,057 | 17,526 | 69,125 | 43,258 | ||||||||||||
|
|
|
|
|
|
|
| |||||||||
NET INCOME ATTRIBUTABLE TO AMERICAN TOWER CORPORATION | $ | 99,982 | $ | 135,679 | $ | 551,333 | $ | 637,283 | ||||||||
|
|
|
|
|
|
|
| |||||||||
NET INCOME PER COMMON SHARE AMOUNTS: | ||||||||||||||||
Basic net income attributable to American Tower Corporation | $ | 0.25 | $ | 0.34 | $ | 1.40 | $ | 1.61 | ||||||||
|
|
|
|
|
|
|
| |||||||||
Diluted net income attributable to American Tower Corporation | $ | 0.25 | $ | 0.34 | $ | 1.38 | $ | 1.60 | ||||||||
|
|
|
|
|
|
|
| |||||||||
WEIGHTED AVERAGE COMMON SHARES OUTSTANDING: | ||||||||||||||||
BASIC | 394,751 | 395,195 | 395,040 | 394,772 | ||||||||||||
|
|
|
|
|
|
|
| |||||||||
DILUTED | 398,609 | 399,625 | 399,146 | 399,287 | ||||||||||||
|
|
|
|
|
|
|
| |||||||||
8
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)
| Twelve Months Ended December 31, | ||||||||
| 2013 | 2012 | |||||||
CASH FLOWS FROM OPERATING ACTIVITIES: | ||||||||
Net income | $ | 482,208 | $ | 594,025 | ||||
Adjustments to reconcile net income to cash provided by operating activities: | ||||||||
Stock-based compensation expense | 68,138 | 51,983 | ||||||
Depreciation, amortization and accretion | 800,145 | 644,276 | ||||||
Loss on early retirement of securitized debt | 35,288 | — | ||||||
Other non-cash items reflected in statements of operations | 231,764 | 130,517 | ||||||
Increase in net deferred rent asset | (115,443 | ) | (130,512 | ) | ||||
Increase in restricted cash | (52,717 | ) | (26,500 | ) | ||||
(Increase) decrease in assets | (115,118 | ) | 40,961 | |||||
Increase in liabilities | 264,782 | 109,641 | ||||||
|
|
|
| |||||
Cash provided by operating activities | 1,599,047 | 1,414,391 | ||||||
|
|
|
| |||||
CASH FLOWS FROM INVESTING ACTIVITIES: | ||||||||
Payments for purchase of property and equipment and construction activities | (724,532 | ) | (568,048 | ) | ||||
Payments for acquisitions, net of cash acquired | (4,461,764 | ) | (1,997,955 | ) | ||||
Proceeds from sale of short-term investments, available-for-sale securities and other non-current assets | 421,714 | 374,682 | ||||||
Payment for short-term investments | (427,267 | ) | (352,306 | ) | ||||
Deposits, restricted cash, investments and other | 18,512 | (14,758 | ) | |||||
|
|
|
| |||||
Cash used in investing activities | (5,173,337 | ) | (2,558,385 | ) | ||||
|
|
|
| |||||
CASH FLOWS FROM FINANCING ACTIVITIES: | ||||||||
Proceeds from (repayments of) short-term borrowings, net | 8,191 | (55,264 | ) | |||||
Borrowings under credit facilities | 3,507,000 | 2,582,000 | ||||||
Proceeds from issuance of senior notes, net | 2,221,792 | 698,670 | ||||||
Proceeds from term loan credit facility | 1,500,000 | 750,000 | ||||||
Proceeds from other long-term borrowings | 402,688 | 177,299 | ||||||
Proceeds from issuance of securities in securitization transaction, net | 1,778,496 | — | ||||||
Repayments of notes payable, credit facilities and capital leases | (5,337,339 | ) | (2,658,566 | ) | ||||
Contributions from noncontrolling interest holders, net | 17,447 | 52,761 | ||||||
Purchases of common stock | (145,012 | ) | (62,728 | ) | ||||
Proceeds from stock options and Stock Purchase Plan | 45,496 | 55,441 | ||||||
Distributions | (434,687 | ) | (355,574 | ) | ||||
Payment for early retirement of securitized debt | (29,234 | ) | — | |||||
Deferred financing costs and other financing activities | (9,273 | ) | (13,673 | ) | ||||
|
|
|
| |||||
Cash provided by financing activities | 3,525,565 | 1,170,366 | ||||||
|
|
|
| |||||
Net effect of changes in foreign currency exchange rates on cash and cash equivalents | (26,317 | ) | 12,055 | |||||
NET (DECREASE) INCREASE IN CASH AND CASH EQUIVALENTS | (75,042 | ) | 38,427 | |||||
|
|
|
| |||||
CASH AND CASH EQUIVALENTS, BEGINNING OF YEAR | 368,618 | 330,191 | ||||||
|
|
|
| |||||
CASH AND CASH EQUIVALENTS, END OF YEAR | $ | 293,576 | $ | 368,618 | ||||
|
|
|
| |||||
CASH PAID FOR INCOME TAXES, NET | $ | 51,676 | $ | 69,277 | ||||
|
|
|
| |||||
CASH PAID FOR INTEREST | $ | 397,366 | $ | 366,458 | ||||
|
|
|
| |||||
9
UNAUDITED RESULTS FROM OPERATIONS, BY SEGMENT
(In thousands, except percentages)
Three months ended December 31, 2013 | ||||||||||||||||||||
| Rental and Management | Network Development Services | Total | ||||||||||||||||||
| Domestic | International | Total | ||||||||||||||||||
Segment revenues | $ | 622,705 | $ | 301,178 | $ | 923,883 | $ | 18,086 | $ | 941,969 | ||||||||||
Segment operating expenses (1) | 123,146 | 119,905 | 243,051 | 8,165 | 251,216 | |||||||||||||||
Interest income, TV Azteca, net (2) | — | 11,562 | 11,562 | — | 11,562 | |||||||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
Segment Gross Margin | 499,559 | 192,835 | 692,394 | 9,921 | 702,315 | |||||||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
Segment selling, general, administrative and development expense (1) | 32,325 | 29,585 | 61,910 | 2,152 | 64,062 | |||||||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
Segment Operating Profit | $ | 467,234 | $ | 163,250 | $ | 630,484 | $ | 7,769 | $ | 638,253 | ||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
Segment Operating Profit Margin | 75 | % | 54 | % | 68 | % | 43 | % | 68 | % | ||||||||||
Three months ended December 31, 2013 | ||||||||||||||||||||
| Rental and Management | Network Development Services | Total | ||||||||||||||||||
| Domestic | International | Total | ||||||||||||||||||
Segment revenues | $ | 499,865 | $ | 239,819 | $ | 739,684 | $ | 28,690 | $ | 768,374 | ||||||||||
Segment operating expenses (1) | 84,367 | 95,995 | 180,362 | 13,426 | 193,788 | |||||||||||||||
Interest income, TV Azteca, net | — | 3,543 | 3,543 | — | 3,543 | |||||||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
Segment Gross Margin | 415,498 | 147,367 | 562,865 | 15,264 | 578,129 | |||||||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
Segment selling, general, administrative and development expense (1) | 25,025 | 27,146 | 52,171 | 2,334 | 54,505 | |||||||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
Segment Operating Profit | $ | 390,473 | $ | 120,221 | $ | 510,694 | $ | 12,930 | $ | 523,624 | ||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
Segment Operating Profit Margin | 78 | % | 50 | % | 69 | % | 45 | % | 68 | % | ||||||||||
Twelve months ended December 31, 2013 | ||||||||||||||||||||
| Rental and Management | Network Development Services | Total | ||||||||||||||||||
| Domestic | International | Total | ||||||||||||||||||
Segment revenues | $ | 2,189,365 | $ | 1,097,725 | $ | 3,287,090 | $ | 74,317 | $ | 3,361,407 | ||||||||||
Segment operating expenses (1) | 405,419 | 422,346 | 827,765 | 30,564 | 858,329 | |||||||||||||||
Interest income, TV Azteca, net (2) | — | 22,235 | 22,235 | — | 22,235 | |||||||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
Segment Gross Margin | 1,783,946 | 697,614 | 2,481,560 | 43,753 | 2,525,313 | |||||||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
Segment selling, general, administrative and development expense (1) | 103,989 | 123,338 | 227,327 | 9,257 | 236,584 | |||||||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
Segment Operating Profit | $ | 1,679,957 | $ | 574,276 | $ | 2,254,233 | $ | 34,496 | $ | 2,288,729 | ||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
Segment Operating Profit Margin | 77 | % | 52 | % | 69 | % | 46 | % | 68 | % | ||||||||||
Twelve months ended December 31, 2013 | ||||||||||||||||||||
| Rental and Management | Network Development Services | Total | ||||||||||||||||||
| Domestic | International | Total | ||||||||||||||||||
Segment revenues | $ | 1,940,689 | $ | 862,801 | $ | 2,803,490 | $ | 72,470 | $ | 2,875,960 | ||||||||||
Segment operating expenses (1) | 357,555 | 328,333 | 685,888 | 34,830 | 720,718 | |||||||||||||||
Interest income, TV Azteca, net | — | 14,258 | 14,258 | — | 14,258 | |||||||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
Segment Gross Margin | 1,583,134 | 548,726 | 2,131,860 | 37,640 | 2,169,500 | |||||||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
Segment selling, general, administrative and development expense (1) | 85,663 | 95,579 | 181,242 | 6,744 | 187,986 | |||||||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
Segment Operating Profit | $ | 1,497,471 | $ | 453,147 | $ | 1,950,618 | $ | 30,896 | $ | 1,981,514 | ||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
Segment Operating Profit Margin | 77 | % | 53 | % | 70 | % | 43 | % | 69 | % | ||||||||||
| (1) | Excludes stock-based compensation expense. |
| (2) | Includes approximately $8.0 million of interest income received in connection with a partial loan prepayment by TV Azteca. |
10
UNAUDITED SELECTED FINANCIAL INFORMATION
(In thousands, except where noted. Totals may not add due to rounding.)
SELECTED BALANCE SHEET DETAIL:
| Long-term obligations summary, including current portion | December 31, 2013 | Pro Forma December 31, 2013 (1) | ||||||
2012 Credit Facility (1) | $ | 88,000 | $ | — | ||||
2013 Credit Facility (1) | 1,853,000 | 1,143,000 | ||||||
2013 Term Loan | 1,500,000 | 1,500,000 | ||||||
4.625% Senior Notes due 2015 | 599,794 | 599,794 | ||||||
7.000% Senior Notes due 2017 | 500,000 | 500,000 | ||||||
4.500% Senior Notes due 2018 | 999,520 | 999,520 | ||||||
3.400% Senior Notes due 2019 (1) | 749,373 | 999,373 | ||||||
7.250% Senior Notes due 2019 | 296,748 | 296,748 | ||||||
5.050% Senior Notes due 2020 | 699,413 | 699,413 | ||||||
5.900% Senior Notes due 2021 | 499,414 | 499,414 | ||||||
4.700% Senior Notes due 2022 | 698,871 | 698,871 | ||||||
3.500% Senior Notes due 2023 | 992,520 | 992,520 | ||||||
5.000% Senior Notes due 2024 (1) | 499,455 | 999,455 | ||||||
|
|
|
| |||||
Total unsecured at American Tower Corporation | 9,976,108 | 9,928,108 | ||||||
|
|
|
| |||||
Secured Tower Revenue Securities, Series 2013-1A | 500,000 | 500,000 | ||||||
Secured Tower Revenue Securities, Series 2013-2A | 1,300,000 | 1,300,000 | ||||||
GTP Notes (2) | 1,537,881 | 1,537,881 | ||||||
Unison Notes (3) | 205,436 | 205,436 | ||||||
South African Facility (4) | 88,334 | 88,334 | ||||||
Colombian Long-Term Credit Facility (4) | 70,063 | 70,063 | ||||||
Colombian Bridge Loans (4) | 56,058 | 56,058 | ||||||
Mexican Loan (4) | 377,470 | 377,470 | ||||||
Costa Rica Loan (1) (5) | 32,600 | — | ||||||
Shareholder loans (5) (6) | 260,950 | 260,950 | ||||||
Capital leases | 73,378 | 73,378 | ||||||
|
|
|
| |||||
Total secured or subsidiary debt | 4,502,170 | 4,469,570 | ||||||
|
|
|
| |||||
Total debt | $ | 14,478,278 | $ | 14,397,678 | ||||
|
|
|
| |||||
Cash and cash equivalents | 293,576 | |||||||
|
| |||||||
Net debt (total debt less cash and cash equivalents) | $ | 14,184,702 | ||||||
|
| |||||||
| (1) | Subsequent to the end of the fourth quarter of 2013, the Company (a) completed a registered public offering of $250.0 million principal amount of reopened 3.40% notes and $500.0 million principal amount of reopened 5.00% notes, the net proceeds of which, together with cash on hand, were used to repay $88.0 million of indebtedness under the 2012 Credit Facility, $710.0 million under the 2013 Credit Facility and the Costa Rica Loan. |
| (2) | The GTP Notes are secured debt and were assumed as a result of the acquisition of GTP. |
| (3) | The Unison Notes are secured debt and were assumed as a result of the acquisition of certain legal entities holding a portfolio of property interests from Unison Holdings LLC and Unison Site Management II, L.L.C. |
| (4) | Denominated in local currency. |
| (5) | Denominated in USD. |
| (6) | Reflects balances attributable to minority shareholder loans in the Company’s joint ventures in Colombia, Ghana and Uganda. |
| Three Months Ended | ||||
| Calculation of Net Leverage Ratio($ in thousands) | December 31, 2013 | |||
Total debt | $ | 14,478,278 | ||
Cash and cash equivalents | 293,576 | |||
|
| |||
Numerator: net debt (total debt less cash and cash equivalents) | $ | 14,184,702 | ||
Adjusted EBITDA | $ | 600,137 | ||
Denominator: annualized Adjusted EBITDA | 2,400,548 | |||
|
| |||
Net Leverage Ratio | 5.9x | |||
|
| |||
11
UNAUDITED SELECTED FINANCIAL INFORMATION
(In thousands, except where noted. Totals may not add due to rounding.)
SELECTED BALANCE SHEET DETAIL (CONTINUED):
| Share count rollforward:(in millions of shares) | Three Months Ended December 31, 2013 | Twelve Months Ended December 31, 2013 | ||||||
Total common shares, beginning of period | 394.5 | 395.1 | ||||||
Common shares repurchased | — | (1.9 | ) | |||||
Common shares issued | 0.3 | 1.7 | ||||||
|
|
|
| |||||
Total common shares outstanding, end of period (1) | 394.9 | 394.9 | ||||||
|
|
|
| |||||
| (1) | As of December 31, 2013, excludes (a) 3.2 million potentially dilutive shares associated with vested and exercisable stock options with an average exercise price of $40.54 per share; (b) 2.9 million potentially dilutive shares associated with unvested stock options; and (c) 1.8 million potentially dilutive shares associated with unvested restricted stock units. |
SELECTED STATEMENT OF OPERATIONS DETAIL:
Total rental and management straight-line revenue and expense (1):
| Three Months Ended December 31, | Twelve Months Ended December 31, | |||||||||||||||
| 2013 | 2012 | 2013 | 2012 | |||||||||||||
Total rental and management operations straight-line revenue | $ | 41,696 | $ | 47,260 | $ | 147,664 | $ | 165,806 | ||||||||
Total rental and management operations straight-line expense | $ | 8,413 | $ | 7,553 | $ | 29,732 | $ | 33,700 | ||||||||
| (1) | In accordance with GAAP, the Company recognizes consolidated rental and management revenue and expense related to non-cancellable tenant and ground lease agreements with fixed escalations on a straight-line basis, over the applicable lease term. As a result, the Company’s revenue recognized may differ materially from the amount of cash collected per tenant lease, and the Company’s expense incurred may differ materially from the amount of cash paid per ground lease. Additional information regarding straight-line accounting can be found in the Company’s Annual Report on Form 10-K for the year ended December 31, 2012 in the section entitled “Revenue Recognition,” in note 1, “Business and Summary of Significant Accounting Policies” within the notes to the consolidated financial statements. The above table sets forth a summary of total rental and management straight-line revenue and expense, which represents the non-cash revenue and expense recorded due to straight-line recognition. |
| Three Months Ended December 31, | Twelve Months Ended December 31, | |||||||||||||||
| International pass-through revenue detail: | 2013 | 2012 | 2013 | 2012 | ||||||||||||
Pass-through revenue | $ | 83,337 | $ | 67,933 | $ | 295,547 | $ | 229,105 | ||||||||
| Three Months Ended December 31, | Twelve Months Ended December 31, | |||||||||||||||
| Prepaid rent detail (1): | 2013 | 2012 | 2013 | 2012 | ||||||||||||
Beginning balance | $ | 244,037 | $ | 198,574 | $ | 198,792 | $ | 156,678 | ||||||||
Cash | 101,064 | 11,132 | 189,057 | 85,000 | ||||||||||||
Amortization (2) | (18,924 | ) | (10,914 | ) | (61,672 | ) | (42,886 | ) | ||||||||
|
|
|
|
|
|
|
| |||||||||
Ending balance | $ | 326,177 | $ | 198,792 | $ | 326,177 | $ | 198,792 | ||||||||
|
|
|
|
|
|
|
| |||||||||
| (1) | Reflects capital contributions and prepayments associated with long-term tenant leases and amortization of recognized GAAP revenue associated with the leases corresponding to the capital contributions or prepayments. |
| (2) | Includes the impact of fluctuations in foreign currency exchange rates. |
| Three Months Ended December 31, | Twelve Months Ended December 31, | |||||||||||||||
| Selling, general, administrative and development expense breakout: | 2013 | 2012 | 2013 | 2012 | ||||||||||||
Total rental and management overhead | $ | 61,910 | $ | 52,171 | $ | 227,327 | $ | 181,242 | ||||||||
Network development services segment overhead | 2,152 | 2,334 | 9,257 | 6,744 | ||||||||||||
Corporate and development expenses (1) | 38,116 | 22,994 | 112,367 | 89,093 | ||||||||||||
Stock-based compensation expense | 14,630 | 11,911 | 66,594 | 50,222 | ||||||||||||
|
|
|
|
|
|
|
| |||||||||
Total | $ | 116,808 | $ | 89,410 | $ | 415,545 | $ | 327,301 | ||||||||
|
|
|
|
|
|
|
| |||||||||
| (1) | During the three months ended December 31, 2013, the Company incurred approximately $10.0 million of legal-related expenses. The Company expects to be reimbursed for substantially all of these expenses. However, the timing of such reimbursement is uncertain. |
12
UNAUDITED SELECTED FINANCIAL INFORMATION
($ in thousands. Totals may not add due to rounding.)
SELECTED STATEMENT OF OPERATIONS DETAIL (CONTINUED):
The following table reflects the estimated impact of foreign currency exchange rate fluctuations, straight-line revenue and expense recognition and material one-time items on total rental and management revenue, Adjusted EBITDA and AFFO:
The calculation of Core Growth is as follows:
| Three Months Ended December 31, 2013 | Total Rental and Management Revenue | Adjusted EBITDA | AFFO | |||||||||
Core Growth | 30.8 | % | 27.3 | % | 27.4 | % | ||||||
Estimated impact of fluctuations in foreign currency exchange rates | (3.3 | )% | (2.3 | )% | (2.8 | )% | ||||||
Impact of straight-line revenue recognition | (2.6 | )% | (3.1 | )% | — | |||||||
Impact of material one-time items | — | (1.9 | ) | 3.5 | % | |||||||
|
|
|
|
|
| |||||||
Reported growth | 24.9 | % | 19.9 | % | 28.1 | % | ||||||
| Twelve Months Ended December 31, 2013 | ||||||||||||
Core Growth | 22.1 | % | 19.8 | % | 23.1 | % | ||||||
Estimated impact of fluctuations in foreign currency exchange rates | (2.3 | )% | (1.6 | )% | (2.0 | )% | ||||||
Impact of straight-line revenue recognition | (1.8 | )% | (1.9 | )% | — | |||||||
Impact of material one-time items | (0.7 | )% | (1.2 | )% | (0.8 | )% | ||||||
|
|
|
|
|
| |||||||
Reported growth | 17.2 | % | 15.0 | % | 20.2 | % | ||||||
The components of Core Growth in total rental and management revenue are as follows:
| Three Months Ended December 31, | Twelve Months Ended December 31, | |||||||||||||||
| 2013 | 2012 | 2013 | 2012 | |||||||||||||
Organic Core Growth | 11.2 | % | 9.0 | % | 9.9 | % | 8.1 | % | ||||||||
New Property Core Growth | 19.6 | % | 10.3 | % | 12.2 | % | 13.0 | % | ||||||||
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Core Growth | 30.8 | % | 19.3 | % | 22.1 | % | 21.1 | % | ||||||||
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SELECTED CASH FLOW DETAIL:
| Three Months Ended December 31, | Twelve Months Ended December 31, | |||||||||||||||
| Payments for purchase of property and equipment and construction activities: | 2013 | 2012 | 2013 | 2012 | ||||||||||||
Discretionary - capital projects | $ | 170,772 | $ | 86,850 | $ | 381,632 | $ | 279,015 | ||||||||
Discretionary - ground lease purchases | 29,326 | 33,887 | 83,842 | 82,349 | ||||||||||||
Start-up capital projects | 4,527 | 5,621 | 26,660 | 24,537 | ||||||||||||
Redevelopment | 45,710 | 27,954 | 120,797 | 86,656 | ||||||||||||
Capital improvements | 20,170 | 30,856 | 81,218 | 75,444 | ||||||||||||
Corporate | 5,778 | 5,853 | 30,383 | 20,047 | ||||||||||||
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Total | $ | 276,283 | $ | 191,021 | $ | 724,532 | $ | 568,048 | ||||||||
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13
UNAUDITED SELECTED FINANCIAL INFORMATION
($ in thousands. Totals may not add due to rounding.)
SELECTED PORTFOLIO DETAIL – OWNED SITES:
| Tower Count (1): | As of September 30, 2013 | Constructed | Acquired | Adjustments | As of December 31, 2013 | |||||||||||||||
United States | 22,754 | 126 | 4,869 | (10 | ) | 27,739 | ||||||||||||||
Brazil | 4,511 | 57 | 2,178 | — | 6,746 | |||||||||||||||
Chile | 1,149 | 3 | — | (2 | ) | 1,150 | ||||||||||||||
Colombia | 3,429 | 65 | — | (33 | ) | 3,461 | ||||||||||||||
Costa Rica | — | — | 456 | — | 456 | |||||||||||||||
Germany | 2,031 | — | — | — | 2,031 | |||||||||||||||
Ghana | 1,954 | 26 | — | (11 | ) | 1,969 | ||||||||||||||
India | 10,959 | 625 | — | (55 | ) | 11,529 | ||||||||||||||
Mexico | 6,806 | 68 | 1,496 | (1 | ) | 8,369 | ||||||||||||||
Panama | — | — | 57 | — | 57 | |||||||||||||||
Peru | 499 | — | — | (1 | ) | 498 | ||||||||||||||
South Africa | 1,828 | 18 | 54 | — | 1,900 | |||||||||||||||
Uganda | 1,148 | 16 | — | — | 1,164 | |||||||||||||||
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Total | 57,068 | 1,004 | 9,110 | (113 | ) | 67,069 | ||||||||||||||
| (1) | Excludes in-building and outdoor distributed antenna system networks. |
UNAUDITED RECONCILIATIONS TO GAAP MEASURES AND THE CALCULATION OF DEFINED FINANCIAL MEASURES
(In thousands, except percentages. Totals may not add due to rounding.)
The reconciliation of net income to Adjusted EBITDA and the calculation of Adjusted EBITDA Margin are as follows:
| Three Months Ended December 31, | Twelve Months Ended December 31, | |||||||||||||||
| 2013 | 2012 | 2013 | 2012 | |||||||||||||
Net income | $ | 73,925 | $ | 118,153 | $ | 482,208 | $ | 594,025 | ||||||||
Income from equity method investments | — | (10 | ) | — | (35 | ) | ||||||||||
Income tax provision | 36,180 | 43,187 | 59,541 | 107,304 | ||||||||||||
Other expense | 58,509 | 18,832 | 207,500 | 38,300 | ||||||||||||
Loss on retirement of long-term obligations | 734 | — | 38,701 | 398 | ||||||||||||
Interest expense | 139,380 | 104,043 | 458,296 | 401,665 | ||||||||||||
Interest income | (4,238 | ) | (1,427 | ) | (9,706 | ) | (7,680 | ) | ||||||||
Other operating expenses | 35,853 | 27,035 | 71,539 | 62,185 | ||||||||||||
Depreciation, amortization and accretion | 244,811 | 178,488 | 800,145 | 644,276 | ||||||||||||
Stock-based compensation expense | 14,983 | 12,329 | 68,138 | 51,983 | ||||||||||||
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Adjusted EBITDA | $ | 600,137 | $ | 500,630 | $ | 2,176,362 | $ | 1,892,421 | ||||||||
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Divided by total revenue | 941,969 | 768,374 | 3,361,407 | 2,875,960 | ||||||||||||
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Adjusted EBITDA Margin | 64 | % | 65 | % | 65 | % | 66 | % | ||||||||
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14
UNAUDITED RECONCILIATIONS TO GAAP MEASURES AND THE CALCULATION OF DEFINED FINANCIAL MEASURES
(In thousands, except per share data. Totals may not add due to rounding.)
The reconciliation of net income to NAREIT Funds From Operations and the calculation of Adjusted Funds From Operations and Adjusted Funds From Operations per Share are presented below:
| Three Months Ended December 31, | Twelve Months Ended December 31, | |||||||||||||||
| 2013 | 2012 | 2013 | 2012 | |||||||||||||
Net Income | $ | 73,925 | $ | 118,153 | $ | 482,208 | $ | 594,025 | ||||||||
Real estate related depreciation, amortization and accretion | 215,964 | 154,329 | 701,292 | 562,298 | ||||||||||||
Losses from sale or disposal of real estate and real estate related impairment charges | 23,645 | 15,739 | 32,475 | 23,650 | ||||||||||||
Adjustments for unconsolidated affiliates and noncontrolling interest | 18,841 | 10,103 | 41,000 | 20,238 | ||||||||||||
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NAREIT Funds From Operations | 332,375 | 298,324 | 1,256,975 | 1,200,211 | ||||||||||||
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Straight-line revenue | (41,696 | ) | (47,260 | ) | (147,664 | ) | (165,806 | ) | ||||||||
Straight-line expense | 8,413 | 7,553 | 29,732 | 33,700 | ||||||||||||
Stock-based compensation expense | 14,983 | 12,329 | 68,138 | 51,983 | ||||||||||||
Non-cash portion of tax provision | 7,676 | 2,375 | 7,865 | 38,027 | ||||||||||||
Non-real estate related depreciation, amortization and accretion | 28,847 | 24,159 | 98,853 | 81,978 | ||||||||||||
Amortization of deferred financing costs, capitalized interest and debt discounts and premiums and long-term deferred interest charges (1) | 906 | 14,492 | 22,955 | 21,008 | ||||||||||||
Other expense (2) | 58,509 | 18,832 | 207,500 | 38,300 | ||||||||||||
Loss on retirement of long-term obligations | 734 | — | 38,701 | 398 | ||||||||||||
Other operating expense (3) | 12,208 | 11,296 | 39,064 | 38,535 | ||||||||||||
Capital improvement capital expenditures (4) | (20,170 | ) | (30,856 | ) | (81,218 | ) | (75,444 | ) | ||||||||
Corporate capital expenditures | (5,778 | ) | (5,853 | ) | (30,383 | ) | (20,047 | ) | ||||||||
Adjustments for unconsolidated affiliates and noncontrolling interest | (18,841 | ) | (10,103 | ) | (41,000 | ) | (20,238 | ) | ||||||||
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Adjusted Funds From Operations | $ | 378,166 | $ | 295,288 | $ | 1,469,518 | $ | 1,222,605 | ||||||||
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Divided by weighted average diluted shares outstanding | 398,609 | 399,625 | 399,146 | 399,287 | ||||||||||||
Adjusted Funds From Operations per Share | $ | 0.95 | $ | 0.74 | $ | 3.68 | $ | 3.06 | ||||||||
| (1) | Includes accrued non-cash interest expense attributable to joint-venture loans. |
| (2) | Primarily includes unrealized loss on foreign currency exchange rate fluctuations. |
| (3) | Primarily includes impairments and transaction related costs. |
| (4) | 2012 amounts adjusted to exclude start-up capital projects. |
15