BOSTON–(BUSINESS WIRE)–American Tower Corporation (NYSE: AMT) today reported financial results for the quarter and full year ended December 31, 2023.
Steven Vondran, American Tower’s Chief Executive Officer, stated, “We delivered another year of solid results at American Tower. In 2023, we combined record colocation and amendment growth in the US & Canada and a second consecutive year of record sales at CoreSite, with resilient performance in our international markets. We also focused on cost discipline to drive strong margin expansion and cash flow growth despite a challenging macroeconomic backdrop, and strengthened our financial position through a number of balance sheet initiatives that reduced net leverage, optimized our floating rate debt exposure and extended maturities.
Looking to 2024 and beyond, technology evolutions such as 5G, AI and the requirement for more distributed compute workloads are expected to drive tremendous demand for our communications infrastructure assets. As a result, we’re focused on leveraging our differentiated global scale, best-in-class operating model and investment-grade balance sheet to deliver increasing shareholder returns, strong, sustainable growth and a unique value proposition for all of our stakeholders.”
CONSOLIDATED OPERATING RESULTS OVERVIEW
American Tower generated the following operating results for the quarter and full year ended December 31, 2023 (all comparative information is presented against the quarter and full year ended December 31, 2022).
|
($ in millions, except per share amounts.) |
|
Q4 2023 |
|
Growth Rate |
|
FY 2023 |
|
Growth Rate |
||||||
|
Total revenue |
|
$ |
2,787 |
|
|
3.0 |
% |
|
$ |
11,144 |
|
|
4.0 |
% |
|
Total property revenue |
|
$ |
2,766 |
|
|
4.6 |
% |
|
$ |
11,001 |
|
|
5.1 |
% |
|
Total Tenant Billings Growth |
|
$ |
129 |
|
|
7.1 |
% |
|
$ |
530 |
|
|
7.2 |
% |
|
Organic Tenant Billings Growth |
|
$ |
112 |
|
|
6.1 |
% |
|
$ |
460 |
|
|
6.3 |
% |
|
Property Gross Margin |
|
$ |
1,966 |
|
|
5.5 |
% |
|
$ |
7,801 |
|
|
6.7 |
% |
|
Property Gross Margin % |
|
|
71.1 |
% |
|
|
|
|
70.9 |
% |
|
|
||
|
Net income(1)(2)(3) |
|
$ |
13 |
|
|
101.9 |
% |
|
$ |
1,367 |
|
|
(19.4 |
)% |
|
Net income attributable to AMT common stockholders(1)(2)(3) |
|
$ |
85 |
|
|
112.4 |
% |
|
$ |
1,483 |
|
|
(16.0 |
)% |
|
Net income attributable to AMT common stockholders per diluted share(1)(2)(3) |
|
$ |
0.18 |
|
|
112.2 |
% |
|
$ |
3.18 |
|
|
(16.8 |
)% |
|
Adjusted EBITDA |
|
$ |
1,761 |
|
|
3.2 |
% |
|
$ |
7,087 |
|
|
6.7 |
% |
|
Adjusted EBITDA Margin % |
|
|
63.2 |
% |
|
|
|
|
63.6 |
% |
|
|
||
|
|
|
|
|
|
|
|
|
|
||||||
|
Nareit Funds From Operations (FFO) attributable to AMT common stockholders(1) |
|
$ |
858 |
|
|
40.0 |
% |
|
$ |
4,610 |
|
|
(12.7 |
)% |
|
AFFO attributable to AMT common stockholders |
|
$ |
1,070 |
|
|
(2.1 |
)% |
|
$ |
4,612 |
|
|
2.1 |
% |
|
AFFO attributable to AMT common stockholders per Share |
|
$ |
2.29 |
|
|
(2.1 |
)% |
|
$ |
9.87 |
|
|
1.1 |
% |
|
|
|
|
|
|
|
|
|
|
||||||
|
Cash provided by operating activities |
|
$ |
1,142 |
|
|
(3.6 |
)% |
|
$ |
4,722 |
|
|
27.8 |
% |
|
Less: total cash capital expenditures(4) |
|
$ |
531 |
|
|
(20.2 |
)% |
|
$ |
1,830 |
|
|
(3.8 |
)% |
|
Free Cash Flow |
|
$ |
611 |
|
|
17.7 |
% |
|
$ |
2,893 |
|
|
61.3 |
% |
| _______________ | ||
|
(1) |
Q4 2023 and FY 2023 growth rates impacted by foreign currency (losses) gains of approximately $(378) million and $(331) million, respectively, in the current period as compared to foreign currency (losses) gains of approximately $(662) million and $449 million, respectively, in the prior-year periods. |
|
|
(2) |
Q4 2023 and FY 2023 growth rates impacted by impairment charges of $205 million and $604 million, respectively, in the current period as compared to impairment charges of $642 million and $656 million, respectively, in the prior-year periods, primarily in India. Impairment charges for the three months ended December 31, 2023 include a goodwill impairment charge of $80 million related to the Company’s Spain reporting unit due to an increase in the weighted average cost of capital in such unit. For the twelve months ended December 31, 2023, impairment charges include the recognition of goodwill impairment charges of $402 million related to the Company’s Spain and India reporting units. |
|
|
(3) |
Q4 2023 net income growth rates reflect the absolute growth rates as the Q4 2022 net income results represented losses of approximately $(717) million, $(684) million and $(1.47) for net income (loss), net income (loss) attributable to AMT common stockholders and net income (loss) attributable to AMT common stockholders per diluted share, respectively, for the three months ended December 31, 2022. |
|
|
(4) |
Q4 2023 and FY 2023 cash capital expenditures include $9.7 million and $44.9 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
Distributions – During the quarter and full year ended December 31, 2023, the Company declared the following regular cash distributions to its common stockholders:
|
Common Stock Distributions |
|
Q4 2023(1) |
|
FY 2023 |
||||
|
Distributions per share |
|
$ |
1.70 |
|
|
$ |
6.45 |
|
|
Aggregate amount (in millions) |
|
$ |
793 |
|
|
$ |
3,007 |
|
|
Year-over-year per share growth |
|
|
9.0 |
% |
|
|
10.1 |
% |
|
_______________ |
||
|
(1) |
The distribution declared on December 13, 2023 was paid on February 1, 2024 to stockholders of record as of the close of business on December 28, 2023. |
|
Capital Expenditures – During the fourth quarter of 2023, total capital expenditures were approximately $531 million, of which $85 million was for non-discretionary capital improvements and corporate capital expenditures. For the full year 2023, total capital expenditures were approximately $1.8 billion, of which $217 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 2023, the Company spent approximately $16 million to acquire communications sites and other communications related infrastructure globally. For the full year 2023, the Company spent approximately $168 million to acquire communications sites, previously subleased sites in the U.S. and other communications related infrastructure globally.
Other Events – On January 4, 2024, the Company, through its subsidiaries, ATC Asia Pacific Pte. Ltd. and ATC Telecom Infrastructure Private Limited (“ATC TIPL”), which holds the Company’s operations in India, consistent with its previously disclosed exploration of strategic alternatives for the Company’s operations in India, entered into an agreement with Data Infrastructure Trust (“DIT”), an infrastructure investment trust sponsored by an affiliate of Brookfield Asset Management, pursuant to which DIT will acquire a 100% ownership interest in ATC TIPL (the “Pending ATC TIPL Transaction”). The Company will retain the full economic benefit associated with the optionally convertible debentures issued by a customer in India, Vodafone Idea Limited (the “VIL OCDs”), and rights to payments on certain existing customer receivables. Subject to certain pre-closing terms, total aggregate consideration would potentially represent up to approximately 210 billion Indian Rupees (approximately $2.5 billion), including the value of the VIL OCDs, payments on certain existing customer receivables, the repayment of existing intercompany debt and the repayment, or assumption, of the Company’s existing term loan in India, by DIT. Additionally, the Pending ATC TIPL Transaction is expected to close in the second half of 2024, subject to customary closing conditions, including government and regulatory approval.
LEVERAGE AND FINANCING OVERVIEW
Leverage – For the quarter ended December 31, 2023, the Company’s Net Leverage Ratio was 5.2x net debt (total debt less cash and cash equivalents) to fourth quarter 2023 annualized Adjusted EBITDA.
|
Calculation of Net Leverage Ratio ($ in millions, totals may not add due to rounding.) |
|
As of December 31, 2023 |
|
|
Total debt |
|
$ |
38,922 |
|
Less: Cash and cash equivalents |
|
|
1,973 |
|
Net Debt |
|
$ |
36,948 |
|
Divided By: Fourth quarter annualized Adjusted EBITDA(1) |
|
|
7,043 |
|
Net Leverage Ratio |
|
5.2x |
|
|
_______________ |
||
|
(1) |
Q4 2023 Adjusted EBITDA multiplied by four. |
|
Liquidity and Financing Activities – As of December 31, 2023, the Company had approximately $9.6 billion of total liquidity, consisting of approximately $2.0 billion in cash and cash equivalents plus the ability to borrow an aggregate of approximately $7.6 billion under its revolving credit facilities, net of any outstanding letters of credit.
On January 12, 2024, the Company repaid $500.0 million aggregate principal amount of its 0.600% senior unsecured notes due 2024 (the “0.600% Notes”) upon their maturity. The 0.600% Notes were repaid using borrowings under its $6.0 billion senior unsecured multicurrency revolving credit facility. Upon completion of the repayment, none of the 0.600% Notes remained outstanding.
On February 14, 2024, the Company repaid $1.0 billion aggregate principal amount of its 5.00% senior unsecured notes due 2024 (the “5.00% Notes”) upon their maturity. The 5.00% Notes were repaid using borrowings under its $6.0 billion senior unsecured multicurrency revolving credit facility. Upon completion of the repayment, none of the 5.00% Notes remained outstanding.
FULL YEAR 2024 OUTLOOK
The following full year 2024 estimates are based on a number of assumptions that management believes to be reasonable and reflect the Company’s expectations as of February 27, 2024. 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 February 27, 2024 through December 31, 2024: (a) 1,272 Argentinean Pesos; (b) 1.52 Australian Dollars; (c) 111.50 Bangladeshi Taka; (d) 4.95 Brazilian Reais; (e) 1.34 Canadian Dollars; (f) 920 Chilean Pesos; (g) 4,040 Colombian Pesos; (h) 0.92 Euros; (i) 12.85 Ghanaian Cedis; (j) 83.10 Indian Rupees; (k) 161 Kenyan Shillings; (l) 17.50 Mexican Pesos; (m) 1.63 New Zealand Dollars; (n) 1,500 Nigerian Naira; (o) 7,300 Paraguayan Guarani; (p) 3.75 Peruvian Soles; (q) 56.10 Philippine Pesos; (r) 18.85 South African Rand; (s) 3,810 Ugandan Shillings; and (t) 600 West African CFA Francs.
The Company’s outlook reflects estimated negative impacts of foreign currency exchange rate fluctuations to property revenue, Adjusted EBITDA and AFFO attributable to AMT common stockholders of approximately $191 million, $132 million and $82 million, respectively, relative to the Company’s 2023 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.
The Company’s 2024 outlook assumes a full year contribution from the India business, which includes approximately $65 million of incremental revenue reserves, with a corresponding negative impact to the financial measures below, including a $0.14 per share negative impact to AFFO attributable to AMT common stockholders per Share. The Company’s outlook reflects India contributions of $1,165 million, $360 million and $285 million for property revenue, Adjusted EBITDA and Unlevered AFFO attributable to AMT common stockholders, defined as AFFO attributable to AMT common stockholders before deducting net interest charges, respectively. The Company expects the closing of the Pending ATC TIPL Transaction in the second half of 2024. For illustrative purposes, assuming an October 1, 2024 closing, the Company would estimate a reduction to its outlook of $295 million, $95 million, $75 million and $0.09 for property revenue, Adjusted EBITDA, AFFO Attributable to AMT common stockholders and AFFO attributable to AMT common stockholders per Share, respectively. Additional information pertaining to Unlevered AFFO attributable to AMT common stockholders and the expected contributions from India to the Company’s 2024 outlook has been provided on page 20 of the Company’s the fourth quarter and full year 2023 earnings presentation available on the Company’s website.
The Company’s outlook also reflects an estimated $750 million decrease in depreciation and amortization, and a $75 million decrease to accretion expense for the year ended December 31, 2024, based on preliminary information obtained to date, related to the Company’s review, and possible extension, of the estimated useful lives of its tower assets and estimated settlement dates for its asset retirement obligations.
Additional information pertaining to the impact of foreign currency and Secured Overnight Financing Rate fluctuations on the Company’s outlook has been provided in the supplemental disclosure package available on the Company’s website.
|
2024 Outlook ($ in millions, except per share amounts.) |
Full Year 2024 |
|
Midpoint Growth Rates vs. Prior Year |
||||||
|
Total property revenue(1) |
$ |
11,050 |
to |
$ |
11,230 |
|
1.3% |
||
|
Net income |
|
3,305 |
to |
|
3,415 |
|
145.8% |
||
|
Net income attributable to AMT common stockholders |
|
3,295 |
to |
|
3,405 |
|
125.8% |
||
|
Adjusted EBITDA |
|
7,080 |
to |
|
7,190 |
|
0.7% |
||
|
AFFO attributable to AMT common stockholders |
|
4,780 |
to |
|
4,890 |
|
4.8% |
||
|
AFFO attributable to AMT common stockholders per Share |
$ |
10.21 |
to |
$ |
10.45 |
|
4.7% |
||
| _______________ | ||
|
(1) |
Includes U.S. & Canada segment property revenue of $5,210 million to $5,270 million, international property revenue of $4,940 million to $5,040 million and Data Centers segment property revenue of $900 million to $920 million, reflecting midpoint growth rates of 0.5%, 0.8% and 9.0%, respectively. The U.S. & Canada growth rate includes an estimated negative impact of over 3% associated with a decrease in non-cash straight-line revenue recognition. The international growth rate includes an estimated negative impact of approximately 4% from the translational effects of foreign currency exchange rate fluctuations. International property revenue reflects the Company’s Africa, Asia-Pacific, Europe and Latin America segments. Data Centers segment property revenue reflects revenue from the Company’s data center facilities and related assets. |
|
|
2024 Outlook for Total Property revenue, at the midpoint, includes the following components(1): ($ in millions, totals may not add due to rounding.) |
U.S. & Canada Property(2) |
|
International Property(3) |
|
Data Centers Property(4) |
|
Total Property |
||
|
International pass-through revenue(5) |
N/A |
|
$ |
1,610 |
|
N/A |
|
$ |
1,610 |
|
Straight-line revenue(6) |
216 |
|
|
21 |
|
14 |
|
|
251 |
|
_______________ |
||
|
(1) |
For additional discussion regarding these components, please refer to “Revenue Components” below. |
|
|
(2) |
U.S. & Canada property revenue includes revenue from all assets in the United States and Canada, other than data center facilities and related assets. |
|
|
(3) |
International property revenue reflects the Company’s Africa, Asia-Pacific, Europe and Latin America segments. |
|
|
(4) |
Data Centers property revenue reflects revenue from the Company’s data center facilities and related assets. |
|
|
(5) |
Includes $565 million in international pass-through revenue related to the Company’s India operations. |
|
|
(6) |
Includes $(5) million in straight-line revenue related to the Company’s India operations. |
|
|
2024 Outlook for Total Tenant Billings Growth, at the midpoint, includes the following components(1): (Totals may not add due to rounding.) |
U.S. & Canada Property |
|
International Property(2) |
|
Total Property |
|
Organic Tenant Billings |
~4.7% |
|
~5% |
|
~5% |
|
New Site Tenant Billings |
~0% |
|
~2% |
|
~1% |
|
Total Tenant Billings Growth |
~4.7% |
|
~7% |
|
~6% |
|
_______________ |
||
|
(1) |
For additional discussion regarding the component growth rates, please refer to “Revenue Components” below. Tenant Billings Growth is not applicable to the Data Centers segment. For additional details related to the Data Centers segment, please refer to the supplemental disclosure package available on the Company’s website. |
|
|
(2) |
International property revenue reflects the Company’s Africa, Asia-Pacific, Europe and Latin America segments. |
|
| Outlook for Capital Expenditures(1):
($ in millions, totals may not add due to rounding.) |
Full Year 2024 |
||||||
|
Discretionary capital projects(2) |
$ |
790 |
to |
$ |
820 |
||
|
Ground lease purchases |
|
70 |
to |
|
90 |
||
|
Start-up capital projects |
|
65 |
to |
|
85 |
||
|
Redevelopment |
|
455 |
to |
|
485 |
||
|
Capital improvement |
|
155 |
to |
|
165 |
||
|
Corporate |
|
10 |
— |
|
10 |
||
|
Total |
$ |
1,545 |
to |
$ |
1,655 |
||
|
_______________ |
||
| (1) |
Outlook for Capital Expenditures includes approximately $100 million related to the Company’s India operations, largely associated with discretionary capital projects, redevelopment and capital improvements of $20 million, $60 million and $20 million, respectively. |
|
| (2) |
Includes the construction of 2,500 to 3,500 communications sites globally, including approximately 800 in India, and $450 million of development spend in the Company’s Data Centers segment. |
|
| Reconciliation of Outlook for Adjusted EBITDA to Net income:
($ in millions, totals may not add due to rounding.) |
Full Year 2024 |
||||||||
|
Net income |
$ |
3,305 |
|
to |
$ |
3,415 |
|
||
|
Interest expense |
|
1,460 |
|
to |
|
1,440 |
|
||
|
Depreciation, amortization and accretion |
|
1,930 |
|
to |
|
1,950 |
|
||
|
Income tax provision |
|
410 |
|
to |
|
420 |
|
||
|
Stock-based compensation expense |
|
190 |
|
— |
|
190 |
|
||
|
Other, including other operating expenses, interest income, (gain) loss on retirement of long-term obligations and other (income) expense |
|
(215 |
) |
to |
|
(225 |
) |
||
|
Adjusted EBITDA |
$ |
7,080 |
|
to |
$ |
7,190 |
|
||
| Reconciliation of Outlook for AFFO attributable to AMT common stockholders to Net income:
($ in millions, except share and per share data, totals may not add due to rounding.) |
Full Year 2024 |
||||||||
|
Net income |
$ |
3,305 |
|
to |
$ |
3,415 |
|
||
|
Straight-line revenue |
|
(251 |
) |
— |
|
(251 |
) |
||
|
Straight-line expense |
|
51 |
|
— |
|
51 |
|
||
|
Depreciation, amortization and accretion |
|
1,930 |
|
to |
|
1,950 |
|
||
|
Stock-based compensation expense |
|
190 |
|
— |
|
190 |
|
||
|
Deferred portion of income tax and other income tax adjustments |
|
65 |
|
— |
|
65 |
|
||
|
Other, including other operating expense, amortization of deferred financing costs, debt discounts and premiums, (gain) loss on retirement of long-term obligations, other (income) expense and long-term deferred interest charges |
|
(17 |
) |
to |
|
(27 |
) |
||
|
Capital improvement capital expenditures |
|
(155 |
) |
to |
|
(165 |
) |
||
|
Corporate capital expenditures |
|
(10 |
) |
— |
|
(10 |
) |
||
|
Adjustments and Distributions for unconsolidated affiliates and noncontrolling interests |
$ |
(328 |
) |
— |
$ |
(328 |
) |
||
|
AFFO attributable to AMT common stockholders |
$ |
4,780 |
|
to |
$ |
4,890 |
|
||
|
Divided by weighted average diluted shares outstanding (in thousands) |
|
468,000 |
|
— |
|
468,000 |
|
||
|
AFFO attributable to AMT common stockholders per Share |
$ |
10.21 |
|
to |
$ |
10.45 |
|
||
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 224,000 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 hub at www.americantower.com.
