Exhibit 99.2

 

Contact: Leah Stearns

Vice President, Investor Relations & Capital Markets

Telephone: (617) 375-7500

AMERICAN TOWER CORPORATION REPORTS

THIRD QUARTER AND YEAR TO DATE 2013 FINANCIAL RESULTS

 

CONSOLIDATED HIGHLIGHTS
Third Quarter 2013				Year to Date 2013
•		Total revenue increased 13.3% to $807.9 million		•		Total revenue increased 14.8% to $2,419.4 million
•		Operating income increased 4.5% to $308.9 million		•		Operating income increased 9.6% to $921.4 million
•		Cash provided by operating activities increased 1.8% to $359.9 million		•		Cash provided by operating activities increased 2.5% to $1,144.4 million
SEGMENT HIGHLIGHTS
Third Quarter 2013				Year to Date 2013
•		Domestic rental and management segment revenue increased 10.3% to $529.9 million		•		Domestic rental and management segment revenue increased 8.7% to $1,566.7 million
•		International rental and management segment revenue increased 22.8% to $266.6 million		•		International rental and management segment revenue increased 27.9% to $796.5 million
•		Network development services segment revenue was $11.3 million		•		Network development services segment revenue was $56.2 million

Boston, Massachusetts – October 30, 2013: American Tower Corporation (NYSE: AMT) today reported financial results for the quarter ended September 30, 2013.

Jim Taiclet, American Tower’s Chief Executive Officer stated, “Consumers in the U.S. and around the world love their smartphones and tablets, continuously upgrading devices and using more applications and bandwidth. Leading mobile operators are aggressively upgrading their networks to capture this business, further driving demand for tower space. Consequently, strong leasing activity across our global portfolio led to core organic growth of over 9% in the U.S. and 14% in our international segment in the third quarter.

We anticipate strong leasing demand for communications site real estate going forward, and through our recently announced acquisitions of Global Tower Partners and portfolios from Nextel International, we have reweighted our asset base toward our three original markets, the U.S., Mexico and Brazil. These investments, coupled with the diversification and growth prospects of our tower assets in Europe, Africa, and Asia, provide the strategic positioning to achieve our long-term objective of driving mid-teen annual growth in AFFO per share.”

THIRD QUARTER 2013 OPERATING RESULTS OVERVIEW

American Tower generated the following operating results for the quarter ended September 30, 2013 (unless otherwise indicated, all comparative information is presented against the quarter ended September 30, 2012).

Total revenue increased 13.3% to $807.9 million and total rental and management revenue increased 14.2% to $796.6 million. Total rental and management revenue Core Growth was approximately 18.5%. 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 September 30, 2013.

Total rental and management Gross Margin increased 15.3% to $604.4 million. Total selling, general, administrative and development expense was $97.8 million, including $14.7 million of stock-based compensation expense. Adjusted EBITDA increased 13.9% to $527.9 million, Core Growth in Adjusted EBITDA was 17.4%, and Adjusted EBITDA Margin was 65%.

 

1

---

Adjusted Funds From Operations (AFFO) increased 24.4% to $367.3 million, AFFO per Share increased 24.3% to $0.92, and Core Growth in AFFO was approximately 25.9%.

Operating income increased 4.5% to $308.9 million, and net income attributable to American Tower Corporation decreased 22.4% to $180.1 million. The decrease was primarily attributable to the Company’s recognition of unrealized non-cash losses of $30.9 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 22.0% to $0.46, and net income attributable to American Tower Corporation per diluted common share decreased 22.4% to $0.45.

Cash provided by operating activities increased 1.8% to $359.9 million.

Segment Results

Domestic Rental and Management Segment – Domestic rental and management segment revenue increased 10.3% to $529.9 million, which represented 66% of total revenues, and domestic rental and management segment Gross Margin increased 12.0% to $434.7 million. Domestic rental and management segment Operating Profit increased 11.4% to $410.2 million, and domestic rental and management segment Operating Profit Margin was 77%.

International Rental and Management Segment – International rental and management segment revenue increased 22.8% to $266.6 million, which represented 33% of total revenues. International rental and management segment Gross Margin increased 25.0% to $169.7 million, while international rental and management segment Operating Profit increased 24.7% to $138.0 million. International rental and management segment Operating Profit Margin was 52% (71%, excluding the impact of $71.3 million of pass-through revenues).

Network Development Services Segment – Network development services segment revenue was $11.3 million, which represented 1% of total revenues. Network development services segment Gross Margin was $6.5 million, and network development services segment Operating Profit was $4.6 million. Network development services segment Operating Profit Margin was 41%.

YEAR TO DATE 2013 OPERATING RESULTS OVERVIEW

American Tower generated the following operating results for the nine months ended September 30, 2013 (unless otherwise indicated, all comparative information is presented against the nine months ended September 30, 2012).

Total revenue increased 14.8% to $2,419.4 million and total rental and management revenue increased 14.5% to $2,363.2 million. Total rental and management revenue Core Growth was approximately 18.9%. Please refer to the selected statement of operations detail on page 13, which highlights the items affecting all Core Growth percentages for the nine months ended September 30, 2013.

Total rental and management Gross Margin increased 14.0% to $1,789.2 million. Total selling, general, administrative and development expense was $298.7 million, including $52.0 million of stock-based compensation expense. Adjusted EBITDA increased 13.3% to $1,576.2 million, Core Growth in Adjusted EBITDA was 17.2%, and the Adjusted EBITDA Margin was 65%.

AFFO increased 17.7% to $1,091.4 million, AFFO per Share increased 17.7% to $2.73, and Core Growth in AFFO was approximately 21.7%.

Operating income increased 9.6% to $921.4 million, while net income attributable to American Tower Corporation decreased 10.0% to $451.4 million. The decrease was primarily attributable to the Company’s recognition of unrealized non-cash losses of $151.7 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 10.2% to $1.14, and net income attributable to American Tower Corporation per diluted common share decreased 10.3% to $1.13.

Cash provided by operating activities increased 2.5% to $1,144.4 million.

Segment Results

Domestic Rental and Management Segment – Domestic rental and management segment revenue increased 8.7% to $1,566.7 million, which represented 65% of total revenues. Domestic rental and management segment Gross Margin increased 10.0% to $1,284.4 million, while domestic rental and management segment Operating Profit increased 9.6% to $1,212.7 million. Domestic rental and management segment Operating Profit Margin was 77%.

International Rental and Management Segment – International rental and management segment revenue increased 27.9% to $796.5 million, which represented 33% of total revenues. International rental and management segment Gross Margin increased 25.8% to $504.8 million, while international rental and management segment Operating Profit increased 23.5% to $411.0 million. International rental and management segment Operating Profit Margin was 52% (70%, excluding the impact of $212.2 million of pass-through revenues).

Network Development Services Segment – Network development services segment revenue was $56.2 million, which represented 2% of total revenues. Network development services segment Gross Margin was $33.8 million, and network development services segment Operating Profit was $26.7 million. Network development services segment Operating Profit Margin was 48%.

 

2

---

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 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 14.

INVESTING OVERVIEW

Distributions – On October 7, 2013, the Company paid its third quarter distribution of $0.28 per share, or a total of approximately $110.5 million, to stockholders of record at the close of business on September 23, 2013.

During the nine months ended September 30, 2013, the Company declared an aggregate of $0.81 per share in distributions, or a total of approximately $320.0 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 third quarter of 2013, total capital expenditures of $167.6 million included $80.7 million for discretionary capital projects, including spending to complete the construction of 48 towers and the installation of 2 distributed antenna system networks and 509 shared generators domestically and the construction of 417 towers and the installation of 3 distributed antenna system networks internationally; $22.7 million to purchase land under the Company’s communications sites; $7.6 million for start-up capital projects in recently launched markets; $30.0 million for the redevelopment of existing communications sites to accommodate new tenant equipment; and $26.7 million for capital improvements and corporate capital expenditures.

During the nine months ended September 30, 2013, total capital expenditures of $448.2 million included $210.9 million for discretionary capital projects, including spending to complete the construction of 192 towers and the installation of 8 distributed antenna system networks and 857 shared generators domestically and the construction of 1,113 towers and the installation of 28 distributed antenna system networks internationally; $54.5 million to purchase land under the Company’s communications sites; $22.1 million for start-up capital projects in recently launched markets; $75.1 million for the redevelopment of existing communications sites to accommodate new tenant equipment; and $85.7 million for capital improvements and corporate capital expenditures.

Cash Paid for Acquisitions – During the third quarter of 2013, the Company spent $54.5 million for the purchase of 3 domestic towers and 513 international towers. The international towers consisted of those acquired pursuant to previously announced agreements, including 294 towers in Colombia, 189 towers in South Africa and 9 towers in Ghana. In addition, the Company acquired 20 towers in Mexico during the third quarter of 2013.

During the nine months ended September 30, 2013, the Company spent $365.7 million for the purchase of 59 domestic towers and 1,530 international towers.

As previously announced, subsequent to the end of the third quarter of 2013, the Company completed its acquisition of MIP Tower Holdings LLC, a private real estate investment trust, which is the parent company of Global Tower Partners (GTP) in which it acquired over 5,000 towers, the rights to over 9,000 rooftop sites and over 800 managed towers domestically, and approximately 550 towers in Central America. As consideration for the acquisition, American Tower assumed approximately $1.5 billion of existing GTP debt and paid approximately $3.3 billion in cash.

During the third quarter, the Company entered into an agreement with NII Holdings, Inc. to acquire up to 2,790 communications sites in Brazil and 1,666 communications sites in Mexico in two separate transactions, for approximately 945 million Brazilian Reais (approximately $423.8 million) and 5,025 million Mexican Pesos (approximately $382.3 million), respectively.

In addition, during the third quarter, the Company entered into an agreement to acquire up to 236 communications sites in Brazil for an aggregate purchase price of up to approximately 283 million Brazilian Reais (approximately $127.1 million), which are expected to close during the first quarter of 2014.

Stock Repurchase Program – During the third quarter of 2013, the Company repurchased a total of approximately 1.0 million shares of its common stock for approximately $70.4 million pursuant to its stock repurchase program. On September 6, 2013, the Company temporarily suspended repurchases following the signing of its agreement to acquire GTP.

During the nine months ended September 30, 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 September 30, 2013, the Company’s Net Leverage Ratio was approximately 4.1x net debt (total debt less cash and cash equivalents) to third quarter 2013 annualized Adjusted EBITDA. On October 1, 2013, the Company’s Net Leverage Ratio increased as a result of its acquisition of GTP.

 

3

---

Liquidity – As of September 30, 2013, the Company had approximately $5.2 billion of total liquidity, comprised of approximately $4.0 billion in cash and cash equivalents, plus the ability to borrow an aggregate of approximately $1.2 billion under its revolving credit facilities, net of any outstanding letters of credit. On October 1, 2013, the Company utilized $3.3 billion of its cash on hand to fund the acquisition of GTP.

Subsequent to the end of the third quarter of 2013, the Company entered into a new $1.5 billion term loan, the proceeds of which, along with cash on hand, were used to repay its existing $750 million 2012 term loan and $800 million under its 2012 revolving credit facility. As a result, the Company’s total liquidity was approximately $2.6 billion as of October 30, 2013.

FULL YEAR 2013 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 October 30, 2013. 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 reflected in the table below, the Company has raised the midpoint of its full year 2013 outlook for total rental and management revenue by $80 million, Adjusted EBITDA by $55 million and AFFO by $10 million. These estimates include the impact of the Company’s acquisition of sites from GTP, which closed on October 1, 2013 and the Company’s pending acquisition of sites from NII Holdings in Mexico, which is scheduled to close in November 2013.

The Company’s outlook is based on the following average foreign currency exchange rates to 1.00 U.S. Dollar for the fourth quarter of 2013: (a) 2.25 Brazilian Reais; (b) 505.00 Chilean Pesos; (c) 1,900.00 Colombian Pesos; (d) 0.75 Euros; (e) 2.15 Ghanaian Cedi; (f) 63.00 Indian Rupees; (g) 12.90 Mexican Pesos; (h) 2.75 Peruvian Soles; (i) 10.00 South African Rand; and (j) 2,550.00 Ugandan Schillings.

 

($ in millions)		Full Year 2013												Midpoint Growth				Midpoint Core Growth
Total rental and management revenue		$	3,250				to			$	3,280				16.5	%			21.2	%
Adjusted EBITDA(1)		$	2,150				to			$	2,180				14.4	%			19.4	%
Adjusted Funds From Operations(1)		$	1,455				to			$	1,475				19.8	%			22.4	%
Net Income		$	580				to			$	620				1.0	%			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 $2,180 million; and (2) international rental and management segment revenue of $1,085 million, which includes approximately $286 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			21.2	%			19.4	%			22.4	%
Estimated impact of fluctuations in foreign currency exchange rates			(2.1	)%			(1.4	)%			(1.9	)%
Impact of straight-line revenue and expense recognition			(1.9	)%			(2.4	)%			—
Impact of significant one-time items			(0.7	)%			(1.1	)%			(0.6	)%
Outlook midpoint growth			16.5	%			14.4	%			19.8	%

Outlook for Capital Expenditures:

($ in millions)

 

(Totals may not add due to rounding.)		Full Year 2013
Discretionary capital projects(1)		$	305			to		$	315
Ground lease purchases			85			to			105
Start-up capital projects			20			—			20
Redevelopment			100			to			110
Capital improvement(2)			85			to			95
Corporate			30			—			30
Total		$	625			to		$	675

 

(1)

Includes the construction of approximately 1,900 to 2,100 new communications sites.

(2)

Includes spending related to a lighting system upgrade in the U.S. of approximately $15 million.

 

4

---

Reconciliations of Outlook for Net Income to Adjusted EBITDA:

($ in millions)

 

(Totals may not add due to rounding.)		Full Year 2013
Net income		$	580			to		$	620
Interest expense			465			to			455
Depreciation, amortization and accretion			805			to			785
Income tax provision			30			to			40
Stock-based compensation expense			65			to			70
Other, including other operating expenses, interest income, loss on retirement of long-term obligations, (income) loss on equity method investments and other (income) expense			205			to			210
Adjusted EBITDA		$	2,150			to		$	2,180

Reconciliations of Outlook for Net Income to Adjusted Funds From Operations:

($ in millions)

 

(Totals may not add due to rounding.)		Full Year 2013
Net income		$	580				to			$	620
Straight-line revenue			(144	)			—				(144	)
Straight-line expense			33				—				33
Depreciation, amortization and accretion			805				to				785
Stock-based compensation expense			65				to				70
Non-cash portion of tax provision			(12	)			—				(12	)
Other, including other operating expenses, interest expense, amortization of deferred financing costs, capitalized interest, debt discounts and premiums and long-term deferred interest charges, loss on retirement of long-term obligations, other (income) expense and non-cash interest related to joint venture shareholder loans			243				to				248
Capital improvement capital expenditures			(85	)			to				(95	)
Corporate capital expenditures			(30	)			—				(30	)
Adjusted Funds From Operations		$	1,455				to			$	1,475

Conference Call Information

American Tower will host a conference call today at 8:30 a.m. ET to discuss its financial results for the third quarter and nine months ended September 30, 2013 and its full year 2013 outlook. 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: 87346738

When available, a replay of the call can be accessed until 11:59 p.m. ET on November 13, 2013. The replay dial-in numbers are as follows:

U.S./Canada dial-in: (855) 859-2056

International dial-in: (404) 537-3406

Passcode: 87346738

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 61,000 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 visit 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, Adjusted Funds From Operations, Adjusted Funds From Operations per Share, 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.

 

5

---

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 income (expense), net income 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 (expenses), 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 and long-term deferred interest charges, (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 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 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 2013 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) new technologies or changes in a tenant’s business model could make our tower leasing business less desirable and result in decreasing revenues; (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) if our tenants consolidate, merge or share site infrastructure with each other to a significant degree, our growth, revenue and ability to generate positive cash flows could be materially and adversely affected; (5) we could suffer adverse tax or other financial consequences if taxing authorities do not agree with our tax positions; (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) our leverage and debt service obligations may materially and adversely affect us; (9) we may fail to realize the growth prospects and cost savings anticipated as a result of our acquisition of GTP; (10) we will incur significant transaction and acquisition-related integration costs in connection with the acquisition of GTP; (11) 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; (12) if we are unable to protect our rights to the land under our towers, it could adversely affect our business and operating results; (13) increasing competition in the tower industry may create pricing pressures that may materially and adversely affect us; (14) 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 would be eliminated; (15) if we fail to remain qualified as a REIT, we would be subject to tax at corporate income tax rates, which would substantially reduce funds otherwise available; (16) we may be limited in our ability to fund required distributions using cash generated through our TRSs; (17) complying with REIT requirements may limit our flexibility or cause us to forego otherwise attractive opportunities; (18) certain of our business activities may be subject to corporate level income tax and foreign taxes, which reduce our cash flows, and may have deferred and contingent tax liabilities; (19) we may need additional financing to fund capital expenditures, future growth and expansion initiatives and to satisfy our REIT distribution requirements; (20) restrictive covenants in the Loan Agreement related to our Securitization and indentures related to the GTP Securitization, the loan agreements for our credit facilities and the indentures governing our debt securities could materially and adversely affect our business by limiting flexibility; (21) we may incur goodwill and other intangible asset impairment charges which could result in a significant reduction to our earnings; (22) we have limited experience operating as a REIT, which may adversely affect our financial condition, results of operations, cash flow and ability to satisfy debt service obligations; (23) we could have liability under environmental and occupational safety and health laws; (24) our towers or data centers may be affected by natural disasters and other unforeseen events for which our insurance may not provide adequate coverage; (25) our costs could increase and our revenues could decrease due to perceived health risks from radio emissions, especially if these perceived risks are substantiated. 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 June 30, 2013. We undertake no obligation to update the information contained in this press release to reflect subsequently occurring events or circumstances.

 

6

---

UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS

(In thousands)

 

		September 30, 2013				December 31, 2012(1)
ASSETS
CURRENT ASSETS:
Cash and cash equivalents		$	4,040,353			$	368,618
Restricted cash			132,019				69,316
Short-term investments			27,381				6,018
Accounts receivable, net			152,560				143,772
Prepaid and other current assets			365,792				222,999
Deferred income taxes			23,931				25,754
Total current assets			4,742,036				836,477
Property and equipment, net			5,878,826				5,766,150
Goodwill			2,815,271				2,842,717
Other intangible assets, net			3,195,106				3,205,496
Deferred income taxes			219,373				209,589
Deferred rent asset			878,124				776,201
Notes receivable and other non-current assets			452,584				452,788
TOTAL		$	18,181,320			$	14,089,418
LIABILITIES AND EQUITY
CURRENT LIABILITIES:
Accounts payable		$	90,845			$	89,578
Accrued expenses			331,311				286,962
Distributions payable			110,937				189
Accrued interest			84,528				71,271
Current portion of long-term obligations			67,276				60,031
Unearned revenue			138,422				124,147
Total current liabilities			823,319				632,178
Long-term obligations			12,578,532				8,693,345
Asset retirement obligations			461,586				435,613
Other non-current liabilities			705,966				644,101
Total liabilities			14,569,403				10,405,237
COMMITMENTS AND CONTINGENCIES
EQUITY:
Common stock			3,973				3,959
Additional paid-in capital			5,097,325				5,012,124
Distributions in excess of earnings			(1,066,580	)			(1,196,907	)
Accumulated other comprehensive loss			(298,015	)			(183,347	)
Treasury stock			(207,740	)			(62,728	)
Total American Tower Corporation equity			3,528,963				3,573,101
Noncontrolling interest			82,954				111,080
Total equity			3,611,917				3,684,181
TOTAL		$	18,181,320			$	14,089,418

 

(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 September 30,								Nine Months Ended September 30,
		2013				2012				2013				2012
REVENUES:
Rental and management		$	796,575			$	697,554			$	2,363,207			$	2,063,806
Network development services			11,305				15,781				56,231				43,780
Total operating revenues			807,880				713,335				2,419,438				2,107,586
OPERATING EXPENSES:
Costs of operations (exclusive of items shown separately below):
Rental and management (including stock-based compensation expense of $248, $195, $751 and $594, respectively)			195,953				177,336				585,465				506,120
Network development services (including stock-based compensation expense of $99, $245, $440 and $749, respectively)			4,876				7,568				22,839				22,153
Depreciation, amortization and accretion			184,922				144,061				555,334				465,788
Selling, general, administrative and development expense (including stock-based compensation expense of $14,711, $12,618, $51,964 and $38,311, respectively)			97,781				81,459				298,737				237,891
Other operating expenses			15,469				7,359				35,686				35,150
Total operating expenses			499,001				417,783				1,498,061				1,267,102
OPERATING INCOME			308,879				295,552				921,377				840,484
OTHER INCOME (EXPENSE):
Interest income, TV Azteca, net			3,544				3,586				10,673				10,715
Interest income			2,342				1,717				5,468				6,253
Interest expense			(106,335	)			(102,272	)			(318,916	)			(297,622	)
Loss on retirement of long-term obligations			—				—				(37,967	)			(398	)
Other (expense) income (including unrealized foreign currency (losses) gains of $(30,907), $46,191, $(151,673), and $(12,847), respectively)			(29,622	)			46,294				(148,991	)			(19,468	)
Total other expense			(130,071	)			(50,675	)			(489,733	)			(300,520	)
INCOME FROM CONTINUING OPERATIONS BEFORE INCOME TAXES AND INCOME ON EQUITY METHOD INVESTMENTS			178,808				244,877				431,644				539,964
Income tax provision			(15,586	)			(13,054	)			(23,361	)			(64,117	)
Income on equity method investments			—				2				—				25
NET INCOME			163,222				231,825				408,283				475,872
Net loss attributable to noncontrolling interest			16,901				264				43,068				25,732
NET INCOME ATTRIBUTABLE TO AMERICAN TOWER CORPORATION		$	180,123			$	232,089			$	451,351			$	501,604
NET INCOME PER COMMON SHARE AMOUNTS:
Basic net income attributable to American Tower Corporation		$	0.46			$	0.59			$	1.14			$	1.27
Diluted net income attributable to American Tower Corporation		$	0.45			$	0.58			$	1.13			$	1.26
WEIGHTED AVERAGE COMMON SHARES OUTSTANDING:
Basic			394,759				395,244				395,138				394,626
Diluted			398,348				399,487				399,275				399,084
DISTRIBUTIONS DECLARED PER SHARE		$	0.28			$	0.23			$	0.81			$	0.66

 

8

---

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(In thousands)

 

		Nine Months Ended September 30,
		2013				2012
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income		$	408,283			$	475,872
Adjustments to reconcile net income to cash provided by operating activities:
Stock-based compensation expense			53,155				39,654
Depreciation, amortization and accretion			555,334				465,788
Loss on early retirement of securitized debt			35,288				—
Other non-cash items reflected in statements of operations			164,406				79,655
Increase in net deferred rent asset			(83,694	)			(92,296	)
Increase in restricted cash			(62,703	)			(693	)
Increase in assets			(59,267	)			(36,137	)
Increase in liabilities			133,641				184,704
Cash provided by operating activities			1,144,443				1,116,547
CASH FLOWS FROM INVESTING ACTIVITIES:
Payments for purchase of property and equipment and construction activities			(448,249	)			(377,026	)
Payments for acquisitions, net of cash acquired			(365,658	)			(822,714	)
Proceeds from sale of short-term investments and other non-current assets			27,889				358,707
Payments for short-term investments			(50,224	)			(330,341	)
Deposits, restricted cash, investments and other			(122,396	)			(2,892	)
Cash used for investing activities			(958,638	)			(1,174,266	)
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from short-term borrowings, net			7,544				20,099
Borrowings under credit facilities			3,507,000				1,325,000
Proceeds from issuance of senior notes, net			2,221,792				698,670
Proceeds from issuance of Securities in securitization transaction, net			1,778,496				—
Proceeds from term loan credit facility			—				750,000
Proceeds from other long-term borrowings			27,971				99,132
Repayments of notes payable, credit facilities and capital leases			(3,705,454	)			(2,655,367	)
Contributions from noncontrolling interest holders, net			17,584				48,500
Purchases of common stock			(145,012	)			(16,733	)
Proceeds from stock options			32,973				42,825
Distributions			(209,711	)			(169,816	)
Payment for early retirement of securitized debt			(29,234	)			—
Deferred financing costs and other financing activities			(9,190	)			(30,215	)
Cash provided by financing activities			3,494,759				112,095
Net effect of changes in foreign currency exchange rates on cash and cash equivalents			(8,829	)			(2,255	)
NET INCREASE IN CASH AND CASH EQUIVALENTS			3,671,735				52,121
CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD			368,618				330,191
CASH AND CASH EQUIVALENTS, END OF PERIOD			4,040,353				382,312
CASH PAID FOR INCOME TAXES, NET OF REFUNDS		$	23,172			$	28,465
CASH PAID FOR INTEREST		$	283,145			$	265,443

 

9

---

UNAUDITED RESULTS FROM OPERATIONS, BY SEGMENT

(In thousands, except percentages)

 

Three months ended September 30, 2013
		Rental and Management												Network Development Services				Total
		Domestic				International				Total
Segment revenues		$	529,941			$	266,634			$	796,575			$	11,305			$	807,880
Segment operating expenses(1)			95,232				100,473				195,705				4,777				200,482
Interest income, TV Azteca, net			—				3,544				3,544				—				3,544
Segment Gross Margin			434,709				169,705				604,414				6,528				610,942
Segment selling, general, administrative and development expense(1)			24,523				31,728				56,251				1,880				58,131
Segment Operating Profit		$	410,186			$	137,977			$	548,163			$	4,648			$	552,811
Segment Operating Profit Margin			77	%			52	%			69	%			41	%			68	%

 

Three months ended September 30, 2012
		Rental and Management												Network Development Services				Total
		Domestic				International				Total
Segment revenues		$	480,351			$	217,203			$	697,554			$	15,781			$	713,335
Segment operating expenses(1)			92,072				85,069				177,141				7,323				184,464
Interest income, TV Azteca, net			—				3,586				3,586				—				3,586
Segment Gross Margin			388,279				135,720				523,999				8,458				532,457
Segment selling, general, administrative and development expense(1)			20,141				25,057				45,198				2,127				47,325
Segment Operating Profit		$	368,138			$	110,663			$	478,801			$	6,331			$	485,132
Segment Operating Profit Margin			77	%			51	%			69	%			40	%			68	%

 

Nine months ended September 30, 2013
		Rental and Management												Network Development Services				Total
		Domestic				International				Total
Segment revenues		$	1,566,660			$	796,547			$	2,363,207			$	56,231			$	2,419,438
Segment operating expenses(1)			282,273				302,441				584,714				22,399				607,113
Interest income, TV Azteca, net			—				10,673				10,673				—				10,673
Segment Gross Margin			1,284,387				504,779				1,789,166				33,832				1,822,998
Segment selling, general, administrative and development expense(1)			71,664				93,753				165,417				7,105				172,522
Segment Operating Profit		$	1,212,723			$	411,026			$	1,623,749			$	26,727			$	1,650,476
Segment Operating Profit Margin			77	%			52	%			69	%			48	%			68	%

 

Nine months ended September 30, 2012
		Rental and Management												Network Development Services				Total
		Domestic				International				Total
Segment revenues		$	1,440,824			$	622,982			$	2,063,806			$	43,780			$	2,107,586
Segment operating expenses(1)			273,188				232,338				505,526				21,404				526,930
Interest income, TV Azteca, net			—				10,715				10,715				—				10,715
Segment Gross Margin			1,167,636				401,359				1,568,995				22,376				1,591,371
Segment selling, general, administrative and development expense(1)			60,638				68,433				129,071				4,410				133,481
Segment Operating Profit		$	1,106,998			$	332,926			$	1,439,924			$	17,966			$	1,457,890
Segment Operating Profit Margin			77	%			53	%			70	%			41	%			69	%

 

(1)	Excludes stock-based compensation expense.

 

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		September 30, 2013				September 30, 2013 Pro Forma(1)
2012 Credit Facility(2)		$	963,000			$	163,000
2013 Credit Facility			1,853,000				1,853,000
2012 Term Loan			750,000				—
2013 Term Loan(2)			—				1,500,000
4.625% Senior Notes due 2015			599,754				599,754
7.000% Senior Notes due 2017			500,000				500,000
4.500% Senior Notes due 2018			999,493				999,493
3.400% Senior Notes due 2019			749,346				749,346
7.250% Senior Notes due 2019			296,626				296,626
5.050% Senior Notes due 2020			699,393				699,393
5.900% Senior Notes due 2021			499,399				499,399
4.700% Senior Notes due 2022			698,842				698,842
3.500% Senior Notes due 2023			992,347				992,347
5.000% Senior Notes due 2024			499,445				499,445
Total unsecured debt at American Tower Corporation		$	10,100,645			$	10,050,645
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 Securitizations(3)			—				1,543,586
Unison Notes(4)			205,874				205,874
South African Facility(5)			94,798				94,798
Colombian long-term credit facility(5)			70,509				70,509
Colombian bridge loans(5)			56,415				56,415
GTP Costa Rica loan(6)			—				32,600
Shareholder loans(7)			251,667				251,667
Indian Working Capital Facility			—				—
Capital leases			65,900				65,900
Total secured or subsidiary debt		$	2,545,163			$	4,121,349
Total debt		$	12,645,808			$	14,171,994
Cash and cash equivalents			4,040,353
Net debt (total debt less cash and cash equivalents)		$	8,605,455

 

(1)

Pro Forma for the close of the acquisition of GTP and the close of the 2013 Term Loan.

(2)

On October 29, 2013, the Company used net proceeds from borrowings under the 2013 Term Loan and cash on hand to repay the 2012 Term Loan and $800 million under the 2012 Credit Facility.

(3)

The GTP Securitizations were assumed in connection with the acquisition of GTP and include approximately $1.5 billion of existing indebtedness from GTP and a fair value adjustment of approximately $53.0 million.

(4)

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.

(5)

Denominated in local currency.

(6)

The GTP Costa Rica loan was assumed in connection with the acquisition of GTP and is denominated in USD.

(7)

Denominated in USD, reflects balances attributable to minority shareholder loans in the Company’s joint ventures in Colombia, Ghana and Uganda.

 

Calculation of Net Leverage Ratio ($ in thousands)		September 30, 2013
Total debt		$	12,645,808
Cash and cash equivalents			4,040,353
Numerator: net debt (total debt less cash and cash equivalents)		$	8,605,455
Adjusted EBITDA		$	527,872
Denominator: annualized Adjusted EBITDA			2,111,488
Net Leverage Ratio(1)			4.1x

 

(1)

Subsequent to the end of the third quarter of 2013, the Company utilized $3.3 billion of cash on hand to fund the acquisition of GTP and assumed $1.5 billion of existing indebtedness from GTP. As a result, the Company’s Net Leverage Ratio increased.

 

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 September 30, 2013				Nine Months Ended September 30, 2013
Total common shares, beginning of period			395.1				395.1
Common shares repurchased			(1.0	)			(1.9	)
Common shares issued			0.4				1.3
Total common shares outstanding, end of period(1)			394.5				394.5

 

(1)

As of September 30, 2013, excludes (a) 3.5 million potentially dilutive shares associated with vested and exercisable stock options with an average exercise price of $40.05 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 September 30,								Nine Months Ended September 30,
		2013				2012				2013				2012
Total rental and management operations straight-line revenue		$	37,286			$	40,986			$	105,968			$	118,545
Total rental and management operations straight-line expense		$	6,293			$	8,118			$	21,319			$	26,147

 

(1)

In accordance with GAAP, the Company recognizes consolidated rental and management revenue and expense related to non-cancellable customer 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 September 30,								Nine Months Ended September 30,
International pass-through revenue detail:		2013				2012				2013				2012
Pass-through revenue		$	71,280			$	57,201			$	212,210			$	161,171

 

		Three Months Ended September 30,								Nine Months Ended September 30,
Pre-paid rent detail:		2013				2012				2013				2012
Beginning balance		$	216,649			$	158,536			$	198,792			$	156,678
Cash			42,950				48,397				87,993				73,868
Amortization(1)			(15,561	)			(8,359	)			(42,748	)			(31,972	)
Ending balance		$	244,037			$	198,574			$	244,037			$	198,574

 

(1)

Includes the impact of fluctuations in foreign currency exchange rates.

 

		Three Months Ended September 30,								Nine Months Ended September 30,
Selling, general, administrative and development expense breakout:		2013				2012				2013				2012
Total rental and management overhead		$	56,251			$	45,198			$	165,417			$	129,071
Network development services segment overhead			1,880				2,127				7,105				4,410
Corporate and development expenses			24,939				21,516				74,251				66,099
Stock-based compensation expense			14,711				12,618				51,964				38,311
Total		$	97,781			$	81,459			$	298,737			$	237,891

 

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 September 30, 2013		Total Rental and Management Revenue				Adjusted EBITDA				AFFO
Core Growth			18.5	%			17.4	%			25.9	%
Estimated impact of fluctuations in foreign currency exchange rates			(2.8	)%			(1.9	)%			(2.7	)%
Impact of straight-line revenue recognition			(1.4	)%			(1.5	)%			—
Impact of material one-time items			—				—				1.2	%
Reported growth			14.2	%			13.9	%			24.4	%
Nine Months Ended September 30, 2013
Core Growth			18.9	%			17.2	%			21.7	%
Estimated impact of fluctuations in foreign currency exchange rates			(1.8	)%			(1.2	)%			(1.9	)%
Impact of straight-line revenue recognition			(1.6	)%			(1.6	)%			—
Impact of material one-time items			(0.9	)%			(1.0	)%			(2.0	)%
Reported growth			14.5	%			13.3	%			17.7	%

SELECTED CASH FLOW DETAIL:

 

		Three Months Ended September 30,								Nine Months Ended September 30,
Payments for purchase of property and equipment and construction activities:		2013				2012				2013				2012
Discretionary - capital projects		$	80,733			$	78,894			$	210,860			$	192,165
Discretionary - ground lease purchases			22,656				21,273				54,516				48,462
Start-up capital projects			7,597				11,253				22,133				18,915
Redevelopment			30,004				17,748				75,087				58,703
Capital improvements			18,724				16,189				61,048				44,587
Corporate			7,930				5,267				24,605				14,194
Total		$	167,644			$	150,624			$	448,249			$	377,026

SELECTED PORTFOLIO DETAIL – OWNED SITES:

 

Tower Count (1):		As of June 30, 2013				Constructed				Acquired				Adjustments				As of September 30, 2013
United States (2)			22,720				48				3				(17	)			22,754
Brazil			4,482				29				—				—				4,511
Chile			1,182				2				1				(36	)			1,149
Colombia			3,104				47				294				(16	)			3,429
Germany			2,031				—				—				—				2,031
Ghana			1,931				14				9				—				1,954
India			10,774				215				—				(30	)			10,959
Mexico (3)			6,721				65				20				—				6,806
Peru			499				—				—				—				499
South Africa			1,629				10				189				—				1,828
Uganda			1,120				35				—				(7	)			1,148
Total			56,193				465				516				(106	)			57,068

 

(1)

Excludes in-building and outdoor distributed antenna system networks.

(2)

Includes 274 broadcast towers.

(3)

Includes 199 broadcast towers.

 

13

---

UNAUDITED RECONCILIATIONS TO GAAP MEASURES AND THE CALCULATION OF DEFINED FINANCIAL MEASURES

(In thousands, except per share data and 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 September 30,								Nine Months Ended September 30,
		2013				2012				2013				2012
Net income		$	163,222			$	231,825			$	408,283			$	475,872
Income from equity method investments			—				(2	)			—				(25	)
Income tax provision			15,586				13,054				23,361				64,117
Other expense (income)			29,622				(46,294	)			148,991				19,468
Loss on retirement of long-term obligations			—				—				37,967				398
Interest expense			106,335				102,272				318,916				297,622
Interest income			(2,342	)			(1,717	)			(5,468	)			(6,253	)
Other operating expenses			15,469				7,359				35,686				35,150
Depreciation, amortization and accretion			184,922				144,061				555,334				465,788
Stock-based compensation expense			15,058				13,058				53,155				39,654
Adjusted EBITDA		$	527,872			$	463,616			$	1,576,225			$	1,391,791
Divided by total revenue			807,880				713,335				2,419,438				2,107,586
Adjusted EBITDA Margin			65	%			65	%			65	%			66	%

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 September 30,								Nine Months Ended September 30,
		2013				2012				2013				2012
Net Income		$	163,222			$	231,825			$	408,283			$	475,872
Real estate related depreciation, amortization and accretion			160,976				122,944				485,328				407,970
Losses from sale or disposal of real estate and real estate related impairment charges			6,160				1,901				8,830				7,911
Adjustments for unconsolidated affiliates and noncontrolling interest			10,516				(6,338	)			22,159				10,135
NAREIT Funds From Operations		$	340,874			$	350,332			$	924,600			$	901,888
Straight-line revenue			(37,286	)			(40,986	)			(105,968	)			(118,545	)
Straight-line expense			6,293				8,118				21,319				26,147
Stock-based compensation expense			15,058				13,058				53,155				39,654
Non-cash portion of tax provision			9,567				(2,635	)			189				35,652
Non-real estate related depreciation, amortization and accretion			23,946				21,117				70,006				57,818
Amortization of deferred financing costs, capitalized interest, debt discounts and premiums and long-term deferred interest charges			7,127				2,254				22,049				6,516
Other expense (income) (1)			29,622				(46,294	)			148,991				19,468
Loss on retirement of long-term obligations			—				—				37,967				398
Other operating expense (2)			9,309				5,458				26,856				27,239
Capital improvement capital expenditures (3)			(18,724	)			(16,189	)			(61,048	)			(44,587	)
Corporate capital expenditures			(7,930	)			(5,268	)			(24,605	)			(14,194	)
Adjustments for unconsolidated affiliates and noncontrolling interest			(10,516	)			6,338				(22,159	)			(10,135	)
Adjusted Funds From Operations		$	367,340			$	295,303			$	1,091,352			$	927,319
Divided by weighted average diluted shares outstanding			398,348				399,487				399,275				399,084
Adjusted Funds From Operations per Share		$	0.92			$	0.74			$	2.73			$	2.32

 

(1)

Primarily includes unrealized (gain) loss on foreign currency exchange rate fluctuations.

(2)

Primarily includes transaction related costs.

(3)

2012 amounts adjusted to exclude the category of capital expenditures, start-up capital projects.

 

14