BOSTON--(BUSINESS WIRE)--American Tower Corporation (NYSE: AMT) today reported financial results for the fourth quarter and full year ended December 31, 2011.
Jim Taiclet, American Tower’s Chief Executive Officer stated, “In 2007, we set out to achieve a goal of simultaneously doubling the size of our communications site portfolio and our Adjusted EBITDA over a five year time horizon. Based on the outlook we have provided today, we expect to accomplish these strategic objectives in 2012, primarily due to our extension of the tower leasing business model into select international markets and the continued growth of our U.S. business. In addition, at the beginning of 2012, we completed another key milestone, with our successful conversion to a real estate investment trust. We intend to sustain our focus on disciplined asset growth and operational excellence as the global leader in wireless communications real estate leasing.”
FOURTH QUARTER 2011 OPERATING RESULTS OVERVIEW
American Tower generated the following operating results for the quarter ended December 31, 2011 (unless otherwise indicated, all comparative information is presented against the quarter ended December 31, 2010).
Total revenue increased 19.3% to $653.2 million and total rental and management revenue increased 19.5% to $640.9 million. Total rental and management Gross Margin increased 17.7% to $486.9 million. Total selling, general, administrative and development expense was $73.9 million, including $10.7 million of stock-based compensation expense. Adjusted EBITDA increased 17.3% to $428.6 million, and the Adjusted EBITDA Margin was 66%.
Total rental and management revenue Core Growth was approximately 23.0% and Core Growth in Adjusted EBITDA was approximately 18.2%. The selected statement of operations detail on page 14 highlights the items that affected these Core Growth percentages.
Operating income increased 21.8% to $247.7 million, while net income attributable to American Tower Corporation increased 141.1% to $201.3 million. Net income attributable to American Tower Corporation per basic and diluted common share both increased 142.9% to $0.51. Net income attributable to American Tower Corporation reflects the positive net impact of approximately $121.0 million due to the reversal of certain deferred tax assets and liabilities resulting from the Company’s conversion to a real estate investment trust (REIT).
Recurring Free Cash Flow (RFCF) increased 12.1% to $255.8 million, and RFCF per share increased 12.3% to $0.64. Given the Company’s conversion to a REIT, the Company will continue to provide RFCF through 2012 but plans to replace this metric with Adjusted Funds From Operations (AFFO) thereafter, given the similar nature of the two metrics. AFFO is presented on a pro forma basis as if the Company’s conversion to a REIT had occurred on January 1, 2010. Pro forma AFFO increased 16.0% to $278.0 million, and pro forma AFFO per share increased 18.6% to $0.70. Core Growth in pro forma AFFO was approximately 18.8%.
Cash provided by operating activities increased 28.2% to $315.9 million.
Segment Results
Domestic Rental and Management Segment – Domestic rental and management segment revenue increased 10.6% to $464.9 million, which represented 71% of total revenues. Domestic rental and management segment Gross Margin increased 11.3% to $373.3 million, while domestic rental and management segment Operating Profit increased 11.9% to $352.8 million.
International Rental and Management Segment – International rental and management segment revenue increased 52.0% to $175.9 million, which represented 27% of total revenues. International rental and management segment Gross Margin increased 45.3% to $113.6 million, while international rental and management segment Operating Profit increased 43.4% to $92.1 million.
Network Development Services Segment – Network development services segment revenue was $12.3 million, which represented 2% of total revenues. Network development services segment Gross Margin was $4.8 million, and network development services segment Operating Profit was $2.1 million.
FULL YEAR 2011 OPERATING RESULTS OVERVIEW
American Tower generated the following operating results for the full year ended December 31, 2011 (unless otherwise indicated, all comparative information is presented against the full year ended December 31, 2010).
Total revenue increased 23.1% to $2,443.5 million and total rental and management revenue increased 23.2% to $2,386.2 million. Total rental and management Gross Margin increased 20.5% to $1,811.2 million. Total selling, general, administrative and development expense was $288.8 million, including $45.1 million of stock-based compensation expense. Adjusted EBITDA increased 18.4% to $1,595.4 million, and the Adjusted EBITDA Margin was 65%.
Total rental and management revenue Core Growth was approximately 22.6% and Core Growth in Adjusted EBITDA was approximately 16.4%. The selected statement of operations detail on page 14 highlights the items that affected Core Growth percentages.
Operating income increased 17.3% to $920.1 million, and net income attributable to American Tower Corporation increased 5.3% to $392.7 million. Net income attributable to American Tower Corporation per basic common share increased 6.5% to $0.99, and net income attributable to American Tower Corporation per diluted common share increased 6.5% to $0.98.
RFCF increased 7.7% to $989.2 million and RFCF per share increased 8.8% to $2.47. Pro forma AFFO increased 12.0% to $1,067.2 million, and pro forma AFFO per share increased 13.1% to $2.67. Core growth in pro forma AFFO was approximately 10.9%.
Cash provided by operating activities increased 14.2% to $1,165.9 million.
Segment Results
Domestic Rental and Management Segment – Domestic rental and management segment revenue increased 11.4% to $1,744.3 million, which represented 72% of total revenues. Domestic rental and management segment Gross Margin increased 12.2% to $1,390.8 million, while domestic rental and management segment Operating Profit increased 11.5% to $1,313.8 million.
International Rental and Management Segment – International rental and management segment revenue increased 73.1% to $641.9 million, which represented 26% of total revenues. International rental and management segment Gross Margin increased 60.0% to $420.4 million, while international rental and management segment Operating Profit increased 55.9% to $338.3 million.
Network Development Services Segment – Network development services segment revenue was $57.3 million, which represented 2% of total revenues. Network development services Gross Margin was $27.9 million, and network development services segment Operating Profit was $20.0 million.
Please refer to Non-GAAP and Defined Financial Measures on pages 6 and 7 for definitions of Gross Margin, Operating Profit, Adjusted EBITDA, Adjusted EBITDA Margin, Recurring Free Cash Flow, Recurring Free Cash Flow per Share, pro forma Funds From Operations, pro forma Adjusted Funds From Operations, pro forma Adjusted Funds From Operations per Share, and Core Growth. For additional financial information, including reconciliations to GAAP measures, please refer to the unaudited selected financial information on pages 12 through 17.
FOURTH QUARTER INVESTING OVERVIEW
Cash Paid for Capital Expenditures – During the fourth quarter, total capital expenditures of $125.9 million included $75.0 million for discretionary capital projects, including the construction of 72 communications sites domestically and 626 communications sites internationally and the installation of 286 shared generators on the Company’s domestic sites; $11.0 million to purchase land under its communications sites; $18.0 million for the redevelopment of existing communications sites to accommodate new tenant equipment; and $21.9 million for capital improvements and corporate capital expenditures.
Cash Paid for Acquisitions – During the fourth quarter, total payments for acquisitions were approximately $1,100.1 million, which included the purchase of 56 communications sites and 2,147 property interests domestically, and 4,816 communications sites internationally.
Stock Repurchase Program – During the fourth quarter, the Company repurchased a total of 0.6 million shares of its common stock for approximately $30.8 million pursuant to its stock repurchase program. Between January 1, 2012 and February 6, 2012, the Company repurchased an additional 0.04 million shares of its common stock for an aggregate of approximately $2.3 million.
Pre-REIT Distribution - Prior to its conversion to a REIT, on December 23, 2011, the Company paid a special one-time distribution to stockholders in the amount of approximately $137.8 million, or $0.35 per share of common stock.
FULL YEAR 2011 INVESTING OVERVIEW
Cash Paid for Capital Expenditures – During 2011, total capital expenditures of $523.0 million included $296.9 million for discretionary capital projects, including the construction of 276 communications sites domestically and 1,572 communications sites internationally and the installation of 682 shared generators on the Company’s domestic sites; $91.3 million to purchase land under its communications sites; $55.3 million for the redevelopment of existing communications sites to accommodate new tenant equipment; and $79.5 million for capital improvements and corporate capital expenditures.
Cash Paid for Acquisitions - During 2011, total payments for acquisitions were approximately $2,320.7 million, which included the purchase of 191 communications sites and 2,147 property interests domestically, and 8,430 communications sites internationally.
Stock Repurchase Programs – During 2011, the Company repurchased a total of 8.1 million shares of its common stock for approximately $423.9 million pursuant to its stock repurchase programs.
Pre-REIT Distribution - Prior to its conversion to a REIT, on December 23, 2011, the Company paid a special one-time distribution to stockholders in the amount of approximately $137.8 million, or $0.35 per share of common stock.
RECENT ACQUISITIONS
The Company continued to expand its geographic footprint domestically and internationally during the fourth quarter of 2011. Domestic acquisitions that occurred during the fourth quarter include:
- 56 communications sites; and
- 2,147 property interests.
International acquisitions that occurred during the fourth quarter include:
- 2,006 communications sites in Mexico;
- 1,489 communications sites in Colombia;
- 686 communications sites in Ghana;
- 559 communications sites in Chile; and
- 76 communications sites in South Africa.
The Company expects to close on approximately 750 additional communications sites in Colombia, approximately 500 additional communications sites in Mexico and approximately 1,000 communications sites in Uganda during the first half of 2012.
FINANCING UPDATE
As of the quarter ended December 31, 2011, the Company’s net leverage ratio was approximately 4.0x net debt to last quarter annualized Adjusted EBITDA.
As of December 31, 2011, the Company had approximately $1,577.2 million of total liquidity, comprised of $330.2 million in cash and cash equivalents, the ability to borrow an aggregate of approximately $1,247.0 million under its revolving credit facilities, net of any outstanding letters of credit.
In January 2012, the Company entered into a new $1.0 billion unsecured revolving credit facility (2012 Credit Facility). In connection with the completion of the 2012 Credit Facility, the Company borrowed $625.0 million under its 2011 $1.0 billion unsecured revolving credit facility (2011 Credit Facility) and $700.0 million under its 2012 Credit Facility, and used those borrowings, together with cash on hand, to repay all outstanding amounts and accrued interest under the Company's 2007 $1.25 billion unsecured revolving credit facility (2007 Credit Facility) and $325 million term loan, both of which were due to expire in June 2012. The 2007 Credit Facility was terminated upon repayment.
FULL YEAR 2012 OUTLOOK
The following estimates are based on a number of assumptions that management believes to be reasonable and reflect the Company’s expectations as of February 23, 2012. These estimates exclude any impacts from transactions that have not yet closed. Actual results may differ materially from these estimates as a result of various factors and the Company refers you to the cautionary language regarding “forward-looking” statements included in this press release when considering this information.
The Company’s outlook is based on the following average foreign currency exchange rates to 1.0 U.S. Dollar for the full year 2012: (a) 1.80 Brazilian Reais; (b) 500 Chilean Pesos; (c) 1,860 Colombian Pesos; (d) 1.60 Ghanian Cedi; (e) 51.50 Indian Rupees; (f) 13.25 Mexican Pesos; (g) 2.70 Peruvian Soles; and (h) 8.20 South African Rand.
| ($ in millions) | Full Year 2012 |
Midpoint |
Midpoint |
|||||||||
| Total rental and management revenue | $2,670 | to | $2,710 | 12.7% | 16.2% | |||||||
| Adjusted EBITDA (1) | 1,745 | to | 1,785 | 10.6% | 13.8% | |||||||
| Adjusted Funds From Operations(1) | 1,158 | to | 1,173 | 9.2% | 13.6% | |||||||
| Net Income | 660 | to | 680 | 75.5% | 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 $1,875 million; and (2) international rental and management segment revenue of $815 million, which includes approximately $220 million of pass-through revenue.
| The calculation of midpoint Core Growth is as follows: | |||||||
|
|
Total Rental and |
Adjusted |
AFFO(1) | ||||
| Outlook midpoint Core Growth | 16.2% | 13.8% | 13.6% | ||||
| Estimated impact of fluctuations in foreign currency exchange rates | (2.4)% | (1.9)% | (2.5)% | ||||
| Impact of straight-line revenue and expense recognition | (0.9)% | (0.8)% | --- | ||||
| Impact of significant one-time items | (0.1)% | (0.4)% | (1.9)% | ||||
| Outlook midpoint growth | 12.7% | 10.6% | 9.2% | ||||
| __________________________ | |||||||
| (1) Core Growth in AFFO reflects approximately $15 million of one-time start-up capital improvement capital expenditures related to our joint ventures in Colombia and Ghana. | |||||||
|
Outlook for Capital Expenditures:
($ in millions) |
Full Year 2012 | |||||||
| Capital improvement | $70 | to | $80 | |||||
| Corporate | 15 | - | 15 | |||||
| Redevelopment | 65 | to | 75 | |||||
| Ground lease purchases | 90 | to | 100 | |||||
| Discretionary capital projects(1) | 260 | to | 330 | |||||
| Total | $500 | to | $600 | |||||
| __________________________ | ||||||||
| (1) Includes the construction of approximately 1,800 to 2,200 new communications sites. | ||||||||
|
Reconciliations of Outlook for Net Income to Adjusted EBITDA: |
||||||||
| ($ in millions) | Full Year 2012 | |||||||
| Net income | $660 | to | $680 | |||||
| Interest expense | 365 | to | 375 | |||||
| Depreciation, amortization and accretion | 630 | to | 640 | |||||
| Stock-based compensation expense | 50 | to | 55 | |||||
|
Other, including other operating expenses, interest income, loss on retirement of long-term obligations, income (loss) on equity method investments, other income (expense) and income tax provision (benefit) |
40 | to | 35 | |||||
| Adjusted EBITDA | $1,745 | to | $1,785 | |||||
|
Reconciliations of Outlook for Net Income to Adjusted Funds From Operations: |
||||||||
| ($ in millions) | Full Year 2012 | |||||||
| Net income | $660 | to | $680 | |||||
| Straight-line revenue | (144) | - | (144) | |||||
| Straight-line expense | 31 | - | 31 | |||||
| Depreciation, amortization and accretion | 630 | to | 640 | |||||
| Stock-based compensation expense | 50 | to | 55 | |||||
| Other, including other operating expenses, interest expense, amortization of deferred financing costs, debt discounts and capitalized interest, loss on retirement of long-term obligations, income (loss) on equity method investments and other (income) expense | 16 | to | 6 | |||||
| Capital improvement capital expenditures | (70) | to | (80) | |||||
| Corporate capital expenditures | (15) | - | (15) | |||||
| Adjusted Funds From Operations | $1,158 | to | $1,173 | |||||
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, 2011, and its outlook for 2012. 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: 41397429 |
| When available, a replay of the call can be accessed until 11:59 p.m. ET on March 8, 2012. The replay dial-in numbers are as follows: |
|
U.S./Canada dial-in: (855) 859-2056 International dial-in: (404) 537-3406 Passcode: 41397429 |
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 global owner, operator and developer of wireless communications sites. American Tower currently owns and operates over 45,000 communications sites in the United States, Brazil, Chile, Colombia, Ghana, India, Mexico, Peru and South Africa. 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, Adjusted EBITDA, Adjusted EBITDA Margin, Recurring Free Cash Flow, Recurring Free Cash Flow per Share, Funds From Operations, Adjusted Funds From Operations, Adjusted Funds From Operations per Share, and Core Growth. The Company defines Gross Margin as revenues less operating expenses, excluding stock-based compensation expense. 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, income taxes and discontinued operations. 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 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. The Company defines Recurring Free Cash Flow as Adjusted EBITDA before straight-line revenue and expense, plus interest income, less interest expense, cash paid for income taxes and cash payments related to redevelopment, capital improvement and corporate capital expenditures. The Company defines Recurring Free Cash Flow per Share as Recurring Free Cash Flow divided by the diluted weighted average common shares outstanding. The Company defines Funds From Operations as net income before real estate related depreciation, amortization and accretion. The Company defines Adjusted Funds From Operations as Funds From Operations before straight-line revenue and expense, stock-based compensation expense, non-real estate related depreciation, amortization and accretion, amortization of deferred financing costs, debt discounts and capitalized interest, other (income) expense, loss on retirement of long-term obligations, other operating (income) expense, 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. Pro forma Funds From Operations and Adjusted Funds From Operations reflect adjustments for income tax provision on a pro forma basis as if the REIT conversion had occurred on January 1, 2010. The Company defines Core Growth in total rental and management revenue and Adjusted EBITDA 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. 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, Adjusted EBITDA, Adjusted EBITDA Margin, Recurring Free Cash Flow, Recurring Free Cash Flow per Share, Funds From Operations, Adjusted Funds From Operations, Adjusted Funds From Operations per Share, and Core Growth 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 2012 outlook, our pending acquisitions, including anticipated closing dates and expected purchase prices, 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 consolidate or merge with each other to a significant degree, our growth, revenue and ability to generate positive cash flows could be materially and adversely affected; (3) new technologies or changes in a tenant’s business model could make our tower leasing business less desirable and result in decreasing revenues; (4) our expansion initiatives may disrupt our operations or expose us to additional risk if we are not able to successfully integrate operations, assets and personnel; (5) we could suffer adverse tax and other financial consequences if taxing authorities do not agree with our tax positions; (6) due to the long-term expectations of revenue from tenant leases, we are sensitive to changes in the creditworthiness and financial strength of our tenants; (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) we anticipate that we may need additional financing to fund capital expenditures, to fund future growth and expansion initiatives and to return capital to our stockholders; (9) a substantial portion of our revenue is derived from a small number of tenants; (10) increasing competition in the tower industry may create pricing pressures that may materially and adversely affect us; (11) 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; (12) 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; (13) if we are unable to protect our rights to the land under our towers, it could adversely affect our business and operating results; (14) our leverage and debt service obligations may materially and adversely affect us; (15) restrictive covenants in the loan agreements related to our Securitization, the loan agreements for the credit facilities and the indentures governing our debt securities could materially and adversely affect our business by limiting flexibility; (16) we could have liability under environmental laws; (17) our towers or data centers may be affected by natural disasters and other unforeseen damage for which our insurance may not provide adequate coverage; (18) our costs could increase and our revenues could decrease due to perceived health risks from radio emissions, especially if these perceived risks are substantiated; (19) if we fail to qualify as a REIT or fail to remain qualified as a REIT, we would be subject to tax at corporate income tax rates and would not be able to deduct distributions to stockholders when computing our taxable income; (20) as a REIT, failure to make required distributions would subject us to federal corporate income tax; (21) covenants specified in our existing and future debt instruments may limit our ability to make required REIT distributions; (22) our cash distributions may fluctuate; (23) even if we qualify as a REIT, certain of our business activities will be subject to corporate level income tax and foreign taxes, which will continue to reduce our cash flows, and we will have potential deferred and contingent tax liabilities; (24) we may be required to borrow funds, sell assets or raise equity to satisfy our REIT distribution requirements or maintain the asset ownership tests; (25) complying with REIT requirements may limit our flexibility or cause us to forego otherwise attractive opportunities; (26) as a REIT, we will be limited in our ability to fund distribution payments using cash generated through our taxable REIT subsidiaries (TRSs); (27) our planned extensive use of TRSs, in particular for our international operations, may cause us to fail to qualify as a REIT; (28) complying with REIT requirements may limit our ability to hedge effectively and increase the cost of our hedging, and may cause us to incur tax liabilities; (29) we have no experience operating as a REIT, which may adversely affect our financial condition, results of operations, cash flow, per share trading price of our common stock and ability to satisfy debt service obligations; and (30) legislative or other actions affecting REITs could have a negative effect on us. 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 nine months ended September 30, 2011. We undertake no obligation to update the information contained in this press release to reflect subsequently occurring events or circumstances.
ADDITIONAL INFORMATION
Effective December 31, 2011, American Tower was reorganized to qualify as a REIT for federal income tax purposes through a merger. At the time of the merger, all outstanding shares of the Company’s Class A common stock were converted into a right to receive an equal number of shares of common stock of the surviving corporation. Accordingly, references in this press release to “American Tower,” “the Company,” “we” and “our” refer to American Tower Corporation or its predecessor, as applicable and references to “common stock” refer to the Company’s common stock and Class A common stock of its predecessor, as applicable.
| UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS | ||||||
| (In thousands) | ||||||
|
December 31, 2011 |
December 31, 2010 (1) |
|||||
| ASSETS | ||||||
| Current assets: | ||||||
| Cash and cash equivalents | $330,191 | $883,963 | ||||
| Restricted cash | 42,775 | 75,972 | ||||
| Short-term investments and available-for-sale securities | 22,270 | 46,428 | ||||
| Accounts receivable, net | 100,971 | 81,479 | ||||
| Prepaid and other current assets | 316,968 | 145,599 | ||||
| Deferred income taxes | 29,596 | 174,788 | ||||
| Total current assets | 842,771 | 1,408,229 | ||||
| Property and equipment, net | 4,883,473 | 3,683,474 | ||||
| Goodwill | 2,805,267 | 2,511,907 | ||||
| Other intangible assets, net | 2,351,955 | 1,885,866 | ||||
| Deferred income taxes | 245,607 | 92,162 | ||||
| Deferred rent asset | 609,529 | 470,637 | ||||
| Notes receivable and other long-term assets | 493,828 | 317,809 | ||||
| Total | $12,232,430 | $10,370,084 | ||||
| LIABILITIES AND STOCKHOLDERS' EQUITY | ||||||
| Current liabilities: | ||||||
| Accounts payable | $214,739 | $67,124 | ||||
| Accrued expenses | 304,208 | 222,685 | ||||
| Accrued interest | 65,729 | 40,621 | ||||
| Current portion of long-term obligations | 101,816 | 74,896 | ||||
| Unearned revenue | 93,099 | 134,135 | ||||
| Total current liabilities | 779,591 | 539,461 | ||||
| Long-term obligations | 7,134,492 | 5,512,492 | ||||
| Asset retirement obligations | 346,059 | 341,838 | ||||
| Other long-term liabilities | 562,146 | 471,735 | ||||
| Total liabilities | 8,822,288 | 6,865,526 | ||||
| STOCKHOLDERS' EQUITY | ||||||
| Common stock | 3,936 | 4,860 | ||||
| Additional paid-in capital | 4,903,800 | 8,577,093 | ||||
| Accumulated deficit | (1,481,676) | (1,736,596) | ||||
| Accumulated other comprehensive (loss) income | (142,617) | 38,053 | ||||
| Treasury stock (2) | - | (3,381,966) | ||||
| Total American Tower Corporation stockholders' equity | 3,283,443 | 3,501,444 | ||||
| Noncontrolling interest | 126,699 | 3,114 | ||||
| Total stockholders' equity | 3,410,142 | 3,504,558 | ||||
| Total | $12,232,430 | $10,370,084 | ||||
| (1) December 31, 2010 balances have been revised to reflect purchase accounting measurement period adjustments. | ||||||
| (2) As part of the REIT Conversion, effective December 31, 2011, the Company completed the merger with its predecessor, that was approved by the Company’s stockholders in November 2011. At the time of the merger, each share of Class A common stock of American Tower held in treasury at December 31, 2011 ceased to be outstanding, and a corresponding adjustment was recorded to additional paid-in capital and common stock. | ||||||
| UNAUDITED CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS | ||||||||
| (In thousands, except per share data) | ||||||||
|
Three Months Ended December 31, |
Twelve Months Ended December 31, |
|||||||
| 2011 | 2010 | 2011 | 2010 | |||||
| REVENUES: | ||||||||
| Rental and management | $640,883 | $536,253 | $2,386,185 | $1,936,373 | ||||
| Network development services | 12,316 | 11,389 | 57,347 | 48,962 | ||||
| Total operating revenues | 653,199 | 547,642 | 2,443,532 | 1,985,335 | ||||
| OPERATING EXPENSES: | ||||||||
| Costs of operations (exclusive of items shown separately below) | ||||||||
| Rental and management (including stock-based compensation expense of $252, $0, $1,105, and $0, respectively) | 157,818 | 126,042 | 590,272 | 447,629 | ||||
| Network development services (including stock-based compensation expense $314, 0, $1,224, and $0, respectively) | 7,800 | 6,903 | 30,684 | 26,957 | ||||
| Depreciation, amortization and accretion | 143,615 | 124,105 | 555,517 | 460,726 | ||||
| Selling, general, administrative and development expense (including stock-based compensation expense of $10,686, $12,410, $45,108, and $52,555 respectively) | 73,895 | 65,365 | 288,824 | 229,769 | ||||
| Other operating expenses | 22,333 | 21,786 | 58,103 | 35,876 | ||||
| Total operating expenses | 405,461 | 344,201 | 1,523,400 | 1,200,957 | ||||
| OPERATING INCOME | 247,738 | 203,441 | 920,132 | 784,378 | ||||
| OTHER INCOME (EXPENSE): | ||||||||
| Interest income, TV Azteca, (net of interest expense of $288, $372, $1,474, and $1,487, respectively) | 3,627 | 3,543 | 14,214 | 14,212 | ||||
| Interest income | 541 | 1,874 | 7,378 | 5,024 | ||||
| Interest expense | (85,119) | (68,623) | (311,854) | (246,018) | ||||
| Loss on retirement of long-term obligations | - | (1,851) | - | (1,886) | ||||
| Other (expense) income | (7,265) | (1,598) | (122,975) | 315 | ||||
| Total other expense | (88,216) | (66,655) | (413,237) | (228,353) | ||||
| INCOME FROM CONTINUING OPERATIONS BEFORE INCOME TAXES AND | ||||||||
| INCOME ON EQUITY METHOD INVESTMENTS | 159,522 | 136,786 | 506,895 | 556,025 | ||||
| Income tax benefit (provision) | 36,901 | (53,099) | (125,080) | (182,489) | ||||
| Income on equity method investments | 11 | 16 | 25 | 40 | ||||
| INCOME FROM CONTINUING OPERATIONS | 196,434 | 83,703 | 381,840 | 373,576 | ||||
| Income from discontinued operations, net | - | - | - | 30 | ||||
| NET INCOME | 196,434 | 83,703 | 381,840 | 373,606 | ||||
| Net income (loss) attributable to noncontrolling interest | 4,899 | (189) | 10,845 | (670) | ||||
| NET INCOME ATTRIBUTABLE TO AMERICAN TOWER CORPORATION | $201,333 | $ 83,514 | $392,685 | $372,936 | ||||
| NET INCOME ATTRIBUTABLE TO AMERICAN TOWER CORPORATION | ||||||||
| BASIC: | ||||||||
| Income from continuing operations attributable to American Tower Corporation | $0.51 | $0.21 | $0.99 | $ 0.93 | ||||
| Income from discontinued operations | - | - | - | - | ||||
| Net income attributable to American Tower Corporation | $0.51 | $0.21 | $0.99 | $ 0.93 | ||||
| DILUTED: | ||||||||
| Income from continuing operations attributable to American Tower Corporation | $0.51 | $0.21 | $ 0.98 | $ 0.92 | ||||
| Income from discontinued operations | - | - | - | - | ||||
| Net income attributable to American Tower Corporation | $0.51 | $0.21 | $ 0.98 | $ 0.92 | ||||
| WEIGHTED AVERAGE COMMON SHARES OUTSTANDING: | ||||||||
| BASIC | 393,347 | 398,970 | 395,711 | 401,152 | ||||
| DILUTED | 397,724 | 403,032 | 400,195 | 404,072 | ||||
| UNAUDITED CONDENSED CONSOLIDATED STATEMENT CASH FLOWS | ||||||
| (In thousands) | ||||||
|
Twelve Months Ended December 31, |
||||||
| 2011 | 2010 | |||||
| CASH FLOWS PROVIDED BY OPERATING ACTIVITIES: | ||||||
| Net income | $381,840 | 373,606 | ||||
| Adjustments to reconcile net income to cash provided by operating activities: | ||||||
| Stock-based compensation expense | 47,437 | 52,555 | ||||
| Depreciation, amortization and accretion | 555,517 | 460,726 | ||||
| Other non-cash items reflected in statements of operations | 243,648 | 223,641 | ||||
| Increase in net deferred rent asset | (113,042) | (82,957) | ||||
| Decrease (increase) in restricted cash | 11,867 | (4,941) | ||||
| Increase in assets | (72,516) | (67,808) | ||||
| Increase in liabilities | 111,191 | 66,155 | ||||
| Cash provided by operating activities | 1,165,942 | 1,020,977 | ||||
| CASH FLOWS USED FOR INVESTING ACTIVITIES: | ||||||
| Payments for purchase of property and equipment and construction activities | (523,015) | (346,664) | ||||
| Payments for acquisitions | (2,320,673) | (899,606) | ||||
|
Proceeds from sales of short-term investments, available-for-sale securities and other long-term assets |
69,971 | 21,722 | ||||
| Payments for short-term investments | (42,590) | (52,197) | ||||
| Deposits, restricted cash and other | 25,495 | (24,157) | ||||
| Cash used for investing activities | (2,790,812) | (1,300,902) | ||||
| CASH FLOWS PROVIDED BY FINANCING ACTIVITIES: | ||||||
| Proceeds from short-term borrowings | 128,121 | - | ||||
| Borrowings under credit facilities | 1,005,014 | 500,562 | ||||
| Proceeds from issuance of senior notes | 499,290 | 1,698,370 | ||||
| Proceeds from other long-term borrowings | 212,783 | - | ||||
| Repayments of notes payable, credit facilities and capital leases | (395,384) | (983,737) | ||||
| Purchases of common stock | (437,402) | (430,618) | ||||
| Proceeds from stock options, warrants and stock purchase plan | 85,642 | 138,508 | ||||
| Distribution to stockholders | (137,765) | - | ||||
| Contribution from (distribution to) noncontrolling interest holders, net | 140,880 | (599) | ||||
| Deferred financing costs and other financing activities | (15,084) | (12,156) | ||||
| Cash provided by financing activities | 1,086,095 | 910,330 | ||||
| Net effect of changes in foreign currency exchange rates on cash and cash equivalents | (14,997) | 6,265 | ||||
| NET (DECREASE) INCREASE IN CASH AND CASH EQUIVALENTS | (553,772) | 636,670 | ||||
| CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD | 883,963 | 247,293 | ||||
| CASH AND CASH EQUIVALENTS, END OF PERIOD | $330,191 | $883,963 | ||||
| CASH PAID FOR INCOME TAXES | $ 53,909 | $36,381 | ||||
| CASH PAID FOR INTEREST | $274,234 | $219,408 | ||||
| UNAUDITED RESULTS FROM OPERATIONS, BY SEGMENT | ||||||||||
| (In thousands) | ||||||||||
|
Three Months Ended December 31, 2011 |
||||||||||
| Rental and Management |
Network |
Total |
||||||||
| Domestic | International | Total | ||||||||
| Segment revenues | $464,945 | $175,938 | $640,883 | $12,316 | $653,199 | |||||
| Segment operating expenses (1) | 91,602 | 65,964 | 157,566 | 7,486 | 165,052 | |||||
| Interest income, TV Azteca, net | - | 3,627 | 3,627 | - | 3,627 | |||||
| Segment Gross Margin | 373,343 | 113,601 | 486,944 | 4,830 | 491,774 | |||||
| Segment selling, general, administrative | ||||||||||
| and development expense | 20,513 | 21,487 | 42,000 | 2,734 | 44,734 | |||||
| Segment Operating Profit | $352,830 | $92,114 | $444,944 | $2,096 | $447,040 | |||||
|
Three Months Ended December 31, 2010 |
||||||||||
| Rental and Management |
Network |
Total | ||||||||
| Domestic | International | Total | ||||||||
| Segment revenues | $420,504 | $115,749 | $536,253 | $11,389 | $547,642 | |||||
| Segment operating expenses (1) | 84,933 | 41,109 | 126,042 | 6,903 | 132,945 | |||||
| Interest income, TV Azteca, net | - | 3,543 | 3,543 | - | 3,543 | |||||
| Segment Gross Margin | 335,571 | 78,183 | 413,754 | 4,486 | 418,240 | |||||
| Segment selling, general, administrative | ||||||||||
| and development expense | 20,380 | 13,936 | 34,316 | 1,804 | 36,120 | |||||
| Segment Operating Profit | $315,191 | $64,247 | $379,438 | $2,682 | $382,120 | |||||
|
Twelve Months Ended December 31, 2011 |
||||||||||
| Rental and Management |
Network |
Total | ||||||||
| Domestic | International | Total | ||||||||
| Segment revenues | $1,744,260 | $641,925 | $2,386,185 | $57,347 | $2,443,532 | |||||
| Segment operating expenses (1) | 353,458 | 235,709 | 589,167 | 29,460 | 618,627 | |||||
| Interest income, TV Azteca, net | - | 14,214 | 14,214 | - | 14,214 | |||||
| Segment Gross Margin | 1,390,802 | 420,430 | 1,811,232 | 27,887 | 1,839,119 | |||||
| Segment selling, general, administrative | ||||||||||
| and development expense | 77,041 | 82,106 | 159,147 | 7,864 | 167,011 | |||||
| Segment Operating Profit | $1,313,761 | $338,324 | $1,652,085 | $20,023 | $1,672,108 | |||||
|
Twelve Months Ended December 31, 2010 |
||||||||||
| Rental and Management |
Network |
Total | ||||||||
| Domestic | International | Total | ||||||||
| Segment revenues | $1,565,474 | $370,899 | $1,936,373 | $48,962 | $1,985,335 | |||||
| Segment operating expenses (1) | 325,360 | 122,269 | 447,629 | 26,957 | 474,586 | |||||
| Interest income, TV Azteca, net | - | 14,212 | 14,212 | - | 14,212 | |||||
| Segment Gross Margin | 1,240,114 | 262,842 | 1,502,956 | 22,005 | 1,524,961 | |||||
| Segment selling, general, administrative | ||||||||||
| and development expense | 62,295 | 45,877 | 108,172 | 6,312 | 114,484 | |||||
| Segment Operating Profit | $1,177,819 | $216,965 | $1,394,784 | $15,693 | $1,410,477 | |||||
|
_________________________
(1) Excludes stock-based compensation expense. |
||||||||||
| 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, 2011 |
December 31, 2011 |
|||
| 2007 Credit Facility | 1,000,000 | - | |||
| Term Loan | 325,000 | - | |||
| 2011 Credit Facility | - | 625,000 | |||
| 2012 Credit Facility | - | 700,000 | |||
| 4.625% Senior Notes due 2015 | 599,489 | 599,489 | |||
| 7.000% Senior Notes due 2017 | 500,000 | 500,000 | |||
| 4.500% Senior Notes due 2018 | 999,313 | 999,313 | |||
| 7.250% Senior Notes due 2019 | 295,830 | 295,830 | |||
| 5.05% Senior Notes due 2020 | 699,258 | 699,258 | |||
| 5.900% Senior Notes due 2021 | 499,302 | 499,302 | |||
| Total Unsecured at American Tower Corporation | $4,918,192 | $4,918,192 | |||
| Commercial Mortgage Pass-Through Certificates, Series 2007-1 | 1,750,000 | 1,750,000 | |||
| Unison Notes (2) | 209,321 | 209,321 | |||
| South African facility (3) | 84,920 | 84,920 | |||
| Colombian short-term credit facility (4) | 72,811 | 72,811 | |||
| Colombian bridge loan (4) | 26,780 | 26,780 | |||
| Ghana Loan (5) | 127,466 | 127,466 | |||
| Other debt, including capital leases | 46,818 | 46,818 | |||
| Total Secured or Subsidiary Debt | 2,318,116 | 2,318,116 | |||
| Total debt | $7,236,308 | $7,236,308 | |||
| Cash and cash equivalents | 330,191 | ||||
| Net debt (total debt less cash and cash equivalents) | $6,906,117 | ||||
| ___________ | |||||
| (1) | Pro forma for the Company’s repayment and termination of the 2007 Credit Facility and repayment of the Term Loan on January 31, 2012 and borrowings under the 2011 Credit Facility and 2012 Credit Facility. | ||||
| (2) | The Unison Notes are secured debt and were assumed as a result of the acquisition. | ||||
| (3) | The South African facility is a long-term facility, denominated in South African Rand. | ||||
| (4) | The Colombian short-term credit facility and Colombian bridge loan are denominated in Colombian Pesos. | ||||
| (5) | The Ghana Loan is denominated in U.S. Dollars. | ||||
| Reconciliation of Net Leverage ($ in thousands) |
Three Months Ended |
||
| Total debt | $7,236,308 | ||
| Cash and cash equivalents | 330,191 | ||
| Numerator: net debt (total debt less cash and cash equivalents) | $6,906,117 | ||
| Adjusted EBITDA | $428,565 | ||
| Denominator: annualized Adjusted EBITDA | 1,714,260 | ||
| Net leverage ratio | 4.0x |
|
UNAUDITED SELECTED FINANCIAL INFORMATION (In thousands, except where noted. Totals may not add due to rounding.) |
|||||||
| Share count rollforward: (in millions of shares) |
Three Months Ended |
Twelve Months Ended |
|||||
| Total common shares, beginning of period | 393.5 | 398.7 | |||||
| Common shares repurchased | (0.6) | (8.1) | |||||
| Common shares issued | 0.7 | 3.0 | |||||
| Total common shares outstanding, end of period (1) | 393.6 | 393.6 | |||||
|
___________ |
|||||||
| (1) | As of December 31, 2011, excludes (a) 3.7 million potentially dilutive shares associated with vested and exercisable stock options with an average exercise price of $33.69 per share, (b) 2.7 million potentially dilutive shares associated with unvested stock options, and (c) 2.1 million potentially dilutive shares associated with unvested restricted stock units. | ||||||
|
SELECTED STATEMENT OF OPERATIONS DETAIL (Totals may not add due to rounding.) |
|||||||
| The following table reflects the estimated impact of foreign currency exchange rate fluctuations, straight-line revenue and expense recognition and significant one-time items on total rental and management revenue and Adjusted EBITDA: | |||||||
| The calculation of Core Growth is as follows: | |||||||
|
Three Months Ended December 31, 2011 |
Total Rental and |
Adjusted |
Pro |
||||
| Core Growth | 23.0% | 18.2% | 18.8% | ||||
| Estimated impact of fluctuations in foreign currency exchange rates | (2.5)% | (1.9)% | (2.8)% | ||||
| Impact of straight-line revenue and expense recognition | 1.2% | 1.1% | - | ||||
| Impact of significant one-time items | (2.1)% | - | - | ||||
| Reported growth | 19.5% | 17.3% | 16.0% | ||||
|
Twelve Months Ended December 31, 2011 |
Total Rental and |
Adjusted |
Pro |
||||
| Core Growth | 22.6% | 16.4% | 10.9% | ||||
| Estimated impact of fluctuations in foreign currency exchange rates | 0.4% | 0.4% | 0.6% | ||||
| Impact of straight-line revenue and expense recognition | 0.8% | 1.2% | - | ||||
| Impact of significant one-time items | (0.5)% | 0.4% | 0.5% | ||||
| Reported growth | 23.2% | 18.4% | 12.0% | ||||
| Total rental and management straight-line revenue and expense: | |||||||||
| In accordance with GAAP, the Company recognizes consolidated rental and management revenue and expense related to non-cancelable 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, 2010 in the section entitled "Revenue Recognition," of note 1, "Business and Summary of Significant Accounting Policies" within the notes to the consolidated financial statements. 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, is as follows: | |||||||||
|
Three Months Ended December 31, |
Twelve Months Ended December 31, |
||||||||
| 2011 | 2010 | 2011 | 2010 | ||||||
| Total rental and management operations straight-line revenue | $50,994 | $37,421 | $143,994 | $105,226 | |||||
| Total rental and management operations straight-line expense | 7,827 | 3,867 | $30,952 | $22,269 | |||||
|
UNAUDITED SELECTED FINANCIAL INFORMATION
(In thousands. Totals may not add due to rounding.) |
||||||||
|
Three Months Ended December 31, |
Twelve Months Ended December 31, |
|||||||
| Selling, general, administrative and development expense breakout: | 2011 | 2010 | 2011 | 2010 | ||||
| Total rental and management overhead | $42,000 | $34,316 | $159,147 | $108,172 | ||||
| Network development services segment overhead | 2,734 | 1,804 | 7,864 | 6,312 | ||||
| Corporate and development expenses | 18,475 | 16,835 | 76,705 | 62,730 | ||||
| Stock-based compensation expense | 10,686 | 12,410 | 45,108 | 52,555 | ||||
| Total | $73,895 | $65,365 | $288,824 | $229,769 | ||||
| SELECTED CASH FLOW DETAIL: | ||||||||
|
Three Months Ended December 31, |
Twelve Months Ended December 31, |
|||||||
| Payments for purchase of property and equipment and construction activities: | 2011 | 2010 | 2011 | 2010 | ||||
| Discretionary - capital projects | $74,996 | $61,238 | $296,906 | $194,441 | ||||
| Discretionary - ground lease purchases | 11,012 | 33,612 | 91,292 | 83,454 | ||||
| Redevelopment | 18,020 | 9,178 | 55,301 | 25,763 | ||||
| Capital improvements | 16,714 | 10,315 | 60,829 | 31,404 | ||||
| Corporate | 5,184 | 3,841 | 18,687 | 11,602 | ||||
| Total | $125,926 | $118,184 | $523,015 | $346,664 | ||||
| SELECTED PORTFOLIO DETAIL - OWNED SITES: | ||||||||
| Three months ended December 31, 2011 | Wireless | Broadcast | DAS | Total | ||||
| Beginning sites | 39,196 | 473 | 258 | 39,927 | ||||
| New construction | 690 | - | 8 | 698 | ||||
| Acquisitions | 4,872 | - | - | 4,872 | ||||
| Adjustments/Reductions | (17) | - | (2) | (19) | ||||
| Ending sites | 44,741 | 473 | 264 | 45,478 | ||||
| As of December 31, 2011 | Wireless | Broadcast | DAS | Total | ||||
| Domestic | 21,043 | 274 | 258 | 21,575 | ||||
| International | 23,698 | 199 | 6 | 23,903 | ||||
| Total sites | 44,741 | 473 | 264 | 45,478 | ||||
| International Supplemental Detail as of December 31, 2011 | Wireless | Broadcast | DAS | Total | ||||
| Brazil | 2,502 | - | 3 | 2,505 | ||||
| Chile | 1,142 | - | - | 1,142 | ||||
| Colombia | 2,677 | - | - | 2,677 | ||||
| Ghana | 1,872 | - | - | 1,872 | ||||
| India | 8,801 | - | - | 8,801 | ||||
| Mexico | 4,865 | 199 | 3 | 5,067 | ||||
| Peru | 475 | - | - | 475 | ||||
| South Africa | 1,364 | - | - | 1,364 | ||||
| Total International sites | 23,698 | 199 | 6 | 23,903 | ||||
| UNAUDITED RECONCILIATIONS TO GAAP MEASURES AND THE CALCULATION OF DEFINED FINANCIAL MEASURES | ||||||||
| (In thousands, except where noted. Totals may not add due to rounding.) | ||||||||
| The reconciliation of net income to Adjusted EBITDA and the calculation of Recurring Free Cash Flow, Recurring Free Cash Flow per Share and Adjusted EBITDA Margin are as follows: | ||||||||
|
Three Months Ended December 31, |
Twelve Months Ended December 31, |
|||||||
| 2011 | 2010 | 2011 | 2010 | |||||
| Net income | $196,434 | $83,703 | $381,840 | $373,606 | ||||
| Income from discontinued operations, net | - | - | - | (30) | ||||
| Income from continuing operations | 196,434 | 83,703 | 381,840 | 373,576 | ||||
| Income from equity method investments | (11) | (16) | (25) | (40) | ||||
| Income tax (benefit) provision | (36,901) | 53,099 | 125,080 | 182,489 | ||||
| Other expense (income) | 7,265 | 1,598 | 122,975 | (315) | ||||
| Loss on retirement of long-term obligations | - | 1,851 | - | 1,886 | ||||
| Interest expense | 85,119 | 68,623 | 311,854 | 246,018 | ||||
| Interest income | (541) | (1,874) | (7,378) | (5,024) | ||||
| Other operating expenses | 22,333 | 21,786 | 58,103 | 35,876 | ||||
| Depreciation, amortization and accretion | 143,615 | 124,105 | 555,517 | 460,726 | ||||
| Stock-based compensation expense | 11,252 | 12,410 | 47,437 | 52,555 | ||||
| Adjusted EBITDA | $428,565 | $365,285 | $1,595,403 | $1,347,747 | ||||
| Adjusted EBITDA (from above) | $428,565 | $365,285 | $1,595,403 | $1,347,747 | ||||
| Interest expense | (85,119) | (68,623) | (311,854) | (246,018) | ||||
| Interest income | 541 | 1,874 | 7,378 | 5,024 | ||||
| Cash paid for income taxes | (5,101) | (13,460) | (53,909) | (36,381) | ||||
| Straight-line revenue | (50,994) | (37,421) | (143,994) | (105,226) | ||||
| Straight-line expense | 7,827 | 3,867 | 30,952 | 22,269 | ||||
| Redevelopment capital expenditures | (18,020) | (9,178) | (55,301) | (25,763) | ||||
| Capital improvement capital expenditures | (16,714) | (10,315) | (60,829) | (31,404) | ||||
| Corporate capital expenditures | (5,184) | (3,841) | (18,687) | (11,602) | ||||
| Recurring Free Cash Flow | $255,801 | $228,188 | $989,159 | $918,646 | ||||
| Divided by weighted average diluted shares outstanding | 397,724 | 403,032 | 400,195 | 404,072 | ||||
| Recurring Free Cash Flow per Share | $0.64 | $0.57 | $2.47 | $2.27 | ||||
| Adjusted EBITDA (from above) | $428,565 | $365,285 | $1,595,403 | $1,347,747 | ||||
| Divided by total revenue | 653,199 | 547,642 | 2,443,532 | 1,985,335 | ||||
| Adjusted EBITDA Margin | 66% | 67% | 65% | 68% | ||||
|
UNAUDITED PRO FORMA REIT MEASURES AND RECONCILIATIONS TO GAAP
MEASURES (In thousands, except where noted. Totals may not add due to rounding.) |
|||||||||||
| Given the Company's recent reorganization and commencement of operations as a REIT, two widely recognized metrics of operating performance for REITs, Funds From Operations (FFO) and Adjusted Funds From Operations (AFFO), are presented below on a pro forma basis as if the REIT conversion had occurred on January 1, 2010. The Company believes that FFO and AFFO are useful to an investor in evaluating the Company’s operating performance in part because they exclude the assumption implicit in historical cost accounting for real estate assets in accordance with GAAP that the value of real estate assets diminishes predictably over time and they eliminate items which are not operational in nature, providing investors with meaningful measures to evaluate the Company’s period to period operating performance and to compare the Company’s results of operations to those of other REITs. For more information on the general nature of the pro forma adjustments, see “Pro Forma Financial Information” in the Company’s Definitive Proxy Statement, filed with the SEC on October 11, 2011. The unaudited pro forma calculation of FFO is based on the definition as set forth by the National Association of Real Estate Investment Trusts (NAREIT). A reconciliation of net income to FFO and the calculation of AFFO, which are non-GAAP financial measures, are also presented below. The measures of FFO and AFFO may not be comparable to those reported by REITs that do not compute these measures in accordance with the NAREIT definition of FFO, or that interpret this definition or define AFFO differently than the Company does. The pro forma adjustments, and other estimates and assumptions set forth in the footnotes below, are preliminary and have been made solely for the purposes of developing the pro forma information. The unaudited pro forma consolidated financial data is not necessarily indicative of the financial position or operating results that would have been achieved had the REIT conversion been completed as of the date indicated, nor are they necessarily indicative of future financial position or operating results. The unaudited pro forma consolidated financial data does not reflect one-time transaction costs related to the REIT conversion and the potential immaterial effect of lower cash balances these transactions have on interest income, higher borrowing costs or foregone investment opportunities. | |||||||||||
|
Three Months Ended December 31, |
Twelve Months Ended December 31, |
||||||||||
| 2011 | 2010 | 2011 | 2010 | ||||||||
| Net income | $196,434 | $83,703 | $381,840 | $373,606 | |||||||
| Adjustments for pro-forma tax provision (1) | (40,570) | 39,678 | 82,908 | 146,215 | |||||||
| Pro-forma net income | 155,864 | 123,381 | 464,748 | 519,821 | |||||||
| Real estate related depreciation, amortization and accretion | 124,977 | 111,167 | 481,926 | 412,862 | |||||||
| Pro forma FFO | $280,841 | $234,548 | $946,674 | $932,683 | |||||||
| Straight-line revenue | (50,994) | (37,421) | (143,994) | (105,226) | |||||||
| Straight-line expense | 7,827 | 3,867 | 30,952 | 22,269 | |||||||
| Stock-based compensation expense | 11,252 | 12,410 | 47,437 | 52,555 | |||||||
| Non-real estate related depreciation, amortization and accretion | 18,638 | 12,938 | 73,591 | 47,864 | |||||||
| Amortization of deferred financing costs, debt discounts, and capitalized interest | 2,742 | 2,174 | 11,021 | 8,398 | |||||||
| Other expense (income) | 7,265 | 1,598 | 122,975 | (315) | |||||||
| Loss on retirement of long-term obligations | - | 1,851 | - | 1,886 | |||||||
| Other operating expense (2) | 22,333 | 21,786 | 58,103 | 35,876 | |||||||
| Capital improvement capital expenditures | (16,714) | (10,315) | (60,829) | (31,404) | |||||||
| Corporate capital expenditures | (5,184) | (3,841) | (18,687) | (11,602) | |||||||
| Pro forma AFFO | $278,006 | $239,596 | $1,067,243 | $952,984 | |||||||
| Divided by weighted average diluted shares outstanding | 397,724 | 403,032 | 400,195 | 404,072 | |||||||
| Pro forma AFFO per Share | $0.70 | $0.59 | $2.67 | $2.36 | |||||||
| (1) | Adjustment reflects reduction to the Company’s income tax provision, as a result of the assumed REIT election on January 1, 2010. For more information, see Note (B) to Unaudited Pro Forma Consolidated Financial Statements in the Company’s Definitive Proxy Statement. As a result, on a pro forma basis, income tax expense is lower by the amount of the adjustment. | ||||||||||
| (2) | Primarily includes impairments and transaction related costs. | ||||||||||