American Tower Corporation
CEO : Mr. Thomas A. Bartlett CPA
Quarterly earnings growth(YoY,%)
| Period | Revenue | Operating Income | EPS | Release Date |
|---|---|---|---|---|
| 2022 Q4 | 10.6% YoY | 6.5% | -247.0% | 2023-02-23 |
Rod Smith says,
Accomplishments and Developments
- Record colocation and amendment tenant billings growth in Q4 2022
- Construction of nearly 7,000 sites, an American Tower record
- CoreSite delivered record new business, selling nearly double the number of megawatts compared to the previous trailing two-year average
- Reduction of leverage from 6.8 times at the end of 2021 to 5.4 times at the end of 2022
- Completion of the Indian government’s conversion of the adjusted gross revenue interest balances to equity in Vodafone Idea (VIL)
- Expectation to convert approximately $200 million in existing VIL receivables into optionally convertible debentures pending Vodafone Idea shareholder approval
2022 Results
- Full year consolidated property revenue growth was nearly 15% and nearly 18% on an FX-neutral basis
- Organic tenant billings growth for the full year came in at 3.2%
- US and Canada property segment delivered its strongest quarter since Q1 of 2020
- International organic tenant billings growth was 6.6%, led by Europe at 8.4% and followed by Latin America at 7.9%, Africa at 7.7% and APAC at 2.6%
- Data center segment contributed over $765 million to total property revenue in 2022
2023 Outlook
- Expected continuation in VIL collections volatility, resulting in an assumption of $75 million in revenue reserves for the year
- Expected negative growth headwinds associated with financing costs, approximately 8% headwind to attributable AFFO per share growth
- Expected organic tenant billings growth of approximately 5% or greater than 6% excluding Sprint churn in the US and Canada
- Expected organic tenant billings growth of greater than 2% in Latin America
- Expected cash revenue growth of around $245 million of FX neutral growth in international regions
Tom Bartlett says,
Operational Efficiency Improvements
- American Tower signed comprehensive master lease agreements with T-Mobile, AT&T, DISH and Verizon in the United States, representing a commitment to a mutually beneficial, predictable growth path.
- American Tower invested in technologies to build a holistic standardized data set, mapping the vast majority of its US assets, which can be leveraged to eventually bring application cycle times down to a matter of hours.
- American Tower invested nearly $350 million primarily in Africa, on improving site level performance through its Power as a Service program, which has resulted in a sizable reduction in average fuel consumption per site across its African portfolio and has extended the replacement cycles of critical power sources all while providing over a 99.9% average uptime.
- American Tower established a centralized procurement organization that aims to drive down material costs.
Mergers and Acquisitions
- American Tower executed a number of transactions, including InSite in the United States, the in portfolio in Africa as well as Telxius in Europe and Latin America, positioning itself as a market leader in the next generation of network architecture development.
- American Tower entered the data center space through the acquisition of CoreSite, delivering an interconnection and cloud on-ramp rich platform as well as exposure to a resilient high-demand communications infrastructure business, which is expected to deliver strong performance and accretive returns on a standalone basis over time.
Organizational Leadership and Growth
- American Tower has made ESG core to its operations through initiatives such as its commitment to Science-Based Targets, localized DE&I initiatives designed to facilitate an inclusive organization for its employees and stakeholders, and growth of its digital communities program which has now reached more than 400 communities and serves more than 335,000 people across 15 countries.
- American Tower expects an acceleration in organic growth in 2023, representing an improvement of around 100 basis points relative to its prior five-year average.
- American Tower is focused on being the most trusted strategic partner for its customers, by delivering innovative solutions, while advancing its customers’ long-term sustainability and fossil fuel consumption reduction targets.
Platform Extensions
- American Tower sees a long runway of opportunity to drive strong returns by investing in the expansion of its existing CoreSite campuses and leveraging the open cloud exchange to extend their interconnection-rich ecosystem.
- American Tower is working to position its combined platforms for outsized success as demand for the workloads and compute functions are drawn closer to the end-users at the mobile edge, by leveraging its core competencies in real estate, power provision, and connectivity to drive incremental value to the ecosystem while delivering increasing shareholder returns.
Management and Cultural Foundation
- American Tower is laser-focused on positioning its global teams for the future, while growing and maintaining a healthy cultural foundation, by developing, empowering, and retaining diverse and talented team members and facilitating a culture that is inclusive and equitable.
Q & A sessions,
US leasing activity
- Revenue in the US is underpinned through holistic agreements
- Contributions from colocations and amendments rise from about $150 million in 2022 to $220 million in 2023, driving about a 5% contribution to organic tenant billings growth
- 90% of the growth is locked in for 2023, but may come down to about two-thirds in outer years
- Potential upside if there’s a faster uptake on 5G utilization, and if carriers densify networks quicker
AFFO per share growth
- Expect a negative 2% growth due to financing costs, FX headwind, and VIL situation in India
- If financing impacts are one-time, interest may trend down towards next year, and become a tailwind next year
- Expect upper single-digit growth rate from operating units, underpinned by growth in mobile data consumption and need for tower space
Latin America growth
- Guide on organic tenant billings growth is a little bit higher than 2%
- Gross new business is in the mid-single digits around 3%
- Higher escalators at around 8%
- Headwind of churn of about 8%, mostly driven by Telefonica and American Movil
- Expect churn to work through over the next couple of years and get back to a more compelling overall growth in the market
- Expect Oi to be out over time, with about $100 million of revenue for us, representing about 1% of our overall business
India reserve
- Outlook for 2023 calls out a specific reserve for VIL of about $75 million
- Collecting more from VIL in January, expecting improvements to continue and VIL to increase their payments towards the end of the year
- Have entered into the $200 million convertible debenture, which also has terms and conditions embedded in it
M&A and balance sheet
- Objective is to delever and get down to that five times kind of leverage
- Capital is there, but nothing out there that’s compelling as we see it today
- Focus on driving organic growth, driving efficiency, and supporting the build program
- No significant change in longstanding percentage policies when it comes to fixed and floating, running 80-20
- Expect to stay in and around that range, but can be opportunistic and flexible
- Expect to refinance about $3 billion in bonds this year, looking at a variety of opportunities to do that
No bad stock 