American Tower Corporation (REIT) (AMT)

AMT 
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American Tower (AMT)

Q4 2011 Earnings Call

February 23, 2012 8:30 am ET

Executives

Leah Stearns -

Thomas A. Bartlett - Chief Financial Officer and Executive Vice President

James D. Taiclet - Executive Chairman, Chief Executive Officer and President

Analysts

Simon Flannery - Morgan Stanley, Research Division

Batya Levi - UBS Investment Bank, Research Division

David W. Barden - BofA Merrill Lynch, Research Division

Jason Armstrong - Goldman Sachs Group Inc., Research Division

Michael Rollins - Citigroup Inc, Research Division

Lukas Hartwich - Green Street Advisors, Inc., Research Division

Jonathan A. Schildkraut - Evercore Partners Inc., Research Division

Richard Choe - JP Morgan Chase & Co, Research Division

Presentation

Operator

Good morning. My name is Brooke, and I'll be your conference operator today. At this time, I would like to welcome everyone to the American Tower Full Year Fourth Quarter 2011 Earnings Conference Call. [Operator Instructions] I will now turn the call over to Leah Stearns, Director of Investor Relations. Ms. Stearns, you may begin your conference.

Leah Stearns

Thank you. Good morning, and thank you for joining American Tower's Fourth Quarter 2011 and Full Year Earnings Conference Call. We have posted a presentation which we will refer to throughout our prepared remarks under the Investors tab of our website, www.americantower.com.

Our agenda for this morning's call will be as follows: First, I will provide a brief overview of our fourth quarter and full year results. Then Tom Bartlett, our Executive Vice President, CFO and Treasurer, will review our financial and operational performance for the fourth quarter and full year 2011, as well as our outlook for 2012. Finally, Jim Taiclet, our Chairman, President and CEO, will provide closing remarks. After these comments, we'll open up the call for your questions.

Before I begin, I would like to remind you that this call will contain forward-looking statements that involve a number of risks and uncertainties. Examples of these statements include those regarding our 2012 outlook and future operating performance, our pending acquisition and any other statements regarding matters that are not historical facts. You should be aware that certain factors may affect us in the future and could cause actual results to differ materially from those expressed in these forward-looking statements. Such factors include the risk factors set forth in this morning's press release, those set forth in our Form 10-Q for the quarter ended September 30, 2011 and in our other filings with the SEC. We urge you to consider these factors and remind you that we undertake no obligation to update the information contained in this call to reflect subsequent events or circumstances.

And with that, please turn to Slide 4 of the presentation, which provides a summary of our fourth quarter and full year 2011 results. During the quarter, our rental and management business accounted for over 98% of our total revenues, which were generated from leasing income-producing real estate, primarily to investment grade corporate tenants. This revenue grew 19.5% to nearly $641 million from the fourth quarter of 2011.

In addition, our adjusted EBITDA increased 17.3% to approximately $429 million. Operating income increased 21.8% to approximately $248 million and net income attributable to American Tower Corporation was approximately $201 million or $0.51 per basic and diluted common share. Please note that our tax provision for the quarter reflects the positive net impact of approximately $121 million due to the reversal of certain deferred tax assets and liabilities as a result of our REIT conversion.

For the full year 2011, our rental and management business grew 23.2% to nearly $2.4 billion. Our adjusted EBITDA increased 18.4% to approximately $1.6 billion and operating income increased 17.3% to approximately $920 million. Finally, net income attributable to American Tower Corporation was approximately $393 million or $0.99 per basic and $0.98 per diluted common share.

And with that, I'd like to turn the call over to Tom, who will discuss our results in more detail.

Thomas A. Bartlett

Thanks, Leah, and good morning, everyone. I'm pleased to report that our business continued to produce solid operational and financial results during the fourth quarter, building on our performance from the first 3 quarters of the year. These operating results exceeded the midpoint of our latest outlook for the full year 2011 and have positioned us well for 2012. What I'd like to do this morning is first discuss our fourth quarter results, then full year 2011 and finally conclude with a discussion of our current expectations for 2012.

If you'll please turn to Slide 5. You will see that for the fourth quarter, our total rental and management reported revenue increased by 19.5% to $641 million or 17.3% when you exclude the impact of our international segments pass-through revenues. This increase in pass-through revenue was attributable to the more than 11,000 new sites we have constructed or acquired in our international markets since the beginning of the fourth quarter of 2010. In addition, on a core basis, which we will reference throughout this presentation as reported results excluding the impacts of foreign currency exchange rate fluctuations, noncash straight-line lease accounting and significant onetime items, our consolidated rental revenue growth was 23%. Of this 23% core growth, over 9% was attributable to organic growth with the balance attributable to growth from new sites.

The key drivers of our consolidated organic growth in the quarter include new business commitments in the U.S. with AT&T and Verizon's LTE network deployments, continuing to drive the majority of our U.S. leasing volume in the quarter. In addition, we experienced similar demand trends in our international markets. In Latin America, for example, we are seeing sustained new business momentum as customers continue to roll out 3G services, a newly acquired spectrum. In our other foreign markets, we continue to see leasing growth as carriers invest in their 2G and 3G networks. Our revenue growth from new sites reflects the impact of our acquisition of construction of over 12,000 sites globally since the beginning of the fourth quarter of last year. Over 90% of these new sites are located in our international markets, where we have continued to focus on diversifying our portfolio across the 3 regions of Latin America, Asia and EMEA.

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