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An Overview August 2011
“Safe Harbor” Statement under the Private Securities Litigation Reform Act of 1995: This presentation contains forward-looking statements concerning our goals, beliefs, strategies, future operating results and underlying assumptions. Actual results may differ materially from those indicated by these forward-looking statements as a result of various important factors, including those described in the last slide of this presentation and in Item 1A of our SEC Form 10-Q for the quarter ended June 30, 2011 and in our Amendment No. 3 to the Form S 4 filed with the SEC on August 25, 2011 under the caption “Risk S-4 Risk Factors” and other filings we make with the Securities and Exchange Commission. We undertake no obligation to update the information contained in this presentation to reflect subsequently occurring events or circumstances. Definitions are provided at the end of the presentation and reconciliations to GAAP measures are available on our website at www.americantower.com. i t
American Tower is a leading independent owner of telecommunications real estate and over 97% of its income is generated from leasing its properties.
Operated by American Tower
• Tower structure – constructed of galvanized steel with the capacity for multiple tenants • Land parcel – owned or operated pursuant to long-term leases
Operated by Tenant
• Antenna equipment, including microwave equipment e a t s e te s containing base stat o equ p e t a d g base-station equipment and • Tenant shelters co ta HVAC, which tenants own, operate and maintain • Coaxial cable
000 properties in the United States. India. Ghana. Mexico. 4 . Peru and South Africa. Brazil. Chile. Colombia.World Leader in Independent Communication Property Leasing American Tower is a leading independent owner of telecommunications real estate with a portfolio of over 38.
Investment Highlights 5 .
Investment Highlights Solid Business Model Fundamentals Long-term revenue s ea • Manageable costs • Secure real estate assets • Strong customer base o g e e e ue stream a ageab e cos s Secu e ea es a e asse s S o g cus o e Long-Term Demand Drivers Affordability of leasing model • Solid market fundamentals • Global diversification Consistent Financial Performance Strong top line growth • Consistent cash flow based returns • Conservative balance sheet top-line Dedicated Management Team Disciplined approach to returning capital to shareholders 6 .
Solid Business Model Fundamentals 7 .
Recurring Long-Term Revenue Stream American Tower provides the real estate necessary for today’s wireless communication networks Tenant Lease Characteristics: Pricing is typically based on location.S. 2011: 7% 2012 2% 2011 8% 2013 7% 2014 12% 2015 8 . amount of equipment placed on the tower. and square footage leased on the ground Leases are typically non-cancellable Leases typically include an initial term of 5 to 10 years with multiple renewal periods Annual embedded lease escalators: U.5% International: typically based on local inflation indices Historically low annual revenue churn of approximately 2% Global tenant lease renewal schedule as of June 30.: U S approximately 3 5% on average i t l 3.
2011.Diverse Customer Landscape (1) Our customer base is comprised of over 2. 20% 15% 10% 5% 0% Investment Grade Non.Investment Grade Approximately 85% of our revenues are generated from our top 20 customers. with the largest concentration from corporations and government agencies. over 50% of our revenues are generated f f t d from i investment grade t t t d tenants. t 9 (1) As of June 30. .500 entities.
we typically pass through fuel costs Fixed Cost Structure of Towers: Accommodating additional tenants requires minimal additional operating costs 10 . we typically pass through ground rent.Fixed Cost Profile Direct costs of operations include: Ground rent Monitoring Insurance Real estate taxes Utilities Site maintenance Pass-Through Expense: Our international markets typically pass through a portion of their operating expenses to the tenant In Latin America. while in India and EMEA.
) Gross Margin Gross Margin (%) Gross Margin Conversion R t (2) G M i C i Rate Return on Investment (3) $225.000 $12. Tower Economics (1) One Tenant Construction/Upgrade C t ( $ i US) C t ti /U d Costs in Tenant Revenue Operating Expenses (incl.000 $27.000 77% 95% 20% (1) (2) (3) For illustrative purposes only.S. Does not reflect any American Tower financial data.000 $225 000 $20. ground rent. prop taxes.000 $8. 11 .000 $14.000 $46.Sample U.000 68% 95% 12% Three Tenants $60.000 $13. Calculated as Gross Margin divided by Construction/Upgrade Costs. Calculated as the incremental gross margin divided by the incremental revenue generated by adding an additional tenant. etc.000 40% 4% Two Tenants $40.
equipment and upgrades yields additional revenue.Revenue Growth: Tower Leasing Adding additional tenants. while costs stay relatively fl t hil t t l ti l flat 12 .
S.500 per site per year in our international and U. Capital is primarily spent on discretionary projects in both the U.g. etc. . 2011. height extension. Revenue-Generating Capex Redevelopment Discretionary capital projects (~$180-$240M) • • Capital spending to increase capacity of tower site (e. and international. Historically low levels of $500 and $1. Ground lease purchases (~$80-$100M) Ground Lease Purchases • • Capital spending to purchase land under our sites. 13 (1) Based on the midpoint of Outlook as outlined in the Company’s Form 8-K.S.Capital Requirements Revenue-Maintaining Capex Capital Improvements Capital Expenditures 2011 Outlook (1) Corporate (~$10M) Capital Improvements (~$55-$65M) Redevelopment (~$55M) • Includes spending on lighting system and fence repair and ground upkeep. Investment payback period is typically one to two years.). and the cost is typically shared with tenant. Discretionary Capital Projects Capital spending primarily for the construction of new communications sites. filed on August 2. markets. Corporate • Capital spending primarily on IT infrastructure. foundation strengthening. respectively.
towers is owned or operated under a capital lease Annual escalators: approximately 3% in the US. ground lease renewal schedule as of June 30. with a renewal rate of approximately 99% Average term extensions are over 20 years U.S. and typically based on local inflation rates internationally Other US land characteristics: The average remaining ground lease term is approximately 22 years Successful land lease renewal history. 2011.Commitment to a Secure Real Estate Portfolio Land Characteristics:(1) Over 25% of the land under our U. .S. 2011: <1% 2011 <1% 2012 <1% 2013 1% 2014 1% 2015 1% 2016 1% 2017 1% 2018 2% 2019 2% 2020 14 (1) As of June 30.
. Government Aggregators 66% Other Commitment to land purchases: Annual capital spending on land purchases has continued to increase over the years 800 600 400 200 0 2009 2010 2011 $40 $30 $20 $10 $# of Sites Rev. 2011. continued US land ownership characteristics:(1) 25% of land owned or operated pursuant to a capital lease Approximately 96% of our landowners hold a single ground lease Maximum ownership for one landowner is approximately 2.0% of our total ground leases 2 0% 5% 3%1% AMT Owned 25% Individuals U.S.Commitment to a Secure Real Estate Portfolio. Secured ($m) Long-term leases + Successful renewal rates + Owned land = Secure Real Estate 15 (1) As of June 30.
Demand Drivers 16 .
9% WACC (1) For illustrative purposes only.000 construction cost.5% annual escalator.Carrier Lease-Build Decision (1) Significant economic incentive exists for carriers to choose a collocation model over building their own site Significant time to market advantage from leasing space on an existing tower site Building a site may involve years of work to secure ground interests and zoning approvals An Example PRESENT VALUE OF CARRIER NETWORK BUILD-OUT ALTERNATIVES Term 5 years 10 years 15 years 20 years Carrier Build $286.800 monthly lease with 3.575 $158.359 $155.976 $155 976 $144.140 CARRIER BUILD SCENARIO $225. 17 .720 $212.070 $368 070 $394.094 $212 094 $253.293 Savings g $197.250 monthly operating expenses with 3% annual escalator.433 Tower Lease $89.062 $174.079 $368. $1.638 $333. Does not reflect any American Tower financial data. 9% Weighted Average Cost of Capital (WACC) TOWER LEASE SCENARIO $1.
Demand Driver Highlights Primary Revenue Impact to American Tower New Lease Revenue Amendment Revenue (Increase to existing leases) New entrants Spectrum auctions Data network deployments Growing wireless penetration (Voice network deployments) 18 .
portable gaming consoles. Strategy Analytics. IDC. e-readers. 19 . digital picture frames. (MB/Mo.S.708 250 200 190 157 518X Units (in millions) m 150 122 100 91 61 123X 405 50 33 19 3 24X 79 Smartphones Tablets Laptops/ netbooks 2007 2008 2009 2010E 2011E 2012E 2013E Feature Phones # of Smartphones Connected Devices (1) (1) “Connected Devices” include netbooks.S. Source: Altman Vilandrie and Company analysis.U. laptops. Smartphone Projections Smartphone users expected to surpass 100M in 2011 2010 Data Usage by Device: U. portable navigation devices. SNL Kagan – Economics of Mobile Programming 2011. and digital cameras. Growth Market Opportunities U. USB modems. eMarketer.S. Cisco VNI Mobile 2011. MPS players. and tablets with embedded modems.) (MB/Mo ) 1.
with subscriber growth expected to be approximately appro imatel 52%(1) o er the ne t t o over next two years Ghana: Growing wireless market. which we expect would result in investment in data networks Subscriber Base India: Rapidly growing wireless market.International Market Growth Opportunities Increased data adoption and use + Spectrum auctions + Growing subscriber base = Future growth in tower demand Data Adoption South Africa: carriers beginning to invest in data networks. 20 . data as a percent of service revenues is expected t f i i t d (1) to be almost 20% by year end 2012 Spectrum Auctions Brazil: NII Holdings a top winner Mexico: Telefonica and NII Holdings g were top winners Colombia: expected future build out of new mobile broadband network India: spectrum will be utilized to continue the deployment of voice and initial data networks Chile: NII Holdings and VTR were top winners. expected to invest in 3G network deployments Peru: spectrum auction possible in 2011. carriers focused on improving the quality and coverage of voice networks (1) Source: Wall Street Research.
Consistent financial performance 21 .
Consistent Growth in Revenue and Profitability ($ in millions) $584 Adjusted EBITDA 22 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 2006 2006 2006 2006 2007 2007 2007 2007 2008 2008 2008 2008 2009 2009 2009 2009 2010 2010 2010 2010 2011 2011 $240 $215 $316 6 Rental and Management Revenue Rental and Management Gross Margin (1) CAGR is based on a compounded annual growth rate over a 4. $443 $389 .5 year period.
Historical Investment Capacity ($ in millions) $421 $1.668 $225 $900 $893 $1.355 $215 $296 $761 $347 $250 $237 2009 2010 1H 2011 Capex Discretionary capital projects Land purchases Redevelopment Maintenance Corporate Acquisitions Acquisitions of communications sites based on risk adjusted hurdle rates Share repurchases Total shares repurchased since 2008: 20.57/share Total Investment American Tower has remained committed to its disciplined capital allocation strategy 23 .2 million Average price paid for repurchased shares: $42.
com.9% $548 2006 2007 2008 2009 2010 2Q11A (1) 2006 2007 2008 2009 (2 2010 2Q11A ) Impact of annualization Actual 2Q11 RFCF Strong operational results and disciplined investments support RFCF and ROIC g g p p pp growth (1) RFCF for Q2 2011 annualized. (2) Q2 2011 Adjusted EBITDA less improvement and corporate capital expenditures annualized divided by 6/30/2011 gross property. plant and equipment.Cash Flow Based Returns Recurring Free Cash Flow ($ i millions) in illi ) Return on Invested Capital $979 8. goodwill and intangible assets. Definitions are provided at the end of this presentation and reconciliations to GAAP measures can be found at www.5% 10. Annualized numbers have been prepared for illustrative purposes only and are not indicative of expected Company results for 2011.5 year period.americantower. 24 . CAGR is based on compounded annual growth rate over a 4.
2 million of other subsidiary debt.750 $600 $1.5x 3. Reflects metrics for the last twelve months. 2011 (1) ($ in millions) $1. which is comprised primarily of capital leases and international subsidiary debt. Definitions are provided at the end of this presentation.3) 4.8x 3.4x Corporate Credit Ratings: Moody’s: Baa3 S&P: BB+ Fitch: BBB- 3.Balance Sheet Prudence As of June 30.6x 2006 2007 2008 2009 2010 2Q11 LTM Our conservative balance sheet and investment grade ratings enables us to g g opportunistically access the capital markets (1) (2) (3) Excludes approximately $258.8x 3.000 $300 $700 2011 2012 2013 2014 2015 2016 2017 Securitization S iti ti 2018 Senior N t S i Notes 2019 2020 Bank Debt Drawn B k D bt D Bank Debt Available B k D bt A il bl Net Leverage Ratio(2.000 $500 $1.075 $1.3x 3. 25 .
Dedicated Management Team 26 .
Long-Term Strategy American Tower remains focused on driving return on invested capital 27 .
S. where as President of Honeywell Aerospace Services. and capital expenditures planning functions. wireless business responsible for all operational aspects in both the Northeast and Mid-Atlantic states. budget reporting and analysis. Latin America & EMEA Steven Marshall St M h ll EVP and President. the principal trade association for the wireless infrastructure industry.S. part of the Partners Healthcare system . responsible for all wireless activities in Latin America.000 employees providing aircraft equipment repair. He also served as both Chief Compliance Officer and Principal Accounting Officer for Verizon. Bartlett has also held roles as Senior Vice President and Treasurer as well as Senior Vice President in Investor Relations. Prior to joining the company. He was appointed President and Chief Operating Officer of American Tower Corporation in September 2001. He was also previously a consultant at McKinsey & Company. Asia 28 . and abroad. He is also a member of the Corporate Advisory Board of the Boston Club. and on the Board of Directors of Faulkner Hospital. In his nearly 25 years with Verizon and its predecessor organizations. and is a Distinguished Graduate of the United States Air Force Academy. and space operations services. where he was a Wilson Fellow. and was also an area President in Verizon’s U. Bartlett held a number of leadership positions both in the U. Prior to Honeywell. He holds a Masters Degree in Public Affairs from Princeton University. he was responsible for corporate-wide accounting. International Operations and President. specializing in telecommunications and aerospace. He is also a Certified Public Accountant. which identifies and recommends qualified women for openings on corporate boards. Chief Financial Officer Tom Bartlett was named Chief Financial Officer on April 1. Ed DiSanto EVP. He served as President and Chief Executive Officer of Bell Atlantic International Wireless. Taiclet serves on the Board of Directors of PCIA. Taiclet joined American Tower from Honeywell International. In this role. SEC financial reporting. He earned his MBA from Rutgers University and holds a degree in engineering from Lehigh University. Europe and Asia. US Tower Amit S Sharma EVP and President. Chief Administrative Officer and General Counsel Hal Hess EVP. President and Chief Executive Officer Jim Taiclet was named Chief Executive Officer in October 2003 and Chairman of the Board in February 2004. tax planning and compliance. Tom Bartlett EVP. Taiclet began his career as an Air Force officer and pilot and served in the Gulf War. Taiclet was named as one of 100 Best Performing CEO’s in the World over the preceding decade in the January 2010 issue of the Harvard Business Review.Executive Management James Taiclet Chairman. Bartlett served as Senior Vice President and Corporate Controller with Verizon Communications. Engine Services at Pratt & Whitney. 2009. part distribution. Taiclet served as Vice President. logistics. he led a global organization of 10. a unit of United Technologies Corporation.
Summary AMT generates over 97% of its revenues from leasing real estate Resilient business model. ample liquidity and significant cash generation Significant capacity to invest to fuel strong future g g y g growth 29 . even in uncertain economic environments Our revenues are highly predictable due to low annual churn and our contractual annual escalators Our properties are investment grade Our major tenants are investment grade corporations or government entities American Tower has investment grade corporate ratings from Moody’s and Fitch Global investment by wireless carriers in substantial network development continues High visibility to drivers of revenue and profitability for 2011 and beyond Solid balance sheet.
income tax provision (benefit). Recurring Free Cash Flow per Share: Recurring Free Cash Flow divided by the diluted weighted average common shares outstanding. other income (expense). amortization and accretion. net. TV Azteca. net. accretion stock-based expense Gross Margin: segment revenue less segment operating costs. plant and equipment.Definitions Adjusted EBITDA: net income before income (loss) from discontinued operations. depreciation. Return on Invested Capital: Last quarter annualized Adjusted EBITDA less improvement and corporate capital expenditures divided by gross property. 30 . international rental and management segment includes interest income. other operating expenses. and stock based compensation expense. loss on retirement of long-term obligations. goodwill and intangible assets. interest expense. income from equity method investments. interest income.
31 . please refer to our “Introduction to the Tower Industry and American Tower” presentation. This presentation provides an overview of the tower business model and information on American Tower’s operating performance and financial strategy. which can be found in the Investor Relations section of our website under Presentations and Webcasts.Further Information Available For more information on the tower industry and American Tower.
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