American Tower Corporation Reports Second Quarter 2021 Financial Results

American Tower Corporation (NYSE: AMT) today reported financial results for the quarter ended June 30, 2021.

Tom Bartlett, American Tower’s Chief Executive Officer, stated, “In Q2, secular growth trends in mobile continued to support meaningful carrier capital investment and wireless network technology advancements throughout our footprint. In addition to delivering double-digit growth in AFFO per Share and 15% dividend growth, we added nearly 27,000 sites through our Telxius Towers acquisition in the quarter, augmenting American Tower’s position as a leading independent provider of communications real estate in Europe.

Looking forward, we expect to leverage the competitive advantage provided by our scaled, diversified portfolio of more than 214,000 communications sites to drive sustainable long-term growth and attractive returns, capitalize on new opportunities associated with 5G and execute our vision of making wireless communication possible everywhere.”

CONSOLIDATED OPERATING RESULTS OVERVIEW

American Tower generated the following operating results for the quarter ended June 30, 2021 (all comparative information is presented against the quarter ended June 30, 2020).

($ in millions, except per share amounts.)			Q2 2021				Growth Rate
Total revenue			$	2,299			20.2	%
Total property revenue			$	2,233			17.9	%
Total Tenant Billings Growth			$	165			10.7	%
Organic Tenant Billings Growth			$	74			4.8	%
Property Gross Margin			$	1,610			18.1	%
Property Gross Margin %			72.1		%
Net income(1)			$	748			66.8	%
Net income attributable to AMT common stockholders(1)			$	746			67.3	%
Net income attributable to AMT common stockholders per diluted share(1)			$	1.65			65.0	%
Adjusted EBITDA			$	1,476			21.8	%
Adjusted EBITDA Margin %			64.2		%
Nareit Funds From Operations (FFO) attributable to AMT common stockholders			$	1,235			43.1	%
Consolidated AFFO			$	1,097			18.7	%
Consolidated AFFO per Share			$	2.42			16.9	%
AFFO attributable to AMT common stockholders			$	1,080			20.2	%
AFFO attributable to AMT common stockholders per Share			$	2.39			18.9	%
Cash provided by operating activities			$	952			(3.7)	%
Less: total cash capital expenditures(2)			$	286			29.1	%
Free Cash Flow			$	666			(13.2)	%

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(1) Q2 2021 growth rates positively impacted by approximately $147 million of foreign currency gains in the current period as compared to foreign currency losses of approximately $38 million in the prior-year period. (2) Q2 2021 cash capital expenditures include $8.9 million of finance lease and perpetual land easement payment reported in cash flows from financing activities in the condensed consolidated statements of cash flows.

Please refer to “Non-GAAP and Defined Financial Measures” below for definitions and other information regarding the Company’s use of non-GAAP measures. For financial information and reconciliations to GAAP measures, please refer to the “Unaudited Selected Consolidated Financial Information” below.

CAPITAL ALLOCATION OVERVIEW

Distributions – During the quarter ended June 30, 2021, the Company declared the following regular cash distributions to its common stockholders:

Common Stock Distributions		Q2 2021(1)
Distributions per share		$	1.27
Aggregate amount (in millions)		$	578
Year-over-year per share growth		15.5		%

____________

(1) The distribution declared on May 27, 2021 was paid in the third quarter of 2021 to stockholders of record as of the close of business on June 18, 2021.

Capital Expenditures – During the second quarter of 2021, total capital expenditures were approximately $286 million, of which $36 million was for non-discretionary capital improvements and corporate capital expenditures. For additional capital expenditure details, please refer to the supplemental disclosure package available on the Company’s website.

Acquisitions – During the second quarter of 2021, the Company spent approximately $8.8 billion to acquire more than 27,000 communications sites, primarily through the acquisition of nearly 20,000 communications sites in Germany and Spain and over 7,000 communications sites in Brazil, Peru, Chile and Argentina, as part of the Company’s previously announced transaction with Telxius Telecom, S.A. (“Telxius,” and the acquisition, the “Telxius Acquisition”). Approximately 4,000 remaining rooftop communications sites in Germany are expected to close in August 2021.

Other Events – During the second quarter of 2021, the Company entered into agreements with Caisse de dépôt et placement du Québec (“CDPQ”) and Allianz Capital Partners, on behalf of Allianz insurance companies (“Allianz”) and the Allianz European Infrastructure Fund, for CDPQ and Allianz to acquire 30% and 10% noncontrolling interests, respectively, in ATC Europe. Subsequent to the second quarter of 2021, Allianz elected to increase its noncontrolling interest from 10% to 18%, including acquisition of a portion by an additional Allianz fund. The Company expects the transactions to close in the third quarter of 2021, subject to customary closing conditions, including regulatory approvals, for total consideration to the Company of €2.6 billion (approximately $3.1 billion at current foreign currency exchange rates). After the completion of the transactions, the Company will hold a 52% controlling ownership interest in ATC Europe.

Additionally, during the second quarter of 2021, the Company completed a reorganization of its European subsidiary structure. As part of the reorganization, PGGM converted its previously held noncontrolling interest in ATC Europe into noncontrolling interests in new subsidiaries, consisting of the Company's operations in Germany and Spain. Following the reorganization, PGGM holds a 13% and a 17% noncontrolling interest, respectively, in the Company’s operating subsidiaries in Germany and Spain.

LEVERAGE AND FINANCING OVERVIEW

Leverage – For the quarter ended June 30, 2021, the Company’s Net Leverage Ratio was 5.7x net debt (total debt less cash and cash equivalents) to second quarter 2021 annualized Adjusted EBITDA.

Calculation of Net Leverage Ratio ($ in millions, totals may not add due to rounding)		As of June 30, 2021
Total debt		$	35,584
Less: Cash and cash equivalents		1,928
Net Debt		33,656
Divided By: Second quarter annualized Adjusted EBITDA(1)		5,903
Net Leverage Ratio		5.7		x

_________

(1) Q2 2021 Adjusted EBITDA multiplied by four.

Liquidity and Financing Activities – As of June 30, 2021, the Company had over $4.7 billion of total liquidity, consisting of $1.9 billion in cash and cash equivalents plus the ability to borrow an aggregate of approximately $2.8 billion under its revolving credit facilities, net of any outstanding letters of credit. During the second quarter of 2021, the Company borrowed an aggregate of €5.3 billion (approximately $6.4 billion as of the borrowing dates) under its revolving credit facilities and its delayed draw term loans to fund the Telxius Acquisition.

On May 10, 2021, the Company completed a registered public offering, including the underwriters’ exercise in full of their over-allotment option, of 9,900,000 shares of its common stock, par value $0.01 per share, at $244.75 per share. Aggregate net proceeds from this offering were approximately $2.4 billion after deducting underwriting discounts and estimated offering expenses. The Company used the net proceeds to finance the Telxius Acquisition.

Additionally, during the second quarter of 2021, the Company issued an aggregate of €2.0 billion (approximately $2.4 billion at the date of issuance) in senior unsecured notes. The net proceeds were also used to fund the Telxius Acquisition.

FULL YEAR 2021 OUTLOOK

The following full year 2021 estimates are based on a number of assumptions that management believes to be reasonable and reflect the Company’s expectations as of July 29, 2021. 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 of July 29, 2021, based on currently available information, the Company does not anticipate significant impacts to its underlying operating results in 2021 as a result of the coronavirus (“COVID-19”) pandemic. This is subject to change depending on future developments, which are highly uncertain and cannot be predicted at this time. Additional information pertaining to the impact of COVID-19 on the Company can be found in our Form 10-K for the twelve months ended December 31, 2020.

The Company’s outlook is based on the following average foreign currency exchange rates to 1.00 U.S. Dollar for July 29, 2021 through December 31, 2021: (a) 105 Argentinean Pesos; (b) 1.32 Australian Dollars (c) 5.30 Brazilian Reais; (d) 1.23 Canadian Dollars (e) 735 Chilean Pesos; (f) 3,740 Colombian Pesos; (g) 0.84 Euros; (h) 5.90 Ghanaian Cedis; (i) 74.00 Indian Rupees; (j) 109 Kenyan Shillings; (k) 20.00 Mexican Pesos; (l) 415 Nigerian Naira; (m) 6,760 Paraguayan Guarani; (n) 3.95 Peruvian Soles; (o) 48.70 Philippine Pesos; (p) 3.80 Polish Zloty; (q) 14.50 South African Rand; (r) 3,550 Ugandan Shillings; and (s) 550 West African CFA Francs.

The Company is raising the midpoint of its full year 2021 outlook for property revenue, net income, Adjusted EBITDA and Consolidated AFFO by $510 million, $135 million, $260 million and $170 million, respectively, primarily due to the impacts of its Telxius Acquisition, including the approximately 4,000 remaining German communications sites expected to close in August 2021.

The Company’s outlook reflects estimated favorable impacts of foreign currency exchange rate fluctuations to property revenue, Adjusted EBITDA and Consolidated AFFO of approximately $41 million, $26 million and $20 million, respectively, relative to the Company’s prior 2021 outlook. The impact of foreign currency exchange rate fluctuations on net income metrics is not provided, as the impact on all components of the net income measure cannot be calculated without unreasonable effort.

Additionally, for the purposes of its outlook, the Company has assumed that the closings of its agreements with CDPQ and Allianz will occur in mid-Q3 2021. Accordingly, the Company is now providing its outlook for Net income attributable to AMT common stockholders and AFFO attributable to AMT common stockholders.

Additional information pertaining to the impact of foreign currency and London Interbank Offered Rate (“LIBOR”) fluctuations on the Company’s outlook has been provided in the supplemental disclosure package available on the Company’s website.

2021 Outlook ($ in millions)		Full Year 2021								Midpoint Growth Rates vs. Prior Year
Total property revenue(1)		$	8,985		to	$	9,135			13.9%
Net income		2,410			to	2,510				45.4%
Net income attributable to AMT common stockholders		2,375			to	2,475				43.4%
Adjusted EBITDA		5,860			to	5,960				14.6%
Consolidated AFFO		4,255			to	4,355				13.6%
AFFO attributable to AMT common stockholders		4,145			to	4,245				11.6%

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(1) Includes U.S. & Canada segment property revenue of $4,875 million to $4,935 million and international property revenue of $4,110 million to $4,200 million, reflecting midpoint growth rates of 8.6% and 20.9%, respectively. The U.S. & Canada growth rate includes an estimated positive impact of nearly 3% associated with an increase in non-cash straight-line revenue recognition. The international growth rate includes an estimated positive impact of less than 1% from the translational effects of foreign currency exchange rate fluctuations. International property revenue reflects the Company’s Latin America, Africa, Europe and Asia-Pacific segments.

2021 Outlook for Total Property revenue, at the midpoint, includes the following components(1): ($ in millions, totals may not add due to rounding.)	U.S. & Canada Property				International Property(2)				Total Property
International pass-through revenue	N/A				$	1,249			$	1,249
Straight-line revenue	416				41				457

____________

(1) For additional discussion regarding these components, please refer to “Revenue Components” below. (2) International property revenue reflects the Company’s Latin America, Africa, Europe and Asia-Pacific segments.

2021 Outlook for Total Tenant Billings Growth, at the midpoint, includes the following components(1): (Totals may not add due to rounding.)	U.S. & Canada Property		International Property(2)		Total Property
Organic Tenant Billings	~3%		~5-6%		~4%
New Site Tenant Billings	~4%		~13%		~7%
Total Tenant Billings Growth	~7%		~19%		~11%

__________

(1) For additional discussion regarding the component growth rates, please refer to “Revenue Components” below. (2) International property revenue reflects the Company’s Latin America, Africa, Europe and Asia-Pacific segments.

Outlook for Capital Expenditures: ($ in millions, totals may not add due to rounding.)
	Full Year 2021
Discretionary capital projects(1)	$	540		to	$	570
Ground lease purchases	230			to	240
Start-up capital projects	260			to	290
Redevelopment	290			to	310
Capital improvement	175			to	185
Corporate	5			—	5
Total	$	1,500		to	$	1,600

_________

(1) Includes the construction of 6,500 to 7,500 communications sites globally.

Reconciliation of Outlook for Adjusted EBITDA to Net income: ($ in millions, totals may not add due to rounding.)
	Full Year 2021
Net income	$	2,410		to	$	2,510
Interest expense	875			to	855
Depreciation, amortization and accretion	2,295			to	2,315
Income tax provision	225			to	235
Stock-based compensation expense	120			—	120
Other, including other operating expenses, interest income, gain (loss) on retirement of long-term obligations and other income (expense)	(65)			to	(75)
Adjusted EBITDA	$	5,860		to	$	5,960

Reconciliation of Outlook for Consolidated AFFO and AFFO attributable to AMT common stockholders to Net income: ($ in millions, totals may not add due to rounding.)
	Full Year 2021
Net income	$	2,410		to	$	2,510
Straight-line revenue	(457)			—	(457)
Straight-line expense	64			—	64
Depreciation, amortization and accretion	2,295			to	2,315
Stock-based compensation expense	120			—	120
Deferred portion of income tax	2			—	2
Other, including other operating expense, amortization of deferred financing costs,
capitalized interest, debt discounts and premiums, gain (loss) on retirement of
long-term obligations, other income (expense), long-term deferred interest charges
and distributions to minority interests	1			to	(9)
Capital improvement capital expenditures	(175)			to	(185)
Corporate capital expenditures	(5)			—	(5)
Consolidated AFFO	$	4,255		to	$	4,355
Minority interest	$	(110)		—	$	(110)
AFFO attributable to AMT common stockholders	$	4,145		to	$	4,245

Conference Call Information

American Tower will host a conference call today at 8:30 a.m. ET to discuss its financial results for the quarter ended June 30, 2021 and its revised outlook for 2021. 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: [phone]
International dial-in: [phone]
Passcode: 3233043

When available, a replay of the call can be accessed until 11:59 p.m. ET on August 12, 2021. The replay dial-in numbers are as follows:

U.S./Canada dial-in: [phone]
International dial-in: [phone]
Passcode: 4401323

American Tower will also sponsor a live simulcast and replay of the call on its website, www.americantower.com.

About American Tower

American Tower, one of the largest global REITs, is a leading independent owner, operator and developer of multitenant communications real estate with a portfolio of over 214,000 communications sites. For more information about American Tower, please visit the “Earnings Materials” and “Investor Presentations” sections of our investor relations website at 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 (FFO) attributable to American Tower Corporation common stockholders, Consolidated Adjusted Funds From Operations (AFFO), AFFO attributable to American Tower Corporation common stockholders, Consolidated AFFO per Share, AFFO attributable to American Tower Corporation common stockholders per Share, Free Cash Flow, Net Debt, Net Leverage Ratio and Indian Carrier Consolidation-Driven Churn (ICCC). In addition, the Company presents: Tenant Billings, Tenant Billings Growth, Organic Tenant Billings Growth and New Site Tenant Billings Growth.

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 and are commonly used across its industry peer group. As outlined in detail below, the Company believes that these measures can assist in comparing company performance on a consistent basis irrespective of depreciation and amortization or capital structure, while also providing valuable incremental insight into the underlying operating trends of its business.

Depreciation and amortization can vary significantly among companies depending on accounting methods, particularly where acquisitions or non-operating factors, including historical cost basis, are involved. The Company's Non-GAAP and Defined Financial Measures may not be comparable to similarly titled measures used by other companies.

Revenue Components

In addition to reporting total revenue, the Company believes that providing transparency around the components of its revenue provides investors with insight into the indicators of the underlying demand for, and operating performance of, its real estate portfolio. Accordingly, the Company has provided disclosure of the following revenue components: (i) Tenant Billings, (ii) New Site Tenant Billings; (iii) Organic Tenant Billings; (iv) International pass-through revenue; (v) Straight-line revenue; (vi) Pre-paid amortization revenue; (vii) Foreign currency exchange impact; and (viii) Other revenue.

Tenant Billings: The majority of the Company’s revenue is generated from non-cancellable, long-term tenant leases. Revenue from Tenant Billings reflects several key aspects of the Company’s real estate business: (i) “colocations/amendments” reflects new tenant leases for space on existing sites and amendments to existing leases to add additional tenant equipment; (ii) “escalations” reflects contractual increases in billing rates, which are typically tied to fixed percentages or a variable percentage based on a consumer price index; (iii) “cancellations” reflects the impact of tenant lease terminations or non-renewals or, in limited circumstances, when the lease rates on existing leases are reduced; and (iv) “new sites” reflects the impact of new property construction and acquisitions.

New Site Tenant Billings: Day-one Tenant Billings associated with sites that have been built or acquired since the beginning of the prior-year period. Incremental colocations/amendments, escalations or cancellations that occur on these sites after the date of their addition to our portfolio are not included in New Site Tenant Billings. The Company believes providing New Site Tenant Billings enhances an investor’s ability to analyze the Company’s existing real estate portfolio growth as well as its development program growth, as the Company’s construction and acquisition activities can drive variability in growth rates from period to period.

Organic Tenant Billings: Tenant Billings on sites that the Company has owned since the beginning of the prior-year period, as well as Tenant Billings activity on new sites that occurred after the date of their addition to the Company’s portfolio.

International pass-through revenue: A portion of the Company’s pass-through revenue is based on power and fuel expense reimbursements and therefore subject to fluctuations in fuel prices. As a result, revenue growth rates may fluctuate depending on the market price for fuel in any given period, which is not representative of the Company’s real estate business and its economic exposure to power and fuel costs. Furthermore, this expense reimbursement mitigates the economic impact associated with fluctuations in operating expenses, such as power and fuel costs and land rents in certain of the Company’s markets. As a result, the Company believes that it is appropriate to provide insight into the impact of pass-through revenue on certain revenue growth rates.

Straight-line revenue: Under GAAP, the Company recognizes revenue on a straight-line basis over the term of the contract for certain of its tenant leases. Due to the Company’s significant base of non-cancellable, long-term tenant leases, this can result in significant fluctuations in growth rates upon tenant lease signings and renewals (typically increases), when amounts billed or received upfront upon these events are initially deferred. These signings and renewals are only a portion of the Company’s underlying business growth and can distort the underlying performance of our Tenant Billings Growth. As a result, the Company believes that it is appropriate to provide insight into the impact of straight-line revenue on certain growth rates in revenue and select other measures.

Pre-paid amortization revenue: The Company recovers a portion of the costs it incurs for the redevelopment and development of its properties from its tenants. These upfront payments are then amortized over the initial term of the corresponding tenant lease. Given this amortization is not necessarily directly representative of underlying leasing activity on its real estate portfolio (i.e. does not have a renewal option or escalation as our tenant leases do), the Company believes that it is appropriate to provide insight into the impact of pre-paid amortization revenue on certain revenue growth rates to provide transparency into the underlying performance of our real estate business.

Foreign currency exchange impact: The majority of the Company’s international revenue and operating expenses are denominated in each country’s local currency. As a result, foreign currency fluctuations may distort the underlying performance of our real estate business from period to period, depending on the movement of foreign currency exchange rates versus the U.S. Dollar. The Company believes it is appropriate to quantify the impact of foreign currency exchange rate fluctuations on its reported growth to provide transparency into the underlying performance of its real estate business.

Other revenue: Other revenue represents revenue not captured by the above listed items and can include items such as tenant settlements and fiber solutions revenue.

Non-GAAP and Defined Financial Measure Definitions

Tenant Billings Growth: The increase or decrease resulting from a comparison of Tenant Billings for a current period with Tenant Billings for the corresponding prior-year period, in each case adjusted for foreign currency exchange rate fluctuations. The Company believes this measure provides valuable insight into the growth in recurring Tenant Billings and underlying demand for its real estate portfolio.

Organic Tenant Billings Growth: The portion of Tenant Billings Growth attributable to Organic Tenant Billings. The Company believes that organic growth is a useful measure of its ability to add tenancy and incremental revenue to its assets for the reported period, which enables investors and analysts to gain additional insight into the relative attractiveness, and therefore the value, of the Company’s property assets.

New Site Tenant Billings Growth: The portion of Tenant Billings Growth attributable to New Site Tenant Billings. The Company believes this measure provides valuable insight into the growth attributable to Tenant Billings from recently acquired or constructed properties.

Indian Carrier Consolidation-Driven Churn (ICCC): Tenant cancellations specifically attributable to short-term carrier consolidation in India. Includes impacts of carrier exits from the marketplace and carrier cancellations as a result of consolidation, but excludes normal course churn. In prior periods, the Company provided this additional metric to enhance transparency and provide a better understanding of its recurring business.

Gross Margin: 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 believes this measure provides valuable insight into the site-level profitability of its assets.

Operating Profit: Gross Margin less selling, general, administrative and development expense, excluding stock-based compensation expense and corporate expenses. The Company believes this measure provides valuable insight into the site-level profitability of its assets while also taking into account the overhead expenses required to manage each of its operating segments.

Operating Profit Margin: The percentage that results from dividing Operating Profit by revenue.

Adjusted EBITDA: Net income before income (loss) from equity method investments, income tax benefit (provision), other income (expense), gain (loss) on retirement of long-term obligations, interest expense, interest income, other operating income (expense), depreciation, amortization and accretion and stock-based compensation expense. The Company believes this measure provides valuable insight into the profitability of its operations while at the same time taking into account the central overhead expenses required to manage its global operations. In addition, it is a widely used performance measure across the telecommunications real estate sector.

Adjusted EBITDA Margin: The percentage that results from dividing Adjusted EBITDA by total revenue.

Nareit Funds From Operations (FFO), as defined by the National Association of Real Estate Investment Trusts (Nareit), attributable to American Tower Corporation common stockholders: Net income before gains or losses from the sale or disposal of real estate, real estate related impairment charges, real estate related depreciation, amortization and accretion and dividends on preferred stock, and including adjustments for (i) unconsolidated affiliates and (ii) noncontrolling interests. The Company believes this measure provides valuable insight into the operating performance of its property assets by excluding the charges described above, particularly depreciation expenses, given the high initial, up-front capital intensity of the Company’s operating model. In addition, it is a widely used performance measure across the telecommunications real estate sector.

Consolidated Adjusted Funds From Operations (AFFO): Nareit FFO attributable to American Tower Corporation common stockholders before (i) straight-line revenue and expense, (ii) stock-based compensation expense, (iii) the deferred portion of income tax, (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) gain (loss) on retirement of long-term obligations, (viii) other operating income (expense), and adjustments for (ix) unconsolidated affiliates and (x) noncontrolling interests, less cash payments related to capital improvements and cash payments related to corporate capital expenditures. The Company believes this measure provides valuable insight into the operating performance of its property assets by further adjusting the Nareit FFO attributable to American Tower Corporation common stockholders metric to exclude the factors outlined above, which if unadjusted, may cause material fluctuations in Nareit FFO attributable to American Tower Corporation common stockholders growth from period to period that would not be representative of the underlying performance of the Company’s property assets in those periods. In addition, it is a widely used performance measure across the telecommunications real estate sector.

Adjusted Funds From Operations (AFFO) attributable to American Tower Corporation common stockholders: Consolidated AFFO, excluding the impact of noncontrolling interests on both Nareit FFO attributable to American Tower Corporation common stockholders and the other line items included in the calculation of Consolidated AFFO. The Company believes that providing this additional metric enhances transparency, given the minority interests in its Indian and European businesses.

Consolidated AFFO per Share: Consolidated AFFO divided by the diluted weighted average common shares outstanding.

AFFO attributable to American Tower Corporation common stockholders per Share: AFFO attributable to American Tower Corporation common stockholders divided by the diluted weighted average common shares outstanding.

Free Cash Flow: Cash provided by operating activities less total cash capital expenditures, including payments on finance leases and perpetual land easements. The Company believes that Free Cash Flow is useful to investors as the basis for comparing our performance and coverage ratios with other companies in its industry, although this measure of Free Cash Flow may not be directly comparable to similar measures used by other companies.

Net Debt: Total long-term debt, including current portion and finance lease liabilities, less cash and cash equivalents.

Net Leverage Ratio: Net Debt divided by the quarter’s annualized Adjusted EBITDA (the quarter’s Adjusted EBITDA multiplied by four). The Company believes that including this calculation is important for investors and analysts given it is a critical component underlying its credit agency ratings.

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 2021 outlook and other targets, foreign currency exchange rates, our expectations for the closing of signed acquisitions, including the Telxius Acquisition, our expectations for the closing of our signed agreements with CDPQ and Allianz, our expectations for the redemption of shares in ATC TIPL, our expectations regarding the potential impacts of the Adjusted Gross Revenue court ruling in India and factors that could affect such expectations, our expectations regarding the impacts of COVID-19 and actions in response to the pandemic on our business and our operating results and factors that could affect such expectations and our expectations regarding the leasing demand for communications real estate. Actual results may differ materially from those indicated in our forward-looking statements as a result of various important factors, including: (1) a significant decrease in leasing demand for our communications infrastructure would materially and adversely affect our business and operating results, and we cannot control that demand; (2) if our tenants consolidate their operations, exit the telecommunications business or share site infrastructure to a significant degree, our growth, revenue and ability to generate positive cash flows could be materially and adversely affected; (3) a substantial portion of our revenue is derived from a small number of tenants, and we are sensitive to adverse changes in the creditworthiness and financial strength of our tenants; (4) increasing competition within our industry may materially and adversely affect our revenue; (5) our expansion initiatives involve a number of risks and uncertainties, including those related to integrating acquired or leased assets, that could adversely affect our operating results, disrupt our operations or expose us to additional risk; (6) new technologies or changes in our or a tenant’s business model could make our tower leasing business less desirable and result in decreasing revenues and operating results; (7) competition for assets could adversely affect our ability to achieve our return on investment criteria; (8) our leverage and debt service obligations may materially and adversely affect our ability to raise additional financing to fund capital expenditures, future growth and expansion initiatives and to satisfy our distribution requirements; (9) restrictive covenants in the agreements related to our securitization transactions, our credit facilities and our debt securities could materially and adversely affect our business by limiting flexibility, and we may be prohibited from paying dividends on our common stock, which may jeopardize our qualification for taxation as a REIT; (10) we may be adversely affected by changes in LIBOR reporting practices, the method in which LIBOR is determined or the use of alternative reference rates; (11) our business, and that of our tenants, is subject to laws, regulations and administrative and judicial decisions, and changes thereto, that could restrict our ability to operate our business as we currently do or impact our competitive landscape; (12) 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; (13) if we fail to remain qualified for taxation as a REIT, we will be subject to tax at corporate income tax rates, which may substantially reduce funds otherwise available, and even if we qualify for taxation as a REIT, we may face tax liabilities that impact earnings and available cash flow; (14) complying with REIT requirements may limit our flexibility or cause us to forego otherwise attractive opportunities; (15) we could have liability under environmental and occupational safety and health laws; (16) our towers, fiber networks, data centers or computer systems may be affected by natural disasters, security breaches and other unforeseen events for which our insurance may not provide adequate coverage; (17) our costs could increase and our revenues could decrease due to perceived health risks from radio emissions, especially if these perceived risks are substantiated; (18) if we are unable to protect our rights to the land under our towers, it could adversely affect our business and operating results; and (19) 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 those towers will be eliminated. 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-K for the year ended December 31, 2020 under the caption “Risk Factors.” We undertake no obligation to update the information contained in this press release to reflect subsequently occurring events or circumstances.

UNAUDITED CONSOLIDATED BALANCE SHEETS
(In millions)

	June 30, 2021				December 31, 2020
ASSETS
CURRENT ASSETS:
Cash and cash equivalents	$	1,928.0			$	1,746.3
Restricted cash	72.8				115.1
Accounts receivable, net	739.6				511.6
Prepaid and other current assets	615.6				532.6
Total current assets	3,356.0				2,905.6
PROPERTY AND EQUIPMENT, net	14,216.5				12,808.7
GOODWILL	10,575.4				7,282.7
OTHER INTANGIBLE ASSETS, net	18,785.0				13,839.8
DEFERRED TAX ASSET	145.4				123.1
DEFERRED RENT ASSET	2,309.6				2,084.3
RIGHT-OF-USE ASSET	9,193.2				7,789.2
NOTES RECEIVABLE AND OTHER NON-CURRENT ASSETS	401.8				400.1
TOTAL	$	58,982.9			$	47,233.5
LIABILITIES
CURRENT LIABILITIES:
Accounts payable	$	193.8			$	139.1
Accrued expenses	1,044.6				1,043.7
Distributions payable	582.7				544.6
Accrued interest	221.8				207.8
Current portion of operating lease liability	723.5				539.9
Current portion of long-term obligations	2,636.0				789.8
Unearned revenue	549.7				390.6
Total current liabilities	5,952.1				3,655.5
LONG-TERM OBLIGATIONS	32,947.6				28,497.7
OPERATING LEASE LIABILITY	8,036.0				6,884.4
ASSET RETIREMENT OBLIGATIONS	1,893.8				1,571.3
DEFERRED TAX LIABILITY	1,993.9				859.5
OTHER NON-CURRENT LIABILITIES	1,126.7				984.6
Total liabilities	51,950.1				42,453.0
COMMITMENTS AND CONTINGENCIES
REDEEMABLE NONCONTROLLING INTERESTS	209.4				212.1
EQUITY:
Common stock	4.7				4.6
Additional paid-in capital	12,019.8				10,473.7
Distributions in excess of earnings	(1,085.0)				(1,343.0)
Accumulated other comprehensive loss	(3,902.9)				(3,759.4)
Treasury stock	(1,282.4)				(1,282.4)
Total American Tower Corporation equity	5,754.2				4,093.5
Noncontrolling interests	1,069.2				474.9
Total equity	6,823.4				4,568.4
TOTAL	$	58,982.9			$	47,233.5

UNAUDITED CONSOLIDATED STATEMENTS OF OPERATIONS
(In millions, except share and per share data)

	Three Months Ended June 30,								Six Months Ended June 30,
	2021				2020				2021				2020
REVENUES:
Property	$	2,233.0			$	1,893.2			$	4,362.7			$	3,866.4
Services	65.9				19.8				94.7				39.7
Total operating revenues	2,298.9				1,913.0				4,457.4				3,906.1
OPERATING EXPENSES:
Costs of operations (exclusive of items shown separately below):
Property(1)	623.3				530.3				1,186.6				1,074.4
Services(1)	24.6				9.7				35.6				17.6
Depreciation, amortization and accretion	554.8				454.9				1,077.3				927.2
Selling, general, administrative and development expense(1)	207.2				188.6				389.8				406.4
Other operating expenses	39.8				38.2				90.2				52.4
Total operating expenses	1,449.7				1,221.7				2,779.5				2,478.0
OPERATING INCOME	849.2				691.3				1,677.9				1,428.1
OTHER INCOME (EXPENSE):
Interest income	7.6				8.4				19.0				18.5
Interest expense	(213.7)				(197.7)				(420.7)				(406.5)
Loss on retirement of long-term obligations	—				—				(25.7)				(34.6)
Other income (expense) (including foreign currency gains (losses) of $146.9, ($37.8), $241.6 and ($103.3), respectively)	177.6				(42.5)				272.8				(106.3)
Total other expense	(28.5)				(231.8)				(154.6)				(528.9)
INCOME FROM CONTINUING OPERATIONS BEFORE INCOME TAXES	820.7				459.5				1,523.3				899.2
Income tax provision	(72.8)				(11.1)				(123.1)				(32.2)
NET INCOME	747.9				448.4				1,400.2				867.0
Net income attributable to noncontrolling interests	(1.6)				(2.3)				(8.9)				(5.9)
NET INCOME ATTRIBUTABLE TO AMERICAN TOWER CORPORATION COMMON STOCKHOLDERS	$	746.3			$	446.1			$	1,391.3			$	861.1
NET INCOME PER COMMON SHARE AMOUNTS:
Basic net income attributable to American Tower Corporation common stockholders	$	1.66			$	1.01			$	3.11			$	1.94
Diluted net income attributable to American Tower Corporation common stockholders	$	1.65			$	1.00			$	3.10			$	1.93
WEIGHTED AVERAGE COMMON SHARES OUTSTANDING (in thousands):
BASIC	450,617				443,436				447,569				443,245
DILUTED	452,354				445,867				449,390				445,893

___________

(1) Property costs of operations, services costs of operations and selling, general, administrative and development expense include stock-based compensation expense in aggregate amounts of $31.9 million and $69.9 million for the three and six months ended June 30, 2021, respectively, and $27.2 million and $74.9 million for the three and six months ended June 30, 2020, respectively.

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(In millions)

	Six Months Ended June 30,
	2021				2020
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income	$	1,400.2			$	867.0
Adjustments to reconcile net income to cash provided by operating activities:
Depreciation, amortization and accretion	1,077.3				927.2
Stock-based compensation expense	69.9				74.9
Loss on early retirement of long-term obligations	25.7				34.6
Other non-cash items reflected in statements of operations	(209.1)				169.0
Increase in net deferred rent balances	(224.7)				(110.8)
Right-of-use asset and Operating lease liability, net	14.7				0.9
Increase in assets	(219.6)				(226.3)
Increase in liabilities	110.2				52.3
Cash provided by operating activities	2,044.6				1,788.8
CASH FLOWS FROM INVESTING ACTIVITIES:
Payments for purchase of property and equipment and construction activities	(602.7)				(424.9)
Payments for acquisitions, net of cash acquired	(8,882.6)				(232.7)
Proceeds from sales of short-term investments and other non-current assets	7.9				9.3
Payment for investments in equity securities	(25.0)				—
Deposits and other	(3.2)				9.5
Cash used for investing activities	(9,505.6)				(638.8)
CASH FLOWS FROM FINANCING ACTIVITIES:
Borrowings under credit facilities	6,511.8				4,045.4
Proceeds from issuance of senior notes, net	3,828.0				3,482.9
Proceeds from term loans	2,347.0				1,940.0
Repayments of notes payable, credit facilities, senior notes, secured debt, term loans and finance leases(1)	(6,008.4)				(8,324.5)
Distributions to noncontrolling interest holders, net	(225.7)				(13.6)
Purchases of common stock	—				(56.0)
Proceeds from stock options and employee stock purchase plan	26.6				34.3
Distributions paid on common stock	(1,096.4)				(933.8)
Proceeds from the issuance of common stock, net	2,361.8				—
Payment for early retirement of long-term obligations	(61.9)				(33.5)
Deferred financing costs and other financing activities(2)	(93.3)				(123.6)
Purchase of redeemable noncontrolling interest	(2.5)				(524.4)
Cash provided by (used for) financing activities	7,587.0				(506.8)
Net effect of changes in foreign currency exchange rates on cash and cash equivalents, and restricted cash	13.4				(115.1)
NET INCREASE IN CASH AND CASH EQUIVALENTS, AND RESTRICTED CASH	139.4				528.1
CASH AND CASH EQUIVALENTS, AND RESTRICTED CASH, BEGINNING OF PERIOD	1,861.4				1,578.0
CASH AND CASH EQUIVALENTS, AND RESTRICTED CASH, END OF PERIOD	$	2,000.8			$	2,106.1
CASH PAID FOR INCOME TAXES, NET	$	62.2			$	67.6
CASH PAID FOR INTEREST	$	388.9			$	395.2

_______________

(1) Six months ended June 30, 2021 and June 30, 2020 include $3.0 million and $5.6 million of finance lease payments, respectively. (2) Six months ended June 30, 2021 and June 30, 2020 include $16.8 million and $19.0 million of perpetual land easement payments, respectively.

UNAUDITED CONSOLIDATED RESULTS FROM OPERATIONS, BY SEGMENT
($ in millions, totals may not add due to rounding.)

As a result of the acquisition of InSite Wireless Group, LLC, the Company updated its reportable segments to rename U.S. property and Asia property to U.S. & Canada property and Asia-Pacific property, respectively. The Company continues to report its results in six segments – U.S. & Canada property, Asia-Pacific property, Africa property, Europe property, Latin America property and services. The change in reportable segment names had no impact on the Company’s consolidated financial statements for any prior periods.

	Three Months Ended June 30, 2021
	Property																												Services				Total
	U.S. & Canada				Latin America				Asia-Pacific				Africa				Europe				Total International(1)				Total Property
Segment revenues	$	1,233			$	366			$	298			$	248			$	88			$	1,000			$	2,233			$	66			$	2,299
Segment operating expenses	212				112				184				86				30				412				623				25				648
Segment Gross Margin	$	1,022			$	254			$	114			$	162			$	58			$	588			$	1,610			$	41			$	1,651
Segment SG&A(2)	42				30				24				18				8				80				122				4				126
Segment Operating Profit	$	979			$	224			$	90			$	145			$	50			$	509			$	1,488			$	37			$	1,525
Segment Operating Profit Margin	79		%		61		%		30		%		58		%		57		%		51		%		67		%		56		%		66		%
Growth Metrics
Revenue Growth	13.4		%		24.5		%		9.9		%		20.4		%		153.0		%		24.1		%		17.9		%		232.8		%		20.2		%
Total Tenant Billings Growth	8.7		%		12.7		%		2.5		%		13.8		%		86.1		%		14.5		%		10.7		%
Organic Tenant Billings Growth	4.4		%		8.4		%		(1.7)		%		8.2		%		4.4		%		5.3		%		4.8		%
Revenue Components(3)
Prior-Year Tenant Billings	$	1,017			$	199			$	146			$	155			$	31			$	530			$	1,547
Colocations/Amendments	33				8				12				10				2				31				65
Escalations	33				11				3				6				0				21				54
Cancellations	(19)				(3)				(17)				(4)				(1)				(25)				(45)
Other	(2)				1				(0)				1				0				2				(0)
Organic Tenant Billings	$	1,063			$	215			$	143			$	167			$	32			$	558			$	1,621
New Site Tenant Billings	43				8				6				9				25				48				92
Total Tenant Billings	$	1,106			$	224			$	149			$	176			$	57			$	606			$	1,712
Foreign Currency Exchange Impact(4)	—				14				4				7				4				30				30
Total Tenant Billings (Current Period)	$	1,106			$	238			$	154			$	183			$	61			$	636			$	1,743
Straight-Line Revenue	93				3				1				4				2				11				104
Prepaid Amortization Revenue	37				1				—				0				10				11				48
Other Revenue	(3)				36				1				(3)				3				38				34
International Pass-Through Revenue	—				81				138				61				11				291				291
Foreign Currency Exchange Impact(5)	—				6				4				2				(0)				13				13
Total Property Revenue (Current Period)	$	1,233			$	366			$	298			$	248			$	88			$	1,000			$	2,233

_____________

(1) Total International reflects the Company’s international operations excluding Canada. (2) Excludes stock-based compensation expense. (3) All components of revenue, except those labeled current period, have been translated at prior-period foreign currency exchange rates. (4) Reflects foreign currency exchange impact on all components of Total Tenant Billings. (5) Reflects foreign currency exchange impact on components of revenue, other than Total Tenant Billings.

UNAUDITED CONSOLIDATED RESULTS FROM OPERATIONS, BY SEGMENT (CONTINUED)
($ in millions, totals may not add due to rounding.)

	Three Months Ended June 30, 2020
	Property																												Services				Total
	U.S. & Canada				Latin America				Asia-Pacific				Africa				Europe				Total International(1)				Total Property
Segment revenues	$	1,088			$	294			$	271			$	206			$	35			$	806			$	1,893			$	20			$	1,913
Segment operating expenses(2)	202				92				159				70				7				328				530				9				539
Segment Gross Margin	$	885			$	201			$	113			$	136			$	28			$	478			$	1,363			$	10			$	1,374
Segment SG&A(2)	37				20				34				21				5				79				117				2				119
Segment Operating Profit	$	848			$	181			$	79			$	116			$	23			$	399			$	1,247			$	8			$	1,255
Segment Operating Profit Margin	78		%		62		%		29		%		56		%		67		%		49		%		66		%		42		%		66		%
Growth Metrics
Revenue Growth	8.0		%		(15.0)		%		(15.5)		%		45.7		%		3.3		%		(4.3)		%		2.4		%		(51.4)		%		1.2		%
Total Tenant Billings Growth	5.2		%		12.4		%		3.9		%		58.3		%		3.6		%		18.8		%		9.9		%
Organic Tenant Billings Growth	4.7		%		7.3		%		0.4		%		9.7		%		2.1		%		5.4		%		5.0		%
Revenue Components(3)
Prior-Year Tenant Billings	$	967			$	222			$	153			$	105			$	30			$	510			$	1,477
Colocations/Amendments	36				9				19				6				1				35				71
Escalations	31				10				4				5				0				19				50
Cancellations	(19)				(4)				(22)				(1)				(1)				(27)				(46)
Other	(3)				1				(0)				0				0				1				(2)
Organic Tenant Billings	$	1,013			$	238			$	154			$	115			$	31			$	537			$	1,550
New Site Tenant Billings	4				11				5				51				0				68				72
Total Tenant Billings	$	1,017			$	249			$	159			$	166			$	31			$	605			$	1,623
Foreign Currency Exchange Impact(4)	—				(50)				(13)				(11)				(1)				(76)				(76)
Total Tenant Billings (Current Period)	$	1,017			$	199			$	146			$	155			$	31			$	530			$	1,547
Straight-Line Revenue	46				5				3				2				0				9				56
Prepaid Amortization Revenue	27				0				—				0				1				2				30
Other Revenue	(4)				26				2				1				2				31				28
International Pass-Through Revenue	—				88				132				51				0				271				271
Foreign Currency Exchange Impact(5)	—				(24)				(11)				(3)				(0)				(38)				(38)
Total Property Revenue (Current Period)	$	1,088			$	294			$	271			$	206			$	35			$	806			$	1,893

______________

(1) Total International reflects the Company’s international operations excluding Canada. (2) Excludes stock-based compensation expense. (3) All components of revenue, except those labeled current period, have been translated at prior-period foreign currency exchange rates. (4) Reflects foreign currency exchange impact on all components of Total Tenant Billings. (5) Reflects foreign currency exchange impact on components of revenue, other than Total Tenant Billings.

UNAUDITED SELECTED CONSOLIDATED FINANCIAL INFORMATION
($ in millions, totals may not add due to rounding.)

The reconciliation of Adjusted EBITDA to net income and the calculation of Adjusted EBITDA Margin are as follows:
	Three Months Ended June 30,
	2021				2020
Net income	$	747.9			$	448.4
Income tax provision	72.8				11.1
Other (income) expense	(177.6)				42.5
Interest expense	213.7				197.7
Interest income	(7.6)				(8.4)
Other operating expenses	39.8				38.2
Depreciation, amortization and accretion	554.8				454.9
Stock-based compensation expense	31.9				27.2
Adjusted EBITDA	$	1,475.7			$	1,211.6
Total revenue	2,298.9				1,913.0
Adjusted EBITDA Margin	64		%		63		%

The reconciliation of Nareit FFO attributable to American Tower Corporation common stockholders to net income and the calculation of Consolidated AFFO, Consolidated AFFO per Share, AFFO attributable to American Tower Corporation common stockholders and AFFO attributable to American Tower Corporation common stockholders per Share are as follows:
	Three Months Ended June 30,
	2021				2020
Net income	$	747.9			$	448.4
Real estate related depreciation, amortization and accretion	499.5				403.3
Losses from sale or disposal of real estate and real estate related impairment charges	3.3				36.9
Adjustments for unconsolidated affiliates and noncontrolling interests	(16.1)				(26.1)
Nareit FFO attributable to AMT common stockholders	$	1,234.6			$	862.5
Straight-line revenue	(104.8)				(54.6)
Straight-line expense	15.4				12.2
Stock-based compensation expense	31.9				27.2
Deferred portion of income tax	16.4				(21.4)
Non-real estate related depreciation, amortization and accretion	55.3				51.6
Amortization of deferred financing costs, capitalized interest and debt discounts and premiums and long-term deferred interest charges	9.1				8.6
Other (income) expense(1)	(177.6)				42.5
Other operating expense(2)	36.5				1.3
Capital improvement capital expenditures	(35.0)				(28.8)
Corporate capital expenditures	(1.3)				(3.1)
Adjustments for unconsolidated affiliates and noncontrolling interests	16.1				26.1
Consolidated AFFO	$	1,096.6			$	924.1
Adjustments for unconsolidated affiliates and noncontrolling interests(3)	(17.1)				(26.3)
AFFO attributable to AMT common stockholders	$	1,079.5			$	897.8
Divided by weighted average diluted shares outstanding	452,354				445,867
Consolidated AFFO per Share	$	2.42			$	2.07
AFFO attributable to AMT common stockholders per Share	$	2.39			$	2.01

____________

(1) Includes gains (losses) on foreign currency exchange rate fluctuations of $146.9 million and ($37.8) million, respectively. (2) Primarily includes integration and acquisition-related costs. (3) Includes adjustments for the impact on both Nareit FFO attributable to American Tower Corporation common stockholders as well as the other line items included in the calculation of Consolidated AFFO.

 

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