American Tower Q1 2010 Earnings Call Transcript

American Tower Q1 2010 Earnings Call Transcript
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American Tower (AMT)

Q1 2010 Earnings Call

May 04, 2010 8:30 am ET

Executives

James Taiclet - Executive Chairman, Chief Executive Officer and President

Leah Stearns -

Thomas Bartlett - Chief Financial Officer and Executive Vice President

Analysts

Jonathan Atkin - RBC Capital Markets Corporation

Richard Prentiss - Raymond James & Associates

Michael McCormack - JP Morgan Chase & Co

Brett Feldman - Deutsche Bank AG

Timothy Horan - Oppenheimer & Co. Inc.

David Barden

Stephen Douglas

Presentation

Operator

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Good morning, my name is Kanesha and I will be your conference operator today. At this time I’d like to welcome everyone to the American Tower 1Q 2010 Earnings Conference Call. [Operator Instructions] I would like to turn the conference over to Ms. Leah Stearns, Director of Investor Relations. Please go ahead, ma'am.

Leah Stearns

Thank you, Kanesha. And good morning, and thank you for joining American Tower's conference call regarding our first quarter 2000 financial results. Please note that we have posted a brief presentation to accompany this morning's call on our website, www.americantower.com. If you haven't already done so, you may want to download the presentation, as we will refer to it at various times throughout our prepared remarks.

The agenda for this morning's call will be as follows: I'll provide a brief introduction and highlight certain key metrics from our first quarter 2010 financial results. Following this, Tom Bartlett, our Executive Vice President and Chief Financial Officer will deliver go over our financial results and provide an overview of our expectations for 2010. Finally, Jim Taiclet, our Chairman, President and Chief Executive Officer will give closing remarks, including his current thoughts on key industry trends. After these comments, we'll open up the call for your questions.

To maximize participation during the Q&A portion of the call, we kindly ask that you limit your questions to no more than two parts. If you do have more than two questions or if you think of additional questions, feel free to line up again in the queue and we'll do our best to answer as many questions as possible in our allotted time.

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 statements regarding our 2010 outlook, our stock repurchase program, our pending acquisition of Essar Telecom Infrastructure Private Limited 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 and those set forth in our Form 10-K for the year ended December 31, 2009 and in our other fillings 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, I will begin the call with some highlights from our first quarter 2010 results.

Please turn to Slide 4 of the presentation, which provides a summary of our first quarter 2010 results, compared against the year-ago period.

We reported total revenues of approximately $454 million, reflecting growth of 11.2% from the year-ago period. Tom will provide additional color on the core growth of our Rental and Management segment, which excludes the impact of foreign currency fluctuations and straight-line lease accounting.

Our adjusted EBITDA for the quarter was approximately $312 million, which is a 10.8% increase from the prior-year period. Additionally, our operating income for the quarter increased 19%, to nearly $179 million. Income from continuing operations was approximately $96 million or $0.24 per basic and diluted common share, attributable to American Tower Corporation.

During the quarter, our effective tax rate was 22.7%, which reflects a year-over-year decline of over 17% and was primarily the result of the implementation of one of our tax-cutting initiatives in Latin America, which was discrete for the quarter.

For the full year 2010, we anticipate our effective tax rate will be approximately 40%. And now, I would like to turn the call to Tom, who will discuss our results in more detail.

Thomas Bartlett

Thanks, Leah. Good morning, everyone. I'm pleased to report that our first quarter 2010 results came in right on plan as we continue to execute on our strategic priorities for the year.

Please turn to Slide 5. And I'd like to begin with some highlights from our Rental and Management segment.

Overall, we reported Rental and Management segment revenue growth of 12.1%. Excluding the impact of foreign currency fluctuations and straight-line lease accounting, our core growth was 9.2% relative to the first quarter of 2009. Our reported revenue was negatively impacted by approximately 1.8% as a result of three discrete items, which we discussed last quarter including: First, incremental churn resulting from the sunset of some analog broadcast services; second, the wind down in the fourth quarter of 2009 of a take or pay agreement with one of our customers; and lastly, the completion of the amortization of a customer settlement, which wrapped up at the end of last year. Excluding the impact of these items, our core growth would've been over 11%.

In the U.S., core growth for Tower revenue was 8.8%, excluding the impact of these discrete items. We experienced a strong leasing environment during the quarter with signed new business up by nearly 40% from the same quarter of 2009. Our leasing demand was led by customers like Clearwire, AT&T and Verizon, who continue to invest in their networks as demand for data services grows.

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