American Tower now earns more than half its revenue outside the United States. The company reported fourth-quarter domestic rental and management revenue of $681 million (up 9.3%) and international rental and management revenue of $349 million (up 15.9%). Earnings before depreciation, interest and taxes were $661 million, up 10.2% from the year-ago quarter.
For all of 2014, American Tower had $4.1 billion in revenue. Domestic rental and management revenue increased 21% to $2.6 billion, while international rental and management revenue increased 25% to $1.4 billion. Earnings before depreciation, interest and taxes were up 22% to $2.7 billion, meaning that American Tower’s total EBITDA actually exceeded its domestic rental and management revenue last year.
International towers are clearly becoming a larger share of American Tower’s revenue, although the balance may shift once American Tower completes its purchase of the Verizon Wireless towers. This year the tower giant added significantly to its holdings in Brazil. Other key markets for American Tower include Mexico, South America, India and certain parts of Africa.
Investors have become accustomed to stellar results from the tower sector, and American Tower’s Q4 was a letdown to some. The stock opened lower on Tuesday morning. American Tower was trading just below $100/share when the company said it will buy Verizon Wireless’s towers for $5 billion, and it has yet to regain that level.
One reason for the slight selloff may have been American Tower’s 2015 outlook. The tower giant is forecasting new business applications in 2015 to decline 25% from 2014 levels, driven by slowdown in spending at AT&T. According to analyst Jennifer Fritzsche of Wells Fargo Securities, American Tower expects AT&T to remain active, but not at the extraordinary levels seen in 2014.
New stock offering
Today American Tower said that to help finance the Verizon deal, it will float two new stock offerings. The company plans to offer 23.5 million shares of its common stock and 12.5 million depositary shares, each representing a one-tenth interest in a share of American Tower’s Series B mandatory convertible preferred stock, Series B. The offerings will be concurrent but separate.
If for any reason the Verizon transaction is not completed, American Tower expects to use the net proceeds from these equity offerings for general corporate purposes. The company noted that it has plenty of other potential uses for the cash, including its planned purchases of TIM Cellular S.A. and Bharti Airtel International.
