American Tower Corporation — FY2023 Form 10-K
Reporting period: Fiscal year ended December 31, 2023; comparisons are primarily with FY2022. This is an annual filing, not a standalone Q4 report. American Tower is a global REIT leasing communications sites and operating U.S. data centers; property operations generated 99% of FY2023 revenue.
Key financial results
Amounts in billions of U.S. dollars except per-share data and where noted.
| Metric | FY2023 | FY2022 | Change |
|---|---|---|---|
| Total revenue | $11.144 | $10.711 | +4% |
| Property revenue | $11.001 | $10.470 | +5% |
| Services revenue | $0.143 | $0.241 | -41% |
| Operating income | $3.025 | $2.352 | +29% |
| Net income | $1.367 | $1.697 | -19% |
| Net income attributable to common stockholders | $1.483 | $1.766 | -16% |
| Diluted EPS | $3.18 | $3.82 | -17% |
| Adjusted EBITDA | $7.087 | $6.644 | +7% |
| Nareit FFO attributable to common stockholders | $4.610 | $5.280 | -13% |
| AFFO attributable to common stockholders | $4.612 | $4.517 | +2% |
| Cash provided by operating activities | $4.722 | $3.696 | +$1.026 |
| Capital expenditures | $1.830 | $1.903 | -4% |
| Cash paid for interest | $1.260 | $1.089 | +16% |
Property gross margin was $7.801 billion, up 7%; consolidated operating income as a share of revenue was approximately 27%, versus 22% in FY2022. Total other expense rose to $1.504 billion from $0.632 billion, reflecting $330.8 million of foreign-currency losses versus $449.4 million of gains in FY2022, and higher net interest expense. The income tax provision increased to $154.2 million from $24.0 million.
Financial position and material changes
- At year-end, cash and cash equivalents were $1.973 billion; total available liquidity was $9.613 billion, including $7.639 billion available under credit facilities.
- Contractual debt obligations were $39.182 billion, including $3.188 billion due in 2024; reported long-term obligations, net of discounts and issuance costs, were $38.922 billion. The company reported compliance with its credit-facility financial covenants.
- FY2023 operating cash flow increased by about $1.0 billion, supported by higher property-segment operating profit and changes in unearned revenue; cash interest paid increased. Financing cash outflow was $3.097 billion, including $2.949 billion of common-stock distributions.
- Revenue growth was broad across property segments: U.S. & Canada +4%, Asia-Pacific +7%, Africa +3%, Europe +5%, Latin America +6%, and Data Centers +9%. Services revenue declined as tower-related service activity fell.
- Net income was pressured by $402 million of goodwill impairments, higher interest expense, foreign-currency losses, and higher taxes. Goodwill impairment comprised $322 million for India and $80 million for Spain. Operating income nevertheless increased, partly because depreciation and other operating expenses declined versus the prior year.
- FY2023 distributions paid were $6.31 per share, or $2.9 billion. The company expected 2024 total distributions declared of $3.0 billion; the board retains discretion over future distributions.
Outlook, commentary, risks and unusual items
- India transaction: In January 2024, American Tower agreed to sell 100% of ATC TIPL to Data Infrastructure Trust. Potential aggregate consideration is up to approximately INR 210 billion (about $2.5 billion), including specified receivables and debt-related amounts. The company expects closing in the second half of 2024, subject to conditions and regulatory approvals; it will retain the economic benefit of VIL debentures and rights to certain receivables.
- India exposure: Vodafone Idea began paying monthly contractual amounts in full in the second half of 2023 after earlier shortfalls. The company recorded a $322 million India goodwill impairment in 2023 and stated further impairment or similar charges remain possible. The VIL optionally convertible debentures had a year-end fair value of $192.3 million and generated a $76.7 million unrealized gain in 2023.
- 2024 investment outlook: Estimated total capital expenditures are $1.545–$1.655 billion, including approximately $450 million for data center assets and construction of roughly 2,500–3,500 communications sites.
- Depreciation estimate: Management was reviewing tower useful lives. Based on preliminary information, a potential extension could reduce 2024 depreciation and amortization by an estimated $700–$800 million; the review was not yet final.
- Customer churn: FY2023 churn was approximately 3% of tenant billings. U.S. & Canada churn is expected to remain elevated through 2025 due to T-Mobile lease cancellations and non-renewals, including legacy Sprint leases.
- Concentration and currency: T-Mobile, AT&T and Verizon Wireless together represented 45% of FY2023 revenue. Foreign currencies represented 44% of revenue; exchange-rate movements materially affected reported results. The company disclosed that a 10% adverse move in rates on its approximately $8.3 billion of euro-denominated debt could produce about $0.9 billion of foreign-currency losses in other expense.
- Other items: The company sold Mexico Fiber for $252.5 million, recording an $80 million loss, and sold its Poland subsidiary for approximately $7.2 million, recording a $1.1 million gain. It also recorded $21.8 million of severance and related costs. Management said no currently pending legal matters were expected to materially affect consolidated financial position, results, or liquidity.
- Key risks include leverage and refinancing costs, customer creditworthiness and consolidation, foreign exchange and political/regulatory exposure, ground-lease renewals, data-center power availability and outages, cybersecurity incidents, impairments, and maintaining REIT qualification. Management reported no material impact from cybersecurity incidents to date. The filing provides no clear full-year revenue or AFFO guidance.
Important facts for investors to verify
- Whether the ATC TIPL sale closes on schedule and on terms consistent with the stated potential consideration, including treatment of debt, receivables and VIL debentures.
- VIL’s continued payment performance, debenture repayment or conversion, and any additional India asset or goodwill impairments.
- Actual 2024 capital expenditures, tower useful-life conclusions and the resulting depreciation impact.
- Debt refinancing needs and borrowing costs, especially the $3.188 billion of contractual debt obligations due in 2024 and subsequent maturities.
- Realized churn and tenant activity, particularly T-Mobile-related cancellations through 2025, and the effect on recurring revenue and AFFO.
- Foreign-exchange effects on revenue, earnings and euro-denominated debt; distinguish these from underlying operating trends.
- Whether the anticipated $3.0 billion of 2024 distributions and planned investment remain supported by cash generation and liquidity.