Viom Transaction

bluegrasscap

American Tower Announces Viom Transaction

American Tower Announces

Viom Transaction

October 21, 2015


Forward-Looking Statements

“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 appendix attached hereto, Item 1A of our Form 10-K for the year

ended December 31, 2014 under the caption “Risk Factors” and other filings we make with the

SEC. 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.

2


Viom Transaction Highlights

3

Consideration

› Acquisition of 51% interest for total cash

consideration of INR ~76 Billion

› Options to acquire up to remaining 49%

stake, beginning in 2018-2019

› Results will be consolidated in AMT’s

financials

Viom has INR ~58B in existing INRdenominated

debt (1)

Portfolio

› ~42,200 towers and ~200 Indoor DAS

systems w/ avg. tenancy of ~2.3

› Low overlap with existing Indian assets

› Nearly half of sites in densely populated

Metro and Circle A areas

› Capacity for at least one incremental

tenant with minimal augmentation capex

Strategic Implications

› Extends relationships with key customers

› Meaningful opportunity for incremental

revenue, expense and SG&A synergies

› Enhances AMT’s role in Digital India

Initiative

Financial Impact

› Immediately accretive to AFFO/share

› Expected to be financed in a manner

consistent with maintaining AMT’s

investment grade credit rating

› AMT remains committed to previously

announced deleveraging path

Transaction is expected to close by mid-2016

(1) As of September 30, 2015.


Market Overview - India

Country Overview

› Largest free market democracy in the world

› Population of nearly 1.3 billion, with over half under the age of 25

› Average Annual Real GDP growth of over 7% from 2010-2014

Wireless Overview

› Mobile usage growing rapidly

› Nearly 90% of Internet connections still made on 2G

› Smartphone and 3G/4G penetration of under 25%

› Fixed-line penetration of less than 5%

› Sub-$100 smartphones increasingly available

› Major carriers investing actively in networks

› Increasingly favorable wireless regulatory environment

› Industry ARPU is growing (1)

› Successful spectrum auction completed in early 2015

› Major carriers have announced aggressive near-term 3G/4G investments

› Wireless capital expenditures expected to grow at 15% CAGR from 2015-2019

~1.3 Billion

People

Early Stage

Networks

Long Term

Growth

Opportunity

(1) ARPU is defined as average revenue per user.

Sources: Altman Vilandrie & Co, Bank of America Merrill Lynch Wireless Matrix, GSMA Intelligence, Cisco VNI Report, 2014, Internet and Mobile

Association of India, Deloitte & Touche June 2015 Indian Tower Industry Report.

4


Indian Wireless Trends

Smartphone Penetration Mobile Data Usage (1)

58%

1,869

13%

2014 2015E 2016E 2017E 2018E 2019E 2020E

94

2014 2015E 2016E 2017E 2018E 2019E 2020E

Wireless Service Revenue (2) Wireless Capex (2)

EBITDA Margin %

1,603

Capex as % of Service Revenue

208

245

849

25%

32% 32%

15%

2009 2010 2011 2012 2013 2014 2015E

2009 2010 2011 2012 2013 2014 2015E

Positive Backdrop for Incremental Wireless Network Investments

(1) In petabytes/month.

(2) In INR billions. Reflects averages or summations for Reliance, Vodafone, Bharti Airtel and Idea Cellular’s wireless capex spend in India.

Sources: Bank of America Merrill Lynch Wireless Matrix, Deloitte & Touche June 2015 Indian Tower Industry Report.

5


Merger of ATC India and Viom Creates Strategic Pan-

India Tower Footprint

Pro Forma Portfolio Highlights

Transaction provides transformative

presence

› Positions AMT to benefit from aggressive

3G/4G deployments following recent

spectrum auctions

› Portfolio focused in and around key

population centers

› Average tenancy of ~2.2 tenants per tower

› Revenue primarily from leading national

Indian mobile operators

Legacy AMT

VIOM

› Gross margin excluding pass-through of

~68% (1)

Pan-India Footprint Supports Expansion of Mobile Broadband Throughout the Country

(1) Reflects annualized operating results as of June 30, 2015, pro forma for full quarter contribution from VIOM assets, at 2Q 2015 average fx rates.

6


Pro Forma Global Portfolio Highlights (1)

100,000

90,000

80,000

Tower Count

International U.S.

Rental & Management Revenue

Excludes Pass-Through Revenue

3%

7%

70,000

60,000

50,000

40,000

6%

5%

U.S.

India

Brazil

30,000

20,000

10,000

0

2007 2008 2009 2010 2011 2012 2013 2014 2015

13%

66%

Mexico

Nigeria

Other

› Pro forma global tower count of nearly ~140K towers with ~2.0 tenants per tower

› Continued focus on partnering with large, multi-national mobile network operators

› Leading presence in markets with wireless networks in early stages of development should help strengthen and extend our

long term growth

Focused on Generating Optimal Global Risk-Adjusted Stockholder Returns

(1) Pro forma includes the annualized impacts of the Company’s recently completed Airtel Nigeria acquisition and annualized quarterly Viom operating results

for the quarter ended June 30, 2015.

7


Key Takeaways

American Tower continues to pursue its growth strategy in support of its vision to be

the premier independent owner, operator and developer of wireless and broadcast

communications real estate globally

Strategic Benefits:

› Expected to be immediately accretive to AFFO per share

› Significantly enhances presence in the most populous free market democracy in

the world

› Positions American Tower to benefit from accelerating network investments by

major Indian wireless carriers while supporting the Digital India Initiative

› Enables meaningful expansion while preserving commitment to investment grade

rating

Definitions are provided at the end of this presentation.

8


Appendix

Appendix


Current Viom Financial Profile

Viom Operating Results (1)

(In INR Billions)

~50B

~17B Pass-through Revenue

~21B

~18B

Revenue Gross Margin Operating Profit

(1) Based on annualized results for the quarter ended June 30, 2015.

Definitions are provided at the end of this presentation.

10


Tower Type

Circle

Circle C

13%

Metros

11%

Ground

Based

60%

Rooftop

40%

Circle B

40%

Circle A

36%

4 or

more

18%

1 or less

3

39%

18%

2

25%

Viom Portfolio Characteristics (1) 11

# of Tenants

Years in Portfolio

>7

14%

0-3

9%

5-7

24%

3-5

54%

(1) All metrics as of June 30, 2015.


Additional Portfolio Metrics (1) 12

Legacy AMT India Viom Pro Forma

Revenue by Customer

Revenue By Customer

Revenue by Customer

20%

24%

Vodafone

Idea

25%

8%

12%

Vodafone

Idea

18%

12%

Vodafone

Idea

8%

12%

20%

Bharti Airtel

Aircel

37%

11%

7%

Uninor

Aircel

8%

14%

9%

Bharti Airtel

Uninor

Tata

17%

Tata

Other

Tata

Other

30%

9%

Aircel

Other

Margin Profile

Margin Profile

Margin Profile

80%

64%

68%

47%

42%

43%

Gross Margin %

Gross Margin % Ex PT

Gross Margin %

Gross Margin % Ex PT

Gross Margin %

Gross Margin % Ex PT

Tenant Characteristics

Tenant Characteristics

Tenant Characteristics

6.1

years

5.4

years

3.4

1.9

tenants

years

2.3

tenants

2.2

tenants

Tenancy

Avg. Remaining Term

Tenancy

Avg. Remaining Term

Tenancy

Avg. Remaining Term

(1) All metrics reflect operating results for the quarter ended June 30, 2015.


Recent ATC India Growth Highlights (1) 13

Tenants Per Tower

Tenant Revenue Per Tower

(In INR 000’s) (2)

New Builds

1.94

660

624

435

1.79

601

Q114 Q214 Q314 Q414 Q115 Q215

Q114 Q214 Q314 Q414 Q115 Q215

Q114 Q214 Q314 Q414 Q115 Q215

Recent Trends in India Have Supported Strong Growth for ATC

(1) Reflects existing ATC India portfolio. Excludes Viom.

(2) Excludes pass-through revenue.


Definitions

Adjusted EBITDA: Net income before Income (loss) on discontinued operations, net; 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.

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

Adjusted Funds From Operations, or AFFO: NAREIT Funds From Operations before (i) straight-line revenue and expense, (ii) stockbased

compensation expense, (iii) the non-cash portion of our tax provision, (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 interest, less cash payments related to capital improvements and cash

payments related to corporate capital expenditures.

AFFO per Share: Adjusted Funds From Operations divided by the diluted weighted average common shares outstanding.

Segment Gross Margin: segment revenue less segment 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. International rental and management segment includes interest income, TV Azteca, net.

Segment Gross Margin Conversion Rate: the percentage that results from dividing the change in gross margin by the change in revenue.

Segment Operating Profit: Segment gross margin less segment selling, general, administrative and development expense attributable to

the segment, excluding stock-based compensation expense and corporate expenses. International rental and management segment

includes interest income, TV Azteca, net.

Pass-through Revenues: In several of our international markets we pass through certain operating expenses to our tenants, including in

Latin America where we primarily pass through ground rent expenses, and in India and South Africa, where we primarily pass through fuel

costs. We record pass-through as revenue and a corresponding offsetting expense for these events.

14


Risk Factors

This presentation 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 the proposed closing of the transaction,

expected financial projections for the portfolio, the expected cash consideration and the expected sources of funds to pay for the

transaction. Actual results may differ materially from those indicated in our forward-looking statements as a result of various

important factors, including: (1) decrease in demand for our communications sites would materially and adversely affect our

operating results, and we cannot control that demand; (2) if our tenants share site infrastructure to a significant degree or

consolidate or merge, our growth, revenue and ability to generate positive cash flows could be materially and adversely affected;

(3) increasing competition for tenants in the tower industry may materially and adversely affect our pricing; (4) competition for

assets could adversely affect our ability to achieve our return on investment criteria; (5) our business is subject to government

regulations and changes in current or future laws or regulations could restrict our ability to operate our business as we currently

do; (6) our leverage and debt service obligations may materially and adversely affect us; (7) failure to successfully and efficiently

integrate acquired or leased assets, including those leased from Verizon, into our operations may adversely affect our business,

operations and financial condition; (8) our expansion initiatives involve a number of risks and uncertainties that could adversely

affect our operating results, disrupt our operations or expose us to additional risk; (9) 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; (10) a substantial portion of our revenue is derived from a small

number of tenants, and we are sensitive to changes in the creditworthiness and financial strength of our tenants; (11) new

technologies or changes in a tenant’s business model could make our tower leasing business less desirable and result in

decreasing revenues; (12) if we fail to remain qualified as a REIT, we will be subject to tax at corporate income tax rates, which

may substantially reduce funds otherwise available; (13) complying with REIT requirements may limit our flexibility or cause us to

forego otherwise attractive opportunities; (14) certain of our business activities may be subject to corporate level income tax and

foreign taxes, which reduce our cash flows and may create deferred and contingent tax liabilities;

15


Risk Factors

(continued)

(15) we may need additional financing to fund capital expenditures, future growth and expansion initiatives and to satisfy our

REIT distribution requirements; (16) if we are unable to protect our rights to the land under our towers, it could adversely affect

our business and operating results; (17) 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 such towers will be

eliminated; (18) 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 if we fail to pay scheduled dividends on our preferred stock, which may jeopardize our

qualification for taxation as a REIT; (19) our costs could increase and our revenues could decrease due to perceived health risks

from radio emissions, especially if these perceived risks are substantiated; (20) we could have liability under environmental and

occupational safety and health laws; and (21) our towers, data centers or computer systems may be affected by natural disasters

and other unforeseen events for which our insurance may not provide adequate coverage. 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, 2014. We undertake no obligation to

update the information contained in this presentation to reflect subsequently occurring events or circumstances.

16

More magazines by this user
Similar magazines