Intrinsic value of American Tower REIT - AMT

Previous Close

$149.11

  Intrinsic Value

$53.02

stock screener

  Rating & Target

str. sell

-64%

Previous close

$149.11

 
Intrinsic value

$53.02

 
Up/down potential

-64%

 
Rating

str. sell

Our model is not good at valuating stocks of financial companies, such as AMT.

We calculate the intrinsic value of AMT stock by summing up the current values of future distributable cash flows generated by the company and dividing the sum by the number of outstanding shares. As such, the intrinsic value calculation depends entirely on projections. The more accurate your projections of the company's performance are - the more reliable is the intrinsic value calculation result. Please make sure to check the stock valuation input data below and adjust it if necessary. The quality of the output (intrinsic valuation result) is only as good as the quality of the input. See also DISCLAIMERS.

STOCK VALUATION INPUT DATA

Revenue (in 2017), $M
Initial revenue growth rate, %
Terminal revenue growth rate, %
Revenue decline factor
Initial discount rate, %
Discount rate multiplier
Variable cost ratio, %
Fixed operating expenses, $M
Interest rate on debt, %
Effective corporate tax rate, %
Production assets / Revenue, %
Life of production assets, yrs
Working capital / Revenue, %
Revenue / Adjusted assets
Adjusted equity ratio
Cash flow adjustment, % of Revenue
Book value of equity, $M
Shares outstanding, mln
Market capitalization, $bln 63.8

 

FINANCIAL STATEMENTS FORECAST and PRESENT VALUE CALCULATION

Fiscal year
   2018
   2019
   2020
   2021
   2022
   2023
   2024
   2025
   2026
   2027
   2028
   2029
   2030
   2031
   2032
   2033
   2034
   2035
   2036
   2037
   2038
   2039
   2040
   2041
   2042
   2043
   2044
   2045
   2046
   2047

INCOME STATEMENT

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Revenue growth rate, %
  15.20
  14.18
  13.26
  12.44
  11.69
  11.02
  10.42
  9.88
  9.39
  8.95
  8.56
  8.20
  7.88
  7.59
  7.33
  7.10
  6.89
  6.70
  6.53
  6.38
  6.24
  6.12
  6.00
  5.90
  5.81
  5.73
  5.66
  5.59
  5.53
  5.48
Revenue, $m
  7,677
  8,766
  9,928
  11,163
  12,468
  13,842
  15,285
  16,794
  18,372
  20,016
  21,729
  23,511
  25,364
  27,289
  29,291
  31,370
  33,532
  35,779
  38,115
  40,546
  43,077
  45,711
  48,456
  51,317
  54,300
  57,413
  60,662
  64,055
  67,599
  71,304
Variable operating expenses, $m
  4,955
  5,411
  5,898
  6,414
  6,961
  7,536
  8,140
  8,772
  9,432
  10,120
  9,095
  9,841
  10,616
  11,422
  12,260
  13,131
  14,035
  14,976
  15,954
  16,971
  18,030
  19,133
  20,282
  21,479
  22,728
  24,031
  25,391
  26,811
  28,295
  29,845
Fixed operating expenses, $m
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Total operating expenses, $m
  4,955
  5,411
  5,898
  6,414
  6,961
  7,536
  8,140
  8,772
  9,432
  10,120
  9,095
  9,841
  10,616
  11,422
  12,260
  13,131
  14,035
  14,976
  15,954
  16,971
  18,030
  19,133
  20,282
  21,479
  22,728
  24,031
  25,391
  26,811
  28,295
  29,845
Operating income, $m
  2,721
  3,354
  4,030
  4,748
  5,507
  6,306
  7,145
  8,023
  8,940
  9,896
  12,634
  13,670
  14,747
  15,867
  17,031
  18,240
  19,497
  20,803
  22,162
  23,575
  25,046
  26,578
  28,174
  29,837
  31,572
  33,382
  35,271
  37,244
  39,305
  41,459
EBITDA, $m
  7,654
  8,740
  9,899
  11,130
  12,431
  13,801
  15,239
  16,745
  18,317
  19,957
  21,664
  23,441
  25,288
  27,208
  29,204
  31,277
  33,432
  35,673
  38,002
  40,426
  42,949
  45,576
  48,312
  51,164
  54,139
  57,242
  60,482
  63,865
  67,399
  71,092
Interest expense (income), $m
  645
  1,091
  1,309
  1,547
  1,800
  2,070
  2,354
  2,654
  2,969
  3,298
  3,642
  4,001
  4,375
  4,763
  5,168
  5,588
  6,024
  6,478
  6,950
  7,440
  7,949
  8,480
  9,032
  9,606
  10,205
  10,829
  11,480
  12,159
  12,868
  13,608
  14,381
Earnings before tax, $m
  1,630
  2,045
  2,484
  2,948
  3,437
  3,952
  4,491
  5,054
  5,641
  6,254
  8,633
  9,295
  9,984
  10,699
  11,443
  12,215
  13,019
  13,854
  14,722
  15,626
  16,566
  17,546
  18,567
  19,632
  20,743
  21,902
  23,112
  24,376
  25,696
  27,077
Tax expense, $m
  440
  552
  671
  796
  928
  1,067
  1,212
  1,365
  1,523
  1,688
  2,331
  2,510
  2,696
  2,889
  3,090
  3,298
  3,515
  3,740
  3,975
  4,219
  4,473
  4,738
  5,013
  5,301
  5,601
  5,913
  6,240
  6,581
  6,938
  7,311
Net income, $m
  1,190
  1,493
  1,813
  2,152
  2,509
  2,885
  3,278
  3,689
  4,118
  4,565
  6,302
  6,786
  7,288
  7,811
  8,353
  8,917
  9,504
  10,113
  10,747
  11,407
  12,094
  12,809
  13,554
  14,331
  15,142
  15,988
  16,872
  17,794
  18,758
  19,766

BALANCE SHEET

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Cash and short-term investments, $m
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Total assets, $m
  38,194
  43,610
  49,393
  55,535
  62,029
  68,866
  76,043
  83,555
  91,401
  99,583
  108,104
  116,969
  126,187
  135,768
  145,725
  156,071
  166,825
  178,004
  189,629
  201,723
  214,311
  227,419
  241,074
  255,307
  270,149
  285,635
  301,799
  318,679
  336,314
  354,746
Adjusted assets (=assets-cash), $m
  38,194
  43,610
  49,393
  55,535
  62,029
  68,866
  76,043
  83,555
  91,401
  99,583
  108,104
  116,969
  126,187
  135,768
  145,725
  156,071
  166,825
  178,004
  189,629
  201,723
  214,311
  227,419
  241,074
  255,307
  270,149
  285,635
  301,799
  318,679
  336,314
  354,746
Revenue / Adjusted assets
  0.201
  0.201
  0.201
  0.201
  0.201
  0.201
  0.201
  0.201
  0.201
  0.201
  0.201
  0.201
  0.201
  0.201
  0.201
  0.201
  0.201
  0.201
  0.201
  0.201
  0.201
  0.201
  0.201
  0.201
  0.201
  0.201
  0.201
  0.201
  0.201
  0.201
Average production assets, $m
  31,905
  36,429
  41,261
  46,392
  51,816
  57,528
  63,523
  69,798
  76,352
  83,187
  90,305
  97,711
  105,411
  113,415
  121,732
  130,375
  139,358
  148,696
  158,408
  168,511
  179,026
  189,975
  201,382
  213,272
  225,671
  238,607
  252,110
  266,211
  280,942
  296,339
Working capital, $m
  -514
  -587
  -665
  -748
  -835
  -927
  -1,024
  -1,125
  -1,231
  -1,341
  -1,456
  -1,575
  -1,699
  -1,828
  -1,962
  -2,102
  -2,247
  -2,397
  -2,554
  -2,717
  -2,886
  -3,063
  -3,247
  -3,438
  -3,638
  -3,847
  -4,064
  -4,292
  -4,529
  -4,777
Total debt, $m
  24,246
  28,644
  33,340
  38,328
  43,600
  49,152
  54,979
  61,079
  67,450
  74,094
  81,013
  88,212
  95,697
  103,477
  111,561
  119,963
  128,694
  137,772
  147,212
  157,032
  167,253
  177,897
  188,985
  200,542
  212,594
  225,168
  238,294
  252,000
  266,320
  281,286
Total liabilities, $m
  31,013
  35,411
  40,107
  45,095
  50,367
  55,919
  61,747
  67,846
  74,218
  80,861
  87,780
  94,979
  102,464
  110,244
  118,328
  126,730
  135,462
  144,539
  153,979
  163,799
  174,021
  184,664
  195,752
  207,309
  219,361
  231,936
  245,061
  258,768
  273,087
  288,054
Total equity, $m
  7,180
  8,199
  9,286
  10,441
  11,661
  12,947
  14,296
  15,708
  17,183
  18,722
  20,323
  21,990
  23,723
  25,524
  27,396
  29,341
  31,363
  33,465
  35,650
  37,924
  40,290
  42,755
  45,322
  47,998
  50,788
  53,699
  56,738
  59,912
  63,227
  66,692
Total liabilities and equity, $m
  38,193
  43,610
  49,393
  55,536
  62,028
  68,866
  76,043
  83,554
  91,401
  99,583
  108,103
  116,969
  126,187
  135,768
  145,724
  156,071
  166,825
  178,004
  189,629
  201,723
  214,311
  227,419
  241,074
  255,307
  270,149
  285,635
  301,799
  318,680
  336,314
  354,746
Debt-to-equity ratio
  3.380
  3.490
  3.590
  3.670
  3.740
  3.800
  3.850
  3.890
  3.930
  3.960
  3.990
  4.010
  4.030
  4.050
  4.070
  4.090
  4.100
  4.120
  4.130
  4.140
  4.150
  4.160
  4.170
  4.180
  4.190
  4.190
  4.200
  4.210
  4.210
  4.220
Adjusted equity ratio
  0.188
  0.188
  0.188
  0.188
  0.188
  0.188
  0.188
  0.188
  0.188
  0.188
  0.188
  0.188
  0.188
  0.188
  0.188
  0.188
  0.188
  0.188
  0.188
  0.188
  0.188
  0.188
  0.188
  0.188
  0.188
  0.188
  0.188
  0.188
  0.188
  0.188

CASH FLOW

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net income, $m
  1,190
  1,493
  1,813
  2,152
  2,509
  2,885
  3,278
  3,689
  4,118
  4,565
  6,302
  6,786
  7,288
  7,811
  8,353
  8,917
  9,504
  10,113
  10,747
  11,407
  12,094
  12,809
  13,554
  14,331
  15,142
  15,988
  16,872
  17,794
  18,758
  19,766
Depreciation, amort., depletion, $m
  4,933
  5,385
  5,868
  6,381
  6,924
  7,495
  8,094
  8,722
  9,377
  10,061
  9,031
  9,771
  10,541
  11,341
  12,173
  13,038
  13,936
  14,870
  15,841
  16,851
  17,903
  18,998
  20,138
  21,327
  22,567
  23,861
  25,211
  26,621
  28,094
  29,634
Funds from operations, $m
  6,123
  6,878
  7,681
  8,533
  9,433
  10,380
  11,373
  12,411
  13,496
  14,626
  15,332
  16,557
  17,829
  19,152
  20,526
  21,955
  23,439
  24,983
  26,588
  28,258
  29,996
  31,806
  33,693
  35,659
  37,709
  39,849
  42,083
  44,415
  46,853
  49,400
Change in working capital, $m
  -68
  -73
  -78
  -83
  -87
  -92
  -97
  -101
  -106
  -110
  -115
  -119
  -124
  -129
  -134
  -139
  -145
  -151
  -157
  -163
  -170
  -177
  -184
  -192
  -200
  -209
  -218
  -227
  -237
  -248
Cash from operations, $m
  6,191
  6,951
  7,759
  8,616
  9,520
  10,472
  11,469
  12,512
  13,601
  14,736
  15,447
  16,676
  17,953
  19,281
  20,661
  22,094
  23,584
  25,133
  26,744
  28,421
  30,166
  31,983
  33,876
  35,850
  37,909
  40,057
  42,300
  44,643
  47,090
  49,649
Maintenance CAPEX, $m
  -2,769
  -3,191
  -3,643
  -4,126
  -4,639
  -5,182
  -5,753
  -6,352
  -6,980
  -7,635
  -8,319
  -9,031
  -9,771
  -10,541
  -11,341
  -12,173
  -13,038
  -13,936
  -14,870
  -15,841
  -16,851
  -17,903
  -18,998
  -20,138
  -21,327
  -22,567
  -23,861
  -25,211
  -26,621
  -28,094
New CAPEX, $m
  -4,213
  -4,524
  -4,831
  -5,131
  -5,424
  -5,712
  -5,995
  -6,275
  -6,555
  -6,835
  -7,118
  -7,406
  -7,700
  -8,004
  -8,317
  -8,643
  -8,983
  -9,338
  -9,711
  -10,103
  -10,515
  -10,949
  -11,407
  -11,890
  -12,399
  -12,936
  -13,503
  -14,101
  -14,732
  -15,397
Cash from investing activities, $m
  -6,982
  -7,715
  -8,474
  -9,257
  -10,063
  -10,894
  -11,748
  -12,627
  -13,535
  -14,470
  -15,437
  -16,437
  -17,471
  -18,545
  -19,658
  -20,816
  -22,021
  -23,274
  -24,581
  -25,944
  -27,366
  -28,852
  -30,405
  -32,028
  -33,726
  -35,503
  -37,364
  -39,312
  -41,353
  -43,491
Free cash flow, $m
  -791
  -764
  -715
  -641
  -543
  -422
  -278
  -115
  67
  266
  11
  240
  482
  736
  1,002
  1,278
  1,564
  1,859
  2,163
  2,477
  2,799
  3,131
  3,472
  3,822
  4,183
  4,554
  4,937
  5,331
  5,737
  6,157
Issuance/(repayment) of debt, $m
  4,041
  4,398
  4,696
  4,988
  5,273
  5,552
  5,827
  6,100
  6,371
  6,644
  6,919
  7,199
  7,485
  7,780
  8,085
  8,401
  8,732
  9,077
  9,440
  9,821
  10,221
  10,643
  11,088
  11,557
  12,052
  12,574
  13,125
  13,707
  14,320
  14,966
Issuance/(repurchase) of shares, $m
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Cash from financing (excl. dividends), $m  
  4,041
  4,398
  4,696
  4,988
  5,273
  5,552
  5,827
  6,100
  6,371
  6,644
  6,919
  7,199
  7,485
  7,780
  8,085
  8,401
  8,732
  9,077
  9,440
  9,821
  10,221
  10,643
  11,088
  11,557
  12,052
  12,574
  13,125
  13,707
  14,320
  14,966
Total cash flow (excl. dividends), $m
  3,250
  3,634
  3,981
  4,346
  4,730
  5,130
  5,549
  5,985
  6,438
  6,910
  6,929
  7,438
  7,967
  8,516
  9,087
  9,679
  10,295
  10,936
  11,603
  12,297
  13,021
  13,774
  14,560
  15,380
  16,235
  17,129
  18,062
  19,037
  20,057
  21,124
Retained Cash Flow (-), $m
  -938
  -1,018
  -1,087
  -1,155
  -1,221
  -1,285
  -1,349
  -1,412
  -1,475
  -1,538
  -1,602
  -1,667
  -1,733
  -1,801
  -1,872
  -1,945
  -2,022
  -2,102
  -2,186
  -2,274
  -2,366
  -2,464
  -2,567
  -2,676
  -2,790
  -2,911
  -3,039
  -3,173
  -3,315
  -3,465
Prev. year cash balance distribution, $m
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Cash flow adjustment, $m
  107
  123
  140
  159
  179
  199
  221
  245
  269
  294
  320
  348
  376
  406
  437
  469
  502
  537
  572
  610
  649
  689
  731
  775
  821
  869
  919
  971
  1,025
  1,082
Cash available for distribution, $m
  2,311
  2,616
  2,894
  3,192
  3,509
  3,845
  4,200
  4,572
  4,963
  5,372
  5,328
  5,772
  6,234
  6,715
  7,215
  7,734
  8,274
  8,835
  9,418
  10,024
  10,654
  11,310
  11,993
  12,704
  13,445
  14,217
  15,023
  15,864
  16,742
  17,659
Discount rate, %
  10.30
  10.82
  11.36
  11.92
  12.52
  13.15
  13.80
  14.49
  15.22
  15.98
  16.78
  17.62
  18.50
  19.42
  20.39
  21.41
  22.48
  23.61
  24.79
  26.03
  27.33
  28.70
  30.13
  31.64
  33.22
  34.88
  36.62
  38.45
  40.38
  42.40
PV of cash for distribution, $m
  2,096
  2,130
  2,096
  2,034
  1,945
  1,833
  1,699
  1,549
  1,387
  1,220
  967
  824
  686
  560
  446
  347
  263
  195
  140
  98
  67
  44
  28
  17
  10
  6
  3
  2
  1
  0
Current shareholders' claim on cash, %
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0

American Tower Corporation (ATC) is a holding company. The Company operates as a real estate investment trust (REIT), which owns, operates and develops multitenant communications real estate. ATC's segments include U.S. property, Asia property, EMEA property, Latin America property, Services and Other. Its primary business is property operations, which include the leasing of space on communications sites to wireless service providers, radio and television broadcast companies, wireless data providers, government agencies and municipalities, and tenants in various other industries. Its U.S. property segment includes operations in the United States. Its Asia property segment includes operations in India. The EMEA property segment includes operations in Germany, Ghana, Nigeria, South Africa and Uganda. The Latin America property segment includes operations in Brazil, Chile, Colombia, Costa Rica, Mexico and Peru. Its services segment offers tower-related services in the United States.

FINANCIAL RATIOS  of  American Tower REIT (AMT)

Valuation Ratios
P/E Ratio 66.6
Price to Sales 11
Price to Book 9.4
Price to Tangible Book
Price to Cash Flow 23.6
Price to Free Cash Flow 31.5
Growth Rates
Sales Growth Rate 21.2%
Sales - 3 Yr. Growth Rate %
EPS Growth Rate %
EPS - 3 Yr. Growth Rate %
Capital Spending Gr. Rate -6.3%
Cap. Spend. - 3 Yr. Gr. Rate -1.2%
Financial Strength
Quick Ratio 3
Current Ratio 0.1
LT Debt to Equity 270.5%
Total Debt to Equity 274%
Interest Coverage 3
Management Effectiveness
Return On Assets 5.2%
Ret/ On Assets - 3 Yr. Avg. 5.5%
Return On Total Capital 3.9%
Ret/ On T. Cap. - 3 Yr. Avg. 3.9%
Return On Equity 14.3%
Return On Equity - 3 Yr. Avg. 16.4%
Asset Turnover 0.2
Profitability Ratios
Gross Margin 69%
Gross Margin - 3 Yr. Avg. 71.6%
EBITDA Margin 57%
EBITDA Margin - 3 Yr. Avg. 57.5%
Operating Margin 32.1%
Oper. Margin - 3 Yr. Avg. 33.5%
Pre-Tax Margin 19.5%
Pre-Tax Margin - 3 Yr. Avg. 19.3%
Net Profit Margin 16.5%
Net Profit Margin - 3 Yr. Avg. 17%
Effective Tax Rate 13.9%
Eff/ Tax Rate - 3 Yr. Avg. 13.4%
Payout Ratio 92.7%

AMT stock valuation input parameters

Revenue. Company's revenue (or sales) is always the starting point of any cash flow forecast. In the AMT stock intrinsic value calculation we used $6664 million for the last fiscal year's total revenue generated by American Tower REIT. The default revenue input number comes from 2017 income statement of American Tower REIT. You may change it if you feel that it should be adjusted for some unusual circumstances that are not expected to be repeated in the future or if you already know (from interim financial statements, for example) that this year's revenue is going to be quite different.

Revenue growth rate. Forecasted future revenue growth rate is the most important input parameter for the intrinsic value calculation. Unlike other input parameters that are reasonably expected to be in line with their historic averages or their historic trends, the revenue growth rate by and large is a wild card: nobody really knows what the company's revenue will be in the future. Of course, the level of unpredictability is different for different industries (utility companies being the most predictable and, thus, less risky).
    We use three input parameters to forecast the revenue growth rate in our AMT stock valuation model: a) initial revenue growth rate of 15.2% whose default value is the revenue growth rate in the most recent quarter compared to the quarterly revenue a year ago; b) terminal revenue growth rate of 5% whose default value is chosen to be close to the average nominal (i.e. not adjusted for inflation) GDP growth rate; and c) revenue decline factor of 0.9, which stipulates that revenue growth rate in each forecasted year will be equal to the difference of the revenue growth rate in the preceding year and the terminal revenue growth rate multiplied by this revenue decline factor (with the passage of time the revenue growth rate will be approaching the terminal revenue growth rate, but not quite reaching it - though the difference could be infinitesimally small).
    At the revenue decline factor of 1, the future revenue growth rate is forecasted to be constant and equal to the initial revenue growth rate. The smaller the revenue decline factor, the faster the revenue growth rate will approach the terminal revenue growth.

Discount rate. The discount rate is used for determining the present value of future cash flows: future cash flows are "discounted" as at normal conditions (that translate into positive expected return on investment) one dollar today is worth more than the same dollar in the future. Unlike all other valuation models, we use variable discount rate, i.e. it increases for each consecutive year. This is done to account for higher risk of cash flows coming in further in the future.
    The initial discount rate of 10.3%, whose default value for AMT is calculated based on our internal credit rating of American Tower REIT, is applied to the cash flow expected to be received a year from now (well, actually, to be precise, in the financial year following the base year - the last year for which we have financial statements). For each consecutive year the discount rate is multiplied by the discount rate multiplier of 1.05, e.i. each year it increases by 5%. Feel free to change this number to correspond to your level of risk assessment of American Tower REIT.
    By the way, it is easy to set the discount rate to be constant (this would make comparison with other valuation models easier): just set the discount rate multiplier equal to 1 and chose the magnitude of the initial discount rate to your liking.

Variable cost ratio is the ratio of variable costs (i.e. costs that fluctuate with fluctuation of the volume of production) to the revenue expressed as a percentage. In the calculation of intrinsic value of AMT stock the variable cost ratio is equal to 68%.

Fixed operating expenses is just that - expenses that are not dependant on the volume of production. They are set to $0 million in the base year in the intrinsic value calculation for AMT stock. These expenses increase with the level of inflation in subsequent years.

Interest rate on debt is the average all-in rate of interest paid by the company on its debt. It is set at 5.4% for American Tower REIT.

Corporate tax rate of 27% is the nominal tax rate for American Tower REIT. In reality, companies find ways to pay much less taxes than that or not to pay them at all.

Cash flow adjustment could be used for any adjustment the investor deems necessary. Most commonly we use this field to account for stock options-related effects in excess of what is reported on the company's income statement. The cash flow adjustment is expressed as a percentage of the revenue, and in the current valuation of the AMT stock is equal to 1.6%.

Production assets are the company's assets used for manufacturing products or provision of services. In the valuation model input table they are expressed as a percentage of revenue and for AMT are equal to 415.6%.

Life of production assets of 10 years is the average useful life of capital assets used in American Tower REIT operations. It is used to calculate yearly capital expenditures needed to keep these assets in good order - we call it the maintenance CAPEX.

Working capital is the difference between the company's current assets and liabilities. In the model we use the ratio of working capital to revenue, which for AMT is equal to -6.7%. A negative number means that the company is apt at using financial resources of its suppliers and customers; a large positive number, on the other hand, means that it either provides in-kind financing to others or is not good at managing its inventories.

Book value of equity - $6242 million for American Tower REIT - is used in calculation of the "floor" for intrinsic valuation based on the discounted cash flow (DCF) method. Even if the prospects are very bad for a company, its assets could always be sold now for their current fair market value.

Shares outstanding of 428 million for American Tower REIT is needed to calculate the intrinsic value of one share.

Market capitalization is used here only for reference purposes and as a quick check that the share price and the number of shares outstanding numbers are correct - something especially to be cognizant about at stock splits. So, the market capitalization of American Tower REIT at the current share price and the inputted number of shares is $63.8 billion.

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