American Tower Corporation Reports First Quarter 2007 Financial Results.FIRST QUARTER 2007 HIGHLIGHTS * Total revenue increased to $352.5 million * Adjusted EBITDA (Earnings Before Interest, Taxes, Depreciation and Amortization) A metric used to show a company's profitability, but not its cash flow. EBITDA became popular in the 1980s to show the potential profitability of leveraged buyouts, but has become increased to $236.7 million * Cash provided by operating activities increased to $171.4 million * Free Cash Flow increased to $139.9 million * Net income increased to $22.2 million BOSTON -- American Tower Corporation Formed in 1995, American Tower Corporation is a publicly held company (NYSE: AMT) that is a leading owner and operator of wireless and broadcast communications sites in North America. Today American Tower owns and operates over 30,000 sites in the United States, Mexico and Brazil. (NYSE NYSE See: New York Stock Exchange : AMT See vPro. ) today reported financial results for the first quarter ended March 31, 2007. Jim Taiclet, American Tower's Chief Executive Officer, stated, "Wireless communications wireless communications System using radio-frequency, infrared, microwave, or other types of electromagnetic or acoustic waves in place of wires, cables, or fibre optics to transmit signals or data. continue to increase in importance for consumers and business users alike. As a result, our major customers in both the U.S. and Latin America Latin America, the Spanish-speaking, Portuguese-speaking, and French-speaking countries (except Canada) of North America, South America, Central America, and the West Indies. are enjoying sustained growth in revenue and profitability. Moreover, wireless service providers are focusing on improving the quality of their services and launching new services. "These two factors, the profitable growth of the wireless industry and its focus on high quality existing and new services, drive strong demand for tower space that we believe is sustainable over time. Our first quarter financial results reflect both this overarching o·ver·arch·ing adj. 1. Forming an arch overhead or above: overarching branches. 2. Extending over or throughout: "I am not sure whether the missing ingredient . . . industry growth trend and American Tower's ability to consistently deliver the highest operating margins Operating Margin A ratio used to measure a company's pricing strategy and operating efficiency. Calculated by: in the tower sector. "We are also taking advantage of the size and quality of our tower portfolio to advance our financial strategy. Our recently completed $1.75 billion securitization Securitization The process of creating a financial instrument by combining other financial assets and then marketing them to investors. Notes: Mortgage backed securities are a perfect example of securitization. May also be spelled as "securitisation. of a portion of our tower assets increased our financial flexibility while reducing our cost of financing. With the securitized securitized Of, related to, or being debt securities that are secured with assets. For example, mortgage purchase bonds are secured by mortgages that have been purchased with the bond issue's proceeds. financing in place, we are in a solid position to move forward on additional improvements to our balance sheet while supporting our ongoing share repurchase Share Repurchase A program by which a company buys back its own shares from the marketplace, reducing the number of outstanding shares. This is usually an indication that the company's management thinks the shares are undervalued. program and maintaining our readiness to pursue strategic opportunities." First Quarter 2007 Operating Highlights American Tower generated the following operating results for the quarter ended March 31, 2007 (unless otherwise indicated, all comparative information is compared against the quarter ended March 31, 2006): Total revenues increased 10% to $352.5 million and rental and management segment revenues increased 9% to $346.0 million. Rental and Management Segment Gross Margin increased 11% to $265.8 million and Services segment revenue and Gross Margin increased to $6.4 million and $2.9 million, respectively. Total selling, general, administrative and development expense was $48.6 million. The Company's selling, general, administrative and development expense for the quarter includes stock-based compensation expense of $16.7 million and $2.8 million of additional costs related to the review of the Company's stock option granting practices, related legal and governmental proceedings and other related costs. Including these additional costs related to the stock option review, Adjusted EBITDA increased 10% to $236.7 million and Adjusted EBITDA Margin was 67%. Income from operations increased to $86.1 million, and net income increased to $22.2 million, or $0.05 per basic and diluted common share. Free Cash Flow increased to $139.9 million, consisting of $171.4 million of cash provided by operating activities, less $31.4 million of payments for purchases of property and equipment and construction activities, including $16.6 million of discretionary capital spending capital spending Spending for long-term assets such as factories, equipment, machinery, and buildings that permits the production of more goods and services in future years. . The Company completed the construction of 22 towers and the installation of 4 in-building systems during the quarter and spent approximately $9.9 million on ground lease purchases. Subsequent to the end of the first quarter of 2007, the Company received net proceeds Net Proceeds The amount received after all costs are deducted from the sale of a piece of property or security. Notes: In the case of an investor selling a security, net proceeds represent the proceeds from the sale minus any trading costs (i.e. commissions). of approximately $80 million in connection with the successful completion of its refund claim with the Internal Revenue Service related to the carry back of certain federal net operating losses Net operating losses Losses that a firm can take advantage of to reduce taxes. . Please refer to Non-GAAP and Defined Financial Measures on pages 3 and 4 for definitions of Rental and Management Segment Gross Margin, Services Segment Gross Margin, Adjusted EBITDA, Adjusted EBITDA Margin and Free Cash Flow. For additional financial information, including reconciliations to GAAP GAAP See: Generally Accepted Accounting Principles GAAP See generally accepted accounting principles (GAAP). measures, please refer to the supplemental schedules of selected financial information on pages 8 through 11. Stock Repurchase Stock repurchase A firm's repurchase of outstanding shares of its common stock. Program During the quarter ended March 31, 2007, the Company completed its $750 million stock repurchase program and commenced repurchases pursuant to its $1.5 billion stock repurchase program. As a result, during the quarter the Company repurchased a total of 12.6 million shares of its Class A common stock for approximately $496 million. As of May 2, 2007, the Company had repurchased pursuant to its publicly announced stock repurchase programs an aggregate of 29.3 million shares of its Class A common stock for approximately $1,039 million since November 2005, which includes the repurchase of 3.7 million shares of its Class A common stock for approximately $144 million subsequent to March 31, 2007. The Company expects to complete the remaining $1,211 million of stock repurchases pursuant to its current $1.5 billion stock repurchase program by February of 2008. Financing Highlights On May 4, 2007, the Company completed the issuance, in a private transaction, of $1.75 billion of Commercial Mortgage Pass-Through Certificates Pass-Through Certificates (PTCs) are instruments that evidence the ownership of two or more Equipment Trust Certificates. In other words, Equipment Trust Certificates may be bundled into a pass-through structure as a means of diversifying the asset pool and/or increasing the size . The Certificates are backed by debt of two special-purpose subsidiaries of the Company, which are secured primarily by mortgages on their interests in 5,295 wireless and broadcast communication towers and the related tower sites. The Certificates have an expected life of seven years with a final maturity date of April 2037 and the weighted average interest rate on the certificates is approximately 5.61%. The Company used a portion of the net proceeds from the offering of the Certificates to repay approximately $765 million outstanding under its SpectraSite credit facility, plus accrued interest Accrued Interest The interest that has accumulated on a bond since the last interest payment up to but not including the settlement date. There are two methods for calculating accrued interest: 1) 360-day year method, used for corporate and municipal bonds. thereon and other costs related thereto, as well as $250 million under its American Tower revolving credit Revolving Credit A line of credit where the customer pays a commitment fee and is then allowed to use the funds when they are needed. It is usually used for operating purposes, fluctuating each month depending on the customers current cash flow needs. facility. The Company expects to use the remaining net proceeds to fund the repurchase of approximately $325 million of the Company's 7.25% senior subordinated notes due 2011 of American Towers, Inc. pursuant to the tender offer previously announced by the Company, to pay other consideration payable in connection with the tender offer and the related consent solicitation Consent Solicitation A solicitation by one party to the stakeholders of a particular security for the consent of a material change. Notes: Should the majority of stakeholders provide valid consent prior to the consent expiry date, the issuer may then follow through with , and for general corporate purposes. Pro forma As a matter of form or for the sake of form. Used to describe accounting, financial, and other statements or conclusions based upon assumed or anticipated facts. The phrase pro forma for the securitization, including the use of proceeds described above, the Company had approximately $1.0 billion of available liquidity as of May 7, 2007. Full Year 2007 Outlook The following estimates are based on a number of assumptions that management believes to be reasonable, and reflect the Company's expectations as of May 7, 2007. Please refer to the cautionary language regarding "forward-looking" statements included in this press release when considering this information. The Company undertakes no obligation to update this information. [TABLE OMITTED] Conference Call Information American Tower will host a conference call today at 8:30 a.m. ET to discuss its first quarter 2007 results and the Company's outlook for the full year 2007. The call will be hosted by Brad Singer, Chief Financial Officer, who will be joined by Jim Taiclet, Chairman and Chief Executive Officer. The dial-in numbers are US/Canada: (877) 235-9047 and International: (706) 645-9644, access code 5191904. A replay of the call will be available from 9:30 a.m. ET May 7, 2007 until 11:59 p.m. ET May 14, 2007. The replay dial-in numbers are US/Canada: (800) 642-1687 and International: (706) 645-9291, access code 5191904. American Tower will also sponsor a live simulcast of the call on its website, www.americantower.com. When available, a replay of the call will be accessible on the Company's website. American Tower is a leading independent owner, operator and developer of broadcast and wireless communications sites in the United States United States, officially United States of America, republic (2005 est. pop. 295,734,000), 3,539,227 sq mi (9,166,598 sq km), North America. The United States is the world's third largest country in population and the fourth largest country in area. , Mexico and Brazil. American Tower owns and operates over 22,000 sites in the United States, Mexico, and Brazil. Additionally, American Tower manages approximately 2,000 revenue producing rooftop and tower sites. For more information about American Tower, please visit www.americantower.com. Non-GAAP and Defined Financial Measures In addition to the results prepared in accordance with generally accepted accounting principles The standard accounting rules, regulations, and procedures used by companies in maintaining their financial records. Generally accepted accounting principles (GAAP) provide companies and accountants with a consistent set of guidelines that cover both broad accounting (GAAP) provided throughout this press release, the Company has presented the following non-GAAP and defined financial measures: Rental and Management Segment Gross Margin, Services Segment Gross Margin, Adjusted EBITDA, Adjusted EBITDA Margin and Free Cash Flow. American Tower defines Rental and Management Segment Gross Margin as income from operations before depreciation, amortization and accretion, impairments, net loss on sale of long-lived assets, restructuring and merger related expense, stock-based compensation expense, corporate expenses, rental and management segment overhead, services segment overhead, services segment operating expenses Operating expenses The amount paid for asset maintenance or the cost of doing business, excluding depreciation. Earnings are distributed after operating expenses are deducted. , services segment revenue, plus interest income, TV Azteca TV Azteca is the second largest Mexican television network. It was established in 1968 as the state-owned Instituto Mexicano de la Televisión ("Imevisión"), and was privatized under its current name in 1993. Its flagship program is the newscast Hechos. , net. American Tower defines Services Segment Gross Margin as income from operations before depreciation, amortization and accretion, impairments, net loss on sale of long-lived assets, restructuring and merger related expense, stock-based compensation expense, corporate expenses, services segment overhead, rental and management segment overhead, rental and management segment operating expenses, and rental and management segment revenue. American Tower defines Adjusted EBITDA as income from operations before depreciation, amortization and accretion, impairments, net loss on sale of long-lived assets, restructuring and merger related expense and stock-based compensation expense, plus interest income, TV Azteca, net. American Tower defines Adjusted EBITDA Margin as a percentage of Adjusted EBITDA over total revenue. American Tower defines Free Cash Flow as cash provided by operating activities less payments for purchase of property and equipment and construction activities. These measures are not intended as substitutes for other measures of financial performance determined in accordance with GAAP. They are presented as additional information because management believes they are useful indicators of the current financial performance of our core businesses. We believe that these measures can assist in comparing company performances on a consistent basis without regard to depreciation and amortization or capital structure. Our concern is that depreciation and amortization can vary significantly among companies depending on accounting methods, particularly where acquisitions or non-operating factors including historical cost bases are involved. Notwithstanding the foregoing, the Company's measures of Rental and Management Segment Gross Margin, Services Segment Gross Margin, Adjusted EBITDA, Adjusted EBITDA Margin and Free Cash Flow may not be comparable to similarly titled measures used by other companies. Cautionary Language Concerning Forward-Looking Statements forward-looking statement A projected financial statement based on management expectations. A forward-looking statement involves risks with regard to the accuracy of assumptions underlying the projections. This press release contains "forward-looking statements" concerning the Company's goals, beliefs, expectations, strategies, objectives, plans, future operating results and underlying assumptions, and other statements that are not necessarily based on historical facts. Actual results may differ materially from those indicated in our forward-looking statements as a result of various important factors, including: (1) a decrease in demand for tower space would materially and adversely affect our operating results and we cannot control that demand; (2) if our wireless service provider customers consolidate or merge with each other to a significant degree, our growth, revenue and ability to generate positive cash flows could be adversely affected; (3) substantial leverage and debt service obligations may adversely affect us; (4) restrictive covenants Restrictive covenants Provisions that place constraints on the operations of borrowers, such as restrictions on working capital, fixed assets, future borrowing, and payment of dividends. in our credit facilities credit facilities npl → facilidades fpl de crédito credit facilities npl → facilités fpl de paiement credit facilities and indentures could adversely affect our business by limiting flexibility; (5) due to the long-term expectations of revenue from tenant leases, the tower industry is sensitive to the creditworthiness Creditworthiness The condition in which the risk of default on a debt obligation by that entity is deemed low. Creditworthiness Eligibility of an individual or firm to borrow money. of its tenants; (6) our foreign operations are subject to economic, political and other risks that could adversely affect our revenues or financial position; (7) a substantial portion of our revenues is derived from a small number of customers; (8) status of Iusacell Celular's financial restructuring exposes us to risks and uncertainties (9) new technologies could make our tower leasing business less desirable to potential tenants and result in decreasing revenues; (10) we could have liability under environmental laws; (11) our business is subject to governmental regulations and changes in current or future laws or regulations could restrict our ability to operate our business as we currently do; (12) increasing competition in the tower industry may create pricing pressures that may adversely affect us; (13) if we are unable to protect our rights to the land under our towers, it could adversely affect our business and operating results; (14) if we are unable or choose not to exercise our rights to purchase towers that are subject to lease and sublease sublease n. the lease of all or a portion of premises by a tenant who has leased the premises from the owner. A sublease may be prohibited by the original lease, or require written permission from the owner. agreements at the end of the applicable period, our cash flows derived from such towers would be eliminated; (15) our towers may be affected by natural disasters and other unforeseen damage for which our insurance may not provide adequate coverage; (16) our costs could increase and our revenues could decrease due to perceived health risks from radio emissions, especially if these risks are substantiated; (17) our stock option granting practices are subject to ongoing governmental proceedings, which could result in fines, penalties or other liability; (18) pending civil litigation An action brought in court to enforce a particular right. The act or process of bringing a lawsuit in and of itself; a judicial contest; any dispute. When a person begins a civil lawsuit, the person enters into a process called litigation. relating to relating to relate prep → concernant relating to relate prep → bezüglich +gen, mit Bezug auf +acc our stock option granting practices exposes us to risks and uncertainties; and (19) the bankruptcy proceeding of our Verestar subsidiary exposes us to risks and uncertainties. For other important 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 Form 10-K A report required by the SEC from exchange-listed companies that provides for annual disclosure of certain financial information. Form 10-K See 10-K. for the year ended December 31, 2006 under the caption "Risk Factors." We undertake no obligation to update the information contained in this press release to reflect subsequently occurring events or circumstances. 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