American Tower Corporation Reports Fourth Quarter and Full Year 2005 Results.BOSTON Boston, town, England Boston, town (1991 pop. 26,495), E central England, on the Witham River. Boston's fame as a port dates from the 13th cent., when it was a Hanseatic port trading wool and wine. Having recovered from a decline in the 18th and 19th cent. -- 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. ): Fourth Quarter 2005 Highlights --Rental and management segment revenues increased to $302.8 million --Rental and management segment operating profit Operating profit (or loss) Revenue from a firm's regular activities less costs and expenses and before income deductions. operating profit See operating income. increased to $207.5 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 $196.1 million --Cash from operations was $137.0 million American Tower Corporation (NYSE: AMT) today reported financial results for the fourth quarter and full year ended December December: see month. 31, 2005. Jim Taiclet, American American, river, 30 mi (48 km) long, rising in N central Calif. in the Sierra Nevada and flowing SW into the Sacramento River at Sacramento. The discovery of gold at Sutter's Mill (see Sutter, John Augustus) along the river in 1848 led to the California gold rush of Tower's Chief Executive Officer stated, "2005 was a transformational year for American Tower, led by our most significant accomplishment, the successful execution of our merger with SpectraSite. As a result, we grew our portfolio to over 22,000 sites and generated revenues of over $944 million, making us the clear leader in the wireless infrastructure industry. Our merger integration continues right on track, and we expect the final milestones will be completed during the first half of 2006. In addition to the success we have had with the merger integration, we have also delivered another solid quarter of financial and operational results, creating a firm foundation for 2006. "We expect 2006 to be another strong year for the tower industry and American Tower. Our wireless carrier customers in the U.S., Mexico Mexico, city, Mexico Mexico or Mexico City, Span. Ciudad de México (Méjico), city (1990 pop. 8,236,960; 1991 met. area est. 20,899,000), central Mexico, capital and largest city of Mexico. , and Brazil Brazil (brəzĭl`), Port. Brasil, officially Federative Republic of Brazil, republic (2005 est. pop. 186,113,000), 3,286,470 sq mi (8,511,965 sq km), E South America. continue to experience significant growth in new subscribers and usage by existing subscribers. This growth creates increasing demands on wireless networks and positively impacts wireless carriers' operating performance, generating higher returns and the financial ability to fund network investments, including new tower space. In addition to improving the quality of their networks, wireless service providers are deploying high speed data networks driving incremental Additional or increased growth, bulk, quantity, number, or value; enlarged. Incremental cost is additional or increased cost of an item or service apart from its actual cost. demand on our sites. We are also hopeful that the upcoming wireless spectrum auctions may spur additional growth in data related services and demand from emerging wireless carriers. "The breadth Breadth The percentage of assets or stocks advancing relative to those unchanged or declining. Also the number of independent forecasts available per year. A stock picker forecasting returns to 100 stocks every quarter exhibits a breadth of 400, assuming each forecast is and depth of our tower portfolio provides us with a greater ability to meet our customers' needs as they continue to expand their networks and deploy new services. With our industry leading scale and commitment across our company to responsive, high quality customer service, we expect to secure a significant share of new business opportunities in 2006." Fourth Quarter 2005 Operating Highlights American Tower generated the following operating results for the quarter ended December 31, 2005: Total revenues increased 66.6% to $307.6 million and rental RENTAL. A roll or list of the rents of an estate containing the description of the lands let, the names of the tenants, and other particulars connected with such estate. This is the same as rent roll, from which it is said to be corrupted. and management segment revenues increased 70.8% to $302.8 million, of which $103.8 million was attributable attributable emanating from or pertaining to attribute. attributable proportion see attributable risk (below). attributable risk to SpectraSite, as compared to the same period in 2004. Rental and management segment operating profit increased 72.1% to $207.5 million, of which $66.2 million was attributable to SpectraSite, as compared to the same period in 2004. Adjusted EBITDA increased 71.8% to $196.1 million, of which $62.2 million was attributable to SpectraSite, as compared to the same period in 2004. Adjusted EBITDA margin was 64%. Please refer to the definitions of non-GAAP measures and reconciliations to GAAP GAAP See: Generally Accepted Accounting Principles GAAP See generally accepted accounting principles (GAAP). measures on pages 4 and 9 and to the supplemental schedules for selected American Tower and SpectraSite stand-alone (jargon) stand-alone - Capable of operating without other programs, libraries, computers, hardware, networks, etc. Exactly what is absent is presumed to be obvious from context. "We only run Windows on stand-alone PCs because it's too dangerous to run it on networked ones." operating results on page 8. Income from operations increased to $40.9 million, as compared to $21.4 million for the same period in 2004. Loss from continuing operations continuing operations Parts of a business that are expected to be maintained as an ongoing segment of an overall business operation. Income and losses from continuing operations are reported separately if any segments have been discontinued during the before cumulative effect of change in accounting principle decreased to $51.8 million, as compared to $68.2 million for the same period in 2004. Loss from continuing operations includes a $21.3 million pre-tax pre-tax adj → anterior al impuesto pre-tax adj → avant impôt(s) pre-tax adj → al lordo d'imposta loss on retirement of long-term Long-term Three or more years. In the context of accounting, more than 1 year. long-term 1. Of or relating to a gain or loss in the value of a security that has been held over a specific length of time. Compare short-term. obligations related to the refinancing Refinancing An extension and/or increase in amount of existing debt. of certain of the Company's outstanding indebtedness INDEBTEDNESS. The state, of being in debt, without regard to the ability or inability of the party to pay the same. See 1 Story, Eq. 343; 2 Hill. Ab. 421. 2. , as compared to $50.6 million for the same period in 2004. In addition, loss from continuing operations includes a $29.5 million provision for income taxes to reflect a reduction in management's estimate of the net realizable value Net realizable value (NRV) is a commonly used method of evaluating an asset's worth in the field of inventory accounting. NRV is part of GAAP rules that apply to valuing inventory, so as to not overstate or understate the value of inventory goods. of the Company's pending refund TO REFUND. To pay back by the party who has received it, to the party who has paid it, money which ought not to have been paid. 2. On a deficiency of assets, executors and administrators cum testamento annexo, are entitled to have refunded to them legacies claim. Net loss, including a $35.5 million cumulative effect of change in accounting principle, increased to $87.3 million, or $(0.21) per share, from $74.0 million, or $(0.32) per share, for the same period in 2004. Net cash provided by operating activities was $137.0 million and payments for purchases of property and equipment and construction activities were $29.4 million, of which $52.3 million and $10.8 million were attributable to SpectraSite, respectively. The Company completed the construction of 64 towers and the installation of 11 in-building systems during the quarter. Stock Repurchase Stock repurchase A firm's repurchase of outstanding shares of its common stock. Program and Financing Highlights The Company has repurchased a total of 5.9 million shares of its Class A common stock, for approximately ap·prox·i·mate adj. 1. Almost exact or correct: the approximate time of the accident. 2. $169 million as part of its previously announced $750 million stock repurchase program. During the quarter ended December 31, 2005, the Company repurchased approximately 2.8 million shares of its Class A common stock for approximately $77 million, and, as of February February: see month. 23, 2006, had repurchased an additional 3.1 million shares of its Class A common stock for approximately $92 million subsequent to the end of 2005. In December 2005, the Company called for redemption The liberation of an estate in real property from a mortgage. Redemption is the process by which land that has been mortgaged or pledged is bought back or reclaimed. It is accomplished through a payment of the debt owed or a fulfillment of the other conditions. all outstanding 12.25% senior subordinated Subordinated A claim ranked lower in priority than other claims. Common stock claims are always subordinated to debt. discount notes due 2008 of American Towers, Inc. On February 1, 2006, the Company completed its redemption of $228 million face amount of the 12.25% notes for approximately $179 million and as a result, no 12.25% notes remained outstanding. First Quarter and Full Year 2006 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 February 24, 2006. The Company's full-year 2006 outlook includes anticipated merger-related cost reductions in its rental and management segment and corporate G&A of at least $35 million. Please refer to the cautionary language regarding "forward-looking for·ward-look·ing adj. Concerned with or making provision for the future: forward-looking educators; a forward-looking corporate plan. Adj. 1. " statements included in this press release when considering this information. The Company undertakes no obligation to update this information.
($ in millions) First Quarter Full Year
2006 2006
-------------- ------------------
Rental and management segment
revenue $305 to $309 $1,245 to $1,270
Rental and management segment
operating profit $211 to $215 $858 to $888
Services segment revenue $3 to $4 $12 to $16
Services segment operating profit $1 to $1 $4 to $4
Total revenue $308 to $313 $1,257 to $1,286
Total segment operating profit $212 to $216 $862 to $892
Corporate G&A and development
expense $9 to $10 $34 to $36
Adjusted EBITDA $203 to $206 $828 to $856
Non-cash stock-based compensation
expense (1) $9 to $8 $38 to $35
Depreciation, amortization and
accretion (2) $135 to $133 $540 to $530
Interest expense (3) $57 to $55 $230 to $220
(Loss) income from continuing
operations (4) $(5) to $(3) $(25) to $10
Payments for purchase of property
and equipment and construction
activities (5) $25 to $30 $110 to $130
(1) Effective January 1, 2006 the Company has adopted the provisions
of SFAS 123R, "Share-Based Payments", which requires the Company
to expense the fair value of equity based compensation.
(2) Depreciation, amortization and accretion expense included in the
calculation of operating income is based on the preliminary
purchase price allocation of SpectraSite and is subject to change.
(3) Interest expense includes the amortization of deferred financing
fees and through February 1, 2006, the non-cash accretion and
warrant discount from the Company's 12.25% senior subordinated
discount notes.
(4) The first quarter 2006 loss from continuing operations includes a
$20 million pre-tax loss from retirement of long-term obligations
as a result of the final redemption of all remaining 12.25% senior
subordinated discount notes.
(5) The Company's full year 2006 outlook for capital expenditures
includes $55 million to $75 million for the construction of
approximately 275 new wireless towers, the installation of 40
in-building systems and $10 million of land purchases.
The reconciliation of (Loss) income from continuing operations to Adjusted EBITDA is as follows:
($ in millions) First Quarter Full Year
2006 2006
-------------- --------------
(Loss) income from continuing operations
(1) $(5) to $(3) $(25) to $10
Depreciation, amortization and accretion
(2) $135 to $133 $540 to $530
Other, including impairments, net loss
on sale of long-lived assets,
restructuring and merger related
expense, non-cash stock-based
compensation expense, interest income,
interest expense, loss on retirement of
long-term obligations, earnings (loss)
on equity method investments, other
(expense) income, income tax
(provision) benefit and minority
interest in net earnings of
subsidiaries $73 to $76 $313 to $316
----- -- ----- ----- -- -----
Adjusted EBITDA $203 to $206 $828 to $856
===== == ===== ===== == =====
(1) The Company has not reconciled Adjusted EBITDA to net loss because
it does not provide guidance for loss from discontinued
operations, net, which is the reconciling item between loss from
continuing operations and net loss.
(2) Depreciation, amortization and accretion expense included in the
calculation of operating income is based on the preliminary
purchase price allocation of SpectraSite and is subject to change.
Conference Call Information American Tower will host a conference call today at 8:30 a.m. EST EST electroshock therapy. EST abbr. electroshock therapy to discuss its fourth quarter and full year results for 2005 and the Company's outlook for the first quarter and full year 2006. 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 4541468. A replay of the call will be available from 11:00 a.m. EST February 24, 2006 until 11:59 p.m. EST P.M. also p.m. or p.m. abbr. post meridiem Usage Note: By definition, 12 a.m. March 3, 2006. The replay dial-in numbers are US/Canada: (800) 642-1687 and International: (706) 645-9291, access code 4541468. American Tower will also sponsor a live simulcast Simulcast is a portmanteau of "simultaneous broadcast", and refers to programs or events broadcast across more than one medium, or more than one service on the same medium, at the same time. of the call on its website, http://investor.americantower.com. When available, a replay of the call will be accessible on the Company's website. American Tower is the leading independent owner, operator and developer of broadcast and 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. sites in North America North America, third largest continent (1990 est. pop. 365,000,000), c.9,400,000 sq mi (24,346,000 sq km), the northern of the two continents of the Western Hemisphere. . American Tower owns and operates over 22,000 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. 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 Financial Measures In addition to the results prepared in accordance Accordance is Bible Study Software for Macintosh developed by OakTree Software, Inc.[] As well as a standalone program, it is the base software packaged by Zondervan in their Bible Study suites for Macintosh. 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 financial measures: Adjusted EBITDA and Adjusted EBITDA margin. American Tower defines Adjusted EBITDA as income from operations before depreciation, amortization and accretion The act of adding portions of soil to the soil already in possession of the owner by gradual deposition through the operation of natural causes. The growth of the value of a particular item given to a person as a specific bequest under the provisions of a will between the and impairments, net loss on sale of long-lived long-lived adj. 1. Having a long life: a long-lived aunt. 2. Lasting a long time; persistent: a long-lived rumor. 3. assets, restructuring restructuring - The transformation from one representation form to another at the same relative abstraction level, while preserving the subject system's external behaviour (functionality and semantics). and merger related expense, non-cash stock-based compensation expense, 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 Adjusted EBITDA margin as a percentage of Adjusted EBITDA over total revenue. 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. Additionally, interest expense may vary significantly depending on capital structure. Notwithstanding the foregoing, the Company's measures of Adjusted EBITDA and Adjusted EBITDA margin may not be comparable to similarly titled measures used by other companies. Reconciliations of these measures to GAAP are included above and on page 9 of this press release. The Company's results under GAAP are set forth in the financial statements attached as pages 5 to 7 of this press release. 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. Examples of these statements include, but are not limited to, our first quarter and full year 2006 Outlook, stock repurchase program and planned future capital expenditures. 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) substantial leverage and debt service obligations may adversely affect us; (3) 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; (4) if our wireless service provider customers consolidate Consolidate To combine the assets, liabilities, and other financial items of two or more entities into one. Notes: This term is generally used in the context of consolidated financial statements. or merge See mail merge and concatenate. with each other to a significant degree, our growth, revenue and ability to generate positive cash flows could be adversely affected; (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 de·rive v. de·rived, de·riv·ing, de·rives v.tr. 1. To obtain or receive from a source. 2. from a small number of customers; (8) status of Iusacell Iusacell Grupo Iusacell is Mexico's #3 mobile operator. The company provides cellular services reaching about 90% of Mexico's population, including Mexico City and received more licenses to cover the remaining regions in early 2005. It has more than 4. Celular's financial restructuring exposes us to risks and uncertainties; (9) we may not realize the intended benefits of the merger if we are unable to integrate SpectraSite's operations, wireless communication tower portfolio, customers and personnel in a timely and efficient manner; (10) we expect to incur To become subject to and liable for; to have liabilities imposed by act or operation of law. Expenses are incurred, for example, when the legal obligation to pay them arises. An individual incurs a liability when a money judgment is rendered against him or her by a court. substantial expenses related to the integration of SpectraSite; (11) new technologies could make our tower antenna leasing services less desirable to potential tenants and result in decreasing revenues; (12) we could have liability under environmental laws; (13) our business is subject to government regulations and changes in current or future laws or regulations could restrict In the C programming language, the data pointed to by a pointer declared with the restrict qualifier may not be pointed to by any other pointer. This allows for more effective optimization. our ability to operate our business as we currently do; (14) increasing competition in the tower industry may create pricing pressures that may adversely affect us; (15) if we are unable to protect our rights to the land under our towers, it could adversely affect our business and operating results; (16) 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; (17) our towers may be affected by natural disasters and other unforeseen damage for which our insurance may not provide adequate coverage; (18) our costs could increase and our revenues could decrease due to perceived per·ceive tr.v. per·ceived, per·ceiv·ing, per·ceives 1. To become aware of directly through any of the senses, especially sight or hearing. 2. To achieve understanding of; apprehend. health risks from radio emissions emissions npl → émissions fpl emissions npl → Emissionen pl , especially if these risks are substantiated; and (19) the bankruptcy bankruptcy, in law, settlement of the liabilities of a person or organization wholly or partially unable to meet financial obligations. The purposes are to distribute, through a court-appointed receiver, the bankrupt's assets equitably among creditors and, in most 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 under the caption entitled en·ti·tle tr.v. en·ti·tled, en·ti·tling, en·ti·tles 1. To give a name or title to. 2. To furnish with a right or claim to something: "Factors That May Affect Future Results" in our Form 10-Q Form 10-Q See 10-Q. for the quarter ended September September: see month. 30, 2005. We undertake no obligation to update the information contained in this press release to reflect subsequently occurring events or circumstances CIRCUMSTANCES, evidence. The particulars which accompany a fact. 2. The facts proved are either possible or impossible, ordinary and probable, or extraordinary and improbable, recent or ancient; they may have happened near us, or afar off; they are public or .
UNAUDITED CONDENSED
CONSOLIDATED BALANCE SHEETS
(In thousands) December 31, December 31,
2005 (a) 2004
----------- -----------
ASSETS
Current Assets:
Cash and cash equivalents $ 112,701 $ 215,557
Accounts receivable, net 36,995 38,634
Deferred income taxes 31,359 6,090
Other current assets 44,823 48,756
----------- -----------
Total current assets 225,878 309,037
----------- -----------
Property and equipment, net 3,460,526 2,273,356
Goodwill 2,142,551 592,683
Other intangible assets, net 2,077,312 985,303
Deferred income taxes 504,659 633,814
Notes receivable and other long-term assets 357,294 291,779
----------- -----------
Total $ 8,768,220 $ 5,085,972
=========== ===========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities:
Accounts payable and accrued expenses $ 175,558 $ 121,672
Accrued interest 37,850 39,466
Current portion of long-term obligations 162,153 138,386
Other current liabilities 77,655 32,681
----------- -----------
Total current liabilities 453,216 332,205
----------- -----------
Long-term obligations 3,451,276 3,155,228
Other long-term liabilities 327,354 121,505
----------- -----------
Total liabilities 4,231,846 3,608,938
----------- -----------
Minority interest in subsidiaries 9,794 6,081
----------- -----------
STOCKHOLDERS' EQUITY
Class A Common Stock 4,156 2,297
Additional paid-in capital 7,317,668 4,012,425
Accumulated deficit (2,710,993) (2,539,403)
Unearned compensation (2,497)
Accumulated other comprehensive loss (803)
Treasury stock (80,951) (4,366)
----------- -----------
Total stockholders' equity 4,526,580 1,470,953
----------- -----------
Total $ 8,768,220 $ 5,085,972
=========== ===========
NOTE:
(a) The allocation of the SpectraSite purchase price is based on a
preliminary third-party valuation and management's estimates and
assumptions which are subject to adjustment as additional
information is obtained and the third-party valuation is
finalized.
UNAUDITED CONDENSED
CONSOLIDATED STATEMENTS
OF OPERATIONS
(In thousands,
except per share Three Months Ended Year Ended
data) December 31, December 31,
----------------------- ------------------------
2005 (a) 2004 2005 (a) 2004
-------- --------- --------- ---------
REVENUES:
Rental and
management $302,792 $ 177,313 $ 929,762 $ 684,422
Network development
services 4,833 7,383 15,024 22,238
-------- --------- --------- ---------
Total
operating
revenues 307,625 184,696 944,786 706,660
-------- --------- --------- ---------
OPERATING EXPENSES:
Rental and
management 98,863 60,278 306,148 237,312
Network development
services 3,547 6,761 11,981 18,801
Depreciation,
amortization and
accretion 127,747 81,071 411,254 329,449
Corporate general,
administrative and
development
expense 12,674 7,077 37,977 27,468
Impairments, net
loss on sale of
long-lived assets,
restructuring and
merger related
expense 23,895 8,072 34,232 23,876
-------- --------- --------- ---------
Total
operating
expenses 266,726 163,259 801,592 636,906
-------- --------- --------- ---------
OPERATING INCOME FROM
CONTINUING
OPERATIONS 40,899 21,437 143,194 69,754
-------- --------- --------- ---------
OTHER INCOME
(EXPENSE):
Interest income, TV
Azteca, net 3,541 3,540 14,232 14,316
Interest income 1,544 1,442 4,402 4,844
Interest expense (57,009) (59,428) (222,419) (262,237)
Loss on retirement
of long-term
obligations (21,260) (50,624) (67,110) (138,016)
Other (expense)
income (395) (763) 227 (2,798)
-------- --------- --------- ---------
Total other
expense (73,579) (105,833) (270,668) (383,891)
-------- --------- --------- ---------
LOSS FROM CONTINUING
OPERATIONS BEFORE
INCOME TAXES,
MINORITY INTEREST
AND LOSS ON EQUITY
METHOD INVESTMENTS (32,680) (84,396) (127,474) (314,137)
-------- --------- --------- ---------
Income tax
(provision)
benefit (18,833)(b) 17,492 (4,003)(b) 80,176
Minority interest
in net earnings of
subsidiaries (336) (182) (575) (2,366)
Earnings (loss) on
equity method
investments 42 (1,064) (2,078) (2,915)
-------- --------- --------- ---------
LOSS FROM CONTINUING
OPERATIONS BEFORE
CUMULATIVE EFFECT OF
CHANGE IN ACCOUNTING
PRINCIPLE (51,807) (68,150) (134,130) (239,242)
-------- --------- --------- ---------
LOSS FROM
DISCONTINUED
OPERATIONS, NET (9) (5,880) (1,935) (8,345)
-------- -------- --------- ---------
LOSS BEFORE
CUMULATIVE EFFECT OF
CHANGE IN ACCOUNTING
PRINCIPLE, NET (51,816) (74,030) (136,065) (247,587)
-------- --------- --------- ---------
CUMULATIVE EFFECT OF
CHANGE IN ACCOUNTING
PRINCIPLE, NET OF
INCOME TAX BENEFIT
OF $11,697 (35,525)(c) (35,525)(c)
-------- --------- --------- ---------
NET LOSS $(87,341) $ (74,030) $(171,590) $(247,587)
======== ========= ========= =========
BASIC AND DILUTED
LOSS PER COMMON
SHARE AMOUNTS:
Loss from
continuing
operations $ (0.13) $ (0.30) $ (0.44) $ (1.07)
Loss from
discontinued
operations (0.02) (0.01) (0.03)
Cumulative effect
of change in
accounting
principle (0.09) (0.12)
-------- --------- --------- ---------
NET LOSS PER COMMON
SHARE $ (0.21) $ (0.32) $ (0.57) $ (1.10)
======== ========= ========= =========
WEIGHTED AVERAGE
COMMON SHARES
OUTSTANDING 412,595 228,469 302,510 224,336
======== ========= ========= =========
NOTES:
(a) Includes the results of operations of SpectraSite as of August 3,
2005. In addition, the allocation of the SpectraSite purchase
price is based on a preliminary third-party valuation and
management's estimates and assumptions, which are subject to
adjustment as additional information is obtained and the
third-party valuation is finalized.
(b) The income tax (provision) benefit in the fourth quarter of 2005
has been reduced by $29.5 million to reflect a reduction in
management's estimate of the net realizable value of the Company's
income tax refund claim based upon the current status of the
claim.
(c) As of December 31, 2005, the Company adopted the provisions of
FASB Interpretation No. 47 "Accounting for Conditional Asset
Retirement Obligations". The impact of the adoption resulted in a
non-cash charge of $35.5 million (net of a $11.7 million tax
benefit) recorded as a cumulative effect of a change in accounting
principle related to changes in settlement date assumptions and
the related depreciation and accretion of its asset retirement
obligations.
UNAUDITED CONDENSED
CONSOLIDATED STATEMENTS OF CASH FLOWS Year Ended
(In thousands) December 31,
--------------------------
2005 2004
----------- -----------
CASH FLOWS PROVIDED BY OPERATING
ACTIVITIES:
Net loss $ (171,590) $ (247,587)
Cumulative effect of change in
accounting principle, net 35,525
Non-cash items reflected in statements
of operations, primarily depreciation
and amortization 565,912 498,835
Increase in assets (20,384) (17,330)
Decrease in liabilities (12,259) (17,218)
----------- -----------
Cash provided by operating activities 397,204 216,700
----------- -----------
CASH FLOWS (USED FOR) PROVIDED BY INVESTING
ACTIVITIES:
Payments for purchase of property and
equipment and construction activities (88,637) (42,181)
Payments for acquisitions (7,479) (33,403)
Payments for acquisition of Mexico
minority interest (7,270) (3,947)
Cash acquired from SpectraSite merger,
net of transaction costs 16,696
Proceeds from sale of businesses and
other long-term assets 6,881 31,987
Restricted cash and investments 170,036
Deposits, investments and other long-
term assets (725) 2,328
----------- -----------
Cash (used for) provided by investing
activities (80,534) 124,820
----------- -----------
CASH FLOWS USED FOR FINANCING ACTIVITIES:
Repayment of notes payable, credit
facilities and capital leases (1,949,444) (2,003,401)
Borrowings under credit facilities 1,543,000 700,000
Proceeds from issuance of debt
securities and notes payable 1,072,500
Net proceeds from equity offering,
stock options and stock purchase plans 65,357 40,556
Purchase of treasury stock (68,927)
Deferred financing costs and other
financing activities (9,512) (41,083)
----------- -----------
Cash used for financing activities (419,526) (231,428)
----------- -----------
NET (DECREASE) INCREASE IN CASH AND CASH
EQUIVALENTS (102,856) 110,092
CASH AND CASH EQUIVALENTS, BEGINNING OF
YEAR 215,557 105,465
----------- -----------
CASH AND CASH EQUIVALENTS, END OF YEAR $ 112,701 $ 215,557
=========== ===========
CASH PAID FOR INCOME TAXES $ 18,519 $ 4,257
=========== ===========
CASH PAID FOR INTEREST $ 183,307 $ 209,874
=========== ===========
UNAUDITED SUPPLEMENTAL INFORMATION
Selected Operating Results
($ in thousands) Three Months Ended,
December 31, 2005
--------------------------------
Selected Income Statement American
Results: Tower SpectraSite Consolidated
Total revenue $203,828 $ 103,797 $ 307,625
Total operating expense (64,798) (37,612) (102,410)
Corporate general,
administrative and
development expense (8,707) (3,967) (12,674)
Interest income, TV
Azteca, net 3,541 - 3,541
-------- ---------- -----------
Adjusted EBITDA $133,864 $ 62,218 $ 196,082
======== ========== ===========
Selected Statement of Cash
Flows Results:
-------- ---------- -----------
Cash provided by operating
activities $ 84,691 $ 52,309 $ 137,000
======== ========== ===========
Payments for purchase of property
and equipment and construction
activities
Discretionary $ 8,940 $ 3,664 $ 12,604
Improvements/
Augumentation 9,066 7,134 16,200
Corporate 605 605
-------- ---------- -----------
Total $ 18,611 $ 10,798 $ 29,409
======== ========== ===========
Selected Balance Sheet Detail
($ in millions) December 31, 2005
--------------------------------
Long-term obligations
summary, including current American
portion Tower SpectraSite Consolidated
Credit Facilities $ 793 $ 700 $ 1,493
12.250% Senior
Subordinated Discount
Notes, due 2008(a) 160 160
7.250% Senior Subordinated
Notes, due 2011 400 400
7.500% Senior Notes, due
2012 225 225
7.125% Senior Notes, due
2012 502 502
5.000% Convertible Notes,
due 2010 276 276
3.250% Convertible Notes,
due 2010 153 153
3.000% Convertible Notes,
due 2012 344 344
Other debt 60 60
-------- ---------- -----------
Total debt $ 2,913 $ 700 $ 3,613
Cash and cash equivalents 103 10 113
-------- ---------- -----------
Net debt (Total debt
less Cash and cash
equivalents) $ 2,810 $ 690 $ 3,500
======== ========== ===========
(a) On February 1, 2006 the Company completed its call for redemption
of all remaining outstanding 12.25% Senior Subordinated Discount
Notes with cash on hand and borrowings under the American Tower
Credit Facility.
Share Count Rollforward (in
millions)
Total shares outstanding,
as of September 30, 2005 411
Shares issued - employee
stock option exercises 4
Shares issued - warrant
exercises, convertible
note inducements and
other 1
Shares repurchased (3)
--------
Total shares
outstanding, as of
December 31, 2005 413
========
Selected Interest Expense
Detail Three Months Ended,
($ in millions) December 31, 2005
--------------------------------
Long-term obligations
summary, including current American
portion Tower SpectraSite Consolidated
Credit Facilities $ 10 $ 9 $ 19
12.250% Senior
Subordinated Discount
Notes, due 2008 7 7
7.250% Senior Subordinated
Notes, due 2011 7 7
7.500% Senior Notes, due
2012 4 4
7.125% Senior Notes, due
2012 9 9
5.000% Convertible Notes,
due 2010 3 3
3.250% Convertible Notes,
due 2010 1 1
3.000% Convertible Notes,
due 2012 3 3
Other interest expense,
including amortization of
deferred financing fees 4 4
-------- ---------- -----------
Total Interest Expense $ 48 $ 9 $ 57
======== ========== ===========
Selected Portfolio Detail - Owned Wireless, Broadcast and
In-building Systems
Three Months Ended December 31, 2005
Tower Count Wireless Broadcast In-building Total
--------- ----------- ------------ -------
Beginning Balance, 10/1/05 21,595 407 97 22,099
New Construction 64 - 11 75
Acquisitions 3 - - 3
Reductions (3) - - (3)
-------- ---------- ----------- -------
Ending Balance, 12/31/05 21,659 407 108 22,174
======== ========== =========== =======
UNAUDITED RECONCILIATIONS TO GAAP MEASURES
Fourth Quarter 2005
and 2004: Adjusted
EBITDA and Adjusted
EBITDA margin
The reconciliation of
net (loss) income to
adjusted EBITDA is as Three Months Ended Three Months Ended
follows: December 31, December 31,
($ in thousands) 2005 2004
--------------------- -------------------------
American
Tower SpectraSite Consolidated Consolidated
Net (loss) income $(92,249) $ 4,908 $ (87,341) $ (74,030)
Cumulative effect of
change in accounting
principle, net of
income tax benefit 34,007 1,518 35,525
Loss from discontinued
operations, net 9 - 9 5,880
-------- ---------- ----------- -----------
(Loss) income from
continuing operations (58,233) 6,426 (51,807) (68,150)
-------- ---------- ----------- -----------
Interest expense 47,732 9,277 57,009 59,428
Interest income (1,243) (301) (1,544) (1,442)
Income tax provision
(benefit) 16,028 2,805 18,833 (17,492)
Depreciation,
amortization and
accretion 81,976 45,771 127,747 81,071
Impairments, net loss
on sale of long-lived
assets, restructuring
and merger related
expense 20,493 3,402 23,895 8,072
Loss (gain) on
retirement of long-
term obligations 24,364 (3,104) 21,260 50,624
Minority interest in
net earnings of
subsidiaries 336 - 336 182
(Earnings) loss on
equity method
investments (42) - (42) 1,064
Other expense (income) 2,453 (2,058) 395 763
-------- ---------- ----------- -----------
Adjusted EBITDA $133,864 $ 62,218 $ 196,082 $ 114,120
======== ========== =========== ===========
Divided by total
operating revenues $203,828 $ 103,797 $ 307,625 $ 184,696
-------- ---------- ----------- -----------
Adjusted EBITDA margin 66% 60% 64% 62%
======== ========== =========== ===========
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