American Tower Corporation Reports Second Quarter 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. ) SECOND QUARTER 2005 HIGHLIGHTS --Rental and Management segment revenues increased 10% to $184.6 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 14% to $128.8 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 14% to $122.5 million American Tower Corporation (NYSE: AMT) today reported financial results for the quarter ended June June: see month. 30, 2005. Total revenues increased 9% to $188.1 million and rental and management segment revenue increased 10% to $184.6 million for the quarter ended June 30, 2005, as compared to the same period in 2004. Rental and management segment operating profit increased 14% to $128.8 million for the quarter ended June 30, 2005, as compared to the same period in 2004. Adjusted EBITDA (defined 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 and 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). 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) increased 14% to $122.5 million for the quarter ended June 30, 2005, as compared to the same period in 2004. Adjusted EBITDA margin was 65% for the quarter ended June 30, 2005. Income from operations increased to $32.6 million for the quarter ended June 30, 2005, as compared to $13.1 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 was $30.7 million for the quarter ended June 30, 2005, as compared to $64.0 million for the same period in 2004. Loss from continuing operations for the quarter ended June 30, 2005 includes a $16.4 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. described below, as compared to $31.4 million for the same period in 2004. Net loss decreased to $31.8 million, or $(0.14) per share, for the quarter ended June 30, 2005, from $65.2 million, or $(0.29) per share, for the same period in 2004. Net cash provided by operating activities was $72.5 million and payments for purchases of property and equipment and construction activities were $20.6 million for the quarter ended June 30, 2005. The Company completed the construction of 56 towers during the quarter. "During the second quarter, the wireless industry continued to demonstrate strong growth in subscribers and minutes of use, as well as the continued development of broadband broadband Term describing the radiation from a source that produces a broad, continuous spectrum of frequencies (contrasted with a laser, which produces a single frequency or very narrow range of frequencies). data applications," stated 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 Chairman and Chief Executive Officer. "As a result, our wireless carrier customers continued their efforts to further expand network capacity, coverage and quality. Our strong relationships with these carriers, combined with our industry-leading scale, contributed to the growth in our core tower leasing revenue and Adjusted EBITDA in the quarter. "In addition, we have been diligently dil·i·gent adj. Marked by persevering, painstaking effort. See Synonyms at busy. [Middle English, from Old French, from Latin d planning for our integration with SpectraSite. As the largest tower operator, with over 22,000 tower sites available for collocation collocation - co-location , the combined company will continue our commitment to meeting our customers network needs as the best tower owner and operator by providing safe, compliant
"Since the beginning of 2005 we have made significant progress in strengthening our balance sheet and increasing our financial flexibility. We ended the second quarter near our target leverage range of four to six times net debt to annualized annualized Of or relating to a variable that has been mathematically converted to a yearly rate. Inflation and interest rates are generally annualized since it is on this basis that these two variables are ordinarily stated and compared. EBITDA. As we look to the future, we are excited about the opportunities to capitalize on Cap´i`tal`ize on` v. t. 1. To turn (an opportunity) to one's advantage; to take advantage of (a situation); to profit from; as, to capitalize on an opponent's mistakes s>. the current momentum of the wireless industry through our expanded tower portfolio and to utilize our improved financial position to continue providing solid returns to our shareholders." Financing Highlights The Company continued to utilize its available cash on hand to repurchase re·pur·chase tr.v. re·pur·chased, re·pur·chas·ing, re·pur·chas·es To buy (something) again. n. The act of buying something that one previously sold or owned. Noun 1. in privately negotiated transactions, a portion of its 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 during and subsequent to the second quarter of 2005. The Company repurchased a total of $122 million face amount ($78 million of accreted value accreted value The current value of an original-issue discount bond, taking into account imputed interest that has accumulated. , net of $5 million fair value allocated to warrants) of its 12.25% senior subordinated discount notes for an aggregate purchase price of $94 million in cash, $117 million face amount of which were repurchased in the second quarter of 2005 and $5 million face amount of which were repurchased subsequent to the end of the second quarter of 2005. As of July July: see month. 28, 2005 the Company had outstanding $339 million face amount ($225 million accreted value, net of $12 million fair value allocated to warrants) of its 12.25% senior subordinated discount notes. As previously announced, the Company redeemed re·deem tr.v. re·deemed, re·deem·ing, re·deems 1. To recover ownership of by paying a specified sum. 2. To pay off (a promissory note, for example). 3. $75 million principal amount of its 9.375% senior notes due 2009 in July 2005. The total aggregate redemption price Redemption price See: Call price redemption price 1. The price at which an open-end investment company will buy back its shares from the owners. In most cases, the redemption price is the net asset value per share. 2. was approximately $82 million, including approximately $3 million in 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. , which the Company financed through a combination of internally generated funds and borrowings under the revolving loan of its credit facility. As of July 28, 2005 the Company had outstanding $67 million principal amount of its 9.375% senior notes. The Company reduced its Net Leverage Ratio (defined as total debt less cash and cash equivalents on hand divided by second quarter annualized Adjusted EBITDA) to 6.1x as of June 30, 2005. Board of Director Nominees Pursuant to its May 3, 2005 merger agreement with SpectraSite, the Company has agreed to expand the size of its board of directors from six to ten members and appoint To designate, select, or assign authority to a position or an office. Although sometimes used interchangeably, elect and appoint do not have the same meaning. Election refers to the selection of a public officer by the qualified voters of the community, and appointment four new board members from the SpectraSite board of directors, effective at the closing of the merger. The nominating and corporate governance Corporate Governance The relationship between all the stakeholders in a company. This includes the shareholders, directors, and management of a company, as defined by the corporate charter, bylaws, formal policy, and rule of law. committees of each company unanimously recommended that each of Stephen Stephen, 1097?–1154, king of England (1135–54). The son of Stephen, count of Blois and Chartres, and Adela, daughter of William I of England, he was brought up by his uncle, Henry I of England, who presented him with estates in England and France and Clark, Paul Paul, 1901–64, king of the Hellenes (1947–64), brother and successor of George II. He married (1938) Princess Frederika of Brunswick. During Paul's reign Greece followed a pro-Western policy, and the Cyprus question was temporarily resolved. Albert Albert, German churchman Albert, 1490–1545, German churchman, cardinal of the Roman Catholic Church. A member of the house of Brandenburg, he became (1514) Archbishop of Mainz. , Jr., Dean Douglas Douglas, city, Isle of Man Douglas, city (1991 pop. 19,950), capital of the Isle of Man, Great Britain. It is a popular resort, connected by rail to Ramsey and Port Erin, on the Irish Sea. Tourism is the chief industry. and Samme Thompson Thompson, city, Canada Thompson, city (1991 pop. 14,977), central Man., Canada, on the Burntwood River. A mining town, it developed after large nickel deposits were discovered in the area in 1956. be appointed ap·point tr.v. ap·point·ed, ap·point·ing, ap·points 1. To select or designate to fill an office or a position: appointed her the chief operating officer of the company. 2. to the Company's board at the closing. In the joint proxy See proxy server. (networking) proxy - A process that accepts requests for some service and passes them on to the real server. A proxy may run on dedicated hardware or may be purely software. statement/prospectus mailed to stockholders in connection with the merger, the companies had previously identified Timothy Biltz as an anticipated director nominee nominee n. 1) a person or entity who is requested or named to act for another, such as an agent or trustee. 2) a potential successor to another's rights under a contract. . Mr. Biltz has indicated to the companies that, due to personal reasons, he has declined to be nominated nom·i·nate tr.v. nom·i·nat·ed, nom·i·nat·ing, nom·i·nates 1. To propose by name as a candidate, especially for election. 2. To designate or appoint to an office, responsibility, or honor. as a director. The Company and SpectraSite will each hold a special meeting of stockholders on August 3, 2005 to vote on the proposed merger and other related proposals. Once stockholder approval for the merger is obtained and the companies complete the merger, the new directors will be formally appointed to the Company's board of directors, each to serve until the next annual meeting of stockholders. 2005 Quarterly and Full Year 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 July 28, 2005 for American Tower's standalone stand·a·lone adj. Self-contained and usually independently operating: a standalone computer terminal. performance. 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.
($ millions) Third Quarter Full Year
2005 2005
---------------- ---------------
Rental and management segment
revenue $187 to $190 $743 to $750
Rental and management segment
operating profit $129 to $131 $515 to $520
Services segment revenue $3 to $4 $12 to $14
Services segment operating profit $1 to $1 $3 to $3
Total revenue $190 to $194 $755 to $764
Total segment operating profit $130 to $132 $518 to $523
Corporate G&A $7 to $7 $27 to $27
Adjusted EBITDA $123 to $125 $491 to $496
Cash interest expense $42 to $40 $166 to $162
Non-cash interest expense (1) $11 to $11 $47 to $47
Loss from continuing operations (2) $(17) to $(15)$(90) to $(83)
Basic and diluted net loss per common
share from continuing operations $(0.07) to $(0.06)$(0.39)to$(0.36)
Payments for purchase of property and
equipment and construction
activities (3) $20 to $22 $75 to $80
(1) Non-cash interest expense includes the accretion from the
Company's 12.25% senior subordinated discount notes, warrant
discount and the amortization of deferred financing fees.
(2) The loss from continuing operations includes a $5 million pre-tax
loss from retirement of long-term obligations as a result of our
debt redemptions and repurchases through July 28, 2005.
(3) The Company's full year 2005 outlook for capital expenditures is
$75 million to $80 million, including the construction of
approximately 225-250 new wireless towers.
Conference Call Information American Tower previously announced that it would host a conference call today at 8:30 a.m. EST EST electroshock therapy. EST abbr. electroshock therapy to discuss its second quarter results for 2005 and the Company's outlook for the third quarter and full year 2005. The dial-in numbers are US/Canada: (877) 235-9047, International: (706) 645-9644 access code 7804122. A replay of the call will be available from 8:30 a.m. EST July 29, 2005 until 11:59 p.m. EST P.M. also p.m. or p.m. abbr. post meridiem Usage Note: By definition, 12 a.m. August 5, 2005. The replay dial-in numbers are US/Canada: (800) 642-1687 and International: (706) 645-9291, access code 7804122. 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 can also be accessed on the 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 operates over 14,800 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 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. , including approximately 300 broadcast tower sites. For more information about American Tower Corporation, please visit our website 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 GAAP See: Generally Accepted Accounting Principles GAAP See generally accepted accounting principles (GAAP). ) provided throughout this press release, we have presented the following non-GAAP financial measures: Adjusted EBITDA, Adjusted EBITDA margin and Net Leverage Ratio. 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, our measures of Adjusted EBITDA, Adjusted EBITDA margin and Net Leverage Ratio may not be comparable to similarly titled measures used by other companies. Reconciliations of these measures to GAAP are included on page 10 of this press release. Our results under GAAP are set forth in the financial statements attached as pages 6 to 8 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 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, our third quarter and full year 2005 Outlook 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) our business and stock price could be adversely impacted by uncertainty related to our proposed merger with SpectraSite; (2) a decrease in demand for tower space would materially and adversely affect our operating results; (3) our substantial leverage and debt service obligations may adversely affect our operating results; (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 loan agreement and indentures could adversely affect our business by further limiting our flexibility; (5) 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, our revenue and our ability to generate positive cash flows could be adversely affected; (6) due to the long-term expectations of revenue from tenant leases, we are dependent on 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 our tenants; (7) our foreign operations are subject to economic, political and other risks; (8) a substantial portion of our revenues is derived from a small number of customers; (9) the 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; (10) new technologies could make our tower antenna leasing services less desirable to potential tenants and result in decreasing revenues; (11) we could have liability under environmental laws; (12) 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; (13) increasing competition in the tower industry may create pricing pressures; (14) if we are unable to protect our rights to the land under our towers, it could adversely affect our business; (15) 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 ; and (16) 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 March 31, 2005, which we incorporate herein by reference. 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 . Statements in this press release regarding the transaction between American Tower and SpectraSite, the expected timetable “Schedule” redirects here. For other uses, see Schedule (disambiguation). A timetable or schedule is an organized list or schedule, usually set out in tabular form, providing information about a series of arranged events: in particular, the time at which for completing the transaction, the future financial and operating results, benefits and synergies of the transaction, future opportunities for the combined company and any other statements about American Tower and SpectraSite management's future expectations, beliefs, goals, plans or prospects constitute forward looking statements within the meaning of the Private Securities Litigation Reform Act The Private Securities Litigation Reform Act of 1995 (PSLRA) implemented several significant substantive changes affecting certain cases brought under the federal securities laws, including changes related to pleading, discovery, liability, class representation and awards fees and of 1995. Such statements are based upon the current beliefs and expectations of American Tower's and SpectraSite's management and are subject to significant risks and uncertainties. Actual results may differ from those set forth in the forward-looking statements. Any statements that are not statements of historical fact (including statements containing the words "believes," "plans," "anticipates," "expects," estimates and similar expressions) should also be considered to be forward looking statements. There are a number of important factors that could cause actual results or events to differ materially from those indicated by such forward looking statements, including: the ability of American Tower to successfully integrate SpectraSite's operations and employees; the risk that the cost savings and any other synergies from the transaction may not be fully realized or may take longer to realize than expected; disruption disruption /dis·rup·tion/ (dis-rup´shun) a morphologic defect resulting from the extrinsic breakdown of, or interference with, a developmental process. from the transaction making it more difficult to maintain relationships with customers and employees; competition and its effect on pricing, spending, third-party relationships and revenues. Additional factors that may affect future results are contained in American Tower's and SpectraSite's filings with the Securities and Exchange Commission ("SEC"), including the registration statement on Form S-4 initially filed with the SEC on May 27, 2005, which are available at the SEC's website http://www.sec.gov See .gov and GovNet. (networking) gov - The top-level domain for US government bodies. . The information set forth herein speaks only as of the date hereof here·of adv. Of this. hereof Adverb Formal or law of or concerning this Adv. 1. hereof - of or concerning this; "the twigs hereof are physic" , and American Tower and SpectraSite disclaim dis·claim v. dis·claimed, dis·claim·ing, dis·claims v.tr. 1. To deny or renounce any claim to or connection with; disown. 2. To deny the validity of; repudiate. 3. any intention or obligation to update any forward looking statements as a result of developments occurring after the date of this press release. Important Additional Information In connection with the proposed transaction, on May 27, 2005, American Tower filed with the SEC a Registration Statement on Form S-4, containing a Joint Proxy Statement/Prospectus, which was declared effective on June 16, 2005. INVESTORS AND SECURITY HOLDERS OF AMERICAN TOWER AND SPECTRASITE ARE URGED TO READ THE REGISTRATION STATEMENT AND ANY OTHER RELEVANT DOCUMENTS FILED WITH THE SEC, INCLUDING THE JOINT PROXY STATEMENT/PROSPECTUS THAT IS PART OF THE REGISTRATION STATEMENT, BECAUSE THEY CONTAIN IMPORTANT INFORMATION ABOUT AMERICAN TOWER, SPECTRASITE, THE PROPOSED TRANSACTION AND RELATED MATTERS. The final Joint Proxy Statement/Prospectus was mailed to stockholders of American Tower and SpectraSite on or about June 23, 2005. Investors and security holders of American Tower and SpectraSite may obtain copies of the Registration Statement and the Joint Proxy Statement/Prospectus, as well as other filings with the SEC that will be incorporated by reference into such documents, containing information about American Tower and SpectraSite, without charge, at the SEC's website http://www.sec.gov. These documents may also be obtained for free from American Tower by directing a request to American Tower Corporation, Investor Relations Investor relations The process by which the corporation communicates with its investors. , 116 Huntington Huntington. 1 City (1990 pop. 16,389), seat of Huntington co., NE Ind.; inc. 1848. It is a farm trade center and an industrial city. Manufactures include automotive parts, machinery, construction materials, food and beverages, cleaning agents, Ave AVE Avenue AVE Average AVE Alta Velocidad Espanola (train between Madrid and Seville) AVE Alta Velocidad Española (Spanish: High Speed Train) AVE Audio Video Entertainment AVE Advertising Value Equivalent , Boston, MA 02116 or for free from SpectraSite by directing a request to SpectraSite at SpectraSite, Inc., 400 Regency Regency, in British history, the period of the last nine years (1811–20) of the reign of George III, when the king's insanity had rendered him unfit to rule and the government was vested in the prince of Wales (later George IV) as regent. Forest Drive, Cary Car·y A town of east-central North Carolina, an industrial suburb of Raleigh. Population: 98,000. , NC 27511, Attention: Secretary. Participants in Solicitation solicitation In criminal law, the act of asking, inducing, or directing someone to commit a crime. The person soliciting another becomes an accomplice to the crime. The term also refers to the act of obtaining bribes, as well as to the crime of a prostitute who offers sexual American Tower, SpectraSite and their respective directors and executive officers and other members of management and employees may be deemed to be participants in the solicitation of proxies from American Tower and SpectraSite shareholders in respect of the proposed transaction. Information regarding American Tower's participants is available in American Tower's Annual Report on 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 December: see month. 31, 2004, and the proxy statement Proxy Statement A document containing the information that a company is required by the SEC to provide to shareholders so they can make informed decisions about matters that will be brought up at an annual stockholder meeting. , dated April 27, 2005, for its 2005 annual meeting of stockholders, which are filed with the SEC. Information regarding SpectraSite's participants is available in SpectraSite's Annual Report on Form 10-K for the year ended December 31, 2004 and the proxy statement, dated March 31, 2005, for its 2005 annual meeting of shareholders, which are filed with the SEC. Additional information regarding the interests of such participants is included in the Registration Statement containing the Joint Proxy Statement/Prospectus filed with the SEC.
UNAUDITED CONDENSED
CONSOLIDATED BALANCE SHEETS
(In thousands) June 30, December 31,
2005 2004
---------- ------------
ASSETS
Current Assets:
Cash and cash equivalents $ 85,622 $ 215,557
Accounts receivable, net 23,118 38,634
Other current assets 44,367 51,457
Assets held for sale 3,389 3,389
---------- ------------
Total current assets 156,496 309,037
---------- ------------
Property and equipment, net 2,192,453 2,273,356
Goodwill and other intangible assets, net 1,530,811 1,577,986
Deferred income taxes 649,256 633,814
Notes receivable and other long-term assets 296,647 291,779
---------- ------------
Total $4,825,663 $ 5,085,972
========== ============
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities:
Accounts payable and accrued expenses $ 119,623 $ 121,672
Accrued interest 32,339 39,466
Current portion of long-term obligations 87,955 138,386
Other current liabilities 32,281 32,681
---------- ------------
Total current liabilities 272,198 332,205
---------- ------------
Long-term obligations 2,991,925 3,155,228
Other long-term liabilities 129,446 121,505
---------- ------------
Total liabilities 3,393,569 3,608,938
---------- ------------
Minority interest in subsidiaries 5,905 6,081
---------- ------------
STOCKHOLDERS' EQUITY
Class A Common Stock 2,312 2,297
Additional paid-in capital 4,031,025 4,012,425
Accumulated deficit (2,602,782) (2,539,403)
Treasury stock (4,366) (4,366)
---------- ------------
Total stockholders' equity 1,426,189 1,470,953
---------- ------------
Total $4,825,663 $ 5,085,972
========== ============
UNAUDITED CONDENSED
CONSOLIDATED STATEMENTS OF
OPERATIONS Three Months Six Months
(In thousands, except per share Ended Ended
data) June 30, June 30,
----------------- -------------------
2005 2004 2005 2004
-------- -------- --------- ---------
REVENUES:
Rental and management $184,609 $167,587 $ 366,179 $ 332,163
Network development services 3,451 4,705 6,236 8,920
-------- -------- --------- ---------
Total operating revenues 188,060 172,292 372,415 341,083
-------- -------- --------- ---------
OPERATING EXPENSES:
Rental and management 59,388 58,320 119,568 117,196
Network development services 3,331 3,345 5,533 6,906
Depreciation, amortization and
accretion 84,784 85,464 166,755 166,809
Corporate general,
administrative and
development expense 6,443 6,651 13,416 13,530
Impairments, net loss on sale
of long-lived assets and
restructuring expense 1,473 5,373 4,250 9,287
-------- -------- --------- ---------
Total operating expenses 155,419 159,153 309,522 313,728
-------- -------- --------- ---------
INCOME FROM OPERATIONS 32,641 13,139 62,893 27,355
-------- -------- --------- ---------
OTHER INCOME (EXPENSE):
Interest income, TV Azteca,
net 3,584 3,652 7,082 7,192
Interest income 808 1,122 1,507 2,236
Interest expense (53,043) (68,021) (107,759) (137,178)
Loss on retirement of
long-term obligations (16,388) (31,388) (31,430) (39,441)
Other expense (1,160) (655) (490) (859)
-------- -------- --------- ---------
Total other expense (66,199) (95,290) (131,090) (168,050)
-------- -------- --------- ---------
LOSS FROM CONTINUING
OPERATIONS BEFORE INCOME
TAXES, MINORITY INTEREST AND
LOSS ON EQUITY METHOD -------- -------- --------- ---------
INVESTMENTS (33,558) (82,151) (68,197) (140,695)
-------------------------------------
Income tax benefit 3,846 19,269 8,184 32,287
Minority interest in net
earnings of subsidiaries (56) (490) (111) (1,913)
Loss on equity method
investments (952) (622) (2,050) (1,240)
-------- -------- --------- ---------
LOSS FROM CONTINUING
OPERATIONS (30,720) (63,994) (62,174) (111,561)
-------- -------- --------- ---------
LOSS FROM DISCONTINUED
OPERATIONS, NET (1,098) (1,203) (1,205) (1,874)
-------- -------- --------- ---------
NET LOSS $(31,818)$(65,197)$ (63,379)$(113,435)
======== ======== ========= =========
BASIC AND DILUTED NET LOSS PER
COMMON SHARE AMOUNTS
Loss from continuing
operations $ (0.13)$ (0.29)$ (0.27)$ (0.50)
Loss from discontinued
operations (0.01) (0.01) (0.01)
----------------- --------- ---------
BASIC AND DILUTED NET LOSS PER
COMMON SHARE $ (0.14)$ (0.29)$ (0.28)$ (0.51)
======== ======== ========= =========
WEIGHTED AVERAGE COMMON SHARES
OUTSTANDING 230,793 223,578 230,477 221,993
======== ======== ========= =========
UNAUDITED CONDENSED
CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands) Six Months Ended
June 30,
--------------------
2005 2004
--------- ---------
CASH FLOWS PROVIDED BY OPERATING ACTIVITIES:
Net loss $ (63,379) $(113,435)
Non-cash items reflected in statements of
operations 219,926 228,069
Decrease in assets 13,644 2,934
Decrease in liabilities (5,182) (12,178)
--------- ---------
Cash provided by operating activities 165,009 105,390
--------- ---------
CASH FLOWS USED FOR INVESTING ACTIVITIES:
Payments for purchase of property and
equipment and construction activities (36,526) (18,666)
Payments for acquisitions (4,184) (18,353)
Payment for acquisition of Mexico minority
interest (7,270) (3,947)
Proceeds from sale of businesses and other
long-term assets 3,625 21,288
Deposits, investments and other long-term
assets (587) 548
--------- ---------
Cash used for investing activities (44,942) (19,130)
--------- ---------
CASH FLOWS (USED FOR) PROVIDED BY FINANCING
ACTIVITIES:
Repayment of notes payable, credit
facility and capital leases (260,188)(1,076,978)
Proceeds from issuance of debt securities 225,000
Net proceeds from stock options and other 10,767 8,780
Borrowings under credit facility 700,000
Restricted cash and investments 170,036
Deferred financing costs and other
financing activities (581) (20,707)
--------- ---------
Cash (used for) provided by financing activities (250,002) 6,131
--------- ---------
NET (DECREASE) INCREASE IN CASH AND CASH
EQUIVALENTS (129,935) 92,391
CASH AND CASH EQUIVALENTS, BEGINNING OF YEAR 215,557 105,465
--------- ---------
CASH AND CASH EQUIVALENTS, END OF PERIOD $ 85,622 $ 197,856
========= =========
CASH PAID FOR INCOME TAXES $ 9,453 $ 989
========= =========
CASH PAID FOR INTEREST $ 90,170 $ 103,979
========= =========
UNAUDITED SUPPLEMENTAL INFORMATION
SELECTED CAPITAL EXPENDITURE DETAIL Three Months Ended
(in millions) June 30, 2005
------------------
CAPITAL EXPENDITURES (PAYMENTS FOR
PURCHASE OF PROPERTY AND EQUIPMENT AND
CONSTRUCTION ACTIVITIES)
Discretionary $ 12
Improvements/Augmentation 8
Corporate 1
------------------
Total $ 21
------------------
SELECTED INTEREST EXPENSE DETAIL Three Months Ended
(in millions) June 30, 2005
------------------
Credit facility $ 9
12.25% Senior subordinated
discount notes due 2008 8
9.375% Senior notes due 2009 3
5.0% Convertible notes due 2010 3
3.25% Convertible notes due 2010 2
7.25% Senior subordinated
notes due 2011 7
7.50% Senior notes due 2012 4
3.00% Convertible notes due 2012 3
7.125% Senior notes due 2012 9
Deferred financing amortization,
warrant discount and other
discount/(premium) amortization 4
Other 1
------------------
Total interest expense $ 53
------------------
SELECTED BALANCE SHEET DETAIL
(in millions)
LONG-TERM OBLIGATIONS BREAKOUT, June 30, 2005
INCLUDING CURRENT PORTION ------------------
Term loan A $ 300
Term loan C 396
Revolver -
12.25% Senior subordinated
discount notes due 2008 225
9.375% Senior notes due 2009 142
5.0% Convertible notes due 2010 276
3.25% Convertible notes due 2010 210
7.25% Senior subordinated
notes due 2011 400
7.50% Senior notes due 2012 225
3.00% Convertible notes due 2012 344
7.125% Senior notes due 2012 502
Other debt 60
------------------
Total debt 3,080
Cash & cash equivalents 86
------------------
Net debt (Total debt less
total cash and cash equivalents) $ 2,994
==================
SELECTED SHARE DETAIL
June 30, 2005
------------------
TOTAL SHARES OUTSTANDING (in millions) 231.2
==================
SELECTED TOWER PORTFOLIO DETAIL
Three Months Ended June 30, 2005
ACTIVE TOWER COUNTS Owned
Wireless Broadcast Managed or
Towers Towers Lease/Sublease Total
-------- --------- -------------- -------
Beginning Balance, 4/1/05 13,795 327 695 14,817
New Construction 56 - - 56
Acquisitions 9 - - 9
Reductions (3) - (24) (27)
-------- --------- -------------- -------
Ending Balance, 6/30/05 13,857 327 671 14,855
======== ========= ============== =======
UNAUDITED RECONCILIATIONS TO GAAP MEASURES
Second Quarter 2005 and
2004: Adjusted EBITDA
and Adjusted EBITDA
margin
The reconciliation of
net loss to adjusted
EBITDA is as follows: Three Months Ended
(in thousands of June 30,
dollars) 2005 2004
------------ ----------
Net loss $ (31,818) $ (65,197)
Loss from discontinued
operations, net 1,098 1,203
------------ ----------
Loss from continuing
operations (30,720) (63,994)
------------ ----------
Interest expense 53,043 68,021
Interest income (808) (1,122)
Income tax benefit (3,846) (19,269)
Depreciation,
amortization and
accretion 84,784 85,464
Impairments, net loss
on sale of long-lived
assets and
restructuring expense 1,473 5,373
Loss on retirement of
long-term obligations 16,388 31,388
Minority interest in
net earnings of
subsidiaries 56 490
Loss on equity method
investments 952 622
Other expense 1,160 655
------------ ----------
Adjusted EBITDA $ 122,482 $ 107,628
============ ==========
Divided by total
operating revenues $ 188,060 $ 172,292
------------ ----------
Adjusted EBITDA margin 65% 62%
============ ==========
Second Quarter 2005 and
2004: Net Leverage
Ratio
The calculation of net
leverage is as
follows:
(in thousands of
dollars, except June 30,
ratios) --------------------------
2005 2004
------------ ----------
Total cash and cash
equivalents $ 85,622 $ 197,856
Current portion of
long-term obligations 87,955 6,495
Long-term obligations 2,991,925 3,260,322
------------ ----------
Total debt 3,079,880 3,266,817
------------ ----------
Net debt (Total debt
less total cash and
cash equivalents) 2,994,258 3,068,961
Respective 2Q Adjusted
EBITDA 122,482 107,628
Multiplied by 4
(annualization) x 4 x 4
------------ ----------
Respective 2Q
annualized Adjusted
EBITDA $ 489,928 $ 430,512
------------ ----------
Net Leverage Ratio (Net
debt divided by
respective 2Q
annualized Adjusted
EBITDA) 6.1x 7.1x
============ ==========
Third Quarter and Full Year 2005 Outlook to GAAP Measures
The reconciliation of
loss from continuing
operations to Adjusted
EBITDA is as follows: Third Quarter 2005 Full Year 2005
------------------------- ------------------
(in millions of
dollars) Low High Low High
---------- ---------- ------ ------
Loss from continuing
operations (1) (2) $ (17) to $ (15) $ (90) to $ (83)
Total interest expense 53 to 51 213 to 209
Other, including
depreciation,
amortization and
accretion,
impairments, net loss
on sale of long-lived
assets and
restructuring expense,
interest income, loss
on retirement of
long-term obligations,
loss on equity
method investments,
other expense, income
tax benefit and
minority interest in
net earnings of
subsidiaries. (2) 87 to 89 368 to 370
---------- ---------- ------ ------
Adjusted EBITDA $ 123 to $ 125 $ 491 to $ 496
========== ========== ====== ======
(1) The Company has not reconciled our Adjusted EBITDA to net loss
because we do not provide guidance for loss from discontinued
operations, net, which is the reconciling item between loss from
continuing operations and net loss.
(2) The Company's third quarter loss from continuing operations
includes a $5 million pre-tax loss from retirement of long-term
obligations as a result of our debt redemptions and repurchases
as of July 28, 2005.
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