American Tower Corporation Reports Second Quarter Results.Business Editors/High-Tech Writers BOSTON--(BUSINESS WIRE)--July 24, 2003 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. ): -- Same tower revenue and same tower cash flow growth of 12% and 19%, respectively -- 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 $96.2 million and adjusted EBITDA margin improved to 54.0% -- Free cash flow of $14.2 million -- Income from operations of $3.8 million and net loss of $107.7 million American Tower Corporation (NYSE: AMT) today reported financial results for the quarter ended June June: see month. 30, 2003. For the three months ended June 30, 2003, 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 to $151.9 million from $132.0 million for the same period in 2002. Total revenues increased to $178.2 million for the three months ended June 30, 2003, from $165.8 million for the same period in 2002. 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 increased to $81.0 million, or $0.40 per share, for the three months ended June 30, 2003 from $67.7 million, or $0.35 per share, for the same period in 2002. Net loss increased to $107.7 million, or $0.53 per share, for the three months ended June 30, 2003 from $101.2 million, or $0.52 per share, for the same period in 2002. Loss from continuing operations and net loss for the three months ended June 30, 2003 include a non-cash charge Non-Cash Charge A charge off, made by a company against earnings, that does not require an initial outlay of cash. Notes: Non-cash charges are typically against the depreciation, amortization, and depletion accounts on a company's balance sheet. of $35.8 million or $0.18 per share related to several convertible note exchanges. Adjusted EBITDA ("income (loss) from operations before depreciation and amortization and impairments and net loss (gain) 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 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 to $96.2 million for the three months ended June 30, 2003 from $72.9 million for the same period in 2002. 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. ("rental and management revenue less rental and management 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. plus interest income, TV Azteca, net") increased to $101.2 million for the three months ended June 30, 2003 from $78.4 million for the same period in 2002. The Company generated free cash flow ("adjusted EBITDA less interest expense and capital expenditures incurred, excluding acquisitions and divestitures") of $14.2 million for the three months ended June 30, 2003. During the second quarter 2003, the Company also committed to sell its steel fabrication fabrication (fab´rikā´sh  n),n the construction or making of a restoration. and tall tower construction service subsidiary, Kline Iron & Steel Co., Inc. As a result of its intention to sell Kline Iron & Steel Co. Inc. within the next twelve months, the Company has designated Kline Iron & Steel Co. Inc. as discontinued operations Discontinued operations Divisions of a business that have been sold or written off and that no longer are maintained by the business. for the second quarter 2003, six months ended 2003 and for comparative periods shown for 2002, 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 . Accordingly, services revenue and services segment operating profit were reduced by $10.7 million and $0.2 million, respectively, for the second quarter 2003 and by $24.5 million and $2.0 million, respectively, for the same period in the prior year. Steve v. t. 1. To pack or stow, as cargo in a ship's hold. See Steeve. Dodge, 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, stated, "Solid organic revenue growth from towers of 12%, coupled with tight spending controls keyed strong margin expansion and significant gains in sequential One after the other in some consecutive order such as by name or number. quarterly adjusted EBITDA and free cash flow. We see these patterns continuing through this year and beyond. While our customers are also focused on delivering free cash flow, the demands on their networks are increasing, so the deployment Installing, setting up, testing and running. This military term, which means the placement of troops and equipment in the field, is widely used with computers as an alternate to the word "implementation. of coverage and capacity sites continues. As the correlation correlation In statistics, the degree of association between two random variables. The correlation between the graphs of two data sets is the degree to which they resemble each other. between network quality and financial performance grows stronger, and as certain companies effectively promote 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. network advantages, we believe the motivation to invest in new sites and site upgrades will intensify in·ten·si·fy v. in·ten·si·fied, in·ten·si·fy·ing, in·ten·si·fies v.tr. 1. To make intense or more intense: . It has been particularly satisfying for me to observe TO OBSERVE, civil law. To perform that which has been prescribed by some law or usage. Dig., 1, 3, 32. the work of our managers, who keep delivering on a range of initiatives, both operational and financial. The gains we have experienced each quarter are taking on an aspect of consistency Consistency can refer to:
Operating Highlights Organic same tower revenue and same tower cash flow growth on the 13,534 North American North American named after North America. North American blastomycosis see North American blastomycosis. North American cattle tick see boophilusannulatus. towers owned as of the beginning of the second quarter 2002 and the end of the second quarter 2003 was 12% and 19%, respectively, for the three months ended June 30, 2003 as compared to the three months ended June 30, 2002. Rental and management segment operating profit increased 29% to $101.2 million for the three months ended June 30, 2003, from $78.4 million for the same period in 2002. Rental and management segment operating profit margins Operating profit margin The ratio of operating profit to net sales. improved to 66.6% for the three months ended June 30, 2003, from 59.4% in the same period in 2002. Adjusted EBITDA increased to $96.2 million for the three months ended June 30, 2003, from $72.9 million for the same period in 2002. Adjusted EBITDA margin improved to 54.0% for the three months ended June 30, 2003, from 43.9% in the same period in 2002. Free cash flow of $14.2 million was generated in the second quarter 2003, which includes a deduction deduction, in logic, form of inference such that the conclusion must be true if the premises are true. For example, if we know that all men have two legs and that John is a man, it is then logical to deduce that John has two legs. of approximately ap·prox·i·mate adj. 1. Almost exact or correct: the approximate time of the accident. 2. $20.3 million for non-cash interest expense from the 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 of our discount notes and amortization of deferred financing costs. (Excluding the $20.3 million of non-cash interest expense would result in free cash flow of $34.4 million.) Asset Transactions During the second quarter 2003, the Company closed on $21.3 million of divestitures, consisting of $5.2 million of cash proceeds and the elimination of $16.1 million of long-term debt Long-Term Debt Loans and financial obligations lasting over one year. Notes: For example debts obligations such as bonds and notes which have maturities greater than one year would be considered long-term debt. . Divestitures during the second quarter 2003 included certain non-core tower assets and an office building, recorded as discontinued operation discontinued operation A segment of a business that has been abandoned or sold or for which plans for one or another of these actions have been approved. See also continuing operations. in the first quarter, within our rental and management segment. As stated above, the Company intends to sell Kline Iron & Steel Co. Inc. in the next twelve months. Accordingly, the Company has adjusted its June 30, 2003 and 2002 financial statements, as well as its 2003 Outlook, to reflect this services business as discontinued operations. The Company has recognized a $14.0 million impairment Impairment 1. A reduction in a company's stated capital. 2. The total capital that is less than the par value of the company's capital stock. Notes: 1. This is usually reduced because of poorly estimated losses or gains. 2. in the value of this subsidiary in the current period, resulting in a carrying value Carrying Value Also know as "book value," it is a company's total assets minus intangible assets and liabilities, such as debt. Notes: This is different than market value, as it can be higher or lower depending on the circumstances. as of June 30, 2003 of $16.4 million, which is included on our balance sheet as net assets Net assets The difference between total assets on the one hand and current liabilities and noncapitalized long-term liabilities on the other hand. net assets See owners' equity. and liabilities held for sale. The Company has also recognized an additional $12.0 million impairment in the value of its Verestar subsidiary, thus reducing its carrying value to $0. The Company anticipates that it may receive in excess of $30 million of proceeds from the sale of additional non-core assets in the remainder of 2003, including the potential proceeds from the sale of Kline Iron & Steel Co. Inc. The Company has closed approximately $67.1 million of the $100 million NII (National Information Infrastructure) The U.S. government's policy for managing advanced technology in the country. The Clinton/Gore administration (1993-2001) was very enthusiastic about the Internet and proposed that it should be funded by private industry and be Holdings Inc. tower acquisition, as of the end of the second quarter 2003, including approximately $10.6 million in the second quarter 2003. The Company expects to close the remaining $32.9 million of the NII Holdings Inc. acquisition in stages throughout the remainder of 2003. In June 2003, the Company filed an income tax refund Tax refund Money back from the government when too much tax has been paid or withheld from a salary. claim with the Internal Revenue Service relating to relating to relate prep → concernant relating to relate prep → bezüglich +gen, mit Bezug auf +acc net operating losses Net operating losses Losses that a firm can take advantage of to reduce taxes. generated by the Company in 1998, 1999 and 2001. The Company plans to file a similar claim in September September: see month. 2003, with respect to net operating losses generated in 2002. The Company anticipates receiving approximately $90 million as a result of these claims, which will monetize Monetize 1. To convert into money. 2. To convert from securities into currency that can be used to purchase goods and services. Notes: For example, you'll often hear Internet marketers talk about "monetizing website visitors. a portion of the Company's deferred tax asset. The Company estimates receipt of this amount within one to three years of the dates the claims were filed with the IRS An abbreviation for the Internal Revenue Service, a federal agency charged with the responsibility of administering and enforcing internal revenue laws. . Financing Highlights As of June 30, 2003, the Company had $300.5 million in cash and cash equivalents, including $192.9 million of restricted cash and investments. As of June 30, 2003, the Company had the ability to draw $237.8 million of its revolving loan, which represents the undrawn un·draw tr.v. un·drew , un·drawn , un·draw·ing, un·draws To draw to one side, as a curtain. Adj. 1. undrawn - not represented in a drawing undelineated - not represented accurately or precisely and available portion of that loan. Combined with cash on hand as of June 30, 2003, the Company had a total of $538.3 million in total liquidity (which includes $192.9 million of restricted cash and investments). During the second quarter 2003, the Company repaid or eliminated a total of $103.2 million of debt, consisting of $70.7 million of accreted value accreted value The current value of an original-issue discount bond, taking into account imputed interest that has accumulated. of its 2.25% convertible notes, $18.9 million of mortgages and other debt, and $13.6 million of scheduled payments on its senior secured credit facilities credit facilities npl → facilidades fpl de crédito credit facilities npl → facilités fpl de paiement credit facilities . To date, the Company has paid $27.2 million of scheduled payments and $224.5 million of prepayments Prepayments Payments made in excess of scheduled mortgage principal repayments. on its senior secured credit facilities. During the second quarter 2003 and excluding previously announced transactions, the Company exchanged approximately $22.0 million of principal value (approximately $17.4 million accreted value) of its 2.25% convertible notes for approximately 1.2 million shares of its Class A common stock and $6.4 million in cash. The Company recorded a non-cash charge of $6.8 million associated with these additional transactions for a total of $35.8 million in non-cash charges including previously announced transactions in the second quarter 2003. During the six months ended June 30, 2003, the Company exchanged approximately $93.5 million of principal value (approximately $73.9 million accreted value) of the 2.25% convertible notes for approximately 8.4 million shares of its Class A common stock and $24.8 million in cash. As of June 30, 2003, the accreted value of the remaining 2.25% convertible notes that may be put to the Company on October October: see month. 22, 2003 was $140.1 million. The Company had $192.9 million of restricted cash and investments, as of June 30, 2003, that may be used to retire retire v. 1) to stop working at one's occupation. 2) to pay off a promissory note, and thus "retire" the loan. 3) for a jury to go into the jury room to decide on a verdict after all evidence, argument and jury instructions have been completed. the remaining 2.25% convertible notes. Restricted cash and investments in excess of the accreted value of the remaining 2.25% convertible notes may be used to retire the Company's other senior and convertible notes. Quarterly and Full Year 2003 Outlook On page 9 of this release, the Company has provided its 2003 outlook on a full year and quarterly basis for each of its two operating segments. The Company anticipates a solid lease-up environment for its existing towers for the remainder of 2003 and maintains its expectation for sequential organic revenue growth rates Growth Rates The compounded annualized rate of growth of a company's revenues, earnings, dividends, or other figures. Notes: Remember, historically high growth rates don't always mean a high rate of growth looking into the future. of 10% to 14%. The Company has adjusted its rental and management outlook to reflect second quarter 2003 actual results and the lower than anticipated level of new tower development and closings of the NII Holdings, Inc. acquisition. The Company has adjusted its full year 2003 services revenue outlook to $89 million to $106 million and full year 2003 services segment operating profit outlook to $6 million to $10 million to reflect the discontinued operations of its steel fabrication and tall tower construction service subsidiary, Kline Iron & Steel Co., Inc., and current business conditions. The Company has adjusted its expectation for full year 2003 total capital expenditures incurred to between $48 million and $56 million. Rental and Management capital expenditures incurred are expected to range from $39 million to $46 million, including $22 million to $24 million for constructing approximately 100 new wireless towers, and approximately $17 to $22 million for tower maintenance and augmentation AUGMENTATION, old English law. The name of a court erected by Henry VIII., which was invested with the power of determining suits and controversies relating to monasteries and abbey lands. . Services and corporate capital expenditures incurred are expected to range from $4 million to $5 million and Verestar capital expenditures incurred are expected to be approximately $5 million. Conference Call Information American Tower will host a conference call today at 11:00 a.m. Eastern to discuss quarterly results and the Company's outlook for quarterly 2003 and full year 2003. The call will be hosted by Brad Singer, Chief Financial Officer, who will be joined by Steve Dodge, Chief Executive Officer, Jim Taiclet, President, and other executive officers. The dial-in numbers are US/Canada: 800-230-1766, international: 612-332-0107, no access codes required. A replay of the call will be available from 2:30 p.m. Eastern Thursday Thursday: see week. , July July: see month. 24, 2003 until 11:59 p.m. Eastern Thursday, July 31, 2003. The replay dial-in numbers are US: 800-475-6701, and international: 320-365-3844, access code 690513. 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 web site, http://investor.americantower.com. A replay of the call will be available on the web site shortly after the conclusion of the call. 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. . Giving effect to pending transactions, American Tower operates approximately 15,000 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 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. Of the 15,000 sites, approximately 14,000 are owned or leased towers and approximately 1,000 are managed and lease/sublease sites. For more information about American Tower Corporation, please visit our web sites www.americantower.com. About Adjusted EBITDA, Same Tower Cash Flow, Free Cash Flow and Adjusted EBITDA Margin We do not consider adjusted EBITDA, same tower cash flow, free cash flow, and adjusted EBITDA margin as substitutes for other measures of profitability or liquidity determined in accordance with generally accepted accounting principles (GAAP GAAP See: Generally Accepted Accounting Principles GAAP See generally accepted accounting principles (GAAP). ) in the United States, such as operating income Operating Income The profit realized from a business' own operations. Notes: This would not include income from things such as investments in other firms. Also referred to as operating profit or recurring profit. or cash flows from operating activities. Adjusted EBITDA, same tower cash flow, free cash flow, and adjusted EBITDA margin are not calculated in accordance with GAAP; however, we have included them in this release as additional information because they are commonly used in the communications site industry as a measure of a company's operating performance. More specifically, we believe they can assist in comparing company performances on a consistent basis without regard to depreciation and amortization. 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, our measure of adjusted EBITDA, same tower cash flow, free cash flow, and adjusted EBITDA margin may not be comparable to similarly titled measures of other companies. Reconciliations of these measures to GAAP are included on page 10 of this release. Our results under GAAP are set forth in the financial statements attached on pages 5-7 of this release. This press release contains "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. " 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, the future divestiture The breakup of AT&T. By federal court order, AT&T divested itself on January 1, 1984 of its 23 operating companies, which became known as the Regional Bell Operating Companies (RBOCs). of Kline Iron & Steel Co. Inc. and its financial impact on the Company, our anticipated income tax refund claim, our revised quarterly and full year 2003 Outlook, and planned future asset sales. 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, which would materially and adversely affect our operating results; (2) continuation continuation - continuation passing style of the current U.S. economic slowdown For articles with similar titles, see Slow Down (disambiguation). A slowdown is an industrial action in which employees perform their duties but seek to reduce productivity or efficiency in their performance of these duties. , which could materially and adversely affect our business; (3) our substantial leverage and debt service obligations may adversely affect our operating results by restricting re·strict tr.v. re·strict·ed, re·strict·ing, re·stricts To keep or confine within limits. See Synonyms at limit. [Latin restringere, restrict- : re-, our ability to allocate To reserve a resource such as memory or disk. See memory allocation. capital to income producing assets; (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 and our senior and discount notes 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 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. 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) if we issue a significant amount of equity securities, the trading price Trading price The price at which a security is currently selling. for our shares of Class A Common Stock could be adversely affected; (8) operations in foreign countries could lead to expropriations, government regulations, funds inaccessibility in·ac·ces·si·ble adj. Not accessible; remote or unapproachable. in  ac·ces , foreign
exchange exposure and management problems; (9) new technologies could
make our tower antenna leasing services less desirable to potential
tenants and result in decreasing revenues; (10) our inability to
complete our planned asset sales or realize the amount of proceeds we
currently expect from such sales; and (11) if we are unsuccessful in
realizing our anticipated income tax refund claim. 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: "Business Factors That May Affect Future Results" in our Form 10-Q Form 10-Q See 10-Q. for the quarter ended March 31, 2003, 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 .
UNAUDITED CONDENSED
CONSOLIDATED STATEMENTS OF
OPERATIONS Three Months Ended Six Months Ended
(In thousands, except per June 30, June 30,
share data)
----------------------------------------
2003 2002 2003 2002
----------------------------------------
REVENUES:
Rental and management $151,916 $132,017 $298,378 $258,618
Network development
services 26,306 33,820 44,769 70,805
----------------------------------------
Total operating
revenues 178,222 165,837 343,147 329,423
----------------------------------------
OPERATING EXPENSES:
Rental and management 54,205 57,062 108,901 114,013
Network development
services 24,421 28,921 42,542 62,337
Depreciation and
amortization 80,770 79,804 161,150 154,439
Corporate general and
administrative expense 5,962 6,474 11,997 13,303
Restructuring expense 2,952 5,774
Development expense 1,003 1,027 1,616 3,467
Impairments and net loss
on sale of long-lived
assets 8,036 5,017 11,732 1,311
----------------------------------------
Total operating
expenses 174,397 181,257 337,938 354,644
----------------------------------------
INCOME (LOSS) FROM OPERATIONS 3,825 (15,420) 5,209 (25,221)
----------------------------------------
OTHER INCOME (EXPENSE):
Interest income, TV
Azteca, net 3,528 3,471 7,030 6,900
Interest income 1,930 774 2,856 1,811
Interest expense (71,201) (65,537) (142,943) (129,307)
Loss on investments and
other expense (402) (17,808) (25,599) (19,355)
Loss from write-off of
deferred financing fees
and extinguishment of
debt (5,841) (8,869)
Note conversion expense (A) (35,832) (38,482)
Minority interest in net
earnings of subsidiaries (793) (491) (1,363) (734)
----------------------------------------
Total other expense (102,770) (79,591) (204,342) (149,554)
----------------------------------------
LOSS FROM CONTINUING
OPERATIONS BEFORE INCOME
TAXES (98,945) (95,011) (199,133) (174,775)
INCOME TAX BENEFIT 17,985 27,312 37,493 50,027
----------------------------------------
LOSS FROM CONTINUING
OPERATIONS BEFORE CUMULATIVE
EFFECT OF CHANGE IN
ACCOUNTING PRINCIPLE (80,960) (67,699) (161,640) (124,748)
LOSS FROM DISCONTINUED
OPERATIONS, NET (B) (26,755) (33,469) (37,698) (48,192)
----------------------------------------
LOSS BEFORE CUMULATIVE EFFECT
OF CHANGE IN ACCOUNTING
PRINCIPLE (107,715) (101,168) (199,338) (172,940)
----------------------------------------
CUMULATIVE EFFECT OF CHANGE
IN ACCOUNTING PRINCIPLE, NET
OF INCOME TAX BENEFIT OF
$14,438 (C) (562,618)
----------------------------------------
NET LOSS $(107,715)$(101,168)$(199,338)$(735,558)
========================================
BASIC AND DILUTED NET LOSS
PER COMMON SHARE AMOUNTS
Loss from continuing
operations before
cumulative
effect of change in
accounting principle $(0.40) $(0.35) $(0.81) $(0.64)
Discontinued operations (0.13) (0.17) (0.19) (0.25)
Cumulative effect of
change in accounting
principle (2.88)
----------------------------------------
BASIC AND DILUTED NET LOSS
PER COMMON SHARE $(0.53) $(0.52) $(1.00) $(3.77)
========================================
WEIGHTED AVERAGE COMMON
SHARES OUTSTANDING 202,913 195,361 199,328 195,322
========================================
NOTES TO CONSOLIDATED STATEMENTS OF OPERATIONS
(A) Note conversion expense represents the fair value of
incremental stock issued to the Company's 2.25% noteholders to
convert their holdings prior to the first scheduled redemption
date of October 2003.
(B) During the three months ended June 2003, the Company committed
to the disposal through sale of its wholly owned subsidiary
Kline Iron & Steel Co. Inc. (Kline) The total revenue and
segment operating profit for Kline for the three months ended
June 30, 2003 and 2002 were approximately $10.7 million and
$0.2 million and $24.5 million and $2.0 million, respectively.
Total revenue and segment operating profit for Kline for the
six months ended June 30, 2003 and 2002 were approximately
$22.9 million and $1.0 million and $47.5 million and $3.9
million, respectively. The above statements of operations have
been adjusted to reflect the results of these operations, as
well as those from our wholly owned subsidiary Verestar, Inc.,
as discontinued operations.
(C) Effective January 1, 2002, the Company adopted SFAS No. 142
"Goodwill and Intangible Assets" and recognized a $562.6
million charge (net of a tax benefit of $14.4 million) as the
cumulative effect of a change in accounting principle related
to the write-down of goodwill to its fair value.
UNAUDITED CONDENSED
CONSOLIDATED BALANCE SHEETS
(In thousands) June 30, December 31,
2003 2002
--------------------------
ASSETS
Current Assets:
Cash and cash equivalents $107,597 $127,292
Restricted cash and investments 192,885
Accounts receivable, net 57,904 68,421
Other current assets 73,237 85,697
Assets held for sale 153,521 303,702
--------------------------
Total current assets 585,144 585,112
--------------------------
Property and equipment, net 2,634,575 2,696,985
Goodwill and other intangible assets, net 1,688,912 1,734,679
Deferred income taxes 411,920 383,431
Other long-term assets 255,701 261,996
--------------------------
Total $5,576,252 $5,662,203
==========================
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities:
Accounts payable and accrued expenses $92,422 $113,832
Accrued interest 59,479 63,611
Convertible notes, net - 2.25% 140,123 210,899
Current portion of long-term obligations
(excluding 2.25% convertible notes) 94,123 58,982
Other current liabilities 36,663 38,739
Liabilities held for sale 138,508 200,215
--------------------------
Total current liabilities 561,318 686,278
--------------------------
Long-term obligations 3,282,589 3,178,656
Other long-term liabilities 29,822 41,379
--------------------------
Total liabilities 3,873,729 3,906,313
--------------------------
Minority interest in subsidiaries 16,717 15,567
--------------------------
STOCKHOLDERS' EQUITY:
Class A Common Stock 1,947 1,856
Class B Common Stock 77 79
Class C Common Stock 23 23
Additional paid-in capital 3,782,193 3,642,019
Accumulated deficit (2,086,368) (1,887,030)
Accumulated other comprehensive loss (980) (5,564)
Note receivable (6,720) (6,720)
Treasury stock (4,366) (4,340)
--------------------------
Total stockholders' equity 1,685,806 1,740,323
--------------------------
Total $5,576,252 $5,662,203
==========================
UNAUDITED CONDENSED
CONSOLIDATED STATEMENTS OF CASH FLOWS Six Months Ended
(In thousands) June 30,
------------------------
2003 2002
------------------------
CASH FLOWS PROVIDED BY OPERATING ACTIVITIES:
Net loss $(199,338) $(735,558)
Cumulative effect of change in accounting
principle, net 562,618
Other non-cash items reflected in statement of
operations 265,104 187,771
Decrease in assets 7,558 27,467
Decrease in liabilities (22,737) (9,826)
------------------------
Cash provided by operating activities 50,587 32,472
------------------------
CASH FLOWS PROVIDED BY (USED FOR) INVESTING
ACTIVITIES:
Payments for purchase of property and
equipment and construction activities (32,691) (131,265)
Payments for acquisitions (41,096) (21,651)
Proceeds from sale of businesses and other
long-term assets 77,317 20,029
Deposits, investments and other long-term
assets 635 (10,735)
------------------------
Cash provided by (used for) investing
activities 4,165 (143,622)
------------------------
CASH FLOWS (USED FOR) PROVIDED BY FINANCING
ACTIVITIES:
Borrowings under credit facilities 160,000
Proceeds from senior subordinated notes and
warrants offering 419,884
Repayment of long-term obligations (256,953) (102,848)
Repayment of 2.25% convertible notes (24,846)
Restricted cash and investments (192,885) 46,601
Deferred financing costs and other (19,647) 910
------------------------
Cash (used for) provided by financing
activities (74,447) 104,663
------------------------
NET DECREASE IN CASH AND CASH EQUIVALENTS (19,695) (6,487)
CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD 127,292 35,958
------------------------
CASH AND CASH EQUIVALENTS, END OF PERIOD $107,597 $29,471
========================
CASH PAID FOR INCOME TAXES $1,158 $425
========================
CASH PAID FOR INTEREST $118,267 $126,118
========================
UNAUDITED SUPPLEMENTAL INFORMATION
SELECTED CAPITAL EXPENDITURE Three Months
DETAIL Ended
(in millions) June 30, 2003
---------------
CAPITAL EXPENDITURES INCURRED
Wireless tower construction $4
Broadcast tower construction 0
Maintenance/Improvements 5
Land 0
Services 0
Verestar 1
Corporate 1
---------------
Total capital expenditures incurred $11
---------------
SELECTED INTEREST EXPENSE DETAIL Three Months Ended
---------------
Credit facilities $14
12.25% Senior subordinated discount
notes, due 2008 13
Discount amortization of $0.01
warrants expiring 2008 2
9.375% Senior notes, due 2009 23
Convertible notes, due 2009
and 2010 11
Hedging instruments 2
Deferred financing
amortization 4
Other 2
---------------
Total interest expense incurred $71
---------------
SELECTED BALANCE SHEET DETAIL
(in millions) June 30, 2003
---------------
LIQUIDITY
Cash and cash equivalents $108
Restricted cash and
investments 193
---------------
Total cash and cash
equivalents $300
---------------
Available borrowings (a) 238
---------------
Total liquidity $538
---------------
LONG TERM OBLIGATIONS BREAKOUT,
INCLUDING CURRENT PORTION
Revolving line of credit $157
Term loan A 686
Term loan B 415
12.25% Senior subordinated
discount notes, due 2008 393
9.375% Senior notes, due 2009 1,000
6.25% Convertible notes, due 2009 213
2.25% Discounted convertible
notes, due 2009 140
5.00% Convertible notes, due 2010 450
Capital leases 46
Other 17
---------------
Total long term obligations $3,517
---------------
Net debt (Total long term
obligations less total cash and
cash equivalents) $3,217
---------------
SHARES OUTSTANDING (in millions) 204.7
SELECTED TOWER PORTFOLIO Three Months
DETAIL Ended
June 30, 2003
---------------
Same tower revenue growth (b) 12%
Same tower cash flow growth (b) 19%
-----------------------------------------
ACTIVE TOWER COUNTS Owned Broadcast Managed or Total
Wireless Towers Lease/Sublease
Towers
-----------------------------------------
Beginning Balance, 4/1/03 13,427 335 972 14,734
New Construction 14 14
Acquisitions 61 61
Reductions (38) (1) (39)
-----------------------------------------
Ending Balance, 6/30/03 13,464 334 972 14,770
-----------------------------------------
(a) Available borrowings under Revolving Loan based on most
restrictive covenant as of 6/30/03, adjusted for outstanding
letters of credit of $27.2 million.
(b) Same tower revenue and cash flow growth include U.S., Mexico
and Brazil owned wireless and broadcast towers.
American Tower Corporation Financial Summary
July 24, 2003
(In millions, except per share data)
QUARTERLY AND FULL YEAR 2003 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 24, 2003. Company outlook is based on
assumptions about the number of new builds constructed, tenant
lease-up and the timing of tower closings. Please refer to the
cautionary language included in this press release when considering
this information. The Company undertakes no obligation to update this
information.
"Segment operating profit" is defined as segment revenues less
segment operating expenses before depreciation and amortization,
development expense, restructuring expense, corporate general and
administrative expense, and impairments and net loss on sale of
long-lived assets. Segment operating profit for rental and management
includes interest income TV Azteca, net.
"Adjusted EBITDA" is defined as income (loss) from operations
before depreciation and amortization and impairments and net loss
(gain) on sale of long-lived assets, plus interest income, TV Azteca,
net.
Q3 2003 Q4 2003 Full Year 2003
Outlook Ranges Outlook Ranges Outlook Ranges
---------------------------------------------------
Rental and
management revenue $157 to $159 $162 to $165 $617 to $622
Rental and
management segment
operating profit 104 to 106 108 to 112 409 to 415
(Includes
interest
income, TV
Azteca, net)
Services revenue 22 to 30 22 to 30 89 to 105
Services segment
operating profit 2 to 4 2 to 4 6 to 10
Total revenue 179 to 189 184 to 195 706 to 727
Total segment
operating profit 106 to 110 110 to 116 415 to 425
Corporate and
development
expense 7 to 6 7 to 6 28 to 26
Adjusted EBITDA 99 to 104 103 to 110 387 to 399
Depreciation and
amortization 81 to 79 81 to 79 323 to 319
Interest expense 72 to 69 70 to 67 285 to 279
Loss from
continuing
operations (46) (39) (43) (33) (251) (234)
Basic and diluted
net loss per
common share $(0.22) to$(0.19)$(0.21) to$(0.16)$(1.24) to$(1.16)
from continuing
operations
Interest exp.,
excluding
accretion and
deferred financing 51 to 48 50 to 47 209 to 203
Capital
expenditures
incurred 13 to 17 13 to 17 48 to 56
Acquisition spending for the year 2003 is expected to be
approximately $74 million, all of which is for the NII Holdings
transaction, and $41 million of which had been spent as of June 30,
2003.
RECONCILIATION OF OUTLOOK TO GAAP MEASURES(1)
The reconciliation
of loss from
continuing
operations to Q3 2003 Q4 2003 Full Year 2003
Adjusted EBITDA is Outlook Ranges Outlook Ranges Outlook Ranges
as follows:
---------------------------------------------------
Loss from
continuing
operations $(46) to $(39) $(43) to $(33) $(251) to $(234)
Interest expense 72 to 69 70 to 67 285 to 279
Depreciation and
amortization 81 to 79 81 to 79 323 to 319
Other, including
interest income,
note conversion
expense, loss (8) to (5) (5) to (3) 30 to 35
on investment
and other
expense, and
income tax
benefit
------- ------- ------- ------- ------- -------
Adjusted EBITDA $99 to $104 $103 to $110 $387 to $399
======= ======= ======= ======== ====== =======
(1) We have not reconciled our adjusted EBITDA outlook to net loss
because we do not provide guidance for the reconciling items
between loss from continuing operations and net loss (loss
from discontinued operations).
UNAUDITED RECONCILIATIONS TO GAAP MEASURES
In thousands
Same tower cash flow
The reconciliation of same tower cash flow
for the 13,534 towers owned as of the end
of the second
quarter 2003 and the beginning of the
second quarter 2002 is as follows: Three Months Ended
June 30,
2003 2002
------------- ------------
Rental and management revenue $151,916 $132,017
Revenue from towers not owned as of
4/1/2002, real estate and managed or
lease/subleased towers (10,743) (5,975)
------------- ------------
Same tower revenue on 13,534 towers $141,173 $126,042
------------- ------------
Rental and management expense (54,205) (57,062)
Rental and management regional overhead 11,453 14,457
Expenses from towers not owned as of
4/1/2002, real estate and managed or
lease/subleased towers 3,235 2,234
------------- ------------
Same tower expenses on 13,534 towers $(39,517) $(40,371)
------------- ------------
------------- ------------
Same tower cash flow on 13,534 towers $101,656 $85,671
============= ============
Capital expenditures incurred, excluding
acquisitions and divestitures
The reconciliation of capital expenditures
incurred, excluding acquisitions and
divestitures is as follows:
--------------------------
2003 2002
------------- ------------
Payments for purchase of property and
equipment and construction activities $32,691 $131,265
for the six months ended June 30
Payments for purchase of property and
equipment and construction activities (18,821) (83,251)
for the three months ended March 31
------------- ------------
Payments for purchase of property and
equipment and construction activities 13,870 48,014
------------- ------------
for the three months ended June 30
Change in accrued capital expenditures (3,100) (9,092)
for the three months ended June 30
------------- ------------
Capital expenditures incurred, excluding
acquisitions and divestitures $10,770 $38,922
============= ============
for the three months ended June 30
Adjusted EBITDA, free cash flow, and
adjusted EBITDA margin
The reconciliation of net loss to adjusted
EBITDA, free cash flow and adjusted
EBITDA margin
is as follows: Three Months Ended
June 30,
2003 2002
------------- ------------
Net loss $(107,715) $(101,168)
Loss from discontinued operations, net 26,755 33,469
------------- ------------
Loss from continuing operations (80,960) (67,699)
------------- ------------
Interest expense 71,201 65,537
Interest income (1,930) (774)
Income tax benefit (17,985) (27,312)
Depreciation and amortization 80,770 79,804
Impairments and net loss on sale of long-
lived assets 8,036 5,017
Note conversion expense 35,832 -
Other expense 1,195 18,299
------------- ------------
Adjusted EBITDA $96,159 $72,872
============= ============
Interest expense (71,201) (65,537)
Capital expenditures incurred, excluding
acquisitions and divestitures (10,770) (38,922)
------------- ------------
Free cash flow 14,188 (31,587)
------------- ------------
Accretion of 2.25% discount convertible
notes due 2009 1,349 1,693
Accretion of 12.25% senior subordinated
discount notes due 2008 12,872 -
Accretion of warrants discount (issued in
conjunction with 12.25% notes) 2,245 -
Amortization of deferred financing fees 3,788 2,987
------------- ------------
Free cash flow, excluding accretion and
amortization of deferred financing $34,442 $(26,907)
============= ============
Adjusted EBITDA $96,159 $72,872
Divided by total operating revenues 178,222 165,837
------------- ------------
Adjusted EBITDA margin 54.0% 43.9%
============= ============
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