American Tower Corporation Reports Strong Second Quarter Results.Business/Technology Editors BOSTON--(BUSINESS WIRE)--Aug. 2, 2001 American Tower Corporation Formed in 1995, American Tower Corporation is a publicly held company (NYSE: AMT) that is a leading owner and operator of wireless and broadcast communications sites in North America. Today American Tower owns and operates over 30,000 sites in the United States, Mexico and Brazil. (NYSE NYSE See: New York Stock Exchange : AMT See vPro. ) today reported significant increases in revenues and 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 before development expense ("operating loss operating loss The excess of operating expenses over revenue. As with operating income, operating losses exclude revenues and expenses from operations that are not considered a regular part of the business. Also called deficit. Compare operating income. before depreciation and amortization and development 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") for the six months and quarter ended June June: see month. 30, 2001 as compared to the same period in the prior year. For the three months ended June 30, 2001, revenues increased to $263.0 million from $167.0 million for the three months ended June 30, 2000. EBITDA excluding development expense increased to $62.7 million for the three months ended June 30, 2001 from $47.5 million for the same period in 2000. For the six months ended June 30, 2001, revenues increased to $525.4 million from $282.6 million for the six months ended June 30, 2000. EBITDA excluding development expense increased to $125.2 million for the six months ended June 30, 2001 from $82.1 million for the same period in 2000. In the second quarter 2001, the Company constructed 367 towers and acquired 1,129 towers for quarter end tower counts of 11,646 wireless towers, 325 broadcast towers, and 949 managed or sub-leased sites. Of the towers acquired in the second quarter, 869 were related to the ALLTEL ALLTEL Corporation (NYSE: AT) is an American telecommunications company with headquarters in Little Rock, Arkansas. Alltel provides wireless services to residential and business customers in 35 states. transaction. The balance of ALLTEL towers are expected to close in tranches Tranches A piece, portion or slice of a deal or structured financing. This portion is one of several related securities that are offered at the same time but have different risks, rewards and/or maturities. "Tranche" is the French word for "slice". in the second half 2001, as previously disclosed. For the 10,158 active wireless towers owned by the Company as of the beginning of the second quarter, the Company added 1,032 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). equivalent tenants, net of build-to-suit anchor tenants and lease cancellations. This is equivalent to an 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. lease-up rate of 0.41 broadband equivalent tenants per tower, an implied annual revenue growth rate of approximately 24%. New rental business was primarily driven by broadband customers, including PCS (1) (Personal Communications Services) Refers to wireless services that emerged after the U.S. government auctioned commercial licenses in 1994 and 1995. This radio spectrum in the 1. , cellular and ESMR ESMR Enhanced Specialized Mobile Radio ESMR Extended Specialized Mobile Radio (Nextel) ESMR Expert Systems Message Router ESMR Electrically/Electronically Scanned/ing Microwave Radiometer ESMR Engine Starter Motor Relay , representing approximately 94% of new business. Steve Dodge, American Tower's Chairman and Chief Executive Officer stated, "Our tower division has achieved strong sequential quarterly revenue growth from $91 million to $106 million and cash flow growth from $49 million to $59 million in spite of in opposition to all efforts of; in defiance or contempt of; notwithstanding. See also: Spite a difficult economic environment and increasingly conservative credit policies. Over time, we believe operating leverage Operating Leverage A measurement of the degree to which a firm or project relies on fixed rather than variable costs. Notes: The higher the degree of operating leverage, the greater the potential danger from forecasting risk. will continue to become more apparent in our tower division. Margin improvement has been evident on the individual tower level throughout the history of our company but has been somewhat masked A state of being disabled or cut off. on our consolidated financials due to continued additions of large numbers of young, undeveloped towers to our base and due to investments in operational infrastructure to support future growth and demand. As the established base of towers grows and matures, we expect the sequential revenue, cash flow and margin growth that is occurring within that base will become much more visible to investors. "We continue to tighten our investment criteria for new builds, finding compelling alternative applications of capital with superior risk-reward profiles, particularly in Mexico and Brazil. Accordingly, we are adjusting our construction plan for the current year from 2,000 towers to between 1,500 and 1,700 towers. We will review our environment and strategy on a continuous basis with an eye toward investing our time and money where we believe returns are greatest. "We reaffirm re·af·firm tr.v. re·af·firmed, re·af·firm·ing, re·af·firms To affirm or assert again. re our revenue and cash flow outlook for the third and fourth quarters for all segments. We remain cautious about Services and Verestar and we expect our core tower business to enjoy strong performance through the third and fourth quarter and beyond." 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 2001 and fiscal year 2001. The call will be hosted by Joe Winn, Chief Financial Officer, who will be joined by Steve Dodge, Chief Executive Officer, and other executive officers. The dial-in numbers are US: 888-639-6205, international: 952-556-2846, no access codes required. A replay of the call will be available from 2:30 p.m. Eastern Thursday, August 2, 2001 until 11:59 p.m. Eastern Thursday, August 9, 2001. The replay dial-in numbers are US: 800-475-6701, and international: 320-365-3844, access code 596843. American Tower will also sponsor a live simulcast of the call on its web site at http://investor.americantower.com. A replay of the call will be available on the web site shortly after the end 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 14,400 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, including approximately 300 broadcast tower sites. Of the 14,400 sites, approximately 13,500 are owned or leased towers and approximately 900 are managed and lease/sublease sites. Based in Boston, American Tower has regional hub offices in Boston, Atlanta, Chicago, Houston, San Francisco San Francisco (săn frănsĭs`kō), city (1990 pop. 723,959), coextensive with San Francisco co., W Calif., on the tip of a peninsula between the Pacific Ocean and San Francisco Bay, which are connected by the strait known as the Golden and Mexico City Mexico City Spanish Ciudad de México City (pop., 2000: city, 8,605,239; 2003 metro. area est., 18,660,000), capital of Mexico. Located at an elevation of 7,350 ft (2,240 m), it is officially coterminous with the Federal District, which occupies 571 sq mi . For more information about American Tower Corporation and its subsidiary Verestar, Inc., please visit our web sites www.americantower.com and www.verestar.com. 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 of historical facts. Forward-looking statements include information regarding our outlook for the quarterly and full-year results of operations for 2001. Actual results may differ materially from those indicated in our forward-looking statements as a result of various important factors, including: (i) a decrease in demand for tower space would materially and adversely affect our operating results and we cannot control that demand; (ii) our substantial leverage and debt service obligations may adversely affect our operating results and our ability to make payments on our 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. ; (iii) 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 our senior notes could adversely affect our business by limiting flexibility; (iv) build-to-suit construction projects and major acquisitions from wireless service providers increase our dependence on a limited number of customers, the loss of which could materially decrease revenue, and may also involve less favorable fa·vor·a·ble adj. 1. Advantageous; helpful: favorable winds. 2. Encouraging; propitious: a favorable diagnosis. 3. terms; (vii) if we cannot successfully integrate acquired sites or businesses or manage our operations as we grow, our business will be adversely affected and our growth may decline; (viii) increasing competition in the satellite and fiber network access services market may slow Verestar's growth and adversely affect its business; (ix) expanding operations into 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; and (x) a significant general
slow down in the economy in 2001 could reduce consumer demand for
wireless services, thereby causing providers to delay implementation of
new systems and technologies. We also believe the economic slow down in
2001 has harmed, and may continue to harm, the financial condition of
some wireless service providers. 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, 2001, 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 share
data) June 30, June 30,
2001 2000 2001 2000
REVENUES:
Rental and
management $ 106,493 $ 63,233 $ 197,704 $ 116,940
Services 100,429 74,026 206,943 112,178
Satellite and
fiber network
access services 56,046 29,788 120,789 53,446
Total operating
revenues 262,968 167,047 525,436 282,564
OPERATING
EXPENSES:
Rental and
management 51,547 31,290 97,137 59,782
Services 88,083 65,127 184,581 97,327
Satellite and
fiber network
access services 57,801 23,242 114,114 42,258
Depreciation and
amortization 103,956 67,093 198,955 122,291
Development
expense (A) 2,557 4,196 5,302 5,184
Corporate
general and
administrative
expense 6,407 3,084 11,534 6,515
Total operating
expenses 310,351 194,032 611,623 333,357
OPERATING LOSS (47,383) (26,985) (86,187) (50,793)
OTHER INCOME
(EXPENSE):
Interest expense (70,061) (38,437) (136,740) (70,587)
Interest income
and other, net 4,451 3,851 12,858 6,437
Interest income,
TV Azteca, net
of interest
expense (B) 3,582 3,155 7,120 5,463
Loss on
investment in
U.S. Wireless (22,226) (22,226)
Note conversion
expense (16,968) (16,968)
Minority
interest in net
earnings of
subsidiaries 61 (22) 3 (58)
Total other
expense (84,193) (48,421) (138,985) (75,713)
LOSS BEFORE
INCOME TAXES AND
EXTRAORDINARY
LOSSES (131,576) (75,406) (225,172) (126,506)
INCOME TAX
BENEFIT 27,636 16,774 49,725 30,214
LOSS BEFORE
EXTRAORDINARY
LOSSES (103,940) (58,632) (175,447) (96,292)
EXTRAORDINARY
LOSSES ON
EXTINGUISHMENT
OF DEBT, NET OF
INCOME TAX
BENEFIT OF
$2,892 (4,338)
NET LOSS $(103,940) $ 58,632 $(175,447) $(100,630)
BASIC AND DILUTED
NET LOSS PER
COMMON SHARE
Loss before
extraordinary
losses $ (0.54) $ (0.36) $ (0.93) $ (0.60)
Extraordinary
losses $ (0.03)
BASIC AND DILUTED
NET LOSS PER
COMMON SHARE $ (0.54) $ (0.36) $ (0.93) $ (0.63)
WEIGHTED AVERAGE
COMMON SHARES
OUTSTANDING 190,755 161,021 188,976 158,768
OTHER OPERATING
DATA
(In thousands,
except per share
data)
EBITDA (C) $ 60,155 $ 43,263 $ 119,888 $ 76,961
EBITDA EXCLUDING
DEVELOPMENT
EXPENSE $ 62,712 $ 47,459 $ 125,190 $ 82,145
NOTES
(A) Includes uncapitalized acquisition costs, costs to integrate
acquisitions, costs associated with new business initiatives,
abandoned acquisition costs and costs associated with tower site
inspections and related data gathering which are not capitalized in
accordance with generally accepted accounting principles.
(B) Amounts are net of interest expense of $ 291 and $ 297 for the
three months ended June 30, 2001 and 2000, and of $583 and $ 457 for
the six months ended June 30, 2001 and 2000, respectively.
(C) Defined as operating loss before depreciation and amortization
plus interest income TV Azteca, net.
American Tower Corporation
August 2, 2001
(In Millions)
Revised 2001 Quarterly and 2001 Fiscal 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 August 2, 2001. Company outlook is based on
assumptions such as the timing of closings, the number of towers
closed, the number of new builds constructed, and tenant lease-up
rates. Please refer to the cautionary language included in this press
release when considering this information. The Company undertakes no
obligation to update this information.
"Cash flow" is defined as segment revenues less segment operating
expenses before depreciation and amortization, development expense,
and corporate general and administrative expense. Segment cash flow
for rental and management includes interest income TV Azteca, net.
Q3 2001 Q4 2001 Fiscal Year 2001
Outlook Ranges Outlook Ranges Outlook Ranges
Rental and
Management
Revenue $111 to $114 $124 to $130 $433 to $442
Rental and
Management
Cash Flow 63 to 67 72 to 79 242 to 253
(includes
Interest
Income TV
Azteca,
net)
Services
Revenue 115 to 140 105 to 130 427 to 477
Services
Cash Flow 17 to 23 15 to 20 54 to 65
Satellite
and Fiber
Network
Access
Services
Revenue 63 to 70 72 to 83 256 to 274
Satellite
and Fiber
Network
Access
Services
Cash Flow 2 to 7 6 to 15 15 to 29
Total
Revenue 289 to 324 301 to 343 1,116 to 1,193
Total Cash
Flow 82 to 97 93 to 114 311 to 347
EBITDA
Excluding
Development
Expense 76 to 92 87 to 108 287 to 324
EBITDA 74 to 91 85 to 107 278 to 317
Depreciation
and
Amortization 119 to 117 127 to 125 445 to 441
Interest
Expense, Net
of Interest
Income and
Other(a) 74 to 70 79 to 75 299 to 291
Basic and
Diluted Net
Loss Per
Common
Share $(0.52) to $(0.42) $(0.54) to $(0.43) $(1.99) to $(1.78)
(a) Includes second quarter impairment charge on investment in U.S.
Wireless of approximately $22 million.
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