American Tower Corporation Reports Third Quarter Results.Business Editors BOSTON--(BUSINESS WIRE)--Nov. 8, 2002 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. ): -- EBITDA before restructuring charges increased 27% to $86.0 million from $67.8 million in the third quarter 2001 -- Tower cash flow increased 33% to $86.8 million from $65.1 million in the third quarter 2001 -- Proceeds from divestitures of over $33 million in the third quarter 2002; approximately $53 million closed year-to-date; approximately $70 million signed but not closed -- Non-cash asset impairments and net loss on sale of long-lived assets charge of $271 million; primarily related to Verestar, with additional non-cash charges related to construction-in-progress and other impairments and losses on non-core tower assets -- Net loss of $353.9 million American Tower Corporation (NYSE: AMT) today reported increases in 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 ("loss from operations before depreciation and amortization, and impairments and 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, 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"), EBITDA before 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, and tower cash flow ("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 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") for the quarter ended September September: see month. 30, 2002 as compared to the same period in the prior year. For the three months ended September 30, 2002, revenues decreased to $266.6 million, from $273.7 million for the three months ended September 30, 2001. 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 $353.9 million, or $1.81 per share, for the three months ended September 30, 2002 from $122.9 million, or $0.64 per share, for the same period in 2001. Net Loss increased to $353.9 million, or $1.81 per share, for the three months ended September 30, 2002 from $124.9 million, or $0.65 per share, for the same period in 2001. EBITDA increased to $84.4 million for the three months ended September 30, 2002 from $67.8 million for the same period in 2001. EBITDA before restructuring increased to $86.0 million for the three months ended September 30, 2002 from $67.8 million for the same period in 2001. Tower cash flow increased to $86.8 million for the three months ended September 30, 2002 from $65.1 million for the same period in 2001. 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, "Our sequential One after the other in some consecutive order such as by name or number. , quarterly EBITDA growth remains strong and consistent, and we expect more of the same in the fourth quarter. This pattern is the result of steady, mid-teens organic revenue growth in towers, and the conversion of over 100% of these gains into tower cash flow. We expect our debt to EBITDA ratio to have improved in excess of two and a half turns in the course of 2002, primarily as a result of consistent EBITDA expansion. "We set a goal of 60% tower margins by the fourth quarter of this year, and we have already exceeded this figure in the third quarter, with continued expansion expected in the fourth quarter and beyond. We would like to point out that our tower division, which now contributes 93% of total cash flow, has been consistently hitting its numbers for the past two years. "Year to date we have completed the sale or have announced sales of approximately ap·prox·i·mate adj. 1. Almost exact or correct: the approximate time of the accident. 2. $125 million of non-core assets. We hope to add in excess of $100 million to this total during the next two quarters, not including Verestar. We remain committed to a path for the structural separation of Verestar by year end, which at a minimum should result in a reduction in liabilities of approximately $115 million. We would also like to confirm our intention to reinvest re·in·vest tr.v. re·in·vest·ed, re·in·vest·ing, re·in·vests To invest (capital or earnings) again, especially to invest (income from securities or funds) in additional shares. a portion of these proceeds into high quality, high growth, strategic tower assets. Taken as a whole these initiatives will serve to improve the quality and reliability of our cash flow, with towers expected to contribute well over 95% in 2003. Other benefits include an expansion in overall margins, improved overall liquidity, and accelerated de-levering. "Finally, we'd we'd 1. Contraction of we had. 2. Contraction of we should. 3. Contraction of we would. we'd have ~would like to recognize and thank our key managers and employees who have remained focused and loyal as we reshape the company and secure its industry leading future." Operating Highlights Organic same tower revenue and cash flow growth on the 11,314 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 third quarter 2001 and the end of the third quarter 2002 was 15% and 24%, respectively. 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 activity on the 12,912 North American wireless towers owned at the beginning and the end of the third quarter 2002 was 0.25 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 (BBE BBE n abbr (US) (= Benevolent and Protective Order of Elks) → organizzazione filantropica ) tenants per tower, which is calculated net of churn churn: see butter. , excludes anchor tenants on build-to-suit towers and contractual escalators, and does not consider the growth on broadcast towers. Tower rental cash flow increased 33% to $86.8 million and margins improved to 61.2%, a 700 basis point increase from the same period in 2001. On a sequential basis, tower cash flow increased $6.5 million and margins improved 190 basis points in the third quarter 2002 from the second quarter 2002. The incremental Additional or increased growth, bulk, quantity, number, or value; enlarged. Incremental cost is additional or increased cost of an item or service apart from its actual cost. margin expansion was achieved through a combination of organic revenue growth and active management of costs. 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 Non Core Assets The Company continues to pursue its strategy to focus on its core tower operations and strategic service offerings. Consistent with this strategy, in October October: see month. the Company entered into a definitive agreement to sell its corporate headquarters building, for approximately $68 million. Approximately $38 million of the gross proceeds will 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 associated mortgage, thus providing the Company with $30 million net proceeds Net Proceeds The amount received after all costs are deducted from the sale of a piece of property or security. Notes: In the case of an investor selling a security, net proceeds represent the proceeds from the sale minus any trading costs (i.e. commissions). . The building had contributed approximately $8 million in annual revenue and $5 million in annual cash flow to the Rental and Management segment. The transaction is expected to close in mid- mid- pref. Middle: midbrain. fourth quarter 2002. The Company is continuing to pursue strategic divestitures of non-core assets in an effort to enhance efficiency and anticipates additional strategic activity in the fourth quarter and beyond. Asset 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. Charges The Company has recognized an impairment charge of approximately $271 million in the third quarter 2002. Approximately $188 million of the charge relates to a write down of certain Verestar asset values based on the expected net proceeds upon disposition Act of disposing; transferring to the care or possession of another. The parting with, alienation of, or giving up of property. The final settlement of a matter and, with reference to decisions announced by a court, a judge's ruling is commonly referred to as disposition, regardless of , approximately $40 million relates to a write down of construction in progress to reflect the abandonment abandonment, in law, voluntary, intentional, and absolute relinquishment of rights or property without conveying them to any other person. Abandonment also means willfully leaving one's spouse or children, intending not to return (see desertion). of certain sites that are now not expected to be completed given a further reduction in new development plans, and approximately $43 million relates to the impairments and net loss on sale of certain non-core tower assets that have been sold or are expected to be sold as part of the Company's tower portfolio management efforts. Financing Highlights As of September 30, 2002, the Company had $65 million in cash and had not drawn on its $650 million Revolving Loan since April, 2002. Based on the financial covenants of the credit facility as of September 30, 2002, the Company had the ability to draw the entire $490 million 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 portion of the $650 million Revolving Loan. As of September 30, 2002, the Company had a total of $555 million in total liquidity based on the $65 million of cash and $490 million of availability under its Revolving Loan. The Company's current business plan anticipates nominal Trifling, token, or slight; not real or substantial; in name only. Nominal capital, for example, refers to extremely small or negligible funds, the use of which in a particular business is incidental. NOMINAL. Relating to a name. , if any, incremental borrowing needs until achieving free cash flow, which is expected to occur in early 2003. Free cash flow means the Company will be generating EBITDA in excess of the current amount needed for interest expense and capital expenditures. Subsequent to the end of the third quarter 2002, we amended a·mend v. a·mend·ed, a·mend·ing, a·mends v.tr. 1. To change for the better; improve: amended the earlier proposal so as to make it more comprehensive. 2. our credit facility to provide additional performance cushion Cushion In the context of project financing, the extra amount of net cash flow remaining after expected debt service. cushion See call protection. in the future as bank debt amortizes and to exclude Verestar as a borrower BORROWER, contracts. He to whom a thing is lent at his request. 2. The contract of loan confers rights, and imposes duties on the borrower' 1. In general, he has the right to use the thing borrowed, during the time and for the purpose intended between the in order to facilitate a sale or strategic transaction. 2002 & 2003 Outlook On page eleven of this release, the Company has provided its fourth quarter 2002, full year 2002 and full year 2003 outlook for each of its operating segments. 2002 -- The Company continues to anticipate a solid leasing environment for the remainder of 2002 and has adjusted its Rental and Management revenue and cash flow outlook for the loss of revenue and cash flow associated with the sale of its corporate headquarters and to reflect third quarter actual results. -- The Company has modestly adjusted its fourth quarter 2002 outlook for Services to reflect its cautious view of the market. -- The Company has reduced its fourth quarter 2002 outlook for its Satellite and Fiber Network Access Services segment due to the continued challenging telecom market. 2003 -- The Company's 2003 Rental and Management outlook is based on fourth quarter 2002 outlook revenue and expense run-rates and anticipated incremental tower revenue growth rates of 10% to 14%. -- Total capital expenditures are expected to be between $55 million and $80 million. Rental and Management capital expenditures are expected to range from $45 million to $65 million, including $20 million to $35 million for constructing 100 to 150 new wireless towers, and $25 million to $30 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. capital expenditures. Services and Corporate capital expenditures are expected to range from $2 million to $5 million and Verestar capital expenditures are expected to range from $8 to $10 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 the fourth quarter 2002, fiscal year 2002, and fiscal 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: 800-603-0809, international: 706-643-3257, no access codes required. A replay of the call will be available from 2:00 p.m. Eastern Friday Friday: see Sabbath; week. Friday young Indian rescued by Crusoe and kept as servant and companion. [Br. Lit.: Robinson Crusoe] See : Servant , November November: see month. 8, 2002 until 12:00 a.m. Eastern Wednesday Wednesday: see week. , November 13, 2002. The replay dial-in numbers are US: 800-642-1687, and international: 706-645-9291, access code 5956914. 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. . 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 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 14,400 sites, approximately 13,500 are owned or leased towers and approximately 900 are managed and lease/sublease sites. Based in 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 has regional hub offices in Boston, Atlanta Atlanta (ətlăn`tə, ăt–), city (1990 pop. 394,017), state capital and seat of Fulton co., NW Ga., on the Chattahoochee R. and Peachtree Creek, near the Appalachian foothills; inc. 1847. , Chicago Chicago, city, United States Chicago (shĭkä`gō, shĭkô`gō), city (1990 pop. 2,783,726), seat of Cook co., NE Ill., on Lake Michigan; inc. 1837. , 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. About EBITDA, EBITDA Before Restructuring and Tower Cash Flow We do not consider EBITDA, EBITDA before restructuring, and tower cash flow as substitutes for other measures of profitability or liquidity determined 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). ) 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. EBITDA, EBITDA before restructuring and tower cash flow 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. However, our measure of EBITDA, EBITDA before restructuring, and tower cash flow may not be comparable to similarly titled measures of other companies. Our results under GAAP are set forth in the financial statements attached to 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. 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 and we cannot control that demand; (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 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 further limiting our flexibility and causing us to breach our tower development obligations; (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) increasing competition in the satellite and fiber network access services market may adversely affect Verestar's business; (8) 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; (9) 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; and (10) new technologies
could make our tower antenna leasing services less desirable to
potential tenants and result in decreasing revenues. 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 June June: see month. 30, 2002, which "Factors That May Affect Future Results" 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
(In thousands, except per share data)
Three Months Ended Nine Months Ended
September 30, September 30,
-------------------- -----------------------
2002 2001 2002 2001
--------- --------- ----------- ----------
REVENUES:
Rental and management $ 141,688 $ 120,032 $ 407,494 $ 317,736
Network development
services 67,657 96,295 195,621 273,772
Satellite and fiber
network access services 57,262 57,402 174,364 178,191
--------- --------- ----------- ---------
Total operating
revenues 266,607 273,729 777,479 769,699
--------- --------- ----------- ---------
OPERATING EXPENSES:
Rental and management 58,451 58,605 175,847 155,742
Network development
services 61,579 86,545 176,523 243,132
Satellite and fiber
network access services 57,228 55,353 173,327 169,467
Depreciation and
amortization (A) 97,207 113,880 285,010 305,618
Corporate general and
administrative expense 5,641 7,353 18,944 18,887
Restructuring expense 1,670 17,739
Development expense 1,185 1,736 4,664 7,038
Impairments and net loss
on sale of long-lived
assets (B) 271,040 272,351
--------- --------- ----------- ---------
Total operating
expenses 554,001 323,472 1,124,405 899,884
--------- --------- ----------- ---------
LOSS FROM OPERATIONS (287,394) (49,743) (346,926) (130,185)
--------- --------- ----------- ---------
OTHER INCOME (EXPENSE):
Interest income, TV
Azteca, net (C) 3,514 3,627 10,414 10,747
Interest income 766 4,593 2,637 27,564
Interest expense (66,742) (73,483) (203,795) (210,223)
Loss on investments and
other expense (5,278) (5,082) (29,360) (36,259)
Loss on term loan
cancellation (7,231)
Note conversion expense (26,336) (26,336)
Minority interest in net
earnings of
subsidiaries (639) (19) (1,373) (16)
--------- --------- ----------- ---------
Total other expense (68,379) (96,700) (228,708) (234,523)
--------- --------- ----------- ---------
LOSS FROM CONTINUING
OPERATIONS BEFORE
INCOME TAXES (355,773) (146,443) (575,634) (364,708)
INCOME TAX BENEFIT 1,836 23,543 67,540 73,262
--------- --------- ----------- ---------
LOSS FROM CONTINUING
OPERATIONS BEFORE
EXTRAORDINARY LOSS
AND CUMULATIVE EFFECT OF
CHANGE IN ACCOUNTING
PRINCIPLE (353,937) (122,900) (508,094) (291,446)
DISCONTINUED OPERATIONS
(D):
Income (loss) from
operations of
components division,
net of income tax
(provision)
benefit of $(70) ,
$(450) , $853 and
$(444) , respectively 133 (2,038) (1,635) (8,939)
Loss on disposal of
components division,
net of income tax
benefit of
$40 and $8,628,
respectively (73) (16,023)
--------- --------- ----------- ---------
INCOME (LOSS) ON
DISCONTINUED
OPERATIONS, NET 60 (2,038) (17,658) (8,939)
EXTRAORDINARY LOSS ON
EXTINGUISHMENT OF
DEBT, NET OF INCOME TAX
BENEFIT OF $573 (1,065)
--------- --------- ----------- ---------
LOSS BEFORE CUMULATIVE
EFFECT OF CHANGE IN
ACCOUNTING
PRINCIPLE (353,877) (124,938) (526,817) (300,385)
CUMULATIVE EFFECT OF
CHANGE IN ACCOUNTING
PRINCIPLE, NET OF
INCOME TAX BENEFIT OF
$14,438 (A) (562,618)
--------- --------- ----------- ---------
NET LOSS $(353,877) $(124,938) $(1,089,435) $(300,385)
========= ========= =========== =========
BASIC AND DILUTED NET
LOSS PER COMMON SHARE
AMOUNTS
Loss from continuing
operations before
extraordinary loss and
cumulative
effect of change in
accounting principle $ (1.81) $ (0.64) $ (2.60) $ (1.53)
Discontinued operations (0.01) (0.09) (0.05)
Extraordinary loss (0.01)
Cumulative effect of
change in accounting
principle (2.88)
--------- --------- ----------- ---------
BASIC AND DILUTED NET
LOSS PER COMMON SHARE $ (1.81) $ (0.65) $ (5.58) $ (1.58)
========= ========= =========== =========
WEIGHTED AVERAGE COMMON
SHARES OUTSTANDING 195,565 193,135 195,404 190,380
========= ========= =========== =========
OTHER OPERATING DATA
(In thousands)
EBITDA (E) $ 84,367 $ 67,764 $ 220,849 $ 186,180
========= ========= =========== =========
EBITDA, before
restructuring expense $ 86,037 $ 67,764 $ 238,588 $ 186,180
========= ========= =========== =========
NOTES TO CONSOLIDATED STATEMENTS OF OPERATIONS
(A) As of January 1, 2002, the Company adopted the provisions of SFAS
No. 142 "Goodwill and Other Intangible Assets" (SFAS 142). The
adoption of SFAS 142 reduced amortization expense and net loss by
approximately $24.0 million or $0.12 per share for the three
months ended September 30, 2002 and $72.0 million or $0.37 per
share for the nine months ended September 30, 2002. In addition,
the adoption of SFAS 142 resulted in the Company recognizing a
$577.0 million (before giving effect to an income tax benefit of
$14.4 million) non-cash charge related to goodwill impairment
within our Satellite and Fiber Network Access Services segment
($189.2 million) and our Network Development Services segment
($387.8 million).
(B) For the three months ended September 30, 2002, the Company
recorded impairment charges of $187.8 million related to asset
write-downs to its wholly-owned subsidiary Verestar Inc., $43.0
million related to impairments and net losses on sale of certain
non-core towers and $40.2 million related to the write-down of
construction in progress.
(C) Amounts are net of interest expense of $374 and $289 for the three
months ended September 30, 2002 and 2001, and of $1,120 and $872
for the nine months ended September 30, 2002 and 2001,
respectively.
(D) Effective June 30, 2002, the Company committed to the disposal of
certain operations within its components division. Accordingly,
the above statements of operations have been adjusted to reflect
the results of these operations as discontinued operations.
(E) Defined as loss from operations before depreciation and
amortization, and impairments and net loss on sale of long-lived
assets, plus interest income, TV Azteca, net.
The reconciliation of loss from operations to EBITDA is as follows:
Three Months Ended Nine Months Ended
September 30, September 30,
--------------------- ---------------------
2002 2001 2002 2001
---------- ---------- ---------- ----------
Loss from operations $(287,394) $ (49,743) $(346,926) $(130,185)
Depreciation and
amortization 97,207 113,880 285,010 305,618
Impairments and net loss
on sale of long-lived
assets 271,040 272,351
Interest income, TV
Azteca, net 3,514 3,627 10,414 10,747
--------- --------- --------- ---------
EBITDA 84,367 67,764 220,849 186,180
--------- --------- --------- ---------
Restructuring expense 1,670 17,739
--------- --------- --------- ---------
EBITDA, before
restructuring expense $ 86,037 $ 67,764 $ 238,588 $ 186,180
========= ========= ========= =========
UNAUDITED CONDENSED
CONSOLIDATED BALANCE SHEETS
(In thousands)
September December
30, 31,
2002 2001
----------- -----------
ASSETS
Current Assets:
Cash and cash equivalents $ 64,860 $ 35,958
Restricted cash 94,071
Accounts receivable, net of allowance for
doubtful accounts 124,692 182,612
Prepaid and other current assets 91,818 89,645
Inventories 20,145 49,332
Costs and earnings in excess of billings
on uncompleted contracts and unbilled
receivables 28,007 46,453
Deferred income taxes 24,023 24,136
----------- -----------
Total current assets 353,545 522,207
----------- -----------
Property and equipment, net 2,989,989 3,287,573
Goodwill and other intangible assets, net 1,787,213 2,507,911
Deferred income taxes 333,589 245,215
Deposits and other long-term assets 125,467 110,598
Notes receivable 116,925 120,554
Investments 23,871 35,665
----------- -----------
Total $ 5,730,599 $ 6,829,723
=========== ===========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities:
Accounts payable and accrued expenses $ 172,625 $ 214,539
Accrued interest 38,010 59,492
Billings in excess of costs on
uncompleted contracts and unearned
revenue 50,216 56,098
Current portion of long-term obligations 53,685 12,585
----------- -----------
Total current liabilities 314,536 342,714
----------- -----------
Long-term obligations 3,569,444 3,549,375
Other long-term liabilities 40,535 54,501
----------- -----------
Total liabilities 3,924,515 3,946,590
----------- -----------
Minority interest in subsidiaries 15,000 13,937
----------- -----------
STOCKHOLDERS' EQUITY:
Class A Common Stock 1,855 1,851
Class B Common Stock 79 80
Class C Common Stock 23 23
Additional paid-in capital 3,641,630 3,639,510
Accumulated deficit (1,834,586) (745,151)
Accumulated other comprehensive loss (6,857) (16,057)
Note receivable (6,720) (6,720)
Treasury stock (4,340) (4,340)
----------- -----------
Total stockholders' equity 1,791,084 2,869,196
----------- -----------
Total 5,730,599 $$6,829,723
=========== ===========
UNAUDITED CONDENSED
CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)
Nine Months Ended
September 30,
---------------------------
2002 2001
------------ ------------
CASH FLOWS PROVIDED BY (USED FOR)
OPERATING ACTIVITIES:
Net loss $ (1,089,435) $ (300,385)
Cumulative effect of change in
accounting principle (non-cash) 562,618
Other non-cash items reflected in
statement of operations 551,301 343,293
Decrease (increase) in assets 54,589 (70,090)
(Decrease) increase in liabilities (43,934) 4,121
------------ ------------
Cash provided by (used for) operating
activities 35,139 (23,061)
------------ ------------
CASH FLOWS USED FOR INVESTING ACTIVITIES:
Payments for purchase of property and
equipment and construction activities (155,856) (457,543)
Payments for acquisitions, net of cash
acquired (21,651) (688,557)
Proceeds from sale of components
division and other long-term assets 39,726
Deposits, investments and other long-
term assets (16,765) (54,397)
------------ ------------
Cash used for investing activities (154,546) (1,200,497)
------------ ------------
CASH FLOWS PROVIDED BY FINANCING
ACTIVITIES:
Borrowings under credit facilities 160,000 181,500
Proceeds from senior notes offering 1,000,000
Repayment of credit facilities and
other long-term obligations (106,672) (77,691)
Net proceeds from equity offerings,
stock options and employee stock
purchase plan 910 365,684
Deferred financing costs, restricted
cash and other 94,071 (51,879)
------------ ------------
Cash provided by financing activities 148,309 1,417,614
------------ ------------
NET INCREASE IN CASH AND CASH EQUIVALENTS 28,902 194,056
CASH AND CASH EQUIVALENTS, BEGINNING OF
PERIOD 35,958 82,038
------------ ------------
CASH AND CASH EQUIVALENTS, END OF PERIOD $ 64,860 $ 276,094
============ ============
CASH PAID FOR INCOME TAXES $ 896 $ 4,998
============ ============
CASH PAID FOR INTEREST $ 215,373 $ 196,586
============ ============
UNAUDITED SUPPLEMENTAL INFORMATION
SELECTED CAPITAL EXPENDITURE DETAIL
(in millions)
Three Months
Ended
September 30, 2002
-------------
CAPITAL EXPENDITURES INCURRED
Wireless tower construction $18
Broadcast tower construction 3
Maintenance/Improvements 2
Land 0
Services 0
Verestar 5
Corporate 1
-------------
Total Capital Expenditures $29
-------------
SELECTED BALANCE SHEET DETAIL
(in millions) September 30,
2002
-------------
LIQUIDITY
Total cash balance $ 65
Available borrowings (a) 490
-------------
Total Liquidity $ 555
-------------
LONG TERM DEBT BREAKOUT, INCLUDING CURRENT PORTION
Revolving line of credit $ 160
Term loan A 850
Term loan B 500
9.375% Senior notes, due 2009 1,000
6.250% Convertible bond, due 2009 213
2.250% Discounted convertible bond, due 2009 209
5.000% Convertible bond, due 2010 450
Capital leases 169
Other 72
-------------
Total Long Term Debt $ 3,623
-------------
SHARES OUTSTANDING 195.6
SELECTED TOWER PORTFOLIO DETAIL
September 30,
2002
-------------
BBE per tower (b) 2.0
BBE lease-up (b) 0.25
Same tower revenue growth (c) 15%
Same tower cash flow growth (c) 24%
TOWER PORTFOLIO ACTIVITY SUMMARY
-------------------------------------------
ACTIVE TOWER COUNTS Owned Broadcast Managed Total
Wireless Towers or Lease/
Towers Sublease
-------------------------------------------
Beginning Balance, 7/1/02 13,146 334 921 14,401
New Construction 55 55
Acquisitions 9 9
Reductions (47) (47)
-------------------------------------------
Ending Balance, 9/30/02 13,154 334 930 14,418
-------------------------------------------
(a) Available borrowings based on most restrictive covenant as of
9/30/02
(b) BBE (Broadband Equivalent, assumes $1,500 in monthly rent) per
tower includes U.S. and Mexico Owned Wireless Towers
(c) Same tower revenue and cash flow growth include U.S. and Mexico
Owned Wireless and Broadcast towers
American Tower Corporation
November 8, 2002
(In Millions, Except Per Share Data)
2002 Fourth Quarter and 2002 and 2003 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 November 8, 2002. Company outlook is based on
assumptions about the number of new builds constructed, tenant
lease-up, and closing on sale of the headquarters building. 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 expenses,
restructuring expense, corporate general and administrative expense,
and impairments and net loss on sale of long-lived assets. Segment
cash flow for rental and management includes interest income TV
Azteca, net.
Q4 Fiscal Year Fiscal Year
2002 2002 2003
Outlook Ranges Outlook Ranges Outlook Ranges
----------------- ---------------- --------------
Rental and
Management
Revenue $ 146 to $ 149 $ 553 to $ 556 $ 610 to $ 640
Rental and
Management Cash
Flow 91 to 94 333 to 336 390 to 415
(Includes
Interest
Income, TV
Azteca, net)
Services Revenue 50 to 60 246 to 256 175 to 225
Services Cash
Flow 6 to 7 25 to 26 20 to 30
Satellite and
Fiber Network
Access Services
Revenue 50 to 55 224 to 229 200 to 225
Satellite and
Fiber Network
Access Services
Cash Flow 0 to 2 1 to 3 10 to 15
Total Revenue 246 to 264 1,023 to 1,041 985 to 1,090
Total Cash Flow 97 to 103 359 to 365 420 to 460
Corporate Expense 6 to 5 25 to 24 24 to 20
Development
Expense 1 to 1 6 to 6 4 to 4
EBITDA Before
Restructuring 90 to 97 328 to 335 392 to 436
Restructuring
Expense 2 to 1 20 to 19 0 to 0
EBITDA 88 to 96 308 to 316 392 to 436
Depreciation and
Amortization 86 to 90 371 to 375 not provided
Interest Expense 68 to 66 272 to 270 not provided
Basic and Diluted
Net Loss Per
Common Share
Before $(0.31) to $(0.26) $(2.91) to $(2.86) not provided
Discontinued
Operations,
Extraordinary
Item and
Cumulative
Effect of a
Change in
Accounting
Principle
Capital
Expenditures $ 25 to $ 30 $ 151 to $ 156 $ 55 to $ 80
Acquisition spending for the year 2002 is expected to be
approximately $29 million, of which $22 million has been spent as of
September 30, 2002.
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