American Tower Reaffirms Tower Rental and Services Outlook, Revises Verestar Outlook and Expects to Record an Impairment Charge On Investment.Business Editors BOSTON--(BUSINESS WIRE)--June 21, 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 announced that it has reaffirmed its second quarter and full year 2001 Revenue and Cash Flow outlook for its tower rental and services segments and has revised its Revenue and Cash Flow outlook for Verestar and the overall Company as well as the Company's Net Loss Per Common Share outlook. In addition, the Company expects to record an 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. charge on its preferred stock Stock shares that have preferential rights to dividends or to amounts distributable on liquidation, or to both, ahead of common shareholders. Preferred stock is given preference over common stock. Holders of preferred stock receive dividends at a fixed annual rate. investment in US Wireless Corporation (NASDAQ NASDAQ in full National Association of Securities Dealers Automated Quotations U.S. market for over-the-counter securities. Established in 1971 by the National Association of Securities Dealers (NASD), NASDAQ is an automated quotation system that reports on : USWCE). The Company's previous 2001 outlook was included in a May 2, 2001 press release and the previous 2002 outlook was included in a February 28, 2001 press release. A "Revised 2001 Quarterly and 2001 Fiscal Year Outlook" is included in the attached exhibit, and the Company is in the process of further assessing its 2002 outlook. American Tower's Chairman and Chief Executive Officer, Steve Dodge, stated, "Though our core tower rental and services businesses remain on plan and healthy, Verestar has experienced certain challenges assimilating as·sim·i·late v. as·sim·i·lat·ed, as·sim·i·lat·ing, as·sim·i·lates v.tr. 1. Physiology a. To consume and incorporate (nutrients) into the body after digestion. b. its InterPacket and USEI acquisitions, resulting in revenue below our forecasted level for the current quarter and the year. The integration issues at InterPacket have been compounded by technical issues related to third party hardware in the network resulting in customer disruption and revenue loss. These hardware problems have been since corrected. Verestar has also seen a slowing in demand in specific business segments and geographies. As previously reported, Verestar also instituted tighter credit and collection policies in May which have impacted revenue projections for the year. We believe Verestar management has taken appropriate steps to address these issues and as set forth in the attached revised outlook, we expect Verestar to return to positive Cash Flow status in the third quarter 2001 and beyond. We continue to be optimistic op·ti·mist n. 1. One who usually expects a favorable outcome. 2. A believer in philosophical optimism. op about its long-term prospects. "In addition, we now believe it is likely that we will record an impairment charge on our investment in US Wireless Corporation in the second quarter. The current book value of our investment is approximately $23 million. We continue to believe that the technology which US Wireless has developed and owns for both E-911 and telematics Originally coined to mean the convergence of telecommunications and information processing, the term later evolved to refer to automation in automobiles. GPS navigation, integrated hands-free cellphones, wireless communications and automatic driving assistance systems all come under the applications is well positioned to benefit from future deployments based on requirements for E-911 and demand for location based wireless services. While our ownership in US Wireless is in the form of preferred stock and we are the only preferred shareholder, US Wireless' public common equity valuation has dropped significantly, and the decline appears to be other than temporary. Accordingly, recognition of an impairment charge on the investment appears likely in our second quarter financial statements." American Tower will host a conference call today, June 21, 2001, at 1:00 p.m. Eastern to discuss these items. 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: 888-276-0010, international: 612-332-1210, no access codes required. A replay of the call will be available from 5:00 p.m. Eastern Thursday, June 21, 2001 until 11:59 p.m. Eastern Thursday June 28, 2001. The replay dial-in numbers are US: 800-475-6701, and international: 320-365-3844, access code 592699. 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 on the web site will be available shortly after the end of the call. American Tower is a 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. Giving effect to pending transactions, American Tower operates approximately 14,000 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, Brazil and Canada, including approximately 300 broadcast tower sites. Of the 14,000 sites, approximately 13,000 are owned or leased towers and approximately 1,000 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" relating to relating to relate prep → concernant relating to relate prep → bezüglich +gen, mit Bezug auf +acc projections, plans, objectives, future events or performance and underlying assumptions and other statements which are not statements of historical fact. 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. include the information regarding our outlook for the quarterly and full-year results of operations for 2001. These forward looking statements are subject to important factors that could cause actual results to differ materially from those indicated in our forward looking statements, 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; (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 mange mange (mānj), contagious skin disease of domestic and wild animals. The several types of mange, including follicular and sarcoptic mange, are caused by various minute parasitic mites that burrow into skin, hair follicles, or sweat glands. 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, 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, and has already 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 in our forward looking statements, we refer you to the information under the caption "Business - Factors That May Affect Future Results" in our Form 10-K Form 10-K A report required by the SEC from exchange-listed companies that provides for annual disclosure of certain financial information. Form 10-K See 10-K. for the year ended December 31, 2000, which we incorporate herein by reference. Forward looking statements represent management's current expectations and are inherently uncertain. We do not undertake any obligation to update forward looking statements made by us. American Tower Corporation June 21, 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 June 21, 2001. Company outlook is based on assumptions about 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 Operating expenses The amount paid for asset maintenance or the cost of doing business, excluding depreciation. Earnings are distributed after operating expenses are deducted. before depreciation and amortization, development expense, and corporate general and administrative expense. Segment cash flow for rental and management includes 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.
Q2 2001 Q3 2001 Q4 2001 Fiscal Year 2001
Outlook Outlook Outlook Outlook Ranges
Ranges Ranges Ranges
--------------------------------------------------
Rental and
Management Revenue $97 to 100 $111 to 114 $124 to 130 $423 to 435
Rental and Management
Cash Flow
(includes Interest
Income TV Azteca, net) 53 to 57 63 to 67 72 to 79 235 to 250
Services Revenue 98 to 118 115 to 140 105 to 130 425 to 495
Services Cash Flow 12 to 16 17 to 23 15 to 20 55 to 70
Satellite and Fiber
Network Access
Services Revenue 56 to 58 63 to 70 72 to 83 256 to 276
Satellite and Fiber
Network Access
Services Cash Flow (2) to (1) 2 to 7 6 to 15 15 to 30
Total Revenue 251 to 276 289 to 324 301 to 343 1,104 to 1,206
Total Cash Flow 63 to 72 82 to 97 93 to 114 305 to 350
EBITDA Excluding
Development Expense 58 to 66 76 to 92 87 to 108 283 to 328
EBITDA 56 to 65 74 to 91 85 to 107 274 to 322
Depreciation and
Amortization 107 to 105 116 to 114 127 to 125 445 to 439
Interest Expense,
Net of Interest
Income and Other(1) 91 to 87 76 to 72 81 to 77 307 to 295
Basic and Diluted
Net Loss Per
Common Share $(0.58)to $(0.52)to $(0.54)to $(2.03)to
(0.52) (0.42) (0.43) (1.77)
Capital expenditures for the year 2001 are expected to be between
$550 million and $670 million.
(1) Includes impairment charge on investment in US Wireless of
approximately $22 million.
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