<PAGE>
Rule 424(b)(3) of the Securities Act of 1933
Registration Statement 333-50111
PROSPECTUS SUPPLEMENT NO. 2, DATED AUGUST 14, 1998
(TO PROSPECTUS DATED JUNE 4, 1998)
AMERICAN TOWER CORPORATION
This Prospectus Supplement No. 2 supplements the Prospectus dated June 4,
1998 (the "Prospectus") of American Tower Corporation, formerly American Tower
Systems Corporation ("ATS" or the "Company"), with respect to the filing on
August 14, 1998, of its Form 10-Q for the fiscal quarter ending June 30, 1998,
which is attached hereto.
Any statement contained in the Prospectus as heretofore supplemented shall
be deemed to be modified or superseded to the extent that a statement
contained in the Form 10-Q modifies or supersedes such statement. Any such
statement so modified or superseded shall not be deemed, except as so modified
or superseded, to constitute a part of the Prospectus.
----------------
Prospectus Supplement No. 2, dated August 14, 1998
<PAGE>
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
- -------------------------------------------------------------------------------
FORM 10-Q
- -------------------------------------------------------------------------------
(Mark One):
X Quarterly report pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934. FOR THE QUARTERLY PERIOD ENDED JUNE 30, 1998.
Transition report pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934.
COMMISSION FILE NUMBER: 001-14195
AMERICAN TOWER CORPORATION
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
DELAWARE 65-0723837
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
116 HUNTINGTON AVENUE
BOSTON, MASSACHUSETTS 02116
(Address of principal executive offices)
TELEPHONE NUMBER (617) 375-7500
(Registrant's telephone number, including area code)
AMERICAN TOWER SYSTEMS CORPORATION
(Former name, if changed from last report)
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to
such filing requirements for the past 90 days:
Yes X No
<TABLE>
<CAPTION>
OUTSTANDING AT
CLASS OF COMMON STOCK JULY 31, 1998
- --------------------------------------------------------------------------------
<S> <C>
Class A Common Stock........................................ 94,581,466 shares
Class B Common Stock........................................ 9,177,126 shares
Class C Common Stock........................................ 3,295,518 shares
- --------------------------------------------------------------------------------
Total....................................................... 107,054,110 shares
</TABLE>
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
<PAGE>
AMERICAN TOWER CORPORATION
INDEX
<TABLE>
<CAPTION>
PAGE NO.
--------
PART I. FINANCIAL INFORMATION
<C> <S> <C>
ITEM 1. UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
Consolidated Balance Sheets
December 31, 1997 and June 30, 1998......................... 1
Consolidated Statements of Operations
Three and six months ended June 30, 1997 and 1998........... 2
Consolidated Statements of Cash Flows
Six months ended June 30, 1997 and 1998..................... 3
Notes to Unaudited Condensed Consolidated Financial State- 4
ments.......................................................
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS.................................. 12
PART II. OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS.......................................... 19
ITEM 2. CHANGES IN SECURITIES AND USE OF PROCEEDS.................. 19
ITEM 5. OTHER INFORMATION.......................................... 19
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K........................... 20
SIGNATURES................................................. 22
</TABLE>
<PAGE>
PART I. FINANCIAL INFORMATION.
ITEM 1. UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
AMERICAN TOWER CORPORATION AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(IN THOUSANDS, EXCEPT SHARE DATA)
<TABLE>
<CAPTION>
DECEMBER 31, JUNE 30,
1997 1998
------------ ----------
<S> <C> <C>
ASSETS
CURRENT ASSETS:
Cash and cash equivalents........................... $ 4,596 $ 63,716
Accounts receivable, net of allowance for doubtful
accounts of $125 and $661, respectively ........... 3,239 13,213
Unbilled receivables................................ 2,281
Prepaid and other current assets.................... 790 2,865
Deferred income taxes............................... 63 63
-------- ----------
Total current assets.............................. 8,688 82,138
-------- ----------
PROPERTY AND EQUIPMENT, net........................... 117,618 346,741
UNALLOCATED PURCHASE PRICE, net....................... 108,192 660,177
OTHER INTANGIBLE ASSETS, net.......................... 8,424 24,221
NOTE RECEIVABLE....................................... 10,700 4,100
DEPOSITS AND OTHER LONG-TERM ASSETS................... 1,735 2,850
DEFERRED INCOME TAXES................................. 17,474
-------- ----------
TOTAL................................................. $255,357 $1,137,701
======== ==========
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
Current portion of long-term debt................... $ 110 $ 1,125
Accounts payable.................................... 3,738 4,824
Accrued expenses.................................... 4,492 21,917
Accrued interest.................................... 914 633
Unearned income..................................... 1,752 5,912
Interim Preferred Stock, due within one year, $0.01
par value, 20,000,000 shares authorized, 300,000
shares issued and outstanding; liquidation prefer-
ence $1,000 per share plus accrued dividends of
$2,316 ............................................ 302,316
Due to CBS Corporation.............................. 44,827
-------- ----------
Total current liabilities......................... 11,006 381,554
-------- ----------
LONG-TERM DEBT........................................ 90,066 299,399
DEFERRED INCOME TAXES................................. 418
OTHER LONG-TERM LIABILITIES........................... 33 896
-------- ----------
Total long-term liabilities....................... 90,517 300,295
-------- ----------
MINORITY INTEREST IN SUBSIDIARIES..................... 626 605
-------- ----------
COMMITMENTS AND CONTINGENCIES
REDEEMABLE CLASS A COMMON STOCK:
$.01 par value, 720,000 shares issued and out-
standing; at estimated redemption value of $24
15/16 per share.................................. 17,955
-------- ----------
STOCKHOLDERS' EQUITY:
Preferred Stock; $0.01 par value; 20,000,000 shares
authorized; (See Interim Preferred Stock above for
300,000 shares issued and outstanding).............
Class A Common Stock; $.01 par value; 300,000,000
shares authorized; 29,667,883 and 65,993,264 shares
issued and outstanding, respectively............... 297 660
Class B Common Stock; $.01 par value; 50,000,000
shares authorized; 4,670,626 and 9,177,126 shares
issued and outstanding, respectively............... 47 92
Class C Common Stock; $.01 par value; 10,000,000
shares authorized; 1,295,518 and 3,295,518 shares
issued and outstanding, respectively............... 13 33
Additional paid-in capital.......................... 155,711 460,693
Accumulated deficit................................. (2,860) (24,186)
-------- ----------
Total stockholders' equity........................ 153,208 437,292
-------- ----------
TOTAL................................................. $255,357 $1,137,701
======== ==========
</TABLE>
See notes to unaudited condensed consolidated financial statements.
1
<PAGE>
AMERICAN TOWER CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(IN THOUSANDS, EXCEPT PER SHARE DATA)
<TABLE>
<CAPTION>
THREE MONTHS ENDED SIX MONTHS ENDED
JUNE 30, JUNE 30,
-------------------- ------------------
1997 1998 1997 1998
--------- ---------- -------- ---------
<S> <C> <C> <C> <C>
REVENUES:
Tower rental and management....... $ 1,566 $ 12,005 $ 2,931 $ 21,498
Site acquisition services......... 427 7,000 427 12,275
Video, voice and data
transmission..................... 4,004 7,146
Other............................. 22 73 23 89
-------- ---------- ------- ---------
Total operating revenues........ 2,015 23,082 3,381 41,008
-------- ---------- ------- ---------
OPERATING EXPENSES:
Operating expenses excluding
depreciation and amortization,
tower separation expenses and
corporate general and
administrative expenses:
Tower rental and management..... 604 5,430 1,142 10,330
Site acquisition services....... 167 6,191 167 10,734
Video, voice and data
transmission................... 2,717 4,769
Depreciation and amortization..... 818 9,953 1,323 15,755
Tower separation expenses......... 12,457 12,457
Corporate general and
administrative expense........... 261 1,084 540 1,626
-------- ---------- ------- ---------
Total operating expenses........ 1,850 37,832 3,172 55,671
-------- ---------- ------- ---------
INCOME (LOSS) FROM OPERATIONS....... 165 (14,750) 209 (14,663)
OTHER INCOME (EXPENSE):
Interest expense.................. (222) (7,472) (318) (9,902)
Interest income and other, net.... 32 966 57 1,831
Minority interest in net earnings
of subsidiaries.................. (81) (110) (161) (189)
-------- ---------- ------- ---------
TOTAL OTHER EXPENSE................. (271) (6,616) (422) (8,260)
-------- ---------- ------- ---------
LOSS BEFORE BENEFIT FOR INCOME TAXES
AND EXTRAORDINARY LOSS............. (106) (21,366) (213) (22,923)
INCOME TAX BENEFIT.................. 2,949 49 2,979
-------- ---------- ------- ---------
LOSS BEFORE EXTRAORDINARY LOSS...... (106) (18,417) (164) (19,944)
EXTRAORDINARY LOSS ON EXTINGUISHMENT
OF DEBT, NET OF INCOME TAX BENEFIT
OF $921............................ (1,382) (1,382)
-------- ---------- ------- ---------
NET LOSS............................ $ (106) $ (19,799) $ (164) $ (21,326)
======== ========== ======= =========
BASIC AND DILUTED PER COMMON SHARE
AMOUNTS:
Loss before extraordinary loss.... $ (0.00) $ (0.33) $ (0.00) $ (0.39)
Extraordinary loss................ (0.02) (0.03)
-------- ---------- ------- ---------
Net loss.......................... $ (0.00) $ (0.35) $ (0.00) $ (0.42)
======== ========== ======= =========
WEIGHTED AVERAGE COMMON SHARE AND
COMMON SHARE EQUIVALENTS
OUTSTANDING........................ 48,750 56,034 48,750 51,409
======== ========== ======= =========
</TABLE>
See notes to unaudited condensed consolidated financial statements.
2
<PAGE>
AMERICAN TOWER CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(IN THOUSANDS)
<TABLE>
<CAPTION>
SIX MONTHS ENDED
JUNE 30,
-------------------
1997 1998
-------- ---------
<S> <C> <C>
CASH FLOWS FROM (USED FOR) OPERATING ACTIVITIES........... $ 269 $ (8,734)
-------- ---------
CASH FLOWS FROM INVESTING ACTIVITIES:
Payments for purchase of property and equipment and
construction........................................... (3,635) (34,910)
Payments for intangible assets.......................... (852)
Payments for acquisitions............................... (19,547) (120,775)
Advances of notes receivable............................ (254) (9,100)
Repayment of notes receivable........................... 2,000
Deposits and other long-term assets..................... (19) (897)
-------- ---------
Cash used for investing activities........................ (23,455) (164,534)
-------- ---------
CASH FLOWS FROM FINANCING ACTIVITIES:
Borrowings under loan agreement......................... 19,000 205,500
Repayments of other notes payable....................... (307) (117,924)
Net proceeds from private placement equity offering and
stock options.......................................... 80,340
Cash transfers to CBS Corporation....................... (221,665)
Net proceeds from Interim Preferred Stock............... 300,000
Contributions from ARS.................................. 6,851 56,954
Cash transfers to ARS................................... (2,650) (51,856)
Distributions to minority interest...................... (210) (210)
Additions to deferred financing costs................... (18,751)
-------- ---------
Cash provided by financing activities..................... 22,684 232,388
-------- ---------
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS...... (502) 59,120
CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD............ 2,373 4,596
-------- ---------
CASH AND CASH EQUIVALENTS, END OF PERIOD.................. $ 1,871 $ 63,716
======== =========
NON-CASH TRANSACTIONS:
Contribution of fixed assets and other assets from ARS.. $ 6,488
Issuance of common stock for acquisitions............... $ 363,100
Increase in deferred tax assets from corporate
restructuring.......................................... $ 135,000
Increase in due to CBS Corporation from estimated
remaining tax liabilities.............................. $ 54,700
Adjustment to equity for CBS tax liability.............. $ 76,960
</TABLE>
See notes to unaudited condensed consolidated financial statements.
3
<PAGE>
AMERICAN TOWER CORPORATION AND SUBSIDIARIES
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
1. BASIS OF PRESENTATION
The accompanying financial statements have been prepared by American Tower
Corporation (ATC or the Company, formerly American Tower Systems Corporation
), without audit, pursuant to the rules and regulations of the Securities and
Exchange Commission. Although certain information and footnote disclosures
normally included in financial statements prepared in accordance with
generally accepted accounting principles have been condensed or omitted
pursuant to such rules and regulations, the Company believes that the
disclosures are adequate to make the information presented not misleading and
reflect all adjustments (consisting only of normal recurring adjustments) that
are necessary for a fair presentation of results of operations for such
periods. Results of interim periods may not be indicative of results for the
full year. These financial statements should be read in conjunction with the
consolidated financial statements for the year ended December 31, 1997 and the
notes thereto included in the Company's Form 10-K.
Accounting Policies--In June 1998, the Financial Accounting Standards Board
(FASB) issued Statement of Financial Accounting Standards (FAS) No. 133,
"Accounting for Derivative Instruments and Hedging Activities." FAS No. 133
establishes standards for accounting and reporting for derivative instruments,
and conforms the requirements for treatment of different types of hedging
activities. This statement is effective for all fiscal quarters of years
beginning after June 1999. The Company has not completed its evaluations of
FAS No. 133, but does not expect it to significantly affect the accounting and
reporting of its current hedging activities.
Comprehensive Income--Effective January 1, 1998, the Company adopted the
provisions of FAS No. 130, "Reporting Comprehensive Income." There are
currently no items other than net income which would be classified as part of
comprehensive income.
Tower Separation expenses--Tower separation expenses consist of costs
incurred in connection with the separation of the Company from its former
parent and include legal, accounting, financial advisory, and consent
solicitation fees.
Reclassifications--Certain reclassifications have been made to the 1997
financial statements to conform to the 1998 presentation.
2. BUSINESS AND CORPORATE STRUCTURE
ATC was a majority owned subsidiary of American Radio Systems Corporation
(ARS or American Radio) until consummation of the CBS Merger on June 4, 1998,
as discussed below. American Tower Systems (Delaware), Inc. (ATSI) is a
wholly-owned subsidiary of ATC and one of the operating subsidiaries of ATC.
American Tower Systems, L.P. (ATSLP) is an indirect wholly-owned subsidiary of
ATC, which conducts all of the business of ATC other than that conducted by
ATSI or by the subsidiaries acquired as a consequence of the ATC Merger. (See
Note 8). ATSI and ATSLP are collectively referred to as the Borrower
Subsidiaries.
CBS Merger: On June 4, 1998, the merger of American Radio and a subsidiary
of CBS Corporation (CBS) was consummated (the CBS Merger). As a consequence,
all of the shares of ATC owned by ARS were distributed to ARS common
stockholders and holders of options to acquire ARS Common Stock or have been
or will be distributed upon conversion of shares of ARS 7% Convertible
Exchangeable Preferred Stock (the Convertible Preferred Stock). As a
consequence of the CBS Merger, ATC ceased to be a subsidiary of, or to be
otherwise affiliated with, American Radio and now operates as an independent
publicly traded company. Pursuant to the provisions of the CBS Merger
Agreement, ATC entered into an agreement (the Separation Agreement) with CBS
and ARS providing for, among other things, the orderly separation of ARS and
ATC, the allocation of certain tax liabilities to ATC, certain closing date
adjustments relating to ARS, the lease to ARS by
4
<PAGE>
AMERICAN TOWER CORPORATION AND SUBSIDIARIES
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)
ATC of space on certain towers previously owned by ARS and transferred to ATC,
the lease of corporate office space, and certain indemnification obligations
(including with respect to securities law matters) of ATC.
The Separation Agreement required ATC to reimburse CBS on a "make-whole"
(after tax) basis for the tax liabilities incurred by ARS attributable to the
distribution of the Common Stock owned by ARS to the ARS security holders and
certain related transactions to the extent that the aggregate amount of taxes
required to be paid by ARS exceeded $20.0 million. The amount of that tax
liability was dependent on the "fair market value" of the Common Stock at the
time of the consummation of the CBS Merger. ATC received an appraisal from an
independent appraisal firm that the "fair market value" of ARS's stock
interest in ATC was equal to $17.25 per share. Based on such appraisal, ARS
paid estimated taxes of approximately $212.0 million and was reimbursed
therefore by ATC. As required by the Separation Agreement, ATC provided CBS
with security of $9.8 million in cash (which may be replaced at ATC's option
with a letter of credit reasonably satisfactory to CBS) in connection with the
filing of estimated tax returns based on such appraisal. Such appraisal is
not, of course, binding on the Internal Revenue Service or other taxing
authorities. The Company financed its tax reimbursement obligations to CBS
with the Interim Preferred Stock proceeds discussed in Note 6. The $212.0
million payment also included estimated payments for the "make-whole"
provisions of the liability associated with the conversion of the Convertible
Preferred Stock and the working capital adjustment described below. Such taxes
gave effect to estimated deductions of approximately $85.1 million available
to ARS as a consequence of the cancellation or exercise of ARS stock options
pursuant to the CBS Merger. ATC's reimbursement obligation with respect to
such taxes would change by approximately $21.0 million for each $1.00 change
in the "fair market value" of the Class A Common Stock under the tax reporting
method followed. The average of the high and low trading prices of the Class A
Common Stock in the when-issued over-the-counter market on June 4, 1998 was
$20.50.
The $212.0 million payment did not include all the taxes payable with
respect to the shares of Class A Common Stock deliverable upon conversion of
the Convertible Preferred Stock; such taxes will be based on the "fair market
value" of the Class A Common Stock at the time of conversion. Conversions have
occurred at various times since June 4, 1998. As of the date hereof, holders
of Depositary Shares representing approximately 43% of the Convertible
Preferred Stock have converted or have presented for conversion. ATC has
recorded a liability of approximately $4.7 million due to CBS associated with
these conversions and estimates that its remaining reimbursement obligation
with respect to the taxes on the remaining Convertible Preferred Stock will be
approximately $13.5 million under the tax reporting method followed. Such
estimate is based on the August 10, 1998 fair market value of the Class A
Common Stock of $23.25 per share. ATC's obligation for such conversions would
change by approximately $1.2 million for each $1.00 change in the fair market
value.
ARS has agreed that it will pursue, for the benefit of and at the cost of
ATC, a refund claim, attributable to the "make-whole" provision, estimated at
between $40.0 million to $45.0 million, based on the appraised "fair market
value" and the estimated taxes attributable to conversions of the Convertible
Preferred Stock set forth above. Any such refund claim will, in fact, be based
on the actual amount of taxes paid. In light of existing tax law, there can,
of course, be no assurance that any such refund claim will be successful.
The Separation Agreement provides for closing date balance sheet adjustments
based upon the working capital, as defined, and debt levels of ARS. ATC will
benefit from or bear the cost of such adjustments. ATC's preliminary estimate
of such adjustments is that it will be required to make a payment of not more
than $50.0 million and that, in addition, it will be required to reimburse CBS
for the tax consequences of any such payment. The estimated taxes and refund
amount stated above include such tax reimbursement amount. Since the amounts
of working capital and debt are dependent upon the uncertainty, among other
things, of recent operating results and cash capital contributions, as well as
CBS Merger expenses, the ultimate payment will differ from the estimate
provided herein and ATC is unable to state definitively what payments will be
owed by ATC to CBS. Based on the above estimates, ATC has recorded a $50.0
million liability due to CBS and corresponding reduction in equity to reflect
management's estimate at this time.
5
<PAGE>
AMERICAN TOWER CORPORATION AND SUBSIDIARIES
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)
In connection with an inter-corporate taxable transfer of assets entered
into in January 1998 by ATC in contemplation of the separation of ATC and ARS,
a portion of the tax with respect to which ATC is obligated to indemnify CBS
was incurred. Such transfer resulted in an increase in the tax bases of ATC's
assets of approximately $366.5 million. ATC will have potential depreciation
and amortization deductions over the next 15 years of $24.4 million per year
resulting in a deferred tax asset of approximately $135.0 million.
3. LOSS PER COMMON SHARE DATA
Basic loss per common share is computed using the weighted average number of
common shares outstanding during each 1998 period presented or outstanding
upon consummation of the CBS Merger during each 1997 period presented. Shares
issuable upon exercise of options have been excluded from the computation as
the effect is anti-diliutive. Had options been included in the computation,
shares for the diluted computation would have increased by approximately 4.3
million and 4.4 million for the three and six months ended June 30, 1998,
respectively. As described in Note 11, the Company issued approximately 27.9
million shares of Class A Common Stock in July 1998, which would materially
impact the per share data.
4. INCOME TAXES
The Company provides for income taxes at the end of each interim period
based on the estimated effective tax rate for the full fiscal year for each
tax reporting corporate entity. Cumulative adjustments to the tax benefit
(provision) are recorded in the interim period in which a change in the
estimated annual effective rate is determined. Through January 1998, the
Company participated in a tax sharing agreement with ARS. The tax sharing
agreement was terminated in connection with the corporate restructuring
described in Note 2; the Company and its subsidiaries will now prepare and
file income tax returns on a separate consolidated basis.
5. UNALLOCATED PURCHASE PRICE
The excess of purchase price over the estimated fair value of net assets
acquired has been preliminarily recorded as unallocated purchase price and is
being amortized over an estimated aggregate useful life of fifteen years using
the straight-line method. The consolidated financial statements reflect the
preliminary allocation of certain purchase prices as the appraisals for some
acquisitions have not yet been finalized. The Company is currently conducting
studies to determine the purchase price allocations and expects that upon
final allocation, the average estimated useful life will approximate fifteen
years. The final allocation of purchase price is not expected to have a
material effect on the Company's consolidated results of operations, liquidity
or financial position.
6. STOCKHOLDERS' EQUITY
Interim Preferred Stock Financing--On June 4, 1998, the Company entered into
a stock purchase agreement (the Interim Financing Agreement) with respect to a
preferred stock financing which provided for the issuance and sale by ATC of
up to $400.0 million of Series A Redeemable Pay-In-Kind Preferred Stock (the
Interim Preferred Stock) to finance ATC's obligation to CBS with respect to
tax reimbursement. Pursuant to the Interim Financing Agreement, ATC issued
$300.0 million of Interim Preferred Stock and used the proceeds to fund its
tax reimbursement obligation to CBS, pay the commitment and other fees and
expenses of the issue and sale of such stock and to reduce bank borrowings.
The Interim Financing Agreement required that, to the extent the Interim
Preferred Stock had not been redeemed by June 1999, an exchange for a new
series of preferred stock would have taken place.
Due to its short-term nature, the Interim Preferred Stock obligation has
been classified as a short-term liability. Dividends, which accrued at a rate
equal to the three-month LIBOR then in effect (approximately 5.69%) plus an
agreed upon adjustable spread (5.0% for the period in which the obligation was
outstanding), have been recorded as interest expense in the accompanying
financial statements.
6
<PAGE>
AMERICAN TOWER CORPORATION AND SUBSIDIARIES
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)
As discussed in Note 11, the Interim Preferred Stock was redeemed on July 9,
1998 at a redemption price equal to $1,010 per share plus accrued and unpaid
dividends for an aggregate redemption value of $306.1 million. The Company
incurred an extraordinary loss of approximately $7.4 million, net of a tax
benefit of $4.9 million, during the third quarter of 1998, representing the
write-off of certain commitment, deferred financing and redemption fees.
ATC Stock Purchase Agreement--On January 22, 1998, the Company consummated
the transactions contemplated by the stock purchase agreement (the ATC Stock
Purchase Agreement), dated as of January 8, 1998, with Steven B. Dodge,
Chairman of the Board, President and Chief Executive Officer of ARS and ATC,
and certain other officers and directors of ARS and ATC (or their affiliates
or family members or family trusts), pursuant to which those persons purchased
8.0 million shares of ATC Common Stock at a purchase price of $10.00 per share
for an aggregate purchase price of $80.0 million, including 4.0 million shares
by Mr. Dodge for $40.0 million. Payment of the purchase price was in the form
of cash aggregating approximately $30.6 million and in the form of notes
aggregating approximately $49.4 million which were repaid, including accrued
interest, upon consummation of the CBS Merger on June 4, 1998.
7. LONG-TERM DEBT
New Credit Facilities--In June 1998, ATC and the Borrower Subsidiaries
entered into definitive agreements with respect to new credit facilities (the
New Credit Facilities). The New Credit Facilities with ATC provide for a
$150.0 million term loan maturing at the earlier of (i) eight and one-half
years or (ii) December 31, 2006, amortizing quarterly in an amount equal to
2.5% of the principal amount outstanding at June 30, 2001 at the end of each
quarter between such date and June 30, 2006, both inclusive, and the balance
in two equal installments on September 30 and December 31, 2006. The ATC New
Credit Facility was fully drawn at closing and provides for interest rates
determined, at the option of ATC, of either the LIBOR Rate (as to be defined)
plus 3.50% or the Base Rate (as to be defined) plus 2.5%. The New Credit
Facilities with the Borrower Subsidiaries provide for $900.0 million credit
facilities maturing at the earlier of (a) eight years or (b) June 30, 2006
consisting of the following: (i) a $250.0 million multiple-draw term loan,
(ii) a $400.0 million reducing revolving credit facility and (iii) a $250.0
million 364-day revolving credit facility that converts to a term loan
facility thereafter. The Borrower Subsidiaries borrowed $125.0 million in the
form of a term loan and an additional $19.0 million under the revolving credit
arrangements that was repaid out of the proceeds of the Interim Preferred
Stock sale. The interest rate provisions are similar to those in the prior
credit agreement, except that the range over the Base Rate is between 0.00%
and 1.250% and the range over the LIBOR Rate is between 0.750% and 2.250%.
Borrowings under the Borrower Subsidiaries' New Credit Facilities are
conditioned upon compliance with certain financial ratios and are required to
be repaid, commencing June 30, 2001, in increasing quarterly amounts designed
to amortize the loans through maturity. The loans to ATC and the Borrower
Subsidiaries are cross-guaranteed and cross-collateralized by substantially
all of the assets of the consolidated group. The Borrower Subsidiaries are
required to pay quarterly commitment fees equal to 0.375% or 0.250% per annum,
depending on their consolidated financial leverage, on the aggregate unused
portion of the aggregate commitment (other than, until take down, the 364-day
facility on which it is 0.125% until so taken down). Other provisions of the
Borrower Subsidiaries' New Credit Facilities are comparable to the prior
credit agreement, although the financial and other covenants are somewhat more
favorable to the Borrower Subsidiaries in certain respects, including an
increase of the Total Debt (of the Borrower Subsidiaries and their Restricted
Subsidiaries) to Annualized Operating Cash Flow ratio from 6.0:1 to 6.5:1 and
the inclusion of a Total Debt (of ATC and its Restricted Subsidiaries) to
Annualized Operating Cash Flow ratio of 8.0:1. The New Credit Facility of ATC
restricts the payment of cash dividends and other distributions and the
redemption, purchase or other acquisition of equity securities. In connection
with the repayment of borrowings under the prior credit agreement out of
proceeds of borrowings under the New Credit Facilities, ATC recognized an
extraordinary loss of approximately $1.4 million, net of a tax benefit of $0.9
million, during the second quarter of 1998.
7
<PAGE>
AMERICAN TOWER CORPORATION AND SUBSIDIARIES
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)
Assumed Debt Obligations--In connection with the ATC Merger discussed in
Note 8, the Company assumed certain long-term note obligations of the acquired
entity including a term note payable that was paid at closing, a $4.4 million
noninterest-bearing secured note payable, due in annual installments through
December 2000, a $430,000 noninterest-bearing unsecured note payable, maturing
in October 1999 and other long-term obligations totaling approximately
$34,000.
8. ACQUISITIONS
During the first six months of 1998 and 1997, the Company consummated the
following transactions. See the Form 10-K for additional information on these
transactions.
General: The following acquisitions have all been accounted for by the
purchase method of accounting, and, accordingly, the operating results of the
acquired entities have been included in consolidated operating results since
the date of acquisition. The purchase prices have been allocated to the assets
acquired, principally intangible assets, and the liabilities assumed based on
their estimated fair values at the dates of acquisition. The excess of
purchase price over the estimated fair value of the net assets acquired has
been recorded as unallocated purchase price. The financial statements reflect
the preliminary allocation of certain purchase prices as the appraisals for
certain acquisitions have not yet been finalized. The Company does not expect
the final appraisals to have a material effect on the financial position,
results of operations or liquidity of the Company.
1998 Acquisitions--
In January 1998, the Company acquired all of the outstanding stock of Gearon
& Co. Inc. (Gearon), a company based in Atlanta, Georgia, for an aggregate
purchase price of approximately $80.0 million. The purchase price consisted of
approximately $32.0 million in cash and assumed liabilities and the issuance
of approximately 5.3 million shares of Class A Common Stock. Gearon is engaged
in site acquisition, development, construction and facility management of
wireless network communication facilities on behalf of its customers and owned
or had at the time of acquisition under construction approximately 40 tower
sites. Following consummation, the Company granted options to acquire up to
1,400,000 shares of Class A Common Stock at an exercise price of $13.00 to
employees of Gearon.
In January 1998, the Company acquired all of the outstanding stock of OPM-
USA-Inc. (OPM), a company which owned approximately 90 towers at the time of
acquisition. In addition, OPM is in the process of developing an additional
160 towers that are expected to be constructed during the next 12 to 18
months. The purchase price, which is variable and based on the number of
towers completed and the forward cash flow of the completed OPM towers, could
aggregate up to $105.0 million, of which approximately $21.3 million was paid
at the closing. The Company had also agreed to provide the financing to OPM to
enable it to construct the 160 towers in an aggregate amount not to exceed
$37.0 million (less advances as of consummation aggregating approximately $5.7
million, excluding accrued interest). In May 1998, the Company paid the second
installment of approximately $18.2 million which was based on the number of
towers permitted and completed and the forward cash flow of the completed
towers as of April 30, 1998.
In January 1998, the Company consummated the acquisition of a communications
site with six towers in Tucson, Arizona for approximately $12.3 million and
the acquisition of a tower near Palm Springs, California for approximately
$0.75 million.
In February 1998, the Company acquired 11 communications tower sites in
northern California for approximately $11.8 million.
In March 1998, the Company acquired a tower in Sacramento, California for
approximately $1.2 million.
8
<PAGE>
AMERICAN TOWER CORPORATION AND SUBSIDIARIES
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)
In April 1998, the Company acquired a tower site in Pennsylvania for
approximately $0.15 million.
In May 1998, the Company consummated the acquisition of the assets relating
to a teleport business serving the Washington D.C. area for approximately
$30.5 million.
On June 8, 1998, the Company consummated the American Tower Corporation
Merger (ATC Merger) pursuant to which that entity was merged into ATC for an
aggregate preliminary purchase price of approximately $550.0 million. At the
time of closing, the acquired company owned approximately 775 communications
towers and managed approximately 125 communications towers. In conjunction
with the ATC Merger, the Company issued 28,782,386 shares of Class A Common
Stock valued at approximately $287.8 million (excluding 1,252,364 shares of
Common Stock reserved for options held by former employees of the acquired
company valued at approximately $9.7 million) and assumed approximately $4.5
million of redeemable preferred stock (which was paid at closing) and
$122.7 million of debt (of which approximately $118.3 million, including
interest and associated fees, was paid at closing). The purchase price also
includes acquisition costs, assumed working capital and deferred income taxes.
The Company borrowed $57.0 million under the then existing credit agreements
to fund a portion of the debt pay-off. Upon consummation of the ATC Merger,
the Company changed its name from American Tower Systems Corporation to
American Tower Corporation.
In June 1998, the Company merged with a company owning a broadcasting tower
in the Boston, Massachusetts area and issued 720,000 shares of Class A Common
Stock to close the transaction. In connection with this transaction, ATC
acquired a $12.0 million note receivable and issued a corresponding
nonrecourse note payable which is payable only to the extent that payments on
the note receivable are made to ATC. As such, the amounts have been offset in
the accompanying financial statements. In addition, under a put agreement that
was consummated in connection with the merger, the sellers have the right to
require the Company to purchase, at any time prior to June 5, 1999, any or all
shares of ATC Class A Common Stock received pursuant to consummation of the
merger for a purchase price equal to the then current market price.
Accordingly, the 720,000 shares have been recorded as redeemable common stock
in the accompanying financial statements based on the June 30, 1998 fair
market value of $24 15/16. In connection with the public offering described in
Note 11, the sellers sold 383,750 of the 720,000 shares in July 1998 reducing
the Company's overall redemption obligation.
In June 1998, ATC acquired four communication sites in Texas for a purchase
price of approximately $0.82 million, two communication sites in California
for approximately $1.7 million and a tower site in South Carolina for
approximately $1.1 million.
1997 Acquisitions--
In May 1997, the Company acquired the following:
(i) 21 tower sites and a tower site management business in Georgia, North
Carolina and South Carolina for approximately $5.4 million;
(ii) the assets of two affiliated companies engaged in the site acquisition
business in various locations in the United States for approximately $13.0
million; and
(iii) three tower sites in Massachusetts for approximately $0.26 million.
In May 1997, the Company and an unaffiliated party formed a limited
liability company (ATS/PCS, LLC, formerly Communications Systems Development,
LLC) to own and operate communication towers which will be constructed on over
50 tower sites in northern California. The Company advanced approximately $0.8
million to this entity and currently owns a 70% interest in the entity, with
the remaining 30% owned by an unaffiliated party. The accounts of the limited
liability company are included in the consolidated financial statements with
the other party's investment reflected as minority interest in subsidiary.
(See Note 10).
9
<PAGE>
AMERICAN TOWER CORPORATION AND SUBSIDIARIES
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)
The following unaudited pro forma summary for the six months ended June 30,
1997 and 1998 presents the consolidated results of operations as if the
acquisitions had occurred as of January 1, 1997 after giving effect to certain
adjustments, including depreciation and amortization of assets and interest
expense on any debt incurred to fund the acquisitions. These unaudited pro
forma results have been prepared for comparative purposes only and do not
purport to be indicative of what would have occurred had the acquisitions been
made as of January 1, 1997 or of results which may occur in the future.
In thousands, except per share data:
<TABLE>
<CAPTION>
SIX MONTHS ENDED SIX MONTHS ENDED
JUNE 30, 1997 JUNE 30, 1998
---------------- ----------------
<S> <C> <C>
Net revenues............................. $ 52,205 $ 57,559
Loss before extraordinary item........... (20,918) (31,695)
Net loss................................. (20,918) (33,077)
Basic and diluted net loss per common
share................................... $ (0.27) $ (0.42)
</TABLE>
9. RELATED PARTY TRANSACTIONS
While the Company was a majority owned subsidiary of ARS prior to the CBS
Merger discussed in Note 2, it received revenues of approximately $98,000,
$226,000, $179,000 and $565,000 from ARS for tower rentals at Company-owned
sites for the three months ended June 30, 1997 and 1998 and the six months
ended June 30, 1997 and 1998, respectively.
In January 1998, ARS contributed to ATC 14 communications sites used by ARS
and various third parties (with an ARS aggregate net book value of
approximately $4.7 million), and ARS and ATC entered into leases or subleases
of space on the transferred towers. In May 1998, two additional communications
sites were transferred and leases entered into following acquisition by ARS of
the sites from third parties. These sites were contributed to ATC at an
aggregate ARS net book value of approximately $0.3 million.
In June 1998, ARS contributed the majority of its corporate fixed assets to
ATC (with an ARS net book value of approximately $1.4 million).
In conjunction with the ATC Merger discussed in Note 8, the Company assumed
consulting agreements with three shareholders. Management payments under these
agreements totaled approximately $25,000 for the three and six-month periods
ended June 30, 1998. The Company is obligated to make additional payments of
$150,000 in 1998 and $263,000 in 1999.
Also in conjunction with the ATC Merger, the Company assumed land leases for
certain tower sites that are with an entity owned by a shareholder. The same
shareholder is the president of a tower fabrication and construction company.
Following consummation of the ATC Merger, the Company made payments of
approximately $526,000 to this entity for the three and six-month periods
ended June 30, 1998.
See Note 6 for a description of the ATC Stock Purchase Agreement.
10. PENDING TRANSACTIONS
ATC is negotiating certain changes in the ATS/PCS, LLC arrangements,
including the acquisition by ATS of the 58 communications sites in northern
California presently owned by ATS/PCS, LLC in exchange for shares of Class A
Common Stock, arrangements with respect to the development of communications
sites in other locations, a priority return of ATC's construction advances, an
increase in the percentage interest of the other member in ATS/PCS, LLC, and a
management fee to ATC.
10
<PAGE>
AMERICAN TOWER CORPORATION AND SUBSIDIARIES
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)
In June 1998, ATC entered into an agreement to acquire a company which is in
the process of constructing approximately 40 towers in the Tampa, Florida
area, of which seven are presently operational. The purchase price will be
equal to the excess of (i) ten times the "Current Run Rate Cash Flow" at the
time of closing, over (ii) the principal amount of the secured note referred
to below. The purchase price will be payable in shares of Class A Common Stock
(valued at market prices shortly prior to closing) and, at the election of the
seller, cash in an amount not to exceed 49% of the purchase price. "Current
Run Rate Cash Flow" means twelve (12) times the excess of net revenues over
direct operating expenses for the month preceding closing. ATC is obligated to
advance construction funds to the seller in an aggregate amount not to exceed
$12.0 million in the form of a secured note (guaranteed by the stockholders on
a nonrecourse basis and secured by the stock of the seller), of which
approximately $4.1 million was advanced through June 30, 1998. The secured
note would be payable in the event the acquisition was not consummated.
Subject to the satisfaction of certain conditions, including, depending on the
circumstances, the expiration or earlier termination of the HSR Act waiting
period, the acquisition is expected to be consummated in the Spring of 1999.
The Company is also pursuing the acquisitions of tower properties and tower
businesses in new and existing locations, although there are no definitive
purchase agreements with respect thereto.
11. SUBSEQUENT EVENTS
On July 8, 1998, the Company completed a public offering of 27,861,987
shares of Class A Common Stock, $.01 par value per share (the Class A Common
Stock) (including 2,361,987 shares sold by the Company pursuant to the
exercise in full of the underwriters' over-allotment option) at $23.50 per
share. Certain selling stockholders sold an additional 3,874,911 shares in the
offering. Credit Suisse First Boston Corporation, BT Alex. Brown Incorporated,
Lehman Brothers Inc., Morgan Stanley & Co. Incorporated, Bear, Stearns & Co.
Inc., Merrill Lynch Pierce Fenner & Smith Incorporated and Smith Barney Inc.
were the underwriters of the Class A Common Stock. The Company's net proceeds
of the offering (after deduction of the underwriting discount and estimated
offering expenses) were approximately $625.4 million. On July 9, 1998, the
Company used approximately $306.1 million of the net proceeds from the
offering to redeem all of the outstanding shares of the Interim Preferred
Stock at a price of 101% of the stock's liquidation preference plus accrued
and unpaid dividends. The balance was invested in short-term investment grade
securities and will be used, together with borrowings under the New Credit
Facilities, to fund future acquisitions and construction activities. In
connection with the redemption of the Interim Preferred Stock, the Company
incurred an extraordinary loss of approximately $7.4 million, net of a tax
benefit of $4.9 million, during the third quarter of 1998.
In July 1998, the Company acquired a microwave communication site in
southern California for approximately $80,000, ten tower sites in southern
Texas for approximately $6.3 million and three tower sites in Louisiana for
approximately $0.75 million.
In July 1998, under an agreement assumed pursuant to the ATC Merger, the
Company acquired a tower site in Massachusetts for approximately $0.6 million.
The agreement also requires the Company to purchase an additional tower site
upon completion of its construction and tenant installation at a purchase
price that is based on a multiple of the tower site's contractual revenue.
In August 1998, the Company acquired two towers in the metropolitan area of
Atlanta, Georgia for a purchase price of approximately $0.4 million.
11
<PAGE>
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
GENERAL
This discussion contains "forward-looking statements" including statements
concerning projections, plans, objectives, future events or performance and
underlying assumptions and other statements which are other than statements of
historical fact. ATC wishes to caution readers that certain important factors
may have affected and could in the future affect ATC's actual results and
could cause ATC's actual results for subsequent periods to differ materially
from those expressed in any forward-looking statement made by or on behalf of
ATC. Such factors include (i) substantial capital requirements and leverage
principally as a consequence of its ongoing acquisition and construction
activities, as well as its remaining tax reimbursement and other obligations
owed to ARS pursuant to the CBS Merger, (ii) dependence on demand for wireless
communications and implementation of digital television, and (iii) the success
of ATC's new tower construction program. The following discussion should be
read in conjunction with the Company's Unaudited Condensed Consolidated
Financial Statements and the notes thereto. As ATC was a wholly-owned
subsidiary of American Radio during the periods presented through June 4,
1998, the consolidated financial statements may not reflect the results of
operations or financial position of ATC had it been an independent, public
company during those periods. Because of ATC's relatively brief operating
history and the large number of recent acquisitions, the following discussion,
which relates solely to ATC on a historical basis and does not include
acquired companies, while presented to satisfy certain disclosure requirements
of the Securities and Exchange Commission, will not necessarily reveal any
significant developing or continuing trends.
ATC was formed in July 1995 to capitalize on the opportunity in the
communications site industry. ATC is a leading independent owner and operator
of wireless communications towers in the United States. During 1997, its
acquisition and construction activity accelerated and ATC acquired or
constructed approximately 400 sites (and related site management businesses)
and its initial site acquisition and voice, video and data transmission
businesses. Since January 1, 1998, ATC has acquired approximately 930
communication sites and a major site acquisition business for an aggregate
purchase price of approximately $748.0 million, including the issuance of
approximately 34.9 million shares of Class A Common Stock.
Management expects that acquisitions consummated to date will have a
material impact on future revenues, expenses and income from continuing
operations. In addition, the impact of the construction program of ATC is not
reflected to any significant extent in the historical financial information
because most of that activity is of more recent origin and is expected to
accelerate substantially during 1998. Management believes that readers should
be aware of the dramatic changes in the nature and scope of ATC's business in
reviewing the ensuing discussion of comparative historical results.
12
<PAGE>
RESULTS OF OPERATIONS
As of June 30, 1998, ATC operated approximately 1,800 communications sites,
principally in the Northeast and Mid-Atlantic regions, Florida, California and
Texas. As of June 30, 1997, ATC operated approximately 300 communications
sites, principally in the Northeast and Mid-Atlantic regions and Florida. See
the Notes to the Unaudited Condensed Consolidated Financial Statements for a
description of the acquisitions consummated during the six month periods ended
June 30, 1997 and 1998. These transactions have significantly affected
operations for the three and six months ended June 30, 1998 as compared to the
three and six months ended June 30, 1997.
THREE MONTHS ENDED JUNE 30, 1997 AND 1998 (DOLLARS IN THOUSANDS)
<TABLE>
<CAPTION>
THREE MONTHS ENDED
JUNE 30, AMOUNT OF PERCENTAGE
-------------------- INCREASE INCREASE
1997 1998 (DECREASE) (DECREASE)
--------- ---------- ---------- ----------
<S> <C> <C> <C> <C>
Tower rental and management reve-
nues.............................. $ 1,566 $ 12,005 $ 10,439 666.6%
Site acquisition service revenues.. 427 7,000 6,573 1,539.3%
Video, voice and data transmission
revenues.......................... 4,004 4,004
Other.............................. 22 73 51 231.8%
-------- ---------- -------- --------
Total operating revenues........... 2,015 23,082 21,067 1,045.5%
-------- ---------- -------- --------
Tower rental and management ex-
penses............................ 604 5,430 4,826 799.0%
Site acquisition service expenses.. 167 6,191 6,024 3,607.2%
Video, voice and data transmission
expenses.......................... 2,717 2,717
-------- ---------- -------- --------
Operating expenses excluding depre-
ciation and amortization, tower
separation and corporate general
and administrative expenses....... 771 14,338 13,567 1,759.7%
-------- ---------- -------- --------
Depreciation and amortization...... 818 9,953 9,135 1,116.7%
Tower separation expenses.......... 12,457 12,457
Corporate general and administra-
tive expenses..................... 261 1,084 823 315.3%
Interest expense, net.............. 190 6,506 6,316 3,324.2%
Minority interest in net earnings
(loss) of subsidiaries............ 81 110 29 35.8%
Income tax benefit................. 2,949 2,949
Extraordinary loss on extinguish-
ment of debt...................... 1,382 1,382
-------- ---------- -------- --------
Net loss........................... $ (106) $ (19,799) $(19,693) 18,578.3%
======== ========== ======== ========
</TABLE>
As noted above, ATC consummated numerous acquisitions in 1997 and 1998, many
of which were of a material size. Except as explained below, substantially all
of the increases indicated in the above table were attributable to the impact
of these communications sites and related business acquisitions, principally
those that occurred in 1997 and 1998. Site acquisition service revenues and
expenses for the three months ended June 30, 1998 include the operating
results of the Gearon site acquisition division that was acquired in January
1998 and, to a lesser extent, the operating results of two similar businesses
that were acquired in May 1997. For the three months ended June 30, 1997, site
acquisition service revenues and expenses included approximately two months of
operating results from the May 1997 related business acquisitions. Video,
voice and data transmission revenues and expenses for the three months ended
June 30, 1998 include the operating results of the Company's first video,
voice and data transmission business acquired in October 1997 and, to a lesser
extent, a Washington D.C. area teleport business acquired in May 1998. The
increase in depreciation and amortization is primarily attributable to the
increase in depreciable and amortizable assets resulting from the 1997 and
1998 acquisitions, and, to a lesser extent, completed construction projects.
Tower separation expenses relate to financial advisory, legal, accounting and
consent solicitation fees and other expenses incurred in connection with the
consummation of the CBS Merger and the separation of ATC from its former
parent on June 4, 1998. The increase in corporate
13
<PAGE>
general and administrative expense is primarily attributable to the higher
personnel costs associated with supporting ATC's greater number of tower
properties and growth strategy. The increase in interest expense, net, relates
to higher borrowing levels that were used to finance 1997 and 1998
acquisitions and $2.3 million of dividends associated with the Interim
Preferred Stock financing that occurred in June 1998. The minority interest in
net earnings of subsidiaries represents the elimination of the minority
stockholders' earnings of consolidated subsidiaries. The extraordinary loss
was incurred, net of an income tax benefit of $0.9 million, as a result of the
write-off of deferred financing costs associated with the Company's previous
credit agreements which were refinanced in June 1998. The effective tax rate
benefit for the three months ended June 30, 1998 was approximately 13.8% as
compared to 0% for the three months ended June 30, 1997. The effective rate
benefit in 1998 is due to the effect of non-deductible items, principally
amortization of goodwill, on certain stock acquisitions for which no tax
benefit was recorded.
SIX MONTHS ENDED JUNE 30, 1997 AND 1998 (DOLLARS IN THOUSANDS)
<TABLE>
<CAPTION>
SIX MONTHS ENDED
JUNE 30, AMOUNT OF PERCENTAGE
------------------ INCREASE INCREASE
1997 1998 (DECREASE) (DECREASE)
-------- --------- ---------- ----------
<S> <C> <C> <C> <C>
Tower rental and management reve-
nues................................ $ 2,931 $ 21,498 $ 18,567 633.5%
Site acquisition service revenues.... 427 12,275 11,848 2,774.7%
Video, voice and data transmission
revenues............................ 7,146 7,146
Other................................ 23 89 66 287.0%
------- --------- -------- --------
Total operating revenues............. 3,381 41,008 37,627 1,112.9%
------- --------- -------- --------
Tower rental and management ex-
penses.............................. 1,142 10,330 9,188 804.6%
Site acquisition service expenses.... 167 10,734 10,567 6,327.5%
Video, voice and data transmission
expenses............................ 4,769 4,769
------- --------- -------- --------
Operating expenses excluding
depreciation and amortization, tower
separation and corporate general and
administrative expenses............. 1,309 25,833 24,524 1,873.5%
------- --------- -------- --------
Depreciation and amortization........ 1,323 15,755 14,432 1,090.9%
Tower separation expenses............ 12,457 12,457
Corporate general and administrative
expenses............................ 540 1,626 1,086 201.1%
Interest expense, net................ 261 8,071 7,810 2,992.3%
Minority interest in net earnings
(loss) of subsidiaries.............. 161 189 28 17.4%
Income tax benefit................... 49 2,979 2,930 5,979.6%
Extraordinary loss on extinguishment
of debt............................. 1,382 1,382
------- --------- -------- --------
Net loss............................. $ (164) $ (21,326) $(21,162) 12,903.7%
======= ========= ======== ========
</TABLE>
As noted above, ATS consummated numerous acquisitions in 1997 and 1998, many
of which were of a material size. Except as explained below, substantially all
of the increases indicated in the above table were attributable to the impact
of these communications sites and related business acquisitions, principally
those that occurred in 1997 and 1998. The increase in depreciation and
amortization is primarily attributable to the increase in depreciable and
amortizable assets resulting from the 1997 and 1998 acquisitions, and, to a
lesser extent, completed construction projects. Tower separation expenses
relate to financial advisory, legal, accounting and consent solicitation fees
and other expenses incurred in connection with the consummation of the CBS
Merger and the separation of ATC from its former parent on June 4, 1998. The
increase in corporate general and administrative expenses is primarily
attributable to the higher personnel costs associated with supporting ATS's
greater number of tower properties and growth strategy. The increase in
interest expense, net, relates to higher borrowing levels that were used to
finance 1997 and 1998 acquisitions, and $2.3 million of dividends associated
with the Interim Preferred Stock financing that occurred in June 1998. The
minority interest in net earnings of subsidiaries represents the elimination
of the minority stockholders' earnings of consolidated subsidiaries. The
14
<PAGE>
extraordinary loss was incurred, net of an income tax benefit of $0.9 million,
as a result of the write-off of deferred financing costs associated with the
Company's previous credit agreements which were refinanced in June 1998. The
effective tax rate benefit for the six months ended June 30, 1998 was
approximately 13% as compared to 23% for the six months ended June 30, 1997.
The effective rate benefit in 1998 is due to the effect of non-deductible
items, principally amortization of goodwill, on certain stock acquisitions for
which no tax benefit was recorded.
LIQUIDITY AND CAPITAL RESOURCES
ATC's liquidity needs arise from its acquisition-related activities, debt
service, working capital and capital expenditures principally those associated
with its construction program. Historically, ATC has met its operational
liquidity needs with internally generated funds and has financed the
acquisition of tower related properties, including related working capital
needs, with a combination of contributions from American Radio and bank
borrowings. For the six months ended June 30, 1998, cash flows used for
operating activities were $8.7 million, as compared to $.3 million of cash
flows from operating activities in 1997. The change is primarily attributable
to working capital investments related to communications site acquisitions and
growth.
Cash flows used for investing activities were $164.5 million for the six
months ended June 30, 1998 as compared to $23.5 million for the six months
ended June 30, 1997. The increase in 1998 is due to the acquisition and
construction activity in 1998 as compared to 1997.
Cash flows provided by financing activities were $232.4 million for the six
months ended June 30, 1998 as compared to $22.7 million in 1997. The increase
in 1998 is due principally to the impact of borrowings under the credit
facilities and proceeds from the Interim Preferred Stock financing and sale of
common stock pursuant to the ATC Stock Purchase Agreement, somewhat offset by
the tax payments to CBS.
CBS Merger: On June 4, 1998, the merger of American Radio and a subsidiary
of CBS was consummated. As a consequence, all of the shares of ATC owned by
ARS were distributed to ARS common stockholders and holders of options to
acquire ARS Common Stock or have been or will be distributed upon conversion
of shares of Convertible Exchangeable Preferred Stock. As a consequence of the
CBS Merger, ATC ceased to be a subsidiary of, or to be otherwise affiliated
with, American Radio and operates as an independent publicly traded company.
Pursuant to the provisions of the CBS Merger Agreement, ATC entered into the
Separation Agreement with CBS and ARS providing for, among other things, the
orderly separation of ARS and ATC, the allocation of certain tax liabilities
to ATC, certain closing date adjustments relating to ARS, the lease to ARS by
ATC of space on certain towers previously owned by ARS and transferred to ATC,
the lease of corporate office space and certain indemnification obligations
(including with respect to securities law matters) of ATC.
The Separation Agreement required ATC to reimburse CBS on a "make-whole"
(after tax) basis for the tax liabilities incurred by ARS attributable to the
distribution of the Common Stock to the ARS security holders and certain
related transactions to the extent that the aggregate amount of taxes required
to be paid by ARS exceeds $20.0 million. The amount of that tax liability was
dependent on the "fair market value" of the Common Stock at the time of the
consummation of the CBS Merger. ATC received an appraisal from an independent
appraisal firm that the "fair market value" of ARS's stock interest in ATC was
equal to $17.25 per share. Based on such appraisal, ARS paid estimated taxes
of approximately $212.0 million and was reimbursed therefor by ATC. As
required by the Separation Agreement, ATC provided CBS with security of $9.8
million in cash (which may be replaced at ATC's option with a letter of credit
reasonably satisfactory to CBS) in connection with the filing of estimated tax
returns based on such appraisal. Such appraisal is not, of course, binding on
the Internal Revenue Service or other taxing authorities. The Company financed
its tax reimbursement obligations to CBS with the Interim Preferred Stock
proceeds discussed below. The $212.0 million payment also included estimated
payments for the "make-whole" provisions of the liability associated with the
conversion of the Convertible Preferred Stock and the working capital
adjustment described below. Such taxes gave effect to estimated deductions of
approximately $85.1 million available to ARS as a consequence of the
cancellation or exercise of ARS stock options pursuant to the CBS Merger.
ATC's reimbursement obligation with respect to
15
<PAGE>
such taxes would change by approximately $21.0 million for each $1.00 change
in the "fair market value" of the Class A Common Stock under the tax reporting
method followed. The average of the high and low trading prices of the Class A
Common Stock in the when-issued over-the-counter market on June 4, 1998 was
$20.50.
The $212.0 million payment did not include all the taxes payable with
respect to the shares of Class A Common Stock deliverable upon conversion of
the Convertible Preferred Stock; such taxes will be based on the "fair market
value" of the Class A Common Stock at the time of conversion. Conversions have
occurred at various times since June 4, 1998. As of the date hereof, holders
of Depositary Shares representing approximately 43% of the Convertible
Preferred Stock have converted or have presented for conversion. ATC has
recorded a liability of approximately $4.7 million due to CBS associated with
these conversions, and ATC estimates that its remaining reimbursement
obligation with respect to the taxes on the remaining ARS Convertible
Preferred Stock will be approximately $13.5 million under the tax reporting
method followed. Such estimate is based on the August 10, 1998 fair market
value of the Class A Common Stock of $23.25 per share. ATC's obligation for
such conversions would change by approximately $1.2 million for each $1.00
change in the fair market value.
ARS has agreed that it will pursue, for the benefit of and at the cost of
ATC, a refund claim, attributable to the "make-whole" provision, estimated at
between $40.0 million to $45.0 million, based on the appraised "fair market
value" and the estimated taxes attributable to conversions of the Convertible
Preferred Stock set forth above. Any such refund claim will, in fact, be based
on the actual amount of taxes paid. In light of existing tax law, there can,
of course, be no assurance that any such refund claim will be successful.
The Separation Agreement provides for closing date balance sheet adjustments
based upon the working capital, as defined, and debt levels of ARS. ATC will
benefit from or bear the cost of such adjustments. ATC's preliminary estimate
of such adjustments is that it will be required to make a payment of not more
than $50.0 million and that, in addition, it will be required to reimburse CBS
for the tax consequences of any such payment. The estimated taxes and refund
amount stated above include such tax reimbursement amount. Since the amounts
of working capital and debt are dependent upon the uncertainty, among other
things, of recent operating results and cash capital contributions, as well as
CBS Merger expenses, the ultimate payment will differ from the estimate
provided herein and ATC is unable to state definitively what payments will be
owed by ATC to CBS. Based on the above estimates, ATC has recorded a $50.0
million liability due to CBS and corresponding reduction in equity to reflect
management's estimate at this time.
Interim Preferred Stock Financing: On June 4, 1998, ATC issued $300.0
million of Interim Preferred Stock and used the proceeds to fund its tax
reimbursement obligation to CBS, pay the commitment and other fees and
expenses of the issue and sale of such stock and to reduce bank borrowings. As
discussed below, the Interim Preferred Stock was redeemed on July 9, 1998 and
as a result, the Company incurred an extraordinary loss of approximately $7.4
million, net of a tax benefit of $4.9 million, during the third quarter of
1998 representing the write-off of certain commitment, deferred financing and
redemption fees.
Due to its short-term nature, the Interim Preferred Stock obligation has
been classified as a short-term liability. Dividends, which accrued at a rate
equal to the three-month LIBOR then in effect (approximately 5.69%) plus an
agreed upon adjustable spread (5.0% for the period in which the obligation was
outstanding), have been recorded as interest expense in the accompanying
financial statements.
Public Offering of Class A Common Stock: On July 8, 1998, the Company
completed a public offering of 27,861,987 shares of Class A Common Stock, $.01
par value per share (including 2,361,987 shares sold by the Company pursuant
to the exercise in full of the underwriters' over-allotment option) at $23.50
per share. Certain selling stockholders sold an additional 3,874,911 shares in
the offering. The Company's net proceeds of the offering (after deduction of
the underwriting discount and estimated offering expenses) were approximately
$625.4 million. On July 9, 1998, the Company used approximately $306.1 million
of the net proceeds from the offering to redeem all of the outstanding shares
of the Interim Preferred Stock at a price of 101% of the stock's liquidation
preference plus accrued on unpaid dividends. The balance was invested in
short-term investment grade securities and will be used, together with
borrowings under the New Credit Facilities, to fund future acquisitions and
construction activities.
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New Credit Facilities: In June 1998, ATC and its Borrower Subsidiaries
entered into definitive agreements with respect to the New Credit Facilities.
The New Credit Facilities with ATS provide for a $150.0 million term loan
maturing at the earlier of (i) eight and one-half years or (ii) December 31,
2006, amortizing quarterly in an amount equal to 2.5% of the principal amount
outstanding at June 30, 2001 at the end of each quarter between such date and
June 30, 2006, both inclusive, and the balance in two equal installments on
September 30, and December 31, 2006. The ATC New Credit Facility was fully
drawn at closing and provides for interest rates determined, at the option of
ATC, of either the LIBOR Rate (as to be defined) plus 3.50% or the Base Rate
(as defined) plus 2.5%. The New Credit Facilities with the Borrower
Subsidiaries provide for $900.0 million credit facilities maturing at the
earlier of (a) eight years or (b) June 30, 2006 consisting of the following:
(i) a $250.0 million multiple-draw term loan, (ii) a $400.0 million reducing
revolving credit facility and (iii) a $250.0 million 364-day revolving credit
facility that converts to a term loan facility thereafter. The Borrower
Subsidiaries borrowed $125.0 in the form of a term loan and an additional
approximately $19.0 million under the revolving credit arrangements that was
repaid out of the proceeds of the Interim Preferred Stock sale. The interest
rate provisions are similar to those in the prior credit agreement, except
that the range over the Base Rate is between 0.00% and 1.250% and the range
over the LIBOR Rate is between 0.750% and 2.250%. Borrowings under the
Borrower Subsidiaries' New Credit Facilities are conditioned upon compliance
with certain financial ratios and are required to be repaid, commencing June
30, 2001, in increasing quarterly amounts designed to amortize the loans at
maturity. The loans to ATC and the Borrower Subsidiaries are cross-guaranteed
and cross-collateralized by substantially all of the assets of the
consolidated group. The Borrower Subsidiaries are required to pay quarterly
commitment fees equal to 0.375% or 0.250% per annum, depending on their
consolidated financial leverage, on the aggregate unused portion of the
aggregate commitment (other than, until take down, the 364-day facility on
which it is 0.125% until so taken down). Other provisions of the Borrower
Subsidiaries' New Credit Facilities are comparable to the prior credit
agreement, although the financial and other covenants are somewhat more
favorable to the Borrower Subsidiaries in certain respects, including an
increase of the Total Debt (of the Borrower Subsidiaries and their Restricted
Subsidiaries) to Annualized Operating Cash Flow ratio from 6.0:1 to 6.5:1 and
the inclusion of a Total Debt (of ATC and its Restricted Subsidiaries) to
Annualized Operating Cash Flow ratio of 8.0:1. The New Credit Facility of ATC
restricts the payment of cash dividends and other distributions and the
redemption, purchase or other acquisition of equity securities. In connection
with repayment of borrowings under the prior credit agreement out of proceeds
of borrowings under the New Credit Facilities, ATC recognized an extraordinary
loss of approximately $1.4 million, net of a tax benefit of $0.9 million,
during the second quarter of 1998.
A substantial portion of ATC's cash flow from operations is required for
debt service. Accordingly, ATC's leverage could make it vulnerable to a
downturn in the operating performance of its tower properties or in economic
conditions. ATC believes that its cash flows from operations will be
sufficient to meet its debt service requirements for interest and scheduled
payments of principal under the New Credit Facilities. If such cash flow were
not sufficient to meet such debt service requirements, ATC might be required
to sell equity securities, refinance its obligations or dispose of one or more
of its properties in order to make such scheduled payments. There can be no
assurance that ATC would be able to effect any of such transactions on
favorable terms.
ATC believes that it has sufficient financial resources available to it,
including borrowings under the New Credit Facilities to finance operations for
the foreseeable future. ATC intends to finance its obligations under pending
acquisitions out of borrowings under the New Credit Facilities.
During the six months ended June 30, 1998, ATC had capital expenditures of
approximately $36.2 million primarily related to construction activities.
During 1998, ATC (including acquired companies) plans to build or commence
construction of approximately 500 towers (most of which are on a build to suit
basis) at an estimated aggregate cost of approximately $100.0 million. If
additional substantial acquisition or construction opportunities become
available, ATC may require additional financing during 1998. Any such
financing could take the form of an increase in the maximum borrowing levels
under the New Credit Facilities (which would be dependent on
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the ability to meet certain leverage ratios), the issuance of debt or senior
equity securities (which could have the effect of increasing its consolidated
leverage ratios) or equity securities (which, in the case of Common Stock or
securities convertible into or exercisable for Common Stock, would have a
dilutive effect on the proportionate ownership of ATC of its then existing
common stockholders). There can be no assurance that any such financing would
be available on favorable terms.
Management expects that the consummated acquisitions, including the ATC
Merger, and current and future construction activities will have a material
impact on liquidity. Management believes that the acquisition activities, once
integrated, will have a favorable impact on liquidity and will offset the
initial effects of the funding requirements. Management also believes that the
construction activities may initially have an adverse effect on the future
liquidity of ATC as newly constructed towers will initially decrease overall
liquidity, although, as such sites become more fully operational and achieve
higher utilization, they should generate cash flow, and in the long-term,
increase liquidity.
YEAR 2000
ATC is aware of the issues associated with the Year 2000 as it relates to
information systems. The Year 2000 is not expected to have a material impact
on ATC's current information systems because its software is either already
Year 2000 compliant or required changes are not expected to generate material
costs. Based on the nature of ATC's business, ATC anticipates it is not likely
to experience material business interruption due to the impact of Year 2000
compliance on its customers and vendors. As a result, ATC does not anticipate
that incremental expenditures to address Year 2000 compliance will be material
to ATC's liquidity, financial position or results of operations over the next
few years.
INFLATION
The impact of inflation on ATC's operations has not been significant to
date. However, there can be no assurance that a high rate of inflation in the
future will not have material adverse effect on ATC's operating results.
RECENT ACCOUNTING PRONOUNCEMENTS
In June 1997, the FASB released FAS No. 131 "Disclosures about Segments of
an Enterprise and Related Information" (FAS 131). FAS 131 established
standards for reporting information about the operating segments in its annual
report and interim reports. ATC will provide the required disclosure in its
full year 1998 financial information and will provide required interim
disclosure commencing with its first fiscal quarter of 1999.
In February 1998, the FASB released FAS No. 132, "Employer's Disclosures
about Pensions and Other Postretirement Benefits" (FAS 132), which ATC will be
required to adopt in 1998. FAS 132 will require additional disclosure
concerning changes in ATC's pension obligations and assets and eliminates
certain other disclosures no longer considered useful. Adoption of this
standard will have no effect on reported consolidated results of operations or
financial position.
In June 1998, the FASB issued Statement of Financial Accounting Standards
(FAS) No. 133, "Accounting for Derivative Instruments and Hedging Activities."
FAS No. 133 establishes standards for accounting and reporting for derivative
instruments, and conforms the requirements for treatment of different types of
hedging activities. This statement is effective for all fixed quarters of
years beginning after June 1999. The Company has not completed its evaluations
of FAS No. 133, but does not expect it to significantly affect the accounting
and reporting of its current hedging activities.
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PART II. OTHER INFORMATION.
ITEM 1.--LEGAL PROCEEDINGS.
In the normal course of business, the Company is subject to certain suits
and other matters. Management believes that the eventual resolution of any
pending matters, either individually or in the aggregate, will not have a
material effect on financial position, liquidity or results of operations.
ITEM 2.--CHANGES IN SECURITIES AND USE OF PROCEEDS.
Changes in Securities -- None
Recent Sales of Unregistered Securities -- On June 4, 1998, the Company
entered into the Interim Financing Agreement with respect to a preferred stock
financing which provided for the issuance and sale by ATC of up to $400.0
million of the Interim Preferred Stock to finance ATC's obligation to CBS with
respect to tax reimbursement. Pursuant to the Interim Financing Agreement, ATC
issued 300,000 shares of Interim Preferred Stock with an initial aggregate
liquidation preference of $300.0 million to several institutional investors.
On July 9, 1998, the Company paid approximately $306.1 million to redeem all
of the outstanding shares of the Interim Preferred Stock at a price of 101% of
the stock's liquidation preference plus accrued and unpaid dividends.
On June 17, 1998, the Company merged with a company owning a broadcasting
tower in the Boston, Massachusetts area and issued 720,000 shares of Class A
Common Stock. In connection with this transaction, ATC acquired a $12.0
million note receivable in connection with the merger and issued a
corresponding nonrecourse note payable which is payable only to the extent
that payments on the note receivable are made to ATC.
All of the shares referred to in the foregoing paragraphs were issued by ATC
in reliance on the exemption from registration provided by Section 4(2) of the
Securities Act. Each holder represented that it was acquiring its shares for
investment purposes and not with a view to distribution within the meaning of
the Securities Act. The stock certificates issued to all such holders bore
restrictive legends. No underwriting discounts or commissions were paid by ATC
in connection with the foregoing transactions.
Use of Proceeds -- The Company's Registration Statement on Form S-1 (File
No. 333-52481) under the Securities Act of 1933, as amended, for its public
equity offering (the "Registration Statement") became effective on July 1,
1998 and the offering commenced on July 2, 1998. The offering terminated after
the sale of all securities that were registered under the Registration
Statement. Credit Suisse First Boston Corporation, BT Alex. Brown
Incorporated, Lehman Brothers Inc., Morgan Stanley & Co. Incorporated, Bear,
Stearns & Co., Inc., Merrill Lynch Pierce Fenner & Smith Incorporated were the
managing underwriters of the offering. The Company registered and sold
27,861,987 shares of Class A Common Stock (including 2,361,987 shares sold by
the Company pursuant to the exercise in full of the underwriters' over-
allotment option) at $23.50 per share. The Company's net proceeds of the
offering (after deduction of the underwriting discount and estimated offering
expenses) were approximately $625.4 million. On July 9, 1998, the Company used
approximately $306.1 million of the net proceeds from the offering to redeem
all of the outstanding shares of the Interim Preferred Stock at a price of
101% of the stock's liquidation preference plus accrued and unpaid dividends.
The balance was invested in short-term investment grade securities and will be
used to fund future acquisitions and construction activities. None of the
expenses paid in connection with the registration and distribution of the
Class A Common Stock in the offering, and none of the net offering proceeds,
were paid directly or indirectly to directors, officers, or general partners
of the Company or their associates, persons owning 10% or more of any class of
the Company's securities, or affiliates of the Company.
ITEM 5.--OTHER INFORMATION.
The Company has not scheduled its annual shareholders' meeting for 1999.
However, the Company anticipates that the meeting will be held in the month of
May. Shareholder proposals intended to be presented at the 1999 annual
shareholders' meeting must be received by the Secretary of ATC no later than,
January 1, 1999 in order to be included in the Company's proxy statement.
Failure to submit such shareholder proposals by the specified date will result
in management proxies being allowed to use their discretionary voting
authority when the proposal is raised at the annual meeting, without any
discussion of the matter in the proxy statement.
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ITEM 6.--EXHIBITS AND REPORTS ON FORM 8-K.
(a) Exhibits.
Listed below are the exhibits which are filed as part of this Form 10-Q
(according to the number assigned to them in Item 601 of Regulation S-K). Each
exhibit marked by a (*) is incorporated by reference to Amendment No. 2 to
ATS's Registration Statement on Form S-1 (File No. 333-52481) as filed with
the Securities and Exchange Commission on June 30, 1998. Exhibit numbers in
parenthesis refer to the exhibit number in the above Registration Statement.
<TABLE>
<CAPTION>
EXHIBIT NO. DESCRIPTION OF DOCUMENT EXHIBIT FILE NO.
----------- --------------------------------- ------------------------------
<C> <S> <C>
3(i).1 Restated Certificate of
Incorporation of ATS, as filed
with the Secretary of State of
the State of Delaware on June 5,
1998............................. (*3(i).1)
3(i).2 Certificate of Designation
relating to Exchange Pay-In-Kind
Preferred Stock, as filed with
the Secretary of State of the
State of Delaware on June 4,
1998............................. (*3(i).2)
3(i).3 Certificate of Designation
relating to Series A Redeemable
Pay-In-Kind Preferred Stock, as
filed with the Secretary of State
of the State of Delaware on June
4, 1998.......................... (*3(i).3)
3(ii).1 By-Laws of ATS................... (*3(ii).1)
10.1 Parent Loan Agreement, dated as
of June 16, 1998, by and among
ATS, Toronto Dominion (Texas),
Inc., as Administrative Agent,
and the Lenders parties thereto.. (*10.1)
10.2A ATS Facility A Loan Agreement,
dated as of June 16, 1998, by and
among American Tower Systems,
L.P. ("ATSLP") and American Tower
Systems (Delaware), Inc.
("ATSI"), as borrowers, and
Toronto Dominion (Texas), Inc.,
as Administrative Agent, and the
Banks parties thereto............ (*10.2A)
10.2B ATS Facility B Loan Agreement,
dated as of June 16, 1998, by and
among ATSLP and ATSI, as
borrowers, and Toronto Dominion
(Texas), Inc., as Administrative
Agent, and the Banks parties
thereto.......................... (*10.2B)
10.3 Registration Rights Agreement,
dated as of January 22, 1998, by
and among ATS and each of the
Parties named therein............ Filed herewith as Exhibit 10.3
10.4 ARS-ATS Separation Agreement,
dated as of June 4, 1998 by and
among American Radio Systems
Corporation, ATS and CBS
Corporation...................... (*10.30)
10.5 Securities Purchase Agreement,
dated as of June 4, 1998, by and
among ATS, Credit Suisse First
Boston Corporation and each of
the Purchasers named therein..... (*10.31)
10.6 Registration Rights Agreement,
dated as of June 4, 1998, by and
among ATS, Credit Suisse First
Boston Corporation, Conseco Life
Insurance, American Travelers
Life Insurance Co. and Great
American Reserve Insurance Co. .. (*10.32)
10.7 Escrow Agreement, dated as of
June 4, 1998, by and among ATS
and Harris Trust and Savings
Bank............................. (*10.33)
27 Financial Data Schedule.......... Filed herewith as Exhibit 27
</TABLE>
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(b) Reports on Form 8-K.
1. Form 8-K (Items 5 and 7) on May 1, 1998.
2. Form 8-K (Items 5 and 7) on June 4, 1998.
3. Form 8-K (Items 2, 5 and 7) on June 10, 1998.
4. Form 8-K (Items 5 and 7) on July 16, 1998.
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SIGNATURES
PURSUANT TO THE REQUIREMENTS OF THE SECURITIES EXCHANGE ACT OF 1934, THE
REGISTRANT HAS DULY CAUSED THIS REPORT TO BE SIGNED ON ITS BEHALF BY THE
UNDERSIGNED, THEREUNTO DULY AUTHORIZED.
American Tower Corporation
By: /s/ Joseph L. Winn
Date: August 14, 1998 -----------------------------------
Joseph L. Winn
Treasurer & Chief Financial Officer
(Duly Authorized Officer)
By: /s/ Justin D. Benincasa
Date: August 14, 1998 -----------------------------------
Justin D. Benincasa
Vice President & Corporate
Controller
(Duly Authorized Officer)
22
