SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported):
May 1, 1998 (April 30, 1998)
AMERICAN TOWER SYSTEMS CORPORATION
(Exact name of registrant as specified in its charter)
Delaware 333-46025 65-0598206
(State or Other Jurisdiction (Commission (IRS Employer
of Incorporation) File Number) Identification No.)
116 Huntington Avenue
Boston, Massachusetts 02116
(Address of Principal Executive Offices, Zip Code)
(617) 375-7500
(Registrant's telephone number, including area code)
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Item 5. Other Events
On April 30, 1998, American Tower Systems Corporation issued the press
release attached herewith as Exhibit 99.
Item 7. Exhibits
Press Release, dated April 30, 1998....................... Exhibit 99
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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 hereunto duly authorized.
AMERICAN TOWER SYSTEMS
CORPORATION
(Registrant)
Date: May 1, 1998 By: /s/ Justin D. Benincasa
Name: Justin D. Benincasa
Title: Vice President and
Corporate Controller
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EXHIBIT 99
American Tower Announces Financing Plans For Revised CBS Merger Tax Liability
BOSTON--April 30, 1998--American Tower Systems Corporation, a subsidiary of
American Radio Systems Corporation, announced today that it intends to file a
registration statement with the Securities and Exchange Commission to provide
for a public offering of shares of Class A Common Stock. Proceeds of the
offering will be used to finance its tax indemnification and other liabilities
to CBS Corporation that occur as a consequence of the merger of a wholly-owned
subsidiary of CBS into American Radio and the separation of American Tower from
American Radio pursuant to the CBS Merger. The public offering would be made
only by means of a prospectus forming a part of such registration statement. Any
public offering would be subject to market conditions and other factors.
In the event payment of its obligation to CBS is required prior to the
consummation of a public offering, American Tower intends to raise the necessary
funds through privately financed senior securities and, to the extent required,
bank borrowings. American Tower is actively negotiating a commitment for such
senior securities which, if issued, American Tower presently intends to redeem
out of the public offering proceeds.
American Tower is obligated, among other things, to reimburse CBS on a
"grossed up" basis for the tax liabilities to be incurred by American Radio
attributable to the distribution of the American Tower common stock to the
American Radio security holders and certain related transactions, including
without limitation any closing date balance sheet and working capital
adjustments. In light of the significant increase in the trading levels of the
American Tower Class A Common Stock, it has been agreed that American Radio will
treat the distribution on its tax return on a more conservative basis than
originally contemplated in order to avoid the possibility of significant
interest and penalties.
(continued)
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Page 2
The closing price at which the American Tower Class A Common Stock
traded on a "when-issued" basis in the over the counter market on April 30, 1998
was $23.00 per share. Assuming the "fair market value" of American Radio's stock
interest in American Tower at the time of the separation were equal to such
price (and no closing date balance sheet and working capital adjustments were
required), the total estimated tax reimbursement American Tower would be
required to make would be between $315.0 and $345.0 million, depending on
applicable state tax rates. The tax reimbursement would change by between
approximately $20.5 and $22.5 million, again depending on applicable state tax
rates, for each $1.00 change in the "fair market value" of the American Tower
common stock under the tax reporting position to be followed.
American Radio has agreed that it will pursue, for the benefit and at
the cost of American Tower, a refund claim, attributable to the "gross up"
provision, estimated at approximately $90.0 million, based on the market price
set forth above. In light of existing tax law, there can, of course, be no
assurance that any such refund claim will be successful.
As a result of an increase in the tax bases of American Tower's assets
of approximately $330.0 million in connection with certain transactions entered
into by American Tower in contemplation of the separation of American Tower and
American Radio, American Tower will have potential depreciation and amortization
deductions over the next 15 years of approximately $22.0 million per year and
expects to record a deferred tax asset of approximately $125.0 million to
reflect this.
Steven B. Dodge, Chairman of the Board, President and Chief Executive
Officer of American Radio and American Tower said that, "While it is normally
very satisfying to see the stock of a company for which you are responsible
trade up, in this case the cost to American Tower of the sharp rise in its stock
in the "when-issued" market is potentially quite substantial. While the actual
tax liability may not be known for an extended period of time, it will in any
event be very large."
The estimates described above are based on a number of assumptions and
interpretations of various applicable income tax rules and are subject to
change.
Consummation of the CBS Merger is conditioned on, among other things,
approval of the Federal Communications Commission. Subject to such FCC approval,
the CBS Merger is expected to occur this Spring. American Tower is a leading
independent owner and operator of wireless communications sites in the United
States, and, giving effect to pending acquisitions, operates more than 1,750
towers in 44 states and the District of Columbia.
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116 Huntington Avenue, Boston, Massachusetts 02116
(617) 375-7500 FAX (617) 375-7575
