<PAGE>
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 15, 2000 (May 15, 2000)
AMERICAN TOWER CORPORATION
(Exact name of registrant as specified in its charter)
Delaware 001-14195 65-0723837
(State or Other (Commission File Number) (IRS Employer
Jurisdiction of Identification No.)
Incorporation)
116 Huntington Avenue
Boston, Massachusetts 02116
(Address of Principal Executive Offices) (Zip Code)
(617) 375-7500
(Registrant's telephone number, including area code)
<PAGE>
Item 7. Financial Statements, Pro Forma Financial Information and Exhibits.
The attached presents American Tower Corporation's (the Company) unaudited
pro forma condensed consolidated balance sheet as of March 31, 2000 and
unaudited proforma condensed consolidated statements of operations for the
three months ended March 31, 2000 and the year ended December 31, 1999 and
notes thereto.
The term pro forma transactions, as used in the Company's pro forma
condensed consolidated financial statements and notes thereto, is defined as
certain of the Company's major acquisitions and financings and includes the
following: the OmniAmerica merger, the Telecom merger, the UNIsite merger, the
ICG transaction, the AirTouch transaction, the AT&T transaction, the Company's
public offering of common stock and private placement of common stock in
February 1999 (February offerings), the Company's notes placement in October
1999 (October notes placement) and the Company's notes placement in February
2000 (February 2000 notes placement). The pro forma financial statements do
not reflect all of the Company's consummated or pending acquisitions. The
adjustments assume that all pro forma transactions were consummated on January
1, 1999, in the case of the unaudited pro forma condensed consolidated
statements of operations. The adjustments assume that the then pending pro
forma transactions were consummated as of March 31, 2000 in the case of the
unaudited pro forma condensed consolidated balance sheet. These pro forma
financial statements should be read in conjunction with the 1999 Annual Report
on Form 10-K, quarterly report on Form 10-Q dated May 15, 2000 and reports on
Form 8-K dated September 17, 1999, November 15, 1999 and March 30, 2000.
Although the AirTouch transaction and the AT&T transaction do not involve the
acquisition of a business, we have provided pro forma information related to
these transactions as we believe such information is material.
The pro forma financial statements may not reflect the Company's financial
condition or our results of operations had these events actually occurred on
the dates specified. They may also not reflect the Company's financial
condition or the Company's results of operations as a separate, independent
company during the periods. Finally, they may not reflect the Company's future
financial condition or results of operations.
<TABLE>
<CAPTION>
Page Number
-----------
(b) Pro forma Financial Information
<S> <C>
Unaudited Pro forma Condensed Consolidated Balance Sheet as of
March 31, 2000 and Notes Thereto 3
Unaudited Pro forma Condensed Consolidated Statement of
Operations for the Three Months Ended March 31, 2000 and Notes
Thereto 5
Unaudited Pro Forma Condensed Consolidated Statement of
Operations for the Year Ended December 31, 1999 and Notes
Thereto 7
</TABLE>
2
<PAGE>
AMERICAN TOWER CORPORATION
UNAUDITED PRO FORMA CONDENSED CONSOLIDATED BALANCE SHEET
MARCH 31, 2000
(in thousands)
<TABLE>
<CAPTION>
Adjustments
for Pro Forma Pro Forma
Historical Transactions(a) as adjusted
---------- --------------- -----------
<S> <C> <C> <C>
ASSETS
Cash and cash equivalents.............. $ 140,733 $ 140,733
Accounts receivable, net............... 87,852 87,852
Other current assets................... 74,929 74,929
Notes receivable....................... 115,312 115,312
Property and equipment, net............ 1,668,854 1,668,854
Unallocated purchase price............. $411,007 411,007
Intangible assets, net................. 1,945,305 1,945,305
Deferred tax asset..................... 123,585 123,585
Deposits and other assets.............. 98,570 (46,802) 51,768
---------- -------- ----------
Total................................ $4,255,140 $364,205 $4,619,345
========== ======== ==========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities, excluding current
portion of long-term debt............. $ 173,700 $ 2,200 $ 175,900
Other long-term liabilities............ 6,215 6,215
Long-term debt, including current por-
tion, but excluding
convertible notes..................... 829,007 343,598 1,172,605
Convertible notes, net of discount..... 1,054,600 1,054,600
Minority interest...................... 15,195 15,195
Stockholders' equity................... 2,176,423 18,407 2,194,830
---------- -------- ----------
Total................................ $4,255,140 $364,205 $4,619,345
========== ======== ==========
</TABLE>
See Notes to Unaudited Pro Forma Condensed Consolidated Financial Statements.
3
<PAGE>
NOTES TO UNAUDITED PRO FORMA
CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
We have prepared the unaudited pro forma condensed consolidated balance sheet
as of March 31, 2000 to give effect, as of such date, to the remaining portion
of the AirTouch and AT&T transactions, the only pro forma transactions not
completed by that date. We will account for the remaining portions of the
AirTouch and AT&T transactions under the purchase method of accounting.
(a) The following table sets forth the pro forma balance sheet adjustments as
of March 31, 2000 (in thousands):
<TABLE>
<CAPTION>
Total
Adjustments
for
AirTouch AT&T Pro Forma
Transaction Transaction Transactions
----------- ----------- ------------
<S> <C> <C> <C>
ASSETS
Unallocated purchase price(1).......... $368,907 $ 42,100 $411,007
Deposits and other assets.............. (46,802) (46,802)
-------- -------- --------
Total................................ $322,105 $ 42,100 $364,205
======== ======== ========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities, excluding current
portion of long-term debt............. $ 2,200 $ 2,200
Long-term debt, including current
portion............................... $303,698 39,900 343,598
Stockholders' equity................... 18,407(2) 18,407
-------- -------- --------
Total................................ $322,105 $ 42,100 $364,205
======== ======== ========
</TABLE>
The following table sets forth the remaining purchase prices and related pro
forma financing for the AirTouch and AT&T transactions (in millions).
<TABLE>
<CAPTION>
Purchase Price Borrowings
-------------- ----------
<S> <C> <C>
AirTouch transaction.................................. $ 368.9(2) $ 303.7
AT&T transaction...................................... 42.1(3) 39.9
</TABLE>
- --------
(1) Upon completion of our evaluation of the purchase price allocations, we
expect that the average life of the assets should approximate 15 years.
(2) As of March 31, 2000 the Company has closed on 1,180 of the 2,100 towers
included in the AirTouch lease agreement, paid $449.5 million in cash,
and issued 3.0 million warrants to purchase shares of Class A common
stock at a price of $22.00 per share. The warrants, which have been
valued at approximately $42.0 million, vest based on the percentage of
towers closed to total towers in the lease agreement (2,100). It is
estimated that the Company will pay total consideration of approximately
$368.9 million to close on the remaining 920 towers.
(3) As of March 31, 2000 the Company has closed on 1,440 of the 1,942 towers
included in the AT&T purchase agreement and paid $220.1 million in cash.
It is estimated that the Company will pay approximately $42.1 million to
close on the remaining 502 towers.
4
<PAGE>
AMERICAN TOWER CORPORATION
UNAUDITED PRO FORMA CONDENSED CONSOLIDATED
STATEMENT OF OPERATIONS
Three Months Ended March 31, 2000
(in thousands, except per share data)
<TABLE>
<CAPTION>
Adjustments for
Pro Forma Pro Forma,
Historical Transactions(a) as adjusted
---------- --------------- -----------
<S> <C> <C> <C>
Operating revenues..................... $115,517 $ 8,484 $124,001
Operating expenses excluding
depreciation and amortization,
development and corporate general and
administrative expenses............... 79,708 4,449 84,157
Depreciation and amortization.......... 55,198 14,988 70,186
Development expense.................... 988 988
Corporate general and administrative
expense............................... 3,431 3,431
-------- -------- --------
Loss from operations................... (23,808) (10,953) (34,761)
Other (income) expense:
Interest expense..................... 32,150 10,501 42,651
Interest income and other, net....... (2,586) (2,586)
Interest income-TV Azteca, net of in-
terest expense of $160 (related par-
ty)................................. (2,308) (2,308)
Minority interest in net earnings of
subsidiaries........................ 36 36
-------- -------- --------
Total other expense.................... 27,292 10,501 37,793
-------- -------- --------
Loss before income taxes and extraordi-
nary losses........................... (51,100) (21,454) (72,554)
Benefit for income taxes(b)............ 13,440 7,635 21,075
-------- -------- --------
Loss before extraordinary losses....... $(37,660) $(13,819) $(51,479)
======== ======== ========
Basic and diluted loss per common share
before extraordinary losses........... $ (0.24) N/A $ (0.33)
======== ======== ========
Basic and diluted common shares
outstanding(c)........................ 156,515 N/A 156,515
======== ======== ========
</TABLE>
See Notes to Unaudited Pro Forma Condensed Consolidated Financial Statements.
5
<PAGE>
NOTES TO UNAUDITED PRO FORMA
CONDENSED CONSOLIDATED FINANCIAL STATEMENTS--(Continued)
The unaudited pro forma condensed consolidated statement of operations for the
three months ended March 31, 2000 gives effect to the pro forma transactions as
if each of them had occurred on January 1, 2000.
(a) To record the results of operations for the pro forma transactions. We have
adjusted the results of operations to record an increase in net interest
expense of $10.5 million for the three months ended March 31, 2000 as a result
of the increased debt after giving effect to the proceeds of the February 2000
notes placement. Debt issuance costs are being amortized on a straight-line
basis over the term of the obligation. Amortization of issuance costs are
included within interest expense.
We have also adjusted the results of operations to record additional
depreciation and amortization expense of $15.0 million for the three months
ended March 31, 2000 based on estimated allocations of purchase prices. With
respect to unallocated purchase price, we have determined pro forma
depreciation and amortization expense based on an expected average life of 15
years.
The table below sets forth the detail for the pro forma transactions for the
three months ended March 31, 2000 (in thousands). The UNIsite operations for
the 12 day period ended January 12, 2000 (acquisition closed January 13, 2000)
have been excluded from the three month period ended March 31, 2000 pro forma
statement of operations due to immateriality.
<TABLE>
<CAPTION>
Total
Adjustments
February 2000 for Pro
AirTouch AT&T Notes Pro Forma Forma
Transaction Transaction Placement Adjustments Transactions
----------- ----------- ------------- ----------- ------------
<S> <C> <C> <C> <C> <C>
Operating revenues...... $7,753(c) $ 731 (d) $ 8,484
Operating expenses
excluding depreciation
and amortization and
corporate general and
administrative
expense................ 2,949(e) 1,500 (e) 4,449
Depreciation and
amortization........... $ 14,988 14,988
------ ------ -------- --------
Income (loss) from
operations............. 4,804 (769) (14,988) (10,953)
Other (income) expense:
Interest expense, net.. $(1,439) 11,940 10,501
------ ------ ------- -------- --------
Income (loss) before
income taxes and
extraordinary losses... $4,804 $ (769) $ 1,439 $(26,928) $(21,454)
====== ====== ======= ======== ========
</TABLE>
(b) To record the tax effect of the pro forma adjustments and impact on our
estimated effective tax rate. The actual effective tax rate may be different
once we determine the final purchase price allocations.
(c) Includes additional revenues recognized on a straight-line basis in
accordance with terms stipulated in the AirTouch lease agreement. Approximately
$3.5 million of annual existing third-party lease revenues has not been
included.
(d) Includes additional revenues recognized on a straight-line basis in
accordance with terms stipulated in the AT&T and AT&T Wireless Services lease
agreements. Approximately $7.6 million of annual existing third-party lease
revenues has not been included.
(e) The towers involved in each of these acquisitions were operated as part of
the wireless service divisions of AirTouch and AT&T. Accordingly, separate
financial records were not maintained and financial statements were never
prepared for the operation of these towers. In addition to land leases that we
will assume, we have estimated certain operating expenses we would expect to
incur based on our own experience with comparable towers. Such estimates
include expenses related to utilities, repairs and maintenance, insurance and
real estate taxes. These operating expenses are based on management's best
estimate and, as such, the actual expenses may be different than the estimate
presented.
6
<PAGE>
AMERICAN TOWER CORPORATION
UNAUDITED PRO FORMA CONDENSED CONSOLIDATED
STATEMENT OF OPERATIONS
Year Ended December 31, 1999
(in thousands, except per share data)
<TABLE>
<CAPTION>
Adjustments for
Pro Forma Pro Forma,
Historical Transactions(a) as Adjusted
---------- --------------- -----------
<S> <C> <C> <C>
Operating revenues..................... $258,081 $ 118,654 $ 376,735
Operating expenses excluding
depreciation and amortization,
development and corporate general and
administrative expenses............... 155,857 79,391 235,248
Depreciation and amortization.......... 132,539 107,931 240,470
Development expense.................... 1,607 1,607
Corporate general and administrative
expense............................... 9,136 2,800 11,936
-------- --------- ---------
Loss from operations................... (41,058) (71,468) (112,526)
Other (income) expense:
Interest expense..................... 27,492 81,370 108,862
Interest income and other, net....... (19,551) (19,551)
Minority interest in net losses of
subsidiaries........................ 142 142
-------- --------- ---------
Total other expense.................... 8,083 81,370 89,453
-------- --------- ---------
Loss before income taxes and extraordi-
nary loss............................. (49,141) (152,838) (201,979)
(Provision) benefit for income
taxes(b).............................. (214) 60,533 60,319
-------- --------- ---------
Loss before extraordinary loss......... $(49,355) $ (92,305) (141,660)
======== ========= =========
Basic and diluted loss per common share
before extraordinary loss............. $ (0.33) N/A $ (0.91)
======== ========= =========
Basic and diluted common shares
outstanding(c)........................ 149,749 5,673 155,422
======== ========= =========
</TABLE>
See Notes to Unaudited Pro Forma Condensed Consolidated Financial Statements.
7
<PAGE>
NOTES TO UNAUDITED PRO FORMA
CONDENSED CONSOLIDATED FINANCIAL STATEMENTS--(Continued)
The unaudited pro forma condensed consolidated statement of operations for the
year ended December 31, 1999 gives effect to the pro forma transactions as if
each of them had occurred on January 1, 1999.
(a) To record the results of operations for the pro forma transactions. We have
adjusted the results of operations to: (1) reverse historical interest expense
associated with the companies or assets included in the pro forma transactions;
and (2) record an increase in net interest expense of $81.4 million for the
year ended December 31, 1999 as a result of the increased debt after giving
effect to the proceeds of the February offerings, the October notes placement
and the February 2000 notes placement. Debt discount is being amortized using
the effective interest method. Debt issuance costs are being amortized on a
straight-line basis over the term of the obligation. Amortization of debt
discount and issuance costs are included within interest expense.
We have also adjusted the results of operations to reverse historical
depreciation and amortization expense of $18.8 million for the year ended
December 31, 1999 and recorded depreciation and amortization expense of $107.9
million for the year ended December 31, 1999 based on estimated allocations of
purchase prices. With respect to unallocated purchase price, we have determined
pro forma depreciation and amortization expense based on an expected average
life of 15 years.
We have not carried forward certain corporate general and administrative
expenses of the prior owners into the pro forma condensed consolidated
financial statements. These costs represent duplicative facilities and
compensation to owners and/or executives we did not retain, including charges
related to the accelerated vesting of stock options and bonuses that were
directly attributable to the purchase transactions. Because we already maintain
our own separate corporate headquarters, which provides services substantially
similar to those represented by these costs, we do not expect them to recur
following the acquisition. After giving effect to an estimated $2.8 million of
incremental costs, we believe that we have existing management capacity
sufficient to provide the services without incurring additional incremental
costs.
8
<PAGE>
NOTES TO UNAUDITED PRO FORMA
CONDENSED CONSOLIDATED FINANCIAL STATEMENTS--(Continued)
The following table sets forth the detail for the pro forma transactions for
the year ended December 31, 1999 (in thousands).
<TABLE>
<CAPTION>
October February 2000
OmniAmerica TeleCom February UNIsite ICG AirTouch AT&T Notes Notes
Merger Merger Offerings Merger Transaction Transaction Transaction Placement Placement
----------- -------- --------- -------- ----------- ----------- ----------- --------- -------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Operating
revenues........ $12,246 $ 2,029 $ 8,018 $41,756 $51,566(d) $ 3,039(e)
Operating
expenses
excluding
depreciation and
amortization,
and corporate
general and
administrative
expense......... 12,257 549 7,234 32,256 19,400(f) 7,695(f)
Depreciation and
amortization.... 2,372 1,201 4,539 10,719
Corporate
general and
administrative
expense......... 2,882 10,173 8,580 321
------- -------- -------- ------- ------- -------
(Loss) income
from
operations...... (5,265) (9,894) (12,335) (1,540) 32,166 (4,656)
Other (income)
expense:
Interest
expense, net... 746 521 $(1,499) 8,078 802 $(5,616) $ (11,415)
Interest
income......... (14) (1,021)
Other, net...... 816 (106) (4,026) 22
------- -------- ------- -------- ------- ------- ------- ------- ---------
(Loss) income
before income
taxes and
extraordinary
loss............ $(6,813) $(10,309) $ 1,499 $(15,366) $(2,364) $32,166 $(4,656) $ 5,616 $11,415
======= ======== ======= ======== ======= ======= ======= ======= =========
<CAPTION>
Total
Adjustments
for Pro
Pro Forma Forma
Adjustments Transactions
----------- ------------
<S> <C> <C>
Operating
revenues........ $ 118,654
Operating
expenses
excluding
depreciation and
amortization,
and corporate
general and
administrative
expense......... 79,391
Depreciation and
amortization.... $ 89,100 107,931
Corporate
general and
administrative
expense......... (19,156) 2,800
----------- ------------
(Loss) income
from
operations...... (69,944) (71,468)
Other (income)
expense:
Interest
expense, net... 89,753 81,370
Interest
income......... 1,035
Other, net...... 3,294
----------- ------------
(Loss) income
before income
taxes and
extraordinary
loss............ $(164,026) $(152,838)
=========== ============
</TABLE>
(b) To record the tax effect of the pro forma adjustments and impact on our
estimated effective tax rate. The actual effective tax rate may be different
once we determine the final purchase price allocations.
(c) Includes shares of Class A common stock issued pursuant to: the OmniAmerica
merger--16.8 million, the TeleCom merger--3.9 million, and the February
offerings--26.2 million.
9
<PAGE>
NOTES TO UNAUDITED PRO FORMA
CONDENSED CONSOLIDATED FINANCIAL STATEMENTS--(Continued)
(d) Includes additional revenues recognized on a straight-line basis in
accordance with terms stipulated in the AirTouch lease agreement (assumes the
leasing of all 2,100 towers). Approximately $3.5 million of annual existing
third-party lease revenues has not been included.
(e) Includes additional revenues recognized on a straight-line basis in
accordance with terms stipulated in the AT&T and AT&T Wireless Services lease
agreements (assuming the acquisition of all 1,942 towers). Approximately
$7.6 million of annual existing third-party lease revenues has not been
included.
(f) The towers involved in each of these acquisitions were operated as part of
the wireless service divisions of AirTouch and AT&T. Accordingly, separate
financial records were not maintained and financial statements were never
prepared for the operation of these towers. In addition to land leases that we
will assume, we have estimated certain operating expenses we would expect to
incur based on our own experience with comparable towers. Such estimates
include expenses related to utilities, repairs and maintenance, insurance and
real estate taxes. These operating expenses are based on management's best
estimate and, as such, the actual expenses may be different than the estimate
presented.
10
<PAGE>
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 CORPORATION
(Registrant)
By: /s/ Justin D. Benincasa
---------------------------------
Name: Justin D. Benincasa
Title: Vice President and Corporate
Controller
Date: May 15, 2000
-------------------------
11
