ATC Contact: Anne Alter, Director of Investor Relations
Telephone: (617) 375-7500
FOR IMMEDIATE RELEASE
American Tower and ALLTEL Announce 2,193
Tower Deal and Exclusive Build-To-Suit Contract
Boston, Massachusetts - December 20, 2000 - American Tower Corporation (NYSE:
AMT) today announced the signing of a definitive agreement with ALLTEL
Corporation (NYSE: AT) to acquire the rights to 2,193 communications towers
through a 15-year agreement to sublease. Additionally, American Tower and ALLTEL
entered into an exclusive build-to-suit agreement, which is expected to generate
approximately 500 sites. Further, American Tower has the right of first refusal
to provide equipment installation services on towers included in the ALLTEL
transaction, build-to-suit sites, as well as all ALLTEL co-location on American
Tower's existing sites.
American Tower will lease up to 2,193 towers for consideration of up to $658
million in cash. American Tower will have the option to acquire the rights to
approximately 200 additional towers, selected on a site-by-site basis, for cash
consideration of up to $300,000 per tower. Under the terms of the Agreement to
Sublease, American Tower will have the option to purchase the towers at the end
of the 15-year term. At the option of ALLTEL, the per tower consideration for
the purchase will either be cash in the amount of up to $27,500 plus interest
accrued at 3% per year, or up to an equivalent amount in shares of American
Tower Class A stock, valued at $35.75 as of December 15, 2000 (for towers where
cash consideration has already been determined to be $300,000) or the value of
American Tower Class A stock as of the date upon which the tower consideration
is determined.
The deal is expected to close incrementally beginning in the second quarter of
2001, after any necessary consents are obtained and subject to customary closing
conditions. American Tower expects to fund the transaction with its existing
credit facility.
Separately, American Tower has received a commitment from TD Securities (USA),
Inc. to expand its credit facility by $0.5 billion to $2.5 billion, as permitted
under the terms of the credit facility. This additional available credit will
provide American Tower with financial flexibility to fund future construction
and acquisition activities.
Steve Dodge, Chairman and Chief Executive Officer of American Tower, stated,
"ALLTEL is a quality company with quality tower assets. As a whole these towers
are well-constructed, high capacity structures with large compounds. About a
third of the ground is owned, providing us with higher operating margins, and
revenue shares are very minimal. These towers are in growth markets and fit
beautifully with our existing footprint. Moreover, we will have the ability to
operate these underdeveloped towers without obstruction and to market them
freely."
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Jim Eisenstein, Chief Development Officer of American Tower, added, "We have
truly enjoyed working with the ALLTEL team on this transaction and have
negotiated an agreement that is balanced and beneficial for both parties. Given
the quality locations and high capacity of these assets, we believe there are
numerous opportunities to drive growth on these towers. In addition, the
build-to-suit agreement affords us the opportunity to deliver fast, reliable,
high quality service to support ALLTEL's build out needs."
Chris Smith, Executive Vice President of Network Services of ALLTEL, said, "We
are pleased to establish this strategic relationship with American Tower. We are
looking forward to streamlining our external network management to include a
single point of contact for our tower needs. American Tower's competency in
operating towers and providing high quality services makes them the clear
choice."
Key Facts
The towers currently have 1.0 broadband equivalent tenant, including ALLTEL as
the anchor tenant.
One broadband equivalent tenant is assumed to pay $1,500 per month.
ALLTEL, as the anchor tenant, will pay a tenant site maintenance fee of $1,200
per tower per month, escalating at the lower of 5% or CPI plus 4%.
Giving effect to this transaction American Tower will increase its North
American leading tower count to over 13,000, with over 7,000 of these in the top
100 BTAs (Basic Trading Areas).
Financial Summary
The following estimates are based on a number of assumptions that management
believes to be reasonable, and reflect the Company's expectations as of December
20, 2000. Company outlook is based on assumptions about the timing of closings
and the number of towers closed. Please refer to the cautionary language
included in this press release when considering this information. The Company
undertakes no obligation to update this information.
"Cash flow" is defined as segment revenues less segment operating expenses
before depreciation and amortization and development expense. Segment cash flow
for rental and management includes interest income, TV Azteca, net.
ALLTEL Transaction Impact on 2001
Operating expenses are estimated at $9,000 per year per tower.
Assuming closing of 2,193 towers:
At closing, pro forma annual rental and management revenues are
expected to be $39.6 million.
At closing, pro forma annual rental and management cash flow is
expected to be $19.8 million.
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Assuming incremental tenant additions of 0.33 broadband equivalent tenants,
spread evenly throughout the year 2001, or $6.5 million in incremental revenues:
Pro forma 2001 rental and management revenues are expected to be $46.1
million.
Pro forma 2001 rental and management cash flow is expected to be $21.8
million, net of $4.5 million in regional G&A (general and administrative)
expenses.
2001 Company Outlook
The following gives effect to the ALLTEL transaction.
Rental and management revenues are expected to be between $405 million and $420
million. Rental and management cash flow is expected to be between $235 million
and $250 million.
Services revenues are expected to be between $405 million and $470 million.
Services cash flow is expected to be between $65 million and $75 million.
Internet, voice, data and video transmission services revenues are expected to
be between $270 million and $290 million. Internet, voice, data and video
transmission services cash flow is expected to be between $60 million and $65
million.
Total segment revenues are expected to be between $1,080 million and $1,180
million. Total segment cash flow is expected to be between $360 million and $390
million.
EBITDA excluding development expense is expected to be between $338 million and
$368 million. EBITDA is expected to be between $335 million and $365 million.
American Tower will host a conference call on Wednesday, December 20, 2000 at
11:00 a.m. Eastern to discuss this transaction. The call will be hosted by Joe
Winn, Chief Financial Officer, who will be joined by Steve Dodge, Chief
Executive Officer, and Jim Eisenstein, Chief Development Officer. The dial-in
numbers are US: (800) 230-1766, international: (612) 332-1214, no access codes
required. A live simulcast and accompanying slide presentation will be available
on American Tower's website, www.americantower.com. The slide show presentation
will be available for download at the time of the call.
A replay of the call will be available from 2:30 p.m. Eastern Wednesday,
December 20, 2000 until 11:59 p.m. Eastern Wednesday, December 27, 2000. The
replay dial-in numbers are US: (800) 475-6701, and international: (320)
365-3844, access code 558998. Replay will also be available on American Tower's
website, www.americantower.com.
ALLTEL, with more than 10 million communications customers, almost $7 billion in
annual revenues and more than 26,000 employees, is a leader in the
communications and information services industries. ALLTEL has communications
customers in 24 states and provides information services to telecommunications,
financial and mortgage clients in 55 countries and territories.
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American Tower is the leading independent owner, operator and developer of
broadcast and wireless communications sites in North America. Giving effect to
pending transactions, American Tower operates approximately 13,000 sites in the
United States, Mexico and Canada, including approximately 300 broadcast tower
sites. Of the 13,000 sites, approximately 12,000 are owned or leased towers and
approximately 1,000 are managed and lease/sublease sites. Based in Boston,
American Tower has regional hub offices in Boston, Atlanta, Chicago, Houston,
San Francisco and Mexico City. For more information about American Tower
Corporation and its subsidiary Verestar, Inc., please visit our web sites
www.americantower.com and www.verestar.com.
This press release contains "forward-looking statements" that involve a number
of risks and uncertainties. Forward-looking statements include the information
contained in the sections titled "ALLTEL Transaction Impact on 2001" and "2001
Company Outlook" and statements regarding our goals, beliefs, strategies,
objectives, plans or current expectations and matters that are not historical
facts. For example, when we use the words believe, expect, estimate, anticipate
or similar expressions, we are making forward-looking statements. You should be
aware that certain factors may affect us in the future and could cause actual
results to differ materially from those expressed in our forward-looking
statements. These factors include, but are not limited to (i) the completion of
the pending ALLTEL transaction, (ii) the timely integration of the ALLTEL
assets, (iii) the timing of the closings for the ALLTEL transaction, (iv) our
substantial capital requirements and leverage due principally to our ongoing
acquisitions and construction, (v) our dependence on the following: wireless
communications demand, use of satellites for Internet data transmission, and
implementation of digital television, (vi) the success of our tower construction
program, (vii) our ability to locate attractive acquisition targets, acquire
them on terms we feel are reasonable, and successfully integrate our
acquisitions, and (viii) the governmental, expropriation, currency and fund
repatriation risks inherent in our growing foreign operations. We undertake no
obligation to update the forward-looking statements contained in this press
release, including the ALLTEL transaction impact and the 2001 outlook ranges, to
reflect subsequently occurring events or circumstances.
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American Tower Corporation
116 Huntington Avenue Boston, Massachusetts 02116
(617) 375-7500 FAX (617) 375-7575
www.americantower.com
