<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): August 14, 2000 (August 14,
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 June 30, 2000 and
unaudited proforma condensed consolidated statements of operations for the six
months ended June 30, 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), the Company's notes placement in
February 2000 (February 2000 notes placement) and the Company's public
offering of common stock in June 2000 (June 2000 offering). 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 June 30, 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 August
14, 2000 and reports on Form 8-K dated September 17, 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 condensed consolidated 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 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
June 30, 2000 and Notes Thereto 3
Unaudited Pro forma Condensed Consolidated Statement of
Operations for the Six Months Ended June 30, 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
JUNE 30, 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.............. $ 518,758 $ 518,758
Accounts receivable, net............... 129,310 129,310
Other current assets................... 92,033 92,033
Notes receivable....................... 116,021 116,021
Property and equipment, net............ 1,774,076 1,774,076
Unallocated purchase price............. $135,339 135,339
Intangible assets, net................. 2,208,288 2,208,288
Deferred tax asset..................... 140,360 140,360
Deposits and other assets.............. 109,498 (27,407) 82,091
---------- -------- ----------
Total................................ $5,088,344 $107,932 $5,196,276
========== ======== ==========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities, excluding current
portion of long-term debt............. $ 199,568 $ 199,568
Other long-term liabilities............ 8,172 8,172
Long-term debt, including current por-
tion, but excluding
convertible notes..................... 1,098,341 $107,932 1,206,273
Convertible notes, net of discount..... 916,929 916,929
Minority interest...................... 17,261 17,261
Stockholders' equity................... 2,848,073 2,848,073
---------- -------- ----------
Total................................ $5,088,344 $107,932 $5,196,276
========== ======== ==========
</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 June 30, 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 June 30, 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)............ $133,333 $ 2,006 $135,339
Deposits and other assets................ (27,407) (27,407)
-------- ------- --------
Total.................................. $105,926 $ 2,006 $107,932
======== ======= ========
LIABILITIES AND STOCKHOLDERS' EQUITY
Long-term debt, including current
portion................................. $105,926 $ 2,006 $107,932
-------- ------- --------
Total.................................. $105,926 $ 2,006 $107,932
======== ======= ========
</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.................................. $133.3(2) $ 105.9
AT&T transaction...................................... 2.0(3) 2.0
</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 June 30, 2000 the Company has closed on 1,600 of the 2,100 towers
included in the AirTouch lease agreement, paid $609.5 million in cash,
and issued warrants to purchase 3.0 million 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
$133.3 million to close on an additional 350 towers through October 2000.
The Company does not expect to close on approximately 150 towers included
in the original agreement.
(3) As of June 30, 2000 the Company has closed on 1,910 of the 1,942 towers
included in the AT&T purchase agreement and paid $258.0 million in cash.
It is estimated that the Company will pay approximately $2.0 million to
close on the remaining towers.
4
<PAGE>
AMERICAN TOWER CORPORATION
UNAUDITED PRO FORMA CONDENSED CONSOLIDATED
STATEMENT OF OPERATIONS
Six Months Ended June 30, 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.................... $ 282,564 $ 12,654 $ 295,218
Operating expenses excluding
depreciation and amortization,
development and corporate general and
administrative expenses.............. 199,367 6,166 205,533
Depreciation and amortization......... 122,291 15,846 138,137
Development expense................... 5,184 5,184
Corporate general and administrative
expense.............................. 6,515 6,515
--------- -------- ---------
Loss from operations.................. (50,793) (9,358) (60,151)
Other (income) expense:
Interest expense.................... 70,587 (12,051) 58,536
Interest income and other, net...... (6,437) (6,437)
Interest income-TV Azteca, net of
interest expense of $457 (related
party)............................. (5,463) (5,463)
Note conversion expense............. 16,968 16,968
Minority interest in net earnings of
subsidiaries....................... 58 58
--------- -------- ---------
Total other (income) expense.......... 75,713 (12,051) 63,662
--------- -------- ---------
(Loss) income before income taxes and
extraordinary losses................. (126,506) 2,693 (123,813)
Benefit (provision) for income
taxes(b)............................. 30,214 (643) 29,571
--------- -------- ---------
(Loss) income before extraordinary
losses............................... $ (96,292) $ 2,050 $ (94,242)
========= ======== =========
Basic and diluted loss per common
share before extraordinary losses.... $ (0.60) N/A $ (0.55)
========= ======== =========
Basic and diluted common shares
outstanding(c)....................... 158,768 12,225 170,993
========= ======== =========
</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
six months ended June 30, 2000 gives effect to the pro forma transactions as if
each of them had occurred on January 1, 2000. We have not adjusted the pro
forma condensed consolidated statement of operations to reflect exchanges of
our convertible notes for shares of our Class A common stock in May and June
2000.
(a) To record the results of operations for the pro forma transactions. We have
adjusted the results of operations to record a decrease in net interest expense
of $12.0 million for the six months ended June 30, 2000 as a result of the
decrease in debt after giving effect to the proceeds of the February 2000 notes
placement and the June 2000 offering. 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 depreciation and
amortization expense of $15.8 million for the six months ended June 30, 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
six months ended June 30, 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 six month period ended June 30, 2000 pro forma statement
of operations due to immateriality.
<TABLE>
<CAPTION>
Total
Adjustments
February 2000 for Pro
AirTouch AT&T Notes June 2000 Pro Forma Forma
Transaction Transaction Placement Offering Adjustments Transactions
----------- ----------- ------------- --------- ----------- ------------
<S> <C> <C> <C> <C> <C> <C>
Operating revenues...... $ 10,625 (d) $ 2,029 (e) $ 12,654
Operating expenses
excluding depreciation
and amortization and
corporate general and
administrative
expense................ 4,041 (f) 2,125 (f) 6,166
Depreciation and
amortization........... $ 15,846 15,846
-------- ------- -------- --------
Income (loss) from
operations............. 6,584 (96) (15,846) (9,358)
Other (income) expense:
Interest expense, net.. $(1,439) $(23,675) 13,063 (12,051)
-------- ------- ------- -------- -------- --------
Income (loss) before
income taxes and
extraordinary losses... $ 6,584 $ (96) $ 1,439 $ 23,675 $(28,909) $ 2,693
======== ======= ======= ======== ======== ========
</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 adjustment for the 12.5 million shares of Class A common stock
issued pursuant to the June 2000 offering.
(d) Includes additional revenues recognized on a straight-line basis in
accordance with terms stipulated in the AirTouch lease agreement (assumes the
leasing of 1,950 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 (assumes the acquisition of 1,940 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.
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 $ 114,459 $ 372,540
Operating expenses excluding
depreciation and amortization,
development and corporate general and
administrative expenses............... 155,857 78,009 233,866
Depreciation and amortization.......... 132,539 103,891 236,430
Development expense.................... 1,607 1,607
Corporate general and administrative
expense............................... 9,136 2,800 11,936
-------- --------- ---------
Loss from operations................... (41,058) (70,241) (111,299)
Other (income) expense:
Interest expense..................... 27,492 35,713 63,205
Interest income and other, net....... (19,551) (19,551)
Minority interest in net losses of
subsidiaries........................ 142 142
-------- --------- ---------
Total other expense.................... 8,083 35,713 43,796
-------- --------- ---------
Loss before income taxes and extraordi-
nary loss............................. (49,141) (105,954) (155,095)
(Provision) benefit for income
taxes(b).............................. (214) 41,780 41,566
-------- --------- ---------
Loss before extraordinary loss......... $(49,355) $ (64,174) $(113,529)
======== ========= =========
Basic and diluted loss per common share
before extraordinary loss............. $ (0.33) N/A $ (0.68)
======== ========= =========
Basic and diluted common shares
outstanding(c)........................ 149,749 18,173 167,922
======== ========= =========
</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. We have not adjusted the pro
forma condensed consolidated statement of operations to reflect exchanges of
our convertible notes for shares of our Class A common stock in May and June
2000.
(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 $35.7 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,
the February 2000 notes placement and the June 2000 offering. 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 $103.9
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 $47,371(d) $ 3,039(e)
Operating
expenses
excluding
depreciation and
amortization,
and corporate
general and
administrative
expense......... 12,257 549 7,234 32,256 18,018(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) 29,353 (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) $29,353 $(4,656) $ 5,616 $ 11,415
======= ======== ======= ======== ======= ======= ======= ======= =========
<CAPTION>
Total
Adjustments
for Pro
June 2000 Pro Forma Forma
Offering Adjustments Transactions
---------- ----------- ------------
<S> <C> <C> <C>
Operating
revenues........ $ 114,459
Operating
expenses
excluding
depreciation and
amortization,
and corporate
general and
administrative
expense......... 78,009
Depreciation and
amortization.... $ 85,060 103,891
Corporate
general and
administrative
expense......... (19,156) 2,800
----------- ------------
(Loss) income
from
operations...... (65,904) (70,241)
Other (income)
expense:
Interest
expense, net... $(41,085) 85,181 35,713
Interest
income......... 1,035
Other, net...... 3,294
---------- ----------- ------------
(Loss) income
before income
taxes and
extraordinary
loss............ $ 41,085 $(155,414) $(105,954)
========== =========== ============
</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, the February 1999
offerings--26.2 million and the June 2000 offering--12.5 million.
(d) Includes additional revenues recognized on a straight-line basis in
accordance with terms stipulated in the AirTouch lease agreement (assumes the
leasing of 1,950 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 (assumes the acquisition of 1,940 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.
9
<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: August 14, 2000
-------------------------
