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Filed Pursuant to Rule 424(b)(5)
Registration No. 333-37988
Prospectus Supplement
(to Prospectus dated June 22, 2000)
12,500,000 Shares
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+ [AMERICAN TOWER CORPORATION LOGO APPEARS HERE] +
++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++
Class A Common Stock
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We have sold 12,500,000 shares of Class A common stock, and in separate
transactions, certain stockholders have also sold an aggregate of 1,187,000
shares of Class A common stock to Lehman Brothers Inc. at $41.125 per share.
We will not receive any of the proceeds from the sales of Class A common stock
by the selling stockholders.
Holders of Class A common stock are entitled to one vote per share and
holders of Class B common stock to ten votes per share generally. After sales
by us and the selling stockholders, Steven B. Dodge, together with his
affiliates, will have approximately 26.9% of the combined voting power.
Our Class A common stock is listed on the New York Stock Exchange under the
symbol "AMT." On June 22, 2000, the closing sale price of our Class A common
stock was $41.25.
Investing in our Class A common stock involves risks. Risk Factors begin on
page 2 of the accompanying prospectus.
Lehman Brothers Inc. proposes to offer the 12,500,000 shares of common
stock from time to time for sale in negotiated transactions or otherwise, at
market prices prevailing at the time of sale, at prices related to such
prevailing market prices or at negotiated prices.
We have granted the underwriter a 30-day option to purchase up to an
additional 1,875,000 shares to cover over-allotments, if any.
Neither the Securities and Exchange Commission nor any state securities
commission has approved or disapproved of these securities or passed upon the
adequacy or accuracy of this prospectus supplement or the accompanying
prospectus. Any representation to the contrary is a criminal offense.
Lehman Brothers Inc. expects to deliver the shares of Class A common stock
on or about June 27, 2000.
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Lehman Brothers
June 22, 2000
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TABLE OF CONTENTS
Prospectus Supplement
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Prospectus Supplement Summary...... S-1
Capitalization..................... S-12
Use of Proceeds.................... S-14
Dilution........................... S-15
Market Prices and Dividend Policy.. S-16
Unaudited Pro Forma Condensed
Consolidated Financial
Statements........................ S-17
Underwriting....................... S-26
Validity of the Shares............. S-28
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Prospectus
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About This Prospectus............... (i)
Cautionary Note Regarding Forward-
Looking Statements................. (i)
American Tower...................... 1
Risk Factors........................ 2
Ratio of Earnings to Fixed Charges.. 6
Use of Proceeds..................... 6
Description of Certain
Indebtedness....................... 7
Description of Debt Securities...... 9
Description of Capital Stock........ 15
Description of Depositary Shares.... 21
Description of Warrants............. 25
Plan of Distribution................ 26
Validity of the Offered Securities.. 27
Experts............................. 27
Where You Can Find More
Information........................ 27
Documents Incorporated by
Reference.......................... 28
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(i)
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PROSPECTUS SUPPLEMENT SUMMARY
This summary highlights selected information about us, including significant
recent transactions. All information in this document gives effect to pending
transactions, unless the context otherwise clearly indicates. This summary is
not complete and may not contain all of the information that you should
consider before investing in our securities. You should read this entire
document carefully, including the "Risk Factors" section beginning on page 2 of
the accompanying prospectus included with this prospectus supplement and the
financial statements, which are incorporated by reference from our 1999 Annual
Report on Form 10-K, our March 31, 2000 Quarterly Report on Form 10-Q and our
Current Report on Form 8-K, dated March 30, 2000.
AMERICAN TOWER
We are a wireless communications and broadcast infrastructure company
operating in three business segments.
. We operate a leading network of communications towers and are the
largest independent operator of broadcast towers in North America.
. We provide comprehensive network development services and components for
wireless service providers and broadcasters.
. We provide domestic and international satellite and Internet protocol
network transmission services worldwide.
We estimate that our three business segments accounted for the following
percentages of pro forma 1999 operating revenues:
. Rental and management--53.0%,
. Network development services--27.0%, and
. Satellite and Internet protocol network transmission services--20.0%.
Rental and management. We believe we are the largest independent owner,
operator and developer of wireless communications towers in North America. We
operate a national network of approximately 10,000 multi-user sites in the
United States, Mexico and Canada, including approximately 300 broadcast tower
sites. Of those sites, approximately 8,700 are owned or leased sites and over
1,300 are managed or lease-sublease sites. Our U.S. network spans 48 states and
the District of Columbia, with tower clusters in 43 of the 50 largest U.S.
metropolitan statistical areas. Our developing Mexican network includes sites
in highly populated areas such as Mexico City, Monterrey, Guadalajara and
Acapulco. Our newly organized Canadian operation will include sites in major
metropolitan areas, including Toronto, Montreal, Quebec City, Edmonton and
Hamilton.
Our primary business is the leasing of antenna space to a diverse range of
wireless communications and broadcast industries. Wireless industries we serve
include personal communication services, cellular, enhanced specialized mobile
radio, specialized mobile radio, paging, fixed microwave and fixed wireless.
Our wireless customers include AirTouch (now part of Verizon), Alltell, AT&T,
AT&T Wireless Services, Bell Atlantic Mobile (now part of Verizon), BellSouth,
GTE Mobilnet (now part of Verizon), Mobile Wireless, Nextel, Omnipoint (now
part of VoiceStream), PacBell (now part of SBC), PowerTel, PrimeCo PCS (now
part of Verizon), SBC, Sprint PCS, Teligent, Western Wireless and WinStar.
Through our broadcast tower network we serve most major radio and television
broadcasters, including, ABC, AMFM, CBS, Clear Channel, Cox, Fox, Infinity,
NBC, Paxson, Paramount, Sinclair, Telemedia, Tribune, TV Azteca and Univision.
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Network development services. We are a leading provider of network
development services and components for both wireless service providers and
broadcasters. We offer full turnkey network development solutions to our
customers, consisting of radio frequency engineering, network design, site
acquisition, zoning and other regulatory approvals, construction management,
tower construction and antenna installation. We also offer a complete line of
wireless infrastructure components that are sold to service providers,
broadcasters, developers and others in the wireless industry. We also fabricate
steel used for broadcast towers and other structures. We provide site
acquisition services to most major wireless service providers and have
constructed or are constructing towers on a build-to-suit basis for wireless
and broadcast companies such as AirTouch, AT&T affiliates, AT&T Wireless
Services, Bell South, Nextel, Omnipoint (now part of VoiceStream), Paxson,
PrimeCo PCS (now part of Verizon), Sinclair and SBC.
We have performed network development services for other companies on more
than 10,000 sites. In 1998, we embarked on a major construction program with an
emphasis on build-to-suit projects. We constructed approximately 1,000 towers
for our own account in 1999, at a cost of approximately $220.0 million,
excluding broadcast towers. Our 2000 business plan calls for construction of
approximately 1,500 wireless towers for our own account at an estimated cost of
between $270.0 million and $330.0 million. In addition, we plan to construct
approximately 20 broadcast towers at an estimated cost of between $50.0 million
and $70.0 million.
Satellite and Internet protocol network transmission services. We are a
leading provider of domestic and international satellite and Internet protocol
network services. We own and operate more than 160 antennas accessing most
major satellite systems from U.S. teleport locations in Arizona, California,
Massachusetts, New Jersey, Texas, Washington state and Washington, D.C. Our
teleports are used by leading Internet, voice and data providers as well as
television networks, broadcasters and cable programmers. Our customers include
ABC, British Telecom, Cable and Wireless, CBS, CNN, Deutsche Telekom, Fox, MCI
Worldcom, TCI, Telefonica and Uunet. We are also a leading provider of
Internet, voice and data services to major cruise lines and the U.S. military.
For the year ended December 31, 1999, we had pro forma net revenues of
$376.7 million and pro forma EBITDA of $127.9 million. This pro forma data
includes the results of certain major acquisitions.
We believe that leasing activities generate our highest profit margins. We
also believe that leasing activities are likely to grow at a more rapid rate
than other segments of our business because of our recent and pending
acquisitions and our build-to-suit and other construction activities. Our
acquisitions and construction will increase significantly the number of antenna
sites available for leasing. The industry trend towards outsourcing
infrastructure needs may also result in a decline in our site acquisition and
construction activities for other companies.
We have a diversified base of more than 7,100 customers. Our largest
customer, AirTouch, accounted for approximately 14.0% of our pro forma 1999
operating revenues. Our five largest customers accounted for approximately
34.0% of those revenues. Service segment revenues, particularly site
acquisition and construction activities, are highly variable due to their
transactional nature. For example, one of our five largest customers, Sprint,
accounted for approximately 10.0% of our pro forma 1999 operating revenues,
principally as a result of several site acquisition projects.
We estimate that PCS accounted for approximately 24.0% of our pro forma 1999
operating revenues, cellular accounted for approximately 16.0% of those
revenues and paging accounted for approximately 10.0% of those revenues. We
believe no other industry sector accounted for 10.0% or more of those revenues.
However, these industry sector percentages may not be indicative of what we
will experience in the future. The importance of the different sectors will
probably change because of the anticipated growth of PCS, cellular and enhanced
special mobile radio, compared to other wireless services. The relative
contributions of the different sectors will also be affected as major wireless
service providers create strategic alliances with independent
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operators, including in our case AirTouch and AT&T. Finally, the percentage of
operating revenues derived from PCS will be affected by the decline in our site
acquisition and construction activities for that sector, as providers continue
to outsource those requirements. Slightly more than half of PCS's contribution
to our pro forma 1999 operating revenue was attributable to network development
services, principally site acquisition and construction activities.
Growth Strategy
We designed our growth strategy to enhance our position as a leader in each
of our business segments. Our goals are to:
. create a leading national footprint of desirable communications towers
in all major markets in North America,
. establish the capacity to serve profitably most of the infrastructure
needs of the wireless service and broadcast industries, and
. create a leader in the satellite and Internet protocol network
transmission services business.
We have implemented our strategy through a combination of acquisitions and
construction. We initially pursued acquisitions with independent tower
operators and other consolidators and more recently with major wireless service
providers selling their towers. This acquisition program also broadened the
scope of our network development services and our satellite and Internet
protocol network transmission services.
Our strategy has enabled us to create an organization with a depth of
personnel, computer and financial systems, sales and marketing, and engineering
and other technical expertise to take advantage of the growth in wireless
communications, digital television and the Internet. We believe we are well
positioned to compete and grow because we can meet the majority of
infrastructure requirements of wireless communications and digital television.
We are also playing an increasing role in addressing the Internet's
infrastructure needs. We will continue to pursue our growth strategy by:
. maximizing use of our antenna sites through targeted sales and marketing
techniques,
. capitalizing on our ability to provide full turnkey network development
solutions principally through build-to-suit projects and other tower
construction activities, and
. pursuing strategic mergers and acquisitions with independent tower
operators and other consolidators and wireless service providers.
We designed our acquisition strategy principally to:
. achieve enhanced operating efficiencies,
. take advantage of the remaining divestiture opportunities presented by
wireless service providers, as well as those with independent operators
and other consolidators,
. broaden and strengthen our penetration of major markets,
. facilitate entry into new geographic markets in the U.S. and abroad, and
. complement our construction program.
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Recent Developments
Completed transactions. Since January 1, 2000, we have consummated more than
23 transactions involving the acquisition of approximately 4,220 communications
sites and related businesses and a teleport business for an aggregate purchase
price of approximately $1.3 billion. This purchase price includes $1.1 billion
in cash, 2.4 million shares of our Class A common stock, 3.0 million warrants
to purchase shares of our Class A common stock and $52.0 million of assumed
debt. Our most recent principal transactions were the following:
Tower Transactions
AirTouch transaction. In August 1999, we agreed to lease on a long-term basis
up to 2,100 towers from AirTouch Communications. These towers are located in
all of AirTouch's major markets, other than Los Angeles and San Diego,
including Albuquerque, Atlanta, Cleveland, Denver, Detroit, Minneapolis, Omaha,
Phoenix, Portland, San Francisco and Seattle. Our cumulative lease payments,
based on 2,100 towers, aggregate $800.0 million in cash and a five-year warrant
to purchase 3.0 million shares of our Class A common stock at $22.00 per share.
As of the date of this prospectus supplement, we have leased 1,600 towers, paid
AirTouch $609.5 million in cash and issued warrants for 3.0 million shares of
our Class A common stock. Because of consent issues, we expect we may not
purchase as many as 200 towers. The remaining closings are expected to occur
during the second half of 2000.
Under our lease with AirTouch, we are entitled to all income generated from
leasing space on the towers and are responsible for all tower expenses,
including ground rent. AirTouch has reserved space on the towers for its
antennas, for which it will pay us a site maintenance charge equal to $1,500
per month for each non-microwave reserved space and $385 per month for each
microwave reserved space, with 3% annual increases.
We have also entered into an exclusive three-year build-to-suit agreement
with AirTouch. Under that agreement, we have the right to build all of
AirTouch's towers in all markets covered by the lease. AirTouch entered into a
separate master lease covering all towers to be constructed pursuant to the
build-to-suit agreement. AirTouch will lease space for a period of ten years
and has the option to extend for five five-year periods. The rent is $1,500 per
month for each non-microwave antenna site and $385 per month for each microwave
antenna site, with 3% annual increases. We expect this build-to-suit agreement
will produce 400 to 500 towers.
AT&T transaction. In September 1999, we agreed to purchase up to 1,942
towers from AT&T. These towers are located throughout the United States and
were constructed by AT&T for its microwave operations. The purchase price is
$260.0 million in cash, subject to adjustment if all towers are not purchased.
As of the date of this document, we have acquired 1,910 towers and paid AT&T
$258.3 million. The remaining closings are expected to occur during the second
half of 2000.
AT&T entered into a master lease agreement covering the 468 towers on which
it currently conducts microwave operations. The lease has an initial term of
ten years and AT&T has five five-year renewal options. The annual base payment
is approximately $1.0 million, payable in January of each lease year. We will
adjust the payments based upon AT&T's use of the towers. However, any downward
adjustment can be used by AT&T as a credit only against future additional
payments and not against the base payment. We expect that as many as 50% of the
towers may not be marketable, at least in the near future, because of location.
We also entered into a build-to-suit agreement with AT&T Wireless Services.
This agreement requires AT&T Wireless Services to present 1,200 sites
nationwide from which we will select and be required to build 1,000 towers. We
entered into a separate master lease with AT&T Wireless Services for the build-
to-suit towers. The initial term is ten years, and AT&T Wireless Services has
three five-year renewal options. The rent
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for lease supplements entered into in the initial year is $1,350 per month, per
antenna site, increasing annually by $50 per year for lease supplements entered
into in subsequent years. All rents will be subject to 4% annual increases.
UNIsite merger. In January 2000, we merged with UNIsite. The purchase price
was $196.4 million, $147.7 million of which was paid in cash and $48.7 million
in the assumption of UNIsite's debt. At closing, UNIsite had more than 600
towers then completed or under construction. UNIsite's towers were located
primarily in the Northeast and Midwest. In February 2000, we repaid the UNIsite
debt at a premium of the outstanding principal amount. Accordingly, we
recognized an extraordinary loss of $1.3 million, net of an income tax benefit
of $1.0 million, in the first quarter of 2000.
Galaxy merger. In January 2000, we merged with Galaxy Engineering Services,
a global turnkey provider of engineering consulting services, based in Atlanta,
Georgia. At the time of the merger, we owned one-third of Galaxy which we had
acquired in December 1999 for $0.5 million. The other Galaxy stockholders
received 523,113 shares of our Class A common stock and $0.3 million in cash.
We had also loaned Galaxy $13.5 million. Galaxy provides a complete array of
radio frequency engineering and network design services, including drive
testing, voice quality analysis and transport engineering, interconnect and
microwave services.
U.S. Wireless transaction. In May 2000, we formed a strategic alliance with
U.S. Wireless to accelerate the deployment of a wireless location network that
will enable carriers to provide wireless telephone users with emergency E-911
caller location assistance and other location enhanced services. U.S. Wireless
has agreed to enter into a co-location agreement under which we will lease
approximately 2,500 sites for its planned 100-market wireless network
deployment. We will also provide U.S. Wireless with nationwide turnkey
deployment services, including RF engineering, network design, site
acquisition, project management, component supply and site installation. We
have invested $22.5 million in U.S. Wireless's 6.50% convertible preferred
stock, convertible into U.S. Wireless common stock at $19.03 per share.
Foreign transactions
TV Azteca transaction. Earlier this year, we loaned approximately $120.0
million to TV Azteca, the owner of a major national television broadcast
network in Mexico, and commenced marketing responsibility for its approximately
190 towers. The 20-year loan, which may be extended for an additional 50 years,
bears interest at approximately 12.87% per annum. We are entitled to receive
100% of the revenues generated by third party leases and are responsible for
incremental operating expenses of third party tenants on the towers during the
term of the loan. In December 1999, an executive officer and director of our
company became a director of TV Azteca. TV Azteca's towers are located in
highly populated areas such as Mexico City, Monterrey, Guadalajara and
Acapulco. We are in the process of determining the fair value of the interest
rate on our note receivable from TV Azteca. Any adjustments resulting from this
determination will be recorded in the period in which they are known.
Iusacell transaction. In December 1999, we entered into a management
agreement for approximately 350 existing towers and a build-to-suit agreement
for approximately 200 towers with Grupo Iusacell, the second largest wireless
telecommunications provider in Mexico. We have agreed to pay a $10.0 million
refundable deposit to retain the exclusive right to acquire the existing towers
of Iusacell through 2005, or, at Iusacell's option, at an earlier date. The
existing towers are located in urban and rural areas such as Mexico City,
Guadalajara, Veracruz and Acapulco. The build-to-suit towers will be
constructed over the next two years in key metropolitan areas.
Unefon transaction. Earlier this year, we entered into an agreement with
Unefon S.A. de C.V. to form a strategic alliance to build and operate towers
throughout Mexico. The five year agreement calls for Unefon to lease up to 450
sites, either by co-locating on our existing towers or by leasing space on
towers newly constructed by us.
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Canadian joint venture. In March 2000, we entered into a joint venture with
Telemedia, a privately held Canadian telecommunications company, to form
Canadian Towers, L.P. Canadian Towers, which is Canadian controlled and
operated, will develop and acquire wireless and broadcast towers throughout
Canada. We have committed to invest $18.0 million (Canadian) in exchange for
which we will own 45.0% of Canadian Towers. The joint venture's initial assets
will include more than 20 broadcast towers to be contributed by Telemedia.
These broadcast towers are located in major metropolitan areas, including
Toronto, Montreal, Quebec City, Edmonton and Hamilton.
Teleport transaction
ICG transaction. In December 1999, we acquired ICG Satellite Services and
its subsidiary, Maritime Telecommunications Network, for approximately $100.0
million in cash. The acquisition involved a major around-the-clock teleport
facility in New Jersey and a global maritime telecommunications network
headquartered in Miami, Florida. The acquired companies provide voice, data,
Internet and compressed video satellite services to major cruise lines, the
U.S. military, Internet-related companies and international telecommunications
customers. The New Jersey teleport and operations center has 12 existing
antennas and one under construction that access satellites covering the
continental United States, South America and the Atlantic Ocean region.
USEI merger. In June 2000, we merged with U.S. Electrodynamics. The purchase
price consisted of approximately 1.1 million shares of Class A common stock and
$26.4 million in cash. The purchase price is subject to adjustment based on the
net working capital and the long-term debt of U.S. Electrodynamics at closing.
The acquisition involved around-the-clock teleport facilities in the Pacific
Northwest, the Southwest and the Northeast with a total of 52 antennas that
access satellites covering the continental United States and the Pacific ocean
region.
Financing transactions
Stockholder Rule 144 sales. Certain of our stockholders have advised us that
they have agreed to sell shares of Class A common stock to Lehman Brothers Inc.
pursuant to the provisions of Rule 144 under the Securities Act. Stockholders
who have advised us that they have agreed to sell are: Steven B. Dodge,
chairman of the board of directors, president and chief executive officer:
500,000 shares; Alan L. Box, a director and executive vice president: 75,000
shares; Steven J. Moskowitz, executive vice president, sales and marketing and
general manager of our northeast region: 25,000 shares; Joseph L. Winn, chief
financial officer and treasurer: 150,000 shares; Chase Equity Associates,
L.L.C.: 154,991 shares; and Chase Manhattan Capital, L.P.: 245,009 shares. See
"Use of Proceeds" on page S-14 for information with respect to the affiliation
of the two Chase entities to a lender under our credit facilities. Arnold L.
Chavkin, a director, is a general partner of Chase Capital Partners, which
indirectly controls Chase Equity Associates and Chase Manhattan Capital.
Convertible note exchanges. During May and June 2000, we acquired an
aggregate of $87.3 million principal amount of our 6.25% convertible notes and
$73.1 million of our 2.25% convertible notes for an aggregate of 5,724,184
shares of our Class A common stock. These exchanges were pursuant to negotiated
transactions with a limited number of holders. As a consequence of those
exchanges, we will recognize a loss of approximately $17.0 million, before
taxes, in the second quarter of this year. We intend to negotiate additional
exchanges from time to time in the future, subject to favorable market
conditions.
Pending transactions. As of the date of this prospectus supplement, we are a
party to numerous pending transactions involving the acquisition of more than
1,040 communications sites and related businesses with an aggregate purchase
price of approximately $264.6 million, including the remaining portions of the
AirTouch and AT&T transactions.
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THE OFFERING
Common stock offered........ 12,500,000 shares of Class A common stock
Common stock outstanding
after the offering (1)...... 168,119,526 shares of Class A common stock
8,166,913 shares of Class B common stock
2,267,813 shares of Class C common stock
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178,554,252 shares of common stock
==================
Voting rights............... The Class A common stock and the Class B common
stock generally vote as a single class. The Class
A common stock has one vote per share and the
Class B common stock has ten votes per share. The
Class A common stock, voting separately as a
class, is entitled to elect two independent
directors. Delaware law and our charter also
require class votes on some matters. The Class C
common stock is generally nonvoting. We use the
term "common stock" to mean those three classes
of stock. Approximately 26.9% of the total voting
power will be owned by Steven B. Dodge, together
with his affiliates, after our sale of 12.5
million shares and the selling stockholder sales.
Other rights................ Each class of common stock has the same rights to
dividends and upon liquidation. The Class B
common stock and the Class C common stock are
convertible into Class A common stock on a share-
for-share basis. The Class B common stock cannot
be sold or transferred, except to certain
categories of persons specified in our charter.
The Class B common stock automatically converts
into Class A common stock upon the occurrence of
certain events.
Use of proceeds............. We estimate our net proceeds from the sale of
12.5 million shares will be $513.6 million
($590.7 million if the underwriter's over-
allotment option is exercised in full). We expect
to use these proceeds to finance construction
activities and pending and future acquisitions
and for general working capital purposes. We will
not receive proceeds from the sale by the selling
stockholders.
New York Stock Exchange
symbol...................... AMT
--------------------
(1) The number of shares of common stock outstanding was determined as of June
12, 2000, giving pro forma effect to sales by us and the selling
stockholders described in this prospectus supplement. This number does not
include shares we may issue in the future. Examples of these future
issuances include: (a) shares of Class A common stock issuable upon
conversion of Class B common stock or Class C common stock, (b) shares
issuable upon exercise of options outstanding on June 15, 2000 to purchase
an aggregate of 17,450,953 shares of common stock, (c) 3,000,000 shares of
Class A common stock issuable upon exercise of warrants issued in the
AirTouch transaction, (d) 19,073,506 shares of Class A common stock
issuable upon conversion of convertible notes issued in October 1999, (e)
8,737,864 shares of Class A common stock issuable upon conversion of
convertible notes issued in February 2000, or (f) 1,875,000 shares of Class
A common stock if the underwriter's over-allotment option is exercised in
full.
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SELECTED FINANCIAL DATA
We have derived the following selected financial data from our historical
consolidated financial statements and our unaudited pro forma condensed
consolidated financial statements. The selected financial data should be read
in conjunction with our historical financial statements. Prior to our
separation from our former parent on June 4, 1998, we operated as a subsidiary
of American Radio Systems and not as an independent company. Therefore, our
results of operations for that period may be different from what they would
have been had we operated as a separate, independent company.
Year-to-year comparisons are significantly affected by our acquisitions and
construction of towers, both of which have been numerous during the periods
presented. Our principal acquisitions are described in "American Tower--Recent
Developments" under "Prospectus Supplement Summary" on page S-4 and in the
notes to our historical financial statements.
The pro forma balance sheet data gives effect, as of March 31, 2000, to the
pro forma transactions not then completed; the remaining portions of the
AirTouch and AT&T transactions, and to our sale of 12.5 million shares to
Lehman Brothers Inc. The pro forma statement of operations data and other
operating data gives effect to the pro forma transactions and to that sale, as
if each had occurred on January 1, 1999. We use the term pro forma transactions
to mean certain of our major acquisitions and financings as follows:
. the OmniAmerica, TeleCom and UNIsite mergers, and the AirTouch, AT&T and
ICG transactions,
. our public offerings of Class A common stock in February 1999 and our
private placement of Class A common stock in February 1999, and
. our convertible notes private placements in October 1999 and February
2000.
Pro forma transactions do not include all of the completed or pending
acquisitions or pending construction. We have not adjusted the pro forma
selected financial data to reflect exchanges of our convertible notes for
shares of our Class A common stock in May and June 2000. See "American Tower--
Recent Developments" under "Prospectus Supplement Summary" on page S-4 and
"Unaudited Pro Forma Condensed Consolidated Financial Statements" on page S-17.
We account for all of the included mergers and acquisitions as purchases.
This means that for accounting and financial reporting purposes, we include the
results of operations and assets and liabilities of the acquired companies with
ours only after closing the transaction. The pro forma financial data reflects
certain adjustments, as explained elsewhere in this prospectus supplement.
Therefore, any comparison of the pro forma financial data with the historical
financial data for periods before 1999 is inappropriate.
Divisional cash flow means income (loss) from operations before depreciation
and amortization, tower separation expense, development expense and corporate
general and administrative expense, plus interest income, TV Azteca, net. Tower
separation expense refers to the one-time expense incurred as a result of our
separation from American Radio Systems. Development expense means the cost
incurred in connection with the integration of acquisitions and development of
new business initiatives. EBITDA means operating income (loss) before
depreciation and amortization and tower separation expense, plus interest
income, TV Azteca, net. After-tax cash flow means income (loss) before
extraordinary losses, plus depreciation and amortization.
We do not consider divisional cash flow, EBITDA and after-tax cash flow as a
substitute for alternative measures of operating results or cash flow from
operating activities or as a measure of our profitability or liquidity. These
measures of performance are not calculated in accordance with generally
accepted accounting principles. However, we have included them because they are
used in the communications site industry as a measure of a company's operating
performance. More specifically, we believe they can assist in comparing company
performances on a consistent basis without regard to depreciation and
amortization. Our concern is that depreciation and amortization can vary
significantly among companies depending on accounting methods,
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particularly where acquisitions are involved, or on non-operating factors
including historical cost bases. We believe divisional cash flow is useful
because it enables you to compare our divisional performance before the effect
of tower separation, development and corporate general and administrative
expenses that do not relate directly to performance.
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AMERICAN TOWER CORPORATION
SELECTED FINANCIAL DATA(1)
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<CAPTION>
July 17, 1995 Year Ended Year Ended Three Months Ended
(inception) through December 31, December 31, 1999 March 31, 2000
December 31, ----------------------------- ---------------------- ---------------------
1995(1) 1996 1997 1998 Historical Pro Forma Historical Pro Forma
------------------- ------- --------- --------- ----------- --------- ---------- ---------
(in thousands, except per share data)
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Statements of Operations
Data:
Operating revenues...... $ 163 $ 2,897 $ 17,508 $ 103,544 $ 258,081 $ 376,735 $ 115,517 $124,001
------- ------- --------- --------- ----------- --------- --------- --------
Operating expenses:
Operating expenses
excluding depreciation
and amortization,
tower separation,
development and
corporate general and
administrative
expenses.............. 60 1,362 8,713 61,751 155,857 235,248 79,708 84,157
Depreciation and
amortization.......... 57 990 6,326 52,064 132,539 240,470 55,198 70,186
Tower separation
expense............... 12,772
Development
expense(2)............ 1,607 1,607 988 988
Corporate general and
administrative
expense............... 230 830 1,536 5,099 9,136 11,936 3,431 3,431
------- ------- --------- --------- ----------- --------- --------- --------
Total operating
expenses............... 347 3,182 16,575 131,686 299,139 489,261 139,325 158,762
------- ------- --------- --------- ----------- --------- --------- --------
(Loss) income from
operations............. (184) (285) 933 (28,142) (41,058) (112,526) (23,808) (34,761)
Interest expense........ (3,040) (23,229) (27,492) (67,777) (32,150) (32,408)
Interest income and
other, net............. 36 251 9,217 19,551 19,551 2,586 2,586
Interest income TV
Azteca, net of interest
expense of $160
(related party)........ 2,308 2,308
Minority interest in net
earnings of
subsidiaries(3)........ (185) (193) (287) (142) (142) (36) (36)
------- ------- --------- --------- ----------- --------- --------- --------
Loss before income taxes
and extraordinary
losses................. (184) (434) (2,049) (42,441) (49,141) (160,894) (51,100) (62,311)
Benefit (provision) for
income taxes........... 74 (45) 473 4,491 (214) 43,885 13,440 16,978
------- ------- --------- --------- ----------- --------- --------- --------
Loss before
extraordinary losses... $ (110) $ (479) $ (1,576) $ (37,950) $ (49,355) $(117,009) $ (37,660) $(45,333)
======= ======= ========= ========= =========== ========= ========= ========
Basic and diluted loss
per common share before
extraordinary
losses(4).............. $ (0.00) $ (0.01) $ (0.03) $ (0.48) $ (0.33) $ (0.70) $ (0.24) $ (0.27)
======= ======= ========= ========= =========== ========= ========= ========
Basic and diluted
weighted average common
shares outstanding(4).. 48,732 48,732 48,732 79,786 149,749 167,922 156,515 169,015
======= ======= ========= ========= =========== ========= ========= ========
Other Operating Data:
Divisional cash flow.... $ 103 $ 1,535 $ 8,795 $ 41,793 $ 102,224 $ 141,487 $ 38,117 $ 42,152
EBITDA.................. (127) 705 7,259 36,694 91,481 127,944 33,698 37,733
EBITDA margin........... (N/A) 24.3% 41.5% 35.4% 35.4% 34.0% 28.6% 29.9%
After-tax cash flow..... (53) 511 4,750 14,114 83,184 123,461 17,538 24,853
Cash provided by (used
for) operating
activities............. (51) 2,230 9,913 18,429 97,011 (12,429)
Cash used for investing
activities............. (216,783) (350,377) (1,137,700) (900,242)
. Cash provided by
financing activities... 63 132 209,092 513,527 879,726 1,028,192
</TABLE>
S-10
<PAGE>
<TABLE>
<CAPTION>
December
31, December 31, 1999 March 31, 2000
---------- -------------------- --------------------
1997 1998 Historical Pro Forma Historical Pro Forma
---- ----- ---------- --------- ---------- ---------
<S> <C> <C> <C> <C> <C> <C>
Tower Data:
Towers operated at end of
period(5)............... 674 2,492 5,067 9,644 8,837 10,000
Towers constructed during
period(6)............... 84 503 1,045 N/A 304 N/A
</TABLE>
<TABLE>
<CAPTION>
December 31, March 31, 2000
------------------------------------------------ ---------------------
1995(1) 1996 1997 1998 1999 Historical Pro Forma
------- ------- -------- ---------- ---------- ---------- ----------
(in thousands)
<S> <C> <C> <C> <C> <C> <C> <C>
Balance Sheet Data:
Cash and cash
equivalents............ $ 12 $ 2,373 $ 4,596 $ 186,175 $ 25,212 $ 140,733 $ 140,733
Working capital
(deficiency), excluding
current portion of
long-term debt......... (40) 663 (2,208) 93,602 19,156 129,814 127,614
Property and equipment,
net.................... 3,759 19,710 117,618 449,476 1,092,346 1,668,854 1,668,854
Unallocated purchase
price.................. 411,007
Total assets............ 3,863 37,118 255,357 1,502,343 3,018,866 4,255,140 4,619,345
Long-term debt,
including current
portion but excluding
convertible notes...... 4,535 90,176 281,129 138,563 829,007 659,042
Convertible notes, net
of discount............ 602,259 1,054,600 1,054,600
Total stockholders'
equity................. 3,769 29,728 153,208 1,091,746 2,145,083 2,176,423 2,708,393
</TABLE>
--------------------
(1) We were organized on July 17, 1995.
(2) Development expenses prior to 1999 were immaterial.
(3) Represents the minority interest in net earnings of our non-wholly-owned
subsidiaries.
(4) We computed historical basic and diluted loss per common share before
extraordinary losses using the weighted average number of shares
outstanding during each period presented. Shares outstanding following the
separation from American Radio Systems are assumed to be outstanding for
all periods presented prior to June 4, 1998. We computed pro forma basic
and diluted loss per common share before extraordinary loss using the
number of shares expected to be outstanding following the pro forma
transactions and our sale of 12.5 million shares described in this
prospectus supplement. Shares issuable upon exercise of options and other
common stock equivalents have been excluded from the computations as their
effect is anti-dilutive.
(5) Includes information with respect to our company only and assumes
completion of all pending transactions, including those not in the pro
forma transactions. Excludes towers under construction. See note (6) below.
(6) Includes towers constructed in each period by us, including those
constructed for and owned by third parties. Excludes towers constructed by
acquired companies prior to acquisition.
S-11
<PAGE>
CAPITALIZATION
The historical column in the following table shows our actual historical
capitalization as of March 31, 2000. The second column shows our capitalization
as adjusted to show the effect of the pro forma transactions, as if we had
completed them on March 31, 2000. The third column shows our capitalization as
further adjusted to show the effect of our sale of 12.5 million shares (but not
the sale by the selling stockholders), as if we had completed it on March 31,
2000.
Management believes that the assumptions used provide a reasonable basis on
which to present such pro forma capitalization. You should read the
capitalization table below in conjunction with our historical financial
statements which are incorporated in this prospectus supplement by reference
and the "Unaudited Pro Forma Condensed Consolidated Financial Statements" on
page S-17. We have provided the capitalization table below for informational
purposes only. It is not necessarily indicative of our capitalization or
financial condition had we completed the transactions and events referred to
above on the date assumed. It is also not necessarily indicative of our future
capitalization or financial condition.
<TABLE>
<CAPTION>
March 31, 2000 (in thousands)
------------------------------------
Pro forma for Pro forma
Pro forma for our
Historical transactions sale
---------- ------------- ----------
<S> <C> <C> <C>
Cash and cash equivalents................ $ 140,733 $ 140,733 $ 140,733
========== ========== ==========
Long-term debt, including current
portion(1)(2):
Borrowings under our credit
facilities............................ $ 765,000 $1,108,598 $ 595,035
Outstanding convertible notes net of
discount(3)........................... 1,054,600 1,054,600 1,054,600
Other long-term debt................... 64,007 64,007 64,007
---------- ---------- ----------
Total long-term debt................. 1,883,607 2,227,205 1,713,642
Stockholders' equity(4):
Common stock(5)
Class A common stock................... 1,468 1,468 1,593
Class B common stock................... 84 84 84
Class C common stock................... 24 24 24
Additional paid-in capital............... 2,318,802 2,337,209 2,850,647
Accumulated deficit...................... (142,427) (142,427) (142,427)
Treasury stock........................... (1,528) (1,528) (1,528)
---------- ---------- ----------
Total stockholders' equity........... 2,176,423 2,194,830 2,708,393
---------- ---------- ----------
Total capitalization................. $4,060,030 $4,422,035 $4,422,035
========== ========== ==========
</TABLE>
---------------------
(1) For additional information, see "Unaudited Pro Forma Condensed Consolidated
Financial Statements" on page S-17 and "Management's Discussion and
Analysis of Financial Condition and Results of Operations--Liquidity and
Capital Resources" in our March 31, 2000 Quarterly Report on Form 10-Q. We
expect to require approximately $99.8 million of additional debt to finance
pending transactions not included in the pro forma transactions.
(2) See "Description of Certain Indebtedness" on page 7 of the accompanying
prospectus included with this prospectus supplement for information
regarding the terms of the major components of our long-term debt.
(3) Does not reflect the exchanges in May and June 2000 of an aggregate of
$160,362,000 principal amount of convertible notes for 5,724,184 shares of
Class A common stock.
(4) Consists of (a) preferred stock, par value $.01 per share, 20,000,000
authorized shares, none issued or outstanding; (b) Class A common stock,
par value $.01 per share, 500,000,000 authorized shares; shares issued and
outstanding: 144,965,623 (historical and pro forma for pro forma
transactions) and 157,465,623 (pro forma for our sale); (c) Class B common
stock, par value $.01 per share, 50,000,000 authorized shares; shares
issued and outstanding: 8,359,735 (historical and both pro forma); and (d)
Class C common stock, par value $.01 per share, 10,000,000 authorized
shares; shares issued and outstanding:
S-12
<PAGE>
2,422,804 (historical and pro forma). Outstanding share numbers do not give
effect to subsequent conversions of shares of Class B common stock or Class
C common stock to Class A common stock.
(5) This number does not include (a) 5,724,184 shares of Class A common stock
issued upon exchange of convertible notes, as described in note (3) above,
or (b) shares we may issue in the future. Examples of these future
issuances include: (a) shares of Class A common stock issuable upon
conversion of Class B common stock or Class C common stock, (b) shares
issuable upon exercise of options outstanding to purchase an aggregate of
17,450,953 shares of common stock, (c) 3,000,000 shares of Class A common
stock issuable upon exercise of warrants issued in the AirTouch
transaction, (d) shares of Class A common stock issuable upon completion of
certain then pending transactions, (e) 19,073,506 shares of Class A common
stock issuable upon conversion of the outstanding convertible notes issued
in October 1999, (f) 8,737,864 shares of Class A common stock issuable upon
conversion of the outstanding convertible notes issued in February 2000, or
(g) 1,875,000 shares of Class A common stock issuable if the underwriter's
over-allotment option is exercised in full.
S-13
<PAGE>
USE OF PROCEEDS
We estimate our net proceeds from the sale of the Class A common stock sold
by us will be $513.6 million, or $590.7 million if the underwriter's over-
allotment option is exercised in full. We expect to use the net proceeds,
together with bank borrowings, to finance the construction of towers, our
remaining obligations with respect to acquisitions, and for general working
capital purposes. We may also utilize these net proceeds, together with bank
borrowings, to finance, among other things, acquisitions of additional
communications sites or other related businesses. We have requested our lenders
to waive the requirement that we reduce their commitments under our credit
facilities by the net proceeds of our sale of 12.5 million shares. While we
expect to receive the waiver, we cannot assure you that we will.
As of June 15, 2000, on a pro forma basis, assuming completion of the pro
forma transactions and all other pending acquisitions, but not our sale of 12.5
million shares, we would have had indebtedness under our credit facilities of
approximately $1.2 billion. After giving effect to our sale of 12.5 million
shares and assuming the use of the net proceeds described above, as of such
date, on such pro forma basis, we would have had borrowings under our credit
facilities of approximately $0.7 billion. The Chase Manhattan Bank is a lender
under our credit facilities and will receive its 4.9% proportionate share of
any repayments of borrowings. Chase is an affiliate of Chase Equity Associates,
which together with its affiliates owns approximately 4.0% of our common stock
and has a representative on our board of directors. See "American Tower--Recent
Developments--Financing transactions--Stockholder Rule 144 sales" in
"Prospectus Supplement Summary" on page S-6.
We will not receive any proceeds from the sales by the selling stockholders
that were made pursuant to Rule 144.
S-14
<PAGE>
DILUTION
As of March 31, 2000, our pro forma net tangible book value, after giving
effect to the pro forma transactions, was a deficit of $(161.5) million or
$(1.04) per share of common stock. Pro forma net tangible book value per share
represents the amount of our pro forma assets, less our pro forma goodwill and
other pro forma intangible assets, reduced by the amount of our pro forma
liabilities and divided by the pro forma number of shares of common stock
outstanding. After giving effect to the application of the net proceeds and
estimated offering expenses, from our sale of 12.5 million shares, but not the
sale by the selling stockholders, our as adjusted pro forma net tangible book
value as of that date would have been $352.1 million or $2.09 per share. This
represents an immediate increase in such pro forma net tangible book value of
$3.13 per share to existing stockholders and an immediate dilution in net
tangible book value of $39.04 per share to new investors purchasing shares.
The following table illustrates the dilution per share as described above:
<TABLE>
<S> <C> <C>
Selling price per share.................................... $41.125
Pro forma net tangible book value per share before our
sale.................................................... $(1.04)
Increase attributable to our sale........................ 3.13
------
As adjusted pro forma net tangible book value per share
after our sale............................................ 2.09
-------
Dilution to new investors.................................. $39.035
=======
</TABLE>
S-15
<PAGE>
MARKET PRICES AND DIVIDEND POLICY
Market Price Data
On February 27, 1998, our Class A common stock commenced trading on a "when-
issued" basis on the inter-dealer bulletin board of the over-the-counter
market. Our Class A common stock commenced trading on the NYSE on June 5, 1998
(the day after we separated from American Radio Systems). The following table
presents reported high and low sale prices of our Class A common stock in the
over-the-counter market or on the Composite Tape of the NYSE.
<TABLE>
<CAPTION>
High Low
------- --------
<S> <C> <C>
1998
Quarter ended March 31 (commencing February 27, 1998).......... $20.25 $15.50
Quarter ended June 30.......................................... 26.125 18.75
Quarter ended September 30..................................... 28.625 14.375
Quarter ended December 31...................................... 29.625 13.25
1999
Quarter ended March 31......................................... 30.25 20.50
Quarter ended June 30.......................................... 26.875 20.50
Quarter ended September 30..................................... 25.875 19.50
Quarter ended December 31...................................... 33.25 17.5625
2000
Quarter ended March 31......................................... 55.00 28.5625
Quarter ended June 30 (through June 22)........................ 50.438 37.00
</TABLE>
The outstanding shares of common stock and number of registered holders as
of June 12, 2000 were as follows:
<TABLE>
<CAPTION>
Class
-------------------------------
A B C
----------- --------- ---------
<S> <C> <C> <C>
Outstanding shares.............................. 154,881,255 8,316,913 2,422,804
Registered holders.............................. 547 63 1
</TABLE>
Dividends
We have never paid a dividend on any class of common stock. We anticipate
that we will retain future earnings, if any, to fund the development and growth
of our business. We do not anticipate paying cash dividends on shares of common
stock in the foreseeable future. Our credit facilities restrict the payment of
cash dividends by our subsidiaries. See "Description of Capital Stock--Dividend
Restrictions" on page 19 of the accompanying prospectus included with this
prospectus supplement.
S-16
<PAGE>
UNAUDITED PRO FORMA CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
We have included our unaudited pro forma condensed consolidated balance
sheet as of March 31, 2000 and our unaudited pro forma condensed consolidated
statements of operations for the year ended December 31, 1999 and the three
months ended March 31, 2000. To the extent required, these pro forma statements
have been adjusted for the pro forma transactions and our sale of 12.5 million
shares. The pro forma transactions consist of:
. the OmniAmerica, TeleCom and UNIsite mergers and the AirTouch, AT&T and
ICG transactions,
. our Class A common stock financings in February 1999, and
. our convertible notes private placements in October 1999 and February
2000.
The pro forma financial statements do not reflect all of our completed or
pending acquisitions. The adjustments assume that all pro forma transactions
were completed 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 completed as of March 31, 2000 in
the case of the unaudited pro forma condensed consolidated balance sheet. You
should read the pro forma financial statements in conjunction with the
historical financial statements included in our 1999 Annual Report on Form 10-
K, our March 31, 2000 Quarterly Report on Form 10-Q and our Current Report on
Form 8-K dated March 30, 2000. Although the AirTouch and AT&T transactions do
not involve the acquisition of a business, we have provided pro forma
information related to these transactions, as we believe that information is
material to your investment decision.
The pro forma financial statements may not reflect our financial condition
or our results of operations had these events actually occurred on the dates
specified. They also may not reflect our financial condition or results of
operations as a separate, independent company during the periods presented.
Finally, they may not reflect our future financial condition or results of
operations.
S-17
<PAGE>
AMERICAN TOWER CORPORATION
UNAUDITED PRO FORMA CONDENSED CONSOLIDATED BALANCE SHEET
March 31, 2000
(in thousands)
<TABLE>
<CAPTION>
Adjustments for Pro Forma for Adjustments Pro Forma
Pro Forma Pro Forma for Our for Our
Historical Transactions(a) Transactions Sale(b) Sale
---------- --------------- ------------- ----------- ----------
<S> <C> <C> <C> <C> <C>
ASSETS
Cash and cash
equivalents............ $ 140,733 $ 140,733 $ 140,733
Accounts receivable,
net.................... 87,852 87,852 87,852
Other current assets.... 74,929 74,929 74,929
Notes receivable........ 115,312 115,312 115,312
Property and equipment,
net.................... 1,668,854 1,668,854 1,668,854
Unallocated purchase
price.................. $411,007 411,007 411,007
Intangible assets, net.. 1,945,305 1,945,305 1,945,305
Deferred tax asset...... 123,585 123,585 123,585
Deposits and other
assets................. 98,570 (46,802) 51,768 51,768
---------- -------- ---------- --------- ----------
Total................. $4,255,140 $364,205 $4,619,345 $4,619,345
========== ======== ========== ========= ==========
LIABILITIES AND
STOCKHOLDERS' EQUITY
Current liabilities,
excluding current
portion of long-term
debt................... $ 173,700 $ 2,200 $ 175,900 $ 175,900
Other long-term
liabilities............ 6,215 6,215 6,215
Long-term debt,
including current
portion, other than
convertible notes...... 829,007 343,598 1,172,605 $(513,563) 659,042
Convertible notes, net
of discount............ 1,054,600 1,054,600 1,054,600
Minority interest....... 15,195 15,195 15,195
Stockholders' equity.... 2,176,423 18,407 2,194,830 513,563 2,708,393
---------- -------- ---------- --------- ----------
Total................. $4,255,140 $364,205 $4,619,345 $ -- $4,619,345
========== ======== ========== ========= ==========
</TABLE>
See Notes to Unaudited Pro Forma Condensed Consolidated Balance Sheet.
S-18
<PAGE>
NOTES TO UNAUDITED PRO FORMA CONDENSED CONSOLIDATED BALANCE SHEET
We have prepared the unaudited pro forma condensed consolidated balance
sheet as of March 31, 2000 to give effect, as of that date, to the remaining
portions of the AirTouch and AT&T transactions, the only pro forma transactions
not completed by that date, and our sale of 12.5 million shares. We will
account for the remaining portions of the AirTouch and AT&T transactions under
the purchase method of accounting. See "American Tower--Recent Developments--
Completed transactions" under "Prospectus Supplement Summary" on page S-4 for a
description of those pro forma transactions. We have not adjusted the pro forma
condensed consolidated balance sheet to reflect exchanges of our convertible
notes for shares of our Class A common stock in May and June 2000. See
"American Tower--Recent Developments--Financing transactions" under "Prospectus
Supplement Summary" on page S-6 for a description of those exchanges.
(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, other than convertible
notes(2).............................. $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 purchase prices and related pro forma
financing of the transactions described above (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, we had 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 our Class A common stock at a price
of $22.00 per share. We have valued the warrants at approximately $42.0
million. The warrants vest based on the percentage of towers closed to
total towers in the lease agreement (2,100 towers). We estimate we will pay
total consideration of approximately $368.9 million in cash to close on the
remaining 920 towers.
(3) As of March 31, 2000, we had closed on 1,440 of the 1,942 towers included
in the AT&T purchase agreement and paid $220.1 million in cash. We estimate
we will pay approximately $42.1 million in cash to close on the remaining
500 towers; two towers will not be purchased.
(b) To record the sale of 12.5 million shares of Class A common stock
resulting in net proceeds of $513.6 million.
S-19
<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 for Adjustments
Pro Forma Pro Forma for Our Pro Forma for
Historical Transactions(a) Transactions Sale Our Sale
---------- --------------- ------------- ----------- -------------
<S> <C> <C> <C> <C> <C>
Operating revenues...... $258,081 $ 118,654 $ 376,735 $ 376,735
Operating expenses
excluding depreciation
and amortization,
development and
corporate general and
administrative
expense................ 155,857 79,391 235,248 235,248
Depreciation and
amortization........... 132,539 107,931 240,470 240,470
Development expense..... 1,607 1,607 1,607
Corporate general and
administrative
expense................ 9,136 2,800 11,936 11,936
-------- --------- --------- -------- ---------
Loss from operations.... (41,058) (71,468) (112,526) (112,526)
-------- --------- --------- -------- ---------
Other (income) expense:
Interest expense....... 27,492 81,370 108,862 $(41,085)(h) 67,777
Interest income and
other, net............ (19,551) (19,551) (19,551)
Minority interest in
net earnings of
subsidiaries.......... 142 142 142
-------- --------- --------- -------- ---------
Total other expense
(income)............... 8,083 81,370 89,453 (41,085) 48,368
-------- --------- --------- -------- ---------
(Loss) income before
income taxes and
extraordinary loss..... (49,141) (152,838) (201,979) 41,085 (160,894)
Benefit (provision) for
income taxes(b)........ (214) 60,533 60,319 (16,434) 43,885
-------- --------- --------- -------- ---------
(Loss) income before
extraordinary loss..... $(49,355) $ (92,305) $(141,660) $ 24,651 $(117,009)
======== ========= ========= ======== =========
Basic and diluted loss
per common share before
extraordinary loss..... $ (0.33) N/A $ (0.91) N/A $ (0.70)
======== ========= ========= ======== =========
Basic and diluted common
shares outstanding(c).. 149,749 5,673 155,422 12,500 167,922
======== ========= ========= ======== =========
</TABLE>
See Notes to Unaudited Pro Forma Condensed Consolidated Statement of
Operations.
S-20
<PAGE>
NOTES TO UNAUDITED PRO FORMA
CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
The unaudited pro forma condensed consolidated statement of operations for
the year ended December 31, 1999 gives effect to the pro forma transactions and
to our sale of 12.5 million shares, as if each of them had occurred on January
1, 1999. See "American Tower--Recent Developments--Completed transactions"
under "Prospectus Supplement Summary" on page S-4 for a description of certain
pro forma transactions and our historical financial statements incorporated by
reference for a description of the other pro forma transactions. 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. See "American Tower--Recent Developments--Financing
transactions" under "Prospectus Supplement Summary" on page S-6 for a
description of those exchanges.
(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 of 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 our February 1999 equity financings and our
private notes placements in October 1999 and February 2000. 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
obligations. 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 associated with the companies or
assets included in the pro forma transactions of $18.8 million 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
expense 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.
S-21
<PAGE>
The following table sets forth the detail for the pro forma transactions for
the year ended December 31, 1999 (in thousands).
<TABLE>
<CAPTION>
Omni
America TeleCom February ICG UNIsite AirTouch AT&T Notes Pro Forma
Merger Merger Offerings Transaction Merger Transaction Transaction Placements Adjustments
------- -------- --------- ----------- -------- ----------- ----------- ---------- -----------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Operating
revenues........ $12,246 $ 2,029 $41,756 $ 8,018 $51,566(d) $ 3,039(e)
Operating
expenses
excluding
depreciation and
amortization,
and corporate
general and
administrative
expenses........ 12,257 549 32,256 7,234 19,400(f) 7,695(f)
Depreciation and
amortization.... 2,372 1,201 10,719 4,539 $ 89,100
Corporate general
and
administrative
expense......... 2,882 10,173 321 8,580 (19,156)
------- -------- ------- ------- -------- ------- ------- -------- ---------
(Loss) income
from
operations...... (5,265) (9,894) (1,540) (12,335) 32,166 (4,656) (69,944)
Other (income)
expense:
Interest
expense, net... 746 521 $(1,499) 802 8,078 $(17,031)(g) 89,753
Interest
income......... (14) (1,021) 1,035
Other, net...... 816 (106) 22 (4,026) 3,294
------- -------- ------- ------- -------- ------- ------- -------- ---------
(Loss) income
before income
taxes and
extraordinary
loss............ $(6,813) $(10,309) $ 1,499 $(2,364) $(15,366) $32,166 $(4,656) $ 17,031 $(164,026)
======= ======== ======= ======= ======== ======= ======= ======== =========
<CAPTION>
Total
Adjustments
for Pro
Forma
Transactions
------------
<S> <C>
Operating
revenues........ $ 118,654
Operating
expenses
excluding
depreciation and
amortization,
and corporate
general and
administrative
expenses........ 79,391
Depreciation and
amortization.... 107,931
Corporate general
and
administrative
expense......... 2,800
------------
(Loss) income
from
operations...... (71,468)
Other (income)
expense:
Interest
expense, net... 81,370
Interest
income.........
Other, net......
------------
(Loss) income
before income
taxes and
extraordinary
loss............ $(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 allocation of purchase price.
(c) Includes shares of Class A common stock issued pursuant to: the OmniAmerica
merger--16.8 million, the TeleCom merger--3.9 million and our February
offerings--26.2 million.
(d) Includes additional revenues calculated on a straight-line basis in
accordance with terms stipulated in the AirTouch lease agreement, assuming
all 2,100 towers are subleased. Approximately $3.5 million of 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 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 we have presented.
(g) $5,616,000 is attributable to our October private notes placement and
$11,415,000 is attributable to our February private notes placement.
(h) To record a reduction in interest expense as a result of the use of
proceeds from our sale of 12.5 million shares of Class A common stock. For
purposes of the adjustments, we have used an interest rate of 8%.
S-22
<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 for Adjustments
Pro Forma Pro Forma for Our Pro Forma for
Historical Transactions(a) Transactions Sale Our Sale
---------- --------------- ------------- ----------- -------------
<S> <C> <C> <C> <C> <C>
Operating revenues...... $ 115,517 $ 8,484 $124,001 $124,001
Operating expenses
excluding depreciation
and amortization,
development and
corporate general and
administrative
expenses............... 79,708 4,449 84,157 84,157
Depreciation and
amortization........... 55,198 14,988 70,186 70,186
Development expense..... 988 988 988
Corporate general and
administrative
expense................ 3,431 3,431 3,431
--------- --------- -------- -------- --------
Loss from operations.... (23,808) (10,953) (34,761) (34,761)
--------- --------- -------- -------- --------
Other (income) expense:
Interest expense...... 32,150 10,501 42,651 $(10,243) (f) 32,408
Interest income and
other, net........... (2,586) (2,586) (2,586)
Interest income TV
Azteca, net of
interest expense of
$160 (related
party)............... (2,308) (2,308) (2,308)
Minority interest in net
earnings of
subsidiaries........... 36 36 36
--------- --------- -------- -------- --------
Total other (income)
expense................ 27,292 10,501 37,793 (10,243) 27,550
--------- --------- -------- -------- --------
(Loss) income before
income taxes and
extraordinary losses... (51,100) (21,454) (72,554) 10,243 (62,311)
Benefit (provision) for
income taxes(b)........ 13,440 7,635 21,075 (4,097) 16,978
--------- --------- -------- -------- --------
(Loss) income before
extraordinary losses... $ (37,660) $ (13,819) $(51,479) $ 6,146 $(45,333)
========= ========= ======== ======== ========
Basic and diluted loss
per common share before
extraordinary losses... $ (0.24) N/A $ (0.33) N/A $ (0.27)
========= ========= ======== ======== ========
Basic and diluted common
shares outstanding..... 156,515 N/A 156,515 12,500 169,015
========= ========= ======== ======== ========
</TABLE>
See Notes to Unaudited Pro Forma Condensed Consolidated Statement of
Operations.
S-23
<PAGE>
NOTES TO UNAUDITED PRO FORMA
CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
The unaudited pro forma condensed consolidated statement of operations for
the three months ended March 31, 2000 gives effect to the pro forma
transactions and to our sale of 12.5 million shares, as if each of them had
occurred on January 1, 2000. See "American Tower--Recent Developments--
Completed transactions" under "Prospectus Supplement Summary" on page S-4 for a
description of certain pro forma transactions and see our historical financial
statements incorporated by reference for a description of the other pro forma
transactions. 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. See "American Tower--Recent
Developments--Financing transactions" under "Prospectus Supplement Summary" on
page S-6 for a description of those exchanges.
(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 for
AirTouch AT&T February 2000 Pro Forma Pro Forma
Transaction Transaction Notes 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.
S-24
<PAGE>
(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 we have presented.
(f) To record a reduction in interest expense as a result of the use of
proceeds from our sale. For purposes of the adjustments we have used an
interest rate of 8%.
S-25
<PAGE>
UNDERWRITING
Lehman Brothers Inc. agreed on June 22, 2000 to purchase 12.5 million shares
of Class A common stock at the price indicated on the cover page of this
prospectus supplement.
We have granted to Lehman Brothers Inc. an option, expiring at the close of
business on the 30th day after the date of this prospectus supplement to
purchase an aggregate of up to 1,875,000 additional shares of Class A common
stock at $41.125 per share. The underwriter may exercise that option only to
cover over-allotments in the sale of shares of Class A common stock.
Lehman Brothers Inc. will offer the 12.5 million shares of common stock for
sale from time to time in one or more transactions (which may include block
transactions), in negotiated transactions or otherwise, or a combination of
both methods of sale, at market prices prevailing at the time of sale, at
prices related to prevailing market prices or at negotiated prices. Lehman
Brothers Inc. may do so by selling the 12.5 million shares of common stock to
or through broker/dealers, who may receive compensation in the form of
underwriting discounts, concessions or commissions from Lehman Brothers Inc.
and/or the purchasers of the 12.5 million shares of common stock for whom it
may act as agent. Lehman Brothers Inc. and any broker/dealers that participate
with the underwriter in the distribution of the 12.5 million shares of common
stock may be deemed to be underwriters, and any discounts or commissions
received by them and any profit on the resale of the 12.5 million shares of
common stock by them may be deemed to be underwriting discounts or commissions.
We have agreed that, for a period of 45 days after the date of this
prospectus supplement, we will not, without the prior written consent of Lehman
Brothers Inc.:
. offer, sell, contract to sell, pledge or otherwise dispose of, directly
or indirectly, or file with the Securities and Exchange Commission a
registration statement under the Securities Act of 1933, as amended,
relating to any additional shares of our Class A common stock or
securities convertible into or exchangeable or exercisable for any
shares of Class A common stock, or
. disclose the intention to make any such offer, sale, pledge, disposal or
filing.
Lehman Brothers Inc. has allowed certain exceptions to these restrictions.
Our officers, directors, the stockholders selling to Lehman Brothers Inc. in
Rule 144 transactions and certain other holders of our common stock have agreed
that for a period of 45 days from the date of this prospectus supplement they
will not, without, in each case, the prior written consent of Lehman Brothers
Inc.:
. offer, sell, contract to sell, pledge or otherwise dispose of, directly
or indirectly, any shares of Class A common stock or other capital
stock, other securities substantially similar to any of the foregoing or
securities convertible for or exchangeable or exercisable for any of the
foregoing, or
. enter into a transaction which would have the same effect, or
. enter into any swap, hedge or other arrangement that transfers, in whole
or in part, any of the economic consequences of ownership of shares of
Class A common stock or any other securities referenced above, whether
any such aforementioned transaction is to be settled by delivery of
those shares or other securities, in cash or otherwise, or
. publicly disclose the intention to make any such offer, sale, pledge or
disposition, or to enter into any of those transactions, swaps, hedges
or other arrangements.
Lehman Brothers Inc. may engage in over-allotment, covering transactions and
penalty bids in accordance with Regulation M under the Securities Exchange Act
of 1934, as amended.
. Over-allotment involves sales in excess of the offering size, which
creates a short position for the underwriter.
S-26
<PAGE>
. Covering transactions involve purchases of our Class A common stock in
the open market after the distribution has been completed in order to
cover short positions.
. Penalty bids permit the underwriter to reclaim a selling concession from
a broker/dealer when our Class A common stock originally sold by such
broker/dealer is purchased in a stabilizing transaction or a covering
transaction to cover short positions.
These covering transactions and penalty bids may cause the price of our
Class A common stock to be higher than it would otherwise be in the absence of
these transactions. These transactions may be effected on the NYSE or
otherwise and, if commenced, may be discontinued at any time.
The underwriter has participated as a representative in our public equity
offerings in July 1998 and February 1999 and as an initial purchaser in our
private notes placements in October 1999 and February 2000. Lehman Brothers
Inc. has also performed other financial advisory work for us.
We have agreed to indemnify the underwriter against certain liabilities
under the Securities Act of 1933.
Our Class A common stock is traded on the NYSE under the symbol "AMT."
S-27
<PAGE>
VALIDITY OF THE SHARES
The validity of the shares of Class A common stock to be sold by us will be
passed upon for us by Sullivan & Worcester LLP, Boston, Massachusetts, and for
the underwriter by Sullivan & Cromwell, New York, New York. Norman A. Bikales,
a member of the firm of Sullivan & Worcester LLP, is the owner of 11,000 shares
of Class A common stock and 41,490 shares of Class B common stock and has
options to purchase 20,000 shares of Class A common stock at $10.00 per share
and 25,000 shares of Class A common stock at $23.81 per share. Mr. Bikales and
other partners and associates of that firm serve as secretary or assistant
secretaries of us and certain of our subsidiaries.
S-28
<PAGE>
PROSPECTUS
$1,000,000,000
[LOGO OF AMERICAN TOWER]
American Tower Corporation
Debt Securities, Preferred Stock, Depositary Shares,
Class A Common Stock and Warrants
------------
We may from time to time offer:
. debt securities,
. shares of our preferred stock,
. fractional shares of our preferred stock in the form of depositary
shares,
. shares of our Class A common stock, or
. warrants to purchase any of these securities.
The securities we offer will have an aggregate public offering price of up
to $1,000,000,000.
We will show the particular securities we offer and their specific terms in
a supplement to this document. In each case we would describe the type and
amount of securities we are offering, the initial public offering price, and
the other terms of the offering.
Our Class A common stock is listed on the New York Stock Exchange under the
symbol "AMT." We will make application to list any shares of Class A common
stock sold pursuant to a supplement to this prospectus on the NYSE. We have
not determined whether we will list any of the other securities we may offer
on any exchange or over-the-counter market. If we decide to seek listing of
any securities, the supplement will disclose the exchange or market.
Investing in our securities involves risks. See "Risk Factors" beginning on
page 2.
Neither the Securities and Exchange Commission nor any state securities
commission has approved or disapproved of these securities or determined if
this prospectus is truthful or complete. Any representation to the contrary is
a criminal offense.
We may offer the securities directly, through agents designated from time
to time by us or to or through underwriters or dealers. We will show in a
supplement the names of any agents or underwriters involved in the sale of any
securities. We will also describe any applicable purchase price and fee or
commission or discount arrangement between or among us and/or them. See "Plan
of Distribution" on page 26. We may not sell any securities without delivery
of a supplement describing the method and terms of the offering of the
securities.
Our principal place of business is 116 Huntington Avenue, Boston,
Massachusetts 02116 and our telephone number is (617) 375-7500.
The date of this prospectus is June 22, 2000
<PAGE>
------------
TABLE OF CONTENTS
------------
<TABLE>
<S> <C>
About This Prospectus....................................................... (i)
Cautionary Note Regarding Forward-Looking Statements........................ (i)
American Tower.............................................................. 1
Risk Factors................................................................ 2
Ratio of Earnings to Fixed Charges.......................................... 6
Use of Proceeds............................................................. 6
Description of Certain Indebtedness......................................... 7
Description of Debt Securities.............................................. 9
</TABLE>
<TABLE>
<S> <C>
Description of Capital Stock................................................ 15
Description of Depositary Shares............................................ 21
Description of Warrants..................................................... 25
Plan of Distribution........................................................ 26
Validity of the Offered Securities.......................................... 27
Experts..................................................................... 27
Where You Can Find More Information......................................... 27
Documents Incorporated By Reference......................................... 28
</TABLE>
You should rely only on the information incorporated by reference or
provided in this document. We have not authorized anyone else to provide you
with different information. We are not making an offer of these securities in
any jurisdiction where it is unlawful. You should not assume that the
information in this prospectus is accurate as of any date other than the date
on the front of this document.
ABOUT THIS PROSPECTUS
This prospectus is part of a registration statement we filed with the SEC
using a "shelf" registration process. Under this shelf process, we may sell any
combination of the securities described in this prospectus in one of more
offerings up to a total dollar amount of proceeds of $1.0 billion. This
prospectus provides you with a general description of the securities we may
offer. Each time we sell securities, we will provide a prospectus supplement
containing specific information about the terms of that offering. The
prospectus supplement may also add, update, or change information contained in
this prospectus. You should read both this prospectus and any prospectus
supplement together with additional information described under the heading
"Where You Can Find More Information" on page 27 and "Documents Incorporated By
Reference" on page 28.
CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS
We have made and incorporated by reference forward-looking statements in
this document. Forward-looking statements include those regarding our goals,
beliefs, plans or current expectations and other statements contained regarding
matters that are not historical facts. For example, when we use the words
believe, expect, anticipate or similar expressions, we are making forward-
looking statements. Forward-looking statements include statements concerning:
. the outcome of our growth strategy,
. future results of operations,
. liquidity and capital expenditures,
. construction and acquisition activities,
. debt levels and the ability to obtain financing and make payments on our
debt,
. regulatory developments and competitive conditions in the communications
site and wireless carrier industries,
. projected growth of the wireless communications and wireless carrier
industries,
. dependence on demand for satellites for Internet data transmission, and
. general economic conditions.
Our forward-looking statements are subject to risks and uncertainties. You
should note that many factors, some of which are discussed elsewhere in this
prospectus or in the documents we have incorporated by reference, could affect
us in the future and could cause our results to differ materially from those
expressed in our forward-looking statements. For a discussion of some of these
factors, please read carefully the information under "Risk Factors" beginning
on page 2. We are not required to release publicly the results of any revisions
to these forward-looking statements we may make to reflect future events or
circumstances.
i
<PAGE>
AMERICAN TOWER
We are a wireless communications and broadcast infrastructure company
operating in three business segments.
. We operate a leading network of communications towers and are the
largest independent operator of broadcast towers in North America.
Giving effect as of June 1, 2000 to our pending transactions, we have
approximately 10,600 multi-user sites in the United States, Mexico and
Canada, including approximately 300 broadcast tower sites.
. We provide comprehensive network development services for wireless
service providers and broadcasters. We offer full turnkey network
development solutions to our customers, consisting of radio frequency
engineering, network design, site acquisition, zoning and other
regulatory approvals, construction management, tower construction,
component part sales and antenna installation.
. We provide domestic and international satellite and Internet protocol
network transmission services worldwide. We own and operate more than
160 antennas accessing most major satellite systems from U.S. teleport
locations in Arizona, California, Massachusetts, New Jersey, Texas,
Washington state and Washington, D.C.
We estimate that our three business segments accounted for the following
percentages of pro forma 1999 operating revenues:
. Rental and management--53.0%,
. Network development services--27.0%, and
. Satellite and Internet protocol network transmission services--20.0%.
1
<PAGE>
RISK FACTORS
You should consider carefully the following factors and other information in
this prospectus before deciding to invest in our securities.
If we cannot keep raising capital, our growth will be impeded.
Without additional capital, we would need to curtail our acquisition and
construction programs. We expect to use borrowed funds to satisfy most of our
capital needs. However, we must continue to satisfy financial ratios and to
comply with financial and other covenants in order to do so. If our revenues
and cash flow do not meet expectations, we may lose our ability to borrow
money. These same factors, as well as market conditions beyond our control,
could make it difficult or impossible for us to sell securities as an
alternative to borrowing.
Meeting payments on our large debt could be a burden to us.
Our high debt level makes us vulnerable to downturns in our operations. This
high debt level requires us to use most of our cash flow to make interest and
principal payments. If we do not generate sufficient cash flow through our
operations to make interest and principal payments, we may be forced to sell
debt or equity securities or sell some of our core assets. This could be
harmful to our business and our securityholders. Market conditions or our own
financial situation may require us to make these sales on unattractive terms.
Demand for tower space may be beyond our control.
Many of the factors affecting the demand for tower space, and therefore our
cash flow, are beyond our control. Those factors include:
. consumer demand for wireless services,
. the financial condition of wireless service providers and their
preference for owning or leasing antennae sites,
. the growth rate of wireless communications or of a particular wireless
segment,
. the number of wireless service providers in a particular segment,
nationally or locally,
. governmental licensing of broadcast rights,
. zoning, environmental and other government regulations, and
. technological changes.
Roaming and resale arrangements could also adversely affect demand. These
arrangements enable a wireless service provider to serve customers outside its
license area through agreements with other providers. Wireless providers might
consider roaming and resale arrangements preferable to leasing antennae space.
New tower construction, particularly build-to-suit projects, involves
uncontrollable risks and increasing competition.
Our increasing focus on major build-to-suit projects for wireless service
providers entails several unique risks. First is our greater dependence on a
limited number of customers. In addition, although we have the benefit of an
anchor tenant in build-to-suit projects, we may not be able to find a
sufficient number of additional tenants. In fact, one reason wireless service
providers may prefer build-to-suit arrangements is to share or escape the costs
of an undesirable site. A site may be undesirable because it has high
construction costs or other providers may consider it a poor location.
2
<PAGE>
Our expanded construction activities also involve other substantial risks.
These risks include:
. increasing our debt and the amount of payments on that debt,
. uncontrollable risks that could delay or increase the cost of a project,
. increasing competition for construction sites and experienced tower
construction companies, resulting in significantly higher costs and
failure to meet time schedules,
. failure to meet time schedules that could result in our paying
significant penalties to prospective tenants, particularly in build-to-
suit situations, and
. possible lack of sufficient experienced personnel to manage an expanded
construction program.
We cannot control the main factors that can prevent, delay or increase the
cost of construction. These factors include:
. zoning and local permitting requirements,
. environmental group opposition,
. availability of skilled construction personnel and construction
equipment,
. adverse weather conditions, and
. federal regulations.
Our acquisition strategy involves increasing acquisition costs, high debt
levels and potential management and integration issues.
Increased competition, which we believe will continue, has resulted in
substantially higher acquisition costs, particularly for towers being sold by
wireless service providers. These prices, in turn, result in high debt and debt
service requirements. Equally important, the increased size of our acquisitions
from wireless service providers could create problems we have not faced in the
past. These include:
. dependence on a limited number of customers,
. lease and control provisions more favorable to the wireless service
provider than those we give our tenants generally,
. integration of major national networks into our operational systems,
. demands on managerial personnel that could divert their attention from
other aspects of our business, and
. potential antitrust constraints, either in local markets or on a
regional or national basis, that could impede future acquisitions or
require selective divestitures at unfavorable prices.
An additional risk we face when acquiring large numbers of towers in one
transaction is that some of these towers may have limited marketing potential.
For example, towers may not be marketable because of location.
Covenants in our credit facilities could impede our growth strategy and
restrict our ability to pay interest on or redeem our notes.
Our growth strategy may be impaired by restrictive covenants in our credit
facilities. The most significant of these covenants impose limits on our
aggregate borrowings, including in the case of the parent company, the type and
amount of borrowings. We are also required to meet certain financial ratios and
comply with all of the financial and other covenants in order to borrow funds.
Certain types of acquisitions and investments in other companies are limited.
Events beyond our control may affect our ability to meet these requirements. If
these covenants restrict our ability to borrow funds, acquisitions and
construction will be impeded.
3
<PAGE>
Our credit facilities also restrict the ability of our subsidiaries to pay
dividends or make other distributions to us and prohibit those dividends and
other distributions during periods of default. Since we are a holding company,
with no independent operations, we are dependent on our subsidiaries for funds
to pay interest and principal on our notes, including any debt securities we
offer pursuant to this prospectus. In addition, our credit facilities require
us to invest 100% of all debt and equity offerings, public or private, in our
borrower subsidiaries.
Our existing credit facilities prohibit us from redeeming or repurchasing
any debt or equity securities for cash. This will probably require us to elect
to repurchase currently outstanding notes with Class A common stock on the
repurchase dates and to obtain lender consent in order to repurchase currently
outstanding notes upon any change in control. This same limitation could impact
our ability to redeem or repurchase any securities we may offer pursuant to
this prospectus.
We are dependent on key personnel and would be hurt if they leave.
The loss of our chief executive officer, Steven B. Dodge, and other
executive officers has a greater likelihood of having a material adverse effect
upon us than it would on most other companies of our size. Our growth strategy
is highly dependent on the efforts of Mr. Dodge and our other executive
officers. Our ability to raise capital is dependent in part on the reputation
of Mr. Dodge. You should be aware that we have not entered into employment
agreements with Mr. Dodge or most of our other executive officers. We may not
be able to retain our executive officers, including those with employment
agreements, or other key personnel or prevent them from competing with us if
they did leave.
Expanding operations into foreign countries could create certain operational
and financial risks.
Our recent expansion into Canada and Mexico, and other possible foreign
operations in the future, could result in adverse financial consequences and
operational problems not experienced in the United States. We have made a
substantial loan to a Mexican company and are committed to construct a sizable
number of towers in that country. We have also invested in a Canadian joint
venture that intends to acquire and construct towers in that country. We may
engage in comparable transactions in other countries. Among the risks of
foreign operations are governmental expropriation and regulation, inability to
repatriate earnings or other funds, currency fluctuations, difficulty in
recruiting trained personnel, and language and cultural differences that could
impair management control and operations.
New technologies could make our tower antenna leasing services less desirable
to potential tenants.
Mobile satellite systems and other new technologies could compete with land-
based wireless communications systems, thereby reducing the demand for tower
lease space and other services we provide. The Federal Communications
Commission has granted license applications for several low-earth orbiting
satellite systems that are intended to provide mobile voice or data services.
In addition, the emergence of new technologies could reduce the need for tower-
based transmission and reception and have an adverse affect on our operations.
The development and implementation of signal combining technologies, which
permit one antenna to service two different transmission frequencies and,
thereby, two customers, may reduce the need for tower-based broadcast
transmission and hence demand for our antenna space. The growth in delivery of
video services by direct broadcast satellites could also adversely affect
demand for our antenna space.
Demand for teleport services is subject to technological, competitive and
regulatory factors beyond our control.
Demand for teleport services by its primary historical base of video
customers has been diverted to fiber optic transmission services in some
instances. Teleport transmission services for Internet-related entities,
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however, have increased. Revenues from these new technologies may not continue
to grow and may decline if other forms of transmission, fiber optic or
otherwise, are introduced. In addition, our teleport satellite operations are
dependent upon maintaining valid FCC licensing.
We could be harmed if perceived health risks from radio emissions are
substantiated.
If a connection between radio emissions and possible negative health
effects, including cancer, were established, we would be materially and
adversely affected. The results of several substantial studies by the
scientific community in recent years have been inconclusive. The FCC and an
industry association have recently undertaken a new study to determine if radio
emissions involve health risks. We and the lessees of antennae sites on our
towers are subject to government regulations relating to radio frequency
emissions. We do not maintain any significant insurance with respect to these
matters.
Pro forma financial information is based on estimates and assumptions and may
not be indicative of actual future results.
Our actual future results could vary materially and adversely from those
reflected in the pro forma financial information we have incorporated by
reference in this prospectus. That information is based upon a number of
assumptions we believe to be reasonable. However, our two most significant
acquisitions, the AirTouch and AT&T transactions, do not involve the
acquisition of businesses. The towers involved in those acquisitions were
operated as part of the wireless service divisions of AirTouch and AT&T. Those
companies did not maintain extensive separate financial records or prepare
financial statements for the operation of those towers. We have, however,
compiled certain revenue and expense data of those towers in the pro forma
information incorporated by reference in this document. In the case of certain
expenses, we have estimated amounts based on both the limited information
provided by the carriers and our own experience with comparable towers. Neither
our auditors, AirTouch's auditors nor AT&T's auditors have expressed any
opinion or provided any form of assurance with respect to AirTouch's or AT&T's
historical data presented in the unaudited pro forma financial information.
We could have liability under environmental laws.
Under various federal, state and local environmental laws, we, as an owner,
lessee or operator of real estate, may be liable for the substantive costs of
remediating soil and groundwater contaminated by hazardous wastes. Some of
these laws impose responsibility and liability on us even if we did not cause
the contamination or even know about it. Almost all of the towers we own and
operate, other than roof top towers, are located on parcels of land, which
could result in substantial environmental liability. Our liability often will
continue even if we sell the property.
The debt will effectively rank junior to secured debt under our credit
facilities.
Our payment of principal and interest on any debt we may issue will
effectively rank junior to all existing and future debt under our credit
facilities. This is so because the debt under our credit facilities is issued
or guaranteed by our subsidiaries and secured by their assets. We have also
guaranteed that debt and secured our guaranty with our assets, including the
stock of our subsidiaries. Any debt we issue will also effectively rank junior
to all other existing and future debt of our subsidiaries. As a result, in the
event of our insolvency, liquidation or reorganization, or should any of that
debt be accelerated because of a default, we must pay that debt in full before
we can make any payment on any debt we may sell publicly.
No trading market may exist for any offered securities other than Class A
common stock.
No trading market for any offered securities other than Class A common stock
may exist and one may never develop. Accordingly, you may not be able to sell
those securities or sell them at an acceptable price. If a
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market were to develop, those offered securities could trade at prices that may
be higher or lower than your purchase price depending on many factors,
including prevailing interest rates, our operating results, the market for
similar securities, and, if those securities are convertible, exchangeable or
warrants, the market price of the Class A common stock. We do not intend to
list any offered securities other than Class A common stock on any securities
exchange or to seek approval for quotation through any automated quotation
system. One or more of the managing underwriters, if any, may decide to make a
market in the those offered securities. They would not, however, be obligated
to do so and may discontinue market making at any time. Therefore, any
liquidity may disappear and those offered securities may not be readily
marketable.
Control by our principal stockholders could deter mergers where you could get
more than current market price for your stock.
Control by Mr. Dodge and others may have the effect of discouraging a merger
or other takeover of our company in which holders of common stock may be paid a
premium for their shares over then-current market prices. Mr. Dodge, together
with a limited number of our directors, may be able to control or block the
vote on mergers and other matters submitted to the common stockholders.
Our common stock does not pay dividends.
We have never paid a dividend on our common stock and do not expect to pay
cash dividends in the foreseeable future. In addition, our credit facilities
effectively restrict the payment of cash dividends or other distributions and
the repurchase, redemption or other acquisition of equity securities.
RATIO OF EARNINGS TO FIXED CHARGES
For purposes of calculating this ratio, earnings consist of loss before
income taxes and extraordinary losses and fixed charges. Fixed charges consist
of capitalized interest, interest expense, amortization of debt discount and
related issuance costs and the component of rental expense that management
believes to be representative of the interest factor on that expense. For the
year ended December 31, 1998, interest expense included redeemable preferred
stock dividends of $3.1 million. We have not paid dividends on preferred stock
in any other period listed below. For each of the periods listed below, our
ratio of earnings to fixed charges was less than 1.0:1. We had a deficiency in
earnings to fixed charges in each period as follows (amounts in thousands):
<TABLE>
<CAPTION>
Period Deficiency
------ ----------
<S> <C>
Period from July 17, 1995 (incorporation) to December 31, 1995.......... $ 184
Year ended December 31, 1996............................................ 434
Year ended December 31, 1997............................................ 2,507
Year ended December 31, 1998............................................ 43,844
Year ended December 31, 1999............................................ 52,520
Three months ended March 31, 2000....................................... 53,595
</TABLE>
USE OF PROCEEDS
We expect to use net proceeds from the sale of the securities offered by us
primarily to finance construction and acquisitions. We also expect to use those
proceeds to finance general working capital requirements, including repayment
from time to time of borrowings under our credit facilities. Any borrowings so
repaid may be available in the future to finance construction and acquisitions
and other general corporate purposes. We intend to continue actively seeking
construction and acquisition prospects, including acquisitions of companies
outside of the United States engaged in businesses related to the tower
communications business in which we are not presently engaged.
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DESCRIPTION OF CERTAIN INDEBTEDNESS
Credit Facilities
The description below summarizes the more important terms of our borrowing
arrangements, as currently in effect. We refer to these as the credit
facilities. We have previously filed copies of the loan agreement governing the
credit facilities with the SEC. See "Where You Can Find More Information" on
page 27. You should refer to that agreement for the complete terms of the
credit facilities. Capitalized words used in the description below have
specialized meanings defined in that agreement.
Several of our principal operating subsidiaries have borrowed and expect to
continue to borrow under the credit facilities. We refer to those borrowers
collectively as the borrower subsidiaries. The lenders have committed to fund
up to $2.0 billion of loans under the credit facilities. The credit facilities
also contemplate possible additional borrowings of up to $500.0 million,
although the lenders are not committed to fund those borrowings. Borrowings
under the credit facilities are limited by (a) the cash flow of the borrower
subsidiaries and the Restricted Subsidiaries, (b) their construction costs of
Developing Towers, and (c) the aggregate number of Developing Towers and
AirTouch towers we acquire.
The credit facility is made up of three separate types of loans:
. a $650.0 million reducing revolving credit facility maturing on June 30,
2007,
. an $850.0 million multiple-draw term loan maturing on June 30, 2007, and
. a $500.0 million term loan maturing on December 31, 2007.
We are required to reduce the revolving credit commitments and to amortize
the term loans quarterly, commencing March 31, 2003, in increasing amounts
designed to repay the loans by maturity. We are also required to repay the
loans, and reduce the commitments, out of the proceeds of asset sales and sales
of equity or debt securities, by us or our subsidiaries, and out of cash flow.
We can repay the loans voluntarily at any time, without penalty.
We may incur indebtedness under the credit facilities for acquisitions,
construction and other capital expenditures, working capital and general
corporate purposes.
The credit facilities require compliance with financial coverage ratios that
measure Annualized Operating Cash Flow against Total Debt, Interest Expense,
Pro Forma Debt Service and Fixed Charges. The credit facilities contain other
financial and operational covenants and other restrictions with which the
borrower subsidiaries and the Restricted Subsidiaries must comply, whether or
not there are any borrowings outstanding. These include restrictions on
indebtedness, liens, capital expenditures, investments in Unrestricted
Subsidiaries, certain types of acquisitions, not including towers and
communications sites, and the ability of the borrower subsidiaries and the
Restricted Subsidiaries to pay dividends or make other distributions.
The credit facilities include two events of default that restrict us as the
parent company:
. we cannot have any Indebtedness for Money Borrowed outstanding other
than (a) the convertible notes issued in October 1999 and February 2000,
and (b) other Indebtedness for Money Borrowed in an aggregate amount not
to exceed $500.0 million and containing certain terms, and
. we are required to invest the net cash proceeds of any issue of Capital
Stock (other than pursuant to permitted acquisitions and up to $2.0
million under stock option plans) or Indebtedness as equity in the
borrower subsidiaries.
Our permitted Indebtedness for Money Borrowed must (a) be unsecured, (b)
have no scheduled payments of principal prior to June 30, 2008, (c) have no
required cash payments of interest and (d) have other terms and conditions
reasonably satisfactory to the Majority Lenders.
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We and the Restricted Subsidiaries have guaranteed all of the loans. We have
secured the loans by liens on substantially all assets of the borrower
subsidiaries and the Restricted Subsidiaries and all outstanding capital stock
and other debt and equity interests of our direct and indirect subsidiaries.
Convertible Notes
In October 1999, we issued 6.25% Convertible Notes due 2009 in an aggregate
principal amount of $300.0 million and 2.25% Convertible Notes due 2009 at an
issue price of $300.1 million, representing 70.52% of their principal amount at
maturity of $425.5 million. In February 2000, we issued 5.00% Convertible Notes
due 2010 in an aggregate principal amount of $450.0 million. We will accrete
each year as interest expense in our financial statements the difference
between the issue price and the principal amount at maturity of the 2.25%
notes.
The 6.25% notes are convertible into shares of Class A common stock at a
conversion price of $24.40 per share. The 2.25% notes are convertible into
shares of Class A common stock at a conversion price of $24.00 per share. The
5.00% notes are convertible into shares of Class A common stock at a conversion
price of $51.50 per share. The conversion prices are subject to adjustment in
certain customary circumstances.
We may not redeem the 6.25% notes prior to October 22, 2002. Thereafter, we
may redeem those notes, at our option, in whole or in part at a redemption
price initially of 103.125% of the principal amount. The redemption price
declines ratably immediately after October 15 of each following year to 100% of
the principal amount in 2005. We may not redeem the 2.25% notes prior to
October 22, 2003. Thereafter, we may redeem those notes, at our option, in
whole or in part at increasing redemption prices designed to reflect the
accrued original issue discount. We may not redeem the 5.00% notes prior to
February 20, 2003. Thereafter, we may redeem those notes, at our option, in
whole or in part at a redemption price initially of 102.50% of the principal
amount. The redemption price declines ratably immediately after February 15 of
each following year to 100% of the principal amount in 2006. We are also
required to pay accrued and unpaid interest in all redemptions of any series of
notes.
Holders may require us to repurchase all or any of their 6.25% notes on
October 22, 2006 at their principal amount, together with accrued and unpaid
interest. Holders may require us to repurchase all or any of their 2.25% notes
on October 22, 2003 at those notes' issue price plus accreted original issue
discount, together with accrued and unpaid interest. Holders may require us to
repurchase all or any of their 5.00% notes on February 20, 2007 at their
principal amount, together with accrued and unpaid interest. We may, at our
option, elect to pay the repurchase price of any series in cash or shares of
Class A common stock, or any combination thereof. Our credit facilities
restrict our ability to repurchase the convertible notes for cash.
The indentures under which the convertible notes are outstanding do not
contain any restrictions on the payment of dividends, the incurrence of debt or
liens or the repurchase of our equity securities or any financial covenants.
None of the notes are entitled to the benefit of any sinking fund. The 6.25%
notes, the 2.25% notes and the 5.00% notes are junior to debt under our credit
facilities and rank equally with each other.
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DESCRIPTION OF DEBT SECURITIES
The debt securities will be our unsecured direct obligations. They may be
senior or subordinated indebtedness. The debt securities will be issued under
one or more indentures between us and a trustee. Any indenture will be subject
to, and governed by, the Trust Indenture Act of 1939, as amended. We have filed
with the registration statement relating to the offered debt securities a form
of indenture relating to our senior securities and a form of indenture relating
to our senior subordinated securities and subordinated securities. The
statements made in this prospectus relating to any indenture and the debt
securities to be issued under any indenture are summaries of certain
anticipated provisions of the indentures and do not purport to be complete.
They are subject to, and are qualified in their entirety by reference to the
indentures and the debt securities.
General
Our senior debt securities will rank equally with other indebtedness of ours
that is not subordinated. If we issue subordinated debt securities, they will
be subordinated to senior indebtedness, as defined in the applicable prospectus
supplement, and may rank equally with any other subordinated indebtedness. They
may, however, also be subordinated to senior subordinated securities. See "--
Subordination" on page 14.
We may issue the debt securities without limit as to aggregate principal
amount, in one or more series, in each case as we establish or one or more
supplemental indentures provides. We need not issue all debt securities of one
series at the same time. Unless we otherwise provide, we may reopen a series,
without the consent of the holders of such series, for issuances of additional
securities of that series.
We anticipate that any indenture will provide that we may, but need not,
designate more than one trustee under an indenture, each with respect to one or
more series of debt securities. Any trustee under any indenture may resign or
be removed with respect to one or more series of debt securities, and we may
appoint a successor trustee to act with respect to that series.
The applicable prospectus supplement will describe the specific terms
relating to the series of debt securities we will offer, including, where
applicable, the following:
. the title and series designation and whether they are senior securities,
senior subordinated securities or subordinated securities,
. the aggregate principal amount of the securities,
. the percentage of the principal amount at which we will issue the debt
securities and, if other than the principal amount of the debt
securities, the portion of the principal amount of the debt securities
payable upon maturity of the debt securities,
. if convertible, the initial conversion price, the conversion period and
any other terms governing such conversion,
. the stated maturity date,
. any fixed or variable interest rate or rates per annum,
. the date from which interest may accrue and any interest payment dates,
. any sinking fund requirements,
. any provisions for redemption, including the redemption price and any
remarketing arrangements,
. whether the securities are denominated or payable in United States
dollars or a foreign currency or units of two or more foreign
currencies,
. the events of default and covenants of such securities, to the extent
different from those described in this prospectus,
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. whether we will issue the debt securities in certificated or book-entry
form,
. whether the debt securities will be in registered or bearer form and, if
in registered form, the denominations if other than in even multiples of
$1,000 and, if in bearer form, the denominations and terms and
conditions relating thereto,
. whether we will issue any of the debt securities in permanent global
form and, if so, the terms and conditions, if any, upon which interests
in the global security may be exchanged for the individual debt
securities represented by the global security,
. the applicability, if any, of the defeasance and covenant defeasance
provisions described in this prospectus or any prospectus supplement,
. whether we will pay additional amounts on the securities in respect of
any tax, assessment or governmental charge and, if so, whether we will
have the option to redeem the debt securities instead of making this
payment, and
. the subordination provisions, if any, relating to the debt securities.
We may issue debt securities at less than the principal amount payable upon
maturity. We refer to these securities as "original issue discount securities."
If material or applicable, we will describe in the applicable prospectus
supplement special U.S. federal income tax, accounting and other considerations
applicable to original issue discount securities.
Except as described under "--Merger, Consolidation or Sale of Assets" on
page 11 or as may be set forth in any prospectus supplement, an indenture will
not contain any other provisions that would limit our ability to incur
indebtedness or that would afford holders of the debt securities protection in
the event of a highly leveraged or similar transaction involving us or in the
event of a change of control. You should review carefully the applicable
prospectus supplement for information with respect to events of default and
covenants applicable to the securities being offered.
Denominations, Interest, Registration and Transfer
Unless otherwise described in the applicable prospectus supplement, we will
issue the debt securities of any series that are registered securities in
denominations that are even multiples of $1,000, other than global securities,
which may be of any denomination.
Unless otherwise specified in the applicable prospectus supplement, we will
pay the interest, principal and any premium at the corporate trust office of
the trustee. At our option, however, we may make payment of interest by check
mailed to the address of the person entitled to the payment as it appears in
the applicable register or by wire transfer of funds to that person at an
account maintained within the United States.
If we do not punctually pay or duly provide for interest on any interest
payment date, the defaulted interest will be paid either:
. to the person in whose name the debt security is registered at the close
of business on a special record date the applicable trustee will fix, or
. in any other lawful manner, all as the applicable indenture describes.
You may have your debt securities divided into more debt securities of
smaller denominations or combined into fewer debt securities of larger
denominations, as long as the total principal amount is not changed. We call
this an "exchange."
You may exchange or transfer debt securities at the office of the applicable
trustee. The trustee acts as our agent for registering debt securities in the
names of holders and transferring debt securities. We may change this
appointment to another entity or perform it ourselves. The entity performing
the role of maintaining the list of registered holders is called the "security
registrar." It will also perform transfers.
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You will not be required to pay a service charge to transfer or exchange
debt securities, but you may be required to pay for any tax or other
governmental charge associated with the exchange or transfer. The security
registrar will make the transfer or exchange only if it is satisfied with your
proof of ownership.
Merger, Consolidation or Sale of Assets
Under any indenture, we are generally permitted to consolidate or merge with
another company. We are also permitted to sell substantially all of our assets
to another company, or to buy substantially all of the assets of another
company. However, we may not take any of these actions unless all the following
conditions are met:
. If we merge out of existence or sell our assets, the other company must
be a corporation, partnership or other entity organized under the laws
of a State or the District of Columbia or under federal law. The other
company must agree to be legally responsible for the debt securities.
. The merger, sale of assets or other transaction must not cause a default
on the debt securities. In addition, we must not already be in default,
unless the merger or other transaction would cure the default. A default
for this purpose would include any event that would be an event of
default if the requirements for giving us default notice or our default
having to exist for a specific period of time were disregarded.
Events of Default and Related Matters
Events of Default. The term "event of default" means any of the following:
. We do not pay the principal or any premium on a debt security on its due
date.
. We do not pay interest on a debt security within 30 days of its due
date.
. We do not deposit any sinking fund payment on its due date.
. We remain in breach of any other term of the applicable indenture for 60
days after we receive a notice of default stating we are in breach.
Either the trustee or holders of 25% of the principal amount of debt
securities of the affected series may send the notice.
. We file for bankruptcy or certain other events in bankruptcy, insolvency
or reorganization occur.
. Any other event of default described in the applicable prospectus
supplement occurs.
Remedies If an Event of Default Occurs. If an event of default has occurred
and has not been cured, the trustee or the holders of at least 25% in principal
amount of the debt securities of the affected series may declare the entire
principal amount of all the debt securities of that series to be due and
immediately payable. We call this a declaration of acceleration of maturity. If
an event of default occurs because of certain events in bankruptcy, insolvency
or reorganization, the principal amount of all the debt securities of that
series will be automatically accelerated, without any action by the trustee or
any holder. At any time after the trustee or the holders have accelerated any
series of debt securities, but before a judgment or decree for payment of the
money due has been obtained, the holders of at least a majority in principal
amount of the debt securities of the affected series may, under certain
circumstances, rescind and annul such acceleration.
Except in cases of default, where the trustee has some special duties, the
trustee is not required to take any action under the applicable indenture at
the request of any holders unless the holders offer the trustee reasonable
protection from expenses and liability. We refer to this as an indemnity. If
reasonable indemnity is provided, the holders of a majority in principal amount
of the outstanding securities of the relevant series may direct the time,
method and place of conducting any lawsuit or other formal legal action seeking
any remedy available to the trustee. These majority holders may also direct the
trustee in performing any other action under the applicable indenture, subject
to certain limitations.
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Before you bypass the trustee and bring your own lawsuit or other formal
legal action or take other steps to enforce your rights or protect your
interests relating to the debt securities, the following must occur:
. You must give the trustee written notice that an event of default has
occurred and remains uncured.
. The holders of at least 25% in principal amount of all outstanding
securities of the relevant series must make a written request that the
trustee take action because of the default, and must offer reasonable
indemnity to the trustee against the cost and other liabilities of
taking that action.
. The trustee must have not taken action for 60 days after receipt of the
above notice and offer of indemnity.
However, you are entitled at any time to bring a lawsuit for the payment of
money due on your security after its due date.
We will furnish to the trustee every year a written statement of certain of
our officers certifying that to their knowledge we are in compliance with the
applicable indenture and the debt securities, or else specifying any default.
Modification of an Indenture
There are three types of changes we can make to the indentures and the debt
securities:
Changes Requiring Your Approval. First, there are changes we cannot make to
your debt securities without your specific approval. Following is a list of
those types of changes:
. change the stated maturity of the principal or interest on a debt
security,
. reduce any amounts due on a debt security,
. reduce the amount of principal payable upon acceleration of the maturity
of a debt security following a default,
. change the place or currency of payment on a debt security,
. impair your right to sue for payment,
. modify the subordination provisions, if any, in a manner that is adverse
to you,
. reduce the percentage of holders of debt securities whose consent is
needed to modify or amend an indenture,
. reduce the percentage of holders of debt securities whose consent is
needed to waive compliance with certain provisions of an indenture or to
waive certain defaults, and
. modify any other aspect of the provisions dealing with modification and
waiver of an indenture.
Changes Requiring a Majority Vote. The second type of change to an indenture
and the debt securities is the kind that requires a vote in favor by holders of
debt securities owning a majority of the principal amount of the particular
series affected. Most changes fall into this category, except for clarifying
changes and certain other changes that would not adversely affect holders of
the debt securities. We require the same vote to obtain a waiver of a past
default. However, we cannot obtain a waiver of a payment default or any other
aspect of an indenture or the debt securities listed in the first category
described above under "--Changes Requiring Your Approval" unless we obtain your
individual consent to the waiver.
Changes Not Requiring Approval. The third type of change does not require
any vote by holders of debt securities. This type is limited to clarifications
and certain other changes that would not adversely affect holders of the debt
securities.
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Further Details Concerning Voting. When taking a vote, we will use the
following rules to decide how much principal amount to attribute to a debt
security:
. For original issue discount securities, we will use the principal amount
that would be due and payable on the voting date if the maturity of the
debt securities were accelerated to that date because of a default.
. For debt securities whose principal amount is not known, we will use a
special rule for that security described in the applicable prospectus
supplement. An example is if the principal amount is based on an index.
. For debt securities denominated in one or more foreign currencies or
currency units, we will use the U.S. dollar equivalent.
Debt securities are not considered outstanding, and therefore not eligible
to vote, if we have deposited or set aside in trust for you money for their
payment or redemption or if we or one of our affiliates own them. Debt
securities are also not eligible to vote if they have been fully defeased as
described immediately below under "--Discharge, Defeasance and Covenant
Defeasance--Full Defeasance."
We are generally entitled to set any day as a record date for the purpose of
determining the holders of outstanding securities entitled to vote or take
other action under an indenture. If we set a record date, only persons who are
holders of outstanding securities of the applicable series on the record date
may vote or take the action. Moreover, the applicable holders must vote or take
the action within 180 days following the record date or another period that we
may specify. We may shorten or lengthen this period from time to time.
Discharge, Defeasance and Covenant Defeasance
Discharge. We may discharge some obligations to holders of any series of
debt securities that either have become due and payable or will become due and
payable within one year, or scheduled for redemption within one year, by
irrevocably depositing with the trustee, in trust, funds in the applicable
currency in an amount sufficient to pay the debt securities, including any
premium and interest.
Full Defeasance. We can, under particular circumstances, effect a full
defeasance of your series of debt securities. By this we mean we can legally
release ourselves from any payment or other obligations on the debt securities
if we put in place the following arrangements to repay you:
. We must deposit in trust for your benefit and the benefit of all other
direct holders of the debt securities a combination of money and U.S.
government or U.S. government agency notes or bonds that will generate
enough cash to make interest, principal and any other payments on the
debt securities on their various due dates.
. The current federal tax law must be changed or an IRS ruling must be
issued permitting the above deposit without causing you to be taxed on
the debt securities any differently than if we did not make the deposit
and just repaid the debt securities ourselves. Under current federal tax
law, the deposit and our legal release from the debt securities would be
treated as though we took back your debt securities and gave you your
share of the cash and notes or bonds deposited in trust. In that event,
you could recognize gain or loss on the debt securities you give back to
us.
. We must deliver to the trustee a legal opinion confirming the tax law
change described above.
If we did accomplish full defeasance, you would have to rely solely on the
trust deposit for repayment on the debt securities. You could not look to us
for repayment in the unlikely event of any shortfall. Conversely, the trust
deposit would most likely be protected from claims of our lenders and other
creditors if we ever became bankrupt or insolvent. You would also be released
from any subordination provisions.
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Covenant Defeasance. Under current federal tax law, we can make the same
type of deposit described above and be released from some of the restrictive
covenants in the debt securities. This is called "covenant defeasance." In that
event, you would lose the protection of those restrictive covenants but would
gain the protection of having money and securities set aside in trust to repay
the securities and you would be released from any subordination provisions. In
order to achieve covenant defeasance, we must do the following:
. We must deposit in trust for your benefit and the benefit of all other
direct holders of the debt securities a combination of money and U.S.
government or U.S. government agency notes or bonds that will generate
enough cash to make interest, principal and any other payments on the
debt securities on their various due dates.
. We must deliver to the trustee a legal opinion confirming that under
current federal income tax law we may make the above deposit without
causing you to be taxed on the debt securities any differently than if
we did not make the deposit and just repaid the debt securities
ourselves.
If we accomplish covenant defeasance, the following provisions of an
indenture and the debt securities would no longer apply:
. Any covenants applicable to the series of debt securities and described
in the applicable prospectus supplement.
. Any subordination provisions.
. Certain events of default relating to breach of covenants and
acceleration of the maturity of other debt set forth in any prospectus
supplement.
If we accomplish covenant defeasance, you can still look to us for repayment
of the debt securities if a shortfall in the trust deposit occurred. If one of
the remaining events of default occurs, for example, our bankruptcy, and the
debt securities become immediately due and payable, there may be a shortfall.
Depending on the event causing the default, you may not be able to obtain
payment of the shortfall.
Subordination
We will set forth in the applicable prospectus supplement the terms and
conditions, if any, upon which any series of senior subordinated securities or
subordinated securities is subordinated to debt securities of another series or
to other indebtedness of ours. The terms will include a description of:
. the indebtedness ranking senior to the debt securities being offered,
. the restrictions, if any, on payments to the holders of the debt
securities being offered while a default with respect to the senior
indebtedness is continuing,
. the restrictions, if any, on payments to the holders of the debt
securities being offered following an event of default, and
. provisions requiring holders of the debt securities being offered to
remit some payments to holders of senior indebtedness.
Global Securities
If so set forth in the applicable prospectus supplement, we may issue the
debt securities of a series in whole or in part in the form of one or more
global securities that will be deposited with a depositary identified in the
prospectus supplement. We may issue global securities in either registered or
bearer form and in either temporary or permanent form. The specific terms of
the depositary arrangement with respect to any series of debt securities will
be described in the prospectus supplement.
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DESCRIPTION OF CAPITAL STOCK
The description below summarizes the more important terms of our capital
stock. Because this section is a summary, it does not describe every aspect of
the capital stock. This summary is subject to and qualified in its entirety by
reference to the provisions of our Restated Certificate of Incorporation, as
amended, including by any applicable certificates of designation. We refer to
it as the restated certificate. We have incorporated by reference a copy of the
restated certificate as an exhibit to the registration statement of which this
prospectus is a part. This summary is subject to and qualified by reference to
the description of the particular terms of your series of preferred stock
described in the applicable prospectus supplement.
General
Our authorized capital stock consists of 20,000,000 shares of preferred
stock, $.01 par value per share, 500,000,000 shares of Class A common stock,
$.01 par value per share, 50,000,000 shares of Class B common stock, $.01 par
value per share, and 10,000,000 shares of Class C common stock, $.01 par value
per share.
Preferred Stock
General. Our board of directors will determine the designations,
preferences, limitations and relative rights of the 20,000,000 authorized and
unissued shares of preferred stock. These include:
. the distinctive designation of each series and the number of shares that
will constitute the series,
. the voting rights, if any, of shares of the series,
. the dividend rate on the shares of the series, any restriction,
limitation or condition upon the payment of the dividends, whether
dividends will be cumulative, and the dates on which dividends are
payable,
. the prices at which, and the terms and conditions on which, the shares
of the series may be redeemed, if the shares are redeemable,
. the purchase or sinking fund provisions, if any, for the purchase or
redemption of shares of the series,
. any preferential amount payable upon shares of the series upon our
liquidation or the distribution of our assets,
. if the shares are convertible, the price or rates of conversion at
which, and the terms and conditions on which, the shares of the series
may be converted into other securities, and
. whether the series can be exchanged, at our option, into debt
securities, and the terms and conditions of any permitted exchange.
The issuance of preferred stock, or the issuance of rights to purchase
preferred stock, could discourage an unsolicited acquisition proposal. In
addition, the rights of holders of common stock will be subject to, and may be
adversely affected by, the rights of holders of any preferred stock that we may
issue in the future.
The following description of the preferred stock sets forth some general
terms and provisions of the preferred stock to which a prospectus supplement
may relate. The statements below describing the preferred stock are in all
respects subject to and qualified in their entirety by reference to the
applicable provisions of our restated certificate, including any applicable
certificates of designation, and our by-laws.
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The prospectus supplement will describe the specific terms as to each
issuance of preferred stock, including:
. the number of shares of the preferred stock offered,
. the offering price of the preferred stock,
. the dividend rate, when dividends will be paid, or the method of
determining the dividend rate if it is based on a formula or not
otherwise fixed,
. the date from which dividends on the preferred stock shall accumulate,
. the provisions for any auctioning or remarketing, if any, of the
preferred stock,
. the provision, if any, for redemption or a sinking fund,
. the liquidation preference per share,
. any listing of the preferred stock on a securities exchange,
. whether the preferred stock will be convertible and, if so, the security
into which it is convertible and the terms and conditions of conversion,
including the conversion price or the manner of determining it,
. whether interests in the preferred stock will be represented by
depositary shares as more fully described under "Description of
Depositary Shares" on page 21.
. a discussion of federal income tax considerations,
. the relative ranking and preferences of the preferred stock as to
dividend and liquidation rights,
. any limitations on issuance of any preferred stock ranking senior to or
on a parity with the series of preferred stock being offered as to
dividend and liquidation rights,
. any limitations on direct or beneficial ownership and restrictions on
transfer, and
. any other specific terms, preferences, rights, limitations or
restrictions of the preferred stock.
As described under "Description of Depositary Shares" on page 21, we may, at
our option, elect to offer depositary shares evidenced by depositary receipts.
If we elect to do this, each depositary receipt will represent a fractional
interest in a share of the particular series of the preferred stock issued and
deposited with a depositary. The applicable prospectus supplement will specify
that fractional interest.
Rank. Unless our board of directors otherwise determines and we so specify
in the applicable prospectus supplement, we expect that the preferred stock
will, with respect to dividend rights and rights upon liquidation, rank senior
to all common stock.
Dividends. Holders of preferred stock of each series will be entitled to
receive cash and/or stock dividends at the rates and on the dates shown in the
applicable prospectus supplement. Even though the preferred stock may specify a
fixed dividend, our board of directors must declare those dividends and they
may be paid only out of assets of legally available for payment. We will pay
each dividend to holders of record as they appear on our stock transfer books
on the record dates fixed by our board of directors. In the case of preferred
stock represented by depositary receipts, the records of the depositary
referred to under "Description of Depositary Shares" on page 21 will determine
the persons to whom dividends are payable.
Dividends on any series of preferred stock may be cumulative or
noncumulative, as provided in the applicable prospectus supplement. We refer to
each particular series, for ease of reference, as the applicable series.
Cumulative dividends will be cumulative from and after the date shown in the
applicable prospectus supplement. If our board of directors fails to declare a
dividend on any applicable series that is noncumulative, the holders will have
no right to receive, and we will have no obligation to pay, a dividend in
respect of the applicable dividend period, whether or not dividends on that
series are declared payable in the future.
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If the applicable series is entitled to a cumulative dividend, we may not
declare, or pay or set aside for payment, any full dividends on any other
series of preferred stock ranking, as to dividends, on a parity with or junior
to the applicable series, unless we declare, and either pay or set aside for
payment, full cumulative dividends on the applicable series for all past
dividend periods and the then current dividend period. If the applicable series
does not have a cumulative dividend, we must declare, and pay or set aside for
payment, full dividends for the then current dividend period only. When
dividends are not paid, or set aside for payment, in full upon any applicable
series and the shares of any other series ranking on a parity as to dividends
with the applicable series, we must declare, and pay or set aside for payment,
all dividends upon the applicable series and any other parity series
proportionately, in accordance with accrued and unpaid dividends of the several
series. For these purposes, accrued and unpaid dividends do not include unpaid
dividend periods on noncumulative preferred stock. No interest will be payable
in respect of any dividend payment that may be in arrears.
Except as provided in the immediately preceding paragraph, unless we
declare, and pay or set aside for payment, full cumulative dividends, including
for the then current period, on any cumulative applicable series, we may not
declare, or pay or set aside for payment, any dividends or other distributions
upon common stock or any other capital stock ranking junior to or on a parity
with the applicable series as to dividends or upon liquidation. The foregoing
restriction does not apply to dividends or other distributions paid in common
stock or other capital stock ranking junior to the applicable series as to
dividends and upon liquidation.
If the applicable series is noncumulative, we need only declare, and pay or
set aside for payment, the dividend for the then current period, before
declaring dividends or distributions on common stock or junior or parity
securities. In addition, under the circumstances that we could not declare a
dividend, we may not redeem, purchase or otherwise acquire for any
consideration any common stock or other parity or junior capital stock, except
upon conversion into or exchange for common stock or other junior capital
stock.
We may, however, make purchases and redemptions otherwise prohibited
pursuant to certain redemptions or pro rata offers to purchase the outstanding
shares of the applicable series and any other parity series of preferred stock.
We will credit any dividend payment made on an applicable series first
against the earliest accrued but unpaid dividend due with respect to the
series.
Redemption. We may have the right or may be required to redeem one or more
series of preferred stock, as a whole or in part, in each case upon the terms,
if any, and at the times and at the redemption prices shown in the applicable
prospectus supplement.
Liquidation Preference. The applicable prospectus supplement will show the
liquidation preference of the applicable series. Upon any voluntary or
involuntary liquidation, before any distribution may be made to the holders of
common stock or any other capital stock ranking junior in the distribution of
assets upon any liquidation to the applicable series, the holders of that
series will be entitled to receive, out of assets of ours legally available for
distribution to stockholders, liquidating distributions in the amount of the
liquidation preference, plus an amount equal to all dividends accrued and
unpaid. In the case of a noncumulative applicable series, accrued and unpaid
dividends include only the then current dividend period. After payment of the
full amount of the liquidating distributions to which they are entitled, the
holders of preferred stock will have no right or claim to any of our remaining
assets. If liquidating distributions shall have been made in full to all
holders of preferred stock, our remaining assets will be distributed among the
holders of any other capital stock ranking junior to the preferred stock upon
liquidation, according to their rights and preferences and in each case
according to their number of shares.
If, upon any voluntary or involuntary liquidation, our available assets are
insufficient to pay the amount of the liquidating distributions on all
outstanding shares of an applicable series and the corresponding amounts
payable on all shares of other capital stock ranking on a parity in the
distribution of assets with that series, then the holders of that series and
all other equally ranking capital stock shall share ratably in the distribution
in proportion to the full liquidating distributions to which they would
otherwise be entitled.
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For these purposes, our consolidation or merger with or into any other
corporation or other entity, or the sale, lease or conveyance of all or
substantially all of our property or business, will not be deemed to constitute
our liquidation.
Voting Rights. Holders of the preferred stock will not have any voting
rights, except as otherwise from time to time required by law or as indicated
in the applicable prospectus supplement.
Conversion Rights. We will show in the applicable prospectus supplement the
terms and conditions, if any, upon which you may, or we may require you to,
convert shares of any series of preferred stock into common stock or any other
class or series of capital stock will be shown. The terms will include the
number of shares of common stock or other securities into which the shares are
convertible, the conversion price, or the manner of determining it, the
conversion period, provisions as to whether conversion will be at the option of
the holders of the series or at our option, the events requiring an adjustment
of the conversion price, and provisions affecting conversion upon the
redemption of shares of the series.
Our Exchange Rights. We will show in the applicable prospectus supplement
the terms and conditions, if any, upon which we can require you to exchange
shares of any series of preferred stock for junior subordinated debt or other
debt securities. If an exchange is required, you will receive junior
subordinated debt or other debt securities with a principal amount equal to the
liquidation preference of the applicable series of preferred stock. The other
terms and provisions of the junior subordinated debt or other debt securities
will not be materially less favorable to you than those of the series of
preferred stock being exchanged.
Common Stock
Dividends. Holders of record of shares of common stock on the record date
fixed by our board of directors are entitled to receive dividends as declared
by our board of directors out of funds legally available for that purpose. No
dividends may be declared or paid in cash or property on any share of any class
of common stock, however, unless simultaneously the same dividend is declared
or paid on each share of the other classes of common stock. Dividends in the
form of shares of stock of any company, including our company or any of our
subsidiaries, are excepted from that requirement. In that case, the shares may
differ as to voting rights to the extent that voting rights then differ among
the different classes of common stock. In the case of any dividend payable in
shares of common stock, holders of each class of common stock are entitled to
receive the same percentage dividend, payable in shares of that class, as the
holders of each other class. Dividends and other distributions on common stock
are also subject to the rights of holders of any series of preferred stock that
may be outstanding from time to time and to the restrictions in our credit
facilities. See "--Dividend Restrictions" on page 19.
Voting Rights. Except as otherwise required by law and in the election of
directors, and subject to the rights of holders of any series of preferred
stock that may be outstanding from time to time, holders of shares of Class A
common stock and Class B common stock have the exclusive voting rights and will
vote as a single class on all matters submitted to a vote of the stockholders.
Each share of Class A common stock is entitled to one vote and each share of
Class B common stock is entitled to ten votes. The holders of the Class A
common stock, voting as a separate class, have the right to elect two
independent directors. The Class C common stock is nonvoting, except as
otherwise required by Delaware corporate law.
Delaware corporate law requires the affirmative vote of the holders of a
majority of the outstanding shares of any class or series of common stock to
approve, among other things, a change in the designations, preferences and
limitations of the shares of that class or series. The restated certificate,
however, requires the affirmative vote of the holders of not less than 66 2/3%
of the Class A common stock and Class B common stock, voting as a single class,
to amend most of the provisions of the restated certificate, including those
relating to the provisions of the various classes of common stock,
indemnification of directors, exoneration of directors for certain acts and the
super-majority provision.
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The restated certificate:
. limits the aggregate voting power of Steven B. Dodge and his controlled
entities to 49.99% of the aggregate voting power of all shares of
capital stock entitled to vote generally for the election of directors,
less the voting power represented by the shares of Class B common stock
acquired by Thomas H. Stoner, a director, and purchasers affiliated with
him in a January 1998 private offering and owned by them or certain
affiliates,
. prohibits future issuances of Class B common stock, except upon exercise
of then outstanding options and pursuant to stock dividends or stock
splits,
. limits transfers of Class B common stock to permitted transferees,
. provides for automatic conversion of the Class B common stock to Class A
common stock if the aggregate voting power of Mr. Dodge, Mr. Stoner and
their respective controlled entities falls below 21.3%, and
. requires the holders of a majority of Class A common stock to approve
amendments adversely affecting the Class A common stock.
Conversion Provisions. Shares of Class B common stock and Class C common
stock are convertible, at any time at the option of the holder, on a share for
share basis into shares of Class A common stock. The present owner of Class C
common stock can convert that stock only upon the occurrence of a conversion
event or with the consent of our board of directors. Shares of Class B common
stock automatically convert into shares of Class A common stock upon any sale,
transfer, assignment or other disposition other than (a) to permitted
transferees, or (b) pursuant to pledges but not to the pledgee upon
foreclosure. Permitted transferees include certain family members and other
holders of Class B common stock.
Liquidation Rights. Upon our liquidation, dissolution or winding up, the
holders of each class of common stock are entitled to share ratably in all
assets available for distribution after payment in full of creditors and
payment in full to any holders of the preferred stock then outstanding of any
amount required to be paid to them.
Other Provisions. The holders of common stock are not entitled to preemptive
or subscription rights. The shares of common stock presently outstanding are
validly issued, fully paid and nonassessable.
In any merger, consolidation or business combination, the holders of each
class of common stock must receive the identical consideration to that received
by holders of each other class of common stock. However, if shares of capital
stock or other securities of any other company are distributed, they may differ
as to voting rights to the same extent that voting rights then differ among the
different classes of our common stock.
No class of common stock may be subdivided, consolidated, reclassified or
otherwise changed unless, concurrently, the other classes of common stock are
subdivided, consolidated, reclassified or otherwise changed in the same
proportion and in the same manner.
Listing of Class A Common Stock. Our Class A common stock is traded on the
NYSE under the symbol "AMT."
Transfer Agent and Registrar. The transfer agent and registrar for our
common stock is Harris Trust and Savings Bank, 311 West Monroe Street, Chicago,
Illinois 60606. Its telephone number is (312) 461-4600.
Dividend Restrictions
Our credit facilities prohibit our borrower subsidiaries from paying cash
dividends or distributions, or from purchasing or otherwise acquiring their
capital stock or other equity interests. However, beginning on April 15, 2004,
if no default exists or would be created under the credit facilities, our
borrower subsidiaries may pay cash dividends or make other distributions of up
to 50% of excess cash flow, for the preceding calendar year.
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Delaware Business Combination Provisions
Under Delaware corporate law, the holders of at least 66 2/3% of the voting
stock not owned by the interested stockholder must approve certain business
combinations, including the issuance of equity securities, between a Delaware
corporation and the interested stockholder if it occurs within three years of
the date the person became an interested stockholder. The voting requirement
does not apply, however, if, before the acquisition, the corporation's board of
directors approved either the business combination or the transaction which
resulted in the person becoming an interested stockholder. Interested
stockholder means any person who owns, directly or indirectly, 15.0% or more of
the voting power of the corporation's shares of capital stock. The provision
does not apply to Mr. Dodge because our board of directors approved the
transaction pursuant to which he became an interested stockholder.
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DESCRIPTION OF DEPOSITARY SHARES
General
The description shown below and in any applicable prospectus supplement of
certain provisions of any deposit agreement and of the depositary shares and
depositary receipts representing depositary shares does not purport to be
complete and is subject to and qualified in its entirety by reference to the
forms of deposit agreement and depositary receipts relating to each applicable
series of preferred stock. The deposit agreement and the depositary receipts
contain the full legal text of the matters described in this section. We will
file a copy of those documents with the SEC at or before the time of the
offering of the applicable series of preferred stock. This summary also is
subject to and qualified by reference to the description of the particular
terms of your series of depositary shares described in the applicable
prospectus supplement.
We may, at our option, elect to offer fractional interests in shares of
preferred stock, rather than shares of preferred stock. If we exercise this
option, we will appoint a depositary to issue depositary receipts representing
those fractional interests. Preferred stock of each series represented by
depositary shares will be deposited under a separate deposit agreement between
us and the depositary. The prospectus supplement relating to a series of
depositary shares will show the name and address of the depositary. Subject to
the terms of the applicable deposit agreement, each owner of depositary shares
will be entitled to all of the dividend, voting, conversion, redemption,
liquidation and other rights and preferences of the preferred stock represented
by those depositary shares.
The depositary shares will be evidenced by depositary receipts issued
pursuant to the applicable deposit agreement. Upon surrender of depositary
receipts at the office of the depositary, and upon payment of the charges
provided in and subject to the terms of the deposit agreement, a holder of
depositary shares will be entitled to receive the shares of preferred stock
underlying the surrendered depositary receipts.
Dividends and Other Distributions
A depositary will be required to distribute all cash dividends or other cash
distributions received in respect of the applicable preferred stock to the
record holders of depositary receipts evidencing the related depositary shares
in proportion to the number of depositary receipts owned by the holders.
Fractions will be rounded down to the nearest whole cent.
If the distribution is other than in cash, a depositary will be required to
distribute property received by it to the record holders of depositary receipts
entitled thereto, unless the depositary determines that it is not feasible to
make the distribution. In that case, the depositary may, with our approval,
sell the property and distribute the net proceeds from the sale to the holders.
No distributions will be made on any depositary shares that represent
preferred stock converted or exchanged. The deposit agreement will also contain
provisions relating to the manner in which any subscription or similar rights
offered by us to holders of the preferred stock will be made available to
holders of depositary shares. All distributions are subject to obligations of
holders to file proofs, certificates and other information and to pay certain
charges and expenses to the depositary.
Withdrawal of Preferred Stock
You may receive the number of whole shares of your series of preferred stock
and any money or other property represented by those depositary receipts after
surrendering the depositary receipts at the corporate trust office of the
depositary. Partial shares of preferred stock will not be issued. If the
depositary shares that you surrender exceed the number of depositary shares
that represent the number of whole shares of preferred stock you wish to
withdraw, the depositary will deliver to you at the same time a new depositary
receipt evidencing the excess number of depositary shares. Once you have
withdrawn your preferred stock, you will not be
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entitled to re-deposit that preferred stock under the deposit agreement in
order to receive depositary shares. We do not expect that there will be any
public trading market for withdrawn shares of preferred stock.
Redemption of Depositary Shares
If we redeem a series of the preferred stock underlying the depositary
shares, the depositary will redeem those shares from the redemption proceeds
received by it. The depositary will mail notice of redemption not less than 30
and not more than 60 days before the date fixed for redemption to the record
holders of the depositary receipts evidencing the depositary shares at their
addresses appearing in the depositary's books. The redemption price per
depositary share will be equal to the applicable fraction of the redemption
price per share payable with respect to the series of the preferred stock. The
redemption date for depositary shares will be the same as that of the preferred
stock. If we are redeeming less than all of the depositary shares, the
depositary will select the depositary shares for redemption by lot or pro rata
as the depositary may determine.
After the date fixed for redemption, the depositary shares called for
redemption will no longer be deemed outstanding. All rights of the holders of
the depositary shares and the related depositary receipts will cease at that
time, except the right to receive the money or other property to which the
holders of depositary shares were entitled upon redemption. Receipt of the
money or other property is subject to surrender to the depositary of the
depositary receipts evidencing the redeemed depositary shares.
Voting of the Preferred Stock
Upon receipt of notice of any meeting at which the holders of the applicable
preferred stock are entitled to vote, a depositary will be required to mail the
information contained in the notice of meeting to the record holders of the
applicable depositary receipts. Each record holder of depositary receipts on
the record date, which will be the same date as the record date for the
preferred stock, will be entitled to instruct the depositary as to the exercise
of the voting rights pertaining to the amount of preferred stock represented by
the holder's depositary shares. The depositary will try, as practical, to vote
the shares as you instruct. We will agree to take all reasonable action that
the depositary deems necessary in order to enable it to do so. If you do not
instruct the depositary how to vote your shares, the depositary will abstain
from voting those shares.
Liquidation Preference
Upon our liquidation, whether voluntary or involuntary, each holder of
depositary shares will be entitled to the fraction of the liquidation
preference accorded each share of preferred stock represented by the depositary
shares, as shown in the applicable prospectus supplement.
Conversion or Exchange of Preferred Stock
The depositary shares will not themselves be convertible into or
exchangeable for common stock, preferred stock or any of our other securities
or property. Nevertheless, if so specified in the applicable prospectus
supplement, the depositary receipts may be surrendered by holders to the
applicable depositary with written instructions to it to instruct us to cause
conversion of the preferred stock represented by the depositary shares.
Similarly, if so specified in the applicable prospectus supplement, we may
require you to surrender all of your depositary receipts to the applicable
depositary upon our requiring the exchange of the preferred stock represented
by the depositary shares into our debt securities. We will agree that, upon
receipt of the instruction and any amounts payable in connection with the
conversion or exchange, we will cause the conversion or exchange using the same
procedures as those provided for delivery of preferred stock to effect the
conversion or exchange. If you are converting only a part of the depositary
shares, the depositary will issue you a new depositary receipt for any
unconverted depositary shares.
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Taxation
As owner of depositary shares, you will be treated for U.S. federal income
tax purposes as if you were an owner of the series of preferred stock
represented by the depositary shares. Therefore, you will be required to take
into account for U.S. federal income tax purposes income and deductions to
which you would be entitled if you were a holder of the underlying series of
preferred stock. In addition:
. no gain or loss will be recognized for U.S. federal income tax purposes
upon the withdrawal of preferred stock in exchange for depositary shares
as provided in the deposit agreement,
. the tax basis of each share of preferred stock issued to you as
exchanging owner of depositary shares will, upon exchange, be the same
as the aggregate tax basis of the depositary shares exchanged for the
preferred stock, and
. if you held the depositary shares as a capital asset at the time of the
exchange for preferred stock, the holding period for shares of the
preferred stock will include the period during which you owned the
depositary shares.
Amendment and Termination of a Deposit Agreement
We and the applicable depositary are permitted to amend the provisions of
the depositary receipts and the deposit agreement. However, the holders of at
least a majority of the applicable depositary shares then outstanding must
approve any amendment that adds or increases fees or charges or prejudices an
important right of holders. Every holder of an outstanding depositary receipt
at the time any amendment becomes effective, by continuing to hold the receipt,
will be bound by the applicable deposit agreement as amended.
Any deposit agreement may be terminated by us upon not less than 30 days'
prior written notice to the applicable depositary if a majority of each series
of preferred stock affected by the termination consents to the termination.
When that occurs, the depositary will be required to deliver or make available
to each holder of depositary receipts, upon surrender of the depositary
receipts held by the holder, the number of whole or fractional shares of
preferred stock as are represented by the depositary shares evidenced by the
depositary receipts, together with any other property held by the depositary
with respect to the depositary receipts. In addition, a deposit agreement will
automatically terminate if:
. all depositary shares outstanding it shall have been redeemed,
. there shall have been a final distribution in respect of the related
preferred stock in connection with our liquidation and the distribution
shall have been made to the holders of depositary receipts evidencing
the depositary shares underlying the preferred stock, or
. each of the shares of related preferred stock shall have been converted
or exchanged into securities not represented by depositary shares.
Charges of a Depositary
We will pay all transfer and other taxes and governmental charges arising
solely from the existence of a deposit agreement. In addition, we will pay the
fees and expenses of a depositary in connection with the initial deposit of the
preferred stock and any redemption of preferred stock. However, holders of
depositary receipts will pay any transfer or other governmental charges and the
fees and expenses of a depositary for any duties the holders request to be
performed that are outside of those expressly provided for in the applicable
deposit agreement.
Resignation and Removal of Depositary
A depositary may resign at any time by delivering to us notice of its
election to do so. In addition, we may at any time remove a depositary. Any
resignation or removal will take effect when we appoint a successor
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depositary and it accepts the appointment. We must appoint a successor
depositary within 60 days after delivery of the notice of resignation or
removal. A depositary must be a bank or trust company having its principal
office in the United States that has a combined capital and surplus of at least
$50 million.
Miscellaneous
A depositary will be required to forward to holders of depositary receipts
any reports and communications from us that are received by it with respect to
the related preferred stock.
Neither a depositary nor we will be liable if it is prevented from or
delayed in performing its obligations under a deposit agreement by law or any
circumstances beyond its control. Our obligations and those of the depositary
under a deposit agreement will be limited to performing their duties in good
faith and without gross negligence or willful misconduct. Neither we nor any
depositary will be obligated to prosecute or defend any legal proceeding in
respect of any depositary receipts, depositary shares or related preferred
stock unless satisfactory indemnity is furnished. We and each depositary will
be permitted to rely on written advice of counsel or accountants, on
information provided by persons presenting preferred stock for deposit, by
holders of depositary receipts, or by other persons believed in good faith to
be competent to give the information, and on documents believed in good faith
to be genuine and signed by a proper party.
If a depositary receives conflicting claims, requests or instructions from
any holders of depositary receipts, on the one hand, and us, on the other hand,
the depositary shall be entitled to act on the claims, requests or instructions
received from us.
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DESCRIPTION OF WARRANTS
We may issue, together with any other securities being offered or
separately, warrants entitling the holder to purchase from or sell to us, or to
receive from us the cash value of the right to purchase or sell, debt
securities, preferred stock, depositary shares or common stock. We and a
warrant agent will enter a warrant agreement pursuant to which the warrants
will be issued. The warrant agent will act solely as our agent in connection
with the warrants and will not assume any obligation or relationship of agency
or trust for or with any holders or beneficial owners of warrants. We will file
a copy of the warrants and the warrant agreement with the SEC at or before the
time of the offering of the applicable series of warrants.
In the case of each series of warrants, the applicable prospectus supplement
will describe the terms of the warrants being offered thereby. These include
the following, if applicable:
. the offering price,
. the number of warrants offered,
. the securities underlying the warrants,
. the exercise price, the procedures for exercise of the warrants and the
circumstances, if any, that will deem the warrants to be automatically
exercised,
. the date on which the warrants will expire,
. federal income tax consequences,
. the rights, if any, we have to redeem the warrant,
. the name of the warrant agent, and
. the other terms of the warrants.
Warrants may be exercised at the appropriate office of the warrant agent or
any other office indicated in the applicable prospectus supplement. Before the
exercise of warrants, holders will not have any of the rights of holders of the
securities purchasable upon exercise and will not be entitled to payments made
to holders of those securities.
The warrant agreements may be amended or supplemented without the consent of
the holders of the warrants to which it applies to effect changes that are not
inconsistent with the provisions of the warrants and that do not adversely
affect the interests of the holders of the warrants. However, any amendment
that materially and adversely alters the rights of the holders of warrants will
not be effective unless the holders of at least a majority of the applicable
warrants then outstanding approve the amendment. Every holder of an outstanding
warrant at the time any amendment becomes effective, by continuing to hold the
warrant, will be bound by the applicable warrant agreement as amended. The
prospectus supplement applicable to a particular series of warrants may provide
that certain provisions of the warrants, including the securities for which
they may be exercisable, the exercise price, and the expiration date, may not
be altered without the consent of the holder of each warrant.
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PLAN OF DISTRIBUTION
We may sell the offered securities to one or more underwriters for public
offering and sale by them. We may also sell the offered securities to investors
directly or through agents. We will name any underwriter or agent involved in
the offer and sale of the offered securities in the applicable prospectus
supplement.
The distribution of offered securities may be effected from time to time in
one or more transactions at a fixed price or prices, which may be changed, at
market prices prevailing at the time of sale, at prices related to the market
prices, or at negotiated prices. In connection with the sale of offered
securities, underwriters or agents may receive or be deemed to have received
compensation from us or from purchasers in the form of underwriting discounts,
concessions or commissions. Underwriters may sell offered securities to or
through dealers, and dealers may receive compensation in the form of discounts,
concessions or commissions from the underwriters or from purchasers.
We will show any underwriting compensation paid by us to underwriters or
agents in connection with the offering of offered securities, and any
discounts, concessions or commissions allowed by underwriters to participating
dealers, in the applicable prospectus supplement. Underwriters, dealers and
agents participating in the distribution of the offered securities may be
deemed to be underwriters. Any discounts, concessions and commissions received
by them and any profit realized by them on resale of the offered securities may
be deemed to be underwriting discounts and commissions, under the Securities
Act of 1933. Underwriters, dealers and agents may be entitled, under agreements
entered into with us, to indemnification against and contribution toward
certain civil liabilities, including liabilities under the Securities Act.
If so indicated in the applicable prospectus supplement, we will authorize
underwriters or other persons acting as our agents to solicit offers by certain
institutions to purchase offered securities from us at the public offering
price shown in the applicable prospectus supplement pursuant to contracts
providing for payment and delivery on a future date or dates. Institutions with
whom contracts may be made include commercial and savings banks, insurance
companies, pension funds, investment companies, educational and charitable
institutions, and other institutions. We are required to approve any contracts
and the institutions that may become parties to them. Any contracts will be
subject to the condition that the purchase by an institution of the offered
securities will not at the time of delivery be prohibited under the law of any
jurisdiction in the United States to which the institution is subject. If a
portion of the offered securities is being sold to underwriters, the contract
may also be subject to the condition that we will have sold to the underwriters
the offered securities not sold for delayed delivery. The underwriters and the
other persons will not have any responsibility in respect of the validity or
performance of the contracts.
Unless otherwise specified in the related prospectus supplement, each series
of offered securities, other than shares of Class A common stock, will be a new
issue with no established trading market. Our Class A common stock is listed on
the NYSE and traded under the symbol "AMT." Any shares of Class A common stock
sold pursuant to a prospectus supplement will be listed on the NYSE, subject to
official notice of issuance. We may elect to list any other series or class of
offered securities on an exchange or on the Nasdaq National Market, but are not
obligated to do so. Any underwriters to whom offered securities are sold by us
for public offering and sale may make a market in those offered securities.
Underwriters will not be obligated to make any market, however, and may
discontinue any market making at any time without notice. No assurance can be
given as to the liquidity of or the trading markets for any offered securities.
Certain of the underwriters and their affiliates may engage in transactions
with and perform services for us in the ordinary course of business for which
they receive compensation.
The specific terms and manner of sale of the offered securities will be
shown or summarized in the applicable prospectus supplement.
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VALIDITY OF THE OFFERED SECURITIES
Sullivan & Worcester LLP, Boston, Massachusetts, will pass upon the validity
of the offered securities for us. As of June 1, 2000, Norman A. Bikales, a
member of the firm of Sullivan & Worcester LLP, owned 11,000 shares of our
Class A common stock and 41,490 shares of Class B common stock and had options
to purchase 20,000 shares of Class A common stock at $10.00 per share and
25,000 shares of Class A common stock at $23.813 per share. Mr. Bikales and
other partners and associates of that firm serve as secretary or assistant
secretaries of us and certain of our subsidiaries.
EXPERTS
The consolidated financial statements of American Tower Corporation
incorporated in this prospectus by reference from American Tower Corporation's
annual report on Form 10-K for the year ended December 31, 1999 have been
audited by Deloitte & Touche LLP, independent auditors, as stated in their
report, which is incorporated herein by reference, and has been so incorporated
in reliance upon the report of such firm given upon their authority as experts
in accounting and auditing.
We are incorporating the following financial statements by reference in this
prospectus from our Form 8-K dated March 30, 2000:
. The consolidated financial statements of UNIsite, Inc. and subsidiaries
as of December 31, 1999 and 1998 and for the three years ended December
31, 1999 have been incorporated by reference herein and in the
registration statement in reliance upon the report of KPMG LLP,
independent certified public accountants, incorporated by reference
herein, and upon the authority of said firm as experts in accounting and
auditing.
. The consolidated financial statements of ICG Satellite Services, Inc.
and subsidiary as of November 30, 1999 and for the eleven months ended
November 30, 1999 have been incorporated by reference herein and in the
registration statement in reliance upon the report of KPMG LLP,
independent certified public accountants, incorporated by reference
herein, and upon the authority of said firm as experts in accounting and
auditing.
WHERE YOU CAN FIND MORE INFORMATION
We file annual, quarterly and current reports, proxy statements and other
information with the SEC. You may read and copy any reports, statements or
other information on file at the SEC's public reference room at 450 Fifth
Street, N.W., Washington, D.C. 20549. You can request copies of those documents
upon payment of a duplicating fee to the SEC. You may also review a copy of the
registration statement at the SEC's regional offices in Chicago, Illinois and
New York, New York. Please call the SEC at 1-800-SEC-0330 for further
information on the operation of the public reference rooms. You can review our
SEC filings and the registration statement by accessing the SEC's Internet site
at http://www.sec.gov.
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DOCUMENTS INCORPORATED BY REFERENCE
The SEC allows us to "incorporate by reference" the information we file with
them, which means that we can disclose important information to you by
referring you to those documents. The information incorporated by reference is
considered to be part of this prospectus. Statements in this prospectus
regarding the contents of any contract or other document may not be complete.
You should refer to the copy of the contract or other document filed as an
exhibit to the registration statement. Later information filed with the SEC
will update and supersede information we have included or incorporated by
reference in this prospectus.
We incorporate by reference the documents listed below and any filings made
after the date of the original filing of the registration statement of which
this prospectus is a part made with the SEC under Section 13(a), 13(c), 14 or
15(d) of the Securities Exchange Act of 1934 until our offering is completed or
terminated:
. our Annual Report on Form 10-K for the fiscal year ended December 31,
1999,
. our Quarterly Report on Form 10-Q for the quarter ended March 31, 2000,
. our Current Reports on Form 8-K dated January 28, 2000, January 31,
2000, February 9, 2000, February 24, 2000, March 14, 2000, March 30,
2000, April 13, 2000, May 15, 2000, May 23, 2000 and June 12, 2000, and
. the description of our Class A common stock contained in our
registration statement on Form 8-A (File No. 001-14195), filed on June
4, 1998.
We will provide you with a copy of the information we have incorporated by
reference, excluding exhibits other than those to which we specifically refer.
You may obtain this information at no cost by writing or telephoning us at: 116
Huntington Avenue, Boston, Massachusetts 02116, (617) 375-7500, Attention:
Director of Investor Relations.
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[LOGO OF AMERICAN TOWER]
