<PAGE>
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(D) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported) June 29, 2000 (June 27, 2000)
------------- -------------
American Tower Corporation
----------------------------
(Exact Name of Registrant as Specified in Charter)
Delaware 001-14195 65-0723837
--------------------------------- ----------- ------------------
(State or Other Jurisdiction (Commission (IRS Employer
of Incorporation) File Number) Identification No.)
116 Huntington Avenue
Boston, Massachusetts 02116
--------------------------------------- ---------------
(Address of Principal Executive Offices) (Zip Code)
Registrant's telephone number, including area code: (617) 375-7500
--------------
<PAGE>
Item 5. Other Events
On June 27, 2000, American Tower Corporation (the "Company," "we," "us," or
"our") completed the sale of 12.5 million shares of Class A Common Stock to
Lehman Brothers Inc., as underwriter, for $41.125 per share. The Company expects
to use the net proceeds from the sale of approximately $513.6 million to finance
construction activities and pending and future acquisitions and for general
working capital purposes. The sale was made pursuant to the Company's shelf
registration statement on Form S-3 (File No. 333-37988) and is described in the
Prospectus Supplement dated June 22, 2000 (the "Prospectus Supplement") to the
Prospectus dated June 22, 2000 forming part of the registration statement.
In addition, certain stockholders of the Company sold an aggregate of
1,182,000 shares for $41.125 per share, or net proceeds of approximately $48.6
million. The selling stockholders consisted of (1) Steven B. Dodge, Chairman of
the board of directors, president and chief executive officer (500,000 shares);
(2) Alan L. Box, a director and executive vice president (75,000 shares); (3)
Steven J. Moskowitz, executive vice president and general manager of the
Company's Northeast region (25,000 shares); (4) Douglas C. Wiest, chief
operating officer, (32,000 shares); (5) Joseph L. Winn, chief financial officer
and treasurer (150,000 shares); (6) Chase Equity Associates, L.L.C. (154,991
shares); and (7) Chase Manhattan Capital, L.P. (245,009 shares). Arnold L.
Chavkin, a director, is a general partner of Chase Capital Partners, which
indirectly controls Chase Equity Associates and Chase Manhattan Capital. These
individual sales were pursuant to the provisions of Rule 144 under the
Securities Act of 1933.
We are providing the following financial data as supplemental information.
Selected Financial Data
We have derived the following selected financial data (which is identical to
pages S-10 and S-11 of the Prospectus Supplement) 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.
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.
2
<PAGE>
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.
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, 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.
3
<PAGE>
AMERICAN TOWER CORPORATION
SELECTED FINANCIAL DATA(1)
<TABLE>
<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>
<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.
4
<PAGE>
Unaudited Pro Forma Condensed Consolidated Financial Statements
The attached presents the Company's unaudited pro forma condensed
consolidated balance sheet as of March 31, 2000 and unaudited pro forma
condensed consolidated statements of operations for the year ended December 31,
1999 and the three months ended March 31, 2000 and notes thereto (all of which
are substantially identical to pages S-18 to S-25 of the Prospectus Supplement).
To the extent required, these pro forma statements have been adjusted for
the pro forma transactions and the sale of 12.5 million shares. The pro forma
transactions consist of:
o the OmniAmerica, TeleCom and UNIsite mergers and the AirTouch, AT&T and
ICG transactions,
o the Company's Class A Common Stock financings in February 1999, and
o the Company's convertible notes private placements in October 1999 and
February 2000.
The pro forma financial statements do not reflect all of the Company's
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 the Company's 1999 Annual Report on
Form 10-K, the Company's March 31, 2000 Quarterly Report on Form 10-Q and the
Company's 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, pro forma
information related to these transactions is provided, as the Company believes
such information is material.
The pro forma financial statements may not reflect the Company's financial
condition or its results of operations had these events actually occurred on he
dates specified. They also may not reflect the Company's financial condition or
results of operations as a separate, independent company during the periods
presented. Finally, they may not reflect the Company's future financial
condition or results of operations.
Unaudited Pro Forma Condensed Consolidated Balance Sheet 6
as of March 31, 2000 and Notes Thereto
Unaudited Pro Forma Condensed Consolidated Statement of Operations 8
for the Year Ended December 31, 1999 and Notes Thereto
Unaudited Pro Forma Condensed Consolidated Statement of Operations 11
for the Three Months Ended March 31, 2000 and Notes Thereto
5
<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.
6
<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. 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.
(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.
7
<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.
8
<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. We have not adjusted the pro forma condensed consolidated statement of
operations to reflect exchanges of our convertible notes for shares of our Class
A common stock in May and June 2000.
(a) To record the results of operations for the pro forma transactions. We have
adjusted the results of operations to: (1) reverse historical interest
expense associated with the companies or assets included in the pro forma
transactions, and (2) record an increase 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.
9
<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%.
10
<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.
11
<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. 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.
(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.
12
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
AMERICAN TOWER CORPORATION
(Registrant)
Date: June 29, 2000 By: /s/ Justin D. Benincasa
--------------------------
Name: Justin D. Benincasa
Title: Vice President and
Corporate Controller
13
