<PAGE>
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported): November 13, 2000 (November
13, 2000)
AMERICAN TOWER CORPORATION
(Exact name of registrant as specified in its charter)
Delaware 001-14195 65-0723837
(State or Other (Commission File Number) (IRS Employer
Jurisdiction of Identification No.)
Incorporation)
116 Huntington Avenue
Boston, Massachusetts 02116
(Address of Principal Executive Offices) (Zip Code)
(617) 375-7500
(Registrant's telephone number, including area code)
<PAGE>
Item 7. Financial Statements, Pro Forma Financial Information and Exhibits.
The attached presents American Tower Corporation's (the Company) unaudited
pro forma condensed consolidated balance sheet as of September 30, 2000 and
unaudited proforma condensed consolidated statements of operations for the
nine months ended September 30, 2000 and the year ended December 31, 1999 and
notes thereto.
The term pro forma transactions, as used in the Company's pro forma
condensed consolidated financial statements and notes thereto, is defined as
certain of the Company's major acquisitions and financings and includes the
following: the OmniAmerica merger, the Telecom merger, the UNIsite merger, the
ICG transaction, the AirTouch transaction, the AT&T transaction, the Company's
public offering of common stock and private placement of common stock in
February 1999 (February 1999 offerings), the Company's notes placement in
October 1999 (October 1999 notes placement), the Company's notes placement in
February 2000 (February 2000 notes placement) and the Company's public
offering of common stock in June 2000 (June 2000 offering). The pro forma
financial statements do not reflect all of the Company's consummated or
pending acquisitions. The adjustments assume that all pro forma transactions
were consummated on January 1, 1999, in the case of the unaudited pro forma
condensed consolidated statements of operations. The adjustments assume that
the then pending pro forma transactions were consummated as of September 30,
2000 in the case of the unaudited pro forma condensed consolidated balance
sheet. These pro forma financial statements should be read in conjunction with
the 1999 Annual Report on Form 10-K, quarterly report on Form 10-Q dated
November 13, 2000 and reports on Form 8-K dated September 17, 1999 and March
30, 2000. Although the AirTouch transaction and the AT&T transaction do not
involve the acquisition of a business, we have provided pro forma information
related to these transactions as we believe such information is material.
The pro forma condensed consolidated financial statements may not reflect
the Company's financial condition or our results of operations had these
events actually occurred on the dates specified. They may also not reflect the
Company's future financial condition or results of operations.
<TABLE>
<CAPTION>
Page Number
-----------
(b) Pro forma Financial Information
<S> <C>
Unaudited Pro forma Condensed Consolidated Balance Sheet as of
September 30, 2000 and Notes Thereto 3
Unaudited Pro forma Condensed Consolidated Statement of
Operations for the Nine Months Ended September 30, 2000 and
Notes Thereto 5
Unaudited Pro Forma Condensed Consolidated Statement of
Operations for the Year Ended December 31, 1999 and Notes
Thereto 7
</TABLE>
2
<PAGE>
AMERICAN TOWER CORPORATION
UNAUDITED PRO FORMA CONDENSED CONSOLIDATED BALANCE SHEET
SEPTEMBER 30, 2000
(in thousands)
<TABLE>
<CAPTION>
Adjustments
for Pro Forma Pro Forma
Historical Transactions(a) as adjusted
---------- --------------- -----------
<S> <C> <C> <C>
ASSETS
Cash and cash equivalents.............. $ 206,470 $ 206,470
Accounts receivable, net............... 154,993 154,993
Other current assets................... 121,455 121,455
Notes receivable....................... 118,307 118,307
Property and equipment, net............ 2,002,900 2,002,900
Unallocated purchase price............. $ 72,136 72,136
Intangible assets, net................. 2,272,183 2,272,183
Deferred tax asset..................... 154,351 154,351
Deposits and other assets.............. 117,864 (19,268) 98,596
---------- -------- ----------
Total................................ $5,148,523 $ 52,868 $5,201,391
========== ======== ==========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities, excluding current
portion of long-term debt............. $ 219,859 $ 219,859
Other long-term liabilities............ 8,293 8,293
Long-term debt, including current por-
tion, but excluding
convertible notes..................... 1,132,627 $ 47,594 1,180,221
Convertible notes, net of discount..... 918,893 918,893
Minority interest...................... 32,158 32,158
Stockholders' equity................... 2,836,693 5,274 2,841,967
---------- -------- ----------
Total................................ $5,148,523 $ 52,868 $5,201,391
========== ======== ==========
</TABLE>
See Notes to Unaudited Pro Forma Condensed Consolidated Financial Statements.
3
<PAGE>
NOTES TO UNAUDITED PRO FORMA
CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
We have prepared the unaudited pro forma condensed consolidated balance
sheet as of September 30, 2000 to give effect, as of such date, to the
remaining portion of the AirTouch and AT&T transactions, the only pro forma
transactions not completed by that date. We will account for the remaining
portions of the AirTouch and AT&T transactions under the purchase method of
accounting.
(a) The following table sets forth the pro forma balance sheet adjustments
as of September 30, 2000 (in thousands):
<TABLE>
<CAPTION>
Total
Adjustments
for
AirTouch AT&T Pro Forma
Transaction Transaction Transactions
----------- ----------- ------------
<S> <C> <C> <C>
ASSETS
Unallocated purchase price(1)............ $ 70,798 $1,338 $ 72,136
Deposits and other assets................ (19,268) (19,268)
-------- ------ --------
Total.................................. $ 51,530 $1,338 $ 52,868
======== ====== ========
LIABILITIES AND STOCKHOLDERS' EQUITY
Long-term debt, including current
portion................................. $ 46,256 $1,338 $ 47,594
Stockholders' equity..................... 5,274 5,274
-------- ------ --------
Total.................................. $ 51,530 $1,338 $ 52,868
======== ====== ========
</TABLE>
The following table sets forth the remaining purchase prices and related pro
forma financing for the AirTouch and AT&T transactions (in millions).
<TABLE>
<CAPTION>
Purchase Price Borrowings
-------------- ----------
<S> <C> <C>
AirTouch transaction.................................. $70.8(2) $46.3
AT&T transaction...................................... 1.3(3) 1.3
</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 September 30, 2000 the Company had closed on 1,778 of the 2,100
towers included in the original AirTouch lease agreement, paid $677.3
million in cash, and issued warrants to purchase 3.0 million shares of
Class A common stock at a price of $22.00 per share. The warrants vest
based on the percentage of towers closed to total towers in the lease
agreement (2,100). It is estimated that the Company will pay total
consideration of approximately $70.8 million to close on an additional
172 towers through January 2001. The Company does not expect to close on
approximately 150 towers included in the original agreement.
(3) As of September 30, 2000 the Company has closed on 1,918 of the 1,942
towers included in the AT&T purchase agreement and paid $258.7 million in
cash. It is estimated that the Company will pay approximately $1.3
million to close on any remaining towers.
4
<PAGE>
AMERICAN TOWER CORPORATION
UNAUDITED PRO FORMA CONDENSED CONSOLIDATED
STATEMENT OF OPERATIONS
Nine Months Ended September 30, 2000
(in thousands, except per share data)
<TABLE>
<CAPTION>
Adjustments for
Pro Forma Pro Forma,
Historical Transactions(a) as adjusted
---------- --------------- -----------
<S> <C> <C> <C>
Operating revenues.................... $ 491,522 $13,777 $ 505,299
Operating expenses excluding
depreciation and amortization,
development and corporate general and
administrative expenses.............. 344,503 7,620 352,123
Depreciation and amortization......... 198,264 16,744 215,008
Development expense................... 10,495 10,495
Corporate general and administrative
expense.............................. 9,957 9,957
--------- ------- ---------
Loss from operations.................. (71,697) (10,587) (82,284)
Other (income) expense:
Interest expense.................... 112,339 (4,593) 107,746
Interest income and other, net...... (12,997) (12,997)
Interest income-TV Azteca, net of
interest expense of $753 (related
party)............................. (9,070) (9,070)
Note conversion expense............. 16,968 16,968
Minority interest in net earnings of
subsidiaries....................... (82) (82)
--------- ------- ---------
Total other (income) expense.......... 107,158 (4,593) 102,565
--------- ------- ---------
Loss before income taxes and extraor-
dinary losses........................ (178,855) (5,994) (184,849)
Benefit for income taxes(b)........... 43,036 1,442 44,478
--------- ------- ---------
Loss before extraordinary losses...... $(135,819) $(4,552) $(140,371)
========= ======= =========
Basic and diluted loss per common
share before extraordinary losses.... $ (0.82) N/A $ (0.81)
========= ======= =========
Basic and diluted common shares
outstanding(c)....................... 165,244 8,120 173,364
========= ======= =========
</TABLE>
See Notes to Unaudited Pro Forma Condensed Consolidated Financial Statements.
5
<PAGE>
NOTES TO UNAUDITED PRO FORMA
CONDENSED CONSOLIDATED FINANCIAL STATEMENTS--(Continued)
The unaudited pro forma condensed consolidated statement of operations for
the nine months ended September 30, 2000 gives effect to the pro forma
transactions as if each of them had occurred on January 1, 2000. We have not
adjusted the pro forma condensed consolidated statement of operations to
reflect exchanges of our convertible notes for shares of our Class A common
stock in May 2000.
(a) To record the results of operations for the pro forma transactions. We
have adjusted the results of operations to record a decrease in net interest
expense of $4.6 million for the nine months ended September 30, 2000 as a
result of the decrease in debt after giving effect to the proceeds of the
February 2000 notes placement and the June 2000 offering. Debt issuance costs
are being amortized on a straight-line basis over the term of the obligation.
Amortization of issuance costs are included within interest expense.
We have also adjusted the results of operations to record depreciation and
amortization expense of $16.7 million for the nine months ended September 30,
2000 based on estimated allocations of purchase prices. With respect to
unallocated purchase price, we have determined pro forma depreciation and
amortization expense based on an expected average life of 15 years.
The table below sets forth the detail for the pro forma transactions for the
nine months ended September 30, 2000 (in thousands). The UNIsite operations
for the 12 day period ended January 12, 2000 (acquisition closed January 13,
2000) have been excluded from the nine month period ended September 30, 2000
pro forma statement of operations due to immateriality.
<TABLE>
<CAPTION>
Total
Adjustments
February 2000 for Pro
AirTouch AT&T Notes June 2000 Pro Forma Forma
Transaction Transaction Placement Offering Adjustments Transactions
----------- ----------- ------------- --------- ----------- ------------
<S> <C> <C> <C> <C> <C> <C>
Operating revenues...... $11,886(d) $1,891(e) $13,777
Operating expenses
excluding depreciation
and amortization....... 4,817(f) 2,803(f) 7,620
Depreciation and
amortization........... $ 16,744 16,744
------- ------ -------- -------
Income (loss) from
operations............. 7,069 (912) (16,744) (10,587)
Other (income) expense:
Interest expense, net.. $(1,439) $(23,675) 20,521 (4,593)
------- ------ ------- -------- -------- -------
Income (loss) before
income taxes and
extraordinary losses... $ 7,069 $ (912) $ 1,439 $ 23,675 $(37,265) $(5,994)
======= ====== ======= ======== ======== =======
</TABLE>
-------
(b) To record the tax effect of the pro forma adjustments and impact on our
estimated effective tax rate. The actual effective tax rate may be
different once we determine the final purchase price allocations.
(c) Includes adjustment for the 12.5 million shares of Class A common stock
issued pursuant to the June 2000 offering.
(d) Includes additional revenues recognized on a straight-line basis in
accordance with terms stipulated in the AirTouch lease agreement (assumes
the leasing of 1,950 towers). Approximately $3.5 million of annual third-
party lease revenues existing as of the date the agreement was signed has
not been included.
(e) Includes additional revenues recognized on a straight-line basis in
accordance with terms stipulated in the AT&T and AT&T Wireless Services
lease agreements (assumes the acquisition of 1,942 towers). Approximately
$7.6 million of annual third-party lease revenues existing as of the date
the agreements were signed 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 have assumed, we have estimated certain operating
expenses we would expect to incur based on our own experience with
comparable towers and with AirTouch and AT&T towers acquired to date.
Such estimates include expenses related to utilities, repairs and
maintenance, insurance and real estate taxes. These operating expenses
are based on management's best estimate and, as such, the actual expenses
may be different than the estimate presented.
6
<PAGE>
AMERICAN TOWER CORPORATION
UNAUDITED PRO FORMA CONDENSED CONSOLIDATED
STATEMENT OF OPERATIONS
Year Ended December 31, 1999
(in thousands, except per share data)
<TABLE>
<CAPTION>
Adjustments for
Pro Forma Pro Forma,
Historical Transactions(a) as Adjusted
---------- --------------- -----------
<S> <C> <C> <C>
Operating revenues..................... $258,081 $ 114,459 $ 372,540
Operating expenses excluding
depreciation and amortization,
development and corporate general and
administrative expenses............... 155,857 78,009 233,866
Depreciation and amortization.......... 132,539 105,631 238,170
Development expense.................... 1,607 1,607
Corporate general and administrative
expense............................... 9,136 2,800 11,936
-------- --------- ---------
Loss from operations................... (41,058) (71,981) (113,039)
Other (income) expense:
Interest expense..................... 27,492 35,713 63,205
Interest income and other, net....... (19,551) (19,551)
Minority interest in net losses of
subsidiaries........................ 142 142
-------- --------- ---------
Total other expense.................... 8,083 35,713 43,796
-------- --------- ---------
Loss before income taxes and extraordi-
nary loss............................. (49,141) (107,694) (156,835)
(Provision) benefit for income
taxes(b).............................. (214) 42,476 42,262
-------- --------- ---------
Loss before extraordinary loss......... $(49,355) $ (65,218) $(114,573)
======== ========= =========
Basic and diluted loss per common share
before extraordinary loss............. $ (0.33) N/A $ (0.68)
======== ========= =========
Basic and diluted common shares
outstanding(c)........................ 149,749 18,173 167,922
======== ========= =========
</TABLE>
See Notes to Unaudited Pro Forma Condensed Consolidated Financial Statements.
7
<PAGE>
NOTES TO UNAUDITED PRO FORMA
CONDENSED CONSOLIDATED FINANCIAL STATEMENTS--(Continued)
The unaudited pro forma condensed consolidated statement of operations for
the year ended December 31, 1999 gives effect to the pro forma transactions as
if each of them had occurred on January 1, 1999. We have not adjusted the pro
forma condensed consolidated statement of operations to reflect exchanges of
our convertible notes for shares of our Class A common stock in May 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 included in the pro forma transactions;
and (2) record an increase in net interest expense of $35.7 million for the
year ended December 31, 1999 as a result of the increased debt after giving
effect to the proceeds of the February 1999 offerings, the October 1999 notes
placement, the February 2000 notes placement and the June 2000 offering. Debt
discount is being amortized using the effective interest method. Debt issuance
costs are being amortized on a straight-line basis over the term of the
obligation. Amortization of debt discount and issuance costs are included
within interest expense.
We have also adjusted the results of operations to reverse historical
depreciation and amortization expense of $18.8 million for the year ended
December 31, 1999 and recorded depreciation and amortization expense of $105.6
million for the year ended December 31, 1999 based on estimated allocations of
purchase prices. With respect to unallocated purchase price, we have
determined pro forma depreciation and amortization expense based on an
expected average life of 15 years.
We have not carried forward certain corporate general and administrative
expenses of the prior owners into the pro forma condensed consolidated
financial statements. These costs represent duplicative facilities and
compensation to owners and/or executives we did not retain, including charges
related to the accelerated vesting of stock options and bonuses that were
directly attributable to the purchase transactions. Because we already
maintain our own separate corporate headquarters, which provides services
substantially similar to those represented by these costs, we do not expect
them to recur following the acquisition. After giving effect to an estimated
$2.8 million of incremental costs, we believe that we have existing management
capacity sufficient to provide the services without incurring additional
incremental costs.
8
<PAGE>
NOTES TO UNAUDITED PRO FORMA
CONDENSED CONSOLIDATED FINANCIAL STATEMENTS--(Continued)
The following table sets forth the detail for the pro forma transactions for
the year ended December 31, 1999 (in thousands).
<TABLE>
<CAPTION>
February October 1999 February 2000
OmniAmerica TeleCom 1999 UNIsite ICG AirTouch AT&T Notes Notes
Merger Merger Offerings Merger Transaction Transaction Transaction Placement Placement
----------- -------- --------- -------- ----------- ----------- ----------- ------------ -------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Operating
revenues........ $12,246 $ 2,029 $ 8,018 $41,756 $47,371(d) $ 3,039(e)
Operating
expenses
excluding
depreciation and
amortization,
and corporate
general and
administrative
expense......... 12,257 549 7,234 32,256 18,018(f) 7,695(f)
Depreciation and
amortization.... 2,372 1,201 4,539 10,719
Corporate
general and
administrative
expense......... 2,882 10,173 8,580 321
------- -------- -------- ------- ------- -------
(Loss) income
from
operations...... (5,265) (9,894) (12,335) (1,540) 29,353 (4,656)
Other (income)
expense:
Interest
expense, net... 746 521 $(1,499) 8,078 802 $(5,616) $ (11,415)
Interest
income......... (14) (1,021)
Other, net...... 816 (106) (4,026) 22
------- -------- ------- -------- ------- ------- ------- ------- ---------
(Loss) income
before income
taxes and
extraordinary
loss............ $(6,813) $(10,309) $ 1,499 $(15,366) $(2,364) $29,353 $(4,656) $ 5,616 $ 11,415
======= ======== ======= ======== ======= ======= ======= ======= =========
<CAPTION>
Total
Adjustments
for Pro
June 2000 Pro Forma Forma
Offering Adjustments Transactions
---------- ----------- ------------
<S> <C> <C> <C>
Operating
revenues........ $ 114,459
Operating
expenses
excluding
depreciation and
amortization,
and corporate
general and
administrative
expense......... 78,009
Depreciation and
amortization.... $ 86,800 105,631
Corporate
general and
administrative
expense......... (19,156) 2,800
----------- ------------
(Loss) income
from
operations...... (67,644) (71,981)
Other (income)
expense:
Interest
expense, net... $(41,085) 85,181 35,713
Interest
income......... 1,035
Other, net...... 3,294
---------- ----------- ------------
(Loss) income
before income
taxes and
extraordinary
loss............ $ 41,085 $(157,154) $(107,694)
========== =========== ============
</TABLE>
(b) To record the tax effect of the pro forma adjustments and impact on our
estimated effective tax rate. The actual effective tax rate may be different
once we determine the final purchase price allocations.
(c) Includes shares of Class A common stock issued pursuant to: the
OmniAmerica merger--16.8 million, the TeleCom merger--3.9 million, the
February 1999 offerings--26.2 million and the June 2000 offering--12.5
million.
(d) Includes additional revenues recognized on a straight-line basis in
accordance with terms stipulated in the AirTouch lease agreement (assumes the
leasing of 1,950 towers). Approximately $3.5 million of annual third-party
lease revenues existing as of the date the agreement was signed has not been
included.
(e) Includes additional revenues recognized on a straight-line basis in
accordance with terms stipulated in the AT&T and AT&T Wireless Services lease
agreements (assumes the acquisition of 1,942 towers). Approximately $7.6
million of annual third-party lease revenues existing as of the date the
agreements were signed 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
have assumed, we have estimated certain operating expenses we would expect to
incur based on our own experience with comparable towers. Such estimates
include expenses related to utilities, repairs and maintenance, insurance and
real estate taxes. These operating expenses are based on management's best
estimate and, as such, the actual expenses may be different than the estimate
presented.
9
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
AMERICAN TOWER CORPORATION
(Registrant)
By: /s/ Justin D. Benincasa
---------------------------------
Name: Justin D. Benincasa
Title: Senior Vice President and
Corporate Controller
Date: November 13, 2000
-------------------------
10
