- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
----------------
FORM 10-Q
----------------
(Mark One):
[X]Quarterly report pursuant to Section 13 or 15(d) of the Securities Exchange
Act of 1934. For the quarterly period ended March 31, 1999.
[_]Transition report pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934.
Commission File Number: 001-14195
----------------
AMERICAN TOWER CORPORATION
(Exact name of registrant as specified in its charter)
Delaware 65-0723837
(State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization)
116 Huntington Avenue Boston, Massachusetts 02116
(Address of principal executive offices)
Telephone Number (617) 375-7500
(Registrant's telephone number, including area code)
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to
such filing requirements for the past 90 days: Yes X No
Outstanding at
Class of Common Stock April 30, 1999
- --------------------- ------------------
Class A Common Stock......................................... 144,242,379 shares
Class B Common Stock......................................... 8,913,773 shares
Class C Common Stock......................................... 2,422,804 shares
------------------
Total........................................................ 155,578,956 shares
==================
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
AMERICAN TOWER CORPORATION
INDEX
PART I. FINANCIAL INFORMATION
Item 1. Unaudited Condensed Consolidated Financial Statements
Page No.
--------
Condensed Consolidated Balance Sheets
March 31, 1999 and December 31, 1998............................... 3
Condensed Consolidated Statements of Operations
Three months ended March 31, 1999 and 1998......................... 4
Condensed Consolidated Statements of Cash Flows
Three months ended March 31, 1999 and 1998......................... 5
Notes to Condensed Consolidated Financial Statements................ 6
Item 2. Management's Discussion and Analysis of Financial Condition
and Results of Operations............................................ 11
Item 3. Quantitative and Qualitative Disclosures About Market Risk.... 17
PART II. OTHER INFORMATION
Item 1. Legal Proceedings................................................. 18
Item 2. Changes in Securities and Use of Proceeds......................... 18
Item 6. Exhibits and Reports on Form 8-K.................................. 18
Signatures........................................................ 20
2
PART I. FINANCIAL INFORMATION
ITEM 1. UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
AMERICAN TOWER CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS--UNAUDITED
(In thousands, except share data)
March 31, December 31,
1999 1998
---------- ------------
ASSETS
CURRENT ASSETS:
Cash and cash equivalents........................... $ 483,263 $ 186,175
Accounts receivable, net of allowance for doubtful
accounts of $1,685 and $1,230, respectively ....... 32,052 15,506
Prepaid and other current assets.................... 8,018 4,065
Inventories......................................... 3,950
Cost in excess of billings on uncompleted con-
tracts............................................. 8,394 1,344
Deferred income taxes............................... 495 495
Due from CBS Corporation............................ 3,665
---------- ----------
Total current assets.............................. 539,837 207,585
---------- ----------
PROPERTY AND EQUIPMENT, net........................... 642,638 449,476
GOODWILL AND OTHER INTANGIBLE ASSETS, net............. 1,204,414 718,575
NOTES RECEIVABLE...................................... 9,207 7,585
DEPOSITS AND OTHER LONG-TERM ASSETS................... 11,744 9,406
INVESTMENTS IN UNCONSOLIDATED SUBSIDIARIES ........... 4,478 298
DEFERRED INCOME TAXES................................. 116,219 109,418
---------- ----------
TOTAL................................................. $2,528,537 $1,502,343
========== ==========
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
Current portion of long-term debt................... $ 2,470 $ 1,652
Accounts payable.................................... 8,955 6,696
Accrued expenses.................................... 25,471 11,347
Accrued tower construction costs.................... 18,565 16,099
Accrued interest.................................... 2,782 1,132
Unearned income..................................... 7,552 6,610
Billings in excess of costs on uncompleted contracts
................................................... 493
Accrued separation expenses......................... 5,058
Due to CBS Corporation.............................. 45,127
Accrued acquisition purchase price.................. 21,914
---------- ----------
Total current liabilities......................... 66,288 115,635
---------- ----------
LONG-TERM DEBT........................................ 285,401 279,477
OTHER LONG-TERM LIABILITIES........................... 1,981 1,429
---------- ----------
Total liabilities................................. 353,670 396,541
---------- ----------
MINORITY INTEREST IN SUBSIDIARIES..................... 4,053 4,116
---------- ----------
COMMITMENTS AND CONTINGENCIES
REDEEMABLE CLASS A COMMON STOCK:
$.01 par value, 336,250 shares issued and
outstanding; at estimated redemption values of
$24.50 and $29.56 per share, respectively........ 8,238 9,940
---------- ----------
STOCKHOLDERS' EQUITY:
Preferred Stock; $0.01 par value; 20,000,000 shares
authorized; no shares issued or outstanding........
Class A Common Stock; $.01 par value; 300,000,000
shares authorized; 143,947,211 and 96,291,111
shares issued and outstanding, respectively........ 1,439 963
Class B Common Stock; $.01 par value; 50,000,000
shares authorized; 8,938,773 and 9,001,060 shares
issued and outstanding, respectively............... 89 90
Class C Common Stock; $.01 par value; 10,000,000
shares authorized; 2,422,804 and 3,002,008 shares
issued and outstanding, respectively............... 24 30
Additional paid-in capital.......................... 2,221,754 1,140,365
Accumulated deficit................................. (59,202) (49,702)
---------- ----------
Total............................................. 2,164,104 1,091,746
Less: Treasury stock (76,403 shares at cost)...... (1,528)
---------- ----------
Total stockholders' equity........................ 2,162,576 1,091,746
---------- ----------
TOTAL ................................................ $2,528,537 $1,502,343
========== ==========
See notes to condensed consolidated financial statements
3
AMERICAN TOWER CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS--UNAUDITED
(In thousands, except per share data)
Three Months
Ended March 31,
------------------
1999 1998
-------- --------
REVENUES:
Rental and management.................................. $ 25,516 $ 9,508
Services............................................... 10,826 5,275
Video, voice, data and Internet transmission........... 6,066 3,142
-------- --------
Total revenues....................................... 42,408 17,925
-------- --------
OPERATING EXPENSES:
Operating expenses excluding depreciation and amortiza-
tion
and corporate general and administrative expenses:
Rental and management................................ 11,672 4,899
Services............................................. 9,253 4,544
Video, voice, data and Internet transmission......... 4,245 2,052
Depreciation and amortization.......................... 24,669 5,802
Corporate general and administrative expenses.......... 1,840 541
-------- --------
Total operating expenses............................. 51,679 17,838
-------- --------
(LOSS) INCOME FROM OPERATIONS............................ (9,271) 87
-------- --------
OTHER INCOME (EXPENSE):
Interest expense....................................... (6,001) (2,430)
Interest income and other, net......................... 4,949 865
Minority interest in net earnings of subsidiaries...... (3) (79)
-------- --------
TOTAL OTHER EXPENSE...................................... (1,055) (1,644)
-------- --------
LOSS BEFORE INCOME TAXES................................. (10,326) (1,557)
INCOME TAX BENEFIT....................................... 826 30
-------- --------
NET LOSS................................................. $ (9,500) $ (1,527)
======== ========
BASIC AND DILUTED NET LOSS PER COMMON SHARE AMOUNTS...... $ (.07) $ (.03)
======== ========
WEIGHTED AVERAGE COMMON SHARES OUTSTANDING............... 131,269 48,732(A)
======== ========
- --------
(A) Represents shares outstanding upon consummation of the ATC Separation. See
Notes 1 and 2.
See notes to condensed consolidated financial statements.
4
AMERICAN TOWER CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS--UNAUDITED
(In thousands)
Three Months
Ended March 31,
------------------
1999 1998
-------- --------
CASH FLOWS PROVIDED BY (USED FOR) OPERATING ACTIVITIES..... $ 8,568 $ (1,737)
-------- --------
CASH FLOWS USED FOR INVESTING ACTIVITIES:
Payments for purchase of property and equipment and
construction activities................................. (45,380) (12,690)
Payments for acquisitions, net of cash acquired.......... (108,327) (71,069)
Acquisition escrow return--cash.......................... 2,735
Advances of notes receivable............................. (991) (6,000)
Proceeds from notes receivable........................... 2,000
Deposits and other long-term assets...................... (4,190) (4,076)
-------- --------
Cash used for investing activities......................... (156,153) (91,835)
-------- --------
CASH FLOWS FROM FINANCING ACTIVITIES:
Borrowings under credit facilities....................... 67,000
Repayment of notes payable and credit facilities......... (137,725) (27)
Net proceeds from equity offerings and stock options..... 632,464 30,023
Cash transfers to CBS Corporation........................ (50,000)
Contributions from ARS................................... 28,685
Cash transfers to ARS.................................... (29,800)
Distributions to minority interest....................... (66) (105)
-------- --------
Cash provided by financing activities...................... 444,673 95,776
-------- --------
NET INCREASE IN CASH AND CASH EQUIVALENTS.................. 297,088 2,204
CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD............. 186,175 4,595
-------- --------
CASH AND CASH EQUIVALENTS, END OF PERIOD................... $483,263 $ 6,799
======== ========
CASH PAID FOR INCOME TAXES................................. $ 223 $ 20
======== ========
CASH PAID FOR INTEREST..................................... $ 5,381 $ 1,195
======== ========
NON-CASH TRANSACTIONS:
Contribution of property and equipment and other assets
from ARS................................................ $ 4,729
Issuance of common stock and assumption of options for
acquisitions............................................ $448,301 $ 48,000
Increase in deferred tax assets from corporate
restructuring........................................... $125,210
Issuance of notes receivable to stockholders............. $ 49,375
Increase in due to CBS Corporation from estimated
remaining tax liabilities............................... $ 1,115
Adjustment to redemption value of redeemable Class A
common stock............................................ $ 1,702
Escrow return -- treasury stock.......................... $ 1,528
See notes to condensed consolidated financial statements.
5
AMERICAN TOWER CORPORATION AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS--UNAUDITED
1.Basis of Presentation and Accounting Policies
The accompanying condensed consolidated financial statements have been
prepared by American Tower Corporation (the Company or American Tower)
(formerly American Tower Systems Corporation), without audit, pursuant to the
rules and regulations of the Securities and Exchange Commission (SEC). The
financial information included herein is unaudited; however, the Company
believes such information and the disclosures are adequate to make the
information presented not misleading and reflect all adjustments (consisting
only of normal recurring adjustments) that are necessary for a fair
presentation of financial position and results of operations for such periods.
Results of interim periods may not be indicative of results for the full year.
These condensed consolidated financial statements and related notes should be
read in conjunction with the Company's 1998 Annual Report on Form 10-K filed
with the SEC on March 19, 1999.
Use of Estimates--The preparation of financial statements in conformity with
generally accepted accounting principles requires management to make estimates
and assumptions that affect the amounts reported in the condensed consolidated
financial statements and accompanying notes. Actual results may differ from
those estimates, and such differences could be material to the accompanying
condensed consolidated financial statements.
Revenue Recognition--Rental and management revenues are recognized when
earned. Escalation clauses and other incentives present in lease agreements
with the Company's customers are recognized on a straight-line basis over the
term of the lease.
Service revenues from site selection, construction, and construction
management activities are derived under service contracts with customers which
provide for billings on a time and materials or fixed price basis. Revenues
are recognized as services are performed with respect to the time and
materials contracts. Revenues are recognized using the percentage-of-
completion method for fixed price contracts, measured by the percentage of
contract costs incurred to date compared to estimated total contract costs.
Costs in excess of billings on uncompleted contracts represent revenues
recognized in excess of amounts billed. Billings in excess of costs on
uncompleted contracts represent billings in excess of revenues recognized.
Provisions for estimated losses on uncompleted contracts are made in the
period in which such losses are determined.
Revenues from component sales are recognized upon shipment to the customer.
Accruals for estimated sales returns are estimated, based on historical
experience, and recorded at the time of sale.
Video, voice, data and Internet transmission revenues are recognized as such
services are provided. Amounts billed or received prior to services being
performed are deferred until such time as the revenue is earned.
Inventories--Inventories, which consist primarily of raw material component
parts, are stated at the lower of cost or market, cost being determined on the
first-in, first-out (FIFO) basis.
Goodwill and Other Intangible Assets--Goodwill and other intangible assets
represent principally the excess of purchase price over the estimated fair
value of net assets acquired and the value of existing site rental customer
contracts, deferred financing costs, deferred acquisition costs and non-
competition agreements. The condensed consolidated financial statements
reflect the preliminary allocation of certain purchase prices as the
appraisals for some acquisitions have not yet been finalized. The final
allocation of these purchase prices is not expected to have a material effect
on the Company's consolidated results of operations, liquidity or financial
position.
6
AMERICAN TOWER CORPORATION AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS--UNAUDITED
Loss Per Common Share--Basic and diluted income or loss per common share have
been determined in accordance with Statement of Financial Accounting Standards
(FAS) No. 128, "Earnings Per Share," whereby basic income or loss per common
share is computed by dividing net income or loss by the weighted average number
of common shares outstanding during the period. Diluted per share amounts are
computed by adjusting the weighted average number of common shares for dilutive
potential common shares outstanding during the period, if any. In computing
diluted per share amounts, the Company uses the treasury stock method, whereby
unexercised options are assumed to be exercised at the beginning of the period
or at issuance, if later. The assumed proceeds are then used to purchase common
shares at the average market price during the period. Shares outstanding upon
the consummation of the ATC Separation (as defined below) are assumed to be
outstanding for all periods prior to June 4, 1998. Shares issuable upon
exercise of options have been excluded from the computation of diluted income
or loss per common share as the effect is anti-dilutive. Had options been
included in the computation, shares for the diluted computation would have
increased by approximately 5.3 and 3.9 million for the three month periods
ended March 31, 1999 and 1998, respectively.
Reclassifications--Certain reclassifications have been made to the 1998
condensed consolidated financial statements to conform to the 1999
presentation.
2. ATC Separation
As disclosed in the Company's 1998 Annual Report on Form 10-K, the Company
was formerly a wholly-owned subsidiary of American Radio Systems Corporation
(ARS) until its spin-off from ARS on June 4, 1998 (the ATC Separation). As part
of the ATC Separation, the Company is required to reimburse CBS Corporation
(CBS) for certain tax liabilities incurred by ARS related to the transaction.
As of December 31, 1998 the Company had paid approximately $212.0 million to
CBS. The Company will be required to make additional payments to CBS upon the
conversion of ARS 7% Convertible Debentures (the ARS Convertible Debentures) by
the holders thereof. The Company estimates that its remaining reimbursement
obligation to CBS with respect to taxes on known conversions is approximately
$6.2 million as of March 31, 1999. The Company estimates that its reimbursement
obligation to CBS with respect to taxes on unknown conversions would be
approximately $13.9 million. Such estimate is based on an estimated fair market
value of the Class A common stock, on April 21, 1999, of $24.87 per share. The
Company's obligation for such conversions would change by approximately $1.0
million for each $1.00 change in such fair market value. The Company has
provided CBS with security of $9.8 million in cash (which may be replaced at
the Company's option with a letter of credit) to offset against future tax
reimbursement. Such deposit, along with the estimated liability on known ARS
Convertible Debenture conversions, is recorded as "Due from CBS" in the
accompanying March 31, 1999 condensed consolidated balance sheet.
The ATC Separation also provided for closing balance sheet adjustments based
on the working capital, as defined, and debt levels of ARS as of June 4, 1998.
The Company's preliminary estimate was that such adjustments would not exceed
$50.0 million. In February 1999, the Company paid $50.0 million to CBS in
settlement of all amounts due with respect to such adjustments, including
interest. As part of such settlement, the Company also agreed to indemnify CBS
and ARS with respect to certain tax matters affecting ARS prior to the ATC
Separation. See the Company's 1998 Annual Report on Form 10-K for more detailed
discussion related to the ATC Separation.
3. Income Taxes
The Company provides for income taxes at the end of each interim period based
on the estimated effective tax rate for the full fiscal year for each tax
reporting entity. Cumulative adjustments to the Company's estimate are recorded
in the interim period in which a change in the estimated annual effective rate
is determined.
7
AMERICAN TOWER CORPORATION AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS--UNAUDITED
4. Stockholders' Equity
Secondary Public Offering: In February 1999, the Company completed a
secondary public offering of 25,700,000 shares of Class A common stock, $.01
par value per share (including 1,700,000 shares sold by the Company pursuant
to the exercise in full of the underwriters over-allotment option) at $25.00
per share. Certain selling stockholders sold an additional 1,300,000 shares in
the offering. The Company's net proceeds of the offering (after deduction of
the underwriting discount and offering expenses) was approximately $618.0
million. The Company invested the proceeds in short-term investment grade
securities. The Company has and will use such proceeds, together with
borrowings under its existing credit facilities, to fund future acquisitions
and construction activities.
Private Placement: In February 1999, the Company consummated the sale of
500,000 shares of Class A common stock to Credit Suisse First Boston
Corporation at $26.31 per share. In connection with such sale, Credit Suisse
First Boston Corporation was granted certain registration rights. The Company
invested the proceeds of approximately $13.1 million in short-term investment
grade securities. The Company has and will use such proceeds, together with
borrowings under its exisiting credit facilities, to fund future acquisitions
and construction activities.
5. Acquisitions
General--The acquisitions consummated during the first quarter of 1999 have
been accounted for by the purchase method of accounting. The purchase prices
have been allocated to the net assets acquired, principally intangible and
tangible assets, and the liabilities assumed based on their estimated fair
values at the date of acquisition. The excess of purchase price over the
estimated fair value of the net assets acquired has been recorded as goodwill
and other intangible assets. For certain acquisitions the condensed
consolidated financial statements reflect the preliminary allocation of
purchase prices as the appraisal of the assets acquired has not been
finalized. The Company does not expect any changes in depreciation and
amortization, as a result of such appraisals, to be material to the
consolidated results of operations.
Omni Merger: In February 1999, the Company consummated the Agreement and
Plan of Merger, dated as of November 16, 1998 (the Omni Merger) with
OmniAmerica, Inc. (Omni). Omni owned, managed and constructed multi-use
telecommunications sites for radio and television broadcasting, paging,
cellular, PCS and other wireless technologies and offered nationwide, turn-key
tower construction and installation services. Pursuant to the Omni Merger
agreement, Omni stockholders received 1.1 shares of the Company's Class A
common stock for each share of Omni common stock. In the aggregate, the
Company exchanged approximately 16.8 million shares of Class A common stock
for approximately 15.2 million shares of Omni common stock, plus the
assumption of $96.6 million of debt, of which $94.3 million (inclusive of
interest and fees) was paid at closing. In addition, the Company assumed
certain Omni employee stock options which were converted into options to
purchase approximately 1.0 million shares of the Company's Class A common
stock. Total merger consideration was approximately $366.5 million.
TeleCom Merger: In February 1999, the Company consummated the Agreement and
Plan of Merger, dated as of November 16, 1998 (the TeleCom Merger) with
TeleCom Towers, L.L.C. (TeleCom). Total merger consideration of approximately
$144.2 million included the issuance of 3.9 million shares of Class A common
stock and $60.1 million of cash. As part of the Telecom Merger, the Company
also assumed approximately $48.4 million of debt, of which $44.2 million was
paid at closing and $3.9 million was paid subsequent to March 31, 1999. The
Telecom Merger is also subject to a closing balance sheet working capital
adjustment, of which an estimate of $3.2 million has been accrued in the
accompanying March 31, 1999 condensed consolidated balance sheet. Final
resolution of the working capital adjustment is not expected to be material to
the accompanying condensed consolidated financial statements.
8
AMERICAN TOWER CORPORATION AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS--UNAUDITED
In addition to the above, the Company also consummated a number of tower
related asset purchases during the first quarter of 1999. Total consideration
in connection with these transactions was approximately $39.0 million.
During 1999, the Company adjusted the initial purchase prices related to
certain 1998 acquisitions. Such adjustment includes a return of escrow related
to the acquisitions of Wauka Communications, Inc. and Grid Site Services, Inc.
The total escrow returned was valued at approximately $4.3 million, a portion
of which was previously issued shares of Class A common stock valued at
approximately $1.5 million. The Company has recorded the $1.5 million as
treasury stock in the accompanying March 31, 1999 condensed consolidated
balance sheet.
The following unaudited pro forma summary for the three months ended March
31, 1999 and 1998 presents the condensed consolidated results of operations as
if the 1999 acquisitions discussed above had occurred as of January 1, 1998
after giving effect to certain adjustments, including depreciation and
amortization of assets and interest expense on any debt incurred to fund the
acquisitions. These unaudited pro forma results have been prepared for
comparative purposes only and do not purport to be indicative of what would
have occurred had the acquisitions been made as of January 1, 1998 or of
results which may occur in the future.
In thousands, except per share data:
Three Months Three Months
Ended Ended
March 31, 1999 March 31, 1998
-------------- --------------
Revenues........................................ $ 54,581 $37,249
Net loss........................................ $(14,513) $(9,074)
Basic and diluted net loss per common share..... $ (.10) $ (.13)
Since April 1, 1999, the Company has acquired and made investments in
several communication sites and businesses for an aggregate preliminary
purchase price of $9.6 million.
In addition, the Company is also party to various agreements relating to the
acquisition of assets and construction of towers for third parties for an
estimated aggregate cost of approximately $122.8 million. Such transactions
are subject to the satisfaction of customary closing conditions, which are
expected to be met in the second and third quarters of 1999.
The Company is also pursuing the acquisition of tower properties and tower
businesses in new and existing locations, although no definitive material
agreements have been agreed to with respect to any such acquisitions.
6. Business Segments
The Company operates in three business segments; rental and management (RM),
services (Services), and video, voice, data and Internet transmission services
(VVDI). The RM segment provides for leasing and subleasing of antennae sites
on multi-tenant towers for a diverse range of wireless communication
industries, including personal communication services, paging, cellular,
enhanced specialized mobile radio, specialized mobile radio and fixed
microwave, as well as radio and television broadcasters. The Services segment
offers a broad range of network development services, including network
design, site acquisition and construction, zoning and other regulatory
approvals, component part sales, tower construction and antennae installation.
The VVDI segment offers transmission services in the New York City to
Washington, D.C. corridor and in Texas.
The accounting policies applied in compiling segment information below are
similar to those described in the Company's 1998 Annual Report filed on Form
10-K. In evaluating financial performance, management
9
AMERICAN TOWER CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--UNAUDITED
focuses on operating profit (loss), excluding depreciation and amortization
and corporate general and administrative expenses. This measure of operating
profit (loss) is also before interest income, interest expense, minority
interest in net earnings (loss) of subsidiaries and income taxes.
The Company's reportable segments are strategic business units that offer
different services. They are managed separately because each segment requires
different resources and marketing strategies. All segments operate exclusively
in the United States. In addition, all reported segment revenues are generated
from external customers, as intersegment revenues are insignificant.
Summarized financial information concerning the Company's reportable
segments as of and for the three months ended March 31, 1999 and 1998, is
shown in the following table. The "Other" column below represents amounts
excluded from specific segments such as income taxes, corporate general and
administrative expenses, depreciation and amortization and interest. In
addition, "Other" also includes corporate assets such as cash and cash
equivalents, tangible and intangible assets, and income tax accounts which
have not been allocated to specific segments (in thousands).
RM Services VVDI Other Total
---------- -------- ------- -------- ----------
1999
Revenues.................... $ 25,516 $ 10,826 $ 6,066 $ 42,408
Operating profit (loss)
before income taxes........ $ 18,104 $ 2,266 $ 3,978 $(34,674) $ (10,326)
Assets...................... $1,344,179 $467,703 $65,219 $651,436 $2,528,537
1998
Revenues.................... $ 9,508 $ 5,275 $ 3,142 $ 17,925
Operating profit (loss)
before income taxes........ $ 4,594 $ 731 $ 1,105 $ (7,987) $ (1,557)
Assets...................... $ 285,671 $ 98,286 $13,338 $135,718 $ 533,013
10
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
General
This discussion contains forward-looking statements, including statements
concerning projections, plans, objectives, future events or performance and
underlying assumptions and other statements which are other than statements of
historical fact. Various factors affect the Company's results and could cause
the Company's actual results to differ materially from those expressed in any
forward-looking statement. Such factors include:
. 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 service debt,
. competitive conditions and regulatory developments in the communications
site and wireless carrier industries,
. projected growth of the wireless communications and wireless carrier
industries, and
. general economic conditions.
As the Company was a wholly-owned subsidiary of ARS through June 4, 1998,
the condensed consolidated financial statements for the three months ended
March 31, 1998 may not reflect the results of operations or financial position
of the Company had it been an independent public company during such period.
Because of the Company's relatively brief operating history and the large
number of recent acquisitions, the following discussion will not necessarily
reveal all significant developing or continuing trends.
The Company was formed in July 1995 to capitalize on the opportunity in the
communications site industry. The Company is a leading independent owner,
operator and developer of wireless communications towers in the United States.
From January 1, 1999 through March 31, 1999, the Company has acquired various
communications sites and businesses for an aggregate estimated purchase price
of approximately $549.7 million, including the issuance of approximately 20.7
million shares of Class A common stock.
Management expects that acquisitions consummated to date will have a
material impact on future revenues, expenses and income from operations. In
addition, the financial information presented below and elsewhere in this Form
10-Q does not reflect the impact of the construction program of the Company to
any significant extent because most of that activity commenced in the last two
quarters of 1998 and is expected to accelerate substantially during 1999.
11
Results of Operations
As of March 31, 1999, the Company owned and/or operated approximately 3,400
communications sites, as compared to approximately 880 communications sites as
of March 31, 1998. The acquisitions consummated in 1999 and 1998 have
significantly affected operations for the three months ended March 31, 1999,
as compared to the three months ended March 31, 1998. See the notes to the
condensed consolidated financial statements for a description of the
acquisitions consummated in 1999 and the Company's Annual Report on Form 10-K
for acquisitions consummated in 1998 and prior.
Three months ended March 31, 1999 and 1998 (Dollars in thousands)--Unaudited
Three months ended Amount of Percentage
-------------------- --------- ----------
March 31, Increase Increase
-------------------- --------- ----------
1999 1998
--------- ---------
Revenues:
Rental and management ............ $ 25,516 $ 9,508 $16,008 168%
Services.......................... 10,826 5,275 5,551 105%
Video, voice, data and Internet
transmission..................... 6,066 3,142 2,924 93%
--------- --------- ------- -----
Total revenues.................... 42,408 17,925 24,483 137%
--------- --------- ------- -----
Operating Expenses:
Rental and management............. 11,672 4,899 6,773 138%
Services.......................... 9,253 4,544 4,709 104%
Video, voice, data and Internet
transmission .................... 4,245 2,052 2,193 107%
--------- --------- ------- -----
Total operating expenses excluding
depreciation and
amortization, and corporate
general and administrative ex-
pense.......................... 25,170 11,495 13,675 119%
--------- --------- ------- -----
Depreciation and amortization..... 24,669 5,802 18,867 325%
Corporate general and administra-
tive expenses.................... 1,840 541 1,299 240%
Interest expense.................. 6,001 2,430 3,571 147%
Interest income and other, net.... 4,949 865 4,084 472%
Minority interest in net earnings
of subsidiaries.................. (3) (79) 76 96%
Income tax benefit................ 826 30 (796) 2,653%
--------- --------- ------- -----
Net loss.......................... $ (9,500) $ (1,527) $(7,973) 522%
========= ========= ======= =====
Rental and Management Revenue
Rental and management revenue for the three months ended March 31, 1999, was
$25.5 million, an increase of $16.0 million from the three months ended March
31, 1998. The majority of the increase, $11.9 million, is attributable to
revenue generated from acquisitions consummated and/or towers constructed
during 1999 and the latter part of 1998. In addition, approximately $2.0
million of the total increase is a result of one month of revenue generated
from the Omni and Telecom mergers which were consummated in late February
1999. The remaining factor contributing to the increase is the growth in
revenue of $2.1 million in the first quarter of 1999 for towers that existed
in the first quarter of 1998.
Services Revenue
Services revenue for the three months ended March 31, 1999, was $10.8
million, an increase of $5.6 million from revenues for the three months ended
March 31, 1998. The primary reason for the increase is due to the $6.4 million
of revenue generated in the first quarter of 1999 as a result of the Omni
Merger. The increase from the Omni Merger is offset by a decrease in revenues
generated from the Company's existing services business of approximately $0.8
million. This decrease is a direct result of the Company's shift in focus on
site acquisition,
12
development and construction of towers for its own use ("Build-to-Suit") from
its previous focus on development and construction of towers for sale to
outside customers. The Company expects to continue its focus on Build-to-Suit
activity in the forseeable future, thus resulting in a continuing decline in
revenues applicable to this portion of the Services business.
Video, Voice, Data and Internet Transmission Revenue
Video, voice, data and Internet transmission (VVDI) revenue for the three
months ended March 31, 1999, was $6.1 million, an increase of $2.9 million
from revenues for the three months ended March 31, 1998. The primary reason
for the increase is attributed to approximately $2.4 million of additional
revenues generated from the acquisition of Washington International Teleport
which closed in the second quarter of 1998. The remaining component of the
increase ($0.5 million) is due to growth in the overall VVDI business existing
at March 31, 1998.
Rental and Management, Services and VVDI Expenses.
Rental and management, services and VVDI expenses for the three months ended
March 31, 1999, were $11.7 million, $9.3 million and $4.2 million, an increase
of $6.8 million, $4.7 million and $2.2 million, respectively from the three
months ended March 31, 1998. The primary reasons for the increase in these
expenses are essentially the same as discussed above under each respective
revenue segment.
Depreciation and Amortization
Depreciation and amortization for the three months ended March 31, 1999, was
$24.7 million, an increase of $18.9 million from the three months ended March
31, 1998. A component of the increase is attributable to an increase in
depreciation expense of $6.2 million. This is a direct result of the Company's
purchase and/or acquisition of approximately $511.7 million of property and
equipment from March 31, 1998 to March 31, 1999. The remaining component of
the increase is attributable to an increase in amortization of $12.7 million,
resulting from the Company's recording and amortizing of approximately $1.0
billion of goodwill and other intangible assets related to acquisitions
consummated from March 31, 1998 to March 31, 1999.
Corporate General and Administrative Expenses
Corporate general and administrative expenses for the three months ended
March 31, 1999, were $1.8 million, an increase of $1.3 million from the three
months ended March 31, 1998. The majority of the increase is a result of
higher personnel costs associated with supporting the Company's increasing
number of tower properties, expanding revenue base, and growth strategy. Other
factors contributing to the increase include higher costs associated with
enhancing the Company's information technology infrastructure, year 2000
compliance, and overall increases in other administrative expenses.
Interest Expense
Interest expense for the three months ended March 31, 1999, was $6.0
million, an increase of $3.6 million from the three months ended March 31,
1998. The increase is attributable to higher outstanding borrowing levels for
the three months ended March 31, 1999 ($287.9 million) as compared to levels
outstanding for the three months ended March 31, 1998 ($157.2 million).
Interest Income and Other, Net
Interest income and other, net for the three months ended March 31, 1999,
was $4.9 million, an increase of $4.1 million from the three months ended
March 31, 1998. The increase is related to interest earned on invested cash
proceeds from the Company's initial public offering (June 1998), secondary
public offering (February 1999) and private placement (February 1999).
13
Income Tax Benefit
The income tax benefit for the three months ended March 31, 1999 was $0.83
million, an increase of $0.8 million from the three months ended March 31,
1998. The primary reason for the increase is a result of the Company's
increase in its net loss from $1.5 million to $9.5 million for the three
months ended March 31, 1998 and 1999, respectively, coupled with an increase
in its estimated effective tax rate for the year from 2% in 1998 to 8% in
1999. The effective tax rate differs in both periods from the statutory rate
due to the effect of non-deductible items, principally the amortization of
goodwill, on certain stock acquisitions for which the Company has recorded no
tax benefit.
Liquidity and Capital Resources
For the three months ended March 31, 1999, cash flows provided by operating
activities were $8.6 million, as compared to cash flows used for operating
activities of $1.7 million for the three months ended March 31, 1998. The
change is primarily attributable to the favorable cash flow generated from
consummated acquisitions in 1999 and the latter part of 1998.
For the three months ended March 31, 1999, cash flows used for investing
activities were $156.2 million as compared to $91.8 million for the three
months ended March 31, 1998. The increase in 1999 is due to an increase in
property and equipment expenditures of approximately $32.7 million coupled
with the increase in cash expended for mergers and acquisitions of
approximately $34.6 million.
For the three months ended March 31, 1999, cash flows provided by financing
activities were $444.7 million as compared to $95.8 million for the three
months ended March 31, 1998. The increase in 1999 is due principally to cash
flow provided from the Company's secondary public offering and private
placement of securities both of which occurred in February 1999.
The Company's liquidity needs arise from its acquisition-related activities,
debt service, working capital and capital expenditures associated principally
with its construction program. As of March 31, 1999, the Company maintained
approximately $483.3 million in cash and cash equivalents, working capital of
approximately $473.5 million, and had approximately $385.0 million available
under its credit facilities. Historically, the Company has met its operational
liquidity needs with internally generated funds and has financed the
acquisition of tower related properties and its construction program,
including related working capital needs, with a combination of capital funds
from sales of its equity securities and bank borrowings.
Credit Facilities: As of March 31, 1999, the Company had approximately
$287.9 million of long-term debt, of which $275.0 million was outstanding in
the form of term loans and revolving credit facilities. Debt service requires
a substantial portion of the Company's cash flow from operations. Accordingly,
the Company's leverage could make it vulnerable to a downturn in the operating
performance of its tower properties or in economic conditions. The Company
believes that its cash flows from operations will be sufficient to meet its
debt service requirements for interest and scheduled payments of principal
under its existing credit facilities. If such cash flow were not sufficient to
meet such debt service requirements, the Company might sell equity securities,
refinance its obligations or dispose of one or more of its properties in order
to make such scheduled payments. The Company may not be able to effect any of
such transactions on favorable terms. The Company believes that is has
sufficient financial resources available to it, including borrowings under its
credit facilities, to finance operations for the foreseeable future.
Secondary Public Offering: In February 1999, the Company completed a
secondary public offering of 25,700,000 shares of Class A common stock, $.01
par value per share (including 1,700,000 shares sold by the Company pursuant
to the exercise in full of the underwriters over-allotment option) at $25.00
per share. Certain selling stockholders sold an additional 1,300,000 shares in
the offering. The Company's net proceeds of the offering (after deduction of
the underwriting discount and estimated offering expenses) were approximately
$618.0 million. The Company invested the proceeds in short-term investment
grade securities. The Company has and will use such investments together with
borrowings under its credit facilities to fund future acquisitions and
construction activities.
14
Private Placement: In February 1999, the Company consummated the sale of
500,000 shares of Class A common stock to Credit Suisse First Boston
Corporation at $26.31 per share. In connection with such sale, Credit Suisse
First Boston Corporation was granted certain registration rights. The Company
invested the proceeds of approximately $13.1 million in short-term investment
grade securities. The Company has and will use such investments, together with
borrowings under its credit facilities, to fund future acquisitions and
construction activities.
Redeemable Common Stock: In June 1998, the Company merged with a company
owning a broadcasting tower in the Boston, Massachusetts area and issued
720,000 shares of Class A common stock valued at approximately $18.0 million.
In addition, under a put agreement that was consummated in connection with the
merger, the sellers have the right to require the Company to purchase, at any
time prior to June 5, 1999, any or all shares of Class A common stock received
pursuant to consummation of the merger for a purchase price equal to the then
current market price. As of March 31, 1999 holders of the redeemable common
stock have sold 383,750 of the 720,000 shares reducing the Company's overall
redemption obligation. Accordingly, the remaining 336,250 shares have been
recorded as redeemable Class A common stock in the condensed consolidated
financial statements based on the March 31, 1999 fair market value of $24.50
per share.
During the three months ended March 31, 1999, the Company had capital
expenditures of approximately $45.4 million primarily related to construction
activities and completed the construction of approximately 180 towers. The
Company's 1999 business plan calls for construction of between 1,000 and 1,200
towers at a cost of between $180.0 million and $228.0 million (exclusive of
broadcast towers). The actual number of towers built may be outside of that
range because of more attractive investment opportunities from acquisitions
(in which case it could be less) or significant new Build-to-Suit projects
with wireless service providers (in which case it could be more). Management
believes that the Company has sufficient funds available to finance current
construction plans, pending acquisitions and several additional major
acquisitions and/or construction projects. However, in the unlikely event that
the Company were to negotiate more than a limited number of such major
transactions, it might require additional financing either through incurring
additional debt or the sale of equity securities. Such financing or sale of
securities may not be available on favorable terms.
Management expects that the consummated acquisitions and current and future
construction activities will have a material impact on liquidity. Management
believes that the acquisition activities, once integrated, will have a
favorable impact on liquidity and will offset the initial effects of the
funding requirements. Management also believes that the construction
activities may initially have an adverse effect on the future liquidity of the
Company as newly constructed towers will initially decrease overall liquidity.
But, as such sites become fully operational and achieve higher utilization,
they should generate tower cash flow, and, in the long-term, increase
liquidity.
ATC Separation: As of March 31, 1999, the Company is still obligated under
the ATC Separation agreement for certain tax liabilities to CBS and ARS. See
Note 2 of the condensed consolidated financial statements.
Year 2000
The Company is aware of the issues associated with the year 2000 as it
relates to information systems and is currently working to resolve the
potential impact to the Company's operations. The year 2000 issue results from
the fact that many computer programs use only two digits to identify a year in
the date field. These programs were designed and developed without
consideration of the impact of the upcoming change in century.
In December 1998, the Company engaged outside consultants to help it conduct
an extensive review and implement a comprehensive plan to reduce the
probability of operational difficulties due to year 2000 issues. The
comprehensive plan consists of the following phases: (1) awareness phase--
identification of the problem and designing a structure to support the year
2000 efforts; (2) definition of critical processes and systems--a process to
identify those activities critical to the Company and focus the efforts of
year 2000 activities; (3) assessment phase--inventory the Company's systems,
software and equipment, assessing whether they are
15
year 2000 compliant, prioritizing those systems, software and equipment not
compliant and developing action plans for remediation and or replacement of
non-complaint systems, software and equipment; (4) renovation phase--
converting, replacing or retiring non-compliant systems, software and
equipment; (5) validation phase--testing converted or replaced systems; (6)
implementation phase--building a backup plan to be used in the event that the
renovation plan cannot be accomplished. This phase will also include planning
for year 2000 induced information systems failures on core business processes.
The Company's plan considers both its primary information systems (financial
systems software, network software and equipment, personal computers, etc.)
and other technology and software dependent upon embedded systems (tower
equipment, telephone systems, security systems, etc.).
The Company has completed phases 1 and 2 and is in the process of completing
the assessment phase (phase 3) for both its primary information systems and
its other systems and equipment with embedded software. The assessment phase
is expected to be completed in the third quarter of 1999. Completion of all
phases of the Company's year 2000 plan is expected in the fourth quarter of
1999.
Through March 31, 1999, the Company has not incurred significant costs
related to developing and implementing its year 2000 comprehensive plan. The
remaining costs necessary to complete full implementation of the plan,
including the validation and implementation phases, is estimated to be between
$.4 million and $1.4 million.
Although there can be no assurance that the Company will successfully
complete implementation of its year 2000 comprehensive plan, the project is
currently progressing in accordance with timetables established by the
Company. Although failure to complete implementation on a timely basis may
have material adverse financial and operational impacts on the Company, the
Company believes such failure is not reasonably likely. The possible effects
of unsuccessful implementation of the comprehensive plan include the
following: (i) an inability to process transactions, (ii) a temporary
inability to order supplies or materials, (iii) a temporary inability to
timely process orders and billings, and (iv) a temporary inability to deliver
quality products and services to customers.
The Company's business is dependent upon the systems of various third
parties. With regard to these vendors, the Company is in the process of
assessing their year 2000 readiness based upon communications with each such
vendor. The assessment is expected to be ongoing. The Company believes that a
material financial or business risk could occur if the financial institutions
serving the Company or the Company's utility providers have year 2000 induced
failures. The Company understands that these institutions and providers are
cognizant of the year 2000 issues and are actively working to solve any
problems that may arise.
The Company believes that its most reasonably likely worst case result
relating to year 2000 would be the failure of certain of its systems with
embedded software, or failure of third party systems on which the Company's
systems rely. Failure of systems or equipment with embedded software within
the Company's VVDI segment could result in temporary disruption to that aspect
of the Company's operations. Although there can be no assurance that these
failures would not have an adverse effect on the Company's business, the
Company believes the effect of such failure would not be material to its
business. If the VVDI operations were inoperable for a one week period due to
year 2000 failures, the estimated lost revenue would be approximately $0.5
million.
Within its rental and management business segment, computer-controlled
devices, such as those found in automatic monitoring and control systems used
for antenna structure lighting, are vulnerable to year 2000 related
malfunctions and may fail, which would create a hazard to air navigation.
Tower owners, such as the Company, are responsible for tower lighting in
compliance with Federal Communications Commission and the Federal Aviation
Administration requirements and the Company intends to take the necessary
steps to address the year 2000 problems, however, the Company may not be
entirely successful.
Currently there are no contingency plans for the potential problems noted
above with the third party vendors, embedded software and lighting systems,
however, the Company has implemented a contingency planning phase as part of
its year 2000 plan. The contingency planning phase is estimated to be
completed in the third quarter of 1999.
16
Recent Accounting Pronouncement
In June 1998, the Financial Accounting Standards Board (FASB) issued
Statement of Financial Accounting Standards (FAS) No. 133, Accounting for
Derivative Instruments and Hedging Activities. This Statement establishes
accounting and reporting standards for derivative instruments. It requires
that an entity recognize all derivatives as either assets or liabilities in
the statement of financial position, and measure those instruments at fair
value. The accounting for changes in the fair value of a derivative (that is,
gains and losses) will depend on the entity's intended use of the derivative
and its resulting designation (as defined in the Statement). FAS No. 133 is
effective for all fiscal quarters of all fiscal years beginning after June 15,
1999. The Company is currently in the process of evaluating the impact FAS No.
133 will have on the Company and its consolidated financial statements.
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
The Company is exposed to market risk from changes in interest rates on
long-term debt obligations that impact the fair value of these obligations.
The Company attempts to reduce these risks by utilizing derivative financial
instruments, namely interest rate caps and swaps, pursuant to Company
policies. All derivative financial instruments are for purposes other than
trading.
For the three months ended March 31, 1999, the Company has not incurred any
material changes with respect to the interest rates, long-term debt and
interest rate caps and swaps disclosed under this section in its Annual Report
on Form 10-K. Accordingly, refer to Item 7A in the Company's Annual Report on
Form 10-K for a more detailed discussion.
The Company's potential loss in future earnings over the next twelve months
as a result of a 10% increase in interest rates related to its long term debt
obligations (using a weighted average interest rate of 7.8% at March 31, 1999)
would be approximately $1.8 million.
The Company maintains a portion of its cash and cash equivalents in short-
term financial instruments which are subject to interest rate risks. Due to
the relatively short duration of such instruments and the Company's
expectation that such investments will not be significant on an ongoing basis,
fluctuations in interest rates with respect to such investments should not
materially affect the Company's financial condition or results of operations.
17
PART II. OTHER INFORMATION
Item 1.--Legal Proceedings.
The Company periodically becomes involved in various claims and lawsuits
that are incidental to its business. In the opinion of management, after
consultation with counsel, there are no matters currently pending which would,
in the event of adverse outcome, have a material impact on the Company's
consolidated financial position, the results of its operations or liquidity.
Item 2.--Changes in Securities and Use of Proceeds.
Changes in Securities--None.
Recent Sales of Unregistered Securities--Pursuant to the Stock Purchase
Agreement, dated as of February 4, 1999, by and between the Company and Credit
Suisse First Boston Corporation (CSFB), the Company consummated an equity
financing involving the issuance of 500,000 shares of Class A common stock, at
$26.31 per share, the closing price of the Class A common stock on the New
York Stock Exchange on February 4, 1999.
Such shares referred to in the foregoing paragraph were issued by the
Company in reliance on the exemption from registration provided by Section
4(2) of the Securities Act. CSFB represented that it was acquiring the shares
for investment purposes and not with a view to distribution within the meaning
of the Securities Act. The stock certificate issued to CSFB bore a restrictive
legend. No underwriting discounts or commissions were paid by the Company in
connection with the foregoing transaction.
Item 6.--Exhibits and Reports on Form 8-K.
(a) Exhibits.
Listed below are the exhibits which are filed as part of this Form 10-Q
(according to the number assigned to them in Item 601 of Regulation S-K).
Exhibit No. Description of Document Exhibit File No.
----------- ----------------------- ----------------
1.1 Underwriting Agreement, dated as of February 3,
1999, by and among ATC and the Representatives of
the Underwriters named therein...................... Incorporated by reference to
Exhibit 1.1 to Amendment
No. 1 to the Company's
Registration Statement on
Form S-1 filed on
February 3, 1999
(File No. 333-70881)
2.1 Amendment to the Amended and Restated Agreement and
Plan of Merger, dated as of February 26, 1999, by
and among ATC, American Towers, Inc., a Delaware
corporation (ATI), ATC Merger Corporation, a
Delaware corporation, and TeleCom Towers, L.L.C., a
Delaware limited liability company.................. Incorporated by reference to
Exhibit 2.1 from the
Company's Current Report on
Form 8-K/A dated March 18,
1999
3(ii).1 By-Laws of ATC....................................... Incorporated by reference to
Exhibit 3(ii).1 from the
Company's Annual Report on
Form 10-K
(File No. 001-14195) dated
March 19, 1999
18
Exhibit No. Description of Document Exhibit File No.
----------- ----------------------- ----------------
10.1 Stock Purchase Agreement, dated as of February 4,
1999, by and among ATC and Credit Suisse First
Boston Corporation.................................. Incorporated by reference to
Exhibit 10.12 from the
Company's Annual Report on
Form 10-K (File No. 001-
14195) dated March 19, 1999
10.2 Registration Rights Agreement, dated as of
February 4, 1999, by and among ATC and Credit
Suisse First Boston Corporation..................... Incorporated by reference to
Exhibit 10.13 from the
Company's Annual Report on
Form 10-K (File No. 001-
14195) dated March 19, 1999
10.3 Second Amendment and Waiver to ATS Facility A Loan
Agreement, dated as of February 8, 1999, by and
among American Tower, L.P. (formerly known as
American Tower Systems, L.P.), a Delaware limited
partnership (ATLP), and ATI, as borrowers, and
Toronto Dominion (Texas), Inc. as Administrative Filed herewith as Exhibit
Agent, and the Banks parties thereto................ 10.3
10.4 Second Amendment and Waiver to ATS Facility B Loan
Agreement, dated as of February 8, 1999, by and
among ATLP and ATI, as borrowers, and Toronto
Dominion (Texas), Inc., as Administrative Agent, Filed herewith as Exhibit
and the Banks parties thereto....................... 10.4
10.5 Amended and Restated Registration Agreement, dated
as of February 25, 1999, among ATC and each of the
Parties named therein............................... Incorporated by reference to
Exhibit 10.1 from the
Company's Current Report on
Form 8-K/A dated March 18,
1999
27 Financial Data Schedule.............................. Filed herewith as Exhibit 27
(b) Reports on Form 8-K.
1. Form 8-K (Item 2) on January 8, 1999
2. Form 8-K (Item 5) on January 21, 1999
3. Form 8-K/A (Item 7) on January 27, 1999
4. Form 8-K (Item 5) on February 12, 1999
5. Form 8-K (Item 5) on February 24, 1999
6. Form 8-K (Items 2 and 7) on March 5, 1999
7. Form 8-K/A (Items 2 and 7) on March 18, 1999
19
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, thereunto duly authorized.
American Tower Corporation
By: /s/ Joseph L. Winn
Date: May 14, 1999 -----------------------------------
------------------
Joseph L. Winn
Treasurer & Chief Financial Officer
(Duly Authorized Officer)
By: /s/ Justin D. Benincasa
Date: May 14, 1999 -----------------------------------
------------------
Justin D. Benincasa
Vice President & Corporate
Controller
(Duly Authorized Officer)
20
EXHIBIT 10.3
EXECUTION COPY
SECOND AMENDMENT AND WAIVER
TO
ATS FACILITY A LOAN AGREEMENT
THIS SECOND AMENDMENT AND WAIVER TO ATS FACILITY A LOAN AGREEMENT (this
"Amendment and Waiver"), dated as of the 8th day of February, 1999 (the
- ---------------------
"Amendment and Waiver Date"), by and among AMERICAN TOWER, L.P. (formerly known
- --------------------------
as American Tower Systems, L.P.), a Delaware limited partnership, and AMERICAN
TOWERS, INC. (formerly known as American Tower Systems (Delaware), Inc.), a
Delaware corporation (collectively, the "Borrower"), the FINANCIAL INSTITUTIONS
--------
SIGNATORY HERETO and TORONTO DOMINION (TEXAS), INC., as administrative agent
(the "Administrative Agent") for the Banks (as defined in the Loan Agreement
--------------------
defined below);
W I T N E S S E T H:
-------------------
WHEREAS, the Borrower, the Banks and the Administrative Agent are parties to
that certain ATS Facility A Loan Agreement dated as of June 16, 1998, as amended
by that certain First Amendment to ATS Facility A Loan Agreement dated as of
October 30, 1998 (as amended, modified, supplemented and restated from time to
time, the "Loan Agreement"); and
--------------
WHEREAS, the Borrower has informed the Administrative Agent that American
Tower Corporation, a Delaware corporation and the parent company of the Borrower
(the "Parent") will issue an estimated 25,700,000 shares of Capital Stock in a
public sale and 500,000 shares of Capital Stock in a private sale, both to be
consummated in February, 1999 (the actual issuances being referred to
hereinafter collectively as the "1999 Parent Equity Issuance"); and
WHEREAS, the Borrower has informed Administrative Agent that it would like to
receive Facility A Capital Raise Proceeds in connection with the 1999 Parent
Equity Issuance without (a) making certain repayments of the Loans, as would
otherwise be required pursuant to Section 2.7(b)(v) of the Loan Agreement (the
"Mandatory Repayment") or (b) having the Revolving Loan Commitment reduced, as
would otherwise be required pursuant to Section 2.5(d) of the Loan Agreement,
upon and in an amount equal to any repayment of the Revolving Loans required
under Section 2.7(b)(v) of the Loan Agreement (the "Mandatory
Reduction"), in each case, upon receipt by the Parent, the Borrower or any
Restricted Subsidiary of any such Facility A Capital Raise Proceeds; and
WHEREAS, the Borrower has requested that the Banks waive, solely in connection
with the 1999 Parent Equity Issuance, each of (i) the Mandatory Reduction,
(ii) the Mandatory Repayment and (iii) any Default or Event of Default under the
Facility A Loan Agreement which would otherwise occur if the Mandatory Repayment
is not made; and
WHEREAS, the Borrower and the Banks have agreed to (a) waive, solely in
connection with the 1999 Parent Equity Issuance, (i) the Mandatory Reduction,
(iii) the Mandatory Repayment and (ii) any Default or Event of Default under the
Facility A Loan Agreement which would otherwise occur if the Mandatory Repayment
is made not made, and (b) amend Section 2.3 (f) of the Loan Agreement to change
the Applicable Margin set forth therein, in each case, on the terms and
conditions set forth herein;
NOW, THEREFORE, in consideration of the premises set forth above, the
covenants and agreements hereinafter set forth, and other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, the
parties hereto agree that all capitalized terms used herein shall have the
meanings ascribed thereto in the Loan Agreement, and further agree as follows:
1. Waiver In Connection with the Equity Issuance. This Amendment and
---------------------------------------------
Waiver, when executed by each of the Banks and accepted by the Borrower, will,
subject to the terms and conditions hereof, reflect the Banks' waiver, solely in
connection with the 1999 Parent Equity issuance of (i) the Mandatory Reduction,
(ii) the Mandatory Repayment, and (iii) any Default or Event of Default under
the Loan Agreement which would otherwise arise as a direct or indirect result of
the failure to make the Mandatory Repayment, in each case, as would otherwise be
required under the Loan Agreement as a direct or indirect result of receipt by
the Parent, the Borrower or any Restricted Subsidiary of any Facility A Capital
Raise Proceeds in connection with the 1999 Parent Equity Issuance.
2. Amendment to Article 2. Section 2.3(f) of the Loan Agreement,
----------------------
Interest: Applicable Margin, is hereby amended by deleting the first sentence
- ---------------------------
immediately following the Applicable Margin Ratio grid set forth in such section
in its entirety and by substituting in lieu thereof the following:
"Notwithstanding the foregoing, the LIBOR Advance Applicable Margin shall
not be less than, (i) prior to and including June 30, 1999, two percent
(2.000%), and (ii) from July 1, 1999 through and including December 31,
1999, one and three quarters of one percent (1.750%)."
-2-
3. No Other Amendment or Waiver. Except for the amendments set forth above,
----------------------------
the text of the Loan Agreement and all other Loan Documents shall remain
unchanged and in full force and effect. No waiver by the Administrative Agent or
the Banks under the Loan Agreement or any other Loan Document is granted or
intended except as expressly set forth herein, and the Administrative Agent and
the Banks expressly reserve the right to require strict compliance in all other
respects (whether or not in connection with any Requests for Advance). Except as
set forth herein, the amendment agreed to herein shall not constitute a
modification of the Loan Agreement or any of the other Loan Documents, or a
course of dealing with the Administrative Agent and the Banks at variance with
the Loan Agreement or any of the other Loan Documents, such as to require
further notice by the Administrative Agent, the Banks or the Majority Banks to
require strict compliance with the terms of the Loan Agreement and the other
Loan Documents in the future.
4. Representations and Warranties. The Borrower hereby represents and
------------------------------
warrants in favor of each of the Administrative Agent and each Bank that the
representations and warranties contained in Section 4.1 of the Loan Agreement
and contained in the other Loan Documents remain true and correct as of the date
hereof, both before and after giving effect to this Amendment and Waiver, except
to the extent previously fulfilled in accordance with the terms of the Loan
Agreement or such other Loan Document, as applicable, or to the extent relating
specifically to the Agreement Date. No Default now exists or will be caused
hereby.
5. Condition Precedent. The effectiveness of this Amendment and Waiver is
-------------------
subject to the receipt by the Administrative Agent of counterparts hereof
executed by the Banks and the Borrower and of all documents, instruments,
consents or items which the Administrative Agent shall deem appropriate in
connection herewith.
6. Loan Documents. This document shall be deemed to be a Loan Document for
--------------
all purposes under the Loan Agreement and the other Loan Documents.
7. Counterparts. This Amendment and Waiver may be executed in any number of
------------
counterparts, each of which shall be deemed to be an original, but all such
separate counterparts shall together constitute but one and the same instrument.
8. Governing Law. This Amendment and Waiver shall be construed in accordance
-------------
with and governed by the laws of the State of New York.
9. Severability. Any provision of this Amendment and Waiver which is
------------
prohibited or unenforceable shall be ineffective to the extent of such
prohibition or unenforceability without invalidating the remaining provisions
hereof in that jurisdiction or affecting the validity or enforceability of such
provision in any other jurisdiction.
[THE REMAINDER OF THIS PAGE INTENTIONALLY LEFT BLANK]
-3-
[THE REMAINDER OF THIS PAGE INTENTIONALLY LEFT BLANK]
-4-
IN WITNESS WHEREOF, the parties hereto have executed this Amendment and Waiver
or caused it to be executed by their duly authorized officers, all as of the day
and year first above written.
BORROWERS: AMERICAN TOWER, L.P. (formerly known as American Tower
Systems, L.P.)
By ATC GP INC. (formerly known as ATSC GP Inc.), its
General Partner
By:
---------------------------------------------------
Title:
-------------------------------------------
AMERICAN TOWERS, INC. (formerly known as American Tower
Systems (Delaware), Inc.)
By:
---------------------------------------------------
Title:
-------------------------------------------
ADMINISTRATIVE AGENT
AND BANKS: TORONTO DOMINION (TEXAS), INC., as Administrative Agent
for itself and the Banks and as a Bank
By:
---------------------------------------------------
Title:
-------------------------------------------
BANK OF AMERICA NATIONAL TRUST AND SAVINGS ASSOCIATION,
as a Bank
By:
---------------------------------------------------
Title:
-------------------------------------------
BANK OF MONTREAL, as a Bank
By:
---------------------------------------------------
Title:
-------------------------------------------
THE BANK OF NEW YORK, as a Bank
By:
---------------------------------------------------
Title:
-------------------------------------------
THE BANK OF NOVA SCOTIA, as a Bank
By:
---------------------------------------------------
Title:
-------------------------------------------
BANK OF SCOTLAND, as a Bank
By:
---------------------------------------------------
Title:
-------------------------------------------
BANKBOSTON, N.A., as a Bank
By:
---------------------------------------------------
Title:
-------------------------------------------
BANKERS TRUST COMPANY, as a Bank
By:
---------------------------------------------------
Title:
-------------------------------------------
BARCLAYS BANK, PLC, as a Bank
By:
---------------------------------------------------
Title:
-------------------------------------------
THE CHASE MANHATTAN BANK, as a Bank
By:
---------------------------------------------------
Title:
-------------------------------------------
THE CIT GROUP/EQUIPMENT FINANCING, INC., as a Bank
By:
---------------------------------------------------
Title:
-------------------------------------------
CITY NATIONAL BANK, as a Bank
By:
---------------------------------------------------
Title:
-------------------------------------------
COBANK, ACB, as a Bank
By:
---------------------------------------------------
Title:
-------------------------------------------
CREDIT LYONNAIS NEW YORK BRANCH, as a Bank
By:
---------------------------------------------------
Title:
-------------------------------------------
CREDIT SUISSE FIRST BOSTON, as a Bank
By:
---------------------------------------------------
Title:
-------------------------------------------
By:
---------------------------------------------------
Title:
-------------------------------------------
CRESTAR BANK, as a Bank
By:
---------------------------------------------------
Title:
-------------------------------------------
DRESDNER BANK AG, NEW YORK AND GRAND CAYMAN BRANCHES,
as a Bank
By:
---------------------------------------------------
Title:
-------------------------------------------
By:
---------------------------------------------------
Title:
-------------------------------------------
FIRST NATIONAL BANK OF MARYLAND, as a Bank
By:
---------------------------------------------------
Title:
-------------------------------------------
FLEET NATIONAL BANK, as a Bank
By:
---------------------------------------------------
Title:
-------------------------------------------
GENERAL ELECTRIC CAPITAL CORPORATION, as a Bank
By:
---------------------------------------------------
Title:
-------------------------------------------
THE HOWARD BANK, N.A., as a Bank
By:
---------------------------------------------------
Title:
-------------------------------------------
KEY CORPORATE CAPITAL INC., as a Bank
By:
---------------------------------------------------
Title:
-------------------------------------------
LEHMAN COMMERCIAL PAPER INC., as a Bank
By:
---------------------------------------------------
Title:
-------------------------------------------
THE LONG-TERM CREDIT BANK OF JAPAN, LTD., NEW YORK
BRANCH, as a Bank
By:
---------------------------------------------------
Title:
-------------------------------------------
MELLON BANK, N.A., as a Bank
By:
---------------------------------------------------
Title:
-------------------------------------------
MERCANTILE BANK NATIONAL ASSOCIATION, as a Bank
By:
---------------------------------------------------
Title:
-------------------------------------------
MORGAN STANLEY SENIOR FUNDING, INC., as a Bank
By:
---------------------------------------------------
Title:
-------------------------------------------
NATIONAL BANK OF CANADA, as a Bank
By:
---------------------------------------------------
Title:
-------------------------------------------
By:
---------------------------------------------------
Title:
-------------------------------------------
PNC BANK, NATIONAL ASSOCIATION, as a Bank
By:
---------------------------------------------------
Title:
-------------------------------------------
SOCIETE GENERALE, NEW YORK BRANCH, as a Bank
By:
---------------------------------------------------
Title:
-------------------------------------------
STATE STREET BANK AND TRUST COMPANY, as a Bank
By:
---------------------------------------------------
Title:
-------------------------------------------
UNION BANK OF CALIFORNIA, N.A., as a Bank
By:
---------------------------------------------------
Title:
-------------------------------------------
US TRUST, as a Bank
By:
---------------------------------------------------
Title:
-------------------------------------------
SYNDICATED LOAN FUNDING TRUST
By Lehman Commercial Paper, Inc., not in its individual
capacity, but solely as Asset Manager
By:
---------------------------------------------------
Title:
-------------------------------------------
EXHIBIT 10.4
EXECUTION COPY
SECOND AMENDMENT AND WAIVER
TO
ATS FACILITY B LOAN AGREEMENT
THIS SECOND AMENDMENT AND WAIVER TO ATS FACILITY B LOAN AGREEMENT (this
"Amendment and Waiver"), dated as of the 8th day of February, 1999 (the
- ---------------------
"Amendment and Waiver Date"), by and among AMERICAN TOWER, L.P. (formerly known
- --------------------------
as American Tower Systems, L.P.), a Delaware limited partnership, and AMERICAN
TOWERS, INC. (formerly known as American Tower Systems (Delaware), Inc.), a
Delaware corporation (collectively, the "Borrower"), the FINANCIAL INSTITUTIONS
--------
SIGNATORY HERETO and TORONTO DOMINION (TEXAS), INC., as administrative agent
(the "Administrative Agent") for the Banks (as defined in the Loan Agreement
--------------------
defined below);
W I T N E S S E T H:
-------------------
WHEREAS, the Borrower, the Banks and the Administrative Agent are parties to
that certain ATS Facility B Loan Agreement dated as of June 16, 1998, as amended
by that certain First Amendment to ATS Facility B Loan Agreement dated as of
October 30, 1998 (as amended, modified, supplemented and restated from time to
time, the "Loan Agreement"); and
--------------
WHEREAS, the Borrower has informed the Administrative Agent that American
Tower Corporation, a Delaware corporation and the parent company of the Borrower
(the "Parent") will issue an estimated 25,700,000 shares of Capital Stock in a
public sale and 500,000 shares of Capital Stock in a private sale, both to be
consummated in February, 1999 (the actual issuances being referred to
hereinafter collectively as the "1999 Parent Equity Issuance"); and
WHEREAS, the Borrower has informed Administrative Agent that it would like to
receive Facility B Capital Raise Proceeds in connection with the 1999 Parent
Equity Issuance without (a) making certain repayments of the Facility B Loan, as
would otherwise be required pursuant to Section 2.7(b)(v) of the Loan Agreement
(the "Mandatory Repayment") or (b) having the Facility B Commitment reduced, as
would otherwise be required pursuant to Section 2.5(c) of the Loan Agreement,
upon and in an amount equal to any repayment of the Facility B Loan required
under Section 2.7(b)(v) of the Loan Agreement (the "Mandatory
Reduction"), in each case, upon receipt by the Parent, the Borrower or any
Restricted Subsidiary of any such Facility B Capital Raise Proceeds; and
WHEREAS, the Borrower has requested that the Banks waive, solely in connection
with the 1999 Parent Equity Issuance, each of (i) the Mandatory Reduction,
(ii) the Mandatory Repayment and (iii) any Default or Event of Default under the
Facility B Loan Agreement which would otherwise occur if the Mandatory Repayment
is not made; and
WHEREAS, the Borrower and the Banks have agreed to (a) waive, solely in
connection with the 1999 Parent Equity Issuance, (i) the Mandatory Reduction,
(iii) the Mandatory Repayment and (ii) any Default or Event of Default under the
Facility B Loan Agreement which would otherwise occur if the Mandatory Repayment
is made not made, and (b) amend Section 2.3 (f) of the Loan Agreement to change
the Applicable Margin set forth therein, in each case, on the terms and
conditions set forth herein;
NOW, THEREFORE, in consideration of the premises set forth above, the
covenants and agreements hereinafter set forth, and other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, the
parties hereto agree that all capitalized terms used herein shall have the
meanings ascribed thereto in the Loan Agreement, and further agree as follows:
1. Waiver In Connection with the Equity Issuance. This Amendment and
---------------------------------------------
Waiver, when executed by each of the Banks and accepted by the Borrower, will,
subject to the terms and conditions hereof, reflect the Banks' waiver, solely in
connection with the 1999 Parent Equity issuance of (i) the Mandatory Reduction,
(ii) the Mandatory Repayment, and (iii) any Default or Event of Default under
the Loan Agreement which would otherwise arise as a direct or indirect result of
the failure to make the Mandatory Repayment, in each case, as would otherwise be
required under the Loan Agreement as a direct or indirect result of receipt by
the Parent, the Borrower or any Restricted Subsidiary of any Facility B Capital
Raise Proceeds in connection with the 1999 Parent Equity Issuance.
2. Amendment to Article 2. Section 2.3(f) of the Loan Agreement,
----------------------
Interest: Applicable Margin, is hereby amended by deleting the first sentence
- ---------------------------
immediately following the Applicable Margin Ratio grid set forth in such section
in its entirety and by substituting in lieu thereof the following:
"Notwithstanding the foregoing, the LIBOR Advance Applicable Margin shall
not be less than, (i) prior to and including June 30, 1999, two percent
(2.000%), and (ii) from July 1, 1999 through and including December 31,
1999, one and three quarters of one percent (1.750%)."
-2-
3. No Other Amendment or Waiver. Except for the amendments set
----------------------------
forth above, the text of the Loan Agreement and all other Loan Documents shall
remain unchanged and in full force and effect. No waiver by the Administrative
Agent or the Banks under the Loan Agreement or any other Loan Document is
granted or intended except as expressly set forth herein, and the Administrative
Agent and the Banks expressly reserve the right to require strict compliance in
all other respects (whether or not in connection with any Requests for Advance).
Except as set forth herein, the amendment agreed to herein shall not constitute
a modification of the Loan Agreement or any of the other Loan Documents, or a
course of dealing with the Administrative Agent and the Banks at variance with
the Loan Agreement or any of the other Loan Documents, such as to require
further notice by the Administrative Agent, the Banks or the Majority Banks to
require strict compliance with the terms of the Loan Agreement and the other
Loan Documents in the future.
4. Representations and Warranties. The Borrower hereby represents
------------------------------
and warrants in favor of each of the Administrative Agent and each Bank that the
representations and warranties contained in Section 4.1 of the Loan Agreement
and contained in the other Loan Documents remain true and correct as of the date
hereof, both before and after giving effect to this Amendment and Waiver, except
to the extent previously fulfilled in accordance with the terms of the Loan
Agreement or such other Loan Document, as applicable, or to the extent relating
specifically to the Agreement Date. No Default now exists or will be caused
hereby.
5. Condition Precedent. The effectiveness of this Amendment and
-------------------
Waiver is subject to the receipt by the Administrative Agent of counterparts
hereof executed by the Banks and the Borrower and of all documents, instruments,
consents or items which the Administrative Agent shall deem appropriate in
connection herewith.
6. Loan Documents. This document shall be deemed to be a Loan
--------------
Document for all purposes under the Loan Agreement and the other Loan Documents.
7. Counterparts. This Amendment and Waiver may be executed in any
------------
number of counterparts, each of which shall be deemed to be an original, but all
such separate counterparts shall together constitute but one and the same
instrument.
8. Governing Law. This Amendment and Waiver shall be construed in
-------------
accordance with and governed by the laws of the State of New York.
9. Severability. Any provision of this Amendment and Waiver which
------------
is prohibited or unenforceable shall be ineffective to the extent of such
prohibition or unenforceability without invalidating the remaining provisions
hereof in that jurisdiction or affecting the validity or enforceability of such
provision in any other jurisdiction.
[THE REMAINDER OF THIS PAGE INTENTIONALLY LEFT BLANK]
-3-
[THE REMAINDER OF THIS PAGE INTENTIONALLY LEFT BLANK]
-4-
IN WITNESS WHEREOF, the parties hereto have executed this Amendment and Waiver
or caused it to be executed by their duly authorized officers, all as of the day
and year first above written.
BORROWERS: AMERICAN TOWER, L.P. (formerly known as American Tower
Systems, L.P.)
By ATC GP INC. (formerly known as ATSC GP Inc.), its
General Partner
By:
--------------------------------------------------
Title:
-------------------------------------------
AMERICAN TOWERS, INC. (formerly known as American Tower
Systems (Delaware), Inc.)
By:
--------------------------------------------------
Title:
-------------------------------------------
ADMINISTRATIVE AGENT
AND BANKS: TORONTO DOMINION (TEXAS), INC., as Administrative Agent
for itself and the Banks and as a Bank
By:
--------------------------------------------------
Title:
-------------------------------------------
BANK OF AMERICA NATIONAL TRUST AND SAVINGS ASSOCIATION,
as a Bank
By:
--------------------------------------------------
Title:
-------------------------------------------
BANK OF MONTREAL, as a Bank
By:
--------------------------------------------------
Title:
-------------------------------------------
THE BANK OF NEW YORK, as a Bank
By:
--------------------------------------------------
Title:
-------------------------------------------
THE BANK OF NOVA SCOTIA, as a Bank
By:
--------------------------------------------------
Title:
-------------------------------------------
BANK OF SCOTLAND, as a Bank
By:
--------------------------------------------------
Title:
-------------------------------------------
BANKBOSTON, N.A., as a Bank
By:
--------------------------------------------------
Title:
-------------------------------------------
BANKERS TRUST COMPANY, as a Bank
By:
--------------------------------------------------
Title:
-------------------------------------------
BARCLAYS BANK, PLC, as a Bank
By:
--------------------------------------------------
Title:
-------------------------------------------
THE CHASE MANHATTAN BANK, as a Bank
By:
--------------------------------------------------
Title:
-------------------------------------------
THE CIT GROUP/EQUIPMENT FINANCING, INC., as a Bank
By:
--------------------------------------------------
Title:
-------------------------------------------
CITY NATIONAL BANK, as a Bank
By:
--------------------------------------------------
Title:
-------------------------------------------
COBANK, ACB, as a Bank
By:
--------------------------------------------------
Title:
-------------------------------------------
CREDIT LYONNAIS NEW YORK BRANCH, as a Bank
By:
--------------------------------------------------
Title:
-------------------------------------------
CREDIT SUISSE FIRST BOSTON, as a Bank
By:
--------------------------------------------------
Title:
-------------------------------------------
By:
--------------------------------------------------
Title:
-------------------------------------------
CRESTAR BANK, as a Bank
By:
--------------------------------------------------
Title:
-------------------------------------------
DRESDNER BANK AG, NEW YORK AND GRAND CAYMAN BRANCHES,
as a Bank
By:
--------------------------------------------------
Title:
-------------------------------------------
By:
--------------------------------------------------
Title:
-------------------------------------------
FIRST NATIONAL BANK OF MARYLAND, as a Bank
By:
--------------------------------------------------
Title:
-------------------------------------------
FLEET NATIONAL BANK, as a Bank
By:
--------------------------------------------------
Title:
-------------------------------------------
GENERAL ELECTRIC CAPITAL CORPORATION, as a Bank
By:
--------------------------------------------------
Title:
-------------------------------------------
THE HOWARD BANK, N.A., as a Bank
By:
--------------------------------------------------
Title:
-------------------------------------------
KEY CORPORATE CAPITAL INC., as a Bank
By:
--------------------------------------------------
Title:
-------------------------------------------
LEHMAN COMMERCIAL PAPER INC., as a Bank
By:
--------------------------------------------------
Title:
-------------------------------------------
THE LONG-TERM CREDIT BANK OF JAPAN, LTD., NEW YORK
BRANCH, as a Bank
By:
--------------------------------------------------
Title:
-------------------------------------------
MELLON BANK, N.A., as a Bank
By:
--------------------------------------------------
Title:
-------------------------------------------
MERCANTILE BANK NATIONAL ASSOCIATION, as a Bank
By:
--------------------------------------------------
Title:
-------------------------------------------
MORGAN STANLEY SENIOR FUNDING, INC., as a Bank
By:
--------------------------------------------------
Title:
-------------------------------------------
NATIONAL BANK OF CANADA, as a Bank
By:
--------------------------------------------------
Title:
-------------------------------------------
By:
--------------------------------------------------
Title:
PNC BANK, NATIONAL ASSOCIATION, as a Bank
By:
--------------------------------------------------
Title:
-------------------------------------------
SOCIETE GENERALE, NEW YORK BRANCH, as a Bank
By:
--------------------------------------------------
Title:
-------------------------------------------
STATE STREET BANK AND TRUST COMPANY, as a Bank
By:
--------------------------------------------------
Title:
-------------------------------------------
UNION BANK OF CALIFORNIA, N.A., as a Bank
By:
--------------------------------------------------
Title:
-------------------------------------------
US TRUST, as a Bank
By:
--------------------------------------------------
Title:
-------------------------------------------
SYNDICATED LOAN FUNDING TRUST
By Lehman Commercial Paper, Inc., not in its individual
capacity, but solely as Asset Manager
By:
--------------------------------------------------
Title:
-------------------------------------------
5
3-MOS
DEC-31-1999
JAN-01-1999
MAR-31-1999
483,263
0
33,737
1,685
3,950
539,837
674,030
31,392
2,528,537
66,288
287,871
0
0
1,552
2,161,024
2,528,537
0
42,408
0
25,170
26,509
479,537
6,001
(10,326)
826
(9,500)
0
0
0
(9,500)
(0.07)
(0.07)
