What was the primary driver of revenue growth in the first quarter of 2007?

The primary driver of revenue growth was the 'rental and management' segment, which saw a 9% increase to $346.0 million. This growth was attributed to increased leasing activity on existing tower sites, revenue from newly acquired or constructed sites, contractual rent escalators, and favorable currency exchange rates, partially offset by lease cancellations.

Why did selling, general, administrative, and development expenses increase so significantly?

The substantial increase in SG&A expenses, by $12.3 million, was primarily due to a $7.1 million increase in stock-based compensation expense and approximately $2.8 million in costs associated with the ongoing review of the company's stock option granting practices and related legal and governmental proceedings.

How did the company manage its debt obligations during the quarter?

The company actively managed its debt through several financing transactions. It repurchased $192.5 million of its 5.0% convertible notes and saw $58.0 million principal amount of its 3.25% convertible notes converted into shares. Long-term obligations increased to $3.57 billion, reflecting increased borrowings under credit facilities, but the company also utilized significant cash for stock repurchases.

What is the outlook for the company's rental and management revenue going forward?

Management believes its rental and management revenue will continue to increase as it further utilizes existing site capacity. The company anticipates that the majority of new leasing activity will continue to come from wireless and broadcast service providers.

AMT 10-Q Quarterly Report Q1 FY2007 — Revenue, Net Income, EPS

Summary

American Tower Corporation (AMT) reported its first quarter 2007 financial results, showing a notable shift from a net loss in the prior year period to a net income of $22.2 million. Total operating revenues increased by 10% year-over-year to $352.5 million, driven by a 9% rise in rental and management revenue to $346.0 million. This growth was primarily attributed to increased leasing on existing sites and revenue from acquired/constructed sites. The company's operating expenses also increased by 5% to $266.4 million, largely due to a significant jump in selling, general, administrative, and development expenses, which included higher stock-based compensation and costs related to the ongoing stock option review. Despite increased expenses, operating income grew by 27% to $86.1 million. A significant factor impacting the bottom line was the substantial reduction in "Loss on retirement of long-term obligations," which decreased by 81% to $4.2 million, contributing to the positive net income. The company also repurchased a significant amount of its stock, totaling $496.2 million in the quarter, as part of its ongoing repurchase programs.

Key Highlights

1Total operating revenues increased by 10% to $352.5 million for the three months ended March 31, 2007, compared to $320.4 million in the prior year period.
2Net income of $22.2 million was reported for the quarter, a significant improvement from a net loss of $1.9 million in the same period last year.
3Rental and management revenue, the company's primary revenue stream, grew by 9% to $346.0 million.
4Operating income increased by 27% to $86.1 million, demonstrating improved operational profitability.
5Stock-based compensation expense significantly increased to $16.7 million from $9.5 million, impacting SG&A expenses.
6The company repurchased $496.2 million of its Class A common stock during the quarter under its stock repurchase programs.
7Long-term obligations increased by $281.2 million to $3.57 billion, primarily due to increased borrowings under credit facilities.

AMERICAN TOWER CORP /MA/ Quarterly Report for Q1 Ended Mar 31, 2007

Summary

Key Highlights

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