10-QPeriod: Q2 FY2007

AMERICAN TOWER CORP /MA/ Quarterly Report for Q2 Ended Jun 30, 2007

Filed August 7, 2007For Securities:AMT

Summary

American Tower Corporation (AMT) reported its second quarter 2007 results, highlighting a 10% increase in total revenues to $358.4 million, driven primarily by a 10% rise in rental and management revenue to $350.8 million. This growth was attributed to new tenants, equipment additions on existing sites, contractual escalators, and favorable currency exchange rates. Despite revenue growth, the company reported a net loss of $19.99 million for the quarter, a significant decline from a net income of $7.66 million in the prior year period. This loss was largely impacted by a substantial increase in "Loss from discontinued operations, net" due to a proposed settlement in the Verestar bankruptcy proceedings. Financially, AMT executed a major $1.75 billion securitization transaction in May 2007, using the proceeds to repay outstanding debt and for general corporate purposes. The company also refinanced its credit facilities, securing a new $1.25 billion senior unsecured revolving credit facility. Despite the net loss, operating cash flow improved significantly, and the company continued its aggressive stock repurchase program, buying back approximately $910.4 million in shares during the first six months of the year. The company provided guidance for the full year 2007, anticipating total capital expenditures between $140 million and $150 million.

Key Highlights

  • 1Total revenues increased by 10% to $358.4 million for the three months ended June 30, 2007, compared to $325.9 million in the prior year period.
  • 2Rental and management revenue grew by 10% to $350.8 million, driven by new tenants, existing tenant growth, and contractual escalators.
  • 3The company completed a significant $1.75 billion securitization transaction in May 2007, using proceeds to reduce debt and enhance financial flexibility.
  • 4A new $1.25 billion senior unsecured revolving credit facility was established in June 2007, replacing previous credit facilities.
  • 5Cash provided by operating activities increased substantially to $382.2 million for the six months ended June 30, 2007, up from $292.6 million in the prior year.
  • 6The company repurchased approximately $910.4 million of its Class A common stock during the first six months of 2007, underscoring a strong commitment to shareholder returns.
  • 7A net loss of $19.99 million was reported for the quarter, significantly impacted by a $32.0 million charge related to a proposed settlement in the Verestar bankruptcy proceedings.

Frequently Asked Questions

The primary driver of revenue growth was the rental and management segment, which saw a 10% increase to $350.8 million. This growth was fueled by adding new tenants to existing sites, existing tenants expanding their equipment, contractual rent escalators, favorable currency exchange rates, and extending lease renewal dates.

American Tower completed a substantial $1.75 billion securitization transaction involving 5,295 towers. The proceeds were used to repay existing debt, including amounts under the SpectraSite and American Tower credit facilities, and for general corporate purposes. Additionally, the company established a new $1.25 billion senior unsecured revolving credit facility.

The reported net loss of $19.99 million for the quarter was significantly influenced by a substantial loss from discontinued operations. This was primarily due to a $32.0 million estimated liability recorded for a proposed settlement in the Verestar bankruptcy proceedings and related litigation.

The company continues to manage its debt through refinancing and debt repurchases, highlighted by the $1.75 billion securitization and the new $1.25 billion credit facility. Operating cash flow has shown strong improvement. American Tower also remains committed to returning capital to shareholders, evidenced by its aggressive stock repurchase program, having bought back approximately $910.4 million in the first six months of 2007.