8-KOther Events

AMERICAN TOWER CORP /MA/ 8-K Report, Corporate Update (Nov 14, 2006)

Filed November 14, 2006For Securities:AMT

Summary

American Tower Corporation (AMT) filed an 8-K on November 14, 2006, primarily to provide an update on its ongoing restatement of financial statements related to historical stock option granting practices and accounting. The company has been unable to file its quarterly reports for the periods ending June 30, 2006, and September 30, 2006, due to this restatement process. This failure to file has triggered or could trigger defaults under the company's credit facilities and indentures governing its convertible and senior notes. While new waivers were obtained from lenders under its credit facilities, extending the deadline for financial report delivery to December 22, 2006, potential acceleration of debt remains a risk if the company cannot meet these obligations. AMT expects to meet these requirements before cure periods expire but cautions that actual results could differ due to uncertainties in the restatement and ongoing investigations.

Key Highlights

  • 1AMT is in the process of restating its financial statements due to historical stock option granting practices and related accounting issues.
  • 2The company has not yet filed its Form 10-Q for the quarters ended June 30, 2006, and September 30, 2006.
  • 3Failure to file these reports constitutes a default or event of default under AMT's credit facilities.
  • 4New waivers have been obtained from lenders under credit facilities, extending the deadline for financial report delivery to December 22, 2006.
  • 5This failure also impacts indentures for convertible and senior notes, with potential for default and acceleration of debt if not cured within specified periods.
  • 6AMT expects to satisfy filing requirements before cure periods expire but acknowledges the risks and uncertainties involved.

Frequently Asked Questions

The main reason for the filing is to update investors on the ongoing restatement of American Tower's financial statements due to issues with historical stock option granting practices and their accounting. This restatement has prevented the company from filing its required quarterly reports.

The failure to file the quarterly reports on time has triggered defaults or potential defaults under the company's credit facilities and indentures for its convertible and senior notes. This could lead to lenders or noteholders demanding immediate repayment of outstanding principal and interest, although waivers have been obtained to extend deadlines.

The company obtained new waivers that extend the deadline for delivering the required financial reports for the periods ended June 30, 2006, and September 30, 2006, to December 22, 2006.

American Tower currently expects to satisfy the information delivery and filing requirements under its credit facilities and indentures before the expiration of any applicable cure periods. However, the company cautions that there can be no assurance that they will be able to do so, as the process involves significant risks and uncertainties.