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American Tower Corporation Reports First Quarter 2007 Financial ResultsBOSTON --(Business Wire)-- American Tower Corporation (NYSE: AMT) today reported financial results for the first quarter ended March 31, 2007. Jim Taiclet, American Tower's Chief Executive Officer, stated, "Wireless communications continue to increase in importance for consumers and business users alike. As a result, our major customers in both the U.S. and Latin America are enjoying sustained growth in revenue and profitability. Moreover, wireless service providers are focusing on improving the quality of their services and launching new services. "These two factors, the profitable growth of the wireless industry and its focus on high quality existing and new services, drive strong demand for tower space that we believe is sustainable over time. Our first quarter financial results reflect both this overarching industry growth trend and American Tower's ability to consistently deliver the highest operating margins in the tower sector. "We are also taking advantage of the size and quality of our tower portfolio to advance our financial strategy. Our recently completed $1.75 billion securitization of a portion of our tower assets increased our financial flexibility while reducing our cost of financing. With the securitized financing in place, we are in a solid position to move forward on additional improvements to our balance sheet while supporting our ongoing share repurchase program and maintaining our readiness to pursue strategic opportunities." First Quarter 2007 Operating Highlights American Tower generated the following operating results for the quarter ended March 31, 2007 (unless otherwise indicated, all comparative information is compared against the quarter ended March 31, 2006): Total revenues increased 10% to $352.5 million and rental and management segment revenues increased 9% to $346.0 million. Rental and Management Segment Gross Margin increased 11% to $265.8 million and Services segment revenue and Gross Margin increased to $6.4 million and $2.9 million, respectively. Total selling, general, administrative and development expense was $48.6 million. The Company's selling, general, administrative and development expense for the quarter includes stock-based compensation expense of $16.7 million and $2.8 million of additional costs related to the review of the Company's stock option granting practices, related legal and governmental proceedings and other related costs. Including these additional costs related to the stock option review, Adjusted EBITDA increased 10% to $236.7 million and Adjusted EBITDA Margin was 67%. Income from operations increased to $86.1 million, and net income increased to $22.2 million, or $0.05 per basic and diluted common share. Free Cash Flow increased to $139.9 million, consisting of $171.4 million of cash provided by operating activities, less $31.4 million of payments for purchases of property and equipment and construction activities, including $16.6 million of discretionary capital spending. The Company completed the construction of 22 towers and the installation of 4 in-building systems during the quarter and spent approximately $9.9 million on ground lease purchases. Subsequent to the end of the first quarter of 2007, the Company received net proceeds of approximately $80 million in connection with the successful completion of its refund claim with the Internal Revenue Service related to the carry back of certain federal net operating losses. Please refer to Non-GAAP and Defined Financial Measures on pages 3 and 4 for definitions of Rental and Management Segment Gross Margin, Services Segment Gross Margin, Adjusted EBITDA, Adjusted EBITDA Margin and Free Cash Flow. For additional financial information, including reconciliations to GAAP measures, please refer to the supplemental schedules of selected financial information on pages 8 through 11. Stock Repurchase Program During the quarter ended March 31, 2007, the Company completed its $750 million stock repurchase program and commenced repurchases pursuant to its $1.5 billion stock repurchase program. As a result, during the quarter the Company repurchased a total of 12.6 million shares of its Class A common stock for approximately $496 million. As of May 2, 2007, the Company had repurchased pursuant to its publicly announced stock repurchase programs an aggregate of 29.3 million shares of its Class A common stock for approximately $1,039 million since November 2005, which includes the repurchase of 3.7 million shares of its Class A common stock for approximately $144 million subsequent to March 31, 2007. The Company expects to complete the remaining $1,211 million of stock repurchases pursuant to its current $1.5 billion stock repurchase program by February of 2008. Financing Highlights On May 4, 2007, the Company completed the issuance, in a private transaction, of $1.75 billion of Commercial Mortgage Pass-Through Certificates. The Certificates are backed by debt of two special-purpose subsidiaries of the Company, which are secured primarily by mortgages on their interests in 5,295 wireless and broadcast communication towers and the related tower sites. The Certificates have an expected life of seven years with a final maturity date of April 2037 and the weighted average interest rate on the certificates is approximately 5.61%. The Company used a portion of the net proceeds from the offering of the Certificates to repay approximately $765 million outstanding under its SpectraSite credit facility, plus accrued interest thereon and other costs related thereto, as well as $250 million under its American Tower revolving credit facility. The Company expects to use the remaining net proceeds to fund the repurchase of approximately $325 million of the Company's 7.25% senior subordinated notes due 2011 of American Towers, Inc. pursuant to the tender offer previously announced by the Company, to pay other consideration payable in connection with the tender offer and the related consent solicitation, and for general corporate purposes. Pro forma for the securitization, including the use of proceeds described above, the Company had approximately $1.0 billion of available liquidity as of May 7, 2007. Full Year 2007 Outlook The following estimates are based on a number of assumptions that management believes to be reasonable, and reflect the Company's expectations as of May 7, 2007. Please refer to the cautionary language regarding "forward-looking" statements included in this press release when considering this information. The Company undertakes no obligation to update this information.
($ in millions) Full Year 2007
-------------------
Rental and management segment revenue $1,400 to $1,420
Rental and management segment gross margin (1) 1,070 to 1,093
Services segment revenue 23 to 27
Services segment gross margin (1) 12 to 14
Adjusted EBITDA (1, 2) 962 to 991
Depreciation, accretion and amortization 526 to 530
Interest expense 235 to 225
Income from continuing operations (3) 64 to 79
Payments for purchase of property and equipment and
construction activities (4) 140 to 150
(1) See Non-GAAP and Defined Financial Measures below.
(2) Adjusted EBITDA outlook does not include any estimate of future
costs with respect to the legal and governmental proceedings related
to the review of the Company's stock option granting practices.
Adjusted EBITDA excludes $49 million to $53 million of stock-based
compensation expense.
(3) Includes $28 million loss on retirement of long-term obligations
related to the Company's repayment of the SpectraSite credit
facility, inducements of the Company's 3.25% Convertible Notes due
2010 and the previously announced tender offer for the Company's
7.25% Senior Subordinated Notes due 2011 of American Towers, Inc.
(4) The Company's full year 2007 outlook for capital expenditures
includes costs for the construction of approximately 200 new wireless
towers and the installation of 25 in-building systems and
approximately $40 million of land purchases.
Conference Call Information American Tower will host a conference call today at 8:30 a.m. ET to discuss its first quarter 2007 results and the Company's outlook for the full year 2007. The call will be hosted by Brad Singer, Chief Financial Officer, who will be joined by Jim Taiclet, Chairman and Chief Executive Officer. The dial-in numbers are US/Canada: (877) 235-9047 and International: (706) 645-9644, access code 5191904. A replay of the call will be available from 9:30 a.m. ET May 7, 2007 until 11:59 p.m. ET May 14, 2007. The replay dial-in numbers are US/Canada: (800) 642-1687 and International: (706) 645-9291, access code 5191904. American Tower will also sponsor a live simulcast of the call on its website, www.americantower.com. When available, a replay of the call will be accessible on the Company's website. American Tower is a leading independent owner, operator and developer of broadcast and wireless communications sites in the United States, Mexico and Brazil. American Tower owns and operates over 22,000 sites in the United States, Mexico, and Brazil. Additionally, American Tower manages approximately 2,000 revenue producing rooftop and tower sites. For more information about American Tower, please visit www.americantower.com. Non-GAAP and Defined Financial Measures In addition to the results prepared in accordance with generally accepted accounting principles (GAAP) provided throughout this press release, the Company has presented the following non-GAAP and defined financial measures: Rental and Management Segment Gross Margin, Services Segment Gross Margin, Adjusted EBITDA, Adjusted EBITDA Margin and Free Cash Flow. American Tower defines Rental and Management Segment Gross Margin as income from operations before depreciation, amortization and accretion, impairments, net loss on sale of long-lived assets, restructuring and merger related expense, stock-based compensation expense, corporate expenses, rental and management segment overhead, services segment overhead, services segment operating expenses, services segment revenue, plus interest income, TV Azteca, net. American Tower defines Services Segment Gross Margin as income from operations before depreciation, amortization and accretion, impairments, net loss on sale of long-lived assets, restructuring and merger related expense, stock-based compensation expense, corporate expenses, services segment overhead, rental and management segment overhead, rental and management segment operating expenses, and rental and management segment revenue. American Tower defines Adjusted EBITDA as income from operations before depreciation, amortization and accretion, impairments, net loss on sale of long-lived assets, restructuring and merger related expense and stock-based compensation expense, plus interest income, TV Azteca, net. American Tower defines Adjusted EBITDA Margin as a percentage of Adjusted EBITDA over total revenue. American Tower defines Free Cash Flow as cash provided by operating activities less payments for purchase of property and equipment and construction activities. These measures are not intended as substitutes for other measures of financial performance determined in accordance with GAAP. They are presented as additional information because management believes they are useful indicators of the current financial performance of our core businesses. We believe that these measures can assist in comparing company performances on a consistent basis without regard to depreciation and amortization or capital structure. Our concern is that depreciation and amortization can vary significantly among companies depending on accounting methods, particularly where acquisitions or non-operating factors including historical cost bases are involved. Notwithstanding the foregoing, the Company's measures of Rental and Management Segment Gross Margin, Services Segment Gross Margin, Adjusted EBITDA, Adjusted EBITDA Margin and Free Cash Flow may not be comparable to similarly titled measures used by other companies. Cautionary Language Concerning Forward-Looking Statements This press release contains "forward-looking statements" concerning the Company's goals, beliefs, expectations, strategies, objectives, plans, future operating results and underlying assumptions, and other statements that are not necessarily based on historical facts. Actual results may differ materially from those indicated in our forward-looking statements as a result of various important factors, including: (1) a decrease in demand for tower space would materially and adversely affect our operating results and we cannot control that demand; (2) if our wireless service provider customers consolidate or merge with each other to a significant degree, our growth, revenue and ability to generate positive cash flows could be adversely affected; (3) substantial leverage and debt service obligations may adversely affect us; (4) restrictive covenants in our credit facilities and indentures could adversely affect our business by limiting flexibility; (5) due to the long-term expectations of revenue from tenant leases, the tower industry is sensitive to the creditworthiness of its tenants; (6) our foreign operations are subject to economic, political and other risks that could adversely affect our revenues or financial position; (7) a substantial portion of our revenues is derived from a small number of customers; (8) status of Iusacell Celular's financial restructuring exposes us to risks and uncertainties (9) new technologies could make our tower leasing business less desirable to potential tenants and result in decreasing revenues; (10) we could have liability under environmental laws; (11) our business is subject to governmental regulations and changes in current or future laws or regulations could restrict our ability to operate our business as we currently do; (12) increasing competition in the tower industry may create pricing pressures that may adversely affect us; (13) if we are unable to protect our rights to the land under our towers, it could adversely affect our business and operating results; (14) if we are unable or choose not to exercise our rights to purchase towers that are subject to lease and sublease agreements at the end of the applicable period, our cash flows derived from such towers would be eliminated; (15) our towers may be affected by natural disasters and other unforeseen damage for which our insurance may not provide adequate coverage; (16) our costs could increase and our revenues could decrease due to perceived health risks from radio emissions, especially if these risks are substantiated; (17) our stock option granting practices are subject to ongoing governmental proceedings, which could result in fines, penalties or other liability; (18) pending civil litigation relating to our stock option granting practices exposes us to risks and uncertainties; and (19) the bankruptcy proceeding of our Verestar subsidiary exposes us to risks and uncertainties. For other important factors that may cause actual results to differ materially from those indicated in our forward-looking statements, we refer you to the information contained in Item 1A of our Form 10-K for the year ended December 31, 2006 under the caption "Risk Factors." We undertake no obligation to update the information contained in this press release to reflect subsequently occurring events or circumstances.
UNAUDITED CONDENSED
CONSOLIDATED BALANCE SHEETS
(In thousands) March 31, December 31,
2007 2006
------------ ------------
ASSETS
Current Assets:
Cash and cash equivalents $ 47,151 $ 281,264
Available-for-sale securities 14,329 22,986
Accounts receivable, net 33,734 29,368
Prepaid and other current assets 75,929 63,919
Deferred income taxes 88,481 88,485
------------ ------------
Total current assets 259,624 486,022
------------ ------------
Property and equipment, net 3,165,156 3,218,124
Goodwill 2,188,327 2,189,767
Other intangible assets, net 1,782,129 1,820,876
Deferred income taxes 488,385 482,710
Notes receivable and other long-term assets 436,291 415,720
------------ ------------
Total $ 8,319,912 $ 8,613,219
============ ============
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities:
Accounts payable and accrued expenses $ 173,587 $ 187,634
Accrued interest 53,079 41,319
Current portion of long-term obligations 1,643 253,907
Unearned revenue 78,009 86,769
------------ ------------
Total current liabilities 306,318 569,629
------------ ------------
Long-term obligations 3,570,293 3,289,109
Other long-term liabilities 446,281 365,974
------------ ------------
Total liabilities 4,322,892 4,224,712
------------ ------------
Minority interest in subsidiaries 3,502 3,591
------------ ------------
STOCKHOLDERS' EQUITY
Class A Common Stock 4,457 4,378
Additional paid-in capital 7,627,891 7,502,472
Accumulated deficit (2,737,461) (2,733,920)
Accumulated other comprehensive income 7,855 16,079
Treasury stock (909,224) (404,093)
------------ ------------
Total stockholders' equity 3,993,518 4,384,916
------------ ------------
Total $ 8,319,912 $ 8,613,219
============ ============
UNAUDITED CONDENSED
CONSOLIDATED STATEMENTS OF OPERATIONS Three Months Ended
(In thousands, except per share data) March 31,
-------------------
2007 2006
--------- ---------
REVENUES:
Rental and management $346,029 $316,259
Network development services 6,445 4,150
--------- ---------
Total operating revenues 352,474 320,409
--------- ---------
OPERATING EXPENSES:
Costs of operations (exclusive of items shown
separately below)
Rental and management 83,761 79,541
Network development services 3,522 2,071
Depreciation, amortization and accretion 130,194 133,261
Selling, general, administrative and
development expense (1) 48,643 36,313
Impairments, net loss on sale of long-lived
assets, restructuring and merger related
expense 244 1,514
--------- ---------
Total operating expenses 266,364 252,700
--------- ---------
INCOME FROM OPERATIONS 86,110 67,709
--------- ---------
OTHER INCOME (EXPENSE):
Interest income, TV Azteca, net 3,498 3,498
Interest income 3,617 1,358
Interest expense (53,274) (54,257)
Loss on retirement of long-term obligations (4,152) (21,577)
Other income 2,998 3,729
--------- ---------
Total other expense (47,313) (67,249)
--------- ---------
INCOME BEFORE INCOME TAXES, MINORITY INTEREST AND
INCOME ON EQUITY METHOD INVESTMENTS 38,797 460
--------- ---------
Income tax provision (17,631) (1,826)
Minority interest in net earnings of
subsidiaries (88) (257)
Income on equity method investments 2 4
--------- ---------
INCOME (LOSS) FROM CONTINUING OPERATIONS 21,080 (1,619)
INCOME (LOSS) FROM DISCONTINUED OPERATIONS, NET 1,148 (318)
--------- ---------
NET INCOME (LOSS) $ 22,228 $ (1,937)
========= =========
BASIC AND DILUTED NET INCOME (LOSS) PER COMMON
SHARE AMOUNTS
Income (loss) from continuing operations $ 0.05 $ (0.01)
Income (loss) from discontinued operations - -
--------- ---------
BASIC AND DILUTED NET INCOME (LOSS) PER COMMON
SHARE $ 0.05 $ (0.01)
========= =========
WEIGHTED AVERAGE COMMON SHARES OUTSTANDING
BASIC 421,627 417,379
========= =========
DILUTED 439,557 417,379
========= =========
(1) Selling, general, administrative and development expense includes
$16,667 and $9,511 of stock-based compensation expense for the three
months ended March 31, 2007 and March 31, 2006, respectively.
UNAUDITED CONDENSED
CONSOLIDATED STATEMENTS OF CASH FLOWS Three Months Ended
(In thousands) March 31,
---------------------
2007 2006
---------- ----------
CASH FLOWS PROVIDED BY OPERATING ACTIVITIES:
Net income (loss) $ 22,228 $ (1,937)
Non-cash items reflected in statements of
operations 152,344 158,617
Non-cash stock compensation expense 16,667 9,511
Increase in assets (30,765) (30,762)
Increase in liabilities 10,913 16,267
---------- ----------
Cash provided by operating activities 171,387 151,696
---------- ----------
CASH FLOWS USED FOR INVESTING ACTIVITIES:
Payments for purchase of property and
equipment and construction activities (31,445) (28,376)
Payments for acquisitions (10,061) (724)
Proceeds from sale of businesses, investments
and other long-term assets 9,095 1,636
Deposits and other long-term assets 65 (50)
---------- ----------
Cash used for investing activities (32,346) (27,514)
---------- ----------
CASH FLOWS USED FOR FINANCING ACTIVITIES:
Borrowings under credit facilities 310,000 179,000
Repayment of notes payable, credit facilities
and capital leases (225,849) (182,024)
Purchases of Class A common stock (499,013) (162,680)
Proceeds from stock options, warrant and
stock purchase plans 46,845 16,179
Deferred financing costs and other financing
activities (5,137) (1,785)
---------- ----------
Cash used for financing activities (373,154) (151,310)
---------- ----------
NET DECREASE IN CASH AND CASH EQUIVALENTS (234,113) (27,128)
CASH AND CASH EQUIVALENTS, BEGINNING OF YEAR 281,264 112,701
---------- ----------
CASH AND CASH EQUIVALENTS, END OF PERIOD $ 47,151 $ 85,573
========== ==========
CASH PAID FOR INCOME TAXES $ 4,547 $ 7,333
========== ==========
CASH PAID FOR INTEREST $ 39,793 $ 34,971
========== ==========
UNAUDITED SELECTED FINANCIAL INFORMATION
($ in thousands, except where noted)
SELECTED INCOME STATEMENT DETAIL:
Three Months Ended
March 31, 2007
------------------
Selling, general, administrative and development
expense breakout:
Rental and Management segment overhead $ 16,147
Services segment overhead 1,062
Corporate expenses (1) 14,767
Stock-based compensation expense 16,667
------------------
Total selling, general, administrative and
development expense $ 48,643
==================
(1) Includes $2,790 of additional costs related to the review of the
Company's stock option granting practices, related legal and
governmental proceedings and other related costs for the three months
ended March 31, 2007.
Three Months Ended
Interest expense detail: March 31, 2007
-------------------
Credit Facilities $ 28,540
7.250% Senior Subordinated Notes, due 2011 5,892
7.500% Senior Notes, due 2012 4,219
7.125% Senior Notes, due 2012 8,583
5.000% Convertible Notes, due 2010 2,083
3.250% Convertible Notes, due 2010 562
3.000% Convertible Notes, due 2012 2,610
Other interest expense, including amortization of
deferred financing fees 785
-------------------
Total Interest Expense $ 53,274
===================
SELECTED BALANCE SHEET DETAIL:
Long-term obligations summary, including current
portion March 31, 2007
---------------
Credit Facilities (1) $2,005,000
7.250% Senior Subordinated Notes, due 2011 (2) 325,075
7.500% Senior Notes, due 2012 225,000
7.125% Senior Notes, due 2012 503,183
5.000% Convertible Notes, due 2010 59,683
3.250% Convertible Notes, due 2010 (3) 49,833
3.000% Convertible Notes, due 2012 344,521
Other debt, including capital leases 59,641
---------------
Total debt $3,571,936
Cash and cash equivalents 47,151
---------------
Net debt (Total debt less cash and cash
equivalents) $3,524,785
===============
(1) Includes $1,280,000 related to the American Tower credit facility
and $725,000 related to the SpectraSite credit facility.
(2) As previously announced, the Company expects to complete its
tender offer for the repurchase of up to $325,075 principal amount of
7.25% Senior Subordinated Notes of American Towers, Inc. on May 18,
2007.
(3) During the quarter ended March 31, 2007, holders of approximately
$58,036 principal amount of the Company's 3.25% Convertible Notes due
2010 converted their notes into 4.7 million shares of the Company's
Class A common stock. Subsequent to March 31, 2007 holders of
approximately $7,500 principal amount of the Company's 3.25%
Convertible Notes due 2010 converted their notes into 0.6 million
shares of the Company's Class A common stock. In connection with the
conversions, the Company paid the noteholders approximately $2,901
calculated based on accrued and unpaid interest and the discounted
value of future interest payments on the notes.
UNAUDITED SELECTED FINANCIAL INFORMATION, Continued
($ in thousands, except where noted)
SHARE COUNT ROLLFORWARD (in millions):
Total shares outstanding, as of December 31, 2006 424.7
Shares repurchased (12.6)
Shares issued - convertible note inducements and warrant
exercises 4.8
Shares issued - employee stock option exercises 2.9
---------
Total shares outstanding, as of March 31, 2007 419.7
=========
SELECTED CASH FLOW DETAIL:
Three Months Ended
March 31, 2007
------------------
Payments for purchase of property and equipment and
construction activities:
Discretionary - new tower build and in-building
installation $ 6,736
Discretionary - land purchases 9,874
Improvements/Augmentation 13,398
Corporate 1,437
------------------
Total $ 31,445
==================
SELECTED PORTFOLIO DETAIL - OWNED SITES:
In-
Three Months Ended March 31, 2007 Wireless Broadcast building Total
-------- --------- --------- -------
Beginning Balance, January 1,
2007 21,862 407 136 22,405
New Construction 22 - 4 26
Acquisitions 26 - - 26
Reductions (20) - (1) (21)
-------- --------- --------- -------
Ending Balance, March 31, 2007 21,890 407 139 22,436
======== ========= ========= =======
UNAUDITED RECONCILIATIONS TO GAAP MEASURES AND THE CALCULATION OF
DEFINED FINANCIAL MEASURES
($ in thousands, except where noted)
The reconciliation of net income (loss) to Adjusted EBITDA and the
calculation of Rental and Management Segment Operating Profit, Rental
and Management Segment Gross Margin, Services Segment Operating
Profit and Services Segment Gross Margin are as follows:
Three Months Ended
March 31,
---------------------
2007 2006
---------- ----------
Net income (loss) $ 22,228 $ (1,937)
(Income) loss from discontinued operations, net (1,148) 318
---------- ----------
Income (loss) from continuing operations 21,080 (1,619)
---------- ----------
Interest expense 53,274 54,257
Interest income (3,617) (1,358)
Income tax provision 17,631 1,826
Depreciation, amortization and accretion 130,194 133,261
Impairments, net loss on sale of long-lived
assets, restructuring and merger related
expense 244 1,514
Loss on retirement of long-term obligations 4,152 21,577
Minority interest in net earnings of
subsidiaries 88 257
Income on equity method investments (2) (4)
Stock-based compensation expense 16,667 9,511
Other income (2,998) (3,729)
---------- ----------
Adjusted EBITDA $ 236,713 $ 215,493
========== ==========
Corporate expenses, excluding stock-based
compensation expense 14,767 10,003
Services segment overhead 1,062 1,053
Services segment operating expenses 3,522 2,071
Services segment revenue (6,445) (4,150)
---------- ----------
Rental and Management Segment Operating Profit $ 249,619 $ 224,470
========== ==========
Rental and Management segment overhead 16,147 15,746
---------- ----------
Rental and Management Segment Gross Margin $ 265,766 $ 240,216
========== ==========
Adjusted EBITDA (from above) $ 236,713 $ 215,493
Corporate expenses, excluding stock-based
compensation expense 14,767 10,003
Rental and Management segment overhead 16,147 15,746
Rental and Management segment operating expenses 83,761 79,541
Interest income, TV Azteca, net (3,498) (3,498)
Rental and Management segment revenue (346,029) (316,259)
---------- ----------
Services Segment Operating Profit $ 1,861 $ 1,026
========== ==========
Services segment overhead 1,062 1,053
---------- ----------
Services Segment Gross Margin $ 2,923 $ 2,079
========== ==========
UNAUDITED RECONCILIATIONS TO GAAP MEASURES AND THE CALCULATION OF
DEFINED FINANCIAL MEASURES, Continued
($ in thousands, except where noted)
The calculation of Adjusted EBITDA Margin is as
follows:
Three Months Ended
March 31,
-------------------
2007 2006
--------- ---------
Adjusted EBITDA $236,713 $215,493
Divided by total operating revenues 352,474 320,409
--------- ---------
Adjusted EBITDA Margin 67% 67%
========= =========
The calculation of Free Cash Flow is as follows:
Three Months Ended
March 31,
-------------------
2007 2006
--------- ---------
Cash provided by operating activities $171,387 $151,696
Payments for purchase of property and equipment
and construction activities (31,445) (28,376)
--------- ---------
Free Cash Flow $139,942 $123,320
========= =========
The reconciliation of Income from continuing operations to Adjusted
EBITDA Outlook is as follows: ($ in millions)
Full Year 2007
--------------
Income from continuing operations $ 64 to $ 79
Interest expense 235 to 225
Depreciation, amortization and accretion 526 to 530
Stock-based compensation expense 49 to 53
Other, including impairments, net loss on sale of long-
lived assets, restructuring and merger related
expense, interest income, loss on retirement of long-
term obligations, income (loss) on equity method
investments, other income (expense), income tax
provision and minority interest in net earnings of
subsidiaries (1) 88 to 104
----- -----
Adjusted EBITDA $962 to $991
===== =====
(1) Includes $28 million loss on retirement of long-term obligations
related to the Company's repayment of the SpectraSite credit
facility, inducements of the Company's 3.25% Convertible Notes due
2010 and the previously announced tender offer for the Company's
7.25% Senior Subordinated Notes due 2011 of American Towers, Inc.
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