UBS Global Media & Communications Conference. December 2007

Transcription

1 UBS Global Media & Communications Conference December 2007

2 Forward Looking Statements Safe Harbor Statement under the Private Securities Litigation Reform Act of 1995: This presentation tti contains ti forward looking statements concerning our goals, beliefs, strategies, future operating results and underlying assumptions. Actual results may differ materially from those indicated by these forward looking statements as a result of various important factors, including those described in the last slide of this presentation and in Item 1A of our SEC Form 10 Q for the quarter ended September 30, 2007 under the caption Risk Factors and other filings we make with the SEC. We undertake no obligation to update the information contained in this presentation to reflect subsequently occurring events or circumstances. Dfiii Definitions and reconciliations to GAAP measures are provided at the end of the presentation. 2

3 Our Tower Sites 3

4 Our Market Presence 3Q07 Tower Revenue 4% + 20,000 Wireless Towers Tall Broadcast Towers In building Systems 6% 9% 79% 3Q07 Tower Operating Profit 4% 10% +700 Wireless Towers 6% +2,100 Wireless Towers +200 Broadcast Towers 79% US Wireless US Broadcast Mexico Brazil Other* *Other primarily includes revenue generated by In building systems and managed rooftops and tower sites. 4

5 Diverse Customer Mix 3Q07 Tower Revenue US Paging 2% US Broadcast 6% International 13% Other 5% AT&T 22% (1) Other US Wireless Service Providers 8% Alltel 5% T Mobile 8% Verizon 11% Sprint Nextel 20% 66% of tower revenue from Big 5 US Carriers (1) AT&T, formerly Cingular Wireless,is pro forma for its acquisition of Dobson Cellular. 5

6 Business Model Fundamentals + Stable and growing revenues + Relatively fixed cost structure = Significant operating leverage + Low maintenance capex = Consistent free cash flow generation 6

7 Significant Operating Leverage $400 Tower Segment Revenue & Expense $350 $300 $ in million ns $250 $200 $150 $100 $50 $ 1Q02 2Q02 3Q02 4Q02 1Q03 2Q03 3Q03 4Q03 1Q04 2Q04 3Q04 4Q04 1Q05 2Q05 3Q05 4Q05 1Q06 2Q06 3Q06 4Q06 1Q07 2Q07 3Q07 1Q0 0 Colu 2Q0 0 3Q0 0 Colu 4Q0 0 1Q0 0 Colu 2Q0 0 3Q0 0 Colu 4Q0 0 1Q0 0 Colu 2Q0 0 3Q0 0 Colu 4Q0 0 1Q0 0 Colu 2Q0 0 3Q0 0 Colu 4Q0 0 1Q0 0 Colu 2Q0 0 3Q0 0 Colu 4Q0 0 1Q0 0 Colu 2Q0 0 3Q0 0 Revenue Legacy AMT Revenue SSI Expense Legacy AMT Expense SSI $424 million of annualized increase in Legacy AMT tower segment revenue with no increase in tower segment expense *Expenses include Rental and Management Segment operating expenses and Rental and Management Segment Selling, General, Administrative and Development expense, excluding stock based compensation expense. 7

8 Contracted Revenue Backlog % of Tower Revenue up for Renewal 64% $8.3bn of non cancelable revenue contracts 13% 12% 1% 5% 5% (1) Significant backlog of long term non cancelable revenue contracts (1) Includes month to month contracts and any final termination dates remaining in 2007 as of September 30,

9 AdjustedEBITDA and Free Cash Flow Growth Adjusted EBITDA ($ in millions) Free Cash Flow ($ in millions) $1,200 $1,070 $675 $620 $1,000 $525 $800 $600 $375 $400 $200 $0 $ E 2008E $225 $75 ($75) ($75) E 2008E Consistent Adjusted EBITDA and Free Cash Flow growth *2007E and 2008E Adjusted EBITDA and Free Cash Flow reflect the midpoint of our outlook, as derived from our Form 8 K filed on November 7,

10 High Quality Assets Our Tower Portfolio Sources High percentage of sites were built Other Carriers, for co location Including Built by International American Approximately 91% of US sites are 5% 15% Tower in the top 100 BTAs or core 30% markets (1) AT&T Microwave Alltel 8% Verizon 8% AT&T 11% Sprint Nextel 12% Acquired from Other Tower Companies 11% Only 5% of tower sites have a ground lease which includes a revenue share Attractive tower locations + High capacity towers built for co location (1) Core markets include areas surrounding city centers and high traffic highways. 10

11 The Benefits of Scale 3Q07 Adjusted EBITDA Margin 68% 56% 48% AMT CCI SBAC Focus on high margin tower business + Significant scale = Industry leading Adjusted EBITDA Margin 11

12 Industry Leading Operating Performance 3Q07 Annualized Operating Performance per Owned Tower ($in thousands) $63.6 $54.8 $49.3 $36.5 $44.1 $33.3 $25.2 $6.9 Tower Revenue Tower Gross Margin Adjusted EBITDA Free Cash Flow AMT Tower Industry Peer Average (1) High quality assets + Operational execution = Industry leading operating performance (1) Tower industry peers include Crown Castle and SBA Communications. 12

13 Disciplined Investments Return on Invested Capital 9.7% 8.6% 7.7% 7.9% 65% 6.5% 65% 6.5% 5.0% 2.2% Q05 4Q06 3Q07 3Q07 Peer (1) Avg Industryleading operational performance + Disciplined investments = Higher returns on invested capital Return on Invested Capital is defined as Adjusted EBITDA less improvement and corporate capex divided by gross property and equipment, goodwill and intangibles. (1) Peer average includes Crown Castle and SBA Communications. 13

14 Financial Flexibility Net Leverage Ratio 11.5x 8.3x 7.1x 7.8x 9.3x 4.5x 37x 3.7x 4.0x Q05 4Q06 AMT CCI SBAC 3Q07 Operational growth + Disciplined investments + Proactive refinancing = Significant financial flexibility 14

15 Capital Structure vs. Peers Long term Debt Composition (1) ($in billions) $6.3 Weighted Average Remaining Term of Debt (1) (in years) 6.3 Total Share Repurchases from 1Q06 to 3Q07 (2) ($in billions) $1.7 $ $1.1 $1.9 $0.1 AMT PF CCI SBAC AMT PF CCI SBAC Securitization Bank Debt Senior Notes Convertible Notes Preferred Stock AMT CCI SBAC Focused onextending maturities anddiversifyingdiversifying debtinstruments to maintain financial flexibility (1) As of September 30, AMT pro forma reflects the issuance of 7.0% Senior notes due 2017 and 3.25% convertible note inducement, as discussed in our Form 8 K filed on November 7, (2) American Tower reflects total share repurchases from January 1, 2006 through October 25,

16 Capital Deployment Strategy Cash from operations + Borrowings = Available Capital Invest in core business $127 mm YTD 2007 (1) Return excess capital to shareholders $1,377 mm YTD 2007 (2) Focused on investing Free Cash Flow in tower construction and acquisitions and returning excess capital to shareholders (1) Includes year to date acquisitions and payments for purchase of property and equipment and construction activities as of September 30, (2) Includes year to date share repurchases pursuant to stock buyback program as of October 25,

17 Wireless Market Fundamentals & Potential Opportunities

18 US Wireless Fundamentals Subscriber and Cell Site Growth Minutes of Use Migration 3,000 (in billions) 2,500 2,000 1,500 1, Subscribers (millions) Cell Sites (thousands) Wireless Wireline Subscriber growth + Increased usage = Continued demand for cell sites Source: CTIA Wireless Survey, June 2007 and Wall Street research. 18

19 US Wireless Fundamentals 25% Data as a % of ARPU 40% 2007E Data Revenue by Source 20% 35% 30% 15% 25% 10% 20% 15% 5% 10% 5% 0% 0% Text Messaging Internet Access Blackberry Laptop Data Cards Mobile Video Music Gaming Datarevenuegrowth+ Increaseddemandfor demand higherbandwidth applications = Continued demand for cell sites Source: Wall Street research. 2007E Data Revenue by Source provided by Goldman Sachs Research. 19

20 US Wireless Fundamentals $ in billio ons Big 4 Carriers: Service Revenue Growth $ in billio ons 30 Big 4 Carriers: Wireless Capital Spending % 35% 30% 25% 20% 15% 10% 5% 0 0 0% Wireless Capex Capex As % of Service Revenue Consistent levels of capital spending + Service revenue growth = Available funding for future cell site deployments Source: Wall Street research. 20

21 US Wireless Spectrum Auctions Spectrum Use Implication for Tower Companies Auction Participants Geographic & New Market Expansion Data Network Deployment & Augmentation New National, Semi National or Public Service Network Revenue from New Leases Revenue from Amendments Incumbent Providers New Entrants AWS 66 Auction mhz Auction = Additional tower leasing demand 21

22 Global Investment Opportunities Wireless Market Penetration 160% 140% Mature 120% 100% Established 80% 60% Emerging 40% 20% 0% India Bangladesh Indon Nigeria Pakis Philipp Egypt esia China B Me Peru stan ines razil xico Morocco Canada Colombia Thail Tur land rkey Malaysia Port South Af ugal US Japan France frica Chile Ukraine Korea Argentina Austr Pol ralia land Hungary Taiwan Germany Singapore Russia Irel land Denmark Finl land UK Spain Czech Republic Is srael Hong Kong Greece Italy Focusedonidentifying on compelling tower assetinvestment opportunities Source: Wall Street research 22

23 International Investment Criteria Return criteria based on: Stage of wireless industry maturity Political stability Economic fundamentals Size and type of potential ti linvestment t Future potential investment opportunities Committed to pursuing international expansion opportunities at appropriate risk adjusted returns to complement current portfolio 23

24 Investment Considerations Marketleader with diverse tower portfolio Industry leading, consistent operating performance Stable and growing free cash flow Significant capacity to invest in growth opportunities Deep & experienced management team 24

25 Thank You Definitions and Reconciliations to GAAP measures follow this slide.

26 Definitions Reconciliations to GAAP measures follow this slide Adjusted EBITDA: Operating income (loss) from continuing operations before depreciation, amortization and accretion; impairments, net loss on sale of long lived assets, restructuring and merger related expense; and non cash stock based compensation expense; plus interest income, TV Azteca, net. Adjusted EBITDA Margin: Percentage of Adjusted EBITDA over total revenues. FreeCash Flow: Cashprovided by operating activities less payments for purchase of property and equipment and construction activities. Net Debt: Total long term obligations, including current portion, less cash and cash equivalents. Net Leverage: Net Debt divided by last twelve months (LTM) Adjusted EBITDA. Return on Assets: Annualized Adjusted EBITDA less Improvement CAPEX divided by historical gross PPE, goodwill and intangible assets. Segment Gross Margin: Segment revenue less segment operating expenses excluding: depreciation, amortization and accretion; selling, general, administrative and development expense; and impairments, net loss on sale of long lived assets, restructuring and merger related expense. Rental and management segment gross margin includes interest income, TV Azteca, net. Segment Operating Profit: Segment gross margin less selling, general, administrative and development expense attributable to the segment and excludes stock based compensation and corporate expenses. Rental and management segment operating profit includes interest income, TV Azteca, net. 26

27 Reconciliations to GAAP Measures ($ in millions) Adjusted EBITDA and Adjusted EBITDA Margin The reconciliation of net (loss) income to Adjusted EBITDA and Adjusted EBITDA Margin is as follows: E 2008E 4Q05 4Q06 3Q07 Net (loss) income $ (487.2) $ (1,160.1) 160 1) $ (329.0) $ (255.5) 5) $ (181.4) $ 27.5 NA NA $ (90.7) $ 18.3 $ 59.6 Cumulative effect of change in accounting principle, net NA NA 35.5 Loss (income) from discontinued operations, net NA NA (0.0) 0.5 (Loss) Income from continuing operations $ (426.3) $ (341.6) $ (267.3) $ (247.1) $ (143.9) $ 28.3 $ $ $ (55.2) $ 18.2 $ 60.1 Interest expense $ $ $ $ $ $ $ $ $ 57.0 $ 53.2 $ 59.9 Interest income (28.4) (3.5) (5.3) (4.8) (4.4) (9.0) NA NA (1.5) (4.0) (2.3) Income tax (benefit) provision (119.9) (92.6) (85.6) (83.3) NA NA (14.5) Depreciation, amortization and accretion Impairments, net loss (gain) on sale of long lived assets, restructuring and merger related expense NA NA (0.2) Loss on retirement of long term obligations NA NA Minority interest in net earnings of subsidiaries NA NA Loss (Income) on equity method investments (0.0) NA NA (0.0) (0.0) Stock based compensation expense Other expenses (income) (0.2) (6.6) 6) (5.6) (1.3) Adjusted EBITDA $ $ $ $ $ $ $ $ 1,070.0 $ $ $ Divided by Total Operating Revenues Adjusted EBITDA margin 68% Historical Free Cash Flow The calculation of historical Free Cash Flow is as follows: E 2008E Cash provided by operating activities $ $ $ $ $ $ $ Payments for purchase of property and equipment and construction activities (180.5) (61.6) (42.2) (88.6) (127.1) (147.5) (170.0) Free Cash Flow $ (75.4) $ 94.8 $ $ $ $ $ *2007E and 2008E Adjusted EBITDA and Free Cash Flow reflect the midpoint of our outlook, as derived from our Form 8 K filed on November 7,

28 Reconciliations to GAAP Measures, cont. ($ in millions) Net Leverage Ratio The calculation of Net Leverage Ratio is as follows: Q05 4Q06 3Q07 Adjusted EBITDA (1) $ $ $ $ $ $ Long term obligations, including current portion 3, , , , , ,026.1 Cash and cash equivalents (2) NtDbt Net Debt $ 3, $ 3,084.2 $ 3,078.1 $ 3,500.7 $ 3,261.8 $ 3, Divided by Adjusted EBITDA (1) Net Leverage Ratio 11.5x 8.3x 7.1x 4.5x 3.7x 4.0x Return on Invested Capital The calculation of Return on Invested Capital is as follows: Q05 4Q06 3Q07 Adjusted EBITDA (1) $ 205 $ 289 $ 374 $ 436 $ 781 $ 874 $ 995 Less improvement and corporate capital expenditures (71) (24) (25) (26) (27) (43) (44) Numerator $ 134 $ 265 $ 349 $ 411 $ 754 $ 831 $ 951 Historical Gross Property and Equipment 3,698 3,284 3,285 3,270 4,740 4,795 4,938 Historical Goodwill ,100 2,200 2,181 Historical Gross Intangibles 1,621 1,460 1,454 1,503 2,724 2,640 2,659 Denominator $ 6,159 $ 5,347 $ 5,332 $ 5,366 $ 9,563 $ 9,635 $ 9,778 Return on Investment t 22% 2.2% 50% 5.0% 65% 6.5% 77% 7.7% 79% 7.9% 86% 8.6% 97% 9.7% (1) 4Q05, 4Q06 & 3Q07 Adjusted EBITDA has been annualized by mulitplying the respective measure by 4. (2) 2003 cash and cash equivalents includes $170.0 million of cash required to be held in escrow. *2007E and 2008E Adjusted EBITDA and Free Cash Flow reflect the midpoint of our outlook, as derived from our Form 8 K filed on November 7,

29 This presentation 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. Examples of these statements include, but are not limited to, statements regarding our full year 2007 and 2008 outlook, our stock repurchase programs and our expectations regarding future financing transactions. 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; d (2) if our wireless service provider customers consolidate or merger 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 Revolving Credit Facility, the indentures governing our debt securities, and the loan agreement related to our Securitization could adversely affect our business by limiting flexibility; (5) we could suffer adverse tax and other financial consequences if taxing authorities do not agree with our tax positions, including with respect to our utilization of net operating losses; (6) due to the long term expectations of revenue from tenant leases, the tower industry is sensitive to the creditworthiness of it tenants; (7) our foreign operations are subject to economic, political and other risks that could adversely affect our revenues or financial position; (8) a substantial portion of our revenue is derived from a small number of customers; (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 ldisasters and other unforeseen damage for which h 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; and (18) pending civil litigation relating to our stock option granting practices exposes us to risks and uncertainties. For other important factors that may cause actual results to differmaterially from those indicated in our forward looking statements, we refer you to the information contained in Item 1A of our Form 10 Q for the quarter ended September 30, 2007 under the caption "Risk Factors." We undertake no obligation to update the information contained in this presentation to reflect subsequently occurring events or circumstances. 29