Filed by American Tower Corporation
pursuant to Rule 425
under the Securities Act of 1933
and deemed filed pursuant to
Rule 14a-12 under the Securities Exchange Act of 1934
Subject Company: SpectraSite, Inc.
(Commission File No.: 001-31769)
This filing relates to a planned business combination between American Tower Corporation (“American Tower”) and SpectraSite, Inc. (“SpectraSite”) pursuant to the terms of an Agreement and Plan of Merger, dated as of May 3, 2005 (the “Merger Agreement”), by and among American Tower, SpectraSite and Asteroid Merger Sub, LLC. The Merger Agreement will be filed with the Securities and Exchange Commission as an exhibit to the Report on Form 8-K to be filed by American Tower.
On May 4, 2005, members of American Tower’s and SpectraSite’s management made the following presentation in connection with the May 4, 2005 conference call to discuss the merger. The presentation was made publicly available via the American Tower website, and an archived copy of the presentation has been posted and is accessible on the American Tower website.
America’s Leading Tower Company
May 4, 2005
Statements herein regarding the proposed transaction between American Tower and SpectraSite, the expected timetable for completing the transaction, future financial and operating results, benefits and synergies of the transaction, future opportunities for the combined company and any other statements about American Tower and SpectraSite management’s future expectations, beliefs, goals, plans or prospects constitute forward looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Such statements are based upon the current beliefs and expectations of American Tower’s and SpectraSite’s management and are subject to significant risks and uncertainties. Actual results may differ from those set forth in the forward-looking statements. Any statements that are not statements of historical fact (including statements containing the words “believes,” “plans,” “anticipates,” “expects,” estimates and similar expressions) should also be considered to be forward looking statements. There are a number of important factors that could cause actual results or events to differ materially from those indicated by such forward looking statements, including: the ability to obtain governmental approvals of the transaction on the proposed terms and schedule; the failure of American Tower and SpectraSite shareholders to approve the transaction; the ability of American Tower to successfully integrate SpectraSite’s operations and employees; the risk that the cost savings and any other synergies from the transaction may not be fully realized or may take longer to realize than expected; disruption from the transaction making it more difficult to maintain relationships with customers and employees; competition and its effect on pricing, spending, third-party relationships and revenues. Additional factors that may affect future results are contained in American Tower’s and SpectraSite’s filings with the Securities and Exchange Commission (“SEC”), including each company’s Annual Report on Form 10-K for the year ended December 31, 2004, which are available at the SEC’s website http://www.sec.gov. The information set forth herein speaks only as of the date hereof, and American Tower and SpectraSite disclaim any intention or obligation to update any forward looking statements as a result of developments occurring after the date hereof. Definitions to GAAP measures are provided at the end of this presentation.
Cautionary Language Concerning Forward-Looking Statements
Important Additional Information Will be Filed with the SEC
In connection with the proposed transaction, American Tower plans to file with the SEC a Registration Statement on Form S-4 containing a Joint Proxy Statement/Prospectus. INVESTORS AND SECURITY HOLDERS OF AMERICAN TOWER AND SPECTRASITE ARE URGED TO READ THE REGISTRATION STATEMENT AND ANY OTHER RELEVANT DOCUMENTS FILED WITH THE SEC, INCLUDING THE JOINT PROXY STATEMENT/PROSPECTUS THAT WILL BE PART OF THE REGISTRATION STATEMENT WHEN THEY ARE AVAILABLE, BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION ABOUT AMERICAN TOWER, SPECTRASITE, THE PROPOSED TRANSACTION AND RELATED MATTERS. The final Joint Proxy Statement/Prospectus will be mailed to shareholders of American Tower and SpectraSite. Investors and security holders of American Tower and SpectraSite will be able to obtain copies of the Registration Statement and the Joint Proxy Statement/Prospectus, when they become available, as well as other filings with the SEC that will be incorporated by reference into such documents, containing information about American Tower and SpectraSite, without charge, at the SEC’s website http://www.sec.gov. These documents may also be obtained for free from American Tower by directing a request to American Tower Corporation, Investor Relations, 116 Huntington Ave, Boston, MA 02116 or for free from SpectraSite by directing a request to SpectraSite at SpectraSite, Inc., 400 Regency Forest Drive, Cary, NC 27511, Attention: Secretary.
Participants in Solicitation
American Tower, SpectraSite and their respective directors and executive officers and other members of management and employees may be deemed to be participants in the solicitation of proxies from American Tower and SpectraSite shareholders in respect of the proposed transaction. Information regarding American Tower’s participants is available in American Tower’s Annual Report on Form 10-K for the year ended December 31, 2004, and the proxy statement, dated April 27, 2005, for its 2005 annual meeting of stockholders, which are filed with the SEC. Information regarding SpectraSite’s participants is available in SpectraSite’s Annual Report on Form 10-K for the year ended December 31, 2004 and the proxy statement, dated March 31, 2005, for its 2005 annual meeting of shareholders, which are filed with the SEC. Additional information regarding the interests of such participants will be included in the Registration Statement containing the Joint Proxy Statement/Prospectus to be filed with the SEC.
Transaction Overview
Jim Taiclet, CEO
American Tower Corporation
North America’s Premier Tower Company
Maintain / enhance position of industry scale
US Tower base increases from 12K to 20K
Increases share of typical ‘Big 6’ carrier network from 10% to approximately 20%
Greater flexibility to structure win-win contracts with carriers, further enhancing market share
Addition of in-building / distributed antenna systems
Maximize return on investment through operational performance
Significantly larger revenue base to spread fixed SG&A costs in addition to $30 -$35 mm of cost synergies
Proportionally more sites in top 100 major markets
Identify and apply best practices from both companies
Draw the best talent from both companies
Provide compelling total return to shareholders
Lower SSI financial leverage provides incremental financial flexibility
Accelerates ability to return cash to shareholders
Greater size increases diversification and may ultimately lower costs of capital
Greater capitalization broadens shareholder base
1
Transaction Summary
Transaction: Stock-for-stock merger
Exchange Ratio: 3.575 shares of AMT per SSI share
Ownership: Approximately 59% AMT / 41% SSI
Timeline: Second half 2005 closing expected
Board: 6 AMT board members
4 SSI board members (including Stephen Clark and Tim Biltz)
Chairman & CEO: Jim Taiclet
Other Executives: Brad Singer, Steven Moskowitz, Michael Gearon, Hal Hess
2
Transaction Pricing
AMT and SSI are priced at comparable multiples
NPV of synergies (approximately $400 million) exceeds the premium (approximately $300 million)
Parameter ($ in millions, except per share data) AMT SSI
Price / Share (5/3/05) $17.21 $56.20
Price / Share @ 3.575x 61.53
Equity Value ($ bn) $4.6 $3.1
Firm Value ($ bn) 7.5 3.8
2005 Free Cash Flow $209 $136 (a)
2005 Discretionary Free Cash Flow 247 176 (a)
Equity Value / 2005 Free Cash Flow 21.2x (b) 22.9x
Equity Value / Discretionary 2005 Free Cash Flow 18.0 (b) 17.7
(a) Includes $35 million in cost synergies.
(b) AMT includes add back of cash interest of $6.825 mm from in-the-money 3.25% convert notes due August 1, 2010, which have a conversion price of approximately $12.22 per share.
3
SpectraSite History and Transaction Rationale
Stephen Clark, President & CEO
SpectraSite, Inc.
SpectraSite History
1997 1997
SpectraSite was founded with focus on tower ownership in large metropolitan markets
Highest growth potential
1997 1997 2004
Acquired ~5,300 towers from Nextel and SBC
Primarily located in top 100 markets
2,500 towers built by SpectraSite or acquired from other carriers
Today
Leading position in top 25, 50 and 100 BTAs
Industry leading revenue and EBITDA growth over last 3 years Expansion into in-building antenna systems with exclusive rights to >300 properties (shopping malls, casinos, etc.)
Over 80 installed units with plans to build 100+/year
Represents attractive revenue opportunity
4
Transaction Rationale
SSI 2004 Strategic Review
Extensive review of alternatives to maximize value for shareholders:
Reinvest in existing core tower business Develop new ancillary business opportunities Return capital to shareholders Strategic combination
Strategic Combination with AMT
Combined footprint attractive to existing customers and next generation network builds Significant opportunity to reduce costs through synergies Manageable integration risks In-building / DAS opportunity Enhanced opportunity to return capital to shareholders over the long term Premium for SSI shareholders
5
Strategic and Operational Benefits
Jim Taiclet, CEO
American Tower Corporation
Key Industry Themes Support Transaction
Increasing wireless traffic driven by increased subscribers, more minutes of use and greater data usage Carriers are seeking to improve coverage as a competitive response to improve customer satisfaction 3G / wireless broadband deployment gaining momentum Potential impact of carrier consolidation mitigated by need for network quality improvements and GSM/CDMA/iDEN technology incompatibility
Expect multi-year network integration process
The combined tower portfolio better positions American Tower to meet its customers’growing needs growing needs
6
Broad and Compelling US Wireless Footprint
Combined US Tower Portfolio
Portfolio Highlights:
SSI Sites AMT Sites
Over 20,000 US tower sites
Over 85% of wireless towers are in the Top 100 BTA’s and Core market areas:
Other 13%
Core Markets 23%
51-100 BTA 17%
1-50 BTA
47%
7
Significant Presence in Top US Markets
Over 85% of AMT Pro Forma U.S. Sites are in Top 100 BTA’s or Core Markets Over
Number of U.S. Towers
25,000 20,000 15,000 10,000 5,000 0
AMT Pro Forma (1) AMT Standalone (1) GSL (2) CCI SSI Standalone
BTA 1-50 BTA 51-100 Core Markets Other
(1) AMT Standalone and AMT Pro Forma exclude approximately 2,400 towers in Brazil and Mexico. (2) Pro forma for pending transactions.
8
More Important to Our Customers
Company
Total Cell Sites Tenancies AMT Pro Forma % of Network
20,000 5,800 29%
25,000 2,500 10%
45,000 8,300 18%
44,000 9,300 21%
22,000 4,800 22%
24,000 3,700 15%
8,000 2,400 30%
143,000 28,500 20%
Big 6 Total
Source: Company reports and Wall Street research.
9
Customer and Revenue Diversification
American Tower
SpectraSite
Combined
Regional Voice & Data
8% Broadcast 7% Paging 5%
Big 6 & Affiliates 58%
Int’l 17%
Other 5%
Regional Voice & Data
7% Broadcast
6% Paging 1%
Other 1% Big 6 & Affiliates 85%
Regional Voice & Data
7% Broadcast 7% Paging 4%
Big 6 & Int’l Affiliates 11% 67%
Other 4%
Maintains well balanced, diversified portfolio while improving US presence
10
Putting It All Together…
Scale
Largest portfolio of tower assets in the industry Increases percentage of U.S. towers in Top 100 BTAs and core markets over 85% Leading broadcast tower footprint Leading in-building footprint
Largest tower portfolio in key locations
Coverage and Reach
Improves positioning in high—growth wireless market Increases share of typical ‘Big 6’ carrier network from 10% to approximately 20%
Greater ability to meet carrier needs
Shareholder Value
Largest base of tower assets in the most attractive markets Substantial operating efficiencies Enhances financial strength and flexibility Enhanced capital markets presence Strong management
Creates value for all shareholders shareholders
11
Expected Cost Synergies
Corporate Expense
Administrative Professional Services
U.S. Tower Overhead
Field Offices / Operations Lease and Property Administration
Target Cost Synergies ( Target Cost Synergies ($ MM) $19 – $21 $11 – $14 $30 – $35
12
Financial Overview
Brad Singer, CFO
American Tower Corporation
Financial Summary
Improves Adjusted EBITDA and Free Cash Flow growth Builds scale with more than 22,000 towers and $1 billion of revenue Capital Structure
Strengthens AMT balance sheet Increases financial flexibility
Diversity and scale should reduce ongoing cost of capital
Creates leading wireless equity security
13
2004 Financial Summary
($ in millions, except number of towers)
U.S. Towers 12,457 7,739 20,196
International Towers 2,321 0 2,321
In-Building 0 82 82
Total # of Towers / In-Building 14,778 7,821 22,599
Total Revenue $707 $355 $1,062
Adjusted EBITDA 437 178 615
Over $1 billion in Revenue and 600 million in Adjusted EBITDA
AMT Pro Forma
14
Combined 2005 Guidance and Synergies
($ in millions)
Total Revenue $753 $377 $1,130
Adjusted EBITDA 488 199 722 (b)
Interest Expense 214 48 262
Capex 65 50 115
Free Cash Flow 209 101 345 (b)
Discretionary Free Cash Flow(a) 247 141 423 (b)
Note: Amounts reflect mid-point of outlook provided by management.
(a) Based on $27 million and $10 million of required capital expenditures for AMT and SSI, respectively. (b) Includes $35 million of cost synergies.
15
AMT: First Quarter Highlights
($ in millions) Actual
Parameter 1Q ‘05 Outlook 1Q ‘05 1Q ‘04
Rental and Management Revenue $178 – $180 $182 $165
Total Revenue 181 – 183 184 169
Adjusted EBITDA 116 – 119 119 103
Interest Expense 55 – 54 55 69
Capex 14 – 12 16 11
Free Cash Flow 47 – 53 48 23
AMT met or exceeded its guidance for the 1 st Quarter of 2005 (Adjusted EBITDA increased 15% year-over-year)
16
Pro Forma Corporate Structure
AMT Shareholders
59% Ownership
AMT Holdco
Debt: $1,833
41% Ownership
SSI Shareholders
SSI Holdco
Debt: $200 mm Senior Notes
SSI Opco
Debt: $550 mm Bank Facility
AMT Opco (ATI)
Debt: $1,461
Unrestricted Subsidiary
($ in millions)
AMT SSI AMT 2004 Pro Forma AMT 2005E Pro Forma (b)
Bank Debt $698 $550 $1,248 $1,248
Bonds 2,596 200 2,796 2,796
Total Debt $3,294 $750 $4,044 $4,044
Cash 216 35 251 596
Net Debt $3,078 $715 $3,793 $3,448
Net Leverage (a) 7.0x 4.0x 6.2x 4.8x
Debt Profile (At 12/31/04)
17
(a) Adjusted EBITDA includes non-cash lease expenses of $12 million and $18 million for AMT and SSI in 2004, respectively. (b) Includes $35 million of cost synergies.
Accelerated Balance Sheet Strengthening
12.0x 11.0x 10.0x 9.0x 8.0x 7.0x 6.0x 5.0x 4.0x
11.5x
8.3x
7.0x
4.8x
Target Leverage: 4.0x – 6.0x
2002 2003 2004 2005 Pro Forma
Net Leverage
18
Leading Wireless Equity Security $90 $70 $50 $30 $15 $12
($ billions) $9
$6
$3
$0 $86 $66 $28 $22 $11 $8 $8 $7 $5 $4 $3 $0 $3 $1 $3
$2 $6
$4 $4
$2 $2 $1
Pro Forma Sprint / Nextel Cons.
Pro Forma Alltel / Western Wireless
Pro Forma AMT / SSI
Nextel Partners
U.S. Cellular
Dobson
Centennial
Alamosa
Crown
GSL (1)
SBA
Equity Value Firm Value
Note: Based on stock price as of 5/3/05. Source: Company filings.
(1) Pro forma for pending transactions.
19
Wrap-Up and Q&A
Jim Taiclet, CEO
American Tower Corporation
North America’s Premier Tower Company
Maintain / enhance position of industry scale
US Tower base increases from 12K to 20K
Increases share of typical ‘Big 6’ carrier network from 10% to approximately 20%
Greater flexibility to structure win-win contracts with carriers, further enhancing market share
Addition of in-building / distributed antenna systems
Maximize return on investment through operational performance
Significantly larger revenue base to spread fixed SG&A costs in addition to $30 -$35 mm of cost synergies
Proportionally more sites in top 100 major markets
Identify and apply best practices from both companies
Draw the best talent from both companies
Provide compelling total return to shareholders
Lower SSI financial leverage provides incremental financial flexibility
Accelerates ability to return cash to shareholders
Greater size increases diversification and may ultimately lower costs of capital
Greater capitalization broadens shareholder base
20
America’s Leading Tower Company
Thank You
Definitions
Adjusted EBITDA (AMT): Income (loss) from continuing operations before depreciation, amortization and accretion and impairments, net loss on sale of long-term assets and restructuring expense, plus interest income, TV Azteca, net.
Adjusted EBITDA (SSI): Operating income before depreciation, amortization and accretion expense.
CAPEX: Payments for purchase of property and equipment and construction activities.
Free Cash Flow: Adjusted EBITDA less interest expense and payments for purchase of property and equipment and construction activities. Discretionary Free Cash Flow: Free Cash Flow plus payments for capital expenditures related to new tower builds.
Net Debt: Total long-term obligations, including current portion, less cash and cash equivalents.
Net Leverage: Net Debt divided by Adjusted EBITDA
21