FORM 11-K DATED DECEMBER 31, 2002

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

 

 

FORM 11-K

 

ANNUAL REPORT

PURSUANT TO SECTION 15(D) OF THE

SECURITIES EXCHANGE ACT OF 1934

 

(Mark One:)

x   ANNUAL REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES EXCHANGE
  ACT OF 1934 [NO FEE REQUIRED].

 

For the fiscal year ended December 31, 2002

 

OR

 

¨   TRANSITION REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES EXCHANGE
  ACT OF 1934 [NO FEE REQUIRED].

 

For the transition period from                      to                     

 

Commission file number 001-14195

 

 

 

A. Full title of the plan and the address of the plan, if different from that of the issuer named below:

 

AMERICAN TOWER RETIREMENT SAVINGS PLAN

 

B. Name of issuer of the securities held pursuant to the plan and the address of its principal executive office:

 

AMERICAN TOWER CORPORATION

116 Huntington Avenue

Boston, Massachusetts 02116

 



AMERICAN TOWER

RETIREMENT SAVINGS PLAN

 

TABLE OF CONTENTS

 


 

     Page

INDEPENDENT AUDITORS’ REPORT

   1

FINANCIAL STATEMENTS AS OF AND FOR THE YEARS ENDED DECEMBER 31, 2002 AND 2001:

    

Statements of Net Assets Available for Benefits

   2

Statements of Changes in Net Assets Available for Benefits

   3

Notes to Financial Statements

   4-7

SUPPLEMENTAL SCHEDULES AS OF AND FOR THE YEAR ENDED DECEMBER 31, 2002:

    

Form 5500, Schedule G, Part III – Schedule of Non-exempt Transactions

   8

Form 5500, Schedule H, Part IV, Line 4i – Schedule of Assets (Held at End of Year)

   9

SIGNATURE

   10

EXHIBIT INDEX

   11

 

Schedules required under the Employee Retirement Income Security Act of 1974, other than the schedules listed above, are omitted because of the absence of conditions under which such schedules are required.

 


INDEPENDENT AUDITORS’ REPORT

 

To the Plan Administrator and Participants of the

    American Tower Retirement Savings Plan

116 Huntington Avenue

Boston, Massachusetts

 

We have audited the accompanying statements of net assets available for benefits of the American Tower Retirement Savings Plan (the “Plan”) as of December 31, 2002 and 2001, and the related statements of changes in net assets available for benefits for the years then ended. These financial statements are the responsibility of the Plan’s management. Our responsibility is to express an opinion on these financial statements based on our audits.

 

We conducted our audits in accordance with auditing standards generally accepted in the United States of America. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

 

In our opinion, such financial statements present fairly, in all material respects, the net assets available for benefits of the Plan as of December 31, 2002 and 2001, and the changes in net assets available for benefits for the years then ended, in conformity with accounting principles generally accepted in the United States of America.

 

Our audits were conducted for the purpose of forming an opinion on the basic financial statements taken as a whole. The supplemental schedules listed in the Table of Contents are presented for the purpose of additional analysis and are not a required part of the basic financial statements but are supplementary information required by the Department of Labor’s Rules and Regulations for Reporting and Disclosure under the Employee Retirement Income Security Act of 1974. These schedules are the responsibility of the Plan’s management. Such supplemental schedules have been subjected to the auditing procedures applied in our audits of the basic 2002 financial statements and, in our opinion, are fairly stated in all material respects when considered in relation to the basic financial statements taken as a whole.

 

/s/ DELOITTE & TOUCHE LLP

 

Boston, Massachusetts

June 25, 2003

 

1


AMERICAN TOWER

RETIREMENT SAVINGS PLAN

 

STATEMENTS OF NET ASSETS AVAILABLE FOR BENEFITS

DECEMBER 31, 2002 AND 2001

 


 

     2002

   2001

ASSETS:

             

Investments:

             

Mutual funds

   $ 28,905,713    $ 33,142,246

Common stock

     1,076,608      1,080,602

Participant loans

     853,685      991,861
    

  

Total investments

     30,836,006      35,214,709

Contributions receivable

     254,466      464,549
    

  

NET ASSETS AVAILABLE FOR BENEFITS

   $ 31,090,472    $ 35,679,258
    

  

 

See notes to financial statements.

 

2


AMERICAN TOWER

RETIREMENT SAVINGS PLAN

 

STATEMENTS OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS

YEARS ENDED DECEMBER 31, 2002 AND 2001

 


 

     2002

    2001

 

ADDITIONS:

                

Investment activity:

                

Net depreciation in fair value of investments

   $ (6,687,337 )   $ (3,889,831 )

Dividends and interest

     572,635       596,892  
    


 


Net investment activity

     (6,114,702 )     (3,292,939 )
    


 


Contributions:

                

Participant

     9,132,800       12,751,161  

Employer

     1,753,419       2,273,608  
    


 


Total contributions

     10,886,219       15,024,769  
    


 


Total additions

     4,771,517       11,731,830  
    


 


DEDUCTIONS:

                

Benefits paid to participants

     (9,225,504 )     (2,813,567 )

Administrative expenses

     (134,799 )     (114,525 )
    


 


Total deductions

     (9,360,303 )     (2,928,092 )
    


 


NET (DECREASE) INCREASE BEFORE TRANSFER

     (4,588,786 )     8,803,738  

TRANSFER IN FROM MERGED PLAN

             6,305,416  
    


 


NET (DECREASE) INCREASE

     (4,588,786 )     15,109,154  

NET ASSETS AVAILABLE FOR BENEFITS:

                

Beginning of year

     35,679,258       20,570,104  
    


 


End of year

   $ 31,090,472     $ 35,679,258  
    


 


 

See notes to financial statements.

 

3


AMERICAN TOWER

RETIREMENT SAVINGS PLAN

 

NOTES TO FINANCIAL STATEMENTS

 


 

1.   DESCRIPTION OF THE PLAN

 

The following description of the American Tower Retirement Savings Plan (the “Plan”) provides general information only. Participants should refer to the summary plan description and the plan document for a more complete description of the Plan’s provisions.

 

General Information – The Plan is a defined contribution plan available to substantially all employees of American Tower Corporation (the “Company” or the “Plan Sponsor”) and its subsidiaries. The Company’s Benefits Committee, as Plan Administrator, controls and manages the operation and administration of the Plan. Fidelity Management Trust Company serves as the trustee of the Plan. The Plan is subject to the provisions of the Employee Retirement Income Security Act of 1974 (“ERISA”).

 

Participant Contributions – Prior to June 30, 2002, participants could contribute up to 15% of pretax annual compensation, as defined in the Plan, subject to limits set by the Internal Revenue Code (the “Code”). Effective July 1, 2002, the annual percentage maximum for employee pretax contributions was raised from 15% of eligible compensation to 25% of eligible compensation. In addition, effective January 1, 2002, participants age 50 and older may make catch-up contributions. Participants may also contribute amounts representing distributions from other qualified plans.

 

Employer Contributions – Each year, the Company may make discretionary matching contributions to be determined annually based on a percentage of an employee’s pretax contributions. Matching contributions are subject to a maximum of 5% of an employee’s eligible compensation contributed to the Plan. For 2002 and 2001, the Company’s matching contribution was 35% of the first 5% of eligible compensation contributed by a participant.

 

Participant Accounts – Each participant’s account is effected for the participant’s contributions and withdrawals, as applicable, and allocations of (a) the Company’s contributions and (b) plan earnings or losses. Allocations are based on participant contributions (Company match) or account balances (Plan earnings or losses). The benefit to which a participant is entitled is the benefit that can be provided from his or her account.

 

Vesting – Participants are immediately vested in their contributions plus actual earnings thereon. Vesting in the Company contribution portion of their accounts (plus actual earnings thereon) is based on years of credited service. Effective January 1, 2002, for participants who perform a minimum of one hour of service on or after that date, the Plan was amended to change the vesting percentage from 20% per year to 25% per year, in each case beginning after one year of service, until a participant becomes fully vested.

 

Payment of Benefits – Total or partial cash distributions from the Plan are permitted upon a participant’s attainment of age 59½, termination of employment, retirement, death or disability. In addition, withdrawals are also permitted for certain events that result in financial hardship to the participant.

 

Forfeitures – Unvested Company contributions and earnings thereon that have been forfeited can be applied against administrative expenses of the Plan and to reduce future Company contributions. At December 31, 2002 and 2001, forfeited, nonvested participant accounts totaled approximately $463,000 and $257,000, respectively. See note 4.

 

Investments – Participants direct the investment of their contributions and Company matching contributions into various investment options offered by the Plan. The Plan currently offers several mutual funds and American Tower Corporation common stock as investment options for participants.

 

 

4


1.   DESCRIPTION OF THE PLAN (CONTINUED)

 

Participant Loans – Participants may borrow from their accounts a minimum of $1,000. The maximum amount is the lesser of one-half of a participant’s vested account balance or $50,000, reduced by the highest outstanding loan balance in a participant’s account during the prior twelve-month period. Loans are fully secured by the participant’s vested interest in his or her account. Loan terms generally range from one to five years with terms extending to ten years for loans associated with the purchase of a primary residence. Participant loans bear interest at a rate commensurate with local prevailing rates at the date of the loan. The applicable interest rates for outstanding loans ranged from 4.25% to 9.50% as of December 31, 2002 and from 5.00% to 9.50% as of December 31, 2001. Principal and interest are paid ratably through payroll deductions.

 

Transfer in from Other Plan – In June 2001, the assets of the Kline Iron & Steel Company, Inc. 401(k) Profit Sharing Plan, approximating $6.3 million, were merged into the Plan. Kline Iron & Steel Company, Inc. is a wholly owned subsidiary of the Company.

 

2.   SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

 

Method of Accounting – The accompanying financial statements have been prepared on the accrual basis of accounting in accordance with accounting principles generally accepted in the United States of America.

 

Use of Estimates – The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect certain reported amounts and disclosures. Accordingly, actual results may differ from those estimates.

 

The Plan invests in American Tower Corporation common stock and mutual funds which hold securities, including U.S. government securities, corporate debt instruments and corporate stock. Investment securities, in general, are exposed to various risks related to interest rates, credit and overall market volatility. Due to the level of risk associated with certain investment securities, it is reasonably possible that changes in values of investment securities will occur in the near term and that such changes could materially affect the amounts reported in the financial statements.

 

Investment Valuation and Income Recognition – Mutual funds and common stock are stated at fair value based on quoted market prices. Participant loans are stated at cost, which approximates fair value. Purchases and sales of securities are recorded on a trade-date basis. Dividends are recorded on the ex-dividend date. Interest is recorded when earned.

 

Expenses – All expenses are paid by the Plan or the Company, as provided for in the Plan.

 

Payment of Benefits – Benefits are recorded when paid.

 

 

5


3.   INVESTMENTS

 

Investments representing five percent or more of the Plan’s net assets available for benefits as of December 31, are as follows:

 

     2002

     2001

Fidelity U.S. Bond Index Fund

   $ 4,808,238      $ 2,797,241

Fidelity Retirement Money Market Portfolio

     4,455,015        4,989,685

Fidelity Growth Company Fund

     4,249,731        6,794,270

Fidelity Growth & Income Portfolio

     4,081,109        5,013,049

Fidelity Magellan Fund

     4,073,037        5,161,061

Spartan U.S. Equity Index Fund

     2,517,920        3,586,224

Fidelity Worldwide Fund

     2,032,668        2,589,755

Fidelity Puritan Fund

     1,958,437        2,210,961

 

During the years ended December 31, 2002 and 2001, the Plan’s investments (including gains and losses on investments bought and sold, as well as held, during the year) depreciated in value as follows:

 

     2002

       2001

 

Mutual funds

   $ (6,206,055 )      $ (2,917,263 )

Common stock

     (481,282 )        (972,568 )
    


    


Total

   $ (6,687,337 )      $ (3,889,831 )
    


    


 

4.   PLAN TERMINATION AND AMENDMENTS

 

Although it has not expressed any intention to do so, the Board of Directors of the Company has the right under the Plan to suspend its contributions at any time and to terminate the Plan subject to the provisions set forth in ERISA. In the event of any termination of the Plan, or upon complete or partial discontinuance of contributions, the accounts of each affected participant shall become fully vested. A significant number of employee terminations may result in a partial plan termination. In the event that a partial plan termination has occurred, the affected terminated participants’ accounts (primarily included in the forfeiture balance) will become fully vested. See note 1.

 

The Board of Directors of the Company also has the right to amend the Plan, in whole or in part, subject to the provisions of ERISA. During 2002, the Plan was amended to (i) increase the deferral contribution limit from 15% to 25% of a participant’s eligible compensation as of July 1, 2002; (ii) add a catch-up contribution feature for participants age 50 and older, effective January 1, 2002; and (iii) change the vesting percentage from 20% per year to 25% per year (beginning after one year of service) until a participant becomes fully vested, effective for participants who perform a minimum of one hour of service on or after January 1, 2002.

 

6


5.   TAX STATUS

 

The Plan has not yet received a determination letter from the Internal Revenue Service regarding the Plan’s compliance with the applicable provisions of the Code. However, the Company believes that the Plan is currently designed and being operated in accordance with the provisions of the Code. Accordingly, no provision for income taxes has been included in the Plan’s financial statements.

 

6.   RELATED-PARTY TRANSACTIONS

 

The Plan’s investments as of December 31, 2002 and 2001 include shares of mutual funds held in trust by Fidelity Management Trust Company, the Plan’s trustee. Fees paid by the Plan to Fidelity Management Trust Company for the years ended December 31, 2002 and 2001 were $134,799 and $114,525, respectively. In addition, FMR Corp. and its various affiliates, including Fidelity Management Trust Company, owned approximately 28.1 million shares of Class A common stock of the Plan Sponsor as of December 31, 2002 (based on FMR Corp.’s Schedule 13G filed on February 13, 2003).

 

At December 31, 2002 and 2001, the Plan held 304,988 and 114,108 shares, respectively, of Class A common stock of the Plan Sponsor, with a cost basis of $1,801,279 and $1,993,280, respectively. The Plan Sponsor did not make dividend payments during the years ended December 31, 2002 and 2001.

 

7.   RECONCILIATION OF FINANCIAL STATEMENTS TO FORM 5500

 

The following is a reconciliation of net assets available for benefits in the accompanying financial statements to amounts reported in the Company’s Form 5500 at December 31, 2002 and 2001:

 

     2002

    2001

 

Net assets available for benefits per the financial statements

   $ 31,090,472     $ 35,679,258  

Contributions receivable

     (254,466 )     (464,549 )
    


 


Net assets available for benefits per the Form 5500

   $ 30,836,006     $ 35,214,709  
    


 


 

The following is a reconciliation of contributions in the accompanying financial statements to amounts reported in the Company’s Form 5500 for the years ended December 31, 2002 and 2001:

 

     2002

   2001

Contributions per the financial statements

   $ 10,886,219    $ 15,024,769

Decrease in contributions receivable

     210,083      260,503
    

  

Contributions per the Form 5500

   $ 11,096,302    $ 15,285,272
    

  

 

8.   NON-EXEMPT TRANSACTIONS

 

The Company remitted December 2002 participant contributions to the trustee later than required by Department of Labor (“DOL”) regulation 2510.3-102. Participant accounts will be credited with the amount of investment income which would have been earned had the contributions been remitted on a timely basis.

 

* * * * * *

 

7


AMERICAN TOWER

RETIREMENT SAVINGS PLAN

 

FORM 5500, SCHEDULE G, PART III – SCHEDULE OF NON-EXEMPT TRANSACTIONS

YEAR ENDED DECEMBER 31, 2002

 


 

a) Identity of
Party Involved


   b) Relationship to
Plan, Employer or
Other Party-in-
Interest


   c) Description of
Transactions, Including
Maturity Date, Rate of
Interest, Collateral, Par
or Maturity Value


   d) Purchase
Price


   e) Selling
Price


   f) Lease
Rental


   g)  Expenses
Incurred in
Connection
with
Transaction


   h) Cost  
of Asset


   i) Current
Value
of Asset


  

j) Net gain
or (loss) on

each

transaction


American Tower

Corporation*

   Plan
Sponsor
   Late deposits of participant
contributions; deposits
since made; earnings will
be credited.
   -    -    -    -    $1,153**    $15,713***    $14,560

 

*   Represents a party-in-interest to the Plan.

 

**   Participant contributions, totaling $1,153, were withheld from the Company’s payroll but not deposited within a period of not later than 15 business days of the next month, as required by DOL regulations.

 

***   Represents the total of untimely deposits of participant contributions related to the 2002 plan year, as well as the amount of corrective earnings on those deposits and actual and estimated corrective earnings on late deposits prior to the 2002 plan year (all calculated in a manner consistent with the DOL’s Voluntary Fiduciary Correction Program).

 

8


AMERICAN TOWER

RETIREMENT SAVINGS PLAN

 

FORM 5500, SCHEDULE H, PART IV, LINE 4i – SCHEDULE OF ASSETS (HELD AT END OF YEAR)

DECEMBER 31, 2002

 

a)

  

b) Identity of Issue, Borrower, Lessor or Similar Party


  

c) Description of Investment including Maturity Date,
Interest Rate, Collateral, Par or Maturity Value


   d) Cost**

   e) Current
Value


*

   Fidelity Investments    U.S. Bond Index Fund         $ 4,808,238

*

   Fidelity Investments    Retirement Money Market Portfolio           4,455,015

*

   Fidelity Investments    Growth Company Fund           4,249,731

*

   Fidelity Investments    Growth & Income Portfolio           4,081,109

*

   Fidelity Investments    Magellan Fund           4,073,037

*

   Fidelity Investments    Spartan U.S. Equity Index Fund           2,517,920

*

   Fidelity Investments    Worldwide Fund           2,032,668

*

   Fidelity Investments    Puritan Fund           1,958,437

*

   Fidelity Investments    Low-Priced Stock Fund           387,233

*

   Fidelity Investments    Mid-Cap Stock           113,877

*

   Fidelity Investments    Freedom 2020           81,757

*

   Fidelity Investments    Freedom 2030           46,631

*

   Fidelity Investments    Freedom Income           39,813

*

   Fidelity Investments    Freedom 2010           33,835

*

   Fidelity Investments    Freedom 2000           18,784

*

   Fidelity Investments    Freedom 2040           7,628

*

   American Tower Corporation    Class A common stock           1,076,608

*

   Participants   

Loans with various interest rates from 4.25% to 9.50% and various maturity dates through 2012

          853,685
                   

     Total              $ 30,836,006
                   

 

*   Represents a party-in-interest to the Plan.

 

**   Cost information is not required for participant directed investments and therefore has not been included.

 

9


The Plan.    Pursuant to the requirements of the Securities Exchange Act of 1934, the Benefits Committee of American Tower Corporation, as Plan Administrator, has duly caused this annual report to be signed on behalf of the undersigned hereunto duly authorized, in the city of Boston, Massachusetts on the 30th day of June 2003.

 

 

AMERICAN TOWER RETIREMENT SAVINGS PLAN

By:

 

/s/    JUSTIN D. BENINCASA         


   

Justin D. Benincasa

Member, Benefits Committee

 

10


The following exhibits are filed as part of this Annual Report on Form 11-K.

 

Exhibit Index

 

Exhibit
Number


  

Description


23.1

   Consent of Deloitte & Touche LLP

99

   Certification pursuant to 18 U.S.C. Section 1350

 

11