Table	of	Contents

# SECURITIES	AND	EXCHANGE	COMMISSION

# FOR	ANNUAL	AND	TRANSITION	REPORTS

PURSUANT	TO	SECTIONS	13	OR	15(d)	OF	THE

# SECURITIES	EXCHANGE	ACT	OF	1934

(Mark	One)

x ANNUAL	REPORT	PURSUANT	TO	SECTION	13	OR	15(d)	OF	THE	SECURITIES	EXCHANGE	ACT	OF	1934

For	Fiscal	Year	Ended	December	31,	2003

¨ TRANSITION	REPORT	PURSUANT	TO	SECTION	13	OR	15(d)	OF	THE	SECURITIES	EXCHANGE	ACT	OF	1934

# AMERICAN	TOWER	CORPORATION

(Exact	name	of	registrant	as	specified	in	its	charter)

Delaware

(State	or	other	jurisdiction	of incorporation	or	organization)

(I.R.S.	Employer Identification	No.)

116	Huntington	Avenue

Boston,	Massachusetts	02116

(Address	of	principal	executive	offices	and	Zip	Code)

(Registrant's	telephone	number,	including	area	code)

# Securities	registered	pursuant	to	Section	12(b)	of	the	Act:

(Title	of	each	Class)

# Class	A	Common	Stock,	$0.01	par	value

(Name	of	exchange	on	which	registered)

# New	York	Stock	Exchange

# Securities	registered	pursuant	to	Section	12(g)	of	the	Act:

(Title	of	Class)

Indicate	by	check	mark	whether	the	registrant:	(1)	has	filed	all	reports	required	to	be	filed	by	Section	13	or	15(d)	of	the	Securities	Exchange	Act	of	1934	during the	preceding	12	months	(or	for	such	shorter	period	that	the	registrant	was	required	to	file	such	reports),	and	(2)	has	been	subject	to	such	filing	requirements	for	the	past 90	days.				Yes		x				No		¨

Indicate	by	check	mark	if	disclosure	of	delinquent	filers	pursuant	to	Item	405	of	Regulation	S-K	is	not	contained	herein,	and	will	not	be	contained,	to	the	best	of the	registrant's	knowledge,	in	definitive	proxy	or	information	statements	incorporated	by	reference	in	Part	III	of	the	Form	10-K	or	any	amendment	to	this	Form	10- K.				x

Indicate	by	check	mark	whether	the	registrant	is	an	accelerated	filer	(as	defined	in	Exchange	Act	Rule	12b-2).

The	aggregate	market	value	of	the	voting	and	non-voting	common	stock	held	by	non-affiliates	of	the	registrant	as	of	June	30,	2003	was	approximately $1,671,008,644,	based	on	the	closing	price	of	the	registrant's	Class	A	Common	Stock	as	reported	on	the	New	York	Stock	Exchange	as	of	the	last	business	day	of	the registrant's	most	recently	completed	second	quarter.

# DOCUMENTS	INCORPORATED	BY	REFERENCE

Portions	of	the	definitive	proxy	statement	(the	"Definitive	Proxy	Statement")	to	be	filed	with	the	Securities	and	Exchange	Commission	relative	to	the	Company's 2004	Annual	Meeting	of	Stockholders	are	incorporated	by	reference	into	Part	III	of	this	Report.

# FORM	10-K	ANNUAL	REPORT	FISCAL	YEAR	ENDED	DECEMBER	31,	2003

|  | TABLE	OF	CONTENTS<br>FORM	10-K	ANNUAL	REPORT	FISCAL	YEAR	ENDED	DECEMBER	31,	2003 |  |
| :--- | :--- | :--- |
|  |  | Page |
| Special\tNote\tRegarding\tForward-Looking\tStatements |  | 1 |
| PART\tI |  |  |
| ITEM\t1. | Business | 2 |
|  | Overview | 2 |
|  | Strategy | 3 |
|  | Products\tand\tServices | 4 |
|  | Recent\tTransactions | 7 |
|  | Management\tOrganization | 8 |
|  | Regulatory\tMatters | 8 |
|  | Competition | 10 |
|  | Construction,\tManufacturing\tand\tRaw\tMaterials | 11 |
|  | Employees | 11 |
|  | Available\tInformation | 11 |
|  | Factors\tThat\tMay\tAffect\tFuture\tResults | 12 |
| ITEM\t2. | Properties | 17 |
| ITEM\t3. | Legal\tProceedings | 17 |
| ITEM\t4. | Submission\tof\tMatters\tto\ta\tVote\tof\tSecurity\tHolders | 17 |
| PART\tII |  |  |
| ITEM\t5. | Market\tfor\tRegistrant's\tCommon\tEquity\tand\tRelated\tStockholder\tMatters | 18 |
| ITEM\t6. | Selected\tFinancial\tData | 19 |
| ITEM\t7. | Management's\tDiscussion\tand\tAnalysis\tof\tFinancial\tCondition\tand\tResults\tof\tOperations | 22 |
|  | Executive\tOverview | 22 |
|  | Results\tof\tOperations | 23 |
|  | \t\t\t\t\t\t\t\t\t\t\t\tYears\tEnded\tDecember\t31,\t2003\tand\t2002 | 23 |
|  | \t\t\t\t\t\t\t\t\t\t\t\tYears\tEnded\tDecember\t31,\t2002\tand\t2001 | 28 |
|  | Liquidity\tand\tCapital\tResources | 33 |
|  | \t\t\t\t\t\t\t\t\t\t\t\tOverview | 33 |
|  | \t\t\t\t\t\t\t\t\t\t\t\tUses\tof\tCash | 33 |
|  | \t\t\t\t\t\t\t\t\t\t\t\tSources\tof\tCash | 35 |
|  | \t\t\t\t\t\t\t\t\t\t\t\tFactors\tAffecting\tSources\tof\tLiquidity | 36 |
|  | Critical\tAccounting\tPolicies\tand\tEstimates | 38 |
|  | Recent\tAccounting\tPronouncements | 41 |
|  | Information\tPresented\tPursuant\tto\tthe\tIndenture\tof\tOur\t9\t3/8%\tSenior\tNotes | 41 |
|  | Information\tPresented\tPursuant\tto\tthe\tIndentures\tof\tOur\t9\t3/8%\tSenior\tNotes,\tATI\t12.25%\tNotes\tand\tATI\t7.25%\tNotes | 42 |

| ITEM	7A. | Quantitative	and	Qualitative	Disclosures	About	Market	Risk | 43 |
| :--- | :--- | :--- |
| ITEM\t8. | Financial\tStatements\tand\tSupplementary\tData | 45 |
| ITEM\t9. | Changes\tin\tand\tDisagreements\twith\tAccountants\ton\tAccounting\tand\tFinancial\tDisclosure | 45 |
| ITEM\t9A. | Controls\tand\tProcedures | 45 |
| PART\tIII |  |  |
| ITEM\t10. | Directors\tand\tExecutive\tOfficers\tof\tthe\tRegistrant | 46 |
| ITEM\t11. | Executive\tCompensation | 47 |
| ITEM\t12. | Security\tOwnership\tof\tCertain\tBeneficial\tOwners\tand\tManagement\tand\tRelated\tStockholder\tMatters | 47 |
| ITEM\t13. | Certain\tRelationships\tand\tRelated\tTransactions | 47 |
| ITEM\t14. | Principal\tAccountant\tFees\tand\tServices | 47 |
| PART\tIV |  |  |
| ITEM\t15. | Exhibits,\tFinancial\tStatement\tSchedules,\tand\tReports\ton\tForm\t8-K | 48 |
| Signatures |  | 49 |

# SPECIAL	NOTE	REGARDING	FORWARD-LOOKING	STATEMENTS

This	annual	report	contains	statements	about	future	events	and	expectations,	or	forward-looking	statements,	all	of	which	are	inherently	uncertain.	We	have	based those	forward-looking	statements	on	our	current	expectations	and	projections	about	future	results.	When	we	use	words	in	this	document	such	as	"anticipate,"	"intend," "plan,"	"believe,"	"estimate,"	"expect,"	or	similar	expressions,	we	do	so	to	identify	forward-looking	statements.	Examples	of	forward-looking	statements	include statements	we	make	regarding	future	prospects	of	growth	in	the	wireless	communications	and	broadcast	infrastructure	markets,	the	level	of	future	expenditures	by companies	in	those	markets	and	other	trends	in	those	markets,	our	ability	to	maintain	or	increase	our	market	share,	our	future	operating	results,	our	future	capital expenditure	levels,	and	our	plans	to	fund	our	future	liquidity	needs.	These	forward-looking	statements	may	be	found	under	the	headings	"Management's	Discussion	and Analysis	of	Financial	Condition	and	Results	of	Operations"	and	"Business,"	as	well	as	in	this	annual	report	generally.

You	should	keep	in	mind	that	any	forward-looking	statement	made	by	us	in	this	annual	report	or	elsewhere	speaks	only	as	of	the	date	on	which	we	make	it.	New risks	and	uncertainties	come	up	from	time	to	time,	and	it	is	impossible	for	us	to	predict	these	events	or	how	they	may	affect	us.	In	any	event,	these	and	other	important factors	may	cause	actual	results	to	differ	materially	from	those	indicated	by	our	forward-looking	statements,	including	those	set	forth	under	the	caption	"Business— Factors	That	May	Affect	Future	Results."	We	have	no	duty	to,	and	do	not	intend	to,	update	or	revise	the	forward-looking	statements	in	this	annual	report	after	the	date	of this	annual	report,	except	as	may	be	required	by	law.	In	light	of	these	risks	and	uncertainties,	you	should	keep	in	mind	that	the	future	events	or	circumstances	described in	any	forward-looking	statement	made	in	this	annual	report	or	elsewhere	might	not	occur.

# PART	I

# Overview

We	are	a	leading	wireless	and	broadcast	communications	infrastructure	company	with	a	portfolio	of	approximately	15,000	towers.	Our	primary	business	is	leasing antenna	space	on	multi-tenant	communications	towers	to	wireless	service	providers	and	radio	and	television	broadcast	companies.	We	operate	the	largest	independent portfolio	of	wireless	communications	and	broadcast	towers	in	North	America,	based	on	number	of	towers	and	revenue.

Our	tower	portfolio	provides	us	with	a	recurring	base	of	leasing	revenues	from	our	existing	customers	and	growth	potential	due	to	the	capacity	to	add	more tenants	and	equipment	to	these	towers.	Our	broad	network	of	towers	enables	us	to	address	the	needs	of	wireless	service	providers	on	a	national	basis.	We	also	offer	select tower	related	services,	such	as	antennae	and	line	installation	and	site	acquisition	and	zoning	services,	which	are	strategic	to	our	core	leasing	business.	We	intend	to capitalize	on	the	continuing	increase	in	the	use	of	wireless	communication	services	by	actively	marketing	space	available	for	leasing	on	our	existing	towers	and selectively	developing	or	acquiring	new	towers	that	meet	our	return	on	investment	criteria.

Our	core	leasing	business,	which	we	refer	to	as	our	rental	and	management	segment,	accounted	for	approximately	98.4%	and	96.6%	of	our	segment	operating profit	for	the	years	ended	December	31,	2003	and	December	31,	2002,	respectively.	In	2004,	we	expect	that	our	rental	and	management	segment	will	contribute approximately	98%	of	our	segment	operating	profit,	which	we	define	as	segment	revenue	less	direct	segment	expense	(rental	and	management	segment	operating	profit includes	interest	income,	TV	Azteca,	net	–	see	note	16	to	the	consolidated	financial	statements).

An	element	of	our	strategy	is	to	continue	to	focus	our	operations	on	our	rental	and	management	segment	by	divesting	non-core	assets	and	businesses,	using	the proceeds	to	purchase	high	quality	tower	assets,	and	reducing	outstanding	indebtedness.	Between	January	1,	2003	and	March	5,	2004,	we	completed	approximately $123.9	million	of	non-core	asset	sales	and	have	or	will	use	the	net	proceeds	to	acquire	new	tower	assets	and	to	repay	outstanding	indebtedness.	We	expect	that	we	will generate	approximately	$10.0	million	of	additional	net	proceeds	in	2004	from	the	sale	of	other	non-core	assets,	and	intend	to	reinvest	these	proceeds	in	tower	assets.

The	sales	proceeds	described	above	include	proceeds	from	the	disposition	of	our	remaining	non-core	services	businesses,	including	Flash	Technologies,	Galaxy Engineering	and	Kline	Iron	&	Steel	Co.,	Inc.	(Kline).	With	the	divestiture	of	Kline	in	March	2004,	we	have	completed	the	transformation	of	our	business	to	a	focused tower	leasing	business	with	only	limited	services	activities	that	directly	support	our	core	rental	and	management	operations	and	the	addition	of	new	tenants	on	our towers.

We	believe	that	our	strategy	of	focusing	operations	on	our	rental	and	management	segment	will	make	our	consolidated	operating	cash	flows	more	stable,	provide us	with	continuing	growth,	and	enhance	our	returns	on	invested	capital	because	of	the	following	characteristics	of	our	core	leasing	business:

•Long-term	tenant	leases	with	contractual	escalators.	In	general,	a	lease	with	a	wireless	carrier	has	a	duration	of	five	to	ten	years	and	lease	payments typically	increase	3%	to	5%	per	year.

•Tower	operating	expenses	are	largely	fixed.	Incremental	operating	costs	associated	with	adding	wireless	tenants	to	a	tower	are	low.

•Low	maintenance	capital	expenditures.	On	average,	a	wireless	tower	requires	minimal	annual	capital	investments	to	maintain.

•High	lease	renewal	rates.	Wireless	carriers	tend	to	renew	leases	because	repositioning	a	site	in	a	carrier's	network	is	expensive	and	often	affects	several other	sites	in	the	wireless	network.

# Strategy

Our	strategy	is	to	capitalize	on	the	continued	increase	in	the	use	of	wireless	communication	services	and	the	infrastructure	requirements	necessary	to	deploy current	and	future	generations	of	wireless	communication	technologies.	Between	December	2001	and	June	2003,	the	number	of	wireless	phone	subscribers	in	the	United States	increased	from	128.4	million	to	148.1	million,	representing	an	increase	of	approximately	15%	and	market	penetration	of	approximately	51%	at	June	30,	2003. From	December	2001	through	June	2003,	the	number	of	cell	sites	(i.e.,	the	number	of	antennae	and	related	equipment	in	commercial	operation,	not	the	number	of towers	on	which	that	equipment	is	located)	also	increased	from	127,500	to	147,700.	With	respect	to	Mexico,	the	number	of	wireless	phone	subscribers	increased	from approximately	21.5	million	at	the	end	of	2001,	to	approximately	30.4	million	at	the	end	of	2003,	representing	an	increase	of	approximately	41%	and	market	penetration of	approximately	30%	at	December	31,	2003.	We	expect	that	the	continued	growth	of	subscribers	for	wireless	personal	communications	and	phone	services	will	require wireless	carriers	to	add	a	significant	number	of	additional	cell	sites	to	maintain	the	performance	of	their	networks	in	the	areas	they	currently	cover	and	to	extend	service to	areas	where	coverage	does	not	yet	exist.	In	addition,	we	believe	that	as	data	wireless	services,	such	as	email,	internet	access	and	video,	are	deployed	on	a	widespread basis,	the	deployment	of	these	technologies	will	require	wireless	carriers	to	further	increase	the	cell	density	of	their	existing	networks,	may	require	an	overlay	of	new technology	equipment,	and	may	increase	the	demand	for	geographic	expansion	of	their	network	coverage.	To	meet	this	demand,	we	believe	wireless	carriers	will continue	to	outsource	their	tower	infrastructure	needs	as	a	means	of	improving	existing	service	coverage,	implementing	new	technology,	accelerating	access	to	their markets	and	preserving	capital,	rather	than	constructing	and	operating	their	own	towers	and	maintaining	their	own	tower	service	and	development	capabilities.

We	believe	that	our	existing	portfolio	of	towers,	our	tower	related	services	and	network	development	capabilities	and	our	management	team	position	us	to	benefit from	these	communication	trends	and	to	play	an	increasing	role	in	addressing	the	needs	of	wireless	service	providers	and	broadcasters.	The	key	elements	of	our	strategy include:

•Maximize	Use	of	Our	Tower	Capacity.	We	believe	that	our	highest	returns	will	be	achieved	by	leasing	additional	space	on	our	existing	towers.	Annual rental	and	management	revenue	and	segment	operating	profit	growth	during	2003	was	approximately	14%	and	24%,	respectively.	We	anticipate	that	our revenues	and	segment	operating	profit	will	continue	to	grow	because	many	of	our	towers	are	attractively	located	for	wireless	service	providers	and	have capacity	available	for	additional	antenna	space	rental	that	we	can	offer	to	customers	at	low	incremental	costs	to	us.	Because	the	costs	of	operating	a	tower	are largely	fixed,	increasing	utilization	significantly	improves	operating	margins.	We	will	continue	to	target	our	sales	and	marketing	activities	to	increase utilization	of,	and	investment	return	on,	our	existing	towers.

•Actively	Manage	Our	Tower	Portfolio.	We	are	actively	managing	our	portfolio	of	towers	by	selling	non-core	towers	and	reinvesting	a	portion	of	the proceeds	in	high	quality	tower	assets.	In	2003,	we	sold	over	300	non-core	towers	and	redeployed	a	portion	of	the	proceeds	from	these	sales	to	the	acquisition of	525	towers	from	NII	Holdings	in	Mexico	and	Brazil.	We	also	plan	to	pursue	exchanges	and	sales	of	towers	or	tower	clusters	with	tower	operators	and other	entities.	Our	goal	is	to	enhance	operating	efficiencies	either	by	acquiring	towers	in	regions	where	we	have	insufficient	coverage	or	by	disposing	or exchanging	towers	in	areas	where	we	do	not	have	operating	economies	of	scale.	If	we	are	successful	in	disposing	of	certain	tower	assets,	we	may	reinvest	a portion	of	the	proceeds	received	in	tower	assets	that	are	expected	to	provide	a	greater	return.

•Employ	Selective	Criteria	for	New	Tower	Construction	and	Acquisitions.	While	our	first	priority	is	leasing	capacity	on	our	existing	towers,	we	continue to	construct	and	acquire	new	towers	when	our	strict	initial	and	long-term	return	on	investment	criteria	can	be	met.	These	criteria	include	securing	leases	from customers	in	advance	of	construction,	ensuring	reasonable	estimated	construction	costs	and

obtaining	the	land	on	which	to	build	the	tower,	whether	by	purchase	or	ground	lease,	on	reasonable	terms.

•Continue	Our	Focus	on	Customer	Service	and	Processes.	Because	speed	to	market	and	reliable	network	performance	are	critical	components	to	the success	of	wireless	service	providers,	our	ability	to	assist	our	customers	in	meeting	their	goals	will	ultimately	define	our	success.	To	that	end,	we	intend	to continue	to	focus	on	customer	service	by,	for	example,	reducing	cycle	time	for	key	functions,	such	as	lease	processing	and	antennae	and	line	installations. Accordingly,	we	have	established	a	team	dedicated	to	exploring	and	leveraging	customer-driven	process	improvement	capabilities.	This	establishes	another connection	point	with	our	customers,	sharing	operational	processes	and	outcomes,	and	provides	us	valuable	input	and	relationship	enhancing	opportunities. We	believe	that	this	effort	should	enable	us	to	improve	revenue	generation	through	improved	speed,	accuracy	and	quality.

•Build	On	Our	Strong	Relationships	with	Major	Wireless	Carriers.	Our	understanding	of	the	network	needs	of	our	wireless	carrier	customers	and	our ability	to	convey	effectively	how	we	can	satisfy	those	needs	are	key	to	our	efforts	to	add	new	antennae	leases,	cross-sell	our	services	and	identify	desirable new	tower	development	projects.	We	are	building	on	our	strong	relationships	with	our	customers	to	gain	more	familiarity	with	their	evolving	network	plans so	we	can	identify	opportunities	where	our	nationwide	portfolio	of	towers,	extensive	service	offerings	and	experienced	construction	personnel	can	be	used	to satisfy	their	needs.	We	believe	that	we	are	well	positioned	to	be	a	preferred	partner	to	major	wireless	carriers	in	leasing	tower	space	and	new	tower development	projects	because	of	the	location	of	our	towers,	our	proven	operating	and	construction	experience	and	the	national	scope	of	our	tower	portfolio and	services.

•Participation	in	Industry	Consolidation.	We	believe	there	are	benefits	to	consolidation	among	tower	companies.	More	extensive	networks	will	be	better positioned	to	provide	more	comprehensive	service	to	customers	and	to	support	the	infrastructure	requirements	of	future	generations	of	wireless communication	technologies.	Combining	with	one	or	more	other	tower	companies	also	should	result	in	improvements	in	cost	structure	efficiencies,	with	a corresponding	positive	impact	on	operating	results.	These	benefits	should,	in	turn,	enhance	access	to	capital	and	accelerate	the	de-levering	process. Accordingly,	we	continue	to	be	interested	in	participating	in	the	consolidation	of	our	industry	on	terms	that	are	consistent	with	these	perceived	benefits	and that	create	long-term	value	for	our	stockholders.

# Products	and	Services

We	operate	in	two	business	segments:	rental	and	management	and	network	development	services.	For	more	information	about	our	business	segments,	as	well	as financial	information	about	the	geographic	areas	in	which	we	operate,	see	note	16	to	our	consolidated	financial	statements	included	in	this	annual	report	and	the	section entitled	"Management's	Discussion	and	Analysis	of	Financial	Condition	and	Results	of	Operations"	below.

Our	primary	business	is	our	leasing	business,	which	we	refer	to	as	our	rental	and	management	segment,	and	which	accounted	for	approximately	98.4%	of	our segment	operating	profit	for	the	year	ended	December	31,	2003.	We	also	offer	tower	related	services	through	our	network	development	services	segment	that	are strategic	to	our	rental	and	management	segment.

Prior	to	December	2002,	we	also	operated	a	satellite	and	fiber	network	access	services	segment	through	our	Verestar,	Inc.,	subsidiary	(Verestar).	In	December 2002,	we	committed	to	a	plan	to	dispose	of	this	business,	and	in	December	2003,	Verestar	and	its	affiliates	filed	for	protection	under	Chapter	11	of	the	federal bankruptcy	laws.	Accordingly,	we	have	accounted	for	Verestar	as	a	discontinued	operation	through	the	date	of	the	bankruptcy	filing	and	we	ceased	to	consolidate Verestar's	financial	results	as	of	that	date.	See	"–	Factors	That	May	Affect	Future	Results	–	The	bankruptcy	proceeding	of	our	Verestar	subsidiary	exposes	us	to	risks and	uncertainties."

# Rental	and	Management

Leasing	of	Antennae	Sites.	Our	primary	business	is	leasing	antenna	space	on	multi-tenant	communications	towers	to	wireless	service	providers	and	radio	and television	broadcast	companies.	We	operate	a	tower	network	of	approximately	15,000	multi-user	sites	in	the	United	States,	Mexico	and	Brazil,	including	more	than	300 broadcast	tower	sites.	Our	networks	in	the	United	States	and	Mexico	are	national	in	scope.	Our	U.S.	network	spans	49	states	and	the	District	of	Columbia.	In	addition, 85%	of	our	U.S.	network	provides	coverage	in	the	top	100	markets	or	core	areas	such	as	high	traffic	interstate	corridors.	Giving	effect	to	pending	transactions,	our Mexican	network	includes	more	than	1,800	sites	in	highly	populated	areas,	including	Mexico	City,	Monterrey,	Guadalajara	and	Acapulco.	Our	Brazilian	network consists	of	approximately	425	towers,	which	are	primarily	located	in	Sao	Paulo,	Rio	de	Janeiro	and	Curitiba.

We	lease	antenna	space	on	our	towers	to	tenants	in	a	diverse	range	of	wireless	communications	and	broadcast	industries.	Wireless	industries	we	serve	primarily include:	personal	communications	services,	cellular,	enhanced	specialized	mobile	radio,	paging	and	fixed	microwave.	Our	major	domestic	customers	include	ALLTEL, AT&T	Wireless	Services,	Cingular	Wireless,	Nextel,	Sprint	PCS,	T-Mobile	USA	and	Verizon	Wireless,	and	their	respective	affiliates.	Our	major	international customers	include	Iusacell	Celular,	Nextel	Mexico,	Telefonica	Moviles	and	Unefon	in	Mexico,	and	Nextel	Brazil,	Telecom	Americas	and	Telecom	Italia	Mobile	in Brazil.	Our	largest	customer	is	Verizon	Wireless,	which	represented	approximately	12%	of	our	revenues	for	the	year	ended	December	31,	2003.	No	other	customer accounted	for	greater	than	10%	of	our	revenues	for	the	year	ended	December	31,	2003.	Approximately	62%	of	our	revenues	for	the	year	ended	December	31,	2003	were derived	from	eight	customers.	See	"–Factors	That	May	Affect	Future	Results	–	A	substantial	portion	of	our	revenues	is	derived	from	a	small	number	of	customers"	and "Due	to	the	long-term	expectations	of	revenue	from	tenant	leases,	the	tower	industry	is	sensitive	to	the	credit	worthiness	of	its	tenants."

The	number	of	antennae	that	our	towers	can	accommodate	varies	depending	on	the	tower's	location,	height,	and	the	structural	capacity	at	certain	wind	speeds.	An antenna's	height	on	a	tower	and	the	tower's	location	determine	the	line-of-sight	of	the	antenna	with	the	horizon	and,	consequently,	the	distance	a	signal	can	be transmitted.	Some	of	our	customers,	such	as	personal	communications	services,	enhanced	specialized	mobile	radio	providers	and	cellular	companies	in	metropolitan areas,	typically	do	not	place	their	equipment	at	the	highest	tower	point.	Other	customers,	including	paging	companies	and	specialized	mobile	radio	providers	in	rural areas,	prefer	higher	elevations	for	broader	coverage.	We	believe	that	a	significant	majority	of	our	towers	have	the	capacity	to	add	additional	tenants.

Lease	Terms.	Our	leases,	like	most	of	those	in	the	tower	industry,	generally	vary	depending	upon	the	region	and	the	industry	user.	Initial	terms	for	television	and radio	broadcast	leases	typically	range	between	fifteen	and	twenty	years,	while	leases	for	wireless	communications	providers	generally	have	initial	terms	of	five	to	ten years.	In	both	cases,	the	leases	often	have	multiple	renewal	terms	at	the	option	of	the	tenant.	Both	wireless	carriers	and	broadcasters	generally	renew	their	leases	with	us. Repositioning	an	antenna	in	a	wireless	carrier's	network	is	expensive	and	often	requires	reconfiguring	several	other	antennae	in	the	carrier's	network	and	may	require the	carrier	to	obtain	other	governmental	permits.

Most	of	our	leases	have	provisions	that	periodically	increase	the	rent	due	under	the	lease.	These	automatic	increases	are	typically	annual	and	are	based	on	a	fixed percentage,	inflation	or	a	fixed	percentage	plus	inflation.

Annual	rental	payments	vary	considerably	depending	upon:

•the	location	of	the	tower;

•number	and	weight	of	the	antennae	on	the	tower	and	the	size	of	the	transmission	line;

•ground	space	necessary	to	store	equipment	related	to	the	antennae;

•existing	capacity	of	the	tower;

•the	placement	of	the	customer's	antenna	on	the	tower;	and

•range	or	number	of	carrier's	frequency	spectrum.

Tower	Development.	Historically,	cellular	and	other	wireless	service	providers	had	constructed	and	owned	a	majority	of	the	towers	for	their	own	antennae	needs, rather	than	leasing	space	on	towers	from	a	third	party.	Beginning	in	the	late	1990s,	wireless	service	providers	expressed	a	growing	interest	in	having	independent companies	own	and	operate	the	towers	for	their	antennae,	due	to	the	relatively	high	capital	costs	and	operating	expenses	for	a	single	carrier's	use.	This	trend	resulted	in our	entering	into	agreements	with	a	number	of	wireless	carriers	to	construct	and	subsequently	lease	space	on	towers	in	key	areas	identified	as	optimal	for	their	network expansion	requirements.	In	most	cases,	because	we	own	the	constructed	towers,	we	are	able	to	lease	space	on	them	to	other	tenants,	as	well	as	to	the	original	tenant.

# Network	Development	Services

We	provide	the	following	tower-related	services	that	are	strategic	to	our	rental	and	management	segment.

Antennae	and	Line	Installation	and	Construction	Services.	We	are	one	of	the	leading	providers	of	construction	services	for	wireless	communication	and	broadcast towers.	We	provide	construction	services	for	our	own	account	and	for	sites	owned	by	third	parties.	As	part	of	our	network	development	services,	we	provide	antennae and	line	installation	and	maintenance	services	for	wireless	communication	towers	and	broadcast	towers.	These	services	use	not	only	our	construction-related	skills,	but also	our	technical	expertise	to	ensure	that	new	installations	do	not	cause	interference	with	other	tenants.	We	believe	that	our	antennae	and	line	installation	services	and maintenance	capabilities	provide	us	with	a	significant	opportunity	to	capture	incremental	revenue	on	existing	and	newly	built	sites.

Site	Acquisition	and	Zoning	Services.	We	engage	in	site	acquisition	services	for	our	own	account,	in	connection	with	tower	development	projects	and	other proprietary	construction,	as	well	as	for	third	parties.	We	typically	work	with	our	customers'	network	design	engineers	to	determine	the	geographic	areas	where	the applicable	customer	needs	a	tower	site	to	address	its	coverage	objectives.	Once	a	site	is	identified,	we	acquire	the	rights	to	the	land	or	structure	on	which	the	site	will	be constructed,	and	manage	the	permitting	process	to	ensure	all	necessary	approvals	are	obtained	to	construct	and	operate	the	communications	site	under	applicable	law.

Other	Services	and	Infrastructure.	At	the	beginning	of	2003,	part	of	our	network	development	services	segment	included	network	engineering	services	through our	Galaxy	Engineering	division	and	steel	fabrication	and	tall	tower	design	and	construction	services	through	our	Kline	subsidiary.	In	August	2003,	we	sold	our	Galaxy Engineering	division	and	in	June	2003	we	committed	to	a	plan	to	sell	Kline,	which	was	sold	in	March	2004.	Accordingly,	the	results	of	operations	of	these	businesses	are accounted	for	as	discontinued	operations	and	are	not	included	in	our	network	development	services	segment.

# Recent	Transactions

# Acquisitions

NII	Holdings,	Inc.	In	December	2002,	we	agreed	to	acquire	over	500	communications	sites	from	NII	Holdings	(NII),	predominantly	in	Mexico,	for	an	aggregate purchase	price	of	$100.0	million	in	cash.	As	of	December	31,	2003,	we	had	satisfied	our	minimum	purchase	obligation	under	the	agreement	and	had	acquired	an aggregate	of	665	towers	in	Mexico	and	Brazil	from	NII	for	a	total	purchase	price	of	$112.4	million.	We	have	the	option	to	purchase	additional	tower	sites	from	NII	in Mexico	and	Brazil	through	2007,	and	currently	plan	to	acquire	an	additional	24	sites	in	Mexico	in	the	second	quarter	of	2004	for	approximately	$4.4	million.	We	expect to	fund	any	additional	closings	using	funds	from	operations	and	proceeds	from	asset	dispositions.

Iusacell	Celular.	In	December	2003,	we	agreed	to	acquire	up	to	143	communications	sites	from	Iusacell	Celular	in	Mexico	for	up	to	$31.4	million.	We	acquired 34	of	these	towers	in	December	for	approximately	$8.5	million,	and	as	of	March	5,	2004,	we	had	acquired	an	additional	36	towers	for	approximately	$7.6	million.	We expect	to	acquire	the	remaining	towers	by	the	end	of	the	third	quarter	of	2004.	We	expect	to	fund	any	additional	closings	out	of	funds	from	operations	and	proceeds	from asset	dispositions.

# Dispositions

From	January	1,	2003	through	March	5,	2004,	we	completed	approximately	$123.9	million	of	non-core	asset	sales.	Significant	dispositions	included	the following:

Non-Core	Towers.	We	sold	over	300	non-core	tower	assets,	previously	included	in	our	rental	and	management	segment,	for	approximately	$37.0	million.	These dispositions	are	part	of	our	program	to	actively	manage	our	portfolio	of	tower	assets	by	selling	non-core	towers	and	reinvesting	a	portion	of	the	total	proceeds	in	high quality	tower	assets.

Flash	Technologies.	In	January	2003,	we	sold	Flash	Technologies,	our	lighting	systems	business,	previously	included	in	our	network	development	services segment,	for	net	cash	proceeds	of	approximately	$35.5	million.

MTN.	In	February	2003,	Verestar	sold	its	subsidiary,	Maritime	Telecommunications	Network	(MTN),	for	approximately	$25.5	million	in	cash.	The	net	proceeds from	the	sale	were	used	by	Verestar	to	repay	loans	as	required	under	the	credit	facilities.

Office	Buildings.	In	March	2003,	we	sold	an	office	building	for	approximately	$10.3	million.	In	May	2003,	we	sold	an	office	building	for	approximately	$18.5 million,	including	$2.4	million	in	cash	proceeds	and	the	buyer's	assumption	of	$16.1	million	of	related	mortgage	notes.	These	buildings	were	held	primarily	as	rental property	in	our	rental	and	management	segment.

Galaxy	Engineering.	In	August	2003,	we	sold	Galaxy	Engineering,	a	radio	frequency	engineering,	network	design	and	tower-related	consulting	business previously	included	in	our	network	development	services	segment.	We	received	approximately	$2.0	million	in	cash	at	closing	and	will	receive	an	additional	$1.5	million payable	on	or	before	January	15,	2008.

Kline	Iron	&	Steel.	In	March	2004,	we	sold	substantially	all	the	net	assets	of	Kline	for	approximately	$4.0	million	in	cash,	subject	to	a	post	closing	working capital	adjustment,	and	we	may	receive	up	to	an	additional	$2.0	million	in	cash	payable	in	2006	based	on	the	revenues	generated	by	Kline	in	2005.	Kline	was	previously included	in	our	network	development	services	segment.	We	expect	to	sell	the	remaining	assets	of	Kline,	which	primarily	include	an	office	building,	manufacturing facility	and	related	real	estate,	by	June	30,	2004.

# ATC	Mexico	Holding	Corp.

In	January	2004,	J.	Michael	Gearon,	Jr.,	one	of	our	executive	officers,	exercised	his	previously	disclosed	right	to	require	us	to	purchase	his	8.7%	interest	in	ATC Mexico	Holding	Corp.	(ATC	Mexico).	We	currently	own	an	88%	interest	in	ATC	Mexico,	which	is	the	subsidiary	through	which	we	conduct	our	Mexico	operations.

purchase	price	for	Mr.	Gearon's	interest	in	ATC	Mexico	is	subject	to	review	by	an	independent	financial	advisor,	and	is	payable	in	cash	or	shares	of	our	Class	A common	stock,	at	our	option.	We	intend	to	pay	the	purchase	price	in	shares	of	our	Class	A	common	stock,	and	the	closing	is	expected	to	occur	in	the	second	quarter	of 2004.	In	addition,	we	expect	that	payment	of	a	portion	of	the	purchase	price	will	be	contingent	upon	ATC	Mexico	meeting	certain	performance	criteria.

The	remaining	3.3%	interest	in	ATC	Mexico	was	reserved	for	issuance	upon	exercise	of	options	granted	to	certain	employees	under	the	ATC	Mexico	Holding Stock	Option	Plan.	These	options	became	exercisable	upon	the	exercise	of	Mr.	Gearon's	put	right,	and	were	exercised	in	January	2004.	The	employees	holding	these shares	also	may	require	us	to	purchase	their	interest	in	ATC	Mexico	six	months	following	their	issuance,	which	date	will	occur	in	July	2004.	William	H.	Hess,	one	of our	executive	officers,	owns	a	1.4%	interest	in	ATC	Mexico	as	a	result	of	his	exercise	of	options	granted	to	him	under	the	ATC	Mexico	Holding	Stock	Option	Plan.

# Management	Organization

Our	corporate	headquarters	is	in	Boston,	Massachusetts.	In	2003,	we	streamlined	our	United	States	rental	and	management	organization	from	three	regions	and ten	areas	to	centralized	management	over	seven	areas.	Each	of	our	United	States	tower	and	services	divisions	are	now	led	by	a	vice	president	who	reports	to	our President,	US	Tower	Division	who,	in	turn,	reports	to	our	Chief	Executive	Officer.	Our	United	States	tower	and	services	divisions	are	now	centrally	located	in	Boston and	Atlanta,	respectively,	and	are	further	subdivided	into	seven	area	operations	centers	that	are	staffed	with	skilled	engineering,	construction	management	and	marketing personnel.	Our	centralized	lease	processing	for	the	rental	and	management	segment	is	based	in	Woburn,	Massachusetts	and	our	related	accounting	operations	are	based in	Atlanta,	Georgia.	Our	international	regional	centers	are	based	in	Mexico	City,	Mexico	and	Sao	Paulo,	Brazil.	We	believe	our	United	States	and	international	regional and	area	operations	centers	are	capable	of	responding	effectively	to	the	opportunities	and	customer	needs	of	their	defined	geographic	areas.

# Regulatory	Matters

Towers	and	Licenses.	Both	the	Federal	Communications	Commission	("FCC")	and	the	Federal	Aviation	Administration	("FAA")	regulate	towers	used	for wireless	communications	and	radio	and	television	broadcasting.	These	regulations	govern	the	siting,	lighting,	marking	and	maintenance	of	towers.	Depending	on	factors such	as	tower	height	and	proximity	to	public	airfields,	the	construction	of	new	towers	or	modifications	to	existing	towers	must	be	reviewed	by	the	FAA	prior	to initiation	to	ensure	that	the	tower	will	not	present	a	hazard	to	aircraft	navigation.	After	the	FAA	issues	a	"No	Hazard"	determination,	the	tower	owner	must	register	the tower	with	the	FCC	and	paint	and	light	the	tower	in	accordance	with	the	FAA	determination.	The	FAA	review	and	the	FCC	registration	processes	are	prerequisites	to FCC	authorization	of	communications	devices	placed	on	the	tower.	Tower	owners	bear	the	responsibility	for	notifying	the	FAA	of	any	tower	lighting	failures	and	for	the repair	of	those	lighting	failures.	Tower	owners	also	must	notify	the	FCC	when	ownership	of	a	tower	changes.	We	generally	indemnify	our	customers	against	any	failure to	comply	with	applicable	standards.	Failure	to	comply	with	applicable	tower-related	requirements	may	lead	to	monetary	penalties.

The	FCC	separately	regulates	and	licenses	wireless	communications	devices	and	radio	and	television	stations	transmitting	from	the	towers.	We	hold,	through various	subsidiaries,	certain	private	microwave	licenses	granted	by	the	FCC.	We	are	required	to	obtain	the	FCC's	approval	prior	to	assigning	these	licenses	or transferring	control	of	any	entity	of	ours	which	holds	FCC	licenses.

In	January	2001,	the	FCC	concluded	investigations	of	several	operators	of	communications	towers,	including	us.	The	FCC	sent	us	a	Notice	of	Apparent	Liability for	Forfeiture	("NAL")	preliminarily	determining	that	we	had	failed	to	file	certain	informational	forms,	had	failed	to	properly	post	certain	information	at	various	tower sites,	and	on	one	occasion	had	failed	to	properly	light	a	tower.	The	FCC	also	ordered	an	additional	review	of	our	overall	procedures	for	and	degree	of	compliance	with the	FCC's	regulations.	We	reached	a	settlement	with

the	FCC	regarding	the	compliance	issues	arising	out	of	the	NAL	in	the	form	of	a	Consent	Decree.	As	part	of	the	Consent	Decree,	the	FCC	rescinded	the	NAL	and terminated	the	further	investigation	ordered	in	the	NAL.	In	September	2001	we	made	a	voluntary	contribution	of	$0.3	million	to	the	U.S.	Treasury	and	agreed	to maintain	an	active	compliance	plan.	Failure	to	comply	with	the	Consent	Decree	may	lead	to	additional	monetary	penalties	and	loss	of	the	right	to	hold	our	various registrations	and	licenses.	The	Consent	Decree	expires	in	August	2004.

The	FCC	considers	the	construction	of	a	new	tower	or	collocation	of	an	antenna	on	an	existing	antenna	structure	(including	building	rooftops	and	watertanks)	to be	a	federal	undertaking	subject	to	prior	environmental	review	and	approval	under	the	National	Environmental	Policy	Act	of	1969	("NEPA"),	which	obligates	federal agencies	to	evaluate	the	environmental	impacts	of	undertakings	to	determine	whether	they	may	significantly	affect	the	environment.	The	FCC	has	issued	regulations implementing	NEPA	as	well	as	the	National	Historic	Preservation	Act,	and	the	Endangered	Species	Act	("ESA").	These	regulations	place	responsibility	on	each	FCC applicant	or	licensee	to	investigate	potential	environmental	and	other	effects	of	operations	and	to	disclose	any	significant	impacts	in	an	environmental	assessment	prior to	constructing	a	tower	or	collocating	an	antenna.	If	a	tower	or	collocation	may	have	a	significant	impact	on	the	environment,	FCC	approval	of	the	tower	or	collocation could	be	significantly	delayed.

In	August	2002,	certain	environmental	groups	asked	the	FCC	to	review	the	tower	registrations	of	more	than	5,000	towers	in	the	gulf	coast	region	to	assess compliance	with	the	ESA	and	Migratory	Bird	Treaty	Act	and	to	require	the	filing	of	new	or	revised	environmental	assessments	under	NEPA	for	all	towers	in	the	region. We	own	a	number	of	the	towers	identified	in	the	pleading.	However,	because	the	pleading	was	not	served	on	us,	we	have	not	been	asked	by	the	FCC	to	respond.	PCIA,	a trade	association	representing	the	tower	industry,	has	asked	the	FCC	to	dismiss	the	pleading	based	on	numerous	grounds.	The	matter	is	pending.	In	February	2003,	the same	environmental	groups	filed	suit	against	the	FCC	in	a	federal	appeals	court,	asking	the	court	to	force	the	FCC	to	address	the	groups'	pending	requests	and	appeals, and	asked	the	court	to	force	the	FCC	to	adopt	more	stringent	environmental	rules.	Depending	on	how	the	court	rules,	we	could	be	subject	to	increased	compliance obligations.	In	addition,	a	ruling	in	the	federal	appeals	court	could	affect	the	groups'	pending	cases	with	the	FCC.

The	Telecommunications	Act	of	1996	amended	the	Communications	Act	of	1934	by	limiting	state	and	local	zoning	authorities'	jurisdiction	over	the	construction, modification	and	placement	of	wireless	communications	towers.	The	law	preserves	local	zoning	authority	but	prohibits	any	action	that	would	discriminate	between different	providers	of	wireless	services	or	ban	altogether	the	construction,	modification	or	placement	of	communications	towers.	It	also	prohibits	state	or	local restrictions	based	on	the	environmental	effects	of	radio	frequency	emissions	to	the	extent	the	facilities	comply	with	FCC	regulations.	The	Telecommunications	Act	of 1996	also	requires	the	federal	government	to	help	licensees	of	wireless	communications	services	gain	access	to	preferred	sites	for	their	facilities.	This	may	require	that federal	agencies	and	departments	work	directly	with	licensees	to	make	federal	property	available	for	towers

We	are	also	subject	to	local	and	county	zoning	restrictions	and	restrictive	covenants	imposed	by	local	authorities	or	community	developers.	These	regulations vary	greatly,	but	typically	require	tower	owners	and/or	licensees	to	obtain	approval	from	local	officials	or	community	standards	organizations	prior	to	tower	construction or	collocations	on	existing	towers.	Local	zoning	authorities	often	are	in	opposition	to	construction	in	their	communities	and	these	regulations	can	delay	or	prevent	new tower	construction,	collocations	or	site	upgrade	projects,	thereby	limiting	our	ability	to	respond	to	customer	demand.	In	addition,	those	regulations	increase	costs associated	with	new	tower	construction	and	collocation.	Existing	regulatory	policies	may	adversely	affect	the	timing	or	cost	of	new	tower	construction	and	collocations, and	additional	regulations	may	be	adopted	which	increase	delays	or	result	in	additional	costs	to	us.	These	factors	could	adversely	affect	our	construction	program	and operations.

Our	tower	operations	in	Mexico	and	Brazil	are	also	subject	to	regulation.	If	we	pursue	additional	international	opportunities,	we	will	be	subject	to	regulations	in additional	foreign	jurisdictions.	In	addition,	our	customers,	both	domestic	and	foreign,	also	may	be	subject	to	new	regulatory	policies	that	may	adversely	affect	the demand	for	communications	sites.

Satellite	and	Fiber	Network	Access	Services	(Discontinued	Operations).	Our	Verestar	subsidiary	is	required	to	obtain	licenses	and	other	authorizations	from	the FCC	for	its	use	of	radio	frequencies	to	provide	satellite	and	wireless	services	in	the	United	States.	Verestar	also	is	required	to	obtain	authorizations	from	foreign regulatory	agencies	in	connection	with	its	provision	of	these	services	abroad.	Verestar	also	holds	a	number	of	point-to-point	microwave	radio	licenses	that	are	used	to provide	telecommunications	services.	Additionally,	Verestar	holds	a	number	of	satellite	earth	station	licenses	in	connection	with	its	operation	of	satellite-based	networks. We	and	Verestar	are	required	to	obtain	consent	from	the	FCC	prior	to	assigning	these	licenses	or	transferring	control	of	any	of	our	companies	holding	an	FCC	license.

Environmental	Matters.	Our	operations,	like	those	of	other	companies	engaged	in	similar	businesses,	are	subject	to	various	federal,	state	and	local	and	foreign environmental	and	occupational	safety	and	health	laws	and	regulations,	including	those	relating	to	the	management,	use,	storage,	disposal,	emission	and	remediation	of, and	exposure	to,	hazardous	and	non-hazardous	substances,	materials,	and	wastes,	and	the	siting	of	our	towers.	As	an	owner,	lessee	and/or	operator	of	real	property	and facilities,	we	may	have	liability	under	those	laws	for	the	costs	of	investigation,	removal	or	remediation	of	soil	and	groundwater	contaminated	by	hazardous	substances	or wastes.	Certain	of	these	laws	impose	cleanup	responsibility	and	liability	without	regard	to	whether	we,	as	the	owner,	lessee	or	operator,	knew	of	or	were	responsible	for the	contamination,	and	whether	or	not	we	have	discontinued	operations	or	sold	the	property.	We	may	also	be	subject	to	common	law	claims	by	third	parties	based	on damages	and	costs	resulting	from	off-site	migration	of	contamination.

We,	and	our	customers,	also	may	be	required	to	obtain	permits,	obey	regulatory	requirements,	and	make	certain	informational	filings	related	to	hazardous substances	used	at	our	sites	by	our	customers.	Violations	of	these	types	of	regulations	could	subject	us	to	fines	and/or	criminal	sanctions.	In	October	2001,	we	paid $150,000	in	civil	penalties	and	entered	into	a	settlement	agreement	that	expires	in	2006	related	to	certain	alleged	environmental	permitting	and	filing	violations	in	the County	of	Santa	Clara	in	California.

Health,	Safety	and	Transportation.	As	an	FCC	licensee,	we	are	subject	to	regulations	and	guidelines	imposing	certain	operational	obligations	relating	to	radio frequency	emissions.	As	an	employer,	we	are	subject	to	the	Occupational	Safety	and	Health	Act	and	similar	guidelines	regarding	employee	protection	from	radio frequency	exposure.	Our	construction	teams	are	subject	to	regulation	by	the	Occupational	Safety	and	Health	Administration	and	equivalent	state	agencies	concerning health	and	safety	matters.	Our	heavy	vehicles	and	their	drivers	are	subject	to	regulation	by	the	Department	of	Transportation	("DOT").	Our	DOT	compliance	program	is currently	rated	"Satisfactory,"	the	highest	rating	assigned	by	the	DOT.

# Competition

# Rental	and	Management	Segment

We	compete	for	antennae	site	customers	with	other	national	tower	companies	(such	as	Crown	Castle	International	Corp.,	SpectraSite,	Inc.,	and	SBA Communications	Corp.),	wireless	carriers	that	own	and	operate	their	own	tower	networks	and	lease	tower	space	to	other	carriers,	numerous	independent	tower	owners and	the	owners	of	non-tower	sites,	including	rooftops,	water	towers	and	other	alternative	structures.	We	believe	that	tower	location	and	capacity,	price	and	quality	of service	historically	have	been	and	will	continue	to	be	the	most	significant	competitive	factors	affecting	owners,	operators	and	managers	of	communications	sites.

The	emergence	or	growth	of	new	technologies	also	may	make	it	possible	for	wireless	carriers	to	expand	their	use	of	existing	infrastructure,	which	could	reduce customer	demand	for	our	communications	sites.	The	increased	use	of	capacity	enhancing	technologies,	such	as	lower-rate	vocoders,	and	more	spectrally	efficient	air-link standards,	which	potentially	can	relieve	some	network	capacity	problems,	could	reduce	the	demand	for	tower-based	antenna	space.

Any	increase	in	the	use	of	network	sharing	or	roaming	or	resale	arrangements	by	wireless	service	providers	also	could	adversely	affect	the	demand	for	tower space.	These	arrangements,	which	are	essentially	extensions	of	traditional	roaming	agreements,	enable	a	provider	to	serve	customers	outside	its	license	area,	to	give licensed	providers	the	right	to	enter	into	arrangements	to	serve	overlapping	license	areas,	and	to	permit	non-licensed	providers	to	enter	the	wireless	marketplace. Consolidation	among	wireless	carriers,	such	as	the	recently	announced	transaction	between	Cingular	Wireless	and	AT&T	Wireless,	could	have	a	similar	impact	on customer	demand	for	our	tower	sites	because	the	existing	networks	of	many	wireless	carriers	overlap.	Although	we	do	not	expect	the	Cingular/AT&T	Wireless transaction	to	have	a	material	adverse	effect	on	our	results	of	operations,	significant	consolidation	among	wireless	carriers	may	adversely	affect	demand	for	our	tower sites	and,	accordingly,	our	revenues	and	cash	flows.

Network	Development	Services	Segment	Competition.	Our	network	development	services	compete	with	a	variety	of	companies	offering	individual,	or combinations	of,	competing	services.	The	field	of	competitors	includes	site	acquisition	consultants,	zoning	consultants,	real	estate	firms,	right-of-way	consulting	firms, construction	companies,	tower	owners/managers,	radio	frequency	engineering	consultants,	telecommunications	equipment	vendors	who	can	provide	turnkey	site development	services	through	multiple	subcontractors,	and	our	customers'	internal	staffs.	We	believe	that	our	customers	base	their	decisions	on	network	development services	on	various	criteria,	including	a	company's	experience,	track	record,	local	reputation,	price,	and	time	for	completion	of	a	project.

We	believe	that	we	compete	favorably	as	to	the	key	competitive	factors	relating	to	our	rental	and	management	and	network	development	services	segments.

# Construction,	Manufacturing	and	Raw	Materials

We	build,	maintain	and	install	land-based	wireless	communications	and	broadcast	transmitting	and	receiving	facilities	by	obtaining	steel	and	other	raw	material parts	and	components	from	a	variety	of	vendors.	We	also	engage	third	party	contract	manufacturers	to	construct	certain	of	these	facilities.	We	have	historically	obtained the	majority	of	our	raw	material	parts	and	components	from	a	limited	number	of	suppliers.	However,	substantially	all	of	these	items	are	available	from	numerous	other suppliers.	We	have	not,	to	date,	experienced	any	significant	difficulties	in	obtaining	the	needed	quantities	of	materials	from	suppliers	in	a	timely	manner.

# Employees

As	of	December	31,	2003,	we	employed	approximately	1,400	full-time	individuals,	including	approximately	250	employees	in	our	deconsolidated	Verestar subsidiary	and	approximately	80	employees	in	our	discontinued	Kline	subsidiary,	and	consider	our	employee	relations	to	be	satisfactory.

# Available	Information

Our	Internet	website	address	is	www.americantower.com.	Information	contained	in	our	website	is	not	incorporated	by	reference	into	this	annual	report,	and	you should	not	consider	information	contained	in	our	website	as	part	of	this	annual	report.	You	may	access,	free	of	charge,	our	annual	reports	on	Form	10-K,	quarterly reports	on	Form	10-Q,	and	current	reports	on	Form	8-K,	plus	amendments	to	such	reports	as	filed	or	furnished	pursuant	to	Section	13(a)	or	15(d)	of	the	Securities Exchange	Act	of	1934,	as	amended,	through	the	Investors	portion	of	our	website	as	soon	as	reasonably	practicable	after	we	electronically	file	such	material	with,	or furnish	it	to,	the	Securities	and	Exchange	Commission.

We	have	adopted	a	written	code	of	conduct	that	applies	to	all	of	our	employees	and	directors,	including,	but	not	limited	to,	our	principal	executive	officer, principal	financial	officer,	and	principal	accounting	officer	or	controller,	or	persons	performing	similar	functions.	The	code	of	conduct,	our	corporate	governance guidelines,	and	the	charters	of	our	audit,	compensation,	and	nominating	and	corporate	governance	committees,	are	available	at	the	Investors	portion	of	our	website.	In the	event	we	amend,	or	provide	any	waivers	from,	the	provisions	of	this	code	of	conduct,	we	intend	to	disclose	these	events	on	our	website	as	required	by	law.

In	addition,	paper	copies	of	these	documents	may	be	obtained	free	of	charge	by	writing	us	at	the	following	address:	116	Huntington	Avenue,	Boston,

Massachusetts	02116,	Attention:	Vice	President	of	Finance,	Investor	Relations;	or	by	calling	us	at	(617)	375-7500.

# Factors	That	May	Affect	Future	Results

# Decrease	in	demand	for	tower	space	would	materially	and	adversely	affect	our	operating	results	and	we	cannot	control	that	demand.

Many	of	the	factors	affecting	the	demand	for	wireless	communications	tower	space,	and	to	a	lesser	extent	our	network	development	services	business,	could materially	affect	our	operating	results.	Those	factors	include:

•consumer	demand	for	wireless	services;

•the	financial	condition	of	wireless	service	providers;

•the	ability	and	willingness	of	wireless	service	providers	to	maintain	or	increase	their	capital	expenditures;

•the	growth	rate	of	wireless	communications	or	of	a	particular	wireless	segment;

•governmental	licensing	of	broadcast	rights;

•mergers	or	consolidations	among	wireless	service	providers;

•increased	use	of	network	sharing	arrangements	or	roaming	and	resale	arrangements	by	wireless	service	providers;

•delays	or	changes	in	the	deployment	of	3G	or	other	technologies;

•zoning,	environmental,	health	and	other	government	regulations;	and

•technological	changes.

The	demand	for	broadcast	antenna	space	is	dependent,	to	a	significantly	lesser	extent,	on	the	needs	of	television	and	radio	broadcasters.	Among	other	things, technological	advances,	including	the	development	of	satellite-delivered	radio,	may	reduce	the	need	for	tower-based	broadcast	transmission.	We	could	also	be	affected adversely	should	the	development	of	digital	television	be	further	delayed	or	impaired,	or	if	demand	for	it	were	less	than	anticipated	because	of	delays,	disappointing technical	performance	or	cost	to	the	consumer.

# Substantial	leverage	and	debt	service	obligations	may	adversely	affect	us.

We	have	a	substantial	amount	of	indebtedness.	As	of	December	31,	2003,	we	had	approximately	$3.4	billion	of	consolidated	debt.

Our	substantial	level	of	indebtedness	increases	the	possibility	that	we	may	be	unable	to	generate	cash	sufficient	to	pay	when	due	the	principal	of,	interest	on	or other	amounts	due	in	respect	of	our	indebtedness.	Approximately	21%	of	our	outstanding	indebtedness	bears	interest	at	floating	rates.	As	a	result,	our	interest	payment obligations	on	such	indebtedness	will	increase	if	interest	rates	increase.

Our	substantial	leverage	could	have	significant	negative	consequences	on	our	financial	condition	and	results	of	operations,	including:

•impairing	our	ability	to	meet	one	or	more	of	the	financial	ratios	contained	in	our	debt	agreements	or	to	generate	cash	sufficient	to	pay	interest	or	principal,

including	periodic	principal	amortization	payments,	which	events	could	result	in	an	acceleration	of	some	or	all	of	our	outstanding	debt	as	a	result	of	cross- default	provisions;

•increasing	our	vulnerability	to	general	adverse	economic	and	industry	conditions;

•limiting	our	ability	to	obtain	additional	debt	or	equity	financing;

•requiring	the	dedication	of	a	substantial	portion	of	our	cash	flow	from	operations	to	service	our	debt,	thereby	reducing	the	amount	of	our	cash	flow	available for	other	purposes,	including	capital	expenditures;

•requiring	us	to	sell	debt	or	equity	securities	or	to	sell	some	of	our	core	assets,	possibly	on	unfavorable	terms,	to	meet	payment	obligations;

•limiting	our	flexibility	in	planning	for,	or	reacting	to,	changes	in	our	business	and	the	industries	in	which	we	compete;	and

•placing	us	at	a	possible	competitive	disadvantage	with	less	leveraged	competitors	and	competitors	that	may	have	better	access	to	capital	resources.

# Restrictive	covenants	in	our	credit	facilities	and	indentures	could	adversely	affect	our	business	by	limiting	flexibility.

Our	credit	facilities	and	the	indentures	governing	the	terms	of	our	other	debt	securities	contain	restrictive	covenants	and,	in	the	case	of	the	credit	facilities, requirements	that	we	comply	with	certain	leverage	and	other	financial	tests.	These	limit	our	ability	to	take	various	actions,	including	incurring	additional	debt, guaranteeing	indebtedness,	issuing	preferred	stock,	engaging	in	various	types	of	transactions,	including	mergers	and	sales	of	assets,	and	paying	dividends	and	making distributions	or	other	restricted	payments,	including	investments.	These	covenants	could	have	an	adverse	effect	on	our	business	by	limiting	our	ability	to	take	advantage of	financing,	new	tower	development,	merger	and	acquisition	or	other	opportunities.

# Our	participation	or	inability	to	participate	in	tower	industry	consolidation	could	involve	certain	risks.

We	believe	there	are	benefits	to	consolidation	among	tower	companies,	and	have	in	the	past	and	may	in	the	future	explore	merger	or	acquisition	transactions	with one	or	more	other	companies	in	our	industry.	Any	merger	or	acquisition	transaction	would	involve	several	risks	to	our	business,	including	demands	on	managerial personnel	that	could	divert	their	attention	from	other	aspects	of	our	core	leasing	business,	increased	operating	risks	due	to	the	integration	of	major	national	networks into	our	operational	system,	and	potential	antitrust	constraints,	either	in	local	markets	or	on	a	regional	basis,	that	could	require	selective	divestitures	at	unfavorable prices.	Any	completed	transaction	may	have	an	adverse	effect	on	our	operating	results,	particularly	in	the	fiscal	quarters	immediately	following	its	completion	while	we integrate	the	operations	of	the	other	business.	In	addition,	once	integrated,	combined	operations	may	not	necessarily	achieve	the	levels	of	revenues,	profitability	or productivity	anticipated.	There	also	may	be	limitations	on	our	ability	to	consummate	a	merger	or	acquisition	transaction.	For	example,	any	transaction	would	have	to comply	with	the	terms	of	our	credit	facilities	and	note	indentures,	or	may	require	the	consent	of	lenders	under	those	instruments	that	might	be	required	that	might	not	be obtainable	on	acceptable	terms.	In	addition,	regulatory	constraints	might	impede	or	prevent	business	combinations.	Our	inability	to	consummate	a	merger	or	acquisition for	these	or	other	reasons	could	result	in	our	failure	to	participate	in	the	expected	benefits	of	industry	consolidation	and	may	have	an	adverse	effect	on	our	ability	to compete	effectively.

# 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.

Significant	consolidation	among	our	wireless	service	provider	customers,	such	as	the	recently	announced	transaction	between	Cingular	Wireless	and	AT&T Wireless,	may	result	in	reduced	capital	expenditures	in	the	aggregate	because	the	existing	networks	of	many	wireless	carriers	overlap,	as	do	their	expansion	plans. Similar	consequences	might	occur	if	wireless	service	providers	engage	in	extensive	sharing,	roaming	or	resale	arrangements	as	an	alternative	to	leasing	our	antennae space.	In	January	2003,	the	Federal	Communications	Commission	(FCC)	eliminated	its	spectrum	cap,	which	prohibited	wireless	carriers	from	owning	more	than	45 MHz	of	spectrum	in	any	given	geographical	area,	expired.	The	FCC	has	also	eliminated	the	cross-interest	rule

for	metropolitan	areas,	which	limited	an	entity's	ability	to	own	interests	in	multiple	cellular	licenses	in	an	overlapping	geographical	service	area.	Also,	in	May	2003,	the FCC	adopted	new	rules	authorizing	wireless	radio	services	holding	exclusive	licenses	to	freely	lease	unused	spectrum.	Some	wireless	carriers	may	be	encouraged	to consolidate	with	each	other	as	a	result	of	these	regulatory	changes	as	a	means	to	strengthen	their	financial	condition.	Consolidation	among	wireless	carriers	would	also increase	our	risk	that	the	loss	of	one	or	more	of	our	major	customers	could	materially	decrease	revenues	and	cash	flows.

# Due	to	the	long-term	expectations	of	revenue	from	tenant	leases,	the	tower	industry	is	sensitive	to	the	creditworthiness	of	its	tenants.

Due	to	the	long-term	nature	of	our	tenant	leases,	we,	like	others	in	the	tower	industry,	are	dependent	on	the	continued	financial	strength	of	our	tenants.	Many wireless	service	providers	operate	with	substantial	leverage.	During	the	past	two	years,	several	of	our	customers	have	filed	for	bankruptcy,	although	to	date	these bankruptcies	have	not	had	a	material	adverse	effect	on	our	business	or	revenues.	In	addition,	Iusacell	Celular,	which	is	our	largest	customer	in	Mexico	and	accounted	for approximately	4.7%	of	our	total	revenues	for	the	year	ended	December	31,	2003	and	approximately	3.7%	for	the	year	ended	December	31,	2002,	is	currently	in	default under	its	debt	obligations.	If	one	or	more	of	our	major	customers	experience	financial	difficulties	or	if	Iusacell	files	for	bankruptcy,	it	could	result	in	uncollectible accounts	receivable	and	our	loss	of	significant	customers	and	anticipated	lease	revenues.

# Our	foreign	operations	are	subject	to	expropriation	risk,	governmental	regulation,	funds	inaccessibility	and	foreign	exchange	exposure.

Our	expansion	in	Mexico	and	Brazil,	and	any	other	possible	foreign	operations	in	the	future,	could	result	in	adverse	financial	consequences	and	operational problems	not	experienced	in	the	United	States.	We	have	loaned	$119.8	million	(undiscounted)	to	a	Mexican	company,	own	or	have	the	economic	rights	to	over	1,800 towers	in	Mexico,	including	approximately	200	broadcast	towers	(after	giving	effect	to	pending	transactions)	and,	subject	to	certain	rejection	rights,	are	contractually committed	to	construct	up	to	approximately	400	additional	towers	in	that	country	over	the	next	three	years.	We	also	own	or	have	acquired	the	rights	to	approximately 425	communications	towers	in	Brazil	and	are,	subject	to	certain	rejection	rights,	contractually	committed	to	construct	up	to	350	additional	towers	in	that	country	over	the next	three	years.	The	actual	number	of	sites	constructed	will	vary	depending	on	the	build	out	plans	of	the	applicable	carrier.	We	may,	if	economic	and	capital	market conditions	permit,	also	engage	in	comparable	transactions	in	other	countries	in	the	future.	Among	the	risks	of	foreign	operations	are	governmental	expropriation	and regulation,	the	credit	quality	of	our	customers,	inability	to	repatriate	earnings	or	other	funds,	currency	fluctuations,	difficulty	in	recruiting	trained	personnel,	and language	and	cultural	differences,	all	of	which	could	adversely	affect	our	operations.

# A	substantial	portion	of	our	revenues	is	derived	from	a	small	number	of	customers.

A	substantial	portion	of	our	total	operating	revenues	is	derived	from	a	small	number	of	customers.	Approximately	61.5%	of	our	revenues	for	the	year	ended December	31,	2003	were	derived	from	eight	customers.	Our	largest	domestic	customer	is	Verizon	Wireless,	which	represented	approximately	12.3%	of	our	total revenues	for	the	year	ended	December	31,	2003.	If	the	recently	announced	transaction	between	Cingular	Wireless	and	AT&T	Wireless	had	occurred	as	of	January	1, 2003,	however,	the	combined	revenues	would	have	represented	approximately	15.0%	of	our	total	revenues	for	the	year	ended	December	31,	2003.	Our	largest international	customer	is	a	group	of	companies	affiliated	with	Azteca	Holdings,	S.A.	de	C.V.,	including	TV	Azteca,	Unefon	and,	due	to	its	acquisition	in	2003	by	Movil Access,	an	affiliate	of	Azteca	Holdings,	Iusacell	Celular.	Iusacell	Celular,	Unefon	and	their	affiliates	collectively	represented	approximately	7.5%	of	our	total	revenues for	the	year	ended	December	31,	2003.	In	addition,	we	received	$14.2	million	in	interest	income,	net,	for	the	year	ended	December	31,	2003,	from	TV	Azteca.	If	any	of these	customers	were	unwilling	or	unable	to	perform	their	obligations	under	our	agreements	with	them,	our	revenues,	results	of	operations,	and	financial	condition	could be	adversely	affected.

In	the	ordinary	course	of	our	business,	we	also	sometimes	experience	disputes	with	our	customers,	generally	regarding	the	interpretation	of	terms	in	our agreements.	Although	historically	we	have	resolved	most	of	these	disputes	in	a	manner	that	did	not	have	a	material	adverse	effect	on	our	company	or	our	customer relationships,	these	disputes	could	lead	to	a	termination	of	our	agreements	with	customers	or	a	material	modification	of	the	terms	of	those	agreements,	either	of	which could	have	a	material	adverse	effect	on	our	business,	results	of	operations	and	financial	condition.	If	we	are	forced	to	resolve	any	of	these	disputes	through	litigation,	our relationship	with	the	applicable	customer	could	be	terminated	or	damaged,	which	could	lead	to	decreased	revenues	or	increased	costs,	resulting	in	a	corresponding adverse	effect	on	our	operating	results.

# New	technologies	could	make	our	tower	antenna	leasing	services	less	desirable	to	potential	tenants	and	result	in	decreasing	revenues.

The	development	and	implementation	of	new	technologies	designed	to	enhance	the	efficiency	of	wireless	networks	could	reduce	the	use	and	need	for	tower-based wireless	services	transmission	and	reception	and	have	the	effect	of	decreasing	demand	for	antenna	space.	Examples	of	such	technologies	include	technologies	that enhance	spectral	capacity,	such	as	lower-rate	vocoders,	which	can	increase	the	capacity	at	existing	sites	and	reduce	the	number	of	additional	sites	a	given	carrier	needs	to serve	any	given	subscriber	base.	In	addition,	the	emergence	of	new	technologies	could	reduce	the	need	for	tower-based	broadcast	services	transmission	and	reception. For	example,	the	growth	in	delivery	of	video	services	by	direct	broadcast	satellites	could	adversely	affect	demand	for	our	antenna	space.	The	development	and implementation	of	any	of	these	and	similar	technologies	to	any	significant	degree	could	have	an	adverse	effect	on	our	operations.

# We	could	have	liability	under	environmental	laws.

Our	operations,	like	those	of	other	companies	engaged	in	similar	businesses,	are	subject	to	the	requirements	of	various	federal,	state	and	local	and	foreign environmental	and	occupational	safety	and	health	laws	and	regulations,	including	those	relating	to	the	management,	use,	storage,	disposal,	emission	and	remediation	of, and	exposure	to,	hazardous	and	non-hazardous	substances,	materials	and	wastes.	As	owner,	lessee	or	operator	of	approximately	15,000	real	estate	sites,	we	may	be liable	for	substantial	costs	of	remediating	soil	and	groundwater	contaminated	by	hazardous	materials,	without	regard	to	whether	we,	as	the	owner,	lessee	or	operator, knew	of	or	were	responsible	for	the	contamination.	In	addition,	we	cannot	assure	you	that	we	are	at	all	times	in	complete	compliance	with	all	environmental requirements.	We	may	be	subject	to	potentially	significant	fines	or	penalties	if	we	fail	to	comply	with	any	of	these	requirements.	The	current	cost	of	complying	with these	laws	is	not	material	to	our	financial	condition	or	results	of	operations.	However,	the	requirements	of	these	laws	and	regulations	are	complex,	change	frequently, and	could	become	more	stringent	in	the	future.	It	is	possible	that	these	requirements	will	change	or	that	liabilities	will	arise	in	the	future	in	a	manner	that	could	have	a material	adverse	effect	on	our	business,	financial	condition	and	results	of	operations.

# Our	business	is	subject	to	government	regulations	and	changes	in	current	or	future	laws	or	regulations	could	restrict	our	ability	to	operate	our	business	as	we currently	do.

We	are	subject	to	federal,	state,	local	and	foreign	regulation	of	our	business,	including	regulation	by	the	Federal	Aviation	Administration	(FAA),	the	FCC,	the Environmental	Protection	Agency,	the	Department	of	Transportation	and	the	Occupational	Safety	and	Health	Administration.	Both	the	FCC	and	the	FAA	regulate towers	used	for	wireless	communications	and	radio	and	television	antennae	and	the	FCC	separately	regulates	transmitting	devices	operating	on	towers.	Similar regulations	exist	in	Mexico,	Brazil	and	other	foreign	countries	regarding	wireless	communications	and	the	operation	of	communications	towers.	Local	zoning	authorities and	community	organizations	are	often	opposed	to	construction	in	their	communities	and	these	regulations	can	delay,	prevent	or	increase	the	cost	of	new	tower construction,	collocations	or	site	upgrade	projects,	thereby	limiting	our	ability	to	respond	to	customer	demand.	Existing	regulatory	policies	may	adversely	affect	the timing	or	cost	of	new	tower	construction	and	locations	and	additional	regulations	may	be	adopted	that	increase	delays	or	result	in	additional	costs	to	us	or	that	prevent	or restrict	new	tower	construction	in	certain	locations.	These	factors	could	adversely	affect	our	operations.

# Increasing	competition	in	the	tower	industry	may	create	pricing	pressures	that	may	adversely	affect	us.

Our	industry	is	highly	competitive,	and	our	customers	have	numerous	alternatives	for	leasing	antenna	space.	Some	of	our	competitors	are	larger	and	have	greater financial	resources	than	we	do,	while	other	competitors	are	in	weak	financial	condition	or	may	have	lower	return	on	investment	criteria	than	we	do.	Competitive	pricing pressures	for	tenants	on	towers	from	these	competitors	could	adversely	affect	our	lease	rates	and	services	income.

In	addition,	if	we	lose	customers	due	to	pricing,	we	may	not	be	able	to	replace	these	customers,	leading	to	an	accompanying	adverse	effect	on	our	profitability. Increasing	competition	could	also	make	the	acquisition	of	high	quality	tower	assets	more	costly.

Our	competition	includes:

•national	tower	companies;

•wireless	carriers	that	own	towers	and	lease	antenna	space	to	other	carriers;

•site	development	companies	that	purchase	antenna	space	on	existing	towers	for	wireless	carriers	and	manage	new	tower	construction;	and

•alternative	site	structures	(e.g.,	building	rooftops,	billboards	and	utility	poles).

# Our	costs	could	increase	and	our	revenues	could	decrease	due	to	perceived	health	risks	from	radio	emissions,	especially	if	these	perceived	risks	are	substantiated.

Public	perception	of	possible	health	risks	associated	with	cellular	and	other	wireless	communications	media	could	slow	the	growth	of	wireless	companies,	which could	in	turn	slow	our	growth.	In	particular,	negative	public	perception	of,	and	regulations	regarding,	these	perceived	health	risks	could	slow	the	market	acceptance	of wireless	communications	services	and	increase	opposition	to	the	development	and	expansion	of	tower	sites.	The	potential	connection	between	radio	frequency	emissions and	certain	negative	health	effects	has	been	the	subject	of	substantial	study	by	the	scientific	community	in	recent	years.	To	date,	the	results	of	these	studies	have	been inconclusive.

If	a	connection	between	radio	frequency	emissions	and	possible	negative	health	effects,	including	cancer,	were	established,	or	if	the	public	perception	that	such	a connection	exists	were	to	increase,	our	operations,	costs	and	revenues	would	be	materially	and	adversely	affected.	We	do	not	maintain	any	significant	insurance	with respect	to	these	matters.

# The	bankruptcy	proceeding	of	our	Verestar	subsidiary	exposes	us	to	risks	and	uncertainties.

Our	wholly	owned	subsidiary,	Verestar,	Inc.,	filed	for	protection	under	Chapter	11	of	the	federal	bankruptcy	laws	on	December	22,	2003.	Verestar	was	reported	as a	discontinued	operation	in	December	2002	for	financial	statement	purposes	and,	as	of	the	date	of	the	bankruptcy	filing,	was	deconsolidated	for	financial	statement purposes.

If	Verestar	fails	to	honor	certain	of	its	contractual	obligations	because	of	its	bankruptcy	filing	or	otherwise,	claims	may	be	made	against	us	for	breaches	by Verestar	of	those	contracts	as	to	which	we	are	primarily	or	secondarily	liable	as	a	guarantor,	which	we	do	not	expect	will	exceed	$10.0	million.	In	addition,	Verestar's bankruptcy	estate	may	bring	certain	claims	against	us	or	seek	to	hold	us	liable	for	certain	transfers	made	by	Verestar	to	us	and/or	for	Verestar's	obligations	to	creditors under	various	equitable	theories	recognized	under	bankruptcy	law.	The	outcome	of	complex	litigation	(including	those	claims	which	may	be	asserted	against	us	by Verestar's	bankruptcy	estate)	cannot	be	predicted	with	certainty	and	is	dependent	upon	many	factors	beyond	our	control.	Finally,	we	will	incur	additional	costs	in connection	with	our	involvement	in	the	reorganization	or	liquidation	of	Verestar's	business.

# ITEM	2.				PROPERTIES

Our	principal	offices	are	located	in	Boston,	Southborough	and	Woburn,	Massachusetts;	Atlanta,	Georgia;	Mexico	City,	Mexico;	and	Sao	Paulo,	Brazil.	Details	of each	of	these	offices	are	provided	below:

(1) Of	the	total	30,000	square	feet	in	our	current	leasehold,	we	are	consolidating	our	operations	into	20,000	square	feet	during	2004	and	are	currently	offering	the remaining	10,000	square	feet	for	re-lease	or	sub-lease.

We	have	seven	additional	area	offices	in	the	United	States	through	which	our	tower	leasing	and	services	businesses	are	operated	on	a	local	basis.	These	offices are	located	in	Ontario,	California;	Marietta,	Georgia;	Crest	Hill,	Illinois;	Worcester,	Massachusetts;	New	Hudson,	Michigan;	Mount	Pleasant,	South	Carolina;	and	Kent, Washington.	In	addition,	we	maintain	smaller	field	offices	within	each	of	the	areas	at	locations	as	needed	from	time	to	time.

Our	interests	in	individual	communications	sites	are	comprised	of	a	variety	of	fee	and	leasehold	interests	in	land	and/or	buildings	(rooftops).	Of	the	approximately 15,000	towers	comprising	our	portfolio,	approximately	16%	are	located	on	parcels	of	land	that	we	own	and	approximately	84%	are	either	located	on	parcels	of	land	that have	leasehold	interests	created	by	long-term	lease	agreements,	private	easements	and	easements,	licenses	or	rights-of-way	granted	by	government	entities,	or	are	sites that	we	manage	for	third	parties.	In	rural	areas,	a	wireless	communications	site	typically	consists	of	a	10,000	square	foot	tract,	which	supports	towers,	equipment	shelters and	guy	wires	to	stabilize	the	structure,	whereas	a	broadcast	tower	site	typically	consists	of	a	tract	of	land	of	up	to	twenty-acres.	Less	than	2,500	square	feet	are	required for	a	monopole	or	self-supporting	tower	structure	of	the	kind	typically	used	in	metropolitan	areas	for	wireless	communication	tower	sites.	Land	leases	generally	have	an initial	term	of	five	years	with	three	or	four	additional	automatic	renewal	periods	of	five	years,	for	a	total	of	twenty	to	twenty-five	years.

Pursuant	to	our	credit	facilities,	our	lenders	have	liens	on,	among	other	things,	all	towers,	leasehold	interests,	tenant	leases	and	contracts	relating	to	the management	of	towers	for	others.

We	believe	that	our	owned	and	leased	facilities	are	suitable	and	adequate	to	meet	our	anticipated	needs.

# ITEM	3.				LEGAL	PROCEEDINGS

We	periodically	become	involved	in	various	claims	and	lawsuits	that	are	incidental	to	our	business.	We	believe,	after	consultation	with	counsel,	that	no	matters currently	pending	would,	in	the	event	of	an	adverse	outcome,	have	a	material	impact	on	our	consolidated	financial	position,	results	of	operations	or	liquidity.

# ITEM	4.				SUBMISSION	OF	MATTERS	TO	A	VOTE	OF	SECURITY	HOLDERS

None.

# PART	II

# ITEM	5.				MARKET	FOR	REGISTRANT'S	COMMON	EQUITY	AND	RELATED	STOCKHOLDER

# MATTERS

The	following	table	presents	reported	high	and	low	sale	prices	of	our	Class	A	common	stock	on	the	Composite	Tape	of	the	New	York	Stock	Exchange	(NYSE) for	the	years	2003	and	2002.

| 2003 | High | Low |
| :--- | :--- | :--- |
| Quarter\tended\tMarch\t31 | $5.94 | $3.55 |
| Quarter\tended\tJune\t30 | 9.90 | \t 5.41 |
| Quarter\tended\tSeptember\t30 | \t 11.74 | \t 8.73 |
| Quarter\tended\tDecember\t31 | \t 12.00 | \t 9.59 |
| 2002 |  |  |
| Quarter\tended\tMarch\t31 | \t 10.40 | \t 3.50 |
| Quarter\tended\tJune\t30 | 5.65 | \t 2.70 |
| Quarter\tended\tSeptember\t30 | 3.55 | \t 1.10 |
| Quarter\tended\tDecember\t31 | 4.29 | \t 0.60 |

On	March	5,	2004,	the	closing	price	of	our	Class	A	common	stock	was	$11.79	as	reported	on	the	NYSE.

The	outstanding	shares	of	common	stock	and	number	of	registered	holders	as	of	December	31,	2003	were	as	follows:

|  | A | B | C |
| :--- | :--- | :--- | :--- |
| Outstanding\tshares | 211,710,437 | 6,969,529 | 1,224,914 |
| Registered\tholders | 805 | 49 | 1 |

In	February	2004,	all	outstanding	shares	of	Class	B	common	stock	were	converted	into	shares	of	Class	A	common	stock	on	a	one-for-one	basis	pursuant	to	the occurrence	of	the	"Dodge	Conversion	Event"	as	defined	in	our	charter.	Our	charter	prohibits	the	future	issuance	of	shares	of	Class	B	common	stock.	Also	in	February 2004,	all	outstanding	shares	of	Class	C	common	stock	were	converted	into	shares	of	Class	A	common	stock	on	a	one-for-one	basis.	Our	charter	permits	the	issuance	of shares	of	Class	C	common	stock	in	the	future.

The	information	under	"Securities	Authorized	for	Issuance	Under	Equity	Compensation	Plans"	from	the	Definitive	Proxy	Statement	is	hereby	incorporated	by reference	into	Item	12	of	this	annual	report.

# Dividends

We	have	never	paid	a	dividend	on	any	class	of	our	common	stock.	We	anticipate	that	we	will	retain	future	earnings,	if	any,	to	service	our	debt	and	to	fund	the development	and	growth	of	our	business	and,	therefore,	do	not	anticipate	paying	cash	dividends	on	shares	of	our	common	stock	in	the	foreseeable	future.	Our	borrower subsidiaries	are	prohibited	under	the	terms	of	their	credit	facilities	from	paying	cash	dividends	or	making	other	distributions	on,	or	making	redemptions,	purchases	or other	acquisitions	of,	their	capital	stock	or	other	equity	interests,	including	preferred	stock,	except	that,	beginning	on	April	15,	2004,	if	no	default	exists	or	would	be created	thereby	under	the	credit	facilities,	our	borrower	subsidiaries	may	pay	cash	dividends	or	make	other	distributions	to	the	extent	that	restricted	payments,	as	defined in	the	credit	facilities,	do	not	exceed	50%	of	excess	cash	flow,	as	defined	in	the	credit	facilities,	for	the	preceding	calendar	year.	The	12.25%	senior	subordinated	discount notes	due	2008	and	the	7.25%	senior	subordinated	notes	due	2011	of	American	Towers,	Inc.	(ATI),	our

principal	operating	subsidiary,	impose	similar	limitations	on	the	ability	of	ATI	and	certain	of	our	subsidiaries	that	have	guaranteed	these	notes	(sister	guarantors)	to	pay dividends	and	make	other	distributions.	The	indentures	for	our	9	3/8%	senior	notes	due	2009	and	our	7.50%	notes	due	2012	also	impose	significant	limitations	on	the payment	of	dividends	by	us	to	our	stockholders.

# ITEM	6.				SELECTED	FINANCIAL	DATA

We	have	derived	the	following	selected	financial	data	from	our	audited	consolidated	financial	statements,	certain	of	which	are	included	in	this	Annual	Report	on Form	10-K.	You	should	read	the	selected	financial	data	in	conjunction	with	our	"Management's	Discussion	and	Analysis	of	Financial	Condition	and	Results	of Operations,"	and	our	audited	consolidated	financial	statements	and	the	related	notes	to	those	consolidated	financial	statements	included	in	this	annual	report	on	Form 10-K.

Our	continuing	operations	are	reported	in	two	segments,	rental	and	management	and	network	development	services.	In	accordance	with	generally	accepted accounting	principles,	the	consolidated	statements	of	operations	for	all	periods	presented	in	this	"Selected	Financial	Data"	have	been	adjusted	to	reflect	certain businesses	as	discontinued	operations	(see	note	2	to	our	consolidated	financial	statements).

Year-to-year	comparisons	are	significantly	affected	by	our	acquisitions,	dispositions	and,	to	a	lesser	extent,	construction	of	towers.	Our	principal	acquisitions	and dispositions	are	described	in	"Business—Recent	Transactions"	and	in	the	notes	to	our	consolidated	financial	statements.

|  | 2003 | 2002 | 2001 | 2000 | 1999 |
| :--- | :--- | :--- | :--- | :--- | :--- |
|  |  |  | (In\tthousands,\texcept\tper\tshare\tdata) |  |  |
| Statement\tof\tOperations\tData: |  |  |  |  |  |
| Revenues: |  |  |  |  |  |
| Rental\tand\tmanagement | $619,697 | $544,906 | $431,051 | $269,282 | $131,245 |
| Network\tdevelopment\tservices | 95,447 | 130,176 | 223,926 | 158,201 | 67,039 |
| Total\toperating\trevenues | 715,144 | 675,082 | 654,977 | 427,483 | 198,284 |
| Operating\texpenses: |  |  |  |  |  |
| Rental\tand\tmanagement | 222,724 | 226,786 | 209,923 | 135,891 | 60,915 |
| Network\tdevelopment\tservices | 88,943 | 118,591 | 199,568 | 140,758 | 55,217 |
| Depreciation\tand\tamortization\t(1) | 313,465 | 312,866 | 334,917 | 236,334 | 116,242 |
| Corporate\tgeneral,\tadministrative\tand\tdevelopment |  |  |  |  |  |
| expense | 26,867 | 30,229 | 34,310 | 29,378 | 10,542 |
| Impairments,\tnet\tloss\ton\tsale\tof\tlong-lived\tassets\tand |  |  |  |  |  |
| restructuring\texpense | 31,656 | 101,372 | 79,496 |  |  |
| Total\toperating\texpenses | 683,655 | 789,844 | 858,214 | 542,361 | 242,916 |
| Operating\tincome\t(loss)\tfrom\tcontinuing\toperations | 31,489 | (114,762) | (203,237) | (114,878) | (44,632) |
| Interest\tincome,\tTV\tAzteca,\tnet | 14,222 | 13,938 | 14,377 | 12,679 | 1,856 |
| Interest\tincome | 5,255 | 3,496 | 28,372 | 15,948 | 17,850 |
| Interest\texpense | (279,875) | (254,446) | (267,199) | (151,702) | (27,274) |
| Loss\ton\tretirement\tof\tlong-term\tobligations | (46,197) | (8,869) | (26,336) | (24,198) |  |
| (Loss)\tincome\ton\tinvestments\tand\tother\texpense | (29,819) | (25,559) | (38,795) | (2,465) | 74 |
| Minority\tinterest\tin\tnet\tearnings\tof\tsubsidiaries | (3,703) | (2,118) | (318) | (202) | (142) |
| Loss\tfrom\tcontinuing\toperations\tbefore\tincome\ttaxes | (308,628) | (388,320) | (493,136) | (264,818) | (52,268) |
| Income\ttax\tbenefit | 66,137 | 67,783 | 102,032 | 72,795 | 4,479 |
| Loss\tfrom\tcontinuing\toperations\tbefore\tcumulative\teffect\tof\nchange\tin\taccounting\tprinciple | $(242,491) | $(320,537) | $(391,104) | $(192,023) | $(47,789) |
| Basic\tand\tdiluted\tloss\tper\tcommon\tshare\tfrom\tcontinuing |  |  |  |  |  |
| operations\tbefore\tcumulative\teffect\tof\tchange\tin |  |  |  |  |  |
| accounting\tprinciple\t(2) | $(1.17) | $(1.64) | $(2.04) | $(1.14) | $(0.32) |
| Weighted\taverage\tcommon\tshares\toutstanding\t(2) | 208,098 | 195,454 | 191,586 | 168,715 | 149,749 |
| Other\tOperating\tData: |  |  |  |  |  |
| Ratio\tof\tearnings\tto\tfixed\tcharges\t(3) | — | — | — | — | — |

|  | 2003 | 2002 | 2001 | 2000 | 1999 |
| :--- | :--- | :--- | :--- | :--- | :--- |
|  |  |  | (In\tthousands) |  |  |
| Balance\tSheet\tData: |  |  |  |  |  |
| Cash\tand\tcash\tequivalents\t(including\trestricted\tcash\tand |  |  |  |  |  |
| investments)\t(4) | $275,501 | $127,292 | $130,029 | $128,074 | $25,212 |
| Property\tand\tequipment,\tnet | 2,546,525 | 2,694,999 | 3,287,573 | 2,296,670 | 1,092,346 |
| Total\tassets | 5,332,488 | 5,662,203 | 6,829,723 | 5,660,679 | 3,018,866 |
| Long-term\tobligations,\tincluding\tcurrent\tportion | 3,361,225 | 3,448,514 | 3,561,960 | 2,468,223 | 740,822 |
| Total\tstockholders'\tequity | 1,711,547 | 1,740,323 | 2,869,196 | 2,877,030 | 2,145,083 |

(1) As	of	January	1,	2002,	we	adopted	the	provisions	of	SFAS	No.	142,	"Goodwill	and	Other	Intangible	Assets,"	(SFAS	No.	142).	Accordingly,	we	ceased	amortizing goodwill	on	January	1,	2002.	The	statements	of	operations	for	all	periods	presented	except	for	the	years	ended	December	31,	2003	and	2002	include	goodwill amortization.	The	adoption	of	SFAS	No.	142	reduced	amortization	expense	in	continuing	operations	by	approximately	$67.6	million	for	the	years	ended December	31,	2003	and	2002.

(2) We	computed	basic	and	diluted	loss	per	common	share	from	continuing	operations	before	cumulative	effect	of	change	in	accounting	principle	using	the	weighted average	number	of	shares	outstanding	during	each	period	presented.	We	have	excluded	shares	issuable	upon	exercise	of	options	and	other	common	stock equivalents	from	the	computations,	as	their	effect	is	anti-dilutive.

(3) For	purposes	of	calculating	this	ratio,	"earnings"	consists	of	loss	from	continuing	operations	before	income	taxes,	fixed	charges	(excluding	interest	capitalized), minority	interest	in	net	earnings	of	subsidiaries,	losses	from	equity	investments	and	amortization	of	interest	capitalized.	"Fixed	charges"	consist	of	interest expensed	and	capitalized,	amortization	of	debt	discount	and	related	issuance	costs	and	the	component	of	rental	expense	associated	with	operating	leases	believed by	management	to	be	representative	of	the	interest	factor	thereon.	We	had	a	deficiency	in	earnings	to	fixed	charges	in	each	period	as	follows	(in	thousands): 2003–$301,202;	2002–$380,745;	2001–$497,488;	2000–$272,783;	and	1999–$55,299.

(4) Includes,	as	of	December	31,	2003,	approximately	$170.0	million	of	restricted	funds	to	be	held	in	escrow	to	pay,	repurchase,	redeem	or	retire	certain	of	our outstanding	debt.	Any	balance	remaining	on	June	30,	2004	from	the	January	2003	12.25%	senior	subordinated	discount	notes	offering	must	be	used	to	prepay	a portion	of	the	term	loans	under	our	credit	facilities.	Includes,	as	of	December	31,	2001	and	2000,	approximately	$94.1	million	and	$46.0	million,	respectively,	of restricted	funds	required	under	our	credit	facilities	to	be	held	in	escrow	through	August	2002	to	fund	scheduled	interest	payments	on	our	outstanding	senior	and convertible	notes.

# ITEM	7.				MANAGEMENT'S	DISCUSSION	AND	ANALYSIS	OF	FINANCIAL	CONDITION	AND

# RESULTS	OF	OPERATIONS

The	discussion	and	analysis	of	our	financial	condition	and	results	of	operations	that	follows	are	based	upon	our	consolidated	financial	statements,	which	have been	prepared	in	accordance	with	accounting	principles	generally	accepted	in	the	United	States.	The	preparation	of	these	financial	statements	requires	us	to	make estimates	and	judgments	that	affect	the	reported	amounts	of	assets	and	liabilities,	revenues	and	expenses,	and	the	related	disclosures	in	our	financial	statements.	Actual results	may	differ	significantly	from	these	estimates	under	different	assumptions	or	conditions.	This	discussion	should	be	read	in	conjunction	with	our	consolidated financial	statements	and	the	accompanying	notes	thereto	and	the	information	set	forth	under	the	heading	"Critical	Accounting	Policies	and	Estimates"	on	page	38.

Our	continuing	operations	are	reported	in	two	segments,	rental	and	management	and	network	development	services.	Management	focuses	on	segment	profit	(loss) as	a	means	to	measure	operating	performance	in	these	business	segments.	We	define	segment	operating	profit	(loss)	as	segment	revenues	less	segment	operating expenses	excluding	depreciation	and	amortization;	corporate	general,	administrative	and	development	expense;	and	impairments,	net	loss	on	sale	of	long-lived	assets and	restructuring	expense.	Segment	profit	(loss)	for	the	rental	and	management	segment	includes	interest	income,	TV	Azteca,	net	(see	note	16	to	our	consolidated financial	statements).	In	accordance	with	generally	accepted	accounting	principles,	the	consolidated	statements	of	operations	for	periods	presented	in	this "Management's	Discussion	and	Analysis	of	Financial	Condition	and	Results	of	Operations"	have	been	adjusted	to	reflect	certain	businesses	as	discontinued	operations (see	note	2	to	our	consolidated	financial	statements).

# Executive	Overview

Our	principal	operating	segment	is	our	rental	and	management	segment,	which	accounted	for	approximately	86.7%	and	80.7%	of	our	total	revenues	and approximately	98.4%	and	96.6%	of	our	segment	operating	profit	for	the	years	ending	December	31,	2003	and	2002,	respectively.	The	primary	factors	affecting	the stability	and	growth	of	our	revenues	and	cash	flows	for	this	segment	are	our	recurring	revenues	from	existing	tenant	leases	and	the	contractual	escalators	in	those	leases, leasing	additional	space	on	our	existing	towers,	and	acquiring	and	building	additional	tower	sites.	We	continue	to	believe	that	our	leasing	revenue	is	likely	to	grow	more rapidly	than	revenue	from	our	network	development	services	segment	due	to	our	strategic	focus	on	our	rental	and	management	segment,	the	continuing	growth	in	the use	of	wireless	communications	services	and	our	ability	to	utilize	existing	tower	capacity.	In	addition,	we	believe	the	majority	of	our	leasing	activity	will	continue	to come	from	broadband-services	customers.

The	majority	of	our	tenant	leases	with	wireless	carriers	are	for	an	initial	term	of	five	to	ten	years	(fifteen	to	twenty	for	broadcast	tenants).	Accordingly,	a significant	majority	of	the	revenue	generated	by	our	rental	and	management	segment	as	of	the	end	of	December	2003	is	recurring	revenue	that	we	should	continue	to receive	in	future	periods.	In	addition,	most	of	our	leases	have	provisions	that	periodically	increase	the	rent	due	under	the	lease.	These	contractual	escalators	are	typically annual	and	are	based	on	a	fixed	percentage	(generally	three	to	five	percent),	inflation,	or	a	fixed	percentage	plus	inflation.	Rate	increases	based	on	fixed	escalation clauses	are	recognized	on	a	straight-line	basis	over	the	terms	of	the	applicable	agreement.

The	primary	factor	affecting	our	ability	to	lease	additional	space	on	our	existing	towers	is	the	rate	at	which	wireless	carriers	choose	to	deploy	capital	to	improve and	expand	their	networks.	This	rate,	in	turn,	is	influenced	by	the	growth	of	wireless	communications	services	and	the	infrastructure	needed	to	support	these	services,	the financial	performance	of	our	customers	and	their	access	to	capital,	and	general	economic	conditions.	In	2003,	our	revenue	growth	on	towers	that	existed	during	the	entire period	beginning	January	1,	2002	and	ending	December	31,	2003,	was	approximately	$50.0	million.	Based	on	our	understanding	of	our	customers'	capital	spending	and network	development	plans,	we	do	not	expect	these	trends	will	change	materially	in	2004.

In	2002	and	2003,	we	acquired	or	constructed	580	and	618	towers,	respectively.	Because	of	the	nature	of	our	recurring	revenues	described	above,	our	results	of operations	only	reflect	revenues	generated	by	the	acquired	and	newly	constructed	tower	sites	following	their	respective	dates	of	acquisition	or	construction,	which	affects year-to-year	comparisons.	For	the	year	ending	December	31,	2003,	approximately	$28.0	million	of	our	revenue	was	attributable	to	towers	that	we	acquired	or constructed	in	2002,	and	approximately	$16.0	million	of	our	revenue	was	attributable	to	towers	that	we	acquired	or	constructed	in	2003.

Our	rental	and	management	segment	operating	expenses	are	comprised	of	two	major	categories:	direct	tower	level	expenses	and	allocable	selling,	general	and administrative	expenses.	Our	direct	tower	level	expenses	consist	primarily	of	ground	rent,	maintenance,	taxes	and	utilities.	Because	our	operating	expenses	generally	do not	increase	significantly	when	we	add	additional	customers	on	a	tower	site,	leasing	space	to	new	customers	on	our	existing	sites	provides	significant	incremental	cash flow.	Our	profit	margin	growth	is,	therefore,	directly	related	to	the	number	of	new	tenants	added	to	our	existing	tower	sites	and	the	related	rental	revenue	generated	in	a particular	period.

Our	selling,	general	and	administrative	expenses	have	two	major	components.	The	first	component	consists	of	expenses	necessary	to	support	our	site	leasing	and network	development	services	such	as	sales	and	property	management	functions.	The	second	component	consists	of	expenses	incurred	to	support	all	of	our	operations, such	as	legal,	accounting,	human	resources	and	other	administrative	support.	In	connection	with	organizational	initiatives	in	2002	and	2003	to	manage	our	operations more	efficiently,	these	expenses	have	decreased	over	these	periods,	and	we	expect	them	to	be	relatively	stable	in	2004.

|  | Year	Ended	December	31,<br>2003 | 2002 | Amount	of<br>Increase<br>(Decrease) | Percent<br>Increase<br>(Decrease) |
| :--- | :--- | :--- | :--- | :--- |
|  |  | (In\tthousands) |  |  |
| REVENUES: |  |  |  |  |
| Rental\tand\tmanagement | $619,697 | $544,906 | $74,791 | 14% |
| Network\tdevelopment\tservices | 95,447 | 130,176 | (34,729) | (27) |
| Total\trevenues | 715,144 | 675,082 | 40,062 | 6 |
| OPERATING\tEXPENSES: |  |  |  |  |
| Rental\tand\tmanagement | 222,724 | 226,786 | (4,062) | (2) |
| Network\tdevelopment\tservices | 88,943 | 118,591 | (29,648) | (25) |
| Depreciation\tand\tamortization | 313,465 | 312,866 | 599 | — |
| Corporate\tgeneral,\tadministrative\tand\tdevelopment\texpense | 26,867 | 30,229 | (3,362) | (11) |
| Impairments,\tnet\tloss\ton\tsale\tof\tlong-lived\tassets\tand\trestructuring\texpense | 31,656 | 101,372 | (69,716) | (69) |
| Total\toperating\texpenses | 683,655 | 789,844 | (106,189) | (13) |
| OTHER\tINCOME\t(EXPENSE): |  |  |  |  |
| Interest\tincome,\tTV\tAzteca,\tnet | 14,222 | 13,938 | 284 | 2 |
| Interest\tincome | 5,255 | 3,496 | 1,759 | 50 |
| Interest\texpense | (279,875) | (254,446) | 25,429 | 10 |
| Loss\ton\tretirement\tof\tlong-term\tobligations | (46,197) | (8,869) | 37,328 | 421 |
| Loss\ton\tinvestments\tand\tother\texpense | (29,819) | (25,559) | 4,260 | 17 |
| Minority\tinterest\tin\tnet\tearnings\tof\tsubsidiaries | (3,703) | (2,118) | 1,585 | 75 |
| Income\ttax\tbenefit | 66,137 | 67,783 | (1,646) | (2) |
| Loss\tfrom\tdiscontinued\toperations,\tnet | (60,926) | (258,724) | (197,798) | (76) |
| Cumulative\teffect\tof\tchange\tin\taccounting\tprinciple,\tnet | (562,618) | (562,618) | (562,618) | N/A |
| Net\tloss | $(303,417) | $(1,141,879) | $(838,462) | (73)% |

# Total	Revenues

Total	revenues	for	the	year	ended	December	31,	2003	were	$715.1	million,	an	increase	of	$40.1	million	from	the	year	ended	December	31,	2002.	The	increase resulted	from	an	increase	in	rental	and	management	revenues	of	$74.8	million,	offset	by	a	decrease	in	network	development	services	revenue	of	$34.7	million.

# Rental	and	Management	Revenue

Rental	and	management	revenue	for	the	year	ended	December	31,	2003	was	$619.7	million,	an	increase	of	$74.8	million	from	the	year	ended	December	31, 2002.	The	increase	resulted	primarily	from	adding	additional	broadband	tenants	to	towers	that	existed	as	of	January	1,	2002	and,	to	a	lesser	extent,	from	revenue generated	on	the	approximately	1,200	towers	acquired	and/or	constructed	subsequent	to	January	1,	2002.

We	continue	to	believe	that	our	leasing	revenue,	which	drives	our	core	business,	is	likely	to	grow	more	rapidly	than	revenue	from	our	network	development services	segment	due	to	our	expected	increase	in	utilization	of	existing	tower	capacity.	In	addition,	we	believe	that	the	majority	of	our	leasing	activity	will	continue	to come	from	broadband	type	customers.

# Network	Development	Services	Revenue

Network	development	services	revenue	for	the	year	ended	December	31,	2003	was	$95.4	million,	a	decrease	of	$34.7	million	from	the	year	ended	December	31, 2002.	The	decline	in	revenues	during	2003	resulted	primarily	from	decreases	in	revenue	related	to	construction	management,	installation	and	tower	maintenance services,	resulting	from	lower	levels	of	construction	activity	and	reduced	demand	for	related	services	in	the	wireless	telecommunications	industry.

# Total	Operating	Expenses

Total	operating	expenses	for	the	year	ended	December	31,	2003	were	$683.7	million,	a	decrease	of	$106.2	million	from	the	year	ended	December	31,	2002.	The principal	components	of	the	decrease	were	attributable	to	expense	decreases	in	our	network	development	services	segment	of	$29.6	million	and	a	decrease	in impairments,	net	loss	on	sale	of	long-lived	assets	and	restructuring	expense	of	$69.7	million.	The	remaining	components	of	the	decrease	were	attributable	to	decreases	in expenses	within	our	rental	and	management	segment	of	$4.1	million	and	a	decrease	in	corporate	general,	administrative	and	development	expense	of	$3.4	million.

# Rental	and	Management	Expense/Segment	Profit

Rental	and	management	expense	for	the	year	ended	December	31,	2003	was	$222.7	million,	a	decrease	of	$4.1	million	from	the	year	ended	December	31,	2002. The	decrease	resulted	primarily	from	a	decrease	in	certain	rental	and	management	segment	overhead	costs,	partially	offset	by	an	increase	in	tower	expenses	related	to the	1,200	towers	we	have	acquired/constructed	since	January	1,	2002	due	to	their	inclusion	in	our	results	for	a	full	year	in	2003.

Rental	and	management	segment	profit	for	the	year	ended	December	31,	2003	was	$411.2	million,	an	increase	of	$79.1	million	from	the	year	ended	December 31,	2002.	The	increase	resulted	primarily	from	incremental	revenues	and	operating	profit	from	adding	additional	broadband	tenants	to	existing	towers	and	newly acquired	and/or	constructed	towers,	coupled	with	a	net	reduction	in	tower	expenses,	as	discussed	above.

# Network	Development	Services	Expense/Segment	Profit

Network	development	services	expense	for	the	year	ended	December	31,	2003	was	$88.9	million,	a	decrease	of	$29.6	million	from	the	year	ended	December	31, 2002.	The	majority	of	the	decrease	was	due	to	an	overall	decline	in	demand	for	the	services	performed	by	this	segment,	as	discussed	above,	partially	offset	by	decreases in	overhead	and	related	infrastructure	costs.

Network	development	services	segment	profit	for	the	year	ended	December	31,	2003	was	$6.5	million,	a	decrease	of	$5.1	million	from	the	year	ended	December 31,	2002.	The	decrease	resulted	primarily	from	a	decline	in	revenue,	as	discussed	above,	partially	offset	by	expense	reductions,	as	discussed	above.

# Corporate	General,	Administrative	and	Development	Expense

Corporate	general,	administrative	and	development	expense	for	the	year	ended	December	31,	2003	was	$26.9	million,	a	decrease	of	$3.4	million	from	the	year ended	December	31,	2002.	The	decrease	resulted	primarily	from	a	decrease	in	development	expense	as	a	result	of	our	curtailed	acquisition	and	development	related activities.

# Impairments,	Net	Loss	on	Sale	of	Long-Lived	Assets	and	Restructuring	Expense

Impairments,	net	loss	on	sale	of	long-lived	assets	and	restructuring	expense	was	$31.7	million	for	the	year	ended	December	31,	2003.	During	the	year	ended December	31,	2003,	we	sold	approximately	300	non-core	towers	and	certain	other	non-core	assets	and	recorded	impairment	charges	to	write-down	certain	other	non- core	towers	and	assets.	As	a	result,	we	recorded	impairment	charges	and	net	loss	on	sale	of	long-lived	assets	of	approximately	$19.1	million.	We	also	wrote-off approximately	$9.2	million	of	construction-in-progress	costs,	primarily	associated	with	sites	we	no	longer	planned	to	build.	Lastly,	we	incurred	employee	separation costs	(primarily	associated	with	the	reorganization	of	certain	functions	in	our	rental	and	management	segment)	and	facility	closing	costs	aggregating	$3.4	million.

Impairments,	net	loss	on	sale	of	long-lived	assets	and	restructuring	expense	was	$101.4	million	for	the	year	ended	December	31,	2002.	During	the	year-ended December	31,	2002,	we	sold	approximately	720	non-core	towers	and	recorded	impairment	charges	to	write-down	certain	other	non-core	towers,	which	resulted	in aggregate	impairment	charges	and	net	losses	of	approximately	$46.8	million.	In	September	2002,	we	reduced	the	scope	of	our	new	tower	construction	and	build	plans for	the	remainder	of	2002	and	2003	and,	as	a	result,	we	wrote-off	approximately	$40.2	million	of	construction-in-progress	costs	for	the	year	ended	December	31,	2002 associated	with	sites	we	no	longer	planned	to	build.	Additionally,	in	the	latter	stages	of	2001	and	the	first	quarter	of	2002,	we	announced	a	restructuring	of	our organization	to	include	the	centralization	of	certain	operational	and	administrative	functions.	As	a	result	of	these	initiatives,	during	the	year	ended	December	31,	2002, we	incurred	employee	separation	costs	associated	with	the	termination	of	approximately	460	employees	(primarily	development	and	administrative),	as	well	as	costs associated	with	the	termination	of	lease	obligations	and	other	incremental	facility	closing	costs,	aggregating	$10.6	million.

# Interest	Income

Interest	income	for	the	year	ended	December	31,	2003	was	$5.3	million,	an	increase	of	$1.8	million	from	the	year	ended	December	31,	2002.	The	increase resulted	primarily	from	an	increase	in	interest	earned	on	restricted	cash	and	investments,	resulting	principally	from	our	12.25%	senior	subordinated	discount	notes offering	in	January	2003	and,	to	a	lesser	extent,	our	August	2003	equity	offering.

# Interest	Expense

Interest	expense	for	the	year	ended	December	31,	2003	was	$279.9	million,	an	increase	of	$25.4	million	from	the	year	ended	December	31,	2002.	The	increase resulted	primarily	from	the	following:	interest	expense	on	our	12.25%	senior	subordinated	discount	notes,	issued	in	January	2003;	our	3.25%	convertible	notes,	issued	in August	2003;	the	ATI	7.25%	senior	subordinated	notes,	issued	in	November	2003.	The	increase	was	partially	offset	by	a	net	decrease	in	interest	expense	on	our	credit facilities	as	a	result	of	repayments	made	during	2003	and,	to	a	lesser	extent,	lower	interest	rates.	The	increase	was	also	partially	offset	by	a	decrease	in	interest	expense on	our	2.25%	and	5.0%	convertible	notes	as	a	result	of	repurchases	made	during	2003	(as	discussed	below).

# Loss	on	Retirement	of	Long-Term	Obligations

During	the	year	ended	December	31,	2003,	we	amended	our	credit	facilities	and	made	certain	prepayments	and	unscheduled	principal	payments	on	the	term	loans thereunder,	which	collectively	reduced	the	borrowing	capacity	under	our	credit	facilities.	As	a	result,	we	recorded	an	aggregate	charge	of	approximately	$11.9	million related	to	the	write-off	of	deferred	financing	fees	associated	with	the	reduction	in	our	overall	borrowing	capacity.	We	also	repurchased	certain	of	our	2.25%	convertible and	5.0%	convertible	notes	(inclusive	of	the	cash	tender	offer	for	our	2.25%	convertible	notes	that	expired	on	October	22,	2003)	throughout	the	year.	As	a	result,	we incurred	an	aggregate	charge	of	approximately	$34.3	million,	which	primarily	represented	the	fair	market	value	of	the	shares	of	stock	issued	to	our	2.25%	convertible note	holders	in	excess	of	the	shares	originally	issuable	upon	conversion	of	the	notes,	offset	by	a	net	gain	on	the	repurchases	of	our	5.0%	convertible	notes.	The	total	of these	charges,	$46.2	million,	represents	our	loss	on	retirement	of	long-term	obligations	for	the	year	ended	December	31,	2003.

In	February	2002,	we	repaid	$95.0	million	outstanding	under	our	Mexican	credit	facility	with	borrowings	under	our	credit	facilities.	As	a	result	of	such repayment,	for	the	year	ended	December	31,	2002,	we	expensed	approximately	$1.7	million	of	deferred	financing	fees.	In	addition,	in	January	2002,	we	terminated	the $250.0	million	multi-draw	term	loan	C	component	of	our	credit	facilities	and	recorded	a	non-cash	charge	of	approximately	$7.2	million	related	to	the	write-off	of	related deferred	financing	fees.	The	total	of	these	charges,	$8.9	million,	represents	our	loss	on	retirement	of	long-term	obligations	for	the	year	ended	December	31,	2002.

# Loss	on	Investments	and	Other	Expense

Loss	on	investments	and	other	expense	for	the	year	ended	December	31,	2003	was	$29.8	million,	an	increase	of	$4.3	million	from	the	year	ended	December	31, 2002.	The	increase	resulted	primarily	from	fees	and	expenses	incurred	in	connection	with	a	financing	transaction	that	we	did	not	consummate	as	a	result	of	the	ATI 12.25%	senior	subordinated	discount	notes	offering.	This	increase	was	primarily	offset	by	decreased	foreign	currency	transaction	losses.	We	recorded	impairment charges	on	our	cost	and	equity	investments,	as	well	as	losses	on	our	equity	method	investments,	aggregating	$21.2	million	and	$20.3	million	for	the	years	ended December	31,	2003	and	2002,	respectively.

# Income	Tax	Benefit

The	income	tax	benefit	for	the	year	ended	December	31,	2003	was	$66.1	million,	a	decrease	of	$1.6	million	from	the	year	ended	December	31,	2002.	The effective	tax	rate	was	21.4%	for	the	year	ended	December	31,	2003,	as	compared	to	17.5%	for	the	year	ended	December	31,	2002.	The	primary	reason	for	the	increase	in the	effective	tax	rate	is	a	result	of	a	$27.5	million	valuation	allowance	that	we	recorded	in	2002	in	connection	with	our	tax	planning	strategy	to	carry	back	approximately $380.0	million	of	federal	net	operating	losses	generated	prior	to	2003.	This	strategy	resulted	in	the	filing	of	tax	refund	claims	with	the	IRS	in	2003.	In	June	2003,	we filed	an	income	tax	refund	claim	with	the	IRS	relating	to	carrying	back	net	operating	losses	that	we	generated	in	1998,	1999	and	2001.	We	filed	a	similar	claim	in October	2003,	with	respect	to	net	operating	losses	generated	in	2002.	We	anticipate	receiving	a	refund	of	approximately	$90.0	million	as	a	result	of	these	claims,	which will	monetize	a	portion	of	our	deferred	tax	asset.	We	estimate	recovery	of	these	amounts	within	one	to	three	years	of	the	dates	the	claims	were	filed	with	the	IRS.	There can	be	no	assurances,	however,	with	respect	to	the	specific	amount	and	timing	of	the	refund.	The	valuation	allowance	represents	the	estimated	lost	tax	benefit	and	costs incurred	in	connection	with	implementing	this	strategy.	This	increase	was	offset	in	part	by	an	increase	in	the	valuation	allowance	in	2003	for	capital	losses	and	non- deductible	losses	on	retirements	of	our	convertible	notes.

The	effective	tax	rate	on	loss	from	continuing	operations	for	the	year	ended	December	31,	2003	differs	from	the	federal	statutory	rate	due	primarily	to	valuation allowances	related	to	our	capital	losses,	foreign	items	and	non-deductible	losses	on	retirements	of	our	convertible	notes.	The	effective	tax	rate	on	loss	from	continuing operations	for	the	year	ended	December	31,	2002	differs	from	the	federal	statutory	rate	due	primarily	to	valuation	allowances	related	to	our	capital	losses,	foreign	items and	the	valuation	allowance	recorded	in	connection	with	our	tax	planning	strategy	discussed	above.

SFAS	No.	109,	"Accounting	for	Income	Taxes,"	requires	that	we	record	a	valuation	allowance	when	it	is	"more	likely	than	not	that	some	portion	or	all	of	the deferred	tax	assets	will	not	be	realized."	At	December	31,	2003,	we	have	provided	a	valuation	allowance	of	approximately	$156.7	million	primarily	related	to	net	state deferred	tax	assets,	capital	loss	carryforwards	and	the	lost	tax	benefit	and	costs	associated	with	the	tax	refund	claims.	We	have	not	provided	a	valuation	allowance	for	the remaining	deferred	tax	assets,	primarily	our	tax	refund	claims	and	our	federal	net	operating	loss	carryforwards,	as	management	believes	that	we	will	be	successful	with our	tax	refund	claims	and	will	have	sufficient	time	to	realize	these	federal	net	operating	loss	carryforwards	during	the	twenty-year	tax	carryforward	period.

We	intend	to	recover	a	portion	of	our	deferred	tax	asset	through	our	tax	refund	claims	discussed	above.	The	recoverability	of	our	remaining	net	deferred	tax	asset has	been	assessed	utilizing	stable	state	(no	growth)	projections	based	on	our	current	operations.	The	projections	show	a	significant	decrease	in	depreciation	and	interest expense	in	the	later	years	of	the	carryforward	period	as	a	result	of	a	significant	portion	of	our	assets	being	fully	depreciated	during	the	first	fifteen	years	of	the carryforward	period	and	debt	repayments	reducing	interest	expense.	Accordingly,	the	recoverability	of	our	net	deferred	tax	asset	is	not	dependent	on	material improvements	to	operations,	material	asset	sales	or	other	non-routine	transactions.	Based	on	our	current	outlook	of	future	taxable	income	during	the	carryforward	period, management	believes	that	our	net	deferred	tax	asset	will	be	realized.	The	realization	of	our	deferred	tax	assets	as	of	December	31,	2003	will	be	dependent	upon	our ability	to	generate	approximately	$1.0	billion	in	taxable	income	from	January	1,	2004	to	December	31,	2023.	If	we	are	unable	to	generate	sufficient	taxable	income	in the	future,	or	carry	back	losses,	as	described	below,	we	will	be	required	to	reduce	our	net	deferred	tax	asset	through	a	charge	to	income	tax	expense,	which	would	result in	a	corresponding	decrease	in	stockholders'	equity.

# Loss	from	Discontinued	Operations,	Net

In	December	2002,	we	committed	to	a	plan	to	sell	Verestar	by	December	31,	2003.	In	December	2003,	Verestar	filed	for	bankruptcy	protection	and	ceased	to	be included	in	the	accompanying	consolidated	financial	statements.	In	August	2003,	we	consummated	the	sale	of	Galaxy.	In	June	2003,	we	committed	to	a	plan	to	sell Kline	by	June	30,	2004.	In	May	2003,	we	consummated	the	sale	of	an	office	building	in	Westwood,	Massachusetts.	In	February	2003,	pursuant	to	our	original	plan	to sell	Verestar,	we	sold	MTN,	a	subsidiary	of	Verestar.	In	January	2003,	we	sold	Flash	Technologies.	In	March	2003,	we	consummated	the	sale	of	an	office	building	in Schaumburg,	Illinois.	In	December	2002,	we	consummated	the	sale	of	the	building	in	Boston,	Massachusetts	where	we	maintain	our	corporate	headquarters.	Finally,	in July	2002,	we	consummated	the	sale	of	MTS	Components.	Accordingly,	we	have	presented	the	results	of	these	operations	(including	those	of	Verestar	through	the	date of	the	bankruptcy	filing),	approximately	$(12.5)	million	and	$(245.2)	million,	net	of	tax,	in	loss	from	discontinued	operations,	net,	in	the	accompanying	consolidated statements	of	operations	for	the	years	ended	December	31,	2003	and	2002,	respectively.

In	addition	to	the	above,	loss	from	discontinued	operations,	net,	for	the	year	ended	December	31,	2003	includes	the	following:	(a)	an	aggregate	impairment charge	of	$26.5	million	to	reduce	the	carrying	amount	of	our	investment	in	Verestar	to	zero	and	to	record	our	estimate	of	costs	that	we	may	incur	under	certain	of Verestar's	contracts	for	which	we	are	primarily	or	secondarily	liable	as	a	guarantor	as	of	December	31,	2003;	(b)	an	aggregate	non-cash	impairment	charge	of	$14.6 million	to	reduce	the	carrying	value	of	Kline's	net	assets	to	the	estimated	proceeds	expected	upon	disposal;	(c)	a	$2.4	million	net	loss	on	the	disposal	of	Galaxy;	(d)	a $3.6	million	net	loss	on	the	disposal	of	the	office	building	in	Westwood,	Massachusetts;	(e)	a	$0.1	million	net	gain	on	the	sale	of	Flash	Technologies;	and	(f)	a	$0.1 million	net	loss	on	the	sale	of	the	office	building	in	Schaumberg,	Illinois.	Loss	from	discontinued	operations,	net,	for	the	year	ended	December	31,	2002	includes	an aggregate	net	loss	on	our	disposition	of	MTS	Components	and	two	office	buildings	of	approximately	$13.5	million.

As	of	December	31,	2003,	the	disposal	of	our	Kline	business	was	still	a	pending	transaction.	In	March	2004,	we	sold	substantially	all	the	net	assets	of	Kline	and expect	to	sell	the	remaining	assets	by	June	30,	2004.

# Cumulative	Effective	of	Change	in	Accounting	Principle,	Net

As	of	January	1,	2002,	we	adopted	the	provisions	of	SFAS	No.	142	"Goodwill	and	Other	Intangible	Assets."	As	a	result,	we	recognized	a	$562.6	million	non-cash charge	(net	of	a	tax	benefit	of	$14.4	million)	as	the	cumulative	effect	of	change	in	accounting	principle	related	to	the	write-down	of	goodwill	to	its	fair	value.	The	non- cash	charge	was	comprised	of	goodwill	within	our	former	satellite	and	fiber	network	access	services	segment	($189.3	million)	and	network	development	services segment	($387.8	million).	In	accordance	with	the	provisions	of	SFAS	No.	142,	the	charge	is	reflected	as	of	January	1,	2002	and	included	in	our	results	of	operations	for the	year	ended	December	31,	2002.

|  | Year	Ended	December	31,<br>2002 | 2001 | Amount	of<br>Increase<br>(Decrease) | Percent<br>Increase<br>(Decrease) |
| :--- | :--- | :--- | :--- | :--- |
|  |  | (In\tthousands) |  |  |
| REVENUES: |  |  |  |  |
| Rental\tand\tmanagement | $544,906 | $431,051 | $113,855 | 26% |
| Network\tdevelopment\tservices | 130,176 | 223,926 | (93,750) | (42) |
| Total\trevenues | 675,082 | 654,977 | 20,105 | 3 |
| OPERATING\tEXPENSES: |  |  |  |  |
| Rental\tand\tmanagement | 226,786 | 209,923 | 16,863 | 8 |
| Network\tdevelopment\tservices | 118,591 | 199,568 | (80,977) | (41) |
| Depreciation\tand\tamortization | 312,866 | 334,917 | (22,051) | (7) |
| Corporate\tgeneral,\tadministrative\tand\tdevelopment\texpense | 30,229 | 34,310 | (4,081) | (12) |
| Impairments,\tnet\tloss\ton\tsale\tof\tlong-lived\tassets\tand\trestructuring\texpense | 101,372 | 79,496 | 21,876 | 28 |
| Total\toperating\texpenses | 789,844 | 858,214 | (68,370) | (8) |
| OTHER\tINCOME\t(EXPENSE): |  |  |  |  |
| Interest\tincome,\tTV\tAzteca,\tnet | 13,938 | 14,377 | (439) | (3) |
| Interest\tincome | 3,496 | 28,372 | (24,876) | (88) |
| Interest\texpense | (254,446) | (267,199) | (12,753) | (5) |
| Loss\ton\tinvestments\tand\tother\texpense | (25,559) | (38,795) | (13,236) | (34) |
| Loss\ton\tretirement\tof\tlong-term\tobligations | (8,869) | (26,336) | (17,467) | (66) |
| Minority\tinterest\tin\tnet\tearnings\tof\tsubsidiaries | (2,118) | (318) | 1,800 | 566 |
| Income\ttax\tbenefit | 67,783 | 102,032 | (34,249) | (34) |
| Loss\tfrom\tdiscontinued\toperations,\tnet | (258,724) | (58,990) | 199,734 | 339 |
| Cumulative\teffect\tof\tchange\tin\taccounting\tprinciple,\tnet | (562,618) |  | 562,618 | N/A |
| Net\tloss | $(1,141,879) | $(450,094) | $691,785 | 154% |

Rental	and	management	revenue	for	the	year	ended	December	31,	2002	was	$544.9	million,	an	increase	of	$113.9	million	from	the	year	ended	December	31, 2001.	The	increase	resulted	primarily	from	leasing	activity	on	towers	acquired	and	constructed	subsequent	to	January	1,	2001	and,	to	a	lesser	extent,	increased	revenue on	towers	that	existed	as	of	January	1,	2001.	The	4,270	towers	that	we	have	acquired	and	constructed	since	January	1,	2001	have	significantly	increased	our	revenues. The	increased	depth	and	strength	of	our	national	and	international	portfolio	provided	us	with	a	much	larger	base	of	tower	revenue	for	a	full	year	in	2002	as	compared	to the	year	ended	December	31,	2001.	The	remaining	component	of	the	increase	is	attributable	to	an	increase	in	same	tower	revenue	related	to	towers	included	in	our portfolio	as	of	January	1,	2001.	This	increase	was	driven	by	our	ability	to	market	and	add	additional	tenants	to	those	towers.

Network	development	services	revenue	for	the	year	ended	December	31,	2002	was	$130.2	million,	a	decrease	of	$93.8	million	from	the	year	ended	December	31, 2001.	The	significant	decline	in	revenues	during	2002	resulted	primarily	from	decreases	in	revenue	related	to	construction	management,	installation	and	tower maintenance	services,	resulting	from	a	corresponding	decrease	in	the	growth	of	the	wireless	telecommunications	industry.

Total	operating	expenses	for	the	year	ended	December	31,	2002	were	$789.8	million,	a	decrease	of	$68.4	million	from	the	year	ended	December	31,	2001.	The principal	component	of	the	decrease	was	attributable	to	expense	decreases	in	our	network	development	services	segment	of	$81.0	million.	The	remaining	components	of the	decrease	were	attributable	to	a	decrease	in	depreciation	and	amortization	expense	of	$22.1	million	and	a	decrease	in	corporate	general,	administrative	and development	expense	of	$4.1	million.	These	decreases	were	offset	by	increases	in	expenses	within	our	rental	and	management	segment	of	$16.9	million,	coupled	with	an increase	in	impairments,	net	loss	on	sale	of	long-lived	assets	and	restructuring	expense	of	$21.9	million.

Rental	and	management	expense	for	the	year	ended	December	31,	2002	was	$226.8	million,	an	increase	of	$16.9	million	from	the	year	ended	December	31, 2001.	The	majority	of	the	increase	resulted	from	incremental	operating	expenses	incurred	in	2002	for	the	more	than	3,700	towers	that	were	acquired	or	constructed during	2001	(due	to	a	full	year	of	inclusion	in	our	results	of	operations	in	2002).	The	balance	of	the	increase	reflects	operating	expenses	incurred	in	2002	for	the	more than	570	towers	acquired/constructed	in	2002.	These	increases	were	partially	offset	by	cost	reduction	efforts	in	administrative	and	operational	functions.

Rental	and	management	segment	profit	for	the	year	ended	December	31,	2002	was	$332.1	million,	an	increase	of	$96.6	million	from	the	year	ended	December 31,	2001.	The	increase	resulted	primarily	from	incremental	revenues	and	operating	profit	from	both	newly	acquired	and	constructed	towers	and	existing	towers.

Network	development	services	expense	for	the	year	ended	December	31,	2002	was	$118.6	million,	a	decrease	of	$81.0	million	from	the	year	ended	December	31, 2001.	The	majority	of	the	decrease	was	due	to	an	overall	decline	in	demand	for	the	services	performed	by	this	segment,	as	discussed	above,	coupled	with	decreases	in overhead	and	related	infrastructure	costs.

Network	development	services	segment	profit	for	the	year	ended	December	31,	2002	was	$11.6	million,	a	decrease	of	$12.8	million	from	the	year	ended December	31,	2001.	The	decrease	resulted	primarily	from	a	decline	in	revenue,	as	discussed	above,	partially	offset	by	a	reduction	in	personnel,	overhead	and infrastructure	costs	as	a	result	of	restructuring	initiatives	that	were	implemented	in	2002	and	2001.

# Depreciation	and	Amortization

Depreciation	and	amortization	for	the	year	ended	December	31,	2002	was	$312.9	million,	a	decrease	of	$22.1	million	from	the	year	ended	December	31,	2001. The	decrease	reflects	the	adoption	of	SFAS	No.	142,	which	reduced	amortization	expense	by	approximately	$67.6	million.	This	decrease	was	partially	offset	by	an increase	in	depreciation	expense	related	to	acquisitions	and	capital	expenditures	of	approximately	$236.9	million	in	2002	and	a	full	year	of	depreciation	on	the	$1.4 billion	of	property	and	equipment	acquired	in	2001.

Corporate	general,	administrative	and	development	expense	for	the	year	ended	December	31,	2002	was	$30.2	million,	a	decrease	of	$4.1	million	from	the	year ended	December	31,	2001.	The	decrease	is	attributable	to	cost	reduction	efforts	in	administrative	and	information	technology	functions	related	to	our	restructuring initiatives,	as	well	as	a	reduction	in	development	expense	as	a	result	of	our	curtailed	acquisition	and	development	related	activities.

Impairments,	net	loss	on	sale	of	long-lived	assets	and	restructuring	expense	was	$101.4	million	for	the	year	ended	December	31,	2002.	During	the	year	ended December	31,	2002,	we	sold	approximately	720	non-core	towers	and	recorded	impairment	charges	to	write-down	certain	other	non-core	towers,	which	resulted	in aggregate	impairment	charges	and	net	losses	of	approximately	$46.8	million.	In	September	2002,	we	reduced	the	scope	of	our	new	tower	construction	and	build	plans for	the	remainder	of	2002	and	2003	and,	as	a	result,	we	wrote-off	approximately	$40.2	million	of	construction-in-progress	costs	for	the	year	ended	December	31,	2002 associated	with	sites	we	no	longer	planned	to	build.	Lastly,	during	the	year	ended	December	31,	2002,	we	incurred	employee	separation	costs	associated	with	the termination	of	approximately	460	employees	(primarily	development	and	administrative),	as	well	as	costs	associated	with	the	termination	of	lease	obligations	and	other incremental	facility	closing	costs	aggregating	$10.6	million.

Impairments,	net	loss	on	sale	of	long-lived	assets	and	restructuring	expense	was	$79.5	million	for	the	year	ended	December	31,	2001.	In	November	2001,	we announced	a	restructuring	of	our	organization	to	include	a	reduction	in	the	scope	of	our	tower	development	and	acquisition	activities	and	the	centralization	of	certain operational	and	administrative	functions.	This	resulted	in	a	significant	decrease	in	new	tower	construction	and	more	stringent	criteria	for	evaluating	tower	construction and	acquisitions.	As	a	result,	we	wrote-off	approximately	$62.6	million	of	construction-in-progress	costs	for	the	year	ended	December	31,	2001	associated	with	sites	we no	longer	planned	to	build.	We	also	incurred	impairment	charges	to	write-down	certain	non-core	towers	of	approximately	$11.7	million	during	the	year	ended	December 31,	2001.	Lastly,	we	incurred	employee	separation	costs	associated	with	the	termination	of	approximately	525	employees	(primarily	tower	development	and administrative),	as	well	as	facility	closing	costs,	aggregating	$5.2	million.

Interest	income	for	the	year	ended	December	31,	2002	was	$3.5	million,	a	decrease	of	$24.9	million	from	the	year	ended	December	31,	2001.	The	decrease resulted	primarily	from	a	decrease	in	interest	earned	on	invested	cash	primarily	attributable	to	a	decrease	in	cash	on	hand	during	2002,	coupled	with	lower	interest	rates.

Interest	expense	for	the	year	ended	December	31,	2002	was	$254.4	million,	a	decrease	of	$12.8	million	from	the	year	ended	December	31,	2001.	The	majority	of the	decrease,	$26.6	million,	resulted	primarily	from	a	reduction	in	the	interest	rates	under	our	credit	facilities.	The	decrease	was	partially	offset	by	an	increase	of	$7.6 million	related	to	a	full	year	of	interest	incurred	on	our	9	3/8%	senior	notes	(issued	in	January	2001)	and	a	reduction	in	capitalized	interest	as	a	result	of	our	reduced capital	expenditures	in	2002.

Loss	on	investments	and	other	expense	for	the	year	ended	December	31,	2002	was	$25.6	million,	a	decrease	of	$13.2	million	from	the	year	ended	December	31, 2001.	The	decrease	resulted	primarily	from	decreased	impairment	and	equity	losses	on	our	cost	and	equity	investments,	offset	by	increased	losses	on	foreign	currency exchange	related	to	our	Mexican	subsidiary.

# Loss	from	Retirement	of	Long-Term	Obligations

In	February	2002,	we	repaid	all	amounts	outstanding	under	our	Mexican	credit	facility	with	borrowings	under	our	credit	facility.	As	a	result	of	such	repayment, we	expensed	approximately	$1.7	million	of	deferred	financing	fees.	In	addition,	in	January	2002,	we	terminated	the	$250.0	million	multi-draw	term	loan	C	component of	our	credit	facilities	and	recorded	a	non-cash	charge	of	approximately	$7.2	million	related	to	the	write-off	of	the	related	deferred	financing	fees.	The	aggregate	of	these charges,	$8.9	million,	represents	our	loss	on	retirement	of	long-term	obligations	for	the	year	ended	December	31,	2002.

During	the	year	ended	December	31,	2001,	we	acquired	a	portion	of	our	2.25%	convertible	notes	in	exchange	for	shares	of	our	Class	A	common	stock.	As	a consequence	of	those	negotiated	exchanges	with	certain	of	our	noteholders,	we	recorded	a	loss	on	retirement	of	long-term	obligations	of	$26.3	million	for	the	year	ended December	31,	2001.	This	non-cash	charge	represents	the	fair	value	of	incremental	stock	issued	to	note	holders	to	induce	them	to	convert	their	holdings	prior	to	the	first scheduled	redemption	date.

The	income	tax	benefit	for	the	year	ended	December	31,	2002	was	$67.8	million,	a	decrease	of	$34.2	million	from	the	year	ended	December	31,	2001.	The effective	tax	rate	was	17.5%	for	the	year	ended	December	31,	2002,	as	compared	to	20.7%	for	the	year	ended	December	31,	2001.	The	decrease	in	the	effective	tax	rate was	primarily	attributable	to	a	valuation	allowance	of	$27.5	million	that	we	recorded	in	2002	in	connection	with	our	tax	planning	strategy	to	carry	back	certain	federal net	operating	losses.	The	valuation	allowance	represents	the	estimated	lost	tax	benefit	and	costs	associated	with	implementing	such	strategy.	This	decrease	is	offset	by the	impact	of	our	ceasing	to	amortize	goodwill	(the	majority	of	which	is	non-deductible	for	tax	purposes)	in	2002	in	connection	with	the	adoption	of	SFAS	No.	142.

The	effective	tax	rate	on	loss	from	continuing	operations	in	2002	differs	from	the	federal	statutory	rate	primarily	due	to	valuation	allowances	related	to	our	capital losses,	tax	planning	strategy	(as	discussed	above)	and	foreign	items.	The	effective	tax	rate	in	2001	differs	from	the	federal	statutory	rate	due	to	valuation	allowances related	to	capital	losses	and	other	non-deductible	items	consisting	principally	of	goodwill	amortization,	and	to	a	lesser	extent,	note	conversion	expense.

SFAS	No.	109,	"Accounting	for	Income	Taxes,"	requires	that	we	record	a	valuation	allowance	when	it	is	"more	likely	than	not	that	some	portion	or	all	of	the deferred	tax	assets	will	not	be	realized."	At	December	31,	2002,	we	have	provided	a	valuation	allowance	primarily	related	to	state	net	operating	loss	carryforwards, capital	loss	carryforwards	and	the	lost	tax	benefit	and	costs	associated	with	our	tax	refund	claims.	We	have	not	provided	a	valuation	allowance	for	the	remaining deferred	tax	assets,	primarily	federal	net	operating	loss	carryforwards,	as	management	believes	that	we	will	have	sufficient	time	to	realize	these	assets	during	the	twenty- year	tax	carryforward	period.

We	intend	to	recover	a	portion	of	our	deferred	tax	asset	through	our	tax	planning	strategy,	which	carries	back	certain	federal	net	operating	losses.	The recoverability	of	our	remaining	net	deferred	tax	asset	has	been	assessed	utilizing	stable	state	(no	growth)	projections	based	on	our	current	operations.	The	projections show	a	significant	decrease	in	depreciation	and	interest	expense	in	the	later	years	of	the	carryforward	period	as	a	result	of	a	significant	portion	of	our	assets	being	fully depreciated	during	the	first	fifteen	years	of	the	carryforward

period	and	debt	repayments	reducing	interest	expense.	Accordingly,	the	recoverability	of	our	net	deferred	tax	asset	is	not	dependent	on	material	improvements	to operations,	material	asset	sales	or	other	non-routine	transactions.	Based	on	our	current	outlook	of	future	taxable	income	during	the	carryforward	period,	management believes	that	our	net	deferred	tax	asset	will	be	realized.	The	realization	of	our	deferred	tax	assets	as	of	December	31,	2002	will	be	dependent	upon	our	ability	to	generate approximately	$800.0	million	in	taxable	income	from	January	1,	2003	to	December	31,	2022.	If	we	are	unable	to	generate	sufficient	taxable	income	in	the	future,	or carry	back	losses	as	described	above,	we	will	be	required	to	reduce	our	net	deferred	tax	asset	through	a	charge	to	income	tax	expense,	which	would	result	in	a corresponding	decrease	in	stockholders'	equity.

In	December	2002,	we	committed	to	a	plan	to	dispose	of	our	wholly	owned	subsidiary	Verestar	by	sale	by	December	31,	2003.	In	the	fourth	quarter	of	2002,	we also	committed	to	a	plan	to	sell	Flash	Technologies	and	two	office	buildings	held	primarily	as	rental	property.	In	July	2002,	we	consummated	the	sale	of	our	MTS Components	operations.	In	the	first	quarter	of	2003,	we	committed	to	a	plan	to	sell	an	office	building	in	Westwood,	Massachusetts	held	primarily	as	rental	property.	In the	second	quarter	of	2003,	we	committed	to	a	plan	to	sell	Kline	by	June	30,	2004.	In	August	2003,	we	consummated	the	sale	of	Galaxy.	Accordingly,	we	presented	the results	of	these	operations,	approximately	$(245.2)	million	and	$(59.0)	million,	net	of	tax,	in	loss	from	discontinued	operations,	net,	in	the	accompanying	statements	of operations	for	the	years	ended	December	31,	2002	and	2001,	respectively.	Loss	from	discontinued	operations,	net,	for	the	year	ended	December	31,	2002	also	includes	a net	loss	on	our	disposition	of	MTS	Components	and	two	office	buildings	of	approximately	$13.5	million,	net	of	a	tax	benefit.

# Liquidity	and	Capital	Resources

In	2003,	we	generated	sufficient	cash	flow	from	operations	to	fund	our	capital	expenditures	and	cash	interest	obligations.	We	believe	cash	flow	from	operations for	the	year	ending	December	31,	2004	also	will	be	sufficient	to	fund	our	capital	expenditures	and	our	cash	debt	service	(interest	and	principal	repayments)	obligations for	2004.	For	information	about	our	outstanding	indebtedness,	see	"—Contractual	Obligations"	below.

We	expect	our	2004	cash	needs	to	consist	primarily	of	the	following:	debt	service,	including	cash	interest	of	approximately	$195.0	million,	the	repayment	of approximately	$75.8	million	of	term	loans	under	our	credit	facilities	and	capital	lease	payments	and	other	notes	payable	of	$5.5	million;	capital	expenditures	of	between $50.0	and	$65.0	million,	principally	related	to	new	tower	construction	and	improvements	to	existing	towers;	and	tower	acquisitions	of	approximately	$31.4	million.	We expect	to	meet	these	cash	needs	through	a	combination	of	cash	on	hand,	cash	generated	by	operations	and	proceeds	from	sales	of	non-core	assets.	Due	to	the	risk	factors outlined	in	"Business—Factors	That	May	Affect	Future	Results,"	however,	there	can	be	no	assurance	that	we	will	be	able	to	meet	our	cash	needs	without	additional borrowings	under	our	credit	facilities.

As	of	December	31,	2003,	we	had	total	outstanding	indebtedness	of	approximately	$3.4	billion.	We	incurred	substantially	all	of	this	indebtedness	prior	to	2002	in order	to	fund	the	acquisition	of	communications	sites	and	services	businesses	(expenditures	for	such	acquisitions	for	the	years	ended	December	31,	2000	and	2001	were $1.4	billion	and	$812.8	million,	respectively),	and	capital	expenditures	related	to	the	construction	of	new	communications	sites	(capital	expenditures	for	the	years	ended December	31,	2000	and	2001	were	$541.3	million	and	$568.2	million,	respectively).

Beginning	in	2002,	we	significantly	reduced	our	acquisitions	and	new	tower	construction	activities,	and	began	to	focus	on	reducing	our	overall	indebtedness.	In 2003,	we	continued	this	trend	by	reducing	our	net	total	indebtedness	(the	combined	decrease	in	outstanding	indebtedness	and	the	increase	in	cash	and	cash	equivalents and	restricted	cash	and	investments)	by	approximately	$235.5	million.	We	also	improved	our	financial	flexibility	by	opportunistically	refinancing	approximately	$1.0 billion	of	our	indebtedness	to	extend	maturity	dates.	We	plan	to	continue	to	reduce	our	overall	indebtedness	in	2004	and	beyond	with	cash	flow	from	operations,	and may	opportunistically	further	reduce	indebtedness	and	interest	expense	through	future	capital	market	or	strategic	transactions.

# Uses	of	Cash

Tower	Construction,	Improvement	and	Acquisition.	Historically,	we	have	used	available	cash	and	proceeds	from	non-core	asset	sales,	including	cash	obtained from	our	credit	facilities	and	proceeds	from	the	sale	of	our	debt	and	equity	securities,	to	fund	the	construction,	improvement	and	acquisition	of	tower	assets.	In	2002,	we began	to	reduce	our	capital	expenditures	on	new	tower	development.	As	a	result,	we	significantly	reduced	our	capital	expenditures	on	new	tower	development	in	2003 from	historical	levels	(for	example,	our	capital	expenditures,	excluding	acquisitions,	were	$61.6	million	in	2003	as	compared	to	$180.5	million	and	$568.2	million	in 2002	and	2001,	respectively),	and	we	expect	this	trend	to	continue.	Accordingly,	we	expect	that	our	cash	needs	in	2004	for	tower	development,	improvement	and acquisition	will	be	funded	out	of	cash	from	operations	and	proceeds	from	asset	dispositions.

•Construction	and	Improvements.	Capital	expenditures,	excluding	acquisitions,	were	approximately	$61.6	million	for	the	year	ended	December	31,	2003.	We anticipate	that	we	will	build	between	120	and	160	new	towers	through	the	end	of	2004,	and	expect	our	2004	total	capital	expenditures	for	construction	and improvements	to	be	between	approximately	$44.0	million	and	$58.0	million.	In	addition,	we	expect	to	incur	approximately	$6.0	to	$7.0	million	in	capital expenditures	relating	to	our	services	division	and	corporate	infrastructure.

•Acquisitions.	During	the	year	ended	December	31,	2003,	we	acquired	approximately	$95.1	million	in	tower	assets.	As	of	December	31,	2003,	we	were obligated	to	make	capital	expenditures	to	acquire	up	to	approximately	$31.4	million	of	tower	assets,	of	which	approximately	$10.3	million	had	been	acquired as	of	March	5,	2004.

We	plan	to	continue	to	allocate	our	available	capital	among	investment	alternatives	that	can	provide	the	highest	potential	returns	in	light	of	existing	market conditions.	Accordingly,	we	may	continue	to	acquire	tower	sites,	build	new	tower	sites	and	redevelop	or	improve	existing	tower	sites	when	the	expected	returns	on	such investments	meet	our	investment	criteria.

Debt	Service.	As	of	December	31,	2003,	we	had	outstanding	debt	of	approximately	$3.4	billion.	For	the	year	ending	December	31,	2004,	we	are	obligated	to make	a	total	of	approximately	$276.0	million	in	cash	interest	and	principal	payments	on	outstanding	debt	(this	amount	excludes	approximately	$82.0	million	of	non-cash interest	expense	relating	to	the	accretion	of	our	ATI	12.25%	Notes	and	warrants	and	the	amortization	of	deferred	financing	costs).	Our	cash	debt	service	obligations	as	of December	31,	2003	are	summarized	under	"—Contractual	Obligations"	below.

# Contractual	Obligations.

The	following	table	sets	forth	information	relating	to	our	contractual	obligations	payable	in	cash	as	of	December	31,	2003	(in	thousands):

| Contractual	Obligations | 2004 | 2005 | 2006 | 2007 | 2008 | Thereafter | Total |
| :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- |
| Credit\tfacility\tterm\tloan\tA\t(1) | $73,056 | $111,459 | $133,578 | $71,448 |  |  | $389,541 |
| Credit\tfacility\tterm\tloan\tB\t(1)(2) | 2,697 | 2,697 | 2,697 | 258,895 |  |  | 266,986 |
| Credit\tfacility\trevolver\t(1) |  |  |  | 48,189 |  |  | 48,189 |
| 9\t3/8%\tsenior\tnotes |  |  |  |  |  | $1,000,000 | 1,000,000 |
| 12.25%\tsenior\tsubordinated\tdiscount\tnotes\t(3) |  |  |  |  | $ 808,000 |  | 808,000 |
| 7.25%\tsenior\tsubordinated\tnotes |  |  |  |  |  | 400,000 | 400,000 |
| 5.0%\tconvertible\tnotes\t(4)(5) |  |  |  | 349,413 |  |  | 349,413 |
| 6.25%\tconvertible\tnotes\t(4)(5) |  |  | 212,742 |  |  |  | 212,742 |
| 3.25%\tconvertible\tnotes |  |  |  |  |  | 210,000 | 210,000 |
| 2.25%\tconvertible\tnotes | 44 |  |  |  |  |  | 44 |
| Long-term\tobligations,\texcluding\tcapital\tleases\tand\tother\tnotes\npayable | 75,797 | 114,156 | 349,017 | 727,945 | 808,000 | 1,610,000 | 3,684,915 |
| Cash\tinterest\texpense\t(1)(2)(3)(5) | 195,000 | 184,000 | 172,000 | 136,000 | 130,000 | 103,000 | 920,000 |
| Capital\tlease\tpayments\t(including\tinterest)\tand\tother\tnotes\tpayable | 5,548 | 4,635 | 19,233 | 3,355 | 3,215 | 208,645 | 244,631 |
| Operating\tlease\tpayments | 87,905 | 75,104 | 62,075 | 52,234 | 42,591 | 289,857 | 609,766 |
| Purchase\tobligations\tfor\tacquisitions | 31,400 |  |  |  |  |  | 31,400 |
| Other\tlong-term\tliabilities\t(6) | 1,069 | 322 | 329 | 337 | 345 | 3,551 | 5,953 |
| Total | $396,719 | $378,217 | $602,654 | $919,871 | $ 984,151 | $2,215,053 | $5,496,665 |

A	description	of	our	contractual	debt	obligations	is	included	in	Item	7A.	"Quantitative	and	Qualitative	Disclosures	about	Market	Risk,"	as	well	as	in	note	7	to	our consolidated	financial	statements.

(1) Interest	on	our	credit	facilities	is	payable	in	accordance	with	the	applicable	London	Interbank	Offering	Rate	(LIBOR)	agreement	or	quarterly	and	accrues	at	our option,	either	at	LIBOR	plus	margin	(as	defined)	or	the	base	rate	plus	margin	(as	defined).	The	weighted	average	interest	rate	in	effect	at	December	31,	2003	for	the credit	facilities	was	4.25%.	For	projections	of	our	cash	interest	expense	related	to	the	credit	facilities,	we	have	assumed	the	LIBOR	rate,	before	the	margin	as defined	in	our	credit	facility	agreements,	is	1.5%	through	December	31,	2007.

(2) In	January	2004,	we	refinanced	our	$267.0	million	term	loan	B	with	a	new	term	loan	C	due	December	31,	2007.	The	new	term	loan	C	has	substantially	the	same terms	as	term	loan	B,	except	that	the	interest	rate	spreads	for	the	LIBOR	and	base	rate	loans	were	reduced	from	3.5%	above	LIBOR	to	2.25%	and	from	2.5%	above the	base	rate	to	1.25%,	respectively.

(3) The	12.25%	senior	subordinated	discount	notes	accrue	no	cash	interest.	Instead,	the	accreted	value	of	each	note	increases	between	the	date	of	original	issuance	and maturity	(August	1,	2008)	at	a	rate	of	12.25%	per	annum,	with	principal	due	at	maturity	of	$808.0	million.	As	of	December	31,	2003,	the	outstanding	debt	under the	12.25%	senior	subordinated	discount	notes	was	$424.2	million	accreted	value,	net	of	the	allocated	fair	value	of	$44.2	million	relating	to	warrants	issued	in conjunction	with	these	notes.

(4) The	holders	of	our	6.25%	and	5.0%	convertible	notes	have	the	right	to	require	us	to	repurchase	their	notes	on	specified	dates	prior	to	their	maturity	dates	in	2009 and	2010,	but	we	may	pay	the	purchase	price	by	issuing	shares	of	our	Class	A	common	stock,	subject	to	certain	conditions.	The	obligations	with	respect	to	the	right of	the	holders	to	put	the	6.25%	convertible	notes	and	5.0%	convertible	notes	on	October	22,	2006	and	February	20,	2007,	respectively,	have	been	classified	as	cash obligations	in	those	respective	periods.

(5) In	February	2004,	we	sold	$225.0	million	principal	amount	of	7.50%	senior	notes	due	2012	through	an	institutional	private	placement.	The	net	proceeds	of	the offering	were	used	to	redeem	all	of	our	outstanding	6.25%	convertible	notes	and	to	repurchase	$4.5	million	of	our	5.0%	convertible	notes.

(6) Liabilities	that	are	not	payable	in	cash,	primarily	our	unearned	revenue	and	deferred	rent	liability,	are	not	included.

The	above	table	does	not	include	certain	commitments	relating	to	the	construction	of	tower	sites	under	existing	build	to	suit	agreements	as	of	December	31,	2003, as	we	cannot	currently	estimate	the	timing	and	amounts	of	such	payments.	(See	note	9	to	our	consolidated	financial	statements.)

# Sources	of	Cash

Total	Liquidity	at	December	31,	2003.	As	of	December	31,	2003,	we	had	approximately	$544.8	million	of	total	liquidity,	which	is	comprised	of	approximately $275.5	million	in	cash	and	cash	equivalents	and	the	ability	to	draw	approximately	$269.3	million	of	the	revolving	loan	under	our	credit	facilities.	Of	the	approximately $275.5	million	in	cash	and	cash	equivalents,	approximately	$170.0	million	is	held	in	restrictive	accounts	and	approximately	$49.1	million	of	this	amount	must	be	used	to repay	existing	indebtedness.

Cash	Generated	by	Operations.	For	the	years	ended	December	31,	2003,	2002	and	2001,	our	cash	provided	by	operating	activities	was	$156.4	million,	$105.1 million	and	$26.1	million,	respectively.	Each	of	our	rental	and	management	and	network	development	services	segments	are	expected	to	generate	cash	flows	from operations	during	2004	in	excess	of	their	cash	needs	for	operations	and	capital	expenditures	for	tower	construction,	improvements	and	acquisitions.	We	expect	to	use	the excess	cash	generated	from	these	segments	principally	to	service	our	debt.

Credit	Facilities.	As	of	December	31,	2003,	we	had	approximately	$269.3	million	of	unused	capacity	under	our	revolving	credit	facility,	the	only	loan	under	our credit	facilities	that	is	not	fully	drawn.	We	have	not	borrowed	any	amounts	under	our	credit	facilities	since	April	2002,	and	we	do	not	anticipate	borrowing	any	amounts under	the	revolving	credit	facility	during	2004.	In	February	2004,	we	made	a	$21.0	million	voluntary	prepayment	of	term	loan	A	under	our	credit	facilities.

Proceeds	from	the	Sale	of	Debt	and	Equity	Securities.	During	2003,	we	raised	approximately	$1.1	billion	in	net	proceeds	from	the	sale	of	debt	and	equity securities	as	follows:

| Date | Transaction | Approximate	Net<br>Proceeds |
| :--- | :--- | :--- |
| January\t2003 | ATI\t12.25%\tSenior\tSubordinated\tDiscount\tNotes\tdue\t2008 | $397.0\tmillion |
| August\t2003 | $210.0\tmillion\t3.25%\tConvertible\tNotes\tdue\t2010 | $202.8\tmillion |
|  | 14,260,000\tShares\tof\tClass\tA\tcommon\tstock | $120.3\tmillion |
| November\t2003 | $400.0\tmillion\tATI\t7.25%\tSenior\tSubordinated\tNotes\tdue\t2011 | $389.3\tmillion |

The	net	proceeds	from	these	offerings	were	used	to	repay	approximately	$961.3	million	of	existing	indebtedness,	and	approximately	$170.0	million	remains	in restricted	cash	and	investments	at	December	31,	2003.	In	addition,	during	2003	we	issued	8,415,984	shares	of	our	Class	A	common	stock	in	exchange	for	an	aggregate amount	of	approximately	$53.1	million	accreted	value	($67.2	million	face	value)	of	our	2.25%	convertible	notes.	These	exchanges	were	effected	in	privately	negotiated transactions	pursuant	to	Section	3(a)(9)	under	the	Securities	Act	of	1933.

In	February	2004,	we	raised	an	additional	approximately	$221.7	million	of	net	proceeds	through	an	institutional	private	placement	of	our	7.50%	senior	notes	due 2012.	Approximately	$217.1	million	of	the	net	proceeds	from	this	offering	were	used	to	redeem	all	of	our	outstanding	6.25%	convertible	notes	due	2009,	and	$4.5 million	of	those	proceeds	were	used	to	repurchase	our	5.0%	convertible	notes.	(See	note	19	to	our	consolidated	financial	statements.)

Divestiture	Proceeds.	During	2003,	we	continued	to	execute	our	strategy	of	divesting	non-core	assets	and	reinvesting	the	proceeds	of	such	divestitures	in	higher return	tower	assets.	From	January	1,	2003	to	March	5,	2004,	we	received	net	proceeds	of	approximately	$123.9	million	from	non-core	asset	sales	related	to	the	sale	of our	remaining	components	business,	two	office	buildings,	a	Verestar	subsidiary,	Galaxy,	Kline,	and	non-core	towers	and	related	assets.	Proceeds	from	these	and	any future	transactions	have	and	will	be	used,	to	the	extent	permitted	under	our	credit	facilities	and	mortgages,	to	acquire	additional	tower	assets	and	to	service	debt.	We anticipate	receiving	approximately	$10.0	million	of	proceeds	from	additional	sales	of	non-core	assets	during	2004.

# Factors	Affecting	Sources	of	Liquidity

Internally	Generated	Funds.	The	key	factors	affecting	our	ability	to	generate	sufficient	funds	from	operations	are	the	demand	for	antennae	space	on	wireless	and broadcast	communications	towers	and	for	related	services,	our	ability	to	maximize	the	utilization	of	our	existing	towers	and	our	ability	to	minimize	costs	and	fully achieve	our	operating	efficiencies.

Restrictions	Under	Credit	Facilities	and	Other	Debt	Securities.	The	credit	facilities	with	our	borrower	subsidiaries	contain	certain	financial	ratios	and	operating covenants	and	other	restrictions	(including	limitations	on	additional	debt,	guarantees,	use	of	proceeds	from	asset	sales,	dividends	and	other	distributions,	investments	and liens)	with	which	our	borrower	subsidiaries	and	restricted	subsidiaries	must	comply.

The	credit	facilities	contain	five	financial	tests	with	which	we	must	comply:

•a	pro	forma	debt	service	test	(Annualized	Operating	Cash	Flow	to	Pro	Forma	Debt	Service).	As	of	December	31,	2003,	we	were	required	to	maintain	a	ratio of	not	less	than	1.00	to	1.00;

•an	interest	coverage	test	(Annualized	Operating	Cash	Flow	to	Interest	Expense).	As	of	December	31,	2003,	we	were	required	to	maintain	a	ratio	of	not	less than	2.50	to	1.00,	increasing	to	3.00	to	1.00	at	January	1,	2004;	and

•a	fixed	charge	coverage	test	(Annualized	Operating	Cash	Flow	to	Fixed	Charges	).	As	of	December	31,	2003,	we	were	required	to	maintain	a	ratio	of	not	less than	1.00	to	1.00.

Any	failure	to	comply	with	these	covenants	would	not	only	prevent	us	from	being	able	to	borrow	additional	funds	under	our	revolving	line	of	credit,	but	would also	constitute	a	default.	These	covenants	also	restrict	our	ability,	as	the	parent	company,	to	incur	any	debt	other	than	that	currently	outstanding	and	refinancings	of	that debt.	The	credit	facilities	also	limit	our	revolving	loan	drawdowns	based	on	our	cash	on	hand.

In	addition	to	the	credit	facilities,	the	indentures	governing	the	terms	of	the	ATI	12.25%	Notes	and	the	ATI	7.25%	Notes	contain	certain	restrictive	covenants	with which	ATI,	the	sister	guarantors	and	its	and	their	subsidiaries	must	comply.	These	include	restrictions	on	their	ability	to	incur	additional	debt,	guarantee	debt,	pay dividends	and	make	other	distributions,	make	certain	investments	and,	as	in	the	credit	facilities,	use	the	proceeds	from	asset	sales.	Any	failure	to	comply	with	these covenants	would	constitute	a	default.	Specifically,	the	indentures	restrict	ATI,	each	of	the	sister	guarantors	and	its	and	their	restricted	subsidiaries	from	incurring additional	debt	or	issuing	certain	types	of	preferred	stock.	ATI,	the	sister	guarantors	and	its	and	their	subsidiaries	are	permitted,	however,	to	incur	debt	under	our	credit facilities,	or	renewals,	refundings,	replacements	or	refinancings	of	them,	up	to	$1.6	billion.

The	indentures	governing	the	terms	of	our	9	3/8%	senior	notes	and	our	7.50%	senior	notes	(issued	in	February	2004)	also	contain	certain	restrictive	covenants	with which	we	and	our	restricted	subsidiaries	must	comply.	These	include	restrictions	on	our	ability	to	incur	additional	debt,	guarantee	debt,	pay	dividends	and	make	other distributions,	make	certain	investments	and,	as	in	the	credit	facilities,	use	the	proceeds	from	asset	sales.	Any	failure	to	comply	with	these	covenants	would	constitute	a default.	Specifically,	the	senior	note	indentures	restrict	us	from	incurring	additional	debt	or	issuing	certain	types	of	preferred	stock	unless	our	consolidated	debt	is	not greater	than	7.5	times	our	adjusted	consolidated	cash	flow.	We	are	permitted,	however,	to	incur	debt	under	our	credit	facilities	(which	for	these	purposes	includes indebtedness	under	the	credit	facilities	of	our	borrower	subsidiaries,	the	ATI	12.25%	Notes,	the	ATI	7.25%	Notes	and	a	portion	of	our	3.25%	convertible	notes)	even	if we	are	not	in	compliance	with	this	ratio,	or	renewals,	refundings,	replacements	or	refinancings	of	our	credit	facilities.

If	a	default	occurred	under	our	credit	facilities	or	any	of	our	other	debt	securities,	the	maturity	dates	for	our	outstanding	debt	could	be	accelerated,	and	we	likely would	be	prohibited	from	making	additional	borrowings	under	the	credit	facilities	until	we	cured	the	default.	If	this	were	to	occur,	we	would	not	have	sufficient	cash	on hand	to	repay	such	indebtedness.	The	key	factors	affecting	our	ability	to	comply	with	the	debt	covenants	described	above	are	our	financial	performance	relative	to	the financial	ratios	defined	in	the	various	agreements	and	our	ability	to	fund	our	debt	service	obligations.	Based	upon	our	current	expectations,	we	believe	our	operating results	will	be	sufficient	to	comply	with	these	covenants.	However,	due	to	the	risk	factors	outlined	above	in	"Business—Factors	That	May	Affect	Future	Results,"	there can	be	no	assurance	that	our	financial	performance	will	not	deteriorate	to	a	point	that	would	result	in	a	default.

As	outlined	above,	as	of	December	31,	2003,	our	annual	consolidated	cash	debt	service	obligations	(principal	and	interest)	for	each	of	the	next	five	years	and thereafter	are	approximately:	$276.0	million,	$303.0	million,	$540.0	million	(which	does	not	reflect	the	repurchase	of	our	6.25%	convertible	notes	in	February	2004),

$867.0	million,	$941.0	million	and	$1.9	billion,	respectively.	If	we	are	unable	to	refinance	our	subsidiary	debt	or	renegotiate	the	terms	of	such	debt,	we	may	not	be	able to	meet	our	debt	service	requirements	in	the	future.	In	addition,	as	a	holding	company,	we	depend	on	distributions	or	dividends	from	our	subsidiaries,	or	funds	raised through	debt	and	equity	offerings,	to	fund	our	debt	obligations.	Although	the	agreements	governing	the	terms	of	our	credit	facilities	and	senior	subordinated	notes	permit our	subsidiaries	to	make	distributions	to	us	to	permit	us	to	meet	our	debt	service	obligations,	such	terms	also	significantly	limit	their	ability	to	distribute	cash	to	us	under certain	circumstances.	Accordingly,	if	we	do	not	receive	sufficient	funds	from	our	subsidiaries	to	meet	our	debt	service	obligations,	we	may	be	required	to	refinance	or renegotiate	the	terms	of	our	debt,	and	there	is	no	assurance	we	will	succeed	in	such	efforts.

Our	ability	to	make	scheduled	payments	of	principal	and	interest	on	our	debt	obligations,	and	our	ability	to	refinance	such	debt	obligations,	will	depend	on	our future	financial	performance,	which	is	subject	to	many	factors	beyond	our	control,	as	outlined	above	under	"Business	–	Factors	That	May	Affect	Future	Results."	In addition,	our	ability	to	refinance	any	of	our	debt	in	the	future	may	depend	on	our	credit	ratings	from	commercial	rating	agencies,	which	are	dependent	on	our	expected financial	performance,	the	liquidity	factors	discussed	above,	and	the	rating	agencies'	outlook	for	our	industry.	We	expect	that	we	will	need	to	refinance	a	substantial portion	or	our	debt	on	or	prior	to	its	scheduled	maturity	in	the	future.	There	can	be	no	assurance	that	we	will	be	able	to	secure	such	refinancings	or,	if	such	refinancings are	obtained,	that	the	terms	will	be	commercially	reasonable.

Capital	Markets.	Our	ability	to	raise	additional	funds	in	the	capital	markets	depends	on,	among	other	things,	general	economic	conditions,	conditions	of	the wireless	industry,	our	financial	performance	and	the	state	of	the	capital	markets.	In	December	2003,	we	filed	a	"universal"	shelf	registration	statement	for	possible	future offerings	of	an	aggregate	of	up	to	$1.0	billion	of	debt	and/or	equity	securities,	including	the	offering	of	Class	A	common	stock	pursuant	to	a	direct	stock	purchase	plan with	respect	to	which	our	Board	of	Directors	currently	has	approved	a	$150.0	million	offering.	This	registration	statement	is	not	yet	effective.

# Critical	Accounting	Policies	and	Estimates

Management's	discussion	and	analysis	of	financial	condition	and	results	of	operations	are	based	upon	our	consolidated	financial	statements,	which	have	been prepared	in	accordance	with	generally	accepted	accounting	principles	in	the	United	States.	The	preparation	of	these	financial	statements	requires	us	to	make	estimates and	judgments	that	affect	the	reported	amounts	of	assets,	liabilities,	revenues	and	expenses,	as	well	as	related	disclosures	of	contingent	assets	and	liabilities.	We	evaluate our	policies	and	estimates	on	an	ongoing	basis,	including	those	related	to	income	taxes,	impairment	of	assets,	allowances	for	accounts	receivable,	investment	impairment charges	and	revenue	recognition.	Management	bases	its	estimates	on	historical	experience	and	various	other	assumptions	that	are	believed	to	be	reasonable	under	the circumstances,	the	results	of	which	form	the	basis	for	making	judgments	about	the	carrying	values	of	assets	and	liabilities	that	are	not	readily	apparent	from	other sources.	Actual	results	may	differ	from	these	estimates	under	different	assumptions	or	conditions.

We	have	identified	the	following	policies	as	critical	to	our	business	operations	and	the	understanding	of	our	results	of	operations.	This	is	not	a	comprehensive	list of	our	accounting	policies.	In	many	cases,	the	accounting	treatment	of	a	particular	transaction	is	specifically	dictated	by	generally	accepted	accounting	principles,	with no	need	for	management's	judgment	in	its	application.	There	are	also	areas	in	which	management's	judgment	in	selecting	any	available	alternative	would	not	produce	a materially	different	result.	For	a	discussion	of	our	other	accounting	policies,	see	note	1	to	the	consolidated	financial	statements	in	this	annual	report	on	Form	10-K, beginning	on	page	F-7.

•Income	Taxes.				We	record	a	valuation	allowance	to	reduce	our	net	deferred	tax	asset	to	the	amount	that	management	believes	is	more	likely	than	not	to	be realized.	At	December	31,	2003,	we	provided	a	valuation	allowance	of	approximately	$156.7	million	primarily	related	to	our	net	state	deferred	tax	assets	and capital	loss	carryforwards.	In	addition,	we	also	recorded	a	valuation	allowance	in	2002

related	to	a	tax	planning	strategy	related	to	the	carry	back	of	certain	federal	net	operating	losses.	The	valuation	allowance	represents	the	estimated	lost	tax benefit	and	costs	associated	with	such	strategy.	We	have	not	provided	a	valuation	allowance	for	the	remaining	deferred	tax	assets,	primarily	our	tax	refund claims	and	our	federal	net	operating	loss	carryforwards,	as	management	believes	that	we	will	be	successful	with	our	tax	refund	claims	and	have	sufficient time	to	realize	these	federal	net	operating	loss	carryforwards	during	the	twenty-year	tax	carryforward	period.

We	intend	to	recover	a	portion	of	our	net	deferred	tax	asset	through	our	tax	refund	claims	related	to	certain	federal	net	operating	losses,	filed	during 2003	as	part	of	a	tax	planning	strategy	implemented	in	2002.	The	recoverability	of	our	remaining	net	deferred	tax	asset	has	been	assessed	utilizing	stable state	(no	growth)	projections	based	on	our	current	operations.	The	projections	show	a	significant	decrease	in	depreciation	and	interest	expense	in	the	later years	of	the	carryforward	period	as	a	result	of	a	significant	portion	of	our	assets	being	fully	depreciated	during	the	first	fifteen	years	of	the	carryforward period	and	debt	repayments	reducing	interest	expense.	Accordingly,	the	recoverability	of	our	net	deferred	tax	asset	is	not	dependent	on	material improvements	to	operations,	material	asset	sales	or	other	non-routine	transactions.	Based	on	our	current	outlook	of	future	taxable	income	during	the carryforward	period,	management	believes	that	our	net	deferred	tax	asset	will	be	realized.	The	realization	of	our	deferred	tax	assets	will	be	dependent	upon our	ability	to	generate	approximately	$1.0	billion	in	taxable	income	from	January	1,	2004	to	December	31,	2023.	If	we	are	unable	to	generate	sufficient taxable	income	in	the	future	or	carry	back	losses	as	described	above,	we	will	be	required	to	reduce	our	net	deferred	tax	asset	through	a	charge	to	income tax	expense,	which	would	result	in	a	corresponding	decrease	in	stockholders	equity.

Depending	on	the	resolution	of	the	Verestar	bankruptcy	proceedings	described	in	note	2	to	the	consolidated	financial	statements,	we	may	be	entitled to	a	worthless	stock	or	bad	debt	deduction	for	our	investment	in	Verestar.	No	income	tax	benefit	has	been	provided	for	these	potential	deductions	due	to	the uncertainty	surrounding	the	bankruptcy	proceedings.

# •Impairment	of	Assets.

Assets	subject	to	amortization	and	non-core	assets	held	for	sale:		We	review	long-lived	assets,	including	intangibles,	for	impairment	whenever events	or	changes	in	circumstances	indicate	that	the	carrying	amount	of	an	asset	may	not	be	recoverable.	We	assess	recoverability	by	determining	whether the	net	book	value	of	the	related	assets	will	be	recovered	through	projected	undiscounted	cash	flows.	If	we	determine	that	the	carrying	value	of	an	asset may	not	be	recoverable,	we	will	measure	any	impairment	based	on	the	projected	future	discounted	cash	flows	to	be	provided	from	the	asset	or	available market	information	relative	to	the	asset's	fair	market	value	as	compared	to	its	carrying	value.	We	record	any	related	impairment	losses	in	the	period	in which	we	identify	such	impairment.	We	also	review	the	carrying	value	of	assets	held	for	sale	for	impairment	based	on	management's	best	estimate	of	the anticipated	net	proceeds	expected	to	be	received	upon	final	disposition.	We	record	any	impairment	charges	or	estimated	losses	on	disposal	in	the	period	in which	we	identify	such	impairment	or	loss.

Goodwill—Assets	not	subject	to	amortization:		As	of	January	1,	2002,	we	adopted	the	provisions	of	SFAS	No.	142	"Goodwill	and	Other	Intangible Assets,"	which	requires	that	goodwill	and	intangible	assets	with	indefinite	lives	no	longer	be	amortized,	but	reviewed	for	impairment	at	least	annually. SFAS	No.	142	also	requires	that	we	assess	whether	goodwill	is	impaired	by	performing	a	transitional	impairment	test.	These	tests	compared	the	implied	fair value	of	the	reporting	unit's	goodwill	with	the	carrying	amount	of	that	goodwill	to	measure	the	amount	of	goodwill	impairment,	if	any.	We	completed	our transitional	impairment	testing	in	the	second	quarter	of	2002	and	concluded	that	all	of	the	goodwill	related	to	Verestar	was	impaired	and	that	the	majority	of the	goodwill	in	the	services	segment	was	impaired.	As	a	result,	we	recognized	a	$562.6	million	non-cash	charge	(net	of	a	tax	benefit	of	$14.4	million) related	to	the	write-down	of	goodwill	to	its	fair	value.	In	accordance	with	the	provisions	of	SFAS	No.	142,	the	charge	is	reflected	as	of	January	1,	2002	and included	in	the	results	of	operations

for	the	year	ended	December	31,	2002	as	the	cumulative	effect	of	a	change	in	accounting	principle.	Fair	value	estimates	were	determined	based	on independent	third	party	appraisals	for	the	rental	and	management	segment	and	Verestar	and	future	discounted	cash	flows	and	market	information	in	the services	segment.

In	December	2003	and	2002,	we	completed	our	annual	impairment	testing	related	to	the	goodwill	of	the	rental	and	management	reporting	unit (incorporating	an	independent	third	party	appraisal)	that	contains	goodwill	and,	in	both	cases,	determined	that	goodwill	was	not	impaired.	Fair	value estimates	are	based	on	our	historical	and	projected	operating	results	and	market	information,	changes	to	which	could	affect	those	fair	value	estimates.	Our December	2002	annual	impairment	testing	also	included	the	remaining	goodwill	of	Kline	(the	only	services	business	with	remaining	goodwill)	and,	based on	available	market	information,	we	determined	that	goodwill	was	not	impaired.	In	June	2003,	we	committed	to	a	plan	to	sell	Kline,	reclassified	its	net assets	to	assets	held	for	sale	and	recorded	an	impairment	charge	(inclusive	of	Kline's	remaining	$10.3	million	of	goodwill)	that	reduced	Kline's	net	assets to	the	estimated	fair	value	expected	upon	disposal.

We	will	perform	our	annual	goodwill	impairment	test	on	December	1st	of	each	year	and	when	events	or	circumstances	indicate	that	the	asset	might	be impaired.

•Allowances	for	Accounts	Receivable.	We	maintain	allowances	for	accounts	receivable	for	estimated	losses	resulting	from	the	inability	of	our	customers	to make	contractually	obligated	payments	that	totals	approximately	$17.4	million	as	of	December	31,	2003.	When	evaluating	the	adequacy	of	the	allowances for	accounts	receivable,	we	specifically	analyze	accounts	receivable	and	historical	bad	debts,	customer	concentrations,	current	economic	trends,	changes	in our	customers'	payment	terms	and	the	age	of	the	receivables.	If	the	basis	for	our	estimates	and	financial	condition	of	our	customers	were	to	change, adjustments	to	the	allowances	may	be	required.

•Investment	Impairment	Charges.				Investments	in	those	entities	where	we	own	less	than	twenty	percent	of	the	voting	stock	of	the	individual	entity	and	do not	exercise	significant	influence	over	operating	and	financial	policies	of	the	entity	are	accounted	for	using	the	cost	method.	Investments	in	entities	where	we own	less	than	twenty	percent	but	have	the	ability	to	exercise	significant	influence	over	operating	and	financial	policies	of	the	entity	or	where	we	own	more than	twenty	percent	of	the	voting	stock	of	the	individual	entity,	but	not	in	excess	of	fifty	percent,	are	accounted	for	using	the	equity	method.	Our	investments are	in	companies	that	are	not	publicly	traded,	and,	therefore,	no	established	market	for	these	securities	exists.	We	have	a	policy	in	place	to	review	the	fair value	of	our	investments	on	a	regular	basis	to	evaluate	the	carrying	value	of	the	investments	in	these	companies.	If	we	believe	that	the	carrying	value	of	an investment	is	carried	at	an	amount	in	excess	of	fair	value,	it	is	our	policy	to	record	an	impairment	charge	to	adjust	the	carrying	value	to	the	market	value. •Revenue	Recognition.				A	portion	of	our	network	development	services	revenue	is	derived	under	contracts	or	arrangements	with	customers	that	provide	for billings	on	a	fixed	price	basis.	Revenues	under	these	contracts	are	recognized	using	the	percentage-of-completion	methodology.	Under	the	percentage-of- completion	methodology,	revenues	are	recognized	in	accordance	with	the	percentage	of	contract	costs	incurred	to	date	compared	to	the	estimated	total contract	costs.	Due	to	uncertainties	and	estimates	inherent	within	percentage-of-completion	accounting	it	is	possible	that	estimates	will	be	revised	as	project work	progresses.	Changes	to	total	estimated	contract	costs	or	losses,	if	any,	are	recognized	in	the	period	in	which	they	are	determined.

# Recent	Accounting	Pronouncements

In	January	2003	and	December	2003,	the	FASB	issued	Interpretation	No.	46,	"Consolidation	of	Variable	Interest	Entities"	(FIN	46),	and	its	revision,	FIN	46-R, respectively.	FIN	46	and	FIN	46-R	addresses	the	consolidation	of	entities	whose	equity	holders	have	either	not	provided	sufficient	equity	at	risk	to	allow	the	entity	to finance	its	own	activities	or	do	not	possess	certain	characteristics	of	a	controlling	financial	interest.	FIN	46	and	FIN	46-R	require	the	consolidation	of	these	entities, known	as	variable	interest	entities	(VIEs),	by	the	primary	beneficiary	of	the	entity.	The	primary	beneficiary	is	the	entity,	if	any,	that	is	subject	to	a	majority	of	the	risk	of loss	from	the	VIE's	activities,	entitled	to	receive	a	majority	of	the	VIE's	residual	returns,	or	both.	FIN	46	and	FIN	46-R	are	applicable	for	financial	statements	of	public entities	that	have	interests	in	VIEs	or	potential	VIEs	referred	to	as	special	purpose	entities	for	periods	ending	after	December	15,	2003,	of	which	we	had	none. Application	by	public	entities	for	all	other	types	of	entities	is	required	in	financial	statements	for	periods	ending	after	March	15,	2004.	We	have	applied	the	provisions	of FIN	46	and	the	adoption	was	not	material	to	our	consolidated	financial	position	and	results	of	operations.	We	continue	to	evaluate	our	investments	to	determine	which,	if any,	will	be	impacted	by	the	adoption	of	FIN	46-R.	The	adoption	of	FIN	46-R	is	not	expected	to	have	a	material	impact	on	our	consolidated	financial	position	or	results of	operations.

# Information	Presented	Pursuant	to	the	Indenture	of	Our	9	3/8%	Notes

The	following	table	sets	forth	information	that	is	presented	solely	to	address	certain	reporting	requirements	contained	in	the	indenture	for	our	9	3/8%	Notes.	This information	presents	certain	of	our	financial	data	on	a	consolidated	basis	and	on	a	restricted	group	basis,	as	defined	in	the	indenture	governing	the	senior	notes.	All	of our	subsidiaries	are	part	of	the	restricted	group,	except	our	wholly	owned	subsidiary	Verestar.	In	December	2002,	we	committed	to	a	plan	to	dispose	of	Verestar	by	sale by	December	31,	2003.	In	December	2003,	Verestar	filed	for	protection	under	the	federal	bankruptcy	laws	and	ceased	to	be	included	in	the	accompanying	consolidated financial	statements	from	the	filing	date	forward.	Accordingly,	the	results	of	operations	related	to	Verestar	have	been	included	in	loss	from	discontinued	operations	in our	accompanying	consolidated	statements	of	operations	through	the	date	of	the	bankruptcy	filing	in	December	2003.

|  | 2003 | 2002 | 2003 | 2002 |
| :--- | :--- | :--- | :--- | :--- |
|  |  | (In\tthousands) |  |  |
| Operating\trevenues | $715,144 | $675,082 | $715,144 | $675,082 |
| Total\toperating\texpenses | 683,655 | 789,844 | 683,655 | 789,844 |
| Total\tother\texpense | 340,117 | 273,558 | 340,117 | 273,558 |
| Loss\tfrom\tcontinuing\toperations\tbefore\tincome\ttaxes | (308,628) | (388,320) | (308,628) | (388,320) |
| Income\ttax\tbenefit | 66,137 | 67,783 | 66,137 | 67,783 |
| Loss\tfrom\tcontinuing\toperations\tbefore\tcumulative\teffect\tof\tchange\tin\taccounting\tprinciple | (242,491) | (320,537) | (242,491) | (320,537) |
| Loss\tfrom\tdiscontinued\toperations,\tnet\tof\ttax | (60,926) | (258,724) | (26,464) | (17,149) |
| Loss\tbefore\tcumulative\teffect\tof\tchange\tin\taccounting\tprinciple | $(303,417) | $(579,261) | $(268,955) | $(337,686) |

# Information	Presented	Pursuant	to	the	Indentures	of	Our	9	3/8%	Notes,	ATI	12.25%	Notes	and	ATI	7.25%	Notes

The	following	table	sets	forth	information	that	is	presented	solely	to	address	certain	tower	cash	flow	reporting	requirements	contained	in	the	indentures	for	our 9	3/8%	Notes	and	our	ATI	12.25%	Notes	and	ATI	7.25%	Notes.	The	information	contained	in	note	20	to	our	consolidated	financial	statements	is	also	presented	to address	certain	reporting	requirements	contained	in	the	indentures	for	our	ATI	12.25%	Notes	and	ATI	7.25%	Notes.

Tower	Cash	Flow,	Adjusted	Consolidated	Cash	Flow	and	Non-Tower	Cash	Flow	for	the	Company	and	its	restricted	subsidiaries,	as	defined	in	the	indentures	for our	9	3/8%	Notes,	ATI	12.25%	Notes	and	ATI	7.25%	Notes,	are	as	follows	(in	thousands):

|  | 9^	3<br>/8% | ATI	7.25% |
| :--- | :--- | :--- |
|  | Notes | Notes |
| Tower\tCash\tFlow,\tfor\tthe\tthree\tmonths\tended\tDecember\t31,\t2003 | $109,730 | $108,255 |
| Consolidated\tCash\tFlow,\tfor\tthe\ttwelve\tmonths\tended |  |  |
| December\t31,\t2003 | $396,459 | $390,401 |
| Less:\tTower\tCash\tFlow,\tfor\tthe\ttwelve\tmonths\tended |  |  |
| December\t31,\t2003 | (411,195) | (405,159) |
| Plus:\tfour\ttimes\tTower\tCash\tFlow,\tfor\tthe\tthree\tmonths\tended\tDecember\t31,\t2003 | 438,920 | 433,020 |
| Adjusted\tConsolidated\tCash\tFlow,\tfor\tthe\ttwelve\tmonths\tended\nDecember\t31,\t2003 | $424,184 | $418,262 |
| Non-Tower\tCash\tFlow,\tfor\tthe\ttwelve\tmonths\tended\nDecember\t31,\t2003 | $(17,757) | $(18,499) |

# ITEM	7A.				QUANTITATIVE	AND	QUALITATIVE	DISCLOSURES	ABOUT	MARKET	RISK

We	are	exposed	to	market	risk	from	changes	in	interest	rates	on	long-term	debt	obligations.	We	attempt	to	reduce	these	risks	by	utilizing	derivative	financial instruments,	namely	interest	rate	caps,	swaps,	and	collars	pursuant	to	our	policies.	All	derivative	financial	instruments	are	for	purposes	other	than	trading.	For	the	year ended	December	31,	2003,	we	prepaid	$757.8	million	of	outstanding	borrowings	under	our	credit	facilities	and	made	scheduled	principal	payments	under	the	term	loans of	$47.5	million.	In	addition,	we	issued	$420.0	million	of	ATI	12.25%	Notes	with	a	principal	at	maturity	of	$808.0	million,	$210.0	million	of	3.25%	Notes	and	$400.0 million	of	ATI	7.25%	Notes.	We	also	had	two	swaps	and	two	collars	expire	with	aggregate	notional	amounts	totaling	$400.0	million	and	$232.5	million,	respectively.

The	following	tables	provide	information	as	of	December	31,	2003	and	2002	about	our	market	risk	exposure	associated	with	changing	interest	rates.	For	long- term	debt	obligations,	the	tables	present	principal	cash	flows	by	maturity	date	and	average	interest	rates	related	to	outstanding	obligations.	For	interest	rate	caps,	swaps and	collars,	the	tables	present	notional	principal	amounts	and	weighted-average	interest	rates	by	contractual	maturity	dates.

Principal	Payments	and	Interest	Rate	Detail	by	Contractual	Maturity	Dates	(In	thousands)

| Long-Term	Debt | 2004 | 2005 | 2006 | 2007 | 2008 | Thereafter | Total | Value |
| :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- |
| Fixed\tRate\tDebt\t(a) | $1,869 | $1,288 | $ 228,776 | $ 349,621 | $ 808,043 | $1,650,760 | $3,040,357 | $2,885,194 |
| Average\tInterest\tRate\t(a) | 8.69% | 8.85% | 9.07% | 9.99% | 9.54% | 6.68% |  |  |
| Variable\tRate\tDebt\t(a) | $ 75,753 | $ 114,156 | $ 136,275 | $ 378,532 |  |  | $704,716 | $703,781 |

Average	Interest	Rate	(a)

# Aggregate	Notional	Amounts	Associated	with	Interest	Rate	Caps	in	Place

# As	of	December	31,	2003	and	Interest	Rate	Detail	by	Contractual	Maturity	Dates	(In	thousands)

# Aggregate	Notional	Amounts	Associated	with	Interest	Rate	Caps,	Swaps	and	Collars	in	Place

|  | 2003 | 2004 | 2005 | 2006 | 2007 | Thereafter | Total | Value |
| :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- |
| Interest\tRate\tCAPS |  |  |  |  |  |  |  |  |
| Notional\tAmount | $500,000 | $ 500,000(c) |  |  |  |  |  | $150 |
| Cap\tRate\t(b) | 5.00% | 5.00% |  |  |  |  |  |  |
| Interest\tRate\tSWAPS |  |  |  |  |  |  |  |  |
| Notional\tAmount | $400,000(d) |  |  |  |  |  |  | $ (10,383) |
| Weighted-Average\tFixed\tRate\tPayable\t(b) | 5.59% |  |  |  |  |  |  |  |
| Interest\tRate\tCOLLARS |  |  |  |  |  |  |  |  |
| Notional\tAmount | $232,500(e) |  |  |  |  |  |  | $(5,307) |
| Weighted-Average\tBelow\tFloor\tRate\tPayable,\tAbove\tCap |  |  |  |  |  |  |  |  |
| Rate\tReceivable\t(b) | 5.96%,\t8.18% |  |  |  |  |  |  |  |

(a) As	of	December	31,	2003,	variable	rate	debt	consists	of	our	credit	facilities	($704.7	million)	and	fixed	rate	debt	consists	of:	the	2.25%	Notes	($0.1	million);	the 6.25%	Notes	($212.7	million);	the	5.0%	Notes	($349.4	million);	the	3.25%	Notes	($210.0	million);	the	ATI	7.25%	Notes	($400.0	million);	the	ATI	12.25%	Notes ($808.0	million	principal	amount	due	at	maturity;	the	balance	as	of	December	31,	2003	is	$424.2	million	accreted	value,	net	of	the	allocated	fair	value	of	the related	warrants	of	$44.2	million);	the	9	3/8%	Notes	($1.0	billion);	and	other	debt	of	$60.2	million.	Interest	on	the	credit	facilities	is	payable	in	accordance	with	the applicable	London	Interbank	Offering	Rate	(LIBOR)	agreement	or	quarterly	and	accrues	at	our	option	either	at	LIBOR	plus	margin	(as	defined)	or	the	base	rate plus	margin	(as	defined).	The	weighted	average	interest	rate	in	effect	at	December	31,	2003	for	the	credit	facilities	was	4.25%.	For	the	year	ended	December	31, 2003,	the	weighted	average	interest	rate	under	the	credit	facilities	was	3.85%.	The	2.25%	and	6.25%	Notes	each	bear	interest	(after	giving	effect	to	the	accretion of	the	original	discount	on	the	2.25%	Notes)	at	6.25%	per	annum,	which	is	payable	semiannually	on	April	15	and	October	15	of	each	year.	The	5.0%	Notes	bear interest	at	5.0%	per	annum,	which	is	payable	semiannually	on	February	15	and	August	15	of	each	year.	The	ATI	12.25%	Notes	bear	interest	(after	giving	effect	to the	accretion	of	the	original	discount	and	the	accretion	of	the	warrants)	at	14.7%	per	annum,	payable	upon	maturity.	The	9	3/8%	Notes	bear	interest	at	9	3/8%	per annum,	which	is	payable	semiannually	on	February	1	and	August	1	of	each	year.	The	3.25%	Notes	bear	interest	at	3.25%	per	annum,	which	is	payable semiannually	on	February	1	and	August	1	of	each	year.	The	ATI	7.25%	Notes	bear	interest	at	7.25%	per	annum,	which	is	payable	semiannually	on	June	1	and December	1	of	each	year.	Other	debt	consists	of	notes	payable,	capital	leases	and	other	obligations	bearing	interest	at	rates	ranging	from	7.9%	to	12.0%,	payable monthly.	In	January	2004,	we	refinanced	our	$267.0	million	term	loan	B	under	our	credit	facilities,	with	a	new	term	loan	C	due	December	31,	2007.	The	new term	loan	C	has	substantially	the	same	terms	as	term	loan	B,	except	that	the	interest	rate	spreads	for	the	LIBOR	and	base	rate	loans	were	reduced	from	3.5% above	LIBOR	to	2.25%	and	from	2.5%	above	the	base	rate	to	1.25%,	respectively.	In	February	2004,	we	sold	$225.0	million	principal	amount	of	7.50%	senior notes	due	2012	through	an	institutional	private	placement.	The	net	proceeds	of	the	offering	were	approximately	$221.7	million	and	were	used	to	redeem	all	of	our outstanding	6.25%	Notes	and	to	repurchase	$4.5	million	of	our	outstanding	5.0%	Notes.

As	of	December	31,	2002	variable	rate	debt	consists	of	our	credit	facilities	($1.51	billion)	and	fixed	rate	debt	consists	of	the	2.25%	Notes	($210.9	million),	the 6.25%	Notes	($212.7	million),	the	5.0%	Notes	($450.0	million),	the	9	3/8%	Notes	($1.0	billion)	and	other	debt	of	$64.9	million.	Interest	on	the	credit	facilities	is payable	in	accordance	with	the	applicable	London	Interbank	Offering	Rate	(LIBOR)	agreement	or	quarterly	and	accrues	at	our	option	either	at	LIBOR	plus margin	(as	defined)	or	the	base	rate	plus	margin	(as	defined).	The	average	interest	rate	in	effect	at	December	31,	2002	for	the	credit	facilities	was	4.48%.	For	the year	ended	December	31,	2002,	the	weighted	average	interest	rate	under	the	credit	facilities	was	4.41%.	The	2.25%	and	6.25%	Notes	each	bear	interest	(after giving	effect	to	the	accretion	of	the	original	discount	on	the	2.25%	Notes)	at	6.25%	per	annum,	which	is	payable	semiannually	on	April	15	and	October	15	of each	year.	The	5.0%	Notes	bear	interest	at	5.0%	per	annum,	which	is	payable	semiannually	on	February	15	and	August	15	of	each	year.	The	9	3/8%	Notes	bear interest	at	9	3/8%	per	annum,	which	is	payable	semiannually	on	February	1	and	August	1	of	each	year	beginning	August	1,	2001.	Other	debt	consists	of	notes payable,	capital	leases	and	other	obligations	bearing	interest	at	rates	ranging	from	7.1%	to	12.0%,	payable	monthly.

(b) Represents	the	weighted-average	fixed	rate	or	range	of	interest	based	on	contract	notional	amount	as	a	percentage	of	total	notional	amounts	in	a	given	year.

(d) Includes	notional	amounts	of	$215,000	and	$185,000	that	expired	in	February	and	November	2003,	respectively.

We	maintain	a	portion	of	our	cash	and	cash	equivalents	and	restricted	cash	and	investments	in	short-term	financial	instruments	that	are	subject	to	interest	rate risks.	Due	to	the	relatively	short	duration	of	such	instruments,	we	believe	fluctuations	in	interest	rates	with	respect	to	those	investments	will	not	materially	affect	our financial	condition	or	results	of	operations.

Our	foreign	operations	include	rental	and	management	segment	divisions	in	Mexico	and	Brazil.	The	remeasurement	loss	(gain)	for	the	years	ended	December	31, 2003,	2002	and	2001	approximated	$1,142,000	$3,713,000	and	$(207,000),	respectively.

# ITEM	8.				FINANCIAL	STATEMENTS	AND	SUPPLEMENTARY	DATA

# ITEM	9.				CHANGES	IN	AND	DISAGREEMENTS	WITH	ACCOUNTANTS	ON	ACCOUNTING	AND

# ITEM	9A.				CONTROLS	AND	PROCEDURES

We	have	established	disclosure	controls	and	procedures	to	ensure	that	material	information	relating	to	us,	including	our	consolidated	subsidiaries,	is	made	known to	the	officers	who	certify	our	financial	reports	and	to	other	members	of	senior	management	and	the	Board	of	Directors.

(a)	Evaluation	of	disclosure	controls	and	procedures.	Our	management,	with	the	participation	of	our	principal	executive	officer	and	principal	financial	officer,	has evaluated	the	effectiveness	of	the	design	and	operation	of	our	disclosure	controls	and	procedures	(as	defined	in	Rules	13a-15(e)	and	15d-15(e)	under	the	Securities Exchange	Act	of	1934,	as	amended)	as	of	the	end	of	the	period	covered	by	this	Annual	Report	on	Form	10-K.	Based	on	this	evaluation,	our	principal	executive	officer and	principal	financial	officer	concluded	that	these	disclosure	controls	and	procedures	are	effective	and	designed	to	ensure	that	the	information	required	to	be	disclosed in	our	reports	filed	or	submitted	under	the	Securities	Exchange	Act	of	1934	is	recorded,	processed,	summarized	and	reported	within	the	requisite	time	periods.

(b)	Changes	in	internal	controls.	There	was	no	change	in	our	internal	control	over	financial	reporting	(as	defined	in	Rules	13a-15(f)	and	15d-15(f)	under	the Securities	Exchange	Act	of	1934,	as	amended)	identified	in	connection	with	the	evaluation	of	our	internal	control	performed	during	our	last	fiscal	quarter	that	has materially	affected,	or	is	reasonably	likely	to	materially	affect,	our	internal	control	over	financial	reporting.

# PART	III

# ITEM	10.				DIRECTORS	AND	EXECUTIVE	OFFICERS	OF	THE	REGISTRANT

Our	executive	officers	and	their	respective	ages	and	positions	as	of	March	5,	2004	are	set	forth	below:

James	D.	Taiclet,	Jr.	is	our	Chairman,	President	and	Chief	Executive	Officer.	Mr.	Taiclet	joined	us	in	September	2001	as	President	and	Chief	Operating	Officer, was	named	our	Chief	Executive	Officer	in	October	2003,	was	elected	as	a	director	in	November	2003,	and	was	named	our	Chairman	in	February	2004.	Prior	to	joining us,	Mr.	Taiclet	had	been	President	of	Honeywell	Aerospace	Services,	a	part	of	Honeywell	International,	since	March	1999.	Mr.	Taiclet	was	with	United	Technologies from	March	1996	until	March	1999,	serving	as	Vice	President,	Pratt	&	Whitney	Engine	Services.	Mr.	Taiclet	received	a	Masters	in	Public	Affairs	from	Princeton University,	where	he	was	a	Wilson	Fellow,	and	is	a	graduate	of	the	United	States	Air	Force	Academy.

J.	Michael	Gearon,	Jr.	is	our	Vice	Chairman	and	President,	American	Tower	International,	and	was	a	director	from	the	time	of	our	acquisition	of	Gearon Communications	in	January	1998	until	May	2003.	From	January	1998	until	January	2002,	Mr.	Gearon	served	as	an	Executive	Vice	President.	Prior	to	joining	us,	Mr. Gearon	had	been	the	founder	and	Chief	Executive	Officer	of	Gearon	Communications	since	September	1991.	Mr.	Gearon	currently	serves	as	a	director	of	TV	Azteca, S.A.	de	C.V.	Mr.	Gearon	is	a	graduate	of	Georgia	State	University.

Bradley	E.	Singer	is	our	Chief	Financial	Officer	and	Treasurer.	Mr.	Singer	joined	us	in	September	2000	as	Executive	Vice	President,	Strategy,	and	was appointed	Vice	President	and	General	Manager	of	the	Southeast	Region	in	November	2000,	positions	he	held	until	July	2001.	He	was	appointed	Executive	Vice President,	Finance	in	July	2001,	and	appointed	to	his	current	position	in	December	2001.	Prior	to	joining	us,	Mr.	Singer	was	an	investment	banker	focusing	on	the telecommunications	industry	with	Goldman,	Sachs	&	Co.,	which	he	joined	in	1997.	Mr.	Singer	received	an	M.B.A.	degree	from	Harvard	University,	and	is	a	graduate of	the	University	of	Virginia.

Steven	J.	Moskowitz	is	our	Executive	Vice	President	and	President,	U.S.	Tower	Division.	Mr.	Moskowitz	joined	us	in	January	1998,	initially	as	a	Vice	President and	General	Manager	of	our	Northeast	Region,	and	was	appointed	Executive	Vice	President,	Marketing,	and	Vice	President	and	General	Manager	of	our	Northeast Region	in	March	1999.	He	was	named	Executive	Vice	President,	U.S.	Tower	Division	in	January	2002	and	named	President	of	the	U.S.	Tower	Division	in	October 2003.	Prior	to	joining	us,	Mr.	Moskowitz	had	served	as	a	Vice	President	of	The	Katz	Media	Group,	the	largest	broadcast	media	representation	firm	in	the	United	States, since	1989.	Mr.	Moskowitz	received	his	undergraduate	degree	from	Temple	University.

William	H.	Hess	is	our	Executive	Vice	President	and	General	Counsel.	Mr.	Hess	joined	us	in	2001	as	Chief	Financial	Officer	of	American	Tower	International, and	was	appointed	Executive	Vice	President	in	May	2001.	Mr.	Hess	was	appointed	to	his	current	position	in	September	2002.	Prior	to	joining	us,	Mr.	Hess	had	been	a partner	with	the	law	firm	of	King	&	Spalding,	LLP,	which	he	joined	in	1990.	Mr.	Hess	received	a	J.D.	degree	from	Vanderbilt	University	Law	School,	and	is	a	graduate of	Harding	University.

Timothy	F.	Allen	is	our	Vice	President	of	Finance	and	Corporate	Controller.	Mr.	Allen	joined	us	in	February	1999	as	Manager	of	Financial	Reporting	and	was appointed	Vice	President	of	Finance	in	February	2002.	Mr.	Allen	was	appointed	to	his	current	position	in	April	2003.	Prior	to	joining	us,	Mr.	Allen	was	a	senior	manager with	the	accounting	firm	of	KPMG	LLP.	Mr.	Allen	is	a	graduate	of	Providence	College.

The	information	under	"Election	of	Directors"	and	"Section	16(a)	Beneficial	Ownership	Reporting	Compliance"	from	the	Definitive	Proxy	Statement	is	hereby incorporated	by	reference	herein.	Information	required	by	this	item	pursuant	to	Item	401(h)	and	401(i)	of	Regulation	S-K	relating	to	our	audit	committee	financial experts	and	identification	of	the	audit	committee	of	our	board	of	directors	is	contained	in	the	Definitive	Proxy	Statement	under	"Corporate	Governance"	and	is incorporated	herein	by	reference.

Information	regarding	our	code	of	ethics	applicable	to	our	principal	executive	officer,	our	principal	financial	officer,	our	controller	and	other	senior	financial officers	appears	in	Item	1	of	this	report.	See	"Business—Available	Information."

# ITEM	11.				EXECUTIVE	COMPENSATION

The	information	under	"Compensation	and	Other	Information	Concerning	Directors	and	Officers"	from	the	Definitive	Proxy	Statement	is	hereby	incorporated	by reference.

# ITEM	12.				SECURITY	OWNERSHIP	OF	CERTAIN	BENEFICIAL	OWNERS	AND	MANAGEMENT

# AND	RELATED	STOCKHOLDER	MATTERS

The	information	under	"Security	Ownership	of	Certain	Beneficial	Owners	and	Management"	and	"Securities	Authorized	for	Issuance	Under	Equity Compensation	Plans"	from	the	Definitive	Proxy	Statement	is	hereby	incorporated	by	reference	herein.

# ITEM	13.				CERTAIN	RELATIONSHIPS	AND	RELATED	TRANSACTIONS

The	information	under	"Certain	Relationships	and	Related	Transactions"	from	the	Definitive	Proxy	Statement	is	hereby	incorporated	by	reference	herein.

# ITEM	14.				PRINCIPAL	ACCOUNTANT	FEES	AND	SERVICES

The	information	under	"Independent	Auditor	Fees	and	Other	Matters"	from	the	Definitive	Proxy	Statement	is	hereby	incorporated	by	reference	herein.

# PART	IV

# ITEM	15.				EXHIBITS,	FINANCIAL	STATEMENT	SCHEDULES,	AND	REPORTS	ON	FORM	8-K

(a)		Financial	Statements	and	Schedules.				See	Index	to	Consolidated	Financial	Statements,	which	appears	on	page	F-1	hereof.	All	schedules	are	omitted	because they	are	not	applicable	or	because	the	required	information	is	contained	in	the	consolidated	financial	statements	or	notes	included	in	this	annual	report	on	Form	10-K.

(c)		Exhibits.				The	exhibits	listed	on	the	Exhibit	Index	hereof	are	filed	herewith	in	response	to	this	Item.

# SIGNATURES

Pursuant	to	the	requirements	of	Section	13	or	15(d)	of	the	Securities	Exchange	Act	of	1934,	the	Registrant	has	duly	caused	this	report	to	be	signed	on	its behalf	by	the	undersigned,	thereunto	duly	authorized	on	the	12th	day	of	March	2004.

James	D.	Taiclet,	Jr.

Chairman,	President	and

Chief	Executive	Officer

Pursuant	to	the	requirements	of	the	Securities	Exchange	Act	of	1934,	this	report	has	been	duly	signed	below	by	the	following	persons	on	behalf	of	the Registrant	and	in	the	capacities	and	on	the	dates	indicated.

# INDEX	TO	CONSOLIDATED	FINANCIAL	STATEMENTS

# INDEPENDENT	AUDITORS'	REPORT

# To	the	Board	of	Directors	of

We	have	audited	the	accompanying	consolidated	balance	sheets	of	American	Tower	Corporation	and	subsidiaries	(the	"Company")	as	of	December	31,	2003	and 2002,	and	the	related	consolidated	statements	of	operations,	stockholders'	equity,	and	cash	flows	for	each	of	the	three	years	in	the	period	ended	December	31,	2003. These	financial	statements	are	the	responsibility	of	the	Company'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	consolidated	financial	statements	present	fairly,	in	all	material	respects,	the	financial	position	of	the	Company	as	of	December	31,	2003	and 2002,	and	the	results	of	its	operations	and	its	cash	flows	for	each	of	the	three	years	in	the	period	ended	December	31,	2003	in	conformity	with	accounting	principles generally	accepted	in	the	United	States	of	America.

As	discussed	in	notes	1	and	8	to	the	consolidated	financial	statements,	in	2001	the	Company	adopted	the	provisions	of	Statement	of	Financial	Accounting Standard	No.	133,	"Accounting	for	Derivative	Instruments	and	Hedging	Activities,"	as	amended.	Also,	as	discussed	in	notes	1	and	5	to	the	consolidated	financial statements,	in	2002	the	Company	adopted	Statement	of	Financial	Accounting	Standard	No.	142,	"Goodwill	and	Other	Intangible	Assets."

Boston,	Massachusetts March	12,	2004

# AMERICAN	TOWER	CORPORATION	AND	SUBSIDIARIES

# CONSOLIDATED	BALANCE	SHEETS

# (In	thousands,	except	share	data)

|  | 2003 | 2002 |
| :--- | :--- | :--- |
| ASSETS |  |  |
| CURRENT\tASSETS: |  |  |
| Cash\tand\tcash\tequivalents | $105,465 | $127,292 |
| Restricted\tcash\tand\tinvestments | 170,036 |  |
| Accounts\treceivable,\tnet\tof\tallowance\tfor\tdoubtful\taccounts | 57,735 | 64,889 |
| Prepaid\tand\tother\tcurrent\tassets | 34,105 | 49,324 |
| Costs\tand\tearnings\tin\texcess\tof\tbillings\ton\tuncompleted\tcontracts\tand\tunbilled\treceivables | 19,933 | 21,955 |
| Deferred\tincome\ttaxes | 14,122 | 13,111 |
| Assets\theld\tfor\tsale | 10,119 | 314,205 |
| Total\tcurrent\tassets | 411,515 | 590,776 |
| PROPERTY\tAND\tEQUIPMENT,\tnet | 2,546,525 | 2,694,999 |
| OTHER\tINTANGIBLE\tASSETS,\tnet | 1,057,077 | 1,138,318 |
| GOODWILL,\tnet | 592,683 | 592,683 |
| DEFERRED\tINCOME\tTAXES | 449,180 | 383,431 |
| NOTES\tRECEIVABLE\tAND\tOTHER\tLONG-TERM\tASSETS | 275,508 | 261,996 |
| TOTAL | $5,332,488 | $5,662,203 |
| LIABILITIES\tAND\tSTOCKHOLDERS'\tEQUITY |  |  |
| CURRENT\tLIABILITIES: |  |  |
| Accounts\tpayable\tand\taccrued\texpenses | $107,557 | $113,380 |
| Accrued\tinterest | 59,734 | 63,611 |
| Current\tportion\tof\tlong-term\tobligations | 77,622 | 269,858 |
| Billings\tin\texcess\tof\tcosts\ton\tuncompleted\tcontracts\tand\tunearned\trevenue | 41,449 | 38,733 |
| Liabilities\theld\tfor\tsale | 8,416 | 200,696 |
| Total\tcurrent\tliabilities | 294,778 | 686,278 |
| LONG-TERM\tOBLIGATIONS | 3,283,603 | 3,178,656 |
| OTHER\tLONG-TERM\tLIABILITIES | 23,961 | 41,379 |
| Total\tliabilities | 3,602,342 | 3,906,313 |
| COMMITMENTS\tAND\tCONTINGENCIES |  |  |
| MINORITY\tINTEREST\tIN\tSUBSIDIARIES | 18,599 | 15,567 |
| STOCKHOLDERS'\tEQUITY: |  |  |
| 211,710,437\tand\t185,499,028\tshares\toutstanding,\trespectively | 2,119 | 1,856 |
| outstanding,\trespectively | 70 | 79 |
| outstanding,\trespectively | 12 | 23 |
| Additional\tpaid-in\tcapital | 3,910,879 | 3,642,019 |
| Accumulated\tdeficit | (2,190,447) | (1,887,030) |
| Accumulated\tother\tcomprehensive\tloss |  | (5,564) |
| Note\treceivable | (6,720) | (6,720) |
| Treasury\tstock\t(145,221\tand\t144,597\tshares\tat\tcost) | (4,366) | (4,340) |
| Total\tstockholders'\tequity | 1,711,547 | 1,740,323 |
| TOTAL | $5,332,488 | $5,662,203 |

# CONSOLIDATED	STATEMENTS	OF	OPERATIONS

# (In	thousands,	except	per	share	data)

|  | 2003 | 2002 | 2001 |
| :--- | :--- | :--- | :--- |
| REVENUES: |  |  |  |
| Rental\tand\tmanagement | $619,697 | $544,906 | $431,051 |
| Network\tdevelopment\tservices | 95,447 | 130,176 | 223,926 |
| Total\toperating\trevenues | 715,144 | 675,082 | 654,977 |
| OPERATING\tEXPENSES: |  |  |  |
| Rental\tand\tmanagement | 222,724 | 226,786 | 209,923 |
| Network\tdevelopment\tservices | 88,943 | 118,591 | 199,568 |
| Depreciation\tand\tamortization | 313,465 | 312,866 | 334,917 |
| Corporate\tgeneral,\tadministrative\tand\tdevelopment\texpense | 26,867 | 30,229 | 34,310 |
| Impairments,\tnet\tloss\ton\tsale\tof\tlong-lived\tassets\tand\trestructuring\texpense | 31,656 | 101,372 | 79,496 |
| Total\toperating\texpenses | 683,655 | 789,844 | 858,214 |
| OPERATING\tINCOME\t(LOSS)\tFROM\tCONTINUING\tOPERATIONS | 31,489 | (114,762) | (203,237) |
| OTHER\tINCOME\t(EXPENSE): |  |  |  |
| Interest\tincome,\tTV\tAzteca,\tnet\tof\tinterest\texpense\tof\t$1,496,\t$1,494\tand\t$1,160,\trespectively | 14,222 | 13,938 | 14,377 |
| Interest\tincome | 5,255 | 3,496 | 28,372 |
| Interest\texpense | (279,875) | (254,446) | (267,199) |
| Loss\ton\tretirement\tof\tlong-term\tobligations | (46,197) | (8,869) | (26,336) |
| Loss\ton\tinvestments\tand\tother\texpense | (29,819) | (25,559) | (38,795) |
| Minority\tinterest\tin\tnet\tearnings\tof\tsubsidiaries | (3,703) | (2,118) | (318) |
| Total\tother\texpense | (340,117) | (273,558) | (289,899) |
| LOSS\tFROM\tCONTINUING\tOPERATIONS\tBEFORE\tINCOME\tTAXES | (308,628) | (388,320) | (493,136) |
| INCOME\tTAX\tBENEFIT | 66,137 | 67,783 | 102,032 |
| LOSS\tFROM\tCONTINUING\tOPERATIONS\tBEFORE\tCUMULATIVE\tEFFECT\tOF\tCHANGE\tIN |  |  |  |
| ACCOUNTING\tPRINCIPLE | (242,491) | (320,537) | (391,104) |
| LOSS\tFROM\tDISCONTINUED\tOPERATIONS,\tNET\tOF\tINCOME\tTAX\tBENEFIT\tOF\t$12,034,\t$30,531 |  |  |  |
| AND\t$14,755,\tRESPECTIVELY | (60,926) | (258,724) | (58,990) |
| LOSS\tBEFORE\tCUMULATIVE\tEFFECT\tOF\tCHANGE\tIN\tACCOUNTING\tPRINCIPLE | (303,417) | (579,261) | (450,094) |
| CUMULATIVE\tEFFECT\tOF\tCHANGE\tIN\tACCOUNTING\tPRINCIPLE,\tNET\tOF\tINCOME\tTAX\nBENEFIT\tOF\t$14,438 |  | (562,618) |  |
| NET\tLOSS | $(303,417) | $(1,141,879) | $(450,094) |
| BASIC\tAND\tDILUTED\tLOSS\tPER\tCOMMON\tSHARE\tAMOUNTS: |  |  |  |
| Loss\tfrom\tcontinuing\toperations\tbefore\tcumulative\teffect\tof\tchange\tin\taccounting\tprinciple | $(1.17) | $(1.64) | $(2.04) |
| Loss\tfrom\tdiscontinued\toperations | (0.29) | (1.32) | (0.31) |
| Cumulative\teffect\tof\tchange\tin\taccounting\tprinciple |  | (2.88) |  |
| NET\tLOSS\tPER\tCOMMON\tSHARE | $(1.46) | $(5.84) | $(2.35) |
| WEIGHTED\tAVERAGE\tCOMMON\tSHARES\tOUTSTANDING | 208,098 | 195,454 | 191,586 |

# CONSOLIDATED	STATEMENTS	OF	STOCKHOLDERS'	EQUITY

|  | Class	A<br>Issued<br>Shares | Amount | Class	B<br>Issued<br>Shares | Amount | Class	C<br>Issued<br>Shares | Amount | Treasury	Stock<br>Shares | Amount | Note<br>Receivable | Additional<br>Paid-in<br>Capital | Accumulated<br>Other<br>Compre<br>hensive	Loss | Accumulated<br>Deficit | Total<br>Stockholders'<br>Equity | Total<br>Comprehensive<br>Loss |
| :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- |
| BALANCE,\tJANUARY\t1,\n2001 | \t 170,180,549\t $ | 1,701\t 8,095,005\t\t $ | 1,701\t 8,095,005\t\t $ | 81 | 2,267,813\t\t $ | 23 | (144,597)\t $ | (4,340) |  | \t\t $3,174,622 |  | $(295,057) | $2,877,030 |  |
| 2.25%\tconvertible\tnotes |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
| exchanged\tfor\tcommon |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
| stock | 3,962,537 | 40 |  |  |  |  |  |  |  | 86,403 |  |  | 86,443 |  |
| Issuance\tof\tcommon\tstock\t- |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
| January\toffering\tand |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
| March\ttransaction | 10,100,000 | 101 |  |  |  |  |  |  |  | 363,150 |  |  | 363,251 |  |
| Issuance\tof\tcommon\tstock, |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
| options,\tand\twarrants\t- |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
| mergers | 377,394 | 4 |  |  |  |  |  |  |  | 8,454 |  |  | 8,458 |  |
| Issuance\tof\tcommon\tstock\t- |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
| Employee\tStock |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
| Purchase\tPlan | 231,257 | 2 |  |  |  |  |  |  |  | 2,750 |  |  | 2,752 |  |
| Issuance\tof\tnote\tto |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
| executive\tofficer |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
| (secured\tby\tclass\tA |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
| common\tstock) |  |  |  |  |  |  |  | \t\t $(6,720) | \t\t $(6,720) |  |  |  | (6,720) |  |
| Stock\toption\tactivity | 217,658 | 2 |  |  |  |  |  |  |  | 3,130 |  |  | 3,132 |  |
| Share\tclass\texchanges | 93,236 | 1 | (93,236) | (1) |  |  |  |  |  |  |  |  |  |  |
| Net\tchange\tin\tfair\tvalue\tof |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
| cash\tflow\thedges,\tnet\tof |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
| tax |  |  |  |  |  |  |  |  |  |  | \t $(17,506) |  | (17,506) | $(17,506) |
| Reclassification\tadjustment |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
| for\trealized\tlosses\ton |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
| derivative\tinstruments, |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
| net\tof\ttax |  |  |  |  |  |  |  |  |  |  | 9,405 |  | 9,405 | 9,405 |
| Cumulative\teffect |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
| adjustment\trecorded |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
| upon\tadoption\tof\tSFAS |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
| No.\t133,\tnet\tof\ttax |  |  |  |  |  |  |  |  |  |  | (7,852) |  | (7,852) | (7,852) |
| Foreign\tcurrency\ttranslation |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
| adjustment |  |  |  |  |  |  |  |  |  |  | (104) |  | (104) | (104) |
| Tax\tbenefit\tof\tstock\toptions |  |  |  |  |  |  |  |  |  | 1,001 |  |  | 1,001 |  |
| Net\tloss |  |  |  |  |  |  |  |  |  |  |  | (450,094) | (450,094) | (450,094) |
| Total |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
| comprehensive |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
| loss |  |  |  |  |  |  |  |  |  |  |  |  |  | $(466,151) |
| BALANCE,\tDECEMBER\n31,\t2001 | \t 185,162,631\t $ | 1,851\t 8,001,769\t\t $ | 1,851\t 8,001,769\t\t $ | 80 | 2,267,813\t\t $ | 23 | (144,597)\t $ | (4,340)\t $ | (6,720)\t $3,639,510\t $ | (6,720)\t $3,639,510\t $ | (16,057) | $(745,151) | $2,869,196 |  |
| Issuance\tof\tcommon\tstock\t- |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
| Employee\tStock |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
| Purchase\tPlan | 396,295 | 4 |  |  |  |  |  |  |  | 2,509 |  |  | 2,513 |  |
| Share\tclass\texchanges | 84,699 | 1 | (84,699) | (1) |  |  |  |  |  |  |  |  |  |  |
| Net\tchange\tin\tfair\tvalue\tof |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
| cash\tflow\thedges,\tnet\tof |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
| tax |  |  |  |  |  |  |  |  |  |  | (9,138) |  | (9,138) | (9,138) |
| Reclassification\tadjustment |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
| for\trealized\tlosses\ton |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
| derivative\tinstruments, |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
| net\tof\ttax |  |  |  |  |  |  |  |  |  |  | 19,527 |  | 19,527 | 19,527 |
| Foreign\tcurrency\ttranslation |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
| adjustment |  |  |  |  |  |  |  |  |  |  | 104 |  | 104 | 104 |
| Net\tloss |  |  |  |  |  |  |  |  |  |  |  | (1,141,879) | (1,141,879) | (1,141,879) |
| Total |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
| comprehensive |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
| loss |  |  |  |  |  |  |  |  |  |  |  |  |  | $(1,131,386) |
| BALANCE,\tDECEMBER\n31,\t2002 | \t 185,643,625\t $ | 1,856\t 7,917,070\t\t $ | 1,856\t 7,917,070\t\t $ | 79 | 2,267,813\t\t $ | 23 | (144,597)\t $ | (4,340)\t $ | (6,720)\t $3,642,019\t $ | (6,720)\t $3,642,019\t $ | (5,564) | $(1,887,030) | $1,740,323 |  |
| Issuance\tof\tcommon\tstock\t- |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
| August\toffering | 14,260,000 | 143 |  |  |  |  |  |  |  | 120,200 |  |  | 120,343 |  |
| 2.25%\tconvertible\tnotes |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
| exchanged\tfor\tcommon |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
| stock | 8,415,984 | 84 |  |  |  |  |  |  |  | 86,045 |  |  | 86,129 |  |
| 12.25%\tsenior\tsubordinated |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
| discount\tnotes\t- |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
| Warrants |  |  |  |  |  |  |  |  |  | 52,525 |  |  | 52,525 |  |
| Issuance\tof\tcommon\tstock\t- |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
| Employee\tStock |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
| Purchase\tPlan | 200,287 | 2 |  |  |  |  |  |  |  | 959 |  |  | 961 |  |
| Share\tclass\texchanges | 1,990,440 | 20 | (947,541) | (9) | (1,042,899) | (11) |  |  |  |  |  |  |  |  |
| Stock\toption\tactivity | 1,345,322 | 14 |  |  |  |  |  |  |  | 7,859 |  |  | 7,873 |  |
| Treasury\tstock\ttransaction |  |  |  |  |  |  | (624) | (26) |  |  |  |  | (26) |  |
| Net\tchange\tin\tfair\tvalue\tof |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
| cash\tflow\thedges,\tnet\tof |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
| tax |  |  |  |  |  |  |  |  |  |  | (329) |  | (329) | (329) |
| Reclassification\tadjustment |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
| for\trealized\tlosses\ton |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
| derivative\tinstruments, |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
| net\tof\ttax |  |  |  |  |  |  |  |  |  |  | 5,893 |  | 5,893 | 5,893 |
| Tax\tbenefit\tof\tstock\toptions |  |  |  |  |  |  |  |  |  | 1,272 |  |  | 1,272 |  |
| Net\tloss |  |  |  |  |  |  |  |  |  |  |  | (303,417) | (303,417) | (303,417) |
| Total |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
| comprehensive |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
| loss |  |  |  |  |  |  |  |  |  |  |  |  |  | $(297,853) |

# BALANCE,	DECEMBER

# See	notes	to	consolidated	financial	statements.

# CONSOLIDATED	STATEMENTS	OF	CASH	FLOWS

# (In	thousands)

|  | 2003 | 2002 | 2001 |
| :--- | :--- | :--- | :--- |
| CASH\tFLOWS\tPROVIDED\tBY\tOPERATING\tACTIVITIES: |  |  |  |
| Net\tloss | $(303,417) | $(1,141,879) | $(450,094) |
| Adjustments\tto\treconcile\tnet\tloss\tto\tcash\tprovided\tby\toperating\tactivities: |  |  |  |
| Cumulative\teffect\tof\tchange\tin\taccounting\tprinciple,\tnet |  | 562,618 |  |
| Depreciation\tand\tamortization | 313,465 | 312,866 | 334,917 |
| Minority\tinterest\tin\tnet\tearnings\tof\tsubsidiaries | 3,703 | 2,118 | 318 |
| Loss\ton\tinvestments\tand\tother\tnon-cash\texpense | 20,525 | 20,286 | 36,784 |
| Impairments,\tnet\tloss\ton\tsale\tof\tlong-lived\tassets\tand\tnon-cash\trestructuring\texpense | 29,400 | 90,734 | 74,260 |
| Loss\ton\tretirement\tof\tlong-term\tobligations | 46,197 | 8,869 | 26,336 |
| Amortization\tof\tdeferred\tfinancing\tcosts | 14,608 | 11,972 | 11,959 |
| Provision\tfor\tlosses\ton\taccounts\treceivable | 21,940 | 15,654 | 15,057 |
| Amortization\tof\tdebt\tand\tnote\treceivable\tdiscount | 60,987 | 6,194 | 7,286 |
| Deferred\tincome\ttaxes | (66,137) | (70,930) | (105,656) |
| Non-cash\titems\treported\tin\tdiscontinued\toperations\t(primarily\tdepreciation,\tasset\timpairments |  |  |  |
| and\tnet\tlosses\ton\tdispositions) | 50,385 | 262,612 | 92,845 |
| Changes\tin\tassets\tand\tliabilities,\tnet\tof\tacquisitions\tand\tdispositions: |  |  |  |
| Accounts\treceivable | (3,649) | 23,621 | (11,132) |
| Prepaid\tand\tother\tcurrent\tassets | (17,503) | 9,853 | (47,322) |
| Costs\tand\tearnings\tin\texcess\tof\tbillings\ton\tuncompleted\tcontracts\tand\tunbilled\treceivables | 5,595 | 19,136 | (2,801) |
| Accounts\tpayable\tand\taccrued\texpenses | 312 | (26,124) | 1,793 |
| Accrued\tinterest | (4,363) | 4,647 | 27,784 |
| Billings\tin\texcess\tof\tcosts\tand\tearnings\ton\tuncompleted\tcontracts\tand\tunearned\trevenue | (3,139) | (5,684) | (3,291) |
| Other\tlong-term\tliabilities | (12,523) | (1,414) | 17,027 |
| Cash\tprovided\tby\toperating\tactivities | 156,386 | 105,149 | 26,070 |
| CASH\tFLOWS\tUSED\tFOR\tINVESTING\tACTIVITIES: |  |  |  |
| Payments\tfor\tpurchase\tof\tproperty\tand\tequipment\tand\tconstruction\tactivities | (61,608) | (180,497) | (568,158) |
| Payments\tfor\tacquisitions,\tnet\tof\tcash\tacquired | (95,077) | (56,361) | (812,782) |
| Proceeds\tfrom\t(advances\tof)\tnotes\treceivable,\tnet | 6,946 | 5,068 | (3,824) |
| Proceeds\tfrom\tsales\tof\tbusinesses\tand\tother\tlong-term\tassets | 110,753 | 109,353 | 1,680 |
| Distributions\tto\tminority\tinterest | (671) | (488) | (763) |
| Deposits,\tinvestments\tand\tother\tlong-term\tassets | (16,353) | 7,668 | (61,456) |
| Cash\tused\tfor\tinvesting\tactivities | (56,010) | (115,257) | (1,445,303) |
| CASH\tFLOWS\t(USED\tFOR)\tPROVIDED\tBY\tFINANCING\tACTIVITIES: |  |  |  |
| Proceeds\tfrom\tissuance\tof\tdebt\tsecurities\tand\tnotes\tpayable | 1,032,384 |  | 1,000,000 |
| Net\tproceeds\tfrom\tequity\tofferings,\tstock\toptions\tand\temployee\tstock\tpurchase\tplan | 126,847 | 1,305 | 366,671 |
| Borrowings\tunder\tcredit\tfacilities |  | 160,000 | 181,500 |
| Repayment\tof\tnotes\tpayable,\tcredit\tfacilities\tand\tcapital\tleases | (1,071,956) | (148,270) | (81,133) |
| Restricted\tcash\tand\tinvestments | (170,036) | 94,071 | (48,035) |
| Deferred\tfinancing\tcosts\tand\tother\tfinancing\tactivities | (39,442) | (5,664) | (45,850) |
| Cash\t(used\tfor)\tprovided\tby\tfinancing\tactivities | (122,203) | 101,442 | 1,373,153 |
| NET\t(DECREASE)\tINCREASE\tIN\tCASH\tAND\tCASH\tEQUIVALENTS | (21,827) | 91,334 | (46,080) |
| CASH\tAND\tCASH\tEQUIVALENTS,\tBEGINNING\tOF\tYEAR | 127,292 | 35,958 | 82,038 |
| CASH\tAND\tCASH\tEQUIVALENTS,\tEND\tOF\tYEAR | $105,465 | $127,292 | $35,958 |

# NOTES	TO	CONSOLIDATED	FINANCIAL	STATEMENTS

# 1.				BUSINESS	AND	SUMMARY	OF	SIGNIFICANT	ACCOUNTING	POLICIES

Business—American	Tower	Corporation	and	subsidiaries	(collectively,	ATC	or	the	Company),	is	an	independent	owner,	operator	and	developer	of	wireless	and broadcast	communications	sites	in	the	United	States,	Mexico	and	Brazil.	The	Company's	primary	business,	as	discussed	in	note	16,	is	the	leasing	of	antenna	space	on multi-tenant	communications	towers	to	wireless	service	providers	and	radio	and	television	broadcast	companies.	The	Company	also	provides	network	development services	to	wireless	service	providers	and	broadcasters.	During	2003	and	2002,	the	Company	sold	or	committed	to	sell	certain	non-core	businesses,	which	have	been reported	as	discontinued	operations.	(See	note	2.)

Principles	of	Consolidation	and	Basis	of	Presentation—The	accompanying	consolidated	financial	statements	include	the	accounts	of	the	Company	and	its	subsidiaries. All	significant	intercompany	accounts	and	transactions	have	been	eliminated.	The	Company	consolidates	those	entities	in	which	it	owns	greater	than	fifty	percent	of	the entity's	voting	stock,	with	the	exception	of	its	wholly	owned	subsidiary,	Verestar,	Inc.	(Verestar),	as	discussed	in	note	2.

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	the	amounts	reported	in	the	financial	statements	and	accompanying	notes.	Actual	results	may	differ	from those	estimates,	and	such	differences	could	be	material	to	the	accompanying	consolidated	financial	statements.	The	significant	estimates	in	the	accompanying consolidated	financial	statements	include	revenue	recognition	under	the	percentage	of	completion	method,	impairment	of	cost	and	equity	investments,	impairment	of long-lived	assets	(including	goodwill),	allowances	for	accounts	receivable	and	valuation	allowances	related	to	deferred	tax	assets.

Revenue	Recognition—Rental	and	management	revenues	are	recognized	on	a	monthly	basis	under	lease	or	management	agreements	when	earned.	Fixed	escalation clauses	present	in	non-cancelable	lease	agreements,	excluding	those	tied	to	the	Consumer	Price	Index	(CPI),	and	other	incentives	present	in	lease	agreements	with	the Company's	customers	are	recognized	on	a	straight-line	basis	over	the	terms	of	the	applicable	leases.	Straight-line	revenues	for	the	years	ended	December	31,	2003,	2002 and	2001	approximated	$22,944,000,	$25,725,000	and	$22,653,000,	respectively.	Amounts	billed	up-front	for	certain	services	provided	in	connection	with	the	execution of	lease	agreements	are	initially	deferred	and	recognized	as	revenue	over	the	terms	of	the	applicable	leases.	Amounts	billed	or	received	prior	to	being	earned	are	deferred and	reflected	in	unearned	revenue	in	the	accompanying	consolidated	balance	sheets	until	such	time	as	the	earnings	process	is	complete.

Network	development	service	revenues	are	derived	under	contracts	or	arrangements	with	customers	that	provide	for	billings	on	a	time	and	materials,	cost	plus	profit	or fixed	price	basis.	Revenues	are	recognized	as	services	are	performed	with	respect	to	the	time	and	materials	and	cost	plus	profit	contracts.	Revenues	are	recognized	using the	percentage-of-completion	method	for	fixed	price	contracts.	Under	the	percentage-of-completion	methodology,	revenues	are	recognized	in	accordance	with	the percentage	of	contract	costs	incurred	to	date	compared	to	estimated	total	contract	costs.	Costs	and	earnings	in	excess	of	billings	on	uncompleted	contracts	represent revenues	recognized	in	excess	of	amounts	billed.	Billings	in	excess	of	costs	and	earnings	on	uncompleted	contracts	represent	billings	in	excess	of	revenues	recognized. Changes	to	total	estimated	contract	costs	or	losses,	if	any,	are	recognized	in	the	period	in	which	they	are	determined.

Corporate	General,	Administrative	and	Development	Expense—Corporate	general	and	administrative	expense	consists	of	corporate	overhead	costs	not	specifically allocable	to	any	of	the	Company's	individual	business	segments.	Development	expense	consists	of	uncapitalized	acquisition	costs,	costs	to	integrate	acquisitions,	costs associated	with	new	business	initiatives,	abandoned	acquisition	costs	and	costs	associated	with	tower	site	inspections	and	related	data	gathering.

# NOTES	TO	CONSOLIDATED	FINANCIAL	STATEMENTS—(Continued)

Loss	on	Retirement	of	Long-Term	Obligations—Loss	on	retirement	of	long-term	obligations	primarily	includes	non-cash	charges	related	to	the	write-off	of	deferred financing	fees	as	well	as	non-cash	charges	related	to	the	fair	value	of	incremental	stock	issued	to	induce	convertible	noteholders	to	convert	their	holdings	prior	to	the scheduled	redemption	date.	Such	amounts	are	expensed	as	incurred	in	accordance	with	Statement	of	Financial	Accounting	Standard	(SFAS)	No.	84	"Induced Conversions	of	Convertible	Debt."	(See	note	7.)	Loss	on	retirement	of	long-term	obligations	also	includes	gains	from	repurchasing	certain	of	the	Company's	debt obligations.

Concentrations	of	Credit	Risk—Financial	instruments	that	potentially	subject	the	Company	to	concentrations	of	credit	risk	are	primarily	cash	and	cash	equivalents, restricted	cash	and	investments,	notes	receivable,	trade	receivables	and	derivative	instruments.	The	Company	mitigates	its	risk	with	respect	to	cash	and	cash	equivalents, restricted	cash	and	investments	and	derivative	instruments	by	maintaining	its	deposits	and	contracts	at	high	quality	financial	institutions	and	monitoring	the	credit	ratings of	those	institutions.

The	Company	mitigates	its	concentrations	of	credit	risk	with	respect	to	notes	and	trade	receivables	by	actively	monitoring	the	credit	worthiness	of	its	borrowers	and customers.	Accounts	receivable	are	reported	net	of	allowances	of	$17,445,000,	$16,041,000	and	$23,804,000	as	of	December	31,	2003,	2002	and	2001,	respectively. Net	amounts	charged	against	allowances,	net	of	recoveries,	for	the	years	ended	December	31,	2003,	2002	and	2001	approximated	$20,536,000,	$17,111,000	and $6,159,000,	respectively.	The	effect	of	reclassifications	to	discontinued	operations	impacted	the	comparability	of	the	allowances	for	the	year	ended	December	31,	2002 and	2001	by	$(6,306,000)	and	$(4,903,000),	respectively.

Discount	on	Convertible	and	Senior	Subordinated	Discount	Notes—The	Company	amortizes	the	discount	on	its	convertible	and	senior	subordinated	discount	notes (including	the	allocated	fair	value	of	the	related	warrants)	using	the	effective	interest	method	over	the	term	of	the	obligation.	Such	amortization	is	recorded	as	interest expense	in	the	accompanying	consolidated	statements	of	operations.	(See	note	7.)

Derivative	Financial	Instruments—On	January	1,	2001,	the	Company	adopted	the	provisions	of	SFAS	No.	133	"Accounting	for	Derivative	Instruments	and	Hedging Activities,"	as	amended.	The	cumulative	effect	of	adopting	this	statement	resulted	in	a	charge	to	other	comprehensive	loss	of	$7.9	million	(net	of	a	tax	benefit	of $4.2	million)	as	of	January	1,	2001.

The	Company	is	exposed	to	interest	rate	risk	relating	to	variable	interest	rates	on	its	credit	facilities.	During	the	years	ended	December	31,	2003,	2002	and	2001,	as	part of	its	overall	strategy	to	manage	the	level	of	exposure	to	the	risk	of	interest	rate	fluctuations	under	its	variable	rate	credit	facilities,	the	Company	used	interest	rate	swaps, caps	and	collars,	which	qualify	and	are	designated	as	cash	flow	hedges.	For	derivative	instruments	that	are	designated	and	qualify	as	a	cash	flow	hedge,	the	effective portion	of	the	gain	or	loss	on	the	derivative	instrument	is	initially	reported	as	a	component	of	other	comprehensive	loss	and	subsequently	reclassified	into	the	statement of	operations	when	the	hedged	transaction	affects	operations.	The	ineffective	portion	of	the	gain	or	loss	on	the	derivative	instrument	is	immediately	recognized	in	the statement	of	operations.	For	derivative	instruments	not	designated	as	hedging	instruments,	the	gain	or	loss	is	recognized	in	the	statement	of	operations	in	the	period	of change.	The	Company	does	not	hold	derivative	financial	instruments	for	trading	purposes.	As	of	December	31,	2003,	the	Company	did	not	have	any	derivative instruments	designated	as	cash	flow	hedges	and	managed	its	interest	rate	risk	solely	with	interest	rate	caps	(See	note	8.)

Foreign	Currency	Translation—The	functional	currency	of	the	Company's	foreign	subsidiaries	in	Mexico	and	Brazil	is	the	U.S.	dollar.	Monetary	assets	and	liabilities related	to	the	Company's	Mexican	and	Brazilian	operations	are	remeasured	from	the	local	currency	into	U.S.	dollars	at	the	rate	of	currency	exchange	at	the	end	of

the	applicable	fiscal	period.	Non-monetary	assets	and	liabilities	are	remeasured	at	historical	exchange	rates.	Revenues	and	expenses	are	remeasured	at	average	monthly exchange	rates.	All	remeasurement	gains	and	losses	are	included	in	the	Company's	consolidated	statement	of	operations	within	the	caption	loss	on	investments	and	other expense.	The	remeasurement	loss	(gain)	for	the	years	ended	December	31,	2003,	2002	and	2001	approximated	$1,142,000,	$3,713,000	and	$(207,000),	respectively.

Cash	and	Cash	Equivalents—Cash	and	cash	equivalents	include	cash	on	hand,	demand	deposits	and	short-term	investments	with	remaining	maturities	(when	purchased) of	three	months	or	less.

Restricted	Cash	and	Investments—As	of	December	31,	2003,	restricted	cash	and	investments	represented	amounts	required	to	be	held	in	escrow	to	pay,	repurchase, redeem	or	retire	certain	of	the	Company's	outstanding	debt.	The	amounts	in	these	restricted	accounts	include	$49.1	million	of	remaining	net	proceeds	from	the	January 2003	12.25%	senior	subordinated	discount	notes	(ATI	12.25%	Notes)	offering	and	$120.9	million	of	net	proceeds	from	the	Company's	August	2003	equity	offering. Any	amounts	remaining	on	June	30,	2004	from	the	ATI	12.25%	Notes	must	be	used	to	prepay	a	portion	of	the	term	loans	under	the	Company's	credit	facilities.	Prior	to January	2004,	the	Company's	credit	facilities	required	that	any	amounts	remaining	from	the	August	2003	equity	offering	be	contributed	to	the	borrower	subsidiaries under	the	credit	facilities.	In	January	2004,	the	Company	amended	the	credit	facilities	to	permit	these	proceeds	to	remain	in	this	restricted	account	indefinitely.	(See	note 19.)

Inventories—Inventories,	which	consist	of	finished	goods	parts	to	be	utilized	in	the	Company's	services	business,	are	stated	at	the	lower	of	cost	or	market,	with	cost being	determined	on	the	first-in,	first-out	(FIFO)	basis.	As	of	December	31,	2003	and	2002,	inventories	were	approximately	$3.2	million	and	$4.9	million,	respectively, and	are	included	in	prepaid	and	other	current	assets	in	the	accompanying	consolidated	balance	sheets.

Property	and	Equipment—Property	and	equipment	are	recorded	at	cost	or	at	estimated	fair	value	(in	the	case	of	acquired	properties).	Cost	for	self-constructed	towers includes	direct	materials	and	labor,	indirect	costs	associated	with	construction	and	capitalized	interest.	Approximately	$672,000,	$5,835,000	and	$15,321,000	of	interest was	capitalized	for	the	years	ended	December	31,	2003,	2002	and	2001,	respectively.

Depreciation	is	provided	using	the	straight-line	method	over	the	assets'	estimated	useful	lives.	Property	and	equipment	acquired	through	capitalized	leases	are	amortized using	the	straight-line	method	over	the	shorter	of	the	lease	term	or	the	estimated	useful	life	of	the	asset.	Asset	useful	lives	are	as	follows:

Expenditures	for	repairs	and	maintenance	are	expensed	as	incurred.	Betterments	and	improvements	that	extend	an	asset's	useful	life	or	enhance	capacity	are	capitalized.

Goodwill	and	Other	Intangible	Assets—In	June	2001,	the	Financial	Accounting	Standards	Board	(FASB)	issued	SFAS	No.	142,	"Goodwill	and	Other	Intangible Assets."	The	Company	adopted	the	provisions	of	SFAS	No.	142	as	of	January	1,	2002.	SFAS	No.	142	requires	that	goodwill	and	intangible	assets	with	indefinite	lives no	longer	be	amortized,	but	reviewed	for	impairment	at	least	annually.	Intangible	assets	that	are	deemed	to	have	a	definite	life	continue	to	be	amortized	over	their	useful lives.	The	cumulative	effect	of	adopting	this	statement	resulted	in	a	non-cash	charge	of	$562.6	million	(net	of	a	tax	benefit	of	$14.4	million),	which	is	included	in	the results	of

operations	for	the	year	ended	December	31,	2002	as	the	cumulative	effect	of	a	change	in	accounting	principle.	The	adoption	of	this	statement	reduced	the	Company's amortization	expense	in	continuing	operations	by	approximately	$67.6	million	for	the	years	ended	December	31,	2003	and	2002.	(See	note	5.)

Income	Taxes—The	consolidated	financial	statements	reflect	provisions	for	federal,	state,	local	and	foreign	income	taxes.	The	Company	recognizes	deferred	tax	assets and	liabilities	for	the	future	tax	consequences	attributable	to	differences	between	the	financial	statement	carrying	amounts	of	existing	assets	and	liabilities	and	their respective	tax	bases,	as	well	as	operating	loss	and	tax	credit	carryforwards.	The	Company	measures	deferred	tax	assets	and	liabilities	using	enacted	tax	rates	expected	to apply	to	taxable	income	in	the	years	in	which	those	temporary	differences	and	carryforwards	are	expected	to	be	recovered	or	settled.	The	effect	on	deferred	tax	assets and	liabilities	of	a	change	in	tax	rates	is	recognized	in	income	in	the	period	that	includes	the	enactment	date.	The	Company	provides	valuation	allowances	if,	based	on the	weight	of	available	evidence,	it	is	more	likely	than	not	that	some	or	all	of	the	deferred	tax	assets	will	not	be	realized.	(See	note	12.)

Loss	per	Common	Share—Basic	and	diluted	net	loss	per	common	share	has	been	computed	by	dividing	the	Company's	net	loss	by	the	weighted	average	number	of common	shares	outstanding	during	the	period.	For	the	years	ended	December	31,	2003,	2002	and	2001,	potential	common	shares,	including	options,	warrants	and	shares issuable	upon	conversion	of	the	Company's	convertible	notes,	have	been	excluded	from	the	computation	of	diluted	loss	per	common	share,	as	their	effect	is	anti-dilutive. Potential	common	shares	excluded	from	the	calculation	of	net	loss	per	share	were	approximately	65.6	million,	50.6	million	and	46.4	million	for	the	years	ended December	31,	2003,	2002	and	2001,	respectively.

Impairments	and	Net	Loss	on	Sale	of	Long-Lived	Assets—The	Company	reviews	long-lived	assets,	including	intangibles	with	definite	lives,	for	impairment	whenever events	or	changes	in	circumstances	indicate	that	the	carrying	amount	of	an	asset	may	not	be	recoverable.	The	Company	assesses	recoverability	by	determining	whether the	net	book	value	of	the	related	assets	will	be	recovered,	either	through	projected	undiscounted	future	cash	flows	(with	respect	to	operating	assets),	or	anticipated proceeds	from	sales	(with	respect	to	non-core	assets	that	are	designated	for	sale).	If	the	Company	determines	that	the	carrying	value	of	an	asset	may	not	be	recoverable, it	measures	any	impairment	based	on	the	projected	future	discounted	cash	flows	to	be	provided	from	the	asset	or	the	estimated	sale	proceeds,	as	compared	to	the	asset's carrying	value.	The	Company	records	impairment	losses	in	the	period	in	which	it	identifies	such	impairments.	(See	note	11.)

Notes	Receivable	and	Other	Long-Term	Assets—Other	long-term	assets	primarily	represent	the	Company's	notes	receivable	described	in	note	6,	deferred	rent	asset associated	with	the	straight-lining	of	non-cancelable	leases	that	contain	fixed	escalation	clauses	over	the	terms	of	the	applicable	leases,	as	well	as	certain	cost	and	equity investments	and	long-term	deposits.

Investments	in	those	entities	where	the	Company	owns	less	than	twenty	percent	of	the	voting	stock	of	the	individual	entity	and	does	not	exercise	significant	influence over	operating	and	financial	policies	of	the	entity	are	accounted	for	using	the	cost	method.	Investments	in	entities	where	the	Company	owns	less	than	twenty	percent	but has	the	ability	to	exercise	significant	influence	over	operating	and	financial	policies	of	the	entity	or	where	the	Company	owns	more	than	twenty	percent	of	the	voting stock	of	the	individual	entity,	but	not	in	excess	of	fifty	percent,	are	accounted	for	using	the	equity	method.	As	of	December	31,	2003	and	2002,	the	Company's investments	were	in	companies	that	are	not	publicly	traded,	and,	therefore,	no	established	market	for	their	securities	exists.	The	Company	has	a	policy	in	place	to	review the	fair	value	of	its	investments	on	a	regular	basis	to	evaluate	the	carrying	value	of	the	investments	in	these	companies.	If	the	Company	believes	that	the	carrying	value of	an	investment	is	in	excess	of	fair	market	value,	it	is	the	Company's	policy	to	record	an	impairment	charge	to	adjust	the	carrying	value	to	fair	market	value.

During	the	years	ended	December	31,	2003,	2002	and	2001,	the	Company	recorded	impairment	charges	on	its	cost	and	equity	investments	of	approximately	$19.3 million,	$11.3	million	and	$27.7	million,	respectively.	In	addition,	during	the	years	ended	December	31,	2003,	2002	and	2001,	the	Company	recorded	losses	on	equity method	investments	of	approximately	$1.9	million,	$9.0	million	and	$9.1	million,	respectively.	Losses	on	equity	method	investments	are	recorded	in	accordance	with Emerging	Issues	Task	Force	No.	99-10	"Percentage	Used	to	Determine	the	Amount	of	Equity	Method	Losses."

Stock-Based	Compensation—In	December	2002,	the	FASB	issued	SFAS	No.	148,	"Accounting	for	Stock-Based	Compensation—Transition	and	Disclosure—an amendment	of	SFAS	No.	123,"	which	provides	optional	transition	guidance	for	those	companies	electing	to	voluntarily	adopt	the	accounting	provisions	of	SFAS	No. 123.	The	Company	continues	to	use	Accounting	Principles	Board	Opinion	No.	25	(APB	No.	25),	"Accounting	for	Stock	Issued	to	Employees,"	to	account	for	equity grants	and	awards	to	employees,	officers	and	directors	and	has	adopted	the	disclosure-only	provisions	of	SFAS	No.	148.	In	accordance	with	APB	No.	25,	the	Company recognizes	compensation	expense	in	income	based	on	the	excess,	if	any,	of	the	quoted	stock	price	at	the	grant	date	of	the	award	or	other	measurement	date	over	the amount	an	employee	must	pay	to	acquire	the	stock.	The	Company's	stock	option	plans	are	more	fully	described	in	note	13.

The	following	table	illustrates	the	effect	on	net	loss	and	net	loss	per	share	if	the	Company	had	applied	the	fair	value	recognition	provisions	of	SFAS	No.	123	(as amended)	to	stock-based	compensation.	The	estimated	fair	value	of	each	option	is	calculated	using	the	Black-Scholes	option-pricing	model	(in	thousands,	except	per share	amounts):

|  | 2003 | 2002 | 2001 |
| :--- | :--- | :--- | :--- |
| Net\tloss\tas\treported | $(303,417) | $(1,141,879) | $(450,094) |
| Add:\tStock-based\temployee\tcompensation\texpense,\tnet\tof\trelated\ttax\teffect,\tincluded\tin |  |  |  |
| net\tloss\tas\treported | 2,077 |  |  |
| Less:\tTotal\tstock-based\temployee\tcompensation\texpense\tdetermined\tunder\tfair\tvalue |  |  |  |
| based\tmethod\tfor\tall\tawards,\tnet\tof\trelated\ttax\teffect | (31,156) | (38,126) | (50,540) |
| Pro-forma\tnet\tloss | $(332,496) | $(1,180,005) | $(500,634) |
| Basic\tand\tdiluted\tnet\tloss\tper\tshare\tas\treported | $(1.46) | $(5.84) | $(2.35) |
| Basic\tand\tdiluted\tnet\tloss\tper\tshare\tPro-forma | $(1.60) | $(6.04) | $(2.61) |

Fair	Value	of	Financial	Instruments—The	carrying	values	of	the	Company's	financial	instruments,	with	the	exception	of	long-term	obligations,	including	current portion,	reasonably	approximate	the	related	fair	values	as	of	December	31,	2003	and	2002.	As	of	December	31,	2003,	the	carrying	amount	and	fair	value	of	long-term obligations,	including	current	portion,	were	$3.4	billion	and	$3.6	billion,	respectively.	As	of	December	31,	2002,	the	carrying	amount	and	fair	value	of	long-term obligations,	including	current	portion,	were	$3.4	billion	and	$3.0	billion,	respectively.	Fair	values	are	based	primarily	on	quoted	market	prices	for	those	or	similar instruments.

Retirement	Plan—The	Company	has	a	401(k)	plan	covering	substantially	all	employees	who	meet	certain	age	and	employment	requirements.	Under	the	plan,	the Company	matches	35%	of	participants'	contributions	up	to	a	maximum	5%	of	a	participant's	contributions.	The	Company	contributed	approximately	$825,000, $979,000	and	$1,540,000	to	the	plan	for	the	years	ended	December	31,	2003,	2002	and	2001,	respectively.

Recent	Accounting	Pronouncements—In	June	2001,	the	FASB	issued	SFAS	No.	143,	"Accounting	for	Asset	Retirement	Obligations."	This	statement	addresses	financial accounting	and	reporting	for	obligations	associated	with	the	retirement	of	tangible	long-lived	assets	and	the	related	asset	retirement	costs.	The	fair	value	of	a	liability	for asset	retirement	obligations	is	to	be	recognized	in	the	period	in	which	it	is	incurred	and	can	be	reasonably	estimated.	Such	asset	retirement	costs	are	to	be	capitalized	as part	of	the	carrying	amount	of	the	related	long-lived	asset	and	depreciated	over	the	asset's	estimated	useful	life.	Fair	value	estimates	of	liabilities	for	asset	retirement obligations	will	generally	involve	discounted	future	cash	flows.	Periodic	accretion	of	such	liabilities	due	to	the	passage	of	time	is	to	be	recorded	as	an	operating	expense. The	provisions	of	SFAS	No.	143	were	effective	for	the	Company	as	of	January	1,	2003.	The	Company	recognized	the	cumulative	effect	of	adopting	SFAS	No.	143	of $1.3	million	in	loss	on	investments	and	other	expense	in	its	consolidated	statement	of	operations	for	the	year	ended	December	31,	2003.	The	Company	has	also	recorded accretion	expense	of	$0.2	million	in	depreciation	and	amortization	expense	in	the	accompanying	consolidated	statement	of	operations	for	the	year	ended	December	31, 2003.

The	Company	has	certain	legal	obligations	related	to	tower	assets	which	fall	within	the	scope	of	SFAS	No.	143.	These	include	obligations	to	remediate	leased	land	on which	the	Company's	tower	assets	are	located.	The	significant	assumptions	used	in	estimating	the	Company's	aggregate	asset	retirement	obligation,	which,	as	of December	31,	2003,	approximates	$4.1	million	and	is	included	in	other	long-term	liabilities	in	the	accompanying	consolidated	balance	sheet,	were:	timing	and	number of	tower	removals;	expected	inflation	rates	that	are	consistent	with	historical	inflation	rates;	and	credit-adjusted	risk-free	rates	that	approximate	the	Company's incremental	borrowing	rate.	The	Company	did	not	settle	any	material	liabilities	related	to	this	obligation	during	the	year	ended	December	31,	2003.

In	August	2001,	the	FASB	issued	SFAS	No.	144,	"Accounting	for	the	Impairment	or	Disposal	of	Long-Lived	Assets,"	(SFAS	No.	144),	which	supersedes	SFAS	No. 121,	"Accounting	for	the	Impairment	of	Long-Lived	Assets	and	for	Long-Lived	Assets	to	Be	Disposed	Of,"	but	retains	many	of	its	fundamental	provisions.	The Company	adopted	SFAS	No.	144	on	January	1,	2002.	Accordingly,	all	relevant	impairment	assessments	and	decisions	concerning	discontinued	operations	have	been made	under	this	standard	in	2003	and	2002.	(See	note	2.)

In	April	2002,	the	FASB	issued	SFAS	No.	145	"Rescission	of	FASB	Statement	Nos.	4,	44,	and	64,	Amendment	of	FASB	Statement	No.	13	and	Technical	Corrections." Upon	the	adoption	of	SFAS	No.	145,	gains	and	losses	from	extinguishment	of	debt	are	no	longer	classified	as	extraordinary	items,	but	rather	classified	as	part	of	other income	(expense)	in	the	Company's	consolidated	statement	of	operations.	Any	such	gains	or	losses	classified	as	extraordinary	items	in	prior	periods	were	reclassified upon	the	adoption	of	SFAS	No.	145.	The	Company	adopted	the	provisions	of	this	SFAS	No.	145	on	January	1,	2003.	Accordingly,	the	Company	reclassified	a	loss	from extinguishment	of	debt	originally	recorded	as	an	extraordinary	item	of	$1.7	million	to	loss	on	retirement	of	long-term	obligations	in	the	accompanying	consolidated statement	of	operations	for	the	year	ended	December	31,	2002.

In	July	2002,	the	FASB	issued	SFAS	No.	146	"Accounting	for	Costs	Associated	with	Exit	or	Disposal	Activities."	The	statement	requires	costs	associated	with	exit	or disposal	activities	to	be	recognized	when	they	are	incurred	rather	than	at	the	date	of	a	commitment	to	an	exit	or	disposal	plan.	The	requirements	of	SFAS	No.	146	are effective	for	exit	or	disposal	activities	initiated	after	January	1,	2003.	The	Company	has	applied	the	provisions	of	this	statement	to	exit	or	disposal	activities	initiated after	January	1,	2003.	(See	note	11.)

In	November	2002,	the	FASB	issued	Interpretation	No.	45	(FIN	45),	"Guarantor's	Accounting	and	Disclosure	Requirements	for	Guarantees,	Including	Indirect Guarantees	of	Indebtedness	of	Others,	an	interpretation	of	FASB	Statements	No.	5,	57	and	107	and	rescission	of	FASB	Interpretation	No.	34."	This	interpretation requires	that	a	guarantor	recognize,	at	the	inception	of	a	guarantee,	a	liability	for	the	fair	value	of	the	obligation

undertaken	by	issuing	the	guarantee.	This	interpretation	also	requires	additional	disclosures	to	be	made	by	a	guarantor	in	its	annual	financial	statements	about	its obligations	under	certain	guarantees	it	has	issued.	The	accounting	requirements	for	the	initial	recognition	of	guarantees	are	applicable	on	a	prospective	basis	for guarantees	issued	or	modified	after	December	31,	2002.	The	Company	applied	the	initial	liability	recognition	and	measurement	provisions	of	this	interpretation	in	2003 and	recorded	a	liability	for	its	estimate	of	costs	that	it	may	incur	under	certain	indemnifications	related	to	sold	businesses,	of	$0.6	million,	which	is	reflected	in	loss	on discontinued	operations,	net	in	the	accompanying	consolidated	financial	statement	of	operations	for	the	year	ended	December	31,	2003.	(See	note	9.)

In	January	2003	and	December	2003,	the	FASB	issued	Interpretation	No.	46,	"Consolidation	of	Variable	Interest	Entities"	(FIN	46),	and	its	revision,	FIN	46-R, respectively.	FIN	46	and	FIN	46-R	addresses	the	consolidation	of	entities	whose	equity	holders	have	either	not	provided	sufficient	equity	at	risk	to	allow	the	entity	to finance	its	own	activities	or	do	not	possess	certain	characteristics	of	a	controlling	financial	interest.	FIN	46	and	FIN	46-R	require	the	consolidation	of	these	entities, known	as	variable	interest	entities	(VIEs),	by	the	primary	beneficiary	of	the	entity.	The	primary	beneficiary	is	the	entity,	if	any,	that	is	subject	to	a	majority	of	the	risk	of loss	from	the	VIE's	activities,	entitled	to	receive	a	majority	of	the	VIE's	residual	returns,	or	both.	FIN	46	and	FIN	46-R	are	applicable	for	financial	statements	of	public entities	that	have	interests	in	VIEs	or	potential	VIEs	referred	to	as	special	purpose	entities	for	periods	ending	after	December	15,	2003,	of	which	the	Company	had	none. Application	by	public	entities	for	all	other	types	of	entities	is	required	in	financial	statements	for	periods	ending	after	March	15,	2004.	The	Company	has	applied	the provisions	of	FIN	46	and	the	adoption	was	not	material	to	its	consolidated	financial	position	and	results	of	operations.	The	Company	is	continuing	to	evaluate	its investments	to	determine	which,	if	any,	will	be	impacted	by	the	adoption	of	FIN	46-R.	The	adoption	of	FIN	46-R	is	not	expected	to	have	a	material	impact	on	the Company's	consolidated	financial	position	or	results	of	operations.

In	May	2003,	the	FASB	issued	SFAS	No.	150	"Accounting	for	Certain	Financial	Instruments	with	Characteristics	of	Both	Liabilities	and	Equity."	The	statement requires	issuers	to	classify	certain	financial	instruments	as	liabilities,	many	of	which	were	previously	classified	as	equity.	This	statement	does	not,	however,	affect	the classification	of	convertible	bonds,	puttable	stock	or	other	outstanding	shares	that	are	conditionally	redeemable;	nor	does	it	change	the	accounting	treatment	of conversion	features,	conditional	redemption	features,	or	other	features	embedded	in	financial	instruments	that	are	not	derivatives	in	their	entirety.	The	Company	applied the	provisions	of	this	statement	in	the	third	quarter	of	2003	and	the	adoption	was	not	material	to	its	consolidated	financial	position	or	results	of	operations.

Reclassifications—Certain	reclassifications	have	been	made	to	the	2002	and	2001	financial	statements	to	conform	with	the	2003	presentation.

# 2.				DISCONTINUED	OPERATIONS

In	2003	and	2002,	in	connection	with	the	Company's	plan	to	focus	on	its	core	tower	business,	the	Company	sold	or	committed	to	sell	several	non-core	businesses.	In accordance	with	SFAS	No.	144,	the	Company	classified	the	operating	results	of	these	businesses	as	discontinued	operations	in	the	accompanying	consolidated	statements of	operations.	In	addition,	the	assets	and	liabilities	of	the	discontinued	operations	not	disposed	of	as	of	December	31,	2003	and	2002	have	been	reflected	as	assets	held for	sale	and	liabilities	held	for	sale	in	the	accompanying	consolidated	balance	sheets.

The	following	businesses	have	been	reflected	as	discontinued	operations	in	the	accompanying	consolidated	statements	of	operations	for	all	periods	presented. Impairment	charges	and	gains/losses	are	presented	net	of	taxes.

Verestar—In	December	2002,	the	Company	committed	to	a	plan	to	sell	Verestar	by	December	31,	2003.	Pursuant	to	that	plan,	in	February	2003,	the	Company consummated	the	sale	of	Maritime

Telecommunications	Network	(MTN),	a	subsidiary	of	Verestar,	for	approximately	$25.5	million.	In	December	2003,	Verestar	filed	for	protection	under	Chapter 11	of	the	federal	bankruptcy	laws.	Under	generally	accepted	accounting	principles,	consolidation	is	generally	required	for	investments	of	more	than	50%	of	the outstanding	voting	stock	of	an	investee,	except	when	control	is	not	held	by	the	majority	owner.	Under	these	rules,	legal	reorganization	or	bankruptcy	represent conditions	which	can	preclude	consolidation	in	instances	where	control	rests	with	the	bankruptcy	court,	rather	than	the	majority	owner.	Accordingly,	due	to	the bankruptcy	filing,	the	Company	ceased	to	consolidate	Verestar's	financial	results	beginning	December	22,	2003.	The	operations	of	Verestar	are	included	in	loss from	discontinued	operations,	net	in	the	accompanying	consolidated	statements	of	operations	through	the	date	of	the	bankruptcy	filing.

The	Company	recognized	aggregate	impairment	charges	related	to	its	investment	in	Verestar	of	approximately	$26.5	million	and	$187.8	million	for	the	years ended	December	31,	2003	and	2002,	respectively.	These	charges	reduced	the	carrying	value	of	the	Company's	investment	in	Verestar	to	zero	as	of	December	31, 2003.	These	charges	are	included	in	loss	from	discontinued	operations,	net	in	the	accompanying	consolidated	statements	of	operations	for	the	years	ended December	31,	2003	and	2002.

The	Company	is	primarily	and	secondarily	liable	as	a	guarantor	for	up	to	$10.0	million	of	certain	contractual	obligations	associated	with	Verestar.	If	Verestar	fails to	honor	certain	of	its	contractual	obligations	because	of	its	bankruptcy	filing	or	otherwise,	claims	may	be	made	against	the	Company	for	breaches	by	Verestar	on those	contracts.	The	Company	has	recorded	a	liability	for	its	estimate	of	costs	that	it	may	incur	under	these	contracts,	which	is	included	in	accounts	payable	and accrued	expenses	in	the	accompanying	consolidated	balance	sheet	as	of	December	31,	2003.	(See	note	9.)

Kline—In	June	2003,	the	Company	committed	to	sell	its	steel	fabrication	and	tall	tower	construction	service	subsidiary,	Kline	Iron	&	Steel	Co.,	Inc.	(Kline)	by June	30,	2004,	which	was	previously	included	in	the	network	development	services	segment.	During	2003,	the	Company	recognized	an	aggregate	non-cash charge	of	approximately	$14.6	million	(including	$10.3	million	of	goodwill)	related	to	the	impairment	of	Kline's	net	assets	to	reduce	their	carrying	value	to	the estimated	proceeds	expected	upon	disposal.	This	charge	is	reflected	in	loss	from	discontinued	operations,	net,	in	the	accompanying	consolidated	statement	of operations	for	the	year	ended	December	31,	2003.	The	Company	sold	substantially	all	the	net	assets	of	Kline	on	March	1,	2004.	(See	note	19.)

Consummated	Transactions—In	August	2003,	the	Company	consummated	the	sale	of	Galaxy	Engineering	(Galaxy),	a	radio	frequency	engineering,	network design	and	tower-related	consulting	business	previously	included	in	the	network	development	services	segment.	The	purchase	price	of	approximately	$3.5	million included	$2.0	million	in	cash,	which	the	Company	received	at	closing,	and	an	additional	$1.5	million	payable	on	January	15,	2008,	or	at	an	earlier	date	based	on the	future	revenues	of	Galaxy.	Pursuant	to	this	transaction,	the	Company	recorded	a	net	loss	on	disposal	of	approximately	$2.4	million	in	the	accompanying consolidated	statement	of	operations	for	the	year	ended	December	31,	2003.

In	May	2003,	the	Company	consummated	the	sale	of	an	office	building	in	Westwood,	Massachusetts	(previously	held	primarily	as	rental	property	and	reported	in the	rental	and	management	segment)	for	a	purchase	price	of	approximately	$18.5	million,	including	$2.4	million	of	cash	proceeds	and	the	buyer's	assumption	of $16.1	million	of	related	mortgage	notes.	Pursuant	to	this	transaction,	the	Company	recorded	a	net	loss	on	disposal	of	approximately	$3.6	million	in	the accompanying	consolidated	statement	of	operations	for	the	year	ended	December	31,	2003.

In	January	2003,	the	Company	consummated	the	sale	of	Flash	Technologies,	its	remaining	components	business	(previously	included	in	the	network	development services	segment)	for	approximately

$35.5	million	in	cash	and	has	recorded	a	net	gain	on	disposal	of	approximately	$0.1	million	in	the	accompanying	consolidated	statement	of	operations	for	the	year ended	December	31,	2003.

In	December	2002,	the	Company	committed	to	a	plan	to	sell	an	office	building	in	Schaumburg,	Illinois	(previously	held	primarily	as	rental	property	and	reported in	the	rental	and	management	segment)	and	recorded	an	estimated	net	loss	on	disposal	of	$3.2	million	in	the	accompanying	consolidated	statement	of	operations for	the	year	ended	December	31,	2002.	In	March	2003,	the	Company	consummated	the	sale	of	this	building	for	net	proceeds	of	approximately	$10.3	million	in cash	and	has	recorded	a	net	loss	on	disposal	of	$0.1	million	in	the	accompanying	consolidated	statement	of	operations	for	the	year	ended	December	31,	2003.

In	December	2002,	the	Company	consummated	the	sale	of	the	building	where	it	maintained	its	corporate	headquarters	(previously	held	primarily	as	rental property	and	reported	in	the	rental	and	management	segment)	for	approximately	$68.0	million	and	recorded	a	net	gain	on	disposal	of	approximately	$5.7	million for	the	year	ended	December	31,	2002.	Approximately	$38.5	million	of	the	net	proceeds	were	used	to	retire	the	building's	existing	mortgage.	As	the	Company maintains	its	corporate	offices	within	the	building,	it	also	entered	into	a	lease	agreement	for	approximately	11.5%	of	the	building's	total	office	space.	The	lease has	been	classified	as	an	operating	lease	and	approximately	$5.9	million	of	additional	gain	was	deferred	in	accordance	with	SFAS	No.	13,	"Accounting	for Leases,"	as	amended.

In	July	2002,	the	Company	consummated	the	sale	of	MTS	Components	(previously	included	in	the	network	development	services	segment)	and	incurred	a	net loss	on	disposal	of	approximately	$16.0	million	for	the	year	ended	December	31,	2002.	Proceeds	from	the	sale	were	approximately	$32.0	million	and	consisted	of approximately	$20.0	million	in	cash	and	$12.0	million	of	notes	receivable,	which	were	repaid	during	2002	and	2003.

Summary	operating	results	of	the	discontinued	operations	are	as	follows	(in	thousands):

|  | 2003 | 2002 | 2001 |
| :--- | :--- | :--- | :--- |
| Revenue | $200,473 | $412,053 | $479,214 |
| Loss\tfrom\tdiscontinued\toperations | (14,342) | (268,179) | (73,745) |
| Income\ttax\tbenefit\ton\tloss\tfrom\tdiscontinued\toperations | 1,874 | 22,965 | 14,755 |
| Net\tloss\ton\tdisposal\tof\tdiscontinued\toperations,\tnet\tof\ttax\tbenefit\tof\t$10,160\tand\t$7,566, |  |  |  |
| respectively | (48,458) | (13,510) |  |
| Loss\tfrom\tdiscontinued\toperations,\tnet | $ (60,926) | $(258,724) | $(58,990) |

The	Company	had	assets	held	for	sale	and	liabilities	held	for	sale	comprised	of	the	following	as	of	December	31,	(in	thousands):

|  | 2003 | 2002 |
| :--- | :--- | :--- |
| Accounts\treceivable,\tnet | $2,982 | $40,069 |
| Prepaids\tand\tother\tcurrent\tassets | 1,554 | 20,161 |
| Property\tand\tequipment,\tnet | 5,532 | 218,670 |
| Other\tlong-term\tassets | 51 | 35,305 |
| Assets\theld\tfor\tsale | $10,119 | $314,205 |
| Accounts\tpayable,\taccrued\texpenses\tand\tother\tcurrent\tliabilities | $8,416 | $59,324 |
| Capital\tlease\tobligations |  | 125,230 |
| Notes\tpayable |  | 16,142 |
| Liabilities\theld\tfor\tsale | $8,416 | $200,696 |

# 3. COSTS	AND	EARNINGS	IN	EXCESS	OF	BILLINGS	ON	UNCOMPLETED	CONTRACTS	AND	UNBILLED	RECEIVABLES

The	Company	derives	a	portion	of	its	network	development	services	revenue	from	customer	contracts	that	either	provide	for	billing	only	after	certain	milestones	within contracts	have	been	achieved,	or	provide	for	progress	billings	as	the	Company	fulfills	its	obligations	under	the	related	contracts.	As	the	Company	recognizes	revenue	on these	contracts	using	the	percentage-of-completion,	cost	plus	profit	and	time	and	materials	methodologies,	such	contracts	may	give	rise	to	revenue	which	has	been earned,	but,	as	of	a	certain	point	in	time,	remains	unbilled.	Such	amounts	are	included	in	costs	and	earnings	in	excess	of	billings	on	uncompleted	contracts	and	unbilled receivables	in	the	accompanying	consolidated	balance	sheets.	These	contracts	may	also	give	rise	to	billings	that	are	in	excess	of	amounts	actually	earned	as	of	a	certain point	in	time.	The	excess	of	amounts	billed	over	the	amount	earned	on	these	contracts	is	reflected	in	billings	in	excess	of	costs	on	uncompleted	contracts	and	unearned revenue	in	the	accompanying	consolidated	balance	sheets.

The	following	are	the	components	of	costs	and	earnings	in	excess	of	billings	on	uncompleted	contracts	and	billings	in	excess	of	costs	and	earnings	on	uncompleted contracts	as	of	December	31,	(in	thousands):

|  | 2003 | 2002 |
| :--- | :--- | :--- |
| Costs\tincurred\ton\tuncompleted\tcontracts | $34,748 | $30,659 |
| Estimated\tearnings | 9,960 | 10,519 |
| Unbilled\treceivables | 8,863 | 19,844 |
| Billings\tto\tdate | (39,469) | (45,168) |
|  | $14,102 | $15,854 |
| Included\tin\tthe\taccompanying\tconsolidated\tbalance\tsheets: |  |  |
| Costs\tand\tearnings\tin\texcess\tof\tbillings\ton\tuncompleted\tcontracts\tand\tunbilled\treceivables | $18,894 | $19,976 |
| Billings\tin\texcess\tof\tcosts\ton\tuncompleted\tcontracts | (4,792) | (4,122) |
|  | $14,102 | $15,854 |

In	addition,	the	Company	had	unbilled	receivables	related	to	its	rental	and	management	segment	of	$1.0	million	and	$2.0	million	as	of	December	31,	2003	and	2002, respectively.	The	Company	also	had	unearned	revenues	of	$36.7	million	and	$34.6	million	as	of	December	31,	2003	and	2002,	respectively,	consisting	mainly	of customer	rents	received	in	advance.

# 4.				PROPERTY	AND	EQUIPMENT

Property	and	equipment	(including	assets	held	under	capital	leases)	consist	of	the	following	as	of	December	31,	(in	thousands):

|  | 2003 | 2002 |
| :--- | :--- | :--- |
| Towers | $2,784,564 | $ 2,706,005 |
| Equipment | 121,780 | 121,238 |
| Buildings\tand\timprovements | 166,068 | 168,445 |
| Land\tand\timprovements | 173,619 | 176,990 |
| Construction-in-progress | 38,683 | 63,755 |
| Total | 3,284,714 | 3,236,433 |
| Less\taccumulated\tdepreciation\tand\tamortization | (738,189) | (541,434) |
| Property\tand\tequipment,\tnet | $2,546,525 | $ 2,694,999 |

# 5.				GOODWILL	AND	OTHER	INTANGIBLE	ASSETS

As	of	January	1,	2002,	the	Company	adopted	the	provisions	of	SFAS	No.	142	"Goodwill	and	Other	Intangible	Assets."	SFAS	No.	142	requires	that	goodwill	and intangible	assets	with	indefinite	lives	no	longer	be	amortized,	but	reviewed	for	impairment	at	least	annually.	Intangible	assets	that	are	deemed	to	have	a	definite	life	will continue	to	be	amortized	over	their	useful	lives.	SFAS	No.	142	also	required	that,	as	of	January	1,	2002,	the	Company	assess	whether	its	goodwill	was	impaired	by performing	a	transitional	impairment	test.	This	impairment	test	was	comprised	of	two	steps.	The	initial	step	was	designed	to	identify	potential	goodwill	impairment	by comparing	an	estimate	of	the	fair	value	of	the	applicable	reporting	unit	to	its	carrying	value,	including	goodwill.	If	the	carrying	value	exceeded	fair	value,	a	second	step was	performed,	which	compared	the	implied	fair	value	of	the	applicable	reporting	unit's	goodwill	with	the	carrying	amount	of	that	goodwill,	to	measure	the	amount	of goodwill	impairment,	if	any.

The	Company	completed	its	transitional	impairment	testing	in	the	second	quarter	of	2002	and	concluded	that	all	of	the	goodwill	related	to	Verestar	and	the	majority	of the	goodwill	in	the	network	development	services	segment	was	impaired.	As	a	result,	the	Company	recognized	a	$562.6	million	non-cash	charge,	net	of	tax,	related	to the	write-down	of	goodwill	to	its	fair	value.	In	accordance	with	the	provisions	of	SFAS	No.	142,	the	charge	is	included	in	the	results	of	operations	for	the	year	ended December	31,	2002	as	the	cumulative	effect	of	a	change	in	accounting	principle.

A	description	of	the	Company's	reporting	units	(by	segment)	and	the	results	of	the	related	transitional	impairment	testing	are	as	follows:

Verestar—Verestar	was	a	single	segment	and	reporting	unit	until	December	2002,	when	the	Company	committed	to	a	plan	to	dispose	of	Verestar.	The	Company recorded	an	impairment	charge	of	$189.3	million	relating	to	the	impairment	of	goodwill	in	this	reporting	unit.	The	fair	value	of	this	reporting	unit	was	determined based	on	an	independent	third	party	appraisal.

Network	Development	Services	(Services)—As	of	January	1,	2002,	the	reporting	units	in	the	Company's	network	development	services	segment	included	Kline, Specialty	Constructors,	Galaxy,	MTS	Components	and	Flash	Technologies.	The	Company	estimated	the	fair	value	of	these	reporting	units	utilizing	future discounted	cash	flows	and	market	information	as	to	the	value	of	each	reporting	unit	on	January	1,	2002.	The	Company	recorded	an	impairment	charge	of	$387.8 million	for	the	year	ended	December	31,	2002	related	to	the	impairment	of	goodwill	within	these	reporting	units.	Such	charge	included	full	impairment	for	all	of the	goodwill	within	the	reporting	units	except	Kline,	for	which	only	a	partial	impairment	was	recorded.	As	discussed	in	note	2,	the	assets	of	all	of	these	reporting units	were	sold	as	of	December	31,	2003,	except	for	those	of	Kline.	(See	note	19.)

Rental	and	Management	(RM)—The	Company	obtained	an	independent	third	party	appraisal	of	the	rental	and	management	reporting	unit	that	contains	goodwill and	determined	that	goodwill	was	not	impaired.

With	the	adoption	of	SFAS	No.	142,	the	Company	also	reassessed	the	useful	lives	and	residual	values	of	all	acquired	intangible	assets.	Based	on	those	assessments,	no adjustments	were	made	to	the	amortization	periods	or	residual	values	of	the	Company's	remaining	intangible	assets.

The	Company	has	selected	December	1st	as	the	date	to	perform	its	annual	impairment	test.	In	December	2003	and	2002,	the	Company	completed	its	annual	impairment testing.	In	performing	its	testing,	the	Company	obtained	an	independent	third	party	appraisal	of	its	rental	and	management	reporting	unit	that	contains	goodwill	and concluded	that	an	impairment	was	not	required.	The	Company's	annual	impairment	testing	at	December	1,	2002	also	included	the	remaining	goodwill	of	Kline,	and based	on	available	market	information,	the	Company

determined	that	goodwill	was	not	impaired.	As	described	in	note	2,	the	Company	committed	to	a	plan	to	sell	Kline	in	June	2003,	reclassified	its	net	assets	to	assets	held for	sale	and	recorded	an	impairment	charge	that	included	the	remaining	$10.3	million	of	Kline's	goodwill.

The	changes	in	the	net	carrying	amounts	of	goodwill	by	segment	for	the	years	ended	December	31,	2003	and	2002	are	as	follows	(in	thousands):

|  | RM | Services | Verestar | Total |
| :--- | :--- | :--- | :--- | :--- |
| Balance\tas\tof\tJanuary\t1,\t2002 | $580,823 | $394,264 | $185,306 | $ 1,160,393 |
| Reclassifications\t(primarily\tacquired\tworkforce) | 11,860 | 3,799 | 3,997 | 19,656 |
| Kline\treclassification\tto\tassets\theld\tfor\tsale |  | (10,310) |  | (10,310) |
| Transitional\timpairment\tcharge\t(pre-tax) |  | (387,753) | (189,303) | (577,056) |
| Balance\tas\tof\tDecember\t31,\t2003\tand\t2002 | $592,683 | $$$592,683 | $$$592,683 | $$$592,683 |

Prior	to	the	adoption	of	SFAS	No.	142,	the	Company	had	approximately	$1.2	billion	of	net	goodwill	that	was	amortized	on	a	straight-line	basis	over	a	fifteen-year	period. Had	the	Company	not	amortized	goodwill	in	prior	periods	in	accordance	with	SFAS	No.	142,	amortization	expense	would	have	decreased	by	$87.8	million	for	the	year ended	December	31,	2001	and	net	loss	and	net	loss	per	share	for	the	year	ended	December	31,	2001	would	have	been	approximately	$(362.3)	million	and	$(1.89), respectively.

The	Company's	other	intangible	assets	subject	to	amortization	consist	of	the	following	as	of	December	31,	(in	thousands):

|  | 2003 | 2002 |
| :--- | :--- | :--- |
| Acquired\tcustomer\tbase\tand\tnetwork\tlocation\tintangibles | $1,299,708 | $ 1,306,863 |
| Deferred\tfinancing\tcosts | 111,484 | 100,091 |
| Other\tintangibles | 43,125 | 42,788 |
| Total | 1,454,317 | 1,449,742 |
| Less\taccumulated\tamortization | (397,240) | (311,424) |
| Other\tintangible\tassets,\tnet | $1,057,077 | $ 1,138,318 |

The	Company	amortizes	its	intangible	assets	over	periods	ranging	from	three	to	fifteen	years.	Amortization	of	intangible	assets	for	the	years	ended	December	31,	2003 and	2002	aggregated	approximately	$88.9	million	and	$87.7	million,	respectively.	The	Company	expects	to	record	amortization	expense	of	approximately	$89.1	million for	the	years	ended	December	31,	2004,	2005	and	2006,	respectively,	and	$86.7	million	for	the	years	ended	December	31,	2007	and	2008,	respectively.

# 6.				NOTES	RECEIVABLE

In	2000,	the	Company	loaned	TV	Azteca,	S.A.	de	C.V.	(TV	Azteca),	the	owner	of	a	major	national	television	network	in	Mexico,	$119.8	million.	The	loan,	which initially	bore	interest	at	12.87%,	payable	quarterly,	was	discounted	by	the	Company,	as	the	fair	value	interest	rate	at	the	date	of	the	loan	was	determined	to	be	14.25%. The	loan	was	amended	effective	January	1,	2003	to	increase	the	original	interest	rate	to	13.11%.	As	of	December	31,	2003,	and	2002,	approximately	$119.8	million undiscounted	($108.2	million	discounted)	under	the	loan	was	outstanding	and	included	in	notes	receivable	and	other	long-term	assets	in	the	accompanying	consolidated balance	sheets.	The	term	of	the	loan	is	seventy	years;	however,	the	loan	may	be	prepaid	by	TV	Azteca	without	penalty	during	the	last	fifty	years	of	the	agreement.	The discount	on	the	loan	is	being	amortized	to	interest	income—TV	Azteca,	net,	using	the	effective	interest	method	over	the	seventy-year	term	of	the	loan.

Simultaneous	with	the	signing	of	the	loan	agreement,	the	Company	also	entered	into	a	seventy	year	Economic	Rights	Agreement	with	TV	Azteca	regarding	space	not used	by	TV	Azteca	on	approximately	190	of	its	broadcast	towers.	In	exchange	for	the	issuance	of	the	below	market	interest	rate	loan	discussed	above	and	the	annual payment	of	$1.5	million	to	TV	Azteca	(under	the	Economic	Rights	Agreement),	the	Company	has	the	right	to	market	and	lease	the	unused	tower	space	on	the	broadcast towers	(the	Economic	Rights).	TV	Azteca	retains	title	to	these	towers	and	is	responsible	for	their	operation	and	maintenance.	The	Company	is	entitled	to	100%	of	the revenues	generated	from	leases	with	tenants	on	the	unused	space	and	is	responsible	for	any	incremental	operating	expenses	associated	with	those	tenants.

The	term	of	the	Economic	Rights	Agreement	is	seventy	years;	however,	TV	Azteca	has	the	right	to	purchase,	at	fair	market	value,	the	Economic	Rights	from	the Company	at	any	time	during	the	last	fifty	years	of	the	agreement.	Should	TV	Azteca	elect	to	purchase	the	Economic	Rights	(in	whole	or	in	part),	it	would	also	be obligated	to	repay	a	proportional	amount	of	the	loan	discussed	above	at	the	time	of	such	election.	The	Company's	obligation	to	pay	TV	Azteca	$1.5	million	annually would	also	be	reduced	proportionally.

The	Company	has	accounted	for	the	annual	payment	of	$1.5	million	as	a	capital	lease	(initially	recording	an	asset	and	a	corresponding	liability	of	approximately	$18.6 million).	The	capital	lease	asset	and	the	discount	on	the	note,	which	aggregate	approximately	$30.2	million,	represent	the	cost	to	acquire	the	Economic	Rights	and	are being	amortized	over	the	seventy-year	life	of	the	Economic	Rights	agreement.

On	a	quarterly	basis,	the	Company	assesses	the	recoverability	of	its	note	receivable	from	TV	Azteca.	As	of	December	31,	2003,	the	Company	has	assessed	the recoverability	of	the	note	receivable	from	TV	Azteca	and	concluded	that	no	adjustment	to	its	carrying	value	is	required.

An	executive	officer	and	former	director	of	the	Company	became	a	director	of	TV	Azteca	in	December	1999.

As	of	December	31,	2003	and	2002,	the	Company	also	had	other	long-term	notes	receivable	outstanding	of	approximately	$13.4	million	and	$13.5	million,	respectively.

# 7.				FINANCING	ARRANGEMENTS

Outstanding	amounts	under	the	Company's	long-term	financing	arrangements	consisted	of	the	following	as	of	December	31,	(in	thousands):

|  | 2003 | 2002 |
| :--- | :--- | :--- |
| Credit\tfacilities | $704,716 | $ 1,510,000 |
| Senior\tsubordinated\tnotes | 400,000 |  |
| Senior\tsubordinated\tdiscount\tnotes,\tnet\tof\tdiscount\tand\twarrant\tvaluation | 424,152 |  |
| Senior\tnotes | 1,000,000 | 1,000,000 |
| Convertible\tnotes,\tnet\tof\tdiscount | 772,199 | 873,640 |
| Notes\tpayable\tand\tcapital\tleases | 60,158 | 64,874 |
| Total | 3,361,225 | 3,448,514 |
| Less: |  |  |
| Current\tportion\tof\tother\tlong-term\tobligations | (77,622) | (269,858) |
| Long-term\tdebt | $3,283,603 | $ 3,178,656 |

The	following	is	a	description	of	the	Company's	outstanding	debt	as	of	December	31,	2003:

Credit	Facilities—The	Company's	credit	facilities	provide	for	a	borrowing	capacity	of	up	to	$999.7	million.	The	Company's	principal	operating	subsidiaries	are	the borrowers	under	the	credit	facilities	and	are	subject	to	compliance	with	certain	financial	ratios.	As	of	December	31,	2003,	the	credit	facilities	include:

•a	$343.2	million	revolving	credit	facility,	of	which	$48.2	million	was	drawn,	and	against	which	$25.7	million	of	outstanding	letters	of	credit	were outstanding,	maturing	on	June	30,	2007	(availability	was	therefore	$269.3	million);

Principal	payments	under	the	credit	facilities	amortize	quarterly	through	their	maturity	dates	based	on	defined	percentages	of	outstanding	commitment	and	principal balances.	The	Company	may	also	be	required	to	make	additional	principal	payments	should	operating	cash	flows	exceed	certain	amounts.	Any	amounts	repaid	under	the term	loan	A	and	the	term	loan	B	will	reduce	future	borrowing	capacity	under	these	facilities	to	the	extent	of	the	amount	repaid.

As	of	December	31,	2002,	the	Company's	credit	facilities	provided	for	a	borrowing	capacity	of	up	to	$2.0	billion.	During	2003,	the	Company	reduced	the	borrowing capacity	under	its	credit	facilities	through	certain	amendments	and	related	prepayments	of	$938.8	million,	scheduled	principal	payments	of	$47.5	million	and unscheduled	principal	payments	of	$14.0	million.	The	Company	amended	its	credit	facilities	in	February,	July	and	November	2003,	primarily	to	facilitate	the	notes offerings	described	below	and	the	August	2003	equity	offering	described	in	note	13.

The	November	2003	amendment	facilitated	the	7.25%	senior	subordinated	notes	offering;	and	the	Company	utilized	the	net	proceeds	of	$389.3	million	to	prepay	$208.0 million	of	term	loan	A,	$140.3	million	of	term	loan	B	and	$41.0	million	of	the	revolving	loan,	resulting	in	a	permanent	reduction	of	the	term	loans	and	revolving	loan commitment.	The	July	2003	amendment	facilitated	the	3.25%	convertible	notes	offering	and	concurrent	equity	offering;	and	the	Company	utilized	$100.0	million	of	the net	proceeds	to	prepay	$61.7	million	of	term	loan	A,	$0.4	million	of	term	loan	B	and	$37.9	million	of	the	revolving	loan,	resulting	in	a	permanent	reduction	of	the	term loans	and	revolving	loan	commitment.	The	remaining	net	proceeds	from	the	equity	offering	are	held	in	a	restricted	account	to	be	used	for	purposes	described	in	notes	1 and	19.	The	February	2003	amendment	facilitated	the	ATI	12.25%	Notes	offering	and	the	Company	utilized	$200.0	million	of	the	net	proceeds	to	prepay	and	reduce scheduled	principal	payments	of	$125.0	million	of	term	loan	A	and	$75.0	million	of	term	loan	B.	The	February	amendment	also	reduced	the	revolving	credit	facility	by $225.0	million	and	the	overall	borrowing	capacity	under	the	credit	facilities	was	reduced	by	a	required	prepayment	of	$24.5	million	from	the	proceeds	of	the	sale	of MTN.	The	remaining	net	proceeds	from	the	ATI	12.25%	Notes	offering	are	held	in	a	restricted	account	to	be	used	for	purposes	described	in	note	1.	As	described	in	note 19,	the	Company	also	amended	its	credit	facilities	in	January	2004.

In	connection	with	each	amendment,	the	Company	recorded	non-cash	charges	related	to	the	write-off	of	deferred	financing	fees	associated	with	the	reduction	in	the borrowing	capacity	under	the	credit	facilities	of	approximately	$4.6	million,	$1.5	million	and	$5.8	million	for	the	November,	July	and	February	amendments, respectively.	These	charges	are	reflected	in	loss	on	retirement	of	long-term	obligations	in	the	accompanying	consolidated	statement	of	operations	for	the	year	ended December	31,	2003.

In	January	2002,	the	Company	terminated	a	$250.0	million	multi-draw	term	loan	C	facility,	none	of	which	facility	had	been	drawn.	In	February	2001,	the	Company's Mexican	subsidiary,	American	Tower	Corporation	de	Mexico,	S.	de	R.L.	de	C.V.	(ATC	Mexico)	and	two	of	its	subsidiaries	consummated	a	loan	agreement	with	a group	of	banks	providing	a	credit	facility	of	an	initial	aggregate	amount	of	$95.0	million.	In	February	2002,	the	Company	repaid	all	loans	outstanding	under	the	ATC Mexico	facility	with	borrowings	under	its	credit	facilities,

and	substantially	all	of	the	Mexican	subsidiaries	became	restricted	subsidiaries	under	the	Company's	credit	facilities.	As	a	result,	the	Company	recorded	charges	of	$7.2 million	and	$1.7	million	related	to	the	write-off	of	certain	deferred	financing	fees,	which	are	reflected	in	loss	on	retirement	of	long-term	obligations	in	the	accompanying consolidated	statement	of	operations	for	the	year	ended	December	31,	2002.

Interest	rates	for	the	revolving	credit	facility	and	the	term	loan	A	are	determined	at	the	option	of	the	Company	(at	a	margin	based	on	leverage)	at	either	2.0%	to	3.25% above	the	LIBOR	rate	or	1.0%	to	2.25%	above	the	defined	base	rate.	Prior	to	the	January	2004	amendment	described	in	note	19,	interest	rates	for	the	term	loan	B	were determined	(at	a	margin	based	on	leverage)	at	3.5%	above	LIBOR	or	2.5%	above	the	defined	base	rate.	The	Company	is	required	to	pay	quarterly	commitment	fees	on the	undrawn	portion	of	the	facility,	ranging	from	0.5%	to	1.0%	per	annum,	depending	on	the	level	of	facility	usage.	In	addition,	the	credit	facilities	require	compliance with	financial	coverage	ratios	that	measure	operating	cash	flow	against	total	debt,	operating	cash	flow	against	senior	debt,	interest	coverage,	pro	forma	debt	service	and fixed	charges,	as	defined	in	the	credit	facilities.	The	credit	facilities	also	contain	financial	and	operational	covenants	and	other	restrictions	which	the	Company,	the borrowers	and	their	restricted	subsidiaries	must	comply	with,	whether	or	not	there	are	borrowings	outstanding.	Such	covenants	and	restrictions	include	restrictions	on certain	types	of	acquisitions,	indebtedness,	investments,	liens,	capital	expenditures,	and	the	ability	of	the	borrowers	to	pay	dividends	and	make	other	distributions.	The borrowers	under	the	credit	facilities	include	the	Company's	principal	domestic	operating	subsidiaries.	The	Company	and	the	restricted	subsidiaries	(as	defined	in	the credit	facilities)	have	guaranteed	all	of	the	loans	under	the	credit	facilities.	These	loans	are	secured	by	liens	on	substantially	all	assets	of	the	Company,	the	borrowers	and the	restricted	subsidiaries.	The	credit	facilities	also	restrict	the	borrowers'	and	the	restricted	subsidiaries'	abilities	to	transfer	funds	to	the	Company.	As	of	December	31, 2003,	substantially	all	assets	of	the	Company,	with	the	exception	of	approximately	$120.9	million	of	restricted	cash	and	investments	and	its	deferred	tax	assets,	are	held by	the	borrowers	and	the	restricted	subsidiaries.	(See	note	19.)

ATI	7.25%	Senior	Subordinated	Notes—In	November	2003,	the	Company's	principal	operating	subsidiary,	ATI,	completed	a	private	placement	of	$400.0	million principal	amount	of	7.25%	senior	subordinated	notes	due	2011	(ATI	7.25%	Notes).	The	net	proceeds	of	the	ATI	7.25%	Notes	offering	were	approximately	$389.3 million	(after	deducting	the	initial	purchasers'	discounts	and	commissions	and	other	expenses	related	to	the	offering)	and	were	used	to	prepay	indebtedness	under	the Company's	credit	facilities.

The	ATI	7.25%	Notes	mature	on	December	1,	2011	and	interest	is	payable	semi-annually	in	arrears	on	June	1	and	December	1	each	year	beginning	June	1,	2004.	The Company	may	redeem	the	notes	after	December	1,	2007.	The	initial	redemption	price	on	the	notes	is	103.625%	of	the	principal	amount,	subject	to	a	ratable	decline	after December	1	of	the	following	year	to	100%	of	the	principal	amount	in	2009	and	thereafter.	The	Company	may	also	redeem	up	to	35%	of	the	notes	any	time	prior	to December	1,	2006	(at	a	price	equal	to	107.25%	of	the	principal	amount	of	the	notes	plus	accrued	and	unpaid	interest,	if	any),	with	the	net	cash	proceeds	of	certain	public equity	offerings	within	sixty	days	after	the	closing	of	any	such	offering.	The	indenture	governing	the	ATI	7.25%	Notes	contains	certain	restrictive	covenants,	including restrictions	on	the	Company's	ability	to	incur	more	debt,	pay	dividends	and	make	certain	investments.	The	notes	rank	junior	in	right	of	payment	to	all	existing	and	future senior	indebtedness	of	ATI,	the	sister	guarantors	(as	defined	in	the	indenture	relating	to	the	notes)	and	their	domestic	subsidiaries,	including	all	indebtedness	outstanding under	the	credit	facilities,	are	structurally	senior	in	right	of	payment	to	all	of	the	Company's	existing	and	future	indebtedness	and	are	pari	passu	with	the	ATI	12.25% Notes.	The	ATI	7.25%	Notes	are	jointly	and	severally	guaranteed	on	a	senior	subordinated	basis	by	the	Company	and	substantially	all	of	its	wholly	owned	domestic subsidiaries.

3.25%	Convertible	Notes—In	August	2003,	the	Company	completed	a	private	placement	of	$210.0	million	principal	amount	of	3.25%	convertible	notes	(3.25%	Notes). The	3.25%	Notes	mature	on	August	1,	2010.	Interest	is	payable	semi-annually	in	arrears	on	February	1	and	August	1	each	year.	The	net	proceeds	of	the	3.25%	Notes offering	were	approximately	$202.8	million	(after	deducting	the	initial	purchasers'	discounts	and	commissions	and	other	expenses	related	to	the	offering),	of	which	the Company	utilized	$100.0	million	to	prepay	a	portion	of	its	outstanding	indebtedness	under	the	credit	facility	(pursuant	to	the	July	2003	amendment	discussed	above)	and placed	the	remaining	$102.8	million	in	a	restricted	account,	which	the	Company	subsequently	utilized	to	fund	repurchases	of	its	2.25%	convertible	notes	and	5.0% convertible	notes.

The	3.25%	Notes	are	convertible	at	any	time	into	shares	of	the	Company's	Class	A	common	stock	at	a	conversion	price	of	$12.22	per	share,	subject	to	certain adjustments.	The	Company	may	redeem	the	3.25%	Notes	on	or	after	August	6,	2008.	The	initial	redemption	price	on	the	3.25%	Notes	is	100.929%	of	the	principal amount,	subject	to	a	ratable	decline	after	August	1	of	the	following	year	to	100%	of	the	principal	amount	in	2010.	The	3.25%	Notes	rank	equally	with	the	Company's other	convertible	notes	and	the	9	3/8%	senior	notes	and	are	structurally	and	effectively	junior	to	indebtedness	outstanding	under	the	credit	facilities,	the	ATI	12.25% Notes	and	the	ATI	7.25%	Notes.

12.25%	Senior	Subordinated	Discount	Notes	and	Warrants—In	January	2003,	the	Company	issued	808,000	units,	each	consisting	of	(1)	$1,000	principal	amount	at maturity	of	ATI	12.25%	senior	subordinated	discount	notes	(ATI	12.25%	Notes)	and	(2)	a	warrant	to	purchase	14.0953	shares	of	Class	A	common	stock	of	the Company,	for	gross	proceeds	of	approximately	$420.0	million.	Net	proceeds	from	the	offering	aggregated	approximately	$397.0	million	(after	deducting	the	initial purchasers'	discounts	and	commissions	and	other	expenses	related	to	the	offering)	and	were	primarily	used	to	prepay	$200.0	million	of	term	loans	under	the	credit facilities	and	to	repurchase	other	outstanding	debt,	with	the	remaining	balance	as	of	December	31,	2003	of	approximately	$49.1	million	held	in	restricted	cash	and investments	as	described	in	note	1.

The	gross	offering	proceeds	of	approximately	$420.0	million	were	allocated	between	the	ATI	12.25%	Notes	($367.4	million)	and	the	warrants	($52.6	million)	based	on their	respective	fair	values.	The	value	ascribed	to	the	warrants	is	reflected	as	a	discount	to	the	ATI	12.25%	Notes	in	the	accompanying	December	31,	2003	balance	sheet and	is	being	accreted	to	interest	expense	utilizing	the	effective	interest	method	over	the	applicable	term.

The	ATI	12.25%	Notes	accrue	no	cash	interest.	Instead,	the	accreted	value	of	each	ATI	12.25%	Note	will	increase	between	the	date	of	original	issuance	and	maturity (August	1,	2008)	at	a	rate	of	12.25%	per	annum.	The	warrants	are	exercisable	at	any	time	on	or	after	January	29,	2006	and	will	expire	on	August	1,	2008.	The	Company may	redeem	the	ATI	12.25%	Notes	on	or	after	February	1,	2006.	The	initial	redemption	price	of	the	ATI	12.25%	Notes	is	106.125%	of	the	principal	amount,	subject	to	a ratable	decline	the	following	year	to	100%	of	the	principal	amount	in	2008	and	thereafter.	The	indenture	governing	the	ATI	12.25%	Notes	contains	certain	restrictive covenants,	including	restrictions	on	the	Company's	ability	to	incur	more	debt,	pay	dividends	and	make	certain	investments.

The	Company's	payment	obligations	under	the	ATI	12.25%	Notes	are	fully	and	unconditionally	guaranteed	on	a	joint	and	several	basis	by	the	Company	and substantially	all	of	the	Company's	and	ATI's	wholly	owned	domestic	subsidiaries.	The	ATI	12.25%	Notes	rank	junior	in	right	of	payment	to	all	existing	and	future senior	indebtedness	of	ATI,	the	sister	guarantors	(as	defined	in	the	indenture	relating	to	the	notes)	and	their	domestic	subsidiaries,	including	all	indebtedness	outstanding under	the	credit	facilities,	are	structurally	senior	in	right	of	payment	to	all	other	existing	and	future	indebtedness	of	the	Company	and	are	pari	passu	with	the	ATI	7.25% Notes.

As	of	December	31,	2003,	the	outstanding	debt	under	the	ATI	12.25%	Notes	was	$424.2	million	accreted	value,	net	of	the	allocated	fair	value	of	the	warrants	of	$44.2 million.

9	3/8%	Senior	Notes—In	January	2001,	the	Company	completed	a	private	placement	of	$1.0	billion	principal	amount	of	9	3/8%	senior	notes	(9	3/8%	Notes),	which	mature on	February	1,	2009.	Interest	on	the	9	3/8%	Notes	is	payable	semiannually	on	February	1	and	August	1.	The	Company	may	redeem	the	9	3/8%	Notes	before	February	1, 2005	at	100%	of	the	principal	amount	plus	an	applicable	make-whole	premium.	The	Company	may	also	redeem	the	9	3/8%	Notes	on	or	after	February	1,	2005	at	the initial	redemption	price	of	104.688%	of	the	principal	amount,	subject	to	a	ratable	decline	in	each	of	the	following	years	to	100%	of	the	principal	amount	in	2008	and thereafter.	The	indenture	governing	the	9	3/8%	Notes	contains	certain	restrictive	covenants	including	restrictions	on	the	Company's	ability	to	incur	more	debt,	guarantee debt,	pay	dividends	and	make	certain	investments.	Proceeds	from	the	9	3/8%	Notes	offering	were	used	to	finance	construction	of	towers,	fund	acquisitions	and	for	general corporate	purposes.	The	9	3/8%	Notes	rank	equally	with	all	of	the	convertible	notes	and	are	structurally	and	effectively	junior	to	indebtedness	outstanding	under	the credit	facilities,	the	ATI	12.25%	Notes	and	the	ATI	7.25%	Notes.

5.0%	Convertible	Notes—In	February	2000,	the	Company	completed	a	private	placement	of	$450.0	million	principal	amount	of	5.0%	convertible	notes	(5.0%	Notes). The	5.0%	Notes	mature	on	February	15,	2010.	Interest	on	the	5.0%	Notes	is	payable	semiannually	on	February	15	and	August	15	of	each	year.	The	indenture	governing the	5.0%	Notes	does	not	contain	any	restrictive	covenants.	The	credit	facilities	restrict	the	Company's	ability	to	repurchase	the	convertible	notes	for	cash	from	the proceeds	of	borrowings	under	the	credit	facilities	or	from	internally	generated	funds	from	any	of	the	Company's	restricted	subsidiaries	(under	its	credit	facilities).

The	5.0%	Notes	are	convertible	at	any	time	into	shares	of	the	Company's	Class	A	common	stock	at	a	conversion	price	of	$51.50	per	share,	subject	to	adjustment	in certain	cases.	The	Company	may	redeem	the	5.0%	Notes	at	any	time	after	February	20,	2003.	The	initial	redemption	price	on	the	5.0%	Notes	is	102.5%	of	the	principal amount,	subject	to	ratable	declines	immediately	after	February	15	of	the	following	year	to	100%	of	the	principal	amount	in	2006	and	thereafter.	The	holders	have	the option	of	requiring	the	Company	to	repurchase	all	or	any	of	the	5.0%	Notes	on	February	20,	2007	at	their	principal	amount,	together	with	accrued	and	unpaid	interest. The	Company	may,	subject	to	certain	conditions	in	the	applicable	indenture	(including	the	condition	that	the	Company's	Class	A	common	stock	trade	on	a	national securities	exchange	or	Nasdaq),	elect	to	pay	the	repurchase	price	in	cash	or	shares	of	Class	A	common	stock,	or	any	combination	thereof.	The	5.0%	Notes	rank	equally with	the	Company's	other	convertible	notes	and	the	9	3/8%	Notes	and	are	structurally	and	effectively	junior	to	indebtedness	outstanding	under	the	credit	facilities,	the ATI	12.25%	Notes	and	the	ATI	7.25%	Notes.

During	the	year	ended	December	31,	2003,	the	Company	repurchased	an	aggregate	of	$100.6	million	principal	value	of	its	5.0%	Notes	for	approximately	$91.7	million in	cash.	As	a	consequence	of	these	repurchases,	the	Company	recorded	a	net	gain	of	approximately	$7.1	million,	which	is	reflected	in	loss	on	retirement	of	long-term obligations	in	the	accompanying	consolidated	statement	of	operations	for	the	year	ended	December	31,	2003.

2.25%	and	6.25%	Convertible	Notes—In	October	1999,	the	Company	completed	a	private	placement	of	$300.0	million	principal	amount	of	6.25%	convertible	notes (6.25%	Notes),	issued	at	100%	of	their	face	amount,	and	$425.5	million	principal	amount	of	2.25%	convertible	notes	(2.25%	Notes),	issued	at	70.52%	of	their	face amount	(collectively,	the	"Notes").	The	yield	to	maturity	on	the	2.25%	Notes	is	6.25%,	giving	effect	to	the	original	discount.	The	Notes	mature	on	October	15,	2009. Interest	on	the	Notes	is	payable	semiannually	on	April	15	and	October	15	of	each	year.

Pursuant	to	the	indenture	for	the	2.25%	Notes,	the	note	holders	had	the	right	to	require	the	Company	to	repurchase	all	or	any	part	of	their	notes	on	October	22,	2003 (using	cash,	Class	A	common	stock,	or	a	combination	thereof,	at	the	Company's	option)	at	$802.93	per	note	plus	accrued	and	unpaid	interest,	if	any.	Accordingly,	the 2.25%	Notes	were	included	in	current	portion	of	long-term	debt	in	the	accompanying	consolidated	balance	sheet	as	of	December	31,	2002.

During	the	year	ended	December	31,	2003,	the	Company	repurchased	an	aggregate	of	$215.0	million	accreted	value	($269.8	million	face	value)	of	its	2.25%	Notes	in exchange	for	an	aggregate	of	8,415,984	shares	of	Class	A	common	stock	and	$166.4	million	in	cash,	including	$84.2	million	accreted	value	($104.9	million	face amount)	of	2.25%	Notes	repurchased	in	the	Company's	cash	tender	offer	in	October	2003.	These	shares	included	an	aggregate	of	6,440,636	shares	of	Class	A	common stock	issued	to	such	holders	in	addition	to	the	amounts	issuable	upon	conversion	of	those	notes	as	provided	in	the	applicable	indentures.	The	Company	made	these repurchases	pursuant	to	negotiated	transactions	with	a	limited	number	of	note	holders.

As	a	consequence	of	these	transactions,	the	Company	recorded	charges	of	approximately	$41.4	million	during	the	year	ended	December	31,	2003,	which	primarily represent	the	fair	market	value	of	the	shares	of	stock	issued	to	the	note	holders	in	excess	of	the	number	of	shares	originally	issuable	upon	conversion	of	the	notes,	as	well as	cash	paid	in	excess	of	the	related	debt	retired.	These	charges	are	included	in	loss	on	retirement	of	long-term	obligations	in	the	accompanying	consolidated	statement of	operations	for	the	year	ended	December	31,	2003.

During	the	year	ended	December	31,	2001,	the	Company	repurchased	a	portion	of	its	2.25%	Notes	in	exchange	for	shares	of	its	Class	A	common	stock.	As	a consequence	of	those	negotiated	exchanges	with	certain	note	holders,	the	Company	recorded	a	loss	on	retirement	of	long-term	obligations	of	$26.3	million	in	the accompanying	consolidated	statement	of	operations	for	the	year	ended	December	31,	2001,	which	primarily	represented	the	fair	value	of	the	shares	issued	to	the	note holders	to	induce	them	to	convert	their	holdings	prior	to	the	first	scheduled	redemption	date.

In	February	2004,	the	Company	redeemed	all	of	its	outstanding	6.25%	Notes.	(See	note	19.)

Capital	Lease	Obligations	and	Notes	Payable—The	Company's	capital	lease	obligations	and	notes	payable	approximated	$60.2	million	and	$64.9	million	as	of December	31,	2003	and	2002,	respectively.	These	obligations	bear	interest	at	rates	ranging	from	7.9%	to	12.0%	and	mature	in	periods	ranging	from	less	than	one	year	to approximately	seventy	years.

Maturities—As	of	December	31,	2003,	aggregate	principal	payments	of	long-term	debt,	including	capital	leases,	for	the	next	five	years	and	thereafter	are	estimated	to	be (in	thousands):

The	holders	of	the	Company's	convertible	notes	have	the	right	to	require	the	Company	to	repurchase	their	notes	on	specified	dates	prior	to	their	maturity	dates	in	2009 and	2010,	but	the	Company	may	pay	the	purchase	price	by	issuing	shares	of	Class	A	common	stock,	subject	to	certain	conditions.	Obligations	with	respect	to	the	right	of the	holders	to	put	the	6.25%	Notes	and	5.0%	Notes	have	been	included	in	the	table	above	as	if	such	notes	mature	on	the	date	of	their	put	rights	in	2006	and	2007, respectively.	(See	note	19.)

# 8.				DERIVATIVE	FINANCIAL	INSTRUMENTS

Under	the	terms	of	the	credit	facilities,	the	Company	is	required	to	enter	into	interest	rate	protection	agreements	on	at	least	50%	of	its	variable	rate	debt.	Under	these agreements,	the	Company	is	exposed	to	credit	risk	to	the	extent	that	a	counterparty	fails	to	meet	the	terms	of	a	contract.	Such	exposure	is	limited	to	the	current	value	of the	contract	at	the	time	the	counterparty	fails	to	perform.	The	Company	believes	its	contracts	as	of	December	31,	2003	are	with	credit	worthy	institutions.	As	of December	31,	2003,	the	Company	had	three	interest	rate	caps	outstanding	that	include	an	aggregate	notional	amount	of	$500.0	million	(each	at	an	interest	rate	of	5%) and	expire	in	2004.	As	of	December	31,	2003	and	2002,	liabilities	related	to	derivative	financial	instruments	of	$0.0	million	and	$15.5	million	are	reflected	in	other long-term	liabilities	in	the	accompanying	consolidated	balance	sheet.

During	the	year	ended	December	31,	2003,	the	Company	recorded	an	unrealized	loss	of	approximately	$0.3	million	(net	of	a	tax	benefit	of	approximately	$0.2	million) in	other	comprehensive	loss	for	the	change	in	fair	value	of	cash	flow	hedges	and	reclassified	$5.9	million	(net	of	a	tax	benefit	of	approximately	$3.2	million)	into	results of	operations.	During	the	year	ended	December	31,	2002,	the	Company	recorded	an	unrealized	loss	of	approximately	$9.1	million	(net	of	a	tax	benefit	of	approximately $4.9	million)	in	other	comprehensive	loss	for	the	change	in	fair	value	of	cash	flow	hedges	and	reclassified	$19.5	million	(net	of	a	tax	benefit	of	approximately	$10.5 million)	into	results	of	operations.	Hedge	ineffectiveness	resulted	in	a	gain	of	approximately	$1.0	million	and	a	loss	of	approximately	$2.2	million	for	the	years	ended December	31,	2002	and	2001,	respectively,	which	are	recorded	in	loss	on	investments	and	other	expense	in	the	accompanying	consolidated	statements	of	operations	for those	periods.	The	Company	records	the	changes	in	fair	value	of	its	derivative	instruments	that	are	not	accounted	for	as	hedges	in	loss	on	investments	and	other	expense. The	Company	does	not	anticipate	reclassifying	any	derivative	losses	into	its	statement	of	operations	within	the	next	twelve	months,	as	there	are	no	amounts	included	in other	comprehensive	loss	as	of	December	31,	2003.

# 9.				COMMITMENTS	AND	CONTINGENCIES

Lease	Obligations—The	Company	leases	certain	land,	office	and	tower	space	under	operating	leases	that	expire	over	various	terms.	Many	of	the	leases	contain	renewal options	with	specified	increases	in	lease	payments	upon	exercise	of	the	renewal	option.	Escalation	clauses	present	in	operating	leases,	excluding	those	tied	to	CPI,	are straight-lined	over	the	term	of	the	lease.

Future	minimum	rental	payments	under	non-cancelable	operating	leases	in	effect	at	December	31,	2003	are	as	follows	(in	thousands):

| Year	Ending	December	31, |  |
| :--- | :--- |
| 2004 | $87,905 |
| 2005 | 75,104 |
| 2006 | 62,075 |
| 2007 | 52,234 |
| 2008 | 42,591 |
| Thereafter | 289,857 |
| Total | $609,766 |

Future	minimum	payments	under	capital	leases	(see	note	7)	in	effect	at	December	31,	2003	are	as	follows	(in	thousands):

| Year	Ending	December	31, |  |
| :--- | :--- |
| 2004 | $5,046 |
| 2005 | 4,075 |
| 2006 | 3,326 |
| 2007 | 3,160 |
| 2008 | 3,184 |
| Thereafter | 208,645 |
| Total\tminimum\tlease\tpayments | 227,436 |
| Less\tamounts\trepresenting\tinterest | (184,473) |
| Present\tvalue\tof\tcapital\tlease\tobligations | $42,963 |

Customer	Leases—The	Company's	lease	agreements	with	its	customers	vary	depending	upon	the	industry.	Television	and	radio	broadcasters	prefer	long-term	leases, while	wireless	communications	providers	favor	leases	in	the	range	of	five	to	ten	years.	Most	leases	contain	renewal	options.

Future	minimum	rental	receipts	expected	from	customers	under	non-cancelable	operating	lease	agreements	in	effect	at	December	31,	2003	are	as	follows	(in	thousands):

| Year	Ending	December	31, |  |
| :--- | :--- |
| 2004 | $553,610 |
| 2005 | 519,212 |
| 2006 | 474,391 |
| 2007 | 420,123 |
| 2008 | 373,027 |
| Thereafter | 1,273,274 |
| Total | $3,613,637 |

Verestar—As	discussed	in	note	2,	Verestar	filed	for	protection	under	chapter	11	of	the	federal	bankruptcy	laws	on	December	22,	2003.	The	Company	is	primarily	or secondarily	liable	as	a	guarantor	for	up	to	$10.0	million	of	contractual	obligations	associated	with	Verestar,	if	Verestar	fails	to	honor	these	obligations.	The	Company has	accrued	its	estimate	of	costs	to	settle	these	obligations	as	of	December	31,	2003.	In	addition,	Verestar's	bankruptcy	estate	may	bring	certain	claims	(no	claims	have been	made	to	date)	against	the	Company	or	seek	to	hold	the	Company	liable	for	certain	transfers	made	by	Verestar	to	the	Company	and/or	for	Verestar's	obligations	to creditors	under	various	equitable	theories	recognized	under	bankruptcy	law.	In	the	opinion	of	management,	the	resolution	of	any	claims	that	may	be	made	against	the Company	by	Verestar's	bankruptcy	estate	will	not	have	a	material	impact	on	the	company's	consolidated	financial	position,	results	of	operations	or	liquidity.	Finally,	the Company	will	incur	additional	costs	in	connection	with	its	involvement	in	the	reorganization	or	liquidation	of	Verestar's	business.	Such	costs	will	be	expensed	as incurred.

Acquisitions—As	of	December	31,	2003,	the	Company	was	party	to	agreements	relating	to	the	acquisition	of	tower	assets	from	third	parties	for	an	estimated	aggregate purchase	price	of	$31.4	million.	The	Company	may	pursue	the	acquisition	of	other	assets	and	businesses	in	new	and	existing	locations,	although	there	are	no	definitive material	agreements	with	respect	thereto.	(See	note	14.)

Build-to-Suit	Agreements—As	of	December	31,	2003,	the	Company	was	party	to	various	arrangements	relating	to	the	construction	of	tower	sites	under	existing	build-to- suit	agreements.	Under	the	terms	of	the	agreements,	the	Company	is	obligated	to	construct	up	to	750	towers,	which	includes	up	to	400	towers	in	Mexico	and	350	towers in	Brazil	over	the	next	three	years.	The	Company	is	in	the	process	of	renegotiating	several	of	these	agreements	to	reduce	its	overall	commitment;	however,	there	can	be no	assurance	that	it	will	be	successful	in	doing	so.	During	the	year	ended	December	31,	2003,	the	Company	built	15	towers	under	these	arrangements.

Guarantees	and	Indemnifications—As	described	in	note	1,	the	Company	applied	the	initial	liability	and	measurement	provisions	of	FIN	45	during	2003.	The	Company enters	into	agreements	from	time	to	time	in	the	ordinary	course	of	business	pursuant	to	which	it	agrees	to	indemnify	third	parties	for	certain	claims.	The	Company	has also	entered	into	purchase	and	sale	agreements	relating	to	the	sale	or	acquisition	of	assets	containing	customary	indemnification	provisions.	The	Company's indemnification	obligations	under	these	agreements	generally	are	limited	solely	to	damages	resulting	from	breaches	of	representations	and	warranties	or	covenants	under the	applicable	agreements,	but	do	not	guaranty	future	performance.	In	addition,	payments	under	such	indemnification	clauses	are	generally	conditioned	on	the	other party	making	a	claim	that	is	subject	to	whatever	defenses	the	Company	may	have	and	are	governed	by	dispute	resolution	procedures	specified	in	the	particular	contract. Further,	the	Company's	obligations	under	these	agreements	may	be	limited	in	duration	and/or	amount,	and	in	some	instances,	the	Company	may	have	recourse	against third	parties	for	payments	made	by	the	Company.	The	Company	has	not	historically	made	any	material	payments	under	these	agreements	and,	as	of	December	31,	2003, is	not	aware	of	any	agreements	that	could	result	in	a	material	payment.

Litigation—The	Company	periodically	becomes	involved	in	various	claims	and	lawsuits	that	are	incidental	to	its	business.	In	the	opinion	of	management,	after consultation	with	counsel,	there	are	no	matters	currently	pending	which	would,	in	the	event	of	adverse	outcome,	have	a	material	impact	on	the	Company's	consolidated financial	position,	the	results	of	its	operations	or	liquidity.

# 10.				RELATED	PARTY	TRANSACTIONS

In	October	2003,	Steven	B.	Dodge	(Mr.	Dodge),	the	Company's	Chairman	and	Chief	Executive	Officer	until	such	date,	announced	his	retirement	as	Chief	Executive Officer	and	the	Company	agreed	to	pay	Mr.	Dodge

$1.4	million	pursuant	to	the	terms	of	his	retirement	agreement.	This	expense	is	reflected	in	impairments,	net	loss	on	sale	of	assets	and	restructuring	expense	in	the accompanying	statement	of	operations	for	the	year	ended	December	31,	2003.	In	January	2004,	the	Company	also	entered	into	an	employment	agreement	with	Mr. Dodge,	pursuant	to	which	Mr.	Dodge	will	perform	certain	duties	for	the	Company	on	a	part-time	basis,	as	specified	by	the	terms	of	such	agreement.	In	February	2004, Mr.	Dodge	retired	from	the	board	of	directors	and	his	position	as	Chairman.	(See	note	19.)

JP	Morgan	Chase	Bank	(Chase)	is	a	lender	under	the	Company's	credit	facilities	and	had	participation	percentages	ranging	from	0.88%	to	2.22%	during	2003,	2002	and 2001.	Chase	is	an	affiliate	of	J.P.	Morgan	Partners,	LLC	(JPMP),	which	indirectly	controls	J.P.	Morgan	Partners	(BHCA),	L.P.	(JPLP)	and	J.P.	Morgan	Partners (23ASBIC),	LLC	(JPSBIC),	stockholders	of	the	Company.	As	of	December	31,	2003,	a	director	of	the	Company	(who	resigned	in	January	2004)	is	an	Executive	Partner of	JPMP.	At	December	31,	2003,	2002	and	2001,	the	aggregate	principal	amount	outstanding	under	the	credit	facilities	was	approximately	$704.7	million,	$1.5	billion and	$1.4	billion,	respectively.	Chase's	participation	in	the	credit	facilities	at	December	31,	2003	was	1.77%.	Chase's	approximate	share	of	interest	and	fees	paid	by	the Company	pursuant	to	its	various	credit	arrangements	was	approximately	$0.7	million,	$0.9	million	and	$1.5	million	in	2003,	2002	and	2001,	respectively.

In	March	2001,	the	Company	purchased	78,432	shares	of	Class	B	Common	Stock,	par	value	$0.01	per	share,	of	America	Connect,	Inc.,	a	Delaware	corporation,	from JPSBIC	for	100,000	shares	of	the	Company's	Class	A	common	stock.

As	of	December	31,	2003	and	2002,	amounts	outstanding	under	demand	loans	to	certain	executive	officers	approximated	$0.1	million	and	$0.2	million,	respectively. These	loans	were	made	prior	to	July	30,	2002.

In	October	2001,	the	Company	consummated	the	sale	of	8.7%	of	its	Mexican	subsidiary,	ATC	Mexico	Holding	Corp.	(ATC	Mexico	Holding),	to	J.	Michael	Gearon,	Jr. (Mr.	Gearon),	currently	an	executive	officer	and	a	director	through	May	2003,	for	$8.4	million.	Mr.	Gearon	paid	$1.7	million	in	cash	and	paid	the	remaining	portion	of the	purchase	price	with	a	7%	secured	note	due	2010	in	the	principal	amount	of	$6.7	million.	The	note,	which	accrues	interest	and	is	payable	quarterly,	is	secured	by certain	shares	of	the	Company's	Class	A	common	stock	owned	by	Mr.	Gearon	and	his	interest	in	ATC	Mexico	Holding.	Interest	income	(paid	quarterly)	on	the	7% secured	note	approximated	$470,000	for	the	years	ended	December	31,	2003	and	2002	and	$104,000	for	the	year	ended	December	31,	2001.	The	purchase	price represented	the	fair	market	value	of	an	8.7%	interest	in	ATC	Mexico	Holding	on	the	date	of	the	sale	as	determined	with	the	assistance	of	an	independent	appraiser. Pursuant	to	the	terms	of	the	stockholder	agreement,	Mr.	Gearon	may	require	the	Company	to	purchase	his	interest	in	ATC	Mexico	Holding,	for	its	then	fair	market	value, any	time	after	the	soonest	to	occur	of	July	1,	2004,	a	change	in	control	(as	defined	in	the	stockholder	agreement	relating	to	Mr.	Gearon's	investment)	of	the	Company	or ATC	Mexico	Holding,	or	Mr.	Gearon's	death	or	disability.	In	January	2003,	as	a	result	of	the	occurrence	of	a	change	in	control,	Mr.	Gearon's	right	to	require	the Company	to	purchase	his	interest	in	ATC	Mexico	Holding	was	accelerated	and	became	exercisable.	(See	note	19.)

During	the	years	ended	December	31,	2003,	2002	and	2001,	the	Company	retained	several	wholly	owned	subsidiaries	of	Nordblom	Co.	Inc.	to	provide	various	real estate	services	in	connection	with	its	acquisition,	financing,	ownership	and	leasing	of	several	properties.	Services	rendered	by	those	companies	included	the	following: advice	in	connection	with	the	acquisition	and	mortgage	financing	of	the	Company's	corporate	headquarters	building	in	Boston	(which	was	sold	in	December	2002)	and two	other	office	buildings	in	which	it	has	regional	offices	(one	of	which	was	sold	in	May	2003);	the	management	of	those	buildings;	and	the	leasing	of	certain	of	them. The	Company	paid	the	Nordblom	companies,	including	Nordic	Properties,	an	affiliate	of

Nordblom,	an	aggregate	of	$151,000,	$574,000	and	$772,000	in	2003,	2002	and	2001,	respectively.	Two	brothers	and	the	father	of	Mr.	Dodge's	wife	own	the controlling	interest	of	Nordblom	Co.	Inc.	and	Nordic	Properties.	Mr.	Dodge's	wife	has	no	interest	in	Nordblom	Co.	Inc.	or	Nordic	Properties	and	Mr.	Dodge	was	not involved	in	the	negotiation	of	any	of	the	arrangements.	The	Company	believes	that	all	of	the	arrangements	with	the	Nordblom	companies	are	on	terms	and	conditions that	are	customary	in	the	industry	and	at	least	as	favorable	to	the	Company	as	could	be	obtained	from	an	unrelated	real	estate	management	company.

In	December	2002,	in	connection	with	a	potential	financing	transaction	between	the	Company	and	SPO	Partners	II,	LP	(SPO),	the	Company	entered	into	a	letter agreement	with	SPO,	which	at	the	time	was	a	holder	of	more	than	5%	of	its	Class	A	common	stock.	The	agreement	provided	for	a	$2.0	million	break-up	fee	(plus expenses)	payable	to	SPO	in	the	event	that	the	Company	consummated	an	alternative	financing	transaction.	As	a	result	of	the	ATI	12.25%	Notes	offering	described	in note	7,	the	Company	paid	this	$2.0	million	break-up	fee	and	recorded	these	expenses	in	loss	on	investments	and	other	expense	in	the	accompanying	statement	of operations	for	the	year	ended	December	31,	2003.

# Impairments	and	Net	Loss	on	Sale	of	Long-Lived	Assets

During	the	years	ended	December	31,	2003,	2002	and	2001,	the	Company	recorded	impairments	and	net	loss	on	sale	of	long-lived	assets	(primarily	related	to	its	rental and	management	segment)	of	$28.3	million,	$90.7	million	and	$74.3	million,	respectively.	The	significant	components	(reflected	in	impairments,	net	loss	on	sale	of long-lived	assets	and	restructuring	expense	in	the	accompanying	consolidated	statements	of	operations)	include	the	following:

Non-Core	Asset	Impairment	Charges—During	the	year	ended	December	31,	2003,	the	Company	sold	approximately	300	non-core	towers	and	certain	other	non- core	assets	and	recorded	impairment	charges	to	write-down	certain	other	non-core	towers	and	assets.	As	a	result,	the	Company	recorded	impairment	charges	and net	loss	on	sale	of	long-lived	assets	of	approximately	$19.1	million	for	the	year	ended	December	31,	2003.

During	the	year	ended	December	31,	2002,	the	Company	sold	approximately	720	non-core	towers	and	recorded	impairment	charges	to	write-down	certain	other non-core	towers.	As	a	result,	the	Company	recorded	impairment	charges	and	net	losses	of	approximately	$46.8	million	for	the	year	ended	December	31,	2002.

During	the	year	ended	December	31,	2001,	the	Company	recorded	impairment	charges	of	approximately	$11.7	million	to	write-down	certain	non-core	towers.

Construction-In-Progress	Impairment	Charges—For	the	year	ended	December	31,	2003,	the	Company	wrote-off	approximately	$9.2	million	of	construction-in- progress	costs,	primarily	associated	with	sites	that	it	no	longer	planned	to	build.

In	September	2002,	the	Company	reduced	the	scope	of	its	new	tower	construction	and	build	plans	for	the	remainder	of	2002	and	for	2003	by	implementing	more stringent	construction	criteria	than	was	previously	in	place.	As	a	result,	the	Company	wrote-off	approximately	$40.2	million	of	construction	in	progress	costs	for the	year	ended	December	31,	2002	associated	with	sites	that	it	no	longer	planned	to	build.

In	November	2001,	the	Company	announced	certain	initiatives	that	included	a	reduction	in	the	scope	of	its	tower	development	activities.	This	resulted	in	a significant	decrease	in	new	tower	construction	and	more	stringent	criteria	for	evaluating	tower	construction	and	acquisitions.	As	a	result,	the	Company	wrote	off approximately	$62.6	million	of	construction-in-progress	costs	for	the	year	ended	December	31,	2001	associated	with	sites	that	it	no	longer	planned	to	build.

# Restructuring	Expense

In	November	2001,	the	Company	announced	a	restructuring	of	the	organization	and	implemented	an	initiative	to	consolidate	operations	in	each	of	its	business	segments. During	the	year	ended	December	31,	2001,	the	Company	incurred	employee	separation	costs	associated	with	the	termination	of	approximately	525	employees (primarily	tower	development	and	administrative	employees)	and	facility	closing	costs	associated	with	the	shut-down	of	approximately	20	field	office	locations aggregating	$5.2	million.	As	a	result	of	these	continuing	initiatives,	in	2002,	the	Company	incurred	employee	separation	costs	associated	with	the	termination	of approximately	460	employees	(primarily	development	and	administration)	as	well	as	costs	associated	with	the	termination	of	lease	obligations	and	other	incremental facility	closing	costs	aggregating	$10.6	million.	These	costs	are	reflected	in	impairments,	net	loss	on	sale	of	long-lived	assets	and	restructuring	expense	in	the accompanying	consolidated	statements	of	operations	for	the	years	ended	December	31,	2002	and	2001.

During	the	year	ended	December	31,	2003,	the	Company	incurred	employee	separation	costs	primarily	associated	with	a	reorganization	of	certain	functions	within	its rental	and	management	segment	and	increased	its	accrued	restructuring	liability	by	$2.3	million.	This	charge	is	reflected	in	impairments,	net	loss	on	sale	of	long-lived assets	and	restructuring	expense	in	the	accompanying	consolidated	statement	of	operations	for	the	year	ended	December	31,	2003.

The	following	table	displays	activity	with	respect	to	the	accrued	restructuring	liability	for	the	years	ended	December	31,	2001,	2002	and	2003	(in	thousands).	The accrued	restructuring	liability	is	reflected	in	accounts	payable	and	accrued	expenses	in	the	accompanying	consolidated	balance	sheets	as	of	December	31,	2003,	2002 and	2001.

|  | 2001<br>Restructuring<br>Expense | 2001<br>Cash<br>Payments | Liability<br>as	of<br>December	31,<br>2001 | 2002<br>Restructuring<br>Expense | 2002<br>Cash<br>Payments | Liability<br>as	of<br>December	31,<br>2002 | 2003<br>Restructuring<br>Expense | 2003<br>Cash<br>Payments | Liability<br>as	of<br>December	31,<br>2003 |
| :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- |
| Restructuring\tcosts |  |  |  |  |  |  |  |  |  |
| Employee\tseparations | $2,482 | $(1,945) | $537 | $6,501 | $(5,399) | $1,639 | $1,919 | $(1,319) | $2,239 |
| Lease\tterminations\tand |  |  |  |  |  |  |  |  |  |
| other\tfacility\tclosing |  |  |  |  |  |  |  |  |  |
| costs | 2,754 | (445) | 2,309 | 4,137 | (4,453) | 1,993 | 347 | (890) | 1,450 |
| Total | $5,236 | $(2,390) | $2,846 | $10,638 | $(9,852) | $3,632 | $2,266 | $(2,209) | $3,689 |

There	were	no	material	changes	in	estimates	related	to	the	Company's	accrued	restructuring	liabilities	during	the	years	ended	December	31,	2003	and	2002.	The Company	expects	to	pay	substantially	all	of	the	employee	separation	liabilities	in	2004.	Additionally,	the	Company	continues	to	negotiate	certain	lease	terminations associated	with	its	restructuring	liability.

The	income	tax	benefit	(provision)	from	continuing	operations	was	comprised	of	the	following	for	the	years	ended	December	31,	(in	thousands):

|  | 2003 | 2002 | 2001 |
| :--- | :--- | :--- | :--- |
| Current: |  |  |  |
| Foreign |  | $(3,147) | $(3,624) |
| Deferred: |  |  |  |
| Federal | $93,566 | 121,114 | 140,299 |
| State | 15,709 | 15,887 | 18,389 |
| Foreign | (6,695) | (2,170) | (4,475) |
| Less: |  |  |  |
| Benefit\tfrom\tdisposition\tof\tstock\toptions\trecorded\tto\tadditional\tpaid-in\tcapital | (894) |  | (1,001) |
| Valuation\tallowance | (35,549) | (63,901) | (47,556) |
| Income\ttax\tbenefit | $66,137 | $67,783 | $102,032 |

The	domestic	and	international	components	of	(loss)	income	from	continuing	operations	before	income	taxes	were	as	follows	for	the	years	ended	December	31,	(in thousands):

|  | 2003 | 2002 | 2001 |
| :--- | :--- | :--- | :--- |
| United\tStates | $(346,581) | $(403,950) | $(508,180) |
| International | 37,953 | 15,630 | 15,044 |
| Total | $(308,628) | $(388,320) | $(493,136) |

A	reconciliation	between	the	U.S.	statutory	rate	from	continuing	operations	and	the	effective	rate	was	as	follows	for	the	years	ended	December	31,

|  | 2003 | 2002 |
| :--- | :--- | :--- |
| Current\tassets: |  |  |
| Allowances,\taccruals\tand\tother\titems\tnot\tcurrently\tdeductible | $14,122 | $13,111 |
| Long-term\titems: |  |  |
| Assets: |  |  |
| Net\toperating\tloss\tcarryforwards | 406,482 | 447,682 |
| Refund\treceivable\tfrom\tnet\toperating\tloss\tcarryback | 132,710 |  |
| Basis\tstep-up\tfrom\tcorporate\trestructuring\tand\ttax\tplanning\tstrategies | 87,500 | 97,219 |
| Items\tnot\tcurrently\tdeductible\tand\tother | 86,946 | 78,949 |
| Liabilities: |  |  |
| Depreciation\tand\tamortization | (64,691) | (97,038) |
| Other | (43,066) | (24,741) |
| Subtotal | 605,881 | 502,071 |
| Less:\tValuation\tallowance | (156,701) | (118,640) |
| Net\tlong-term\tdeferred\ttax\tassets | $449,180 | $383,431 |

Basis	step-up	from	corporate	restructuring	represents	the	tax	effects	of	increasing	the	basis	for	tax	purposes	of	certain	of	the	Company's	assets	in	conjunction	with	its spin-off	from	American	Radio	Systems	Corporation,	its	former	parent	company.

At	December	31,	2003,	the	Company	had	net	federal	and	state	operating	loss	carryforwards	available	to	reduce	future	taxable	income	of	approximately	$0.9	billion	and $1.5	billion,	respectively.	If	not	utilized,	the	Company's	net	operating	loss	carryforwards	expire	as	follows	(in	thousands):

| Years	ended	December	31, | Federal | State |
| :--- | :--- | :--- |
| 2004\tto\t2008 | $1,451 | $483,578 |
| 2009\tto\t2013 | 12,234 | 66,666 |
| 2014\tto\t2018 | 10,191 | 235,589 |
| 2019\tto\t2023 | 903,010 | 728,139 |
| Total | $926,886 | $1,513,972 |

SFAS	No.	109,	"Accounting	for	Income	Taxes,"	requires	that	companies	record	a	valuation	allowance	when	it	is	"more	likely	than	not	that	some	portion	or	all	of	the deferred	tax	assets	will	not	be	realized."	At	December	31,	2003,	the	Company	has	provided	a	valuation	allowance	of	approximately	$156.7	million,	primarily	related	to net	state	deferred	tax	assets,	capital	loss	carryforwards	and	the	lost	tax	benefit	and	costs	associated	with	our	tax	refund	claims.	The	Company	has	not	provided	a valuation	allowance	for	the	remaining	net	deferred	tax	assets,	primarily	its	tax	refund	claims	and	federal	net	operating	loss	carryforwards,	as	management	believes	the Company	will	be	successful	with	its	tax	refund	claims	and	have	sufficient	time	to	realize	these	federal	net	operating	loss	carryforwards	during	the	twenty-year	tax carryforward	period.

The	Company	intends	to	recover	a	portion	of	its	deferred	tax	asset	through	its	tax	refund	claims,	related	to	certain	federal	net	operating	losses,	filed	during	2003	as	part of	a	tax	planning	strategy	implemented	in	2002.	The	recoverability	of	its	remaining	net	deferred	tax	asset	has	been	assessed	utilizing	stable	state	(no	growth)	projections based	on	its	current	operations.	The	projections	show	a	significant	decrease	in	depreciation	and	interest	expense	in	the	later	years	of	the	carryforward	period	as	a	result	of a	significant	portion	of	its	assets	being	fully	depreciated	during	the	first	fifteen	years	of	the	carryforward	period	and	debt	repayments	reducing	interest	expense. Accordingly,	the	recoverability	of	the	net	deferred	tax	asset	is	not	dependent	on	material	improvements	to	operations,	material	asset	sales	or	other	non-routine transactions.	Based	on	its	current	outlook	of	future	taxable	income	during	the	carryforward	period,	management	believes	that	the	net	deferred	tax	asset	will	be	realized.

The	realization	of	the	Company's	deferred	tax	assets	will	be	dependent	upon	its	ability	to	generate	approximately	$1.0	billion	in	taxable	income	from	January	1,	2004	to December	31,	2023.	If	the	Company	is	unable	to	generate	sufficient	taxable	income	in	the	future,	or	carry	back	losses	as	described	above,	it	will	be	required	to	reduce	its net	deferred	tax	asset	through	a	charge	to	income	tax	expense,	which	would	result	in	a	corresponding	decrease	in	stockholders'	equity.

Depending	on	the	resolution	of	the	Verestar	bankruptcy	proceedings	described	in	note	2,	the	Company	may	be	entitled	to	a	worthless	stock	or	bad	debt	deduction	for	its investment	in	Verestar.	No	income	tax	benefit	has	been	provided	for	these	potential	deductions	due	to	the	uncertainty	surrounding	the	bankruptcy	proceedings.

# Preferred	Stock

As	of	December	31,	2003	the	Company	was	authorized	to	issue	up	to	20.0	million	shares	of	$.01	par	value	preferred	stock.	As	of	December	31,	2003	and	2002	there were	no	preferred	shares	issued	or	outstanding.

# Common	Stock

As	of	December	31,	2003	the	Company	was	authorized	to	issue	up	to	500.0	million	shares	of	its	$.01	par	value	per	share	Class	A	common	stock,	50.0	million	shares	of its	$.01	par	value	per	share	Class	B	common	stock	and	10.0	million	shares	of	its	$.01	par	value	per	share	Class	C	common	stock.	The	Class	A	and	B	common stockholders	are	entitled	to	one	and	ten	votes	per	share,	respectively.	The	Class	C	common	stock	is	non-voting.	In	addition,	holders	of	Class	B	and	C	common	stock	may exchange	their	shares	on	a	one-to-one	basis	for	shares	of	Class	A	common	stock.	During	the	years	ended	December	31,	2003,	2002	and	2001,	holders	of	Class	B	and Class	C	common	stock	exchanged	1,990,440;	84,699	and	93,236	of	their	shares,	respectively,	for	shares	of	Class	A	common	stock.	(See	note	19.)

# Warrants

In	January	2003,	the	Company	issued	warrants	to	purchase	approximately	11.4	million	shares	of	its	Class	A	common	stock	in	connection	with	the	ATI	12.25%	Notes offering.	These	warrants	will	be	exercisable	on	or	after	January	29,	2006	at	an	exercise	price	of	$0.01	per	share	and	will	expire	on	August	1,	2008.	(See	note	7.)

In	addition,	as	of	December	31,	2003	and	2002,	the	Company	had	warrants	outstanding	to	purchase	approximately	2.7	million	shares	of	its	Class	A	common	stock	at	an exercise	price	of	$22.00	per	share.	These	vested	warrants	expire	through	2005.

# Principal	Equity	Transactions

The	following	is	a	summary	of	the	Company's	principal	equity	transactions	during	the	years	ended	December	31,	2003	and	2001.	There	were	no	equity	offerings	during the	year	ended	December	31,	2002.

In	August	2003,	the	Company	completed	a	public	equity	offering	of	14,260,000	shares	of	its	Class	A	common	stock,	at	$8.89	per	share.	The	net	proceeds	of	the	offering were	approximately	$120.3	million,	after	deducting	the	underwriters'	discount	and	commissions	and	other	expenses	related	to	the	offering.	As	required	by	the	July	2003 credit	facilities	amendment	described	in	note	7,	the	Company	placed	the	net	proceeds	in	a	restricted	account,	from	which	it	may	repurchase	its	outstanding	debt securities.	Prior	to	January	2004,	the	Company's	credit	facilities	required	that	any	amounts	remaining	in	the	restricted	account	from	this	offering	on	August	4,	2004,	be contributed	to	the	borrower	subsidiaries	under	the	credit	facilities.	In	January	2004,	the	Company	amended	the	credit	facilities	to	permit	these	proceeds	to	remain	in	this restricted	account	indefinitely.	(See	note	19.)

In	January	2001,	the	Company	completed	a	public	offering	of	10,000,000	shares	of	its	Class	A	common	stock,	at	$36.50	per	share.	The	Company's	net	proceeds	of	the offering	(after	deduction	of	the	offering	expenses)	were	approximately	$360.8	million.	The	Company	used	the	proceeds	to	finance	acquisitions	and	the	construction	of towers,	as	well	as	for	general	working	capital	purposes.

Stock	Option	Plans—The	Company	maintains	a	stock	option	plan	for	directors,	officers	and	employees	(the	Plan),	which	provides	for	non	qualified	and	incentive	stock options.	Exercise	prices	in	the	case	of	incentive	stock	options	are	not	less	than	the	fair	market	value	of	the	underlying	common	stock	on	the	date	of	grant.	Exercise	prices in	the	case	of	non-qualified	stock	options	are	set	at	the	discretion	of	the	Company's	Board	of	Directors	(which	to	date	has	not	been	less	than	the	fair	market	value	on	the date	of	grant).

As	of	December	31,	2003,	the	option	pool	under	the	Plan	consists	of	31,891,563	shares	of	common	stock.	In	addition	to	the	shares	authorized	under	the	Plan,	options	to purchase	approximately	1,658,000	shares	of	common	stock	were	outstanding	as	of	December	31,	2003	outside	of	the	Plan.

Option	grants	generally	vest	ratably	over	various	periods,	generally	three	to	five	years,	commencing	one	year	from	the	date	of	grant.	Option	grants	generally	expire	ten years	from	the	date	of	grant.

The	following	table	summarizes	the	Company's	option	activity	for	the	periods	presented:

|  | Options | Weighted	Average<br>Exercise	Price | Options<br>Exercisable |
| :--- | :--- | :--- | :--- |
| Outstanding\tas\tof\tJanuary\t1,\t2001 | 21,598,139 | $21.35 | 5,781,018 |
| Granted | 2,482,100 | 14.66 |  |
| Exercised | (217,658) | 14.20 |  |
| Cancelled | (5,914,028) | 29.72 |  |
| Outstanding\tas\tof\tDecember\t31,\t2001 | 17,948,553 | 17.77 | 8,620,691 |
| Granted | 8,835,624 | 3.08 |  |
| Cancelled | (4,669,201) | 18.13 |  |
| Outstanding\tas\tof\tDecember\t31,\t2002 | 22,114,976 | 11.60 | 10,190,819 |
| Granted | 1,724,300 | 10.23 |  |
| Exercised | (1,345,322) | 4.97 |  |
| Cancelled | (4,068,233) | 18.74 |  |
| Outstanding\tas\tof\tDecember\t31,\t2003 | 18,425,721 | $10.24 | 10,934,485 |

The	following	table	sets	forth	information	regarding	options	outstanding	at	December	31,	2003:

| Outstanding<br>Number	of<br>Options | Range	of	Exercise<br>Price	Per	Share | Weighted<br>Average	Exercise<br>Price	Per	Share | Weighted	Average<br>Remaining	Life<br>(Years) | Options<br>Exercisable | Weighted	Average<br>Exercise	Price	Per<br>Share |
| :--- | :--- | :--- | :--- | :--- | :--- |
| 25,000 | $0.75—$0.75 | $0.75 | 8.81 | 6,250 | $0.75 |
| 2,124,554 | 1.07—1.55 | 1.51 | 8.86 | 419,580 | 1.49 |
| 1,917,395 | 1.62—3.04 | 2.86 | 6.07 | 1,082,795 | 2.74 |
| 2,762,304 | 3.08—3.84 | 3.42 | 7.78 | 689,166 | 3.54 |
| 2,368,683 | 3.85—9.09 | 6.69 | 5.86 | 1,445,118 | 7.16 |
| 2,522,052 | 9.25—10.00 | 10.00 | 4.04 | 2,493,152 | 10.00 |
| 2,478,420 | 10.50—13.00 | 11.19 | 8.12 | 1,100,620 | 12.00 |
| 2,472,663 | 13.40—23.75 | 21.48 | 4.86 | 2,378,274 | 21.59 |
| 1,753,450 | 23.81—46.38 | 27.67 | 6.33 | 1,318,810 | 27.45 |
| 1,200 | 48.88—48.88 | 48.88 | 6.16 | 720 | 48.88 |
| 18,425,721 | $0.75—$48.88 | $10.24 | 6.49 | 10,934,485 | $13.00 |

Pro	Forma	Disclosure—The	Company	has	adopted	the	disclosure-only	provisions	of	SFAS	No.	123,	as	amended	by	SFAS	No.	148,	and	has	presented	such	disclosure	in note	1.	The	"fair	value"	of	each	option	grant	is	estimated	on	the	date	of	grant	using	the	Black-Scholes	option	pricing	model.	The	weighted	average	fair	values	of	the Company's	options	granted	during	2003,	2002	and	2001	were	$6.32,	$2.23	and	$9.04	per	share,	respectively.	Key	assumptions	used	to	apply	this	pricing	model	are	as follows:

Voluntary	Option	Exchanges—In	August	2003,	pursuant	to	a	voluntary	option	exchange	program,	the	Company	accepted	for	surrender	and	cancelled	options	(having	an exercise	price	of	$10.25	or	greater)	to	purchase	1,831,981	shares	of	its	Class	A	common	stock.	In	February	2004,	the	Company	issued	1,032,717	options	to	eligible employees	with	an	exercise	price	equal	to	the	fair	market	value	of	the	Class	A	common	stock	on	the	date	of	grant	of	$11.19	per	share.	The	program,	which	was	offered to	both	full	and	part-time	employees,	excluding	the	Company's	executive	officers	and	its	directors,	called	for	the	grant	(at	least	six	months	and	one	day	from	the surrender	date	to	employees	still	employed	on	that	date)	of	new	options	exercisable	for	two	shares	of	Class	A	common	stock	for	every	three	shares	of	Class	A	common stock	issuable	upon	exercise	of	a	surrendered	option.	No	options	were	granted	to	any	employees	who	participated	in	the	exchange	offer	between	the	cancellation	date and	the	new	grant	date.

In	October	2001,	pursuant	to	a	voluntary	option	exchange	program,	the	Company	accepted	for	surrender	and	cancelled	options	to	purchase	3,471,211	shares	of	its	Class A	common	stock.	In	May	2002,	the	Company	issued	2,027,612	options	to	eligible	employees	with	an	exercise	price	equal	to	the	fair	market	value	of	the	Class	A common	stock	on	the	date	of	grant	of	$3.84	per	share.	The	program,	which	was	offered	to	both	full	and	part-time	employees,	excluding	most	of	the	Company's executive	officers,	called	for	the	grant	(at	least	six	months	and	one	day	from	the	surrender	date	to	employees	still	employed	on	that	date)	of	new	options	exercisable	for two	shares	of	Class	A	common	stock	for	every	three	shares	of	Class	A	common	stock	issuable	upon	exercise	of	a	surrendered	option.	No	options	were	granted	to	any employees	who	participated	in	the	exchange	offer	between	the	cancellation	date	and	the	new	grant	date.

ATC	Mexico	Holding	Stock	Option	Plan—During	2001,	ATC	Mexico	Holding's	Board	of	Directors	approved	the	formation	of	the	ATC	Mexico	Holding	Stock	Option Plan	(ATC	Mexico	Plan)	that	provides	for	the	issuance	of	options	to	officers,	employees,	directors	and	consultants	of	ATC	Mexico.	The	ATC	Mexico	Plan	limits	the number	of	shares	of	common	stock	which	may	be	granted	to	an	aggregate	of	360	shares,	subject	to	adjustment	based	on	changes	in	ATC	Mexico's	capital	structure. During	2002,	ATC	Mexico	granted	318	options	to	purchase	shares	of	ATC	Mexico	common	stock	to	officers	and	employees.	Such	options	were	issued	at	one	time	with an	exercise	price	of	$10,000	per	share.	The	exercise	price	per	share	was	at	fair	market	value	based	on	an	independent	appraisal	performed	at	the	Company's	request.	The fair	value	of	ATC	Mexico	Plan	options	granted	during	2002	were	$3,611	per	share	as	determined	by	using	the	Black-Scholes	option	pricing	model.	Options	granted	vest upon	the	earlier	to	occur	of	(a)	the	exercise	by	or	on	behalf	of	J.	Michael	Gearon,	Jr.	of	his	right	to	sell	his	interest	in	ATC	Mexico	Holding	to	the	Company,	(b)	the exercise	by	the	Company	of	its	right	to	acquire	Mr.	Gearon's	interest	in	ATC	Mexico	Holding,	or	(c)	a	change	of	control	of	the	Company	(as	defined	in	the	ATC	Mexico Plan),	and	expire	ten	years	from	the	date	of	grant.	No	options	under	the	ATC	Mexico	Plan	were	granted	in	2003;	exercised	or	cancelled	in	2003	or	2002;	and	no	options were	exercisable	as	of	December	31,	2003	or	2002.	(See	note	19.)

Employee	Stock	Purchase	Plan—The	Company	maintains	an	employee	stock	purchase	plan	for	all	eligible	employees.	Under	the	plan,	shares	of	the	Company's common	stock	may	be	purchased	at	six-month	intervals	at	85%	of	the	lower	of	the	fair	market	value	on	the	first	or	the	last	day	of	each	offering	period.	Employees	may purchase	shares	having	a	value	not	exceeding	15%	of	their	gross	compensation	during	an	offering	period	and	may	not	purchase	more	than	$25,000	worth	of	stock	in	a calendar	year	(based	on	market	values	at	the	beginning	of	each	offering	period).	During	2003,	2002	and	2001,	employees	purchased	200,287,	396,295	and	231,257 shares,	respectively,	at	weighted	average	prices	per	share	of	$4.80,	$3.24	and	$11.90,	respectively.	At	December	31,	2003,	4,138,367	shares	remain	reserved	for	future issuance	under	the	plan.

General—The	acquisitions	consummated	during	2003,	2002	and	2001	have	been	accounted	for	under	the	purchase	method	of	accounting.	The	purchase	prices	have	been allocated	to	the	net	assets	acquired	(principally	tangible	and	intangible	assets)	and	the	liabilities	assumed	based	on	their	estimated	fair	values	at	the	date	of	acquisition,	as further	discussed	below.

During	the	years	ended	December	31,	2003,	2002	and	2001,	the	Company	primarily	acquired	its	tower	assets	from	third	parties	in	one	of	three	types	of	transactions:	the purchase	of	assets,	the	purchase	of	a	business,	or	a	capital	lease.	The	structure	of	each	transaction	affects	the	way	the	Company	allocates	purchase	price	within	the consolidated	financial	statements.	In	the	case	of	an	asset	purchase,	the	Company	first	allocates	purchase	price	to	property	and	equipment	for	the	appraised	value	of	the tower	(replacement	cost)	and	to	identifiable	intangible	assets	(primarily	customer	base).	The	Company	then	records	any	remaining	purchase	price	within	intangible assets	as	a	"network/location	intangible."	In	the	case	of	tower	assets	acquired	through	the	purchase	of	a	business,	the	Company	allocates	purchase	price	similarly,	except that	it	records	the	remaining	purchase	price	after	valuing	all	assets	(including	towers	and	identifiable	intangibles)	and	liabilities	as	goodwill	in	accordance	with	SFAS	No. 141,	"Business	Combinations."	For	tower	assets	acquired	through	capital	lease,	which,	as	of	December	31,	2003,	represented	only	the	ALLTEL	transaction	(as	discussed below),	the	Company	records	the	entire	purchase	price	as	a	capital	lease	and	reflects	that	value	in	property	and	equipment.	Property	and	equipment,	network/location intangibles	and	assets	held	under	capital	lease	related	to	tower	acquisitions	are	all	amortized	over	a	fifteen-year	period.

The	Company's	accompanying	consolidated	financial	statements	reflect	preliminary	allocations	of	purchase	price	for	certain	of	its	acquisitions,	as	appraisals	of	the	net assets	acquired	have	not	been	finalized.	The	Company	does	not	expect	any	changes	in	depreciation	and	amortization	from	the	finalization	of	these	appraisals	to	be material	to	its	consolidated	results	of	operations.

2003	and	2002	Acquisitions—During	the	years	ended	December	31,	2003	and	2002,	the	Company's	acquisitions	were	limited	to	transactions	involving	the	acquisition	of various	communications	sites	for	aggregate	purchase	prices	of	approximately	$95.1	million	and	$55.7	million,	respectively.	The	principal	transaction	(in	both	years)	was as	follows:

NII	transaction—In	December	2002,	the	Company	entered	into	an	agreement	to	acquire	over	500	communications	sites	from	NII	Holdings,	Inc.	(NII),	predominantly	in Mexico,	for	an	aggregate	purchase	price	of	$100.0	million	in	cash.	The	first	of	these	closings	occurred	in	December	2002,	through	which	the	Company	acquired	140 towers	for	approximately	$26.2	million	in	cash.	During	the	year	ended	December	31,	2003,	the	Company	satisfied	its	minimum	commitment	under	its	agreement	with NII,	bringing	the	total	towers	acquired	from	NII	to	665	for	an	aggregate	purchase	price	of	approximately	$112.4	million	in	cash.	Although	the	Company	has	satisfied	its minimum	obligations	under	its	agreement	with	NII,	it	has	the	option	to	continue	to	acquire	additional	tower	assets	from	NII	through	2007.	(See	note	9.)

In	the	fourth	quarter	of	2003,	the	Company	entered	into	an	agreement	to	acquire	up	to	143	communications	sites	in	Mexico	from	Iusacell	Celular	(Iusacell)	for	a	total purchase	price	of	approximately	$31.4	million	in	cash.	The	first	of	the	closings	under	this	agreement	occurred	in	December	2003,	through	which	the	Company	acquired 34	towers	for	approximately	$8.5	million	in	cash.	The	Company	expects	to	close	on	the	remaining	towers	under	this	agreement	in	stages	through	the	third	quarter	of 2004.	(See	note	9.)

2001	Acquisitions—During	the	year	ended	December	31,	2001,	the	Company	consummated	more	than	30	transactions	primarily	involving	the	acquisition	of	various communications	sites	and	related	businesses	for	a	purchase	price	of	approximately	of	$827.2	million.	This	purchase	price	includes	approximately	$809.6	million	in	cash, the	issuance	of	approximately	0.4	million	shares	of	Class	A	common	stock	valued	at	approximately	$8.5	million	and	the	assumption	of	certain	liabilities.	Total	purchase price	allocated	to	goodwill	was	approximately	$30.7	million.	The	principal	transaction	was	as	follows:

ALLTEL	transaction—In	December	2000,	the	Company	entered	into	an	agreement	to	acquire	the	rights	from	ALLTEL	to	up	to	2,193	communications	towers	through	a fifteen-year	sublease	agreement.	Under	the	agreement,	the	Company	subleased	1,776	towers	for	aggregate	cash	consideration	of	$532.8	million.	The	Company	did	not close	on	the	remaining	417	towers	under	the	sublease	agreement.	The	Company	has	the	option	under	the	agreement	to	purchase	the	towers	at	the	end	of	the	fifteen-year term	for	a	purchase	price	per	tower	of	$27,500	plus	interest	accrued	at	3%	per	annum	or	769	shares	of	the	Company's	Class	A	common	stock	(at	ALLTEL's	option). The	Company	has	accounted	for	the	ALLTEL	transaction	as	a	capital	lease.

Unaudited	Pro	Forma	Operating	Results—The	unaudited	pro	forma	results	of	operations	for	the	years	ended	December	31,	2003	and	2002	are	not	presented	due	to	the insignificant	impact	of	the	2003	acquisitions	(described	above)	on	the	Company's	consolidated	results	of	operations.

# 15.				SUPPLEMENTAL	CASH	FLOW	INFORMATION

Supplemental	cash	flow	information	and	non-cash	investing	and	financing	activities	are	as	follows	(in	thousands):

|  | 2003 | 2002 | 2001 |
| :--- | :--- | :--- | :--- |
| Supplemental\tcash\tflow\tinformation: |  |  |  |
| Cash\tpaid\tduring\tthe\tperiod\tfor\tinterest\t(including\tamounts\tcapitalized) | $223,263 | $251,705 | $243,856 |
| Cash\tpaid\tduring\tthe\tperiod\tfor\tincome\ttaxes\t(net\tof\trefunds) | 2,609 | 1,640 | 3,349 |
| Non-cash\tinvesting\tand\tfinancing\tactivities: |  |  |  |
| Issuance\tof\tcommon\tstock,\toptions\tand\twarrants\tand\tassumption\tof\toptions\tfor\tacquisitions |  | 1,208 | 8,458 |
| Conversion\tof\tconvertible\tnotes\t(excluding\tnote\tconversion\texpense) | 86,129 |  | 60,107 |
| Capital\tleases |  | 453 | 47,426 |
| Note\treceivable\tfrom\tsale\tof\t8.7%\tof\tMexican\tsubsidiary |  |  | 6,720 |
| Notes\treceivable\tand\tinvestments |  | 16,581 |  |
| Issuance\tof\tcommon\tstock\tfor\tequity\tinvestment |  |  | 2,464 |
| (Decrease)\tincrease\tin\tfair\tvalue\tof\tcash\tflow\thedges\t(net\tof\ta\ttax\tprovision\tof\t$2,996\tand\t$5,594\tand\ta\ttax |  |  |  |
| benefit\tof\t$8,590,\trespectively) | (5,564) | (10,389) | 15,953 |

# 16.				BUSINESS	SEGMENTS

As	of	December	31,	2003,	the	Company	operates	in	two	business	segments:	rental	and	management	(RM)	and	network	development	services	(Services).	The	RM segment	provides	for	the	leasing	and	subleasing	of	antennae	sites	on	multi-tenant	towers	and	other	properties	for	a	diverse	range	of	customers	primarily	in	the	wireless communication	and	broadcast	industries.	The	Services	segment	offers	a	broad	range	of	services,	including	antenna	and	line	installation,	maintenance,	construction,	site acquisition	and	zoning.

The	accounting	policies	applied	in	compiling	segment	information	below	are	similar	to	those	described	in	note	1.	In	evaluating	financial	performance,	management focuses	on	operating	profit	(loss),	excluding	depreciation	and	amortization;	corporate	general,	administrative	and	development	expense;	and	impairments,	net	loss	on sale	of	long-lived	assets	and	restructuring	expense.	This	measure	of	operating	profit	(loss)	is	also	before	interest	income,	interest	expense,	loss	on	investments	and	other expense,	loss	on	retirement	of	long-term	obligations,	minority	interest	in	net	earnings	of	subsidiaries,	income	taxes,	discontinued	operations	and	cumulative	effect	of change	in	accounting	principle.	For	reporting	purposes,	the	RM	segment	includes	interest	income,	TV	Azteca,	net.

The	Company's	reportable	segments	are	strategic	business	units	that	offer	different	services.	They	are	managed	separately	because	each	segment	requires	different resources,	skill	sets	and	marketing	strategies.	Summarized	financial	information	concerning	the	Company's	reportable	segments	as	of	and	for	the	years	ended	December 31,	2003,	2002	and	2001	is	shown	in	the	following	tables.	The	"Other	expenses"	disclosure	below	represents	amounts	excluded	from	specific	segments,	such	as depreciation	and	amortization;	corporate	general,	administrative	and	development	expense;	impairments,	net	loss	on	sale	of	long-lived	assets	and	restructuring	expense; interest	income;	interest	expense;	loss	on	investments	and	other	expense;	loss	on	retirement	of	long-term	obligations	and	minority	interest	in	net	earnings	of	subsidiaries.

Revenue	and	operating	profit	(loss)	by	operating	segment	is	as	follows:

| Revenues | $619,697 | $544,906 | $431,051 |
| :--- | :--- | :--- | :--- |
| Operating\tprofit | 411,195 | 332,058 | 235,505 |
| Network\tDevelopment\tServices: |  |  |  |
| Revenues | 95,447 | 130,176 | 223,926 |
| Operating\tprofit | 6,504 | 11,585 | 24,358 |
| Other: |  |  |  |
| Other\texpenses | (726,327) | (731,963) | (752,999) |
| Continuing\tOperations: |  |  |  |
| Revenues | $715,144 | $675,082 | $654,977 |
| Loss\tfrom\tcontinuing\toperations\tbefore\tincome\ttaxes | $(308,628) | $(388,320) | $(493,136) |

Additional	information	relating	to	the	Company's	operating	segments	is	as	follows:

|  | 2003 | 2002 | 2001 | 2003 | 2002 | 2001 |
| :--- | :--- | :--- | :--- | :--- | :--- | :--- |
|  |  |  | (In\tthousands) |  |  |  |
| Rental\tand\tManagement | $295,142 | $295,485 | $300,368 | $50,336 | $147,883 | $464,258 |
| Network\tDevelopment\tServices | 5,865 | 8,421 | 26,477 | 741 | 5,025 | 27,599 |
| Other | 12,458 | 8,960 | 8,072 | 4,915 | 7,061 | 34,383 |
| Continuing\tOperations | $313,465 | $312,866 | $334,917 | $55,992 | $159,969 | $526,240 |
| Discontinued\tOperations | Discontinued\tOperations | Discontinued\tOperations | Discontinued\tOperations | $5,616 | $20,528 | $41,918 |

| Rental	and	Management | $4,299,909 | $4,528,411 |
| :--- | :--- | :--- |
| Network\tDevelopment\tServices | 151,154 | 147,045 |
| Other | 881,425 | 986,747 |
| Total | $5,332,488 | $5,662,203 |

The	Other	line	item	above	includes	corporate	assets	such	as	cash	and	cash	equivalents,	restricted	cash	and	investments,	certain	tangible	and	intangible	assets	and	income tax	accounts	which	have	not	been	allocated	to	specific	segments,	as	well	as	assets	held	for	sale.

Summarized	geographical	information	related	to	the	Company's	operating	revenues	and	long-lived	assets	as	of	and	for	the	years	ended	December	31	is	as	follows	(in thousands):

|  | 2003 | 2002 | 2001 |
| :--- | :--- | :--- | :--- |
| Operating\tRevenues: |  |  |  |
| United\tStates | $627,049 | $610,085 | $614,313 |
| International: |  |  |  |
| Mexico | 76,325 | 59,996 | 37,770 |
| Brazil | 11,770 | 5,001 | 2,894 |
| Total\tInternational | 88,095 | 64,997 | 40,664 |
| Total\toperating\trevenues | $715,144 | $675,082 | $654,977 |
| Long-Lived\tAssets: |  |  |  |
| United\tStates | $3,826,723 | $4,134,287 |  |
| International: |  |  |  |
| Mexico | 308,704 | 259,938 |  |
| Brazil | 60,858 | 31,775 |  |
| Total\tInternational | 369,562 | 291,713 |  |
| Total\tlong-lived\tassets | $4,196,285 | $4,426,000 |  |

For	the	years	ended	December	31,	2003	and	2002,	one	customer	within	the	RM	and	Services	segments	accounted	for	approximately	12%	of	the	Company's	consolidated operating	revenues.	No	single	customer	accounted	for	more	than	10%	of	consolidated	operating	revenues	for	the	year	ended	December	31,	2001.

# 17. INFORMATION	PRESENTED	PURSUANT	TO	THE	INDENTURE	FOR	THE	9	3/8%	NOTES	(UNAUDITED)

The	following	table	sets	forth	information	that	is	presented	solely	to	address	certain	reporting	requirements	contained	in	the	indenture	for	our	9	3/8%	Notes.	This information	presents	certain	financial	data	of	the	Company	on	a	consolidated	basis	and	on	a	restricted	group	basis,	as	defined	in	the	indenture	governing	the	senior	notes. All	of	the	Company's	subsidiaries	are	part	of	the	restricted	group,	except	its	wholly	owned	subsidiary	Verestar.	In	December	2002,	the	Company	committed	to	a	plan	to dispose	of	Verestar	by	sale	within	the	next	twelve	months.	In	December	2003,	Verestar	filed	for	protection	under	the	federal	bankruptcy	laws	and	ceased	to	be	included in	of	the	accompanying	consolidated	financial	statements	from	the	filing	date	forward.	Accordingly,	the	results	of	operations	related	to	Verestar	have	been	included	in loss	from	discontinued	operations	in	the	Company's	accompanying	consolidated	statements	of	operations	data	through	the	date	of	the	bankruptcy	filing	in	December 2003.

# 18.				SELECTED	QUARTERLY	FINANCIAL	DATA	(UNAUDITED)

The	information	presented	below	reflects	certain	businesses	as	discontinued	operations	described	in	note	2.	As	a	result,	the	quarterly	data	presented	herein	does	not	agree to	previously	issued	quarterly	statements.	Selected	quarterly	financial	data	for	the	years	ended	December	31,	2003	and	2002	is	as	follows:

|  | March	31,	(1) | June	30, | September	30,	(2) | December	31, | December	31, |
| :--- | :--- | :--- | :--- | :--- | :--- |
|  |  |  | (In\tthousands,\texcept\tper\tshare\tdata) |  |  |
| 2003: |  |  |  |  |  |
| Operating\trevenues | $161,467 | $175,282 | $186,874 | $191,521 | $715,144 |
| Operating\tincome\tfrom\tcontinuing\toperations | 2,061 | 4,986 | 12,016 | 12,426 | 31,489 |
| Net\tloss | (91,623) | (107,715) | (52,862) | (51,217) | (303,417) |
| Basic\tand\tdiluted\tloss\tper\tcommon\tshare\tamounts: |  |  |  |  |  |
| Net\tloss | $(0.47) | $(0.53) | $(0.25) | $(0.23) | $(1.46) |
| 2002: |  |  |  |  |  |
| Operating\trevenues | $161,157 | $161,554 | $174,946 | $177,425 | $675,082 |
| Operating\tloss\tfrom\tcontinuing\toperations | (8,300) | (15,752) | (86,632) | (4,078) | (114,762) |
| Loss\tbefore\tcumulative\teffect\tof\ta\tchange\tin\taccounting\tprinciple | (71,771) | (101,168) | (353,877) | (52,444) | (579,261) |
| Net\tloss | (634,389) | (101,168) | (353,877) | (52,444) | (1,141,879) |
| Basic\tand\tdiluted\tloss\tper\tcommon\tshare\tamounts: |  |  |  |  |  |
| Loss\tbefore\tcumulative\teffect\tof\ta\tchange\tin\taccounting |  |  |  |  |  |
| principle | $(0.37) | $(0.52) | $(1.81) | $(0.27) | $(2.96) |
| Net\tloss | $(3.25) | $(0.52) | $(1.81) | $(0.27) | $(5.84) |

(1) Effective	January	1,	2002,	the	Company	recognized	a	$562.6	million	non-cash	charge	(net	of	a	tax	benefit	of	$14.4	million)	as	the	cumulative	effect	of	change	in accounting	principle	related	to	the	write-down	of	goodwill	to	its	fair	value.	In	accordance	with	SFAS	No.	142,	this	charge	is	reflected	in	the	quarter	ended	March 31,	2002.

(2) During	the	quarter	ended	September	30,	2002,	the	Company	recognized	an	$84.6	million	non-cash	charge	related	to	the	write-down	and	sale	of	certain	non-core towers	and	the	write-off	of	construction-in-progress	costs	associated	with	approximately	800	towers	that	it	no	longer	planned	to	build.	The	Company	also recognized	a	$187.8	million	non-cash	charge	related	to	the	write-down	of	certain	long-lived	assets	of	Verestar,	which	is	included	in	loss	from	discontinued operations,	net,	for	the	quarter	ended	September	30,	2002.

# 19.				SUBSEQUENT	EVENTS

Credit	Facilities	Amendment—In	January	2004,	the	Company	amended	its	credit	facilities	primarily	to	facilitate	the	7.50%	senior	notes	offering	described	below.	The amendment	permits	the	Company,	among	other	things,	to	complete	the	offering	provided	that	the	net	proceeds	are	used	to	prepay	obligations	under	its	convertible	notes. The	Company	also	refinanced	its	$267.0	million	term	loan	B	under	its	credit	facilities	with	a	new	term	loan	C	due	December	31,	2007.	The	new	term	loan	C	has substantially	the	same	terms	as	term	loan	B,	except	that	the	interest	rate	spreads	for	the	LIBOR	and	base	rate	loans	were	reduced	from	3.5%	above	LIBOR	to	2.25%	and from	2.5%	above	the	base	rate	to	1.25%,	respectively.	The	amendment	also	removed	the	requirement	that	any	remaining	proceeds	from	the	August	2003	equity	offering held	as	restricted	cash	and	investments	on	August	4,	2004	be	contributed	to	the	borrower	subsidiaries.

7.50%	Senior	Notes	Offering—In	February	2004,	the	Company	sold	$225.0	million	principal	amount	of	7.50%	senior	notes	due	2012	(7.50%	Notes)	through	an institutional	private	placement.	The	net	proceeds	of	the	offering	were	approximately	$221.7	million	(after	deducting	the	initial	purchasers'	discounts	and	commissions and	other	expenses	related	to	the	offering)	and	were	used	to	redeem	all	of	the	Company's	outstanding	6.25%	Notes	and	a	portion	of	the	Company's	outstanding	5.0% Notes.

The	7.50%	Notes	mature	on	May	1,	2012	and	interest	is	payable	semi-annually	in	arrears	on	May	1	and	November	1	each	year	beginning	May	1,	2004.	The	Company may	redeem	the	7.50%	Notes	after	May	1,	2008.	The	initial	redemption	price	on	the	7.50%	Notes	is	103.750%	of	the	principal	amount,	subject	to	a	ratable	decline	after May	1	of	the	following	year	to	100%	of	the	principal	amount	in	2010	and	thereafter.	The	Company	may	also	redeem	up	to	35%	of	the	7.50%	Notes	any	time	prior	to February	1,	2007	(at	a	price	equal	to	107.50%	of	the	principal	amount	of	the	notes	plus	accrued	and	unpaid	interest,	if	any),	with	the	net	cash	proceeds	of	certain	public equity	offerings	within	sixty	days	after	the	closing	of	any	such	offering.	The	7.50%	Notes	rank	equally	with	the	5.0%	convertible	notes	and	its	9	3/8%	Notes	and	are structurally	and	effectively	junior	to	indebtedness	outstanding	under	the	credit	facilities,	the	ATI	12.25%	Notes	and	the	ATI	7.25%	Notes.	The	indenture	for	the	7.50% Notes	contains	certain	covenants	that	restrict	the	Company's	ability	to	incur	more	debt;	guarantee	indebtedness;	issue	preferred	stock;	pay	dividends;	make	certain investments;	merge,	consolidate	or	sell	assets;	enter	into	transactions	with	affiliates;	and	enter	into	sale	leaseback	transactions.

6.25%	Notes	Redemption—In	February	2004,	the	Company	completed	the	redemption	of	all	of	its	outstanding	$212.7	million	principal	amount	of	6.25%	Notes.	The 6.25%	Notes	were	redeemed	pursuant	to	the	terms	of	the	indenture	at	102.083%	of	the	principal	amount	plus	unpaid	and	accrued	interest.	The	total	aggregate	redemption price	was	$221.9	million,	including	$4.8	million	in	accrued	interest.	The	Company	will	record	a	charge	of	$7.1	million	in	the	first	quarter	of	2004	from	the	loss	on redemption	and	write-off	of	deferred	financing	fees.

Other	Debt	Repurchases—From	January	1,	2004	to	March	11,	2004,	the	Company	repurchased	$36.2	million	principal	amount	of	its	5.0%	Notes	for	approximately $36.1	million	in	cash	and	made	a	$21.0	million	voluntary	prepayment	of	term	loan	A	under	its	credit	facilities.

Giving	effect	to	the	issuance	of	the	7.50%	Notes	and	the	use	of	the	net	proceeds	to	redeem	all	of	the	outstanding	6.25%	Notes;	repurchases	of	$36.2	million	principal amount	of	the	5.0%	Notes;	and	a	voluntary	prepayment	of	$21.0	million	of	the	term	A	loan	under	the	credit	facilities;	the	Company's	aggregate	principal	payments	of long-term	debt,	including	capital	leases,	for	the	next	five	years	and	thereafter	are	as	follows	(in	thousands):

ATC	Mexico	Holding—In	January	2004,	Mr.	Gearon	exercised	his	previously	disclosed	right	to	require	the	Company	to	purchase	his	8.7%	interest	in	ATC	Mexico. Giving	effect	to	the	January	2004	exercise	of	options	described	below,	the	Company	owns	an	88%	interest	in	ATC	Mexico,	which	is	the	subsidiary	through	which	the Company	conducts	its	Mexico	operations.	The	purchase	price	for	Mr.	Gearon's	interest	in	ATC	Mexico	is	subject	to	review	by	an	independent	financial	advisor,	and	is payable	in	cash	or	shares	of	the	Company's	Class	A	common	stock,	at	the	Company's	option.	The	Company	intends	to	pay	the	purchase	price	in	shares	of	its	Class	A common	stock,	and	closing	is	expected	to	occur	in	the	second	quarter	of	2004.	In	addition,	the	Company	expects	that	payment	of	a	portion	of	the	purchase	price	will	be contingent	upon	ATC	Mexico	meeting	certain	performance	objectives.

The	remaining	3.3%	interest	in	ATC	Mexico	was	reserved	for	issuance	upon	exercise	of	options	granted	to	certain	employees	under	the	ATC	Mexico	Plan.	These options	became	exercisable	upon	the	exercise	of	Mr.	Gearon's	put	right,	and	were	exercised	in	January	2004.	The	employees	holding	these	shares	also	may	require	the Company	to	purchase	their	interests	in	ATC	Mexico	six	months	following	their	issuance,	which	date	will	occur	in	July	2004.	William	H.	Hess,	an	executive	officer	of the	Company,	owns	a	1.4%	interest	in	ATC	Mexico	as	a	result	of	his	exercise	of	options	granted	to	him	under	the	ATC	Mexico	Plan.

Common	Stock	Conversions—In	February	2004,	Mr.	Dodge	retired	from	our	Board	of	Directors	and	elected	to	effect	the	Dodge	Conversion	Event	as	defined	in	the Company's	charter.	Accordingly,	all	outstanding	shares	of	Class	B	common	stock	were	converted	into	shares	of	Class	A	common	stock	on	a	one-for-one	basis.	Giving effect	to	the	conversion,	as	of	December	31,	2003,	Mr.	Dodge	and	his	affiliates	would	control	less	than	5%	of	the	voting	power	represented	thereby.	In	addition, subsequent	to	December	31,	2003,	all	shares	of	Class	C	common	stock	were	converted	into	shares	of	Class	A	common	stock	on	a	one-for-one	basis.	The	Company's charter	prohibits	the	future	issuance	of	shares	of	Class	B	common	stock,	but	permits	the	future	issuance	of	shares	of	Class	C	common	stock.

Kline	Disposition—On	March	1,	2004,	the	Company	sold	substantially	all	the	net	assets	of	Kline	for	approximately	$4.0	million	in	cash,	subject	to	a	post	closing working	capital	adjustment,	and	up	to	an	additional	$2.0	million	in	cash	payable	in	2006	based	on	the	revenues	generated	by	Kline	in	2005.	The	Company	expects	to	sell the	remaining	assets	of	Kline,	which	primarily	include	an	office	building,	manufacturing	facility	and	related	real	estate,	by	June	30,	2004.

ATC	South	America—As	disclosed	in	the	Company's	Proxy	Statement	for	the	2001	Annual	Meeting	of	Stockholders,	in	2001	the	Company	negotiated	an	arrangement with	Mr.	Gearon	pursuant	to	which	he	would	purchase	an	equity	interest	in	certain	of	the	Company's	international	subsidiaries,	including	ATC	South	American	Holding Corp.	(ATC	South	America),	the	subsidiary	through	which	the	Company	conducts	its	Brazilian	operations.	In	the	first	quarter	of	2004,	the	Company	entered	into	an agreement	to	sell	Mr.	Gearon	a	1.68%	interest	in	ATC	South	America	pursuant	to	this	arrangement	for	approximately	$1.0	million	in	cash.	The	purchase	price represented	the	fair	market	value	of	a	1.68%	interest	in	ATC	South	America	on	the	date	of	the	sale,	as	determined	by	an	independent	appraiser.	Mr.	Gearon	may	require the	Company	to	purchase	his	interest	in	ATC	South	America,	for	its	then	fair	market	value,	at	any	time	after	the	earliest	to	occur	of	December	31,	2004	or	Mr.	Gearon's death	or	disability,	and	the	Company	has	the	right	to	purchase	Mr.	Gearon's	interest	in	ATC	South	America,	for	its	then	fair	market	value,	at	any	time	after	the	earliest	to occur	of	December	31,	2005,	Mr.	Gearon's	death	or	disability,	or	the	occurrence	of	either	a	Gearon	Termination	Event	or	a	Forfeiture	Event	(each	as	defined	in	the stockholder	agreement).

As	part	of	Mr.	Gearon's	investment,	ATC	South	America's	Board	of	Directors	also	approved	the	formation	of	the	ATC	South	America	Stock	Option	Plan	that	provides for	the	issuance	of	options	to	officers,	employees,	directors	and	consultants	of	ATC	South	America,	including	Mr.	Gearon,	to	purchase	up	to	an	aggregate	10.32% interest	in	ATC	South	America.	In	the	first	quarter	of	2004,	ATC	South	America	granted	6,027	options	to	purchase	shares	of	ATC	South	America	common	stock	to officers	and	employees,	including	Messrs.	Gearon	and	Hess,	who	received	options	to	purchase	shares	representing	a	6.72%	and	1.6%	interest,	respectively.	The	exercise price	per	share	is	$1,000,	which	was	the	fair	market	value	per	share	based	on	an	independent	appraisal	performed	at	the	Company's	request.	Options	granted	vest	upon the	earliest	to	occur	of	the	exercise	by	or	on	behalf	of	Mr.	Gearon	of	his	right	to	require	the	Company	to	purchase	his	interest	in	ATC	South	America,	or	the	exercise	by the	Company	of	its	right	to	acquire	Mr.	Gearon's	interest	in	ATC	South	America,	and	expire	ten	years	from	the	date	of	grant.

# 20.				SUBSIDIARY	GUARANTEES

The	Company's	payment	obligations	under	the	ATI	12.25%	Notes	and	the	ATI	7.25%	Notes	(collectively,	the	ATI	Notes)	are	fully	and	unconditionally	guaranteed	on joint	and	several	bases	by	the	Company's	parent	and	substantially	all	of	the	parent's	and	ATI's	wholly	owned	domestic	subsidiaries	(collectively	Restricted	Guarantors). The	ATI	Notes	and	the	subsidiary	guarantees	under	the	notes	are	subordinated	to	all	indebtedness	under	the	Company's	credit	facilities.

The	following	condensed	consolidating	financial	data	illustrates	the	composition	of	the	Company's	parent,	the	issuer	of	the	ATI	Notes	(ATI),	the	combined	guarantor subsidiaries	under	the	ATI	Notes	and	non-guarantor	subsidiaries.	These	statements	have	been	prepared	in	accordance	with	the	rules	and	requirements	of	the	Securities and	Exchange	Commission	and	the	requirements	contained	in	the	ATI	Notes	indenture.	The	Company	believes	that	separate	complete	financial	statements	of	the respective	guarantors	would	not	provide	additional	material	information	which	would	be	useful	in	assessing	the	financial	composition	of	the	guarantors.	No	single guarantor	has	any	significant	legal	restrictions	on	the	ability	of	investors	or	creditors	to	obtain	access	to	its	assets	in	event	of	default	on	the	subsidiary	guarantee	other than	its	subordination	to	the	Company's	credit	facilities	described	above.

Investments	in	subsidiaries	are	accounted	for	by	the	parent	under	the	equity	method	for	purposes	of	the	supplemental	consolidating	presentation.	In	addition,	ATI	and	the guarantor	subsidiaries	account	for	their	subsidiaries	that	are	not	guarantors	under	the	equity	method.	(Earnings)	losses	of	subsidiaries	accounted	for	under	the	equity method	are	therefore	reflected	in	their	parents'	investment	accounts.	The	principal	elimination	entries	eliminate	investments	in	subsidiaries	and	intercompany	balances and	transactions.

# CONDENSED	CONSOLIDATING	BALANCE	SHEET

|  | Parent | ATI | Guarantor<br>Subsidiaries | Non-<br>Guarantor<br>Subsidiaries | Eliminations | Consolidated<br>Totals |
| :--- | :--- | :--- | :--- | :--- | :--- | :--- |
| ASSETS |  |  |  |  |  |  |
| CURRENT\tASSETS: |  |  |  |  |  |  |
| Cash\tand\tcash\tequivalents |  | $75,726 | $836 | $28,903 |  | $105,465 |
| Restricted\tcash\tand\tinvestments | $120,915 | 49,121 |  |  |  | 170,036 |
| Accounts\treceivable,\tnet |  | 49,957 | 317 | 7,461 |  | 57,735 |
| Prepaid\tand\tother\tcurrent\tassets | 3,621 | 42,582 | 3,717 | 4,118 |  | 54,038 |
| Deferred\tincome\ttaxes | 14,122 |  |  |  |  | 14,122 |
| Assets\theld\tfor\tsale |  |  | 10,119 |  |  | 10,119 |
| Total\tcurrent\tassets | 138,658 | 217,386 | 14,989 | 40,482 |  | 411,515 |
| PROPERTY\tAND\tEQUIPMENT,\tNET |  | 2,191,674 | 19,199 | 335,652 |  | 2,546,525 |
| INTANGIBLE\tASSETS,\tNET | 37,679 | 1,520,212 | 9,508 | 82,361 |  | 1,649,760 |
| INVESTMENTS\tIN\tAND\tADVANCES\tTO |  |  |  |  |  |  |
| SUBSIDIARIES | 2,909,875 | 26,822 | 463,723 |  | $(3,400,420) |  |
| OTHER\tLONG-TERM\tASSETS | 465,429 | 158,668 |  | 100,591 |  | 724,688 |
| TOTAL | $3,551,641 | $4,114,762 | $507,419 | $559,086 | $(3,400,420) | $5,332,488 |
| LIABILITIES\tAND\tSTOCKHOLDERS'\tEQUITY |  |  |  |  |  |  |
| CURRENT\tLIABILITIES: |  |  |  |  |  |  |
| Accounts\tpayable\tand\taccrued\texpenses | $61,175 | $91,938 |  | $14,178 |  | $167,291 |
| Current\tportion\tof\tlong-term\tobligations | 44 | 77,166 |  | 412 |  | 77,622 |
| Other\tcurrent\tliabilities |  | 41,449 |  |  |  | 41,449 |
| Liabilities\theld\tfor\tsale |  |  | $8,416 |  |  | 8,416 |
| Total\tcurrent\tliabilities | 61,219 | 210,553 | 8,416 | 14,590 |  | 294,778 |
| LONG-TERM\tOBLIGATIONS | 1,772,155 | 1,476,096 |  | 35,352 |  | 3,283,603 |
| OTHER\tLONG-TERM\tLIABILITIES |  | 23,961 |  |  |  | 23,961 |
| Total\tliabilities | 1,833,374 | 1,710,610 | 8,416 | 49,942 |  | 3,602,342 |
| MINORITY\tINTEREST\tIN\tSUBSIDIARIES |  |  |  | 18,599 |  | 18,599 |
| STOCKHOLDERS'\tEQUITY: |  |  |  |  |  |  |
| Common\tStock | 2,201 |  |  |  |  | 2,201 |
| Additional\tpaid-in\tcapital | 3,910,879 | 3,532,477 | 453,013 | 946,328 | $(4,931,818) | 3,910,879 |
| Accumulated\t(deficit)\tearnings | (2,190,447) | (1,128,325) | 45,990 | (449,063) | 1,531,398 | (2,190,447) |
| Note\treceivable |  |  |  | (6,720) |  | (6,720) |
| Treasury\tstock | (4,366) |  |  |  |  | (4,366) |
| Total\tstockholders'\tequity | 1,718,267 | 2,404,152 | 499,003 | 490,545 | (3,400,420) | 1,711,547 |
| TOTAL | $3,551,641 | $4,114,762 | $507,419 | $559,086 | $(3,400,420) | $5,332,488 |

# CONDENSED	CONSOLIDATING	STATEMENT	OF	OPERATIONS

|  | Parent | ATI | Guarantor<br>Subsidiaries | Non-<br>Guarantor<br>Subsidiaries | Eliminations | Consolidated<br>Totals |
| :--- | :--- | :--- | :--- | :--- | :--- | :--- |
| Operating\trevenues |  | $612,709 | $4,131 | $98,304 |  | $715,144 |
| Operating\texpenses |  | 613,003 | 3,797 | 66,855 |  | 683,655 |
| Operating\t(loss)\tincome\tfrom\tcontinuing\toperations |  | (294) | 334 | 31,449 |  | 31,489 |
| Other\tincome\t(expense): |  |  |  |  |  |  |
| Interest\tincome,\tTV\tAzteca,\tnet\tof\tinterest\texpense |  |  |  | 14,222 |  | 14,222 |
| Interest\tincome | $523 | 4,535 |  | 197 |  | 5,255 |
| Interest\texpense | (145,395) | (132,908) | (5) | (1,567) |  | (279,875) |
| Other\texpense | (44,279) | (30,629) |  | (1,108) |  | (76,016) |
| Minority\tinterest\tin\tearnings\tof\tsubsidiaries |  |  |  | (3,703) |  | (3,703) |
| Equity\tin\t(loss)\tincome\tof\tsubsidiaries,\tnet\tof\tincome\ttaxes |  |  |  |  |  |  |
| recorded\tat\tthe\tsubsidiary\tlevel | (151,856) | (2,008) | 26,842 |  | $127,022 |  |
| (LOSS)\tINCOME\tFROM\tCONTINUING\tOPERATIONS |  |  |  |  |  |  |
| BEFORE\tINCOME\tTAXES | (341,007) | (161,304) | 27,171 | 39,490 | 127,022 | (308,628) |
| INCOME\tTAX\tBENEFIT\t(PROVISION) | 37,590 | 39,729 | (82) | (11,100) |  | 66,137 |
| (LOSS)\tINCOME\tFROM\tCONTINUING\tOPERATIONS | (303,417) | (121,575) | 27,089 | 28,390 | 127,022 | (242,491) |
| LOSS\tFROM\tDISCONTINUED\tOPERATIONS,\tNET\tOF |  |  |  |  |  |  |
| INCOME\tTAX\tBENEFIT |  | (6,774) | (16,134) | (38,018) |  | (60,926) |
| NET\t(LOSS)\tINCOME | $(303,417) | $(128,349) | $10,955 | $(9,628) | $127,022 | $ (303,417) |

# CONDENSED	CONSOLIDATING	STATEMENT	OF	CASH	FLOWS

|  | Parent | ATI | Guarantor<br>Subsidiaries | Non-<br>Guarantor<br>Subsidiaries | Consolidated<br>Totals |
| :--- | :--- | :--- | :--- | :--- | :--- |
| CASH\t(USED\tFOR)\tPROVIDED\tBY\tOPERATING\nACTIVITIES | $(121,884) | $200,737 | $3,731 | $73,802 | $156,386 |
| CASH\tFLOWS\tFROM\tINVESTING\tACTIVITIES: |  |  |  |  |  |
| Payments\tfor\tpurchase\tof\tproperty\tand |  |  |  |  |  |
| equipment\tand\tconstruction\tactivities |  | (40,483) | (428) | (20,697) | (61,608) |
| Payments\tfor\tacquisitions |  | (202) | (129) | (94,746) | (95,077) |
| Proceeds\tfrom\tsale\tof\tbusinesses\tand\tother\tlong\tterm\tassets |  | 90,328 | 1,618 | 18,807 | 110,753 |
| Deposits,\tinvestments\tand\tother\tlong-term\tassets |  | (571) | 50 | (9,557) | (10,078) |
| Cash\tprovided\tby\t(used\tfor)\tinvesting\tactivities |  | 49,072 | 1,111 | (106,193) | (56,010) |
| CASH\tFLOWS\tFROM\tFINANCING\tACTIVITIES: |  |  |  |  |  |
| Proceeds\tfrom\tissuance\tof\tdebt\tsecurities\tand\tnotes\tpayable | 210,000 | 819,884 |  | 2,500 | 1,032,384 |
| Net\tproceeds\tfrom\tequity\toffering,\tstock\toptions\tand |  |  |  |  |  |
| employee\tstock\tpurchase\tplan | 126,847 |  |  |  | 126,847 |
| Repayment\tof\tlong-term\tobligations | (258,096) | (808,085) |  | (5,775) | (1,071,956) |
| Deferred\tfinancing\tcosts,\trestricted\tcash\tand\tother | (128,165) | (81,313) |  |  | (209,478) |
| Investments\tin\tand\tadvances\tfrom\t(to)\tsubsidiaries | 171,298 | (212,169) | (4,762) | 45,633 |  |
| Cash\tprovided\tby\t(used\tfor)\tfinancing\tactivities | 121,884 | (281,683) | (4,762) | 42,358 | (122,203) |
| NET\t(DECREASE)\tINCREASE\tIN\tCASH\tAND\tCASH |  |  |  |  |  |
| EQUIVALENTS |  | (31,874) | 80 | 9,967 | (21,827) |
| CASH\tAND\tCASH\tEQUIVALENTS,\tBEGINNING\tOF\tYEAR |  | 107,600 | 756 | 18,936 | 127,292 |
| CASH\tAND\tCASH\tEQUIVALENTS,\tEND\tOF\tYEAR | $$75,726 | $$75,726 | $836 | $28,903 | $105,465 |

|  | Parent | ATI | Guarantor<br>Subsidiaries | Non-<br>Guarantor<br>Subsidiaries | Eliminations | Consolidated<br>Totals |
| :--- | :--- | :--- | :--- | :--- | :--- | :--- |
| ASSETS |  |  |  |  |  |  |
| CURRENT\tASSETS: |  |  |  |  |  |  |
| Cash\tand\tcash\tequivalents |  | $107,600 | $756 | $18,936 |  | $127,292 |
| Accounts\treceivable,\tnet |  | 56,316 |  | 8,573 |  | 64,889 |
| Prepaid\tand\tother\tcurrent\tassets | $6,026 | 52,938 | 112 | 12,203 |  | 71,279 |
| Deferred\tincome\ttaxes | 13,111 |  |  |  |  | 13,111 |
| Assets\theld\tfor\tsale |  | 49,529 | 44,601 | 220,075 |  | 314,205 |
| Total\tcurrent\tassets | 19,137 | 266,383 | 45,469 | 259,787 |  | 590,776 |
| PROPERTY\tAND\tEQUIPMENT,\tNET |  | 2,397,951 | 21,894 | 275,154 |  | 2,694,999 |
| INTANGIBLE\tASSETS,\tNET | 42,877 | 1,613,673 | 9,518 | 64,933 |  | 1,731,001 |
| INVESTMENTS\tIN\tAND\tADVANCES\tTO |  |  |  |  |  |  |
| SUBSIDIARIES | 3,221,521 | 36,635 | 393,036 |  | $(3,651,192) |  |
| OTHER\tLONG-TERM\tASSETS | 394,251 | 142,255 |  | 108,921 |  | 645,427 |
| TOTAL | $3,677,786 | $4,456,897 | $469,917 | $708,795 | $(3,651,192) | $5,662,203 |
| LIABILITIES\tAND\tSTOCKHOLDERS'\tEQUITY |  |  |  |  |  |  |
| CURRENT\tLIABILITIES: |  |  |  |  |  |  |
| Current\tportion\tof\tlong-term\tobligations | $210,899 | $58,566 |  | $393 |  | $269,858 |
| Accounts\tpayable\tand\taccrued\texpenses | 51,539 | 113,492 | $(794) | 12,754 |  | 176,991 |
| Other\tcurrent\tliabilities |  | 38,523 |  | 210 |  | 38,733 |
| Liabilities\theld\tfor\tsale |  | 3,006 | 18,771 | 178,919 |  | 200,696 |
| Total\tcurrent\tliabilities | 262,438 | 213,587 | 17,977 | 192,276 |  | 686,278 |
| LONG-TERM\tOBLIGATIONS | 1,662,741 | 1,480,297 |  | 35,618 |  | 3,178,656 |
| OTHER\tLONG-TERM\tLIABILITIES |  | 41,379 |  |  |  | 41,379 |
| Total\tliabilities | 1,925,179 | 1,735,263 | 17,977 | 227,894 |  | 3,906,313 |
| MINORITY\tINTEREST\tIN\tSUBSIDIARIES |  | 225 |  | 15,342 |  | 15,567 |
| STOCKHOLDERS'\tEQUITY: |  |  |  |  |  |  |
| Common\tStock | 1,958 |  |  |  |  | 1,958 |
| Additional\tpaid-in\tcapital | 3,642,019 | 3,726,949 | 416,905 | 911,714 | $(5,055,568) | 3,642,019 |
| Accumulated\t(deficit)\tearnings | (1,887,030) | (999,976) | 35,035 | (439,435) | 1,404,376 | (1,887,030) |
| Accumulated\tother\tcomprehensive\tloss |  | (5,564) |  |  |  | (5,564) |
| Note\treceivable |  |  |  | (6,720) |  | (6,720) |
| Treasury\tstock | (4,340) |  |  |  |  | (4,340) |
| Total\tstockholders'\tequity | 1,752,607 | 2,721,409 | 451,940 | 465,559 | (3,651,192) | 1,740,323 |
| TOTAL | $3,677,786 | $4,456,897 | $469,917 | $708,795 | $(3,651,192) | $5,662,203 |

|  | Parent | ATI | Guarantor<br>Subsidiaries | Non-<br>Guarantor<br>Subsidiaries | Eliminations | Consolidated<br>Totals |
| :--- | :--- | :--- | :--- | :--- | :--- | :--- |
| Operating\trevenues |  | $595,153 | $4,565 | $75,364 |  | $675,082 |
| Operating\texpenses |  | 724,353 | 3,035 | 62,456 |  | 789,844 |
| Operating\t(loss)\tincome\tfrom\tcontinuing\toperations |  | (129,200) | 1,530 | 12,908 |  | (114,762) |
| Other\tincome\t(expense): |  |  |  |  |  |  |
| Interest\tincome,\tTV\tAzteca,\tnet\tof\tinterest\texpense |  |  |  | 13,938 |  | 13,938 |
| Interest\tincome |  | 3,362 |  | 134 |  | 3,496 |
| Interest\texpense | $(149,123) | (102,407) |  | (2,916) |  | (254,446) |
| Other\texpense | (18,891) | (10,205) |  | (5,332) |  | (34,428) |
| Minority\tinterest\tin\tlosses\t(earnings)\tof\tsubsidiaries |  | 8 |  | (2,126) |  | (2,118) |
| Equity\tin\t(loss)\tincome\tof\tsubsidiaries, |  |  |  |  |  |  |
| net\tof\tincome\ttaxes\trecorded\tat\tthe\tsubsidiary\tlevel | (1,001,560) | 2,322 | 14,260 |  | $984,978 |  |
| (LOSS)\tINCOME\tFROM\tCONTINUING |  |  |  |  |  |  |
| OPERATIONS\tBEFORE\tINCOME\tTAXES | (1,169,574) | (236,120) | 15,790 | 16,606 | 984,978 | (388,320) |
| INCOME\tTAX\tBENEFIT\t(PROVISION) | 27,695 | 40,679 | (252) | (339) |  | 67,783 |
| (LOSS)\tINCOME\tFROM\tCONTINUING |  |  |  |  |  |  |
| OPERATIONS\tBEFORE\tCUMULATIVE\tEFFECT |  |  |  |  |  |  |
| OF\tCHANGE\tIN\tACCOUNTING\tPRINCIPLE | (1,141,879) | (195,441) | 15,538 | 16,267 | 984,978 | (320,537) |
| (LOSS)\tINCOME\tFROM\tDISCONTINUED |  |  |  |  |  |  |
| OPERATIONS,\tNET\tOF\tINCOME\tTAX\tBENEFIT |  |  |  |  |  |  |
| (PROVISION) |  | (26,778) | 4,506 | (236,452) |  | (258,724) |
| (LOSS)\tINCOME\tBEFORE\tCUMULATIVE\tEFFECT\nOF\tCHANGE\tIN\tACCOUNTING\tPRINCIPLE | (1,141,879) | (222,219) | 20,044 | (220,185) | 984,978 | (579,261) |
| CUMULATIVE\tEFFECT\tOF\tCHANGE\tIN |  |  |  |  |  |  |
| ACCOUNTING\tPRINCIPLE,\tNET\tOF\tINCOME |  |  |  |  |  |  |
| TAX\tBENEFIT |  | (368,431) | (4,884) | (189,303) |  | (562,618) |
| NET\t(LOSS)\tINCOME | $(1,141,879) | $(590,650) | $15,160 | $(409,488) | $984,978 | $(1,141,879) |

|  | Parent | ATI | Guarantor<br>Subsidiaries | Non-<br>Guarantor<br>Subsidiaries | Consolidated<br>Totals |
| :--- | :--- | :--- | :--- | :--- | :--- |
| CASH\t(USED\tFOR)\tPROVIDED\tBY\tOPERATING\tACTIVITIES | $ (134,540) | $188,339 | $7,897 | $43,453 | $105,149 |
| CASH\tFLOWS\tFROM\tINVESTING\tACTIVITIES: |  |  |  |  |  |
| Payments\tfor\tpurchase\tof\tproperty\tand\tequipment\tand\tconstruction\tactivities |  | (135,252) | (1,675) | (43,570) | (180,497) |
| Payments\tfor\tacquisitions,\tnet\tof\tcash\tacquired |  | (17,424) |  | (38,937) | (56,361) |
| Proceeds\tfrom\tsale\tof\tbusinesses\tand\tother\tlong-term\tassets |  | 43,253 |  | 66,100 | 109,353 |
| Deposits,\tinvestments,\tand\tother\tlong-term\tassets | 2,000 | (3,771) | 2 | 14,017 | 12,248 |
| Cash\tprovided\tby\t(used\tfor)\tinvesting\tactivities | 2,000 | (113,194) | (1,673) | (2,390) | (115,257) |
| CASH\tFLOWS\tFROM\tFINANCING\tACTIVITIES: |  |  |  |  |  |
| Borrowings\tunder\tnotes\tpayable\tand\tcredit\tfacilities |  | 160,000 |  |  | 160,000 |
| Repayment\tof\tnotes\tpayable,\tcredit\tfacilities\tand\tcapital\tleases |  | (7,358) |  | (140,912) | (148,270) |
| Net\tproceeds\tfrom\tstock\toptions\tand\temployee\tstock\tpurchase\tplan | 1,305 |  |  |  | 1,305 |
| Deferred\tfinancing\tcosts,\trestricted\tcash\tand\tother | 94,071 | (5,664) |  |  | 88,407 |
| Investments\tin\tand\tadvances\tfrom\t(to)\tsubsidiaries | 37,164 | (140,435) | (8,465) | 111,736 |  |
| Cash\tprovided\tby\t(used\tfor)\tfinancing\tactivities | 132,540 | 6,543 | (8,465) | (29,176) | 101,442 |
| NET\tINCREASE\t(DECREASE)\tIN\tCASH\tAND\tCASH\tEQUIVALENTS |  | 81,688 | (2,241) | 11,887 | 91,334 |
| CASH\tAND\tCASH\tEQUIVALENTS,\tBEGINNING\tOF\tYEAR |  | 25,912 | 2,997 | 7,049 | 35,958 |
| CASH\tAND\tCASH\tEQUIVALENTS,\tEND\tOF\tYEAR | $$107,600 | $$107,600 | $756 | $18,936 | $127,292 |

|  | Parent | ATI | Guarantor<br>Subsidiaries | Non-<br>Guarantor<br>Subsidiaries | Eliminations | Consolidated<br>Totals |
| :--- | :--- | :--- | :--- | :--- | :--- | :--- |
| Operating\trevenues |  | $602,024 | $2,968 | $49,985 |  | $654,977 |
| Operating\texpenses |  | 817,213 | 3,444 | 37,557 |  | 858,214 |
| Operating\t(loss)\tincome\tfrom\tcontinuing\toperations |  | (215,189) | (476) | 12,428 |  | (203,237) |
| Other\tincome\t(expense): |  |  |  |  |  |  |
| Interest\tincome,\tTV\tAzteca,\tnet\tof\tinterest\texpense |  |  |  | 14,377 |  | 14,377 |
| Interest\tincome |  | 28,046 |  | 326 |  | 28,372 |
| Interest\texpense | $(143,160) | (114,911) | (6) | (9,122) |  | (267,199) |
| Other\texpense | (58,815) | (6,412) |  | 96 |  | (65,131) |
| Minority\tinterest\tin\tlosses\t(earnings)\tof\tsubsidiaries |  | 31 | 46 | (395) |  | (318) |
| Equity\tin\t(loss)\tincome\tof\tsubsidiaries, |  |  |  |  |  |  |
| net\tof\tincome\ttaxes\trecorded\tat\tthe\tsubsidiary\tlevel | (298,869) | 2,204 | 8,827 |  | $287,838 |  |
| (LOSS)\tINCOME\tFROM\tCONTINUING\tOPERATIONS |  |  |  |  |  |  |
| BEFORE\tINCOME\tTAXES | (500,844) | (306,231) | 8,391 | 17,710 | 287,838 | (493,136) |
| INCOME\tTAX\tBENEFIT\t(PROVISION) | 50,750 | 58,724 | 92 | (7,534) |  | 102,032 |
| (LOSS)\tINCOME\tFROM\tCONTINUING |  |  |  |  |  |  |
| OPERATIONS | (450,094) | (247,507) | 8,483 | 10,176 | 287,838 | (391,104) |
| LOSS\tFROM\tDISCONTINUED\tOPERATIONS,\tNET\tOF |  |  |  |  |  |  |
| INCOME |  |  |  |  |  |  |
| TAX\tBENEFIT\t(PROVISION) |  | (12,189) | 3,057 | (49,858) |  | (58,990) |
| NET\t(LOSS)\tINCOME | $(450,094) | $(259,696) | $11,540 | $(39,682) | $287,838 | $ (450,094) |

|  | Parent | ATI | Guarantor<br>Subsidiaries | Non-<br>Guarantor<br>Subsidiaries | Consolidated<br>Totals |
| :--- | :--- | :--- | :--- | :--- | :--- |
| CASH\t(USED\tFOR)\tPROVIDED\tBY\tOPERATING\nACTIVITIES | $(92,343) | $96,194 | $14,378 | $7,841 | $26,070 |
| CASH\tFLOWS\tUSED\tFOR\tINVESTING\tACTIVITIES: |  |  |  |  |  |
| Payments\tfor\tpurchase\tof\tproperty\tand\tequipment\tand |  |  |  |  |  |
| construction\tactivities |  | (450,559) | (3,759) | (113,840) | (568,158) |
| Payments\tfor\tacquisitions,\tnet\tof\tcash\tacquired |  | (723,394) | (24,090) | (65,298) | (812,782) |
| Proceeds\tfrom\tsale\tof\tbusinesses\tand\tother\tlong-term |  |  |  |  |  |
| assets |  | 1,680 |  |  | 1,680 |
| Deposits,\tinvestments,\tand\tother\tlong-term\tassets | (20,130) | (18,788) | (151) | (26,974) | (66,043) |
| Cash\tused\tfor\tinvesting\tactivities | (20,130) | (1,191,061) | (28,000) | (206,112) | (1,445,303) |
| CASH\tFLOWS\tPROVIDED\tBY\tFINANCING |  |  |  |  |  |
| ACTIVITIES: |  |  |  |  |  |
| Borrowings\tunder\tnotes\tpayable\tand\tcredit\tfacilities |  | 70,000 |  | 111,500 | 181,500 |
| Proceeds\tfrom\tissuance\tof\tdebt\tsecurities | 1,000,000 |  |  |  | 1,000,000 |
| Repayment\tof\tnotes\tpayable,\tcredit\tfacilities\tand |  |  |  |  |  |
| capital\tleases |  | (73,986) |  | (7,147) | (81,133) |
| Net\tproceeds\tfrom\tequity\tofferings,\tstock\toptions, |  |  |  |  |  |
| and\temployee\tstock\tpurchase\tplan | 366,671 |  |  |  | 366,671 |
| Deferred\tfinancing\tcosts,\trestricted\tcash\tand\tother | (84,441) | (9,444) |  |  | (93,885) |
| Investments\tin\tand\tadvances\t(to)\tfrom\tsubsidiaries | (1,169,757) | 1,080,429 | 14,293 | 75,035 |  |
| Cash\tprovided\tby\tfinancing\tactivities | 112,473 | 1,066,999 | 14,293 | 179,388 | 1,373,153 |
| NET\t(DECREASE)\tINCREASE\tIN\tCASH\tAND\tCASH |  |  |  |  |  |
| EQUIVALENTS |  | (27,868) | 671 | (18,883) | (46,080) |
| CASH\tAND\tCASH\tEQUIVALENTS,\tBEGINNING\tOF |  |  |  |  |  |
| YEAR |  | 53,780 | 2,326 | 25,932 | 82,038 |
| CASH\tAND\tCASH\tEQUIVALENTS,\tEND\tOF\tYEAR | $$25,912 | $$25,912 | $2,997 | $7,049 | $35,958 |

# EXHIBIT	INDEX

The	exhibits	below	are	included,	either	by	being	filed	herewith	or	by	incorporation	by	reference,	as	part	of	this	Annual	Report	on	Form	10-K.	Exhibits	are identified	according	to	the	number	assigned	to	them	in	Item	601	of	Regulation	S-K.	Documents	that	are	incorporated	by	reference	are	identified	by	their	Exhibit	number as	set	forth	in	the	filing	from	which	they	are	incorporated	by	reference.	The	filings	of	the	Registrant	from	which	various	exhibits	are	incorporated	by	reference	into	this Annual	Report	are	indicated	by	parenthetical	numbering	which	corresponds	to	the	following	key:

| 3.1<br>3.2 | Restated	Certificate	of	Incorporation,	as	amended,	of	the	Company	as	filed	with	the	Secretary	of	State	of	the<br>State	of	Delaware	on	June	4,	1999<br>By-Laws,	as	amended	November	13,	2003,	of	the	Company | 3(i)	(1)<br>Filed	herewith	as<br>Exhibit	3.2 |
| :--- | :--- | :--- |
| 4.2 | Indenture,\tdated\tas\tof\tOctober\t4,\t1999,\tby\tand\tbetween\tthe\tCompany\tand\tThe\tBank\tof\tNew\tYork,\tas |  |
|  | Trustee,\tfor\tthe\t2.25%\tConvertible\tNotes\tdue\t2009,\tincluding\tthe\tform\tof\t2.25%\tConvertible\tNote | 4.2(2) |
| 4.3 | Indenture,\tdated\tas\tof\tFebruary\t15,\t2000,\tby\tand\tbetween\tthe\tCompany\tand\tThe\tBank\tof\tNew\tYork,\tas |  |
|  | Trustee,\tfor\tthe\t5.0%\tConvertible\tNotes\tdue\t2010,\tincluding\tthe\tform\tof\t5.0%\tConvertible\tNote | 4.1(3) |
| 4.4 | Indenture,\tdated\tas\tof\tJanuary\t31,\t2001,\tby\tand\tbetween\tthe\tCompany\tand\tThe\tBank\tof\tNew\tYork,\tas |  |
|  | Trustee,\tfor\tthe\t9\t3/8%\tSenior\tNotes\tdue\t2009,\tincluding\tthe\tform\tof\t9\t3/8%\tSenior\tNote | 4.9(5) |
| 4.5 | Indenture,\tdated\tas\tof\tJanuary\t29,\t2003,\tby\tand\tamong\tATI\t(as\tsuccessor\tby\tmerger\tto\tAmerican\tTower |  |
|  | Note | 4.5(9) |
| 4.6 | Indenture,\tdated\tas\tof\tAugust\t4,\t2003\tby\tand\tbetween\tthe\tCompany\tand\tThe\tBank\tof\tNew\tYork,\tas\tTrustee, |  |
|  | for\tthe\t3.25%\tConvertible\tNotes\tdue\t2010,\tincluding\tthe\tform\tof\t3.25%\tConvertible\tNote | 4.3(11) |

* Management	contracts	and	compensatory	plans	and	arrangements	required	to	be	filed	as	exhibits	to	this	Form	10-K	pursuant	to	Item	15(c).



Question: what is the expected percentage change in aggregate principal payments of long-term debt from 2004 to 2005?
Calculation: principal_payments_2005 = 109435
principal_payments_2004 = 73684
change = principal_payments_2005 - principal_payments_2004
percent_change = change / principal_payments_2004
answer = percent_change * 100
Answer: 48.5%