Table	of	Contents

# UNITED	STATES

# SECURITIES	AND	EXCHANGE	COMMISSION

x Annual	report	pursuant	to	Section	13	or	15(d)	of	the	Securities	Exchange	Act	of	1934.

For	the	fiscal	year	ended	December	31,	2005

¨ 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)

(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

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

Name	of	exchange	on	which	registered

New	York	Stock	Exchange

Indicate	by	check	mark	if	the	registrant	is	a	well	known	seasoned	issuer,	as	defined	in	Rule	405	of	the	Securities	Act:				Yes		x		No		¨

Indicate	by	check	mark	if	the	registrant	is	not	required	to	file	reports	pursuant	to	Section	13	or	Section	15(d)	of	the	Act:				Yes		¨		No		x

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.				¨

Indicate	by	check	mark	whether	the	registrant	is	a	large	accelerated	filer,	an	accelerated	filer,	or	a	non-accelerated	filer.	See	definition	of	"accelerated	filer"	and	"large accelerated	filer"	in	Rule	12b-2	of	the	Exchange	Act.	(Check	One):

Large	accelerated	filer		x

Accelerated	filer		¨

Non-accelerated	filer		¨

Indicate	by	check	mark	whether	the	registrant	is	a	shell	company	(as	defined	in	Rule	12b-2	of	the	Exchange	Act):				Yes		¨		No		x

The	aggregate	market	value	of	the	voting	and	non-voting	common	stock	held	by	non-affiliates	of	the	registrant	as	of	June	30,	2005	was	approximately	$4,801,552,860, 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	2006 Annual	Meeting	of	Stockholders	are	incorporated	by	reference	into	Part	III	of	this	Report.

# FORM	10-K	ANNUAL	REPORT

# FISCAL	YEAR	ENDED	DECEMBER	31,	2005

| Special	Note	Regarding	Forward-Looking	Statements | Special	Note	Regarding	Forward-Looking	Statements | ii |
| :--- | :--- | :--- |
| PART\tI |  |  |
| ITEM\t1. | Business | 1 |
|  | Overview | 1 |
|  | Strategy | 2 |
|  | The\tCompany | 3 |
|  | Products\tand\tServices | 4 |
|  | Recent\tTransactions | 6 |
|  | Regulatory\tMatters | 9 |
|  | Competition\tand\tCustomer\tDemand | 10 |
|  | Employees | 11 |
|  | Available\tInformation | 11 |
| ITEM\t1A. | Risk\tFactors | 12 |
| ITEM\t1B. | Unresolved\tStaff\tComments | 18 |
| ITEM\t2. | Properties | 19 |
| ITEM\t3. | Legal\tProceedings | 20 |
| ITEM\t4. | Submission\tof\tMatters\tto\ta\tVote\tof\tSecurity\tHolders | 20 |
| PART\tII |  |  |
| ITEM\t5. | Market\tfor\tRegistrant's\tCommon\tEquity,\tRelated\tStockholder\tMatters\tand\tIssuer\tPurchases\tof\tEquity\tSecurities | 21 |
|  | Dividends | 21 |
|  | Recent\tSales\tof\tUnregistered\tSecurities | 22 |
|  | Issuer\tPurchases\tof\tEquity\tSecurities | 22 |
| ITEM\t6. | Selected\tFinancial\tData | 23 |
| ITEM\t7. | Management's\tDiscussion\tand\tAnalysis\tof\tFinancial\tCondition\tand\tResults\tof\tOperations | 25 |
|  | Executive\tOverview | 25 |
|  | Results\tof\tOperations:\tYears\tEnded\tDecember\t31,\t2005\tand\t2004 | 27 |
|  | Results\tof\tOperations:\tYears\tEnded\tDecember\t31,\t2004\tand\t2003 | 31 |
|  | Liquidity\tand\tCapital\tResources | 34 |
|  | Critical\tAccounting\tPolicies\tand\tEstimates | 41 |
|  | Recent\tAccounting\tPronouncements | 43 |
|  | Information\tPresented\tPursuant\tto\tthe\tIndentures\tof\tour\t7.50%\tNotes,\t7.125%\tNotes\tand\tATI\t7.25%\tNotes | 44 |
| ITEM\t7A. | Quantitative\tand\tQualitative\tDisclosures\tAbout\tMarket\tRisk | 45 |
| ITEM\t8. | Financial\tStatements\tand\tSupplementary\tData | 46 |
| ITEM\t9. | Changes\tin\tand\tDisagreements\twith\tAccountants\ton\tAccounting\tand\tFinancial\tDisclosure | 46 |

# TABLE	OF	CONTENTS—(Continued)

# 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	such	as	"anticipates,"	"intends,"	"plans,"	"believes," "estimates,"	"expects,"	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	purchases	under	our	stock	repurchase	program,	our future	capital	expenditure	levels,	and	our	plans	to	fund	our	future	liquidity	needs.	These	statements	are	based	on	our	management's	beliefs	and	assumptions,	which	in	turn	are based	on	currently	available	information.	These	assumptions	could	prove	inaccurate.	These	forward-looking	statements	may	be	found	under	the	captions	"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	arise	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	in	Item	1A	of	this	annual	report	under	the	caption "Risk	Factors."	We	have	no	duty	to,	and	do	not	intend	to,	update	or	revise	the	forward-looking	statements	made	by	us	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	by	us	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	over	22,000	owned	communications	sites.	Our	portfolio	includes approximately	20,000	owned	tower	sites	in	the	United	States	and	over	2,500	in	Mexico	and	Brazil.	In	addition	to	our	owned	tower	sites,	we	offer	access	to	over	10,000 rooftop	and	tower	sites	in	the	United	States	that	we	manage	for	third	parties.	We	also	operate	in-building	distributed	antenna	systems	in	malls	and	casino/hotel	resorts.	Our primary	business	is	leasing	antenna	space	on	multi-tenant	communications	sites	to	wireless	service	providers	and	radio	and	television	broadcast	companies.	We	operate	the largest	independent	portfolio	of	wireless	and	broadcast	communications	sites	in	the	United	States,	Mexico	and	Brazil,	based	on	number	of	sites	and	revenue.

Our	communications	site	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	sites.	Our	broad	network	of	communications	sites	enables	us	to	address	the	needs	of	national,	regional,	local	and	emerging	wireless service	providers.	We	also	offer	limited	services	that	directly	support	our	site	leasing	operations	and	the	addition	of	new	tenants	and	equipment	on	our	sites.	We	intend	to capitalize	on	the	continuing	increase	in	the	use	of	wireless	communications	services	by	actively	marketing	space	available	for	leasing	on	our	existing	sites	and	selectively developing	or	acquiring	new	sites	that	meet	our	return	on	investment	criteria.

Our	site	leasing	business,	which	we	also	refer	to	as	our	rental	and	management	segment,	accounted	for	approximately	99.5%	and	99.3%	of	our	segment	operating profit	for	the	years	ended	December	31,	2005	and	2004,	respectively.	In	2006,	we	expect	that	our	rental	and	management	segment	will	continue	to	contribute	approximately 99%	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).

Over	the	last	three	years,	we	have	focused	our	operations	on	our	rental	and	management	segment	by	selling	numerous	non-core	assets	and	businesses	and	using	the proceeds	from	these	sales	to	purchase	high	quality	tower	assets	and	reduce	our	outstanding	indebtedness.	With	the	sale	of	our	tower	construction	services	unit	in	November 2004,	we	substantially	completed	our	strategic	transition	to	a	focused	site	leasing	company.

In	August	2005,	we	expanded	our	communications	site	portfolio	and	our	rental	and	management	operations	through	our	merger	with	SpectraSite,	Inc.,	an	owner	and operator	of	approximately	7,800	wireless	and	broadcast	towers	and	in-building	systems	in	the	United	States.	We	believe	the	merger	provided	us	with	significant	strategic	and financial	advantages.	We	believe	our	larger	scale	will	translate	into	increased	cooperation	with	our	customers,	and	create	greater	flexibility	to	structure	mutually	beneficial contracts,	potentially	resulting	in	further	increases	in	revenue	and	market	share.	We	also	believe	the	merger	will	enable	us	to	maximize	our	return	on	investment	by	creating	a significantly	larger	revenue	base	over	which	to	spread	our	relatively	fixed	overhead	costs,	therefore	further	capitalizing	on	the	significant	operating	leverage	inherent	in	the tower	business	model.	For	more	information	about	our	merger	with	SpectraSite,	Inc.,	see	note	2	to	our	consolidated	financial	statements	included	in	this	annual	report.

We	believe	our	strategy	of	focusing	operations	on	our	rental	and	management	segment	has	made	our	consolidated	operating	cash	flows	more	stable,	will	provide	us with	continuing	growth	and	will	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	an	initial	term	of	five-to-ten	years	with	multiple	five-year renewal	terms	thereafter,	and	lease	payments	typically	increase	3%	to	5%	per	year.

•	 Operating	expenses	are	largely	fixed.	Incremental	operating	costs	associated	with	adding	wireless	tenants	to	a	communications	site	are	minimal.	Therefore,	as additional	tenants	are	added	to	a	site,	the	substantial	majority	of	incremental	revenue	becomes	operating	profit.

•	 Low	maintenance	capital	expenditures.	On	average,	a	communications	site	requires	low	annual	capital	investments	to	maintain.

•	 High	lease	renewal	rates.	Wireless	carriers	tend	to	renew	leases	because	suitable	alternative	sites	may	not	exist	or	be	available	and	repositioning	a	site	in	a carrier's	network	is	expensive	and	may	adversely	affect	network	quality.

# Strategy

Our	strategy	is	to	capitalize	on	the	continuing	growth	in	the	use	of	wireless	communications	services	and	the	infrastructure	requirements	necessary	to	deploy	current and	future	generations	of	wireless	communications	technologies.

•In	the	United	States,	the	number	of	wireless	service	subscribers	increased	from	128.4	million	to	194.5	million	between	December	2001	and	June	2005, representing	an	increase	of	approximately	51%	and	market	penetration	of	approximately	65%.	During	the	same	period,	the	number	of	cell	sites	(i.e.,	the	number of	antennas	and	related	equipment	in	commercial	operation,	not	the	number	of	towers	on	which	that	equipment	is	located)	increased	approximately	40%	from approximately	127,500	cell	sites	to	approximately	178,000.	In	addition,	wireless	minutes	of	use,	an	indicator	of	demand	for	wireless	services,	exceeded	one trillion	in	the	United	States	for	2004,	an	increase	of	over	32%	from	the	prior	year,	and	the	industry	is	on	pace	to	report	strong	growth	for	2005.

•In	Mexico,	the	number	of	wireless	service	subscribers	increased	from	21.8	million	to	44.6	million	between	December	2001	and	September	2005,	representing	an increase	of	approximately	105%	and	market	penetration	of	approximately	42%.	In	Brazil,	the	number	of	wireless	service	subscribers	increased	from	28.7	million to	86.2	million	between	December	2001	and	December	2005,	representing	an	increase	of	approximately	200%	and	market	penetration	of	approximately	47%.

We	believe	the	continuing	growth	in	the	number	of	wireless	service	subscribers	and	the	minutes	of	use	per	subscriber	will	require	wireless	carriers	to	add	new	cell sites,	and	new	equipment	to	existing	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.	As	wireless	carriers	continue	to	add	subscribers	and	seek	to	limit	churn,	we	also	anticipate	they	will	focus	on	network	quality	as	a	competitive	necessity and	will	invest	in	upgrades	to	their	networks.	In	addition,	we	believe	that	as	wireless	data	services,	such	as	email,	internet	access	and	video,	are	deployed	on	a	widespread basis,	the	deployment	of	these	technologies	may	require	wireless	carriers	to	further	increase	the	cell	density	of	their	existing	networks,	may	require	new	technology	and 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	communications	site	infrastructure	needs	as	a	means	of	accelerating	access	to	their	markets	and	preserving	capital,	rather	than	constructing	and	operating	their	own communications	sites	and	maintaining	their	own	communications	sites	service	and	development	capabilities.

We	believe	that	our	existing	portfolio	of	communications	sites,	our	tower-related	services	offerings	and	our	management	team	position	us	to	benefit	from	these	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	Existing	Site	Capacity.	We	believe	that	our	highest	returns	will	be	achieved	by	leasing	additional	space	on	our	existing	communications	sites. We	anticipate	that	our	revenues	and	segment	operating	profit	will	continue	to	grow	because	many	of	our	communications	sites	are	attractively	located	for	wireless service	providers	and	have	capacity	available	for	additional	antenna	space	that	we	can	offer	to	customers	at	low	incremental	costs	to	us.	Because	the	costs	of operating	a	site	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	communications	sites.

•	 Grow	Our	Site	Portfolio	Using	Selective	Criteria	for	Acquisitions	and	New	Development.	Given	the	relatively	fixed	cost	structure	of	our	site	leasing business,	we	believe	that	adding	new	communications	sites	to	our	portfolio	will	allow	us	to	grow	revenues	with	only	modest	increases	in

administrative	operating	expenses.	We	seek	to	acquire,	construct	and	redevelop	towers	and	install	in-building	systems	when	our	initial	and	long-term	return	on investment	criteria	are	met.	We	similarly	evaluate	expansion	opportunities	into	new	markets.	To	achieve	our	expected	returns	for	a	new	site,	we	typically	secure leases	from	customers	in	advance	of	construction	or	installation,	ensure	reasonable	estimated	construction	or	installation	costs	and,	for	new	tower	sites,	obtain	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	customers	in	meeting	their	goals	will	contribute	to	our	success.	We	intend	to	continue	to	focus	on	customer	service by,	for	example,	reducing	cycle	times	for	key	functions,	such	as	lease	processing.	In	addition,	our	merger	with	SpectraSite,	Inc.	provided	us	with	an	opportunity to	adopt	best	practices	from	both	companies	in	an	effort	to	further	improve	the	efficiency	of	our	processes.	We	believe	our	efforts	should	enable	us	to	increase revenue	generation	through	improved	speed,	accuracy	and	quality.	In	addition,	sharing	operational	processes	and	outcomes	establishes	another	connection	point with	our	customers	and	provides	us	valuable	input	and	relationship	enhancing	opportunities.

•	 Build	On	Our	Strong	Customer	Relationships.	Our	understanding	of	the	network	needs	of	our	customers	and	our	ability	to	convey	effectively	how	we	can satisfy	those	needs	are	key	to	our	efforts	to	add	new	antenna	leases,	cross-sell	our	services	and	identify	desirable	new	site	development	projects.	We	are	building on	our	strong	relationships	with	our	major	wireless	carrier	customers	to	gain	more	familiarity	with	their	evolving	network	plans	so	we	can	identify	opportunities where	our	nationwide	portfolio	of	sites	and	experienced	personnel	can	be	used	to	satisfy	their	needs.	We	are	also	working	with	smaller	and	emerging	wireless carriers	and	network	operators	as	they	define	their	coverage	and	network	needs	and	expand	into	new	markets.	We	believe	we	are	well	positioned	to	be	a	preferred partner	to	our	customers	because	of	the	scope	and	location	of	our	portfolio	of	communications	sites,	our	proven	operating	experience	and	our	scale	relative	to	our competitors.

•	 Participate	in	Industry	Consolidation.	We	continue	to	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 communications	technologies.	We	believe	that	our	merger	with	SpectraSite,	Inc.	will	result	in	improvements	in	cost	structure	efficiencies,	with	a	corresponding positive	impact	on	our	operating	results,	and	that	combining	with	one	or	more	other	tower	companies	should	yield	similar	results.	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.

# The	Company

American	Tower	Corporation	was	created	as	a	subsidiary	of	American	Radio	Systems	Corporation	in	1995	to	own,	manage,	develop	and	lease	communications	and broadcast	tower	sites,	and	was	spun	off	into	a	free-standing	public	company	in	1998.	Over	the	last	ten	years,	we	have	grown	our	communications	site	portfolio	through	tower acquisitions,	tower	development	and	construction,	and	through	mergers	with	and	acquisitions	of	other	tower	operators,	increasing	the	size	of	our	communications	site portfolio	to	over	22,000	owned	sites.

American	Tower	Corporation	is	a	holding	company,	and	we	conduct	our	operations	in	the	United	States,	Mexico	and	Brazil	through	operating	subsidiaries.	Our principal	United	States	operating	subsidiaries	are	American	Towers,	Inc.	(ATI)	and	SpectraSite	Communications,	Inc.	(SpectraSite).	Our	principal	international	operating subsidiary	is	American	Tower	International,	Inc.,	which	conducts	operations	in	Mexico	through	its	subsidiary	ATC	Mexico	Holding	Corp.	(ATC	Mexico)	and	in	Brazil through	its	subsidiary	ATC	South	America	Holding	Corp.	(ATC	South	America).

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."

Prior	to	December	2002,	we	also	had	a	satellite	and	fiber	network	access	services	segment,	which	consisted	of	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	Item	1A	of	this	annual	report	under	the	caption	"Risk	Factors—The	bankruptcy	proceeding	of	our	Verestar	subsidiary	exposes	us	to	risks	and uncertainties"	and	notes	3	and	9	to	our	consolidated	financial	statements	included	in	this	annual	report.

# Products	and	Services

# Rental	and	Management

We	conduct	our	site	leasing	business	through	our	rental	and	management	segment.	Our	primary	business	is	leasing	antenna	space	on	multi-tenant	communications	sites to	wireless	service	providers	and	radio	and	television	broadcast	companies.	Our	communications	site	portfolio	includes	approximately	20,000	owned	tower	sites	in	the	United States	and	over	2,500	in	Mexico	and	Brazil.	In	addition	to	our	owned	tower	sites,	we	offer	access	to	over	10,000	rooftop	and	tower	sites	in	the	United	States	that	we	manage for	third	parties.	Through	our	rental	and	management	segment,	we	also	operate	in-building	distributed	antenna	systems	in	malls	and	casino/hotel	resorts.

Wireless	Communications	Towers.	We	own	and	operate	the	largest	independent	portfolio	of	wireless	communications	towers	in	the	United	States,	Mexico	and	Brazil, based	on	number	of	towers	and	revenue.	Our	network	in	the	United	States	includes	approximately	19,300	owned	wireless	communications	towers	and	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.	Our	Mexican network	includes	approximately	1,800	owned	wireless	communications	towers	in	highly	populated	areas,	including	Mexico	City,	Monterrey,	Guadalajara	and	Acapulco.	Our Brazilian	network	consists	of	approximately	500	owned	wireless	communications	towers,	which	are	concentrated	in	southern	Brazil	in	major	metropolitan	areas,	including Sao	Paulo,	Rio	de	Janeiro,	Brasilia	and	Curitiba.	In	addition,	we	market	and	manage	approximately	1,700	wireless	tower	sites	for	third	parties	including	approximately	600 sites	in	the	United	States,	400	in	Mexico	and	700	in	Brazil.	Approximately	400	of	the	1,700	wireless	tower	sites	that	we	manage	for	third	parties	were	revenue-producing	as of	December	31,	2005.

We	lease	antenna	space	on	our	wireless	communications	towers	to	customers	in	a	diverse	range	of	wireless	industries,	including	personal	communications	services, cellular,	enhanced	specialized	mobile	radio,	paging	and	fixed	microwave.	Our	major	domestic	wireless	customers	include	ALLTEL,	Cingular	Wireless,	Sprint	Nextel,	T- Mobile	USA	and	Verizon	Wireless.	Our	major	international	wireless	customers	include	Iusacell	Celular,	Nextel	Mexico,	Telefonica	Moviles	and	Unefon	in	Mexico,	and Nextel	Brazil,	Telecom	Americas	and	Telecom	Italia	Mobile	in	Brazil.	For	the	year	ended	December	31,	2005,	assuming	our	merger	with	SpectraSite,	Inc.	occurred	on January	1,	2005,	we	had	three	customers	that	each	accounted	for	greater	than	10%	of	our	total	revenues.	Cingular	Wireless	accounted	for	approximately	19%	of	our	2005 total	revenues,	Sprint	Nextel	(assuming	the	merger	of	Sprint	PCS	and	Nextel	occurred	on	January	1,	2005)	accounted	for	approximately	17%	(approximately	22%	including Sprint	Nextel	partners	and	affiliates)	and	Verizon	Wireless	accounted	for	approximately	10%.	Approximately	59%	of	our	total	revenues	for	the	year	ended	December	31, 2005	were	derived	from	five	customers.	See	Item	1A	of	this	annual	report	under	the	caption	"Risk	Factors—A	substantial	portion	of	our	revenue	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	antennas	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,	coupled	with	the	specific	band	of	radio	frequency	and	technology	used	by	the	carrier,	determine	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.

Our	leases	with	wireless	communications	providers	in	the	United	States	generally	have	initial	terms	of	five-to-ten	years.	In	Mexico	and	Brazil,	our	typical	tenant	lease has	an	initial	term	of	ten	years.	In	most	cases,	our	tenant	leases	have	multiple	renewal	terms	at	the	option	of	the	tenant.	Wireless	carriers	generally	renew	their	leases	with	us because	suitable	alternative	sites	may	not	exist	or	be	available	and	repositioning	a	site	in	an	existing	carrier's	network	is	expensive	and	often	requires	reconfiguring	several other	sites	in	the	carrier's	network,	which	may	impact	the	quality	of	the	carrier's	coverage	and	may	require	the	carrier	to	obtain	other	governmental	permits.	Most	of	our tenant	leases	have	escalation	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:

•tower	location;

•number	and	weight	of	antennas	on	the	tower	and	the	size	of	the	transmission	lines;

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

•existing	tower	capacity;

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

•type	and	amount	of	frequency	transmitted	by	the	customer.

Broadcast	Communications	Towers.	We	are	one	of	the	largest	independent	owners	and	operators	of	broadcast	towers	in	the	United	States	and	Mexico.	We	own approximately	220	broadcast	towers	in	the	United	States	and	have	exclusive	rights	to	approximately	190	in	Mexico.	Broadcast	towers	generally	are	taller	and	structurally more	complex	than	wireless	communications	towers,	require	unique	engineering	skills	and	are	more	costly	to	build.	We	lease	antenna	space	on	our	broadcast	towers primarily	to	radio	and	television	broadcast	companies.	In	leasing	antenna	space,	we	generally	receive	monthly	fees	from	customers,	with	initial	lease	periods	ranging	from ten-to-twenty	years.

In-Building	Neutral	Host	Distributed	Antenna	Systems.	As	a	result	of	our	merger	with	SpectraSite,	Inc.,	we	are	now	a	leading	provider	in	the	United	States	of	in- building	neutral	host	distributed	antenna	systems.	We	have	approximately	100	in-building	systems	in	operation	in	retail	shopping	malls	and	casino/hotel	resorts,	and	we	have the	exclusive	rights	to	an	additional	200	properties	in	the	United	States.	We	obtain	rights	to	install	and	operate	in-building	systems	by	entering	into	leases	with	property owners,	which	are	generally	for	an	initial	non-cancelable	period	of	ten	years.	Some	of	these	leases	contain	automatic	extension	provisions	and	continue	after	the	initial	period unless	terminated	by	us.	Under	these	leases,	we	are	the	exclusive	operator	of	in-building	neutral	host	distributed	antenna	systems	for	the	term	of	the	lease.	We	are	also responsible	for	marketing	the	property	as	part	of	our	portfolio	of	communications	sites	and	for	installing,	operating	and	maintaining	the	distributed	antenna	system	at	the properties.	We	grant	rights	to	wireless	service	providers	to	attach	their	equipment	to	our	in-building	system	for	a	fee	under	licenses	that	typically	have	an	initial	non- cancelable	term	of	ten	years.	We	typically	share	a	portion	of	the	licensing	fees	with	the	property	owners.

Rooftop	Management.	We	also	provide	rooftop	management	services	to	property	owners	in	the	United	States.	We	market	over	10,000	rooftop	sites	to	our	customers	in the	United	States	that	we	manage	for	third

parties,	including	approximately	1,100	rooftop	sites	that	were	revenue-producing	as	of	December	31,	2005.	Wireless	carriers	use	rooftop	sites	to	install	their	communications equipment,	generally	where	there	are	no	existing	towers	or	where	new	towers	are	difficult	to	build.	We	obtain	rights	to	manage	a	rooftop	by	entering	into	contracts	with property	owners,	which	are	generally	for	an	initial	period	of	three-to-five	years.	These	contracts	typically	contain	automatic	extension	provisions	and	continue	after	the	initial period	unless	terminated	by	either	party.	Under	these	contracts,	we	are	engaged	by	property	owners	as	the	exclusive	manager	for	a	rooftop.	For	these	services,	we	receive	a percentage	of	occupancy	or	license	fees	paid	by	the	wireless	carriers.

# Network	Development	Services

We	offer	tower-related	services	through	our	network	development	services	segment.	We	historically	offered	extensive	tower-related	services	to	support	our	site	leasing business.	As	we	continued	to	focus	our	operations	on	our	rental	and	management	segment,	we	sold	services	businesses	that	did	not	provide	incremental	value	to	our	site leasing	business.	With	the	sale	of	our	tower	construction	services	unit	in	November	2004,	we	substantially	completed	our	strategic	transition	to	a	focused	site	leasing company.	Our	network	development	services	segment	continues	to	provide	site	acquisition,	zoning	and	permitting	services	and	structural	analysis	services	that	support	our site	leasing	operations	and	the	addition	of	new	tenants	and	equipment	on	our	sites.

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

Structural	Analysis.	We	offer	structural	analysis	services	to	wireless	carriers	in	connection	with	the	installation	of	communications	equipment	on	towers.	A	structural analysis	of	a	tower	is	routinely	performed	prior	to	a	decision	by	a	wireless	carrier	to	install	equipment	on	a	tower.	Our	team	of	engineers	can	evaluate	whether	a	tower	can support	the	additional	burden	of	the	new	equipment	or	if	augmentation	is	needed,	which	enables	our	customers	to	better	assess	potential	tower	sites	before	making	an installation	decision.

# Recent	Transactions

# Acquisitions

From	January	1,	2004	through	December	31,	2005,	we	increased	the	size	of	our	communications	site	portfolio	by	over	8,000	towers.	Significant	acquisitions	included the	following:

SpectraSite,	Inc.	In	May	2005,	we	entered	into	an	agreement	and	plan	of	merger	with	SpectraSite,	Inc.,	an	owner	and	operator	of	approximately	7,800	wireless	and broadcast	towers	and	in-building	systems	in	the	United	States.	We	completed	the	merger	in	August	2005.	Under	the	terms	of	the	merger	agreement,	SpectraSite,	Inc.	merged with	and	into	a	wholly	owned	subsidiary	that	we	formed	for	purposes	of	the	merger.	Each	share	of	SpectraSite,	Inc.	common	stock	converted	into	the	right	to	receive	3.575 shares	of	our	Class	A	common	stock.	We	issued	approximately	169.5	million	shares	of	Class	A	common	stock	with	respect	to	shares	of	SpectraSite,	Inc.	common	stock outstanding	as	of	the	closing	of	the	merger	and	reserved	for	issuance	approximately	16.7	million	shares	of	Class	A	common	stock	issuable	pursuant	to	SpectraSite,	Inc. options	and	warrants	assumed	in	the	merger.	For	more	information	about	our	merger	with	SpectraSite,	Inc.,	see	note	2	to	our	consolidated	financial	statements	included	in	this annual	report.

Iusacell	Celular.	In	December	2003,	we	agreed	to	acquire	up	to	143	communications	sites	from	Iusacell	Celular	(Iusacell)	in	Mexico	for	up	to	$31.4	million.	During the	year	ended	December	31,	2005,	we	acquired	six	towers	from	Iusacell	in	Mexico	for	approximately	$1.3	million,	and	as	of	December	31,	2005,	had	acquired	an	aggregate of	137	towers	for	a	total	purchase	price	of	$30.6	million.

NII	Holdings,	Inc.	In	December	2002,	we	agreed	to	acquire	over	500	communications	sites,	predominantly	in	Mexico,	from	NII	Holdings	(NII)	for	an	aggregate purchase	price	of	$100.0	million	in	cash.	Although	we	have	satisfied	our	minimum	purchase	obligation	under	the	agreement,	we	have	continued	to	purchase	additional	towers from	NII.	During	the	year	ended	December	31,	2005,	we	acquired	20	towers	from	NII	in	Mexico	and	Brazil	for	approximately	$2.2	million,	and	as	of	December	31,	2005, had	acquired	an	aggregate	of	728	towers	for	a	total	purchase	price	of	approximately	$122.2	million.	We	have	the	option	to	purchase	additional	tower	sites	from	NII	in	Mexico and	Brazil	through	2007.	We	expect	to	fund	any	additional	acquisitions	using	funds	from	operations.

# Dispositions

From	January	1,	2004	through	December	31,	2005,	we	received	approximately	$38.9	million	of	proceeds	from	selling	non-core	assets	and	businesses.	In	our	rental	and management	segment,	we	sold	59	non-core	tower	assets	for	approximately	$11.6	million	and	sold	five	office	buildings	for	approximately	$7.5	million.	In	our	network development	services	segment,	we	sold	substantially	all	the	net	assets	of	Kline	Iron	&	Steel	Co.,	Inc.	(Kline),	our	steel	fabrication	and	tall	tower	design	business,	for approximately	$4.0	million	in	cash,	subject	to	a	post	closing	working	capital	adjustment,	and	sold	our	tower	construction	services	business	for	total	consideration	of approximately	$9.1	million,	consisting	of	cash	and	the	assumption	of	certain	capital	lease	obligations	by	the	purchaser.

# Financing	Transactions

During	the	year	ended	December	31,	2005,	we	improved	our	financial	flexibility	by	refinancing	our	existing	debt	with	less	restrictive,	lower	cost	capital,	which increased	our	liquidity	and	our	ability	to	return	value	to	our	stockholders.	Significant	transactions	included	those	set	forth	below.	For	more	information	about	our	financing transactions,	see	note	7	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—Liquidity	and	Capital	Resources."

New	Credit	Facilities.	In	October	2005,	we	refinanced	the	two	existing	credit	facilities	of	our	principal	operating	subsidiaries.	We	replaced	the	existing	American Tower	$1.1	billion	senior	secured	credit	facility	with	a	new	$1.3	billion	senior	secured	credit	facility	and	replaced	the	existing	SpectraSite	$900.0	million	senior	secured	credit facility	with	a	new	$1.15	billion	senior	secured	credit	facility.	As	a	result	of	the	refinancing,	we	reduced	the	interest	rate	on	our	credit	facilities	and	increased	our	unused borrowing	capacity	under	our	credit	facilities	to	approximately	$977.2	million.

Repurchases,	Redemptions	and	Conversions	of	Debt	Securities.	During	the	year	ended	December	31,	2005,	consistent	with	our	strategy	of	replacing	our	higher	cost, more	restrictive	debt	with	less	expensive,	less	restrictive	capital,	we	repurchased,	redeemed	and	converted	approximately	$605.7	million	face	amount	of	our	outstanding	debt securities,	including	the	repurchase	of	$270.6	million	face	amount	($177.8	million	accreted	value,	net	of	$10.1	million	fair	value	allocated	to	warrants)	of	the	ATI	12.25% senior	subordinated	discount	notes	due	2008	(ATI	12.25%	Notes),	the	redemption	of	$274.9	million	principal	amount	of	our	9	3/8%	senior	notes	due	2009	(9	3/8%	Notes)	and the	conversion	of	$57.1	million	principal	amount	of	our	3.25%	convertible	notes	due	August	15,	2012	(3.25%	Notes).	In	addition,	in	December	2005,	we	issued	a	notice	for the	redemption	of	the	remaining	outstanding	$227.7	million	face	amount	of	ATI	12.25%	Notes,	which	we	redeemed	on	February	1,	2006.	Upon	completion	of	this redemption,	no	ATI	12.25%	Notes	remained	outstanding.

Stock	Repurchase	Program.	In	November	2005,	we	announced	that	our	Board	of	Directors	had	approved	a	stock	repurchase	program	to	repurchase	up	to	$750.0 million	of	our	Class	A	common	stock	through	December	2006.	To	facilitate	repurchases,	we	entered	into	a	trading	plan	under	Rule	10b5-1	of	the	Securities	Exchange	Act	of 1934,	which	allows	us	to	repurchase	shares	during	periods	when	we	otherwise	might	be	prevented	from	doing	so	under	insider	trading	laws	or	because	of	self-imposed trading	blackout	periods.	As	of	December	31,	2005,	we

had	repurchased	2.8	million	shares	of	Class	A	common	stock	for	an	aggregate	of	$76.6	million.	Between	January	1,	2006	and	March	9,	2006,	we	repurchased	an	additional 3.9	million	shares	of	Class	A	common	stock	for	an	aggregate	of	$117.4	million.

# ATC	International	Transactions

ATC	Mexico	Holding	Corp.	During	2004,	we	repurchased	a	12.0%	interest	in	ATC	Mexico	from	certain	stockholders	of	ATC	Mexico,	including	J.	Michael	Gearon,	Jr. (Mr.	Gearon)	and	William	H.	Hess	(Mr.	Hess),	executive	officers	of	the	Company.	We	now	own	100%	of	ATC	Mexico	as	a	result	of	these	repurchases.

In	April	2004,	we	repurchased	an	8.8%	interest	in	ATC	Mexico	from	Mr.	Gearon.	In	the	first	quarter	of	2004,	Mr.	Gearon	exercised	his	previously	disclosed	right	to require	us	to	purchase	his	interest	in	ATC	Mexico.	In	consideration	for	his	interest	in	ATC	Mexico,	we	issued	to	Mr.	Gearon	2,203,968	shares	of	our	Class	A	common	stock and	paid	$3.7	million	in	cash,	representing	80%	of	the	aggregate	purchase	price	for	Mr.	Gearon's	interest.	The	2,203,968	shares	issued	to	Mr.	Gearon	had	an	aggregate market	value	on	the	date	of	issuance	of	$24.8	million.	Payment	of	the	remaining	20%	of	the	purchase	price	of	$7.3	million,	plus	interest,	was	contingent	upon	ATC	Mexico satisfying	certain	performance	criteria.	In	February	2005,	our	Board	of	Directors	determined	that	the	performance	criteria	had	been	satisfied,	and	we	paid	Mr.	Gearon	$7.7 million	in	cash.	Our	Board	approved	the	determination	of	the	fair	market	value	of	Mr.	Gearon's	interest	with	the	assistance	of	an	independent	financial	advisor.

In	October	2004,	we	repurchased	a	3.2%	interest	in	ATC	Mexico	from	certain	employees,	including	Mr.	Hess.	In	the	first	quarter	of	2004,	these	employees	exercised options	to	purchase	an	aggregate	of	318	shares	of	ATC	Mexico	under	the	ATC	Mexico	Stock	Option	Plan.	In	October	2004,	these	employees	exercised	their	previously disclosed	rights	to	require	us	to	purchase	their	collective	3.2%	interest	in	ATC	Mexico.	In	consideration	for	their	interests	in	ATC	Mexico,	we	issued	to	these	employees (including	Mr.	Hess)	an	aggregate	of	1,155,678	shares	of	our	Class	A	common	stock,	representing	80%	of	the	aggregate	purchase	price	for	their	collective	interests.	The 1,155,678	shares	issued	to	these	employees	had	an	aggregate	market	value	on	the	date	of	issuance	of	$18.5	million.	Payment	of	the	remaining	20%	of	the	purchase	price	of 218,566	shares	of	Class	A	common	stock	was	contingent	upon	ATC	Mexico	satisfying	certain	performance	criteria.	In	February	2005,	our	Board	of	Directors	determined	that the	performance	criteria	had	been	satisfied,	and	we	issued	to	these	employees	(including	Mr.	Hess)	159,836	shares	of	our	Class	A	common	stock,	net	of	58,730	shares	of Class	A	common	stock	retained	by	us	to	satisfy	employee	tax	withholding	obligations.	On	the	date	of	issuance,	the	aggregate	market	value	of	these	218,566	shares	was	$3.9 million.	Our	Board	approved	the	determination	of	the	fair	market	value	of	the	interests	held	by	these	employees	with	the	assistance	of	an	independent	financial	advisor.

ATC	South	America	Holding	Corp.	During	2004	and	2005,	ATC	South	America	issued	shares	of	its	common	stock	to	certain	employees,	including	Messrs.	Gearon and	Hess,	and	in	2005,	we	reacquired	certain	of	these	shares	of	ATC	South	America	from	these	employees.	As	of	December	31,	2005,	we	owned	90.7%	of	ATC	South America.

In	March	2004,	we	consummated	a	previously	disclosed	arrangement	with	Mr.	Gearon	pursuant	to	which	he	purchased	an	approximate	1.6%	equity	interest	in	ATC South	America	for	approximately	$1.2	million	in	cash.	Pursuant	to	the	arrangement,	Mr.	Gearon	could	require	us	to	purchase	his	interest	in	ATC	South	America,	for	its	then fair	market	value,	after	December	31,	2004	or	upon	certain	events	as	set	forth	in	the	stockholder	agreement	with	Mr.	Gearon.	In	October	2005,	Mr.	Gearon	exercised	this	right to	require	us	to	repurchase	his	interest	in	ATC	South	America.	In	February	2006,	our	Board	of	Directors	approved	the	determination	of	the	fair	market	value	of	Mr.	Gearon's interest	in	ATC	South	America	with	the	assistance	of	an	independent	financial	advisor,	and	we	expect	to	pay	Mr.	Gearon	$3.7	million	in	cash	in	consideration	for	his	1.6% interest	in	ATC	South	America.

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,	which provides	for	the	issuance	of	options	to	officers,	employees,

directors	and	consultants	of	ATC	South	America	to	purchase	up	to	an	aggregate	10.3%	interest	in	ATC	South	America.	In	the	first	quarter	of	2004,	ATC	South	America granted	options	to	purchase	6,024	shares	of	ATC	South	America	common	stock	to	officers	and	employees,	including	Messrs.	Gearon	and	Hess,	who	received	options	to purchase	shares	representing	a	6.7%	and	1.6%	interest,	respectively.	The	exercise	price	is	$1,349	per	share,	which	was	determined	to	be	the	fair	market	value	per	share	on	the date	of	issuance	based	on	an	independent	appraisal	performed	at	our	request.	In	October	2005,	in	connection	with	the	exercise	by	Mr.	Gearon	of	his	right	to	require	us	to purchase	his	interest	in	ATC	South	America,	these	options	vested	in	full	and	were	exercised.	Upon	exercise	of	these	options,	the	holders	received	4,428	shares	of	ATC	South America,	net	of	1,596	shares	retained	by	us	to	satisfy	employee	tax	withholding	obligations.	These	holders	may	require	us	to	purchase	their	shares	of	ATC	South	America	at their	then	fair	market	value	six	months	following	their	issuance,	which	date	will	occur	in	April	2006.	We	anticipate	that	our	repurchase	obligation	with	respect	to	these	shares in	April	2006	will	be	approximately	$19	million.

# Regulatory	Matters

Towers	and	Antennas.	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	may	require	pre-approval	by	the	FAA.	Towers	requiring	FAA approval	must	be	registered	with	the	FCC	and	must	be	painted	and	lighted	in	accordance	with	the	FAA's	standards.	The	FAA	review	and	the	FCC	registration	processes	are prerequisites	to	use	of	the	tower	by	FCC	licensees,	as	well	as	our	other	customers.	Tower	owners	are	responsible	for	notifying	the	FAA	of	any	tower	lighting	outages	or malfunctions	and	for	timely	repairing	lighting	outages	or	malfunctions.	Tower	owners	also	must	notify	the	FCC	when	ownership	of	a	tower	changes.	We	generally	indemnify our	customers	against	non-compliance	with	applicable	standards.	Non-compliance	with	applicable	tower-related	requirements	may	lead	to	monetary	penalties.

The	FCC	considers	the	construction	of	a	new	tower	or	the	addition	of	a	new	antenna	to	an	existing	site	(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.	These	regulations	obligate	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	adding	a	new	antenna	to	a	site.	If	a tower	or	new	antenna	may	have	a	significant	impact	on	the	environment,	FCC	approval	of	the	tower	or	antenna	could	be	significantly	delayed.

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	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	the	addition	of a	new	antenna	to	an	existing	tower.	Local	zoning	authorities	and	community	residents	often	are

opposed	to	construction	in	their	communities,	which	can	delay	or	prevent	new	tower	construction,	new	antenna	installation	or	site	upgrade	projects,	thereby	limiting	our ability	to	respond	to	customer	demand.	In	addition,	zoning	regulations	can	increase	costs	associated	with	new	tower	construction	and	the	addition	of	new	antennas	to	a	site. Existing	regulatory	policies	may	adversely	affect	the	associated	timing	or	cost	of	such	projects	and	additional	regulations	may	be	adopted	which	increase	delays	or	result	in additional	costs	to	us.	These	factors	could	adversely	affect	our	construction	activities	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.

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,	comply	with	regulatory	requirements,	and	make	certain	informational	filings	related	to	hazardous substances	used	at	our	sites.	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,	California.

In	November	2005,	we	finalized	a	Facilities	Audit	Agreement	with	the	United	States	Environmental	Protection	Agency	(EPA)	pursuant	to	the	EPA's	voluntary	audit and	disclosure	policy.	Under	the	Facilities	Audit	Agreement,	we	have	agreed	to	audit	by	February	2007	the	tower	sites	in	our	portfolio	as	of	July	2005	(i.e.,	legacy	American Tower	sites,	but	not	SpectraSite	sites)	for	compliance	with	the	notice	and	record-keeping	requirements	under	the	Emergency	Protection	and	Community	Right	to	Know	Act (EPCRA),	the	Clean	Air	Act,	the	Clean	Water	Act	and	the	Resource	Conservation	and	Recovery	Act.	We	will	inform	the	EPA	of	any	violations	of	the	above-referenced statutes	at	a	given	tower	site	and	take	steps	to	cure	the	violations.	The	Facilities	Audit	Agreement	provides	for	stipulated	penalties	for	violations	under	EPCRA	and,	for violations	under	the	remaining	statutes,	we	will	pay	a	penalty	based	on	our	economic	benefit	of	non-compliance.	We	do	not	expect	that	the	aggregate	penalties	payable	under the	Facilities	Audit	Agreement	will	be	material	to	our	financial	condition	or	results	of	operations.

Health	and	Safety.	We	are	subject	to	the	Occupational	Safety	and	Health	Act	and	similar	guidelines	regarding	employee	protection	from	radio	frequency	exposure.	Our field	personnel	are	subject	to	regulation	by	the	Occupational	Safety	and	Health	Administration	(OSHA)	and	equivalent	state	agencies	concerning	health	and	safety	matters.

# Competition	and	Customer	Demand

Our	rental	and	management	segment	competes	with	other	national	and	regional	tower	companies	(such	as	Crown	Castle	International	Corp.,	Global	Signal	Inc.	and SBA	Communications	Corp.),	wireless	carriers	and

broadcasters	that	own	and	operate	their	own	tower	networks	and	lease	tower	space	to	third	parties,	numerous	independent	tower	owners	and	the	owners	of	non- communications	tower	sites,	including	rooftops,	utility	towers,	water	towers	and	other	alternative	structures.	We	believe	that	site	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.

Customer	demand	for	our	rental	and	management	segment	is	also	affected	by	the	emergence	and	growth	of	new	technologies.	Technologies	that	make	it	possible	for wireless	carriers	to	expand	their	use	of	existing	infrastructure	could	reduce	customer	demand	for	our	communications	sites.	The	increased	use	of	spectrally	efficient	air-link technologies,	such	as	lower-rate	vocoders,	which	potentially	can	relieve	some	network	capacity	problems,	could	reduce	the	demand	for	tower-based	antenna	space.

In	addition,	any	increase	in	the	use	of	network	sharing	or	roaming	or	resale	arrangements	by	wireless	service	providers	also	could	adversely	affect	customer	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	October	2004	merger	between	Cingular	Wireless	and	AT&T	Wireless	and	the	August	2005	merger	between	Sprint	PCS and	Nextel,	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	merger	or	the	Sprint	PCS/Nextel	merger	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.

Our	network	development	services	segment	competes	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,	tower	owners/managers,	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.

# Employees

As	of	December	31,	2005,	we	employed	904	full-time	individuals	and	consider	our	employee	relations	to	be	satisfactory.

# Available	Information

Our	Internet	website	address	is	www.americantower.com.	Information	contained	on	our	website	is	not	incorporated	by	reference	into	this	annual	report,	and	you should	not	consider	information	contained	on	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	(SEC).

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	the	audit,	compensation,	and	nominating and	corporate	governance	committees	of	our	Board	of	Directors,	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	the	regulations	of	the	New	York	Stock	Exchange	and	applicable	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:	Investor	Relations;	or	by	calling	us	at	(617)	375-7500.

# ITEM	1A.				RISK FACTORS

# 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	adversely affect	our	operating	results.	Those	factors	include:

•a	decrease	in	consumer	demand	for	wireless	services	due	to	general	economic	conditions	or	other	factors;

•the	financial	condition	of	wireless	service	providers;

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

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

•governmental	licensing	of	spectrum;

•	 mergers	or	consolidations	among	wireless	service	providers;

•increased	use	of	network	sharing,	roaming	or	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	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.

# 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	may	result	in	reduced	capital	expenditures	in	the	aggregate	because	the	existing	networks	of many	wireless	carriers	overlap,	as	do	their	expansion	plans.	For	example,	as	a	result	of	the	recently	completed	mergers	between	Cingular	Wireless	and	AT&T	Wireless	and between	Sprint	PCS	and	Nextel,	both	Cingular	Wireless	and	Sprint	Nextel	are	exploring	ways	of	rationalizing	portions	of	their	combined,	yet	technologically	separate, wireless	networks.	Certain	parts	of	their	merged	networks	may	be	deemed	to	be	duplicative	and	these	customers	may	attempt	to	eliminate	these	duplications.	Our	future results	may	be	negatively	impacted	if	a	significant	number	of	these	contracts	are	eliminated	from	our	ongoing	contractual	revenues.	Similar	consequences	might	occur	if wireless	service	providers	engage	in	extensive	sharing,	roaming	or	resale	arrangements	as	an	alternative	to	leasing	our	antenna	space.

In	January	2003,	the	FCC	eliminated	its	spectrum	cap,	which	prohibited	wireless	carriers	from	owning	more	than	45	MHz	of	spectrum	in	any	given	geographical	area. 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. These	regulatory	changes	may	encourage	consolidation	among	wireless	carriers,	which,	if	it	resulted	in	a	loss	of	one	or	more	of	our	major	customers,	could	materially decrease	our	revenues	and	cash	flows.

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

We	have	a	substantial	amount	of	indebtedness.	As	of	December	31,	2005,	we	had	approximately	$3.6	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	with	respect	to	our indebtedness.	As	of	December	31,	2005,	approximately	41%	of	our	outstanding	indebtedness	bore	interest	at	floating	rates	(approximately	21%,	after	giving	effect	to	the interest	rate	swap	agreements	used	to	manage	exposure	to	variable	rate	interest	obligations	on	our	credit	facilities).	As	a	result,	our	interest	payment	obligations	on	such indebtedness	will	increase	if	interest	rates	increase.	Subject	to	certain	restrictions	under	our	existing	indebtedness,	we	may	also	obtain	additional	long-term	debt	and	working capital	lines	of	credit	to	meet	future	financing	needs.	This	would	have	the	effect	of	increasing	our	total	leverage.

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,	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	debt	securities	contain	restrictive	covenants.	Our	credit	facilities	also	contain	requirements	that	the borrowers	under	each	facility	comply	with	certain	leverage	and	other	financial	tests.	These	covenants	and	requirements	limit	our	ability	to	take	various	actions,	including incurring	additional	debt,	guaranteeing	indebtedness,	engaging	in	various	types	of	transactions,	including	mergers	and	sales	of	assets,	and	paying	dividends	and	making distributions	or	other	restricted	payments.	These	covenants	could	place	us	at	a	disadvantage	compared	to	some	of	our	competitors	which	may	have	fewer	restrictive	covenants and	may	not	be	required	to	operate	under	these	restrictions.	Further,	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.

# 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	few	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.	If	one	or	more	of	our	major	customers	experience	financial	difficulties,	it	could	result	in	uncollectible	accounts receivable	and	our	loss	of	significant	customers	and	anticipated	lease	revenues.

# Our	foreign	operations	are	subject	to	economic,	political	and	other	risks	that	could	adversely	affect	our	revenues	or	financial	position.

Our	business	operations	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.	For	the	year	ended	December	31,	2005,	approximately	13%	of	our	consolidated	revenues	were	generated	by	our	international operations	(assuming	our	merger	with	SpectraSite,	Inc.	occurred	on	January	1,	2005).	We	anticipate	that	our	revenues	from	our	international	operations	may	grow	in	the future.	Accordingly,	our	business	is	subject	to	risks	associated	with	doing	business	internationally,	including:

•changes	in	a	specific	country's	or	region's	political	or	economic	conditions;

•laws	and	regulations	that	restrict	repatriation	of	earnings	or	other	funds;

•difficulty	in	recruiting	trained	personnel;	and

•language	and	cultural	differences.

In	addition,	we	face	risks	associated	with	changes	in	foreign	currency	exchange	rates.	While	most	of	the	contracts	for	our	international	operations	are	denominated	in the	U.S.	dollar,	others	are	denominated	in	the	Mexican	Peso	or	the	Brazilian	Real.	We	have	not	historically	engaged	in	significant	hedging	activities	relating	to	our	non-U.S. dollar	operations,	and	we	may	suffer	future	losses	as	a	result	of	adverse	changes	in	currency	exchange	rates.

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

A	substantial	portion	of	our	total	operating	revenues	is	derived	from	a	small	number	of	customers.	For	the	year	ended	December	31,	2005,	after	giving	effect	to	our merger	with	SpectraSite,	Inc.	(assuming	the	merger	occurred	on	January	1,	2005):

•Five	customers	accounted	for	approximately	59%	of	our	revenues;

•	 Cingular	Wireless	accounted	for	approximately	19%	of	our	revenues;

•Sprint	Nextel	(assuming	the	merger	of	Sprint	PCS	and	Nextel	occurred	on	January	1,	2005)	accounted	for	approximately	17%	of	our	revenues	(approximately 22%	including	Sprint	Nextel	partners	and	affiliates);	and

•	 Verizon	Wireless	accounted	for	approximately	10%	of	our	revenues.

Our	largest	international	customer	is	Iusacell	Celular,	which	accounted	for	approximately	3%	of	our	total	revenues	for	the	year	ended	December	31,	2005	(assuming our	merger	with	SpectraSite,	Inc.	occurred	on	January	1,	2005).	Iusacell	is	an	affiliate	of	TV	Azteca,	which	owns	a	minority	interest	in	Unefon,	which	is	our	second	largest customer	in	Mexico	and	accounted	for	approximately	2%	of	our	total	revenues	for	the	year	ended	December	31,	2005	(assuming	our	merger	with	SpectraSite,	Inc.	occurred on	January	1,	2005).	In	addition,	we	received	$14.2	million	in	interest	income,	net,	from	TV	Azteca	for	the	year	ended	December	31,	2005.

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	these	disputes	in	a	manner	that	did	not	have	a	material	adverse	effect	on	our	company	or our	customer	relationships,	in	the	future	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	business,	results	of	operations	and	financial	condition.

# Status	of	Iusacell	Celular's	financial	restructuring	exposes	us	to	certain	risks	and	uncertainties.

Iusacell	Celular	is	our	largest	customer	in	Mexico	and	accounted	for	approximately	3%	of	our	total	revenues	for	the	year	ended	December	31,	2005	(assuming	our merger	with	SpectraSite,	Inc.	occurred	on	January	1,	2005).	Iusacell	has	been	in	default	under	certain	of	its	debt	obligations	and	involved	in	litigation	with	certain	of	its creditors.	While	Iusacell	reported	in	January	2006	that	it	has	reached	an	agreement	in	principle	with	its	creditors	to	restructure	its	debt	obligations,	if	the	restructuring	is	not completed,	Iusacell	files	for	bankruptcy,	or	the	creditor	litigation	has	an	adverse	impact	on	Iusacell's	overall	liquidity,	it	could	interfere	with	Iusacell's	ability	to	meet	its operating	obligations,	including	rental	payments	under	our	leases	with	them.

We	may	not	realize	the	intended	benefits	of	our	merger	with	SpectraSite,	Inc.	if	we	are	unable	to	integrate	SpectraSite's	operations,	wireless	communications	tower portfolio,	customers	and	personnel	in	a	timely	and	efficient	manner,	which	could	adversely	affect	our	business	and	the	value	of	our	Class	A	common	stock.

Achieving	the	benefits	of	our	merger	with	SpectraSite,	Inc.	depends	in	part	on	the	integration	of	our	operations,	wireless	communications	tower	portfolios	and personnel	with	those	of	SpectraSite	in	a	timely	and	efficient	manner	and	the	ability	of	the	combined	company	to	realize	the	anticipated	synergies	from	this	integration. Integration	may	be	difficult	and	unpredictable	for	many	reasons,	including,	among	others,	the	size	of	SpectraSite's	wireless	communications	tower	portfolio	and	because SpectraSite's	and	our	internal	systems	and	processes	were	developed	without	regard	to	such	integration.	Our	successful	integration	with	SpectraSite	requires	coordination	of different	personnel,	which	may	be	difficult	and	unpredictable	because	of	possible	cultural	conflicts	and	differences	in	policies,	procedures	and	operations	between	the companies	and	the	different	geographical	locations	of	the	companies.	Our	successful	integration	also	requires	attention	to	and	maintenance	of	our	business	relationships	with current	customers,	which	if	compromised,	would	result	in	disruptions	to	our	business.	If	we	cannot	successfully	integrate	SpectraSite's	operations,	wireless	communications tower	portfolio,	customers	and	personnel,	we	may	not	realize	the	expected	benefits	of	the	merger,	which	could	adversely	affect	the	combined	company's	business	and	could adversely	affect	the	value	of	our	Class	A	common	stock.	In	addition,	the	integration	of	our	business	with	SpectraSite	may	place	a	significant	burden	on	management	and	its internal	resources.	The	diversion	of	management's	attention	from	ongoing	business	concerns	and	any	difficulties	encountered	in	the	transition	and	integration	process	could harm	our	business	and	financial	results	of	the	combined	company	and	the	value	of	our	Class	A	common	stock.

# We	expect	to	incur	substantial	expenses	related	to	the	integration	of	SpectraSite.

We	expect	to	incur	substantial	expenses	in	connection	with	the	integration	of	the	business,	policies,	procedures,	operations	and	systems	of	SpectraSite.	While	we	have integrated	many	of	the	companies'	systems	and	administrative	activities	to	date,	we	do	not	expect	to	complete	our	integration	efforts	until	the	second	quarter	of	2006.	If	we fail	to	meet	the	challenges	involved	in	integrating	the	companies'	business	and	operations,	or	we	are	unable	to	do	so	on	a	timely	basis,	it	could	result	in	substantial	additional expenses	and	harm	to	the	combined	company.	These	expenses	could,	particularly	in	the	near	term,	exceed	the	savings	that	we	expect	to	achieve	from	the	elimination	of duplicative	expenses	and	the	realization	of	economies	of	scale	and	cost	savings	related	to	the	integration	of	the	businesses.

# New	technologies	could	make	our	tower	leasing	business	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	tower	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	many	thousands	of	real	estate	sites	underlying	our	towers,	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.	Many	of	these	laws	and	regulations	contain	information	reporting	and	record	keeping	requirements.	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	(including	amounts	we	expect	to	pay	the	EPA	pursuant	to	the	Facilities	Audit	Agreement)	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	FAA,	the	FCC,	the	EPA	and	OSHA.	Both	the	FCC	and	the FAA	regulate	towers	used	for	wireless	communications	and	radio	and	television	antennas	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, modifications,	additions	of	new	antennas	to	a	site,	or	site	upgrades,	thereby	limiting	our	ability	to	respond	to	customer	demands	and	requirements.	Existing	regulatory	policies may	adversely	affect	the	associated	timing	or	cost	of	such	projects	and	additional	regulations	may	be	adopted	which	increase	delays	or	result	in	additional	costs	to	us,	or	that prevent	such	projects	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,	such	as	national	wireless carriers	that	allow	collocation	on	their	towers,	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	find	new	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	and	regional	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).

# If	we	are	unable	to	protect	our	rights	to	the	land	under	our	towers,	it	could	adversely	affect	our	business	and	operating	results.

Our	real	property	interests	relating	to	our	towers	consist	primarily	of	leasehold	and	sub-leasehold	interests,	fee	interests,	easements,	licenses	and	rights-of-way.	A	loss of	these	interests	may	interfere	with	our	ability	to	operate	our	towers	and	generate	revenues.	For	various	reasons,	we	may	not	always	have	the	ability	to	access,	analyze	and verify	all	information	regarding	titles	and	other	issues	prior	to	completing	an	acquisition	of	communications	sites.	Further,	we	may	not	be	able	to	renew	ground	leases	on commercially	viable	terms.	Approximately	85%	of	the	owned	communications	sites	in	our	portfolio	as	of	December	31,	2005	are	located	on	leased	land.	Approximately	85% of	these	sites	are	on	land	where	our	property	interests	in	such	land	have	a	final	expiration	date	of	2015	and	beyond.	Our	inability	to	protect	our	rights	to	the	land	under	our towers	may	have	a	material	adverse	affect	on	us.

# If	we	are	unable	or	choose	not	to	exercise	our	rights	to	purchase	towers	that	are	subject	to	lease	and	sublease	agreements	at	the	end	of	the	applicable	period,	our	cash flows	derived	from	such	towers	would	be	eliminated.

Our	communications	site	portfolio	includes	towers	that	we	operate	pursuant	to	lease	and	sublease	agreements	that	include	a	purchase	option	at	the	end	of	each	lease period.	If	we	are	unable	or	choose	not	to	exercise	our	rights	to	purchase	towers	under	these	agreements	at	the	end	of	the	applicable	period,	our	cash	flows	derived	from	such towers	would	be	eliminated.	For	example,	our	SpectraSite	subsidiary	has	entered	into	lease	or	sublease	agreements	with	affiliates	of	SBC	Communications	(SBC)	with respect	to	approximately	2,500	towers	pursuant	to	which	SpectraSite	has	the	option	to	purchase	the	sites	upon	the	expiration	of	the	lease	or	sublease	beginning	in	2013.	The aggregate	purchase	option	price	for	the	SBC	towers	was	approximately	$282.4	million	as	of	December	31,	2005,	and	will	accrete	at	a	rate	of	10%	per	year	to	the	applicable expiration	of	the	lease	or	sublease	of	a	site.	In	addition,	we	have	entered	into	a	similar	agreement	with	ALLTEL	with	respect	to	approximately	1,776	towers,	for	which	we have	an	option	to	purchase	the	sites	upon	the	expiration	of	the	lease	or	sublease	beginning	in	2016.	The	aggregate	purchase	option	price	for	the	ALLTEL	towers	was approximately	$56.2	million	as	of	December	31,	2005,	and	will	accrete	at	a	rate	of	3%	per	annum.	We	may	not	have	the	required	available	capital	to	exercise	our	right	to purchase	these	or	other	lease	or	subleased	towers	at	the	end	of	the	applicable	period.	Even	if	we	do	have	available	capital,	we	may	choose	not	to	exercise	our	right	to	purchase such	towers	for	business	or	other	reasons.	In	the	event	that	we	do	not	exercise	these	purchase	rights,	or	are	otherwise	unable	to	acquire	an	interest	that	would	allow	us	to continue	to	operate	these	towers	after	the	applicable	period,	we	will	lose	the	cash	flows	derived	from	such	towers,	which	may	have	a	material	adverse	effect	on	our	business. In	the	event	that	we	decide	to	exercise	these	purchase	rights,	the	benefits	of	the	acquisitions	of	such	towers	may	not	exceed	the	associated	acquisition,	compliance	and integration	costs,	and	our	financial	results	could	be	adversely	affected.

# Our	towers	may	be	affected	by	natural	disasters	and	other	unforeseen	damage	for	which	our	insurance	may	not	provide	adequate	coverage.

Our	towers	are	subject	to	risks	associated	with	natural	disasters,	such	as	ice	and	wind	storms,	tornadoes,	floods,	hurricanes	and	earthquakes,	as	well	as	other	unforeseen damage.	Any	damage	or	destruction	to	our	towers

as	a	result	of	these	or	other	risks	would	impact	our	ability	to	provide	services	to	our	customers	and	could	impact	our	results	of	operation	and	financial	condition.	For	example, as	a	result	of	the	severe	hurricane	activity	in	2005,	approximately	25	of	our	broadcast	and	wireless	communications	sites	in	the	southeastern	United	States	and	Mexico suffered	material	damage	and	many	more	suffered	lesser	damage.	While	we	maintain	insurance,	including	business	interruption	insurance,	for	our	towers	against	these	risks, we	may	not	have	adequate	insurance	to	cover	the	associated	costs	of	repair	or	reconstruction.	Further,	such	business	interruption	insurance	may	not	adequately	cover	all	of our	lost	revenues,	including	potential	revenues	from	new	tenants	that	could	have	been	added	to	our	towers	but	for	the	damage.	If	we	are	unable	to	provide	services	to	our customers	as	a	result	of	damages	to	our	towers,	it	could	lead	to	customer	loss,	resulting	in	a	corresponding	adverse	effect	on	our	business,	results	of	operations	and	financial condition.

# 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,	and	numerous	health-related	lawsuits	have	been	filed	against wireless	carriers	and	wireless	device	manufacturers.	If	a	scientific	study	or	court	decision	resulted	in	a	finding	that	radio	frequency	emissions	posed	health	risks	to	consumers, it	could	negatively	impact	the	market	for	wireless	services,	as	well	as	our	wireless	carrier	customers,	which	would	adversely	effect	our	operations,	costs	and	revenues.	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	in	December	2003.	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	to	exceed	$3.2	million).	In	addition,	in	July	2005,	the	Official	Committee	of	Unsecured	Creditors appointed	in	the	bankruptcy	proceeding	(the	Committee)	filed	a	complaint	in	the	U.S.	District	Court	for	the	Southern	District	of	New	York	against	us	and	certain	of	our	and Verestar's	current	and	former	officers,	directors	and	advisors,	and	also	filed	a	complaint	in	the	Bankruptcy	Court	against	us.	(The	case	initially	filed	in	the	District	Court	has since	been	transferred	to	the	Bankruptcy	Court,	and	both	cases	are	now	pending	as	a	single,	consolidated	case	before	the	same	Bankruptcy	judge.)	Pursuant	to	the	complaints, the	Committee	is	seeking	unspecified	compensatory	damages	of	not	less	than	$150.0	million,	punitive	damages	and	various	costs	and	fees.	The	outcome	of	this	complex litigation	cannot	be	predicted	by	us	with	certainty,	is	dependent	upon	many	factors	beyond	our	control,	and	could	take	several	years	to	resolve.	If	any	such	claims	are successful,	however,	they	could	have	a	material	adverse	impact	on	our	financial	position	and	results	of	operations.	For	more	information	regarding	the	Verestar	bankruptcy and	related	litigation,	please	see	Item	3	of	this	annual	report	under	the	caption	"Legal	Proceedings"	and	note	9	to	our	consolidated	financial	statements	included	in	this	annual report.

# ITEM	1B.				UNRESOLVED STAFF	COMMENTS None.

# ITEM	2.				PROPERTIES

Our	principal	offices	are	located	in	Boston,	Southborough	and	Woburn,	Massachusetts;	Atlanta,	Georgia;	Cary,	North	Carolina;	Mexico	City,	Mexico;	and	Sao	Paulo,

Brazil.	Details	of	each	of	these	offices	are	provided	below:

(1) The	facility	in	Woburn	contains	a	total	of	163,000	square	feet	of	space.	Except	for	the	42,300	square	feet	of	space	occupied	by	our	lease	administration	office	and	our broadcast	division,	the	space	in	the	facility	is	leased	to	unaffiliated	tenants.

(2) The	facility	in	Cary	contains	a	total	of	110,000	square	feet	of	space.	Our	operations	in	Cary	currently	occupy	approximately	20,000	square	feet	of	space.	We	have signed	a	letter	of	intent	to	sell	our	facility	in	Cary.	Following	the	sale	of	the	facility,	we	expect	to	lease	approximately	14,000	square	feet	of	space	from	the	new	owner.

In	addition	to	the	principal	offices	set	forth	above,	we	maintain	14	regional	area	offices	in	the	United	States	through	which	we	operate	our	tower	leasing	and	services businesses	on	a	local	basis.	We	believe	that	our	owned	and	leased	facilities	are	suitable	and	adequate	to	meet	our	anticipated	needs.

Our	interests	in	our	communications	sites	are	comprised	of	a	variety	of	ownership	interests,	leases	created	by	long-term	lease	agreements,	easements,	licenses	or	rights- of-way	granted	by	government	entities.	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.	A	typical	tower	site	consists	of	a	compound	enclosing	the	tower	site,	a	tower	structure,	and	an	equipment	shelter that	houses	a	variety	of	transmitting,	receiving	and	switching	equipment.	There	are	three	principal	types	of	towers:	guyed,	self-supporting	lattice,	and	monopole.

•	 A	guyed	tower	includes	a	series	of	cables	attaching	separate	levels	of	the	tower	to	anchor	foundations	in	the	ground.	A	guyed	tower	can	reach	heights	of	up	to 2,000	feet.	A	guyed	tower	site	for	a	typical	broadcast	tower	can	consist	of	a	tract	of	land	of	up	to	20	acres.

•	 A	lattice	tower	is	typically	tapered	from	the	bottom	up	and	usually	has	three	or	four	legs.	A	lattice	tower	can	reach	heights	of	up	to	1,000	feet.	Depending	on	the height	of	the	tower,	a	lattice	tower	site	for	a	wireless	communications	tower	can	consist	of	a	tract	of	land	of	10,000	square	feet	for	a	rural	site	or	less	than	2,500 square	feet	for	a	metropolitan	site.

•	 A	monopole	is	a	tubular	structure	that	is	used	primarily	to	address	space	constraints	or	aesthetic	concerns.	Monopoles	typically	have	heights	ranging	from	50	to 200	feet.	A	monopole	tower	site	of	the

kind	typically	used	in	metropolitan	areas	for	a	wireless	communications	tower	can	consist	of	a	tract	of	land	of	less	than	2,500	square	feet.

Of	the	approximately	22,000	owned	communications	sites	in	our	portfolio	as	of	December	31,	2005,	approximately	85%	are	located	on	leased	land.	Ground	leases	for land	underlying	our	towers	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.	As	a	result,	approximately	85%	of	the	land	leases	for	our	sites	have	a	final	expiration	date	of	2015	and	beyond.

# ITEM	3.				LEGAL PROCEEDINGS

As	previously	reported,	our	Verestar,	Inc.	(Verestar)	subsidiary	filed	for	protection	under	Chapter	11	of	the	federal	bankruptcy	laws	in	December	2003.	In	connection with	the	bankruptcy	filing,	we	asserted	certain	claims	against	Verestar	as	an	unsecured	creditor.	In	June	2004,	the	Bankruptcy	Court	approved	a	stipulation	between	Verestar and	the	Official	Committee	of	Unsecured	Creditors	appointed	in	the	bankruptcy	proceeding	(the	Committee)	that	permits	the	Committee	to	file	claims	on	behalf	of	Verestar against	us,	our	affiliates	and	certain	of	our	and	Verestar's	current	and	former	officers	and	directors.	The	Committee	requested	and	received	authorization	from	the Bankruptcy	Court	to	take	discovery	of	us	and	certain	of	Verestar's	current	and	former	officers	and	directors.	We	produced	various	documents	and	a	limited	number	of depositions	were	conducted	by	the	Committee.	In	July	2005,	the	Committee	filed	a	complaint	in	the	U.S.	District	Court	for	the	Southern	District	of	New	York	against	us	and certain	of	our	and	Verestar's	current	and	former	officers,	directors	and	advisors,	and	also	filed	a	complaint	in	the	Bankruptcy	Court	against	us.	(The	case	initially	filed	in	the District	Court	has	since	been	transferred	to	the	Bankruptcy	Court,	and	both	cases	are	now	pending	as	a	single,	consolidated	case	before	the	same	Bankruptcy	judge.)	We	may be	obligated	or	may	agree	to	indemnify	certain	of	the	defendants	named	in	the	litigation.	The	complaint	originally	filed	in	the	District	Court	asserts	various	causes	of	action against	the	defendants,	including	declaratory	judgment	for	alter	ego,	breach	of	fiduciary	duty,	conversion,	conspiracy,	tortious	interference	with	contract	and	business relations,	deepening	insolvency,	and	avoidance	and	recovery	of	fraudulent	transfers	and	preferential	transfers.	In	connection	with	those	claims,	the	Committee	is	seeking unspecified	compensatory	damages	of	not	less	than	$150.0	million,	punitive	damages	and	various	costs	and	fees.	The	complaint	originally	filed	in	the	Bankruptcy	Court includes	an	objection	to	our	claims	against	Verestar	and	seeks	to	recharacterize	and	equitably	subordinate	those	claims.	That	complaint	also	seeks	substantive	consolidation	of our	assets	and	liabilities	with	Verestar's	assets	and	liabilities.	During	2005,	the	Company,	together	with	the	individual	defendants,	filed	motions	to	dismiss	certain	claims asserted	in	the	complaints.	In	February	2006,	the	Bankruptcy	Court	heard	oral	arguments	on	the	motions	to	dismiss,	but	has	not	yet	decided	any	of	the	motions.	The	outcome of	this	complex	litigation	cannot	be	predicted	by	us	with	certainty,	is	dependent	upon	many	factors	beyond	our	control,	and	could	take	several	years	to	resolve.	In	the	opinion of	management,	the	resolution	of	the	claims	made	against	us	by	the	Committee	will	not	likely	have	a	material	adverse	effect	on	our	consolidated	financial	position,	results	of operations	or	liquidity.

As	previously	disclosed,	in	June	2005,	the	Antitrust	Division	of	the	Department	of	Justice	issued	Civil	Investigative	Demands	relating	to	our	merger	with	SpectraSite, Inc.,	seeking	information	and	documents	from	both	us	and	SpectraSite.	The	Antitrust	Division	has	the	authority	to	require	divestitures	of	assets	by	us	and	to	seek	to	impose restrictions	on	our	conduct	of	business	following	the	merger	to	address	alleged	competitive	concerns.	We	and	SpectraSite	cooperated	with	the	Antitrust	Division	to	provide the	requested	information	and	documents,	and	on	October	24,	2005,	the	Antitrust	Division	notified	us	that	it	had	closed	its	investigation	of	the	merger.

The	Company	periodically	becomes	involved	in	various	claims	and	lawsuits	that	are	incidental	to	its	business.	In	the	opinion	of	Company	management,	after consultation	with	counsel,	other	than	the	litigation	related	to	the	Verestar	bankruptcy	discussed	above,	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,	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,	RELATED	STOCKHOLDER	MATTERS	AND	ISSUER	PURCHASES	OF	EQUITY SECURITIES

The	following	table	presents	reported	quarterly	high	and	low	per	share	sale	prices	of	our	Class	A	common	stock	on	the	New	York	Stock	Exchange	(NYSE)	for	the years	2005	and	2004.

| 2005 | High | Low |
| :--- | :--- | :--- |
| Quarter\tended\tMarch\t31 | $19.28 | $17.30 |
| Quarter\tended\tJune\t30 | \t 21.16 | 16.28 |
| Quarter\tended\tSeptember\t30 | \t 25.20 | 20.70 |
| Quarter\tended\tDecember\t31 | \t 28.33 | 22.73 |

| 2004 | High | Low |
| :--- | :--- | :--- |
| Quarter\tended\tMarch\t31 | $13.12 | $9.89 |
| Quarter\tended\tJune\t30 | \t 16.00 | 11.13 |
| Quarter\tended\tSeptember\t30 | \t 15.85 | 13.10 |
| Quarter\tended\tDecember\t31 | \t 18.75 | 15.19 |

On	March	9,	2006,	the	closing	price	of	our	Class	A	common	stock	was	$29.83	per	share	as	reported	on	the	NYSE.	As	of	March	9,	2006,	we	had	419,677,495 outstanding	shares	of	Class	A	common	stock	and	687	registered	holders.

In	February	2004,	all	outstanding	shares	of	our	Class	B	common	stock	were	converted	into	shares	of	our	Class	A	common	stock	on	a	one-for-one	basis	pursuant	to	the occurrence	of	the	"Dodge	Conversion	Event"	as	defined	in	our	charter.	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.	In	August	2005,	we	amended	and	restated	our	charter	to,	among	other	things,	eliminate	our	Class	B	common	stock	and	Class C	common	stock.

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	may	retain	future	earnings,	if	any,	to	fund	the	development	and	growth	of	our business.	The	indentures	governing	our	7.50%	senior	notes	due	2012	(7.50%	Notes)	and	our	7.125%	senior	notes	due	2012	(7.125%	Notes)	may	prohibit	us	from	paying dividends	to	our	stockholders	unless	we	satisfy	certain	financial	covenants.

Our	credit	facilities	and	the	indentures	governing	the	terms	of	our	debt	securities	contain	covenants	that	may	restrict	the	ability	of	our	subsidiaries	from	making	to	us any	direct	or	indirect	distribution,	dividend	or	other	payment	on	account	of	their	limited	liability	company	interests,	partnership	interests,	capital	stock	or	other	equity interests.	Under	our	credit	facilities,	the	borrower	subsidiaries	may	pay	cash	dividends	or	make	other	distributions	to	us	in	accordance	with	the	applicable	credit	facility	only if	no	default	exists	or	would	be	created	thereby.	The	indenture	governing	the	terms	of	the	ATI	7.25%	senior	subordinated	notes	due	2011	(ATI	7.25%	Notes)	prohibit	ATI	and certain	of	our	other	subsidiaries	that	have	guaranteed	those	notes	(sister	guarantors)	from	paying	dividends	and	making	other	payments	or	distributions	to	us	unless	certain financial	covenants	are	satisfied.	The	indentures	governing	the	terms	of	our	7.50%	Notes	and	7.125%	Notes	also	contain	certain	restrictive	covenants,	which	prohibit	the restricted	subsidiaries	under	these	indentures	from	paying	dividends	and	making	other	payments	or	distributions	to	us	unless	certain	financial	covenants	are	satisfied.	For more	information	about	the	restrictions	under	our	credit	facilities	and	our	notes	indentures,	see	note	7	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—Liquidity	and	Capital	Resources—Factors	Affecting	Sources	of	Liquidity."

# Recent	Sales	of	Unregistered	Securities

During	the	year	ended	December	31,	2005,	we	issued	an	aggregate	of	4,670,335	shares	of	our	Class	A	common	stock	upon	conversion	of	$57.1	million	principal amount	of	our	3.25%	Notes.	Pursuant	to	the	terms	of	the	indenture,	the	holders	of	the	3.25%	Notes	received	81.808	shares	of	Class	A	common	stock	for	every	$1,000 principal	amount	of	notes	converted.	The	shares	were	issued	to	the	noteholders	in	reliance	on	the	exemption	from	registration	set	forth	in	Section	3(a)(9)	of	the	Securities	Act of	1933,	as	amended.	No	underwriters	were	engaged	in	connection	with	such	issuances.	In	connection	with	the	conversion,	we	paid	such	holders	an	aggregate	of	$4.9	million, calculated	based	on	the	accrued	and	unpaid	interest	on	the	notes	and	the	discounted	value	of	the	future	interest	payments	on	the	notes.	Subsequent	to	December	31,	2005,	we issued	shares	of	Class	A	common	stock	upon	conversions	of	additional	3.25%	Notes,	as	set	forth	in	Item	9B	of	this	annual	report	under	the	caption	"Other	Information."

During	the	year	ended	December	31,	2005,	we	issued	an	aggregate	of	398,412	shares	of	our	Class	A	common	stock	upon	exercises	of	55,729	warrants	assumed	in	our merger	with	SpectraSite,	Inc.	In	August	2005,	in	connection	with	our	merger	with	SpectraSite,	Inc.,	we	assumed	approximately	1.0	million	warrants	to	purchase	shares	of SpectraSite,	Inc.	common	stock.	Upon	completion	of	the	merger,	each	warrant	to	purchase	shares	of	SpectraSite,	Inc.	common	stock	automatically	converted	into	a	warrant	to purchase	7.15	shares	of	Class	A	common	stock	at	an	exercise	price	of	$32	per	warrant.	Net	proceeds	from	these	warrant	exercises	were	approximately	$1.8	million.	The shares	of	Class	A	common	stock	issued	to	the	warrantholders	upon	exercise	of	the	warrants	were	issued	in	reliance	on	the	exemption	from	registration	set	forth	in	Section	3(a) (9)	of	the	Securities	Act	of	1933,	as	amended.	No	underwriters	were	engaged	in	connection	with	such	issuances.	Subsequent	to	December	31,	2005,	we	issued	shares	of Class	A	common	stock	upon	exercises	of	additional	warrants,	as	set	forth	in	Item	9B	of	this	annual	report	under	the	caption	"Other	Information."

# Issuer	Purchases	of	Equity	Securities

In	November	2005,	we	announced	that	our	Board	of	Directors	had	approved	a	stock	repurchase	program	pursuant	to	which	we	intend	to	repurchase	up	to	$750.0 million	of	our	Class	A	common	stock	through	December	2006.	During	the	fourth	quarter	of	2005,	we	repurchased	2,836,519	shares	of	our	Class	A	common	stock	for	an aggregate	of	$76.6	million	pursuant	to	our	stock	repurchase	program,	as	follows:

| Period | Total	Number<br>of	Shares<br>Purchased(1) | Average<br>Price	Paid<br>per	Share | Total	Number	of	Shares<br>Purchased	as	Part	of	Publicly<br>Announced	Plans	or	Programs(1) | Approximate	Dollar	Value	of	Shares<br>that	May	Yet	be	Purchased	Under<br>the	Plans	or	Programs |
| :--- | :--- | :--- | :--- | :--- |
|  |  |  |  | (In\tmillions) |
| 11/17/05\t–\t11/30/05 | 874,306 | $26.25 | 874,306 | $727.0 |
| 12/1/05\t–\t12/31/05 | 1,962,213 | $27.29 | 1,962,213 | $673.4 |
| Total\tFourth\tQuarter | 2,836,519 | $26.97 | 2,836,519 | $673.4 |

(1) All	issuer	repurchases	were	made	pursuant	to	the	stock	repurchase	program	publicly	announced	in	November	2005.	Pursuant	to	the	program,	we	intend	to	repurchase up	to	$750.0	million	of	our	Class	A	common	stock	during	the	period	November	2005	through	December	2006.	Under	the	program,	our	management	is	authorized	to purchase	shares	from	time	to	time	in	open	market	purchases	or	privately	negotiated	transactions	at	prevailing	prices	as	permitted	by	securities	laws	and	other	legal requirements,	and	subject	to	market	conditions	and	other	factors.	To	facilitate	repurchases,	we	entered	into	a	trading	plan	under	Rule	10b5-1	of	the	Securities	Exchange Act	of	1934,	which	allows	us	to	repurchase	shares	during	periods	when	we	otherwise	might	be	prevented	from	doing	so	under	insider	trading	laws	or	because	of	self- imposed	trading	blackout	periods.	The	program	may	be	discontinued	at	any	time.

Since	December	31,	2005,	we	have	continued	to	repurchase	shares	of	our	Class	A	common	stock	pursuant	to	our	stock	repurchase	program.	Between	January	1,	2006 and	March	9,	2006,	we	repurchased	3.9	million	shares	of	Class	A	common	stock	for	an	aggregate	of	$117.4	million	pursuant	to	the	stock	repurchase	program.

# ITEM	6. SELECTED	FINANCIAL	DATA

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.

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	3	to	our	consolidated	financial	statements	included	in	this	annual	report).

Year-to-year	comparisons	are	significantly	affected	by	our	acquisitions,	dispositions	and,	to	a	lesser	extent,	construction	of	towers.	Our	merger	with	SpectraSite,	Inc., which	closed	in	August	2005,	significantly	impacts	the	comparability	of	reported	results	between	periods.	Our	principal	acquisitions	and	dispositions	are	described	in "Business—Recent	Transactions"	and	in	the	notes	to	our	consolidated	financial	statements	included	in	this	annual	report.

| Rental	and	management | $929,762 | $684,422 | $619,697 | $544,906 | $431,051 |
| :--- | :--- | :--- | :--- | :--- | :--- |
| Network\tdevelopment\tservices | 15,024 | 22,238 | 12,796 | 32,888 | 85,063 |
| Total\toperating\trevenues | 944,786 | 706,660 | 632,493 | 577,794 | 516,114 |
| Operating\texpenses: |  |  |  |  |  |
| Rental\tand\tmanagement | 306,148 | 237,312 | 236,680 | 242,801 | 221,759 |
| Network\tdevelopment\tservices | 11,981 | 18,801 | 9,493 | 29,214 | 69,371 |
| Depreciation,\tamortization\tand\taccretion(1) | 411,254 | 329,449 | 330,414 | 327,665 | 354,298 |
| Corporate\tgeneral,\tadministrative\tand\tdevelopment\texpense | 37,977 | 27,468 | 26,867 | 30,229 | 34,310 |
| Impairments,\tnet\tloss\ton\tsale\tof\tlong-lived\tassets,\trestructuring\tand\tmerger\trelated |  |  |  |  |  |
| expense | 34,232 | 23,876 | 31,656 | 101,372 | 79,496 |
| Total\toperating\texpenses | 801,592 | 636,906 | 635,110 | 731,281 | 759,234 |
| Operating\tincome\t(loss)\tfrom\tcontinuing\toperations | 143,194 | 69,754 | (2,617) | (153,487) | (243,120) |
| Interest\tincome,\tTV\tAzteca,\tnet | 14,232 | 14,316 | 14,222 | 13,938 | 14,377 |
| Interest\tincome | 4,402 | 4,844 | 5,255 | 3,496 | 28,372 |
| Interest\texpense | (222,419) | (262,237) | (279,783) | (254,345) | (266,769) |
| Loss\ton\tretirement\tof\tlong-term\tobligations | (67,110) | (138,016) | (46,197) | (8,869) | (26,336) |
| Other\tincome\t(expense) | 227 | (2,798) | (8,598) | (7,004) | (27,838) |
| Loss\tfrom\tcontinuing\toperations\tbefore\tincome\ttaxes,\tminority\tinterest\tand\tloss\ton |  |  |  |  |  |
| equity\tmethod\tinvestments | (127,474) | (314,137) | (317,718) | (406,271) | (521,314) |
| Income\ttax\t(provision)\tbenefit | (4,003) | 80,176 | 77,796 | 81,141 | 115,841 |
| Minority\tinterest\tin\tnet\tearnings\tof\tsubsidiaries | (575) | (2,366) | (3,703) | (2,118) | (318) |
| Loss\ton\tequity\tmethod\tinvestments | (2,078) | (2,915) | (21,221) | (18,555) | (10,957) |
| Loss\tfrom\tcontinuing\toperations\tbefore\tcumulative\teffect\tof\tchange\tin\taccounting\nprinciple | $(134,130) | $ (239,242) | $ (264,846) | $ (345,803) | $(416,748) |
| Basic\tand\tdiluted\tloss\tper\tcommon\tshare\tfrom\tcontinuing\toperations\tbefore\ncumulative\teffect\tof\tchange\tin\taccounting\tprinciple | $(0.44) | $(1.07) | $(1.27) | $(1.77) | $(2.18) |
| Weighted\taverage\tcommon\tshares\toutstanding(2) | 302,510 | 224,336 | 208,098 | 195,454 | 191,586 |
| Other\tOperating\tData: |  |  |  |  |  |
| Ratio\tof\tearnings\tto\tfixed\tcharges(3) | .54x | — | — | — | — |

|  | 2005 | 2004 | 2003 | 2002 | 2001 |
| :--- | :--- | :--- | :--- | :--- | :--- |
|  |  |  | (In\tthousands) |  |  |
| Balance\tSheet\tData: |  |  |  |  |  |
| Cash\tand\tcash\tequivalents\t(including\trestricted\tcash\tand\tinvestments)(4) | $112,701 | $215,557 | $275,501 | $127,292 | $130,029 |
| Property\tand\tequipment,\tnet | 3,460,526 | 2,273,356 | 2,483,324 | 2,650,490 | 3,254,905 |
| Total\tassets | 8,768,220 | 5,085,972 | 5,290,654 | 5,628,317 | 6,801,483 |
| Long-term\tobligations,\tincluding\tcurrent\tportion | 3,613,429 | 3,293,614 | 3,359,731 | 3,448,514 | 3,561,960 |
| Total\tstockholders'\tequity | 4,526,580 | 1,470,953 | 1,610,178 | 1,660,858 | 2,811,392 |

(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	year	ended	December	31,	2001,	do	not	include	goodwill amortization.	The	amortization	of	goodwill	for	the	year	ended	December	31,	2001	was	approximately	$67.0	million.

(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	these	computations,	as	their	effect	is	anti-dilutive.

(3) For	the	purpose	of	this	calculation,	"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	expense,	including amounts	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):	2005– $125,384;	2004–$311,831;	2003–$315,903;	2002–$409,814;	2001–$535,048.

(4) As	of	December	31,	2005	and	2004,	no	escrows	are	required	under	the	terms	of	the	credit	facilities.	Includes,	as	of	December	31,	2003,	approximately	$170.0	million of	restricted	funds	that	were	held	in	escrow	to	pay,	repurchase,	redeem	or	retire	certain	of	our	outstanding	debt	through	January	2004.	Includes,	as	of	December	31, 2001,	approximately	$94.1	million	of	restricted	funds	required	under	the	previous	credit	facility	to	be	held	in	escrow.

# 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	caption	"Critical	Accounting	Policies	and	Estimates"	on	page	41.

Our	continuing	operations	are	reported	in	two	business	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	expense,	corporate	general,	administrative	and	development	expense,	and	impairments,	net	loss	on	sale	of	long-lived	assets, restructuring	and	merger	related	expense.	Segment	profit	(loss)	for	the	rental	and	management	segment	includes	interest	income,	TV	Azteca,	net	(see	note	16	to	our consolidated	financial	statements).

# Executive	Overview

Our	principal	operating	segment	is	our	rental	and	management	segment,	which	accounted	for	approximately	98.4%	and	96.9%	of	our	total	revenues	and	approximately 99.5%	and	99.3%	of	our	segment	operating	profit	for	the	years	ended	December	31,	2005	and	2004,	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,	acquiring	and	building	additional	tower	sites	and	the	degree	to	which	any	of	our	existing	customer	leases	are	cancelled.	We	continue	to	believe	that	our leasing	revenue	is	likely	to	increase	due	to	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	wireless	broadband-services	customers.

The	majority	of	our	tenant	leases	with	wireless	carriers	are	for	an	initial	term	of	five-to-ten	years,	with	multiple	five-year	renewal	terms	thereafter.	Accordingly,	nearly all	of	the	revenue	generated	by	our	rental	and	management	segment	as	of	the	end	of	December	2005	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.	Revenue	generated	by	rate	increases	based	on	fixed	escalation	clauses	is recognized	on	a	straight-line	basis	over	the	non-cancelable	term	of	the	applicable	agreement.

The	revenues	generated	by	our	rental	and	management	segment	also	may	be	affected	by	cancellations	of	existing	customer	leases.	As	discussed	above,	most	of	our tenant	leases	with	wireless	carriers	and	broadcasters	are	multi-year	contracts,	which	typically	may	not	be	cancelled	or,	in	some	instances,	may	be	cancelled	only	upon payment	of	a	termination	fee.	Accordingly,	lease	cancellations	historically	have	not	had	a	material	adverse	effect	on	the	revenues	generated	by	our	rental	and	management segment.	During	2005,	tenant	leases	representing	less	than	2%	of	our	total	revenues	were	cancelled.

A	significant	majority	of	our	revenue	growth	in	2005	was	attributable	to	revenue	generated	from	leasing	space	on	the	towers	and	in-building	systems	acquired	in connection	with	our	merger	with	SpectraSite,	Inc.	In	August	2005,	we	completed	our	merger	with	SpectraSite,	Inc.,	an	owner	and	operator	of	approximately	7,800	wireless and	broadcast	towers	and	in-building	systems	in	the	United	States.	The	merger	was	approved	by	our	and	SpectraSite's	stockholders	on	August	3,	2005,	and	the	results	of operations	of	SpectraSite	have	been	included	in

our	consolidated	results	of	operations	since	that	date.	During	the	period	August	3,	2005	through	December	31,	2005,	SpectraSite	generated	total	revenues	of	$171.2	million and	operating	profit	of	$106.8	million.

Our	revenue	growth	in	2005	was	also	attributable	to	incremental	revenue	generated	by	our	existing	communications	sites.	During	2005,	incremental	revenue attributable	to	those	sites	that	existed	during	the	entire	period	between	January	1,	2004	and	December	31,	2005,	was	approximately	$63.3	million,	which	reflects	revenue increases	from	adding	new	tenants	to	those	sites,	existing	tenants	adding	more	equipment	to	those	sites,	contractual	escalators	net	of	straight	line	accounting	treatment	and favorable	currency	exchange	rate	changes,	offset	by	lease	cancellations.

Our	ability	to	lease	additional	space	on	our	sites	is	a	function	of	the	rate	at	which	wireless	carriers	deploy	capital	to	improve	and	expand	their	wireless	networks	and,	to a	lesser	extent,	the	location	of	and	available	capacity	on	our	existing	sites.	This	rate,	in	turn,	is	influenced	by	the	growth	of	wireless	communications	services	and	related infrastructure,	the	financial	performance	of	our	customers	and	their	access	to	capital,	and	general	economic	conditions.	We	believe	leasing	additional	space	on	our	existing sites,	including	the	sites	acquired	in	connection	with	our	merger	with	SpectraSite,	Inc.,	will	continue	to	contribute	the	substantial	majority	of	our	year-over-year	revenue growth	in	2006.

We	also	generate	revenues	by	building	and	acquiring	new	communications	sites.	In	addition	to	the	approximately	7,800	towers	and	in-building	systems	acquired	in connection	with	our	merger	with	SpectraSite,	Inc.,	we	constructed	or	acquired	289	and	275	sites	in	2005	and	2004,	respectively.	Because	of	the	nature	of	our	recurring revenues	described	above,	our	results	of	operations	only	reflect	revenues	generated	on	these	sites	following	the	respective	dates	of	their	construction	or	acquisition,	which affects	year-over-year	comparisons.	During	2005,	revenue	attributable	to	these	564	sites	that	were	built	or	acquired	between	January	1,	2004	and	December	31,	2005,	was approximately	$10.8	million.

Our	rental	and	management	segment	operating	expenses	are	comprised	of	two	major	categories:	direct	tower	level	expenses	and	selling,	general	and	administrative expenses.	Our	direct	tower	level	expenses	consist	primarily	of	ground	rent,	property	taxes,	repairs	and	maintenance	and	utilities.	Our	selling,	general	and	administrative expenses	consist	of	expenses	to	support	our	rental	and	management	and	network	development	services	segments,	such	as	sales	and	property	management	functions,	and	are included	in	our	rental	and	management	and	network	development	services	segment	operating	expenses.	These	segment	level	expenses	exclude	corporate,	general	and administrative	expenses,	which	are	included	in	corporate	general,	administrative	and	development	expense.	In	general,	our	segment	level	selling,	general	and	administrative expenses	do	not	increase	as	a	result	of	adding	incremental	customers	to	our	sites	and	increase	only	modestly	year	over	year.	As	a	result,	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.

# Results	of	Operations

|  | December	31,<br>2005 | 2004 | Amount	of<br>Increase<br>(Decrease) | Percent<br>Increase<br>(Decrease) |
| :--- | :--- | :--- | :--- | :--- |
|  |  | (In\tthousands) |  |  |
| REVENUES: |  |  |  |  |
| Rental\tand\tmanagement | $929,762 | $684,422 | $245,340 | 36% |
| Network\tdevelopment\tservices | 15,024 | 22,238 | (7,214) | (32) |
| Total\trevenues | 944,786 | 706,660 | \t 238,126 | 34 |
| OPERATING\tEXPENSES: |  |  |  |  |
| Rental\tand\tmanagement | 306,148 | 237,312 | 68,836 | 29 |
| Network\tdevelopment\tservices | 11,981 | 18,801 | (6,820) | (36) |
| Depreciation,\tamortization\tand\taccretion | 411,254 | 329,449 | 81,805 | 25 |
| Corporate\tgeneral,\tadministrative\tand\tdevelopment\texpense | 37,977 | 27,468 | 10,509 | 38 |
| Impairments,\tnet\tloss\ton\tsale\tof\tlong-lived\tassets,\trestructuring\tand\tmerger\trelated\texpense | 34,232 | 23,876 | 10,356 | 43 |
| Total\toperating\texpenses | 801,592 | 636,906 | \t 164,686 | 26 |
| OTHER\tINCOME\t(EXPENSE): |  |  |  |  |
| Interest\tincome,\tTV\tAzteca,\tnet\tof\tinterest\texpense\t$1,492\tand\t$1,497 | 14,232 | 14,316 | (84) | (1) |
| Interest\tincome | 4,402 | 4,844 | (442) | (9) |
| Interest\texpense | (222,419) | (262,237) | (39,818) | (15) |
| Loss\ton\tretirement\tof\tlong-term\tobligations | (67,110) | (138,016) | (70,906) | (51) |
| Other\tincome\t(expense) | 227 | (2,798) | (3,025) | (108) |
| Income\ttax\t(provision)\tbenefit | (4,003) | 80,176 | (84,179) | (105) |
| Minority\tinterest\tin\tnet\tearnings\tof\tsubsidiaries | (575) | (2,366) | (1,791) | (76) |
| Loss\ton\tequity\tmethod\tinvestments | (2,078) | (2,915) | (837) | (29) |
| Loss\tfrom\tdiscontinued\toperations,\tnet | (1,935) | (8,345) | (6,410) | (77) |
| Cumulative\teffect\tof\tchange\tin\taccounting\tprinciple,\tnet | (35,525) |  | 35,525 |  |
| Net\tloss | $(171,590) | $(247,587) | $(75,997) | (31)% |

# Total	Revenues

Total	revenues	for	the	year	ended	December	31,	2005	were	$944.8	million,	an	increase	of	$238.1	million	from	the	year	ended	December	31,	2004.	Approximately $171.2	million	of	the	increase	was	attributable	to	revenues	generated	by	SpectraSite.	The	balance	of	the	increase	resulted	from	an	increase	in	other	rental	and	management revenue	of	$74.1	million,	partially	offset	by	a	decrease	in	network	development	services	revenue	of	$7.2	million.

# Rental	and	Management	Revenue

Rental	and	management	revenue	for	the	year	ended	December	31,	2005	was	$929.8	million,	an	increase	of	$245.3	million	from	the	year	ended	December	31,	2004. Approximately	$171.2	million	of	the	increase	was	attributable	to	revenues	generated	by	SpectraSite.	Approximately	$63.3	million	of	the	increase	resulted	from	incremental revenue	generated	by	communications	sites	that	existed	during	the	entire	period	between	January	1,	2004	and	December	31,	2005,	which	reflects	revenue	increases	from adding	new	tenants	to	those	sites,	existing

tenants	adding	more	equipment	to	those	sites,	contractual	escalators	net	of	straight-line	accounting	treatment	and	favorable	currency	exchange	rates,	offset	by	lease cancellations.	Approximately	$10.8	million	of	the	increase	resulted	from	revenue	generated	by	the	approximately	560	communications	sites	acquired	and/or	constructed subsequent	to	January	1,	2004,	other	than	in	connection	with	the	SpectraSite	merger.	We	believe	that	our	rental	and	management	revenue	will	increase	as	we	continue	to utilize	existing	site	capacity.	We	anticipate	that	the	majority	of	our	new	leasing	activity	will	continue	to	come	from	wireless	and	broadcast	service	providers.

# Network	Development	Services	Revenue

Network	development	services	revenue	for	the	year	ended	December	31,	2005	was	$15.0	million,	a	decrease	of	$7.2	million	from	year	ended	December	31,	2004.	The decrease	in	revenue	was	attributable	to	a	decline	in	revenues	generated	by	our	site	acquisition,	zoning	and	permitting	services,	primarily	as	a	result	of	our	strategic	focus	on our	core	site	leasing	business.	This	decrease	was	partially	offset	by	an	increase	in	revenues	generated	by	our	structural	analysis	services,	as	a	result	of	the	increased	business associated	with	our	significantly	larger	site	portfolio	following	our	merger	with	SpectraSite,	Inc.	As	we	continue	to	focus	on	and	grow	our	site	leasing	business,	and	offer only	limited	services	that	directly	support	our	site	leasing	operations	and	the	addition	of	new	tenants	and	equipment	on	our	sites,	we	anticipate	that	our	network	development services	revenue	will	continue	to	decrease	as	a	percentage	of	our	total	revenues.

# Total	Operating	Expenses

Total	operating	expenses	for	the	year	ended	December	31,	2005	were	$801.6	million,	an	increase	of	$164.7	million	from	the	year	ended	December	31,	2004.	The increase	was	attributable	to	an	increase	in	depreciation,	amortization	and	accretion	expense	of	$81.8	million,	an	increase	in	expenses	within	our	rental	and	management segment	of	$68.8	million,	an	increase	in	corporate	general,	administrative	and	development	expense	of	$10.5	million,	and	an	increase	in	impairments,	net	loss	on	sale	of	long- lived	assets,	restructuring	and	merger	related	expense	of	$10.4	million.	These	increases	were	offset	by	a	decrease	in	expenses	within	our	network	development	services segment	of	$6.8	million.	We	expect	our	total	operating	expenses	for	the	year	ended	December	31,	2006	to	increase	by	approximately	$35.0	million	to	$38.0	million	related	to the	January	1,	2006	adoption	of	SFAS	No.	123R	regarding	equity–based	compensation	expense,	as	described	below	in	"—Recent	Accounting	Pronouncements."

# Rental	and	Management	Expense/Segment	Profit

Rental	and	management	expense	for	the	year	ended	December	31,	2005	was	$306.1	million,	an	increase	of	$68.8	million	from	the	year	ended	December	31,	2004. Approximately	$64.4	million	of	the	increase	was	attributable	to	expenses	incurred	by	SpectraSite.	The	balance	of	the	increase	resulted	primarily	from	an	increase	in	expenses related	to	the	approximately	560	communications	sites	acquired	and/or	constructed	since	January	1,	2004	other	than	in	connection	with	the	SpectraSite	merger,	due	to	their inclusion	in	our	results	for	a	full	year	in	2005.

Rental	and	management	segment	profit	for	the	year	ended	December	31,	2005	was	$637.8	million,	an	increase	of	$176.4	million	from	the	year	ended	December	31, 2004.	Approximately	$106.8	million	of	the	increase	was	attributable	to	rental	and	management	segment	profit	generated	by	SpectraSite.	The	balance	of	the	increase	resulted primarily	from	additional	revenue	from	adding	tenants	to	communications	sites	that	existed	as	of	January	1,	2004	and	revenue	generated	on	the	approximately	560 communications	sites	acquired	and/or	constructed	subsequent	to	January	1,	2004	other	than	in	connection	with	the	SpectraSite	merger,	and	the	impact	of	favorable	currency exchange	rates.

# Network	Development	Services	Expense

Network	development	services	expense	for	the	year	ended	December	31,	2005	was	$12.0	million,	a	decrease	of	$6.8	million	from	the	year	ended	December	31,	2004. The	majority	of	the	decrease	correlates	directly	to	the	decline	in	services	performed	as	noted	above.

# Depreciation,	Amortization	and	Accretion

Depreciation,	amortization	and	accretion	expense	for	the	year	ended	December	31,	2005	was	$411.3	million,	an	increase	of	$81.8	million	from	the	year	ended December	31,	2004.	The	increase	was	attributable	to	approximately	$78.0	million	of	depreciation,	amortization	and	accretion	expense	related	to	long-lived	assets	acquired	in connection	with	the	SpectraSite	merger	and	approximately	$3.8	million	related	to	other	newly	acquired	or	constructed	towers	and	other	long-lived	assets.	We	expect	our depreciation,	amortization	and	accretion	expense	for	the	year	ended	December	31,	2006	to	increase	by	approximately	$131.0	million,	including	approximately	$110.0	million related	to	the	inclusion	of	a	full	year	of	expense	related	to	acquired	SpectraSite	long-lived	assets	and	approximately	$21.0	million	related	to	the	acceleration	of	settlement	date assumptions	regarding	our	asset	retirement	obligations	described	below.

# Corporate	General,	Administrative	and	Development	Expense

Corporate	general,	administrative	and	development	expense	for	the	year	ended	December	31,	2005	was	$38.0	million,	an	increase	of	$10.5	million	from	the	year ended	December	31,	2004.	Approximately	$7.3	million	of	the	increase	was	attributable	to	corporate	general	and	administrative	expense	incurred	by	SpectraSite.	The	balance of	the	increase	was	primarily	attributable	to	employee	bonuses,	primarily	paid	in	connection	with	the	closing	of	the	SpectraSite	merger.

# Impairments,	Net	Loss	on	Sale	of	Long-lived	Assets,	Restructuring	and	Merger	Related	Expense

Impairments,	net	loss	on	sale	of	long-lived	assets,	restructuring	and	merger	related	expense	for	the	year	ended	December	31,	2005	was	$34.2	million,	an	increase	of $10.4	million	from	the	year	ended	December	31,	2004.	The	increase	was	due	primarily	to	merger	related	expense	of	$9.0	million	incurred	in	connection	with	the	SpectraSite merger,	including	employee	separation	costs	of	$3.1	million,	amortization	of	unearned	compensation	relating	to	unvested	stock	options	assumed	of	$2.4	million	and	other employee	stock	option	charges	of	$3.5	million.	Restructuring	expense	and	stock-based	compensation	expense	also	increased	by	$4.6	million	related	to	modified	option awards,	which	was	partially	offset	by	a	decline	of	$3.2	million	in	impairments	and	net	losses	on	sales	of	long-lived	non-core	assets.

# Interest	Expense

Interest	expense	for	the	year	ended	December	31,	2005	was	$222.4	million,	a	decrease	of	$39.8	million	from	the	year	ended	December	31,	2004.	The	decrease	resulted primarily	as	a	result	of	the	redemption	of	all	of	our	outstanding	9	3/8%	Notes,	repurchases	of	our	ATI	12.25%	Notes,	conversions	of	our	3.25%	Notes	and	the	refinancing	of the	American	Tower	credit	facility	at	lower	interest	rates.	This	decrease	was	partially	offset	by	a	full	year	of	interest	payable	on	our	7.50%	Notes,	3.00%	convertible	notes due	August	15,	2012	(3.00%	Notes)	Notes	and	7.125%	Notes	issued	in	February,	August	and	September	of	2004,	respectively,	and	approximately	$15.2	million	of	interest expense	incurred	on	the	debt	assumed	in	the	SpectraSite	merger.

# Loss	on	Retirement	of	Long-Term	Obligations

During	the	year	ended	December	31,	2005,	we	redeemed	$274.9	million	principal	amount	of	our	9	3/8%	Notes,	repurchased	$177.8	million	accreted	value	of	our	ATI 12.25%	Notes	and	converted	$57.1	million	principal	amount	of	our	3.25%	Notes.	In	addition,	we	refinanced	the	American	Tower	and	SpectraSite	credit	facilities.	As	a	result of	these	transactions,	we	recorded	a	$67.1	million	charge	primarily	related	to	the	write-off	of	deferred	financing	fees	and	amounts	paid	in	excess	of	the	carrying	value.	For more	information	regarding	our	financing	activities,	see	"—Liquidity	and	Capital	Resources—Financing	Activities"	below.

During	the	year	ended	December	31,	2004,	we	redeemed	all	of	our	outstanding	6.25%	convertible	notes,	redeemed	and	repurchased	portions	of	our	outstanding	9	3/8% Notes,	ATI	12.25%	Notes	and	5.0%	convertible	notes,	and	refinanced	of	our	credit	facility.	As	a	result	of	these	transactions,	we	recorded	a	$138.0	million	charge	related	to the	write-off	of	deferred	financing	fees	and	amounts	paid	in	excess	of	the	carrying	value.

# Other	Income

Other	income	for	the	year	ended	December	31,	2005	was	$0.2	million,	a	decrease	of	$3.0	million	from	other	expense	of	$2.8	million	for	the	year	ended	December	31,

2004.	The	decrease	was	primarily	attributable	to	approximately	$2.9	million	of	other	income	generated	on	interest	rate	swap	agreements	assumed	in	the	SpectraSite	merger.

# Income	Tax	(Provision)	Benefit

The	income	tax	provision	for	the	year	ended	December	31,	2005	was	$4.0	million,	as	compared	to	an	$80.2	million	tax	benefit	for	the	year	ended	December	31,	2004, representing	a	decrease	of	$84.2	million	from	the	prior	year	period.	The	effective	tax	rate	was	3.1%	for	the	year	ended	December	31,	2005,	as	compared	to	25.5%	for	the	year ended	December	31,	2004.	The	provision	for	the	year	ended	December	31,	2005	reflects	a	$29.5	million	charge	as	a	result	of	a	reduction	in	management's	estimate	of	the	net realizable	value	of	our	federal	income	tax	refund	claims	based	upon	the	current	status	of	the	claims,	as	described	below.

The	effective	tax	rate	on	loss	from	continuing	operations	for	the	year	ended	December	31,	2005	differs	from	the	federal	statutory	rate	due	primarily	to	adjustments	to our	refund	claims	as	more	fully	described	below	and	foreign	items.	The	effective	tax	rate	on	loss	from	continuing	operations	for	the	year	ended	December	31,	2004	differs from	the	federal	statutory	rate	due	primarily	to	valuation	allowances	related	to	capital	losses	and	foreign	items.

We	intend	to	recover	a	portion	of	our	deferred	tax	asset	through	our	federal	income	tax	refund	claims	related	to	the	carry	back	of	certain	federal	net	operating	losses.	In June	2003	and	October	2003,	we	filed	federal	income	tax	refund	claims	with	the	IRS	relating	to	the	carry	back	of	$380.0	million	of	net	operating	losses	generated	prior	to 2003,	of	which	we	initially	anticipated	receiving	approximately	$90.0	million.	Based	on	preliminary	discussions	with	tax	authorities,	we	revised	our	estimate	of	the	net realizable	value	of	our	federal	income	tax	refund	claims	and	anticipate	receiving	a	refund	of	approximately	$65.0	million	as	a	result	of	these	claims	by	the	end	of	2006.	There can	be	no	assurances,	however,	with	respect	to	the	specific	amount	and	timing	of	any	refund.

# Minority	Interest	in	Net	Earnings	of	Subsidiaries

Minority	interest	in	net	earnings	of	subsidiaries	for	the	year	ended	December	31,	2005	was	$0.6	million,	a	decrease	of	$1.8	million	from	the	year	ended	December	31, 2004.	The	decrease	is	primarily	a	result	of	the	Company's	purchase	during	2004	of	the	remaining	12.0%	interest	in	ATC	Mexico	that	it	did	not	own.

# Loss	from	Discontinued	Operations,	Net

Loss	from	discontinued	operations,	net	for	the	year	ended	December	31,	2005	was	$1.9	million,	as	compared	to	$8.3	million	for	the	year	ended	December	31,	2004. The	loss	from	discontinued	operations	for	the	year	ended	December	31,	2005	primarily	represents	the	legal	costs	incurred	in	connection	with	our	involvement	in	the	Verestar bankruptcy	proceedings.	We	also	expect	to	incur	additional	costs	in	connection	with	these	proceedings.	The	loss	from	discontinued	operations	for	the	year	ended December	31,	2004	includes	$7.7	million	related	to	the	results	of	operations	through	the	date	of	sale	of	our	tower	construction	services	unit	and	Kline,	as	well	as	a	net	loss	on disposal	of	our	tower	construction	services	unit	of	$1.7	million	and	a	$1.1	million	net	gain	related	to	a	contractual	obligation	that	was	settled	for	less	than	its	original estimate.

# Cumulative	Effect	of	Change	in	Accounting	Principle,	Net

As	of	December	31,	2005,	we	adopted	the	provisions	of	Financial	Accounting	Standards	Board	Interpretation	No.	47	"Accounting	for	Conditional	Asset	Retirement Obligations"	(FIN	No.	47).	As	a	result,	we	recognized	a	$35.5	million	charge	(net	of	an	$11.7	million	tax	benefit)	as	a	cumulative	effect	of	a	change	in	accounting	principle	in the	consolidated	statement	of	operations	for	the	year	ended	December	31,	2005.	The

adoption	of	FIN	No.	47	primarily	resulted	in	the	acceleration	of	settlement	date	assumptions	regarding	our	asset	retirement	obligations,	as	FIN	No.	47	precludes	us	from considering	non	contractual	lease	renewal	periods	in	determining	our	settlement	date	assumptions.	The	acceleration	of	our	settlement	date	assumptions	also	resulted	in	an increase	to	the	tower	assets	included	in	property	and	equipment,	net	of	$66.9	million	and	an	increase	in	the	asset	retirement	obligations	included	in	other	long-term obligations	of	$114.0	million.

|  | December	31,<br>2004 | 2003 | Amount	of<br>Increase<br>(Decrease) | Percent<br>Increase<br>(Decrease) |
| :--- | :--- | :--- | :--- | :--- |
|  |  | (In\tthousands) |  |  |
| REVENUES: |  |  |  |  |
| Rental\tand\tmanagement | $684,422 | $619,697 | $64,725 | 10\t% |
| Network\tdevelopment\tservices | 22,238 | 12,796 | 9,442 | 74 |
| Total\trevenues | 706,660 | 632,493 | 74,167 | 12 |
| OPERATING\tEXPENSES: |  |  |  |  |
| Rental\tand\tmanagement | 237,312 | 236,680 | 632 | 1 |
| Network\tdevelopment\tservices | 18,801 | 9,493 | 9,308 | 98 |
| Depreciation,\tamortization\tand\taccretion | 329,449 | 330,414 | (965) | (1) |
| Corporate\tgeneral,\tadministrative\tand\tdevelopment\texpense | 27,468 | 26,867 | 601 | 2 |
| Impairments,\tnet\tloss\ton\tsale\tof\tlong-lived\tassets\tand\trestructuring\texpense | 23,876 | 31,656 | (7,780) | (25) |
| Total\toperating\texpenses | 636,906 | 635,110 | 1,796 | 1 |
| OTHER\tINCOME\t(EXPENSE): |  |  |  |  |
| Interest\tincome,\tTV\tAzteca,\tnet\tof\tinterest\texpense\t$1,497\tand\t$1,496 | 14,316 | 14,222 | 94 | 1 |
| Interest\tincome | 4,844 | 5,255 | (411) | (8) |
| Interest\texpense | (262,237) | (279,783) | (17,546) | (6) |
| Loss\ton\tretirement\tof\tlong-term\tobligations | (138,016) | (46,197) | 91,819 | 199 |
| Other\texpense | (2,798) | (8,598) | (5,800) | (67) |
| Income\ttax\tbenefit | 80,176 | 77,796 | 2,380 | 3 |
| Minority\tinterest\tin\tnet\tearnings\tof\tsubsidiaries | (2,366) | (3,703) | (1,337) | (36) |
| Loss\ton\tequity\tmethod\tinvestments | (2,915) | (21,221) | (18,306) | (86) |
| Loss\tfrom\tdiscontinued\toperations,\tnet | (8,345) | (60,475) | (52,130) | (86) |
| Net\tloss | $(247,587) | $(325,321) | $(77,734) | (24)% |

Total	revenues	for	the	year	ended	December	31,	2004	were	$706.7	million,	an	increase	of	$74.2	million	from	the	year	ended	December	31,	2003.	The	increase	resulted from	an	increase	in	rental	and	management	revenues	of	$64.7	million	and	an	increase	in	network	development	services	revenue	of	$9.4	million.

Rental	and	management	revenue	for	the	year	ended	December	31,	2004	was	$684.4	million,	an	increase	of	$64.7	million	from	the	year	ended	December	31,	2003.	The increase	resulted	primarily	from	adding	additional	wireless	and	broadband	tenants	to	towers	that	existed	as	of	January	1,	2003	and,	to	a	lesser	extent,	from	revenue	generated on	the	approximately	900	towers	acquired	and/or	constructed	subsequent	to	January	1,	2003.	This	increase	was	partially	offset	by	a	reduction	in	revenue	on	the	approximately 400	owned	towers	sold	or	disposed

of	subsequent	to	January	1,	2003.	In	2004,	our	revenue	growth	on	towers	that	existed	during	the	entire	period	beginning	January	1,	2003	and	ending	December	31,	2004,	was approximately	$51	million.	We	believe	that	our	rental	and	management	revenue	will	continue	to	grow	as	we	utilize	existing	tower	capacity.	We	anticipate	that	the	majority	of our	new	leasing	activity	will	continue	to	come	from	wireless	and	broadcast	service	providers.

Network	development	services	revenue	for	the	year	ended	December	31,	2004	was	$22.2	million,	an	increase	of	$9.4	million	from	the	year	ended	December	31,	2003. The	increase	in	revenues	during	2004	resulted	primarily	from	a	long-term	construction	contract	that	we	did	not	have	in	the	prior	year.

In	October	2004,	we	entered	into	an	agreement	to	sell	our	tower	construction	services	unit.	Commencing	in	the	fourth	quarter	of	2004,	we	reported	our	tower construction	services	unit	as	a	discontinued	operation.	The	sale	closed	in	November	2004.	After	the	sale,	our	network	development	services	segment	is	focused	on	providing complementary	non-construction	services	to	the	rental	and	management	segment,	including	site	acquisition,	zoning,	permitting	and	structural	analysis.

Total	operating	expenses	for	the	year	ended	December	31,	2004	were	$636.9	million,	an	increase	of	$1.8	million	from	the	year	ended	December	31,	2003.	The principal	components	of	the	increase	were	attributable	to	expense	increases	in	our	network	development	services	segment	of	$9.3	million,	our	rental	and	management segment	of	$0.6	million	and	corporate	general,	administrative	and	development	expense	of	$0.6	million.	These	increases	were	partially	offset	by	decreases	in	impairments,	net loss	on	sale	of	long-lived	assets	and	restructuring	expense	of	$7.8	million	and	in	depreciation,	amortization	and	accretion	of	$1.0	million.

Rental	and	management	expense	for	the	year	ended	December	31,	2004	was	$237.3	million,	an	increase	of	$0.6	million	from	the	year	ended	December	31,	2003.	The increase	resulted	primarily	from	our	acquisition/construction	of	approximately	900	towers	partially	offset	by	a	reduction	in	expenses	related	to	the	400	towers	that	were	sold or	disposed	of	subsequent	to	January	2003,	coupled	with	an	overall	decrease	in	rental	and	management	segment	expenses.

Rental	and	management	segment	profit	for	the	year	ended	December	31,	2004	was	$461.4	million,	an	increase	of	$64.2	million	from	the	year	ended	December	31, 2003.	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.

Network	development	services	expense	for	the	year	ended	December	31,	2004	was	$18.8	million,	an	increase	of	$9.3	million	from	the	year	ended	December	31,	2003. The	increase	in	expenses	during	2004	resulted	primarily	from	expenses	associated	with	a	long-term	construction	contract	that	we	did	not	have	in	the	prior	year.

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

Impairments,	net	loss	on	sale	of	long-lived	assets	and	restructuring	expense	for	the	year	ended	December	31,	2004	was	$23.9	million,	a	decrease	of	$7.8	million	from the	year	ended	December	31,	2003.	The	majority	of	the	decrease	resulted	from	decreased	impairments	and	losses	on	sales	of	long-lived	tower	and	other	non-core	assets.

Interest	expense	for	the	year	ended	December	31,	2004	was	$262.2	million,	a	decrease	of	$17.5	million	from	the	year	ended	December	31,	2003.	The	decrease	resulted primarily	from	the	retirement	of	a	portion	of	our	9	3/8%	Notes	and	ATI	12.25%	Notes	partially	offset	by	additional	interest	incurred	related	to	the	issuance	of	our	3.00% Notes,	7.125%	Notes	and	7.50%	Notes	in	2004.

During	the	year	ended	December	31,	2004,	we	retired	all	or	a	portion	of	our	6.25%	convertible	notes,	9	3/8%	Notes	and	ATI	12.25%	Notes.	As	a	result,	we	incurred	a charge	of	approximately	$103.2	million,	which	represented	the	cash	paid	in	excess	of	the	carrying	value	of	the	debt	at	the	time	of	retirement.	In	addition,	we	also	incurred	a charge	of	$34.8	million	related	to	the	write-off	of	deferred	financing	fees	related	to	the	retirements	discussed	above,	the	retirement	of	a	portion	of	our	5.0%	convertible	notes and	the	refinancing	of	our	credit	facility.	The	total	of	these	charges,	$138.0	million,	represents	our	loss	on	retirement	of	long-term	obligations	for	the	year	ended December	31,	2004.

During	the	year	ended	December	31,	2003,	we	amended	our	credit	facility	and	made	certain	prepayments	and	unscheduled	principal	payments	on	the	term	loans thereunder,	which	collectively	reduced	the	borrowing	capacity	under	our	credit	facility.	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	a	portion	of	our	2.25%	convertible	notes	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.

# Other	Expense

Other	expense	for	the	year	ended	December	31,	2004	was	$2.8	million,	a	decrease	of	$5.8	million	from	the	year	ended	December	31,	2003.	The	decrease	resulted primarily	from	fees	and	expenses	incurred	in	2003	in	connection	with	a	financing	transaction	that	we	did	not	consummate	as	a	result	of	the	ATI	12.25%	Notes	offering.

# Income	Tax	Benefit

The	income	tax	benefit	for	the	year	ended	December	31,	2004	was	$80.2	million,	an	increase	of	$2.4	million	from	the	year	ended	December	31,	2003.	The	effective tax	rate	was	25.5%	for	the	year	ended	December	31,	2004,	as	compared	to	24.5%	for	the	year	ended	December	31,	2003.	The	primary	reason	for	the	increase	in	the	effective tax	rate	is	a	result	of	non-deductible	losses	on	retirements	of	our	debt	in	2003.

The	effective	tax	rate	on	loss	from	continuing	operations	for	the	year	ended	December	31,	2004	differs	from	the	federal	statutory	rate	due	primarily	to	valuation allowances	related	to	capital	losses	and	foreign	items.	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	retirement	of	our	debt.

In	June	2003	and	October	2003,	we	filed	income	tax	refund	claims	with	the	IRS	relating	to	carrying	back	of	$380.0	million	of	net	operating	losses	generated	prior	to 2003.	As	of	December	31,	2004,	we	anticipated	receiving	a	refund	of	approximately	$90.0	million	as	a	result	of	these	claims	and	estimated	recovery	of	these	amounts	within two	to	three	years	of	the	dates	the	claims	were	filed	with	the	IRS.

# Loss	on	Equity	Method	Investments

Loss	on	equity	method	investments	for	the	year	ended	December	31,	2004	was	$2.9	million,	a	decrease	of	$18.3	million	from	the	year	ended	December	31,	2003.	The decrease	is	primarily	due	to	an	impairment	charge	recorded	on	one	of	our	equity	investments	of	$19.3	million	in	2003.

Loss	from	discontinued	operations,	net	for	the	year	ended	December	31,	2004	was	$8.3	million,	as	compared	to	$60.5	million	for	the	year	ended	December	31,	2003. In	October	2004,	we	committed	to	a	plan	to	sell	our	tower	construction	services	unit,	which	was	subsequently	sold	in	November	2004.	In	addition,	we	sold	Kline	in	March 2004.	Accordingly,	the	loss	from	discontinued	operations,	net,	for	the	year	ended	December	31,	2004	includes	$7.7	million	related	to	the	results	of	these	operations	through the	date	of	sale.	In	addition,	the	loss	from	discontinued	operations,	net,	for	the	year	ended	December	31,	2004	includes	a	net	loss	on	disposal	of	our	tower	construction services	unit	of	$1.7	million	and	a	$1.1	million	net	gain	related	to	a	contractual	obligation	that	was	settled	for	less	than	its	original	estimate.

During	2003,	we	disposed	of	two	of	our	wholly	owned	subsidiaries,	Galaxy	Engineering	and	Flash	Technologies,	two	office	buildings	and	two	subsidiaries	of Verestar.	Accordingly,	the	loss	from	discontinued	operations,	net,	for	the	year	ended	December	31,	2003	includes	$12.0	million	related	to	the	results	of	these	operations, Kline	and	the	remaining	operations	of	Verestar	through	the	date	of	its	bankruptcy	filing	in	December	2003.	In	addition	to	the	above,	loss	from	discontinued	operations,	net, for	the	year	ended	December	31,	2003	includes	the	following	net	losses	on	disposal:	(a)	an	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	contractual	obligations;	(b)	an	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	$3.7	million	net	loss	on the	disposal	of	the	office	buildings;	and	(e)	a	$0.1	million	net	gain	on	the	sale	of	Flash.

# Liquidity	and	Capital	Resources

During	the	year	ended	December	31,	2005,	we	improved	our	financial	flexibility	by	refinancing	our	existing	debt	with	less	restrictive,	lower	cost	capital,	which increased	our	liquidity	and	our	ability	to	return	value	to	our	stockholders.	Significant	transactions	included	the	following:

•In	October	2005,	we	refinanced	the	two	existing	credit	facilities	of	our	principal	operating	subsidiaries.	We	replaced	the	existing	American	Tower	$1.1	billion senior	secured	credit	facility	with	a	new	$1.3	billion	senior	secured	credit	facility	and	replaced	the	existing	SpectraSite	$900.0	million	senior	secured	credit facility	with	a	new	$1.15	billion	senior	secured	credit	facility.

•	 During	2005,	consistent	with	our	strategy	of	replacing	our	higher	cost,	more	restrictive	debt	with	less	expensive,	less	restrictive	capital,	we	repurchased,	redeemed and	converted	approximately	$605.7	million	face	amount	of	our	outstanding	debt	securities.	In	addition,	in	December	2005,	we	issued	a	notice	for	the	redemption of	the	remaining	outstanding	$227.7	million	face	amount	of	ATI	12.25%	Notes,	which	we	redeemed	on	February	1,	2006.	Upon	completion	of	this	redemption, no	ATI	12.25%	Notes	remained	outstanding.

•In	November	2005,	we	announced	that	our	board	of	directors	had	approved	a	stock	repurchase	program	pursuant	to	which	we	intend	to	repurchase	up	to	$750.0 million	of	our	Class	A	common	stock	through	December	2006.	As	of	December	31,	2005,	we	had	repurchased	2.8	million	shares	of	Class	A	common	stock	for an	aggregate	of	$76.6	million.

As	of	December	31,	2005,	we	had	total	outstanding	indebtedness	of	approximately	$3.6	billion.	We	incurred	substantially	all	of	this	indebtedness	to	refinance indebtedness	incurred	prior	to	2002	to	fund	the	acquisition	of

tower	sites	and	services	businesses,	and	capital	expenditures	related	to	the	construction	of	new	tower	sites.	Beginning	in	2002,	we	significantly	reduced	our	acquisitions	and new	tower	construction	activities,	and	began	to	focus	on	reducing	our	overall	indebtedness.	In	2003,	2004	and	2005,	we	continued	this	effort	by	refinancing	indebtedness	to extend	maturity	dates,	reduce	interest	expense	and	improve	our	financial	flexibility,	and	since	2004,	by	using	cash	flow	from	operations	to	repurchase	and	redeem	outstanding debt	to	reduce	our	net	total	indebtedness.

In	2005,	we	generated	sufficient	cash	flow	from	operations	to	fund	our	capital	expenditures	and	cash	interest	obligations.	We	believe	our	cash	generated	by	operations for	the	year	ending	December	31,	2006	also	will	be	sufficient	to	fund	our	capital	expenditures	and	our	cash	debt	service	(interest	and	principal	repayments)	obligations	for 2006.	For	information	about	our	outstanding	indebtedness,	see	"—Contractual	Obligations"	below.

We	expect	our	2006	cash	needs	related	to	indebtedness	outstanding	as	of	December	31,	2005,	to	consist	primarily	of	the	following:	debt	service,	including	cash	interest of	approximately	$189.0	million,	approximately	$179.5	million	for	the	February	1,	2006	redemption	of	the	remaining	outstanding	ATI	12.25%	Notes,	and	capital	lease payments	and	other	notes	payable	(including	interest)	of	approximately	$5.2	million.	We	expect	to	fund	capital	expenditures	of	between	$110.0	and	$130.0	million, principally	related	to	new	tower	construction,	improvements	to	existing	towers	and	installation	of	new	in-building	systems	in	2006.	We	also	expect	to	use	approximately $22.7	million	in	cash	to	purchase	the	remaining	shares	of	ATC	South	America	that	we	do	not	own,	as	discussed	above	in	"Business—Recent	Transactions—ATC International	Transactions."	In	addition,	we	expect	to	continue	to	fund	our	stock	repurchase	program,	pursuant	to	which	we	intend	to	purchase	up	to	an	additional	$673.4 million	of	our	Class	A	common	stock	in	2006.	We	also	may	fund	additional	purchases	of	our	Class	A	common	stock,	either	pursuant	to,	or	supplemental	to,	our	stock repurchase	program.	We	expect	to	meet	these	cash	needs	through	a	combination	of	cash	on	hand,	cash	generated	by	operations	and	borrowings	under	our	credit	facilities.

# Uses	of	Cash

Stock	Repurchase	Program.	In	November	2005,	we	announced	that	our	Board	of	Directors	had	approved	a	stock	repurchase	program	to	repurchase	up	to	$750.0 million	of	our	Class	A	common	stock	through	December	2006.	We	expect	to	utilize	cash	from	operations,	borrowings	under	our	credit	facilities	and	cash	on	hand	to	fund	the repurchase	program.	Under	the	program,	our	management	is	authorized	to	purchase	shares	from	time	to	time	in	open	market	purchases	or	privately	negotiated	transactions	at prevailing	prices	as	permitted	by	securities	laws	and	other	legal	requirements,	and	subject	to	market	conditions	and	other	factors.	To	facilitate	repurchases,	we	entered	into	a trading	plan	under	Rule	10b5-1	of	the	Securities	Exchange	Act	of	1934,	which	allows	us	to	repurchase	shares	during	periods	when	we	otherwise	might	be	prevented	from doing	so	under	insider	trading	laws	or	because	of	self-	imposed	trading	blackout	periods.	The	program	may	be	discontinued	at	any	time.	As	of	December	31,	2005,	we	had repurchased	2.8	million	shares	of	Class	A	common	stock	for	an	aggregate	of	$76.6	million.	Between	January	1,	2006	and	March	9,	2006,	we	repurchased	an	additional 3.9	million	shares	of	our	Class	A	common	stock	for	an	aggregate	of	$117.4	million	pursuant	to	our	stock	repurchase	program.

Tower	Construction	and	Improvements	and	In-Building	System	Installation.	During	the	year	ended	December	31,	2005,	payments	for	purchases	of	property	and equipment	and	construction	activities	totaled	$88.6	million,	including	capital	expenditures	incurred	in	connection	with	the	construction	of	245	towers	and	the	installation	of 14	in-building	systems.	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	communications	sites,	build	or	install	new	communications	sites	and	redevelop	or	improve	existing communications	sites	when	the	expected	returns	on	such	investments	meet	our	investment	criteria.	We	anticipate	that	in	2006	we	will	build	approximately	275	new	towers and	install	approximately	40	new	in-building	systems,	and	expect	our	2006	total	capital	expenditures	for	construction,	improvements	and	corporate	purposes	to	be	between approximately	$110.0	million	and	$130.0	million.

Refinancing	and	Repurchases	of	Debt.	In	order	to	extend	the	maturity	dates	of	our	indebtedness,	reduce	interest	expense	and	improve	our	financial	flexibility,	we	use our	cash	to	refinance	and	repurchase	our

outstanding	indebtedness.	During	the	year	ended	December	31,	2005,	we	repurchased,	redeemed	and	converted	approximately	$605.7	million	face	amount	of	our	outstanding debt	securities.	For	more	information	about	our	financing	activities,	see	"—Financing	Activities"	below.	In	October	2005,	we	also	refinanced	the	American	Tower	credit facility	and	the	SpectraSite	credit	facility	with	new	credit	facilities.	(See	"—Sources	of	Cash"	below.)	In	addition,	in	December	2005,	we	issued	a	notice	for	the	redemption	of the	remaining	outstanding	$227.7	million	face	amount	of	ATI	12.25%	Notes,	which	we	redeemed	on	February	1,	2006.	(See	"—Financing	Activities"	below.)

Contractual	Obligations.	Our	contractual	obligations	relate	primarily	to	borrowings	under	the	credit	facilities	and	our	outstanding	notes.	The	following	table	sets	forth information	relating	to	our	contractual	obligations	payable	in	cash	as	of	December	31,	2005	(in	thousands):

| Contractual	Obligations | 2006 | 2007 | 2008 | 2009 | 2010 | Thereafter | Total |
| :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- |
| American\tTower\tcredit\tfacility\t(1) |  |  |  |  |  |  |  |
| Revolving\tcredit\tfacility |  |  |  |  |  |  |  |
| Term\tLoan\tA |  |  |  |  | $750,000 |  | $750,000 |
| Delayed\tDraw\tTerm\tLoan |  |  |  |  | 43,000 |  | 43,000 |
| SpectraSite\tcredit\tfacility\t(1) |  |  |  |  |  |  |  |
| Revolving\tcredit\tfacility |  |  |  |  |  |  |  |
| Term\tLoan\tA |  |  |  |  | 700,000 |  | 700,000 |
| Delayed\tDraw\tTerm\tLoan |  |  |  |  |  |  |  |
| 12.25%\tsenior\tsubordinated\tdiscount\tnotes\t(2) | $179,488 |  |  |  |  |  | 179,488 |
| 7.25%\tsenior\tsubordinated\tnotes |  |  |  |  |  | $400,000 | 400,000 |
| 7.50%\tsenior\tnotes |  |  |  |  |  | 225,000 | 225,000 |
| 7.125%\tsenior\tnotes |  |  |  |  |  | 500,000 | 500,000 |
| 5.0%\tconvertible\tnotes\t(3) |  | $275,688 |  |  |  |  | 275,688 |
| 3.25%\tconvertible\tnotes |  |  |  |  | 152,911 |  | 152,911 |
| 3.00%\tconvertible\tnotes |  |  |  |  |  | 345,000 | 345,000 |
| 2.25%\tconvertible\tnotes | 47 |  |  |  |  |  | 47 |
| Long-term\tobligations,\texcluding\tcapital\tleases\tand\tother\nnotes\tpayable | 179,535 | 275,688 |  |  | 1,645,911 | 1,470,000 | 3,571,134 |
| Cash\tinterest\texpense\t(1)(2) | 189,000 | 177,000 | $175,000 | $175,000 | 161,000 | 138,000 | 1,015,000 |
| Capital\tlease\tpayments\t(including\tinterest)\tand\tother\tnotes |  |  |  |  |  |  |  |
| payable | 5,241 | 4,395 | 4,025 | 3,719 | 3,776 | 212,743 | 233,899 |
| Operating\tlease\tpayments\t(4) | 190,129 | 183,595 | 180,910 | 178,456 | 172,060 | 2,507,444 | 3,412,594 |
| Other\tlong-term\tliabilities\t(5) | 400 | 1,098 | 437 | 450 | 463 | 165,071 | 167,919 |
| Total | $564,305 | $641,776 | $360,372 | $357,625 | $1,983,210 | $4,493,258 | $8,400,546 |

(1) For	more	information	regarding	the	American	Tower	and	SpectraSite	credit	facilities,	see	"—Sources	of	Cash"	below.	Interest	rates	for	the	revolving	loan	and	the	term loan	components	of	each	of	the	credit	facilities	are	determined	at	the	option	of	the	borrowers	under	the	facility	and	range	between	0.50%	and	1.25%	above	the	applicable London	Interbank	Offering	Rate	(LIBOR)	for	LIBOR	based	borrowings	or	between	0.0%	and	0.25%	above	the	defined	base	rate	for	base	rate	borrowings,	in	each	case based	on	the	applicable	borrowers'	debt	ratings.	A	quarterly	commitment	fee	on	the	undrawn	portion	of	each	credit	facility	is	required,	ranging	from	0.10%	to 0.375%	per	annum,	based	on	the	applicable	borrowers'	debt	ratings.	As	discussed	in	Item	7A.	"Quantitative	and	Qualitative	Disclosures	About	Market	Risk,"	we	have entered	into	swap	agreements	to	manage	exposure	to	variable	rate	interest	obligations	under	the	credit	facilities.	As	a	result	of	these	swap	agreements,	the	effective weighted	average	interest	rate	in	effect	at	December	31,	2005	for	the	credit	facilities	was	4.71%.	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	facilities	agreements,	is	4.53%	through	their	maturity	on	October	27,	2010.

(2) The	ATI	12.25%	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.	As	of	December	31,	2005,	the	remaining

outstanding	debt	under	the	ATI	12.25%	Notes	was	$227.7	million	face	amount	($160.3	million	accreted	value,	net	of	$7.2	million	fair	value	allocated	to	warrants).	On December	22,	2005,	we	issued	a	notice	for	the	redemption	on	February	1,	2006,	of	all	remaining	outstanding	ATI	12.25%	Notes.	Pursuant	to	the	indenture	for	the	notes, once	a	notice	to	redeem	is	issued,	notes	called	for	redemption	become	irrevocably	due	and	payable	on	the	redemption	date.	On	February	1,	2006	we	redeemed	$227.7 million	face	amount	of	ATI	12.25%	Notes	in	accordance	with	the	indenture	at	106.125%	of	their	accreted	value	for	an	aggregate	of	$179.5	million.	Upon	completion	of this	redemption,	no	ATI	12.25%	Notes	remained	outstanding.

(3) The	holders	of	our	5.0%	convertible	notes	have	the	right	to	require	us	to	repurchase	their	notes	on	specified	dates	prior	to	their	maturity	date	in	2010,	but	we	may	pay the	purchase	price	by	issuing	shares	of	our	Class	A	common	stock,	subject	to	certain	conditions.	The	obligation	with	respect	to	the	right	of	the	holders	to	put	the	5.0% convertible	notes	on	February	20,	2007,	has	been	classified	as	a	cash	obligation	for	2007.

(4) Operating	lease	payments	include	payments	to	be	made	under	non-cancelable	initial	terms,	as	well	as	payments	for	certain	renewal	periods	at	our	option	because	failure to	renew	could	result	in	a	loss	of	the	applicable	tower	site	and	related	revenues	from	tenant	leases,	thereby	making	it	reasonably	assured	that	we	will	renew	the	lease.

(5) Primarily	represents	our	asset	retirement	obligations	and	excludes	certain	other	long-term	liabilities	included	in	our	consolidated	balance	sheet,	primarily	our	straight- line	rent	liability	for	which	cash	payments	are	included	in	operating	lease	payments	and	unearned	revenue	that	is	not	payable	in	cash.

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,	2005,	as we	cannot	currently	estimate	the	timing	and	amounts	of	such	payments.	(See	note	9	to	our	consolidated	financial	statements.)

# Sources	of	Cash

American	Tower	Corporation	is	a	holding	company,	and	our	cash	flows	are	derived	solely	from	distributions	from	our	operating	subsidiaries.	Our	principal	United States	operating	subsidiaries	are	ATI	and	SpectraSite.	Our	principal	international	operating	subsidiary	is	American	Tower	International,	Inc.	Under	the	American	Tower credit	facility	and	the	indentures	for	our	senior	notes	and	the	ATI	notes,	ATI	and	American	Tower	International	are	subject	to	restrictions	on	the	amount	of	cash	that	can	be distributed	to	us.	SpectraSite	is	subject	to	restrictions	on	the	amount	of	cash	that	can	be	distributed	to	us	under	the	SpectraSite	credit	facility,	but	as	a	result	of	its	designation as	an	unrestricted	subsidiary,	it	is	not	subject	to	such	restrictions	under	the	indentures	for	our	senior	notes	and	the	ATI	notes.

Total	Liquidity	at	December	31,	2005.	As	of	December	31,	2005,	we	had	approximately	$1.047	billion	of	total	liquidity,	comprised	of	approximately	$112.7	million	in cash	and	cash	equivalents	and	the	ability	to	borrow	approximately	$488.8	million	under	the	American	Tower	credit	facility	and	approximately	$445.4	million	under	the SpectraSite	credit	facility.

Cash	Generated	by	Operations.	For	the	years	ended	December	31,	2005,	2004	and	2003,	our	cash	provided	by	operating	activities	was	$397.2	million,	$216.7	million and	$156.4	million,	respectively.	Each	of	our	rental	and	management	and	network	development	services	segments	are	expected	to	generate	cash	flows	from	operations	during 2006	in	excess	of	their	cash	needs	for	operations	and	expenditures	for	tower	construction,	improvements	and	acquisitions.	(See	"—Results	of	Operations"	above.)	We	expect to	use	the	excess	cash	generated	by	operations	principally	to	service	our	debt	and	to	fund	capital	expenditures	and	repurchases	of	our	Class	A	common	stock.

New	Credit	Facilities.	In	October	2005,	we	refinanced	the	two	existing	credit	facilities	of	our	principal	operating	subsidiaries.	We	replaced	the	existing	American Tower	$1.1	billion	senior	secured	credit	facility	with	a	new	$1.3	billion	senior	secured	credit	facility	and	replaced	the	existing	SpectraSite	$900.0	million	senior	secured	credit facility	with	a	new	$1.15	billion	senior	secured	credit	facility.

The	new	American	Tower	credit	facility	consists	of	a	$300.0	million	revolving	credit	facility,	a	$750.0	million	Term	Loan	A,	and	a	$250.0	million	Delayed	Draw Term	Loan.	At	closing,	we	drew	down	the	entire

Term	Loan	A	and	used	the	net	proceeds	to	repay	principal	and	interest	on	the	outstanding	$745.0	million	under	the	previous	American	Tower	credit	facility.	At	closing,	we had	approximately	$300.0	million	of	availability	under	the	revolving	credit	facility,	against	which	approximately	$18.2	million	of	undrawn	letters	of	credit	were	outstanding, and	had	the	ability	to	draw	down	the	entire	$250.0	million	Delayed	Draw	Term	Loan.	In	December	2005,	we	drew	down	$43.0	million	of	the	Delayed	Draw	Term	Loan	to finance	repurchases	of	the	ATI	12.25%	Notes.	In	January	2006,	we	drew	down	an	additional	$179.0	million	of	the	Delayed	Draw	Term	Loan	to	finance	the	redemption	of	the remaining	outstanding	ATI	12.25%	Notes.	The	credit	facility	provides	that	any	portion	of	the	Delayed	Draw	Term	Loan	that	is	not	drawn	as	of	October	27,	2006	will	be canceled.

The	borrowers	under	the	American	Tower	credit	facility	include	ATI,	American	Tower,	L.P.,	American	Tower	International	and	American	Tower	LLC.	We	and	the borrowers'	restricted	subsidiaries	(as	defined	in	the	loan	agreement)	have	guaranteed	all	of	the	loans	under	the	credit	facility.	These	loans	are	secured	by	liens	on	and	security interests	in	substantially	all	assets	of	the	borrowers	and	the	restricted	subsidiaries.	The	American	Tower	credit	facility	has	a	term	of	five	years,	maturing	on	October	27,	2010, and	all	amounts	will	be	due	and	payable	in	full	at	maturity.	The	American	Tower	credit	facility	does	not	require	amortization	of	principal	and	may	be	paid	prior	to	maturity	in whole	or	in	part	at	the	borrowers'	option	without	penalty	or	premium.	For	more	information	regarding	the	new	American	Tower	credit	facility,	please	see	note	7	to	our consolidated	financial	statements.

The	new	SpectraSite	credit	facility	consists	of	a	$250.0	million	revolving	credit	facility,	a	$700.0	million	Term	Loan	A,	and	a	$200.0	million	Delayed	Draw	Term Loan.	At	closing,	we	drew	down	the	entire	Term	Loan	A	and	used	the	net	proceeds	to	repay	principal	and	interest	on	the	$697.0	million	outstanding	under	the	previous SpectraSite	credit	facility.	At	closing,	we	had	approximately	$250.0	million	of	availability	under	the	revolving	credit	facility,	against	which	approximately	$4.6	million	of undrawn	letters	of	credit	were	outstanding,	and	had	the	ability	to	draw	down	the	entire	$200.0	million	Delayed	Draw	Term	Loan.	The	credit	facility	provides	that	any	portion of	the	Delayed	Draw	Term	Loan	that	is	not	drawn	as	of	October	27,	2006	will	be	canceled.

The	borrower	under	the	SpectraSite	credit	facility	is	SpectraSite	Communications.	SpectraSite	Communications,	its	parent	company	(SpectraSite,	LLC),	and	its restricted	subsidiaries	(as	defined	in	the	loan	agreement)	have	guaranteed	all	of	the	loans	under	the	credit	facility.	These	loans	are	secured	by	liens	on	and	security	interests	in substantially	all	assets	of	the	borrower	and	the	restricted	subsidiaries.	The	SpectraSite	credit	facility	has	a	term	of	five	years,	maturing	on	October	27,	2010,	and	all	amounts will	be	due	and	payable	in	full	at	maturity.	The	SpectraSite	credit	facility	does	not	require	amortization	of	principal	and	may	be	paid	prior	to	maturity	in	whole	or	in	part	at the	borrower's	option	without	penalty	or	premium.	For	more	information	regarding	the	new	SpectraSite	credit	facility,	see	note	7	to	our	consolidated	financial	statements.

Proceeds	from	the	Sale	of	Equity	Securities.	We	receive	proceeds	from	sales	of	our	equity	securities	pursuant	to	our	stock	option	and	stock	purchase	plans	and	upon exercise	of	warrants	to	purchase	our	equity	securities.	For	the	year	ended	December	31,	2005,	we	received	approximately	$1.8	million	in	proceeds	from	exercises	of	warrants to	purchase	shares	of	our	Class	A	common	stock	and	approximately	$63.6	million	in	proceeds	from	sales	of	shares	of	our	Class	A	common	stock	pursuant	to	our	stock	option and	stock	purchase	plans.

# Financing	Activities

9	3/8%	Notes	Redemptions.	During	the	year	ended	December	31,	2005,	we	redeemed	an	aggregate	of	$274.9	million	principal	amount	of	our	9	3/8%	Notes,	representing all	of	the	outstanding	9	3/8%	Notes.	We	completed	partial	redemptions	of	the	9	3/8%	Notes	in	accordance	with	the	terms	of	the	indenture	in	January,	July	and	September	2005 for	an	aggregate	redemption	price	of	$288.3	million,	plus	approximately	$9.5	million	in	accrued	interest.

ATI	12.25%	Notes	Repurchases.	During	the	year	ended	December	31,	2005,	we	repurchased	an	aggregate	of	$270.6	million	face	amount	of	our	ATI	12.25%	Notes ($177.8	million	accreted	value,	net	of	$10.1	million	fair

value	allocated	to	warrants)	for	approximately	$208.4	million	in	cash,	in	privately	negotiated	transactions.	As	of	December	31,	2005,	we	had	outstanding	$227.7	face	amount of	our	ATI	12.25%	Notes	($160.3	million	accreted	value,	net	of	$7.2	million	fair	value	allocated	to	warrants).	In	December	2005,	we	issued	a	notice	for	the	redemption	of	the remaining	outstanding	ATI	12.25%	Notes.	On	February	1,	2006,	we	redeemed	an	aggregate	of	$227.7	million	face	amount	of	ATI	12.25%	Notes	in	accordance	with	the indenture	at	106.125%	of	their	accreted	value	for	an	aggregate	of	$179.5	million.	Upon	completion	of	this	redemption,	no	ATI	12.25%	Notes	remained	outstanding.

3.25%	Convertible	Notes	Conversions.	During	the	year	ended	December	31,	2005,	holders	of	an	aggregate	of	$57.1	million	principal	amount	of	3.25%	Notes converted	their	notes	into	an	aggregate	of	4.7	million	shares	of	our	Class	A	common	stock.	Pursuant	to	the	terms	of	the	indenture,	the	holders	of	the	3.25%	Notes	received 81.808	shares	of	our	Class	A	common	stock	for	every	$1,000	principal	amount	of	notes	converted.	In	connection	with	the	conversion,	we	paid	such	holders	an	aggregate	of $4.9	million,	calculated	based	on	the	accrued	and	unpaid	interest	on	the	notes	and	the	discounted	value	of	future	interest	payments	on	the	notes.	As	of	December	31,	2005, $152.9	million	principal	amount	of	3.25%	Notes	remained	outstanding.	Between	January	1,	2006	and	March	9,	2006,	holders	of	an	additional	$22.5	million	principal	amount of	3.25%	Notes	converted	their	notes	into	an	aggregate	of	1.8	million	shares	of	our	Class	A	common	stock.	In	connection	with	the	conversion,	we	paid	such	holders	an aggregate	of	$1.7	million,	calculated	based	on	the	accrued	and	unpaid	interest	on	the	notes	and	the	discounted	value	of	future	interest	payments	on	the	notes.

Interest	Rate	Swap	Agreements.	In	the	fourth	quarter	of	2005,	we	entered	into	eight	interest	rate	swap	agreements	to	manage	exposure	to	variable	rate	interest obligations	under	our	new	credit	facilities.	The	swaps	have	an	aggregate	notional	amount	of	$450.0	million,	a	weighted	average	fixed	rate	of	approximately	4.85%	and	expire in	October	2010.	During	January	2006,	we	also	entered	into	two	additional	interest	rate	swap	agreements	with	an	aggregate	notional	amount	of	$100.0	million,	a	weighted average	fixed	rate	of	approximately	4.68%	and	will	expire	in	October	2010.	We	have	designated	these	swaps	as	cash	flow	hedges.

# Factors	Affecting	Sources	of	Liquidity

Internally	Generated	Funds.	Because	the	majority	of	our	tenant	leases	are	multi-year	contracts,	a	significant	majority	of	the	revenues	generated	by	our	rental	and management	segment	as	of	the	end	of	2005	is	recurring	revenue	that	we	should	continue	to	receive	in	future	periods.	Accordingly,	a	key	factor	affecting	our	ability	to	generate cash	flow	from	operating	activities	is	to	maintain	this	recurring	revenue	and	to	convert	it	to	operating	profit	by	minimizing	operating	costs	and	fully	achieving	our	operating efficiencies.	In	addition,	our	ability	to	increase	cash	flow	from	operating	activities	is	dependent	upon	the	demand	for	antenna	space	on	wireless	and	broadcast	communications towers	and	for	related	services	and	our	ability	to	maximize	the	utilization	of	our	existing	towers.

Restrictions	Under	Credit	Facilities.	The	American	Tower	and	SpectraSite	credit	facilities	contain	certain	financial	ratios	and	operating	covenants	and	other restrictions	(including	limitations	on	additional	debt,	distributions	and	dividends,	guaranties,	sales	of	assets	and	liens)	with	which	the	borrowers	and	their	restricted subsidiaries	must	comply.	Each	credit	facility	contains	the	following	two	financial	maintenance	tests	with	which	the	borrowers	under	the	applicable	credit	facility	must comply:

•a	leverage	ratio	(Total	Debt	to	Adjusted	EBITDA)	of	not	greater	than	5.50	to	1.00	for	the	borrowers	and	their	restricted	subsidiaries;	and

•an	interest	coverage	ratio	(Adjusted	EBITDA	to	Interest	Expense)	of	not	less	than	2.50	to	1.00	for	the	borrowers	and	their	restricted	subsidiaries.

As	of	December	31,	2005,	we	were	in	compliance	with	all	of	the	foregoing	financial	tests.

Any	failure	to	comply	with	the	financial	and	operating	covenants	of	the	American	Tower	credit	facility	or	the	SpectraSite	credit	facility	would	not	only	prevent	us	from being	able	to	borrow	additional	funds	under	the

revolving	loans,	but	would	constitute	a	default,	resulting	in,	among	other	things,	the	amounts	outstanding,	including	all	accrued	interest	and	unpaid	fees,	becoming immediately	due	and	payable.	The	credit	facilities	allow	us	to	use	borrowings	for	general	corporate	purposes	and,	provided	certain	conditions	are	met,	permit	the	use	of borrowings	under	the	credit	facilities	and	internally	generated	funds	to	repurchase	our	equity	securities	and	repurchase	and	refinance	other	indebtedness	without	additional lender	approval.

Restrictions	Under	Notes	Indentures.	The	indenture	governing	the	terms	of	the	ATI	7.25%	Notes	contains	certain	covenants	which	further	restrict	ATI,	the	sister guarantors	(as	defined)	and	its	and	their	subsidiaries	in	addition	to	the	restrictions	set	forth	in	the	American	Tower	credit	facility.	These	include	restrictions	on	their	ability	to incur	additional	debt,	guarantee	debt,	pay	dividends	and	make	other	distributions	and	make	certain	investments.	SpectraSite	and	its	subsidiaries	are	unrestricted	subsidiaries under	the	indenture	for	the	ATI	7.25%	Notes	and	are	not	subject	to	such	restrictions.	Any	failure	to	comply	with	these	covenants	would	constitute	a	default.	Specifically,	the indenture	restricts	ATI,	the	sister	guarantors	and	its	and	their	restricted	subsidiaries	from	incurring	additional	debt	or	issuing	certain	types	of	preferred	stock,	other	than	debt under	the	American	Tower	credit	facility,	or	renewals,	refundings,	replacements	or	refinancings,	up	to	$1.6	billion.

The	indentures	governing	the	terms	of	our	7.50%	Notes	and	7.125%	Notes	also	contain	certain	restrictive	covenants	with	which	we	and	the	restricted	subsidiaries under	these	indentures	must	comply.	These	include	restrictions	on	our	ability	to	incur	additional	debt,	guarantee	debt,	pay	dividends	and	make	other	distributions	and	make certain	investments.	SpectraSite	and	its	subsidiaries	are	unrestricted	subsidiaries	under	the	indentures	for	our	7.50%	Notes	and	7.125%	Notes	and	are	not	subject	to	such restrictions.	Any	failure	to	comply	with	these	covenants	would	constitute	a	default.	Specifically,	these	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	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	any	of	our	credit	facilities	or	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	credit	facilities	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.

As	of	December	31,	2005,	our	annual	consolidated	cash	debt	service	obligations	(principal	and	interest)	for	each	of	the	next	five	years	and	thereafter	are approximately:	$373.8	million,	$457.1	million,	$179.0	million,	$178.7	million,	$1.8	billion	and	$1.8	billion,	respectively.	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	the	indenture	for	the	ATI	7.25%	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	in	Item	1A	of	this	annual	report	under	the	caption	"Risk	Factors."	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.	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	April	2004,	the	SEC	declared	effective	our	"universal"	shelf	registration	statement	for	possible future	offerings	of	an	aggregate	of	up	to	$1.0	billion	of	debt	and/or	equity	securities.	As	of	December	31,	2005,	we	had	not	conducted	any	offerings	pursuant	to	our	universal shelf	registration	statement.

# 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,	purchase	price	allocation,	asset	retirement	obligations,	impairment	of	assets	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	an	understanding	of	our	results	of	operations	and	financial	condition.	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	our	consolidated	financial	statements	included	in	this	annual	report,	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,	2005,	we	have	provided	a	valuation	allowance	of	approximately	$422.4	million,	including	approximately	$249.5	million	attributable	to SpectraSite,	primarily	related	to	certain	net	operating	loss	and	capital	loss	carryforwards.	Approximately	$237.8	million	of	the	SpectraSite	valuation	allowance was	assumed	as	of	the	acquisition	date.	The	balance	of	the	valuation	allowance	primarily	relates	to	net	state	deferred	tax	assets.	We	have	not	provided	a	valuation allowance	for	the	remaining	deferred	tax	assets,	primarily	our	federal	net	operating	loss	carryforwards,	as	we	believe	that	we	will	have	sufficient	time	to	realize these	federal	net	operating	loss	carryforwards	during	the	twenty-year	tax	carryforward	period.

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	$1.3	billion	in	taxable	income	from	January	1,	2006	to	December	31,	2025.	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.

From	time	to	time,	we	are	subject	to	examination	by	various	tax	authorities	in	jurisdictions	in	which	we	have	significant	business	operations,	and	we regularly	assess	the	likelihood	of	additional	assessments	in	each	of	the	tax	jurisdictions	resulting	from	these	examinations.	During	the	year	ended	December	31, 2005,	we	recorded	a	$29.5	million	income	tax	provision	to	reflect	a	reduction	in	management's	estimate	of	the	net	realizable	value	of	our	pending	federal	tax refund	claims	as	described	above.	We	believe	that	adequate	provisions	have	been	made	for	income	taxes	for	all	periods	through	December	31,	2005.

Depending	on	the	resolution	of	the	Verestar	bankruptcy	proceedings	described	in	notes	3	and	9	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.

•	 Purchase	Price	Allocation.	We	account	for	our	acquisitions	under	the	purchase	method	of	accounting	in	accordance	with	SFAS	No.	141	"Business	Combinations" (SFAS	No.	141),	which	provides	that	purchase	prices	be	allocated	to	the	net	assets	acquired	and	the	liabilities	assumed	based	on	their	estimated	fair	values	at	the date	of	acquisition.	In	the	case	of	tower	assets	acquired	through	the	purchase	of	a	business,	such	as	our	merger	with	SpectraSite,	Inc.,	we	allocate	the	purchase price	to	the	assets	acquired	and	liabilities	assumed	at	their	estimated	fair	values	as	of	the	date	of	acquisition,	and	the	excess	of	the	purchase	price	paid	over	the estimated	fair	value	of	net	assets	acquired	is	recorded	as	residual	goodwill.	We	completed	our	merger	with	SpectraSite,	Inc.	in	August	2005	for	a	total	preliminary purchase	price	of	approximately	$3.1	billion,	including	the	fair	value	of	shares	of	Class	A	common	stock	issued,	the	fair	value	of	options	and	warrants	assumed and	estimated	transaction	costs.	We	are	in	the	process	of	finalizing	a	third-party	valuation	of	SpectraSite's	property	and	equipment,	intangible	assets	and	certain other	assets	and	liabilities.	Given	the	size	of	the	SpectraSite	transaction,	the	values	of	certain	assets	and	liabilities	are	based	on	preliminary	valuations	and	are subject	to	adjustment	as	additional	information	on	management's	estimates	and	assumptions	is	obtained	and	the	third-party	valuation	is	finalized.	The	primary areas	of	the	purchase	price	allocation	that	are	not	yet	finalized	relate	to	the	fair	values	of	property	and	equipment,	intangibles,	restructuring	and	merger	related liabilities,	other	assumed	liabilities,	deferred	income	taxes	and	residual	goodwill	of	approximately	$1.5	billion.	Changes	to	the	valuation	of	these	items	may	result in	adjustments	to	the	overall	purchase	price	allocation	of	these	items	and	the	related	depreciation	and	amortization.

•	 Asset	Retirement	Obligations.	We	comply	with	the	provisions	of	SFAS	No.	143,	"Accounting	for	Asset	Retirement	Obligations"	(SFAS	No.	143)	and	the provisions	of	FIN	No.	47.	Both	pronouncements	address	the	financial	accounting	and	reporting	requirements	for	conditional	obligations	associated	with	our	legal obligation	to	retire	tangible	long-lived	assets	and	the	related	asset	retirement	costs,	principally	obligations	to	remediate	leased	land	on	which	certain	of	our	tower assets	are	located.	Under	these	accounting	principles,	we	recognize	asset	retirement	obligations	in	the	period	in	which	they	are	incurred,	if	a	reasonable	estimate of	a	fair	value	can	be	made,	and	we	accrete	such	liability	through	the	obligation's	estimated	settlement	date.	The	associated	retirement	costs	are	capitalized	as	part of	the	carrying	amount	of	the	related	tower	fixed	assets	and	depreciated	over	their	estimated	useful	life.

As	of	December	31,	2005,	we	adopted	the	provisions	of	FIN	No.	47	and	recognized	a	$35.5	million	charge	(net	of	an	$11.7	million	tax	benefit)	as	a cumulative	effect	of	a	change	in	accounting	principle	in	the	consolidated	statement	of	operations	for	the	year	ended	December	31,	2005.	This	adoption	also increased	our	aggregate	asset	retirement	obligation	by	approximately	$114.0	million	to	$164.2	million	as	of	December	31,	2005	and	resulted	in	an	increase	to tower	assets	included	in	property	and	equipment,	net	of	$66.9	million.	The	adoption	of	FIN	No.	47	primarily	resulted	in	the	acceleration	of	our	settlement	date assumptions,	as	FIN	No.	47	precludes	us	from	considering	non	contractual	lease	renewal	periods	in

determining	our	settlement	date	assumptions.	Fair	value	estimates	of	liabilities	for	asset	retirement	obligations	generally	involve	discounted	future	cash	flows, and	periodic	accretion	of	such	liabilities	due	to	the	passage	of	time	is	recorded	as	an	operating	expense.	The	significant	assumptions	used	in	estimating	the Company's	aggregate	asset	retirement	obligation	are:	timing	of	tower	removals;	cost	of	tower	removals;	timing	and	number	of	land	lease	renewals;	expected inflation	rates;	and	credit-adjusted	risk-free	interest	rates	that	approximate	our	incremental	borrowing	rate.	While	we	feel	the	assumptions	are	appropriate,	there can	be	no	assurances	that	actual	costs	and	the	probability	of	incurring	obligations	will	not	differ	from	these	estimates.	We	will	continue	to	review	these assumptions	periodically	and	we	may	need	to	adjust	them	as	necessary.

# •Impairment	of	Assets.

Assets	Subject	to	Depreciation	and	Amortization	and	Non-Core	Long-Lived	Assets	Held	for	Sale:	We	review	long-lived	assets,	including	intangibles,	for impairment	whenever	events,	changes	in	circumstances	or	our	review	of	our	tower	portfolio	indicate	that	the	carrying	amount	of	an	asset	may	not	be	recoverable. Our	tower	portfolio	review	includes	sites	for	which	we	have	no	current	tenant	leases.	We	assess	recoverability	by	determining	whether	the	net	book	value	of	the related	assets	will	be	recovered	through	projected	undiscounted	cash	flows,	as	well	as	through	other	analytical	methods.	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:	We	perform	our	annual	goodwill	impairment	test	on	December	1	of	each	year	and	when	events	or circumstances	indicate	that	the	asset	might	be	impaired.	In	December	2005,	2004	and	2003,	we	completed	our	annual	impairment	testing	related	to	the	goodwill of	our	rental	and	management	segment	and	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	2005	annual	impairment	testing	included	$1.5	billion	of goodwill	acquired	in	our	merger	with	SpectraSite,	Inc.

•	 Revenue	Recognition.	Rental	and	management	revenues	are	recognized	on	a	monthly	basis	under	lease	or	management	agreements	when	earned,	regardless	of whether	the	payments	from	the	customer	are	received	in	equal	monthly	amounts.	Fixed	escalation	clauses	present	in	non-cancelable	lease	agreements,	excluding those	tied	to	the	Consumer	Price	Index	(CPI)	or	other	inflation-based	indices,	and	other	incentives	present	in	lease	agreements	with	our	customers	are	recognized on	a	straight-line	basis	over	the	terms	of	the	applicable	leases.	Straight-line	revenues	for	the	years	ended	December	31,	2005,	2004	and	2003	approximated	$30.3 million,	$24.8	million	and	$22.9	million	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	consolidated	balance	sheets	until	such	time	as	the	earnings	process	is	complete.

# Recent	Accounting	Pronouncements

In	December	2004,	the	FASB	issued	SFAS	No.	123	(revised	2004),	"Share-Based	Payment"	(SFAS	123R).	SFAS	123R	revises	SFAS	No.	123	"Accounting	for	Stock- Based	Compensation"	(SFAS	123),	supersedes	Accounting	Principles	Board	(APB)	Opinion	No.	25,	"Accounting	for	Stock	Issued	to	Employees,"	(APB	No.	25)	and	amends SFAS	No.	95,	"Statement	of	Cash	Flows."	This	statement	addressed	the	accounting	for	share-based	payments	to	employees,	including	grants	of	employee	stock	options. Under	the	new	standard,	companies	will	no	longer	be	able	to	account	for	share-based	compensation	transactions	using	the	intrinsic	method	in	accordance 43

with	APB	No.	25.	Instead,	companies	will	be	required	to	account	for	such	transactions	using	a	fair-value	method	and	recognize	the	related	expense	associated	with	share- based	payments	in	the	statement	of	operations.	SFAS	123R	is	effective	for	us	as	of	January	1,	2006.	We	have	historically	accounted	for	share-based	payments	to	employees under	APB	No.	25's	intrinsic	value	method.	As	such,	we	generally	have	not	recognized	compensation	expense	for	options	granted	to	employees.	We	will	adopt	the	provisions of	SFAS	123R	under	the	modified	prospective	method,	in	which	compensation	cost	for	all	share-based	payments	granted	or	modified	after	the	effective	date	is	recognized based	upon	the	requirements	of	SFAS	123R,	and	compensation	cost	for	all	awards	granted	to	employees	prior	to	the	effective	date	that	are	unvested	as	of	the	effective	date	of SFAS	123R	is	recognized	based	on	SFAS	123.	Tax	benefits	will	be	recognized	related	to	the	cost	for	share-based	payments	to	the	extent	the	equity	instrument	would ordinarily	result	in	a	future	tax	deduction	under	existing	law.	Tax	expense	will	be	recognized	to	write	off	excess	deferred	tax	assets	when	the	tax	deduction	upon	settlement	of a	vested	option	is	less	than	the	expense	recorded	in	the	statement	of	operations	(to	the	extent	not	offset	by	prior	tax	credits	for	settlements	where	the	tax	deduction	was	greater than	the	fair	value	cost).	We	estimate	that	we	will	recognize	equity-based	compensation	expense	of	approximately	$35	million	to	$38	million	for	the	year	ending December	31,	2006.	This	amount	is	subject	to	revisions	as	we	finalize	certain	assumptions	related	to	2006,	including	the	size	and	nature	of	awards	and	forfeiture	rates.	SFAS 123R	also	requires	the	benefits	of	tax	deductions	in	excess	of	recognized	compensation	cost	be	reported	as	a	financing	cash	flow	rather	than	as	operating	cash	flow	as	was previously	required.	We	cannot	estimate	what	the	future	tax	benefits	will	be	as	the	amounts	depend	on,	among	other	factors,	future	employee	stock	option	exercises.	Due	to the	our	tax	loss	position,	there	was	no	operating	cash	inflow	realized	for	December	31,	2005	and	2004	for	such	excess	tax	deductions.

In	March	2005,	the	SEC	issued	Staff	Accounting	Bulletin	(SAB)	No.	107	regarding	the	Staff's	interpretation	of	SFAS	123R.	This	interpretation	provides	the	Staff's views	regarding	interactions	between	SFAS	123R	and	certain	SEC	rules	and	regulations	and	provides	interpretations	of	the	valuation	of	share-based	payments	for	public companies.	The	interpretive	guidance	is	intended	to	assist	companies	in	applying	the	provisions	of	SFAS	123R	and	investors	and	users	of	the	financial	statements	in	analyzing the	information	provided.	We	will	follow	the	guidance	prescribed	in	SAB	No.	107	in	connection	with	our	adoption	of	SFAS	123R.

# Information	Presented	Pursuant	to	the	Indentures	of	our	7.50%	Notes,	7.125%	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	7.50% Notes,	7.125%	Notes	and	ATI	7.25%	Notes.	The	information	contained	in	note	19	to	our	consolidated	financial	statements	is	also	presented	to	address	certain	reporting requirements	contained	in	the	indenture	for	our	ATI	7.25%	Notes.

The	following	table	presents	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	the	applicable	notes	(in	thousands):

| Consolidated	Cash	Flow,	for	the	twelve	months	ended	December	31,	2005<br>Less:	Tower	Cash	Flow,	for	the	twelve	months	ended	December	31,	2005<br>Plus:	four	times	Tower	Cash	Flow,	for	the	three	months	ended	December	31,	2005 | $498,266<br>(524,804)<br>558,360 |
| :--- | :--- |
| Adjusted\tConsolidated\tCash\tFlow,\tfor\tthe\ttwelve\tmonths\tended\tDecember\t31,\t2005 | $531,822 |
| Non-Tower\tCash\tFlow,\tfor\tthe\ttwelve\tmonths\tended\tDecember\t31,\t2005 | $(30,584) |

# 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	swaps	and	caps.	All	derivative	financial	instruments	were	entered	into	for	purposes	other	than	trading.	During	the	year	ended	December	31, 2005,	we	repurchased,	redeemed	and	converted	$605.7	million	face	amount	of	outstanding	debt	securities	for	$501.7	million	in	cash,	including	the	repurchase	of	$270.6 million	face	amount	($177.8	million	accreted	value)	of	ATI	12.25%	Notes,	the	redemption	of	$274.9	million	principal	amount	of	9	3/8%	Notes	and	the	conversion	of	$57.1 million	principal	amount	of	3.25%	Notes.	In	connection	with	our	merger	with	SpectraSite,	Inc.	we	also	assumed	$702.5	million	of	debt	at	fair	value	consisting	primarily	of borrowings	outstanding	under	the	previous	SpectraSite	credit	facility.

The	following	tables	provide	information	as	of	December	31,	2005	and	2004	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	and	swaps,	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,	except	percentages)

| Long-Term	Debt | 2006 | 2007 | 2008 | 2009 | 2010 | Thereafter | Total | Fair	Value |
| :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- |
| Fixed\tRate\tDebt(a) | $229,570 | $276,967 | $873 | $521 | $153,458 | $1,525,291 | $2,186,680 | $2,525,886 |
| Average\tInterest\tRate(a) | 6.64% | 6.89% | 6.94% | 6.04% | 6.08% | 6.20% |  |  |
| Variable\tRate\tDebt(a) |  |  |  |  | $1,493,000 |  | $1,493,000 | $1,494,813 |

Average	Interest	Rate(a)

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

# As	of	December	31,	2005	and	Interest	Rate	Detail	by	Contractual	Maturity	Dates (In	thousands,	except	percentages)

# Principal	Payments	and	Interest	Rate	Detail	by	Contractual	Maturity	Dates (In	thousands,	except	percentages)

| Long-Term	Debt | 2005 | 2006 | 2007 | 2008 | 2009 | Thereafter | Total | Fair	Value |
| :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- |
| Fixed\tRate\tDebt(a) | $134,386 | $15,999 | $275,742 | $497,849 | $141,402 | $1,723,477 | $2,788,855 | $2,907,189 |
| Average\tInterest\tRate(a) | 7.23% | 7.39% | 7.78% | 7.35% | 5.92% | 6.09% |  |  |
| Variable\tRate\tDebt(a) | $4,000 | $26,500 | $56,500 | $64,000 | $64,000 | $483,000 | $698,000 | $704,228 |

# Aggregate	Notional	Amounts	Associated	with	Interest	Rate	Caps	in	Place

# As	of	December	31,	2004	and	Interest	Rate	Detail	by	Contractual	Maturity	Dates

| Interest	Rate	CAPS | 2005 | 2006 |
| :--- | :--- | :--- |
| Notional\tAmount(d) | $350,000 | $350,000 |
| Cap\tRate(e) | 6.00% | 6.00% |

(a) As	of	December	31,	2005,	variable	rate	debt	consists	of	the	new	American	Tower	and	SpectraSite	credit	facilities	($1,493.0	million)	that	were	refinanced	on	October	27,	2005,	which	are	included	above	based	on	their October	27,	2010	maturity	dates.	As	of	December	31,	2005,	fixed	rate	debt	consists	of:	the	2.25%	convertible	notes	due	2009	(2.25%	Notes)	($0.1	million);	the	7.125%	Notes	($500.0	million	principal	amount	due	at maturity;	the	balance	as	of	December	31,	2005	is	$501.9	million);	the	5.0%	Notes	($275.7	million);	the	3.25%	Notes	($152.9	million);	the	7.50%	Notes	($225.0	million);	the	ATI	7.25%	Notes	($400.0	million);	the	ATI 12.25%	Notes	($227.7	million	principal	amount	due	at	maturity;	the	balance	as	of	December	31,	2005	is	$160.3	million	accreted	value,	net	of	the	allocated	fair	value	of	the	related	warrants	of	$7.2	million);	the	3.00% Notes	($345.0	million	principal	amount	due	at	maturity;	the	balance	as	of	December	31,	2005	is	$344.4	million	accreted	value)	and	other	debt	of	$60.4	million.	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,	2005	for	our	credit	facilities	was	4.71%.	For	the	year	ended	December	31,	2005,	the	weighted	average	interest	rate	under	our	credit	facilities	was	5.03%.

As	of	December	31,	2004,	variable	rate	debt	consists	of	our	previous	credit	facility	($698.0	million)	and	fixed	rate	debt	consists	of:	the	2.25%	Notes	($0.1	million);	the	7.125%	Notes	($500.0	million	principal	amount	due at	maturity;	the	balance	as	of	December	31,	2004	is	$501.9	million);	the	5.0%	Notes	($275.7	million);	the	3.25%	Notes	($210.0	million);	the	7.50%	Notes	($225.0	million);	the	ATI	7.25%	Notes	($400.0	million);	the	ATI 12.25%	Notes	($498.3	million	principal	amount	due	at	maturity;	the	balance	as	of	December	31,	2004	is	$303.8	million	accreted	value,	net	of	the	allocated	fair	value	of	the	related	warrants	of	$21.6	million);	the	9^	3 /8% Notes	($274.9	million);	the	3.00%	Notes	($345.0	million	principal	amount	due	at	maturity;	the	balance	as	of	December	31,	2004	is	$344.3	million	accreted	value)	and	other	debt	of	$60.0	million.	Interest	on	the	credit facility	was	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,	2004	for	the	credit	facility	was	4.35%.	For	the	year	ended	December	31,	2004,	the	weighted	average	interest	rate	under	the	credit	facility	was	3.81%.

(c) Includes	notional	amount	of	$25,000	that	expires	in	September	2007.

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

(i) Includes	notional	amount	of	$50,000	that	expires	in	October	2010.

Our	foreign	operations	include	rental	and	management	segment	divisions	in	Mexico	and	Brazil.	The	remeasurement	gain	for	the	year	ended	December	31,	2005	was $396,000,	and	the	remeasurement	losses	for	the	years	ended	December	31,	2004,	and	2003	approximated	$146,000,	and	$1,142,000,	respectively.

Changes	in	interest	rates	can	cause	interest	charges	to	fluctuate	on	our	variable	rate	debt,	comprised	of	$1,493.0	million	under	our	credit	facilities	as	of	December	31, 2005.	A	10%	increase,	or	approximately	47	basis	points,	in	current	interest	rates	would	have	caused	an	additional	pre-tax	charge	our	net	loss	and	an	increase	in	our	cash outflows	of	$7.0	million	for	the	year	ended	December	31,	2005.

# ITEM	8.				FINANCIAL	STATEMENTS	AND	SUPPLEMENTARY	DATA

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

# ITEM	9A.				CONTROLS	AND	PROCEDURES

# Disclosure	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.

Our	management,	with	the	participation	of	our	principal	executive	officer	and	principal	financial	officer,	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.

# Management's	Annual	Report	on	Internal	Control	over	Financial	Reporting

Our	management,	with	the	participation	of	our	principal	executive	officer	and	principal	financial	officer,	is	responsible	for	establishing	and	maintaining	adequate 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.	Our	internal	control	system	is designed	to	provide	reasonable	assurance	to	our	management	and	Board	of	Directors	regarding	the	preparation	and	fair	presentation	of	published	financial	statements.

Our	management	assessed	the	effectiveness	of	our	internal	control	over	financial	reporting	as	of	December	31,	2005.	As	discussed	in	Item	1	of	this	annual	report	under the	caption	"Business"	and	in	note	2	to	our	consolidated	financial	statements	included	in	this	annual	report,	we	completed	our	merger	with	SpectraSite,	Inc.	in	August	2005. As	permitted	by	the	rules	and	regulations	of	the	SEC,	we	excluded	SpectraSite	from	our	assessment	of	our	internal	control	over	financial	reporting	as	of	December	31,	2005. The	total	assets	and	revenues	of	SpectraSite	included	in	our	consolidated	financial	statements	were	approximately	14%	and	18%,	respectively,	as	of	and	for	the	year	ended December	31,	2005.

In	making	its	assessment	of	internal	control	over	financial	reporting,	our	management	used	the	criteria	set	forth	by	the	Committee	of	Sponsoring	Organizations	of	the Treadway	Commission	in	Internal	Control—Integrated	Framework.	Based	on	this	assessment,	management	concluded	that,	as	of	December	31,	2005,	our	internal	control over	financial	reporting	is	effective	based	on	those	criteria.

Deloitte	&	Touche	LLP,	an	independent	registered	public	accounting	firm	that	audited	our	financial	statements	included	in	this	annual	report,	has	issued	an	attestation report	on	management's	assessment	of	our	internal	control	over	financial	reporting.	Such	attestation,	which	expresses	unqualified	opinions	on	management's	assessment	and on	the	effectiveness	of	our	internal	control	over	financial	reporting	as	of	December	31,	2005,	is	included	in	this	Item	9A	under	the	caption	"Report	of	Independent	Registered Public	Accounting	Firm."

# Changes	in	Internal	Control	over	Financial	Reporting

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	the	fiscal	quarter	ended	December	31,	2005	that	has	materially	affected,	or	is reasonably	likely	to	materially	affect,	our	internal	control	over	financial	reporting.	As	set	forth	above,	we	excluded	SpectraSite	from	our	assessment	of	our	internal	control over	financial	reporting	for	the	quarter	and	year	ended	December	31,	2005.	We	consider	the	merger	with	SpectraSite	material	to	our	results	of	operations,	financial	position and	cash	flows,	and	we	are	in	the	process	of	integrating	the	internal	control	procedures	of	SpectraSite	into	our	internal	control	structure.

# Report	of	Independent	Registered	Public	Accounting	Firm

# To	the	Board	of	Directors	and	Stockholders	of

# Boston,	Massachusetts

We	have	audited	management's	assessment,	included	in	the	accompanying	Management's	Annual	Report	on	Internal	Control	over	Financial	Reporting,	that	American Tower	Corporation	and	subsidiaries	(the	"Company")	maintained	effective	internal	control	over	financial	reporting	as	of	December	31,	2005	based	on	criteria	established	in Internal	Control—Integrated	Framework	issued	by	the	Committee	of	Sponsoring	Organizations	of	the	Treadway	Commission.	As	described	in	Management's	Annual	Report on	Internal	Control	over	Financial	Reporting,	management	excluded	from	their	assessment	the	internal	control	over	financial	reporting	at	SpectraSite,	Inc.	which	was acquired	on	August	8,	2005	and	whose	financial	statements	reflect	total	assets	and	revenues	constituting	14%	and	18%,	respectively,	of	the	related	consolidated	financial statement	amounts	as	of	and	for	the	year	ended	December	31,	2005.	Accordingly,	our	audit	did	not	include	the	internal	control	over	financial	reporting	at	SpectraSite,	Inc. The	Company's	management	is	responsible	for	maintaining	effective	internal	control	over	financial	reporting	and	for	its	assessment	of	the	effectiveness	of	internal	control over	financial	reporting.	Our	responsibility	is	to	express	an	opinion	on	management's	assessment	and	an	opinion	on	the	effectiveness	of	the	Company's	internal	control	over financial	reporting	based	on	our	audit.

We	conducted	our	audit	in	accordance	with	the	standards	of	the	Public	Company	Accounting	Oversight	Board	(United	States).	Those	standards	require	that	we	plan and	perform	the	audit	to	obtain	reasonable	assurance	about	whether	effective	internal	control	over	financial	reporting	was	maintained	in	all	material	respects.	Our	audit included	obtaining	an	understanding	of	internal	control	over	financial	reporting,	evaluating	management's	assessment,	testing	and	evaluating	the	design	and	operating effectiveness	of	internal	control,	and	performing	such	other	procedures	as	we	considered	necessary	in	the	circumstances.	We	believe	that	our	audit	provides	a	reasonable	basis for	our	opinions.

A	company's	internal	control	over	financial	reporting	is	a	process	designed	by,	or	under	the	supervision	of,	the	company's	principal	executive	and	principal	financial officers,	or	persons	performing	similar	functions,	and	effected	by	the	company's	board	of	directors,	management,	and	other	personnel	to	provide	reasonable	assurance regarding	the	reliability	of	financial	reporting	and	the	preparation	of	financial	statements	for	external	purposes	in	accordance	with	generally	accepted	accounting	principles.	A company's	internal	control	over	financial	reporting	includes	those	policies	and	procedures	that	(1)	pertain	to	the	maintenance	of	records	that,	in	reasonable	detail,	accurately and	fairly	reflect	the	transactions	and	dispositions	of	the	assets	of	the	company;	(2)	provide	reasonable	assurance	that	transactions	are	recorded	as	necessary	to	permit preparation	of	financial	statements	in	accordance	with	generally	accepted	accounting	principles,	and	that	receipts	and	expenditures	of	the	company	are	being	made	only	in accordance	with	authorizations	of	management	and	directors	of	the	company;	and	(3)	provide	reasonable	assurance	regarding	prevention	or	timely	detection	of	unauthorized acquisition,	use,	or	disposition	of	the	company's	assets	that	could	have	a	material	effect	on	the	financial	statements.

Because	of	the	inherent	limitations	of	internal	control	over	financial	reporting,	including	the	possibility	of	collusion	or	improper	management	override	of	controls, material	misstatements	due	to	error	or	fraud	may	not	be	prevented	or	detected	on	a	timely	basis.	Also,	projections	of	any	evaluation	of	the	effectiveness	of	the	internal	control over	financial	reporting	to	future	periods	are	subject	to	the	risk	that	the	controls	may	become	inadequate	because	of	changes	in	conditions,	or	that	the	degree	of	compliance with	the	policies	or	procedures	may	deteriorate.

In	our	opinion,	management's	assessment	that	the	Company	maintained	effective	internal	control	over	financial	reporting	as	of	December	31,	2005,	is	fairly	stated,	in all	material	respects,	based	on	the	criteria	established	in	Internal	Control—Integrated	Framework	issued	by	the	Committee	of	Sponsoring	Organizations	of	the	Treadway Commission.	Also	in	our	opinion,	the	Company	maintained,	in	all	material	respects,	effective	internal	control	over	financial	reporting	as	of	December	31,	2005,	based	on	the criteria	established	in	Internal	Control—Integrated	Framework	issued	by	the	Committee	of	Sponsoring	Organizations	of	the	Treadway	Commission.

We	have	also	audited,	in	accordance	with	the	standards	of	the	Public	Company	Accounting	Oversight	Board	(United	States),	the	consolidated	financial	statements	as	of and	for	the	year	ended	December	31,	2005,	of	the	Company	and	our	report	dated	March	14,	2006	expressed	an	unqualified	opinion	on	those	financial	statements	and	includes an	explanatory	paragraph	relating	to	the	Company's	adoption	of	FASB	Interpretation	No.	47	"Accounting	for	Conditional	Asset	Retirement	Obligations—an	interpretation	of FASB	Statement	No.	143"	effective	December	31,	2005.

# /S/	DELOITTE	&	TOUCHE	LLP

Boston,	Massachusetts March	14,	2006

# ITEM	9B. 	 OTHER	INFORMATION

# Unregistered	Sales	of	Equity	Securities

During	the	period	January	1,	2006	through	March	9,	2006,	we	issued	an	aggregate	of	60,355	shares	of	our	Class	A	common	stock	upon	the	exercise	of	8,466	warrants assumed	in	our	merger	with	SpectraSite,	Inc.	In	August	2005,	in	connection	with	our	merger	with	SpectraSite,	Inc.,	we	assumed	approximately	1.0	million	warrants	to purchase	shares	of	SpectraSite,	Inc.	common	stock.	Upon	completion	of	the	merger,	each	warrant	to	purchase	shares	of	SpectraSite,	Inc.	common	stock	automatically converted	into	a	warrant	to	purchase	7.15	shares	of	Class	A	common	stock	at	an	exercise	price	of	$32	per	warrant.	Net	proceeds	from	these	warrant	exercises	were approximately	$266,000.	The	shares	were	issued	to	warrantholders	in	reliance	on	the	exemption	from	registration	set	forth	in	Section	3(a)(9)	of	the	Securities	Act	of	1933,	as amended.	No	underwriters	were	engaged	in	connection	with	such	issuances.

During	the	period	January	1,	2006	through	March	9,	2006,	we	issued	an	aggregate	of	9,659,082	shares	of	our	Class	A	common	stock	upon	the	exercise	of	685,404 warrants.	The	warrants	were	originally	issued	in	January	2003	as	part	of	an	offering	of	808,000	units,	each	consisting	of	(1)	$1,000	principal	amount	at	maturity	of	ATI 12.25%	Notes	and	(2)	a	warrant	to	purchase	14.0953	shares	of	our	Class	A	common	stock.	The	warrants	are	exercisable	on	or	after	January	29,	2006	at	an	exercise	price	of $0.01	per	share	and	will	expire	on	August	1,	2008.	As	many	of	these	warrants	were	exercised	pursuant	to	a	cashless	net	exercise	pursuant	to	the	warrant	agreement,	net proceeds	from	these	warrant	exercises	were	approximately	$44,000.	The	shares	were	issued	to	warrantholders	pursuant	to	an	effective	registration	statement	or	in	reliance	on the	exemption	from	registration	set	forth	in	Section	3(a)(9)	of	the	Securities	Act	of	1933,	as	amended.	No	underwriters	were	engaged	in	connection	with	such	issuance.

During	the	period	January	1,	2006	through	March	9,	2006,	we	issued	an	aggregate	of	1,840,025	shares	of	our	Class	A	common	stock	upon	conversion	of	$22.5	million principal	amount	of	our	3.25%	Notes.	Pursuant	to	the	terms	of	the	indenture,	the	holders	of	the	3.25%	Notes	received	81.808	shares	of	Class	A	common	stock	for	every $1,000	principal	amount	of	notes	converted.	The	shares	were	issued	to	the	noteholders	in	reliance	on	the	exemption	from	registration	set	forth	in	Section	3(a)(9)	of	the Securities	Act	of	1933,	as	amended.	No	underwriters	were	engaged	in	connection	with	such	issuances.	In	connection	with	the	conversion,	we	paid	such	holders	an	aggregate of	$1.7	million,	calculated	based	on	the	accrued	and	unpaid	interest	on	the	notes	and	the	discounted	value	of	the	future	interest	payments	on	the	notes.

# PART	III

# ITEM	10.				DIRECTORS	AND	EXECUTIVE	OFFICERS	OF	THE	REGISTRANT

Our	executive	officers	and	their	respective	ages	and	positions	as	of	March	9,	2006	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	and was	named	our	Chief	Executive	Officer	in	October	2003.	Mr.	Taiclet	was	elected	to	our	Board	of	Directors	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.	From	March	1996	until March	1999,	Mr.	Taiclet	served	as	Vice	President,	Engine	Services	at	Pratt	&	Whitney,	a	unit	of	United	Technologies	Corporation.	Mr.	Taiclet	was	also	previously	a consultant	at	McKinsey	&	Company,	specializing	in	telecommunications	and	aerospace.	Mr.	Taiclet	received	a	Masters	in	Public	Affairs	from	Princeton	University,	where	he was	a	Wilson	Fellow,	and	is	a	distinguished	graduate	of	the	United	States	Air	Force	Academy.

J.	Michael	Gearon,	Jr.	is	our	Vice	Chairman	and	President,	American	Tower	International.	Mr.	Gearon	also	served	on	our	Board	of	Directors	from	January	1998 until	May	2003.	Mr.	Gearon	joined	us	in	January	1998	as	an	Executive	Vice	President	and	was	appointed	to	his	current	position	in	January	2002.	Prior	to	joining	us,	since September	1991,	Mr.	Gearon	had	been	the	founder	and	Chief	Executive	Officer	of	Gearon	Communications,	a	company	we	acquired	in	January	1998.	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.	Mr.	Singer	was	appointed	Executive	Vice	President, Finance	in	July	2001	and	was	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.	Mr.	Moskowitz	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,	General	Manager	of	Eastman	Radio	Sales,	since	1992.	From	1985	to	1992,	Mr.	Moskowitz	held	various Vice	President	positions	at	Katz	Media	Corporation,	the	leading	broadcast	media	representation	firm	in	the	United	States.	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	March	2001	as	Chief	Financial	Officer	of	American	Tower	International and	was	appointed	Executive	Vice	President	in	June	2001.	Mr.	Hess	was	appointed	to	his	current	position	in	September	2002.	Prior	to	joining	us,	Mr.	Hess	had	been	a	partner in	the	corporate	and	finance	practice	group	of	the	law	firm	of	King	&	Spalding	LLP,	which	he	joined	in	1990.	Prior	to	attending	law	school,	Mr.	Hess	practiced	as	a	Certified Public	Accountant	with	Arthur	Young	&	Co.	Mr.	Hess	received	his	J.D.	degree	from	Vanderbilt	University	Law	School	and	is	a	graduate	of	Harding	University.

Jean	A.	Bua	is	our	Senior	Vice	President,	Finance	and	Corporate	Controller.	Ms.	Bua	joined	us	in	August	2005.	Prior	to	joining	us,	since	1996,	Ms.	Bua	was	with	Iron Mountain,	Inc.,	a	global	records	management	and	data	protection	services	company,	where	she	most	recently	served	as	Senior	Vice	President,	Chief	Accounting	Officer	and Worldwide	Controller.	From	1993	to	1996,	Ms.	Bua	was	Corporate	Controller	for	Duracraft	Corporation,	an	international	consumer	products	manufacturer.	Prior	to	joining Duracraft,	Ms.	Bua	was	Assistant	Controller	for	Keithley	Instruments,	a	high-tech	hardware	and	software	company,	from	1991	to	1993.	Ms.	Bua	was	also	previously	a management	consultant	for	Ernst	&	Young	and	an	auditor	for	KPMG.	Ms.	Bua	is	a	Certified	Public	Accountant	and	holds	an	M.B.A.	degree	from	the	University	of	Rhode Island.

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	under	the	caption	"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	ACCOUNTING	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	AND	FINANCIAL	STATEMENT	SCHEDULES

(a)	The	following	documents	are	filed	as	a	part	of	this	report:

1.	Financial	Statements.	See	Index	to	Consolidated	Financial	Statements,	which	appears	on	page	F-1	hereof.	The	financial	statements	listed	in	the accompanying	Index	to	Consolidated	Financial	Statements	are	filed	herewith	in	response	to	this	Item.

2.	Financial	Statement	Schedules.	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.

3.	Exhibits.	See	Index	to	Exhibits.	The	exhibits	listed	in	the	Index	to	Exhibits	immediately	preceding	the	exhibits	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	14th	day	of	March,	2006.

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

We	have	audited	the	accompanying	consolidated	balance	sheets	of	American	Tower	Corporation	and	subsidiaries	(the	"Company")	as	of	December	31,	2005	and 2004,	and	the	related	consolidated	statements	of	operations,	stockholders'	equity,	and	cash	flows	for	each	of	the	three	years	in	the	period	ended	December	31,	2005.	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	the	standards	of	the	Public	Company	Accounting	Oversight	Board	(United	States).	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,	2005	and	2004, and	the	results	of	its	operations	and	its	cash	flows	for	each	of	the	three	years	in	the	period	ended	December	31,	2005,	in	conformity	with	accounting	principles	generally accepted	in	the	United	States	of	America.

As	discussed	in	note	1	to	the	accompanying	consolidated	financial	statements,	in	2005	the	Company	adopted	the	provisions	of	Financial	Accounting	Standards	Board (FASB)	Interpretation	No.	47,	"Accounting	for	Conditional	Asset	Retirement	Obligations—an	interpretation	of	FASB	Statement	No.	143,"	effective	December	31,	2005.

We	have	also	audited,	in	accordance	with	the	standards	of	the	Public	Company	Accounting	Oversight	Board	(United	States),	the	effectiveness	of	the	Company's internal	control	over	financial	reporting	as	of	December	31,	2005,	based	on	the	criteria	established	in	Internal	Control—Integrated	Framework	issued	by	the	Committee	of Sponsoring	Organizations	of	the	Treadway	Commission	and	our	report	dated	March	14,	2006	expressed	an	unqualified	opinion	on	management's	assessment	of	the effectiveness	of	the	Company's	internal	control	over	financial	reporting	and	an	unqualified	opinion	on	the	effectiveness	of	the	Company's	internal	control	over	financial reporting.

# AMERICAN	TOWER	CORPORATION	AND	SUBSIDIARIES

# CONSOLIDATED	BALANCE	SHEETS

# (In	thousands,	except	share	data)

|  | 2005 | 2004 |
| :--- | :--- | :--- |
| ASSETS |  |  |
| CURRENT\tASSETS: |  |  |
| Cash\tand\tcash\tequivalents | $112,701 | $215,557 |
| Accounts\treceivable,\tnet\tof\tallowances | 36,995 | 38,634 |
| Prepaid\tand\tother\tcurrent\tassets | 44,823 | 45,367 |
| Deferred\tincome\ttaxes | 31,359 | 6,090 |
| Assets\theld\tfor\tsale |  | 3,389 |
| Total\tcurrent\tassets | 225,878 | 309,037 |
| PROPERTY\tAND\tEQUIPMENT,\tnet | 3,460,526 | 2,273,356 |
| GOODWILL | 2,142,551 | 592,683 |
| OTHER\tINTANGIBLE\tASSETS,\tnet | 2,077,312 | 985,303 |
| DEFERRED\tINCOME\tTAXES | 504,659 | 633,814 |
| NOTES\tRECEIVABLE\tAND\tOTHER\tLONG-TERM\tASSETS | 357,294 | 291,779 |
| TOTAL | $8,768,220 | $5,085,972 |
| LIABILITIES\tAND\tSTOCKHOLDERS'\tEQUITY |  |  |
| CURRENT\tLIABILITIES: |  |  |
| Accounts\tpayable\tand\taccrued\texpenses | $175,558 | $121,672 |
| Accrued\tinterest | 37,850 | 39,466 |
| Current\tportion\tof\tlong-term\tobligations | 162,153 | 138,386 |
| Unearned\trevenue | 77,655 | 32,681 |
| Total\tcurrent\tliabilities | 453,216 | 332,205 |
| LONG-TERM\tOBLIGATIONS | 3,451,276 | 3,155,228 |
| OTHER\tLONG-TERM\tLIABILITIES | 327,354 | 121,505 |
| Total\tliabilities | 4,231,846 | 3,608,938 |
| COMMITMENTS\tAND\tCONTINGENCIES |  |  |
| MINORITY\tINTEREST\tIN\tSUBSIDIARIES | 9,794 | 6,081 |
| STOCKHOLDERS'\tEQUITY: |  |  |
| issued,\tand\t412,654,855\tand\t229,599,895\tshares\toutstanding,\trespectively | 4,156 | 2,297 |
| Additional\tpaid-in\tcapital | 7,317,668 | 4,012,425 |
| Accumulated\tdeficit | (2,710,993) | (2,539,403) |
| Unearned\tcompensation | (2,497) |  |
| Accumulated\tother\tcomprehensive\tloss | (803) |  |
| Treasury\tstock\t(2,981,740\tand\t145,221\tshares\tat\tcost) | (80,951) | (4,366) |
| Total\tstockholders'\tequity | 4,526,580 | 1,470,953 |
| TOTAL | $8,768,220 | $5,085,972 |

# CONSOLIDATED	STATEMENTS	OF	OPERATIONS

# (In	thousands,	except	per	share	data)

|  | 2005 | 2004 | 2003 |
| :--- | :--- | :--- | :--- |
| REVENUES: |  |  |  |
| Rental\tand\tmanagement | $929,762 | $684,422 | $619,697 |
| Network\tdevelopment\tservices | 15,024 | 22,238 | 12,796 |
| Total\toperating\trevenues | 944,786 | 706,660 | 632,493 |
| OPERATING\tEXPENSES: |  |  |  |
| Rental\tand\tmanagement | 306,148 | 237,312 | 236,680 |
| Network\tdevelopment\tservices | 11,981 | 18,801 | 9,493 |
| Depreciation,\tamortization\tand\taccretion | 411,254 | 329,449 | 330,414 |
| Corporate\tgeneral,\tadministrative\tand\tdevelopment\texpense | 37,977 | 27,468 | 26,867 |
| Impairments,\tnet\tloss\ton\tsale\tof\tlong-lived\tassets,\trestructuring\tand\tmerger\trelated\texpense | 34,232 | 23,876 | 31,656 |
| Total\toperating\texpenses | 801,592 | 636,906 | 635,110 |
| OPERATING\tINCOME\t(LOSS)\tFROM\tCONTINUING\tOPERATIONS | 143,194 | 69,754 | (2,617) |
| OTHER\tINCOME\t(EXPENSE): |  |  |  |
| Interest\tincome,\tTV\tAzteca,\tnet\tof\tinterest\texpense\tof\t$1,492,\t$1,497,\tand\t$1,496,\trespectively | 14,232 | 14,316 | 14,222 |
| Interest\tincome | 4,402 | 4,844 | 5,255 |
| Interest\texpense | (222,419) | (262,237) | (279,783) |
| Loss\ton\tretirement\tof\tlong-term\tobligations | (67,110) | (138,016) | (46,197) |
| Other\tincome\t(expense) | 227 | (2,798) | (8,598) |
| Total\tother\texpense | (270,668) | (383,891) | (315,101) |
| LOSS\tFROM\tCONTINUING\tOPERATIONS\tBEFORE\tINCOME\tTAXES,\tMINORITY\tINTEREST\tAND\tLOSS\tON |  |  |  |
| EQUITY\tMETHOD\tINVESTMENTS | (127,474) | (314,137) | (317,718) |
| Income\ttax\t(provision)\tbenefit | (4,003) | 80,176 | 77,796 |
| Minority\tinterest\tin\tnet\tearnings\tof\tsubsidiaries | (575) | (2,366) | (3,703) |
| Loss\ton\tequity\tmethod\tinvestments | (2,078) | (2,915) | (21,221) |
| LOSS\tFROM\tCONTINUING\tOPERATIONS\tBEFORE\tCUMULATIVE\tEFFECT\tOF\tCHANGE\tIN\tACCOUNTING |  |  |  |
| PRINCIPLE | (134,130) | (239,242) | (264,846) |
| LOSS\tFROM\tDISCONTINUED\tOPERATIONS,\tNET\tOF\tINCOME\tTAX\tBENEFIT\tOF\t$1,042,\t$4,438\tAND\t$11,747, |  |  |  |
| RESPECTIVELY | (1,935) | (8,345) | (60,475) |
| LOSS\tBEFORE\tCUMULATIVE\tEFFECT\tOF\tCHANGE\tIN\tACCOUNTING\tPRINCIPLE | (136,065) | (247,587) | (325,321) |
| CUMULATIVE\tEFFECT\tOF\tCHANGE\tIN\tACCOUNTING\tPRINCIPLE,\tNET\tOF\tINCOME\tTAX\tBENEFIT\tOF |  |  |  |
| $11,697 | (35,525) |  |  |
| NET\tLOSS | $(171,590) | $(247,587) | $(325,321) |
| BASIC\tAND\tDILUTED\tLOSS\tPER\tCOMMON\tSHARE\tAMOUNTS: |  |  |  |
| Loss\tfrom\tcontinuing\toperations | $(0.44) | $(1.07) | $(1.27) |
| Loss\tfrom\tdiscontinued\toperations | (0.01) | (0.03) | (0.29) |
| Cumulative\teffect\tof\tchange\tin\taccounting\tprinciple,\tnet | (0.12) |  |  |
| NET\tLOSS\tPER\tCOMMON\tSHARE | $(0.57) | $(1.10) | $(1.56) |
| WEIGHTED\tAVERAGE\tCOMMON\tSHARES\tOUTSTANDING | 302,510 | 224,336 | 208,098 |

# 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 | Unearned<br>Compensation | Accumulated<br>Other<br>Comprehensive<br>Loss | Accumulated<br>Deficit | Total<br>Stockholders'<br>Equity | Total<br>Comprehensive<br>Loss |
| :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- |
| BALANCE,\tJANUARY\t1,\n2003 | \t185,643,625\t$ | 1,856 | 7,917,070\t\t$ | 79 | 2,267,813\t\t$ | 23 | (144,597)\t$ | (4,340)\t$ | (6,720)\t$3,642,019 | (6,720)\t$3,642,019 |  | \t\t$(5,564)\t$ | (1,966,495)\t$ | 1,660,858 |  |
| Issuance\tof\tcommon\tstock |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
| -\tAugust\toffering | 14,260,000 | 143 |  |  |  |  |  |  |  | 120,200 |  |  |  | 120,343 |  |
| 2.25%\tconvertible\tnotes |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
| exchanged\tfor |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
| common\tstock | 8,415,984 | 84 |  |  |  |  |  |  |  | 86,045 |  |  |  | 86,129 |  |
| 12.25%\tSenior |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
| Subordinated\tNotes\t- |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
| Warrants |  |  |  |  |  |  |  |  |  | 52,525 |  |  |  | 52,525 |  |
| Issuance\tof\tcommon\tstock |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
| -\tEmployee\tStock |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
| Purchase\tPlan | 200,287 | 2 |  |  |  |  |  |  |  | 959 |  |  |  | 961 |  |
| Share\tClass\tExchanges | 1,990,440 | 20 | (947,541) | (9)\t(1,042,899) | (9)\t(1,042,899) | (11) |  |  |  |  |  |  |  |  |  |
| Stock\toption\tactivity | 1,345,322 | 14 |  |  |  |  |  |  |  | 7,859 |  |  |  | 7,873 |  |
| Treasury\tstock\tactivity |  |  |  |  |  |  | (624) | (26) |  |  |  |  |  | (26) |  |
| Net\tchange\tin\tfair\tvalue\tof |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
| cash\tflow\thedges,\tnet |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
| of\ttax |  |  |  |  |  |  |  |  |  |  |  | (329) |  | (329)\t$ | (329) |
| Reclassification |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
| adjustment\tfor\trealized |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
| losses\ton\tderivative |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
| instruments,\tnet\tof\ttax |  |  |  |  |  |  |  |  |  |  |  | 5,893 |  | 5,893 | 5,893 |
| Tax\tbenefit\tof\tstock |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
| options |  |  |  |  |  |  |  |  |  | 1,272 |  |  |  | 1,272 |  |
| Net\tloss |  |  |  |  |  |  |  |  |  |  |  |  | (325,321) | (325,321) | (325,321) |
| Total |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
| comprehensive |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
| loss |  |  |  |  |  |  |  |  |  |  |  |  |  |  | \t\t$(319,757) |
| BALANCE,\tDECEMBER\n31,\t2003 | \t211,855,658\t$ | 2,119 | 6,969,529\t\t$ | 70 | 1,224,914\t\t$ | 12 | (145,221)\t$ | (4,366)\t$ | (6,720)\t$3,910,879 | (6,720)\t$3,910,879 |  | \t\t$(2,291,816)\t$ | \t\t$(2,291,816)\t$ | 1,610,178 |  |
| Share\tClass\tExchanges | 8,194,443 | 82\t(6,969,529) | 82\t(6,969,529) | (70)\t(1,224,914) | (70)\t(1,224,914) | (12) |  |  |  |  |  |  |  |  |  |
| Stock\toption\tactivity | 6,249,324 | 62 |  |  |  |  |  |  |  | 43,004 |  |  |  | 43,066 |  |
| Issuance\tof\tcommon\tstock |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
| -\tStock\tPurchase\tPlans | 86,045 |  |  |  |  |  |  |  |  | 854 |  |  |  | 854 |  |
| ATC\tMexico\tactivity | 3,359,646 | 34 |  |  |  |  |  |  | 6,720 | 41,421 |  |  |  | 48,175 |  |
| ATC\tSouth\tAmerica |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
| activity |  |  |  |  |  |  |  |  |  | 67 |  |  |  | 67 |  |
| Tax\tbenefit\tof\tstock |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
| options |  |  |  |  |  |  |  |  |  | 16,200 |  |  |  | 16,200 |  |
| Net\tloss |  |  |  |  |  |  |  |  |  |  |  |  | (247,587) | (247,587) | (247,587) |
| Total |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
| comprehensive |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
| loss |  |  |  |  |  |  |  |  |  |  |  |  |  |  | \t\t$(247,587) |
| BALANCE,\tDECEMBER\n31,\t2004 | \t229,745,116\t$ | 2,297 |  |  |  |  | (145,221)\t$ | (4,366) |  | \t\t$4,012,425 |  | \t\t$(2,539,403)\t$ | \t\t$(2,539,403)\t$ | 1,470,953 |  |
| Issuance\tof\tcommon\tstock |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
| and\tassumption\tof |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
| options\tand\twarrants\t- |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
| SpectraSite\tmerger | \t169,506,083 | 1,695 |  |  |  |  |  |  |  | \t\t\t 3,104,377 |  |  |  | 3,106,072 |  |
| Stock\toption\tactivity | 11,106,693 | 111 |  |  |  |  |  |  |  | 70,247 |  |  |  | 70,358 |  |
| Issuance\tof\tcommon\tstock |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
| upon\texercise\tof |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
| warrants | 398,412 | 4 |  |  |  |  |  |  |  | 1,778 |  |  |  | 1,782 |  |
| Issuance\tof\tcommon\tstock |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
| -\tStock\tPurchase\tPlans | 50,119 | 1 |  |  |  |  |  |  |  | 767 |  |  |  | 768 |  |
| Treasury\tstock\tactivity |  |  |  |  |  | \t\t(2,836,519) | \t\t(2,836,519) | (76,585) |  |  |  |  |  | (76,585) |  |
| Unearned\tcompensation\t- |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
| SpectraSite\tmerger |  |  |  |  |  |  |  |  |  |  | \t$(4,861) |  |  | (4,861) |  |
| Unearned\tcompensation |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
| amortization\t- |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
| SpectraSite\tmerger |  |  |  |  |  |  |  |  |  |  | 2,364 |  |  | 2,364 |  |
| Net\tchange\tin\tfair\tvalue\tof |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
| cash\tflow\thedges,\tnet |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
| of\ttax |  |  |  |  |  |  |  |  |  |  |  | (803) |  | (803) | (803) |
| 3.25%\tconvertible\tnotes |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
| exchanged\tfor |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
| common\tstock | 4,670,336 | 46 |  |  |  |  |  |  |  | 55,659 |  |  |  | 55,705 |  |
| ATC\tMexico\tactivity | 159,836 | 2 |  |  |  |  |  |  |  | 2,829 |  |  |  | 2,831 |  |
| ATC\tSouth\tAmerica |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
| activity |  |  |  |  |  |  |  |  |  | 2,026 |  |  |  | 2,026 |  |
| Tax\tbenefit\tof\tstock |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
| options |  |  |  |  |  |  |  |  |  | 67,560 |  |  |  | 67,560 |  |
| Net\tloss |  |  |  |  |  |  |  |  |  |  |  |  | (171,590) | (171,590) | (171,590) |
| Total\tcomprehensive\nloss |  |  |  |  |  |  |  |  |  |  |  |  |  |  | \t\t$(172,393) |
| BALANCE,\tDECEMBER\n31,\t2005 |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
|  | \t415,636,595\t$ | 4,156 |  |  |  | \t\t(2,981,740)\t$(80,951) | \t\t(2,981,740)\t$(80,951) | \t\t(2,981,740)\t$(80,951) |  | \t\t$7,317,668\t$ | (2,497)\t$ | (803)\t$ | (2,710,993)\t$ | 4,526,580 |  |

See	notes	to	consolidated	financial	statements.

# CONSOLIDATED	STATEMENTS	OF	CASH	FLOWS

# (In	thousands)

|  | 2005 | 2004 | 2003 |
| :--- | :--- | :--- | :--- |
| CASH\tFLOWS\tPROVIDED\tBY\tOPERATING\tACTIVITIES: |  |  |  |
| Net\tloss | $(171,590) | $(247,587) | $(325,321) |
| Cumulative\teffect\tof\tchange\tin\taccounting\tprinciple,\tnet | 35,525 |  |  |
| Adjustments\tto\treconcile\tnet\tloss\tto\tcash\tprovided\tby\toperating\tactivities: |  |  |  |
| Depreciation,\tamortization\tand\taccretion | 411,254 | 329,449 | 330,414 |
| Non-cash\titems\treported\tin\tdiscontinued\toperations\t(primarily\tdepreciation,\tasset\timpairments\tand\tnet |  |  |  |
| losses\ton\tdispositions) | (2,111) | 3,725 | 53,043 |
| Minority\tinterest\tin\tnet\tearnings\tof\tsubsidiaries | 575 | 2,366 | 3,703 |
| Loss\ton\tinvestments\tand\tother\tnon-cash\texpense | 2,078 | 4,295 | 20,525 |
| Impairments,\tnet\tloss\ton\tsale\tof\tlong-lived\tassets,\tnon-cash\trestructuring\tand\tmerger\trelated\texpense | 26,065 | 23,130 | 29,400 |
| Loss\ton\tretirement\tof\tlong-term\tobligations | 67,110 | 138,016 | 46,197 |
| Amortization\tof\tdeferred\tfinancing\tcosts,\tdebt\tdiscounts\tand\tother\tnon-cash\tinterest | 45,214 | 72,857 | 75,595 |
| Amortization\tof\tdeferred\tcompensation | 2,364 |  |  |
| Provision\tfor\tlosses\ton\taccounts\treceivable | 8,492 | 17,440 | 21,940 |
| Deferred\tincome\ttaxes | (12,752) | (92,443) | (77,796) |
| Changes\tin\tassets\tand\tliabilities,\tnet\tof\tacquisitions: |  |  |  |
| Accounts\treceivable | 7,570 | 1,335 | (3,649) |
| Prepaid\tand\tother\tassets | (10,331) | (18,665) | (11,908) |
| Accounts\tpayable\tand\taccrued\texpenses | (36,603) | (3,247) | 312 |
| Accrued\tinterest | (5,641) | (20,268) | (4,363) |
| Unearned\trevenue | 5,179 | (10,990) | (3,139) |
| Other\tlong-term\tliabilities | 24,806 | 17,287 | 1,433 |
| Cash\tprovided\tby\toperating\tactivities | 397,204 | 216,700 | 156,386 |
| CASH\tFLOWS\t(USED\tFOR)\tPROVIDED\tBY\tINVESTING\tACTIVITIES: |  |  |  |
| Payments\tfor\tpurchase\tof\tproperty\tand\tequipment\tand\tconstruction\tactivities | (88,637) | (42,181) | (61,608) |
| Payments\tfor\tacquisitions,\tnet\tof\tcash\tacquired | (7,479) | (33,403) | (95,077) |
| Payments\tfor\tacquisition\tof\tMexico\tminority\tinterest | (7,270) | (3,947) |  |
| Proceeds\tfrom\tnotes\treceivable,\tnet |  |  | 6,946 |
| Cash\tacquired\tfrom\tSpectraSite\tmerger,\tnet\tof\ttransaction\tcosts\tpaid | 16,696 |  |  |
| Proceeds\tfrom\tsales\tof\tbusinesses\tand\tother\tlong-term\tassets | 6,881 | 31,987 | 110,753 |
| Restricted\tcash\tand\tinvestments |  | 170,036 | (170,036) |
| Deposits\tand\tinvestments\tand\tother | (725) | 2,328 | (17,024) |
| Cash\t(used\tfor)\tprovided\tby\tinvesting\tactivities | (80,534) | 124,820 | (226,046) |
| CASH\tFLOWS\t(USED\tFOR)\tPROVIDED\tBY\tFINANCING\tACTIVITIES: |  |  |  |
| Proceeds\tfrom\tissuance\tof\tdebt\tsecurities\tand\tnotes\tpayable |  | 1,072,500 | 1,032,384 |
| Net\tproceeds\tfrom\tequity\tofferings,\tstock\toptions,\twarrants\tand\tstock\tpurchase\tplans | 65,357 | 40,556 | 126,847 |
| Borrowings\tunder\tcredit\tfacilities | 1,543,000 | 700,000 |  |
| Repayment\tof\tnotes\tpayable,\tcredit\tfacilities\tand\tcapital\tleases | (1,949,444) | (2,003,401) | (1,071,956) |
| Purchases\tof\tClass\tA\tcommon\tstock | (68,927) |  |  |
| Deferred\tfinancing\tcosts\tand\tother\tfinancing\tactivities | (9,512) | (41,083) | (39,442) |
| Cash\t(used\tfor)\tprovided\tby\tfinancing\tactivities | (419,526) | (231,428) | 47,833 |
| NET\t(DECREASE)\tINCREASE\tIN\tCASH\tAND\tCASH\tEQUIVALENTS | (102,856) | 110,092 | (21,827) |
| CASH\tAND\tCASH\tEQUIVALENTS,\tBEGINNING\tOF\tYEAR | 215,557 | 105,465 | 127,292 |
| CASH\tAND\tCASH\tEQUIVALENTS,\tEND\tOF\tYEAR | $112,701 | $215,557 | $105,465 |

# 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	operates	distributed	antenna	systems	within	buildings and	provides	limited	network	development	services	that	support	its	rental	and	management	operations	and	the	addition	of	new	tenants	and	equipment	on	its	sites.	During 2004	and	2003,	the	Company	sold	or	committed	to	sell	certain	non-core	businesses,	which	have	been	reported	as	discontinued	operations.	(See	note	3.)

The	Company	completed	its	merger	with	SpectraSite,	Inc.	in	August	2005,	as	more	fully	described	in	note	2.	The	merger	was	approved	by	the	stockholders	of	the	Company and	SpectraSite,	Inc.	on	August	3,	2005,	and	the	results	of	operations	of	SpectraSite	have	been	included	in	the	Company's	accompanying	consolidated	financial	statements for	the	year	ended	December	31,	2005,	commencing	on	August	3,	2005.

ATC	is	a	holding	company	which	conducts	its	operations	in	the	United	States,	Mexico	and	Brazil	through	operating	subsidiaries.	ATC's	principal	United	States	operating subsidiaries	are	American	Towers,	Inc.	(ATI)	and	SpectraSite	Communications,	Inc.	(SpectraSite).	ATC's	principal	international	operating	subsidiary	is	American	Tower International,	Inc.,	which	conducts	operations	in	Mexico	through	its	subsidiary	ATC	Mexico	Holding	Corp.	(ATC	Mexico)	and	in	Brazil	through	its	subsidiary	ATC	South America	Holding	Corp.	(ATC	South	America).

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	Verestar,	Inc.	(Verestar),	as	discussed	in	note	3.

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,	impairment	of	long-lived	assets	(including	goodwill),	purchase	price	allocation,	asset	retirement	obligations	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)	or	other	inflation-based	indices,	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,	2005,	2004	and	2003	approximated	$30,304,000,	$24,762,000	and	$22,944,000,	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	initial	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	services	revenues	are	derived	under	contracts	or	arrangements	with	customers	that	provide	for	billings	on	a	fixed	price	basis.	Revenues	are	recognized as	services	are	performed,	excluding	certain	fees	for

# NOTES	TO	CONSOLIDATED	FINANCIAL	STATEMENTS—(Continued)

services	provided	in	connection	with	the	execution	of	lease	agreements	which	are	initially	deferred	and	recognized	as	revenue	over	the	initial	terms	of	the	applicable	leases.

Rent	Expense—Many	of	the	leases	underlying	the	Company's	tower	sites	have	fixed	rent	escalators,	which	provide	for	periodic	increases	in	the	amount	of	ground	rent payable	by	the	Company	over	time.	The	Company	calculates	straight-line	ground	rent	expense	for	these	leases	based	on	the	term	of	the	underlying	ground	lease,	the applicable	tower's	useful	life,	and	the	term	of	the	tenant	lease	on	the	applicable	tower.	Typically,	the	Company	enters	into	tenant	leases,	which	contain	multiple	renewal options,	with	its	customers	for	antenna	space	on	its	towers.	Certain	of	these	tenant	leases	require	the	Company	to	exercise	all	available	renewal	options	pursuant	to	the underlying	ground	lease,	if	the	tenant	exercises	its	renewal	option.	For	towers	with	these	types	of	tenant	leases	at	the	inception	of	the	ground	lease,	the	Company	calculates	its straight-line	ground	rent	over	the	lesser	of	the	remaining	ground	lease	life	(including	all	renewal	options)	or	the	life	of	the	tenant	lease	(including	all	renewal	options).	In instances	where	the	Company's	tenant	leases	do	not	require	the	Company	to	exercise	all	available	renewal	options	pursuant	to	the	underlying	ground	lease,	the	Company calculates	its	straight-line	ground	rent	over	the	lesser	of	the	ground	lease	life	(including	all	renewal	options)	or	a	period	equal	to	or	greater	than	the	15-year	period	over	which the	Company	depreciates	its	tower	assets.

Straight-line	ground	rent	expense	approximated	$15,946,000,	$12,101,000	and	$14,687,000,	for	the	years	ended	December	31,	2005,	2004	and	2003,	respectively.	The Company's	straight-line	rent	liability	of	approximately	$97.1	million	and	$81.2	million	is	included	in	other	long-term	liabilities	in	the	accompanying	consolidated	balance sheets	as	of	December	31,	2005	and	2004,	respectively.

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	and	abandoned	acquisition	costs.

Loss	on	Retirement	of	Long-Term	Obligations—Loss	on	retirement	of	long-term	obligations	primarily	includes	cash	paid	to	retire	debt	in	excess	of	its	carrying	value	and non-cash	charges	related	to	the	write-off	of	deferred	financing	fees.	In	addition,	it	also	includes	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."	Loss	on	retirement	of	long-term	obligations	also	includes	gains	from	repurchasing	or refinancing	certain	of	the	Company's	debt	obligations.	(See	note	7.)

Discount	and	Premium	on	Notes—The	Company	amortizes	the	discount	on	its	convertible,	senior	and	senior	subordinated	discount	notes	(including	the	allocated	fair	value	of the	related	warrants)	and	the	premium	on	its	senior	notes,	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.)

Concentrations	of	Credit	Risk—Financial	instruments	that	potentially	subject	the	Company	to	concentrations	of	credit	risk	are	primarily	cash	and	cash	equivalents,	notes receivable,	trade	receivables	and	derivative	instruments.	The	Company	mitigates	its	risk	with	respect	to	cash	and	cash	equivalents	and	derivative	instruments	by	maintaining its	deposits	and	contracts	at	high	quality	financial	institutions	and	monitoring	the	credit	ratings	of	those	institutions.	The	Company	derives	the	largest	portion	of	its	revenues, corresponding	trade	receivables	and	the	related	deferred	rent	asset	from	a	small	number	of	customers	in	the	telecommunications	industry,	and	over	50%	of	its	revenues	are derived	from	five	customers	in	the	industry.	In	addition,	the	Company	has	concentrations	of	credit	risk	in	certain	geographic	areas.	(See	notes	6,	8	and	16.)

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	$15,071,000,	$13,968,000	and	$17,445,000	as	of	December	31,	2005,	2004	and	2003,	respectively. Amounts	charged	against	allowances,	net	of	recoveries,	for	the	years	ended	December	31,	2005,	2004	and	2003	approximated	$13,083,000,	$20,917,000,	and	$20,536,000, respectively.	The	fair	value	of	accounts	receivable	acquired	in	the	merger	with	SpectraSite,	Inc.	increased	the	allowances	by	approximately	$5,694,000	as	of	the	date	of acquisition	in	August	2005.

Derivative	Financial	Instruments—The	Company	accounts	for	derivative	financial	instruments	in	accordance	with	SFAS	No.	133,	"Accounting	for	Derivative	Instruments and	Hedging	Activities,"	as	amended.	All	derivatives	are	recorded	on	the	consolidated	balance	sheet	at	fair	value.	If	a	derivative	is	designated	as	a	cash	flow	hedge,	the effective	portions	of	changes	in	the	fair	value	of	the	derivative	are	recorded	in	accumulated	other	comprehensive	income	(loss)	and	are	recognized	in	the	results	of	operations when	the	hedged	item	affects	earnings	(loss).	Ineffective	portions	of	changes	in	the	fair	value	of	cash	flow	hedges	are	recognized	in	the	results	of	operations.	For	derivative instruments	not	designated	as	hedging	instruments,	changes	in	fair	value	are	recognized	in	the	results	of	operations	in	the	period	that	the	change	occurs.

The	Company	is	exposed	to	interest	rate	risk	relating	to	variable	interest	rates	on	its	new	credit	facilities	described	in	note	7.	During	the	years	ended	December	31,	2005,	2004 and	2003,	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	and	caps.	As	of	December	31,	2005,	the	Company	had	derivative	financial	instruments	in	the	form	of	interest	rate	swaps	that	were	designated	as	cash	flow hedges	of	floating	interest	rate	payments	on	the	Company's	credit	facilities.	The	interest	rate	swap	agreements	effectively	convert	the	interest	payments	for	a	portion	of	the debt	from	floating	rate	to	fixed	rate	debt.

The	Company	assesses,	both	at	the	inception	of	the	hedge	and	on	an	ongoing	basis,	whether	the	derivatives	that	are	used	in	hedging	transactions	are	highly	effective	in offsetting	changes	in	cash	flows	of	hedged	items.	The	Company	does	not	hold	derivatives	for	trading	purposes.	(See	note	8.)

Other	Comprehensive	Income	(Loss)—Other	comprehensive	income	(loss)	refers	to	revenues,	expenses,	gains	and	losses	that	under	accounting	principles	generally	accepted in	the	United	States	of	America	are	included	in	other	comprehensive	income	(loss),	but	are	excluded	from	net	income	(loss),	as	these	amounts	are	recorded	directly	as	an adjustment	to	stockholders'	equity,	net	of	tax.	The	Company's	other	comprehensive	income	(loss)	is	comprised	of	unrealized	gains/losses	on	derivative	cash	flow	hedges.

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	reporting	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	other	income	(expense).	The	net remeasurement	gain	(loss)	for	the	years	ended	December	31,	2005,	2004	and	2003	approximated	$396,000,	$(146,000),	and	$(1,142,000),	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.

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

Depreciation	is	recorded	using	the	straight-line	method	over	the	assets'	estimated	useful	lives.	Property	and	equipment	acquired	through	capital	leases	are	amortized	using	the straight-line	method	over	the	shorter	of	the	lease	term	or	the	estimated	useful	life	of	the	asset.	Towers	on	leased	land	are	depreciated	over	the	shorter	of	the	term	of	the	ground lease	(including	renewal	options)	or	the	estimated	useful	life	of	the	tower	(15	years).	Asset	useful	lives	are	as	follows:

For	towers	acquired	through	capital	lease,	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	amortized	over	their	useful	lives	for	a	period	up	to	fifteen years.	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—The	Company	complies	with	the	provisions	of	SFAS	No.	142,	"Goodwill	and	Other	Intangible	Assets"	(SFAS	No.	142)	which requires	that	goodwill	and	intangible	assets	with	indefinite	lives	no	longer	be	amortized,	but	reviewed	for	impairment	at	least	annually	or	whenever	events	or	circumstances indicate	the	carrying	value	of	an	asset	may	not	be	recoverable,	in	accordance	with	SFAS	No.	142.	Intangible	assets	that	are	deemed	to	have	a	definite	life	continue	to	be amortized	over	their	useful	lives.	(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	13.)

Sales	of	Subsidiary	Stock—The	Company	complies	with	the	provisions	of	SEC	Staff	Accounting	Bulletin	(SAB)	No.	51,	"Accounting	for	Sales	of	Stock	by	a	Subsidiary"	and records	the	difference	between	the	Company's	carrying	value	of	the	interest	in	the	subsidiary's	equity	that	was	sold	and	the	proceeds	received	for	that	interest	to	additional paid-in-capital.	The	Company	records	any	gains	or	losses	resulting	from	the	sale	of	stock	by	a	subsidiary	as	a	component	of	stockholders'	equity.	(See	note	11.)

Treasury	Stock—	The	Company	records	treasury	stock	purchases	under	the	cost	method,	whereby	the	purchase	price,	including	legal	costs	and	commissions,	is	recorded	in	a contra	equity	account	(treasury	stock).	The	equity	accounts	from	which	the	shares	were	originally	issued	are	not	adjusted	for	any	treasury	stock	purchases.	(See	notes	14	and 18.)

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,	2005,	2004	and	2003,	potential	common	shares,	including	shares	issuable	upon	exercise	of	options	and	warrants	and	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	72.9	million,	68.8	million,	and	65.6	million	for	the	years	ended	December	31,	2005,	2004	and	2003, respectively.

Impairments,	Net	Loss	on	Sale	of	Long-Lived	Asset	and	Discontinued	Operations—The	Company	reviews	long-lived	assets,	including	intangibles	with	definite	lives,	for impairment	whenever	events,	changes	in	circumstances	or	the	Company's	review	of	its	tower	portfolio	indicate	that	the	carrying	amount	of	an	asset	may	not	be	recoverable. The	Company's	tower	portfolio	review	includes	sites	for	which	the	Company	has	no	current	tenant	leases.	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	or	towers	that	have	no	current	tenant	leases).	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	also	complies	with	the	provisions	of	SFAS	No.	144,	"Accounting	for	the	Impairment	or	Disposal	of	Long-Lived Assets,"	(SFAS	No.	144)	regarding	impairment	assessments	and	decisions	concerning	discontinued	operations.	The	Company	records	impairment	losses	in	the	period	in which	it	identifies	such	impairments.	(See	notes	3	and	12.)

Notes	Receivable	and	Other	Long-Term	Assets—Other	long-term	assets	primarily	represent	the	Company's	notes	receivable	described	in	note	6,	the	straight-line	asset associated	with	non-cancelable	tenant	leases	that	contain	fixed	escalation	clauses	over	the	terms	of	the	applicable	leases,	as	well	as	investments,	prepaid	ground	lease	assets, long-term	deposits,	favorable	leasehold	interests	and	other	long-term	assets	acquired	in	connection	with	the	merger	with	SpectraSite,	Inc.	The	Company's	straight-line	asset was	approximately	$152.1	million	and	$121.9	million	in	the	accompanying	consolidated	balance	sheets	at	December	31,	2005	and	2004,	respectively.

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,	2005	and	2004,	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,	the	Company	records	an	impairment	charge	to	adjust	the	carrying	value	to	fair	market	value.	The	Company's	only	investment,	with	a	carrying value	of	$10.1	million	and	$10.2	million	as	of	December	31,	2005	and	2004,	respectively,	was	accounted	for	as	a	cost	investment	as	of	December	31,	2005	and	as	an	equity investment	as	of	December	31,	2004.

During	the	years	ended	December	31,	2005,	2004	and	2003,	the	Company	recorded	losses	on	equity	method	investments	of	approximately	$2.1	million,	$2.9	million,	and $1.9	million,	respectively.	During	the	year	ended	December	31,	2003,	the	Company	recorded	impairment	charges	on	its	cost	and	equity	investments	of	approximately	$19.3 million.	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."

Asset	Retirement	Obligations—The	Company	complies	with	the	provisions	of	SFAS	No.	143,	"Accounting	for	Asset	Retirement	Obligations"	(SFAS	No.	143)	and	the provisions	of	Financial	Accounting	Standards	Board	(FASB)	Interpretation	No.	47	"Accounting	for	Conditional	Asset	Retirement	Obligations"	(FIN	No.	47).	Both

pronouncements	address	the	financial	accounting	and	reporting	requirements	for	conditional	obligations	associated	with	the	Company's	legal	obligation	to	retire	tangible long-lived	assets	and	the	related	asset	retirement	costs.

The	fair	value	of	a	liability	for	asset	retirement	obligations	is	recognized	in	the	period	in	which	it	is	incurred	and	can	be	reasonably	estimated.	Such	asset	retirement	costs	are 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	generally	involve	discounting	of	estimated	future	cash	flows.	Periodic	accretion	of	such	liabilities	due	to	the	passage	of	time	is	recorded	as	an	operating expense.	The	Company	has	certain	legal	obligations	related	to	tower	assets	which	fall	within	the	scope	of	SFAS	No.	143	and	FIN	No.	47,	principally	obligations	to	remediate leased	land	on	which	certain	of	the	Company's	tower	assets	are	located.	The	significant	assumptions	used	in	estimating	the	Company's	aggregate	asset	retirement	obligation are:	timing	of	tower	removals;	cost	of	tower	removals;	timing	and	number	of	land	lease	renewals;	expected	inflation	rates;	and	credit-adjusted	risk-free	interest	rates	that approximate	the	Company's	incremental	borrowing	rate.	The	adoption	of	FIN	No.	47	primarily	resulted	in	the	acceleration	of	settlement	date	assumptions,	as	FIN	No.	47 precludes	the	Company	from	considering	non	contractual	lease	renewal	periods	in	determining	its	settlement	date	assumptions.

The	Company	adopted	the	provisions	of	SFAS	No.	143	as	of	January	1,	2003	and	the	provisions	of	FIN	No.	47	as	of	December	31,	2005.	Upon	adoption	of	the	provisions	of FIN	No.	47,	the	Company	recognized	a	$35.5	million	charge	(net	of	an	$11.7	million	tax	benefit)	as	a	cumulative	effect	of	a	change	in	accounting	principle	in	the consolidated	statement	of	operations	for	the	year	ended	December	31,	2005.	In	addition,	the	adoption	of	FIN	No.	47	resulted	in	an	increase	to	the	tower	assets	included	in property	and	equipment,	net	of	$66.9	million.	Had	the	Company	adopted	the	provisions	of	FIN	No.	47	as	of	January	1,	2003,	the	aggregate	asset	retirement	obligation	as	of January	1,	2003,	December	31,	2003	and	December	31,	2004	would	have	approximated	$86.7	million,	$92.9	million	and	$99.5	million,	respectively.	Had	the	Company adopted	the	provisions	of	FIN	No.	47	in	prior	periods,	net	loss	for	the	years	ended	December	31,	2003	and	2004	would	have	been	approximately	$(332,398)	and	$(253,627), respectively	and	basic	and	diluted	net	loss	per	share	for	the	years	ended	December	31,	2003	and	December	31,	2004	would	have	been	approximately	$(1.60)	and	$(1.13), respectively.

The	Company's	asset	retirement	obligation	is	included	in	other	long-term	liabilities	in	the	accompanying	consolidated	balance	sheets.	The	changes	in	the	carrying	value	of	the Company's	asset	retirement	obligations	for	years	ended	December	31,	2005,	2004	and	2003	are	as	follows:

|  | 2005 | 2004 | 2003 |
| :--- | :--- | :--- | :--- |
| Beginning\tbalance\tas\tof\tJanuary\t1, | $23,464 | $4,635 | $1,250 |
| Additions\tand\trevisions\tin\testimated\tcash\tflows,\tnet\tof\tsettlements | 2,587 | 17,016 | 3,223 |
| Accretion\texpense | 3,069 | 1,813 | 162 |
| Liability\tassumed\tin\tmerger\twith\tSpectraSite,\tInc. | 21,126 |  |  |
| Increase\tdue\tto\tchange\tin\taccounting\tprinciple | 113,976 |  |  |
| Balance\tas\tof\tDecember\t31, | $164,222 | $23,464 | $4,635 |

Stock-Based	Compensation—The	Company	complies	with	the	provisions	of	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 "Accounting	for	Stock-Based	Compensation"	(SFAS	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	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	14.	In December	2004,	the	FASB	issued	SFAS	No.	123	(revised	2004),	"Share-Based	Payment"	(SFAS	123R),	as	further	described	below.

During	the	year	ended	December	31,	2005,	the	Company	reevaluated	the	assumptions	used	to	estimate	the	fair	value	of	stock	options	issued	to	employees.	As	a	result,	the Company	lowered	its	expected	volatility	assumption	for	options	granted	after	July	1,	2005	to	approximately	30%	and	increased	the	expected	life	of	option	grants	to	6.25	years using	the	simplified	method	permitted	by	SEC	SAB	No.	107,	"Share-Based	Payment"	(SAB	No.	107).	The	Company	made	this	change	based	on	a	number	of	factors, including	the	Company's	execution	of	its	strategic	plans	to	sell	non-core	businesses,	reduce	leverage	and	refinance	its	debt,	and	its	recent	merger	with	SpectraSite,	Inc.	(See note	2.)	Management	had	previously	based	its	volatility	assumptions	on	historical	volatility	since	inception,	which	included	periods	when	the	Company's	capital	structure	was more	highly	leveraged	than	current	levels	and	expected	levels	for	the	foreseeable	future.	Management's	estimate	of	future	volatility	is	based	on	its	consideration	of	all available	information,	including	historical	volatility,	implied	volatility	of	publicly	traded	options,	the	Company's	current	capital	structure	and	its	publicly	announced	future business	plans.	For	comparative	purposes,	a	10%	change	in	the	volatility	assumption	would	change	pro	forma	stock	option	expense	and	pro	forma	net	loss	by	approximately $0.1	million	for	the	year	ended	December	31,	2005.	(See	note	14.)

The	following	table	illustrates	the	effect	on	net	loss	and	net	loss	per	common	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):

|  | 2005 | 2004 | 2003 |
| :--- | :--- | :--- | :--- |
| Net\tloss\tas\treported | $(171,590) | $(247,587) | $(325,321) |
| Add:\tStock-based\temployee\tcompensation\texpense,\tnet\tof\trelated\ttax\teffect,\tincluded\tin\tnet\tloss\tas |  |  |  |
| reported | 7,104 | 2,297 | 2,077 |
| Less:\tTotal\tstock-based\temployee\tcompensation\texpense\tdetermined\tunder\tfair\tvalue\tbased |  |  |  |
| method\tfor\tall\tawards,\tnet\tof\trelated\ttax\teffect | (22,238) | (23,906) | (31,156) |
| Pro-forma\tnet\tloss | $(186,724) | $(269,196) | $(354,400) |
| Basic\tand\tdiluted\tnet\tloss\tper\tshare\tas\treported | $(0.57) | $(1.10) | $(1.56) |
| Basic\tand\tdiluted\tnet\tloss\tper\tshare\tpro-forma | $(0.62) | $(1.20) | $(1.70) |

The	Company	has	modified	certain	option	awards	to	revise	vesting	and	exercise	terms	for	certain	terminated	employees	and	recognized	charges	of	$7.0	million,	$3.0	million and	$2.3	million	for	the	years	ended	December	31,	2005,	2004	and	2003,	respectively.	In	addition,	the	stock-based	employee	compensation	amounts	above	for	the	year	ended December	31,	2005,	include	approximately	$2.4	million	of	unearned	compensation	amortization	related	to	unvested	stock	options	assumed	in	the	merger	with	SpectraSite, Inc.	Such	charges	are	reflected	in	impairments,	net	loss	on	sale	of	long-lived	assets,	restructuring	and	merger	related	expense	with	corresponding	adjustments	to	additional paid-in	capital	and	unearned	compensation	in	the	accompanying	consolidated	financial	statements.

Recent	Accounting	Pronouncements—In	December	2004,	the	FASB	issued	SFAS	123R,	which	supersedes	APB	No.	25,	and	amends	SFAS	No.	95,	"Statement	of	Cash Flows."	This	statement	addressed	the	accounting	for	share-based	payments	to	employees,	including	grants	of	employee	stock	options.	Under	the	new	standard,

companies	will	no	longer	be	able	to	account	for	share-based	compensation	transactions	using	the	intrinsic	method	in	accordance	with	APB	No.	25.	Instead,	companies	will	be required	to	account	for	such	transactions	using	a	fair-value	method	and	recognize	the	related	expense	associated	with	share-based	payments	in	the	statement	of	operations. SFAS	123R,	is	effective	for	the	Company	as	of	January	1,	2006.	The	Company	historically	accounted	for	share-based	payments	to	employees	under	APB	No.	25's	intrinsic value	method.	As	such,	the	Company	generally	has	not	recognized	compensation	expense	for	options	granted	to	employees.	The	Company	will	adopt	the	provisions	of	SFAS 123R	under	the	modified	prospective	method,	in	which	compensation	cost	for	all	share-based	payments	granted	or	modified	after	the	effective	date	is	recognized	based	upon the	requirements	of	SFAS	123R,	and	compensation	cost	for	all	awards	granted	to	employees	prior	to	the	effective	date	that	are	unvested	as	of	the	effective	date	of	SFAS	123R is	recognized	based	on	SFAS	123.	Tax	benefits	will	be	recognized	related	to	the	cost	for	share-based	payments	to	the	extent	the	equity	instrument	would	ordinarily	result	in	a future	tax	deduction	under	existing	law.	Tax	expense	will	be	recognized	to	write	off	excess	deferred	tax	assets	when	the	tax	deduction	upon	settlement	of	a	vested	option	is less	than	the	expense	recorded	in	the	statement	of	operations	(to	the	extent	not	offset	by	prior	tax	credits	for	settlements	where	the	tax	deduction	was	greater	than	the	fair value	cost).	The	Company	estimates	that	it	will	recognize	equity-based	compensation	expense	of	approximately	$35	million	to	$38	million	for	the	year	ending	December	31, 2006.	This	amount	is	subject	to	revisions	as	the	Company	finalizes	certain	assumptions	related	to	2006,	including	the	size	and	nature	of	share-based	awards	and	forfeiture rates.	SFAS	123R	also	requires	the	benefits	of	tax	deductions	in	excess	of	recognized	compensation	cost	be	reported	as	a	financing	cash	flow	rather	than	as	operating	cash flow	as	was	previously	required.	The	Company	cannot	estimate	what	the	future	tax	benefits	will	be	as	the	amounts	depend	on,	among	other	factors,	future	employee	stock option	exercises.	Due	to	the	Company's	tax	loss	position,	there	was	no	operating	cash	inflow	realized	for	December	31,	2005	and	2004	for	such	excess	tax	deductions.

In	March	2005,	the	SEC	issued	SAB	No.	107	regarding	the	Staff's	interpretation	of	SFAS	123R.	This	interpretation	provides	the	Staff's	views	regarding	interactions	between SFAS	123R	and	certain	SEC	rules	and	regulations	and	provides	interpretations	of	the	valuation	of	share-based	payments	for	public	companies.	The	interpretive	guidance	is intended	to	assist	companies	in	applying	the	provisions	of	SFAS	123R	and	investors	and	users	of	the	financial	statements	in	analyzing	the	information	provided.	The Company	will	follow	the	guidance	prescribed	in	SAB	No.	107	in	connection	with	its	adoption	of	SFAS	123R.

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,	2005	and	2004.	As	of	December	31,	2005,	the	carrying	amount	and	fair	value	of	long-term	obligations, including	current	portion,	were	$3.6	billion	and	$4.0	billion,	respectively.	As	of	December	31,	2004,	the	carrying	amount	and	fair	value	of	long-term	obligations,	including current	portion,	were	$3.3	billion	and	$3.6	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's matching	contribution	for	periods	prior	to	June	30,	2004	was	35%	up	to	a	maximum	5%	of	a	participant's	contributions.	Effective	July	1,	2004,	the	plan	was	amended	to increase	the	Company	match	to	50%	up	to	a	maximum	6%	of	a	participant's	contributions.	The	Company	contributed	approximately	$1,061,000,	$533,000	and	$825,000	to the	plan	for	the	years	ended	December	31,	2005,	2004	and	2003,	respectively.

Reclassifications—	Certain	reclassifications	have	been	made	to	the	accompanying	2004	and	2003	consolidated	financial	statements	and	related	notes	to	conform	to	the	2005 presentation.	The	Company	changed	the	classification	of	its	changes	in	restricted	cash	and	investment	balances	to	present	such	changes	as	an	investing	activity	in	the accompanying	consolidated	statement	of	cash	flows	for	the	year	ended	December	31,	2004.	The

Company	had	previously	presented	such	changes	as	a	financing	activity.	The	change	in	classification	resulted	in	an	increase	of	$170.0	million	in	investing	cash	flows	and	a corresponding	decrease	in	financing	cash	flows	from	the	amounts	previously	reported.

General—The	acquisitions	consummated	by	the	Company	during	2005,	2004	and	2003,	have	been	accounted	for	under	the	purchase	method	of	accounting	in	accordance	with SFAS	No.	141	"Business	Combinations"	(SFAS	No.	141).	The	purchase	prices	have	been	allocated	to	the	net	assets	acquired	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,	2005,	2004	and	2003,	the	Company	primarily	acquired	its	tower	assets	from	third	parties	in	one	of	two	types	of	transactions:	the purchase	of	a	business	or	the	purchase	of	assets.	The	structure	of	each	transaction	affects	the	way	the	Company	allocates	purchase	price	within	the	consolidated	financial statements.	In	the	case	of	tower	assets	acquired	through	the	purchase	of	a	business,	the	Company	allocates	the	purchase	price	to	the	assets	acquired	and	liabilities	assumed	at their	estimated	fair	values	as	of	the	date	of	acquisition.	The	excess	of	the	purchase	price	paid	by	the	Company	over	the	estimated	fair	value	of	net	assets	acquired	has	been recorded	as	goodwill.	In	the	case	of	an	asset	purchase,	the	Company	first	allocates	the	purchase	price	to	property	and	equipment	for	the	appraised	value	of	the	tower	and	to identifiable	intangible	assets	(primarily	customer	base).	The	Company	then	records	any	remaining	purchase	price	within	intangible	assets	as	a	"network/location	intangible."

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.

Merger	with	SpectraSite,	Inc.—In	May	2005,	the	Company	entered	into	an	agreement	and	plan	of	merger	with	SpectraSite,	Inc.,	an	owner	and	operator	of	approximately 7,800	wireless	and	broadcast	towers	and	in-building	systems	in	the	United	States.	The	Company	completed	the	merger	in	August	2005,	which	increased	the	size	of	the Company's	communications	site	portfolio	to	over	22,000	sites.

Under	the	terms	of	the	merger	agreement,	SpectraSite,	Inc.	merged	with	a	wholly	owned	subsidiary	of	the	Company,	and	each	share	of	SpectraSite,	Inc.	common	stock converted	into	the	right	to	receive	3.575	shares	of	the	Company's	Class	A	common	stock.	In	August	2005,	the	Company	issued	approximately	169.5	million	shares	of	its Class	A	common	stock	with	respect	to	shares	of	SpectraSite,	Inc.	common	stock	outstanding	as	of	the	closing	of	the	merger	and	reserved	for	issuance	approximately 9.9	million	and	6.8	million	shares	of	Class	A	common	stock	issuable	pursuant	to	SpectraSite,	Inc.	options	and	warrants,	respectively,	assumed	in	the	merger.

The	total	preliminary	purchase	price	of	approximately	$3.1	billion	includes	the	fair	value	of	shares	of	Class	A	common	stock	issued,	the	fair	value	of	SpectraSite,	Inc.	options and	warrants	assumed,	and	estimated	transaction	costs,	as	follows	(in	thousands):

| Issuance	of	American	Tower	Class	A	common	stock	to	stockholders	of	SpectraSite,	Inc.	(169.5	million	shares	at	$17.21) | $2,917,130 |
| :--- | :--- |
| Fair\tvalue\tof\toptions\tassumed,\tnet\tof\testimated\ttax\tbenefit | 88,487 |
| Fair\tvalue\tof\twarrants\tassumed | 100,455 |
| Estimated\ttransaction\tcosts | 22,733 |
| Total\tpreliminary\tpurchase\tprice | $3,128,805 |

The	fair	value	of	shares	of	Class	A	common	stock	issued	and	options	and	warrants	assumed	was	determined	using	a	value	of	$17.21	per	share,	which	represents	the	average closing	price	of	the	Class	A	common	stock	from	the	two	trading	days	before,	to	the	two	trading	days	after,	the	signing	of	the	merger	agreement	and	the	public	announcement of	the	merger.	The	fair	value	of	the	SpectraSite,	Inc.	options	and	warrants	assumed	was	calculated	using	a	Black-Scholes	valuation	model.	Upon	completion	of	the	merger,	the assumed	SpectraSite,	Inc.	stock	options	were	exercisable	for	an	aggregate	of	9.9	million	shares	of	the	Company's	Class	A	common	stock.	Of	these	options,	options	to purchase	approximately	8.3	million	shares	were	fully	vested	as	of	the	closing	date	and	the	remaining	unvested	options	to	purchase	1.6	million	shares	vest	monthly	through	the first	quarter	of	2008.	The	portion	of	the	intrinsic	value	of	the	unvested	options	related	to	future	service	has	been	allocated	to	unearned	compensation	of	$4.9	million	and	is being	amortized	over	the	remaining	vesting	periods,	which	range	from	approximately	one	to	three	years	from	the	date	of	acquisition.	Approximately	$2.4	million	was amortized	to	merger	related	expense	in	the	accompanying	consolidated	financial	statements	for	the	year	ended	December	31,	2005.	The	purchase	price	and	residual	goodwill has	also	been	adjusted	to	reflect	an	estimated	tax	benefit	of	$35.1	million	associated	with	the	post	merger	exercises	of	options	assumed	in	the	merger.	Transaction	costs include	investment	banking,	legal	and	accounting	fees	and	other	external	costs	directly	related	to	the	merger.

The	Company	is	in	the	process	of	finalizing	a	third-party	valuation	of	SpectraSite's	property	and	equipment,	intangible	assets	and	certain	other	assets	and	liabilities.	Given the	size	of	the	SpectraSite	transaction,	the	values	of	certain	assets	and	liabilities	are	based	on	preliminary	valuations	and	are	subject	to	adjustment	as	additional	information	is obtained	and	the	third-party	valuation	is	finalized.	The	primary	areas	of	the	purchase	price	allocation	which	are	not	yet	finalized	relate	to	the	fair	values	of	property	and equipment,	intangibles,	restructuring	and	merger	related	liabilities,	other	assumed	liabilities,	deferred	income	taxes	and	residual	goodwill.	Changes	to	the	valuation	of	these items	may	result	in	adjustments	to	depreciation	and	amortization	and	associated	income	taxes.	Goodwill	resulting	from	the	merger	was	assigned	to	the	Company's	rental	and management	segment.	Deferred	taxes	were	recorded	for	the	differing	book	and	tax	bases	of	all	SpectraSite	assets	and	liabilities	other	than	goodwill.

The	following	table	summarizes	the	preliminary	allocation	of	the	purchase	price	based	on	the	estimated	fair	values	of	the	assets	acquired	and	liabilities	assumed	and	related deferred	income	taxes	in	connection	with	the	merger	(in	thousands):

| Assets	acquired: |  |
| :--- | :--- |
| Current\tassets | $69,844 |
| Property\tand\tequipment | 1,314,547 |
| Intangible\tassets\tsubject\tto\tamortization: |  |
| Acquired\tcustomer\tbase\tand\tnetwork\tlocation\tintangible | 1,215,000 |
| Other\tintangibles | 17,300 |
| Total\tintangible\tassets | 1,232,300 |
| Goodwill | 1,549,868 |
| Other\tlong-term\tassets | 36,255 |
| Deferred\tincome\ttaxes | 24,334 |
| Total\tassets\tacquired | $4,227,148 |

| Liabilities	assumed: |  |
| :--- | :--- |
| Current\tliabilities | $120,525 |
| Long-term\tdebt,\tincluding\tcurrent\tportion | 702,480 |
| Other\tlong-term\tliabilities | 60,489 |
| Deferred\tincome\ttaxes | 219,710 |
| Total\tliabilities\tassumed | $1,103,204 |
| Other: |  |
| Unearned\tcompensation\ton\tunvested\toptions | 4,861 |
| Net\tassets\tacquired | $3,128,805 |

Other	Acquisitions—During	the	years	ended	December	31,	2005,	2004	and	2003,	the	Company	used	cash	to	acquire	a	total	of	30	towers,	214	towers	and	561	towers	for approximately	$6.0	million,	$33.4	million	and	$95.1	million,	respectively,	primarily	in	Mexico	and	Brazil	under	agreements	with	NII	Holdings,	Inc.	and	Iusacell	Celular.

Unaudited	Pro	Forma	Operating	Results—The	following	table	presents	the	unaudited	pro	forma	consolidated	results	of	operations	of	the	Company	for	the	years	ended December	31,	2005	and	2004,	respectively,	as	if	the	merger	with	SpectraSite,	Inc.	was	completed	as	of	January	1,	2005	and	2004,	as	shown	below.	Unaudited	pro	forma results	of	operations	of	the	other	acquisitions	are	not	presented	due	to	their	insignificant	impact	on	the	Company's	consolidated	results	of	operations.

|  | 2005 | 2004 |
| :--- | :--- | :--- |
| Revenues | $1,178,284 | $1,080,394 |
| Loss\tbefore\tcumulative\teffect\tof\tchange\tin\taccounting\tprinciple | (168,068) | (260,732) |
| Net\tloss | (203,594) | (260,732) |
| Basic\tand\tdiluted\tloss\tper\tcommon\tshare\tamounts: |  |  |
| Loss\tbefore\tcumulative\teffect\tof\tchange\tin\taccounting\tprinciple | $(0.42) | $(0.66) |
| Net\tloss | $(0.50) | $(0.66) |

The	pro	forma	amounts	include	the	historical	operating	results	of	the	Company	and	SpectraSite,	Inc.	with	appropriate	adjustments	that	give	effect	to	depreciation, amortization	and	accretion,	interest	expense,	amortization	of	unearned	compensation	relating	to	unvested	stock	options	assumed,	income	taxes,	and	certain	conforming accounting	policies	of	the	Company.	The	pro	forma	amounts	for	the	year	ended	December	31,	2005	contain	approximately	$20.7	million	of	merger	related	costs	incurred	by SpectraSite,	Inc.	prior	to	the	merger.	The	pro	forma	amounts	are	not	necessarily	indicative	of	the	operating	results	that	would	have	occurred	if	the	acquisition	and	related transactions	had	been	completed	at	the	beginning	of	the	applicable	periods	presented.	In	addition,	the	pro	forma	amounts	are	not	necessarily	indicative	of	operating	results	in future	periods.

# 3.				DISCONTINUED	OPERATIONS

In	2004	and	2003,	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	of	the	discontinued	operations	that	were	not	disposed	of	as	of	December	31,	2004	were	reflected	as	assets	held	for	sale	in	the	accompanying consolidated	balance	sheet.

The	following	table	presents	summary	operating	results	of	the	discontinued	operations	for	the	years	ended	December	31,	(in	thousands):

|  | 2005 | 2004 | 2003 |
| :--- | :--- | :--- | :--- |
| Revenue |  | $71,993 | $283,124 |
| Loss\tfrom\tdiscontinued\toperations |  | (11,821) | (13,604) |
| Income\ttax\tbenefit\ton\tloss\tfrom\tdiscontinued\toperations |  | 4,101 | 1,587 |
| Net\tloss\ton\tdisposal\tof\tdiscontinued\toperations,\tnet\tof\ttax\tbenefit\tof\t$1,042,\t$337\tand\t$10,160\trespectively | $(1,935) | (625) | (48,458) |
| Loss\tfrom\tdiscontinued\toperations,\tnet | $(1,935) | $(8,345) | $(60,475) |

As	of	December	31,	2004,	the	Company	had	assets	owned	by	its	Kline	Iron	&	Steel	Co,	Inc.	(Kline)	subsidiary	held	for	sale	that	were	comprised	of	property	and	equipment, net	of	$3.4	million.

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.

Tower	Construction	Services	Unit—In	November	2004,	the	Company	consummated	the	sale	of	its	tower	construction	services	unit	(previously	included	in	the	Company's network	development	services	segment),	including	$3.9	million	of	inventory	and	$5.2	million	of	net	property	and	equipment.	Total	consideration	was	approximately	$9.1 million,	including	$6.8	million	of	cash	proceeds,	subject	to	adjustment,	and	the	buyer's	assumption	of	$2.3	million	of	capital	lease	obligations.	Pursuant	to	this	transaction, the	Company	recorded	a	net	loss	on	disposal	of	approximately	$1.7	million,	which	is	reflected	in	loss	from	discontinued	operations,	net,	in	the	accompanying	consolidated statement	of	operations	for	the	year	ended	December	31,	2004.

Kline,	Iron	&	Steel—In	June	2003,	the	Company	committed	to	a	plan	to	sell	its	steel	fabrication	and	tall	tower	construction	service	subsidiary,	Kline	(previously	included	in the	Company's	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.	In	March	2004,	the Company	sold	substantially	all	the	assets	of	Kline	for	approximately	$4.0	million.

Verestar—In	December	2002,	the	Company	committed	to	a	plan	to	sell	Verestar	by	December	31,	2003.	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.	As	described	in	note	9,	the	Company	has	incurred	costs	in	connection	with	its	involvement	in the	bankruptcy	proceedings	of	Verestar,	which	are	reflected	within	discontinued	operations	in	the	accompanying	consolidated	statements	of	operations.

The	Company	recognized	aggregate	impairment	charges	related	to	its	investment	in	Verestar	of	approximately	$26.5	million	for	the	year	ended	December	31,	2003.	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	year	ended	December	31,	2003.	(See	note	9.)

Other	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	Company's	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.	The Company	received	$0.5	million	of	this	amount	in	January	2005.	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	included	in	the Company's	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	Company's	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	March	2003,	the	Company	consummated	the	sale	of	an	office	building	in	Schaumburg,	Illinois	(previously	held	primarily	as	rental	property	and	included	in	the	Company's rental	and	management	segment)	for	net	proceeds	of	approximately	$10.3	million	in	cash	and	recorded	a	net	loss	on	disposal	of	$0.1	million	in	the	accompanying consolidated	statement	of	operations	for	the	year	ended	December	31,	2003.

# 4.				PROPERTY	AND	EQUIPMENT

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

|  | 2005 | 2004 |
| :--- | :--- | :--- |
| Towers | $4,134,155 | $2,788,162 |
| Equipment | 167,504 | 115,244 |
| Buildings\tand\timprovements | 184,951 | 162,120 |
| Land\tand\timprovements | 215,974 | 176,937 |
| Construction-in-progress | 36,991 | 27,866 |
| Total | 4,739,575 | 3,270,329 |
| Less\taccumulated\tdepreciation\tand\tamortization | (1,279,049) | (996,973) |
| Property\tand\tequipment,\tnet | $3,460,526 | $2,273,356 |

# 5.				GOODWILL	AND	OTHER	INTANGIBLE	ASSETS

The	Company's	net	carrying	amount	of	goodwill	was	approximately	$2.1	billion	as	of	December	31,2005	and	$592.7	million	as	of	December	31,	2004,	all	of	which	related	to its	rental	and	management	segment.	The	increase	in	the	carrying	value	was	as	a	result	of	the	goodwill	of	$1.5	billion	acquired	in	the	merger	with	SpectraSite,	Inc.	(See	note	2.)

The	Company	has	selected	December	1	as	the	date	to	perform	its	annual	impairment	test.	In	performing	its	2005	and	2004	testing,	the	Company	completed	an	internal appraisal	and	estimated	the	fair	value	of	the	rental	and	management	reporting	unit	that	contains	goodwill	utilizing	future	discounted	cash	flows	and	market	information.	Based on	the	appraisals	performed,	the	Company	determined	that	goodwill	in	its	rental	and	management	segment	was	not	impaired.

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

|  | 2005 | 2004 |
| :--- | :--- | :--- |
| Acquired\tcustomer\tbase\tand\tnetwork\tlocation\tintangibles | $2,606,546 | $1,369,607 |
| Deferred\tfinancing\tcosts | 65,623 | 89,736 |
| Acquired\tlicenses\tand\tother\tintangibles | 51,703 | 43,404 |
| Total | 2,723,872 | 1,502,747 |
| Less\taccumulated\tamortization | (646,560) | (517,444) |
| Other\tintangible\tassets,\tnet | $2,077,312 | $985,303 |

The	Company	amortizes	its	intangible	assets	over	periods	ranging	from	three	to	fifteen	years.	Amortization	of	intangible	assets	for	the	years	ended	December	31,	2005	and 2004	aggregated	approximately	$136.0	million	and	$97.8	million,	respectively	(excluding	amortization	of	deferred	financing	costs,	which	is	included	in	interest	expense).	The Company	expects	to	record	amortization	expense	of	approximately	$183.6	million,	$178.3	million,	$174.4	million,	$172.7	million	and	$170.3	million,	for	the	years	ended December	31,	2006,	2007,	2008,	2009	and	2010,	respectively.	These	amounts	are	subject	to	changes	in	estimates	until	the	preliminary	allocation	of	the	SpectraSite	purchase price	is	finalized.

# 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,	2005	and	2004,	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,	2005	and	2004,	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	served	as	a	director	of	TV	Azteca	from	December	1999	to	February	2006.

As	of	December	31,	2005	and	2004,	the	Company	also	had	other	long-term	notes	receivable	outstanding	of	approximately	$11.1	million	and	$11.2	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):

|  | 2005 | 2004 |
| :--- | :--- | :--- |
| American\tTower\tcredit\tfacility | $793,000 | $698,000 |
| SpectraSite\tcredit\tfacility | 700,000 |  |
| Senior\tsubordinated\tnotes | 400,000 | 400,000 |
| Senior\tsubordinated\tdiscount\tnotes,\tnet\tof\tdiscount\tand\twarrant\tvaluation | 160,252 | 303,755 |
| Senior\tnotes,\tnet\tof\tdiscount\tand\tpremium | 726,754 | 1,001,817 |
| Convertible\tnotes,\tnet\tof\tdiscount | 773,058 | 830,056 |
| Notes\tpayable\tand\tcapital\tleases | 60,365 | 59,986 |
| Total | 3,613,429 | 3,293,614 |
| Less\tcurrent\tportion\tof\tother\tlong-term\tobligations | (162,153) | (138,386) |
| Long-term\tdebt | $3,451,276 | $3,155,228 |

New	Credit	Facilities—In	October	2005,	the	Company	refinanced	the	two	existing	credit	facilities	of	its	principal	operating	subsidiaries.	The	Company	replaced	the	existing American	Tower	$1.1	billion	senior	secured	credit	facility	with	a	new	$1.3	billion	senior	secured	credit	facility	and	replaced	the	existing	SpectraSite	$900.0	million	senior secured	credit	facility	with	a	new	$1.15	billion	senior	secured	credit	facility.	As	a	result	of	the	repayment	of	the	previous	credit	facilities,	the	Company	recorded	a	net	loss	on retirement	of	long-term	obligations	of	$9.8	million	in	the	fourth	quarter	of	2005.

As	of	December	31,	2005,	the	new	American	Tower	credit	facility	consists	of	the	following:

•a	$300.0	million	revolving	credit	facility,	against	which	approximately	$18.2	million	of	undrawn	letters	of	credit	are	outstanding	at	December	31,	2005,	maturing on	October	27,	2010;

The	borrowers	under	the	American	Tower	credit	facility	include	ATI,	American	Tower,	L.P.,	American	Tower	International,	Inc.	and	American	Tower	LLC.	The	Company and	the	borrowers'	restricted	subsidiaries	(as	defined	in	the	loan	agreement)	have	guaranteed	all	of	the	loans	under	the	credit	facility.	These	loans	are	secured	by	liens	on	and security	interests	in	substantially	all	assets	of	the	borrowers	and	the	restricted	subsidiaries,	with	a	carrying	value	aggregating	approximately	$4.0	billion	at	December	31, 2005.	At	closing,	the	Company	drew	down	the	entire	Term	Loan	A	of	the	American	Tower	credit	facility	and	used	the	net	proceeds	to	repay	principal	and	interest	on	the $745.0	million	outstanding	under	the	previous	American	Tower	credit	facility.

In	December	2005,	the	Company	drew	down	$43.0	million	of	the	Delayed	Draw	Term	Loan	to	finance	repurchases	of	ATI	12.25%	senior	subordinated	discount	notes	due 2008	(ATI	12.25%	Notes).	As	of	December	31,	2005,	the	Company	had	$793.0	million	outstanding	under	the	new	American	Tower	credit	facility.	Under	the	terms	of	the new	American	Tower	credit	facility,	the	Company	could	borrow	approximately	$488.8	million	while	remaining	in	compliance	with	the	applicable	covenants	as	of December	31,	2005.

As	of	December	31,	2005,	the	new	SpectraSite	credit	facility	consists	of	the	following:

•a	$250.0	million	revolving	credit	facility,	against	which	approximately	$4.6	million	of	undrawn	letters	of	credit	were	outstanding	at	December	31,	2005,	maturing on	October	27,	2010;

The	borrower	under	the	SpectraSite	credit	facility	is	SpectraSite	Communications.	SpectraSite	Communications,	its	parent	company	(SpectraSite,	LLC),	and	its	restricted subsidiaries	(as	defined	in	the	loan	agreement)	have	guaranteed	all	of	the	loans	under	the	credit	facility.	These	loans	are	secured	by	liens	on	and	security	interests	in substantially	all	assets	of	the	borrower	and	the	restricted	subsidiaries,	with	a	carrying	value	aggregating	approximately	$4.0	billion	at	December	31,	2005.	At	closing,	the Company	drew	down	the	entire	Term	Loan	A	of	the	SpectraSite	credit	facility	and	used	the	net	proceeds	to	repay	principal	and	interest	on	the	$697.0	million	principal	amount outstanding	under	the	previous	SpectraSite	credit	facility.

As	of	December	31,	2005,	the	Company	had	$700.0	million	outstanding	under	the	new	SpectraSite	credit	facility.	Under	the	terms	of	the	new	SpectraSite	credit	facility,	the Company	could	borrow	approximately	$445.4	million	while	remaining	in	compliance	with	the	applicable	covenants	as	of	December	31,	2005.

The	revolving	credit	facility	and	Delayed	Draw	Term	Loan	components	of	each	of	the	American	Tower	and	SpectraSite	credit	facilities	remained	undrawn	at	closing.	Each credit	facility	provides	that	any	portion	of	the

Delayed	Draw	Term	Loan	component	that	is	not	drawn	as	of	October	27,	2006	will	be	canceled.	As	of	December	31,	2005,	the	Company	had	drawn	$43.0	million	of	the Delayed	Draw	Tem	Loan	under	the	American	Tower	credit	facility.	Interest	rates	for	the	revolving	loan	and	the	term	loan	components	of	each	of	the	credit	facilities	are determined	at	the	option	of	the	borrowers	under	the	facility	and	range	between	0.50%	and	1.25%	above	the	LIBOR	rate	for	LIBOR	based	borrowings	or	between	0.0%	and 0.25%	above	the	defined	base	rate	for	base	rate	borrowings,	in	each	case	based	on	the	applicable	borrowers'	debt	ratings.	A	quarterly	commitment	fee	on	the	undrawn	portion of	each	credit	facility	is	required,	ranging	from	0.10%	to	0.375%	per	annum,	based	on	the	applicable	borrowers'	debt	ratings.

The	American	Tower	and	SpectraSite	credit	facilities	contain	certain	financial	ratios	and	operating	covenants	and	other	restrictions	(including	limitations	on	additional	debt, guaranties,	sales	of	assets	and	liens)	with	which	the	borrowers	and	their	restricted	subsidiaries	must	comply.	Each	credit	facility	contains	the	following	two	financial maintenance	tests	with	which	the	borrowers	under	the	applicable	credit	facility	must	comply:

Any	failure	to	comply	with	the	financial	and	operating	covenants	of	the	American	Tower	credit	facility	or	the	SpectraSite	credit	facility	would	not	only	prevent	the	Company from	being	able	to	borrow	additional	funds	under	the	revolving	loans,	but	would	constitute	a	default,	resulting	in,	among	other	things,	the	amounts	outstanding,	including	all accrued	interest	and	unpaid	fees,	becoming	immediately	due	and	payable.	As	of	December	31,	2005,	the	Company	was	in	compliance	with	all	of	the	foregoing	tests.

Each	credit	facility	has	a	term	of	five	years	and	matures	on	October	27,	2010.	All	amounts	will	be	due	and	payable	in	full	at	maturity.	The	credit	facilities	do	not	require amortization	of	principal	and	may	be	paid	prior	to	maturity	in	whole	or	in	part	at	the	borrowers'	option	without	penalty	or	premium.	The	new	credit	facilities	allow	the Company	to	use	borrowings	for	general	corporate	purposes	and,	provided	certain	conditions	are	met,	permit	the	use	of	borrowings	under	the	credit	facilities	and	internally generated	funds	to	repurchase	the	Company's	equity	securities	and	repurchase	and	refinance	other	indebtedness	without	additional	lender	approval.

Previous	American	Tower	Credit	Facilities—	In	each	of	2005,	2004	and	2003,	the	Company	amended	its	previous	American	Tower	Credit	facilities.	The	Company	amended its	credit	facility	in	2003	(2003	Credit	Facility),	refinanced	the	2003	Credit	Facility	with	a	new	credit	facility	in	2004	(2004	Credit	Facility),	and	amended	the	2004	Credit Facility	in	2005.	As	discussed	above,	the	2004	Credit	Facility	was	terminated	and	repaid	in	October	2005	in	connection	with	the	implementation	of	the	Company's	new American	Tower	credit	facility.

In	May	2005,	the	Company	amended	its	2004	Credit	Facility	to	replace	the	$397.0	million	Term	Loan	B	due	August	31,	2011	with	a	new	$397.0	million	Term	Loan	C	due August	31,	2011.	The	new	Term	Loan	C	had	substantially	the	same	terms	as	the	previous	Term	Loan	B,	except	that	the	interest	rate	spreads	for	the	existing	LIBOR	and	base rate	loans	were	reduced.

In	May	2004,	the	Company	refinanced	its	2003	Credit	Facility	and	replaced	it	with	the	2004	Credit	Facility,	a	$1.1	billion	senior	secured	credit	facility.	At	closing,	the Company	received	$685.5	million	of	net	proceeds	from	the	borrowings	under	the	2004	Credit	Facility,	after	deducting	related	expenses	and	fees.	Approximately	$670.0 million	of	the	net	proceeds	were	used	to	repay	principal	and	interest	on	the	2003	Credit	Facility.	The	Company	used	the	remaining	net	proceeds	of	$15.5	million	for	general corporate	purposes,	including	the	repurchase	of	other	outstanding	debt	securities.	The	Company	recorded	a	charge	of	$11.7	million	related	to	the	write-off	of

deferred	financing	fees	associated	with	the	2003	Credit	Facility,	which	is	reflected	in	loss	on	retirement	of	long-term	obligations	in	the	accompanying	consolidated	statement of	operations	for	the	year	ended	December	31,	2004.

In	January	2004,	the	Company	amended	its	2003	Credit	Facility	primarily	to	facilitate	the	7.50%	senior	notes	offering	described	below.	The	amendment	permitted	the Company,	among	other	things,	to	complete	the	offering	provided	that	the	net	proceeds	were	used	to	prepay	obligations	under	its	convertible	notes.	The	Company	also refinanced	its	$267.0	million	Term	Loan	B	under	its	2003	Credit	Facility	with	a	new	Term	Loan	C	due	December	31,	2007.	The	new	Term	Loan	C	had	substantially	the	same terms	as	the	previous	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.

During	2003,	the	Company	reduced	the	borrowing	capacity	under	its	2003	Credit	Facility	through	certain	amendments	and	related	prepayments	of	$938.8	million	and principal	payments	of	$61.5	million.	In	connection	with	the	amendments	during	2003,	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	2003	Credit	Facility	of	approximately	$11.9	million.	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.

For	the	years	ended	December	31,	2004	and	2003	the	combined	weighted	average	interest	rate	related	to	the	Company's	previous	American	Tower	credit	facilities	was 4.35%,	and	3.85%	respectively.	Commitment	fees	incurred	by	the	Company	related	to	the	previous	American	Tower	credit	facilities	aggregated	approximately	$2,761,000, and	$2,376,000	for	the	years	ended	December	31,	2004	and	2003,	respectively.

Notes	Offerings—The	following	is	a	description	of	the	Company's	notes	offerings	during	the	years	ended	December	31,	2004	and	2003.	The	Company	did	not	complete	any notes	offerings	in	the	year	ended	December	31,	2005.

7.125%	Senior	Notes—In	October	and	December	2004,	the	Company	sold	$300.0	million	and	$200.0	million,	respectively,	principal	amount	of	7.125%	senior	notes	due October	15,	2012	(7.125%	Notes)	through	institutional	private	placements.	The	net	proceeds	were	approximately	$292.8	million	in	October	2004	and	$199.8	million	in December	2004,	after	deducting	the	commissions	payable	to	the	initial	purchaser	and	other	expenses	related	to	the	offering.	The	$200.0	million	principal	amount	of	7.125% Notes	issued	in	December	2004	were	issued	at	101.25%	of	face	amount.	All	net	proceeds	were	used	to	redeem	a	portion	of	the	Company's	9	3/8%	senior	notes	due	2009 (9	3/8%	Notes)	as	described	below.

The	7.125%	Notes	mature	on	October	15,	2012,	and	interest	is	payable	semi-annually	in	arrears	on	April	15	and	October	15	of	each	year,	beginning	April	15,	2005.	The Company	may	redeem	up	to	35%	of	the	original	principal	amount	of	the	7.125%	Notes	prior	to	October	15,	2007	at	a	price	equal	to	107.125%	of	the	principal	amount	plus accrued	and	unpaid	interest	using	proceeds	from	certain	types	of	equity	offerings.	The	Company	may	redeem	all	or	a	partial	amount	of	the	original	principal	amount	of	the 7.125%	Notes	prior	to	October	15,	2008	at	a	price	equal	to	100%	of	the	principal	amount	plus	an	applicable	premium.	The	Company	may	redeem	all	or	a	partial	amount	of the	original	principal	amount	of	the	7.125%	Notes	on	or	after	October	15,	2008	at	an	initial	redemption	price	of	103.563%,	subject	to	a	ratable	decline	in	each	of	the following	years	to	100%	of	the	principal	amount	in	2010	and	thereafter.	The	indenture	for	the	7.125%	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.	The	7.125%	Notes	rank	equally	with	the	Company's	other	senior	unsecured	debt	obligations,	the	Company's	convertible	notes	and	the	7.50% senior	notes	due	2012	and	are	structurally	and	effectively	junior	to	indebtedness	outstanding	under	the	American	Tower	and	SpectraSite	credit	facilities	and	the	ATI	7.25% senior	subordinated	notes	due	2011	(ATI	7.25%	Notes).

7.50%	Senior	Notes—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	commissions	payable	to	the	initial	purchasers	and	other	expenses	related to	the	offering.	The	net	proceeds	were	used	to	redeem	all	of	the	Company's	outstanding	6.25%	convertible	notes	due	2009	(6.25%	Notes)	and	repurchase	a	portion	of	the Company's	outstanding	5.0%	convertible	notes	due	2010	(5.0%	Notes),	as	discussed	below.

The	7.50%	Notes	mature	on	May	1,	2012,	and	interest	is	payable	semiannually	in	arrears	on	May	1	and	November	1	of	each	year.	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	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.	The	7.50%	Notes	rank	equally	with	the	Company's	convertible	notes	and	the	7.125%	Notes	and	are	structurally	and	effectively	junior	to indebtedness	outstanding	under	the	American	Tower	and	SpectraSite	credit	facilities	and	the	ATI	7.25%	Notes.

3.00%	Convertible	Notes—In	August	2004,	the	Company	sold	$345.0	million	principal	amount	of	3.00%	convertible	notes	due	August	15,	2012	(3.00%	Notes)	through	an institutional	private	placement.	The	net	proceeds	were	approximately	$335.9	million,	after	deducting	the	commissions	payable	to	the	initial	purchaser	and	other	expenses related	to	the	offering.	The	net	proceeds	were	used	to	redeem	a	portion	of	the	9	3/8%	Notes,	as	described	below.

The	3.00%	Notes	mature	on	August	15,	2012,	and	interest	is	payable	semi-annually	in	arrears	on	February	15	and	August	15	of	each	year.	The	3.00%	Notes	are	convertible	at any	time	prior	to	maturity,	subject	to	their	prior	redemption	or	repurchase,	into	shares	of	the	Company's	Class	A	common	stock	at	a	conversion	price	of	approximately	$20.50 per	share,	subject	to	adjustment	in	certain	events.	Upon	a	fundamental	change	of	control	as	defined	in	the	notes	indenture,	the	holders	of	the	3.00%	Notes	may	require	the Company	to	repurchase	all	or	part	of	the	3.00%	Notes	for	a	cash	purchase	price	equal	to	100%	of	the	principal	amount.	In	addition,	upon	a	fundamental	change	of	control,	the holders	may	elect	to	convert	their	notes	based	on	a	conversion	rate	adjustment	that	entitles	the	holders	to	receive	additional	shares	of	the	Company's	Class	A	common	stock upon	conversion	depending	on	the	terms	and	timing	of	the	change	of	control.	The	Company	may	redeem	the	3.00%	notes	after	August	20,	2009	at	an	initial	redemption	price of	101.125%	of	the	principal	amount,	subject	to	a	ratable	decline	after	August	15	of	the	following	year	to	100%	of	the	principal	amount	in	2012.	The	3.00%	Notes	rank equally	with	the	Company's	other	convertible	notes,	the	7.50%	Notes	and	the	7.125%	Notes	and	are	structurally	and	effectively	junior	to	indebtedness	outstanding	under	the American	Tower	and	SpectraSite	credit	facilities	and	the	ATI	7.25%	Notes.

In	certain	instances	upon	a	fundamental	change	of	control,	the	holders	of	the	3.00%	Notes	may	elect	to	convert	their	notes	based	on	a	conversion	rate	adjustment	and	receive additional	shares	of	the	Company's	Class	A	common	stock,	the	acquirer's	common	stock	or,	at	the	election	of	the	acquirer,	in	certain	instances,	such	feature	may	be	settled	in cash.	This	feature	qualifies	as	an	embedded	derivative	under	SFAS	No.	133.	In	addition,	the	Company's	7.125%	Notes	contain	a	call	provision	that	also	represents	an embedded	derivative.	The	Company	has	recorded	the	fair	value	of	these	provisions,	$1.3	million,	as	a	discount	under	the	3.00%	Notes	and	7.125%	Notes	and	as	a	liability	in other	long-term	liabilities	in	the	accompanying	December	31,	2005	and	2004	consolidated	balance	sheet,	respectively.	The	Company	will	record	any	changes	in	fair	value	to the	liability	in	future	periods	to	other	expense	and	will	amortize	the	discount	to	interest	expense	within	its	consolidated	statement	of	operations.

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

The	ATI	7.25%	Notes	mature	on	December	1,	2011	and	interest	is	payable	semi-annually	in	arrears	on	June	1	and	December	1	of	each	year.	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	prior	to	December	1,	2006	at	a	price	equal	to	107.25%	of the	principal	amount,	plus	accrued	and	unpaid	interest	using	proceeds	from	certain	types	of	equity	offerings.	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	ATI	7.25%	Notes	are	jointly	and severally	guaranteed	on	a	senior	subordinated	basis	by	the	Company	and	substantially	all	of	the	wholly	owned	domestic	subsidiaries	of	ATI	and	the	Company,	other	than SpectraSite	and	its	subsidiaries.	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	American	Tower	and	SpectraSite	credit	facilities.	The	ATI 7.25%	Notes	are	structurally	senior	in	right	of	payment	to	all	other	existing	and	future	indebtedness	of	the	Company,	including	the	Company's	convertible	notes	and	senior notes.

3.25%	Convertible	Notes—In	August	2003,	the	Company	sold	$210.0	million	principal	amount	of	3.25%	convertible	notes	due	August	1,	2010	(3.25%	Notes)	through	an institutional	private	placement.	The	net	proceeds	were	approximately	$202.8	million,	after	deducting	the	initial	purchasers'	discounts	and	commissions	and	other	expenses related	to	the	offering.	The	Company	utilized	$100.0	million	of	the	net	proceeds	to	prepay	a	portion	of	its	outstanding	indebtedness	under	the	2003	Credit	Facility	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	due	2009	and	5.0%	Notes.

The	3.25%	Notes	mature	on	August	1,	2010,	and	interest	is	payable	semi-annually	in	arrears	on	February	1	and	August	1	of	each	year.	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,	the	7.50%	Notes	and	the	7.125%	Notes	and	are	structurally	and effectively	junior	to	indebtedness	outstanding	under	the	American	Tower	and	SpectraSite	credit	facilities	and	the	ATI	7.25%	Notes.

As	described	below,	during	the	year	ended	December	31,	2005,	holders	of	$57.1	million	principal	amount	of	the	3.25%	Notes	converted	their	holdings	to	shares	of	the Company's	Class	A	common	stock.	As	of	December	31,	2005	and	2004,	the	Company	had	$152.9	million	and	$210.0	million	outstanding	under	the	3.25%	Notes.

ATI	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%	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	2003	Credit	Facility	and	to	repurchase	other	outstanding	debt.

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	balance	sheets	and	is	being	accreted	to interest	expense	utilizing	the	effective	interest	method	over	the	applicable	term.

The	Company	was	permitted	to	redeem	the	ATI	12.25%	Notes	on	or	after	February	1,	2006,	and	the	Company	redeemed	all	outstanding	ATI	12.25%	Notes	on	February	1, 2006,	as	discussed	below.	Upon	completion	of	this	redemption,	no	ATI	12.25%	Notes	remained	outstanding.	(See	note	18.)

The	ATI	12.25%	Notes	accrued	no	cash	interest.	Instead,	the	accreted	value	of	each	ATI	12.25%	Note	increased	between	the	date	of	original	issuance	and	maturity	(August	1, 2008)	at	a	rate	of	12.25%	per	annum.	The	effective	interest	rate	on	the	ATI	12.25%	Notes	(after	giving	effect	to	the	accretion	of	the	original	discount	and	the	accretion	of	the warrants)	was	14.7%	per	annum.	The	warrants	are	exercisable	at	any	time	on	or	after	January	29,	2006	and	will	expire	on	August	1,	2008.	The	redemption	price	of	the	ATI 12.25%	Notes	was	106.125%	of	the	accreted	value	on	the	first	redemption	date,	February	1,	2006,	and	was	subject	to	a	ratable	decline	the	following	year	to	100%	of	the accreted	value	in	2008.	The	indenture	governing	the	ATI	12.25%	Notes	contained	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	were	fully	and	unconditionally	guaranteed	on	a	joint and	several	basis	by	the	Company	and	substantially	all	of	the	wholly	owned	domestic	subsidiaries	of	ATI	and	the	Company,	other	than	SpectraSite	and	its	subsidiaries.	The ATI	12.25%	Notes	ranked	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	American	Tower	and	SpectraSite	credit	facilities,	and	were	pari	passu	with	the	ATI 7.25%	Notes.	The	ATI	12.25%	Notes	were	structurally	senior	in	right	of	payment	to	all	other	existing	and	future	indebtedness	of	the	Company,	including	the	Company's convertible	notes	and	senior	notes.

As	of	December	31,	2005	and	2004,	the	outstanding	debt	under	the	ATI	12.25%	Notes	was	$227.7	million	face	amount	($160.3	million	accreted	value,	net	of	$7.2	million fair	value	allocated	to	warrants),	and	$498.2	million	face	amount	($303.8	million	accreted	value,	net	of	$21.6	million	fair	value	allocated	to	warrants),	respectively.

Notes	Repurchases,	Redemptions	and	Conversions—The	following	is	a	description	of	the	Company's	notes	repurchases,	redemptions	and	conversions	during	the	years	ended December	31,	2005,	2004	and	2003.

9	3/8%	Senior	Notes—During	the	year	ended	December	31,	2005,	the	Company	redeemed	an	aggregate	of	$274.9	million	principal	amount	of	its	9	3/8%	senior	notes	due	2009 (9	3/8%	Notes),	representing	all	of	its	outstanding

9	3/8%	Notes.	The	Company	completed	partial	redemptions	of	9	3/8%	Notes	in	accordance	with	the	terms	of	the	indenture	in	January,	July	and	September	2005	for	an aggregate	redemption	price	of	$288.3	million,	plus	approximately	$9.5	million	in	accrued	interest.	In	connection	with	these	redemptions,	the	Company	recorded	a	charge	of $17.9	million	related	to	amounts	paid	in	excess	of	carrying	value	and	write-off	of	deferred	financing	fees,	which	is	reflected	in	loss	on	retirement	of	long-term	obligations	in the	accompanying	consolidated	statement	of	operations	for	the	year	ended	December	31,	2005.

During	the	year	ended	December	31,	2004,	the	Company	redeemed	an	aggregate	of	$613.0	million	principal	amount	of	its	9	3/8%	Notes.	The	Company	completed	partial redemptions	of	9	3/8%	Notes	in	accordance	with	the	terms	of	the	indenture	in	September	and	November	2004	for	an	aggregate	redemption	price	of	$654.0	million,	plus approximately	$11.0	million	in	accrued	interest.	In	connection	with	these	redemptions,	the	Company	recorded	a	charge	of	$52.5	million	related	to	amounts	paid	in	excess	of carrying	value	and	write-off	of	deferred	financing	fees,	which	is	reflected	in	loss	on	retirement	of	long-term	obligations	in	the	accompanying	consolidated	statement	of operations	for	the	year	ended	December	31,	2004.

During	the	year	ended	December	31,	2004,	in	addition	to	the	redemptions	discussed	above,	the	Company	repurchased	in	privately	negotiated	transactions	an	aggregate	of $112.1	million	principal	amount	of	its	9	3/8%	Notes	for	$118.9	million	in	cash.	As	a	consequence	of	these	transactions,	the	Company	recorded	an	aggregate	charge	of	$8.8 million	related	to	amounts	paid	in	excess	of	carrying	value	and	write-off	of	deferred	financing	fees,	which	is	reflected	in	loss	on	retirement	of	long-term	obligations	in	the accompanying	consolidated	statement	of	operations	for	the	year	ended	December	31,	2004.

ATI	12.25%	Notes—During	the	year	ended	December	31,	2005,	the	Company	repurchased	a	portion	of	its	ATI	12.25%	Notes	in	privately	negotiated	transactions.	The Company	repurchased	an	aggregate	of	$270.6	million	face	amount	($177.8	million	accreted	value,	net	of	$10.1	million	fair	value	allocated	to	warrants)	of	ATI	12.25%	Notes for	approximately	$208.4	million	in	cash.	The	Company	recorded	a	charge	of	$34.2	million	related	to	the	amounts	paid	in	excess	of	carrying	value	and	write-off	of	deferred financing	fees,	which	is	reflected	in	loss	on	retirement	of	long-term	obligations	in	the	accompanying	consolidated	statement	of	operations	for	the	year	ended	December	31, 2005.

During	the	year	ended	December	31,	2004,	the	Company	repurchased	in	privately	negotiated	transactions	an	aggregate	of	$309.7	million	face	amount	of	its	ATI	12.25% Notes	($179.4	million	accreted	value,	net	of	$14.7	million	fair	value	allocated	to	warrants)	for	approximately	$230.9	million	in	cash.	The	Company	recorded	a	charge	of $56.8	million	related	to	the	amounts	paid	in	excess	of	carrying	value	and	write-off	of	deferred	financing	fees,	which	is	reflected	in	loss	on	retirement	of	long-term	obligations in	the	accompanying	consolidated	statement	of	operations	for	the	year	ended	December	31,	2004.

In	December	2005,	the	Company	issued	a	notice	for	the	redemption	on	February	1,	2006	of	all	remaining	outstanding	ATI	12.25%	Notes.	Pursuant	to	the	indenture	for	the notes,	once	a	notice	to	redeem	is	issued,	notes	called	for	redemption	become	irrevocably	due	and	payable	on	the	redemption	date.	As	of	December	31,	2005,	there	was	$227.7 million	face	amount	($160.3	million	accreted	value,	net	of	$7.2	million	fair	value	allocated	to	warrants)	of	ATI	12.25%	Notes	outstanding.	On	February	1,	2006,	the Company	redeemed	$227.7	million	face	amount	of	ATI	12.25%	Notes	in	accordance	with	the	indenture	at	106.125%	of	their	accreted	value	for	an	aggregate	of	$179.5 million.	Accordingly,	such	amount	has	been	included	in	the	current	portion	of	long-term	obligations	in	the	accompanying	consolidated	balance	sheet	as	of	December	31, 2005.	The	Company	expects	to	record	a	charge	of	$19.9	million	in	the	first	quarter	of	2006	related	to	the	amounts	paid	in	excess	of	carrying

value	and	write-off	of	deferred	financing	fees.	Upon	completion	of	this	redemption,	no	ATI	12.25%	Notes	remained	outstanding.	(See	note	18.)

3.25%	Convertible	Notes—During	the	year	ended	December	31,	2005,	holders	of	an	aggregate	of	$57.1	million	principal	amount	of	the	Company's	3.25%	convertible	notes due	August	1,	2010	(3.25%	Notes)	converted	their	notes	into	an	aggregate	of	4.7	million	shares	of	the	Company's	Class	A	common	stock.	Pursuant	to	the	terms	of	the indenture,	the	holders	of	the	3.25%	Notes	received	81.808	shares	of	the	Company's	Class	A	common	stock	for	every	$1,000	principal	amount	of	notes	converted.	In connection	with	these	conversions,	the	Company	paid	such	holders	an	aggregate	of	$4.9	million,	calculated	based	on	the	accrued	and	unpaid	interest	on	the	3.25%	Notes	and the	discounted	value	of	future	interest	payments	on	such	notes.	The	Company	recorded	a	charge	of	$4.9	million	related	to	amounts	paid	in	excess	of	carrying	value	and	write- off	of	deferred	financing	fees,	which	is	reflected	in	loss	on	retirement	of	long-term	obligations	in	the	consolidated	statement	of	operations	for	the	year	ended	December	31, 2005.

6.25%	Convertible	Notes—In	February	2004,	the	Company	redeemed	all	of	its	outstanding	$212.7	million	principal	amount	of	6.25%	convertible	notes	due	2009	(6.25% Notes)	pursuant	to	the	terms	of	the	indenture	at	a	purchase	price	equal	to	102.083%	of	the	principal	amount,	plus	accrued	interest.	The	total	aggregate	redemption	price	was $221.9	million,	including	$4.8	million	in	accrued	interest.	The	Company	recorded	a	charge	of	$7.2	million	related	to	the	amounts	paid	in	excess	of	carrying	value	and	write- off	of	deferred	financing	fees,	which	is	reflected	in	loss	on	retirement	of	long-term	obligations	in	the	consolidated	statement	of	operations	for	the	year	ended	December	31, 2004.

5.0%	Convertible	Notes—During	the	year	ended	December	31,	2004,	the	Company	repurchased	in	privately	negotiated	transactions	an	aggregate	of	$73.7	million	principal amount	of	its	5.0%	convertible	notes	due	2010	(5.0%	Notes)	for	approximately	$73.3	million	in	cash.	The	Company	recorded	an	aggregate	charge	of	$0.7	million	related	to the	write-off	of	deferred	financing	fees	and	amounts	paid	in	excess	of	carrying	value.	Such	loss	is	reflected	in	loss	on	retirement	of	long-term	obligations	in	the	accompanying consolidated	statement	of	operations	for	the	year	ended	December	31,	2004.

2.25%	Convertible	Notes—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%	convertible	notes	due	2009	(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.	The	shares	issued	to	noteholders 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	consolidated	statement	of	operations	for	the	year	ended	December	31,	2003.

Capital	Lease	Obligations	and	Notes	Payable—The	Company's	capital	lease	obligations	and	notes	payable	approximated	$60.4	million	and	$60.0	million	as	of December	31,	2005	and	2004,	respectively.	These	obligations	bear	interest	at	rates	ranging	from	6.1%	to	9.5%	and	mature	in	periods	ranging	from	less	than	one	year	to approximately	seventy	years.

Maturities—As	of	December	31,	2005,	aggregate	carrying	value	of	long-term	debt,	including	capital	leases,	for	the	next	five	years	and	thereafter	are	estimated	to	be	(in thousands):

# Year	Ending	December	31,

| Year	Ending	December	31, |  |
| :--- | :--- |
| 2006\t(excluding\t$67,417\taccreted\tvalue\tattributable\tto\toriginal\tissue\tdiscount\tof\tATI\t12.25%\tNotes\tand\tfair\tvalue\tallocated\tto |  |
| warrants) | $162,153 |
| 2007 | 276,967 |
| 2008 | 873 |
| 2009 | 521 |
| 2010 | 1,646,458 |
| Thereafter | 1,525,291 |
| Total\tcash\tobligations | $3,612,263 |
| Accreted\tvalue\tof\tthe\tdiscount\tand\tpremium\tof\t3.00%\tNotes\tand\t7.125%\tNotes | 1,166 |
| Balance\tas\tof\tDecember\t31,\t2005 | $3,613,429 |

The	holders	of	the	Company's	5.0%	Notes	have	the	right	to	require	the	Company	to	repurchase	their	notes	on	specified	dates	prior	to	the	maturity	date	in	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 5.0%	Notes	have	been	included	in	the	table	above	as	if	such	notes	mature	the	date	on	which	the	put	rights	become	exercisable	in	2007.

# 8.				DERIVATIVE	FINANCIAL	INSTRUMENTS

The	Company	has	entered	into	interest	rate	protection	agreements	to	manage	exposure	on	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,	2005	and	2004	are	with	credit	worthy	institutions.

During	the	fourth	quarter	of	2005,	the	Company	entered	into	eight	interest	rate	swap	agreements	to	manage	exposure	to	variable	rate	interest	obligations	under	its	new American	Tower	and	SpectraSite	credit	facilities.	The	Company	has	designated	all	eight	of	these	swaps	as	cash	flow	hedges.

In	August	2005,	and	as	a	result	of	the	merger	with	SpectraSite,	Inc.,	the	Company	acquired	three	interest	rate	swap	instruments	and	one	interest	rate	cap	instrument.	The	three interest	rate	swaps,	which	had	a	fair	value	of	$6.7	million	at	the	date	of	acquisition,	have	an	aggregate	notional	amount	of	$300.0	million,	a	weighted	average	fixed	rate	of approximately	3.88%	and	expire	in	December	2009.	The	interest	rate	cap	has	a	notional	amount	of	$175.0	million,	a	fixed	rate	of	7.0%,	and	expires	in	February	2006.	The interest	rate	swaps	and	the	interest	rate	cap	were	not	designated	as	cash	flow	hedges.	During	the	year	ended	December	31,	2005,	the	Company	recorded	$3.0	million	of income,	representing	changes	in	fair	market	value	which	were	charged	to	other	income	(expense)	in	the	consolidated	statements	of	operations.

As	of	December	31,	2004,	the	Company	also	had	two	interest	rate	caps	outstanding	with	an	aggregate	notional	amount	of	$350.0	million	(each	at	an	interest	rate	of	6.0%)	that expire	in	2006.	As	of	December	31,	2004,	there	was	no	fair	value	associated	with	these	interest	rate	caps.

As	of	December	31,	2005,	the	carrying	amounts	of	the	Company's	derivative	financial	instruments,	along	with	the	estimated	fair	values	of	the	related	assets	(liabilities),	are	as follows	(in	thousands):

| Derivative | Notional<br>Amount | Interest	Range | Term | Carrying	Amount<br>and	Fair	Value |
| :--- | :--- | :--- | :--- | :--- |
| Interest\trate\tswaps | $300,000 | 3.88% | Expiring\tin\t2009 | $9,679 |
| Interest\trate\tswaps | 300,000 | 4.75% | Expiring\tin\t2010 | 49 |
| Interest\trate\tswaps | 150,000 | 4.88%-4.95% | Expiring\tin\t2010 | (909) |
| Interest\trate\tcaps | 350,000 | 6.0% | Expiring\tin\t2006 |  |
| Interest\trate\tcap | 175,000 | 7.0% | Expiring\tin\t2006 |  |
| Interest\trate\tcap | 25,000 | 8.0% | Expiring\tin\t2007 |  |
| Total |  |  |  | $8,819 |

During	the	year	ended	December	31,	2005,	the	Company	recorded	a	net	unrealized	loss	of	approximately	$0.8	million	(net	of	a	tax	benefit	of	approximately	$0.4	million)	in other	comprehensive	loss	for	the	change	in	fair	value	of	interest	rate	swaps	designated	as	cash	flow	hedges.	No	amounts	were	reclassified	into	results	of	operations	during	the year	ended	December	31,	2005.	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.

# 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	or	other inflation-based	indices,	are	recognized	on	a	straight-line	basis	over	the	term	of	the	lease.	(See	note	1.)

Future	minimum	rental	payments	under	non-cancelable	operating	leases	include	payments	for	certain	renewal	periods	at	the	Company's	option	because	failure	to	renew	could result	in	a	loss	of	the	applicable	tower	site	and	related	revenues	from	tenant	leases,	thereby	making	it	reasonably	assured	that	the	Company	will	renew	the	lease.	Such payments	in	effect	at	December	31,	2005	are	as	follows	(in	thousands):

| Year	Ending	December	31, |  |
| :--- | :--- |
| 2006 | $190,129 |
| 2007 | 183,595 |
| 2008 | 180,910 |
| 2009 | 178,456 |
| 2010 | 172,060 |
| Thereafter | 2,507,444 |
| Total | $3,412,594 |

Future	minimum	payments	under	capital	leases	(see	note	7)	in	effect	at	December	31,	2005	are	as	follows	(in	thousands):

Customer	Leases—The	Company's	lease	agreements	with	its	customers	vary	depending	upon	the	region	and	the	industry	of	the	customer.	In	the	United	States,	initial	terms for	television	and	radio	broadcast	leases	typically	range	between	10	to	20	years,	while	leases	for	wireless	communications	providers	generally	have	initial	terms	of	five	to	ten years.	In	Mexico	and	Brazil,	the	Company's	typical	tenant	lease	has	an	initial	term	of	10	years.	In	most	cases,	the	Company's	tenant	leases	have	multiple	renewal	terms	at	the option	of	the	customer.

Future	minimum	rental	receipts	expected	from	customers	under	non-cancelable	operating	lease	agreements	in	effect	at	December	31,	2005	are	as	follows	(in	thousands):

| Year	Ending	December	31, |  |
| :--- | :--- |
| 2006 | $1,044,097 |
| 2007 | 988,154 |
| 2008 | 930,441 |
| 2009 | 881,145 |
| 2010 | 759,347 |
| Thereafter | 2,150,543 |
| Total | $6,753,727 |

Verestar—Verestar,	Inc.,	a	subsidiary	of	the	Company,	filed	for	protection	under	Chapter	11	of	the	federal	bankruptcy	laws	in	December	2003.	In	connection	with	the bankruptcy	filing,	the	Company	asserted	certain	claims	against	Verestar	as	an	unsecured	creditor.	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	of	those	contracts	as	to	which	the	Company	is	primarily	or	secondarily liable	as	a	guarantor.	The	Company	accrued	its	initial	estimate	of	costs	to	settle	these	obligations	of	$10.0	million	as	of	December	31,	2003	and	has	adjusted	such	estimate	to reflect	actual	payments	and	changes	in	estimates	made	through	December	31,	2005.	The	liability	of	$3.2	million	is	included	in	accounts	payable	and	accrued	expenses	in	the accompanying	consolidated	balance	sheets	as	of	December	31,	2005	and	2004.

In	June	2004,	the	Bankruptcy	Court	approved	a	stipulation	between	Verestar	and	the	Official	Committee	of	Unsecured	Creditors	appointed	in	the	bankruptcy	proceeding	(the Committee)	that	permits	the	Committee	to	file	claims	on	behalf	of	Verestar	against	the	Company,	its	affiliates	and	certain	current	and	former	officers	and	directors	of Verestar	and	the	Company.	The	Committee	requested	and	received	authorization	from	the	Bankruptcy	Court	to	take	discovery	of	the	Company	and	certain	of	Verestar's current	and	former	officers	and

directors.	The	Company	produced	various	documents	and	a	limited	number	of	depositions	were	conducted	by	the	Committee.	In	July	2005,	the	Committee	filed	a	complaint in	the	U.S.	District	Court	for	the	Southern	District	of	New	York	against	the	Company	and	certain	of	its	and	Verestar's	current	and	former	officers,	directors	and	advisors,	and also	filed	a	complaint	in	the	Bankruptcy	Court	against	the	Company.	(The	case	initially	filed	in	the	District	Court	has	since	been	transferred	to	the	Bankruptcy	Court,	and both	cases	are	now	pending	as	a	single,	consolidated	case	before	the	same	Bankruptcy	judge.)	The	Company	may	be	obligated	or	may	agree	to	indemnify	certain	of	the defendants	named	in	the	litigation.	The	complaint	originally	filed	in	the	District	Court	asserts	various	causes	of	action	against	the	defendants,	including	declaratory	judgment for	alter	ego,	breach	of	fiduciary	duty,	conversion,	conspiracy,	tortuous	interference	with	contract	and	business	relations,	deepening	insolvency,	and	avoidance	and	recovery of	fraudulent	transfers	and	preferential	transfers.	In	connection	with	those	claims,	the	Committee	is	seeking	unspecified	compensatory	damages	of	not	less	than	$150.0 million,	punitive	damages	and	various	costs	and	fees.	The	complaint	originally	filed	in	the	Bankruptcy	Court	includes	an	objection	to	the	Company's	claims	against	Verestar and	seeks	to	recharacterize	and	equitably	subordinate	those	claims.	The	complaint	also	seeks	substantive	consolidation	of	the	Company's	assets	and	liabilities	with	Verestar's assets	and	liabilities.	During	2005,	the	Company,	together	with	the	individual	defendants,	filed	motions	to	dismiss	certain	claims	asserted	in	the	complaints.	In	February	2006, the	Bankruptcy	Court	heard	oral	arguments	on	the	motions	to	dismiss,	but	has	not	yet	decided	any	of	the	motions.	The	outcome	of	this	complex	litigation	cannot	be	predicted by	the	Company	with	certainty,	is	dependent	upon	many	factors	beyond	the	Company's	control,	and	could	take	several	years	to	resolve.	In	the	opinion	of	management,	the resolution	of	the	claims	made	against	the	Company	by	the	Committee	will	not	likely	have	a	material	adverse	effect	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	Verestar	bankruptcy	proceedings.	Such	costs	will	be recorded	as	incurred	and	reflected	within	discontinued	operations	in	the	accompanying	consolidated	financial	statements.

SBC	Transactions—SpectraSite	entered	into	an	agreement	with	SBC	Communications	Inc.	(SBC)	for	the	lease	or	sublease	of	approximately	2,500	towers	from	SBC	between December	2000	and	August	2004.	The	average	term	of	the	lease	or	sublease	for	all	sites	at	the	inception	of	the	agreement	was	approximately	27	years,	assuming	renewals	or extensions	of	the	underlying	ground	leases	for	the	sites.	SpectraSite	has	the	option	to	purchase	the	sites	subject	to	the	lease	or	sublease	upon	their	expiration.	Each	of	the towers	is	assigned	into	an	annual	tranche,	ranging	from	2013	to	2032,	which	represents	the	outside	expiration	date	for	the	sublease	rights	to	that	tower.	The	purchase	price	for each	site	is	a	fixed	amount	stated	in	the	sublease	for	that	site	plus	the	fair	market	value	of	certain	alterations	made	to	the	related	tower	by	SBC.	The	aggregate	purchase	option price	for	the	towers	leased	and	subleased	was	approximately	$282.4	million	as	of	December	31,	2005,	and	will	accrete	at	a	rate	of	10%	per	year	to	the	applicable	expiration	of the	lease	or	sublease	of	a	site.	For	all	such	sites	purchased	by	SpectraSite	at	the	expiration	of	the	lease	or	sublease,	SBC	has	the	right	to	continue	to	lease	the	reserved	space for	successive	one	year	terms	at	a	rent	equal	to	the	lesser	of	the	agreed	upon	market	rate	and	the	then	current	monthly	fee,	which	is	subject	to	an	annual	increase	based	on changes	in	the	CPI.

ALLTEL	Transaction—In	December	2000,	the	Company	entered	into	an	agreement	with	ALLTEL	to	acquire	communications	towers	from	ALLTEL	through	a	15-year sublease	agreement.	Pursuant	to	the	agreement	with	ALLTEL,	as	amended,	the	Company	acquired	rights	to	a	total	of	1,776	towers	in	tranches	between	April	2001	and	March 2002.	The	Company	has	the	option	at	the	expiration	of	the	sublease	period,	which	will	occur	between	April	2016	and	March	2017	based	on	the	original	closing	date	for	such tranche	of	towers,	to	purchase	the	tower	sites	at	a	purchase	price	per	tower	of	$27,500	and	will	accrete	at	a	rate	of	3%	per	annum.	The	aggregate	purchase	option	price	for	the subleased	towers	was	approximately	$56.2	million	as	of	December	31,	2005.	At	ALLTEL's	option,	at	the	expiration	of	the	sublease	period	the	purchase	price	will	be	payable in	cash	or	with	769	shares	of	the	Company's	Class	A	common	stock	per	tower.

Build-to-Suit	Agreements—As	of	December	31,	2005,	the	Company	was	party	to	various	arrangements	relating	to	the	construction	of	tower	sites	under	existing	build-to-suit agreements.	During	the	year	ended	December	31,	2005,	the	Company	completed	construction	on	137	towers	in	Mexico	pursuant	to	these	build-to-suit	agreements	for	an aggregate	cost	of	approximately	$24.2	million.	As	of	December	31,	2005,	the	Company	had	completed	construction	on	a	total	167	towers	in	Mexico	under	the	terms	of	these agreements,	and	the	Company	is	obligated	over	a	two-year	remaining	period	to	construct	approximately	130	additional	towers	in	Mexico	for	an	aggregate	cost	of approximately	$23.0	million.

Guarantees	and	Indemnifications—The	Company	complies	with	the	liability	and	measurement	provisions	of	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."	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,	2005,	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	Company	management,	after consultation	with	counsel,	other	than	the	litigation	related	to	the	Verestar	bankruptcy	discussed	above,	there	are	no	matters	currently	pending	which	would,	in	the	event	of	an adverse	outcome,	have	a	material	impact	on	the	Company's	consolidated	financial	position,	results	of	operations	or	liquidity.

# 10.				RELATED	PARTY	TRANSACTIONS

In	addition	to	the	related	party	transactions	described	in	notes	11	and	14,	the	Company	had	the	following	related	party	transactions	during	the	years	ended	December	31, 2005,	2004	and	2003.

In	the	fourth	quarter	of	2004,	the	Company	entered	into	a	consulting	agreement	with	the	brother	of	J.	Michael	Gearon,	Jr.	(Mr.	Gearon),	an	executive	officer	of	the	Company, for	the	provision	of	implementation,	development	and	deployment	services	on	the	Company's	projects	in	Brazil.	Under	the	terms	of	the	agreement,	the	Company	agreed	to pay	the	individual	a	consulting	fee	of	$5,000	per	month,	plus	expenses.	The	Company	paid	$64,600	of	fees	under	this	agreement	during	the	year	ended	December	31,	2005.

In	February	2004,	Steven	B.	Dodge	(Mr.	Dodge)	the	Company's	former	Chairman	and	Chief	Executive	Officer,	retired	from	the	Company's	Board	of	Directors	and	as Chairman	of	the	Company.	The	Company	agreed	to	pay	Mr.	Dodge	$1.4	million	pursuant	to	the	terms	of	his	retirement	agreement.	The	expense	was	reflected	in	impairments, net	loss	on	sale	of	long-lived	assets,	restructuring	and	merger	related	expense	in	the	accompanying	statement	of	operations	for	the	year	ended	December	31,	2003.	Mr.	Dodge also	elected	to	convert	all	of	his	shares	of	the	Company's	Class	B	common	stock	into	shares	of	Class	A	common	stock.	(See	note	14.)

During	the	year	ended	December	31,	2003,	a	director	of	the	Company	(who	resigned	in	January	2004)	was	a	partner	of	J.P.	Morgan	Partners,	LLC	(JPMP).	For	the	year ended	December	31,	2003	JP	Morgan	Chase	Bank

(Chase)	was	a	lender	under	the	Company's	credit	facilities.	Chase	is	an	affiliate	of	JPMP,	which	indirectly	controls	J.P.	Morgan	Partners	(BHCA),	L.P.	(JPLP)	and	J.P. Morgan	Partners	(23ASBIC),	LLC	(JPSBIC),	stockholders	of	the	Company.	During	2003	Chase	had	participation	percentages	under	the	Company's	credit	facility	ranging from	0.88%	to	2.22%.	At	December	31,	2003,	the	aggregate	principal	amount	outstanding	under	the	credit	facility	was	approximately	$704.7	million.	Chase's	participation	in the	credit	facility	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	in	2003.	In	addition,	J.P.	Morgan	Securities	Inc.,	an	affiliate	of	Chase,	was	an	initial	purchaser	in	certain	of	the	Company's	note	offerings	during 2003	and	received	initial	purchasers'	discounts	and	commissions	in	connection	therewith.

As	of	December	31,	2004,	amounts	outstanding	under	demand	loans	to	certain	executive	officers	approximated	$0.1	million.	These	loans	were	made	prior	to	July	30,	2002, and	were	repaid	in	full	during	the	year	ended	December	31,	2005.

During	the	years	ended	December	31,	2005,	2004	and	2003,	the	Company	retained	certain	affiliates	of	Nordblom	Co.	Inc.,	including	Nordic	Properties,	to	provide	various real	estate	services	in	connection	with	the	Company's	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	two	office	buildings	in	which	the	Company	maintained	regional	offices	(one	of	which	was sold	in	May	2003);	the	management	of	those	buildings;	and	the	leasing	of	space	in	certain	of	these	buildings.	The	Company	paid	the	Nordblom	companies,	including	Nordic Properties,	an	aggregate	of	$117,000,	$143,000,	and	$151,000	in	2005,	2004	and	2003,	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.

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	other	expense	in	the	accompanying	statement	of	operations	for	the	year	ended	December	31,	2003.

ATC	Mexico	Holding	Corp.—During	the	year	ended	December	31,	2004,	the	Company	repurchased	a	12.0%	interest	in	ATC	Mexico	from	certain	stockholders	of	ATC Mexico.	The	Company	owned	100%	of	ATC	Mexico	as	of	December	31,	2005	and	2004.	In	accordance	with	FASB	No.	141	"Business	Combinations"	the	acquisitions	have been	accounted	for	under	the	purchase	method	of	accounting.	The	purchase	prices	have	been	allocated	to	the	net	assets	acquired	(principally	intangible	assets)	and	liabilities assumed	based	on	the	estimated	fair	values	at	the	date	of	acquisition.

In	April	2004,	the	Company	repurchased	an	8.8%	interest	in	ATC	Mexico	from	J.	Michael	Gearon,	Jr.	(Mr.	Gearon),	an	executive	officer	of	the	Company.	Mr.	Gearon	had originally	purchased	this	interest	in	ATC	Mexico	from	the	Company	in	October	2001	for	$8.4	million	($1.7	million	in	cash	and	the	remaining	portion	of	the	purchase	price with	a	7%	secured	note	due	2010	in	the	principal	amount	of	$6.7	million).	In	the	first	quarter	of	2004,	Mr.	Gearon	exercised	his	right	to	require	the	Company	to	purchase	his interest	in	ATC	Mexico.	In	consideration	for	his	interest	in	ATC	Mexico,	the	Company	issued	to	Mr.	Gearon	2,203,968	shares	of	its	Class	A	common	stock	and	paid	$3.7 million	in	cash,	representing	80%	of	the	aggregate	purchase	price	for	Mr.	Gearon's	interest.	The	2,203,968	shares	issued	to	Mr.	Gearon	had	an	aggregate	market	value	on	the date	of	issuance	of

$24.8	million.	Payment	of	the	remaining	20%	of	the	purchase	price	of	$7.3	million,	plus	interest,	was	contingent	upon	ATC	Mexico	satisfying	certain	performance	criteria.	In February	2005,	the	Company's	Board	of	Directors	determined	that	the	performance	criteria	had	been	satisfied,	and	the	Company	paid	Mr.	Gearon	$7.7	million	in	cash.	The Company's	Board	of	Directors	approved	the	determination	of	the	fair	market	value	of	Mr.	Gearon's	interest	with	the	assistance	of	an	independent	financial	advisor.	Interest income	received	by	the	Company	from	Mr.	Gearon	on	the	secured	note	approximated	$196,000	and	$470,000	for	the	years	ended	December	31,	2004,	and	2003	respectively.

In	October	2004,	the	Company	repurchased	the	remaining	3.2%	minority	interest	in	ATC	Mexico	held	by	certain	employees,	including	William	H.	Hess	(Mr.	Hess),	an executive	officer	of	the	Company.	In	the	first	quarter	of	2004,	these	employees	exercised	options	to	purchase	an	aggregate	of	318	shares	of	ATC	Mexico	under	the	ATC Mexico	Stock	Option	Plan.	In	connection	with	the	issuance	of	these	shares,	the	Company	recorded	a	$1.8	million	reduction	to	stockholders'	equity	in	the	accompanying consolidated	balance	sheet	as	of	December	31,	2004.	Such	adjustment	reflected	the	difference	in	the	Company's	carrying	value	of	the	interest	in	ATC	Mexico's	equity	that was	sold	over	the	proceeds	received	for	that	interest.	(See	note	1.)	The	employees	holding	these	shares	had	the	right	to	require	the	Company	to	purchase	their	interests	in	ATC Mexico	six	months	following	their	issuance	at	the	then	fair	market	value.	In	October	2004,	these	employees	exercised	these	rights	and	required	the	Company	to	purchase their	collective	3.2%	interest	in	ATC	Mexico.	In	consideration	for	their	interests	in	ATC	Mexico,	the	Company	issued	to	these	employees	an	aggregate	of	1,155,678	shares	of Class	A	common	stock,	representing	80%	of	the	aggregate	purchase	price	for	their	collective	interests.	The	1,155,678	shares	issued	to	these	employees	had	an	aggregate market	value	on	the	date	of	issuance	of	$18.5	million.	Payment	of	the	remaining	20%	of	the	net	purchase	price	was	contingent	upon	ATC	Mexico	satisfying	certain performance	criteria.	In	February	2005,	the	Company's	Board	of	Directors	determined	that	the	performance	criteria	had	been	satisfied,	and	the	Company	issued	to	these employees	159,836	shares	of	Class	A	common	stock,	net	of	58,730	shares	of	Class	A	common	stock	retained	by	the	Company	to	satisfy	tax	withholding	obligations.	On	the date	of	issuance,	these	218,566	shares	had	an	aggregate	market	value	of	$3.9	million.	The	Company's	Board	of	Directors	approved	the	determination	of	the	fair	market	value of	the	interests	held	by	these	employees	with	the	assistance	of	an	independent	financial	advisor.	The	Company	recorded	the	aggregate	purchase	price	of	these	shares	of	$3.9 million	in	the	accompanying	consolidated	balance	sheet	as	of	December	31,	2005.	In	accordance	with	SFAS	No.	141,	the	acquisition	has	been	accounted	for	under	the purchase	method	of	accounting.	The	purchase	prices	have	been	allocated	to	the	net	assets	acquired	(principally	intangible	assets)	and	liabilities	assumed	based	on	the estimated	fair	values	at	the	date	of	acquisition.

ATC	South	America	Holding	Corp.—During	each	of	the	years	ended	December	31,	2005	and	2004,	ATC	South	America	issued	shares	of	its	common	stock	to	certain employees.	During	the	year	ended	December	31,	2005,	the	Company	repurchased	shares	from	these	employees.	The	Company	owned	90.7%	and	98.4%	of	ATC	South America	as	of	December	31,	2005	and	2004,	respectively.

During	the	year	ended	December	31,	2004,	the	Company	consummated	a	previously	disclosed	arrangement	with	Mr.	Gearon	pursuant	to	which	he	purchased	an	equity interest	in	ATC	South	America.	In	March	2004,	ATC	South	America	issued	to	Mr.	Gearon	stock	representing	an	approximate	1.6%	interest	for	approximately	$1.2	million	in cash.	In	connection	with	the	issuance	of	these	shares,	the	Company	recorded	a	$0.1	million	increase	in	stockholders'	equity	in	the	accompanying	consolidated	balance	sheet as	of	December	31,	2004.	Such	adjustment	represented	the	difference	in	the	proceeds	received	for	that	interest	over	the	Company's	carrying	value	of	the	interest	in	ATC	South America's	equity.	The	purchase	price	represented	the	fair	market	value	of	the	interest	on	the	date	of	the	sale,	as	determined	by	the	Board	of	Directors	with	the	assistance	of	an independent	financial	advisor.	Pursuant	to	the	arrangement,	Mr.	Gearon	had	the	right	to	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	had	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	Company's	stockholder	agreement	with	Mr.	Gearon).

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	10.3%	interest	in	ATC South	America.	In	the	first	quarter	of	2004,	ATC	South	America	granted	options	to	purchase	6,024	shares	of	ATC	South	America	common	stock	to	officers	and	employees, including	Messrs.	Gearon	and	Hess,	who	received	options	to	purchase	shares	representing	a	6.7%	and	1.6%	interest,	respectively.	The	exercise	price	was	$1,349	per	share, which	was	determined	to	be	the	fair	market	value	per	share	on	the	date	of	issuance	based	on	an	independent	appraisal	performed	at	the	Company's	request.	Options	granted vest	upon	the	earliest	to	occur	of	(a)	the	exercise	by	or	on	behalf	of	Mr.	Gearon	of	his	right	to	require	the	Company	to	purchase	his	interest	in	ATC	South	America,	(b)	the exercise	by	the	Company	of	its	right	to	acquire	Mr.	Gearon's	interest	in	ATC	South	America,	or	(c)	July	1,	2006.	These	options	expire	ten	years	from	the	date	of	grant.	(See note	14).

In	October	2005,	Mr.	Gearon	exercised	his	right	to	require	the	Company	to	purchase	his	1.6%	interest	in	ATC	South	America.	The	purchase	price	for	Mr.	Gearon's	interest	in ATC	South	America	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.	In	October	2005,	in	connection	with	the	exercise	by	Mr.	Gearon	of	his	right	to	require	the	Company	to	purchase	his	interest	in	ATC	South	America,	all	options	granted under	the	ATC	South	America	Stock	Option	Plan	vested	in	full	and	were	exercised.	Upon	exercise	of	these	options,	the	holders	received	4,428	shares	of	ATC	South	America (representing	a	7.8%	interest),	net	of	1,596	shares	retained	by	the	Company	to	satisfy	employee	tax	withholding	obligations.	As	of	December	31,	2005,	as	a	result	of	exercises of	options	granted	pursuant	to	the	ATC	South	America	Stock	Option	Plan,	Mr.	Gearon	owns	a	6.5%	interest	in	ATC	South	America	and	Mr.	Hess	owns	a	1.2%	interest	in ATC	South	America.	(See	note	14.)

In	connection	with	the	issuance	of	these	shares	to	employees,	the	Company	recorded	a	$2.0	million	increase	in	stockholders	equity	in	the	accompanying	consolidated	balance sheet	as	of	December	31,	2005.	Such	adjustment	reflected	the	difference	in	the	proceeds	received	for	that	interest	and	the	Company's	carrying	value	of	the	interest	in	ATC South	America's	equity	that	was	sold.	(See	note	1).	The	1,596	shares	retained	by	the	Company	described	above	have	been	treated	as	a	repurchase	of	a	minority	interest	in accordance	with	SFAS	No.	141.	As	a	result,	the	Company	recorded	a	preliminary	purchase	price	allocation	adjustment	of	$5.4	million	as	an	increase	to	intangible	assets	and	a corresponding	increase	in	minority	interest	as	of	the	date	of	acquisition.	The	preliminary	purchase	price	will	be	finalized	in	the	first	half	of	2006,	but	is	not	expected	to significantly	impact	depreciation	and	amortization	expense	when	finalized.	In	addition,	these	holders	may	require	the	Company	to	purchase	their	interests	in	ATC	South America	at	their	then	fair	market	value	six	months	following	their	issuance,	which	date	will	occur	in	April	2006.	Based	on	the	fair	value	information	described	in	note	18,	the Company	estimates	that	its	repurchase	obligation	with	respect	to	these	shares	in	April	2006	will	be	approximately	$19	million.

The	significant	components	reflected	in	impairments,	net	loss	on	sale	of	long-lived	assets,	restructuring	and	merger	related	expense	in	the	accompanying	consolidated statements	of	operations	include	the	following:

Impairments	and	Net	Loss	on	Sale	of	Long-Lived	Assets—During	the	years	ended	December	31,	2005,	2004	and	2003,	the	Company	recorded	impairments	and	net	loss	on sale	of	long-lived	assets	(primarily	related	to	its	rental	and	management	segment)	of	$19.1	million,	$22.3	million	and	$28.3	million,	respectively.

•	 Non-Core	Asset	Impairment	Charges—During	the	years	ended	December	31,	2005	and	2004	respectively,	the	Company	sold	a	limited	number	of	non-core	towers and	other	non-core	assets	and	recorded	impairment	charges	to	write-down	these	and	other	non-core	assets	to	net	realizable	value.	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 these	and	other	non-core	assets	to	net	realizable	value.	As	a	result,	the	Company	recorded	impairment	charges	and	net	losses	of	approximately	$16.8	million, $17.7	million	and	$19.1	million	for	the	years	ended	December	31,	2005,	2004	and	2003,	respectively.

•	 Construction-In-Progress	Impairment	Charges—For	the	year	ended	December	31,	2005,	2004	and	2003,	the	Company	wrote-off	approximately	$2.3	million, $4.6	million	and	$9.2	million,	respectively,	of	construction-in-progress	costs,	primarily	associated	with	sites	that	it	no	longer	planned	to	build.

Restructuring	Expense—During	the	year	ended	December	31,	2005,	the	Company	made	cash	payments	against	its	previous	accrued	restructuring	liability	in	the	amount	of $0.8	million.	During	the	year	ended	December	31,	2004,	the	Company	incurred	employee	separation	costs	of	$0.8	million	and	decreased	its	lease	terminations	and	other facility	closing	costs	liability	by	$0.1	million.	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.	Such	charges	are	reflected	in impairments,	net	loss	on	sale	of	long-lived	assets,	restructuring	and	merger	related	expense	in	the	accompanying	consolidated	statement	of	operations	for	the	years	ended December	31,	2004	and	2003.

The	following	table	displays	activity	with	respect	to	the	accrued	restructuring	liability	for	the	years	ended	December	31,	2003,	2004	and	2005	(in	thousands).	The	accrued restructuring	liability	is	reflected	in	accounts	payable	and	accrued	expenses	in	the	accompanying	consolidated	balance	sheets	as	of	December	31,	2005	and	2004.

|  | Liability<br>as	of<br>January	1,<br>2003 | 2003<br>Restructuring<br>Expense | 2003<br>Cash<br>Payments | Liability	as<br>of<br>December	31,<br>2003 | 2004<br>Restructuring<br>Expense | 2004<br>Cash<br>Payments | Liability<br>as	of<br>December	31,<br>2004 | 2005<br>Restructuring<br>Expense | 2005<br>Cash<br>Payments | Liability<br>as	of<br>December	31,<br>2005 |
| :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- |
| Employee\tseparations | $1,639 | $1,919 | $(1,319) | $2,239 | $823 | $(2,397) | $665 | $84 | $(448) | $301 |
| Lease\tterminations\tand\tother\tfacility\tclosing |  |  |  |  |  |  |  |  |  |  |
| costs | 1,993 | 347 | (890) | 1,450 | (131) | (888) | 431 | 12 | (325) | 118 |
| Total | $3,632 | $2,266 | $(2,209) | $3,689 | $692 | $(3,285) | $1,096 | $96 | $(773) | $419 |

There	were	no	material	changes	in	estimates	related	to	this	accrued	restructuring	liability	during	the	year	ended	December	31,	2005.	The	Company	expects	to	pay	the	balance of	these	employee	separation	liabilities	prior	to	the	end	of	2006.	Additionally,	the	Company	continues	to	negotiate	certain	lease	terminations	associated	with	this	restructuring liability.

Merger	Related	Expense—During	the	year	ended	December	31,	2005,	the	Company	assumed	certain	obligations,	as	a	result	of	the	merger	with	SpectraSite,	Inc.,	primarily related	to	employee	separation	costs	of	former

SpectraSite	employees.	Severance	payments	made	to	former	SpectraSite,	Inc.	employees	were	subject	to	plans	and	agreements	established	by	SpectraSite,	Inc.	and	assumed by	the	Company	in	connection	with	the	merger.	These	costs	were	recognized	as	an	assumed	liability	in	the	preliminary	purchase	price	allocation.	In	addition,	the	Company also	incurred	certain	merger	related	costs	for	additional	employee	retention	and	separation	costs	incurred	during	the	year	ended	December	31,	2005.	The	following	table displays	the	activity	with	respect	to	this	accrued	liability	for	the	year	ended	December	31,	2005	(in	thousands):

|  | Assumed	Merger<br>Liability | Merger	Related<br>Expense | Cash<br>Payments | Liability	as	of<br>December	31,	2005 |
| :--- | :--- | :--- | :--- | :--- |
| Employee\tseparations | $22,373 | $5,074 | $(6,484) | $20,963 |

As	described	in	note	2,	there	have	been	and	may	be	additional	changes	in	estimates	of	the	assumed	liability	until	the	allocation	of	the	preliminary	SpectraSite,	Inc.	purchase price	is	finalized.	The	current	portion	of	the	liability	of	$14.5	million	is	reflected	in	accounts	payable	and	accrued	expenses	and	the	long-term	portion	of	the	liability	of	$6.5 million	is	reflected	in	other	long-term	liabilities	in	the	accompanying	consolidated	balance	sheet	as	of	December	31,	2005.	The	Company	expects	to	pay	the	long-term portion	of	these	merger	related	liabilities	through	the	third	quarter	of	2008.

The	Company	modified	certain	option	awards	to	revise	vesting	and	exercise	terms	for	certain	employees	that	were	terminated	in	connection	with	the	SpectraSite,	Inc.	merger. The	Company	recorded	a	charge	of	$1.6	million,	which	is	included	in	merger	related	expense	and	additional	paid-in	capital	in	the	accompanying	consolidated	financial statements	for	the	year	ended	December	31,	2005.

The	Company	files	a	consolidated	United	States	federal	tax	return,	which	includes	all	of	its	wholly	owned	domestic	subsidiaries,	and	the	Company	also	files	combined	or consolidated	returns	in	many	different	states.	These	returns	reflect	different	combinations	of	the	Company's	subsidiaries	and	are	dependent	on	the	connection	each	subsidiary has	with	a	particular	state.	The	Company	and	its	subsidiaries	have	entered	into	a	tax	sharing	agreement	providing,	among	other	things,	that	each	of	its	subsidiaries	pay	for	its share	of	income	taxes	based	on	the	proportion	of	such	subsidiaries'	tax	liability	on	a	separate	return	basis	to	the	total	tax	liability	on	a	consolidated	basis.	The	following information	pertains	to	the	Company's	income	taxes	on	a	consolidated	basis.

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

|  | 2005 | 2004 | 2003 |
| :--- | :--- | :--- | :--- |
| Current | $(16,755) | $(12,267) |  |
| Deferred: |  |  |  |
| Federal | 74,456 | 117,664 | $ 100,986 |
| State | 15,347 | 8,540 | 16,763 |
| Foreign | (1,342) | (8,110) | (2,456) |
| Less: |  |  |  |
| Benefit\tfrom\tdisposition\tof\tstock\toptions\trecorded\tto\tadditional\tpaid-in\tcapital | (66,515) | (16,200) | (894) |
| Valuation\tallowance | (9,194) | (9,451) | (36,603) |
| Income\ttax\t(provision)\tbenefit | $(4,003) | $80,176 | $77,796 |

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

|  | 2005 | 2004 | 2003 |
| :--- | :--- | :--- | :--- |
| United\tStates | $(137,267) | $(358,520) | $(342,777) |
| International | 9,793 | 44,383 | 25,059 |
| Total | $(127,474) | $(314,137) | $(317,718) |

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

|  | 2005 | 2004 | 2003 |
| :--- | :--- | :--- | :--- |
| Statutory\ttax\trate | 35% | 35% | 35% |
| State\ttaxes,\tnet\tof\tfederal\tbenefit | 2 | 4 | 5 |
| Non-deductible\tlosses\ton\tretirement\tof\tlong-term\tobligations | (1) |  | (4) |
| Adjustment\tto\trefund\tclaim | (23) |  |  |
| Foreign\ttaxes | (11) | (7) | (3) |
| Other\t(primarily\tvaluation\tallowance) | (5) | (6) | (8) |
| Effective\ttax\trate | (3)% | 26% | 25% |

|  | 2005 | 2004 |
| :--- | :--- | :--- |
| Current\tassets: |  |  |
| Allowances,\taccruals\tand\tother\titems\tnot\tcurrently\tdeductible | $31,359 | $6,090 |
| Long-term\titems: |  |  |
| Assets: |  |  |
| Net\toperating\tloss\tcarryforwards | $888,826 | $534,529 |
| Refund\treceivable\tfrom\tnet\toperating\tloss\tcarryback | 96,124 | 132,710 |
| Capital\tloss\tcarryforwards | 116,025 |  |
| Basis\tstep-up\tfrom\tcorporate\trestructuring\tand\ttax\tplanning\tstrategies | 69,092 | 78,296 |
| Items\tnot\tcurrently\tdeductible\tand\tother | 117,546 | 119,903 |
| Depreciation\tand\tamortization |  | 24,598 |
| Liabilities: |  |  |
| Depreciation\tand\tamortization | (257,084) |  |
| Other | (103,483) | (83,145) |
| Subtotal | 927,046 | 806,891 |
| Less:\tValuation\tallowance | (422,387) | (173,077) |
| Net\tlong-term\tdeferred\ttax\tassets | $504,659 | $633,814 |

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,	2005,	the	Company	had	net	federal	and	state	operating	loss	carryforwards	available	to	reduce	future	taxable	income	of	approximately	$2.2	billion	and	$2.4 billion,	respectively.	If	not	utilized,	the	Company's	net	operating	loss	carryforwards	expire	as	follows	(in	thousands):

| Years	ended	December	31, | Federal | State |
| :--- | :--- | :--- |
| 2006\tto\t2010 | $5,248 | $469,747 |
| 2011\tto\t2015 | 10,012 | 272,662 |
| 2016\tto\t2020 | 397,691 | 777,707 |
| 2021\tto\t2025 | 1,744,552 | 897,896 |
| Total | $2,157,503 | $2,418,012 |

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,	2005,	the	Company	has	provided	a	valuation	allowance	of	approximately	$422.4	million,	including	approximately	$249.5 million	attributable	to	SpectraSite,	primarily	related	to	net	operating	loss	and	capital	loss	carryforwards.	Approximately	$237.8	million	of	the	SpectraSite	valuation	allowance was	assumed	as	of	the	acquisition	date.	The	balance	of	the	valuation	allowance	primarily	relates	to	net	state	deferred	tax	assets.	The	Company	has	not	provided	a	valuation allowance	for	the	remaining	deferred	tax	assets,	primarily	its	federal	net	operating	loss	carryforwards,	as	management	believes	the	Company	will	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	federal	income	tax	refund	claims	related	to	the	carry	back	of	certain	federal	net	operating losses.	In	June	2003	and	October	2003,	the	Company	filed	federal	income	tax	refund	claims	with	the	IRS	relating	to	the	carry	back	of	$380.0	million	of	net	operating	losses generated	prior	to	2003,	of	which	the	Company	initially	anticipated	receiving	approximately	$90.0	million.	Based	on	preliminary	discussions	with	tax	authorities,	the Company	has	revised	its	estimate	of	the	net	realizable	value	of	the	federal	income	tax	refund	claims	and	anticipates	receiving	a	refund	of	approximately	$65.0	million	as	a result	of	these	claims	by	the	end	of	2006.	There	can	be	no	assurances,	however,	with	respect	to	the	specific	amount	and	timing	of	any	refund.

The	recoverability	of	the	Company's	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	as	of	December	31,	2005	will	be	dependent	upon	its	ability	to	generate	approximately	$1.3	billion	in	taxable	income from	January	1,	2006	to	December	31,	2025.	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.

From	time	to	time	the	Company	is	subject	to	examination	by	various	tax	authorities	in	jurisdictions	in	which	the	Company	has	significant	business	operations.	The	Company regularly	assesses	the	likelihood	of	additional	assessments	in	each	of	the	tax	jurisdictions	resulting	from	these	examinations.	During	the	year	ended

December	31,	2005,	the	Company	recorded	a	$29.5	million	income	tax	provision	to	reflect	a	reduction	in	management's	estimate	of	the	net	realizable	value	of	the	Company's pending	federal	income	tax	refund	claims	as	described	above.	The	Company	believes	that	adequate	provisions	have	been	made	for	income	taxes	for	all	periods	through December	31,	2005.

Depending	on	the	resolution	of	the	Verestar	bankruptcy	proceedings	described	in	notes	3	and	9,	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.

# 14.				STOCKHOLDERS'	EQUITY

Amended	and	Restated	Certificate	of	Incorporation—In	August	2005,	the	stockholders	of	the	Company	approved	the	amendment	and	restatement	of	the	Company's	Restated Certificate	of	Incorporation,	subject	to	the	consummation	of	the	merger	with	SpectraSite,	Inc.	On	August	8,	2005,	the	Company	completed	its	merger	with	SpectraSite,	Inc. and	filed	the	Amended	and	Restated	Certificate	of	Incorporation	with	the	Secretary	of	State	of	Delaware.	The	Amended	and	Restated	Certificate	of	Incorporation	increased the	authorized	number	of	shares	of	the	Company's	Class	A	common	stock	from	500.0	million	to	1.0	billion,	eliminated	the	Company's	Class	B	common	stock	and	Class	C common	stock,	lowered	the	threshold	to	amend	certain	provisions	of	the	Company's	Restated	Certificate	of	Incorporation	to	a	majority,	eliminated	restrictions	applicable	to certain	holders	of	the	Company's	Class	B	common	stock	and	made	other	conforming	changes	in	connection	with	the	foregoing.

Preferred	Stock—As	of	December	31,	2005	and	2004,	the	Company	was	authorized	to	issue	up	to	20.0	million	shares	of	$.01	par	value	preferred	stock.	As	of	December	31, 2005	and	2004,	there	were	no	preferred	shares	issued	or	outstanding.

Common	Stock—As	of	December	31,	2005	and	2004,	the	Company	was	authorized	to	issue	up	to	1.0	billion	and	500.0	million	shares,	respectively,	of	its	$.01	par	value	per share	Class	A	common	stock	and	0	and	10.0	million	shares,	respectively,	of	its	$0.1	par	value	per	share	Class	C	common	stock.	As	of	December	31,	2003,	the	Company	was also	authorized	to	issue	50.0	million	shares	of	its	$.01	par	value	per	share	Class	B	common	stock.	The	Class	A	stockholders	are	entitled	to	one	vote	per	share,	the	Class	B stockholders	were	entitled	to	ten	votes	per	share	and	the	Class	C	common	stock	was	non-voting.	The	Class	B	common	stock	and	Class	C	common	stock	were	exchangeable for	shares	of	Class	A	common	stock	on	a	one-for-one	basis.	During	the	years	ended	December	31,	2004,	and	2003,	holders	of	Class	B	and	Class	C	common	stock	exchanged a	total	of	8,194,443	and	1,990,440	of	their	shares,	respectively,	for	shares	of	Class	A	common	stock.

In	February	2004,	Mr.	Dodge	retired	from	the	Company's	Board	of	Directors	and	elected	to	convert	all	of	his	shares	of	the	Company's	Class	B	common	stock,	which triggered	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.	In	addition,	in	February	2004,	all	outstanding	shares	of	the	Company's	Class	C	common	stock	were	converted	into	shares	of	its Class	A	common	stock	on	a	one-for-one	basis.

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	became	exercisable	on	January	29,	2006	at	an	exercise	price	of	$0.01	per	share	and	will	expire	on	August	1,	2008.	(See	notes	7	and	18.)

In	August	2005,	in	connection	with	the	merger	with	SpectraSite,	Inc.,	the	Company	assumed	warrants	to	purchase	shares	of	SpectraSite,	Inc.	common	stock.	(See	note	2.)	As of	the	merger	completion	date,	each	warrant

was	exercisable	for	two	shares	of	SpectraSite,	Inc.	common	stock	at	an	exercise	price	of	$32	per	warrant.	Upon	completion	of	the	merger,	each	warrant	to	purchase	shares	of SpectraSite,	Inc.	common	stock	automatically	converted	into	a	warrant	to	purchase	shares	of	the	Company's	Class	A	common	stock,	such	that	upon	exercise	of	each	warrant, the	holder	has	a	right	to	receive	3.575	shares	of	American	Tower	Class	A	common	stock	in	lieu	of	each	share	of	SpectraSite,	Inc.	common	stock	that	would	have	been receivable	under	each	assumed	warrant	prior	to	the	merger.	Upon	completion	of	the	Company's	merger	with	SpectraSite,	Inc.,	these	warrants	were	exercisable	for approximately	6.8	million	shares	of	Class	A	common	stock.	As	of	December	31,	2005,	warrants	to	purchase	approximately	6.4	million	shares	of	Class	A	common	stock remained	outstanding.	These	warrants	will	expire	on	February	10,	2010.

In	addition,	as	of	December	31,	2004,	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	warrants	expired	in	January	2005.

August	2003	Offering—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.

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,	2005,	the	option	pool	under	the	Plan	consists	of	32.9	million	shares	of	common	stock.	Option	grants	generally	vest	ratably	over	various	periods, generally	four	years,	commencing	one	year	from	the	date	of	grant.	Option	grants	generally	expire	ten	years	from	the	date	of	grant.

In	August	2005,	in	connection	with	the	merger	with	SpectraSite,	Inc.,	the	Company	assumed	stock	options	granted	under	SpectraSite's	2003	Equity	Incentive	Plan.	Upon completion	of	the	merger,	the	options	to	purchase	shares	of	SpectraSite,	Inc.	common	stock	automatically	converted	into	options	to	purchase	shares	of	the	Company's	Class	A common	stock,	such	that	upon	exercise	of	each	option,	the	holder	has	a	right	to	receive	3.575	shares	of	Class	A	common	stock	in	lieu	of	each	share	of	SpectraSite,	Inc. common	stock	that	would	have	been	receivable	under	each	assumed	stock	option	prior	to	the	merger,	at	an	exercise	price	per	share	equal	to	the	exercise	price	of	the SpectraSite,	Inc.	option	prior	to	the	merger	divided	by	3.575.	Upon	completion	of	the	merger,	the	assumed	SpectraSite,	Inc.	stock	options	were	exercisable	for	an	aggregate	of 9.9	million	shares	of	the	Company's	Class	A	common	stock.	Of	these	options,	options	to	purchase	approximately	8.3	million	shares	were	fully	vested	as	of	the	merger	date and	the	remaining	unvested	options	to	purchase	1.6	million	shares	vest	monthly	through	the	first	quarter	of	2008.	As	of	December	31,	2005,	options	to	purchase approximately	2.0	million	shares	of	Class	A	common	stock	remained	outstanding.	The	Company	does	not	plan	to	grant	any	additional	options	under	this	plan.

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,\t2003 | 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 |
| Granted | 5,288,399 | 11.25 |  |
| Exercised | (6,249,324) | 6.41 |  |
| Cancelled | (2,451,656) | 13.36 |  |
| Outstanding\tas\tof\tDecember\t31,\t2004 | 15,013,140 | 11.54 | 7,884,626 |
| Granted | 7,380,054 | 19.74 |  |
| Options\tassumed\tin\tmerger\twith\tSpectraSite,\tInc. | 9,878,295 | 5.54 |  |
| Exercised | (11,106,693) | 5.70 |  |
| Cancelled | (761,769) | 16.45 |  |
| Outstanding\tas\tof\tDecember\t31,\t2005 | 20,403,027 | $14.48 | 9,417,043 |

# The	following	table	sets	forth	information	regarding	options	outstanding	at	December	31,	2005:

| 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<br>Average	Exercise<br>Price	Per	Share |
| :--- | :--- | :--- | :--- | :--- | :--- | :--- |
| 1,837,742 | $\t\t0.75—$\t\t3.15 | $\t\t2.42 |  | 6.78 | 958,356 | $\t\t2.49 |
| 2,132,568 | \t\t3.66—\t\t\t\t5.98 | 4.56 |  | 2.69 | 1,865,604 | 4.52 |
| 2,036,754 | \t\t6.82—\t\t10.50 | 10.26 |  | 5.52 | 1,341,948 | 10.18 |
| 2,059,220 | 10.68—\t\t10.74 | 10.68 |  | 6.86 | 545,891 | 10.68 |
| 2,060,471 | 10.83—\t\t13.00 | 12.20 |  | 5.89 | 1,604,804 | 12.25 |
| 2,409,722 | 13.09—\t\t18.15 | 17.49 |  | 7.20 | 402,665 | 16.46 |
| 2,788,775 | 18.16—\t\t18.60 | 18.60 |  | 9.16 | 8,600 | 18.25 |
| 3,207,120 | 18.67—\t\t22.20 | 21.88 |  | 7.50 | 954,620 | 21.13 |
| 1,861,715 | 22.55—\t\t30.63 | 26.10 |  | 4.34 | 1,725,615 | 26.34 |
| 8,940 | 30.69—\t\t48.88 | 40.02 |  | 4.57 | 8,940 | 40.02 |
| 20,403,027 | $\t\t0.75—$48.88 | $14.48 |  | 6.41 | 9,417,043 | $13.03 |

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.	During	the	year	ended	December	31,	2005,	the Company	reevaluated	the	assumptions	used	to	estimate	the	fair	value	of	stock	options	issued	to	employees.	As	a	result,	the	Company	lowered	its	expected	volatility assumption	for	option	grants	to	approximately	30%	and	increased	the	expected	life	of	option	grants	to	6.25	years	using	the	simplified	method	permitted	by	SEC	SAB	No.	107. (See	note	1.)	The	weighted	average	fair	values	of	the	Company's	options	granted	during	2005,	2004	and

|  | July	1,	2005	–<br>December	31,	2005 | January	1,	2005<br>–	June	30,	2005 | 2004 | 2003 |
| :--- | :--- | :--- | :--- | :--- |
| Approximate\trisk-free\tinterest\trate | 3.22%\t-\t4.40% | 4.17%\t-\t4.40% | 4.23% | 4.00% |
| Expected\tlife\tof\toption\tgrants | 6.25\tyears | 4\tyears | 4\tyears | 4\tyears |
| Expected\tvolatility\tof\tunderlying\tstock | 29.6% | 75.3%\t-\t79.2% | 80.6% | 86.6% |
| Expected\tvolatility\tof\tunderlying\tstock\t(ATC\tMexico\tand\tATC\tSouth\tAmerica\tPlans) | N/A | N/A | N/A | N/A |
| Expected\tdividends | N/A | N/A | N/A | N/A |

Voluntary	Option	Exchanges—In	February	2004,	the	Company	issued	to	eligible	employees	1,032,717	options	with	an	exercise	price	of	$11.19	per	share,	the	fair	market value	of	the	Class	A	common	stock	on	the	date	of	grant.	These	options	were	issued	in	connection	with	a	voluntary	option	exchange	program	entered	into	by	the	Company	in August	2003,	pursuant	to	which	the	Company	accepted	for	surrender	and	cancelled	options	to	purchase	a	total	of	1,831,981	shares	of	its	Class	A	common	stock	having	an exercise	price	of	$10.25	or	greater.	The	program,	which	was	offered	to	both	full	and	part-time	employees,	excluding	the	Company's	executive	officers	and	its	directors, provided	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	Stock	Option	Plan—The	Company	maintains	a	stock	option	plan	in	its	ATC	Mexico	subsidiary	(ATC	Mexico	Plan).	The	ATC	Mexico	Plan	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	options	to	purchase	318 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	as	determined	by	the	Board	of	Directors	with	the	assistance	of	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.	As	described	in	note	11,	all outstanding	options	were	exercised	in	March	2004.	No	options	under	the	ATC	Mexico	Plan	were	outstanding	as	of	December	31,	2005.	(See	note	11.)

ATC	South	America	Stock	Option	Plan—The	Company	maintains	a	stock	option	plan	in	its	ATC	South	America	subsidiary	(ATC	South	America	Plan).	The	ATC	South America	Plan	provides	for	the	issuance	of	options	to	officers,	employees,	directors	and	consultants	of	ATC	South	America.	The	ATC	South	America	Plan	limits	the	number of	shares	of	common	stock	which	may	be	granted	to	an	aggregate	of	6,144	shares,	(an	approximate	10.3%	interest	on	a	fully-diluted	basis),	subject	to	adjustment	based	on changes	in	ATC	South	America's	capital	structure.	During	2004,	ATC	South	America	granted	options	to	purchase	6,024	shares	of	ATC	South	America	common	stock	to officers	and	employees,	including	Messrs.	Gearon	and	Hess,	who	received	options	to	purchase	an	approximate	6.7%	and	1.6%	interest,	respectively.	Such	options	were	issued at	one	time	with	an	exercise	price	of	$1,349	per	share.	The	exercise	price	per	share	was	at	fair	market	value	on	the	date	of	issuance	as	determined	by	the	Board	of	Directors with	the	assistance	of	an	independent	appraisal	performed	at	the	Company's	request.	The	fair	value	of	ATC	South	America	Plan	options	granted	during	2004	were	$79	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	Mr.	Gearon	of	his right	to	sell	his	interest	in	ATC	South	America	to	the	Company,	(b)	the

exercise	by	the	Company	of	its	right	to	acquire	Mr.	Gearon's	interest	in	ATC	South	America,	or	(c)	July	1,	2006.	These	options	expire	ten	years	from	the	date	of	grant.	No options	under	the	ATC	South	America	Plan	were	exercised	or	cancelled	in	2004,	and	no	options	were	exercisable	as	of	December	31,	2004.	In	October	2005,	in	connection with	the	exercise	by	Mr.	Gearon's	of	his	right	to	require	the	Company	to	purchase	his	interest	in	ATC	South	America,	all	options	granted	pursuant	to	the	ATC	South	America Stock	Option	Plan	vested	in	full	and	were	exercised.	Upon	exercise	of	these	options,	the	holders	received	4,428	shares	of	ATC	South	America	(representing	a	7.8%	interest), net	of	1,596	shares	retained	by	the	Company	to	satisfy	employee	tax	withholding	obligations.	The	employees	holding	these	shares	may	require	the	Company	to	purchase	their interests	in	ATC	South	America	six	months	following	their	issuance,	which	date	will	occur	in	April	2006.	As	a	result	of	exercises	of	options	granted	pursuant	to	the	ATC South	America	Stock	Option	Plan,	Mr.	Gearon	owns	a	6.5%	interest	in	ATC	South	America	and	Mr.	Hess	owns	a	1.2%	interest	in	ATC	South	America.	No	options	under	the ATC	South	America	Plan	were	granted	in	2005,	and	as	of	December	31,	2005,	no	options	were	outstanding	under	the	ATC	South	America	Plan.	(See	note	11.)

Employee	Stock	Purchase	Plan—The	Company	maintains	an	employee	stock	purchase	plan	for	all	eligible	employees.	Under	the	plan,	shares	of	the	Company's	Class	A 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	2005,	2004	and	2003,	employees	purchased	50,119,	85,750	and	200,287	shares, respectively,	at	weighted	average	prices	per	share	of	$15.32,	$10.64	and	$4.80	respectively.	At	December	31,	2005,	4,002,498	shares	remain	reserved	for	future	issuance under	the	plan.

Direct	Stock	Purchase	Plan—During	2004,	the	Company	established	a	direct	stock	purchase	plan	for	all	eligible	investors.	Under	the	plan,	shares	of	the	Company's	Class	A common	stock	may	be	purchased	without	payment	of	a	brokerage	fee,	at	a	discount,	by	making	an	initial	cash	investment	of	at	least	$1,000	and	up	to	$10,000.	During	the year	ended	December	31,	2004,	295	shares	of	Class	A	common	stock	were	purchased	at	weighted	average	prices	per	share	of	$15.01.	At	December	31,	2005	and	2004, 24,999,705	shares,	respectively,	remained	reserved	for	future	issuance	under	the	plan.	The	Company	suspended	the	direct	stock	purchase	plan	in	May	2005.	During	the	year ended	December	31,	2005,	there	were	no	shares	purchased	under	the	plan.

Stock	Repurchase	Program—In	November	2005,	the	Company	announced	that	its	Board	of	Directors	had	approved	a	stock	repurchase	program	pursuant	to	which	the Company	intends	to	repurchase	up	to	$750.0	million	of	its	Class	A	common	stock	through	December	2006.	The	Company	expects	to	utilize	cash	from	operations, borrowings	under	its	credit	facilities	and	cash	on	hand	to	fund	the	repurchase	program.	Under	the	program,	the	Company's	management	is	authorized	to	purchase	shares	from time	to	time	in	open	market	purchases	or	privately	negotiated	transactions	at	prevailing	prices	as	permitted	by	securities	laws	and	other	legal	requirements,	and	subject	to market	conditions	and	other	factors.	To	facilitate	repurchases,	the	Company	entered	into	a	trading	plan	under	Rule	10b5-1	of	the	Securities	Exchange	Act	of	1934,	which allows	the	Company	to	repurchase	its	shares	during	periods	when	it	otherwise	might	be	prevented	from	doing	so	under	insider	trading	laws	or	because	of	self-imposed trading	blackout	periods.	The	program	may	be	discontinued	at	any	time.	As	of	December	31,	2005,	the	Company	had	repurchased	2.8	million	shares	of	its	Class	A	common stock	for	an	aggregate	of	$76.6	million,	of	which	$68.9	million	was	paid	in	cash	prior	to	December	31,	2005	and	$7.7	million	was	included	in	accounts	payable	and	accrued expenses	in	the	accompanying	consolidated	balance	sheet	as	of	December	31,	2005.

# 15.				SUPPLEMENTAL	CASH	FLOW	INFORMATION

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

|  | 2005 | 2004 | 2003 |
| :--- | :--- | :--- | :--- |
| Supplemental\tcash\tflow\tinformation: |  |  |  |
| Cash\tpaid\tduring\tthe\tperiod\tfor\tinterest\t(including\tamounts\tcapitalized) | $183,307 | $209,874 | $223,263 |
| Cash\tpaid\tduring\tthe\tperiod\tfor\tincome\ttaxes\t(net\tof\trefunds) | 18,519 | 4,257 | 2,609 |
| Non-cash\tinvesting\tand\tfinancing\tactivities: |  |  |  |
| Issuance\tof\tcommon\tstock\tand\tassumption\tof\toptions\tand\twarrants\tin\tconnection\twith\tthe\tacquisition\tof\tSpectraSite |  |  |  |
| net\tassets | 3,106,072 |  |  |
| Conversion\tof\tconvertible\tnotes\t(excluding\tloss\ton\tretirement) | 55,705 |  | 86,129 |
| Common\tstock\trepurchases\tincluded\tin\taccounts\tpayable\tand\taccrued\texpenses | 7,658 |  |  |
| Increase\t(decrease)\tin\taccounts\tpayable\tand\taccrued\texpenses\tfor\tpurchases\tof\tproperty\tand\tequipment\tand |  |  |  |
| construction\tactivities | 3,799 | 2,519 | (10,477) |
| Capital\tleases | 789 | 3,485 |  |
| ATC\tSouth\tAmerica\ttransaction | 2,026 |  |  |
| ATC\tMexico\ttransaction |  | 48,175 |  |
| Decrease\tin\tfair\tvalue\tof\tcash\tflow\thedges\t(net\tof\ta\ttax\tbenefit\t(provision)\tof\t$432\tand\t$(2,996),\trespectively) | 803 |  | 5,564 |

# 16.				BUSINESS	SEGMENTS

As	of	December	31,	2005,	the	Company	operates	in	two	business	segments:	rental	and	management	and	network	development	services.	The	rental	and	management	segment provides	for	the	leasing	and	subleasing	of	antenna	sites	on	multi-tenant	towers	and	other	properties	for	a	diverse	range	of	customers	primarily	in	the	wireless	communications and	broadcast	industries.	The	network	development	services	segment	offers	services	activities	that	support	the	Company's	rental	and	management	operations	and	the	addition of	new	tenants	and	equipment	on	the	Company's	towers,	including	site	acquisition,	zoning,	permitting	and	structural	analysis.

The	accounting	policies	applied	in	compiling	segment	information	below	are	similar	to	those	described	in	note	1.	In	evaluating	financial	performance,	management	focuses on	segment	operating	profit	(loss),	which	excludes	depreciation,	amortization	and	accretion;	corporate	general,	administrative	and	development	expense;	and	impairments,	net loss	on	sale	of	long-lived	assets,	restructuring	and	merger	related	expense.	This	measure	of	operating	profit	(loss)	is	also	before	interest	income,	interest	expense,	other income	(expense),	loss	on	retirement	of	long-term	obligations,	minority	interest	in	net	earnings	of	subsidiaries,	loss	on	equity	method	investments,	income	taxes,	discontinued operations	and	cumulative	effect	of	change	in	accounting	principle.	For	reporting	purposes,	the	rental	and	management	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,	2005,	2004 and	2003	is	shown	in	the	following	tables.	The	"Other	expenses"	disclosure	below	represents	amounts	excluded	from	specific	segments,	such	as	depreciation,	amortization and	accretion;	corporate	general,	administrative	and	development	expense;	impairments,	net	loss	on	sale	of	long-lived	assets,	restructuring	and	merger	related	expense; interest	income;	interest	expense;	loss	on	retirement	of	long-term	obligations;	and	other	income	(expense).

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

|  | 2005 | 2004 | 2003 |
| :--- | :--- | :--- | :--- |
| Rental\tand\tManagement: |  |  |  |
| Revenues | $929,762 | $684,422 | $619,697 |
| Segment\toperating\tprofit | 637,846 | 461,426 | 397,239 |
| Network\tDevelopment\tServices: |  |  |  |
| Revenues | 15,024 | 22,238 | 12,796 |
| Segment\toperating\tprofit | 3,043 | 3,437 | 3,303 |
| Other: |  |  |  |
| Other\texpenses | (768,363) | (779,000) | (718,260) |
| Continuing\tOperations: |  |  |  |
| Revenues | $944,786 | $706,660 | $632,493 |
| Loss\tfrom\tcontinuing\toperations\tbefore\tincome\ttaxes,\tminority\tinterest\tand\tloss\ton\tequity\tmethod\tinvestments | $(127,474) | $(314,137) | $(317,718) |

Additional	information	relating	to	the	Company's	operating	segments	is	as	follows	(in	thousands):

|  | 2005 | 2004 | 2003 | 2005 | 2004 | 2003 |
| :--- | :--- | :--- | :--- | :--- | :--- | :--- |
| Rental\tand\tManagement | $398,715 | $316,587 | $314,462 | $82,155 | $37,453 | $50,336 |
| Network\tDevelopment\tServices | 2,028 | 2,159 | 3,494 | 2,308 | 290 | 106 |
| Other | 10,511 | 10,703 | 12,458 | 4,174 | 3,768 | 4,915 |
| Continuing\tOperations | $411,254 | $329,449 | $330,414 | $88,637 | $41,511 | $55,357 |
| Discontinued\tOperations |  |  |  |  | $670 | $6,251 |

|  | 2005 | 2004 |
| :--- | :--- | :--- |
| Rental\tand\tManagement | $7,880,928 | $4,050,703 |
| Network\tDevelopment\tServices | 26,716 | 55,294 |
| Other | 860,576 | 979,975 |
|  | $8,768,220 | $5,085,972 |

The	Other	line	item	above	includes	corporate	assets	such	as	cash	and	cash	equivalents,	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):

|  | 2005 | 2004 | 2003 |
| :--- | :--- | :--- | :--- |
| Operating\tRevenues: |  |  |  |
| United\tStates | $798,010 | $589,395 | $544,398 |
| International: |  |  |  |
| Mexico | 111,421 | 93,186 | 76,325 |
| Brazil | 35,355 | 24,079 | 11,770 |
| Total\tInternational | 146,776 | 117,265 | 88,095 |
| Total\toperating\trevenues | $944,786 | $706,660 | $632,493 |

|  | 2005 | 2004 |
| :--- | :--- | :--- |
| Long-Lived\tAssets: |  |  |
| United\tStates | $7,266,005 | $3,479,823 |
| International: |  |  |
| Mexico | 364,633 | 332,266 |
| Brazil | 49,751 | 39,253 |
| Total\tInternational | 414,384 | 371,519 |
| Total\tlong-lived\tassets | $7,680,389 | $3,851,342 |

For	the	year	ended	December	31,	2005,	two	customers	within	the	rental	and	management	and	network	development	services	segments	accounted	for	greater	than	10%	of	the Company's	consolidated	operating	revenues:	Cingular	Wireless	and	Verizon	Wireless,	which	accounted	for	approximately	17%	and	11%,	respectively.	In	the	third	quarter	of 2005,	a	merger	transaction	was	completed	between	two	customers	within	the	rental	and	management	segment,	Sprint	PCS	and	Nextel.	If	the	transaction	had	occurred	as	of January	1,	2005,	the	combined	revenues	of	the	customer	would	have	accounted	for	approximately	14%	of	the	Company's	consolidated	operating	revenues	for	the	year	ended December	31,	2005.

For	the	year	ended	December	31,	2005,	assuming	the	Company's	merger	with	SpectraSite,	Inc.	occurred	on	January	1,	2005,	three	customers	within	the	rental	and management	and	network	development	services	segments	would	have	accounted	for	greater	than	10%	of	the	Company's	consolidated	operating	revenues:	Cingular	Wireless would	have	accounted	for	approximately	19%	of	revenues,	Sprint	Nextel	(assuming	the	merger	of	Sprint	PCS	and	Nextel	occurred	on	January	1,	2005)	would	have	accounted for	approximately	17%	of	revenues	(approximately	22%	including	Sprint	Nextel	partners	and	affiliates)	and	Verizon	Wireless	would	have	accounted	for	approximately	10% of	revenues.

For	the	years	ended	December	31,	2004	and	2003,	one	customer	within	the	rental	and	management	and	network	development	services	segments,	Verizon	Wireless,	accounted for	approximately	12%	and	13%,	respectively	of	the	Company's	consolidated	operating	revenues.	In	the	fourth	quarter	of	2004,	a	merger	transaction	was	completed	between two	customers,	Cingular	Wireless	and	AT&T	Wireless.	If	the	transaction	had	occurred	as	of	January	1,	2004,	the	combined	revenues	of	the	customer	would	have	accounted for	approximately	14%	of	our	consolidated	operating	revenues	for	the	year	ended	December	31,	2004.

# 17.				SELECTED	QUARTERLY	FINANCIAL	DATA	(UNAUDITED)

The	information	presented	below	reflects	certain	businesses	as	discontinued	operations	as	described	in	note	2.	As	a	result,	the	2004	quarterly	data	presented	herein	does	not agree	to	previously	issued	quarterly	statements.	Selected	quarterly	financial	data	for	the	years	ended	December	31,	2005	and	2004	is	as	follows	(in	thousands,	except	per	share data):

|  | March	31, | June	30, | September	30, | December	31,<br>(1) | Year	Ended<br>December	31, |
| :--- | :--- | :--- | :--- | :--- | :--- |
| 2005: |  |  |  |  |  |
| Operating\trevenues | $184,355 | $188,060 | $264,746 | $307,625 | $944,786 |
| Operating\tincome\tfrom\tcontinuing\toperations | 30,252 | 32,641 | 39,402 | 40,899 | 143,194 |
| Loss\tbefore\tcumulative\teffect\tof\tchange\tin\taccounting\tprinciple | (31,561) | (31,818) | (20,870) | (51,816) | (136,065) |
| Net\tloss | (31,561) | (31,818) | (20,870) | (87,341) | (171,590) |
| Basic\tand\tdiluted\tnet\tloss\tper\tcommon\tshare\tamounts: |  |  |  |  |  |
| Loss\tbefore\tcumulative\teffect\tof\tchange\tin\taccounting\tprinciple | $(0.14) | $(0.14) | $(0.06) | $(0.13) | $(0.44) |
| Net\tloss | $(0.14) | $(0.14) | $(0.06) | $(0.21) | $(0.57) |

|  | March	31, | June	30, | September	30, | December	31, | Year	Ended<br>December	31, |
| :--- | :--- | :--- | :--- | :--- | :--- |
| 2004: |  |  |  |  |  |
| Operating\trevenues | $168,791 | $172,292 | $180,881 | $184,696 | $706,660 |
| Operating\tincome\tfrom\tcontinuing\toperations | 14,216 | 13,139 | 20,962 | 21,437 | 69,754 |
| Net\tloss | (48,238) | (65,197) | (60,122) | (74,030) | (247,587) |
| Basic\tand\tdiluted\tnet\tloss\tper\tcommon\tshare | $(0.22) | $(0.29) | $(0.27) | $(0.32) | $(1.10) |

(1) Effective	December	31,	2005,	the	Company	adopted	the	provisions	of	FIN	No.	47	and	recognized	a	$35.5	million	non-cash	charge	(net	of	an	$11.7	million	tax	benefit) as	a	cumulative	effect	of	a	change	in	accounting	principle	in	the	consolidated	statement	of	operations	for	the	quarter	ended	December	31,	2005.

# 18.				SUBSEQUENT	EVENTS

ATI	12.25%	Notes	Redemption—In	December	2005,	the	Company	issued	a	notice	for	the	redemption	on	February	1,	2006	of	all	outstanding	ATI	12.25%	Notes.	On February	1,	2006,	the	Company	redeemed	$227.7	million	face	amount	($162.1	million	accreted	value,	net	of	$7.0	million	fair	value	allocated	to	warrants)	of	ATI	12.25% Notes	in	accordance	with	the	indenture	at	106.125%	of	their	accreted	value	for	an	aggregate	of	$179.5	million.	The	Company	used	$0.5	million	in	cash	on	hand	and	$179.0 million	in	borrowings	under	the	delayed	draw	term	loan	component	of	the	American	Tower	credit	facility	to	fund	the	redemption.	The	Company	expects	to	record	a	charge	of $19.9	million	in	the	first	quarter	of	2006	related	to	the	amounts	paid	in	excess	of	carrying	value	and	write-off	of	deferred	financing	fees.	Upon	completion	of	this	redemption, no	ATI	12.25%	Notes	remained	outstanding.

3.25%	Convertible	Notes—In	March	2006,	the	Company	issued	an	aggregate	of	1,840,025	shares	of	Class	A	common	stock	upon	conversion	of	$22.5	million	principal amount	of	3.25%	Notes.	Pursuant	to	the	terms	of	the	indenture,	the	holders	of	the	3.25%	Notes	received	81.808	shares	of	Class	A	common	stock	for	every	$1,000	principal amount	of	notes	converted.	In	connection	with	the	conversion,	the	Company	paid	such	holders	an	aggregate	of	$1.7	million,	calculated	based	on	the	accrued	and	unpaid interest	on	the	notes	and	the	discounted	value	of	the	future	interest	payments	on	the	notes.

Issuer	Purchases	of	Equity	Securities—Between	January	1,	2006	and	March	9,	2006,	the	Company	repurchased	3.9	million	shares	of	Class	A	common	stock	for	an	aggregate of	$117.4	million	pursuant	to	its	stock	repurchase	program.	As	discussed	in	note	14	above,	the	Company's	Board	of	Directors	approved	a	stock	repurchase	program	in November	2005	pursuant	to	which	the	Company	intends	to	purchase	up	to	$750.0	million	of	its	Class	A	common	stock	through	December	2006.

Interest	Rate	Swap	Agreements—In	January	2006,	the	Company	entered	into	two	additional	interest	rate	swap	agreements	to	manage	exposure	to	variable	rate	interest obligations	on	our	new	credit	facilities.	These	swaps	have	an	aggregate	notional	amount	of	$100.0	million,	a	weighted	average	fixed	rate	of	4.68%	and	will	expire	in	October 2010.	The	Company	has	designated	both	swaps	as	cash	flow	hedges.

# 19.				SUBSIDIARY	GUARANTEES

ATI's	payment	obligations	under	the	ATI	7.25%	Notes	are	fully	and	unconditionally	guaranteed	on	a	joint	and	several	basis	by	American	Tower	Corporation	(the	Parent)	and substantially	all	of	the	wholly	owned	domestic	subsidiaries	of	ATI	and	the	Parent,	other	than	SpectraSite	and	its	subsidiaries	(collectively	Guarantor

Subsidiaries).	Prior	to	the	Company's	redemption	of	the	ATI	12.25%	Notes	in	February	2006,	the	ATI	12.25%	Notes	were	likewise	fully	and	unconditionally	guaranteed	on	a joint	and	several	basis	by	ATI,	the	Parent,	and	the	Guarantor	Subsidiaries.	The	ATI	7.25%	Notes	and	the	subsidiary	guarantees	under	the	ATI	7.25%	Notes	are	subordinated to	all	indebtedness	under	the	American	Tower	credit	facility	and	the	SpectraSite	credit	facility.

The	following	condensed	consolidating	financial	data	illustrates	the	composition	of	the	Parent,	ATI	and	the	combined	Guarantor	Subsidiaries,	as	well	as	the	non-guarantor subsidiaries.	As	SpectraSite	is	not	a	Guarantor	Subsidiary	under	the	ATI	7.25%	Notes,	financial	data	for	SpectraSite	and	its	subsidiaries	is	included	with	the	information	for the	non-guarantor	subsidiaries.	These	statements	have	been	prepared	in	accordance	with	the	rules	and	requirements	of	the	SEC	and	the	requirements	contained	in	the	ATI 7.25%	Notes	indenture.	The	Company	believes	that	separate	complete	financial	statements	of	the	respective	guarantors	would	not	provide	additional	material	information that	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	new	American	Tower	credit	facility	and	the	new	SpectraSite credit	facility.

Investments	in	subsidiaries	are	accounted	for	by	the	Company	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.	In	addition,	for	presentation	purposes,	the	Company	has	reflected	its	net	deferred	tax	asset	in	the	Parent	column in	the	following	condensed	consolidating	financial	data.	Intercompany	receivables	and	payables	related	to	deferred	taxes	are	reflected	in	"investments	in	and	advances	to subsidiaries"	in	the	following	condensed	consolidating	financial	data.	The	principal	elimination	entries	eliminate	investments	in	subsidiaries	and	intercompany	balances	and transactions.

Subsequent	to	the	issuance	of	the	consolidated	financial	statements	for	the	year	ended	December	31,	2004,	management	determined	that	the	previously	presented	condensed consolidating	financial	data	for	2004	and	2003	did	not	reflect	certain	intercompany	loans,	related	interest	and	management	fees.	The	current	presentation	has	been	restated	to reflect	all	intercompany	activity	related	to	these	entities.	The	changes	in	presentation	did	not	effect	the	Company's	consolidated	financial	position	or	results	of	operations,	nor did	the	changes	adversely	impact	the	Company's	compliance	with	debt	covenants	or	ratios.

The	following	schedule	reconciles	the	amounts	as	previously	reported	in	the	Company's	condensed	consolidating	balance	sheet	as	of	December	31,	2004	and	the	condensed consolidating	statements	of	operations	for	the	years	ended	December	31,	2004	and	2003,	to	the	corresponding	restated	amounts	(in	thousands):

|  | Parent | ATI | Guarantor<br>Subsidiaries | Non-<br>Guarantor<br>Subsidiaries | Eliminations | Consolidated<br>Totals |
| :--- | :--- | :--- | :--- | :--- | :--- | :--- |
| December\t31,\t2004: |  |  |  |  |  |  |
| As\tpreviously\treported: |  |  |  |  |  |  |
| Total\tassets | $3,341,054 | $3,640,154 | $505,165 | $561,717 | $(2,962,118) | $5,085,972 |
| Total\tequity | 1,470,953 | 1,965,231 | 501,677 | 495,210 | (2,962,118) | 1,470,953 |
| Net\t(loss)\tincome | (247,587) | (140,749) | 22,742 | 24,362 | 93,645 | (247,587) |
| As\trestated: |  |  |  |  |  |  |
| Total\tassets | 3,341,054 | 2,054,797 | 2,043,797 | 576,023 | (2,929,699) | 5,085,972 |
| Total\tequity | 1,470,953 | 379,874 | 2,040,309 | 509,516 | (2,929,699) | 1,470,953 |
| Net\t(loss)\tincome | (247,587) | (207,932) | 89,925 | 5,574 | 112,433 | (247,587) |
| December\t31,\t2003: |  |  |  |  |  |  |
| Net\t(loss)\tincome\tas\tpreviously\treported | $(325,321) | $(141,599) | $2,301 | $(18,282) | $157,580 | $(325,321) |
| Net\t(loss)\tincome\tas\trestated | (325,321) | (214,409) | 75,111 | (30,828) | 170,126 | (325,321) |

# CONDENSED	CONSOLIDATING	BALANCE	SHEET

|  | Parent | ATI | Guarantor<br>Subsidiaries | Non-Guarantor<br>Subsidiaries | Eliminations | Consolidated<br>Totals |
| :--- | :--- | :--- | :--- | :--- | :--- | :--- |
| ASSETS |  |  |  |  |  |  |
| CURRENT\tASSETS: |  |  |  |  |  |  |
| Cash\tand\tcash\tequivalents | $35,010 | $43,973 | $110 | $33,608 |  | $112,701 |
| Accounts\treceivable,\tnet |  | 20,374 | 1,812 | 14,809 |  | 36,995 |
| Prepaid\tand\tother\tcurrent\tassets | 4,995 | 23,529 |  | 16,299 |  | 44,823 |
| Deferred\tincome\ttaxes | 8,119 |  |  | 23,240 |  | 31,359 |
| Total\tcurrent\tassets | 48,124 | 87,876 | 1,922 | 87,956 |  | 225,878 |
| PROPERTY\tAND\tEQUIPMENT,\tnet |  | 1,814,216 | 18,072 | 1,628,238 |  | 3,460,526 |
| INTANGIBLE\tASSETS,\tnet | 25,916 | 1,285,631 | 48,908 | 2,859,408 |  | 4,219,863 |
| INVESTMENTS\tIN\tAND\tADVANCES\tTO\tSUBSIDIARIES | 5,323,392 | 25,973 | 44,383 |  | $(5,393,748) |  |
| INTERCOMPANY\tNOTES\t(PAYABLE)\tRECEIVABLE |  | (1,400,277) | 1,786,528 | (386,251) |  |  |
| OTHER\tLONG-TERM\tASSETS | 667,574 | 188,699 |  | 5,680 |  | 861,953 |
| TOTAL | $6,065,006 | $2,002,118 | $1,899,813 | $4,195,031 | $(5,393,748) | $8,768,220 |
| LIABILITIES\tAND\tSTOCKHOLDERS'\tEQUITY |  |  |  |  |  |  |
| CURRENT\tLIABILITIES: |  |  |  |  |  |  |
| Accounts\tpayable\tand\taccrued\texpenses | $32,229 | $99,179 | $516 | $81,484 |  | $213,408 |
| Current\tportion\tof\tlong-term\tobligations | 48 | 161,237 |  | 868 |  | 162,153 |
| Other\tcurrent\tliabilities |  | 37,526 |  | 40,129 |  | 77,655 |
| Total\tcurrent\tliabilities | 32,277 | 297,942 | 516 | 122,481 |  | 453,216 |
| LONG-TERM\tOBLIGATIONS | 1,499,763 | 1,217,436 |  | 734,077 |  | 3,451,276 |
| OTHER\tLONG-TERM\tLIABILITIES | 3,086 | 165,248 | 98 | 158,922 |  | 327,354 |
| Total\tliabilities | 1,535,126 | 1,680,626 | 614 | 1,015,480 |  | 4,231,846 |
| MINORITY\tINTEREST\tIN\tSUBSIDIARIES |  |  |  | 9,794 |  | 9,794 |
| STOCKHOLDERS'\tEQUITY | 4,529,880 | 321,492 | 1,899,199 | 3,169,757 | $(5,393,748) | 4,526,580 |
| TOTAL | $6,065,006 | $2,002,118 | $1,899,813 | $4,195,031 | $(5,393,748) | $8,768,220 |

# CONDENSED	CONSOLIDATING	STATEMENT	OF	OPERATIONS

|  | Parent | ATI | Guarantor<br>Subsidiaries | Non-Guarantor<br>Subsidiaries | Eliminations | Consolidated<br>Totals |
| :--- | :--- | :--- | :--- | :--- | :--- | :--- |
| Operating\trevenues |  | $609,605 | $6,529 | $328,652 |  | $944,786 |
| Operating\texpenses |  | 534,748 | 8,246 | 258,598 |  | 801,592 |
| Operating\tincome\t(loss)\tfrom\tcontinuing\toperations |  | 74,857 | (1,717) | 70,054 |  | 143,194 |
| Other\tincome\t(expense): |  |  |  |  |  |  |
| Interest\tincome,\tTV\tAzteca,\tnet |  |  |  | 14,232 |  | 14,232 |
| Interest\t(expense)\tincome,\tnet | (94,796) | (221,747) | 154,330 | (55,804) |  | (218,017) |
| Other\t(expense)\tincome | (24,663) | (46,780) | 8,989 | (4,429) |  | (66,883) |
| (LOSS)\tINCOME\tFROM\tCONTINUING\tOPERATIONS\tBEFORE\tINCOME |  |  |  |  |  |  |
| TAXES,\tMINORITY\tINTEREST\tAND\tLOSS\tON\tEQUITY\tMETHOD |  |  |  |  |  |  |
| INVESTMENTS | (119,459) | (193,670) | 161,602 | 24,053 |  | (127,474) |
| Income\ttax\tbenefit\t(provision) | 10,614 | 8,999 | (7,508) | (16,108) |  | (4,003) |
| Minority\tinterest\tin\tnet\tearnings\tof\tsubsidiaries |  |  |  | (575) |  | (575) |
| Loss\ton\tequity\tmethod\tinvestments |  | (2,078) |  |  |  | (2,078) |
| Equity\tin\t(loss)\tincome\tof\tsubsidiaries,\tnet\tof\tincome\ttaxes\trecorded\tat\tthe\tsubsidiary |  |  |  |  |  |  |
| level | (61,479) | 1,987 | (16,053) |  | $75,545 |  |
| (LOSS)\tINCOME\tFROM\tCONTINUING\tOPERATIONS\tBEFORE\tCUMULATIVE |  |  |  |  |  |  |
| EFFECT\tOF\tCHANGE\tIN\tACCOUNTING\tPRINCIPLE | (170,324) | (184,762) | 138,041 | 7,370 | 75,545 | (134,130) |
| LOSS\tFROM\tDISCONTINUED\tOPERATIONS,\tNET\tOF\tINCOME\tTAX |  |  |  |  |  |  |
| BENEFIT | (1,266) | (669) |  |  |  | (1,935) |
| (LOSS)\tINCOME\tBEFORE\tCUMULATIVE\tEFFECT\tOF\tCHANGE\tIN |  |  |  |  |  |  |
| ACCOUNTING\tPRINCIPLE | (171,590) | (185,431) | 138,041 | 7,370 | 75,545 | (136,065) |
| CUMULATIVE\tEFFECT\tOF\tCHANGE\tIN\tACCOUNTING\tPRINCIPLE,\tNET\tOF |  |  |  |  |  |  |
| INCOME\tTAX\tBENEFIT |  | (15,930) |  | (19,595) |  | (35,525) |
| NET\t(LOSS)\tINCOME | $ (171,590) | $ (201,361) | $138,041 | $(12,225) | $75,545 | $(171,590) |

# CONDENSED	CONSOLIDATING	STATEMENT	OF	CASH	FLOWS

|  | Parent | ATI | Guarantor<br>Subsidiaries | Non-<br>Guarantor<br>Subsidiaries | Consolidated<br>Totals |
| :--- | :--- | :--- | :--- | :--- | :--- |
| CASH\tFLOWS\t(USED\tFOR)\tPROVIDED\tBY\tOPERATING\tACTIVITIES | $(106,391) | $ 224,524 | $152,008 | $127,063 | $397,204 |
| CASH\tFLOWS\tUSED\tFOR\tINVESTING\tACTIVITIES: |  |  |  |  |  |
| Payments\tfor\tpurchase\tof\tproperty\tand\tequipment\tand\tconstruction\tactivities |  | (32,531) | (90) | (56,016) | (88,637) |
| Payments\tfor\tacquisitions |  | (2,100) | (7,270) | (5,379) | (14,749) |
| Cash\tacquired\tfrom\tSpectraSite\tmerger,\tnet\tof\ttransaction\tcosts | (22,349) |  |  | 39,045 | 16,696 |
| Proceeds\tfrom\tsales\tof\tbusinesses\tand\tother\tlong-term\tassets |  | 4,830 | 748 | 1,303 | 6,881 |
| Deposits,\tinvestments\tand\tother\tlong-term\tassets |  | (477) | 25 | (273) | (725) |
| Cash\tused\tfor\tinvesting\tactivities | (22,349) | (30,278) | (6,587) | (21,320) | (80,534) |
| CASH\tFLOWS\tUSED\tFOR\tFINANCING\tACTIVITIES: |  |  |  |  |  |
| Net\tproceeds\tfrom\tstock\toptions,\twarrants\tand\tstock\tpurchase\tplans | 65,357 |  |  |  | 65,357 |
| Borrowings\tunder\tcredit\tfacilities |  | 843,000 |  | 700,000 | 1,543,000 |
| Repayment\tof\tnotes\tpayable,\tcredit\tfacilities\tand\tcapital\tleases | (293,253) | (957,345) |  | (698,846) | (1,949,444) |
| Purchase\tof\tClass\tA\tcommon\tstock | (68,927) |  |  |  | (68,927) |
| Deferred\tfinancing\tcosts\tand\tother\tfinancing\tactivities | (856) | (4,808) |  | (3,848) | (9,512) |
| Investment\tin\tand\tadvances\tfrom\t(to)\tsubsidiaries | 267,946 | (37,294) | (145,618) | (85,034) |  |
| Cash\tused\tfor\tfinancing\tactivities | (29,733) | (156,447) | (145,618) | (87,728) | (419,526) |
| NET\t(DECREASE)\tINCREASE\tIN\tCASH\tAND\tCASH\tEQUIVALENTS | (158,473) | 37,799 | (197) | 18,015 | (102,856) |
| CASH\tAND\tCASH\tEQUIVALENTS,\tBEGINNING\tOF\tPERIOD | 193,483 | 6,174 | 307 | 15,593 | 215,557 |
| CASH\tAND\tCASH\tEQUIVALENTS,\tEND\tOF\tPERIOD | $35,010 | $43,973 | $110 | $33,608 | $112,701 |

# (As	Restated)

|  | Parent | ATI | Guarantor<br>Subsidiaries | Non-Guarantor<br>Subsidiaries | Eliminations | Consolidated<br>Totals |
| :--- | :--- | :--- | :--- | :--- | :--- | :--- |
| ASSETS |  |  |  |  |  |  |
| CURRENT\tASSETS: |  |  |  |  |  |  |
| Cash\tand\tcash\tequivalents | $193,483 | $6,174 | $307 | $15,593 |  | $215,557 |
| Accounts\treceivable,\tnet |  | 33,880 | 471 | 4,283 |  | 38,634 |
| Prepaid\tand\tother\tcurrent\tassets | 3,793 | 33,243 | 3,102 | 5,229 |  | 45,367 |
| Deferred\tincome\ttaxes | 6,090 |  |  |  |  | 6,090 |
| Assets\theld\tfor\tsale |  |  | 3,389 |  |  | 3,389 |
| Total\tcurrent\tassets | 203,366 | 73,297 | 7,269 | 25,105 |  | 309,037 |
| PROPERTY\tAND\tEQUIPMENT,\tnet |  | 1,977,603 | 18,466 | 277,287 |  | 2,273,356 |
| INTANGIBLE\tASSETS,\tnet | 36,463 | 1,390,729 | 9,853 | 140,941 |  | 1,577,986 |
| INVESTMENTS\tIN\tAND\tADVANCES\tTO\tSUBSIDIARIES | 2,466,908 | 24,149 | 438,642 |  | $(2,929,699) |  |
| INTERCOMPANY\tNOTES\t(PAYABLE)\tRECEIVABLE |  | (1,583,848) | 1,569,542 | 14,306 |  |  |
| OTHER\tLONG-TERM\tASSETS | 634,317 | 172,867 | 25 | 118,384 |  | 925,593 |
| TOTAL | $3,341,054 | $2,054,797 | $2,043,797 | $576,023 | $(2,929,699) | $5,085,972 |
| LIABILITIES\tAND\tSTOCKHOLDERS'\tEQUITY |  |  |  |  |  |  |
| CURRENT\tLIABILITIES: |  |  |  |  |  |  |
| Accounts\tpayable\tand\taccrued\texpenses | $36,954 | $99,874 | $2,932 | $21,378 |  | $161,138 |
| Current\tportion\tof\tlong-term\tobligations | 133,046 | 4,855 |  | 485 |  | 138,386 |
| Other\tcurrent\tliabilities |  | 32,233 | 458 | (10) |  | 32,681 |
| Total\tcurrent\tliabilities | 170,000 | 136,962 | 3,390 | 21,853 |  | 332,205 |
| LONG-TERM\tOBLIGATIONS | 1,698,827 | 1,421,768 |  | 34,633 |  | 3,155,228 |
| OTHER\tLONG-TERM\tLIABILITIES | 1,274 | 116,193 | 98 | 3,940 |  | 121,505 |
| Total\tliabilities | 1,870,101 | 1,674,923 | 3,488 | 60,426 |  | 3,608,938 |
| MINORITY\tINTEREST\tIN\tSUBSIDIARIES |  |  |  | 6,081 |  | 6,081 |
| STOCKHOLDERS'\tEQUITY | 1,470,953 | 379,874 | 2,040,309 | 509,516 | $(2,929,699) | 1,470,953 |
| TOTAL | $3,341,054 | $2,054,797 | $2,043,797 | $576,023 | $(2,929,699) | $5,085,972 |

|  | Parent | ATI | Guarantor<br>Subsidiaries | Non-Guarantor<br>Subsidiaries | Eliminations | Consolidated<br>Totals |
| :--- | :--- | :--- | :--- | :--- | :--- | :--- |
| Operating\trevenues |  | $564,022 | $15,003 | $127,635 |  | $706,660 |
| Operating\texpenses |  | 524,374 | 15,074 | 97,458 |  | 636,906 |
| Operating\tincome\t(loss)\tfrom\tcontinuing\toperations |  | 39,648 | (71) | 30,177 |  | 69,754 |
| Other\tincome\t(expense): |  |  |  |  |  |  |
| Interest\tincome,\tTV\tAzteca,\tnet |  |  |  | 14,316 |  | 14,316 |
| Interest\t(expense)\tincome,\tnet | $ (132,111) | (257,909) | 132,960 | (333) |  | (257,393) |
| Other\texpense | (69,243) | (71,021) | (5) | (545) |  | (140,814) |
| (LOSS)\tINCOME\tFROM\tCONTINUING\tOPERATIONS\tBEFORE\tINCOME |  |  |  |  |  |  |
| TAXES,\tMINORITY\tINTEREST\tAND\tLOSS\tON\tEQUITY\tMETHOD |  |  |  |  |  |  |
| INVESTMENTS | (201,354) | (289,282) | 132,884 | 43,615 |  | (314,137) |
| Income\ttax\tbenefit\t(provision) | 70,474 | 91,727 | (46,350) | (35,675) |  | 80,176 |
| Minority\tinterest\tin\tnet\tearnings\tof\tsubsidiaries |  |  |  | (2,366) |  | (2,366) |
| Loss\ton\tequity\tmethod\tinvestments |  | (2,915) |  |  |  | (2,915) |
| Equity\tin\t(loss)\tincome\tof\tsubsidiaries,\tnet\tof\tincome\ttaxes\trecorded\tat\tthe\tsubsidiary |  |  |  |  |  |  |
| level | (118,007) | 1,426 | 4,148 |  | $112,433 |  |
| (LOSS)\tINCOME\tFROM\tCONTINUING\tOPERATIONS | (248,887) | (199,044) | 90,682 | 5,574 | 112,433 | (239,242) |
| INCOME\t(LOSS)\tFROM\tDISCONTINUED\tOPERATIONS,\tNET\tOF\tINCOME |  |  |  |  |  |  |
| TAX\tBENEFIT\t(PROVISION) | 1,300 | (8,888) | (757) |  |  | (8,345) |
| NET\t(LOSS)\tINCOME | $ (247,587) | $ (207,932) | $89,925 | $5,574 | $112,433 | $(247,587) |

|  | Parent | ATI | Guarantor<br>Subsidiaries | Non-<br>Guarantor<br>Subsidiaries | Consolidated<br>Totals |
| :--- | :--- | :--- | :--- | :--- | :--- |
| CASH\tFLOWS\t(USED\tFOR)\tPROVIDED\tBY\tOPERATING\tACTIVITIES | $(149,729) | $ 139,876 | $133,393 | $93,160 | $216,700 |
| CASH\tFLOWS\t(USED\tFOR)\tPROVIDED\tBY\tINVESTING\tACTIVITIES: |  |  |  |  |  |
| Payments\tfor\tpurchase\tof\tproperty\tand\tequipment\tand\tconstruction\tactivities |  | (26,547) | (1,530) | (14,104) | (42,181) |
| Payments\tfor\tacquisitions |  | (4,867) |  | (32,483) | (37,350) |
| Proceeds\tfrom\tsales\tof\tbusinesses\tand\tother\tlong-term\tassets |  | 23,965 | 3,683 | 4,339 | 31,987 |
| Restricted\tcash\tand\tinvestments | 120,915 | 49,121 |  |  | 170,036 |
| Deposits,\tinvestments\tand\tother\tlong-term\tassets |  | 2,885 | 25 | (582) | 2,328 |
| Cash\tprovided\tby\t(used\tfor)\tinvesting\tactivities | 120,915 | 44,557 | 2,178 | (42,830) | 124,820 |
| CASH\tFLOWS\tPROVIDED\tBY\t(USED\tFOR)\tFINANCING\tACTIVITIES: |  |  |  |  |  |
| Proceeds\tfrom\tissuance\tof\tdebt\tsecurities | 1,072,500 |  |  |  | 1,072,500 |
| Net\tproceeds\tfrom\tstock\toptions\tand\tstock\tpurchase\tplans | 40,556 |  |  |  | 40,556 |
| Borrowings\tunder\tcredit\tfacility |  | 700,000 |  |  | 700,000 |
| Repayment\tof\tnotes\tpayable,\tcredit\tfacility\tand\tcapital\tleases | (1,063,342) | (939,413) |  | (646) | (2,003,401) |
| Deferred\tfinancing\tcosts\tand\tother\tfinancing\tactivities | (23,030) | (18,053) |  |  | (41,083) |
| Investment\tin\tand\tadvances\tfrom\t(to)\tsubsidiaries | 181,696 | 17,398 | (136,100) | (62,994) |  |
| Cash\tprovided\tby\t(used\tfor)\tfinancing\tactivities | 208,380 | (240,068) | (136,100) | (63,640) | (231,428) |
| NET\tINCREASE\t(DECREASE)\tIN\tCASH\tAND\tCASH\tEQUIVALENTS | 179,566 | (55,635) | (529) | (13,310) | 110,092 |
| CASH\tAND\tCASH\tEQUIVALENTS,\tBEGINNING\tOF\tYEAR | 13,917 | 61,809 | 836 | 28,903 | 105,465 |
| CASH\tAND\tCASH\tEQUIVALENTS,\tEND\tOF\tYEAR | $193,483 | $6,174 | $307 | $15,593 | $215,557 |

|  | Parent | ATI | Guarantor<br>Subsidiaries | Non-<br>Guarantor<br>Subsidiaries | Eliminations | Consolidated<br>Totals |
| :--- | :--- | :--- | :--- | :--- | :--- | :--- |
| Operating\trevenues |  | $ 530,058 | $4,131 | $98,304 |  | $632,493 |
| Operating\texpenses |  | 545,226 | 6,104 | 83,780 |  | 635,110 |
| Operating\t(loss)\tincome\tfrom\tcontinuing\toperations |  | (15,168) | (1,973) | 14,524 |  | (2,617) |
| Other\tincome\t(expense): |  |  |  |  |  |  |
| Interest\tincome,\tTV\tAzteca,\tnet |  |  |  | 14,222 |  | 14,222 |
| Interest\t(expense)\tincome,\tnet | $(144,872) | (261,635) | 133,349 | (1,370) |  | (274,528) |
| Other\texpense | (34,285) | (19,402) |  | (1,108) |  | (54,795) |
| (LOSS)\tINCOME\tFROM\tCONTINUING\tOPERATIONS\tBEFORE\tINCOME\tTAXES,\tMINORITY |  |  |  |  |  |  |
| INTEREST\tAND\tLOSS\tON\tEQUITY\tMETHOD\tINVESTMENTS | (179,157) | (296,205) | 131,376 | 26,268 |  | (317,718) |
| Income\ttax\tbenefit\t(provision) | 37,590 | 101,530 | (45,949) | (15,375) |  | 77,796 |
| Minority\tinterest\tin\tnet\tearnings\tof\tsubsidiaries |  |  |  | (3,703) |  | (3,703) |
| Loss\ton\tequity\tmethod\tinvestments | (9,994) | (11,227) |  |  |  | (21,221) |
| Equity\tin\t(loss)\tincome\tof\tsubsidiaries,\tnet\tof\tincome\ttaxes\trecorded\tat\tthe\tsubsidiary\tlevel | (173,760) | (2,184) | 5,818 |  | $170,126 |  |
| (LOSS)\tINCOME\tFROM\tCONTINUING\tOPERATIONS | (325,321) | (208,086) | 91,245 | 7,190 | 170,126 | (264,846) |
| LOSS\tFROM\tDISCONTINUED\tOPERATIONS,\tNET\tOF\tINCOME\tTAX\tBENEFIT |  | (6,323) | (16,134) | (38,018) |  | (60,475) |
| NET\t(LOSS)\tINCOME | $(325,321) | $(214,409) | $75,111 | $(30,828) | $170,126 | $(325,321) |

|  | Parent | ATI | Guarantor<br>Subsidiaries | Non-<br>Guarantor<br>Subsidiaries | Consolidated<br>Totals |
| :--- | :--- | :--- | :--- | :--- | :--- |
| CASH\t(USED\tFOR)\tPROVIDED\tBY\tOPERATING\tACTIVITIES | $(121,884) | $99,801 | $104,667 | $73,802 | $156,386 |
| CASH\tFLOWS\t(USED\tFOR)\tPROVIDED\tBY\tINVESTING\tACTIVITIES: |  |  |  |  |  |
| Payments\tfor\tpurchase\tof\tproperty\tand\tequipment\tand\tconstruction\tactivities |  | (40,483) | (428) | (20,697) | (61,608) |
| Payments\tfor\tacquisitions |  | (202) | (129) | (94,746) | (95,077) |
| Proceeds\tfrom\tsales\tof\tbusinesses\tand\tother\tlong-term\tassets |  | 90,328 | 1,618 | 18,807 | 110,753 |
| Restricted\tcash\tand\tinvestments | (120,915) | (49,121) |  |  | (170,036) |
| Deposits,\tinvestments\tand\tother\tlong-term\tassets |  | (571) | 50 | (9,557) | (10,078) |
| Cash\t(used\tfor)\tprovided\tby\tinvesting\tactivities | (120,915) | (49) | 1,111 | (106,193) | (226,046) |
| CASH\tFLOWS\tPROVIDED\tBY\t(USED\tFOR)\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\tstock\tpurchase\tplans | 126,847 |  |  |  | 126,847 |
| Repayment\tof\tnotes\tpayable,\tcredit\tfacility\tand\tcapital\tleases | (258,096) | (808,085) |  | (5,775) | (1,071,956) |
| Deferred\tfinancing\tcosts\tand\tother\tfinancing\tactivities | (7,250) | (32,192) |  |  | (39,442) |
| Investments\tin\tand\tadvances\tfrom\t(to)\tsubsidiaries | 185,215 | (125,150) | (105,698) | 45,633 |  |
| Cash\tprovided\tby\t(used\tfor)\tfinancing\tactivities | 256,716 | (145,543) | (105,698) | 42,358 | 47,833 |
| NET\tINCREASE\t(DECREASE)\tIN\tCASH\tAND\tCASH\tEQUIVALENTS | 13,917 | (45,791) | 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 | $13,917 | $61,809 | $836 | $28,903 | $105,465 |

# INDEX	TO	EXHIBITS

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:

| 2 | Agreement	and	Plan	of	Merger	by	and	among	American	Tower	Corporation,	Asteroid	Merger	Sub,	LLC	and<br>SpectraSite,	Inc.,	dated	as	of	May	3,	2005 | 2(14) |
| :--- | :--- | :--- |
| 3.1 | Amended\tand\tRestated\tCertificate\tof\tIncorporation\tof\tthe\tCompany\tas\tfiled\twith\tthe\tSecretary\tof\tState\tof\tthe\tState\tof\nDelaware\ton\tAugust\t8,\t2005 | Annex\tE\t(15) |
| 3.2 | By-Laws,\tas\tamended\tNovember\t13,\t2003,\tof\tthe\tCompany | 3.2(9) |
| 4.1 | Indenture,\tdated\tas\tof\tOctober\t4,\t1999,\tby\tand\tbetween\tthe\tCompany\tand\tThe\tBank\tof\tNew\tYork,\tas\tTrustee,\tfor\tthe |  |
|  | 2.25%\tConvertible\tNotes\tdue\t2009,\tincluding\tthe\tform\tof\t2.25%\tConvertible\tNote | 4.2(1) |
| 4.2 | Indenture,\tdated\tas\tof\tFebruary\t15,\t2000,\tby\tand\tbetween\tthe\tCompany\tand\tThe\tBank\tof\tNew\tYork,\tas\tTrustee,\tfor\tthe |  |
|  | 5.0%\tConvertible\tNotes\tdue\t2010,\tincluding\tthe\tform\tof\t5.0%\tConvertible\tNote | 4.1(2) |
| 4.3 | Indenture,\tdated\tas\tof\tAugust\t4,\t2003\tby\tand\tbetween\tthe\tCompany\tand\tThe\tBank\tof\tNew\tYork,\tas\tTrustee,\tfor\tthe |  |
|  | 3.25%\tConvertible\tNotes\tdue\t2010,\tincluding\tthe\tform\tof\t3.25%\tConvertible\tNote | 4.3(7) |

| Exhibit	No. | Description	of	Document | Exhibit	File	No. |
| :--- | :--- | :--- |
| 4.4 | Indenture,\tdated\tas\tof\tNovember\t18,\t2003,\tby\tand\tamong\tATI,\tthe\tGuarantors\tnamed\ttherein\tand\tThe\tBank\tof\tNew |  |
|  | Subordinated\tNote | 4.6(8) |
| 4.5 | Indenture,\tdated\tas\tof\tFebruary\t4,\t2004,\tby\tand\tbetween\tthe\tCompany\tand\tThe\tBank\tof\tNew\tYork,\tas\tTrustee,\tfor\tthe |  |
|  | 7.50%\tSenior\tNotes\tdue\t2012,\tincluding\tthe\tform\tof\t7.50%\tSenior\tNote | 4.8(9) |
| 4.6 | Indenture,\tdated\tas\tof\tAugust\t20,\t2004,\tby\tand\tbetween\tthe\tCompany\tand\tThe\tBank\tof\tNew\tYork,\tas\tTrustee,\tfor\tthe |  |
|  | 3.00%\tConvertible\tNotes\tDue\tAugust\t15,\t2012,\tincluding\tthe\tform\tof\t3.00%\tConvertible\tNote | 4.3(11) |
| 4.7 | Indenture,\tdated\tas\tof\tOctober\t5,\t2004,\tby\tand\tbetween\tthe\tCompany\tand\tThe\tBank\tof\tNew\tYork,\tas\tTrustee,\tfor\tthe |  |
|  | 7.125%\tSenior\tNotes\tDue\t2012,\tincluding\tthe\tform\tof\t7.125%\tSenior\tNote | 4.1(12) |
| 4.8 |  |  |
|  | York,\tas\tTrustee,\tsupplementing\tthe\tindenture\tfor\tthe\t7.125%\tSenior\tNotes\tDue\t2012,\tdated\tas\tof\tOctober\t5,\t2004 | 4.1(13) |
| 4.9 | Warrant\tAgreement,\tdated\tas\tof\tJanuary\t29,\t2003,\tby\tand\tamong\tthe\tCompany\tand\tthe\tBank\tof\tNew\tYork,\tas |  |
|  | warrant\tagent | 4.6(6) |
| 4.10 | Form\tof\tWarrant\tto\tpurchase\tan\taggregate\tof\t11,389,012\tshares\tof\tClass\tA\tCommon\tStock | 4.7(6) |
| 4.11 |  |  |
|  | on\tForm\t8-K\t(File\tNo.\t000-27217)\tfiled\ton\tFebruary\t11,\t2003) | 10.4 |
| 4.12 |  |  |
|  | SpectraSite,\tInc.,\tThe\tBank\tof\tNew\tYork\tand\tEquiServe\tTrust\tCompany,\tN.A. | 4.2(17) |
| 10.1 | Amended\tand\tRestated\tAmerican\tTower\tSystems\tCorporation\t1997\tStock\tOption\tPlan,\tas\tamended\tMay\t17,\t2001 | 10.1(5)* |
| 10.2 | American\tTower\tCorporation\t2000\tEmployee\tStock\tPurchase\tPlan | 10.18(3)* |
| 10.3 | First\tAmendment\tto\tAmerican\tTower\tCorporation\t2000\tEmployee\tStock\tPurchase\tPlan,\tdated\tas\tof\tNovember\t13, |  |
|  | 2003 | 10.3(9)* |
| 10.4 | ATC\tMexico\tHolding\tCorp.\t2001\tStock\tOption\tPlan | 10.3(6)* |
| 10.5 | ATC\tSouth\tAmerica\tHolding\tCorp.\t2004\tStock\tOption\tPlan | 10.2(10)* |
| 10.6 |  |  |
|  | Holdings,\tInc.\tCurrent\tReport\ton\tForm\t8-K\t(File\tNo.\t000-27217)\tfiled\ton\tFebruary\t11,\t2003) | 10.6* |
| 10.7 |  |  |
|  | 10.11\tto\tthe\tSpectraSite,\tInc.\tRegistration\tStatement\ton\tForm\tS-1\t(File\tNo.\t333-112154)\tfiled\ton\tFebruary\t2,\t2004) | 10.11* |

* Management	contracts	and	compensatory	plans	and	arrangements	required	to	be	filed	as	exhibits	to	this	Form	10-K	pursuant	to	Item	15(a)(3).



Question: what is the percentage change in impairment charges and net losses from 2004 to 2005?
Calculation: impairment_charges_2005 = 16.8
impairment_charges_2004 = 17.7
change = impairment_charges_2005 - impairment_charges_2004
percent_change = change / impairment_charges_2004
answer = percent_change * 100
Answer: -5.1%