##### Table of Contents



U.S. SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM 10-Q

[x] QUARTERLY REPORT UNDER SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended June 30, 2001

[ ] TRANSITION REPORT UNDER SECTION 13 OR 15 (d) OF THE EXCHANGE ACT

For the transition period from                     to

COMMISSION FILE NUMBER: 0-27217

SpectraSite Holdings, Inc.(Name of registrant as specified in its charter)

|                                                                 |  |                                                              |  |                                                  
|---------------------------------------------------------------- |  | ------------------------------------------------------------ |  | -------------------------------------------------
|Delaware(State or jurisdiction of
incorporation or organization) |  | 4899(Primary Standard Industrial
Classification Code Number) |  | 56-2027322(I.R.S. Employer
Identification Number)

SpectraSite Holdings, Inc.
100 Regency Forest Drive, Suite 400
Cary, North Carolina 27511
(919) 468-0112(Address and telephone number of principal executive offices and principal place of business)

Check whether the issuer:

(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 (box with an X)
                    
No (empty ballot box)

As of July 31, 2001, the registrant had only one outstanding class of common
stock, of which there were
151,210,266 shares outstanding.

1



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TABLE OF CONTENTS



|                               |                                                                                               |  |  |  |  |  |  | 
|------------------------------ | --------------------------------------------------------------------------------------------- |  |  |  |  |  |  | 
|PART I  FINANCIAL INFORMATION
|                               | ITEM 1. UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS                                
|                               | CONDENSED CONSOLIDATED BALANCE SHEETS                                                        
|                               | UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS                                    
|                               | UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS                                    
|                               | NOTES TO THE UNAUDITED CONDENSED FINANCIAL STATEMENTS                                        
|                               | ITEM 2 MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
|                               | ITEM 3 QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK                           
|PART II  OTHER INFORMATION   
|                               | ITEM 1. LEGAL PROCEEDINGS                                                                    
|                               | ITEM 2. CHANGES IN SECURITIES AND USE
OF PROCEEDS                                            
|                               | ITEM 3. DEFAULTS UPON SENIOR SECURITIES                                                      
|                               | ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS                                  
|                               | ITEM 5. OTHER INFORMATION                                                                    
|                               | ITEM 6. EXHIBITS AND REPORTS ON FORM 8K                                                     



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##### Table of Contents



INDEX

|                               |                                                                                                                     |  |  |    | 
|------------------------------ | ------------------------------------------------------------------------------------------------------------------- |  |  | -- | 
|PART I  FINANCIAL INFORMATION |                                                                                                                     |  |  |   
|                              
|                              
|                              
|                              
|                               | ITEM 1  UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS                                                      |  |  |    | 
|                              
|                              
|                              
|                              
|                               | Condensed Consolidated Balance Sheets at June 30, 2001 (unaudited) and December 31, 2000                            |  |  | 3  | 
|                              
|                              
|                              
|                              
|                               | Unaudited
Condensed Consolidated Statements of Operations for the three and six months ended June 30, 2001 and 2000 |  |  | 4  | 
|                              
|                              
|                              
|                              
|                               | Unaudited Condensed Consolidated Statements of Cash Flows for the six months ended June 30, 2001 and 2000           |  |  | 5  | 
|                              
|                              
|                              
|                              
|                               | Notes to the Unaudited Condensed Consolidated Financial Statements                                                  |  |  | 6  | 
|                              
|                              
|                              
|                              
|                               | ITEM 2  MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS                      |  |  | 11 | 
|                              
|                              
|                              
|                              
|                               | ITEM 3  QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK                                                 |  |  | 15 | 
|                              
|                              
|                              
|                              
|PART II  OTHER INFORMATION    |                                                                                                                     |  |  |   
|                              
|                              
|                              
|                              
|                               | ITEM 1  LEGAL PROCEEDINGS                                                                                          |  |  | 16 | 
|                              
|                              
|                              
|                              
|                               | ITEM 2  CHANGES IN SECURITIES AND USE OF PROCEEDS                                                                  |  |  | 16 | 
|                              
|                              
|                              
|                              
|                               | ITEM 3  DEFAULTS UPON SENIOR SECURITIES                                                                            |  |  | 16 | 
|                              
|                              
|                              
|                              
|                               | ITEM 4   SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS                                                       |  |  | 16 | 
|                              
|                              
|                              
|                              
|                               | ITEM 5  OTHER INFORMATION                                                                                          |  |  | 17 | 
|                              
|                              
|                              
|                              
|                               | ITEM 6  EXHIBITS AND REPORTS ON FORM 8-K                                                                           |  |  | 17 | 
|                              
|                              
|                              
|                              
|                               | SIGNATURES                                                                                                          |  |  | 18 | 

2



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##### Table of Contents






PART I  FINANCIAL INFORMATION




ITEM 1. UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

SpectraSite Holdings, Inc. and Subsidiaries




CONDENSED CONSOLIDATED BALANCE
SHEETS


At June 30, 2001 and December 31, 2000
(dollars in thousands)


|                                           |  |                                                                                                                                                              |           |                            |           |             |           |              |           |       |           | 
|------------------------------------------ |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------ | --------- | -------------------------- | --------- | ----------- | --------- | ------------ | --------- | ----- | --------- | 
|                                           |  |                                                                                                                                                              |           |                            |           | June 30,    |           | December 31,
|                                           |  |                                                                                                                                                              |           |                            |           | 2001        |           | 2000        
|                                           |  |                                                                                                                                                              |           |                            |           |             |           |             
|                                           |  |                                                                                                                                                              |           |                            |           | (unaudited)
|Assets                                     |  |                                                                                                                                                              |           |                            |           |             |           |             
|                                          
|                                          
|                                          
|                                          
|Current assets:                            |  |                                                                                                                                                              |           |                            |           |             |           |             
|                                          
|                                          
|                                          
|                                          
|                                           |  | Cash and cash equivalents                                                                                                                                    | $         | 206,105                    |           |             | $         | 552,653      |          
|                                          
|                                          
|                                          
|                                          
|                                           |  | Accounts receivable, net of allowance of $8,709 and $3,585                                                                                                   |           | 87,747                     |           |             |           | 92,487       |          
|                                          
|                                          
|                                          
|                                          
|                                           |  | Costs and estimated earnings in excess of billings                                                                                                           |           | 27,623                     |           |             |           | 20,531       |          
|                                          
|                                          
|                                          
|                                          
|                                           |  | Inventories                                                                                                                                                  |           |                            |           | 16,415      |           |              |           | 8,995 |          
|                                          
|                                          
|                                          
|                                          
|                                           |  | Prepaid expenses and other                                                                                                                                   |           |                            | 13,454    |             |           |              | 10,044    |      
|                                           |  |                                                                                                                                                              |           |                            |           |             |           |             
|                                           |  |                                                                                                                                                              |           | Total current assets       |           |             | 351,344   |              |           |       | 684,710   | 
|                                          
|                                          
|                                          
|                                          
|Property and equipment, net                |  |                                                                                                                                                              | 2,205,572 |                            |           |             | 1,540,337 |             
|                                          
|                                          
|                                          
|                                          
|Goodwill and other intangible assets, net  |  |                                                                                                                                                              | 531,626   |                            |           |             | 570,749   |             
|                                          
|                                          
|                                          
|                                          
|Investments in affiliates                  |  |                                                                                                                                                              | 131,117   |                            |           |             | 177,117   |             
|                                          
|                                          
|                                          
|                                          
|Other assets                               |  |                                                                                                                                                              | 71,428    |                            |           |             | 81,192    |             
|                                           |  |                                                                                                                                                              |           |                            |           |             |           |             
|Total assets                               |  | $                                                                                                                                                            | 3,291,087 |                            |           | $           | 3,054,105 |             
|                                           |  |                                                                                                                                                              |           |                            |           |             |           |             
|Liabilities
and shareholders equity       |  |                                                                                                                                                              |           |                            |           |             |           |             
|                                          
|                                          
|                                          
|                                          
|Current
liabilities:                       |  |                                                                                                                                                              |           |                            |           |             |           |             
|                                          
|                                          
|                                          
|                                          
|                                           |  | Accounts payable                                                                                                                                             |           | $                          | 61,587    |             |           | $            | 54,562    |      
|                                          
|                                          
|                                          
|                                          
|                                           |  | Accrued expenses and other current liabilities                                                                                                               |           |                            | 58,505    |             |           |              | 45,227    |      
|                                          
|                                          
|                                          
|                                          
|                                           |  | Billings in excess of costs and estimated earnings                                                                                                           |           |                            | 6,099     |             |           |              | 10,218    |      
|                                           |  |                                                                                                                                                              |           |                            |           |             |           |             
|                                           |  |                                                                                                                                                              |           | Total current liabilities  |           |             | 126,191   |              |           |       | 110,007   | 
|                                          
|                                          
|                                          
|                                          
|Long-term debt                             |  |                                                                                                                                                              | 500,646   |                            |           |             | 200,812   |             
|                                          
|                                          
|                                          
|                                          
|Senior notes                               |  |                                                                                                                                                              | 400,000   |                            |           |             | 400,000   |             
|                                          
|                                          
|                                          
|                                          
|Senior convertible notes                   |  |                                                                                                                                                              | 200,000   |                            |           |             | 200,000   |             
|                                          
|                                          
|                                          
|                                          
|Senior discount notes                      |  |                                                                                                                                                              | 962,652   |                            |           |             | 908,243   |             
|                                          
|                                          
|                                          
|                                          
|Other long-term liabilities                |  |                                                                                                                                                              | 23,444    |                            |           |             | 10,243    |             
|                                           |  |                                                                                                                                                              |           |                            |           |             |           |             
|                                           |  |                                                                                                                                                              |           | Total liabilities          |           |             | 2,212,933 |              |           |       | 1,829,305 | 
|                                           |  |                                                                                                                                                              |           |                            |           |             |           |             
|Shareholders equity:                      |  |                                                                                                                                                              |           |                            |           |             |           |             
|                                          
|                                          
|                                          
|                                          
|                                           |  | Common stock ($0.001 par value, 300,000,000 shares
authorized and 150,547,123 and 144,914,484 issued and
outstanding at June 30, 2001 and December 31, 2000) |           |                            | 151       |             |           |              | 145       |      
|                                          
|                                          
|                                          
|                                          
|                                           |  | Additional paid-in-capital                                                                                                                                   |           |                            | 1,616,131 |             |           |              | 1,492,845 |      
|                                          
|                                          
|                                          
|                                          
|                                           |  | Accumulated other comprehensive income (loss)                                                                                                                |           |                            | (17,085   | )           |           |              | 1,922     |      
|                                          
|                                          
|                                          
|                                          
|                                           |  | Accumulated deficit                                                                                                                                          |           |                            | (521,043  | )           |           |              | (270,112  | )    
|                                           |  |                                                                                                                                                              |           |                            |           |             |           |             
|                                           |  |                                                                                                                                                              |           | Total shareholders equity |           |             | 1,078,154 |              |           |       | 1,224,800 | 
|                                           |  |                                                                                                                                                              |           |                            |           |             |           |             
|Total liabilities and shareholders equity |  | $                                                                                                                                                            | 3,291,087 |                            |           | $           | 3,054,105 |             
|                                           |  |                                                                                                                                                              |           |                            |           |             |           |             

See accompanying notes.

3



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##### Table of Contents



SpectraSite Holdings, Inc. and Subsidiaries




UNAUDITED CONDENSED
CONSOLIDATED STATEMENTS OF OPERATIONS


Three and Six Months Ended June 30, 2001 and 2000
(in thousands, except per share amounts)


|                                                                     |                  |                          |          |                    |         |                  |         |          |        |          |          |         |         |   |         |         |         | 
|-------------------------------------------------------------------- | ---------------- | ------------------------ | -------- | ------------------ | ------- | ---------------- | ------- | -------- | ------ | -------- | -------- | ------- | ------- | - | ------- | ------- | ------- | 
|                                                                     |                  |                          |          | Three Months Ended |         | Six Months Ended
|                                                                     |                  |                          |          |                    |         |                 
|                                                                     |                  |                          |          | June 30,           |         | June 30,         |         | June 30, |        | June 30,
|                                                                     |                  |                          |          | 2001               |         | 2000             |         | 2001     |        | 2000    
|                                                                     |                  |                          |          |                    |         |                  |         |          |        |         
|Revenues:                                                            |                  |                          |          |                    |         |                  |         |          |        |          |          |         |         |   |         |        
|                                                                    
|                                                                    
|                                                                    
|                                                                    
|                                                                     | Site leasing     |                          | $        | 53,001             |         |                  | $       | 25,662   |        |          | $        | 99,389  |         |   | $       | 45,946  |        
|                                                                    
|                                                                    
|                                                                    
|                                                                    
|                                                                     | Network services |                          |          | 58,901             |         |                  |         | 52,121   |        |          |          | 119,776 |         |   |         | 107,074 |        
|                                                                     |                  |                          |          |                    |         |                  |         |          |        |          |          |         |         |   |         |        
|                                                                     |                  | Total revenues           |          |                    | 111,902 |                  |         |          | 77,783 |          |          |         | 219,165 |   |         |         | 153,020 | 
|                                                                     |                  |                          |          |                    |         |                  |         |          |        |          |          |         |         |   |         |        
|Operating Expenses:                                                  |                  |                          |          |                    |         |                  |         |          |        |          |          |         |         |   |         |        
|                                                                    
|                                                                    
|                                                                    
|                                                                    
|Costs of operations, excluding depreciation
and amortization expense |                  |                          |          |                    |         |                  |         |          |        |          |          |         |         |   |         |        
|                                                                    
|                                                                    
|                                                                    
|                                                                    
|                                                                     | Site leasing     |                          |          | 22,158             |         |                  |         | 10,368   |        |          |          | 40,300  |         |   |         | 19,578  |        
|                                                                    
|                                                                    
|                                                                    
|                                                                    
|                                                                     | Network service  |                          |          | 46,929             |         |                  |         | 41,151   |        |          |          | 95,783  |         |   |         | 82,231  |        
|                                                                    
|                                                                    
|                                                                    
|                                                                    
|Selling, general and administrative expenses                         |                  |                          | 22,669   |                    |         |                  | 14,528  |          |        |          | 43,905   |         |         |   | 30,153  |        
|                                                                    
|                                                                    
|                                                                    
|                                                                    
|Depreciation and amortization expense                                |                  |                          | 42,548   |                    |         |                  | 22,736  |          |        |          | 79,258   |         |         |   | 42,662  |        
|                                                                    
|                                                                    
|                                                                    
|                                                                    
|Non-recurring charges                                                |                  |                          | 72,323   |                    |         |                  |        |          |        |          | 72,323   |         |         |   |        |        
|                                                                    
|                                                                    
|                                                                    
|                                                                    
|Non-cash compensation charges                                        |                  |                          | 532      |                    |         |                  | 353     |          |        |          | 1,063    |         |         |   | 729     |        
|                                                                     |                  |                          |          |                    |         |                  |         |          |        |          |          |         |         |   |         |        
|                                                                     |                  | Total operating expenses |          |                    | 207,159 |                  |         |          | 89,136 |          |          |         | 332,632 |   |         |         | 175,353 | 
|                                                                     |                  |                          |          |                    |         |                  |         |          |        |          |          |         |         |   |         |        
|Operating loss                                                       |                  |                          | (95,257  | )                  |         |                  | (11,353 | )        |        |          | (113,467 | )       |         |   | (22,333 | )      
|                                                                     |                  |                          |          |                    |         |                  |         |          |        |          |          |         |         |   |         |        
|Other income (expense):                                              |                  |                          |          |                    |         |                  |         |          |        |          |          |         |         |   |         |        
|                                                                    
|                                                                    
|                                                                    
|                                                                    
|Interest income                                                      |                  |                          | 4,940    |                    |         |                  | 9,363   |          |        |          | 15,019   |         |         |   | 12,815  |        
|                                                                    
|                                                                    
|                                                                    
|                                                                    
|Interest expense                                                     |                  |                          | (53,362  | )                  |         |                  | (35,595 | )        |        |          | (101,731 | )       |         |   | (59,799 | )      
|                                                                    
|                                                                    
|                                                                    
|                                                                    
|Other income (expense)                                               |                  |                          | (42,458  | )                  |         |                  | (749    | )        |        |          | (49,468  | )       |         |   | (994    | )      
|                                                                     |                  |                          |          |                    |         |                  |         |          |        |          |          |         |         |   |         |        
|Total other income (expense)                                         |                  |                          | (90,880  | )                  |         |                  | (26,981 | )        |        |          | (136,180 | )       |         |   | (47,978 | )      
|                                                                     |                  |                          |          |                    |         |                  |         |          |        |          |          |         |         |   |         |        
|Loss before income taxes                                             |                  |                          | (186,137 | )                  |         |                  | (38,334 | )        |        |          | (249,647 | )       |         |   | (70,311 | )      
|                                                                    
|                                                                    
|                                                                    
|                                                                    
|Income tax expense                                                   |                  |                          | 896      |                    |         |                  | 100     |          |        |          | 1,284    |         |         |   | 618     |        
|                                                                     |                  |                          |          |                    |         |                  |         |          |        |          |          |         |         |   |         |        
|Net loss                                                             |                  | $                        | (187,033 | )                  |         | $                | (38,434 | )        |        | $        | 250,931  | )       |         | $ | (70,929 | )      
|                                                                     |                  |                          |          |                    |         |                  |         |          |        |          |          |         |         |   |         |        
|Net loss per common share
(basic and diluted)                        |                  | $                        | (1.24    | )                  |         | $                | (0.31   | )        |        | $        | (1.69    | )       |         | $ | (0.68   | )      
|                                                                     |                  |                          |          |                    |         |                  |         |          |        |          |          |         |         |   |         |        
|Weighted average common
shares outstanding (basic and diluted)       |                  |                          | 150,446  |                    |         |                  | 123,329 |          |        |          | 148,163  |         |         |   | 104,303 |        
|                                                                     |                  |                          |          |                    |         |                  |         |          |        |          |          |         |         |   |         |        

See accompanying notes.

4



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##### Table of Contents



SpectraSite Holdings, Inc. and Subsidiaries




UNAUDITED CONDENSED
CONSOLIDATED STATEMENTS OF CASH FLOWS


Six Months Ended June 30, 2001 and 2000
(dollars in thousands)


|                                                                            |                                                                   |                                                         |                                                      |        |                  |          |          |        |         |          |  
|--------------------------------------------------------------------------- | ----------------------------------------------------------------- | ------------------------------------------------------- | ---------------------------------------------------- | ------ | ---------------- | -------- | -------- | ------ | ------- | -------- | -
|                                                                            |                                                                   |                                                         |                                                      |        | Six Months Ended
|                                                                            |                                                                   |                                                         |                                                      |        |                 
|                                                                            |                                                                   |                                                         |                                                      |        | June 30,         |          | June 30,
|                                                                            |                                                                   |                                                         |                                                      |        | 2001             |          | 2000    
|                                                                            |                                                                   |                                                         |                                                      |        |                  |          |         
|Operating activities                                                        |                                                                   |                                                         |                                                      |        |                  |          |          |       
|                                                                           
|                                                                           
|                                                                           
|                                                                           
|Net loss                                                                    |                                                                   | $                                                       | (250,931                                             | )      |                  | $        | (70,929  | )     
|                                                                           
|                                                                           
|                                                                           
|                                                                           
|Adjustments to reconcile net loss to net cash
used in operating activities: |                                                                   |                                                         |                                                      |        |                  |          |          |       
|                                                                           
|                                                                           
|                                                                           
|                                                                           
|                                                                            | Depreciation                                                      |                                                         |                                                      | 60,014 |                  |          |          | 28,453 |        
|                                                                           
|                                                                           
|                                                                           
|                                                                           
|                                                                            | Amortization of goodwill and other intangibles                    |                                                         |                                                      | 19,244 |                  |          |          | 14,209 |        
|                                                                           
|                                                                           
|                                                                           
|                                                                           
|                                                                            | Amortization of debt issuance costs                               |                                                         |                                                      | 5,107  |                  |          |          | 2,446  |        
|                                                                           
|                                                                           
|                                                                           
|                                                                           
|                                                                            | Amortization of senior discount notes                             |                                                         |                                                      | 54,409 |                  |          |          | 40,695 |        
|                                                                           
|                                                                           
|                                                                           
|                                                                           
|                                                                            | Non-cash compensation charges                                     |                                                         |                                                      | 1,063  |                  |          |          | 729    |        
|                                                                           
|                                                                           
|                                                                           
|                                                                           
|                                                                            | Write-off of goodwill                                             |                                                         |                                                      | 44,476 |                  |          |          |       |        
|                                                                           
|                                                                           
|                                                                           
|                                                                           
|                                                                            | Loss on disposal of assets                                        |                                                         |                                                      | 25,693 |                  |          |          |       |        
|                                                                           
|                                                                           
|                                                                           
|                                                                           
|                                                                            | Write-off of loan to and investment in affiliates                 |                                                         |                                                      | 27,500 |                  |          |          |       |        
|                                                                           
|                                                                           
|                                                                           
|                                                                           
|                                                                            | Equity in net loss of affiliates                                  |                                                         |                                                      | 19,248 |                  |          |          | 1,141  |        
|                                                                           
|                                                                           
|                                                                           
|                                                                           
|                                                                            | Changes in operating assets and liabilities,
net of acquisitions: |                                                         |                                                      |        |                  |          |          |        |        
|                                                                           
|                                                                           
|                                                                           
|                                                                           
|                                                                            |                                                                   | Accounts receivable                                     |                                                      |        | 3,705            |          |          |        | (22,457 | )       
|                                                                           
|                                                                           
|                                                                           
|                                                                           
|                                                                            |                                                                   | Costs and estimated earnings in excess of billings, net |                                                      |        | (11,211          | )        |          |        | (7,772  | )       
|                                                                           
|                                                                           
|                                                                           
|                                                                           
|                                                                            |                                                                   | Inventories                                             |                                                      |        | (7,421           | )        |          |        | (413    | )       
|                                                                           
|                                                                           
|                                                                           
|                                                                           
|                                                                            |                                                                   | Prepaid expenses and other                              |                                                      |        | (5,993           | )        |          |        | (2,570  | )       
|                                                                           
|                                                                           
|                                                                           
|                                                                           
|                                                                            |                                                                   | Accounts payable                                        |                                                      |        | 7,033            |          |          |        | (6,276  | )       
|                                                                           
|                                                                           
|                                                                           
|                                                                           
|                                                                            |                                                                   | Other current liabilities                               |                                                      |        | 7,431            |          |          |        | 7,880   |         
|                                                                            |                                                                   |                                                         |                                                      |        |                  |          |          |       
|                                                                            |                                                                   |                                                         | Net cash used in operating activities                |        |                  | (633     | )        |        |         | (14,864  | )
|                                                                            |                                                                   |                                                         |                                                      |        |                  |          |          |       
|Investing activities                                                        |                                                                   |                                                         |                                                      |        |                  |          |          |       
|                                                                           
|                                                                           
|                                                                           
|                                                                           
|Purchases of property and equipment and intangibles                         |                                                                   |                                                         | (598,748                                             | )      |                  |          | (177,671 | )     
|                                                                           
|                                                                           
|                                                                           
|                                                                           
|Refunds of deposits (deposits on) asset purchases                           |                                                                   |                                                         | 6,847                                                |        |                  |          | (23,000  | )     
|                                                                           
|                                                                           
|                                                                           
|                                                                           
|Investments in affiliates                                                   |                                                                   |                                                         | (6,626                                               | )      |                  |          | (197,453 | )     
|                                                                           
|                                                                           
|                                                                           
|                                                                           
|Loans to affiliates                                                         |                                                                   |                                                         | (26,150                                              | )      |                  |          | (2,025   | )     
|                                                                           
|                                                                           
|                                                                           
|                                                                           
|Acquisitions, net of cash acquired                                          |                                                                   |                                                         | (4,773                                               | )      |                  |          | (197,231 | )     
|                                                                            |                                                                   |                                                         |                                                      |        |                  |          |          |       
|                                                                            |                                                                   |                                                         | Net cash used in investing activities                |        |                  | (629,450 | )        |        |         | (597,380 | )
|                                                                            |                                                                   |                                                         |                                                      |        |                  |          |          |       
|Financing activities                                                        |                                                                   |                                                         |                                                      |        |                  |          |          |       
|                                                                           
|                                                                           
|                                                                           
|                                                                           
|Proceeds from issuance of common stock                                      |                                                                   |                                                         | 4,082                                                |        |                  |          | 446,006  |       
|                                                                           
|                                                                           
|                                                                           
|                                                                           
|Stock issuance costs                                                        |                                                                   |                                                         | (434                                                 | )      |                  |          | (24,589  | )     
|                                                                           
|                                                                           
|                                                                           
|                                                                           
|Proceeds from issuance of long-term debt                                    |                                                                   |                                                         | 300,000                                              |        |                  |          |         |       
|                                                                           
|                                                                           
|                                                                           
|                                                                           
|Proceeds from issuance of senior notes                                      |                                                                   |                                                         |                                                     |        |                  |          | 200,000  |       
|                                                                           
|                                                                           
|                                                                           
|                                                                           
|Proceeds from issuance of senior discount notes                             |                                                                   |                                                         |                                                     |        |                  |          | 299,974  |       
|                                                                           
|                                                                           
|                                                                           
|                                                                           
|Repayments of debt                                                          |                                                                   |                                                         | (220                                                 | )      |                  |          | (781     | )     
|                                                                           
|                                                                           
|                                                                           
|                                                                           
|Debt issuance costs                                                         |                                                                   |                                                         | (19,893                                              | )      |                  |          | (15,938  | )     
|                                                                            |                                                                   |                                                         |                                                      |        |                  |          |          |       
|                                                                            |                                                                   |                                                         | Net cash provided by financing activities            |        |                  | 283,535  |          |        |         | 904,672  |  
|                                                                            |                                                                   |                                                         |                                                      |        |                  |          |          |       
|                                                                            |                                                                   |                                                         | Net increase (decrease) in cash and cash equivalents |        |                  | (346,548 | )        |        |         | 292,428  |  
|                                                                           
|                                                                           
|                                                                           
|                                                                           
|Cash and cash equivalents at beginning of period                            |                                                                   |                                                         | 552,653                                              |        |                  |          | 37,778   |       
|                                                                            |                                                                   |                                                         |                                                      |        |                  |          |          |       
|                                                                           
|                                                                           
|                                                                           
|                                                                           
|Cash and cash equivalents at end of period                                  |                                                                   | $                                                       | 206,105                                              |        |                  | $        | 330,206  |       
|                                                                            |                                                                   |                                                         |                                                      |        |                  |          |          |       
|Supplemental disclosures of cash flow information:                          |                                                                   |                                                         |                                                      |        |                  |          |          |       
|                                                                           
|                                                                           
|                                                                           
|                                                                           
|Cash paid during the period for interest                                    |                                                                   | $                                                       | 41,964                                               |        |                  | $        | 11,983   |       
|                                                                            |                                                                   |                                                         |                                                      |        |                  |          |          |       
|Cash paid during the period for income taxes                                |                                                                   | $                                                       | 598                                                  |        |                  | $        | 369      |       
|                                                                            |                                                                   |                                                         |                                                      |        |                  |          |          |       
|Supplemental disclosures of noncash investing and financing activities:     |                                                                   |                                                         |                                                      |        |                  |          |          |       
|                                                                           
|                                                                           
|                                                                           
|                                                                           
|Common stock issued for acquisitions and property and equipment             |                                                                   | $                                                       | 118,580                                              |        |                  | $        | 71,667   |       
|                                                                            |                                                                   |                                                         |                                                      |        |                  |          |          |       
|                                                                           
|                                                                           
|                                                                           
|                                                                           
|Property and equipment acquired under capital lease                         |                                                                   | $                                                       | 16,103                                               |        |                  | $        |         |       
|                                                                            |                                                                   |                                                         |                                                      |        |                  |          |          |       

See accompanying notes.

5



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##### Table of Contents



SpectraSite Holdings, Inc. and Subsidiaries




NOTES TO THE UNAUDITED
CONDENSED FINANCIAL STATEMENTS


1. Description of Business and Significant Accounting Policies

SpectraSite Holdings, Inc. (SpectraSite) and its wholly owned
subsidiaries (collectively referred to as the Company) are principally
engaged in providing services to companies operating in the telecommunications
industry, including leasing antenna sites on multi-tenant towers, network
design, tower construction and antenna installation throughout the United
States and Canada.

Principles of Consolidation

The accompanying consolidated financial statements include the accounts of
SpectraSite and its subsidiaries. All significant intercompany transactions
and balances have been eliminated in consolidation.

Use of Estimates

The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the amounts reported in the unaudited condensed
consolidated financial statements and accompanying notes. Actual results could
differ from those estimates.

Revenue Recognition

Site leasing revenues are recognized when earned. Fixed escalation
clauses present in the lease agreements with the Companys customers are
recognized on a straight-line basis over the term of the lease. Network service
revenues from site selection, construction and construction management
activities are derived under service contracts with customers which provide for
billing on a time and materials or fixed price basis. Revenues are recognized
as services are performed with respect to time and materials contracts.
Revenues are recognized using the percentage-of-completion method for fixed
price contracts, measured by the percentage of contract costs incurred to date
compared to estimated total contract costs. Costs and estimated earnings in
excess of billings on uncompleted contracts represent revenues recognized in
excess of amounts billed. Billings in excess of costs and estimated earnings
on uncompleted contracts represent billings in excess of revenues recognized.
Provisions for estimated losses on uncompleted contracts are made in the period
in which such losses are determined.

Significant Customers

In the three and six months ended June 30, 2001, one customer, which is a
significant shareholder of the Company, accounted for 19% and 18% of revenues,
respectively. In the three and six months ended June 30, 2000, the same
customer accounted for 27% and 26% of revenues, respectively.

Non-recurring charges

In May 2001, the Company announced that it would consolidate its rooftop
management operations from Philadelphia, Pennsylvania into its corporate
headquarters in Cary, North Carolina. As a result, the Company recorded
non-recurring charges of $35.8 million of which $34.4 million related to the
write-off of goodwill, $0.3 million related to the write-down of assets and
$1.1 million related to the costs of employee severance and other costs related
to the consolidation of these operations.

In June 2001, the Company announced that it would divest its operations in
Mexico. As a result, the Company recorded non-recurring charges of $32.2
million of which $10.7 million related to the write-off of goodwill, $17.6
million related to the write-down of assets and $3.9 million related to the
costs of employee severance and other costs related to the divestiture. Also in
June 2001, the Company announced that it would close operations from the
purchase of Vertical
Properties. As a result , the Company recorded non-recurring charges of
$4.3 million of which $4.2 million was related to the write-off of goodwill and
$0.1 million was related to the costs of employee severance and other costs
related to the closing.

6



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##### Table of Contents



SpectraSite Holdings, Inc. and SubsidiariesNOTES TO THE UNAUDITED CONDENSED FINANCIAL STATEMENTS

Income Taxes

The Company provides for income taxes at the end of each interim period
using the liability method based on the estimated effective tax rate for the
full fiscal year for each tax reporting entity. Any cumulative adjustments to
the Companys estimate are recorded in the interim period in which a change in
the estimated annual effective rate is determined.

Earnings Per Share

Basic and diluted earnings per share are calculated in accordance with
Statement of Financial Accounting Standards No. 128 Earnings per Share. The
Company has potential common stock equivalents related to its convertible
notes, warrants and outstanding stock options. These potential common stock
equivalents were not included in diluted earnings per share because the effect
would have been antidilutive. Accordingly, basic and diluted net loss per share
are the same for all periods presented.

Reclassifications

Certain reclassifications have been made to the 2000 condensed
consolidated financial statements to conform to the 2001 presentation. These
reclassifications had no effect on previously reported net loss or
shareholders equity.

Unaudited Interim Financial Statements

The accompanying unaudited condensed consolidated financial statements
have been prepared in accordance with generally accepted accounting principles
for interim financial reporting and in accordance with the instructions for
Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include
all of the information and disclosures normally required by generally accepted
accounting principles for complete financial statements or those normally
reflected in the Companys Annual Report on Form 10-K. The financial
information included herein reflects all adjustments (consisting of normal
recurring adjustments) which are, in the opinion of management, necessary for a
fair presentation of results for interim periods. Results of interim periods
are not necessarily indicative of the results to be expected for a full year.

Impact of Recently Issued Accounting Standards

On June 29, 2001, the Financial Accounting Standards Board unanimously
approved the issuance of Statements of Financial Accounting Standards No. 141,
Business Combinations, and No. 142, Goodwill and Other Intangible Assets. SFAS
141 eliminates the pooling-of-interests method of accounting for business
combinations except for qualifying business combinations that were initiated
prior to July 1, 2001. SFAS 141 also includes new criteria to recognize
intangible assets separately from goodwill. The requirements of SFAS 141 are
effective for any business combination accounted for by the purchase method
that is completed after June 30, 2001. Under SFAS 142, goodwill and intangible
assets with indefinite lives are no longer amortized but are reviewed annually,
or more frequently if impairment indicators arise, for impairment. Separable
intangible assets that are not deemed to have an indefinite life will continue
to be amortized over their useful lives. The amortization provisions of SFAS
142 requiring nonamortization of goodwill and indefinite lived intangible
assets apply to goodwill and indefinite lived intangible assets acquired after
June 30, 2001. With respect to goodwill and intangible assets acquired prior to
July 1, 2001, the Company is required to adopt SFAS 142 in the fiscal year
beginning January 1, 2002.

7



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##### Table of Contents



SpectraSite Holdings, Inc. and SubsidiariesNOTES TO THE UNAUDITED CONDENSED FINANCIAL STATEMENTS

2. Property and Equipment

Property and equipment consists of the following (in thousands):

|                              |  |          |           |              |  |   |           |  
|----------------------------- |  | -------- | --------- | ------------ |  | - | --------- | -
|                              |  | June 30, |           | December 31,
|                              |  | 2001     |           | 2000        
|                              |  |          |           |             
|Towers                        |  | $        | 1,953,481 |              |  | $ | 1,344,627 |  
|                             
|                             
|                             
|                             
|Equipment                     |  |          | 33,124    |              |  |   | 23,295    |  
|                             
|                             
|                             
|                             
|Land                          |  |          | 16,352    |              |  |   | 15,468    |  
|                             
|                             
|                             
|                             
|Buildings                     |  |          | 35,410    |              |  |   | 17,427    |  
|                             
|                             
|                             
|                             
|Other                         |  |          | 39,496    |              |  |   | 29,847    |  
|                              |  |          |           |              |  |   |           |  
|                              |  |          | 2,077,863 |              |  |   | 1,430,664 |  
|                             
|                             
|                             
|                             
|Less accumulated depreciation |  |          | (157,550  | )            |  |   | (98,205   | )
|                              |  |          |           |              |  |   |           |  
|                              |  |          | 1,920,313 |              |  |   | 1,332,459 |  
|                             
|                             
|                             
|                             
|Construction in progress      |  |          | 285,259   |              |  |   | 207,878   |  
|                              |  |          |           |              |  |   |           |  
|Property and equipment, net   |  | $        | 2,205,572 |              |  | $ | 1,540,337 |  
|                              |  |          |           |              |  |   |           |  

3. Acquisition Activities

During the six months ended June 30, 2001, the Company consummated
transactions involving the acquisition of various communications sites and a
service provider for an aggregate purchase price of approximately $513.3
million, including the issuance of approximately 5.2 million shares of common
stock valued at $118.6 million. The principal transactions were as follows:

AirTouch transaction On February 16, 2000, the Company entered into an
agreement with AirTouch Communications (now Verizon Wireless) and several of
its affiliates, under which it agreed to lease or sublease approximately 430
communications towers located throughout southern California for $155.0
million, subject to adjustment. As partial security for obligations under the
agreement to sublease, the Company deposited $23.0 million into escrow. Under
the terms of the agreement, the Company will manage, maintain and lease the
available space on the AirTouch towers covered by the agreement. AirTouch will
pay a monthly fee per site for its cellular, microwave and paging facilities.
The Company also has the right to lease available tower space to co-location
tenants in specified situations. In addition, the Company entered into a
three-year exclusive build-to-suit agreement with AirTouch in southern
California. Under the terms of the build-to-suit agreement, the Company will
develop and construct locations for wireless communications towers on real
property designated by AirTouch.

The AirTouch transaction closed in stages with the initial closing occurring on
August 15, 2000 and the final closing under the original agreement occurring on
February 15, 2001. At each respective closing, the Company paid for the towers
included in that closing according to a formula contained in the master
sublease. During 2000, the Company subleased 233 towers for aggregate cash
consideration of $83.9 million, including $12.5 million released from the
deposit escrow. The final closing of 69 towers occurred on February 15, 2001
for aggregate cash consideration of $24.8 million, including $3.7 million
released from the deposit escrow. The leases for the remaining 128 towers
contemplated in the original agreement were not closed. As a result, the
remaining $6.8 million escrow deposit was returned to the Company on the date
of the final closing. In March 2001, the Company agreed to amend the agreement
with AirTouch and extend the opportunity to sublease the remaining 128 towers
through the second quarter of 2001. On June 29, 2001, the Company subleased 6
additional towers for aggregate consideration of $2.0 million.

SBC transaction On August 25, 2000, the Company entered into an
agreement to acquire leasehold and sub-leasehold interests in approximately
3,900 wireless communications towers from affiliates of SBC Communications in
exchange for $982.7 million in cash and approximately 14.3 million shares of
common stock, subject to adjustment, valued at $325.0 million. The Company will
manage, maintain and lease available space on the SBC towers and will have the
right to co-locate tenants on the towers. SBC is an anchor tenant on all of the
towers and will pay a monthly fee per tower of $1,400, subject to an annual
adjustment. In addition, the Company entered into a five-year exclusive
build-to-suit agreement with SBC under which it will develop and construct
substantially all of SBCs new towers during the term of the agreement. The SBC
transaction will close in stages. The initial closing occurred on December 14,
2000 and involved 739 towers, for which the Company paid $175.0 million in cash
and issued 2.5 million shares of common stock valued at $57.9 million. In the
six months

8



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##### Table of Contents



SpectraSite Holdings, Inc. and SubsidiariesNOTES TO THE UNAUDITED CONDENSED FINANCIAL STATEMENTS

ended June 30, 2001, the Company subleased an additional 1,399
towers, for which the Company paid $358.5 million in cash and issued 5.2
million shares of common stock.

4. Financing Transactions

Credit Facility

In connection with the acquisition of communications towers from Nextel
Communications, Inc. in April 1999, SpectraSite Communications, Inc.
(Communications), a wholly-owned subsidiary of SpectraSite, entered into a
$500.0 million credit facility. In February 2001, Communications amended and
restated its credit facility to, among other things, provide for an aggregate
borrowing capacity of up to $1.3 billion, subject to certain conditions. The
amended and restated credit facility consists of a $350.0 million revolving
credit facility of which $50.0 million may be drawn, subject to the
satisfaction of certain financial covenants, at any time prior to the earlier
of February 22, 2002 or the date on which at least 50% of the multiple draw
term loan has been funded, and, after that date, the entire $350.0 million may
be drawn, subject to the satisfaction of certain financial covenants, at any
time prior September 30, 2003 of which the amount drawn must be repaid in
quarterly installments beginning on September 30, 2003 and ending on June 30,
2007; a $500.0 million multiple draw term loan that may be drawn, subject to
the satisfaction of certain financial covenants, at any time through August 22,
2002, of which the amount drawn must be repaid in quarterly installments
beginning on September 30, 2003 and ending on June 30, 2007; and a $450.0
million term loan that was drawn in full in February 2001 which will, from
September 30, 2003 through June 30, 2007, amortize at a rate of .25% per
quarter and be payable in quarterly installments and, from July 1, 2007 through
December 31, 2007, amortize at a rate of 48% per quarter and be payable on
September 30, 2007 and December 31, 2007. Communications has $500.0 million
outstanding under the credit facility at June 30, 2001.

The revolving credit loans and the multiple draw term loans will bear
interest, at Communications option, at either Canadian Imperial Bank of
Commerces base rate plus an initial applicable margin of 1.5% per annum, which
margin may, after a period of time, decrease based on a leverage ratio, or the
Eurodollar rate plus an initial applicable margin of 2.75% per annum, which
margin may, after a period of time, decrease based on a leverage ratio.

The term loan bears interest, at Communications option, at either
Canadian Imperial Bank of Commerces base rate plus 2.25% per annum, which
margin may, after a period of time, decrease based on a leverage ratio, or the
Eurodollar rate plus 3.50% per annum, which margin may, after a period of time,
decrease based on a leverage ratio.

Communications will be required to pay a commitment fee of between 1.375%
and 0.500% per annum in respect of the undrawn portions of the multiple draw
term loan and the revolving credit facility, depending on the respective
undrawn amounts. Communications may be required to prepay the amended and
restated credit facility in part upon the occurrence of certain events, such as
a sale of assets, the incurrence of certain additional indebtedness, the
termination of the SBC transaction or the generation of excess cashflow.

SpectraSite and each of Communications domestic subsidiaries have
guaranteed the obligations under the amended and restated credit facility. The
credit facility is further secured by substantially all the tangible and
intangible assets of Communications and its domestic subsidiaries and a pledge
of all of the capital stock of Communications and its domestic subsidiaries and
66% of the capital stock of Communications foreign subsidiaries.

The amended and restated credit facility contains a number of covenants
that, among other things, restrict Communications ability to incur additional
indebtedness; create liens on assets; make investments or acquisitions or
engage in mergers or consolidations; dispose of assets; enter into new lines of
business; engage in certain transactions with affiliates; and pay dividends or
make capital distributions. Communications, however, is permitted to pay
dividends for the purpose of paying interest on the senior notes, senior
convertible notes and senior discount notes so long as no default under the
credit facility then exists or would exist after giving effect to such payment.
In addition, the amended and restated credit facility requires compliance with
certain financial covenants, including a requirement that Communications and
its subsidiaries, on a consolidated basis, maintain a maximum ratio of total
debt to annualized EBITDA, a minimum interest coverage ratio and a minimum
fixed charge coverage ratio.

9



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##### Table of Contents



SpectraSite Holdings, Inc. and SubsidiariesNOTES TO THE UNAUDITED CONDENSED FINANCIAL STATEMENTS

Capital Lease

In February 2001, the Company entered into a capital lease for a building
adjacent to its corporate headquarters. In addition, the Company enters into
various capital leases for vehicles and equipment. At June 30, 2001, the
current portion of the capital lease obligation of $2.8 million is included in
accrued and other current liabilities. The long-term portion of the capital
lease obligation of $13.4 million is included in other long-term liabilities.

5. Business Segments

The Company operates in two business segments, site leasing and network
services. Prior period information has been restated to reflect the current
business segments. The site leasing segment provides for leasing and subleasing
of antenna sites on multi-tenant towers for a diverse range of wireless
communication services, including personal communication services, paging,
cellular and microwave. The network services segment offers a broad range of
network development services, including network design, tower construction and
antenna installation.

In evaluating financial performance, management focuses on operating
profit (loss), excluding depreciation and amortization and restructuring
charges. This measure of operating profit (loss) is also before interest
income, interest expense, other income (expense) and income taxes. All reported
segment revenues are generated from external customers as intersegment revenues
are not significant.

Summarized financial information concerning the reportable segments as of
and for the three and six months ended June 30, 2001 and 2000 is shown in the
following table. The Other column represents amounts excluded from specific
segments, such as income taxes, corporate general and administrative expenses,
depreciation and amortization, restructuring and other non-recurring charges
and interest. In addition, Other also includes corporate assets such as cash
and cash equivalents, tangible and intangible assets and income tax accounts
which have not been allocated to a specific segment.

|                                  |                |   |           |  |          |  |       |  |       |   |         |  |  |   |           |   |  |   |           |   | 
|--------------------------------- | -------------- | - | --------- |  | -------- |  | ----- |  | ----- | - | ------- |  |  | - | --------- | - |  | - | --------- | - | 
|                                  |                |   | Site      |  | Network  |  |       |  |       |   |         |  | 
|                                  |                |   | Leasing   |  | Services |  | Other |  | Total
|                                  |                |   |           |  |          |  |       |  |      
|Three months ended June 30,       | (in
thousands) |   |           |  |          |  |       |  |       |   |         |  |  |   |           |   |  |   |           |   | 
|                                  |                |   |           |  |          |  |       |  |       |   |         |  |  |   |           |   |  |   |           |  
|                                  | 2001           |   |           |  |          |  |       |  |       |   |         |  |  |   |           |   |  |   |           |   | 
|                                 
|                                 
|                                 
|                                 
|Revenues                          |                | $ | 53,001    |  |          |  |       |  |       | $ | 58,901  |  |  | $ |          |   |  | $ | 111,902   |  
|                                 
|                                 
|                                 
|                                 
|Income (loss) before income taxes |                |   | 27,033    |  |          |  |       |  |       |   | 8,198   |  |  |   | (221,368  | ) |  |   | (186,137  | )
|                                 
|                                 
|                                 
|                                 
|Assets                            |                |   | 2,221,712 |  |          |  |       |  |       |   | 155,999 |  |  |   | 913,376   |   |  |   | 3,291,087 |  
|                                 
|                                 
|                                 
|                                 
|                                  | 2000           |   |           |  |          |  |       |  |       |   |         |  |  |   |           |   |  |   |           |   | 
|                                 
|                                 
|                                 
|                                 
|Revenues                          |                | $ | 25,662    |  |          |  |       |  |       | $ | 52,121  |  |  | $ |          |   |  | $ | 77,783    |  
|                                 
|                                 
|                                 
|                                 
|Income (loss) before income taxes |                |   | 13,396    |  |          |  |       |  |       |   | 5,486   |  |  |   | (57,121   | ) |  |   | (38,334   | )
|                                 
|                                 
|                                 
|                                 
|Assets                            |                |   | 945,359   |  |          |  |       |  |       |   | 94,530  |  |  |   | 1,189,739 |   |  |   | 2,229,628 |  

|                                  |                |   |           |  |          |  |       |  |       |   |         |  |  |   |           |   |  |   |           |   | 
|--------------------------------- | -------------- | - | --------- |  | -------- |  | ----- |  | ----- | - | ------- |  |  | - | --------- | - |  | - | --------- | - | 
|                                  |                |   | Site      |  | Network  |  |       |  |       |   |         |  | 
|                                  |                |   | Leasing   |  | Services |  | Other |  | Total
|                                  |                |   |           |  |          |  |       |  |      
|Six months ended June 30,         | (in
thousands) |   |           |  |          |  |       |  |       |   |         |  |  |   |           |   |  |   |           |   | 
|                                  |                |   |           |  |          |  |       |  |       |   |         |  |  |   |           |   |  |   |           |  
|                                  | 2001           |   |           |  |          |  |       |  |       |   |         |  |  |   |           |   |  |   |           |   | 
|                                 
|                                 
|                                 
|                                 
|Revenues                          |                | $ | 99,389    |  |          |  |       |  |       | $ | 119,776 |  |  | $ |          |   |  | $ | 219,165   |  
|                                 
|                                 
|                                 
|                                 
|Income (loss) before income taxes |                |   | 52,436    |  |          |  |       |  |       |   | 18,640  |  |  |   | (320,723  | ) |  |   | (249,647  | )
|                                 
|                                 
|                                 
|                                 
|Assets                            |                |   | 2,221,712 |  |          |  |       |  |       |   | 155,999 |  |  |   | 913,376   |   |  |   | 3,291,087 |  
|                                 
|                                 
|                                 
|                                 
|                                  | 2000           |   |           |  |          |  |       |  |       |   |         |  |  |   |           |   |  |   |           |   | 
|                                 
|                                 
|                                 
|                                 
|Revenues                          |                | $ | 45,946    |  |          |  |       |  |       | $ | 107,074 |  |  | $ |          |   |  | $ | 153,020   |  
|                                 
|                                 
|                                 
|                                 
|Income (loss) before income taxes |                |   | 22,945    |  |          |  |       |  |       |   | 11,378  |  |  |   | (104,634  | ) |  |   | (70,311   | )
|                                 
|                                 
|                                 
|                                 
|Assets                            |                |   | 945,359   |  |          |  |       |  |       |   | 94,530  |  |  |   | 1,189,739 |   |  |   | 2,229,628 |  

10



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ITEM 2 MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS

General

This discussion contains forward-looking statements, including statements
concerning possible or assumed future results of operations. Our
representatives may also make oral forward-looking statements from time to
time. You should understand that the factors described below, in addition to
those discussed elsewhere, could affect our future results and could cause
those results to differ materially from those expressed in such forward-looking
statements. These factors include:

     substantial capital requirements and leverage principally as a consequence
of ongoing acquisitions and construction activities;

     dependence on demand for wireless communications

     the success of our tower construction program

     material adverse changes in economic conditions in the markets we
serve;

     future regulatory actions and conditions in our operating areas;

     competition from others in the communications tower industry;

     the integration of our operations with those of businesses we have
acquired or may acquire in the future and the realization
of the
expected benefits; and

     other risks and uncertainties as may be detailed from time to time in
our public announcements and SEC filings.

We are one of the largest wireless tower operators in the United States
and a leading provider of outsourced network services to the wireless
communications and broadcast industries in the United States and Canada. Our
businesses include the ownership and leasing of antenna sites on towers,
managing rooftop and in-building telecommunications access on commercial real
estate, network planning and deployment and construction of towers and related
facilities. As of June 30, 2001, we owned or operated 6,975 towers as compared
to 5,030 towers at December 31, 2000.

Results of Operations

Three months ended June 30, 2001 compared to the results for the three months
ended June 30, 2000.

Consolidated revenues for the three months ended June 30, 2001 were $111.9
million, an increase of $34.1 million from the three months ended June 30,
2000. Revenues from site leasing increased to $53.0 million for the three
months ended June 30, 2001 from $25.7 million for the three months ended June
30, 2000, primarily as a result of revenues derived from towers acquired or
built from June 30, 2000 to June 30, 2001. We owned or operated 6,975
communications towers at June 30, 2001 compared to 3,474 communications towers
at June 30, 2000. The remaining factor contributing to the increase in revenue
from site leasing is incremental revenue in 2001 from new co-location tenants
on towers that were part of our portfolio on June 30, 2000.

Revenues from network services increased to $58.9 million for the three
months ended June 30, 2001 compared to $52.1 million in the three months ended
June 30, 2000, primarily as a result of revenue generated from acquisitions,
new construction offices and increased demand for existing services.

Costs of operations increased to $69.1 million for the three months ended
June 30, 2001 from $51.5 million for the three months ended June 30, 2000.
Costs of operations for site leasing as a percentage of site leasing revenues
increased to 41.8% for the three months ended June 30, 2001 from 40.4% for the
three months ended June 30, 2000 primarily due to additions of towers in 2001
that have fewer tenants per tower and higher costs as a percentage of site
leasing revenue than our
existing towers, offset by new collocation tenants added in 2001. As our site
leasing operations mature, additional tenants on a tower are expected to
generate decreases in costs of operations for site leasing as a percentage of
site leasing revenues and

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##### Table of Contents



increases in cash flow because a significant
proportion of tower operating costs are fixed and do not increase with
additional tenants. Costs of operations for network services as a percentage of
network services revenues increased to 79.7% for the three months ended June
30, 2001 from 79.0% for the three months ended June 30, 2000. This increase is
primarily due to costs associated with the opening of construction offices in
regions where there are clusters of SBC towers.

Selling, general and administrative expenses increased to $22.7 million
for the three months ended June 30, 2001 from $14.5 million for the three
months ended June 30, 2000. The increase is a result of expenses related to
additional corporate overhead and field operations to manage and operate the
growth in our ongoing activities. Selling, general and administrative expenses
as a percentage of revenues increased to 20.3% for the three months ended June
30, 2001 from 18.7% for the three months ended June 30, 2000 primarily as a
result of expenses incurred in the Companys Mexican operations which the
Company plans to divest.

Depreciation and amortization expense increased to $42.5 million for the
three months ended June 30, 2001 from $22.7 million for the three months ended
June 30, 2000 primarily as a result of the increased depreciation from the
towers we have acquired or constructed and amortization of goodwill related to
acquisitions.

Non-recurring charges for the three months ended June 30, 2001 were $72.3
million, consisting of $35.8 million in non-recurring charges relating to the
decision to consolidate our rooftop management operations from Philadelphia,
Pennsylvania to Cary, North Carolina, $32.2 million in non-recurring charges
relating to the decision to divest operations in Mexico, and $4.3 million
relating to the decision to close operations from the purchase of Vertical
Properties. Of the $35.8 million relating to the consolidation of the rooftop
management operations, $34.4 million related to the write-off of goodwill, $0.3
million related to the write down of assets and $1.1 million related to the
costs of employee severance and other costs related to the consolidation of
these operations. Of the $32.2 million relating to the divestiture of
operations in Mexico, $10.7 million related to the write-off of goodwill, $17.6
related to the write-down of assets in Mexico and $3.9 million was related to
the costs of employee severance and other costs related to the divestiture. Of
the $4.3 million relating to Vertical Properties, $4.2 million was related to
the write-off of goodwill and $0.1 million was related to the costs of employee
severance and other costs related to the closing.

Net interest expense increased to $48.4 million during the three months
ended June 30, 2001 from $26.2 million for the three months ended June 30,
2000, reflecting additional interest expense due to the issuance of our 6.75%
senior convertible notes due 2010 in November 2000 and our 12.5% senior notes
due 2010 in December 2000, as well as $300 million in additional borrowings
under our credit facility in February 2001.

Other income (expense) was an expense of $42.5 million in the three months
ended June 30, 2001. Of this amount, $13.3 million related to losses from
investments in affiliates accounted for under the equity method, primarily the
investment in SpectraSite-Transco Communications, Ltd. and $20.0 million
related to the write-off of a loan to SpectraSite-Transco. In addition $7.5
million related to a write-off of the Companys investment in Evolution. Other
income (expense) was an expense of $0.7 million in the three months ended June
30, 2000 primarily due to a loss from our investment in SpectraSite-Transco.

Six Months ended June 30, 2001 compared to the results for the six months ended
June 30, 2000.

Consolidated revenues for the six months ended June 30, 2001 were $219.2
million, an increase of $66.1 million from the six months ended June 30, 2000.
Revenues from site leasing increased to $99.4 million for the six months ended
June 30, 2001 from $45.9 million for the six months ended June 30, 2000,
primarily as a result of revenues derived from towers acquired or built from
June 30, 2000 to June 30, 2001. We owned or operated 6,975 communications
towers at June 30, 2001 compared to 3,474 communications towers at June 30,
2000. The remaining factor contributing to the increase is incremental revenue
in 2001 from new co-location tenants on towers that were part of our portfolio
on June 30, 2000.

Revenues from network services increased to $119.8 million for the six
months ended June 30, 2001 compared to $107.1 million in the six months ended
June 30, 2000, primarily as a result of revenue generated from acquisitions,
new construction offices and increased demand for existing services.

Costs of operations increased to $136.1 million for the six months ended
June 30, 2001 from $101.8 million for the six months ended June 30, 2000. Costs
of operations for site leasing as a percentage of site leasing revenues
decreased to 40.5% for the six months ended June 30, 2001 from 42.6% for the six months
ended June 30, 2000 primarily due to revenues generated from the acquisition of
towers from Nextel and co-location revenues on those towers. As our site
leasing operations mature, additional tenants on a tower are expected to
generate decreases in costs of operations for site leasing as a percentage of
site

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leasing revenues and increases in cash flow because a significant
proportion of tower operating costs are fixed and do not increase with
additional tenants. Costs of operations for network services as a percentage of
network services revenues increased to 80.0% for the six months ended June 30,
2001 from 76.8% for the six months ended June 30, 2000. This increase is
primarily due to costs associated with the opening of construction offices in
regions where there are clusters of SBC towers and weather related costs.

Selling, general and administrative expenses increased to $43.9 million
for the six months ended June 30, 2001 from $30.2 million for the six months
ended June 30, 2000. The increase is a result of expenses related to additional
corporate overhead and field operations to manage and operate the growth in our
ongoing activities. Selling, general and administrative expenses as a
percentage of revenues increased to 20.0% for the six months ended June 30,
2001 from 19.7% for the six months ended June 30, 2000 primarily as a result of
expenses incurred in the Companys Mexican operations which the Company plans
to divest.

Depreciation and amortization expense increased to $79.3 million for the
six months ended June 30, 2001 from $42.7 million for the six months ended June
30, 2000 primarily as a result of the increased depreciation from the towers we
have acquired or constructed and amortization of goodwill related to
acquisitions.

Non-recurring charges for the six months ended June 30, 2001 were $72.3
million, consisting of $35.8 million in non-recurring charges relating to the
decision to consolidate our rooftop management operations from Philadelphia,
Pennsylvania to Cary, North Carolina, $32.2 million in non-recurring charges
relating to the decision to divest operations in Mexico, and $4.3 million
relating to the decision to close operations from the purchase of Vertical
Properties. Of the $35.8 million relating to the consolidation of the rooftop
management operations, $34.4 million related to the write-off of goodwill, $0.3
million related to the write-down of assets and $1.1 million was related to the
costs of employee severance and other costs related to the consolidation of
those operations. Of the $32.2 million relating to the divestiture of
operations in Mexico, $10.7 million related to the write-off of goodwill, $17.6
related to the write-down of assets in Mexico and $3.9 million was related to
the costs of employee severance and other costs related to the divestiture. Of
the $4.3 million relating to Vertical Properties, $4.2 million was related to
the write-off of goodwill and $0.1 million was related to the costs of employee
severance and other costs related to the closing.

Net interest expense increased to $86.7 million during the six months
ended June 30, 2001 from $47.0 million for the six months ended June 30, 2000,
reflecting additional interest expense due to the issuance of our 12.875%
senior discount notes due 2010 and 10.75% senior notes due 2010 in March 2000,
our 6.75% senior convertible notes due 2010 in November 2000 and our 12.5%
senior notes due 2010 in December 2000, as well as $300 million in additional
borrowings under our credit facility in February 2001.

Other income (expense) was an expense of $49.5 million in the six months
ended June 30, 2001. Of this amount, $19.2 million related to losses from
investments in affiliates accounted for under the equity method, primarily the
investment in SpectraSite-Transco Communications, Ltd. and $20.0 million
related to the write-off of a loan to SpectraSite-Transco. In addition, $7.5
million related to a write-off of the Companys investment in Evolution. Other
income (expense) was an expense of $1.0 million in the six months ended June
30, 2000 primarily due to a loss from our investment in SpectraSite-Transco.

Liquidity and Capital Resources

SpectraSite Holdings is a holding company whose only significant asset is
the outstanding capital stock of its subsidiaries, SpectraSite Communications
and SpectraSite International. Our only source of cash to pay interest on and
principal of our debt is distributions from SpectraSite Communications and
SpectraSite International. Prior to July 15, 2003, interest expense on the 12%
senior discount notes due 2008 will consist solely of non-cash accretion of an
original issue discount and the notes will not require annual cash interest
payments. After such time, the 12% senior discount notes due 2008 will have
accreted to approximately $225.2 million and will require semi-annual cash
interest payments of $13.5 million. These notes mature on July 15, 2008. The 11
1/4% senior discount notes due 2009 will not require cash interest payments
prior to October 15, 2004 and mature on April 15, 2009. On April 15, 2004, the
11 1/4% senior discount notes due 2009 will have
accreted to $586.8 million and will require semi-annual cash interest payments
of $33.0 million. The 12 7/8% senior discount notes due 2010 will not require
cash interest payments prior to October 15, 2005, and mature March 15, 2010. On
March 15, 2005, the 12 7/8% senior discount notes due 2010 will have accreted
to $559.8 million and will require semi-annual cash interest payments of $36.0
million. The 10 3/4% senior notes due 2010 require semi-annual cash interest
payments of $10.75 million and mature March 15, 2010. The 6 3/4% convertible
notes require semi-annual cash interest payments of $6.75 million and mature on
November 15, 2010. The 12 1/2% senior notes due 2010 require semi-annual cash
interest payments of $12.5 million and

13



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mature on November 15, 2010.
Furthermore, our credit facility provides for periodic principal and interest
payments.

We currently have $500.0 million outstanding, and $800.0 million are
available under our credit facility to fund new tower construction and
acquisition activity. The weighted average interest rate on outstanding
borrowings under our credit facility as of June 30, 2001 was 7.58%. The
facility also requires compliance with certain financial covenants. At June 30,
2001, we were in compliance with these covenants. In addition, our cash and
cash equivalents were $206.1 million at June 30, 2001.

Our ability to fund capital expenditures, make scheduled payments of
principal of, or to pay interest on, our debt obligations, and our ability to
refinance any such debt obligations, will depend on our future performance,
which, to a certain extent, is subject to general economic, financial,
competitive, legislative, regulatory and other factors that are beyond our
control. Our business strategy contemplates substantial capital expenditures,
primarily to fund the construction and acquisition of additional communications
towers. We believe that cash flow from operations, available cash on hand and
anticipated available borrowings under our credit facility will be sufficient
to fund capital expenditures for the foreseeable future. However, if we make
additional acquisitions or pursue other opportunities or if our estimates prove
inaccurate, we may seek additional sources of debt or equity or reduce the
scope of tower construction and acquisition activity. We cannot assure you that
we will generate sufficient cash flow from operations, or that future
borrowings or equity financing will be available, on terms acceptable to us, in
amounts sufficient to service our indebtedness and make anticipated capital
expenditures.

Cash Flows

For the six months ended June 30, 2001, cash flows used in operating
activities were $0.6 million compared to cash flows used in operating
activities of $14.9 million for the six months ended June 30, 2000. The change
is primarily attributable to an increase in earnings before interest, taxes,
depreciation, amortization and non-recurring charges.

For the six months ended June 30, 2001, cash flows used in investing activities
were $629.5 million compared to cash flows used in investing activities of
$597.4 million for the six months ended June 30, 2000. In the six months ended
June 30, 2001, SpectraSite invested $591.9 million to purchase property and
equipment, primarily related to the acquisition of communications towers. In
the six months ended June 30, 2000, SpectraSite invested $200.7 million to
purchase property and equipment and for deposits on future acquisitions,
primarily related to the acquisition of communications towers. In addition, we
used an aggregate of $197.2 million in connection with our acquisitions of
Lodestar, Telco, Apex and Vertical Properties and the acquisitions of
substantially all of the assets of International Towers and BCS Wireless. We
also invested $197.5 million in affiliates, primarily related to our joint
venture with Transco.

In the six months ended June 30, 2001, cash flows provided by financing
activities were $283.5 million as compared to $904.7 million in the six months
ended June 30, 2000. In the six months ended June 30, 2001, cash flows provided
by financing activities consisted primarily of $300.0 million of borrowings
under our amended credit facility partially offset by $19.9 million of debt
issuance costs. In the six months ended June 30, 2000, cash flows provided by
financing activities were attributable to the proceeds from the issuance of
common stock, the 11 1/4% discount notes due 2010 and the 10 3/4% senior
notes due 2010.

Acquisition Activities

During the six months ended June 30, 2001, we consummated transactions
involving the acquisition of various communications sites and a service
provider for an aggregate purchase price of $513.3 million, including the
issuance of approximately 5.2 million shares of common stock valued at $118.6
million. The principal transactions were as follows:

AirTouch transaction On February 16, 2000, we entered into an agreement
with AirTouch Communications (now
Verizon Wireless) and several of its affiliates, under which we agreed to
lease or sublease approximately 430 communications towers located throughout
southern California for $155.0 million, subject to adjustment. As partial
security for obligations under the agreement to sublease, we deposited $23.0
million into escrow. Under the terms of the agreement, we will manage, maintain
and lease the available space on the AirTouch towers covered by the agreement.
AirTouch will pay a monthly fee per site for its cellular, microwave and paging
facilities. We also have the right to lease available tower space to
co-location tenants in specified situations. In addition, we entered into a
three-year exclusive build-to-suit agreement with AirTouch in southern
California. Under the terms of the build-to-suit agreement, we will develop and
construct locations for wireless communications towers on real property
designated by AirTouch.

14



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##### Table of Contents



The AirTouch transaction closed in stages with the initial closing
occurring on August 15, 2000 and the final closing under the original agreement
occurring on February 15, 2001. At each respective closing, we paid for the
towers included in that closing according to a formula contained in the master
sublease. During 2000, we subleased 233 towers for aggregate cash consideration
of $83.9 million, including $12.5 million released from the deposit escrow. The
final closing of 69 towers occurred on February 15, 2001 for aggregate cash
consideration of $24.8 million, including $3.7 million released from the
deposit escrow. The leases for the remaining 128 towers contemplated in the
original agreement were not closed. As a result, the remaining $6.8 million
escrow deposit was returned to us. In March 2001, we agreed to amend the
agreement with AirTouch and extend the opportunity to sublease the remaining
128 towers through the second quarter of 2001. On June 29, 2001, we subleased 6
towers for aggregate consideration of $2.0 million.

SBC transaction On August 25, 2000, we entered into an agreement to
acquire leasehold and sub-leasehold interests in approximately 3,900 wireless
communications towers from affiliates of SBC Communications in exchange for
$982.7 million in cash and approximately 14.3 million shares of common stock,
subject to adjustment, valued at $325.0 million. We will manage, maintain and
lease available space on the SBC towers and will have the right to co-locate
tenants on the towers. SBC is an anchor tenant on all of the towers and will
pay a monthly fee per tower of $1,400, subject to an annual adjustment. In
addition, we entered into a five-year exclusive build-to-suit agreement with
SBC under which we will develop and construct substantially all of SBCs new
towers during the term of the agreement. The SBC transaction will close in
stages. The initial closing occurred on December 14, 2000 and involved 739
towers, for which we paid $175.0 million in cash and issued 2.5 million shares
of common stock. In the six months ended June 30, 2001, we subleased an
additional 1,399 towers, for which we paid $358.5 million in cash and issued
5.2 million shares of common stock valued at $118.6 million. In July 2001, we
subleased an additional 179 towers, for which we paid $45.5 million in cash and
issued 0.7 million shares of common stock valued at $15.0 million.

Recently Issued Accounting Standards

On June 29, 2001, the Financial Accounting Standards Board unanimously
approved the issuance of Statements of Financial Accounting Standards No. 141,
Business Combinations, and No. 142, Goodwill and Other Intangible Assets. SFAS
141 eliminates the pooling-of-interests method of accounting for business
combinations except for qualifying business combinations that were initiated
prior to July 1, 2001. SFAS 141 also includes new criteria to recognize
intangible assets separately from goodwill. The requirements of SFAS 141 are
effective for any business combination accounted for by the purchase method
that is completed after June 30, 2001. Under SFAS 142, goodwill and intangible
assets with indefinite lives are no longer amortized but are reviewed annually,
or more frequently if impairment indicators arise, for impairment. Separable
intangible assets that are not deemed to have an indefinite life will continue
to be amortized over their useful lives. The amortization provisions of SFAS
142 requiring nonamortization of goodwill and indefinite lived intangible
assets apply to goodwill and indefinite lived intangible assets acquired after
June 30, 2001. With respect to goodwill and intangible assets acquired prior to
July 1, 2001, we are required to adopt SFAS 142 in the fiscal year beginning
January 1, 2002.




ITEM 3 QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

We use financial instruments, including fixed and variable rate debt, to
finance our operations. The information below summarizes our market risks
associated with debt obligations outstanding as of June 30, 2001. The following
table presents principal cash flows and related weighted average interest rates
by fiscal year of maturity. Variable interest rate obligations under our credit
facility are not included in the table. We have no long-term variable interest
obligations other than borrowings under our credit facility.

|                       |                       |  |                        |   |      |  |      |   |      |  |      |   |            |  |       |   |  |  |   |   |  |  |   |           |   |  |   |           |  
|---------------------- | --------------------- |  | ---------------------- | - | ---- |  | ---- | - | ---- |  | ---- | - | ---------- |  | ----- | - |  |  | - | - |  |  | - | --------- | - |  | - | --------- | -
|                       |                       |  | Expected Maturity Date |   |      |  |     
|                       |                       |  |                        |   |      |  |     
|                       |                       |  | 2001                   |   | 2002 |  | 2003 |   | 2004 |  | 2005 |   | Thereafter |  | Total
|                       |                       |  |                        |   |      |  |      |   |      |  |      |   |            |  |      
|                       |                       |  | (dollars in thousands) |   |      |  |     
|Longterm obligations: |                       |  |                        |   |      |  |      |   |      |  |      |   |            |  |       |   |  |  |   |   |  |  |   |           |   |  |   |          
|                      
|                      
|                      
|                      
|                       | Fixed rate            |  | $                      |  |      |  | $    |  |      |  | $    |  |            |  | $     |  |  |  | $ |  |  |  | $ | 1,562,652 |   |  | $ | 1,562,652 |  
|                      
|                      
|                      
|                      
|                       | Average interest rate |  |                        |  |      |  |      |  |      |  |      |  |            |  |       |  |  |  |   |  |  |  |   | 11.22     | % |  |   | 11.22     | %

15



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##### Table of Contents






PART II  OTHER INFORMATION




ITEM 1. LEGAL PROCEEDINGS

None.




ITEM 2. CHANGES IN SECURITIES AND USE
OF PROCEEDS

In the second quarter of 2001, we issued 2,860,238 million shares of
unregistered common stock and paid approximately $196.6 million in cash to
affiliates of SBC Communications in exchange for leasehold and subleasehold
interests in an aggregate of 767 wireless communications towers. The issuance
of these securities was deemed to be exempt from registration under the
Securities Act of 1933, in reliance on Section 4(2) of the Securities Act, as a
transaction by an issuer not involving a public offering. SBC represented its
intention to acquire the securities for investment only and not with a view to
or for sale in connection with any distribution thereof and appropriate legends
were affixed to the instruments representing such securities. SBC had adequate
access to information about SpectraSite.




ITEM 3. DEFAULTS UPON SENIOR SECURITIES

None.




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

On May 22, 2001, we held our Annual Meeting of Stockholders in Durham, North
Carolina. Proxies were solicited regarding the election of our Board of
Directors. All ten nominees were nominated by management, and no solicitation
was made on behalf of any persons other than managements nominees. All ten
nominees were elected to our Board of Directors with the following votes:

|                    |  |                |             |           |  |            |           | 
|------------------- |  | -------------- | ----------- | --------- |  | ---------- | --------- | 
|                    |  |                |             |           |  | TOTAL VOTE
|                    |  |                |             |           |  | WITHHELD  
|                    |  | TOTAL VOTE FOR |             | FROM EACH
|                    |  | EACH DIRECTOR  |             | DIRECTOR 
|                    |  |                |             |          
|Lawrence B. Sorrel  |  |                | 130,676,727 |           |  |            | 269,002   | 
|                   
|                   
|                   
|                   
|Stephen H. Clark    |  |                | 128,183,323 |           |  |            | 2,762,406 | 
|                   
|                   
|                   
|                   
|Timothy M. Donahue  |  |                | 130,704,863 |           |  |            | 240,866   | 
|                   
|                   
|                   
|                   
|James R. Matthews   |  |                | 130,676,593 |           |  |            | 269,136   | 
|                   
|                   
|                   
|                   
|Thomas E. McInerney |  |                | 130,676,513 |           |  |            | 269,216   | 
|                   
|                   
|                   
|                   
|Calvin J. Payne     |  |                | 128,184,168 |           |  |            | 2,761,561 | 
|                   
|                   
|                   
|                   
|Michael J. Price    |  |                | 125,936,332 |           |  |            | 5,009,397 | 
|                   
|                   
|                   
|                   
|Steven M. Shindler  |  |                | 125,828,095 |           |  |            | 5,117,634 | 
|                   
|                   
|                   
|                   
|Michael R. Stone    |  |                | 130,743,213 |           |  |            | 202,516   | 
|                   
|                   
|                   
|                   
|Edgar L. Reynolds   |  |                | 130,744,007 |           |  |            | 201,722   | 

In addition to election of directors, the stockholders voted on two items at
the annual meeting. The stockholders voted in favor of a proposal to approve
our Amended and Restated Stock Incentive Plan which included a revision to the
change of control
provisions to incorporate additional events within the meaning of a change of
control and to provide new vesting rules relating to a change of control. The
number of votes cast in favor of the proposal was 118,495,170, the number of
votes cast against the proposal was 11,907,039 and the number of abstentions
was 543,520.

The stockholders also ratified the appointment of Ernst & Young LLP,
independent certified public accountants, as our independent auditors for the
year ending December 31, 2001. The number of votes cast in favor of the
appointment of Ernst & Young was 130,788,253, the number of votes cast against
the proposal was 87,028 and the number of abstentions was 70,448.

16



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##### Table of Contents






ITEM 5. OTHER INFORMATION

None.




ITEM 6. EXHIBITS AND REPORTS ON FORM 8K

(a)  Exhibits

|     |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|---- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|2.1  |  | Agreement to Sublease, dated as of August 25, 2000 (the SBC Agreement),
by and among SBC Wireless, Inc., for itself and on behalf of the Sublessor
Entities, SpectraSite Holdings, Inc. (the Registrant) and Southern
Towers, Inc. (incorporated by reference to exhibit 10.1 to the
Registrants report on Form 8-K dated August 25, 2000 and filed August 31,
2000).                                                                                                                                                                                                                                                                                                                                                                                
|    
|    
|    
|    
|2.2  |  | Amendment No. 1 to the SBC Agreement, dated as of December 14, 2000.
(incorporated by reference to exhibit no. 2.8 to the registration
statement on Form S-3 of the Registrant, file no. 333-45728).                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|    
|    
|    
|    
|2.3  |  | Agreement to Sublease, dated as of February 16, 2000, by and between
AirTouch Communications, Inc. and the other parties named therein as
Sublessors, California Tower, Inc. and the Registrant (the AirTouch
Agreement). (incorporated by reference to exhibit no. 2.9 to the
Registrants Form 10-K for the year ended December 31,
1999).                                                                                                                                                                                                                                                                                                                                                                                                            
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|2.4  |  | Amendment to the Airtouch Agreement, dated as of March 8, 2001
(incorporated by reference to exhibit no. 2.4 to the Registrants Form
10-Q for the quarter ended March 31, 2001).                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
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|3.1  |  | Second Amended and Restated Certificate of Incorporation (incorporated by
reference to exhibit 3.1 to the amended registration statement on Form
8-A/A of the Registrant as filed on December 12, 2000).                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
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|3.2  |  | Amended Bylaws (incorporated by reference to exhibit 3.8 to the
registration statement on Form S-1 of the Registrant, file no.
333-93873).                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
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|10.5 |  | Credit Agreement, dated as of February 22, 2001, by and among
Communications, as Borrower; the Registrant, as a Guarantor; CIBC World Markets
Corp. and Credit Suisse First Boston, as Joint Lead Arrangers and Bookrunners;
CIBC World Markets Corp., Credit Suisse First Boston, Bank Of Montreal, Chicago
Branch and TD Securities (USA) Inc., as Arrangers; Credit Suisse First Boston,
as Syndication Agent; Bank Of Montreal, Chicago Branch and TD Securities (USA)
Inc., as Co-Documentation Agents; Canadian Imperial Bank Of Commerce,
as Administrative Agent and Collateral Agent; and other credit parties party
thereto. (incorporated by reference to exhibit no. 10.6 to the Registrants
Form 10-K for the year ended December 31, 2000).

(b)  Reports on Form 8-K

None.

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