##### 



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 September 30, 2002                                 
|     |  |                                                                                   
|[  ] |  | 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                       |  | 4899                         |  | 56-2027322            
|(State or jurisdiction of      |  | (Primary Standard Industrial |  | (I.R.S. Employer      
|incorporation or organization) |  | Classification Code Number)  |  | 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)

Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15 (d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days.

YES X     NO

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

YES      NO X

As of November 8, 2002, the registrant had only one outstanding class of common
stock, of which there were
154,013,917 shares outstanding.





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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 CONSOLIDATED 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                           
|                                     | ITEM 4 CONTROLS AND PROCEDURES                                                              
|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                                                     
|SIGNATURES                          
|CERTIFICATIONS                      
|SECOND AMENDMENT                    
|AMENDMENT                           
|VOTING LETTER AGREEMENT             
|TERMINATION AGREEMENT               
|SECTION 906 CERTIFICATION OF THE CEO
|SECTION 906 CERTIFICATION OF THE CFO







INDEX

|                               |  |                                                                                                                            |  |   
|------------------------------ |  | -------------------------------------------------------------------------------------------------------------------------- |  | --
|PART I 
FINANCIAL
INFORMATION
|                               |  |                                                                                                                            |  |   
|                               |  | ITEM 1  UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS                                                             |  |   
|                               |  |                                                                                                                            |  |   
|                               |  | Condensed Consolidated Balance Sheets
at September 30, 2002 (unaudited) and December 31, 2001.                             |  | 3 
|                               |  |                                                                                                                            |  |   
|                               |  | Unaudited Condensed Consolidated Statements of Operations
for the three and nine months ended September 30, 2002 and 2001. |  | 4 
|                               |  |                                                                                                                            |  |   
|                               |  | Unaudited Condensed Consolidated Statements of Cash Flows
for the nine months ended September 30, 2002 and 2001.           |  | 5 
|                               |  |                                                                                                                            |  |   
|                               |  | Notes to the Unaudited Condensed Consolidated Financial Statements                                                         |  | 6 
|                               |  |                                                                                                                            |  |   
|                               |  | ITEM 2  MANAGEMENTS DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS                             |  | 15
|                               |  |                                                                                                                            |  |   
|                               |  | ITEM 3  QUANTITATIVE AND QUALITATIVE DISCLOSURES
ABOUT MARKET RISK                                                        |  | 24
|                               |  |                                                                                                                            |  |   
|                               |  | ITEM 4  CONTROLS AND PROCEDURES                                                                                           |  | 25
|                               |  |                                                                                                                            |  |   
|PART II 
OTHER
INFORMATION   
|                               |  |                                                                                                                            |  |   
|                               |  | ITEM 1  LEGAL PROCEEDINGS                                                                                                 |  | 26
|                               |  |                                                                                                                            |  |   
|                               |  | ITEM 2  CHANGES IN SECURITIES AND USE OF PROCEEDS                                                                         |  | 26
|                               |  |                                                                                                                            |  |   
|                               |  | ITEM 3  DEFAULTS UPON SENIOR SECURITIES                                                                                   |  | 26
|                               |  |                                                                                                                            |  |   
|                               |  | ITEM 4 - SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS                                                               |  | 26
|                               |  |                                                                                                                            |  |   
|                               |  | ITEM 5  OTHER INFORMATION                                                                                                 |  | 26
|                               |  |                                                                                                                            |  |   
|                               |  | ITEM 6  EXHIBITS AND REPORTS ON FORM 8-K                                                                                  |  | 27
|                               |  |                                                                                                                            |  |   
|SIGNATURES                     |  | 29                                                                                                                        
|                               |  |                                                                                                                            |  |   
|CERTIFICATIONS                 |  | 30                                                                                                                        

2



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##### 






SPECTRASITE HOLDINGS, INC. AND SUBSIDIARIESCONDENSED CONSOLIDATED BALANCE SHEETSAt September 30, 2002 and
December 31, 2001(dollars in thousands)

|                                                     |  |                                                                                                                                 |           |                                      |            |               |           |              |           |   |           | 
|---------------------------------------------------- |  | ------------------------------------------------------------------------------------------------------------------------------- | --------- | ------------------------------------ | ---------- | ------------- | --------- | ------------ | --------- | - | --------- | 
|                                                     |  |                                                                                                                                 |           |                                      |            | September 30, |           | December 31,
|                                                     |  |                                                                                                                                 |           |                                      |            | 2002          |           | 2001        
|                                                     |  |                                                                                                                                 |           |                                      |            |               |           |             
|Assets                                               |  | (unaudited)                                                                                                                     |           |                                      |            |              
|Current assets:                                      |  |                                                                                                                                 |           |                                      |            |               |           |             
|                                                     |  | Cash and cash equivalents                                                                                                       |           | $                                    | 64,246     |               |           | $            | 31,547    |  
|                                                     |  | Accounts receivable, net of allowance of $7,026 and $4,982                                                                      |           |                                      | 23,148     |               |           |              | 22,375    |  
|                                                     |  | Costs and estimated earnings in excess of billings                                                                              |           |                                      | 79         |               |           |              | 114       |  
|                                                     |  | Inventories                                                                                                                     |           |                                      | 8,201      |               |           |              | 8,355     |  
|                                                     |  | Prepaid expenses and other                                                                                                      |           |                                      | 10,936     |               |           |              | 11,505    |  
|                                                     |  | Assets held for sale                                                                                                            |           |                                      | 26,735     |               |           |              | 113,015   |  
|                                                     |  |                                                                                                                                 |           |                                      |            |               |           |             
|                                                     |  |                                                                                                                                 |           | Total current assets                 |            |               | 133,345   |              |           |   | 186,911   | 
|Property and equipment, net                          |  |                                                                                                                                 | 2,326,281 |                                      |            |               | 2,443,046 |             
|Goodwill, net                                        |  |                                                                                                                                 | 60,626    |                                      |            |               | 437,350   |             
|Other assets                                         |  |                                                                                                                                 | 102,381   |                                      |            |               | 134,292   |             
|                                                     |  |                                                                                                                                 |           |                                      |            |               |           |             
|                                                     |  |                                                                                                                                 |           | Total assets                         |            | $             | 2,622,633 |              |           | $ | 3,201,599 | 
|                                                     |  |                                                                                                                                 |           |                                      |            |               |           |             
|Liabilities and shareholders equity (deficit)       |  |                                                                                                                                 |           |                                      |            |               |           |             
|Current liabilities:                                 |  |                                                                                                                                 |           |                                      |            |               |           |             
|                                                     |  | Accounts payable                                                                                                                |           | $                                    | 9,788      |               |           | $            | 36,608    |  
|                                                     |  | Accrued and other expenses                                                                                                      |           |                                      | 59,781     |               |           |              | 69,067    |  
|                                                     |  | Billings in excess of costs and estimated earnings                                                                              |           |                                      | 509        |               |           |              | 937       |  
|                                                     |  | Current portion of long-term debt                                                                                               |           |                                      | 1,125      |               |           |              |          |  
|                                                     |  | Senior notes                                                                                                                    |           |                                      | 1,739,491  |               |           |              |          |  
|                                                     |  | Liabilities held for sale                                                                                                       |           |                                      | 19,680     |               |           |              | 36,102    |  
|                                                     |  |                                                                                                                                 |           |                                      |            |               |           |             
|                                                     |  |                                                                                                                                 |           | Total current liabilities            |            |               | 1,830,374 |              |           |   | 142,714   | 
|Long-term debt                                       |  |                                                                                                                                 | 783,875   |                                      |            |               | 695,000   |             
|Senior notes                                         |  |                                                                                                                                 |          |                                      |            |               | 400,000   |             
|Senior convertible notes                             |  |                                                                                                                                 |          |                                      |            |               | 200,000   |             
|Senior discount notes                                |  |                                                                                                                                 |          |                                      |            |               | 1,020,332 |             
|Other long-term liabilities                          |  |                                                                                                                                 | 24,834    |                                      |            |               | 24,208    |             
|                                                     |  |                                                                                                                                 |           |                                      |            |               |           |             
|                                                     |  |                                                                                                                                 |           | Total liabilities                    |            |               | 2,639,083 |              |           |   | 2,482,254 | 
|                                                     |  |                                                                                                                                 |           |                                      |            |               |           |             
|Shareholders equity (deficit):                      |  |                                                                                                                                 |           |                                      |            |               |           |             
|                                                     |  | Common stock, $0.001 par value, 300,000,000 shares
authorized, 154,013,917 and 153,424,509 issued and
outstanding, respectively |           |                                      | 154        |               |           |              | 153       |  
|                                                     |  | Additional paid-in-capital                                                                                                      |           |                                      | 1,624,881  |               |           |              | 1,622,089 |  
|                                                     |  | Accumulated other comprehensive income (loss)                                                                                   |           |                                      | (1,913     | )             |           |              | 21,984    |  
|                                                     |  | Accumulated deficit                                                                                                             |           |                                      | (1,639,572 | )             |           |              | (924,881  | )
|                                                     |  |                                                                                                                                 |           |                                      |            |               |           |             
|                                                     |  |                                                                                                                                 |           | Total shareholders equity (deficit) |            |               | (16,450   | )            |           |   | 719,345   | 
|                                                     |  |                                                                                                                                 |           |                                      |            |               |           |             
|Total liabilities and shareholders equity (deficit) |  | $                                                                                                                               | 2,622,633 |                                      |            | $             | 3,201,599 |             
|                                                     |  |                                                                                                                                 |           |                                      |            |               |           |              |          

See accompanying notes.

3



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##### 






SPECTRASITE HOLDINGS, INC. AND SUBSIDIARIESUNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
Three and Nine Months Ended September 30, 2002 and 2001(in
thousands, except per share amounts)

|                                                                |                                                                                  |                                                                      |                              |         |                              |         |                             |          |        |          |          |          |         |          |          |          |         |          |  
|--------------------------------------------------------------- | -------------------------------------------------------------------------------- | -------------------------------------------------------------------- | ---------------------------- | ------- | ---------------------------- | ------- | --------------------------- | -------- | ------ | -------- | -------- | -------- | ------- | -------- | -------- | -------- | ------- | -------- | -
|                                                                |                                                                                  |                                                                      |                              |         | Three Months Ended Sept. 30, |         | Nine Months Ended Sept. 30,
|                                                                |                                                                                  |                                                                      |                              |         |                              |         |                            
|                                                                |                                                                                  |                                                                      |                              |         | 2002                         |         | 2001                        |          | 2002   |          | 2001    
|                                                                |                                                                                  |                                                                      |                              |         |                              |         |                             |          |        |          |         
|Revenues:                                                       |                                                                                  |                                                                      |                              |         |                              |         |                             |          |        |          |          |          |         |          |          |         
|                                                                | Site leasing                                                                     |                                                                      | $                            | 72,030  |                              |         | $                           | 58,214   |        |          | $        | 207,615  |         |          | $        | 157,603  |        
|                                                                | Broadcast services                                                               |                                                                      |                              | 7,310   |                              |         |                             | 8,376    |        |          |          | 19,998   |         |          |          | 29,498   |        
|                                                                |                                                                                  |                                                                      |                              |         |                              |         |                             |          |        |          |          |          |         |          |          |          |        
|                                                                |                                                                                  |                                                                      | Total revenues               |         |                              | 79,340  |                             |          |        | 66,590   |          |          |         | 227,613  |          |          |         | 187,101  |  
|                                                                |                                                                                  |                                                                      |                              |         |                              |         |                             |          |        |          |          |          |         |          |          |          |        
|Operating Expenses:                                             |                                                                                  |                                                                      |                              |         |                              |         |                             |          |        |          |          |          |         |          |          |         
|                                                                |                                                                                  | Costs of operations, excluding
depreciation and amortization expense |                              |         |                              |         |                             |          |        |          |          |          |         |          |          |          |         |         
|                                                                |                                                                                  |                                                                      | Site leasing                 |         |                              | 27,465  |                             |          |        | 24,709   |          |          |         | 79,675   |          |          |         | 65,009   |  
|                                                                |                                                                                  |                                                                      | Broadcast services           |         |                              | 5,230   |                             |          |        | 6,087    |          |          |         | 15,605   |          |          |         | 22,689   |  
|                                                                |                                                                                  | Selling, general and administrative expenses                         |                              |         | 14,154                       |         |                             |          | 17,857 |          |          |          | 45,130  |          |          |          | 55,832  |         
|                                                                |                                                                                  | Depreciation and amortization expense                                |                              |         | 48,658                       |         |                             |          | 43,851 |          |          |          | 143,921 |          |          |          | 113,399 |         
|                                                                |                                                                                  | Restructuring and non-recurring charges                              |                              |         |                             |         |                             |          |       |          |          |          | 28,570  |          |          |          | 72,323  |         
|                                                                |                                                                                  |                                                                      |                              |         |                              |         |                             |          |        |          |          |          |         |          |          |          |        
|                                                                |                                                                                  |                                                                      | Total operating expenses     |         |                              | 95,507  |                             |          |        | 92,504   |          |          |         | 312,901  |          |          |         | 329,252  |  
|                                                                |                                                                                  |                                                                      |                              |         |                              |         |                             |          |        |          |          |          |         |          |          |          |        
|Operating loss                                                  |                                                                                  |                                                                      | (16,167                      | )       |                              |         | (25,914                     | )        |        |          | (85,288  | )        |         |          | (142,151 | )       
|                                                                |                                                                                  |                                                                      |                              |         |                              |         |                             |          |        |          |          |          |         |          |          |          |        
|Other income (expense):                                         |                                                                                  |                                                                      |                              |         |                              |         |                             |          |        |          |          |          |         |          |          |         
|                                                                | Interest income                                                                  |                                                                      |                              | 148     |                              |         |                             | 1,209    |        |          |          | 525      |         |          |          | 16,228   |        
|                                                                | Interest expense                                                                 |                                                                      |                              | (67,018 | )                            |         |                             | (54,015  | )      |          |          | (187,510 | )       |          |          | (155,746 | )      
|                                                                | Reorganization expense                                                           |                                                                      |                              | (1,854  | )                            |         |                             |         |        |          |          | (1,854   | )       |          |          |         |        
|                                                                | Other income (expense)                                                           |                                                                      |                              | 1,997   |                              |         |                             | (165,189 | )      |          |          | (9,185   | )       |          |          | (214,657 | )      
|                                                                |                                                                                  |                                                                      |                              |         |                              |         |                             |          |        |          |          |          |         |          |          |          |        
|                                                                |                                                                                  |                                                                      | Total other income (expense) |         |                              | (66,727 | )                           |          |        | (217,995 | )        |          |         | (198,024 | )        |          |         | (354,175 | )
|                                                                |                                                                                  |                                                                      |                              |         |                              |         |                             |          |        |          |          |          |         |          |          |          |        
|Loss from continuing operations before income taxes             |                                                                                  |                                                                      | (82,894                      | )       |                              |         | (243,909                    | )        |        |          | (283,312 | )        |         |          | (496,326 | )       
|Income tax expense                                              |                                                                                  |                                                                      | 551                          |         |                              |         | 304                         |          |        |          | 694      |          |         |          | 533      |         
|                                                                |                                                                                  |                                                                      |                              |         |                              |         |                             |          |        |          |          |          |         |          |          |          |        
|Loss from continuing operations                                 |                                                                                  |                                                                      | (83,445                      | )       |                              |         | (244,213                    | )        |        |          | (284,006 | )        |         |          | (496,859 | )       
|Discontinued operations:                                        |                                                                                  |                                                                      |                              |         |                              |         |                             |          |        |          |          |          |         |          |          |         
|                                                                | Income (loss) from operations of discontinued
segment, net of income tax expense |                                                                      |                              | (5,520  | )                            |         |                             | 3,073    |        |          |          | (8,305   | )       |          |          | 4,788    |        
|                                                                | Estimated loss on disposal of discontinued
segment                               |                                                                      |                              | (45,627 | )                            |         |                             |         |        |          |          | (45,627  | )       |          |          |         |        
|                                                                |                                                                                  |                                                                      |                              |         |                              |         |                             |          |        |          |          |          |         |          |          |          |        
|Loss before cumulative effect of change in
accounting principle |                                                                                  |                                                                      | (134,592                     | )       |                              |         | (241,140                    | )        |        |          | (337,938 | )        |         |          | (492,071 | )       
|Cumulative effect of change in accounting
for goodwill          |                                                                                  |                                                                      |                             |         |                              |         |                            |          |        |          | (376,753 | )        |         |          |         |         
|                                                                |                                                                                  |                                                                      |                              |         |                              |         |                             |          |        |          |          |          |         |          |          |          |        
|Net loss                                                        |                                                                                  | $                                                                    | (134,592                     | )       |                              | $       | (241,140                    | )        |        | $        | (714,691 | )        |         | $        | (492,071 | )       
|                                                                |                                                                                  |                                                                      |                              |         |                              |         |                             |          |        |          |          |          |         |          |          |          |        
|Basic and diluted earnings per share                            |                                                                                  |                                                                      |                              |         |                              |         |                             |          |        |          |          |          |         |          |          |         
|                                                                | Loss from continuing operations                                                  |                                                                      | $                            | (0.54   | )                            |         | $                           | (1.61    | )      |          | $        | (1.84    | )       |          | $        | (3.33    | )      
|                                                                | Discontinued operations                                                          |                                                                      |                              | (0.33   | )                            |         |                             | 0.02     |        |          |          | (0.35    | )       |          |          | 0.03     |        
|                                                                | Cumulative effect of change in accounting                                        |                                                                      |                              |        |                              |         |                             |         |        |          |          | (2.45    | )       |          |          |         |        
|                                                                |                                                                                  |                                                                      |                              |         |                              |         |                             |          |        |          |          |          |         |          |          |          |        
|                                                                | Net loss                                                                         |                                                                      | $                            | (0.87   | )                            |         | $                           | (1.59    | )      |          | $        | (4.64    | )       |          | $        | (3.30    | )      
|                                                                |                                                                                  |                                                                      |                              |         |                              |         |                             |          |        |          |          |          |         |          |          |          |        
|Weighted average common
shares outstanding (basic and diluted)  |                                                                                  |                                                                      | 154,014                      |         |                              |         | 151,473                     |          |        |          | 153,894  |          |         |          | 149,266  |         
|                                                                |                                                                                  |                                                                      |                              |         |                              |         |                             |          |        |          |          |          |         |          |          |          |        

See accompanying notes.

4



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##### 






SPECTRASITE HOLDINGS, INC. AND SUBSIDIARIESUNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
Nine Months Ended September 30, 2002 and 2001(dollars in
thousands)

|                                                                                     |                                                                   |                                                         |                                                      |         |                   |         |                   |         |        |          |  
|------------------------------------------------------------------------------------ | ----------------------------------------------------------------- | ------------------------------------------------------- | ---------------------------------------------------- | ------- | ----------------- | ------- | ----------------- | ------- | ------ | -------- | -
|                                                                                     |                                                                   |                                                         |                                                      |         | Nine Months Ended |         | Nine Months Ended
|                                                                                     |                                                                   |                                                         |                                                      |         | Sept. 30, 2002    |         | Sept. 30, 2001   
|                                                                                     |                                                                   |                                                         |                                                      |         |                   |         |                  
|Operating activities                                                                 |                                                                   |                                                         |                                                      |         |                   |         |                   |        
|Net loss                                                                             |                                                                   | $                                                       | (714,691                                             | )       |                   | $       | (492,071          | )      
|Adjustments
to reconcile net loss to net cash
     provided by operating activities: |                                                                   |                                                         |                                                      |         |                   |         |                   |        
|                                                                                     | Depreciation                                                      |                                                         |                                                      | 145,639 |                   |         |                   | 100,678 |       
|                                                                                     | Cumulative effect of change in accounting for goodwill            |                                                         |                                                      | 376,753 |                   |         |                   |        |       
|                                                                                     | Amortization of goodwill and other intangible assets              |                                                         |                                                      | 2,507   |                   |         |                   | 28,059  |       
|                                                                                     | Amortization of debt issuance costs                               |                                                         |                                                      | 12,325  |                   |         |                   | 7,560   |       
|                                                                                     | Amortization of senior discount notes                             |                                                         |                                                      | 92,900  |                   |         |                   | 82,651  |       
|                                                                                     | Non-cash compensation charges                                     |                                                         |                                                      | 638     |                   |         |                   | 1,594   |       
|                                                                                     | Loss on disposal of assets                                        |                                                         |                                                      | 80,883  |                   |         |                   | 26,284  |       
|                                                                                     | Gain on sale of investments in affiliate                          |                                                         |                                                      | (1,364  | )                 |         |                   |        |       
|                                                                                     | Write-off of goodwill                                             |                                                         |                                                      |        |                   |         |                   | 44,476  |       
|                                                                                     | Write-off of loan to and investment in affiliates                 |                                                         |                                                      |        |                   |         |                   | 149,405 |       
|                                                                                     | Equity in net loss of affiliates                                  |                                                         |                                                      | 59      |                   |         |                   | 62,030  |       
|                                                                                     | Changes in operating assets and liabilities, net of acquisitions: |                                                         |                                                      |         |                   |         |                   |         |       
|                                                                                     |                                                                   | Accounts receivable                                     |                                                      |         | 34,786            |         |                   |         | 1,260  |         
|                                                                                     |                                                                   | Costs and estimated earnings in excess of billings, net |                                                      |         | (4,127            | )       |                   |         | (7,108 | )       
|                                                                                     |                                                                   | Inventories                                             |                                                      |         | (227              | )       |                   |         | (7,452 | )       
|                                                                                     |                                                                   | Prepaid expenses and other                              |                                                      |         | (4,534            | )       |                   |         | (5,532 | )       
|                                                                                     |                                                                   | Accounts payable                                        |                                                      |         | (36,997           | )       |                   |         | 8,139  |         
|                                                                                     |                                                                   | Other liabilities                                       |                                                      |         | 16,983            |         |                   |         | 16,469 |         
|                                                                                     |                                                                   |                                                         |                                                      |         |                   |         |                   |        
|                                                                                     |                                                                   |                                                         | Net cash provided by operating activities            |         |                   | 1,533   |                   |         |        | 16,442   |  
|                                                                                     |                                                                   |                                                         |                                                      |         |                   |         |                   |        
|Investing activities                                                                 |                                                                   |                                                         |                                                      |         |                   |         |                   |        
|Purchases of property and equipment                                                  |                                                                   |                                                         | (62,498                                              | )       |                   |         | (792,395          | )      
|Loans to affiliates                                                                  |                                                                   |                                                         | (750                                                 | )       |                   |         | (27,400           | )      
|Refunds of deposits on asset purchases                                               |                                                                   |                                                         |                                                     |         |                   |         | 6,847             |        
|Proceeds from the sale of assets                                                     |                                                                   |                                                         | 1,283                                                |         |                   |         |                  |        
|Acquisitions, net of cash acquired                                                   |                                                                   |                                                         |                                                     |         |                   |         | (7,510            | )      
|Proceeds from the sale of investment in affiliate                                    |                                                                   |                                                         | 7,500                                                |         |                   |         |                  |        
|Investments in affiliates                                                            |                                                                   |                                                         |                                                     |         |                   |         | (6,626            | )      
|                                                                                     |                                                                   |                                                         |                                                      |         |                   |         |                   |        
|                                                                                     |                                                                   |                                                         | Net cash used in investing activities                |         |                   | (54,465 | )                 |         |        | (827,084 | )
|                                                                                     |                                                                   |                                                         |                                                      |         |                   |         |                   |        
|Financing activities                                                                 |                                                                   |                                                         |                                                      |         |                   |         |                   |        
|Proceeds from issuance of common stock, net of issuance costs                        |                                                                   |                                                         | 477                                                  |         |                   |         | 4,154             |        
|Proceeds from issuance of long-term debt                                             |                                                                   |                                                         | 90,000                                               |         |                   |         | 300,000           |        
|Repayments of debt                                                                   |                                                                   |                                                         | (2,234                                               | )       |                   |         | (519              | )      
|Debt issuance costs                                                                  |                                                                   |                                                         | (2,612                                               | )       |                   |         | (19,846           | )      
|                                                                                     |                                                                   |                                                         |                                                      |         |                   |         |                   |        
|                                                                                     |                                                                   |                                                         | Net cash provided by financing activities            |         |                   | 85,631  |                   |         |        | 283,789  |  
|                                                                                     |                                                                   |                                                         |                                                      |         |                   |         |                   |        
|                                                                                     |                                                                   |                                                         | Net increase (decrease) in cash and cash equivalents |         |                   | 32,699  |                   |         |        | (526,853 | )
|Cash and cash equivalents at beginning of period                                     |                                                                   |                                                         | 31,547                                               |         |                   |         | 552,653           |        
|                                                                                     |                                                                   |                                                         |                                                      |         |                   |         |                   |        
|Cash and cash equivalents at end of period                                           |                                                                   | $                                                       | 64,246                                               |         |                   | $       | 25,800            |        
|                                                                                     |                                                                   |                                                         |                                                      |         |                   |         |                   |        
|Supplemental disclosures of cash flow information:                                   |                                                                   |                                                         |                                                      |         |                   |         |                   |        
|Cash paid during the period for interest                                             |                                                                   | $                                                       | 72,696                                               |         |                   | $       | 66,762            |        
|Cash paid during the period for income taxes                                         |                                                                   |                                                         | 1,471                                                |         |                   |         | 598               |        
|Supplemental disclosures of noncash investing and financing activities:              |                                                                   |                                                         |                                                      |         |                   |         |                   |        
|Common stock issued for property and equipment                                       |                                                                   | $                                                       | 1,678                                                |         |                   | $       | 149,938           |        
|Capital lease obligations incurred for the purchase of property and
equipment        |                                                                   |                                                         | 1,538                                                |         |                   |         | 16,893            |        

See accompanying notes.

5



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##### 






SPECTRASITE HOLDINGS, INC. AND SUBSIDIARIESNOTES TO THE UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

1.     Description of Business, Basis of Presentation 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
and broadcast industries, including leasing antenna sites on multi-tenant
towers, managing rooftop and in-building telecommunications access on
commercial real estate and designing, constructing, modifying and maintaining
broadcast towers in the United States.

Basis of Presentation

The accompanying consolidated financial statements include the accounts of
SpectraSite and its subsidiaries. All significant intercompany transactions
and balances have been eliminated in consolidation. As discussed in Note 6,
the Company has decided to sell its network services division and the assets
and liabilities of that division have been classified as held-for-sale in the
accompanying balance sheets.

The condensed consolidated financial statements have been prepared
assuming SpectraSite Holdings, Inc. will continue as a going concern, which
contemplates the realization of assets and the satisfaction of liabilities in
the normal course of business. SpectraSite Holdings, Inc. has incurred
recurring operating losses, and it has working capital and shareholders
deficits as of September 30, 2002. In addition, SpectraSite Holdings, Inc.
announced that it has reached agreements with beneficial holders of
approximately 66% of its senior notes (the Senior Notes),
its senior discount notes (the Senior Discount Notes) and
its senior convertible notes (the Senior Convertible
Notes, and together with the Senior Notes and Senior Discount
Notes, the SpectraSite Notes) to support a restructuring plan as
discussed in Note 8. The restructuring plan will involve SpectraSite Holdings,
Inc. and not SpectraSite Communications, Inc. or any of SpectraSite
Communications, Inc.s subsidiaries. The restructuring plan is also not
currently expected to constitute an event of default under or
otherwise adversely affect SpectraSite Communications, Inc.s credit facility, which will continue
to be serviced from operating cash flow by SpectraSite Communications, Inc.
However, there can be no assurance that the restructuring plan will be executed
as anticipated. The condensed consolidated financial statements do not include
any adjustments to reflect the possible future effects on the recoverability
and classification of assets or the amounts and classifications of liabilities
that might be necessary should SpectraSite Holdings, Inc. be unable to continue
as a going concern.

Use of Estimates

The preparation of financial statements in conformity with generally
accepted accounting principles in the United States 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 based on lease
agreements. Fixed escalation clauses present in certain lease agreements are
recognized on a straight-line basis over the term of the lease.
Broadcast service
revenues related to construction activities are derived from service contracts
that provide for billing on a time and materials or fixed price basis. For the
time and materials contracts, revenues are recognized as services are
performed. For fixed price contracts, revenues are recognized using the
percentage-of-completion method 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.

Allowance for Uncollectible Accounts

The Company evaluates the collectibility of accounts receivable based on a
combination of factors. In circumstances where a specific customer is unable to
meet its financial obligations, the Company records a specific allowance
against amounts due to reduce the net recognized receivable to the amount it
reasonably believes will be collected. For all other customers, the Company
reserves a percentage of the remaining outstanding accounts receivable balance
based on a review of the aging of customer balances, industry experience and
the current economic environment. The allowance for uncollectible accounts,
computed based on the above methodology, was $5.0 million and $7.0 million as
of December 31, 2001 and September 30, 2002, respectively.

6



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##### 



SPECTRASITE HOLDINGS, INC. AND SUBSIDIARIESNOTES TO THE UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Significant Customers

The Companys customer base consists of businesses operating in the
wireless telecommunications and broadcast industries. The Companys exposure to
credit risk consists primarily of unsecured accounts receivable from these
customers. One customer, which is a significant shareholder of the Company,
accounted for 35% and 28% of revenues in the three months ended September 30,
2001 and 2002, respectively, and 37% and 29% in the nine months ended September
30, 2001 and 2002, respectively. In addition, another customer, that is an
affiliate of another significant shareholder of the Company, accounted for 19%
and 20% of revenues in the three months ended September 30, 2001 and 2002,
respectively, and 16% and 20% in the nine months ended September 30, 2001 and
2002, respectively.

Property and Equipment

Property and equipment, including towers, are recorded at cost and
depreciated over their estimated useful lives. The Company capitalizes costs
incurred in bringing towers to an operational state. Costs clearly associated
with the acquisition, development and construction of towers are capitalized as
a cost of that tower. Indirect costs that relate to several towers are
capitalized and allocated to the towers to which the costs relate. Indirect
costs that do not clearly relate to projects under development or construction
are charged to operating expenses as incurred. Depreciation on property and
equipment, excluding towers is computed using the straight-line method over the
estimated useful lives of the assets ranging from three to fifteen years.
Depreciation on towers is computed using the straight-line method over the
estimated useful lives of 15 years for wireless towers and 30 years for
broadcast towers. Amortization of assets recorded under capital leases is
included in depreciation.

Restructuring and Non-recurring Charges

In May 2002, the Company announced that it would terminate its
build-to-suit programs with Cingular and other carriers and implement other
cost-cutting measures as a part of the curtailment of tower development
activities. As a result of these actions, the Company recorded restructuring
charges of $24.3 million. Of this amount, $16.4 million was related to the
write-off of work in progress related to sites in development that are to be
terminated, $3.2 million was related to the costs of closing offices and $4.7
million was related to the costs of employee severance. In addition, we
recorded a non-recurring impairment charge of $4.3 million to write-down the
carrying value of 21 towers that are not marketable. The charge was based on
the estimated discounted cash flows of the towers.

Non-recurring charges for the nine months ended September 30, 2001 were
$72.3 million, consisting of $35.8 million in non-recurring charges relating to
rooftop management operations, $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.

The following table displays activity related to the accrued restructuring
liability. Such liability is reflected in accrued and other expenses in the
accompanying condensed consolidated balance sheets.

|                                           |  |                   |       |               |  |               |       |                    |  |       |        |           |  |   |       | 
|------------------------------------------ |  | ----------------- | ----- | ------------- |  | ------------- | ----- | ------------------ |  | ----- | ------ | --------- |  | - | ----- | 
|                                           |  | Liability         |       |               |  |               |       |                    |  |       |        | Liability
|                                           |  | as of             |       | Restructuring |  |               |       |                    |  | as of
|                                           |  | December 31, 2001 |       | Expense       |  | Cash Payments |       | September 30, 2002
|                                           |  |                   |       |               |  |               |       |                   
|                                           |  | (in thousands)    |       |               |  |               |       |                    |  |      
|Accrued restructuring liabilities:         |  |                   |       |               |  |               |       |                    |  |       |        |           |  |   |       | 
|Employee severance                         |  | $                 | 2,431 |               |  | $             | 4,667 |                    |  | $     | (3,272 | )         |  | $ | 3,826 | 
|Lease termination and office closing costs |  |                   | 2,419 |               |  |               | 3,245 |                    |  |       | (1,136 | )         |  |   | 4,528 | 
|                                           |  |                   |       |               |  |               |       |                    |  |       |        |           |  |   |       | 
|Total                                      |  | $                 | 4,850 |               |  | $             | 7,912 |                    |  | $     | (4,408 | )         |  | $ | 8,354 | 
|                                           |  |                   |       |               |  |               |       |                    |  |       |        |           |  |   |       | 

7



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##### 



SPECTRASITE HOLDINGS, INC. AND SUBSIDIARIESNOTES TO THE UNAUDITED CONDENSED CONSOLIDATED 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 (loss) 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 (loss) per share because the
effect would have been antidilutive. Accordingly, basic and diluted net loss
per share are the same for all periods presented.

Comprehensive Loss

Other comprehensive gain (loss) consists of foreign currency translation
adjustment and unrealized holding gains (losses) as follows:

|                                                            |  |                    |          |                   |  |                |          |      |  |   |          |   |  |   |          |  
|----------------------------------------------------------- |  | ------------------ | -------- | ----------------- |  | -------------- | -------- | ---- |  | - | -------- | - |  | - | -------- | -
|                                                            |  | Three Months Ended |          | Nine Months Ended
|                                                            |  | September 30,      |          | September 30,    
|                                                            |  |                    |          |                  
|                                                            |  | 2002               |          | 2001              |  | 2002           |          | 2001
|                                                            |  |                    |          |                   |  |                |          |     
|                                                            |  |                    |          |                   |  | (in thousands) |          |      |  |  
|Reported net loss                                           |  | $                  | (134,592 | )                 |  | $              | (241,140 | )    |  | $ | (714,691 | ) |  | $ | (492,071 | )
|Foreign currency translation adjustment                     |  |                    | (432     | )                 |  |                | 39,661   |      |  |   | 115      |   |  |   | 13,650   |  
|Unrealized holding gains (losses) arising during the period |  |                    | (1,467   | )                 |  |                | 1,567    |      |  |   | (24,012  | ) |  |   | 8,571    |  
|                                                            |  |                    |          |                   |  |                |          |      |  |   |          |   |  |   |          |  
|Adjusted net loss                                           |  | $                  | (136,491 | )                 |  | $              | (199,912 | )    |  | $ | (738,588 | ) |  | $ | (469,850 | )
|                                                            |  |                    |          |                   |  |                |          |      |  |   |          |   |  |   |          |  

Reclassifications

Certain reclassifications have been made to the 2001 condensed
consolidated financial statements to conform to the 2002 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.

2.     Property and Equipment

Property and
equipment consist of the following:

|                              |  |                |           |              |  |   |           |  
|----------------------------- |  | -------------- | --------- | ------------ |  | - | --------- | -
|                              |  | September 30,  |           | December 31,
|                              |  | 2002           |           | 2001        
|                              |  |                |           |             
|                              |  | (in thousands)
|Towers                        |  | $              | 2,532,589 |              |  | $ | 2,483,049 |  
|Equipment                     |  |                | 38,942    |              |  |   | 30,261    |  
|Land                          |  |                | 17,975    |              |  |   | 16,378    |  
|Buildings                     |  |                | 30,638    |              |  |   | 32,792    |  
|Other                         |  |                | 43,304    |              |  |   | 38,572    |  
|                              |  |                |           |              |  |   |           |  
|                              |  |                | 2,663,448 |              |  |   | 2,601,052 |  
|Less accumulated depreciation |  |                | (361,057  | )            |  |   | (220,209  | )
|                              |  |                |           |              |  |   |           |  
|                              |  |                | 2,302,391 |              |  |   | 2,380,843 |  
|Construction in progress      |  |                | 23,890    |              |  |   | 62,203    |  
|                              |  |                |           |              |  |   |           |  
|Property and equipment, net   |  | $              | 2,326,281 |              |  | $ | 2,443,046 |  
|                              |  |                |           |              |  |   |           |  

8



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##### 



SPECTRASITE HOLDINGS, INC. AND SUBSIDIARIESNOTES TO THE UNAUDITED CONDENSED CONSOLIDATED FINANCIAL
STATEMENTS

3.     New Accounting Pronouncements

On June 29, 2001, the Financial Accounting Standards Board (FASB) issued
Statements of Financial Accounting Standards No. 141, Business Combinations
(SFAS 141) and No. 142, Goodwill and Other Intangible Assets(SFAS 142).
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. The application of SFAS 141 did not
affect any of our previously reported amounts included in goodwill or other
intangible assets.

Effective January 1, 2002, the Company adopted SFAS 142 which establishes
new accounting and reporting requirements for goodwill and other intangible
assets. 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 ceased amortization on January 1, 2002.

The Company performed the first of the required impairment tests of
goodwill by comparing the fair value of each of our reporting units with its
carrying value. Fair value was determined using a discounted cash flow
methodology. Based on our impairment tests, we recognized an adjustment of
$376.8 million, or $2.45 per share, to reduce the carrying value of goodwill in
our wireless services, broadcast tower, broadcast services and building units
to its implied value. In accordance with SFAS 142, the impairment adjustment
recognized at adoption of the new rules was reflected as a cumulative effect of
accounting change in our first quarter 2002 statement of operations. Impairment
adjustments recognized after adoption, if any, generally are required to be
recognized as an operating expense.

Actual results of operations for the three and nine months ended September
30, 2002 and pro forma results of operations for the three and nine months
ended September 30, 2001 had we applied the nonamortization provisions of SFAS
142 in that period are as follows:

|                                             |                       |   |                    |       |                   |   |                                         |       |      |   |          |       |   |   |          |       |  
|-------------------------------------------- | --------------------- | - | ------------------ | ----- | ----------------- | - | --------------------------------------- | ----- | ---- | - | -------- | ----- | - | - | -------- | ----- | -
|                                             |                       |   | Three Months Ended |       | Nine Months Ended
|                                             |                       |   | September 30,      |       | September 30,    
|                                             |                       |   |                    |       |                  
|                                             |                       |   | 2002               |       | 2001              |   | 2002                                    |       | 2001
|                                             |                       |   |                    |       |                   |   |                                         |       |     
|                                             |                       |   |                    |       |                   |   | (in thousands except per share amounts) |       |      |   |         
|Reported net loss                            |                       | $ | (134,592           | )     |                   | $ | (241,140                                | )     |      | $ | (714,691 | )     |   | $ | (492,071 | )    
|Goodwill amortization                        |                       |   |                   |       |                   |   | 8,603                                   |       |      |   |         |       |   |   | 26,922   |      
|                                             |                       |   |                    |       |                   |   |                                         |       |      |   |          |       |   |   |          |      
|Adjusted net loss                            |                       | $ | (134,592           | )     |                   | $ | (232,537                                | )     |      | $ | (714,691 | )     |   | $ | (465,149 | )    
|                                             |                       |   |                    |       |                   |   |                                         |       |      |   |          |       |   |   |          |      
|Basic and diluted earnings (loss) per share: |                       |   |                    |       |                   |   |                                         |       |      |   |          |       |   |   |          |      
|                                             | Reported net loss     |   | $                  | (0.87 | )                 |   | $                                       | (1.59 | )    |   | $        | (4.64 | ) |   | $        | (3.30 | )
|                                             | Goodwill amortization |   |                    |      |                   |   |                                         | 0.05  |      |   |          |      |   |   |          | 0.18  |  
|                                             |                       |   |                    |       |                   |   |                                         |       |      |   |          |       |   |   |          |      
|                                             | Adjusted net loss     |   | $                  | (0.87 | )                 |   | $                                       | (1.54 | )    |   | $        | (4.64 | ) |   | $        | (3.12 | )
|                                             |                       |   |                    |       |                   |   |                                         |       |      |   |          |       |   |   |          |      

In June 2001, FASB issued Statement of Financial Accounting Standards No.
143, Accounting for Asset Retirement Obligations(SFAS 143). SFAS 143
requires that the fair value of a liability for an asset retirement obligation
be recognized in the period in which it is incurred if a reasonable estimate of
fair value can be made. The associated asset retirement costs are capitalized
as part of the carrying amount of the long-lived asset. The Company is
required to adopt SFAS 143 on January 1, 2003, in connection
with some ground leases which require removal of the tower upon
expiration. Due to the significant number of
communications towers that the Company maintains and the extensive number of
documents that must be reviewed and estimates that must be made to assess the
effects of SFAS 143, the expected impact of adoption of SFAS 143 on the
Companys financial position or results of operations has not yet been
determined.

In August 2001, FASB issued Statement of Financial Accounting Standards
No. 144, Accounting for the Impairment or Disposal of Long-Lived Assets(SFAS
144). SFAS 144 addresses financial accounting and reporting for the impairment
or disposal of long-lived assets and supersedes SFAS 121, Accounting for the
Impairment of Long-Lived Assets and for Long-Lived Assets to be Disposed Ofand
the accounting and reporting provisions of APB Opinion No. 30, Reporting the
Results of Operations for a Disposal of a Segment of a Business. The Company
adopted SFAS 144 as of January 1, 2002.

9



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##### 



SPECTRASITE HOLDINGS, INC. AND SUBSIDIARIESNOTES TO THE UNAUDITED CONDENSED CONSOLIDATED FINANCIAL
STATEMENTS

4. Acquisition Activities

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
(collectively, SBC) in exchange for $982.7 million in cash and $325.0 million
in common stock. Under the agreement, and assuming the sublease of all 3,900
towers, the stock portion of the consideration was initially approximately 14.3
million shares valued at $22.74 per share. The stock consideration is subject
to an adjustment payment to the extent the average closing price of
SpectraSites common stock during the 60-day period immediately preceeding
December 14, 2003 (the third anniversary of the initial closing) decreases from
$22.74 down to a floor of $12.96. The adjustment payment may be accelerated if
there is a change of control of SpectraSite or upon the occurrence of certain
specified liquidity events. In any case, the adjustment payment is payable, at
the Companys option, in the form of cash or shares of common stock. The
maximum amount potentially payable to satisfy the adjustment payment is
approximately 10.8 million shares of common stock or $139.8 million in cash.
The Company and SBC entered into a Lease and Sublease Agreement pursuant to
which the Company manages, maintains and leases available space on the SBC
towers and has the right to co-locate tenants on the towers. SBC is an anchor
tenant on all of the towers and pays a monthly fee per tower of $1,470, subject
to an annual adjustment. In addition, the Company had agreed to build towers
for Cingular, an affiliate of SBC, through 2005 under an exclusive
build-to-suit agreement, but this agreement was terminated on
May 15, 2002.

On November 14, 2001, the Company completed an amendment to the SBC
acquisition agreements. This amendment reduced the maximum number of towers
that the Company will lease or sublease by 300 towers, from 3,900 in the
original agreement to 3,600 towers in the agreement as amended. From the
initial closing on December 14, 2000 through a closing on February 25, 2002,
the Company leased or subleased a total of 2,706 towers under the terms of the
amended agreement. The parties agreed to complete the lease or sublease of the
remaining 894 towers during the period beginning April 2003 and ending January
2004. In addition, pursuant to the amendment, the Company receives all new
co-location revenue on the towers remaining to be subleased after February 25,
2002. The amendment also extends the December 14, 2003 stock adjustment date to
the last date on which towers will be subleased, which is expected to be
January 1, 2004. In the nine months ended September 30, 2002, the Company
subleased 41 towers, for which it paid $10.1 million in cash and issued 146,569
shares of common stock valued at $1.7 million.

On May 15, 2002, the Company entered into agreements with SBC and Cingular
Wireless LLC (Cingular) to terminate its build-to-suit agreement, transfer
Communications lease or sublease interests in certain SBC towers to Cingular
and reduce Communications future sublease commitment. The transaction (except
the termination of the build-to-suit agreement, which became effective
immediately) was subject to the successful consummation of the Refinancing
Transactions (described in Note 5) or other similar transactions that reduce
SpectraSites indebtedness by at least $200 million, the consent of
SpectraSites bank credit facility lenders and other customary closing
conditions. The closing conditions were not all met by August 15, 2002, and
the transactions (except the termination of the build-to-suit agreement) have not
closed. Completion of SpectraSites restructuring plan (described in Note 8) is
subject to the completion of a transaction with either Cingular or SBC subject
to approval by the holders of the SpectraSite Notes who are party to the Forbearance and
Lock-Up Agreements (described in Note 8).

As of September 30, 2002, the Company has issued approximately 9.9 million
shares of common stock to SBC pursuant to the SBC acquisition agreements.
Assuming the sublease of all 3,600 towers, the Company will be required to
issue to SBC an additional 3.3 million shares to complete the lease or sublease
of the remaining 894 towers, for a total of approximately 13.2 million shares.
Based on the closing market price of the Companys common stock on September
30, 2002, the Company would be required to issue approximately 10 million
additional shares of common stock to SBC under the stock adjustment provisions
described above.

5.     Financing Transactions

Credit Facility

SpectraSite Communications, Inc. (Communications), a wholly-owned
subsidiary of SpectraSite, is party to an amended and restated credit facility.
In August 2002, Communications amended its credit facility to provide, among
other things, for a reduction in the aggregate borrowing capacity from $1.3
billion to $1.085 billion. The August 2002 amendment also provides for an
overall loosening of certain of the credit facilitys financial covenants until
the earlier of September 30, 2003 or the date that SpectraSite completes an
acceptable restructuring of its high yield indebtedness (as defined in the
credit agreement) and an increase in the interest rates under the credit
facility by 50 basis points per annum until SpectraSite completes an acceptable
restructuring of

10



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##### 



SPECTRASITE HOLDINGS, INC. AND SUBSIDIARIESNOTES TO THE UNAUDITED CONDENSED CONSOLIDATED FINANCIAL
STATEMENTS

its high yield indebtedness. The credit facility includes a $300.0 million
revolving credit facility, which may be drawn at any time, subject to the
satisfaction of certain conditions precedent (including the absence of a
materially adverse effect (as defined in the credit agreement) and the
absence of any defaults). The amount available will be reduced (and, if
necessary, the amounts outstanding must be repaid) in quarterly installments
beginning on June 30, 2004 and ending on June 30, 2007. The credit facility
also includes a $335.0 million multiple draw term loan that is fully drawn and
which must be repaid in quarterly installments beginning on June 30, 2005 and
ending on June 30, 2007 and a $450.0 million term loan that is fully drawn and
which will, from September 30, 2003 through June 30, 2007, amortize at a rate
of 0.25% 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 $785.0
million outstanding under the credit facility at September 30, 2002. The
remaining $300.0 million under the credit facility was undrawn. Under the terms
of the credit facility, the Company could borrow approximately
$147 million of
available funds under the revolving credit facility as of September 30, 2002
while remaining in compliance with the credit agreement's covenants.

Prior to the date that SpectraSite completes an acceptable restructuring
of its high yield indebtedness, the revolving credit loans and the multiple
draw term loans bear interest, at its option, at either Canadian Imperial Bank
of Commerces base rate plus an applicable margin of 2.50% per annum or the
Eurodollar rate plus an applicable margin of 3.75% per annum. After the date
of such a restructuring, the revolving credit loans and the multiple draw term
loans bear interest, at Communications option, at either Canadian Imperial
Bank of Commerces base rate plus an applicable margin ranging from 2.00% to
1.00% per annum or the Eurodollar rate plus an applicable margin ranging from
3.25% to 2.25% per annum, depending on Communications leverage ratio at the
end of the preceding fiscal quarter.

Prior to the date that SpectraSite completes an acceptable restructuring
of its high yield indebtedness, the term loan bears interest, at its option, at
either Canadian Imperial Bank of Commerces base rate plus 3.25% per annum or
the Eurodollar rate plus 4.50% per annum. After the date of such a
restructuring, the term loan bears interest, at Communications option, at
either Canadian Imperial Bank of Commerces base rate plus 2.75% per annum or
the Eurodollar rate plus 4.00% per annum.

Communications is required to pay a commitment fee of between 1.375% and
0.500% per annum in respect of the undrawn portions of the revolving credit
facility, depending on the undrawn amount. Communications may be required to
prepay the credit facility in part upon the occurrence of certain events, such
as a sale of assets, the incurrence of certain additional indebtedness, certain
changes to the SBC transaction or the generation of excess cash flow.

SpectraSite and each of Communications domestic subsidiaries have
guaranteed the obligations under the credit facility. The credit facility is
further secured by substantially all the tangible and intangible assets of
Communications and its domestic subsidiaries, 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 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. In addition, the 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.

Two of the banks in
the eighty member bank group have advised Communications and the
agent for the banks that they are of the view that the conditions to
funding under the credit facility are not currently met. In addition,
one of those two banks has also asserted that the August 2002
amendment is not effective. The Company disagrees with these
positions, believes the August 2002 amendment is effective and all of
the conditions to funding are currently satisfied and expects all of
the banks to honor all of their obligations under the credit
agreement. The agent and the other lead arranger for the banks have
advised the banks and Communications that they disagree with the
positions of those two banks.

Senior Notes

SpectraSite did not pay $10.8 million of interest due September 15, 2002
on its 10 3/4% senior notes. On October 15, 2002, the 30-day grace period
for such non-payment expired, creating an event of default that is continuing.
In addition, SpectraSite announced that it has reached agreements with
beneficial holders of approximately 66% of the SpectraSite Notes to support a
restructuring plan as discussed in Note 8. As a result, $400 million principal
amount of Senior Notes, $1.113 billion accreted value of Senior Discount Notes,
$200 million of Senior Convertible Notes and accrued interest of $26.3 million
have been classified as current liabilities in the unaudited balance sheet as
of September 30, 2002.

11



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SPECTRASITE HOLDINGS, INC. AND SUBSIDIARIESNOTES TO THE UNAUDITED CONDENSED CONSOLIDATED FINANCIAL
STATEMENTS

Refinancing Transactions

In May 2002, the Company proposed a series of transactions (the
Refinancing Transactions) as part of an effort to reduce commitments for
capital expenditures, reduce indebtedness and reduce ongoing interest payments.
These included the agreements with SBC and Cingular described in Note 4
Acquisition Activities. In connection with the Refinancing Transactions,
SpectraSite created a new, wholly-owned subsidiary, SpectraSite Intermediate
Holdings, LLC (Intermediate Holdings). SpectraSite and Intermediate Holdings
entered into a Funding Agreement pursuant to which SpectraSite and Intermediate
Holdings agreed to issue to certain affiliates of up to $350 million aggregate
principal amount of secured convertible term notes (the New Term Notes). Of
the proceeds from the issuance of the New Term Notes, $10 million were to be
used to refinance indebtedness under Communications existing credit facility.
The remainder was to be used to fund purchases of SpectraSites outstanding
Senior Notes and Senior Discount Notes pursuant to tender offers (the Tender
Offers) or in the open market.

SpectraSite and Intermediate Holdings also commenced offers to exchange
(the Exchange Offers) up to $75 million of new notes to be issued by
SpectraSite and Intermediate Holdings (the Exchange Notes) for Senior Notes
and Senior Discount Notes outstanding following the Tender Offers.

In connection with the execution of the Funding Agreement on May 15, 2002,
SpectraSite paid certain affiliates of Welsh Carson (the Lenders) a fee of
$2.6 million, equal to 0.75% of the aggregate principal amount of New Term
Notes that the Lenders had committed to fund. SpectraSite also paid the
Lenders $2.6 million related to their expenses associated with the Funding
Agreement.

On July 12, 2002 SpectraSite, Intermediate Holdings and the Lenders
terminated the Funding Agreement. Also on that day, the Tender Offers expired
without being consummated and the Exchange Offers (which were conditioned on
the successful completion of the Tender Offers) were terminated. The Company
has recorded $11.2 million related to expenses incurred in connection with the
terminated Refinancing Transactions in other expenses in the statement of
operations for the nine months ended September 30, 2002.

The Funding Agreement provides that if SpectraSite commences or enters
into an alternative transaction which restructures, repurchases or retires at
least $200 million in aggregate face value of its indebtedness before January
12, 2003, then the Lenders have the right to provide all or a portion of the
financing required to fund such alternative transaction. This financing would
be provided on the same terms as agreed to in the Funding Agreement. In
addition, if the alternative transaction does not require at least $100 million
of financing, then SpectraSite would be required to pay an additional fee of
$10.5 million to the Lenders. Any such fee would be a general unsecured claim
in the bankruptcy case contemplated by the reorganization (described
in Note 8).

6.     Assets Held for Sale and Discontinued Operations

During the third quarter of 2002, the Company decided to sell its network
services division. The transaction is expected to occur prior to
December 31,
2002. There can be no assurance that the Company will reach an
acceptable agreement with respect to such transaction or that such
transaction will be completed by the expected date. Network services revenues for the three months ended September 30, 2001
and 2002 were $55.9 million and $30.2 million, respectively. Revenues for the
nine months ended September 30, 2001 and 2002 were $154.6 million and $107.8
million, respectively. In conjunction with the proposed sale, the Company
recorded a provision for the estimated loss on disposal of the network services
division of $45.6 million. The results of the network services operations
have been reported separately as discontinued operations in the Statements of
Operations. Prior period financial statements have been restated to present
the operations of the division as a discontinued operation.

In August 2002, the Company retained Lazard Freres to assist in the sale
of the network services division. Lazard conducted an auction process with
twelve participants to determine the net realizable value of the division. The
assets and liabilities of the discontinued operations have been recorded at
their estimated net realizable value based on tentative sale negotiations in
the accompanying balance sheets; however, there can be no assurance that a
transaction will be completed on that basis. Assets and liabilities held for
sale consist of the following:

12



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##### 



SPECTRASITE HOLDINGS, INC. AND SUBSIDIARIESNOTES TO THE UNAUDITED CONDENSED CONSOLIDATED FINANCIAL
STATEMENTS

|                                                   |                           |   |                |        |              |   |        |         | 
|-------------------------------------------------- | ------------------------- | - | -------------- | ------ | ------------ | - | ------ | ------- | 
|                                                   |                           |   | September 30,  |        | December 31,
|                                                   |                           |   | 2002           |        | 2001        
|                                                   |                           |   |                |        |             
|                                                   |                           |   | (in thousands)
|Accounts receivable                                |                           | $ | 12,062         |        |              | $ | 68,401 |        
|Costs and estimated earnings in excess of billings |                           |   | 5,981          |        |              |   | 18,464 |        
|Inventories                                        |                           |   | 2,371          |        |              |   | 6,036  |        
|Prepaid expenses and other                         |                           |   | 272            |        |              |   | 264    |        
|Property and equipment, net                        |                           |   | 5,980          |        |              |   | 19,057 |        
|Other assets                                       |                           |   | 69             |        |              |   | 793    |        
|                                                   |                           |   |                |        |              |   |        |        
|                                                   | Assets held for sale      |   | $              | 26,735 |              |   | $      | 113,015 | 
|                                                   |                           |   |                |        |              |   |        |        
|Accounts payable                                   |                           | $ | 7,790          |        |              | $ | 17,977 |        
|Accrued and other expenses                         |                           |   | 8,425          |        |              |   | 7,575  |        
|Billings in excess of costs and estimated earnings |                           |   | 1,727          |        |              |   | 7,737  |        
|Other long-term liabilities                        |                           |   | 1,738          |        |              |   | 2,813  |        
|                                                   |                           |   |                |        |              |   |        |        
|                                                   | Liabilities held for sale |   | $              | 19,680 |              |   | $      | 36,102  | 
|                                                   |                           |   |                |        |              |   |        |        

7.     Business Segments

Prior to its decision to sell its network services division, the Company
operated in two business segments: site leasing and network services. As a
result of the decision to sell network services, the Company has changed its
internal organization so that it now operates in two new business segments:
wireless and broadcast. Prior period information has been restated to conform
to the current organization. The wireless segment provides for leasing and
subleasing of antenna sites on multi-tenant towers for a diverse range of
wireless communication services. The broadcast segment offers leasing and
subleasing of antenna sites for broadcast communication services and a broad
range of broadcast development services, including broadcast tower design and
construction and antenna installation.

In evaluating financial performance, management focuses on operating
profit (loss), excluding depreciation and amortization and restructuring and
non-recurring 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 nine months ended September 30, 2002 and 2001 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 that have not been allocated to a specific segment.

|                                                             |  |          |           |           |  |                |         |       |  |   |          |   |  |   |           |  
|------------------------------------------------------------ |  | -------- | --------- | --------- |  | -------------- | ------- | ----- |  | - | -------- | - |  | - | --------- | -
|                                                             |  | Wireless |           | Broadcast |  | Other          |         | Total
|                                                             |  |          |           |           |  |                |         |      
|                                                             |  |          |           |           |  | (in thousands) |         |       |  |  
|Three months ended September 30, 2002                        |  |          |           |           |  |                |         |       |  |   |          |   |  |   |           |  
|Revenues                                                     |  | $        | 66,196    |           |  | $              | 13,144  |       |  | $ |         |   |  | $ | 79,340    |  
|Income (loss) from continuing operations before income taxes |  |          | 32,790    |           |  |                | 5,458   |       |  |   | (121,142 | ) |  |   | (82,894   | )
|Assets                                                       |  |          | 2,237,848 |           |  |                | 166,880 |       |  |   | 217,905  |   |  |   | 2,622,633 |  
|Three months ended September 30, 2001                        |  |          |           |           |  |                |         |       |  |   |          |   |  |   |           |  
|Revenues                                                     |  | $        | 55,541    |           |  | $              | 11,049  |       |  | $ |         |   |  | $ | 66,590    |  
|Income (loss) from continuing operations before income taxes |  |          | 23,348    |           |  |                | 2,675   |       |  |   | (269,932 | ) |  |   | (243,909  | )
|Assets                                                       |  |          | 2,272,259 |           |  |                | 139,763 |       |  |   | 756,241  |   |  |   | 3,168,263 |  
|Nine months ended September 30, 2002                         |  |          |           |           |  |                |         |       |  |   |          |   |  |   |           |  
|Revenues                                                     |  | $        | 192,253   |           |  | $              | 35,360  |       |  | $ |         |   |  | $ | 227,613   |  
|Income (loss) from continuing operations before income taxes |  |          | 95,086    |           |  |                | 12,266  |       |  |   | (390,664 | ) |  |   | (283,312  | )
|Assets                                                       |  |          | 2,237,848 |           |  |                | 166,880 |       |  |   | 217,905  |   |  |   | 2,622,633 |  
|Nine months ended September 30, 2001                         |  |          |           |           |  |                |         |       |  |   |          |   |  |   |           |  
|Revenues                                                     |  | $        | 149,877   |           |  | $              | 37,224  |       |  | $ |         |   |  | $ | 187,101   |  
|Income (loss) from continuing operations before income taxes |  |          | 60,924    |           |  |                | 6,986   |       |  |   | (564,236 | ) |  |   | (496,326  | )
|Assets                                                       |  |          | 2,272,259 |           |  |                | 139,763 |       |  |   | 264,436  |   |  |   | 3,168,263 |  

13



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##### 



SPECTRASITE HOLDINGS, INC. AND SUBSIDIARIESNOTES TO THE UNAUDITED CONDENSED CONSOLIDATED FINANCIAL
STATEMENTS

8.     Reorganization Proceedings

On November 6, 2002, SpectraSite Holdings, Inc. announced that it has
reached agreements with beneficial holders of approximately 66% of
the SpectraSite Notes to support a restructuring plan (the Forbearance and Lock-Up
Agreements). Under the agreed terms of the plan, 100% of SpectraSite Holding,
Inc.s existing debt will be exchanged for 100% of the reorganized SpectraSite
Holdings, Inc.s new common stock, subject to dilution from warrants to purchase new common stock to be issued to
the existing common stock holders in exchange for their existing
common stock and by options to be issued to management to buy new common stock under a new stock option plan.

The restructuring plan will involve SpectraSite Holdings, Inc. and not
SpectraSite Communications, Inc. or any of SpectraSite Communications, Inc.s
subsidiaries. The restructuring plan is also not currently expected to
adversely affect SpectraSite Communications, Inc.s credit facility, which will
continue to be serviced from operating cash flow by SpectraSite Communications,
Inc. The restructuring plan will not result in a default under the credit
facility unless SpectraSite Communications, Inc. is unable to show projected
compliance with the credit agreement upon completion of the restructuring plan.
To implement the plan, SpectraSite Holdings, Inc. will file in Federal court a
pre-arranged Plan of Reorganization under Chapter 11 of the U.S. Bankruptcy
Code. The agreements with the holders
of the SpectraSite Notes will terminate if the Plan is not filed by
November 15, 2002, which date may be extended by the parties to
the agreements.

14



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

Business Overview

We are one of the largest wireless tower operators in the United States
and a leading provider of construction services to the broadcast industry in
the United States. Our businesses include the ownership and leasing of antenna
sites on towers, managing rooftop and in-building telecommunications access on
commercial real estate and designing, constructing, modifying and maintaining
broadcast towers in the U.S. As of September 30, 2002, we owned or operated
7,999 towers as compared to 7,925 towers at December 31, 2001.

During the third quarter of 2002, we decided to sell our network services
division. The transaction is expected to occur prior to
December 31, 2002.
There can be no assurance that we will reach an acceptable agreement
with respect to such transaction or that such transaction will be
completed by the expected date. Network services revenues for the three months ended September 30, 2001 and
2002 were $55.9 million and $30.2 million, respectively. Revenues for the nine
months ended September 30, 2001 and 2002 were $154.6 million and $107.8
million, respectively. In conjunction with the proposed sale, we recorded a
provision for the estimated loss on disposal of the network services division
of $45.6 million. The results of the network services operations have been
reported separately as discontinued operations in the Statements of Operations.
Prior period financial statements have been restated to present the operations
of the division as a discontinued operation.

On November 6, 2002, SpectraSite Holdings, Inc announced that it has
reached agreements with beneficial holders of approximately 66% of its senior
notes (the Senior Notes),
its senior discount notes (the Senior Discount Notes) and
its senior convertible notes (the Senior Convertible
Notes, and together with the Senior Notes and Senior Discount
Notes, the SpectraSite Notes) to support a restructuring plan. Under the agreed terms of the plan,
100% of SpectraSite Holdings, Inc.s existing debt will be exchanged for 100%
of the reorganized SpectraSite Holdings, Inc.s common
stock, subject to dilution from warrants to purchase new common stock
to be issued to the existing common stock holders in exchange
for their existing common stock and by options to be issued to
management to buy new
common stock under a new stock option plan.

The restructuring plan will involve SpectraSite Holdings, Inc. and not
SpectraSite Communications, Inc. or any of SpectraSite Communications, Inc.s
subsidiaries. The restructuring plan is also not currently expected
to constitute an event of default under or otherwise adversely affect
SpectraSite Communications, Inc.s credit facility, which will continue to be
serviced from operating cash flow by SpectraSite Communications, Inc. To
implement the restructuring plan, SpectraSite Holdings, Inc. will file in
Federal court a pre-arranged Plan of Reorganization under Chapter 11 of the
U.S. Bankruptcy Code. The agreements with the holders of the
SpectraSite Notes will
terminate if the Plan is not filed by November 15, 2002, which
date may be extended by the parties to the agreements.

This discussion contains forward-looking statements, including statements
concerning possible or assumed future results of operations and liquidity. 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 in our report on Form 10-K for the year ended December 31, 2001
under Item 1a. Risk Factors, 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 leverage and capital requirements, even after implementation of the restructuring plan;                                                       
| | - |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------
|
| |  |  | dependence on demand for wireless communications;                                                                                                         
|
| |  |  | the success of our tower construction program;                                                                                                            
|
| |  |  | our ability to co-locate additional tenants on our towers;                                                                                                
|
| |  |  | 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 and technological innovation;                                                                
|
| |  |  | 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.                                           

15



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Acquisition Activity

2002 Acquisitions

SBC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 (collectively, SBC) in exchange
for $982.7 million in cash and $325.0 million in common stock. Under the
agreement, and assuming the sublease of all 3,900 towers, the stock portion of
the consideration was initially approximately 14.3 million shares valued at
$22.74 per share. The stock consideration is subject to an adjustment payment
to the extent the average closing price of SpectraSites common stock during
the 60-day period immediately preceding December 14, 2003 (the third
anniversary of the initial closing) decreases from $22.74 down to a floor of
$12.96. The adjustment payment may be accelerated if there is a change of
control of SpectraSite or upon the occurrence of certain specified liquidity
events. In any case, the adjustment payment is payable by us, at our option, in
the form of cash or shares of our common stock. The maximum amount potentially
payable by us to satisfy the adjustment payment is approximately 10.8 million
shares of common stock or $139.8 million in cash. We and SBC entered into a
Lease and Sublease Agreement pursuant to which we manage, maintain and lease
available space on the SBC towers and have the right to co-locate tenants on
the towers. SBC is an anchor tenant on all of the towers and pays a monthly fee
per tower of $1,470, subject toan annual adjustment. In addition, we had agreed
to build towers for Cingular, an affiliate of SBC, through 2005, under an
exclusive build-to-suit agreement, but this agreement was terminated on May 15,
2002.

On November 14, 2001, we completed an amendment to the SBC acquisition
agreements. This amendment reduced the maximum number of towers that we will
lease or sublease by 300 towers, from 3,900 in the original agreement to 3,600
towers in the agreement as amended. From the initial closing on December 14,
2000 through a closing on February 25, 2002, we leased or subleased a total of
2,706 towers and under the terms of the amended agreement, the parties agreed
to complete the lease or sublease of the remaining 894 towers during the period
beginning April 2003 and ending January 2004. In addition, pursuant to the
amendment, we will receive all new co-location revenue on the towers remaining
to be subleased after February 25, 2002. The amendment also extends the
December 14, 2003 stock adjustment date to the last date on which towers will
be subleased, which is expected to be January 1, 2004. In the nine months ended
September 30, 2002, we subleased 41 towers, for which we paid $10.1 million in
cash and issued 146,569 shares of common stock valued at $1.7 million.

As of September 30, 2002, we have issued approximately 9.9 million shares
of common stock to SBC pursuant to the SBC acquisition agreements. Assuming the
sublease of all 3,600 towers, we will be required to issue to SBC an additional
3.3 million shares to complete the lease or sublease of the remaining 894
towers, for a total of approximately 13.2 million shares. Based on the closing
market price of our common stock on September 30, 2002, we would be required to
issue approximately 10 million additional shares of common stock to SBC under
the stock adjustment provisions described above.

Results of Operations

Three months ended September 30, 2002 compared to the results for the three
months ended September 30, 2001.

Consolidated revenues for the three months ended September 30, 2002 were
$79.3 million, an increase of $12.8 million from the three months ended
September 30, 2001. Revenues from site leasing increased to $72.0 million for
the three months ended September 30, 2002 from $58.2 million for the three
months ended September 30, 2001. The increase was primarily as a result of
incremental revenue in 2002 from new co-location tenants on towers that were
part of our portfolio on September 30, 2001 and revenues derived from towers
acquired or built subsequent to September 30, 2001. During the three months
ended September 30, 2002, we executed 13 leases for new tenants on new towers
representing annualized revenue of $0.4 million upon lease commencement. We
executed 293 leases for new tenants on existing towers representing annualized
revenue of $5.8 million upon lease commencement. In addition, we increased
annualized revenues from existing tenants on existing towers by $2.7 million,
including $0.3 million related to rent escalation provisions of existing
leases. Existing tenants terminated 38 leases representing annualized revenue
of $0.5 million. Same tower revenue growth, based on trailing twelve-months
revenue on the towers that we owned as of September 30, 2001 was 18%, and same
tower cash flow increased 34%. We owned or operated 7,999 communications towers
at September 30, 2002 compared to 7,550 communications towers at September 30,
2001.

Revenues from broadcast services decreased to $7.3 million for the three
months ended September 30, 2002 compared to $8.4 million in the three months
ended September 30, 2001. The decrease was primarily due to a change in the
service mix from large broadcast tower installations to smaller broadcast tower
modifications resulting in lower tower fabrication revenues.

16



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Costs of operations increased to $32.7 million for the three months ended
September 30, 2002 from $30.8 million for the three months ended September 30,
2001. Costs of operations for site leasing as a percentage of site leasing
revenues decreased to 38.1% for the three months ended September 30, 2002 from
42.4% for the three months ended September 30, 2001. This decline was the
result of lower average tower maintenance and repair costs as our network
services group personnel began performing all such work in early 2002. In
addition, the increase in site leasing revenues described above contributed to
the improvement in the cost of operations percentage. 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 increases in cash flow because a significant proportion of
tower operating costs are fixed and do not increase with additional tenants.

Assuming commencement of all executed leases and based on estimated normal
recurring tower operating expenses, annualized revenue per tower and estimated
tower cash flow margins per tower are as follows at September 30, 2002:

|              |      |                  |       |           |  |                    |        |                 |  |  |      |      |  
|------------- | ---- | ---------------- | ----- | --------- |  | ------------------ | ------ | --------------- |  |  | ---- | ---- | -
|Year of Tower |      |                  |       |           |  | Annualized Revenue |        | Tower Cash Flow
|Acquisition   |      | Number of Towers |       | Per Tower |  | Margin            
|              |      |                  |       |           |  |                   
|              | 1998 |                  |       | 107       |  |                    | $      | 46,834          |  |  |      | 73.4 | %
|              | 1999 |                  |       | 2,646     |  |                    | $      | 41,537          |  |  |      | 67.3 | %
|              | 2000 |                  |       | 2,234     |  |                    | $      | 37,518          |  |  |      | 63.5 | %
|              | 2001 |                  |       | 2,903     |  |                    | $      | 30,290          |  |  |      | 61.8 | %
|              | 2002 |                  |       | 109       |  |                    | $      | 41,232          |  |  |      | 66.7 | %
|              |      |                  |       |           |  |                    |        |                 |  |  |      |     
|Total         |      |                  | 7,999 |           |  | $                  | 36,400 |                 |  |  | 64.7 | %   
|              |      |                  |       |           |  |                    |        |                 |  |  |      |     

Costs of operations for broadcast services as a percentage of broadcast
services revenues decreased to 71.5% for the three months ended September 30,
2002 from 72.7% for the three months ended September 30, 2001, primarily due to
cost savings initiated in early 2002.

Selling, general and administrative expenses decreased to $14.2 million
for the three months ended September 30, 2002 from $17.9 million for the three
months ended September 30, 2001. Selling, general and administrative expenses
as a percentage of revenues decreased to 17.8% for the three months ended
September 30, 2002 from 26.8% for the three months ended September 30, 2001.
Selling, general and administrative expenses decreased in amount and as a
percentage of revenues as a result of significant cost cutting measures
implemented in the second half of 2001 and early in 2002.

Depreciation and amortization expense increased to $48.7 million for the
three months ended September 30, 2002 from $43.9 million for the three months
ended September 30, 2001. The increase was primarily as a result of the
increased depreciation from the towers we have acquired or constructed
partially offset by the $8.6 million reduction in goodwill amortization as a
result of the adoption of SFAS 142. See - Description of Critical Accounting
Policies-Goodwill.

Interest income decreased to $0.1 million for the three months ended
September 30, 2002 from $1.2 million in the three months ended September 30,
2001 due to lower cash balances on hand and lower interest rates. Interest
expense increased to $67.0 million during the three months ended September 30,
2002 from $54.0 million for the three months ended September 30, 2001. The
increase was due to the write-off of $4.4 million of debt issuance costs
related to the decrease in the maximum availability of the credit facility and
increased amounts outstanding under our credit facility.

Other income (expense) was a net other income of $2.0 million in the three
months ended September 30, 2002. Of this amount, $3.2 million was related to
the gain on sale of assets and $1.4 million was related to the gain on the sale
of our interest in Concourse Communications, LLC. These gains were partially
offset by $2.0 million related to expenses associated with the proposed
Refinancing Transactions. Other income (expense) was a net expense of $165.2
million in the three months ended September 30, 2001. Of this amount, $42.6
million related to losses from investments in affiliates accounted for under
the equity method, primarily the investment in SpectraSite-Transco
Communications, Ltd. and $121.9 million related to the write-down of our
investment in SpectraSite-Transco to its realizable value. We completed the
sale of our interest in SpectraSite-Transco in October 2001.

Loss from operations of discontinued segment was $5.5 million in the three
months ended September 30, 2002 compared to income from operations of
discontinued segment of $3.1 million in the three months ended September 30,
2001. The loss from operations in 2002 was primarily due to lower revenues,
fixed costs that did not decline as revenues did and a competitive environment
for these services that led to lower pricing.

17



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Nine months ended September 30, 2002 compared to the results for the nine
months ended September 30, 2001.

Consolidated revenues for the nine months ended September 30, 2002 were
$227.6 million, an increase of $40.5 million from the nine months ended
September 30, 2001. Revenues from site leasing increased to $207.6 million for
the nine months ended September 30, 2002 from $157.6 million for the nine
months ended September 30, 2001. The increase was primarily a result of
incremental revenue in 2002 from new co-location tenants on towers that were
part of our portfolio on September 30, 2001 and revenues derived from towers
acquired or built subsequent to September 30, 2001. We owned or operated 7,999
communications towers at September 30, 2002 compared to 7,550 communications
towers at September 30, 2001.

Revenues from broadcast services decreased to $20.0 million for the nine
months ended September 30, 2002 compared to $29.5 million in the nine months
ended September 30, 2001. The decrease was primarily due to a change in the
service mix from large broadcast tower installations to smaller value broadcast
tower modifications resulting in lower tower fabrication revenues.

Costs of operations increased to $95.3 million for the nine months ended
September 30, 2002 from $87.7 million for the nine months ended September 30,
2001. Costs of operations for site leasing as a percentage of site leasing
revenues decreased to 38.4% for the nine months ended September 30, 2002 from
41.2% for the nine months ended September 30, 2001. This decline was the result
of lower average tower maintenance and repair costs as our network services
group personnel began performing all such work in early 2002. In addition, the
increase in site leasing revenues described above contributed to the
improvement in the cost of operations percentage. 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 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 broadcast services as a percentage of broadcast
services revenue increased to 78.0% for the nine months ended September 30,
2002 from 76.9% for the nine months ended September 30, 2001 primarily due to
lower revenue volumes in 2002.

Selling, general and administrative expenses decreased to $45.1 million
for the nine months ended September 30, 2002 from $55.8 million for the nine
months ended September 30, 2001. Selling, general and administrative expenses
as a percentage of revenues decreased to 19.8% for the nine months ended
September 30, 2002 from 29.8% for the nine months ended September 30, 2001.
Selling, general and administrative expenses decreased in amount and as a
percentage of revenues as a result of significant cost cutting measures
implemented in the second half of 2001 and early in 2002.

Depreciation and amortization expense increased to $143.9 million for the
nine months ended September 30, 2002 from $113.4 million for the nine months
ended September 30, 2001. This increase was primarily as a result of the
increased depreciation from the towers we have acquired or constructed
partially offset by the $26.4 million reduction in goodwill amortization as a
result of the adoption of SFAS 142. See - Description of Critical Accounting
Policies-Goodwill.

In May 2002, we announced that we would terminate our build-to-suit
programs with Cingular and other carriers and implement other cost-cutting
measures. As a result of these actions, we recorded restructuring charges of
$24.3 million. Of this amount, $16.4 million was related to the write-off of
work in progress related to sites in development that we plan to terminate,
$3.2 million was related to the costs of closing offices and $4.7 million was
related to the costs of employee severance. In addition, we recorded a
non-recurring charge of $4.3 million to write-down the carrying value of 21
towers that are not marketable.

Non-recurring charges for the nine months ended September 30, 2001 were
$72.3 million, consisting of $35.8 million in non-recurring charges relating to
our rooftop management operations, $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.

Interest income decreased to $0.5 million for the nine months ended
September 30, 2002 from $16.2 million in the nine months ended September 30,
2001 due to lower cash balances on hand and lower interest rates. Interest
expense increased to $187.5 million during the nine months ended September 30,
2002 from $155.7 million for the nine months ended September

18



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30, 2001. The increase was due to the write-off of $4.4 million of debt
issuance costs related to the decrease in the maximum availability of the
credit facility and increased amounts outstanding under our credit facility
partially offset by lower interest rates on the credit facility.

Other income (expense) was a net expense of $9.2 million in the nine
months ended September 30, 2002. Of this amount, $11.2 million was related to
expenses associated with the proposed Refinancing Transactions. These expenses
were partially offset by gains on the sale of assets and our interests in
Concourse. Other income (expense) was a net expense of $214.7 million in the
nine months ended September 30, 2001. Of this amount, $61.8 million related to
losses from investments accounted for under the equity method, primarily the
investment in SpectraSite-Transco, $121.9 million related to the write-down of
our investment in SpectraSite-Transco and $20.0 million related to the
write-off of a loan to SpectraSite-Transco. We completed the sale of our
interest in SpectraSite-Transco in October 2001. In addition, $7.5 million
related to a write-off of the Companys investment in Evolution Holdings, Inc.,
a network services company that ceased operations in the second quarter of
2001.

Loss from operations of discontinued segment was $8.3 million in the nine
months ended September 30, 2002 compared to income from operations of
discontinued segment of $4.8 million in the nine months ended September 30,
2001. The loss from operations in 2002 was primarily due to lower revenues,
fixed costs that did not decline as revenues did and a more competitive
environment for these services which led to lower pricing and restructuring
charges.

Liquidity and Capital Resources

SpectraSite Holdings, Inc. is a holding company whose only significant
asset is the outstanding capital stock of its subsidiary, SpectraSite
Communications. SpectraSites only source of cash to pay interest on and
principal of our indebtedness is distributions from SpectraSite Communications.

Cash Flows

For the nine months ended September 30, 2002, cash flows provided by
operating activities were $1.5 million as compared to $16.4 million in the nine
months ended September 30, 2001. The change is primarily attributable to
increased interest payments and decreased accounts payable partially offset by
decreased accounts receivable and increased favorable cash flow generated from
earnings before interest, non-recurring charges, non-cash compensation charges,
depreciation and amortization (EBITDA). EBITDA from all operations was $88.6
million in the nine months ended September 30, 2002 compared to $67.4 million
in the nine months ended September 30, 2001.

For the nine months ended September 30, 2002, cash flows used in investing
activities were $54.5 million compared to $827.1 million for the nine months
ended September 30, 2001. We invested $62.5 million and $792.4 million in
purchases of property and equipment, primarily related to the acquisition and
construction of communications towers, in the nine months ended September 30,
2002 and 2001, respectively.

In the nine months ended September 30, 2002, cash flows provided by
financing activities were $85.6 million, as compared to $283.8 million in the
nine months ended September 30, 2001. The cash provided by financing activities
was primarily attributable to draws on our credit facility.

Financing Transactions

As of September 30, 2002, we had total indebtedness of approximately $2.5
billion, consisting of $785 million outstanding under our credit facility, $400
million principal amount of Senior Notes, $1.1 billion accreted value of Senior
Discount Notes and $200 million of Senior Convertible Notes.

Our credit facility provides an aggregate borrowing capacity of up to
approximately $1.1 billion for SpectraSite Communications, subject to the
covenants and conditions contained in the credit facility. The credit facility
consists of:



| |  |  | a $300.0 million revolving credit facility which may be drawn, at any
time, subject to the satisfaction of certain conditions precedent
(including the absence of a materially adverse effect (as defined in
the credit agreement) and the absence of any defaults). The amount
available will be reduced (and, if necessary, the amounts outstanding
must be repaid) in quarterly installments beginning on June 30, 2004
and ending on June 30, 2007;
| | - |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

19



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| |  |  | a $335.0 million multiple draw term loan that is drawn in full and
must be repaid in quarterly installments beginning on June 30, 2005
and ending on June 30, 2007; and                                                                                                                                                                            
| | - |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|
| |  |  | a $450.0 million term loan that is drawn in full and will, from
September 30, 2003 through September 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.

Prior to the date that SpectraSite completes an acceptable restructuring
of its high yield indebtedness (as defined in the credit agreement), the
revolving credit loans and the multiple draw term loans bear interest, at our
option, at either Canadian Imperial Bank of Commerces base rate plus an
applicable margin of 2.50% per annum or the Eurodollar rate plus an applicable
margin of 3.75% per annum. After the date of such a restructuring, the
revolving credit loans and the multiple draw term loans bear interest, at our
option, at either Canadian Imperial Bank of Commerces base rate plus an
applicable margin ranging from 2.00% to 1.00% per annum or the Eurodollar rate
plus an applicable margin ranging from 3.25% to 2.25% per annum, depending on
Communications leverage ratio at the end of the preceding fiscal quarter.

Prior to the date that SpectraSite completes an acceptable restructuring
of its high yield indebtedness, the term loan bears interest, at our option, at
either Canadian Imperial Bank of Commerces base rate plus 3.25% per annum or
the Eurodollar rate plus 4.50% per annum. After the date of such a
restructuring, the term loan bears interest, at our option, at either Canadian
Imperial Bank of Commerces base rate plus 2.75% per annum or the Eurodollar
rate plus 4.00% per annum.

Communications is required to pay a commitment fee of between 1.375% and
0.500% per annum in respect of the undrawn portions of the revolving credit
facility, depending on the undrawn amount. Communications may be required to
prepay the credit facility in part upon the occurrence of certain events, such
as a sale of assets, the incurrence of certain additional indebtedness, certain
changes to the SBC transaction or the generation of excess cash flow.

The 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. In addition, the credit facility requires compliance with
certain financial covenants, including a requirement that Communications and
its subsidiaries, on a consolidated basis, not exceed a maximum ratio of total
debt to annualized EBITDA and not be below a minimum interest coverage ratio
and a minimum fixed charge coverage ratio.

In May 2002, the Company proposed a series of Refinancing Transactions as
part of an effort to reduce commitments for capital expenditures, reduce
indebtedness and reduce ongoing interest payments. These included the
agreements with SBC and Cingular described under Acquisition Activity-2002
Acquisitions  SBC. In connection with these transactions, SpectraSite created
a new, wholly-owned subsidiary, SpectraSite Intermediate Holdings, LLC
(Intermediate Holdings). SpectraSite and Intermediate Holdings entered into
a Funding Agreement pursuant to which SpectraSite and Intermediate Holdings
agreed to issue to certain affiliates of Welsh, Carson (the Lenders) up to
$350 million aggregate principal amount of secured convertible term notes (the
New Term Notes). Of the proceeds from the issuance of the New Term Notes,
$10 million were to be used to refinance indebtedness under Communications
existing credit facility. The remainder was to be used to fund purchases of
SpectraSites outstanding Senior Notes and Senior Discount Notes pursuant to
tender offers (the Tender Offers) or in the open market.

SpectraSite and Intermediate Holdings also commenced offers to exchange
(the Exchange Offers) up to $75 million of new notes to be issued by
SpectraSite and Intermediate Holdings for Senior Notes and Senior
Discount Notes outstanding following
the Tender Offers.

In connection with the execution of the Funding Agreement on May 15, 2002,
SpectraSite paid the Lenders a fee of $2.6 million, equal to 0.75% of the
aggregate principal amount of New Term Notes that the Lenders had committed to
fund. SpectraSite also paid the Lenders $2.6 million related to their expenses
associated with the Funding Agreement.

On July 12, 2002 SpectraSite, Intermediate Holdings and the Lenders
terminated the Funding Agreement. Also on that day, the Tender Offers expired
without being consummated and the Exchange Offers (which were conditioned on
the successful completion of the Tender Offers) were terminated. The Company
has recorded $11.2 million related to expenses incurred in connection with the
terminated Refinancing Transactions in other expenses in the statement of
operations for the three months ended September 30, 2002.

The Funding Agreement provides that if SpectraSite commences or enters
into an alternative transaction which restructures, repurchases or retires at
least $200 million in aggregate face value of its indebtedness before January
12, 2003,

20



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then the Lenders have the right to provide all or a portion of the
financing required to fund such alternative transaction. This financing would
be provided on the same terms as agreed to in the Funding Agreement. In
addition, if the alternative transaction does not require at least $100 million
of financing, then SpectraSite would be required to pay an additional fee of
$10.5 million to the Lenders. Any such fee would be a general unsecured claim
in the bankruptcy case described below.

Capital Restructuring

On November 6, 2002, SpectraSite announced that it has reached agreements
with beneficial holders of approximately 66% of the SpectraSite Notes
to support a restructuring plan. The restructuring plan will only involve SpectraSite
Holdings, Inc. and not SpectraSite Communications, Inc. The restructuring plan
is also not currently expected to constitute an event of default
under or otherwise
adversely affect Communications credit facility, which will continue to be
serviced from operating cash flow by Communications.

To implement the plan, SpectraSite Holdings, Inc. will file in Federal
court a pre-arranged Plan of Reorganization under Chapter 11 of the U.S.
Bankruptcy Code. The agreements with the holders of the SpectraSite
Notes will terminate if
the Plan is not filed by November 15, 2002, which date may be extended by the parties to the agreements.

According to the agreed terms, the SpectraSites outstanding securities
will be treated as follows:

|  |  |                                                                                                                                                                                                                                                                                                                                                                                                                
|- |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | The existing $2.0 billion aggregate principal
amount at maturity of the SpectraSite Notes plus accrued interest will
be exchanged for 100% of the reorganized SpectraSites new
common stock, subject to dilution from warrants to purchase new
common stock to be issued to the existing common stock holders and by
options to be issued to management to buy new common stock under a new
stock option plan.
|  |  |                                                                                                                                                                                                                                                                                                                                                                                                                
| |  | The existing common stock will be exchanged for new
warrants to purchase 5% of the shares of new common stock on a
fully diluted basis.                                                                                                                                                                                                                                                                        
|  |  |                                                                                                                                                                                                                                                                                                                                                                                                                
| |  | All existing warrants and options to purchase
common stock will be canceled.                                                                                                                                                                                                                                                                                                                                   

Under the restructuring plan, the new warrants will have a seven-year
maturity and a strike price based on an enterprise value of the Company of $1.5
billion.

As part of a management incentive program that will include a new stock
option plan, certain of the Companys employees will receive options to
purchase up to an aggregate of 10% of the shares of the new common stock on a
fully diluted basis.

Under the restructuring plan, the Companys current management team and
Board of Directors will remain in place during the Chapter 11 case. Upon
completion of the Chapter 11 process, a new Board of Directors will be elected,
consisting of five members, including Stephen H. Clark, the Chief Executive
Officer, and four members to be selected by the SpectraSite Notes holder committee.

Completion of the restructuring plan is subject to certain conditions,
including its acceptance by affected holders of claims, whose approval will be
solicited as part of the bankruptcy process. Having already achieved agreement
with the informal committee representing more than a majority of the
holders of the SpectraSite Notes, the Company believes that it will receive the votes required for
approval of the plan. Completion of the restructuring plan is also subject to
the completion of certain transactions with either Cingular or SBC that are
approved by the holders of the SpectraSite Notes who are party to the Forbearance and
Lock-Up Agreements and to providing projected compliance with the credit
agreement. There can be no assurance that satisfactory agreements will be
reached with Cingular or SBC or that the other conditions to completing the
restructuring plan will be satisfied.

Liquidity and Commitments

We had cash and cash equivalents of $64.2 million at September 30, 2002.
We also had $785.0 million outstanding under our credit facility at that date.
The remaining $300.0 million under the credit facility was undrawn. The
weighted average interest rate on outstanding borrowings under the credit
facility as of September 30, 2002 was 6.0%. Our ability to borrow under the
credit facility is limited by the financial covenants regarding the total debt
to annualized EBITDA and interest and fixed charge coverage ratios of
SpectraSite Communications and its subsidiaries. Under the terms of the credit
facility, we could borrow approximately $147 million under the revolving
credit facility as of September 30, 2002 while remaining in compliance with
these covenants. Our ability to borrow and use cash under the credit facility
financial covenants will increase or decrease as our annualized EBITDA
increases or decreases.

21



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The Company did not pay $10.8 million of interest due September 15, 2002 on
its 10 3/4% senior notes. On October 15, 2002, the 30-day grace period for
such non-payment expired, creating an event of default that is continuing. As
noted above, we expect to commence a capital restructuring under Chapter 11 of
the U.S. Bankruptcy Code. The restructuring plan is also not currently expected
to constitute an event of default under or otherwise adversely affect SpectraSite Communications, Inc.s ability to draw on the credit
facility, which will continue to be serviced from operating cash flow by
SpectraSite Communications, Inc.

Two of the banks in
the eighty member bank group have advised Communications and the
agent for the banks that they are of the view that the conditions to
funding under the credit facility are not currently met. In addition,
one of those two banks has also asserted that the August 2002
amendment is not effective. The Company disagrees with these
positions, believes the August 2002 amendment is effective and all of
the conditions to funding are currently satisfied and expects all of
the banks to honor all of their obligations under the credit
agreement. The agent and the other lead arranger for the banks have
advised the banks and Communications that they disagree with the
positions of those two banks.

Our ability to fund capital expenditures, make scheduled payments of
principal or pay interest on our debt obligations, our ability to refinance any
such debt obligations and our ability to remain in compliance with the credit
facilitys financial covenants will depend on our future performance, including
our ability to generate cash flow from operations, which, to a certain extent,
depends on the demand for wireless services, developments in competing
technologies and our ability to co-locate new tenants, as well as general
economic, financial, competitive, legislative, regulatory and other factors,
many of which are beyond our control.

The failure to comply with the provisions of the credit facility would
result in an event of default thereunder, and, depending upon the actions of
the lenders thereunder, all amounts owed under the credit facility could be
declared due and payable. If the Company were not able to repay all amounts
owed under the credit facility, the lenders thereunder would have the right to
proceed against the collateral granted to them to secure such indebtedness. If
the indebtedness outstanding under the credit facility were to be accelerated,
there can be no assurance that the funds and assets of the Company would be
sufficient to repay in full such indebtedness, and there can be no assurance
that there would be sufficient assets remaining after such repayments to pay
amounts due in respect of any or all of the Companys other indebtedness.

Even with the capital restructuring, we will continue to have significant
consolidated indebtedness. We cannot assure you that we will generate
sufficient cash flow from operations or that future borrowings or equity or
debt financings will be available on terms acceptable to us, in amounts
sufficient to service our indebtedness and make anticipated capital
expenditures.

The following table provides a summary of our material debt, lease and
other contractual commitments as of September 30, 2002.

|                                   |  |                                       |           |        |  |           |           |           |  |               |         |  |  |   |         |  |  |   |         | 
|---------------------------------- |  | ------------------------------------- | --------- | ------ |  | --------- | --------- | --------- |  | ------------- | ------- |  |  | - | ------- |  |  | - | ------- | 
|                                   |  | Payments Due by Period (in thousands)
|                                   |  |                                      
|                                   |  |                                       |           |        |  | Less than |           |           |  |               |         |  |  |   |         |  |  |  
|Contractual Obligations            |  | Total                                 |           | 1 year |  | 1-3 years |           | 4-5 years |  | After 5 years
|                                   |  |                                       |           |        |  |           |           |           |  |              
|Senior notes (1)                   |  | $                                     | 1,739,491 |        |  | $         | 1,739,491 |           |  | $             |        |  |  | $ |        |  |  | $ |        | 
|Credit facility                    |  |                                       | 785,000   |        |  |           | 1,125     |           |  |               | 62,750  |  |  |   | 505,125 |  |  |   | 216,000 | 
|Capital Lease Payments             |  |                                       | 23,143    |        |  |           | 4,243     |           |  |               | 4,735   |  |  |   | 3,161   |  |  |   | 11,004  | 
|Operating Leases Payments          |  |                                       | 324,997   |        |  |           | 67,893    |           |  |               | 113,240 |  |  |   | 52,730  |  |  |   | 91,134  | 
|SBC Tower Purchase Commitment
(2)  |  |                                       | 227,420   |        |  |           | 108,368   |           |  |               | 119,052 |  |  |   |        |  |  |   |        | 
|                                   |  |                                       |           |        |  |           |           |           |  |               |         |  |  |   |         |  |  |   |         | 
|Total Contractual Cash Obligations |  | $                                     | 3,100,051 |        |  | $         | 1,921,120 |           |  | $             | 299,777 |  |  | $ | 561,016 |  |  | $ | 318,138 | 
|                                   |  |                                       |           |        |  |           |           |           |  |               |         |  |  |   |         |  |  |   |         | 



|(1) |  | Includes $26,259 of accrued interest.                                      
|--- |  | ---------------------------------------------------------------------------
|   
|(2) |  | Based on the average purchase price of towers previously
acquired from SBC.

In addition, we had standby letters of credit of $3.4 million and
performance bonds of $11.4 million outstanding at September 30, 2002, most of
which expire within one year.

Description of Critical Accounting Policies

The preparation of our financial statements in conformity with accounting
principles generally accepted in the United States requires us to make
estimates and judgments that affect our reported amounts of assets and
liabilities, revenues and expenses. We have identified the following critical
accounting policies that affect the more significant estimates and judgments
used in the preparation of our consolidated financial statements. On an
on-going basis, we evaluate our estimates, including those related to
the matters described below. These estimates are based on the information that
is currently available to us and on various other assumptions that we believe
to be reasonable under the circumstances. Actual results could vary from those
estimates under different assumptions or conditions.

22



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Revenue Recognition

Site leasing revenues are recognized when earned based on lease
agreements. Increases based on fixed escalation clauses that are included in
certain lease agreements are recognized on a straight-line basis over the term
of the lease. Broadcast services revenues related to construction activities
are derived from service contracts that provide for billing on a time and
materials or fixed price basis. For time and material contracts, revenues are
recognized as services are performed. For fixed price contracts, we recognize
revenue and profit as work progresses using the percentage-of-completion method
of accounting, which relies on estimates of total expected contract revenues
and costs. We follow this method because reasonably dependable estimates of the
revenue and costs applicable to various stages of a contract can be made.
Because the financial reporting of these contracts depends on estimates, which
are assessed continually during the term of the contract, recognized revenues
and profit are subject to revisions as the contract progresses to completion.
Revisions in profit estimates are reflected in the period in which the facts
that give rise to the revision become known. Accordingly, favorable changes in
estimates result in additional revenue and profit recognition, and unfavorable
changes in estimates result in the reversal of previously recognized revenue
and profits. Provisions for estimated losses on uncompleted contracts are made
in the period in which such losses are determined.

Allowance for Uncollectible Accounts

We evaluate the collectibility of our accounts receivable based on a
combination of factors. In circumstances where we are aware of a specific
customers inability to meet its financial obligations to us (e.g., bankruptcy
filings, substantial down-grading of credit ratings), we record a specific
allowance against amounts due to reduce the net recognized receivable to
theamount we reasonably believe will be collected. For all other customers, we
reserve a percentage of the remaining outstanding accounts receivable balance
based on a review of the aging of customer balances, industry experience and
the current economic environment. If circumstances change (e.g., higher than
expected defaults or an unexpected material adverse change in one or more
significant customers ability to meet its financial obligations to us), our
estimates of the recoverability of amounts due to uscould be reduced by a
material amount.

Capitalization of Internal Costs

Property and equipment, including towers, are recorded at cost and
depreciated over their estimated useful lives. We capitalize costs incurred in
bringing towers to an operational state. Costs clearly associated with the
acquisition, development and construction of towers are capitalized as a cost
of that tower. Indirect costs that relate to several towers are capitalized and
allocated to the towers to which the costs relate. Indirect costs that do not
clearly relate to projects under development or construction are charged to
operating expense as incurred. Estimates and cost allocations are reviewed at
the end of each financial reporting period. Costs are revised and reallocated
as necessary for material changes on the basis of current estimates.

Goodwill

The excess of the purchase price over the fair value of net assets
acquired in purchase business combinations has been recorded as goodwill. Prior
to January 1, 2002, goodwill was amortized over 15 years for purchase business
combinations consummated prior to September 30, 2001. For purchase business
combinations consummated subsequent to September 30, 2001, goodwill is not
amortized, but is evaluated for impairment on an annual basis or as impairment
indicators are identified, in accordance with Statement of Financial Accounting
Standards No. 142, Goodwill and Other Intangible Assets(SFAS 142).

Effective January 1, 2002, we adopted SFAS 142, which establishes new
accounting and reporting requirements for goodwill and other intangible assets.
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 September 30, 2001. With
respect to goodwill and intangible assets acquired prior to July 1, 2001, we
ceased amortization on January 1, 2002.

We performed the first of the required impairment tests of goodwill by
comparing the fair value of each of our reporting units with its carrying
value. Fair value was determined using a discounted cash flow methodology.
Based on our impairment tests, we recognized an adjustment of $376.8 million,
or $2.45 per share, to reduce the carrying value of goodwill in our wireless
services, broadcast tower, broadcast services and building units to its implied
value. Under SFAS 142, the impairment adjustment recognized at adoption of the
new rules was reflected as a cumulative effect of accounting change in our
first quarter 2002 statement of operations. Impairment adjustments recognized
after adoption, if any, generally are required to be recognized as an operating
expense.

23



---



##### 






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 September 30, 2002. The
following table presents principal cash flows and related weighted average
interest rates by fiscal year of maturity of our fixed rate debt.

|                       |                       |  |                        |           |      |  |      |   |      |  |      |   |            |  |       |   |  |  |   |   |  |  |   |   |  |  |   |           |  
|---------------------- | --------------------- |  | ---------------------- | --------- | ---- |  | ---- | - | ---- |  | ---- | - | ---------- |  | ----- | - |  |  | - | - |  |  | - | - |  |  | - | --------- | -
|                       |                       |  | Expected Maturity Date
|                       |                       |  |                       
|                       |                       |  | 2002                   |           | 2003 |  | 2004 |   | 2005 |  | 2006 |   | Thereafter |  | Total
|                       |                       |  |                        |           |      |  |      |   |      |  |      |   |            |  |      
|                       |                       |  | (dollars in thousands)
|Longterm obligations: |                       |  |                        |           |      |  |      |   |      |  |      |   |            |  |       |   |  |  |   |   |  |  |   |   |  |  |   |          
|                       | Fixed rate            |  | $                      | 1,713,232 |      |  | $    |  |      |  | $    |  |            |  | $     |  |  |  | $ |  |  |  | $ |  |  |  | $ | 1,713,232 |  
|                       | Average interest rate |  |                        | 11.3      | %    |  |      |  |      |  |      |  |            |  |       |  |  |  |   |  |  |  |   |  |  |  |   | 11.3      | %

In addition, as of September 30, 2002, we had $785.0 million of variable
rate debt outstanding under our credit facility at a weighted average interest
rate of 6.0%. A 1% increase in the interest rate on our variable rate debt
would have increased interest expense by approximately $2.0 million and $5.8
million in the three and nine months ended September 30, 2002, respectively.

24



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##### 








|                                                  |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|------------------------------------------------- |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|ITEM 4 CONTROLS AND PROCEDURES                  
|                                                 
|Evaluation of Disclosure Controls and Procedures. |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|                                                 
|                                                  |  | Our Chief Executive
Officer and Chief Financial Officer, after evaluating the effectiveness of
our disclosure controls and procedures (as defined in the Securities Exchange
Act of 1934 Rules 13a-14(c) and 15d-14(c) as of a date within 90 days of
the filing date of this quarterly report on Form 10-Q (the Evaluation
Date)), have concluded that as of the Evaluation Date, our disclosure
controls and procedures were adequate and effective to ensure that
material information relating to SpectraSite Holdings, Inc. and its
consolidated subsidiaries would be made known to them by others within
those entities, particularly during the period in which this quarterly
report on Form 10-Q was being prepared.
|                                                 
|Changes in Internal
Controls.                     |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|                                                 
|                                                  |  | None.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           

25



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##### 









PART II  OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS



| |                                                                                                                                                                               
| | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | Reference is made to Part II. Item 1. of the Companys Quarterly Report
on Form 10-Q for the quarter ended June 30, 2002, for information regarding
certain legal proceedings.




ITEM 2. CHANGES IN SECURITIES AND USE OF PROCEEDS



| |     
| | ----
| | None




ITEM 3. DEFAULTS UPON SENIOR SECURITIES



| |                                                                                                                                                                                                                                  
| | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | The Company did not pay $10.8 million of interest due September 15,
2002 on its 10 3/4% senior notes. On October 15, 2002, the 30-day grace
period for such non-payment expired, creating an event of default that is
continuing.




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



| |      
| | -----
| | None.




ITEM 5. OTHER INFORMATION



| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
| | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | On August 28, 2002, the Company announced that the Nasdaq Stock Market
approved its request to transfer its common stock to the Nasdaq SmallCap
Market. As a consequence of the transfer, shareholders may find it more
difficult to buy or sell shares of or obtain accurate quotations as to the
market value of the Companys common stock.                                                                                                                                                                                                                                                                                                                                                                                                      
|
| | On September 18, 2002, the Company announced that Stephen H. Clark,
Chief Executive Officer of SpectraSite Holdings, Inc., had been named
Chairman of the Board. In addition, Timothy G. Biltz, the Companys Chief
Operating Officer, and David P. Tomick, the Companys Chief Financial
Officer, were named to the Board of Directors. In addition to Messrs.
Clark, Biltz and Tomick the remainder of the Board consists of Calvin Payne,
President of SpectraSites Network Services division, and Steven Shindler,
Chief Executive Officer of Nextel International, Inc. The new appointments
followed the resignations of Lawrence Sorrel, Thomas McInerney, James
Matthews, Timothy Donahue, Michael Price and Edgar Reynolds from the Board.
|
| | On October 3, 2002, the Company amended its Second Amended and Restated
Registration Rights Agreement to remove the coordinated distribution
requirement. On the same date, the Company also entered into a voting
letter agreement with certain affiliates of Welsh, Carson, Anderson & Stowe,
L.P. (WCAS) whereby WCAS agreed to vote all its shares of the Companys
common stock in excess of 9.9% of the outstanding shares of the Companys
common stock in proportion to all votes cast by other holders of the
Companys common stock.                                                                                                                                                                                                    
|
| | On October 4, 2002, the Company and certain stockholders terminated the
Third Amended and Restated Stockholders Agreement.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         

26



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##### 






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   |  | Amendment No. 2 to the SBC Agreement dated November 14, 2001.
Incorporated by reference to exhibit no. 2.5 to the Registrants Form 10-K
for the year ended December 31, 2001.                                                                                                                                                                                          
|     
|2.4   |  | Amendment No. 3 to the SBC Agreement dated January 31, 2002. Incorporated
by reference to exhibit no. 2.6 to the Registrants Form 10-K for the year
ended December 31, 2001.                                                                                                                                                                                           
|     
|2.5   |  | Amendment No. 4 to the SBC Agreement dated February 25, 2002.
Incorporated by reference to exhibit no. 2.7 to the Registrants Form 10-K
for the year ended December 31, 2001.                                                                                                                                                                                          
|     
|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.                                                                                                                                                                  
|     
|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.                                                                                                                                                                                                                               
|     
|10.1  |  | Lease and Sublease, dated as of December 14, 2000, by and among SBC
Wireless, LLC, (SBCW), SBC Tower Holdings LLC, for itself and as agent
for certain affiliates of SBC, the Registrant and Southern Towers, Inc.
(incorporated by reference to exhibit No. 10.2 to the Registrants Form
10-Q for the quarterly period ended March 31, 2001).                       
|     
|10.2  |  | Fourth Consent and Amendment to Funding Agreement, dated as of July 2,
2002, by and among the Registrant, Holdco and the Purchasers party
thereto. Incorporated by reference to Exhibit 10.1 of the Registrants
report on Form 8-K filed on July 3, 2002.                                                                                                              
|     
|10.3  |  | Joint Termination of Funding Agreement, dated as of July 12, 2002, by and
among the Registrant, Holdco and the Purchasers party thereto.
Incorporated by reference to Exhibit 10.1 of the Registrants report on
Form 8-K filed on July 16, 2002.                                                                                                                       
|     
|*10.4 |  | Second Amendment to Amended and Restated Credit Agreement, dated as
of August 14, 2002 by and among SpectraSite Communications, Inc.,
the Registrant, Canadian Imperial Bank of Commerce, as
administrative agent, and the Credit Parties (as defined therein).                                                                                                         
|     
|*10.5 |  | Amendment to the Second Amended and Restated Registration Rights
Agreement, dated as of October 3, 2002, by and among the Registrant
and the Purchasers (as defined therein).                                                                                                                                                                                           
|     
|*10.6 |  | Voting Letter Agreement, dated as of October 3, 2002, by and among
the Registrant and the WCAS Shareholders (as defined therein).                                                                                                                                                                                                                                       
|     
|*10.7 |  | Termination Agreement to the Third Amended and Restated
Stockholders Agreement, dated as of October 4, 2002, by and among
the Registrant and the Stockholders (as defined therein).                                                                                                                                                                                    
|     
|10.8  |  | Form of Forbearance, Lock-Up and Voting Agreement, dated as of
November 5, 2002, by and among the Consenting Holder (as defined
therein) and the Registrant. Incorporated by reference to Exhibit
99.2 of the Registrants report on Form 8-K filed on November 6,
2002.                                                                                                
|     
|*99.1 |  | Certification of Chief Executive Officer pursuant to 18 U.S.C.
Section 1350, as Adopted Pursuant to Section 906 of the
Sarbanes-Oxley Act of 2002.                                                                                                                                                                                                                      
|     
|*99.2 |  | Certification of Chief Financial Officer pursuant to 18 U.S.C.
Section 1350, as Adopted Pursuant to Section 906 of the
Sarbanes-Oxley Act of 2002.                                                                                                                                                                                                                      

*     Filed herewith.

27



---



##### 



(b)  Reports on Form 8-K

On July 3, 2002 the Registrant filed a Current Report on Form 8-K related
to a press release it issued announcing an extension of the exchange offers
relating to its senior notes.

On July 16, 2002 the Registrant filed a Current Report on Form 8-K related
to a press release it issued announcing (i) the expiration of the tender offers
relating to its senior notes and (ii) the termination of the exchange offers
relating to its senior notes.

On November 6, 2002, the Registrant filed a Current Report on Form 8-K
related to a press release it issued announcing an agreement with bondholders
on recapitalization.

28



---



##### 






SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of the 1934,
the registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.

|                         |  |                                                                                                         
|------------------------ |  | --------------------------------------------------------------------------------------------------------
|Date:  November 12, 2002 |  | SPECTRASITE HOLDINGS, INC.
(Registrant)                                                                 
|                        
|                         |  | /s/DAVID P. TOMICKDavid P. Tomick
Executive Vice President,  Chief Financial Officer
and Secretary      
|                        
|                         |  | /s/DANIEL I. HUNTDaniel I. Hunt
Vice President- Finance and Administration, Principal
Accounting Officer

29



---



##### 






CERTIFICATIONS

I, Stephen H. Clark, as Chief Executive Officer, certify that:



|1. |  | I have reviewed this quarterly report on Form 10-Q of SpectraSite
Holdings, Inc.;                                                                                                                                                                                                                                             
|-- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|  
|2. |  | Based on my knowledge, this quarterly report does not contain any untrue
statement of a material fact or omit to state a material fact necessary to
make the statements made, in light of the circumstances under which such
statements were made, not misleading with respect to the period covered by
this quarterly report;
|  
|3. |  | Based on my knowledge, the financial statements, and other financial
information included in this quarterly report, fairly present in all
material respects the financial condition, results of operations and cash
flows of the registrant as of, and for, the periods presented in this
quarterly report;                   
|  
|4. |  | The registrants other certifying officers and I are responsible for
establishing and maintaining disclosure controls and procedures (as
defined in Exchange Act Rules 13a-14 and 15d-14) for the registrant and we
have:                                                                                                     

|   |  |                                                                                                                                                                                                                                                                                                
|-- |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|a  |  | designed such disclosure controls and procedures to ensure
that material information relating to the registrant, including its
consolidated subsidiaries, is made known to us by others within
those entities, particularly during the period in which this
quarterly report is being prepared;
|   |  |                                                                                                                                                                                                                                                                                                
|b. |  | evaluated the effectiveness of the registrants disclosure
controls and procedures as of a date within 90 days prior to the
filing date of this quarterly report (the Evaluation Date); and                                                                                                  
|   |  |                                                                                                                                                                                                                                                                                                
|c. |  | presented in this quarterly report our conclusions about the
effectiveness of the disclosure controls and procedures based on our
evaluation as of the Evaluation Date;                                                                                                                        



|5. |  | The registrants other certifying officers and I have disclosed, based on
our most recent evaluation, to the registrants auditors and the audit
committee of registrants board of directors (or persons performing the
equivalent function):
|-- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|   |  |                                                                                                                                                                                                                                                                                               
|-- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|a. |  | all significant deficiencies in the design or operation of
internal controls which could adversely affect the registrants
ability to record, process, summarize and report financial data and
have identified for the registrants auditors any material
weaknesses in internal controls; and
|   |  |                                                                                                                                                                                                                                                                                               
|b. |  | any fraud, whether or not material, that involves management
or other employees who have a significant role in the registrants
internal controls; and                                                                                                                                        



|6. |  | The registrants other certifying officers and I have indicated in this
quarterly report whether there were significant changes in internal
controls or in other factors that could significantly affect internal
controls subsequent to the date of our most recent evaluation, including
any corrective actions with regard to significant deficiencies and
material weaknesses.
|-- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|                  |  |                                                            
|----------------- |  | -----------------------------------------------------------
|November 12, 2002 |  | /s/STEPHEN H. CLARKStephen H. Clark
Chief Executive Officer

30



---



##### 



I, David P. Tomick, as Chief Financial Officer, certify that:



|1. |  | I have reviewed this quarterly report on Form 10-Q of SpectraSite
Holdings, Inc.;                                                                                                                                                                                                                                             
|-- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|  
|2. |  | Based on my knowledge, this quarterly report does not contain any untrue
statement of a material fact or omit to state a material fact necessary to
make the statements made, in light of the circumstances under which such
statements were made, not misleading with respect to the period covered by
this quarterly report;
|  
|3. |  | Based on my knowledge, the financial statements, and other financial
information included in this quarterly report, fairly present in all
material respects the financial condition, results of operations and cash
flows of the registrant as of, and for, the periods presented in this
quarterly report;                   
|  
|4. |  | The registrants other certifying officers and I are responsible for
establishing and maintaining disclosure controls and procedures (as
defined in Exchange Act Rules 13a-14 and 15d-14) for the registrant and we
have:                                                                                                     

|   |  |                                                                                                                                                                                                                                                                                                
|-- |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|a. |  | designed such disclosure controls and procedures to ensure
that material information relating to the registrant, including its
consolidated subsidiaries, is made known to us by others within
those entities, particularly during the period in which this
quarterly report is being prepared;
|   |  |                                                                                                                                                                                                                                                                                                
|b. |  | evaluated the effectiveness of the registrants disclosure
controls and procedures as of a date within 90 days prior to the
filing date of this quarterly report (the Evaluation Date); and                                                                                                  
|   |  |                                                                                                                                                                                                                                                                                                
|c. |  | presented in this quarterly report our conclusions about the
effectiveness of the disclosure controls and procedures based on our
evaluation as of the Evaluation Date;                                                                                                                        



|5. |  | The registrants other certifying officers and I have disclosed, based on
our most recent evaluation, to the registrants auditors and the audit
committee of registrants board of directors (or persons performing the
equivalent function):
|-- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|   |  |                                                                                                                                                                                                                                                                                               
|-- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|a. |  | all significant deficiencies in the design or operation of
internal controls which could adversely affect the registrants
ability to record, process, summarize and report financial data and
have identified for the registrants auditors any material
weaknesses in internal controls; and
|   |  |                                                                                                                                                                                                                                                                                               
|b. |  | any fraud, whether or not material, that involves management
or other employees who have a significant role in the registrants
internal controls; and                                                                                                                                        



|6. |  | The registrants other certifying officers and I have indicated in this
quarterly report whether there were significant changes in internal
controls or in other factors that could significantly affect internal
controls subsequent to the date of our most recent evaluation, including
any corrective actions with regard to significant deficiencies and
material weaknesses.
|-- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|                  |  |                                                                                     
|----------------- |  | ------------------------------------------------------------------------------------
|November 12, 2002 |  | /s/DAVID P. TOMICKDavid P. Tomick
Executive Vice President,  Chief Financial Officer

31