Edgar Filing: SPECTRASITE INC

Registration No. 333-
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549

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FORM S-1
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933

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SPECTRASITE, INC.
(Exact name of Registrant as specified in its charter)

DELAWARE 4899 56-2027322
(State or other jurisdiction of (Primary Standard Industrial (IRS Employer Identification No.)
incorporation or organization) Classification Code Number)

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400 REGENCY FOREST DRIVE
CARY, NORTH CAROLINA 27511
(919) 468-0112
(Address, including zip code, and telephone number, including area code,
of Registrant's principal executive offices)

JOHN H. LYNCH
VICE PRESIDENT, GENERAL COUNSEL & SECRETARY
SPECTRASITE, INC.
400 REGENCY FOREST DRIVE
CARY, NORTH CAROLINA 27511
(919) 468-0112
(Name, address, including zip code, and telephone number, including area code,
of agent for service)

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Copies to:
BRUCE A. GUTENPLAN, ESQ. JAMES J. CLARK, ESQ.
RAPHAEL M. RUSSO, ESQ. LUIS R. PENALVER, ESQ.
PAUL, WEISS, RIFKIND, WHARTON & GARRISON LLP CAHILL GORDON & REINDEL LLP
1285 AVENUE OF THE AMERICAS 80 PINE STREET
NEW YORK, NEW YORK 10019-6064 NEW YORK, NEW YORK 10005
212-373-3000 212-701-3000

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APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO PUBLIC: As soon as
practicable after this Registration Statement becomes effective. If any of the
securities being registered on this Form are to be offered on a delayed or
continuous basis pursuant to Rule 415 under the Securities Act of 1933, check
the following box. [_]

If this form is filed to register additional securities for an offering pursuant
to Rule 462(b) under the Securities Act, check the following box and list the
Securities Act registration statement number of the earlier effective
registration statement for the same offering: [_] _________

If this form is a post-effective amendment filed pursuant to Rule 462(c) under
the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering: [_] ___________

If this form is a post-effective amendment filed pursuant to Rule 462(d) under
the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering: [_]

If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. [_]

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CALCULATION OF REGISTRATION FEE
================================================================================
AMOUNT OF
TITLE OF EACH CLASS PROPOSED MAXIMUM REGISTRATION
OF SECURITIES TO BE REGISTERED AGGREGATE OFFERING PRICE (1) FEE
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Common Stock, par value $0.01 $305,325,000 $24,701
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(1) Estimated solely for the purpose of calculating the registration fee in
accordance with Rule 457(o) of the Securities Act of 1933.

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THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR DATES
AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL FILE
A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION STATEMENT
SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(A) OF THE
SECURITIES ACT OF 1933 OR UNTIL THIS REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE SECURITIES AND EXCHANGE COMMISSION, ACTING
PURSUANT TO SAID SECTION 8(A), MAY DETERMINE.

The information in this preliminary prospectus is not complete and may be
changed. These securities may not be sold until the registration statement filed
with the Securities and Exchange Commission is effective. This preliminary
prospectus is not an offer to sell nor does it seek an offer to buy these
securities in any jurisdiction where the offer or sale is not permitted.

Subject to Completion, Dated July 17, 2003

4,500,000 SHARES

SPECTRASITE, INC.
COMMON STOCK

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This is a public offering of shares of common stock of SpectraSite,
Inc. All of the 4,500,000 shares of common stock are being sold by the selling
stockholders. We will not receive any of the proceeds from the shares being sold
by these selling stockholders.

On July 16, 2003, the last reported sale price of our common stock,
which is quoted on the OTC Bulletin Board under the ticker symbol "SPCS" was
$59.00 per share. See "Price Range of Common Stock." We intend to list the
common stock on the New York Stock Exchange.

SEE "RISK FACTORS" ON PAGE 8 TO READ ABOUT FACTORS YOU SHOULD CONSIDER
BEFORE BUYING SHARES OF THE COMMON STOCK.

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NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY OTHER REGULATORY
BODY HAS APPROVED OR DISAPPROVED OF THESE SECURITIES OR PASSED UPON THE ACCURACY
OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL
OFFENSE.

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PER SHARE TOTAL
--------- -----
Public offering price........................... $ $
Underwriting discount........................... $ $
Proceeds to the selling stockholders............ $ $

To the extent that the underwriters sell more than 4,500,000 shares
of common stock, the underwriters have the option to purchase up to an
additional 675,000 shares from the selling stockholders at the public offering
price less the underwriting discount.

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The underwriters expect to deliver the shares against payment in New
York, New York on ____________, 2003.

GOLDMAN, SACHS & CO.

BEAR, STEARNS & CO. INC.

CITIGROUP

CREDIT SUISSE FIRST BOSTON

LEHMAN BROTHERS

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Prospectus dated ___________, 2003.

PROSPECTUS SUMMARY

THE FOLLOWING SUMMARY HIGHLIGHTS INFORMATION CONTAINED ELSEWHERE IN
THIS PROSPECTUS AND IS QUALIFIED IN ITS ENTIRETY BY THE MORE DETAILED
INFORMATION AND CONSOLIDATED FINANCIAL STATEMENTS INCLUDED ELSEWHERE IN THIS
PROSPECTUS. THIS SUMMARY IS NOT COMPLETE AND MAY NOT CONTAIN ALL OF THE
INFORMATION THAT YOU SHOULD CONSIDER BEFORE INVESTING IN OUR COMMON STOCK. YOU
SHOULD READ THIS ENTIRE PROSPECTUS CAREFULLY, ESPECIALLY THE "RISK FACTORS"
SECTION AND THE CONSOLIDATED FINANCIAL STATEMENTS. UNLESS THE CONTEXT INDICATES
OR REQUIRES OTHERWISE, THE TERMS "SPECTRASITE," "WE," "OUR" AND "COMPANY" REFER
TO SPECTRASITE, INC. (FORMERLY KNOWN AS SPECTRASITE HOLDINGS, INC.) AND ITS
WHOLLY OWNED SUBSIDIARIES AND ALL PREDECESSOR ENTITIES, COLLECTIVELY. IN
ADDITION, "COMMUNICATIONS" REFERS TO SPECTRASITE COMMUNICATIONS, INC., A WHOLLY
OWNED SUBSIDIARY OF SPECTRASITE. SOME OF THE STATEMENTS IN THIS SUMMARY ARE
FORWARD-LOOKING STATEMENTS. REFERENCES TO MARKETS IN THE UNITED STATES REFER TO
BASIC TRADING AREAS OR "BTAS." FOR MORE INFORMATION, PLEASE SEE "FORWARD-LOOKING
STATEMENTS."

SPECTRASITE

OVERVIEW

We are one of the largest and fastest growing wireless tower operators
in the United States, based on number of towers and revenue growth,
respectively. Our primary business is owning and leasing antenna sites on
wireless and broadcast towers, owning and leasing in-building shared
infrastructure systems and managing access to rooftop telecommunications on
commercial real estate. For the three months ended March 31, 2003, approximately
94% of our revenues and 99% of our gross profit came from our site leasing
operations. We also provide design, construction, modification and maintenance
services for the broadcast tower industry.

We have a portfolio of approximately 7,500 towers, primarily located in
the top 100 markets in the United States. We believe that the growing use of
wireless communications services together with capacity constraints in the top
100 markets will continue to increase the demand for tower assets located in
these markets and drive the growth of our business.

Our business is characterized by stable and recurring revenues,
predictable operating costs and a low level of capital expenditures. We expect
to continue to increase our revenues by adding new tenants to our towers and by
providing additional space to our existing leasing customers. Revenues from our
existing customers are expected to grow because of contractual provisions that
increase our customers' payments to us on an annual basis. In addition, we
experience minimal customer turnover due to long-term customer contracts, the
quality of our assets and the significant relocation costs for our existing
tenants.

PRODUCTS AND SERVICES

Our business consists of site leasing and broadcast services.

SITE LEASING

As of March 31, 2003, we owned or operated 7,414 wireless towers and
in-building systems and 74 broadcast towers. We have major metropolitan market
clusters in Los Angeles, Chicago, San Francisco, Philadelphia, Detroit and
Dallas. Our principal business is the leasing of space on our antenna sites to
wireless carriers, which represents more than 92% of our monthly site leasing
revenues.

o WIRELESS TOWER OWNERSHIP, LEASING AND MANAGEMENT. We are one
of the largest independent owners and operators of wireless
communications towers in the United States. We provide antenna
site leasing services, which primarily involve the leasing of
antenna space on our towers, to wireless carriers. Our
wireless leasing customers are leading wireless service
providers, including AT&T Wireless, Cingular, Nextel, Sprint
PCS, T-Mobile, Verizon Wireless and their affiliates.
Together, these customers account for more than 89% of our
monthly wireless leasing revenues.

o IN-BUILDING SHARED INFRASTRUCTURE SOLUTIONS. We are a leading
provider in the rapidly growing business of in-building
neutral host distributed antenna systems serving
telecommunications carriers in the United States. We have the
exclusive rights to provide in-building systems to wireless
carriers in over 300 retail shopping malls, casino/hotel
resorts and office buildings in the United States.

o BROADCAST TOWER OWNERSHIP, LEASING AND MANAGEMENT. We are one
of the largest independent owners and operators of broadcast
towers in the United States. We provide antenna site leasing
services, which involve the leasing of antenna space on our
broadcast towers to broadcasters and wireless carriers.

o ROOFTOP MANAGEMENT. We provide rooftop management services to
telecommunications carriers in the United States. We are the
exclusive site manager for over 11,000 real estate properties,
with significant access clusters in major metropolitan areas.

BROADCAST SERVICES

We are a leading provider of broadcast tower analysis, design,
installation and technical services. We have over 50 years of experience in the
broadcast tower industry and have worked on the development of more than 700
broadcast towers, which we believe represent approximately 50% of the existing
broadcast tower infrastructure in the United States.

COMPETITIVE STRENGTHS:

We believe that we are distinguished by the following competitive
strengths which will allow us to continue to grow our revenues and increase our
operating margins:

o HIGH QUALITY ASSETS. We believe that the quality of our
portfolio of tower assets, including our tower clusters in
major metropolitan markets, makes us a preferred provider for
the largest carriers in the wireless industry. In addition,
because our tower portfolio was predominantly built over the
last four years and we acquired primarily single-tenant towers
from wireless carriers, we have fewer tenants per tower than
the other publicly traded tower companies. Therefore, we
expect that as we add new tenants our revenue per tower will
grow at a faster rate than revenue per tower of other publicly
traded tower companies. Over the last two years, we have been
a leader in the tower industry in terms of key operating
performance measures such as same tower revenue and same tower
cash flow growth.

o STABLE AND GROWING CORE LEASING BUSINESS. Our long-term site
leasing contracts with our customers provide us with a
recurring and stable cash flow stream that grows through
contractual rent increases. Significant relocation costs also
tend to deter existing tenants from switching to other towers.
Because our tower operating expenses generally do not grow as
we add additional tenants, once a tower is built for an anchor
tenant, additional tenants provide high incremental cash flow.

o LOW LEVELS OF DEBT IN OUR CAPITAL STRUCTURE. We currently
operate with the lowest levels of total debt and debt leverage
among the publicly traded tower companies. We have also
substantially completed the build-out of our wireless tower
portfolio and terminated our build-to-suit contracts with
wireless carriers. We believe our lower level of total debt
and funding requirements will increase our financial
flexibility and enhance our cash flow generating capability.

o DISCIPLINED APPROACH TO OPERATIONS. Over the last eight
quarters, we have aggressively focused on operating cost
controls. During that time, we reduced our quarterly sales,
general and administrative expenses as a percentage of revenue
from 31% to 16%, and our accounts receivable as a percentage
of revenues to the lowest level among the publicly traded
tower companies. By reducing the amount of working capital
required to operate our business we have improved our
operating flexibility.

o EXPERIENCED MANAGEMENT. Our senior management team has been in
place for four years and has an average of over 11 years of
experience in the wireless industry. Our chief operating
officer and the

presidents of our leasing and broadcast divisions, for
example, have a combined 38 years of experience in management
positions at wireless carriers.

BUSINESS STRATEGY

We intend to capitalize on the continued growth in demand for wireless
services and the related infrastructure required to support that growth. The
principal features of our business strategy are to:

o MAXIMIZE USE OF OUR TOWER PORTFOLIO. We believe that our
highest returns will be achieved by leasing additional space
on our existing towers. Because the costs of operating a tower
are largely fixed, increasing utilization will significantly
improve our operating margins. For example, (excluding the
results from the 545 towers we sold to Cingular in February
2003) our revenues per tower have increased by approximately
18% and our tower cash flow per tower has increased by
approximately 26% for the quarter ended March 31, 2003
compared to the quarter ended March 31, 2002.

o TAKE ADVANTAGE OF OUR MAJOR MARKET PRESENCE. Approximately 71%
of our wireless antenna sites are located in the top 100
markets in the United States, which is the highest percentage
among the publicly traded tower companies. These markets cover
approximately 74% of the U.S. population. We believe the
increase in peak minutes of use, together with capacity
constraints, in these markets will lead carriers to deploy
more capital to expand their network capacity in these markets
than in other markets.

o LEVERAGE EXISTING RELATIONSHIPS WITH WIRELESS SERVICE
PROVIDERS AND THEIR PROGRAM MANAGEMENT COMPANIES. We have a
dedicated group of sales representatives that focuses on
establishing and maintaining relationships with customers at
both local and regional levels. In addition, we employ an
experienced national accounts team that works closely with
each wireless service provider's corporate headquarters and
senior management team to cultivate and ensure long-term
relationships.

o CAPITALIZE ON OUR INDUSTRY-LEADING POSITION IN PROVIDING
IN-BUILDING SHARED INFRASTRUCTURE SOLUTIONS TO WIRELESS
carriers. We have the largest operational base of distributed
antenna systems providing in-building wireless coverage in the
tower industry. We believe wireless carriers will continue to
commit greater financial resources to these areas as they seek
to improve network quality and provide additional high quality
network coverage.

RECENT DEVELOPMENTS

On November 15, 2002, we filed a voluntary petition for relief under
chapter 11 of the Bankruptcy Code. We emerged from bankruptcy on February 10,
2003. Our operating subsidiaries, including SpectraSite Communications, Inc.,
were not part of the bankruptcy reorganization. Our senior management team
remained with the company through the reorganization. Upon our emergence from
bankruptcy, our largest stockholders are affiliates of Apollo Management V, L.P.
and certain funds managed by Oaktree Capital Management, LLC. Members of our
management team have options representing an aggregate of 10.0% of our fully
diluted common stock.

In order to focus on our core leasing business, we completed the sale
of our network services division on December 31, 2002. In connection with the
sale, we reduced our headcount by more than 1,000. On February 10, 2003, we sold
545 towers to Cingular. We used all of the net proceeds from the sale of the 545
towers to repay approximately $73.5 million of outstanding term loans under our
credit facility.

On May 21, 2003, we completed the sale of $200 million of our 81/4%
senior notes due 2010 in a private offering. The net proceeds of $194.5 million
of the offering were used to repay a portion of the outstanding indebtedness
under our credit facility.

THE OFFERING

Common stock
offered by the selling stockholders.......... 4,500,000 shares

Common stock outstanding before and
after this offering.......................... 23,743,515 shares

Dividend policy.............................. We have not paid any dividends
on our common stock in the past
and currently do not expect to
pay dividends or make any other
distributions on our common
stock in the future.

Use of proceeds.............................. We will not receive any
proceeds from the sale of
shares by the selling
stockholders.

Proposed New York Stock Exchange symbol...... " "

The number of shares of common stock outstanding before and after this
offering excludes 2,731,357 shares of common stock issuable upon exercise of
outstanding stock options, an additional 207,225 shares of common stock
available for future awards under our equity incentive plan, 1,249,970 shares of
common stock issuable upon exercise of outstanding warrants and 67,933 shares of
common stock issuable in connection with further distributions pursuant to our
plan of reorganization.

All of the shares of common stock in this offering are being sold by
the selling stockholders.

Information regarding the number of shares of common stock outstanding
is as of June 30, 2003.

As of June 30, 2003, the selling stockholders held approximately 69.0%
of our outstanding common stock. After giving effect to this offering and
assuming the full exercise of the underwriters' option to purchase 675,000
additional shares, the selling stockholders will own approximately 47.2% of our
outstanding common stock.

Unless otherwise indicated, the information in this prospectus assumes
that the underwriters will not exercise the over-allotment option granted to
them by the selling stockholders.

RISK FACTORS

See "Risk Factors" immediately following this summary for a discussion
of some of the risks relating to investing in our common stock.

INFORMATION ABOUT SPECTRASITE

We were incorporated in Delaware in 1997. Our principal executive
offices are located at 400 Regency Forest Drive, Cary, North Carolina 27511, and
our telephone number at that address is (919) 468-0112. Our World Wide Web site
address is http://www.spectrasite.com. The information in our website is not
part of this prospectus.

SUMMARY CONSOLIDATED FINANCIAL AND OTHER DATA

The following table sets forth summary historical consolidated
financial and other data. We refer to the periods prior to our emergence from
chapter 11 as "predecessor company" and to the periods subsequent to that date
as "reorganized company." The balance sheet data as of December 31, 2000, 2001
and 2002 and the statement of operations data for the years ended December 31,
2000, 2001 and 2002 are derived from our audited consolidated financial
statements. The balance sheet data as of March 31, 2002, January 31, 2003 and
March 31, 2003 and the statement of operations data for the three months ended
March 31, 2002 and for the one month ended January 31, 2003 for the predecessor
company, the two months ended March 31, 2003 for the reorganized company and the
three months ended March 31, 2003 for the combined predecessor and reorganized
company are derived from our unaudited financial statements. In our opinion, the
unaudited financial data include all adjustments (consisting only of normal
recurring adjustments for the predecessor company for the three months ended
March 31, 2002 and normal recurring adjustments and fresh start accounting
adjustments for the predecessor company for the one month period ended January
31, 2003, for the reorganized company for the two months ended March 31, 2003
and for the combined predecessor and reorganized company for the three months
ended March 31, 2003) necessary to present fairly the information set forth
therein.

As a result of the implementation of fresh start accounting as of
January 31, 2003, our financial statements after that date are not comparable to
our financial statements for prior periods because of the differences in the
bases of accounting and the capital structure for the predecessor company and
the reorganized company. We believe that the presentation of operating results
for the combined predecessor and reorganized company for the three months ended
March 31, 2003 is useful to assist investors in evaluating our first quarter
2003 operating results in comparison to our operating results for the first
quarter of 2002. Operating results for the one month ended January 31, 2003 for
the predecessor company, the two months ended March 31, 2003 for the reorganized
company and the three months ended March 31, 2003 for the combined predecessor
and reorganized company are not necessarily indicative of the results that may
be expected for the year ending December 31, 2003.

The information set forth below should be read in conjunction with "Use
of Proceeds," "Capitalization," "Management's Discussion and Analysis of
Financial Condition and Results of Operations" and our consolidated financial
statements and related notes included elsewhere in this prospectus. Prior period
information has been restated to present the operations of the network services
division as a discontinued operation.

COMBINED
PREDECESSOR
AND
REORGANIZED REORGANIZED
COMPANY COMPANY
PREDECESSOR COMPANY (1) (1) (1)(2)
---------------------------------------------------------- ----------- -----------
THREE TWO THREE
MONTHS ONE MONTH MONTHS MONTHS
YEAR ENDED DECEMBER 31, ENDED ENDED ENDED ENDED
----------------------------------- MARCH 31, JANUARY 31, MARCH 31, MARCH 31,
2000 2001 2002 2002 2003 2003 2003
---------- ---------- ---------- ---------- ---------- ---------- ----------
(DOLLARS IN THOUSANDS)

STATEMENT OF OPERATIONS
DATA:
Revenues:
Site leasing.......... $ 116,476 $ 221,614 $ 282,525 $ 65,952 $ 25,556 $ 51,069 $ 76,625
Broadcast services.... 38,953 38,211 26,809 6,452 1,237 3,575 4,812
---------- ---------- ---------- ---------- ---------- ---------- ----------
Total revenues..... $ 155,069 $ 259,825 $ 309,334 $ 72,404 $ 26,793 $ 54,644 $ 81,437
---------- ---------- ---------- ---------- ---------- ---------- ----------
Operating expenses:
Costs of operations
(excluding
depreciation,
amortization and
accretion expense):
Site leasing....... $ 46,667 $ 91,689 $ 108,540 $ 25,505 $ 8,840 $ 17,060 $ 25,900
Broadcast services. 26,245 29,538 21,158 5,370 1,492 2,889 4,381
Selling, general and
administrative
expenses........... 51,825 72,431 58,037 15,520 4,280 8,686 12,966
Depreciation,
amortization and
accretion expense
(3)................ 78,103 165,267 189,936 44,638 16,075 16,826 32,901
Restructuring and
non-recurring
charges............ -- 142,599 28,570 -- -- -- --
---------- ---------- ---------- ---------- ---------- ---------- ----------
Total operating
expenses......... 202,840 501,524 406,241 91,033 30,687 45,461 76,148
---------- ---------- ---------- ---------- ---------- ---------- ----------
Operating income (loss).... $ (47,771) $ (241,699) $ (96,907) $ (18,629)$ (3,894) $ 9,183 $ 5,289
========== ========== ========== ========== ========== ========== ==========
Gain on debt discharge..... -- -- -- -- 1,034,764 -- 1,034,764
Income (loss) from
continuing operations... $ (163,059) $ (660,627) $ (338,979) $ (77,790)$1,025,788 $ (1,692) $1,024,096

STATEMENT OF CASH FLOWS
DATA:
Net cash provided by (used
in) operating activities... $ 11,365 $ (12,133) $ 36,286 $ 4,202 $ 5,892 $ 11,927 $ 17,819
Net cash provided by (used
in) investing activities... (1,108,690) (984,724) (69,966) (39,768) (2,737) 78,873 76,136
Net cash provided by (used
in) financing activities... 1,612,200 475,751 83,094 89,586 (10,884) (76,128) (87,012)
Purchases of property
and equipment.............. 658,283 958,945 71,248 39,018 2,737 2,255 4,992

BALANCE SHEET DATA (AT END
OF PERIOD):
Cash and cash equivalents.. $ 552,653 $ 31,547 $ 80,961 $ 85,567 $ 73,442 $ 87,904 $ 87,904
Total assets............... 3,054,105 3,203,425 2,578,456 2,834,032 2,577,575 1,597,487 1,597,487
Total long-term debt....... 1,709,055 2,326,177 792,083 2,446,833 783,442 707,383 707,383
Liabilities subject to
compromise.............. -- -- 1,763,286 -- 1,763,286 -- --
Total stockholders'
equity (deficit)... 1,224,800 719,345 (75,127) 252,567 (96,678) 684,166 684,166

SELECTED OPERATING DATA
(AT END OF PERIOD):
EBITDA (4) (5)............. $ 32,904 $ (74,307) $ 93,724 $ 26,298 $ 12,181 $ 26,009 $ 38,190
Number of owned or
operated towers......... 5,030 7,925 8,036 8,015 8,035 7,488 7,488

-------------------------------

(1) On February 10, 2003, we emerged from chapter 11. References to the
combined predecessor and reorganized company represent the one month period
ended January 31, 2003 for the predecessor company and the two months ended
March 31, 2003 for the reorganized company. In accordance with AICPA
Statement of Position 90-7 FINANCIAL REPORTING BY ENTITIES IN
REORGANIZATION UNDER THE BANKRUPTCY CODE ("SOP 90-7"), we adopted "fresh
start" accounting as of January 31, 2003 and our emergence from chapter 11
resulted in a new reporting entity. Under "fresh start" accounting, the
reorganization value of the entity is allocated to the entity's assets
based on fair values, and liabilities are stated at the present value of
amounts to be paid determined at appropriate current interest rates. The
net effect of all fresh start accounting adjustments resulted in a charge
of $644.7 million, which is reflected in the statement of operations for
the one month ended January 31, 2003. The effective date is considered to
be the close of business on January 31, 2003 for financial reporting
purposes. The periods presented prior to January 31, 2003 have been
designated "predecessor company" and the periods subsequent to January 31,
2003 have been designated "reorganized company." As a result of the
implementation of fresh start accounting as of January 31, 2003, our
financial statements after the effective date are not comparable to our
financial statements for prior periods because of differences in the bases
of accounting and the capital structure for the predecessor company and the
reorganized company.

(2) On February 10, 2003, we sold 545 towers to Cingular. See "Management's
Discussion and Analysis of Financial Condition and Results of Operations --
Tower Acquisitions and Dispositions" for a presentation of the three months
ended March 31, 2003, giving effect to the sale as if it had occurred on
January 1, 2003.

(3) Depreciation, amortization and accretion expense for the one-month and
two-month periods are not proportional because the predecessor company and
the reorganized company used different bases of accounting.

(4) EBITDA consists of operating income (loss) before depreciation,
amortization, accretion and non-cash compensation charges. EBITDA is
provided because it is a measure commonly used in the communications site
industry as a measure of a company's operating performance. We use this
measure to compare our operating performance with that of our competitors.
EBITDA is not a measurement of financial performance under generally
accepted accounting principles and should not be considered as an
alternative to net income as a measure of performance or to cash flow as a
measure of liquidity. EBITDA is not necessarily comparable with similarly
titled measures for other companies. We believe that EBITDA can

assist in comparing company performance on a consistent basis without
regard to amounts such as depreciation and amortization, which may vary
significantly depending on accounting methods or non-operating factors such
as historical cost bases. EBITDA was calculated as follows for the periods
indicated:

COMBINED
PREDECESSOR
AND
REORGANIZED REORGANIZED
PREDECESSOR COMPANY COMPANY COMPANY
---------------------------------------------------------- ----------- -----------
THREE TWO THREE
MONTHS ONE MONTH MONTHS MONTHS
YEAR ENDED DECEMBER 31, ENDED ENDED ENDED ENDED
----------------------------------- MARCH 31, JANUARY 31, MARCH 31, MARCH 31,
2000 2001 2002 2002 2003 2003 2003
---------- ---------- ---------- ---------- ---------- ---------- ----------
(DOLLARS IN THOUSANDS)

Operating income
(loss).......... $ (47,771) $ (241,699) $ (96,907) $ (18,629)$ (3,894) $ 9,183 $ 5,289
Depreciation,
amortization and
accretion
expense......... 78,103 165,267 189,936 44,638 16,075 16,826 32,901
Non-cash
compensation
chargesRevenues: 2,572 2,125 695 289 -- -- --
---------- ---------- ---------- ---------- ---------- ---------- ----------
EBITDA $ 32,904 $ (74,307) $ 93,724 $ 26,298 $ 12,181 $ 26,009 $ 38,190
========== ========== ========== ========== ========== ========== ==========

(5) EBITDA for the year ended December 31, 2001 does not exclude restructuring
and non-recurring charges of approximately $142.6 million relating to the
consolidation of our rooftop management operations, the divestiture of our
operations in Mexico, the closing of operations from the purchase of
Vertical Properties, and the reduction of our planned new tower
construction and acquisition programs for 2002. EBITDA for the year ended
December 31, 2002 does not exclude restructuring and non-recurring charges
of approximately $28.6 million, relating to the termination of our
build-to-suit programs with Cingular and other carriers, the writedown of
towers that were impaired and other cost cutting measures. See
"Management's Discussion and Analysis of Financial Condition and Results of
Operations" included elsewhere in this document for further discussion of
these charges.

RISK FACTORS

INVESTING IN OUR COMMON STOCK INVOLVES SUBSTANTIAL RISKS. IN ADDITION
TO THE OTHER INFORMATION IN THIS PROSPECTUS, YOU SHOULD CAREFULLY CONSIDER THE
FOLLOWING FACTORS BEFORE INVESTING IN OUR COMMON STOCK. ANY OF THE RISK FACTORS
WE DESCRIBE BELOW COULD ADVERSELY AFFECT OUR BUSINESS, FINANCIAL CONDITION OR
RESULTS OF OPERATIONS. THE MARKET PRICE OF OUR COMMON STOCK COULD DECLINE IF ONE
OR MORE OF THESE RISKS AND UNCERTAINTIES DEVELOP INTO ACTUAL EVENTS. YOU MAY
LOSE ALL OR PART OF THE MONEY YOU PAID TO BUY OUR COMMON STOCK. WHILE THESE ARE
THE RISKS AND UNCERTAINTIES THAT WE BELIEVE ARE MOST IMPORTANT FOR YOU TO
CONSIDER, YOU SHOULD KNOW THAT THEY ARE NOT THE ONLY RISKS OR UNCERTAINTIES
FACING US OR WHICH MAY ADVERSELY AFFECT OUR BUSINESS. CERTAIN STATEMENTS IN
"RISK FACTORS" ARE FORWARD-LOOKING STATEMENTS. SEE "FORWARD-LOOKING STATEMENTS."

RISKS RELATING TO OUR BUSINESS

WE RECENTLY EMERGED FROM A CHAPTER 11 BANKRUPTCY REORGANIZATION AND
HAVE A HISTORY OF LOSSES.

On November 15, 2002, we filed a voluntary petition for relief under
chapter 11 of the Bankruptcy Code. We emerged from bankruptcy on February 10,
2003. We incurred net losses of approximately $157.6 million in 2000, $654.8
million in 2001 and $775.0 million in 2002. We adopted "fresh start" accounting
as of January 31, 2003 and our emergence from chapter 11 resulted in a new
reporting entity. The net effect of all fresh start accounting adjustments
resulted in a charge of $644.7 million, which is reflected in the statement of
operations for the one month ended January 31, 2003. We cannot assure you that
we will grow or achieve profitability in the near future, or at all.

OUR HISTORICAL FINANCIAL INFORMATION IS NOT COMPARABLE TO OUR CURRENT
FINANCIAL CONDITION AND RESULTS OF OPERATIONS.

As a result of our emergence from bankruptcy, we are operating our
business with a new capital structure. We also are subject to the "fresh start"
accounting prescribed by generally accepted accounting principles, and our
balance sheet as of January 31, 2003 reflects the application of these rules.
Accordingly, our financial condition and results of operations will not be
comparable to the financial condition and results of operations reflected in our
historical financial statements contained in this prospectus, which may make it
difficult for you to assess our future prospects based on our historical
performance.

THE FINANCIAL AND OPERATING DIFFICULTIES IN THE WIRELESS
TELECOMMUNICATIONS SECTOR MAY NEGATIVELY AFFECT OUR CUSTOMERS AND OUR
COMPANY.

Recently, the wireless telecommunications sector has been facing
significant challenges resulting from intense competition and financial
difficulties. As a result, some of our customers face uncertain financial
circumstances. The impact to us could include a reduced demand for
communications sites, higher bad debt expense, lower pricing on new customer
contracts and possible consolidation among our customers. In addition, because
we are considered to operate in the wireless telecommunications sector, we may
also be negatively impacted by limited access to debt and equity capital.

OUR BUSINESS DEPENDS ON DEMAND FOR WIRELESS COMMUNICATIONS SITES AND
OUR ABILITY TO SECURE ADDITIONAL TENANTS.

Our business depends on demand for communications sites from wireless
service providers, which, in turn, depends on consumer demand for wireless
services. A reduction in demand for communications sites or increased
competition for additional tenants could have a material adverse effect on our
business, financial condition or results of operations. The extent to which
wireless service providers lease communications sites on our towers depends on,
among other things, the level of demand by consumers for wireless services, the
financial condition and access to capital of those providers, the strategy of
providers with respect to owning, leasing or sharing communications sites,
available spectrum and related infrastructure, consolidation among our customers
and potential customers, government regulation of communications licenses,
changes in telecommunications regulations, the characteristics of each company's
technology, and geographic terrain. The demand for communications sites may
decrease

significantly or fail to grow from current levels, which could have a material
adverse effect on our business, financial condition or results of operations.

CONSOLIDATION IN THE WIRELESS INDUSTRY COULD HAVE A NEGATIVE IMPACT ON
THE DEMAND FOR OUR SERVICES.

Various wireless service providers, which are our primary existing and
potential customers, could enter into mergers, acquisitions or joint ventures
with each other over time. Consolidation in the wireless industry could have a
negative impact on the demand for our services. Recent regulatory developments
have made consolidation in the wireless industry easier and more likely. Until
recently, cellular and PCS providers were subject to a spectrum aggregation cap
of 45 MHz in any geographic area. This rule limited the ability of wireless
carriers to consolidate. In November 2001, the Federal Communications
Commission, or "FCC," raised this limit to 55 MHz. On January 1, 2003, the
spectrum cap was eliminated completely in favor of a case-by-case review of
spectrum transactions. The FCC also lifted, for major metropolitan areas, a
previous rule limiting the ownership by a single entity of interests in both
cellular carriers in an overlapping cellular service area. In addition, in May
2003, the FCC adopted new rules authorizing spectrum leasing for a variety of
wireless radio services. It is possible that at least some wireless service
providers may take advantage of this relaxation of spectrum and ownership
limitations and consolidate their businesses. Industry consolidation could have
a material adverse impact on our business, financial condition or results of
operations.

THE INCREASE IN THE SPECTRUM AVAILABLE FOR WIRELESS SERVICES MAY IMPACT
THE DEMAND FOR OUR COMMUNICATION TOWERS.

It is expected that additional spectrum for the provision of wireless
services will be made available over the next few years. For example, the FCC is
required to make available for commercial use a portion of the frequency
spectrum currently reserved for government use. Some portion of this spectrum
may be used to create new land-mobile services or to expand existing offerings.
Further, the FCC has auctioned or announced plans to auction large blocks of
spectrum that will in the future be used to expand existing wireless networks
and create new or advanced wireless services. This additional spectrum could be
used to replace existing spectrum, and could be deployed in a manner that
reduces the need for communications towers to transmit signals over existing
spectrum. Any increased spectrum could have a material adverse impact on our
business, financial condition or results of operations.

A SIGNIFICANT PORTION OF OUR REVENUES DEPENDS ON NEXTEL AND CINGULAR.

Nextel (including its affiliates) and Cingular account for a
significant portion of our total revenues. Nextel and Cingular represented
approximately 28% and 20%, respectively, of our revenues for each of 2002 and
the three months ended March 31, 2003. If Nextel, Cingular or any of the other
major wireless carriers were to suffer financial difficulties or were unwilling
or unable to perform their obligations under their arrangements with us, our
business, financial condition or results of operations could be materially and
adversely affected.

WE FACE SIGNIFICANT COMPETITION FROM A VARIETY OF SOURCES.

If we are unable to successfully compete, our business will suffer. We
believe that tower location and capacity, price, quality of service and density
within a geographic market historically have been, and will continue to be, the
most significant competitive factors affecting the site leasing business. We
compete for site leasing tenants with:

o wireless service providers that own and operate their own
towers and lease, or may in the future decide to lease,
antenna space to other providers;

o other independent tower operators; and

o owners of non-tower antenna sites, including rooftops, water
towers and other alternate structures.

COMPETING TECHNOLOGIES AND OTHER SERVICE OPTIONS OFFER ALTERNATIVES TO
GROUND-BASED ANTENNA SYSTEMS AND ALLOW OUR CUSTOMERS TO INCREASE
WIRELESS CAPACITY WITHOUT INCREASED USE OF GROUND-BASED FACILITIES,
BOTH OF WHICH COULD REDUCE THE DEMAND FOR OUR SERVICES.

Most types of wireless and broadcast services currently require
ground-based network facilities, including communications sites for transmission
and reception. The development and growth of communications technologies that do
not require ground-based sites could reduce the demand for space on our towers,
as could certain other alternatives.

In particular, the emergence of new technologies that do not require
ground-based antenna sites could have a negative impact on our operations. For
example, the growth in delivery of video, voice and data services by satellites,
which allow communication directly to users' terminals without the use of
ground-based facilities, could lessen demand for our services. Low earth orbit
satellite systems provide mobile voice and data services to consumers, as well
as to government and defense industry customers. Other geostationary orbit
satellite systems provide television and Internet access services directly to
home and small office users.

Moreover, the FCC has issued licenses for several additional satellite
systems (including low earth orbit systems) that are intended to provide more
advanced, high-speed data services directly to consumers. Although these
satellite systems are highly capital-intensive, they compete with land-based
wireless communications systems, thereby reducing the demand for the services
that we provide.

Technological developments are also making it possible for carriers to
expand their use of existing facilities to provide service without additional
tower facilities. The increased use by carriers of signal combining and related
technologies, which allow two or more carriers to provide services on different
transmission frequencies using the communications antenna and other facilities
normally used by only one carrier, could reduce the demand for tower-based
broadcast transmissions and antenna space. In addition to sharing transmitters,
carriers are, through joint ventures and other arrangements (such as Cingular's
infrastructure joint ventures with T-Mobile and AT&T Wireless), sharing (or
considering the sharing of) telecommunications infrastructure in ways that might
adversely impact the growth of our business.

In addition, wireless service providers frequently enter into
agreements with competitors allowing them to utilize one another's wireless
communications facilities to accommodate customers who are out of range of their
home providers' services. These roaming agreements may be viewed by wireless
service providers as a superior alternative to leasing space for their own
antennas on communications sites we own.

Any of the conditions and developments described above could reduce
demand for ground-based antenna sites and have a material adverse effect on our
business, financial condition or results of operations.

WE MAY BE UNABLE TO MODIFY TOWERS AND ADD NEW CUSTOMERS AS CONTEMPLATED
BY OUR BUSINESS PLAN.

Our business depends on our ability to modify towers and add new
customers as they expand their tower network infrastructure. Regulatory and
other barriers could adversely affect our ability to modify towers in accordance
with the requirements of our customers, and, as a result, we may not be able to
meet our customers' requirements. Our ability to modify towers and add new
customers to towers may be affected by a number of factors beyond our control,
including zoning and local permitting requirements, Federal Aviation
Administration, or "FAA," considerations, FCC tower registration procedures,
availability of tower components and construction equipment, availability of
skilled construction personnel, weather conditions and environmental compliance
issues. In addition, because the concern over tower proliferation has grown in
recent years, many communities now restrict tower modifications or delay
granting permits required for adding new tenants.

We may not be able to overcome the barriers to modification or
installation of new customers. Our failure to complete the necessary
modifications could have a material adverse effect on our business, financial
condition or results of operations.

WE MAY ENCOUNTER DIFFICULTIES IN INTEGRATING ACQUISITIONS WITH OUR
OPERATIONS, WHICH COULD LIMIT OUR REVENUE GROWTH AND OUR ABILITY TO
ACHIEVE OR SUSTAIN PROFITABILITY.

We have agreed to complete the sublease of 600 towers from SBC between
May 2003 and August 2004. The process of integrating acquired operations into
our existing operations may result in unforeseen operating difficulties, divert
managerial attention or require significant financial resources. These subleases
and other future acquisitions will require us to incur additional indebtedness
and contingent liabilities, which could have a material adverse effect on our
business, financial condition or results of operations.

A SMALL NUMBER OF STOCKHOLDERS BENEFICIALLY OWN A SUBSTANTIAL AMOUNT OF
OUR COMMON STOCK AND COULD SIGNIFICANTLY AFFECT MATTERS REQUIRING A
STOCKHOLDER VOTE.

After giving effect to the offering, affiliates of Apollo Management V,
L.P. will own approximately 4.1 million shares, or 17.4%, of our common stock
and certain funds managed by Oaktree Capital Management, LLC will own
approximately 3.6 million shares, or 15.2%, of our common stock. In addition,
each of Apollo and Oaktree has a representative on our board of directors. As a
result, Apollo and Oaktree are able to exert significant influence over the
management and policies of SpectraSite and may have interests that are different
from yours.

OUR BUSINESS DEPENDS ON OUR KEY PERSONNEL.

Our future success depends to a significant extent on the continued
services of our Chief Executive Officer, Stephen H. Clark, our Chief Operating
Officer, Timothy G. Biltz, and our Chief Financial Officer, David P. Tomick.
Although each of these officers has an employment agreement with SpectraSite,
the loss of any of these key employees would likely have a significantly
detrimental effect on our business.

OUR OPERATIONS REQUIRE COMPLIANCE WITH AND APPROVAL FROM FEDERAL, STATE
AND LOCAL REGULATORY AUTHORITIES.

We are subject to a variety of regulations, including those at the
federal, state and local levels. Both the FCC and the FAA regulate towers and
other sites used for wireless communications transmitters and receivers. These
regulations control the siting, marking, and lighting of towers and generally,
based on the characteristics of the tower, require registration of tower
facilities with the FCC. Wireless and broadcast communications antennas
operating on towers are separately regulated and independently authorized by the
FCC based upon the particular frequency used and the services provided. Any
proposals to construct new communications sites or modify existing
communications sites that could affect air traffic must be filed with and
reviewed by the FAA to ensure that the proposals will not present a hazard to
aviation. Tower owners may have an obligation to mark their towers or install
lighting to conform to FCC and FAA standards and to maintain such marking or
lighting. Tower owners also bear the responsibility for notifying the FAA of any
tower lighting failure. We generally outsource the monitoring of the lighting of
our towers to contractors that specialize in those services. However, under the
FCC's rules, we remain fully liable for the acts or omissions of our
contractors. We generally indemnify our customers against any failure by us to
comply with applicable standards. Failure to comply with applicable requirements
(including as a result of acts or omissions of our contractors, which may be
beyond our control) may lead to monetary forfeitures or other enforcement
actions, as well as civil penalties, contractual liability and/or tort
liability, any of which could have an adverse impact on our business.

Local regulations and restrictions include building codes and other
local ordinances, zoning restrictions and restrictive covenants imposed by
community developers. These regulations and restrictions vary greatly, but
typically require tower owners to obtain a permit or other approval from local
officials or community standards organizations prior to tower construction and
prior to modifications of towers, including installation of equipment for new
customers. Local regulations can delay or prevent new tower construction or
modifications, thereby limiting our ability to respond to customers' demands. In
addition, these regulations increase the costs associated with new tower
construction and modifications. Existing regulatory policies may adversely
affect the timing or cost of new tower construction and modification, and
additional regulations may be adopted that will increase these delays or result
in additional costs to us. These factors could have a material adverse effect on
our business, financial condition or results of operations and on our ability to
implement or achieve our business objectives.

In June 2003, the FCC issued a Notice of Proposed Rulemaking seeking
comment on a draft agreement between the FCC, the Advisory Council on Historic
Preservation and the National Conference of State Historic Preservation Officers
that would tailor and streamline procedures for review of towers and other FCC
licensed communications facilities under the National Historic Preservation Act
of 1966, or "NHPA", and on related revisions to the FCC's rules. The FCC has
indicated that the intent of the agreement and the proposed rule revisions is to
improve compliance with the NHPA and streamline the review process for
construction of towers and other FCC licensed communications facilities. We
cannot predict with certainty whether, and if so when, the FCC's proposals will
be adopted, and, if they are, the effect they will have on our business.

WE GENERALLY LEASE OR SUBLEASE THE LAND UNDER OUR TOWERS AND MAY NOT BE
ABLE TO MAINTAIN THESE LEASES.

Our real property interests relating to towers primarily consist of
leasehold and sub-leasehold interests, private easements and licenses and
easements and rights-of-way granted by governmental entities. A loss of these
interests for any reason, including losses arising from the bankruptcy of a
significant number of our lessors, from the default by a significant number of
our lessors under their mortgage financing or from a challenge to our ownership
interest, would interfere with our ability to conduct our business and generate
revenues. Our ability to protect our rights against persons claiming superior
rights in towers depends on our ability to:

o recover under title policies, the policy limits of which may
be less than the purchase price of a particular tower;

o in the absence of title insurance coverage, recover under
title warranties given by tower sellers, which warranties
often terminate after the expiration of a specific period,
typically one to three years;

o recover from landlords under title covenants contained in
lease agreements; and

o obtain so-called "non-disturbance agreements" from mortgagees
and superior lessors of the land under our towers.

Our inability to protect our rights to the land under our towers could
have a material adverse affect on our business, financial condition and results
of operations.

WE ARE SUBJECT TO ENVIRONMENTAL LAWS THAT IMPOSE LIABILITY WITHOUT
REGARD TO FAULT.

Owners and operators of communications towers are subject to
environmental laws and regulations. These regulations place responsibility on
each applicant to investigate potential environmental and other effects of
operations and to disclose any significant effects in an environmental
assessment prior to constructing a tower or adding a new tenant on a tower. In
the event the FCC determines that a proposed tower would have a significant
environmental impact, the FCC would be required to prepare an environmental
impact statement. This regulatory process could be costly and could
significantly delay the registration of a particular tower. In addition, we are
subject to environmental laws that may require investigation and clean up of any
contamination at facilities we own or operate or at third-party waste disposal
sites. These laws could impose liability even if we did not know of, or were not
responsible for, the contamination. Although we believe that we currently have
no material liability under applicable environmental laws, the costs of
complying with existing or future environmental laws, responding to petitions
filed by environmental protection groups, investigating and remediating any
contaminated real property and resolving any related liability could have a
material adverse effect on our business, financial condition or results of
operations.

OUR TOWERS MAY BE DAMAGED BY DISASTERS.

Our towers are subject to risks associated with natural disasters such
as ice and wind storms, tornadoes, hurricanes and earthquakes as well as other
unforeseen damage. We self-insure almost all of our towers against such risks. A
tower accident for which we do not have adequate self-insurance reserves or are
underinsured, or damage to a tower or group of towers, could have a material
adverse effect on our business, financial condition or results of operations.

PERCEIVED HEALTH RISKS OF RADIO FREQUENCY EMISSIONS COULD IMPACT OUR
BUSINESS.

The wireless service providers that utilize our sites are subject to
FCC requirements and other guidelines relating to radio frequency emissions. FCC
safety guidelines apply to all cellular and personal communications service
hand-held telephones that were authorized by the FCC after August 1, 1996. The
safety guidelines for radio frequency emissions from our sites require us to
undertake safety measures to protect workers whose activities bring them into
proximity with the emitters and to restrict access to our sites by others. If
radio frequency emissions were found harmful, our tenants and possibly we could
face lawsuits claiming damages from such emissions, and demand for wireless
services and new towers, and thus our business, financial condition and results
of operations could be adversely affected. Although we have not been subject to
any claims relating to radio frequency emissions, we cannot assure you that
these claims will not arise in the future.

OUR SUBSTANTIAL INDEBTEDNESS COULD IMPAIR OUR FINANCIAL CONDITION.

Even after our recent restructuring, we are, and will continue to be,
highly leveraged. As of March 31, 2003, after giving effect to the offering of
our senior notes, we would have had $712.9 million of consolidated debt. Our
high level of indebtedness could have important consequences to us. For example,
it could:

o increase our vulnerability to general adverse economic and
industry conditions;

o limit our ability to obtain additional financing;

o require the dedication of a substantial portion of our cash
flow from operations to the payment of principal of, and
interest on, our indebtedness;

o limit our flexibility in planning for, or reacting to, changes
in our business and the industry; and

o place us at a competitive disadvantage relative to less
leveraged competitors.

Our ability to generate sufficient cash flow from operations to pay the
principal of, and interest on, our indebtedness is uncertain. In particular, we
may not meet our anticipated revenue growth and operating expense targets, and,
as a result, our future debt service obligations, including our obligations on
our senior notes, could exceed cash available to us. Further, we may not be able
to refinance any of our indebtedness on commercially reasonable terms or at all.

In addition, we may be able to incur significant additional
indebtedness in the future. To the extent new debt is added to our current debt
levels, the substantial leverage risks described above would increase, which
could have a material adverse effect on our business, financial condition or
results of operations.

REPAYMENT OF THE PRINCIPAL OF OUR OUTSTANDING INDEBTEDNESS, INCLUDING
OUR SENIOR NOTES, MAY REQUIRE ADDITIONAL FINANCING. WE ARE NOT CERTAIN
OF THE SOURCE OR AVAILABILITY OF ANY SUCH FINANCING AT THIS TIME.

Our ability to generate sufficient cash flow from operations to make
scheduled payments on our debt obligations, including our senior notes, will
depend on our future financial performance, which will be affected by a range of
economic, competitive, regulatory, legislative and business factors, many of
which are beyond our control. In addition, we currently anticipate that, in
order to pay the principal of our outstanding indebtedness, including our senior
notes, or to repay such indebtedness upon a change of control as defined in the
instruments governing our

indebtedness, we may be required to adopt one or more alternatives, such as
refinancing our indebtedness or selling our equity securities or the equity
securities or assets of our subsidiaries. We cannot assure you that we could
affect any of the foregoing alternatives on terms satisfactory to us, that any
of the foregoing alternatives would enable us to pay the interest or principal
of our indebtedness or that any of such alternatives would be permitted by the
terms of our credit facility and other indebtedness then in effect.

THE TERMS OF OUR CREDIT FACILITY AND THE INDENTURE RELATING TO OUR
SENIOR NOTES MAY RESTRICT OUR CURRENT AND FUTURE OPERATIONS,
PARTICULARLY OUR ABILITY TO RESPOND TO CHANGES IN OUR BUSINESS OR TO
TAKE CERTAIN ACTIONS.

Our credit facility and the indenture relating to our senior notes
contain, and any future indebtedness of ours would likely contain, a number of
restrictive covenants that impose significant operating and financial
restrictions on us, including restrictions on our ability to, among other
things:

o incur additional debt;

o pay dividends and make other restricted payments;

o create liens;

o make investments;

o engage in sales of assets and subsidiary stock;

o enter into sale-leaseback transactions;

o enter into transactions with affiliates;

o transfer all or substantially all of our assets or enter into
merger or consolidation transactions; and

o make capital expenditures.

The credit facility also requires us to maintain certain financial
ratios. A failure by us to comply with the covenants or financial ratios
contained in the credit facility could result in an event of default under the
facility which could materially and adversely affect our operating results and
our financial condition. In the event of any default under our credit facility,
the lenders under our credit facility will not be required to lend any
additional amounts to us. The lenders also could elect to declare all borrowings
outstanding, together with accrued and unpaid interest and fees, to be due and
payable, require us to apply all of our available cash to repay these borrowings
or prevent us from making debt service payments on our senior notes, any of
which could result in an event of default under our senior notes. If the
indebtedness under our credit facility or our senior notes were to be
accelerated, there can be no assurance that our assets would be sufficient to
repay this indebtedness in full.

RISKS RELATING TO THIS OFFERING

WE DO NOT INTEND TO PAY DIVIDENDS IN THE FORESEEABLE FUTURE AND,
BECAUSE WE ARE A HOLDING COMPANY, WE MAY BE UNABLE TO PAY DIVIDENDS.

We have never declared or paid any cash dividends on our common stock.
For the foreseeable future, we intend to retain any earnings to finance the
development and expansion of our business, and we do not anticipate paying any
cash dividends on our common stock. In addition, our credit facility and the
indenture governing our senior notes restrict our ability to pay dividends. Any
future determination to pay dividends will be at the discretion of our board of
directors and will be dependent upon then existing conditions, including our
financial condition and results of operations, capital requirements, contractual
restrictions, business prospects and other factors that the board of directors
considers relevant. Furthermore, because we are a holding company, we depend on
the cash flow of our subsidiaries, and Communications' credit facility imposes
restrictions on our subsidiaries' ability to distribute cash to us.

OUR STOCK PRICE MAY BE VOLATILE, AND YOU MAY BE UNABLE TO RESELL YOUR
SHARES AT OR ABOVE THE OFFERING PRICE.

Prior to the offering, there has been a limited public market for our
common stock and no prediction can be made as to the effect, if any, that this
offering will have on the market price of the common stock. The market price of
our common stock could be subject to wide fluctuations as a result of many
factors, including those listed in this "Risk Factors" section of this
prospectus. As a result of these factors, you may not be able to resell your
shares at or above the public offering price.

In recent years, the stock market has experienced significant price and
volume fluctuations that are often unrelated to the operating performance of
specific companies. Our market price may fluctuate based on a number of factors,
including:

o quarterly variations in our operating results;

o operating results that vary from the expectations of
securities analysts and investors;

o changes in expectations as to our future financial
performance, including financial estimates by securities
analysts and investors;

o announcements of technological innovations or new services by
us or our competitors;

o announcements of significant contracts, acquisitions,
strategic partnerships, joint ventures or capital commitments
by us or our competitors;

o additions or departures of key personnel;

o future sales of our common stock; and

o stock market price and volume fluctuations.

SUBSTANTIAL SALES OF OUR COMMON STOCK COULD ADVERSELY AFFECT OUR
STOCK PRICE.

Sales of a substantial number of shares of our common stock into the
public market after this offering, or the perception that these sales could
occur, could adversely affect our stock price. As of June 30, 2003, we have
23,743,515 shares of common stock outstanding. We have reserved an additional
67,933 shares of common stock issuable in connection with further distributions
pursuant to our plan of reorganization. We have also reserved an additional
2,938,582 shares of common stock for issuance under our stock option plan and
1,249,970 shares of common stock for issuance upon the exercise of warrants. All
of our outstanding shares of common stock, as well as the shares of common stock
issuable in connection with our emergence from bankruptcy and upon exercise of
outstanding stock options and warrants, are or will be freely tradable without
restriction or further registration under the federal securities laws, except to
the extent they are held by one or our affiliates, as that term is defined in
Rule 144 under the Securities Act. Upon the completion of this offering the
selling stockholders will hold approximately 50.0% of the outstanding shares of
our common stock, or approximately 47.2% if the underwriters' over-allotment
option is exercised in full. After the expiration of the 120 day "lock-up"
period to which all of the selling stockholders and our directors and executive
officers are subject, these individuals and entities will be entitled to dispose
of their remaining shares, although the shares of common stock held by our
affiliates will continue to be subject to the volume and other restrictions of
Rule 144 under the Securities Act of 1933. In addition, Goldman, Sachs & Co.
may, in its sole discretion and at any time without notice, release all or a
portion of the shares subject to the lock-up. The shares that are released from
the lock-up will be freely tradable without restriction or further registration
under the federal securities laws, except to the extent they are held by one of
our affiliates, as that term is defined in Rule 144 under the Securities Act.

After giving effect to the sale of common stock in this offering (and
assuming that the underwriters do not exercise the over-allotment option granted
to them by the selling stockholders), three stockholders holding an aggregate of
approximately 10.2 million shares of our common stock (including shares issuable
upon the exercise of

outstanding options) have the right (subject to limited conditions) to require
us to file registration statements covering their shares or to include their
shares in registration statements that we may file for ourselves or other
stockholders. Sales by these stockholders in a registered public offering would
not be subject to the limitations of Rule 144 under the Securities Act. By
exercising their registration rights and selling a large number of shares, these
holders could cause the price of our common stock to decline.

FORWARD-LOOKING STATEMENTS

This prospectus contains forward-looking statements within the meaning
of Section 27A of the Securities Act, Section 21E of the Securities Exchange Act
of 1934, as amended, and the Private Securities Litigation Reform Act of 1995
that are subject to risks and uncertainties. You should not place undue reliance
on those statements because they are subject to numerous uncertainties and
factors relating to our operations and business environment, all of which are
difficult to predict and many of which are beyond our control. Forward-looking
statements include information concerning our possible or assumed future results
of operations, including descriptions of our business strategy. These statements
often include words such as "may," "believe," "expect," "anticipate," "intend,"
"plan," "estimate" or similar expressions. These statements are based on
assumptions that we have made in light of our experience in the industry as well
as our perceptions of historical trends, current conditions, expected future
developments and other factors we believe are appropriate under the
circumstances. As you read and consider this prospectus, you should understand
that these statements are not guarantees of performance or results. They involve
risks, uncertainties and assumptions. Although we believe that these
forward-looking statements are based on reasonable assumptions, you should be
aware that many factors could affect our actual financial results or results of
operations and could cause actual results to differ materially from those in the
forward-looking statements. These factors include but are not limited to:

o substantial leverage and capital requirements, even after our
emergence from chapter 11;

o dependence on demand for wireless communications;

o our ability to add tenants on our towers;

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

o future regulatory actions and conditions in our operating
areas;

o competition from others in the communications tower industry;

o technological innovation;

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

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

You should keep in mind that any forward-looking statement made by us
in this prospectus, or elsewhere, speaks only as of the date on which we make
it. New risks and uncertainties come up from time to time, and it is impossible
for us to predict these events or how they may affect us. We have no duty to,
and do not intend to, update or revise the forward-looking statements in this
prospectus after the date of this prospectus. In light of these risks and
uncertainties, you should keep in mind that any forward-looking statement made
in this prospectus or elsewhere might not occur.

USE OF PROCEEDS

We will not receive any proceeds from the sale of shares by the selling
stockholders.

PRICE RANGE OF COMMON STOCK

Our common stock was initially available for trading on the Pink Sheets
as of February 11, 2003 and now trades on the OTC Bulletin Board under the
ticker symbol SPCS. We intend to list our common stock on the New York Stock
Exchange.

The following table sets forth on a per share basis the high and low
sales prices for consolidated trading in our common stock as reported on the
Pink Sheets or OTC Bulletin Board, as applicable, through July 16, 2003.

COMMON STOCK
----------------------
HIGH LOW
-------- --------
2003
First quarter (beginning February 11, 2003)......... $ 32.00 $ 24.50
Second quarter...................................... $ 54.10 $ 28.00
Third quarter (through July 16, 2003)............... $ 59.00 $ 49.75

As of July 16, 2003, there were approximately 9 holders of record of our common
stock, including record holders on behalf of an indeterminate number of
beneficial owners. On July 16, 2003, the last reported sale price of our common
stock price was $59.00.

DIVIDEND POLICY

We have never declared or paid any cash dividends on our common stock.
For the foreseeable future, we intend to retain any earnings and we do not
anticipate paying any cash dividends on our common stock. In addition, our
credit facility and the indenture governing our senior notes restrict our
ability to pay dividends. Any future determination to pay dividends will be at
the discretion of our board of directors and will be dependent upon then
existing conditions, including our financial condition and results of
operations, capital requirements, contractual restrictions, business prospects
and other factors that the board of directors considers relevant. Furthermore,
because we are a holding company, we depend on the cash flow of our
subsidiaries, and Communications' credit facility imposes restrictions on our
subsidiaries' ability to distribute cash to us.

CAPITALIZATION

The following table sets forth our cash and capitalization as of March
31, 2003:

o on an actual basis; and

o on an as-adjusted basis to give effect to the May 2003
issuance of $200 million of our senior notes and the use of
proceeds therefrom.

The information set forth below should be read in conjunction with "Use
of Proceeds," "Management's Discussion and Analysis of Financial Condition and
Results of Operations" and our consolidated financial statements and related
notes included elsewhere in this prospectus.

AS OF MARCH 31, 2003 (1)
-------------------------------------
ACTUAL AS-ADJUSTED (2)
---------------- ----------------
(DOLLARS IN THOUSANDS)

Cash and cash equivalents (3)........................................ $ 87,904 $ 86,904
Long-term debt:
Credit facility (4)............................................. $ 706,955 $ 512,455
8 1/4% senior notes due 2010.................................... -- 200,000
Other debt...................................................... 428 428
Total long-term debt......................................... $ 707,383 $ 712,883
Stockholders' equity (deficit):
Common Stock, $0.01 par value, 250,000,000 shares authorized,
23,587,085 issued and outstanding (5)........................ 236 236
Additional paid-in-capital........................................ 685,494 685,494
Accumulated other comprehensive income (loss)..................... 128 128
Accumulated deficit (6)........................................... (1,692) (7,589)
Total stockholders' equity (deficit)............................ 684,166 678,269
Total capitalization........................................ $ 1,391,549 $ 1,391,152

----------------------------

(1) Our capitalization as of March 31, 2003 does not give effect to the
estimated expenses of $1.0 million payable by us in connection with this
offering.

(2) The "As-Adjusted" column reflects the use of the net proceeds from the May
2003 offering of our senior notes to repay a portion of the outstanding
term loans under the credit facility.

(3) Includes estimated costs from the May 2003 offering of our senior notes of
approximately $1.0 million.

(4) On an As-Adjusted basis, the credit facility includes a $200 million
revolving credit facility, a $218.7 million multiple draw term loan and a
$293.8 million term loan. As of March 31, 2003, the revolving credit
facility was undrawn and the term loans were fully drawn. The weighted
average interest rate on outstanding borrowings under the credit facility
was 5.17% as of March 31, 2003 and 5.22% after giving effect to the May
2003 offering of our senior notes and the use of proceeds therefrom.

(5) As of June 30, 2003, we had 23,743,515 shares outstanding. An additional
67,933 shares are subject to issuance pursuant to further distributions
under our plan of reorganization. In addition, as of June 30, 2003, we have
1,249,970 warrants outstanding that are exercisable into our common stock
on a one for one basis at an exercise price of $32.00 per share. As of June
30, 2003, options to purchase 2,731,357 shares of our common stock are
outstanding and 207,225 shares are available for future awards under our
equity incentive plan.

(6) In connection with the reduction of the revolving portion of the credit
facility and the repayment of the term loans with the proceeds from the
offering of our senior notes, we wrote off approximately $5.9 million of
associated debt issuance costs.

SELECTED CONSOLIDATED FINANCIAL AND OTHER DATA

The following table sets forth selected historical consolidated
financial and other data. We refer to the periods prior to our emergence from
chapter 11 as "predecessor company" and to the periods subsequent to that date
as "reorganized company." The balance sheet data as of December 31, 1998, 1999,
2000, 2001 and 2002 and the statement of operations data for the years ended
December 31, 1998, 1999, 2000, 2001 and 2002 are derived from our audited
consolidated financial statements. The balance sheet data as of March 31, 2002,
January 31, 2003 and March 31, 2003 and the statement of operations data for the
three months ended March 31, 2002 and for the one month ended January 31, 2003
for the predecessor company, the two months ended March 31, 2003 for the
reorganized company and the three months ended March 31, 2003 for the combined
predecessor and reorganized company are derived from our unaudited financial
statements. In our opinion, the unaudited financial data include all adjustments
(consisting only of normal recurring adjustments for the predecessor company for
the three months ended March 31, 2002 and normal recurring adjustments and fresh
start accounting adjustments for the predecessor company for the one month
period ended January 31, 2003, for the reorganized company for the two months
ended March 31, 2003 and for the combined predecessor and reorganized company
for the three months ended March 31, 2003) necessary to present fairly the
information set forth therein.

PREDECESSOR COMPANY (1)
-----------------------------------------------------------------------------------
THREE
MONTHS ONE MONTH
YEAR ENDED DECEMBER 31, ENDED ENDED
---------------------------------------------------------- MARCH 31, JANUARY 31,
1998 1999 2000 2001 2002 2002 2003
---------- ---------- ---------- ---------- ---------- ---------- ----------
(DOLLARS IN THOUSANDS)

STATEMENT OF OPERATIONS DATA:
Revenues:
Site leasing............ $ 656 $ 46,515 $ 116,476 $ 221,614 $ 282,525 $ 65,952 $ 25,556
Broadcast services...... 8,142 12,624 38,593 38,211 26,809 6,452 1,237
---------- ---------- ---------- ---------- ---------- ---------- ----------
Total revenues....... $ 8,798 $ 59,139 $ 155,069 $ 259,825 $ 309,334 $ 72,404 $ 26,793
---------- ---------- ---------- ---------- ---------- ---------- ----------
Operating expenses:
Costs of operations
(excluding depreciation,
amortization and accretion
expense):
Site leasing......... $ 299 $ 17,825 $ 46,667 $ 91,689 $ 108,540 $ 25,505 $ 8,840
Broadcast services... 2,492 5,572 26,245 29,538 21,158 5,370 1,492
Selling, general and
administrative
expenses............. 9,690 31,243 51,825 72,431 58,037 15,520 4,280
Depreciation,
amortization and
accretion
expense (3).......... 1,268 32,038 78,103 165,267 189,936 44,638 16,075
Restructuring and
non-recurring charges -- 7,727 -- 142,599 28,570 -- --
---------- ---------- ---------- ---------- ---------- ---------- ----------
Total operating
expenses........... 13,749 94,405 202,840 501,524 406,241 91,033 30,687
---------- ---------- ---------- ---------- ---------- ---------- ----------
Operating income (loss)...... $ (4,951) $ (35,266) $ (47,771) $ (241,699)$ (96,907) $ (18,629) $ (3,894)
========== ========== ========== ========== ========== ========== ==========
Gain on debt discharge....... -- -- -- -- -- -- 1,034,764
Income (loss) from
continuing operations..... $ (9,079) $ (94,282) $ (163,059) $ (660,627)$ (338,979) $ (77,790) $1,025,788
Reorganization items:
Adjust accounts to fair value -- -- -- -- -- -- (644,688)
Professional and other fees.. -- -- -- -- -- -- (23,894)
Income (loss) from
discontinued operations... -- (3,386) 5,443 5,858 (59,252) 2,012 --

COMBINED
PREDECESSOR
AND
REORGANIZED REORGANIZED
COMPANY COMPANY
(1) (1)(2)
----------- -----------
TWO THREE
MONTHS MONTHS
ENDED ENDED
MARCH 31, MARCH 31,
2003 2003
----------- -----------
STATEMENT OF OPERATIONS DATA:
Revenues:
Site leasing............ $ 51,069 $ 76,625
Broadcast services...... 3,575 4,812
----------- ---------
Total revenues....... $ 54,644 $ 81,437
----------- ---------
Operating expenses:
Costs of operations
(excluding depreciation,
amortization and accretion
expense):
Site leasing......... $ 17,060 $ 25,900
Broadcast services... 2,889 4,381
Selling, general and
administrative
expenses............. 8,686 12,966
Depreciation,
amortization and
accretion
expense (3).......... 16,826 32,901
Restructuring and
non-recurring charges -- --
----------- ---------
Total operating
expenses........... 45,461 76,148
----------- ---------
Operating income (loss)...... $ 9,183 $ 5,289
=========== =========
Gain on debt discharge....... -- 1,034,764
Income (loss) from
continuing operations..... $ (1,692) $1,024,096
Reorganization items:
Adjust accounts to fair value -- (644,688)
Professional and other fees.. -- (23,894)
Income (loss) from
discontinued operations... -- --

Cumulative effect of change
in accounting principle... -- -- -- -- (376,753) (376,753) (12,236)
---------- ---------- ---------- ---------- ---------- ---------- ----------
Net income (loss)............ $ (9,079) $ (97,668) $ (157,616) $ (654,769)$ (774,984) $ (452,531) $ 344,970
Net income (loss) applicable
to common stockholders.... (11,235) (98,428) (157,616) (654,769) (774,984) (452,531) 344,970
Net loss per share (basic
and diluted).............. $ (11.98) $ (12.48) $ (1.31) $ (4.36)$ (5.03) $ (2.95) $ 2.24
Weighted average common
shares outstanding
(basic and diluted)....... 938 7,886 120,731 150,223 153,924 153,654 154,014
STATEMENT OF CASH FLOWS DATA:
Net cash provided by (used
in) operating activities.. $ (2,347) $ 17,555 $ 11,365 $ (12,133)$ 36,286 $ 4,202 $ 5,892
Net cash provided by (used
in) investing activities.. (45,002) (813,225) (1,108,690) (984,724) (69,966) (39,768) (2,737)
Net cash provided by (used
in) financing activities.. 144,663 733,900 1,612,200 475,751 83,094 89,586 (10,884)
Purchases of property
and equipment............. 26,598 644,778 658,283 958,945 71,248 39,018 2,737
BALANCE SHEET DATA (AT END
OF PERIOD):
Cash and cash equivalents.... $ 114,962 $ 37,778 $ 552,653 $ 31,547 $ 80,961 $ 85,567 $ 73,442
Total assets................. 161,946 1,219,953 3,054,105 3,203,425 2,578,456 2,834,032 2,577,575
Total long-term debt......... 132,913 718,778 1,709,055 2,326,177 792,083 2,446,833 783,442
Liabilities subject to
compromise................ -- -- -- -- 1,763,286 -- 1,763,286
Redeemable convertible
preferred stock........... 40,656 -- -- -- -- -- --
Total stockholders' equity
(deficit)................. (14,067) 457,756 1,224,800 719,345 (75,127) 252,567 (96,678)
SELECTED OPERATING DATA (AT
END OF PERIOD):

EBITDA (4) (5)............... $ (3,683) $ (2,878) $ 32,904 $ (74,307)$ 93,724 $ 26,298 $ 12,181
Number of owned or operated
towers.................... 106 2,765 5,030 7,925 8,036 8,015 8,036

COMBINED
PREDECESSOR
AND
REORGANIZED REORGANIZED
COMPANY COMPANY
(1) (1)(2)
----------- -----------
TWO THREE
MONTHS MONTHS
ENDED ENDED
MARCH 31, MARCH 31,
2003 2003
----------- -----------
Cumulative effect of change
in accounting principle... -- (12,236)
----------- ---------
Net income (loss)............ $ (1,692) $ 343,278
Net income (loss) applicable
to common stockholders.... (1,692) 343,278
Net loss per share (basic
and diluted).............. $ (0.07) N/A
Weighted average common
shares outstanding
(basic and diluted)....... $ 23,587 N/A
STATEMENT OF CASH FLOWS DATA:
Net cash provided by (used
in) operating activities.. $ 11,927 $ 17,819
Net cash provided by (used
in) investing activities.. 78,873 76,136
Net cash provided by (used
in) financing activities.. (76,128) (87,012)
Purchases of property
and equipment............. 2,255 4,992
BALANCE SHEET DATA (AT END
OF PERIOD):
Cash and cash equivalents.... $ 87,904 $ 87,904
Total assets................. 1,597,487 1,597,487
Total long-term debt......... 707,383 707,383
Liabilities subject to
compromise................ -- --
Redeemable convertible
preferred stock........... -- --
Total stockholders' equity
(deficit)................. 684,166 684,166
SELECTED OPERATING DATA (AT
END OF PERIOD):

EBITDA (4) (5)............... $ 26,009 $ 38,190
Number of owned or operated
towers.................... 7,488 7,488

---------------------------------

necessarily comparable with similarly titled measures for other companies.
We believe that EBITDA can assist in comparing company performance on a
consistent basis without regard to amounts such as depreciation and
amortization, which may vary significantly depending on accounting methods
or non-operating factors such as historical cost bases. EBITDA was
calculated as follows for the periods indicated:

COMBINED
PREDECESSOR
AND
REORGANIZED REORGANIZED
PREDECESSOR COMPANY COMPANY COMPANY
----------------------------------------------------------------------------------- ----------- -----------
THREE TWO THREE
MONTHS ONE MONTH MONTHS MONTHS
YEAR ENDED DECEMBER 31, ENDED ENDED ENDED ENDED
--------------------------------------------------------- MARCH 31, JANUARY 31, MARCH 31, MARCH 31,
1998 1999 2000 2001 2002 2002 2003 2003 2003
---------- ---------- ---------- ---------- ---------- ---------- ---------- ----------- -----------
(DOLLARS IN THOUSANDS)

Operating income
(loss).......... $ (4,951) $ (35,266) $ (47,771) $ (241,699 $ (96,907) $ (18,629) $ (3,894) $ 9,183 $ 5,289
Depreciation,
amortization
and accretion
expense......... 1,268 32,038 78,103 165,267 189,936 44,638 16,075 16,826 32,901
Non-cash
compensation
charges......... -- 350 2,572 2,125 695 289 -- -- --
---------- ---------- ---------- ---------- --------- ---------- ---------- ----------- ----------
EBITDA............. $ (3,683) $ (2,878) $ 32,904 $ (74,307) $ 93,724 $ 26,298 $ 12,181 $ 26,009 $ 38,190
========== ========== ========== ========== ========= ========== ========== =========== ==========

MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS

YOU SHOULD READ THE FOLLOWING DISCUSSION IN CONJUNCTION WITH "SELECTED
CONSOLIDATED FINANCIAL AND OTHER DATA" AND OUR CONSOLIDATED FINANCIAL STATEMENTS
INCLUDED ELSEWHERE IN THIS PROSPECTUS. SOME OF THE STATEMENTS IN THE FOLLOWING
DISCUSSION ARE FORWARD-LOOKING STATEMENTS. SEE "FORWARD-LOOKING STATEMENTS."

BUSINESS OVERVIEW

We are one of the largest and fastest growing wireless tower operators
in the United States, based on number of towers and revenue growth,
respectively. Our primary business is owning and leasing antenna sites on
wireless and broadcast towers, owning and leasing in-building shared
infrastructure systems and managing rooftop telecommunications access on
commercial real estate. We also provide design, construction, modification and
maintenance services for the broadcast tower industry. After the sale of 545
towers to Cingular, we owned or operated 7,488 towers and antenna sites as of
March 31, 2003, located primarily in the top 100 markets in the United States.

On December 31, 2002, we completed the sale of our network services
division. Network services' revenues for the years ended December 31, 2001 and
2002 were $213.1 million and $136.2 million, respectively, and $41.8 million for
the three months ended March 31, 2002. In conjunction with the sale, we recorded
a loss on disposal of the network services division of $47.0 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 15, 2002, we filed a voluntary petition for relief under
chapter 11 of the Bankruptcy Code in the United States Bankruptcy Court for the
Eastern District of North Carolina, Raleigh Division.

On November 18, 2002, we filed a Proposed Plan of Reorganization and a
Proposed Disclosure Statement with the Bankruptcy Court. A plan confirmation
hearing was held on January 28, 2003 and the Proposed Plan of Reorganization, as
modified on that date (the "Plan of Reorganization"), was confirmed by the
Bankruptcy Court. All conditions precedent to the effectiveness of the Plan of
Reorganization were met by February 10, 2003, thereby allowing us to emerge from
bankruptcy.

Our Plan of Reorganization provides for the distribution of 23.75
million shares of our common stock to our general unsecured creditors and 1.25
million of new warrants to the holders of our old common stock, par value $0.001
per share (the "Old Common Stock"). In addition, pursuant to the Plan of
Reorganization, all outstanding shares of Old Common Stock and all outstanding
options and warrants to purchase Old Common Stock that were outstanding on
February 10, 2003 were cancelled. New options representing an aggregate of 10.0%
of our fully diluted common stock were issued to our management.

The warrants distributed pursuant to the Plan of Reorganization entitle
the holders to purchase up to 1.25 million shares of common stock at a price of
$32.00 per share through February 10, 2010.

TOWER ACQUISITIONS AND DISPOSITIONS

Our portfolio has grown from 106 towers as of December 31, 1998 to
7,488 towers and antenna sites as of March 31, 2003. We have accomplished this
growth through acquisitions or new construction (principally pursuant to
build-to-suit arrangements). The majority of our towers were acquired from (or
built under agreements with) affiliates of SBC Communications and Nextel.

Our original agreement with SBC called for us to acquire approximately
3,900 towers over approximately two years and to commit to build towers for
Cingular, an affiliate of SBC. Subsequent amendments to these agreements have
resulted in a reduction in the number of towers to be purchased to approximately
3,306 towers and in the termination of the build-to-suit arrangement. In
November 2001, we paid a fee of $35 million in connection with the first of
these amendments. On February 10, 2003, we sold 545 SBC towers in California and
Nevada to Cingular for

an aggregate purchase price of $81.0 million and paid SBC a fee of $7.5 million
related to the last of the reductions in the maximum number of towers that we
will lease or sublease. The following table shows the effects of the sale of the
545 SBC towers on operations for the first quarter of 2003:

AMOUNTS
ADJUSTED FOR
ACTUAL 545 SBC 545 SBC
AMOUNTS TOWERS SOLD TOWERS SOLD
---------- ----------- --------------
(DOLLARS IN THOUSANDS)

PREDECESSOR COMPANY
One month ended January 31, 2003:
Site leasing revenues............................ $ 25,556 $ (1,202) $ 24,354
Cost of site leasing operations, excluding
depreciation, amortization and accretion
expense....................................... 8,840 (465) 8,375
---------- ---------- ----------
Tower cash flow....................................... $ 16,716 $ (737) $ 15,979

REORGANIZED COMPANY
Two months ended March 31, 2003:
Site leasing revenues............................ $ 51,069 $ (368) $ 50,701
Cost of site leasing operations, excluding
depreciation, amortization and accretion
expense....................................... 17,060 (195) 16,865
---------- ---------- ----------
Tower cash flow....................................... $ 34,009 $ (173) $ 33,836

COMBINED PREDECESSOR AND REORGANIZED COMPANY
Three months ended March 31, 2003:
Site leasing revenues............................ $ 76,625 $ (1,570) $ 75,055
Cost of site leasing operations, excluding
depreciation, amortization and accretion
expense....................................... 25,900 (660) 25,240
---------- ---------- ----------
Tower cash flow....................................... $ 50,725 $ (910) $ 49,815
========== ========== ==========

We remain contractually obligated to purchase an additional 600 towers
from SBC from May 2003 through August 2004 for an aggregate purchase price of
approximately $156 million. These commitments will require approximately $78
million in each of 2003 and 2004.

RESULTS OF OPERATIONS

THREE MONTHS ENDED MARCH 31, 2003 COMPARED TO THE THREE MONTHS ENDED
MARCH 31, 2002

On January 28, 2003, our Plan of Reorganization was confirmed by the
Bankruptcy Court and we emerged from bankruptcy on February 10, 2003. As a
result of the reorganization and implementation of fresh start accounting, our
results of operations after January 31, 2003 are not comparable to results
reported in prior periods because of differences in the bases of accounting and
the capital structure for the predecessor company and the reorganized company.
Management believes that the presentation of operating results for the combined
predecessor and reorganized company for the three months ended March 31, 2003 is
useful to assist investors in evaluating our first quarter 2003 operating
results in comparison to our operating results for the first quarter of 2002.
See the notes to our unaudited interim financial statements included elsewhere
in this prospectus for information on the consummation of the Plan of
Reorganization and implementation of fresh start accounting. References to the
three months ended March 31, 2003 refer to one month of the predecessor company
(January 1, 2003 -- January 31, 2003) plus two months of the reorganized company
(February 1, 2003 -- March 31, 2003).

Consolidated revenues for the three months ended March 31, 2003 were
$81.4 million, an increase of $9.0 million from the three months ended March 31,
2002. Revenues from site leasing increased to $76.6 million for the three months
ended March 31, 2003 from $66.0 million for the three months ended March 31,
2002. The increase

was primarily as a result of incremental revenue in 2003 from new tenants on
towers that were part of our portfolio on March 31, 2002 and revenues derived
from towers acquired or built subsequent to March 31, 2002, offset by reductions
in revenues relating to the 545 SBC towers sold in February 2003. Based on
trailing twelve-months revenue on the towers that we owned or operated as of
March 31, 2002, same tower revenue growth was 16% and same tower cash flow
increased 22%. After the sale of 545 towers to Cingular, we owned or operated
7,488 towers and antenna sites at March 31, 2003, as compared to 8,015 towers
and antenna sites at March 31, 2002.

Revenues from broadcast services decreased to $4.8 million for the
three months ended March 31, 2003 compared to $6.5 million in the three months
ended March 31, 2002. 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.

Costs of operations decreased to $30.3 million for the three months
ended March 31, 2003 from $30.9 million for the three months ended March 31,
2002. Costs of operations for site leasing as a percentage of site leasing
revenues decreased to 33.8% for the three months ended March 31, 2003 from 38.7%
for the three months ended March 31, 2002. The decrease was primarily due to
increased revenues generated from new tenants on existing towers. As our site
leasing operations mature we expect that additional tenants on towers will
generate increases in our margins for site leasing and in cash flow because a
significant percentage 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 revenues increased to 91.0% for the three
months ended March 31, 2003 from 83.2% for the three months ended March 31,
2002, primarily due to lower revenue volumes in 2003.

Selling, general and administrative expenses decreased to $13.0 million
for the three months ended March 31, 2003 from $15.5 million for the three
months ended March 31, 2002. Selling, general and administrative expenses as a
percentage of revenues decreased to 15.9% for the three months ended March 31,
2003 from 21.4% for the three months ended March 31, 2002. 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
2002.

Depreciation, amortization and accretion expenses decreased to $32.9
million for the three months ended March 31, 2003 from $44.6 million for the
three months ended March 31, 2002. The decrease was primarily the result of the
implementation of fresh start accounting which reduced the depreciable bases of
property and equipment by $957.2 million, resulting in decreased depreciation
expense, offset by an increase in amortization expense relating to customer
contracts and an increase in accretion of the asset retirement obligation.

Interest income increased to $0.4 million for the three months ended
March 31, 2003 from $0.1 million in the three months ended March 31, 2002 due to
higher cash balances on hand. Interest expense decreased to $14.0 million during
the three months ended March 31, 2003 from $58.7 million for the three months
ended March 31, 2002. The decrease was due to the extinguishment of the
Liabilities Subject to Compromise and a reduction of amounts outstanding under
our credit facility.

On February 10, 2003, we emerged from bankruptcy and the holders of the
Liabilities Subject to Compromise received their pro rata share of 23.75 million
shares of common stock in exchange for their notes. The excess of the carrying
value of the Liabilities Subject to Compromise, net of the related debt issuance
costs, over the reorganization value used in adopting fresh start accounting was
recorded as a gain on debt discharge of $1.03 billion.

Other income (expense) was a net expense of $1.7 million in the three
months ended March 31, 2003. Of this amount, $1.1 million was related to the
loss on sale of assets and $0.6 million related to losses from investments in
affiliates accounted for under the equity method. Other income (expense) was a
net expense of $0.4 million in the three months ended March 31, 2002. Of this
amount, $0.5 million related to losses from investments in affiliates accounted
for under the equity method and $0.1 million was related to the gain on sale of
assets.

Income from operations of the discontinued network services segment was
$2.0 million in the three months ended March 31, 2002. This segment was sold on
December 31, 2002.

YEAR ENDED DECEMBER 31, 2002 COMPARED TO THE YEAR ENDED DECEMBER 31,
2001

Consolidated revenues increased to $309.3 million for the year ended
December 31, 2002 from $259.8 million for the year ended December 31, 2001.
Revenues from site leasing increased to $282.5 million for the year ended
December 31, 2002 from $221.6 million for the year ended December 31, 2001. The
increase was primarily a result of incremental revenue in 2002 from new tenants
on towers that were part of our portfolio on December 31, 2001 and revenues
derived from towers acquired in 2001 and 2002. Based on trailing twelve-months
revenue on the towers that we owned or operated as of December 31, 2001, same
tower revenue growth was 18% and same tower cash flow increased 29%. We owned or
operated 8,036 towers at December 31, 2002, as compared to 7,925 towers at
December 31, 2001.

Revenues from broadcast services decreased to $26.8 million for the
year ended December 31, 2002 compared to $38.2 million for the year ended
December 31, 2001. The decrease was primarily due to a change in the service mix
from large broadcast tower fabrication and installations to smaller broadcast
tower modifications resulting in lower tower fabrication revenues.

Costs of operations increased to $129.7 million for the year ended
December 31, 2002 from $121.2 million for the year ended December 31, 2001. The
increase was due to increases in site leasing costs attributable to operating
costs of the communications towers acquired or constructed during 2001 and 2002
partially offset by a decrease in cost of operations for broadcast services
resulting from lower revenue volumes. Costs of operations for site leasing as a
percentage of site leasing revenues decreased to 38% for the year ended December
31, 2002 from 41% for the year ended December 31, 2001. The decrease was
primarily due to increased revenues generated from new tenants on existing
towers. As our site leasing operations mature we expect that additional tenants
on towers will generate increases in our margins for site leasing and in cash
flow because a significant percentage 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 revenues increased to 79% for the year
ended December 31, 2002 from 77% for the year ended December 31, 2001 primarily
due to lower revenue volumes in 2002.

Selling, general and administrative expenses decreased to $58.0 million
for the year ended December 31, 2002 from $72.4 million for the year ended
December 31, 2001. Selling, general and administrative expenses as a percentage
of revenues decreased to 19% for the year ended December 31, 2002 from 28% for
the year ended December 31, 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 2002. In
addition, for the year ended December 31, 2002, we recorded non-cash
compensation charges of $0.7 million related to the issuance of stock options
and restricted shares of common stock to employees compared to $2.1 million in
the year ended December 31, 2001.

Depreciation and amortization expense increased to $189.9 million for
the year ended December 31, 2002 from $165.3 million for the year ended December
31, 2001. The increase was primarily a result of the increased depreciation from
the towers we have acquired or constructed, partially offset by the $35.5
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.

In May 2001, we announced the consolidation of our rooftop management
operations and recorded a non-recurring charge of $35.8 million. Of this amount,
$29.6 million related to the write-off of goodwill, $5.1 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.

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

In November 2001, we announced that we would reduce our planned new
tower construction and acquisition programs for 2002. As a result of the reduced
new tower activity, we recorded restructuring charges of $70.3 million. Of this
amount, $27.7 million was related to the write-off of work in progress related
to sites in development that we terminated, $4.8 million was related to the
costs of closing certain offices and $2.8 million was related to the costs of
employee severance. In addition, we completed an amendment to our agreement to
acquire leasehold and sub-leasehold interests in approximately 3,900
communications towers from affiliates of SBC Communications. This amendment
provided for the number of towers to be leased or subleased to be reduced by 300
and for the lease or sublease date on at least 850 towers to be postponed to
2003 and January 2004. In exchange for these modifications, we paid a fee of
$35.0 million, which has been included as part of the restructuring charge.

As a result of the factors discussed above, our loss from operations
was $96.9 million for the year ended December 31, 2002, compared to a loss of
$241.7 million for the year ended December 31, 2001.

Net interest expense increased to $225.7 million during the year ended
December 31, 2002 from $195.1 million for the year ended December 31, 2001. The
increase was due to increased accreted value of the senior discount notes and
increased amounts outstanding under our credit facility, as well as the
write-off of $4.5 million of debt issuance costs related to the decrease in the
maximum availability of the credit facility. This increase was partially offset
by not incurring interest expense of $24.4 million on the senior notes, senior
discount notes and senior convertible notes for the period from the date of the
chapter 11 filing (November 15, 2002) through December 31, 2002.

Other income (expense) was an expense of $10.9 million in the year
ended December 31, 2002, primarily due to expenses associated with the proposed
bond tender and exchange offers. Other income (expense) was a net expense of
$223.2 million in the year ended December 31, 2001. Of this amount, $61.8
million related to losses from investments in affiliates accounted for under the
equity method, primarily our investment in SpectraSite-Transco Communications,
Ltd., $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 our investment in Evolution Holdings, Inc., a network services
company that ceased operations in the second quarter. Other income (expense) for
2001 also includes $7.0 million related to the write-down of a loan to Concourse
Communications, Inc., an affiliate that provides in-building antenna sites
primarily in airports and other public sites in New York City.

Loss from operations of the discontinued network services segment was
$12.3 million in the year ended December 31, 2002 compared to income from
operations of the discontinued segment of $5.9 million in the year ended
December 31, 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 that led to lower pricing and
restructuring charges. On December 31, 2002, we completed the sale of the
network services segment resulting in a loss on disposal of $47.0 million.

We performed the first of the impairment tests of goodwill required by
SFAS 142 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 to reduce the carrying value of goodwill in our wireless
services, broadcast tower, broadcast services and building units to its implied
fair value. 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.

As a result of the factors discussed above, net loss was $775.0
million, or $5.03 per share (basic and diluted), for the year ended December 31,
2002, compared to a net loss of $654.8 million, or $4.36 per share (basic and
diluted), for the year ended December 31, 2001.

YEAR ENDED DECEMBER 31, 2001 COMPARED TO THE YEAR ENDED DECEMBER 31,
2000

Consolidated revenues for the year ended December 31, 2001 increased to
$259.8 million for the year ended December 31, 2001 from $155.1 million for the
year ended December 31, 2000. Revenues from site leasing increased to $221.6
million for the year ended December 31, 2001 from $116.5 million for the year
ended December 31, 2000, primarily as a result of revenues derived from towers
which we acquired or constructed during 2000 and 2001. We owned or operated
7,925 towers at December 31, 2001, as compared to 5,030 towers at December 31,
2000. The remaining factor contributing to the increase is incremental revenue
in 2001 for towers that existed as of December 31, 2000 from new tenants.

Revenues from broadcast services remained relatively flat at $38.2
million for the year ended December 31, 2001 compared to $38.6 million for the
year ended December 31, 2000.

Costs of operations increased to $121.2 million for the year ended
December 31, 2001 from $72.9 million for the year ended December 31, 2000. The
increase in costs was primarily attributable to operating costs of the
communications towers acquired or constructed during 2000 and 2001, acquisitions
in 2000 and 2001 and overall growth in operating activities. Costs of operations
for site leasing as a percentage of site leasing revenues increased to 41% for
the year ended December 31, 2001 from 40% for the year ended December 31, 2000.
The increase was primarily due to the addition of new towers and higher tower
operating expenses partially offset by increased revenues generated from new
tenants on existing towers. As our site leasing operations mature, we expect
that additional tenants on a tower will generate increases in our margins for
site leasing and in cash flow because a significant percentage 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 revenues
increased to 77% for the year ended December 31, 2001 from 68% for the year
ended December 31, 2000. This increase is primarily due to a shift in revenue
mix to lower margin tower fabrication revenues.

Selling, general and administrative expenses increased to $72.4 million
for the year ended December 31, 2001 from $51.8 million for the year ended
December 31, 2000. The increase is a result of expenses related to additional
corporate overhead and field operations to manage and operate the growth of our
ongoing operations and acquisition activities. For the year ended December 31,
2001, we recorded non-cash compensation charges of $2.1 million related to the
issuance of stock options and restricted shares of common stock to employees. We
recorded non-cash compensation charges of $2.6 million in the year ended
December 31, 2000 related to stock options and restricted shares of common stock
issued to employees. Selling, general and administrative expenses as a
percentage of revenues decreased to 28% for the year ended December 31, 2001
from 33% for the year ended December 31, 2000 primarily due to cost reduction
efforts implemented in the second quarter of 2001.

Depreciation and amortization expense increased to $165.3 million for
the year ended December 31, 2001 from $78.1 million for the year ended December
31, 2000, primarily as a result of the increased depreciation from towers we
have acquired or constructed and amortization of goodwill related to
acquisitions.

development that we terminated, $4.8 million was related to the costs of closing
certain offices and $2.8 million was related to the costs of employee severance.
In addition, we completed an amendment to our agreement to acquire leasehold and
sub-leasehold interests in approximately 3,900 communications towers from
affiliates of SBC Communications. This amendment provided for the number of
towers to be leased or subleased to be reduced by 300 and for the lease or
sublease date on at least 850 towers to be postponed to 2003 and January 2004.
In exchange for these modifications, we paid a fee of $35.0 million, which has
been included as part of the restructuring charge.

As a result of the factors discussed above, our loss from operations
was $241.7 million for the year ended December 31, 2001, compared to a loss of
$47.8 million for the year ended December 31, 2000.

Net interest expense increased to $195.1 million during the year ended
December 31, 2001 from $106.3 million for the year ended December 31, 2000. The
increase reflects additional interest expense due to the issuance of our 12 7/8%
senior discount notes due 2010 in March 2000, our 10 3/4% senior notes due 2010
in March 2000, our 6 3/4% senior convertible notes due 2010 in November 2000 and
our 12 1/2% senior notes due 2010 in December 2000, as well as additional
borrowings under our credit facility in 2001.

Other income (expense) was a net expense of $223.2 million in the year
ended December 31, 2001. Of this amount, $61.8 million related to losses from
investments in affiliates accounted for under the equity method, primarily our
investment in SpectraSite-Transco Communications, Ltd., $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 our investment in Evolution Holdings, Inc., a
network services company that ceased operations in the second quarter. Other
income (expense) for 2001 also includes $7.0 million related to the write-down
of a loan to Concourse Communications, Inc., an affiliate of ours that provides
in-building antenna sites primarily in airports and other public sites in New
York City. Other income (expense) was an expense of $8.6 million in the year
ended December 31, 2000 primarily due to our 50% equity in the net loss of
SpectraSite-Transco.

Income from operations of the discontinued network services segment
increased to $5.9 million in the year ended December 31, 2001 compared to income
from operations of discontinued segment of $5.4 million in the year ended
December 31, 2000 primarily as a result of increased revenues.

As a result of the factors discussed above, net loss was $654.8
million, or $4.36 per share (basic and diluted), for the year ended December 31,
2001, compared to a net loss of $157.6 million, or $1.31 per share (basic and
diluted), for the year ended December 31, 2000.

LIQUIDITY AND CAPITAL RESOURCES

We are a holding company whose only significant asset is the
outstanding capital stock of its subsidiary, Communications. Our only source of
cash to pay our obligations is distributions from Communications.

As a result of the reorganization and implementation of fresh start
accounting, our results of operations after January 31, 2003 are not comparable
to results reported in prior periods because of differences in the bases of
accounting and the capital structure for the predecessor company and the
reorganized company.

CASH FLOWS

For the year ended December 31, 2002, cash provided by operating
activities were $36.3 million as compared to cash used in operating activities
of $12.1 million in the year ended December 31, 2001. The change is primarily
attributable to the $35.0 million fee paid in 2001 to SBC to amend our agreement
to acquire leasehold and sub-leasehold interests in wireless communications
towers and by improved operating performance, as measured by operating income
(loss) before depreciation, amortization, accretion and non-cash compensation
charges, or "EBITDA." EBITDA was $93.7 million in 2002 compared to a loss of
$74.3 million in 2001.

For the three months ended March 31, 2003, cash provided by operating
activities were $17.8 million as compared to $4.2 million in the three months
ended March 31, 2002. The change is primarily attributable to

decreased interest payments, decreased accounts receivable, increased accounts
payable and improved operating performance, as measured by EBITDA. EBITDA was
$38.2 million in the three months ended March 31, 2003 compared to $26.3 million
in the three months ended March 31, 2002.

For the year ended December 31, 2002, cash used in investing activities
were $70.0 million compared to $984.7 million for the year ended December 31,
2001. In the year ended December 31, 2002, we invested $71.2 million in
purchases of property and equipment, primarily related to the acquisition of
communications towers. These expenditures were partially offset by the net
proceeds from the sale of an investment in an affiliate. In the year ended
December 31, 2001, we invested $958.9 million in acquisitions of property and
equipment, primarily related to the acquisition of communications towers. Our
capital expenditures consist of purchases of property and equipment

For the three months ended March 31, 2003, cash provided by investing
activities were $76.1 million compared to cash used in investing activities of
$39.8 million for the three months ended March 31, 2002. Investing activities
for the three months ended March 31, 2003 consisted primarily of proceeds
received from the sale of the 545 SBC towers of $81.0 million. In addition, we
invested $5.0 million and $39.0 million in purchases of property and equipment,
primarily related to the acquisition and construction of communications towers,
in the three months ended March 31, 2003 and 2002, respectively.

In the year ended December 31, 2002, cash provided by financing
activities were $83.1 million, as compared to $475.8 million in the year ended
December 31, 2001. The cash provided by financing activities in 2001 and 2002
was primarily attributable to draws on our credit facility.

In the three months ended March 31, 2003, cash used in financing
activities were $87.0 million, as compared to cash provided by financing
activities of $89.6 million in the three months ended March 31, 2002. Cash used
in financing activities for the three months ended March 31, 2003 consisted
primarily of $76.0 million of payments on our credit facility and payments on
capital leases of $11.0 million, which includes the prepayment of a capital
lease in connection with the exercise of our purchase option on our corporate
headquarters. The cash provided by financing activities in the three months
ended March 31, 2002 was primarily attributable to $90.0 million of draws on our
credit facility.

EBITDA is provided because it is a measure commonly used in the tower
industry as a measure of a company's operating performance. We use EBITDA to
compare our operating performance with that of our competitors. EBITDA is not a
measurement of financial performance under generally accepted accounting
principles and should not be considered an alternative to net income as a
measure of performance or to cash flow as a measure of liquidity. Although
EBITDA is not necessarily comparable with similarly titled measures for other
companies, we believe that EBITDA can assist in comparing company performance on
a consistent basis without regard to depreciation, amortization, accretion and
non-cash compensation charges, which may vary significantly depending on
accounting methods where acquisitions are involved or non-operating factors such
as historical cost bases. When evaluating EBITDA, investors should consider,
among other factors, (1) increasing or decreasing trends in EBITDA, (2) whether
EBITDA has remained at positive levels historically and (3) how EBITDA compares
to levels of debt and interest expense. EBITDA for the years ended December 31,
2001 and 2002 and the three months ended March 31, 2002 and 2003 was calculated
as follows:

THREE MONTHS ENDED
YEAR ENDED DECEMBER 31, MARCH 31,
------------------------- -------------------------
2001 2002 2002 2003
---------- ---------- ---------- ----------
(DOLLARS IN THOUSANDS)

Operating income (loss)............................. $ (241,699) $ (96,907) $ (18,629) $ 5,289
Depreciation, amortization and accretion expense.... 165,267 189,936 44,638 32,901
Non-cash compensation charges....................... 2,125 695 289 --
---------- ---------- ---------- ----------
EBITDA.............................................. $ (74,307) $ 93,724 $ 26,298 $ 38,190
========== ========== ========== ==========

Free cash flow (deficit) consists of net cash provided by operating
activities less purchases of property and equipment. Free cash flow (deficit) is
provided because it is a measure commonly used in the tower industry as a
measure of a company's

ability to generate cash from operations. Free cash flow (deficit) is not a
measurement of financial performance under generally accepted accounting
principles and should not be considered an alternative to net income or cash
flows provided by (used in) operating activities as a measure of performance,
cash flows or liquidity. Free cash flow (deficit) is not necessarily comparable
with similarly titled measures for other companies. We believe that free cash
flow (deficit) can assist in comparing company performance on a consistent
basis. Free cash flow (deficit) for the three months ended March 31, 2002 and
2003 was calculated as follows:

THREE MONTHS ENDED
MARCH 31,
-----------------------------
2002 2003
---------- ---------
(DOLLARS IN THOUSANDS)
Net cash provided by operating activities..... $ 4,202 $ 17,819
Less: Purchases of property and equipment..... (39,018) (4,992)
---------- ---------
Free cash flow (deficit)...................... $ (34,816) $ 12,827
========== =========

CREDIT FACILITY

Communications is party to an amended and restated credit facility
totaling approximately $712.5 million. The credit facility includes a $200.0
million revolving credit facility, which may be drawn at any time, subject to
the satisfaction of certain conditions precedent. After giving effect to the
offering of our senior notes, the use of proceeds therefrom and the amendment to
the credit facility, Communications could borrow approximately $193.7 million of
available funds under the revolving credit facility as of March 31, 2003 while
remaining in compliance with the credit agreement's covenants. The amount
available will be reduced (and, if necessary, the amounts outstanding must be
repaid) in quarterly installments beginning on September 30, 2005 and ending on
June 30, 2007. The credit facility also includes a $218.7 million multiple draw
term loan that is fully drawn and which must be repaid in quarterly installments
beginning on March 31, 2006 and ending on June 30, 2007 and a $293.8 million
term loan that is fully drawn and which must be repaid in quarterly installments
beginning on September 30, 2007 and ending on December 31, 2007.

With the proceeds of the sale of 545 towers to Cingular, Communications
repaid $31.4 million of the multiple draw term loan and $42.1 million of the
term loan on February 11, 2003. In addition, Communications repaid $1.1 million
of the multiple draw term loan and $1.4 million of the term loan on February 19,
2003. In connections with these repayments, Communications wrote off $1.6
million in debt issuance costs. This charge is included in interest expense in
the unaudited condensed consolidated statement of operations. We used $194.5
million of the proceeds from the offering of our senior notes to repay amounts
outstanding under the credit facility and wrote off approximately $5.9 million
of associated debt issuance costs. As of March 31, 2003, after giving effect to
the offering of our senior notes and the use of proceeds therefrom,
Communications would have had approximately $512.5 million outstanding under the
credit facility.

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 (as defined in the credit facility), a
minimum interest coverage ratio and a minimum fixed charge coverage ratio.

Effective May 14, 2003, we amended our credit facility to, among other
things, reduce our unused former $300 million commitment under our revolving
credit facility by $100 million in exchange for moderately increasing the ratios
in our leverage covenant in future periods.

LIQUIDITY AND COMMITMENTS

We emerged from bankruptcy in February 2003. As a result, $1.8 billion
of previously outstanding indebtedness was cancelled. Communications, the
borrower under the credit facility, and our other subsidiaries were not part of
the bankruptcy. The credit facility has remained in place during, and since, the
reorganization.

We had cash and cash equivalents of $81.0 million at December 31, 2002
and $87.9 million at March 31, 2003. We also had $783.0 million outstanding
under our credit facility at December 31, 2002, $707.0 million outstanding at
March 31, 2003 and $512.5 million outstanding at March 31, 2003 after giving
effect to the offering of our senior notes and the use of proceeds therefrom.
The remaining $200.0 million under the credit facility was undrawn. Our ability
to borrow under the credit facility is limited by the financial covenants
regarding the total debt to EBITDA and interest and fixed charge coverage ratios
of Communications and its subsidiaries. After giving effect to the offering of
our senior notes, the use of proceeds therefrom and the amendment to the credit
facility, Communications could borrow approximately $193.7 million of available
funds under the revolving credit facility as of March 31, 2003 while remaining
in compliance with the credit agreement's covenants. Our ability to borrow and
use cash under the credit facility financial covenants will increase or decrease
as our annualized EBITDA (as defined in the credit facility) increases or
decreases. The weighted average interest rate on outstanding borrowings under
the credit facility was 5.94% as of December 31, 2002, 5.17% as of March 31,
2003 and 5.22% after giving effect to the offering of our senior notes and the
use of proceeds therefrom.

While we have taken steps to reduce our capital commitments, we are
contractually obligated to purchase an additional 600 towers from SBC from May
2003 through August 2004. These commitments will require approximately $78
million in each of 2003 and 2004. In addition, we will continue to make capital
expenditures to improve our existing towers and to install new in-building
neutral host distributed antenna systems. We believe that cash flow from
operations, available cash on hand and anticipated borrowings under our credit
facility will be sufficient to fund our capital expenditures and other currently
anticipated cash needs for the foreseeable future. Our ability to meet these
needs from cash provided by operating activities will depend on the demand for
wireless services, developments in competing technologies and our ability to add
new tenants, as well as general economic, financial, competitive, legislative,
regulatory and other factors, many of which are beyond our control. In addition,
if we make additional acquisitions or pursue other opportunities or if our
estimates prove inaccurate, we may seek additional sources of debt or equity
capital or reduce the scope of tower construction and acquisition activity.

The following table provides a summary of our material debt, lease and
other contractual commitments as of March 31, 2003:

PAYMENTS DUE BY PERIOD
---------------------------------------------------------------------
LESS THAN
CONTRACTUAL OBLIGATIONS TOTAL 1 YEAR 1-3 YEARS 4-5 YEARS AFTER 5 YEARS
----------------------- ----------- ---------- ---------- ---------- -------------
(DOLLARS IN THOUSANDS)

Credit facility (1)..................... $ 706,955 $ -- $ 84,095 $ 622,860 $ --
Other long-term debt (2)................ -- -- -- -- --
Capital lease payments.................. 1,109 771 338 -- --
Operating lease payments................ 304,209 63,142 100,620 50,655 89,792
SBC tower commitment (3)................ 156,000 104,000 52,000 -- --
Total contractual cash obligations...... $ 1,168,273 $ 167,913 $ 237,053 $ 673,515 $ 89,792

--------------------------------

(1) After giving effect to the use of proceeds from the May 2003 offering of
our senior notes, we have $512.5 million outstanding under the credit
facility, of which approximately $1.1 million is due within 1-3 years and
approximately $511.4 million is due within 4-5 years.

(2) In May 2003 we issued $200 million of 8 1/4% senior notes which mature in
2010.

(3) Based on the estimated average purchase price of towers to be acquired from
SBC.

In addition, we had standby letters of credit of $6.3 million and
performance bonds of $14.5 million outstanding at March 31, 2003, 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.

REVENUE RECOGNITION

Site leasing revenues are recognized when earned based on lease
agreements. Rental 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. Revenues from fees, such as structural analysis fees and site
inspection fees, are recognized upon delivery of the related products and
services to the customer.

Broadcast services revenues related to construction activities are
derived from service contracts with customers 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 that a specific
customer's ability to meet its financial obligations to us is in question (e.g.,
bankruptcy filings, substantial down-grading of credit ratings), we record a
specific allowance against amounts due to reduce the net recognized receivable
from that customer to the amount 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 us could
be reduced by a material amount.

PROPERTY AND EQUIPMENT

Property and equipment built, purchased or leased under long-term
leasehold agreements are recorded at cost and depreciated over their estimated
useful lives. We capitalize costs incurred in bringing property and equipment to
an operational state. Costs clearly associated with the acquisition, development
and construction of property and equipment are capitalized as a cost of the
assets. Indirect costs that relate to several assets are capitalized and
allocated to the assets to which the costs relate. Indirect costs that do not
clearly relate to projects under development or construction are charged to
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. 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.

GOODWILL

The excess of the purchase price over the fair value of net assets
acquired in purchase business combinations has been recorded as goodwill.
Goodwill 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. On an ongoing basis, we
assess the recoverability of goodwill by determining the ability of the specific
assets acquired to generate future cash flows sufficient to recover the
unamortized goodwill over the remaining useful life. We estimate future cash
flows based on the current performance of the acquired assets and our business
plan for those assets. Changes in business conditions, major customers or other
factors could result in changes in those estimates. Goodwill determined to be
unrecoverable based on future cash flows is written-off in the period in which
such determination is made.

IMPAIRMENT OF LONG-LIVED ASSETS

Long-lived assets, such as property and equipment, goodwill and
purchased intangible assets, are evaluated for impairment whenever events or
changes in circumstances indicate the carrying value of an asset may not be
recoverable. An impairment loss is recognized when estimated undiscounted future
cash flows expected to result from the use of the asset plus net proceeds
expected from disposition of the asset (if any) are less than the carrying value
of the asset. When an impairment is identified, the carrying amount of the asset
is reduced to its estimated fair value. Effective January 1, 2002, potential
impairment of long-lived assets other than goodwill and purchased intangible
assets with indefinite useful lives is evaluated using the guidance provided by
Statement of Financial Accounting Standards No. 144, ACCOUNTING FOR THE
IMPAIRMENT OR DISPOSAL OF LONG-LIVED ASSETS.

ACCOUNTING FOR INCOME TAXES

As part of the process of preparing our consolidated financial
statements, we are required to estimate income taxes in each of the
jurisdictions in which we operate. This process involves estimating the actual
current tax liability together with assessing temporary differences resulting
from differing treatment of items for tax and accounting purposes. These
differences result in deferred tax assets and liabilities. We must then assess
the likelihood that our deferred tax assets will be recovered from future
taxable income. To the extent that we believe that recovery is not likely, we
must establish a valuation allowance. Significant management judgment is
required in determining the provision for income taxes, deferred tax assets and
liabilities and any valuation allowance recorded against net deferred tax
assets. We have recorded a valuation allowance of $464.7 million as of December
31, 2002, due to uncertainties related to utilization of deferred tax assets,
primarily consisting of net operating losses carryforwards, before they expire.

DERIVATIVE FINANCIAL INSTRUMENTS

Derivative financial instruments are accounted for in accordance with
Statement of Financial Accounting Standards No. 133, ACCOUNTING FOR DERIVATIVE
INSTRUMENTS AND HEDGING ACTIVITIES ("SFAS 133"), as amended by Statement of
Financial Accounting Standards No. 138, ACCOUNTING FOR CERTAIN INSTRUMENTS AND
CERTAIN HEDGING

ACTIVITIES ("SFAS 138") and as further amended by Statement of Financial
Accounting Standards No. 149, AMENDMENT OF STATEMENT 133 ON DERIVATIVE
INSTRUMENTS AND HEDGING ACTIVITIES. All derivative financial instruments are
recorded in the consolidated financial statements at fair value. Changes in the
fair values of derivative financial instruments are either recognized in
earnings or in stockholders' equity as a component of other comprehensive income
depending on whether the derivative financial instrument qualifies for hedge
accounting as defined by SFAS 133. Changes in fair values of derivatives not
qualifying for hedge accounting are reported in earnings as they occur.

RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS

In June 2001, the FASB issued Statement of Financial Accounting
Standards No. 143, ACCOUNTING FOR ASSET RETIREMENT OBLIGATIONS ("SFAS 143")
which is effective for fiscal years beginning after June 15, 2002. SFAS 143
requires legal obligations associated with the retirement of long-lived assets
to be recognized at their fair value at the time that the obligations are
incurred. Upon initial recognition of a liability, that cost should be
capitalized as part of the related long-lived asset and allocated to expense
over the useful life of the asset. We adopted the new rules on asset retirement
obligations on January 1, 2003. Application of the new rules is expected to
result in an increase in net property, plant and equipment of $23.2 million,
recognition of an asset retirement obligation of $35.4 million, and a cumulative
effect of adoption that will reduce net income and stockholders' equity
(deficit) by $12.2 million.

In April 2002, the FASB issued Statement of Financial Accounting
Standards No. 145, RESCISSION OF FASB STATEMENT NOS. 4, 44, AND 64, AMENDMENT OF
FASB STATEMENT NO. 13 AND TECHNICAL CORRECTIONS ("SFAS 145"). SFAS 145 amends or
rescinds a number of authoritative pronouncements, including Statement of
Financial Accounting Standards No. 4, REPORTING GAINS AND LOSSES FROM
EXTINGUISHMENT OF DEBT ("SFAS 4"). SFAS 4 required that gains and losses from
extinguishment of debt that were included in the determination of net income or
loss be aggregated and, if material, classified as an extraordinary item, net of
the related income tax effect. Upon adoption of SFAS 145, gains and losses from
extinguishment of debt will no longer be classified as extraordinary items, but
rather will generally be classified as part of other income (expense) on our
consolidated statement of operations. The provisions of SFAS 145 are effective
for fiscal years beginning after May 15, 2002. We adopted the provisions of SFAS
145 on January 1, 2003. We do not expect the impact of adopting this statement
to have a material impact on our consolidated financial position, results of
operations or cash flows.

In July 2002, the FASB issued Statement of Financial Accounting
Standards No. 146, ACCOUNTING FOR COSTS ASSOCIATED WITH EXIT OR DISPOSAL
ACTIVITIES ("SFAS 146"). The statement requires costs associated with exit or
disposal activities to be recognized when they are incurred rather than at the
date of a commitment to an exit or disposal plan. The requirements of SFAS 146
are effective for exit or disposal activities initiated after January 1, 2003.
We adopted the provisions of SFAS 146 on January 1, 2003. We do not expect the
impact of adopting this statement to have a material impact on our consolidated
financial position, results of operations or cash flows.

In December 2002, the FASB issued Statement of Financial Accounting
Standards No. 148, ACCOUNTING FOR STOCK-BASED COMPENSATION, TRANSITION AND
DISCLOSURE ("SFAS 148"). SFAS 148 provides alternative methods of transition for
a voluntary change to the fair value based method of accounting for stock-based
employee compensation. SFAS 148 also requires that disclosures of the pro forma
effect of using the fair value method of accounting for stock-based employee
compensation be displayed more prominently and in a tabular format.
Additionally, SFAS 148 requires disclosure of the pro forma effect in interim
financial statements. The transition disclosure requirements of SFAS 148 are
effective for fiscal year 2002. The interim and annual disclosure requirements
are effective for the first quarter of 2003. We do not expect SFAS 148 to have a
material effect on our financial condition, results of operations or cash flows.

In April 2003, the FASB issued Statement of Financial Accounting
Standards No. 149, AMENDMENT OF STATEMENT 133 ON DERIVATIVE INSTRUMENTS AND
HEDGING ACTIVITIES ("SFAS 149"). SFAS 149 amends and clarifies accounting for
derivative instruments, including certain derivative instruments embedded in
other contracts, and for hedging activities under SFAS 133, as previously
amended by SFAS 138. SFAS 149 clarifies under what circumstances a contract with
an initial net investment meets the characteristic of a derivative as discussed
in SFAS 133. In addition, it clarifies when a derivative contains a financing
component that warrants special reporting in the statement of cash flows. SFAS
149 amends certain other existing pronouncements. SFAS 149 is effective for
contracts entered into or modified after June 30, 2003, and for hedging
relationships designated after June 30, 2003 and should be applied

prospectively. We do not expect the impact of adopting this statement to have a
material impact on our consolidated financial condition, results of operations
or cash flows.

In January 2003, the FASB issued Interpretation No. 46, CONSOLIDATION
OF VARIABLE INTEREST ENTITIES ("FIN 46"). FIN 46 requires an investor with a
majority of the variable interests in a variable interest entity ("VIE") to
consolidate the entity and also requires majority and significant variable
interest investors to provide certain disclosures. A VIE is an entity in which
the equity investors do not have a controlling interest, or the equity
investment at risk is insufficient to finance the entity's activities without
receiving additional subordinated financial support from the other parties. For
arrangements entered into with VIEs created prior to January 31, 2003, the
provisions of FIN 46 are required to be adopted at the beginning of the first
interim or annual period beginning after June 15, 2003. We are currently
reviewing our investments and other arrangements to determine whether any of our
investee companies are VIEs. We do not expect to identify any significant VIEs
that would be consolidated, but may be required to make additional disclosures.
Our maximum exposure related to any investment that may be determined to be in a
VIE is limited to the amount invested. The provisions of FIN 46 are effective
immediately for all arrangements entered into with new VIEs created after
January 31, 2003. We have not invested in any new VIEs created after January 31,
2003.

INFLATION

Some of our expenses, such as those for marketing, wages and benefits,
generally increase with inflation. However, we do not believe that our financial
results have been, or will be, adversely affected by inflation in a material
way.

QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISKS

We use financial instruments, including fixed and variable rate debt,
to finance our operations. As of March 31, 2003 after giving effect to the
offering of our senior notes and the use of proceeds therefrom, we had $512.5
million of variable rate debt outstanding under our credit facility at a
weighted average interest rate of 5.22%. A 1% increase in the interest rate on
our variable rate debt would have increased interest expense by approximately
$1.9 million in the three months ended March 31, 2003.

In addition, we have an interest rate cap on $375.0 million of the
variable rate debt outstanding under our credit facility, which caps LIBOR at
7.0% for the next three years.

BUSINESS

INTRODUCTION

We have a portfolio of approximately 7,500 towers, primarily located in
the top 100 markets in the United States. We believe that the growing use of
wireless communication services together with capacity constraints in the top
100 markets will continue to increase the demand for tower assets located in
these markets and drive the growth of our business.

PRODUCTS AND SERVICES

Our business consists of site leasing and broadcast services.

SITE LEASING

As of March 31, 2003, we owned or operated 7,414 wireless towers and
in-building systems and 74 broadcast towers primarily located in the top 100
markets in the United States. We have major metropolitan market clusters in Los
Angeles, Chicago, San Francisco, Philadelphia, Detroit and Dallas. Our principal
business is the leasing of space on our antenna sites to wireless carriers,
which represents more than 92% of our monthly site leasing revenues.

WIRELESS TOWER OWNERSHIP, LEASING AND MANAGEMENT

We are one of the largest independent owners and operators of wireless
communications towers in the United States. We provide antenna site leasing
services, which primarily involve the leasing of antenna space on our towers, to
wireless carriers. In leasing antenna space, we generally receive monthly lease
payments from customers. Our customer leases typically have original terms of
five to ten years, with four or five renewal periods of five years each, and
usually provide for periodic rent increases ranging from two percent to five
percent per year. Monthly lease pricing varies with the tower location and the
number and type of antennas installed on a given site. Our wireless leasing
customers are leading wireless service providers, including AT&T Wireless,
Cingular, Nextel, Sprint PCS, T-Mobile, Verizon Wireless and their affiliates.
Together, these customers account for more than 89% of our monthly wireless
leasing revenues.

IN-BUILDING SHARED INFRASTRUCTURE SOLUTIONS

We are a leading provider in the rapidly growing business of
in-building neutral host distributed antenna systems serving telecommunications
carriers in the United States. We have the exclusive rights to provide
in-building systems to wireless carriers in over 300 retail shopping malls,
casino/hotel resorts and office buildings in the United States. Our leases with
property owners for the rights to install and operate the in-building systems
are generally for an initial period of ten years. Some of these leases contain
automatic extension provisions and continue after the initial period unless
terminated by us. Under these leases, we are the exclusive operator of
in-building

neutral host distributed antenna systems for the term of the lease. We are also
responsible for marketing the property as part of our portfolio of
telecommunications sites and for installing, operating and maintaining the
distributed antenna system at the properties. We grant rights to wireless
service providers to attach their equipment to our in-building system for a fee
under licenses with the providers that typically have an initial term of ten
years. We typically share a portion of the collected fees with the property
owners.

BROADCAST TOWER OWNERSHIP, LEASING AND MANAGEMENT

We are one of the largest independent owners and operators of broadcast
towers in the United States. We provide antenna site leasing services, which
involve the leasing of antenna space on our broadcast towers to broadcasters and
wireless carriers. In leasing antenna space, we generally receive monthly lease
payments from customers, with contracts typically initially ranging from ten to
20 years.

The following chart shows the locations of our wireless towers,
broadcast towers and in-building systems as of March 31, 2003:

STATE NUMBER
----- ------
Texas............................................. 1,005
California........................................ 840
Illinois.......................................... 738
Ohio.............................................. 549
Michigan.......................................... 385
Florida........................................... 334
Missouri.......................................... 324
Georgia........................................... 226
Pennsylvania...................................... 224
Alabama........................................... 207
Oklahoma.......................................... 202
New York.......................................... 193
Louisiana......................................... 180
North Carolina.................................... 177
Washington........................................ 148
Indiana........................................... 129
Wisconsin......................................... 123
Maryland.......................................... 117
Other............................................. 1,387
-----
Total............................................. 7,488
=====

ROOFTOP MANAGEMENT

We also provide rooftop management services to telecommunications
carriers in the United States. We are the exclusive site manager for over 11,000
real estate properties, with significant access clusters in major metropolitan
areas. Wireless carriers utilize our managed rooftop sites as transmitting
locations, often where there are no existing towers or where new towers are
difficult to build. Our rooftop management contracts are generally for an
initial period of three to five years. These contracts contain automatic
extension provisions and continue after the initial period unless terminated by
either party. Under these contracts, we are engaged as the exclusive site
manager for rooftop management. For these services, we receive a percentage of
occupancy or license fees.

BROADCAST SERVICES

We are a leading provider of broadcast tower analysis, design,
installation, and technical services. We have over 50 years of experience in the
broadcast tower industry and have worked on the development of more than 700
broadcast towers, which we believe represent approximately 50% of the existing
broadcast tower infrastructure in the United States.

Broadcast towers require a high level of technical design and erection
expertise, as they reach heights of up to 2,000 feet. The existing domestic
broadcast tower infrastructure was generally developed to accommodate individual
broadcast signals. This broadcast tower infrastructure was built primarily in
the 1940's and 1950's. Today, it is considered to be at capacity and somewhat
antiquated. The FCC mandate requiring the conversion of analog to digital
broadcast signals potentially creates significant infrastructure deployment
requirements for the broadcast community in the United States. In addition, the
engineering and construction expertise for broadcast towers is limited to a
relatively small number of fabrication and construction companies that
specialize in broadcast towers, including our company.

COMPETITIVE STRENGTHS

We believe that we are distinguished by the following competitive
strengths which will allow us to continue to grow our revenues and increase our
operating margins:

HIGH QUALITY ASSETS. We believe that the quality of our portfolio of
tower assets, including our tower clusters in major metropolitan markets, makes
us a preferred provider for the largest carriers in the wireless industry. In
addition, because our tower portfolio was predominantly built over the last four
years and we acquired primarily single-tenant towers from wireless carriers, we
have fewer tenants per tower than the other publicly traded tower companies.
Therefore, we expect that as we add new tenants our revenue per tower will grow
at a faster rate than revenue per tower of other publicly traded tower
companies. Over the last two years, we have been a leader in the tower industry
in terms of key operating performance measures such as same tower revenue and
same tower cash flow growth.

STABLE AND GROWING CORE LEASING BUSINESS. Our focus on the leasing of
antenna space on communications towers pursuant to long-term contracts provides
us with a recurring, stable cash flow stream. Significant relocation costs also
tend to deter existing tenants from switching to other towers. Our leases
generally provide for regular annual rent increases. Because our tower operating
expenses generally do not grow as we add additional tenants, once a tower is
built for an anchor tenant, additional tenants provide high incremental cash
flow.

LOW LEVELS OF DEBT IN OUR CAPITAL STRUCTURE. We currently operate with
the lowest levels of total debt and debt leverage among the publicly traded
tower companies. We also have substantially completed the build-out of our
wireless tower portfolio and terminated our build-to-suit contracts with
wireless carriers. These measures have reduced our capital expense commitments
and our future funding requirements. We believe our lower level of total debt
and funding requirements will increase our financial flexibility relative to the
other publicly traded tower companies and will enhance our cash flow generating
capability.

DISCIPLINED APPROACH TO OPERATIONS. Over the last eight quarters, we
have aggressively focused on operating cost controls. During that time, we
reduced our quarterly sales, general and administrative expenses as a percentage
of revenue from 31% to 16%. In addition, as a result of initiatives by our
management team over the past two years, we believe that our accounts receivable
as a percentage of revenues is the lowest among the publicly traded tower
companies. By reducing the amount of working capital required to operate our
business we have improved our operating flexibility.

EXPERIENCED MANAGEMENT. Our senior management team has been in place
for four years and its members have an average of over 11 years of experience in
the wireless industry. Our chief operating officer and the presidents of our
leasing and broadcast divisions, for example, have a combined 38 years of
experience in management positions at wireless carriers.

BUSINESS STRATEGY

We intend to capitalize on the continued growth in demand for wireless
services and the related infrastructure required to support that growth. The
principal features of our business strategy are to:

MAXIMIZE USE OF OUR TOWER PORTFOLIO. We believe that our highest
returns will be achieved by leasing additional space on our existing towers.
Because the costs of operating a tower are largely fixed, increasing utilization
will

significantly improve our operating margins. For example, (excluding the results
from the 545 towers we sold to Cingular in February 2003) our revenues per tower
have increased by approximately 18% and our tower cash flow per tower has
increased by approximately 26% for the quarter ended March 31, 2003 compared to
the quarter ended March 31, 2002.

TAKE ADVANTAGE OF OUR MAJOR MARKET PRESENCE. Approximately 57% of our
wireless antenna sites are located in the top 50 markets and approximately 71%
of our wireless antenna sites are located in the top 100 markets in the United
States, which are the highest percentages among the publicly traded tower
companies. Approximately 60% of the U.S. population is located in the top 50
markets and approximately 74% of the U.S. population is located in the top 100
markets. We believe the increase in peak minutes of use, together with capacity
constraints, in these markets will lead carriers to deploy more capital to
expand their network capacity in these markets than in other markets.

LEVERAGE EXISTING RELATIONSHIPS WITH WIRELESS SERVICE PROVIDERS AND
THEIR PROGRAM MANAGEMENT COMPANIES. Maintaining and cultivating relationships
with wireless service providers is a critical focus of our sales and marketing
program. We have a dedicated group of sales representatives that focuses on
establishing and maintaining relationships with customers at both local and
regional levels. In addition, we employ an experienced national accounts team
that works closely with each wireless service provider's corporate headquarters
and senior management team to cultivate and ensure long-term relationships.

CAPITALIZE ON OUR INDUSTRY-LEADING POSITION IN PROVIDING IN-BUILDING
SHARED INFRASTRUCTURE SOLUTIONS TO WIRELESS CARRIERS. We have the largest
operational base of distributed antenna systems providing in-building wireless
coverage in the tower industry. We also have a leading position in distributed
radio frequency transport. We believe wireless carriers will continue to commit
greater financial resources to these areas as they seek to improve network
quality and provide additional high quality network coverage.

CUSTOMERS

Our customers include several of the largest wireless service providers
in the United States, including AT&T Wireless, Cingular, Nextel, Sprint,
T-Mobile and Verizon Wireless. Our largest customers currently are Nextel (and
its affiliates) and Cingular, which represented approximately 28% and 20% of our
revenues, respectively, for each of the year ended December 31, 2002 and the
three months ended March 31, 2003. For the year ended December 31, 2001, Nextel
and Cingular accounted for 30% and 13% of our revenues, respectively. For the
year ended December 31, 2000, Nextel accounted for 48% of our revenues.

SALES AND MARKETING

We believe that our quality portfolio of tower assets, our strong
customer relationships and our operational excellence make us a preferred
provider for the wireless industry. Our sales and marketing goals are to:

o Leverage existing relationships and develop new relationships
with wireless service providers to lease antenna space on our
tower, in-building and rooftop assets; and

o Form relationships with wireless service providers' program
management companies to further broaden our channels of
distribution.

Maintaining and cultivating relationships with wireless service
providers is a critical focus of our sales and marketing program. We have a
dedicated group of sales representatives that focuses on establishing and
maintaining relationships with customers at both local and regional levels. In
addition, we employ an experienced national accounts team that works closely
with each wireless service provider's corporate headquarters and senior
management team to cultivate and ensure long-term relationships.

Our sales staff is compensated on new tenant revenue generation,
relocation/reconfiguration revenue, fee revenue and customer satisfaction. In
addition, our sales teams rely on the complementary functions of our field

support services and project management teams to further identify revenue
opportunities and enhance customer satisfaction.

COMPETITION

Our principal competitors include American Tower Corp., Crown Castle
International Corp., Pinnacle Holdings, Inc., SBA Communications Corp., Sprint
Sites USA, numerous independent tower operators and the many owners of non-tower
antenna sites, including rooftops, water towers and other alternate structures.
Wireless service providers, such as AT&T Wireless, Sprint PCS and T-Mobile, own
and operate their own tower networks and lease (or may in the future decide to
lease) antenna sites to other providers. We compete principally on the basis of
tower location and capacity, price, quality of service and density of service
within geographic market.

Technological developments are also making it possible for wireless
carriers to expand their use of existing facilities to provide service without
additional tower facilities. The increased use by carriers of signal combining
and related technologies, which allow two or more carriers to provide services
on different transmission frequencies using the communications antenna and other
facilities normally used by only one carrier, could reduce the demand for
tower-based broadcast transmissions and antenna space. In addition to sharing
transmitters, carriers are, through joint ventures and other arrangements (such
as Cingular's infrastructure joint ventures with T-Mobile and AT&T Wireless),
sharing (or considering the sharing of) telecommunications infrastructure in
ways that might adversely impact the growth of our business.

EMPLOYEES

As of March 31, 2003, we had 623 employees. None of our employees is
represented by a collective bargaining agreement, and we consider our employee
relations to be good.

INTERNATIONAL

During 2001 we ceased development efforts in Europe and Mexico. In
2002, we sold our network services operations in Canada. Our primary focus is on
operations in the United States.

REGULATORY AND ENVIRONMENTAL MATTERS

FEDERAL REGULATIONS

Both the FCC and the FAA regulate towers used for communications
transmitters and receivers. These regulations control the siting, marking and
lighting of towers and generally, based on the characteristics of the tower,
require registration of tower facilities with the FCC. Wireless and broadcast
communications antennas operating on towers are separately regulated and
independently authorized by the FCC based upon the particular frequency used and
the service provided. In addition to these regulations, SpectraSite must comply
with certain environmental laws and regulations.

Under the requirements of the Communications Act of 1934, as amended,
the FCC, in conjunction with the FAA, has developed standards for review of
proposals for new or modified antenna structures. These standards mandate that
the FCC and the FAA consider the height of the proposed antenna structure, the
relationship of the structure to existing natural or man-made obstructions and
the proximity of the structure to runways and airports. Proposals to construct
new communications sites or modify existing communications sites that could
affect air traffic must be filed with and reviewed by the FAA to ensure the
proposals will not present a hazard to aviation. The FAA may condition its
issuance of no-hazard determinations upon compliance with specified lighting and
marking requirements. The FCC will not authorize the operation of communications
antennas on towers unless the tower has

been registered with the FCC or a determination has been made that such
registration is not necessary. The FCC will not register a tower unless it has
received all necessary clearances from the FAA. The FCC also enforces special
lighting and marking requirements. Owners of towers on which communications
antennas are located have an obligation to maintain marking and lighting to
conform to FCC standards. Tower owners also bear the responsibility of notifying
the FAA of any tower lighting failures. We generally outsource the monitoring of
the lighting of our towers to contractors that specialize in those services.
However, under the FCC's rules, we remain fully liable for the acts and
omissions of those contractors. We generally indemnify our customers against any
failure to comply with applicable standards. Failure to comply with the
applicable requirements (including as a result of acts or omissions of our
contractors, which may be beyond our control) may lead to monetary forfeitures
or other enforcement actions, as well as civil penalties, contractual liability
and/or tort liability.

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

In October 2000, the FCC adopted rules and policies related to
telecommunications service providers' access to rooftops, other rights-of-way
and conduits in multi-tenant buildings. The FCC prohibited telecommunications
carriers in commercial settings from entering into new exclusive contracts with
building owners, including contracts that effectively restrict premises owners
or their agents from permitting access to other telecommunications service
providers. The FCC also established procedures to ensure that the demarcation
point in buildings, which marks the end of the incumbent local exchange
carrier's control over on-premises wiring and the beginning of the customer's or
building owner's control, will, at the premises owner's request, be at the
"minimum point of entry" to the structure rather than further inside the
premises. In addition, the FCC determined that, under the Communications Act,
utilities, including local exchange carriers, will be required to afford
telecommunications carriers and cable service providers reasonable and
nondiscriminatory access to conduits and rights-of-way in customer buildings, to
the extent such conduits and rights-of-way are owned or controlled by the
utility. Finally, the FCC amended its existing rules to give building tenants
the same ability to place on their leased or owned property small satellite
dishes for receiving telecommunications and other fixed wireless signals that
they currently have for receiving video services.

In the same October 2000 action, the FCC sought comment on a number of
related issues, including whether the prohibition on exclusive contracts should
be extended to residential buildings; whether it should be broadened to prohibit
preferences other than exclusive access, such as exclusive marketing or landlord
bonuses for tenants; whether the FCC should prohibit carriers from enforcing
exclusive access provisions in existing contracts for commercial or residential
multi-tenant buildings; and whether the agency has authority to prohibit local
exchange carriers from providing services to multi-tenant buildings where the
owners maintain policies unreasonably preventing competing carriers from gaining
access to potential customers within the building.

In 1996, the FCC mandated the conversion of analog television signals
to digital. As a result of several subsequent rulings by the FCC, each
commercial television station in the United States was required to complete
construction of new digital broadcasting facilities by May 1, 2002.
Non-commercial stations were given until May 1, 2003, to complete digital
construction. By April 21, 2003, all television stations were required to be
simulcasting at

least 50% of their programming on both their analog and digital facilities and
must convert to 100% simulcasting within two years. The simulcasting transition
is scheduled to end in 2006, when television broadcasters will be required to
terminate analog service, unless that date has been extended based on
satisfaction of statutory standards demonstrating that significant portions of
the viewing public do not have the ability to receive digital television
signals.

Although these deadlines have resulted from past extensions by the FCC
of previous deadlines, various broadcasters have requested that the FCC further
extend the current conversion deadlines. In December 2001, the FCC declined to
issue a blanket extension of the current deadlines, however, and instead agreed
to continue to consider extension requests by particular broadcasters on a
case-by-case basis, and made it easier for broadcasters to qualify for such
extensions. As of January 2003, approximately 93% of all television stations in
the United States have been granted a construction permit or a license for
digital television. More than 75% of the stations whose deadline to complete
their digital television broadcast facilities was May 1, 2002, requested an
extension of their completion deadline to November 1, 2002 and approximately 85%
of those requests were granted. Of those stations that were granted an initial
extension, nearly 78% requested an additional six-month extension and, to date,
the FCC has granted more than one-third of these extension requests. In April
2003, the FCC granted a six-month waiver on DTV simulcast requirements for all
public television stations.

In August 2002, the FCC adopted a rule requiring all TV receivers
manufactured in the United States with screen sizes greater than 13 inches, and
all TV receiving equipment, such as VCRs and DTV recorders, be capable of
receiving DTV signals over the air no later than July 1, 2007. We believe that
this increased penetration of digital television capability among the general
broadcast audience may also hasten the digital conversion and add to the demand
for digital television broadcast towers.

We believe that, although the planned conversion to digital might
continue to be delayed through FCC extensions or the failure of various
broadcasters to achieve the conversion in accordance with the established
deadlines, if and when the conversion occurs, it will create significant
potential for increased demand for space on broadcast towers, including
our towers. We believe that the digital conversion will thus drive increased
demand for our tower design and installation services.

STATE AND LOCAL REGULATIONS

Most states regulate certain aspects of real estate acquisition and
leasing activities. Where required, we outsource site acquisition to licensed
real estate brokers or agents. Local regulations and restrictions include
building codes and other local ordinances, zoning restrictions and restrictive
covenants imposed by community developers. These regulations and restrictions
vary greatly, but typically require tower owners to obtain a permit or other
approval from local officials or community standards organizations prior to
tower construction and prior to modifications of towers, including installation
of equipment for new customers. Local zoning authorities generally have been
hostile to construction of new transmission towers in their communities because
of the height and visibility of the towers. Companies owning or seeking to build
or modify towers have encountered an array of obstacles arising from state and
local regulation of tower site construction and modification, including
environmental assessments, fall radius assessments, marking and lighting
requirements, and concerns with interference with other electronic devices. The
delays resulting from the administration of such restrictions can last for
several months and, when appeals are involved, can take several years.

ENVIRONMENTAL AND RELATED REGULATIONS

Owners and operators of communications towers are subject to
environmental laws. The FCC's decision to register a proposed tower may be
subject to environmental review under the National Environmental Policy Act of
1969, which requires federal agencies to evaluate the environmental impacts of
their decisions under certain circumstances. The FCC has issued regulations
implementing the National Environmental Policy Act, as well as the National
Historic Preservation Act, the Endangered Species Act and the American Indian
Religious Freedom Act. These regulations place responsibility on each applicant
to investigate potential environmental and other effects of operations and to
disclose any significant effects in an environmental assessment prior to
constructing a tower or adding a new tenant on a tower. In the event the FCC
determines that a proposed tower would have a significant environmental impact
based on the standards the FCC has developed, the FCC would be required to
prepare an

environmental impact statement. In addition, various environmental groups
routinely petition the FCC to deny applications to register new towers. This
regulatory process can be costly and could significantly delay the registration
of a particular tower. In addition, we are subject to environmental laws that
may require investigation and remediation of any contamination at facilities we
own or operate or at third-party waste disposal sites. These laws could impose
liability even if we did not know of, or were not responsible for, the
contamination. Although we believe that we currently have no material liability
under applicable environmental laws, the costs of complying with existing or
future environmental laws, responding to petitions filed by environmental
protection groups, investigating and remediating any contaminated real property
and resolving any related liability could have a material adverse effect on our
business, financial condition or results of operations.

PROPERTIES

We are headquartered in Cary, North Carolina, where we currently occupy
an owned 109,570 square foot office facility on 19.7 acres of land and lease
61,071 square feet of office space. We own a 38,000 square foot broadcast tower
manufacturing facility located on 10 acres of land in Pine Forge, Pennsylvania.
We also own 9.5 acres of land in Visalia, California, on which a 57,000 square
foot broadcast tower manufacturing facility is located and 161.7 acres of land
in Mobile, Alabama, on which a 1,944 foot broadcast tower is located.

Our interests in communications sites are comprised of a variety of fee
interests, leasehold and sub-leasehold interests created by long-term lease or
sublease agreements, private easements, and easements and licenses or
rights-of-way granted by government entities. In rural areas, a communications
site typically consists of a three-to-five acre tract that supports towers,
equipment shelters and guy wires to stabilize the structure. Less than 2,500
square feet are required for a self-supporting tower structure of the kind
typically used in metropolitan areas. Land leases generally have an initial term
of five years, with five additional five-year renewal periods. See "-- Products
and Services -- Site Leasing" for a list of the locations of our wireless
towers.

LEGAL PROCEEDINGS

We emerged from bankruptcy on February 10, 2003. See "Management's
Discussion and Analysis of Financial Condition and Results of Operations --
Business Overview" for a discussion of our bankruptcy proceedings. Our
subsidiaries, including Communications, were not part of the bankruptcy
reorganization.

From time to time, we are involved in various legal proceedings
relating to claims arising in the ordinary course of business. We are not
currently a party to any such legal proceeding, the adverse outcome of which,
individually or in the aggregate, is expected to have a material adverse effect
on our business, financial condition or results of operations.

MANAGEMENT

DIRECTORS AND EXECUTIVE OFFICERS

The following table sets forth information regarding our directors and
executive officers:

NAME AGE POSITION
---- --- --------

Stephen H. Clark.......................... 58 President, Chief Executive Officer, Chairman
and Director
Timothy G. Biltz.......................... 44 Chief Operating Officer
David P. Tomick........................... 51 Executive Vice President and Chief Financial Officer
Dale A. Carey............................. 38 President, Leasing Division
Thomas A. Prestwood, Jr................... 50 President, Broadcasting Division
Gabriela Gonzalez......................... 41 Senior Vice President and Controller
John H. Lynch............................. 45 Vice President, General Counsel and Secretary
Paul M. Albert, Jr........................ 60 Director
Gary S. Howard............................ 52 Director
Robert Katz............................... 36 Director
Richard Masson............................ 45 Director

STEPHEN H. CLARK is President, Chief Executive Officer and Chairman of
the Board of Directors of SpectraSite. He has been a director of SpectraSite
since its formation in May 1997 and Chairman since September 2002. Mr. Clark has
23 years of general management experience in high growth companies in the
communications, technology and manufacturing sectors.

TIMOTHY G. BILTZ is Chief Operating Officer. Prior to joining
SpectraSite in August 1999, Mr. Biltz spent 10 years at Vanguard Cellular
Systems, Inc., most recently as Executive Vice President and Chief Operating
Officer. He joined Vanguard in 1989 as Vice President of Marketing and
Operations and was Executive Vice President and President of U.S. Wireless
Operations from November 1996 until May 1998 when he became Chief Operating
Officer. Mr. Biltz was instrumental in Vanguard's development from an initial
start-up to an enterprise with over 800,000 subscribers.

DAVID P. TOMICK is Executive Vice President and Chief Financial
Officer. Mr. Tomick joined SpectraSite in 1997. From 1994 to 1997, Mr. Tomick
was Chief Financial Officer of Masada Security, Inc., a company engaged in the
security monitoring business. From 1988 to 1994, he was Vice President --
Finance of Falcon Cable TV where he was responsible for debt management, mergers
and acquisitions, equity origination and investor relations. Prior to 1988, he
managed a team of corporate finance professionals focusing on the communications
industry for The First National Bank of Chicago.

DALE A. CAREY is President of SpectraSite's Leasing Division. Mr. Carey
joined SpectraSite as Senior Vice President of Services and Operations in
February 2000 and assumed his current position in May 2002. Prior to joining
SpectraSite, Mr. Carey served in various capacities for the Pennsylvania Super
System of Vanguard Cellular Systems since 1989, most recently as the Regional
Vice President and General Manager.

THOMAS A. PRESTWOOD, JR. is President of SpectraSite's Broadcast
Division. Mr. Prestwood joined SpectraSite in November 2001. Mr. Prestwood has
over 15 years of senior management experience and executive level work in the
telecommunications industry, most recently as Regional Vice President for
Telecorp PCS. Prior to joining Telecorp, Mr. Prestwood served as an Executive
Vice President for Highland Holdings and a Market Director for AT&T Wireless
Services. Mr. Prestwood was a Senior Vice President at Vanguard Cellular
Systems, Inc. from 1990 until the company was acquired by AT&T Wireless in 1999.

GABRIELA GONZALEZ is Senior Vice President and Controller. Prior to
joining SpectraSite in April 2000, Ms. Gonzalez served as Controller for
Commercial Operations for GlaxoWellcome (now GlaxoSmithKline). Before

joining GlaxoWellcome in 1998, Ms. Gonzalez served as Controller for Alyeska
Pipeline, the operator of the TransAlaskan Pipeline. Ms. Gonzalez is a Certified
Public Accountant in Alaska and North Carolina.

JOHN H. LYNCH is Vice President, General Counsel and Secretary. Prior
to joining SpectraSite in August 1999, Mr. Lynch served as General Counsel for
Qualex Inc., the wholly owned photofinishing subsidiary of Eastman Kodak
Company. Before joining Qualex in 1989, Mr. Lynch practiced corporate and real
estate law in the Atlanta, Georgia offices of Wildman, Harrold, Allen, Dixon and
Branch.

PAUL M. ALBERT, JR. has been a director of SpectraSite since February
2003. Mr. Albert is a corporate director, a finance and capital markets
consultant primarily engaged in educating bankers at global financial
institutions, and a private investor. He has been a director of DigitalGlobe,
Inc. since April 1999 and prior to the sale of the companies was a director of
CAI Wireless Systems from December 1998 to August 1999 and Teletrac Inc. from
December 1999 to April 2001. In his capacity as a corporate director he has
served on audit, compensation, finance, and governance committees, usually as
committee chairman, and is a director of the New York Chapter of the National
Association of Corporate Directors. From 1970 to 1996 he was an investment
banker, holding senior officer positions at Morgan Stanley & Co. and Prudential
Securities.

GARY S. HOWARD has been a director of SpectraSite since February 2003.
Mr. Howard has been Executive Vice President, Chief Operating Officer and a
director of Liberty Media, Inc. since July 1998. Mr. Howard served as Chief
Executive Officer of Liberty Satellite & Technology, Inc. from December 1996 to
April 2000. Mr. Howard also served as Executive Vice President of TCI from
December 1997 to March 1999. Previously, Mr. Howard served as Chief Executive
Officer, Chairman of the Board and a director of TV Guide, Inc., President and
Chief Executive Officer of TCI Ventures Group, LLC and President of Liberty
Satellite and Technology. Mr. Howard is also a director of Liberty Satellite &
Technology, Inc., UnitedGlobalCom, Inc., and On Command Corporation. Mr. Howard
serves as Chairman of the Board of Liberty Satellite & Technology, Inc. and On
Command Corporation.

ROBERT KATZ has been a director of SpectraSite since February 2003. Mr.
Katz has been associated with Apollo Management, L.P. since 1990. Mr. Katz is
also a director of Vail Resorts, Inc.

RICHARD MASSON has been a director of SpectraSite since February 2003.
Mr. Masson is a Principal and co-founder of Oaktree Capital Management, LLC, an
investment advisory firm with over $25 billion of assets under management. He
serves as co-Head of Research for their distressed debt funds. Prior to that,
Mr. Masson was the head of the Special Credits analytic group at The TCW Group,
Inc.

DIRECTORS' COMPENSATION

Directors who are not executive officers receive an annual fee of
$25,000 and $1,000 for each board meeting they attend. In addition, each Audit
Committee member receives an annual fee of $20,000 and the chairman of the Audit
Committee receives an additional annual fee of $5,000. Each member of the
Compensation Committee and the Governance Committee receives an annual fee of
$2,000 and the chairman of the Compensation Committee receives an additional
annual fee of $5,000. Directors will be reimbursed for out-of-pocket expenses
incurred in connection with attending meetings of the board and its committees.
We also have granted 5,000 stock options to each of our non-employee directors
as compensation for their services as members of our board.

EXECUTIVE COMPENSATION

SUMMARY COMPENSATION TABLE

The following table sets forth the cash and non-cash compensation paid
by or incurred on behalf of SpectraSite to its Chief Executive Officer and four
other most highly compensated executive officers for the years ended December
31, 2000, 2001 and 2002.

LONG TERM
ANNUAL COMPENSATION COMPENSATION AWARDS
--------------------------------------- ------------------------
NUMBER OF
SECURITIES
OTHER UNDERLYING ALL OTHER
ANNUAL($) RESTRICTED OPTIONS/ COMPENSATION
NAME AND PRINCIPAL POSITION YEAR SALARY($) BONUS($) (1) STOCK ($) SARS(#) (2) ($) (3)
--------------------------- ---- --------- -------- --- -------- ----------- -------

Stephen H. Clark............. 2002 375,000 367,500 -- -- -- 5,500
Chief Executive Officer 2001 375,000 300,000 -- -- 245,250 4,884
2000 323,077 325,000 -- -- 500,000 4,398

Timothy G. Biltz............. 2002 300,000 294,000 -- -- -- 5,500
Chief Operating Officer 2001 300,284 270,000 -- -- 140,000 5,100
2000 260,000 200,000 -- -- 300,000 5,100

David P. Tomick.............. 2002 235,000 230,300 -- -- -- 5,500
Chief Financial Officer 2001 228,654 89,725 -- -- 113,973 5,250
2000 219,615 77,150 -- -- 100,000 5,100

Dale A. Carey (4)............ 2002 209,423 102,255 -- -- -- 5,500
President, Leasing 2001 202,500 90,839 -- -- 75,000 3,175
2000 146,058 53,885 15,214 -- 150,400 26,059

Thomas A. Prestwood, Jr. (4). 2002 204,750 97,500 -- -- -- 5,000
President, Broadcast 2001 15,000 50,000 -- -- 150,000 --

------------------------
(1) The amount indicated for Mr. Carey in 2000 reflects tax gross ups on
relocation expenses.
(2) All options were terminated on February 10, 2003 under the Plan of
Reorganization without consideration.
(3) Amounts reported are SpectraSite's contribution under its 401(k) plan,
except the amount reported for Mr. Carey in 2000. The amount reported for
Mr. Carey in 2000 includes SpectraSite's contribution under its 401(k) plan
of $2,229 and a relocation reimbursement of $23,830.
(4) Mr. Carey joined SpectraSite in February 2000. Mr. Prestwood joined
SpectraSite in November 2001.

OPTIONS/SAR GRANTS IN LAST FISCAL YEAR

There were no stock option grants to the executive officers named in
the Summary Compensation Table above during the fiscal year ended December 31,
2002.

AGGREGATED OPTIONS/SAR EXERCISES AND VALUE IN LAST FISCAL YEAR

The table below provides information as to the exercise of options
during the fiscal year ended December 31, 2002 and the number and value of
unexercised options held by the executive officers named in the Summary
Compensation Table above as of December 31, 2002.

AGGREGATED OPTION/SAR EXERCISES IN LAST FISCAL YEAR
AND YEAR-END OPTION/SAR VALUES

NUMBER OF SECURITIES VALUE OF UNEXERCISED
UNDERLYING UNEXERCISED IN-THE-MONEY OPTIONS/SARS
NUMBER OF OPTIONS/SARS AT AT
SHARES FISCAL YEAR-END (#) (1) FISCAL YEAR-END ($)(A)
ACQUIRED ON VALUE -------------------------- --------------------------
NAME EXERCISE(#) REALIZED($) EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
------------------------------- ----------- ----------- ----------- ------------- ----------- -------------

Stephen H. Clark............... -- -- 843,813 627,687 -- --
Timothy G. Biltz............... -- -- 485,000 355,000 -- --
David P. Tomick................ -- -- 292,108 197,730 -- --
Dale A. Carey.................. -- -- 93,950 131,450 -- --
Thomas A. Prestwood, Jr........ -- -- 37,500 112,500 -- --

------------------------
(1) All options were terminated on February 10, 2003 under the Plan of
Reorganization without consideration.

EMPLOYMENT AGREEMENTS

SpectraSite has entered into employment agreements with each of Messrs.
Clark, Tomick and Biltz, effective as of February 10, 2003. The initial term of
the employment agreements is three years, with automatic one-year renewals
unless either party gives written notice of nonrenewal at least six months prior
to the end of the term. The annual base salaries for Messrs. Clark, Tomick, and
Biltz are determined pursuant to their respective employment agreements, and
they are each eligible to receive annual bonuses in amounts to be determined
based on SpectraSite's achievement of annual financial targets established by
the Board of Directors of SpectraSite. In connection with SpectraSite's
emergence from chapter 11 bankruptcy, Messrs. Clark and Tomick also received
cash bonuses on February 10, 2003, in the amounts of $2,800,000 and $1,120,000,
respectively. If their employment is terminated as a result of their death or
disability or is terminated by SpectraSite without cause, or if they resign
without good reason during the thirteenth month following a change in control
(as defined in the employment agreements), Messrs. Clark, Tomick, and Biltz will
be entitled to receive continued salary, average annual bonus and benefits for a
period of 24 months following the termination, provided that this period shall
be extended to 36 months if they are terminated by SpectraSite without cause or
if they resign with good reason during the 24-month period following a change in
control.

Messrs. Clark, Tomick, and Biltz have agreed that for a period of 24
months following the termination of their employment with SpectraSite they
generally will not:

o engage in, or own any interest in or perform any services for
any business which engages in, competition with SpectraSite;

o solicit management employees of SpectraSite or otherwise
interfere with the employment relationship between SpectraSite
and its employees; or

o hire, engage or in any manner be associated with any supplier,
contractor or entity with a business relationship with
SpectraSite, if such action would have a material adverse
effect on SpectraSite.

In connection with their employment agreements, Messrs. Clark, Tomick,
and Biltz were granted options to purchase 763,889, 277,778 and 486,111 shares
of common stock, respectively. The exercise prices of these options are $29.82,
$30.18 and $26.15, respectively. The options were vested 20% on March 12, 2003
and, subject to the optionee's continued employment with SpectraSite, 50% will
vest ratably on a monthly basis during the next 36 months, and 30% will vest on
March 12, 2009, or earlier if the Company achieves annual financial targets
determined by the Board of Directors of SpectraSite.

SEVERANCE PLANS

Messrs. Carey and Prestwood participate in SpectraSite's Executive
Severance Plan B. This plan generally provides that, upon termination of a
participant's employment by SpectraSite other than for cause or by the
participant for good reason (which includes any termination by a participant
during the thirteenth month following a

change in control), the participant will be entitled to continued payments of
base salary and target bonus, as well as continued benefits, during the 18
months following termination if the participant then has five or more years
experience in current or equivalent employment positions, and 12 months
following termination if the participant has less than five years of such
experience. In the event of termination resulting from a change in control or in
the two-year period following a change in control, the periods referred to above
shall be increased to 24 months. For this purpose, a change of control occurs
upon (i) the acquisition, other than by the principal stockholders of
SpectraSite, of more than 35% of the total combined voting power of
SpectraSite's outstanding securities and such principal stockholders own a
lesser percentage of the voting power of SpectraSite's outstanding securities
than such acquiring person and cease to have the ability to elect or designate
for election a majority of SpectraSite's Board of Directors; (ii) a change in
the composition of the Board of Directors of SpectraSite during any two-year
period that results in the current directors (or those directors approved by the
Board of Directors) ceasing to constitute a majority of the directors; (iii) a
merger or consolidation of SpectraSite with another entity unless the Company's
outstanding voting securities are exchanged for consideration including
securities representing a majority of the voting power of the surviving
corporation; or (iv) a sale of all or substantially all of SpectraSite's assets
other than to the principal stockholders of SpectraSite or persons controlled by
such stockholders.

EQUITY COMPENSATION PLANS

In connection with the Plan of Reorganization, all outstanding awards
under the Company's compensation plans were terminated without consideration.
The following table sets forth information with respect to compensation plans
under which the common stock is authorized for issuance as of March 31, 2003,
subject to execution of definitive documentation.

EQUITY COMPENSATION PLAN INFORMATION

WEIGHTED- NUMBER OF SECURITIES
AVERAGE EXERCISE REMAINING AVAILABLE
NUMBER OF SECURITIES PRICE OF FOR FUTURE ISSUANCE
TO BE ISSUED UPON OUTSTANDING UNDER EQUITY
EXERCISE OF OPTIONS COMPENSATION PLANS
OUTSTANDING OPTIONS, WARRANTS AND (EXCLUDING SECURITIES
PLAN CATEGORY WARRANTS AND RIGHTS RIGHTS REFLECTED IN COLUMN)
------------------------------------------ ----------------------- ------------------ -----------------------

Equity compensation plans
approved by security holders (1)....... 2,706,665 $ 27.60 293,335
Equity compensation plans not approved by
security holders....................... -- --
--------- -------
Total............................ 2,706,665 $ 27.60 293,335
========= ============ =======

------------------------
(1) Includes SpectraSite's 2003 Equity Incentive Plan, which was approved in
connection with the Plan of Reorganization.

2003 EQUITY INCENTIVE PLAN

On March 12, 2003, subject to execution of definitive documentation,
options for 2,706,665 shares of common stock were issued under the Equity
Incentive Plan, each having an exercise price of $26.15 per share, except for
the options granted to Messrs. Clark and Tomick, whose options have an exercise
price of $29.82 and $30.18, respectively. As of that date, approximately 293,335
shares of common stock were available for future grants.

The following is a discussion of other features of the plan.

PURPOSE OF PLAN. The nature and purpose of the plan is to use
performance-based grants of long-term, equity-based incentives in the form of
stock options and other equity based awards in order to link total compensation
for management and key employees to SpectraSite's performance and stock price
appreciation and to allow SpectraSite to remain competitive and to retain top
performing employees over time. The plan also permits awards to directors.

PLAN ADMINISTRATION. The plan is administered by the Compensation
Committee of the Board of Directors of SpectraSite. The Compensation Committee
has sole discretion, subject to the terms of the plan, to determine the amounts
and types of awards to be made, set the terms, conditions and limitations
applicable to each award, and prescribe the form of the instruments embodying
any award. The Board of Directors or the Compensation Committee may delegate to
another committee of the Board of Directors the authority to grant awards to
certain persons and the Compensation Committee may generally delegate the
authority to act on its behalf to certain officers of SpectraSite.

ELIGIBILITY. Awards may be granted under the plan to any director,
officer or other employee of SpectraSite and its subsidiaries, and any
individual providing services as a consultant, advisor or otherwise as an
independent contractor to SpectraSite and its subsidiaries.

VESTING AND EXERCISE OF OPTIONS. Options become exercisable as set
forth in a participant's award agreement.

PAYMENT FOR OPTIONS. The exercise price of any stock option awarded
under the plan will be determined by the Compensation Committee. Participants
may exercise an option by making payment in any manner specified by the
Compensation Committee.

RESTRICTED STOCK. The Compensation Committee may authorize awards of
restricted stock, including performance-based restricted stock. Awards of
restricted stock may be made for no consideration, or for an amount as is
determined by the Compensation Committee. Restricted stock is common stock that
generally is non-transferable and is subject to other restrictions determined by
the Compensation Committee for a specified period. Unless the Compensation
Committee determines otherwise, or specifies otherwise in an award agreement, if
the participant terminates employment during the restricted period, then any
unvested restricted stock will be forfeited. To date, no shares of restricted
stock have been awarded under the plan.

OTHER AWARDS UNDER THE PLAN. The Compensation Committee may grant other
types of equity-based awards such as stock appreciation rights, deferred stock,
dividend equivalents and performance-based awards. Such awards and awards of
restricted stock may be subject to attainment of preestablished performance
goals based on, EBITDA, revenue, net income, operating income, cash plan, return
on assets, return on equity, return on capital or total stockholder return.

FEDERAL INCOME TAX CONSEQUENCES OF OPTIONS. The grant of a stock option
under the plan will generally not have any immediate effect on the federal
income tax liability of SpectraSite or the participant. If the Compensation
Committee grants a non-qualified stock option, then the participant will
recognize ordinary income at the time he or she exercises the option in an
amount equal to the difference between the fair market value of the common stock
at the time of its exercise and the exercise price, and SpectraSite will receive
a deduction for the same amount.

If the Compensation Committee grants an incentive stock option, the
participant generally will not recognize any taxable income at the time he or
she exercises the incentive stock option, but will recognize income at the time
he or she sells the common stock acquired by exercise of the incentive stock
option. Upon sale of the common stock acquired upon exercise of the incentive
stock option, the employee will recognize income equal to the difference between
the exercise price and the amount received upon sale, and such income generally
will be eligible for capital gain treatment. SpectraSite generally is not
entitled to an income tax deduction in connection with an incentive stock
option. However, if the employee sells the common stock either within two years
of the date of the grant, or within one year of the date of the exercise of the
incentive stock option, then the option is treated for federal income tax
purposes as if it were a non-qualified stock option; the income recognized by
the employee will not be eligible for capital gain treatment and SpectraSite
will be entitled to a federal income tax deduction equal to the amount of income
recognized by the employee.

PRINCIPAL AND SELLING STOCKHOLDERS

The table below sets forth, as of June 30, 2003, information with
respect to the beneficial ownership of SpectraSite's common stock by:

o each of our directors and each of the executive officers named
in the Summary Compensation Table under "Management--
Executive Compensation;"

o each person who is known to be the beneficial owner of more
than 5% of any class or series of our capital stock;

o all of our directors and executive officers as a group; and

o each other selling stockholder participating in the offering,
assuming that the underwriters will not exercise their
overallotment option.

The amounts and percentages of common stock beneficially owned are
reported on the basis of regulations of the Securities and Exchange Commission
governing the determination of beneficial ownership of securities. Under these
rules, a person is deemed to be a beneficial owner of a security if that person
has or shares voting power, which includes the power to vote or to direct the
voting of such security, or investment power, which includes the power to
dispose of or to direct the disposition of such security. A person is also
deemed to be a beneficial owner of any securities of which that person has a
right to acquire beneficial ownership within 60 days. Under these rules, more
than one person may be deemed to be a beneficial owner of the same securities.

SHARES OF COMMON STOCK SHARES OF COMMON STOCK
BENEFICIALLY OWNED BEFORE BENEFICIALLY OWNED AFTER
THIS OFFERING THIS OFFERING
------------- -------------
NUMBER PERCENTAGE SHARES NUMBER PERCENTAGE
NAME OF BENEFICIAL OWNER OF SHARES OF CLASS OFFERED OF SHARES OF CLASS
------------------------ --------- -------- ------- --------- --------

Stephen H. Clark (1).................................... 206,823 * -- 206,823 *
Timothy G. Biltz (2).................................... 130,980 * -- 130,980 *
David P. Tomick (3)..................................... 76,803 * -- 76,803 *
Dale A. Carey (4)....................................... 42,662 * -- 42,662 *
Thomas A. Prestwood, Jr. (5)............................ 20,208 * -- 20,208 *
Paul M. Albert, Jr. (6)................................. 1,556 * -- 1,556 *
Gary S. Howard (6)...................................... 1,556 * -- 1,556 *
Robert Katz (6) (7)..................................... 1,556 * -- 1,556 *
Richard Masson (6) (8).................................. 4,834,693 20.4 1,225,000 3,609,693 15.2
Funds affiliated with Apollo Management V, L.P. (7)..... 5,575,809 23.5 1,435,000 4,140,809 17.4
Funds managed by Oaktree Capital Management, LLC (6) (8) 4,834,693 20.4 1,225.000 3,609,693 15.2
Funds managed by Capital Research and Management
Company (9).......................................... 3,320,695 14.0 840,000 2,480,695 10.4
Franklin Mutual Advisers, LLC (10)...................... 2,658,454 11.2 1,000,000 1,658,454 7.0
All current directors and executive officers as a group
(11 persons) (11).................................... 5,335,800 22.0 -- 4,110,800 17.3

------------------------
* Less than 1%.

(1) Includes 205,826 shares of common stock issuable upon the exercise of
outstanding options exercisable within 60 days. Also includes 997 shares of
common stock issuable upon the exercise of outstanding warrants exercisable
within 60 days.

(2) Includes 130,980 shares of common stock issuable upon the exercise of
outstanding options exercisable within 60 days.

(3) Includes 74,846 shares of common stock issuable upon the exercise of
outstanding options exercisable within 60 days. Also includes 1,957 shares
of common stock issuable upon the exercise of outstanding warrants
exercisable within 60 days, of which 602 are held by the Tomick Family
Trust.

(4) Includes 42,662 shares of common stock issuable upon the exercise of
outstanding options exercisable within 60 days.

(5) Includes 20,208 shares of common stock issuable upon the exercise of
outstanding options exercisable within 60 days.

(6) Includes 1,556 shares of common stock issuable upon the exercise of
outstanding options exercisable within 60 days.

(7) With respect to Apollo Management V, L.P. ("Apollo Management"), includes
5,575,809 shares of common stock held by AP Towers LLC ("AP Towers"), the
interests of which are held by Apollo Investment Fund V, L.P., Apollo
Overseas Partners V, L.P. and other affiliated investment partnerships
(collectively, the "Apollo Funds"). Apollo Management serves as manager of
each of AP Towers and each of the Apollo Funds. Mr. Katz, a director of the
Company, is associated with Apollo Management but does not beneficially own
any of the shares held by AP Towers or the Apollo Funds. The business
address of AP Towers and each of the Apollo Funds is c/o Apollo Management,
1301 Avenue of the Americas, New York, NY 10019.

(8) Includes 3,195,905 shares of common stock held by OCM Opportunities Fund
IV, L.P. and 1,637,232 shares held by OCM Opportunities Fund IVb, L.P. Each
of the funds is managed by Oaktree Capital Management, LLC, who disclaims
beneficial ownership of the shares except to the extent of its pecuniary
interest in the shares. Mr. Masson is a Principal of Oaktree and disclaims
beneficial ownership of the shares held by the Oaktree funds except to the
extent of his pecuniary interest in the shares. The business address for
Mr. Masson and the Oaktree funds is 333 S. Grand Avenue, 28th Floor, Los
Angeles, California 90071.

(9) Capital Research and Management Company is the beneficial owner of common
stock, arising from the beneficial ownership by certain investment
companies, including 1,270,664 shares owned by American High-Income Trust,
registered under the Investment Company Act of 1940, which is advised by
Capital Research and Management, a registered investment adviser. Such
shares are held by American High-Income Trust and other funds, in their
capacity as investment companies and are beneficially held by Capital
Research and Management as an investment adviser. American High-Income
Trust and the other funds have sole voting power over the shares and
Capital Research and Management has sole dispositive power over the shares.
The business address for Capital Research and Management is 333 S. Hope
St., 55th Floor, Los Angeles, California 90071.

(10) Franklin Mutual Advisers, LLC is the beneficial owner of common stock,
arising from the beneficial ownership by certain investment companies and
other managed accounts, including investment companies registered under the
Investment Company Act of 1940, which are advised by Franklin Mutual
Advisers, LLC. Such shares are beneficially held by funds in their capacity
as investment companies and are beneficially held by Franklin Mutual
Advisers, LLC as an investment advisor. Franklin Mutual Advisers, LLC has
sole voting power and sole dispositive power over the shares but has no
pecuniary interest in and disclaims beneficial ownership of such shares.
The business address for Franklin Mutual Advisers, LLC is 51 John F.
Kennedy Parkway, Short Hills, New Jersey 07078.

(11) Includes 499,695 shares of common stock issuable upon the exercise of
outstanding options exercisable within 60 days and 2,968 shares of common
stock issuable upon the exercise of outstanding warrants exercisable within
60 days.

CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

REGISTRATION RIGHTS AGREEMENT

Pursuant to the Plan of Reorganization, SpectraSite entered into a
Registration Rights Agreement with Oaktree Capital Management, LLC, as general
partner and/or investment manager of certain funds and accounts it manages, AP
Towers LLC, an affiliate of Apollo Management V, L.P., and Capital Research
Management Company as investment adviser for certain funds it manages, providing
for the registration of the common stock. The following is a summary of the
material terms of that registration rights agreement.

Under the registration rights agreement, the holders of SpectraSite's
common stock that are party to the agreement may require SpectraSite to register
all or some of their shares under the Securities Act. The first two times each
holder that is a party to the agreement makes such request, SpectraSite is
obligated to register the shares set forth in such request. If a holder that is
party to the agreement makes more than two such requests, then the following
conditions must be met to trigger SpectraSite's registration obligation:

o SpectraSite must receive a request for registration from
holders of at least 5% of its outstanding stock covered by the
registration rights agreement; and

o the request must specify the number of shares to be disposed
of and the proposed plan of distribution therefor.

SpectraSite is only obligated to effect six such registrations except
to the extent necessary to ensure that each of the holders that are party to the
agreement may cause at least two such registrations during the term of the
agreement. SpectraSite has the right to include its shares in any registration
statement required by the registration rights agreement.

In addition to SpectraSite's registration obligations discussed above,
if SpectraSite registers any of its common stock under the Securities Act for
sale to the public for SpectraSite's account or for the account of others or
both, the

registration rights agreement requires that it uses commercially reasonable
efforts to include in the registration statement common stock held by
stockholders that are party to the agreement who wish to participate in the
offering. Registrations by SpectraSite on Form S-4, Form S-8 or an offering to
existing security holders of SpectraSite pursuant to rights distributed to
existing security holders or pursuant to a dividend reinvestment plan will not
trigger this registration obligation.

TRANSACTIONS WITH EXECUTIVE OFFICERS

In August 1999, we loaned David P. Tomick $325,000 in connection with
the exercise of stock options to acquire Old Common Stock. The loan bears
interest at the applicable federal rate under the Internal Revenue Code, 5.36%
per annum, and matures in August 2004.

In September 1999, we loaned Timothy G. Biltz $500,000 to purchase a
home as a relocation incentive. This loan is secured by any shares of common
stock issued to Mr. Biltz upon his exercise of options or otherwise acquired by
Mr. Biltz and bears interest at 5.82% per annum and matures in September 2004.

In January 2000, we loaned Stephen H. Clark $1,100,000 in connection
with the exercise of stock options to acquire 512,500 shares of Old Common
Stock. The loan bears interest at 5.80% per annum and matures in December 2004.

DESCRIPTION OF CAPITAL STOCK

The following is a summary of the material terms and provisions of
SpectraSite's capital stock. SpectraSite's third amended and restated
certificate of incorporation authorizes the issuance of 290,000,000 shares of
capital stock, divided into 250,000,000 shares of common stock, $0.01 par value
per share, and 40,000,000 shares of preferred stock, $0.01 par value per share.
As of June 30, 2003, we have 23,743,515 shares of common stock outstanding. We
have reserved an additional 67,933 shares of common stock for future
distribution in connection with our emergence from bankruptcy. We have also
reserved an additional 2,938,582 shares of common stock for issuance under our
stock option plan and 1,249,970 shares of common stock for issuance upon the
exercise of warrants. All of our outstanding shares of common stock, as well as
the shares of common stock issuable in connection with our emergence from
bankruptcy and upon exercise of outstanding stock options and warrants, are or
will be freely tradable without restriction or further registration under the
federal securities laws, except to the extent they are held by one of our
affiliates, as that term is defined in Rule 144 under the Securities Act.

COMMON STOCK

The common stock is entitled to one vote per share. The holders of
common stock have no preemptive rights, cumulative rights, subscription,
redemption, sinking fund or conversion rights and preferences. The holders of
common stock will be entitled to receive such dividends as the board of
directors may declare out of funds legally available for that purpose. Upon our
liquidation or dissolution, the holders of common stock will be entitled to
share ratably in our assets legally available for the distribution to
stockholders after payment of liabilities and subject to the prior rights of any
holders of preferred stock then outstanding. All outstanding shares of common
stock are validly issued, fully paid and nonassessable.

As of June 30, 2003, we have reserved 1,249,970 shares of common stock
for issuance upon the exercise of warrants issued in connection with our plan of
reorganization. Each warrant entitles the holder to purchase one share of common
stock at an exercise price of $32.00 per share, subject to anti-dilution
adjustment in the event of certain distributions and other corporate events. The
warrants expire on February 10, 2010.

PREFERRED STOCK

SpectraSite has 40,000,000 authorized, but unissued, shares of
preferred stock, $0.01 par value per share. Although the rights and designations
of the preferred stock are currently undefined, SpectraSite's board of directors
is authorized to establish the voting powers, if any, of the shares of such
series, and the preferences and relative participating, optional and other
special rights of each series of preferred stock, provided, however, the Board
shall not have the authority to issue any series of preferred stock if the
purpose of such issuance is to implement, or to facilitate the implementation
of, a "poison pill" or other similar shareholder rights plan or other plan whose
primary intent is to impede an acquisition of SpectraSite or an acquisition of
substantially all of SpectraSite's subsidiaries or assets, unless any such
issuance is approved by the affirmative vote of the holders of at least a
majority of the voting power of the shares of the then outstanding voting stock
of SpectraSite, voting together as a single class.

DELAWARE ANTI-TAKEOVER LAW

Section 203 of the Delaware General Corporation Law prohibits
SpectraSite from engaging in a "business combination" with an "interested
stockholder." This restriction applies for three years after the date of the
transaction in which the person became an interested stockholder, unless the
business combination is approved in a prescribed manner. A "business
combination" includes (1) mergers, (2) asset sales and (3) other transactions
resulting in a financial benefit to an interested stockholder. Generally, an
"interested stockholder" is a person who, together with affiliates and
associates, owns, or within three years did own, 15% or more of SpectraSite's'
voting stock. Section 203 could delay, defer or prevent a change in control of
SpectraSite. It might also reduce the price that investors might be willing to
pay in the future for shares of common stock.

LIMITATION OF LIABILITY AND INDEMNIFICATION MATTERS

The third amended and restated certificate of incorporation provides
that directors of SpectraSite will not be personally liable to SpectraSite or
its stockholders for monetary damages for breach of fiduciary duty as a
director, except for liability:

(1) for any breach of the director's duty of loyalty to SpectraSite or
its stockholders; (2) for acts or omissions not in good faith or which involve
intentional misconduct or a knowing violation of law; (3) under provision of
Delaware law relating to unlawful payment of dividends or unlawful stock
purchases or redemptions of stock; or (4) for any transaction from which the
director derives an improper personal benefit.

As a result of this provision, SpectraSite and its stockholders may be
unable to obtain monetary damages from a director for breach of his or her duty
of care.

The third amended and restated certificate of incorporation provides
for the indemnification of directors and officers of SpectraSite and any person
who is or was serving at the request of SpectraSite as a director, officer,
partner, trustee, employee or agent of another corporation or of a partnership,
joint venture, trust or other enterprise and any person who was or is serving at
the request of SpectraSite as a trustee or administrator under an employee
benefit plan to the fullest extent authorized by, and subject to, the conditions
set forth, in the Delaware General Corporation Law, against all expenses and
liabilities. The indemnification provided under the third amended and restated
certificate of incorporation includes the right to be paid by SpectraSite the
expenses in advance of any proceeding for which indemnification may be had in
advance of its final disposition.

TRANSFER AGENT AND REGISTRAR

The transfer agent and registrar for our common stock is EquiServe
Trust Company, N.A.

SHARES AVAILABLE FOR FUTURE SALE

As of June 30, 2003, we have 23,743,515 shares outstanding, all of
which were issued pursuant to our plan of reorganization. An additional 67,933
shares are subject to issuance pursuant to further distributions under our plan
of reorganization. In addition, as of June 30, 2003, we have 1,249,970 warrants
outstanding that are exercisable into our common stock on a one for one basis at
an exercise price of $32.00 per share. As of June 30, 2003, we have 2,731,357
options outstanding and 207,225 shares available for future awards under our
equity incentive plan. All of our outstanding shares of common stock, as well as
the shares of common stock issuable in connection with our emergence from
bankruptcy and upon exercise of outstanding stock options and warrants, are or
will be freely tradable without restriction or further registration under the
federal securities laws, except to the extent they are held by one of our
affiliates, as that term is defined in Rule 144 under the Securities Act.

In general, under Rule 144 as currently in effect, sales by an
"affiliate" of the company are limited within any three month period to a number
of shares that does not exceed the greater of (i) 1% of the then outstanding
shares of our common stock or (ii) the average weekly trading volume of our
common stock during the four calendar weeks preceding the date on which a notice
of sale is filed with the Securities and Exchange Commission. As currently
defined in Rule 144, an "affiliate" of an issuer is a person that directly, or
indirectly through one or more intermediaries, controls, or is controlled by, or
is under common control with, such issuer. Sales by affiliates under Rule 144
are also subject to certain other restrictions relating to manner of sale,
notice and the availability of current public information about the company.

The company, the selling stockholders and the current directors and
executive officers of the company have agreed with the underwriters, subject to
certain exceptions, not to dispose of or hedge any of their common stock or
securities convertible into or exchangeable for shares of common stock during
the period from the date of this prospectus continuing through the date 120 days
after the date of this prospectus, except with the prior written consent of the
representative of the underwriters.

Upon the completion of this offering the selling stockholders will hold
approximately 50.0% of the outstanding shares of our common stock, or
approximately 47.2% if the underwriters' over-allotment option is exercised in
full. After the expiration of the 120 day "lock-up" period to which all of the
selling stockholders and our directors and executive officers are subject, these
individuals and entities will be entitled to dispose of their remaining shares,
although the shares of common stock held by our affiliates will continue to be
subject to the volume and other restrictions of Rule 144 under the Securities
Act of 1933. In addition, Goldman, Sachs & Co. may, in its sole discretion and
at any time without notice, release all or a portion of the shares subject to
the lock-up. The shares that are released from the lock-up will be freely
tradable without restriction or further registration under the federal
securities laws, except to the extent they are held by one of our affiliates, as
that term is defined in Rule 144 under the Securities Act. See "Certain
Relationships and Related Transactions--Registration Rights Agreement".

Prior to the offering, there has been a limited public market for our
common stock and no prediction can be made as to the effect, if any, that this
offering will have on the market price of the common stock. Nevertheless, sales
of significant amounts of such shares in the public market or the availability
of large amounts of shares for sale could adversely affect the market price of
the common stock and could impair our future ability to raise capital through an
offering of its equity securities. See "Risk Factors--Our stock price may be
volatile, and you may be unable to resell your shares at or above the offering
price" and "Risk Factors--Substantial sales of our common stock could adversely
affect our stock price."

UNDERWRITING

We, the selling stockholders and the underwriters named below have
entered into an underwriting agreement with respect to the shares being offered.
Subject to certain conditions, the selling stockholders have agreed to sell to
the underwriters, and each underwriter has severally agreed to purchase the
number of shares indicated in the following table. Goldman, Sachs & Co. is the
representative of the underwriters.

UNDERWRITERS NUMBER OF SHARES
------------ ----------------

Goldman, Sachs & Co. ..................................
Bear, Stearns & Co. Inc. ..............................
Citigroup Global Markets, Inc..........................
Credit Suisse First Boston LLC.........................
Lehman Brothers Inc....................................
----------------
Total.........................................
================

The underwriters are committed to take and pay for all of the shares
being offered, if any are taken, other than the shares covered by the option
described below unless and until this option is exercised.

If the underwriters sell more shares than the total number set forth in
the table above, the underwriters have an option to buy up to an additional
675,000 shares from the selling stockholders to cover such sales. They may
exercise that option for 30 days. If any shares are purchased pursuant to this
option, the underwriters will severally purchase shares in approximately the
same proportion as set forth in the table above.

The following table shows the per share and total underwriting
discounts and commissions to be paid to the underwriters by the selling
stockholders. Such amounts are shown assuming both no exercise and full exercise
of the underwriters' option to purchase 675,000 additional shares.

PAID BY THE SELLING STOCKHOLDERS
---------------------------------------
NO EXERCISE FULL EXERCISE
----------- -------------
Per Share............................... $ $
Total................................... $ $

Shares sold by the underwriters to the public will initially be offered
at the public offering price set forth on the cover of this prospectus. Any
shares sold by the underwriters to securities dealers may be sold at a discount
of up to $ per share from the public offering price. Any such securities
dealers may resell any shares purchased from the underwriters to certain other
brokers or dealers at a discount of up to $ per share from the public
offering price. If all the shares are not sold at the public offering price, the
representatives may change the offering price and the other selling terms.

The public offering price has been negotiated among the company and the
representative. Among the factors to be considered in determining the public
offering price of the shares, in addition to prevailing market conditions, will
be the company's historical performance, estimates of the business potential and
earnings prospects of the company, an assessment of the company's management and
the consideration of the above factors in relation to market valuation of
companies in related businesses.

We intend to list the common stock on the New York Stock Exchange. In
order to meet one of the requirements for listing the common stock on the NYSE,
the underwriters have undertaken to sell lots of 100 or more shares to a minimum
of 2,000 beneficial holders.

In connection with the offering, the underwriters may purchase and sell
shares of common stock in the open market. These transactions may include short
sales, stabilizing transactions and purchases to cover positions created by
short sales. Shorts sales involve the sale by the underwriters of a greater
number of shares than they are required to purchase in the offering. "Covered"
short sales are sales made in an amount not greater than the underwriters'
option to purchase additional shares from the selling stockholders in the
offering. The underwriters may close out any covered short position by either
exercising their option to purchase additional shares or purchasing shares in
the open market. In determining the source of shares to close out the covered
short position, the underwriters will consider, among other things, the price of
shares available for purchase in the open market as compared to the price at
which they may purchase additional shares pursuant to the option granted to
them. "Naked" short sales are any sales in excess of such option. The
underwriters must close out any naked short position by purchasing shares in the
open market. A naked short position is more likely to be created if the
underwriters are concerned that there may be downward pressure on the price of
the common stock in the open market after pricing that could adversely affect
investors who purchase in the offering. Stabilizing transactions consist of
various bids for or purchases of common stock made by the underwriters in the
open market prior to the completion of the offering.

The underwriters may also impose a penalty bid. This occurs when a
particular underwriter repays to the underwriters a portion of the underwriting
discount received by it because the representative has repurchased shares sold
by or for the account of such underwriter in stabilizing or short covering
transactions.

Purchases to cover a short position and stabilizing transactions may
have the effect of preventing or retarding a decline in the market price of the
company's stock, and together with the imposition of the penalty bid, may
stabilize, maintain or otherwise affect the market price of the common stock. As
a result, the price of the common stock may be higher than the price that
otherwise might exist in the open market. If these activities are commenced,
they may be discontinued at any time. These transactions may be effected on the
New York Stock Exchange, in the over-the-counter market or otherwise.

Each underwriter has agreed that (i) it has not offered or sold, and
prior to the six months after the date of issue of the notes will not offer or
sell any securities to persons in the United Kingdom except to persons whose
ordinary activities involve them in acquiring, holding, managing or disposing of
investments (as principal or agent) for purposes of their businesses or
otherwise in circumstances which have not resulted and will not result in an
offer to the public in the United Kingdom within the meaning of the Public
Offers of Securities Regulations 1995; (ii) it has complied, and will comply
with, all applicable provisions of the Financial Services and Markets Act 2000
of Great Britain ("FSMA") with respect to anything done by it in relation to the
securities in, from or otherwise involving the United Kingdom, and (iii) it has
only communicated or caused to be communicated and will only communicate or
cause to be communicated any invitation or inducement to engage in investment
activity (within the meaning of section 21 of the FSMA) received by it in
connection with the issue or sale of any securities in circumstances in which
section 21(1) of the FSMA does not apply to the issuer.

The common stock may not be offered, sold, transferred or delivered in
or from The Netherlands, as part of their initial distribution or as part of any
re-offering, and neither this prospectus nor any other document in respect of
the offering may be distributed or circulated in The Netherlands, other than to
individuals or legal entities which include, but are not limited to, banks,
brokers, dealers, institutional investors and undertakings with a treasury
department, who or which trade or invest in securities in the conduct of a
business or profession.

The common stock has not been and will not be registered under the
Securities and Exchange Law of Japan. Each underwriter has represented and
agreed that it has not offered or sold, and it will not offer or sell, directly
or indirectly, any common stock in Japan or to, or for the account or benefit
of, any resident of Japan or to, or for the account or benefit, of any resident
for reoffering or resale, directly or indirectly, in Japan or to, or for the
account or benefit of, any resident of Japan except (i) pursuant to an exemption
from the registration requirements of, or otherwise in compliance with, the
Securities and Exchange Law of Japan and (ii) in compliance with the other
relevant laws and regulations of Japan.

No offer to sell the common stock has been or will be made in the Hong
Kong Special Administrative Region of the People's Republic of China ("Hong
Kong"), by means of any document, other than to persons whose ordinary business
is to buy or sell shares or debentures, whether as principal or agent, except in
circumstances which do not constitute an offer to the public within the meaning
of the Companies Ordinance (Cap.32) of Hong Kong, and unless

permitted to do so under the securities laws of Hong Kong, no person has issued
or had in its possession for the purposes of issue, and will not issue or have
in its possession for the purpose of issue, any advertisement, document or
invitation relating to the common stock in Hong Kong other than with respect to
the common stock intended to be disposed of to persons outside Hong Kong or only
to persons whose business involves the acquisition, disposal or holding of
securities whether as principal or agent.

This prospectus has not been registered as a prospectus with the
Monetary Authority of Singapore. Accordingly, this prospectus and any other
document or material in connection with the offer or sale, or invitation or
subscription or purchase, of the common stock may not be circulated or
distributed, nor may the common stock be offered or sold, or be made the subject
of an invitation for subscription or purchase, whether directly or indirectly,
to persons in Singapore other than under circumstances in which such offer, sale
or invitation does not constitute an offer or sale, or invitation for
subscription or purchase, of the common stock to the public in Singapore.

This prospectus has not been, and will not be, lodged with the
Australian Securities and Investments Commission ("ASIC") as a disclosure
document for the purpose of the Australian Corporations Act 2001 (Cwlth) (the
"Corporations Act"). The common stock may not be offered for sale (or
transferred, assigned or otherwise alienated) to investors in Australia for 12
months after their issue, except in circumstances where disclosure to investors
is not required under Chapter 6D of the Corporations Act or unless a compliant
disclosure document is prepared and lodged with ASIC.

The underwriters do not expect sales to discretionary accounts to
exceed five percent of the total number of shares offered.

The selling stockholders are responsible for underwriting discounts and
commissions. The company estimates that its share of the total expenses of the
offering will be approximately $1.0 million.

The company and the selling stockholders have agreed to indemnify the
several underwriters against certain liabilities, including liabilities under
the Securities Act of 1933.

In the ordinary course of their respective businesses, the underwriters
and certain of their respective affiliates have engaged, and may in the future
engage, in commercial banking and/or investment banking transactions with us and
our affiliates. They have received and will receive customary fees and
commissions for these transactions. An affiliate of Credit Suisse First Boston
LLC is an agent and lender under our credit-facility. Citigroup Global Markets,
Inc. and Lehman Brothers Inc. were joint book-running managers of, and Credit
Suisse First Boston LLC was an initial purchaser in, our May 2003 senior notes
offering.

LEGAL MATTERS

Paul, Weiss, Rifkind, Wharton & Garrison LLP, New York, New York, will
pass on the validity of the common stock offered by this prospectus for us.
Cahill Gordon & Reindel LLP will pass upon certain matters for the underwriters.

EXPERTS

The consolidated financial statements of SpectraSite, Inc. at December
31, 2002 and 2001, and for each of the three years in the period ended December
31, 2002, appearing in this prospectus and Registration Statement have been
audited by Ernst & Young LLP, independent auditors, as set forth in their report
thereon appearing elsewhere herein and are included in reliance upon such report
given on the authority of such firm as experts in accounting and auditing.

WHERE YOU CAN FIND MORE INFORMATION

We are subject to the informational requirements of the Securities
Exchange Act of 1934, as amended, and file reports, proxy statements and other
information with the Securities and Exchange Commission. We have also filed with
the Securities and Exchange Commission a registration statement on Form S-1 to
register our common stock. This prospectus, which forms part of the registration
statement, does not contain all of the information included in that registration
statement. For further information about us and our common stock offered in this
prospectus, you should refer to the registration statement and its exhibits. You
may read and copy the registration statement and any other document we file with
the Securities and Exchange Commission at the Securities and Exchange
Commission's Public Reference Room, 450 Fifth Street, N.W., Washington, D.C.
20549. Please call the Securities and Exchange Commission at 1-800-SEC-0330 for
further information on the operation of the Public Reference Room. In addition,
the Securities and Exchange Commission maintains a web site that contains
registration statements, reports, proxy statements and other information
regarding registrants, such as us, that file electronically with the Securities
and Exchange Commission. The address of the web site is http://www.sec.gov.

INDEX TO FINANCIAL STATEMENTS

I. SPECTRASITE, INC. ANNUAL FINANCIAL STATEMENTS
PAGE
----
Report of Independent Auditors......................................... F-2
Consolidated Balance Sheets as of December 31, 2001 and 2002........... F-3
Consolidated Statements of Operations for the years ended
December 31, 2000, 2001 and 2002.................................. F-4
Consolidated Statements of Convertible Preferred Stock and
Shareholders' Equity (Deficit) for the years ended
December 31, 2000, 2001 and 2002.................................. F-5
Consolidated Statements of Cash Flows for the years ended
December 31, 2000, 2001 and 2002.................................. F-6
Notes to Consolidated Financial Statements............................. F-8

II. SPECTRASITE, INC. INTERIM FINANCIAL STATEMENTS
PAGE
----
Condensed Consolidated Balance Sheets as of March 31, 2003
(unaudited; reorganized company) and December 31, 2002
(predecessor company)............................................. F-35
Unaudited Condensed Consolidated Statements of Operations for the
two months ended March 31, 2003 (reorganized company),
the month ended January 31, 2003 (predecessor company) and
the three months ended March 31, 2002 (predecessor company)....... F-36
Unaudited Condensed Consolidated Statements of Cash Flows for the
two months ended March 31, 2003 (reorganized company),
the month ended January 31, 2003 (predecessor company) and
the three months ended March 31, 2002 (predecessor company)....... F-37
Notes to the Unaudited Condensed Consolidated Financial Statements..... F-39

F-1

REPORT OF INDEPENDENT AUDITORS

Board of Directors
SpectraSite, Inc. and Subsidiaries

We have audited the accompanying consolidated balance sheets of
SpectraSite, Inc. (formerly known as SpectraSite Holdings, Inc.) and
subsidiaries as of December 31, 2001 and 2002 and the related consolidated
statements of operations, convertible preferred stock and shareholders' equity
(deficit) and cash flows for each of the three years in the period ended
December 31, 2002. These financial statements are the responsibility of the
Company's management. Our responsibility is to express an opinion on these
financial statements based on our audits.

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

In our opinion, the financial statements referred to above present
fairly, in all material respects, the consolidated financial position of
SpectraSite, Inc. and subsidiaries at December 31, 2001 and 2002 and the
consolidated results of their operations and their cash flows for each of the
three years in the period ended December 31, 2002 in conformity with accounting
principles generally accepted in the United States.

As discussed in Note 2 to the consolidated financial statements, the
Company emerged from Chapter 11 bankruptcy on February 10, 2003. Effective
February 1, 2003, the Company will change its basis of financial statement
presentation to reflect the adoption of fresh start accounting in accordance
with the American Institute of Certified Public Accountants' Statement of
Position 90-7, "Financial Reporting for Entities in Reorganization Under the
Bankruptcy Code".

As discussed in Note 3 to the consolidated financial statements, in
2002 the Company adopted Statement of Financial Accounting Standard No. 142,
GOODWILL AND OTHER INTANGIBLE ASSETS and changed its method of accounting for
goodwill.

/s/ ERNST & YOUNG LLP

February 11, 2003
Raleigh, North Carolina

F-2

SPECTRASITE, INC. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

AS OF DECEMBER 31,
2001 2002
------------ ------------
(DOLLARS IN THOUSANDS)
ASSETS

Current assets:
Cash and cash equivalents.................................................. $ 31,547 $ 80,961
Accounts receivable, net of allowance of $4,982 and $11,431, respectively.. 22,375 15,180
Costs and estimated earnings in excess of billings......................... 1,940 2,169
Inventories................................................................ 8,355 7,878
Prepaid expenses and other................................................. 11,505 16,696
Assets held for sale....................................................... 113,015 --
------------ ------------
Total current assets.................................................... 188,737 122,884
Property and equipment, net................................................... 2,443,046 2,292,945
Goodwill, net................................................................. 437,350 60,626
Other assets.................................................................. 134,292 102,001
------------ ------------
Total assets............................................................ $ 3,203,425 $ 2,578,456
============ ============

LIABILITIES AND SHAREHOLDERS' EQUITY (DEFICIT)
Current liabilities:
Accounts payable........................................................... $ 36,608 $ 13,029
Accrued and other expenses................................................. 69,067 66,280
Billings in excess of costs and estimated earnings......................... 2,763 703
Current portion of credit facility......................................... -- 2,244
Liabilities held for sale.................................................. 36,102 --
------------ ------------
Total current liabilities............................................... 144,540 82,256
Long-term portion of credit facility.......................................... 695,000 780,711
Senior notes.................................................................. 400,000 --
Senior convertible notes...................................................... 200,000 --
Senior discount notes......................................................... 1,020,332 --
Other long-term liabilities................................................... 24,208 27,330
------------ ------------
Total long-term liabilities............................................. 2,339,540 808,041
------------ ------------
Liabilities subject to compromise (Note 2).................................... -- 1,763,286
------------ ------------
Commitments and Contingencies
Shareholders' equity (deficit):
Common stock, $0.001 par value, 300,000,000 shares authorized, 153,424,509 153 154
and 154,013,917 issued and outstanding, respectively.......................
Additional paid-in-capital................................................. 1,622,089 1,624,939
Accumulated other comprehensive income (loss).............................. 21,984 (355)
Accumulated deficit........................................................ (924,881) (1,699,865)
------------ ------------
Total shareholders' equity (deficit).................................... 719,345 (75,127)
------------ ------------
Total liabilities and shareholders' equity (deficit).................... $ 3,203,425 $ 2,578,456
============ ============

See accompanying notes.

F-3

SPECTRASITE, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF OPERATIONS

YEAR ENDED YEAR ENDED YEAR ENDED
DECEMBER 31, DECEMBER 31, DECEMBER 31,
2000 2001 2002
------------ ------------ ------------
(IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)

Revenues:
Site leasing............................................. $ 116,476 $ 221,614 $ 282,525
Broadcast services....................................... 38,593 38,211 26,809
------------ ------------ ------------
Total revenues...................................... 155,069 259,825 309,334
------------ ------------ ------------
Operating expenses:
Cost of operations, excluding depreciation and
amortization expense:
Site leasing.......................................... 46,667 91,689 108,540
Broadcast services.................................... 26,245 29,538 21,158
Selling, general and administrative expenses............. 51,825 72,431 58,037
Depreciation and amortization expense.................... 78,103 165,267 189,936
Restructuring and non-recurring charges.................. -- 142,599 28,570
------------ ------------ ------------
Total operating expenses............................ 202,840 501,524 406,241
------------ ------------ ------------
Operating loss.............................................. (47,771) (241,699) (96,907)
------------ ------------ ------------
Other income (expense):
Interest income.......................................... 28,391 17,037 855
Interest expense......................................... (134,664) (212,174) (226,536)
Reorganization expense................................... -- -- (4,329)
Other income (expense)................................... (8,571) (223,236) (10,929)
------------ ------------ ------------
Total other income (expense)........................ (114,844) (418,373) (240,939)
------------ ------------ ------------
Loss from continuing operations before income taxes......... (162,615) (660,072) (337,846)
Income tax expense.......................................... 444 555 1,133
------------ ------------ ------------
Loss from continuing operations............................. (163,059) (660,627) (338,979)
Discontinued operations:
Income (loss) from operations of discontinued segment, 5,443 5,858 (12,268)
net of income tax expense.............................
Loss on disposal of discontinued segment................. -- -- (46,984)
------------ ------------ ------------
Loss before cumulative effect of change in accounting (157,616) (654,769) (398,231)
principle................................................
Cumulative effect of change in accounting for goodwill...... -- -- (376,753)
------------ ------------ ------------
Net loss.................................................... $ (157,616) $ (654,769) $ (774,984)
============ ============ ============
Basic and diluted earnings per share:
Loss from continuing operations.......................... $ (1.35) $ (4.40) $ (2.20)
Discontinued operations.................................. 0.04 0.04 (0.38)
Cumulative effect of change in accounting for goodwill... -- -- (2.45)
------------ ------------ ------------
Net loss................................................. $ (1.31) $ (4.36) $ (5.03)
============ ============ ============
Weighted average common shares outstanding:
Basic and diluted........................................ 120,731 150,223 153,924
============ ============ ============

See accompanying notes.

F-4

SPECTRASITE, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF
CONVERTIBLE PREFERRED STOCK AND SHAREHOLDERS' EQUITY (DEFICIT)
(DOLLARS IN THOUSANDS)

SHAREHOLDERS' EQUITY (DEFICIT)
------------------------------------------------------------------------------
CONVERTIBLE CONVERTIBLE CONVERTIBLE
PREFERRED PREFERRED PREFERRED COMMON STOCK ADDITIONAL
STOCK STOCK STOCK ------------------------ PAID-IN
SERIES A SERIES B SERIES C SHARES AMOUNT CAPITAL
----------- ----------- ----------- ------------- --------- ------------

Balance at December 31, 1999 $ 10,000 $ 28,000 $ 301,494 20,191,604 $ 20 $ 230,546
Net loss -- -- -- -- -- --
Foreign currency translation -- -- -- -- -- --
adjustment
Unrealized holding gains arising -- -- -- -- -- --
during period
Total comprehensive loss
Issuance of common stock, net of -- -- -- 53,973,255 54 906,584
stock issuance costs of
$37,150
Issuance of warrants -- -- -- -- -- 13,720
Non-cash compensation charges -- -- -- -- -- 2,572
Conversion of preferred stock to
common stock (10,000) (28,000) (301,494) 70,749,625 71 339,423
----------- ----------- ----------- ------------- --------- ------------
Balance at December 31, 2000 -- -- -- 144,914,484 145 1,492,845
Net loss -- -- -- -- -- --
Foreign currency translation -- -- -- -- -- --
adjustment
Unrealized holding gains arising -- -- -- -- -- --
during period
Total comprehensive loss
Issuance of common stock, net of -- -- -- 8,510,025 8 127,119
stock issuance costs of $296
Non-cash compensation charges -- -- -- -- -- 2,125
Balance at December 31, 2001 -- -- -- 153,424,509 153 1,622,089
----------- ----------- ----------- ------------- --------- ------------
Net loss -- -- -- -- -- --
Foreign currency translation -- -- -- -- -- --
adjustment
Unrealized holding losses -- -- -- -- -- --
arising during period
Total comprehensive loss
Issuance of common stock, net of -- -- -- 589,408 1 2,155
stock issuance costs of $6
Non-cash compensation charges -- -- -- -- -- 695
----------- ----------- ----------- ------------- --------- ------------
Balance at December 31, 2002 $ -- $ -- $ -- 154,013,917 $ 154 $1,624,939
=========== =========== =========== ============= ========= ============

SHAREHOLDERS' EQUITY (DEFICIT)
---------------------------------------------------------
ACCUMULATED
OTHER
COMPREHENSIVE COMPREHENSIVE ACCUMULATED
INCOME (LOSS) INCOME (LOSS) DEFICIT TOTAL
------------- ------------- ----------- -----------

Balance at December 31, 1999 $ 192 $ (112,496) $ 457,756
Net loss $(157,616) -- (157,616) (157,616)
Foreign currency translation (14,946) (14,946) -- (14,946)
adjustment
Unrealized holding gains arising 16,676 16,676 -- 16,676
during period -------------
Total comprehensive loss $(155,886)
=============
Issuance of common stock, net of -- -- 906,638
stock issuance costs of
$37,150
Issuance of warrants -- -- 13,720
Non-cash compensation charges 2,572
Conversion of preferred stock to -- -- --
common stock ------------- ----------- -----------
Balance at December 31, 2000 1,922 (270,112) 1,224,800
Net loss $(654,769) -- (654,769) (654,769)
Foreign currency translation 13,558 13,558 -- 13,558
adjustment
Unrealized holding gains arising 6,504 6,504 -- 6,504
during period -------------
Total comprehensive loss $(634,707)
=============
Issuance of common stock, net of -- -- 127,127
stock issuance costs of $296
Non-cash compensation charges -- -- 2,125
Balance at December 31, 2001 21,984 (924,881) 719,345
------------- ----------- -----------
Net loss $(774,984) -- (774,984) (774,984)
Foreign currency translation 1,173 1,173 -- 1,173
adjustment
Unrealized holding losses (23,512) (23,512) -- (23,512)
arising during period -------------
Total comprehensive loss $(797,323)
=============
Issuance of common stock, net of -- -- 2,156
stock issuance costs of $6
Non-cash compensation charges -- -- 695
------------- ----------- -----------
Balance at December 31, 2002 $ (355) $(1,699,865) $ (75,127)
============= =========== ===========

See accompanying notes.

F-5

SPECTRASITE, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

YEAR ENDED YEAR ENDED YEAR ENDED
DECEMBER 31, DECEMBER 31, DECEMBER 31,
2000 2001 2002
------------- ------------- -------------
(DOLLARS IN THOUSANDS)

OPERATING ACTIVITIES
Net loss..................................................... $ (157,616) $ (654,769) $ (774,984)
Adjustments to reconcile net loss to net cash provided by
(used in) operating activities:

Depreciation.............................................. 65,368 149,371 186,706
Amortization of goodwill and other intangibles............ 31,366 36,853 3,218
Amortization of debt issuance costs....................... 5,507 10,113 14,321
Amortization of senior discount notes..................... 92,018 112,089 109,371
Non-cash compensation charges............................. 2,572 2,125 695
Write-off of goodwill..................................... -- 44,476 376,753
Loss on disposal of assets................................ -- 53,379 83,683
Gain on sale of affiliate................................. -- -- (1,364)
Write-off of loan to and investments in affiliates........ -- 156,433 --
Equity in net loss of an affiliate........................ 8,748 62,402 59
Changes in operating assets and liabilities, net of
acquisitions:
Accounts receivable.................................... (57,738) 665 47,345
Costs and estimated earnings in excess of billings, net (13,608) 408 325
Inventories............................................ (3,759) (5,396) 241
Prepaid expenses and other............................. (8,179) (8,316) (8,370)
Accounts payable....................................... 27,721 21 (32,017)
Other liabilities...................................... 18,965 28,013 30,304
------------- ------------- -------------
Net cash provided by (used in) operating activities.. 11,365 (12,133) 36,286
------------- ------------- -------------
INVESTING ACTIVITIES
Purchases of property and equipment.......................... (658,283) (958,945) (71,248)
Acquisitions, net of cash acquired........................... (224,518) (7,600) --
Disposal of discontinued segment, net of cash sold........... -- -- (6,751)
Proceeds from the sale of assets............................. -- -- 1,283
Investment in affiliates..................................... (198,039) (6,626) --
Loans to affiliates.......................................... (4,850) (27,400) (750)
Proceeds from repayment of loan to affiliate................. -- 5,000 --
Proceeds from sale of investment in affiliate................ -- 4,000 7,500
Refunds of (deposits on) acquisitions........................ (23,000) 6,847 --
------------- ------------- -------------
Net cash used in investing activities................ (1,108,690) (984,724) (69,966)
------------- ------------- -------------
FINANCING ACTIVITIES
Proceeds from issuance of common stock....................... 790,397 4,617 483
Stock issuance costs......................................... (37,150) (296) (6)
Proceeds from issuance of long-term debt and credit facility. 895,900 495,000 90,000
Debt issuance costs.......................................... (35,526) (23,065) (2,648)
Repayment of debt............................................ (1,421) (505) (4,735)
------------- ------------- -------------
Net cash provided by financing activities............ 1,612,200 475,751 83,094
------------- ------------- -------------
Net increase (decrease) in cash and cash equivalents......... 514,875 (521,106) 49,414
Cash and cash equivalents at beginning of period............. 37,778 552,653 31,547
------------- ------------- -------------
Cash and cash equivalents at end of period................... $ 552,653 $ 31,547 $ 80,961
============= ============= =============

See accompanying notes.

F-6

YEAR ENDED YEAR ENDED YEAR ENDED
DECEMBER 31, DECEMBER 31, DECEMBER 31,
2000 2001 2002
------------- ------------- -------------
(DOLLARS IN THOUSANDS)

SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION:
Cash paid for interest....................................... $ 35,372 $ 99,908 $ 85,536
Cash paid for income taxes................................... 1,106 2,207 1,661
SUPPLEMENTAL DISCLOSURES OF NON-CASH INVESTING AND FINANCING
ACTIVITIES:
Common stock issued for acquisitions and property and
equipment................................................. $ 167,004 $ 122,806 $ 1,679
Capital lease obligations incurred for the purchase of
property and equipment.................................... -- 16,893 1,304

See accompanying notes.

F-7

SPECTRASITE, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

1. DESCRIPTION OF BUSINESS AND SIGNIFICANT ACCOUNTING POLICIES

SpectraSite, Inc. ("SpectraSite"), formerly known as SpectraSite Holdings,
Inc., 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.

The consolidated financial statements have been prepared assuming
SpectraSite, 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, Inc. has incurred recurring operating losses, and it
has working capital and shareholders' deficits as of December 31, 2002. On
November 15, 2002 (the "Petition Date"), SpectraSite filed a voluntary petition
for relief under chapter 11 of the Bankruptcy Code (the "Bankruptcy Code") in
the United States Bankruptcy Court for the Eastern District of North Carolina,
Raleigh Division (the "Bankruptcy Court"). On November 18, 2002, SpectraSite
filed a Proposed Plan of Reorganization and a Proposed Disclosure Statement with
the Bankruptcy Court. A plan confirmation hearing was held on January 28, 2003
and the Proposed Plan of Reorganization, as modified on that date, (the "Plan of
Reorganization") was confirmed by the Bankruptcy Court. All conditions precedent
to the effectiveness of the Plan of Reorganization were met by February 10, 2003
(the "Effective Date"), thereby allowing SpectraSite to emerge from bankruptcy.
From the Petition Date until the Effective Date, SpectraSite operated as a
debtor-in-possession under the Bankruptcy Code. The restructuring plan involves
SpectraSite, Inc. and not SpectraSite Communications, Inc. ("Communications") or
any of Communications' subsidiaries. The restructuring plan also did not
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.

The consolidated financial statements are presented on a going concern
basis and 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, Inc.
be unable to continue as a going concern. See Note 2 Plan of Reorganization for
a presentation of the unaudited pro forma balance sheet illustrating the effect
of the Company's Plan of Reorganization and the effect of implementing certain
fresh start accounting adjustments.

USE OF ESTIMATES

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

CASH AND CASH EQUIVALENTS

The Company considers all highly liquid investments with a maturity of
three months or less when purchased to be cash equivalents.

REVENUE RECOGNITION

F-8

SPECTRASITE, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

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's ability to
meet its financial obligations to us is in question, the Company records a
specific allowance against amounts due to reduce the net recognized receivable
from that customer 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.
Activity in the allowance for uncollectible accounts consisted of the following.

YEAR ENDED DECEMBER 31,
-----------------------------------
2000 2001 2002
-------- --------- ---------
(IN THOUSANDS)

Beginning allowance....................... $ 1,053 $ 1,674 $ 4,982
Charges to revenues....................... 1,310 6,111 12,100
Write-offs of uncollectible accounts...... (689) (2,803) (5,651)
-------- --------- ---------
Ending allowance.......................... $ 1,674 $ 4,982 $ 11,431
======== ========= =========

INVENTORIES

Inventories are stated at the lower of cost or market using the first-in,
first-out method and consist primarily of materials purchased for future
construction not associated with specific jobs.

INVESTMENTS IN AFFILIATES

An investment in an entity of which the Company owns more than 20% and up
to 50% and on which the Company has the ability to exercise significant
influence is accounted for using the equity method. Under the equity method, the
investment is stated at cost adjusted for the Company's equity in net income
(loss) of the entity since acquisition. The equity in net income (loss) of such
entity is recorded in "Other income (expense)" in the accompanying consolidated
statements of operations. An investment in an entity in which the Company owns
less than 20% and on which the Company does not have the ability to exercise
significant influence is accounted for using the cost method.
Other-than-temporary impairments of investments in affiliates are recognized if
the fair value of the investment is below its cost basis for an extended period.

AVAILABLE-FOR-SALE SECURITIES

Available-for-sale securities are classified as "Other assets" and are
stated at fair value, with the unrealized gains and losses reported in other
comprehensive income. Realized gains and losses and declines in value judged to
be other-than-temporary on available-for-sale securities are included in "Other
income (expense)." Unrealized holding gains (losses) related to these securities
were $6.5 million and $(23.5 million) for the years ended December 31, 2001 and
2002, respectively. The fair value of the Company's available-for-sale
securities was $24.8 million and $1.3 million at December 31, 2001 and 2002,
respectively.

F-9

SPECTRASITE, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

PROPERTY AND EQUIPMENT

Towers built, purchased or leased under long-term leasehold agreements 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 the towers. 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 expense as incurred. Approximately $16.9 million and
$1.2 million of interest was capitalized into the cost of property and equipment
for the years ended December 31, 2001 and 2002, respectively. 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.

GOODWILL

The Company has classified as goodwill the excess of purchase price over
the fair value of net assets acquired in business combinations. Through December
31, 2001, goodwill was amortized on a straight-line basis over fifteen years for
purchase business combinations consummated prior to June 30, 2001. For purchase
business combinations consummated subsequent to June 30, 2001, goodwill is not
amortized but is evaluated for impairment on an annual basis or as impairment
indicators are identified, in accordance with SFAS No. 142, GOODWILL AND OTHER
INTANGIBLE ASSETS. For each entity acquired, the Company is able to monitor cash
flows at the entity level, which is the lowest level for which there are
identifiable cash flows that are largely independent of the cash flows of the
other groups of assets. On an ongoing basis, the Company assesses the
recoverability of its goodwill by determining the ability of the specific entity
acquired to generate future cash flows sufficient to recover the unamortized
cost of the assets and related goodwill. Goodwill determined to be unrecoverable
based on future cash flows is written-off in the period in which such
determination is made.

DEBT ISSUANCE COSTS

The Company capitalized costs relating to the issuance of long-term debt,
senior notes, senior convertible notes and senior discount notes. The costs are
amortized using the straight-line method over the term of the related debt.

IMPAIRMENT OF LONG-LIVED ASSETS

Long-lived assets, such as property and equipment, goodwill and purchased
intangible assets, are evaluated for impairment whenever events or changes in
circumstances indicate the carrying value of an asset may not be recoverable. An
impairment loss is recognized when estimated undiscounted future cash flows
expected to result from the use of the asset plus net proceeds expected from
disposition of the asset (if any) are less than the carrying value of the asset.
When an impairment is identified, the carrying amount of the asset is reduced to
its estimated fair value. Effective January 1, 2002, potential impairment of
long-lived assets other than goodwill and purchased intangible assets with
indefinite useful lives is evaluated using the guidance provided by Statement of
Financial Accounting Standards No. 144, ACCOUNTING FOR THE IMPAIRMENT OR
DISPOSAL OF LONG-LIVED ASSETS.

ACCOUNTING FOR INCOME TAXES

The liability method is used in accounting for income taxes and deferred
tax assets and liabilities are determined based on differences between the
financial reporting and tax basis of assets and liabilities.

As part of the process of preparing our consolidated financial statements
the Company is required to estimate income taxes in each of the jurisdictions in
which it operates. This process involves estimating the actual current tax

F-10

SPECTRASITE, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

liability together with assessing temporary differences resulting from differing
treatment of items, for tax and accounting purposes. These differences result in
deferred tax assets and liabilities. The Company must then assess the likelihood
that its deferred tax assets will be recovered from future taxable income. To
the extent that the Company believes that recovery is not likely, it must
establish a valuation allowance. Significant management judgment is required in
determining the provision for income taxes, deferred tax assets and liabilities
and any valuation allowance recorded against net deferred tax assets. The
Company has recorded a valuation allowance of $464.7 million as of December 31,
2002, due to uncertainties related to utilization of deferred tax assets,
primarily consisting of net operating losses carryforwards, before they expire.

DISCONTINUED OPERATIONS

On December 31, 2002, the Company sold its network services division.
Network services revenues for the years ended December 31, 2000, 2001 and 2002
were $191.8 million, $213.1 million and $136.2 million, respectively. Network
services income (loss) before taxes for the years ended December 31, 2000, 2001
and 2002 were $7.2 million, $7.9 million and $(11.0) million, respectively. The
Company recorded a loss on disposal of the network services division of $47.0
million in 2002. The results of the network services division's 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.

Assets and liabilities held for sale consist of the following:

DECEMBER 31,
2001
-------------
(IN THOUSANDS)
Accounts receivable.......................................... $ 68,401
Costs and estimated earnings in excess of billings........... 18,464
Inventories.................................................. 6,036
Prepaid expenses and other................................... 264
Property and equipment, net.................................. 19,057
Other assets................................................. 793
-------------
Assets held for sale...................................... $ 113,015
=============
Accounts payable............................................. $ 17,977
Accrued and other expenses................................... 7,575
Billings in excess of costs and estimated earnings........... 7,737
Other long-term liabilities.................................. 2,813
-------------
Liabilities held for sale.................................. $ 36,102
=============

As permitted under Statement of Financial Accounting Standards No. 95,
STATEMENT OF CASH FLOWS, the statements of cash flows do not separately disclose
the cash flows related to discontinued operations.

FINANCIAL INSTRUMENTS

The carrying amount of cash and cash equivalents approximates fair value
for these instruments. The estimated fair values of the credit facility, senior
notes, senior convertible notes and senior discount notes are based on the
quoted market prices. The estimated fair values of the Company's financial
instruments, along with the carrying amounts of the related assets
(liabilities), are as follows:

F-11

SPECTRASITE, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

DECEMBER 31, 2001 DECEMBER 31, 2002
--------------------------- --------------------------
CARRYING CARRYING
AMOUNT FAIR VALUE AMOUNT FAIR VALUE
----------- ----------- ----------- -----------
(IN THOUSANDS)

Cash and cash equivalents............. $ 31,547 $ 31,547 $ 80,961 $ 80,961
Credit Facility....................... (695,000) (695,000) (782,955) (665,512)
Senior Notes.......................... (400,000) (200,000) (400,000) (147,750)
Senior Convertible Notes.............. (200,000) (83,250) (200,000) (44,000)
Senior Discount Notes................. (1,020,332) (351,416) (1,129,703) (392,807)

LOSS PER SHARE

Basic and diluted 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 and had potential common stock
equivalents related to its convertible preferred stock until all such preferred
stock converted into common stock in February 2000. These potential common stock
equivalents were not included in diluted loss per share for all periods because
the effect would have been antidilutive. Accordingly, basic and diluted net loss
per share are the same for all periods presented.

COSTS OF OPERATIONS

Costs of operations for site leasing consist of direct costs incurred to
provide the related services including ground lease cost, tower maintenance and
related real estate taxes. Costs of operations for site leasing does not include
depreciation and amortization expense on the related assets. Costs of operations
for broadcast services consist of direct costs incurred to provide the related
services excluding depreciation and amortization expense.

SIGNIFICANT CUSTOMERS

The Company's customer base consists of businesses operating in the
wireless telecommunications and broadcast industries, primarily in the United
States. The Company's exposure to credit risk consists primarily of unsecured
accounts receivable from these customers.

For the years ended December 31, 2000, 2001 and 2002, one wireless
customer, which is a significant stockholder of the Company, accounted for 48%,
30% and 28% of the Company's revenues, respectively. This customer also
accounted for 13% of accounts receivable at December 31, 2001. In addition,
another wireless customer, which is an affiliate of a significant stockholder of
the Company, accounted for 13% and 20% of the Company's revenues in 2001 and
2002, respectively. This customer also accounted for 12% and 21% of accounts
receivable at December 31, 2001 and 2002, respectively.

F-12

SPECTRASITE, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

OTHER INCOME (EXPENSE)

Other income (expense) consists of the following:

YEAR ENDED DECEMBER 31,
-----------------------------------------
2000 2001 2002
---------- ----------- ----------

Write-down of investments in affiliates............ $ -- $ (129,404) $ --
Expenses related to proposed tender offers......... -- -- (10,905)
Equity in net loss of affiliates................... (8,748) (62,402) (59)
Write-off of loans to affiliates................... -- (26,980) --
Other.............................................. 177 (4,450) 35
---------- ----------- ----------
$ (8,571) $ (223,236) $ (10,929)
========== =========== ==========

STOCK OPTIONS

The Company has elected under the provisions of Statement of Financial
Accounting Standards No. 123, ACCOUNTING FOR STOCK BASED COMPENSATION ("SFAS
123"), as amended by SFAS 148, to account for its employee stock options under
the intrinsic value method in accordance with Accounting Principle Board Opinion
No. 25, ACCOUNTING FOR STOCK ISSUED TO EMPLOYEES ("APB 25"). Companies that
account for stock based compensation arrangements for their employees under APB
25 are required by SFAS 123 to disclose the pro forma effect on net income
(loss) as if the fair value based method prescribed by SFAS 123 had been
applied. The Company plans to continue to account for stock based compensation
using the provisions of APB 25 and has adopted the disclosure requirements of
SFAS 123 and SFAS 148.

EMPLOYEE BENEFIT PLAN

The Company provides a 401(k) plan for the benefit of all its employees
meeting specified eligibility requirements. The Company's contributions to the
plan are discretionary and totaled approximately $0.9 million, $2.1 million and
$1.1 million for the years ended December 31, 2000, 2001 and 2002, respectively.

COMMITMENTS AND CONTINGENCIES

The Company is subject to various lawsuits and other legal proceedings,
including regulatory, judicial and administrative matters, all of which have
arisen in the ordinary course of business. Management accrues an estimate of
expense for any matters that are considered probable of occurring based on the
facts and circumstances. Management believes that the ultimate resolution of
these matters will not have a material adverse effect on the financial
condition, results of operations or cash flows of the Company.

RECLASSIFICATIONS

Certain reclassifications have been made to the 2000 and 2001 consolidated
financial statements to conform to the 2002 presentation. These
reclassifications had no effect on net loss or shareholders' equity as
previously reported.

2. PLAN OF REORGANIZATION

On November 15, 2002 (the "Petition Date"), SpectraSite filed a voluntary
petition for relief under chapter 11 of the Bankruptcy Code (the "Bankruptcy
Code") in the United States Bankruptcy Court for the Eastern District of North
Carolina, Raleigh Division (the "Bankruptcy Court"). On November 18, 2002,
SpectraSite filed a Proposed Plan of Reorganization and a Proposed Disclosure
Statement with the Bankruptcy Court. A plan confirmation hearing was held on
January 28, 2003 and the Proposed Plan of Reorganization, as modified on that
date (the "Plan"), was confirmed by

F-13

SPECTRASITE, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

the Bankruptcy Court. All conditions precedent to the effectiveness of the Plan
of Reorganization were met by February 10, 2003 (the "Effective Date"), thereby
allowing SpectraSite to emerge from bankruptcy.

The Plan provides that, among other things, (i) in exchange for their
notes, the holders of the 12 1/2% Senior Notes due 2010, the 6 3/4% Senior
Convertible Notes due 2010, the 10 3/4% Senior Notes due 2010, the 11 1/4%
Senior Discount Notes due 2009, the 12 7/8% Senior Discount Notes due 2010 and
the 12% Senior Discount Notes due 2008 will receive their pro rata share of
23.75 million shares of common stock, par value $0.01 per share ("New Common
Stock"); (ii) the holders of 166,158,298 shares of common stock, par value
$0.001 per share, outstanding as of the Effective Date (the "Old Common Stock")
will receive warrants immediately exercisable into 1.25 million shares of New
Common Stock at a price of $32.00 per share; and (iii) all other equity
interests at the Effective Date, including outstanding warrants and options,
will be cancelled.

The consolidated financial statements include adjustments and
reclassifications to reflect affected liabilities as "Liabilities Subject to
Compromise." These liabilities will be settled in accordance with the Plan. The
liabilities subject to compromise as of December 31, 2002 were as follows:

10 3/4% Senior Notes Due 2010................................. $ 200,000
12 1/2% Senior Notes Due 2010................................. 200,000
6 3/4% Senior Convertible Notes Due 2010...................... 200,000
12% Senior Discount Notes Due 2008, net of discount........... 208,479
11 1/4% Senior Discount Notes Due 2009, net of discount....... 502,644
12 7/8% Senior Discount Notes Due 2010, net of discount....... 418,580
Accrued interest.............................................. 33,583
Total liabilities subject to compromise....................... $ 1,763,286

SpectraSite incurred costs directly associated with the chapter 11
proceedings of $4.3 million in the year ended December 31, 2002. These costs are
included in reorganization expense in the statement of operations.

In accordance with AICPA Statement of Position 90-7 FINANCIAL REPORTING BY
ENTITIES IN REORGANIZATION UNDER THE BANKRUPTCY CODE ("SOP 90-7"), the Company
will adopt "fresh start accounting" as of February 1, 2003 and the Company's
emergence from chapter 11 will result in a new reporting entity. The financial
statements prepared as of December 31, 2002 do not give effect to any
adjustments to the carrying value of assets or amounts and classifications of
liabilities that will be necessary when adopting fresh start accounting. Upon
the adoption of fresh start accounting, all assets and liabilities will be
recorded at their estimated fair values and the Company's accumulated deficit
will be eliminated.

The following unaudited pro forma balance sheet illustrates the effect of
the Company's Plan and the effect of implementing certain fresh start accounting
adjustments as if the Plan had been effective on December 31, 2002. The
adjustments are limited to presenting (i) the Company's reorganized capital
structure; (ii) the effect of discharging the Senior Notes, Senior Discount
Notes and Senior Convertible Notes; (iii) the reduction in property and
equipment due to the net assets of the Company exceeding the reorganization
value; (iv) the elimination of rent receivables recognized on leases with fixed
rental increases; (v) the adoption of SFAS 143; (vi) the reduction of goodwill,
other assets and the credit facility to fair market value and (vii) the
elimination of the Company's accumulated deficit. The reorganization value used
in preparing the unaudited pro forma balance sheet was $690.4 million based on
the fair market value of the senior notes, senior discount notes and senior
convertible notes at the Effective Date, the date these instruments were
exchanged for New Common Stock and the value of warrants issued on that date
based on the Black-Scholes option pricing model.

F-14

SPECTRASITE, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

CONFIRMATION
ACTUAL ADJUSTMENTS REF PRO FORMA
------------- -------------- -------- -----------
(UNAUDITED) (UNAUDITED)
(IN THOUSANDS)
ASSETS

Current assets:
Cash and cash equivalents......................... $ 80,961 $ (16,802) (2) $ 64,159
Accounts receivable............................... 15,180 -- 15,180
Costs and estimated earnings in excess of billings 2,169 -- 2,169
Inventories....................................... 7,878 -- 7,878
Prepaid expenses and other........................ 16,696 -- 16,696
------------- -------------- -----------
Total current assets........................... 122,884 (16,802) 106,082
Property and equipment, net.......................... 2,292,945 (1,035,143) (3) 1,257,802
Goodwill, net........................................ 60,626 (60,626) (4) --
Other assets......................................... 102,001 122,182 (1),(4) 224,183
------------- -------------- -----------
Total assets................................... $ 2,578,456 $ (990,389) $1,588,067
============= ============== ===========

LIABILITIES AND SHAREHOLDERS' EQUITY (DEFICIT)
Current liabilities:
Accounts payable.................................. $ 13,029 $ $ 13,029
Accrued and other expenses........................ 66,280 38,456 (5) 104,736
Billings in excess of costs and estimated earnings 703 -- 703
Current portion of credit facility................ 2,244 -- 2,244
------------- -------------- -----------
Total current liabilities...................... 82,256 38,456 120,712
============= ============== ===========
Long-term portion of credit facility................. 780,711 (96,772) (4) 683,939
Other long-term liabilities.......................... 27,330 65,694 (5),(6) 93,024
------------- -------------- -----------
Total long-term liabilities.................... 808,041 (31,078) 776,963
============= ============== ===========
Liabilities subject to compromise.................... 1,763,286 (1,763,286) (1) --
------------- -------------- -----------
Shareholders' equity (deficit):
Common stock, $0.001 par value, 300,000,000
shares authorized 154,013,917 issued and
outstanding actual at December 31, 2002;
$0.01 par value, 250,000,000 shares
authorized 23,500,000 issued and
outstanding pro forma at December 31, 2002..... 154 84 (1) 238
Additional paid-in-capital and warrants........... 1,624,939 (934,785) (1) 690,154
Accumulated other comprehensive income............ (355) 355 (7) --
Accumulated deficit............................... (1,699,865) 1,699,865 (7)
------------- -------------- -----------
Total shareholders' equity (deficit)........... (75,127) 765,519 690,392
------------- -------------- -----------
Total liabilities and shareholders' equity $ 2,578,456 $ (990,389) $ 1,588,067
(deficit).................................. ============= ============== ===========

References:

(1) To reflect the discharge of the Senior Notes, Senior Discount Notes and
Senior Convertible Notes including the related debt issuance costs included
in other assets; the cancellation of Old Common Stock and warrants; and the
issuance of the New Common Stock and warrants.

F-15

SPECTRASITE, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

(2) To reflect estimated cash requirements for reorganization costs.

(3) To record property and equipment at fair value.

(4) To record goodwill, other assets and the credit facility at fair value.

(5) To record liabilities associated with unfavorable contracts at fair value.

(6) To record an asset retirement obligation upon adoption of SFAS 143.

(7) To reflect the elimination of the accumulated other comprehensive income
and accumulated deficit as of December 31, 2002.

3. RECENTLY ISSUED 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 that 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
estimated useful lives. The nonamortization provisions of SFAS 142 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, the Company recorded a charge 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 fair 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 and pro forma results of operations for the
years ended December 31, 2000, 2001 and 2002 had we applied the nonamortization
provisions of SFAS 142 in that period are as follows:

YEAR ENDED DECEMBER 31,
---------------------------------------
2000 2001 2002
(IN THOUSANDS)

Reported net loss.......................... $ (157,616) $ (654,769) $ (774,984)
Goodwill amortization...................... 30,883 35,515 --
----------- ----------- -----------
Adjusted net loss.......................... $ (126,733) $ (619,254) $ (774,984)
=========== =========== ===========

F-16

SPECTRASITE, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

YEAR ENDED DECEMBER 31,
---------------------------------------
2000 2001 2002
(IN THOUSANDS)

Basic and diluted loss per share:
Reported net loss.......................... $ (1.31) $ (4.36) $ (5.03)
Goodwill amortization...................... 0.26 0.24 --
----------- ----------- -----------
Adjusted net loss.......................... $ (1.05) $ (4.12) $ (5.03)
=========== =========== ===========

In June 2001, the FASB issued Statement of Financial Accounting Standards
No. 143, ACCOUNTING FOR ASSET RETIREMENT OBLIGATIONS ("SFAS 143") which is
effective for fiscal years beginning after June 15, 2002. SFAS 143 requires
legal obligations associated with the retirement of long-lived assets to be
recognized at their fair value at the time that the obligations are incurred.
Upon initial recognition of a liability, that cost should be capitalized as part
of the related long-lived asset and allocated to expense over the useful life of
the asset. The Company will adopt the new rules on asset retirement obligations
on January 1, 2003. Application of the new rules is expected to result in an
increase in net property, plant and equipment of $23.2 million, recognition of
an asset retirement obligation of $35.4 million, and a cumulative effect of
adoption that will reduce net income and stockholders' equity (deficit) by $12.2
million.

In April 2002, the FASB issued Statement of Financial Accounting Standards
No. 145, RESCISSION OF FASB STATEMENT NOS. 4, 44, AND 64, AMENDMENT OF FASB
STATEMENT NO. 13 AND TECHNICAL CORRECTIONS ("SFAS 145"). SFAS 145 amends or
rescinds a number of authoritative pronouncements, including Statement of
Financial Accounting Standards No. 4, REPORTING GAINS AND LOSSES FROM
EXTINGUISHMENT OF DEBT ("SFAS 4"). SFAS 4 required that gains and losses from
extinguishment of debt included in the determination of net income or loss be
aggregated and, if material, classified as an extraordinary item, net of the
related income tax effect. Upon adoption of SFAS 145, gains and losses from
extinguishment of debt will no longer be classified as extraordinary items, but
rather will generally be classified as part of other income (expense) on the
Company's consolidated statement of operations. The provisions of SFAS 145 are
effective for fiscal years beginning after May 15, 2002. The Company will adopt
the provisions of SFAS 145 on January 1, 2003. The Company does not expect the
impact of adopting this statement to have a material impact on its consolidated
financial position, results of operations or cash flows.

In July 2002, the FASB issued Statement of Financial Accounting Standards
No. 146, ACCOUNTING FOR COSTS ASSOCIATED WITH EXIT OR DISPOSAL ACTIVITIES ("SFAS
146"). The statement requires costs associated with exit or disposal activities
to be recognized when incurred rather than at the date of a commitment to an
exit or disposal plan. The requirements of SFAS 146 are effective for exit or
disposal activities initiated after January 1, 2003. The Company will adopt the
provisions of SFAS 145 on January 1, 2003. The Company does not expect the
impact of adopting this statement to have a material impact on its consolidated
financial position, results of operations or cash flows.

In December 2002, the FASB issued SFAS No. 148, ACCOUNTING FOR STOCK-BASED
COMPENSATION, TRANSITION AND DISCLOSURE ("SFAS 148"). SFAS 148 provides
alternative methods of transition for a voluntary change to the fair value based
method of accounting for stock-based employee compensation. SFAS 148 also
requires that disclosures of the pro forma effect of using the fair value method
of accounting for stock-based employee compensation be displayed more
prominently and in a tabular format. Additionally, SFAS 148 requires disclosure
of the pro forma effect in interim financial statements. The transition
disclosure requirements of SFAS 148 are effective for fiscal year 2002. The
interim and annual disclosure requirements are effective for the first quarter
of 2003. The Company does not expect SFAS 148 to have a material effect on its
financial condition, results of operations or cash flows.

F-17

SPECTRASITE, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

4. LONG-LIVED ASSETS

Property and equipment consist of the following:

DECEMBER 31,
-----------------------------------
2001 2002
-------------- --------------
(IN THOUSANDS)

Towers.................................................. $ 2,483,049 $ 2,548,712
Equipment............................................... 30,261 39,181
Land.................................................... 16,378 18,081
Buildings............................................... 32,792 32,219
Other................................................... 38,572 38,217
-------------- --------------
2,601,052 2,676,410
Less accumulated depreciation........................... (220,209) (401,467)
-------------- --------------
2,380,843 2,274,943
Construction in progress................................ 62,203 18,002
Property and equipment, net............................. $ 2,443,046 $ 2,292,945
============== ==============

Other assets consist of the following:

DECEMBER 31,
-----------------------------------
2001 2002
-------------- --------------
(IN THOUSANDS)
Debt issuance costs..................................... $ 77,865 $ 66,192
Other................................................... 56,427 35,809
-------------- --------------
$ 134,292 $ 102,001
============== ==============

5. DEBT

Debt not classified as subject to compromise consists of the following:

DECEMBER 31,
-----------------------------------
2001 2002
-------------- --------------
(IN THOUSANDS)

Credit facility......................................... $ 695,000 $ 782,955
10 3/4% Senior Notes Due 2010........................... 200,000 --
12 1/2% Senior Notes Due 2010........................... 200,000 --
6 3/4% Senior Convertible Notes Due 2010................ 200,000 --
12% Senior Discount Notes Due 2008, net of discount..... 188,222 --
11 1/4% Senior Discount Notes Due 2009, net of discount. 456,810 --
12 7/8% Senior Discount Notes Due 2010, net of discount. 375,300 --
Total debt.............................................. 2,315,332 782,955
Less current portion.................................... -- 2,244
Long-term debt.......................................... $ 2,315,332 $ 780,711
============== ==============

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

F-18

SPECTRASITE, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

amendment also provided for an overall loosening of certain of the credit
facility's financial covenants and an increase in the interest rates under the
credit facility by 50 basis points per annum until the completion of
SpectraSite's restructuring of its high yield indebtedness on February 10, 2003.
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 repaid $0.9 million of the multiple draw term loan and $1.1
million of the term loan on December 31, 2002. Communications has $783.0 million
outstanding under the credit facility at December 31, 2002. The remaining $300.0
million under the credit facility was undrawn. Under the terms of the credit
facility, the Company could borrow approximately $230 million of available funds
under the revolving credit facility as of December 31, 2002 while remaining in
compliance with the credit agreement's covenants. With the proceeds of the sale
of towers to Cingular discussed in Note 11, Communications repaid $31.4 million
of the multiple draw term loan and $42.1 million of the term loan on February
11, 2003 leaving a total of $709.5 million outstanding under the credit
facility. In addition, the overall loosening of covenants under the August 2002
amendment to the credit facility terminated when SpectraSite emerged from
chapter 11 on February 10, 2003. As a result, Communications could borrow
approximately $33 million of available funds under the revolving credit facility
as of February 11, 2003 while remaining in compliance with the credit
agreement's covenants.

At December 31, 2002, amounts due under the credit facility are as follows:

Maturities
(In thousands)

2003................................................... $ 2,244
2004................................................... 4,488
2005................................................... 89,052
2006................................................... 129,270
2007................................................... 557,901
Total.................................................. $ 782,955
==================

Prior to February 10, 2003, the revolving credit loans and the multiple
draw term loan bear interest, at Communications' 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
February 10, 2003, 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.

The weighted average interest rate on outstanding borrowings under the
credit facility as of December 31, 2002 was 5.94%. Prior to February 10, 2003,
the term loan bears interest, at Communications' 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 February 10, 2003, 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.

F-19

SPECTRASITE, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

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.

12 7/8% SENIOR DISCOUNT NOTES DUE 2010 (THE "12 7/8% DISCOUNT NOTES") AND 10
3/4% SENIOR NOTES DUE 2010 (THE "10 3/4% SENIOR NOTES")

On March 15, 2000, SpectraSite issued $559.8 million aggregate principal
amount at maturity of its 12 7/8% Discount Notes for gross proceeds of $300.0
million and $200.0 million aggregate principal amount of its 10 3/4% Senior
Notes. The 12 7/8% Discount Notes will not pay any interest until March 15,
2005, at which time semi-annual interest payments will commence and become due
on each March 15 and September 15 thereafter. Semi-annual interest payments for
the 10 3/4% Senior Notes are due on each March 15 and September 15. The Company
is required to comply with certain covenants under the terms of the 12 7/8%
Discount Notes and the 10 3/4% Senior Notes that restrict the Company's ability
to incur additional indebtedness, make certain payments and issue preferred
stock, among other things.

12 1/2% SENIOR NOTES DUE 2010 (THE "12 1/2% SENIOR NOTES")

On December 20, 2000, SpectraSite issued $200.0 million aggregate principal
amount at maturity of 12 1/2% Senior Notes for proceeds of $195.9 million, net
of original issue discount of $4.1 million. Semi-annual interest payments for
the 12 1/2% Senior Notes are due on each May 15 and November 15. The Company is
required to comply with certain covenants under the terms of the 12 1/2% Senior
Notes that restrict the Company's ability to incur additional indebtedness, make
certain payments, and issue preferred stock, among other things.

6 3/4% SENIOR CONVERTIBLE NOTES DUE 2010 (THE "6 3/4% CONVERTIBLE NOTES")

On November 20, 2000, SpectraSite issued $200.0 million aggregate principal
amount of 6 3/4% Convertible Notes. Semi-annual interest payments for these
notes are due on each May 15 and November 15. The 6 3/4% Convertible Notes may
be converted into common stock at any time on or before November 15, 2010 at a
conversion price of $21.5625 per share, subject to adjustment. The trading price
of the Company's common stock on the commitment date was $15.00 per share.

12% SENIOR DISCOUNT NOTES DUE 2008 (THE "12% DISCOUNT NOTES")

On June 26, 1998, the Company issued $225.2 million aggregate principal
amount at maturity of 12% Discount Notes for gross proceeds of $125.0 million.
The 12% Discount Notes will not pay any interest until July 15, 2003, at which
time semi-annual interest payments will commence and become due on each January
15 and July 15 thereafter. The Company is required to comply with certain
covenants under the terms of the 12% Discount Notes that restrict the Company's
ability to incur indebtedness, make certain payments and issue preferred stock,
among other things.

F-20

SPECTRASITE, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

11 1/4% SENIOR DISCOUNT NOTES DUE 2009 (THE "11 1/4% DISCOUNT NOTES")

On April 20, 1999, the Company issued $586.8 million aggregate principal
amount at maturity of 11 1/4% Discount Notes for gross proceeds of $340.0
million. The 11 1/4% Discount Notes will not pay any interest until April 15,
2004, at which time semi-annual interest payments will commence and become due
on each April 15 and October 15 thereafter. The Company is required to comply
with certain covenants under the terms of the 11 1/4% Discount Notes that
restrict the Company's ability to incur additional indebtedness, make certain
payments and issue preferred stock, among other things.

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. On
November 15, 2002, SpectraSite did not pay $12.5 million of interest due on its
12 1/2% senior notes and $6.75 million due on its 6 3/4% senior convertible
notes. On December 14, 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 2. As a result, $400 million principal amount of Senior Notes,
$1.1 billion accreted value of Senior Discount Notes, $200 million of Senior
Convertible Notes and accrued interest of $33.6 million have been classified as
liabilities subject to compromise in the balance sheet as of December 31, 2002.

In addition, we had standby letters of credit of $6.3 million and
performance bonds of $14.6 million outstanding at December 31, 2002, most of
which expire within one year.

6. CONVERTIBLE VOTING PREFERRED STOCK AND SHAREHOLDERS' EQUITY

CONVERTIBLE VOTING PREFERRED STOCK

At December 31, 1998, SpectraSite had mandatorily redeemable convertible
preferred stock consisting of Series A and Series B cumulative redeemable
preferred stock, each with a $0.001 par value, 10.5 million shares authorized in
the aggregate and 3.5 million and 7.0 million shares issued and outstanding,
respectively. In connection with closing the Nextel tower acquisition in April
1999, provisions for dividends and redemption were eliminated with respect to
the Series A and Series B preferred stock. Previously accrued dividends have
been eliminated, and the outstanding balances have been reclassified as
convertible preferred stock in shareholders' equity in the balance sheet as of
December 31, 1999. In connection with closing the Nextel tower acquisition,
SpectraSite sold 46.3 million shares of Series C preferred stock at a price of
$5.00 per share. In addition, Nextel received 14.0 million shares of Series C
preferred stock. At December 31, 1999, SpectraSite had 60.3 million of $0.001
par value Series C shares authorized, issued and outstanding. Each share of
Series A, B and C preferred stock was convertible into one share of common stock
and entitled the holder to vote on an as-converted basis with holders of common
stock. Contemporaneously with the closing of an underwritten public offering of
common stock, the outstanding shares of Series A, B and C preferred stock
automatically converted to common stock on February 4, 2000.

On November 16, 2000, SpectraSite's shareholders authorized the issuance of
40.0 million shares of preferred stock for such times, for such purposes and for
such consideration as the Board of Directors may determine. No preferred stock
had been issued at December 31, 2002.

COMMON STOCK AND WARRANTS

On February 4, 2000, SpectraSite completed an underwritten public offering
of 25.6 million shares of common stock for net proceeds of approximately $411.3
million. As a result of the offering, all outstanding shares of Series A, B and
C preferred stock automatically converted to common stock on a share-for-share
basis.

F-21

SPECTRASITE, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

On July 28, 2000, SpectraSite completed an underwritten public offering of
11.0 million shares of common stock for net proceeds of approximately $220.2
million. On August 2, 2000, the underwriters purchased an additional 1.65
million shares of common stock pursuant to the exercise of their overallotment
option for net proceeds of $33.2 million.

On November 20, 2000, SpectraSite completed a private placement of 4.0
million shares of common stock for proceeds of $75.0 million. In addition, the
purchasing shareholders received warrants to purchase an additional 1.5 million
shares of common stock. The warrants were immediately exercisable; the exercise
price for 0.6 million shares was $21.56 per share, the exercise price for 0.45
million shares was $23.86 per share and the exercise price for the remaining
0.45 million shares was $28.00 per share. All outstanding warrants were
cancelled without consideration upon emergence from chapter 11 on February 10,
2003.

STOCK OPTIONS

During 1997, the Company adopted a stock option plan that provides for the
purchase of common stock by key employees, directors, advisors and consultants
of the Company. The maximum number of shares, which may be issued under the
plan, as amended, may not exceed 20.0 million shares. Stock options are granted
under various stock option agreements. Each stock option agreement contains
specific terms.

The options without a performance acceleration feature, which were granted
under the terms of the incentive stock option agreement, and options granted
under the terms of the non-qualified stock option agreement vest and become
exercisable ratably over a four or five-year period, commencing one year after
date of grant. The options with a performance acceleration feature, which were
granted under the terms of the incentive stock option agreement, and the
non-qualified stock option agreement vest and become exercisable upon the
seventh anniversary of the grant date. Vesting, however, can be accelerated upon
the achievement of certain milestones defined in each agreement.

In accordance with SFAS 123, the fair value of each option grant was
determined using the Black-Scholes option pricing model with the following
weighted average assumptions for the years ended December 31, 2000, 2001 and
2002: dividend yield of 0.0%; volatility of .70; risk free interest rate of
5.0%; and expected option lives of 7 years. Had compensation cost for the
Company's stock options been determined based on the fair value at the date of
grant consistent with the provisions of SFAS 123, the Company's net loss and net
loss per share would have been as follows.

YEAR ENDED DECEMBER 31,
----------------------------------------------
2000 2001 2002
------------ ------------ ------------
(IN THOUSANDS)

Reported net loss........................................... $ (157,616) $ (654,769) $ (774,984)
Non-cash compensation charges included in net loss.......... 2,572 2,125 695
Stock-based employee compensation cost that would have been
included in net loss under the fair value method......... (14,119) (19,412) (11,113)
------------ ------------ ------------
Adjusted net loss........................................... $ (169,163) $ (672,056) $ (785,402)
============ ============ ============
Basic and diluted loss per share:
Reported net loss........................................... $ (1.31) $ (4.36) $ (5.03)
Non-cash compensation charges included in net loss.......... 0.02 0.02 --
Stock-based employee compensation cost that would have been
included in net loss under the fair value method......... (0.11) (0.13) (0.07)
------------ ------------ ------------
Adjusted net loss........................................... $ (1.40) $ (4.47) $ (5.10)
============ ============ ============

Option activity under the Company's plans is summarized below:

F-22

SPECTRASITE, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

WEIGHTED
AVERAGE
EXERCISE PRICE
SHARES PER SHARE
-------------- --------------
Outstanding at December 31, 1999............. 5,723,791 $ 6.02
Granted...................................... 7,962,616 12.56
Exercised.................................... (2,182,968) 5.74
Canceled..................................... (791,227) 10.35
Options assumed in Apex acquisition.......... 191,359 3.58
-------------- --------------
Outstanding at December 31, 2000............. 10,903,571 10.48
Granted...................................... 4,011,485 4.86
Exercised.................................... (379,927) 9.85
Canceled..................................... (1,411,894) 12.61
-------------- --------------
Outstanding at December 31, 2001............. 13,123,235 8.56
Granted...................................... 553,680 0.35
Exercised.................................... -- --
Canceled..................................... (4,035,801) 9.37
-------------- --------------
Outstanding at December 31, 2002............. 9,641,114 $ 7.74
============== ==============

There were 1.7 million, 4.0 million, and 6.1 million options exercisable
under the stock option plan at December 31, 2000, 2001 and 2002, respectively.

OPTIONS OUTSTANDING OPTIONS EXERCISABLE
------------------------------------------ ------------------------
EXERCISE PRICES WEIGHTED WEIGHTED WEIGHTED
--------------- AVERAGE AVERAGE NUMBER AVERAGE
NUMBER REMAINING EXERCISE EXERCISABLE EXERCISE
OUTSTANDING CONTRACTUAL PRICE AS OF PRICE
AS OF 12/31/02 LIFE PER SHARE 12/31/02 PER SHARE
-------------- ----------- ---------- ----------- ----------

$ 0.17 -- 4.00........................ 2,885,881 6.86 $ 2.51 1,573,802 $ 2.16
$ 4.10 -- 7.37........................ 2,168,385 6.42 5.07 1,558,938 4.96
$ 7.40 -- 11.51........................ 2,339,942 7.10 10.33 1,657,990 10.38
$ 11.81 -- 22.22......................... 2,246,906 7.61 14.35 1,344,147 14.37
-------------- -----------
$ 0.42 -- 22.22........................ 9,641,114 6.99 7.74 6,134,877 7.77
============== ===========

The weighted average remaining contractual life of the stock options
outstanding was 8.97 years, 8.41 years and 6.99 years at December 31, 2000, 2001
and 2002, respectively. All outstanding options were cancelled without
consideration upon emergence from chapter 11 bankruptcy on February 10, 2003,
and the Company adopted the 2003 Equity Incentive Plan to grant equity based
incentives in New Common Stock to employees and directors. The Company plans to
issue approximately 2.7 million options to purchase New Common Stock under this
plan in March 2003.

EMPLOYEE STOCK PURCHASE PLAN

In August 1999, SpectraSite adopted the SpectraSite, Inc. Employee Stock
Purchase Plan. The Board of Directors reserved and authorized one million shares
of common stock for issuance under the plan. Eligible employees may purchase a
number of shares of common stock equal to the total dollar amount contributed by
the employee to a payroll deduction account during each six-month offering
period divided by the purchase price per share. The price of the shares offered
to employees under the plan will be 85% of the lesser of the fair market value
at the beginning or end of each six-month offering period. SpectraSite initiated
the first offering period on September 1, 2000 and issued 0.3 million shares
under the plan in 2001 and 0.4 million shares under the plan in 2002. The
Employee Stock Purchase Plan was terminated upon the Company's emergence from
chapter 11 bankruptcy on February 10, 2003.

F-23

SPECTRASITE, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

STOCK RESERVED FOR FUTURE ISSUANCE

The Company has reserved shares of its authorized shares of Old Common
Stock for future issuance as follows:

AS OF
DECEMBER 31,
2002
------------
Reserved for issuance in SBC transaction................... 15,198,049
Outstanding stock options.................................. 9,641,114
Outstanding senior convertible notes....................... 9,275,362
Possible future issuance under stock option plans.......... 7,345,985
Outstanding warrants....................................... 1,500,000
Employee stock purchase plan............................... 293,567
------------
Total................................................... 43,254,077
============

7. LEASES

AS LESSEE

The Company leases communications towers, land ("ground leases"), office
space and equipment under noncancelable operating and capital leases. Ground
leases are generally for terms of five years and are renewable at the option of
the Company. Rent expense was approximately $33.0 million, $65.1 million and
$75.5 million for the years ended December 31, 2000, 2001 and 2002 respectively.
Lease payments for the Company's tower capital lease assets are made upon
inception of the lease, and, accordingly, no capital lease obligation exists for
those assets as of December 31, 2002. Obligations related to other capital
leases total $12.3 million and are included in accrued and other expenses and
other long-term liabilities in the accompanying balance sheets. As of December
31, 2002, the future minimum lease payments for these leases are as follows:

CAPITAL OPERATING
LEASES LEASES
------------- --------------
(IN THOUSANDS) (IN THOUSANDS)

2003.................................................................. $ 2,001 $ 66,320
2004.................................................................. 1,881 62,753
2005.................................................................. 1,571 46,427
2006.................................................................. 1,568 31,372
2007.................................................................. 1,615 19,443
Thereafter............................................................ 10,600 92,007
------------- --------------
Total.............................................................. 19,236 $ 318,322
============= ==============
Less amount representing imputed interest............................. (6,937)
-------------
Present value of net minimum lease payments under capital leases...... $ 12,299
=============

Assets recorded under capital leases, which are included in property and
equipment in the accompanying balance sheets, consist of:

F-24

SPECTRASITE, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

2001 2002
------------ ------------
(IN THOUSANDS)
Towers.......................................... $ 1,001,161 $ 1,024,934
Other........................................... 12,888 13,674
------------ ------------
1,014,049 1,038,608
Less accumulated depreciation................... (51,226) (121,193)
------------ ------------
$ 962,823 $ 917,415
============ ============

AS LESSOR

The Company currently leases antenna space on multi-tenant towers to a
variety of wireless service providers and broadcasters under non-cancelable
operating leases. The tenant leases are generally for initial terms of five to
ten years and include options for renewal. The approximate future minimum rental
receipts under operating leases that have initial or remaining non-cancelable
terms in excess of one year are as follows:

AS OF
DECEMBER 31,
2002
---------------
(IN THOUSANDS)
2003............................................. $ 283,309
2004............................................. 274,125
2005............................................. 232,453
2006............................................. 182,701
2007............................................. 137,165
Thereafter....................................... 478,098
---------------
Total......................................... $ 1,587,851
===============

Approximately 53% of these future minimum rental receipts are due from two
significant stockholders and their affiliates.

8. INCOME TAXES

The provision for income taxes is comprised of the following:

YEAR ENDED DECEMBER 31,
-------------------------------
2000 2001 2002
------- ------- --------
(IN THOUSANDS)

Current:
State............................................. $ 444 $ 555 $ 1,133
Federal........................................... -- -- --
------- ------- --------
Total provision for income taxes............... $ 444 $ 555 $ 1,133
======= ======= ========

The reconciliation of income taxes computed at the U.S. federal statutory
rate to income tax expense is as follows:

F-25

SPECTRASITE, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

YEAR ENDED DECEMBER 31,
------------------------------------------
2000 2001 2002
------- ------- -------

Federal income tax benefit at statutory rate................ (35.0)% (35.0)% (35.0)%
Non-deductible reorganization expenses...................... -- -- 0.4
Non-deductible goodwill amortization........................ 3.4 2.1 --
Non-deductible interest expense............................. 0.1 0.1 --
State taxes................................................. 0.3 0.1 0.3
Non-cash compensation charges............................... 0.6 0.1 0.1
Change in valuation allowance............................... 30.9 32.7 34.5
------- ------- -------
Effective income tax rate................................... 0.3% 0.1% 0.3%
======= ======= =======

The components of net deferred taxes are as follows:

AS OF DECEMBER 31,
----------------------------------------------
2000 2001 2002
---------- ---------- ----------
(IN THOUSANDS)

Deferred tax assets:
Tax loss carryforwards...................................... $ 39,326 $ 188,031 $ 205,276
Accreted interest on senior discount notes.................. 56,077 92,486 162,959
Capital loss carryforwards.................................. -- 71,890 75,302
Accrued liabilities......................................... 1,920 179 23,856
Goodwill.................................................... -- -- 10,065
Bad debt reserves........................................... 1,416 3,417 4,886
---------- ---------- ----------
Total deferred tax assets................................... 98,739 356,003 482,344
---------- ---------- ----------
Deferred tax liabilities:
Tax deferred revenue........................................ -- (5,570) (4,225)
Depreciation................................................ -- (13,068) (13,435)
---------- ---------- ----------
Total deferred tax liabilities.............................. -- (18,638) (17,660)
---------- ---------- ----------
Net deferred tax assets before valuation allowance..... 98,739 337,365 464,684
Valuation allowance......................................... (98,739) (337,365) (464,684)
---------- ---------- ----------
Net deferred tax assets................................ $ -- $ -- $ --
========== ========== ==========

The Company has a federal net operating loss carryforward of approximately
$521 million that begins to expire in 2012. Also, the Company has state tax loss
carryforwards of approximately $515 million that expire beginning in 2003. The
Internal Revenue Code places limitations upon the future availability of net
operating losses based upon the changes in the equity in the Company. If these
changes occur, the ability for the Company to offset future income with existing
net operating losses may be limited. In addition, the Company anticipates that
its emergence from bankruptcy will reduce the net operating loss carryforwards
by approximately $159 million. Based on the Company's history of losses to date,
management has provided a valuation allowance to fully offset the Company's
deferred tax assets.

The Company receives an income tax deduction related to stock options
calculated as the difference between the fair market value of the stock issued
at the time of exercise and the option price, tax effected. The amount of these
benefits generated during 2001 was approximately $0.7 million. There was no
benefit generated in 2002. The Company has provided a 100% valuation reserve
against this asset as of December 31, 2002. The benefits resulting from these
deductions will be credited directly to shareholders' equity if and when
realized.

9. OTHER RELATED PARTY TRANSACTIONS

Affiliates of a financial institution that owns 7% of the Company's common
stock, have provided, and may continue to provide, investment banking services
to the Company. One affiliate of the financial institution is acting as agent
and

F-26

SPECTRASITE, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

lender under the Company's credit facility and receives customary fees for the
performance of these activities. In addition, the affiliate was an initial
purchaser of the 12% Discount Notes, the 11 1/4% Discount Notes, the 10 3/4%
Senior Notes, the 12 7/8% Discount Notes and the 12 1/2% Senior Notes and was an
underwriter of the Company's public offerings of common stock in February and
July 2000. The Company has $783.0 million outstanding under the credit facility
at December 31, 2002.

Certain investors participating in an investment group are also affiliates
of the financial institution discussed above. In November 2000, this investment
group purchased 4.0 million shares of the Company's common stock in a private
placement at a purchase price of $18.75 per share and received warrants to
purchase 1.5 million shares of common stock at exercise prices ranging from
$21.56 per share to $28.00 per share.

The Company has loans to officers totaling $1.9 million at December 31,
2001 and 2002. Of these amounts, $0.5 million was loaned to an officer to
purchase a home as a relocation incentive. The remaining loans were made to
officers in connection with the exercise of stock options. These loans have been
recorded as a reduction of shareholders' equity. The loans bear interest at the
applicable federal rate under the Internal Revenue Code ranging from 5.36% to
5.82% and have maturities ranging from August 2004 to December 2004. The Company
had interest income of $0.1 million from amounts outstanding under the loans in
2000, 2001 and 2002.

10. INVESTMENTS IN AFFILIATES

On April 7, 2000, the Company acquired Ample Design, Ltd. for approximately
$20.2 million. Ample Design provides wireless network development services in
the United Kingdom. On June 8, 2000, the Company completed a joint venture with
Lattice Group, the former arm of BG Group plc, which runs Britain's natural gas
network. The Company and Lattice Group each owned 50% of the joint venture.
Lattice Group transferred existing operational communications towers and
industrial land suitable for construction of new towers into the joint venture,
and the Company provided intellectual property and wireless network development
skills. The Company contributed $164.1 million in cash to be used for future
developments and possible acquisitions. The Company also contributed Ample
Design to the joint venture. In May 2001, the Company loaned the joint venture
$25.0 million to fund acquisitions. In October 2001, the Company sold its
ownership interest in the joint venture to Lattice Group for $4.0 million and
agreed to accept $5.0 million as payment in full for the loan. As a result, the
Company recorded a loss on the investment in the joint venture of $121.9 million
and a loss in the loan to the joint venture of $20.0 million in other expense in
2001. In addition, the Company recorded $7.7 million and $61.1 million in other
expense related to its equity in the net loss of the joint venture in 2000 and
2001, respectively. As of December 31, 2002, the Company had no remaining
investment in the joint venture and no remaining outstanding loan balance.

The Company had a revolving loan arrangement with an affiliate under which
the affiliate may borrow up to $14.4 million. The loan accrues interest at 12%
and is collateralized by property, equipment, investments, contracts and other
assets of the affiliate. The affiliate owed $12.0 million, including accrued
interest, to the Company under the loan at December 31, 2001. The Company had
interest income of $0.6 million and $1.2 million from amounts outstanding under
the loan in 2000 and 2001, respectively. The affiliate primarily provides
wireless communications access to facilities owned by the New York Port
Authority. The affiliate's business plan was negatively impacted by the attack
on the World Trade Center in September 2001. As a result, the Company recorded a
$7.0 million charge in other income (expense) to reduce the book value of the
loan to its estimated net realizable value in the year ended December 31, 2001.
In July 2002, the Company sold all its interests in the affiliate and recorded a
gain of $1.4 million. As of December 31, 2002, the Company had no remaining
investment in the affiliate and no remaining outstanding loan balance or
commitment.

11. ACQUISITION ACTIVITY

GENERAL -- Acquisition activity, asset acquisitions and business
combinations were accounted for using the purchase method of accounting. For
business combinations, the purchase prices have been allocated to the net assets
acquired, principally tangible and intangible assets, and the liabilities
assumed based on their estimated fair values at the

F-27

SPECTRASITE, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

date of acquisition. The excess of the purchase price over the estimated fair
value of the net assets acquired has been recorded as goodwill and other
intangible assets and, prior to the adoption of SFAS 142 as discussed in Note 2,
was being amortized on a straight-line basis over 15 years. The operating
results of these acquisitions have been included in the Company's consolidated
results of operations from the date of acquisition. For asset acquisitions, the
cost was assigned to the assets acquired.

2002 ACQUISITIONS -- 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 was 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)
decreased from $22.74 down to a floor of $12.96. The adjustment payment would be
accelerated if there were a change of control of SpectraSite or upon the
occurrence of certain specified liquidity events. In any case, the adjustment
payment was 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 was 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. The average
term of the sublease for all sites at the inception of the agreement was
approximately 27 years, assuming renewals or extensions of the underlying ground
leases for the sites. SBC is an anchor tenant on all of the towers and pays a
monthly fee per tower of $1,544, 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.

Subject to the conditions described in the sublease, SBC also has the right
to substitute other available space on the tower for the reserved space, and a
right of first refusal as to available space that the Company intends to
sublease to a third party. For the first 300 times SBC exercises its right of
first refusal, SBC is required to pay the Company rent for the applicable space
equal to the lesser of the rent that would have been charged to the proposed
third-party and a rent that is proportional to the monthly fee under the
sublease. After the first 300 times that SBC exercises its right of first
refusal, SBC is required to pay the Company rent for the applicable space equal
to the rent that would have been charged to the third-party.

The Company will have the option to purchase the sites subject to the
sublease upon the expiration of the sublease as to those sites. The purchase
price for each site will be a fixed amount stated in the sublease for that site
plus the fair market value of certain alterations made to the related tower by
SBC. The aggregate purchase option price for the towers subleased to date was
approximately $219.3 million as of December 31, 2002 and will accrete at a rate
of 10% per year to the applicable expiration of the sublease of a site. In the
event that the Company purchases such sites, SBC shall have the right to
continue to lease the reserved space for successive one year terms at a rent
equal to the lesser of the agreed upon market rate and the then current monthly
fee, which monthly fee shall be subject to an annual increase based on changes
in the consumer price index.

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 is committed to lease or sublease by 300 towers, from 3,900 in the
original agreement to 3,600 towers in the agreement as amended. 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. As consideration
for entering into the amendment, the Company paid SBC a fee of $35.0 million
that was expensed as part of the related restructuring charge. On November 14,
2002, the Company completed a further amendment to the SBC acquisition
agreements. This amendment further reduced the maximum number of towers that the
Company is committed to lease or sublease by 294 towers, from 3,600 in the
amended agreement to 3,306 towers in the agreement as further amended. In
addition, on February 10, 2003, the Company sold 545 SBC towers in California
and Nevada to Cingular for an aggregate purchase price of $81.0 million and paid
SBC a fee of $7.5 million related to the 294 reduction in the maximum number of
towers that it is committed to lease or sublease.

F-28

SPECTRASITE, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

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 600 towers during the period beginning May 2003 and
ending August 2004. The total purchase price for the 600 towers is expected to
be approximately $156 million.

In 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.

As of December 31, 2002, the Company had issued approximately 9.9 million
shares of common stock to SBC pursuant to the SBC acquisition agreements. As
part of the Plan of Reorganization discussed in Note 2, on February 10, 2003 the
Company issued to SBC 12.1 million shares of Old Common Stock in full
satisfaction of any obligation to issue SBC further stock or make any further
adjustment payment. Of the 12.1 million shares, the Company issued 7.5 million
shares of Old Common Stock in connection with the adjustment payment described
above and 4.7 million shares of Old Common Stock as an advance payment on the
purchase of the remaining 600 towers. All of these shares of Old Common Stock
were exchanged for new warrants under the Plan of Reorganization. As a result,
at all future closings with SBC, the stock portion of the payment for each site
has been paid in full.

2001 ACQUISITIONS -- During the year ended December 31, 2001, the Company
consummated transactions involving the acquisition of various communications
sites and two service providers for an aggregate purchase price of $722.8
million, including the issuance of approximately 7.9 million shares of common
stock valued at $122.8 million. The principal transactions were as follows:

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

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

SBC TRANSACTION -- As discussed above, in 2000 the Company entered into an
agreement to acquire lease or sublease interests in communications towers from
SBC and several of its affiliates. In the year ended December 31, 2001, the
Company subleased 1,926 towers, for which it paid $493.9 million in cash and
issued 7.2 million shares of common stock valued at $121.2 million.

PAXSON -- On December 19, 2001 the Company acquired 21 broadcast towers and
management rights to 15 broadcast towers from Paxson for $34.0 million in cash.

F-29

SPECTRASITE, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

NEXTEL ACQUISITIONS -- During 1999, the Company acquired 2,000
communications towers from affiliates of Nextel and also entered into a master
site commitment agreement with these affiliates. Under the terms of this
agreement, Nextel offered SpectraSite exclusive opportunities relating to the
purchase or construction of up to 2,111 communications sites. During 2001, the
Company acquired 192 wireless communications towers from Nextel and its
affiliates under this agreement for a total purchase price of $33.7 million in
cash. In 2002, the number of sites purchased or constructed or made available
for co-location under the master site commitment agreement reached 2,111, and
the agreement terminated.

Pursuant to the tower acquisitions and entering into the master site
commitment agreement in 1999, SpectraSite and Nextel and SpectraSite and Nextel
Partners entered into master site lease agreements. Under these agreements,
SpectraSite has agreed to lease to Nextel and Nextel Partners space on wireless
communications towers or other transmission space. These lease agreements
provide for a monthly rental payment of $1,600 per month. On each annual
anniversary of a given lease's commencement, the rent owed under the lease will
increase by 3%.

The term of each lease contracted under the agreement is at least five
years, with a right to extend for five successive five-year periods. In some
cases, the initial lease term will be six, seven or eight years. The lease is
automatically renewed unless the tenant submits notification of its intent to
terminate the lease, when its current term expires, prior to such expiration.

SpectraSite and Nextel also entered into a security and subordination
agreement under which SpectraSite granted to Nextel a continuing security
interest in the assets acquired in the Nextel tower acquisition or acquired or
constructed under the master site commitment agreement. This interest secures
SpectraSite's obligations under the Nextel master site lease agreement and the
Nextel Partners master site lease agreement. The terms of an intercreditor
agreement render Nextel's lien and the other rights and remedies of Nextel under
the security and subordination agreement subordinate and subject to the rights
and remedies of the lenders under Communications' credit facility.

2000 ACQUISITIONS -- During the year ended December 31, 2000, the Company
consummated transactions involving the acquisition of various communications
sites and service providers for an estimated purchase price of $765.1 million,
including the issuance of approximately 9.2 million shares of the Company's
common stock valued at $165.0 million. The purchase price also includes the
issuance of 191,465 options to purchase the Company's common stock at a price of
$3.58 per share. These options were valued at $2.0 million using the
Black-Scholes option-pricing model. The principal transactions were as follows:

APEX TRANSACTION -- On January 5, 2000, the Company acquired Apex Site
Management Holdings, Inc. in a merger transaction for 4.5 million shares of
SpectraSite's common stock valued at $55.8 million and 191,465 options to
purchase common stock at an exercise price of $3.58 per share. SpectraSite also
used approximately $6.2 million in cash to repay outstanding indebtedness and
other obligations of Apex in connection with the merger. Apex provides rooftop
and in-building access to wireless carriers.

ITI TRANSACTION -- On January 28, 2000, the Company acquired substantially
all of the assets of International Towers Inc. and its subsidiaries ("ITI"),
including S&W Communications Inc. ITI owned a broadcast tower manufacturing
facility and, through S&W Communications, provided integrated services for the
erection of broadcast towers, foundations and multi-tenant transmitter
buildings. The Company paid $5.4 million and issued 350,000 shares of
SpectraSite's common stock, valued at $7.1 million, in connection with this
acquisition.

AIRTOUCH TRANSACTION -- As discussed above, in 2000 the Company entered
into an agreement to lease or sublease communications towers from AirTouch and
several of its affiliates. During 2000, the Company subleased 233 towers for
aggregate cash consideration of $83.9 million, including $12.5 million released
from the deposit escrow.

F-30

SPECTRASITE, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

LODESTAR TRANSACTION -- On May 18, 2000, the Company acquired Lodestar
Towers, Inc. for approximately $178.6 million in cash. As of May 18, 2000,
Lodestar owned 110 wireless towers and 11 broadcast towers, and managed an
additional 120 wireless towers and 10 broadcast towers.

PEGASUS ACQUISITION -- On July 17, 2000, the Company acquired 11 broadcast
towers from Pegasus Communications for approximately 1.4 million shares of
common stock valued at $37.5 million.

GOCOM ACQUISITION -- On August 24, 2000, the Company acquired 12 broadcast
towers and 14 other communications towers from GOCOM Holdings, LLC and its
subsidiaries for $28.2 million in cash.

SBC TRANSACTION -- As discussed above, in 2000 the Company entered into an
agreement to acquire leasehold and sub-leasehold interests in communications
towers from affiliates of SBC. The initial closing occurred on December 14, 2000
and involved 739 towers, for which the company paid $175.0 million in cash and
issued 2.5 million shares of common stock valued at $57.9 million.

NEXTEL ACQUISITIONS -- During 1999, the Company entered into a master site
commitment agreement with certain of Nextel's subsidiaries. During 2000, the
Company acquired 479 wireless communications towers from Nextel and its
affiliates under this agreement for a total purchase price of $86.9 million in
cash.

U.S. REALTEL TRANSACTION -- On December 8, 2000, the Company purchased
substantially all of the United States assets and operations of U.S. RealTel,
Inc. for a purchase price of $16.5 million in cash. U.S. RealTel is an
international provider of rooftop and in-building telecommunications access.

12. 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 were
terminated, $3.2 million was related to the costs of closing offices and $4.7
million was related to the costs of severance for 155 employees. 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.

In May 2001, the Company announced that it would consolidate its rooftop
management operations and recorded a non-recurring charge of $35.8 million. Of
this amount, $29.6 million related to the write-off of goodwill, determined
using the present value of estimated cash flows, $5.1 million related to the
write-down of long-term assets and $1.1 million related to the costs of
severance of 80 employees and other costs related to the consolidation of these
operations.

In June 2001, the Company announced that it would divest its site leasing
operations in Mexico. As a result, the Company recorded non-recurring charges of
$32.2 million of which $10.7 million related to the write-off of goodwill, $17.6
million related to the write-down of long-term assets and $3.9 million related
to the costs severance of 21 employees and other costs related to the
divestiture. Also in June 2001, the Company announced that it would close
operations from the purchase of Vertical Properties. As a result, the Company
recorded non-recurring charges of $4.3 million of which $4.2 million was related
to the write-off of goodwill and $0.1 million was related to the costs of
severance of 2 employees and other costs related to the closing.

In November 2001, the Company announced that it would reduce its planned
new tower acquisition and construction programs for 2002. As a result of the
reduced new tower activity, the Company recorded restructuring charges of $70.3
million. Of this amount, $27.7 million was related to the write-off of work in
progress related to sites in development that the Company terminated, $4.8
million was related to the costs of closing certain offices and $2.8 million was
related to the costs of severance of 201 employees. The Company also completed
an amendment to modify its agreement to

F-31

SPECTRASITE, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

acquire leasehold and sub-leasehold interests in approximately 3,900
communications towers from affiliates of SBC Communications. This amendment
provides for the number of towers to be subleased to be reduced by 300 and for
the sublease date on at least 850 towers to be postponed to 2003 and January
2004. In exchange for these modifications, the Company paid a contract amendment
fee of $35.0 million that has been included in the restructuring charge in 2001.

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 ADDITIONAL AS OF
DECEMBER 31, RESTRUCTURING CASH DECEMBER 31,
2001 CHARGES PAYMENTS 2002
------------ -------------- ---------- ------------
(IN THOUSANDS)

Accrued restructuring liabilities:
Employee severance................................. $ 2,431 $ 4,667 $ (3,882) $ 3,216
Lease termination and office closing costs......... 2,419 3,245 (2,103) 3,561
------------ -------------- ---------- ------------
Total........................................... $ 4,850 $ 7,912 $ (5,985) $ 6,777
============ ============== ========== ============

13. 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 different 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 each reportable segment 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
non-recurring charges and interest. In addition, "Other" also includes corporate
assets such as cash and cash equivalents, certain tangible and intangible assets
and income tax accounts that have not been allocated to a specific segment.

WIRELESS BROADCAST OTHER TOTAL
---------- ---------- ---------- ----------
(IN THOUSANDS)

Year ended December 31, 2002 Revenues............... $ 261,189 $ 48,145 $ -- $ 309,334
Loss from continuing operations before income taxes. 132,890 17,147 (487,883) (337,846)
Assets.............................................. 2,195,775 174,902 207,779 2,578,456
Goodwill............................................ 60,626 -- -- 60,626
Additions to property and equipment................. 52,020 14,395 7,816 74,231
Year ended December 31, 2001 Revenues............... $ 210,187 $ 49,638 $ -- $ 259,825
Loss from continuing operations before income taxes. 87,820 10,215 (758,107) (660,072)
Assets.............................................. 2,354,985 175,386 673,054 3,203,425

F-32

SPECTRASITE, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

WIRELESS BROADCAST OTHER TOTAL
---------- ---------- ---------- ----------
(IN THOUSANDS)

Goodwill................................................ 102,976 122,445 211,929 437,350
Additions to property and equipment..................... 966,087 54,775 77,782 1,098,644
Year ended December 31, 2000 Revenues................... $ 112,730 $ 42,339 $ -- $ 155,069
Loss from continuing operations before income taxes..... 44,414 5,972 (213,001) (162,615)
Assets.................................................. 1,502,258 116,074 1,435,773 3,054,105
Goodwill................................................ 150,855 132,925 221,821 505,601
Additions to property and equipment..................... 700,877 97,180 27,230 825,287

Net revenues were located in geographic areas as follows:

YEAR ENDED DECEMBER 31,
--------------------------------------------
2000 2001 2002
---------- ---------- ----------
(IN THOUSANDS)

United States................................................ $ 154,246 $ 258,549 $ 308,675
Canada....................................................... 823 1,139 659
Mexico....................................................... -- 137 --
---------- ---------- ----------
Consolidated net revenues.................................... $ 155,069 $ 259,825 $ 309,334
========== ========== ==========

Long-lived assets were located in geographic areas as follows:

YEAR ENDED DECEMBER 31,
----------------------------------
2001 2002
------------- -------------
(IN THOUSANDS)

United States......................................................... $ 3,011,744 $ 2,452,569
Canada................................................................ 2,944 3,003
------------- -------------
Consolidated long-lived assets........................................ $ 3,014,688 $ 2,455,572
============= =============

14. SELECTED QUARTERLY FINANCIAL DATA (UNAUDITED)

Selected quarterly financial data for the years ended December 31, 2001 and
2002 is as follows:

THREE MONTHS ENDED
----------------------------------------------------------
MARCH 31 JUNE 30 SEPTEMBER 30 DECEMBER 31
---------- ---------- ------------ ------------
(IN THOUSANDS, EXCEPT PER SHARE DATA)

2002
Revenues.......................................... $ 72,404 $ 75,869 $ 79,340 $ 81,721
Operating loss before restructuring and (18,629) (21,922) (16,167) (11,619)
non-recurring charges(1).......................
Restructuring and non-recurring charges........... -- (28,570) -- --
Income (loss) from discontinued operations........ 2,012 (4,797) (51,147) (5,320)
Net loss(2)....................................... (452,531) (127,568) (134,592) (60,293)
Net loss per common share, basic and diluted...... $ (3.03) $ (0.83) $ (0.87) $ (0.39)
2001
Revenues.......................................... $ 55,312 $ 65,199 $ 66,590 $ 72,724
Operating loss before restructuring and (19,745) (24,169) (25,914) (29,272)
non-recurring charges(1).......................
Restructuring and non-recurring charges........... -- (72,323) -- (70,276)
Income from discontinued operations............... 1,216 499 3,073 1,070
Net loss.......................................... (63,898) (187,033) (241,140) (162,698)
Net loss per common share, basic and diluted...... $ (0.44) $ (1.24) $ (1.59) $ (1.06)

F-33

SPECTRASITE, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

---------------
(1) Represents revenues less operating expenses excluding restructuring and
non-recurring charges.

(2) Includes a charge in the quarter ended March 31, 2002 of $376,753, or $2.45
per share, for the cumulative effect of a change in accounting for goodwill
related to the adoption of SFAS 142.

F-34

SPECTRASITE, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS
AT MARCH 31, 2003 AND DECEMBER 31, 2002

REORGANIZED PREDECESSOR
COMPANY COMPANY
MARCH 31, 2003 DECEMBER 31, 2002
-------------- -----------------
(DOLLARS IN THOUSANDS)
(UNAUDITED)

ASSETS
Current assets:
Cash and cash equivalents....................................... $ 87,904 $ 80,961
Accounts receivable, net of allowance of $10,109 and $11,431, 8,647 15,180
respectively...............................................
Costs and estimated earnings in excess of billings.............. 3,184 2,169
Inventories..................................................... 7,696 7,878
Prepaid expenses and other...................................... 15,468 16,696
-------------- -----------------
Total current assets......................................... 122,899 122,884
Property and equipment, net.......................................... 1,252,260 2,292,945
Goodwill, net........................................................ -- 60,626
Other assets......................................................... 222,328 102,001
-------------- -----------------
Total assets................................................. $ 1,597,487 $ 2,578,456
============== =================

LIABILITIES AND SHAREHOLDERS' EQUITY (DEFICIT)
Current liabilities:
Accounts payable................................................ $ 20,420 $ 13,029
Accrued and other expenses...................................... 103,556 66,280
Billings in excess of costs and estimated earnings.............. 502 703
Current portion of credit facility.............................. -- 2,244
-------------- -----------------
Total current liabilities....................................... 124,478 82,256
-------------- -----------------
Long-term portion of credit facility............................ 706,955 780,711
Other long-term liabilities..................................... 81,888 27,330
-------------- -----------------
Total long-term liabilities.................................. 788,843 808,041
-------------- -----------------
Liabilities subject to compromise (Note 2)........................... -- 1,763,286
-------------- -----------------
Shareholders' equity (deficit):
Common stock, $0.001 par value, 300,000,000 shares authorized, -- 154
154,013,917 issued and outstanding at December 31, 2002....
Common stock, $0.01 par value, 250,000,000 shares authorized, 236 --
23,587,085 issued and outstanding at March 31, 2003........
Additional paid-in-capital...................................... 685,494 1,624,939
Accumulated other comprehensive income (loss)................... 128 (355)
Accumulated deficit............................................. (1,692) (1,699,865)
-------------- -----------------
Total shareholders' equity (deficit)......................... 684,166 (75,127)
-------------- -----------------
Total liabilities and shareholders' equity (deficit)......... $ 1,597,487 $ 2,578,456
============== =================

See accompanying notes.

F-35

SPECTRASITE, INC. AND SUBSIDIARIES

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

PREDECESSOR
REORGANIZED COMPANY ONE PREDECESSOR
COMPANY TWO MONTH ENDED COMPANY THREE
MONTHS ENDED JANUARY 31, MONTHS ENDED
MARCH 31, 2003 2003 MARCH 31, 2002
-------------- ----------- --------------
(IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)

Revenues:
Site leasing................................................ $ 51,069 $ 25,556 $ 65,952
Broadcast services.......................................... 3,575 1,237 6,452
-------------- ----------- --------------
Total revenues........................................... 54,644 26,793 72,404
-------------- ----------- --------------
Operating Expenses:
Costs of operations, excluding depreciation, amortization
and accretion expense:
Site leasing............................................. 17,060 8,840 25,505
Broadcast services....................................... 2,889 1,492 5,370
Selling, general and administrative expenses................ 8,686 4,280 15,520
Depreciation, amortization and accretion expenses........... 16,826 16,075 44,638
-------------- ----------- --------------
Total operating expenses.............................. 45,461 30,687 91,033
-------------- ----------- --------------
Operating income (loss)........................................ 9,183 (3,894) (18,629)
-------------- ----------- --------------
Other income (expense):
Interest income............................................. 217 137 84
Interest expense............................................ (9,261) (4,721) (58,697)
Gain on debt discharge...................................... -- 1,034,764 --
Other expense............................................... (1,229) (493) (387)
-------------- ----------- --------------
Total other income (expense).......................... (10,273) 1,029,687 (59,000)
-------------- ----------- --------------
Income (loss) from continuing operations before income taxes... (1,090) 1,025,793 (77,629)
Income tax expense............................................. 602 5 161
-------------- ----------- --------------
Income (loss) from continuing operations....................... (1,692) 1,025,788 (77,790)
Reorganization items:
Adjust accounts to fair value............................... -- (644,688) --
Professional and other fees................................. -- (23,894) --
-------------- ----------- --------------
Total reorganization items............................ -- (668,582) --
-------------- ----------- --------------
Income (loss) before discontinued operations................... (1,692) 357,206 (77,790)
Discontinued operations:
Income from operations of discontinued segment, net of income -- -- 2,012
tax expense................................................. -------------- ----------- --------------
Income (loss) before cumulative effect of change in accounting (1,692) 357,206 (75,778)
principle...................................................
Cumulative effect of change in accounting principle............ -- (12,236) (376,753)
-------------- ----------- --------------
Net income (loss).............................................. $ (1,692) $ 344,970 $ (452,531)
============== =========== ==============
Basic and diluted earnings per share:
Income (loss) from continuing operations.................... $ (0.07) $ 6.66 $ (0.51)
Reorganization items........................................ -- (4.34) --
Discontinued operations..................................... -- -- 0.01
Cumulative effect of change in accounting................... -- (0.08) (2.45)
-------------- ----------- --------------
Net income (loss)........................................... $ (0.07) $ 2.24 $ (2.95)
============== =========== ==============
Weighted average common shares outstanding (basic and diluted). 23,587 154,014 153,654
============== =========== ==============

See accompanying notes.

F-36

SPECTRASITE, INC. AND SUBSIDIARIES

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

Operating activities
Net income (loss)................................................ $ (1,692) $ 344,970 $ (452,531)
Adjustments to reconcile net income (loss) to net cash provided
by operating activities:
Depreciation................................................ 13,889 15,609 45,559
Cumulative effect of change in accounting principle......... -- 12,236 376,753
Amortization of intangible assets........................... 2,509 252 516
Amortization of debt issuance costs......................... 790 425 2,633
Amortization of asset retirement obligation................. 429 214
Amortization of senior discount notes....................... -- -- 29,941
Writeoff of debt issuance costs............................. 1,614 -- --
Non-cash compensation charges............................... -- -- 289
(Gain) loss on disposal of assets........................... 1,203 (84) 70
Gain on debt discharge...................................... -- (1,034,764) --
Adjust accounts to fair value............................... -- 644,688 --
Equity in net loss of affiliates............................ -- -- 459
Changes in operating assets and liabilities, net of
acquisitions:
Accounts receivable...................................... 1,488 5,045 31,003
Costs and estimated earnings in excess of billings, net.. (944) (272) (8,245)
Inventories.............................................. 184 (2) (1,158)
Prepaid expenses and other............................... (1,003) (2,238) (1,289)
Accounts payable......................................... (6,170) 13,549 (15,177)
Other liabilities........................................ (370) 6,264 (4,621)
-------------- ----------- --------------
Net cash provided by operating activities................ 11,927 5,892 4,202
-------------- ----------- --------------
Investing activities
Purchases of property and equipment.............................. (2,255) (2,737) (39,018)
Loans to affiliates.............................................. -- -- (750)
Proceeds from the sale of assets................................. 81,128 -- --
-------------- ----------- --------------
Net cash provided by (used in) investing activities...... 78,873 (2,737) (39,768)
-------------- ----------- --------------
Financing activities
Proceeds from issuance of common stock, net of issuance costs.... -- -- 478
Proceeds from issuance of long-term debt......................... -- -- 90,000
Repayments of debt............................................... (76,128) (10,884) (867)
Debt issuance costs.............................................. -- -- (25)
-------------- ----------- --------------
Net cash provided by (used in) financing activities...... (76,128) (10,884) 89,586
-------------- ----------- --------------
Net increase (decrease) in cash and cash equivalents..... 14,672 (7,729) 54,020
Cash and cash equivalents at beginning of period................. 73,232 80,961 31,547
-------------- ----------- --------------
Cash and cash equivalents at end of period....................... $ 87,904 $ 73,232 $ 85,567
============== =========== ==============

See accompanying notes.

F-37

Supplemental disclosures of cash flow information:
Cash paid during the period for interest......................... $ 3,263 $ 4,265 $ 23,718
Cash paid during the period for income taxes..................... 602 5 685
Supplemental disclosures of noncash investing and financing
activities:

Common stock issued for deposits................................. $ -- $ 408 $ --
Common stock issued for property and equipment................... -- -- 1,678
Capital lease obligations incurred for the purchase of property
and equipment................................................. 68 -- 4,357

See accompanying notes.

F-38

SPECTRASITE, INC. AND SUBSIDIARIES

NOTES TO THE UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

1. DESCRIPTION OF BUSINESS, BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING
POLICIES

SpectraSite, Inc. ("SpectraSite"), formerly known as SpectraSite Holdings,
Inc., 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, the leasing of distributed antenna systems within
buildings, managing rooftop telecommunications access on commercial real estate
and designing, constructing, modifying and maintaining broadcast towers in the
United States.

BASIS OF PRESENTATION

In accordance with AICPA Statement of Position 90-7 FINANCIAL REPORTING BY
ENTITIES IN REORGANIZATION UNDER THE BANKRUPTCY CODE ("SOP 90-7"), the Company
adopted "fresh start" accounting as of January 31, 2003 and the Company's
emergence from chapter 11 resulted in a new reporting entity. Under "fresh
start" accounting, the reorganization value of the entity is allocated to the
entity's assets based on fair values, and liabilities are stated at the present
value of amounts to be paid determined at appropriate current interest rates.
The effective date is considered to be the close of business on January 31, 2003
for financial reporting purposes. The periods presented prior to January 31,
2003 have been designated "Predecessor Company" and the periods subsequent to
January 31, 2003 have been designated "Reorganized Company." As a result of the
implementation of fresh start accounting, the financial statements of the
Company after the effective date are not comparable to the Company's financial
statements for prior periods.

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.
Rental 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 service revenues related to construction activities are derived
from service contracts with customers 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

F-39

SPECTRASITE, INC. AND SUBSIDIARIES

NOTES TO THE UNAUDITED CONDENSED CONSOLIDATED
FINANCIAL STATEMENTS (CONTINUED)

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 $11.4 million and $10.1 million as of December 31, 2002 and
March 31, 2003, respectively.

SIGNIFICANT CUSTOMERS

One customer, which was a significant shareholder of the Predecessor
Company's common stock, accounted for 31%, 28% and 29% of revenues in the three
months ended March 31, 2002, the one month ended January 31, 2003 and the two
months ended March 31, 2003, respectively. In addition, another customer, which
is an affiliate of a former significant shareholder of the Predecessor Company's
common stock, accounted for 20%, 22% and 19% of the Company's revenues in the
three months ended March 31, 2002, the one month ended January 31, 2003 and the
two months ended March 31, 2003, respectively. This customer also accounted for
21% and 14% of accounts receivable at December 31, 2002 and March 31, 2003,
respectively.

PROPERTY AND EQUIPMENT

Property and equipment built, purchased or leased under long-term leasehold
agreements are recorded at cost and depreciated over their estimated useful
lives. The Company capitalizes costs incurred in bringing property and equipment
to an operational state. Costs clearly associated with the acquisition,
development and construction of property and equipment are capitalized as a cost
of the assets. Indirect costs that relate to several assets are capitalized and
allocated to the assets to which the costs relate. Indirect costs that do not
clearly relate to projects under development or construction are charged to
expense 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.

GOODWILL

The excess of the purchase price over the fair value of net assets acquired
in purchase business combinations has been recorded as goodwill. Goodwill 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. On an ongoing basis, the Company
assesses the recoverability of goodwill by determining the ability of the
specific assets acquired to generate future cash flows sufficient to recover the
unamortized goodwill over the remaining useful life. The Company estimates
future cash flows based on the current performance of the acquired assets and
our business plan for those assets. Changes in business conditions, major
customers or other factors could result in changes in those estimates. Goodwill
determined to be unrecoverable based on future cash flows is written-off in the
period in which such determination is made.

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

F-40

SPECTRASITE, INC. AND SUBSIDIARIES

NOTES TO THE UNAUDITED CONDENSED CONSOLIDATED
FINANCIAL STATEMENTS (CONTINUED)

2002 statement of operations. In connection with the Company's adoption of fresh
start accounting on January 31, 2003, impairment tests of goodwill were
performed. As a result, the remaining $60.6 million of goodwill related to our
wireless tower unit was written off. This charge is included in Reorganization
items in the consolidated financial statements.

CUSTOMER CONTRACTS

Upon completion of the Company's reorganization and the implementation of
fresh start accounting, the Company recorded intangible assets relating to the
fair value of customer contracts in the amount of $190.9 million as of January
31, 2003. These contracts are amortized over the lesser of the remaining life of
the lease contract or the remaining life of the related tower asset, not to
exceed 15 years for wireless towers and 30 years for broadcast towers. Customer
contracts, less accumulated amortization, were $188.7 million as of March 31,
2003 and are classified as other assets in the unaudited condensed consolidated
financial statements.

DERIVATIVE FINANCIAL INSTRUMENTS

The Company accounts for derivative financial instruments in accordance
with Statement of Financial Accounting Standards No. 133, ACCOUNTING FOR
DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES ("SFAS 133"), as amended by
Statement of Financial Accounting Standards No. 138, ACCOUNTING FOR CERTAIN
INSTRUMENTS AND CERTAIN HEDGING ACTIVITIES ("SFAS 138") and as further amended
by Statement of Financial Accounting Standards No. 149, AMENDMENT OF STATEMENT
133 ON DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES. The Company records
derivative financial instruments in the consolidated financial statements at
fair value. Changes in the fair values of derivative financial instruments are
either recognized in earnings or in shareholders' equity as a component of other
comprehensive income depending on whether the derivative financial instrument
qualifies for hedge accounting as defined by SFAS 133. Changes in fair values of
derivatives not qualifying for hedge accounting are reported in earnings as they
occur.

In February 2003, the Company entered into an interest rate cap agreement
in order to limit exposure to fluctuations in interest rates on its variable
rate credit facility. This transaction is designated as a fair value hedge.
Accordingly, gains and losses from the change in the fair value of this
instrument are recognized in other income and expense. As of March 31, 2003, the
carrying amount and fair value of this instrument was $0.8 million and is
included in Other Assets in the unaudited condensed consolidated financial
statements.

RESTRUCTURING AND NON-RECURRING CHARGES

LIABILITY AS CASH PAYMENTS CASH PAYMENTS
OF FOR THE ONE FOR THE TWO LIABILITY AS
DECEMBER 31, MONTH ENDED MONTHS ENDED OF MARCH 31,
2002 JANUARY 31, 2003 MARCH 31, 2003 2003
------------ ---------------- -------------- ------------
(IN THOUSANDS)

Accrued restructuring liabilities:
Employee severance.......................... $ 3,216 $ (182) $ (375) $ 2,659
Lease termination and office closing costs.. 3,561 (421) (267) 2,873
------------ ---------------- -------------- ------------
Total....................................... $ 6,777 $ (603) $ (642) $ 5,532
=========== ================ ============== ============

F-41

SPECTRASITE, INC. AND SUBSIDIARIES

NOTES TO THE UNAUDITED CONDENSED CONSOLIDATED
FINANCIAL STATEMENTS (CONTINUED)

INCOME TAXES

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."
During the three months ended March 31, 2002 and the one month ended January 31,
2003, the Company had potential common stock equivalents related to its
convertible notes, warrants and outstanding stock options. Upon completion of
the Company's reorganization, the convertible notes were exchanged for shares of
common stock, par value $0.01 per share ("New Common Stock") and all outstanding
warrants and stock options were cancelled. These potential common stock
equivalents were not included in diluted earnings (loss) per share for the three
months ended March 31, 2002 and the one month ended January 31, 2003 because the
effect would have been antidilutive. Accordingly, basic and diluted net income
(loss) per share are the same for the three months ended March 31, 2002 and for
the one month ended January 31, 2003.

As discussed in Note 2, under the Plan of Reorganization, the holders of
166,158,298 shares of common stock, par value $0.001 per share, outstanding as
of February 10, 2003 (the "Old Common Stock") received new warrants which were
immediately exercisable into 1.25 million shares of New Common Stock at a price
of $32.00 per share. In addition, on February 10, 2003, the Company adopted the
2003 Equity Incentive Plan to grant equity based incentives in New Common Stock
to employees and directors. Approximately 2.7 million options to purchase new
common stock were granted under this plan in March 2003. During the two months
ended March 31, 2003, the Company had potential common stock equivalents related
to its new warrants and outstanding stock options on New Common Stock. These
potential common stock equivalents were not included in diluted earnings (loss)
per share for the two months ended March 31, 2003 because the effect would have
been antidilutive. Accordingly, basic and diluted net loss per share are the
same for the two months ended March 31, 2003.

COMPREHENSIVE INCOME (LOSS)

Other comprehensive income (loss) consists of foreign currency translation
adjustments and unrealized holding gains (losses) as follows (in thousands):

REORGANIZED
COMPANY PREDECESSOR COMPANY
--------------- ------------------------------
ONE MONTH
TWO MONTHS ENDED THREE MONTHS
ENDED JANUARY 31, ENDED MARCH 31,
MARCH 31, 2003 2003 2002
--------------- ------------- ---------------

Reported net income (loss).................................. $ (1,692) $ 344,970 $ (452,531)
Foreign currency translation adjustment..................... (5) (129) 6
Unrealized holding gains (losses) arising during the period. 133 (200) (16,675)
--------------- ------------- ---------------
Comprehensive income (loss)................................. $ (1,564) $ (344,641) $ (469,200)
=============== ============= ===============

CONTINGENCIES

The Company is involved in certain legal actions arising in the normal
course of business. In the opinion of management, based on a review of such
legal proceedings, the ultimate outcome of these actions will not have a
material effect on the consolidated financial statements.

F-42

SPECTRASITE, INC. AND SUBSIDIARIES

NOTES TO THE UNAUDITED CONDENSED CONSOLIDATED
FINANCIAL STATEMENTS (CONTINUED)

RECLASSIFICATIONS

Certain reclassifications have been made to the 2002 condensed consolidated
financial statements to conform to the 2003 presentation. These
reclassifications had no effect on previously reported net loss or shareholders'
equity (deficit).

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 for the Predecessor Company for the three months ended March 31,
2002 and normal recurring adjustments and fresh start accounting adjustments for
the Predecessor and Reorganized Companies for the three months ended March 31,
2003), which are, in the opinion of management, necessary for a fair
presentation of results for interim periods. As a result of the implementation
of fresh start accounting as of January 31, 2003, the financial statements after
that date are not comparable to the financial statements for prior periods.
Results of interim periods are not necessarily indicative of the results to be
expected for a full year.

2. PLAN OF REORGANIZATION

The Plan provided that, among other things, (i) in exchange for their
notes, the holders of the 12 1/2% Senior Notes due 2010, the 6 3/4% Senior
Convertible Notes due 2010, the 10 3/4% Senior Notes due 2010, the 11 1/4%
Senior Discount Notes due 2009, the 12 7/8% Senior Discount Notes due 2010 and
the 12% Senior Discount Notes due 2008 received their pro rata share of 23.75
million shares of common stock, par value $0.01 per share ("New Common Stock");
(ii) the holders of 166,158,298 shares of common stock, par value $0.001 per
share, outstanding as of the Effective Date (the "Old Common Stock") received
warrants immediately exercisable into 1.25 million shares of New Common Stock at
a price of $32.00 per share; and (iii) all other equity interests at the
Effective Date, including outstanding warrants and options, were cancelled.

The consolidated financial statements as of December 31, 2002 include
adjustments and reclassifications to reflect affected liabilities as
"Liabilities Subject to Compromise." These liabilities were settled in
accordance with the Plan. The liabilities subject to compromise as of December
31, 2002 were as follows (in thousands):

F-43

SPECTRASITE, INC. AND SUBSIDIARIES

NOTES TO THE UNAUDITED CONDENSED CONSOLIDATED
FINANCIAL STATEMENTS (CONTINUED)

10 3/4% Senior Notes Due 2010................................... $ 200,000
12 1/2% Senior Notes Due 2010................................... 200,000
6 3/4% Senior Convertible Notes Due 2010........................ 200,000
12% Senior Discount Notes Due 2008, net of discount............. 208,479
11 1/4% Senior Discount Notes Due 2009, net of discount......... 502,644
12 7/8% Senior Discount Notes Due 2010, net of discount......... 418,580
Accrued interest................................................ 33,583
------------
Total liabilities subject to compromise......................... $ 1,763,286
============

SpectraSite incurred costs directly associated with the chapter 11
proceedings of $23.9 million in the one month ended January 31, 2003. These
costs are included in reorganization expense in the unaudited condensed
consolidated statement of operations.

In accordance with AICPA Statement of Position 90-7 FINANCIAL REPORTING BY
ENTITIES IN REORGANIZATION UNDER THE BANKRUPTCY CODE ("SOP 90-7"), the Company
adopted "fresh start" accounting as of January 31, 2003 and the Company's
emergence from bankruptcy resulted in a new reporting entity. Under fresh start
accounting, the reorganization value of the entity is allocated to the entity's
assets based on fair values, and liabilities are stated at the present value of
amounts to be paid determined at appropriate current interest rates. The net
effect of all fresh start accounting adjustments resulted in a charge of $644.7
million, which is reflected in the unaudited condensed consolidated statement of
operations for the one month ended January 31, 2003. The effective date is
considered to be the close of business on January 31, 2003 for financial
reporting purposes. The periods presented prior to January 31, 2003 have been
designated "Predecessor Company" and the periods subsequent to January 31, 2003
have been designated "Reorganized Company." As a result of the implementation of
fresh start accounting, the financial statements of the Company after January
31, 2003 are not comparable to the Company's financial statements for prior
periods.

The reorganization value used in adopting fresh start accounting was $685.7
million based on the fair market value of the senior notes, senior discount
notes and senior convertible notes at the Effective Date, the date these
instruments were exchanged for New Common Stock and the value of warrants issued
on that date based on the Black-Scholes option pricing model. The reorganization
and the adoption of fresh start accounting resulted in the following adjustments
to the Company's Unaudited Condensed Consolidated Balance Sheet as of January
31, 2003:

PREDECESSOR REORGANIZED
COMPANY REORGANIZATION COMPANY
JANUARY 31, AND FRESH START JANUARY 31,
2003 ADJUSTMENTS REF 2003
----------- ---------------- ----------- -------------
(IN THOUSANDS)

ASSETS
Current assets:
Cash and cash equivalents.................... $ 73,442 $ (210) (1) $ 73,232
Accounts receivable.......................... 10,134 -- 10,134
Costs and estimated earnings in excess of
billings................................ 2,198 -- 2,198
Inventories.................................. 7,880 -- 7,880
Prepaid expenses and other................... 17,903 (531) (2) 17,372
Total current assets...................... 111,557 (741) 110,816
Property and equipment, net..................... 2,303,368 (957,210) (3) 1,346,158
Goodwill, net................................... 60,626 (60,626) (2) --
Other assets.................................... 102,024 122,181 (2),(4) 224,205
----------- ---------------- -------------
Total assets.............................. $2,577,575 $ (896,396) $ 1,681,179
=========== ================ =============

F-44

SPECTRASITE, INC. AND SUBSIDIARIES

NOTES TO THE UNAUDITED CONDENSED CONSOLIDATED
FINANCIAL STATEMENTS (CONTINUED)

PREDECESSOR REORGANIZED
COMPANY REORGANIZATION COMPANY
JANUARY 31, AND FRESH START JANUARY 31,
2003 ADJUSTMENTS REF 2003
----------- ---------------- ----------- -------------
(IN THOUSANDS)

LIABILITIES AND SHAREHOLDERS' EQUITY (DEFICIT)
Current liabilities:
Accounts payable............................. $ 10,407 $ 16,184 (1) $ 26,591
Accrued and other expenses................... 65,039 38,047 (5) 103,086
Billings in excess of costs and estimated
earnings................................ 458 -- 458
Current portion of credit facility........... 2,244 -- 2,244
----------- ---------------- -------------
Total current liabilities................. 78,148 54,231 132,379
----------- ---------------- -------------
Long-term portion of credit facility............ 780,711 -- 780,711
Other long-term liabilities..................... 52,108 30,251 (5) 82,359
----------- ---------------- -------------
Total long-term liabilities............... 832,819 30,251 863,070
----------- ---------------- -------------
Liabilities subject to compromise............... 1,763,286 (1,763,286) (4) --
----------- ---------------- -------------
Shareholders' equity (deficit):
Common stock, $0.001 par value,
300,000,000 shares authorized
154,013,917 issued and outstanding
actual at January 31, 2003
(Predecessor Company); $0.01 par
value, 250,000,000 shares authorized
23,587,085 issued and outstanding at
January 31, 2003 (Reorganized Company) 154 82 (4) 236
Additional paid-in-capital and warrants......... 1,624,93 (939,445) (4) 685,494
Accumulated other comprehensive income.......... (684) 684 (6) --
Accumulated deficit............................. (1,721,087) 1,721,087 (6) --
----------- ---------------- -------------
Total shareholders' equity (deficit)...... (96,678) 782,408 685,730
----------- ---------------- -------------
Total liabilities and shareholders'
equity (deficit)...................... $2,577,575 $ (896,396) $ 1,681,179
=========== ================ =============

References:

(1) To reflect cash requirements for reorganization costs paid in January 2003
and accrual for remaining reorganization costs.

(2) To record prepaid expenses and other, goodwill, and other assets at fair
value.

(3) To record property and equipment at fair value.

(4) To reflect the discharge of the Senior Notes, Senior Discount Notes and
Senior Convertible Notes including the related debt issuance costs included
in other assets; the cancellation of Old Common Stock and warrants; and the
issuance of the New Common Stock and warrants.

(5) To record liabilities associated with unfavorable contracts at fair value.

F-45

SPECTRASITE, INC. AND SUBSIDIARIES

NOTES TO THE UNAUDITED CONDENSED CONSOLIDATED
FINANCIAL STATEMENTS (CONTINUED)

(6) To reflect the elimination of the accumulated other comprehensive income
and accumulated deficit as of January 31, 2003.

3. PROPERTY AND EQUIPMENT

Property and equipment consist of the following:

REORGANIZED COMPANY PREDECESSOR COMPANY
MARCH 31, 2003 DECEMBER 31, 2002
------------------- -------------------
(IN THOUSANDS)
Towers.............................. $ 1,195,977 $ 2,548,712
Equipment........................... 15,027 39,181
Land................................ 16,200 18,081
Buildings........................... 26,914 32,219
Other............................... 4,625 38,217
------------------- -------------------
1,258,743 2,676,410
Less accumulated depreciation....... (13,880) (401,467)
------------------- -------------------
1,244,863 2,274,943
Construction in progress............ 7,397 18,002
------------------- -------------------
Property and equipment, net......... $ 1,252,260 $ 2,292,945
=================== ===================

4. RECENT ACCOUNTING PRONOUNCEMENTS

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 adopted SFAS
143 on January 1, 2003 in connection with certain ground leases which require
removal of the tower upon expiration. Application of the new rules resulted in
an increase in net property, plant and equipment of $23.2 million, recognition
of an asset retirement obligation of $35.4 million, and a cumulative effect of
change in accounting principle of $12.2 million. The following table displays
activity related to the asset retirement obligation:

LIABILITY AS REVISIONS IN LIABILITY AS
OF JANUARY 1, ACCRETION ESTIMATED CASH OF MARCH 31,
2003 EXPENSE FLOWS 2003
------------- ----------- -------------- -------------
(IN THOUSANDS)

Asset retirement obligation.............. $ 35,442 $ 643 $ (8) $ 36,077
============= =========== ============== =============

F-46

SPECTRASITE, INC. AND SUBSIDIARIES

NOTES TO THE UNAUDITED CONDENSED CONSOLIDATED
FINANCIAL STATEMENTS (CONTINUED)

Pro forma results of operations for the three months ended March 31, 2002
had we adopted SFAS 143 on January 1, 2002 are as follows:

PREDECESSOR COMPANY
THREE MONTHS ENDED
MARCH 31, 2002
---------------------
(IN THOUSANDS, EXCEPT
PER SHARE AMOUNTS)
Reported net loss....................................... $ (452,531)
Additional depreciation of property and equipment....... (462)
Accretion of asset retirement obligation................ (590)
---------------------
Adjusted net loss....................................... $ (453,583)
=====================
Basic and diluted earnings per share:
Reported net loss per share............................. $ (2.95)
Additional depreciation of property and equipment....... --
Accretion of asset retirement obligation................ --
---------------------
Adjusted net loss per share............................. $ (2.95)
=====================

In April 2002, the FASB issued Statement of Financial Accounting Standards
No. 145, RESCISSION OF FASB STATEMENT NOS. 4, 44, AND 64, AMENDMENT OF FASB
STATEMENT NO. 13 AND TECHNICAL CORRECTIONS ("SFAS 145"). SFAS 145 amends or
rescinds a number of authoritative pronouncements, including Statement of
Financial Accounting Standards No. 4, REPORTING GAINS AND LOSSES FROM
EXTINGUISHMENT OF DEBT ("SFAS 4"). SFAS 4 required that gains and losses from
extinguishment of debt included in the determination of net income or loss be
aggregated and, if material, classified as an extraordinary item, net of the
related income tax effect. Upon adoption of SFAS 145, gains and losses from
extinguishment of debt will no longer be classified as extraordinary items, but
rather will generally be classified as part of other income (expense) on the
Company's consolidated statement of operations. The Company adopted the
provisions of SFAS 145 on January 1, 2003. The adoption of this statement did
not have a material impact on the Company's consolidated financial position,
results of operations or cash flows.

In July 2002, the FASB issued Statement of Financial Accounting Standards
No. 146, ACCOUNTING FOR COSTS ASSOCIATED WITH EXIT OR DISPOSAL ACTIVITIES ("SFAS
146"). The statement requires costs associated with exit or disposal activities
to be recognized when incurred rather than at the date of a commitment to an
exit or disposal plan. The requirements of SFAS 146 are effective for exit or
disposal activities initiated after January 1, 2003. The Company adopted the
provisions of SFAS 146 on January 1, 2003. The adoption of this statement did
not have a material impact on the Company's consolidated financial position,
results of operations or cash flows.

In December 2002, the FASB issued SFAS No. 148, ACCOUNTING FOR STOCK-BASED
COMPENSATION, TRANSITION AND DISCLOSURE ("SFAS 148"). SFAS 148 provides
alternative methods of transition for a voluntary change to the fair value based
method of accounting for stock-based employee compensation. SFAS 148 also
requires that disclosures of the pro forma effect of using the fair value method
of accounting for stock-based employee compensation be displayed more
prominently and in a tabular format. Additionally, SFAS 148 requires disclosure
of the pro forma effect in interim financial statements. The transition
disclosure requirements of SFAS 148 were effective for fiscal year 2002. The
interim and annual disclosure requirements are effective for the first quarter
of 2003. The adoption of SFAS 148 did not have a material effect on the
Company's financial condition, results of operations or cash flows.

In April 2003, the FASB issued SFAS No. 149, AMENDMENT OF STATEMENT 133 ON
DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES ("SFAS 149"). SFAS 149 amends and
clarifies accounting for derivative instruments, including certain derivative
instruments embedded in other contracts, and for hedging activities under SFAS
133, as

F-47

SPECTRASITE, INC. AND SUBSIDIARIES

NOTES TO THE UNAUDITED CONDENSED CONSOLIDATED
FINANCIAL STATEMENTS (CONTINUED)

previously amended by SFAS 138. SFAS 149 clarifies under what circumstances a
contract with an initial net investment meets the characteristic of a derivative
as discussed in SFAS 133. In addition, it clarifies when a derivative contains a
financing component that warrants special reporting in the statement of cash
flows. SFAS 149 amends certain other existing pronouncements. SFAS 149 is
effective for contracts entered into or modified after June 30, 2003, with
certain exceptions and for hedging relationships designated after June 30, 2003
and should be applied prospectively. The Company does not expect the adoption of
this statement to have a material impact on its consolidated financial
condition, results of operations, or cash flows.

5. 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 was 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) decreased from
$22.74 down to a floor of $12.96. The adjustment payment would be accelerated if
there were a change of control of SpectraSite or upon the occurrence of certain
specified liquidity events. In any case, the adjustment payment was 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 was 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. The average term of the sublease for
all sites at the inception of the agreement was approximately 27 years, assuming
renewals or extensions of the underlying ground leases for the sites. SBC is an
anchor tenant on all of the towers and pays a monthly fee per tower of $1,544,
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.

The Company will have the option to purchase the sites subject to the
sublease upon the expiration of the sublease as to those sites. The purchase
price for each site will be a fixed amount stated in the sublease for that site
plus the fair market value of certain alterations made to the related tower by
SBC. The aggregate purchase option price for the towers subleased to date was
approximately $190.1 million as of March 31, 2003 and will accrete at a rate of
10% per year to the applicable expiration of the sublease of a site. In the
event that the Company purchases such sites, SBC shall have the right to
continue to lease the reserved space for successive one year terms at a rent
equal to the lesser of the agreed upon market rate and the then current monthly
fee, which monthly fee shall be subject to an annual increase based on changes
in the consumer price index.

F-48

SPECTRASITE, INC. AND SUBSIDIARIES

NOTES TO THE UNAUDITED CONDENSED CONSOLIDATED
FINANCIAL STATEMENTS (CONTINUED)

that was expensed. On November 14, 2002, the Company completed a further
amendment to the SBC acquisition agreements. This amendment further reduced the
maximum number of towers that the Company is committed to lease or sublease by
294 towers, from 3,600 in the amended agreement to 3,306 towers in the agreement
as further amended. In addition, on February 10, 2003, in connection with the
Plan of Reorganization, the Company sold 545 SBC towers in California and Nevada
to Cingular for an aggregate purchase price of $81.0 million and paid SBC a fee
of $7.5 million related to the 294 reduction in the maximum number of towers
that it is committed to lease or sublease. This fee is included in
Reorganization Items -- Professional and Other Fees in the Condensed
Consolidated Financial Statements. Because these 545 towers were adjusted to
fair value as part of fresh start accounting, no gain or loss was recognized on
the sale. In the one month ended January 31, 2003, revenues and costs of site
leasing operations, excluding depreciation, amortization and accretion expense,
related to the 545 towers, were $1.2 million and $0.5 million, respectively. In
the two months ended March 31, 2003, comparable revenues and costs of site
leasing operations, excluding depreciation, amortization and accretion expense,
related to the 545 towers, were $0.4 million and $0.2 million, respectively.

In the quarter ended March 31, 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. The Company did not sublease any towers in the quarter
ended March 31, 2003.

6. FINANCING TRANSACTIONS

CREDIT FACILITY

SpectraSite Communications, Inc. ("Communications"), a wholly-owned
subsidiary of SpectraSite, is party to an amended and restated credit facility
totaling $1.0 billion. 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. 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 $301.7 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 $405.3 million term loan that is fully drawn and which
must be repaid in quarterly installments beginning on September 30, 2007 and
ending on December 31, 2007.

With the proceeds of the sale of towers to Cingular discussed in Note 5,
Communications repaid $31.4 million of the multiple draw term loan and $42.1
million of the term loan on February 11, 2003. In addition, Communications
repaid $1.1 million of the multiple draw term loan and $1.4 million of the term
loan on February 19, 2003. In connection with these repayments, Communications
wrote off $1.6 million in debt issuance costs. This charge is included in
interest expense in the unaudited condensed consolidated statement of
operations.

F-49

SPECTRASITE, INC. AND SUBSIDIARIES

NOTES TO THE UNAUDITED CONDENSED CONSOLIDATED
FINANCIAL STATEMENTS (CONTINUED)

As of March 31, 2003, Communications has $707.0 million outstanding under the
credit facility. The remaining $300.0 million under the credit facility was
undrawn. Under the terms of the credit facility, the Company could borrow
approximately $191 million under the revolving credit facility as of March 31,
2003 while remaining in compliance with the debt covenants.

At March 31, 2003, amounts due under the credit facility are as follows:

MATURITIES
----------------
(IN THOUSANDS)
2003............................................... $ --
2004............................................... --
2005............................................... 53,010
2006............................................... 124,342
2007............................................... 529,603
Total.............................................. $ 706,955
================

Prior to February 10, 2003, the revolving credit loans and the multiple
draw term loan bore interest, at Communications' 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
February 10, 2003, 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.

The weighted average interest rate on outstanding borrowings under the
credit facility as of December 31, 2002 was 5.94%. Prior to February 10, 2003,
the term loan bore interest, at Communications' 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 February 10, 2003, 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.

The agent banks under the Company's credit facility have advised the
Company that they have approved a proposed amendment to the facility that will,
among other things, reduce our unused $300 million commitment

F-50

SPECTRASITE, INC. AND SUBSIDIARIES

NOTES TO THE UNAUDITED CONDENSED CONSOLIDATED
FINANCIAL STATEMENTS (CONTINUED)

under our revolving credit facility by $100 million in exchange for increasing
the ratios in our leverage covenant in certain future periods.

7. STOCK OPTIONS

The Company accounts for stock based employee compensation under APB
Opinion No. 25, ACCOUNTING FOR STOCK ISSUED TO EMPLOYEES and has not adopted the
fair value method of accounting for stock based employee compensation. During
1997, the Company adopted a stock option plan that provided for the purchase of
common stock by key employees, directors, advisors and consultants of the
Company. In connection with the Plan of Reorganization discussed in Note 2, all
options issued under this plan were cancelled on February 10, 2003. Had
compensation cost for the Company's stock options been determined based on the
fair value at the date of grant consistent with the provisions of SFAS 123, the
Company's net income (loss) and net income (loss) per share for the one month
ended January 31, 2003 and the three months ended March 31, 2002 would have been
as follows (in thousands):

PREDECESSOR ONE COMPANY THREE
MONTH ENDED MONTHS ENDED
JANUARY 31, 2003 MARCH 31, 2002
---------------- --------------

Reported net income (loss)........................................... $ 344,970 $ (452,531)
Non-cash compensation charges included in net income (loss).......... -- 289
Stock-based employee compensation cost that would have been included
in net loss under the fair value method........................... (694) (3,913)
---------------- --------------
Adjusted net income (loss)........................................... $ 344,276 $ (456,155)
================ ==============
Basic and diluted income (loss) per share:
Reported net income (loss)........................................... $ 2.24 $ (2.95)
Non-cash compensation charges included in net income (loss).......... -- --
Stock-based employee compensation cost that would have been included
in net loss under the fair value method........................... -- (0.02)
---------------- --------------
Adjusted net income (loss)........................................... $ 2.24 $ (2.97)
================ ==============

Also on February 10, 2003, the Company adopted the 2003 Equity Incentive
Plan to grant equity based incentives in New Common Stock to employees and
directors. In March 2003, the Company granted approximately 2.7 million options
to purchase New Common Stock under this plan. Had compensation cost for the
Company's stock options to purchase New Common Stock been determined based on
the fair value at the date of grant consistent with the provisions of SFAS 123,
the Company's net loss and net loss per share for the two months ended March 31,
2003 would have been as follows (in thousands):

REORGANIZED COMPANY
TWO MONTHS ENDED
MARCH 31, 2003
-------------------

Reported net loss...................................................................... $ (1,692)
Stock-based employee compensation cost that would have been included in net loss under
the fair value method............................................................... (343)
-------------------
Adjusted net loss...................................................................... $ (2,035)
===================
Basic and diluted loss per share:
Reported net loss...................................................................... $ (0.07)
Stock-based employee compensation cost that would have been included in net loss under
the fair value method............................................................... (0.02)
-------------------
Adjusted net loss...................................................................... $ (0.09)
===================

F-51

8. DISCONTINUED OPERATIONS

On December 31, 2002, the Company sold its network services division.
Network services revenues for the three months ended March 31, 2002 were $41.8
million. Network services income before taxes for the three months ended March
31, 2002 was $2.1 million. The Company recorded a loss on disposal of the
network services division of $47.0 million in 2002. The results of the network
services division's 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.

9. BUSINESS SEGMENTS

The Company operates in two business segments: wireless and broadcast. The
wireless segment provides for leasing and subleasing of antenna sites on
multi-tenant towers and distributed antenna systems 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.

Summarized financial information concerning the reportable segments as of
and for the two months ended March 31, 2003, the one month ended January 31,
2003 and the three months ended March 31, 2002 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. All reported segment revenues are
generated from external customers as intersegment revenues are not significant.

WIRELESS BROADCAST OTHER TOTAL
---------- ---------- ---------- ----------
(IN THOUSANDS)

TWO MONTHS ENDED MARCH 31, 2003
(REORGANIZED COMPANY)
Revenues...................................................... $ 47,417 $ 7,227 $ -- $ 54,644
Income (loss) from continuing operations before income taxes.. 25,860 3,213 (30,163) (1,090)
Assets........................................................ 1,378,357 110,599 108,531 1,597,487
Additions to property and equipment........................... 972 908 443 2,323
ONE MONTH ENDED JANUARY 31, 2003
(PREDECESSOR COMPANY)
Revenues...................................................... $ 23,843 $ 2,950 $ -- $ 26,793
Income from continuing operations before income taxes......... 13,069 892 1,011,832 1,025,793
Assets........................................................ 1,310,938 177,263 96,206 1,584,407
Additions to property and equipment........................... 124 1,003 1,610 2,737
THREE MONTHS ENDED MARCH 31, 2002
(PREDECESSOR COMPANY)
Revenues...................................................... $ 61,867 $ 10,537 $ -- $ 72,404
Income (loss) from continuing operations before income taxes.. 30,115 2,718 (110,462) (77,629)
Assets........................................................ 2,297,149 200,664 336,219 2,834,032
Goodwill...................................................... 60,626 -- -- 60,626
Additions to property and equipment........................... 37,313 4,983 2,757 45,053

F-52

======================================== ===================================

No dealer, salesperson or other person is 4,500,000 Shares
authorized to give any information or to represent
anything not contained in this prospectus. You must
not rely on any unauthorized information or
representations. This prospectus is an offer to sell only
the shares offered hereby, but only under circumstances
and in jurisdictions where it is lawful to do so. The
information contained in this prospectus is current only
as of its date.

SPECTRASITE, INC.

---------------------------------------

Common Stock
TABLE OF CONTENTS

PAGE
----

Prospectus Summary..............................1 --------------------
Risk Factors....................................8
Forward-Looking Statements.....................17 [GRAPHIC OMITTED]
Use of Proceeds................................18 [LOGO - SPECTRASITE]

Price Range of Common Stock....................18 --------------------
Dividend Policy................................18
Capitalization.................................19 GOLDMAN, SACHS & CO.
Selected Consolidated Financial and Other Data.20
Management's Discussion and Analysis of BEAR, STEARNS & CO. INC.
Financial Condition and Results of
Operations..................................23 CITIGROUP
Business.......................................37
Management.....................................45 CREDIT SUISSE FIRST BOSTON
Principal and Selling Stockholders.............51
Certain Relationships and Related Transactions.52 LEHMAN BROTHERS
Description of Capital Stock...................54
Shares Available For Future Sale...............56
Underwriting...................................58
Legal Matters..................................60
Experts........................................60
Where You Can Find More Information............60
Index to Consolidated Financial Statements....F-1

---------------------------------------

======================================== ===================================

PART II

INFORMATION NOT REQUIRED IN PROSPECTUS

ITEM 13. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.

The following sets forth the estimated expenses and costs (other than
underwriting discounts and commissions) expected to be incurred in connection
with the issuance and distribution of the common stock registered hereby:

SEC registration fee......................................... $ 24,701
NASD fee..................................................... 30,500
Printing expenses............................................ *
Accounting fees and expenses................................. *
Legal fees and expenses...................................... *
Blue Sky fees and expenses................................... *
Transfer agent fees and expenses............................. *
Miscellaneous................................................ *
----------
TOTAL................................................... *

------------------------
* To be provided by amendment.

ITEM 14. INDEMNIFICATION OF DIRECTORS AND OFFICERS.

Section 145 of the Delaware General Corporation Law (the "DGCL")
provides, among other things, that a corporation may indemnify any person who
was or is a party or is threatened to be made a party to any threatened, pending
or completed action, suit or proceeding (other than an action by or in the right
of the corporation) by reason of the fact that the person is or was a director,
officer, employee or agent of the corporation, or is or was serving at the
corporation's request as a director, officer, employee or agent of another
corporation, partnership, joint venture, trust or other enterprise, against
expenses, including attorneys' fees, judgments, fines and amounts paid in
settlement actually and reasonably incurred by the person in connection with the
action, suit or proceeding. The power to indemnify applies (i) if such person is
successful on the merits or otherwise in defense of any action, suit or
proceeding or (ii) if such person acted in good faith and in a manner he
reasonably believed to be in or not opposed to the best interests of the
corporation, and with respect to any criminal action or proceeding, had no
reasonable cause to believe his conduct was unlawful. The power to indemnify
applies to actions brought by or in the right of the corporation as well, but
only to the extent of defense expenses, (including attorneys' fees but excluding
amounts paid in settlement) actually and reasonably incurred and not to any
satisfaction of judgment or settlement of the claim itself, and with the further
limitation that in such actions no indemnification shall be made in the event of
any adjudication of negligence or misconduct in the performance of his duties to
the corporation, unless a court believes that in light of all the circumstances
indemnification should apply.

Section 7 of our amended and restated certificate of incorporation
provides that we shall indemnify and hold harmless, to the fullest extent
permitted by applicable law as it presently exists or may hereafter be amended,
any person who was or is made or is threatened to be made a party or is
otherwise involved in any action, suit or proceeding, whether civil, criminal,
administrative or investigative (a "proceeding") by reason of the fact that he
or she, or a person for whom he or she is the legal representative, is or was at
any time from and after the effective date of our plan of reorganization, a
director or officer of the corporation or, while a director or officer of the
corporation, is or was at any time from and after the effective date of our plan
of reorganization, serving at the written request of the corporation as a
director, officer, employee or agent of another corporation or of a partnership,
joint venture, trust, enterprise or nonprofit entity, including service with
respect to employee benefit plans, against all liability and loss suffered and
expenses (including attorneys' fees) reasonably incurred by such person;
PROVIDED, HOWEVER, that we shall be required to indemnify a person in connection
with a proceeding (or part thereof) initiated by such person only if the
commencement of such proceeding (or part thereof) was authorized by our board of
directors.

Section 102 of the DGCL permits the limitation of directors' personal
liability to the corporation or its stockholders for monetary damages for breach
of fiduciary duties as a director except for (i) any breach of the director's
duty of loyalty to the corporation or its stockholders, (ii) acts or omissions
not in good faith or which involve intentional misconduct or a knowing violation
of the law, (iii) breaches under section 174 of the DGCL, which relates to
unlawful payments of dividends or unlawful stock repurchase or redemptions, and
(iv) any transaction from which the director derived an improper personal
benefit.

II-1

Section 6 of our amended and restated certificate of incorporation
limits the personal liability of our directors to the fullest extent permitted
by section 102 of the DGCL.

Insofar as indemnification for liabilities arising under the Securities
Act may be permitted to directors, officers or persons controlling the
registrant pursuant to the foregoing provisions, the registrant has been
informed that in the opinion of the Securities and Exchange Commission such
indemnification is against public policy as expressed in the Securities Act and
is therefore unenforceable.

We maintain directors' and officers' liability insurance for our
officers and directors.

ITEM 15. RECENT SALES OF UNREGISTERED SECURITIES.

The following is a summary of transactions by us involving sales of our
securities that were not registered under the Securities Act during the last
three years preceding the date of this registration statement:

In April 2000, we issued 680,373 shares of unregistered old common
stock, par value $0.001 per share (the "Old Common Stock") to the shareholders
of Vertical Properties, Inc. ("VPI") in connection with the acquisition of VPI.
The issuance of these securities was exempt from registration under the
Securities Act, in reliance on Section 4(2) of the Securities Act as
transactions by an issuer not involving a public offering. All shares of Old
Common Stock were cancelled in connection with our Plan of Reorganization.

In July 2000, we issued 1,373,545 shares of Old Common Stock to Pegasus
Communications Corporation in exchange for certain broadcast tower assets. The
issuance of these securities was deemed to be exempt from registration under the
Securities Act in reliance on Section 4(2) of the Securities Act as a
transaction by an issuer not involving a public offering. All shares of Old
Common Stock were cancelled in connection with our Plan or Reorganization.

In November 2000, in reliance on the exemptions from registration
provided by Section 4(2) and Rule 144A of the Securities Act, we issued $200.0
million aggregate principal amount of 6 3/4% Convertible Notes due 2010 (the
"Convertible Notes") to qualified institutional buyers. We received proceeds of
approximately $193.5 million after placement agents' commission and other fees.
The Convertible Notes were cancelled in connection with our Plan of
Reorganization.

In November 2000, we sold 4.0 million shares of Old Common Stock to
Trimaran Fund II, L.L.C. and certain other investors participating in the
Trimaran investment program, which we refer to as the Trimaran group, for $18.75
per share. The Trimaran group also received warrants to purchase an additional
1.5 million shares at exercise prices ranging from $21.56 to $28.00 per share.
The total aggregate consideration that we received for the Old Common Stock and
the warrants issued to the Trimaran group was $75.0 million. The issuance of
these securities was deemed to be exempt from registration under the Securities
Act in reliance on Section 4(2) of the Securities Act or Regulation D
promulgated under the Securities Act as transactions by an issuer not involving
a public offering. All shares of Old Common Stock and the warrants issued to the
Trimaran group were cancelled in connection with our Plan of Reorganization.

In December 2000, in reliance on the exemptions from registration
provided by Section 4(2) and Rule 144A of the Securities Act, we issued $200.0
million aggregate principal amount at maturity of 12 1/2% senior notes due 2010
(the "12 1/2% Senior Notes") to qualified institutional buyers. We received
proceeds of approximately $190.2 million after original issue discount,
placement agents' commission and other fees. The 12 1/2% Senior Notes were
cancelled in connection with our Plan of Reorganization.

From a closing in December 2000 through February 2003, we issued
approximately 22 million shares of Old Common Stock and paid approximately
$224.6 million in cash to affiliates of SBC Communications in exchange for
leasehold and subleasehold interests in an aggregate of 2,760 wireless
communications towers. The issuance of these securities was deemed to be exempt
from registration under the Securities Act, in reliance on Section 4(2) of the
Securities Act, as a transaction by an issuer not involving a public offering.
All shares of Old Common Stock were cancelled in connection with our Plan or
Reorganization.

II-2

In connection with our Plan of Reorganization, we cancelled our former
notes, Old Common Stock, restricted stock, stock warrants and stock options. Our
Third Amended and Restated Certificate of Incorporation authorizes 250,000,000
shares of common stock.

The securities issued pursuant to our Plan of Reorganization consist of
approximately 23.75 million shares of common stock and 1.25 million warrants.
These securities, along with any shares of common stock issuable upon exercise
of the warrants, were or will be issued pursuant to the Plan of Reorganization
in exchange for previously issued securities without registration under the
Securities Act in reliance on the provisions of Section 1145 of the United
States Bankruptcy Code.

In May 2003, in reliance on the exemptions from registration provided
by Section 4(2) of the Securities Act, we issued $200.0 million aggregate
principal amount of 8 1/4% Senior Notes due 2010 (the "Senior Notes") to
qualified institutional buyers pursuant to Rule 144A and Regulation S under the
Securities Act. We received proceeds of approximately $193.5 million after
placement agents' commission and other fees.

II-3

ITEM 16. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES.

EXHIBIT
NUMBER DESCRIPTION
------ -----------

1.1** Form of Underwriting Agreement

2.1 Agreement to Sublease, dated as of February 16, 2000, by and
between AirTouch Communications, Inc. and the other parties
named therein as Sublessors, California Tower, Inc. and the
Registrant. Incorporated by reference to exhibit no. 2.9 to
the Registrant's Form 10-K for the year ended December 31,
1999.

2.2 Amendment to the AirTouch Agreement, dated as of March 8,
2001. Incorporated by reference to exhibit no. 2.4 to the
Registrant's Form 10-Q for the quarterly period ended March
31, 2001.

2.3 Agreement to Sublease, dated as of August 25, 2000, by and
among SBC Wireless, Inc. and certain of its affiliates, the
Registrant, and Southern Towers, Inc. (the "SBC Agreement").
Incorporated by reference to exhibit no. 10.1 to the
Registrant's Form 8-K dated August 25, 2000 and filed August
31, 2000.

2.4 Amendment No. 1 to the SBC Agreement, dated 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.

2.5 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.

2.6 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.

2.7 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.

2.8 SpectraSite Newco Purchase Agreement, dated as of May 15,
2002, by and among Cingular Wireless LLC ("Cingular"), the
Registrant, Southern Towers, Inc., SpectraSite Communications,
Inc. and CA/NV Tower Holdings, LLC. Incorporated by reference
to exhibit no. 10.6 to the Registrant's Form 8-K dated May 22,
2002.

2.9 November Agreement, dated as of November 14, 2002, by and
among Cingular Wireless LLC ("Cingular"), the Registrant,
Southern Towers, Inc. and CA/NV Tower Holdings, LLC.
Incorporated by reference to exhibit no. 10.1 to the
Registrant's Form 8-K dated November 19, 2002.

2.10 Amended and Restated Consent and Modification, dated as of
November 14, 2002, by and among Southern Towers, Inc., CA/NV
Tower Holdings, LLC, SBC Tower Holdings LLC, the Registrant
and SBC Wireless LLC. Incorporated by reference to exhibit no.
10.2 to the Registrant's Form 8-K dated November 19, 2002.

2.11 Amended and Restated Unwind Side Letter, dated as of November
14, 2002, by and among Cingular, SBC Wireless LLC, SBC Tower
Holdings LLC, the Registrant, Southern Towers, Inc. and
SpectraSite Communications, Inc. Incorporated by reference to
exhibit no. 10.3 to the Registrant's Form 8-K dated November
19, 2002.

II-4

EXHIBIT
NUMBER DESCRIPTION
------ -----------

2.12 Proposed Plan of Reorganization of the Registrant under
chapter 11 of the Bankruptcy Code. Incorporated by reference
to exhibit no. 2.1 to the Registrant's Form 8-K dated November
19, 2002.

3.1 Third Amended and Restated Certificate of Incorporation of the
Registrant. Incorporated by reference to exhibit no. 2.1 to
the Registrant's Form 8-K dated February 11, 2003.

3.2 Second Amended and Restated By-laws of the Registrant.
Incorporated by reference to exhibit no. 2.2 to the
Registrant's Form 8-K dated February 11, 2003.

4.1 Indenture, dated as of May 21, 2003, by and between the
Registrant and The Bank of New York. Incorporated by reference
to exhibit no. 4.1 to the registration statement on Form S-4
of the Registrant, file no. 333-106118.

4.2 Registration Rights Agreement, dated as of May 21, 2003, by
and among the Registrant, Lehman Brothers Inc., Citigroup
Global Markets Inc., CIBC World Markets Corp., BMO Nesbitt
Burns Corp., Credit Suisse First Boston LLC, and TD Securities
(USA) Inc. Incorporated by reference to exhibit no. 4.2 to the
registration statement on Form S-4 of the Registrant, file no.
333-106118.

4.3* Specimen Stock Certificate.

5.1** Opinion of Paul, Weiss, Rifkind, Wharton & Garrison LLP as to
legality of the common stock.

10.1 Employment Agreement, dated as of February 10, 2003, by and
among the Registrant, SpectraSite Communications, Inc. and
Stephen H. Clark. Incorporated by reference to exhibit no.
10.1 to the Registrant's Form 8-K dated February 11, 2003.

10.2 Employment Agreement, dated as of February 10, 2003, by and
among the Registrant, SpectraSite Communications, Inc. and
David P. Tomick. Incorporated by reference to exhibit no. 10.2
to the Registrant's Form 8-K dated February 11, 2003.

10.4 Employment Agreement, dated as of February 10, 2003, by and
among the Registrant, SpectraSite Communications, Inc. and
Timothy G. Biltz. Incorporated by reference to exhibit no.
10.3 to the Registrant's Form 8-K dated February 11, 2003.

10.5 Credit Agreement, dated as of February 22, 2001, by and among
SpectraSite Communications, Inc., as Borrower; the Registrant,
as a Guarantor; CIBC World Markets Corp. and Credit Suisse
First Boston, as Joint Lead Arrangers and Bookrunners; CIBC
World Markets Corp., Credit Suisse First Boston, Bank Of
Montreal, Chicago Branch and TD Securities (USA) Inc., as
Arrangers; Credit Suisse First Boston, as Syndication Agent;
Bank Of Montreal, Chicago Branch and TD Securities (USA) Inc.,
as Co-Documentation Agents; Canadian Imperial Bank Of
Commerce, as Administrative Agent and Collateral Agent; and
the other credit parties party thereto (the "Credit
Agreement"). Incorporated by reference to exhibit no. 10.6 to
the Registrant's Form 10-K for the year ended December 31,
2000.

10.6 Amendment No. 1 to the Credit Agreement, dated October 31,
2001. Incorporated by reference to exhibit no. 10.7 to the
Registrant's Form 10-K for the year ended December 31, 2001.

II-5

EXHIBIT
NUMBER DESCRIPTION
------ -----------

10.7 Amendment No. 2 to the Credit Agreement, dated August 14,
2002. Incorporated by reference to exhibit no. 10.4 to the
Registrant's Form 10-Q for the quarterly period ended
September 30, 2002.

10.8 Amendment No. 3 to the Credit Agreement, dated May 15, 2003,
by and among SpectraSite Communications, Inc., as Borrower;
the Registrant, as a Guarantor; CIBC World Markets Corp. and
Credit Suisse First Boston, as Joint Lead Arrangers and
Bookrunners; CIBC World Markets Corp., Credit Suisse First
Boston, Bank of Montreal, Chicago Branch and TD Securities
(USA) Inc., as Arrangers; Credit Suisse First Boston, as
Syndication Agent; Bank of Montreal, Chicago Branch and TD
Securities (USA) Inc., as Co-Documentation Agents; Canadian
Imperial Bank of Commerce, as Administrative Agent and
Collateral Agent; and the other credit parties thereto.
Incorporated by reference to exhibit no. 10.1 to the
Registrant's Form 8-K dated May 21, 2003.

10.9 2003 Equity Incentive Plan of the Registrant. Incorporated by
reference to exhibit no. 10.6 to the Registrant's Form 8-K
dated February 11, 2003.

10.10 Security & Subordination Agreement, dated as of April 20,1999,
with Nextel Communications, Inc. ("Nextel"). Incorporated by
reference to exhibit no. 10.32 to the Registrant's
registration statement on Form S-4, file no. 333-67043.

10.11 Master Site Commitment Agreement, dated as of April 20, 1999,
with Nextel. Incorporated by reference to exhibit no. 10.33 to
the Registrant's registration statement on Form S-4, file no.
333-67043.

10.12 Master Site Lease Agreement, dated as of April 20, 1999, with
Nextel. Incorporated by reference to exhibit no. 10.34 to the
Registrant's registration statement on Form S-4, file no.
333-67043.

10.13 Lease and Sublease, dated as of December 14, 2000, by and
among SBC Tower Holdings LLC, for itself and as agent for
certain affiliates of SBC, Southern Towers, Inc. and SBC
Wireless, LLC and the Registrant, as guarantors. Incorporated
by reference to exhibit no. 10.2 to the Registrant's Form 10-Q
for the quarterly period ended March 31, 2001.

10.14 Executive Severance Plans of the Registrant. Incorporated by
reference to exhibit no. 10.17 to the Registrant's Form 10-K
for the year ended December 31, 2001.

10.15 Amendment to Severance Plan B of the Registrant. Incorporated
by reference to exhibit no. 10.14 to the Registrant's Form
10-K for the year ended December 31, 2002.

10.16 Registration Rights Agreement, dated as of February 10, 2003,
by and among the Registrant and the Holders (as defined
therein). Incorporated by reference to exhibit no. 10.5 to the
Registrant's Form 8-K dated February 11, 2003.

21.1 Subsidiaries of the Registrant. Incorporated by reference to
exhibit no. 21.1 to the Registrant's Form 10-K for the year
ended December 31, 2002.

23.1* Consent of Ernst & Young LLP.

23.2** Consent of Paul, Weiss, Rifkind, Wharton & Garrison LLP
(included in Exhibit 5.1 to this Registration Statement).

II-6

EXHIBIT
NUMBER DESCRIPTION
------ -----------

24* Powers of Attorney (included on signature pages of this Part
II).

------------------------
* Filed herewith.

** To be filed by amendment.

II-7

ITEM 17. UNDERTAKINGS.

(a) The undersigned registrant hereby undertakes:

(1) That, for purposes of determining any liability under
the Securities Act of 1933, the information omitted from the form of prospectus
filed as part of this registration statement in reliance upon Rule 430A and
contained in a form of prospectus filed by the registrant pursuant to Rule
424(b)(1) or (4) or 497(h) under the Securities Act shall be deemed to be part
of this registration statement as of the time it was declared effective.

(2) That, for the purpose of determining any liability
under the Securities Act of 1933, each post-effective amendment that contains a
form of prospectus shall be deemed to be a new registration statement relating
to the securities offered therein, and the offering of such securities at that
time shall be deemed to be the initial bona fide offering thereof.

(b) Insofar as indemnification for liabilities arising under the
Securities Act of 1933 may be permitted to directors, officers and controlling
persons of the registrant pursuant to the foregoing provisions, or otherwise,
the registrant has been advised that in the opinion of the Securities and
Exchange Commission such indemnification is against public policy as expressed
in the Act and is, therefore, unenforceable. In the event that a claim for
indemnification against such liabilities (other than the payment by the
registrant of expenses incurred or paid by a director, officer or controlling
person of the registrant in the successful defense of any action, suit or
proceeding) is asserted by such director, officer or controlling person in
connection with the securities being registered, the registrant will, unless in
the opinion of its counsel the matter has been settled by controlling precedent,
submit to a court of appropriate jurisdiction the question whether such
indemnification by it is against public policy as expressed in the Act and will
be governed by the final adjudication of such issue.

II-8

SIGNATURES

Pursuant to the requirements of the Securities Act of 1933, the
registrant duly caused this registration statement to be signed on its behalf by
the undersigned, thereunto duly authorized, in the City of Cary, State of North
Carolina, on July 17, 2003.

SPECTRASITE, INC.

By: /s/ Stephen H. Clark
---------------------------------------
Stephen H. Clark
President and Chief Executive Officer

POWER OF ATTORNEY

KNOW ALL PERSONS BY THESE PRESENTS, that each individual whose
signature appears below hereby constitutes and appoints each of Stephen H. Clark
and David P. Tomick, acting singly, his true and lawful agent, proxy and
attorney-in-fact, with full power of substitution and resubstitution, for him
and in his name, place and stead, in any and all capacities, to (i) act on, sign
and file with the Securities and Exchange Commission any and all amendments
(including post-effective amendments) to this registration statement together
with all schedules and exhibits thereto and any subsequent registration
statement filed pursuant to Rule 462(b) under the Securities Act of 1933, as
amended, together with all schedules and exhibits thereto, (ii) act on, sign and
file such certificates, instruments, agreements and other documents as may be
necessary or appropriate in connection therewith, (iii) act on and file any
supplement to any prospectus included in this registration statement or any such
amendment or any subsequent registration statement filed pursuant to Rule 462(b)
under the Securities Act of 1933, as amended, and (iv) take any and all actions
which may be necessary or appropriate in connection therewith, granting unto
such agents, proxies and attorneys-in-fact full power and authority to do and
perform each and every act and thing necessary or appropriate to be done, as
fully for all intents and purposes as he might or could do in person, hereby
approving, ratifying and confirming all that such agents, proxies and
attorneys-in-fact or any of their substitutes may lawfully do or cause to be
done by virtue thereof.

Pursuant to the requirements of the Securities Act of 1933, this
registration statement has been signed on July 17, 2003, by the following
persons in the capacities indicated.

SIGNATURE TITLE
--------- -----

/s/ Stephen H. Clark President, Chief Executive Officer and
----------------------------- Chairman of the Board of Directors
Stephen H. Clark (Principal Executive Officer)

/s/ David P. Tomick Executive Vice President and Chief
----------------------------- Financial Officer (Principal
David P. Tomick Financial Officer)

/s/ Gabriela Gonzalez Senior Vice President and Corporate
----------------------------- Controller (Principal Accounting
Gabriela Gonzalez Officer)

/s/ Paul M. Albert, Jr.
-----------------------------
Paul M. Albert, Jr. Director

/s/ Gary S. Howard
-----------------------------
Gary S. Howard Director

/s/ Robert Katz
-----------------------------
Robert Katz Director

/s/ Richard Masson
-----------------------------
Richard Masson Director

II-9

EXHIBIT INDEX

EXHIBIT
NUMBER DESCRIPTION
------ -----------

1.1** Form of Underwriting Agreement

2.2 Amendment to the AirTouch Agreement, dated as of March 8,
2001. Incorporated by reference to exhibit no. 2.4 to the
Registrant's Form 10-Q for the quarterly period ended March
31, 2001.

2.4 Amendment No. 1 to the SBC Agreement, dated 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.

2.5 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.

2.6 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.

2.7 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.

2.12 Proposed Plan of Reorganization of the Registrant under
chapter 11 of the Bankruptcy Code. Incorporated by reference
to exhibit no. 2.1 to the Registrant's Form 8-K dated November
19, 2002.

II-10

EXHIBIT
NUMBER DESCRIPTION
------ -----------

3.1 Third Amended and Restated Certificate of Incorporation of the
Registrant. Incorporated by reference to exhibit no. 2.1 to
the Registrant's Form 8-K dated February 11, 2003.

3.2 Second Amended and Restated By-laws of the Registrant.
Incorporated by reference to exhibit no. 2.2 to the
Registrant's Form 8-K dated February 11, 2003.

4.3* Specimen Stock Certificate.

5.1** Opinion of Paul, Weiss, Rifkind, Wharton & Garrison LLP as to
legality of the common stock.

10.6 Amendment No. 1 to the Credit Agreement, dated October 31,
2001. Incorporated by reference to exhibit no. 10.7 to the
Registrant's Form 10-K for the year ended December 31, 2001.

10.7 Amendment No. 2 to the Credit Agreement, dated August 14,
2002. Incorporated by reference to exhibit no. 10.4 to the
Registrant's Form 10-Q for the quarterly period ended
September 30, 2002.

II-11

EXHIBIT
NUMBER DESCRIPTION
------ -----------

10.9 2003 Equity Incentive Plan of the Registrant. Incorporated by
reference to exhibit no. 10.6 to the Registrant's Form 8-K
dated February 11, 2003.

10.12 Master Site Lease Agreement, dated as of April 20, 1999, with
Nextel. Incorporated by reference to exhibit no. 10.34 to the
Registrant's registration statement on Form S-4, file no.
333-67043.

10.14 Executive Severance Plans of the Registrant. Incorporated by
reference to exhibit no. 10.17 to the Registrant's Form 10-K
for the year ended December 31, 2001.

10.15 Amendment to Severance Plan B of the Registrant. Incorporated
by reference to exhibit no. 10.14 to the Registrant's Form
10-K for the year ended December 31, 2002.

21.1 Subsidiaries of the Registrant. Incorporated by reference to
exhibit no. 21.1 to the Registrant's Form 10-K for the year
ended December 31, 2002.

23.1* Consent of Ernst & Young LLP.

23.2** Consent of Paul, Weiss, Rifkind, Wharton & Garrison LLP
(included in Exhibit 5.1 to this Registration Statement).

24* Powers of Attorney (included on signature pages of this Part
II).

------------------------
* Filed herewith.

** To be filed by amendment.

II-12