Back to GetFilings.com

Table of Contents

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549

FORM 10-K

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

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

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

          The aggregate market value of the voting stock held by non-affiliates of the Registrant was approximately $61.0 million as of June 28, 2002. 

          The number of shares outstanding of the Registrant’s common stock (as of March 14, 2003):  

Class A common stock - 45,670,043 shares
Class B common stock - 5,455,595 shares

Documents Incorporated By Reference

   Portions of the Registrant’s definitive proxy statement for its 2003 annual meeting of shareholders, which proxy statement will be filed no later than 120 days after the close of the Registrant’s fiscal year ended December 31, 2002, are hereby incorporated by reference in Part III of this Annual Report on Form 10-K.

Table of Contents

PART I

ITEM 1.    BUSINESS

General

          We are a leading independent owner and operator of wireless communications towers in the continental United States, Puerto Rico and the U.S. Virgin Islands.  We generate revenues from our two primary businesses, site leasing and site development. In our site leasing business, we lease antenna space on towers and other structures that we own or manage for others. The towers that we own have either been built by us at the request of a wireless carrier or built or acquired based on our own initiative.  As of December 31, 2002, we owned or managed 3,877 towers.  In our site development business, we offer wireless service providers assistance in developing their own networks, including designing a network with friendly site identification, acquiring locations to place their antennas and transmission equipment, obtaining zoning approvals, building towers when necessary and installing and maintaining their antennas and transmission equipment. Since our founding in 1989, we have participated in the development of more than 20,000 antenna sites in 49 of the 51 major wireless markets in the United States.

Recent Developments

          As a result of certain estimates and our expectations that we will not comply with one or more of the financial covenants of our senior credit facility in 2003, the auditor’s opinion on our 2002 consolidated financial statements calls attention to substantial doubts about our ability to continue as a going concern through 2003.

          On March 17, 2003 certain of our subsidiaries entered into a definitive agreement with AAT Communications Corp. (“AAT Communications”) to sell 679 towers or, if AAT Communications elects to purchase an additional 122 towers, an aggregate of 801 towers, which represent substantially all of our towers in the western two-thirds of the U.S (the “AAT Transaction”).  Gross proceeds from the sale are anticipated to be $160.0 million if 679 towers are sold, or $203.0 million if 801 towers are sold, subject to adjustment in certain circumstances.  The AAT Transaction is expected to close in stages commencing on May 9, 2003 and ending on September 30, 2003.  We intend to use substantially all of the proceeds, net of anticipated transaction costs of approximately $5.0 million, to reduce indebtedness.  Upon consummation of the complete AAT Transaction, we will own 3,076 towers, substantially all of which will be in the eastern third of the United States. 

          We entered into the AAT Transaction to address our anticipated non-compliance with certain financial covenants under our senior credit facility commencing in 2003 and to reduce our significant level of indebtedness and the risks associated with such indebtedness.  The sale is subject to a number of conditions, including an amendment to our senior credit facility.  We anticipate that the amendment to our senior credit facility would, among other things, (1) waive any default that arises as a result of receiving an audit opinion with a “going concern” qualification, (2) modify the financial covenants to levels that we believe are better aligned with our site leasing business and can be satisfied during 2003 and beyond and (3) permit certain actions that are part of the AAT Transaction.  We believe that the AAT Transaction, in conjunction with the amendment to the senior credit facility, will eliminate the issues that gave rise to the “going concern” qualification from our auditors.  Based on our current estimates of wireless carrier activity, we believe that subsequent to the successful sale of either 679 or 801 towers, and the amendment to the senior credit facility, we will have sufficient liquidity to achieve positive free cash flow.

Company Services

          We provide our services on a local basis, through regional offices, territory offices and project offices, which are opened and closed on a project-by-project basis. Operationally, we are divided into regions throughout the United States, run by regional vice presidents. Each region is divided into sub-regions run by general managers and we have further divided each sub-region into geographic territories run by local managers. Within each manager’s geographic area of responsibility, he or she is responsible for all operations, including hiring employees and opening or closing project offices, and a substantial portion of the sales in such area.

          Our executive, corporate development, accounting, finance, human resources, legal and regulatory, information technology departments, site administration personnel, and our network operations center are located in our headquarters in Boca Raton, Florida. We also have in our Boca Raton office certain sales, new tower build support, and tower maintenance personnel.

Site Leasing Services

          In 1997 we began aggressively expanding our site leasing business by capitalizing on our nationally recognized site development experience and strong relationships with wireless service providers to take advantage of the trends toward

2

Table of Contents

co-location, which is the placement of multiple antennas on one tower or other structure, and independent tower ownership. We believe our towers have significant capacity to accommodate additional tenants with minimal incremental costs. Additionally, due to the relatively young age and mix of our tower portfolio we believe future expenditures required to maintain these towers will be minimal.

          The following chart shows the number of towers we built for our own account, the number of towers we acquired and the number of tenants at year-end on our towers, for the periods indicated:

          At December 31, 2002, our same tower revenue growth on the 3,734 towers we owned as of December 31, 2001 was 16%, and our same tower cash flow growth on these 3,734 towers was 20% based on tenant leases signed and annualized lease amounts in effect as of December 31, 2002 and 2001.

          Our site leasing revenue comes from a variety of wireless carrier tenants, including AT&T Wireless, Cingular, Nextel, Sprint PCS, T-Mobile, and Verizon.  Site leasing revenue was $139.6 million for the year ended December 31, 2002 and $103.2 million for the year ended December 31, 2001. We believe that over the long term our site leasing revenues will continue to grow as wireless service providers continue to lease antenna space on our towers.

          Our primary focus is the leasing of antenna space on our multi-tenant towers to a variety of wireless service providers under long-term lease contracts. We lease antenna space on:

          A significant number of our towers were built under our build-to-suit program, through which we built towers for a wireless service provider on a location of their direction. We retained ownership of the tower and the exclusive right to co-locate additional tenants on the tower. Many wireless service providers chose the build-to-suit option as an alternative to owning the towers themselves. Our build-to-suit sites came from a variety of wireless carriers, including Alamosa PCS, AT&T Wireless, Cingular, Horizon PCS, Sprint PCS, Triton PCS and T-Mobile.

          To help maximize the revenue and profit we earn from our capital investment in the towers we own, we provide services at our tower locations beyond the leasing of antenna space. The services we provide, or may provide in the future, include generator provisioning, antenna installation, equipment installation, maintenance, and backhaul, which is the transport of the wireless signals transmitted or received by an antenna to a carrier’s network. Some of these services are recurring in nature, and are contracted for by a wireless carrier or other user in a manner similar to the way they lease antenna space.

          In February 2002, we announced the reduction of our capital expenditures for new tower development and acquisition activities.  Under this plan, we suspended any material new investment for additional towers, among other

3

Table of Contents

actions.  If the AAT Transaction successfully closes, we will further reduce our tower portfolio by at least 679 towers and a maximum of 801 towers.  We do not anticipate making any material additions to our tower portfolio in 2003. 

Site Development Services

          Our site development business consists of two segments, site development consulting and site development construction, through which we provide wireless service providers a full range of end-to-end services. In the consulting segment of our site development business, we offer clients the following services: (1) network pre-design; (2) site audits; (3) identification of potential locations for towers and antennas; (4) support in buying or leasing of the location; and (5) assistance in obtaining zoning approvals and permits. In the construction segment of our site development business we provide a number of services, including, but not limited to the following: (1) tower and related site construction; (2) antenna installation; and (3) radio equipment installation, commissioning and maintenance.  We have capitalized on our leadership position in the site development business and our strong relationships with wireless service providers to build and acquire towers in locations that we believe are attractive to wireless service providers.

          Our site development customers currently comprise many of the major wireless communications and services companies, including AT&T Wireless, Bechtel Corporation, Cingular, Nextel, Sprint PCS, T-Mobile and Verizon.  Site development revenue was $125.0 million for the year ended December 31, 2002 and $139.7 million for the year ended December 31, 2001.

          Our site development revenues and profit margins decreased significantly during the year ended December 31, 2002.  This decrease was primarily attributable to the substantial decline in capital expenditures by wireless carriers, particularly for our site development construction services, which adversely affected our volume of activity and our pricing levels.  During 2003, we expect these trends to continue.  Consequently, we anticipate continued decline in our site development revenues and profit margins.

Business Strategy

          Our primary strategy is to capture the maximum benefits from our position as a leading owner and operator of wireless communications towers.  Key elements of our strategy include:

          Maximizing Use of Tower Capacity.    We believe that many of our towers have significant capacity available for additional antennae and that increased use of our owned towers can be achieved at a low incremental cost. We generally have constructed our towers to accommodate multiple tenants in addition to the anchor tenant, and a substantial majority of our towers are high capacity lattice or guyed towers. We actively market space on our own towers through our internal sales force.

          Geographically Focusing our Tower Ownership.    We have decided to focus our tower ownership geographically to the Eastern U.S.  Upon consummation of the AAT Transaction, substantially all of our remaining towers will be located in the eastern third of the U.S.  We believe that by focusing our site leasing activities in a smaller geographic area, where we have such a high concentration of our towers, we will improve our operating efficiencies and reduce our overhead expenses.

          Executing on a Local Basis.    We believe that substantially all of what we do is best done locally, given the nature of towers as location specific communications facilities. We believe our customers make decisions locally. We believe that to be successful in tower leasing, zoning and construction, we must have a strong local presence in the markets we serve.

          Capitalizing on our Management Experience.    Our management team has extensive experience in site leasing and site development services. Management believes that its industry expertise and strong relationships with wireless carriers will allow us to expand our position as a leading provider of site development services.

          Building on Strong Relationships with Major Wireless Service Providers.    We are well positioned to be a preferred partner in tower space leasing because of our strong relationships with wireless service and other telecommunications providers and our proven operating experience.  Additionally, we have a broad national field organization that allows us to identify and participate in site development projects across the country and that gives us knowledge of local markets and enhances our customer relationships.   

          Capturing Other Revenues That Flow From our Tower Ownership.    Tenants who lease antenna space on our towers need a variety of additional services in connection with their operations at the tower site. These services include installation, maintenance and upgrading of radio transmission equipment, antennas, cabling and other connection equipment, electricity, backhaul (which is provided generally by telephone lines or a microwave antenna network),

4

Table of Contents

equipment shelters, data collection and network monitoring. Tenants often outsource the performance of some or all of these required services to third parties, including us. Because of our ownership of the tower, our control of the tower site and our experience and capabilities in providing these types of services, we believe that we are well positioned and intend to perform more of these services and capture the related revenue.

Customers

          Since commencing operations, we have performed site leasing and site development services for many of the largest wireless service providers. The majority of our contracts have been for PCS broadband, ESMR and cellular customers. We also serve wireless data and Internet, paging, PCS narrowband, SMR, multi-channel multi-point distribution service, or MMDS, and multi-point distribution service, or MDS, wireless providers. In both our site development and site leasing businesses, we work with large national providers and smaller local, regional or private operators.  We depend on a relatively small number of customers for our site development and site leasing revenues.  For the year ended December 31, 2002, Cingular provided 14.6% and Bechtel Corporation (contractor for AT&T Wireless and Cingular) provided 29.4% of our site development revenues.  For the year ended December 31, 2001, Nextel provided 11.6%, Sprint PCS provided 11.5% and Bechtel Corporation provided 10.9% of our site development revenues.  In addition, for the year ended December 31, 2002, AT&T Wireless provided 15.7% of our site leasing revenues.  For the year ended December 31, 2001, Nextel provided 10.4% of our site leasing revenues.

          During the past two years, we provided services for a number of customers, including:

Sales and Marketing

          Our sales and marketing goals are:

          We approach sales on a company-wide basis, involving many of our employees. We have a dedicated sales force that is supplemented by members of our executive management team. Our dedicated salespeople are based regionally as well as in the corporate office. We also rely on our regional vice presidents, general managers, local managers and other operations personnel to sell our services and cultivate customers. Our strategy is to delegate sales efforts to those employees of ours who have the best relationships with the wireless service providers. Most wireless service providers have national corporate headquarters with regional and local offices. We believe that providers at the regional and local levels make most decisions for site development and site leasing services with input from their corporate headquarters. Our sales representatives work with provider representatives at the regional and local levels and at the national level when appropriate. Our sales staff compensation is heavily weighted to incentive-based goals and measurements. A substantial number of our operations personnel have sales-based incentive components in their compensation plans.

5

Table of Contents

          In addition to our marketing and sales staff, we rely upon our executive and operations personnel on the regional and territory office levels to identify sales opportunities within existing customer accounts.

          Our primary marketing and sales support is centralized and directed from our headquarters office in Boca Raton, Florida and is supplemented by our regional and territory offices. We have a full-time staff dedicated to our marketing efforts. The marketing and sales support staff is charged with implementing our marketing strategies, prospecting and producing sales presentation materials and proposals.

Competition

          We compete with:

          Wireless service providers that own and operate their own tower networks generally are substantially larger and have greater financial resources than we do. We believe that tower location and capacity, quality of service, density within a geographic market and to a lesser extent price historically have been and will continue to be the most significant competitive factors affecting the site leasing business.

          Our primary competitors for our site leasing activities are four large independent tower companies, American Tower Corporation, Crown Castle International Corp., Pinnacle Holdings Inc. and SpectraSite, Inc., and a large number of smaller independent tower owners.  In addition, we compete with AT&T Wireless, Sprint PCS and other wireless service providers who currently market excess space on their owned towers to other wireless service providers.

          We believe that the majority of our competitors in the site development business operate within local market areas exclusively, while some firms appear to offer their services nationally, including American Tower Corporation, AFL, Bechtel Corporation, Black & Veach, General Dynamics, and Westower.  The market includes participants from a variety of market segments offering individual, or combinations of, competing services. The field of competitors includes site development consultants, zoning consultants, real estate firms, right-of-way consulting firms, construction companies, tower owners/managers, radio frequency engineering consultants, telecommunications equipment vendors, which provide end-to-end site development services through multiple subcontractors, and providers’ internal staff. We believe that providers base their decisions for site development services on a number of criteria, including a company’s experience, track record, local reputation, price and time for completion of a project. We believe that we compete favorably in these areas.

Employees

          As of February 28, 2003, we had approximately 650 employees, none of whom is represented by a collective bargaining agreement. We consider our employee relations to be good.

Regulatory and Environmental Matters

          Federal Regulations.    Both the Federal Communications Commission (“FCC”) and the Federal Aviation Administration (“FAA”) regulate towers used for wireless communications. These regulations govern the construction and marking and painting of towers and may, depending on the characteristics of particular towers, require prior approval and registration of towers. Wireless communications devices operating on towers are separately regulated and independently licensed based upon the particular frequency or frequency band used.

          Pursuant to the requirements of the Communications Act of 1934, as amended, the FCC, in conjunction with the FAA, has developed standards to consider proposals for new or modified towers. These standards mandate that the FCC and the FAA consider the height of proposed tower structures, the relationship of the structure to existing natural or man-made obstructions and the proximity of the towers to runways and airports. Proposals to construct or to modify existing towers above certain heights must be reviewed by the FAA to ensure the structure will not present a hazard to air navigation. The FAA may condition its issuance of a no-hazard determination upon compliance with specified lighting, marking and/or painting requirements. Towers that meet certain height and location criteria must also be

6

Table of Contents

registered with the FCC. A tower that requires FAA clearance will not be registered by the FCC until it is cleared by the FAA. Upon registration, the FCC may also require special lighting, marking and/or painting requirements. Owners of wireless transmission towers may have an obligation to maintain marking, painting and lighting to conform to FAA and FCC standards. Tower owners also bear the responsibility of monitoring any lighting systems and notifying the FAA of any tower lighting outage or malfunction. In addition, any applicant for an FCC antenna structure registration must certify that, consistent with the Anti-Drug Abuse Act of 1988, neither the applicant nor its principals are subject to a denial of Federal benefits because of a conviction for the possession or distribution of a controlled substance. We generally indemnify our customers against any failure to comply with applicable regulatory standards. Failure to comply with the applicable requirements may lead to civil penalties.

          The Telecommunications Act of 1996 amended the Communications Act of 1934 by preserving state and local zoning authorities’ jurisdiction over the construction, modification and placement of towers. The law, however, limits local zoning authority by prohibiting any action that would (1) discriminate between different providers of personal wireless services or (2) ban altogether the construction, modification or placement of radio communication towers. Finally, the Telecommunications Act of 1996 requires the federal government to help licensees for 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.

          Owners and operators of towers may be subject to, and therefore must comply with, environmental laws. Any licensed radio facility on a tower is subject to environmental review pursuant to 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. These regulations place responsibility on each applicant to investigate any potential environmental effects of operations and to disclose any potential significant effects on the environment in an environmental assessment prior to constructing a tower. In the event the FCC determines the 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 assessment, which will be subject to public comment. This process could significantly delay the registration of a particular tower.

          As an owner and operator of real property, we are subject to certain environmental laws that impose strict, joint and several liability for the cleanup of on-site or off-site contamination and related personal or property damage. We are also subject to certain environmental laws that govern tower placement, including pre-construction environmental studies. Operators of towers must also take into consideration certain RF emissions regulations that impose a variety of procedural and operating requirements. The potential connection between RF emissions and certain negative health effects, including some forms of cancer, has been the subject of substantial study by the scientific community in recent years. We believe that we are in substantial compliance with and we have no material liability under any applicable environmental laws. These costs of compliance with existing or future environmental laws and liability related thereto may have a material adverse effect on our prospects, financial condition or results of operations.

          State and Local Regulations.    Most states regulate certain aspects of real estate acquisition and leasing activities and construction activities. Where required, we conduct the site acquisition portions of our site development services business through licensed real estate brokers’ agents, who may be our employees or hired as independent contractors, and conduct the construction portions of our site development services through licensed contractors, who may be our employees or independent contractors. Local regulations include city and other local ordinances, zoning restrictions and restrictive covenants imposed by community developers. These regulations vary greatly, but typically require tower owners to obtain approval from local officials or community standards organizations prior to tower construction and establish regulations regarding maintenance and removal of towers.  In addition, many local zoning authorities require tower owners to post bonds or cash collateral to secure their removal obligations.  Local zoning authorities generally have been unreceptive to construction of new transmission towers in their communities because of the height and visibility of the towers, and have, in some instances, instituted moratoria. 

Backlog

          Our backlog for site development services was $29.2 million as of December 31, 2002 as compared to $58.8 million as of December 31, 2001.  We had no backlog for pending tower acquisitions as of December 31, 2002 as compared to 145 towers as of December 31, 2001.  Additionally, we had a backlog for 15 new tower builds as of December 31, 2002 as compared to 400 as of December 31, 2001.

Availability of Reports and Other Information

          Our corporate website is www.sbasite.com.  We make available, free of charge, access to our Annual Report on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K, Proxy Statement on Schedule 14A and

7

Table of Contents

amendments to those materials filed or furnished pursuant to Section 13(a) or 15(d) of the Securities and Exchange Act of 1934 on our website under “Investor Relations—SEC Filings,” as soon as reasonably practicable after we file electronically such material with, or furnish it to, the United States Securities and Exchange Commission (the “Commission”).  In addition, the Commission’s website is www.sec.gov.  The Commission makes available on this website, free of charge, reports, proxy and information statements, and other information regarding issuers, such as us, that file electronically with the Commission. Information on our website or the Commission’s website is not part of this document.

RISK FACTORS

          Our debt instruments contain restrictive covenants that could adversely affect our business.

          Our senior credit facility and the indentures governing our 10¼% senior notes and our 12% senior discount notes each contain certain restrictive covenants. Among other things, these covenants restrict our ability to incur additional indebtedness, sell assets for less than fair market value, pay dividends, redeem outstanding debt or engage in other restricted payments. If we fail to comply with these covenants, it could result in an event of default under one or all of these debt instruments.  The acceleration of amounts due under our senior credit facility will also cause a cross-default under both of our indentures.

          SBA Telecommunications, Inc. (“SBA Telecommunications”), our principal subsidiary which owns, directly or indirectly, all of the common stock of our other subsidiaries, is the borrower under our senior credit facility. The senior credit facility requires SBA Telecommunications to maintain specified financial ratios, including ratios regarding SBA Telecommunications’ consolidated debt coverage, debt service, cash interest expense and fixed charges for each quarter and satisfy certain financial condition tests including maintaining a minimum consolidated EBITDA (earnings before interest, taxes, depreciation, amortization, non-cash charges and unusual or non-recurring expenses).  The senior credit facility also contains affirmative and negative covenants which, among other things, require us to submit audited financial statements without a “going-concern” qualification in the audit opinion and restricts our ability to incur debt and liens, sell assets, commit to capital expenditures, enter into affiliate transactions or sale-leaseback transactions, and/or build towers without anchor tenants.  Our ability to meet these financial ratios and tests can be affected by events beyond our control, and we may not be able to do so.  A breach of any of these covenants, if not remedied within the specified period, could result in an event of default under the senior credit facility.  Based on declines that we have been experiencing in our site development business and that we believe will continue in 2003, we estimated that we would not be in compliance with one or more of the senior credit facility’s existing financial ratios or tests in 2003.

          As a result of these estimates and our expectations that we will not comply with one or more of the financial covenants of our senior credit facility in 2003, the auditor’s opinion on our 2002 consolidated financial statements calls attention to substantial doubts about our ability to continue as a going concern through 2003. 

          The issuance of this audit opinion with a “going-concern” qualification, if not remedied by April 30, 2003, would be an event of default under our senior credit facility.  Upon the occurrence of this, or any other event of default, our lenders can prevent us from borrowing any additional amounts under the senior credit facility.  In addition, upon the occurrence of any event of default, other than certain bankruptcy events, our senior credit facility lenders, by a majority vote, can elect to declare all amounts of principal outstanding under the senior credit facility, together with all accrued interest, to be immediately due and payable. The acceleration of amounts due under our senior credit facility would cause a cross-default in our 10¼% senior notes and our 12% senior discount notes, thereby permitting the acceleration of such indebtedness.  If the indebtedness under the senior credit facility and/or indebtedness under our 10¼% senior notes or 12% senior discount notes were to be accelerated, our current assets would not be sufficient to repay in full the indebtedness.  If we were unable to repay amounts that become due under the senior credit facility, our lenders could proceed against the collateral granted to them to secure that indebtedness. Substantially all of our assets are pledged as security under the senior credit facility.

          As part of our plan to addresss the anticipated non-compliance with these financial covenants, and to reduce our aggregate level of indebtedness, certain of our subsidiaries entered into a definitive agreement with AAT Communications to sell 679 towers or, if AAT Communications elects to purchase an additional 122 towers, an aggregate of 801 towers.  The gross proceeds from the sale are anticipated to be $160.0 million if 679 towers are sold, or $203.0 million if 801 towers are sold, subject to adjustment in certain circumstances.  However, the AAT Transaction is subject to a number of conditions, including an amendment to our senior credit facility.  We anticipate that the amendment to our senior credit facility would, among other things, (1) waive any default that arises as a result of receiving an audit opinion with a “going concern” qualification, (2) modify the financial covenants to levels that we believe are better aligned with our site leasing business and can be satisfied during 2003 and beyond and (3) permit

8

Table of Contents

certain actions that are part of the AAT Transaction.  We cannot assure you that we will be able to obtain these waivers and/or amendments, especially in light of the recent financial performance of the wireless telecommunications industry and us, or that if we obtain them, we will be able to comply with the new financial covenants in the future.  Nor can we assure you that even if we do receive the necessary amendment to our senior credit facility that the AAT Transaction will be consummated.

          A full discussion of the impact of these possible defaults and management’s plans to address the liquidity and other concerns that arise as a result of the possible defaults and our significant level of indebtedness is discussed below under the section entitled “Management’s Discussion and Analysis of Financial Condition and Results of Operations - Going Concern.”

          We may not be able to service our substantial indebtedness.

          As indicated below, we have and will continue to have a significant amount of indebtedness relative to our equity.

          Our substantial indebtedness could have important consequences to you. For example, it could:

          Our ability to service our debt obligations will depend on our future operating performance. Based on our outstanding debt as of December 31, 2002, we would require approximately $92.3 million of cash flow from operations (before net cash interest expenses) to discharge our cash interest and principal obligations for the twelve months ending December 31, 2003.  This amount is expected to increase in 2004 as our 12% senior discount notes first began to pay cash interest on March 1, 2003.  By comparison, for the twelve months ended December 31, 2002, we generated $57.1 million of cash flow from operations (before net cash interest expenses).  If we do not materially increase our cash flow in the future, we may not be able to meet our principal and interest payments on our debt obligations.  In order to manage our substantial amount of indebtedness, we may from time to time sell assets, issue equity, or repurchase, restructure or refinance some or all of our debt. We may not be able to effectuate any of these alternative strategies on satisfactory terms, if at all. The implementation of any of these alternative strategies may dilute our current shareholders, subject us to additional costs or restrictions on our ability to manage our business and could have a material adverse effect on our financial condition and growth strategy.

          Based on our current estimates, we may not have sufficient liquidity or cash flow from operations to repay the full principal amount of our 12% senior discount notes and/or our 10¼% senior notes upon their respective maturities.  Therefore, prior to the maturity of our notes we may be required to refinance and/or restructure some or all of our outstanding notes.  There can be no assurance that we will be able to refinance or restructure these notes on acceptable terms or at all.  If we were unable to refinance, restructure or otherwise repay the principal amount of these notes upon their maturity, we may need to sell assets, cease operations and/or file for protection under the bankruptcy laws.

          We pay interest on amounts outstanding under our senior credit facility at variable interest rates. We have in the past, and may again in the future, enter into interest rate swaps to effectively convert a portion of our debt from fixed to

9

Table of Contents

variable rates. Therefore, if interest rates were to increase, the amount of interest that we would have to pay would increase.

          We may be adversely affected by an economic slowdown.

          The significant general slowdown in the U.S. economy has negatively affected (1) the financial condition of wireless service providers, (2) the availability of capital, and the willingness of wireless service providers to utilize capital, to expand their networks and (3) may negatively affect the growth rate of consumer demand for wireless services.  We believe that the environment for continued expenditures by wireless service providers deteriorated throughout 2002 and has not materially improved.  Declining subscriber growth and prospects for positive cash flow by wireless service providers have adversely affected the access to and cost of capital for wireless service provides as evidenced by declines in the market value of both their debt and equity securities.  As a result of the economic slowdown, and the negative impact of such slowdown on the debt and equity markets, we have adjusted our business to significantly reduce and subsequently suspend any material new investment for new towers.

          We believe that if the capital markets conditions remain difficult for the telecommunications industry, wireless service providers will continue to choose to conserve capital and may not spend as much as originally anticipated.  If wireless carrier capital expenditures and their ability to access capital remains weak or deteriorates further, we believe our revenues and gross profit from the site development consulting and construction segments of our business, potentially the collectibility of our accounts receivable, and the valuation of certain of our long-lived assets may be negatively impacted.   Short term, variable capital markets conditions may adversely impact carrier demand for our tower space, and consequently our site leasing revenue and the ability of our customers to meet their obligations to us.

          We may not secure as many site leasing tenants as planned.

          If tenant demand for tower space decreases, we may not be able to successfully grow our site leasing business. This may have a material adverse effect on our strategy, revenue growth and our ability to satisfy our obligations. Our plan for the growth of our site leasing business largely depends on our management’s expectations and assumptions concerning future tenant demand for independently-owned towers. Tenant demand includes both the number of tenants and the lease rates they are willing to pay.

          Wireless service providers that own and operate their own towers and several of the independent tower companies generally are substantially larger and have greater financial resources than we do. 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.

          If our wireless service provider customers consolidate or merge with each other to a significant degree, our growth, our revenue and our ability to generate positive cash flow could be adversely affected.

          Significant consolidation among our wireless service provider customers may result in reduced capital expenditures in the aggregate because the existing networks of many wireless carriers overlap, as do their expansion plans.  Similar consequences might occur if wireless service providers engage in extensive sharing or roaming or resale arrangements as an alternative to leasing our antennae space.  In January 2003, the spectrum cap, which previously prohibited wireless carriers from owning more than 45 MHz of spectrum in any given geographical area, expired.  Some wireless carriers may be encouraged to consolidate with each other as a result of this regulatory change and as a means to strengthen their financial condition.  Demand for antennae space on communication sites may be adversely affected by consolidation of our wireless service provider customers. Economic conditions have resulted in the consolidation of several wireless service providers and this trend is likely to continue. To the extent that our customers consolidate, they may terminate any duplicative leases that they have on our towers and/or may not lease as many spaces on our towers in the future. This would adversely affect our growth, our revenue and our ability to generate positive cash flow.

          Wireless voice service providers frequently enter into roaming agreements with competitors allowing them to use another’s wireless communications facilities to accommodate customers who are out of range of their home provider’s services. Wireless voice service providers may view these roaming agreements as a superior alternative to leasing antenna space on communications sites owned or controlled by us or others. The proliferation of these roaming agreements could have a material adverse effect on our revenue.

10

Table of Contents

          If demand for wireless communication services decreases, our revenue will be adversely affected.

          Substantially all of our customers to date have been providers of wireless communication services or agents acting on behalf of wireless communication providers.  If demand for wireless communication services decreases, our revenue growth will be, and our revenue may be, adversely affected.  This could affect our ability to satisfy our obligations. Demand for both our site leasing and site development services is dependent on demand for communication sites from wireless service providers, which, in turn, is dependent on the demand for wireless services.  A slowdown in the growth of, or reduction in demand in, a particular wireless communication segment could adversely affect the demand for communication sites.  Most types of wireless services currently require ground-based network facilities, including communication sites for transmission and reception.  The extent to which wireless service providers lease these communication sites depends on a number of factors beyond our control, including:

          We depend on a relatively small number of customers for most of our revenue.

          We derive a significant portion of our revenue from a small number of customers that vary at any given time, particularly in the site development services side of our business.  The loss of any significant customer could have a material adverse effect on our revenue.

          Following is a list of significant customers and the percentage of total revenues derived from such customers:

          We also have client concentrations with respect to revenues in each of our financial reporting segments.  Of our total site development consulting revenue for the year ended December 31, 2002, the following two customers represented 63.8% of total revenue from this segment: Cingular represented 29.6% and Bechtel Corporation represented 34.2%.  Of our total site development construction revenue for the year ended December 31, 2002, one customer, Bechtel Corporation, represented 28.1% of such revenue.  Of our total site leasing revenue for the year ended December 31, 2002, one customer, AT&T Wireless, represented 15.7% of such revenue.

          Revenues from these clients are derived from numerous different site leasing contracts and site development contracts. Each site leasing contract relates to the lease of space at an individual tower site and is generally for an initial term of 5 years renewable for five 5-year periods at the option of the tenant.  Our site development customers engage us on a project-by-project basis, and a customer can generally terminate an assignment at any time without penalty. In addition, a customer’s need for site development services can decrease, and we may not be successful in establishing relationships with new customers. Moreover, our existing customers may not continue to engage us for additional projects.

11

Table of Contents

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

          Due to the long-term nature of our tenant leases, we, like others in the tower industry, are dependent on the continued financial strength of our tenants.  Wireless service providers often operate with substantial leverage, and financial problems for our customers could result in uncollected accounts receivable, in the loss of customers and the anticipated lease revenues, or in a reduced ability of these customers to finance expansion activities. During the past three years, a number of our site leasing customers have filed for bankruptcy including almost all of our paging customers. Although these bankruptcies have not yet had a material adverse effect on our business or revenues, pending bankruptcies and any future bankruptcies may have a material adverse effect on our business, revenues, and/or the collectibility of our accounts receivable.

          Our quarterly operating results fluctuate and therefore should not be considered indicative of our long-term results.

          The number of tenants we add to our towers and the demand for our site development services fluctuate from quarter to quarter and should not be considered as indicative of long-term results. Numerous factors cause these fluctuations, including:

          Although the demand for our services fluctuates, we incur significant fixed costs, such as maintaining a staff and office space in anticipation of future contracts. The timing of revenues is difficult to forecast because our sales cycle may be relatively long and may depend on factors such as the size and scope of assignments, budgetary cycles and pressures and general economic conditions. In addition, under lease terms typical in the tower industry, revenue generated by new tenant leases usually commences upon installation of the tenant’s equipment on the tower rather than upon execution of the lease, which can be 90 days or more after the execution of the lease.

          We are not profitable and expect to continue to incur losses.

          We are not profitable.  The following chart shows the net losses we incurred for the periods indicated:

          Our losses are principally due to significant interest expense and depreciation and amortization in each of the years 2002, 2001 and 2000, restructuring and other charges of $77.6 million and $24.4 million in 2002 and 2001, respectively, and an $80.6 million charge related to the cumulative effect of change in accounting principle in 2002 related to the adoption of SFAS No. 142.

          We expect to continue to have significant losses in 2003.  Interest expense and depreciation charges will continue to be substantial in 2003.  We also expect to incur additional restructuring expenses and to record an expense associated with the cumulative effect of a change in accounting principle related to the adoption of SFAS No. 143.  Furthermore, in connection with the anticipated sale of the 679 towers on May 9, 2003, we anticipate recognizing a loss of approximately $6.5 million.

12

Table of Contents

          As a result of these factors, we have incurred, and expect to continue to incur significant losses.

          Our business is subject to government regulations and changes in current or future regulations could harm our business.

          We are subject to federal, state and local regulation of our business. Both the FCC and the FAA regulate towers used for wireless communications and radio and television antennae. In addition, the FCC separately licenses and regulates wireless communication devices and television and radio stations operating from towers. Such regulations control construction, lighting, painting and marking of towers and may, depending on the characteristics of the tower, require registration of tower facilities. Certain proposals to construct new towers or to modify existing towers are reviewed by the FAA to ensure that the tower will not present a hazard to air navigation. Tower owners may have an obligation to mark or paint towers or install lighting to conform to FAA standards and to maintain such marking, painting and lighting. Tower owners may also bear the responsibility of notifying the FAA of any tower lighting failures. Failure to comply with existing or future applicable requirements may lead to civil penalties or other liabilities and may subject us to significant indemnification liability to our customers against any such failure to comply. In addition, new regulations may impose additional costly burdens on us, which may affect our revenues and cause delays in our growth.

          Local regulations, including municipal or local ordinances, zoning restrictions and restrictive covenants imposed by community developers, vary greatly, but typically require tower owners to obtain approval from local officials or community standards organizations prior to tower construction or modification.  Local regulations can delay, prevent, or increase the cost of new tower construction, co-locations, or site upgrade projects, thereby limiting our ability to respond to customer demand. In addition, new regulations may be adopted that increase delays or result in additional costs to us. These factors could have a material adverse effect on our future growth and operations.  

          Our towers are subject to damage from natural disasters.

          Our towers are subject to risks associated with natural disasters such as tornadoes, hurricanes and earthquakes. We maintain insurance to cover the estimated cost of replacing damaged towers, but these insurance policies are subject to loss limits and deductibles. We also maintain third party liability insurance to protect us in the event of an accident involving a tower. A tower accident for which we are uninsured or underinsured, or damage to a tower or group of towers, could require us to make significant capital expenditures and may have a material adverse effect on our operations or financial condition.

          Steven E. Bernstein controls the outcome of shareholder votes and therefore disinterested shareholders will not control many corporate governance matters.

          Steven E. Bernstein, our Chairman of the Board, controls 100% of the outstanding shares of Class B common stock. Our Class B common stock has the right to 10 votes for each share provided that the outstanding shares of Class B common stock represent more than 10% of the aggregate amount of Class A and Class B common stock outstanding. As of March 14, 2003, the Class B common stock represented 10.7% of the aggregate amount of common stock outstanding. As of March 14, 2003, Mr. Bernstein controlled approximately 55% of the total voting power of both classes of our common stock. As a result, Mr. Bernstein has the ability to control the outcome of all matters determined by a majority vote of our common shareholders when voting together as a single class. Consequently, disinterested shareholders will not be able to determine who is elected as a director or the outcome of other corporate governance matters subject to approval by the majority of the outstanding shares.

          The loss of the services of certain of our key senior executives may negatively affect our business.

          Our success depends to a significant extent upon performance and active participation of our key senior executives.  We cannot guarantee that we will be successful in retaining the services of these key senior executives.  We have employment agreements with Jeffrey A. Stoops, our President and Chief Executive Officer, Kurt L. Bagwell, our Senior Vice President and Chief Operating Officer, and Thomas P. Hunt, our Senior Vice President and General Counsel.  We do not have employment agreements with any of our other key senior executive officers.  If we were to lose any key senior executive we may not be able to find an appropriate replacement on a timely basis and our results of operations could be negatively affected. Our Chief Financial Officer resigned as of March 31, 2003 and we are currently seeking his replacement.

13

Table of Contents

          If we are unable to attract, retain or manage skilled employees it could have a material adverse effect on our business.

          Our business, particularly site development services, involves the delivery of professional services and is labor-intensive. The loss of a significant number of employees, our inability to hire a sufficient number of qualified employees or adequately develop and motivate the skilled employees we have hired could have a material adverse effect on our business. We compete with other wireless communications firms and other enterprises for employees with the skills required to perform our services. We cannot assure you that we will be able to attract and retain a sufficient number of highly-skilled employees in the future or that we will continue to be successful in training, retaining and motivating employees.

          Our dependence on our subsidiaries for cash flow may negatively affect our business.

          We are a holding company with no business operations of our own. Our dependence on our subsidiaries for cash flow may have a material adverse effect on our operations. Our only significant asset is, and is expected to be, the outstanding capital stock of our subsidiaries. We conduct, and expect to conduct, all of our business operations through our subsidiaries. Accordingly, our only source of cash to pay our obligations is distributions from our subsidiaries of their net earnings and cash flow. We currently expect that the earnings and cash flow of our subsidiaries will be retained and used by them in their operations, including servicing their debt obligations, except as necessary to be distributed to us to cover holding company expenses including interest payments on our 10¼% senior notes and 12% senior discount notes. Even if our subsidiaries determined to make a distribution to us, applicable state law and contractual restrictions, including dividend covenants contained in our senior credit facility, may restrict or prohibit these dividends or distributions.

          We may experience volatility in our stock price that could affect the value of your investment.

          The stock market has from time to time experienced significant price and volume fluctuations that have affected the market price for the common stock of companies. In the past, certain broad market fluctuations have been unrelated or disproportionate to the operating performance of these companies. Any significant fluctuations in the future might result in a decline in the market price of our Class A common stock.

          We have adopted anti-takeover provisions that could make it more difficult for a third party to acquire us.

          Provisions of our articles of incorporation, our bylaws and Florida law could make it more difficult for a third party to acquire us, even if doing so would be beneficial to our shareholders. During 2002, we adopted a shareholder rights agreement, which could make it considerably more difficult or costly for a person or group to acquire control of us in a transaction that our board of directors opposes. These provisions, alone or in combination with each other, may discourage transactions involving actual or potential changes of control, including transactions that otherwise could involve payment of a premium over prevailing market prices to holders of our Class A common stock, or could limit the ability of our shareholders to approve transactions that they may deem to be in their best interests.

          Our costs could increase and our revenues could decrease due to perceived health risks from radio frequency emissions, especially if such emissions are demonstrated to cause negative health effects.

          The government imposes requirements and other guidelines on our towers relating to radio frequency emissions. The potential connection between radio frequency emissions and certain negative health effects, including some forms of cancer, has been the subject of substantial study by the scientific community in recent years.  To date, the results of these studies have been inconclusive.  However, public perception of possible health risks associated with cellular and other wireless communications media could slow the growth of wireless companies, which could in turn slow our growth.  In particular, negative public perception of, and regulations regarding, these perceived health risks could slow the market acceptance of wireless communications services.

          If a connection between radio frequency emissions and possible negative health effects, including cancer, were demonstrated, we could be subject to numerous claims.  If we were subject to numerous claims relating to radio frequency emissions, even if such claims were not ultimately found to have merit, our operations, costs and revenues would be materially and adversely affected.

          New technologies may have a material adverse effect on our growth rate and results of operations.

          The emergence of new technologies could reduce the demand for space on our towers. This could have a material adverse effect on our growth rate and results of operations. For example, the FCC has granted license applications for several low-earth orbiting satellite systems that are intended to provide mobile voice and data services. These systems

14

Table of Contents

are highly capital intensive and mobile satellite systems could compete with land-based wireless communications systems. In addition, products are currently being developed which may permit multiple wireless carriers to use a single antenna, to share networks, or to increase the range and capacity of an antenna, which, if successful, could reduce the number of antenna needed by our customers.

ITEM 2.    PROPERTIES

          We are headquartered in Boca Raton, Florida, where we currently lease approximately 73,000 square feet of space. We have entered into long-term leases for regional and certain site development office locations where we expect our activities to be longer-term. We open and close project offices from time to time in connection with our site development business, and offices for new tower build projects are generally leased for periods not to exceed 18 months. Our interests in towers are comprised of a variety of fee interests, leasehold interests created by long-term lease agreements, private easements, easements and licenses or rights-of-way granted by government entities.

ITEM 3.    LEGAL PROCEEDINGS

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

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

          No matter was submitted to the vote of security holders during the fourth quarter of fiscal 2002.

PART II

ITEM 5.    MARKET FOR REGISTRANT’S COMMON EQUITY AND RELATED SHAREHOLDER MATTERS

          The Class A common stock commenced trading under the symbol “SBAC” on The Nasdaq National Market System (“Nasdaq”) on June 16, 1999. The following table presents trading information for the Class A common stock for the periods indicated on the Nasdaq:

          As of March 14, 2003, there were 236 record holders of our Class A common stock, and 1 record holder of our Class B common stock. There is no established public trading market for our Class B common stock.

          We have not paid a dividend on any class of common stock and anticipate that we will retain future earnings, if any, to fund the development and growth of our business. Consequently, we do not anticipate paying cash dividends on any of our common stock in the foreseeable future. In addition, we are restricted under our senior credit facility, the 10¼% senior notes and the 12% senior discount notes from paying dividends or making distributions and repurchasing, redeeming or otherwise acquiring any shares of common stock except under certain circumstances.

          The information required by Item 201(d) of Regulation S-K is incorporated herein by reference from the Registrant’s Proxy Statement for its 2003 Annual Meeting of Shareholders to be filed on or before April 30, 2003.

15

Table of Contents

ITEM 6.    SELECTED FINANCIAL DATA

          The following table sets forth selected historical financial and other data as of and for the years ended December 31, 2002, 2001, 2000, 1999, and 1998.  The historical financial data has been derived from, and is qualified by reference to, our audited financial statements. The information set forth below should be read in conjunction with “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and the Consolidated Financial Statements and related notes thereto included elsewhere in this report.

16

Table of Contents

17

Table of Contents

ITEM 7.    MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

          We are a leading independent owner and operator of wireless communications towers in the continental United States, Puerto Rico and the U.S. Virgin Islands.  We generate revenues from our two primary businesses, site leasing and site development. In our site leasing business, we lease antenna space to wireless service providers on towers and other structures that we own or manage for or lease from others. The towers that we own have been constructed by us at the request of a carrier, built or constructed based on our own initiative or acquired. In our site development business, we offer wireless service providers assistance in developing and maintaining their own wireless service networks.

          We are continuing to shift our revenue stream from project driven revenues to recurring revenues through the leasing of antenna space at, or on, communication towers.  We intend to emphasize our site leasing business through the leasing and management of tower sites.  Subsequent to the consummation of the AAT Transaction, we intend on focusing our leasing activities in the eastern third of the United States where substantially all of our remaining towers will be located. 

Site Leasing Services

          Site leasing revenues are received primarily from wireless communications companies. Revenues from these clients are derived from numerous different site leasing contracts. Each site leasing contract relates to the lease or use of space at an individual tower site and is generally for an initial term of 5 years, renewable for five 5-year periods at the option of the tenant.  Almost all of our site leasing contracts contain specific rent escalators, which average 3-4% per year, including the renewal option periods. Site leasing contracts are generally paid on a monthly basis and revenue from site leasing is recorded monthly on a straight-line basis over the term of the related lease agreements. Rental amounts received in advance are recorded in deferred revenue.  

          Cost of site leasing revenue consists of:

          For any given tower, such costs are relatively fixed over a monthly or an annual time period. As such, operating costs for owned towers do not generally increase significantly as a result of adding additional customers to the tower.  

          Our same tower revenue growth on the 3,734 towers we owned as of December 31, 2001 was 16% and our same tower cash flow growth on these 3,734 towers was 20%, based on site leasing contracts signed and annual lease contracts in effect as of December 31, 2002 and 2001.  

          In February 2002, we announced the reduction of our capital expenditures for new tower development and acquisition activities.  Under this plan, we suspended any material new investment for additional towers, among other

18

Table of Contents

actions.  If the AAT Transaction successfully closes, we will further reduce our tower portfolio by at least 679 towers and a maximum of 801 towers.  We do not anticipate making any material additions to our tower portfolio in 2003.

Site Development Services

          Site development services revenues are also received primarily from wireless communications companies or companies providing development or project management services to wireless communications companies.  Our site development customers engage us on a project-by-project basis, and a customer can generally terminate an assignment at any time without penalty. Site development projects in which we perform consulting services include contracts on a time and materials basis or a fixed price, or milestone, basis.  Time and materials based contracts are billed at contractual rates as the services are rendered. For those site development contracts in which we perform work on a fixed price basis, we bill the client, and recognize revenue, based on the completion of agreed upon phases or milestones of the project on a per site basis. Upon the completion of each phase we recognize the revenue related to that phase. The majority of our site development services are billed on a fixed price basis. Our site development projects generally take from 3 to 12 months to complete. Our revenue from construction projects is recognized on the percentage-of-completion method of accounting, determined by the percentage of cost incurred to date compared to management’s estimated total anticipated cost for each contract. This method is used because management considers total cost to be the best available measure of progress on the contracts. These amounts are based on estimates, and the uncertainty inherent in the estimates initially is reduced as work on the contracts nears completion.  Revenue from our site development business may fluctuate from period to period depending on construction activities, which are a function of the timing and amount of our clients’ capital expenditures, the number and significance of active customer engagements during a period, weather and other factors.

          Cost of site development project revenue and construction revenue include all material costs, salaries and labor costs, including payroll taxes, subcontract labor, vehicle expense and other costs directly and indirectly related to the projects. All costs related to site development projects and construction projects are recognized as incurred.

          Our site development revenues and profit margins decreased significantly during the year ended December 31, 2002.  This decrease was primarily attributable to the substantial decline in capital expenditures by wireless carriers, particularly for our site development construction services, which adversely affected our volume of activity and our pricing levels.  During 2003, we expect these trends to continue.  Consequently, we anticipate continued decline in our site development revenues and profit margins.

2002 Developments

          In February 2002, as a result of the continuing deterioration of the capital market conditions for wireless carriers, we announced that under a plan approved by our Board of Directors we were reducing our capital expenditures for new tower development and acquisition activities, suspending any material new investment for additional towers, reducing our workforce and closing or consolidating offices.  Under those capital market conditions, we did not anticipate building or buying a material number of new towers beyond those we were contractually obligated to build or buy, thereby resulting in the abandonment of a majority of our then existing new tower build and acquisition work in process during 2002.  In connection with this restructuring, a portion of our workforce had been reduced and certain offices have been closed, substantially all of which were primarily dedicated to new tower development activities.  In addition, during the first quarter of 2002, certain tower assets held and used in operations were determined to be impaired and written down to their fair value.  As a result of the implementation of our plans, we recorded a restructuring charge of $63.7 million in accordance with SFAS 144, Accounting for the Impairment or Disposal of Long-Lived Assets andEmerging Issues Task Force 94-3, Liability Recognition for Certain Employee Termination Benefits and Other Costs to Exit an Activity, including Certain Costs Incurred in a Restructuring.  Of the $63.7 million charge recorded during the year ended December 31, 2002, approximately $40.4 million related to the abandonment of new tower build and acquisition work in process and related construction materials on approximately 764 sites and $16.4 million related to the impairment of approximately 144 tower sites held and used in operations.  The abandonment of new tower build and acquisition work in process resulted in the write-off of all costs incurred to date.  The impairment of operating tower assets results primarily from our evaluation of the fair value of our operating tower portfolio through a discounted cash flow analysis.  Towers determined to be impaired were primarily towers with no current tenants and little or no prospects for future lease-up.  The remaining $6.9 million related primarily to the costs of employee separation for approximately 470 employees and exit costs associated with the closing and consolidation of approximately 40 offices.  Exit costs associated with the closing and consolidation of offices primarily represented our estimate of future lease obligations after considering sublease opportunities.

          On January 1, 2002, we adopted SFAS No. 142, Goodwill and Other Intangible Assets.  Under SFAS 142, goodwill is no longer amortized but reviewed for impairment on an annual basis, or more frequently if indicators of

19

Table of Contents

impairment in value are present.  Under the transitional provisions of SFAS 142, we recorded a non-cash impairment charge of $80.6 million as of the effective date of adoption, January 1, 2002.  The impairment charge has been recorded as a cumulative effect of change in accounting principle in our Consolidated Statement of Operations for the year ended December 31, 2002.  Two of our three operating segments were identified as reporting units in which we recognized an impairment loss.  Of the total $80.6 million cumulative effect adjustment,  $61.6 million related to the site development construction segment and $19.0 million related to our site leasing segment. 

          During 2002, we recorded additional goodwill totaling approximately $13.4 million resulting from the achievement of certain earn-out obligations under various construction acquisition agreements entered into prior to July 1, 2001.  In accordance with SFAS 142, in addition to the transitional test described above, goodwill is subject to an impairment assessment at least annually, or at any time that indicators of impairment are present.  We determined that as of June 30, 2002 indicators of impairment were present, thereby requiring an impairment analysis be completed.  The indicators of impairment during the quarter ended June 30, 2002 giving rise to this analysis included significant deterioration of overall Company value, continued negative trends with respect to carrier capital expenditure plans and related demand for wireless construction services and perceived reduction in value of similar site development construction services businesses.  As a result of this analysis, using a discounted cash flow valuation method for estimating fair value, $13.4 million of goodwill within the site development construction reporting unit was determined to be impaired as of June 30, 2002 and was written off in the second quarter of 2002.  The $13.4 million goodwill impairment charge is included within restructuring and other charges in the Consolidated Statement of Operations for the year ended December 31, 2002.  As of December 31, 2002 we did not have any remaining goodwill or other intangible assets subject to SFAS 142.

          Since the beginning of 2002, the environment for continued expenditures by wireless service providers has deteriorated.  Declining subscriber growth and prospects for positive cash flow by wireless service providers have adversely affected the access to and cost of capital for wireless service provides as evidenced by declines in the market value of both their debt and equity securities.  We believe that if the capital market conditions remain difficult for the telecommunications industry, wireless service providers will choose to conserve capital and may not spend as much as originally anticipated.  If wireless carrier capital expenditures and their ability to access capital remains weak or deteriorates further, we believe our revenues and gross profit from the site development consulting and construction segments of our business, potentially the collectibility of our accounts receivable, and the valuation of certain of our long-lived assets may be negatively impacted.   Short term, variable capital markets conditions may adversely impact carrier demand for our tower space, and consequently our site leasing revenue and the ability of our customers to meet their obligations to us.  We believe that, over the longer term however, site leasing revenues will continue to increase as carriers continue to deploy new antenna sites to address issues of network capacity and quality.

2003 Developments

          In February 2003, in response to the continued deterioration in expenditures by wireless service providers, particularly with respect to site development activities, we committed to a new plan of restructuring associated with further downsizing activities, including reduction in workforce and closing or consolidation of offices.  We anticipate closing an additional 9 to 15 offices and eliminating the positions of 70 to 100 employees during the first quarter of 2003, substantially all related to our site development operations.  We anticipate incurring a restructuring charge related to these costs of up to $2.0 million.

          On March 17, 2003 certain of our subsidiaries entered into a definitive agreement with AAT Communications to sell 679 towers or, if AAT Communications elects to purchase an additional 122 towers, an aggregate of 801 towers, which represent substantially all of our towers in the western two-thirds of the U.S.  Gross proceeds from the sale are anticipated to be $160.0 million if 679 towers are sold, or $203.0 million if 801 towers are sold, subject to adjustment in certain circumstances.  The AAT Transaction is expected to close in stages commencing on May 9, 2003 and ending on September 30, 2003.  We intend to use substantially all of the proceeds, net of anticipated transaction costs of approximately $5.0 million, to reduce indebtedness.  Upon consummation of the complete AAT Transaction, we will own 3,076 towers, substantially all of which will be in the eastern third of the United States. 

          We entered into the AAT Transaction to address our anticipated non-compliance with certain financial covenants under our senior credit facility commencing in 2003 and to reduce our significant level of indebtedness and the risks associated with such indebtedness.  The sale is subject to a number of conditions, including an amendment to our senior credit facility.  We anticipate that the amendment to our senior credit facility would, among other things, (1) waive any default that arises as a result of receiving an audit opinion with a “going concern” qualification, (2) modify the financial covenants to levels that we believe are better aligned with our site leasing business and can be satisfied during 2003 and beyond and (3) permit certain actions that are part of the AAT Transaction.  We believe that the AAT Transaction, in

20

Table of Contents

conjunction with the anticipated amendment to the senior credit facility, will upon consummation, eliminate the issues that gave rise to the “going concern” qualification from our auditors.  Based on our current estimates of wireless carrier activity, we believe that subsequent to the successful sale of either 679 or 801 towers, and the anticipated amendment to the senior credit facility, we will have sufficient liquidity to achieve positive free cash flow.

Going Concern

          We have significant borrowings under our senior credit facility, our 10¼% senior notes and our 12% senior discount notes, each containing certain covenants.  Among other things, these covenants restrict our ability to incur additional indebtedness, sell assets for less than fair market value, pay dividends, redeem outstanding debt or engage in other restricted payments.  If we fail to comply with these covenants, it could result in an event of default under one or all of these debt instruments.   The senior credit facility requires SBA Telecommunications to maintain specified financial ratios, including ratios regarding it’s consolidated debt coverage, debt service, cash interest expense and fixed charges for each quarter and satisfy certain financial condition tests including maintaining a minimum consolidated EBITDA (earnings (loss) before interest, taxes, depreciation, amortization, non-cash charges and unusual or non-recurring expenses).  We were in full compliance with all of the financial ratios and tests as of December 31, 2002.  Based on declines that we have been experiencing in our site development business and that we believe will continue in 2003, we estimated that we would not be in compliance with one or more of the senior credit facility’s existing financial ratios or tests in 2003.

          As a result of these estimates and our expectations that we will not comply with one or more of the financial covenants of our senior credit facility during 2003, the auditor’s opinion on our 2002 consolidated financial statements calls attention to substantial doubts about our ability to continue as a going concern through 2003. 

          The issuance of this audit opinion with a “going-concern” qualification, if not remedied by April 30, 2003, would be an event of default under our senior credit facility.  Upon the occurrence of this, or any other event of default, our lenders can prevent us from borrowing any additional amounts under the senior credit facility.  In addition, upon the occurrence of any event of default, other than certain bankruptcy events, our senior credit facility lenders, by a majority vote, can elect to declare all amounts of principal outstanding under the senior credit facility, together with all accrued interest, to be immediately due and payable.  The acceleration of amounts due under our senior credit facility would cause a cross-default in our 10¼% senior notes and our 12% senior discount notes, thereby permitting the acceleration of such indebtedness.  If the indebtedness under the senior credit facility and/or indebtedness under our 10¼% senior notes or 12% senior discount notes were to be accelerated, our current assets would not be sufficient to repay in full the indebtedness.  If we were unable to repay amounts that became due under the senior credit facility, our lenders could proceed against the collateral granted to them to secure that indebtedness. Substantially all of our assets are pledged as security under the senior credit facility.

          As part of our plan to address our anticipated non-compliance with certain financial covenants under our senior credit facility commencing in 2003 and to reduce our significant level of indebtedness and the risks associated with such indebtedness, certain of our subsidiaries entered into a definitive agreement with AAT Communications to sell 679 towers or, if AAT Communications elects to purchase an additional 122 towers, an aggregate of 801 towers.  We are also currently exploring, and may from time to time take advantage of various strategic opportunities including, but not limited to, the sale of certain assets or lines of business, the issuance of equity or the repurchasing, restructuring, or refinancing of  some or all of our debt.  We believe that the AAT Transaction, in conjunction with the amendment to the senior credit facility, will upon consummation, eliminate the issues that gave rise to the “going concern” qualification from our auditors with respect to our 2002 consolidated financial statements.  Furthermore, based on our current estimates, subsequent to the successful sale of either 679 or 801 towers, and the amendment to the senior credit facility, we expect to have sufficient liquidity to achieve positive free cash flow.  However, we cannot assure you that either the AAT Transaction and/or any other plan or action can be consummated, or if consummated, would effectively address our liquidity concerns, the possible defaults under our debt instruments or any of the other risks associated with our significant level of indebtedness.

          Based on our previous experience with our lender syndicate for our senior credit facility, we believe that we will be able to successfully negotiate with our present senior credit bank syndicate, an amendment to our senior credit facility that (1) waives any default that arises as a result of receiving an audit opinion with a “going concern” qualification, (2) modifies the financial covenants to levels that we believe are better aligned with our site leasing business and can be satisfied during 2003 and beyond and (3) permits certain actions that are part of the AAT Transaction.  This would thereby permit us to prevent the occurrence of any event of default or the acceleration of our indebtedness.  However, our prior ability to obtain necessary waivers and/or amendments does not insure our ability to obtain these waivers and/or amendments, especially in light of the recent financial performance of the wireless telecommunications industry and us. 

21

Table of Contents

          The consolidated financial statements do not include any adjustments to reflect the possible future effects on the recoverability and classification of assets or the amounts and classifications of liabilities that may result from this uncertainty.

RESULTS OF OPERATIONS

          As we continue to shift our revenue mix more towards site leasing, operating results in prior periods may not be meaningful predictors of future results. You should be aware of the dramatic changes in the nature and scope of our business when reviewing the ensuing discussion of comparative historical results.

Year Ended 2002 Compared to Year Ended 2001

          Total revenues increased 9.0% to $264.7 million for 2002 from $242.9 million for 2001. Total site development revenue decreased 10.5% to $125.0 million in 2002 from $139.7 million in 2001 due to a decrease in site development construction revenue. Site development construction revenue decreased 15.3% to $97.8 million for 2002 from $115.5 million for 2001, due primarily to reduced carrier activity and price competition resulting from lower capital expenditures by wireless carriers on or around cell sites.  We believe that wireless carriers will continue to conserve capital in 2003, which may continue to adversely affect site development revenues.  Site development consulting revenues increased 12.2% to $27.2 million for 2002 from $24.3 million for 2001.  This increase is due to several new contracts for site acquisition and zoning services from wireless communications carriers.  Site leasing revenue increased 35.4% to $139.6 million for 2002 from $103.2 million for 2001, due to the increased number of tenants added to our towers, higher average rents received and the increase in the number of towers in our portfolio.  If the AAT Transaction is consummated, with the sale of either 679 or 801 towers, we expect to have lower leasing revenue and tower cash flow, on an absolute basis, as a result of our reduced number of towers.  We expect that leasing revenue and tower cash flow growth will continue to increase during 2003 on the towers remaining in our portfolio; however, the rate of such growth may be adversely affected by lower wireless carrier capital expenditures. 

          Total cost of revenues increased 5.2% to $152.1 million for 2002 from $144.7 million for 2001. Site development cost of revenue decreased 5.1% to $102.5 million in 2002 from $107.9 million in 2001.  Site development consulting cost of revenue increased 20.5% to $20.6 million for 2002 from $17.1 million for 2001, reflecting higher levels of activity and increased personnel costs.  Site development construction cost of revenue decreased 9.9% to $81.9 million for 2002 from $90.8 million for 2001, due primarily to lower levels of activity.  Site leasing cost of revenue increased 35.2% to $49.6 million for 2002 from $36.7 million for 2001, due to the increased number of towers owned resulting in an increased amount of lease payments to site owners and related site costs as well as increases in operating costs of sites in Puerto Rico, maintenance and property taxes.

          Gross profit increased to $112.6 million for 2002 from $98.2 million for 2001, due to increased site leasing gross profit offset by a decrease in site development gross profit.  Gross profit from site development decreased 29.0% to $22.6 million in 2002 from $31.8 million in 2001 due to lower revenue and lower pricing without a commensurate reduction in cost.  Gross profit margins for site development decreased in 2002 to 18.0% from 22.8% in 2001.  Gross profit margin on site development consulting decreased to 24.3% for 2002 from 29.5% for 2001. This decrease reflects different stages of project completions and lower pricing for our services due to competition.  Gross profit margin on site development construction decreased to 16.3% for 2002 from 21.3% in 2001, resulting from lower pricing due to increased competition.  We expect this pricing competition to continue and gross profit margin from site development to continue to be negatively impacted as we move through 2003. Gross profit for the site leasing business increased 35.5% to $90.0 million in 2002 from $66.4 million in 2001 and the gross profit margins on site leasing remained consistent at 64.4% during 2002 and 2001.  As a percentage of total revenues, gross profit increased to 42.5% of total revenues in 2002 from 40.4% in 2001 due primarily to increased levels of higher margin site leasing gross profit.

          Selling, general and administrative expenses decreased 13.9% to $35.6 million for 2002 from $41.3 million for 2001. Selling, general and administrative expenses, net of non-cash compensation expense, as a percentage of total revenue has also decreased to 12.7% for the year ended December 31, 2002 as compared to 15.7% for the year ended December 31, 2001.  The decrease in selling, general and administrative expense primarily resulted from a  decrease in tower developmental expenses as well as the reduction of offices, elimination of personnel and elimination of other infrastructure that had previously been necessary to support our prior level of new asset growth but is no longer required as a result of the restructuring previously discussed.  Included within selling, general and administrative expenses is a provision for doubtful accounts.  The provision for doubtful accounts increased to $2.6 million for the year ended December 31, 2002 from $1.4 million for the year ended December 31, 2001, reflecting our assessment of a more challenging financial environment for our customers in 2002 and beyond. 

          Depreciation and amortization increased to $102.3 million for the year ended December 31, 2002 as compared to $80.5 million for the year ended December 31, 2001. This increase is directly related to the increased amount of fixed assets (primarily towers) we owned in 2002 as compared to 2001, offset by a decrease in amortization resulting from the write-off of goodwill which was recorded in connection with the implementation of SFAS No. 142 previously

22

Table of Contents

discussed.  Amortization of covenants not to compete in 2002 was $1.4 million (goodwill amortization was $0) compared to amortization of covenants not to compete and goodwill in 2001 of $6.9 million.

          During the year ended December 31, 2002 we incurred restructuring and other charges in the amount of $77.6 million, consisting primarily of $63.7 million of restructuring charges and a $13.4 million goodwill impairment charge.  As a result of the continued deterioration of capital market conditions for wireless carriers, a $63.7 million restructuring charge was recorded due to a reduction in the scale of our new tower construction activities and the impairment of certain tower assets held and used in operations. Of the $63.7 million charge, approximately $40.4 million related to the abandonment of new tower build and acquisition work in process and related construction materials on approximately 764 sites and $16.4 million related to the impairment of approximately 144 tower sites held and used in operations.  The abandonment of new tower build and acquisition work in process resulted in the full write off of all costs incurred to date.  The impairment of operational tower assets resulted primarily from our evaluation of the current projected cash flow and subsequent write-down to fair value based on a discounted cash flow analysis.  Towers determined to be impaired were primarily towers with no current tenants and little or no prospects for future lease-up.  The remaining $6.9 million of charge related primarily to the costs of employee separation for approximately 470 employees and exit costs associated with the closing and consolidation of approximately 40 offices.  Exit costs associated with the closing and consolidation of offices primarily represented our estimate of future lease obligations after considering sublease opportunities.

          Operating loss was $(102.9) million for the year ended December 31, 2002, as compared to an operating loss of $(48.0) million for the year ended December 31, 2001.  This increase in operating loss is a result of $77.6 million of restructuring and other charge recorded in the year ended December 31, 2002 versus $24.4 recorded in the year ended December 31, 2001.  Total other expenses increased to $(89.3) million for the year ended December 31, 2002, as compared to $(70.5) million for the year ended December 31, 2001, primarily as a result of increased cash interest expense, increased non-cash amortization of original issue discount and debt issuance costs, and a reduction in interest income.  The increase in interest expense is primarily due to higher principal amounts outstanding under the senior credit facility in 2002 as compared to 2001 and to a full quarter of interest expense on our $500.0 million 10¼ % senior notes in the first quarter of 2002 compared to a partial quarter of interest expense on these senior notes in the first quarter of 2001.  Although the aggregate principal amount of total debt increased from the prior year, the resulting increase in interest expense associated with the higher principal in 2002 was offset by the interest rate reduction we recognized in connection with our interest rate swap agreement.  As the interest rate swap agreement was terminated during October 2002, our aggregate amount of interest expense would be expected to increase in future periods; excluding however, the impact of the AAT Transaction and the use of the proceeds to reduce our aggregate amount of outstanding indebtedness.  The increase in non-cash amortization is primarily due to higher accretion on the 12% senior discount notes.  The decrease in interest income is due to lower cash balances during 2002.

          During the period ended June 30, 2002, we completed the transitional impairment test of goodwill required under SFAS 142, which was adopted effective January 1, 2002.  As a result of completing the required transitional test, we recorded a charge retroactive to the adoption date for the cumulative effect of the accounting change in the amount of $80.6 million, representing the excess of the carrying value of reporting units as compared to estimated fair value at January 1, 2002.  Of the total $80.6 million cumulative effect adjustment, $61.6 million related to the site development construction reporting segment and $19.0 million related to the site leasing reporting segment.  The change modified the first quarter’s previously reported net loss of ($83.2) million, or ($1.70) per share, to ($163.8) million, or ($3.34) per share.

          During 2002, we recorded additional goodwill totaling approximately $13.4 million resulting from the achievement of certain earn-out obligations under various construction acquisition agreements entered into prior to July 1, 2001.  In accordance with SFAS 142, in addition to the transitional test described above, goodwill is subject to an impairment assessment at least annually, or at any time that indicators of impairment are present.  We determined, that as of June 30, 2002, indicators of impairment were present, thereby requiring an impairment analysis be completed.  The indicators of impairment during the quarter ended June 30, 2002 giving rise to this analysis included significant deterioration of overall company market value, continued negative trends with respect to carrier capital expenditure plans, related demand for wireless construction and perceived reduction in value of similar site development construction services business.  As a result of this analysis, using a discounted cash flow valuation method for estimating fair value, $13.4 million of goodwill within the site development construction reporting unit was determined to be impaired as of June 30, 2002.  The $13.4 million goodwill impairment charge is included within restructuring and other charges in the Consolidated Statement of Operations for the year ended December 31, 2002.

          Net loss was $(273.2) million for the year ended December 31, 2002 as compared to net loss of $(125.1) million for the year ended December 31, 2001.  This increase in net loss is primarily a result of higher depreciation expense,

23

Table of Contents

higher net interest expense, the $77.6 million restructuring and other charges previously discussed and the $80.6 million cumulative effect of change in accounting principle previously discussed offset by higher gross profit and lower selling, general and administrative expenses.  We expect to incur additional net losses in 2003.

          Earnings (loss) before interest, taxes, depreciation, amortization, non-cash charges and unusual or non-recurring expenses (“EBITDA”) increased 31.1% to $79.0 million for the year ended 2002 from $60.2 million for the year ended 2001.  If the AAT Transaction is consummated, our EBITDA in 2003 would be reduced as a result of the sale of either 679 or 801 towers.  The following table provides a reconciliation of EBITDA to net loss available to common shareholders:

Year Ended 2001 Compared to Year Ended 2000

          Total revenues increased 44.7% to $242.9 million for 2001 from $167.9 million for 2000. Total site development revenue increased 20.6% to $139.7 million in 2001 from $115.9 million in 2000 due to an increase in site development construction revenue. Site development construction revenue increased 26.0% to $115.5 million for 2001 from $91.6 million for 2000, due primarily to revenues from companies acquired during 2000 and 2001. Revenues of $34.3 million were contributed by these acquired entities in 2001. Our decision to reduce our level of new tower development activity may have a material adverse effect on our site development revenue in 2002 since, as a result, we do not expect to perform equipment installation work for as many first tenants as we did in 2001. Site development consulting revenues were $24.3 million for 2001 and 2000. Site leasing revenue increased 98.3% to $103.2 million for 2001 from $52.0 million for 2000, due to tenants added to our towers and the substantially greater number of towers in our portfolio during 2001 as compared to 2000.

          Total cost of revenues increased 33.5% to $144.7 million for 2001 from $108.4 million for 2000. Site development cost of revenue increased 21.4% to $107.9 million in 2001 from $88.9 million in 2000 due to higher site development revenues. Site development consulting cost of revenue increased 9.4% to $17.1 million for 2001 from $15.6 million for 2000, reflecting increased human resources costs. Site development construction cost of revenue increased 24.0% to $90.8 million for 2001 from $73.3 million for 2000, due to higher site development construction revenues. Site leasing cost of revenue increased 88.3% to $36.7 million for 2001 from $19.5 million for 2000, due primarily to the increased number of towers owned.

          Gross profit increased to $98.2 million for 2001 from $59.5 million for 2000, due to increased site development and site leasing revenues. Gross profit from site development increased 17.8% to $31.8 million in 2001 from $27.0 million in 2000 due to higher site development revenues. Gross profit margins for site development decreased in 2001 to 22.8% from 23.3% in 2000 due to a greater relative amount of lower margin site development construction business. Gross profit margin on site development consulting decreased to 29.5% for 2001 from 35.6% for 2000. This decrease is attributable to higher costs and our inability to timely reduce those costs as projects ended. Gross profit margin on site development construction increased slightly to 21.3% for 2001 from 20.1% in 2000.  Gross profit for the site leasing business increased 104.3% to $66.4 million in 2001 from $32.5 million in 2000. The increased gross profit was due to the substantially greater number of towers owned and the greater average revenue per tower in the 2001 period. The gross profit margins on site leasing increased to 64.4% for 2001 from 62.5% in 2000. The increase in gross margin was due to additional tenants added to our towers and the resulting increase in average revenue per tower, which was greater

24

Table of Contents

than the increase in average expenses. As a percentage of total revenues, gross profit increased to 40.4% of total revenues in 2001 from 35.4% in 2000 due primarily to increased levels of higher margin site leasing gross profit.

          Selling, general and administrative expenses increased 48.7% to $41.3 million for 2001 from $27.8 million for 2000. The increase in selling, general and administrative expenses represents the addition of offices, personnel and other infrastructure necessary to support our growth, as well as increased developmental expenses associated with our higher levels of new tower builds and acquisition activities and an increase in non-cash compensation expenses in 2001. Included in selling, general and administrative expense is non-cash compensation expense of $3.3 million for 2001 and $0.3 million for 2000. The increase in 2001 is attributable primarily to the use of stock and options as payment for certain bonuses. As a percentage of total revenue, excluding non-cash compensation expenses, selling, general and administrative expenses decreased to 15.7% for 2001 from 16.4% in 2000.

          During the twelve months ended December 31, 2001, we recorded a $24.4 million charge relating to a reduction in the scale of our new tower construction operations. Approximately $24.1 million of this charge related to costs that were previously reflected in our balance sheet as construction-in-process. The remaining $0.3 million related primarily to the costs of employee separation for 102 employees and the costs associated with the closing and consolidation of selected offices that were primarily utilized in our new asset development activities.

          Depreciation and amortization increased to $80.5 million for 2001 as compared to $34.8 million for 2000. This increase was directly related to the increased amount of fixed assets, primarily towers, we owned in 2001 as compared to 2000. As our fixed assets begin to mature we will be continuing to evaluate the useful lives of the assets and may decide to change these useful lives based on the circumstances. If the useful lives of assets are reduced, depreciation may be accelerated in future years.  Amortization of goodwill and other intangible assets during 2001 and 2000 was $6.9 million and $3.6 million, respectively.

          Operating loss increased to $(48.0) million for the year ended 2001 from $(3.1) million in 2000 as a result of increased depreciation and the restructuring and other charge in 2001. Other expense, net, increased to $(70.5) million for the year ended 2001 from $(24.6) million for the year ended 2000. This increase is a result of an increase in interest expense due to interest associated with the 10¼% senior notes as well as increases in other debt balances.

          Earnings (loss) before interest, taxes, depreciation, amortization, non-cash charges and unusual or non-recurring expenses (“EBITDA”) increased 88.0% to $60.2 million for the year ended 2001 from $32.0 million for the year ended 2000. The following table provides a reconciliation of EBITDA to net loss available to common shareholders: