美國電塔 (AMT) 2002 Q1 法說會逐字稿

Good morning. My name is [Sharette], and I will be your conference facilitator today. At this time, I would like to welcome everyone to the SpectraSite conference call to discuss first quarter financial results. All lines have been placed on mute to prevent any background noise.

After the speaker's remarks there will be a question and answer period. If you would like to ask a question during this time, simply press star then the number 1 on your telephone keypad. If you would like to withdraw your question, press star then the number 2 on your telephone keypad.

Your host today is Mr. Steve Clark. Thank you. I will now turn the call over to Miss Tabitha Zane, Vice President Investor Relations. Miss Zane, you may begin.

Thank you. Good morning, everybody, and welcome to SpectraSite Communications conference call to discuss our first quarter financial results. Before we begin, I'd like to introduce the other members of the SpectraSite management team present on the call today: Steve Clark, Chief Executive Officer; Tim Biltz, Chief Operating Officer; Dave Tomick, Chief Financial Officer; and Steven Lilly, Vice President and Treasurer.

In order to help you understand the Company and its results, we will make some forward-looking statements during this conference call. It is possible that our actual results might differ from the predictions we make today. Additional information regarding factors that could cause such a difference appear in the earnings release distributed prior to this call and in the Company's filings with the SEC. We have based these forward-looking statements on information currently available and disclaim any intention or obligation to update or revise any forward looking statement. I will now turn the call over to Dave Tomick, who will review our first quarter financial results.

Thank you, Tabitha. Total revenue for the first quarter was 114.3 million, representing a 7 percent increase from a year ago. Subleasing revenue increased 42 percent to 66 million, while network services revenue decreased 21 percent to 48.3 million. Tower cash flow grew to a record 40.4 million, a 43 percent increase from a year ago, and up over 8 percent sequentially. Our tower cash flow margin also expanded compared to the fourth quarter, increasing 300 basis points to 61.3 percent. And we expect this margin expansion to continue throughout this year. Network services cash flow of 8.1 million was disappointing as we saw significantly weaker margins from a year ago, primarily due to an extremely competitive environment. And while we expect spending by the carriers to increase, particularly in the second half of this year, we anticipate that the services market will remain extremely competitive. A highlight in the first quarter was the continued decline in SG&A. At 18.8 million, which includes 289,000 of non-cash compensation charges, SG&A as a percent of revenue was 16.5 percent, declining from 20.3 percent of revenue in the first quarter of 2001. On an absolute basis, SG&A was the lowest it has been since the third quarter of 2000. This decline in SG&A is the result of the significant cost cutting measures we implemented last year. EBITDA for the quarter was $30 million. Our EBITDA margin, at 26.3 percent, was the highest ever reported by SpectraSite, and was a significant improvement from last quarter's EBITDA margin of 23.8 percent.

In the first quarter we built 52 towers, primarily for Cingular, and purchased 41 towers, bringing our ending tower count as of March 31st to 8,015. Our average full-load monthly lease rate for new tenants increased slightly from the fourth quarter to $1,725. For the 5,982 towers we owned a year ago, revenue grew 20 percent and cash flow grew 40 percent. We are getting the real benefit to tower cash flow because our network services group is performing all of the repair and maintenance work on our towers. Our tower cash flow margin continues to improve. The towers we acquired in 1999 have, on average, cash flow margins of 67 percent, which is almost a 200 basis point improvement from the fourth quarter. And the cash flow margin on the towers we acquired in 2000 is averaging 62.3 percent, almost 300 basis points higher than three months ago. We continue to see increasing revenue from relocation and reconfiguration work from existing tenants. On an absolute basis, relo, reconfiguration leases signed in the first quarter represent annualized revenue of almost 1.9 million, versus just 814,000 in the fourth quarter, a 133 percent increase. Capital expenditures in the first quarter were $39 million.

As we told you on our February 28th conference call, on January 1st the company adopted the provision of SFAS No. 142, goodwill and other intangible assets. As a result, in the first quarter we recorded a non-cash write-down of $376.8 million related to the goodwill attributable to network services, broadcast, and the building group. We have approximately $61 million of goodwill remaining, all of which is attributable to our wireless tower group. At March 31st, 2000, the company had $85.6 million of cash on hand, and $515 million remaining under our senior credit facility. As in the last two quarters, EBITDA more than covered our quarterly cash interest expense, which was 27.4 million for the quarter. We remained in full compliance with our bank covenant at the end of the quarter. Our bank borrower leverage ratio was approximately 4.9 times, versus a covenant of six times, and our cash interest coverage was 1.35 times, versus a covenant of 1.15 times.

From a liquidity perspective, we had gross liquidity of $419 million as of the end of the quarter. This liquidity is derived as follows: $168 million of permitted borrowings under our revolving line of credit, $165 million of permitted borrowers under our term loan facility, and $86 million of cash on hand. Based on our bank covenants, we are able to spend $168 million of the $419 million without any additional growth in EBITDA. As we have stated before, the reason for the difference between the gross and net liquidity numbers is our ability to subtract excess cash resulting from borrowings under our term loan facility. Now I'll turn the call over to Steve Clark.

Thanks, Dave. We were very pleased with the solid expansion of our [inaudible] cash flow and EBITDA margin. We were also encouraged with the results of our focus on expense control, yielding an SG&A decline, as Dave mentioned, for the third consecutive quarter on both an absolute basis and as a percentage of revenue. We were disappointed with executed leases and network services revenue, both of which fell below our expectations. In the first three months of this year wireless carriers spent about a $1 billion less than last year. This spending reduction negatively impacted our results in both leasing activity and services revenue. On the positive side, we've seen a pick up in both areas over the last six weeks.

Based on what wireless carriers are telling all of us, and based on their historical spending patterns, the second half of the year should be robust. However, we think part of the reason carriers held back on cap ex in Q1 was their continuing concerns over tight capital markets and slowing subscriber growth. Neither of these was a factor last year.

These concerns give us pause, and make it difficult for us to confidently project our financial expectations. Perhaps we are being overly cautious, but in today's environment I would rather err on the side of caution. So until we have a clear picture of what carriers are actually going to spend, versus their publicly stated budgets, we are not comfortable publicly forecasting our expectations for the second quarter or full year.

Before I open the call to questions, I would like to reiterate one point Dave made. We were in full compliance with our bank covenants as of March 31st, and even if our quarterly EBITDA were to remain flat for the balance of the year, we would remain in compliance with those covenants. Operator, we'll now open the call to questions.

At this time I would like to remind everyone in order to ask a question please press star, then the number 1 on your telephone keypad. If you are using a speakerphone, please pick up your handset before asking the question. We'll pause for just a moment to compile the Q&A roster.

Good morning. Just one quick question here. What would services have looked like if you did not do all the maintenance on the towers? If you could help us out a little bit there in how you think about that whether it's better really to keep it internal or, you know, if the services unit isn't performing up to expectations, does it make sense to pare it down and outsource it or does it make sense to just use that excess capacity, keep it in-house and direct it towards your tower leasing business? Thanks.

Ian, the network services revenue level is unaffected by work done on company owned assets.

I meant on the cost side, the costs of keeping, you know, the overhead there.

I'm sorry then. What was your question?

Yeah, so you're assuming that there's incremental costs associated with doing maintenance work on towers. I think the reality is the- it's very easy kind of fill-in work. We don't think we're actually experiencing incremental overhead costs in the network services business as a result of performing our own network maintenance work.

Ian, this is Tim. We actually outsourced those contracts a year ago, and when we did their cost analysis we were saving about 45 to 50 cents on the dollar versus those contracts using our own in-house people.

Okay. Good. Thank you.

Your next question comes from Joe Galzerano of CIBC World Markets.

Good morning. I just wanted to go back. You had talked about the tower cash flow margins, and I guess you said that they were going to expand throughout the year. Can you give me some kind of indication of what that expansion could be? That's it for now.

Joe, I think as we said in the call, we're at this point in time are not comfortable providing any guidance for the balance of the year.

Okay.

Your next question comes from the line of Greg Lundberg of Morgan Stanley.

Hey, good morning, guys. Looking at the tower portfolio aging schedule, this is the first time actually that the newest towers had better revenue and margin metrics than the prior year's group, and I just wanted to know what factors were driving that.

In answer to your first question, I think the math is correct, but you're looking at a grand total of 93 towers. So I think the- the aberration, I mean, it's really just an aberration that those particular towers happened to have slightly higher cash flow margins. Nothing meaningful there.

The answer to the second question is 30- 36.

Thanks.

Your next question comes from the line of [Nevine Farma] of Deutsche Bank.

NEVINE FARMA]: Hi, guys. Crunching through some of the numbers, I'm getting a lease up for the first quarter of about .25. Given that the activity picked up in the second half of the first quarter, what's that pace now for, you know, say, the second quarter?

NEVINE FARMA]: Okay, well let me try a different question then. With the cost cuts you've had a reduction in the SG&A. You've also had an improvement in the tower cash flow margins. How much more savings do you think you can achieve from additional cost cuts?

I think given the cost cutting measures that were put into affect last year, I think we're seeing- we believe we're seeing the full benefit of those. It's not to say that we, you know, might not consider additional cost cutting measures, but of the ones that we have put into affect, we think we're seeing the full benefit.

NEVINE FARMA]: Okay. Thanks.

Your next question comes from the line of Steve [Flynn] of Morgan Stanley.

STEVE [FLYNN]: Good morning. Just a follow up question again about the [COLO] rate. It looks like as you're counting tenants, it looks like the [COLO] rate was about .18 if you take your 362 new tenants of your starting tower base. It looks like it was .18 down to .30 in the fourth quarter. Can you explain what's driving that slow down?

Well, we don't calculate or report [COLO] rate anymore so I'm not sure that the numbers that you're- I'd have to go through the math to figure out where you're arriving. I think the Q4 numbers was the last time we walked people through the calculation. I think the [COLO] number that was actually in the fourth quarter was 37 percent [crosstalk] 30, so I'm not even sure we have the same deck of cards here. STEVE [FLYNN]: Sure, well I'm looking at the one schedule where you provide site leasing revenue growth and it says 362 new tenants added, new [COLO] tenants added, which is down from the total number of 573 in the fourth quarter.

Yeah, I think the- I don't have those numbers in front of me, but we have two kinds of organic growth from the leasing activity. One is by bringing a brand new tenant on to a tower for the first time, and I think that's what you're limiting your comments to.

STEVE [FLYNN]: Yes.

In addition, we, because our assets tend to be located in those metropolitan areas where capacity problems occur first and where new technology is first deployed, we have substantial increased revenue from existing tenants as they reconfigure sites in that capacity. So we have always reported-as does everyone else-total revenue increased from leasing activities as a combination of brand new tenants plus incremental revenue from existing tenants.

STEVE [FLYNN]: Okay, but let me ask this question then. If I calculate your average revenue per tenant for the quarter, in other words, just taking your total leasing revenue, dividing by three, and dividing by average tenants, I would think we'd see an increase in that number if you're only counting new tenants. In other words, your number of tenants is understated, so your average revenue per tenant should be much higher, but it looks like it actually went down 2 percent quarter-over-quarter.

I guess we'll have to respond offline. I'm not sure we have any declines. The annualized revenue per tower- you're saying per tower or per tenant.

STEVE [FLYNN]: No, I'm just taking your site leasing revenues for the quarter, dividing by three, and dividing by your average tenants for the quarter. And what I'm saying is if you're undercounting tenants by only counting new tenants, and therefore that's giving you a lower [COLO] rate, I would think your average revenue per tenant would be much higher instead of actually going down.

Well I guess part of the problem with [COLO] rate, I'm not sure how you're, you know, how you're calculating [COLO] rate. If you- I think most tower companies take the total increased leasing revenue, no matter what the source, whether it's a new tenant, new revenue from existing tenants, whether it even includes escalators. So you take the total revenue, you know, and get back to what the monthly equivalent is when you divide by 1,500 a month, and that's how people calculate [COLO] rate. So I don't know if you're- when you talk about only looking at the actual number of new tenants, that's a [COLO] rate calculation different than what I think anybody's ever done, which is why I'm confused.

STEVE [FLYNN]: Okay, sure. Well maybe we can address that offline. My second question is, can you just talk about what towers you're committed to build and buy for the remainder of 2002?

We have, as I think everyone knows, a build to suit contract with SBC that is essentially-which has now been passed over to Cingular-which is essentially the only build to suit obligation we have. You know, the difficulty with giving a specific number is that we are, you know, in process with Cingular investigating or pursuing build to suit- potential build to suit sites. And whatever number of those turn into towers that need to built, we're obligated to build. But if, you know- we don't have the ability to sit here and with any certainty know what that number is, except, you know, those that have already been at the permit stage. And that's a very small number.

STEVE [FLYNN]: Okay. Great. Thank you.

Your next question comes from John Bensche of Lehman Brothers.

Hi, John Bensche, Lehman. Hi, Steve and Dave. Your tower rental business looked pretty good this quarter, and the number I'm looking at in particular is the conversion ratio of revenue on a sequential basis from fourth quarter. I find that pretty interesting that you actually generated more tower cash flow than your increase in incremental revenue. I was wondering if you could sort of take us through that. It sounds like the cost of side of things showed better than we had been forecasting.

Yeah, John, this is Tim. I think it goes to the question that Ian was asking. We had several maintenance contracts that were issued to third parties throughout most of last year. We were able to substantially reduce that cost of site maintenance by taking our own in-house resources and having them conduct that work. So we substantially reduced the maintenance and operating costs of our towers.

And is that sustainable or is that a one-timer?

No, it's at this level. You know, I think- you know, I think we got our savings in the first quarter and we should be able to replicate that savings going forward. We won't have that incremental savings each quarter, but we'll be able to maintain, you know, the savings that we experienced in first quarter.

Okay, and a question, Dave, for you. We've been hearing a lot of companies talk about implementing 142 and the goodwill and intangible impairment test. Can you maybe help us understand how do you go about putting a number on or measuring impairment? Is it versus, you know, publicly traded comps, which, of course, have been weak in telecom generally? Or is it versus, you know, the cash flow forecast that you had when you made the acquisition?

Hey, John. This is Steven Lilly. Dave and I actually worked on that together so I'll just summarize it briefly for you. What you do is you pick a single date-January 1st of 2002 was the date that we picked-to value each of your business lines separately. And you do as a typical sort of discounted cash flow analysis for us our four or five business segments and value those independently. So that's how we came to it, and I think as Dave summarized earlier, you know, we recognized some goodwill write-offs for services businesses but not the tower business.

Thanks a lot, guys.

Your next question comes from the line of Mark [Haufman] of RBC Capital Markets.

MARK [HAUFMAN]: Hi, Jim. Could you give a summary of where your debt spans right now, you know, if you break it down between, you know, the bonds and the outstanding bank?

Yeah, Tabitha will give you that offline. I mean, it's on the Web site as well, I think. There's roughly $785 million, I think, outstanding gross on the bank facility, roughly $1-1/2 billion, a little bit more than that. It's also on the- yeah, that's what I said, 785, and there's total long-term debt of 2.463 billion. So you take the 785 off of that, it'll show you that the remainder is in the high yield notes and the converter.

MARK [HAUFMAN]: Thank you.

Your next question comes from the line of Greg Gorbatenko, Loop Capital Markets.

Good morning. Steve, you made reference to the fact that you were disappointed with executed leases. I just was hoping you could embellish upon that a little bit and kind of tie that into what gives you comfort going forward that in the second half that's going to pick up. And then I have a follow up. Thanks.

Greg, I think we continue to believe that the portfolio of towers we own is in fact the highest quality portfolio out there, and that the value to be extracted from that portfolio is a long-term gain, not a, you know, a gain that's played out over any one quarter. What that translates to more specifically in Q1 is we made some pretty conscious decisions, given pressure from carriers, to maintain the monthly lease rate that we have basically set for the towers in the various areas, and to not agree to the kinds of leases that some carriers were asking for where as much as the first year was rent free. Both of those decisions have a short-term impact of seeing us with reduced executed lease activity in Q1. We don't think it'll have a long-term impact.

Okay, and then maybe I could just follow up on the 142. I thought that was a pretty good question. Steven, when you guys are running the numbers on these you kind of come up with your answer. Do you get a tax benefit associated with that, and if so, is that something that there's grey area you can take advantage of? Thanks.

The answer is- this is Dave. The answer is no, to the tax benefit. You know, I [inaudible] to point out. I think I said it as we were going through this, you know, we've written it all off, just to be clear, everything we have in the non-tower businesses. So there won't be any further there either, you know, [inaudible] anything further.

Okay. Super. Thanks, guys.

Your next question comes from the line of Rick Prentiss of Raymond James and Associates.

Yes, morning, guys.

Hi, Rick.

Hey. Talked a little bit about some pricing competition out there as far as rental leases. Is it any region specific? Is it across the country or just kind of what are you seeing the trend and pricing? And then I'll have a follow up for you.

Yeah, I don't think we're seeing any price competition. What we saw in Q1 was, I think, a reflection of carriers own internal pressures to try to stretch out cap ex budgets and drive down operating costs, you know, and that was really what we were reacting to as opposed to any kind of competitive price pressures.

Okay, so it's not that you're getting any irrational pricing from any of the other tower operators or people taking prices down. It's still kind of trending along the lines of the escalators then? In general [crosstalk] specific.

Yes.

Okay, and the follow up question is, with industry consolidation probably on the horizon at some point, not a question of if, but when on the wireless operators, Steve [Dodge] touched on it a little bit on his call about tower consolidation, consolidation within the tower industry. What's kind of your take on that?

You know, I think most people believe that as the customer base consolidates, and you've seen in other industries, traditionally the supplier side begins to consolidate just to maintain economic balance. I guess, you know, it seems to me that the crystal ball is sufficiently cloudy in terms of carrier consolidation, and that we've got to- we've got to see a little bit of that before we worry too much about the supplier side consolidating.

It's a whole lot easier to speculate then actually see it happen.

It certainly is.

Okay. Thanks, guys.

Sure.

Your next question comes from the line of Seth Potter of Punk, Ziegel.

Hi, good morning. Two questions. One is, your SG&A line. Can we expect that to remain under an absolute basis in that level? And also can we have a breakdown of your cap ex for the quarter? Thank you.

Tabitha will call- you need to talk to Tabitha about the breakdown on the cap ex. I think that the SG&A line will just stay, you know, we've always said relatively flat in the foreseeable future.

Okay. Thank you.

You do have a follow up question from the line of [NEVINE FARMA] of Deutsche Bank.

NEVINE FARMA]: Hi, guys. Let me try the leasing up question, [inaudible] question a little differently. Can you provide the lease up activity by months for the first quarter?

NEVINE FARMA]: Okay. Thanks.

Nevine], I'm sorry if I sounded flip. I wasn't trying to be. I mean, we just don't normally provide monthly data on lease up activity or anything else, and, you know, don't plan to start doing it.

NEVINE FARMA]: Sure. I mean, you know, what I'm trying to get at is that activity in February and March is a good indication of what we should expect for the rest of this year. I'm trying to understand those numbers.

Well, I think it's fair to say, [Nevine], that the third quarter or the third month of the quarter was much better than the first quarter. I don't want to get into any specific detail, but it was much stronger than the first month of the quarter.

NEVINE FARMA]: Okay. Thanks.

Your next question comes from the line of Alex Rygiel of Friedman, Billings, Ramsey.

Thank you. Quick question with regards to the lack of guidance going forward. Traditionally the tower industry has had relatively good visibility. I understand the year-over-year decline in cap ex by the wireless carriers in the first quarter, but given the anticipation of the cap ex increasing year-over-year for the remainder of the year, and your relatively stable base business, can you provide a little bit more color as to why you have not or feel uncomfortable providing guidance at this time? And also, can you comment on what your cap ex budget is for the year or have you also pulled that?

I mean, I think there's no doubt that- to answer or at least talk to the first part of the first question that you asked. You know, the lease [inaudible], the long-term nature of these leases is such that the leasing side of the business you've got a base line that's not going to- not going to decline, and people can use, you know, whatever basis they want for assuming increases in that leasing revenue, which makes it easy to forecast. You know, we certainly are not projecting any decline in our lease revenue. I think the services revenue is very dependent, for us at least, because the work we do is predominantly on the wireless construction side. So it's very dependent to the spending of the big six carriers. And, you know, we last year were one of the loudest champions of hey, the second half's much bigger than the first half. And in fact, the historical spending pattern shows that. I think what we're saying simply is things may be different this year.

You've got a very different set of pressures from the capital markets on the wireless carriers. You know, what wireless carriers are saying publicly right now with respect to their plans for spending, I certainly hope they're true. And if they're true, everybody in the tower sector will have a good second half relative to the services side. You know, there's just not a lot of reason to be highly optimistic with what we think is significant uncertainty on that spending level. Crosstalk] I'm sorry.

Yeah, cap ex follows into the guidance world that we're not giving right now.

Thank you.

Your next question comes from the line of Greg [Sens] of High Point.

GREG [SENS]: Yes, hello, gentlemen. I was wondering if you could sort of elaborate- I know you've been speaking mostly on the core business, which is the tower business, but you also participate in a lot of rooftop and in-building installation, and I was wondering if you could sort of detail out or maybe generalize rather how that affects your bottom line and what the future holds for that portion of your company.

Yeah, this is Tim. You know, clearly last year was a tough year for the rooftop business when we lost a lot of the wireless access or wireless select businesses. So we lost all that revenue due to bankruptcy, but that was last year and was pretty much expected for this year. So it's not had a large impact in 2002 activity that wasn't expected.

On the in-building, clearly given where the state of the market is right now we're stepping very slowly and moving very cautiously, and so only those installations that are very de-leveraging do we move forward with. So it's moderate now. We expect it to grow in success, and I think you saw with earlier questions about the new towers coming online actually having better metrics than past towers, I think shows the focus on making sure the incremental capital is being spent wisely. Hello?

GREG [SENS]: Okay. I appreciate that. What's the ratio of rooftop business to tower business that's currently in place?

That's very small, single digits on revenue. Less than 10 million in revenue, and yeah, so pretty small.

It's a very small part of the business.

GREG [SENS]: Okay. I appreciate your answers, gentlemen. Thank you.

Your next question comes from the line of Mark [Duressy] of Raymond James.

MARK [DURESSY]: Talked a little bit about the services side of the business. Can you talk about where the pressure is coming from for you guys [inaudible]?

Mark, we can't hear you.

MARK [DURESSY]: On the services side of the business can you talk about, you know, where you're seeing the pressure? Is it on demand for construction services? Is it pricing on installation?

It's demand. It's clearly demand, which goes right back to the carrier cap ex spending.

MARK [DURESSY]: Okay. Thanks.

Your next question comes from the line of Andy Bloom of Delaware.

Yeah, hi, guys. You know, just getting back to SG&A for a minute. It's clear that the business it seems like is actually starting to slow. When this thing stabilizes, you know, what do you think your SG&A ought to be as a percentage of revenue, you know, more with a view towards this business looking like a [reap] than really an operating company?

Well, I think you're talking about- I mean, it sounds like you might be making an assumption about the evolution of the business that's probably different than ours. You know, we have some uncertainty about carrier cap ex spending for the balance of this year, but I think we believe we have, you know, three to five years of very significant growth left even in the absence of deployment of [3G spectrum] in the United States. So I don't think, you know, we're at a point to be talking or worrying about SG&A in a [reap] like atmosphere. That's a ways down the road.

Well some of your competitors give estimates of what they think the proper SG&A as a percentage of revenue would be. Do you guys- you have no opinion at all of what that should be is what you're saying.

Well I'm just saying that I'm not sure it's a concern that we spend a lot of time worrying about as we face the day's operating issues.

All right. Thank you.

Your next question comes from the line of [Balanda Boron] with [Led Mason].

BALANDA BORON]: Good morning. I'm a stockholder of yours and I was kind of concerned when I read the news that Crown [Inaudible] International, one of your competitors, reported that one of its largest customers crashed, ITB Digital. And I was just wondering, do you see this problem on the horizon with any of your clients that would negatively impact your cash flow?

No, as I- I mean, Crown had a conference call at nine this morning. I didn't listen to it, but the Crown customer is a television broadcast customer, as I understand it, that was offering in effect a specialized pay-per-view service in England. And that comes as a result of Crown's acquisition several years ago of the British Broadcasting Services terrestrial broadcast facility. So I think it's pretty far removed from anything we do, and we don't expect to have any expectation of any potential customer loss of that magnitude.

BALANDA BORON]: Okay, well then let me follow up with this question. You say over the next three to five years you see large expansion for towers. And I've been reading that figures as much as doubling the numbers. Obviously this is beginning to produce the [inaudible] effect, public backlash. How are you all dealing with this on an effective basis?

Well I think the doubling that you're talking- that you read about is not actual new towers, it's antennas being deployed, whether deployed on existing towers, on rooftops, and in some cases on new towers as well. So it's not really a doubling of new towers. Having said that, the zoning requirements get more restrictive and more difficult and tougher all the time, which I think is generally why people believe that existing towers that are in good locations will grow in value.

BALANDA BORON]: Thank you.

Your next question comes from Brian [Veronic] with Greenwich Capital Markets.

BRIAN [VERONIC]: Two quick questions. Any broadcast towers in the quarter? And secondly, just to be perfectly clear, are you revoking your full year guidance for '02? Thank you.

There were two broadcast towers brought in in the quarter, Tallahassee and Green Bay.

Yeah, oh, they've been under development for 18 months.

Crosstalk] development for probably 18 months and were just completed.

Yeah, I think in terms of guidance, we're at this point in time simply not making any comment on Q2 or full year guidance.

BRIAN [VERONIC]: But you're not- does that mean revoking or is it irrelevant?

It means that we're not making any comment.

BRIAN [VERONIC]: Fair enough. Thank you.

Your next question comes from the line of Ken [Battage] of Civil Point Capital.

Hi, Ken.

And your line is open.

Operator, it doesn't sound like he's on the line.

Okay. At this time there are no further questions. Are there any closing remarks?

No. Thank you, everybody, for joining us on this call. Have a good day.

Thank you for participating in today's conference call. You may now disconnect.