美國電塔 (AMT) 2006 Q2 法說會逐字稿

Good morning, my name is Heather and I will be your conference operator today. At this time I would like to welcome everyone to the American Tower second-quarter 2006 earnings call. All lines have been placed on mute to prevent any background noise. After the speakers' remarks, there will be a question-and-answer session. (OPERATOR INSTRUCTIONS) Thank you. I would now like to turn the call over to Michael Powell, Director of Investor Relations.

Thank you. Good morning and thank you for joining American Tower's conference call regarding our second-quarter results. Before we begin, we will begin with comments from Brad Singer, our Chief Financial Officer and Jim Taiclet, our Chairman and Chief Executive Officer.

However, before we actually begin, I'd like to point out that we will be discussing certain historical and current financial information. As was stated in this morning's press release, American Tower has announced that it expects to restate its historical financial results. Accordingly, the Company's financial statements and related independent auditors reports contained in the Company's prior SEC filings should no longer be relied upon.

The Company also announced an update regarding its internal review of its historical stock auction granting process and related accounting. Given that the review is not yet complete, the Company is unable at this time to provide detailed GAAP or non-GAAP financial results for the quarter ended June 30, 2006. The Company believes that the selected financial results presented in this morning's press release would not be affected by the results of the stock option review with the exception of the Company's selling, general and administrative expense which should be considered preliminary until the Company files its Form 10-Q for the quarter ended June 30, 2006. We therefore kindly ask you to keep questions on financial results to the selected financial results presented in this morning's press release.

Additionally, we'd like to remind you that this call will contain forward-looking statements that involve a number of risks and uncertainties. Examples of these statements include statements regarding our third-quarter and full-year 2006 outlook; the review of our historical stock option granting practices; the likely restatement of our previously issued financial statements; the filing of our Form 10-Q for the quarter ended June 30, 2006; our stock repurchase program; and any other statements regarding our goals, beliefs, strategies, objectives, plans or current expectations and any other statements regarding matters that are not historical fact.

You should be aware that certain factors may affect us in the future and could cause actual results to differ materially from those expressed in these forward-looking statements. Such factors include the risk factors set forth in this morning's press release and those set forth in our Form 10-Q for the quarter ended March 31, 2006. We urge you to consider these factors and remind you that we undertake no obligation to update the information contained in this call including these forward-looking statements to reflect subsequently occurring events or circumstances. Our earnings release, which includes information required by Regulation G., was furnished this morning to the SEC on the Form 8-K and is also posted on our website.

And now I would like to finally turn things over to Brad Singer.

Thanks, Michael. Prior to discussing the financial performance I will give you a brief update on the status of the stock option inquiry. As we have previously announced, the Company's Board of Directors has appointed a special committee of independent directors to conduct an internal investigation relating to the Company's historical stock option granting practices to employees. On July 28th, we announced that the special committee had reached a preliminary conclusion that the actual measurement dates for financial accounting purposes of certain stock option grants issued in prior years likely differ from recorded grants of such awards.

While the special committee has not completed its investigation and is continuing its review of these matters, the Company in consultation with its independent public accountants has determined that a restatement of its previously issued financial statements is likely. As the review is not yet complete, the Company has not determined the aggregate amount of additional non-cash compensation expense in the prior current or future periods nor any potential tax consequence.

The impact of any restatement will not materially change the Company's historic revenue, non-cash operating expenses, or cash flow from operations -- cash operations. Assuming conclusions are reached in a timely manner, the Company anticipates that it will file its 10-Q and restated financial statements in the next four to six weeks.

As a result of the current status of the stock option review, we have not released full financial statements for the second quarter and results discussed on the call are not final. The Company has provided selected financial information that reflects a portion of the operating results for the second quarter.

Turning to the second quarter. American Tower continued to demonstrate its ability to deliver consistently strong operating results during the second quarter. Similar to our first-quarter performance, our top-line revenue growth, gross margins and free cash flow exceeded our expectations. Our first-quarter total revenues increased 73% to almost 326 million. And when compared to pro forma results for the second quarter of 2005, the combined Company increased total revenue 12%. Substantially all of American Tower's performance on a pro forma basis was derived from organic revenue growth.

In our Core rental and Management division, our revenues and gross margins increased 73% and 70% to 320 million and 241 million, respectively, from the second quarter in 2005. On a pro forma basis, our second-quarter Tower revenues and gross margins increased 12% and 14%, respectively.

Our performance for the quarter exceeded the high end of our expectations due to several items. Most notably, the continuation of higher-than-anticipated levels of new business, excluding escalators, ran at an annualized rate of over 90 million during the quarter, exceeding the pace of our first-quarter sales activity; lower levels of customer churn [were trend] annualized under 1.5%; and over 2 million of non-recurring revenue that was not included in our outlook, related primarily to the production of previously reserved receivables and certain backfilling of revenue.

Our total selling, general and administrative expenses were 36.3 million, including 9.6 million of non-cash compensation. Our SG&A expense also includes approximately 1.5 million of costs associated with the stock option investigation. Please note that our non-cash compensation expense does not include any adjustments that may be required based on the outcome of the ongoing stock option review.

In the second quarter, our capital expenditures totaled slightly over 29 million, with 7 million related to SpectraSite. During the quarter, we successfully completed the construction of 57 towers, primarily in Mexico and Brazil, and three in-building installations. The average unleveraged day one return on new towers and in-building projects was 12%, with strong prospects for additional tenants further increasing our future returns on invested capital. We continue to anticipate completing approximately 275 towers and 40 in-building sites in 2006.

With our strong revenue growth and disciplined capital spending and cost control, we produced 112 million of free cash flow in the second quarter, an increase of over 117% over the same period in 2005. Excluding our investment in new towers and in-building projects, our free cash flow was approximately 128 million for the second quarter. Please note that the second-quarter free cash flow was adversely impacted by quarterly interest payments and other working capital items that partially reversed in the third quarter, with the quarterly increase exceeding 20 million for these and other items.

We define free cash flow as cash provided by operations less all capital expenditures. As indicated in our press release, we are refining our 2006 outlook. We are raising our expectations for tower revenue and gross margins, primarily due to the continuation of higher-than-anticipated levels of new business and the favorable (indiscernible) capital spending environment. At the midpoint of our outlook, we raised tower revenues by 10 million and tower gross margins by approximately 13 million from our previous guidance.

Overall, our expense outlook remains unchanged. We are modestly adjusting upwards the low end of our capital spending for new development with the expectation we will continue to be successful in completing high-return new projects in the second half of 2006.

Our financial position continues to improve due to the strength of our operations. Our leverage has moved towards the low end of our target leverage rage, with a net debt of approximately four times first-quarter annualized adjusted EBITDA.

As previously announced, the Company has temporarily suspended repurchase under its share repurchase program while the review of its stock option grant practices is ongoing. The Company's Board of Directors has approved had approved a repurchase of 250 million of the Company's Class A common stock in November of 2005. Prior to the suspension of the stock repurchase program, the Company had repurchased a total of 11.8 million shares of its common stock for approximately $358 million, including 3.5 million shares for $116 million during the quarter ended June 30, 2006.

Given the strength of our financial position, we would anticipate resuming our share repurchase program and potentially expanding and/or accelerating the historic rate subsequent to an appropriate resolution of the stock option inquiries and the filing of our Form 10-Q and restated financial statement.

In summary, we believe our results demonstrate the strength of our combined Company and the quality of our portfolio of assets as we continue to deliver strong performance. With the Red Sox needing to make up only half a game in order to maintain their rightful playoff-bound position, despite an endless string of injuries, and prudently managing their balance sheet like other well-known Boston-based enterprises, I will hand things over to Jim Taiclet, American Tower's CEO and Chairman.

Thanks, Brad and good morning to everyone on the call. American Tower's second-quarter financial results again indicate the power of the tower leasing business model, the benefits of our merger with SpectraSite, and continued vibrancy in the wireless market that we serve. American Tower remains the clear leader in the tower industry from a scale perspective, with our total portfolio of locations, including U.S. wireless and broadcast, in-building, Mexico and Brazil, now numbering approximately 22,300 sites.

Demand for tower space remains strong. During the second quarter, our application flow and signed new business accelerated further from the high levels that we experienced in the first quarter. Our strong sales performance will be further augmented by our anticipated fixed escalators exceeding 3.3%, plus the anticipated annualized turn we're experiencing of approximately 1.5%.

During the second quarter, we also acquired 20 high-return towers in Latin America, in addition to the 44 towers constructed in that region. In the U.S. we completed construction of another 13 towers and three in-building systems. However, the vast majority of our new leasing business, approximately 95%, was organic growth on existing sites, reflecting the high level of colocation activity on our towers.

We continue to experience new leasing business from across the spectrum of our customer base. Among the four national wireless carriers in the U.S., Cingular is making a significant investment in its 3G UMPS deployment by amendment and is also building a robust number of new sites. Sprint Nextel is also advancing its 3G overbuild, using CDMA EvDO technology; and Sprint continues to develop its iDEN network. T-Mobile and Verizon are also actively deploying new sites to manage subscriber growth and maintain their network quality. Additionally, Metro PCS and Leap are in the process of expanding their unlimited minute plan voice service into new markets, while growing subscribers in their existing markets. Consequently, both of these companies are deploying significant numbers of sites on our towers.

Among other emerging carriers, Clearwire is active and further developing its fixed wireless network. FiberTower is utilizing quite a large number of our sites for their microwave backhaul product. And we're working closely with QUALCOMM's media flow unit and utilizing our broadcast towers for their upcoming mobile TV launch.

In Mexico and Brazil, carries including Nextel International, Telcel and Telefonica are also colocating on our towers.

Across all of our markets, our split of new leases to amendments in the second quarter was 70/30 with the modestly higher amendment proportion a result of the substantial number of existing cell site augmentation by Cingular and Sprint Nextel as they pursue their 3G deployments.

On a fundamentals basis the U.S. wireless industry remains healthy and growing as the trend from wire to wireless communications continues. In the second quarter alone, the industry is expected to add approximately 5 million net new subscribers. Minutes of use also continue to increase, and it's anticipated that approximately 2 trillion minutes of use will be carried over U.S. wireless networks in 2006. As a result, it is likely that 2006 will be the first year in which wireless minutes exceed wireline minutes in the U.S.

The wireless industry is also performing well financially, with 2Q revenues and EBITDA growth expected to exceed 11% and 16%, respectively, over the prior year. The industry is growing, well capitalized, highly competitive, and focused on quality and advanced services, which all benefit the tower industry.

Therefore, looking forward, we anticipate the demand for our tower space should remain strong, as indicated by our current pipeline of applications. Moreover, it appears that in addition to voice migration from wire to wireless, that data communication and content-rich entertainment services are poised to make a similar migration over time. As evidenced by the major 3G data investments being made by Verizon Wireless, Cingular and Sprint Nextel, high-speed mobile data capability is already becoming table [spaced] to compete nationally in the U.S. wireless industry.

In addition, recent successful financings by Clearwire and Leap, along with a high level of interest in the coming advanced wireless service spectrum auction 66 will hopefully lengthen and strengthen this trend of robust demand for tower space. Auction participants were recently announced by the SEC, and included the major and emerging carriers, regionals, and interestingly, a cable consortium and satellite TV joint venture. Many of these bidders have submitted substantial deposits, suggesting the importance of this spectrum to their development of new services to both traditional and nontraditional wireless industry players.

Some of the potential outcomes of the auction could be a national 3G deployment by T-Mobile USA, new market launches for Leap and Metro PCS, and possibly a wireless third pipe to the home by some combination of Sprint Nextel, its registered cable consortium or the DirecTV EchoStar team.

As these developments play out, the management team at American Tower will be focused on a number of initiatives to enhance our leading position in the industry in order to deliver value to our shareholders, customers and employees. Strategically, we will continue to strive to understand and cultivate all available opportunities, both large and small, and both buy and build, to add quality assets to our base of over 22,000 owned sites.

Operationally, we will strive to maximize the performance of this portfolio by continuing to deliver consistent top-line growth, along with the highest operating margins in the industry. We will do this by maintaining a solid grip on the fundamentals of the business, the blocking and tackling of running a great tower company. These include setting and achieving stretch goals for our performance management system. It also entails staying close to the business in the field through our quarterly operations reviews held throughout our five U.S. areas, Mexico and Brazil. And it also includes constantly developing the people in our organization through our talents management review process.

Added to this disciplined way of running the day-to-day business are our highest-priority operational improvement initiatives. First and foremost among these is advancing our customer relationships at every level by understanding the current deployment needs and addressing them expeditiously, as well as collaborating early with our customers on their future projects.

As part of this preplanning, we are identifying likely future tower needs with our customers and initiating site and document reviews even before the application is submitted, thereby speeding up cycle times. And now that the SpectraSite integration is complete, we are also launching a more comprehensive effort to identify smart investments that we can make in our IT systems, data and document automation, and operational training to improve the speed of our entire lease processing system, from application to equipment installation.

Finally, on the financing front, we are using a portion of our free cash flow to selectively repurchase some of our higher coupon outstanding debt. We're also in the process of evaluating future balance sheet improvement opportunities and expect to reinitiate our share repurchase program once we have made sufficient progress in our stock option review.

In summary, American Tower continues to pursue its three-pronged strategy of building and leveraging scale, continually improving operational execution to enhance returns, and optimizing the capital structure to reduce interest costs, while maintaining appropriate financial and strategic flexibility. We once again delivered strong operational and financial results in the second quarter and we believe that we are in a favorable industry environment that will support further growth.

We're greatly appreciative of our customers for their business and partnership, our employees for their dedication and effort, and to you for your continued confidence in the Company. And at this point we'd be happy to take your questions. So, Heather, you can go ahead and open up the line.

(OPERATOR INSTRUCTIONS) Ric Prentiss.

Good morning, guys. First, on Jim's discussion about the auction 66 participants, can you update us as far as what kind of -- since you guys have the largest tower portfolio out there -- what kind of interest have you seen already? Is it business planning interest, is it kind of trying to gauge how quickly they could get into a market? Or just kind of update us as far as the interest levels you've seen, I guess, and what kind of timeframes they've shown?

Ric, if you take the categories of customers that are expected to bid, obviously the big four, including T-Mobile, we already have strong communication with them. And in T-Mobile specifically we've had discussions about a national rollout, potentially, of a data network and what that would entail. And we're actually visiting them again this week.

When you go to the next category, which is emerging carriers, Leap, Metro PCS, for example, again we've worked with them heavily in market launches already. We've built a track record of being able to get really more than our proportional share of sites in those situations, and that is exactly the approach we will be taking as they garner, hopefully, some new spectrum. And then with the third category, which is the nonoperating carriers at the moment, it could be, again, cable consortium, satellite TV, we've had initial discussions with them about how to go about and roll out a leasing program. But they don't have the operational detail yet needed to talk about specific leases.

And then you looked a little tepid on the table there about the balance sheet. We've been wondering, given the stock option review, I assume the discussions with the rating agency have been put on hold. What is your thoughts on going with an asset-backed securitization or (technical difficulty) type of loan out there?

Hey, Ric. It's Brad. You're right in your assumption that while we have the stock option review, we are literally not advancing externally any type of financing initiatives that we're doing right now. But we are working internally, and that is part of the overall balance sheet and capital structure planning process. And you should anticipate that upon a resolution to the stock option review, that we will be moving forward in a variety of ways that would be the most appropriate in terms of how we capitalize ourselves.

And as we've said in the past, we think -- in particular to your question on the securitization or an asset-backed or mortgage-backed security -- that is an appropriate financing vehicle as part of an overall balance sheet; it's one that is attractive. I think we look at that as something -- as just another financing instrument that can be utilized and has been utilized by the industry. And that is how I would characterize it.

Okay. And then on the buyback, I've heard a couple of different things. Jim used the term sufficient progress. I can't remember your exact words, Brad. But when you mentioned when you might be able to reinstitute the stock buyback program, obviously I think it was that you had to finish the 10-Q and restatement. But do you have to (technical difficulty) any final SEC blessing or what is kind of the -- what is the definition of sufficient, I guess?

Ric, its Jim. You highlighted the first step, and that is to have our financial statements filed with the SEC. And then secondarily to that, our Board of Directors will have to understand the broader issue to a point where they are comfortable that the facts and circumstances subsequent to completing the financial statements give them comfort that we can go ahead and relaunch the share repurchase program.

So we've got to look at, again, the informal inquiry of the SEC at that point and other regulatory activities that are going on and make a balanced judgment. So it's really difficult at this moment to tell you when that might be, but that is the process. It's financial statement and then assessing the environment of the other regulatory activities according to the (indiscernible).

Okay. Well, it sounds like business is going pretty well, so good luck, guys.

Michael Rollins.

Good morning, guys. A few questions. First, I was wondering if you can give us an update on the synergy realization on a cash basis from the completed SpectraSite acquisition, and what are your expectations for that going forward in terms of the potential for further savings.

Secondly, I was curious about if you've seen any change in the revenue trajectory from some of the new contract lease extensions that you announced with the national carriers previously. Is that having a more positive effect on the upgrade cycle or increasing the time to which -- or I should say decreasing the time in which they are making some of those decisions?

I guess the third thing -- and I'll just throw this out there -- are there any other parameters around the stock option inquiry that you could highlight, anything that you would want to throw out there just in terms of some color beyond what you've already said? Thank you.

Hey, Mike. It's Brad. I'll start and I'll turn it over to the revenue question and the stock option inquiry question to Jim. With regard to revenue or with regard to the synergies, we have, as we previously stated, we've realized the high end of our initial expectation, the $35 million annualized basis. And that was really effectuated by the end of the first quarter of 2006.

We continually find ways to run our Company better, but it's not as an overall synergy, but just being more efficient as an operation. And the last piece of really the SpectraSite cost -- synergy realization was the subsequent sale or confirmation of the sale of the office building in Cary in the second quarter. So that has been completed and we realized approximately $13 million off that that was not included in our synergy numbers, which are incremental cash in the door. And that is really how we view this. So it has been successful, it is at least at the high end of the levels we had expected. And from this point on, we are just trying to run the Company as efficiently as possible.

Mike, regarding our revenue trajectory, the contract renegotiations and the lease extensions we've done postmerger have helped us in a couple of ways. One is a number of those renegotiated contracts have enhanced site commitments in those. So it encourages the customer to work with us, again, early in the planning process of their RF design to aggressively try to meet or hopefully, from our point of view, exceed the site commitments in the contract. So there's a motivation inherent to work with the Company that has the most sites and, of course, that's American Tower, to meet those commitments.

The second helpful aspects of the contracts are, as you alluded to, administrative and process speed. And by simplifying some of our agreements and combining SpectraSite and American Tower, we can administratively work with a customer faster than before. And our view generally is that speed is among the most important aspects of carriers' siting decisions these days. So anything that helps enhance your turn time or cycle time will help you get the additional lease. And so those are the two things I would mention.

Finally on the stock option review, just to give you a sense, the special committee that we've publicly disclosed earlier in numerous filings is in the process of going through literally eight years' worth of stock option data, documents, minutes of meanings, and in addition, thousands of e-mails. And the committee and its advisers really is truly independent, so we in management don't control the timeline or that process. But the shared goal I think everyone has is to accomplish all the required research and analysis in a totally independent manner and to reach final conclusions regarding the impact on our financial statements. And we feel we're getting close to that, and that is where the four to six weeks comes from, that that process is moving forward.

Thank you.

Anthony Klarman.

Thanks. A couple of questions. First, as I look at your balance sheet where it stands today and your leverage with respect your leverage targets, given that you're not able to use your free cash flow to buy back stock while you are going through the options review, you're obviously going to build a significant amount of cash. And if we fast forward to '07, leverage is going to be well through the bottom of your expected range.

So I guess could you talk about expectations for things you might do to take on incremental leverage? In other words, would you, once the stock option review is behind, consider taking on additional leverage to perhaps -- maybe getting to Jim's comment -- perhaps accelerate or broaden the scope of the share repurchase program or do other things to perhaps incrementally increase leverage to generate greater free cash per share return?

Anthony, it's Brad. With regard to building cash, we're trying to use the cash as appropriately as possible. We did do some selective repurchases of debt this quarter, which we thought was a better return than parking it on the balance sheet. But you should anticipate upon an appropriate resolution to the stock option review that we would be reimplementing the share repurchase plan. And as I mentioned in my prepared remarks, it may be at an accelerated or increased pace, because we are below where we'd like to be in our leverage.

And I think we'd do that in -- what I would say in some sort of normalized fashion, which isn't probably all at once. But we'd look at our timetables, we'd look at what makes sense and how to increase -- get our leverage back to a point where we'd like it to be over an appropriate period of time.

You are at -- at least your guidance is kind of at the low end of the range of your peer group, however small that peer group might be. Just given the sense you already have of the backlog for the remainder of '06 and the outlook given auction 66 and the potential for perhaps one or two new networks being built, any sense that you might change the range of what is an appropriate level of leverage for the business, at least in the near to medium term?

I think we'd evaluate that on an ongoing basis when we consider our leverage. Right now, as we said, we're below where we'd like to be and we would like to increase that to the point -- whether it's closer to five times or slightly beyond or below, that is something that we would announce and discuss publicly when we make those decisions.

And finally, you mentioned obviously you will be out of filing compliance for at least a brief period with the SEC on the Q until you get that filed. Will you have to make any special appeals or anything to the exchanges or are there any bank or bond covenants that would create an issue due to the filing requirement that you will have to go back and get either a consent for or some kind of waiver?

Walking through all the different constituencies when you're talking about your SEC filings, we will alert the New York Stock Exchange if we do not file by August 14th and discuss a time we would expect to file by. Hopefully, that plan will be acceptable, given that we do expect to file in four to six weeks.

With regard to our debt, our bank and our bonds, with the banks, you generally have a 30-day grace period from the time you are supposed to file. And if you do not file within that period of time, you would go and get a consent from your banks, which we have done in the past in various situations -- not late filings, but in other analogous situations.

And with regard to our bonds, our bonds trade above par, I think, across the board. And so typically also with bonds you do have another 30-day cycle. And then there's a notification that potentially, with regard to that filing, to your timely filing. So I think that takes care of most of it and I think all those documents have been filed publicly.

Great. Thank you.

When I say those documents have been file publicly, I do mean the bank agreements as well as all our notes; not our restated 10-Qs already.

Thanks, Anthony.

Jim Ballan.

Thanks a lot. Just a couple of clarifying points on stuff that you guys have talked about. Jim, you talked about all of the data that the special committee has to go through. In terms of the timeframe, do they have all that data and it's just a matter of going through it, or are they counting on outside sources still to -- are they waiting on other people to gather all that data so that they can go through it? I'm just trying to get a sense of how hard the four to six-week timeframe is.

And then the other thing, as you mentioned, Brad, 1.5 million of expenses related to the stock option review in the quarter. Should we expect you to continue to have the costs go at that pace going forward until this is over?

Jim, I'll take the first one on the expense and I'll turn it over to Jim on your other questions on the stock option review. With regard to the expenses, we accrued 1.5 million for the second quarter. That, if you remember, I think we made the announcement mid-May, and that is when we start to incur those expenses. You should anticipate at least those levels on a quarterized basis moving forward until this resolution. But in terms of the absolute dollars, it really depends how long and how intense the activity level is during this quarter or even subsequent quarters.

Jim, as we've mentioned earlier, the management team is not involved in the process that the special committee is going through. And that is meant to maintain the purity of the independence of that process, which is a very high priority for us. But to the best of our knowledge, they have everything they need that has been provided by the Company and its records. So we can tell you that. They may be interviewing people outside the Company. We don't have that schedule. But everything we can provide to them, we feel we've provided.

Great. Thanks, gentlemen.

(OPERATOR INSTRUCTIONS) Michael Weisberg.

Good morning. I have a few questions. Jim, you mentioned 90 million in new business activity on an annualized basis. When you're looking out over the next six months, are you anticipating in your guidance that level of activity continuing?

Our implied guidance does -- it would be at those levels. That would be part of it. So when you're looking at the ranges, it will be slightly below 90 to slightly above 90.

Great. And did that 90 million, does that include augmentations?

Yes.

So it would include everything but escalators, less churn -- would that be the right way of looking at it?

That is correct.

Okay, great. Great. Have you disclosed -- can you discuss whether the existing options could include any members of current management?

Again, we can't comment on the process or its preliminary conclusions because we're not involved in it, Michael. And again, that's to maintain the purity of the process.

Okay. The 2 million in non-recurring in the quarter in site rev, that came from what?

I think I mentioned that in my prepared remarks; it really was the collection of previously reserved receivables.

Okay. And just to refresh the memory, there was -- was there 4 million in non-recurring in the first quarter or was it actually 7 million including the lease extension?

Well, in terms of what we identified, 4.3 million in non-recurring revenue items, not counting any lease extension aspects; that is in addition to it. And that was similar, which was mostly actually related to backfilling, as well as some pickup of some previously reserved receivables that we had identified.

Great. So the lease extensions would be part of the revenues you reported this quarter. So you had some benefits from that in the second quarter as well, right?

It was about the same in the first and second quarter. There is no real (indiscernible) sequential incrementals.

So in terms of looking at the sequential revenues, you can say take 2 million away from the second quarter and 4.3 million away from the first quarter?

That is correct.

Great. And is there any expectations of some non-recurring in the third and fourth quarter?

If there was, we try to incorporate everything that we know as of today when we give outlook. So hopefully, everything is incorporated as is into our outlook that we know.

And one final thing, is there any thought of moving up the third quarter release to late October and having the conference in New York?

I'm assuming that is so we can all watch the Yankees play the Red Sox.

Well, no. That way you could watch some baseball instead of the season being over -- that was my only thought.

Two games up and it's already the gloating.

Continue. I'm done, thank you.

Tom Egan.

Tim, one more balance sheet question. I just wanted to follow up on an earlier question. Will you continue to look at selective open market repurchases of your public debt as appropriate use of -- potential use of cash, as you did in this past quarter?

Yes, we will.

Okay, thank you.

There are no further questions at this time.

Thank everyone for participating on this call.

Have a great week everybody. Bye now.

This concludes American Tower's second-quarter 2006 earnings conference call. You may now disconnect.