Good morning. My name is Julie, and I will be your conference operator today. At this time, I would like to welcome everyone to the American Tower Second Quarter 2008 Earnings Conference 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 Mr. Michael Powell, Vice President of Investor Relations. Sir, you may begin your conference.

Thank you, Julie. Good morning and thank you for joining American Tower's conference call regarding our second quarter 2008 financial results. We will begin with comments from Jean Bua, our Interim Chief Financial Officer and Jim Taiclet, our Chairman, President and Chief Executive Officer. After these comments of course we will open up the call for your questions. I would 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 2008 outlook, our stock repurchase program, our international business development initiatives and any other statements regarding matters that are not historical facts. 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 31st, 2008 and our other filings with the SEC. We urge you to consider these factors and remind you that we undertake no obligation to update the information contained in this call to reflect subsequently occurring events or circumstances. And now, I'd like to turn things over to Jean.

Thank you, Michael. And good morning everyone. American Tower continued its track record of consistently delivering strong revenue, adjusted EBITDA and free cash flow growth in the second quarter. In our core rental and management division, both our revenue and gross margin increased 10% to $384 million and $296 million respectively from the second quarter in 2007. Our rental and management revenues and gross margins included a decrease of approximately $5 million of non-cash straight-line revenue compared to the prior year and approximately $2 million on a sequential basis from the first quarter. Adjusted to exclude the non-cash straight-line elements Tower revenue increased 11% and gross margin increased 13% from the second quarter of 2007. Our level of new business continued to be strong with annualized levels of signed new business of approximately $97 million during the second quarter. Signed new business was incrementally stronger in the second quarter compared to the first quarter of 2008 with the U.S. at comparable levels in both quarters, but with stronger performance in the second quarter from our Mexico and Brazil operation. Our total selling, general, administrative and development expense was $41.8 million including $13.6 million of stock-based compensation expense. Our selling, general, administrative and development expense also included a one-time expense reduction of approximately $3.1 million and approximately $600,000 of additional costs associated with the stock option review and related matters. Our adjusted EBITDA increased 13% to $272.3 million and our adjusted EBITDA margin increased nearly 200 basis points to a record level of over 69%. Adjusting to exclude non-cash straight line revenue and expense, adjusted EBITDA increased approximately 16%. Our operating income for the quarter increased approximately $62 million from the second quarter of 2007 to $155 million. Of the increase, approximately $31 million was attributable to the change in our…

Thanks, Jean and good morning, everybody. As highlighted by our second quarter results, the tower industry continues to perform well, even in an uncertain general economic environment. In fact, American Tower outperformed our own internal expectations for both tower revenue growth and adjusted EBITDA and our confidence in our anticipated performance for the second half of this year led us to raise our 2008 guidance for tower revenue and adjusted EBITDA by $7.5 million and $6 million respectively at the midpoint. We believe that our sector's strong current and anticipated performance is driven by a number of factors. First, we primarily serve wireless carriers, the vast majority of which are growing in revenue, delivering strong profitability and are financially solid versus the potentially more stressed consumer segment. Second, the technology deployment and network development plans of these carriers are multi-year, highly complex endeavors. Given the strong financial health of the bulk of our customer base, our recent experience is that they are continuing on with their technology migration plans from 2.5 to 3G, while continuing to invest in network quality. Third, wireless industry competitiveness remains very high in the U.S., Mexico, Brazil and India. And of these served markets subscriber growth continues, minutes [ph] of voice users still expanding at an even faster rate and carriers are aggressively rolling out new data applications and devices. Notably, AT&T Mobility recently announced that its second quarter year-over-year growth in data revenues increased by over 50%. Even before the launch of the much anticipated 3G iPhone. Of course, all these trends require ongoing network investment, lengthening and strengthening the demand for tower space. And fourth, Government policies in all of our served markets, especially with respect to spectrum availability, further support continuing need for sustained and substantial carrier investment in wireless infrastructure. Currently,…

[Operator Instructions]. We'll pause for just a moment to compile the Q&A roster. Your first question comes from the line of Michael Rollins with Citi Investment.

Hi good morning. I was wondering if you could talk a little bit more about the size of maybe the acquisition opportunities that could be left in the U.S. As you think about inevitably the capital structure and the options for which you can deploy cash, if you could size that part of the market for us, that would be great. And can you also give us a sense of what kind of opportunities for incremental investment lie in Latin America in a little bit more detail? That would be great. Thanks.

Sure Mike. Good morning, it's Jim. First, of all let's talk about the U.S. The alternatives that I'll list may or may not be available now or in the near future but we can definitely talk about the universe for a few minutes. First and foremost is our peer company and one we have a lot of respect for, it's Crown Castle, very similar size to American Tower in many respects. It's our peer and probably the only peer of such size in the industry today, obviously a merger candidate if you will, theoretically. SBA is the second public company in the peer group versus American Tower and Crown Castle, 23,000, 24,000 size, we are talking about a smaller number. SBA has been doing some acquisitions lately and bulking up a bit, so maybe they are at 7,000, 8,000 tower range by the time it's all rolled in and that again another very well managed high-quality company in the public market. And then you get down to a couple of somewhat sizeable privately owned tower companies that are out there like Global Tower Partners. But now you're down into sort of the 2,000 to 3,000 tower range and then it goes down from there Mike. So, and even some of those candidates in the say 500 tower range lately have been acquired. So, there is a fairly limited number of third-party tower companies of any kind of scale that's available. But, of course, there are also the carrier on tower portfolios that are still owned by those companies, the biggest one we believe is AT&T probably about 8000 towers, most of those legacy AT&T wireless sites. T-Mobile, which publicly announced an auction that was then discontinued for about 6,000 tower size and of course recently Sprint sites were sold. So,…

And just a follow-up quickly, can you just review the criteria that you use in terms of valuation, do you look at a certain level of accretion on certain metrics to your business or are there other factors that you consider as you're weighing whether to participate or not in bidding and in ultimately the price that you chose before for these assets.

Mike, the way I describe our decision-making process is one of price-quality equation. So the quality the tower has to, in our view, justify the price being asked. We look at it from two or three different directions, one would be a sort of a standard discounted cash flow model over a number of years, we compare that to tower cash flow and EBITDA and free cash flow multiples in the current timeframe. And then we also add in the growth factor, how much of the tower is probably already loaded with the revenues that's available in that territory and how much conversely growth is there for the future. So there are a number of factors that go into this, I think, we've got a very sophisticated methodology and extremely experienced people at doing these things. So there is no one-dimensional answer Mike, but it's a confluence of a number of factors and numerous analyses that get us to a decision point.

Thanks very much.

Sure.

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

Hi, good morning guys. Don't count the raise out yet.

Hi, Rick.

A couple of questions for you, first on the stock buyback. You mentioned how you would fund that with excess cash flow generated, your credit facility and borrowing capacity. Can you update us as far as what the debt markets are looking like? What kind of rates you are seeing out there? Would you look at a securitization as that market opened back up, just kind of what your thoughts are on the credit markets right now?

Yes. Ric. I think based on our moderate leverage, our numerous types of markets we've already participated in, and therefore have existing investment banking and banking relationships. At some level, all markets are open to us, and I'll go through each of them as far as size and maybe the interest rates we could be looking at. We haven't agreed or initiated any transactions yet, so this is more of a conceptual discussion here today. But, we can start with the bank market, we've tapped our relationship bank market earlier this year as you may know, $325 million facility. We may need to go to a broader bank group if we went to the credit markets again, but we've demonstrated the ability to do that too. The revolver which we're using today to fund a portion of our share repurchases, we have some swaps that keep us at about 4% or slightly below on the credit facility that we borrow against today. So, extremely attractive, very nice job by our finance team in lining that up over the last couple of years. So, we do think the debt markets are available, but potentially not at great amounts of capital now, but the pricing is pretty attractive. Secondly, we could speak to the buy market, our BB plus rating and the stability of the company has led us to get essentially investment grade covenants on the most recent bonds that we did, ten-year bonds, we... still that's an open market for us and the question would be timing. We could probably do between $250 million and $500 million, we think in a bond if we were to go to that market, Rick, and 7 to 7.75 type of a range of coupon, again that's why the timings are important. We have…

Another follow up question for you. Crown Castle the other day, when they reported their second quarter numbers surprised us with the amount of ramp-up they had done in the land program, both buying land and extending leases, it looks like they've hired a team and are really going at it aggressively. You guys, I've got it in your guidance, still kind of at a nice level. Any thoughts about ability to ramp that up or kind of accelerate that pace?

Yes, Rick, I think we're very comfortable with the land purchase rate that we're involved with right now. And just like I said before, when you talk about tower quality versus price, we look at land in the same way too. So, we don't buy land just to buy it, we buy land to protect the asset ultimately, but also to get a good return in the near and medium term as well. So we're buying land between price [ph], 10 and 15 times our annual land costs. If you don't have the escalator and how to use the course of returns are going to improve from that and you have that protection factor. So, we feel we're in the right zone as far as returns, as far as protecting the land that we would like to get access to permanently and that's appropriate for us, we feel. And again, just like buying towers buying land should have a quality price equation against them.

And just to add on to Jim's comments, two points. One, the returns that we have been seeing in our land purchases are anywhere from the mid teens to the upper 20s. And at this point, our leases have an average maturity of about 20 years on them.

Great. And one final question on your guidance, what's in the guidance as far as WiMAX assumptions from Clearwire and Sprint looking like, I guess they will get their deal closed probably in fourth quarter maybe November timeframe, and anything in your guidance right now for it or would it be upside if they get it in '08?

Rick, we had no change to our original Clearwire assumptions which were fairly modest for 2008 they did lock with us, in fact in 2007. But we knew their deployment plan and that would be smaller in this current year and we haven't modified that due to the transaction because I just said it will get approved and closed to late in the year. There may be an effect in '09 but that will depend on the financing and the buildout plan as a new entity which we're looking forward to by the way we think it will be a positive. As far as the Nextel WiMAX program, we did have budgeted some amendments that we understood was again the rollout plan for trial markets... pretty limited actually from Sprint Nextel and that's still what we're working under and they're still doing some of that. But, neither of those were big impact items in the budget for American Tower for 2008.

Great. It sounds like it could be a good '09 then. Good luck, guys.

Right. Thanks, Rick.

Your next question comes from the line of Jonathan Atkin with RBC Capital Markets.

Yes. Good morning. I wondered if you could just talk about your thoughts on India, just maybe give a little bit more color, anything you learned over the past several months since you decided to go ahead with built-to-suits? And then with regard to just the recent M&A activity in the second... basically any thoughts on those transactions, you obviously decided not to participate, any thoughts on what that means for the industry?

Sure. Let me go ahead and speak to India first, John. We've spent, as you know, I've personally been spending a fair amount of time over there in the last year or so. One of the things that you cannot miss especially in new business is it's a fast-growing economy, it is over 1 billion people, it's a country sort of on the move into the modern era and it's bypassing essentially the wired telecom network phase and going right to wireless telecom network, to truly be I think the major communications infrastructure for people and for businesses in India. So, founded fundamentally it's a very good telecom market, high growth, in fact we think it's the highest growth wireless market in the world right now. So, that's the first point. The second point is that it's very competitive from a wireless carrier point of view and the government actually encourages this. So, unlike even the U.S. or Mexico where yes you have four to seven national competitors. There are many many competitors both on a national and regional basis in India. And it's in an aggressive phase of development and competition. So, while there are some big joint ventures in some major carriers that are... have decided to move forward with their own tower ventures of one sort or another is still a very large and very active emerging part of the market plus some existing carriers that want to focus on their core business and do want to lease and have third parties build their tower for them. So, we think there's plenty of opportunity for the tower business on a third party basis as we feel we can offer. The third observation that I would give you is that there is a need for a leader in…

And then on the domestic M&A situation?

Sure. You sort of answered our question already, John. If you can assume that a company in a leadership position such as ours is provided notification of any assets, it may be coming available of this type, we apply this discipline and I do like to use the word institutionalize because we have a repeatable process of seeking and evaluating acquisition opportunities with consistent people who know what they're doing. And therefore, we feel this repeatable process can be applied to opportunities in the U.S. like the transactions that are recently closed or have been announced, I should say all the way over to India, or other regions of the world. So, we went through our process you might suspect and it may have included some of these tower assets that traded and you didn't see us in the announcements. So, that must mean, that if we did take a look at them, our price versus quality equation didn't work for us.

Finally, on outdoor DAS, you spent more time in your prepared remarks than you have, I think compared to years ago, and can you refresh us on what the current scope of your outdoor DAS business is in terms of number of markets or number of nodes or what not and if you decided to grow that organically, how rapidly could that scale given I imagine a lot of the headcount that you would either have to outsource or add?

Yes. John, let me just put it in context and I will use our indoor DAS business to provide that context. Between originally SpectraSite's premerger and now the last three or four years with us. We worked hard at this, we think it's another nice niche product and we've successfully grown it to about 2% of our tower revenue okay, and we're the industry leader and net we have I think 160, 170 malls, casinos, hotels etcetera out there. Outdoor DAS is just in the launch phase, could it get to 2% of revenue over a three to five year period? Sure it could. And we'd like it to be able to do that. Now remember, when you're talking about AMT, $1.5 billion roughly of tower revenue we've got 2% of that, it's $30 million and we converted 80% or 90% to EBITDA to nice $20 million, $25 million EBITDA contribution. That'll be a win for us. Would it get bigger than that? I'm not sure.

Great. Anyway, thanks very much.

And we're just ramping it up John, the answer to the other half of your question.

Got you. Thank you.

You bet.

Your next question comes from the line of Clay Moran with Stanford Group.

Good morning, I have two questions. First, another question on your view of acquisitions. You talked about price, quality, equation, you also talked about the benefits of scale. I'm just wondering if scale plays into quality so, such that would you, all things being equal, enter markets where you have less scale today more aggressively and would you pay more for a sizeable portfolio to gain scale. And then the second question is just operationally if you adjust for a straight line revenue and for some of the new tower builds which I guess, I would assume those are 110 a tower. What's the same tower revenue growth look like now? Thanks.

Okay. Clay, I'll take the first one, Jean will talk about same tower revenue numbers. The way we look at acquisitions is the asset, the purchase price, the growth opportunity and a number of other factors as you suggested. And then based on the market there could be a strategic premium to that, but I can also add that that is the modest type of strategic premium. We've done transactions in the past which were strategic like SpectraSite and that was done at 16 times tower cash flow and 18 times pro forma EBITDA. That would be a significant strategic premium, I think, from an analytical standpoint, but it was a strategic deal for us. So, yes we would consider a strategic premium based above and beyond our analytical answers, but it would not be a surprise to I think anyone if we were to do that because the size would be modest.

And would you prioritize your market opportunities based on where you're smallest to where you're currently the biggest in other words would India be the priority?

The priority is to add a number of projects over the next three to five years, Clay, and they could be domestic, they could be in India, they could be in a developed market even, somewhere in Europe, Africa and Middle East or other parts of Asia where we can get the returns we want in a reasonable amount of time with manageable risk. So, there's no again, easy sort of, one-sentence explanation as to how we make investment decisions. But I think that if you look at our track record you could use the terms thoughtful, discipline and the ones that we did pull the trigger on, I think have very outstanding results. Mexico, Brazil, SpectraSite are examples of that. So, it's a multifaceted thoughtful approach, it's based on returns and the risk to get those and the contribution to the company that built them [ph]. Okay, so Jean, I'll turn it over to you for the new tower or the tower growth.

Sure, on the second quarter year-over-year same tower growth without the effect of straight line our growth was about 11%, which was nearly all organic, a little less than... a little less than 2% came from new assets. Including straight-line, growth was about 10% and most of that was organic also.

Okay. Thanks.

And it was... it was 8% on a straight-line basis.

8% straight line, 10% about, if you exclude straight line?

On a same tower basis, yes.

Okay. Thank you.

Your next question comes from the line of Simon Flannery with Morgan Stanley.

Okay. Thank you very much. Good morning. Can you talk a little bit about the trends between first half and second half. I think you made some comment that you wouldn't see the back half loading that you saw in 2007. Is that more a factor of '07 or is there something... some difference between first half and second half in terms of customer behavior that you are expecting. And if you could update us also on the CFO search? Thanks.

Sure. On the... for our guidance for the year, the 2007 especially in the fourth quarter, the fourth quarter of 2007 was tremendously strong for commenced business. Through the first half of the year we've seen commenced business be strong and then in the second quarter it was very strong, we're still anticipating the same level as we had guided to originally in the second half of the year for commenced business. We just have adjusted the guidance for the effect of the timing on our run rates and the impact of that on the full-year.

So, basically Simon, if we see '08 as a level-loaded year for the four quarters in '07 just had a ramp up through the third and especially the fourth.

Okay. So, consistent with what we have seen in Q2?

We're not sure. We are saying that the Q3 will be higher than Q2, like Q2 was higher than Q1. But we are saying we think it's more of a level loaded year across the four quarters in '08.

Good. Okay.

Alright? Regard to the CFO search, our public statement was that we would initiate a comprehensive search of talent both inside and outside the company. That's getting ginned up now, since we've completed our second quarter close, we've now had our earnings call here and we just finished a Board meeting over the last couple of days. So we will be formally moving forward with that internal-external assessment and we will let investors know how that comes out.

And any timeline on that?

It's going to depend on the kind of talent we find and how long it takes to get an assessment of everyone. So I can't give you a specific timeline, but we're going to be expeditious about getting to it.

Right. Thanks a lot.

Sure.

[Operator Instructions]

Operator, at this point, we will take one more question.

Your final question comes from the line of David Barden with Banc of America.

Thanks guys for taking the question. Just snuck it in, two if I could guys, just first on tower build completions, could you talk us through kind of the second half, are we still looking for 300 to 400 new builds based on the first half run rate, kind of being well below that. And then the second, maybe Jean, if I could just follow up real quick on the DAS opportunity, I think which has kind of come up on the radar screens since guys like Metro and Leap have been using players like NextG. Are you kind of out there in the market trying to compete head-to-head with those kinds of guys in the metropolitan builds and take share and are you going to be kind of on the opposite side of the desk fighting for some municipal rights [inaudible] things like that or you guys kind of taking a much more gradual approach or going where other players aren't. If you can elaborate a little bit on what the game plan is in that neighborhood, it would be helpful? Thanks.

To address the first part of your question for CapEx for the remainder of the year, for new builds we're anticipating 300 to 400 for the remaining of the year, that includes... for the full year, I'm sorry, that includes 200 towers that we are planning to build in India and it also includes towers that we're building in our Latin American region.

Okay, so it includes all including the U.S. and all foreign? Okay.

I'll go ahead and move on to the last question there David. Once we decide to move into a product line, you will see us compete vigorously, we've made that decision. So I think our most potent weapon is to add the final component of a comprehensive network-planning program to what we do today. So as you know, we've got very strong relationships with all the carriers, the emerging carriers as well as the existing national majors. We can now go to them with the capability of offering not only the tower portfolio that we have of 20,000 sites in the U.S., 160 plus indoor DAS, the 2,000 rooftops that we have got on our book to market and now also the final piece of the puzzle which is outdoor DAS. So we have got a team dedicated to getting the rights-of-way, we're out getting our [inaudible] licenses and in fact having number of those already under our belt across the states. Our municipality is getting all attachment rights as we speak and we are looking at some acquisitions as well. So we're going to compete vigorously at this, we already have started and we just think it's another piece of the puzzle although a niche piece, a small piece that will help us drive growth with our overall customer relationship.

Alright. Great. Thanks guys.

And Dave, just to clarify on the earlier part of your question, this is Michael, the 300 to 400 in our existing markets, so that was U.S, Mexico, and Brazil, India is in addition to that. So, in reality we are guiding to about 500 to 600 tower belts for the full year.

Okay. Good. That's helpful. Thanks guys.

Alright. Okay. Thanks for joining us everybody and I appreciate your interest and questions today. Have a great week.

This concludes today's American Tower Second Quarter 2008 Earnings Conference Call. You may now disconnect.