Good morning. My name is Don, and I'll be your conference operator today. At this time, I would like to welcome everyone to the American Tower Fourth Quarter Full Year 2010 Conference Call. [Operator Instructions] Ms. Leah Stearns, you may begin your conference.

Thank you and good morning, everyone. Thank you for joining American Tower's Conference Call regarding our Fourth Quarter and Full Year 2010 Financial Results. Please note that we have posted a presentation on our website, which we will refer to throughout our prepared remarks. Our agenda for this morning's call will be as follows: I will provide a brief overview of our fourth quarter and full year 2010 financial results; then Tom Bartlett, our Executive Vice President and Chief Financial Officer, will review our 2010 performance and provide an overview of our expectations for 2011; and finally, Jim Taiclet, our Chairman, President and Chief Executive Officer, will provide closing remarks. After these comments, of course, we will open up the call for your questions. Before I begin, I would like to remind you that this call contains forward-looking statements that involve a number of risks and uncertainties. Examples of these risks include those regarding our 2011 outlook, our pending acquisitions, our consideration to elect REIT status 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 September 30, 2010 and then 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 subsequent events or circumstances. And with that, please turn to Slide 4 of the presentation, which provides a summary of our fourth quarter and full year 2010 results. Highlights from the fourth quarter included…

Thanks, Leah, and good morning, everyone. I'm pleased to report that our business continued to produce strong results in the fourth quarter, positioning us well for 2011. If you'll please turn to Slide 5, you'll see that for the quarter, our total Rental and Management revenue increased over 23% to more than $536 million. Adjusting for the impact of FX, straight line and a one-time $8.9 million revenue item that occurred during the fourth quarter, the core growth in total Rental and Management revenues was nearly 14%. Turning to Slide 6, continuing with some highlights from our Domestic Rental and Management segment for the fourth quarter, revenue increased 17% to over $420 million, and our sites ended the year with an average of 2.6 tenants per tower. Please note that our domestic revenue benefited from an increase in straight-line revenue, as well as the one-time $8.9 million item I mentioned earlier compared to the prior period. In addition, and as I've highlighted in our previous earning calls this year, three discrete items negatively impacted our results during 2010. These items included the impact of broadcast analog churn, the completion of a customer take-or-pay agreement and a customer settlement. Excluding the impact of straight-line revenue recognition, the one-time $8.9 million revenue item from the quarter and the three discrete items domestic revenue growth would have been about 10%. For the quarter, our Domestic Rental and Management segment gross margin increased over $55 million or 20%, which reflects a year-over-year conversion rate of 91%. And finally, our Domestic Rental and Management segment operating profit increased 18% to just over $315 million. Please note that the impact of the one-time $8.9 million benefit to revenue this quarter was offset by one-time direct and overhead costs incurred during the fourth quarter of the year.…

Thanks, Tom, and good morning to everyone on the call. I'd like to begin my remarks by saying thanks to our employees for delivering such great results and to our customers for their confidence in us to host much of their network infrastructure. Today, I will outline our view of the business environment, within which American Tower operates, and how our company strategy is designed to take maximum advantage of this favorable environment. In the U.S., the single most important factor in our business environment is that AT&T Mobility and Verizon Wireless are being very aggressive in advancing both 3G and 4G mobile broadband services. In their most recent public statements, both companies were clear on their views that mobile broadband subscribers provide dramatically higher ARPU and greatly enhanced customer loyalty, which mitigates churn. Both companies were also clear in their increased commitment to investing capital in both 3G and 4G networks. Moreover, both AT&T and Verizon have the spectrum resources, financial capacity and supplier relationships with the likes of Apple, Google and others to aggressively drive mobile broadband penetration. Given this trend, being able to offer credible, competitive 3G and 4G mobile broadband services has become a strategic imperative for any national wireless carrier in the U.S. As a result, we believe that Sprint Nextel and T-Mobile USA will also vigorously pursue the deployment of 3G and 4G mobile broadband services. To deliver on this objective, each of these companies will also have to gain access to adequate spectrum resources and top-tier supplier relationships while committing the requisite financial resources to provide advanced data services. So in sum, we believe that the U.S. wireless industry is in the relatively early stages of a multiyear investment cycle that will result in four robust competitive mobile broadband networks, complemented by regional…

[Operator Instructions] And our first question comes from the line of Brett Feldman with Deutsche Bank.

Just to talk about the planned reconversion. You mentioned how you may have to make a distribution to your shareholders, potentially accumulated earnings. How do we go about estimating what that looks like? I mean, if we just simplistically look at the balance sheet, you have an accumulated deficit. So it looks like there wouldn't be anything to distribute. I'm just wondering how much that's going to be influenced by, say, the way you do your internal reorganizations?

Brett, it's Tom. It won't be a function of our internal reorganizations, if you will. And it is a very difficult long process, I must say, that our advisors and our internal tax groups have gone through to determine it. And it's a function of going back and looking at the details from a tax perspective of results since the beginning of time. So it's almost impossible to try to correlate it with what you may see on our GAAP financial statements. We will, as our board approves, would look to approve a distribution in the future, we will be providing more color on that clearly. It's not a material item, as I have said in the past. I don't think it's a significant item going forward. But we will be providing a lot more color on that throughout the year.

When we look at sort of the core growth in the business, as you detailed very clearly, you're doing better right now on the top line than you are on the bottom obviously because of the investment you've been making, particularly international markets. Can you give us a little color to think about at what point we might start to see some of the operating leverage kick in, an acceleration in EBITDA growth and acceleration in cash flow growth?

Well, and that's what we've been trying to do with our conversions rates and kind of giving you a sense of what kind of conversion we've had in our legacy sites, in the domestic, it's over 90%. And if you take a look at the new domestic disclosure that we've had, you can actually see growth in that business and from a margin standpoint, on a quarter and a year-over-year basis. What we hope to be able to continue to do, Brett, is continue to invest in these markets domestically, as well as internationally, to continue our top line growth going forward for many years to come. But I think the Domestic business is a reflection because we did acquire a fair amount of sites in the United States during 2010, and you can still see the kind of revenue and profitability accretion in the marketplace. But as I said, we hope to be able to do both revenue growth, invest and be able to maintain the margins. As I mentioned in my remarks, without pass-through, our margins are at over 70% and they’ve been that way for the last two years, and we're planning on at that level in our outlook for 2011.

Brett, it's Jim. Just to complement what Tom is offering here, we're essentially setting out growth platform for the future. And I think as we move through the rest of 2011 and beyond, the revenue growth that is going to be built off that platform is going to be pretty exciting. And then, as Tom said earlier, the actual SG&A platform itself should not need to grow much more after 2011.

And our next question comes from the line of David Barden with Bank of America.

First, Tom, I guess what I saw on the slide was 10.8% domestic core growth year-over-year. If we took out some headwinds, it was north of 12%. But I think in your comments about the forward-looking guidance for the domestic core growth, you're only looking for 8% to 9%. Obviously, Jim, you've been talking about expectations for a better year-over-year in terms of leasing performance. So could you kind of bridge the gap between what should have been a 12.6% growth year in '10 but now kind of guidance that looks at an 8% to 9% domestic core growth rate in '11? And the second question I had for I guess either Jim or Tom was this Brazil situation, could you elaborate a little bit on what's going on? It looks like you're paying north of $700,000 per tower to get this thing done on March 1 but then there's a clawback potentially based on a review of the financials. It just looks strange relative to how smooth a lot of the international stuff has been to this point in time.

David, it's Tom. With regard to the growth, the 16% growth that I was talking about before was on a consolidated basis. The U.S. growth, if you're looking at the kind of 2010 growth, is in the kind of the 11% gap growth. We're looking at kind of 9-ish, 9-plus percent growth, if you will, on GAAP growth. And our core growth in 2011 will be roughly equivalent on a consolidated basis to our GAAP growth of 15%. So I think you were comparing the consolidated versus the Domestic growth trends. So hopefully that clears that up. Relative to Brazil, first of all, on the valuation, we're paying roughly 11x to 12x cash flow. The typical sites that we are picking up are higher-valued sites, good tenancy, good opportunity for growth, largely in the Sao Paulo area. So I think relative to the EBITDA and the valuation, it's a very attractive transaction for us and further solidifies our position with our existing customers because those towers that we're acquiring have a similar distribution of customers as we do in our larger portfolio. Relative to the timing of the transaction, we have an agreement in place. We do expect to close this in the very near future. The reason that I didn't include it in outlook is that we're still working through exactly the impact of this business on our existing operations. We're integrating it into our existing operations. We don't expect it to be significantly different from those numbers that I actually included in my remarks. But I didn't include it in outlook, and will include it in outlook once the transaction closes.

And, David, it’s Jim. You can be assured, we approached this particular deal with the same discipline and process that we have for Domestic, International deals in the past. Now I would look at this particular business as a third party tower operator as kind of the SPECTRO site of Brazil. It's really a strong number to us. We really like the business, they've leased it up nicely and we're paying 11x to 12x cash flow for it, which in that market, we think is quite reasonable for a good asset.

And our next question comes from the line of Jason Armstrong with Goldman Sachs.

Maybe first question on technology, since a lot of people are focused on it now. Can you comment on these light radios from Alcatel-Lucent as they’re obviously getting a lot of attention? Can you help us just gauge the risk and how you would think about it? And then second on guidance, you’ve had this carrier category with questionable financing, whether it's Clearwire, LightSquared, et cetera. I'm just wondering to what extent incremental activity is embedded in your 2011 expectations with them.

Jason, it's Jim. On the technology front, we actually look at the light radio product as an early-stage technology that's an opportunity for our company in a couple of dimensions. One is, we think we can potentially use it in our DAS systems being an advancement to what we have available today if the promises that are being made by the OEM are going to come true. So there's a plus there for us. And secondly, this is a technology that our external and internal engineer advisors tell us is more suited to really dense urban environments where there really aren't any towers proportionally today. So we see this as a benefit to our carriers and the tough spots where the tower access isn't there anyway. It will make them more successful and then therefore, it will make them able to invest more in the macro sites where we do provide coverage. So that's the summary on that one. As to Clearwire and LightSquared, they're de minimis in our guidance that Tom laid out for you today. The only prospects we have in there is some current market upgrades in Clearwire, and it's very small. Essentially nothing for LightSquared in the outlook.

If you put some numbers on it, no LightSquared and Clearwire is less than half what we have had in 2010.

And our next question comes from the line of Gray Powell with Wells Fargo.

I know you touched on this before, but can you compare the organic growth rates that you saw in Mexico, Brazil and India in 2010 to that of the U.S.? And then, just as we look into 2011, can you provide any insights on carrier initiatives that could impact the current trajectory?

Gray, this is Tom. Let me look at it because David asked the question before in terms on a consolidated growth and organic growth. As I mentioned before, at the consolidated level, GAAP consolidated growth was 16% in 2010. And we've just laid out a forecast that we'll get that roughly to 15%, which is equivalent of core growth in 2011. Our GAAP kind of same tower growth on a consolidated basis was in the 9% range on a consolidated basis, and our core growth overall for the year on a consolidated basis was about 11%. And our core same tower growth organic was in kind of in the 4% to 5% range. On the U.S., just looking at the U.S. on a consolidated for Domestic business, our GAAP growth was about 11%. Our GAAP same tower growth or organic growth was about 9%. Our core growth was in the 7% to 8% and our core same tower growth was in the 5% to 6% range. And as I mentioned in 2011, our GAAP and core growth will be in that kind of 9% range, 90% of that being organic. At the consolidated International level, our GAAP core growth is over 40%, as I talked about a few minutes ago, and our GAAP same tower organic growth is around 10%, with our core growth in International being roughly 30%. If you peel that one back, it does vary significantly from market-to-market. I mean, India, as you would expect, it had a significant GAAP growth. It also had a significant amount of growth that came from acquisitions. Brazil had GAAP growth in the 20% to 25%, if you will, in 2010. In 2011, we're looking at that probably going down to about the 15% range. And in Mexico, we had GAAP growth, significant GAAP growth, if you will, of about 6% to 7%. GAAP same tower growth was about 6% to 7%, and we would expect that to maintain itself in 2011.

I'm just trying to get a sense as to like which markets you guys are most bullish on? And then there have been spectrum auctions in Mexico midyear and also in Brazil. Just kind of what kind of impact you’d expect leasing activity in those regions to have on the organic growth rates excluding acquisitions?

Gray, this is Jim. I'll give you a brief tour kind of around the world as to what we see. In the U.S., as I stated in my remarks, AT&T and Verizon we think are going to lead the pack this year and really try to get those customer enhancements and benefits that they see by giving increased penetration and a higher level of Smart phone and other devices. And with that, we also believe that Sprint Nextel and T-Mobile are going to have to figure out a way to stay on that trend as well. A lot less, as Tom mentioned, from any emerging carriers on the order of LightSquared or Clearwire. And also, we'll have modest contributions from MetroPCS and Leap and the other regionals as well. So it's going to be, again, in U.S. market, in 2011, we believe driven by the AT&T and Verizons, the other national carriers complemented by the rest of the carrier group there. If you move down to Mexico, there has been a spectrum auction that will be very interesting we think for us because Nextel was a significant winner of licenses. We understand and expect that they'll be driving a 3G overlay. Many of those installations will be on our towers with them that we already have in Mexico. Also in the Mexico City area, Telefónica garnered some licenses. We acquired a few leases with them. Again, an opportunity for some nice amendments and new tower installations there as well. If you go further south in Brazil, a similar story. There were spectrum auctions completed in late 2010. We think by late 2011 that, again, Nextel, who is a big winner of those licenses, will be rolling out 3G in Brazil. And then as you go to the markets in Colombia…

And our next question is from the line of Simon Flannery with Morgan Stanley.

First on the international assets, obviously lot of growth potential there. Can you help us in terms of the REIT election status, does that put any sort of significant limitations on how substantial that business can become as part of your overall strategy? And are you thinking ultimately that's a 25%, 30% part of your business, or could you take it to 50-50 on sort of EBITDA, on revenues and so forth? And then the second one is on leverage, on a forward basis, your leverage is almost at 3x now. How are you thinking about, given the attractive financing rates and so forth, how are you thinking about optimal leverage here given your expectations for 2011 both in terms of acquisitions and free cash flow generation?

Simon, it's Tom. With regards to the REIT international, not at all. The REIT does not get in our way at all in terms of how we're growing any part of our business any part around the world kind of full stop. With regards to the leverage, we continue to believe that the 3.5x is really our sweet spot and kind of our target leverage, our range is still the kind of 3x to 5x. We do have over $800 million of cash sitting on our balance sheet largely as a result of what we raised at the end of last year. And that was really in anticipation of a lot of the transactions, the kind of the 4,000 towers that I laid out, and Jim and I laid out before. So I mean that cash was earmarked for these deals that we have planned. And so we remain committed to the 3.5x. And our philosophy is not to go out into the market and raise cash ahead of time significantly just because the rates are sufficiently low. We want to make sure from a capital allocation process that we've got a use of proceeds and a use of cash, and we'll continue to manage it that way. That's been our philosophy, and we’re firmly committed to that.

And, Simon, it's Jim. Just to cycle back to the proportion of revenue that we're targeting for international, the public statement is still 25% to 30% is what we're looking for. If and when we achieve that range, we'll update it for you. But right now, we're looking for 25% to 30%. And the U.S. as I've said, is growing both in assets and in organic growth right along the way. So it's quite an endeavor to keep up or exceed that growth level.

And our next question comes from the line of Phil Cusick with JPMorgan.

One question on the progress of talking to Sprint about the iDEN network. I know one tower company has gone out and done some things to give Sprint a little more flexibility. Can you give us an update on how you're thinking there?

Phil, it's Jim. We don't speak to specific customer negotiations. But what I will tell you is that our performance with Sprint has been, as it’s historically been over the last few years, meaning we've had almost 100% renewals on iDEN and Sprint sites recently. We treat that contract base as something that’s very precious for us. We are not going to make concessions, frankly, on cash for a straight line. That's not an approach we would take. And we're going to work with Sprint to try to make them successful while maintaining and sustaining our contract and our revenue base position with them.

There's a lot of chatter that a national public safety network could be built out. Are you guys starting to look out and talk to these guys or even thinking about it in your numbers at this point, or is it sort of pie in the sky?

Phil, yes, it's Jim. I have spent time in Washington, as have others, proposing that this is the best, most effective answer from a public policy perspective, which is government-owned spectrum managed by the federal government in collaboration with local first responder organizations, but that the network itself could be operated on an outsourced basis by a current carrier who could bring the technical and management expertise to do that. This idea seems to be getting traction. So we're pleased that maybe we've had a little bit of positive input into that process. Having said that, you still need funds to go ahead and roll that kind of a project out. There are significant funds that will be required. It may or may not be tied to some spectrum auctions a little bit down the road. But we do think, again, if you're taking a decade-long perspective like we are here, that it's a fairly reasonable probability that by the end of the decade, we have a national public safety network.

But you ramped up your ground lease acquisition rate this quarter and your rate for 2011 is a little higher than you were doing in 2010. Has your philosophy changed a little bit on this? Are you going to be more aggressively going back to that? Or is this just we have the capital and we're going to go sort of deploy some?

Rick (sic), this is Tom. I don't think our philosophy has changed on that. I think we've just found ourselves focusing more in on some of those higher cost sites, if you will. And we've found ourselves having kind of the right people on our team to be able to help negotiate those things and work through those things. So we had great success, I think, in 2010 generating some good rates of return, and we're going to continue that and commit more capital to it in the hopes of being able to achieve those same levels of returns.

And I'll turn the call back over for closing remarks.

This is Tom. I really want to thank you all for joining us. Jim and I and the employees of American Tower are really pleased to report the earnings today. We're very proud of them. We think we're well positioned for 2011. 2011 is going to be an exciting year for us given the integration activity that's going to go on within the business, all of the acquisitions that we have planned and to further working to make ourselves REIT ready by the end of the year.

And from an overall environment perspective, again, thanks for everyone being on the call. We are strong advocates of the belief that broadband mobility is going to be and continue to be a pervasive and desirable product for consumers. And the U.S., that's going to be a leading market for these kinds of products. We're well positioned here. And we also believe that as time goes forward, depending on the specific country, that same phenomenon is going to get traction over the next few years. We're positioning ourselves both in the U.S. and in selected places overseas to take advantage of the primacy of mobile broadband and through 3G and 4G service for millions and millions of people literally around the world. So that's our investment thesis, we hope you share it, and we thank you for being on the call this morning.

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